Russian arms industries vanished in the Ukraine war, corruption, tanking ruble and no export orders

Russian propaganda tool, multiple S-400 missiles have been destroyed in Crimea.

As Russian President Vladimir Putin put it, Russia’s arms industry and its export capabilities have long been a point of national pride. Even after launching its full-scale invasion of Ukraine in February 2022, Russia claims to be able to meet growing domestic demand and continue arms exports.

Russian weapons exports have dropped dramatically under the shadow of Moscow’s full-scale invasion of Ukraine and the global sanctions that followed, according to the Stockholm International Peace Research Institute.

The sale of Russian weapons to other countries fell by 53% between the five-year periods of 2014-18 and 2019-23, according to the latest report by the think tank, dated March 11.

While Moscow exported major arms to 31 countries in 2019, this number plummeted to only 12 last year, with Western sanctions against the Kremlin representing one of the key reasons some governments are interested to buy elsewhere.

The report noted that the three largest receivers of Russian-made weapons between 2019-23 were India, China, and Egypt. However, the amount of equipment that those governments acquired underwent a steep decrease.

“Between the two periods, Russian arms exports to India decreased by 34%, while exports to China decreased by 39% and to Egypt by 54%. Algeria and Vietnam, which were Russia’s third- and fourth-largest recipients in 2014-18, saw their exports drop by 83% and 91%,” respectively, SIPRI analysts wrote.

The newest figure, combined with the overall low number of pending Russian arms deliveries, suggest that the country’s exports in the defense sector are likely to remain low, as the draw of made-in-Russia military equipment is waning, according to the analysts.

One trend relates to the continents of Asia and Oceania. The regions, which accounted for 68% of overall Russian weapons exports in 2018-2023, are now seeing the rise or the United States as their largest arms supplier.

State-sponsored propaganda promotes the prowess of Russia’s military-industrial complex to reassure both domestic and international audiences of Russia’s ability to not only sustain its war effort in Ukraine but also further leverage its arms sales for geopolitical influence.

These statements are seemingly designed to project confidence that Russia can outlast the West. At the same time, though, these messages starkly contrast with more pessimistic assessments appearing in both international and Russian media.

A destroyed Su-35 in Ukraine war.

Russian political and military leadership consistently reports on the “successes” in the import substitution programs and new developments that improve the existing military systems based on real-life combat experience. Throughout 2023 and into early 2024, the Russian state-run arms exporter Rosoboronexport reported signing new contracts, noting stable international interest in Russian weaponry and government approvals of new systems for export. Reports of declining arms sales, such as the Stockholm International Peace Research Institute 2023 estimates, are dismissed as faulty, with officials claiming that not all sales are disclosed due to sanctions. Even acknowledged declines are portrayed as temporary setbacks, which, it is implied, will be followed by another boost in exports after the war.

A recent shake-up of Russian military leadership might signal dissatisfaction with the current state of affairs at the highest level.

A recent shake-up of Russian military leadership, including the dismissal of Defense Minister Sergei Shoigu and his deputies and subsequent arrests of Russian military leaders on corruption charges, might signal dissatisfaction with the current state of affairs at the highest level. For the second year, Russia’s traditional Victory Day parade featured only a limited display of military might.

Deepening ties with North Korea, highlighted by Putin’s unusual visit to Pyongyang, is believed to be an effort to replenish Russia’s depleted arsenal. Reports on Russia’s increasing reliance on outdated weaponry pinpoint its struggles with meeting even domestic demand. Some military systems Russia uses in Ukraine have been criticized for their poor performance. Russia’s credibility has been questioned as it failed to live up to the promise of producing advanced military systems, such as the Su-75 “Checkmate” or MiG-35. The nation, once a major arms exporter, is now reportedly seeking to secretly buy back weapons from former customers as well as purchase second-hand Western machinery from China. Claims of successful import substitution are harder to maintain, given the evident struggles to implement it in sectors such as civilian aviation, where the delivery schedules are repeatedly shifted.

Pessimistic assessments of Russia’s arms industry have started to surface even within tightly controlled Russian media. Experts in Russia acknowledge difficulties with maintaining relationships with historical recipients of Russian weapons. Prioritizing domestic needs, Russia reportedly failed to deliver arms to longstanding customers such as India and Armenia.

Some countries are weighing the benefits of maintaining their ties with Russia against the financial and reputational costs of continuing to do business there. China and India are diversifying their arms purchases away from Russia. Moreover, China is perceived as seeking to improve its relations with the United States, which is seen as a major blow to Russia-China cooperation.

Despite a history of cooperation and presumed continued interest and loyalty, countries like Vietnam and Algeria are diversifying their suppliers and negotiating arms transfers with countries like Turkey. Russia is fighting to save these relationships, employing significant diplomatic efforts, including a notable visit by Putin to Vietnam. But it’s becoming a hard sell. Egypt is allegedly conceding to persuasion from the United States and considering other partnerships.

Similar trends are observed in even former Soviet republics. Kazakhstan, where Russian arms constituted over 90 percent of total imports from 2019 to 2023, has been looking for new arms suppliers to diversify its acquisitions. While some Russian commentators remain hopeful about continued military-technical cooperation, citing, in particular, Kazakhstan’s decision not to purchase Rafale fighter jets from France, Russian media repeatedly accuses Kazakh leaders of covertly supporting Ukraine and seeking international backing to distance itself from Russia.

Some countries are weighing the benefits of maintaining their ties with Russia against the financial and reputational costs of continuing to do business there.

Experts inside Russia recognize these worrying trends. They warn of long-term consequences, including challenges in seeking to win back lost customers. They’ve also criticized Russia’s attempts to keep India and China as customers by using technology transfers, such as licensing the production of Russian-designed fighters or tanks locally. Some Russian publications argue that India and China will use Russian developments to enhance their own military industries at Russia’s expense. As the Russian government admits the shortage of 160,000 workers in military factories, experts in Russia also predict a loss of up to 40 percent of Russia’s research and engineering capabilities due to reduced arms sales revenue.

Overall, Russia is still likely doing better than anticipated in some critical ways, such as in much-needed artillery shell production, and has found ways to close other production gaps. But with NATO intensifying support for Ukraine, Russia may not be able to indefinitely sustain material losses. In this war of attrition, one of these issues might ultimately become a straw that will break Russia’s back.

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