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Russia and the Arms Trade Russia and the Arms Trade Stockholm International Peace Research Institute SIPRI is an independent international institute for research into problems of peace and conflict, especially those of arms control and disarmament. It was established in 1966 to commemorate Sweden’s 150 years of unbroken peace. The Institute is financed mainly by the Swedish Parliament. The staff and the Governing Board are international. The Institute also has an Advisory Committee as an international consultative body. The Governing Board is not responsible for the views expressed in the publications of the Institute. Governing Board Professor Daniel Tarschys, Chairman (Sweden) Dr Oscar Arias Sánchez (Costa Rica) Sir Marrack Goulding (United Kingdom) Dr Ryukichi Imai (Japan) Dr Catherine Kelleher (United States) Dr Marjatta Rautio (Finland) Dr Lothar Rühl (Germany) Dr Abdullah Toukan (Jordan) The Director Director Dr Adam Daniel Rotfeld (Poland) Stockholm International Peace Research Institute Frösunda, S-169 70 Solna Sweden Telephone: 46 8/655 97 00 Telefax: 46 8/655 97 33 Email: [email protected] Internet URL: http://www.sipri.se Russia and the Arms Trade Edited by Ian Anthony OXFORD UNIVERSITY PRESS 1998 Oxford University Press, Great Clarendon Street, Oxford OX2 6DP Oxford New York Athens Auckland Bangkok Bogotá Bombay Buenos Aires Calcutta Cape Town Dar es Salaam Delhi Florence Hong Kong Istanbul Karachi Kuala Lumpur Madras Madrid Melbourne Mexico City Nairobi Paris Singapore Taipei Tokyo Toronto Warsaw and associated companies in Berlin Ibadan Oxford is a registered trade mark of Oxford University Press Published in the United States by Oxford University Press Inc., New York © SIPRI 1998 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press. Within the UK, exceptions are allowed in respect of any fair dealing for the purpose of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act, 1988, or in the case of reprographic reproduction in accordance with the terms of the licences issued by the Copyright Licensing Agency. Enquiries concerning reproduction outside these terms should be sent to the Rights Department, Oxford University Press, at the address above. Enquiries concerning reproduction in other countries should be sent to SIPRI British Library Cataloguing in Publication Data Data available Library of Congress Cataloging-in-Publication Data Data available ISBN 0–19–829278–3 Typeset and originated by Stockholm International Peace Research Institute Printed in Great Britain on acid-free paper by Biddles Ltd, Guildford and King’s Lynn Contents Preface xi Acknowledgements xii Acronyms xiii 1. Introduction 1 Ian Anthony I. New tendencies shaping international arms transfers 1 II. Russia in the new international arms trade system 3 III. Conducting research on Russian arms transfers 6 IV. Unresolved issues in Russian arms exports 7 V. The future for Russia as an actor in the international arms 14 trade Table 1.1. Russian arms reportedly supplied to Armenia as a share of 13 exports reported to the UN Register of Conventional Arms, 1993–96 2. Trends in post-cold war international arms transfers 16 Ian Anthony I. The new international environment and the arms trade 16 II. The general market trends 19 III. Changing economic conditions 24 IV. Patterns of Russian arms exports 28 V. An assessment of Russia’s future in the world arms market 33 Table 2.1. Shares of the 25 largest recipients of major conventional 29 weapons from the Soviet Union/Russia, 1980–96 Table 2.2. The 10 largest recipients of major conventional weapons 30 from the Soviet Union/Russia, 1982–96 Table 2.3. Shares of different weapon categories in Soviet and 31 Russian exports of conventional weapons, 1980–96 Figure 2.1. Deliveries of major conventional weapons, 1980–96 19 Figure 2.2. The US share of deliveries of major conventional weapons, 20 1980–96 Figure 2.3. Regional shares of deliveries of major conventional 22 weapons in 1980, 1987 and 1996 3. Conventional arms transfers during the Soviet period 38 Yuriy Kirshin I. Introduction 38 II. General principles guiding Soviet military supplies 39 III. Decision-making procedures in the Soviet Union 49 vi RUSSIA AND THE ARMS TRADE IV. Military supplies to socialist countries 54 V. Soviet military assistance to developing countries 60 VI. Military supplies to political movements and organizations 66 Table 3.1. The value of Soviet military aid to North Korea, 1949–51 57 4. Economic dimensions of Soviet and Russian arms exports 71 Ian Anthony I. Introduction 71 II. Aggregate data on the value of arms exports 72 III. Managing foreign trade with different recipient groups 77 IV. The impact of domestic reform on foreign trade 84 V. Conclusions 91 Table 4.1. Official estimates of the value of arms exports, 1988–94 72 Table 4.2. Export of