Tag Archives: OPK

Not OK in the OPK

OAO Radiopribor

OAO Radiopribor

Recent news reports indicate all is not well in Russia’s defense-industrial complex (OPK).  This despite several years of budgetary largesse in the form of an ever-increasing state defense order (GOZ).

Exhibit No. 1

Defense plant OAO Radiopribor in Vladivostok is officially bankrupt, but some remnant will be preserved in an 11th hour deal turning the company into a subsidiary of OAO Dubna Machinebuilding Plant (DMZ) in Moscow Oblast. How effectively DMZ can operate a money-losing business 6,500 km to the east is anyone’s guess.

Local press indicates that labor authorities in Primorskiy Kray are already working to place or retrain some Radiopribor employees (i.e. not all of them have a future at the old plant).

The industrial holding company AFK Sistema and its electronics subsidiary OAO RTI own DMZ.  DMZ makes components for military aircraft including external fuel tanks.

Radiopribor’s 1,500 workers hadn’t been paid in eight months, and the enterprise’s wage arrears amounted to 224 million rubles along with general debt of 3.5 billion rubles.

The figures on the salaries are interesting — the average employee may have been making a little more than 18,000 rubles per month. That was probably about two-thirds of average pay in Vladivostok last year.

Exhibit No. 2

Russia’s sole manufacturer of infantry fighting vehicles — BMPs, Kurganmashzavod (KMZ) in the Urals recently defeated a Moscow-based creditor’s attempt to have it declared bankrupt for failing to pay on 41 million rubles of arrears on its leasing contracts.

It defeated the effort because, as a subsidiary of Kontsern Tractor Plants, KMZ is a “strategically important enterprise” and can’t be bankrupt according to a longstanding presidential decree.

KMZ apparently also owes its gas supplier.

It has a state order for 200 BMPs in 2015-17 which should help it some.  It’s been a big supplier of civilian heavy equipment in the past, but that must not be going too well either.

Exhibit No. 3

Press from late March described OAO United Instrument-building Corporation’s effort to come up with an “anti-crisis” plan for its enterprises in Tambov Oblast southeast of Moscow.  OAO OPK is itself part of Rostekh.

OAO OPK’s Revtrud factory has 1 billion rubles worth of debt.  Revtrud’s wage and tax arrears come to about 150 million rubles.  It makes communications and electronic warfare systems.

OAO OPK says it plans to amalgamate affiliates Revtrud, Oktyabr, Tambovapparat, and Efir into a single production complex.  It will spend 4 billion rubles to recapitalize and reequip these enterprises.  Tambovapparat doesn’t seem to be doing too well either. Efir is doing the best; the MOD is buying its Borisoglebsk-2 jamming system.

Exhibit No. 4

On 22 March, TASS quoted Jan Novikov, general director of S-400 maker Almaz-Antey, who indicated he was considering a 30 percent cut in his workforce for economic reasons.  A week later, he walked this back saying savings might come through other means, according to a TASS report of an interview he gave Rossiyskaya gazeta.  Novikov stated that cost-cutting is needed to pay the bills for financing and starting up production at new plants in Nizhegorod and Kirov.  This from what is arguably Russia’s best-performing arms producer.

On top of these reports from various corners of the Russian OPK, we have interesting news from important characters in Moscow.  They seem to agree that the GOZ is turning downward, and taking the fortunes of these companies with it.

On 5 March, Deputy Defense Minister Tatyana Shevtsova, who oversees the military’s budget, said its financing would be trimmed by 5 percent this year, but claimed weapons procurement would be untouched.

A week later, Rostekh Chief Sergey Chemezov told The Wall Street Journal that the GOZ could be slashed by 10 percent in 2016.

On 26 March, Deputy Prime Minister Dmitriy Rogozin — tsar of the arms sector — told TASS that Russia needs “patriots of industry” ready to do everything necessary to renew not just the armed forces but industry too.  He continued:

“Then we won’t depend on the oil and gas needle, because we’ll rely on industry.”

President Putin’s administration chief Sergey Ivanov traveled to Tula on 29 March to preach about a time when the GOZ will decline and defense enterprises will have to diversify.

