Netherlands Antilles’ Break Up Continues as Its Geopolitical Importance Mounts

by COHA Research Fellow Alex Sanchez
07 Apr 2009
Council on Hemispheric Affairs
http://www.coha.org/netherlands-antilles%E2%80%99-break-up-continues-as-its-geopolitical-importance-mounts/

- May 15 referendum in Curaçao crucial for future of the Antilles’ dismantling process
- U.S. military and DEA presence in Curaçao and Aruba likely to grow
- Caracas’ motivations include Chavez’s populism and business interests
- Combating drug trafficking and changing tax-haven laws show improvement
- If dismantling is a success, will independence follow in the near future?
- Even with The Hague’s help, Curaçao and Sint Maarten should be wary of sharks

The upcoming May 15 referendum in Curaçao is sure to have important repercussions for the political future of the Netherlands Antilles, a group of islands located in the southern Caribbean, which make up part of the Kingdom of Holland. One of the last remnants of overseas colonial territories in the Caribbean, the population of each island making up the Netherlands Antilles has divergent perspectives regarding what future ties their home-islands should maintain vis-à-vis Holland: autonomy within the Kingdom, or maintaining the status quo.

Devoid of ample natural resources and heavily dependent on tourism, the option of independence for many of these islands represents a paramount challenge. Within an international context, the autonomy of Curaçao and Sint Maarten (which could eventually lead up to full independence), may serve as a catalyst for other overseas territories to also pursue self-rule. Furthermore, the Netherlands Antilles are known for being tax havens and offshore financial centers by international organizations, hence a new political status may, ostensibly, prompt local leaders to agree to disclose the financial secrets of their clients. Finally, the geographical location of Curaçao, the Netherlands Antilles most populous island, makes the island’s politics important vis-à-vis Washington and Caracas, as both are know to have interests there.

Leading up to Today
The Netherlands Antilles consist of the “Leeward” islands, including Bonaire and Curaçao, and the “Windward Islands” which include Saba, Sint Maarten and Sint Eustatius. The islands are self-governing, with Holland overseeing defense and foreign policy matters, (according to the Charter for the Kingdom of the Netherlands Dec 15th 1954, Article 3).

In 1993, a referendum confirmed the status of all islands within the union, despite earlier talks that debated their constitutional basis. Subsequently, the population of the islands realized that the idea of being semi-autonomous territories within the Kingdom was no longer plausible, especially from a political and economic viewpoint. In June 2000, Sint Maarten held a non-binding referendum in which 69 percent of the population voted for status aparte; meaning autonomy from the federation within the Kingdom of the Netherlands. In late 2004, the citizens of Bonaire (59.5 percent) and Saba (86 percent), voted to remain part of the Netherlands.

Moreover, nonbinding referendums were held in 2005, in which, 68 percent of voters in Curaçao chose status aparte, and 76.6 percent in St. Eustatius voted to remain a part of the Netherlands Antilles. The referenda were thus interpreted as the final move necessary for the government of the Antilles to negotiate with the Kingdom. On December 15, 2008, Dutch Prime Minister Jan Peter Balkenende met in a round table discussion with the delegates representing every island.

Mixed Feelings and Objectives
In June 2008 Curaçao residents protested The Hague’s plan to oversee the finances of the island after more than 50 years of financial autonomy. Compared to neighboring dependencies making up the Netherlands Antilles, Curaçao, an island of 140,000 inhabitants, seems to be most positioned to seek full autonomy from Holland.

The BES islands (Bonaire, St Eustatuis and Saba) have voted to integrate with the Kingdom. The major reason for this decision is that they believe they would be hard pressed to survive as independent political entities. In turn, they will receive Dutch assistance and the U.S. dollar will be adopted as the national currency.

The question then revolves around what will be the fate of Curaçao and Sint Maarten, both of which are leaning towards autonomy. Holland has essentially propagated an all-or-nothing plan for the aforementioned islands, in which each must be ready to either accept or forgo autonomy. The demands articulated by the Dutch government stipulate that both islands must improve their local economies and have functioning political institutions that will address corruption and other crimes, including human rights violations.

The citizens of Curaçao have protested being “tied up” with Sint Maarten, arguing that this is how The Hague aspires to keep both islands under its control. Curaçao officials argue that their island would, in effect, have to assume the role of Sint Maarten’s chief financial guarantor.

The May 15 Election
As part of the autonomy process Holland has negotiated an economic aid package with the Netherlands Antilles to ensure that any island that chooses autonomy will be in sound financial condition. The aid includes financial supervision and a solution to the Antilles’ national debt, estimated at around $2 billion. Other changes include a native police force and amendments to the Constitution and charter. Holland also seems keen to maintain some kind of oversight over Curaçao’s and Sint Maarten’s judicial system.

A referendum will be held in Curaçao on May 15. A “yes” vote will mean relieving the debt and accepting Dutch assistance in helping the island communities; a “no” vote will prompt Holland to demand repayment of the funds which were sent last January as part of the financing to begin assisting the Antilles repay its national debt. Furthermore, The Hague has hinted that, should the “no” vote prevail, there will never again be an opportunity to mitigate the islands’ debt, and that the autonomy discussions that have dated back to 1993 will cease. This is particularly troubling since investors, anxious about the political and economic future of the islands, go about assessing the island’s investment viability. The results of the referendum will, therefore, undoubtedly influence such relatively major decisions. “Only in Curaçao is there some resistance to the autonomy process, Sint Maarten will say yes to almost anything,” explained journalist Miriam Sluis to COHA.

Key Point: Drug Trade flowing through the Caribbean
For the prospective nations (most likely Curaçao and Sint Maarten) a key issue prompting autonomy will be the combating of the drug trafficking passing through the Netherlands Antilles en route to European and American markets. This will also test the relationship that The Netherlands will maintain with its by-then, possibly, former semi-autonomous overseas territories. The worst-case scenario is that either Curaçao or Sint Maarten could emulate Suriname, a former Dutch colony ruled for many years by strongman Desire Bouterse, who repeatedly has been accused of being heavily involved in drug trafficking.

In 2007 there was a minor controversy when it was revealed that then Governor of the Netherlands Antilles, Frits, Goedgedrag, had signed a federal decree approving the amnesty of drug couriers on the islands. Instead of jail time, the convicted felons would have their passports revoked for different periods of time, with only individuals who had been awarded prison terms of 30 months or more actually having to serve jail time. Transporting more than 300 grams of drugs seems to be the determining factor as to whether or not a felony would be considered “lite”.

The reason for the decision is that the overcrowded prisons found on these islands have no room for all of the drug “mules” or those found guilty of drug trafficking in the island. Poverty, as well as drug consumption, is pervasive in Curaçao, hence locking up minor offenders would ultimately prove counterproductive. Accordingly, only the island’s most egregious criminals actually receive prison time. The problem is that, if this situation is transpiring while the Netherlands Antilles are still part of Holland and while it is still receiving major financial aid for infrastructure and other projects, it is unclear if islands like Curaçao and Sint Maarten will be able to improve detention centers to any extent after they attain autonomy. “This is a reason why Holland is not keen on dismantling the Antilles,” said Sluis. “Even with autonomy, the Kingdom will want to continue having a say in judicial issues and law enforcement to keep the successful momentum going,” she added.

In an interview with COHA, Dr. Michiel van der Veur, professor of international relations at the University of the Netherland Antilles, explained that “recent figures show that the crime rate is, in fact, decreasing; however, individual crimes committed, have become more violent. As a result of a new radar system, fewer drugs are entering the islands. The Antillean Coast Guard also has stepped up its activity and is patrolling daily and working closely together with the US Coast Guard.” Washington has a presence in Curaçao as it leases part of the airport for anti-drug operations. The detachment stationed there includes U.S. military personnel as well as DEA agents. AWAC aircraft are utilized for monitoring suspicious air and sea traffic in Caribbean waters. Sluis explains that thanks to this anti-drug task force of American, Dutch and Antillean forces battling drug trafficking, “it is still possible to get drugs into Curaçao, but getting them from the island to the markets has become very difficult, hence drugs are being re-routed to the Dominican Republic and other islands.” According to November 2008 article in the daily NRC Handelsblad, in that year 214 tons of cocaine, 166 tons of heroin and five tons of marijuana were intercepted by U.S. patrols taking off from the airbase on Curaçao.

