Lula compromises Defense Industrial Base by denying armored vehicles to Ukraine

The decision by the government of President Luiz Inácio Lula da Silva (PT) to prevent the sale of Guarani armored ambulances to Ukraine, in a deal that would generate R$ 3.5 billion, prevented the development of new projects in the Army and could jeopardize the future of Brazil’s Defense Industrial Base, according to analysts interviewed by People’s Gazette. Lula gave it up for fear of displeasing Russia’s autocratic leader, Vladimir Putin.

The Brazilian government had received a proposal from Ukraine to produce and sell 450 light Guarani armored vehicles, converted into ambulances without weapons. They would be painted in the colors of the Ukrainian emergency and rescue services and used to evacuate civilians and the wounded from combat zones.

The sale would have a very positive impact on the Brazilian steel industry, on the Army and on the multinational company Iveco, which produces the tank in Minas Gerais. This is because, since production began in 2006, the limited demand for the product has allowed just over 600 Guaranis to be delivered to the Armed Forces so far. The factory, which works at about half of its production capacity, could generate more jobs and wealth.

Iveco cannot close the deal without Lula’s consent because the armored car project also belongs to the Army. The decision to veto the deal that could heat up the sector in Brazil may now have the opposite effect: discouraging other companies from investing in the Brazilian military segment, weakening both this sector of the economy and Brazil’s ability to defend itself against external pressures.

Army would receive R$ 180 million in royalties alone

The refusal of the sale of light armored vehicles to Ukraine, based on the decision of the Ministry of Foreign Affairs, is also another move in the dispute between Itamaraty and the Armed Forces. With the royalties it would receive for the deal, between 2% and 5% of the sale value, around R$ 180 million, the Army planned to invest in new, more modern versions of the armored vehicle.

The veto of the Department of Strategic Affairs, Defense and Disarmament of the Ministry of Foreign Affairs was revealed to Iveco Defense Vehicles (IDV), which restricted itself to saying that the ban was “a matter between countries”.

For professor at the Fluminense Federal University, retired Navy sea and war captain, Eduardo Brick, Brazil is now highly vulnerable because it does not have a solid Defense Industrial Base. That is, it depends on the good will of other countries to buy military equipment instead of developing their own defense industry.

If Lula had authorized the deal, Brazilian industries would have benefited from part of the billionaire sum that the United States is injecting into the private arms industry to guarantee Ukraine’s survival. So far, American investments in the area amount to the equivalent of R$ 240 billion worldwide.

According to him, defense industries like Iveco depend on government purchases to survive. “In this market there is only one customer, which is the government. Complex products like tanks, submarines, combat vehicles, these are products that only governments buy and preferably from companies in their own country”, said Brick.

Thus, the Lula government does not buy enough armored vehicles for the Brazilian Armed Forces, but also prevents other countries from buying.

According to Brick, for national defense purposes, it is no use for Brazil to have a well-trained military if it does not have companies producing weapons for these military personnel. According to him, the domestic industry should be stimulated not for financial reasons or job creation, but to meet the country’s defense needs. That’s because every other nation puts up barriers to trade in strategic equipment.

He stated that there is currently no public body thinking intelligently which weapons should be purchased abroad and which should be produced in Brazil to supply the Army, Navy and Air Force in an integrated manner.

“Today the situation is that there is not a single person or agency responsible for this, it is a redundant system, each force tries to do this for itself,” he said.

international dependency

Also according to Eduardo Brick, Brazil today depends almost entirely on inputs from other countries to manufacture its war products, and mainly on parts produced by the nations of the western military alliance.

NATO is an alliance formed by 31 countries, including the United States, Great Britain, Germany and France. It was created to contain the expansion of the Soviet Union in the last century and was practically reborn last year to contain Russian imperialism, which materialized in the invasion of Ukraine.

Western critics claim that it would have been the strengthening of NATO that would have motivated the Russian invasion.

In this context, even before assuming the Presidency, Lula has been demonstrating support for Russian leader Vladimir Putin. He has mistakenly said on several occasions that Ukraine was as much to blame as Russia for starting the war. Ukraine was the invaded country.

Flattery to Putin earned Lula discounts of US$ 25 to US$ 35 per barrel of diesel oil imported from Russia this year. But in the field of the war industry, it put Brazil in a situation that “does not make sense”, according to Brick.

“What is the intention? He [Brasil] is totally dependent on one side [a Otan] and is ‘dating’ the other side [Rússia]?”.

“This is the tip of the iceberg, we have a more complex problem than this particular case. The problem is Brazil’s position on the international scene, where does it want to be? Where does it want to stay? All decisions depend on these considerations.”

Army reserve major and risk analyst Nelson Ricardo Fernandes, from the ARP consultancy, considers that the unfulfilled sale of armored vehicles hinders the efforts of the national defense industry, but is not decisive. According to him, the biggest cause of the lack of development of the Brazilian defense industry is the Ministry of Defense itself, which does not program itself, does not have a systematic procurement schedule.

“Investments occur in spasms, this is the biggest problem I see,” said Fernandes. “Obviously Brazil is losing a significant sale, for an industry that is, shall we say, broken, it is missing a great opportunity”.

“On the other hand, I don’t imagine that the current government, with its ideological bias, is going to take any pro-Ukraine stance that would displease Russia”. inputs for agribusiness.This would be one of the explanations for the refusal to sell armored vehicles to Ukraine.

Another factor to be considered, in addition to the ideological link between the PT government and the Russian autocracy, would be the economic bloc of the Brics, formed by Brazil, Russia, India, China and South Africa, according to Fernandes.

“If you notice, none of the original members of the Brics are taking any more emphatic decisions against Russia. China is not doing this, India is not doing this. I think Brazil has a diplomatic trait of eternally staying on top of the wall, and I think it will continue either on top of the wall or leaning towards Russia,” said the risk analyst at ARP.

Brazil, in other times, even adopting a neutral posture in relation to conflicts, sold weapons in the Iran-Iraq war. The national industry awaits.