inss.dodlive.mil SF No. 284 1 

Brazil is a puzzling new player in the global system. Emerging as a 

complex international actor, it has come to be seen as a significant 

economic competitor and dynamic force in world politics.1 But transformational changes in the economic and political realms have not been accompanied by advances in military power. While Brazil has entered the world 

stage as an agile soft power exercising influence in setting global agendas and 

earning a seat at the economic table of policymakers, its military capacity lags. 

The national security strategy announced under President Luiz Inácio Lula da 

Silva in 2008 intended to redress this power gap. President Dilma Rousseff ’s 

2011 White Paper—so detailed that it is called a “White Book”—provides the 

conceptual roadmap to achieve a new military balance. But military modernization is still a work in progress.

Brazil has developed a framework to deepen its strategic reach. The country remains committed to defending the territorial sovereignty of its 26 states 

and nearly 17,000 kilometers (km) of borders with 10 neighbors.2

 We observe 

a multidimensional view of security in Brazil rooted in economic, political, and 

environmental dimensions. In addition to these more traditional security concerns, Brazil is particularly attentive to the returns from investments in technology and the social sector for national security.3

 The country aspires to deepen its 

institutional framework in national security and enhance its global profile across 

political, economic, and military domains.

But Brazil’s aspirations to transform hard power relations to match its soft 

power status involve significant tradeoffs. The current re-equipment program 

in Brazil may underplay attention to balancing the costs and benefits to society.4

 This paper explores the choices in the Brazilian quest for greater global 

balance in military affairs by introducing the concept of the defense trilemma 

The Defense Acquisition 

Trilemma: The Case of Brazil

by Patrice Franko

Strategic Forum

National Defense University

About the Author

Dr. Patrice Franko is Grossman 

Professor of Economics and Professor 

of Global Studies at Colby College.

Key Points

◆ Brazil is a puzzling new strategic 

player. Currently, its economic clout 

is not supported by strong operational military capabilities.

◆ To make its military instrument 

commensurate with its new geopolitical weight, Brazil is undergoing military modernization. But it 

faces a security trilemma: it must 

choose among long-held aspirations of sovereignty, integration 

into the global value chain, and 

economic sustainability.

◆ Acute tradeoffs are being avoided 

by leveraging diversification of 

global partnerships into a wide 

but shallow defense supply chain 

integration.

◆ With its new global reach, the 

Brazilian defense industrial base is 

not a continuation of the defense 

industry of the 1980s. Instead, 

complex industrial relationships 

and civil society engagement 

create a critical disjuncture from 

the inward looking pattern of the 

earlier phase.

◆ Strengthening legal frameworks 

between the United States and 

Brazil to support defense cooperation would allow private-sector 

initiatives to deepen bilateral ties.

January 2014

C

e

nter 

for S

t

rategic ReSEA

RCH
2 SF No. 284 inss.dodlive.mil

to highlight the options facing Brazilian policymakers 

as they attempt a military modernization commensurate 

with Brasília’s soft power status. A trilemma suggests 

that when a country has three objectives, it must sacrifice 

one to achieve the remaining two. The defense trilemma

introduced here posits that in Brazil’s quest for defense 

re-equipment—if it wants to continue on its path of stable economic growth—it must choose between its deep 

rooted commitment to autonomy and deeper integration 

in the global defense value chain.

We begin by detailing the concept of the trilemma. With the framework for choice among competing 

ends established, we delve into Brazil’s distinct notion 

of autonomy. Presented as a principle that has historically guided strategic thinking but has adapted to new 

forces in the global system, we note the distinctions between traditional desires for sovereignty and autonomy 

and how these have been shaped by globalization and a 

rebalancing of political and economic power. Even if autonomy is understood in its most recent manifestation as 

engaging a diverse set of partners, we see that some autonomy must be sacrificed to achieve the competing goal 

of modernization in defense equipment. The Brazilian 

military has long prioritized acquiring technology and 

productive know-how for sustained military production. 

But the national defense industrialization strategy pursued in the 1970s and 1980s now confronts global value 

chains in defense production. If Brazil chooses to deepen 

its integration in the global value chain, it will need to 

sacrifice autonomy. Of course there remains one option—

undermining economic sustainability to gain autonomy. 

Brazil’s commitment to macroeconomic stability is therefore introduced. We suggest that wavering from this economic commitment would be a self-defeating choice in 

that it would undermine the important soft power that 

it earned as an emerging global market. Appreciating fiscal constraints, we conclude by showing that Brazil’s balanced autonomy exercised through participation in the 

global value chain is fundamentally different from the 

strategy Brazil pursued in the past to promote defense 

modernization. We also see that new opportunities for 

U.S.-Brazilian engagement are created through industry 

partnerships.

The Impossible Defense Trinity

Although new to strategic thinking, the concept of 

trilemma to illustrate tradeoffs is well known to the student of international economics. The monetary trilemma 

is often dubbed the impossibly trinity. As shown in figure 

1, the triangular shape illustrates that if exchange rate 

stability is a key objective, it cannot be achieved if the 

economy is open to inflows from global capital while also 

pursuing an independent monetary policy. The trilemma 

focuses on the tradeoffs between open capital markets 

and the desire for monetary autonomy under a fixed exchange rate regime. Prior to the mid-1990s, countries 

pursuing policy goals of price stability were counseled 

to choose a fixed exchange rate regime. The prescription, 

preferred by the International Monetary Fund, linked a 

nation’s currency to a globally traded store of value such 

as the dollar, pound, or gold to promote accountability 

to a stable monetary policy. But it also meant that the 

pursuit of an autonomous monetary policy would be difficult. If the policy goal was exchange rate stability, increasing the money supply would put downward pressure 

on the currency. National investors would perceive this 

and put their money elsewhere as they anticipated future 

devaluation. Conversely, a tighter monetary policy would 

Figure 1. The Macroeconomical Trilemma

Impossible Trinity

Open Capital Markets

Independent

Monetary Policy

Fixed

Exchange Rate
inss.dodlive.mil SF No. 284 3 

involve an increase in the domestic interest rate, attracting capital to the country. As foreign currency flowed in, 

the central bank would be forced to increase the supply 

of local money to maintain the fixed exchange rate—an 

increase that was the opposite of the contractionary policy move. The lesson is that freely mobile capital impedes 

the discretion of central bankers to set autonomous 

monetary policy under a fixed exchange rate regime. Any 

attempt to ease pressure on the economy is thwarted by 

the need to defend the exchange rate.

The trilemma therefore focuses our attention on 

choice sets. We can have a fixed exchange rate and an 

autonomous monetary policy if we do not allow the free 

flow of capital.5

 For each case, two of the three objectives 

are achieved; all three cannot exist simultaneously. We 

can parallel this logic in defense acquisitions by adapting the monetary case to the defense trilemma shown 

in figure 2. Like independence in monetary policymaking, autonomy to pursue sovereign goals is a coveted aim. 

