Publication: Monitor Volume: 5 Issue: 238

Russia’s first deputy trade minister responsible for the country’s arms dealings, Grigory Rapota, suggested in comments yesterday that 1999 could prove to be a good year for Russian weapons merchants. According to Rapota, the value of Russian arms exports this year could top the US$3 billion figure, a significant rise over last year’s reported total of US$2.6 billion. The main Russian state arms trading company Rosvooruzhenie, Rapota said, expects to see final 1999 revenues of approximately US$2.5 billion. That would be up from the 1998 figure of US$2.3 billion. But the real gains in arms export sales appear to belong to the other eight arms trading concerns licensed by the Russian government to peddle weaponry, and particularly the Promeksport and Rossiiskie Tekhnologii companies. As a group, they are expected to account for more than US$500 million in sales for this year.

According to the general director of Rosvooruzhenie, Aleksei Ogarev, his company now has dealings with more than sixty countries around the globe, the most important of which are China, India, the United Arab Emirates, Cyprus, Algeria and Syria. Of this group, China and India are by far the largest purchasers of Russian weaponry, accounting between them for some 80 percent of all Russian military hardware sold over the past two years. According to Ogarev, roughly 50 percent of Rosvooruzhenie’s exports this year involved military aircraft and aviation equipment and technology, another 22 percent fell into the category of military hardware for ground forces, 14 percent involved air defense systems, and 13 percent involved various types of naval armament. Rosvooruzhenie’s total portfolio of arms orders reportedly totals about US$9 billion (Russian agencies, November 24, November 27, December 22).

Aside from its strength in China and India, Rapota and Ogarev suggest that Russia could make further inroads into the Asian arms market. But Africa reportedly constitutes one of the most promising areas for Russian arms exporters. According to Rapota, Moscow expects to sell between US$200 million and US$500 million to African countries in 2000 (Russian agencies, December 22). Indeed, increased sales to Africa this year are reportedly a significant factor in Russia’s overall rise in arms export revenues. Analysts point particularly to Russian arms sales to the Horn of Africa, where Eritrea and Ethiopia have been engaged for more than a year in a border war. Moscow has reportedly sold Eritrea six MiG-29s and Ethiopia eight secondhand Su-27 fighter jets. Those deals were engineered by Promeksport, which was set up several years ago to sell off surplus Russian weapons and spare parts. Its attraction to countries in Africa is reportedly its ability to provide cheap weaponry on short notice. As one London-based analyst observed, “Russia has vast stockpiles of arms it has to get rid of under the Conventional Forces in Europe treaty… A lot of it can be sold to other countries, though some of it is so old it’s of questionable operational value” (Wall Street Journal Europe, December 8).

Despite the glad tidings being voiced by Russian arms officials, Western analysts suggest that the longer term prognosis for Russian arms exports may not be quite so rosy. Russia is currently the fourth largest peddler of arms in the world, and its 1998 sales total of US$2.6 billion constituted less than 5 percent of arms sold worldwide last year. It has lost markets in Eastern Europe and elsewhere, where former Soviet client states are now disinclined or too poor to purchase Russian weaponry. And its efforts in other areas around the globe have been hamstrung to some degree by Moscow’s own economic problems. Russia is unable to provide the offset programs, technology transfers and co-production deals that a number of Western arms producers now offer as a matter of course. Moscow’s arms sales totals also include payments in barter and in soft currencies, a fact which will continue to constrain Russia’s efforts to revitalize its struggling defense sector (Wall Street Journal Europe, December 8; Russian agencies, December 22).

According to Viktor Klebanov, a Russian deputy prime minister and a man who also oversees Russian military-technical cooperation with foreign countries, those alleged liabilities can actually be turned into a plus for Russian arms dealers. He suggests that the strengths of Russia’s arms export establishment are three: the quality of its weaponry, the modesty of its prices, and its willingness to engage in barter deals. “We do not require much in the way of money as Western standards go,” he told a Russian newspaper. “But we do need the money right away” (Vedomosti, October 5). Time will tell whether that proves to be an advantage.