Rossiya Scan: Machine Guns, INF and Saudi Arabia

"How The World Sees Russia" Issue #31: 10/27/2018 From the Publisher: This week’s Rossiya Scan is all about weapons. We begin this issue by looking at the reasons behind the U.S’s decision to begin research to build derivatives of two popular Russian machine guns. The move has drawn anger from Moscow who believes the U.S is in the process of stealing its intellectual property. For now, the U.S is unfazed by such accusations, and the defense firms that have been awarded these re-engineering contracts continue to work on the feasibility of this project. Should these companies find success it will have consequences on the global arms market. One which is currently dominated by the U.S, and secondly by Russia. We then move on the U.S decision to withdraw from the Intermediate-Range Nuclear Forces (INF) Treaty . The latter has been described as one of the most successful arms control treaties ever penned. The reasons behind the potential pullout from the U.S is more than mistrust of Russia. China is an actor whose moves are said to have also fueled the now thinkable denouement of this long standing treaty. The possible collapse might be wanted by both sides, who in the end are wary of China. We analyze the consequences that the INF has had since its inception, as well as what it means for Russia. Finally, we take a look at Russia’s decision to stand with Saudi Arabia’s Crown Prince Mohammad bin Salman Al Saud. The Kremlin stated that their relations with the Kingdom of Saudi Arabia will remain the same. There is politics involved behind this decision, and we delve into them. -Rossiya Scan U.S Decision to 'Copy' Russian Weapons Angers Moscow The U.S. has a problem. For decades it has supplied hundreds of thousands of Soviet-style guns to allies, as well as acquired a few of its own for training related purposes. In the past, it has been able to source these weapons without issue from third-party countries that have the technology, and licenses to make them. Due to the ongoing U.S sanctions against Russia, which include Russian defense companies, it has been increasingly difficult for the U.S to continue to supply allies with these weapons. Hence, the U.S. Special Operations Command (SOCOM) has contracted three U.S companies to begin research on building derivatives of Russia’s PKM light and NSV heavy machine guns . This move by Washington D.C. has understandably been received with much annoyance in Moscow. Kalashnikov Concern, the Russian defense firm behind the infamous AK-47 assault rifle, was caught flatfooted by the U.S. Special Operations Command’s moves to reverse engineer some of Russia’s most coveted weapons, in order to produce them within the United States. The request by SOCOM, however, is over a year old, and contracts on “the feasibility” of building these guns have already been awarded to Dillon Aero, McNally Industries and Knights Armament company. Russian leaders, and industry representatives, have warned the U.S. to not go ahead with its derivatives program, as it would be illegal. “If someone wants to carry out this work legally ... they should approach Rosoboronexport [Russia’s state arms exporter] and discuss it,” said Rostec, Kalishnikov’s parent company. “Otherwise, this would amount to the illegal copying of Russian innovations or theft, simply speaking.” The U.S has been relying mostly on Bulgaria, Hungary and Romania. The latter three countries are members of NATO, and have the licenses and technology to build these Soviet-era style weapons. At times, the Ukraine has also been used supply these weapons, as they hold a license to manufacture them. “Several countries hold licenses for manufacturing Russian machine guns of this model, but the U.S. is not among them," said Russian senator Viktor Bondarev, who heads the Committee on Defense and Security at the Duma, according to Russia state media . “We should prevent any attempts to use Russian weapons developments without our permission.” However, Bulgaria, Hungary, Romania and the Ukraine do not have the production capabilities to meet U.S demands. Thus, the U.S decision to call upon its domestic defense contractors to explore the a more long-term solution. Why can’t the U.S service the demand of its allies with its own U.S made and designed guns? Several of these allies already use vast amounts Russian or soviet made weaponry. Thus, to completely replace them is very costly. Also, U.S guns tend to be more expensive, and are not necessarily better than their Russian counterparts. The U.S also needs to own some of these Russian weapons to be able to train allies (e.g. the Afghan or Iraqi governments), or for covert operations. Currently, the contracts are in phase 1, which means effectively the research stage. However, if they do reach phase 3, this means a full-production line will be created to produce these derivative guns. It’s unclear whether the Russian weapon