Nations have long held autonomy as central to their national security objectives. A primary goal of most security policies is the ability to defend national interests and 

objectives against aggression—without debilitating dependence on the consent of others. The ability to procure 

defense material is therefore seen as central to military 

sovereignty. If a nation does not have the capability to 

produce equipment internally, it is subject to the restrictions that others may place on purchases.

To operationalize such autonomy, however, countries 

need access to the technology embedded in the global value chains that characterize defense production. Of course, 

pure autonomy is an illusion when confronted with economies of scale in defense production. Defense production 

is peculiar in that it normally involves a technological 

edge procured at high cost. But these investments in advanced systems cannot be amortized over a large production scale. When facing a limited number of clients—one’s 

national armed forces and perhaps a few friendly military 

forces—the opportunity to push down the cost curve to 

take advantage of scale is ordinarily limited. This begins 

to explain the difference between producing a truck and 

Figure 2. The Defense Modernization Trilemma

a sophisticated armored tank. The design and production 

costs involved in truck manufacturing can be spread across 

the millions of units sold. Sophisticated tanks are another 

story; costs remain high as the demanding technologies 

are spread over barely a thousand vehicles in a comparable 

period. Even in the United States, the country with the 

largest defense production capability in the world, autonomy is limited by its integration in the global supply chain 

for defense. It partners with allies to allow for the expansion of scale to drive down the costs of high technology 

items. The global economic crisis has created incentives for 

greater cooperation in Europe and the United States to 

share development costs.6

Constraints on autonomous procurement in the 

global supply chain can be overcome by pouring resources into defense acquisition. With ample budgets, a country can purchase the systems and the science to meet 

national security objectives. Nonetheless, forfeiting economic stability can paradoxically undermine aspirations 

for global power. We witnessed the destructive results of 

unbridled Cold War spending. We also have to wonder 

about the capability of China to continue to underwrite 

uneconomical military expansion. As we see in the case 

of Brazil, a broadly democratic commitment to a responsible defense acquisition strategy constrains the country 

Globalization of Technology and Production

Security

Autonomy

Economic

Sustainability
4 SF No. 284 inss.dodlive.mil

to sacrificing autonomy or further integrating into the 

global value chain to meet its national security goals.

Costs of Preserving Autonomy

When we type the term unholy trinity into Google 

Translate, “profane trinity” pops up in Portuguese. Indeed profanities might slip out as frustrated defense policymakers navigate the tough tradeoffs between defense 

modernization and autonomy with a relatively fixed pool 

of budgetary resources. Sovereignty, or the ability to implement self-rule without being constrained by others, 

has long been an unsatisfied objective of Brazilian policy.7

 Autonomy can be understood as the means to implement sovereign decisionmaking in a global system. Powerful nations are able to exercise autonomy in the pursuit 

of sovereign goals. Although a country may be seen as 

sovereign in a legal sense, in practice less powerful countries have been unable to control territorial incursions or 

exclude external actors from domestic interference.

Brazil has been characterized as a nation whose 

strategy is grounded by nationalism in the service of 

sovereignty.8

 As the celebrated Brazilian strategist General Carlos Meira Mattos opined, “We possess all the 

conditions that enable us to aspire to a place among the 

world’s great powers.” Brazil’s search for autonomy is a 

guiding concept in its foreign policy.9 The doctrine articulated by the Escola Superior da Guerra (Superior 

War College) defines national power as the capacity to 

act independently, supported by an array of men and 

means, to reach and maintain national objectives. Such 

national power is expressed through five elements: politics, economics, psychosocial factors, the military, and a 

scientific and technological base.10 The long-held objective of autonomy in pursuit of national goals was laid out 

by Brazilian Foreign Minister Antonio Azeredo da Silveira 

in 1975 when he stated that Brazil must achieve “an outstanding position in the world,” free from the “paths of 

hegemonic construction of the past.”11 The power to influence others in the global system is intricately tied to 

Brazil’s foreign policy. As noted by Ambassador Samuel 

Pinheiro Guimarães, sovereign control over the means of 

power is the only way for a country to achieve national 

goals; for Guimarães, these strategies of national defense 

are clearly tied to foreign policy.

Yet for Brazil, autonomy has been an elusive quest. 

Brazilian political and economic power has quickly advanced in the 21st century. As a U.S. Council on Foreign 

Relations report concluded, Brazil now makes the short 

list of countries shaping the world.12 For Brazil, this enhanced global position is largely a function of agile international politicking, a top 10 economy, and new national 

confidence that the nation has arrived. Yet there remains 

a good deal of uncertainty as to Brazil’s sovereign capabilities in the security arena.

Affirming Brazilian national interests involves contesting the asymmetries of power in the global system.13

Brazil has taken on asymmetries of power through three 

expressions of autonomy: distance, participation, and diversification.14 In the first stage, paralleling the economic 

approach of import substitution industrialization, Brazil 

turned inward and engaged in a foreign policy that imposed distance between itself and hegemonic powers. It 

diversified its diplomatic and trade relations and formalized its identity as a representative of the Third World in 

North-South relations.15 During this period, which largely dates from the beginning of the military regime in 1964 

through the transition to democracy in the early 1980s, 

the country condemned the control of international trade, 

finance, and nuclear regimes by the hegemonic North 

while forging alternative relationships among Southern 

partners.16 Autonomy through distance largely opposed the 

international order of the time, preferring greater autarky 

from the great powers to preserve sovereignty.17

The expression of Brazilian autonomy was transformed by changes in the global economy. As the import 

the power to influence others in the 

global system is intricately tied to 

Brazil’s foreign policy
inss.dodlive.mil SF No. 284 5 

substitution model was thwarted by the global debt crises of the 1980s, a change in approach became necessary.18 Reluctantly at first, Brazilian policymakers slowly 

became convinced of the need to participate in global 

political and economic institutions in order to acquire 

power. First led by Fernando Collor de Melo and then 

Fernando Henrique Cardoso, Brazil edged toward 

greater participation in multilateral forums as a means of 

achieving its goal of autonomy. Autonomy came to be 

seen as the ability to influence world affairs.19 To become 

an international force, Brazil perceived that it needed 

to play within global regimes. Although suspicious of 

a close embrace with the United States, Brazil began a 

systematic insertion in global institutions. Rather than 

rejecting the neoliberal order, it began to use institutions 

such as the World Trade Organization to gain leverage 

and policy space. Pragmatism prevailed. In order to be 

seen as a cooperative player in economic and environmental spheres, Brazil accepted international norms in 

the security sector. It renounced the right to conduct 

nuclear tests, even for peaceful purposes, and introduced 

nuclear safeguards and protection of sensitive military 

technologies.20 Competitive insertion in the international economy and leadership in the environmental arena 

were traded for strategic autonomy.

