Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Russia's Growing Military Power

Politics / Russia Jan 26, 2014 - 06:20 PM GMT

By: Pravda


Today, there is practically nothing left from the military-industrial complex of the USSR, which still strikes imagination of many historians around the world. The collapse of the Soviet military complex occurred after conversion and separation of the republics, where Soviet defense industry companies were located. Will Russia be able to bring back its erstwhile defense power?

Twenty years ago, the system of defense enterprises vanished. The Soviet defense industry accounted, according to various estimates, for 40 percent of the economy of the USSR. State orders for the production of arms in 1992 decreased eight times. After the collapse of the Soviet Union, the need in a powerful defense industry similar to the one of the socialist period, was gone. The countries that previously were regarded as opponents, started to turn into partners. Russia's transition to the market economy led to military conversion, when many industrial companies were either transferred to the civilian sector or reconstructed in large corporations and given to private hands.

It would seem that a lot of time has passed since the collapse of the USSR, and the military and industrial complex of Russia was supposed to adjust itself to working conditions in a new state. However, Russia still has to collect its fragments in former Soviet republics. The question of defense industry cooperation became especially important at the time when Ukraine announced association intentions with the EU. Although the agreement was not signed in the autumn of 2013, Ukrainian President Viktor Yanukovych decided not to step away from the path of European integration - he only suspended the talks. In this regard, spokespeople for the Russian Ministry for Industry and Trade expressed serious concerns for the Russian defense industry and set up an expert group to analyze adequate risks. It is quite obvious that the continuation of cooperation between Russia and Ukraine in the sphere of defense industry would jeopardize the national security of the Russian Federation, even though the EU has no intention to limit this relationship between the two countries.

The Russian authorities made a good decision to give an interest-bearing loan to Ukraine and conclude a number of agreements on this background. In fact, Viktor Yanukovych and Vladimir Putin discussed the use of Ukrainian defense industry for the needs of the armed forces of the Russian Federation, which somewhat alleviated Russia's anxiety about the defense industry of its own.

Chief editor of National Defense magazine, Igor Korotchenko, told Pravda.Ru that it was vital for Russia to strengthen partnership with only two countries - Belarus and Ukraine.

"We have two states that have powerful military and industrial complexes. They are Ukraine and Belarus. The countries that remain hostile to Russia - the Baltic States and Georgia - fortunately, have no defense industries that Russia would be interesting in. Therefore, we will be building the policy of cooperation with only two countries - Belarus and Ukraine. I think that there are very good prospects at this point. As for Belarus, we have no problems with them at all. I also hope that the emerging policy of political and economic rapprochement between Kiev and Moscow will give birth to a number of large orders for the Ukrainian defense industry, that will work in the interests of the Russian Federation," Vladimir Korotchenko told Pravda.Ru.

During the Soviet times, the powerful military-industrial complex embraced both the regions of modern-day Russia and the republics of Uzbekistan, Kazakhstan, Tajikistan and Turkmenistan. In many of these areas, military companies of the USSR became town- forming ones with civilized neighborhoods built around them. Defense enterprises were created on the basis of national integrity, taking into account the need to provide jobs to people. When integrity was no longer a priority, and the foreign policy of breakaway republics changed under the pressure of world leaders and various circumstances, many production facilities were shut down for good. That, however, was no longer a concern for Russia.

"In fact, the republics that became separate states (except, perhaps, for Turkmenistan and Kazakhstan) became quasi-states, failed independent countries that had completely lost their military complexes as corporations created in the Soviet Union," vice president of the Russian Academy of Geopolitical Problems, political scientist Vladimir Anokhin said in an interview with Pravda.Ru. "In my opinion, it is only Russia that now realizes the seriousness of creating a military-industrial complex. Everyone else have two ways to go: either become importers of military products of other countries, or find cooperative relations with Russia to act as participants in the creation of military and technical complexes. Presently, I do not see any republic, except for Ukraine, of course, that could fully cooperate with Russia in terms of defense. Therefore, the entire military-industrial complex of other former Soviet republics was actually plundered, destroyed and sold," the expert added.

In recent years, Russia's defense spending has grown along with the volume of state orders. The industry began to move in 1998, when production began to show growth through private investment. Nowadays, the situation has been showing even more obvious changes for the better. In 2008, the federal budget allocated 800 billion rubles for military- industrial needs, in 2009 - one billion more than that, in 2010 - treasury allocated 1.1 trillion of investment.

"Now Putin tries to put Russia back on the way of development. He tries to pull other countries through the Eurasian vector of Russian politics too, - President of the Academy of Geopolitical Problems of the Russian Federation, Doctor of History, Colonel General Leonid Ivashov told Pravda.Ru.. - As they say, let's hope it happens. But all these 20 years, even since Gorbachev - 25 years, were a historic zigzag: we were going ahead and then turned in the opposite direction."

The development of public and private partnership in defense industry has been a topic for discussion lately. Should Russian businesses be granted access to the nation's defense industry, it will help solve such important tasks as technical upgrade of defense enterprises and the development of promising and breakthrough technologies, without which the creation of a reliable and powerful military-industrial complex is impossible.

Military analyst of the Komsomolskaya Pravda newspaper, former head of the press service of the Ministry of Defense, retired colonel Victor Barantsev told Pravda.Ru:

"Slowly but surely, we have been creating unified military space. We already have a group with Belarus, we now have a common air defense system with Kazakhstan, we have strategic interests in Kyrgyzstan and Tajikistan. Russia is doing its best to stimulate the military-industrial enterprises that work on the territory of former Soviet republics. With every year, we connect these republics to the Russian defense industry stronger."

According to Victor Barantsev, Russia must continue to move in this direction, because this is a basis for the Collective Security Treaty and global military strategic interests in general.

Maria Snytkova

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


26 Jan 14, 22:22
Russia Military Power

Russia is at least 12 years behind the US, and it never was much better, when the USSR collapsed we all had a good laugh how crappy their stuff was and how truly unprepared they were for any kind of conflict with the West.

27 Jan 14, 01:37
New Cold War Waste

When the Soviet Union collapsed, the Russian soldiers started selling their equipment to tourists and the warships were not painted any more so that they rusted and sunk, this was a giant step forward for peace in the world. The Western countries that used to be the targets for the USSR troops could let millions of their young men do more useful things than serving in their armies waiting to be attacked. But now Putin seems to want to create a new cold war again... :-(


Post Comment

Only logged in users are allowed to post comments. Register/ Log in