Long drought in Russia's arms sales to Latin America

Russia has not sold arms to Latin America for five years now. Without conflicts or direct threats to its security, the region is usually at the bottom of the list in arms purchases. However, the important income that its countries had thanks to the commodities boom led to an increase of expense and Russia was the provider most benefited, coinciding with the anti-US front encouraged by Hugo Chavez. With the end of that singular economic period ten years ago, the acquisition of armaments has decreased and so has Russia's role. For the time being, Moscow's interest in penetrating an area of traditional US influence, returning the pressure Washington applies to Russia in Ukraine, has not translated into a resurgence of its arms trade with Latin America, in which the present economic crisis weighs heavily.

Russia is the second largest arms exporter in the world, after the United States and ahead of France, China and Germany. For its part, Latin America constitutes a large market that during the economic boom of its 'golden decade' (2004-2014) increased significantly its volume of purchases, especially in its first five years. Coinciding this, in the political sphere, with the so-called 'Bolivarian cycle', this increase of the military expense gave priority to Russia as provider, which occasionally surpassed the United States as the main arms supplier to the region, thanks mainly to the orders from Hugo Chavez's Venezuela.

After the economic boom period, however, total arms acquisitions declined. If in 2010-2014 military purchases by Latin America accounted for 10% of global arms transfers, in 2015-2019 they fell to 5.7%, representing a 40% drop between the two periods.

SIPRI 's latest report refers to the most recent 2017-2021 timeframe, which has been the five-year period with the fewest arms purchases in the last half-century in the case of South America. In 2017-2021, arms imports from South American countries fell by 55%, marking an accentuation of the trend, fully in line with the economic downturn: the end of the commodity supercycle was followed by the pandemic crisis and, in its aftermath, the problem of high inflation has spread.

In recent years, only Brazil has maintained a substantial expense , albeit in the issue 33rd place in the world and with a 17% drop compared to the previous period (although it has pending the submission of 1100 armored vehicles, 5 submarines, 4 frigates and 31 combat aircraft), followed by Chile, with an increase of 16%. The former accounted for 37% of the arms imports carried out in South America, and the latter for 21%.

The drop in arms imports has been accompanied by a decline in Russian prominence in Latin America. Since 2017 no country in the region has purchased Russian arms, and in 2017 only Nicaragua did, already below its previous purchasing volumes. In 2015 and 2016 there were only three buyer countries: Brazil, Peru and Nicaragua. Venezuela's last acquisitions were in 2014, while Mexico's were in 2012. In 2015-2019 Russia made only 0.8% of its exports to Latin America - returning to the reduced level prior to the boom already described - and has not made any more since then. In their dwindling purchases, Latin American countries have kept other suppliers.

Russia's global sales performance

The Covid-19 crisis and the Russian invasion of Ukraine have shaped the dynamics of international trade, including arms sales and purchases. Following the pandemic, Russia's GDP fell from $1.69 trillion to $1.47 trillion, while the public expense on defense fell from $65.2 billion to $61.71 billion, down 9.49% and 3.94% respectively. Although the Russian Economics has been hurt by the war, it pushes to an increase of the militaryexpense , which already in 2021 grew by 2.9%, reaching $65.9 billion.

It remains to be seen how international sanctions affect the Russian military industry, as Russia is finding ways to offset their negative impact by increasing trade relations with several countries in the Middle East and Asia. The need for supplies for its own Army in Ukraine, which conditions the current Russian production of military equipment, limits its export capacity; however, there are weapon systems that exceed Russian urgencies on its fronts and from the export of which a revenue-starved Economics can feed.

Between 2017 and 2021, just before the start of the invasion of Ukraine in February 2022, Russia's arms exports decreased from the 24% they accounted for globally to 19% in 2011-2016. Its sales were concentrated in four countries (India, China, Egypt and Algeria), which accounted for 73% of its transfers. 61% of its exports went to Asia and Oceania, 20% to the Middle East, 14% to Africa and almost 5% to Europe (in the case of Latin America, in that period there were only Russian arms sales in 2017, to Nicaragua).

Reasons for the decline in Latin America

As already noted, the main reason for the drop in Russian arms purchases in Latin America is essentially economic. While in the so-called 'golden decade' the price of raw materials rose sharply, allowing states in the region, mostly dependent on those exports, to modernize and increase their military capabilities, the end of the economic boom years in 2014 meant that countries reduced their military expense . Then came the Covid crisis and the current inflationary period, which have put particular stress on national budgets.