As U.S. unilateralism became more dominant in the 

new millennium, Brazil practiced greater assertiveness in 

international institutions as a counterweight to American power.21 But rather than retreating into autarky to 

preserve autonomy, Brazil built strength within global 

institutions by widening its cooperative base. With the 

goal of redressing asymmetries in the international arena, 

Brazil pursued its new foreign policy agenda of human 

and social rights, environmentalism, technology, and 

managed financial flows in concert with other developing country partners. Autonomy through diversification

therefore embraced South American neighbors through 

Mercosur (Southern Common Market), amplified South 

Atlantic ties with Africa, and built frameworks for cooperation with other big emerging markets in the BRICS 

(Brazil, Russia, India, China, and South Africa) club. 

Autonomy through diversification does not reject the 

institution-building and rule-setting agendas of participation; rather, it shifts the locus of engagement from a 

broader multilateral stage to a South-South approach. 

In the service of creating a greater equilibrium in global 

affairs, autonomy intensified relations with emerging 

market partners to propel a Southern momentum in foreign policy. Attempting to leverage the global economic 

rebalancing toward the South, Brazil has been pushing 

for more policy space at the strategic level for developing country partners, thereby enhancing its autonomy 

at home. Such partnerships with developing countries 

have been characterized as “consensual hegemony” that 

rests on shared interests of participating states.22 Celso 

Amorim, Brazilian minister of foreign affairs (and later 

defense minister), situates this as the nation’s comparative 

strategic advantage: “Brazil’s great skill is to be friends 

with everyone.”23 President Lula elevated the strategic 

focus on cooperation even further. His goal was to increase Brazil’s “weight” in international affairs through 

coalition-building in order to “soft balance” against powerful Northern structures that he saw as detrimental.

These alliances are more ad hoc and fluid than institutionalized and rigid. They fit a stylized Brazilian 

characteristic of jeitinho (“finding a way”) or creatively 

adapting to circumstances. As can be illustrated in the 

case of the South American integration scheme Mercosur, Brazil is interested in levers to adjust asymmetries 

of power but not in creating binding constraints of new 

alliances.24 UNASUR (Union of South American Nations) represents a wider yet shallower integration effort. 

Its South American Defense Council, formed in 2009, 

promotes confidence-building without firm strategic 

commitments.25 Instead, Brazil sees itself as a “global 

alliances fit a stylized Brazilian 

characteristic of creatively adapting 

to circumstances
6 SF No. 284 inss.dodlive.mil

trader” with multiple organic links to Asia, Africa, and 

Europe. To use a soccer analogy, we could think of Brazil 

as a premier league player. It is happy to practice and play 

in the local league but fields a traveling team in foreign 

policy that extends beyond its neighborhood.

Lula, and later Rousseff, pursued a soft balancing 

against the United States to shape a world more favorable 

to Brazil’s interests. The administrations have presented 

a dissuasive defense, designed to guarantee sovereignty, 

national patrimony, and territorial integrity through the 

dual strategies of dissuasion and diversified cooperation. 

Its approach is inherently nonconfrontational, placing 

primacy on the ability of other countries to exercise sovereignty within their borders.

This new Brazilian notion of autonomy has adapted to a multipolar globalized system. But the ability 

to exercise influence in foreign relations and the global 

economy is limited by Brazil’s weaknesses on technological and military fronts.26 Without appropriate instruments of power, Brazil cannot be seen as a credible 

global player acting in its own sovereign interests.27 Redressing asymmetries of hard power is most problematic 

in the control of technology and production processes in 

the military sector. In September 2007, President Lula 

announced a new working group to structure a modernization plan for the armed forces titled the Strategic 

Plan of National Defense. It fell within a broader plan of 

economic modernization called the Plan to Accelerate 

Growth (PAC) and so became known as PAC-defense. 

In light of strategic objectives, it was charged with reactivating the national armaments industry to promote 

autonomy in defense and realigning defense personnel to 

new threats and identifying internal roles for the armed 

forces in maintaining law and order.28 Table 1 provides 

a glimpse of some of the modernization programs, but 

these programs demand defense industrial partners.

Constraints to Modernization

Technology is central to the equation for global 

power. As the Política Nacional de Defesa (National 

Defense Policy) notes, technology is fundamental to national defense.29 But technology has increasingly become 

embedded in complex global value chains.30 Production 

no longer takes place by country and product. Rather, 

firms have evolved a new geography of production that is 

driven by the management of information and processes 

over geographical space. Although in the general case 

this new geography of growth has favored the relocation 

of power from the former industrial centers to emerging markets such as Brazil, production control exercised 

over sensitive or dual technologies limits integration of 

Southern partners in defense.31 Legal constraints by the 

United States and Europe, imposed for security reasons, 

limit the transfer of knowledge to the periphery.32 Defense technologies are tightly controlled within production networks. A central challenge for Brazilian defense 

modernization is how to capture spillovers from global 

innovation networks in security products. Given the high 

degree of knowledge asymmetry in the defense sector, 

participation is crucial to meet modernization goals. Yet 

such participation will also create tradeoffs in achieving 

the goal of autonomy. To meet the conditions set by the 

Pentagon or European defense ministries, Brazil’s firms 

and its foreign policies must become more closely aligned 

with Western interests—a compromise of autonomy.

This is not an all-or-nothing proposition. Across 

Brazil’s nationally produced defense systems, firms already participate in the global value chain. But according to the Organisation for Economic Co-operation and 

Development (OECD), Brazil also has one of the lowest 

rates of participation by large firms in collaboration on 

innovation activities, with under 20 percent as opposed 

to nearly 60 percent in the United Kingdom or over 40 

percent in France.33 Brazilian participation in defense 

industrial systems is even further limited. Yet as retired 

redressing asymmetries of hard 

power is most problematic

in the military sector
inss.dodlive.mil SF No. 284 7 

Brazilian General Jose Carlos Amarante notes, no country can meet its defense needs in isolation.34 The conundrum is that military technology is expensive to develop. 

To understand technology acquisition in defense production, consider an adaptation of C.K. Prahalad and 

R.A. Mashelkar’s “Innovation’s Holy Grail” on civilian 

technology in developing countries (see table 2).35 To ensure complete autonomy in operations, a country might 

choose to develop technology embedded in systems. At 

the opposite end of the spectrum, it could attempt to 

purchase the know-how. In between the two poles of this 

classic make-buy dichotomy in defense systems, a country might elect to cooperate with either the government 

or firms in other nations to develop systems.36 These options are represented on the horizontal axis of table 2. 

