On the Record with
Ilya Klebanov, Russia's Deputy Prime Minister
For Defense Industries

Russia Puts New Priority on Arms Exports

Ilya Klebanov.

ILA 2000: Russia's flagging arms exports will receive a strong boost as Deputy Prime Minister Ilya Klebanov throws his political weight behind overseas sales of weapons.

Arms makers had long complained the administration of previous Russian president Boris Yeltsin gave them little help. In contrast, Klebanov has visited a number of countries in the last few months where he actively lobbied for purchases of Russian arms.

"It should be said honestly that during the 1990s the state performed this job badly, he told Show News. "Since mid 1999 the situation has begun to change for the better; the executives of many defense industry enterprises have started recently to note with satisfaction a real support by Russia's President Vladimir Putin and the government in promoting products to the world market."

Klebanov noted a recent increase in Russian arms exports put them on track to reach an annual $5 billion in two to three years, which would make it Number Two behind the US. Arms exports are expected to top $4.3 billion this year, compared with a high of $20 billion in 1986, and a low point of less than $2 billion in 1992.

Analysts attributed the recent recovery in Russian arms sales to an increase in regional conflicts such as the war between Ethiopia and Eritrea.

"It is not a secret that over 60% of Russian military exports are accounted for by India and China," Klebanov said. "While continuing to expand the military and technological cooperation with these two countries, we should realize that a further increase in exports will depend on Russia's greater presence in the regional arms markets -- South East Asia, the Middle East, Africa and Latin America, where our presence is rather weak."

Klebanov noted the increase in Russian arms exports in the next few years will require a jump in production in the domestic defense industry, which is already occurring. "Last year it achieved a a more than 40% growth in industrial output, the highest figure among all the domestic industries," he said. "In 1999, for the first time in recent years, the state defense order was completely funded. There were certain problems with funding the defense order in the first quarter of 2000, but in the subsequent months all the funds, allocated in the budget for the defense order, will be transferred to the executing enterprises." Meanwhile the state is taking measures needed to help exports such as tighter procedures, more efficient control over military and technological cooperation, and more aggressive marketing activities, Klebanov said.

By Nikolay Novichkov

©Show News 2000