The general trends in the development of the world arms market were correctly identified by the conductor of state policy in the field of military-technical cooperation.
The Cultural and Information Center on Stromynka hosted a press conference by Anatoly Isaykin, Director General of Rosoboronexport, “15 years of Rosoboronexport: stages of a long journey”. The readers of the "Military-Industrial Courier" are invited to his introductory remarks.
First of all, I would like to announce the results of Rosoboronexport's activities over the past 15 years. This is exactly the time that has passed since the creation of our organization and up to the present day.
What are these results?
The most important, perhaps, is that today, in conditions of a difficult market environment and unfair competition from a number of Western countries - I mean, first of all, sanctions, and not only in relation to Rosoboronexport, but also to enterprises of the military-industrial complex, the company does not reduce the planned annual indicators.
We expect that the plan for 2015 will be fully implemented by us.
In November 2013, Rosoboronexport approved the development strategy for the period up to 2020 at the board of directors. Of course, then we did not think about all the negative manifestations that we see now. These are sanctions, the depreciation of the ruble, and inflation. Nevertheless, on the whole, as it turned out, the general trends in the development of the world arms market were correctly identified, which helped to fulfill the main task - to maintain the pace of arms deliveries at the level reached in 2012–2014. Let me remind you that in 2012 the volume of arms supplies through Rosoboronexport amounted to $ 12.9 billion, in 2013 and 2014 - $ 13.2 billion.
Let's remember where we started: in 2000 this volume was only 2.9 billion dollars. That is, over the past 15 years, we are talking about more than fourfold growth in the volume of export supplies. For 15 years, Rosoboronexport has supplied Russian military and dual-use products to 116 countries worth over $ 115 billion.
As you can imagine, this is a very large-scale work not only by the Rosoboronexport team, but also by the Russian defense industry as a whole.
I would also like to note the following: today, on average, only Rosoboronexport, which accounts for about 80 percent of the total volume of Russian arms exports, annually considers about one and a half to two thousand requests from foreign customers for the supply of Russian military equipment.
For 15 years, Rosoboronexport has provided work in Russia for more than 5,000 foreign delegations headed by defense ministers, their deputies, chiefs of general staffs, and commanders-in-chief of the armed forces. As a result of marketing work, Rosoboronexport signed almost 20 thousand various contract documents.
Rosoboronexport's export order book is currently $ 45 billion. In general, over the 15 years that have passed since the company's foundation, the annually recorded volume of the portfolio of orders for Russian military equipment has grown fivefold.
Rosoboronexport's order portfolio has become more stable and balanced in terms of the types of armed forces. I think you all remember very well the beginning of the establishment of Rosoboronexport's work, when almost 81 percent of all supplied products accounted for aviation equipment. Now the order book has been distributed more or less evenly across all branches of the armed forces.
The share of aviation equipment is 41 percent of the total supply. Equipment and weapons for the ground forces - 27 percent. This is a pretty solid change, since over 15 years it means more than a tenfold increase in the supply of equipment and weapons through the ground forces. Air defense equipment - 15 percent and naval equipment - 13 percent. Four percent is accounted for by exported products in other areas, including space, special technical equipment, etc.
In the regional aspect, the largest supply of military products in terms of their volumes is currently carried out to the countries of the Asia-Pacific region (42%). Next come the states of the Middle East and North Africa (36%), Latin American countries and the CIS countries (approximately 9% each). The rest of the markets account for about four percent.
What do we associate the prospects for the export of Russian military equipment?
Let me remind you that for many years Russia has confidently ranked second among the world's major arms suppliers. And we are focused on further strengthening Russia's position in the global arms market and maintaining high export performance.
We are encouraged by the high competitiveness of Russian military products. We associate the greatest prospects with Sukhoi and MiG fighters, Yak-130 combat training aircraft, Mil and Kamov helicopters, S-400 and Antey-2500 anti-aircraft missile systems, anti-aircraft missile systems Buk-M2E "," Tor-M2E "," Pantsir-S1 ", ships of projects 22356 and 20382, submarines" Amur-1650 ", modernized T-90SM tanks, infantry fighting vehicles BMP-3, new armored vehicles" Typhoon "and "Tiger" missile systems "Iskander-E" and other models.
I believe that the project “Integrated security of large administrative formations, critical facilities and state borders” developed by Rosoboronexport will also be in demand in the world. It is still of great interest to our customers. Based on an in-depth analysis of possible threats, 10 standard projects of integrated security systems were created (for the protection of borders, ports and the coastal zone, ensuring the safety of cities, important industrial facilities, holding mass events, etc.). Such a system forms a single information space for the purpose of coordinating and managing the actions of law enforcement agencies, significantly increasing the effectiveness of the fight against criminals and terrorists, unrest, illegal migration, which is very important in the world today.
