With so much attention focused on Brazil and its security modernization prior to the World Cup and Summer Olympics, it’s easy to forget that there are other countries in South America making significant strides in military procurement. Peru, though it maintains a relatively small military, is shaping up to be one of the more vibrant markets over the coming decade. Since the early 2000’s, Peru has experienced steadily-improving economic conditions owing to a flourishing export-oriented economy. Increased foreign investment and the universal appeal of Peru’s main exports – gold, copper, and other vital metals – have lifted the country out of its previous slump and left it with a much stronger economic outlook. That influx of money is finally beginning to trickle down to the military, and with an aging inventory of platforms and systems, they are happy to see it. While GDP is slated to continue growing at around 6% to $223b in 2014, military spending, at least in the short term, is projected to more than double that rate.
Peruvian military procurement is focused on two main mission areas – naval security and anti-narcotics. Regional competition and a sizable coastline put pressure on the Peruvian military to maintain a robust, modern naval force. This has been a struggle up until recently, when new funding allowed the Peruvian navy to start exploring its options and expanding purchases. Daewoo International recently signed contracts with the Peruvian navy to build multipurpose vessels, while the fleet added river patrol boats, opened a competition for 500-ton patrol vessels, and stated a need for an Antarctic research vessel. While the budget may yet be a little too tight to handle a complete naval modernization in the immediate time frame, Avascent Analytics’ new 10-Year Forecast shows continued naval growth past 2022 as the military continues to shape itself in the out years.
Though much of the war against coca production is fought through the national police force, the military is seeing some bumps in procurement where responsibilities overlap. In the continued battle against narco-traffickers, Peru has found the Griffon 2000TD hovercraft particularly successful in navigating the southernmost reaches of the Amazon River (known as the VRAEM region – Valle del Río Apurímac, Ene y Mantaro). An initial order for two hovercraft turned into seven soon thereafter, and an undisclosed number have been slated for additional purchase. In addition to platform purchases, Peru is moving forward and expanding their C4I/ISR capabilities. The recent call for an earth observation satellite, ostensibly for both civilian and military use, will undoubtedly aid in tracking the drug trade and mapping Peru’s more remote interior regions.
Avascent Analytics’ 10 Year Forecast projects continued growth for the Peruvian military, as they augment naval capabilities with larger naval craft and extend the life of existing platforms with upgrades and supplemental spending. While certainly not the largest market in South America by any means, the Peruvian military is one of the few countries not tightening its budget in the coming years.