Interview with Director of the FSMTC of Russia
Golos Rossii (Voice of Russia) Radio

Guest of the program – Mikhail Arkadievich Dmitriev, Director, Federal Service for Military-Technical Cooperation
Host – Igor Panarin

Panarin: Hello! We've got a very interesting and important for Russia topic. It is about military-technical cooperation. My guest is Mr. Mikhail A. Dmitriev, Director of the Federal Service for Military-Technical Cooperation. Hello, Mikhail Arkadievich.

Dmitriev: Hello.

Panarin: The topic is rather complicated, interesting and unclear for many people. How does Russia carry out military-technical cooperation? Are there many countries participating in this process with us? To what extent has it been intensive for the last years?
I would like to inform our radio listeners that you have been heading the process of Russia's military-technical cooperation for about 10 years, haven't you?

Dmitriev: Yes, I have. Exactly. For 10 years.

Panarin: What's the progress in this process for these years? What promising areas can you define? There is a bunch of questions.
Dmitriev: Right you are. We have been experienced positive dynamic development for these 10 years and we continue to move forward. Ten years is the reference point when we started working in the field of military-technical cooperation in a different way when the only one state broker was established (before that there were a few brokers and waste confusion) – the Committee for Military-Technical Cooperation.

Panarin: You mean that was a fundamental element? Legal department?

Dmitriev: Yes, it was.

Panarin: And did you head it on the spot?

Dmitriev: We have been working according to the required standard for all 10 years. In the Soviet words, we have been exceeding the plan for all this time. In fact we've got the plan, approved by the President and we are to fulfill it. Last year this plan was 9,5 billion US dollars – this is the export volume. The final amount was 10 billion 400 million US dollars last year.

Panarin: Does it mean that the President's plan is overfulfilled by 900 million US dollars?

Dmitriev: Yes, it does. This shows that the system which was set 10 years ago is effective at this stage.

Panarin: Mikhail Arkadievich, this effective system involves personnel, the team. What is the team you are heading?
Dmitriev: The backbone includes the very persons who worked in the Soviet Union and worked for various organizations related to military-technical cooperation in the 90s. They constitute the core of our principal company (Rosoboronexport) and the core of our organization – which is now the Federal Service for Military-Technical Cooperation.

Some of them work for other companies and enterprises which are also empowered to work in the external market. There are more than 20 such large enterprises. They are entitled to trade in spare parts and logistics support for our materiel supplied earlier. This is a great triangle. Lots of people and enterprises of the military-industrial complex are engaged in this area. We work together and fulfill assigned tasks.

Panarin: Mikhail Arkadievich, you mentioned the triangle. Which world regions are of top priority for this triangle regarding military-technical cooperation in the 00s?

Dmitriev: As for geography we managed to diversify it. Before that we concentrated our efforts narrowly on APR.
Panarin: That is Asian and Pacific Region.

Dmitriev: And two countries prevailed – India and China. More than 80 per cent of Russia's exports came to those countries.
Panarin: That means that 20 per cent fall to other countries, doesn't it?

Dmitriev: Yes it does. That's right. Now we have a wider variety. Asian and Pacific Region continues to remain one of the pivotal regions but it became more diverse. We are now working with a number of countries within this region.
Panarin: In particular?

Dmitriev: Vietnam, for example.

Panarin: Yes. It is our strategic ally.

Dmitriev: We have very considerable progress in military-technical field with this country, meaningful programs. We've been cooperating with Myanmar during recent years.

Panarin: This is former Burma.

Dmitriev: The second position goes to the Middle East and North Africa.

Panarin: It's "hot" there in the political sense.

Dmitriev: We don't think this fact will affect our interaction greatly. We suppose that the situation will get stable in future.
As for the things you are talking about. The UN Security Council adopted a resolution, there has been a decree by the President recently. That is why as far as Libya is concerned we strictly comply with the international obligation taken. The supplies have been stopped and cooperation has been suspended.

Panarin: Till the moment the international community settles this difficult situation?

Dmitriev: Without any doubt. From geographic point of view we also can count on Latin America now.

Panatin: What countries?

Dmitriev: Generally Venezuela.

Panarin: So this is so to say our military-technical beachhead, isn't it?

Dmitriev: Not quite a beachhead but now according to all the rules rather proactive military-technical interaction with this country is under way. I'd like to stress once again that we strictly observe all the international obligations taken and those conditions all countries undertook to comply with within the framework of international control regimes.

Panarin: Does this mean that we act strictly within the framework of the international agreements?

Dmitriev: Yes, it does, we have never violated anything, and the entire world is aware of it. International organizations have never had any issues with us. Panarin: Are we transparent in this respect?