On 31 March, the chairman of the Federation Council’s Defense and Security Committee Viktor Ozerov admitted there could be problems financing military procurement in 2017, but insisted the Defense Ministry would not abandon its goal of 70 percent modern weapons and equipment by 2020.

At the outset of the armaments program in 2011, more than one or two wise observers said Russia’s industrial obsolescence and its reliance on hydrocarbon rents needed fixing before making heavy investments in defense industry.  Why?  Defense industrial investment has a smaller multiplier effect in the overall economy.  The time and money to make these changes has been wasted, and now is an inauspicious time for them.

Defense Sector Wages

Interesting item on wages in Russia’s defense industrial sector in NG on November 11.

Alina Terekhova reports average monthly pay in the OPK is 17 percent higher than the country as a whole.  However, defense industry salaries lag employee earnings in other key sectors (i.e. railroads, oil, finance).  Yet they are likely to grow while wages elsewhere will probably begin to fall.

Minpromtorg [rather optimistically] forecasts that the earnings of OPK workers will double over the coming five years.

Defense industry pay grew 13 percent last year [not entirely consistent with the table below] against almost 12 percent in other areas.

Average Pay in the OPK

Average Pay in the OPK

Earlier this year, workers in Russia’s mining industry made nearly 57,000 rubles per month, oil workers 83,000, railroads 41,000, and finance 67,000.  Pay in the defense industries averaged about 38,000 rubles per month during the first half of 2014, according to Rosstat.  Nationwide it was about 32,000.

That 38,000 seems to fit in the context of other salaries (e.g. 30-35,000 for junior officers and contractees).

Rising inflation, Terekhova reports, could reduce real earnings for everyone next year.

She quotes a couple experts, neither of whom expects a decline in OPK wages. Despite the stagnation evident in the economy, the Kremlin will likely continue funding the GOZ generously given increased tensions with the West.  This will keep upward pressure on defense sector salaries.

It’s interesting that the oft-mentioned “cadre famine” in defense industry hasn’t bid wages higher.  But some enterprises report the average age (and presumably the pay grade) of their workers is dropping with the arrival of new and younger employees.

Reaction to Putin’s Armaments Conferences

Actually, one reaction . . . a succinct editorial from Vedomosti capturing many good points with few words.

Vladimir Putin (photo: RIA Novosti / Aleksey Nikolskiy)

Vladimir Putin (photo: RIA Novosti / Aleksey Nikolskiy)

In Sochi last week, President Vladimir Putin conducted a whirlwind three-day series of meetings on Russia’s rearmament programs, giving his primary attention to strategic nuclear ones.

Here’s Vedomosti’s thinking on the sessions:

“Vladimir Putin conducted an intensive series of defense-industrial meetings.  During the trip to Olympic Sochi, the president in turn reviewed the problems of the development of aviation, the fleet, Space Defense Troops [sic] and the Missile Troops of Strategic Designation.  The fact that the discussion of military issues was raised to the highest level, signifies, probably, both the depth of the problems, and the priority of the subject.  The rational use of colossal resources was discussed:  expenditures on defense rose from 600 billion rubles in 2003 to 2.3 trillion rubles in 2013, and the general volume of the State Program of Armaments to 2020 is 20 trillion rubles.”

“These meetings affirmed:  Recent bureaucratic and staff [apparat] decisions, including appointment of a new minister of defense and a “military-industrial” deputy prime minister, did not solve the systemic problems of rearming the army and the quality of work of the domestic VPK.”

“The domestic VPK’s development is frozen, it needs foreign scientific and design developments — both dual-use and exclusively military, observes the director of the Center for the Analysis of Strategies and Technologies Ruslan Pukhov.  These demands can hardly be satisfied because of constant altercations with Europe and the USA on foreign policy issues.  Moreover, the objective requirement for technological cooperation will contradict Defense Minister Sergey Shoygu’s announced course of refusing imports of foreign armaments, combat equipment and support means (the purchase of the “Mistrals” is the exception proving the rule).  Of course, it is possible to hope that intelligence agents will acquire the needed technologies, as it was in Soviet times.”

