Russia’s Conflicts on Libya

Earlier this month, the Russian Government surprised many observers by going along with UN Security Council Resolution 1973, which authorized international enforcement of a no-fly zone over Libya. Russia was initially expected to veto the resolution. Instead, Russia chose to abstain in order to ensure the protection of civilians, while its ambassador to the United Nations made statements expressing concern about how the resolution would be implemented.

In recent years, Russia has had close trade relations with the Libyan Government. In particular it has signed billions of dollars worth of arms contracts with the regime of Muammar Gaddhafi. This is the context that partially explains the removal of Vladimir Chamov, Russia’s ambassador to Libya, after he sent a telegram to Moscow arguing that allowing the UN resolution to pass would represent a betrayal of Russia’s state interests. Chamov has since returned to Moscow where he has publicly spoken out against the implementation of the no-fly zone.

In the last week, Russia’s attitude toward the no-fly zone has unexpectedly become a factor in Russian domestic politics. Prime Minister Vladimir Putin’s statement on March 21 criticized the UN resolution for getting involved in an internal conflict. In the most controversial part of his remarks, Putin argued that the resolution allowed international forces to take virtually any measures against a sovereign state, and in this he said it resembled medieval calls to crusades, “when someone called on others to go to a certain place and liberate it.”

The response from President Dmitry Medvedev was almost immediate. He argued that Russia’s abstention on the resolution vote was the proper position. Furthermore, he dressed down Putin (though not by name) by saying:

Under no circumstances is it acceptable to use expressions that essentially lead to a clash of civilizations, such as ‘crusades’ and so on. It is unacceptable. Otherwise, everything may end up much worse than what is going on now. Everyone should remember that.

And he removed Chamov from his position, essentially for public insubordination. Putin came out the next day with a statement indicating that the president is responsible for foreign policy in Russia and that he backed his president’s policies. A spokesman indicated that Putin’s previous statement was simply an indication of his own personal views rather than an official policy statement.

It may be that this conflict was yet another example of the good cop-bad cop show that the Russian leadership tandem have been putting on for the last three years. Or it may be that this is the first serious indication that Medvedev and Putin are engaged in a serious behind the scenes tussle for the right to run for president in 2012. I am still slightly on the side of the former, though a second public disagreement of this level of seriousness would be enough to convince me that this is a genuine conflict.

Rather than focus on the domestic conflict, I want to examine why Russian politicians see this conflict the way they do. I would argue that Russian leaders’ inconsistent position on Libya is essentially a case of wanting to have their cake and eat it too.

I believe that Russian leaders decided not to veto Resolution 1973 for two reasons. First, they did not want to alienate Western leaders who were pushing for the intervention. While the rapprochement with the United States is important to them and certainly played a role here, we should also remember the importance of Russian political and economic ties with European states and especially France and Italy, both of whom were strongly in favor of a no-fly zone because of the potential for a humanitarian and refugee disaster in the event of an attack by Gaddhafi’s forces on Benghazi. Second, Russian leaders did not want to be blamed for blocking the intervention if the result was a large scale massacre of civilians.

On the other hand, Russian leaders also did not want to create a new norm of international intervention in internal conflicts, particularly when these conflicts were the result of a popular uprising against an authoritarian ruler. They genuinely dislike what they see as a Western predilection for imposing their values and forms of government on other parts of the world. They remember the color revolutions in Serbia, Ukraine and Georgia, in which friendly regimes were replaced by ones that were to a greater or lesser extent anti-Russian.

Furthermore, they believe that these popular protest movements were organized and funded by Western governments, particularly the United States. This creates a certain amount of suspicion of similar protests leading to the removal of authoritarian regimes in the Middle East and North Africa, even when the deposed rulers do not have particularly close ties to Russia.

So Russian leaders are understandably nervous about the coalition’s rather expansive interpretation of Resolution 1973. They were willing to allow for the establishment of a no-fly zone in order to avert a likely massacre of civilians and to help their European partners avoid a flood of refugees on their soil. They are much less willing to see NATO forces provide military assistance to a popular uprising against an authoritarian ruler that it has traditionally supported.