Dmitriev: Certainly we are. We don't conceal anything, everything is absolutely transparent.

Panarin: If we take a look at the Russian defense complex, what are its prospects in general? Is military-technical cooperation developing dynamically? Looking into the year 2020 what products can we offer for the world market?

Dmitriev: We consider this process in the light of our arms export. We have our own ideas and share them with our associates from military-industrial complex. More profound activities have to be performed in the markets, we have to develop new high-tech products.
Panarin: What do you mean when speaking about new products?

Dmitriev: We need new developments, new super technologies in all areas: Air Force, Navy, Land Forces, Air Defence Systems.
Panarin: Are we world leaders in air defense? Can we speak about Russia in general as world leader in science technology, developments and security systems?

Dmitriev: I assume that we may be quite confident to state that we are leaders in those spheres. But we are not the only one; there is a number of other well-known countries. Our air defense systems are very much sought for. To put it simply there is a queue for them. The air defence corporation is overloaded with orders and that is why we cannot fulfill them quickly. There should be further development of manufacturing facilities, expansion of working areas. We continue to take orders but ones for the years 2014-2017.We enjoy long-term prospects.

Panarin: Besides air defense, what other areas are we dominating in?

Dmitriev: Actually we dominate in all areas, in various aspects. The entire military-industrial complex and military-technical cooperation are high-tech fields. And Russia takes advanced stands in it.

Panarin: Let us pass from advanced technologies to Russia's economy. Our President has set a course for innovative development of our economy as a whole. To what extent can our military-industrial complex assist economy in innovative moving forward, in modernization?
Dmitriev: We and our high-ranking economic leaders from the Ministry of Industry of Russia consider that it is really so. With the help of military-industrial complex we can easily and quickly reach the process of modernization, innovation, that process mentioned by the President. In our view we can understand that it will be more difficult for us to compete in the markets without further modernization, upgrade of our military-industrial complex.

Competition is very strong and always increasing. This happens not only because of new stakeholders (although this has an effect as well) but also because of the countries which are traditional arms suppliers, build up their production capacities and move forward too. We constantly feel an impact of competition and it is getting more and more aggressive.

Panarin: Competition is a natural process. Can we have a look into the year 2020 and despite enhanced competition, improved position of other stakeholders in this market declare that we will preserve our stands within first three world leaders?
Dmitriev: I believe it. We occupy our position. The Soviet Union established it.

Panarin: What is the point?

Dmitriev: Many countries got used to our arms. They like these simple, rather cheap and high-quality weapons.
Panarin: You mean that just these three components are advantageous, don't you?
Dmitriev: Yes. They are essential and it is important not to lose them. I am sure that we will move forward. The results of the recent years, by the way, testify to this fact.

Panarin: Approximately starting from 2008?

Dmitriev: Yes, 2008-2010. Even recession years didn't give a strong impact on this area. Even if the global crisis touched upon this field the influence was not significant. The volumes are augmenting. We have the plan for 2011 approved by the President – 11 billion 600 million US dollars. So again this shows a dramatic step forward. Our portfolio of orders enables us to do it. It is very formidable now – 48,5 billion US dollars. I mean contracts already signed. We undertook to implement them due to international obligations.

Panarin: Does it mean that the order sum for 2011 is 5 times more than one for 2010?

Dmitriev: Yes it does. In other words our portfolio expands every year. Last year we signed contracts for a sum of 16 billion US dollars.

Panarin: 16 billion dollars worth contracts and the regions you noted – Asian and Pacific Region, the Middle East, the Latin America. What rate out of this amount goes to the Asian and Pacific Region?

Dmitriev: Our prime partner there is certainly India. Besides, there is Algeria, and Venezuela, and China.

Panarin: When will Europe, not only Western but, for instance, such countries as Italy, France, Germany start purchasing our arms?
Dmitriev: Europe is not something closed. We hold Intergovernmental Commissions with European countries. There are very promising topics on the agenda. We are developing cooperation with Italy, France, Germany, the UK. We've got a number of very diverse topics. Perhaps they are not so large-scaled but they reflect high-technology in this field.

Panarin: This means that such cooperation is being carried out, but not so intensively, doesn't it?

Dmitriev: It doesn't simply give tangible and sound results, but the cooperation is on, it is developing and expanding. The results may appear in the forthcoming years.

Panarin: As for the leading country dealing with arms trade, is it still the USA?

Dmitriev: Yes it is.

Panarin: How far does it surpass us?

Dmitriev: We are not in competition with the USA in this field. There is different statistics. The Stockholm Institute considers one thing. The UK, for example, considers on the contrary. They outstrip us greatly.

