The authoritative SIPRI institute calculated that Russia's military spending in 2016 increased by 5.9%, to $69.2 billion. This allowed it to displace Saudi Arabia and take third place after the United States and China in defense spending.

Photo: Vladislav Belogrud / Interpress / TASS

Russia ranked third in the world in terms of military spending over the past year: they increased by 5.9% and amounted to $ 69.2 billion, follows from the database of the Stockholm Peace Research Institute (SIPRI) updated on April 24. This is an indicator in current US dollars: nominal costs in national currency are recalculated at the average annual market dollar rate. According to this indicator, Russia overtook Saudi Arabia, which ranked third in 2015, and is second only to the United States ($611 billion) and China ($215 billion), although at times.

The total military spending of the states of the world in 2016 amounted to $1.69 trillion, of which Russia accounts for 4.1% against 36% for the United States and 13% for China. In nominal terms in local currency, SIPRI estimated Russia's military spending over the past year at 4.64 trillion rubles. — an increase of 14.8% compared to the corresponding estimate for 2015.

According to SIPRI

There is no exact definition of what is meant by military spending: various sources may or may not include certain categories in military spending ( see infographic). SIPRI tries to include in its estimate “all expenditures on active armed forces and military activities”, including expenditures on paramilitary structures such as the National Guard, civilian personnel of defense departments, social benefits for the military and their families, defense research and development, military construction, military assistance to other countries. SIPRI excludes civil defense spending (managed by the Ministry of Emergency Situations) and current spending on past military activities (veteran benefits, arms conversion, weapons disposal). Even despite the fact that the latter can be paid from the budget of the Ministry of Defense.

SIPRI notes in a press release that Russia's increase in military spending in 2016 ran counter to the general trend of reducing military spending in oil-producing countries following the reduction in oil prices. Thus, Venezuela reduced military spending by 56%, South Sudan - by 54%, Azerbaijan - by 36%, Iraq - by 36%, Saudi Arabia - by 30%. Apart from Russia, the only oil-exporting countries that have increased military spending are Norway and Iran, the institute's data show. The average price of Brent oil last year decreased by 16% compared to the average price of 2015, the Russian grade Urals fell by 18%.

But the estimate of Russian military spending for 2016 included spending in the amount of about 800 billion rubles. ($ 11.8 billion), intended to repay part of the debt of Russian defense enterprises to commercial banks, Simon Vizeman, a senior researcher at SIPRI, told RBC. These appropriations, unexpectedly allocated at the end of 2016, were positioned by the government as one-time: it was about those taken in previous years under state guarantees to fulfill the state defense order. “If not for these one-time payments, Russia’s military spending in 2016 would have decreased compared to 2015,” Wieseman said.

Since the lion's share of Russia's defense spending goes under secret (closed) budget items, it is impossible to say exactly how much the government spent on repaying defense industry loans. The head of the budget committee of the State Duma, Andrei Makarov, called the figure 793 billion rubles. However, the Accounts Chamber in the operational report on budget execution in 2016 reported that guarantees for 975 billion rubles were terminated. on loans from defense industry enterprises for the purposes of the state defense order.

The one-time cost of closing the "credit scheme" of the defense industry led to the fact that the volume of military spending in relation to GDP in 2016 increased to 5.3% - the maximum in the history of independent Russia, according to the SIPRI note. “This heavy burden comes at a time when the Russian economy is experiencing serious difficulties due to low oil and gas prices and economic sanctions imposed since 2014,” the Stockholm Institute notes.

When assessing Russia's military spending, SIPRI relies mainly on official documents of the Russian state budget, follows from the research methodology (and, for example, such data are not enough for China). In other words, SIPRI combines Russian budget data. In the Russian budget itself there is a functional section "National Defense", for which 3.78 trillion rubles were spent in 2016, and for 2017 it is planned to reduce appropriations by a quarter, to 2.84 trillion rubles. But part of the costs that SIPRI includes in its calculation goes under other budget sections, in particular “National Security and Law Enforcement”.

