Military spending rose 4.2 percent in Latin America last year, bucking a global trend that indicated downturns in Europe, North America and parts of Asia and Africa.

However, the defense spending picture remains complex in the Latin American region.

Increased military spending was most noticeable in countries that are modernizing armed forces or facing internal security needs in response to organized crime, including narcotics trade.

The largest spending increases were 43 percent in Paraguay and 42 percent in Venezuela, the Stockholm International Peace Research Institute said in a report.

Mexico's military spending went up 9.7 percent, the SIPRI report said, due largely to the government's campaigns to combat drug cartels.

Analysts say that while increased military spending in all three countries cited by SIPRI was attributable to imports, internal acquisitions and salary and wage bills, Brazil continues to lead the continent in defense industrial development even as its overall expenditure declined 0.5 percent 2012.

Brazil is spending large sums on capital investment, building up military manufacturing capacity and funding inward technology transfers. Brazil has also encouraged private sector regeneration of military industries that formed a mainstay of overseas earnings under dictatorship during 1964-85.

Brazil spent more than $33 billion last year -- about 1.5 percent of its gross national income -- on military development, some of it on bolstering defenses around its newly developed oil and natural gas resources.

Brazil is expanding its naval fleet, including building a new range of submarines, to deal with offshore oil security needs. At least one nuclear-powered submarine will be built and deployed for offshore oil patrols.

Argentina and Chile have announced plans to revive local defense manufacturing and modernize armed forces, although both are hamstrung by lack of cash resources and other budget priorities.

Argentina increased its military spending 132 percent since 2003 but made few major arms purchases, SIPRI data indicated. Argentina was the 82nd largest importer of major conventional weapons during 2008-12. But personnel costs absorbed 78 percent of Argentine military spending in 2012.

Analysts say Argentina's regulatory environment continues to discourage private investment in its defense industries, in contrast to growth in Brazil's arms, aviation and aerospace export potential.

Venezuela's military plans now depend on a new government after Sunday's elections. Much of Venezuela's military spending under late President Hugo Chavez was driven by its confrontation with Colombia and uneasy ties with the United States, while modernization of domestic manufacturing lagged.

A controversial $4 billion loan from Russia for buying equipment has saddled the oil producer with a long-term liability. President-elect Nicolas Maduro hasn't spelled out his defense policy or future relations with Colombia or the United States.

Populist revolutionary strands in Venezuela's foreign policy are seen by critics as the main reason for the country's high defense spending.

Colombia increased its military spending 11 percent in real terms as part of a 4-year investment plan, SIPRI data indicated. During 2012 the government of President Juan Manuel Santos allocated $1 billion for the purchase of satellites, helicopters, communication equipment and armored vehicles.

Colombia is still facing guerrilla threat despite initiatives toward reconciliation.