Ukrainian President Viktor Yushchenko has made it clear that he wants his country to join NATO and even before he came to power the previous government had begun reorganizing the armed forces along NATO-compatible lines. This has unpleasant implications for Russian arms exports, because so many parts for Russian weapons systems are made in Ukraine. Other former Warsaw Pact countries have seen their defence industries shrink after joining NATO and this will also happen in Ukraine as it pursues its aspirations. The following is an excerpt from a report by the Vedomosti newspaper:

The Russian military industrial complex is anticipating some hard times ahead. Kiev's course towards joining NATO, taking into account the election of President Viktor Yushchenko, will result in the curtailment of military production at Ukrainian plants, and without their supplies the prospects for many Russian exporters do not look good.

According to the assessment of Kiev's Research Centre for the Army, Conversion and Disarmament Problems, Ukraine exported weapons worth approximately 600m dollars in 2004. At least 150m of them were under contracts negotiated through Russia's Rosoboroneksport [state arms exporter]. But Moscow's Centre for the Analysis of Strategies and Technologies estimates this share at 300m dollars. Together with Russia, Ukraine exports engines for Mi-8 helicopters, R-27 air-to-air missiles, turbines for warships, and a number of components for other weapons.

Ukraine rushes into NATO
The winner of the presidential elections in Ukraine, Viktor Yushchenko, has repeatedly stated that he wants to make the country a NATO member. In his election manifesto, "the all-out acceleration of Euro-Atlantic integration", i.e., entry into NATO, has been declared the main direction of foreign policy.

Like other East European countries that have joined the alliance, the Ukrainian military industrial complex will have to curtail production: this is precisely the way it was in Poland, the Czech Republic and Slovakia, the former Warsaw Treaty Organization member countries with the most developed military production, says Ruslan Pukhov, editor of the journal Moscow Defence Brief. Russian Industry and Energy Minister Viktor Khristenko states that approximately 2,000 enterprises interact with one another in both countries; "without one another they are in principle in no condition to produce any end product at all". For example, Russia does not produce the R-27 missile, which foreign clients require when purchasing Russian aircraft. The production of turbines for large ships is also absent, and domestic enterprises do not produce equivalent versions of a number of aircraft engines that Motor Sich produces in Zaporizhzhya.

Meanwhile, the Ukrainian military and political leadership had no plans apart from joining NATO even before Yushchenko came to power. In the Ukrainian Defence Ministry's White Book published in August 2004, the plan for armed forces development until the year 2015 is formulated entirely on the basis of NATO standards. For example, it provides that the army should establish a rapid reaction corps consisting of three brigades: an air mobile one, a light mechanized one for "maintaining peace" and a mechanized one for "peace imposition" operations (like in Yugoslavia in 1999). The other armed forces should support these corps' operations. "[Kiev's] only plan is the conversion of the army along the lines of European NATO armies with clearly defined missions within a coalition war, and it would have been carried out even in case of a victory by [Yushchenko's rival] Viktor Yanukovych," states a source close to Ukraine's General Staff. Thus, the Ukrainian air force and subunits of the air defence forces were merged into a single air command at the very height of the election campaign. A unified naval command has also been created. For example, the Czech army was reorganized in a similar manner for the sake of joining NATO, Pukhov recalls. Its mission within the alliance framework is to provide chemical defence subunits for intervention contingents. "If it intends to preserve its own system of security, military and technical cooperation with Russia is doomed to curtailment," he reasons.

What the Russian military industrial complex loses
A number of Ukrainian defence plants whose directors supported Yanukovych in the elections may suffer very soon. For example, Vyacheslav Boguslayev, the general director of the Motor Sich plant, was a confidant of the losing candidate. "The new authorities may punish us [for that]," fears a manager of one of the large Ukrainian aviation industry enterprises with sales of several tens of millions of dollars.

However, "considering Russia's influence on the Ukrainian military industrial complex", the new Ukrainian authorities will not undertake to sharply curtail ties with the neighbour for the first one or two years, assumes Valentin Badrak, the director of Kiev's Research Centre for the Army, Conversion, and Disarmament Problems. But cooperation will inevitably wane, Pukhov is certain: firstly medium-sized enterprises will cease cooperation, and after them large ones such as Mykolayiv's Zorya-Mashproyekt, Kiev's Artem GAKhK [Artem State Joint-Stock Holding Company], and Motor Sich. Theoretically Russian competitors may attempt to set up production of some equivalent products. Thus, Saturn NPO [the Saturn Scientific Production Association] is developing the AL-55 aircraft engine, which may replace low-thrust Motor Sich engines. Russian plants also have capacity for the production of R-27 missiles. But it is difficult to calculate the necessary volume of investments for such projects, and all the more, the sources of financing are unclear, says Pukhov. 

Source: Vedomosti , Moscow
BBC Monitoring