Arms for Assad

Kremlin props up one of the Russian defense industry’s last customers, experts say

March 19, 2012


Worried about a drop in revenue for Russia’s arms industry—as well as the financial hit that a company with ties to Vladimir Putin will take—Russian diplomats have blocked efforts to stymie the flow of weapons into Syria, defense industry analysts say.

Russia has been a traditional supplier to Syria and other Arab states for decades. But its customer base has dwindled with nations such as Egypt switching to the United States as their primary supplier, and other states—such as Iraq and Libya—now under new leadership.

Arms export analysts point out that this makes Syria practically the only important client for Russian weapons left in the region. It may also be the largest purchaser at present due to the overall decline of Moscow’s arms business.

"An international embargo that would cut off Russia’s arms sales to Damascus is the last thing that the ruling circle around Vladimir Putin wants," said one Russian defense analyst. "There are too many interests tied up in these sales and too much money involved for a defense industry that needs all the orders it can get at the moment."

As negotiations continue at the UN on a global treaty to regulate arms transfers, neither Russia nor China has been willing to agree to any language that would prohibit arms sales to nations where there is some reasonable expectation that the weapons would be used to commit human rights violations—such as in Syria.

Meanwhile, Russian Foreign Minister Sergey Lavrov has said Moscow’s arms sales to Syria require no explanation and that any resolution from the UN Security Council that would disrupt these sales is considered unacceptable.

Moscow’s UN Ambassador, Vitaly Churkin, previously stated any resolution, such as one calling for Assad to step down, would be dead on arrival.

"We will not allow it to be passed," he said. "That is unequivocal."

Russia’s bid to hold on to its customers in Syria comes as its business in the Pacific region has begun to dwindle.

During the post-Soviet turmoil of the 1990s, Moscow’s defense industry was one of the few sectors of the Russian economy able to do much in the way of export sales. More than half of that business came from Asia.

Yet Russia’s arms sales to Asian customers have been falling off for years.

One reason is that China, which used to be one of Moscow’s best customers, is now producing Russian weapon systems at plants across the country under an authorized license.

Another reason is that China has begun manufacturing illegal, reverse-engineered copies of what they once purchased from Moscow.

The Shenyang Aircraft Corporation J-11B and J-15 fighter aircraft are near-perfect replicas of the Russian-made Sukhoi Su-27SK and Su-33 fighter aircraft. The latter is a carrier-capable design that potentially can be launched from and retrieved on-board the former Soviet-era Varyag aircraft carrier acquired by China at the end of the 1990s.

The ship is preparing to begin flight trials with the J-15 sometime this year.

India’s move away from Russian systems was another blow to the industry.

After years of problems with reliable supplies of spares, price overruns, delays in deliveries, and other traditional shortcomings of the Russian arms export customer support network, the Indian armed forces decided it was time to "diversify their supplier base."

While selecting which fighter aircraft would be purchased for the mammoth Medium-Multirole Combat Aircraft (M-MRCA) tender the Indian Air Force (IAF) passed over the proposed Russian entry, the Mikoyan MiG-35.

New Delhi has now selected the French-made Dassault Rafale fighter for this award for 126 aircraft plus 63 options.

"Many of our senior defense officials were concerned that we already have ‘too many eggs in the Russian basket,’" said one Indian analyst.

The loss of the Chinese and Indian arms markets has left Syria as the only near-term cash cow for Russia’s defense industry. Syrian sales are worth up to U.S. $6 billion and were a major portion of Russia’s record defense export sales year, according to a Moscow-based think-tank, the Centre for Analysis of Strategies and Technologies (CAST).

CAST’s director, Ruslan Pukhov, put the issue into perspective for the Russian press when he told a Moscow paper that, if Assad goes, "Russia will lose everything. Syria is one of Russia’s top five clients. Russia already concluded with Syria contracts for $4 billion and has $2 billion more in potential contracts on the way."

Russian specialists who follow the arms trade point out that Moscow lost what were potentially billions in weapons sales after the 2011 NATO-led ouster of Libya’s Muammar Qaddafi. The Kremlin is not anxious to see history repeat itself in Syria.

Moreover, the ruling elite around PM (and now president-elect following the fraudulent March 4 elections in Russia) Vladimir Putin has no small interest in seeing that these sales with Syria are concluded and that money changes hands as planned.

The Russian arms business is largely overseen by a large holding company called Rostekhnologia, which is an acronym for "Russian Technologies." The firm’s head, Sergei Chemezov, has ties with Putin dating back to the Cold War when they both served as KGB officers in the former communist German Democratic Republic (GDR).

Chemezov has moved up the ladder with Putin and has almost always had a senior role in Russia’s arms exporting hierarchy. The arms sales organizations in Russia are known for employing officers from both the former KGB and Russia’s military intelligence service, the GRU.

One of the major foreign policy initiatives at the beginning of the Obama administration was a "reset" in relations with Moscow.

The theory of reset was that, in exchange for certain gestures and incentives, Russia would be willing to help mediate and use its influence in trouble spots of the world such as Iran, North Korea, and Syria.

One of those incentives was removing the Russian state arms export agency, Rosoboronexport, from the U.S. State Department’s blacklist of weapons sellers. The agency had originally been placed on that list for sales made to Iran and other states that sponsor terrorism and have continued to develop nuclear weapons.

"The theory behind the ‘re-set’ was that Moscow would respond to this and other moves from Washington by engaging in more responsible arms export activity," said one US-based defense export analyst. "This has unfortunately—at least with Syria now—not turned out to be the case."