“However, even this will not quite forestall the lag:  the institutes and specialists who provided the correct implementation of foreign technologies have been lost.”

“There is still a key question requiring a strategic decision at the highest level, — what is more important:  production of the maximum possible quantity of combat equipment or the training of professionals capable of using the most complex armaments, including foreign-produced ones.  For now, judging by Shoygu’s announcement on the preservation of conscript service, at the top they are inclined toward extensive development, toward employing unpaid labor, the use of which in the army turns into huge losses for households and the economy as a whole.”

“The personal participation of the president is essential in the resolution of conflicts between those who order and suppliers of armaments.  The latter in the absence of competition between various design bureaus and factories (it, as is well-known, existed in the time of the USSR and was one of the engines of the country’s technological development) have become monopolists, not interested in raising quality.  They are sure that the armed forces will buy their products, and know, that in case of disagreements with the military, the directors of state companies from among the closest associates of the first person will turn up on their side.”

Lots of thoughts and propositions for discussion and debate.

Re-Industrializing for Military Modernization



It’s been Golts overkill.  Despite the risk of overdosing, he has an article in Ogonek from 25 September which merits attention.

One could do much, much worse than to pick him, if you could read only one commentator.

Golts tries to explain why Russia’s OPK, its defense sector, has failed.

He gives prominent examples of defense industrial shortcomings including the most recent Bulava and Proton-M failures.  Interestingly, he says all serially produced Bulava SLBMs are being returned to Votkinsk for inspection.

Calling the list of failures “endless,” he concludes, “Production standards are falling uncontrollably not only in the space sector.”  He continues:

“The thing is not only particular failures.  Experts from the military economics laboratory of the Gaydar Institute suggest that defense order 2013 will be disrupted just as it was in previous years.  According to their data, defense order 2012 was revised and lowered at least three times.  And still it was unfulfilled by approximately 20 percent.  Accounting Chamber auditor Aleksandr Piskunov was extremely forthright in the Duma hearings:  ‘Almost one hundred percent fulfillment of state defense orders for the last 20 years hasn’t interfered with the failure of all armaments programs, with fulfilling them at 30, 40, 50 percent.'”

You may recall reading Piskunov here at the start of April.

Then, Golts notes, Putin himself cast doubt on the OPK’s ability to fulfill the current GPV.  He recalls the late July meeting when Putin indicated he’d entertain slipping ships and submarines due after 2015 into the next GPV (to 2025), so that there aren’t more “failures.”

Putin said work should be organized so producers’ capabilities coincide with the allocated funding.  Money, he said, shouldn’t be hung up in accounts [and stolen] while we wait for ships.  Golts reads this as Putin recognizing that the state of domestic industry is such that it can’t assimilate the gigantic sums allocated to it.

The defense sector has structural problems that endless calls for mobilization to face an aggressive West can’t resolve (i.e. a workforce that’s almost reached retirement age, continued aging of basic production equipment).

Golts again turns to Piskunov, who said only 20 percent of defense enterprises approach world standards in terms of technical equipment, and nearly half are in such a poor state that resurrecting them is senseless — it would be better to start from a “clean slate.”

But Golts focuses on poor coordination and cooperation among enterprises, government customers, and sub-contractors.  He turns to the familiar case of Bulava — 650 different enterprises reportedly have a hand in turning out this missile.

Most damning, Golts compares today’s “so-called united state corporations” unfavorably to Soviet-era defense industry ministries.  Ineffective and bureaucratized, the latter still managed to manufacture massive numbers of weapons.  And Gosplan matched prices for products and production by fiat.  Today’s goskorporatsii can’t.

There’s another important difference, Golts points out.  All Soviet “civilian” industries also produced arms, or parts for them.  Average citizens buying civilian goods helped finance military production with their purchases.

But the largest part of this permanently mobilized industrial system died in the 1990s and surviving parts retooled for other production.  Many in the latter category no longer wanted part of the defense order which would only make them less competitive in their main business.

Then Golts concludes:

“But it’s impossible to begin serial production of armaments without serial production of components.”

Today’s OPK chiefs don’t have the talents of some of Stalin’s industrial commissars, says Golts.  They are, however, good at blaming ex-Defense Minister Serdyukov for “destroying” the voyenpred system.

