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Obituary for Ukrainian defense industry

RIA Novosti

MOSCOW . (Yury Zaitsev for RIA Novosti) - The Russian-Ukrainian joint project of developing the Antonov An-70 medium-range transport aircraft seems to have been stopped, despite numerous statements by Russian President Vladimir Putin and his former Ukrainian counterpart Leonid Kuchma about its strategic importance for bilateral cooperation.

Russia 's official version was voiced by Russian Defense Minister Sergei Ivanov, who said the An-70 project, implemented under a 1984 request for proposal (RFP), was nowhere near completion.

The An-70 STOL (Short Take-Off and Landing) aircraft, which was to operate from unimproved airfields, will apparently require the same runways as the heavy Ilyushin Il-76 Candid cargo jet. This seems strange as the An-70 has a much shorter range and can carry smaller consignments.

The fate of the An-70 and many other military projects was sealed after the administration of Ukrainian President Viktor Yushchenko took over and proclaimed the country's accession to NATO as its goal. In December 2005, Defense Minister Ivanov said Moscow was concerned about Kiev 's intention to join NATO. Ivanov also made it clear that co-production arrangements between Russian and Ukrainian defense industries would be disrupted, in the first place, and predicted that Ukrainian defense enterprises would eventually become bankrupt "with all the ensuing consequences."

Ukraine inherited nearly one-third of the Soviet defense industry, whose enterprises account for about 70% of the Ukrainian industry. This makes Kiev a major player on the global arms market.

Just like other Soviet republics, Ukraine lacked a "closed-loop" weapons-production cycle, and therefore depends on Russian-made components today. Moscow , too, depends on Kiev . Ivanov said CIS co-production arrangements and easy-term arms trade had involved 1,330 Russian and Ukrainian enterprises by 2005. " Russia accounted for 22.8% of Ukrainian defense imports. At the same time, 50% to 60% of Ukrainian exports went to the Russian market," said Ivanov.

At present 95% of Russian helicopters are fitted with engines from the Zaporozhye-based factory Motor-Sich, which also turns out engines for the Beriyev Be-200 Amphibious Multi-Role Twinjet Aircraft and the Yak-130 Mitten combat trainer. Ukraine also produces capital-warship and hovercraft propulsion units, whereas Russia does not assemble any capital warships today.

The Kremenchug automotive factory turns out KRAZ trucks for S-300 surface-to-air missile (SAM) systems, Novokramatorsk plant makes S-300 radars, and a Lvov factory produces electronic units for them.

"Russian-Ukrainian defense-related trade turnover involves 7,000 to 8,000 items," said Ivanov. Components are often exchanged by barter, and neither side pays anything. Some factories are situated in Ukraine , whereas design bureaus remain in Russia , and vice versa. One can therefore talk about semi-legal forms of cooperation.

Kiev sold about $680 million worth of arms in 2005, including nearly $200 million came from its cooperation with Moscow . Severed co-production arrangements would prove painful for both sides and cause additional spending. But Russia is deliberately severing these relations because its military-industrial sector is a vital national security element, which must not depend on NATO's moods, regardless of Brussels ' calls for mutual partnership and assurances of loyalty.

The situation when another state, even if it is a fraternal Slavic one, produces homing warheads for Russian missiles or gas-turbine propulsion units for warships cannot be considered normal.

Kiev has traditionally delivered avionics and weapons for Russia 's Sukhoi Su-30-MKI and Su-30-MKK Super Flanker fighters being exported to India and China . Production of Su-27 Flanker fighters for Beijing involved forty-four Ukrainian enterprises in the early 1990s. However, only 14 Ukrainian factories took part in the Su-30-MKK project, and a mere two enterprises assemble Su-30-MKI warplanes in New Delhi under a license contract.

Ukraine would annually lose up to $200 million, if its defense industry stops cooperating with Russia . Such losses would, first of all, affect Ukrainian-Russian imports to third countries.

Russia , which has launched production of similar components in the last few years, prefers them to Ukrainian products even if they cost more and their quality is inferior. On the whole, Russian enterprises will master the production of major components two or three years later, and the most sophisticated elements would roll off the assembly line eight to ten years from now.

