Russian Government Priorities

The Russian government is being even more explicit in its priorities.  "Competitive serial products" is a good phrase for arms exports.

“The military-industrial complex will receive a serious impetus. It should become a source of technological innovation, both in the military and civilian sectors,” Medvedev said at a government meeting. 

“We should boost our research and development to build advanced specimens of armaments and military hardware and conduct technical retooling of enterprises so they can roll out competitive serial products,” he said.

And Now Corruption in Arms

Transparency International has come up with a new index of corruption in the defense sector.  I haven't had a chance to dig too deeply into the details yet.  Unsurprisingly Russia ranks high (low?) on corruption in the study.

The report can be found here.
A press release can be found here.

This critical passage comes from the press release:

The Index shows that only 15 per cent of governments assessed possess political oversight of defence policy that is comprehensive, accountable, and effective. In 45 per cent of countries there is little or no oversight of defence policy, and in half of nations there is minimal evidence of scrutiny of defence procurement. 

The study also finds that citizens are frequently denied basic knowledge about the defence sector. Half of the countries’ defence budgets lack transparency entirely, or include only very limited, aggregated information. In 70 per cent of the countries, citizens are denied a simple indication of how much is spent by their government on secret items.

The patterns of corruption from the front page of the report are not entirely unexpected.

 I am surprised there was not data on Canada in the study. Australia and Germany are the exemplar states for openness in defense reporting and relations.

I'll need to dig into this a bit further as a factor in arms transfers.  The ability of certain actors in society to enrich themselves through arms deals that are notionally being used to enhance the defense capabilities of the state is an interesting variant of the principal agent problem.

This is definitely an area that could use some further examination.

Arms Export Strategy as a Cause of Russia's Military Decline

Dmitry Gorenburg writes on Russia's military and does a great job of following the developments in that sphere.  In a recent blog post he discusses one of the implications of Serdyukov's prosecution for corruption and ouster as defense minister.

It seems that the new leadership team at the MOD has decided to stop using the threat of importing armaments from abroad to get Russian defense industry to improve the quality of its products. 

One of the interesting implications of the whole affair is summed up in the last paragraph of his post.

In the meantime, however, the defense industry’s defeat of Serdyukov reduces the likelihood that the military will get the equipment it needs. It will take time for the MOD to amass the political capital to fight back against the industry and its allies. The result will be that the industry will get its money, while the military will be promised new equipment that in many cases will not arrive on schedule. In a few years, the military’s situation will get even worse, while the MOD will have rebuilt some of its lost political capital.

One of the primary reasons that the US and Soviet Union (and now Russia) are the world's largest arms exporters is that there has been a large internal demand for those weapons.  If Russia's military collapse continues will it be as a result of a focus on using domestic weapons?  Those weapons slated for the Russian military (that are not delivered to domestic customers for various reasons related to the export focus of the industry) could lead to a lack of development of new weapons systems for the internal market.

This particular internal dynamic could lead to an interesting shift in the overall patterns of arms sales. 

The Power of Prisoners - A Brief note on Ratios

This post is a break from my usual obsession with arms transfers between states.  One of my side projects (and eventually hopefully more than that) is a project in which I examine the role of detainees on the military success of the surge in Iraq.  One of the arguments that I make in my working paper (link) is that one of the stronger signals that the US sent during the surge was to begin treating Shiite insurgents more like Sunni insurgents had been treated throughout the conflict.  One of the ways that this was done was through detention.

Detention was a strong signal - above and beyond rhetoric - that the US in connection with the government of Iraq was not going to play favorites.

Over the past few weeks protests in Iraq have increased. Sunnis are protesting what they perceive to be as uneven application of laws against the Sunni minority by the majority Shiites.  I found it interesting that one of the main areas of contention is detention policy.

Iraqi premier Nuri al-Maliki looked to head off protests in Sunni areas of the country on Tuesday with a prisoner release even as he threatened to use state resources to "intervene" to end the rallies. 

The move came as powerful Shiite cleric Moqtada al-Sadr voiced support for the demonstrations and predicted an impending "Iraqi spring" as ongoing rallies blocked off a key trade route connecting Iraq to Syria and Jordan for a 10th successive day. 

Maliki, who is Shiite, ordered the release of more than 700 female detainees, a key demand of demonstrators, the official appointed to negotiate with protesters, told AFP. 

"The prime minister will write to the president to issue a special amnesty to release them," Khaled al-Mullah said. 

Mullah said of 920 female prisoners in Iraqi jails, 210 had been accused or convicted of terrorism-related offences and could not be released. But, he said, they would be transferred to prisons in their home provinces. 

The remaining detainees, convicted on lower-level charges, would be released, he said. He did not give a timeframe for the process. (source)

Because my modus operandi is to throw a graph in to illustrate whatever news tickles my fancy, I will conclude this post with a graph from my paper referenced above.  It shows the ratio of Sunni to Shiite detainees in US custody during the course of major US operations in Iraq.

