INTRODUCTION

In June 1999, Thabo Mbeki took office as South Africa’s second democratically elected president. His election was widely interpreted at the time as a confirmation of South Africa’s non-racial democracy, but it also marked a shift from Nelson Mandela’s priority of racial and political reconciliation towards an emphasis on socio-economic progress.

Vladimir Putin succeeded Boris Yeltsin as president of the Russian Federation in May 2000. Even though he was Yeltsin’s nominee, his election was the first time in Russia’s history that power was transferred from one personality to another through the ballot box, thereby cementing Russia’s post-Soviet democracy.

Both these new leaders face immense challenges of political consolidation and economic reform. Both also confront a difficult and, at times, threatening regional environment in which the economic imperative to restructure and downsize their armed forces must be weighed against the prospect of future conflict. Furthermore, both face a vastly altered global milieu, where their countries are now judged according to tough economic criteria rather than by their political ideologies as was the case in the past.

This article seeks to highlight two areas within the broader context of Russian-South African relations:

the nature of relations between South Africa and Russia, especially in the defence sector; and



past ties and future possibilities in terms of the supply of aviation technology and equipment, both civilian and military.

Given the extent of Soviet aid to the ANC, Nelson Mandela announced soon after his release from jail in 1990 that he would visit the USSR on his very first trip overseas to thank Moscow for its support. In the event, he only set foot on Russian soil on his very last official tour as president in 1999. This nine-year delay was the result of a growing divergence between the Russian Federation government and the ANC/SACP. After the dissolution of the Soviet Union, Yeltsin’s Russia rapidly distanced itself from its links with the ANC and its allies. Instead, it started making overtures to South Africa’s last NP government, despite the fact that majority rule was quite clearly just around the corner in South Africa. After a year or more of negotiations, full diplomatic relations between Russia and South Africa were established in February 1992 — more than two years before apartheid formally ended — and in the summer of this year, De Klerk made an official visit to Russia. Both these developments deeply offended the ANC. In addition, they felt humiliated and undermined by Russia’s wholesale abandonment of an ideology to which they had sincerely adhered for the most part. As a result, they saw their economic and social ideals derided, not only by the west, but also by their political rivals in South Africa.

Relations between the two countries, which had appeared so promising in the early 1990s, consequently languished after the ANC alliance came to power. On at least five occasions between 1994 and 1998, a state visit to Russia by President Mandela was announced and then cancelled, usually for no plausible reason. This caused considerable offence in Russia, but accurately reflected the ambivalence with which the new Russia was viewed by the Mandela government.

Although diplomatic relations were maintained, government contacts were relatively infrequent and, until recently, low-level. Ministerial visits did occur from both sides, but it was only when Thabo Mbeki, deputy president at the time, and five cabinet ministers went to Moscow in November 1998 that the official relationship acquired some substance. A number of framework agreements were signed on scientific and technical co-operation, sports and cultural contacts and on measures to combat organised crime across borders. President Mandela’s state visit to Russia at the end of April 1999 achieved little of substance, but was of great symbolic importance. It now remains to be seen how the relationship between President Mbeki and President Putin will develop.

Bilateral trade has disappointed initial expectations, but the overall volume, which fell dramatically with the rouble’s crash in August 1998, is once again on the rise, reaching about R760 million (roughly US $110 million) in 1999. The balance is very much in South Africa’s favour, especially since many South African exports arrive in Russia via third countries and are therefore not reflected in this figure.

The chairman of the Duma’s international affairs committee, Dmitri Rogozin, recently said that "Russia could be an important partner for South Africa" and might "even consider special legislative measures" to open certain sectors of the Russian market to South Africa on favourable terms. In addition, there were opportunities for co-operation in the mineral and banking sectors, and for joint production in aviation and defence industries.³ Those South African brands established in Russia are doing well. South African Breweries’ US $30 million ‘Gold Barrel’ brewery investment near Moscow is expanding its production and South African fruit, marketed by Capespan, is commonly seen. Russia also sells approximately US $1 billion worth of diamonds annually through De Beers’ Central Selling Organisation, though this has been a troubled relationship and may not continue for long. Furthermore, the ongoing failure⁴ to operationalise either the bilateral Joint Trade and Economic Commission or the Science Commission must be addressed if a proper framework for further ties is to be developed.

To a great extent, progress in the Russian-South African relationship will hinge on what happens in Russia, and on whether President Putin can turn his country’s economy around. Today the once superpower Russia ranks 71 (South Africa ranks 101) out of 174 countries on the United Nations’ Human Development Index, which lists countries according to literacy, life expectancy, schooling, population growth, and per capita gross domestic product (GDP). Between 1975 and 1995, Russia suffered an average 0.4% economic decline every year. The average life expectancy of Russian men is, at 59, 14 years less than that of their western counterparts — a reflection of poor living conditions and widespread alcoholism. There are signs, however, that Putin will make a determined attempt to tackle the issues that his predecessor was unable (or unwilling) to deal with.

Putin’s greatest challenge is to strengthen the power of government at the expense of personalities and vested economic interests and, at the same time, to encourage economic growth and political pluralism. In this task, the new president faces a number of critical short-term difficulties, one of which is to manage and avoid defaulting on Russia’s US $170 billion foreign debt. This — and Russia’s entire economic recovery — may hinge on the continued strength (or not) of global commodity prices. Second, Putin must establish the rule of law within a democratic context, something that Russia has never experienced, and he must also deal with security problems within Russia, such as Chechnya along with others elsewhere in the Commonwealth of Independent States (CIS).

