21.09.23 Sanctions Review

Naked Goliath: Russia's defence industry has failed to solve the shortage of imported components as equipment and weapons reserves are being depleted

The question of whether Russia can sustain a war of attrition in terms of military equipment, technical resources, and ammunition remains unanswered. Reports from the Russian side periodically indicate shortages of munitions and technical resources in the combat zone, and the Kremlin is concerned about the systematic disruptions to defence procurement. While Western sanctions have failed to undermine Russia's economy, the country's ability to wage a prolonged war is diminishing due to its inability to produce a significant range of necessary armaments under sanctions and given the unwillingness of countries in the Global South to engage in military cooperation with Russia. In these circumstances, even substantial injections of funds into defence do not have a sufficient effect. Russia will be able to rely on the reserves it built up under long-term contracts concluded before February 2022 for some time, but without intensive replenishment in the face of sanctions, these reserves are inevitably being depleted.

According to the BBC Russian Service, mobilised personnel from the 1442nd Regiment cited the poor quality of ammunition as the reason for abandoning their positions: 'The ammunition is dreadful; some of it does not even fly, and that which does fails to explode; and there are practically none of them.' Following the full-scale invasion of Ukraine, the majority of defence enterprises shifted into overdrive, with government investment into the defence sector reaching unprecedented levels. However, there has been a shortage of munitions and weaponry, which is often of very low quality, as indicated by leaks from the combat zone. Desperate purchases of ammunition and weapons from North Korea has also highlighted this acute scarcity. While Russia’s technical and economic potential exceeds that of Ukraine, and its defence industry is viewed as a sacred cow of the Russian government, the question of whether Russia can sustain a war in terms of military equipment, technical resources, and ammunition remains unanswered.

The Kremlin is attempting to address this issue using Stalinist methods. In a report dedicated to the challenges faced by Russia in ramping up its military production, 'Novaya Gazeta Europe' has calculated that the number of criminal cases for disrupting state defence orders has doubled since the start of the war. Although the data is incomplete for 2023, the same number of cases has already been opened as in the entire year of 2021. Since February 2022, the Federal Antimonopoly Service has fined 419 employees of businesses for failing to fulfil state defence orders. However, the actual number of such cases may be much higher, as 'Novaya' has based its calculations on only the appeals made by employees against FAS decisions. Repeat violations entail criminal prosecution and imprisonment of up to ten years. Most employees accused of failing to fulfil state defence orders were found at the following enterprises: the Zvezdochka Ship Repair Centre (74), the Design Bureau of Instrument Making (39), the Progress Rocket and Space Centre (34), Sevmash (22), and Uralvagonzavod (20).

However, journalists have attributed the shortage of components caused by sanctions as the main reason for supply disruptions to the import of semiconductors and electronics, widely used in aviation, air defence, and automobile manufacturing in Russia. For instance, the Ulyanovsk Automobile Plant, the manufacturer of the 'Patriot' model of car, failed to deliver enough patrol cars for defence orders due to the lack of alternatives to Western control units, airbag electronics, and video surveillance systems. Shifting to components from India and China has increased the cost of automobiles by a third. Aviation, shipbuilding, and the space industry are the sectors most dependent on Western components, which is where the highest number of state defence order disruptions has been found, according to the investigators at 'Novaya'.

Military analyst Pavel Luzin has observed that the losses incurred by the Russian armed forces since the start of the full-scale invasion of Ukraine have reached levels that modern Russia has never before encountered. According to his assessment, it is becoming increasingly unlikely that Russia will be able to restore its military capabilities in the foreseeable future. Even under the current circumstances, replenishing expended munitions and damaged equipment presents a colossal challenge. Moreover, even undamaged equipment requires substantial investments in maintenance and new components. For instance, the engines of the V-84 and V-92 series, as well as their modifications used in tanks like the T-72B3 and T-72B3M, have a lifespan of fewer than 1,000 hours before requiring major repairs. In peacetime, this issue may seem almost insignificant, but in the context of a protracted war, it translates into unforeseen expenses and creates bottlenecks in military-technical logistics. Most of the tanks involved in the current conflict will constantly require significant restorative repairs, which can only be carried out in factory conditions, not in the field. Moreover, as Luzin notes, since the early 2010s, even the production of tank engines in Russia has relied on imported industrial equipment.

While the country can draw on its reserves of components and materials built up under long-term weapons contracts signed before February 2022, without replenishment these reserves are rapidly depleting in the face of ongoing sanctions. Some defence industry enterprises are still managing to obtain components not subject to sanctions. For instance, 'The Insider' recently revealed that, despite export controls, one of the key importers of microelectronics from Latvia, the company 'Lesta-M,' continued to supply microchips to Russia, including those used in the production of 'Iskander' ballistic missiles. However, as sanctions legislation tightens further, such loopholes are likely to diminish.

Supply difficulties are also hindering the development of drone production. Luzin recalls that serial production of the S-70 'Okhotnik' was originally planned for 2023 but has now been postponed to 2025. Limited progress has also seen in the development of the 'Altius' strike drone (UAV), which was supposed to commence production over a year ago. The primary challenge is the lack of a sufficient number of engines, as the initial plan relied on using the German-made RED A03 diesel unit. Currently, two alternatives are being developed in Russia, but the serial production of the first alternative is not expected to begin before 2025 (at a rate of 30 engines per year), provided no disruptions occur. The second option, the APD-500 piston engine, was developed based on an automobile engine created by the Federal State Unitary Enterprise 'NAMI' in collaboration with Porsche in the 2010s. This means that it also relies on imported components, raising further doubts about Russia's ability to commence its serial production independently.

Despite the general consensus that Western sanctions have failed to undermine Russia's economy sufficiently, as it continues to export significant quantities of oil and other raw materials, the country's ability to sustain a prolonged war, given their effect and in the context of the unwillingness of the countries of the Global South to collaborate with Russia in military terms, has been significantly diminished.