Tag Archives: GPV

Ivashov on the Army and Putin

Leonid Ivashov

Leonid Ivashov recently talked to Narodnyy politolog on a variety of army topics including reforms, the possibility of a big war, rearmament, president-elect Vladimir Putin, and his military program.  Segodnia.ru also printed the interview.

Once Russia’s top military diplomat, now avowed geopolitician, the former three-star thinks Putin fears externally-driven regime change and is improving the army to forestall such an eventuality.  Ivashov sees a U.S.-led West depriving Russia of allies before focusing on Russia itself.

Asked about army reforms, Ivashov says they have succeeded in cutting forces, but not in rearming them or improving their social conditions.  Reforms have degraded and weakened the army.  Military men mock the New Profile reforms saying, “There’s a profile, but not armed forces.”  Ivashov calls reforms craziness, and says it’s like servicemen have lived in a house under continuous repair for 25 years.

Following up his comment on mobilization reserves cut to the bare minimum, NP asked the retired general-colonel if a big war is possible today.

Ivashov says yes.  Citing how “they” are beating up Russia’s strategic allies (Syria and Iran), he says “What is this if not war?”

Ivashov foresees a large conflict between the U.S. and China and possible spinoff regional and local wars.  He cites a Chinese specialist who calls for a Russian-Chinese alliance to deter a big war and curb the appetite of the West and international oligarchs.

Is Russia ready for such an eventuality?  Ivashov answers:

“I think Putin understands perfectly how military weakness and the absence of strategic allies can be the end for Russia.  Clearly, the Libyan situation ‘helped’ him understand this, just like what is happening now in Syria, and what they are preparing for Iran.  If you can’t defend the country, you are subjecting yourself to a great risk personally.”

“Now Putin is making a sharp turn to the side of strengthening defense capability.  One can only welcome this.  Because today they don’t simply beat the weak, they destroy them.”

Ivashov calls Putin’s military program ambitious, if not systematic.  The regime’s been in a “light panic” since Libya.

He intimates that more than 20 percent of the state armaments program will be stolen since the amount of theft cited by the military prosecutor covers only cases under investigation, not all corruption.

Ivashov suggests lobbying has replaced forecasts of future military actions as the driver of arms procurement.

The case of Mistral, which one wonders where it will be built and how it will be used, Ivashov says well-connected lobbyist structures ensure what gets produced is exactly what their enterprises make.  He was somewhat encouraged that Putin, at Sarov, entertained turning to specialists and experts to examine the army’s requirements.

On GPV 2020, Ivashov concludes it’ll be a serious step forward if only half of what’s planned gets produced, but it can’t be equipment designed in the 1970s and 1980s.  He sees OPK production capacity problems too.  He questions whether Votkinsk can produce 400 solid-fueled ballistic missiles by 2020.

Returning to the big war, he questions a focus on defensive operations for Russian conventional forces, saying offensive capabilities are needed to deter potential enemies.  He claims reduced force structure and mobilization capability have become a joke in the General Staff:

“The main problem for the Chinese in a conflict with us is not defeating our brigade, but finding it.”

Ivashov’s just a little up in arms over the armor situation.  He all but accuses the General Staff Chief of being a paid (or bribed) lobbyist for foreign tank and armored vehicle makers.  He suggests that Army General Makarov should be placed in cuffs if he says the Leopard-2 is better than the T-90 [what about Postnikov then?], and the Main Military Prosecutor should investigate him.

So what is to be done first and foremost to strengthen the country’s defense capability today?

Ivashov replies get rid of Serdyukov and Makarov who have done great damage, and strengthen cadres in the OPK and military by replacing “managers” with those who can apply military science (as Ivashov was taught) to the problem of developing new weapons.

The always provocative Ivashov doesn’t venture whether he thinks  the current emphasis on defense capability will continue or have the intended results.  He seems sincerely to believe in a possible Western intervention in Russia’s internal affairs.  But it’d be more interesting to hear him talk about whether the army would fight for Putin’s regime in something less than that maximal contingency.  Ivashov, unlike some critics of Russia’s defense policy, shies away from blaming the once-and-future Supreme CINC for at least some of the current military state of affairs.

