Algerian Arms Deal Brings Russia $7.5 billion, Gas Market Leverage

A February 2006 report noted that a $4 billion arms sale was brewing between Algeria and Russia involving fighter aircraft, tanks, and air defense systems, with the possibility of additional equipment. Those options came through the following month, as a high-level Russian delegation in Algeria closed up to $7.5 billion worth of arms contracts. The Algerian package remains post-Soviet Russia’s largest single arms deal. As an instructive comparison, annual Russian weapons export orders from all customers were just $5-6 billion per year in 2004 and 2005.

Reuters South Africa quoted Rosoboronexport chief Sergei Chemezov as saying that “Practically all types of arms which we have are included, anti-missile systems, aviation, sea and land technology.” The actual contents of that deal were murky, though DID offers triangulation among several sources to help sort out the confusion. A number of these deals have evolved over time, and other public-source information has helped to sharpen the picture a bit. The subsequent crash of Algeria’s MiG-29 deal, and its ripple effects, are also discussed:

• Detailing the Deal: The Algerian Package [updated]
• Structuring the Deal: Anatomy of a Euro Squeeze Play [updated]
• Contracts and Key Events [updated]
• Appendix A: Algeria’s Appetite for Advanced Arms
• Appendix B: Russia’s Arms Industry Woes
• Appendix C: Additional Readings

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