manufacturers will have a legal case against the U.S government. It is likely that the U.S made derivatives are going to have enough differences to not be considered copies, and therefore in the clear. However, what Russia does need to be careful with is if the U.S does produce a quality substitute to their very own guns. This would allow the U.S to make inroads into Russia’s clients in regards to military equipment. Russia is the 2 nd largest conventional weapons exporter in the world after the U.S. The U.S could seriously chip away at their market with proper substitutes of their small arms, if the product and price point is correct. Thus, it is understandable for Russia to grow worried. The U.S has money, and technology to achieve this. Read more: "Russia Rages At Pentagon Plans To Build U.S. Made Derivatives of Soviet-Era Small Arms," by Joseph Trevithick for The Drive. "SOCOM Solicitation for ‘Reverse Engineered’ Foreign Weapons Sparks Russian Anger, Warnings," by Kyle Rempfer for the Military Times. "U.S Commandos Were Fond of their AK-47s," by War is Boring staff. Small Business Innovation Research SOCOM contract notice. A New Nuclear Arms Race? In order to see what’s coming, dwelling into the past can be an eye opener. In Rossiya Scan we believe, that along with the indicators signaling a critical turn of events putting at stake global “security”, we also need to enquire into the past to see how a spark, can ignite rapidly into a blaze. U.S President Donald Trump has stated his intentions to withdraw from the Intermediate-Range Nuclear Forces treaty (INF), a successful nuclear arms agreement reached between U.S President Ronald Reagan and Chairman of the Supreme Soviet of the Soviet Union Mikhail Gorbachev in 1987, mitigating the risk of a global thermonuclear war at the time. At a glance, Intermediate-Range Nuclear weapons are very tactical when engaging in warfare due to their mobility, accuracy, reach (500km – 5500km), concealment and rapid deployment from strategic locations. The U.S (with hawkish U.S National Security Advisor John Bolton always on the offensive) asserts that Russia has not been respecting the rules of the treaty, deploying a new generation of land-based missiles 9M279. On the other hand, Russia is not happy with the deployment of the THAAD anti-missile defense system. Moscow claims that the missiles used in this defense system, which will soon be deployed in Europe (Poland, Germany), don’t respect the treaty, and are a threat to Russia. At first, the world seems concerned of an arms race escalating between Russia and the U.S. When we look back at history the last two arms races led to very tense global political directions. The first was prior to World War 1, the UK and Germany gearing up on Dreadnoughts (most powerful ship at the time), with Germany wanting to challenge British naval global dominance, and most recently during the Cold War. The first arms race was a major factor leading to WW1, while the nuclear-arms race had the potential of devastating most of the planet. Going back to Russia’s and the U.S’s perceptions of violations of the treaty, there is another crucial underlying factor to breaking up this treaty. We believe that Russian President Vladimir Putin and Trump will probably discuss this mutual concern in a meeting expected to be held in Paris on November 11 between the two leaders. China has not signed this treaty, and has really been gearing up on intermediate range missiles, giving it a huge advantage over its rivals. Positioning these missiles in the artificial reefs built in the South China sea, consolidating their position in this key strategic region. As stated in many prior issues, Rossiya Scan views the South China sea as a major point of conflict in the future. The U.S has an “America First” policy, doing all they can, no matter the cost to secure their interests. Russia is maneuvering between different factions, cautiously positioning themselves too fulfill their political agenda, and also playing a "Russia First" style policy. Even though we could perceive the withdrawal of this treaty as yet another example of the U.S and Russia growing further apart from one another, perhaps it is also an "out" for each. An opportunity to unshackle their hands, and address a security concern that they are currently unable to address. Each might feel the need to put up a show to not raise any suspicion about their real fear, which could very well be an increasingly powerful China. For Russia, this also means not losing face in the Sino-Russian Alliance , which at the moment is very strategic to them. Read more: “Trump to pull U.S out of nuclear treaty with Russia,” by Katrina Manson, Henry Froy & David bond for the Financial Times. “Trump to meet Putin in Paris after Threat to Pull out of Arms Pact,” by Henry Foy for the Financial Times. “John Bolton Pushing Trump to Withdraw from Russian Nuclear Arms Treaty,” by Julian Borger for the Guardian . “US