I suspect that Russian leaders will increasingly begin to speak out against the military campaign if this conflict drags on. They will be especially concerned if it becomes increasingly clear that NATO air strikes are targeting Gaddhafi’s ground forces rather than limiting themselves to preventing Libyan air forces from targeting civilian areas.

This article was originally posted at Atlantic Sentinel, where I blog occasionally about Russian politics.

Golts on prospects for the Russian military

Last week I was in Russia for a conference. While there, I got a chance to meet with Aleksandr Golts, one of the most reliable Russian experts on the Russian military. Here are some thoughts on our discussion.

Manpower and the Demographic Problem

Golts noted that the greatest problem facing the Russian military is the lack of 18 year olds for conscription. Between now and 2020-2025, the cohort of 18 year olds eligible for conscription will consist of no more than 600-650,000 men per year. Meanwhile, 700-750,000 are needed to fully staff the desired million man army. And various deferments and exemptions will inevitably reduce those numbers even further. There are few good options for maintaining a conscript-based military, especially since an increase of the term of service to 18 months is politically unpalatable and could not possibly be adopted until after the 2012 elections. By that point, it might be too late to avert a collapse of the military’s manpower system. (Golts was skeptical of the need for that many people to serve in the Russian military, but that’s a separate issue.)

He argued that contract soldiers are better than conscripts anyway, because the military does not have to spend as many resources to train them, even if they only end up staying for a single term of 3-5 years.  The implication is that Golts supports the initiative to increase the number of contract soldiers to 425,000, announced at the March 18 military collegium meeting (which was the date of my interview with Golts). The idea is that this effort will succeed where previous ones have failed because of the concurrent increase in salaries for soldiers and officers.

Golts pointed out that the recent decision to partially reverse the cuts in the number of officers had two sources. First, the military had not been able to build apartments  for all the retiring officers. Second, the regime had been scared by last fall’s protest meetings that were organized by the VDV veterans. In the run-up to next year’s elections, it didn’t want to have to deal with 200,000 articulate and well-trained 30-40 year old men who had good cause to hate the regime.

Armaments

Golts was highly pessimistic about plans for rejuvenating Russian military industry, arguing that the military industrial complex (OPK) is actually regressing. Furthermore, it is not a complex at all, as the leading enterprises lack subcontractors to provide basic parts for final assembly. In the Soviet period, these parts used to be provided by civilian factories, who used to lose money on their manufacture. Now that there’s no Gosplan to force them to provide these components, this part of the process has broken down. Instead, the components are manufactured at the final assembly plant, but the process is slow and the product is of poor quality. Problems with the production of basic components has caused numerous defects in sophisticated weapons systems, including the Bulava SLBMs.

There are also significant problems with staffing. In the Soviet period, military industry used to be the best place to work, but now because of lower salaries and a lack of prestige it is much less attractive than the civilian sector.

(I should note that other analysts in Moscow — including those from CAST — disagreed with this assessment of the cause of problems in Russia’s defense industry, arguing that it’s in better condition than Golts believes and that supply chains for the more advanced enterprises continue to function.)

At the same time, for 15-20 years, there was no R&D work being done. With the exception of the fifth generation fighter plane and the Bulava, all of the plans for new weapons systems being used even now are no more than modifications of Soviet-era plans developed in the 1980s.

There are also problems with the OPK’s organization. As part of Russia’s overall recentralization under Putin, the Soviet-era sectoral ministries were largely restored as holding companies (United Shipbuilding, United Aircraft, Rostekhnologii). Many of the constituent units of these companies are disfunctional — the more effective units are used to keep the effectively bankrupt ones afloat. For example, Rostekhnologii controls 570 companies, a quarter of which are bankrupt.

Golts argues that because of all these problems, Russian OPK actually reached its maximum construction capacity back in 2005. Since then, increased financing has just led to higher prices for new state orders. Rather than attempting to reform itself, the industry is focused on coming up with new ways to absorb the vast increase in financing earmarked in GPV 2020.

