MOSCOW—Fighter jets roared overhead this week as Russian arms
firms showcased their new wares, including drones, helicopters and
surface-to-air missiles, in a biennial air and space
extravaganza.
But even as the country projects a muscular image, a falling
ruble and weaker economy has forced the Kremlin to scale back its
ambitious plans for a multibillion-dollar military
modernization.
In just one example, Russia's Defense Ministry has cut the
number of Sukhoi T-50 stealth fighters it will buy in its initial
order from as many as 100 to 12, an official close to the defense
industry said.
Opening this year's International Aviation and Space Show at an
airfield outside Moscow, President Vladimir Putin promised Russia
would push ahead with revamping its defense sector and equipping
its armed forces with better and more powerful technology. It has
already restructured its army to make it a more mobile and flexible
fighting force.
"We will continue developing our country's unique capabilities
in the space sector, and will bolster our leading position in the
production of defense-sector aviation technology," Mr. Putin said
on Tuesday.
But while Russia hasn't officially cut its budget for arms
procurement or research and development, industry officials say
state defense and security firms have been asked to reduce their
expenditures by 10%.
Just as importantly, the rubles allocated are worth less when it
comes to buying foreign parts and acquiring Western technology;
Russia's currency has slumped some 20% against the dollar over the
past month.
"The budget hasn't shrunk, but we can only do less and less with
what we are being given," said Rafel Mirzoyan, an engineer at
Concern Radio-Electronic Technologies, based in southern Russia's
Stavropol region.
Russia, of course, remains a formidable power. U.S. military
leaders including Gen. Joe Dunford, President Barack Obama's
nominee to become the Pentagon's top military officer, have
recently named Russia as the biggest threat to U.S. national
security, due to its nuclear arsenal and recent aggressive behavior
toward its neighbors.
In 2011, Russia started on an ambitious rearmament program to
equip at least 75% of its armed forces with more powerful
technology by 2020, a spending plan worth $680 billion when it was
announced.
The modernization has encompassed a range of space projects,
rocket programs and the next-generation fighter jet, the T-50.
But a sharp drop in oil prices has sent shock waves through
Russia's economy, while Western sanctions have added additional
strain on some of Russia's largest businesses, including some
defense firms now on Western blacklists.
It is unclear how much Russia's plans depend on imported parts
and technology that are now off limits because of Ukraine crisis.
But in one high-profile blow, France this month broke a €1.2
billion ($1.35 billion) contract to deliver two warships, cutting
Russia off from a much-needed glimpse at Western weapons
technology.
"You can't do everything: [There are] not enough resources
financially, not enough intellectual resources, not enough
technological partners," said Ruslan Pukhov, director of CAST, a
Moscow-based defense think tank. "You can name up to a dozen
project but you can realize a maximum of five."
The International Aviation and Space Show started in 1993 and
gained force over the 2000s as Russia benefited from rising oil
revenues and arms importers looked to diversify away from Western
weapons systems.
The Russian leader used the venue this week to host Abu Dhabi
Crown Prince Sheikh Mohammed bin Zayed al-Nahyan and Jordan's King
Abdullah II.
One item on display has become Russia's perhaps most-infamous
piece of military equipment—the BUK 2ME, a missile system the U.S.
government says downed Malaysia Airlines Flight 17 last year above
pro-Russian separatist territory in eastern Ukraine. Russia's
Defense Ministry disputes Washington's assessment and has put forth
evidence it says shows the civilian airliner was downed by a
Ukrainian fighter jet.
A salesman from the Russian defense firm Almaz-Antey, the BUK's
manufacturer, described the system's finer points this week to a
delegation of Tanzanian officers, dressed in dark blue military
uniforms heavy with gold braid.
"It will lock on to 24 targets at once," the salesman said,
pointing down at the model of the mobile surface to air missile
system. The visitors were then led out to see the real thing,
parked at the far end of the airfield.
A delegation of Chinese officers was also led past models of
other Russian aircraft, including a Yak-130 and a MiG-35.
Since the start of tensions with the West, Russia has touted
what it calls a strategic alliance with China, which may develop
into plans to build a joint aircraft carrier.
A defense industry official, however, said China is raising its
demands, and wants a controlling stake in the project.
"We both tout the benefits of our friendship," the official
said. "But the truth is, the Chinese are playing hardball."
Write to Thomas Grove at thomas.grove@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 28, 2015 01:25 ET (05:25 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.