Golts really gets to it here:

“In reality producers of complex military equipment have a choice.  They can either make components in final assembly plants in a semi-artisan fashion.  Or they can buy them on the side, risking getting crap made in some tent.  It stands to reason the problem isn’t confined to recreating the military acceptance office in enterprises.  Complex chains of sub-contractors have to be established.  And, we note, even with money — this isn’t a banal task.  We’re really talking about new industrialization, the construction of new enterprises.  But just what kind?”

Golts recommends a policy of targeted and specialized re-industrialization.  Because of the expense, he says build specialized component factories to support production of critical systems where Russia is decades behind developed states — communications, reconnaissance, UAVs, precision weapons.  Russia will have to prioritize and Golts doesn’t see tanks, ships, and heavy ICBMs as priorities.  Those who pick the priorities have to withstand attacks from lobbyists for these weapons.

Golts believes Deputy Prime Minister and OPK tsar Dmitriy Rogozin knows the bind he’s in . . . and that’s why he says put off the beginning of serial production of many armaments until the next armaments program (2016-2025).

Golts concludes:

“Generally, the rearmament of the Russian Army is entering a new cycle.  Without any kind of results.”

Clean Slate

It took a brave man to tell the State Duma what department chief Aleksandr Piskunov said in the Audit Chamber’s annual legislative report in February.  Voyenno-promyshlennyy kuryer published excerpts of his remarks.

Piskunov’s a government official.  Not a powerful voice, but an authoritative one in his specialty.

Auditor Aleksandr Piskunov

Auditor Aleksandr Piskunov

To say he’s well-equipped for his work is an understatement. 

Sixty-one or 62 years old, Piskunov graduated from the RVSN’s Dzherzhinskiy Military Academy with a radio engineering degree.  He served on active duty to the rank of general-major, spending many years at the Plesetsk cosmodrome.  He later trained in the RF Government’s Financial Academy and a business school in London.  He has a PhD in economics.

Piskunov served in both the RSFSR Supreme Soviet and State Duma in the early 1990s, and was deputy chairman of the Defense Committee for each body.  He also chaired the Defense Ministry’s Military-Technical Policy Committee.  In the mid-1990s, he moved to the staff (apparat) of the RF Government and was deputy chairman of its Committee on Military-Industrial Issues.

He returned to the Duma briefly in 1999, and became deputy chairman of its “Regions of Russia” faction.

He went to the Audit Chamber in 2001, and is currently in his third term of service.

Piskunov thinks Russia can’t produce new, better, or more weapons and military equipment without modernizing its badly neglected defense industrial base.  But he has pretty much nothing but scorn for the current management of the state defense order.  And he sees little but failure in the GPV over the last 20 years.  In particular, Piskunov calls for incorporating life cycle costs into the GPV.  Ultimately, however, he says auditors and accountants can’t fix the GOZ or GPV, but lawmakers could.

Enough preamble.  Here’s VPK’s excerpt of Piskunov’s remarks.


“I represent a department that performs strategic audits in the Audit Chamber.  We’ve done a lot of work in evaluating the condition of practically all 1,350 enterprises of the defense-industrial complex, their financial stability and real contribution to equipping the Armed Forces.”

“We looked at how balanced the program of defense-industrial complex modernization and State Program of Armaments were.  A gap of 700 billion rubles was observed.  At the same time, 1 trillion 200 billion is built into the budget to guarantee compensation to enterprise directors who go to commercial banks for credits.”

“Similar credit practices are leading to the growth of OPK enterprises with an unstable financial situation.  More than 30 percent are like this.  Only 20 percent come close to world standards in technical equipping.  More than half are in a condition where their restoration is already senseless — it would be better to build from a clean slate.”

“In preparing the law on the state defense order we tried to correct this situation.”

“From my point of view, our system of administering the state defense order is uncompetitive.  The adopted law preserved the situation under which  management amounts to a lag in the state defense order.”

“The deputy prime minister, responsible for the defense-industrial complex, reported that the state defense order was fulfilled by 99 percent as in past years.  But almost one hundred percent fulfillment of state defense orders over the last 20 years has not prevented the failure of all arms programs or fulfilling them at 30, 40, 50 percent.”

