Publication: Monitor Volume: 7 Issue: 46

Among the lesser-noted results of President Vladimir Putin’s recent visit to South Korea was the signing of a preliminary agreement by which Moscow will sell several hundred million dollars worth of military hardware to South Korea in partial repayment of Russia’s US$1.8 billion debt to Seoul. Although the deal has apparently not yet been fully finalized, it appears to represent a second diplomatic triumph for Moscow at the talks between Putin and South Korean President Kim Dae-jung. The first was a Russian-South Korean joint communique in which Seoul appeared to join with Russia in an indirect condemnation of U.S. missile defense plans (see Monitor, March 1-2). But the arms deal is also being viewed as significant in Moscow for reasons unrelated to Northeast Asian security issues. Russian news sources suggest that it is also a victory for what will apparently be a new high-priority goal of Kremlin diplomacy: aggressive promotion of Russian arms exports abroad.

The Kremlin’s plans to intensify diplomatic efforts aimed at promoting Russian arms exporters–and Russian business concerns more generally–appears to have its roots in an address on foreign policy Putin delivered to top Russian diplomats in Moscow on January 26 (see the Monitor, January 29). Implementation of that policy, however, got off to a shaky start when Putin attempted, during a three-day visit to Austria last month, to push hard for a deal by which Austria would purchase thirty MiG-29 fighters. As with South Korea, the sale would have been in partial repayment of Russia’s Soviet-era debt to Vienna. The proposed deal appears to have been poorly conceived, however: The Austrians had already made clear their disinterest in Russian aircraft. The visit was thus an embarrassing failure: Putin made no progress either on the arms sale or on the debt issue–or, for that matter, on his effort to discourage discussion of possible Austrian membership in NATO (see the Monitor, February 12). Russian sources have suggested that the failure of the arms deal has since been blamed on Andrei Belyaninov, recently named head of the restructured Russian arms export company Rosoboroneksport, and that his future in that post may now be in some jeopardy (Segodnya, February 10, March 1).

Indeed, Russian sources are also suggesting that Putin’s decision late last year to restructure the Russian arms export establishment is linked to the Kremlin’s current effort to promote Russian arms abroad. In November Putin issued decrees merging what were then the state’s two top arms export companies–Rosvooruzhenie and Promeksport–and firing the directors of both. The restructured Rosoboroneksport, with Belyaninov at its head, was then subordinated to the Russian Security Council, in effect putting it under the direct control of the president’s office. The restructuring also strengthened Putin’s control by placing career intelligence officers in the three key posts atop the new arms export hierarchy: Security Council Secretary Sergei Ivanov, Belyaninov and recently named Russian Deputy Defense Minister for Industry, Science and Technology Mikhail Dmitriev (see the Monitor, November 7, 22, 2000).

Against this background, elites within Russia’s defense industrial sector are said to be delighted by the increased attention Putin is focusing on arms exports, and by the access they now have to him. They have noted, among other things, the fact that Putin is generally accompanied on trips abroad by senior Defense Ministry officers, defense industrial officials, or both. His entourage during the recent visit to South Korea, for example, included both Belyaninov and Deputy Prime Minister Ilya Klebanov, whose cabinet portfolio includes oversight of Russian defense industries (Rossiya, February 27; Segodnya, March 1). Russian defense industrial officials also cannot failed to have noticed the frequency with which the Kremlin now speaks of arms sales in connection with high-level foreign meetings, and the degree to which it appears to have prioritized arms sales in its general dealings with other countries. Those priorities were again in evidence during Putin’s visit last week to Vietnam–the second stop in his Asian tour–and have been emphasized in statements relating to upcoming Russian diplomatic contacts with Iran and China, to name just two. Arms sales also featured in talks which took place yesterday between Putin and Nigerian leader Olusegun Obasanjo (AFP, Reuters, March 6).