In general, we are promoting thousands of unique products for export. At the same time, accounting and cataloging of the entire range of spare parts, materials, tools, auxiliary and training equipment, which are supplied to ensure the operation of exported military equipment, are carried out. The volume of this nomenclature is more than three million items of supply, including those cataloged according to international rules and NATO standards.
If earlier military equipment was sold as such, now a set of services is provided to ensure the entire life cycle of the supplied military equipment: these are maintenance, modernization, repair and disposal of weapons that have served their time. In many customer states, Russian specialists create repair bases, service centers, provide modernization, train combat and technical personnel. All these are very important elements of Rosoboronexport's comprehensive approach to military-technical cooperation, an approach that our partners in military-technical cooperation appreciate quite highly.
As you can see, the past 15 years have been large-scale, significant and interesting for Russia and for us. Of course, in our development we took into account the vast experience of our predecessors, including working closely with veterans of the military-technical cooperation system.
For the results achieved in work only since 2010, that is, over the past four years and a bit, 19 employees of Rosoboronexport were awarded state awards, awards of the Ministry of Defense of Russia - 286 employees, FSMTC of Russia - 845 employees, Rostec State Corporation - 62 people, awards of others ministries and departments - 27 employees.
It is also important to note that Rosoboronexport, acting as a conductor of state policy in the field of military-technical cooperation, does not forget to actively participate in charitable and sponsorship activities. Over the past 15 years, we have held several hundred such events. This year alone, we have implemented over 40 charitable and sponsorship projects.
This is, in short, the main thing that I wanted to say in my opening remarks.
Then Anatoly Isaykin answered journalists' questions
- How did the situation in Ukraine affect the export of Russian arms and military equipment?
- A complete halt in cooperation between the military-industrial complex of Ukraine and the Russian Federation could not but affect export supplies. Of course, we had to look for options for replacing those components that came from Ukraine for some time. But the main thing is that our deliveries do not change downward. We are following the plan. It is now October, the busiest month of this year in terms of military-technical cooperation. And we are going ahead, not lagging behind. For the future, either we will produce what was previously supplied from Ukraine, or we will look for other options.
- Can you name the volume of arms and military equipment supplies to Syria and what are we supplying there specifically?
- A lot has been said about Syria recently by the leadership of our country. The supply of weapons and military equipment to Syria is absolutely legitimate. And the very fact of these deliveries is not a secret. They are aimed at combating terrorist organizations. There is nothing wrong with that. And no violations of international obligations. In terms of nuance and detail, you need to understand how sensitive this topic is. Quantity, nomenclature and everything that is supplied to Syria remains outside the brackets of our discussion.
- How would you characterize relations with the Arab world in general and Egypt in particular over the past 15 years?
- When the "color revolutions" took place in the Arab world, they predicted a decline, a sharp curtailment of military-technical cooperation and a reorientation of the countries of the Arab world towards the states of the West. In fact, exactly the opposite happened. We have not only maintained traditionally friendly ties with countries such as Egypt, Iraq, Syria, Lebanon, let alone more stable countries such as Algeria, but these ties through military-technical cooperation have become stronger. We now have great prospects for the development of military-technical cooperation with these states. And now there are already quite good results: there are concrete agreements, negotiations are underway for the future. So far, I see only positive dynamics in this regard. The countries of this region today account for 37 percent of the supplies of our weapons and military equipment. As a rule, these are complex agreements and they are designed for long-term supplies, maintenance and modernization of those types of weapons that we supply there and will supply.
- How do the sanctions affect the activities of Rosoboronexport and what are the prospects in this regard?