In his State of the Nation address to the Duma on 8 July 2000, Putin painted a grim picture of a Russia plagued by a declining population, rising poverty and threatening political chaos. If current demographic trends continued, the population would decline from 146 million to 124 million by 2015. He committed himself to tackle his country’s many problems through accelerated market reforms, by strengthening the role of the executive at the expense of the powerful oligarchies, and by reasserting Moscow’s control over recalcitrant regional governors.

Putin apparently believes that "only an effective and democratic state is capable of protecting civic, political and economic freedoms."⁵ Despite criticism that his approach represents the "old Russian model of undivided authority and loyalty,"⁶ his economic priorities include the restoration of investor confidence through a number of measures, including the protection of property rights, the curbing of government subsidies and privileges, the reduction of red tape, the easing of the tax burden and reduction of tariffs, the rebuilding of the banking sector, and the reform of the bloated and inefficient welfare system. There are already signs of economic recovery: GDP rose by 8.4% in 1999, and is predicted to increase still more in 2000, at least in part because of the high oil price.

Putin also wants Russia to reclaim its position as great or even superpower in the world. As he put it on 8 July, "Russia’s only real choice should be the choice of a strong country, strong and confident." While Putin’s concept of ‘strength’ appears to include a prosperous economy and a cohesive and law-abiding society, it also implies the need to rebuild the defence establishment. This was severely battered by the failure of the Soviet intervention in Afghanistan in the 1980s, humiliated by its forced withdrawal from the former satellite states after 1989 and finally brought low by its dismal performance in Chechnya between 1994 and 1996. Downsizing, draft-dodging, scandals over unpaid wages and reported abuses and bullying in the ranks have all added to its woes.⁷ Some face has been restored at the cost of western criticism by its relative success in the renewed onslaught on Chechen separatists since 1999, but the war still lingers on and no final victory can be credibly claimed. Reductions in defence spending every year between 1989 and 1999 mean that few, if any, orders for new equipment have reached the Russian military-industrial sector and this has led to the immense problems described later in this article. There are signs, however, that this situation is changing and in January 2000, the Russian government announced a 50% increase in defence procurement. Furthermore, Russian arms exports have by no means ceased. These brought US $3.5 billion of foreign earnings in 1999 and are expected to rise to US $4.3 billion in 2000, making Russia the world’s fourth largest exporter of arms after the United States (US $26.5 billion), France (US $9.8 billion) and the United Kingdom (US $9 billion) in a market with a total estimated value of US $56 billion.⁸

RECENT BILATERAL DEFENCE TIES: EQUIPMENT AND AGREEMENTS

After the fall of the Berlin Wall and the dissolution of the Soviet Union, the former South African Defence Force (SADF) was not slow in establishing contacts with its Russian and Ukrainian counterparts, although it was only on 14 July 1995 that South Africa’s then Defence minister Joe Modise and Russian Defence minister Pavel Grachev signed a military-technical co-operation agreement. This included the prospect of arms sales, joint research, training and services, and the operation, repair and modernisation of armaments and military materiel.⁹

Prior to this agreement, the SADF had purchased the Juvent (later named the SAS Outeniqua) 21 000 tonne ice-breaker from the Ukraine in 1993 for R41 million (then US $12 million), approximately one-third of the cost of building a similar vessel in South Africa.¹⁰ The ship is today seen as ‘useful’ particularly given its ‘roll-on roll-off’ capabilities, although logistics problems have been encountered. These relate to difficulties in sourcing spares from the former USSR as suppliers have gone into liquidation. Those attempting to procure spare parts have found that they could not pay the enterprise’s bank, but have had to take the money personally to the supplier. There have also been problems with the precise identification of spares given the absence of western-type systems and schedules.

THE MIRAGE RE-ENGINE SCHEME

Examples of both the South African Mirage F-1 and the Cheetah fighters were re-engined with the Mig-29 Klimov RD33 (SMR-95) power-plant in 1994. The engine was fitted initially to a (ground-attack) Mirage F-1AZ and, following a successful trial flight, to a (interceptor) F-1CZ. This project was launched when the South African Air Force (SAAF) had no prospect of obtaining new fighters after the cancellation of Project Carver (a twin-engine, South African-designed fighter) in the 1980s. It thus formed part of a more general upgrade of both aircraft. The intention was to enable South Africans to contend with the MiG-23s that had been encountered in Angola, where the SAAF had found it difficult to manoeuvre into an attacking position from the rear due to a lack of power in the Mirage F-1s.

While it was intended as an interim solution, the SMR-95 project would have turned both the Cheetah and the Mirage F-1 into formidable aircraft, well able to bridge the gap to a new fighter. It would not have avoided the need, however, for a new fighter to replace both types from about 2015.

The SMR-95’s power, fuel-economy and carefree throttle-handling were reportedly very well received by SAAF pilots. Fuel consumption was around 33% lower, but this programme was considered to be unfeasible due to a number of reasons. These included expense, different philosophies of logistics and design/maintenance standards between the South Africans and the Russians, redesign complications including the need to ‘straighten’ the MiG-29 engine and relocate the gearbox, and only comparatively limited performance (15%) improvements putting the Mirage F-1 on a par with the Mirage 2000. The use of Russian specifications, in the opinion of SAAF specialists, would have necessitated the creation of two South African air forces, one Russian and the other western-based, just as Libya, Malaysia, India and Germany have reportedly had to do. The Klimov engine was engineered for 300 flight hours between overhauls. By comparison, the SAAF achieved between 1 200 to 2 000 hours for the O9K50 Mirage engine, and expected at least 600 hours from the Klimovs. Test-bed results apparently showed that this goal was difficult to achieve.

