ARGENTINA: DEFENSE INDUSTRIES IN TRANSITION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00447R000100160001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 27, 2016
• Document Release Date: November 4, 2010
• Sequence Number: 1
• Publication Date: August 1, 1985
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Directorate of --Stftret?
Intelligence
Argentina: Defense Industries
in Transition
A Research Paper
--Strcret--
A LA 85-10085
August 1985
copy 223
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Directorate of Secret
Intelligence
Argentina: Defense Industries
in Transition
A Research Paper
This paper was prepared by
Office of African and Latin American Analysis. It
was coordinated with the Directorate of
Operations.
Comments and queries are welcome and may be
directed to the Chief South America Division, ALA,
Secret
ALA 85-10085
August 1985
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6 - ?
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Key Judgments
Information available
as of 7 August 1985
was used in this report.
Argentina: Defense Industries
in Transition
President Alfonsin's civilian government came to power in December 1983,
prepared to face the country's economic crisis, and determined to rein in
military spending as part of its austerity program. In addition to sharply
cutting the defense budget, Alfonsin's government has reordered the
priorities of the military industries, subordinating the requirements of
Argentina's armed forces to the need for an increase in revenue-generating
exports. The government has pushed efforts to restructure the industries
into more efficient and tightly managed units, manufacture new and more
exportable products through coproduction programs, and improve foreign
marketing techniques.
In pushing these changes, the new regime has been trying to adjust for the
excesses of the past. The military regimes that governed the country for
most of the period between 1966 and 1983, for example, attached high
priority to the development of defense industries and afforded them
virtually unlimited funding. As a result, by the early 1980s, Argentina's
arms industries had become second in output only to Brazil's in Latin
America. They now produce a wide range of military equipment, including
ground force materiel, naval weaponry, and aircraft, and are developing
ballistic missiles and nuclear-powered submarines. At the same time,
however, the protection from foreign competition that military regimes
afforded the defense industries led to widespread inefficiencies, which,
along with the uneconomically short production runs, resulted in costly
weapon systems. Heavy government expenditures in equipping the military
and in modernizing the defense industries played a part in bringing on the
economic crisis now facing the country.
The Argentines' reaction to Alfonsin's efforts to reorganize and reorient
the defense industries have been mixed. The armed forces are resentful of
the government's attempts to dilute military control over the industries,
and they have voiced their opposition by categorizing the reduced budget
as a threat to national security. The President's own party supports the
program and views the potential revenue from increased exports as a
partial solution to the country's financial crisis. The Peronists and Peronist-
led labor are opposed to some aspects of Alfonsin's plan, particularly the
rise in unemployment they believe will result from reduced government
investment in the industries. The private sector is generally supportive,
believing that Alfonsin's policies will generate exports and an influx of new
technology. In our view, the critics are too divided and weak at this point to
challenge the President's plan.
111
Secret
ALA 85-10085
August 1985
- Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Argentina will face severe difficulties as it tries to enter an international
arms market already glutted with weapon systems designed to attract
Third World buyers. Other producers, such as Brazil, have more estab-
lished reputations and less expensive products. In addition, the Western
technology on which the Argentine arms industry heavily depends is often
accompanied by restrictions on exports to other countries. Finally, some
officials in Buenos Aires oppose arms sales to such financially sound but
politically controversial buyers as Iran, Iraq, and Libya.
Argentina's pressing need for new sources of revenue is likely to lead to in-
tensified efforts to find foreign buyers, however, and may well override
resistance within the government to major military sales that have been
under discussion with Iraq and Iran. US efforts to halt such sales would
probably be countered by Argentine requests for help in closing compara-
ble deals with more acceptable buyers.
The Argentines are likely to continue to look primarily to European?
especially West German?companies for technology. Although the United
States has not been a major partner to date, Argentina may, in its drive to
produce more exportable weapons, also begin turning to US firms for joint
and licensed production arrangements. It may even begin to link such
support to its repayment of its debt to US lenders.
Soviet offers of military equipment have so far met with resistance from
Alfonsin's government as well as the military, in large measure because of
Argentina's longstanding suspicions of Soviet motives. While we do not
expect such attitudes to change, Buenos Aires may point to Moscow's
offers in an attempt to put pressure on the United States to release
technology and support export sales efforts.
Secret iv
- - Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Ilil III
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Contents
Page
Key Judgments
Introduction
1
Evolution of Argentine Weapons Production
1
Origins of Arms Industries
1
The Late 1960s and Early 1970s: "Plan Europa"
1
Modernization in the Late 1970s and Early 1980s
4
Changes Under Civilian Government
4
Budget Cuts
4
Proposed Reorganization
6
Changes in Export Strategy
8
Domestic Attitudes Toward Change
10
Outlook
10
Implications for the United States
12
Appendix
Major Weapon Systems
13
Secret
? Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Figure 1
Military Manufacturing Facilities
South
Pacific
Ocean
Valparaiso
SAN AGO*
Chile
Antofagast
Bolivia
JUJUY
PROVINCIA
r- ?-
.SanSalvador
Jujuy
- I SANTA FE
1 6
t.T. PROVINCIA
1, ' ,
- .-\ ,1"?-." - N 2
c
SAN JUAN\ 1
PROVINCIA s,
, Cordoba / e'-?
San Juan
...,- ....--.,
. ?'i /-2),
k Fe
L ilT-137-i4 Santa
'1 CORDOBA ,
; PROVINCIA II
I
. ? ./-",.
Para
Corriente
?San Carlos
de Bariloche
Rio
0
Rosario
5, 3
BUENOS AIRES
I 11, 12, 10, 17, 10
1, 3, 4, 7, 0, 10, /
Argentina La Plata
10
I BUENOS AIRES
PROVINCIA
c I Bahia
Rio
Blanca
Ne r.
