Russian Arms Exports Taking Another Jump in 2008
The collapse of the Soviet Union triggered a twin collapse for Russia’s vast arms industries. On the one hand, revelation of the state’s bankruptcy collapsed domestic arms spending. As a follow-up punch, it also collapsed aid-financed exports to dependent Soviet client states. Russia’s arms industry has been clawing its way back ever since. During the 1990s, China effectively replaced Russia as the industry’s core domestic market, underwriting the R&D base and creating a springboard for further exports.
“Russian Arms Exports Rose to $5.78B in 2004” began to chronicle that comeback. In late 2005, “Russian Defense Industry Exports Stabilizing at $6B/Year, But Structure May Change” looked at some of the adjustments being made to Russia’s export sales arrangements, even as its industry was consolidated. In September 2008, “Russia’s Military Spending Jumping – But Can Its Industry?” looked at the challenges facing a sector that has lost most of its engineers, and now faces strong civilian competition for talent.
India and China remain Russia’s largest defense customers, though India is moving to diversify its defense imports by adding Western manufacturers to its mix. Even so, a major deal with Algeria may offer long-term promise if it holds, Indonesia has stepped up as a buyer, Libya may be next, and Venezuela is positioning itself as Russia’s next big customer. Konstantin Biryulin of the Federal Service for Military and Technical Cooperation of the Russian Federation (FSMTC) recently told RIA Novosti that arms export sales volume to Q3 2008 was 23% higher than the same period in 2007, which finished at $7.4 billion. Pravda.