Tag Archives: GOZ

The Defense Sector’s Systemic Failure

Posted on March 2, 2011 | Leave a comment

In today’s Nezavisimaya gazeta, Vladimir Mukhin concludes the OPK’s “systemic failure” has left the military without new weapons.  His article also says a lot about the base upon which the Kremlin intends to build a modernized economy.  But perhaps the OPK is in worse shape than other sectors . . .

Defense Minister Serdyukov apparently sent President Medvedev a report explaining why some very important armaments and military equipment were not delivered in 2010.

According to Boris Nakonechnyy, Deputy Chief of the Directorate of State Defense Order Formation in the Defense Ministry’s Armaments Department, Serdyukov proposes that the Supreme CINC use “measures of administrative effect against enterprise directors who have violated the timeframe for fulfilling the Gosoboronzakaz.”  He doesn’t say if this means fines, arrest, etc.  Specifically, Nakonechnyy said, in 2010, a proyekt 20380 corvette, two proyekt 955 submarines, one proyekt 885 submarine, 3 of 9 planned Yak-130 trainers, and 73 of 151 expected BMP-3s  were not delivered.

Mukhin calls this an obvious failure, and estimates at least 30 percent of the 2010 GOZ wasn’t realized.  He contrasts this with President Medvedev’s Poslaniye, in which he said he was sure defense expenditures in the 2011-2013 budgets would allow the Armed Forces to buy the new armaments they need.

Speaking to defense enterprise directors in Sverdlovsk Oblast, Nakonechnyy said the cause of failure in the Gosoboronzakaz is poorly organized work by enterprises and designers:

“Signing contracts . . .  an enterprise director assumes quite serious obligations.  And, signing such a state contract, he is correspondingly bound to meet these obligations.”

But, he says, in a number of OPK enterprises, this isn’t happening.

Mukhin turns to the directors’ side of the story.

Military plant directors in the Urals unanimously announced that “contracts are concluded in such a way that we will always be in extremis.”  They say they’ve made proposals about contracts, but none of them are considered.  They also point to the Defense Ministry’s significant indebtedness to enterprises for completed work.  This supposedly amounts to 228 million rubles in the Urals.  Most of all, managers worry about uncertainty in this year’s GOZ, and about the Defense Ministry’s intention to pay 2009 prices this year.

The head of the Sverdlovsk producers’ group says:

“To this point, there are no agreements, no money.  All this pushes us toward emergency work in the future.  The pricing policy is driving us into a corner.”

Another general director complains of low profitability in the OPK.  Only 6-7 percent, according to him.  The Defense Ministry is allowing growth in materials costs of not more than 1 percent this year, and this will erode profitability further.

Military analyst Vladimir Dvorkin says a third of defense enterprises are really bankrupt.  Investment in R&D is ten times lower than in developed countries.  Investment in basic capital and personnel training is five times lower.  He continues:

“Fixed capital assets at OPK enterprises are two-three times, and labor productivity five-ten times lower than in developed countries.  More than 70% of technologies supporting production demands are worn-out or obsolete.  More than half the machine tool inventory is 100% worn-out.  The average age of OPK workers is more than 50, in defense NII [scientific-research institutes] it approaches 60.”

Dvorkin thinks the Armed Forces can’t be brought to the level of the world’s leading armies without extraordinary efforts.  Priorities need to be set for the armaments development system in order to concentrate efforts on a limited list of systems.

Mukhin thinks it might be too late since Medvedev’s already signed GPV 2011-2020.  But whether its priorities will be met is another thing.  So far in post-Soviet history, not one GPV has been fulfilled, Russia’s defense industry continues to decline, and global restructuring in military production still hasn’t been noticed in Russia.

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Corruption and the GPV

Posted on March 1, 2011 | 1 comment

This morning’s press included various accounts of statements from Igor Korotchenko or in the name of the Defense Ministry’s Public Council, on which Korotchenko serves, about mitigating the impact of corruption on the State Program of Armaments (GPV), 2011-2020.

RIA Novosti quoted Korotchenko to the effect that the rearmament program will only be successful with strict financial accounting and effective measures against corruption in the State Defense Order (GOZ or гособоронзаказ).

He said Defense Minister Serdyukov is taking steps to ensure that resources are used as intended, including the establishment of a Military Products Price Formation Department and the resubordination of the Federal Arms, Military, Special Equipment and Material Resources Supply Agency (Rosoboronpostavka) to the Defense Ministry.  But the latter step was done over six months ago, and not much has been heard about it since.

Novyye izvestiya and Novyy region quoted the Public Council’s statement:

“But for the army to receive all this [equipment in the GPV], money is simply not enough – it’s necessary to make things so that Defense Ministry generals, who to this point were occupied simultaneously with orders and purchases of weapons, don’t get access to money, are occupied only with formulating lists of everything needed for the conduct of modern war, but the function of monitoring prices and purchases should be transferred to other departments.  Otherwise, government resources allocated to the GPV will get ‘sawed off,’ placing this program in jeopardy.”

Those are, of course, the jobs of the new Price Formation Department and Rosoboronpostavka.  Serdyukov’s tax service veterans are supposed to free the payments system from graft, and use their experience to uncover complex theft schemes.  Military prosecutors are also expected to be more active here.  Main Military Prosecutor (GVP) Sergey Fridinskiy told Novyy region about prosecutors’ work in uncovering the theft of 6.5 billion rubles’ worth of military budget.  He claimed his prosecutors have stopped 240,000 violations, suspended 12,000 illegal actions, held 40,000 people to account, and returned 4 billion rubles to the treasury.  But it’s not clear what time period he’s talking about.

RIA Novosti recounted Korotchenko’s comments about preventing corruption in military RDT&E:

“Special control needs to be provided on scientific-research work and justification of expenditures on it, but also on the development of new types of armaments, since it’s precisely here that opportunities for different types of financial machinations and abuse exist.”

Of course, reminds RIA Novosti, RDT&E only amounts to 10 percent of the GPV.  Bigger chances for theft exist in procurement, which is supposed to be 78-80 percent of the rearmament plan.

According to Novyye izvestiya, on the procurement side, Korotchenko says, in past years, a minimum of 45-50 percent of money for arms simply ended up in someone’s pocket.  For this reason:

“For the very same money, Russia buys 14 tanks a year, and India 100.  This led the country’s leadership to the kind of thinking reflected in the Defense Minister’s authority to reorganize the entire purchasing scheme.  This time [the new GPV] 19 trillion rubles are at stake.  Can you imagine with what interest the ‘market players’ are waiting for them?  But the state machinery is running: many OPK directors are already being removed, in the case of the director of one of the system-forming design bureaus, suspected of stealing money from a state order through offshore shell companies, an investigation is being conducted, and other criminal cases in orders-purchases from previous years are also possible.”