However, there are other reasons. One has to do with the political situation. The leftist governments aligned with ALBA -the regional political front organized by Chávez- prioritized with their economic income at that time, in several cases, the purchase of arms from Russia. In special financial difficulties now, several of them, the countries that have continued spending more in armament are not those that were framed in "Bolivarianism". Brazil is the largest importer, and in recent years has had Franca, Italy, the United Kingdom and the United States as its main suppliers. Mexico, which in the past had made purchases from Russia, only made some purchases in 2020 and 2021 and went to other countries, mainly the Netherlands and the United States. Peru's last purchases, in 2016, came basically from South Korea and Spain.

Not even the dictatorships into which two of the countries in the Bolivarian league have drifted have placed their orders with Russia. Nicaragua made isolated purchases in 2021, from the Netherlands, while Venezuela bought in 2020 from the Netherlands and Spain.

The U.S. Countering Adversaries Through Sanctions Act (CAATSA), enacted in 2017, has also contributed to this reduction in arms purchases from Russia. This is the case of Mexico, which in 2020 intended to purchase Russian helicopters, but preferred not to be harmed by Washington's rules and regulations . This law threatens to impose sanctions on those who trade with Russia, Iran or North Korea in subject of technology and military equipment. The region has thus sought new trading partners such as Sweden, France and South Korea. The United States continues to be the largest arms trader in Latin America partner .

Another aspect that may influence the marketability of Russian weapons is their Degree of development technology. While Russia's 2008 military performance in Georgia was a success, it was clear that there were certain shortcomings in its weaponry. Therefore, in 2010 Russia announced a ten-year modernization plan for its military equipment, increasing its defense budget and allocating $650 billion to renew its military. Moscow has made an impact on the market with some developments, such as its anti-aircraft defense systems, but the invasion of Ukraine is demonstrating, even more than the Georgian campaign, the obsolete nature of much of the Russian material, which is damaging its image as an arms exporter. Nor financial aid to its reputation the fact that Russia has to count for its campaign in Ukraine with the financial aid of some lower level country, such as Iran.

On the other hand, the confrontation between Russia and Ukraine since 2014 already subtracted Moscow a prominent customer, since between 2009 and 2013 the dependence of Ukrainian military components and subsystems on Russia was close to 87%. Kiev's subsequent rapprochement with NATO and the present conflict leave Russia without that neighboring market, which has reinforced its commercial shift towards Asia (with new customers such as Myanmar, Malaysia and Indonesia). It should also be borne in mind that this Asian orientation will be reinforced by economic sanctions and the need for new markets for its hydrocarbons.

Although in the Ukrainian crisis of 2014 Moscow announced its interest in having military instructions with Nicaragua, Venezuela and Cuba -a desire to put pressure on the US in its 'backyard', something expressed again eight years later when the present conflict broke out-, the truth is that this has not happened and the economic relationship has not made any leap either, not even in the armament order. What is more, with the arrival of the center-right governments in Brazil, Chile and Argentina, when the end of the boom in the price of raw materials also coincided with the end of the Bolivarian political cycle, the purchase of arms from Russia dropped considerably. Although the ideological issue played a role, economic difficulties weighed above all, so that a subsequent new wave of leftist presidents has not led to a revival of arms imports from Russia, at least for the time being.

The war in Ukraine pushes the Kremlin to seek allies in the world, and one area of interest to Moscow is arms exports. In August 2022, at the opening of the Army-2022 International Military-Technical Forum, Putin stated that Russia appreciates its strong ties with Latin America, Asia and Africa, and is ready tooffer partners and allies the most modern types of weapons from small arms to armored vehicles and artillery, combat aircraft and unmanned aerial vehicles.

In the votes held at the UN, most Latin American countries have condemned Russia's aggression against Ukraine (the resolution of February 23 only had the rejection of Nicaragua and the abstention of Bolivia, Cuba and El Salvador, in addition to the absence of Venezuela). However, the larger countries - Brazil, Mexico, Argentina and Colombia - have generally wanted to maintain an apparent equidistance, which rather benefits the Kremlin. On that basis, the sale of Russian arms to the region can grow again, but for it to be effective, it has to make an economic recovery that allows a greater military expense .