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The defence industry of Ukraine vs the defence industry of Russia: who will lose? 

The defence industry of Ukraine vs the defence industry of Russia: who will lose? 

Moscow is complaining that the Ukrainian “defence people,” starting March of the current year, have stopped supplying spare parts to the Russian weapon producers.

As the Deputy to the Defence Minister of the Russian Federation Yuriy Borisov noted, such a position of Ukraine “adds to Russia’s problems” in servicing the equipment engaged in defence, in particular, helicopters, the engines for which were produced in Ukraine. Meanwhile Borisov noted that the process of import replacement is underway in Russia.

As the Deputy to the Defence Minister noted, such a policy of Kyiv, according to which supplies to the Russian defence industry are banned, will first and foremost land a blow to the Ukrainian businesses, and the Russian businesses “will successfully overcome the challenge,” or so he says. “There is no critical situation,” he noted.

He was rigorously supported by the Vice Prime Minister of the Russian Federation Dmitry Rogozin, who immediately started whining that Russia cannot be dependent on Ukraine in regard to provisions of defence. “We have invested too much into the Ukrainian defence industry, when we start sorting it out we see that problems are arising even on the 3-4th levels of cooperation… We cannot afford to be dependent on a country that does not know what it wants: either a new Constitution, or marinated fish, and the new leadership of which is waging war against its own people,” he said.

…Let’s start with the main thing – the political sense of banning supplies of military-purpose goods to Russia. If Moscow is aware of examples in world history, when a country, which became the object of aggression and as a result of occupation was ridded of part of its territory, continues to arm its aggressor – we would like to ask them to list those examples. Au contraire, one doesn’t have to be a great foreign policy expert in order to understand that it is the continuation of such supplies that would provoke doubts regarding the adequacy of the leadership of the country, which became the object of aggression.

That the Kremlin is very skilled at turning everything upside down and calling black nothing other than white, the world is already used to. This is regarding Rogozin’s statement about Ukraine as “a country which does’t know what it wants.” As Ukraine today only wants one thing: for the aggressor, embodies by Russia, to tame its schizophrenic ambitions and return to the route of civilised politics.

However this is very improbable while the representatives of the Kremlin continue yammering that the destruction of terrorists and hired citizens of the Russian Federation is “a war against our own people.” Since when are Chechnya, Dagestan, Ingushetiya, as well as Abkhazia and Ossetia (both North and South) part of Ukraine, and the armed representatives of their population, which are crawling into our country through all possible cracks are “our people?” If this is so, and we have overlooked something, we would like to ask the Gosduma of the Russian Federation to document Rogozin’s statement as law. For the Vice Prime Minister of Russia not to look like a chatter-mouth.

But these are all details. Let us return directly to the expert of military goods from Ukraine to Russia.

As we have noted, Moscow assures that the suspension of such export is detrimental to Russian “defencers,” and the Russian businesses “will successfully overcome the challenge.” At the first glance, it looks logical: the Ukrainian defence industry’s critical dependence on the Russian Federation is widely known. However regarding Russian businesses, questions do arise: since V. Yushchenko’s presidency we have been hearing permanent yelps from the Volga banks that Russia “is conducting a process of import replacement,” but in reality, throughout these many years, the Russians have not achieved “independence” from Ukraine in the defence sphere for some reason, regardless of all of their bravado-filled declarations and mottos.

So, who will suffer more? Let’s turn to numbers.

According to “Information Resistance” group’s data, in 2013 Ukraine supplied military goods to other countries on a sum of $2.38bn, of which $1bn went to Russia (almost 40% of the overall supply volume – this is a lot, but not even half).

Meanwhile the export of controlled goods to the Russian Federation from Ukraine greatly surpasses import incoming from Russian suppliers to Ukrainian consumers. In particular, throughout 2013, military and double-purpose goods from Russia to Ukraine have been imported on a sum of $700mn. The difference is $300mn. Therefore Ukraine supplies one-third more than it buys from the Russian Federation.

It would seem that taking into account the difference of economy volume of the two countries, this is still a very tragic measure for Kyiv. However, there is one “but.” The thing is that the category of goods of military and double purpose includes not only goods of the defence industry directly, but also strategic materials, for example, in the energy sphere. And if we examine the structure of supplies to Ukraine from the Russia Federation in this category, we see that 81% (!) of the supplies of such goods from the Russian Federation are thermal elements (TVEL) for nuclear power plants.

But there’s the rub: on March 6th of the current year the Vice Prime Minister of the Russian Federation Rogozin stated that Russia has imposed a ban on delivering fuel belonging to the corporation TVEL to Ukrainian nuclear power plant. This way, forcing Kyiv to rapidly look for an alternative to the Russian fuel – clearly, having petitioned with the US corporation Westinghouse.

“Clearly,” as it is known that in 2008 Kyiv signed a five-year contract with Westinghouse for the gradual replacement of the Russian fuel for no less than 3 energy blocks. The beginning of supplies was planned for 2011, and should have continued until 2015. However when Yanukovych came to power in Ukraine, cooperation with Westinghouse was suspended – clearly for Russia’s benefit.

Now everything is returning to normal. Moscow is already excreting bricks, pressuring IAEA to interfere with this process. But there are, it seems, technical moments, which Ukraine can solve operatively, should there be political will within the new Ukrainian government (let us hope that such will exists).

The thing is that in the visible perspective Ukrainians will be able to replace 81% of the current import from Russia of “goods of military and double purpose.” And this is not a bluff, like the Russian one, which has been speaking of “refusing” the Ukrainian defence industry for a good decade now. But a sober evaluation, based on an analysis of the situation.

Let’s also add that within the framework of the so-called bilateral industrial scientific and technical cooperation of productions of the defence industry of Ukraine and the Russian Federation, in 2013, 79 Ukrainian and 859 Russian establishments were involved. These are the businesses that will suffer should co-operation be suspended.

Of course, it would be deeply erroneous to say that for Russia the breaking of ties with Ukraine in the defence industry would be categorically negative, and the Ukrainian businesses would pay it no mind. They will, and, alas, quite a lot.

However, as opposed to Moscow, Kyiv today has a very important ace to play. In particular, the support and sympathy of the international community, first and foremost, Europe. This creates good grounds for the establishments of mutually beneficial cooperation in the defence sphere. The only issue is how effectively Kyiv will be able to take advantage of the opportunities presented.

… And Russia can continue yelping about the “successful import replacement,” buying everything it can from across the border – from electronics to military ships. Hope is blissful.

Dmitro Tymchuk, coordinator of “Information Resistance”

Source: Sprotyv

Translated by Mariya Shcherbinina

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