The nongovernmental National Anticorruption Committee says the average kickback in civilian contracting is 30 percent, but, in defense, it’s 60 to 70 percent.  Because arms prices are secret [and hard to determine anyway], no one knows how much this is.  But common sense says this makes everything cost nearly twice what it should.

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The Foggy Goal of the GPV (Part II)

Posted on February 15, 2011 | Leave a comment

Sovershenno sekretno’s Vladimir Spasibo describes the early post-Cold War process of mergers and consolidations in the Western defense industries, and then asks:

“And how are our integration processes going?  By altogether different schemes.  Mainly by creating industrial ‘kolkhozy.’”

His example is the United Aircraft Corporation (UAC or OAK) which conglomerated most Russian aircraft designers and producers.

Spasibo says this consolidation should have eliminated problems with skilled personnel shortages, technology losses, obsolete production lines, low labor productivity, product quality, duplicative development, and excess capacity.  But it didn’t.

Spasibo examines the labor force in the OPK’s aircraft industry.  He claims with VVS purchases of 380 billion rubles per year, and productivity of 6 million rubles per worker (three times less than Boeing’s rate), there should be 66,000 workers in Russia’s industry, but its 6 lead plants have more than 100,000 workers, and the aviation industry overall has more than half a million.

He looks then at the labor force for the entire OPK.  With purchases totaling 19 trillion rubles, with modest productivity of 3 million rubles per worker over ten years, the OPK should have 630,000 workers, but Rostekhnologii General Director Sergey Chemezov says there are now 1.2 million.  And Spasibo concludes good specialists won’t work for what companies are able to pay as a result.

Chemezov has pointed out that only 36 percent of Russia’s “strategic enterprises” are financially stable; at the same time, 30 percent show all the signs of bankruptcy.  The situation is particularly bad in the munitions and special chemicals sector, where nearly 50 percent of companies look like potential bankruptcies.

Spasibo adds that only 15 percent of the OPK’s technologies meet world standards, 70 percent of basic production assets are outdated, and the equipment renewal rate is only 3-4 percent.  He says:

“To count on these companies being able to produce the weapons required is laughable.  But they will absorb the money they receive.  Naturally, without any particular result for the reforming Armed Forces.”

Spasibo concludes:

“The ‘estimated expenditures’ of the Defense Ministry obviously demonstrate that we’re again being dragged into a senseless and dangerous arms race which in no way increases our military security.  On the contrary, it increases the risk of creeping into military conflicts.”

“NATO and the U.S. absolutely don’t need a war with Russia.  China doesn’t either.  Even despite periodic rumors that it has territorial claims on us.”

“But it’s impossible to make these claims by military means.  Especially if Russia will have a modern high-tech army.  But once again no one is building it.  And doing this is impossible, scattering resources on strategic arms, VKO, an ocean-going fleet, whose role in the hypothetical case of war is completely incomprehensible.  The situation’s exacerbated by the lack of an entire series of experimental models fit for production and supply to the Armed Forces, an obsolete technological and organizational structure of OPK enterprises which, most likely, will turn the money into dead metal.”

“During perestroyka, we learned that the USSR lost the ‘Cold War’ to the U.S. and that the arms race killed the Soviet economy.  Scholars and commentators talked about this with figures and facts.  In those days, there were many suggestions about what to do with the Armed Forces and VPK.  But all this ended in empty talk.  In fact, they simply killed the VPK.  They practically didn’t invest money in the Armed Forces.  There was neither an army, nor a defense industry to arm the army.”

“And here a time has come when the Kremlin and the White House have decided to modernize the army and, using the financial possibilities that have appeared, to pour 20 trillion rubles into it before 2020.  But won’t we now be stepping on the very same rake as in the eighties, won’t the president and premier be repeating the mistakes of the Politburo, initiating a thoughtless and dangerous arms race?  The key word here is thoughtless.”

“Of course, the draft State Program of Armaments, 2011-2020 is a document under the top secret seal.  Does this mean the public shouldn’t discuss and understand what trillions will be spent for.  Or is it the prerogative of a narrow circle of interested officials — lobbyists for the VPK and the military?”

“The trouble is old and familiar.  Recently deceased  Academician Georgiy Arbatov wrote about it in 1990:  ‘An affair most important for the country and the people — defense, security, fantastically large military spending — was monopolized by a narrow group of generals and general designers from military industry.’  And further:  ‘I think the military shouldn’t be given a monopoly on assessing the threat of war.  Just the same it’s reasonable not to make this assessment without accounting for its opinion.’  It just shouldn’t dominate this.”

Thank you Mr. Spasibo.  A good article.  He has a clear point of view on the issue of the GPV and where the Russian military might or might not be headed.  But where does it leave us?

Just a little commentary . . . Spasibo says Russia aims to match NATO, the U.S., and maybe China too.  This raises the issue of whether it should aim for this and whether it can achieve this.  The answer to both is no.

That is, however, not the same thing as saying the Russian Armed Forces don’t need to modernize.  If they were smart, they’d aim for capabilities to offset the advantages of their stronger potential enemies.

That means difficult picking and choosing, something we haven’t seen much of in the GPV, where it looks like every service is at the table awaiting a full meal.

Russia is definitely not France, but this doesn’t mean Moscow has to defend everywhere.  Perhaps it should prioritize and worry more about Vladivostok and China than about Iturup and Japan.

Spasibo does a good job of pointing out that there are at least as many problems in the VPK, the OPK as in the military itself.  And yet there’s no real effort yet to remedy them.  All of this goes to whether Russia can reach whatever aim it sets for military modernization.  As Spasibo says, they might just be sending good money after bad.  They may be risking a repetition of past mistakes by overspending on arms, but, of course, they may not even get a chance to repeat these mistakes if money isn’t allocated.  Remember that previous GPVs died of financial starvation in their infancy.

One’s not sure about Spasibo’s argument on Moscow’s promotion of an arms race.  Right now, only the Russians need to ‘race’ — and the race is to catch up after years of falling behind.  And it doesn’t necessarily need to catch up to the extent that it duplicates U.S. capabilities.

And yes Spasibo’s right in saying these defense expenditures should be debated and decided more widely and publicly, but unfortunately Russian citizens have even more basic and important political and social issues that need that kind of scrutiny first before they get down the list to military procurement.

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The Foggy Goal of the GPV (Part I)

Posted on February 15, 2011 | 1 comment

In its February issue, Sovershenno sekretno’s Vladimir Spasibo examines the State Program of Armaments, 2011-2020, and tries to say if Russia can afford it.  Or more importantly, whether the new GPV makes sense given that Russia is unlikely to go to war with NATO, the U.S. or China.  Spasibo also casts a critical eye at whether the OPK is up to the task of fulfilling the GPV.  This author doesn’t vouch for Mr. Spasibo’s numbers and math; they are relayed as in the original.  But his arguments are interesting and useful.

