Military Review

Silent fading of the defense industry of Ukraine

Silent fading of the defense industry of Ukraine
If Kiev does not take urgent measures, the "defense" of the country may disappear

Six months in office of President Viktor Yanukovych and the government of Mykola Azarov did not lead to any changes in the sphere of military-technical cooperation of the country. The actions of the new Ukrainian leadership have so far only manifested themselves in the change of the top of the state-owned company Ukrspetsexport, and the last few months have been reduced to personnel purges and organizational changes within its walls.


One of the components of the success of sales of weapons and military equipment (IWT) abroad is the demand for specific samples in the domestic market of the country. Simply put, hardly anyone will buy weaponif it is not adopted by the army of the supplier’s country. Alas, the realities of the domestic market of Ukraine contribute little to its success in the international arms market, since new samples by Ukrainian security forces are practically not bought.

None other than the Minister of Defense of Ukraine in 2009, honestly described the situation. According to him, the pace of implementation of the State program for the development of weapons and military equipment has decreased, since it was provided with money only by 73%.

In addition, the financial and economic crisis has extremely negatively affected the defense budget of Ukraine for 2009 of the year. Its guaranteed component is only about 0,87% of GDP, which is actually in 1,3 times less than in 2008. Ukraine has not had such depressive indicators of the defense budget since the beginning of its independent existence. A similar level of budget financing at the present stage can be observed only in Moldova and Luxembourg. This year the situation has changed a little for the better, but still a ridiculous amount is provided for updating the army’s arsenals - 13 billion hryvnia (1,5 billion dollars). Is it possible in such conditions to hope for the renewal of the arsenals of the Ukrainian army and to promote the advancement of new types of weapons and military equipment on the external market? The question is rather rhetorical ...


Despite external and internal problems, Ukraine continues to be a notable player in matters of military-technical cooperation. And although this area is traditionally considered to be closed from prying eyes, quantitative estimates of the effectiveness of the work of Ukrainian special exporters still exist. For example, Sergey Bondarchuk, the former head of the state-owned Ukrspetsexport company, said: “Weapons export in 2007 amounted to 700 million dollars, in 2008-m - about 800 million, and in 2004-m - total 400. Ukraine has recently made a breakthrough in terms of expanding the geography of supplies. A very important contract was signed with India on the repair and modernization of the An-32 aircraft worth 400 million dollars. The Vietnamese direction is developing positively. This country has contracts for the supply of passive (about 54 million) and active (approximately 50 million) radar facilities. We are working with China with an emphasis on new scientific and technical developments and the creation of repair facilities. ”

At the end of 2009, information appeared that Ukraine had signed a number of arms contracts. As you know, the United States, providing financial assistance to Iraq for the development of law enforcement agencies, controls spending, trying to choose, for example, more profitable suppliers. In this context, it is a matter of the fact that the American side, having allocated $ 2,4 billion to Iraq for the purchase of new military equipment and weapons, selected Ukrainian special exporters from potential exporting countries - Poland, the Czech Republic, Bulgaria, Slovenia, and Ukraine. This is one of the largest projects, including a number of separate contracts for the supply of new armored personnel carriers and tanks, aircraft, precision weapons, as well as services for the repair and modernization of military equipment.

The implementation of these projects for Ukraine means a breakthrough in the international arms market and a guaranteed presence in the top ten world leaders for about three years. According to experts, this will load orders for more than 80 defense enterprises, which will expand the current so-called sustainable core of the country's defense industry. Although, as is often the case, Ukrainian realities can disrupt this profitable project - it is difficult to ensure the fulfillment of obligations in terms of time, quality and price, having so many problems in the industry.

So, over the past few years, Ukraine has exported weapons worth billions of dollars. But for some reason, at the recent military parade, there was nothing special to show — almost all the equipment that passed along Khreshchatyk was of the Soviet type. Looking at it, naturally, there were questions: what kind of weapon does the country trade in and is there demand for it in the world? The situation is seen in the assessments of experts and politicians.

