"Syndicate: Weapon business.ua"
Historically, the Soviet Union developed and produced some of the best weapons in the world, spending enormous financial and human resources on this. But the system of military-technical cooperation (MTC), more precisely - arms exports, in the USSR practically did not exist. Deliveries were carried out according to the ideological principle in the necessary countries to support the necessary regimes. Some studies indicate that although in peak years, supply reached $ 21-22 billion (it is worth considering that over the past decades, this currency has lost its real value and the dollar is difficult to compare with today’s during Soviet times), $ 1,8-2 billion. A number of countries in Africa, Asia, the Middle East, the Warsaw Pact states received weapon at no cost. The Soviet Union could afford it. Independent Ukraine - no.
And it's not just that with the collapse of the Union, the former republic has become not a subject, but rather an object of big world politics, being at the intersection of the interests of the main geopolitical players - the USA, Russia and even China, interested in our resources. After all, it is no secret that the state is the consumer of military products on almost 100%, and the production itself is extremely monopolized. As a result, military-technical cooperation is becoming a lever of influence for both producing and buying countries.
Today, most major transactions in the world market for weapons and military equipment (IWT) are at the highest government level, often with the direct and indirect support of the presidents of the countries. The same agreements between Russia and France on Mistral were supervised at the level of the administrations of Dmitry Medvedev and Nicolas Sarkozy. Multibillion-dollar defense contracts between Azerbaijan and Israel are at the level of the administrations of Ilham Aliyev and Shimon Peres. Strictly speaking, even now, at the end of the era of “ideological supplies of the USSR,” trade in weapons and military equipment is only half commerce, and the main global arms importers, along with the technical and economic side of the deal (price, quality, delivery terms), continue to pay increased attention political component of the contract. Including the provision by the exporting country of so-called security guarantees to its buyer.
The arms business has been and remains a matter of policy, and the choice of an IWT supplier is often determined by the choice of a political alliance. At the same time, Ukraine cannot independently claim the formation of a geopolitical axis. However, as Winston Churchill used to say: “The one who can maneuver wins the battle,” and independent Ukraine learned this only - economic maneuverability, domestic and foreign policy maneuverability, market maneuverability. True, this training was not always successful, and in most cases turned out to be quite painful.
Thus, having gained independence, Ukraine was faced with the need to resolve the issue of the remnants of the military-industrial complex inherited by it and build a new system of military-technical cooperation from scratch from scratch. And if the defense industry commanded by the Ministry of Mechanical Engineering, the military-industrial complex and the conversion of Ukraine, which was created in 1992 and existed before 1997, experienced a rapid "conversion", having lost almost half of its enterprises (including 184 from 356 plants was almost stopped) without learning to work effectively by the beginning of the third decade of independence, the formation of the PTS system is still ongoing.
Initially, the existing system had to be completely reformatted, replacing ideological shipments at the expense of the taxpayer with commercial trade, and transferring relations with yesterday's suppliers within one country to market between enterprises of independent states. The remnants of the Soviet defense industry, which survived after the 1990s, had to be taught to work in the new realities and under the new rules. And, of course, it was possible to create from scratch structures with the functions of export and import of arms and military equipment and dual-use goods, as well as the bodies called upon to control these supplies. But it turned out to be much more difficult to create the very structure of cooperation, to enter the market and conquer it.
And this problem is not only Ukrainian enterprises. Although the inability of many of them to work in the new conditions plays an important role. Just the defense market is one of the most expensive and closed. In particular, only for 2003-2010. The financial volume of world exports of conventional weapons is estimated at $ 300 billion. And this is in terms of actually transferred arms and military equipment, and not according to the concluded contracts.
The market closure is due to practical reasons - the supply of certain weapons directly affect the country's defense. For example, the presence of the Georgian side of the Bukov during the Five-Day War was an unpleasant surprise for the Russian command after the loss of a long-range bomber, which could have been avoided if the Russian side had reliable information about the status of these defensive systems.
An equally important factor in the closeness of the market is the variability of the terms of contracts and prices, depending on the characteristics of the equipment supplied and the country of purchase. It is natural that the higher the exclusivity and uniqueness of weapons and military equipment, the higher its value in the market. In this case, often the same equipment, depending on the proposed "filling" and the service package, can have a different price. And sometimes, the upgraded weapons are an order of magnitude larger than the new models of the previous generation. Therefore, they agree in each particular case individually.
The price of the offer also often depends on the characteristics of the region, activity on the market of competitors, requirements of legislation and personal motives of specific signatories of contracts. As a result, some deals are concluded on the basis of offsets, in most cases aimed at returning part of the money spent to the country's economy, some - subject to discounts and even bonus, donated units. For example, as Jane's Defense Weekly pointed out, when selling 96 to BTR-3E1 in Thailand, Ukraine donated six more BTRs for free. In conditions of limited markets, countries are ready to go and not to such concessions.
And despite the fact that the level of competition in the market of military equipment is high, and all available means are used, ranging from open lobbying and fine diplomacy to information wars.
