RUSSIAN ARMS EXPORTS: THE GOOD AND THE BAD NEWS.

Mikhail Fradkov, Russia’s minister for foreign economic relations and trade, yesterday had some good things to say about the country’s weapons exports. They grew by 65 percent in 1995, and another 18 percent in 1996, he said, reaching a value of $3.6 billion. This gives Russia 20 percent of the world market and puts Russia second only to the U.S. as an arms exporter. Fradkov noted, however, that this figure applied to the volume of deliveries and not to their value, since some of Russia’s exports served to pay off old debts. He predicted that more Russian enterprises would be allowed to export their products directly as the government moves to "demonopolize" its arms trade. Russian arms dealings have to date been largely in the hands of the state-run company Rosvooruzhenie.

Former Rosvooruzhenie director Aleksandr Kotelkin — now a first deputy minister of Foreign Trade — had some more sobering news. He predicted that the export of arms and military equipment this year would be "significantly lower than last year." While he said it would be "improper" for him to discuss the reasons for this decline, he noted that it began "the very moment I left Rosvooruzhenie." Kotelkin suggested that the government’s decision to create two additional government arms export companies — Promexport and Rossiiskiy tekhnologii — was a poor one. (Russian media, November 12)

Kotelkin’s prediction might be an accurate one, even if his reasons for it are not. Moscow was hoping that Southeast Asia would become a booming market for Russian arms, but these hopes have been dashed by the region’s currency crisis. The sale of some jet fighters to Indonesia seems to be the only Russian project still on track in the region; this is a quasi-barter deal largely insulated from the currency fluctuations.

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