Russias defence industry - an engine for economic growth?

This project has improved scholarly and public understanding of the Russian economy in several ways. Firstly, the five peer-reviewed publications constitute the main contribution to the scholarly community. It seems fair to claim that these publications have delivered knowledge to this community about the Russian military industrial complex and its role in Russian politics and economy that was not there before. Secondly, findings from the project have informed popular publications from researchers connected to the project, such as newspaper op. eds. etc. Thirdly, the public seminars in Sweden and Norway were well attended and gave the public an opportunity not only to learn about the research results, but also to engage in discussion with the researchers. Fourthly, all three participating institutions, as well as Dr. Stuart Young from Cranfield University and Dr. Richard Connolly from the University of Birmingham, have had numerous meetings with, and given presentations for, people from government, business etc. where the findings from this project have been spread. The main finding of the project is that while those who have rejected almost any positive effects on the overall economy of the high defence spending have been too dismissive, there is little to suggest that the defence industry will become a locomotive for the economy in the ways suggested by Russian officials. Susanne Oxenstierna?s contribution suggests that the high defence spending will be difficult to keep up during the current economic decline, and it details the degree of trade-off between defence spending and other public spending priorities. The two studies by Cecilie Sendstad and Richard Connolly emphasise that the spending has given positive contributions to the defence industrial production capability. True, its performance has been far from perfect, but the spending can still be considered to be relatively successful in this regard. Previous myths about the Russian defence industry being more or less totally in shambles have been disproved by these studies. However, the development of new technologies takes time, and the Russian defence industry is still technologically competitive only in a few areas. The article by Tomas Malmlöf , Konstantin Makienko and Tor Bukkvoll finds that there are a number of examples of military to civilian technology spin-off. They also point to a demonstrated understanding among Russian decision makers that such spin-off will not take place by itself, but needs help. Nevertheless, they argue that six theoretically derived preconditions for successful military to civilian spin-off are only marginally in place in Russia. Finally, the article by Una Hakvåg and Konstantin Makineko finds that maintenance and expansion of the support for the regime probably is at least as important as an explanation for the large defence outlays as arguments about a locomotive for technological renewal and arguments of geopolitics. In particular, this concerns the maintenance of industrial jobs in the Russian provinces.

Within a decade, starting from 2011 Russia is planning to spend roughly one and a half federal budget (22,000 billion roubles) on modernization of the country's military-industrial complex and a full-scale rearmament of the Armed Forces. The investments a re supposed to improve both Russia's military capabilities, and Russia's economic performance. In the words of president Putin '[t]he huge resources invested in modernizing [Russia's] military-industrial complex and equipping the army must serve as fuel t o feed the engines of modernization in [Russia's] economy, creating real growth and a situation where government expenditures funds new jobs, support market demand, and facilitates scientific research' (Putin 2012). This project will contribute to the k nowledge-building on Russian politics and economy in Norway and internationally by analyzing Russia's greatest economic priority in the upcoming decade; the modernization of the Russian defence-industrial complex. The questions we seek to answer are: Why has modernizing Russia's military-industrial complex become a top political and economic priority at a time when there is no obvious threat of war, and is this trend likely to continue? Does Russia's defence industry's have the capacity to stimulate growt h and innovation? And, how is the extensive defence spanding affecting the overall development of the Russian economy? In addressing these questions the project will generate knowledge about the economic policy making-process in Russia; Russian policies a nd spending patterns; the Russian military industrial complex' industrial ability; the relationship between state and market, and the relationship between public and private sector in Russia.