MercoPress. South Atlantic News Agency

Brazil's Silva Delays Air Force Upgrade

Brazil's new leftist president has delayed a plan to spend $700 million on jet fighters to upgrade the air force after vowing at his inauguration to feed the country's millions of hungry citizens.

Defense Minister Jose Viegas said Friday no decision would be made for a year but insisted the plan would not be abandoned and could be revived in 2004.

"Funding social projects is more important in Brazil right now," Viegas said. "But this doesn't mean that the purchase will be abandoned."

The plan, which would have funded the purchase of 12 to 18 new jet fighters, is part of a larger $3.4 billion planned overhaul of the air defences of Latin America's largest country.

It would have been the largest purchase of jet fighters by any Latin American country in two decades. Chile signed a deal a year ago to buy 10 Lockheed Martin Corp. F-16s for $600 million. Brazil's purchase was aimed at shoring up surveillance of Brazil's vast and porous Amazonian border to prevent incursions by Colombian rebels and the smuggling of drugs, weapons and lumber.

Most of Brazil's 60 fighter jets were purchased in the 1970s and are outdated compared with the air forces of Brazil's neighbours, said John Shields, an expert on South American defence and political issues.

"It's a strategic hole," said Shields, the editor of Jane's Sentinel South America in London.

The government has not set aside money for the contract, but lawmakers authorized the deal under the condition the contractor provide financing and transfer technology to the air force.

The military's $7.4 billion budget is scheduled to be cut by $282 million this year. A budget crunch last year forced the army to discharge 45,000 soldiers four months early because there wasn't enough money feed and clothe them.

Despite budget pressures, Silva announced plans before his inauguration Wednesday to revive a nuclear submarine project to patrol Brazil's 5,000-mile Atlantic coastline.

Bidding for the jet fighter contract were the British-Swedish consortium of BAE Systems and Saab; the French-Brazilian consortium of Dassault Aviation and Embraer; Lockheed Martin; and the Russian-Brazilian consortium of Sukhoi and Avibras Aeroespacial.