“Dmitriy Rogozin himself noted that fulfillment happened because of the appearance of realization.  During the execution of the arms program 7,200 changes were introduced into it, that is the real result is being slanted to agree with this fact.”

“Meanwhile Rogozin recognized that the arms program has gotten old.  The task of preparing a new State Program of Armaments stands before him.  So the problem of forming a legislative basis and management of the State Program of Armaments is more acute than ever.”

“Our opponents in government, having considered it inexpedient to include the management of the acquisition program life cycle in the GOZ law, said it was necessary to include this management in the law on the State Program of Armaments.”

“To me it seems necessary in this instance to hold them to their word — to propose that the government prepare a draft law on the State Program of Armaments.  It’s possible this will allow us to compensate for not realizing it in the GOZ law, and meet the president’s demand to create essential management of the life cycle of weapons systems.  But today the state of affairs is seriously complicated by the fact that the life cycle is really torn into several parts in the Defense Ministry itself.”

“Those who’ve served understand:  you can’t modernize armaments without the experience of using them.  Who really tracks all this life cycle?  It would be logical if Rosoboronpostavka were occupied with this, but it is located at the junction of the functional orderer — a service of the Armed Forces and a contracting firm.  It would be more appropriate to subordinate this department to the government.  It’s perfectly clear that the main risks are connected not to corruption, but to the low qualifications of the orderer.  Someone needs to “hang” over the orderer from the point of view of its responsibility for how both the program and the contract as a unitary whole are being executed.  Juridical responsibility is not rebuilt only through the contract.”

“The level of project management in our ‘defense sector,’ unfortunately, is also very low, especially the quality management system.  We are all witness to what is happening now in space.”

“It’s frightening that it’s impossible to create new equipment without metrics.  We lost the project management culture and stopped training specialists in military academies and schools.  The very best on this plane is OOO ‘KB Sukhoy’ and it used the American experience-plan for metrics on developmental aircraft.  The Americans seized and simply closed the issue — this project is no longer being supported.  To rewrite project documentation now in some kind of domestic variant is complex, therefore the development of these systems is essential.”

“The participation of commercial banks in providing credit for the state defense order is an important question.  Now in the government they are discussing how these 23 trillion will go — through commercial banks, for free or for money?  It’s understood that banks simply don’t work that way.  There is a precedent — the government resolution on the Mariinka, the Bolshoy [theaters], the M-4 [highway].  If you calculate it, then 20 percent received from 23 trillion over these years, it’s necessary to take an additional amount from the taxpayers or cut the defense order by this sum.”

“Not less sensitive is the issue of intermediaries.  If the Defense Ministry and government don’t put transactions under the strictest control, then there are all the calculations on the defense order, life cycle and cooperation levels, we will mess up this program of armaments also.  This, undoubtedly, is one of the most dangerous questions for the Defense Ministry — too large lobbyist forces participating, too large sums going.”

“Questions of managing the life cycle and control of finances are the most fundamental.  The treasury is incapable of resolving this task.”

Shoygu’s Inherited Dilemmas

Shoygu and Serdyukov

Shoygu and Serdyukov

Before Russia’s holiday topor fully enshrouded military commentators, Gazeta’s Sergey Smirnov published an interesting piece on the situation in which Defense Minister Shoygu finds himself.  There isn’t a lot of great comment on Shoygu yet, but it might be cranking up.  Smirnov looks at how the popular Shoygu could mar his well-regarded career while tackling the same accumulated military structural problems that faced his predecessor.  He writes about possible bureaucratic and personal conflicts with Sergey Ivanov, Sergey Chemezov, and Dmitriy Rogozin.

Leftover Problem One:  Contract Service

According to Smirnov, Russia’s military added virtually no contractees in 2012, but still has to recruit 50,000 of them every year until 2017 to reach its assigned target of 425,000.  The obstacles are the same.  Eighty percent of them don’t sign a second contract because the army doesn’t offer living conditions more attractive than barracks.  Undermanning is a related problem.  Smirnov says the military’s manpower is certainly below 800,000.  And Shoygu may have to acknowledge this problem.

