Arms sales are not only a lucrative business for exporting countries. The arms-producing countries are solving their own problems of strengthening their defense capabilities and, of course, have the opportunity to play their political game at the world level.
According to experts, the United States of America is the leader among military exporters. The US arms sales in 2010 amounted to $ 31.6 billion. Russia is in second place with $ 10 billion, followed by Germany, France, and Great Britain.
China is stubbornly making its way to the arms market, which offers for sale modified samples of Soviet military equipment.
Ukrainian arms exports follow a similar path. After the collapse of the USSR, many research institutions and industrial complexes that worked for the country's defense remained on the territory of Ukraine.
Just as the presence of a beard does not make a person a philosopher, so the transfer of rights to Ukraine to the objects of the weapons complex, as a share of the inheritance during the collapse of the Union, does not mean the continuation of its effective functioning. To maintain the military-technical potential at the world level, it is necessary not only to constantly maintain and modernize the defense industry, but also to invest considerable funds in the development of scientific developments, including fundamental sciences.
In Ukraine, the practice has developed that only the defense industry is a source of profit, the army receives crumbs from the available funding, and they try not to even remember their contribution to science.
What caused such a deplorable state of the defense industry in Ukraine?
At first, there is no strategic planning for the development of the industry. The development project involves investing quite large funds in long-term projects for the creation and implementation of the latest developments in the field of weapons.
Only an insignificant part of the enterprises of the non-state sector is developing, but only those that will bring profit in the near future. These include the implementation of improvements of some units and parts of the existing military equipment and weapons, created in Soviet times.
A significant part of the industrial capacity of the former defense industry is used as a repair infrastructure for equipment produced during the USSR period.
The main emphasis on the sale of military-technical products is placed on Soviet equipment, which is of interest to potential buyers. For example, models of Soviet helicopters, airplanes, and small arms are in great demand and have their customers in Africa and South America.
The main buyers of Ukrainian weapons on the African continent are Sudan and the Republic of the Congo. Africans are interested in such types of weapons as tanks, armored vehicles, howitzers, mortars, Grad, Gvozdika, Akatsiya artillery mounts, rifles, Kalashnikov assault rifles, machine guns and grenade launchers.
Many former defense enterprises remained "ownerless" due to the fact that Ukroboronprom considers them to be ballast. The segment of the military complex - the space industry - has found itself in a particularly difficult situation. There is no space technology development program in Ukraine.
Secondly, lack of a well-thought-out personnel policy.
This led to a massive exodus of qualified personnel from the defense industry. The biggest loss is the dismissal of most of the specialists who were involved in the preparation and conclusion of contracts for the supply of military equipment. The connections with buyers and intermediaries, which had been accumulated over the years, were lost, which led to a decrease in Ukraine's reputation as a reliable partner, information leakage, and delays in the fulfillment of obligations under concluded contracts.
Thirdly, the lack of new developments in the field of high technologies in the production of military products. The equipment of the production sector of the defense complex is not being invested. Of course, the highest level of weapons production during the Soviet period gave Ukraine a spare time to take measures to modernize its military-industrial complex, since the demand for military products from the times of the union for some models is quite high. For example, having equipped an armored personnel carrier with the latest protection system, means of destruction, a new engine, you can offer it to the market as a new modification of armored vehicles.
Unfortunately, Ukraine was unable to create an integral military-industrial system based on the existing elements.
Time for modernization has been irretrievably lost. Analogs of weapons appeared on the arms market. For example, ten years ago the Kolchuga electronic reconnaissance station was the best product in its class; now there are three analogues of such equipment on the market. And this is the situation for almost all armament positions. Only a few enterprises were able to conclude contracts with foreign buyers: Motor Sich OJSC, Aerotechnika, Ukrspetstechnika HC. Therefore, no one can speak with confidence about Ukraine's ability to stay on the world arms supplier market.
Even such developments in the field of modernization of individual components and assemblies of existing equipment, such as a thermal imaging sight, a pulsed electromagnetic protection complex, ion-plasma chromium sputtering technology, new ceramic panels, a laser-based rangefinder, will not be able to confirm Ukraine's reputation as a weapons power.
And the fourth reason is the significant changes taking place in the arms market: the emergence of new exporters, a change in power and priorities in countries that traditionally buy weapons, the ousting of Ukraine from the African market (the main sales region) by suppliers from other countries.
Until now, the arms business of Ukraine was carried out under contracts signed in 2009. And the new agreements are just a continuation of the previous contracts.