This project was terminated mainly because of South African defence cuts in the early 1990s. Once it became clear that the new government was willing to fund a new fighter programme, any thought of spending more money on the Mirages finally fell away in the middle of the decade. The possibility of reviving the project for the African Aerospace and Defence Show in Pretoria in 2000 was mooted, though it was unclear who would pay for the recertification of the aircraft. Although South African industries were involved in upgrading F-1 avionics for at least two nations by mid-2000, it is believed that the benefits of such a programme would principally fall to the Klimov factory rather than to the South Africans.

THE DEFENCE PACKAGES

In 1997, the Russian Federation Armament State Corporation, Rosvoorouzhenie, participated in the tender for various items required by the South African National Defence Force (SANDF). The items bid on and offered were: the Kilo 636 submarine; the MiG-29 fighter; the MiG-AT and Aermacchi/Yak-130 Lead-in Fighter Trainer (LIFT) aircraft; and the T-80U tank.

The South African decision announced in September 1999 was made in two stages:

the issuing of a request for information (RFI);



followed by a shortlist of potential suppliers that were issued with a request for proposals (RFP) based on three separate criteria: the technical/military specifications and functional abilities; countertrade¹¹ aspects (the minimum expected was 100%); and the financing arrangements.

Ultimately, the South African decision was as presented in table 1.

RUSSIA AND THE PACKAGES

Why did the Russian bids fail?

None of the Russian packages, with the exception of the Aermacchi/Yak-130 fighter-trainer, went through to the shortlist stage of an RFP. The reasons for this hinged on concerns about serviceability and technical suitability, though the Russian bids also did not offer any major cost-savings. There were doubts, too, about supply and build quality (particularly of the submarines).

In terms of the naval bids, the size of the submarines was considered too large (at 3 000 tonnes, roughly three times the size of South Africa’s existing Daphne class), which would have demanded changes to the South African Navy’s (SAN) syncro-lifts and repair sheds. The Kilos also require a relatively large number of personnel (52 for Kilos as opposed to 30 for the selected Type-209s), and reportedly had also shown serious battery temperature problems in warm water. In the case of the submarine offer, the countertrade aspects of the Russian offer were not a factor¹³ as the deliberations did not reach this stage.

With regard to surface ships, the Russians did not respond to the 1997 RFI. However, in 1995, a SAN team visiting Russia had viewed the Gepard class corvette as a possibility for the requirement at that time — but at 1 932 tonnes and 102 metres in length, it was considered too small for South African waters and also did not operate a helicopter. These ships had apparently been constructed for export to India, but the order had been cancelled for undisclosed reasons. In 1995, the South African team had also been shown the technical specifications of the Krivak III class frigate. Although this was a ‘paper’ ship only but was about the correct size required at 3 100 tonnes, it required a staff complement (194) too large for the South African specification.¹⁴

The Kamov Ka-28 model helicopter was also informally investigated as a possibility for fulfilling the maritime helicopter requirement, but was assessed as being similar to South Africa’s existing Oryxs/Pumas — that is, intended for support rather than the required attack missions. The same logistics, supply and maintenance problems highlighted above were also identified. The Ka-28’s high centre of gravity made them, in the words of one senior naval officer, "[u]nsuitable for South African seas, and unsuitable for South Africa’s type of ship," as they would be operating from what is still a relatively small vessel for South African waters.¹⁵ Their height would also have necessitated a high hanger structure. Furthermore, the Ka-28 was seen as having poor fuel efficiency, thus limiting task times.

The fighter-aircraft proposal for MiG-29s, like the submarines, did not pass the initial RFI stage. Although it was assessed as having ‘good manoevrability’, the MiG-29 had a number of critical drawbacks in the eyes of the SAAF:

It was a twin-engined aircraft, which exceeded the South African requirements due to its cost Implications.



The Russians were not experienced in creating an in-country maintenance capability. Most customers send aircraft and engines back to the Russian Federation for repair and refurbishment.



The aircraft had a limited range and payload and the avionics were relatively dated. It also lacked the versatility of other contenders given the Russian focus on designing aircraft for specific (for example, ground-attack, interceptor) rather than for a variety of roles.



The same limitations on engine life and spares were evident that were encountered with the Klimov Mirage re-engine scheme.

Similarly, aircraft such as the Su-27s were not considered due to high life-cycle costs. These were "a totally different category of aircraft, way beyond South Africa’s capability requirements and affordability."¹⁶

In terms of the LIFT, the MiG-AT did not impress as offering any real step forward from current technology. Moreover, it was seen as very expensive and had only flown as an aerial demonstrator, with the consequent high risk attached to its conversion into a production aircraft. This is a problem similar to that which South Africa has faced itself with its Rooivalk attack helicopter, recently put into production for the SANDF in the hope to attract foreign orders. The Aermacchi/Yak-130 offering was shortlisted for the fighter-trainer (LIFT) along with the Czech L159, the Aermacchi MB339 and the UK Hawk, but was ultimately rejected on the basis of its cost and performance. The Hawk, for example, was assessed at 18% greater functional utility.