Key Point: Venezuela’s Presence at Different Levels
Another important issue regarding the future of the islands and their impact on regional factors entails relations between Curaçao and Venezuela. Venezuela has claimed ownership of the Netherlands Antilles, with President Hugo Chavez making provocative remarks in recent years over the political status of the islands. According to a 2006 IPS report, then-Dutch Defense Minister Henk Kamp labeled Chavez as a “fanatic populist who has his sights set on Aruba, Bonaire and Curaçao.” Chavez in turn described Kamp as Washington’s “pawn.” The Venezuelan leader added that there is a “natural relationship, perhaps more direct than with the kingdom [of the Netherlands] itself” between Venezuela and the Netherlands Antilles. This relationship has been interpreted by many as an explicit denigration of the island’s sovereignty as long as the status quo is allowed to exist. Chavez has also blamed Washington for spreading rumors that Caracas has military plans for the Antilles. In an effort to increase regional security, Venezuela held naval exercises with Holland in September 2008. Later that year, Venezuela and Russia held naval exercises, which included the Russian nuclear-powered missile cruiser Peter the Great, traversing the Caribbean.

Talking to COHA, Dr. van der Veur asserted that “Chavez makes these comments now and then. I believe they are made only for internal consumption,” particularly during periods of tension between Chavez and then-U.S. President Bush. The general belief is that, while the U.S. continues to be a military superpower with a military presence in Curaçao and Aruba, any Venezuelan security threat posed by Caracas remains unlikely. Even upon autonomy, Holland would continue to be in charge of the defense of the islands. Van der Veur concludes that none of the islands (Aruba, Bonaire or Curaçao) possess significant natural resources (there may be underwater oil deposits, but exploration is considered too expensive) to make a military invasion cost-effective. Perhaps more importantly, should Caracas ply its claims to some of the Antillean islands more aggressively, it would most certainly alienate other Caribbean island nations that it’s attempting to woo. It would also strain cordialities between Venezuela and Holland, both of which hope to maintain existing strategic trade relations.

Venezuela’s Already Established Presence
Curaçao is situated less than 100 miles from Venezuelan territory and the South American power already has a big presence on the island, particularly through the Venezuelan state-oil company, Petroleos de Venezuela SA – PDVSA, which leases the island’s Isla refinery. The refinery was sold by Shell to Curaçao for a symbolic $1 and the local government was quick to re-sell it in order to make a profit. PDVSA processes around 220,000 barrels per day of oil in the facility, and it is under pressure to maintain current production-levels in light of the global fiscal crisis. The problem is that ever since the refinery’s construction decades ago, the facility has been an environmental and health hazard for local residents. A July 2008 Reuters dispatch quotes a professor at a nearby school complaining that smoke and stench emissions from the plant have reached such intense levels that classes regularly had to be suspended. Industrial emissions are also suspected to create an influx of health issues ranging from chronic coughing to cancer.

Venezuela is an important presence for the Netherlands Antilles, particularly for Curaçao, because of tourism. After Dutch nationals, Venezuelans make up the second largest source of tourists visiting the island. Therefore, keeping a continuous stream of tourists is critical to Curaçao’s economic sustainability. Island officials project that the number of visitors to the island in 2008 grew by 30 percent to about 390,000 people, a December 2008 AP article reported. Sluis added that many wealthy Venezuelans in recent years have moved to Curaçao in order to distance themselves from the Chavez administration.

Key Point: Washington’s Interests
Washington has maintained a military presence at Curaçao’s Hato airport in order to service multinational counter-drug missions operating in the Caribbean. American officials say the operation contributes around $25 million to the local economy. DEA agents are also based in the airport’s facilities. There’s a smaller U.S. military presence at Aruba’s airport as well. Both bases, as well as the American facility in Manta, Ecuador, are categorized as Forward Operations Locations (FOL).

Under the contract’s terms, the personnel are only authorized to launch flights to gather intelligence about drug smuggling, while the DEA agents are the only ones stationed there who are authorized to make arrests. The American presence has largely been accepted by the local population, though the question remains if these planes are solely used to monitor anti-drug operations, or to spy on Venezuela and engage in other operations such as like aerial fumigation in Colombia.

A recent AP story explains that “Nelson Pierre, a member of the 21-member governing council, believes that the U.S. military should no longer be allowed to use the airport in order to ensure good relations with Chavez, albeit, he acknowledges that only one other council member shares his opinion and the lease is therefore likely to be extended after it expires in 2011.” In a November 2008 Christian Science Monitor article, US Southern Command spokesman Jose Ruiz is quoted as saying that “Curaçao is strategically located to be able to monitor the Caribbean basin […] it’s an effective position with which to conduct monitor flights and to track traffic that we suspect may have contraband.”

As the U.S. will soon be forced to withdraw from the military facilities it now leases from Ecuador at Manta, and Caracas-Washington relations continue to be strained, Washington and SOUTHCOM are looking to alternative locations to continue operations. Maintaining a presence in Curaçao and Aruba would provide Washington with friendly ports and airports (specially as plans for the reconstituted Fourth Fleet are advanced) as well as an operations base to monitor both drug trafficking activity as well as, if necessary, carry on operations involving Venezuela. Recent news that Russia may consider using Cuban and Venezuelan airports as landing pads for their strategic bombers carrying out long-distance patrols only heighten the importance for Washington to be able to have a continuous presence in different quadrants of the Caribbean basin.

In September 2008, the USS Farragut, a guided-missile destroyer, visited Curaçao on a humanitarian mission. “The Americans are keen in making sure their community outreach projects are publicized to maintain a good image,” says Sluis. Nevertheless, she adds that there is little interaction between the American personnel and the people of Curaçao, as the former usually remain on their bases and have strict rules about which areas of the island they can travel.

Key Point: New Allies for Whom?
The outcome of the upcoming referendum aimed at dictating the status of the Netherlands Antilles is bound to affect regional arrangements. Curaçao already has taken steps to join the regional agency, the Caribbean Community (CARICOM).

In 2008 CARICOM and the European Union signed an Economic Partnership Agreement. As a result, Curaçao businessmen have viewed trading with CARICOM countries as considerably more beneficial than in previous years. A May 2008 article in the Caribbean Media Corporation quoted the president of the Antillean Industrial Association (AIA), Donald Henrietta, as saying, “In the past with CARICOM very little has been done, not only from our side but from the side of CARICOM, to include us, but lately we noticed with the development of the EPA and with the intention of the European Union of having a unified Caribbean, that there is opportunity for us to embrace this development using the skills that we have at home.”

In a January 2009 interview with CMC, Curaçao’s Economic Affairs Minister, Eugene Rhuggenaath, avowed, that, “as a country, Curaçao will be more empowered to pursue its own direction and we are constantly choosing to become more involved in the Caribbean community.” The senior official went on to add that “we have already made several agreements with the ministries and institutions, like the Caribbean Development Bank (CDB), to take the steps in pursuing that Associate Member status, in order to become a fully participating member with our neighboring Caribbean states.” It is unclear if Curaçao can legally join CARICOM, if it is still part of a European state. Perhaps it can become an associated member of some level, but full membership would bring up a legal issue.

Key Point: Illegal Financial Flows
In the case of the achievement of political autonomy by one or more of these islands from Holland, a critical task that will have to be addressed by the international community is that these islands are known to be tax havens for international companies. A tax haven country suspects that local authorities will not inquire about the amount, or means, or how their clients derive their income. International companies as well as crime syndicates and criminals exploit these financial launching pads to lay away their wealth, as such financial transactions are treated with impunity. Specifically, the Netherlands Antilles are classified as a tax haven by the Organization for Economic Co-operation and Development (OECD), and as an offshore financial center by the International Monetary Fund.

In general, there is optimism that the tax haven-label will soon be removed from the Netherlands Antilles. Regional specialists agree that the current situation is nothing like it was in the 1980s. According to van der Veur, “the tax laws have already changed.” For instance, in September 2008, the New Zealand government announced that it had signed a tax information treaty with Holland regarding the Netherlands Antilles. This represents that the Netherlands are working to get the Antilles off the black list,” explains van der Veur. The Antilles have entered bilateral tax agreements with different countries to combat subversion of tax haven regulations. The U.S. signed a similar agreement with Holland regarding the Antilles in 2007.

