Anatoly Isaikin, Rosoboronexport - ФГУП «Рособоронэкспорт»
Release Date: 2008-11-13
What are the top priorities of Rosoboronexport for the coming years?The strategy of Rosoboronexport is focused on expansion of military and technical cooperation (MTC) with foreign countries and increase of Russian arms and warfare export to the world market. The corresponding tactic is to look for new partners, and enhance and expand the old contacts.
As a result of this work, our country firmly holds the second place in the world in terms of MTC volume, as recognized by the Stockholm International Peace Research Institute (SIPRI). Russia is second to USA only in terms of arms export, according to 2007 data. We generally agree with these conclusions, however, due to different calculation methods, SIPRI has a different estimation of the cost of our supplies.
Figures from another source confirm the general picture: according to the USA Congress Commission, last year USA received 36% of the world revenue from arms sales; Russia received 28% and is well ahead of Germany and France (11% and 6% respectively).
Along which directions are you planning to improve your activities and develop the Company?
The activity of Rosoboronexport is based on the necessity of ensuring a stable position of Russia on the world market of arms and military equipment, maintaining export-oriented enterprises of the military-industrial complex (MIC) of Russia and supporting R&D for manufacture of modern military products. With this purpose, we are implementing a more aggressive marketing policy to promote Russian arms on the world market, based on a thorough analysis of the interests and demands of our clients. In particular, we are ex-panding exports of spare parts and creating technical infrastructure, training and retraining centres in the importing countries. I must stress that we are dedicating special attention to improving the quality of af-ter-sale servicing of the supplied warfare and to the training of technical specialists.
Also, we are implementing a flexible price policy; we are using offset programs and barter operations with our clients. For instance, we accept payments in national export commodities, quotes for development of mineral resources and sea products, joint ventures in oil and gas, mining and fishing.
What is the geography of Russian arms exports?
Although it is wide, we actively work with new prospective clients of Russian military products. India and China used to account for the major part of our deals (up to 80%) but now we are efficiently developing other markets - primarily, Latin America: we have signed contracts with Venezuela, Mexico, Peru, Columbia, Brazil and Cuba. There are good prerequisites for arms export to Chile, Uruguay and Ecuador. We continue active cooperation with South-East Asian countries – Vietnam, Indonesia, Malaysia and Middle East. In North Africa we have a considerable volume of contracts with Algeria and Morocco. That gives an idea of the high diversification of our contracts.
Rosoboronexport also looks for partners in R&D, joint production and sales of warfare in other countries. It is increasingly difficult to produce the whole value chain of military products due to more and more sophisticated hi-tech arms, so interstate cooperation has appeared both in production and development of new samples. An example is the cooperation program of Russia and India for the 5 generation jet fighter and a mid-range military transport aircraft. This also expands distribution markets: developers or manufacturers act together in the same segment promoting their products without competition.
Another factor that promotes international cooperation is more sophisticated demand. Malaysian Air Forces ordered to install French, German and South African on-board instruments on Russian-made Su-30MCM. We equipped our best T-90 tanks with French thermal imagers for the Indian contract.
What can be said about the structure of Russian arms and warfare export?
Affordable, reliable and good quality Russian arms are demanded on the markets of many countries. Over the last years the structure of Russian arms and warfare export has remained more or less unchanged. Aviation keeps the leading position and accounts for half of the sales. It is followed by naval engineering and arms for land forces. Anti-aircraft defense equipment is much demanded. The reason is clear: nowadays war comes from the sky and if the major industrial and military sites are not protected, you are lost.
I would especially note that military products are in the top five Russian liquid commodities after oil, gas and metals. Russia offers its partners competitive projects for supplies, overhaul and upgrade of state-of-the-art Russian warfare.
Today the amount of Rosoboronexport orders accounts for about $20 bln. This will load defense and in-dustrial enterprises of Russia for the coming 5-7 years.
Are there any prospects of a sales increase in 2008?
We expect that in the current year Rosoboronexport will manage to keep the current amount of arms and war-fare sales. As it is widely known, reliability and high technical qualities of Russian arms have been proven over the time and in terms of the price-efficiency ratio Russian warfare is second to none.
How would you characterize Russian-Chinese military and technical cooperation?
Our basic idea is that military and technical cooperation of Russia and China is an important part of the stra-tegic cooperation and partnership of the two countries, based on equality, mutual benefit and respect of each other’s independence. Rosoboronexport does everything possible to fully implement these principles and it brings great results.
Over the last 15 years PRC has been one of the largest clients for Russian arms and warfare. During this period the share of export to China amounted to 40-60% of the whole Russian military export; yearly pur-chase amounts exceeded $4 bln.
Russia is the main arms and defense technology supplier for developing China. The role of Russia becomes obvious in the context of embargo that the EU introduced in 1989 for supplies of arms to Beijing and block of military and technical cooperation between PRC and Israel by the USA. During that dramatic period Russia became an exclusive source of modern arms for its Asian neighbour. It was largely due to cooperation with Russia that the National Liberation Army of China (NLAC) was re-equipped with 3rd-4th generation systems.
What were the main stages of this process?
We can trace three stages of new Russia-China relations. During the first stage (1992-1999) PRC was buying standard export modifications of Russian serial arms systems. Rich experience of their utilization in Russia allowed NLAC develop the warfare quickly and efficiently.
In 1999-2004 China showed interest to newer arms due to its better financial and economic situation and changed the armament structure of NLAC. China placed orders for upgraded aviation and sea arms systems and anti-aircraft defense equipment. China was the first customer for these systems with an excellent price-quality ratio.
After 2004 our cooperation reached the third stage: Russia continued supplies of large batches of arms to China, mainly aviation and anti-aircraft defense equipment. Military and technical cooperation of the two countries was aligned with the standards of their strategic partnership.
Today NLAC is interested in further expansion of military and technical cooperation and enhancement of after-sale servicing, development of licensed and joint production, joint R&D and cooperation in the sphere of hi-tech.
I must also note that we have diversified our export and expanded the supplies geography. Due to large contracts in Africa and Latin America and other regions, the share of PRC in Russian arms export has de-creased; it might drop from 40-50% to 30% but we are not offset by that.
What is the role of aviation in Russia-China military and technical cooperation?
Share of cooperation in the sphere of air forces remains high. Taking into account the plans of Chinese partners, military and technical cooperation can develop along the following lines: supplies of modern defense products, after-sale servicing for aviation equipment, development of joint aviation production and R&D.
According to the leading analysts, China will continue to buy military transport aircraft (strategic, fueling, AEW and on-deck aviation) and aviation engines. It opens immense prospects to develop our military and technical cooperation.
Russia is increasingly concerned about the risks of supplying China with the newest arms…
I can assure you that the military and technical cooperation system that Russia has developed with other countries allows increasing arms and warfare supplies without breaking the balance of power. It also con-cerns Russia-China military cooperation relations.
| Company: | Rosoboronexport - ФГУП «Рособоронэкспорт» |
| Position: | General Director |
| Country: | Russian Federation |