The problems facing Russia’s defense industry

A couple of weeks ago, Ilya Kramnik had Viktor Murakhovsky on his show on the radio station Govorit Moskva. Murakhovsky and Kramnik are both relatively well known experts on the Russian military and the discussion turned out to be highly informative. The whole 45 minute conversation is available here in audio form, while a Russian language transcript of the first 10 minutes can be found here.

There’s a lot of interesting material here, mostly on the state of Russian defense industry and specifically on the State Armaments Program. The key point for me comes near the end, though. Murakhovsky spells out the four top priorities of SAP 2020 as follows: 1) Strategic Rocket Forces, 2) Space Forces, 3) Air Defense and 4) Command and Control. Murakhovsky argues that these are derived directly from the military doctrine, which lists NATO and its enlargement as the most significant threat facing Russia. However, since these threats have nothing to do with the actual conflicts that Russia might be engaged in in the coming years, the army is in essence spending money on armaments that it will never use (new missiles, air defense, advanced fighter planes, etc).

The Russian military’s real needs relate to the types of war in which the Russian military HAS fought in the last 20 years — local and regional wars. For this, Russia needs to procure new tanks, armored vehicles, machine guns, better personal armor, modern artillery, PGMs, etc. But the modernization of the ground forces is last on the list of priorities for the SAP. No new tanks are to be procured until 2015 or 2016. Modern ammunition will only be procured starting in 2014. Until then, 1980s era tanks will get by with 1980s era ammunition.  This is not to say that the ground forces are not getting new tanks or other armaments. They are. But what they’re getting is new equipment based on old designs, which are not truly modern weapons by any means.

A second point made by Murakhovsky is that when MOD officials talk about goals for procuring modernized weaponry over the next 10 years, they never define their terms. There’s no denominator for the percentages. In other words, 30% modern weaponry could be achieved just by scrapping a lot of old equipment, without actually producing all that much new equipment. More seriously, there’s no list of what types of armaments are considered modern. Some officials describe systems that are based on 20-50 year old designs (Msta, Akatsiia, Gvozdika) as modern. This inevitably leads to the conclusion that the MOD is implicitly defining modern equipment as any equipment that was procured in last few years, rather than equipment actually based on new designs.

Third, Murakhovsky addresses the likelihood that the SAP will actually be carried out. The problems revolve around simple arithmetic. If the total amount to be spent on rearmament over the next 10 years is about 20 trillion rubles, it is fairly simple to figure out that the MOD should be spending approximately 2 trillion rubles a year. However, the total amount spent in 2011 was 721 billion. In 2012, procurement spending may reach 1.1 trillion. And of this, only 60-65 percent goes to actual procurement of new equipment, while the rest goes to R&D and modernization of existing equipment. These are obviously quite significant sums, but the difference between the plan and actual spending is clear to see. If this persists, then the current SAP is likely to fail in much the same way as the last three SAPs failed.

In addition to the discussion of the armaments program, Kramnik and Murakhovsky also discussed the state of the Russian defense industry. A lot of the discussion focused on the successes and failures of specific companies, but several general points were made as well.

First of all, the companies that are currently in the best shape are those that were able to adjust to the post-Cold War conditions by focusing on exports. They developed modern marketing and information departments, were able to produce new designs, and were able to retain a large part of their workforce. Some examples include Russian Helicopters, Irkut, and Sukhoi, as well as several lesser known companies. On the other hand, even these companies are dependent on sub-contractors for their supply chains, and these subcontractors are often in much worse shape.

Many companies are continuing to lose skilled workers because the civilian sector can pay higher salaries. This is in addition to the disappearance of an entire age cohort (ages 30-50) who didn’t go into the field because of its lack of financing from the late eighties until the mid 2000s.

The modernization of the industry has not really begun, because the three-year federal program dedicated to this task has yet to be adopted. It is difficult to understand how the State Armaments Program can be fulfilled without the modernization of the defense industry. Until this program is adopted, it will be difficult to recruit workers with the necessary qualifications, or to modernize the equipment of many defense sector companies.

One topic that was not addressed was the extent to which the defense industry’s problems are caused by government’s refusal to allow some defense sector companies to fail. The creation of vertical sectoral holding companies has been described by some analysts as an effort to make the better-performing units support other units that are effectively bankrupt. This may be a reasonable solution if the goal is to minimize social disruption to the companies’ remaining employees, but it inevitably drags down the more successful units and makes the production of needed technology more expensive. I would have been curious to hear Murakhovsky’s take on this problem.

Of course, no one can address all the problems that face Russian defense procurement in one 45 minute radio show. The topics that were addressed make clear the depth of the problems facing Russia’s defense industry and reinforce the sense that concrete procurement targets should continue to be taken with a grain of salt.