?811111c;.,
Campo ?Campo
Grande
ay
ASUNCION
Uruguay
MONTEVIDEO
Mar del Plata
Brazil
South
Atlantic
Ocean
ARMY
1 Military Factories (FM)
2 Altos Hornos
3 Banfield Arms Plant Metro
4 Buenos Aires Shipyard and Artillery Plant
5 Domingo Matheu Small Arms Plant
6 Fray Luis Beltran Military Plant
7 Pescarmona Metallurgic Industries
8 Pilar Pyrotechnic Materials Plant
9 Rio Tercero Military Factory
10 San Martin Armored Vehicle and
Telecommunications Equipment Plant
11 TAMSE/Boulogne Tank Assembly Plant
12 TENSA
13 Villa Maria Explosives and Solid Propellant Plant
AIRCRAFT
14 Military Aircraft Factory (FMA)
15 Chincul
16 RACA
NAVAL
17 Garcia Domecq Shipyards
18 Rio Santiago Shipyards (AFNE)
19 Tandanor Darsena South Shipyard
O 200 400 Kilometers
O 200 400 Miles
Boundary representation is
not necessarily authoritative
705587 (543488) 8-85
Secret
vi
-- Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
_111 1 1 1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Argentina: Defense Industries
in Transition
Introduction
Argentina's Government-owned and private arms in-
dustries expanded dramatically during the 1970s
while the country was under military rule. After
coming to power in December 1983, President Alfon-
sin's new civilian administration, faced with a broad
economic and fiscal crisis, quickly moved to slash
almost all categories of military spending, including
expenditures for developing the military industries
and purchasing their products. The government also
decided to refocus the industries' emphasis toward
production for export rather than for the Argentine
armed forces. This paper examines the evolution of
these industries and the impact of the return to
civilian rule. It also assesses prospects for the effort to
expand military exports and discusses implications for
the United States.
Evolution of Argentine Weapons Production
Argentina has a long tradition of weapons production,
and the level of development of its arms industries is
impressive by Latin American standards. Today the
country is one of the few in the Third World that
manufactures weapons in every major category, in-
cluding armored vehicles, ships, aircraft, and missiles.
Its arms production levels are second only to Brazil's
in Latin America?,
Origins of Arms Industries
Argentina was the first Latin American country to
embark on the manufacture of its own military weap-
ons, according to military historians. Small-arms fac-
tories were established as early as 1817. In 1911,
German arms specialists helped set up a factory in
Argentina for the production of Mauser rifles. Other
1
foreign experts subsequently established plants to
make Browning pistols, Colt machineguns, and Bofors
field guns.
In the 1940s, the Argentine military established an
official body, the Bureau of Military Factories
(DGFM), to oversee and coordinate the country's
arms industries. A military research organization of
scientists and engineers, the Armed Forces Scientific
and Technical Research Center (CITEFA), was set up
to assist DGFM. Military control gradually expanded
as the government nationalized various arms-
producing enterprises and placed them under the
supervision of senior military officers.
During the 1950s and 1960s, all three of the armed
services deepened their involvement in military-
industrial production. With the assistance of West
German technicians, factories run by the Air Force
began to design and manufacture aircraft. Navy
shipyards built patrol craft and frigates, and indus-
tries controlled by the Army produced various types
of heavy artillery, machineguns, and other materiel.
The Late 1960s and Early 1970s: "Plan Europa"
The next phase in the development of Argentina's
weapons-manufacturing capabilities began in 1967
when a new military government publicly launched
"Plan Europa." This plan had two goals: to reduce
Argentine dependence on US arms, temporarily em-
bargoed by Washington after the 1966 coup, and?
over the longer run?to make the country self-
sufficient in military production. The plan envisioned
coproduction of arms with West European firms?
hence the name?and was designed also to secure
systems that could not be produced domestically.
According to public statements at the time, the
Secret
--- Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Brazil's Arms Industry:
Latin American Success Story
The Brazilian arms industry is the most successful in
Latin America. Brazil began exporting weapons in
1975. By the early 1980s, it was among the world's
10 leading arms-exporting nations in volume of trade.
Brazil's weapons industry has placed heavy emphasis
on export sales. According to trade journals, 95
percent of all arms produced in Brazil are slated for
export. Foreign customer requirements are consid-
ered before those of the Brazilian forces. In many
cases, a Brazilian weapons system is on the interna-
tional market for several years before it is made
available to the domestic forces.
According to US Embassy and defense attache re-
porting, Brazilian Government and arms industry
officials realized early in the industry's development
that the country's domestic military requirements
were not large enough to allow cost-efficient produc-
tion runs. This awareness led them to consider the
marketability of each weapons system before produc-
tion began. Preproduction consideration of customer
needs helped Brazil avoid manufacturing arms that
could not be successfully exported
The larger production runs resulting from an empha-
sis on exports have held down unit costs, a primary
concern of Third World customers. Most weapon
systems, moreover, are offered in basic configura-
tions, but with a wide range of options, making it
possible to tailor the price tag to the buyer.
In addition, Brazil's comparatively simple designs
are geared to the needs of low-technology countries.
Brazilian weapon systems can withstand extreme
climates and harsh terrains. Maintenance time and
maintenance costs are low.
The growth of Brazil's arms industry was nurtured
and orchestrated by the military governments that
ruled the country until March 1985. Federal agencies
were instrumental in seeking out Western firms to
build factories or to license the production of arms in
Brazil. The agencies also assisted and coordinated
negotiations for foreign sales. The government ap-
pears to be continuing to perform these functions
under civilian rule.
government also expected these programs to bring
other important benefits as well: training for industry
personnel, an influx of foreign capital, and the en-
hancement of Argentine prestige and influence in the
Third World.