Nevertheless, an April 2009 report by the OECD labels the Netherlands Antilles in the section of “jurisdictions that have committed to the internationally agreed tax standard, but have not yet substantially implemented it.” Other areas in the same group include well-known tax havens like Liechtenstein, Panama and the Cayman islands. In an interview with COHA, a former senior IMF official explained that “I would believe the OECD more than I would believe the Netherland Antilles” regarding changes in tax regulations. “If the OECD is continuing to list the Antilles as a jurisdiction that has not yet substantially implemented the internationally agreed tax standard, then that is what it is,” the expert concluded.

A better tomorrow… for everyone
When asked if the pro-autonomy movement is the first step for the eventual independence of Curaçao and Sint Maarten from the Kingdom of Holland, reporter Miriam Sluis explained that “there is such a sentiment but some individuals argue that Curaçao and Sint Maarten could become failed states like Haiti or ruled by a strongman like Suriname’s Desire Bouterse; but this is not a reason to dismiss the idea right off the bat. Independence should be talked about, it may work for us.” When asked the same question by COHA, a source close to the process of state structure in the Antilles (structura estatal) who asked to remain anonymous, explained that “Haiti and Suriname are independent countries, if they fail no one will help them; as autonomous entities Curaçao and Sint Maarten are guaranteed that Holland will help us if we fail.” The source added that “the islands’ income per capita is one of the highest in the Caribbean, while Haiti has the lowest, we really would have to hit rock bottom to become like Haiti.”

Even if full independence appears elusive, both islands are in the process of taking firm steps towards becoming fully responsible for the lives of their citizens, should the May 15 referendum affirm a “yes” vote for ongoing negotiations with Holland. Events outside of the Antilles’ control, namely Washington-Caracas security questions and political tensions and the return of Russia as a player to the Western Hemisphere, have made the political inclinations of these islands important to the future of Caribbean security and diplomacy. Drug trafficking and foreign companies attempting to take advantage of the island’s tax laws will continue to be issues that demand attention. Even with continued protection by the Netherlands, Curaçao and Sint Maarten are going to have to be wary of the sharks in the water.

The U.S. Military’s Presence in the Greater Caribbean Basin: More a Matter of Trade Strategy and Ideology than Drugs

by COHA Research Fellow Alex Sanchez
23 Sep 2009
Council on Hemispheric Affairs
http://www.coha.org/the-u-s-militarys-presence-in-the-greater-caribbean-basin-more-a-matter-of-trade-strategy-and-ideology-than-drugs/

Washington’s initiative to have access to at least seven Colombian military facilities has been criticized as an extension of the controversial Plan Colombia and as a breach of fealty to its sister republics. Suspicion also has surfaced that the base deal was fundamentally a move against Venezuela’s Hugo Chávez, and would prove a recurring obstacle to fulfillment of U.S. policy goals in the region. Two of the facilities soon to be available to the U.S. are located in the Caribbean region – the military port in Cartagena and the air base in Malambo – and will serve the needs of the U.S. Navy.

The new Caribbean coast facilities will join an array of existing U.S. military establishments in the region dating back to 1903. Up to now, the official raison d’etre for a U.S. presence in the Caribbean was to combat drug trafficking. However, the proliferation of security threats, in particular developments possibly against the interests of Chávez’s Venezuela, has led some to argue that no matter how much Washington’s officials deny it, an unspoken reason for the U.S. deployment to Colombia is to keep Chavez under check. With the Washington-Bogotá decision, it is necessary to discuss the relationship between masking antinarcotics efforts as a cover for a variety of U.S. security concerns and aspirations throughout Latin America, especially in the coming trade war over commodities.

Caribbean Bases-R-US

Up until the transfer of the Panama Canal to the Panamanian government and the withdrawal of the U.S. Air Force equipment from Howard Air Base in 1999, American defense strategy favored large military facilities abroad. The strategy seems to have changed in recent years, with the Pentagon opting for smaller facilities and a more modest posting of personnel. Active U.S. bases in Latin America are known as “Forward Operation Locations” (FOL) or “Cooperative Security Locations” (CSL).

The decision by the Correa administration in Ecuador not to renew the lease on the U.S. military complex at Manta forced Washington to look for alternatives. Peru was interested in hosting one such base, as this was seen as aiding the country in its fight against the remnants of Sendero Luminoso and serve as a deterrent against its traditional strategic foe, Chile, which in recent years has been undergoing a military build-up.

In the end, Washington policymakers chose Colombia to be the U.S.’s primary regional base for operations in the northern tier of South America and the Caribbean. Access to the Colombian bases will likely mean new deployments of U.S. personnel above the 300 U.S. troops currently stationed there; however, the figure will not surpass the maximum of 800 troops (and 600 contract workers) as agreed upon by both countries. The two proposed bases where American troops will be deployed along Colombia’s Caribbean coast are Malambo (Air Base Alberto Pouwels) and Cartagena (ARC Bolívar). Interestingly, only one base on Colombia’s Pacific coast will be used, in Buenaventura in the Valle del Cauca. The bases in Malambo and Cartagena facilities will significantly add to Washington’s already formidable military presence in the Caribbean. This includes:

• El Salvador – According to the U.S. Office of National Drug Control Policy, the U.S. Navy routinely flies P-3 MPA and E-2C AEW out of Comalapa International Airport. The base is used for counter narcotic operations in the Eastern Pacific. A 2001 International Relations Center report explained that there is “no limit on the number of U.S. personnel who have access to any ports, air space, and unspecified government installations that the U.S. deems pertinent.” The bill accepting U.S. deployment in El Salvador was passed in 2000 under the presidency of Francisco Flores amid protests by the FMLN, a left-leaning political movement that was created by former leftist rebels who participated in the country’s civil war and who now hold the country’s presidency. U.S. Forces in the region are under the command of the U.S. Naval Forces Southern Command (SOUTHCOM), whose senior officer is also the head of the Fourth Fleet. At the same time, the Comalapa CSL is part of the Joint Interagency Task Force South (JIATF) based in Key West, Florida.

• Honduras – The Palmerola/Soto Cano base is the home of Joint Task Force-Bravo. Around 500 U.S. military personnel are deployed there, in addition to 600 U.S. contract civilians, both Americans and Hondurans. The mixed bag of American military troops includes the 612th Air Squadron. In recent years the Honduran government expressed interest in taking over Soto Cano and transforming it into a civilian airport (so Tegucigalpa wouldn’t have to bear the expense of building a new one). If that were to transpire, the American military probably would be forced to move to an undisclosed area in the Honduran rainforest. It is unclear, with the ongoing events regarding the ousted president Manuel Zelaya, if the future of Palmerola will be discussed anytime soon.

• Curaçao and Aruba – These Caribbean islands, part of the Kingdom of the Netherlands, host two bases used to interdict air and maritime drug shipments. The U.S. military at these locations works in coordination with the Dutch-assisted local Coast Guard units in the islands. Washington has a presence in Curaçao as it leases part of the airport for anti-drug operations. The detachment stationed there includes U.S. military personnel as well as DEA agents. AWAC aircraft are utilized for monitoring suspicious air and sea traffic involving Caribbean waters. According to a November 2008 article in the Dutch daily NRC Handelsblad, in that year, 214 tons of cocaine, 166 tons of heroin and five tons of marijuana were intercepted by U.S. patrols taking off from the airbase on Curaçao.

• Cuba –It is easy to forget that Guantánamo Bay is actually a military facility, given its publicity in recent years as a prison for individuals accused of terrorism. However, the base has been operated by the U.S. since 1903, without an ending date for the American military presence there, at least as long as Washington continues to pay the lease. The base is intended to serve as a repair and refueling center for Coast Guard and Navy vessels. This part of Guantánamo is controlled by the U.S. Navy Station (reflecting the base’s original mission), currently commanded by Navy Captain Steve Blaisdell. The other component of Guantánamo is namely to accomodate detainees accused of terrorism, called Joint Task Force-Guantánamo. It is currently led by Rear Admiral Tom Copeman, with Army Brigadier General Rafael O’Ferrall as its deputy commander.

• Antigua – The U.S. military established a base in Antigua during World War II, which was named Coolidge Airfield. The Antigua Air Station exists today out of part of the former Coolidge AFB. A 2007 press release by the government of Antigua & Barbuda highlights a meeting of Prime Minister Baldwin Spence and the head of the U.S. station. The release explains that the U.S. Air Station “operates under a Government to Government agreement with the United States. … Under the agreement, the United States Air Force leases lands from the Government in the vicinity of the V C Bird International Airport.”

