How do the Ukraine and Gaza wars affect Russian arms exports?

Gulf countries have become increasingly interested in buying South Korean weapons, which could prove to be an excellent alternative to the West, Russia and China alike.

Reuters

A Russian military transport plane at the Dubai Air Show on November 15, 2021.

How do the Ukraine and Gaza wars affect Russian arms exports?

Anton Mardasov

last update on 27 Nov 2023

Russia's recent participation in the Dubai Airshow 2023 is not the first appearance of Russian military hardware abroad since the outbreak of the war in Ukraine and the imposition of unprecedented sanctions on the Russian economy.

In 2022, representatives of the Russian defence industry participated in the Africa Aerospace & Defence exhibition in South Africa, and in early 2023 — in IDEX 2023 in Abu Dhabi, where they demonstrated a wide range of products, from T-90S tanks to multiple rocket launchers.

The motives of the South African Republic and the UAE to invite Russian exporters to organise exhibitions is undoubtedly an opportunity for the Kremlin to demonstrate the failure of attempts to isolate Russia internationally.

It is also trying to show how its military-industrial complex continues to be a dominant player in the global arms market and is capable not only of supplying its troops in the large-scale war in Ukraine but also exporting weapons to other countries.

However, Russia's claims must always be taken with a grain of salt. The calculation of signed contracts and the amount of delivered equipment depends on the research methodology and, due to current circumstances, is possible only after the fact, and even then, these are unofficial calculations.

Western sanctions and its effects

Since Russia began its aggression in Ukraine in 2014, Washington has consistently ramped up sanctions on Moscow, culminating in the 2017 Countering America's Adversaries Through Sanctions Act (CAATSA), which allows for the imposition of secondary sanctions against countries, as well as legal entities or individuals who purchase weapons from Russia.

Even before the full-scale invasion began, Russia was forced to develop new payment schemes for the supplied equipment, and information about its military exports was scarce. However, this law helped the Russian defence industry adapt to the sanctions imposed after February 2022.

Russia juggles with various figures to prove that, in 2022 and 2023, it managed to maintain a stable export portfolio despite all logistical difficulties and the disconnection of its banks from the SWIFT system. On its part, Western media tries to paint the opposite picture. Propaganda on both sides makes it difficult to draw accurate conclusions.

Moscow purports that its military campaign in Syria had sparked unprecedented interest among regional actors in Russian arms. On its part, Western media maintains that Russia's involvement in the Syrian war had the opposite effect on its arms sales.

AFP — During a military parade on the 78th anniversary of the Soviet Union's victory over Nazi Germany at the Hmeimim base in Latakia in May 2023.

However, the truth is almost always somewhere in the middle.

Moscow purports that its military campaign in Syria had sparked unprecedented interest among regional actors in Russian arms. On its part, Western media maintains that Russia's involvement in the Syrian war had the opposite effect on its arms sales. However, the truth is almost always somewhere in the middle.

Contract negotiations with all the necessary procedures take two to three years, so there is always a delay in the marketing effect.

According to Russian President Vladimir Putin's public statements, the volume of Russia's military sales amounted to $15bn in 2014, $14.5bn in 2015, $15.3bn in 2016, $15.3bn in 2017, $16bn in 2018, $13bn in 2019 (the MoD puts the figure for this year at $15.2bn) and around $13bn in 2020.

In fact, between 2015 and 2020, the leading importers of Russian weapons in the region were India, China, Egypt, Algeria, and Iraq — countries that had begun to sign their bundle agreements (or negotiate for specific classes of weapons) with Russia before it intervened in the Syrian civil war.

The only breakthrough contract for the Russian defence industry in the region during these years was the delivery of S-400s to Turkey to build an independent air defence system.

While experts have opined that Israel's current war on Gaza could encourage Arab countries in the region to buy Russian arms as a protest to America's unequivocal support for Israel, the probability of this happening is extremely low in my view.

Shrinking arms sales

In a report released in March 2023, the Stockholm International Peace Research Institute (SIPRI) said that despite a 31% decline in Russian military exports over 2018-2022, it maintained its leading position among arms exporting countries with a 16% share of the global market.

SIPRI's methodology for assessing Russian-Soviet arms exports is not without its flaws. Its so-called Trend-Indicator Value methodology, which estimates the cost of cheaper Soviet-type tanks or aircraft at roughly the same level as more expensive Western-type tanks or aircraft, has been criticised year after year.

