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. Last Updated: 07/27/2016

Russia Says It's Ready to Arm Saudi Arabia

Itar-TassSergei Chemezov
Moscow is preparing its first major defense contract with Saudi Arabia, the world's largest arms buyer that has traditionally spent its petrodollars on U.S.-made weapons.

The deal is part of a strategy aimed at diversifying Russia's arms buyers away from China and India, Sergei Chemezov, general director of state-owned arms exporter Rosoboronexport, told reporters Wednesday.

Russia also signed an arms contract with Morocco last month, he said, the first since the breakup of the Soviet Union.

Chemezov refused to give any details, but said that Russia is stepping up negotiations with Middle Eastern countries for jointly developing air defense systems on the basis of the domestically produced S-300, Buk and Tor-M1 systems.

"If a contract with Saudi Arabia is signed, it will be a landmark event in Russian arms exporting," said Marat Kenzhetayev, an expert with the Center for Arms Control.

From 1991 to 2002, Saudi Arabia imported $93 billion worth of weapons, Kenzhetayev said, while Morocco imported $1 billion.

In that same period of time, Riyadh signed $40 billion worth of arms contracts, of which $28 billion flowed to the United States and not a penny went to Russia, he said.

After U.S.-Saudi relations dampened following the Sept. 11, 2001, terrorist attacks, the situation now seems to be swinging in Russia's favor, Kenzhetayev said.

While Moscow already sells arms to Middle Eastern countries such as the United Arab Emirates, Yemen, Iran, Kuwait and Algeria, a deal with the Saudis could push its neighbors Jordan and Oman to sign Russian contracts as well, Kenzhetayev said.

For Moscow, which sells arms to 59 countries, finding new customers is important as it tries to diversify away from major clients China and India, which account for 80 percent of Russian arms sales.

"We have reached the ceiling of $5 billion to $6 billion in annual arms sales abroad," Chemezov said. "We have to change something drastically."

Last year, Rosoboronexport, which mediates over 90 percent of the country's arms deals, delivered $5.1 billion worth of arms out of $5.8 billion exported by Russia as a whole.

Rosoboronexport has orders of $12 billion through 2007, but Chemezov said that this year Rosoboronexport can expect to make $1 billion less in revenues.

"The reason? Our companies cannot produce more modern weapons. [The industry] is in need of investment either from private companies or from the state," he said. "Today we sell weapons that were designed in the late 1970s and early 1980s."

Rosoboronexport plans to boost control over defense production by placing its directors on the boards of arms makers and buying stakes, Chemezov said.

Chemezov said that all sales are strictly in line with international agreements and do not violate any United Nations sanctions.

"However, if some country, including the United States, makes its own decision [on sanctions], pardon us, we are not obliged to do as America says," Chemezov said.

Last month, Israel and the United States expressed concern about the possible sale of SA-18 surface-to-air missiles to Syria.

Asked whether any such contract was discussed during Syrian President Bashar Assad's recent visit or is planned, Chemezov said: "No."