From Russia with love!

by Ajai Shukla

Business Standard: 30th Jan 2007

For half a century, the best-paid analysts in America, including the now-famous Condoleezza Rice and Zbigniew Brzezinski, were those who specialised in the arcane discipline of Kremlinology. Today, notwithstanding the end of the Cold War, a new generation of American Russia-watchers still interprets every syllable emerging from that opaque, inscrutable government. We in India would do well to follow suit.

Take Russian defence minister Sergei Ivanov’s words, urging India to stop talking and get on with jointly developing the high-tech 5th generation fighter aircraft. On 24th January, sitting next to his Indian counterpart AK Antony, Ivanov declared, “The programme, based on a Sukhoi project, is in its third year in Russia and draws substantial funds from Russia’s national budget. The fighter will be airborne in 2009. Some time back, India showed interest… India has now informed us that a final choice (to join the project) has been made. We can now open up contractual work for Indian accession to the project.”

The weight of Ivanov’s words for the 5th generation fighter project can only be understood in the light of Russia’s recent defence R&D history. Simply put, after the collapse of the Soviet Union, the bankrupt but highly capable Russian military R&D establishment survived mainly on financial life support from the Indian defence budget. While three-quarters of the old Soviet-era design bureaus folded up, putting over a million Russian scientists on the streets, others like MiG, Sukhoi and Severnoe kept afloat by designing weapons purely for Russia’s export market, predominantly India.

The figures, drawn from open Russian sources, tell the story. In 1989, as the Soviet Union hurtled towards meltdown, 2.03% of its GDP was being spent on R&D; some 4,600 research institutions were producing a range of technologies and products. A year later, serving Russian soldiers were begging on Moscow’s underground; there was simply no money to pay them. Military spending plummeted, in real terms, to one-thirtieth of the 1989 figure. Hardest hit was R&D; what little money there was went towards salaries, pensions and housing. R&D spending dropped from 18.6% of the handsome Soviet budget, to 5.7% of the Russian pittance. The famous design bureaus were gasping for oxygen; 1,149 individual R&D projects were cancelled by the bankrupted state.

In this financial nightmare, most of Russia’s R&D spend concentrated on the ultimate security bulwark, the strategic nuclear programme. As NATO absorbed former Warsaw Pact allies, Russia focused on keeping its nuclear arsenal on par with the US. The results are evident today. Russia’s nuclear missile submarine force of 13 vessels could soon technologically leapfrog America’s. Russia’s land-based force of nuclear-tipped missiles has kept pace with America’s, thanks to one of Russia’s greatest R&D successes of the past decade: the Topol-M ICBM, soon to be equipped with multiple warheads. Russia’s air force maintains its edge with the strategic Tu-160 Blackjack bomber.

But the problem remained of funding the dozens of design bureaus that deal with conventional weaponry. Russia did not make any significant conventional arms purchases until 2005, when money flowed in from windfall oil revenues. Until then, it was India that bankrolled the design and production of Russian conventional arms. Over the last decade, India has bought over 300 T-90 tanks, large numbers of Sukhoi-30M and Sukhoi-30MKI fighters, and frigates from Russian shipyards; and India has conducted large-scale modernisation programmes of Russian equipment like the MiG-series fighters. In contrast, the Russian military bought no planes, no ships and just 62 T-90 tanks. Russian expert Ruslan Pukhov estimates that by 2000, as much as 70% of non-nuclear military R&D in Russia was directed towards specific export orders, mainly the following:

• MiG’s project to modernise India’s old MiG-21 fighters into the MiG-21-93 (aka Bison).
• Sukhoi’s radical rebuilding of its old Su-27 fighter into India’s Su-30MKI advanced fighter. Its success translated into orders from other countries like Malaysia and Algeria.
• MiG’s development of the MiG-29K aircraft carrier-based fighter for India. It was test-flown for the first time last week.
• Severnoe, the St. Petersburg-based ship design bureau, designed and built three Talwar class warships for India; India has now ordered three more.
• Sukhoi’s development of its Su-27/30 fighters into China’s advanced Su-30MK2 and Su-30MKK. These may be exported to Vietnam, Indonesia and Venezuela.
• Indian orders funded the development of the Uran-E and Club anti-ship missiles, eventually bought by both countries’ navies.
  

Over the years, Moscow has discovered the benefits of “burden sharing” in R&D. Despite its new oil revenue-fuelled State Armaments Programme that will spend close to $50 billion on R&D from 2007-2015, Moscow is keen that India picks up a share of the enormous tab on risky new projects like the multi-role transport plane and the 5th generation fighter. If you listen intelligently, Ivanov is saying that even though Russia has already financed part of the development of its 5th generation fighter, Moscow still sees benefits in getting India on board. 

Russia is, of course, also driven by the need to lock India into purchasing these products by going through the fiction of “joint development”. While “co-producing” the BrahMos missile with India (all resemblance with Russia’s Yakhont missile is purely coincidental), Russia learned that India’s nightmarish arms buying procedures --- excruciating trials, cut-throat negotiations, prolonged delays --- can be bypassed under the new mantra of “transforming a buyer-seller relationship into one of joint development and production”.

But that’s a story for another day!