Overseas immigrants
European and American firms will be equally affected by anti-Russian sanctions, and for Moscow, Western policies will be a serious catalyst for the development of an import-substituting base.
Although the efforts of the Russian authorities have somewhat lowered the degree of political tension in the situation around Ukraine, the threat of new, even tougher sanctions from the West remains real. Some countries have already suspended military cooperation with Russia and cooperation in the field of military-technical cooperation (MTC). The military-industrial complex correspondent learned from a veteran of the military-technical cooperation system of our state with foreign partners, Vice Admiral Valentin Vlasov, about the impact of these bans on the activities of the military-industrial complex of the Russian Federation. From 1984 to 1992, Valentin Andreevich headed GKES - the Main Engineering Directorate of the State Economic Cooperation Committee (one of the predecessors of the current Rosoboronexport), which was engaged in the supply of domestic weapons and military equipment abroad.
- Valentin Andreevich, today the possibility of imposing new sanctions against Russia is being discussed in the European Union and the United States. Do you think these bans will affect Rosoboronexport?
- In recent years, the United States has repeatedly introduced various restrictions on the interaction of its enterprises and firms with Rosoboronexport.
So, in August 2006, the US State Department imposed sanctions on Rosoboronexport and the company "Sukhoi". We regarded these bans as an unfriendly act against Russia and an attempt to destabilize the MTC with foreign countries. However, the US sanctions did not cause any complications in the work of Rosoboronexport, since practically no joint MTC projects with this country and its companies were carried out on a bilateral basis or with the participation of third countries.
Then there were attempts by the US Department of State to declare sanctions in January 2007. Then we took it as a manifestation of unfair competition against Rosoboronexport and the Russian Federation as a whole.
Finally, in July, the 2012 US House of Representatives adopted an amendment that prohibited the Pentagon from cooperating with Rosoboronexport. At that time, the execution of the contract between the Russian state mediator and the command of the US ground forces on the additional supply of Mi-12-17 helicopters Mi-NN security forces to Afghanistan was threatened. But contrary to the wishes of US lawmakers, the contract was executed. Let me remind you that the main contract for the 5 helicopter was implemented in the 21 year. Moreover, Rosoboronexport soon concluded with the Pentagon an additional contract for 2012 helicopters, and now all deliveries of the Mi-30В-17 for Afghanistan are carried out in accordance with the schedule.
- The initiators of the sanctions often choose the most vulnerable spots for their attacks. The press has already flashed a message about the possible termination of shipment of components and assemblies for the Russian passenger airliner "Superjet", which on 60 – 70 percent consists of Western components.
- Then (with a grin), the Russian aviation industry will begin to produce even more combat aircraft and more actively sell them to foreign customers, some of whom do not have much respect for the United States and NATO. West need it?
Speaking seriously, such “painful” sanctions will finally force the Russian defense industry complex to really actively engage in scientific and technical developments in areas where we have seriously lagged behind competitors in the last 20 years. Thus, the sanctions will become a serious catalyst and stimulus for the development of our import-substituting base. And for this you will only need to thank the countries of the West.
- Can a specific example?
- Of course. The Achilles heel of our defense-industrial complex is an electronic component base. Almost 70 percent of electronics in the domestic high-tech products - imports. But, firstly, the light did not converge on the western supply and we can use other sources for the acquisition of electronic components. Secondly, if we are still completely “blocked by oxygen”, domestic microelectronics will start developing and producing their own samples more quickly. Although I will not hide, it will be quite difficult to keep up with world leaders, because the electronic component base is almost completely updated within three to five years.
- As you know, the answer to an unfriendly sanction can be adequate (according to the principle “an eye for an eye, a tooth for a tooth”), and it can be asymmetric (if you bite off our finger, you can lose your own hand, or even your head). Which path will be chosen by us?
- We are peaceful people and we prefer a constructive and business negotiation process to tough measures. But if they force us, the initiators of tension need to remember that sanctions are a double-edged sword. Foreign companies that cease deliveries under the concluded contracts will have to not only return the money received from Russia (payment for the ordered components and assemblies), but also pay very substantial penalties. In addition, they will have serious difficulties with the implementation of parts, components and components already manufactured to our order.
If we talk about an asymmetric response, then the largest manufacturers of aircraft in the USA and Europe will have a very hard time without Russian titanium. But I think Western politicians have enough common sense not to bring the situation to an absurdity.
It is necessary to take into account the foreign economic ties that the United States and the European Union maintain with Russia. If the trade turnover between the Russian Federation and the United States total 40 billions of dollars, the European Union has something to lose. 400 billions are at stake here. As they say, feel the difference ...
