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Russia eyes East Asian arms
market
By Alan Boyd
SYDNEY -
Russia is stepping up diplomatic efforts to secure a
bigger foothold in the flourishing East Asian weapons
trade as it quietly capitalizes on the region's
ambivalence toward the US-led invasions of Iraq and
Afghanistan.
Indonesia, Malaysia, Thailand and
Vietnam are among the targets of a marketing blitz aimed
at winning new friends for Moscow and restoring defense
industries that straddled the world during the Soviet
era but are now in serious decline.
Drawn up in
the mid-1990s but disrupted by the 1997 Asian economic
crisis, the strategy has been revived as part of a
redefining of Russian security interests, as planners
confront post-Cold War uncertainties and shifting
alliances.
Analysts say Moscow is keen to
establish a foothold in Southeast Asia, and to even
court traditional US allies farther to the north, to
counter China's billowing economic influence and defuse
a multitude of threats to its own borders.
"Essentially they are picking up where they left
off in 1997, but with the added challenge [of]
responding to global terrorism tensions in a regional
context," said a Western European diplomat. "Undoubtedly
the transfer of military technology is a core instrument
of Russian diplomatic policy, as it was right through
the communist era, and of course it was particularly the
case from Asia's perspective."
East Asia is of
strategic interest to Russian planners because of its
growing economic clout and the disenchantment evident in
much of the Islamic world with Washington's aggressive
foreign policies.
President Megawati
Sukarnoputri of Indonesia, the fiercest critic of US
intervention in Iraq, will visit Moscow next week for
bilateral talks that are expected to touch on the
possible acquisition of fighter jets, air defense
systems and helicopters. Jakarta has been denied US
weapons since 1999 in retaliation for its poor
human-rights record in East Timor and other restive
provinces. Conservative legislators in Washington have
blocked Indonesia's efforts to have the blockade lifted.
Malaysia, another predominantly Muslim state,
signed a US$48 million contract last April for
multi-role fighter aircraft that will be delivered
during the next three years from a joint Russia-Indian
plant. Already equipped with Russian MiG-29 fighter
jets, Kuala Lumpur is believed to be considering other
acquisitions from Russia, ranging from battlefield tanks
to submarines and missile batteries.
Vietnam, a
staunch ally from the Soviet era, purchased several
patrol boats last year and relies heavily upon Russian
technicians to refurbish its mostly 1970s military
technology, including jets, tanks and artillery.
Even Thailand, the closest US ally in Southeast
Asia, is considering buying Russian equipment as an
alternative to the equally cheap Chinese weapons, which
are generally of poor quality and have not lived up to
pre-sale expectations.
Prime Minister Thaksin
Shinawatra led a delegation of service chiefs to Moscow
in October that revealed a different ploy by
cash-strapped Russia to open up new markets: barter
exchanges. "They have offered to repay a $70 million
obligation from purchases of Thai rice with a package of
satellite technology and military equipment, and the
purpose of the visit was to evaluate the equipment.
There is no commitment to buy weapons, as this was an
exploratory trip," Defense Minister General Thammarak
Isarangkura na Ayudhaya said on his return.
Russia already matches the US deliveries of
artillery, armor and helicopters to the Asia-Pacific
region, but lags badly in sales of missiles, supersonic
fighters and other more advanced military technology.
Economic difficulties forced sharp cutbacks in
military budgets between 1997 and 2000, but Russian
producers still managed to sell 350 tanks and 20 pieces
of towed artillery, compared with 93 and six units
respectively for US suppliers. Each country supplied
about 50 helicopters.
Only China and a
scattering of European suppliers challenged the US in
missile deliveries. The Chinese, ironically dependent on
Russian expertise for much of their military know-how,
were the biggest source of anti-ship missiles, but
trailed the US in supplies of surface-to-air missiles.
China re-entered the Russian arms market in
1994, reluctantly putting aside three decades of
ideological differences to forge a loose diplomatic pact
with Moscow as a hedge against US expansionism.
During the Cold War it was ideology that largely
determined the pattern of Asian weapons shipments, as
Moscow armed the Vietnamese against US forces and the
Indians against Chinese-backed Pakistan, while staging a
misjudged occupation of Afghanistan to counter the
spread of Islamic fundamentalism.
Both the scope
and penetration of Russian export shipments remain
limited, with India and China together accounting for
more than 70 percent of Moscow's acknowledged global
weapons sales of $4.8 billion in 2001.