2 thoughts on “The problems facing Russia’s defense industry

  1. Dmitry

    Very useful piece. Your work in this area is much appreciated by us non-technical experts, who try to make sense of things. You are certainly right about the kinds of weapons needed. My question is; we think the officer corps has begun to look at sub-state war as the probable contingency, but I get the impression that you think they are still years away from translating this “new thinking” into the weapons procurement process. Am I wrong?

    Dale Herspring

  2. Interesting article, but actually nothing new. Russian military industry has been struggling for 2 decades now, hence the problems with rearmament. I think its time to look at other options. There also is something what is called import. It makes perfercty good sence to start looking abroad, since Russian technology lags in many fields. I can only think of one company that has its act totally together and that is Sukhoi with the T-50 and Su-35BM as the flagships in its portfolio

    Alot of attention these days is going to the Navy, but given Russias geostrategic position and other priorities I think it’s a huge waste of time and resources to initiate such absurd projects as resurrecting the Naval Infantry, buying new submarines and wanting to do major overhauls of Kuzentsov, Pyotr Veliky and Admiral Nakhimov. The role of these service branches are of an era which is no ours. There is no need for ‘showing the flag’ since everybody already respects Russia -and has done so for the last 400 years-. Borei and Yasen are hideously expensive projects that suck away alot of defense budget funds that could more wisely be spent in other areas of the military, like the Army, which is in terrible shape. There really is no point in wanting to overhaul Orlan class ships and Kuznetsov. Especially Orlan class is a missile magnet. The cost of transforming them into stealth vessels really does not justify this redirection of funds. It would cost a fortune to get rid of all those obsolete radar installations and masts and replace them with the angular shaped Multi Mission Electronics Masts that are so charachtaristic in our 21st century. I think the Navy’s role should be moderate and purely defensive. I agree to projects like Steregushchy, Admiral Gorshkov and Grigorovich. Such vessels are fine to guard Russias maritime areas and for multinational deployment like in the Gulf of Aden. One does not need vessels like Pyotr Veliky, Admiral Chabanenko and Slava Class. Alle of these ships are reaching the very end of their operational service life -overhauls or no overhauls-, just look at their systems infrastructure and lay out. They are obsolete platforms. Russia needs to get rid of them and speed up Steregushchy, Gorshkov and Grigorovich R&D and production to replace its aging inventory.
    The Baltic Fleet may be virtually disbanded and turned into a coastal patrol force made up of Steregushchy and Skorpion class vessels. The Black Sea Fleet should be disbanded alltogether. Although Russia would be better served with a permanent presence in the Mediterrenean, it might want to reconsider in having a base in Syria. Why would anyone want to talk Russia seriously if it allies herself to a dictatorship that has no respect for human rights and is a threat to stability in that the region? Why would Russia not want to have a base in Greece? That would also give it a stronger footprint with NATO -and thus Russia would gain more influence in its decision making-.
    The Black Sea is very polluted and faces the threat of exstinction of various species, what I’d suggest is that all Black Sea nations come to terms and decide that no military shipping whatsoever is allowed in these waters. Turkey really holds the key to that.
    Why should the Pacific Fleet be beefed up? I personally do not take China seriously as a significant military threat. The living standard in China is horrible, most people live on say 1$US a day, so what ‘economic giant’ are we talking about? If China is such a force to be reckoned with, why does it beg Russia for some export-grade military technology every year, only to be copied in Chinese factories with a quality turn-out 10 times worse then Russia? If somebody can show me how China actually poses a serious threat to Russia, please feel inclined to do so.
    The Northern Fleet’s role might be redefined, nobody lives in these areas, and nobody goes there. Okay, there’s oil. So what? Can anybody actually reach it in a way that is economically feasible with the prospect of competitive market sale prices? The future of the worlds energy needs is ‘green’ (solar panels, wind mills et cetera). It’s the same with thew Arabs. They are drying out, if they’re smart they start covering the Peninsula with solar panels. So should Russia.