True, if there are examples of lobbying, given that even presidential teams use direct and indirect methods of advertising their defense products (starting from the elementary inclusion in official programs of visits to certain facilities with a "posing" in the cabins of advanced weapons and military equipment), there are plenty fine diplomacy becomes known only after the conclusion of contracts or never become known. For example, the role of the diplomatic adviser to the presidents of France, Jacques Chirac and Nicolas Sarkozy Jean-David Levitte, in the conclusion of one of the largest history The contract for the supply of French fighters Rafale to India, which conducted the most difficult negotiations with Indian leaders, including resolving problems related to the "temperamental" statements of the French leaders, was mentioned in passing and only after the conclusion of the contract, estimated at approximately $ 20 billion. Although it is believed that it was Levitte who played the main role in supporting India on the world stage when he was President Jacques Chirac. And soon it was he who was appointed Permanent Representative of France to the UN, where he led, along with Russia, the struggle against sanctions against India and split the position of the member countries of the UN Security Council. So, it is quite possible to talk about the success of precisely the long-running French diplomacy.
Ukraine in such thin and long diplomatic games, possibly due to the lack of independent experience of diplomatic activity, comparable to that of France, is not so sophisticated. But we also have positive examples. For example, some analysts link the presence of Ukrainian peacekeepers and the equipment they left in Iraq with the signing of subsequent multi-million contracts for the supply of weapons and military equipment to this country. Although given that these agreements passed through the United States, perhaps they should be attributed to the merits of fine American diplomacy. But the success of Ukraine, albeit conditioned by monopoly, can be attributed to the signing of a contract for the repair of Indian An-32. Even in spite of the fact that they promised to sign the contract before the end of 2005, and it happened only in 2009.
A difficult situation has developed in the information sphere. So, in the media wars, Ukraine is just learning to get involved in a fight. In any case, after the “kolchuzhny scandal”, “to redeem” the consequences of which in the international arena had not only to enter Ukrainian peacekeepers in Iraq, Kiev at least learned if not to use similar information events, then with varying success to repel attacks. As, for example, in the case of the same “Faina”. Or with Georgia, when, after the Five-Day War, any references to the supply of arms to Tbilisi cause an almost immediate refutation from the Ukrainian side. At the same time in other areas, the reaction is not as rapid. For example, Kiev did not respond to the appearance in September of 2010 of information about the supply of large quantities of armored vehicles to Cambodia. While this country has a border conflict with another major buyer of Ukrainian armored vehicles - Thailand. Of course, we can assume that in this case everything went within the framework of Roosevelt’s tactics: nothing happens in politics by chance, and if something happened, it was conceived. Moreover, Ukraine, unlike many other players in the defense market, manages to simultaneously work with countries that, to put it mildly, do not get along with each other. For example, India and Pakistan or Armenia and Azerbaijan (with the latest 2011 as of September, there were almost $ 70 million contracts in force).
However, this does not change the fact that the opinion of Ukraine as an unfair supplier of weapons and military equipment is systematically formed in the consciousness of the world community. It is our country, which, by the way, has today one of the toughest restrictive export control systems, associated with almost all suspicions of arms smuggling. At the same time, even after clarifying the non-participation of Ukraine, the refutation of the expressed assumptions often becomes a matter for individual non-state experts. As in the case of the detention of a German company Atlantic Cruiser that was chartered by a Ukrainian company, which was not even arrested.
Not being fully engaged in fighting off information attacks, Ukraine also often does not use obvious information opportunities to promote its products on the market. And could learn from other players. For example, in the same Russia, which, by the way, also began reformatting its “defense business” after the collapse of the USSR, but learned to play by the new rules much faster. So, half a month before the start of the exhibition of military equipment Defexpo India 2012, Moscow not only announced what exhibits will be presented, but also fully advertised its tank T-90, including as a possible modernization of the Indian T-72. At the same time, during the exhibition itself, Russian information agencies, in the best traditions of PR technologies, produced in whole collections newsdedicated to the unique Russian developments demonstrated at the exhibition. At the same time, the Ukrainian proposals that were equally interesting for the Indian market remained almost unnoticed even by the Ukrainian mass media. And despite the fact that the same United States, which does not have such problems with loading its capacities with orders, risking transport routes for delivering cargo to troops in Afghanistan, is complicating relations with Pakistan in the hope of improving its position in India ...
... Against this background, the indicator achieved in recent years in stable export $ 1 billion and a place in the Top-10 of world exporters of weapons and military equipment, despite the fact that global think tanks underestimate deliveries and a place among leading exporters every year, can be considered an indisputable success . But success does not affect the defense of their own state ...
... To understand the situation, to follow the changes and events that occurred in the industry over the past 7 years, to identify problem points and ways to solve them was the main goal of the research presented in the book Syndicate: Arms Business. In the end, the military-industrial complex is one of the few high-tech areas in which Ukraine can still adequately compete on the world market, relying on the potential that it inherited from Soviet times. Provided you understand the essence of this business and the rules of the game in this market. So, considering that, as of 2012, the arms business of Ukraine is an attempt to create a “syndicate”, it is worthwhile to realize: the classic example of the syndicate is the diamond giant De Beers, which has concentrated in its hands the realization of most of the rough diamonds mined in the world . The creation of this syndicate began back in the distant 1888 year. But he went down in history not only as a business with more than 100-year history, but also as an example of one of the world's most successful 60-year advertising campaigns, which broke stereotypes about diamonds. Whether the Ukrainian “syndicate” is ready to search for its successful marketing policy, whether its creation will become as historically significant for Ukraine will be shown by the following years. And in our common strength to do everything to achieve the development and formation of our common "syndicate" called Ukraine ...
The full text can be found in the book "Syndicate: Arms Business.UAH".