For the army, the T-80 tank was deemed to be old technology. Russian tank systems were regarded as not having kept up with western developments.

In summary, there are three main reasons why the Russians did not do well in tendering for South Africa’s equipment requirements in 1998/99:

Pretoria’s main focus was to win foreign investment for South Africa through countertrade, not to re-equip the SANDF. The Russians were in no position to make any serious investment in South Africa, and neither did they have much in the way of new and immediately useful technology to transfer. The Aermacchi/Yak-130 deal, the only item shortlisted, for example, apparently only offered a limited countertrade deal.



There was a strong imperative to ensure that the defence deals went to South Africa’s major European trading partners — Germany, Britain, France and Italy. This was partly to cement country-to-country links and partly to show the US that South Africa did not need Washington. Russia had no role to play in either scenario. As it turned out, France did not get the intended major package (the tanks), but has since won the combat management system for the patrol corvettes, and is likely to be given another major project in due course. In the opinion of some, the Swedes entered the act by luck: the Gripen was the only new-technology fighter that was affordable and it had the link with British Aerospace. Spain lost out on this round, but may win the order for new transport aircraft. In this regard, Pretoria wanted to position South Africa within what it perceives as the unfolding nature of a global defence industry divided into two emerging superblocs — Europe and the US. South Africa, it was argued, had more to gain by being a partial systems supplier to the Europeans than a complete systems manufacturer to niche market areas.



Russian equipment has a reputation of being very difficult to support. Several countries using Russian equipment have reportedly suffered a range of problems when trying to obtain support and spares.

FUTURE PROGNOSIS: REVIEWING THE REVIEW?

Russia’s future ties with the South African defence sector thus depend to a great extent on South Africa’s future requirements, as indicated in the 1997 Defence Review (table 2).

Maritime patrol aircraft to replace the unsuitable and inadequate turboprop Dakotas:¹⁸ This is currently seen as the third most important priority after the medium transport aircraft and short-range air-to-air missile. The need is for a mix of long-range and coastal types. The planning dates for the original mix of medium and long-range types were 2005 and 2008, though new aircraft will only be acquired by 2010. By mid-2000, it appears most likely that a four-engined aircraft will be employed in this role, probably the three C-130s that were sourced from the US Navy, given the limitations on single-engine flying range over sea. The P-3 Orions offered by the US Navy are seen as unsuitable due to the age of the avionics and the high levels of stress and corrosion of the airframes. The Russian BE200 amphibious aircraft is seen as having possible applications in this regard given its "interesting collateral utility."



Medium transport aircraft (50-seaters): There is a need to improve the type of aircraft that could provide STOL battlefield support such as the Transall C-160s or CASA-235s. There is probably a requirement for eight aircraft from 2003 onwards. The preferred types include the CASA C-235 or the FIAT/Lockheed C-27J, although the Antonov An-74 or An-140 are also possibilities. There is apparently little prospect of reinstating — as an interim measure — the nine C-160 SAAF Transalls retired in the early 1990s.¹⁹ The cost of recertification is estimated at US $5 million per aircraft for what is described by some officers as "an old lady", whereas a new aircraft will cost US $18 million. Moreover, the C-160 was designed for European rather than the ‘hot and high’ conditions encountered in Southern Africa. Even so, the use of such aircraft (or the CASA C-235s) would open up an estimated further 200 airfields in Southern Africa for operational usage when compared to the C-130s.



Medium heavy transport aircraft (90-seaters): The planned medium-heavy transport fleet of 12 C-130s is seen by some analysts as "clearly not adequate, despite current SAAF protestations" and "will have to be expanded to around 20/24 aircraft if the SAAF is to meet the demands that will arise from regional missions and commitments."²⁰ However, the SAAF has pointed out that its fleet of nine operational C-130s (seven original aircraft, plus the five acquired from the US of which two are operational) are currently flying only 200 hours each per annum. The four-engine Antonov An-70X could be a contender if new aircraft were to be acquired, though there is a reluctance to split the aircraft types operating, and the An-70X also remains only a flying prototype.²¹ In reality, the ongoing SANDF funding shortage is unlikely to make this item an immediate procurement priority.



Medium-light transport aircraft: Probably 12 aircraft will be required from 2002 onwards. The original requirement was for 20 to enter service between 2001 and 2008, although this is now unlikely to commence as soon as envisaged. The preferred type is apparently the CASA C-212.



Communications/VIP aircraft: The HS-125s have been discarded and need to be replaced by a similar type. No firm time-scale has been attached. There is also a requirement for a second presidential aircraft with intercontinental range, a decision that should be reached in 2000.



Airborne surveillance and ELINT: A replacement of the Boeing 707s will have to be sought within 10 years, partly because of the high emission levels of the engines.



Light utility aircraft: The original requirement was for some 24 aircraft to replace the Cessna-185. Although some Cessna 185s have been modernised, this requirement remains for 2002, given the need to upgrade sensors for effective border protection and police co-operation.



New/additional fighters: The fighter force, if found inadequate, will be met by increasing the number of Gripens.



Short-range infrared air-to-air missile: This is a short-term requirement, where the cost per round is critical, as is the reliability of supply.

six strike-craft operational until 2010;

four mine-sweepers;

four mine-hunters;

four corvettes/frigates;

three submarines; and

two combat support vessels.