Spasibo says, after 2013, the GPV’s 22 trillion rubles [19 trillion for the Armed Forces] will amount to almost 4 trillion annually for the military, or 8 percent of Russia’s GDP as compared with 5 percent in the U.S. and 2-3 percent in other NATO countries.  Buried a little down in the text, he cites Deputy Prime Minister Sergey Ivanov on the 1.2 trillion ruble State Defense Order for 2010, and Prime Minister Putin’s assertion that this amount will triple in 2013.

And the military actually wanted more — 36 trillion, which Spasibo claims would be 15 percent of GDP, an amount equal to the Soviet defense burden before the USSR’s collapse.  He asks if this isn’t too much for a country just emerged from an economic crisis.  And what threat is this colossal military budget directed against?

He turns to Defense Minister Serdyukov’s explanation to Der Spiegel:  terrorism, proliferation, and NATO expansion.

Spasibo suggests the thrifty French defense reform which, for less than Russia’s 22 trillion rubles, “Created a small, balanced grouping with modern equipment.  Capable of instant reaction and an adequate response to any threat to France’s interests.”  He continues:

“The approach of the current Russian military, more precisely civil-military, leadership toward reform of the Armed Forces is somewhat similar.  The preconditions, it’s true, are different, and the goals are foggier.”

Who, asks Spasibo, are Russia’s enemies, and against whom is it supposed to fight?  The Military Doctrine and other pronouncements make it sound like the answer is the U.S. and NATO, as well as nonstate irregular armed forces inside and outside Russian Federation borders . . . leaving Moscow to prepare both VKO against a high-tech enemy with highly accurate long-range weapons, and low-tech enemies conducting guerrilla warfare and sabotage-terrorist actions.

Spasibo then turns to thinking about which services and defense enterprises will get GPV money:

  • According to its commander, the RVSN will replace 80 percent of its ICBM inventory (roughly 300 missiles) by the end of 2016 for a price that Spasibo puts at 1.9 trillion rubles.
  • Spasibo thinks VKO and PRO might cost 3 trillion by 2020.
  • The Air Forces are looking to renew 70 percent of their aircraft, 1,500 aircraft in all including 350 new combat aircraft for 3.8 trillion.
  • Spasibo believes the Ground Troops will get 7.6 trillion to replace combat vehicles including 60 percent of their tanks and BMPs, and 40 percent of their BTRs, that are over 10 years old.
  • And the Navy, as reported elsewhere, will get 4.7 trillion.

That all adds to 21 trillion rubles.

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Inflation, GOZ, and GPV

Posted on January 22, 2011 | Leave a comment

RIA Novosti military commentator Ilya Kramnik has some thoughts on this issue.  Inflation has disrupted Russian rearmament efforts for years, and this year it’s likely to remain in the 9 percent range, or higher.  But, besides inflation, Kramnik notes, the way arms prices are formed and tenders are conducted also create higher prices and complicate the process of obtaining new weapons and equipment.

Kramnik attributes delay in adopting the GPV to the problem of reaching agreement on constantly rising prices for arms and military equipment.  These price increases, he notes, actually outstrip the official inflation rate and devalue the much-touted growth in the military’s budget.

A just-signed law (402-FZ) modifies the budget code and the law on the State Defense Order (GOZ), allowing this year’s GOZ to be financed without an adopted State Program of Armaments (GPV).  The law is also supposed to limit price increases on the OPK’s products.

According to Kramnik, in 2007, the Russian government ordered a 25 percent limit on profits from arms production, based on prices registered with the Federal Tariff Service.  This didn’t work too well.  The T-90 tank’s price tag increased from 42 to more than 70 million rubles, and the cost of the Steregushchiy (proyekt 20380) corvette rose from 1.8 to 5 billion rubles during its construction.

However, increased costs aren’t always attributable to more complex and expensive systems, or to inflation, or to small production runs.  Prices for military equipment are formed through “informal means” or personal ties between those who order and those who produce it.  Kramnik doesn’t utter the word corruption, but that’s what these informal ties lead to. 

At any rate, this is why the Defense Ministry’s been divided into military and civilian parts — to break the link between uniformed buyers and factory directors.  But who’s to say civilians can’t take the military’s place in a corrupt relationship?  To his credit, Kramnik concludes:

“We’ll see soon enough how much this series of measures will slow the growth of prices for military equipment in Russia.”

Kramnik also notes serious problems with GOZ tenders and the government procurement law.  Competitive tenders have to be conducted even when there’s only one supplier, leading to time wasted, and to the rise of middle-man firms that pass orders to sub-contractors who actually do the work.  To fix this, changes in the state purchase law (94-FZ) are needed, but haven’t come in many years.

And the problem of funding multi-year work still hasn’t been solved, and long-term, science-intensive project and RDT&E prices have to be renegotiated annually.

Kramnik sums up:

“All these ‘holes’ lead to budget money too often accumulating in vain in treasury accounts, or else too actively being ‘turned’ and ‘sawed off’ — the ineffective expenditure of state defense order resources in recent times has reached many tens of billions of rubles.  The coming year will become a real test for the reformed Defense Ministry — the degree of effectiveness of military budget expenditure will demonstrate how much Anatoliy Serdyukov and his team have managed to fulfill the tasks set before them.”

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Is the GPV Doable?

Posted on January 14, 2011 | 3 comments
This post is dedicated to a friend and mentor who highlighted the source material . . . .
 

Do I Look Happy About the GPV? (photo: RIA Novosti)

Is Russian Finance Minister Aleksey Kudrin on-board with plans for increased military spending contained in the State Program of Armaments, 2011-2020?  The economic press seems to think he’s not, and his reticence leads one to ask if the new GPV will fit Russia’s economic and budgetary realities in coming years.  One thing’s certain (if you read on), 2011 is the first year of this GPV, and already, for a variety of reasons, many new arms will be bought with state-backed credits and loans.

The GPV came into the headlines last spring when Kudrin and his ministry offered 13 trillion rubles, and the uniformed military replied that 36 trillion would be about right.  Not much was heard about negotiations over the GPV until mid-July, when First Deputy Defense Minister Popovkin announced the figure would be about 20 trillion.

Then, President Medvedev described the GPV in his annual Federal Assembly address (Poslaniye) on 30 November:

“Today the fundamental task of creating a new high-technology mobile army stands before us.  We are setting out to spend more than 20 trillion rubles on these aims.”

The same day, Moskovskiy komsomolets published Kudrin’s reaction from RIA Novosti:

“The country is living with a deficit . . . .  The redistribution of expenditures from other areas is required.”

And from a television interview:

“The task of strengthening defense capability was set down very seriously, and a figure of 20 trillion rubles was named, and it will need to be directed at strengthening defense capability over the course of 10 years.  This is a new task, financial sources still haven’t been considered sufficiently, this could be an additional burden for the economy.  In this case, the president believes it’s essential.”

Kudrin didn’t mean new as in news to him, but in the sense that it hasn’t been factored into the federal budget. 

