On January 12, 2011, 103 out of the 417 registered members of the Ukrainian parliament voted for changes to the Law “On the Armed Forces of Ukraine.” The bill provided for two percent of GDP being used for materiel. Someone once said: “If you don’t want to feed your army, prepare to feed your enemy.”
A week before the New Year the Ukrainian government announced administrative and military reforms. The press service of Lieutenant General Hryhorii Pedchenko, in charge of the Ukrainian Armed Forces [as appointed by the president of Ukraine, being Commander-in-Chief. – Ed.] quotes him as saying that the draft Strategic Defense Bulletin until 2025 provides for three armed services in Ukraine: the Army, the Air Force, and the Navy. Pedchenko added that “we will have new structures: red-alert and SWAP-like units that will be based on rapid deployment forces.” He also claimed that this new table of organization will provide for the funding of major tactical and strategic developments.
One day prior to this interview, Pedchenko said that 70 percent of the new Ukrainian defense budget would be allocated to maintenance and 30 percent to research and development: “The Ministry of Defense and the General Staff [of Ukraine] have estimated their 2011 budget: 27 billion hryvnias. This is the financial resource our Armed Forces need to implement the tasks assigned them in full measure, to upgrade their materiel and solve their personnel and social protection problem, and emergency reserve problems.” He went on to say that the government is unable to finance the Armed Forces on an adequate level, and that the Ministry of Defense and General Staff had taken a balanced attitude to the 13.6 billion hryvnias’ worth of central budget appropriations in 2011 — lower by half than actually needed; hence the new realistic tasks and guidelines. Pedchenko noted that “our Armed Forces must have only one function, that
of protecting our Fatherland,” whereas replenishing “special surplus funds” is an alien function. He also sounded very optimistic, saying that some 40 combat aircraft could be made operational within the next five years, given the current budget appropriations.
Optimism apart, it is sad to realize that the home of one of the world’s leading aircraft designers and manufacturers has to keep patching budget holes. President Viktor Yanukovych must have felt the same way when he signed an edict, in late December, that placed the whole military-industrial complex under his command, setting up a government-run business entity known as Ukroboronprom, and specifying that its director general is to be appointed as submitted by the prime minister and subject to dismissal as ruled by the president. One wonders about the motives behind this decision of the current head of the Ukrainian state: worries about some of the ridiculous decisions made by the current prime minister, or the desire to raise Ukraine’s military-industrial complex to a level where it can meet the current, complex challenges.
Valentyn Badrak, an expert in the field, commented on the possibility of Ukroboronprom having an impact on Russia-Ukraine-military-industrial-complex opportunities in 2011 by saying that Ukroboronprom would be heavily influenced by Russia, adding that there would be a small likelihood of conflict of interests: “Unless these government-run business entities are subject to market conditions, they will be able to collaborate only within the boundaries of the Russian Federation, but they will need business collaboration in the West, as well.” He went on to say that Russia’s design bureaus have lost certain links in the modern war aircraft construction chain.
http://www.day.kiev.ua/303081/
February 25, 2011 (Reuters). A Russian court on Friday, Feb. 25, jailed a former official for 11 years over the sale of four fighter jets for just 5 dollars each. The military corruption scandal, that cost the government about 55 million dollars, underscored endemic fraud in Russia's armed forces. Andrei Silyakov, a former employee of the state Federal Reserve Agency, illegally included the warplanes on a list of state assets to be sold, the Nizhny Novgorod regional court said in a statement on its website. The four MIG-31 supersonic long-range fighter jets, known as Foxhounds, were sold for 153 roubles (5 dollars) each from state-owned Sokol aviation plant in Nizhny Novgorod, 400 km (250 miles) east of Moscow. Although the jets were sold stripped of engines and weapons, each was in fact worth about $4 million. The planes were appraised as scrap metal and sold to a shell company that had no authority to trade weapons or military hardware, the statement said. Silyakov was also accused of embezzling 30,000 tons of oil and handed an 11-year jail sentence for fraud, costing the Russian state a total of almost $69 million, the court said. A combination of lack of funding, negligence and corruption have damaged attempts to supplement and maintain the huge arms stockpiles Russia inherited at the breakup of the Soviet Union in 1991. Corruption in the armed forces cost Russia 6.5 billion roubles ($222.8 million) worth of state funds in 2010, Russia's Chief Military Prosecutor Sergei Fridinsky said on Thursday. Sokol is part of the state-owned United Aircraft Corporation.
