U.S. Congressional Research Service Report on Russia's Place on Arms Market

Konstantin MAKIENKO

On August 16, 2001, the U.S. Congressional Re­search Service of the U.S. Congress Li­brary pub­lished a re­port by Richard F. Grimmett: “Conventional Arms Transfers to Developing Nations, 1993-2000”. Such reports are published annually and analyze arms deliveries and new agreements for a period of eight years with a special emphasis on the last year under review. Thus, the report released on August 16 con­tained information on 1993-2000 and paid special at­tention to the year 2000.

2001 report on Russia

The report claims that in 2000 Russia ranked second in volume of arms transfer agreements ha­ving signed such agre­ements with developing na­tions for $7.4 billion (29.1% of the world's arms agreements with this group of countries), while its transfer agreements with all countries (devel­oping and developed) to­taled $7.7 billion. Hence, over 96% of the agreements it concluded in 2000, were with de­veloping countries. In 1999 the contracts devel­oping countries placed in Russia amounted to $3.2 bil­lion, which means that in 2000 volumes sky­rocketed. However, in actual arms deliveries, Russia ranked third after the United States and Britain, having transferred weaponry for $2.4 bil­lion to developing countries.

The report lists that in 2000 Russia signed a $500 mil­lion agreement for Pantsir-S-1 (SA-19) surface-to-air missile system with the United Arab Emirates, an over $3 billion license agree­ment with India for the production of 140 Su-30MKI fighters, a $700 million deal for the de­livery and licensed production of 310 T-90 main battle tanks, and an agreement on the repairs and transfer of the aircraft-carrying cruiser Ad­miral Gorshkov (Kiev class) with India.

Richard Grimmett also described Russia's mili­tary-technical cooperation with China. He claimed that by 1996 Russia had sold China "at least" 72 Su-27 (Flanker) fighters and four submarines of the Kilo class. Besides, it signed an agreement on the produc­tion of 200 Su-27 fighters under license and sold two destroyers of the Sovremenny class. In 1999 China re­portedly imported "40 to 60 Su-30 multirole fighters" for $2 billion from Russia. At the end of 2000 Russia and China reportedly signed a $1 billion agreement on four AWACS aircraft.

In 1997-2000 Russia became a leader on the market in Asia and the Pacific Rim winning 40.7% of all con­tracts placed by countries of the region thanks mainly to aircraft deals with India and China. During the same pe­riod it ranked third in South America after the United States and France in agreement vol­umes con­trolling 5.8% of the market. In Africa Russia held the lead in 1993-1996 with 26.1% of the market but in 1997-2000 did not make it even to the top three, letting ahead Ger­many that won major contracts for deliveries of naval weaponry to South Africa, China and West European countries as a group.

On the whole the dy­namics of Russian deliv­eries and contracts as de­scribed by Richard Grim­mett in the report for 2000 are summed up in Table 1.

Critical analysis of reported data

The integral volumes of Russian arms exports in the report are close to those announced offi­cially. How­ever, a more detailed analysis demonstrates significant differences between Grimmett's estimates and official Russian statis­tics, which are the most reliable source of informa­tion. The differences are as follows:

1. The estimated volume of Russian deliveries stated in the report ($3,500 million) is only a little below the officially announced figure of $3,680 million. However, the differences in the distribution of deliveries by region are considerable. According to the report, the share of developing countries in 2000 was 68.8% of total or $2,400 million while official Russian statistics say 74% of Russian arms exports went to Asia and Pacific rim countries alone (all of them with the exception of Japan are regarded as developing). Combined with the Middle East, South America and Africa the share of developing countries should consti­tute 80-85% of total Russian deliveries. This estimate is con­firmed by the fact that official reports say a lit­tle over 14% of total deliveries went to Europe (13.8% of them to Greece).

Table 1

Russian arms transfer agreements and deliveries in 1993-2000

Year	1993	1994	1995	1996	1997	1998	1999	2000	1993-2000
Agreements with devel­oping countries at cur­rent prices, mln USD	1,200	3,700	5,300	4,100	3,400	2,300	3,100	7,400	30,500
Agreements with devel­oping countries at constant 2000 prices, mln USD	1,420	4,283	6,013	4,554	3,695	2,444	3,223	7,400	33,032
Agreements with devel­oping countries at cur­rent prices, mln USD	2,100	1,400	2,700	2,200	2,200	2,000	2,300	2,400	17,300
Agreements with devel­oping countries at constant 2000 prices, mln USD	2,485	2,431	1,588	2,443	2,391	2,126	2,392	2,400	18,256
Russia’s share in world agreements with devel­oping countries, %	5.08	16.68	29.96	20.03	20.66	13.88	13.64	29.09
Russia’s share in world deliveries to developing countries, %	10.8	7.41	10.55	8.65	7.14	7.86	9.13	12.38
Agreements with all countries at current prices, mln USD	2,400	4,000	7,500	4,600	3,600	2,600	3,900	7,700	36,300
Agreements with all countries at constant 2000 prices, mln USD	2,840	4,631	8,509	5,109	3,913	2,763	4,055	7,700	39,520
Russia’s share in agree­ments with all coun­tries, %	6.90	12.74	28.33	14.67	16.13	9.21	11.93	20.89
Deliveries to all coun­tries at current prices, mln USD	3,400	1,700	3,500	3,100	2,600	2,200	3,100	3,500	23,100
Deliveries to all coun­tries at constant 2000 prices, mln USD	4,024	1,968	3,971	3,443	2,826	2,338	3,223	3,500	25,292
Russia’s share in deliveries to all countries, %	10.57	5.77	9.72	8.65	6.25	6.06	8.49	11.91

