Samuel Benett writes: Despite recent reports that Russia, along with the United States and China, is a top military exporter, Russian military equipment manufacturers are becoming less competitive in the global arms market and have been forced to withdraw from key sectors.
Prior to the fighting in Eastern Ukraine and the conflict over Crimea, Ukraine used to deliver technical components and technology to its Russian counterparts, maintaining the relationship established in the Soviet era, when certain key military industries were based in Ukraine.
Russian armored vehicles face increasing competition from Germany, China, and even Ukraine.
Despite such pessimism, there is little reason to think that Russian arms exports are going to suffer. Alexander Fomin, head of the Federal Service for Military-Technical Cooperation (FSMTC), recently said that over the past 11 years, the supply of Russian arms abroad tripled. Russia’s arms exports in 2014 exceeded $15.5 billion. The current portfolio of military orders amounts to $48 billion, according to Fomin. Responding to global instability and the proliferation of conflict, Russia has re-established military-technical cooperation and concluded contracts with Nigeria, Namibia, and Rwanda.
However, this year, exporting weapons will be more difficult, due both to sanctions and to violations of industrial integration, primarily with Ukrainian enterprises, and the resultant scarcity of parts.
Russia has to address gaps in precision electronic equipment and indigenous production.
Addressing Chinese competition, Shvarev noted that Beijing actively competes with Russia in the market segments where Russian exports are most competitive.
Ukraine’s military industry has dried up. Clearly it has suffered considerably since the start of hostilities with Russia-backed rebels, although there is still hope that Kiev can rebuild its domestic and export capacity following the cessation of hostilities. Military industry accounts for a good percentage of Ukrainian gross domestic product and involves large segments of the country’s economy.
To be fair, Russia’s defense industry has had its own issues securing sales on the global market. A few years back, Algeria refused delivery of Mig-29 Russian fighter jets due to the poor quality of the aircraft. In fact, such quality issues were severe enough that the Russian government began purchases of these aircraft in order to keep Mig manufacturers from going bankrupt. Russia also faced difficulties with its long-term client India when it came to the sale and modernization of an old Soviet aircraft carrier for Indian use.