The critical situation with the supply of weapons will not be corrected by the obvious success of Ukraine in concluding contracts for the supply of 121 armored personnel carriers and 49 Oplot tanks to Thailand. By the way, the Ukrainian tank bypassed the South Korean and Russian models at the tender. This is the great merit of the team, which previously signed contracts for the supply of 96 armored personnel carriers of a similar version.
The sale to Ethiopia of 200 units of an obsolete model of tanks can also be attributed to a successful deal.
The failure to conclude agreements with Iraq is due to the lack of experience of the new team of specialists in the preparation and conclusion of agreements. The negotiators did not take into account the political, economic and social situation in this country, were not thoroughly familiar with the market situation, and were not trained to work with intermediaries.
The failure to sign contracts for the supply of Ukrainian tanks to Brazil was solely due to departmental confusion in the structures of the Ukrainian defense and export complex: after signing an agreement on cooperation with the Ministry of Industrial Policy, an employee of Ukrspetsexport demanded that the Brazilian side start negotiations anew. This led to the cancellation of all agreements on the supply of equipment and served as one of the reasons for the resignation of the Brazilian defense minister.
It was not possible to conclude a deal with India for the supply of aircraft weapons, although the Indians, having an urgent need for this type of technology, agreed to an increased price for the equipment. The reason is that the Artyom State Chemical Research Institute, which produces missiles, was unable to work out the supply scheme.
It was not possible to sell two complexes for conducting radar reconnaissance (manufactured by the State Holding Company "Topaz") due to the fact that the employees authorized to conclude an agreement do not know how to conduct successful negotiations.
Ukrainian suppliers fail to keep up with the schedules for fulfilling their obligations under contracts concluded with China for the modernization of An-32 and Zubrov aircraft.
And although, according to the statements of politicians, Ukraine annually increases the volume of arms sales, this is a rather sly statement. The purchasing power of the US currency is declining, and this fact means that there is really no reason to be optimistic about the success of the arms trade.
Of course, the state company Ukrspetsexport, authorized to export weapons, will take all measures to intensify efforts to conclude new contracts, especially since Ukraine's reputation in this market segment is quite high. It is also hoped that over time, the staff of this organization will gain experience in negotiating. However, the lack of development of the military-industrial and scientific complex will lead to the final ousting of Ukraine from the arms market.
According to Ukrainian sources, the country sold weapons worth $ 1 billion in 2010, and according to the international rating agency SIPRI, Ukraine's exports amounted to $ 201 million. This difference in estimating the size of sales is due to different calculation methods. The Stockholm rating agency SIPRI uses the values of similar types of weapons in its calculations. Also, for the convenience of calculation, military products are divided into five categories, and only the cost of delivery under completed contracts is taken into account in the calculation. These conditions significantly increase the calculation error. It should also be noted that the SIPRI report does not include data on the export of small arms and component parts and assemblies by Ukraine, which is a fairly large volume of the arms market.
The negative rating assigned to Ukraine by the agency, of course, negatively affects the image of the Ukrainian arms exporter. There is information that the state corporation "Ukrspetsexport" began to demand a revision of the agreements already reached, which led to a decrease in the confidence of potential buyers in the Ukrainian partner in the arms business.
The present time is characterized by the fact that the main importing countries of weapons have taken a course not on the purchase of new models of weapons, but on the modernization of existing weapons. The purchase of new samples can only be afforded by very rich countries or states that receive income from the sale of resources. Therefore, having a well-developed repair base, Ukraine successfully implements contacts to carry out work related to the improvement of the existing military equipment of the countries that import weapons.
Export control analysts have found that the United States and European countries are purchasing insignificant quantities of Ukrainian heavy weapons. For example, the United States bought only one tank, developed in 1985, which has dynamic protection "Contact", missile weapons guided by a laser beam. The tank is used to destroy enemy helicopters. The United States of America also purchased four Grad units.
Ukraine received large stocks of small arms produced during the Soviet era: rifles, carbines, revolvers and pistols. The USA and Germany are the main buyers of this type of weapon.
Small consignments of weapons purchased by the countries of Europe and the South-East make it possible to study the features of the weapons that the armies of these countries can meet in combat conditions. For example, Italy purchased from Ukraine 14 air-to-air missiles, which are in service with the Libyan Air Force.
If Ukraine does not start implementing investment projects in the development of new types of weapons, it will finally lose its status as an arms exporter.
It should be noted that the production of weapons is not only an integral part of the country's economic independence, but also an important factor in its policy.
