Under President Vladimir Putin, Russia has launched a comprehensive program to restructure its defense industry, which has shrunk dramatically since the Soviet era. This process has achieved some progress, but fundamental structural problems persist that lead Russia to export large quantities of advanced weapons to conflict-prone regions, placing the Kremlin at odds with Europe, the US and other countries.
Over the last six years, the Putin administration has encouraged the nationalization and consolidation of private-sector defense firms into large, vertically integrated, state-controlled holdings. In November 2000, Putin approved the creation of a single government-supervised arms exporting agency, Rosoboronexport, to end the self-destructive competition that had developed between the country's major weapons-exporting enterprises.
Earlier this year, the agency gained the exclusive right to sell Russian weapons to foreign countries.
At present, the government is promoting the creation of a similar institution in the aviation sector, the new United Aircraft Building Corporation (UABC), which includes major state and private manufacturers of fixed-wing aircraft. Proponents of the merger believe it will improve the efficiency of the Russian aircraft industry and, by lowering costs, make Russian planes more attractive to foreign buyers.
Under Putin, Russian military spending has also rebounded. This year, the Russian government will provide the Ministry of Defense with almost 5 trillion rubles (US$189 billion) under the State Armaments Program. The percentage of the defense budget allocated to purchasing military equipment will rise from 44 percent last year to 50 percent by 2011.
The primary purpose of this increased spending is to push new weapons systems from the research and development stage to actual procurement for Russia's armed forces. Over the course of 2007 to 2015, Russia's army and navy will replace 45 percent of their military equipment.
In the past, poor government and industry practices frustrated similar plans to supply large numbers of advanced conventional weapons to Russia's armed forces. The country's military-industrial sector suffers from limited domestic orders and extensive overcapacity. Purchases for the Russian army and navy have been increasing, but still only sustain about one-fourth of Russia's existing military production capacity. The Russian government now spends more on new Russian-made conventional weapons than do foreign purchasers. Yet, persistent inefficiencies in the Russian defense procurement system result in foreign buyers receiving more new systems than the Russian military.
As a result, Russia's leading defense firms remain heavily dependent on foreign sales. Although Russia's arms exports have decreased considerably since the Soviet period, its revenue per transaction is now greater because Russian firms have yielded much of the lower-end market to less expensive suppliers like China, India and other former Soviet bloc allies.
Moreover, where the USSR transferred much weaponry under easy commercial terms or without charge (under long-term loans not expected to be repaid), Russia now discounts arms only for its closest allies. On March 27 the defense ministry announced that Russia's annual arms exports increased by 50 percent, from US$4 billion to US$6.5 billion, from 2001 to last year.
In an effort to both maximize foreign revenue and strengthen Russia's own military potential, former Russian defense minister Sergei Ivanov, who now oversees Russia's military-industrial complex and is one of the two leading candidates to succeed Putin as president, stressed the need for "the national defense industry to find a balance between a commitment to arm the Russian military and an opportunity to export arms to countries not subject to UN sanctions."
Besides helping to sustain the health of Russia's military industrial complex, many Russian officials think that arms sales will promote Russia's diplomatic interests by strengthening ties with recipient states.
These transactions, however, have complicated Moscow's relations with foreign governments, particularly the US. US officials complain that Russia's self-imposed restrictions on arms sales are much weaker than those of Western countries, especially with regard to authoritarian governments accused of committing human rights violations or states seeking weapons of mass destruction.
Washington has protested against Russian military sales to Belarus, China, Iran, Syria, Uzbekistan and Venezuela. In early January the US government imposed economic sanctions on three Russian companies, including Rosoboronexport, for selling missiles and other prohibited military technologies to Iran and Syria.
Russian officials insist that their military exports conform to all applicable international laws and involve primarily defensive weaponry that will not disrupt regional power balances. They add that the US and its allies also transfer large volumes of weapons to areas of conflict, including South Asia and the Middle East. Russian officials also contend that US and other foreign objections often reflect a desire to eliminate unwelcome Russian competition or curtail the Kremlin's influence in important regions, such as Eastern Europe, Asia and the Middle East.
In 2005, the head of Rosoboronexport, Sergei Chemezov, said: "Let's have no illusions: if we stop sending arms to export, then someone else will do it."
Russia seems prepared to negotiate on some security issues, including such sensitive questions as Iran and Kosovo. Achieving limitations on Russian arms sales, however, will prove much harder. Given the condition of Russia's military-industrial complex, considerations of national pride, geopolitical influence and entrepreneurial profits will likely sustain Russian interest in selling weapons to almost any client no matter how distasteful to Western governments.
Richard Weitz is a senior fellow and director of Program Management at the Hudson Institute.
Copyright: Project Syndicate
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.