The regular meeting of the MICom (Military-Industrial Committee) took place on April, 10. The main conclusion is that the government allocates more money for the defense than the military-industrial complex can really “digest”. According to the head of the MIcom First Vice-Premier Sergei Ivanov the rate of the contracts concluded under the defense order in 2007 lags behind the rates of 2006 by two-three months. In 2007 budget allocations on the defense exceeded those of the previous year by 302 billion rubles. However, despite of somewhat fair explanations from the government there are still enough of experts who believes that the efficiency of using defense budget is lower than it should be, especially keeping in mind the quality / volume of arms bought by the foreign customers.
According to the representatives of the Federal Service on Defense Order there are about 40 controlling organizations accountable to the Service dealing with the defense procurements and it often takes time to determine who is really responsible for delaying the conclusion of the defense contracts. The only thing certain is that it is the state management which causes the problems. This is why the state is ready to give all possible rights to the civil Agency on the Deliveries of Arms, Military, Special Hardware and Materials civil (FAMP), which is to start its work from January, 1, 2008.
However, there are more “traditional” ways of making order. Russian Auditing Chamber is going to report on the process of creation aircraft- and shipbuilding corporations in two months. Now the Chamber is checking the results of the privatization programs implemented in 2006-2007. Sergey Abramov, the representative of the Auditing Chamber in charge of the work, said the privatization programs require certain correction; however, there is no need for suspending it.
Simultaneously the Chamber is checking the activities of the governmental institutions and the commercial structures in the sphere of intellectual property. According to the preliminary conclusion federal structures being the customer of the R&D do not record the results as stipulated by the legislation which leads to the losses. Auditing Chamber accused the Ministry of Information, Agencies of Atomic Energy, Space and Industry of abusing the existing legislation on intellectual rights.
It’s worthwhile pointing out a number of recent publications in different media sources which describe the beginning of the work of the new Defense Minister Serdyukov. As one could expect former tough tax man started with financial checks. But nobody could expect that these checks would be so tough. It took him just a couple of weeks to make the media gossip about the high ranking retirements in the defense structures. The news reels are full of titles like “generals drink validol in big mugs”. Leaving aside the funny side of the thing it is tempting to predict that Russian defense sector is nearing big changes, far bigger than one could expect from the purely civil Defense Minister.