Re-Industrializing for Military Modernization



It’s been Golts overkill.  Despite the risk of overdosing, he has an article in Ogonek from 25 September which merits attention.

One could do much, much worse than to pick him, if you could read only one commentator.

Golts tries to explain why Russia’s OPK, its defense sector, has failed.

He gives prominent examples of defense industrial shortcomings including the most recent Bulava and Proton-M failures.  Interestingly, he says all serially produced Bulava SLBMs are being returned to Votkinsk for inspection.

Calling the list of failures “endless,” he concludes, “Production standards are falling uncontrollably not only in the space sector.”  He continues:

“The thing is not only particular failures.  Experts from the military economics laboratory of the Gaydar Institute suggest that defense order 2013 will be disrupted just as it was in previous years.  According to their data, defense order 2012 was revised and lowered at least three times.  And still it was unfulfilled by approximately 20 percent.  Accounting Chamber auditor Aleksandr Piskunov was extremely forthright in the Duma hearings:  ‘Almost one hundred percent fulfillment of state defense orders for the last 20 years hasn’t interfered with the failure of all armaments programs, with fulfilling them at 30, 40, 50 percent.'”

You may recall reading Piskunov here at the start of April.

Then, Golts notes, Putin himself cast doubt on the OPK’s ability to fulfill the current GPV.  He recalls the late July meeting when Putin indicated he’d entertain slipping ships and submarines due after 2015 into the next GPV (to 2025), so that there aren’t more “failures.”

Putin said work should be organized so producers’ capabilities coincide with the allocated funding.  Money, he said, shouldn’t be hung up in accounts [and stolen] while we wait for ships.  Golts reads this as Putin recognizing that the state of domestic industry is such that it can’t assimilate the gigantic sums allocated to it.

The defense sector has structural problems that endless calls for mobilization to face an aggressive West can’t resolve (i.e. a workforce that’s almost reached retirement age, continued aging of basic production equipment).

Golts again turns to Piskunov, who said only 20 percent of defense enterprises approach world standards in terms of technical equipment, and nearly half are in such a poor state that resurrecting them is senseless — it would be better to start from a “clean slate.”

But Golts focuses on poor coordination and cooperation among enterprises, government customers, and sub-contractors.  He turns to the familiar case of Bulava — 650 different enterprises reportedly have a hand in turning out this missile.

Most damning, Golts compares today’s “so-called united state corporations” unfavorably to Soviet-era defense industry ministries.  Ineffective and bureaucratized, the latter still managed to manufacture massive numbers of weapons.  And Gosplan matched prices for products and production by fiat.  Today’s goskorporatsii can’t.

There’s another important difference, Golts points out.  All Soviet “civilian” industries also produced arms, or parts for them.  Average citizens buying civilian goods helped finance military production with their purchases.

But the largest part of this permanently mobilized industrial system died in the 1990s and surviving parts retooled for other production.  Many in the latter category no longer wanted part of the defense order which would only make them less competitive in their main business.

Then Golts concludes:

“But it’s impossible to begin serial production of armaments without serial production of components.”

Today’s OPK chiefs don’t have the talents of some of Stalin’s industrial commissars, says Golts.  They are, however, good at blaming ex-Defense Minister Serdyukov for “destroying” the voyenpred system.

Golts really gets to it here:

“In reality producers of complex military equipment have a choice.  They can either make components in final assembly plants in a semi-artisan fashion.  Or they can buy them on the side, risking getting crap made in some tent.  It stands to reason the problem isn’t confined to recreating the military acceptance office in enterprises.  Complex chains of sub-contractors have to be established.  And, we note, even with money — this isn’t a banal task.  We’re really talking about new industrialization, the construction of new enterprises.  But just what kind?”

Golts recommends a policy of targeted and specialized re-industrialization.  Because of the expense, he says build specialized component factories to support production of critical systems where Russia is decades behind developed states — communications, reconnaissance, UAVs, precision weapons.  Russia will have to prioritize and Golts doesn’t see tanks, ships, and heavy ICBMs as priorities.  Those who pick the priorities have to withstand attacks from lobbyists for these weapons.

Golts believes Deputy Prime Minister and OPK tsar Dmitriy Rogozin knows the bind he’s in . . . and that’s why he says put off the beginning of serial production of many armaments until the next armaments program (2016-2025).

Golts concludes:

“Generally, the rearmament of the Russian Army is entering a new cycle.  Without any kind of results.”

5 responses to “Re-Industrializing for Military Modernization

  1. Nice post and thanks for pointing out the Golts’ article. While somewhat critical, I tend to think he has the ability to separate the rhetoric from the reality when discussing Russian defense matters.

    I had the opportunity this past week to listen to a panel conversation titled “Russia: A Postmodern Dictatorship?” where they discussed a recent paper by Peter Pomerantsev
    ( In discussing the Olympic construction in Sochi, Pomerantsev remarked that the entire operation was mostly a giant scam whereby friends of Putin could siphon off the nation’s wealth. I see something similar with Russia’s defense industry. The ‘honest-patriot’ Rogozin serves as a front-man for a system that allows all sorts of siloviki to grow wealthy without actually improving Russia’s defense capacity. I’m no prophet, but I could imagine that by 2020, Russia’s armed forces will look pretty much like they are today.