    Russia, being a continental nation and vulnerable to invasions due to its vast territory, must focus on control of its air space and land operations. Major contingencies are the following:
    1) In a conventional scenario it is most likely that it’s key facilities would be taken out with precision air strikes conducted by means of cruise missiles, drones and perhaps fighter jets and stealth bombers. So the first priority is rapidly re-arming the Air Defense Forces with lots of S-400’s/500’s, upgraded Pantsyr S1’s (the very same ones it sold to the emirates, with better radar systems and based on MAN SX45 trucks, which are better in terms of quality, durability, mobility and emissions output then either GAZ, Ural or KaMaz)
    2) There is no immediate land-based threat facing Russia other then insurgents in the Southern Military District. So the Army’s priorities lay in that sector. Although it is debatable whether NATO remains a threat to Russia or not. I think we all know the answer to that given it’s ungoing ever closer expansions and activities towards Russian territory.
    3) The Russian Army and Air Force do not need vast resources or expertise for global expeditionary opeartions. It must focus on maintaining it’s own territorial integrity and assitance to it’s ‘near border’ allies (Kazahkstan, Armenia et cetera). That implies much better air lift capabilities (buying factoryfresh An-124 210, speeding up the IL-214 project to rapdily replace current transport aviation inventory) and serious investments in Army equipment to be able to effectively defend the country and operate in the Caucasus and Central Asian areas as far as abroad missions are concerned.

    I think Russia would be served best by a combination of importing clearly superior foreign technology and trimming down it’s industrial base in conjuction with a focus on what it really needs. Or perhaps entirely turn over control of secondary/lesser priority factories over to the private sector and let them sort it out for themselves, for the sake of eliminating government spending on keeping them operational and diverting these funds towards key priority activities. Like building new, modern shipbuilding infrastructure and all kinds of docking facilities. Russia cant even produce its own decent 1850hp diesel engine for the T-90! Of course it could go shopping at MTU for that, but I think it’s sad that Russia seems to be incapable of producing such basic items. Equipment modernisation starts at the level of the indvidual soldier on the ground. Russia seems to be focussing on multi billion dollar projects like Borei and Yasen but chronically forgets about Ivan and his boots on the ground. The ergomically awkward and sheet metal and plastic AK is long obsolete. Russia needs a new rifle, like the fully ambidextrous, ergonomically sound, modular, aluminum and polymer built Remington ACR. Russia needs to look at the soldier first, because he is the backbone of every army. The Russian Infantryman doenst even have an optics infrastructure on his AK! Let alone has NVG’s or any means of battlefield navigation. Look at today’s Bundeswehr Infantryman, and compare him to the Russian Infantryman. The latter is not very different from his 1960’s predecessor and that is very alarming. Al that ‘big’ technology doenst make sence if ones infantry remains sticks and stones. The very first thing Russia should do is kit the Russian Infantryman out with the very best available, no matter where that equipment comes from. Be it Trijicon, ATN, EADS, FN, Remington or whatever. The next step is providing him with decent warfighting platforms such as the CV90C and rearming the Tankers with modernized T-90’s -which is an excellent machine in it’s own, and just needs a finishing touch-. Western industry could be of assistance in this area. IBD Deisenroth could do the armor package for instance, and their are plenty of optronics suppliers that could refit the turret with 4th generation systems.

    Modernisation is one thing though, another is turning Russia’s military into a professional force. This one-sided perspective on merely equipment modernisation is dangerous. Because spending money on toys is money down the drain if there’s nobody who wants to play with them. So that means getting rid of the draft altogether and trimming down the force significantly. Russia’s Army doenst need to be that large. A Mechanised (that is 1x tank, 1x armoured infantry -BMP role-, 2x motor rilfe -BTR role- battalions) brigade and an Air Assault (3 light helicopter supported infantry battalions) brigade in each Military District is sufficient, there is no point in having to want an as large as possible Army, the country is simply to big to cover each and every square inch. Hence the need for better streamlining the basic capabilities and introducing new air transportation assets and other rapid deployment means. I’m sure that all Army units can be filled by full-time professionals. Russia needs to learn the trade of modern 21st century warfare though. It needs a doctrinal shift from raw massive firepower and violence to advanced tactics and intelligent fighting. Reliable and respected Private Military Companies like SharpEnd International (Australians and New Zealanders), Algiz (Germans) and Secopex (French) could teach the Russian Army just fine. As far as personnel is concerned, the Russian military is too ‘top heavy’ and pay grades on the other hand need to rise significantly in order to attract full-time career soldiers and effectively compete with the civilian sector. No potential Private 1st Class is willing to serve in the Army for the pathetic pay cheque of 120 Euros a month. I’m sure it can all be done with the currently allocated budget, the key is transforming and downsizing the force as well as making service conditions very attractive. Russia needs to let go of the sorry conscript and hazing sorry excuse for a military, and needs to transform into a professional-well equiped-financed-organised-and billited force where there is mutual trust and comraderie through all ranks and a sence of everybody being a brother in the family. So equipment modernisation is not all, there is more to it. But onfurtanetly I dont see any hope of change for the better as long as Putin and his puppets are in charge. Russia needs a new generation in power, groups like ‘Nashe’ and people who have been abroad for a while and have better insights then Putin, the communists, the ultranationalists and all other power hungry figures who are part of that very same crew.

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