"How The World Sees Russia"

Issue #31: 10/27/2018

From the Publisher:

This week’s Rossiya Scan is all about weapons.

We begin this issue by looking at the reasons behind the U.S’s decision to begin research to build derivatives of two popular Russian machine guns. The move has drawn anger from Moscow who believes the U.S is in the process of stealing its intellectual property.

For now, the U.S is unfazed by such accusations, and the defense firms that have been awarded these re-engineering contracts continue to work on the feasibility of this project. Should these companies find success it will have consequences on the global arms market. One which is currently dominated by the U.S, and secondly by Russia.

We then move on the U.S decision to withdraw from the Intermediate-Range Nuclear Forces (INF) Treaty. The latter has been described as one of the most successful arms control treaties ever penned.

The reasons behind the potential pullout from the U.S is more than mistrust of Russia. China is an actor whose moves are said to have also fueled the now thinkable denouement of this long standing treaty. The possible collapse might be wanted by both sides, who in the end are wary of China. We analyze the consequences that the INF has had since its inception, as well as what it means for Russia.

Finally, we take a look at Russia’s decision to stand with Saudi Arabia’s Crown Prince Mohammad bin Salman Al Saud. The Kremlin stated that their relations with the Kingdom of Saudi Arabia will remain the same. There is politics involved behind this decision, and we delve into them.

-Rossiya Scan

U.S Decision to 'Copy' Russian Weapons Angers Moscow

The U.S. has a problem.

For decades it has supplied hundreds of thousands of Soviet-style guns to allies, as well as acquired a few of its own for training related purposes. In the past, it has been able to source these weapons without issue from third-party countries that have the technology, and licenses to make them. Due to the ongoing U.S sanctions against Russia, which include Russian defense companies, it has been increasingly difficult for the U.S to continue to supply allies with these weapons.

Hence, the U.S. Special Operations Command (SOCOM) has contracted three U.S companies to begin research on building derivatives of Russia’s PKM light and NSV heavy machine guns . This move by Washington D.C. has understandably been received with much annoyance in Moscow.

Kalashnikov Concern, the Russian defense firm behind the infamous AK-47 assault rifle, was caught flatfooted by the U.S. Special Operations Command’s moves to reverse engineer some of Russia’s most coveted weapons, in order to produce them within the United States.

The request by SOCOM, however, is over a year old, and contracts on “the feasibility” of building these guns have already been awarded to Dillon Aero, McNally Industries and Knights Armament company.

Russian leaders, and industry representatives, have warned the U.S. to not go ahead with its derivatives program, as it would be illegal.

“If someone wants to carry out this work legally ... they should approach Rosoboronexport [Russia’s state arms exporter] and discuss it,” said Rostec, Kalishnikov’s parent company. “Otherwise, this would amount to the illegal copying of Russian innovations or theft, simply speaking.”

The U.S has been relying mostly on Bulgaria, Hungary and Romania. The latter three countries are members of NATO, and have the licenses and technology to build these Soviet-era style weapons. At times, the Ukraine has also been used supply these weapons, as they hold a license to manufacture them.

“Several countries hold licenses for manufacturing Russian machine guns of this model, but the U.S. is not among them," said Russian senator Viktor Bondarev, who heads the Committee on Defense and Security at the Duma, according to Russia state media. “We should prevent any attempts to use Russian weapons developments without our permission.”

However, Bulgaria, Hungary, Romania and the Ukraine do not have the production capabilities to meet U.S demands. Thus, the U.S decision to call upon its domestic defense contractors to explore the a more long-term solution.

Why can’t the U.S service the demand of its allies with its own U.S made and designed guns? Several of these allies already use vast amounts Russian or soviet made weaponry. Thus, to completely replace them is very costly. Also, U.S guns tend to be more expensive, and are not necessarily better than their Russian counterparts. The U.S also needs to own some of these Russian weapons to be able to train allies (e.g. the Afghan or Iraqi governments), or for covert operations.

Currently, the contracts are in phase 1, which means effectively the research stage. However, if they do reach phase 3, this means a full-production line will be created to produce these derivative guns. It’s unclear whether the Russian weapon manufacturers will have a legal case against the U.S government. It is likely that the U.S made derivatives are going to have enough differences to not be considered copies, and therefore in the clear.

However, what Russia does need to be careful with is if the U.S does produce a quality substitute to their very own guns. This would allow the U.S to make inroads into Russia’s clients in regards to military equipment.

Russia is the 2^nd largest conventional weapons exporter in the world after the U.S. The U.S could seriously chip away at their market with proper substitutes of their small arms, if the product and price point is correct. Thus, it is understandable for Russia to grow worried. The U.S has money, and technology to achieve this.

"SOCOM Solicitation for ‘Reverse Engineered’ Foreign Weapons Sparks Russian Anger, Warnings," by Kyle Rempfer for the Military Times.

"U.S Commandos Were Fond of their AK-47s," by War is Boring staff.

Small Business Innovation Research SOCOM contract notice.

A New Nuclear Arms Race?

In order to see what’s coming, dwelling into the past can be an eye opener. In Rossiya Scan we believe, that along with the indicators signaling a critical turn of events putting at stake global “security”, we also need to enquire into the past to see how a spark, can ignite rapidly into a blaze.

