The leadership of the military-industrial complex (MIC) of Ukraine should introduce a systematic approach to the development of the industry. This was stated by Secretary of the National Security and Defense Council of Ukraine (NSDC) Alexei Danilov during a meeting with Deputy Prime Minister - Minister for Strategic Industries Oleg Urusky.
“According to the Secretary of the National Security and Defense Council of Ukraine, the industry leadership should introduce a systematic approach to its development, in particular, take measures to increase coordination of military-industrial policy entities. He also emphasized that the government should resolve the issue regarding the legal form of work of enterprises that are part of the Ukroboronprom Group of Companies, the NSDC press service said.
Danilov emphasized that the defense industry enterprises should primarily concentrate on providing the army with modern high-tech weapons. The official also highlighted the importance of developing a roadmap to attract foreign investment in this area. Particular attention was also paid to the missile program for the Armed Forces of Ukraine and the development of the space industry.
Recall that Urusky was appointed to this newly created post on July 16. Earlier in Ukraine, such an agency did not exist, since the Ministry of Industrial Policy was abolished in 2014 after a coup.
"Destroyed their potential"
Immediately after his appointment, Oleg Urusky gave an interview to Interfax-Ukraine, in which he shared plans for the development of Ukrainian industry.
He explained that strategic industries are primarily meant for the defense industry, so the work of the new department will be largely focused on the development of the defense industry. At the same time, the official emphasized that the list of strategic industries will be determined by the president, the Verkhovna Rada and the Prime Minister, therefore, adjustments may occur in it.
- Vice Prime Minister for Strategic Industries Oleg Urusky
- © YouTube
“The state today will consider certain sectors as strategic (now, for example, this is the military-industrial complex, according to the current presidential decree), tomorrow they will be different: mechanical engineering or metallurgy, or the chemical industry. Tasks can change, for them it is possible to choose the appropriate staff of people with a focus on precisely this strategic direction, ”he said, adding that Ukraine cannot develop all sectors at the same time.
At the same time, Urusky emphasized that any industry could consider his department his "home", and also admitted that he had not yet seen the "final version of the draft resolution on the creation of a new ministry," but expressed confidence that it had been prepared.
According to him, the State Space Agency, the State Export Control Service, and the Ukroboronprom State Concern, which is subject to "complete transformation," will go into the sphere of administration of the new ministry.
“In its current form, it cannot exist,” said Urusky. - We see him as a management company. The state holding company is a management company and holdings in the areas of: armored vehicles, precision weapons, radar systems, ammunition and shipbuilding. The space rocket, by the way, can also go there. ”
At the same time, the Deputy Prime Minister noted the unsatisfactory state of Antonov State Aviation Enterprise. Separately, he settled on the fate of the An-70 military transport aircraft. According to him, this project could not be implemented due to a break in ties with Russia.
“A sore point for me. I was a participant in this process and I can simply write memoirs of how this all happened. Today it is absolutely unrealistic, because it is a joint Ukrainian-Russian project. Then Antonov announced the An-77 as a continuation of the “seventies” without Russian components, that is, on import substitution. But they ran into certain components that we can’t replace in any way. And this is a dead end, ”Urusky explained.
- An-70
- Reuters
- © Valentyn Ogirenko
However, he noted that he hopes to attract investment in this industry from leading Western companies in the future.
“All this must be taken into account and corporatization should take place so that the same Boeing and Airbus would acquire shares or we could cooperate in various projects,” the minister said.
A catastrophic situation for Ukrainian industry has developed in shipbuilding, the vice prime minister said.
“In shipbuilding over these 30 years, we have virtually destroyed our potential. We went by way of instant privatization without thinking about which plants we are selling. Only the design bureau and one plant, which barely warms up, remained with the state in shipbuilding. And what kind of monsters were they? ” He wondered.
Urusky also mentioned the problems of the space industry.
“All this will be subject to reform. The space agency will remain the National Space Testing Center. Perhaps the company "Ukrkosmos." In general, it should be a civilized space agency, which in the end should become a member of the European space society, ”he said.
At the same time, the Minister noted that after the collapse of the USSR, Ukraine missed a lot of chances for development in this area.
“I’ve been saying for a long time:“ Well, what to look for, let's make an “Air Launch” - that’s our national idea. ” We will never have a spaceport for objective reasons, but there are planes that can be carriers. This is our asset - the aviation industry and the missile and technical industry. We could do this back in the 1990s. The first space program included the Svityaz project, which included the launch of Zenit from Mrii (Antonov’s aircraft. - RT ). Moreover, it was expected that the first stage of the “Zenith” will be returned. Elon Musk did this only a few years ago. But we are a poor state, what cosmos? ” - said Urusky.