On 3 December, in MK, Nikolay Vardul critiqued Medvedev’s explanation of the GPV.

Vardul said we’ve heard about the high-technology army and using defense industry as an economic locomotive before, but this no longer fools anyone.  Large military expenditures ruined the Soviet economy, although falling oil prices were the coup de grace.  He continues:

“And here again is Medvedev talking about how investments in military technology will pay for themselves in the production of ‘dual-use products.’  Stepping on the same rake, as if we didn’t have sad experience.  The army passage in the Poslaniye is generally contradictory.  Medvedev drew an alternative:  either Russia and NATO manage to agree on joint missile defense, or a new arms race.  And then how do expenditures of 20 trillion rubles on military-technological needs by 2020 present themselves?  Is this just a running start?  In order to understand the scale of the spending, the entire Russian GDP in 2010 is on the order of 51 trillion rubles, and all federal budget expenditures for 2011 should be 10.8 trillion. There you have it.  But the questions continue:  who is now the potential enemy?  Can it be NATO again?  Too many questions and very few answers.”

“There is, by the way, one clear answer.  From the point of view of the economy, the main threat to its relative equilibrium is precisely inflated military, not social expenditures.”

“And there’s no doubt:  the higher the state expenditures, the greater the chances of inflation.  But military expenditures are distinct from investments in education or health care by the fact that the path to recouping them is more thorny and tortuous, if it’s even possible.  On the other hand, the road leading from them to inflation is as straight as a pipe.”

He concludes it’s true Russia’s economy needs a more modern engine to replace oil and gas revenues, but: 

“Instead of this, huge resources  are diverted to military spending, even though armaments not only won’t lift the economy, but drain it further.”

On 10 December, Nezavisimaya gazeta’s Anatasiya Bashkatova addressed Kudrin’s comments that redistributing federal budget to the regions and increasing the country’s defense capabilities will be very difficult to do simultaneously.  As Bashkatova put it, “there isn’t enough money for everything,” and “a high-technology defense sector interferes with regional development.”

Kudrin also said: 

“This program [GPV] is now being prepared.  It will soon be adopted, and the main expenditures will fall not in 2011, but in subsequent years.”

NG chief military correspondent Viktor Litovkin explained that it was simply too late for changes in the defense budget for 2011 with expenditures already starting according to the adopted budget law.

Then President Medvedev met with Kudrin meeting on 13 December.

Medvedev and Kudrin (photo: Kremlin.ru)

Medvedev told him his priorities are economic modernization and social spending, and regarding the latter:

“I consider that this is very important for preserving social peace and stability in our country.”

But with his very next breath, Medvedev said:

“And, of course, we must devote attention to issues of guaranteeing the security and defense of our state.”

And, of course, after wishing it weren’t necessary, he said:

“Therefore, the corresponding state program of armaments, and the Armed Forces modernization program need to be fulfilled in the specified parameters.”

The same day, Prime Minister Putin conducted a government conference in the submarine-building capital Severodvinsk to review the GPV, and even he confessed:

“For me it’s terrible even to say this amount [20 trillion rubles].”

Later in December, Vedomosti quoted one of Kudrin’s deputies who said, many expenditures which have “already been announced – and first and foremost these are defense expenditures” have not been figured into the 2011-2013 budgets, and it’s “still unknown” how these obligations will be financed.

Dmitriy Butrin in Kommersant quoted Duma Defense Committee Chairman Zavarzin to the effect that, in 2011, 30 percent (about 500 billion of 1.5 trillion rubles) will be financed by state-guaranteed credits rather than by budget funds.  Butrin went on to repeat Kudrin’s warning that the GPV can’t be covered by the projected budget income level, and the 20 trillion could make increased taxes unavoidable.

The Kudrin deputy also said that, without growth in the income portion of the budget, new budget obligations – like the APEC summit, Sochi Olympics in 2014, Skolkovo, World Cup soccer in 2018, and the State Program of Armaments – appear unrealizable.  He concludes, “We’ve set out on a trajectory for higher taxes.”

So where does this leave the GPV.  These economic commentators describe the same general picture . . . the GPV is extra spending for which financing has not been identified, at a time when key categories of budget income (i.e. oil and gas revenues) will decline (from 17 percent in 2009 to 13 percent by 2020) and the prospect of higher deficits already looms.

Russia also faces lower receipts and more payouts for pensions and health care over this period.

Kudrin and company are looking at possibilities, mainly increasing some taxes, but also maybe raising the retirement age.  None of this will help economic growth or make people happy.

No wonder the Finance Minister has resisted extra military spending to the extent that he can.

This GPV, if implemented, will impede the economic modernization President Medvedev wants.

But history says this GPV’s not likely to happen.  Even its most recent predecessor, started under favorable economic conditions, was superceded rather than completed.  And now is definitely not a favorable time like that.

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Serdyukov’s Year-Ender

Posted on December 31, 2010 | 3 comments

Anatoliy Serdyukov (photo: Izvestiya / Vladimir Suvorov)

ДОРОГИЕ ЧИТАТЕЛИ ! ! !

С НОВЫМ ГОДОМ ! ! !

Thanks for reading and commenting this year.

This one could have been entitled, The Army’s Great Scourge or Reform Isn’t Utopia or We Straightened Them Out.  Great quotes, but you’ll have to read to the bottom.

Defense Minister Anatoliy Serdyukov’s year-ending interview in Monday’s Izvestiya is a good read.  The paper asked some harder-hitting questions than Serdyukov normally gets.  And, though they aren’t necessarily new, his answers are pretty direct and revealing.  There are problems with a lot of them though.

Let’s look first at what Serdyukov said, then we’ll look at the deeper meaning of his answers.

Asked about this year’s command and control changes, the Defense Minister says:

“The most important thing is that we already changed the entire troop command and control system.  From one side, we tried to minimize the command and control levels; from the other side, to equip them technically.  Now the next task is before us – to tie it all into a single system so that every district commander answers not just for the ground, but also for the air, and air defense, and naval component.  The next step is we are trying to conduct exercises in such coordination between districts.  I think 2011 is key for us on this plane.”

On the decision to move to four unified strategic commands (OSKs) and cutting levels of command, Serdyukov said:

“This is the General Staff’s idea.  Before going to the president with such a proposal, we discussed this initiative since the end of 2007.  At the same time, we had conferences at various levels, consulted with experts, important military leaders, and studied international experience again – both American and NATO.  We tried to analyze the situation from every angle and arrived at the fact that this is really useful for various reasons.” 

“First and foremost, the transition to the OSK should be reflected in the controllability of the army.  A simple example:  at the beginning of the transformations, an order from me to a battalion commander had to go through 17 levels.  So you understand this influenced the speed of their transmission, and the content of the information itself.  Now we have three levels in all. If one wanted, it would be possible to calculate how much was saved both on communications nodes, and on communications systems themselves, and in speed.  And as a result – the army’s combat capability rose 50 percent.”