During the first few years of Plan Europa, Argentina
launched programs for the coproduction of relatively
low-technology items that would provide the training
and experience needed by industry personnel. It began
local assembly of French AMX-13 light tanks, Swiss
Mowag armored personnel carriers, and Italian 105-
mm howitzers. According to defense industry jour-
nals, the coproduction agreements typically called for
a prototype to be built by the foreign licensing
company in its own factories, with the remainder of
the series manufactured in Argentina under the tech-
nical supervision of the licensor. The agreements
Secret
usually provided for training of Argentine personnel
and progressive integration of Argentine-produced
components into the product.
As they entered the 1970s, the Argentines focused on
expanding their technical capabilities through the
training of research and production personnel. The
military government initiated a large-scale program
to develop a pool of engineers, designers, managers,
and skilled workers. Trade journals indicate that this
program was successful in providing the defense
industries with a technically sophisticated work force.
2
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
-- Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6 -
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Modernization in the Late 1970s and Early 1980s
Buenos Aires responded to the US embargo in 1978,
on human rights grounds, of military sales to Argenti-
na by pressing West European firms for coproduction
of more sophisticated weapon systems. In the late
1970s, it signed major coproduction agreements with
West German and other companies for a range of
relatively advanced weapon systems, including the
TR-1700 submarine, the IA-63 jet trainer, and the
Argentine Medium Tank (TAM) family of armored
vehicles.'
To move into production of more sophisticated weap-
ons, Argentine officials had to upgrade the country's
arms-manufacturing facilities. According to official
budget statistics, the military government allotted the
lion's share of the defense budget?then between 4
and 5 percent of the GNP?to help modernize the
facilities of all three services. Argentine armed forces
journals reported at the time that the Army pur-
chased new machinery from West Germany for the
assembly of TAM armored vehicles and 155-mm gun
barrels. The Navy and a West German company built
a major new shipyard?completed in 1982?for con-
struction of TR-1700 diesel attack submarines. A
comprehensive Air Force?run program for moderniz-
ing and upgrading military-aircraft-manufacturing
facilities also was launched with assistance from West
German firms; under this program, the Argentines
built new hangars, acquired milling machines from
West Germany, and introduced advanced technology
for the manufacture of jet aircraft, such as the use of
composite materials.
By 1983 Argentina's arms-manufacturing facilities
were producing an array of weaponry sufficient to
meet most of the requirements of the Argentine
military. Their products included armored vehicles,
artillery, ships, submarines, missiles, and military
aircraft.
Changes Under Civilian Government
The elected government that came to power in De-
cember 1983 under Alfonsin has made major modifi-
cations in Argentina's arms industry programs. These
See the appendix for more information on these and other weapon
systems that are being produced or are under development in
Argentina
Secret
Figure 2. TAM Tank Production Line. Argentina
began producing the TAM tank to meet domestic
requirements and eventually hoped to recoup
development costs through export sales. Howev-
er, no sales have been concluded thus far.
changes are part of an overall government austerity
program in which reductions in defense spending are a
feature.' In addition to cutting back funding for a
number of arms production programs, the civilian
government is reorganizing the industries to improve
coordination and efficiency, according to US defense
attache and press reporting. It is also developing new
strategies designed to increase revenue-generating
weapons exports
Budget Cuts
Argentina's financial crisis has meant a sharp cutback
in government spending, of which defense spending
typically accounted for roughly 5 percent of GNP.
4
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Figure 3. West German Milling Machinery for Gun Barrel
Production. Initial production of a I05-mm gun in Argentina was
dependent on French gun barrels. The purchase of this machinery
eliminated this dependence
5
Secret
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Alfonsin slashed the overall defense budget from a
1982 high of $4 billion to approximately $2 billion for
1984, Funding
for the arms industries was reduced along with other
categories of military spending.
the cuts have led to serious delays
in both current and planned production programs. For
example, development of new variants of the TAM
armored vehicle has been halted. In addition, the
government has cut funding for development of the
IA-63 jet trainer by more than half. The Navy's
submarine-manufacturing shipyard has also been hit
hard; work on two TR-1700 submarines, originally
scheduled for completion by 1986, is being delayed by
at least three years because of funding cuts. In
addition, labor dissatisfaction stemming from funding
cuts has led to work stoppages in a number of arms
production facilities and has complicated efforts to
attract and retain needed personnel.
Secret
We believe these trends will continue as Alfonsin
clamps down further on government spending under
the tough new economic austerity program he intro-
duced in June 1985. Although the 1
budget has not yet been announced,
the administration plans
further cuts in military spending. Press reports indi-
cate that Defense Ministry officials may be lobbying
for a separate budget allocation for the defense
industries in an attempt to insulate them from overall
military budget cuts
Proposed Reorganization
While Argentina's economic crunch severely limits
funds for the arms industries, the government is
trying to compensate by improving the industries'
6
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
V
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
efficiency. In our judgment, a fundamental weakness
long plaguing these industries has been a lack of
coordinated planning.
each service has managed the indus-
tries that produce weapon systems, meeting its own
requirements with very little interservice coordination.
The industries have paid a high cost for this lack of
cooperation. Design and production facilities run by
the different services do not share technology ob-
tained from foreign companies.
the services have turned to overseas
suppliers for technology already available in Argenti-
na. Moreover, each service has insisted on dealing
separately with equipment suppliers, resulting in low-
volume purchases with high price tags.