Prognosis for the future

One of the main problems with the GPV, according to Golts, is that there is no prioritization — the military wants some of everything. At the same time, the Mistral deal was designed to be a wake-up call to the OPK — to make it clear to them that the military will no longer be satisfied with the old ways of doing business with defense industry. That doesn’t mean that OPK reform is inevitable; everything depends on how long Putin and his team will continue to support Serdiukov.

Unlike military reform, reform of the defense industry is likely to result in the exacerbation of undercover battles over the division of profits and resources. The leaders did not know the scope of the military’s problems when they charged Serdiukov with pursuing the reform. Now the likelihood is increasing that changes in the structure of the defense sector will affect the stability of the entire political system, because OPK reform will inevitably affect the distribution of control over lucrative rents among members of the inner circle. Previous aspects of military reform either didn’t affect rent payments or could be used to restructure rent flows away from generals and toward members of the inner circle.

One issue that will be critical for further reform but has not received sufficient attention in the domestic press is the extent to which cooperation with Western militaries is necessary for the success of Russian military reform. Serdiukov understand that he can’t really create a modern military with today’s officers. What is needed is a radical change in the military education system. To this end, he has created a working group to study foreign expertise on this issue. There is an effort underway to adopt Western models for operational planning for the Russian military. However, full adoption may have to wait for new generations of Russian officers.

Turkmenistan’s isolationist strategy eases, to a point

While I hang out in Russia, here’s another Oxford Analytica brief. This one was written right after a quick trip to Ashgabat, back in early December 2010.

SUBJECT: The shift from an isolationist foreign policy towards selective engagement.

SIGNIFICANCE: Since President Gurbanguly Berdymukhamedov took office four years ago, Turkmenistan has started to shift away from the isolationism that characterized its international relations under former President Saparmurat Niyazov. However, its willingness to engage in international cooperation remains highly selective and largely limited to the economic sphere.

ANALYSIS: Since becoming independent in 1991, Turkmenistan has largely pursued an isolationist foreign policy, as symbolized by its declaration of permanent neutrality, which was recognized by a vote of the UN General Assembly in 1995. Since then, Turkmenistan refused to join any regional alliances or organizations that have military components, though it has participated as an invited guest in meetings of the Shanghai Cooperation Organization. It is also a member of NATO’s Partnership for Peace program, having joined in 1994 prior to the neutrality declaration.

Regime Preservation. The over-arching goal of Ashgabat’s foreign policy is to preserve and stabilize the ruling regime. Although the tenure of President Gurbanguly Berdymukhamedov has led to greater openness in principle towards international cooperation, Turkmenistan remains mostly isolationist in its foreign policy, using its neutrality as a shield to avoid unwanted international entanglements. Neutrality continues to play more or less the same role under the new regime as it did under President Saparmurat Niyazov:

  • Masking weakness. It is an excuse that the country’s leaders use to mask their state’s fundamental weakness. Neutrality allows them to reject any cooperation that they fear may lead to excessive dependency on a single outside power. While Russia presents the greatest threat for them in this regard, the authorities are also concerned about the potential designs of the United States, Iran and, increasingly, China.
  • Resisting critics. Neutrality also helps Ashgabat resist criticism about domestic repression from international organizations. Calls by the EU and the Organization for Security and Cooperation in Europe for improvements in human rights have resulted in government declarations that these are efforts to interfere in the internal affairs of a neutral state.
  • Non-compliance. Likewise, neutrality is often used as justification for not complying with the demands of various international organizations or foreign states critical of the domestic political situation.

These rationales have not changed since Berdymukhamedov’s succession. While the new president is somewhat more open to the outside world than his predecessor, he remains focused on using his country’s neutrality to strengthen his hold on power in what is by many measures a weak state.