Asked about what will happen in combat situations now that more civilians occupy military support jobs, the Defense Minister says:

“Several factors converge into one point here, therefore, we came to the conclusion that we could and should divide directions of responsibilities – operational and support.  It’s not an accident that the Defense Minister has a first deputy – the Chief of the General Staff and a first deputy – a civilian who handles the direction connected with supporting the operational component.  Everything’s been thought out, and there won’t be any kind of failures.  Neither peacetime, nor wartime frightens us.”

On General Staff Chief Makarov’s assessment that the commander’s slovenliness caused 150 conscripts to get ill in Kemerovo, Serdyukov takes the opportunity to describe the pains he’s taken in establishing systems to monitor the implementation of military reform:

“Unfortunately, we are getting started.  Actually, when we launch any process, we try to organize the monitoring system and incentive system in the final result.  But this doesn’t always work.  We’ve established a series of structures for monitoring.  They are, for example, the financial inspectorate, which checks the use of budget resources.  Then the personnel inspectorate – occupied with the activity of every officer and civilian specialist.  There is the military inspectorate, which checks those measures which should go on in this or any military institution.  There is an organizational-inspector directorate occupied with checking fulfillment of all directives, orders, decrees, laws, etc.  This is that system of monitoring which gives the capability to influence internal army processes, and to move them.  Naturally, an entire system of regulations exists where the duties of every colleague, every sub-unit are strictly prescribed as is the corresponding period for fulfilling the orders.”

Asked about indicators of the fulfillment rate for Defense Ministry orders:

“All orders are being fulfilled.  The question is different:  are they on schedule?  And for the last half year, the picture generally doesn’t look bad.  The schedules we are establishing are holding on the whole.  Inside the ministry, we changed our entire workflow, accordingly this entailed a cut in signatories on this or that issue or project.  We are introducing electronic workflow which allows us at any stage to check how this or that directive or order is being fulfilled.”

“But there are also breakdowns.  Recently we had a collegium in Khabarovsk.  We listened to the report of an army commander who should have implemented 87 different measures, but implemented all of two.  What kind of combat readiness and discipline can you speak of if an officer doesn’t fulfill his own duties?”

“When we embarked on reform, both I personally, and many of my colleagues strove to understand:  what kind of problems really could be blocking the army’s development – housing, lack of money, lack of equipment, of soldiers?  Now there’s everything.  If you serve, then according to order 400 the money is very respectable.  We are providing housing.  There’s one hundred percent in equipment.  Almost one hundred percent – give or take one-two percent – in servicemen.  There you have it:  if you chose this profession, then serve.  But here we are stumbling over weak managerial discipline – the army’s great scourge.  And even here we’re trying, from one side, to stimulate work, and from the other – to severely demand fulfillment of service duties.”

Is Russia buying weapons abroad because the systems are really needed or is it being done out of political considerations:

“There is a certain requirement for foreign military equipment, because in a series of types of armaments, we, unfortunately, will fall behind.  Our models don’t meet the demands presented by the times.  It’s important also to understand how to formulate the tactical-technical tasks and characteristics of this or that essential production.  Therefore, we’re also trying to familiarize ourselves with those modern models of equipment and armaments which our partners have.  For this, in fact, we are buying equipment in small amounts – as in the case of UAVs.”

“However, besides equipment, it’s also necessary to have trained personnel, and a command and control system.  We don’t have many models of armaments, but to work on their development, spend time and money on their adoption is simply irrational, it’s simpler to buy, to study, and later begin to develop our own production.  Those Israeli drones gave a serious impetus to developing domestic industry.  Not long ago, the president was at the test range and there we showed him Russian models that are sufficiently reliable.  They are fully suited to us.”

“We don’t have ships like the Mistral.  We never built them.  But to try to catch up now is senseless.  We plan to buy the license and technical documentation for their production.  Moreover, there’s an agreement that, starting with the third ship, we’ll build the helicopter carriers in Russia.”

Doesn’t such an approach hurt Russia’s defense industry?  Wouldn’t it be better to finance and support our own enterprises:

“In the new state program of armaments, for four years, we laid out 600 billion rubles which will be allocated according to a new credit system for enterprises under a government guarantee.  Now  discussion is going quite actively on the subject of how this should happen, with what credit requirements and conditions.  This is one of the forms of financing which has a relationship not so much to support of enterprises as to the system of paying the state defense order itself.  It allows for transferring the load from the second half of the GPV to the first and vice versa.  Or to take off the peak load, meanwhile working out forms of active participation in financing by the Ministry of Finance and the banking system.  Incidentally, the reaction is fully positive, we already have trials with the largest banks – with Sberbank and VTB.”

On inter-ethnic conflicts in units and the possibility of creating nationality-based units:

“This isn’t today’s or yesterday’s problem.  If the commander fulfills his duties completely, then time and energy for conflicts simply won’t remain.  If they’re occupied with physical training for a minimum of four hours a day in every unit , and the remaining time is combat training, as it’s stipulated, then no kind of misunderstandings will arise.  It’s not important where you’re from, which nationality, and religion, if you just fall in your rack after exercises.  The problem again is in the commanders.  Some of them are simply estranged from working with personnel – they see that there are many physically strong, willful guys in the unit, and give over control of the barracks to them.  But those ones become abusers.”

What happens with commanders like these:

“We’ll dismiss them, get others.  An officer must be physically and morally very well prepared and engender only respect.”

Has the army rid itself of dedovshchina with the move to one-year service:

“We now are trying to get away from this term.  There is no longer such a phenomenon.  There is simply hooliganism, crude violation of the law.  If a man served three months, what kind of ‘ded’ is he?  The roots of dedovshchina are much deeper than commonly believed.  In Soviet times, when people served three-five years, then it was the rule:  a man just called up, and a man looking at demob in six months, have different training.  Here then is this phenomenon, really, and its origin.  Now this is pure hooliganism, legally punishable crime which we have fought and will fight without compromise.  Here it’s important that the commander in the sub-unit should fulfill his duties completely.  Then there can’t be any kind of conflicts by definition.”

Asked about accidents with munitions dismantlement over the last year, and how is the problem being resolved now, Serdyukov says:

“The problem is very serious.  For long years, munitions were stockpiled to excess, calculated for a multimillion-man army.  Besides, in the last twenty years, virtually no attention was given to combat training and firings, but the norms of munitions stockpiling remained as before.  As a result, so much ended up in excess that we have work for several years.  To dismantle them by industrial methods is quite complex – there aren’t enough enterprises.  Besides, this is very expensive and not safer than destruction.”

