AP NEWS
Related topics

Russians Try To Break Into International Arms Sales

October 8, 1992

MOSCOW (AP) _ The arms boom of the Cold War brought Russia power but not prosperity. With the West no longer an enemy, defense barons want profits from the country’s vast reserves of MiGs and other military hardware.

For the first time, Russia actively is marketing its most advanced planes, tanks and missiles. The government is not fussy about the buyer. Even former enemies are encouraged to shop in the Russian arsenal.

But the desperate drive for cash and need to keep making weapons to sell is jeopardizing plans to convert the defense industry to civilian use. Russia also is finding there is lots of competition in the world arms market.

″The situation in the arms market is bad. The Cold War is over. The market is full. But we have a large arsenal,″ Minister of Conversion Mikhail Malei said in an interview. ″And we need money to fund conversion.″

Malei and his team are taking a different approach than Soviet President Mikhail S. Gorbachev, who tried to shift the defense industry from tanks to toasters.

Under Gorbachev’s plan, a radar factory began producing titanium toasters. They worked fine, but cost 124 times more than those made at a civilian factory, said Malei, a close aide to Russian President Boris Yeltsin.

Conversion is a political as well as an economic problem. Yeltsin’s team feels it has no choice but to sell weapons since closing factories would throw millions of people out of work and could cause a social explosion, Malei said.

″The military industrial complex is very dangerous,″ he said. ″It’s a huge organization. It can poison everything around it.″

He has recommended that up to 60 percent of Russian defense factories continue to churn out military products and use the profits to convert the rest.

About $150 billion will be needed over the next 15 years to convert the defense industry, he said. Russia could earn about $10 billion this year by selling weapons in stock.

New government offices are being set up to market a range of hardware, including formerly secret weapons, advertising them at home and abroad and showing them off at an international air show near Moscow.

The former Soviet Union did export weapons, but mainly to its allies in Eastern Europe or developing nations, which got the weapons free or on easy credit.

For the most part, the Eastern European countries no longer want Russian weapons and are buying from the West when they can afford it. The Russian government has tightened up credit terms for the rest of the world.

Russia also lost three important markets in Iraq, Libya and Yugoslavia after joining international sanctions against its former steady customers. The fall of the Marxist regime in Afghanistan also cost Russia a client.

Now Russia is trying to sell to stable governments capable of paying cash, such as Middle Eastern nations, Malaysia, China - formerly a rival - and Turkey, a member of the North Atlantic Treaty Organization.

″We want to participate in the world market. These are new times,″ said Mikhail Simonov, chief design engineer of Sukhoi fighter-bombers.

Interest is high among countries that cannot afford Western weapons.

At the Zhukovsky air show in August, Syrian shoppers scrambled over night terrain observation equipment, and the Chinese hovered around Su-27 warplanes and anti-missile equipment.

China already has taken delivery of 12 Su-27s this year and plans to buy another 12 of the sophisticated fighter-bombers later this year, Russian Defense Minister Pavel Grachev told Russian television in August.

Turkey plans to buy $300 million of Russian weaponry, mainly helicopters and armored troop carriers, Turkish Interior Minister Ismet Sezgin told the Turkish newspaper Milliyet.

Russia hopes that high Western prices will lure back its former customers in East Europe.

But Russia could face tough competition from other former Soviet republics like Ukraine, Belarus and Kazakhstan, which have large military stocks and industries and could undercut Moscow.

So far, sales have been modest, in part because the Russians have set their prices too high. Western military experts who attended the Zhukovsky air show said the asking price of $40 million for a MiG-29 was far too steep.

″The market is full of arms,″ said Col. Sergei Chumachenko, a spokesman for the weapons section of the Ministry of Foreign Economic Relations. ″We feel the competition and the loss of our old markets.″