There are thus no short-term major requirements open, apart from the replacement of the Ton class mine-sweepers, but this could be met by acquiring four ex-German Navy Type-351 MCMVs (plus two spare vessels), albeit only as an interim solution, in 2000. Looking at the longer term, there are a number of requirements:

A replacement for the six Reshef/Warrior-class strike craft now being upgraded and due to retire from 2010: If funded, this would arguably be best met by extending the patrol corvette order to six to eight ships, although the Navy has not yet decided.



Mine-countermeasures vessels to replace the four River-class and the four German Type-351 MCMVs: These are likely to be built locally to a western naval design. This is unlikely to happen before 2015 or even 2020.



There is a need for more than four patrol corvettes — six is the operationally practical minimum — and for a fourth submarine. But both will be met, if at all, by acquiring the same types as currently in hand or planned.



In the longer term, the Navy will need a second replenishment ship to complement the locally-built 12 500 tonne SAS Drakensberg and then a second new ship to replace the Drakensberg.



The Navy also needs, but will not necessarily acquire, amphibious capability. If authorised, this requirement would best be met by a newly built ship to one of several designs currently being offered by France, Singapore, Spain/Holland, Italy, Germany and the UK. This capability was offered to South Africa recently by the US government in the form of the 8 500 tonne Newport-class landing ship tank (LST), although this was considered by the SAN to be "steam technology" with associated maintenance and personnel problems.²²

THE SOUTH AFRICAN ARMY

The intention for the future is to manufacture most Army equipment locally and almost certainly to western designs. The South African Army is about to begin a major ‘planned capital renewal programme’ which follows the recently approved equipment programmes for the SAAF and SAN. Defence minister Mosiuoa Lekota argued in his 2000 budget speech that this would be a "primarily domestic acquisition programme." This will bring orders for South African-based companies including Denel, Vickers/Olifant Manufacturing Company (OMC), African Defence Systems (ADS), the Grintek group, and many smaller companies. As Helmoed-Römer Heitman noted, it will create considerable business potential for foreign companies whose equipment will be manufactured in South Africa, in the form of subsystems and components, or as development partners.²³

Current planning envisages programmes running over a period of some 15 years, commencing from around the middle of this decade. Key elements will be some 95 new main battle tanks (MBTs), between 200 to 300 new infantry combat vehicles (ICVs) to replace the Ratel, more than 1 000 new mine-protected armoured personnel carriers (APCs) to replace the Buffel and Casspir, a man-portable air defence system (MANPADS) and a short-range air defence system (SHORADS), and several hundred tactical logistic vehicles. The Army will also be acquiring ADS’s AS-2000 artillery target engagement system, a new anti-tank missile, and an automatic 40mm grenade launcher, as well as an upgrade of some existing systems. Other programmes, such as new tactical communications equipment, are already in the production stage. (A summary of the possible new acquisitions outside of the current packages appears in table 3.)

There has been a huge decrease in defence orders. The defence budget declined from 7.9% of GDP in 1990 to 3.7% in 1998. This has resulted in a reduction in the total number of defence industries from 1 800 in the mid-1990s to around 600 core industries today. Military industries have had to survive exclusively on export sales which totalled (in the defence sector), as already mentioned, US $3.5 billion in 1999, but, in the absence of an internal market, there are still not enough foreign buyers to sustain all of Russia’s defence-related industries.



Russian air carriers have reduced their orders from domestic suppliers due both to their own reorganisation and increased foreign penetration of the Russian market. The monopoly of Aeroflot was broken in 1990, and at present there are over 300 airlines registered in Russia and 200 in the other CIS countries, although the 15 largest airlines handle about 75% of the volume. Aeroflot’s fleet now comprises 26 foreign-leased aircraft out of a total of 125,²⁷ but civilian orders are going to western manufacturers, including Boeing and Airbus, partly due to problems of perception. For example, in July 2000, Hungary announced the impending retirement of its fleet of six Tupolev Tu-154s (similar to the Boeing 727 series) in April 2001. The airline’s chief executive said: "They are good planes, they are safe planes, but they have become compromised in the eyes of the public."²⁸



Related to the above, a well-organised leasing system for civilian aircraft is absent. According to the US Chamber of Commerce: "One of the most important impediments to the rebirth of the Russian aircraft industry is the lack of legislation and capital to allow aircraft financing in Russia. Until this problem is solved it will be more financially attractive for Russian airlines to obtain foreign aircraft under lease than to pay full purchase price to Russian manufacturers who have no access to the leasing system."²⁹



State investments into R&D have been considerably reduced.



Finally, there has been very limited success in defence conversion, with many converted industries in dire straits.

All the above is indicative of the challenges that Russia and its economy have encountered in trying to reform the economy and integrate globally. The global role of the Russian aviation industry will depend to a large extent on what happens locally rather than vice versa. But, there is some light at the end of the tunnel.

Four core production groups have emerged in the Russian aviation industry over the past five years, assisting in specialisation and possible access to the global market. These are:³⁰

Mig-MAPO: Created in January 1996, uniting 14 enterprises, employing 60 000 people. Products include the MiG-family of aircraft and Kamov helicopters.



Sukhoi Military Industrial Group: Created in August 1996, consisting of 32 enterprises and four R&D bureaux. The main products include the Sukhoi line of fighters and Beriyev amphibians.



