Dreams of a Salesman: The Russian Drive to Increase Arms Exports
Gaddy, Clifford, Allen, Melanie, Brookings Review
When, in 1992, the Russian government cut weapons purchases an almost unimaginable 68 percent, the nation's reeling defense industry seemed at first to have little choice but to undertake a definitive conversion to producing civilian goods. But while many arms manufacturers did indeed make a serious effort at conversion, numerous others asked if it would not be easier to find new customers for their old products--weapons--than to change over to a new, civilian, product. Managers and workers of hundreds of Russian defense enterprises spoke of arms exports not merely as one option for their industry, but as its only hope for survival. And Russia's political leaders lined up solidly behind the decision to increase arms exports.
As it turned out, though the defense sector weathered the 1992 crisis unexpectedly well, thanks mainly to big government subsidies, few Russian arms enterprises enjoyed any export success at all. For most enterprises, the export option remained unrested. But it is beginning to be tested today--and the prospects cannot be encouraging to the Russians.
The Arms Export Consensus
President Boris Yeltsin had spoken out in support of an active arms export policy soon after the August 1991 coup attempt. As early as October of 1991, he claimed to have discussed with President Bush the possibility of dividing up the world's arms markets, and in a widely publicized Izvestiya interview in February of 1992, he described arms exports as a potential "shock absorber" to mitigate the impact of deep procurement cuts.
Before long, other top leaders of the Russian government were echoing Yeltsin. Last December, Yegor Gaydar, then acting prime minister, stated unequivocally that Russia had "absolutely no grounds" to leave the arms export market. Last February Foreign Minister Kozyrev made access to Western arms markets a central issue in talks with U.S. Secretary of State Warren Christopher. Defense Minister Pavel Grachev has been actively involved in seeking new arms markets abroad.
Yeltsin's opponents, too, are on the arms sales bandwagon. Vice President Aleksandr Rutskoy recently expressed his view that "all shame should be brushed away, and military equipment should be sold to the states that want it." Arkady Vol'skiy, a key leader of the centrist forces in Russia and co-founder of Civic Union, is also on record in support of expanding arms sales.
Government officials have become increasingly aggressive in pursuit of export success. Yeltsin now appears to view arms exports as a long-term policy, not a temporary expedient. At a cabinet meeting in January, he questioned the need to convert military plants to nonmilitary production. Noting the "colossal market" for military products, he wondered whether "we just might have to rehabilitate the factories of the military-industrial complex that have been retooled to produce pots and pans." Russian officials are also repeatedly raising the demand that Russian defense enterprises be given access to Western arms markets.
Yeltsin is being pressed harder to reverse his policy of adherence to United Nations sanctions on arms exports, though to date he has not wavered. In late 1992 and early 1993 a number of press reports, citing various official sources, reported Russian losses from adherence to the sanctions at anywhere from $7 billion to $27 billion. In February the reformist Deputy Prime Minister Aleksandr Shokhin said that Iraq was ready to start repaying the billions of dollars it owes Russia for arms if Russia would withdraw its support for UN sanctions against Iraq. A nonreformist Russian government, warned Shokhin, would not dismiss such an offer.
The government's motives for pushing arms exports are numerous and complex. Primarily, arms exports would help maintain the defense industrial base and also earn hard currency to finance conversion. They are also one way of paying some of the former Soviet Union's daunting foreign debts. …