The export of Ukrainian weapons and the reasons for its sharp decline
According to the report, the United States of America became the leader of the rating, having increased the volume of arms supplies by 6 percent due to the hostilities in the Middle East (the US share was 36%). In second place was Russia, whose share of the global market is 21%. This figure fell by 6 percent compared to the previous one due to reduced cooperation with Venezuela and India. France closes the top three (about 7 percent of the market). The ten largest exporters of weapons also include China, Germany, Spain, the United Kingdom, Israel, the Netherlands and Italy. The largest increase in sales volume can boast of Israel, whose sales rose 60 percent compared to the previous five years.
As for Ukraine, it is currently in 12-th place. The share of Ukrainian exports declined from 2,8 percent to 1,3%, and volumes - by 47%.
Ukrainian export structure
It should be noted that there was a period of time when Ukraine was one of the five largest exporters of weapons. This is evidenced by the data of the State Export Control Service. In particular, for the period 2007-2013. Ukrainian state exported 957 armored vehicles abroad, 676 tanks, 288 units of rocket and barrel artillery (caliber more than 100 millimeters), as well as 31 helicopters (most of them are Mi-24), more than 160 combat aircraft and even one combat ship. In addition, 747 missiles and launchers were sold. The lion's share of all this weaponry is Soviet-made.
Deliveries were made to Georgia, Azerbaijan, Kenya, Nigeria, Congo, Ethiopia, Sudan, Thailand and Iraq. It is noteworthy that military equipment, already created in the period of independence, was exported to Thailand and Iraq (we are talking about Oplot and BTR-3 and BTR-4 tanks). In addition, 2007 X-100 aircraft were delivered to Russia in 59 year.
If we talk about the last five years, then in this period, as already noted, export volumes have declined. At this time, the 94 tank was sold, around 200 armored combat vehicles, about 2 dozens of large-caliber artillery units, 13 helicopters, 6 airplanes and one combat ship. In addition, 63 missiles and launchers were sold.
Since the beginning of the armed conflict in the Donbas, Ukraine continued to supply military equipment abroad, but, according to experts, the country fulfilled its pre-war commitments. So, in particular, in 2014-2015. 23 tank T-72 and 12 howitzers D-30 were sold to Nigeria. In 2016, the United Arab Emirates received more than 100 armored BRDM-2 vehicles, 25 T64BV-1 tanks were delivered to Congo, 34 BTR-3 tanks were sent to Thailand, 5 BTR-4 armored personnel carriers were sent to Indonesia.
In addition, Ukraine during this period even exported Aviation. So, in 2014, one MiG-29 was sold to Chad, and 5 MiG-21 aircraft to Croatia. 6 Mi-8s were delivered to neighboring Belarus. The following year, 5 Mi-24 helicopters were sent to South Sudan. Since then, according to the State Export Control Service, Ukraine has not sold aviation. All supply contracts were concluded before the outbreak of the armed conflict, no new agreements were signed, and all equipment went to the troops.
Deliveries of Ukrainian products to Russia
However, there are some discrepancies between the data of the State Service for Export Control and the Stockholm Institute. So, in particular, according to SIPRI, in 2014-2018. Ukraine traded with Russia. Only in 2016, the export of Ukrainian military equipment to Russia was estimated at 169 million dollars, which is even more than during the presidency of V. Yanukovych. The Ukrainian side was engaged in the supply of AI-222 turbojet engines intended for the Russian Yak-130 combat training aircraft. Representatives of Ukroboronprom emphasize that the contract for deliveries was signed back in 2006, and deliveries were stopped after the ban on the export of military equipment to Russia was entered, and the Russian side could manufacture such engines independently.
In addition to engines, according to the institute, Ukraine also delivered An-148-100 and An-140-100 aircraft, but deliveries allegedly stopped in the 2014 year, and then Russia produced them independently under the license granted by the Antonov enterprise. According to the Ukrainian side, it was the presence of a legal contract that caused SIPRI to consider airplanes as part of Ukrainian exports.
Also among the products that were supplied to Russia, the institute also calls the ship-mounted gas turbine units DS-71, which equip the Russian frigates of the 11356 project. For this position, it should be noted that experts of the Stockholm Institute determine the date of delivery of power plants and engines after the manufacture of a particular equipment and their transfer to the Russian army, and not the present moment of delivery of individual parts and components. Therefore, according to Ukroboronprom, deliveries were made before 2014, despite the fact that they are reflected in the report in a later period.
