Main Image Credit Finishing touches: a military helicopter is assembled at a Motor Sich factory in Ukraine. Image: Ukrinform / Alamy
Russia’s arms sales remain a critical component of its economy. With the West’s help, Ukraine could work to displace Moscow in key markets, thus weakening its global influence.
Despite the fact that Ukraine has recently begun to receive significant amounts of foreign weapons and military equipment, post-Soviet systems still make up the bulk of the capabilities of the Armed Forces of Ukraine (AFU). Before the invasion, the AFU had about 1,000 tanks, more than 1,000 units of barrel artillery, more than 1,000 MLRS systems, and hundreds of air defence complexes. For a long time, as a part of their military-technical assistance, Ukraine's partners also transferred Soviet systems that were in service with former members of the Warsaw bloc or were purchased from other operators.
According to plans for the future development of the AFU, it should be equipped with more modern weapons according to NATO standards. However, in the short and even medium term, the issue of using and maintaining the existing post-Soviet systems is acute. The Ukrainian defence industry possesses the necessary expertise for such maintenance and independently produces a significant number of post-Soviet systems and their components. However, it is not able to cover everything. Russia remains the only producer of a significant number of critically needed elements.
After the start of Russia’s full-scale invasion in 2022, Ukraine began the process of substituting Russian components and successfully mastered the production of many such elements – but again, not all. The need to provide ammunition, especially for artillery systems, MLRS and the S-300 and Buk air defence systems, is particularly critical. Ukraine's partners have already spent millions of dollars procuring munitions for Soviet systems, but this is becoming more and more difficult as the market is depleting and Russia is often the only supplier.
Unfortunately, the war may continue for some time, and this requires the presence of industrial capabilities that can sustain a high intensity of hostilities. In order to maintain the combat capability of the AFU, it will be necessary to quickly ensure the ability to produce ammunition and spare parts that are currently produced only in Russia. Ukraine has specialists who are well-versed in these systems, and often possesses the necessary technical documentation. Western defence companies have the necessary technologies and production base that can be used both for reengineering and for the production of improved analogues.
Undoubtedly, the main consumer of these products today will be the AFU. At the same time, after the end of the Russo-Ukrainian war, this cooperation could become an important tool of geopolitical influence and be used to displace Russia and China in the global market for post-Soviet weapons and military equipment. Despite the fact that this market is smaller than that of NATO countries, a Western presence is important for reducing the dependence of countries operating Soviet and post-Soviet systems on Russia and China, which use military-technical cooperation to influence the governments of such countries and their foreign policies. A vivid example of such influence is India, which has a significant amount of Soviet and Russian weapons and military equipment. As it is dependent on Russia for their maintenance, it is forced to reckon with Moscow in its foreign policy, which is noticeable in India's position regarding Russia’s aggression in Ukraine.
With the West’s cooperation, Ukraine could completely replace Russia in the market for maintenance and modernisation of Mil helicopters in two years
Replacing Russia in these markets is also important from the point of view of limiting opportunities for Moscow to receive significant financial resources, which may then be used to develop new models of Russian weapons. Weapons sales are an important part of Russia’s economy and constitute the third largest export after hydrocarbons and food. Over the past 20 years, Russia has sold $180 billion worth of arms, and it is the world's largest arms supplier after the US. In 2021, its share of the world market was 20%.
At the same time, for Russia, this is not just business, but also a means of geopolitical influence. Russia supplies weapons to dozens of countries; among its largest consumers are India, Algeria, Egypt and Vietnam. In addition, Russia is one of the main players in the market for cheap weapons – the so-called value market. Despite its small financial size, this market covers 112 countries. In exchange for selling even outdated weapons, Russia receives access to the resources of these countries, as well as the political loyalty of local governments. It is the sale of cheap weapons that allows Russia, which is weaker economically than China, the US and European countries, to maintain its influence in Sub-Saharan Africa, as well as to increase its influence in Latin America due to cooperation with not only its traditional allies of Cuba, Peru and Nicaragua, but also Venezuela, Bolivia and Ecuador, as well as such powerful economies as Brazil and Argentina. In addition, Russia is the largest supplier of weapons to Southeast Asia.
It is worth noting that the sanctions applied to the Russian defence industry have not been very effective, which has allowed Russia to sell weapons worth $8 billion in 2022 and to sign contracts for another $16 billion. The pace is definitely down, but still in line with previous years. Airplanes and helicopters made up about 40% of all exports, weapons for ground forces and navies about 30%, and air defence equipment more than a third. The total order portfolio of Rosoboronexport is more than $42 billion.
