Gennady Gornostaev, 
Master of Economics, 
chief of section of the Russian foreign economic relations research institute under 
the Ministry of economy of Russia 

Now there is a strong necessity to determine the ways to develop Russia’s foreign military-economic relations. Two types of these relations can be defined: the trade mediator’s type and the cooperative one. In the first type armaments producers and state mediators just sell military production in the world market. The relations of the cooperative type allow the armaments exporters and its customers to cooperate for armaments design, production and purchase.

The Russian plants seldom participate in the armaments design and production cooperation with the foreign countries except the CIS states. Russia practically has no means to regulate international cooperation programs on armaments development. In the frames of the CIS such programs are regulated by the special governments agreements in every particular case. Despite the lack of experience in international cooperation programs, few collective programs on armaments modernization with the foreign partners were still launched in Russia. Some efforts were taken to develop licensed production of the Russian military equipment abroad. The development of the international cooperation will gradually involve the Russian defense industry in the world military economy.

After the dramatic fall in the beginning of the 90’s the Russian armaments export has stabilized on the level of USD 3 billions a year by the end of the decade. Russia has the forth place on armaments export volume after the USA, Great Britain and France. But the destinations of the supplies, the approaches to participation in international exhibitions, attitude towards promotion campaigns have changed.

Now 90% of Russia’s military export goes to the developing countries. Among the regions we have the strongest positions in Asia and Africa, weak position in Europe and very poor one in the North and the South America. China, India, Kuwait, Malaysia and Vietnam are the major purchasers of the Russian armaments and military equipment. In the second half of the 90’s Europe received 12% of the Russian armaments export. The biggest part of these supplies goes to the East Europe although the export volume and the number of the customers have decreased. Russia also lost considerable part of the American armament markets.

Russia’s active efforts to increase its military export resulted in enlarging the number of the countries that purchased the Russian AME. In 1992-1998 Russia supplied its military production to 25 states contrary to 20 in 1988.

The half of either Soviet or Russian military export consist of aircrafts. Late in the 90’s Russia had 18% of the world military supersonic aircrafts export. Having the second place in the world on the military helicopter export, Russia delivered them only to the developing countries. It had the second place in the world on the armored vehicle supplies, the third place on the missile weapons export and the first one on the export of motor torpedo-boats, A/S ships and mine-sweepers. Russia’s lag behind the leading industrial countries in the field of electronics and computer technics caused the decrease of control system export.

Thus, the arms trade is major part of Russia’s foreign military-economic relations. Both the deep economic crisis and the lack of reliable foreign allies and partners complicate the development of the cooperation for the AME design and production. If Russia wants to turn its military-industrial potential into the dynamically developing part of the economy it should reconsider its approaches to the military-industrial cooperation according to the new tendencies of the international military-economic relations.