Leftover Problem Two:  Bureaucratic Competitors

Smirnov describes Serdyukov’s conflict with Rogozin over the OPK and its production for the military.  He claims the “Petersburg group” of Sergey Ivanov, Chemezov, and Viktor Ivanov wanted one of its guys to take Serdyukov’s place at the Defense Ministry.  But Putin didn’t want to strengthen them, so he took the neutral figure Shoygu.

According to Smirnov, Serdyukov wanted out, and wanted to head a new arms exporting corporation to replace Rosoboroneksport.  That, of course, conflicted directly with Chemezov and the interests of the “Petersburgers.”  And Smirnov makes the interesting comment:

“But that appointment [Serdyukov to head a new arms exporter] didn’t happen precisely because of the big criminal cases which arose not by accident.”

Was Serdyukov done in for overreaching rather than for corruption scandals in the Defense Ministry?

Shoygu, writes Smirnov, was not thrilled at the prospect of continuing the “not very popular” army reforms.  Smirnov is left at the same point as everyone else:  will it be a “serious revision” of Serdyukov’s reforms or a “course correction?”

There’s lots of talk to indicate the former rather than the latter.  The new VVS CINC has bloviated about returning to one regiment per airfield instead of large, consolidated air bases.  He claims the Krasnodar, Syzran, and Chelyabinsk Aviation Schools will be reestablished.  He babbles about going to a three-service structure and retaking VVKO.  Shoygu will allow Suvorov and Nakhimov cadets to march in the May 9 Victory Parade.  He stopped the Military-Medical Academy’s move out of the center of Piter.  Other commonly mentioned possible revisions are returning to six MDs and transferring the Main Navy Staff back to Moscow.

Leftover Problem Three:  Outsourcing

Serdyukov’s outsourcing policy led to scandals, and didn’t work for the Russian military’s remote bases.  Gazeta’s Defense Ministry sources say the structure and activity of Oboronservis will likely be greatly modified or, less likely, Oboronservis will be completely disbanded if some workable entity can take its place.

Leftover Problem Four:  Military Towns

The military wants municipal authorities to take over the vast majority (70-90 percent) of a huge number of old military towns (that once numbered 23,000) no longer needed by Armed Forces units.  The army only wants some 200 of them now.

The local government wants the military to provide compensation to restore and support these towns, but the latter doesn’t have the funds.  The army is laying out billions of rubles in the next three years, but only to outfit 100 military towns it wants to use.  There is also the problem of who gets, or has the power to give away, legal title to this military property.

Leftover Problem Five:  Officer Housing

Shoygu, says Smirnov, has to solve the unresolved problem of officer housing, especially for officers “left at disposition” of their commanders (i.e. not retired but lacking duty posts and apartments).  The Defense Ministry still doesn’t know how many need housing.  Smirnov writes:

“Despite the fact that the military department daily reports on the handover of apartments, the line of officers retired from the army who are awaiting receipt of living space is not becoming smaller.  At present from 80 to 150 [thousand] former officers are awaiting the presentation of housing.”

More than enough lingering headaches for one Defense Minister.

Russia’s Arms Race

Sergey Karaganov

Sergey Karaganov wrote recently about Russia’s need for a military buildup.  His article appeared in Vedomosti, Russia in Global Affairs, and finally on the Valday discussion club’s site.

He sets out to explain why Russia needs a buildup, and why conventional military power is still relevant in today’s world.  He tries to square the buildup with a “record low” military threat to Russia.  But most of his text criticizes Kremlin intentions.

Down on Russia’s armaments plan, he’s high (probably too high) on the results of Serdyukov’s defense reforms.

It’s worth extracting and distilling some of Karaganov’s points into a stronger concentration.

He gives this as a general rule, but doesn’t (but should) emphasize how this applies to Russia:

“. . . nation states have lost much of their original strength.  Their ability to control information, financial, economic and political processes in their territories is wearing thin.  Also, they are becoming ever more dependent on the outside world.  There emerges another argument in favor of greater reliance on arms as the only tool of which the states almost entirely keep control.”

