So the crisis will not upset the plans?

The mass media have published statements of the latest declarations made by Vice Prime Minister and Chairman of the Military-Industrial Commission S. Ivanov concerning the state military order for the year 2009, which differ significantly from the actually existing situation in this sphere and thus require some additional clarification.

First of all, S. Ivanov’s statement that no cuts have been made in the 2009 state defense order is contrary to fact, because in the version of the 2009 federal budget signed by RF President D. Medvedev as of 29 April (Federal Law No 76-FZ), the state military order, in the part relating to the RF Ministry of Defense, had been reduced by approximately 36.5 billion rubles, with about 11.3 billion rubles out of this sum being allocated to research and development work. The total reduction of the state military order, including all the power structures and military-technical cooperation, i.e., the production of armaments and military equipment (AME) for export, is estimated as amounting to approximately 99 billion rubles.

It should also be taken into consideration that the size of the state military order which, according to the Vice Prime Minister, amounted to 1 trillion 300 billion rubles, incorporates both the orders placed by Russia’s government intermediary – Rosoboronoeksport – for the supplied of armaments to other countries’ armies and the procurements of fuel and lubricants, food, uniform and other expendables for the Russian power structures. And significant cuts have also been made to that part of the state military order which relates directly to the needs of military servicemen proper (see the IET’s Overview "The Economic and Political Situation in Russia in APRIL 2009"). However, if one applies the term “economy” instead of “sequester”, the general picture would appear to be much more optimistic.

As for the gap of 260 billion rubles between the total volume of AME procurements as stated by S. Ivanov (592 billion rubles) and the volume of procurement of armaments and military equipment for the RF Ministry of Defense (332 billion rubles), it roughly corresponds to the average annual volume of export of Russian armaments in recent years. But the effect of armaments export on Russia’s security is usually rather remote (if there is any effect at all – let alone any positive effect).

And, finally, in his statement that the content of the Bulava ballistic missile system is entirely new – and so the expenditures are inevitable – the Vice Prime Minister seems to have overlooked the fact that the main advantage of this system over other Russian missile systems has always been its high degree of unification with the highly reliable land-based mobile missile system Topol M, developed by the Moscow Institute of Thermal Technology. And this circumstance has been pointed out many times by none other than S. Ivanov himself.

As for the cheerful declaration of S. Ivanov that the situation in the defense industry is currently stabilizing, one should by all means agree with it – if this stability is to be understood as a stably unsatisfactory state of affairs. But for this “achievement” one can hardly expect to be praised.

If, for many years, it has traditionally been so that no more than two-thirds of all contracts under the state military order are concluded at the beginning of every summer, that and less than half of the advance payments due for its fulfillment are actually paid, it means that, probably, Russia will need not only to upgrade its mechanism of government guarantees to banks (as it is envisaged in the recent alterations introduced in the Law on the 2009 Federal Budget and submitted a few days ago to the State Duma), but also to take a more careful look at the key actors in this particular sphere of state administration.

What other examples of inefficiency are needed to serve as the grounds for personal decisions to be finally taken?

Really, a crisis can upset only the implementation of those plans that are incertain, secret, of little use, and are not really needed.

V. B. Zatsepin – Candidate of Military Sciences, Senior Researcher of the Department for Military Economics