• By The Financial District

Russia's Defense Industry Might Not Survive Ukraine Invasion

Russian troops on the border with Ukraine and that of its ally Belarus still hover at the 100,000 mark. This is accompanied by a naval buildup in the Azov Sea where Russian vessels outnumber Ukrainian ships by a ratio of 4 to 1.

Photo Insert: Apart from the troops at the Ukrainian border, Russia has positioned navy ships in the Azov Sea.

While the Russian presence is understandably causing heartburn in Ukrainian circles, Reuben Johnson wrote for Breaking Defense that is also causing agita in a surprising place: Inside Russia’s defense industry.

The most recent full-scale exhibition of Russian military hardware was at the Nov. 2021 Dubai Air Show, where the subject of whether Russian President Vladimir Putin would decide to have his troops mount an invasion was a popular one among the Russian delegation.

This was the largest contingent of Russian defense industry representatives to ever attend this event, with a number of serious players attending in hopes of breaking through in the regional market.

These defense sector representatives — including executives from component business units and large aerospace holding companies like Rostec — were not anxious to see the effectiveness of their systems demonstrated in a war between Russia and their neighboring former Soviet republic.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

Nor could they generally see merit in Putin deciding to use military force to further dismember the Ukrainian state. Instead, Russian defense industrial firms are concerned that a war with Ukraine would create a sanctions regime isolating Moscow’s financial institutions from the world banking system.

Almost a decade after the revelations in US Embassy cables that up to 60% of Putin’s orders were not being followed, Putin himself has recently complained publicly that today only about 20% of his decisions are fully implemented, with the rest being ignored or circumvented.

Government & politics: Politicians, government officials and delegates standing in front of their country flags in a political event in the financial district.

Russia is a nation “beset by economic stagnation alongside high inflation, its labor productivity remains dismally low, and its once-vaunted school system has deteriorated alarmingly. And it is astonishingly corrupt. Not only the bullying central authorities in Moscow but regional state bodies, too, have been systematically criminalizing revenue streams, while giant swaths of territory lack basic public services and local vigilante groups proliferate,” wrote the well-known Russian historian Stephen Kotkin.

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