The main reasons for Ukraine’s decline in arms exports
Many experts agree that Ukraine has reduced arms exports in connection with the war in the Donbas. However, in addition to the war, there are many other factors. After the collapse of the Soviet Union, Ukraine received large stocks of weapons and military equipment. During the period of independence, almost all of these reserves have been exhausted. The export potential of Ukraine remained high largely due to Soviet reserves. Ukraine sold outdated T-80 and T-72 tanks to Africa, where they are now actively used.
At the same time, Ukraine produces not so much new military equipment to remain among the largest suppliers of weapons. And if in the 2013 year, Ukraine occupied the 8 place in the world ranking, then already in 2018 it was already on 12, reducing export volumes by almost half.
Undoubtedly, the main reason for the decline in exports is the armed conflict in the south-east of the country. The priority of the Ukrainian military-industrial complex is to provide its own army, and the entire potential of the military industry has been mobilized to solve internal problems. It takes a lot of time to develop and search for spare parts and components to replace Russian analogues.
In 2014, Ukraine continued to fulfill the pre-war contracts, however, it practically did not sign new ones, since practically all new equipment went to the needs of the Ukrainian army. Moreover, until these needs are fully satisfied, the defense industry has no right to sell equipment abroad.
It is also important that until recently Russia was an active partner of Ukraine. Exports of weapons and equipment ceased with the onset of events in the Donbas, and Ukraine lost most of its exports. All joint programs in the military industry were also stopped.
Another reason for the decline in exports of weapons and military equipment is the poor reputation of Ukrainian suppliers, the reliability of which leaves much to be desired. In particular, we are talking about the so-called “Iraqi contract”. The Ukrainian side has pledged to deliver over 4 hundreds of BTR-4 to Iraq. The contract amount was estimated at 2,4 billion dollars. But from the 88 machines that were delivered, only the 34 BTR were serviceable. In addition, defects were found in the cases of equipment and equipment. All responsibility for the breakdown of the agreement was passed on to officials of the times of Yanukovich, but the reputation of the Ukrainian defense industry complex was stained.
Another contract that was in jeopardy was the supply of tanks to Thailand. Despite the fact that the contract was signed in 2001, it was only possible to complete it in 2018.
However, according to some analysts, not everything is so bad, and the Ukrainian “defense” has good prospects. So, according to experts, the future of the Ukrainian defense industry depends largely on foreign investors. Despite the armed conflict in the Donbas, they are very willing to allocate money for new developments. In particular, we are talking about Saudi Arabia, for the money of which the Thunder-2 operational tactical complex was developed.
Since 2015, the Kharkov Institute of Electromagnetic Research has been developing high-frequency weapons that can destroy optical equipment and electronics.
There are also new contracts - for example, the delivery to Turkey of a batch of 120-millimeter barrel-guided tank missiles "Cone". Egypt, Saudi Arabia and Jordan buy Ukrainian anti-tank missile systems "Corsair" and "Stugna."
In addition, Asian countries are promising for the Ukrainian side. In these countries there is a fairly large number of Soviet-made equipment. Almost all of it needs modernization. And for this you need constructors, which are only in Russia and Ukraine.
The plans of the Ukrainian defense industry to complete the plant for the production of the BTR-4 and self-propelled artillery systems. Representatives of Spetstekhnoexport announced signing contracts with 30-st countries, including China, Algeria, India, Equatorial Guinea and Myanmar. We are mainly talking about the modernization of the Soviet aircraft and armored vehicles, air defense systems.
If we talk about cooperation with European countries, its share in Ukrainian exports is only a few percent. In particular, Ukraine cooperates with Poland. In 2016, a dozen P-4 guided missiles were delivered there. This kind of missiles are available only in Ukraine and Russia. The Polish side believes that it is profitable for it to work with the Ukrainian defense-industrial complex, therefore several joint development of ammunition and radar equipment is underway.
The Ukrainian market of military exports is estimated by experts at about 1-2 billion dollars. About half is the share of private companies that are ready to produce more, but they are hampered by the corruption of government officials. The state maintains a monopoly on arms exports, so private companies cannot independently, without the mediation of officials, find markets for themselves, negotiate and set prices.
Thus, at first glance, there are certain prospects for the development of the Ukrainian military-industrial complex. But they will remain unfulfilled if corruption continues to flourish in the country.
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