The civilian administration intends to correct these
organizational problems and thereby cut costs, ac-
cording to the US Embassy. A civilian-military com-
mission is studying Argentine arms production to
recommend ways to streamline the industries and
increase their cooperation. The government has pro-
posed legislation?still pending?that would place the
government-owned arms-manufacturing companies
under a single holding company. The measure would
also encourage expanded participation of the private
sector by providing for subcontracting of portions of
future coproduction programs to private Argentine
companies?thus offering such firms opportunities to
gain new sources of income and greater access to
foreign technology. Another goal of this bill would be
to provide for centralization within the Defense Min-
istry of decisionmaking regarding military weapons
and equipment purchases.
According to Argentine press reports, government
officials are drafting a second bill that would force
further industrywide cooperation by establishing a
central clearinghouse for acquisitions of advanced
technology from foreign suppliers. This legislation
would ensure that all arms production facilities are
afforded access to any technology Argentina obtains.
Although we lack details on this bill, we believe it
probably covers both government and private facilities
since one of the government's goals is to encourage
integration of the two sectors.
The Alfonsin government also appears to be attempt-
ing to dilute the military's control over arms produc-
tion by shifting overall supervision of the defense-
industrial structure from the military services to the
7
Organization of the Military Industries
Argentina's arms industries have long been dominat-
ed by the military. Under the military governments
that ruled the country for most of the last two
decades, the services ran some 80 percent of the
industry. Private-sector involvement was largely lim-
ited to the support industries.
The Army's production entity, known as Military
Factories (FM), manufactures ground force
equipment and coordinates the work of some 31
government-owned, private, and mixed public-private
companies that also produce such equipment. These
companies' products include not only finished mili-
tary goods, but also basic materials such as minerals,
steel, chemicals, and a variety of heavy industrial
and consumer goods.
The Army-run research organization?the Armed
Forces Scientific and Technical Research Center
(CITEFA)?manages the development of new weap-
ons for all branches of the armed forces. The Center's
engineers and scientists work in a broad range of
basic and applied research areas related to defense
production. These include solid-state physics, lasers,
and missile development. CITEFA personnel also
study communications systems, radars, and comput-
ers.
The Navy-run State Naval Shipyard and Naval
Factory (AFNE) is Argentina's largest shipyard. It
has built a series of West German?designed frigates
under license. This shipyard also produces merchant
marine and fishing vessels, as well as other military
equipment, components, and heavy industrial prod-
ucts. The second-largest shipyard is the three-year-
old Garcia Domecq yard?owned by the Navy (75
percent) and a West German firm (25 percent) and
devoted solely to the manufacture of submarines.
Secret
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6 -
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Table 2
Argentina: Key Imported Components
of Major Weapon Systems
Component
Supplier
civilian-run Defense Ministry. The Under Secretary
of Defense for Production has been designated to
oversee all arms research and production organiza-
tions, according to recent press reports.
Changes in Export Strategy
The third element in the government's strategy for
improving the arms industries despite necessary bud-
get cuts is to focus on production for export. Argenti-
na has been seeking foreign customers for its military
products since the late 1960s, but US Embassy and
overseas sales
have been minimal to date for a variety of reasons,
including:
? High unit production costs and consequent high
export prices.
? Argentina's difficulty in offering attractive credit
terms because of its financial difficulties.
? Export restrictions set by governments of coproduc-
ing countries.
Secret
Foreign Sales Authorization
Prospective foreign military sales are reviewed on a
case-by-case basis at various levels of the Argentine
Government, according to US Embassy and press
reporting. Initial authorization is usually made by
the director of the branch of the arms industry that is
seeking to generate the sale. For example, the direc-
tor of Military Factories (FM) must approve all
exports of ground forces materiel.
The next level of approval is the Policy Coordinating
Committee for Military Materiel Exports. This re-
cently established, interministerial agency operates
within the Ministry of Defense and is made up of
under secretaries from the Ministries of Defense,
Economics, and Foreign Relations. The Committee is
charged with authorizing all export negotiations in-
volving Argentine arms manufacturers in the public
or the private sectors.
The Ministers of Defense and Foreign Affairs recom-
mend denial or approval of arms sales, but the final
decision is made by the President. According to press
reports, weapons exports that would require changes
in existing government policies?such as sales to
countries at war?must also be approved by the
Congress.
? Opposition by some Argentine officials?most re-
cently, Foreign Minister Caputo?to arms sales to
potentially lucrative markets in the Middle East,
particularly Iran and Iraq
In addition, Argentine promotional efforts have long
been weak. Production of the TAM tank, for example,
was well under way before the Argentines began a
sales campaign. In our view, defense industry officials
have not attached high importance to such efforts, nor
have they considered market research a prerequisite
to production decisions.
moreover, that financial constraints forced
8
_ Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Export Difficulties
The TAM tank program embodies many of the
problems that have plagued Argentina's export ef-
forts. The TAM, like other Argentine ground forces
equipment, was developed for the national Army, and
little if any consideration was initially given to its
exportability. Although negotiations have been con-
ducted with several Asian countries and Peru no
TAM export sales have been concluded,
and press reports. There are
several underlying reasons for this, in our judgment:
? Because the Argentine Army needs no more than
200 TAMs, unit costs are high.
? Bonn has placed export restrictions on all tanks
using West German components. This has particu-
larly impeded sales to controversial countries such
as Iran.
? The Third World market for light tanks is limited
by reductions in defense spending.
? The TAM has not been proved in battle.
? There is stiff competition from newer and less
expensive light tanks, from such traditional produc-
ers as France and Austria as well as a newer one,
Brazil.
Argentina is trying to circumvent West German ex-
port restrictions by producing an all-Argentine TAM.
a prototype with a
domestic engine has already been produced. We
believe, however, that efforts to manufacture the tank
with Argentine components will probably be unsuc-
cessful because of technical and funding limitations.
