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Moscow Defense Brief 2/2008 Moscow Defense Brief Your Professional Guide Inside # 2, 2008 We’llWe’ll BeBe BackBack Advertisment HIGH TECHNOLOGIES SAFEGUARDING PEACEFUL SKIES Russia’s largest defence holding company more than 40 industrial and research organizations powerful research and productive potential full range of air defence systems and assets integrated technological process from development to serial production of weapons and military equipment llment of contractual obligations Our products are successfully operated in 50 countries worldwide ALMAZ-ANTEY CONCERN 41, Vereiskaya str. Moscow 121471, Russia Теl.: (495) 780-54-10; Fax: (495) 780-54-11 E-mail: [email protected] CONTENTS Domestic Policy #2 (12), 2008 Rites of Spring in the Defense Industry Complex 2 PUBLISHER Urbi et Orbi: Military Parades on Red Square 4 Centre for Analysis of Strategies and International Policy Technologies Recent Evolution of Russian-American Relations 7 CAST Director & Publisher Ruslan Pukhov Nagorno-Karabakh: Shift in the Military Balance 9 Editor-in-Chief The Rise and Fall of Georgia’s UAVs 13 Mikhail Barabanov Advisory Editors Konstantin Makienko International Cooperation Alexey Pokolyavin Thales Group in Russia 15 Researchers Ruslan Aliev Sergey Denisentsev Industrial Policy Polina Temerina Dmitry Vasiliev Maiden Flight of the SSJ-100 17 Editorial Office 3 Tverskaya-Yamskaya, 24, office 5, Moscow, Russia 125047 Arms Trade phone: +7 495 251 9069 Russia on the Arms Market of Sub-Saharan Africa 18 fax: +7 495 775 0418 http://www.mdb.cast.ru/ To subscribe, contact Facts & Figures phone: +7 495 251 9069 Export Contracts of Warships or e-mail: [email protected] From Russian Shipyards 1992 – 2007 21 Moscow Defense Brief is published by the Centre for Analysis of Strategies and Technologies Russian Arms Trade in the First Half of 2008 23 All rights reserved. No part of this publication may be reproduced in any form or by any means, electronic, mechanical or photocopying, recording or otherwise, without reference to Moscow Defense Brief. Please note that, Our Authors while the Publisher has taken all reasonable care in the compilation of this publication, the Publisher cannot accept responsibility for any errors or omissions in this publication or for any loss arising therefrom. Authors’ opinions do not necessary reflect those of the Publisher or Editor Computer design & pre-press: ZEBRA-GROUP www.zebra-group.ru Cover Photo: Military parade on Red Square in commemoration of the 63rd anniversary of the Victory in the Great Patriotic War of 1941–1945. Moscow, May 9, 2008 Photo by: Leonid Yakutin © Centre for Analysis of Strategies and Technologies, 2008 Printed in Russia # 2, 2008 Moscow Defense Brief 1 Domestic Policy Rites of Spring in the Defense Industry Complex Aleksey Nikolsky, Vedomosti correspondent, special for Moscow Defense Brief n assuming power as Russia’s President on May 12, Dmitry the wave of appointments announced by Medvedev, who OMedvedev launched a cabinet shuffle with significant maintained his mentor’s tradition of shuffling bureaucrats consequences to the departments and corporations that from one position to another without actually getting rid of make up Russia’s defense-industrial complex. anyone. Sergey Ivanov retained his position as Chair of the It is clear that Cherkesov and Patrushev were demoted Military-Industrial Commission, but lost his title of First to relatively insignificant positions as a result of the sharp Deputy Prime Minster and is now one of several deputy conflict that erupted between the FSB and the FSKN. This prime ministers. The new government now has two first conflict reached its climax with the arrest last month, on deputy prime ministers: former presidential aide Igor evidence presented by the FSB, of Aleksandr Bulbov, an Shuvalov and former Prime Minster Viktor Zubkov. Ivanov’s FSKN officer close to Cherkesov. Cherkesov’s people then deputy in the Military-Industrial Commission Vladislav prepared a brief for Putin on the scandalous “Three Whales” Putilin apparently quit his post before May 12, when his contraband case, which incriminated several highly placed position was eliminated. FSB officers. Baluyevsky’s dismissal follows the same pattern: Later the same day, Medvedev demoted the heads of his opposition to several reform measures advanced by the two special services agencies that had come into sharp Defense Minister was widely known. But for the sake of conflict with one another last fall. Nikolai Patrushev, the maintaining an aura of stability, no reprisals were taken Federal Security Service (FSB) chief, appointed by Boris until after Medvedev’s inauguration. Yeltsin, was replaced by Aleksandr Bortnikov, head of the By way of contrast, the fact that Deputy Prime Minister FSB Economic Security Service, and is now Secretary Sergey Ivanov has kept his position as the curator of the of the Security Council. Meanwhile, Viktor Cherkesov, military-industrial complex is indeed significant. It was Director of the Federal Narcotics Control Service rumored that Ivanov