Brazil is reported to have put off a decision to purchase 36 fighter aircraft owing to its budget woes and spying by the U.S. National Security Agency (NSA).
Brazil is negotiating with Dassault of France and Boeing of the U.S. to pick between the Rafale and the F/A 18 Super hornet respectively. Talks are also on with Saab of Sweden for its Gripen fighter.
Reports of the NSA indulging in political and economic espionage on Brazilian and other South American countries hit the headlines earlier this week prompting a wave of anti-American comments. A government source was quoted in a Brazilian TV channel, referring to the purchase of Boeing fighters as, “We cannot talk about the fighters now…You cannot give such a contract to a country that you do not trust.”
However, the struggling economy seems to be a key reason for deferring defence purchases. Brazil has slashed its defense budget by $1.55 billion earlier this year. Massive street protests shook Brazil in June over government spending and corruption. Spiralling inflation, which has trebled food prices during the last one year and reduced jobs growth has forced the government to resort to some serious cost-cutting, primarily reduce defence spending.
Brazil has been considering buying fighter aircraft for more than a decade. Previously, Dassault came close to signing a deal with Sao Paulo but the deal was put off at the last minute owing to elections which brought the current president, Dilma Rousseff to power. Rousseff appeared to be leaning towards choosing Boeing after the U.S. Air Force bought 20 light attack planes from Brazilian company Embraer for use in Afghanistan. This time around, elections are slated for 2014, and government sources have been quoted by the Brazilian media as saying that, “no decision is possible before 2015-16.