Panarin: According to experts what is their approximate volume? Ours is, for instance, 10 billion US dollars. And we have exceeded the amount planned.

Dmitriev: Ten billion for them is insufficient, of course. Their plan is about USD 20-24 bln.

Panarin: Does the USA tend to increase or lock in the volume?

Dmitriev: They try to lock in and increase it, to have a grow. I am afraid to be mistaken about figures, that is why I am just speaking of the trend itself.

Panarin: What other players are there in this market except the USA?

Dmitriev: France, the UK, Sweden.

Panarin: And even Sweden?

Dmitriev: That is for sure, they have aircraft and other systems. There is a wide range of countries. There are our former republics as well.

Panarin: They are likely to be dumping too, aren't they?

Dmitriev: I would not say so. Practically they are present at the markets with our former Soviet arms, prices and order terms. Sometimes they do better than we, sometimes not. But I do not consider it as competition. It is a certain competitive process. We can always come to an agreement with them. We have friendly relations.

Panarin: At least, there were no conflicting situations during the 00s. Is it really so?

Dmitriev: Yes, it is.

Panarin: It seems that the Ukraine possesses the most powerful defense complex, doesn't it?

Dmitriev: Sure, the Ukraine and Belarus. They are very essential players at these markets.

Panarin: Do they assist us from time to time?

Dmitriev: We have signed the Agreement on interaction in the third countries' markets, which is of prime importance. We hold meetings with them, work, and conduct Intergovernmental Groups, Commissions.

Panarin: What are the prospects till the year 2020? Name some major projects. You have already spoken of order portfolio.

Dmitriev: They are well-known and everybody is aware of them. They is the Fifth Generation Aircraft Project, a very meaningful project with India. It is a very crucial joint project. There is also a second project.

Panarin: And what does it mean – the fifth generation aircraft? Could you explain it to our radio listeners?

Dmitrev: It is not our definition. Our technical specialists elaborated it.

Panarin: What is the difference from the previous, the forth generation one?

Dmitriev: The difference is in a number of characteristics. You should ask specialists about it. It boasts quite different performances so we can speak about a totally new aircraft, and not of an upgraded old one.

Panarin: This is a keynote joint project with India, isn't it?

Dmitriev: There are other projects with India, for example, Admiral Gorshkov Aircraft Carrier Project. Unfortunately, the project faced a delay due to objective reasons but it is close to an end now. There is also a very critical project with India – a multipurpose transport aircraft. We have set it into motion already.

Panarin: Why do we have such an intensive cooperation with India?

Dmitriev: Because we have old strategic partnership ties.

Panarin: Any other countries except India?

Dmitriev: We have major projects with other countries, for instance, with Vietnam, the People's Republic of China. They are just at the initial, advisory stage.

Panarin: As for advisory stage… You said the order portfolio was about USD 48 bln.

Dmitriev: USD 48,5 bln.

Panarin: In respect to perspective contracts to be signed, what amounts can be outlined at the initial phase?

Dmitriev: There are approximate calculations. We don not look for significant amounts, we have a different mission. It is necessary to work properly at those markets we are present regarding maintenance, deliveries of spare parts, access to joint developments, the set up of various joint centers. The Soviet Union in its time supplied the products for a sum up to USD 30 bln.
Panarin: When will we reach this figure?

Dmitriev: We do not need it for the time being, but I'm sure that the trend will remain upward till 2020. The President's Modernization Program will be carried out.

Panarin: Given progressive movement (the President has raised the order by USD 2 bln. for the year 2011) can we state that we will reach USD 20 bln. by 2020?

Dmitriev: I am sure that if such task is given to us, we, of course, will reach that sum, simply the requirements will be a bit different.

Panarin: Can Russia be confident about the future of military-technical cooperation? Can the potential accumulated during 2000s allow us to gain top positions? We are likely to make a step forward and these tendencies will be locked in by 2020, aren't we?

Dmitriev: I can answer this question in the affirmative. Russia can not only expect it, but we do have everything for it.

Panarin: Dear radio listeners, given this optimistic tone let me conclude the dialogue with Mikhail Arkadievich Dmitriev, chief initiator of military-technical cooperation.

The main conclusion of our dialogue is the following. In the 2000s Russia developed its military-technical capabilities dynamically and positively. The plan for 2010, assigned by the President is overfulfilled. The portfolio of orders already signed (which is enormous – USD 48,5 bln.) allows us to declare that there will be dynamic development by 2020. The military-industrial complex will help our economy to develop positively towards innovations and modernization.
Good-bye, dear radio listeners!

Dmitriev: Thank you. Good-bye!

Date of publication: 29.04.2011




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