Until the mid-20th century, the military budget included only expenses for aviation and ground forces - most countries in the world compiled a “maritime” budget to finance the fleet. For the first time, the combination of all costs into one financial document was carried out in the UK, USA and USSR.
Military budgets of different countries can differ significantly from each other in size and structure. Today, the total cost of financing the armed forces reaches 2.5% of the world's gross product. The undisputed leader in recent decades in terms of the volume of the military budget is the United States, which every year increases costs for the needs of the army due to constant terrorist threats.
The military budget does not include expenses related to the financing of law enforcement agencies and the treatment of war veterans. Typically, such costs are allocated to separate items in the national budget.
Structure
Reports on the implementation of the military budget are published annually in the media of most developed countries. Based on these documents, experts identify three main positions for financing:- the state ministry of defense or another structure performing similar functions;
- military programs that are implemented by other government departments other than the Department of Defense;
- activities related to planning and preparing the state economy for work during the war.
Expenditure
Funds that come to the accounts of the Ministry of Defense from the military budget are directed to:- conducting exercises and training army and navy personnel;
- purchase of the latest models of military equipment, its maintenance in good condition (the distribution of resources between various branches of the military is carried out in accordance with the current state military doctrine);
- officer training;
- financing the work of military educational institutions that operate in the country.
- development of military infrastructure facilities (for example, modernization of air bases, construction of military camps);
- the activities of research centers developing innovative weapons;
- production of the latest weapons.
- development of mobilization plans for government agencies, large manufacturing enterprises and factories;
- accumulation of strategic reserves of raw materials for large enterprises, goods and food for the population.
According to a SIPRI report, Russian military spending exceeded $69 billion, despite falling oil prices
Anti-aircraft missile system S-400 "Triumph"
Moscow. April 24. website - Russia is among the three countries with the largest military expenditures. This follows from the annual report of the Stockholm International Peace Research Institute (SIPRI).
“Russia increased its spending by 5.9% to $69.2 billion, placing it third on the list of countries with the highest military spending,” the report said.
Russia took third place in the world in military spending after the United States and China, however, significantly behind them, notes the British broadcasting corporation BBC.
China's military spending increased by 5.4% and amounted to $215 billion in 2016, and the leaders of the US list increased spending by 1.7% to $611 billion. Global military spending in 2016 amounted to $1,686 billion, or 2.2% of global GDP.
In 2016, 55% of the Russian military budget went to finance the state arms program, the report says.
The increase in defense spending in Russia, as stated in the SIPRI report, in 2016 came against the backdrop of a sharp decline in such spending among oil-producing countries due to falling oil prices.
Defense spending in Western Europe is rising for the second year in a row - last year it increased by 2.6%. The leader in this race was Italy, whose spending increased by 11%. The same picture is observed in Central European countries, which increased spending by 2.4% last year, notes the BBC.
In February, Russian Deputy Defense Minister Yuri Borisov announced that more than 1.4 trillion rubles would be spent in 2017 on the purchase of weapons and military equipment.
“Taking into account the country’s financial and economic capabilities, more than 1.4 trillion rubles have been allocated for the implementation of defense order tasks in terms of the purchase of weapons, military and special equipment,” Borisov said in an interview with Rossiyskaya Gazeta.
As Interfax reported, in May the Ministry of Defense will send a draft state weapons program for 2018-2025 to the board of the Military-Industrial Commission. The program should be formed by July 1 and finally approved at the end of 2017, Russian Deputy Prime Minister Dmitry Rogozin said in an interview with the agency in March. “Its implementation should begin on January 1, 2018,” Rogozin noted.
Borisov stated in February that one of the priorities of the new state program is to achieve 70% of the Russian Armed Forces (RF Armed Forces) equipped with modern weapons and equipment by 2020, and to develop nuclear deterrent forces and aerospace defense assets.
