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Tuesday, March 28, 2006

Oil revenues invigorate Russian military

After a precipitous slump in financing, arms purchases, personnel and morale following the 1991 collapse of communism, since 1996 the Russian Armed Forces have been steadily improving, thanks in part to Russia's surging oil revenues.

During an interview Sunday with Russia's state TV channel RTR, Russian Defense Minister Sergei Ivanov, who is also a deputy prime minister, said, "We have already defined the quantity and the types of aircraft and other combat hardware, which we need to produce. Now it is important for our defense enterprises to fulfill state orders qualitatively and on time, and at prices lower than their managers would like to see."

Ivanov noted, however, that Russian military procurement had changed since Soviet times and that while many defense enterprise chiefs still hoped to receive large state defense orders, Russia's new market economy meant defense producers should look beyond government orders and subsidies.

"They must constantly look for other orders and seek the development of high-tech production," Ivanov said, adding that while many defense enterprises produced quality ships, missiles and space vehicles, they lagged behind foreign competitors in the production of high-tech civilian products.

Russian Federal Service for Military-Technical Cooperation Mikhail Dmitriyev said last month that Russian arms exports reached a record $6.12 billion in 2005.

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