#16
Moscow Times
February 19, 2003
Weapons Exports Hit Record $4.8Bln
By Lyuba Pronina
Staff Writer
Russia's weapons exports jumped $1.1 billion to $4.8 billion in 2002 to break
the post-Soviet record for the second straight year, a top defense official said
Tuesday.
In addition to the new arms deliveries, Russia raked in a total of $4.5
billion in revenues, including earlier deals, Mikhail Dmitriyev, chairman of the
State Committee on Military and Technical Cooperation with Foreign Countries,
told reporters.
However, Russia's client base could shrink after 2004, when current deals
have been completed, because it is unlikely the industry will have been
overhauled enough to have the resources to produce new weapons systems.
Besides traditional markets like China and India, which accounted for nearly
80 percent of deliveries, Russia is increasingly looking toward other markets in
the Middle East, Latin America and Africa.
Major new clients could include Syria and Iran, Dmitriyev said.
"We have good prospects [in Damascus] as almost all military technology
there is Soviet-built," he said.
Iran is also a potential client because of its strong demand for aircraft and
air defense systems, Dmitriyev said.
He added, though, that "we have basic principles of cooperation. ... We
are not going to violate international agreements," referring to U.S. arms
sanctions.
Iran is unlikely to become a major arms client soon, Dmitriyev said.
"They will sooner become the United States' No. 3 arms client."
Dmitriyev said that although the total revenues were impressive, they were
not surprising as Russia has the capability of exporting $5 billion in arms
annually.
Exports will stay high in 2003, though likely fall slightly short of last
year's results to between $4.4 billion to $4.5 billion. The government had
planned to deliver $4.3 billion worth of arms in 2002.
Aircraft were the top item for export, bringing in 75 percent of revenues,
while naval systems made up 6 percent and air defense systems 4 percent.
State-owned arms agent Rosoboronexport accounted for most deals, with $4
billion in deliveries and $4.3 billion in revenues for 2002. Independent
exporters, however, boosted their share of total sales to 17 percent.
Russian Aircraft Corp. MiG led the way among independents, delivering $370
million worth of jets to foreign countries, including Myanmar and Yemen,
Dmitriyev said.
The Tula-based Priborostroyeniya Design Bureau followed, doubling its
targeted revenue with $350 million in deliveries. The Kolomna-based
Mashinostroyeniya Design Bureau delivered $50 million worth of arms.
Concern Antei -- which lost its license to sell independently in April and
became part of Air Defense Concern Almaz-Antei -- delivered $60 million. Antei
completed a deal to deliver Tor-M1 air defense systems to Greece.
Dmitriyev said the main task for this year is to keep traditional clients
like China and India by modernizing and boosting quality.
Maxim Pyadushkin, an expert with the Center for Analysis of Strategies and
Technologies, said arms sales figures coincided with expectations. He added,
however, that those figures would start to drop in two years after major
contracts are completed.
The industry has to undergo serious restructuring to be able to sell new
weapons systems, Pyadushkin said.
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