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  • Whose armament is better?

    Agency WPS
    DEFENSE and SECURITY (Russia)
    May 30, 2005, Monday

    WHOSE ARMAMENT IS BETTER?

    SOURCE: Trud, May 26, 2005, p. 6

    by Alexander Komlev



    The dynamic development of military and technical cooperation in the
    Union State of Russia and Belarus will promote provision of stability
    and security in Eurasia. Director General of FGUP Rosoboronexport
    Sergei Chemezov talks about the state and prospects of
    Russian-Belarusian military and technical cooperation.

    Question (Q.): Sergei Viktorovich, how can the military and technical
    cooperation be characterized in the post-Soviet territory today?

    S. Chemezov: Russia concluded the agreements on military and
    technical cooperation with Ukraine, Belarus, Moldova, Kazakhstan,
    Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan, Armenia and
    Azerbaijan. At that, this cooperation is special with each state.

    The state participants of the Organization of Collective Security
    Treaty, i.e. Armenia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan,
    have preferences in the course of purchases of Russian military
    production. However, there is one important reservation. The
    purchased military hardware should be adopted in the national
    military units included in the collective forces of fast response.
    Only in this case the export cost of the production will be equal to
    the purchasing price for Russian Armed Forces.

    Besides, the value added tax isn't levied on advance payments of
    allies and delivery is carried out at Russian internal prices. In
    case of the withdrawal of some side from the Treaty, the preferences
    should be liquidated and difference between the export and reduced
    prices should be drawn up as the national debt.

    Specialists have already calculated that the participation in the
    joint military and technical project of three-four states reduced
    their expenditures of each state by 70-100%.

    On conditions that about 500 enterprises of Russian defense industry
    have co-operational production, scientific and technical relations
    with over 1200 managing subjects of the CIS, not only an economic
    effect but the total increase in this or that high-tech sphere is
    guaranteed. As it is known, 103 enterprises, which belong to Russia,
    Armenia, Belarus and Ukraine, participate in the cooperation for
    production of anti-aircraft missile system S-300PM. Moreover, 568 CIS
    enterprises participate in production of MiG-29.

    Of course, it is rather difficult to cooperate in the situation when
    a lot of ties for development and production of armament were lost
    and united technological chains were broken. The aircraft building is
    very sensitive to it. As it is known, the state of this industry
    plays a significant role in provision of national and collective
    security. Each fifth plant, which produced flying vehicles and
    airborne electronics, found itself abroad in 1991-1992. Russian
    aircraft building lost over 40% of repair plants and 15% of
    enterprises for production of engines for military requirements and
    aircraft armament. Several enterprises, which had produced component
    parts, had to work in the Baltic States, Moldova and Kazakhstan.
    Russia practically lost the plants for production of military
    transport helicopters (they are situated in Ukraine and Uzbekistan
    now), engines for helicopters, cruise missiles and military transport
    planes (basically, in Ukraine), elements of airborne electronics and
    armament, including homing heads for air-to-air and air-to-surface
    missiles.

    Q.: What countries set the integration pace today?

    S. Chemezov: Of course, Russian-Belarusian cooperation is an example
    of development of the integration processes. The result of
    cooperation, which has been stirred up since the late 90s, is the
    growth of the share of armament and military hardware produced in
    cooperation between Russian and Belarusian defense enterprises in the
    joint export of Russian production. In accordance with some
    appraisals, it reached the level of 30-35%. It is conditioned by the
    fact that about 33% of assembly capacities and corresponding research
    centers of the ex-USSR are concentrated in Belarus. Moreover, the
    political leaderships of our countries try to strengthen our
    bilateral relations.

    Q: Did the disintegration and breakup of cooperation ties between
    defense industries of ex-republics of the USSR tell on the export of
    armament?

    S. Chemezov: Unfortunately, the motives and facts of dumping behavior
    of several companies on the market still persist. On the whole, it
    seems that the potential of free competition between CIS countries
    has already exhausted its resources. The phase of joining of efforts
    in the sphere of military and technical cooperation and coordination
    of joint actions on the world armament market takes place now. The
    coordination of prices is another important factor. The profitability
    of special exporters can be increase by 10-14% in case of use of
    joint price policy. The regime of mutual supplies for cooperation
    promotes the reconstruction of scientific, technical and production
    cooperation between defense industries of Russia and Belarus.

    The lists for supplies of over 600 items of production from 59
    enterprises of Belarus for 68 enterprises of Russian defense industry
    and of about 500 items of production of Belarusian defense industrial
    complex without licensing and imposing of any customs duties.

    The actions of Russian and Belarusian special exporters are well
    coordinated today.

    Q.: How is it possible to characterize the jural space in the sphere
    of military and technical cooperation between Russia and Belarus?

    S. Chemezov: As a favorable one. The military and technical
    cooperation between Russia and Belarus has being carried out since
    July, 1992. Several bilateral intergovernmental agreements were
    concluded. The agreement on mutual protection of rights to results of
    the intellectual activity used in the course of the bilateral
    military and technical cooperation, which was concluded between
    Russian and Belarusian governments, became another step on the way of
    improving and unification of the standard-legal base in the frames of
    the Union State. The most important fact is that both sides undertake
    not to supply military production made with the use of intellectual
    property of one of the sides to third countries without coordination.
    By the way, Russia and Kazakhstan signed the same agreement too.

    Q.: What role do intergovernmental financial and industrial groups
    play on the CIS market?

    S. Chemezov: The role of intergovernmental financial and industrial
    (MFPGs) is very important in creation of the united technological
    space in the framework of the Union State and CIS. Several
    Russian-Belarusian MFPGs, e.g. Oboronitelniye Sistemy, BelRusAvto,
    Elektronniye Tekhnologii etc., are working in the Union State. At the
    present moment, the question concerning the participation of some
    artificial person of Ukraine in MFPG Oboronitelniye Sistemy is being
    solved at the present moment.

    Q.: In what projects and spheres is the military and technical
    cooperation between Russia and Belarus especially productive?

    S. Chemezov: The biggest potential of the military and technical
    cooperation is in the sphere of capital repairs and upgrading of
    military hardware, including planes Su-22, Su-27, MiG-29, helicopters
    Mi-8 and Mi-17, combat infantry vehicles BMP-1 and BMP-2, armored
    troop-carriers BTR-60 and BTR-70, anti-aircraft systems S-300V and
    communications facilities. Belarusian defense industrial complex has
    great opportunities in this sphere. For example, over 100 Belarusian
    enterprises participated in joint programs of upgrading of military
    production made in the USSR at the present moment.

    Belarusian-Russian center of after-sales service, upgrading and
    repair of armament and military hardware for anti-aircraft forces
    Oboronpromservis seems to be a very prospective and interesting
    project. This interstate structure will provide the activity for
    maintenance of anti-aircraft facilities deployed on the territory of
    Belarus, Kaliningrad region and North-Western region of Russia.

    We have also the so-called international projects. For example, FGUP
    Rosoboronexport, Belarusian special exporter Beltekhexport, public
    corporation Peleng and French company Tales participate in the
    international tender for supplies of modern fire control systems for
    upgrading of T-72M1, basic tanks of Indian Armed Forces. The
    foundation of the fire control system is the day and night
    multi-channel thermal imaging sight "Sosna-U" produced by Belarus.

    (...)
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