“The priorities include the development of communication systems, reconnaissance and control, electronic warfare, unmanned aerial vehicle systems, robotic strike systems, modern transport aviation. Among the most important tasks is the modernization of high-precision weapons and means of combating them, personal protection systems for military personnel,” - said the Deputy Minister of Defense of the Russian Federation.
“The development of the Navy will be provided, primarily in the Arctic zone of the Russian Federation and the Far East, as well as the improvement of the technical equipment of the Armed Forces through the modernization of existing and procurement of weapons, including dual-use ones,” Borisov noted.
Russia has risen to seventh place in the world in economic militarization and fourth in security. Over two years, government spending on defense reached 5.3% of GDP, or $69.2 billion. These are the conclusions of the PwC study “Prospects for Global Defense,” which Izvestia reviewed. The company also expects to break the trend of recent years to reduce such expenses in the world. However, experts noted, defense spending is not only about military operations, but also about technological development and an important export item for the Russian Federation.
In 2014, when the previous PwC report was released, Russia's defense spending was only 4.5% of GDP. In two years, government spending on defense reached 5.3% of GDP, or $69.2 billion. PwC divides all countries into six categories according to defense strategy - from those solving such problems at the expense of allies such as Switzerland and Denmark, to global power leaders. Only Russia and the United States are included in the latter category. Both states spend more than 3% of GDP on defense and are actively involved in security projects around the world.
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Oman took first place among countries in the militarization of the economy with the sector’s share of GDP at 16.75%. The second place belongs to Saudi Arabia (10.41%), the third - to Syria (8.49%). The US is in 17th place with 3.3%.
At the same time, according to the Stockholm International Peace Research Institute (SIPRI), Russia ranks third in the world in terms of government spending on defense after the United States and China (not linked to GDP). It is also important that in 2016 all oil-producing countries reduced their defense spending due to falling prices for their main export commodity.
As the scientific editor of the Arms Export magazine, Mikhail Barabanov, explained to Izvestia, 2016 was not entirely indicative for Russia in judging defense spending.
In recent years, annual defense spending has not exceeded 2.9 trillion rubles. But last year, the Ministry of Finance paid 800 billion rubles in state guarantees for loans to enterprises of the military-industrial complex. Then the department paid an additional 200 billion for these needs. It was this trillion rubles that led to an increase in spending on national defense in 2016 to 3.9 trillion rubles,” he explained.
According to the expert, this year expenses will return to the usual 2.9 trillion rubles and this amount will not change much in the next three years. According to the expert, due to the increasingly complex geopolitical situation, Russia needs to increase defense spending - reducing it will lead to the disruption of the rearmament program.
The amount of 2.9 trillion rubles ensures a balance between military operations and the purchase of weapons, the expert noted.
Budget expenditures for defense needs could be higher, says Anatoly Tsyganok, head of the Center for Military Forecasting at the Institute of Political and Military Analysis (IPVA), colonel, professor at the Academy of Military Sciences.
For example, US spending is 10 times greater. We first need to invest in submarines in the Navy. There is also an urgent need to increase the space constellation. The third problem is personnel training. There are not enough officers, the expert explained.
However, in recent years Russia has not only been spending on defense, but also making money on it. In 2016, arms exports from Russia amounted to more than $15 billion. It is important that the export of defense industry products is high-tech and also contributes to the diversification of the Russian economy, which has been struggling with dependence on oil in recent decades.
Despite significant arms exports, “self-sufficiency” of defense budget expenditures is a pipe dream, stated Anatoly Tsyganok.
According to analysts, the world will arm itself again by 2021. PwC expects global defense spending to increase. For example, the United States, which has been cutting its military budget in recent years, will increase it to $611 billion. China and India will increase their military spending even more.
According to the analysis, the compound annual growth rate of defense spending between 2017 and 2021 should offset previous defense budget cuts, which were observed between 2012 and 2016 in 45% of the countries analyzed.
Despite expected increases in spending due to increased threats such as cybersecurity, the world's defense budgets are still under severe pressure. Among the global trends that could have a major impact on defense and security, PwC points to the shift in economic power from West to East, demographic changes and technological developments.