U.S President Donald Trump has stated his intentions to withdraw from the Intermediate-Range Nuclear Forces treaty (INF), a successful nuclear arms agreement reached between U.S President Ronald Reagan and Chairman of the Supreme Soviet of the Soviet Union Mikhail Gorbachev in 1987, mitigating the risk of a global thermonuclear war at the time.

At a glance, Intermediate-Range Nuclear weapons are very tactical when engaging in warfare due to their mobility, accuracy, reach (500km – 5500km), concealment and rapid deployment from strategic locations.

The U.S (with hawkish U.S National Security Advisor John Bolton always on the offensive) asserts that Russia has not been respecting the rules of the treaty, deploying a new generation of land-based missiles 9M279. On the other hand, Russia is not happy with the deployment of the THAAD anti-missile defense system. Moscow claims that the missiles used in this defense system, which will soon be deployed in Europe (Poland, Germany), don’t respect the treaty, and are a threat to Russia.

At first, the world seems concerned of an arms race escalating between Russia and the U.S. When we look back at history the last two arms races led to very tense global political directions. The first was prior to World War 1, the UK and Germany gearing up on Dreadnoughts (most powerful ship at the time), with Germany wanting to challenge British naval global dominance, and most recently during the Cold War. The first arms race was a major factor leading to WW1, while the nuclear-arms race had the potential of devastating most of the planet.

Going back to Russia’s and the U.S’s perceptions of violations of the treaty, there is another crucial underlying factor to breaking up this treaty. We believe that Russian President Vladimir Putin and Trump will probably discuss this mutual concern in a meeting expected to be held in Paris on November 11 between the two leaders.

China has not signed this treaty, and has really been gearing up on intermediate range missiles, giving it a huge advantage over its rivals. Positioning these missiles in the artificial reefs built in the South China sea, consolidating their position in this key strategic region. As stated in many prior issues, Rossiya Scan views the South China sea as a major point of conflict in the future.

The U.S has an “America First” policy, doing all they can, no matter the cost to secure their interests. Russia is maneuvering between different factions, cautiously positioning themselves too fulfill their political agenda, and also playing a "Russia First" style policy.

Even though we could perceive the withdrawal of this treaty as yet another example of the U.S and Russia growing further apart from one another, perhaps it is also an "out" for each. An opportunity to unshackle their hands, and address a security concern that they are currently unable to address. Each might feel the need to put up a show to not raise any suspicion about their real fear, which could very well be an increasingly powerful China. For Russia, this also means not losing face in the Sino-Russian Alliance, which at the moment is very strategic to them.

“Trump to meet Putin in Paris after Threat to Pull out of Arms Pact,” by Henry Foy for the Financial Times.

“John Bolton Pushing Trump to Withdraw from Russian Nuclear Arms Treaty,” by Julian Borger for the Guardian.

“US leaving INF Will Put Nuclear Non-Proliferation at Risk & May Lead to ‘Complete Chaos’ – Moscow,” by Russia Today staff.

“Army Weighing THAAD Deployments in Europe, Middle East,” by Jen Judson for Defense News.

INF : Military Gains, and Economic Pitfalls for Russia

Over the past months, the U.S has retreated or threatened to retreat from various new and longstanding treaties. Examples include the Iran deal, the International Postal treaty and now from the 1987 International Nuclear Forces Treaty (INF). All of this has created quite the international conundrum, where the established order seems to be in complete disarray.

As stated the article above, the U.S has been accusing Russia of violating the treaty for years. Russia has denied all accusations and has in turn accused the U.S of violating the treaty. Citing U.S missile systems in Romania and Poland. Again, there is also the China element. The rising power is not a signatory to INF, and as such can build up a hefty arsenal of weapons that neither the U.S and Russia are allowed to (or are not supposed to).

The military balance of power in Europe would be upended with a U.S withdrawal. Russia is likely to come out the strategic winner from a defense standpoint.

"After the end of the INF Treaty, Russia will be free to deploy without constraint land-based intermediate-range missiles to target Europe [and Asia as well]," said Steven Pifer, a nonresident senior fellow at the Brookings Institution, a Washington D.C.-based think tank, according to Aljazeera. “The U.S does not have counterparts for these missiles, and it is unlikely that NATO could reach consensus on deploying U.S missiles in Europe if they existed".

On a more pragmatic and economic standpoint, there are also economic reasons for why U.S President Donald Trump might see a plus in leaving the treaty. As stated before, Trump has been following an “America First” policy, which is at heart an economic plan. The latter is a call to fortify domestic industry, and jumpstart the economy with a demand for American made products. The military is a way to do so, as it can channel billions of dollars into research, production and upkeep.