would be offered a new, more political (FSKN), was appointed head of the Federal Agency for position after he lost the backroom struggle to be crowned Arms Deliveries, replacing Aleksandr Denisov. Sergey Putin’s successor, such as governor of a new super-region Ivanov had first spoken of the need for a civilian agency comprising Moscow city and oblast. Indeed, Ivanov may to centralize the procurement of arms for all government yet be appointed to some other position, but for the next agencies in 2006, and the presidential decree creating few months he remains at least formally the highest official it stated that the agency would begin work in 2008. But dealing with the defense industry. In this respect Ivanov at the beginning of this year another decree was issued, remains the principal and for the time being the only effective specifying that the Agency will purchase only serially restraint on the ambitions of Russian Technologies to obtain produced equipment, beginning in 2009. a monopoly over the defense and several “near defense” On June 3, Medvedev effectively dismissed Yury industries as well. Baluyevsky, Chief of the General Staff, for his conflict with That said, the constructive side of Ivanov’s activity Defense Minister Anatoly Serdyukov. Baluyevsky is now is less evident. For lack of any real powers, the Defense Deputy Secretary of the Security Council, and was replaced by Industrial Commission he chairs has proven unable to resolve the former Chief of Armaments, Nikolai Makarov. As for who any of the pressing issues facing the sector, in particular, replaces Makarov, this question is less important in view of the those that involve strong private interests. For example, the incipient activation of the Federal Agency for Arms Deliveries. commission showed no influence over the situation arising Makarov’s old department will retain responsibility for little from the unwillingness of the management of NPO Saturn more than the maintenance of armaments in service, while to integrate their company into Chemezov’s Oboronprom control over military-technical policy will be concentrated in aviation machine building holding. the hands of Serdyukov’s immediate circle. Similarly, there is no evidence of the commission’s There are no grounds to suppose that the rationale contribution to resolving the two largest problems facing of these changes was to increase the efficiency of defense Russian defense exports: Algeria’s rejection of the Mig-29 procurement. Rather, they were simply the consequence of and delays in the modernization of the Admiral Gorshkov 2 # 2, 2008 Moscow Defense Brief Rites of Spring in the Defense Industry Complex Domestic Policy aircraft carrier for India. When the formation of Russian The role of Rosprom in managing defense industry Technologies is formalized with the signing of a presidential Federal Unitary State Corporations (FGUP) is to be decree, it is likely that Chemezov will overtake Ivanov in transferred not to the Ministry of Industry and Trade, but to terms of real influence over the defense industry. state corporations like Russian Technologies and the United Finally, another influential former Kremlin insider, Shipbuilding Corporation, and the FGUP themselves are to Deputy Head of the Presidential Administration Igor Sechin, be incorporated as joint-stock companies. was appointed Deputy Prime Minister. With the departure However, it is unlikely that Sechin himself will spend of Naryshkin to the Kremlin, Sechin was appointed Chair much time managing the United Shipbuilding Corporation, of Board of the United Shipbuilding Corporation, and since he will be preoccupied with the more important task of it is impossible that Yury Yarov will soon be replaced as controlling Russia’s energy sector. Moreover, Yury Kovalchuk, the Director General of this as-yet virtual organization. an influential businessman, is increasing his presence in the Kommersant newspaper has suggested that Andrey Dutov, shipbuilding sector. His ambitious plans to build ships for the Chief of Rosprom, the Federal Agency for Industry (to be oil and gas sector will likely be financed with public funds, dissolved as part of the restructurings announced on May while military shipbuilding will remain at the periphery of 12), is a likely candidate. Indeed, Naryshkin himself had government business. An influential bureaucrat like Sechin proposed Dutov’s candidacy before he left the White House. is unlikely to pay this matter much heed. # 2, 2008 Moscow Defense Brief 3 Rites of Spring in the Defense Industry Complex Domestic Policy Urbi et Orbi: Military Parades on Red Square Mikhail Barabanov he military parade of the Russian Armed Forces on Brezhnev and the policy of “fighting for peace,” the parade TMay 9, 2008, in honor of the 63rd anniversary of the on May 1 was canceled and, as a result, military parades Victory in the Great Patriotic War marked the first appearance from then on were held just once per year on November 7, of military hardware on Red Square in the post-Soviet period. on a much smaller scale.
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