Brazil is the dominant nation in South America. By far the largest country on the continent, it borders all but two of the others. Commonly discussed as one of the BRIC countries (Brazil, Russia, India and China), Brazil is routinely ranked among the fastest growing economies of the developing world. With its increasing international profile, Brazil has begun to modernize its defense capabilities and nurture its aerospace sector.
In December 2013, after many years of detailed evaluation, the Brazilian government selected Saab to supply 36 Gripen fighter planes to its air force's f-x2 fighter programme.
Brazil's defense minister emphasised that a combination of several advantages proved decisive for Saab. He noted that the bid offered the best balance between Gripen's high operational performance, favourable acquisition and maintenance costs, and Saab's offer of technology transfer and industrial partnership.
Bo Torrestedt, Saab's Head of Market Area Latin America, has been working in and around Brazil for the past 25 years. "The cost of running our system is substantially less than either of the other bidders," Torrestedt says.
A study by the military analysts IHS Jane's found that the Gripen has the lowest operating cost of any Western fi ghter currently on the market, at $4,700 per hour compared with $11,000 for Boeing's F/A-18E/F Super Hornet and $16,500 for Dassault's Rafale, the other two aircraft under consideration.
Saab will share technology with contractors, and many parts for the aircraft will be made in Brazil.
"The Gripen NG is taking a big step into next-generation fighters," Torrestedt says. "With that come a lot of improvements that make it a new aircraft. Certain engineering and development work will be done in Brazil, while other parts of the work are done in Sweden and Switzerland. This is on the condition that Switzerland will follow through on its decision to buy Gripen, as well."
Brazilian aerospace company Embraer will play an important role in manufacturing the jets. "Saab has also promised to develop an aerostructures production unit in the city of São Bernardo do Campo in the Brazilian state of São Paulo," Torrestedt says.
Negotiations over details of the contract will take place in the coming months, and Torrestedt hopes to have a final agreement signed in December 2014. Saab already has a significant footprint in Brazil, as the country has been flying surveillance planes equipped with Saab's ERIEYE airborne early warning and control system for the past 13 years. The company has also provided training and simulation equipment, surface-to-air missiles, missile-tracking radar systems and electronic warfare and marine equipment.
This history, combined with the lengthy selection process for the fighter jet contract, has given Saab a high profile in Brazil that could influence decisions by neighbouring countries, such as Chile, Mexico, Peru and Colombia.
Torrestedt says that for a long time Europe's interest in Latin America was overshadowed by its involvement in Asia and other regions, but that interest has increased sharply in recent years. "Today Latin America has a much more stable economy, it is much more stable politically, and it is increasing its spending on defence and security because many of the countries have old, obsolete material."
ONE STEP AHEAD
Brazil faces unique challenges in maintaining control over activity within its borders.
Imagine a vast swath of territory, roughly the size of Europe, which is covered by the world's largest rainforest. It is sparsely populated and virtually inaccessible, a place where drug smugglers operate routinely and illegal mining and deforestation pop up repeatedly. Welcome to Brazil's Amazon Basin.
The area is lacking in infrastructure and is impossible to police from the ground. In 2002, Brazil outfitted a group of aircraft with an electronic surveillance system in order to keep an eye on activities.
Erik Winberg, Saab's Director of Business Development, was a key player in winning a contract in March 2013 to upgrade the ERIEYE Airborne Early Warning and Control systems on the Brazilian Air Force's e-99 aircraft, made by Brazilian aerospace company Embraer.
"Drug smugglers cut down trees and make landing strips in the jungle for small planes," Winberg says. "Now this system is able to detect those aircraft and see where they've landed. The Brazilians bomb the airstrips, and then a month later there are new airstrips, so there's a continual conflict going on."
Before Brazil launched the surveillance system, Winberg says, smugglers could operate with impunity. But the launch of the system in 2002 changed the equation, and two years later Brazil changed its law to allow the military to shoot down planes suspected of smuggling drugs. The smugglers responded by trying to look like civilian aircraft, and so the conflict goes on.
"The Brazilian Air Force is very quiet about its operations, but they're not playing games," Winberg says.
With Brazil hosting the FIFA World Cup in 2014 and the Olympic Games in 2016, the surveillance system is likely to be used to protect those venues. Mexico has also been using the system, to enforce no-fly zones during visits of foreign dignitaries.