Publication: Monitor Volume: 4 Issue: 34

Tuesday’s Washington Times’ report that Belarus was about to sign a contract to provide tank engines and other spare parts to Iran highlights a painful truth for Russia: Its CIS partners have recently been making inroads into the shrinking world arms market at Russia’s expense. True, Moscow has promised Washington that it would stop providing arms to Iran, so this particular deal — if it comes to fruition — could be seen from Iran’s perspective as a way of circumventing this pledge. To Russian arms producers and traders, however, it will spell the lose of sorely needed dollars.

After several years of promising growth, Russia’s arms exports reportedly plummeted in 1997. Last week, Federation Council Speaker Yegor Stroev said that sales had been worth $2.6 billion last year — a drop of nearly 25 percent from 1996. These exports brought in only $1.6 billion in hard currency. Konstantin Makiyenko, deputy director of a Moscow defense think tank, noted that Belarus had contributed to this setback by selling MiG-29 jet fighters to Peru. Ukraine has also turned into an important, if still minor, player in the international arms market. Last month, the head of its state arms exporting company reported that it had signed 170 contracts in 1997 and had moved up from 30th to 20th place in the arms export rankings. (Russian and Western media, February 12-17; Reuter, January 29)

With domestic procurement virtually at a standstill, Russia’s defense establishment has placed great store on foreign sales. However, the financial crisis in Asia has snuffed out several promising deals, while Russia’s arms trading bureaucracy is in disarray. Without the purchases from China and India, last year’s arms exports would have been minuscule. Both of these countries are heavily in debt to Russia. It is questionable how long they will be able to afford importing arms on such a large scale. Iraq beckons as a lucrative market that could rejuvenate Russian arms exports–which is undoubtedly one of the considerations driving Russian policy in the Gulf. Without such a major new customer, 1998 could turn out to be an even worse year than 1997.

The Monitor continues its survey of Ukraine’s political parties and blocs in the runup to the parliamentary elections. (See the series of profiles in The Monitor, November 6, 17, and 20; December 5, 12, and 24, 1997; January 8, and February 4 and 10, 1998.)

Ukraine’s Political Landscape: the Diehard Soviet Movements.