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Both in 2008 and now, the jump in spending growth is due to US policy. “The Donald Trump administration in its first year announced its intention to increase funding for the Pentagon. The increase in costs should ensure the combat readiness and training of military personnel who previously fell victim to the sequestration,” explained one of the authors of the report, IHS senior analyst Guy Eastman.
On December 12, President Trump signed the FY 2018 defense budget. Total spending is planned at $692 billion, of which $626 billion will go to basic expenses, the remaining $66 billion to the so-called Overseas Contingency Operations (OCO) fund, which finances the American military presence outside the country. In 2017, the American defense budget was almost $643 billion.
Following the United States, the military spending of its NATO allies is growing. Eastern Europe in general will become, according to analysts, the region of the strongest growth in defense spending. This is due to the need to fulfill NATO’s condition of allocating at least 2% of the GDP of participating countries to defense, as well as fears of the Russian threat, the IHS report notes. By the beginning of 2017, only five of the 28 alliance countries met this standard: the USA, Greece, Great Britain, Estonia and Poland. Latvia, Lithuania, Romania and Turkey will join them next year, according to IHS analysis.
Countries in the Middle East and North Africa have also increased military spending due to the difficult situation in the region, the report indicates. Saudi Arabia entered the top five world leaders - in 2017, the kingdom increased its defense budget by $0.9 billion, to $50.9 billion. Compared to 2016, Iran's military spending increased - it ranked 18th in terms of military budget in 2016 , Iran rose to 15th place in the ranking. “We expect defense budgets to continue to grow, but growth will be limited by a cautious approach to government spending,” said IHS chief analyst and report co-author Craig Caffrey.
Photo: Faisal Al Nasser/Reuters
Against the trend
Russia's defense spending continues to fall for the second year in a row, the authors of the IHS report indicate, explaining this by the worsening economic situation in the country. According to the study, in 2017, Russia dropped out of the top five countries with the largest defense spending, falling from fourth to sixth place. Russia was overtaken in this ranking by Great Britain and Saudi Arabia ($51.2 billion and $50.9 billion in constant 2017 dollars, respectively).
According to IHS, Russia's defense budget in 2017 was $47 billion compared to $52.3 billion a year earlier (in constant 2017 dollars). Report co-author Caffrey points out that Russia's defense budget was down 10% in 2017 compared to its peak in 2015. The expert predicts a further drop in Russian defense spending in 2018 by 5%. Caffrey points out that Russia will continue to modernize its military, but defense budget cuts will affect the pace at which modernization proceeds.
The previous HIS Markit annual report, published in December 2016, also ranked Russia as having the highest defense spending. Then the authors of the study noted that for the first time it dropped out of the top five, ending up in sixth place - its military budget amounted to $48.45 billion in constant 2016 dollars. However, when recalculated in constant 2017 dollars, the new report again placed Russia in the top five for 2016 with $52.3 billion.
In April 2016, another think tank, the Stockholm Peace Research Institute (SIPRI), presented different data. Russian military spending in 2016 was $69.2 billion, and the country was among the top three leaders by this indicator, second only to the United States and China. According to SIPRI, Russia also went against the trend, but in a different way: reducing military spending in oil-producing countries. The SIPRI methodology includes “all possible expenses for military activities” - from paying off the debt of military-industrial complex enterprises to banks (amounting to almost $12 billion) to benefits to veterans.
Until 2017, Russia’s military spending, especially its investment component, grew by tens of percent per year, Vasily Zatsepin, head of the military economics laboratory at the Gaidar Institute, told RBC: “As long as Western countries were gradually reducing their defense spending, Russia was increasing it.” But in the past year, according to Zatsepin, Russia has reduced its defense spending by almost 25% compared to the previous year.