Exports of other Argentine-made ground force mate-
riel have also been disappointing. The only deal of
any significance in recent years has been a $10
million sale of artillery ammunition to Iran in 1983,
25X1
Argentina has also had trouble finding foreign buyers
for its aircraft. The only customer so far has been 25X1
Uruguay, which has purchased six IA-58 light attack 25X1
aircraft, according 25X1
F7has canceled a contract it had signed for 24 25X1
IA-58s?probably, in our view, because the aircraft
did not meet Venezuelan Air Force requirements. The
Bolivian Air Force has expressed interest in buying
IA-58s, but lacks funds; one option reported to be
under consideration is a barter agreement involving
Bolivian natural gas. 25X1
25X1
Iraq has signed a contract to purchase 20 IA-58s, but
actual transfer of the aircraft is being delayed on
both political and financial grounds.
Foreign Minis-
ter Caputo opposes the sale because he does not want
Argentina to appear to be aiding either side in the
Iran-Iraq war. Baghdad is
attempting to pay for the aircraft with Iraqi bonds, a
method of payment unacceptable to Buenos Aires.
the Argentines in recent years to forgo or severely
limit participation in international aircraft shows, an
important means of attracting buyers.
The Alfonsin government has begun to address some
of these problems in an effort to increase exports and
thus make the industries less dependent on govern-
ment financing. According to trade journals
the government is starting to press for copro-
duction and licensing agreements that would replace
currently produced weapons with systems that are
9
more attractive to Third World customers, such as
inexpensive armored vehicles and a small transport
aircraft. Foreign companies would provide new capital
to the industries for development and marketing, at
least partially offsetting budget cuts. Ultimately, ex-
ports of the more marketable products would supply
Argentina with funds that could be reinvested in arms
production.
Secret
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25k!
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Equipment for all three services?army, air, and
naval?is part of the export drive, but the government
appears to be implementing its new strateg first in
the production of around force eauipment.
TAMSE, the
TAM tank production firm, is preparing to deactivate
one of its production lines and instead assemble
Austrian-designed military vehicles under license,
solely for export, probably to the Middle East or other
countries in Latin America.
The civilian administration has also been intensifying
its efforts to find foreign buyers for Argentine mili-
tary aircraft. Argentina's display at the 1985 Paris
Air Show was its most extensive such exhibit in at
least three years,
In addition, the government-owned Military Aircraft
Factory (FMA), Argentina's largest aircraft producer,
has given exclusive marketing and distribution rights
to a private Argentine company to push sales of
military aircraft, such as the IA-63 jet trainer, to
Third World governments in Latin America and the
Middle East.
The government has begun testing the waters for
possible Argentine naval equipment deals as well.
Trade journals report that discussions have been held
with Iran, Libya, Egypt, and other countries regard-
ing possible sales of TR-1700 submarines, and with
several Asian countries concerning Meko 140 frigates.
Domestic Attitudes Toward Change
Alfonsin's efforts to reorganize and reorient the de-
fense industries have encountered a mixed reaction
domestically. The armed forces, for the most part,
resent the government's attempts to dilute military
control over the defense industries,
and press reporting. In the past,
with the military in control of these industries, many
officers earned supplemental incomes through man-
agement positions and kickbacks, according to press
reporting. Alfonsin has made it clear that these days
Secret
are over. Military leaders have publicly voiced opposi-
tion to his plans, but we believe they are too weak,
divided, and discredited to challenge the President.4
Alfonsin's party supports his programs for restructur-
ing the defense industries?particularly the emphasis
on expansion of exports. According to US Embassy
members of the ruling
Radical party view the potential increase in export
revenues as a necessary part of any real response to
the country's financial crisis. The opposition Peronists
and the Peronist-led organized labor movement, on
the other hand, are opposed to some aspects of the
program, according to press statements. These groups
are concerned that reduced government spending on
these industries will aggravate unemployment. The
Peronists, moreover, historically have been strongly
nationalistic and have favored development of an
arms industry geared to fulfilling Argentine military
needs so that the country would not have to depend on
foreign suppliers. We believe, however, that the Per-
onists and their labor allies are internally divided, and
that they have been unable to offer feasible alterna-
tives to Alfonsin's approach.
According to press reports, the business community is
generally supportive of Alfonsin's policies toward the
arms industries. The private sector sees potential
benefits from the exports and new coproduction pro-
grams, as well as from the influx of advanced technol-
ogy.
Outlook
In our view, funding limitations will continue to
plague the defense industries during the next few
years, and export levels are likely to remain too low to
stimulate needed modernization. Despite its efforts to
improve exports, Argentina will face severe difficul-
ties as it tries to enter an international market already
10
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
2bAl
111
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Shrinking Third World Arms Market
A key factor that works against efforts by Argentina
to increase its arms exports is the shrinking Third
World market. In the 1970s, a growing number of
countries?particularly in the oil-exporting Middle
East?were willing and able to buy large quantities
of weapons. This trend has been reversed in the 1980s
for several reasons:
? Decline in purchasing power. Many Third World
countries are experiencing economic crises. Declin-
ing oil revenues and tighter credit have led to a
period of austerity that is reducing Third World
defense expenditures.
? Completion of modernization programs. Many
Third World military expansion and modernization
programs, begun in the 1970s, have been completed.
Another wave of modernization efforts probably
will not occur before the late 1990s.
? Upgrading of existing equipment. Funding short-
ages are forcing Third World buyers whenever
possible to improve equipment they already possess,
rather than purchase new weapon systems.
? Indigenous arms production. A growing number of
countries are seeking to produce and export their
own weapons instead of purchasing foreign-made
equipment. A dozen South American, European,
and Asian countries have entered the international
arms sales business during the past decade, accord-
ing to open-source reporting.
glutted with weapon systems specifically designed to
attract Third World buyers:
? The West Europeans are often favored in purchases
by former colonies.
