By ensuring the sale of aims, Russian govemment is addressing several issues. First of all, a huge sector of industry which began its demise during the times of perestroika is being brought back to its feet, "the Army and Navy are being re-armed, and money for the social sphere is being found," declared the prime minister.
Many steps to invigorate arms sales, supervised by Deputy Prime Minister llya Klebanov, have been taken. Several new appointments, which influence arms sales, have been carried out on his initiative. For instance, the former head of the State Rosvooruzheniye (Russian Armaments) Company (RV), Grigory Rapota, has been appointed Deputy Trade Minister and Alexander Kotelkin, formerly a top executive of RV has been re-hired and appointed chief marketing consultant of RV, In order to streamline arms sales and exclude unnecessary competition, Klebanov has set up a special consortium of representatives from the Ministries of Trade, Foreign Affairs and Defence. Its main function will be to decide who will be operating on specific areas of the Russian arms market. In the past month, Klebanov has travelled to Libya and India and he has thrashed out questions related to contracts worth several billion dollars with representatives from Turkey and China.
Immediately after these visits and meetings, government officials were informed that in January and the beginning of February 2000, Rosvooruzheniye was to sign new contracts totalling between $2 billion and $2.5 billion and the overall portfolio of the company could reach $10.5 billion by the end of the year. Earlier indications estimated contracts not to exceed $8 billion.
Although the exact content of these new contracts has not been disclosed, unofficial sources indicate that these deals include the production and sale of almost 300 T-90C tanks to India, as well as the manufacture of B-31 diesel engines for these tanks on its home soil. India is said to be considering the possibility of purchasing Russian sea-based helicopters, new modifi- cations of the "Kilo" and "Amur" submarines, C-300PMU missile air-defence systems, "Smerch" (Tornado) multiple rocket launchers, Mi-35 attack helicopters and other military hardware.
A contract with Turkey for the production of more than 150 two-seater Ka-52 "Black Shark" combat helicopters worth $3 billion to $4 billion is also speculated. An agreement has been reached to supply $500 million worth of Russian air defence systems annually to "Libya. China will soon receive two Russian-built destroyers of the 956E design and a missile armed cutter "Molniya" (Lightning) of the 12421 design armed with "Mosquito" class missiles. Thus, the government's strategic economic policy has been defined. At first glance, concrete steps seem to reaffirm this policy. Consider, for instance, the defence component of the 2000 budget. Discussions about the budget at its second reading in the lower house on November 5, indicate that Putin yielded to the majority of Duma deputies who proposed, after its first reading, to substantially boost funding for the military-industrial complex. Military expenditures in the draft budget have been increased by more than 15 per cent and have already reached 140.8 billion roubles. The majority of the increase (18 billion of 21.5 billion roubles) has been earmarked for financing the largest number of defence contracts in the post-Soviet period - nearly 40 per cent of military spending.
However, the activation of MIG enterprises to produce weapons for export does not guarantee that profits will be funnelled towards the development of arms production or perfecting and renewing Russian arms in necessary quanti- ties. The increase in military spending in the 2000 budget amounts to only 2.76 per cent of the country's planned GDP. This is considerably less than the required index (i.e. 3.5 per cent of the GDP) as defined in a decree signed by the President of Russia. Addressing a press conference at the Russian Defence Ministry on Sep. 28, 1999, the Chief of Armaments of Russia's Armed Forces, Col. General Anatoly Sitnov explained that even if 3.5 per cent of the GDP was earmarked for defence purposes, the trend towards declining technical readiness and aging arms and military equipment would continue.
Михаил Сергеев 
Дарья Гармоненко 