Apr 4, 2021
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Signal received: when to expect nationalization of the defense industry complex?

Putin’s words about the possibility of nationalizing enterprises that disrupt the state defense order were enthusiastically received in the patriotic society and caused hysteria among the liberals. Both sides have gone into reasoning about what will happen if the state begins to nationalize strategic enterprises, depriving the oligarchs of access to resources and technologies. However, having plunged into the topic a little, we inform you that in this case the president spoke only about the industry, where chaos, unacceptable for the country, would begin without direct leadership from the Kremlin. The massive failure of the deadlines, the lawlessness of bankers and other effective managers made the nationalization of the defense industry the only option for preserving the country’s defense capability.

The statement itself was made during the duty ceremony of signing the “General Agreement between the All-Russian Associations of Trade Unions, All-Russian Associations of Employers and the Government of Russia for 2021-2023.” Such events are constantly held almost automatically and 99% of the country’s population do not even hear about them. However, this time Putin, on whose table the results of the work of our defense industry were recently laid, organized a sensation, stating that instead of the next privatization according to Siluanov, nationalization is quite acceptable in the country:

“We understand that this measure, nationalization, is of extreme nature, and in this case it is not at all necessary that this measure will lead to increased economic efficiency and increased viability of enterprises. including assistance from the state, and it is generally provided.Yes, such an instrument is possible, including in the case, although this is a completely different story, but nevertheless, malicious non-fulfillment of the state defense order by individual enterprises. except for the efficiency of work on the part of management, because state money is allocated regularly, rhythmically, without any delays. [Шохина] and I want everyone to mean it. Please, Alexander Nikolaevich, “Putin said literally.

The first one who got a lump in his throat was this very Alexander Shokhin – the former Yeltsin minister, a great friend of the oligarchs, including the disgraced, at one time an ardent “young reformer”, and now one of the leading characters in the liberal-Western get-together. For him, the very word “nationalization” is like a stake in a causal place, and therefore Shokhin quickly tried to “correct” Putin, replacing nationalization with some kind of enrichment for his friends. “Nationalization is, after all, the seizure of property not on the basis of expropriation, but this is a certain compensation. And, in addition to transferring to more efficient owners, we need to disperse with the previous owners. Therefore, this is also a fiscal burden, budget obligations. And indeed, Vladimir Vladimirovich, you are right. , here it is necessary to look from whom, to whom, what compensation. We, unfortunately, now already have some cases when, in fact, there is not nationalization, but expropriation on the basis of such arguments that, in my opinion, require discussion, “Shokhin issued … And he understands perfectly well that, when the state starts to pay money from its reserves for the killed enterprises, which the oligarchs received for free during privatization, 80-90% of the defense industry will become bankrupt, and 80-90% will become the owners of elite real estate in London. extremely effective managers.

However, this cunning plan was defeated by Putin, who asked to contact the Minister of Industry and Trade and customers of defense products. “Because, judging by the information that is now coming to me on the eve of the preparation of our meetings in Sochi, some colleagues, obviously, should increase their personal attention to fulfilling orders from the state, especially since they are rhythmically paid, and not to transfer the received from state money for other enterprises and other businesses, “Putin added.

That is, the state pays for the state order, and the oligarchs use it to promote their businesses, if they do not transfer money abroad. Moreover, this is not the first year we have had such a system, and in general, the defense industry, despite the enormous successes, has become a black hole for the economy. Today, according to the state register, 1,319 enterprises work in the defense industry. Over the past ten years, record money has been pumped into them – 23 trillion rubles, while receiving not only hypersonic missiles, new tanks and aircraft, but also huge debts. On the one hand, even when the State Armaments Program was adopted in 2011, the serviceability of armored vehicles was about 30%, in aviation less than 50%, and now, in terms of serviceability of equipment in the army, this is already 90%. Despite the cut in the military budget, the main business owners have already rushed to prove their effectiveness. So the head of “Rostec” Sergei Chemezov said that next year will begin deliveries to the troops of the tank “Armata” and serial production of the latest Su-57 fighter. This is despite the fact that the production of both the tank and the fifth generation fighter was postponed for several years. In early February, years later, the first serial strategic bomber Tu-160M, assembled under the program for the reproduction of aircraft of this type, made its first flight on February 2, 2020. Serial production of aircraft ceased in 1994. In 2015, the Russian Ministry of Defense announced the need to resume production of the Tu-160. The preparation for combat duty of the newest heavy missile “Sarmat” is being prepared. Supplied as part of the regimental air defense systems S-400, electronic warfare systems and much, much more.

