Russia reforms military-industrial complex

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MOSCOW, Feb. 9 (UPI) -- The Russian government has announced a massive investment program to modernize its aging, Soviet-era of military-industrial complex.

In order to evaluate the situation Russian Prime Minister Vladimir Putin, together with Deputy Minister of Industry Denis Manturov, visited one of Russia's most important military defense factory complexes, Uralvagonzavod in Nizhny Tagil, where he met with its director Oleg Siyenko, Rossiya 1 television channel reported Tuesday.

Siyenko was appointed director of Uralvagonzavod in mid-2009, when the complex was undergoing a difficult financial restructuring, now largely complete.

Rossiya 1 showed footage of Putin asking Siyenko: "How did the government support measures work? What are the results of 2010? What are the prospects for 2011? What needs to be done additionally to support the enterprise?"

Siyenko replied: "We have cut the enterprise's overall debt by 31 billion rubles ($1.05 billion). We have neither tax nor wage arrears. Nor do we have overdue payments to banks. At the end of December, we fully repaid the state guarantees that were issued and we fully repaid the loans under these state guarantees to all banks and creditors. The enterprise currently operates three shifts of four teams. Our workforce is about 54,000 people."

Putin last visited Uralvagonzavod in December 2009, by which time his government had committed nearly $512 million to modernizing the complex. The government funding support enabled Uralvagonzavod to clear all its debts to creditors and subsequently diversify production, which includes new-generation tanks such as the T-90.

Putin is strongly committed to modernizing Russia's vast military-industrial complex, both as a source of weaponry for Russia's armed forces as well as a profitable source of export earnings.

Last month during a meeting with Omsk Oblast Gov. Leonid Polezhayev, Putin said: "We have now practically adopted a big program to develop modern types of armament. We will now tackle and are actively tackling a program for the rearmament of the military-industrial complex itself. ... We will adopt it in the very near future."

Overall the Russian government is planning to allocate $683 billion to the program for reforming a modernizing the state armaments industry through 2020.

In 2010 Russian arms exports were worth more than $10 billion. In 2009 the Russian state armaments exporting agency Rosoboronexport reported sales worth $8.5 billion.

Rosoboronexport Director Anatoly Isaykin said: "Rosoboronexport currently exports several thousand military products, expanding arms sales by $500 million-$600 million each year."

He said Rosoboronexport's portfolio of export orders is estimated at $40 billion. Rosobornekhsport's major client states include India, Algeria, China, Venezuela, Malaysia, Vietnam and Syria.