MOSCOW ø Russia's defense industry has been clamoring for an
expanded Middle East market to compensate for an expected decline in arms
sales to China.
Russian industry sources said 2004 could mark the first drop in weapons
exports to China amid plans by the European Union to lift its embargo on
Beijing. The sources said President Vladimir Putin has been urged to help
Russia's defense industry find new markets, particularly in the Middle East.
The focus of Russian efforts in the Middle East has been Algeria. Russia
has been trying to win Algerian approval for a $1.5 billion sale of nearly
50 advanced MiG-29 fighter-jets to the North African state. In July, Russia
completed an estimated $300 million sale of 12 MiG-29s to Sudan, Middle East Newsline reported.
France and Germany have been prepared to offer China a range of defense
equipment, the sources said. They said negotiations with Beijing could begin
by the end of 2004 after the European Union lifts trade sanctions
imposed in the aftermath of China's killing of hundreds of protesters in
"France and Germany, which are ready to offer to China hi-tech
electronic reconnaissance, navigation, communications and target designation
systems ø the weak points of the Russian defense industry ø already have
their sights set on developing this market," Dmitry Litovkin, a defense
analyst wrote in the Moscow-based Izvestia.
The sources said Russia's state arms agency, Rosoboronexport, has
examined the prospect of a reduction in defense exports to China market and
the need to develop the Middle East and other markets during 2004. They said
Rosoboronexport intended to accelerate weapons development and ensure
quicker delivery of spare parts to clients in an effort to develop new
But the largest potential Russian market in the Middle East has failed
to materialize. In 2002, Iran and Russia signed a defense cooperation
agreement with an estimated worth of up to $7 billion. Russian sources cited
Iran's economic difficulties as well as U.S. pressure against the sale of
advanced weaponry to the Islamic republic.
In 2003, Russia's defense exports reached a record $5.4 billion. Of
that, Rosoboronexport administered export sales of $5.1 billion.