The turning point, according to Zatsepin, was caused by the conflicts in Syria and Ukraine, participation in which hit the country’s economy, including due to international sanctions and “unsustainable military expenses.” As the expert notes, Russia still had to reduce defense spending when the country’s economy “no longer showed signs of growth.”
Russian President Vladimir Putin, speaking at the annual press conference on December 14, also noted that in 2018 defense spending should amount to 2.8 trillion rubles. At current exchange rates, this equates to about $47.7 billion. In June, in an interview with film director Oliver Stone, Putin spoke about his intention to reduce military spending in the next three years.
For the Russian defense industry, the outgoing 2017 was a fairly fruitful year, which was not accompanied by scandals or delays in the delivery of military products. The Russian military-industrial complex (DIC) is loaded with orders for many years, both as part of the implementation of state defense orders and the implementation of export contracts. In particular, on November 21, 2017, the head of the Federation Council Committee on Defense and Security, Viktor Bondarev, announced the volume of the agreed state arms program (GAP) for 2018-2025: 19 trillion rubles will be allocated for its implementation.
Supply of weapons and military equipment as part of the state defense order
According to Russian Deputy Prime Minister Dmitry Rogozin, the state defense order in 2017 will be completed by 97-98%. On the Rossiya 24 TV channel on Wednesday, December 27, he noted that in terms of numbers, the result will be no worse than the 2016 indicators. Earlier in February 2017, Deputy Minister of Defense of Russia Yuri Borisov, in an interview with Rossiyskaya Gazeta, said that more than 1.4 trillion rubles would be allocated to fulfill the state defense order for 2017. According to him, the bulk of the funds, more than 65%, were planned to be used for serial purchases of modern types of weapons and military equipment.
We can already say that the large-scale state weapons program until 2020 has seriously stimulated the development of the Russian defense-industrial complex. Over the past 5 years, the share of modern equipment in the Armed Forces of the Russian Federation has increased 4 times, and the pace of military construction has increased 15 times. On December 22, 2017, Russian Defense Minister Sergei Shoigu reported to the country's President Vladimir Putin as part of the final expanded board of the military department, which was held at the Strategic Missile Forces Academy. Currently, a systematic process of rearmament of the Russian army with new ones is underway; in 2020, the share of such weapons in the troops should be 70%. For example, in 2012 the share of modern weapons and military equipment in the troops was only 16%, and at the end of 2017 it was about 60%.
As part of the final expanded board of the military department, immediate plans for the rearmament of troops were announced. Thus, the share of modern weapons in the nuclear triad of the Russian Federation has already reached 79%, and by 2021, Russian ground-based nuclear forces should be equipped with new weapons at a level of up to 90%. We are talking, among other things, about missile systems that can confidently overcome even promising missile defense systems. It is planned that in 2018 the share of modern equipment in the Russian army will reach 82% in the Strategic Nuclear Forces, 46% in the Ground Forces, 74% in the Aerospace Forces, and 55% in the Navy.
Earlier, on December 22, he spoke about the main supplies of weapons and equipment to the troops based on the results of 2017. At the end of the past year, enterprises of the Russian defense industry were transferred to formations and military units Western Military District (ZVO) more 2000 new and modernized weapons and military equipment (WME). Troops Eastern Military District (VVO) received more than 1100 units of weapons and military equipment. In particular, the missile units are being re-equipped with new Iskander-M and Bastion missile systems; as a result of these actions, the combat power of the district has increased by more than 10%. To military units and formations Southern Military District (SMD) since the beginning of the year more than 1700 units of arms and military equipment, this made it possible to increase the share of modern weapons and equipment in the district to 63%. Thanks to the arrival of new military equipment, combat power Central Military District (CMD) over the past three years has grown by almost a quarter; in 2017, the district’s troops received about 1200 units of weapons and military equipment.