• The Bahamas – The Atlantic Undersea Test and Evaluation Center (AUTEC) is located in Andros Island in The Bahamas. The center is utilized for testing of new types of weaponry. Globalsecurity.org defines it as “the Navy’s premier east coast in-water test facility.” AUTEC’s website explains that the center is “affiliated with the NATO FORACS [Naval Forces Sensor and Weapon Accuracy Check Site] program and the eight participating NATO member nations: Canada, Denmark, Germany, Greece, Italy, Norway, the United Kingdom, and the United States.”

• The U.S. also is routinely utilizing facilities in Vasco Núñez de Balboa, a major port in Panama, for supplies and refueling.

Military exercises

Apart from leasing military facilities abroad, the U.S. armed forces have improved ties with other regional security forces by carrying out joint military exercises. Three of the most commonly known military exercises are Tradewinds, UNITAS and PANAMAX.

The Tradewinds military exercises are organized by the U.S. and carried out with Caribbean states on themes such as combating drug trafficking, dealing with terrorist threats and disaster relief. Tradewinds 2009 was held in March and April and included exercises staged in The Bahamas, Dominican Republic and Miami. According to SOUTHCOM’s website, more than 400 participants took part in the exercises, coming from the U.S., the U.K., and fifteen Caribbean Basin states.

The 50th anniversary of UNITAS, a multinational maritime exercise, took place this year at the Jacksonville Operational Area in Florida. The exercises this time were dubbed Unitas Gold – in order to commemorate the anniversary. SOUTHCOM has published a comprehensive report of UNITAS’ history which can be found on its website. The at-sea phase of the exercise took place this past April. As part of the live-fire exercises, the warships sunk, as planned, the ex-USS Connolly. According to an official release, in total, Unitas Gold brought together 25 ships, four submarines, more than 50 aircraft, 650 Marines and 6,000 sailors from 11 different countries. Latin American powerhouse Brazil sent two vessels, the frigate Constituiçao and the submarine Tikuna.

Fuerzas Aliadas (FA) PANAMAX is an annual multinational military exercise held in Panama to protect the Canal. PANAMAX’09 took place in mid-September, lasting 12 days with more than 4,500 troops from 20 countries. A U.S. Navy press release explained that “the multinational forces protecting the canal approaches will be organized under Multi-National Force-South and commanded by U.S. Army Maj. Gen. Keith M. Huber, commander of U.S. Army South. This year, the exercises simulated a terrorist threat” against the Panama Canal, said Gerald W. Ketchum, U.S. Operation, Preparation and Mobilization sub-director from the Southern Command.

Finally, this past July, 600 military personnel visited Guyana for humanitarian and civic assistance exercises dubbed New Horizons 2009. The exercise, sponsored by SOUTHCOM and Air Forces Southern (12th Air Force), built a new clinic and a new school house, while carrying out other civic projects. What is curious about the situation is the importance Guyana is slowly gaining for SOUTHCOM ever since a 2007 incident in which Venezuelan military units entered Guyana. With New Horizons, Guyana, and the bases in Colombia, the American military now has (or has had, in Guyana’s case) some kind of military presence in all of Venezuela’s geographical corners, with the exception of Brazil. This may be the first time in its history as an independent state that Guyana has received such sustained attention from Washington. Usually, it is regarded as a largely poor state where corruption has been cited as the country’s primary obstacle to the creation of viable institutions and democratic processes.

Shiprider Agreements

In addition to an increasing military presence in the Greater Caribbean Basin, the U.S. has sought to combat drug trafficking by signing the Shiprider Agreements (full name: Agreement Concerning Co-operation in Suppressing Illicit Maritime Drug Trafficking). These agreements brought together a number of regional states, such as Barbados in 1996 and Jamaica in 2004. In certain cases, Shiprider allows the U.S. Coast Guard and Navy to board and detain vessels when going through the territorial waters of Caribbean states if there is evidence or well-founded suspicion that said vessels are committing a crime, such as drug trafficking. Depending on the nature of the bilateral agreement, U.S. agents can ride in local coast guard ships or vice-versa.

The Fourth Fleet and Overlapping Commands

As the deployment of American troops to Latin America continues to expand, important questions arise concerning the future of the Fourth Fleet. Established in 1943 and based in Mayport, Florida, the fleet’s historic mission to protect the Caribbean Sea from raiders during World War II, was disbanded in the 1950s. The reactivation of the Fleet in 2008 has been regarded as one of the most incoherent and unproductive decisions by the former Bush administration regarding the Western Hemisphere. Rear Admiral Victor Guillory, who is also the commander of the U.S. Naval Forces Southern Command, is the current commander of the Fourth Fleet.

In fact, the Fourth Fleet, at the present time, only exists on paper. No permanent ships have been assigned to it, nor will any be. According to the Fourth Fleet’s website, “no vessels or aircrafts will be permanently assigned to U.S. Fourth Fleet as part of the re-establishment. U.S. Fourth Fleet is an organizational fleet staffed to fulfill a planning and coordination mission.” Its objective is “strengthening friendships and partnerships and [it] will have five missions: support for peacekeeping, Humanitarian Assistance, Disaster Relief, traditional maritime exercises, and counterdrug support operations.”

Missions and Fantasies

A “U.S. Fourth Fleet Talking Points” sheet provided to COHA by the Fourth Fleet Press Office states, that “because of the complex operational environment and number of maritime missions in the area […] Fourth fleet will be able to provide more effective support to SOUTHCOM and the region.” However, given the wide array of bases and security initiatives mentioned earlier, it is unclear how the fleet will be of any help, especially considering that it exists only for organizational purposes and does not control actual warships. If anything, the first impression when looking at the Fourth Fleet is that it will bring more bureaucracy to a region that, as it stands, already suffers from too many different oversight organizations and procedures, joint task forces and bilateral agreements with regional states.

The Caribbean bases in Colombia will test the relationship between the Fourth Fleet and SOUTHCOM in regards to the use of warships in operations to counter drug trafficking. So far it seems that both names are interchangeable, and it is unclear what kind of operations the Fourth Fleet could carry out that SOUTHCOM, or one of its already established components, could not. This question further highlights the perception of the Fleet as an example of redundant bureaucracy.

According to a Summer 2009 issue of Surface Warfare, the Fourth Fleet has sponsored military exercises and operations such as Southern Partnership Station (U.S.-organized multinational amphibious exercises with Argentina, Brazil, Chile, Peru and Uruguay) and Continuing Promise (relief services and civic assistance to Latin America and Caribbean states). The new fleet also was commander of PANAMAX 2008 and UNITAS 2009. However, it remains to be seen whether the reconstitution of the Fourth Fleet is improving the control of these operations when compared to their pre-Fourth Fleet level of performance.

Where are the enemies?

The multitude of initiatives of the U.S. military throughout the Caribbean raise several questions. For example, does the U.S. have a coherent overall policy towards the Caribbean? In recent years, drug trafficking has lent the rationale for Washington’s military presence in the Caribbean. However, it is important to keep in mind that the cost of overseas troops can be justified to a critical public only by the expression of a clear, practical goal, e.g. stopping (or at least trying to stop) the flow of drugs into the U.S. In a March 2009 testimony before Congress, Rear Admiral Wayne E. Justice of the Coast Guard, explained that “[there] has been a change in the primary smuggling routes to the Central America littorals where smugglers attempt to evade U.S. patrol efforts by operating in the territorial sea of partner nations. The Coast Guard has actively targeted this trend through a series of 27 maritime bilateral counterdrug agreements and arrangements with partner nations that include all or some of the following provisions: shipboarding and shiprider agreements; pursuit, entry and over-flight of the territorial sea; order to land for aircraft; and operation center information exchange protocols.” The aforementioned Surface Warfare issue includes a special section concerning the Fourth Fleet. The section includes interviews with former Rear Admiral Joseph Kernan and current Rear Admiral Guillory of the Fourth Fleet. Both of them identify the prevention of illicit trafficking as one of their top priorities. When it comes to the U.S. bases in Colombia, the reason de jure for their existence is, of course, to combat drug trafficking.