Economic engagement. At the same time, Turkmenistan has always been more open to international cooperation on economic matters. Its preference was for bilateral cooperation over participation in multinational organizations or projects, and it continues to focus on bilateral engagement. This is especially important for its economic development, as Turkmenistan lacks sufficient domestic expertise in key economic sectors. The bulk of international investment in Turkmenistan has been confined to the energy and construction industries:

  • Construction. The gleaming white marble palaces (and equally gleaming apartment buildings) that dominate Ashgabat have been built by Turkish construction companies. Foreign contractors have also been brought in to build major showpiece projects, such as the work by a French company to refurbish Ashgabat’s international  airport. Firms from Turkey, France, and Russia have been involved in the construction of facilities and infrastructure at the new Avaza resort on the Caspian Sea.
  • Oil and gas. In energy, Turkmenistan does not have the expertise for offshore oil and natural gas exploration, and has leased sectors in the Caspian to companies from a number of countries, including the United Arab Emirates, the United States, Russia, China, and Germany. Most export pipelines for Turkmen natural gas are also constructed by foreign partners. Indeed, in private, officials state that they will fill any pipeline built to their proverbial doorstep. China and Iran have recently taken advantage of this informal policy by building new pipelines to import Turkmen natural gas.

Nabucco implications. If a consortium of some kind were to build a trans-Caspian gas pipeline to connect to the Nabucco project, Turkmenistan would almost certainly sign a contract to export natural gas through it. At the same time, because of their fears of negative reactions from Russia and Iran, officials are very unlikely to take any proactive measures to join such a consortium prior to the start of construction.

This cautious approach is not limited to Nabucco; in general, Turkmenistan remains quite reluctant to participate in multinational economic projects, especially if there is a realistic chance that its participation might antagonize one of its neighbors or a regional power such as Russia or China.

Security isolationism. As for security issues, Turkmenistan’s foreign policy remains virtually unchanged from the Niyazov era. Neutrality is still the dominant paradigm, and the calculus behind this approach is largely unchanged. The authorities recognize that their country is one of the weakest states in the region: it has virtually no real capacity to defend itself in military terms, and continues to depend on its neighbors for the transit of natural gas, its main source of revenue.

This dependence was brought home to Turkmenistan’s leaders by the nine-month cut-off of exports through Russia in the aftermath of a pricing dispute in 2009. Though the opening of alternative pipelines to Iran and China has decreased Turkmenistan’s dependence on Russia, its leaders nonetheless want to ensure that no foreign power has reason to feel that Turkmenistan is turning away from it.

Limited re-engagement. At the same time, it has undertaken some bilateral initiatives that were unimaginable under Niyazov, especially in permitting overflights to supply the US war effort in Afghanistan and in accepting foreign assistance to build its maritime forces. However, these initiatives are organized through informal means and are never publicized, allowing Ashgabat to maintain at least an appearance of plausible deniability. The authorities consistently leave open the possibility that an initiative might be canceled if the international situation changes or if the government comes under criticism from more powerful neighbors.

Caspian Sea security is the one realm where Turkmenistan seems willing to participate in multilateral initiatives, albeit only on a limited basis. It has always participated in summits of the Caspian littoral states and has indicated that it would be willing to sign an agreement on maritime border delimitation as long as all five states agree to it. At the same time, Turkmenistan has consistently refused to join multinational security initiatives , such as the Russian-sponsored CASFOR and the US-sponsored Caspian Guard. Given the likelihood that joining any such organization would create problems with unaffiliated states, this stance reinforces the focus of Turkmenistan’s leaders on using foreign policy to ensure that they can maintain power.

CONCLUSION: Though Turkmenistan under Berdymukhamedov is somewhat more open to the outside world, its engagement is focused on economic projects and sectors where it lacks domestic expertise. On security issues, Ashgabat remains highly insular, using its permanent neutrality as a shield to maintain distance from more powerful neighbors out of fear that it might be turned into a satellite state.

Diplomacy comes to the fore in Russia’s Arctic strategy

I’ll be traveling this week and next, so it’s time to dig up some more Oxford Analytica articles to keep things lively while I’m gone. This one is about the Arctic and was originally published in late October, 2010.

SUBJECT: Shifts in Russia’s diplomatic and international legal strategies in the Arctic region.