Ilyushin Production Complex: Created in January 1997, it is the producer of most long-range Russian aircraft including the Il-76 and Il-96, and has also carried out design work for Boeing on the overhead baggage lockers for the Boeing 777 aircraft.



ANTK Tupolev Production Group: Projects include work with Boeing and NASA to develop a supersonic passenger jet, and involvement on the Airbus A-3XX ‘superjumbo’ programme.

The MiG-29 SMT fly-by-wire fighter offers the promise of new export orders, as do the Tupolev TU-334 medium-haul civil airliner, the joint Ukrainian-Russian Antonov An-74 military transports, and the Beriyev BE-200 multipurpose (fire-fighting, transport and cargo) amphibian. These new aircraft complement the impressive standards set by workhorses such as the Il-76 and Antonov An-124-100 transports. In 1998, it was estimated that between 1 000 to 1 200 new medium and long-haul aircraft would be required in Russia alone by 2001.³¹

A new generation of business leader is also coming through the ranks, represented by people such as Sergei Nedoroslev, the head of the Kaskol high-technology holding group. He and others are working to shake off the image of unreliable, inflexible, Soviet stereotypes. Kaskol has a stake in the now privatised Sokol plant at Nizhny Novgorod which has produced the twin-seat MiG-29 and MiG-31 and which manufactured more than 15 000 aircraft during World War II peaking at a rate of over 25 per day. It is once again beginning to find its feet in the radically altered defence environment. The Russian government has recently approved the export of the MiG-31, originally designed to intercept incoming cruise missiles. China may be the first customer.

Sokol has also embarked on a significant US $4 million per aircraft upgrade of the venerable MiG-21 for the Indian Air Force, including new avionics, generator and weapons systems. There are 1 400 of these planes in service around the globe, including in African air forces to which Sokol is hoping to market this upgrade kit. This is not necessarily in the best interests of South Africa, however, which is geared towards the decreasing militarisation of interstate relations on the continent. But, it must be expected that an unstable Africa will remain an attractive market for Russia, the Ukraine and others that possess large, relatively low-technology weapons stockpiles.³² In this way, the continued decline of the Russian arms industry may have significant consequences for Africa, given where this sector may increasingly be forced to sell, and posing challenges for South African foreign policy with continued wars on the continent.

Nizhny Novgorod, until recently, was ‘closed’ to western visitors on account of the Sokol plant and the Lazurit Central Design Bureau, responsible for the radical titanium-hulled Sierra-class nuclear attack submarine. But, the future for such industries does not lie exclusively in the defence sector. Without any aircraft orders from the Russian state since March 1994, Sokol has pinned its commercial hopes on a new light commuter plane, the turboprop M-101 Gzhel. This aircraft should be certified during 2000, and will be marketed for around US $1.2 million, much cheaper than its western competitors.

Sokol has also had to streamline its workforce by 7 000 from a peak of 30 000 and institute a conversion programme branching off into the manufacturing of seagoing pleasure craft, trolley-buses, hydroplanes, kitchenware and even asphalt. These have not been easy times, especially since the plant has had to maintain its production capabilities as a government contingency, but without any financial support from the state.

Most importantly, Sokol, like other recently privatised corporations such as the Rosvertol Mi-26/35/28 helicopter plant in Rostov-on-Don, has had to develop a totally new, commercially oriented mindset, where the customers (now external clients) come first. This means that reliability, cost-effectiveness and the market rather than the state dictate the path and price of production and development.

If its impressive technologies are to work for Russia, its industries will have to become part of the global aviation market. There has been some co-operation with western suppliers, although this has been problematic in recent times for a number of reasons:³³

The NATO action against Yugoslavia has had a negative effect, particularly on co-operation with NATO partners.



There are fears that western companies are only interested in using Russian technology to expand the export of their own products to third countries — for example, utilising Russian armour on tanks.



Related to the point above, there are fears that western companies will also use these technologies for local production rather than for joint ventures in Russia.



There are concerns of competition in third markets, sometimes by other Soviet states, but also by competitors such as Israel in the refurbishing of aircraft in Africa.



There are suspicions about the application of western conditionalities in joint ventures.



There are problems of compatibility in standards and specifications.



Western subsidies for exports, such as in the cases of US exports to Turkey and Greece, make Russian prices unattractive.³⁴



Finally, in the civilian as in the military domain, it is very difficult for a Russian corporation, whatever its technical and financial strengths, to compete against the domination of Boeing and Airbus.

In summary, the Russian aviation industry possesses a number of advantages:

High levels of technical ingenuity and skill remain. For example, the Antonov An-74 and An-124-100 transports, Mi-26 heavy-lift, Mi-35 and Kamov Ka-52 ‘Alligator’ combat helicopters are recognised as being among the best in their class in the world.



There will be more joint ventures, both internationally and within the CIS. The Soviet Union’s practice of spreading production across its republics means that today’s Russia can only manufacture 18% of its military requirements independently of other CIS members, notably the Ukraine.³⁵ The use of foreign technologies (particularly avionics and engines) with Russian airframes could assist in overcoming certification and logistics problems. The use of Pratt and Witney, General Electric and Rolls Royce engines is increasingly commonplace, as is the installation of foreign avionics from firms such as Rockwell and, in the case of the Beriyev BE-200, Allied Signal. Foreign ventures with certification agencies, such as the French Bureau Veritas, could assist in improving technologies to comply with western standards.



