Russia's arms industry thwarted by U.S. pressure, loss of good salesmen

MOSCOW Ñ The Russian drive to sell weapons and advanced defense systems to several Middle East clients has struck a brick wall.

Russian industry sources said pressure from the United States as well as disagreements over a repayment schedule have blocked deals with such countries as Iran, Libya and Syria. They said part of the problem stems from the Russian consolidation of its arms export agencies, which has led to heavy government control as well as the departure of many veteran officials.

The sources provide the following account of Russia's arms marketing woes. They said U.S. pressure has delayed a proposed multi-billion dollar arms sale to Iran. President Vladimir Putin, the sources said, has pledged to limit any sales to that of defensive weapons. Moscow and Washington are now arguing over the definition of defensive weapons.

In addition, Russia and Syria are divided over the proposed sale of the Iskander-E missile. The missile has a range of 280 kilometers and fires bomblets that separate from the warhead payload Ñ making it difficult for missile defense systems to intercept.

Russia is also experiencing difficulties in obtaining Syrian agreement for Moscow's offer to upgrade Soviet-era tanks and aircraft in Syria's arsenal.

Russia is also stuck in its efforts to sell advanced systems to Libya. The sources said this includes an offer to sell the S-300 anti-aircraft system to Tripoli.

The Russian newspaper Obshchaya Gazeta said the government's newly-organized Rosoboroneksport arms export agency has not signed any major contracts during the last six months. The newspaper said Rosoboroneksport is regulated by Russia's military and intelligence organizations and has lost many of its veteran salesmen.

Defense experts told Obshchaya Gazeta that Rosoboroneksport must be broken up and defense companies should be allowed to enter the international market independently.

"...The final say [should] belong not to 'men from the security organs' but to economic managers and businessmen," the newspaper quoted the experts as saying. "Perhaps only then, independent specialists say, will we see an end to the 'jams' in the sphere of military-technical cooperation between Russia and foreign countries. And the profit earned here will go to develop the country and its enterprises and not to particular groups of officials." Rosoboronexport recorded arms exports of $3.68 billion in 2000. Most of the exports were to China and India.

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