Russia can also assemble helicopter engines in Rybinsk. In addition, there are plans to establish a national engine-building holding company, which would develop a fifth-generation helicopter engine, and Vyacheslav Boguslayev, president of Ukraine 's Motor-Sich enterprise, has expressed interest in joining this holding company.

Aircraft factories in Voronezh and Omsk can produce components for Ukraine 's Antonov transport planes, whereas any Russian enterprise can master the assembly of S-300 radars.

The world's best ballistic missiles and launch vehicles were developed in Dnepropetrovsk , a unique space center, the only one of its kind in the world. The center developed the SS-18 Satan inter-continental ballistic missile with an eight-ton warhead containing ten independently targetable reentry vehicles. This ICBM, designated as Voyevoda in Russia , will soon be removed from combat duty. Ukrainian experts, who offer contract supervision for this missile, also help produce its civilian version, i.e. the Dnepr launch vehicle. Dnepr space rockets lift off from the Baikonur space center, leased by Kazakhstan to Russia under a long-term contract, or from the town of Dombrovsky in Russia 's Orenburg Region, where a Strategic Missile Force unit is deployed.

Russia , which has decommissioned its last ICBM train in early 2006, no longer needs SS-24 Scalpel ICBMs either. Russian enterprises are already assembling unique Topol-M missiles for the Strategic Missile Force, and a strategic submarine is testing the Bulava submarine-launched missile.

It appears that, although Kiev is trying to enter the space-launch market and to implement a cost-effective long-term program in this field, Ukraine cannot create a self-sufficient space industry without Russia . True, Kiev has orbited 19 Zenit-3SL space rockets under the Sea Launch program. However, Russian components, including rocket engines, the most expensive element, account for 60% of each launch vehicle's price.

Program Ground Launch calls for orbiting the first Zenit-M rockets, namely, their two-stage Zenit-2M and three-stage Zenit-3M versions, in 2006-2007. There are plans to launch three to four rockets per year and to recoup all expenses in five to six years. Russia and Ukraine will be entitled to 70% and 30% of profits in line with their contribution to building this rocket.

The end of Russian-Ukrainian military-technical cooperation would spell tragedy for numerous professionals, who developed the world's best strategic missiles, aircraft and air-defense weapons. Vladimir Zharikhin, deputy director of the Moscow-based CIS Institute, said enterprises in Lvov and Ivano-Frankovsk ( West Ukraine that had vehemently supported the leaders of the recent Orange Revolution) had supplied components for many Russian weapons systems, while curtailed military-technical cooperation would cause huge unemployment there.

Yury Klyuchkovsky, spokesman for Ukrainian President Viktor Yushchenko at the Supreme Rada (Parliament), said he did not trust Sergei Ivanov's statements on curtailing military-technical cooperation if Ukraine joined NATO. Klyuchkovsky said Russia had always been pragmatic, and if it had something to gain from stopping cooperation with Ukraine , it would have done so long ago. Indeed, this will not benefit Russia , but it is forced to renounce its profitable cooperation with Ukraine . He added that NATO contracts would replace Russia 's contracts after Ukraine 's accession to the Alliance .

Blessed are the believers. Many East European defense enterprises were shut down after joining NATO. Ukraine would also have to adopt NATO standards and play a subordinate role. Brussels would force Kiev to buy expensive U.S. , French and German weapons, as it is not interested in reviving the Ukrainian defense industry. Ukrainian enterprises are unlikely to start producing NATO equipment either. To do this, they require a major overhaul at least.

A document on admitting Ukraine into NATO would, doubtless, become the death knoll for Ukraine 's defense sector. Moscow would have no choice but to stop cooperating with Kiev in this sphere because the Kremlin's strategic priorities should not depend on those unpredictable Ukrainian political moods. Consequently, Ukraine would either have to find partners in the Third World or become an assembly shop for NATO weapons. Experts say there is a third option: surviving defense factories will service old Soviet military equipment scattered over the world.

Yury Zaitsev is an expert at the Russian Academy of Sciences' Space Research Institute.