Should the U.S bait Russia into a serious arms race, similar to the one that helped precipitate the fall of the USSR, it would likely win. Russia does not have the economic strength to keep up with the U.S or have the military industrial complex to do so. According to the Stockholm International Peace Research Institute, a Swedish-based think tank, U.S military expenditure in 2017 stood at $610 billion for the U.S, in comparison to Russia’s $66.3 billion.

There are examples of where Russian military products show superiority to the U.S counterparts (such as the S-400’s), but as a whole Russia is behind, and would lose because of its resources capabilities. On macro-level, Russia’s poorer economy, and production capacity are no match for the U.S. That being said, we at Rossiya Scan believe Russia is aware of its capabilities, and is unlikely to enter an intense arms race with the U.S.

"Putin tells Bolton he is ‘Surprised’ by U.S’s ‘Unprovoked steps towards Russia," by Henry Foy for the Financial Times.

"Europe at Heart of U.S, Russian Battle Over Missile Treaty," by Creede Newton for Aljazeera.

"Bolton says U.S plans to Talk to Allies Before Leaving Russian Nuclear Pact," by Ann M. Simmons for the Wall Street Journal.

"Russian Officials slam Trump’s Plans to Exit Nuclear Treaty," by Ann M. Simmons, Thomas Grave and Courtney McBride for the Wall Street Journal.

Russia Strengthens Relation with Saudi Arabia

Last week, numerous world leaders were swift in condemning Mohammed bin Salman (MBS) for the gruesome murder of Saudi-journalist Jamal Khashoggi. Many high-profile business leaders also condemned the killing, and boycotted the Future Investment Initiative summit in Riyadh, Saudi Arabia in protest. (Even though the CEO’s didn’t show other top level executives did attend the conference…sadly... it’s all about PR...).

Russian President Vladimir Putin was the only world leader to have vocally and publicly stated that there was no need to alter relations with Saudi Arabia. Now, that may not be the public endorsement MBS needed, and yet, it was a public one, coming from a leader that is seen by critics as another petro-state ‘monarch’.

Now, as the U.S threatens Saudi Arabia with sanctions, the fact that Riyadh is playing the Russian card to scare the U.S should be considered. The US has a $100BN weapons deal with Saudi Arabia, what if now they were to renege on that deal and instead purchase military equipment from Russia? Would the U.S sanction them as they did China and Turkey?

From an economic standpoint, Russia and Saudi Arabia are the world’s largest oil producers and can easily spike oil prices. Thus, going against Trump’s desire for a stabilized and cheap oil market. Oil is a ‘weapon’ that both Russia and Saudi Arabia have, and would use if necessary. Russia has been long courting MBS, who is believed to be the heir apparent of King Salman, his father.

In the wake of this ‘support’ from Russia, a joint statement said that both would continue to work together to keep the oil market stable. This statement is yet another warning to the world that both will act together if pressured. Additionally it was announced that Saudi Arabia was interested in acquiring a 30% stake in Novatek’s (MCX:NVTK) Arctic LNG project. Could this perhaps be a sign of gratitude by MBS for the support? Additionally, Saudi Arabia announced that it would join the Russian-Chinese joint investment fund.

These signs by MBS may just be a signaling to the West that Saudi Arabia is going to find other partners if they turn their back on him. Of course, it may also be a diversification strategy, but in light of all that is happening, it would seem not.

Russia, however, is faced with one major issue, its local partners are Turkey and Iran, which are two of Saudi Arabia’s biggest enemies. However, as stated in many Rossiya Scan issues, Russia is the only country that has a positive relationship with Israel, while still being an ally of its main enemies. Therefore, Russia, could surprise us again with its compartmentalized, and effective realist diplomacy.

"Kremlin: No reason To Doubt Saudi Statement on Khashoggi Murder," by Maria Tsvetkova for Reuters.

"Saudi Arabia, Russia Agree To Extend Pact to Keep Oil Markets Stable: Saudi State TV", by Nafisa Eltahir for Reuters.

"German Halt to Saudi Arms Sales Could Put squeeze on Eurofighter," by Andrea Shalal and Sabine Siebold for Reuters.

"Saudi Arabia Aims to Take Stake in Russian LNG Project," by Nastassiya Astrasheukskaya for the Financial Times.

"Russian Sovereign Wealth Fund Attracts Saudi Partners to Its Fund with China" by Reuters staff.

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