A quarter of the funding for state defense procurement goes to the strategic nuclear forces. Large funds have been approved for creating new armored vehicles – not just a new tank or an armored personnel carrier, but a new combat platform that could be used for creating new weapon systems, including heavy, medium and light armored vehicles.

       The Russian government will spend 23 trillion rubles ($746.5 billion) on rearmament and on modernizing the defense industry by 2020. Speaking at a meeting of the national Security Council, President Vladimir Putin said that the goal is to “carry out the same kind of comprehensive and powerful modernization drive that was achieved in the 1930s.” The law on state defense procurement and price-setting principles in the defense sphere has been submitted to the State Duma and is to be adopted by the end of 2012.

       The Valdai Club interviewed Viktor Litovkin, editor-in-chief of independent military review Nezavisimoye Voennoye Obozreniye , on the fulfillment of state defense procurement contracts in 2012.

       Is it possible to modernize the Russian army and defense industry by 2020? Should we be doing this now if the main social problems of the Army and the Navy, such as housing, have not been resolved?

       It would be wrong to sacrifice one to the other. These issues should be addressed as a package. The creation of modern military equipment, the construction of housing for military personnel and the solution of their social problems are a tight knot of interrelated issues. Military service is unthinkable without military equipment that allows military personnel to defeat a strong adversary and return home alive and healthy. At the same time, military personnel and their families must not live in tents. Proper living conditions must be created for military families and retired military personnel, who must also receive a sufficient pay to be a respected part of society. The allocation of 23 trillion rubles for a 10-year period is the smallest possible amount necessary for rearmament, the modernization of the defense industry, the creation of new production facilities and technology and the training of new personnel. This is the smallest funding possible because the Army had not received proper modernization funding for the last 20 years, and we now need to catch up and fill the gap.

       Are the state defense procurement contracts being fulfilled as planned? Have all the necessary contracts been signed with the defense enterprises?

       Deputy Prime Minister Dmitry Rogozin, Chairman of the Government’s Military Industrial Commission, said during his recent meeting with President Vladimir Putin that to date, 94.3% of the defense orders had been placed. They met in late November, so I think the remaining orders will be placed by the end of the year.

       At the same time, contracts for complicated technology, such as strategic nuclear submarines, surface warships, sea- and surface-launched strategic missiles, the Iskander-M tactical missiles and other unique equipment, including the fifth-generation Sukhoi PAK FA multirole fighters, several models of the new Mi-8 helicopter and the Mi-26, Ka-50, Ka-52 and Mi-35 helicopters have been signed for the period up to 2020. The necessary funds have been allocated, and we now need to ensure that the contracts are implemented by the approved deadlines and the budgetary allocations are spent reasonably.

       A quarter of the funding for state defense procurement goes to the strategic nuclear forces. Large funds have been approved for creating new armored vehicles – not just a new tank or an armored personnel carrier, but a new combat platform that could be used for creating new weapon systems, including heavy, medium and light armored vehicles. There will be a heavy tank platform called Armada, a medium tracked armored vehicle Kurganets and a light wheeled armored vehicle Boomerang. They will be used to create a variety of combat vehicles for which three types of brigades – heavy, medium and light – will be created in the Army. It is clear that this technology should be complemented with warfare support systems for reconnaissance, navigation, communications and target acquisition, as well as new reconnaissance and combat drones connected to precision artillery, tactical missile and multiple-launch rocket systems.

       The heads of defense companies say they are working according to the schedule of state contracts. However, they are facing certain difficulties, because their production assets have not been renovated. There is also the problem of quality: complaints from clients about poor quality reached 24 billion rubles ($779 million) last year. And one more acute problem concerns the inadequate skills of workers, engineers and technicians at defense enterprises.

       Dmitry Rogozin said that the president had ordered the creation of a new system for monitoring the placement and fulfillment of state defense procurement contracts. Plans provide for creating a mechanism to monitor the personnel policy and the personal responsibility of defense company leaders for the fulfillment of contracts. What do you think about this decision? Will this new mechanism be effective?

       This mechanism is called the Military Industrial Commission under the government and is chaired by Deputy Prime Minister Rogozin himself. It is this commission that is responsible for monitoring the fulfillment of state defense contracts jointly with the client – the Defense Ministry. The Commission’s agenda has been approved and its members are respected professionals. The State Duma is currently discussing the draft law on the state defense procurement contracts and the prices of military goods. I think that this, as well as other measures in this area, will help our defense industry achieve its goals.

       And all of us, including the Public Council of the defense industry, will monitor this process and will help the defense industry by talking with the media, ensuring fair prices of military goods and helping settle pricing conflicts between the Defense Ministry and the defense industry. Some enterprises incorporate not only production costs and the price of components in the price of their goods, but also the maintenance costs of social facilities. Many experts believe that this is inadmissible. The Defense Ministry should pay only for what it buys, and the manufacturers should find a different solution to their problems. In the West, for example, defense companies produce civilian products alongside military goods. Defense companies should produce a wide range of goods, both military and multipurpose, including civilian, so as to ensure themselves a substantial income and the possibility to modernize production.

       Is it wise to invest so heavily in the modernization of the Army and the defense industry when the social aspects of military service, such as healthcare, housing and education, need so much attention? Maybe part of the allocations for the state defense procurement program should be redistributed to resolve these problems?

       The 23 trillion rubles allocated to the Army and the defense industry is not connected in any way with the military personnel’s social problems. Of these funds, 20 trillion rubles will be used to modernize weapons and military equipment, and 3 trillion rubles will be invested in renovating military production capacities. Other budgetary funds have been provided for the social aspects of military service. The wages of military personnel and military pensions have been raised two- or threefold since January 1, 2012. Over 250 billion has been allocated for building housing for retirees. To date, some 15,000 servicemen need housing, which is considerable progress when compared to the 160,000 plus we had four years ago. The figure would be even bigger if we were to count the families of officers and NCOs. Unfortunately, this system has many drawbacks. For example, the construction of social infrastructure is lagging behind housing.

       What are the main social problems of military personnel which the new defense minister, Sergei Shoigu, will have to address?

       First, all retirees must be provided with housing. This project has been postponed for several years. The previous Defense Ministry leadership has not completed it by the end of 2012, as they promised. We hope now that this problem will be resolved in 2013 and that attention will be redirected to the provision of service housing to the Army and Navy personnel. Without this, we will not improve the social status of military service or recruit the planned 425,000 contract servicemen. We also need to iron out the healthcare system for military personnel, their families and military pensioners and to make serious improvements to the system of military education. I believe that these are the main issues which the new Defense Ministry team will have to address, in addition to adjusting the military reform.

       Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.