Tuesday 19 March 2013, Amsterdam
Russian weapons and equipment are in high demand internationally as their performance is even better than that of advanced Western models for certain tasks. In 2011, Russia exported defense equipment to 54 countries; however, as China and India, the biggest consumers of Russia’s defense exports, have reduced the amount they procure, the country is now focused on expanding its export market to countries in South America and Africa. Other major customers of Russia’s military industrial-complex include Algeria, Venezuela, Vietnam, and Indonesia. Of the respondents from Europe who participated in the SDI Business Outlook Survey 2012, 54% cite ‘Foraying into new geographies’ as a strategy that defense companies/suppliers will seek to adapt or modify in the coming two years.
At the end of 2012, Russia concluded a framework agreement with China for the sale of four Amur-1650 diesel submarines, and in January 2013, it signed another intergovernmental agreement for the supply of Russia’s latest Su-35 long-range fighter planes; if the deals go through, it will be for the first time in a decade that Russia has delivered offensive weapons to China. At the International Defense Exhibition in Abu Dhabi in February 2013, Russia sealed contracts for an undisclosed number of fighter jets with China and for US$116 million worth of ammunition to the host nation, the United Arab Emirates.
Figure 1: Russian Defense Expenditure, 2009-2013
Over the review period, the Russian government invested significantly in the modernization of its armed forces, including the replacement of outdated Soviet era equipment in an upgrade program triggered by the country’s 2008 conflict with Georgia. Russia’s defense expenditure, which stood at US$38.5 billion in 2009, recorded a CAGR of 18.28% over the review period, to reach US$75.3 billion by 2013.
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