Nikolai Sungurovsky, director of military programs of the Alexander Razumkov Center: “The fact is that Ukraine sells mainly spare parts in most cases to Soviet-style weapons. In addition, we sell and old equipment. As for the new weapons, we had agreements on the supply of both tanks and the famous Kolchug, and even KrAZ vehicles (which are used as carriers of rocket launchers), but they are not that big in the total export. ”

From an interview with the people's deputy of Ukraine, Valery Konovalyuk (Party of Regions faction): “Without any exaggeration, it can be argued that the level of material support and equipment of our army with new equipment is below any criticism. The total volume of armaments requiring urgent replacement has reached 50 percent. At the same time, 95 percent of all products of the Ukrainian defense industry is exported. Over the past four years, our weapons have been sold for 2,5 billion dollars, of which only 200 millions were transferred to the budget. In fact, the illegal arms business in Ukraine has flourished for a long time. But there was no such unbridled state of his. ”


Products of the Ukrainian aerospace industry are traditionally successful in the international market. Now most enterprises are engaged in the implementation of certain foreign orders. For example, the Kiev Aviant plant will take part in the construction of 30 regional An-148 passenger airplanes for the Russian Atlant-Soyuz airline, which was agreed upon last year aviation exhibitions in Le Bourget. The main executor of the order is the Russian United Aircraft Corporation, and most of the contract will be carried out by the Voronezh Joint-Stock Aircraft Building Company. The approximate cost of the Ukrainian part of the project is 2 billion hryvnias. Aircraft must be built within three years and leased to Atlant-Soyuz for 10 years. Already in 2010, the airline expects to receive the first five aircraft. The Kharkiv State Aviation Production Enterprise (KHAPP) will also take part in the project.

State Enterprise "Aviation Scientific-Technical Complex. Oleg Antonov ”(Kiev) estimates the total global market demand for An-148 aircraft in 600 units, including approximately 200 machines - up to 2015 year. In total, as of the end of last year, there was an 52 contract for the supply of the An-148 and about 80 options for this aircraft. During the MAKS-2009 air show, carriers placed orders for almost a hundred An-148. For example, the leasing company Ilyushin Finance Co. received during the air show 30 “hard” contracts for it. Documents about the intention to buy a plane besides Atlant-Soyuz were signed by Saratov Airlines (5 units), Vladivostok Avia (4), an airline from Ecuador Icaro (2).

As for real deliveries, the first An-148 of the Ukrainian assembly is already flying in the airline "Aerosvit", and the first car of the Russian assembly on the eve of the air show was transferred to the airline "Russia". At the same time, the Russian side plans to bring the production to 2012 machines per year by 36.

Ukraine recently received an order to upgrade the X-NUMX of the An-120 aircraft of the Indian Air Force. The amount of this contract is estimated at 32 million dollars (in some media - 600 million dollars). The Antonov concern (including Kharkov State Aviation Production Enterprise, Aviant Kiev State Aviation Plant, and Civil Aviation 400 Plant of Civil Aviation) and Motor-Sich Company will deal with the Indian order.

In addition to replacing engines, Ukrainian aircraft manufacturers intend to modernize the Indian An-32. For this contract, in the next two years, Motor Sich should release from 250 to 300 engines. Modernization at the enterprises of the concern provides for the improvement of on-board radio-electronic equipment and improvement of flight range and payload characteristics, extension of the An-32 flight resource from 25 to 40 years. Engines that still decide not to change will also be upgraded.

Ukraine and Russia plan to resume budget funding for joint development work on the creation of the An-70 aircraft and its modifications. The basis for industrial cooperation will be the cooperation that has developed between JSC United Aircraft Building Corporation (UAC) and SJSC Antonov, as well as development companies and manufacturers of components, materials and semi-finished products. It is about how to provide financing for the completion and testing of the aircraft, and about the organization of mass production of these machines. And although there is not yet a serious state order for An-70, work on the production of its components is now carried out by separate Russian factories. In particular, according to Vyacheslav Boguslayev, general director of Motor-Sich OJSC, the Russian plant Salyut makes its part of the D-27 engine - they are installed on the An-70. In general, the share of Russian enterprises in the creation of An-70 is estimated by experts at the level of 25-30%.


But for the Ukrainian defense-industrial complex, the development of military-technical cooperation with western partners remains the most desirable. Formally, experts note the tendency of growth in the interest of NATO countries to study and discuss the possibilities of military-technical cooperation with Ukraine. Although in fact it is only about collecting intelligence information under the guise of cooperation. And after talking about the intentions of both parties, it is logical to ask a question about specific mechanisms of interaction.

The fact remains that the previous experience of the MTC of Ukraine and Western countries is very controversial. While the list is dominated by examples of unrealized projects - a military transport aircraft based on the An-70 for the western market, a Ukrainian-French-Czech project for the modernization of the T-72 tank for third countries. But at the same time, there were also direct deliveries of military equipment from Ukraine to Greece, Macedonia, Poland, the Czech Republic, Belgium, etc.