Let's remember one more thing that few people think about. If the Russian defense industry can’t produce any military equipment for our foreign partners in connection with the announcement of sanctions, first of all, this could have a negative effect on the customer countries of Russia weapons. But among these countries there are allies of the United States and NATO.
- Recently, French Foreign Minister Laurent Fabius said that Paris may consider the possibility of canceling agreements with the Russian Federation on Mistral-type helicopter carriers. What then?
- In my opinion, this is unlikely. The purchase of helicopter carriers is carried out in the framework of intergovernmental agreements with France. Accordingly, government guarantees were given on both sides. Breaking such agreements will be a sensitive blow to the country's prestige as a reliable partner. And this is a serious loss of reputation. Russian Deputy Prime Minister Dmitry Rogozin has already explicitly stated that in such a sensitive area as military-technical cooperation, France is beginning to lose confidence in itself as a reliable supplier. And Mr. Fabius himself admitted that the cancellation of the agreements will hit the French side.
“Well, suppose, the French will refuse to supply Mistral ...”
- Recently, France has made significant efforts to develop cooperation with our country in the military-technical field. At the same time, the French invariably met with support from the Russian side, despite the fact that the overall balance in trade was in favor of the French partners. For this reason, France will suffer more damage from breaking ties. Although it should be frankly acknowledged: we greatly value the level of mutual trust that has been shaped bit by bit over the years in this extremely delicate area.
Again, the prospect of considerable financial losses. If the French party terminates the contract, it will have to return the money paid to us in the amount of unfulfilled obligations, and under certain circumstances we may have grounds for demanding the return of all funds already transferred as part of the contract. However, it is possible that the French leadership will have to pay not only with us, but also with their national companies, which will not receive the money they expected in connection with the implementation of this large-scale contract.
- But after all, we will be left without modern amphibious assault ship docking ships ...
- Let me remind you that the contract was concluded on the basis of a tender in which several countries participated. Moreover, during the discussion a number of our specialists preferred other applicants. So, if deemed appropriate, one could return to these proposals or announce a new tender. Yes, and Russian shipbuilders, as is known, declare their readiness to build their own landing ship of a new generation, which would not be inferior to the French Mistral. I will say to those who do not know: the aft part of the Mistral was manufactured in our Baltic plant and delivered to France for docking with the main body. So, as you can see, we have experience. And the creation of the Vikramaditya aircraft carrier in the interests of India even convinced the skeptics that we are capable of tasks of such magnitude.
- Then, what about the statement made by the General Director of the Eurosatori arms exhibition, General Patrick Cola de Frank, that Russia may be banned from participating in this largest international salon, which will be held in Paris from June 16 to 20 this year? It is possible that our country may be declared persona non grata and aviation The Farnborough 2014 exhibition, which will be held in London from July 14 to 20.
- Every year, enterprises of the defense industry of the Russian Federation, including Rosoboronexport, participate in about 20 major international exhibitions. And everywhere, Russia is one of the largest exhibitors, seriously raising the authority and prestige of any, even the largest exhibition venue. There can be no other way. After all, our country ranks second in the world in the export of military products, while dozens of Russian enterprises represent the national defense industry in international arms forums. Quite large areas have already been reserved for our exposition both at Eurosatori-2014 and at Farnborough-2014. It was assumed that there will be exhibited full-scale samples of modern military equipment, which could become an ornament to any, even the most prestigious exhibition. We will calmly experience the absence at one or two exhibitions, but it is almost impossible to find an equivalent replacement for the remaining one and a half or two months, and even at the prices they requested. So in this situation, these sanctions - spitting against the wind.
- After the collapse of the USSR, a significant part of defense industry enterprises remained on the territory of Ukraine. Today, within the framework of the historically established cooperation, we purchase from our neighbor many components for the production of final samples. What if the new authorities in Kiev decide to completely stop the supply of these products?
- This decision will put the Russian defense industry complex in a rather complicated, but quite surmountable situation. Russia ordered in the Ukrainian defense industrial complex various products for about 15 billions of dollars. But in the case of sanctions, our neighbor will not receive these huge funds. For the military-industrial complex of Ukraine, this will turn into a disaster. Neither Europe, nor the United States in particular, needs either Ukrainian helicopter and aircraft engines, nor aircraft of the An family, nor sea propulsion systems. But this is the most profitable and modern products of the Ukrainian defense industry, which for the most part is made for the Russian Federation.