Source: Richard F. Grimmett, "Conventional Arms Transfers to Developing Nations, 1993-2000", Congressional Research Service, The Library of US Congress, 2001

Table 2

Regional structure of Russian arms transfer agreements with developing countries

Region	Asia-Pacific rim		Middle East		South America		Africa
	1993-96	1997-00	1993-96	1997-00	1993-96	1997-00	1993-96	1997-00
Russian agreements with developing countries at current prices, mln USD	10,700	12, 400	2,500	2,600	400	200	700	1,000
Share of region in Rus­sia’s agreements with developing countries, %	74.83	76.54	17.48	16.05	2.8	1.23	4.9	6.17
Russia’s share in arms agreements with region, %	35.27	40.68	5.44	6.78	7.70	5.79	26.12	11.24
Russian deliveries at current prices, mln USD	4,500	5,300	3,100	2,400	300	300	600	800
Share of region in Rus­sia’s overall deliveries, %	52.94	60.23	36.47	27.27	3.53	3.41	7.06	9.09
Russia’s share in overall deliveries to region, %	17.92	14.64	6.37	4.16	5.88	8.61	18.00	24.34

Source: Richard F. Grimmett, "Conventional Arms Transfers to Developing Nations, 1993-2000", Congressional Research Service, The Library of US Congress, 2001

The report contains especially many details about arms delivery contracts with countries in the Mid­dle East. The volumes of the Russian contracts and deliveries to the region are given in Table 3.

Table 3

Prices of Russian arms transfer agreements and deliveries to the Middle East in current prices, mln USD

Country	1993-1996		1997-2000
	Agreements	Deliveries	Agreements	Deliveries
Algeria	400	300	700	500
Egypt	700	200		300
Iran	200	1,300	300	800
Kuwait	800	800
Syria	100	100	300	300
United Arab Emirates	300	300	800	400
Jordan			300

Source: Richard F. Grimmett, "Conventional Arms Transfers to Developing Nations, 1993-2000", Congressional Research Service, The Library of US Congress, 2001

Table 4

Russian arms deliveries by category and region

Category	Total	Asia-Pacific rim	Middle East	South America	Africa
1993-1996
Tanks, SP guns	240	10	120	40	70
Artillery systems	490	380	40	40	30
Combat vehicles	1,400	40	740	120	500
Heavy ships	0	0	0	0	0
Small craft	13	11	0	2	0
Guided missile boats	0	0	0	0	0
Submarines	3	2	1	0	0
Supersonic aircraft	70	60	0	10	0
Subsonic aircraft	0	0	0	0	0
Other aircraft	30	0	20	10	0
Helicopters	230	80	70	30	50
Anti-aircraft missiles	1,670	690	160	820	0
Surface-to-surface missiles	0	0	0	0	0
Anti-ship missiles	30	10	20	0	0
1997-2000
Tanks, SP guns	430	30	350	0	50
Artillery systems	200	0	20	0	180
Combat vehicles	780	70	600	30	80
Heavy ships	1	1	0	0	0
Small craft	5	5	0	0	0
Guided missile boats	0	0	0	0	0
Submarines	5	4	1	0	0
Supersonic aircraft	140	80	20	0	40
Subsonic aircraft	0	0	0	0	0
Other aircraft	30	0	10	20	0
Helicopters	200	70	50	60	20
Anti-aircraft missiles	1,120	1,120	0	0	0
Surface-to-surface missiles	0	0	0	0	0
Anti-ship missiles	90	90	0	0	0

Source: Richard F. Grimmett, "Conventional Arms Transfers to Developing Nations, 1993-2000", Congressional Research Service, The Library of US Congress, 2001

2. The estimated price of Russia's 2000 contracts seems grossly exaggerated. The congressional report says that Russia signed transfer agree­ments for $7.7 billion. Russia does not have a practice of publishing official reports on the price of contracts signed, therefore only non­governmental estimates may be used. CAST evaluates the price of identified contracts of Ro­soboronexport arms trader at about $4.5 billion. To them we should add a $720 million contract between the Instrument Building Design Bureau and the United Arab Emirates and a $300 mil­lion deal between Antey Concern and Greece. Thus, on the basis of the open press, CAST has identified contracts worth a little over $5.5 bil­lion.