Due to the nature of their regimes, Cuba and Venezuela stood out as security threats for conservative American policymakers. However, despite these contentious views regarding both states, it is generally accepted that Venezuela, notwithstanding its surge of military purchases, could not possibly stand up to U.S. military might. Cuba poses even less of a threat; its armed forces do not have access to modern and well-functioning equipment and a high degree of training, and it primarily acts as an internal police force. Under no circumstances is Cuba an international threat, least of all to the United States. The cooperative defense deal between the U.S. and Colombia is presented by their respective leaders as an effort to directly help the South American country tackle its conflict with drug traffickers and guerrilla groups. However, it cannot be denied that these bases, combined with the two nearby bases in Curaçao and Aruba, will allow Washington to keep track of any clandestine activities conducted by the Venezuelan government, and other leftist developments occurring in the area. Considering Secretary of State Clinton’s recent warning that Chávez’s military purchases could spark an arms race in Latin America, Washington views the access to Colombian bases as a welcome development in an increasingly strategic region plagued by insecurity. Cuba poses even less of a threat; its armed forces and their aged equipment do not have access to modern and well-functioning equipment and a high degree of training, and its armed forces primarily act as an internal police force.

The Caribbean: Washington’s Lake once again?

It may be a stretch to argue that the U.S. has militarized the Caribbean. However, the new base agreement with Colombia, as well as the expansion of other facilities in the region, suggests Washington’s serious commitment to something above and beyond just combating narcotrafficking. The persistent drug trafficking and insurgent problem in Colombia, combined with Venezuela’s ongoing military purchases (mostly from Russia), were most likely the two major thrusts guiding the Pentagon to initiate the Colombian base agreement. While it arguably will aid local authorities with their fight against drug trafficking, it will at the same time also facilitate the monitoring of Venezuela and other South and Central American left-leaning countries.

Military exercises, although they carry with them a small sacrifice of sovereignty, will most likely continue to be necessary for small Caribbean states in order to improve mainly their own internal security so that they can tackle issues like drug trafficking, which an obsessed Washington will just not let go away. The Fourth Fleet, on the other hand, is not likely to pose a security threat to regional governments, and will probably result in bureaucratic redundancy as it will likely be serving little more than a symbolic image. The Fleet will have to prove in the coming years why a fleet without specifically designated warships can be useful for SOUTHCOM’s role in its operations.

American military presence in the Caribbean Basin has been steadily expanding, justified domestically as a necessary measure to combat ballooning drug production and terrorist movements. However, there is little indication that these military forces significantly have impacted the overall volume of illicit drugs entering the U.S. market from the south. Preventing speedboats from carrying cocaine off the coast Florida or stewarding drug mules operating at the Bogotá Airport with tickets to Miami or Madrid, may merely win small battles, but it will not win the war. By focusing on military efforts, American anti-drug policy has failed to address, for example, the key role that social problems play in the perpetuation of an illicit economy. Development projects that tackle poverty in producer countries, such as Colombia and Peru, and in transit countries, such as Haiti, the Dominican Republic, and those in Central America, are badly needed. Unfortunately, the grand plan that the Pentagon and the DEA have proposed does not focus on improving social conditions, but merely on increasing U.S. military might. Despite these military advances, the current anti-drug policy cannot be expected to succeed, as it is unlikely that a satisfactory justification can be found for such an elevated military presence in the region when the target is so small-scale.

Embraer: Brazilian Military Industry becoming a Global Arms Merchant?

by COHA Research Fellow Alex Sanchez
01 Sep 2009
Council on Hemispheric Affairs
http://www.coha.org/embraer-brazilian-military-industry-becoming-a-global-arms-merchant/

Brazil has become a high-tech and growing civil-military power in the same league as Russia, India and China (the BRIC countries). When it comes to Brazil and military technology, one name comes to mind: Embraer (Empresa Brasileira de Aeronáutica, S. A.). The Brazilian company specializes in civilian and military aircraft, and is regarded as one of the top three aircraft companies in the world, next to Boeing and Airbus. Today Embraer’s military products make it an increasing factor in the arms manufacturing and supplying field, along with several other transnational arms companies currently competing to be major international weapons suppliers.

History: How Embraer became the flagship of the Brazilian arms industry

Embraer’s history can be traced back to the Brazilian military junta that ruled the country from 1964-1985. When Embraer was founded in 1969, the junta was led by General Emilio Medici, who wanted the country to have its own self-contained aircraft-manufacturing company, with the state controlling 51% of the shares.

While Embraer is commonly mentioned today as Brazil’s major military industrial complex, it should be recalled that it also was one of three such companies in Brazil during military rule and afterwards. As its name suggests, Embraer focused on aircraft, with the Tucano becoming its flagship military product. The other prominent Brazilian military industries were Avibrás Indústria Aeroespacial S.A. (Avibrás), which was established in 1961, and Engenheiros Especializados S.A. (Engesa), which began its operations in 1963. Globalsecurity.org explains that “by 1980 Brazil had become a net exporter of arms. On the demand side, the rapid success resulted from a growing need in the developing world for armaments,” specifically, those that met specialized performance and cost qualifications. “On the supply side, Brazil’s arms exports were designed for developing world markets and were noted for their high quality, easy maintenance, good performance adverse conditions, and low cost.”

In the course of the Iraq-Iran War in the late 1980s, Iraq would become a major client of the Brazilian military industry. The Stockholm International Peace Research Institute reports that 40% of all Brazilian arms transfers from 1985 to 1989 went to Iraq. The armaments included over 800 armored fighting vehicles (EE-3/-9/-11) and over 60 ASTROS rocket launchers. In 1989, Brazil chose to sell Tucanos, Embraer’s relatively low cost and basic military aircraft, to Iran, showing that business and financial factors trumped any particular ideological preference for Iraq.

In contrast to Embraer’s strong sales to both sides in the Iran-Iraq War, its competitor, Engesa, did not encounter such success. In the late 1980s the company showcased its newest battle tank, the EE-TI Osorio but due to changing political tides was unable to land customers for the product. Despite Saudi Arabia’s initial interest in the Osorio, the Iraqi invasion of Kuwait prompted the Saudi Royal family, in near panic, to turn to the U.S. as its main military supplier. Left without its prime customer, Engesa was forced to declare bankruptcy in 1993. In order to shield its domestic military industry, the Brazilian government privatized Embraer under Plan Collor, as part of president Fernando Collor de Mallo strategy to privatize state-run companies to save them from bankruptcy.

Today Embraer stands as the undisputed leader of the Brazilian military and civilian aircraft industry. In an interview with COHA, Dr. Thomaz Costa, Professor of National Security Affairs at the Center for Hemispheric Defense Studies at the National Defense University, explains that “[Embraer’s] business philosophy seems to reflect a market position defined by producing platforms with technology, electronic components, and had a large array of private stock of parts available in its on-site global market. Its products directed to civilian markets are based in cost-effectiveness of product life cycle.” Dr. Costa argues that “Embraer has been successful in identifying market niches before the market fully develop demands (i.e., the Bandeirante and the ERJ for commuter services, the Tucano for military training, and the new series 90-120 seater airlines).”

For Embraer, 2004 was a “golden year,” as it delivered 148 civilian and military aircrafts. A 2005 Military Technology article indicated that at the time Embraer had invested around $45 million on its Gaviao Peixoto floor workers. However, in recent years the company has suffered from the ongoing global financial crisis and continues to receive more bad news. In February 2009, Embraer announced its plan to cut as much as 20% of its active worldwide workforce of 21,362, including both management and production. According to an Agence France Presse article, Embraer’s shares slid nearly two percent to $14.50 on the New York Stock Exchange immediately following the announcement. Furthermore, another bad blow occurred when the Chinese-owned Hainan Airlines Co. announced in May that it would reduce its order of ER145 passenger jets from the original 50 to 25 (12 planes already had been delivered). Embraer announced that “over 90 percent of its revenues are generated abroad,” leaving it particularly vulnerable to the global economic recession.

The Civilian Division

Embraer’s civilian wing is also a critical part of its industry. As NDU’s Dr. Costa explains, “the military portion of Embraer is pretty small compared to the civilian component. It is very similar to Boeing, where one division produces the F-18, but the bulk of the revenues and commanding business model is civilian.” An example of Embraer’s record-making financial gains occurred in 2008 when the company reported it had gained $175 million in the third-quarter of that year.

