Home Opinion Russia is losing the arms market, but not for long

Russia is losing the arms market, but not for long

The Russian Federation currently has $ 57 billion in contracts to develop armaments. It is too early to speculate on the long-term repercussions Russia's invasion of Ukraine will have on its military-industrial complex. Western experts anticipate adverse effects, their Russian counterparts are less certain about the outcome.

Parade - 75 Years of Victory: Moscow, St. Petersburg, Nizhny Novgorod
Parade - 75 Years of Victory: Moscow, St. Petersburg, Nizhny Novgorod. Image: MSRabota

Vladimir Putin, president of Russia, revealed on November 26 that the volume of Russian weaponry exports in the challenging conditions of 2022 has already reached $8 billion. In August, Alexander Mikheyev, the director general of Rosoboronexport, forecasted a total of about $10.8 billion, roughly 26% lower than reported for 2021. According to the Stockholm International Peace Research Institute, Russia is the second-biggest exporter of weaponry behind the United States. Russia is losing its grip on arms exports, as even South Korea managed to export about $17 billion worth of weapons in 2022.

According to the SIPRI 2021 report, between 2012 and 2016 and 2017 and 2021, Russia’s share in global arms exports decreased from 24 per cent to 19 per cent. The overall decline in Russian arms shipments from 2012 to 2016 to 2017 to 2021 was almost entirely attributable to losses in exports to India (-47 per cent) and Vietnam (-36 per cent) (-71 per cent).

The world share in the export of major arms of the ten largest exporters in 2016-20 is as follows: USA – 37%, Russia – 20%, France – 8.2%, Germany – 5.5%, China – 5.2%, UK – 3.3%, Spain – 3.2%, Israel – 3.0%, South Korea – 2.7%, Italy – 2.2%, other countries – 9.6%.

The Arms sales race between Russia and the United States

After the Second World War, it is commonly acknowledged that the world split into two blocs: East and West. Such a division is arbitrary, and one of the key indicators of membership in a particular bloc was an attitude toward the military-industrial complex of the United States or the Soviet Union. The United States claimed Latin America, Japan, and Australia. It also controlled Western Europe, South Africa, and the entire Middle East. This is how the North Atlantic Treaty Organization (NATO) evolved, as relations were established from overlord to vassal through a chain of rights and obligations. As a result, all of the bloc’s members were compelled to purchase weapons from the United States, even if they did not need them, because the Pentagon had established explicit rules governing the matter. 

As for the USSR, Moscow frequently utilised the carrot strategy to acquire allies by sending weaponry for a nominal fee. This strategy made it feasible to balance the forces. However, it was difficult because it put a strain on the economy of the nation. Cuba, Africa, Eastern Europe, and South and Southeast Asia comprised the Eastern Bloc.

Numerous nations continue to purchase weapons under contracts inked decades ago, which, according to experts, demonstrates that modern Russia is actively utilising the Soviet legacy. Agreements are extended, or new ones are made, and as a result, Russia now has a market share of approximately 20% of the global armaments market. After the fall of the Soviet Union, the United States strengthened its position by eliminating the domestic military-industrial complex from Eastern Europe and several other regions. For instance, Vietnam actively purchases from the United States, whereas India engages in a complicated game of lowering prices through massive contracts or occasional supply interruptions. Therefore, the United States accounts for exactly twice as many weapons shipments as Russia, and although the situation is not dire, there is little reason for hope for Russia. 

Russia’s secretive arms deals

Recent reports of signing contracts for 1 trillion rubles (about $16.5 billion) indicate that the downward trend will soon be reversed. Since the United States has already vowed to penalise anyone who purchases weapons from Russia, Rostec representatives do not identify their clients. Typically, the Russian military-industrial complex exports products worth 15 billion dollars each year. However, these amounts are subject to change. According to official statements, the Russian Federation currently has $ 57 billion in contracts to develop armaments. It is quite difficult to quantify all of this because it needs to be clarified how many years the agreements are structured. 

Effects of the Ukraine war in the long term

It is still too early to speculate on the long-term repercussions Russia’s invasion of Ukraine will have on the Russian military-industrial complex and arms exports. While Western experts anticipate adverse effects, their Russian counterparts are less certain about the outcome. Following the acquisition of new customers, Russia may increase its supply. Either that or the Americans will be able to put pressure on particular countries, which will reduce the percentage of nations that import weapons from Russia.

Russia has been selling modernised weapons that date back to the Soviet era. It will be challenging for Russia to produce cutting-edge weaponry because of the country’s limited access to semiconductors.

1 COMMENT

  1. You have omitted to point out a crucial feature concerning the most sophisticated weaponry offered by the USA. That is, armaments and especially aircrafts which include more or less secretive softwares. Such weapons cannot be used without USA’s agreement. Accordingly, only Israel has succeeded in breaching this bareer.

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