Colombia, Argentina drive unprecedented Latin America arms spending
Outgoing Colombian President Gustavo Petro has unveiled a $12 billion military procurement package—the largest in Latin American history—while Argentina locks in a $398.7 million missile deal, signaling a major regional shift toward rearmament and non-US defense suppliers.
Outgoing Colombian President Gustavo Petro has proposed a $12 billion military modernisation package just weeks before leaving office on August 7. The plan encompasses 80 new aircraft, 46 helicopters, 94 vessels, 127 armoured vehicles, and a national anti-drone shield. The centrepiece is a $4.3 billion contract for 17 Swedish Gripen fighter jets from Saab.
The Colombian programme mandates that foreign suppliers reinvest at least 10% of contract values into the domestic defence industry. State arms manufacturer Indumil is slated to produce 111,000 rifles locally, while the armoured vehicles are also intended for domestic assembly. This offset structure aims to build a local industrial base rather than simply importing finished hardware.
Binding a successor to a roughly 47 trillion peso commitment two months before an inauguration carries significant fiscal and political risk. While the Gripen deal appears secured after years of negotiations, the broader package could face scrutiny or cancellation under the next administration. Petro framed the urgency around safety, stating: “We don’t want more young people dying because of the age of the equipment they use.”
Argentina is simultaneously advancing its capabilities through a $398.7 million contract with Raytheon. Signed by the US Defense Department, the deal covers 36 long-range air-to-air missiles to be built at Raytheon’s plant in Tucson, Arizona, through December 2027. This forms part of a broader $941 million weapons package approved in December 2024 for Argentina's incoming F-16 fleet.
With a range exceeding 160 kilometres, these missiles allow pilots to fire before an enemy aircraft is visible, ending decades of capability gaps for Buenos Aires. The hardware is backed by new industrial policy: Argentina recently issued a tender for heavy radar-carrying trucks, and its state arms-maker is searching for a strategic partner to modernise its factories.
Shifting alliances
These procurements are already altering the competitive landscape for global defence contractors. Colombia's choice of the Swedish Gripen aligns its air force directly with Brazil's, creating a unified South American market for Saab at the expense of US manufacturers. The interoperability of these jets is currently being tested in Exercise Salitre, a major multinational air drill running in Chile's Atacama Desert through mid-July.
Chile is also signalling future demand, noting that Washington places “no restrictions” on it purchasing the stealth F-35. Furthermore, defence ministers gathering in Cusco, Peru, this week are discussing a shared regional naval force to combat drug trafficking. For aerospace and defence contractors, Latin America is rapidly transitioning from a peripheral market to a primary growth vector, provided political transitions do not derail the commitments.