- We were already under unilateral US sanctions. The result of these sanctions was that we increased the supply of weapons and military equipment by one and a half times. Now the sanctions have already been stencilled in the standard wording that is absolutely untrue with respect to Rosoboronexport. We have never supplied missile technology to countries listed by the United States. Of course, sanctions have a negative impact. First of all, this makes financial calculations difficult. The sanctions primarily concern American manufacturers, companies, banks, their branches and those who cooperate with them through military-technical cooperation with Russia. Naturally, we feel some difficulties. Nevertheless, settlements under our contracts are in progress. We have become more flexible to work in this direction. With our traditional partners, we try to make settlements in national currencies. And it already works under many contracts. Therefore, in the field of financial support of contracts, we do not see any great difficulties. What else can be difficult? There was a certain share of imports of weapons and military equipment. More precisely, it was in previous years. We ordered it at the request of our partners for Russian equipment. Most often it was the desire of our customers and partners. They could take Russian equipment either in the original configuration, or, at their request, installed some elements of these systems, produced in this country for many years. We bought imported units, in particular, in France, in Italy. These were our main suppliers. The deliveries have now practically ceased. We started looking for options to replace those products that are not supplied to Russia due to the sanctions. But in general, this does not affect deliveries. We find substitution options for Russian or components from other countries. In fact, the sanctions hit the countries that introduced them more.
- Please name the top five partners of Rosoboronexport.
- India has always been our leading partner. China is also our major partner. The rest of the five is unstable. In fact, there is no such five. There are 10 countries that are our main partners. We can do this. It used to be like this: India and China - 80 percent, the rest - 20 percent. Now the situation is different - 10 countries account for 70 percent.
- What are the prospects for cooperation between Rosoboronexport and the countries of the Persian Gulf?
- We are now experiencing a new stage in the development of cooperation with the Gulf countries. These are states where the influence of Western European countries and the United States has traditionally been strong. Several years ago we had close contacts with some Gulf countries, primarily with Saudi Arabia and the United Arab Emirates. Even then, we had a successful series of contacts at the highest political level and at the level of the defense ministries of these countries. And even then we had a good relationship. We began to understand each other more. If at that time we did not come close to signing contracts, although there were such intentions with Saudi Arabia and for a significant amount, then this was prevented by a number of circumstances, which I will not list. Now, especially in the last year and a half, there has been a sharp revival of contacts at all levels. Both at the highest political level and through military-technical cooperation. We have very good prospects with these countries for the development of military-technical cooperation. This applies not only to the supply of Russian weapons, but also to joint developments, primarily in the field of transfer of Russian technologies and the creation of certain models of military equipment on the territory of these states. We already had such an experience. You know that the Pantsir-C1 complex was created jointly with the United Arab Emirates. They partly participated in the investment of this project. And this experience just became the first sign. He showed that interaction between Russia and the Gulf countries at this level can lead to the creation of completely new types of weapons and military equipment, which will be in demand not only in this region, but throughout the world. Now "Pantsir-C1" is in great demand. We have received a large number of applications for it from different countries and are supplying this air defense missile system to different regions of the world. The Instrument Design Bureau in Tula is busy with work.
Negotiations are underway with the Gulf countries on a very wide range of issues. But a rather significant period passes from the desire for cooperation to the transition to specific applications and further to contracts. It takes time for specialists to be able to familiarize themselves with the technology, then to form a technical appearance for the technology that they need in the specific conditions of a particular country. After that, it is necessary to carry out tests. Any state of the Persian Gulf, according to its legislation, must conduct tests of the selected equipment on the territory of these countries. Passing through bureaucratic procedures also takes a significant amount of time. Therefore, it is too early to talk about what this active work with the states of the region will result in, when and in what volumes of supplies. But these contacts are proceeding very progressively and fruitfully.
- Egypt buys Mistral from France. Will Cairo receive Russian equipment and weapons intended for these ships?
- As for the Mistrals, an addendum to the contract was signed, where it was said about the cancellation of the contract. This addendum contains all the conditions for terminating this contract. One of the conditions is the dismantling of the Russian equipment installed on these ships. It is now on the ships, and our teams, together with French specialists, are just doing this work. As soon as the dismantling is carried out and the equipment from these ships leaves for the Russian Federation, France will use these ships at its discretion. They can recycle them, they can sell them to some countries. This is already the property of France. If there is an agreement between France and Egypt, it will be an agreement between these countries. If Egypt asks to install Russian equipment on these ships or to purchase Russian helicopters, it will be logical, since the ships were built for Russian Ka-52K helicopters. We, of course, will meet halfway. And there will be no problems here. But there are no official appeals yet. It is too early to talk about what has yet to be done.
- Please tell me how actively Rosoboronexport is taking part in equipping the Collective Response Forces of the Collective Security Treaty Organization with military equipment and other types of weapons, and do these structures have a priority right to purchase innovative products?
