Medvedev takes on Russia's outdated military-industrial complex

Russia's ambitious $730-billion rearmament program appears to be stalling amid skyrocketing prices, late deliveries and, in some cases, the sheer inability of Russia's military industries to deliver the goods.

Experts say the increasingly frustrated tone of public statements by Russian leaders, including President Dmitry Medvedev, suggests that they are only now fully realizing that the once-mighty Soviet military-industrial complex, which produced everything from bullets to intercontinental missiles, is irreparably shattered.

In a testy meeting with top military officials Tuesday, Mr. Medvedev voiced the previously unthinkable idea that the Defense Ministry should open its contracts to bidding by foreign firms if Russian products were too pricey or substandard.

Earlier this year, Medvedev sacked several top industry managers over unfulfilled contracts, and last week he ordered a full investigation into claims by one of the country's top weapons designers, Yury Solomonov, that the 2011 military procurement program had been "botched."

"We're dealing with a systemic problem here, and nobody knows what to do about it," says Vitaly Shlykov, a former Soviet war planner and ex-deputy defense minister of Russia. "After 20 years of doing nothing about the decay of our defense industries, they've just unexpectedly noticed it. If they go ahead and spend the vast sums of money they're talking about (on new Russian military equipment) it's obvious that much of it will just be wasted or stolen."

Modernizing the military

Russia's former president and current prime minister Vladimir Putin has announced increasingly expensive plans to overhaul and re-equip Russia's armed forces, beginning with a $200-billion 7-year program in 2007.

Following a brief summer war with Georgia in 2008, which laid bare a wide range of Russian military shortcomings, the Defense Ministry launched a thorough organizational reform that slashed manpower, abolished scores of Soviet-era "phantom divisions" that existed mostly on paper, and set the stage for a modern professional army.

Early this year, Mr. Putin said the government will spend 20-trillion roubles, about $730 billion at current exchange rates, by 2020 to completely re-equip Russia's armed forces with 1,000 new helicopters, 600 combat aircraft, 100 warships – including aircraft carriers and 8 nuclear-powered ballistic missile submarines – and new generations of intercontinental missiles and advanced air defense systems.

But experts say the ability of Russian defense industries to provide these items doesn't come close to the armed forces' appetite for new weaponry.

"To fulfill this program we would have to rebuild our entire military industry," says Alexander Golts, military expert with the online newsmagazine Yezhednevny Zhurnal. "It was a Soviet tradition to build everything at home, from shotguns to fighter planes, but in the 1990's the whole infrastructure of subcontractors disappeared," meaning this approach is no longer an option, he says.

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