  2. Thanks. Rearmament has many of the same elements of scam in it. Just look at the Navalnyy calling out Rogozin over the grossly inflated price quoted for Glock pistols. Imports at that! Quite embarrassing for Rogozin.

    The armed forces will look only marginally improved, if that, by 2020. Serdyukov had the right idea for structural changes for more serious improvement, but, unfortunately, he and his team were too busy stealing to implement the cuts and reorganizations they outlined.

  3. Good god people… scams under ever stone that is turned.

    There is only two of three things necessary for corruption and that is people plus either money or power.

    Do you think it doesn’t happen anywhere else?

    Do you think the lowly official asking for a bribe to actually do something that is their job is not corruption?

    If it happens throughout society from the top to the bottom when you get the top job that anyone …even with saint at the front of their name could stop it?

    Do you think construction companies in the west are free of corruption?

    The US has what it calls lobby groups which take enormous amounts of money from big business or other rich entitites to schmoose US politicians and senators… it is open accepted practise but clearly corruption too.

    My advice is to call it something else like they do in the west… which at lower levels is not as corrupt as Russia… most government officials don’t expect or will accept bribes… the difference is that at the highest levels they are just as corrupt as anything Russia could manage but they are in denial about that.

    And for the same reason Bush jnr got two terms and Tony Bliar got re elected… whining about the leader only really makes sense if there is actually a realistic alternative… if Bush jnr had continued for two more terms I doubt the world would have noticed the difference in terms of real changes.

    Anyway back on topic… the article above is interesting… showering praise on Golts as a commentator…. and I admit most of the time I have a lot of respect for this commentator, and then saying all Bulavas serially produced are being returned for inspection… a few years back an F-15 crashed… all F-15s were grounded and a flaw was found… it was corrected and as each aircraft had the fault corrected it was cleared to fly… the aircraft is a proven front line aircraft with at that time more than 30 years operational service.

    When you have a fault with anything you can’t explain you start by being cautious and stop using them till what happened can be worked out.

    In peace time that is… you take the risk that it hasn’t been a problem so far so it might be a fairly rare failure rate problem and keep using them till it is found in time of conflict, but in peacetime it is safer to be sure.

    Then in one breath he is criticising the coordination between all the producers and subcontractors and the client, and in the next he is criticising the so called united state corporations.

    Perhaps he wasn’t paying attention but under the previous system the design bureaus operated on their own with relationships with all the different other design bureaus and factories and the situation was even worse.

    For instance MiG designed planes but didn’t design engines or radar or missiles or any of the many subsystems that had to be integrated into a modern fighter.

    Many of the problems with quality control have been solved by some companies by making components inhouse.

    At the end of the day the military has been starved of funds for over a decade and now material is starting to trickle in, design companies have been struggling to maintain their edge with a few export contracts over the last two decades but only recently real orders from the domestic market.

    The factories on the other hand have also be starved of funds and have had qualified personnel leave to get better paying jobs like taxi driver in Moscow… now that the Russian Government is spending money on new arms the situation will not change overnight… very expensive retooling, training, sub contractors, and some time and a lot of money.

    You can’t just say… OK here is a few billion roubles… Military Industrial Complex of Russia… you were starved of funds for two decades, most of your main clients in eastern europe would rather deal with the west now than with you, any products you were developing at the end of the cold war were probably being developed with Soviet republic states companies too which are unlikely to want to cooperate the same way, and the cost of living is going up, but the Russian Government still wants its weapon systems to be cheap.

    I am truly surprised there have been as few problems as their have been… Bulava is a very sophisticated missile and considering the upheaval I am not surprised it is taking longer than it would have when all the Soviet states would have been working on it together with lots of talent and uninterrupted money supply.

  4. Corruption isn’t justifiable by any sense. By painting America’s problems you do not justify existence of corruption in Russia. It’s my just two cents about one commentator here.

    In the end, Russia sure has a lot of problems, but I trust in Putin to help this new wave of enthusiasm not to be tied down by bureaucracy and corrupt oligarchs. He knows well problems of his country and I highly doubt that funds will be stolen. As was said before, change will not come overnight and deep issues that forced demise of USSR and further problems escalated by ruinous state of post-USSR era will take its sweet time to be solved.

  5. Thanks for your comments, and graceful tone.

    This is a blog about Russia’s defense policy, and what reasonably reliable Russian commentators write about it. As you clearly sense, it isn’t about America, or comparing Russia to anything (most of the time). It’s about making good information and opinion available to those not able to read the original news and other reporting. Readers comments about anything else are really off topic.

    This blog has an editorial viewpoint: generally (but far from completely) critical and skeptical of Russia.

    One might wish to be as sanguine about Putin…but he’s been in office a long time now. Funds were, are, and will be stolen. As written above, even some Russian officials have been brave enough to describe the scale of the theft. If there were lingering doubts, Serdyukov and Oboronservis put them to rest. Putin is most likely aware of problems, but he is tied down both by bureaucrats and his state oligarch supporters. It will be a long time before those problems are solved. Genuine rule of law, judicial independence, and true checks on the executive will be required to get to real solutions. All political and constitutional questions, not defense issues.

    That is an editorial opinion. Thanks again for sharing yours.

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