US embassy cable - 04CARACAS3031

C O N F I D E N T I A L CARACAS 003031 
 
SIPDIS 
 
 
NSC FOR CBARTON 
HQSOUTHCOM FOR POLAD 
 
E.O. 12958: DECL: 09/22/2014 
TAGS: PGOV, VE 
SUBJECT: AIRCRAFT CONTRACT RUMORS RESURFACE  (U) 
 
REF: IIR 6 902 9829 04 
 
Classified By: POLITICAL COUNSELOR ABELARDO A. ARIAS FOR 1.4 (D) 
 
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Summary 
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1.  (C)  A 10 September newswire reporting Venezuela's 
alleged interest in procuring Russian jet fighters has 
renewed media speculation that the two countries may be close 
to an arms deal.  Chavez has already purchased Russian 
helicopters, according to DAO and press reports.  Although he 
is seeking to reduce the military's dependency on US-based 
weapons systems, Chavez is unlikely to conclude the fighter 
contract in the near term, and we should not take steps that 
encourage him to do so.  End summary. 
 
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Rumors and Offers 
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2.  (C) On 10 September, a UPI newswire detailing Venezuela's 
plans to acquire MiG-29 fighters prompted additional press 
rumors over the status of a possible deal between Venezuela 
and Russia that has resurfaced every several months since 
late 2001.  The press reports cite US, European, and Latin 
American military intelligence officials.  In sharp contrast 
to Russia's 2001 proposal, which outlines a nearly USD two 
billion offer, the reports describe the contract as worth USD 
five billion.  Details about the materiel and support Russia 
is to provide, however, are roughly consistent with the 2001 
offer.  Both reports mention the purchase of 40 one-seat MiG 
29s, 10 two-seat MiG 29s, and training and maintenance for 
the planes. 
 
3.  (C) Press reports also cite a contract to buy MI-17 
helicopters from Russia and radar systems from China.  On 22 
September, Chavez confirmed he had bought Russian helicopters 
to help patrol the Colombian border after a 17 September 
ambush claimed the lives of five Venezuelan soldiers 
(SEPTEL).  DAO reporting (REFTEL) suggests this deal may 
include a package of MI-17, MI-35, and MI-26 helicopters for 
USD 190-450 million.  According to MILGROUP, the negotiations 
for Chinese radar have collapsed. 
 
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Comment 
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4.  (C) Although Venezuela's signed contracts sometimes fall 
apart, the GOV appears to have purchased Russian helicopters. 
 Any deal on MiGs, however, will probably take longer to ink. 
 Acquiring Russian fighters would involve a shift in 
technology, maintenance, and training for which the FAV is 
unprepared.  Moreover, buying MiGs would also alienate 
Chavez's US-trained F-16 squadron and give his opposition 
fodder to condemn government waste.  The GOV, which has 
counter-offered in the past with ill-defined joint ventures 
and barter deals for Venezuelan aluminum and petroleum, will 
remain reluctant to pay the up-front cash required by Moscow. 
 Even spread out over several years, a USD 2-5 billion 
purchase would put a severe dent in Venezuela's budget. 
 
5.  (C) The logistical and practical details notwithstanding, 
Chavez is seeking a way to free Venezuela from reliance on US 
training and parts.  He may view buying a new fleet of 
fighters from Russia as an easy solution to his decaying F-16 
squadron.  According to MILGROUP, only six of the 21 
remaining F-16s in the Venezuelan fleet are fully mission 
capable, while a proposed US overhaul of the F-16 squadron 
remains on hold. 
 
6.  (C) For our part, we should avoid tilting the balance in 
favor of a MiG deal by default.  The symbolism of purchasing 
from a US strategic adversary cannot be overemphasized.  By 
buying Russian or Chinese systems, Chavez aims to distance 
Venezuela not only from "imperialist" weaponry, but also from 
the US military in general.  If this is to be the case, then 
we should ensure that it is the result of a decision clearly 
attributable to Chavez and the GOV, not us. 
 
Brownfield 
 
 
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      2004CARACA03031 - CONFIDENTIAL