“But the head of Antonov aviation concern, the Hero of Ukraine Dmitry Kiva, who fought for cooperation with our country, and Ukroboronprom, has banned the shipment of military and dual-purpose products to Russia, has already been dismissed.
- In my opinion, these are opportunistic political decisions of the new Kiev authorities, completely devoid of common sense. If the trend for the collapse of the defense industry of Ukraine continues, the price of these actions will be too high for the new Kiev authorities. Tens of thousands of skilled workers and specialists of Ukrainian industrial enterprises will be dismissed. What will they do? They will join the ranks of irreconcilable opponents of the government that made this decision. The consequences, it seems to me, are obvious. The collapse of most industrial enterprises, which at one time were a national pride, is the lot of many countries of the former socialist camp and republics of the USSR. But now a Polish plumber, a Ukrainian nurse, a Bulgarian laborer, a Moldovan nurse, etc., etc., are classic “national professions” in Western Europe.
And if we are talking about the current capabilities of the leading enterprises of Ukraine, let's recall a recent example. The Soviet-built aircraft carrier Varyag built by the whole country in Soviet times on 80 – 90, which went to Ukraine after the division of the military property of the USSR, was never brought to mind by the shipbuilders of Nikolayev. In 1998, it was sold to China for the price of scrap metal for ... cutting "on needles". Now it is a full-fledged combat-training aircraft carrier "Liaoning" as part of the Chinese Navy.
- Valentin Andreevich, you have for a long time managed the Chief Engineering Directorate (SMI) of the USSR State Committee for Foreign Economic Relations. Tell me, were there examples of effective international sanctions at that time that would disrupt the fulfillment of obligations under the state institution of supply of goods and equipment to our foreign partners?
- I do not remember such cases. Known restrictions on the acquisition by the Soviet Union of key foreign defense technologies were successfully overcome. The same can be said about the equipment for the production of new weapon systems. One way or another, but we still solved these problems. The introduction of prohibitions restricting the activities of a self-sufficient state, usually causes the mobilization of intellectual, industrial and financial resources throughout the country, aimed at overcoming these sanctions. Especially when it comes to ensuring national defense. Examples from stories there is: the Soviet Union, China, North Korea, South Africa, finally Iran. These or other international sanctions were imposed against them at various times, some of which continue to operate to this day. But in the military-technical respect, these countries are developing, relying on their own forces and resources of their allies. So, by and large, any sanctions are a tool to strengthen the defense industry potential of the country against which they are declared.
Although the efforts of the Russian authorities have somewhat lowered the degree of political tension in the situation around Ukraine, the threat of new, even tougher sanctions from the West remains real. Some countries have already suspended military cooperation with Russia and cooperation in the field of military-technical cooperation (MTC). The military-industrial complex correspondent learned from a veteran of the military-technical cooperation system of our state with foreign partners, Vice Admiral Valentin Vlasov, about the impact of these bans on the activities of the military-industrial complex of the Russian Federation. From 1984 to 1992, Valentin Andreevich headed GKES - the Main Engineering Directorate of the State Economic Cooperation Committee (one of the predecessors of the current Rosoboronexport), which was engaged in the supply of domestic weapons and military equipment abroad.
- Valentin Andreevich, today the possibility of imposing new sanctions against Russia is being discussed in the European Union and the United States. Do you think these bans will affect Rosoboronexport?
- In recent years, the United States has repeatedly introduced various restrictions on the interaction of its enterprises and firms with Rosoboronexport.
So, in August 2006, the US State Department imposed sanctions on Rosoboronexport and the company "Sukhoi". We regarded these bans as an unfriendly act against Russia and an attempt to destabilize the MTC with foreign countries. However, the US sanctions did not cause any complications in the work of Rosoboronexport, since practically no joint MTC projects with this country and its companies were carried out on a bilateral basis or with the participation of third countries.
Then there were attempts by the US Department of State to declare sanctions in January 2007. Then we took it as a manifestation of unfair competition against Rosoboronexport and the Russian Federation as a whole.
Finally, in July, the 2012 US House of Representatives adopted an amendment that prohibited the Pentagon from cooperating with Rosoboronexport. At that time, the execution of the contract between the Russian state mediator and the command of the US ground forces on the additional supply of Mi-12-17 helicopters Mi-NN security forces to Afghanistan was threatened. But contrary to the wishes of US lawmakers, the contract was executed. Let me remind you that the main contract for the 5 helicopter was implemented in the 21 year. Moreover, Rosoboronexport soon concluded with the Pentagon an additional contract for 2012 helicopters, and now all deliveries of the Mi-30В-17 for Afghanistan are carried out in accordance with the schedule.
