Publication: Monitor Volume: 4 Issue: 215

Russian First Deputy Prime Minister Yuri Maslyukov yesterday stepped up his criticism of the Russian state arms trade company Rosvooruzhenie and repeated his call for a change in the company’s leadership. In remarks to reporters, Maslyukov described Rosvooruzhenie’s performance as “unsatisfactory.” He also claimed, vaguely, that the company’s “economic indicators” for the first ten months of this year were some 40 percent “below plan”–a reference presumably to charges that the company’s revenues have dropped by 40 percent this year compared to 1997. Maslyukov did not name his preferred candidate for the post of Rosvooruzhenie director (Itar-Tass, November 8; Russian agencies, RTR, November 18).

Rosvooruzhenie, which enjoys a virtual monopoly on the sale of Russian military hardware abroad, is currently headed by Yevgeny Ananev. Maslyukov, a communist with long ties to the country’s Soviet-era defense enterprise directors, is reportedly hoping to weaken Rosvooruzhenie’s control over Russian arms exports and to win correspondingly greater autonomy for defense enterprises to peddle their wares abroad. Maslyukov would also reportedly like to place his press secretary, Anton Surikov, in the Rosvooruzhenie director’s post (Vremya MN, October 13; Tribuna, October 20).

Maslyukov took a major step toward increasing his influence over arms export policy when he was named chairman of a newly created government commission tasked with overseeing Russian arms sales abroad (see the Monitor, October 28). But at least one respected observer of Russia’s defense establishment believes that Maslyukov is unlikely to consolidate his authority over the country’s arms exporters.

Pavel Felgengauer, defense correspondent for the daily newspaper “Segodnya,” pointed out earlier this month that Maslyukov’s commission has yet to be assigned any real powers. Felgengauer also says that the presidential administration is disinclined to allow Maslyukov to acquire too much authority in this area. He argues, finally, that Russia’s financial crunch has harmed the operations of defense enterprises, and that Maslyukov would be better advised to seek resolution of this very real problem than to further politicize–and personalize–the issue of Russian arms sales (Segodnya, November 11).

The stakes in the ongoing political battle for control over arms export policy are considerable. Aside from the export of such natural resources as oil and gas, arms sales are one of the few areas in which Russian companies can earn hard currency revenues abroad. Rosvooruzhenie had hoped to export approximately US$3.5 billion this year–about US$1 billion more than in 1997–and much of the current debate is directed at whether the company is on line to meet that projection.

But the marketing of Russian arms and the distribution of revenues earned from them is important not only to Russia’s cash-starved defense enterprises. The manner in which the Russian government regulates and controls its foreign arms sales is important to the West as well. Washington has worked closely over the past year with Moscow in an effort to improve Russian arms export controls. It is unclear whether the more decentralized system of arms exporting which Maslyukov appears to be advocating would further those efforts.