Russia » Economics
Author`s name Dmitry Sudakov

Russia To Spend More on Purchasing Arms Abroad

The funding of the state defense order will increase in 2010. Russian Vice Prime-Minister Sergey Ivanov stated at the meeting of the Military-Industrial Committee that the state defense order will reach 1.1 trillion rubles, or 8% increase. Earlier the Vice Prime Minister talked about possible increase of defense financing by 1.2%, and Vice Prime Minister Shuvalov promised that the volume of funding will not change compared to 2009.

“You have to agree that under current difficult economic conditions the planned increase is more than significant,” Interfax quotes.

Sergey Ivanov distinguished priority areas of the 2010 state defense order. The 2009 order was 1.3 trillion rubles, so the issue is not the annual growth, but the increase against the reduced target of the defense order.

As usually, special consideration will be given to purchasing new equipment and maintenance of military infrastructure. Russia plans to spend 470 billion rubles for these purposes. This year brought in a new tendency for the defense industry complex. The Ministry of Defense is looking at the armory and equipment produced by foreign manufacturers. After the war in August 2008, there were many discussions about purchasing Israeli unmanned aircraft systems. The systems were purchased without much buzz. Shooting equipment for some of the Special Forces departments is purchased abroad. Recently it was reported that a Mistral-class helicopter carriers may be purchased in France.

This will eliminate the monopoly of Russian manufacturers in the internal Russian defense market. Speaking about the parameters of the state defense order in the Public Chamber, Russian deputy defense minister Vladimir Popovkin mentioned that the price of the Russian armory is comparable to western prices.

“The priority will be given to modern equipment rather than to new equipment. We won’t buy some units that are offered by defense manufacturers since they do not comply with the current needs of armed struggle,” Popovkin emphasized.

It seems like not all units produced by Russian manufacturers currently satisfy the “needs of armed struggle.” Hence the interest for the western technologies. Speaking about the possibility of purchasing “Mistral,” Russia insists on the construction of three more similar ships in the Russian shipyards, which will use imported technologies and Russian labor. This is not the worst case scenario, even if we look at the issue from the viewpoint of enthusiastic patriotism.

The problems of the Russian defense industry complex have been snowballing since the Soviet times and the lack of funding in the 1990s and 2000s. Now the main issues are personnel and obvious failure of R&D. Export was the only savior of Russian military plants. In 2010, 64.4 billion rubles were allocated for R&D “for all other security agencies except the Ministry of Defense,” Ivanov emphasized.

Another important area, according to Ivanov, is the sharp increase in spending for providing military officers with housing. In 2010 Russia will spend 124 billion rubles for these purposes, 95.2 billion will be spent on permanent housing, and 28.8 billion will be spent on service housing. “This is 50 billion more than in 2009, “Newsinfo reported him saying.

The rules for the use of the budget funds while performing the state defense order will be more rigid. The leaders will have to get the funds to manufacturers within 10 days. “We noticed that some leaders receive the budget funds and then “sit” on the money, invest it and get interest,” Ivanov explained.

Back in June Prime Minister Putin mentioned that “signing contracts between the Ministry of Defense and defense industry manufacturers is very slow.” By September the state defense order for 2009 had been only 60% fulfilled.

Besides the red tape, there are numerous financial violations in the defense complex. According to the Russian Federal Defense Order Service, 1,343 violations were revealed within 8 months of this year, and thr spending of 6.5 billion rubles was deemed inefficient.

Vitaly Salnik
Bigness.Ru

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