Russian Air Force 2

2. PERIOD OF TRANSITION

2.1. Security Political Transition

In December 1991 began the era of great transition. Within quite a short period of time the former Soviet Air Force was transformed into Russian Air Force, which was significantly smaller in terms of size and operation resources. Disappearance of the Soviet Union as a state, dissolution of the Warsaw Pact, re-independence of several forcefully annexed Soviet states, international contract commitments concerning conventional weaponry inherited from the Soviet Union, and the difficult economic situation of the country formed a complex of problems that did not offer easy answers for the air force command echelons.

The first rapid change was when the air force potential dropped from about 20,000 pilots and 13,000 aircraft to 13,000 pilots and 5,000 aircraft. Since the air forces had been mostly stationed on the Western front, Russia lost mainly to Ukraine and Belarus about 37 percent of former Soviet Air Force MiG-29s, 23 percent of Su-27 fighters, about a half of its forty Il-78 flight refueling tankers, 43 percent of about 500 Il-76 transports, most of the Tu-95s, and all but two of operational Tu-160 strategic bombers. Of the total Soviet air force equipment Russia got to keep approximately 60 percent (11,19).

Also the regional changes were significant. Russia lost its forward airbases and air surveillance systems in East Europe and the Baltic Countries. At the same time it got several new independent neighbors right on its borders in both south and west. The Russian airbase network was cut to about 50 percent of the Soviet Union's network (19).

One of the most important contractual commitments inherited from the Soviet Union was the Treaty concerning Conventional Forces in Europe, the CFE Treaty, signed in November 1990. It entered into force on July 17, 1992. It had an immediate impact on the composition of force in the just emerging Russian air forces. In order to maintain as much aircraft as possible, Russia joined on May 15 the Tashkent Treaty, which divided the former USSR's CFE quotas between the former Soviet States. Russia's share came to be 3,450 aircraft, when Ukraine, with the second highest share, got 1,090 aircraft.

In Russia the air forces were now held in much higher respect, since the Tashkent treaty secured Russia only about a half of the tanks, personnel carriers and the artillery, but as much as two thirds of the combat aircraft. Since there are no regional sub-divisions for aircraft, they can be moved quickly to different parts of the country as needed. This factor had an important effect on the formulation of the first military doctrine of Russia.

The CFE Treaty and the Tashkent Treaty together called for reducing the number of aircraft to 3,450 by the year 1995. This meant a cutback of 3,000 aircraft from the 1990 level. The deadline for the first 25-percent reduction was November 19, 1993, for the next 60 percent November 19, 1994, and the final 15 percent November 19, 1995 (12).

Naturally the main target of reductions was the older equipment. Thus the cutbacks also contributed to the modernization program of the aircraft fleet. The air force units equipped with the best and most modern fleet were transferred from East Germany and Poland to the areas of St. Petersburg, Moscow and Northern Caucasus. Some of the older aircraft have been stored as possible reserves.

As has been described above, we can discern five different factors that have most guided the development of the structure and doctrine of the Soviet Air Force among the events, measures and planning that took place during the period of transition and before that (12):

-collapse of the Soviet Union and the ensuing loss of buffer states and forward bases

- international contractual commitments the Russian Republic inherited from the Soviet Union

-impact the military doctrine drawn up and put into effect by the Russian Ministry of Defense in 1993 had on the five branches of Russian defense

-reorganization of Russian economy and the shift of emphasis in the government budget from defense to the civilian sector

-the use and meaning of air force and its precision weapons in the Gulf War

The above-mentioned factors have affected almost every single subject or problem handled by the Russian Air Force during its brief existence. The impact of these factors is also clearly the biggest on especially air force doctrine and organization (12).

2.2. Economic Transition

For about sixty years, the Soviet Union had in its possession the biggest militarized economy in history. There was no point of comparison elsewhere in the world for the amount of weapons produced and material and personnel tied to the war industry. But equally unparalleled was the change in the military economy and industry inherited by Russia in post-USSR years. In 1995 the war industry produced only one tenth of the quantity of weapons it had manufactured in 1990. Compared to the year 1985, two thirds of the war industry employees were no longer working within the industry in 1995 (13).

Defense industry dominated the Soviet economy in an exceptional manner. When the arms race was at its hottest in the 1980s every third Russian industrial worker - total of 15 % of the civilian workforce - worked in war industry. About 150 factories had over 10,000 employees each. Most of the plants were placed in closed towns with an average population of about a million (13).

Such gigantic industrial complexes could be built only by a system that ignored the price. The system also made it impossible for the Soviet politicians to compare the costs with the results achieved and to contemplate possible alternative uses for the resources. The inability to understand their own system made the Soviet leaders draw false conclusions when they tried to reorganize the system. Mikhail Gorbachev saw the advantages the output capacity of the defense industry offered, but not its costs. He aimed at applying the methods used in the defense industry into the civilian industry. What he did not see, was the fact that the "secret" of efficiency was cannibalization of the whole remaining Soviet economy. It could not be eaten twice (13).

