#12
Moscow Times
January 23, 2003
Murky Messy Procurement
By Pavel Felgenhauer

Last week, the Rnt announced with great fanfare that in 2003 it will boost the military procurement budget and R&D funding by 33 percent -- and that this will provide the derelict armed forces with new weapons while helping the destitute defense industry continue production. But what will be the real impact of this spending hike? Will it solve any of the multitude of woes that torment our military, or is it simply another propaganda stunt to placate the generals?

Overall, defense spending in 2003 has increased 21.6 percent compared with 2002. But adjusted for predicted inflation, the real increase is only 10 percent.

The process of military procurement and R&D allocation is totally nontransparent in Russia. The federal budget, approved by parliament, allocated 45.5 billion rubles for R&D, 55.2 billion rubles for military procurement and 9.1 billion rubles for repairs to existing weapons systems. (In total, 109.8 billion rubles, or $3.25 billion.)

However, the actual number, specification and price per unit of weapons to be procured is a state secret. The nature of military R&D programs, the number of such programs financed by the government and any specifics regarding how much money is allocated to each project, are also closely guarded state secrets.

In such an opaque, Soviet-style situation it does not make much sense to apply the overall national inflation index to defense procurement and R&D. It's well known that in the West generals and defense contractors often collude to artificially inflate the cost of defense projects. In Russia, with its traditions of corruption and total secrecy, the yearly inflation in the area of defense procurement and R&D is anybody's guess.

There is a lot of anecdotal evidence that in recent years billions of rubles from the defense budget have gone into rat holes, resulting in weapons the military does not need or cannot use at a time when troops in Chechnya use armaments produced 20, 30 or sometimes 40 years ago.

In the late 1990s, Russia managed to begin serial production and deployment of a new intercontinental ballistic missile, the SS-27. This ICBM was specifically designed to evade a future U.S. missile defense system. However, a U.S. missile defense system will materialize only in 20 years, at the earliest. The true architecture of such a system is unclear and it is equally unclear whether the SS-27 will be effective in dodging it.

Moreover, the SS-27 became operational at a time when U.S.-Russian relations had already drastically improved, both countries were members of the same antiterrorism coalition, and the need to invest in new ICBMs to deter a possible U.S. attack on Russia had vanished.

It's clear now that investment into rolling out the SS-27 was wrongly made, at a time when federal forces are sustaining ongoing heavy casualties in Chechnya because of a total lack of close air support at night and in bad weather conditions. This fact is now acknowledged by the top brass: Last week air force chief Colonel-General Vladimir Mikhailov announced that in 2003 "some" Mi-24 helicopter-gunships will be upgraded to give them all-weather and nighttime capabilities.

But in 2000, 2001 and 2002 military officials also announced that the all-weather Mi-24N would be deployed in Chechnya "this year." Each year, budget funds were allocated for the project but nothing happened. (The exact allocation figures and the defense contractors that received financing to produce the Mi-24N is a state secret, of course. It is known that a helicopter factory in Rostov and one in Moscow built alternative prototypes of the Mi-24N upgrade, neither of which made it to production.)

The military has procured a number of new Msta-S self-propelled howitzers that were deployed in Chechnya in 2000 and then abruptly withdrawn from the front to reserve positions in North Ossetia, because the defense industry failed to produce sufficient amounts of shells that the guns could fire. In another totally bizarre case, it is rumored that the defense industry spent more than a decade producing a system designed to divert missiles aimed at helicopters; but after deployment it turned out that the system in fact attracted enemy guided missiles rather than diverting them.

It is rumored a criminal investigation has been opened. But again, it's all secret, and no one can be certain about anything in the world of Russian military procurement. What is clear is that under the existing opaque system, the military will never be truly modernized.

Pavel Felgenhauer is an independent defense analyst.

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