Boston, MA -- (SBWIRE) -- 02/26/2014 -- Fallout from revelations in Q313 that the US National Security Agency (NSA) conducted widespread surveillance on Brazilian citizens including Brazil's President, Dilma Roussef, has remained at the centre of security and defence developments in Brazil over the last quarter. With the possible exception of Germany, the Brazilian Government has issued the sternest condemnation of the NSA's surveillance programme. Not only did Roussef cancel an official state visit to Washington scheduled for September, but she also publicly chastised the United States at the UN General Assembly later that month. It is still unclear as to what longterm effects the NSA's actions will have on Brazil-US defence and security ties. However, given developments over the last quarter, BMI can confidently predict that this episode has far from run its course.

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Indeed, the Brazilian government would reportedly give strong consideration to any asylum request they were to receive from NSA whistleblower Edward Snowden for asylum. In December 2013 a group of Brazilian senators came out in support of Snowden. In addition the Brazilian press has endorsed the NSA whistleblower, with one Brazilian daily stating that 'if Snowden asks for asylum he should be granted it'. Any decision by Brasilia to grant asylum would be met by significant consternation in the Washington, who have repeatedly called for Snowden's extradition so that he can stand trial in the United States. However, BMI ultimately believes that it is unlikely the Brazilian government will decide to offer Snowden asylum. Rousseff and her government know how important it is to cultivate Brazil-US relations, particularly given Brazil's economic needs as it continues on its path towards developing a more advance economy.

However, some commentators have seen Brazil's surprise decision to choose Saab's Gripen NG fighters over Boeing's F/A-18 Super Hornet to replace its ageing fleet of Franch Mirage fighters, as an extended repercussion of NSA spying. December's announcement will see Saab, the Sweedish defence minnow, awarded a US$4.5bn contract - with billions of additional dollars in future service and supply contracts - to provide Brazil's air force with 36 new Gripen NG fighters by 2020. Until mid-2013 the American defence firm Boeing had been considered the firm favourite to be awarded the contract.

In addition, the Swedish government is reportedly working on a joint strategy with Saab, which would see a radically scaled-up industrial dimension with Brazil becoming the primary production base for future Gripen sales to South American and Africa. In another coup for Saab, the Brazilian army is reportedly on the verge of finalising a contract worth almost US$12mn, for the RBS 70 mobile very-short range air defence system.

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