Although
the tally was $1 billion more than the previous
post-Soviet record, registered in 1999-2000, it
represented a market share of only about 12 percent and
was a mere one-fourth of Russian sales in the late
1980s. By comparison, the United States sold $13 billion
worth of arms in 2001 for a 50 percent market share,
benefiting from the weakening of the dollar against
other major currencies and its technological edge over
the crippled Russian military establishment.
Hamstrung by the loss of non-Russian plants
after the breakup of the Soviet Union, and an unpaid
claim of $880 million on the government from previous
transactions, the 1,700 defense contractors are not
geared up to compete in export markets.
"The
Russian defense industry was mainly developed to meet
the demand of the Soviet armed forces and Warsaw Treaty
Organization allies. After the end of the Cold War the
dramatic reduction in orders for equipment from the
Russian Ministry of Defense created a crisis in the
defense industry and dependence on exports - previously
relatively low - increased dramatically," said Dr Ian
Anthony, an analyst at the Stockholm International Peace
Research Institute (SIPRI).
President Vladimir
Putin, anxious to restore Russia's flagging
international prestige, is credited with the exports
strategy, which is based around higher production
subsidies and the coordination of more private sales
through state marketing mechanisms.
He also
brought back the time-honored Soviet practice - also
widely pursued by the United States and its allies - of
using military hardware as a diplomatic lever, often
coupled with transfers of energy and transport fields
technology.
As the exports focus spreads to
other regions, it is no longer clear whether shipments
are being driven by commerce or ideology.
Weapons have found their way to unstable regimes
in Myanmar, Iran, Syria, Libya, Yemen and much of
Central America, as well as less-volatile but smaller
partners such as Greece, Bangladesh and Algeria.
Washington has charged that Moscow broke a
United Nations embargo on military sales to Iraq,
equipping Baghdad's forces with night-vision goggles and
anti-missile defense systems that were later used
against US troops. Iran alone has taken delivery of more
$3 billion worth of military hardware, including
submarines that some analysts fear could one day be used
against Asian oil tankers passing through the Strait of
Hormuz.
Moscow has also provided Iran with a
nuclear reactor, and the US Central Intelligence Agency
says it has proof that Russia is supplying
ballistic-missile technology to Iran, Libya and Iraq, as
well as China.
China's weapons-modernization
program is causing particular unease as it threatens the
supremacy of the US warships that might be needed to
prevent a blockade of Taiwanese ports if Beijing reacts
to resurgent pro-independence sentiment in the renegade
province.
Last year Beijing purchased eight
Kilo-class submarines fitted with missiles, two
Sovremenny destroyers and two 300 FM surface-to-air
missile systems with a total value of $3.1 billion,
according to Russian data.
With an estimated
expenditure of $40 billion annually since 1998, China is
now believed to be matching Japan's military budget,
though official data are much lower. This is more than
the entire annual budget of the 10 Southeast Asian
countries.
"Our primary concern is the enhanced
ability of the PLA [People's Liberation Army] to
penetrate and perhaps even neutralize US Pacific Fleet
defenses using the more sophisticated Russian ballistic
missile technology, in which case would be looking at a
destabilizing [effect] beyond the immediate region,"
said a US diplomat. "There are protocols for transacting
military hardware in what we refer to as unstable
regions. It is our contention that Moscow, whether
motivated by commercial or other objectives, is not
adhering to the spirit of these protocols."
South Asia and the Korean Peninsula also pose
long-term risks of destabilization from the influx of
Russian arms, while there is a secondary threat that
weapons could find their way to insurgents in the
Indonesian archipelago, Sri Lanka and Myanmar. North
Korea has little convertible currency and spent a modest
$2 billion annually on defense in 1998-2002, ranking
ahead of only Vietnam, Indonesia and the Philippines.
However, it is believed to be bartering commodities for
Russian weapons.
Russian Defense Minister Sergei
Ivanov admitted during a visit to South Korea this week
that Russian order books for weapons shipments had
increased sharply since Middle East tensions began to
rise. "There is no doubt that the war in Iraq has fueled
the arms race not only in North Korea but in all of the
world," he told Interfax, the Russian news agency.
"As a result of the Iraq war and the accusations
of illegal Russian arms deliveries to Baghdad,
applications for Russian weapons systems have soared ...
over the past month. Thank you for the free
advertisement," Ivanov added.
(©2003 Asia Times
Online Co, Ltd. All rights reserved. Please contact content@atimes.com
for information on our sales and syndication policies.)
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