“Therefore, we’re now preparing special teams, certifying equipment, and selecting officers.  They mainly need to be combat engineers.  We’re picking ranges.  We’ve figured where, in what volume, and what we need to blow up, and worked out safe techniques.  We need at a minimum two, maybe three years of such work.  Yes, this will create some temporary discomfort and difficulties.  But it’s impossible to not do this.  If the entire arsenal at Ulyanovsk had blown up, the trouble would have been much more serious.”

Asked about demographic problems, a potential shortage of conscripts, and possibly cutting more deferments, the Defense Minister answered:

“We won’t revoke anything.  As far as demographic problems go, it goes without saying that they exist and we will take them into account.  How do we solve this problem?  I think if the country’s financial situation allows, then we will still try to return the issue of a contract army.  No one has revoked this program, we didn’t realize it because of a lack of resources.  We haven’t  rejected the idea itself.”

Serdyukov tells his interviewers flat out, there’s no longer opposition to his reforms in the army.  What happened to his opponents:

“We straightened them out.  Of course, this was difficult, especially at first.  Now a team of like-minded people has been laid down which itself is generating reform ideas.  Something’s already started to come from it.  People see this and understand:  reform is not utopia, but completely concrete matters.”

After four difficult years in the Defense Ministry, where does Serdyukov see himself:

“I still haven’t finished my service, so I can’t begin to talk about what’s been achieved and what hasn’t.  We’re now in a transitional phase.  There’s not a single direction of the ministry’s activity that modernization, the transition to a new profile wouldn’t affect.  We are working everywhere – in all spheres:  armaments, scientific-research activity, education, organization of daily service, military-technical cooperation.  I can’t say now what we’ll succeed in, and in which direction we’ll lag.  It seems to me that everything’s going pretty well.  We’re on schedule, there’s no deviating.”

Let’s deconstruct some of this shall we? 

Serdyukov and company seem to be obsessed with eliminating layers.  You know sometimes redundancy is good, and prevents making mistakes.  In a net-centric army, every layer sees the picture, but doesn’t necessarily have it for action.  It’s very hard to believe Serdyukov’s claim that just cutting command levels increased combat capability 50 percent when you look at everything that’s factored into the Russian definition of combat capability. 

Yes, we know operational and support stovepipes have been created.  But Serdyukov completely dodges the question of what happens when the combat tooth depends on a civilian tail.  There are obviously answers to this, but the Russians aren’t accustomed to this.  He brushes it off saying there just simply won’t be any failures.  That’s reassuring.

 On the soldiers in Kemerovo and slovenliness, Serdyukov goes a bit non-sequitur.  It’s great hearing about his monitoring system and the implementation of orders, etc.  One wonders, however, if electronic workflow in the Defense Ministry was as important as many things that needed to happen in the troops this year.  But then it gets really interesting.  We start to hear in Serdyukov’s words some of the animus he has for officers.  Why did he ever have such an army commander as the one he vilifies?  He really lays into officers, saying he’s given them everything they need now, they just need to do their jobs.

Serdyukov really avoids the question on buying arms abroad and hurting domestic producers.  He monologues about some convoluted credit provision scheme for paying out the GOZ.  This issue of real money for producers to make weapons and equipment is significant.  Even with the GOZ and a new GPV in place, all anyone can talk about is extending credit to the OPK in 2011.  Hmmm, interesting.

He blames commanders again for inter-ethnic conflicts in the army.  If they were doing their jobs, it couldn’t happen.  If they just wore the boys out properly, it wouldn’t occur.  There is some truth in this, yes, but it’s more complex than just that.  But saying any more might have taken the Defense Minister into a social and political minefield.

On dedovshchina, again Serdyukov blames officers for not taking care of the problem.  Serdyukov’s insistence on just talking about hooliganism makes some sense, yes, but there is still dedovshchina going on.  And, by the way, dedovshchina was never just purely hazing, making the juniors do the crappy jobs; it always had more violence, abuse, and crime in it than Serdyukov is willing to allow.

Serdyukov doesn’t say how he’s addressing the real civil-military relations problem he’s got in Chelyabinsk with regard to the explosions at Chebarkul.  But at least it’s a little like the problems his counterparts face in normal countries, and one has to credit him for taking on a lingering military problem all his predecessors simply ignored.

Wow, is Serdyukov cocky on vanquishing his opponents in the military!  He ought to watch it, it could come back on him.  But as we’ve seen, large-scale, public political demonstrations are going to come from other sources (i.e. the soccer fan bunt or pogrom).  The purely military ones (i.e. the Russian Airborne Union, etc.) tend to be more farcical.  But veterans and even serving officers could provide critical mass in a bigger social protest.  And there’s always the chance that some disaffected Kvachkov could fire a grenade at the Defense Minister’s limo.  Yes, yes, I can hear you — this is just by way of playing out one scenario on what could happen in the future.

One has to respect Serdyukov’s reticence to judge his legacy right now.  It may be possible he’ll leave the big marble building on the Arbat one day thinking how much he’s changed everything, thinking he’s a 21st century Dmitriy Milyutin.  And he may be, at least in comparison with any other choice.  He is making essential changes, and some progress.  More than this analyst thought he would back in early 2007.  But, on close inspection of the military, we may discover that less will actually have changed and improved than we think right now.

How much longer will Serdyukov continue in this burn-out job?  He’s pretty stoic, but he’s definitely more frayed than 4 years ago.  The issue probably comes down to the larger context of the Putin-Medvedev tandem and team — changes in high-level personnel could be more difficult now with every passing day.  Perhaps Serdyukov will remain through a fifth year, and the seating of the next Russian president.

It’s a great interview.  We got some real insight into the Defense Minister’s thinking.  Never could have gotten this 20 or 30 years ago.

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Posted in Command and Control, Conscription, Defense Industry, Law, Order, and Discipline, Manpower, Officer Corps, Serdyukov's Reforms

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The Air Forces and the GPV

Posted on December 8, 2010 | 1 comment

General-Lieutenant Sadofyev

Last week, General-Lieutenant Igor Sadofyev – Chief of Aviation, Deputy CINC of the Air Forces (VVS) for Aviation – spoke to the press about his service’s ambitious plans for procurement under State Armaments Program (GPV), 2011-2020.

General-Lieutenant Sadofyev told RIA Novosti the VVS will receive 1,500 new, and 400 modernized aircraft by 2020.  The Chief of Aviation said the State Defense Order (GOZ or ГОЗ) for 2011 includes acquisition of Su-27SM, Su-30M2, Su-34, Su-35S, and Yak-130 aircraft for the VVS, as well as Ka-52, Mi-28N, Mi-8AMTSh (MTV-5-1), Ka-226, Ansat-U helicopters for Army Aviation.  But he provided no specific procurement numbers for next year.

Su-34 (photo: RIA Novosti / Igor Rumyantsev)

For Long-Range Aviation (LRA or ДА), he said the VVS will modernize existing Tu-160, Tu-95MS, Tu-22M3, and Il-78M aircraft.  The goal is to update 80 percent of this inventory in what he calls the medium-term future – defined by him as 2020.  What he has in mind here is service life extension and the replacement of some electronics and other systems.

