Abstract
Brazilian President Luiz Inácio Lula da Silva has pushed for an increase
of more than 50% in Brazilian
defence spending through to 2010. The
country is developing a national defence plan, which may include
increasing troop numbers in the Amazon, building nuclear and conventional
submarines to protect
offshore oil fields and modernise its weapons
industry. It has signed an agreement with France to buy 50
military
helicopters and five submarines, including one nuclear-powered vessel, the
value of which could
exceed $11bn. A seriously deteriorating economy could
put pressure on these plans.
President Luiz Inácio Lula da Silva
remains under pressure. The opposition Partido Movimento
Democrático
Brasileiro (PMDB) has control of both houses of parliament, and is seeking
greater
influence on national politics. This could threaten the ruling
coalition and we wait to see if the PMDB
will support Lula’s
presidential candidate, Dilma Rousseff, in next year’s poll.
Our
outlook for Brazil’s economy has deteriorated – we expect a
contraction of 0.6 per cent this year,
with consumption and overall output
unlikely to recover this year. The main means of bolstering the
economy
available to Lula are stimulus packages, and in mid-May the China Development
Bank gave
$800 billion to its Brazilian counterpart, known as BNDES, to
shore up its cash amid the financial crisis.
This quarter, we have
introduced a significant new aspect to BMI’s Defence reports, which is
the City
Terrorism Rating (CTR). This assesses the risk of a terrorist
attack. The CTR takes into account the
overall BMI Terrorism Rating for
the country in question. It also incorporates the ‘prevalence’
of
terrorism, which recognises the frequency of attacks, and whether the
city is a target for terrorists. The
CTR also recognises the
‘threat’ of terrorism in terms of the likely numbers of victims
and the ability of
groups to launch sustained campaigns.
In Brazil we
assess the CTRs for Brasilia, Rio de Janeiro and Sao Paulo. These
City-Specific Ratings are
created via an integration of the state-wide
threat, with an evaluation of the city-specific characteristics
and level
of activity.
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