Putin and the Army (Part I)

Putin Flanked by Green Suits (photo: Konstantin Zavrazhin)

Candidate Vladimir Putin’s election manifesto on the military and national security appeared in today’s Rossiyskaya gazeta.  The rambling 6,500-word essay reads like most campaign literature — a series of feel-good sound bites with inconvenient facts, details, and background left out.

But let’s get at it.

Putin says the changing world presents risks of an unpredictable nature.  He insinuates that Russia should expect challenges to its sovereignty over its natural resources.  It can’t tempt others by weakness.  Strategic nuclear deterrence preserved Russia’s sovereignty in the difficult 1990s as it does today.

Putin continues his habit of excoriating the long-ago 1990s but largely ignoring what he did or didn’t do during the 2000s.

He points right off to the GPV’s 19 trillion rubles to modernize the Armed Forces, and the coming FTsP’s 3 trillion for the OPK.  And, he says, he’s convinced the country can afford these expenditures.

Putin then turns to the nature of future war.  He wants the military to “look over the horizon” at the nature of threats in 30-50 years to determine what the army will need.

Deterrence has worked, and Russia keeps its nuclear “powder” dry.  But Putin points to the mass introduction of long-range, precise conventional arms becoming decisive even in a global conflict.

Someone tell Putin this is not news.  But there’s more.

Putin reveals that space and information (or cyber) warfare may be decisive in the future.  Beyond this, he continues, new beam, geophysical, wave, genetic, and even psychophysical weapons may be developed.  Their effects may be comparable to nuclear weapons but more acceptable politically.  So, expect the role of nuclear weapons in deterring aggression to decline.

He then segues wildly to responding quickly and effectively to other new challenges, and how Russia’s ODKB partners will help stabilize the “Eurasian space.”

OK.

Putin proceeds to a long-winded explanation of how the army saved Russia in the terrible 1990s.  As mentioned earlier, he doesn’t have a lot to say about the eight years he was Supreme CINC.

Putin claims he rejected a proposal (he attributes to then General Staff Chief Kvashnin) to move SSBNs from the Pacific and consolidate them in the Northern Fleet.  He says permanent readiness units with contractees were formed on all strategic axes, and, he claims, they allowed Russia to “force Georgia to peace” in August 2008.

No mention that the large-scale introduction of contract service failed miserably during this time.  Also no mention of “winning” the Second Chechen War by ceding federal control of that republic to a brutal young warlord.

Putin rightly notes the Soviet Army’s mobilization model made no sense for Russia, and there was no alternative to building a New Army [starting in late 2008 when he was not president, and after things went so well for the army in Georgia].  He admits there were difficulties and mistakes in this process, but goes on to describe his view of what’s been done in the army.

Full-up permanent readiness brigades have replaced old cadre units.  “Non-core, auxiliary functions” have been moved out of the army to maximize time for training.  And effective Defense Ministry sub-units responsible for the military order have to guarantee the effective formation of technical requirements for the development and production of arms and equipment.

Yes, but that’s not happening yet.

Putin lists other changes in the Russian military.  C2 organs cut by 50 percent.  Four districts with air, air defense, and naval forces subordinate to them.  Seven large air bases established.  Twenty-eight airfields renovated, and 12 more set for this year.  The share of modern ICBMs increased from 13 to 25 percent.  Ten more regiments to be reequipped with Yars or Topol-M.  Putin says Russia has accepted its new strategic ALCM.  Dolgorukiy and Nevskiy will soon enter the fleet.  The Navy’s renewed its presence on the world’s oceans.

Then the Prime Minister turns to tasks for the next ten years — rearmament:  nuclear forces, VKO, comms, recce, C2, EW, UAVs and unmanned strike systems, transport aviation, individual soldier systems and protection, precision weapons and defense against them.  And he reemphasizes, new generation precision weapons need development and a larger place in Russia’s future doctrine.