So Russia, like other states (perhaps to a greater degree), looks to its armed forces as the lone attribute of its sovereignty?

Russia, Karaganov contends, faces no external threat through the medium term.  A strong China is a problem, but not necessarily a military one.  Threats from the south are not like existential ones that shaped Russian history for centuries.  And the threat of a U.S. strike on Russian territory looks “ridiculous.”

Karaganov continues, saying the buildup is more about politics than anything else:

“I believe that in the eyes of the Russian leadership the need for gaining greater military strength will stem first and foremost from the factors of the country’s international positioning and the predetermined prospects of its political development.  Four years of sweet mumbling about modernization and practically no concrete action, except for Skolkovo, clearly demonstrates that neither society nor the elite is prepared for a modernization breakthrough.”

He describes why Russia’s ruler(s) opted for the buildup, then offers tepid support for it:

“It looks like the military buildup is expected to compensate for the relative weakness in other respects – economic, technological, ideological and psychological.”

“Criticizing this choice for being dissonant with the modern world is easy.  To a large extent this is really so.  But the modern world is changing so rapidly and unpredictably that quite possibly this choice is adequate.”

While lauding military reforms thus far, he admits:

“There are no well-considered re-armament plans behind them.”

“The process of rearmament is tough-going.  The defense-industrial complex has been bled white.  Still worse, it is not being reformed.  It is now a pale shadow of the Leviathan of the Soviet era. Just what the Russian army was only recently.”

Karaganov continues questioning the rationale for, and consequences of, the buildup:

“The military buildup policy is not only generally desirable for the ruling elite, and, possibly, for the country, but also inevitable.  The question is how and at what cost.  It will be important not to overspend, thereby ruining the development budgets.  In the meantime, it looks like a policy has been launched towards suicidal (for the country) cuts in spending on education, instead of its dramatic increase.  The reduction will upset even the beyond-horizon chances of making a modernization breakthrough.”

“It would be very silly to overspend and over-arm oneself beyond any measure only to breed more enemies, who would be looking at Russia with horror.”

“What makes the risk of mistakes still worse is that there are practically no institutional restrictions on the arms race.  Only two restraints exist at the moment.  The finance ministers – the current one and his predecessor – have been doing their utmost not to give as much as they were asked for.  And the defense minister has been trying to limit the appetite of what’s been left of the defense-industrial complex – thirsty for investment and, admittedly, corrupt as elsewhere.  In the current political system the national parliament is unable to play any tangible role in shaping a new military policy and in forming the budget.”

“No less alarming is the absence of an academic or public discussion of military policy priorities. In the meantime, there was such a discussion, although in a very limited form, even back in the last years of the USSR.  The academic think tanks created in those times are aging morally and physically.  From the right, liberal side the current military policy is criticized by a handful – literally two or three – of authors.  They surely deserve words of praise for being so bold.  But they lack knowledge and are politically engaged and biased.  In the center there is a group of experts close to the defense ministry, who are obliged to praise whatever it does and turn a blind eye on its mistakes.  And on the left side – in the mass media that are fortunately not quite available to the general reader – one can find publications by tens and even hundreds of specialists representing the remains of the financially and intellectually ruined academic part of the Soviet military-industrial complex.  I am not going to surprise the reader with the phantasmagoric threats these experts try to scare the country and themselves with.  Quite often their descriptions have no bearing on the reality and are nothing but caricature replicas of Soviet-era fantasies.”

“But to realize what is to be done, it is necessary to purposefully promote independent social, political and scientific analysis of the processes that are underway in the military sphere.  Or else there will be too many mistakes to be paid for too dearly.”

It’s pretty clear the new defense minister won’t be a brake on the OPK any time soon, if ever.

And Karaganov’s right, the lack of legislative or expert debate on defense policy is alarming.  But where in Russia hasn’t outside input and influence on politicians and policymakers waned?  His criticism of the state of press commentary on defense issues is a bit dramatic.

Anatoliy Serdyukov’s strength was making changes instead of talking them to death.  This approach engendered lots of resistance.  But, in the end, an intra-elite squabble rather than opposition to his policies brought his resignation.