Brazil’s Rousseff, mulling jet deal, touts defense

* New president defends need for modern military

* Comments could signal decision soon on jets purchase

BRASILIA, April 5 (Reuters) – Brazilian President Dilma
Rousseff, who is deliberating a multi-billion dollar jet fighter
deal, on Tuesday defended the need to spend money on defense at a
time when she is making big budget cuts in other areas.

Rousseff’s comments at a military ceremony in Brasilia are one
of the clearest signs to date that she could move forward soon on
a deal to buy at least 36 fighter jets from either U.S.-based
Boeing (BA.N: Quote, Profile, Research), France’s Dassault Aviation (AVMD.PA: Quote, Profile, Research) or Sweden’s
Saab (SAAB.ST: Quote, Profile, Research).

“A totally developed Brazil will need equipped, trained,
modern Armed Forces,” Rousseff said. “Defense cannot be considered
a lesser element on the national agenda.”

Some critics have suggested that Rousseff should postpone the
purchase of the warplanes until 2012 or later given that she just
announced $30 billion in cuts in other areas to cool Brazil’s
booming economy.

Yet Rousseff told the audience it would be a “big mistake” to
consider spending on upgrading military technology to be an “idle

Rousseff said that Brazil needs a strong military to defend
its new offshore oil reserves, as well as guarantee the security
of the vast Amazon region.

The aircraft deal has become one of the most hotly disputed
trade and diplomatic issues under Rousseff’s administration, which
took office on Jan. 1. She has cast the deal as a way to modernize
Brazil’s Air Force as well as consolidate strategic partnerships
over the coming decades.

Rousseff’s recent actions and declarations have indicated she
is leaning toward purchasing Boeing’s F-18, and U.S. President
Barack Obama pushed the deal on a visit to Brasilia last month.

However, Dassault and Saab have also expressed confidence that
their bids are stronger, especially on transfers of proprietary
technology that Rousseff has said are crucial to her decision.

To defuse criticism of her budget priorities, Rousseff could
announce the winner of the tender in coming months but defer any
expenditures until 2012, or seek financing that would lessen the
short-term blow of the purchase to government accounts.
(Reporting by Hugo Bachega; editing by Anthony Boadle)

Brazil’s Rousseff, mulling jet deal, touts defense