? The USSR and the East European countries, with
attractive credit terms and inexpensive weapons,
command a large share of the Third World market.
? Other LDC producers, such as Brazil, have more
established reputations and offer less expensive
products than Argentina.
11
In addition, our projections for Third World weapons
procurement are at their lowest point in a decade,
largely because of defense budget cuts resulting from
the worldwide financial crisis.' Moreover, potential
major buyers that are politically controversial?Iran,
Iraq, and Libya?may well remain unacceptable as
customers, in the eyes of the Argentine Foreign
Ministry, despite pressures from supporters of such
sales. Argentina's dependence on Western technology,
with its accompanying export restrictions, will further
limit available markets.
We believe, however, that, despite financial and mar-
keting constraints, Alfonsin will try to encourage
arms production in Argentina for several reasons:
? The defense industries employ a large number of
Argentines. FMA, for example, is the largest em-
ployer in Cordoba Province, with more than 5,000
people on its rolls.
? The military industries are used to attract and
develop hard-to-replace technical personnel that Ar-
gentina needs to retain for its longer term economic
development.
? All Argentine political factions agree that Argenti-
na needs an independent military production capa-
bility, a particularly sensitive issue because of the
experience with the British and US embargoes
during the Falklands conflict.
Given these pressures, we believe that the Argentine
Government will at least provide enough financing to
keep the industries producing at some politically
acceptable level.
Secret
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6 -
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Notwithstanding Argentine nationalism, the glutted
market and the need to produce for export will force
the Argentines to look increasingly toward coopera-
tive efforts with foreign producers as a way to carve
out a corner of the world market. We believe, there-
fore, that, although Argentina will continue to pro-
duce a wide range of relatively low-technology items,
it will increase its dependence on Western suppliers
for high-technology components.
Implications for the United States
As budget cuts continue, we expect increased domes-
tic pressure on the Alfonsin government to approve
exports to politically sensitive countries such as Iran,
Iraq, and Libya. In public statements, Alfonsin has
opposed these sales, but pressure is likely from several
sectors: the military, which stands to gain from a
healthier arms industry; the industries themselves,
which would receive a portion of the revenues for
profits and reinvestment; and nationalist political
groups such as the Peronist party, which have long
championed the domestic arms industries. US diplo-
matic efforts to halt such sales would probably be
countered with Argentine requests for help in closing
similar deals with more acceptable buyers.
Over the long term, Argentina is likely to continue
looking primarily to Western nations for the technol-
ogy it needs to meet its production goals. Although
the United States has not been a major supplier to
date, Argentina may, in its drive for export success
and its quest for the more advanced technologies
needed to compete in the international arms market,
turn increasingly to US firms for joint and licensed
production agreements and marketing assistance. In
our view, if the United States is unresponsive, the
Argentine Government may begin to link the need for
such US support to its repayment of its foreign debt.
In addition, as pressures to export quality military
equipment grow, Buenos Aires may cite Soviet offers
of hardware and technology as an alternative to US
assistance. To date, these offers have been limited to
Secret
finished military aircraft, which alone would not
assist the Argentine defense industries. Acceptance by
Argentina of this type of offer could, however, provide
the Soviets with an entree leading to further military
assistance, including arms production technology?an
angle Moscow might be willing to play with. While
Soviet proposals have so far met with resistance from
Alfonsin's government as well as the military, harsher
economic conditions may soften their concerns. Even
if Alfonsin continues to keep the door closed to the
Soviets, Buenos Aires may still point to Moscow's
offers in an attempt to put pressure on Washington to
release technology and support export sales efforts.
12
-- Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Appendix
Major Weapon Systems
Argentina produces armored vehicles, artillery, small
arms, ships, submarines, rockets and missiles, and
military aircraft. Some of the weapons have been
indigenously designed and are produced entirely in
Argentina, but the majority are heavily dependent on
foreign engineering parts and assembly technology,
and Embassy reporting.
Current Systems
Ground Force Equipment
Armored Vehicles. Argentina's armored vehicle pro-
duction capability was developed through a series of
agreements with West European firms during the
1970s. The most significant contract was signed with
the
This accord provided for the design, development, and
construction of prototypes for the Argentine Medium
Tank (TAM), and for a family of related armored
vehicles.
The West German firm completed the first TAM
prototype in 1976, and production began in Argentina
three years later. TAMSE, a government-owned Ar-
gentine company, assembles the tank. The chassis and
105-mm gun turret are made in Argentina, but the
engine, transmission, and fire-control system are pro-
vided by Thyssen Henschel, according to military
journals. Argentina has sent several TAM chassis to a
firm in Italy for modification into self-propelled artil-
lery by installation of 155-mm guns,
The TAM "family" includes three other armored
vehicle programs based on the original Thyssen de-
sign, according to and
industry publications:
? The VCTP, an armored personnel carrier, carries a
20-mm cannon and a 7.62-mm machinegun. The
Argentine Army now has 150 VCTPs in service and
13
Figure 6
The TAM Medium Tank
Crew
Armor
Combat weight
Manufacturer
Armament
Main
Coaxial
Antiaircraft
Ammunition
Capacity
Fire-control system
Maximum road speed
Maximum range
Power-to-weight ratio
Engine
Transmission
Estimated cost
3064908-85
Secret
25X1
25X1
25X1
25X1
-- Declassified in Part- Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6 -
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Figure 7
Argentina: Production Chronology of Major Weapon Systems,
1970-85
Vehicles,
Artillery
Rockets
Aircraft
Missiles
Ships
1970 71 72 73 74 75 76
Type 42
destroyers a
IA-58
Pucara a
77 78 79
155-mm
howitzer a
TAM a
VCTP a
VCTM a
80
SLAM-
Pampero
Mathogo a
Kingfisher b
Meko 140a
81 82
83
84 85
SAPBA- a
IA-63
Pampa
TR-1700 a
AIL
a Entered series production.
b Prototype testing.
c In development stage: production status unknown.