3. Several contracts mentioned in the report were not signed at all, some others were con­cluded after 2000. Thus the contract for the de­livery and licensed production of 310 T-90S tanks with India (estimated at $700 million in the report) was signed in February 2001. The contract for delivering and refurbishing the air­craft-carrying cruiser Admiral Gorshkov has not been signed to this day. Neither did the Russian open press carry any information about a $1 bil­lion contract with China on the delivery of four AWACS aircraft. Such disparity may be ac­counted to the fact that Richard Grimmett took into account the prices of all preliminary under­standings which is confirmed by his use of the term transfer agreements instead of contracts ir­respective of whether actual contracts had been signed or not.

4. There is no confirmation by a single Russian source that Russia delivered 72 Su-27 fighters to China prior to  1996. In contrast,   Russia  is known to have transferred to China 48 fighters in batches of 26 and 22 units in 1992-1996.

5. Several prices of arms contracts and deliveries to the Middle East in the report seem greatly exaggerated. For instance, the report claims that in 1997-2000 Russian deliveries to Iran were worth $800 million and the price of con­tracts for the same period $300 million. How­ever, after Russia delivered the third submarine of the 877EKM project (Kilo class) in Decem­ber 1996, it did not supply Iran with big arms systems, merely spare parts and accompanying equipment. In keeping with the Gore-Cherno­myrdin agreement Russia did not sign new arms contracts with Iran either. Thus both figures seem grossly exaggerated. Another example of the kind is the claim that in 1993-1996 Russia and Egypt signed an agreement on deliveries worth $700 million. The Russian press did not report any contracts with Egypt during that pe­riod. Later in 1999 or 2000 Russia did sign a $130-150 million contract with Egypt on up­grading S-125 Pechora-2 (SA-N-1 Goa) short-range surface-to-air missile system, but the agreement is not mentioned in Grimmett's analysis at all (the price of arms agreements with Egypt for 1997-2000 is estimated at 0 USD).

For the sake of a deeper analysis of the reliabil­ity of the figures from the report, let's compare the Congressional report with the Russian sta­tistics on two market segments: deliveries of Russian warships and supersonic aircraft (Tables 5 and 6). By Russian statistics we under­stand official figures submitted to the U.N. Register and also information from nongovern­mental sources collected in the open press.

Table 5

Comparison of official Russian statistics and Congressional report on warships

Category	Total		Asia-Pacific rim		Middle East		South America
1993-1996	Report	Official figures	Report	Official figures	Report	Official figures	Report	Official figures
Heavy ships	0	0	0	0	0	0	0	0
Small craft	13	0	11	0	0	0	2	0
Guided missile boats	0	2	0	2	0	0	0	0
Submarines	3	5	2	3	1	2	0	0
1997-2000
Heavy ships	1	2	1	2	0	0	0	0
Small craft	5	0	5		0	0	0	0
Guided missile boats	0	2	0	2	0	0	0	0
Submarines	5	3	4	3	1	0	0	0

Table 6

Comparison of official Russian statistics and Congressional report on supersonic fighters

Category	Total		Asia-Pacific Rim		Middle East		South America		Africa
1993-1996	Report	Official figures	Report	Official figures	Report	Official figures	Report	Official figures	Report	Official figures
Supersonic aircraft	70	68	60	68	10	0	0	0	10	0
1997-2000
Supersonic aircraft	140	95	80	60	20	10-14			40	21

It follows from Table 5 that the report accu­rately estimates the number of submarines trans­ferred by Russia: 8 in eight years. The differ­ence in the number of transferred heavy ships (one in the re­port and two in the official statis­tics) may be ac­counted for by the fact that the second destroyer of project 956E (Sovremenny Class) was formally transferred to the Chinese side in December 2000 and registered by Rus­sian official statistics, but ar­rived in China in 2001. The biggest differences con­cern the num­ber of small craft (none according to Russian statistics and 18 according to the report). Even if we assume that the report accounted the guided missile boats of project 1241RE delivered to Vietnam as small craft instead of guided missile boats the discrepancy still re­mains too great.

In the segment of supersonic fighters the figures in the report are in great contrast with Russian official figures submitted to the U.N. Register on deliveries to the Middle East and Africa in 1993-1996. For the period 1997-200 the maxi­mum differences con­cern deliveries to Africa.

The discrepancy in deliveries to Asia and Pa­cific Rim countries may stem from the fact that Russia does not report to the U.N. Register the transfer of kits for the licensed assembly of Su-27SK air supe­riority fighter in China. If we as­sume that in recent times 15 kits were trans­ferred to China, Russian official statistics and figures from the report on deliveries to Asia and Pacific will virtually coincide.

Thus on the whole the difference between the estimates in the report and the official statistics may be considered permissible and acceptable. However, the absence of information about the technique of calculating delivery and contract prices used for compiling the report, the absence of mention of sources of information and the evident discrepancy between the report and available open information on a number of re­gions prevent us from describing the report of Congressional Research Service as a fully reli­able source of information or accurate evalua­tion of Russia's position on the international arms market.