Military-Technical Cooperation between Russia and Countries of Pacific Rim

By Andrey Frolov  

The sharp breakthrough in “Indian direction” that happened in Autumn 2018 in Russian and Indian MTC, partly symbolizing the beginning of practical intergovernmental arrangement of October 2015 implementation, makes us look again at Arms market of countries of the Pacific Rim in terms of Russia's presence in it. Apparently, in the near future it will keep the leading position in the geography of arms supply from Russia, however it is equally important to look at Russian MTC history comparing with the countries of the region and to point its characteristics.

Russia and the USSR have a long history of arms supply to different Asian countries. In the days of Imperial Russia small arms was supplied to Korea and China, in 1920–1930s during the Soviet period there were major arms supply to China both for Communist forces and Kuomintang. Mongolian People's Republic was also a large recipient of Soviet arms due to vicinity of the USSR to Mongolia. After the Second World War the USSR started to supply arms to Korea, Indonesia, and North Vietnam, together with supplies to Communist China. Since 1961 active MTC cooperation with India has begun, and before that there had been the contract with Pakistan. Then, in 1970s Laos and Kampuchea have also been supplied with arms.

Due to the collapse of the USSR MTC with China was renewed (which started to renew in the end of 1980s) and since 1991 cooperation with India has increased. Meanwhile there were breakthrough to previously closed for the USSR markets. This is the case of Malaysia and South Korea, as well as Bangladesh and Myanmar. Quite important move was the return to Indonesian market. In 2000s Thailand and the Philippines were also supplied with Russian arms.

Speaking about the situation of 2010s the following should be noted. From year to year it is difficult to estimate Russian MTC with countries of the Pacific Rim due to information protection about Russian MTC on the whole. However, there are some figures in the media and some contracts with region countries become known.

Thus, based on open data analysis it may be stated that during the 2010s India, China and Vietnam were the leading purchasers of Russian arms. As for China, this situation is especially significant because at the end of 2000s and the beginning of 2010s the number of large Chinese contracts declined, however signing of some new contracts (on Su-35 fighter and four ЗРС С-400 regiments) changed this trend. Thus, according to official data, in 2013 China and CIS accounted for 13% of Russian arms export. In 2015 Pacific Rim accounted for 42% of Russian arms supply, and Middle East and North Africa accounted for 36%. It was also reported (in 2016) that order portfolio with China reached 8 billion dollars or 16% of the whole portfolio, and supplies reached 3 billion dollars or 20% of the total annual arms export.

It is interesting that in 2017 the share of Pacific Rim export increased up to 45% probably due to shipment growth under the contracts with China. It was also reported that last year India accounted for 16% of all export orders for Russian arms and order portfolio has amounted to 4 billion dollars.

In 2018, portfolio of contracts with China reached 6.5 billion dollars, and China accounted for 12% of arms supplies (about 2 billion dollars). Vietnam accounted for 1 billion dollars of order portfolio.

As for MTC of Russia with region countries characteristics, the following features should be noted:

  • As a rule, the region countries were initial customers for new Russian arms (Su-30MKI and Su-35 fighters, 11356 project frigates, S-400 surface-to-air missile systems).
  • Specifics of trade with the region countries during the period of 2011–2018 can be described as dominance of contracts for aviation equipment supply.
  • In MTC with Pacific Rim countries wide range of financial instruments is used (customer resources, Russian credit, barter, gratuitous transfer and national currency use).
  • The region countries were the first to suffer from CAATSA American Law in the part of MTC with Russia (Indonesia, India, and China).
  • Russia had not only to face rivalry from her usual opponents (MIC of the West, Israel and China) but also to suffer from increasing capacity of the region countries MIC.
  • Since 2014, Pacific Rim countries have become the only source of Russian Military import, especially of components for platforms produced in Russia.

 

“India is Russia's major partner in aircraft building. It concerns supply of various samples of Russian equipment to the Indian market as well as mutual production programs. Together with HAL Company UAK is working on licensing production programs, repair and modernization of Su and MiG as well as on mutual airplane development programs, for example, promising multifunctional fighter (FGFA)”

D.V. Manturov, Minister of Trade and Industry of the Russian Federation

 

01 | 2019 | new defence order. strategy

 

©New defence order. Strategy | 01 | 2019 

 

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