According to Russian experts

According to Vasily Zatsepin, head of the military economics laboratory at the Gaidar Institute, indirect military spending can also be found in such “peaceful” sections as “National Economy” (capital construction within the framework of the state defense order), “Housing and communal services”, “Health care”, “Social politics” (expenses of the Ministry of Defense). In addition, a small part of military spending goes through regional budgets (2.2 billion rubles in 2016).

Tactical exercises of artillery units of the 5th Combined Arms Army in Primorsky Krai (Photo: Yuri Smityuk / TASS)

As a result, the Gaidar Institute estimates Russia's total military spending related to current and past military activities at 4.94 trillion rubles. (5.7% of GDP) last year - an increase of 15% in nominal terms compared to the previous year. This is the broadest possible estimate, which includes pensions for military personnel (328 billion rubles in 2016), the cost of destroying chemical weapons and disposing of weapons and military equipment - those costs that SIPRI does not take into account, since they relate to "past military activities."

Russia has risen to seventh place in the world in militarization of the economy and fourth in terms of security. In two years, government spending on defense reached 5.3% of GDP, or $69.2 billion. These are the conclusions of the PwC Global Defense Prospects study, which Izvestia has read. The company also expects a break in the trend of recent years to reduce such costs in the world. However, experts noted that defense spending is far from only military operations, but also technological development and an important export item for the Russian Federation.

In 2014, when the previous PwC report was released, Russia's defense spending was only 4.5% of GDP. In two years, government spending on defense reached 5.3% of GDP, or $69.2 billion. PwC divides all countries into six categories according to defense strategy - from solving such tasks at the expense of allies, such as Switzerland and Denmark, to global power leaders. The last category includes only Russia and the United States. Both states spend more than 3% of GDP on defense and are actively involved in security projects around the world.

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The first place among countries in terms of militarization of the economy was taken by Oman with a share of the sector in GDP of 16.75%. The second line belongs to Saudi Arabia (10.41%), the third - to Syria (8.49%). The US is in 17th place with 3.3%.

At the same time, according to the Stockholm International Peace Research Institute (SIPRI), Russia ranks third in the world in terms of state budget spending on defense after the United States and China (without reference to GDP). It is also important that in 2016 all oil-producing countries reduced their defense spending due to falling prices for the main export commodity.

As Mikhail Barabanov, scientific editor of the Arms Export magazine, explained to Izvestia, 2016 was not entirely indicative for Russia to judge defense spending.

In recent years, annual defense spending has not exceeded 2.9 trillion rubles. But last year, the Ministry of Finance paid out 800 billion rubles of state guarantees on loans to enterprises in the military-industrial complex. Then, for these needs, the department paid another additional 200 billion rubles. It was this trillion rubles that led to an increase in spending on national defense in 2016 to 3.9 trillion rubles, he explained.

According to the expert, already this year spending will return to the usual 2.9 trillion rubles, and this amount will not change much in the next three years. According to the expert, due to the increasingly complicated geopolitical situation, Russia needs to increase defense spending - their reduction will lead to the disruption of the rearmament program.

The amount of 2.9 trillion rubles provides a balance between the conduct of military operations and the purchase of weapons, the expert noted.

Budget expenditures for defense needs could be higher, I am sure the head of the Center for Military Forecasting of the Institute of Political and Military Analysis (IPVA), Colonel, Professor of the Academy of Military Sciences Anatoly Tsyganok.

For example, US spending is 10 times greater. We first need to invest in submarines in the Navy. An increase in the space constellation is also urgently needed. The third problem is the training of personnel. There is not enough officers, - the expert explained.

However, Russia in recent years not only spends on defense, but also earns on it. In 2016, arms exports from Russia amounted to more than $15 billion. At the same time, it is important that the export of military-industrial complex products is high-tech and, among other things, contributes to the diversification of the Russian economy, which has been struggling with dependence on oil in recent decades.

Despite the significant export of arms, the "self-sufficiency" of defense budget spending is an unrealizable dream, Anatoly Tsyganok stated.

According to analysts, the world will arm itself again by 2021. PwC expects an increase in global defense spending. For example, the United States, which has reduced its military budget in recent years, will increase it to $611 billion. China and India will further increase military spending.

