RUSSIAN PLANE FALLS VICTIM TO POLITICS

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RUSSIAN PLANE FALLS VICTIM TO POLITICS

Izvestia, March 28, 2002, p.2

Russia is out of the race for a $4 billion contract to supply South Korea’s Air Force with 40 pursuit planes. The Su-35 pursuit plane (Russia) and the Typhoon plane (Eurofighter consortium) have been eliminated. According to yesterday’s statement from the South Korean Defense Ministry, the final choice will be made in late April: between the F-15K (Boeing) and Rafale (France, Dassault Aviation). According to analysts, this means South Korea has actually chosen the American plane.

The Committee for Military-Technical Cooperation refused to make any comments until receiving official word from South Korea. This may happen by the weekend, the committee explained. The CMTC had not noticed any warning signs that the Su-35 might be eliminated from the tender: on Tuesday night CMTC representatives took part in seeing off a South Korean military attache who was going home. There was no hint about the elimination of the Russian pursuit plane.

“Most likely, there is a political factor involved,” was the comment of a source in a company producing military hardware. “A situation is arising similar to that in Latin America. Chile, Peru, and other countries say they would be glad to buy our hardware – but they have to take the opinion of the ‘senior comrades’ into account. This primarily refers to the United States.” It seems the same policy has played a role in the case of South Korea, the defense producers conclude. However, they say there are still many questions about the operation of Rosoboronexport (Russian Defense Exports).

KASIANOV SHARES WEAPONS AND LOANS

Izvestia, March 28, 2002, p.2

Prime Minister Mikhail Kasianov continues his tour of Asia. From Ulan-Bator, Mongolia, he departed for Hanoi, Vietnam – where he held talks yesterday with Vietnamese government officials. Kasianov promised Mongolia to reduce its required level of debt payments. He promised Vietnam to build a refinery and re-equip the armed forces.

The day before Kasianov’s visit, the Vietnamese media primarily discussed the prospect of Russia granting a $100 million loan to build two hydroelectric power stations. A corresponding intergovernmental agreement was signed yesterday. Eighty percent of Vietnam’s electricity is now produced at facilities built with the assistance of Russian specialists.

Kasianov announced the launch of another joint venture: a refinery at Dung Quat. Specialists have calculated that the money invested in the project ($1.3 billion) will be recouped in six to seven years. At the same time, the new refinery can meet around 70% of Vietnam’s demand for petroleum products, while Russia’s profit from the plant’s operation over the next decade is likely to be $2-3 billion. However, Moscow and Hanoi must first agree on the general contractor for the project. Russia supports a consortium of the Samsung and ABB companies; while Vietnam gives preference to a French-Malaysian association, TEHNEKOP.

Another promising sector for cooperation is armaments. The army of the Socialist Republic of Vietnam, 500,000 strong, is one of the most efficient forces in Asia. At the same time, 75% of its weapons are outdated Soviet weapons. Talks are currently underway on supplying Vietnam with new models of Russian military planes, vessels, and armored vehicles. However, Russia will still leave the military base at Cam Ranh. “The base is outdated. There is no need now to use old technology,” Kasianov explained. The prime minister did not specify which new technologies Moscow will use to defend its interests in Vietnam.

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