To innovate and gain an advantage in the production of 

a technological system, Prahalad and Mashelkar suggest 

that firms pursue three strategies, represented on the 

vertical axis of the table. Firms might implement new 

business models and take advantage of lower labor or input costs or original delivery mechanisms—that is, the 

innovation takes place in the process, not the product. 

Alternatively, the firm might synthesize existing technologies, offering a variation on an existing product that 

better meets requirements—especially if it is also able to 

do so at lower cost. Finally, innovation may take place 

through creating genuinely new capabilities through 

ground-breaking design, the top row in the table.

We can place Brazilian strategic projects on this grid 

to characterize their innovation approaches. First consider 

Army Navy Air Force

Fleet of wheeled armored vehicles 

(Guarani)

Surveillance for the Blue Amazon 

Management System

Fighter jets

Operation of special forces brigades Ocean patrol boats through 

Programa de Obtençâo de Meios de 

Superficie

AMX and expand fleet of Super 

Tucanos for training and counter 

insurgency operations

Antiaircraft and communication 

capacity

Prosub construction of nuclearpropelled submarine and 

modernization of conventional 

submarines

KC-390 tactical transport and 

humanitarian missions

Astros 2020 (missiles) Torpedoes, missiles, helicopters, and 

command and control systems

Management of resources, 

operational capacity, and human 

resource investments

Critical infrastructure protection 

through PROTEGER

Deployment of shipyard and naval 

base

Monitoring and surveillance via 

unmanned aerial vehicles (UAVs)

Bridges and boats for Amazon Logistical support ship Air traffic control

Via Integrated Border Monitoring 

System, maintain control of Brazil’s 

borders with 10 neighbors via radars, 

communications networks, UAVs, 

and armored vehicles

Seahawk helicopters Blackhawk helicopter modernization

First Brazilian geostationary satellite

Pantera helicopter modernization

Table 1. Brazilian Military Modernization Priorities

Sources: Aggregated by the author from João Fábio Bertonha, “Brazil: An Emerging Military Power? The Problem of the Use of Force in Brazilian 

International Relations,” Revista Brasileira de Política Internacional 53, no. 2 (2010), 107–124; SIPRI, “Transparency in milex”; Projetos prioritários 

da Força Aérea Brasileira [Brazilian Air Force Priorities], available at <http://aerospacedefensebr.blogspot.com/2012/09/projetos-prioritarios-daforca-aerea.html>; Max G. Manwaring and Andrew Fishman, Brazil’s Security Strategy and Defense Doctrine, Colloquium Brief (Carlisle Barracks, 

PA: Strategic Studies Institute, 2011), available at <www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=1049>; Luis Aguiar, presentation to the Brazil-American Chamber of Commerce, New York, NY, April 23, 2013.
8 SF No. 284 inss.dodlive.mil

the case of Iveco. Part of the Italian Fiat Group, Iveco’s 

Brazilian division has developed the Guarani, an armored 

car, in conjunction with the Brazilian army. It received approximately 1.527 billion reais (USD 0.75 billion) as part 

of the government’s Plan to Accelerate Growth program. 

The line is expected to engage 110 direct and 600 indirect suppliers with a national content of 60 percent.37

Iveco is banking on offering a lower price armored car 

to its UNASUR neighbors (including Argentina, Chile, 

Colombia, and Ecuador) where the product innovation 

is a modular design that will permit the incorporation 

of different turrets, sensors, and ammunition systems.38

Iveco might be represented by the middle star in table 2. The Guarani was designed in cooperation with the 

needs of the Brazilian army, adapting systems to tough 

tropical conditions. The Italian parent company passed 

know-how largely through investment in Brazilian engineers’ training in Europe. Key adaptations were made in 

terms of weight, amphibious capabilities, and electronic 

information systems.

Below and to the right we might place the submarine 

project, Prosub, which aims to build four conventional and 

one nuclear submarine. The Brazilian navy created a joint 

venture called CBS (Cónsorcio Baía de Sepetiba) with 

the French DCNS and the Brazilian subsidiary of Odebrecht, providing the foundation for the development of a 

national submarine. The navy has committed to developing the capacity for domestic production of four Scorpene 

conventional-propulsion submarines and one nuclear submarine to protect the country’s 8,500 km of coastline and 

its undersea oil reserves. Rather than a turnkey approach, 

Brazilian engineers spent several years in France to gain 

Create new 

capabilities (design)

Synthesize 

technologies

Disrupt business 

models via lower cost 

of new partnerships

Transfer technology 

(buy technology)

Cooperative development 

with other governments or 

multinational companies

Autonomous 

development (make 

technology)

Table 2. Sources of Technology and Extent of Innovation

Innovation Processes

Extent of Innovations

Source of Technology

Source: Adapted from C.K. Prahalad and R.A. Mashelkar, “Innovation’s Holy Grail,” Harvard Business Review 88, no. 7 ( July–August 2010), 

132–144; and José Carlos Albano do Amarante, “A base industrial de defesa brasileira” [The Industrial Base of Brazilian Defense], Institute of 

Applied Economic Research Working Paper 1758, 2012.
inss.dodlive.mil SF No. 284 9 

the expertise necessary for technological development 

at home. Odebrecht operates as an integrator. Drawing 

upon its extensive experience in long-term construction 

projects, its advantage is in project management and the 

ability to assimilate technology.39 Overseen by the Brazilian navy, the potential for spillovers into dual-use technologies dominated only by global powers has warranted a 

slower but autonomous process of national production. In 

addition to dominating the technology, the Brazilian navy 

hopes to decrease the cost on an order of 50 percent by the 

choice of less expensive materials in construction. Prosub 

is placed between cooperative development and autonomy; the goal of the navy is to dominate the technology 

nationally, but it has been drawing upon cooperation to 

achieve autonomy.

At the top-center of table 2 we could place Embraer’s 

KC-390. This medium-lift military transport aircraft, 

specifically designed to conduct troop and cargo transport in the Antarctic and Amazon regions, is expected to 

set new standards for performance, cargo capacity, flexibility, and lifecycle costs.40 It would allow aerial delivery 

and in-flight refueling and support search-and-rescue 

and medical evacuation missions. Its adaptability to 

tropical conditions provides value to customers operating in difficult environments. Some call the redesign to 

operate in high heat and humidity the “tropicalization” of 

technology.41 The $1.6 billion Brazilian air force contract 

intended to replace the Lockheed Martin C-130 may 

also find roles in Argentina, Chile, Colombia, the Czech 

Republic, and Portugal. The KC-390 will not fly until 

late 2014 and is 5 years from service entry, but it already 

accounts for the largest share of Embraer Defense and 

Security (EDS) annual revenues, bringing in about $400 

million in 2012.42

The KC-390 is placed in the center of the source of 

technology axis to reflect the new role of Embraer as a 

systems integrator.43 As Luiz Carlos Aguiar, president of 

EDS, notes, Embraer is squarely positioned in the global value chain to deliver products designed to meet the 

needs of its customers by drawing together top suppliers 

of aeronautical subsystems.44 Aguiar sees Embraer as a 

manager of complex systems, acknowledging that it is 

impossible in today’s market to develop aircraft alone.45

EDS adds value in marrying high technology subsystems 

such that the pilot operates a seamlessly integrated piece 

of equipment. A modification of one part of the aircraft 

would require modifications in others for the pilot to experience an integrated interface.46 The KC-390 is placed 

in the uppermost vertical segment of table 2 in that it appears to offer new capacities in large-scale lift with abilities to operate in challenging environments.