According to the analysis, the compound annual growth in defense spending between 2017 and 2021 should offset previous cuts in defense budgets between 2012 and 2016 in 45% of the countries analyzed.

Despite the expected increase in spending due to increased threats, for example, in the field of cybersecurity, the defense budgets of countries around the world are still under severe pressure. Among the global trends that could have a serious impact on defense and security, PwC points to the shift of economic power from West to East, demographic changes and the development of technology.

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Until the middle of the 20th century, the military budget included only the cost of aviation and ground forces - most countries of the world compiled a “sea” budget to finance the fleet. For the first time, the consolidation of all costs into one financial document was carried out in the UK, the USA and the USSR.

The military budgets of different countries can differ significantly from each other in size and structure. Today, the total cost of financing the armed forces reaches 2.5% of the world's gross domestic product. The undisputed leader of the last decades in terms of the volume of the military budget is the United States, which every year increases the cost of the needs of the army due to constant terrorist threats.

The military budget does not include expenses related to the financing of law enforcement agencies and the treatment of war veterans. Typically, such costs relate to individual items of the national budget.

Structure

Reports on the implementation of the military budget are published annually in the media of most developed countries. Based on these documents, experts identify three main positions for financing:

• the Ministry of Defense of the state or other structure performing similar functions;
• military programs that are implemented not by the Ministry of Defense, but by other government departments;
• activities related to the planning and preparation of the state economy for work during the war.

Some countries include in military spending the costs associated with the maintenance of the army contingents of other states, which are temporarily or permanently deployed on their territory. A striking example is Germany, which, on the basis of several international agreements, partially takes over the financing of the maintenance and development of the infrastructure of the American military bases located in Vilseck and Ramstein.

Expenditure

The funds that come to the accounts of the Ministry of Defense from the military budget are directed to:

• conducting exercises and training personnel of the army and navy;
• the purchase of the latest models of military equipment, its maintenance in good condition (the distribution of resources between the various branches of the military is carried out in accordance with the current state military doctrine);
• officer training;
• financing the work of military educational institutions that operate on the territory of the country.

Defense programs provide for the allocation of activities related to:

• the development of military infrastructure facilities (for example, the modernization of air bases, the construction of military camps);
• the activities of research centers that develop innovative weapons;
• production of the latest weapons.

Activities related to the preparation of the state economy for work in war conditions involve funding:

• development of mobilization plans for government agencies, large manufacturing enterprises and factories;
• accumulation of strategic stocks of raw materials for large enterprises, goods and food for the population.

The growing political tension in the world is forcing Russia to pay more attention to the development of the Armed Forces. In 2016, the country increased military spending by 5.9% to $69.2 billion and entered the top three in terms of defense spending. This is stated in the regular report of the Stockholm International Peace Research Institute (SIPRI).

According to the report, more than half (55%) of the Russian defense budget went to finance the state armaments program. Moreover, there are several such programs. At the moment, there is a program for 2011-2020 (20 trillion rubles), from 2018 a new one will come into force - until 2025. Thus, the Ministry of Defense seeks the continuity of the rearmament process.

The main objectives of the new state armaments program will be the creation of facilities for the deployment of air, land and sea-based nuclear deterrent forces and means. With the conflict escalating off the Korean Peninsula, this looks like a necessary measure. In total, it is planned to put into operation 1740 different objects, said Sergei Shoigu at the collegium of the Ministry of Defense of the Russian Federation.

The military has opponents in the government. So, if the Ministry of Defense was counting on the amount of funding for the upcoming program at 55 trillion rubles, then the Ministry of Finance proposed limiting it to 12 trillion rubles. As a result, a compromise was reached - the costs were optimized, reducing the cost of the program to 30 trillion rubles. How this will affect the country's defense capability is still unclear.

The reasons for the stinginess of the Ministry of Finance are obvious. In the context of a sharp drop in oil prices, budget revenues from the sale of energy products fell sharply. It is impossible to compensate for them through the sale of high-tech products - the Russian economy remains based on raw materials. As a result, military spending in 2016 amounted to 5.3% of Russia's GDP. This is the highest figure in the post-Soviet period.