306491 8.85
has ordered 150 more, although budgetary problems
may prevent acquisition of the additional vehicles.
? A limited number of VCTMs, mortar-carrying ver-
sions of the VCTP, have also been delivered to the
Army.
? The Army's umbrella production entity, Military
Factories (FM), has produced a prototype for a tank
recovery vehicle based on the TAM, but it has not
been completed because of a lack of funds to
urchase a recovery crane from West Germany.
firm to produce night
vision devices for use on the TAM and its variants.
Secret
Machinery is in place at the San Martin facility of
FM, but budget constraints are delaying the start of
series production.
Press reports indicate that series production of an
Israeli-Argentine multipurpose armored vehicle began
in November 1984 and that 90 percent of the compo-
nents are being made in Argentina. This four-wheel-
drive vehicle can be used for troop transport and
equipped with antitank rockets, antiaircraft cannons,
and machineguns. Thus far, only Argentina's border
guard force is scheduled to receive the vehicles.
FM also produces armored vehicle components under
license for West European firms. It manufactures
components of the AMX-13 light tank and the AMX-
VC1 tracked armored personnel carrier for a French
14
-- Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
9
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Figure 8. Pampero Multiple Rocket Launcher.
Figure 9. Mathogo Wire-Guided Antitank Missile.
Figure 10. 155-mm Howitzer
company; assembly is completed in France. A Swiss
firm has selected Argentina to produce components
for its M-3 and M-16 APCs,
FM is also being considered by two Italian
firms for joint production of an armored vehicle now
under development.
Rockets and Missiles. According to Argentine Army
journals, the Armed Forces Scientific and Technical
Research Center (CITEFA) has designed two major
rocket systems for the Army: the Pampero multiple
rocket launcher and a follow-on, the SAPBA-1:
? The Pampero, designed as a battlefield support
system, is a 16-tube launcher with 105-mm rockets.
The system can be mounted on either a trailer or a
vehicle and has a range of 12 kilometers. It is now in
series production.
15
Figure 11. 155-mm Howitzer Assembly Line.
? The SAPBA-1 system builds on the Pampero de-
sign, but has a 40-tube launcher with larger rockets
and increased range.
The Mathogo antitank missile, similar to West Euro-
pean designs of the 1950s, is manufactured by FM.
An entirely Argentine product, the Mathogo is wire
guided, operable by one person, and has a range of 2
kilometers, according to promotional literature. It is
available in an infantry or pack type and a helicopter-
launched version.
Artillery. In our view, Argentina's interest in produc-
ing totally indigenous weapons is evident in its artil-
lery programs. FM has begun manufacturing a 155-
mm howitzer that uses only Argentine components,
Secret
--- Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Ammuni-
tion for this weapon is made in Argentina under
In addition, FM is involved in two coproduction
programs involving artillery systems. Together with a
French firm, FM produces 105-mm towed artillery
pieces, mortars, and shells. It also produces antiair-
craft artillery weapons in cooperation with a Swiss
firm, Oerlikon-Burhle. FM and Oerlikon-Burhle are
discussing a possible expansion of their agreement to
encompass licensed production of 20-mm and 40-mm
antiaircraft weapons,
Naval Systems
for the construction of six TR-1700 attack
submarines.
and the
Construction of the remaining four began in 1983 at
the Garcia Domecq shipyards. Hulls have been laid
for three of these submarines. The first of the three
vessels was originally scheduled for completion this
year, but funding cutbacks and technical difficulties
are causing major delays.
moreover, have ex-
pressed concern that the submarine-building program
may be halted after two have been completed in
Argentina.
Corvettes. In 1980, the West German firm Blohm and
Voss contracted to assist the Argentine Navy in
building six Meko 140 corvettes at the AFNE ship-
yards. Four of the six have been delivered to the Navy
thus far. Jane's Fighting Ships indicates that the
Meko 140s carry Exocet missile launchers and have
an ASW capability
Naval Missiles. According to industry publications,
Argentina currently produces the Kingfisher air-to-
surface missile intended for antiship missions, in two
versions. The ASM-1 has a range of 9 kilometers,
while the follow-on version, the ASM-2, has a
15-kilometer range. Both carry 40-kilogram high-
explosive warheads.
Secret
Figure 12. TR-1700 Submarine. This is the first
TR-1700 submarine at the manufacturer's ship-
yard in West Germany. Four additional TR -
1700s are to be built at Argentine shipyards.
Aircraft
IA-58. The Argentine-designed IA-58 Pucara, a twin
turboprop light attack aircraft, is the only aircraft in
series production at the government-owned Military
Aircraft Factory (FMA),
The initial two-seat version, powered
by French Astazou engines, was developed in the late
1970s primarily for use by the Argentine Air Force,
which now has some 54 of these aircraft in its
inventory.
During the past few years, FMA has developed
several follow-on versions to the IA-58, primarily to
overcome speed and range limitations exposed during
the Falklands war in 1982. One of these, designated
the IA-66, uses the more powerful US-made Garret
16
? Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
1. 1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Figure 13. The 1A-58 Pucara
Ground Attack Aircraft. The
IA-58 is in production at
FMA '5 Cordoba facility
engine.
recent development of two single-seat IA-58 versions.
In one, the Pucara's second seat has been removed to
accommodate an additional fuel tank for increased
range. In the other version, the aircraft's 20-mm
cannon has been replaced with a 30-mm cannon.
