Home / Archive / N1 2009 / RUSSIA’S ARMS EXPORT – HIGHER THAN EVER
RUSSIA’S ARMS EXPORT – HIGHER THAN EVER
In 2008 Russia's weapons export abroad exceeded $8.35 billion, $800 million increase from the previous year. Russia's President Dmitry Medvevev, addressing a meeting of the Commission on Military-Technical Co-operation, expressed his satisfaction with these figures, the highest ever in Russia's history. The meeting took place on 10 February, 2009 in the reception house of the presidential residence in Gorky, near Moscow. All Russian top-level officials related to arms export were present at the meeting, including deputy prime minister Sergey Ivanov, deputy prime minister and the minister of finance Alexey Koudrin, secretary of the Security Council of the Russian Federation Nikolay Patroushev, foreign minister Sergey Lavrov, justice minister Alexander Konovalov, defense minister Anatoly Serdyukov, minister of trade and industry Victor Khristenko, director of the Federal Security Sevice Alexnder Bortnikov, director of Foreign Intelligence Service Mikhail Fradkov, director general of Russian Technologies Sergey Chemezov, director general of Rosoboronexport Anatoly Isaikin. The head of the presidential administration Sergey Naryshkin and presidential assistants Sergey Prikhod'ko and Larisa Barycheva were also present.
"Last year's figures for military-technical co-operation were not bad at all," said the Russian President. "It is obvious that this year will not be easy because the whole world is in financial crisis. This influences the volumes of weapons contracts. Nevertheless we need to try to maintain what we have achieved, and, maybe, at some directions even increase volumes of our co-operation", commented Medvedev. He continued: "First, we have to monitor the flawless quality of products, promptly proceed with contracts paperwork and strictly fulfill them". The contract themselves, the president stressed, "should be based on real capabilities of our military industrial complex". "There should be no "inflated" and groundless contracts. The price determination should be responsible, understandable and transparent. There should be no haze especially in the existing circumstances of such a fierce competition between manufacturers," added Medvedev.
"It is obvious that in the current circumstances of the global financial crisis there will be corrections of export plans introduced by ourselves as well as by our partners, and we will have to react on this. Changes of prices of raw materials and components may occur, and we have to be ready for them," warned the Russian President. Medvedev urged to pay maximum attention to fulfilling contract obligations: "There must be no delays in deliveries", stressed the president. Medveded instructed to have a broader approach to arms sales market: "We have to look at different directions, diversify deliveries, advance into markets where we traditionally are not present, or are present insufficiently. We have to strengthen our positions there".
Overall, weapons sales abroad hold the fifth position in the list of Russian exports after crude oil, natural gas, ferrous and non-ferrous metals. While the right to sign arm sales contracts for finished products has been restricted to the sole state corporation Rosoboroneport, 21 more companies are listed as "subjects of military-technical co-operation" by a government decree. That means that those companies have the right to sign contracts for spares deliveries, repair, maintenance, modernization and training. In 2008 Rosoboronexport delivered abroad weapons and military products worth $6.725 billion, over 80 per cent of the total Russia's revenues for export arm sales. Answering reprimands about monopoly in arms sales, Anatoly Isaikin, director general of Rosoboronexport, said in an interview with Nezavisimaya Gazeta: "The term "monopolist" as related to Rosoboronexport needs clarification. Our so-called monopoly absolutely excludes situation when some enterprises get the chance to develop themselves while others are suppressed. First, it is not Rosoboronexport who determines lead contractors for fulfilling export orders. That used to be the responsibility of the Federal Agency for Industry, now this role belongs to the Ministry of Industry and Trade. We just execute the decisions made by the ministry. Of course, we can give recommendations as we know the industry and capabilities of each plant. But our opinion may be taken into consideration, and may be not".
According to Isaikin, the order backlog of Rosoboronexport amounts to $26.5 billion. Each year the corporation signs about 700 contracts with foreign customers, and about 1000 - with Russian manufacturers. Coming to geographical priorities, Rosoboronexport director general acknowledges that in previous years contracts with India and China amounted to 50-75 per cent of the overall sum. However, now there is a certain move to geographical diversification. Last year important contracts with Algeria, Brazil, Venezuela, Vietnam, India Syria and Turkmenistan were signed. More than half of the contract backlog is for deliveries to India and South-East Asia, about one third - to Arab countries of Middle East and North Africa. In Latin America, Isaikin says, "prerequisites for weapons export to Bolivia and Ecuador have been created".
Commenting accusations from Israel and the USA that possible deliveries of the S-300 surface-to-air missiles to Iran will change the balance of power in the Gulf region, the Rosoboronexport director general, quoted by Nezavisimaya Gazeta, says: "In other words, Israel and the USA will loose the capability to dictate their political will to peoples of that region". He explains: "We deliver weapons to any point in the world in strict compliance with the laws of the Russian Federation. Prior to shipping a pistol, or just a single round abroad, we have to go through a huge list of approvals in state entities, receive endorsement documents from them. Having these documents, either a presidential decree or an order or a resolution by the government is issued allowing sales abroad. So only a decision on that high political level gives us a right to negotiate a contract as such. Only after that negotiations with a customer begin. And any decision on deliveries, to Iran, China, India or any other country is preceded by one and the same procedure. So Rosoboronexport has no right to ship even a single weapon unit abroad in violation of these high-level decisions or, even more so, in their absence". Isaikin acknowledges, that Russia has sold weapons to Iran, but insists: "Everything is being done absolutely openly and in accordance with the regulations I mentioned. So in regards to discussion of possible deliveries of the S-300 SAM systems, I state once more that if a decision by the President, the Russian government is made, Rosoboronexport will have to execute it. We are not a political body, we are technical executives. Nothing depends on our willingness or unwillingness to ship some weapon system to this or that point of the world".
Coming back to the question of changing the balance of power, the head of Russia's arms sales corporation explains: "So far Russian weapons sales have not violated the balance of power in a single region, just nowhere. The policy is balanced and rational. We do not sell abroad weapons and military products banned for deliveries. The most authoritative international body overseeing the military political balance is the United Nations. It is the only structure that at the level of international relations decided how the world community has to behave in relation to the countries, which violate the established world order. Only the UN Security Council is endowed with the rights to set embargo on deliveries of weapons to this or that country. Rosoboronexport not even once has delivered any weapons bypassing the UN decisions, we just can't do that, our activities are public".
There is certain criticism of Russian arms sales to China, even in domestic media. Now, when the volume of Russia's defence export to China is gradually decreasing, some experts say that Russia unwisely transferred key technologies to China, allowing it to copy weapons via retro-engineering without obtaining licenses. Isaikin disagrees: "It is an absolute fiction that the People's Republic of China has used the military technical co-operation with Russia to obtain technologies, and now China has absolutely no interest in buying Russian weapons". Director general elaborates: "From the first days of the People's Liberation Army of China its inventory by 100 per cent consisted of Soviet weapons. Naturally, Chinese designers have used some of the elements and decisions in the systems they develop. But this is done not in China only, in many other countries as well. As for the share of our military export to China, which used to be 40 per cent, it may well fall down to 10 per cent. We are not afraid of this".