Management Reforms in Russian Defence Industry

Abstract

The major purpose of this article is the analysis of Russian defence industry reform and privatization trends.
The problems Russia has faced in modernizing its arms industry, together with an analysis of the changes
brought by the economic crisis after the Cold War have been analysed here. Russian defence industry complex
(DIC) privatization issues are presented too. The problems of Russian arms industry, which is characterized by
an extremely high degree of over-capacity and a low degree of civilian production, and is still very much
dependent on arms exports, are analysed. Progress in the reform of the Russian arms industry is evaluated as
well. The research leads to a conclusion that Russian DIC management reforms are in the early stage of
implementation: a few vertical integrated holdings have been created and some non-competitive DIC
enterprises have been liquidated. The rate of the reform can be judged as being. Harsh resistance and interests
of DIC actors hamper the process of development. The author concludes that final results of DIC reform and
privatization will depend on successful implementation of DIC management reforms.