Russian aircraft are still competitive in a local civilian market where there is a large demand for new aircraft at the rate of 100 to 300 per annum, although at the moment most airlines are unprofitable and cannot afford to modernise their fleets. In 1996, Russia had 8 203 registered civilian aircraft, including 2 847 passenger liners, 824 cargo planes and 2 476 helicopters.³⁶



Ultimately, the strength of the Russian aviation industry will reflect the success, or lack of it, of attempts to rebuild the Russian economy and place it on a sound market footing. This is not easy in an uncertain economic environment with a fluctuating exchange rate, unstable fuel prices and low (though improving) global investor confidence. It remains a high-technology industry operating in a large domestic market and, at the same time, seeking to integrate with the global economy. This may offer opportunities to South Africa such as those set out below. 

CONCLUSION: INTO AFRICA?

There appears to be only a limited possibility that Russian equipment will be selected for any major future South African system requirement. The South African government is committed to link with major western powers in terms of defence co-operation and technology. There is also a fear that the further diversification of acquisition would produce far too many support and training problems. Thus political, technological, technical (support) and military considerations all push South Africa strongly towards remaining with western equipment and expanding these links. There is apparently little that Russia can offer that could outweigh these considerations. With regard to the South African Army, the intention of the government is that its main equipment programmes should be handled as national programmes to benefit local industry as much as possible.

However, there may be possibilities for the acquisition of transport aircraft such as the Antonov An-74 or An-140, perhaps through the leasing of Antonovs and/or the Beriyev BE-200 when (and if) the latter is certified. On the level of individual weapons or subsystems, there may be potential for co-operation (as with the AA-11 infrared air-to-air missile reputedly acquired by the SAAF in the 1990s), particularly in the area of artillery rockets, intelligent shells and missiles of various types. Again, however, concerns about Russia’s ability to sustain build-lines are critical, especially since South Africa will maintain only small stocks of key weapons such as missiles.

Such armament procurements will have to pass through the tender procedure of the Procurement Secretariat in South Africa. Previous experience suggests that the Russian side will need to fulfil these requirements in both the technical and non-military (countertrade) areas if they are to be serious contenders. In this regard, the Russians, it is felt by some in South Africa, will have to change from the "You bring all the money, we have all the expertise" attitude if they are to engage in real joint ventures with foreign partners.³⁷

Sergei Nedoroslev contends that South Africa and Russia can offer each other advantages in this regard.³⁸ Russia has a strong technology base and manufacturing ability, but Soviet isolation resulted in a shortage of personal contacts, unfamiliarity with the demands of global markets, and an unco-operative mindset. South Africa and Russia, he has argued, can now find synergy in these areas. There are three broad areas of potential co-operation:

The refurbishment of Russian aircraft in Africa: Sixteen sub-Saharan African countries out of a total of 48 operate Soviet military aircraft, of which at least eleven³⁹ operate MiG-21 aircraft (or the Chinese J-7) or newer. In 1999, for example, Angola and Ethiopia each took delivery of Sukhoi Su-27s; and Eritrea acquired MiG-29s. This might offer possibilities for joint ventures in refurbishment. In 1999, Israel reportedly upgraded fifty MiG-21s and MiG-23s for Ethiopia. The question is moot, however, whether South Africa wants to support these countries in the upgrading of their air forces when their people are mired in poverty.



Purchase of civilian aircraft by African states: The Mil-17 and Mil-8 helicopters have certainly proved their worth, but to move from these to large commercial aircraft will be a major challenge. Apart from the attitudinal problem already referred to, no Russian civilian aircraft are at present being flown in the region and it may be almost impossible to break into a South African and regional market dominated by Boeing, Airbus and the North American and European manufacturers of smaller planes. Among the hurdles to be overcome will be concerns about the availability of spares and service along with public perceptions, however inaccurate, that any aircraft made in the former Soviet bloc is unsafe.



A strategic defence production partnership? As noted, current global defence trends suggest a world moving to two major blocs — the US and Europe. There is clearly a need for Russian industry to connect with one or another and to standardise its logistics and technology according to western standards. Here, the widespread prejudice against Russian products and negative perceptions about logistics and reliability may offer an exciting prospect for joint ventures between Russian and South African enterprises. The South African industry is small enough not to want to dominate (or absorb) the Russian, but sufficiently technically proficient to hold its own. It also offers some parallels, having undergone a reconfiguration of its own since 1990. Today, the South African arms industry employs around half of its peak of 120 000 in the 1980s. A number of major South African defence producers have been bought out by western-based companies.⁴⁰ The question remains, however, whether the South African industry is prepared to be (and capable of being) the champion of this Russian cause.

However, as noted above, the path of the bilateral South African-Russian relationship will depend to a great extent on what happens in Russia under President Putin who appears committed to make Russia politically and economically strong once more. Military power and reform will be a critical part of this programme, despite the view expressed by Dmitri Trenin of the Moscow Carnegie Centre that "[t]he lesson of the Soviet Union was that military power did not equal economic strength."⁴¹

Whatever the outcome, Russia today represents a reversal of many of the features of the Yeltsin era and displays convergence rather than divergence with western political and economic norms. In this environment, Russian-South African relations are likely to improve, though they will never be of primary importance to either side. South African business is now cautiously optimistic about trade and investment with Russia, but the small number of delegates in the South Africa Foundation business visit to Russia in June 2000 indicates that there are still substantial reservations and despite some successful but relatively minor South African forays into the Russian market, the process of rebuilding faith and trust in Russia after the August 1998 rouble crash will clearly take some time. For defence ties to prosper, both governments will have to display an unprecedented level of political commitment if Russia’s troubled but fast-changing defence industries are to challenge South Africa’s current suppliers seriously.

