Sunday, August 26, 2007

Seeing power and rubles

I want to apologize for not updating recently. My office's sister organizations in the Air Force, Navy and Office of Secretary of Defense agreed recently to engage some Lean Six Sigma gurus in pursuit of 'business process improvement.'

The whole thing feels like it is some sort of pyramid scheme. I just have this sneaking feeling that nothing will get done until four or five of my civilian coworkers get their 'green belt' or 'black belt' certification.

Anyways, I wanted to offer an alternative narrative for recent Russian military exercises and pronouncements. One might see the Kremlin's decision to dust-off its strategic toys and its participation in the Shanghai Cooperation Organization as demonstrations of Russian power, but I tend to see ruble signs as well.

My thinking on this issue goes back all the way back to Peace Mission 2005, which was a series of joint Russo-Chinese military exercises ostensibly aimed at counterterrorism operations. The counterterrorism theme didn't stop Russia from rolling out its strategic bombers for the occasion.

This idea was reinforced the following year by reports of Putin crowing over record-breaking arms sales figures in 2005. My curiosity was peaked, so I tracked down the most recent copy of the Congressional Research Service's "Conventional Arms Transfers to Developing Countries" report. I prefer the CRS report to other surveys of arms sales when it comes to French, Russian and Chinese sales. This is because sales to the developing world generally constitute 80-90% of total sales for each country.

The information on Russian sales since 1998 is very revealing, particularly relating to combat aircraft. Russian R&D spending on aircraft technology bottomed out after the transition from communism in the early 1990s. As a result, Russia's last new aircraft (the Su-34) had its maiden flight in 1990 and took almost 15 years to go into production. Sukhoi is supposedly pushing a fifth-generation fighter (the PAK FA) into production by 2012, but even with Russia's influx of foreign currency, I wouldn't hold by breath for it.

In order to complete with increasingly advanced U.S. and European designs, the Russians have agreed to riskier payment structures and more deferential production terms. That will only so far though. Another way for Russia to keep sales up is to demonstrate that its aging equipment is still relevant on today's battlefield.

The People's Liberation Army Air Force generals didn't bite back then, so the Russians may be upping the ante. What is a better selling point than 'these bombers are serious enough to scare Europe's NATO members'?

The same could be said about Russia's decision to put the Admiral Kuznetsov back to sea. Showing the Chinese what their Varyag hull could do when completed might quiet some of their complaints about cost and schedule overruns.

If market penetration in the former Soviet republics of Central Asia has dipped in recent years, joint military exercises can be an effective way to showcase what they've been missing.

I'm not saying the prospect of sales is the only motivation for these decisions, nor am I discounting the argument that arms sales in and of themselves can be a power play. My point is that many of the recent Russian military activities I highlighted also have clear monetary motivations.

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