SIGNIFICANCE: During most of the late 20th century, the Arctic region was primarily a zone of military interests, used by both NATO and Soviet strategic forces as bases for their nuclear submarines and as testing grounds for intercontinental ballistic missiles. With the end of the Cold War, the Arctic initially lost its strategic significance. This has changed in the last decade thanks to a combination of accelerating climate change and a rapid increase in energy prices.

ANALYSIS: The US Geological Survey estimates that up to 20 percent of the world’s remaining oil and natural gas reserves are located in the Arctic, and a relative increase in energy prices compared to the historical average has made the exploitation of these remote and technically difficult resources more cost-effective. Russia’s natural resources ministry has stated that the parts of the Arctic Ocean claimed by Russia may hold more petroleum deposits than those currently held by Saudi Arabia.

Furthermore, climate change has led to rapid melting of the polar ice cap, which has improved access to the area. While talk of new northern shipping routes coming to dominate transnational economic flows remains just talk for now, previously ice-covered areas are now accessible for natural resource exploration.

Legal status. The UN Convention on the Law of the Sea (UNCLOS), which came into effect in 1994, allows countries to claim a 200 nautical mile (nm) exclusive economic zone that extends beyond their twelve-mile territorial boundaries. Large parts of the Arctic Ocean could thus be claimed by more than one country. Several multi-national corporations are aiming to explore for natural resources in these legally contested areas, though this is complicated by the lack of a legal regime for energy exploration in this region.

Furthermore, UNCLOS grants states exclusive rights to extract mineral resources on their continental shelves up to a distance of 350 nm from shore. This has led to disputes over whether various underwater mountain ranges should be considered extensions of the continental shelf:

  • Moscow has claimed that the Lomonosov and Mendeleyev Ridges are extensions of the Russian continental shelf. In December 2001, Russia submitted a claim to the UN Commission on the Limits of the Continental Shelf, arguing that a large sector of seabed under the Arctic Ocean, extending to the North Pole, was an extension of the Eurasian continent. According to the claim, Russia should have the exclusive right to explore for natural resources in this area.
  • The Commission ruled the following year that additional research was necessary to substantiate the claim, which remains unresloved.

Energy Exploration. Russia’s main goal in the Arctic is developing energy resources. According to a policy document approved by President Dmitry Medvedev in September 2008, Russia views the Arctic as a strategic resource base. Russia has already put in place plans to exploit resources in this region — most significantly the Shtokman natural gas deposit, which contains 3.8 trillion cubic meters (tcm) of natural gas. Development of Shtokman is to be carried out by a consortium among:

  • Gazprom,
  • France’s Total,
  • and Norway’s Statoil.

However, because of the current oversupply of natural gas to Europe as a result of the global recession, development of the field has been postponed until 2016.

Territorial Claims. The authorities assess that there are significant natural gas and petroleum reserves on the Lomonosov Ridge and in the Barents Sea, near the maritime border with Norway. In order to ensure access to these resources, the government believes it must resolve maritime territorial disputes with the four other states with claims to Arctic waters:

  • Norway,
  • Denmark,
  • Canada, and
  • the United States.

Until recently, the only boundary agreement to which Russia was a party was with the United States.

‘Facts on the Seabed’. In order to press its claims to the Lomonsov Ridge, Russia launched a scientific expedition in 2007 that included a State Duma deputy who placed a titanium Russian flag on the sea bottom near the North Pole. Around the same time, Russian officials began openly to discuss increasing the military presence in the Arctic. These actions prompted concern in other countries that Russia was prepared to defend its claims by force. In the end, these concerns proved unwarranted as Russian rhetoric quieted down and its leaders began to focus on negotiated solutions to territorial disputes in the region.

Maritime boundary settlement. The Russian government has recently focused on reaching agreements with neighboring Arctic states to delimit maritime boundaries. Since the potential boundary between Russia and Denmark (via the latter’s sovereignty over Greenland) is small, the main focus has been on Canada and Norway.