- The initiators of the sanctions often choose the most vulnerable spots for their attacks. The press has already flashed a message about the possible termination of shipment of components and assemblies for the Russian passenger airliner "Superjet", which on 60 – 70 percent consists of Western components.
- Then (with a grin), the Russian aviation industry will begin to produce even more combat aircraft and more actively sell them to foreign customers, some of whom do not have much respect for the United States and NATO. West need it?
Speaking seriously, such “painful” sanctions will finally force the Russian defense industry complex to really actively engage in scientific and technical developments in areas where we have seriously lagged behind competitors in the last 20 years. Thus, the sanctions will become a serious catalyst and stimulus for the development of our import-substituting base. And for this you will only need to thank the countries of the West.
- Can a specific example?
- Of course. The Achilles heel of our defense-industrial complex is an electronic component base. Almost 70 percent of electronics in the domestic high-tech products - imports. But, firstly, the light did not converge on the western supply and we can use other sources for the acquisition of electronic components. Secondly, if we are still completely “blocked by oxygen”, domestic microelectronics will start developing and producing their own samples more quickly. Although I will not hide, it will be quite difficult to keep up with world leaders, because the electronic component base is almost completely updated within three to five years.
- As you know, the answer to an unfriendly sanction can be adequate (according to the principle “an eye for an eye, a tooth for a tooth”), and it can be asymmetric (if you bite off our finger, you can lose your own hand, or even your head). Which path will be chosen by us?
- We are peaceful people and we prefer a constructive and business negotiation process to tough measures. But if they force us, the initiators of tension need to remember that sanctions are a double-edged sword. Foreign companies that cease deliveries under the concluded contracts will have to not only return the money received from Russia (payment for the ordered components and assemblies), but also pay very substantial penalties. In addition, they will have serious difficulties with the implementation of parts, components and components already manufactured to our order.
If we talk about an asymmetric response, then the largest manufacturers of aircraft in the USA and Europe will have a very hard time without Russian titanium. But I think Western politicians have enough common sense not to bring the situation to an absurdity.
It is necessary to take into account the foreign economic ties that the United States and the European Union maintain with Russia. If the trade turnover between the Russian Federation and the United States total 40 billions of dollars, the European Union has something to lose. 400 billions are at stake here. As they say, feel the difference ...
Let's remember one more thing that few people think about. If the Russian defense industry can’t produce any military equipment for our foreign partners in connection with the announcement of sanctions, first of all, this could have a negative effect on the customer countries of Russia weapons. But among these countries there are allies of the United States and NATO.
- Recently, French Foreign Minister Laurent Fabius said that Paris may consider the possibility of canceling agreements with the Russian Federation on Mistral-type helicopter carriers. What then?
- In my opinion, this is unlikely. The purchase of helicopter carriers is carried out in the framework of intergovernmental agreements with France. Accordingly, government guarantees were given on both sides. Breaking such agreements will be a sensitive blow to the country's prestige as a reliable partner. And this is a serious loss of reputation. Russian Deputy Prime Minister Dmitry Rogozin has already explicitly stated that in such a sensitive area as military-technical cooperation, France is beginning to lose confidence in itself as a reliable supplier. And Mr. Fabius himself admitted that the cancellation of the agreements will hit the French side.
“Well, suppose, the French will refuse to supply Mistral ...”
- Recently, France has made significant efforts to develop cooperation with our country in the military-technical field. At the same time, the French invariably met with support from the Russian side, despite the fact that the overall balance in trade was in favor of the French partners. For this reason, France will suffer more damage from breaking ties. Although it should be frankly acknowledged: we greatly value the level of mutual trust that has been shaped bit by bit over the years in this extremely delicate area.
Again, the prospect of considerable financial losses. If the French party terminates the contract, it will have to return the money paid to us in the amount of unfulfilled obligations, and under certain circumstances we may have grounds for demanding the return of all funds already transferred as part of the contract. However, it is possible that the French leadership will have to pay not only with us, but also with their national companies, which will not receive the money they expected in connection with the implementation of this large-scale contract.
- But after all, we will be left without modern amphibious assault ship docking ships ...
- Let me remind you that the contract was concluded on the basis of a tender in which several countries participated. Moreover, during the discussion a number of our specialists preferred other applicants. So, if deemed appropriate, one could return to these proposals or announce a new tender. Yes, and Russian shipbuilders, as is known, declare their readiness to build their own landing ship of a new generation, which would not be inferior to the French Mistral. I will say to those who do not know: the aft part of the Mistral was manufactured in our Baltic plant and delivered to France for docking with the main body. So, as you can see, we have experience. And the creation of the Vikramaditya aircraft carrier in the interests of India even convinced the skeptics that we are capable of tasks of such magnitude.
