With Argentina’s new leader likely comes an ‘austere’ defense budget: Analysts

As Argentina’s new president embarks on an ambitious plan to shore up the South American nation’s economy, analysts say the country’s defense budget is likely to be an early casualty of tightening belts.

“According to the government, there will be a very austere budget, including in the defense sector,” retired Argentine Rear Adm. Maximo Perez Leon Barreto told Breaking Defense recently, Breaking Defense reports.

When he came into office, new President Javier Milei made it clear that sacrifices would be made to get a handle on inflation. “I have to tell you again, there is no money,” he said during his Dec. 10 inauguration speech.

And it may be hard to convince the government that high-priced defense programs are a priority, as a recently published government strategic paper known as the White Paper noted Argentina does not face a threat of large-scale military action from basically anyone — and instead is most concerned with transnational crime, illegal fishing and the like.

But Buenos Aires does have several major modernization projects in various states of development across its military branches, and some analysts said Milei’s administration could push at least some of these forward for a variety of strategic and political reasons.

“The government’s priority could focus on combating drug trafficking and issues related to fishing, but generally speaking, [acquiring defense equipment] for security operations will receive more attention,” international affairs consultant Tobias Belgrano said.

In 2015, the Argentine Air Force (Fuerza Aérea Argentina) decommissioned its fleet of French-made Dassault Mirage warplanes, some of which flew during the 1982 Malvinas/Falklands War between Argentina and the United Kingdom. Since then, the service has operated without a primary combat aircraft. The Air Force currently flies old Lockheed Martin A-4R Fightinghawk warplanes in addition to the Embraer EMB-312 Tucano and locally-produced Fadea IA-63 Pampa light attack aircraft.

So Argentina has been in the market for a Mirage replacement, and several options are on the table, as Breaking Defense has previously reported. Among those are second-hand Danish Lockheed F-16 A/B Fighting Falcons, India’s HAL Tejas, or even the brand-new Chinese-Pakistani Chengdu JF-17 Thunder Block Three.

Washington is eager for Buenos Aires to select a non-Chinese aircraft to limit Beijing’s growing regional influence.

Analyst Andrei Serbin Pont, president of the Argentine CRIES think tank, agreed austerity was the name of the game for Milei, but he said the new administration could still prioritize the fighter program and, specifically, pursue the American-made F-16s. That choice would come with the added bonus of strengthening Buenos Aires’s relationship with Washington.

Anecdotally, in late November, just weeks before assuming office, then-president-elect Milei visited Washington to have a solid start to bilateral relations — though he did not meet with President Joe Biden — and as recently as Wednesday the White House sent a member of the National Security Council to Argentina, though defense was apparently not on the agenda.

 Submarines And Polar Vessels, Armored Vehicles

Meanwhile, the navy (Armada Argentina) has multiple outstanding projects. The Argentine navy currently has two submarines: the ARA Santa Cruz, which has been in a hangar for almost a decade, awaiting supposed mid-life repairs and upgrades, and ARA Salta, built in the early 1970s, currently docked in Buenos Aires.

Buenos Aires had expressed interest in modernizing its sub fleet, and options include buying new or used submarines, domestically manufacturing a sub (like Brazil has done) or repairing Santa Cruz. Projects involving the domestic construction or acquisition of surface vessels have yet to move forward either.

Elsewhere, in December 2021, the Ministry of Defense announced that the local shipyard Tandanor will manufacture a polar vessel to support icebreaker ARA Irizar during the navy’s annual Antarctic campaigns. Argentina is one of seven nations that claim Antarctic territory; hence, a constant physical presence across Antarctic waters is necessary.

The Finnish shipyard Akaer Arctic has developed the Antarctic Logistics Vessel concept ARC 133 for the MoD: The vessel will have an ice class of Polar Class 4 and a length of 125 meters. However, construction of the ship has not started.

More recently, in March 2023, then-Minister of Defense Jorge Taiana and governor of Buenos Aires province Axel Kicillof signed an agreement for the local shipyards Tandanor and Río Santiago to manufacture a multipurpose vessel, a floating dock, and the modernization of the fleet’s MEKO 140 corvettes. While local media reports speculated that Damen shipyard will provide the design for the future ship, no model was officially announced by the time the Alberto Fernández administration ended.

Finally, in November 2023, Buenos Aires announced its intent to purchase four offshore patrol vessels (OPVs) for the Naval Prefecture — a sort of coast guard and maritime gendarmerie, part of the Ministry of Security. Interested companies can submit their offers until March 15, 2024, when the Milei administration will decide whether to move the project forward.

At this point it’s unclear which, if any, of these projects will make progress under Milei, but Barreto said he believed the “importance of the maritime governance will become more self-evident due to the development of the blue economy” and growing human awareness about sustainable development.

As for the Argentine army (Ejército Argentino), the big, outstanding project is the replacement of its fleet of M113 armored vehicles. In January, the previous administration selected the Brazilian defense company IVECO to manufacture a fleet of 156 Guarani 6×6 armored vehicles. IVECO was chosen partly because Guarani’s motors are already manufactured in Cordoba, Argentina. However, production has yet to commence due to funding issues. Serbin Pont believes Buenos Aires could turn to a US supplier if necessary.

While the situation regarding major projects is problematic, the three services will receive some new(ish) equipment, a legacy of the previous administration. Expected arrivals include the second-hand Lockheed P3 Orion maritime patrol aircraft from Norway for the Navy and the final Beechcraft TC-12B Huron aircraft, out of an order of 12, for the Air Force and Navy.

Moreover, the army and the local company ITP Argentina are designing and manufacturing a new helmet for soldiers, which is currently undergoing testing.

For Belgrano, the Milei administration may acquire “equipment with dual use, civilian and military.” For example, helicopters, heavy-duty trucks and UAVs can be used for military ops, search and rescue, humanitarian assistance/disaster relief, and to combat wildfires.

The Milei presidency is expected to shake up Argentine society, politics and economy. However, at the dawn of the new administration, defense acquisition projects will likely remain a low priority and sluggish, as during previous administrations.