The share of sales and maintenance of aviation equipment in the total volume of Russian defence exports exceeds 50%, with a high specific share of helicopters. Russian-made helicopters make up 22% of the world fleet of military helicopters, 49% of heavy and 65% of medium civil helicopters. Over 8,000 Russian-made helicopters are used in more than 100 countries. Almost all of these helicopters are Mil (Mi) helicopters, of which 70% are different versions of the Mi-8/17 (which is the most widely used helicopter in the world); the rest are versions of the Mi-24. The main reason for their popularity is the relatively low cost of the helicopters themselves, their maintenance and the training of specialists, as well as the lack of need for specific infrastructure.
The main problem with Russian helicopters is their critical dependence on Ukrainian components, in particular, on engines produced by the Ukrainian plant Motor Sich, which was recently nationalised by the Ukrainian government. Despite Russia’s efforts, it has not been possible to establish its own production of high-quality analogues. Ukraine is also Russia's main competitor in the market for maintenance and modernisation of the entire range of Mil helicopters. Ukraine has the necessary specialists, technical documentation and reputation in the market, and – despite Russia’s aggression – the government has managed to preserve its production base. With the West’s cooperation, Ukraine could completely replace Russia in the market for maintenance and modernisation of such helicopters in two years. Western companies could supply blades, avionics, radars, fire control systems, weapons, MANPADS protection and other hi-tech components. In addition, Ukraine, in cooperation with Western companies, could establish joint production of new helicopters, which would be direct competitors of the Mil range. These new helicopters would remain cheap and flexible, but due to Western technologies, they would exceed Russian helicopters in terms of their technical characteristics. This could include the development of one universal helicopter (similar to the Mi-8/17) and one attack helicopter (similar to the Mi-24).
Russia’s aggression in Ukraine has proved the importance of artillery and missile forces, as well as the need for large reserves of ammunition for them
Ukraine is also Russia’s main competitor in the market for maintenance and modernisation of armoured vehicles: tanks, infantry fighting vehicles and armoured personnel carriers. Post-Soviet armoured vehicles are operated by a wide range of countries, with the most important customers being India, Pakistan, Egypt, Vietnam, Iraq and Algeria. The annual market for Russian armoured vehicles is $5 billion, of which about half consists of maintenance and modernisation. At the same time, Ukraine is also a competitor of Russia in the market for new tanks and armoured personnel carriers. Cooperation with Western companies in this area may include the use of Western engines, optics, electronics, active armour and tank barrels. Joint production of modernised versions of Ukrainian tanks such as the T-64, the BMP (for its chassis) and the BTR-3/4, as well as participation in joint developments, is also possible.
The annual market for Russian air defence systems is about $1 billion (more than half of which is maintenance). In connection with the emergence of technologically simple and extremely cheap long-range strike drones, the demand for modernised air defence systems and their associated ammunition will only grow. Russian air defence systems include various modifications of the S-300, Buk, Pantsyr, Kub and S-125, which are operated by dozens of countries. After 2014, Ukraine mastered the full cycle of maintenance of such systems, established its own production of some important spare parts, and also carried out effective modernisation of these systems, including through the use of Ukrainian radars, which in terms of their technical characteristics significantly exceed their Russian counterparts. In cooperation with Western partners, Ukraine could begin the production of missiles (which is especially important for the S-300 and Buk), carry out import substitution of important components that Ukraine has never been able to produce (for example, klystrons), and if necessary, organise the reengineering of these systems. For reengineering, Ukraine will first of all need a machine park, since a significant amount of technical documentation for these systems is available in Ukraine.
Russia’s aggression in Ukraine has proved the importance of artillery and missile forces, as well as the need for large reserves of ammunition for them. Ukraine's need for Soviet calibres for barrel artillery and MLRS remains high, and other operators of Soviet systems are also likely to build up their arsenals. Ukraine can be an effective partner in the production of projectiles of 152mm, 122mm and other calibres, as well as in the production of rockets for MLRS, including modernised ones. An example is the Ukrainian Vilha, which is a cheap and highly accurate modernised version of the Soviet Smerch MLRS (calibre 300mm). Western participation in this cooperation could include the production of rocket fuel (liquid and solid), explosives and electronics.
The most important contribution Western partners could make to displacing Russia from its traditional markets would be the reengineering of Russian spare parts or their replacement with analogues. Direct displacement would also require political tools (application of sanctions and incentives), as well as financial incentives in the form of loans to potential consumers. It is vital that Ukraine and the West cooperate to replace Russia in these markets because otherwise the gap will be filled by China, which remains Russia’s only natural competitor apart from Ukraine. In the future, Russia could be replaced not only in markets such as India and Egypt, but also in the former Soviet Republics.
The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.
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Oleksandr V Danylyuk
Associate Fellow - Expert in Russian multidimensional warfare