Against this background, the trend has been the emergence of new-format projects - joint development. The reasons for this are quite obvious: insufficient capacity of the Ukrainian defense industry to re-equip the army at the present level and in full, as well as the West's desire to save on what Ukraine has already created on the most critical defense topics at a decent level (for example, on protecting aircraft against MANPADS) .

Do not forget about the largely political decision - to diversify the sources of supplies of foreign weapons and military equipment. This gave a definite start to a number of joint projects: on the creation of armored vehicles protection systems with Poland, the development of a Ukrainian corvette with the participation of Western companies, as well as experimental design work on the modernization of helicopters together with the French Sagem. The mentioned projects and a number of other factors allowed the experts to predict the availability of up to 30-35% of weapons and military equipment of the Ukrainian army of foreign origin, including those of European production.

There are chances for potentially long-running projects. For example, European countries have voiced interest in using Ukrainian helicopters as part of the so-called Multinational helicopter initiative, including their modernization. Chairman of the Board of the Center for Military Policy and Security Policy Yevgeny Shelest said: “The reason for the emergence of this project was, in particular, the analysis of the situation during the NATO operation in Afghanistan. Despite the fact that in the countries - members of NATO there are more than five thousand helicopters, in Afghanistan there is an insufficient number of them. Most of them are unsuitable for participation in complex operations that are carried out in conditions of high mountains, high temperatures and dusty air. Speaking of the Ukrainian helicopter industry, it can be argued that it is very high quality at the technical level. This applies to the helicopters themselves, and the modernization system, and their service system. In particular, France and Germany are interested in the modernization of our helicopters. "

Obviously, the majority of rotary-winged machines can be upgraded specifically for work in Afghanistan, and the crews are prepared to participate in operations in difficult conditions. For Ukraine, this project is positive for both its own defense enterprises and in the context of attracting the country to the development of European defense capabilities and further integration into the European Union.

But to idealize Ukrainian projects is premature. After all, there are less popular trends in the global aviation market, which the country does not like to talk about. For example, the Ukrainian side widely advertised the fact of attracting heavy transport planes of the Antonov family to transportation in the interests of NATO countries and not only. Indeed, the alliance extended the contract with Ukraine and the Russian Federation to lease Ruslan aircraft to December 31 2010. An-124-100 "Ruslan" is used in the framework of the NATO SALIS (Strategic Airlift Interim Solution) program, carrying out air transportation of goods on the orders of 18 countries. But at the same time, both in NATO and in individual countries, there are actively developing projects to build our own transport aircraft, including the A-400M, which is far from the only example. Therefore, the mentioned contracts can be considered a temporary success, which can be extended only by firm fixing in Western markets, a victory over competitors and the promotion of new projects.

Experts note that implementing projects of military-technical cooperation with Western countries, Ukraine is exposed to various threats and risks in this area. Despite their complex nature, it is possible to carry out a certain structuring.

In particular, in the first place it is necessary to put a group of threats of a political nature. The constantly changing geopolitical situation around Ukraine and the country's limited resources make priority in re-equipment projects with the maximum possible component of its own military-industrial complex (projects of the Sapsan missile system, medium-range air defense systems based on deep modernization of the Buk air defense system, extension of the life of most air defense and aviation assets ). This directly affects projects with Western defense companies, which can be frozen or targeted at third-country markets.

No less tangible are the threats to the economic plan, above all the low level of the state defense order. In this case, projects targeted at cooperation with foreign countries that require significant expenditures will suffer. Moreover, Ukraine declares plans for the simultaneous development of a number of expensive projects (the Sapsan rocket complex mentioned above, the creation and production of a corvette, the modernization of the MiG-29, Su-27 and Mi-24 helicopters, the purchase of UAVs, the repair and extension of existing types of weapons and military equipment). Experts felt that in this case it was necessary to allocate at least 700 million dollars a year for rearmament. In reality, the Ukrainian army can count on resources within 100-120 million dollars. This ridiculous amount can become the main threat of military-technical cooperation with Western defense companies.

The next group of threats relates to technology. It is already realistic to talk about the loss of a number of technologies, as well as scientific directions and scientific schools. This explains the desire of Ukraine to make up for losses due to military-technical cooperation with Western defense companies.

It is also necessary to mention the inconsistency of the regulatory framework of Ukraine in the field of defense and military-technical cooperation with modern realities, which does not allow creating joint ventures, implementing offset programs, crediting, etc.