According to the Russian Defense Minister, more than 50 ships are being built for the country's Navy in 2017. The work is being carried out within the framework of 35 government contracts, under which 9 lead and 44 serial warships and support vessels are being built. In total, in 2017, the Navy included 10 warships and combat boats, as well as 13 support vessels and 4 coastal missile systems “Bal” and “Bastion”. The composition of naval aviation was replenished with 15 modern aircraft and helicopters. According to the minister, the Ground Forces received 2,055 new and modernized weapons, with which 3 formations and 11 military units were re-equipped, and 199 drones were also received. A special purpose division and a military transport division were formed as part of the Russian Aerospace Forces. 191 new aircraft and helicopters were received, as well as 143 air defense and missile defense weapons. In total, the Russian military-industrial complex produced 139 combat aircraft and 214 helicopters in 2017, Deputy Prime Minister Dmitry Rogozin spoke about this on the Rossiya 24 TV channel.
For the future of the defense industry, it is important to increase the output of civilian products
For now, Russian defense industry enterprises can count on state defense orders, but funds for upgrading the armed forces will not be allocated indefinitely. The more the armed forces are equipped with new military equipment, the less the army will order from the domestic defense industry. The economic and political situation in which Russia finds itself today also affects the financing of government procurement of weapons. As part of the discussion of the state weapons program for 2018-2025, which has been ongoing since the end of 2016, the initial requests of the Ministry of Defense were reduced several times. The initial requests of the military department amounted to about 30 trillion rubles, but were then reduced by the government to 22 trillion rubles, and according to the latest data - to 19 trillion rubles.
In the near future, the Russian president sees spending on the country's defense in the range of 2.7-2.8% of GDP (in 2016 the figure was 4.7%). At the same time, it is planned to solve all previously set tasks for the modernization of the Armed Forces and the military-industrial complex, reports the RT website in Russian. The Russian Ministry of Defense and the defense industry have two strategic goals. The first is to bring the share of modern military equipment in the Russian Armed Forces to 70% by 2020. The second is to increase the share of civilian products in the Russian defense industry to 50% by 2030 (in 2015 this figure was only 16%). It is obvious that the second strategic goal directly follows from the first. The higher the level of equipment of the Russian army with new military equipment, the less products the military will order from Russian enterprises.
According to the forecasts of the Ministry of Industry and Trade of Russia, by 2020 the growth in the output of civilian products by defense industry enterprises is planned to increase by 1.3 times. Most likely, such a significant jump in production is planned to be achieved through the mass production of new passenger aircraft of various classes. The Russian government is relying on the production of passenger aircraft MS-21, Il-114-300, Il-112V, Tu-334, Tu-214 and Tu-204. It is expected that by 2025 the number of passenger aircraft produced in the country will increase 3.5 times - from 30 to 110 aircraft per year. In the future, the basis for the financial stability of the defense sector of the Russian economy should be not only long-term contracts concluded within the framework of the state arms procurement program. At meetings devoted to defense-industrial complex issues, Vladimir Putin has repeatedly said that industrialists should look for new markets; this is also relevant today for Russian arms exports.
It is worth noting that a partial reorientation of the defense complex to the production of civilian products is already underway in the regions, in particular in Udmurtia, which is a recognized forge of Russian weapons. As Alexander Svinin, First Deputy Prime Minister of the Government of the Udmurt Republic, told reporters on Wednesday, December 27, at the end of 2017, the republic’s defense enterprises increased the output of civilian products by 10%. According to the official, bringing civilian defense industry products to the market is an important task for the government of the republic in the context of declining state defense orders. The Deputy Prime Minister noted that in 2018, meetings with representatives of large Russian companies will be held every two weeks, this work should help in solving the problems of finding new markets for the products of defense enterprises. In December 2017, one meeting already took place, during which the head of Udmurtia and the heads of five defense enterprises of the republic, as well as the Chepetsk Mechanical Plant, met with the leadership of the United Aircraft Corporation (UAC). The meeting discussed the industrial potential of defense enterprises, which can be used in the aircraft industry.