Putin seems to say Russia’s happier with the capability of defeating any missile defense than trying to develop its own.  He again promises effective, asymmetrical steps to counter any U.S. MD.

Then, a ten-year acquisition laundry list from candidate Putin:

  • 400 ICBMs and SLBMs.
  • 8 Borey SSBNs.
  • About 20 multipurpose submarines.
  • More than 50 surface ships.
  • Nearly 100 military satellites.
  • More than 600 aircraft.
  • More than 1,000 helicopters.
  • 28 regimental sets of S-400.
  • 38 battalions of Vityaz SAMs.
  • 10 brigades of Iskander-M.
  • More than 2,300 tanks.
  • About 2,000 SP artillery systems.
  • 17,000 military vehicles.

The tanks are really surprising.  And the list doesn’t really even match the ten-year tasks Putin set out.

Look for the second half later.  It covers army social issues and the OPK.

Serdyukov Year-Ender (Part I)

Serdyukov Watches Troops with President Medvedev

Defense Minister Anatoliy Serdyukov gave a two-part interview to Rossiyskaya gazeta this week.  It covers some contentious issues, but the questions aren’t exactly hard-hitters, and there’s no follow-up on his answers.  Nevertheless, Serdyukov as always puts out a steady and consistent message on what he, the government, and military are trying to accomplish.  Much of the first part of his interview concerned this year’s GOZ problems and the Defense Ministry’s difficulties coming to terms with defense sector enterprises.

Serdyukov says he’s been occupied for two years with reaching agreement on prices, deadlines, and quality for arms and other military equipment.  But, he says, now producers have no reason to complain because they’re receiving 80-100 percent advance payments for their work.  Some contracts for ships, aircraft, and strategic missiles are long-term ones extending to 2017-2020.  He adds:

“The fact is we are completely forecasting the entire future activity of a company for many years to come.  This allows for planning for expenses and receipts, training personnel, introducing new technologies, reequipping the production base.”

Regarding the tussle over OPK prices, Serdyukov says he’s told enterprises to give the Defense Ministry their production cost [себестоимость], and the military department will make production profitable for them.  Producers can have a profit margin of 20-25 or even 30-35 percent, but, he says, component suppliers will be limited to a one-percent mark-up.

Many producers (Sevmash for one) blame their suppliers for their own high costs, but it seems likely that limiting sub-contractors to a 1 percent profit is a formula for failure.

But Serdyukov has one condition for profits of 30-35 percent over the cost of production:

“The difference [10 percent?] has to go toward the technical reequipping of the enterprise, the purchase of new technologies and licenses.  And this will lead to lower costs or improved technical characteristics and combat potential of this or that weapon in the future.”

Later Serdyukov noted the Defense Ministry will compensate producers for annual inflation but production cost and timeframe will remain fixed. 

Then questions turned to the issue of foreign weapons.  Serdyukov said the Defense Ministry can’t buy Russian arms that aren’t up to world standards in price and quality.  Russia, he said, is interested in foreign systems so it can understand where it lags or has already fallen behind.  He described cooperative ties with foreign producers, buying licenses, and organizing joint production of entire systems or components in Russia as a way to get domestic industry up to date.  Serdyukov said foreign characteristics and prices are always part of the discussion of price formation with OPK enterprises.

Serdyukov told RG he doesn’t believe the Russian defense sector’s potential has dissipated despite the economic and financial difficulties of the last 15 years.  But now, with a 10-year GPV in hand, Russia has to restore the volume of defense production to the level of the 1980s.

He said foreign purchases were mainly small numbers of samples for the Defense Ministry to investigate.  It bought Iveco armored vehicles for explosive testing, after which Russia proposed to produce them jointly with Italy in Voronezh.

Year Two

This blog completed its second year yesterday.  There were 288 posts in year two (a few less than last year).  Just a couple to go to reach 600 posts since December 10, 2009. 

One hopes the reading was half as worthwhile as the writing.  But frustration lingers.  It’s impossible to follow everything.  Adding Twitter provided a “release valve” for overflowing news.  Still there’s tension between posting short items and writing more detailed pieces drawing together many different sources. 

