Russia Expects To Equal Arms Export Record Despite U.S. Sanctions
Russia’s defense industry expects to finalize at least $2.5 billion in new arms export sales by the end of the year, Rostec chief executive officer Sergei Chemezov said at the Dubai Air Show.
Russia has confirmed arms sales to foreign customers this year worth $11 billion, but expects to end the year with at least $13.5 to $13.7 billion in export revenue, Chemezov told reporters Nov. 17.
Chemezov acknowledges that expectation implies a round of furious trading for the Rosoboronexport arms agency to equal last year’s record export sales total of $13.7 billion.
“We have two months have left, so November and December,” he says.
The annual sales totals have become a key marketing point in Russia’s response to U.S. sanctions imposed in 2017 in retaliation for Moscow’s annexation of Crimea and meddling in the U.S. elections in 2016.
Despite the pressure imposed by the Counter America’s Adversaries Through Sanctions Act, Russia’s defense industry claims to have been unaffected economically.
“Overall, the sanctions—well, you can hear the results of Rosoboronexport, they’re sort of self-explanatory,” Chemezov says through an English interpreter. “Last year, Rosoboronexport supplied military technology that was a record in Russian economic activity. This year we will have even higher, but at least no less.”
The threat of U.S. sanctions hasn’t stopped the Turkish government from accepting deliveries of two batteries since July of the S-400 air defense systems produced by Almaz-Antey, a subsidiary of Rostec. U.S. officials continue to pressure the Turkish government to cancel the order, offering to restore Ankara’s role in the F-35 program and supply Patriot interceptors instead.
But Turkish officials so far have rebuffed the U.S. pressure and have opened discussions with Russia on localizing production of S-400 components in Turkey, says Alexander Mikheev, director general of Rosoboronexport.
“They have discussed the program of localization,” Mikheev says.
Rosoboronexport also continues to discuss sales of Russian fighters to Turkey to backfill the canceled F-35 order as the replacement for the Turkish Air Force’s F-4 fleet.
“We have made our offers,” Chemezov says. “So far, they are reflecting. As soon as they make the decision, we will be ready to sell [Turkey] both Su-35 and Su-57E.”
India, another S-400 customer, also has resisted U.S. pressure so far to cancel the order under the threat of potential sanctions. The Indian government has completed the first payment to Russia for deliveries scheduled at the end of next year.
“We have started the production [for India],” Chemezov says.
Despite such statements, Russia hasn’t completely escaped financial harm from U.S. sanctions. Indonesia ordered Sukhoi Su-35 fighters in 2018, but none have been delivered and Rosoboronexport offers no timeline for completing the deal. Meanwhile, Indonesian officials reportedly are considering a deal for Lockheed Martin F-16V fighters, although it’s not clear if they are meant to augment or replace the previous Su-35 order.
“Well, nothing is holding up [deliveries],” Mikheev says. “The contracts are signed. All the formalities have been fulfilled. So we are expecting the contract to start.”