Russia ‘may lose $10b’ arms sales from Arab unrest

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MOSCOW – Russia risks losing up to $10 billion (7.4 billion euros) in arms sales from the wave of unrest currently sweeping north Africa and the Middle East, a weapons industry official said on Tuesday. The figure is equivalent to Russia’s total arms sales for 2010 and would represent a massive setback to the country’s efforts to maintain its Soviet-era clients in the Middle East.
The unnamed arms export official told the Interfax news agency that Russia was carefully monitoring the situation because it had major outstanding contracts with some of the fallen regimes. The source said Russia “was working on and already implementing arms contracts worth some $10 billion” in the affected countries.
“Nothing can be ruled out in the current situation, and in the worst-case scenario, these plans may be wrecked,” the Russian source said. Russia sells arms across the region. Its most important Middle Eastern clients include Yemen and Libya, whose regimes are currently seeing the biggest challenge to their rule, and Egypt where Hosni Mubarak has fallen from power.
Two years ago, Libya’s embattled leader Moamer Kadhafi offered to host a Russian naval base in his north African country. The official said Russia was currently negotiating a $2 billion contract with Libya, with the entire region representing Russia’s most important military client base after China and India.
“Recently, besides our main strategic partners China and India, Russia has also developed close relations with Algeria, Jordan and Syria,” the arms export official said. He added that Russia was also “implementing existing contracts with Saudi Arabia, Egypt, Libya, Yemen, Morocco, Kuwait, Qatar and other Middle Eastern and north African countries.”
Russia is the world’s second-largest arms exporter after the US, accounting for 23 percent of all international weapons sales made between 2005 and 2009, according to Jane’s Information Group.