Speaking of Ukraine’s military-technical cooperation with other countries, it should be mentioned that supplies of weapons and military equipment from abroad to Ukrainian security forces are already a reality. And as noted above, there are prerequisites for their increase, and not only from Russia, but also from other countries.

For example, the air force of the Ukrainian armed forces voiced the topic of adopting and purchasing new Chinese-made L-15 training aircraft. This was stated by the commander of the air force Ivan Rusnak following the visit of the Ukrainian military delegation to China in November 2009: “In particular, we discussed the possibility of acquiring and adopting the Chinese L-15 training aircraft. But it all depends on how quickly the final decision will be made on its adoption by the Chinese Air Force itself. ”

Similar plans are nurtured by Ukrainian sailors. As the ex-commander of the naval forces of the Ukrainian Armed Forces, Admiral Igor Tenyukh, announced plans for the construction of the Ukrainian corvette, other states will participate in the construction of the ship except Ukraine: 60 percent of the ship is the participation of Ukrainian enterprises, 40 - enterprises of the leading powers of the world. He noted that in accordance with the assignments the fleet It is planned to have more than 10 ships of this class in service.

The head of the special operations department of the General Staff of the Armed Forces of Ukraine, Yuriy Servetnik, said: “In terms of technical support, we also face serious problems. Ukraine can not manufacture the entire "line" of special equipment, weapons, equipment, which are necessary for the armed forces, including special operations forces. It is better to buy already tested samples abroad. But the existing regulatory framework does not allow us to do this now. ”


So, in matters of assessing the level of military-technical cooperation with other states, the opinions of experts are contradictory: from pessimistic forecasts of ousting Ukraine from the world arms trade market to optimistic estimates of the prospects for expanding sales.

Both extremes have arguments. For example, Valentin Zubov, deputy chairman of the Verkhovna Rada Committee on National Security and Defense, explains the downgrade of Ukraine’s military-technical cooperation with the collapse of the military-industrial complex and the design bureaus involved in the development of modern military equipment: “We sold not what we did on our own, but that we inherited from the USSR and the material base of the Warsaw Pact troops. Therefore, the result is quite natural. Soon we will buy Kalashnikov assault rifles in Poland or China. ”

Back in 2008, the general director of Ukrspetsexport, Sergey Bondarchuk, stated bluntly: the Ukrainian government should be held responsible for the fact that the military-industrial complex of Ukraine "will soon disappear as such." According to Bondarchuk, the cabinet-adopted program for reforming the military-industrial complex before 2013 is a mockery of arms manufacturers: MIC, is enough only to change the light bulbs in all enterprises of the industry. We are already working on gasps, since the military-industrial complex of Ukraine exists only thanks to the enthusiasm of people working in this field. If the situation does not change, Ukraine will be able to hold out for the next two or three years in the top ten leading arms manufacturers. If we do not start real and permanent funding instead of what we have now, when the allocation of funds fits into the budget on a residual basis, Ukraine will lose its military-industrial complex. ”

Difficulties in the external military-technical cooperation market are aggravated by the internal problems of the defense-industrial complex of Ukraine. The state is trying to reform the industries, which is quite rational, but at the same time options are chosen that do little to move forward. For example, the clash of interests around the ASTC. O. Antonova. At first glance, they seem strange: after all, it is a question of uniting the enterprises of the industry into a single large structure, only it can objectively be competitive in the world market. In fact, all powerful Western aviation corporations are built according to this principle: each of them includes production plants, engine manufacturing plants and a think tank - a design bureau that develops new aircraft.

But the Ukrainian government, having artificially decided a few years ago to unite the enterprises of the industry into a state corporation, did not provide it with billions in investments. The merger was supposed to occur around the most successful structure - the ASTC. O. Antonova. The corporation was nevertheless created, but it existed for a little over a year, since its complete meaninglessness became apparent to all. The mechanical unification of factories mired in debt and unable to produce quality products could not lead to a different result, and the industry never received public investment in any significant volumes. And it is not surprising: the enterprises that joined the corporation did not succeed in achieving the main goal of this whole campaign - unification of financial flows. Therefore, the semi-bankrupt batch production plants did not gain access to the money of the successful ASTC, which was able to overcome the economic upheavals of the 90 of the last century on its own.

At the end of August of this year, a meeting of the Council on National Security and Defense of Ukraine is scheduled, on the agenda of which is the question of the state and prospects of development of the defense-industrial complex of Ukraine. What changes are coming and what they will lead to - time will tell ...
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