Staunton, February 11 – Dmitry
Rogozin, the deputy prime minister responsible for overseeing Russia’s defense
industry, says that rising inflation will make it more difficult to achieve
Moscow’s rearmament plans and that, to ensure these are met, the government
needs to introduce controls on prices of goods in that sector.
But Rogozin’s argument – that inflation
is hitting defense firms less directly than because of the rising prices their
suppliers are charging – suggests that any price control program would be
extremely difficult to limit to that sector and would either fail or be
extended to an ever larger part of the economy, something that would undermine
what markets there are.
Given Rogozin’s own nationalist and
authoritarian views, it is entirely possible that he sees the dilemma that
Russia’s defense industry finds itself in as the basis for an even larger
re-orientation of the Russian economy, a shift that would restore other aspects
of the Soviet command system as well.
Specifically, Rogozin said,
according to RBK.ru, “price increases can lead to a sharp reduction of the
profitability of the enterprises of the defense industry complex” and that “in
turn can threaten the realization of the [Kremlin’s] plan for re-equipping the
army” (top.rbc.ru/economics/09/02/2015/54d8bcbb9a7947638018e9db).
Given what he described as “the
existing political and economic situation,” Rogozin called for an expansion in
state regulation of prices “for all production” in the defense area and “the
extension of quotas on raw materials” and dual use products used “for the
production of military technology.”
Rogozin’s statement extends
arguments made by Deputy Defense Minister Yury Borisov at the end of last year
who said that inflation was going to force a downward correction in defense
plans for the next three years – despite assurance by Defense Minister Sergey
Shoygu two weeks ago that Russian defense industry will meet the current
targets.
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