In 2011, Defense Minister Anatoliy Serdyukov and General Staff Chief Nikolay Makarov had plenty of interviews, official appearances, and other public utterances to cover.  There were a large number of high-level personnel changes, retirements, and dismissals to report.

Serdyukov eased a little on cutting the officer corps.  The Defense Ministry readied its new higher pay system while scandal plagued the stopgap premium pay scheme.  Military housing remained a major headache as always.

Moscow hit a wall on manpower and had to accept undermanning.  After acknowledging there aren’t enough potential draftees, the military is starting over (yet again) with an effort to create professional enlisted and NCOs through contract service.

This year began with questions about the GPV’s feasibility, but devolved into immediate problems with GOZ-2011.  The Russians threw money at the OPK without looking at the defense sector’s (and the procurement bureaucracy’s) capability to turn financing into the kind of weapons and equipment the military requires.  Difficulties ramping up production of naval and missile systems occupied media attention.  The public debate over the relative merits of buying Russian or foreign weapons made several headlines.     

So where is Russia’s military?

To this observer, the Russian Armed Forces are improving and beginning serious rearmament.  But the hour is late.  Significant future problems could derail recent positive changes.  These include new and old, unsolved economic, budgetary, social, demographic, and possibly even political challenges.  Not to mention purely military obstacles to modernizing the army and navy.

Your visits and page views grew significantly in year two.  Page views are about 400 a day, 2,000+ a week, and 9,000-10,000 a month.  We’ll see if this is the ceiling for this rather specialized topic.

Your views, opinions, and arguments are always appreciated.  Those sharing or highlighting data and evidence on issues are particularly valuable.

Its Own Duma Election

A site dedicated to all things Russian Navy called Flot.com has an interesting Internet poll.

The site asks visitors to vote for the party they feel will provide the greatest assistance in developing the Russian Navy.  Click the image below to see the results as of today.

Looking for the Pro-Navy Party

Pardon one for concluding this is pretty compelling.
 
Sixty percent of those responding say the KPRF will be most supportive of the Navy’s development.
 
Bucking Russia’s electoral law, Flot.com still permits an “against all” option.  So 18 percent say no party will provide the greatest assistance in the development of the VMF.
 
United Russia comes in third at about 10 percent.
 
And to think the “party of power” organized a GPV in which the largest portion will go to the Navy.
 
A pretty damning indictment.
 
Yes, it’s an Internet poll, and it’s influenced by its clientele.
 
No offense to a good site is intended, but Flot.com’s visitors could be older, and still more Soviet than Russian.  Who knows?  But they’re also knowledgable and interested in their subject.  Hence, they represent an elite, tough, and skeptical audience. 
 
The GPV notwithstanding, the yedinorossy have failed to convince them they’ll fix the Navy’s problems.
 

Pukhov’s Perspective

Thanks to VPK.name’s retransmission of Interfaks-AVN, we can look at Ruslan Pukhov’s latest comments on the State Program of Armaments, 2011-2020 (GPV-2020).  Recall he’s director of the Center of the Analysis of Strategies and Technologies.

In a nutshell, AVN concludes Pukhov believes the Russian Army’s rearmament requires much greater resources than provided in GPV-2020, but the country’s economic possibilities don’t allow for spending more:

“Twenty trillion rubles which were proposed to allocate for the purchase of armaments and military equipment by 2020 — this is the minimum amount essential for rearming the army, but at the same time it’s the maximum possible volume of resources which can be spent on armaments, proceeding from the possibilities of the country’s budget and economy as a whole.”

Pukhov goes on to say some experts have said 36 or even 50 trillion rubles would be required to rearm all Russia’s armed services and branches completely.  That, of course, is beyond the economy’s capabilities:

“Even the current plans are highly ambitious and entail very high macroeconomic risks.  In the event of the actual fulfillment of the plans for financing GPV-2020, the average annual expenditures on purchases of arms and military equipment will come to 2 trillion rubles a year, that is nearly €47 billion at the current rate.” 