IA-63. Under a joint cooperation agreement signed in
1980 with the Dornier company, FMA is to produce a
ground attack jet trainer, the IA-63 Pampa, using
technology from the West German firm, according to
numerous press reports. The initial test flight was
conducted in October 1984. Three prototypes are to
be built for testing; US-built Garret engines for these
aircraft have already been delivered.
The IA-63 program has suffered a series of delays as
a result of technical and funding problems. For
example, the United Kingdom's continuing ban on
military equipment sales to Argentina, stemming
from the Falklands conflict, is blocking the acquisi-
tion of British-produced ejection seats used in the
original design, according to trade journals. Negotia-
tions are under way with US and French seat produc-
ers, but a change will require expensive and time-
consuming modifications to the cockpit.
Private Programs. Military aircraft are also produced
at two private facilities in Argentina, with no govern-
ment participation. Chincul, an Argentine subsidiary
of the US Piper Company, has developed a trainer
called the "Yellow Bird," based on the Piper Chero-
kee design. Press statements of company officials
indicate, however, that production will begin only if
prospective buyers can be found.
17
RACA, a Hughes Company subsidiary in Argentina,
manufactures the Hughes 500 helicopter under li-
cense. As of 1982, the company had produced approx-
imately 40 military and 10 civilian helicopters. Export
of the military version is subject to US approval
Systems Under Development
Despite cuts in funding, Argentina is continuing to
develop a number of new products,
and trade publications.
Some of these are indigenously designed. Others,
high-technology items beyond Argentina's current
level of expertise, are to be license-produced with
Western firms.
Ground Force Equipment
is
researching a long-range (30-kilometer) artillery sys-
tem based on the 155-mm howitzer. The first of two
prototypes is scheduled for completion this year.
These howitzers will be entirely Argentine, using steel
from a domestic steel mill and barrels from the
government's Rio Tercero Military Factory. The abil-
ity to produce the gun barrels represents a new
advance for Argentina, resulting from the purchase of
specialized West German machinery in 1981. Ammu-
nition for the gun is to be produced in Argentina
under license from a Belgian firm.
CITEFA also is testing variants of the Pampero
rocket launcher system. A launcher with a projected
range of 30 kilometers is under development.
Secret
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
25X1
25X1
2!25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Figure 14
The IA-63 Pampa Jet Trainer
Prototype
Type
Wings
Single-engine basic and advanced trainer
Cantilever shoulder-wing monoplane
Power plant One US-built Garret turbofan engine
Avionics Standard avionics package. Wide range of
options available to potential customers.
Maximum speed
740 km/hr
Maximum range
1,500 km
Note: The first prototype of the 1A-63 was presented to the press in
October 1984. The program is now facing delays resulting from budget cuts,
and full-scale production is not expected to begin for at least two years.
306492 9-85
CITEFA has stated publicly, moreover, that an air-
to-surface version of the Pampero has been successful-
ly tested on the IA-58 Pucara aircraft.
Development of a new antitank missile, the MATVA,
is under way at CITEFA. According to Jane's Weap-
ons Systems, the MATVA appears to be based on the
Milan missile, produced by Euromissile, a West Euro-
pean conglomerate. The Milan performed successfully
for Argentina in the 1982 Falklands conflict.
Naval Systems
Argentina is developing a third version of the King-
fisher air-to-surface missile, possibly to be called the
ASM-3. It is a helicopter-launched model with a 100-
kilogram warhead. A prototype is scheduled for test-
ing in 1985.
Aircraft
FMA officials have stated in industry journals that
Argentina hopes to build on its experience with the
IA-63 to produce a jet fighter by the early. 1990s,
using technology from West Germany. Although the
Secret
Figure 15. The Kingfisher Antiship Missile. The
Martin Pescador, or Kingfisher, is a short-range
supersonic air-to-surface missile intended for ei-
ther air-to-ground or antiship missions.
program has a high priority, we believe that this
aircraft is unlikely to appear before the mid-to-late
1990s in view of the delays in the IA-63 program and
the likelihood of continuing budgetary problems.
In 1983, FMA announced plans for the development
of a twin turboprop light transport, designated the
ATL. According to trade journals, FMA officials
believe that the ATL would be an attractive replace-
ment for older aircraft now on the market. It would
have both civil and military applications, and FMA
would offer special configurations to fit customer
needs. FMA is seeking a partner to share production
costs and has approached several firms in West
Germany,
Advanced Weapons Programs
18
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Ballistic Missile
Drawing on technology it developed in the 1970s and
early 1980s in working with sounding rockets, Argen-
tina has embarked on a ballistic missile development
program in recent years. Air Force journals indicate
that research is being carried out by the Air Force's
aeronautic and research institute, IIAE, under the
project name "Condor."
As part of this program, Argentina signed an agree-
ment in 1983 with a consortium led by Messer-
schmitt-Boelkow-Blohm, a West German firm, for the
development of a multistaged launch vehicle for the
armed forces. the two-
stage vehicle is to have thrust vector control, midterm
inertial guidance, a payload of more than 200 pounds,
and a range of over 500 nautical miles. The consor-
tium will construct a prototype vehicle, license it to
the Argentines, and possibly help build a production
facility.
Although we believe Argentina has amassed a signifi-
cant amount of technology and data through its
rocket research and the Condor program, it would be
quite expensive for the Argentines to complete the
development phase, and costlier still to manufacture
the actual weapon systems. Existing and potential
embargoes by Western nations of critical technol-
ogies?guidance and control systems, propellants, and
manufacturing processes?also pose a major obstacle.
Even if there are no additional technology embargoes
and no further budget cuts, we believe the Argentines
are years away from successfully developing and
deploying an operational ballistic missile system.
19 Secret
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6
Secret
Secret
Declassified in Part - Sanitized Copy Approved for Release 2014/01/03: CIA-RDP04T00447R000100160001-6