Moscow Postpones Decisions on State Armaments Program 2025

Moscow deliberately upped the ante in Donbas and filled the dog days of August with endless speculation that it might launch a full-scale invasion of Ukraine (Interfax, August 15). The cycle of troop movements, placing units on alert, and announcing snap inspections was matched by rhetoric concerning the ongoing upward trend in modernizing Russia’s Armed Forces.

However, the “threat” of war never materialized, and the guns of August gave way to the bluffs of August: a pattern of threat and coercion used by Moscow since the onset of the Ukraine crisis to maintain pressure on Kyiv and keep the North Atlantic Treaty Organization (NATO) guessing about the aims and intentions of the Russian state. Meanwhile, the defense industry—tasked with equipping this hard power option—continues to boast that despite its many inherent challenges it can produce the assets required to propel the military into a 21^st century fighting force. Russian defense contractors in particular promote the T-14 Armata tank and the T-50 (PAK FA) fifth generation aircraft; but these exist only as prototypes, with the Armed Forces patiently waiting to procure such modern systems (Nezavisimoye Voyennoye Obozreniye, September 2).

On one hand, the tendency of these military moves close to the Ukrainian border is to elicit Kyiv to cry wolf, followed by arousing speculation in other Western capitals that Moscow may directly invade its neighbor. But the Kremlin’s main message is that the Russian Armed Forces are being strengthened and prepared to meet modern challenges. Nonetheless, meeting the ambitious modernization program enshrined in the 20-trillion-ruble ($310 billion) State Armaments Program to 2020 (Gosudarstvennaya Programma Vooruzheniya—GPV) was clearly made much more difficult by economic sanctions stemming from the Ukraine conflict, and European countries backing out of arms deals with Russia. Now, despite the spin, bluster and over-estimation of the defense industry capacity, it appears that the question is finally being raised within the state apparatus as to where the money will come from in the long term to fund a perpetual military modernization. The first cracks in the official line were challenged late last month, when Moscow announced a delay to the GPV to 2025. These issues were addressed in an article in Voyenno Promyshlennyy Kuryer by Major-General (retired) Vasily Burenok, the former chief of the Ministry of Defense’s 46^th Scientific Research Institute (Voyenno Promyshlennyy Kuryer, August 30).

Burenok’s starting point was to remind his readers that the GPV is developed every five to ten years, and that the GPV to 2025 was to begin its “life” in 2016, which failed to happen. President Vladimir Putin postponed adopting the new GPV 2025 until 2018, which Burenok argues is the result of a clash between the finance and defense ministries. Burenok also notes that the national security documents set out the qualitative indicators that determine the parameters of the weapons systems of the Russian military, which include the 2015 National Security Strategy, the 2014 Military Doctrine as well as various presidential decrees, especially the “Basics of military-technical policy of the Russian Federation for the period up to 2025 and beyond” (approved on April 24, 2016). The latter document demands a “complete transition” to a qualitatively new system of weapons in the period. According the Burenok, quite apart from division over how to finance future military modernization, the fundamental error by the political leadership is to link this so closely to industrial development (Voyenno Promyshlennyy Kuryer, August 30).

Moreover, Burenok argues that the type of sequestration envisaged will impact not only on defense companies, but also on the entire state in a double hit on “National Security and Industrial Development.” The author sees the potential for cuts to the future GPV as having a knock-on effect on the economy as a whole (Voyenno Promyshlennyy Kuryer, August 30). The reason the cuts and delays to the new GPV to 2025 are important in military terms is that the defense industry can only really begin to supply the upper-end spectrum of new models in the next GPV; that means there is understanding that the existing GPV will fall short of its ambitious targets (70 percent “new” or “modern” equipment by 2020).

Oleg Falichev also notes these long-term issues facing the new GPV. The finance ministry wants to save 12 trillion rubles from the existing effort, while the defense ministry seems to actually want more, with its additional 3 trillion rubles already earmarked for modernization of production. The split between the finance ministry and defense ministry, according to Falichev stems from external factors such as the fall in oil prices, but it is likely to represent delays to producing the type of advanced assets the defense industry is currently working on (Voyenno Promyshlennyy Kuryer. August 30). There are numerous examples of widespread reluctance to find funds to finance the GPV to 2025, which will end up curtailing some of the more ambitious aspects of military modernization. Defense companies producing T-14 Armata tanks or Pantsir-S anti-aircraft systems continue to require bailouts by the government and the extension of credit lines. Russian banks have demanded that some of these companies be declared bankrupt—only to prompt state intervention to maintain their vital life support. Uralvagonzavod, the manufacturer of the future T-14 tanks, received such a bailout only last month (Nezavisimoye Voyennoye Obozreniye, September 2).

Major-General (retired) Vladimir Yatsenko, a corresponding member of the Academy of Military Science, highlights that the future introduction of the Armata platform, extending to tanks and other vehicles, will compel fresh changes to the structure of the Ground Forces and how the Russian army fights. Yet, in the meantime, the promise of procuring these advanced platforms seems quite distant. The delay to the new GPV is a sure signal that the Russian defense industry, like the wider economy, is struggling to achieve its potential (Voyenno Promyshlennyy Kuryer, August 23).

Several basic factors are coalescing to inhibit the realization of Moscow’s ambitious modernization plans. Russia’s ailing defense industry remains unreformed; the economy cannot sustain perpetual modernization; corruption is an endemic issue; and linked to this there is a lack of transparency and scrutiny into the activities of the defense industry. Unless the price of oil radically increases in the future, the Kremlin may have to cut military modernization plans to fit its economic reality.