The most striking aspect of this graph to me is the huge imbalance of Sunni detainees that occurred in the aftermath of the major sectarian fighting within the country.  The ratio was more than 50 Sunnis detained for each Shiite.  By the time the surge was announced this ratio moved down into the 5:1 and 4:1 range where it held steady.

It would be interesting to have these same data for the Iraq government prison system.

France and Russian Ship Deal - Russia not to Build its Own Ships

Here is the story:

Russia's new Defence Minister has made the decision that Russia will not build Mistral class helicopter-carriers, the Vedomosti newspaper reports with reference to sources in the Defence Ministry. 

According to earlier agreements, France was to build two such ships, with the costs totalling more than a billion euros, while Russia was to build two more ships at its own shipyards. 

But, according to the periodical, the concept of using Mistral class ships by the Russian Navy has turned out to be questionable, while the building and maintenance costs, too heavy. 

France is already building two helicopter-carriers for Russia, with the first one due to be commissioned in 2014, while the second one, in 2015.
Both naval ships will be based in Vladivostok.

My question on this particular case is whether or not Russia is backing out because it just doesn't have the capacity to build enough advanced ships for its own navy while maintaining its ship export commitments.

Russia and India Arms Relations Redux

Vladimir Putin spent some time in India this past week.  One of the primary deals struck between the two states during the visit, was the sale of $3 Billion worth of Russian helicopters - a tender, which was rumored to be going to the United States earlier in the month.

The Russian Ambassador to India had this to say about plans for further cooperation between the two states: (source)

...the deals that have been struck as part of the ten-year programme of military and technical cooperation between India and Russia are estimated at $30 billion. 

On Monday, during the Russian President Vladimir Putin's visit to India, several important agreements in the military area were signed in New Delhi.

The helicopter and other aircraft deal looks like this:

Under one contract, India will buy 71 Mi-17B-5 Hip helicopters worth $1.3 billion, while the other provides for the delivery of assembly kits for 42 Su-30MKI Flanker fighters, worth $1.6 billion. 

The two countries also signed a number of cooperation agreements in the defense and technology sector, notably between Russian Helicopters and Elcom Systems Pvt Ltd.

Here is the blurb from a BBC story that really highlights the personal role that Putin is playing in getting these deals signed:

In an article in India's Hindu newspaper, Mr Putin described as a "historic step" the declaration of strategic partnership between the two countries signed in 2000. 

The Russian leader also said that the military co-operation between the two nations has reached an "unprecedented level". 

Russia's currently accounts for some 70% of India's arms purchases, the BBC's Sanjoy Majumder in Delhi reports. 

But India has recently signed a number of big defence contracts with the US and other countries, including France and Israel, our correspondent says. 

Russia is concerned, he adds, that its traditional position as India's main arms supplier could be under threat.

And that's the rub.  As I have already pointed out on this blog (11/30/2012 "Are they Related?"), India is one of Russia's primary partners.  China has gained ground recently, but India is still number one or two in all years since the early 1990s - and essentially helped keep Russia afloat in the arms export world in the 1990s.  The fact that Putin is soliciting arms deals and spending his time indicates that to the Russian government (in the form of Putin), arms sales are an important aspect of foreign policy.  This is mostly likely due to the domestic implications of losing the ability to produce arms and shutting down the factories that produce Russia's most sophisticated export materials.

Aggressive Tactics or Business as Usual?

RIA Novosti carried this story the other day: (link here)

MOSCOW, December 20 (RIA Novosti) - Russia’s Vnesheconombank (VEB) will provide Indonesia with a total of $399.5 million in credit to finance purchases of aircraft and related equipment from Russia’s state-run arms export company Rosoboronexport. 

credit will be provided for a seven-year term, Rosoboronexport said.
This is the second credit agreement between VEB and Indonesia’s Finance Ministry in the past two years. 

Last week VEB's deputy chief Alexander Ivanov said VEB won the Indonesian Finance Ministry’s tender to finance the purchase of six Russian-made Su-30MK2 Flanker multirole fighter aircraft.

After looking at aggregate numbers for arms sales, I am still not sure of how specific transactions go down most of the time.  Is this a fairly common practice, or is it unusual?

Here is a look at Indonesia's arms imports for the past 20 years (give or take) created using STATA and data from SIPRI:

Russia is the second largest supplier (By cost) of weapons to Indonesia in the period from 1991 to 2010.  However, the total amount of arms sales has been around $700 million dollars.  Here's a breakdown of Russia's sales (by year) over that same period:

The relationship between Russia and Singapore only began in 2001- and although it has been relatively steady, the maximum amount per year has been just over $200 million dollars.  My guess is that Indonesia is still not considered to be a reliable customer, and this financing deal is meant to try to lock Indonesia's government into longer-term deals that can bring them more fully into Moscow's arms corner.