For comparison, the “norm” for NATO countries is 2% of GDP. These are the costs Donald Trump from American allies in the alliance. For example, Germany spends only 1.3%. Russia, on the other hand, in order to maintain at least an approximate parity, has to spend a much larger share of the gross domestic product.

However, Russian military spending against the background of a similar indicator of a potential adversary - the United States looks very modest: 69.2 billion against 611 billion dollars. In terms of defense budget, America occupies a leading position. Its share in all world military spending is 36%, Russia's share is only 4%. And in 2018, Trump intends to increase the military budget by another 9% or $54 billion.

An important factor in the new geopolitical reality is the military budget of China, which occupies the second line in the ranking. Russia's ally spent $215 billion last year, or 13% of global spending. US ally Saudi Arabia cut spending by almost a third to $63.7 billion, dropping it to fourth place in the rankings.

The top five countries in defense spending. Spending in billions of dollars and percentage growth for 2016.

Vasily Zatsepin, head of the military economics laboratory at the Institute for Economic Policy, sees high defense spending as a negative.

- I draw attention to the opinion of the Deputy Minister of Defense of the Russian Federation Yuri Borisov which he expressed two years ago. According to him, the military burden on the economy of more than 4% of GDP indicates that the country is getting involved in an arms race. I think he can be trusted. There are other indicators, everyday plan. For example, when pensions are not indexed. For four years, military personnel are not indexed with monetary allowance. Let me explain, we are conducting a constant experiment to pay conscripts two thousand rubles a month. But the banks were paid about 1 trillion last year.

"SP": - More, please, about banks.

- This happened in order to return money on loans for the state defense order received from Russian banks since 2011. We also used a credit financing scheme in parallel with the budget. This didn't happen before. Funding for defense needs should go without any loans. To avoid overpaying. According to some estimates, our banks "welded" up to 300 billion rubles.

According to the expert, in 2010 the government chose an "innovative" scheme based on both budget allocations and loans under state guarantees. Banks counted, having invested in the Russian defense industry, at high interest rates, they would then be refinanced in the West, and remain with a profit. However, after sanctions were imposed on them in 2014, the beautiful scheme collapsed. Since the state acted as a guarantor of transactions, it had to take funds from civilian state programs.

Nonetheless, military expert, HSE Senior Research Fellow Vasily Kashin sees in increasing funding for defense state programs the benefit, both for the defense of the country and for the civilian sector of the economy.

- It should be understood that the relationship between defense budget expenditures and the country's military potential is not linear. Just look at the data for the UK, whose military spending is comparable to Russia. At the same time, the UK does not actually have its own nuclear weapons - they are forced to buy ballistic missiles from the Americans. They have a little over 200 combat aircraft, half of which are non-operational. The British army is tens of thousands of people, the navy has run out of anti-ship missiles, etc. In addition, Britain does not have a space program at all. If North Korea and Iran are capable of launching satellites themselves, the British are not.

In France, things are better, but if you compare how much Russia has for every billion dollars invested, then this will also be incomparable. This also includes Saudi Arabia, which Russia has now pushed to fourth place. The Saudis do not have their own military-industrial complex at all, but at the same time they are waging war ( in Yemen - ed.). Moreover, they do not have personnel to service the complex weapons that they buy. There are entire towns of American technicians who are engaged in the maintenance of aircraft, air defense systems, and so on. For example, only a few years ago, the Saudis learned how to change engines in tanks without the help of foreigners. It is a rich but technically underdeveloped country.

That is, the effectiveness, the received combat potential, per dollar invested in Russia is very high compared to other countries. We are comparable to China here, and in some ways even better.

"SP": - Do you think the share of GDP that Russia spends on defense is too large? Can we talk about an arms race?

- The increase in the share of GDP spent on defense is connected with the legacy of a completely terrible period from 1992 to 2009, when nothing was purchased, and nothing was done at all, except for the development of absolutely necessary strategic weapons systems. Since 2009, they began to unwind the mechanism of public procurement and new weapons massively went into the armed forces. Therefore, due to the fact that there was no rhythmic replacement of military equipment for 17-18 years, we had to replace a huge amount of weapons and equipment in a very short time. Some of this arsenal, for example, solid-propellant rockets, will simply physically exhaust their service life and be dangerous. Since radical modernization is expensive, it was easier to re-equip.

