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Security and defense

The Industrial Base of Defense (BID), also known as the military-industrial complex, brings together companies, government agencies, and research centers that act, entirely or in part, in the development of products, services, and technologies for defense, security, and aerospace activities. It is a sector that, in general, needs intensive levels of capital and technology. Additionally, BID activities have a great capacity to increase the competitiveness and economic efficiency of a country through the strengthening of industry and technology, the increase in demand for specialized and qualified labor, advances in research across diverse scientific fields, and the development of new products and civil services.

As they are seen as strategic assets, countries such as the USA, France, and the United Kingdom tend to defend the control over supply within their borders and support the sector through proactive policies, such as military purchases and contracts, R&D programs, financing, and direct support for exports, among other methods. The volume of support given to BID activities represents between 2.5% and 3% of France’s GDP and 4.7% of the GDP of the United States.

In Brazil, investment is 1.5% of the GDP and the National Defense Strategy establishes a clear connection between military purchases and the industrial and technological development of the country. With this in view, military contracts tend to prioritize programs and companies that generate qualification for workers and local technological development, whether by national production or the transfer of technology in cooperation agreements with foreign powers.

The Armed Forces also present a vast program of military contracts for the next two decades in the White Book of Defense, including submarines, ships, helicopters, planes, fighter jets, defense and monitoring systems, armored vehicles, missiles, and general arms. This book orients the market and industry in the development of products, technologies, and partnerships with Brazilian military demands. Considering the demands of the Navy, Air Force, and Army, total sales are expected to be valued at roughly USD 50 billion.

Like all large-scale government programs, military purchases and support to the BID suffer with the restrictions imposed by the anemic economic growth of the country. Nevertheless, once the current adjustment of the Brazilian economy passes, investments in defense will return to account for a large part of the federal government’s resources. In the contracting pipeline, there are a number of strategic programs, such as: “Sisgaaz”, an overhaul of the naval fleet, “Proteger”, and the acquisition of missiles.

The identification of business opportunities and the verification of the viability of such activities requires interested companies to have an understanding of the business dynamic, local industrial policy, and the structure of the military sector in Brazil (each branch of the military has its own characteristics and priorities). It is also essential to locate support and R&D programs, a process that requires the capacity to analyze factors related to geopolitics and foreign policy.