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IHS Jane's study shows arms embargo wouldn't hurt Russia's military

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LONDON - An arms embargo against Russia would be little more than symbolic because Russia is largely self-sufficient in supplying its armed forces, a report argued Sunday.

European Union countries exported $583 million of military equipment to Russia last year, less than 1 per cent of the nation's $68 billion defence budget, according to a study by IHS Jane's, which provides analysis on the defence industry and security issues. The bulk of that was a $521 million payment to France, which is building two Mistral class warships for Russia.

The propriety of arms sales to Russia was questioned last week as the U.S. and EU debated tougher sanctions against President Vladimir Putin's government because of its support for Ukrainian rebels, who are believed to have fired the missile that brought down Malaysia Airlines Flight 17, killing all 298 people on board.

Many of the existing arms deals are the product of a brief period between 2010 and 2012, when Russia sought Western help in modernizing its military, said Guy Anderson, a senior principal analyst for aerospace, defence and security at IHS Jane's. Putin reversed that strategy in 2012, when he decided that Russia should be self-sufficient once more and ordered the military to stop buying Western materiel.

"Russia's reason for doing this was security," Anderson said. "You could probably argue they saw something like this coming."

The Jane's analysis shows that Russia wasn't even among the world's top 10 defence importers last year — though it was the No. 2 exporter behind the United States.

There are no EU countries among the top 10 buyers of Russian military material.

While Russia hasn't bought much strictly military equipment, it purchases a considerable amount of dual-use technology such as engines that can be used in both civilian and military vehicles, said Trevor Taylor, a professorial fellow at the Royal United Services Institute.

The IHS Jane's analysis covers only equipment with a purely military function. It also excludes weapons under 57 mm calibre or sub-components.

The European Union, in a discussion paper on possible actions against Russia, suggested that banning shipments of dual-use goods to military users and companies that operate in both the military and civilian sectors could be an "effective and targeted measure." EU exports to Russia in this category total about 4 billion euros, or 20 per cent of dual-use exports to the country, according to the paper.

Russia is decreasing imports at a time when it is increasing military spending. The country's defence budget, the world's third-biggest behind the U.S. and China, is set to jump by more than 40 per cent to $98 billion by 2016, according to IHS Jane's.

When the Russian economy collapsed following the breakup of the Soviet Union, military budgets fell as well. In recent years, Moscow launched a desperate bid to revive its defence industries and embarked on a massive re-armament program designed to totally re-equip its forces by 2023.

The Russians were obsessive in their drive to go it alone, with the military barred from importing weapons, or even the equipment used to make them, unless absolutely nothing at home was suitable, Anderson said.

"It got down to the level of machine tools," he said. "Even the lathes have to be Russian."

In some ways, Putin's decision is a return to the situation during the Cold War, when the Soviet Union was barred from doing business with Western defence contractors.

After the collapse of communism, Western governments decided that Russia should become a partner in controlling arms exports around the world, rather than a subject of those controls.

A U.K. parliamentary committee last week questioned why British companies were being permitted to sell 132 million pounds ($224 million) of military equipment, including components for anti-aircraft guns, to Russia. The government said it would examine the deals but that many were for legitimate, non-military uses.

Yet among the military contracts, France's carrier deal stands out. France was able to capitalize on the brief opening of the Russian market by signing a 1.2 billion euro contract for the two Mistral class helicopter carriers, securing jobs for hundreds of workers in its struggling shipyards.

British Prime Minister David Cameron has pressed the French to rethink the deal, saying it would be "unthinkable" for his country to fulfil such a contract given events in Ukraine.

"It's very difficult for France," Taylor said. "When they sighted this deal, no one was envisioning the situation in the Ukraine. That was not on the risk register for sure."

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