military and civilian products from enterprises 73 under the State Committee on Defence Industries, 1988–93 Table 4.3. Estimate of the value of Soviet arms exports to developing 76 countries, 1971–80 Table 4.4. Regional distribution of deliveries of arms and military 77 equipment by the former Soviet Union, 1991 Table 4.5. Major developing country debtors to the Soviet Union in 82 1990 Table 4.6. Financial aspects of the 1994 Malaysian MiG-29 agreement 90 Figure 4.1. Trends in Soviet/Russian arms exports according to Rosvo- 74 oruzhenie, 1985–96 Figure 4.2. Rosvooruzhenie and ACDA data on Soviet/Russian arms 75 exports, 1985–96 Figure 4.3. Shares of arms exports to socialist countries by the 79 Soviet Union, 1980–83 5. The influence of external factors on Russia’s arms export policy 93 Sergey Kortunov I. Introduction 93 II. Competition in the international market and state 94 protectionism III. Main issues in domestic discussions of arms transfer 99 control IV. The national control system in transition 101 V. A future agenda for Russian export control 104 6. The process of policy making and licensing for conventional arms 107 transfers Peter Litavrin I. Introduction 107 II. The organization of arms transfers in Russia 107 C ONTENTS vii III. The changing relations between government and industry 110 IV. New principles underlying decision-making procedures 112 7. The role of the Ministry of Defence in the export of conventional 117 weapons Yuriy Kirshin I. Introduction 117 II. The role of the Ministry of Defence in arms export 120 control III. Arms exports and Russia’s security 122 8. Russian defence firms and the external market 124 Elena Denezhkina I. Introduction 124 II. Confusion in state defence procurement 126 III. The position of the defence industry 130 IV. External economic operations of Russian defence firms 133 V. Examples of reorganization of Russian defence firms: 137 the view from within VI. Conclusions 144 Table 8.1. Official Russian defence budgets, outlays and deficits/ 127 surpluses, 1992–95 Table 8.2. The level of state debt to the defence industry, 1993–96 128 Table 8.3. Index of production volumes in the Russian defence 131 industry as classified by the Ministry of Defence Industry, 1991–96 9. Military–technical cooperation between the CIS member states 146 Alexander A. Sergounin I. Introduction 146 II. The impact of the break-up of the Soviet Union 147 III. Incentives for military–technical cooperation 152 IV. The legal basis and procedures for military–technical 158 cooperation V. The CIS legal and institutional framework 161 VI. The CIS joint air defence system 164 VII. Bilateral cooperation 167 VIII. Conclusions 175 Table 9.1. The quotas for armaments under the Tashkent Agreement 148 Table 9.2. Indicators of economic decline in Russian defence 150 industries, 1992–96 Table 9.3. Index of the level of military–technical cooperation 168 between Russia and the CIS member states in select areas Figure 9.1. CIS organs involved in military–technical cooperation 164 viii RUS S IA AND THE ARMS TRADE 10. Military–technical cooperation between Russia and countries of 177 East–Central Europe Irina Kobrinskaya and Peter Litavrin I. Introduction 177 II. The legacy of the WTO 178 III. Military–technical cooperation between Russia and 182 East–Central European states IV. The defence industry and arms transfer policies of East– 185 Central European states towards Russia V. Conclusions 192 11. Sino-Russian military–technical cooperation: a Russian view 194 Alexander A. Sergounin and Sergey V. Subbotin I. Introduction 194 II. Economic incentives for cooperation 195 III. Political and strategic considerations 198 IV. The management of arms transfers to China 200 V. Major bilateral programmes 205 VI. Conclusions 215 Table 11.1. Deliveries of major conventional weapons to China, 206 1990–94 Table 11.2. Deliveries of major conventional weapons to China 208 from the former Soviet Union, 1990–97 12. Illicit arms transfers 217 Ian Anthony I. Introduction 217 II. The extent and forms of illicit arms transfers 220 III. Sources of supply and demand 222 IV. The case of arms supplies to Chechnya 228 V. Conclusions 231 Table 12.1. Select equipment allegedly transferred to Armenia from 225 the Group of Russian Forces in the Caucasus, 1993–96 Table 12.2. Basic weapons and military equipment seized on the 229 territory of the Chechen Republic Appendix 1. The Guidelines for Conventional Arms Transfers, 1991 233 Appendix 2. The OSCE Criteria on Conventional Arms Transfers 234 Appendix 3. Russia’s conventional arms export regulations 236 Gennadiy Gornostaev and SIPRI 1. Decree of the President of the Russian Federation on military– 238 technical cooperation of the Russian Federation with foreign countries (basic provisions), no. 1008, 5 Oct. 1995 C ONTENTS ix 2.
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