The FINANCIAL — Viktor But, Famous Arm Dealer who spent 14 years in U.S. Jail, appointed as head of Rosoboronexport, the only state organization in Russia for exporting the entire range of military, dual-use products and services and technologies. Reportedly But already announced reforms at the organization. “We need to improve export to Columbia, China, Afghanistan”, he said.
Russia is losing the arms market, but not for long The Russian Federation currently has $ 57 billion in contracts to develop armaments. It is too early to speculate on the long-term repercussions Russia’s invasion of Ukraine will have on its military-industrial complex. Western experts anticipate adverse effects, their Russian counterparts are less certain about the outcome.
Vladimir Putin, president of Russia, revealed on November 26 that the volume of Russian weaponry exports in the challenging conditions of 2022 has already reached $8 billion, ccording to Frontier India.
In August, Alexander Mikheyev, the director general of Rosoboronexport, forecasted a total of about $10.8 billion, roughly 26% lower than reported for 2021. According to the Stockholm International Peace Research Institute, Russia is the second-biggest exporter of weaponry behind the United States. Russia is losing its grip on arms exports, as even South Korea managed to export about $17 billion worth of weapons in 2022.
According to the SIPRI 2021 report, between 2012 and 2016 and 2017 and 2021, Russia’s share in global arms exports decreased from 24 per cent to 19 per cent. The overall decline in Russian arms shipments from 2012 to 2016 to 2017 to 2021 was almost entirely attributable to losses in exports to India (-47 per cent) and Vietnam (-36 per cent) (-71 per cent).
The world share in the export of major arms of the ten largest exporters in 2016-20 is as follows: USA – 37%, Russia – 20%, France – 8.2%, Germany – 5.5%, China – 5.2%, UK – 3.3%, Spain – 3.2%, Israel – 3.0%, South Korea – 2.7%, Italy – 2.2%, other countries – 9.6%.
The Arms sales race between Russia and the United States
After the Second World War, it is commonly acknowledged that the world split into two blocs: East and West. Such a division is arbitrary, and one of the key indicators of membership in a particular bloc was an attitude toward the military-industrial complex of the United States or the Soviet Union. The United States claimed Latin America, Japan, and Australia. It also controlled Western Europe, South Africa, and the entire Middle East. This is how the North Atlantic Treaty Organization (NATO) evolved, as relations were established from overlord to vassal through a chain of rights and obligations. As a result, all of the bloc’s members were compelled to purchase weapons from the United States, even if they did not need them, because the Pentagon had established explicit rules governing the matter.
As for the USSR, Moscow frequently utilised the carrot strategy to acquire allies by sending weaponry for a nominal fee. This strategy made it feasible to balance the forces. However, it was difficult because it put a strain on the economy of the nation. Cuba, Africa, Eastern Europe, and South and Southeast Asia comprised the Eastern Bloc.
Numerous nations continue to purchase weapons under contracts inked decades ago, which, according to experts, demonstrates that modern Russia is actively utilising the Soviet legacy. Agreements are extended, or new ones are made, and as a result, Russia now has a market share of approximately 20% of the global armaments market. After the fall of the Soviet Union, the United States strengthened its position by eliminating the domestic military-industrial complex from Eastern Europe and several other regions. For instance, Vietnam actively purchases from the United States, whereas India engages in a complicated game of lowering prices through massive contracts or occasional supply interruptions. Therefore, the United States accounts for exactly twice as many weapons shipments as Russia, and although the situation is not dire, there is little reason for hope for Russia.
Russia’s secretive arms deals
Recent reports of signing contracts for 1 trillion rubles (about $16.5 billion) indicate that the downward trend will soon be reversed. Since the United States has already vowed to penalise anyone who purchases weapons from Russia, Rostec representatives do not identify their clients. Typically, the Russian military-industrial complex exports products worth 15 billion dollars each year. However, these amounts are subject to change. According to official statements, the Russian Federation currently has $ 57 billion in contracts to develop armaments. It is quite difficult to quantify all of this because it needs to be clarified how many years the agreements are structured.
Viktor Bout, one of the world’s most infamous arms dealers, has been released from US custody as part of a prisoner exchange with US basketball star Brittney Griner. Griner had been in custody since February after Moscow airport officials found cannabis oil in her luggage while she was returning to the US after playing in Russia. Rumours had circulated in US media for months that senior state department officials had sought to secure Griner’s release in exchange for the arms dealer’s freedom.
Bout was extradited from Thailand to the US in 2010, after a sting operation by the US Drug Enforcement Agency (DEA) two years earlier.
Agents from the DEA posed as potential buyers from the Revolutionary Armed Forces of Colombia, known as Farc. That group – which has since disbanded – was classified as a terrorist organisation by the United States.
Bout claimed he was simply an entrepreneur with a legitimate international transport business, wrongly accused of trying to arm South American rebels – the victims of US political machinations.
But a jury in New York didn’t believe his story.
He was sentenced to 25 years in prison in April 2012 after being found guilty of conspiracy to kill Americans and US officials, delivering anti-aircraft missiles and aiding a terrorist organisation.
His three-week trial heard that Bout had been told the weapons would be used to kill US pilots working with Colombian officials. Prosecutors said he replied: “We have the same enemy.”
Bout – a Russian national born in Soviet-ruled Tajikistan – began his career in air transport in the early 1990s, after the fall of the USSR.
According to a 2007 book – Merchant of Death, by security experts Douglas Farah and Stephen Braun – Bout built up his business using military planes left on the airfields of the collapsing Soviet empire in the early 1990s.
The US made moves against Bout throughout the 2000s, freezing his assets in 2006, but there was no law he could be prosecuted under in the US.
Instead, US agents bided their time until 2008 when they posed as buyers for Colombia’s Farc rebels and gained an introduction to Bout through one of his former associates.
Shortly after the undercover officers discussed arms shipments to Farc with Bout, Thai authorities arrested him and lengthy legal proceedings began to bring him to the US.
Bout said the US case against him was politically motivated; his wife has been quoted as saying his only connection with Colombia was “tango lessons”.
The Russian authorities supported him throughout his legal proceedings, with Foreign Minister Sergei Lavrov vowing to fight to secure his return to Russia and labelling the Thai court’s decision “unjust and political”.
The 2005 film Lord of War, loosely based on the arms dealer’s life, has the anti-hero escaping justice at the end.
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