Caracas: South America has a right to bolster its armed forces but is not in an arms race, Brazil's defence minister said on Monday amid increased military spending in the region on the back of high oil, food and metal prices.

Nelson Jobim, who is in Venezuela to discuss a proposed South American security council, said military power was critical to furthering the region's say on the world stage.

"There is no arms race in South America," he said after meeting with Venezuelan President Hugo Chavez, an antagonist of the United States who is using oil dollars to modernise the country's armed forces.

"It is important that countries have weapons. The projection of power by South America depends on its dissuasive powers of defence," said Jobim.

Brazil, Chile and Venezuela are enjoying a boom thanks to high commodities prices even as Haiti and some countries in Central America struggle to pay record prices for food and energy.

Reduced reliance on US

Oil-rich Venezuela has bought Russian jets and assault rifles while agricultural powerhouse Brazil is looking to buy a nuclear submarine as it revitalises its large but outdated military.

Some security analysts fear bigger arms budgets and political differences between Venezuela and Colombia could lead to a destabilising build-up of weapons in the region.

Brazil and Venezuela are leftist allies who want to reduce Latin America's reliance on the United States, but who also vie for regional influence.

Brazil aspires to a permanent seat on the UN Security Council. It proposed a regional defence group in the wake of a crisis last month that took Andean countries close to war.

Jobim said the group is not intended to have operational capacity but would coordinate defence policy in the region. He said the body, which excludes the United States, will be up and running by the end of the year.

Jobim, who is due to travel to Guayana and Suriname this week, said he would also visit countries from Argentina to Colombia to drum up support for the regional defence body.