The legacy of the war industrial complex still heavily burdens the process in which the defense industry tries to adjust itself to the demands of the market economy. Gorbachev's reforms already gnawed at the old method of administration. It was not a coincidence that representatives of this particular sector formed a significant part of the group, which tried to oust Gorbachev from power in August 1991. Boris Yeltsin's entry into power further weakened the defense industry's positions. One of the first measures the reformist group lead by Yegor Gaidar executed in the beginning of 1992 was to cut the defense acquisition budget by two thirds. An even more important reform was introduction of market pricing (13).

Even though the defense materiel companies, like all the other sectors of Russian economy, have had to adjust themselves to the markets, they have done it only partially and with great reluctance. They are still making significant efforts not to adjust themselves to the markets, but to adjust the markets to them (13).

In spite of its economic weaknesses, the Russian defense industry remains socially important and politically strong. In the reform schedules it has been granted exemption from taxes one time after another and during his presidential campaign, Yeltsin guided important investments to the defense industry. The situation is problematic to the government, since it has to support the defense industry for social reasons, but because of economic and political reasons the support has to be limited to meet the economic realities (13).

It can be said that the Russian recession started to stabilize in mid-1996. The decline of the real economy started to slow down in 1995 and the inflation rate has fallen significantly. At the same time, certain negative trends have become stronger. For the first time since the economic reforms the nominal value of profits started to decrease in industry, traffic and construction. As a result, the amount of money used as a basis for taxation has fallen. In the beginning of 1995 the profits represented 13.5 % of the GNP, but by the year 1996 they had fallen by 8.3 % to 5.2 %. At the same time the share of profits accounted to the state from the GNP has fallen by 3.2 percentage points. This would seem to indicate that the reason for the growing budget deficit is not so much inefficiency in collection of taxes but the fact that the amount of money used as a basis for taxation has fallen (14).

In January 1996 the Russian gross national product was 1,403 billion Rubles, which was 6 % less than at the same time the previous year. The share of goods of the GNP fell a little, and, correspondingly, the share of services rose almost as much. Compared to the year 1989, which was the last year of economic growth, the GNP has fallen by as much as 43.3 %. In 1997 the decline was a few percent (14).

The inflation showing signs in 1997 to be in check, the budget deficit became the biggest problem. In 1996 it was 51.3 billion rubles, in other words, 4.3 % of the GNP. The budget of the year 1997 was in principle pretty similar to the previous one, and thus also the problems in putting it into effect were similar. It was very likely that the war industry and agriculture were subsidized more than the budget would have been allowed (14).

Between January and July of 1996 the foreign trade increased by 3 %. The exports amounted to $38.9 billion, an increase of 4 %. The imports amounted to $24.6 billion, and the increase was 2 %. Thus the balance of trade surplus was $14.3 billion. The increase was 7 %. In 1997 the exports were expected to increase by 9 %. The exports of raw materials and energy increased, while the exports of ferrous metals decreased. In the budget of 1997 the shares of different expenditures in relation to the GNP were as follows (14):

-National defense 3.70

-Management of the national debt 2.99

-Law and order 1.90

-Industry, power economy and construction 1.56

-Social policy 0.65

-Education 0.62

-Basic research and promotion of technical research 0.51

-Agriculture and fishing 0.36

-Health care and physical education 0.31

-State administration 0.24

-Arts and culture 0.11

-Traffic, communications, and informatics 0.04

In 1998 the economic crisis started to take its toll on Russia`s welfare. The monthly inflation jumped from the early year value 0.2 % to 15.3 % in August escalating further to 38 % in September, the highest monthly rate since February 1992. The most serious implication for the Russian government is the fact that it is now unable to borrow from either domestic or international capital markets. The state is left with no sources of funding for either budget deficit, wage arrears to state employees, or compensation that it promised to the depositors who lost their savings as a result of the banking crisis, other than printing money.

Real GDP continued its slide down being 10 % lower in August than in December 1997. Also real expenditures on new construction and equipment were in August about 11 % lower than in December 1997. In August seasonally adjusted industrial production was almost 14 % lower than in December 1997. After the first 8 months of 1998 the budget deficit, according to IMF definition, was 4,5 % of the GDP. (66)

According to the official forecast, the 1999 Russian GDP will total 3.8 billion rubles. (89) 14 Jan '99

Russia has established a special commission consisting of representatives of different ministries to protect the domestic industry. The reasons for founding the commission include protection of domestic manufacturers, better efficiency in taking advantage of the opportunities offered by the defense industry, and improvement of economic security (14).

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Russian Air Force, Chapter 2

2. PERIOD OF TRANSITION

2.1. Security Political Transition

2.2. Economic Transition