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Saturday, February 10, 2007

Russia's Military Dollars go down the Rathole

Writing in the Moscow Times, columnist Alexander Golts explains that no matter how much Russia decides to spend on its military, it won't acquire real military power:

There are three ways to deal with any problem: The right way, the wrong way and the bureaucratic way. Instead of searching for a workable solution, under the bureaucratic approach, create a new institution to deal with the problem. An impressive demonstration of this approach came in the form of the Kremlin's recent decision to create a federal agency to oversee the delivery of arms and military technologies and materials.

The problem is that Russia's leadership, however much it has tried, has for years been unable to increase the effectiveness of arms spending. Every year the Defense Ministry requests about one-third more funding for the purchase of weapons, with the total now at 300 billion rubles, or $11.3 billion. The return on this investment has not been very impressive. This year the army will take delivery of 15 strategic rockets and an unspecified number of aircraft, tanks and other armored vehicles. Senior officials with the Defense Ministry have talked about plans "to equip one long-range aircraft squadron, six aircraft and helicopter squadrons, seven tank and 13 motorized infantry battalions with new and modernized equipment." But nobody has provided specifics on the breakdown between new and simply modernized equipment. The reason is that the ministry isn't sure how many new weapons it can get its hands on. When the defense department announced a plan last year to buy 30 new tanks, the suggestion was met with laughter.

The Defense Ministry can't fathom why military orders are filled so slowly or why weapons manufacturing costs have risen so sharply. Defense Minister Sergei Ivanov recently complained that prices in the military-industrial complex were "not entirely in order" and were often tentative. He seems to believe that the directors of military contractors are milking military contracts for all they can get. The new agency has been set up to deal with the problems with costs and meeting production deadlines. Ivanov also said the new agency, which will administer billions of rubles in budget funds, was guaranteed to be free of corruption. He said this was the case because it will be staffed by civilians and will not answer to the Defense Ministry. After six years in charge at the ministry, Ivanov clearly has no illusions about his subordinates.

This might all generate some confidence if it were not for the fact that Ivanov was himself made deputy prime minister and chairman of the military-industrial complex with the purpose of exercising more control over the sector. He was called on after a federal service created to monitor defense industry orders also apparently failed to deliver the expected results. That agency came into being to take over for the Federal Industry Agency. Deputy defense minister for armaments, General Alexei Moskovsky, and President Vladimir Putin's adviser on military-technical questions, Alexander Burutin, are also responsible for such oversight. Given that each of these organizations and positions was given full authority over the issue when created, it is hard to believe that the problem is the lack of coordination, management and control.

The origin of the problem is much more serious. It derives from the Defense Ministry's inability to adapt to a market economy. Throughout the 1990s, the ministry and firms working in the military-industrial complex perpetuated a lie. The ministry acted as if it were always just about to receive new funds for weapons, while defense firms, long having lost most of their suppliers and modern technologies, tried to give the impression that they could fully equip a modern army as soon as they received the money.

The whole myth of the military-industrial complex was exposed the moment the Defense Ministry actually came up with the cash. It became clear that there was no manufacturing base from which the component parts could be assembled. Parts left over from the Soviet era were sufficient to build only one prototype of each weapon. When talk turned to small production runs of each, it became evident that the industry was up to the task. Factories that had provided parts during Soviet times had long before switched to other products, so some of the parts had to be made practically by hand. This, in turn, created the problems with deadlines and rise in prices. As the Defense Ministry has been unable to determine which weapons it needs most urgently, it has tried to get its hands on all of them -- from pistols to strategic rockets -- at once. So even with the increases in the procurement budget, there never seems to be enough money.

The problem is that the creation of yet another oversight agency isn't going to increase the effectiveness of this spending. All this will do is introduce another bureaucratic layer between the manufacturer and the customer. A much more effective approach would be to create a single oversight structure, responsible to the State Duma. This structure would help prioritize orders and monitor both the ministry and the manufacturer in their fulfillment.

The problem with this approach, of course, would be convincing Ivanov that the parliament should have any say over how he does his job.


Michel said...

"The ministry acted as if it were always just about to receive new funds for weapons, while defense firms, long having lost most of their suppliers and modern technologies, tried to give the impression that they could fully equip a modern army as soon as they received the money."

This is a nice passage. Reminds me of the old Soviet joke: "They pretend to pay us, while we pretend to work."

La Russophobe said...

Hi Michel,

Thanks for the comment. It's an apt analogy, and if we change it to read "they pretend to pay us and we pretend to defend the country," it takes on the full horror of neo-Soviet Russia. Those who purport to be Russia's patriots in fact destroy the country, just as in Soviet times, and they start by killing the actual patriots, like the valiant Anna Politkovsksaya.