We spend a lot of time talking about U.S. and European defense companies and how they market weapons and equipment overseas. But how is Russia viewing the global arms market? It’s an opaque area that’s difficult to track, but it doesn’t look good.
Enter Sergey Denisentsev of the Moscow-based Center for Analysis and Technology, and a visiting fellow at the Center for Strategic and International Studies in Washington. The expert in the Russian arms trade was in the U.S. last week talking about Moscow’s stalled defense exports.
Arms exports rose rapidly from $6.12 billion in 2005 to $15.7 billion in 2013, according to data presented by Denisentsev. Those figures dipped to $14.5 billion in 2015 and then climbed back to $15 billion in 2016.
“[A]fter a fairly long period of growth from 2005 to 2012, Russia’s arms exports are flat,” he said. China and India accounted for about half of those exports. Russia’s willingness for tech transfer helped it win some business, particularly in India. China “essentially kept the defense industry afloat in the 90s,” Denisentsev said, buying Su-27 fighters, warships, and other weapons developed by the Soviet Union.
There has been a downside to all of the tech transfer. “In some areas the student has already surpassed the teacher,” Denisentsev said. “Russia has completely lost its share of the Chinese market for warships to Chinese shipbuilders.” Russia last delivered a destroyer to China in 2006, he said, while India has ramped up its indigenous production of Russian-designed systems. Now, New Delhi wants more high-tech weapons to come from the U.S. and Europe.
Tech transfer is a hot topic of debate today as U.S. arms makers try to sell weapons overseas. We have often discussed tech transfer and co-production as being wanted by Middle Eastern nations and India. Denisentsev said China is now only interested in more advanced weapons like the Su-35, S-400 surface-to-air missiles and aircraft engines. Other reasons for the stalled exports: the low price of oil, Asian defense companies stepped up their own exports, the collapse of Gaddafi’s Libya (a major importer of Russian weapons), U.S. and European sanctions on Iran, civil war in Syria, and sanctions on Russia.
Plus the Russian military has had a greater need for arms of late, Denisentsev said, which is a good segway to talk about Syria. For the most part, older Russian technology is being used there. More advanced weapons, like cruise missiles, are not exportable. “In general, the Syria campaign has a very limited effect on the Russian arms export outlook for the time being,” he said. Still, Russian companies have pointed to the use of their equipment in marketing arms to potential buyers. Denisentsev noted that the Su-34’s performance in Syria attracted Algeria to buy the planes. “For now, we don’t see any tangible effect of the Syrian campaign on Russian defense exports,” he said.
What about the future of Russian arms deals? New weapons that “represent a new level of technology” — like a fifth-generation fighter jet, tanks, and surface-to-air missiles — entering service in the Russian military “could help Russia to reboot it’s arms trade with its two main partners, China and India,” Denisentsev said. “But the potential for these new system exports is not obvious because they are expected to be expensive … near the western price tags.”
Some Russian experts are also critical on the new arms, Denisentsev said, because they do not follow the traditional Russian model of building “cheap and deadly” weapons. That means Russia needs to focus on new, niche markets and joint development programs, particularly with China and India.
“For now there is not enough political view and military need to launch proper research-and-development projects,” he said. “Over time, however, if the current political situation will deteriorate and there is growing tension between Russia and the west or between the United States and China, the situation could force the Russian and Chinese defense industries to pool their force and resources. That, however will lead to the risk of the Russian defense industry losing its self sufficiency.”
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Justin explained the situation to the Marlins. They graciously agreed to help. The souvenir shop didn’t have polo shirts, so I opted for 2017 All Star Game quarter-zip. Before I know it, I found myself in a quiet conference room under Marlins Park talking about the MOAB strike in Afghanistan. As for the game, the Mets won 9-8 in 16 innings. All-in-all, a good, productive night.