In each of these three cases, we see Brazil’s engagement in the global value chain—but with varying 

levels of innovation in product development. Brazilian 

defense modernization strategies evidence an appreciation for the role of defense value chains. In 2010, 

Defense Minister Nelson Jobim emphasized the need 

for joint ventures with shared production responsibilities and technology transfer to promote the domestic 

defense industry so that in the future it may independently produce its own military equipment.47 His successor, Minister Celso Amorim—who has also served 

as foreign affairs minister—has highlighted the need 

for investments in the defense industry in order to promote a “reasonable degree of technological autonomy” 

and stimulate overall industrial growth.48

As a means of preserving autonomy while procuring technology, Brazil has followed its foreign policy of 

diversification in the defense sector. Brazil has developed 

diverse defense production partnerships. We can trace 

agreements with European, North American, South 

American, Middle Eastern, and BRICS partners in defense modernization. Paralleling changes from autonomy 

through distance to autonomy through participation, this 

re-equipment is squarely different from that pursued in 

Brazil has followed its foreign

policy of diversification in the 

defense sector
10 SF No. 284 inss.dodlive.mil

the 1970–1990 period. Promotion of the defense sector 

in its earlier incarnation was inwardly oriented, utilizing international technology transfer when necessary but 

focused on the promotion of a national defense industry in Brazil. Ownership was both public and private; at 

the time, Embraer was state owned, and armored vehicle 

firm Engesa and the missile entity Avibras were privately 

financed. Each was strongly connected to national military programs to promote defense production at home.49

In contrast, the 21st-century Brazilian defense industrial 

base is squarely integrated into global value chains, paradoxically promoting autonomy in re-equipment.

The Spending Constraint

Brazil could escape the tension of choosing between 

autonomy and national technological development if budgets were not an issue. In the abstract, it is conceivable that 

Brazil could spend its way out of the defense modernization trilemma—but this would come at an enormous 

cost and ultimately undermine its source of soft power. 

Brazilian economic stabilization in the mid-1990s was 

hard-won. Following two decades of inflation fueled 

growth and stagnation, administrations as different as 

Cardoso and Lula held to fiscal restraint and goals of 

monetary stability. In policy circles, there is a deep acceptance of the need to reduce the so-called Brazil cost 

in order to grow. In addition to needed changes in the 

unwieldy business environment and deficits in infrastructure, the Brazil cost is a legacy of years of spiraling inflation and default risk. Although Brazil no longer 

faces uncontrollable prices or unstable debt, the price it 

must pay in global capital markets remains high. Its penance for decades of profligacy is the need to constantly 

assure markets of its current good behavior. This has involved meeting primary budgetary surpluses of between 

2 and 3 percent of gross domestic product (GDP). Since 

a primary surplus measures the current fiscal stance of 

a government (it does not include past debt due), it indicates the future sustainability of public finances. By 

keeping these within a target of 2–3 percent—a range 

more constricting than economies the size and depth of 

Brazil might ordinarily need—Brazil is able to maintain 

investment grade credit, lowering the costs of borrowing for both firms and the state.50 A big burst of defense 

spending that upset this capital markets balance would 

ripple throughout the economy, raising capital costs and 

lowering Brazil’s global growth potential. When one 

overlays pressing needs of infrastructure investments in 

advance of the World Cup and the Olympics as well as 

a firm commitment to social spending to eradicate the 

worst pockets of poverty, defense spending in Brazil is 

hardly poised for a grand takeoff.

This is not to say, however, that defense spending 

will not increase at significant but incremental rates. Defense budgets in Brazil have been noticeably flat as a percentage of GDP. Its commitment to military spending 

has narrowly ranged between 1.5 and 2 percent of GDP 

for the last two decades. Relative to its size, Brazil underspends on its defense. As Thomas Sheetz documents, 

gross dollars spent even overstate its re-equipment potential as 75 percent of the budget is driven by personnel costs, with pensions alone eating up 40 percent of 

spending in the country.51 Increasing defense spending 

must be done carefully so as not to undermine Brazil’s 

economic foundation.

Not only is the level lower than other BRICS or 

many OECD nations, but the rate of increase in the past 

decade has not kept up with expansion in other large 

emerging markets.52 While military spending in China, 

Russia, and India increased from 2002–2011 by 170 

percent, 79 percent, and 66 percent, respectively, Brazilian spending only grew by 22 percent in this period.53

This gap has not gone unnoticed by Brazilian strategists. 

Minister of Defense Celso Amorim argued before Congress that if Brazil is to assume its role as a world power, 

relative to its size,

Brazil underspends on its

defense
inss.dodlive.mil SF No. 284 11 

it must invest in defense at the BRICS level.54 Amorim 

has signaled a doubling of the acquisition budget, but 

achieving this is most likely to come by introducing efficiencies in personnel costs.

Opportunities for U.S.-Brazil 

Relations

There will likely be a greater demand on the part 

of North America and Western Europe to offset their 

own defense contractions through partnerships with 

the global south. As sequestration in the United States 

and fiscal contraction in Europe wither defense budgets, the motivation to appropriate scale economies 

through collaboration is increased. From the U.S. side, 

the groundwork has been laid with the Obama administration welcoming increased frequency of highlevel visits with Brazil. The 2010 Defense Cooperation 

Agreement signed by Defense Minister Jobim and 

Defense Secretary Robert Gates opened the parameters for enhanced dialogue.55 In 2012, the U.S.-Brazil 

Defense Cooperation Dialogue identified six priority 

areas for partnership: science innovation and technology transfer, logistics, communications, humanitarian 

assistance and disaster response, cooperation in support of African nations, and cyber security. Shared 

strategic interests in counternarcotics and border control create openings as U.S. and Brazilian firms hold 

a wide array of win-win opportunities in these areas. 