For comparison, Pukhov told AVN Britain and France, with economic potential similar to Russia’s, each spend less than €20 billion annually on new weapons.

Pukhov sees military spending of 4 percent of GDP when the Armed Forces’ other needs are considered:

“Accounting for the need to realize not just the rearmament of the Russian Army, but also to increase significantly the number of contractees, to improve soldiers’ food, clothing, and pay, to resolve the housing problem for servicemen, it’s impossible to exclude that at some time military spending could reach four percent of GDP.” 

He sees it as a very high share of GDP for a country facing the modernization of health care and education, and also the renewal of all its infrastructure.  Still, he concludes:

“But considering the country’s defense was underfinanced for fifteen years and the high probability of the aggravation of the military-political situation in the post-Soviet space, especially in Central Asia, the military expenditures provided are not only acceptable, but even absolutely essential.”

In these sound bites, Ruslan Pukhov’s views sound reasonable, independent, and nuanced given that he tends to reflect defense sector interests.  He recognizes Moscow’s at the limit of what it can spend on new weapons, and he cites figures you read here or here early this year.  He could have noted that the goal is only to renew 70 percent of the Armed Forces’ inventory by 2020.  He acknowledged it’s a lot of money for a country, and a military, facing other expensive challenges, but he maintains it’s necessary by pointing to the neighborhood Russia lives in. 

It’d be interesting, however, to see an interview or article exploring the possibility that Russia can meet its most likely, most realistic military threats and requirements more efficiently and effectively than envisaged under GPV-2020.  Perhaps some services, branches, and unified strategic commands need more money and modernization than they will get, and maybe others need less.  One doesn’t read much about relative priorities within the Armed Forces beyond the fact that the Navy will be emphasized and the Ground Troops won’t.  The rest of the military apparently will move forward on a very broad front.  It’s probably not the best force modernization approach.

Russian Military Power

Finland’s National Defense University has published a study entitled Russian Politico-Military Development and Finland.  If the media reporting is accurate, it may read a little like a latter-day Soviet Military Power.

Now few have read the document since there’s only a two-page English precis to go with press accounts of its contents.  Perhaps the entire thing will appear in English soon.

But here’s the gist. 

NATO and other Western countries believe war is an outdated idea, and U.S. power and interest in Europe are waning.  Russia, meanwhile, is seeking to revise the verdict of the Cold War, restore its great power status, and regain the Soviet sphere of influence.

It’s modernizing its crumbling armed forces with increasing investments [i.e. the 19-trillion-ruble State Program of Armaments or GPV 2011-2020].  The formation of the Unified Strategic Command (OSK) West (aka the new Western MD) has shifted the Russian Army’s center of gravity from Western Europe to the Northwest [at Finland].  And:

“The Russian armed forces are being improved by forming high-readiness forces with a capability of achieving operational results directly from peacetime employment.”

Finally, the study’s authors seem to see a Russian military resurgence that needs to be met by reinvigorating Finland’s territorial defense system:

“A large military reserve force is an indication of the will to defend the country, and has a major preventative value.”

It’s worth challenging three central propositions here.

Russia’s “increasing investments” in its military.  The Finnish report is reacting a priori to plans for large outlays for defense procurement that may or may not happen.  They authors are concerned about Russia’s intention to modernize, and what its forces might look like after modernization.  The current GPV could go the way of its predecessors; the first annual state defense order (GOZ) to fulfill the GPV isn’t exactly proceeding smoothly.  It’s important also to consider what’s being modernized.  In many cases, Moscow plans to replace arms and equipment from the 1980s and earlier, and not everything will be a world-class fourth- or fifth-generation weapons system.  Lots of the “new” models will be based on late Soviet-era designs.  

The shift to the Northwest.  To some extent, there may be an effort to get forces closer to their likely theater of operations.  But hysterical assertions of vastly increased Russian forces shouldn’t be taken seriously.  It’s largely the same forces organized differently, and certainly not all opposite Finland.  The creation of OSK West or the Western MD was also an attempt to cut redundant command and staff echelons and get the Ground Troops out of the expensive environs of Moscow and Moscow Oblast.  One could easily argue the Defense Ministry’s placed a higher priority on forces in the Southern or Eastern MDs. 

