MOSCOW Ñ Russia's leading strategic institute warns that the
nation's defense exports are being endangered by competition from Israel.
The Center for Analysis of Strategies and Technologies said in a report
that the pillars of Russia's defense industry stand on exports to China and
India. The center said the huge Russian defense trade market in India is
being jeopardized by competition from Israel.
"The problem of the Indian market is that the competition there is
growing with France and Israel," Ruslan Pukhov, director of the center,
Russia reported record defense exports in 2002, with sales of $4.8
billion, Middle East Newsline reported. China and India were said to have comprised the lion's share of the
exports. Exports for 2003 were expected to reach $4.5 billion.
But the report warned that India is moving from away Russia and seeking
other suppliers. Israeli defense sales to India have been growing and are
estimated at about $1 billion over the last year.
Konstantin Makiyenko, a leading Russian strategist and member of the
center, said China and India could be saturated by Russian military systems
by 2004. He cited the huge number of Russian aircraft, tanks, naval vessels
and other systems sold to both countries over the last three years.
Last year, Israel and Russia signed a memorandum of understanding to
cooperate in the upgrade of Soviet-origin systems. The MoU was demanded by
Moscow as a condition for cooperation in a proposed $1 billion sale of
Israel's Phalcon airborne early-warning systems to India. India wants the
Phalcon to be fitted in the Russian-origin Ilyushin Il-76 cargo plane.
Marat Kenzhetayev, an analyst with the Moscow-based Center of Arms
Control, said the rapid growth of Israeli defense exports is one of the most
significant trends in the global market. Kenzhetayev said Israel has become
a leader in platform upgrades, particularly those of Soviet-origin.
In its report, the center said Sukhoi was the leading defense exporter
in 2002, followed by MiG. Exports comprised 90 percent of Sukhoi revenues
while 95 percent of MiG revenues come from exports. Sukhoi has $3 billion in
orders from India.
The center's report said Sukhoi exported MiG fighters to Yemen in 2002.
It said Russia's KBP Tula plans to begin deliveries of Pantsir-S1 air
defense systems to the United Arab Emirates.
Industry sources said the assassination of two senior executives of
Russia's Almaz-Antei will affect exports in 2003. The consortium, composed
of 46 companies, is the leading designer and producer of anti-aircraft
systems, such as the S-300PMU.
"This killing, without a doubt, will wreak havoc on the shareholders
meeting planned for late June and, ultimately, will significantly alter the
formation of the holding's management structures," an industry source was
quoted by the Moscow-based Interfax news agency as saying.