With limited scale, few firms can dominate all stages of production; through partnerships, national and 

global interests can be achieved. As a former Deputy 

Assistant of Defense for Western Hemisphere Affairs 

noted, transnational problems require multilateral solutions.56 Brazil’s diversified partnerships open opportunities to enhance multilateral options for the United 

States. In particular, development of programs on the 

nonlethal spectrum—which by constitutional design 

is squarely the Brazilian niche—can reinforce capabilities in areas such as monitoring, navigation, and 

control that are central to the new Brazil national defense strategy. There is significant space for what Ambassador Luigi Einaudi has characterized as mutually 

beneficial engagement.57

The foundation for high-tech trade has been laid by 

bilateral agreements, and taking full advantage of these 

advances requires passage by the Brazilian congress. But 

even without changes in the legal environment, firms 

can signal their commitment to work in and with Brazil. Recent activity between Boeing and Embraer may 

be indicative of future trends in this direction. Boeing 

has recognized the long-term potential of Brazil with 

the inauguration of its sixth global center for science 

and technology. This is not only about making the big 

sale of F-18 fighter jets. Although this sale is undeniably 

important, Boeing sees the synergies in partnering with 

Embraer to jointly contest new markets. The partnership goes two ways. Embraer brings capabilities in the 

medium-lift market where Boeing aspires to remain a 

supplier to the Brazilian firm. This Sao Jose dos Campos 

company in turn has a long history of integrating systems into Boeing planes.

In addition to large-scale aerospace production, 

there may also be space for cooperation in unmanned 

aerial vehicles (UAVs). This area of technology is particularly important to the Brazilians in their objectives 

of monitoring and controlling the Amazon, natural disasters, and as security measures in large urban spaces. 

The World Cup and the Olympics heighten this need 

for eyes in the skies. Beyond industrial partnerships, the 

opportunity here is to partner with Brazil on developing international norms for the use of UAVs. This debate, tied to armed drones, has escalated in the United 

States. President Barack Obama has recently articulated guidelines for oversight of U.S. use.58 Brazil’s diversified international relationships and its reputation for 

shared interests create openings as 

U.S. and Brazilian firms hold a wide 

array of win-win opportunities 
12 SF No. 284 inss.dodlive.mil

reaching cooperative solutions position it well to promote dialogue on establishing ethical use parameters 

for UAVs. Doing this in partnership with the United 

States would send a strong signal about new geometries 

of global power.

The Defense Trilemma: 

Ameliorating Acute Tradeoffs

To promote sustainability, relieving tension on 

the economic lever pushes the country toward the 

global value chain. With responsible defense spending, tradeoffs in defense modernization have been 

made less painful through a reconceptualization of 

Brazilian autonomy as a globally diversified endeavor 

paired with expanding production in a newly defined 

geo-economic landscape. The overarching Brazilian 

foreign policy of achieving autonomy through divergent participation has been reinforced by a set of 

agreements between Brazil and technological partners 

in defense production.

To rephrase an advertising media campaign for 

Oldsmobile, this is not your father’s defense industry. 

Although promotion of the defense industry is part of 

Brazil’s strategic focus, its implementation is far more 

nuanced in its integration into the broader Brazilian 

industrial landscape as well as its appreciation for the 

global defense value chain. New Brazilian missions are 

grounded on the precept that national defense and security activities are highly interrelated, and involve the 

economy, politics, environment, national productive potential, science, and technology. Brazilian policymakers 

anticipate that the investments made with global partners in support of military autonomy may have positive 

spinoffs for the domestic economy.

Acquisition programs are more thoroughly integrated into a redeployment of defense assets to enhance 

homeland security and to protect Brazil’s exclusive economic zone and petroleum assets. This requires investment in systems of surveillance and control with stronger 

connections to civilian technologies. The needs of Brazilian defense may drive greater expression for innovation 

in both defense and civilian systems.

We also see an institutional deepening in the design 

of the defense policy. As shown in table 3, programs are 

far more articulated in concert with civil society, putting the armed forces in dialogue with congress, the 

executive branch, industry, and the university system. 

President Rousseff ’s approach connects the promotion 

of the defense sector to a broader strategy of incentives 

toward the technology sector. Expanding links into 

Year Policy

2005 Ministry of Defense created the military commission defense industry, a permanent space of dialogue 

between the government and defense industry.

2005 National Defense Industry Policy addressed the importance of industry revitalization and established 

guidelines to encourage the industry.

2008 Production Development Policy considered the defense industrial complex as one of the Mobilization 

Programs in Strategic Areas.

2008 National Defense Strategy established a revitalized military industry as one of three structural axes for the 

defense of the country (the other two are restructuring armed forces and policy of effective composition).

2011 Integrated the defense industry into “Brazil Maior,” the plan for national investment and growth. Provisional Measure 544 gave incentives to companies for national defense production.

2012 Provisional measure converted into Law 12 598, Act of Industrial Incentives and Protection for National 

Defense Production. This establishes norms for purchasing, contracting, and developing defense systems. 

It created the category “EED,” the strategic defense firm to permit special tax status.

Table 3. Civil Society and Defense Policy

Source: Flávia de Holanda Schmidt, Rodrigo Fracalossi de Moraes, and Lucas Rocha Soares de Assis, “A Dinâmica Recente Do Setor De Defesa 

No Brasil,” IPEA RADAR: Tecnologia, produção e comércio exterior, no. 19 (April 2012).
inss.dodlive.mil SF No. 284 13 

university programs is investing in future capacity to 

manage defense systems.59

Although the policy mix to deepen defense production in Brazil is significantly different from attempts 30 

years ago, tradeoffs must still be considered. Integration 

into the global value chain comes at a cost to a nationalist’s view of maximizing autonomy. The ability to integrate deeply into the value chain is itself compromised by 

decisions made in Western Europe and North America 

to limit the acquisition of sophisticated systems by the 

global south. Such export control restrictions act as a 

barrier to partnerships within the defense value chain.60

Nonetheless, as Brazil builds confidence among central 

players that it is a responsible participant in the international system, these barriers may erode. Regional alliances such as UNASUR that encourage transparency and 

cooperation may be useful in minimizing mistrust with 

North Atlantic Treaty Organization (NATO) countries 

worried about secret deals between Brazil and countries 

such as Iraq or Libya.

Brazil may decrease tensions in integrating into the 

global value chain by defining a clear specialization in 

defense production. Defense production’s unique characteristics of high research and development requirements paired with a small number of potential buyers 

help those with niche markets succeed. Replicating 

what NATO countries already offer is a risky strategy. 

As demonstrated, we need to innovate either in lowering 

production costs or by offering new products, moving the 

product higher on our grid of innovation processes. This 

premium on specialization will increase as North American and European defense producers feel the pinch of 

further budget cuts. We should expect a scramble to protect jobs in each country. Unless a country is willing to 

pour more resources into the defense sector, the survivors 

of the global contraction in military production will be 

those best able to offer premium products at low costs.

