Russia Aims to Be Top Arms Merchant

The cloudless summer sky above this Moscow suburb has been loud these past few days with the roar of Russia's ambitions.

As potential customers strolled the stands at Zhukovsky air base, the country's most modern fighter planes and helicopters have swooped and twisted noisily over their heads in dramatic displays of technological prowess.

Moscow's third international airshow is another step in Russia's march back into the international arms trade, as the Kremlin battles to reestablish its old preeminence in an increasingly difficult market.

But it is a market to which the authorities here are paying close attention. The last six years, since the Soviet Union collapsed, have shown officials that the only Russian products that the rest of the world wants to buy - aside from raw materials such as oil and timber - are military hardware.

So the Russians are pushing their fighter planes, submarines, and small arms hard, especially in Southeast Asia, the Mideast, and Latin America. Weapons exports this year are expected to top $4 billion. The state-owned Rosvooruzheniye company, which has a monopoly on arms exports, has done deals with 51 countries worldwide. As a result, Russia boasts that it is second in global weapons sales behind the United States, which had deals worth $11 billion in 1996.

Not without obstacles, Rosvooruzheniye officials complain. New CIA Director George Tenet, "according to the information we have, intends to step up his agency's activities to disrupt Russia's existing arms export structures, to oppose our efforts to penetrate new markets," charged Rosvooruzheniye Director General Alexander Kotyolkin in a recent interview with a Russian newspaper.

In a narrowing post-cold-war arms market, where international competition is vicious, "Russia's most obvious advantage is that they are cheaper," says Peter Felstead, editor of the London-based Jane's Intelligence Review.

Rosvooruzheniye makes the same point, a little less bluntly, in its publicity material. "Effective, simple, reliable and at a reasonable price - these are the prime qualities that make [Russian weapon] highly competitive in the world's market," said the company in a recent statement.

But neither do Russian arms manufacturers lag behind in the technological race, foreign experts say.

They point, for example, to the Yakhont supersonic antiship cruise missile, unveiled earlier this month. Traveling at 2.5 times the speed of sound, it has a range of 190 miles. The closest American counterparts, the Tomahawk and Harpoon missiles, are subsonic; the best French antiship missile, the Exocet, has a range of only 45 miles. The Yakhont's designers boast that it is 25 years ahead of its time, and it is on sale now.

"The Russian defense industry has generally been hamstrung cashwise" since the fall of the Soviet Union, says Mr. Felstead. "But they have these pockets of technology where the funding has come through in key areas."

If, in the old days, the Soviet Union used to sell (or give away) what it wanted to its client states and third-world allies, today Russia has to adapt its products to a broader market. Factories here have been quick to make their weapons compatible with Western systems that national armies might already have.

The famous AK-47 automatic rifle, for example, is now made in a new version with a NATO-caliber barrel, so that armies that have previously bought Western small arms can now buy Russian and still use the same ammunition.

Likewise, the Russians are offering a mobile command post, the 'Baikal-I,' which can control Russian, American and French surface-to-air missiles in one system.

Such adaptability is critical if the Russians are to break into markets traditionally dominated by their main competitor, the United States. That, says Boris Kuzyk, president Boris Yeltsin's adviser for foreign arms sales, is now the goal. "The president will be supporting Rosvooruzheniye's aggressive search for new markets," Mr. Kuzyk said at the air show. In this search, the Russians have mastered marketing, a Western-capitalist skill the Soviets disdained. Felstead remembers visiting international air shows where Moscow's latest inventions were presented only on turgid display boards, in Russian, that he would have to photograph and translate when he got home.

At Zhukovsky this week, glossy brochures with bright photographs and snappy text were piled at every stand.

And Moscow is not fussy about who it sells its weapons to, as an important deal with Indonesia earlier this month showed.

Jakarta announced that it would no longer buy nine US-made F-16 fighter, as planned, because the deal was running into problems in Congress over allegations of human rights violations in Indonesia.

Russia stepped right up with 12 Su-30K fighters and eight Mi-17 transport helicopters. Not only does the Duma, the Rus-sian parliament, have no control over foreign arms sales; there is no humanitarian lobby in Russia to campaign against weapons exports to foreign dictators.

This drive for exports, important to arms producers worldwide, is especially crucial to Russian manufacturers, since the cash-starved Russian military cannot even pay its soldiers, let alone procure expensive new weapons systems.

In 1995, for example, every single one of the 35 Mig-29s that came off the production line was sold abroad. Russia's defense industry is already in the doldrums. Without export orders it would be dead.

But as the Russian government seeks to consolidate its defense industry into a handful of major conglomerates strong enough to survive into the next century, Rozvooruzheniye's target is clear. "By 1999, if the government keeps supporting us, we will have caught up with the United States in sales," General Kotyolkin boasted on Wednesday.