Hence the gigantic costs compressed in a short time. Now they are already beginning to gradually decline, and after 2020 they will decrease even more significantly. And in order to prevent this from happening again, in the future we will have to adhere to a more rhythmic approach, when every year a part of the old weapons is planned to be replaced with a new one. Otherwise, it's bad for both defense and industry. It's no joke, combat aircraft for the Air Force were not purchased until 2010-2011.

"SP": - There are many social problems in the country. Is it worth it to spend like this?

— Large-scale defense projects are not only necessary for the survival of the country, but also give a great economic effect. If you look at the difficulties of doing business that companies name, then among the first 2-3 problems you can see the lack of qualified personnel. Our industry really lived for a long time on the personnel reserve of the Soviet period. The old people left, and there was no replacement for them. The average age of engineers and workers was constantly rising. Thanks to the state armaments program, this average age has begun to decrease in our country. A generation of technical personnel has already been trained, who, thanks to their qualifications, can also work in civilian industry. This is a huge contribution to the development of the economy.

For the Russian defense industry, the outgoing 2017 was a rather fruitful year, which was not accompanied by scandals and disruptions in the delivery of military products. The Russian military-industrial complex (DIC) has been loaded with orders for many years, both as part of the implementation of the state defense order and the fulfillment of export contracts. In particular, on November 21, 2017, the head of the Federation Council committee on defense and security, Viktor Bondarev, announced the volume of the agreed state armaments program (SAP) for 2018-2025: 19 trillion rubles will be allocated for its implementation.

Supply of arms and military equipment as part of the implementation of the state defense order

According to Russian Deputy Prime Minister Dmitry Rogozin, the state defense order in 2017 will be completed by 97-98%. On the air of the Russia 24 TV channel on Wednesday, December 27, he noted that in terms of numbers, the result will be no worse than in 2016. Earlier in February 2017, Russian Deputy Defense Minister Yuri Borisov, in an interview with Rossiyskaya Gazeta, said that more than 1.4 trillion rubles would be allocated to fulfill the state defense order for 2017. According to him, the main share of the funds, more than 65%, was planned to be directed to serial purchases of modern types of weapons and military equipment.

Already now we can say that the large-scale state arms program until 2020 has seriously stimulated the development of the Russian military-industrial complex. Over the past 5 years, the share of modern equipment in the Armed Forces of the Russian Federation has increased 4 times, and the pace of military development has grown 15 times. On December 22, 2017, Russian Defense Minister Sergei Shoigu reported to President Vladimir Putin on this as part of the final expanded collegium of the military department, which was held at the Academy of the Strategic Missile Forces. At present, a systematic process of re-equipping the Russian army with a new one is underway; in 2020, the share of such weapons in the troops should be 70%. For example, in 2012 the share of modern weapons and military equipment in the troops was only 16%, and at the end of 2017 - about 60%.

Within the framework of the final expanded board of the military department, the immediate plans for the rearmament of the troops were announced. So the share of modern weapons in the nuclear triad of the Russian Federation has already reached 79%, and by 2021, the Russian ground-based nuclear forces should be equipped with new weapons at a level of up to 90%. We are talking, among other things, about missile systems that can confidently overcome even promising anti-missile defense systems. It is planned that in 2018 the share of modern equipment in the Russian army will reach 82% in the Strategic Nuclear Forces, 46% in the Ground Forces, 74% in the Aerospace Forces, and 55% in the Navy.

Earlier, on December 22, he spoke about the main deliveries of weapons and equipment to the troops in 2017. According to the results of the outgoing year, enterprises of the Russian defense industry were transferred to formations and military units Western Military District (ZVO) more 2000 new and modernized models of weapons and military equipment (AME). Troops Eastern Military District (VVO) received more than 1100 units of weapons and military equipment. In particular, the missile units are being re-equipped with new Iskander-M and Bastion missile systems; as a result of these actions, the combat power of the district has increased by more than 10%. In military units and formations Southern Military District (SMD) more than 1700 units of weapons and military equipment, this made it possible to increase the share of modern types of weapons and equipment in the district to 63%. Thanks to the arrival of new military equipment, combat power Central Military District (TsVO) over the past three years has grown by almost a quarter, in 2017 the troops of the district received about 1200 units of weapons and military equipment.

