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Argentina Creates National Defence Fund

Funds Will Be Additional to Defence Budget

On 16 September the Argentine Senate finally approved the law creating the National Defence Fund (Fondef) to finance the process of re-equipping the armed forces. This was achieved with the unanimous vote of the ruling party, since the opposition disconnected from the videoconference in disagreement with the extension of remote sessions.

The project had been approved last year, prior to the change of government, by the Chamber of Deputies at the request of then Deputy Agustín Rossi, just weeks before being appointed Minister of Defence. According to him “it is a historic moment” and he added that “it is a specific fund that is [intended for] the re-equipment of the Argentine armed forces so that the objectives of any defence policy can be met, which is to guarantee sovereignty.”

The objective of this initiative is that Fondef resources will be used specifically for the recovery, modernization and incorporation of materiel for the armed forces. On the other hand, the law is also aimed at favouring the replacement of imports, development of suppliers and the international promotion of local production of defence-oriented products and services, promoting productive, inclusive and sustainable innovation through greater technological development, increasing R&D activity in both the public and private sectors, and improving conditions for the creation, dissemination and assimilation of innovation by national manufacturing infrastructure.

The Fondef will be made up of 0.35% of total Current Income foreseen in the Annual Budget for 2020, 0.5% for 2021, 0.65% for 2022 and 0.8% for the year 2023, maintaining this last percentage for successive budget years. This contribution is independent of those resources allocated to the Ministry of Defence and the armed forces in the national budget. The fund must be executed annually in its entirety: in exceptional circumstances, up to 10% of the total may be disposed of as a balance, unattributable to the law’s objects. In such a case, the remainder will be charged to the following year.

The National Defence Commissions of both Houses of Congress will be empowered to intervene in monitoring the re-equipment process of the armed forces. To this end, they are assigned a series of functions such as receiving the annual investment plan, receiving semi-annual reports, requesting reports from the Ministry of Defence, verifying budgetary execution of the resources mentioned and making observations and suggestions.

Florencia Lucero Heguy and Santiago Rivas in Buenos Aires for MON

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