Yeltsin has another go at speeding up Russia defence export bureaucracy by limiting processing time for orders to 20 days

Published: 7/26/1999

The Russian Government has drafted plans to try to speed its processing of foreign orders for in an effort to boost arms exports. Boris Yeltsin is expected to sign a decree in the near future to limit the processing of arms orders by Russian bureaucrats to 20 days, according to Deputy Prime Minister Ilya Klebanov. It remains unclear, however, why Yeltsin has to sign a decree to limit processing of orders to 20 days - since he signed such a decree last summer, said Konstantin Makiyenko, deputy head of the Centre for Analysis of Strategies and Technologies. He also endorsed a list of specific arms, components and materials allowed for export and a list of countries to which the Russian defence industry should feel free to export. Theoretically, Russian bureaucrats should automatically authorise a deal if both the customer and merchandise are on these two lists. Makiyenko and other independent experts have critisised Klebanov, whom Yeltsin appointed to oversee the Russian defence industry on May 31st. They disapprove of his idea of setting up as many as five separate agencies to oversee Russia's defence and aerospace industries, which previously were supervised by just two government bodies - the Economics Ministry and the Russian Space Agency. They believe the layers are unnecessary simply adding to the complexity of an already complex system. Currently every foreign order for Russian-made weaponry has to be authorised by several agencies, including the Defence Ministry, Trade Ministry, Economics Ministry, Federal Security Service, and the Federal Agency for Legal Protection of Results of Intellectual Activities of Military, Special and Dual-Use Purposes. Some of these agencies, such as the Economics and Trade ministries, receive no fees from such orders and have little incentive to process orders quickly. Yeltsin always eager to take a 'leadership' stand, has publicly told his deputy prime minister he was upset by the decline of the industry and vowed to meet with him more often in order to keep a watchful eye on Russian arms manufacturers. In addition to his decrees on granting export permits, Yeltsin will also order a bill drafted to substantially lower the taxes paid by Russian arms makers, according to an aide to Klebanov. The bill, if passed by the parliament and signed into law, would temporarily exempt Russian arms manufacturers from property taxes to revive the cash-strapped industry. In a similar move, the Duma, passed a bill on June 16 to support Russia's space manufacturers with tax exemptions and various levies aimed at protecting the Russian industry. Some commentators believe that the streamlining of these procedures will allow Russia to compete more effectively in the refurbishment of former Soviet equipment, an area that has proved difficult to date. Makiyenko said that Russia has already lost “hundreds of millions of dollars” as foreign clients have become frustrated with delays. He said last year alone saw Congo and another country buy dollars 100 million worth of army hardware and spare parts from Belarus and Ukraine after “losing patience” with Russia. China was even shipping its Soviet-made tanks across Russia to be repaired in Belarus because Minsk processes such orders much faster, experts said.

Article ID: 700