#12 - JRL 7067
Russia eyes Iran, Syria as arms sales rise in 2002
February 18, 2003

MOSCOW (Reuters) - Russian arms sales rose to $4.8 billion in 2002 with Moscow targeting emerging markets, including Iran and Syria, as it tries to re-establish itself as a top weapons exporter, a senior official said Tuesday.

The figure was well above 2001 levels of $3.7 billion, though sales were expected to dip this year to $4.5 billion, Mikhail Dmitriyev, head of the Committee on Foreign Military and Technological Cooperation, told reporters.

"We see Russian exports on the rise, demand is very high. These are very serious, decent results," he said, adding orders were rising.

Since the collapse of the Soviet Union in 1991, Russia has battled the United States to regain its position as the world's number one supplier of military hardware ranging from assault rifles to submarines to fighter aircraft.

It is now estimated to be the world's third or fourth ranked weapons exporter after losing many markets and government subsidies, though experts at the Stockholm International Peace Research Institute placed Russia in the top spot in 2001.

China and India are important traditional clients and the sale of the 2,000-man "Admiral Gorshkov" aircraft carrier to Delhi, due to be tied up this year, will boost figures.

Russia, while cooperating with several Western partners on modifications to existing hardware, has focused on African, Asian and Middle Eastern markets, including Syria and Iran.

"We have basic principles of cooperation which we will not go against," Dmitriyev said, adding Russia observed international sanctions in its sales programs.

"Potentially the Middle East is a very attractive market, but we must wait for political stability. If we were operating only on the basis of sales, we could have sold a lot more to this area."

Dmitriyev said Russia was pressing ahead with reform in its over-crowded, over-staffed and under-funded military sector, still heavily dependent on state subsidies, with exports still dominated by weapons agency Rosoboronexport.

Russia plans to reform its 1,700 enterprises into 50 to 70 holdings by 2006.