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industry by many of these countries: opportunities to present attractive training and procurement packages look encouraging. The indications are, however, that we shall only be successful if we can find it in our gift to be more generous with the financial
incentives we offer: the economies of these countries are unable
to bear the full costs of such packages. We would need to be convinced of the advantages that would accrue to us from any such
abatements.
38. Mention has been made of the aid we are providing for Colombia under Operations VIOLATE and VULGAR. Brazil, the major country of the continent, with roughly half the population,
half the area and half the GDP of South America offers
considerable scope, and prospects of some sales successes here
are in the offing. Visits by RN survey vessels have been
welcomed, and aircraft diversions on the Ascension-Falklands
route have been accepted without problem. Uruguay, at the risk of upsetting Buenos Aires, has not always found it easy to accept such diversions. The thawing of relations between the UK and
Argentina at the Madrid talks in October may lead to an easement
for RAF diversions into Montivideo. Venezuela, like Brazil, a
relatively stable Western-oriented democracy, also has powerful armed forces which are disciplined and well equipped; she is
likely to become a big spender in the future and the UK is well-
placed to become a major arms supplier here. In Chile, an easier political atmosphere should allow an easing of the US
embargo on certain acquisitions. The UK will exhibit at the
biennial air and space exhibition in Santiago in March 1990
evidencing that here, as in other S American countries, considerable prospects for British sales exist; high pricing and inter-company competition will, however, effect UK chances.
VIP and ship visits, subsidised places on Staff Courses and invitations to UK defence related exhibitions, all provide an
excellent focus for capitalising on the improving relations
between UK and many of the countries of this continent.
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