The formation of high readiness units.  The report’s authors are quoted as saying Russia’s high readiness forces will be ready to leave garrison, and begin offensive operations in an hour, according to Vzglyad’s interpretation of a Russian-language media outlet in Estonia.  In reality, the forces are now more highly ready to depart the garrison and get combat orders.  No one can say what those orders will say.  Any combat missions will have to be carried out by troops who generally have less than six months in the army, and they’ll be lucky to execute a successful defensive operation.  Also, let’s hope the Finnish study says that this high readiness was really more about getting rid of useless, hollow, low readiness cadre units.

But, as Newsru cites a former deputy commander of the OGV(s) in the North Caucasus, it’s hardly possible to talk about Russian efforts to encircle anyone “in the condition which we’re in, and with those obvious army problems which we have.”

No one should misunderstand.  The Finns are to be admired for their perspicacity when it comes to Moscow.  They’re keen observers of what’s happening in Russia.  They have to be. 

But there’s obviously a huge issue of perspective.  Things look very different from Helsinki, Washington, Paris, London, and Berlin.  Russia’s capabilities are somewhat hyped in a public debate about what level of forces and readiness Finland needs to deter Russia.

But, all in all, it doesn’t help anyone in the long-term to inflate [re-inflate?] a Soviet-style military threat.  A realistic assessment of Russian capabilities and intentions will lead to practical, affordable measures to counter them.

Quoting Tolya

Tolya’s remarks to the press today made quite a few headlines, and left a few useful benchmarks for the future.  Defense Minister Serdyukov addressed procurement and manpower issues.  Here are his quotes from RIA Novosti and ITAR-TASS.

Tanks for Nothin’

“We met the designers who proposed their preliminary work to us.  60 percent of what was proposed is old work.  Therefore, we still declined these proposals.”

“Now it’s more expedient to modernize our country’s tank inventory than to buy new ones, for example the T-90.”

Cold Water on Carriers

“We have no plans to build aircraft carriers.”

“Only after this [a preliminary design of what this ship might look like], the Genshtab together with the Navy will make a decision on the need for such a ship.”

SSBNs Aren’t Automobiles

“‘Bulava’ flew, this is good news.  We understand precisely that it’s possible to launch serial production of the missile on this variant.”

“We got the result, now it’s possible to load SSBN ‘Yuriy Dolgorukiy’ with ‘Bulava.'”

“We’d like to do this [test Bulava from Aleksandr Nevskiy], but we understand that to plan this precisely is impossible.  A nuclear submarine isn’t an automobile.”

Bullish on Arms Deliveries

“Deliveries of strategic missiles ‘Topol-M,’ ‘Yars,’ ‘Avangard’ will increase three times, ‘Bulava’ and ‘Sineva’ missiles for strategic submarines one and a half times, aircraft four times, helicopters almost five times, air defense systems almost two and a half times [in 2011-2015 compared with 2006-2010].”

Not Going Below a Million Men

“There are no such plans, there are no questions of cutting manpower.  We’re striving for the entire army under the million number, and it isn’t planned to cut this figure.”

“On account of this [increasing contractees from 2014], we’ll manage without fail to get through the demographic hole which is anticipated in 2014.”

Two Arctic Brigades

“The Genshtab is now developing plans to establish two of these formations.  In the plans, deployment places, armaments, manning, and the infrastructure of these brigades need to be specified.”

“It’s possible this will be Murmansk, Arkhangelsk, or another place.”

Rosoboronpostavka Understaffed, Ineffective?

This author has written several times that Rosoboronpostavka – the Federal Agency for Supplies of Armaments, Military, Special Equipment and Material Resources – is supposed to be key to making the GOZ and GPV work.  It’s supposed to take responsibility for negotiating, contracting and taking deliveries out of the hands of military men, so they aren’t tempted by bribes and kickbacks from manufacturers, and can concentrate on the specific requirements for weapons and equipment that needs to be made and bought.

