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    Russia’s search for new arms markets in South America

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    Mark Bromley and Paul Holtom, SIPRI,  for RIA Novosti. New SIPRI data on global arms transfers published today reveal that Russia remains the second largest arms exporter in the world, accounting for a quarter of global exports of major conventional arms.

    However, deliveries to China, Russia's main recipient for past decade, remain stagnant. Mega-deals with Algeria and Venezuela have helped to maintain Russia's position in the global ranking of arms exporters, SIPRI data show that overall Russian efforts to capture the North Africa and South American arms markets have yielded limited results thus far. 

    According to official data, Russian arms exports were worth $8.35 billion in 2008, compared with $3.7 billion in 2000. The latest SIPRI data, which measure the volume of arms deliveries, also show a rise, indicating that that exports were 14 per cent higher in 2004-2008 than 1999-2003. Although this increase has been driven mainly by China and India, significant contributions have been made by states that had not been significant recipients in the previous decade, such as Algeria and Venezuela. However, SIPRI data released today confirms that the volume of major conventional weapons transferred from Russia to China is in decline. The passing of the hey-day for big ticket orders from China has been know of in Russia's arms industry circles for some time. In response, Russian industry and government officials have sought to secure larger export orders from Russia's traditional clients in recent years, while also expanding into new markets.

    As noted by Rosoboronexport Anatoly Isaikin in July 2008, one of the regions that Russian has targeted for arms exports is South America. Russia's decision to increase efforts in the South American arms market has been well-timed. Although South America accounted for only 6 per cent of international arms imports in 2004-2008, the net volume of arms imported by states in the region was double the volume for 1999-2003. This is a much higher increase in arms flows than the 15 per cent global average. Reflecting Russia's strong push into the region, Russian President Dmitriy Medvedev and Russian foreign minister Sergey Lavrov visited several South American and Caribbean states in 2008, with military-technical cooperation high on the agenda in meetings with Brazil, Ecuador, Peru and Venezuela.

    Between 1999-2003 and 2004-2008, the percentage of Russian arms exports going to Latin America has increased from 1 per cent to 7 per cent with major conventional weapons supplied to Colombia, Uruguay and Venezuela. However, Russia's drive into the Latin American defence market is neither as new nor as overwhelmingly successful, as has been claimed.

    Russia has long been an important supplier to several countries in South America, which has long been a region that sourced weaponry from a range of different suppliers. Peru has traditionally favoured weapons from Russia and the former-Soviet Union and was the first non-socialist South American country to acquire weapons from the Soviet Union. Five countries have ordered or received arms from Russia in the past decade: Brazil, Colombia, Peru, Uruguay and Venezuela. Military helicopters have proven particularly popular. Despite its close ties with the United States, Colombia received 20 Mi-17 transport helicopters from Russia between 1997 and 2007 and placed an order for 5 more in 2008. At the end of 2008, Brazil placed placed a $150 million order for 12 Mi-35M combat helicopters. Argentina and Bolivia were also reportedly interested in acquiring military-transport helicopters from Russia in 2008.

    The increase in Russian deliveries to South America in recent years has largely been the result of one country's purchases: Venezuela. Until 2005, Venezuela's main suppliers of military equipment were the United States and Western Europe, which together accounted for 79 per cent of Caracas' imports for 1990-2005. Following the break-off in relations between Venezuela and the United States, and the imposition of an arms embargo by Washington, Caracas signed arms deals worth over $4.4 billion with Russia for 10 Mi-35 combat helicopters, 3 Mi-26 heavy transport helicopters, 40 Mi-17 multi-role helicopters, 100 000 AK-103 rifles, and 24 Su-30MK combat aircraft. The resulting deliveries account for 98 per cent of Russian transfers to Venezuela over the last five years. With 7 per cent of Russian arms exports, Venezuela was the fourth largest recipient of Russian exports, behind China (42 per cent), India (20 per cent) and Algeria (8 per cent)

    Beyond, Venezuela, Russia has had little success in signing big-ticket deals with South American buyers. In the wake of Medvedev's visit in late 2008, Russia lost out to France for €8.6 billion ($11.3 billion) worth of orders from Brazil for the licensed production of helicopters and conventional and nuclear submarines, with French technology transfers regarded as more attractive. Russia was also cut from the shortlist of candidates for Brazil's multi-billion dollar F-X2 fighter aircraft competition in late 2008.

    Of even greater concern for Russia could be that with most of the Venezuelan purchases now been delivered, there are question marks over whether Caracas will go ahead with long-discussed follow-on orders. Since 2007, there have been persistent rumours that a raft of new orders are to be placed with Russia for: Su 35 combat aircraft, An 74 and Il 76 transport aircraft, Mi 28 combat helicopters, Kilo class submarines, BMP-3 armoured vehicles, Mi-28NE helicopters, T-72 tanks and various air-defence systems. However, despite Russia reportedly agreeing to grant $1billion in credit for arms purchases in November 2008, no deals with Moscow were signed in 2008, leading some to question whether the fall in oil prices has forced Chavez to curb his ambitions. The biggest Venezuelan deal announced in 2008 was an order for an estimated 18-24 K-8 combat trainer aircraft from China.

    With Russian arms transfers to China drying up, much has been made of Moscow's recent push into the South America defence market. In truth, this has been a market that Russia has been present in for many years. At the same time, the prospect of the region developing into an effective surrogate for the large sums generated by the trade with China look slim. South America will continue to look to a range of suppliers, and will never develop the monopolistic ties that Moscow has previously enjoyed with Beijing.

    A selection of Russian exports of major conventional weapons to South America, 1999-2008

     

    Country

    Type of conventional weapon

    Order and delivery period

    Number ordered

    Number delivered

    Brazil

    Mi-35 combat helicopter

    2008

    12

     

    Colombia

    Mi-17 transport helicopter

    2001-2008

    15

    10

     

    BTR-80*

    2005-2008

    100

    (8)

    Peru

    MiG-29 combat aircraft

    1998-1999

    3

    (3)

     

    R-73EL air-to-air missiles

    1999

    (40)

    (40)

     

    R-77 air-to-air missiles

    1998-1999

    (12)

    (12)

     

    Il-103 light aircraft

    2000-2001

    6

    (6)

     

    9M133 Kornet anti-tank missile

    2008

    244

     

    Uruguay

    GAZ-3937 Vodnik APC

    2005-2006

    48

    48

    Venezuela

    Mi-35 combat helicopter

    2005-2006

    8

    8

     

    Mi-26 helicopter

    2005-2008

    3

    3

     

    Mi-17 helicopter

    2005-2008

    40

    40

     

    Su-30MK combat aircraft

    2006-2008

    24

    24

     

    KAB-500/1500 guided bomb

    2006-2008

    (200)

    (200)

     

    Kh-29 air-to-surface missile

    2006-2008

    (50)

    (50)

     

    Kh-31P anti-ship missile

    2006-2008

    (50)

    (50)

     

    Kh-59ME air-to-surface missile

    2006-2008

    (50)

    (50)

     

    R-27 air-to­-air missile

    2006-2008

    (100)

    (100)

     

    R-73 air-to-air missile

    2006-2008

    (150)

    (150)

    (...) Brackets are used to indicate that the number of items ordered or delivered is an estimate

    * Licensed production arrangement

    Source: SIPRI Arms Transfers Database, http://www.sipri.org/contents/armstrad/at_db.html

    The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

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