Commission on Defence-Industrial Questions
State Committee for the Defense Industry

The Russian Federation inherited the largest and most productive share of the former Soviet defense industry, employing as many as 9 million workers in 1,125 to 1,500 research, design, and production facilities. Those installations are concentrated in particular regions, whose economies tend to be heavily dependent on the industry; in the Republic of Udmurtia, for example, more than two-thirds of workers and industrial capacity were attached to defense in some way in the early 1990s. Moscow has large plants for air force and missile components, and St. Petersburg specializes in naval design and production as well as infantry weapons.

1992-93 - Committee on the Defense Industry

The Russian Committee on the Defense Industry [Roskomoboronprom] was established in October 1992 by an edict from President Boris Yeltsin. Responsible for all defense industries and their commercial and military activities, Roskomoboronprom was the successor to the Soviet-era Military Industrial Commission (VPK). The new Committee on the Defense Industry was was divided into eight departments: Aviation Industry. Ammunition and Special Chemical Products, Armaments Industry, Communications Industry, Radio Industry, Missile and Space Technology, Shipbuilding Industry and Electronics Industry.

1993-96 - State Committee on the Defense Industry

The State Committee on the Defence Industry (Gosudarstvennyy komitet po oboronnoy promyshlennosti - Goskomoboronprom) replaced Roskomoboronprom in September 1993. Some 2,000 defense related industries, 920 research institutes and design bureaus were under Goskomoboronprom, with a directly employed work force of about 5 million. However, a 1996 estimate identified about 35 million Russians as receiving their income from enterprises linked in some way to Goskomoboronprom. Information about the funding of Russia's defense R&D programs remains hard to obtain because many such programs are secret. The official budget allocation of US$1.4 billion, even with the addition of the Security Council's supplemental funding in February 1996, seemed extremely modest in an era of rapid technological advances. Most of the acquisition programs of the mid-1990s do not have known R&D follow-on programs; instead, they are products of R&D programs started in the early 1980s.

1996-97 - Ministry of the Defense Industry

In May 1996 Goskomoboronprom was upgraded to create the Ministry of the Defense Industry (Minoboronprom). In 1995 defense industrial production fell by 21 percent compared with 1994, when production in turn was 25 percent lower than 1993. In January 1996, orders were 25 percent below the level for January 1995, and in the first half of 1996 the Ministry of Defense had not completed payment for its 1994 and 1995 deliveries from defense plants. Hardest hit were the shipbuilding, radio, electronics, and ammunition industries. Between 1991 and 1994, annual production of main battle tanks dropped from 900 to 40, of infantry fighting vehicles from 3,000 to 400, of fighter aircraft from 225 to 50, and of helicopters from 350 to 100. Those statistics partly reflect the intentional reduction of forces that began in the late Gorbachev era before the dissolution of the Warsaw Pact in 1991, but they also indicate the overall deterioration of the industry.

1997-99 - Ministry of Economy

In March 1997, the Ministry of the Defense Industry (Minoboronprom) was dissolved and most of its functions were transferred to the Ministry of Economy (MoE). Some defense industries had mounted successful conversion and restructuring programs. Although conversion received much publicity and billions of dollars in Western aid after 1992, government funding for that program decreased steadily in the mid-1990s, and only a small percentage of allotted funds actually were spent for conversion. No funds were authorized for conversion in the 1995 budget.

In early June 1999 Russia reorganized its arms manufacturers into four major industrial sectors, each overseen by a new government agency. The four agencies are the Russian Munitions Agency, the Russian Conventional Weapons Agency, the Russian Control Systems Agency and the Russian Shipbuilding Agency, and will report to a new government commission on military-industrial issues headed by the prime minister. These new agencies joined the Russian Air Space Agency formed earlier in the year.

Russian Air Space Agency includes
• aircraft industry and
• space-rocket industry
Russian Conventional Weapons Agency
• industry of arms
Russian Armament Agency
• industry of ammunition and special chemistry
Russian Ship-Building Agency
• ship-building industry
Russian Control Systems Agency
• radio industry;
• industry of communication facilities
• electronic industry

The Vice-Premier of Russia in 1999, Ilya Klebanov, supervised the Defense Industrial Complex. He was also responsible for work done within the Ministry on Atomic Energy, the State Committee of Communication, and the Ministry of Science and Technologies. These assignments were given to him during a meeting on June 1, 1999 with Prime Minister Sergey Stepashin.

1999-2004 - Commission on Defense-Industrial Questions

On June 22, 1999 the Commission on Defense-Industrial Questions was created in accordance with Government Decision 665. It was to be led by the Prime Minister. Vice-Premier Ilya Klebanov, Securiy Council Chairman's Assistant Alexey Ogarev, and Deputy Chief of Staff to the Prime Minister General Alexander Piskunov were nominated to become head assistants of the commission.

In order to attain the administrative hierarchy that characterized the former defense industry (the Ministry of Defense Industry) it was decided to create five separate defense agencies. The goal of the agencies was to be clarified more thoroughly following the specification of the arms program through 2005. Each agency would design its own projects and defend them before a board comprised of governmental officials. If selected it would receive financing thereafter, would be responsible for the overall direction and development of the project, and charged with the conduct of pacing orders among enterprises. The agencies also became the state contractor for R&D projects within their respective fields and directed the process of creating new technologies.

Skeptics argued that the formation of these different agencies would cause disjunction and coordination problems between and within departments. As a result, it was decided that a Control Systems Agency could be created within the framework of the General Armaments Agency and the Aerospace Agency in order to solve the logistical issues throughout the agencies and synchronize their operations.

The former Vice-Premier of supervising the defense-industrial complex and the Minister of the Economy, Yakov Urinson, was strongly opposed to the creation of separate agencies. He argued that the industry was a shell of its former self due to the fact that only a few enterprises were predominantly engaged with governmental military production orders. Instead, the majority of enterprises were concentrated on manufacturing large volumes of consumer and export oriented goods. Therefore, according to Urinson, these agencies were merely a hindrance to enterprises.

On August 6, 1999 the Russian government approved the creation of three Russian agencies within the Defense Industrial Commission on enterprise management. They were a shipbuilding agency, a conventional arms agency, and a control systems agency. The agencies acquired some of the Ministry of Economics functions, including enterprise licensing and several federal target programs.

On September 15, 1999 Deputy Prime Minister Klebanov announced that five sectoral defense agencies had been established according to the Presidential decree regarding governmental reform from May 25, 1999. The Aerospace Agency was headed by the Yuri Nikolayevich Koptev; the Munitions and Special Chemicals Agency was headed by Zinoviy Petrovich Pak; the Shipbuilding Agency was headed by Vladimir Yakovlevich Pospelov; the General Armaments Agency was headed by Alexander Vasilyevich Nozdrachyov; and the Control Systems Agency was headed by Vladimir Valentinovich Simonov.

Although they became active the moment they were assigned directors, it took a further six weeks to complete the ground rules for the issuance of executive orders when dealing with each agency. Klebanov noted that they would all be located in the building that formerly had housed the Ministry of the Defense Industry on Shchepkina street.

On September 16, 1999 Klebanov reported that no more than ten major integrated corporations would be left for each of the five sectoral agencies of the military-industrial complex, which consisted of some 1,600 enterprises.