Defence Industry Transformation in Russia: Evidence from a Longitudinal Survey

Alexei Izyumov, Leonid Kosals and Rosalina Ryvkina

Post-Communist Economies, 2000, vol. 12, issue 2, 215-228

Abstract: The article is devoted to the new phenomena in the market transformation of the Russian defence-industrial complex. Based on the data generated by the repeated survey of the CEOs (general directors) of defence enterprises in 1995-99, it examines economic performance of enterprises, their conflicts with the government and efforts at internal restructuring brought about by reductions of Russia's defence spending, mass privatisation and opening up of the domestic market. We found that despite the dramatic reduction in defence orders, inconsistent government policies and extremely unfavourable macroeconomic environment, the Russian defence industry has made significant progress in its adjustment to the market. Even before the devaluation of the ruble in the autumn of 1998 economic performance of defence enterprises had been gradually improving; it entered a virtual boom since then. Contrary to widely held views, the painful experience of the 1990s has not made the top managers of the defence industry more hostile to reforms: at the end of the decade they were generally more supportive of the market than in 1995.

Date: 2000
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DOI: 10.1080/14631370050043652

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