According to the Russian Defense Minister, more than 50 ships are being built for the country's Navy in 2017. The work is being carried out under 35 state contracts, 9 lead and 44 serial warships and support vessels are being built under them. In total, in 2017, the Navy included 10 warships and combat boats, as well as 13 support vessels and 4 Bal and Bastion coastal missile systems. The composition of naval aviation was replenished with 15 modern aircraft and helicopters. According to the minister, the Ground Forces received 2,055 new and modernized types of weapons, with which 3 formations and 11 military units were re-equipped, and 199 drones also entered the troops. As part of the Russian Aerospace Forces, a special-purpose division and a military transport division were formed. 191 new aircraft and helicopters were received, as well as 143 air defense and missile defense weapons. In total, the Russian military-industrial complex produced 139 combat aircraft and 214 helicopters in 2017, Deputy Prime Minister Dmitry Rogozin spoke about this on the Russia 24 TV channel.

For the future of the defense industry, it is important to increase the production of civilian products

Russian defense industry enterprises can still count on the state defense order, but funds for the renewal of the armed forces will not be allocated indefinitely. The more the armed forces are equipped with new military equipment, the less it will be ordered by the army from the domestic defense industry. The economic and political situation in which Russia finds itself today also affects the financing of state arms purchases. As part of the discussion of the state armaments program for 2018-2025, which has been ongoing since the end of 2016, the initial requests of the Ministry of Defense were reduced several times. The initial requests of the military department amounted to about 30 trillion rubles, but then they were reduced by the government to 22 trillion rubles, and according to the latest data - to 19 trillion rubles.

In the near future, the Russian president sees spending on the country's defense in the range of 2.7-2.8% of GDP (in 2016, the figure was 4.7%). At the same time, it is planned to solve all the previously set tasks for the modernization of the Armed Forces and the military-industrial complex, the RT website reports in Russian. The Russian Ministry of Defense and the defense industry have two strategic goals. The first is to bring the share of modern military equipment in the Russian Armed Forces to 70% by 2020. The second is to increase the share of civilian products in the Russian defense industry to 50% by 2030 (in 2015, this figure was only 16%). Obviously, the second strategic goal follows directly from the first. The higher the indicator of the Russian army's equipment with new military equipment, the less products the military will order from Russian enterprises.

According to the forecasts of the Ministry of Industry and Trade of Russia, by 2020, the growth in the output of civilian products by defense industry enterprises is planned to be 1.3 times. Most likely, such a significant jump in production is planned to be achieved through the mass production of new passenger aircraft of various classes. The Russian government is betting on the production of passenger aircraft MS-21, Il-114-300, Il-112V, Tu-334, Tu-214 and Tu-204. It is expected that by 2025 the number of passenger aircraft produced in the country will increase by 3.5 times - from 30 to 110 aircraft per year. In the future, the basis for the financial stability of the defense sector of the Russian economy should be not only long-term contracts concluded within the framework of the state arms procurement program. At meetings devoted to the defense industry, Vladimir Putin repeatedly said that industrialists should look for new markets, and this is true today for Russian arms exports.

It should be noted that a partial reorientation of the defense complex towards the production of civilian products is already underway in the regions, in particular, in Udmurtia, which is a recognized forge of Russian weapons. As Alexander Svinin, First Deputy Prime Minister of the Government of the Udmurt Republic, told reporters on Wednesday, December 27, following the results of 2017, the defense enterprises of the republic increased the output of civilian products by 10%. According to the official, bringing civilian products of the defense industry to the market is an important task for the government of the republic in the face of declining state defense orders. The Deputy Prime Minister noted that in 2018 meetings with representatives of large Russian companies will be held every two weeks, this work should help in finding new markets for the products of defense enterprises. In December 2017, one meeting has already taken place, during which the head of Udmurtia and the heads of five defense enterprises of the republic, as well as the Chepetsk Mechanical Plant, met with the leadership of the United Aircraft Corporation (UAC). The meeting discussed the industrial potential of defense enterprises, which can be used in the aircraft industry.