Brazil enjoys a certain advantage in such frugal innovation. Indeed, the success of Embraer has been predicated on identifying lucrative market niches in aviation. 

The risk at this stage is that promotion of incentives in 

the defense sector in Brazil will not adequately address 

the global marketability of systems. Brazilian growth is 

slowing. As the allocation of national resources has become democratized, armed forces modernization funds 

compete with needs across a wide range of sectors. Institutional ties to civil society may be used to articulate 

the case for stronger investments in national security, but 

these must contend with infrastructure and social sector 

priorities. Defense modernization may become a slower 

or less ambitious process than envisioned by policymakers. Overreaching could undermine the economic viability of the defense industrial base in Brazil. This was 

the ill-fated result of expansion in the 1980s. Integration 

into the global value chain supported by a new articulation of sovereignty through partnerships bodes well if 

the open political system can efficiently manage defense 

resources. We will see if policymakers promoting the sector have also learned to balance the constraints of the 

defense trilemma.

Notes

1 Julia E. Sweig, Global Brazil and U.S.-Brazil Relations, Task 

Force Report (Washington, DC: Council on Foreign Relations Press, 

July 2011), available at <www.cfr.org/brazil/global-brazil-us-brazilrelations/p25407>.

Acknowledgments

I gratefully acknowledge my 2012 Fulbright 

Fellowship in the University Research Institute of 

Rio de Janeiro at the Candido Mendes University, 

as well as Dr. Clóvis Brigagão and the Konrad Adenauer Stifling Foundation’s invitation to present 

the defense trilemma at the Forte de Copacabana 

Conference, September 18, 2012. I would also like 

to thank participants in various Brazilian workshops and John A. Cope and his colleagues in the 

Institute for National Strategic Studies for their 

seminar feedback. Muito obrigada!
14 SF No. 284 inss.dodlive.mil

2 Brazil has the third longest land border after China and Russia. 

See “Brazil” in Central Intelligence Agency, The World Factbook, available at <https://www.cia.gov/library/publications/the-world-factbook/

geos/br.html>.

3 See Presidência Da República, Núcleo De Assuntos Estratégicos, Projeto Brasil 3 Tempos 50 Temas E Metas Estratégicas [Project 

Brazil 3 Periods, 50 Themes and Strategic Goals] for a comprehensive 

listing. Available at <www.resdal.org/ultimos-documentos/brasilestrategia-def-06.pdf>.

4 Paulo Roberto De Almeida, “Estratégia Nacional de Defesa: 

comentários dissidents” [National Defense Strategy: Dissident Comments], Meridiano 47, no. 104 (March 2009), 5, 9.

5 We can see in Europe that its policy goal of exchange rate 

stability (fixed in the form of the euro) is won at the expense of each 

country having an independent monetary policy because it welcomes 

open capital flows. China also prioritizes a steady exchange rate and 

monetary independence; it has therefore restricted the free mobility 

of capital. In the United States, open capital markets and a desire for 

national monetary levers to fight inflation and unemployment mean 

that the exchange rate has been left to float, in practice.

6 See “Europe and the impact of austerity on military expenditure,” SIPRI Yearbook 2012 (Oxford: Oxford University Press, 

2012). An example of cooperative development is the unmanned 

aerial vehicle.

7 Tullo Vigevani and Gabriel Cepaluni, Brazilian Foreign Policy 

in Changing Times: The Quest for Autonomy from Sarney to Lula, trans. 

Leandro Moura (Lanham, MD: Lexington Books, 2009).

8 Almeida.

9 Vigevani and Cepaluni.

10 Paulo Roberto Laraburu Nascimento, “A Inserção Internacional do Brasil e os Novos Desafios à Política de Defesa Nacional” 

[Brazil’s International Insertion and New Threats to National Defense 

Policy], available at <www.eceme.ensino.eb.br/meiramattos/index.

php/RMM/article/view/37/62>.

11 Antonio F. Azeredo da Silveira, lecture, March 4, 1975, quoted 

in Hal Brands, Dilemmas of Brazilian Grand Strategy (Carlisle Barracks, PA: Strategic Studies Institute, 2010), 6.

12 Peter Dauvergne and Déborah B.L. Farias, “The Rise of Brazil 

as a Global Development Power,” Third World Quarterly 33, no. 5 

(2012), 903–917.

13 Nascimento.

14 Vigevani and Cepaluni.

15 Rafael Antonio Duarte Villa and Manuela Trindade Viana, 

“Questões de segurança no governo Lula: da perspectiva reativa para 

a afirmativa” [Questions of Security in Lula’s Government: From 

a Reactive to Affirmative Perspective], Revista Brasileira de Política 

Internacional 53 (2010 special ed.), 91–114.

16 Ibid.

17 Vigevani and Cepaluni.

18 Brands, 604–606, 616–618.

19 Roberto Russell and Juan Gabriel Tokatlian, “From antagonistic autonomy to relational autonomy,” Latin American Politics and 

Society 45, no. 1 (2003), 1–24, quoted in Vigevani and Cepaluni.

20 Ibid.

21 See Luigi R. Einaudi, Brazil and the United States: The Need for 

Strategic Engagement, Strategic Forum 266 (Washington, DC: NDU 

Press, 2011).

22 Sean W. Burges, “Consensual Hegemony: Theorizing Brazilian 

Foreign Policy after the Cold War,” International Relations 22, no. 1 

(March 2008), 65–84.

23 Dauvergne and Farias.

24 Vigevani and Cepaluni discuss Mercosur in depth, suggesting 

that institutionalizing Brazil’s regional integration would detract from 

its ability to be a global trader.

25 Juliana Bertazzo, “Brazilian Security and Defence Policy under 

President Dilma Rousseff: Transition and Initial Challenges,” Critical 

Sociology 38, no. 6 (November 2012), 809–821.

26 Marco César de Moraes, “A Estratégia Nacional De Defesa E 

O Orçamento Da União” [National Defense Strategy and the National Budget], 2010, available at <www.eceme.ensino.eb.br>.

27 João Fábio Bertonha, “Brazil: an emerging military power? 

The problem of the use of force in Brazilian international relations,” 

Revista Brasileira de Política Internacional 53, no. 2 (2010), 107–124.

28 Villa and Viana.

29 João Fábio Bertonha, “Uma política de defesa nacional” [A National Defense Policy], Meridiano 47, no. 103 (February 2009), 24, 28.

30 Organisation for Economic Co-operation and Development 

(OECD), “Executive Summary,” in OECD Science, Technology and 

Industry Scoreboard 2011: Innovation and Growth in Knowledge Economies (Paris: OECD, 2011).

