Procurement: Ukraine War Crippled Russian Arms Exports


March 23, 2024: Sanctions on Russia because of the Ukraine War have reduced Russian exports, including arms exports. Since World War II Russia has been the second largest arms exporter, with the United States in first place. Because of the economic and diplomatic problems created by the Russian invasion of Ukraine in early 2022, Russian arms exports have declined. Now Russia is in third place, behind the United States and France. Compared to the 2014-2018 period, Russian arms exports fell 53 percent during the 2019-23 period. Countries still importing Russian weapons declined from 31 to 12.

Such a catastrophic fall in arms exports is expected to have a long-term impact. It’s not just political. The Ukraine War has demonstrated that Western nations produce superior weapons and that anyone using Russian weapons is at a proven disadvantage.

Russia still uses the weapons it produces and that has cost Russia a lot of money. Russian leader Vladimir Putin declared that the country has shifted to a wartime economy. That has not happened since World War II. During World War II Russia received considerable economic and military aid from the United States, which was delivered via the Pacific port of Vladivostok and nearby smaller ports. Russia had a truce agreement with Japan which expired after Germany surrendered in early 1945. Russia systematically looted Manchuria once they defeated the Japanese forces there. In eastern Europe and East Germany, the looting was even more intense. The looting provided Russia with $65 billion worth of assets. These were used to rebuild the Russian economy.

Russia refused to accept any of the Americans Marshall Plan economic aid that was flooding into Europe after World War II and forced its satellite states to refuse it too. Soviet leader Joseph Stalin feared that American aid was a threat to his tyranny.

Between 1945 and 1991 Russia was still communist, and the state made all the decisions. This worked early in the immediate postwar economic recovery because it was initially about rebuilding basic industries, like mining and steel making. Money was spent on upgrading the railroads, which were the main form of land transportation. Russia did not begin a serious highway construction effort until the late 1990s after the Soviet Union collapsed. That was when Russia was trying to modernize its economy and make the most of its new and improved trade relations with Western countries. Those profitable trade relationships disappeared when Russia invaded Ukraine twice, in 2014 and 2022. Few in the West believed Russia would do that because the West understood better than Russian Vladimir Putin how dependent the thriving Russian economy was on trade with the West.

After Western sanctions hit, Russia found that many of its industries, including defense related ones, depended on key components that came from the West. Russia could not replace all these components via smuggling or setting up manufacturing operations in Russia to produce copies of the Western components. This lack of access to the more advanced West had been a problem for Russia throughout the Cold War. That limited the quantity and quality of high-tech components Russia has access to and resulted in weapons and industrial equipment that were, in general, inferior to what the West had. The centrally planned Communist economy was also inefficient and increasingly corrupt. This led to Russian jokes like, "they pretend to pay us, and we pretend to work.” The deteriorating economy was a major reason for the collapse and disintegration of the Soviet Union in 1991. In the 1990s Russia turned to the more productive free market economy that made Western nations so prosperous. Communist China had also adopted the free market in the 1980s and enjoyed nearly three decades of prosperity before corruption and government interference crippled its economy once more.

The Ukraine War and Western sanctions have crippled the Russian economy. Oil exports sustain the economy though even those exports are sanctioned as well. That means Russia has to smuggle its oil to customers, who pay less for it than before when Russia was not operating under numerous economic sanctions.

Given the dire state of the post 2022 Russian economy, Russia decided to give priority to weapons and ammunition. This included barter or some of Russia's declining cash reserves to purchase weapons from North Korea and Iran. These were the only two countries that would trade with Russia. That was because North Korea and Iran were also suffering from sanctions and more serious self-inflicted economic damage.

