Russia's foreign arms sales recently had another banner year, breaking all post-Soviet records, causing Moscow policymakers to celebrate. Meeting with the Commission for Military-Technical Cooperation with Foreign States on Feb. 10, President Dmitry Medvedev reported that the value of Russian weapons exports in 2008 exceeded $8.35 billion, up from $7.4 billion in 2007, also a record. On Feb. 12, Alexander Fomin, deputy director of the Federal Service on Military-Technical Cooperation, said that Russia planned to export $8.5 billion of arms in 2009. On Feb. 16, Nikolai Dimidyuk, special programs director for Rosoboronexport, Russia's arms export monopoly, announced that the company had $20 billion worth of foreign orders in its portfolio, mostly from India and China.
Yet, there are abundant signs of trouble ahead for Russia's defense industry. The global financial crisis threatens to deprive foreign governments of funds for future arms imports, curtailing future Russian sales. The declining value of Russia's oil and gas exports, which provides much state revenue, has called into question the government's ability to sustain its own military procurement, modernization, and reform plans as well as its non-defense goals. ...
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