Between 2005 and 2016, Brazil experienced a quite linear and significant increase in military spending, in terms of absolute figures. It is indicative that in 2005, total defence spending for the country was some BR $33 billion (approximately US $10.4 billion), while in 2016 it reached BR $85.7 billion (approximately US $27 billion) – the 13th highest Defence budget worldwide for that year, following Italy (11) and Australia (12), (see infographic below). These amounts, indicate a phenomenal increase of the Brazilian Defence Budget, by some 148%, in just a decade (2005-2015). Further, forecasts for 2017, indicate a further rise of the Defence Budget by almost BR $7 billion, to BR $93 billion overall.

The wheels of the post-war Brazilian defence industry started turning in the 1950s, with the prominent actors being the state-owned companies. The 1960s, meant the expansion and systematic development of the Brazilian defence industry, leading to the establishment of the three largest Brazilian arms firms, namely Avibrás Aerospace Industry in 1961, Engesa in 1963 and Embraer in 1969.

The Brazilian defence industry experienced its so-called “golden years” in the 1980s (8th largest exporter of defence materiel worldwide), as exports reached a peak of an average of US $1 billion per year. Brazil became a global player in the production and export of arms, especially in the arms market of the third and developing world. It is indicative that it was the 11th biggest supplier in the world, for the period 1984-88. In that decade, Engesa exported a broad spectrum of armoured vehicles, such as Cascavel and Urutu mainly to South American and North African countries, whereas Embraer exported the Tucano/Short Tucano trainer aircraft, which was purchased among many others, by the reputed Air Forces of France and the United Kingdom.

However, the late 1980s and early 1990s brought a sudden and drastic halt on the activities of the Brazilian defence industrial sector. This was attributable to a significant extent, to the end of the Iran-Iraq war, given Iraq was the largest buyer of Brazilian arms and equipment during that period.

According to the AIAB (Association of the Aerospace Industries of Brazil), the Brazilian Aerospace Industry is the largest in the Southern Hemisphere. Consisting of aeronautics, space and defence companies, the local aerospace sector offers a variety of products, ranging from on-board equipment and air traffic control systems, to integrated aircraft, helicopters and engines.

Today, Brazil exhibits an established aerospace manufacturing sector, best known for the production of regional and business jets, while Brazilian aircraft manufacturers also produce helicopters, turboprop, military, general aviation and agricultural aircraft.  

More specifically, local aeronautical companies offer not only manufacturing capabilities, but also MRO services, as well as design, customer support and sales services. On the other hand, local companies active in the Space sector are able to produce small satellites and related structures, payloads, ground systems, propulsion items, rockets and launchers. They further offer satellite imaging and processing, consulting and other specialised services. Local Defence companies on the other hand, are able to design, manufacture and deliver aircraft tailored to specific mission requirements, as well as weapon systems, non-guided and guided weapons, associated equipment and related systems integration.

According to AIAB, total exports of the sector amounted to some US $5.8 billion in 2015, significantly increased over the average exports per annum (of US $5.3 billion), over the period 2010-2014.

According to Stockholm International Peace Research Institute (SIPRI), during the period 2005-2015 Brazil exported defence equipment to 19 countries. The top 5 byers of Brazilian defence equipment were Colombia, Ecuador, Indonesia, Chile and Afghanistan.

In 2014, Brazil recorded the largest increase in arms sales (24.7%) among the emerging producer states’ (including Brazil, India, South Korea and Turkey), benefiting from significant domestic spending on weapons acquisitions, as also increased export sales.  

In recent years, significant export deals of Brazil included a commitment for a total of 32 KC-390 units, ordered by Chile, Portugal, Czech Republic, Argentina and Colombia, as discussed in previous.

Another successful product of Embraer, has been the Tucano light trainer and attack aircraft in its various versions, including that of the Super Tucano. Specifically, some 200+ aircraft of the latest and most advanced version of the aircraft (i.e. the Super Tucano) have been built since 2003 and are operated by 10 nations worldwide to date (namely Afghanistan, Angola, Brazil, Burkina Faso, Chile, Colombia, the Dominican Republic, Ecuador, Indonesia and Mauritania).

In addition to military aircraft, Brazil also produces and exports to a smaller extent certain naval equipment. One such example, was the purchase of 7 Macae-class patrol boats, as agreed in late 2014, by the Angolan Navy. Four of the vessels were planned to be constructed in Rio de Janeiro by Brazil’s Empresa Generencial de Projectos Navais (EMGEPRON), with the other three to be built in Angola.

Brazil has over 400 companies with a direct defence capability and several others that provide products and/or services to the defence industry in a supporting role.

Embraer, is the sole Brazilian company, among the top 100 arms suppliers worldwide. Dropping to number 88 of SIPRI’s related list for 2015 (from the 61st position it held in 2014), the company recorded some US $810 million of arms sales in 2015, reflecting however a 28.1% decline in its arms sales from the previous year, largely as a result of reduced state orders for defence equipment, due to defence cut backs. Embraer’s KC-390 medium-size, twin-engine jet-powered military transport aircraft, is Brazil’s first new military product, in more than a decade, and it can be characterized as a strategic product that will elevate the country to a higher status in the international aerospace & defence industry and aid it evolve as an ever more influential regional player and growing world power.

Apart from Embraer, other significant Brazilian aerospace & defence companies include Helibras (part of Airbus Helicopters), AEL Sistemas (part of the Elbit Systems Ltd. group), AKAER, AVIBRAS, AGRALE (produces utility vehicles), CBC (Companhia Brasileira de Cartuchos), CONDOR (produces non-lethal weapons), EMGEPRON (produces various types of naval vessels), ICN (Itaguaí Construcoes Navais, part of Odebrecht group), Glagio do Brasil, Krauss Aeronautica e Comercio de Aeronaves, SONACA Brazil and Latecoere do Brasil. Moreover, many international companies have subsidiaries in the Brazilian territory, including Boeing, Leonardo, BAE Systems, SAAB, Thales and DCNS.
The Brazilian state, has been a vital and strategic ally in the efforts of the defence industry to re-establish its place in the international market. As other Latin American countries, Brazil has in recent times focused on further developing its indigenous defence manufacturing capabilities, through several enablers, including the use of offsets/industrial collaboration.

By adopting a strategy of constantly rising defence budgets, a steady ‘injection’ of funding in the local defence industry has permitted among other items, the completion of strategic projects such as the KC-390, which as discussed, may potentially transform the country into a key global player. Further, the systematic insistence of the country on demanding the transfer of ‘key’/advanced technologies to local companies, as a prerequisite for the award of any major defence procurements by the country, will most certainly contribute towards the further growth and rapid technological advancement of the national defence industry.