By concentrating on weapons at the expense of the general economy, Russia could produce more armored vehicles, combat aircraft, artillery, and ammunition. The sanctions caused problems with aircraft production because a lot of key components were imported from the West. Russian aircraft manufacturers got used to this and had plans to eventually build commercial aircraft that could compete with Western aircraft from Boeing, Airbus, and smaller manufacturers. That lasted until Russia invaded Ukraine in 2022 and the second wave of sanctions kicked in. Soon Russia realized it has to use all the essential Western components to build new combat aircraft and keep existing ones operational. As a result, Russia went into Ukraine with only a few hundred modern combat aircraft available. On paper Russia has a lot more aircraft but many of them are needed to guard the thousands of kilometers of Russian borders. Many of those border areas can only be adequately defended with local bases containing combat aircraft. The air bases throughout Russia are slowly losing their combat aircraft because the Ukrainians are using Western, and some old Soviet, anti-aircraft weapons to destroy a lot of Russian aircraft. Unable to build many replacements, Russia has become more cautious in how it uses its combat aircraft against Ukraine.

These are similar problems when it comes to armored vehicles, especially tanks. In the first few months of the war the Ukrainians destroyed over 3,000 Russian tanks. These were the most modern models which Russia has managed to build since the 1990s. Russia had also refurbished and upgraded thousands of older tanks but many of these were also destroyed by the many anti-tank weapons the Ukrainians had. In addition to the obvious Western portable anti-tank weapons, Ukraine also developed UAV (Unmanned Aerial Vehicle) tanks to destroy tanks. Russia was not expecting that. The Ukrainians pushed their UAV advantage, even using it at sea with several types of USVs (Unmanned surface vessels) which, so far, have destroyed halt the ships of the Russian Black Sea Fleet. The surviving warships have retreated to bases over a thousand kilometers away in the eastern reaches of the Black Sea.

Russia responded by building its own UAVs. Despite that, Russia was still in second place when it came to UAVs. Ukraine had more manufacturers, often Ukrainians who did not work for the military or defense firms. A lot of Ukrainians designed and built UAVs as a hobby that turned out to be a lifesaver for the Ukrainian military. Between that and Western firms building their own or Ukrainian designed UAVs, Ukraine is looking forward to eventually getting a million UAVs a year. That is not as expensive as you might think because many UAVs cost only a few hundred dollars and the most elaborate ones cost only a few thousand dollars. Ukrainians, both military and civilians, realize that these cheap UAVs turned out to be a decisive weapon against the Russians.

Although Vladimir Putin insists that Russia will keep fighting no matter what it costs, the Russian people are less bloody minded. Russia is a country with 142 million people and nearly half a million have been killed so far in Ukraine. This is nothing compared to the World War II losses when Russia lost 29 million soldiers and civilians to the German onslaught against the Russian-dominated Soviet Union and is 195 million people. Only half the Soviets were Russian. Fighting the Germans killed 29 million Soviet citizens, most of them ethnic Russians. These losses were so large that after the war many Russian women could not find husbands because so many men had been killed. Westerners visiting the Soviet Union after the war noticed, at least until the 1970s, that there were a lot of women in the workforce, doing jobs usually performed by men. These women never married because of the shortage of men and ended up replacing the men in many job categories. Many older Russians remember this and, since the Ukraine War began and so many military-age men have died, a growing number of military-age Russian men have fled the country to avoid being mobilized, or forced, into the military. It’s unclear how many Russian men have left, legally or illegally, but the number was large enough for the government to turn to foreigners willing for fight for Russia. The pay was much higher than men in India, Nepal or Central Asian countries could get at home. Russia recruited a few thousand before the foreign governments shut down the Russian recruiting efforts. Ukraine has also recruited foreigners and accepted many combat experienced foreign volunteers.

The costs of the Ukraine War have been a lot higher for Russia than expected in terms of weapons and men lost as well as the continuing damage from sanctions. Vladimir Putin is finding himself confronted by a larger number of Russians hostile to the war efforts. This now includes many wealthy Russians and those that run many of the major industries. These men and women see more clearly how much the war is costing Russia and their chatter is increasingly critical of President Putin.




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