31 Vandana Chandra et al., eds., Innovation and Growth: Chasing 

a Moving Frontier (Paris: OECD and World Bank, 2009).

32 The author thanks Professor Eduardo Siqueira Brick, researcher 

in the Nucleus of Strategic Studies at Universidade Federal Fluminense, 

for emphasizing this point in a workshop, November 2012.

33 See “Firms collaborating on innovation activities with suppliers 

and clients, by firm size, 2006-08 as a percentage of innovative firms,” in 

OECD Science, Technology and Industry Scoreboard 2011, 104.

34 José Carlos Albano do Amarante, “A base industrial de defesa 

brasileira” [The Industrial Base of Brazilian Defense], Institute of 

Applied Economic Research Working Paper 1758, 2012.

35 C.K. Prahalad and R.A. Mashelkar, “Innovation’s Holy Grail,” 

Harvard Business Review 88, no. 7 ( July–August 2010), 132–144.

36 The author thanks General José Carlos Amarante for pointing 

out this distinction.

The Center for Strategic Research within the Institute for 

National Strategic Studies provides advice to the Secretary of Defense, Chairman of the Joint Chiefs of Staff, and 

unified combatant commands through studies, reports, 

briefings, and memoranda. The center conducts directed 

research and analysis in the areas of strategic and regional studies and engages in independent and leading-edge 

research and analysis in related areas.

The Strategic Forum series presents original research 

by members of NDU as well as other scholars and 

specialists in national security affairs from the United 

States and abroad. The opinions, conclusions, and recommendations expressed or implied within are those of the 

contributors and do not necessarily reflect the views of the 

Defense Department or any other agency of the Federal 

Government. Visit NDU Press online at www.ndu.edu/press.

Nicholas Rostow

Director

Center for Strategic Research

William T. Eliason

Director

NDU Press

Institute for National Strategic Studies

R.D. Hooker, Jr.

Director for Research

and Strategic Support
inss.dodlive.mil SF No. 284 15 

37 “Brazilian Army Orders Guarani APCs from Iveco,” ArmyTechnology.com, August 13, 2012, available at <www.army-technology.

com/news/newsbrazilian-army-orders-guarani-apcs-from-iveco>. 

Also, Gabriela Lobo, interview by author, LAAD Defense and Security trade show, Riocentro, Brazil, April 10, 2013.

38 Projecto Estratégico Guarani—Um Ponto de Inflexão [Guarnai 

Strategic Project—A Point of Inflection], Defesanet.com, September 

21, 2012.

39 General (ret.) Alberto Marcelo Ferraz Santana, interview by 

author, LAAD Defense and Security trade show, Riocentro, Brazil, 

April 9, 2013.

40 “Embraer Taps Northrop Grumman for KC-390 Navy System,” Airline Industry Information, September 12, 2012, available at 

<www.highbeam.com/doc/1G1-302181825.html>.

41 Lobo, interview by author.

42 “Embraer goes on defensive; Brazil’s Aerospace Champion Has 

Global Ambition in the Military, Security and Space Arena,” Flight 

International, September 4, 2012, available at <www.pdfmagazines.org/

magazines/25146-flight-international-4-10-september-2012.html>.

43 Patrizia Xavier, senior manager for institutional relations at 

Embraer, discussion with author, LAAD Defense and Security trade 

show, Riocentro, Brazil, April 10, 2013.

44 Luiz Carlos Aguiar, Brazil Summit, New York City, April 21, 

2013.

45 Ibid.

46 Xavier, discussion.

47 Max G. Manwaring and Andrew Fishman, Brazil’s Security 

Strategy and Defense Doctrine, Colloquium Brief (Carlisle Barracks, PA: 

Strategic Studies Institute, 2011), available at <www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=1049>.

48 “Essas medidas legislativas são importantes, não só porque a 

defesa é um estímulo importante para a indústria em qualquer país 

do mundo, mas também porque é preciso ter um grau razoável de 

autonomia tecnológica e industrial para garantirmos a defesa. Interessa 

ao governo promover os dois lados—disse o ministro” [These legislative measures are important, not only because defense is an important 

industrial stimulus in every part of the world but also because one must 

have a reasonable degree of technological and industrial autonomy to 

guarantee defense. It is in the interest of the government to promote 

both sides, said the Minister.] Eliane Oliveira and Danilo Fariello, O 

Globo, February 17, 2013, accessed at <defesanet.com.br>.

49 See Patrice Franko ( Jones), The Brazilian Defense Industry

(Boulder, CO: Westview Press, 1992).

50 For a discussion of Brazilian interest rates, see Alex SeguraUbiergo, “The Puzzle of Brazil’s High Interest Rates,” International 

Monetary Fund Working Paper (WP/12/62), February 2012, available 

at <www.imf.org/external/pubs/ft/wp/2012/wp1262.pdf>.

51 Thomas Scheetz “El impacto de la crisis financiera en el gasto 

militar sudamericano,” Tecnología militar, Año 34, No. Extra 5, 2012 

(Ejemplar dedicado a: LADA: Latin American Defence Almanac 

2012/2013), 8–10 (The impact of the financial crisis on South American Military Spending, Military Technology 34, no. 5 [2012], special 

issue dedicated to the South American defense almanac).

52 SIPRI Yearbook 2012.

53 Measured in constant dollars by SIPRI.

54 “Orçamento da Defesa no Brasil deveria ser igual ao dos Brics, 

diz ministro” [The Brazilian Defense Budget Must Be the Same as the 

BRICS, says the Minister], April 26, 2012, available at <www.brasil.

gov.br/noticias/arquivos/2012/04/26/orcamento-da-defesa-no-brasildeveria-ser-igual-ao-dos-brics-diz-ministro>.

55 See E. Richard Downes, Trust, Engagement, and Technology 

Transfer, Strategic Forum 279 (Washington, DC: NDU Press, August 

2012).

56 Frank O. Mora and Nicholas F. Zimmerman, “The Top Seven 

Myths of U.S. Defense Policy Toward the Americas,” Military Review, 

October 2010.

57 Einaudi.

58 “Obama’s Speech on Drone Policy,” The New York Times, May 

23, 2013.

59 David C. Mowery, “The Need for a New Generation of Policy 

Instruments to Respond to the Grand Challenge,” Research Policy 41, 

no. 10 (December 2012), 1703–1715.

60 Discussed by Waldimir Pirró e Longo, “Indústria de Defesa: 

Pesquisa, Desenvolvimento Experimental e Engenharia” [The Defense 

Industry: Research, Experimental Development and Engineering],

Revista da Escola Superior de Guerra 25, no. 52 (2011), 7–37.
16 SF No. 284 inss.dodlive.mil

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