Like the military division, civilian products are largely export-based and similarly susceptible to the international economic environment. Prior to the devastating hit generated by the financial crisis, Embraer had made deliveries to U.S. carrier Northwest Airlines in 2007, and in 2008 there were talks of the company’s E-190 passenger jet being sold to JetBlue. Also in 2008, the company sold 6 type-170 jets to EgyptAir Holding Co. for $189 million. According to a January 2009 report in the Associated Press Financial Wire, Embraer delivered 204 planes in 2008, a 21% increase over the 169 jets delivered in 2007. Given their previous reliance on sales of midsize and executive jets, it is not surprising that the company has taken a particularly strong hit from the current economic crisis as demand for these aircraft falls..

What military aircrafts is Embraer producing these days?

In spite of its current troubled financial situation, the nascent Brazilian military industry is producing a number of potentially successful products (its civilian aircraft line aside). While it is no longer turning out the Tucano, the company has upgraded to the Super Tucano. Today, Embraer’s top military products include:
• The ALX Super Tucano which can be used as a training aircraft as well as for patrol and light attack missions. In 2008, Embraer presented an upgraded version which consisted of TOSS (Training and Operation Support System) computer systems with improved capabilities like a Mission Planning Station for navigation and planning attack missions.
• The AMX light attack aircraft and its AMX-T two-seat, combat-capable trainer version.
• The P99 MP/ASW aircraft and the EMB military versions which can be used for remote sensing and maritime patrol.
• The KC-390 medium transport/tanker aircraft, which was announced in April 2009 at the Latin American Aero and Defense show in Rio de Janeiro. The plane was designed to compete with the now aging U.S. workhorse, the C-130.

Russia announced in April 2009 that Embraer might join the Russian-Indian joint venture of producing the fifth-generation fighter aircraft (FGFA) version of the famous Sukhoi fighter. Currently, the aircraft is being developed by Russia’s United Aircraft Corporation and India’s Hindustan Aeronautics Limited, following a 2007 agreement. “We are discussing with the well-known Brazilian company Embraer the transfer of technology and the construction of facilities for the future licensed production of aircraft, including FGFA,” said deputy director of Moscow’s Federal Service on Military-Technical Cooperation, Alexander Fomin.

In an interview with COHA, Iñigo Guevara, a specialist in Latin American defense industries and a CONACYT fellow at Georgetown University’s Security Studies Program, explained: “[T]he current FX2 program, which will lead to the selection of the Rafale, JAS-39 Gripen or F/A-18E Super Hornet to become Brazil’s next generation fighter, will see a fair amount of technology transferred to Embraer, which will enable it to license, produce and eventually develop a fifth generation fighter.” He goes on to explain that the new generation of fighters would be of considerable interest to the contemporary global market, and would nicely position Brazil alongside the U.S., Russia, China, France, and Sweden as making up an elite group independently developing and producing jet fighters.

Non-Embraer initiatives

It is important to highlight that Embraer is not the only Brazilian military plant currently creating production lines. Other examples of promising military-related companies include:
• AVIBRAS, which produces the ASTROS self propelled MLR batteries.
• AGRALE, which produces the Marrua jeep.
• The Brazilian Army, in cooperation with IVECO, produces the VBPT-MR (Urutu-3) armored personnel carrier.

Projects for the production of heavy battle tanks, like the attempts to promote the Osorio in the 1980s and 1990s, are notably absent. According to Guevara Brazil is not pushing for an in-country fabricated battle tank, such as the Osorio or Tamoio, “because Brazilian planners do not envisage a large enough need for a tank in Brazil’s list of defense requirements in its current or future export market.” This explains why Brazil has recently purchased 250 German Leopard 1 battle tanks. Purchasing already established tank models becomes more effective and offers less logistical problems than designing and building a Brazilian model from the ground up.

Embraer’s Domestic Deals

Brazilian Defense Minister Nelson Jobim declared in April 2009 that Embraer will develop a new fleet of military transport aircraft for the Brazilian Air Force. Brazil currently uses the aging American C-130 Hercules, which soon will be replaced by Embraer’s KC-390. The plane is capable of transporting Brazil’s 20-ton Urutu III armored personnel carriers. Embraer’s hope is that this will be the first of a new batch of contracts for their new military aircraft division that would reverse their losses and lay-offs from recent months. Embraer also announced in April that it had signed a contract to modernize 12 Brazilian navy jets, including 9 AF-1s and 3 AF-1As. According to a report by Defense Daily, “[t]his upgrading is designed to fully restore the operating capacity of the navy’s 1st Intercept and Attack Plane Squadron.” Frederico Fleury Curado, Embraer’s president and CEO, has declared that “by choosing Embraer, the navy is making an important contribution to consolidating the technological and industrial capacity of [Brazil’s defense industry] for modernizing military aircrafts.”

Brazilian Arms Merchant to Whom?

Embraer will have to compete with other military industrial companies if it wishes to establish itself as a leading global arms merchant of military aircraft. Such companies in countries like the U.S., Russia, and China have increasingly consolidated themselves as suppliers of weaponry for a number of Latin American and other developing countries. Europe, both as a collective unit and as individual states, has also attempted to gain footholds in the Latin American market, with mixed results. Guevara argues that Embraer has established a name for itself as it provides “western technology at an affordable price.” Dr. Sean Burges, an expert on Brazilian affairs at the University of Ottawa and a COHA Senior Reasearch Fellow, explains that “Super Tucanos are not up to taking on a Mig or F-18, but they’re pretty damn effective against a Cessna aircraft, a truck, or even a tank. [This makes the Brazilian warplanes good for] low-level border war and anti-narcotics aircraft work.” Besides affordability, a major reason for developing countries’ demand for Embraer models is the company’s production of aircraft which are suitable for specialized missions and immediate threat responses, which do not require the high-performance attack aircraft like those produced by the U.S. and Russia.

In 2005, Embraer and Colombia signed an agreement to supply the Colombian Air Force with twenty-five Super Tucano turboprops, all of which have now been delivered. In July 2008, India signed an agreement to purchase three EMB 145 AEW&C (Airborne Early Warning & Control) planes. The first delivery is scheduled for 2011.

In August 2008, Chile signed an agreement to buy twelve Super Tucanos, with the Brazilian media estimating the deal at $120 million. “We are very proud to announce that the Super Tucano is the aircraft chosen by the Chilean Air Force, which is internationally recognized for the high professional capacity of its personnel,” said Luiz Carlos Aguiar, Embraer’s Executive Vice President of Defense and Government Market.

More recently, in January 2009, the Thai military purchased one ERJ 135 for civilian and military transport. The Royal Thai Army and Navy ordered two similar aircrafts in 2008 as well. That same month the Dominican Republic purchased eight Super Tucanos for border patrol and anti-drug operations. In March 2009, Ecuador bought twenty-four Super Tucanos for training and border patrol missions.

Perhaps due to the growing commercialization of Embraer’s production line, Jane’s Defense Weekly reported in March 2009 that Colombia expressed interest in co-developing Embraer’s C-390 medium-heavy transport aircraft. In 2008 there were also reports that Bolivia was interested in acquiring Super Tucanos to replace its venerable but aging T-33 trainer/light attack aircrafts scheduled to be retired in 2010.

Working with government institutions, Embraer and Banco Nacional do Desenvolvimento Econômico (BNDE), Brazil’s state-run export financing institution, supplied Guatemala with a $99 million loan to purchase an anti-drug trafficking system. The catch is that Guatemala will appropriate the funds advanced by the Brazilian government to purchase a radar system and six Super Tucanos. The deal was announced in June 2009 when Brazilian President Lula da Silva visited Guatemala.

For CONACYT fellow Guevara, “Embraer has focused on emerging markets such as Latin America, as well as North Africa and the Middle East, which are its natural clients; it also managed to penetrate NATO markets, such as France, Greece and the UK.” France may be an obvious development, given its great interest in becoming a close ally of Brazil in recent years. On the other hand, for Dr. Costa, “the decision to buy Embraer products seems to show clear attention to cost components and less of political alignment.”

What remains to be seen is how the U.S. will respond to Embraer as a direct competitor with American military suppliers. In 2008, EP Aviation, a subsidiary of Blackwater Worldwide/XE, the world’s largest private security contractor, purchased a Super Tucano. The aircraft, which was sold to EP Aviation, did not include the two .50mm-caliber machine guns that are normally wing-mounted. In 2008, there was talk of preliminary negotiations with U.S. authorities regarding the purchase of eight Super Tucanos which would be sent to Iraq for training purposes.

