It is well known that much of the Ukraine's heavy industry is concentrated in the eastern regions of the country, as is the bulk of the Ukraine's own gas reserves. Hence the reluctance of the government in Kiev to let go of control over these regions. One must also not forget that every Ukrainian government, including the latest incarnation, is allied with certain 'oligarchs'. In fact, when former president Yanukovich lost the support of oligarchs previously allied with him, the end of his rule came within hailing distance. It can be assumed that many of said oligarchs have business interests in the eastern regions.
However, it turns out that there is something else that makes the Ukraine's East especially important – for Russia. Back when the Ukraine split from the Soviet Union, it took some 30% of the country's industry with it – inter alia a big chunk of its defense industry. As pointed out in an article in the FT by Jan Cienski , Russia's military-industrial complex remains highly dependent on spare parts produced by Ukrainian factories – and their deliveries have not surprisingly recently been halted. This sheds new light on the backdrop to the previous gas discounts and the sudden decision to threaten a delivery stop unless the Ukrainian government pays its debts to Gazprom. Tit for tat. However, there are additional implications. Cienski writes:
“The Motor Sich plant in Zaporozhia, 230km west of Donetsk, makes the engines for most Russian military helicopters, including the Mi-24, which has been used to patrol the border with Ukraine in the recent troop build-up. But the Russian air force’s dependence on the Motor Sich plant is causing concern for military strategists.“It is difficult to overestimate the significance of Motor Sich for our aviation,” wrote Vladimir Voronov, a military analyst, in Sovershenno Sekretno, a Russian investigative magazine. Motor Sich is part of Ukraine’s military-industrial complex, which has close ties with Russia and, until recently, was uncontroversial.
However, following last month’s annexation of Crimea by Russia and the build-up of tension in the east, Ukraine has suspended all military deliveries to Russia. The freeze, by Ukroboronprom, the arms export monopoly, also affects Russia’s military exports because many weapons incorporate Ukrainian elements.
As well as the Mi-24s, Ukrainian factories, mainly located in the east and south, also produce the R-27 medium-range air-to-air missiles for the Russian air force and many critical components.
These include drogue parachutes, used to slow aircraft landings, and hydraulics for fighter jets, according to a new report by the Royal United Services Institute, a London-based defence think-tank. Ukraine also makes the gears used in many Russian ships and transport planes at the Antonov factory in Kiev. The Yuzhmash factory in Dnipropetrovsk, in south-central Ukraine, designs, produces and maintains Russia’s SS-18 intercontinental ballistic missiles as well as components for its space rockets.
Anders Aslund, a Swedish economist who was an adviser to the Kremlin in the 1990s and to Ukraine a decade ago, says the reliance on Ukraine could be a factor in any Russian invasion.
“The military-industrial complex in Russia has been very strongly in favour of incursion into Ukraine and wants to annex southeast Ukraine to take control of those plants,” said Mr Aslund, a senior fellow at the Peterson Institute for International Economics in Washington.
Without engines from Motor Sich, Russia’s plans of adding as many as 1,000 attack helicopters to its fleet becomes much more difficult. Russia has been working to develop its own engine plants, but is still heavily dependent on Ukrainian production.
Ukraine was a core part of the Soviet Union’s industrial might. After the collapse of the USSR, about a third of the Soviet defence industry was left in Ukraine. Today, about 40 per cent of Ukraine’s exports to Russia consist of machinery and armaments, according to Mr Aslund.”
The article points out further that 'invading the Ukraine in order to get hold of these plants would be a 19th century way of looking at a 21st century relationship', an assessment one must agree with. Absent the current tensions, the Ukrainian factories would still sell these parts after all – it is their business and they cannot eat them. Since many of the parts are probably highly specific, it won't be easy to retool the factories, especially for an essentially bankrupt country like the Ukraine.
Would Russia's president Putin invade the Ukraine for that? We rather doubt it actually. However, Russia is not a monolithic country ruled by an almighty dictator. Putin has a great advantage at present because he enjoys truly stunning approval ratings in Russia (as of mid-March, they were at a new high of 76%). Twelve times more people said they 'like and even admire him' compared to those expressing dislike. Some recent results of detailed polling questions can be found here.
As a friend of ours who hails from Russia pointed out, jingoism plays quite well in Russia, and this seems even true of the centers of resistance to Putin (Moscow and St. Petersburg), where his approval ratings for the first time ever also went above the 70% mark. It can be assumed that these high approval ratings are helping Putin to exercise control over other powerful interest groups in Russia. However, this does not mean that these interest groups lack political influence. Putin most likely is forced to strike a balance between the interests of the various groups whose support he needs, and it is hard to tell from the outside to what extent he may be forced to compromise. Moreover, we are only guessing at his own motives and likely preferred course – we are not mind readers after all.
As a result it is hard to truly judge to what extent the above information may ultimately influence a potential decision to embark on a military adventure. We do believe the probability is very low, that the interests of Russia's leadership can be fairly well discerned and can likely be pursued successfully without actually going totally medieval on the Ukraine. However, Russia's dependence on military parts from the Ukraine certainly adds to the complications of what is already a quite complex and highly fluid situation.
In the end it all boils down to 'game-theoretical' considerations. Whatever decisions will be taken will be weighed in terms of the potential losses and gains they will produce, and it wouldn't be the first time that the political leadership of a country was pressured by its military advisers into doing something stupid everybody comes to regret down the road. In fact, history is brimming with examples and it is surprisingly easy for politicians to miscalculate under pressure. One must also never underestimate the role misunderstandings and sheer coincidence and random events can play in making tense situations boil over.
Russia's MI-24 helicopter – half made in Ukraine.
(Photo via photofunblog.com / Author unknown)
The SS 18 'Satan' ICBM reportedly also requires Ukrainian-made parts.
http://www.acting-man.com/?p=30182(Photo via nod66.ru / Author unknown)
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