In mid-2010, erstwhile Putin ally Viktor Cherkesov (who once warned of infighting and corruption among high-ranking security service veterans) was unceremoniously booted from Rosoboronpostavka.  President Dmitriy Medvedev criticized the agency (and Cherkesov) for not accomplishing much, and he moved it under the Defense Ministry, declaring that it would become a reinvigorated part of the effort to rearm the Armed Forces during the next decade.

Nadezhda Sinikova

With great fanfare, Defense Minister Serdyukov’s confidant, Nadezhda Sinikova took over at Rosoboronpostavka.  This all fit pretty well with Serdyukov’s general intent – to establish strict control over the Defense Ministry’s “financial flows,” and to civilianize Defense Ministry functions that aren’t clearly military in nature.

It’s seemed that Sinikova’s Rosoboronpostavka has remained stillborn, much like it was prior to mid-2010.  At least, nothing was heard from or about it until a 3 March article in Rosbalt.ru.  Now we have to be wary — Cherkesov’s wife, Natalya Chaplina is Rosbalt’s General Director.  Be that as it may, the article seems pretty solid.

According to Rosbalt.ru, Rosstat published data on salaries in the federal executive organs, and experts were surprised the highest average paychecks — 135,000 rubles per month or more than 1.6 million rubles per year — are in Rosoboronpostavka, an organization not even really functioning.  The average 12-month federal salary is 728,000 rubles, about 60,000 per month.
 
Rosoboronpostavka is working only in a technical sense.  The different power ministries and departments haven’t hurried to hand over authority to conclude contracts for them, and they’ve tried to sabotage the agency’s work, according to Igor Korotchenko. 

Rosoboronpostavka’s supposed to have 1,100 professional employees, 980 in the Moscow headquarters.  A source close to Rosoboronpostavka claims that, prior to mid-2010, not more than 10 people worked for the agency, and it didn’t have its own office.  They worked in a room in Rosoboroneksport on Moscow’s Ozerkovskiy Embankment. 

The Rosstat data says Rosoboronpostavka has the lowest staffing level of any executive structure, only 15.5 percent or 152 people against an authorized level of 980.
 
Before the mid-2010 changes, Rosoboronpostavka salaries had been 50-70,000 per month; the director got 70,000 and he reported to Prime Minister Putin.  Now, with its status downgraded and reporting to the Defense Minister, the agency’s pay has increased several times.
 
Experts think the pay’s kept high because the country’s leadership wants to deter corruption in the state defense order (GOZ), but deputy editor-in-chief  the journal “Armaments and Economics,” Professor Sergey Vikulov says this high pay comes “from the naive belief of our leaders that high pay will deter bureaucrats from bribery.” 

One notes Vikulov’s journal is the professional publication of the 46th TsNII, not exactly an objective voice since it used to form the GOZ (and probably collect the bribes) pretty autonomously before Rosoboronpostavka was established.
 
Korotchenko believes even bureaucrats who earn millions will be tempted to “saw off” part of the billion-ruble contracts they oversee.  He goes on to say  corruption in the Defense Ministry directorates occupied with the GOZ and the OPK already caused the failure of the two previous state programs of armaments (GPVs).
 
Rosbalt.ru also claims the Audit Chamber has said GOZ-2009 was only 50 percent completed.  Then it cites NG‘s (Mukhin’s) 70 percent fulfillment figure for GOZ-2010.

Although one expert hopes higher pay at the agency is tied to greater productivity in processing contracts, a Rosbalt.ru source says as before only a small number of contracts are being completed.  The expert is just about ready to give up searching for a logical explanation for the lack of elementary order in Russia’s management structures. 

But Korotchenko thinks it might be early to judge Rosoboronpostavka, since it’s still establishing itself.  Perhaps at the end of this year or the beginning of next, it will take over all power ministry arms and equipment procurement contracting, he says.

The Defense Sector’s Systemic Failure

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.