Export of arms and military equipment

There are no final figures for Russian arms exports in 2017 yet. But already in March of this year, as part of the 14th international naval and aerospace exhibition LIMA 2017, Viktor Kladov, Director for International Cooperation and Regional Policy of the Rostec State Corporation, as well as the head of the joint delegation of the corporation and JSC Rosoboronexport, spoke to journalists about that the export of Russian arms by the end of 2017 will exceed the figures of 2016. At the same time, in 2016, Russia exported weapons and military equipment in the amount of $15.3 billion.

Export deliveries are a strong point of the Russian defense industry and the entire industry of the country. Russia's positions in the world arms market are traditionally strong. In terms of arms exports, our country ranks second in the world after the United States. The market for arms and military equipment today looks like this - 33% are in the United States, 23% - in Russia, China is in third place with a serious lag - 6.2%. At the same time, according to experts, by 2020 the capacity of the world arms market could grow to $120 billion. The trend in the international arms market is to increase the share of purchases of military aircraft, including helicopters, and the demand for air defense systems and marine equipment is also growing. At the same time, by 2025, in the structure of arms purchases by countries of the world, according to military experts, the share of aircraft will already account for 55%, followed by marine equipment with a serious lag - about 13%.

According to the publication, Rosoboronexport's portfolio of orders today exceeds $50 billion (with a contract term of 3 to 7 years). The five main customers of Russia are as follows: Algeria (28%), India (17%), China (11%), Egypt (9%), Iraq (6%). At the same time, about half of the supplied products already fall on aviation, another quarter on various air defense systems. At the same time, experts note an increase in competition for Russian weapons from China, India, South Korea, Brazil and even Belarus.

If we talk about the most important export contracts of 2017, then they include the signing on August 10, 2017 of the Russian-Indonesian agreement on the conditions for the acquisition by Indonesia of 11 Russian-made Su-35 multifunctional fighters. According to the agreement signed by the parties, the cost of acquiring 11 Russian fighters will amount to $1.14 billion, of which Indonesia is going to cover half of this amount ($570 million) with supplies of its own products, including palm oil, coffee, cocoa, tea, oil products, etc. . This does not mean at all that the goods will physically arrive in Russia, as a rule, in such cases we are talking about exchange goods that can be easily sold on the markets.

The second very important defense contract for Russia concerns Turkey and its acquisition of the S-400 Triumph anti-aircraft missile system. This deal became the main informational occasion for a long time. At the end of December 2017, the head of the Rostec state corporation, Sergei Chemezov, revealed some details of this transaction in an interview with journalists from the newspaper "". According to him, Russia's benefit from the supply of the S-400 anti-aircraft missile system to Turkey is that it is the first NATO country to buy our latest air defense system. Chemezov noted that Turkey bought 4 S-400 divisions for a total of $2.5 billion. According to Chemezov, the Turkish and Russian Ministries of Finance have already completed negotiations, it remains only to approve the final documents. “I can only say that Turkey pays 45% of the total amount of the contract to Russia as an advance, and the remaining 55% is Russian credit funds. We plan to start the first deliveries under this contract in March 2020,” Sergey Chemezov said about the terms of the deal.

Also in December 2017, the Stockholm International Peace Research Institute (SIPRI) published a ranking of the Top 100 largest military-industrial companies in the world in terms of sales in 2016 (both domestic and foreign markets). The total volume of arms sales of Russian companies included in this rating grew by 3.8%; in 2016, they sold arms worth $26.6 billion. The top 20 companies included United Aircraft Corporation (UAC) in 13th place with an estimated sales of $5.16 billion and United Shipbuilding Corporation (USC) in 19th place with an estimated sales of $4.03 billion. On the 24th line of this rating is the Concern VKO Almaz-Antey with an estimated sales volume of 3.43 billion dollars.

