The Ukrainian government gave a number of defense enterprises the right to independently export their products abroad and purchase military goods for industrial needs. This was announced on August 16 by the profile resource of Ukrainian Military Pages, citing a Cabinet resolution.
According to the document, the State Enterprise “Kharkov Machine-Building Plant“ FED ”, LLC“ Radionics ”, LLC“ Ukrainian Armored Equipment ”and CJSC“ Research and Production Association “PRACTICE” got the opportunity to independently engage in the supply of products.
It is specified that this measure will help enterprises expand their capacities and increase their export potential.
- Worker SE "Kharkov Engineering Plant" FED "
- © Kharkiv Machine-Building Plant "FED"
Plant "FED" is engaged in the production and repair of units for hydraulic, fuel and electrical systems of aircraft. Radionics specializes in the development and maintenance of aviation radar systems and optoelectronic equipment. The plant also produces homing heads for rockets. At the enterprise “Ukrainian armored vehicles” they also produce “Varta” and “Novator” armored vehicles, as well as the UPIK-82 mortar. NPO Praktika creates armored vehicles, armored personnel carriers and equipment for nuclear power plants.
In an interview with RT, military expert retired colonel Viktor Litovkin noted that the export potential of these enterprises is relatively small. According to him, today they are in a terrible situation.
“Of course, these enterprises will have the opportunity to dump and sell their products due to a sharp reduction in prices - if only to sell. This option can help them survive. But, on the other hand, it is not clear what these plants will sell. They have no connection with suppliers of components from Russia, and without it there is no way to create equipment in large volumes at enterprises of the military-industrial complex of Ukraine, ”the expert said.
Interestingly, the norm allowing Ukrainian manufacturers of defense products to trade directly with foreign countries has been in force in the country since June 2018. Then Petro Poroshenko signed a decree that introduced the decision of the National Defense and Security Council (NSDC) on the liberalization of foreign trade transactions for defense industry enterprises. According to the decree, the factories received the right to export their products without the mediation of specialized state-owned companies.
“Take the old equipment”
In the Soviet period, Ukraine had a powerful defense industry. So, Kharkov was one of the largest centers of mechanical engineering, and in Nikolaev since imperial times the shipbuilding cluster developed, where several enterprises operated at once. After the collapse of the USSR, Ukraine received a rich inheritance in the form of technology, high-level specialists, as well as an extensive material and technical base.
However, Kiev could not save and increase these achievements. Against the backdrop of the conflict in the Donbass, the previous president Petro Poroshenko announced plans to revive the Ukrainian defense industry, but in practice the situation has not changed.
As stated on June 1, the former head of the Ministry of Defense of Ukraine Yuriy Yekhanurov, the defense industry almost stopped work.
“Money is allocated catastrophically little. Today our “defense industry” practically does not work. They take old equipment, paint, put on some new products such as night vision devices or a slightly better connection and send them, ”he said on the 112 Ukraine television channel.
A secret assessment was made in July by the Secretary of the National Security and Defense Council, Alexander Danilyuk. According to him, the country's military-industrial complex is in decline due to widespread corruption.
- Petro Poroshenko
- globallookpress.com
- © Serg Glovny / ZUMAPRESS.com
“Due to the fact that the private interests of officials were clearly fixed in the military-industrial complex, in the defense industry, the sector was falling apart. That is, our defense industry was falling apart, could not develop. A sufficient level of competition was not created, financing did not contribute to development, ”he said on the air of the Ukrainian“ 24 channel ”.
The Ukroboronprom Group of Companies previously reported that Ukraine had stopped funding programs for the production of BTR-4 and the modernization of one of the main battle tanks. The State Concern accused the Ministry of Defense of disrupting the work, which did not transfer funds to the accounts of enterprises. As a result, the Kharkov Design Bureau of Mechanical Engineering named after A.A. Morozova (KHMB) was forced to switch to a two-day working week, despite the fact that the plant is the largest manufacturer of armored vehicles in the country.
In recent years, KHKBM specialized mainly in the repair of T-64, T-72, T-80 tanks, obsolete Soviet armored personnel carriers (BTR-50, BTR-60, BTR-70) and other military equipment. In addition, the bureau was engaged in the creation of new Ukrainian Oplot and Yatagan tanks - the vehicles were constructed on the basis of the T-84 developed in the 1990s, which, in turn, is a modification of the Soviet T-80UD.
- Ukrainian tank "Oplot"
- © SERGEY BOBOK / AFP
The scimitar (T-84-120) was created specifically for deliveries to Turkey in the 2000s. However, the contract with Ankara fell through, and the production of a new tank stopped on one prototype.
As for the Oplot (T-84BM), it was developed both for domestic needs and with an eye to export. However, only ten such vehicles received APUs, and attempts to put the tank abroad were unsuccessful.
So, at the beginning of 2017, the Thai authorities terminated the contract with Ukraine for the supply of 20 Strongholds due to technical malfunctions discovered during the inspection of the first delivered batch of cars.
Other buyers of Ukrainian equipment also faced similar problems. In 2014, Iraq was forced to return 42 BTR-4 to the Ukrainian side due to technical problems - the contract was terminated. Last year, the Croatian authorities refused to operate four MiG-21 aircraft modernized by Ukraine, because the machines were out of order.
Complex problems
However, the problems of the Ukrainian defense industry lie not only in the technical plane. The most pressing issue is corruption in departments and structures involved in the coordination of defense contracts, experts say.
In early 2019, a high-profile corruption scandal erupted around the leadership of the Ukroboronprom group of companies after the publication of a journalistic investigation about abuses in a company that unites about 100 defense enterprises. The Verkhovna Rada instructed the commission of inquiry to begin an investigation into the theft.
- The building of the group of companies "Ukroboronprom"
- Reuters
- © Gleb Garanich
However, experts doubt that the removal of individual figures and the reorganization of the concern will turn the tide, as well as the liberalization of foreign trade activity of Ukrainian enterprises.
Point measures are not enough to revive the defense industry; a whole range of actions is needed, experts say. As a doctor of military sciences Konstantin Sivkov explained in an interview with RT, Kiev will have to restore not only defense, but also related industries in order to launch production of new, competitive military equipment.
“For example, in Ukraine, a number of industries were destroyed, including the production of high-quality armored steel, as well as gun barrels,” the expert noted.
In the meantime, the removal of export restrictions will only allow Kiev to repair and sell the remnants of weapons and equipment that have remained in warehouses since the days of the USSR.
“Ukraine has a number of problems, and so far it has not been possible to ensure the mass production of weapons and military equipment. In general, this step of the Cabinet can be regarded as a gesture of despair. It only means that the Ukrainian state is opening its borders to the diversion of weapons to the black market, ”said Sivkov.
A similar point of view is shared by Viktor Litovkin.
“Kiev has problems with the quality of metals, special technologies are needed. Ukrainian experts scatter, because they have no work and prospects, who will replace them? These are complex problems that cannot be solved with one decree, ”the expert noted.
At the same time, in other conditions, the removal of bureaucratic barriers could really play a positive role for defense industry enterprises, Litovkin emphasized. According to him, the absence of the need to coordinate contracts with officials will reduce the negative impact of corruption and nepotism on the industry.
“On the other hand, in order to trade in foreign markets for defense products, you need to have a network of lobbyists, where there is also scope for corruption. So far, it can be said that the Cabinet handed the companies a straw, which they could grab onto. Will they come up or not? I strongly doubt it, ”the expert summed up.