- Of course, we pay special attention to the development of military-technical relations with our closest neighbors and friends, and Kazakhstan is one of our main partners. Under the CSTO, there are agreements that allow for the so-called preferential supplies, which differ for the better in price from commercial supplies to other countries. Our contacts with Kazakhstan have intensified over the past 5-10 years. The last joint statement of the heads of state of Russia and Kazakhstan speaks of cooperation in the field of not only the supply of weapons, but also the transfer of technology, the development of entire sectors of the national defense industry, a new step in the space field, which will give impetus to the development of work in the field of space exploration, satellite launches and astronauts.
- Does Rosoboronexport have information about the safety of the Dzhigit portable anti-aircraft missile systems supplied in large quantities to Libya and Iraq? Is there a danger that these missiles will fall into the hands of terrorist groups?
- I have no information that anti-aircraft missile systems of the "Dzhigit" type were delivered to Libya. Any types of weapons can fall into any hands if the state is torn to pieces, there is no single leadership and there is no single army. It is difficult to say in whose hands the arsenals are. There may be weapons from different parts of the world. The latest information suggests that in Iraq, the bulk of the weapons transferred by the United States have passed into the hands of ISIS and other terrorist organizations. In Iraq, we supply weapons only to the central government. Naturally, the contracts contain a mandatory clause prohibiting the transfer of weapons supplied from Russia to other hands. We have confidence that the Iraqi government will adhere to this rule, as will the Syrian one. Of course, war is war, and weapons can change hands during hostilities. But on the whole, we do not supply weapons to hot spots; nowhere is there such a condition on the transfer of supplied weapons and military equipment to third parties. If such facts, violation of the conditions are revealed, then at the level of the Russian Federation, appropriate decisions will be made. Contracts are not concluded with countries that violate these terms. Similar rules exist not only in the Russian Federation, but also in other countries.
- How is the volume of arms and military equipment imports estimated at the end of 2015?
- We have not summed up the results yet. Now only approximate figures can be named. The volume of imports in previous years was about $ 100-200 million. This year it will be much lower. I don't think it will exceed $ 70-80 million. This is an approximate figure.
- Describe the situation with Iran's claim for the S-300. How are the negotiations going and are there any deadlines, will there be any results?
- The result will be positive. It's a long story, the contract has been suspended. But there are currently no obstacles. Commercial negotiations are ongoing and this work is close to completion.
- Has Iran withdrawn its claim from the court?
- I can say that this issue has been resolved and resolved positively. There is an agreement with the Iranian side that the claim will be withdrawn as soon as the contract comes into force.
- What is the situation with the supply of Mi-17V-5 helicopters to Afghanistan?
- The delivery of Mi-17 helicopters to Afghanistan was carried out under a contract between the Russian Federation and the United States. 63 helicopters were delivered. We know from personal contacts that Russian helicopters are in great demand in Afghanistan. Only our helicopters are capable of operating in the mountainous desert areas of this country. The fighting takes place there, as a rule, in the mountains, and Russian helicopters meet these conditions. Afghans are used to reliable Russian helicopters with simple controls. Therefore, appeals from Afghanistan are constantly being received. But there are problems in the fact that Rosoboronexport can supply equipment, but still the supply of weapons and military equipment to Afghanistan at the expense of the United States. And under the conditions of sanctions, this will not happen. Therefore, the problem with Afghanistan is that it is necessary to find funds to purchase these helicopters in a commercial version or receive in the form of assistance from Russia. But this depends on the country's leadership and the Ministry of Defense. It is obvious that Afghanistan needs these helicopters.
- How do you assess the prospects for military-technical cooperation with Vietnam?
- Vietnam is our old friend and traditional parterre. We are bound by partnership relations along all lines - both in the socio-political and in the military-technical. I assess the prospects for military-technical cooperation with Vietnam very highly. The country is booming. Moreover, Vietnam can not only purchase, but also produce military equipment. I think this direction will be developing very actively in the near future.
- Tell us about the supply of S-400 air defense systems to China and the prospects for concluding a contract, which has been discussed for a long time, for the Su-35.
- China was the first country to sign a contract for the S-400 air defense system. Deliveries will be made on time. As for the Su-35, I can only say one thing - negotiations are underway.
- It so happened that the main supplies of aviation equipment were associated with the Sukhoi brand. In this regard, what do the future prospects of the MiG fighter look like? In what direction can this move and who are the potential customers for these machines?
- Indeed, Sukhoi aircraft are more popular. Before that, the MiG was more in demand, especially in India. The MiG brand has very good prospects. The MiG-35, for example, is an excellent aircraft. It has the ability to evolve to a fifth generation light fighter. The interest in him is very great. In addition, the MiG-29 in various modifications is supplied now. Many customers are interested in these aircraft.
