Wednesday, May 28, 2014

Does Russia really need the Ukrainian military-industrial complex?

I really like the Asia Times, but the article I saw in it today left me wondering how it could have gotten past the editors. The article in question is Ukraine: A military-industrial complex to die for by Gregory J Moore. While I most definitely encourage you to read the article in its entirety, its thesis is simple: the Ukrainian military-industrial complex is, if not vital, then at least crucial for Russia. Moore gives several examples which I want to quote here:

1) Antonov is not a Russian aircraft manufacturer, its Ukrainian
2) The Ukraine builds many aircraft and helicopter engines

3) The Ukraine builds missiles, rockets and the SS18
4) The Ukraine accounts for 30% of the USSR's shipbuilding industry
5) The Ukraine builds APCs and tanks including the T-84

6) The Ukraine builds air-to-air, surface-to-air and cruise missiles
And all this is true.  So what is the problem here?

The problem is that all the examples Moore gives are Soviet-era systems.  Even the T-84 is nothing but an upgraded T-80.  The Ukraine, just like Russia, has inherited a lot of top-quality Soviet technologies.  These technologies were, in fact, so good, that both the Ukraine and Russia could literally "coast" for almost 20 years on that technological basis without really developing any truly new systems.  A good example of that is the SS-18 missile which is still one of the most powerful ones on the planet.  But it's design is really late 1950s early 1960s technology and it runs on liquid fuel.  And yet the Russian Ministry of Defense recently wanted to purchase more of these missile.  Why?  Money: the Ukrainians were willing to sell them cheap.  Now the deal appears dead, much to the delight of the Russian military which did not want that missile to begin with, but which had been told that it was the cheaper solution to a more expensive but also more modern purely Russian alternative.

And here is the key issue here: Russia does not need the Ukrainian MIC, Russia could produce all it needs indigenously, but that would be more expensive.  So why spend more when you can spend less and use the difference in developing other sectors?

When the Soviet Union broke apart Russia lost not only the Ukraine but another 13 republics many of which had Soviet MIC resources and many have wondered whether Russia could go by without them.  The test of that proposition is simple: can Russia produce completely new weapon systems or not?  And the clear answer is yes - Russia can and Russia has.

Take, for example, the new Russian submarines (Borei-class or Yasen-class), new combat aircraft (Su-34 of PAKFA), new tanks (Armata), new ICBMs (SS-27) or SLBMs (SS-N-32).  Now, of course, since the weapons-design cycle is very long, all these systems have their origins in Soviet designs, and some might even have part purchased from the Ukraine (or other ex-Soviet states).  But the fact that Russia assembled, tested and deployed these systems proves that Russia has the technological know-how to control all the technologies used in them.  This is especially true of very complex systems like submarines or advanced combat aircraft.  For the general military, the goal is to have the Russian armed forces equipped with new military systems for 70% of all its equipment by 2020.  That is ambitious but doable.

At least two top Russian weapons experts (Dmitri Rogozin and Igor Korotchenko) have addressed the issue of the importance of the Ukrainian MIC and, on one occasion, even Putin himself.  All three were categorical: a possible "loss" of the Ukrainian MIC for Russia is not a problem for Russia at all, but the perfect opportunity to allocate the funds needed to develop indigenous and much more modern capabilities in Russia.  This is exactly the same situation as with the western credit card companies: the US sanctions provided Russia with a much needed pretext and opportunity to develop a Russian credit card system which, as it has been announced in Shanghai, will be compatible with the Chinese one.

Speaking of China: China is the *perfect* partner for Russia in nearly all economic terms, especially in the military-industrial cooperation.  And, unlike the Ukrainian technologies, the Chinese technologies are far more modern, if probably more expensive.

Putin and Medvedev have already set as a strategic goal for Russia to become fully independent from foreign suppliers for all its strategic needs. Dumping the Ukrainian MIC is just a logical step towards this goal. It is an opportunity for Russia, not a problem.

Moore concludes by saying that "The value and importance of Ukraine's military industrial complex to Russia is an important reason Moscow will not let go of eastern and southern Ukraine, and consequently it may be that sanctions alone will not be enough to make Putin back down."  I completely disagree.  Not only does Russia not "want" the Ukraine or even the Donbass, it is going out of its way to avoid having to "own" it (following a hypothetical intervention).  The very last thing Russia needs is to have to support a huge population working on 20-year old technologies which nobody wants and which Russia does not really need.  By the way, and for the very same reasons, neither does the EU or US need to Ukrainain MIC: they have their own which is much more modern and which they control.

I will say it again and again and again.  Russia does not need the Ukraine, not its lands, not its MIC, not its coal and not its people.  What was true in 1991 is not true any more in 2014.  Furthermore, the Ukrainian oligarchs have truly destroyed the whole country and laid waste to its MIC: did you know that the top 50 Ukrainian oligarchs own 50% of the Ukraine's GDP?  It is mind boggling, really.  Or why do you think that the Ukrainians are still using (old) Mi-24s used in Africa by the UN instead of their own helicopters?  Because that is all that they have left, literally!  Recently, when the Russians took control of Crimea they found out that even the most prestigious youth camp (Artek) was in a state of total abandonment. The oligarchs neglected even that jewel.

For years Russia had tried to make some kind of deal with the Ukrainians to develop a very interesting advanced transport aircraft: the AN-70.  But the Ukrainian politicians were making such ridiculous demands that the Russians eventually walked away in disgust (they ended up making a deep upgrade the IL-76 and they are now developing a wide-body long range transport aircraft with China which will probably have civilian and military variants).  So even if Yanukovich was still in power, how could Russia trust such completely unreliable partners?

The sad reality is that the Russians cannot trust the Ukrainians with anything. Not even paying their bills, nevermind participating in strategic military-industrial projects.  For that Russia now has China.  Let the EU "enjoy" its new found partnership with the Ukraine.  Good luck to them!

The Saker