For Military-Transport Aviation (VTA or ВТА), Sadofyev says the VVS will modernize its existing aircraft, and purchase more than 50 percent new ones.  He doesn’t break it down by particular types of transports.

For Frontal Aviation, some existing aircraft will be modernized, and over that medium-term future (2020) more than half the order-of-battle will be replaced with new aircraft, and 14 percent of the inventory will be ‘perspektivnyy’ (перспективный) aircraft.  One supposes that means PAK FA.  If that 14 percent is 70 PAK FAs, that would put Frontal Aviation at about 500 aircraft total.

Army Aviation, according to Sadofyev, will get 70 percent new aircraft by 2020, and 100 percent sometime afterward.  He said the VVS will begin getting the Ка-52 / Alligator next year.  And he made a point of noting that Army Aviation will remain within the VVS, despite rumors it might return to the Ground Troops.

He said serial deliveries of the Yak-130 trainer will begin next year to replace 1970s-vintage L-39 jets.  Flight instructors and technical personnel will learn the Yak-130 at Lipetsk before using it to train young pilots at Krasnodar.

Sadofyev also told RIA Novosti the number of VVS day-night, all-weather aircraft will increase 4.5 times, and this will lower aircraft losses by a factor of 10-12.  According to him, the share of precision weapons in the VVS will increase 18 times, taking it to 70 percent of the inventory by 2020.  So less than 4 percent of current air-delivered munitions qualify as precision weapons.  UAVs will be increased 6 times, taking them to 30 percent of the aircraft inventory.  So they are about 5 percent at present.  Sadofyev adds that money will go to providing a common reconnaissance-information environment for the VVS.

Defense Ministry spokesman Colonel Vladimir Drik also talked about VVS procurement last week.  He said the VVS got new and modernized aircraft this year, including Su-27SM and Su-25SM, and Mi-24PM and Ansat-U helicopters.  But he had to admit only the Ansat-U is new, and he didn’t provide numbers.

There was a major garble over the Su-27SM.  RIA Novosti quoted Drik as saying the VVS “received four squadrons of modernized Su-27SM” this year.  In fact, the transfer of the final 4 of 48 Su-27SM happened in late November 2009.

Drik said Russia’s air defenses will be 100 percent new by 2020, with the VVS operating the S-400, S-500, and Pantsir-S.  Once again, no one seems to want to talk about what’s going on with SAM production.

Igor Korotchenko’s take on VVS procurement from October looks pretty on-target in light of this latest press.  He said the priorities were precision weapons, automated C2, aircraft, and air defense systems.  And, at that time, he put the acquisition numbers at 500 new aircraft, 1,000 helicopters, and 200 air defense systems.

All in all, an extremely ambitious plan.  Fulfilling it will demand complete and timely funding, and even then it will be a challenge for Russia’s aviation industry.  Also, Sergey Ivanov says the GPV has gone to the government today, so maybe we’ll learn how VVS requirements fare.  VVS will be a priority, but we’ll have to see how high.

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Military-Theft Forces

Posted on November 30, 2010 | Leave a comment

Prosecutors Rate the Most Corrupt Service Branches

40-50 Percent of State Defense Order Simply Stolen in Recent Years . . . no wonder large-scale procurement hasn’t happened.  Serdyukov supporter Korotchenko tries to paint opponents of military reforms as people trying to protect their corrupt schemes.  This surely goes on, but there also have to be people opposing them for reasons other than greed.  Finally, it’s at least conceivable that, if Serdyukov doesn’t make progress against corruption, it could cost him his job (if he stays that long, he is approaching the four-year mark).  Thus endeth the precis for this post . . .

This week Profil investigates military corruption.  The magazine notes the number and scale of Defense Ministry corruption cases is growing by leaps and bounds, reaching losses of 2.2 billion rubles for the first ten months of 2010.  It concludes, despite a significant cut in the officer corps and Defense Minister Anatoliy Serdyukov’s battle against “thieves in broad stripes [generals],” the number of corruption crimes is not only not declining, but has substantially increased.  Profil obtained an analytical report compiled by the Main Military Prosecutor (GVP) showing who has stolen how much this year.

The GVP presented its report to a closed session of the Duma Defense Committee.  It says its analysis shows “efforts to counteract corruption in the troops are insufficiently effective.”

Profil’s first graphic . . .

Growth of Corruption Crimes in the Army (First 10 Months of 2010)

Troops/Military District/Fleet                     2009       2010       Growth (%)

North Caucasus MD                                             184          311                 69

Moscow MD                                                              94           152                61.7

Air-Assault Troops (VDV)                                 34            119                250

Siberian MD                                                             76            117                 54

Strategic Missile Troops (RVSN)                  59              93                 57.6       

Northern Fleet                                                      50              59                 18

Space Troops                                                        27              44                 63

Caspian Flotilla                                                      5                  7                 40

Black Sea Fleet                                                      2                  6                 200

Profil suggests the recent wave of military retirements signed off by President Dmitriy Medvedev could have been sparked by corruption charges.  While possible, there’s no evidence to support this thesis. 

A Profil source in the Defense Ministry says, not surprisingly, officials responsible for the State Defense Order (GOZ or ГОЗ), capital construction, and the disposition of military property (first and foremost real estate) inflict the greatest losses on the budget.  The article quotes Igor Korotchenko:

“In the course of recent years, 40-50% of resources allocated for the State Defense Order were simply stolen.  This happened, for example, when money was directed at the fulfillment of some concrete work, but there were no real results.  Write-offs appeared in the end or a weapons system was developed that simply didn’t meet its technical requirements.”

Profil suggests that many officers are rushing to get one last bite of military money before Serdyukov’s reforms completely derail their schemes.  It cites Ruslan Pukhov offering two different explanations for rising military corruption:

“Feeling an impending dismissal, officials are probably trying to take the maximum from their positions.  However, it can’t be ruled out that the prosecutor has really reinforced his work in different areas.  Corruption is an acute issue for the prosecutor.”

Pukhov thinks that, although the percentage increase in corruption looks really bad for the VDV, “corruption in the armed forces is spread equally and the growth in corruption crimes in separate branches or districts is connected only with where they are being investigated.”

A very good point, Mr. Pukhov.  Yes, the results of this little anticorruption experiment are very much influenced by where and how it is being conducted.  One should also pay much more attention to the absolute numbers of corruption cases than the percentage changes, and nothing has been said about the relative size of the various parts of the armed forces . . . no per capita figures are provided.  Are 44 crimes in the relatively small Space Troops more significant than 152 in the larger Moscow MD?

Korotchenko, a fairly strong Serdyukov proponent, says the Defense Minister and his tax service colleagues are beginning to break existing corrupt ties, institute financial transparency, and deprive the generals of the right to conclude any contracts.  Dividing the Ministry into military and civilian halves will keep military men out of financial expenditures, and this “process of shifting generals out of the feeding trough” will continue until 2012.  The generals will provide requirements, and civilians will allocate the financing.