On the ruins of Soviet industry
According to experts, after the collapse of the USSR, Ukraine really inherited a fairly powerful industrial complex, including in the defense sector. However, over the years of independence, it was almost completely destroyed. This process accelerated after the coup in 2014 and the severance of economic ties with Russia, which was a key partner of many Ukrainian enterprises.
One of the main victims of the “creeping deindustrialization” of Ukraine was the former Soviet Antonov Design Bureau, and now the Antonov State Enterprise, analysts point out. Since 2016, the company has not released a single production aircraft. Her leadership admits that one of the causes of the crisis is the lack of cooperation with Russia.
At the same time, the company constantly carries out a variety of structural reforms. In May 2015, Antonov became part of the Ukroboronprom state defense concern. A year later, the Ukrainian Aircraft Corporation was created, which included the Antonov State Enterprise and a number of other enterprises. And at the end of 2019, the property complex of the Antonov Corporation was transferred to the management of the State Property Fund of Ukraine.
- Petro Poroshenko during a visit to Yuzhmash in 2014
- Reuters
- © Mykhailo Markiv / Ukrainian Presidential Press Service
Things are no better in the former Soviet industrial giant - Yuzhmash, which specializes in creating space rocket technology. In 2011-2014. The company's profit fell from UAH 1.9 billion to UAH 450 million, respectively. At the moment, "Yuzhmash" retains salary and tax arrears in the amount of 210 million hryvnias.
As in the case of Antonov, Yuzhmash openly recognized that the roots of the crisis were the cessation of cooperation with Russia. In particular, because of this, the Zenit launch vehicle production program was stopped.
The same picture is observed at the Zaporizhzhya Automobile Plant (ZAZ), which during the years of the USSR was one of the largest in the country. On December 6, 2018, bankruptcy proceedings were launched, and in May 2019, ZAZ property was put up for auction.
In 2017, another industrial giant of the USSR ceased to exist - the Lviv Bus Plant. His former enclosures and equipment were put up for sale. It was decided to demolish part of the buildings.
- Production shop of the LAZ plant
- © wikimapia.org
Similar problems can also be observed at the Nikolaev Shipbuilding Plant, the Kremenchug Steel Plant, the Azovmash Engineering Plant and the Odessa Port Plant.
“Industry is hopelessly behind”
According to RT sources in Ukrainian political circles, there is practically no hope that Oleg Urusky’s new department will be able to turn the tide.
“You can carry out modernization of departments as much as you like. But there is no sense in this. Ukrainian industry is hopelessly behind and cannot even compete closely with EU countries. Russia used to offer assistance to industrialists, but Ukrainian officials chose a different path. And it is not beneficial to either the country or the population. We need to really work, and not engage in constant "reform", - said the interlocutor of RT from the party "Fatherland".
At the same time, a RT source in the party “Servant of the People” says that Kiev does not need to rely on Western assistance - no one needs industrialized Ukraine there.
“There are enough manufacturers in the West. Even if Ukrainian manufacturers could produce industrial products at a decent level, they would still not be allowed into Europe under any pretext. Europe considers Ukraine only as a commodity country. But you won’t build a strong economy, so the republic will be poor for a long time, ”the deputy said.
Denis Denisov, director of the Institute for Peace Initiatives and Conflictology, agrees with this point of view.
“The industry is multi-sector, some industries may be of interest to the West, but in the event of development, Ukrainian industry becomes a competitor for the same European manufacturers, which they are not interested in. As a result, Ukraine should not expect any programs to support such industries, ”he said in an interview with RT.
In turn, the head of the Center for System Analysis and Forecasting Rostislav Ishchenko believes that the economic system of modern Ukraine does not imply the development of heavy industry.
“The structure of the current Ukrainian economy is such that it does not imply the restoration of heavy industry. Even if they wanted to, it would be unrealistic: sales markets were lost, staff ran away, there was no investment. At the same time, the West is not going to create a competitor for itself in the person of Ukraine, ”Ischenko said in an interview with RT.
Moreover, according to the source of RT in the party "European Solidarity", after the rise to power of Vladimir Zelensky, the situation in this area has not improved.
“Zelensky said that he would raise Ukrainian industry. But for now, he is not doing very well. Moreover, the state is forced to sponsor some strategic enterprises, such as Yuzhmash. "Antonov" operates aircraft still built in Soviet times. This applies to all other enterprises. With this approach, Ukrainian industry has no chance. Even if they create as many as three ministries, ”the deputy said.
The situation is aggravated by the general economic crisis that Ukraine is experiencing in recent years, says Denis Denisov.
“Ukraine is in a complex severe economic crisis. She has significant problems in all areas related to the economy. Therefore, it is not surprising that the situation in the industry is far from normal, ”the expert concluded.