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Russia concludes fewer and fewer contracts to supply armaments because of the loss of markets for political reasons, the "Vedomosti" writes. It can only partially compensate these losses.
Deputy director general of the Rosoboronexport state-owned weapons trading company Viktor Komardin talked at the DSA 2012 defense exhibition in Malaysia about "difficulties in concluding new arms supply contracts."
"We have sustained serious losses in contracting: we've lost Central Europe, we're losing North Africa, China is going away from us, and Iran has left us. We haven't lost markets anywhere, except for political reasons. It is known that an arms market is politics in the first place," the director general said.
The supplies to countries of Central Europe that joined NATO were reduced to minimum in the early 1990s, both due to cuts in their defense spending, and their reorientation to the West in military construction and procurements, the newspaper writes. Concluding new large contracts with China stopped in the middle of the 2000s, after the Chinese defense industry reached a relatively modern level," said a source close to the Rosoboronexport leadership.
As for the political reasons behind the loss of markets in Libya and Iran, the deputy director of Rosoboronexport was unequivocal: "the market in Libya was lost because of the civil war last year," said expert of the center for analysis of strategies and technologies Konstantin Makiyenko. The Iranian market which could yield some 1 billion dollars of contracts a year, was shut down due to Russia’s support of UN Security Council Resolution in 2010. It banned supplies of armaments to Iran because of its nuclear program, and Russia's support of the sanction was further strengthened by President Dmitry Medvedev's decision to annul the contract to supply the S-300 missile system to Iran, to which the sanctions did not apply, Makiyenko said.
As a result, the sum of new contracts concluded by Rosoboronexport in 2011 did not exceed eight billion, and it is unlikely to exceed this sum in 2012. The portfolio of the state mediator's orders began to shrink for the first time in many years, a Rosoboronexport source said. Despite the fact that the volume of arms supplies exceeded 12 billion dollars for the first time last year, and it might further increase this year, the indicator will begin to decrease in the next few years, Makiyenko said. Russia has nothing to compensate the lost markets with, yet it still remains a large exporter of weapons thanks to keeping it positions in India and Vietnam in a long term, and in Algeria in a short term, Makiyenko said.