One more reason why Brazil is a rising global power

According to Guevara, “Brazil has the region’s most advanced and developed defense industries. Over the past two decades it has focused on developing efficient support equipment but now it is interested in developing heavier conventional capabilities. Submarines, armored personnel carriers and fighter jets are among its main requirements.” Meanwhile, COHA’s Burges notes “if you have planes and the other doesn’t, you have air superiority, it is all a question of relative capability.” Embraer rose in recent years as a very important military and civilian aircraft manufacturer of efficient and affordable products. Developing nations will most likely continue to see the Brazilian company as an increasingly important and diversified weapons’ supplier for the immediate future. In the greater scheme of things, Embraer’s success, current financial issues aside, is another propellant that will elevate Brazil to a higher level of importance, as it continues to evolve into an ever more influential regional player and growing world power.

Separating Fact from Fiction: An Analysis of Venezuela’s Military Power

by COHA Research Fellow Alex Sanchez
13 May 2009
Council on Hemispheric Affairs
http://www.coha.org/separating-fact-from-fiction-an-analysis-of-venezuela%E2%80%99s-military-power/

Following the recently concluded Summit of the Americas held April 17-19, in Trinidad and Tobago, President Barack Obama claimed that the U.S. defense budget was 600 times greater than that of Venezuela. While it is true that, in conventional warfare, a Venezuelan victory over this country is totally beyond any credulity, the question remains regarding how much relative military strength does Venezuela actually project. Venezuelan President Hugo Chávez is widely acknowledged as having carried out an aggressive policy of military acquisitions in recent years, which has had far-reaching implications particularly through purchasing Russian military equipment. In effect, this arms program made Chávez appear on Washington’s SOUTHCOM security radar screen as well as those of neighboring South American nations, especially Colombia.
Military Overseas’ Providers in the Chávez Era
A key facet of the Russian-Venezuelan military partnership has been Chávez’s continued interest in purchasing state-of-the-art Russian weaponry. This process, which can be traced back to 2006, at the same time marked the beginning of Moscow’s active return to the western hemisphere, as its influence in the region continually has spread through various precise spheres (military cooperation, commerce, trade and cultural relations). Meanwhile, Venezuela significantly has linked itself to Moscow and made Russia its most important military arms-provider in the region. This inevitably has fomented a comparison of the Caracas-Moscow relationship with the Havana-Soviet relationship dating back to the origins of the Cold War, even if such a comparison is not entirely warranted.
In a series of transactions, Venezuela has purchased military hardware from Russia in deals that now total between $4.4 and $5.4 billion. The agreements included the acquisition of Sukhoi-30-C planes and 50 Mi-type helicopters (types Mi-17B, Mi-35 and Mi-26). Of the Sukhois, 24 have already been delivered and the other 12 should arrive by the end of the year. After the U.S. State Department, in the early era of Chávez rule, thwarted Venezuela’s plans to buy a shopping list of Spanish military inventory, including military air transports in 2006, because the aircraft contained U.S. components, which required Washington’s authorization. After this, Caracas decided to purchase from Russia 10 Ilyushin IL-76E (NATO designation Candid) troop/cargo transports and two Ilyushin IL-78 (NATO designation Midas) in-flight tankers. In addition, Chávez purchased 100,000 Kalashnikov type 103 rifles as well as 1,000 Dragunov-type sniper rifles and a facility to assemble them. In September 2008 Chávez purchased a $1 billion anti-aircraft missile system from Russia as well.
It should also be noted that Venezuela has looked to military arms distributors other than Russia for political reasons and in order to diversify its suppliers. China is supplying the Venezuelan air force with 10 long-range JYL-1 radars. Three such radars have already been installed in Paraguana and Mene Mauroa in Falcon as well as in Apure state, which is close to the country’s border with Colombia. All ten radars should become operational by 2013. Reports in February 2009 established that Venezuela had purchased 24 K-8 Karakorum trainer/light fighter planes from China. The first six will be delivered in early 2010 and will be used for anti-drug and training operations, according to Caracas. In February Chávez declared that “Venezuela will buy Chinese radar and airplanes specially designed for training … and as part of modernizing our defense system.”
In mid March 2009, Spain delivered the second of eight patrol boats they are building for Venezuela. The Spanish state-owned military shipyard Navantia signed a deal for the vessels with Venezuela in 2005. Reports point out that the patrol boats will have a helicopter deck and 35mm anti-aircraft guns.
The Kalashnikov Factories
Russia reached a deal with Caracas whereby the former will build manufacturing facilities in the latter’s territory to fabricate AK rifles (types 103 and 104) as well as its respective ammo. This will be the first such factory ever to be built in the Americas for that particular kind of weaponry.
Caracas has remained somewhat silent regarding these assembly plants. However it is known that Russian technicians and equipment began to arrive in 2008 to begin constructing the facilities, which supposedly will be operational in 2010 and are being built in the inner Venezuelan city of Maracay, according to unofficial reports. The plant is being built in partnership with the Compania Anonima Venezolana de Industrias Militares (Anonymous Venezuelan Company of Military Industries – CAVIM) which is well known for manufacturing the Zamurana 9mm pistol. It is unclear if a new wing within CAVIM’s existing sheds will be configured to house the Kalishnikov’s assembly lines, or if one of the previously existing wings will be refigured. The government has not even publicly acknowledged the fact that Maracay is likely to be the location where the weapons will be manufactured. Nonetheless, it seems logical, as CAVIM maintains facilities there and the city is also home to several military headquarters, including that of the army’s IV armor division.
Rumors and Orders not Fulfilled
There are also reports that, in the near future, Venezuela may acquire Russian-made T-72 tanks and BMP-3 armored personnel vehicles. Such rumors go back to last November, when Russian President Dmitry Medvedev visited Caracas, but no deal had been established at that time.
Weapons Galore
Venezuela also has declared its intention to purchase a number of Russian-made warships and submarines, but as of yet no deal has been agreed upon. An October 2008 report by United Press International explained that Chávez aims to purchase at least three diesel-powered Varshavyanka (NATO designation Kilo) class submarines. However, such rumors have been in circulation for quite some time now. It was previously thought that Venezuela would strive to acquire as many as half a dozen such submarines, but recent reports have scaled back the number to just three. It is unclear if even this reduced order will ever materialize or be scuttled.
An April 2009 report by Nabi Abdullaev in DefenseNews points out that Caracas plans to acquire several dozen surface warships, including Project 14310 Mirage patrol boats, which are floating missile platforms designated to engage any adversary from a distance of seven to 130 kilometers. Other speculations include that Venezuela also seeks to acquire the new Russian-made Su-35 fighter aircraft as well as 20 or 30 TOR-M1 9M330 missiles.
In mid-April 2009, President Chávez announced that he had acquired a number of Russian-made surface-to-air missiles, namely the Igla SAM systems. According to reports, the portable missiles weigh 42 pounds and can reach 19,500 feet. However, the Russian arms-exporting monopoly, Rosoboronexport firm, quickly declared that no such deal had been agreed upon. Nevertheless, in
discussion with COHA, an analyst at the Federation of American Scientists pointed out that “the missiles on display during a recent military parade appear to be advanced Igla-S (SA-24) MANPADS, not first generation SA-7 Grails.” The footage (which is available in YouTube at http://www.youtube.com/watch?v=u_XT0nzvIGQ regarding a military parade held on April 19, 2009) appears to show dozens of Iglas, according to the FAS analyst.
The Myth of the Super-Rich Chávez
Perhaps what is most revealing about the power of the Venezuelan armed forces is the question of how much more equipment can Chávez afford to purchase for his military. The boom of military purchases has been centered around the price of oil, which brought about previously-unheard-of wealth to Venezuela’s coffers. However, the world’s financial crisis, the collapse of oil prices, and too many purchases in too many fields have brought about problems that Chávez couldn’t easily have anticipated. Progress in the development of the Kalashnikov factory has been slow because Venezuela has not kept up with its payments, which has prompted Moscow to suspend sending technicians and equipment to the South American country. Also, due to a lack of Caracas’ prompt payment, Spain has ceased to deliver the patrol boats. In an attempt to cut defense expenditures, the Chávez government has pushed for early retirement among its senior military officers and is also re-deploying slimmed-back military units.
