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Russian Arms Exports In Sweet Spot, Domestic Rearmament Moving At Breakneck Pace

August 30, 2011

Russian Bereg SP artillery

Not since the Cold War has the Russian military been lavished with so much cash and hardware. With a projected $650 billion allotted for arms spending in the next 10 years (this writer believes the cost will balloon to a few hundred billion more), no expense is being spared equipping the world’s fourth largest armed forces with new weaponry.

Other than the highly publicized PAK-FA fifth generation stealth fighter for the air force, every branch of the revitalized Russian military will get boosted with missiles, submarines, helicopters, fighter aircraft, and an enigmatic new main battle tank.

To stretch the historical perspective, the only other time Russia armed itself at such a rapid pace would be during the reign of Czar Peter the Great and the pre-World War 2 Five Year Plans of the Stalin era.

This doesn’t mean there aren’t any hurdles. The recent MAKS 2011 air show outside Moscow had few takers despite the eye candy present. Also, serious delays have hampered Russian shipyards and other local manufacturers, resulting in awful cost overruns. The situation has become endemic to the point that both President Dmitri Medvedev and Prime Minister Vladimir Putin have publicly intervened, criticizing defence officials and pushing for reforms in Russia’s creaky arms procurement process.

The high times aren’t confined to the domestic front, however, with Russian arms exports raking in billions each year. Aside from losing the Libyan market ($4 billion), Russian arms are a veritable pillar of the national economy and favored clients such as India, Algeria, and Venezuela (China used to be part of the club) are deluged with sweet deals.

The sweetness is particularly tender in the case of Venezuela where a very surprising transaction has taken place. Last week news broke that Russia is loaning Venezuela $4 billion dollars for future arms purchases that include main battle tanks, air defence systems, and fighter jets. The money hasn’t been transferred yet and a Venezuelan official—Minister of Finance and Planning Jorge Giordani—is due to visit Russia to iron out the details.

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