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Defense Expenditures

Data on Brazil's military expenditures need to be approached with caution. Their accuracy is complicated by high rates of inflation since the late 1950s, by secrecy surrounding the funding of various military-related projects, by personnel costs that are sometimes hidden in other budgets, and by the common practice of mixing the accounts of the national treasury, the Central Bank, and the Bank of Brazil (Banco do Brasil--BB). However, even if the figures generally attributed to Brazilian defense expenditures understate their true value, there is consensus that Brazil is among the countries with the lowest levels of military expenditures, and that those levels have declined in the last three decades. For example, the rate of military expenditures in relation to GDP has dropped steadily: in the 1960s, it averaged 2 percent; in the 1970s, 1.5 percent; in the 1980s, 1 percent; and in the early 1990s, less than 0.5 percent. In 1993 that rate reached a mere 0.3 percent. Brazil in 1993 ranked 133d out of 166 countries in military expenditures as a share of government expenditures. Within South America, only Guyana and Suriname ranked lower.

Political scientist Paulo S. Wrobel notes that these data point to a correlation between the type of government (military or civilian) and military expenditures. That correlation is made even clearer if one examines military expenditures as a share of the federal budget: in 1970 that figure was 20 percent; in 1993 it was only 1.3 percent (see table 28, Appendix). The 1993 figure was the lowest since independence in 1822. The highest figure was in 1864 and 1865, at the early stages of the Paraguayan War, when defense expenditures accounted for 49.6 percent of all government expenditures.

Brazil's low level of military expenditures can be attributed to the perception that the country has few external threats and to Brazil's large size in relation to its neighbors. In terms of threats, the deepening integration process with Argentina since the early 1980s virtually has removed the only potential external threat to Brazil.

Despite its low rate of military expenditures, in absolute terms Brazil is by far the largest military power in Latin America. In 1993 it ranked nineteenth among 166 countries in total military expenditures; the next highest in Latin America was Argentina, which ranked twenty-fourth. From 1988 through 1993, Brazil's military expenditures totaled US$43.12 billion (in constant 1993 dollars; an average of US$7.19 billion per year). They totaled US$10.6 billion in 1996. The defense budget in 1997 totaled US$12 billion.

The armed forces have had some minor triumphs on budget issues. In early 1994, the Franco administration announced that it would cut US$22 billion in the federal budget, dividing the cuts equally across ministries. The military ministers reacted quickly, going directly to the president to criticize the proposed reductions. They succeeded in lowering the proposed military cuts by at least US$300 million.

In late 1993 and early 1994, the armed forces were more vocal in their criticism of the low levels of military expenditures. They pointed out, for example, that the air force work week began on Monday afternoon, after lunch, and ended at Friday noon, before lunch, in order to save on the cost of feeding the officers and troops.

Military salaries were raised substantially in mid-1991 and in April 1992. According to one report, before the second raise, a four-star general with forty years in the service was earning about US$1,700 a month, and many soldiers earned only a few hundred dollars a month. In contrast, a congressional deputy earned more than US$6,000 a month.

The armed forces have been trying to protect their priority projects: the army--Calha Norte and the "defense" of the Amazon; the navy--its nuclear-powered submarine; the air force--its AMX subsonic fighter. Each project has had special funding from the federal government, aside from the general military budget. Additional funding has sometimes been available through various government agencies.

In essence, the armed forces are being squeezed in an unintended fashion by a neoliberal economic model that stresses cuts in government expenditures and privatizations. Not only has their budget been cut, but they no longer have the ready-made sinecure of state enterprises in which to work at the time of retirement. Indeed, under the military regime, state enterprises became bloated with retired military officers. A 1983 study by political scientist Walder de Ges identified more than 8,000 retired officers who were in positions within the state enterprises and federal bureaucracy.

What the defense spending levels suggest is that the military is having to compete with virtually every civilian ministry and, in many cases, is coming up short. Moreover, even though the military is still the most influential player on some issues, the number of civilian actors involved in the decision-making process has increased. In many cases, the military has been displaced by civilians. The Ministry of Finance has become the dominant actor on budget issues. Although the armed forces can try to appeal directly to the president, such an approach is not guaranteed to succeed. Also, the armed forces must deal directly with a Congress responsible for approving the budget.

Organization of the Armed Forces

Data as of April 1997

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