NOTES

Drs Greg Mills and Sara Pienaar are the National Director and Research Fellow, respectively, at SAIIA. The authors would like to thank Helmoed-Römer Heitman and Johan Lehmann for their helpful comments. Additional information for this article was collected during a series of non-attributable interviews in South Africa in July and August 2000, and during the course of a self-funded research trip to Russia in July 2000, which included visits to Moscow, Nizhny Novgorod and Rostov-on-Don. An earlier version of this article appeared in Defense Analysis, Winter 2000.

See V Shubin, ANC: A view from Moscow, Mayibuye, Cape Town, 1999, for a detailed exposition of the relationship from the Moscow side.



A Guelke, South Africa in transition: The misunderstood miracle, IB Tauris, London, 1999, p 42.



Interview, Russian State Duma, Moscow, 12 July 2000.



The Trade Commission was to be held in 1999, but, by mid-2000, had been postponed indefinitely by South Africa. The Science Commission has been postponed by the Russians until 2001.



Putin address details nation’s woes, The Moscow Times, 11 July 2000. For details on the scale of Putin’s economic challenges, see Fragile Russian miracle, New Times, June 2000.



L Shevtsova, Moscow Carnegie Centre, cited in The Moscow Times, 11 July 2000.



See W E Odom, The collapse of the Soviet military, Yale University Press, New Haven, 1998.



The Economist, 25 March 2000.



Tied up with Russia, Salut, September 1995, p 10.



Lady of reknown bows to Ukrainian ice-breaker, Paratucs, April 1993.



For details of the packages, see <www.polity.org.za/search/Default.asp>.



Business Day, 16 September 1999.



For details, see Presenting the MiG-AT, Salut, June 1998; Looking at the Rosvoorouzhenie package deal: An opportunity to modernise extensively at a very low cost, Salut, February 1998.



See M Edmonds & G Mills, Uncharted waters: A review of South Africa’s naval options, CDISS/SAIIA, Johannesburg, 1995; M Edmonds & G Mills, Beyond the horizon: Defence, Diplomacy and South Africa’s maritime opportunities, CDISS/SAIIA, Johannesburg, 1998.



Interview, SAN HQ, Pretoria, July 2000.



Interview, SAAF, Pretoria, July 2000.



Accepted August 1997.



The Dakota TPs not only have a limited range, but the aircraft have two other major failings: they apparently leak, with negative consequences for the equipment carried; and they cannot carry the surveillance system developed for them in the 1990s. There are also reportedly problems with the airframes cracking.



In the opinion of many, the retirement of the C-160s was a "tragic miscalculation" given both South Africa’s current requirements and the C-160s capabilities (short take off, and the ability to ferry an Oryx without, unlike the C-130s having to remove the rotor head), but also because of the manner in which this occurred.



Discussion, Helmoed-Römer Heitman, April 2000.



For information on the types of transport aircraft available globally, see Jane’s Defence Weekly, 16 February 2000.



Interview, SAN HQ, July 2000.



See H-R Heitman, South African Army re-equipment, Jane’s Defence Weekly, 3 May 2000.



Russia’s premier planemakers ready for take off, Global Defence Review 2000.



See G Feller, Leveraging the base, <www.rotor.com>.



Aviation industry: Russia, US Foreign and Commercial Service Report, 1998, <www.readeport.org>.



Red dawn: Current state of Russia’s aviation industry, <www.innov.ru/english/news/ airindustry.htm>.



See The Moscow Times, 14 July 2000.



Aviation industry: Russia’, op cit.



For details on the composition of these groups, see ibid.



Ibid.



See V Vadrak, Ukraine on the world arms market, National Security and Defence, 6, 2000, pp 60-4.



See the sections on France and Israel in The true spirit of co-operation, Global Defence Review 2000, pp 203-4.



Why did Bell win the helicopter tender?, Turkish Daily News, 24 July 2000.



See G Feller, Adjusting to a turbulent market, <www.rotor.com>.



See Aviation industry: Russia, op cit.



Interview, Armscor, July 2000. This view was reflected by a number of South Africans.



Interview, Moscow, 12 July 2000.



Angola, Republic of Congo (Brazzaville), Eritrea, Ethiopia, Madagascar, Mozambique, Nigeria, Sudan, Tanzania, Zambia and Zimbabwe. See The Military Balance, OUP/IISS, Oxford, 1999.



As of August 2000, the companies which have been bought out are: OMC by Vickers, Paradigm Systems Technology partly by Bae Systems, ADS by Thomson SA, Advanced Technologies and Engineering (ATE) partly by Bae Systems, Grintek Aviatronics partly by Celsius Technology of Sweden, and the European Aeronautic Defence and Space Company (EADS) has a share in Reutech Radar Systems. The privatisation of Denel was announced in August 2000. Denel, ATE, Grintek, ADS and Reutech are considered to be the ‘Big Five’ of the South African arms industry.



Interview, Moscow, 14 July 2000.