Export of weapons and military equipment
There are no final figures on Russian arms exports for 2017 yet. But already in March of this year, within the framework of the 14th international naval and aerospace exhibition LIMA 2017, Viktor Kladov, director for international cooperation and regional policy of the Rostec state corporation, as well as the head of the joint delegation of the corporation and Rosoboronexport JSC, spoke to journalists about that the export of Russian arms at the end of 2017 will exceed the figures for 2016. At the same time, in 2016, Russia exported arms and military equipment worth $15.3 billion.
Export supplies are a strong point of the Russian defense industry and the entire industry of the country. Russia's position on the global arms market is traditionally strong. Our country ranks second in the world in arms exports after the United States. The arms and military equipment market today looks like this: 33% comes from the United States, 23% from Russia, and China is in third place with a serious lag - 6.2%. At the same time, according to experts, by 2020 the capacity of the global arms market could grow to $120 billion. The trend in the international arms market is to increase the share of purchases of military aircraft, including helicopters, and the demand for air defense systems and marine equipment is also growing. At the same time, by 2025, according to military experts, in the structure of arms purchases by countries around the world, aircraft will already account for 55%, followed by marine equipment with a serious lag - about 13%.
As the publication writes, Rosoboronexport’s order portfolio currently exceeds $50 billion (with the execution period of concluded contracts from 3 to 7 years). Russia's top five customers are as follows: Algeria (28%), India (17%), China (11%), Egypt (9%), Iraq (6%). At the same time, approximately half of the supplied products already go to aviation, another quarter to various air defense systems. At the same time, experts note increased competition for Russian weapons from China, India, South Korea, Brazil and even Belarus.
If we talk about the most important export contracts of 2017, they include the signing on August 10, 2017 of a Russian-Indonesian agreement on the terms of Indonesia’s acquisition of 11 Russian-made Su-35 multirole fighters. According to the agreement signed by the parties, the cost of acquiring 11 Russian fighter jets will be $1.14 billion, of which half ($570 million) Indonesia is going to cover with supplies of its own products, including palm oil, coffee, cocoa, tea, petroleum products, etc. . This does not mean at all that the goods will physically arrive in Russia; as a rule, in such cases we are talking about exchange goods that can be easily sold on the markets.
The second very important contract for Russia in the defense sector concerns Turkey and its acquisition of the S-400 Triumph anti-aircraft missile system. This deal became the main news story for a long time. At the end of December 2017, the head of the Rostec state corporation, Sergei Chemezov, revealed some details of this transaction in an interview with journalists from the newspaper "". According to him, Russia's benefit from supplying Turkey with the S-400 anti-aircraft missile system is that it is the first NATO country to buy our latest air defense system. Chemezov noted that Turkey bought 4 S-400 divisions for a total of $2.5 billion. According to Chemezov, the Turkish and Russian Ministries of Finance have already completed negotiations, all that remains is to approve the final documents. “I can only say that Turkey pays 45% of the total contract amount to Russia as an advance, and the remaining 55% consists of Russian loan funds. We plan to begin the first deliveries under this contract in March 2020,” said Sergei Chemezov about the terms of the deal.
Also in December 2017, the Stockholm International Peace Research Institute (SIPRI) published a ranking of the Top 100 largest military-industrial companies in the world by sales volume in 2016 (both in domestic and foreign markets). The total volume of arms sales of Russian companies included in this rating increased by 3.8%; in 2016, they sold arms worth $26.6 billion. The top twenty largest companies included: United Aircraft Corporation (UAC) - 13th place with an estimated sales volume of $5.16 billion and United Shipbuilding Corporation (USC) - 19th place with an estimated sales volume of $4.03 billion. On the 24th line of this rating is Concern VKO Almaz-Antey with an estimated sales volume of $3.43 billion.
Pros and cons for Russian arms exports based on the results of 2017
2017 brought both positive and negative aspects for Russian arms and military equipment export prospects. The positive aspects include the successes of the Russian army demonstrated in Syria. The fighting in Syria is a very strong advertisement for Russian and even Soviet weapons. In the war in Syria, even obsolete Soviet-made weapons and military equipment performed well, once again confirming their high combat qualities, as well as an excellent level of reliability.
