Russia » Economics

Who will modernize Russian Army? Russian military enterprises to go bankrupt.

37 percent of 127 enterprises of Russian Agency on Weapons have the signs of going bankrupt, Agency General Director Alexander Noskachev said to reporters.
According to him, 37 percent of the enterprises are in unstable financial situation. Head of Russian Agency on weapons said that the Agency enterprises are in debts in the sum of 45 billion roubles. “This is half of the amount of their production”, said Nozdrachev and added that the total profit  for producing goods and services by the Agency enterprises was 92 billion roubles in 2003.

Mr. Nozdrachev sees the tax policy of the state as the main cause of the problems in the domestic military-industrial establishment. Another problem – outdated equipment (95 percent of the machines are 11 years old and older). “Future of enterprises is in their technical modernization, for this reason we are directing all available resources to purchasing new equipment and developing new technologies”.

At the same time, Mr. Nozdrev mentioned that the amount of production in the Agency enterprises had 2.3 times increase in the lat five years. The average salary at the Agency enterprises increased 6.3 times in the five years and approached the average salary for the entire industrial complex in Russia.