Russia to sell $14bn of arms in 2016 after "good advertising" in Syria

By bne IntelliNews May 19, 2016

Russia will sell $14bn worth of arms in 2016, the head of the Federal Service of Military and Technical Cooperation Alexander Fomin said on May 18, calling the military operations in Syria as "good advertising" for the country's military hardware.

While the sum keeps Russia in second place after the US in the global arms trade, this marks a 3.5% fall from its record $14.5bn of defence products exported to 58 countries in 2015. Fomin estimated the full exports order book in the military sector at up to $56bn, while noting that the Association of South-East Asian Nations accounted for half of the exports in 2015.

He also highlighted Africa as being the second most attractive market after southj-east Asia in terms of upside potential. The official confirmed the supplies of S-300 anti-aircraft complexes to Iran and noted that Russia is discussing possible arms sales to Myanmar amid softened sanctions on the country.

Since the start last September of Russia's military campaign in Syria, in which some of its latest technology was first used, including cruise missiles, was an effective showcase for ithe country's products.

"The developments in Syria and the participation of Russia's Aerospace Forces and other units in them, the involvement of other types of weapons inadvertently created a vivid advertising stream - our weapons proved to be the most high-precision, selective, effective at long range and in tactical depth," Fomin told reporters, according to TASS.

"We don't seek this, as there should be no advertising at war, but it was a necessity - the relevant operation to establish peace in Syria and destroy the gangs, terrorist groups," the official added, but noting that "this was very good advertising for us".

In March, Russian President Vladimir Putin ordered the withdrawal of the main battlegroup from Syria, although some aviation units remain.

Despite Western sanctions imposed against Russia over the Ukraine crisis, it managed in 2014 to slightly increase the level of its defence exports from 2013 by $22mn to $13.2bn. Demand for Russian weapons is now so high that manufacturers can barely cope with the orders, including export contracts, Putin said in March.

"Capabilities of our equipment and armament were also convincingly demonstrated in practice, in the combat situation when struggling with the terrorist threat," the president said when visitng a modernised arms plant in Nizhny Novgorod.

Another potentially lucrative conflict that flared in Russia's perceived sphere of influence is the dispute over Nagorno-Karabakh between Azerbaijan and Armenia, in which Russia has both hosted peace talks and armed both sides.

After a Moscow-brokered ceasefire came into effect in April, Russian Prime Minister Dmitry Medvedev said selling weapons to neither Azerbaijan nor Armenia will not stop.

"If we imagine for a minute that Russia has given up this role [of arms seller], we can well understand that this place will not stay vacant," Medvedev told the weekly "Vesti on Saturday" programme on Russian state TV.

The US, Russia, China, France, and Germany were the world's top five arms exporters in 2011-2015, accounting for 74% of global arms exports, Vedomosti daily reported in February, citing the data of Stockholm International Peace Research Institute (SIPRI).

Russia's exports increased by 28% compared with the previous five-year period, selling weapons to 50 states and insurgent forces in East Ukraine, SIPRI reported. Contrary to the official statistics, the institute's data shows that in 2014 and 2015 exports dived compared with 2011-2013.

Russia's main exports market is Asia, with India taking a 39% share of Russian arms exports, and Vietnam and China accounting for 11% each. Meanwhile, the fastest growth was showed by Azerbaijan, which boosted imports of Russian arms by 264% to 4.9% of total Russian exports.

Iran is also keen to renew its dilapidated military hardware, especially its tank force, that was largely bought from the Soviet Union and Russia.

But despite the lifting this year of most international economic sanctions against the country, Fomin said Russia was still prohibited from selling it tanks. "Tanks, ships, missiles and other attack weapons fall under UN sanctions," he said. "Such deals might be possible only when the bans are gone."

However, Moscow still insists on the validity of the S-300 missile deal with Iran as this was commenced prior to the imposition of the sanctions and subsequntly halted.

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