Russia is the world’s second largest weapons exporter, but its stock is slowly being destroyed on the battlefields of Ukraine every day.
Much has been written about Russia’s economic reliance on oil and natural gas exports, but another mainstay of its economy is being destroyed in the Ukraine conflict: weapons. Russia is the world’s second largest exporter of weaponry in the world, after the United States, accounting for 20 percent of global arms sales and $15 billion per year in revenue. Yet this “resource” upon which the Russian economy partly relies is being destroyed each and every day in Ukraine. As of the end of April, Russia has lost more than 3,200 military vehicles and countless quantities of small arms and munitions.
Furthermore, Russia’s ability to “renew” this resource is being severely hampered by international sanctions. Prior to the war, the Russian arms industry produced around 250 tanks annually, meaning that Ukraine’s documented destruction of at least 500 tanks has already set back Russia’s military production by two years. However, Russia is no longer producing tanks at that level. As Western sanctions choke Russia’s access to high-tech components and other goods, auto manufacturing plants and other factories essential to military operations are closing down.
Despite some efforts in recent years at reshoring critical components of arms production, Russian weapons remain highly dependent on foreign technology. A recent examination of a crashed Russian cruise missile in Ukraine revealed that a huge proportion of critical components were manufactured abroad, including the U.S.- made circuit board that helps guide the missiles to their targets. Russia has found there is no easy substitution for the import process, which has caused delays in domestic projects and foreign sales, compounding productivity problems because of outdated plants and an aging workforce.
The failures of Russia’s equipment on the battlefield could have huge consequences for its economy. Between the brand-damage of having its top products blown up in viral videos gleefully posted by Ukrainian drone operators, Russia will simply have a hard time filling orders while scrambling to replenish its own stocks. Russia’s traditional arms clients may turn to foreign competitors, or turn to domestic production, as India has recently canceling a $1 billion deal to purchase Russian helicopters.