In total, during the period from 2015 to 2017, during the fighting in Syria, the Armed Forces of the Russian Federation checked and tested in combat conditions more than 200 types of weapons and military equipment. Basically, all tested weapons confirmed the tactical and technical characteristics declared by the manufacturers. Of course, the operation in Syria became a real benefit for modern Russian aviation equipment and combat helicopters. For example, many countries are seriously considering the possibility of purchasing the modern Russian Su-34 front-line bomber. However, different types of weapons performed well in Syria. For example, in Syria, a modernized high-precision 152-mm projectile “Krasnopol” was used; video recordings of the use of these projectiles can be found on the Internet today; this high-precision ammunition may also be of interest to potential customers.
For its development, the Russian military-industrial complex must remain competitive and look for new export markets for its products. In the context of declining government defense orders, this is especially important and relevant. Of course, Russia will not lose its second place as an arms exporter in the world in the foreseeable future, but the struggle for sales volumes in monetary terms will only increase. New “second-tier” players are entering the market, which at the same time have a well-developed high-tech industry. For example, the published SIPRI rating especially highlights the growth in the performance of military-industrial companies in South Korea, which in 2016 sold military products worth $8.4 billion (an increase of 20.6%). Russian enterprises must be prepared for the fact that competition on the international arms market will only increase.
A minus sign for Russian arms exports, and therefore for companies in the domestic defense-industrial complex, can be considered, which appeared at the end of October 2017. Under pressure from Congress, the administration of US President Donald Trump has named a list of 39 Russian defense industry companies and intelligence agencies, cooperation with which could lead to company and government sanctions around the globe. At the same time, how seriously the American leadership will approach the implementation of the new sanctions package can only be seen in the future. Experts note that the Trump government has the opportunity to both deal a truly significant blow to Russian arms exports and sabotage the introduction of strict restrictive measures.
Almost half of the newly published sanctions list were made up of enterprises of the Rostec state corporation, which is a monopoly agent for the export of Russian weapons to the international market. As Atlantic Council experts in the field of economic sanctions note: “Putting new Russian defense-industrial companies on the sanctions list will increase the potential risk for any state and any company that does business with them, forcing them to make a choice: either do business with the United States, or with these Russian structures.” Washington may use new sanctions as a possible blow to the main competitor in the international arms market. With the help of new sanctions, US authorities will be able to put pressure on third countries, their governments and companies. Therefore, the Russian military-industrial complex will have to work taking into account the possibility of these risks and increased sanctions pressure, which will not disappear anywhere in the foreseeable future.
As Ruslan Pukhov, a well-known expert in the field of weapons in Russia, director of the Center for Analysis of Strategies and Technologies, noted in an interview with journalists, Russia today is not even among the 10 leading countries in the world in terms of economics and GDP, but the country ranks second in arms trade. It is already very difficult to further increase sales volumes: “their” sales markets are saturated (“Russia has already armed half the world with cornets, “dryers” were even delivered to Uganda), sanctions are also having an impact. Therefore, we need to focus on maintaining our second place - and the task is very difficult, new approaches are needed. “I see two options. The first of them is the struggle for non-traditional budgets: not the defense ministries of potential customer states, as is mostly the case today, but the police, the Ministry of Emergency Situations, the border service and other departments where there may still be reserves for the products of the Russian defense industry. The second is the struggle for non-traditional sales markets, that is, for states where Russia has practically not worked on military equipment. One of these states is Colombia, which has always been considered an American “garden,” noted Ruslan Pukhov. It is worth noting that at the beginning of December 2017, Rosoboronexport took part in the Expodefensa 2017 exhibition in the capital of Colombia for the first time. This exhibition fits into the strategy of searching for new markets for Russian military products.
Photos used from the site rostec.ru
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