In an interview with COHA, Rocío San Miguel, director of the Caracas based research center Asociación Civil Control Ciudadano para la Seguridad, la Defensa y la Fuerza Armada Nacional (Citizen’s Civilian Control Association for Security, Defense and the National Armed Forces – CCA, http://www.controlciudadano.org/ ) explained that “according to Chávez, Venezuela is spending anywhere between 20 to 30 billion dollars in military contracts, but this is likely an exaggeration, as can be seen in the lack of payment for the Kalishnikovs, the Sukhoi […] and many of the newly acquired planes already lacking spare parts.”
The Myth of Equality among the Chávez-era Armed Forces
The events of April 2002, namely the coup that briefly ousted Hugo Chávez from power, are important in order to understand how he has striven to re-organize a military hierarchy ever since. Analyst Rocío San Miguel argued that “the Bolivarian armed forces have gone from a de-professionalization to an open ‘politization’ to almost ‘praetorianism.’” The Venezuelan specialist further argues that around 200 hardcore Chavista military officers are in control of the armed forces’ most sensitive positions. In addition, Chávez openly has given preference to the army (himself being a former army officer) above the other branches of the military. For example, the newly acquired Sukhoi planes and the Mi helicopters are under the control of the army, not the air force.
Replacing Outdated Equipment?
In discussing Venezuela’s military might, the emerging issue is whether the country has crossed an open, ambiguous line separating purchases meant to replace outdated equipment or perhaps an aggressive arms build up. After Chávez first came to power, the U.S. stopped providing Venezuela with spare parts for its U.S.-manufactured defense weaponry. At the same time that Chávez and his government upgraded the country’s arsenal, they decommissioned aged OV-10 Bronco airplanes, as well as its French-made AMX-30 main battle tanks.
In addition, there may already be issues cropping up with the newly acquired Russian equipment. In early May 2009, one of the new Mi-35 helicopters crashed during a flight close to the Colombian border killing 18 soldiers, including Brigadier General Domingo Alberto Feneite. The cause for the crash has not been officially. The crash followed another incident involving new Russian equipment– this time a Mi-17 helicopter– which crashed in June of last year at Fort Tiuna, the military headquarters located in Caracas.
Military Size
Apart from reports on military purchases, important aspects of any military – for example, the size, morale and readiness of the Venezuelan armed forces – receive little mention by the international media. Chávez, a former lieutenant colonel, frequently praises his military’s might assuring that it can successfully protect the nation’s sovereignty if attacked (arguably by the U.S., which Chávez refers to as “the empire”). After a number of situations, such as the failed April 2002 coup against him that was followed by occasional purges, it seems that the current governing military chain of command is rather loyal to him.
The Venezuelan military forces have a combined strength of 140,000 troops consisting of both men and women. An interesting Chávez-era phenomenon has been the establishment of a paramilitary force in 2008, protected under the 2008 Ley Organica de la Fuerza Armada Bolivariana (Law of the Bolivarian Armed Forces) via Chapter V (articles 43-51). Chávez boasts that this militia has over 1 million members, but reports indicate that combat-ready individuals probably amount to no more than 10,000 to 15,000 members, in addition to its approximate 200,000 non-armed, non-combat members. Venezuelan analysts have described this militia as Chávez’s personal “praetorian guard,” being that the militia is not under the supervision of the armed forces, but instead, under the direct control of the president (article 43) and, for administrative issues, the defense minister as well.
Venezuela’s Friends Aren’t Necessarily Washington’s Friends
Another concern is the role of the South American nation’s military in conjunction with the government’s foreign defense policy, namely the relationship that Caracas shares with other regional nations, which, more often than not, are Washington’s active foes. Besides the aforementioned military purchases from China and Russia, Venezuela also has approached Teheran. In late April, Iran’s defense minister, General Mostafa Mohammad Najjar, visited Venezuela, where he met with his Venezuelan counterpart, Ramon Carrizalez. The Iranian defense minister described existing defense ties between the two nations as “comprehensive and strategic,” according to the semi-official Fars news agency. While no defense alliance per se has been signed, conservatives in Washington see Caracas’ efforts as a security issue revolving around a new kind of “axis of evil,” pertaining to the Chávez administration’s recently established relationship with Russia, China and Iran.
Caracas & Its Neighbors: Is There a Military Threat?
Another key question in discussing Venezuela’s military might is what is the state of the country’s existing relationship with each of its immediate neighbors? While it is true that Chávez is well-known for his occasional inflammatory declarations, which tend to raise alarms in weaker bordering countries as well as among conservatives and Cold War-era hawks in Washington, those who are familiar with his style see this as more a matter of bark than bite.
An overview of Venezuela and its series of security relationships with the outside world, as well as regional issues with its neighbors may help to illuminate this discussion:
- Guyana. Venezuela has had a historical border dispute with the country though the disagreement has never resulted in warfare. In November 2006, a Venezuelan general led a group of around 30 soldiers into Guyanese territory and destroyed several Guyanese-owned dredges, however, the situation did not escalate. It is unclear if Chávez gave the order for the general to carry out this operation or if the military officer acted on his own accord.
- Netherland Antilles and Aruba. Chávez has declared that Venezuela had historical claims to the islands, located only a stone’s throw away from Venezuela’s coast. It is a matter of discussion if Chávez’s statements were made because he believes in them or to confront the U.S. (which has two military bases in Aruba and Curacao) or Holland. At one point, Chávez labeled a former Dutch defense minister as “Washington’s pawn.” The Antilles are part of the Kingdom of Holland, and falling under its defense perimeter, would thus be defended by the Dutch in the case of a conflict. Holland and Venezuela held military exercises in order to boost confidence building in November 2008. Any attempt by Venezuela to militarily take control of the Antilles would erode any good standing Chávez may have with regional governments in the Caribbean, not to mention destroying the lucrative commercial relationship between Venezuela and Holland and, ultimately, prospects to improve Caracas’ relation with Washington.
- Brazil. The regional behemoth and Caracas held anti-drug military exercises on August 2008. Diplomatic, political and commercial relations aside, it would be an outlandish scenario to envisage strife between the two countries. The border between Venezuela and Brazil lies in the least developed part of the Amazon, which without any roads, would make it impossible to utilize traditional warfare. Such a conflict would have to be based around guerrilla-tactics (for which Venezuela’s AK rifles would be useful) as well as heavily relying on helicopters for the transportation of troops and equipment (the Venezuelan Mi-type helicopters would be a plus). But the disparity of strength between the two countries all but rules out the likelihood of violence.
- Colombia. The country’s historical tensions with Venezuela date back to pre-Chávez years. However, chronically strained relations between Uribe and Chávez have not helped this situation. Tensions have come about, among other factors, from Chávez declaring his sympathy for the FARC. In March 2008, when Colombia bombarded Ecuadorean territory where FARC leaders were hiding, Chávez sent his troops to the border, declaring he would go to war with Colombia in order to protect Ecuador (ruled by his like-minded friend Rafael Correa). In March 2009, Venezuela launched operation “Sentinel,” deploying the country’s armed forces and National Guard along its 2,219-kilometer border with Colombia. The goal of the operation, according to Caracas, was to fight crime and protect “national sovereignty.” The operation followed a verbal shouting between Chávez and Colombian Defense Minister Juan Manuel Santos earlier that month.
A Regional Military Power
The rhetoric coming from both Caracas and Washington has helped project a mirage of Venezuela’s military power. While Chávez strives to highlight his country’s might, a number of his attempted acquisition efforts did not come to fruition, such as the purchase of aircraft from Spain. In addition, his acquisitions may prepare Venezuela for conventional warfare with neighboring states; U.S. conservatives seem to view the Caracas-Moscow relationship as being set in stone. However, it is more likely that the relationship is heavily based on revenue, which continues to flow in and are the cause of Venezuela’s expanding arsenal.
Military strength cannot be simply judged by the number of operational tanks or military aircraft one possesses, but by the size and level of preparation and training of its armed forces. Thus far, Chávez has had complications with sectors of his military, but the rank-and-file troops continue to remain loyal to him and to the constitutional order. Exercises like those carried out with the Russian navy in November 2008 are good for morale, and also helps mold the Venezuelan military into an authentic regional power, though certainly not a hemispheric security threat, given its still very limited capacity to project its force.