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Ban on defense products export to Russia will ruin Ukraine’s industries — analyst

August 28, 2014, 19:38 UTC+3 MOSCOW
Director of the Center for Analysis of Strategies and Technologies Ruslan Pukhov says the ban was is an utterly populist decision that may work only in the short term
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© ITAR-TASS/Marina Lystseva

MOSCOW, August 28. /ITAR-TASS/. The ban on the export of military and dual purpose products to Russia will ruin Ukraine’s military-industrial complex, the director of the Center for Analysis of Strategies and Technologies Ruslan Pukhov told ITAR-TASS on Thursday.

“The Ukrainian military-industrial complex will not survive without Russian contracts. The West does not need its products at all. The hostilities will draw to an end sooner or later, but the Ukrainian defense industry and engineering will be stone-dead by then. President Poroshenko will be unable to honor his promise to disburse $3 billion to re-equip the armed forces and upgrade the fleet of military hardware in 2015-2017. There is just no source where the money may come from. And the domestic contract will fail to substitute for missing Russian orders,” Pukhov said.

Pukhov believes that many employees of the Ukrainian arms manufacturing industries, so far loyal to the authorities in Kiev, will soon change their mind. The industries that will go bankrupt will be demanding subsidies, but the government does not have the money.

“It was an utterly populist decision. It may work in the short term, but in the long term, Poroshenko and his team will have to pay dearly for it,” Pukhov said.

Ukraine bans export of miliatry and dual use products to Russia

Poroshenko earlier on Thursday enacted the National Security and Defense Council’s resolution of August 27 to terminate the export of military and dual purpose products to Russia.

As Russia’s Industry and Trade Minister Denis Manturov said last April, the overall portfolio of Russian civil and military contracts placed in Ukraine stood at about $15 billion, or 8.2% of Ukraine’s GDP, while experts at Ukraine’s Army, Disarmament and Conversion Studies Center claimed that Ukraine’s losses resulting from the termination of military cooperation with Russia would not exceed $300 million.

Ukraine’s design bureaus Yuzhnoye and Yuzhmash provide spare parts for the R-36M2 ballistic missiles (Satan), and Motor Sich makes helicopter, plane and rocket engines. Engines provided by Motor Sich and the MKB Progress, in Zaporozhye, are used in Russia’s planes Be-200, Yak-130 and An-124, and equipment from the Nikolayev-based plant Zorya-Mashproekt (such as reduction gear and gas turbine plants), in Russia’s naval ships.

The vice-president of the Union of Machine-Builders of Russia, Vladimir Gutenyov, said “the disruption of integration and cooperation ties with Russian defense industries will be tantamount to the clinical death of Ukraine’s military-industrial complex.”

He explained that "transition to EU standards will make Russia’s high technology market inaccessible to Ukraine".

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