|Russia back strongly in world arms market
C.J. Chivers NYT
Monday, July 12, 2004
State agency promotes military exports
NIZHNY TAGIL, Russia Russia has surged back into the international arms market, moving from laggard to a leader. Prodded by a state-controlled export agency, Moscow has been closing deals on submarines, tanks, frigates, helicopters and jet fighters, along with the add-ons and maintenance contracts that keep these expensive items running. Even a Soviet-era aircraft carrier has been transferred to India as part of a deal for its refitting and the purchasing of new weapons and aircraft.
Last year was the fourth consecutive year of growth. Rosoboronexport, the state exporter, said sales exceeded $5.07 billion in 2003, a position that would rank it second on the list of arms-exporting nations, behind the United States. Talk among exporters is optimistic, laced with residual cold war bravado.
"We are pleased to have such a strong rival - the United States," said Igor Sevastyanov, who leads Rosoboronexport's ground equipment division. "We hope that one day soon we will become first."
For now that seems unlikely. From 1999 through 2002, the last year for which international data is available, the United States made 41.9 percent of international arms agreements. Russia made 25.5 percent, according to the Congressional Research Service.
Given the United States' continued investment in research and development, and the soaring wartime purchases by the Pentagon, analysts say Russia has little immediate prospect of knocking Washington from its perch as the world's premier arms merchant.
Still, no one disputes Russia's revival. Since the Sept. 11 attacks, global defense exports have actually decreased. Yet Russia has closed more deals, mainly through its leading clients, China and India.
The swing in fortunes is tied to a decision in President Vladimir Putin's first term that merged two foundering arms export agencies, creating Rosoboronexport.
At the time, the Russian military did not have the budget to buy its own equipment, and traditional clients of the former Soviet Union - including Iraq, Syria, Egypt and other African nations - were seeking fewer weapons, especially armor and planes.
Through marketing and high-profile management - Rosoboronexport is led by Putin's former colleagues in Soviet intelligence services - Russia has managed to protect much of its military industrial base in a period of lean domestic purchases.
Its endurance draws from a reputation forged in the cold war. For decades Moscow's arsenal had outfitted the world with Soviet-designed military equipment, which went to battle under flags as varied as those of Uganda, North Korea, Egypt, Iraq, Iran and even the Taliban.
Today's markets are narrower. The nations of the Middle East no longer purchase arms as they once did, and during the cold war, Communist countries dumped tens of millions of assault rifles into conflict zones, swamping markets that remain flooded today.
"Russia is not doing well at all right now with these weapons, because in the past they've done too well," said Charlie Cutshaw, co-editor of Jane's Infantry Weapons.
The main sales are now in aircraft, followed by naval vessels. Principal clients are China, which has bought fighter jets, frigates and submarines, and India, with purchases of tanks, jets and the aircraft carrier.
As more companies strive for market share, the results were on display at the Russian Arms Expo 2004 here, where more than 200 companies presented their wares last week.
Products ranged from tanks and infantry weapons to artillery guns, helicopters, radar equipment, radios, body armor, life rafts and more. One booth offered equipment to detect eavesdropping bugs; another showed torpedoes designed to destroy American submarines.
Sevastyanov and his staff handed out brochures suggesting novel financing arrangements, including barter and forgiving state debt.
A firing display was held each day. Tanks drove by the reviewing stand and demonstrated their capabilities: fording a pond, shooting at targets at a distant tree line, climbing urban obstacles.
Major Neddir Hussein, an Egyptian officer, said he was impressed. He had been sent by the Egyptian Army to look for items of interest, and to meet manufacturers who might provide them.
"If we need anything later," he said, "we have all of the e-mail addresses and names and numbers for the factories."But for all of the energy surrounding sales efforts here, precisely how much business Russia is doing remains unknown. Russia's military exports are not public, and analysts say the accounting methods for figuring their sales are unknown. It is unclear, for example, whether Russia's sales figures separate sales agreements from actual deliveries, which can be considerably different. Terms of sale are also not disclosed.
The New York Times