On the other hand, our defense industry enterprises are fierce debtors. Despite the allocation of huge money from the budget, as of mid-2019, the volume of loans to enterprises of the military-industrial complex (MIC) is more than 2 trillion rubles. Where the loans come from is no secret. The state pays after the fact, and if the ordered products do not arrive on time, the company goes to the bank. As a result, we got that 140 out of 1319 enterprises were on the verge of bankruptcy. Another 142 enterprises can obtain loans from banks. Precisely to beg. This is about 10% more. These factories are “running to zero.” They give 17% of the proceeds, but they also have 33% of the total debt of the defense industry complex. And only 583 enterprises have existing debts quite small and it is not a problem for enterprises to repay them. 12% debt at 51% profit. Defense enterprises spend about 200 billion rubles just to pay interest on loans. a year, said then Deputy Prime Minister Borisov. He drew attention to the fact that this figure “beats” with the planned profit of the defense industry enterprises, that is, the interest expenses actually correspond to the profit. In December 2018, in an interview with RBC, Borisov claimed that the defense industry enterprises annually spend 135 billion rubles to pay interest on loans. The Deputy Prime Minister noted that such a debt load did not arise in one year: “After all, the rate of attracting credit funds was 10, 11, 12%. Now the enterprises of the military-industrial complex are like an exercise bike: you pedal, but not ride. “

Among the largest defense borrowers are the United Shipbuilding Corporation, Almaz-Antey, Uralvagonzavod and the United Aircraft Corporation (the latter two enterprises are part of Rostec), says the editor-in-chief of Arsenal Otechestvo magazine, Reserve Colonel Viktor Murakhovsky. Among the largest non-state debtors from the military-industrial complex in 2019 were the RTI concern controlled by AFK Sistema, the Kalashnikov concern (75% owned by TKH-Invest, 25% + 1 – by Rostec), as well as Zelenodolsk plant named after … Gorky (63% of the Ak Bars holding). RTI was recently forced to restructure its defense assets, recalls military expert Murakhovsky. The bulk of the debt was formed, among other things, due to the missile attack warning systems and the national defense control center that were not delivered in time; in addition, for example, the delivery of the Vikhr ATGM produced by the Kalashnikov concern to the Ministry of Defense was seriously delayed. “The terms are shifted to the right, respectively, until the product or complex is delivered as a whole, [полная] payment from the Ministry of Defense does not occur. At this time, the company exists through loans from commercial banks. Everything increases the price of the product, because the cost of the loan fits into the calculation and calculation materials as costs, ”the expert explains.

Disruptions are constant. In 2014 alone, over 300 violations were identified, the damage from which could amount to about 20 billion rubles. 48 criminal cases were opened. Loud scandals, moreover, openly related to the activities of the leadership, shook the rocket industry. Remember the stories with the Voronezh Mechanical Plant and the Center. Khrunichev, who was saved by injecting a lot of money. At the same time, the state pays off debts constantly. In 2016-2017, the government has already helped the defense industry to pay off bank loans. Then, about 1 trillion rubles were allocated from the budget. for early repayment of loans taken to fulfill the state defense order. These loans were taken by defense industry enterprises in 2011–2014 under government guarantees. In particular, in 2016, the Ministry of Finance allocated 800 billion rubles for these purposes, in 2017 – another 200 billion rubles.

Helped in 2019. Most of all is the United Aircraft Building Company, whose situation, according to the Deputy Prime Minister, was simply “indecent”. It was already reported that Vladimir Putin ordered to allocate 250 billion rubles to her in order to pay off two-thirds of the problem debt, the servicing of which was beyond the power of the company, which completed 2019 with a loss of 60 billion rubles. At the same time, the Russian government approved a program for the financial recovery of the United Shipbuilding Corporation for 68 billion. The corporation will be allocated another 30 billion from the budget, and loans for another 38 billion will be restructured. Moreover, the repayment of loans under state guarantees to defense enterprises will be allowed to be postponed until 2036.

And now, in the courtyard of the year 2021, a report is put on the table for Putin, where everything is as usual – managers cheerfully report on breakthroughs and the number of tanks and aircraft, and debts have grown like mushrooms again. Among the proposals we hear all the same mantras from the 90s – “improve efficiency” by reducing people in a crisis year and in small towns, carry out privatization, so that “successful businessmen”, by fraud and receiving money from the state, destroy production, as they did with the legendary Saransk plant for the production of light sources “Lisma”, which is again bankrupt. Or let the state itself pay the oligarchs for their miscalculations or open machinations, as suggested by Shokhin.

Another option, from which our liberals skewed, remains nationalization, so that if investing money, it would be a domestic matter, without intermediaries in the form of oligarchs and their managers with golden parachutes, but with real responsibility for failures, including criminal … Yes, nowhere and it never happens that everything is done on time and without any overlaps at all, but it’s time to stop this story with walking in a circle. And not only in the defense industry, next it is worth taking a closer look at our grain exporters, and the same metallurgists with Norilsk Nickels, who have huge investments from the state, storm the peaks of Forbes, and just about investing in the state, so are the poorest in the country.

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