Venezuela slashes military spending by 34%, but deep cuts are unlikely to spark revolt among top brass

Venezuela last year slashed its defense budget by 34 percent, marking the largest decline in military spending in all of Latin America. But the dramatic cut in a country with a history of military coups is unlikely to generate any audible grumbles among the army ranks because the top brass are too bought into the socialist country’s system to contemplate a change in government, analysts say.

The cash-strapped Venezuelan government’s budget cut, documented this week in a report by the Stockholm International Peace Research Institute (SIPRI), could be a symptom of currency devaluation.

But the drastic fall in defense spending could also be a sign that Venezuela’s weapons purchases are slowing, the Swedish think tank says.

“Venezuela was South America’s largest arms importer from 2009- 2013,” said Sam Perlo-Freeman, one of the authors of SIPRI’s global military spending report. “But most of the deliveries happened in the early part of that period.”

Venezuela started to ramp up its weapons purchases in 2006, when it signed a $3 billion deal with Russia to buy 24 Sukhoi S-30 fighter jets, a new fleet of helicopters and 100,000 AK-47 machine guns.


A Sukhoi fighter jet patrols the skies above Caracas [AFP/Getty images]

Subsequent deals worth more than $2 billion included the purchase of Russian surface-to-air missiles and tanks, with Venezuela also spending an extra $300 million on Chinese military equipment.

Last year however, the Venezuelan government set aside just $2.9 billion for military expenditures, down from $4.4 billion spent the previous year, according to the SIPRI report.

The budget cut comes as the country struggles to make ends meet amid plummeting oil prices.

About 46 percent of the Venezuelan government’s budget comes from oil revenue. And with the price of oil now hovering at $50 per barrel — down half of where it was a year ago — the country faces a $30 billion shortfall in government income, according to the Economist Intelligence Unit.

David Smilde, a Venezuela analyst at the Washington Office on Latin America (WOLA) think tank, said the government is making budget cutbacks “across the board.” Just last week, the Maduro government reduced the amount of U.S. dollars that Venezuelans traveling abroad are allowed to buy at a subsidized exchange rate.

Smilde noted however that significant cutbacks in military spending will not necessarily lead to a strain in the relations between the military brass and the Maduro administration. That’s because Venezuela’s armed forces have too much to lose from a potential change of government.

“The military has been coddled by Maduro since he came into office, in the sense that he’s given them more and more space in the government,” Smilde said. “A lot of military people are involved in licit [government] business and illicit businesses …they have TV stations, they have all kinds of stuff.”

According to Venezuelan newspaper El Nacional, Maduro has appointed more than 300 military officers to government political posts since he succeeded Hugo Chávez in 2013.

Last year, the Venezuelan president even appointed an active army general as his minister of finance.

Smilde said the military’s involvement in Maduro’s administration and role in government-run businesses makes it highly unlikely they will rebel over a 30 percent budget cut.

“I think they’re quite happy with Maduro,” Smilde said.

Last year’s cut doesn’t necessarily mean that Venezuela’s military spending will continue to fall in the coming years.

Roberto Cajina, a regional security analyst at the REDSAL think tank, says that Venezuela’s military spending is “erratic.” It fell under the $2.6 billion mark in 2010 and 2011, but bounced back to $4 billion in 2012 and 2013, before making a big drop in 2014, as this graph shows:

In most years, Venezuela’s military budget is just a third of Colombia’s, a neighboring country fighting guerrilla insurgents. But Venezuela’s defense budget is generally larger than that of Peru, a country with more territory and a similar population.

Maduro has publicly promised his soldiers he will keep up the pace of military spending, even if there has been a temporary shortfall in Venezuela’s military budget.

“We are going to maintain the depth and rhythm of investment in the defense of our sovereignty,” Maduro said during a military parade in November.

“The best response to the obstacles facing us, is unity in our work, in our struggle, in our sacrifice,” the beleaguered president said.