Norway was particularly important because of a long-standing bilateral dispute over a 175,000 square kilometer area in the Barents Sea. The area was originally disputed because of conflicts over fishing rights, though it became more significant in recent years because of the probability that there are significant oil and gas deposits in the region. According to Russian estimates, the recoverable resources stand at 39 billion barrels of oil and 6.6 tcm of natural gas.

Russian-Norwegian cooperation. In an accord reached in September 2010, the two sides decided to divide the disputed territory more or less equally. In addition, both countries agreed to cooperate in developing the region’s natural resources and to share any mineral deposits that cross the delimitation line. Both sides plan to begin exploring for natural resources in the region once the treaty is ratified by their respective parliaments, something that was impossible while the dispute was unresolved.

The settlement of this dispute, long considered the most serious in the Arctic, has given impetus to other bilateral negotiations. In the days after the signing ceremony, Canada and Russia jointly announced that they will abide by the decisions of the UN in solving their dispute over the Lomonosov Ridge. This has engendered optimism that various territorial claims that have been (or will soon be) filed with the UN by all five Arctic states can be resolved in an orderly and peaceful manner.

Outlook. The coming years are likely to see an increase in the number of disputes over territorial claims in the Arctic. Russia is allied with Canada, Denmark and Norway in seeking to divide the region into territorial sectors, though many disagreements remain about where the lines should be drawn. They are opposed by the United States and a number of states outside the region (including the United Kingdom, China, and Sweden) that seek to establish an open-access regime modeled on Antarctica’s. Russia has been active in settling its disputes with the other regional powers in the hope of reaching a settlement without the involvement of outside actors.

CONCLUSION: Though Russia remains keenly interested in the Arctic, it will pursue its regional ambitions via negotiations and peaceful dispute resolution. Unilateral posturing and talk of building up a Russian military presence — which featured prominently in Russian Arctic policy just three or four years ago — have now fallen by the wayside, in part because the authorities regard a cooperative approach as more conducive to exploration of and investment in Arctic natural resources.

The fate of the last state armaments program

Today’s NVO includes a reminder of the fate of procurement plans included in the last State Armaments Program (for 2006-2015) as the program has passed its halfway mark.

  • 7 Borei SSBNs: none in service to date (though two have been built), because of problems with the Bulava missile
  • 6 multi-purpose attack submarines: none built to date
  • 24 surface combat ships: 2 completed in the first 5 years
  • 116 new fighter aircraft: 22 completed
  • 156 new helicopters: 60 completed
  • 18 S-400 battalions: 4 completed
  • 5 Iskander brigades: 1 completed

I’m afraid I don’t have the time to verify the numbers right now or to break this down into specific components (types of aircraft, etc), but the general picture seems more or less correct.

The article goes on to note that in 2010, Russian defense industry received its full measure of allocated funding, while completing only 70 percent of state orders in 2010. This reinforces the point being made not just by analysts, but also by top generals: the condition of the Russian defense industry has deteriorated to the point that it is unable to keep up with demand. Most of its plants are desperately in need of modernization. Without an effort along these lines, the new State Armaments Program (for 2011-2020) is likely to fail as badly as the last.

Popovkin provides more details on armaments program

Last week, Vladimir Popovkin gave a lengthy interview to VPK, in which he went into greater detail on a number of issues raised in his press conference the previous week (which was thoroughly covered here). Here are some highlights from the interview:

2010 procurement. The Russian military received the following equipment in 2010: 8 satellites, 23 airplanes, 37 helicopters, 19 air defense systems, 16 anti-aircraft radars, 6 missile launchers, 61 tanks, almost 400 armored vehicles, and 6500 automobiles. Specific types were not mentioned.

Missile and air defense systems. The military will procure 100 S-500 air defense systems and 56 battalions of S-400s (the standard deployment model is 8 launchers per battalion and 4 missiles per launcher) and equip 10 brigades with Iskander missiles by 2020.  Development of the S-500 will be completed by 2013, with deliveries to the armed forces scheduled to begin in 2015. (Note that he is quite explicit that this will be 56 battalions of S-400s (i.e. 448 units), not 56 units.