- Then, what about the statement made by the General Director of the Eurosatori arms exhibition, General Patrick Cola de Frank, that Russia may be banned from participating in this largest international salon, which will be held in Paris from June 16 to 20 this year? It is possible that our country may be declared persona non grata and aviation The Farnborough 2014 exhibition, which will be held in London from July 14 to 20.
- Every year, enterprises of the defense industry of the Russian Federation, including Rosoboronexport, participate in about 20 major international exhibitions. And everywhere, Russia is one of the largest exhibitors, seriously raising the authority and prestige of any, even the largest exhibition venue. There can be no other way. After all, our country ranks second in the world in the export of military products, while dozens of Russian enterprises represent the national defense industry in international arms forums. Quite large areas have already been reserved for our exposition both at Eurosatori-2014 and at Farnborough-2014. It was assumed that there will be exhibited full-scale samples of modern military equipment, which could become an ornament to any, even the most prestigious exhibition. We will calmly experience the absence at one or two exhibitions, but it is almost impossible to find an equivalent replacement for the remaining one and a half or two months, and even at the prices they requested. So in this situation, these sanctions - spitting against the wind.
- After the collapse of the USSR, a significant part of defense industry enterprises remained on the territory of Ukraine. Today, within the framework of the historically established cooperation, we purchase from our neighbor many components for the production of final samples. What if the new authorities in Kiev decide to completely stop the supply of these products?
- This decision will put the Russian defense industry complex in a rather complicated, but quite surmountable situation. Russia ordered in the Ukrainian defense industrial complex various products for about 15 billions of dollars. But in the case of sanctions, our neighbor will not receive these huge funds. For the military-industrial complex of Ukraine, this will turn into a disaster. Neither Europe, nor the United States in particular, needs either Ukrainian helicopter and aircraft engines, nor aircraft of the An family, nor sea propulsion systems. But this is the most profitable and modern products of the Ukrainian defense industry, which for the most part is made for the Russian Federation.
“But the head of Antonov aviation concern, the Hero of Ukraine Dmitry Kiva, who fought for cooperation with our country, and Ukroboronprom, has banned the shipment of military and dual-purpose products to Russia, has already been dismissed.
- In my opinion, these are opportunistic political decisions of the new Kiev authorities, completely devoid of common sense. If the trend for the collapse of the defense industry of Ukraine continues, the price of these actions will be too high for the new Kiev authorities. Tens of thousands of skilled workers and specialists of Ukrainian industrial enterprises will be dismissed. What will they do? They will join the ranks of irreconcilable opponents of the government that made this decision. The consequences, it seems to me, are obvious. The collapse of most industrial enterprises, which at one time were a national pride, is the lot of many countries of the former socialist camp and republics of the USSR. But now a Polish plumber, a Ukrainian nurse, a Bulgarian laborer, a Moldovan nurse, etc., etc., are classic “national professions” in Western Europe.
And if we are talking about the current capabilities of the leading enterprises of Ukraine, let's recall a recent example. The Soviet-built aircraft carrier Varyag built by the whole country in Soviet times on 80 – 90, which went to Ukraine after the division of the military property of the USSR, was never brought to mind by the shipbuilders of Nikolayev. In 1998, it was sold to China for the price of scrap metal for ... cutting "on needles". Now it is a full-fledged combat-training aircraft carrier "Liaoning" as part of the Chinese Navy.
- Valentin Andreevich, you have for a long time managed the Chief Engineering Directorate (SMI) of the USSR State Committee for Foreign Economic Relations. Tell me, were there examples of effective international sanctions at that time that would disrupt the fulfillment of obligations under the state institution of supply of goods and equipment to our foreign partners?
- I do not remember such cases. Known restrictions on the acquisition by the Soviet Union of key foreign defense technologies were successfully overcome. The same can be said about the equipment for the production of new weapon systems. One way or another, but we still solved these problems. The introduction of prohibitions restricting the activities of a self-sufficient state, usually causes the mobilization of intellectual, industrial and financial resources throughout the country, aimed at overcoming these sanctions. Especially when it comes to ensuring national defense. Examples from stories there is: the Soviet Union, China, North Korea, South Africa, finally Iran. These or other international sanctions were imposed against them at various times, some of which continue to operate to this day. But in the military-technical respect, these countries are developing, relying on their own forces and resources of their allies. So, by and large, any sanctions are a tool to strengthen the defense industry potential of the country against which they are declared.
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