But on the whole, this study reflects Russia's shrinking share in global arms exports.

During a display of Russian arms companies at the Naval Defense and Security Exhibition (NAVDEX), which is held every two years.

In fact, contracts already signed, including in aviation (combat aircraft and helicopters, which account for 40% of all Russian deliveries), are close to fulfilment. It is known from open sources that deliveries of S-400s to India, Ansat helicopters to Zimbabwe, and L-39 combat trainer aircraft to the Central African Republic will be made in 2023.

In a report released in March 2023, the Stockholm International Peace Research Institute (SIPRI) said that despite a 31% decline in Russian military exports over 2018-2022, it maintained its leading position among arms exporting countries with a 16% share of the global market.

The main reasons for the potential decline in sales are as follows.

The first and most important reason is the heavy burden on Russia posed by its war with Ukraine, which reduces its ability to export arms.

The war in Ukraine has derailed several arms contracts that had been approved or were in the process of being approved, including the almost completed state armament programme for the period through 2033.

A Ukrainian rocket launcher fires a Grad missile towards Russian positions near Bakhmut in June 2023.

As a result, the Ministry of Defence and the defence-industrial complex are now forcibly implementing a new, unauthorised programme with huge expenditures on ground forces and with the involvement of mobilisation capacities of the civilian industry for the production of missiles and ammunition.

According to official Kremlin data, arms production increased 2.7 times last year and 10 times in some areas. Russia's extensive use of helicopters in Ukraine and plans to create new brigades directly affect its export image. According to the WSJ, Moscow is trying to buy back the helicopter engines it previously sold to Egypt, Pakistan, Belarus and Brazil.

Second, after 24 February 2022, the threat of secondary sanctions reached a new level, forcing some importers to renege on previous arrangements. Indonesia decided to buy Dassault Rafale fighters instead of Russian Su-35s, the contract with Egypt for the delivery of the same fighters was cancelled, and Uzbekistan, for the first time, showed interest in buying French Dassault Rafale or supported Dassault Mirage 2000 aircraft from the availability of the French Air Force.

The sanctions are also forcing Russian exporters and remaining customers to switch to payments in local currencies and find complex logistical routes to deliver weapons, as many states have closed their airspace to Russian aircraft and made sea transport more difficult.

Third, Russia's military image is not as impressive as it used to be. Russia is stuck in a positional war. For example, Moscow can continue to put the best face on matters and officially declare that it is satisfied with military-technical cooperation with Pakistan, but this does not change the fact that Pakistan, with the mediation and support of Great Britain, is one of the leading suppliers of ammunition for Ukrainian artillery.

In addition, contrary to Moscow's expectations, against the backdrop of the war in Ukraine and Gaza, Gulf countries have become increasingly interested in buying South Korean weapons, which could prove to be an excellent alternative to the West, Russia and China alike.

Contrary to Moscow's expectations, against the backdrop of the war in Ukraine and Gaza, Gulf countries have become increasingly interested in buying South Korean weapons, which could prove to be an excellent alternative to the West, Russia and China alike.

Fourth, even though Ukraine has lost its former status as a seller of Soviet arms and their servicing by utilising all the large stockpiles, Kyiv could cooperate with other actors, such as Ankara, to compete with Moscow on the arms market, for example, in the sphere of warranty service for helicopter equipment.

The war in Ukraine has forced Russia not only to make rapid changes to existing designs but also to create some from scratch and incorporate them into the nomenclature of weapons for export.

Shelly Kittleson — Destroyed Russian tanks between Kyiv and Bucha, Ukraine. Feb. 22, 2023.

Future prospects linked to outcome of Ukraine war

However, many experts working with the government recognise that the prospects for military exports, including technology transfers and joint ventures, depend on the timing of the war's end and the details of any agreement with Ukraine.

Only then will Russia be able to bring modernised and tested weapons to world markets that can effectively counter advanced Western weapons. However, the prospects for an end to the war are very dim.

It is only at first glance that the main task of Moscow and its military campaign is to minimise the consequences caused by the start of this very military campaign.

Strategically, Moscow is betting on Western fatigue with Ukraine and the changing balance of power in Western political circles, but this may have the opposite effect than expected.

The military-industrial complex is not the only engine of overall economic growth, and advances in technology are becoming far more critical than advances in the military-industrial complex in the modern world.

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