Roscosmos Suffers From Russia’s Confrontation With the US

Publication: Eurasia Daily Monitor Volume: 18 Issue: 99

KC "Yuzhny", Roscosmos. (Source: The Moscow Times)

Dmitry Rogozin, the head of the Russian state-owned space corporation Roscosmos, confirmed during parliamentary hearings earlier this month that Western sanctions have damaged Russia’s space and orbital activities (, June 7, 2021). Before this statement, Rogozin usually made it a point to deny that the domestic space industry is suffering at all from the imposition of those sanctions. Nonetheless, the most crucial impact on Roscosmos has apparently been the severed access to advanced electronics manufactured in the United Stated and Europe. Russia has been unable to produce substitutes at home due to deficient domestic technologies, human capital, industrial equipment and financial sources.

Even the most optimistic scenarios for 2020, published three years ago, predicted that, despite efforts to supplant components it used to acquire from abroad, Russia would not be able to re-produce as much as 5.4 percent of its minimum electronic requirements across all sectors of the defense industry (Elektronika: Nauka, Technologiya, Biznes, No. 3, 2018). The proportion of un-reproducible minimally required electronics within the space industry, by its very nature, is almost certainly even higher; and there is no evidence that Russia has come close to realizing the above-mentioned best-case import-substation scenario in the first place.

The difficulties with securing space-sector electronics are exacerbated by Roscosmos’ financial problems. The state-owned space corporation was established in 2015, but its annual reports, according to the International Financial Reporting Standards (IFRS) Foundation, have been published only since 2017. Yet even if its financial data is incomplete, the corporation certainly looks to be ailing economically. For instance, Roscosmos’ revenue—which comes mainly from space programs, both civilian and military, and from manufacturing intercontinental ballistic missiles (ICBM), submarine-launched ballistic missiles (SLBM) as well as tactical missiles—has been dropping for three straight years. In 2017, total revenues for the space corporation equaled $5.214 billion (, February 4, 2019); in 2018, they rose to $6.173 billion; but by 2019, they fell back down to $5.725 billion (, September 2020). Estimates for 2020 suggest $5.100–5.200 billion, based on governmental acquisition data (, 2020) and official statements (Rossiya 24, April 1, 2021).

Meanwhile, data on consolidated net profits or losses is even clearer: in 2015, Roscosmos registered $32.6 million in net profits; in 2016, it netted $47.6 million in profits (, December 30, 2016); however, in 2017, the corporation had a net loss of $274 million (TASS, February 17, 2020). Roscosmos rebounded into the black the following year, with $40 million in net profit; but in 2019, it again registered a net loss—of $27.8 million (, September 2020). During 2020, it had a modest $4.16 million net profit (TASS, April 1, 2021). Therefore, the Russian state-owned space corporation generated more loss than profit during the six years of its existence, and it is highly dependent on direct governmental financial aid. Even a sharp reduction in the number of employees, from almost 181,000 in 2018 to 170,500 in 2020 (TASS, November 16, 2020), has yet to improve the situation.

Due to these issues, Russia can only realize a conservative program of space activity: a) maintaining its Soyuz rocket family and manned space program; b) introducing the Angara rocket family into service after more than a quarter century of development; c) launching the new RD-191 rocket engine factory (annual production capacity of 40 engines, which are a derivative of the Soviet-era RD-170); d) completing the decades-long transition from Soviet-legacy manned spaceflight technologies to a new crew spacecraft and new type of inhabited space module by 2030; and e) implementing and adapting new satellite technologies. Yet despite its limitations within this sector, Russia pledges to maintain its place among the leading spacefaring powers. To achieve this objective, Moscow has little choice but to preserve its space-sector partnerships with the West beyond the era of the International Space Station (ISS).

US and European sanctions as well as Russia’s behavior in other fields of foreign policy make this fragile space strategy well-nigh impossible to realize, however. And some recent administrative-institutional developments seem to reflect that reality. For instance, as of June 2021, the financial plan covering Russia’s space activity for 2021–2030 as well as the federal GLONASS space-based satellite navigation program for 2021–2030 curiously have yet to be published. Moreover, the non-public discussions between the Russian government and Roscosmos as well as inside Roscosmos regarding the future of Russia’s space programs resulted in several significant resignations from among the corporation’s top management (, May 18, 2020; Meduza, June 13, 2021).

Consequently, Moscow has chosen to escalate its rhetoric amidst ongoing negotiations on prolonging the ISS’s working life until 2030. The Russian side threatens to withdraw from the ISS after 2025, supposedly because of a growing number of technical accidents (RBC, April 19, 2021), despite the fact that both US and Russian experts confirmed the orbital station is technically ready to continue operating (The Washington Post, December 23, 2020). Additionally Moscow announced it would build a national man-visited (not permanently inhabited) space station during the late 2020s–early 2030s, although it is doubtful whether Russia could realize this option independently considering all of its aforementioned economic and even technical challenges (Riddle, May 31, 2021). Therefore, the proclamation more than likely reflects tough talk tactics against the United States and other ISS partners rather than a fundamental change in Russia’s space policy paradigm, based on partnership with the West for almost three decades. As such, the Kremlin crucially needs sanctions relief at least in the space sector along with guarantees that Russo-Western cooperation in space exploration will be prolonged beyond the ISS’s lifetime, notwithstanding any bilateral and multilateral political troubles on the ground. The best-case scenario for Russia here is to be invited to the US’s Artemis lunar exploration program as a participant with special status (see EDM, March 31).

If Moscow is unable to reach a new space deal with Washington, it will need to reconsider its space policy. But Russia has little wiggle room to increase federal spending on space activities to boost the industry. For instance, the government’s space program for 2016–2025 received $11.1 billion in 2016–2020 and will obtain another $10.2 billion in 2021–2025. The federal program for launch sites (2017–2025) secured $1.4 billion in 2017–2020 and will take in a further $2.83 billion in 2021–2025 (, 2016–2021). The 2012–2020 GLONASS program received almost $5.1 billion, and $6.45 billion more is planned for the GLONASS program in 2021–2030 (RBC, December 21, 2020). Thus, without an international cooperation deal, and as long as Western sanctions are maintained, prospects for Russia’s space industry look bleak.