A second graphic with some absolute figures on losses due to corruption . . .

Growth of Corruption Crimes in the Army (First 10 Months of 2010)

Troops                                                                  Loss Amount                      Annual Growth

                                                                           (millions of rubles)                        (times)

Strategic Missile Troops (RVSN)                      59.8                                            15          

Air-Assault Troops (VDV)                                   57.5                                            12.2

Space Troops                                                            47.6                                              2.2

Korotchenko claims:

“The campaign against Serdyukov is mainly heated up by those people who’ve been deprived of the feeding trough.  So, the director of a large defense enterprise has for many years sawed off rubles by the billion every year in the transfer of money that comes to fulfill the Gosoboronzakaz.  When Serdyukov deprived this director of such a trough, he began to finance any actions directed at discrediting and, possibly, even removing the Defense Minister.”

So, Korotchenko asserts most conflicts over army reform are banal conflicts of interest for those who can’t steal like they used to.  But didn’t the GVP just say they’re doing a better job of stealing than ever before?

Korotchenko continues:

“Of course, Serdyukov is not an angel, and many of his actions on the military reform plane call forth questions, but it’s another thing that before he arrived, corruption in the Defense Ministry had achieved such a level that he was forced to cut to the bone.  Many scandals proceed only because their financial-economic interests were affected:  the meetings of the airborne guys is just one in this series.”

Then Profil turns to Vitaliy Shlykov, who says:

“Broad publicity for corruption scandals in the Defense Ministry cannot but affect the minister.”

But he believes the Kremlin knows no one can fight corruption like Serdyukov, therefore the GVP report isn’t a real blow to him.

Profil concludes, so far, Serdyukov hasn’t squandered the trust placed in him, but the struggle against corruption only strengthens him as long as it’s a success.  If corruption keeps growing, it’s possible the Defense Minister himself could wind up on the “shot list.”

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Posted in Crime and Corruption, Defense Industry, Force Modernization, Law, Order, and Discipline, Officer Corps, Serdyukov's Reforms

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Tsyganok on the GPV and the OPK

Posted on November 17, 2010 | 1 comment

Anatoliy Tsyganok

Interviewed in yesterday’s Svpressa.ru, defense analyst Anatoliy Tsyganok expressed his doubts that trillions of rubles can save Russia’s OPK, its defense-industrial complex.

A quick summary.  Tsyganok seems to make the point that, while there’s an armaments plan, the OPK is still in a woeful state of neglect, i.e. the Bulava’s producers may actually be better off than many defense enterprises.  Much of what is leaving the factory gates still heads for foreign buyers or requires expensive repairs because quality is lacking.  Perhaps the OPK development (or maybe rescue) program needs attention before the GPV.  Tsyganok takes fewer Indian and Chinese purchases as a sign of quality problems.  Lastly, he says Moscow needs to rethink how it’s most likely to fight before picking what to make and who will make it.

But back to the article, Tsyganok gives his views on what might be bought with 20 trillion rubles in State Armaments Program (GPV) 2011-2020.  He mentions (sometimes without specific numbers or costs):

  • An-124 Ruslan — 20.
  • An-70.
  • Il-112.
  • Il-476.
  • Il-76MD.
  • Combat and transport helicopters — 1,000.
  • PAK FA — 70.
  • Yak-130 combat trainers.
  • Su-35 and Su-30 — 60 (80 billion rubles).
  • MiG-29K — 26 (25 billion rubles).
  • Su-34 — 32 (35 billion rubles).
  • Proyekt 885 Yasen SSNs.
  • Proyekt 955 Borey SSBNs.
  • Bulava SLBMs.
  • Proyekt 11356M frigates — 3.
  • Proyekt 636 diesel-electric submarines — 3.
  • T-90 tanks — 261.

There are, of course, lots of systems required that he doesn’t take time to mention.  New ICBMs, advanced conventional munitions, communications systems, satellites, etc.  He notes that the Navy’s needs alone come to several hundred billion rubles, and several ships and submarines he mentions are for the Black Sea Fleet.  The Ground Troops don’t get too much attention from Tsyganok.

Asked whether the OPK can produce modern combat equipment of the necessary quality and quantity even with sufficient financing, Tsyganok responds:

“Unfortunately, it has to be recognized:  many OPK enterprises are already incapable of series production of high-technology weapons systems.  The woes of the unfortunate strategic missile ‘Bulava’ are proof of this.  The picture is generally nightmarish.  A fourth of Russia’s strategic enterprises are on the verge of bankruptcy.  The tax organs have already issued liens for the recovery of debts against 150 defense plants and organizations.  Baliffs have already been sent there.  Who can work on the state armaments program there?”

“And don’t let the fact that in the first half of 2010 fully respectable growth of 14.1% in production was registered in the defense-industrial complex deceive you.  Mainly, as before, everything put out went for export.  Let’s say, over six months, our country produced 54 helicopters.  Of them, 31 went abroad.”

Asked if the poor state of defense plants is affecting the quality of their products, Tsyganok says:

“It affects it in the most immediate way.  Expenditures on eliminating defects in the course of production, testing, and use of our military products today goes up to 50% of the general volume of expenditures on the corresponding defense budget article.  In economically developed countries, this indicator does not exceed 20%.  The main reason is monstrous equipment depreciation.  And there’s no ray of hope visible there.  The rate of renewing the production base in the Russian defense sector, despite growing financial inputs of recent years, is not more than one percent a year.  In order somehow to get out of this hole in which we find ourselves, we would need to increase this rate by 8-10 times.  Incidentally, the reduction in quality of arms and military equipment produced is already noticeably reflected even in Russia’s military-technical cooperation with our traditional partners in this area.  With India and China most of all.  They are already not so intently signing contracts with us as before.”

What about design bureaus and scientific-research institutes?

“Also nothing to brag about here.  The fact is what the Russian defense-industrial complex can offer the Armed Forces in the near future, with a few exceptions, is already no longer the world’s best models.  And all this is because in the USSR’s time our country allocated up to 4.7% of GDP to basic research.  In today’s Russia, in all 0.16% goes to this business.  At the same time, in China, for example, annually ten times more is spent on scientific-research and experimental-design work.  And, as expected, next year it will catch up with the U.S.  As a result, in many military technologies, Russia is currently at a 1970s-1980s level.”

Finally, Tsyganok’s interviewer asks if there’s any way out of these dilemmas:

“There’s always a way out.  First of all, it’s essential to promptly review the goals and missions of the weapons complex.  We really have to understand whom we intend to fight, and what types of armaments are necessary for this.  Then the state defense order [GOZ] will take on more accurate contours.  As long as we don’t have this understanding, the situation will only get worse.”

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