Procurement: Unique Russian Production Delays


December 5, 2022: Russia has been unable to deal with the impact of Western economic sanctions on its war production. Its government claims that production levels have been sustained and, in some cases, increased. This was contradicted by government-approved publications providing a different picture, one that depicted problems and failure to sustain pre-sanctions production levels.

One thing certainly has increased; military spending. While the national budget has increased by $80 billion (to $480 billion) since 2021, the defense budget has nearly doubled, going from $57 billion to $83 billion, and the budget for the national police and other internal security forces has gone from $47 billion to $77 billion. Some of this is spent in Russian-occupied Ukraine, especially Donbas and Crimea. These two areas were illegally annexed and have growing problems with local security, not all caused by Ukrainians. Another problem is that much of the increased spending was made possible by borrowed money. These loans had to be made at very high interest rates because the domestic and international financial industries agree that Russia is currently a bad credit risk.

Most of the additional defense spending has gone to replace heavy equipment losses suffered in the first few months of fighting. While government claims stress continued production of hi-tech items, the weapons and equipment most in need, like armored and unarmored vehicles as well as artillery, infantry weapons and equipment, are in short supply. Russia has been unable to replace most of the thousands of tanks and other armored vehicles lost. Same with losses of artillery, anti-aircraft weapons and EW (Electronic Warfare) systems. Basic infantry gear like protective vests, helmets are in short supply and replacements are imported from Iran. The new tactical radios the troops used in Ukraine proved to be colossal failures. Chinese commercial walkie-talkies were also imported but underperformed in combat, were unreliable and had no encryption.

Since the Ukrainians captured many of these walkie-talkies, they passed them around to their own troops so Russian discussions could be overheard. In some cases, Ukrainian troops would pretend to be Russian and report false information or, in a few cases, cause Russian artillery to fire on Russian troops. Meanwhile Ukrainian forces were using encrypted radios that provided much more reliable service using Starlink’s satellite network. Ukraine also received encrypted conventional Western tactical radios. There are also problems supplying Russian troops with accurate maps of Ukraine because Russian troops are often using Cold War era maps that contain deliberate errors to confuse enemy troops who capture these maps.

A lot of the defense budget is spent on combat aircraft and replacement parts for them. The reality is that production rates are sharply down because of component shortages. This is particularly true with helicopters, which until 2015 got engines from Ukraine. Since then, new Russian-made helicopter engines have been available only in lower numbers and reliability. Even basic infantry weapons cannot be produced quickly enough to replace the large losses in Ukraine and to partisan attacks in the occupied areas.

Tornado, the Russian version of HIMARS and GMLRS guided rockets, is also suffering from key component shortages and fewer replacement missiles. Unguided missiles are still supplied in large numbers but these have shorter ranges and are only effective when fired at large targets, like urban areas. Programs to produce engines for Russian heavy bombers have been producing fewer new engines and this is reducing air time for the heavy bombers.

Another problem is obtaining enough skilled workers. Currently the defense industries employ about two million people, most of them highly trained in specific skills. Russian defense industry employment is short 20 percent of its needed personnel. Much of this is because millions of Russians have fled the country because of the dismal and uncertain economic conditions. More recently, defense workers have to worry about being mistakenly “mobilized” for the military. This is not supposed to happen but it does and that accounts for many younger workers leaving Russia.

A lot of production delays are not going to improve as long as the war continues. While that is not what the government is saying, for the people producing weapons and those needing it, shortages are the growing reality.


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