Nuclear missiles. A new liquid fueled ICBM will be developed to replace the SS-18 Satan. It will be MIRVed with 10 warheads and will be ready by 2018. Bulava testing is planned to be completed this year with the goal of commissioning the missile and the first and second Borei SSBNs by the end of the year.

Strategic Bombers. The technical parameters of the new strategic bomber (PAK DA) will be determined in the next 2-3 years. At that point, the military will make a decision about procurement. The requirements for the aircraft include  supersonic speeds, long range, stealth, and ability to use precision-guided munitions against both air and land targets.

Naval forces. A new 5th generation multi-purpose nuclear attack submarine is currently in design, as is a new destroyer. Both will be armed with versions of the  Klub missile. There are also plans to design a new ship-based supersonic missile system labeled “Tsirkon-S.”

The Mistral deal. Popovkin confirmed some aspects of the Mistral deal that I have previously reported in this blog, including that it will include SENIT-9 combat information system for each ship, though without a license. He also makes the most explicit statement I’ve seen about the reason why Russia is acquiring these ships: “It must be underlined that having the combat information system on board the Mistral turns it into a flagship/command ship.” He goes on to say that the Mistral will provide fire control for various forces in the open seas, including dividing targets among surface ships, submarines and aviation, all working on the same frequency. In other words, as I have written before, the Mistral is not being acquired for its amphibious assault capabilities, but to serve as a naval command ship for Russian forces.

Furthermore, Popovkin confirms that a secondary but significant aspect of the deal is the opportunity it provides to reconstruct domestic shipyards, which will improve their capabilities for both military and civilian shipbuilding.

Foreign imports. The production of Iveco LMV light armored vehicles in Russia under license will begin this year, with the first vehicles being completed in 2012. Eventually, the production will use 50 percent Russian domestic components.

Russia may purchase two samples each of  the French (??) Freccia infantry fighting vehicles and the Italian Centauro heavy armored vehicles for testing purposes. Other foreign purchases that are being made, including UAVs, large combat ships, sniper rifles, etc, are being made with the goal of transferring modern technologies to domestic defense industry in order to then develop these types of equipment at home in the future.

Electronic components remain the greatest problem for domestic defense industry. This will require a special subprogram of the State Armaments Program to rectify.

Financing. In the past, 70 percent of the financing for the 10 year program was left for the last five years. This time, the financing will be spread out evenly over the entire cycle.

There’s a lot of food for thought here. No real surprises, but a lot of detail to flesh out previously made statements on various procurement related topics. As with all such pronouncements, I expect many deadlines will slip, but it’s worthwhile for the moment to focus on the intentions of the MOD in its procurement decision-making.

UPDATE: As noted by a commenter, the Freccia is actually Italian. Popovkin is mistaken either about the type of IFV or the country of origin.

Mistral negotiations claim an admiral

Despite my best efforts, I can’t seem to get away from the Russian Navy these last couple of weeks. Just when I was about to move on to the air force, I got an email from a colleague doing a study of the Mistral sale who points out that negotiations have hit a snag over price disagreements. More specifically, the issue is that the Russian side expected to get the two ships for 980 million euros, while the signed agreement is actually for 1.15 billion euros. The difference consists of 131 million for logistics and 39 million for crew training.

The hangup is that Vice Admiral Borisov, the deputy commander in chief of the navy for armaments and one of the lead negotiators for the Mistral contract, signed a protocol back in December that included these two extra items, without clearing the price increase with Rosoboronexport back home. Doing so very much exceeded his authority. As a result, Borisov is now facing an early retirement (4 years ahead of schedule).

Gazeta.ru cites Ruslan Pukhov’s argument that Borisov’s removal will allow both sides to return to the negotiating table to settle the price difference issue.  My guess is that this is just a minor roadblock that will be resolved in fairly short order, as both sides have too much invested in the deal to get hung up on a 15 percent price difference. There may be a delay of a month or two in the signing of the final contract, but in the end some compromise will be made and things will get back on track.