Pros and cons for Russian arms exports in 2017

The year 2017 brought both positive and negative moments for the Russian export prospects for arms and military equipment. The positive aspects include the successes of the Russian army, demonstrated in Syria. The fighting in Syria is a very strong advertisement for Russian and even Soviet weapons. In the war in Syria, even obsolete samples of Soviet-made weapons and military equipment showed themselves well, reaffirming their high combat qualities, as well as an excellent level of reliability.

In total, during the period from 2015 to 2017, during the hostilities in Syria, the Armed Forces of the Russian Federation checked and tested more than 200 types of weapons and military equipment in combat conditions. Basically, all tested weapons confirmed the tactical and technical characteristics declared by the manufacturers. Of course, the operation in Syria has become a real benefit for modern Russian aircraft and combat helicopters. For example, many countries are seriously considering the possibility of purchasing a modern Russian Su-34 front-line bomber. However, different models of weapons have shown themselves well in Syria. For example, a modernized high-precision 152-mm Krasnopol projectile was used in Syria, a video recording of the use of these projectiles can be found on the Internet today, this high-precision munition may also be of interest to potential customers.

For its development, the Russian military-industrial complex must remain competitive and look for new export markets for its products. In the context of a decrease in the state defense order, this is especially important and relevant. Of course, Russia will not lose the world's second largest arms exporter in the foreseeable future, but the struggle for sales in monetary terms will only increase. New players of the “second tier” are entering the market, which at the same time have a well-developed high-tech industry. For example, the published SIPRI rating highlights the growth of South Korean military-industrial companies, which in 2016 sold military products worth $8.4 billion (an increase of 20.6%). Russian enterprises must be prepared for the fact that competition on the international arms market will only increase.

With a minus sign for Russian arms exports, and hence for companies in the domestic military-industrial complex, can be considered, which appeared at the end of October 2017. Under pressure from Congress, the administration of US President Donald Trump named a list of 39 Russian defense companies and intelligence agencies, cooperation with which could lead to company and government sanctions around the globe. At the same time, how seriously the American leadership will approach the implementation of the new sanctions package can only be seen in the future. Experts note that the Trump government has the opportunity to both deliver a truly tangible blow to Russian arms exports and sabotage the introduction of severe restrictive measures.

Almost half of the newly published sanctions list were enterprises of the state corporation Rostec, which is the monopoly agent for the export of Russian weapons to the international market. As experts at the Atlantic Council in the field of economic sanctions note: “The listing of new Russian military-industrial complex companies on the sanctions list will increase the potential risk for any state and any company that has business relations with them, forcing them to make a choice: either to do business with the United States, or with these Russian structures.” Washington may use new sanctions as a possible blow to its main competitor in the international arms market. With the help of new sanctions, the US authorities will be able to put pressure on third countries, their governments and companies. Therefore, the Russian military-industrial complex will have to work taking into account the possibility of these risks and increased sanctions pressure, which will not disappear anywhere in the foreseeable future.

As Ruslan Pukhov, a well-known expert in the field of arms in Russia, director of the Center for Analysis of Strategies and Technologies, noted in an interview with journalists "", Ruslan Pukhov, in terms of economy and GDP, today Russia is not even among the 10 leading states in the world, but the country ranks second in arms trade. It is already very difficult to increase sales volumes further: “our” sales markets are saturated (“Russia has already armed half the world with Kornets, “dryers” have even been delivered to Uganda), and sanctions are affecting. Therefore, we need to focus on keeping our second place - and the task is very difficult, new approaches are needed. “I see two options. The first of them is the struggle for non-traditional budgets: not the defense ministries of potential customer states, as is basically the case today, but the police, the Ministry of Emergency Situations, the border service and other departments, where there may still be reserves for the products of the Russian defense industry. The second is the struggle for non-traditional sales markets, that is, for states where Russia practically did not work on military equipment. One of these states is Colombia, which has always been considered the American "garden", - said Ruslan Pukhov. It is worth noting that in early December 2017, Rosoboronexport took part in the Expodefensa 2017 exhibition in the capital of Colombia for the first time. This exhibition just fits into the strategy of searching for new sales markets for Russian military products.

Used photos from the site rostec.ru

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