Russia's Position on the Global Arms Market

The current contract portfolio of Russian arms exporters is worth about $46 billion. Annual exports total $15 billion, and this will ensure uninterrupted deliveries for the next three years, even in the worst-case scenario. The list of the main buyers of Russian weapons is unlikely to change drastically.

The recent military expos in Brazil, Malaysia and Peru, as well as the latest statistics, confirm the fact that Russia ranks among the key players on the global arms market.

How competitive are the Kamov Ka-62 and Mil Mi-17 helicopters, the Pantsir, Thor and Igla air defense systems, Tigr armored SUVs, etc., that were displayed in Rio de Janeiro, if we compare it with similar military equipment being manufactured by other leading arms exporting countries?

Weapons and military equipment sales on the global market are the best indicator of their competitiveness. This indicator highlights the truly impressive competitiveness of Russian helicopters and air-defense systems. Russia's helicopter output increases by 10-15% annually. Although this growth is partially ensured by domestic contracts, over 50% of brand-new helicopters are exported elsewhere. In the mid-1990s, Russia used to manufacture 50-70 helicopters each year. In 2013, over 300 helicopters will be assembled. Although helicopters of the Mi-17 Hip family remain the most popular models, military helicopters, including the new generation Mi-28 Havoc attack helicopter, also sell well. Brazil has recently ordered the state-of-the-art Ka-62 medium helicopter. The same can be said about the Pantsir missile air defense system. Although this system is new, and although it usually takes customers a long time to size up various products and to assess their performance, the Pantsir has already been sold to three countries – the United Arab Emirates, Syria and Algeria. A contract for the delivery of Pantsir systems to Iraq has recently been signed. Brazil, which is also very interested in this system, will be expected to sign a relevant contract this summer.

Who are the most promising partners in the context of Russian military equipment purchases? Can the Latin American region be considered such a partner?

The list of the main buyers of Russian weapons is unlikely to change drastically in the short-term and in the mid-term. India will remain a major client. Vietnam and Algeria will continue to make substantial purchases. If Russia and China sign contracts for the delivery of Sukhoi Su-35 Flanker-E fighters and non-nuclear submarines based on the Project 1650 platform, then this country will become a major importer of Russian weapons once again. At some point, China will become the second largest arms importer after India. However, the situation that arose in the late 1990s and early 2000s in which Beijing accounted for up to 50% of Russia’s foreign arms sales will never repeat itself. Moscow has also signed major contracts with Iraq. Unfortunately, some wrong decisions by the Kremlin during the presidency of Dmitry Medvedev caused Russia to lose such major customers as Iran and Libya.

As for Latin America, Russian exporters currently prioritize efforts to complete arms shipments to Venezuela under a large package of 2009 contracts. As of early 2013, Moscow should deliver military equipment worth an estimated $1.6 billion out of the $6.4 billion contract package, which was signed in 2009. As I see it, Brazil and Argentina can also be considered promising regional markets and partners.

Director of the Federal Service for Military-Technical Cooperation Alexander Fomin says that Russian arms exports have tripled. He estimates that Russia exceeded arms and military equipment export targets by almost 12% in 2012. Will Russia be able to preserve its leading positions in the sphere of global arms exports?

The current contract portfolio of Russian arms exporters is worth about $46 billion. Annual exports total $15 billion, and this will ensure uninterrupted deliveries for the next three years, even in the worst-case scenario, and if Russia fails to sign any new contracts. Therefore one can say that Russia’s positions on the global arms market will remain absolutely stable for the next three years.

China also ranks among major arms exporters. The latest statistics show that China continues to boost its defense spending each year. Should we expect China to become a leading military equipment supplier in the near future? And should we expect that Russia will compete against China, rather than Europe and the United States, on the arms market?

Yes, China is quickly becoming a very serious player on the arms market, often in those geographic areas where Russia is also strong. The technological, financial and economic potential of China and its political weight continue to increase. In effect, all factors that influence the country’s positions on the global arms market are changing in favor of China. Currently, annual Chinese arms exports reach about $2 billion, and this volume will, most likely, continue to increase. On the other hand, Beijing’s expansion on this market is hampered by a number of serious restrictions. Russia retains technological superiority over Chinese manufacturers in most segments, and it will probably retain this superiority in the near future. And there are certain critical technologies for which China directly depends on Russian shipments in this sphere. The RD-93 and Al-31F/FN aircraft engines are the most convincing example of this. These engines are installed on the most advanced Chinese fighters, including export-oriented fighters and those that are already being marketed abroad. In this situation, Russia can, in effect, control and, if necessary, block Chinese arms exports. But I repeat that, in the long-term, China will, of course, become a major global arms exporter.

The Stockholm International Peace Research Institute (SIPRI) has said that Russia is among the few countries that boost defense expenditures even in this time of crisis. What can you say about this? At the same time, Prime Minister Dmitry Medvedev and Deputy Prime Minister Dmitry Rogozin point out the ineffective spending of the enormous defense budget. How can this be explained?

Russia is forced to boost defense expenditures for two reasons. First, this is being done in order to compensate for the fact that Moscow had neglected its defense needs for 15 years. Second, this can be explained by a complicated geo-political situation around Russian borders. The situation in the North Caucasus and in Central Asia could deteriorate anytime, especially after NATO forces withdrawal from Afghanistan. Extremists could take advantage of the upcoming 2014 Winter Olympic Games in Sochi to remind everyone about their existence. If the legitimate Syrian government is overthrown as a result of a foreign military intervention, those huge assets that are being spent on the destruction of the Syrian statehood might be used for subversive work in Russia. Consequently, Russia has to constantly upgrade its military instruments to ensure its security, sovereignty and territorial integrity. As for the allegedly “ineffective” state defense spending, we should, first of all, address this question to Medvedev and Rogozin, who are directly responsible for this aspect of state development.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.