Ukraine has more than 15 years of experience in military-technical cooperation (MTC) with NATO and EU countries. Unfortunately, however, Ukraine’s notorious reluctance to modernize its own military and, to some extent, its inability to play by Western rules preclude high levels of MTC with the West. Western defense companies, for their part, have not demonstrated openness to a flexible defense-industrial cooperation policy towards Ukraine.
Lessons learnt from the initial period of cooperation
As the Ukrainian government has been traditionally keen to expand the export за arms and military equipment (AME), the country was able to retain some defense-related R&D and manufacturing capacities and even create several new schools of thought on defense technologies, and some of them from scratch, e.g. on armored personnel carrier vehicles and modern protective equipment for armored military vehicles.
First MTC experiences with Western defense companies date back to the 1990s. Some joint projects were pretty successful technologically, as was the trinational Ukrainian-Franco-Czech project to upgrade the T-72 main battle tank to the T-72AG configuration for the benefit of third-country customers. Other initiatives proved far less successful, such as the project to use the An-70 aircraft as a prototype for NATO’s future military transport platform.
Despite all the problems Ukraine was able both to sell arms for export to European markets and to develop collaborative projects. Examples are Greece (Bison-class light landing craft air cushion (LLCAC) vehicles, 2000), Macedonia (overhauled and upgraded Soviet-built aircraft and armored military vehicles, 2003), the USA (protective equipment for military armored vehicles, newly-built tanks, 2004), Poland (protective equipment for military armored vehicles and helicopters, years after 2005) and Belgium (precision-guided weapons; follow-up projects after 2010). Some of the projects had a high level of technological sophistication that revealed Ukraine’s capacity to perform most ambitious projects qualitatively and efficiently. For example, State Luch Design Bureau of Kyiv and Belgium’s CMI (Cockerill Maintenance & Ingenierie) Defence jointly implemented a successful project to integrate a 90mm Cockerill gun turret with the fundamentally new Falarick 90 ATG missile.
A range of collaborative projects with Western defense companies were carried out for the benefit of the Ukrainian Armed Forces. Especially positive experience that Ukraine has had thus far has been with Poland, and this experience is encouraging. Among most visible achievements are collaborative R&D with Polish partners relating to precision-guided weapons and protective equipment for helicopters and armored vehicles. Also noteworthy is the beginning of work to formulate new concepts regarding R&D on unmanned aircraft systems and upgrade of aircraft technology in Ukraine. Indeed, this has been made possible not least due to the more extensive political dialogue and successful collaborative efforts in dual-use technology areas such as aerospace (Ukrainian companies partnered in the European Vega and U.S. Antares space launch vehicle projects and the international Sea Launch project) and the employment of Ukraine’s military transports for air transportation of NATO’s military personnel and supplies under the Strategic Airlift Interim Solution (SALIS) program.
Most importantly, Ukraine has begun to leverage the experience of the Western world and is gradually transitioning to NATO standards, which have become the dominant standards worldwide. It was back in the early 2000s when Ukrainian defense industries created successful designs such as the Yatagan MBT, the Kvitnyk family of precision-guided gun-launched projectiles, the Falarick family of tank gun launched missiles, as well as protective equipment for armored vehicles and helicopters – all built to conform to NATO’s compatibility requirements, particularly through the use of Western-supplied components such as a NATO-caliber gun bought from Switzerland and thermal imagers bought from France.
The leveraged experience of NATO/EU countries suggests that military-technical policy should be regarded as a most important State military strategy tool, as a system of far-sighted, scientifically grounded views on the development of arms and the national defense industrial capacities. Unfortunately, real changes in the thinking of political leadership and defense industry managers in Ukraine have been too slow to occur. But what is critically important is that Ukraine has finally come to understand the need for technical modernization of its Armed Forces to current standards, and that this task is obviously beyond the capabilities of the domestic defense industry alone. Western defense companies, for their part, have begun to use more flexible policies with respect to technology transfers and the engineering of collaborative defense technology projects with Ukraine.
Initial significant changes in approaches to how Ukraine’s defense industries should grow occurred in 2008–2009, the period that saw the start of important programs such as the Mi-24 combat helicopter upgrade assisted by SAGEM of France, and the indigenous naval corvette warship that is foreseen to incorporate about 38% of components and subsystems of the Western manufacture, with potential suppliers in France, the Netherlands and Germany among other countries of the Western world. However, it took good two years of intensive negotiations for Ukraine to get formal approval for such cooperation from governments of France, Italy and Switzerland. However in one occurrence Germany refused to transfer a missile technology to Ukraine. In the long run, subcontracts were awarded to 35 companies, and overall level of mutual confidence has increased significantly. Another positive MTC experience was with Israel, in a project that resulted in the purchase of a tactical-level unmanned aircraft system.
However, almost all MTC projects with Western defense companies were put on hold with the coming to power of Viktor Yanukovych and his pro-Russian administration. Obviously enough, this was made possible by the involvement of Russia, who set out to bring Ukraine back into its geopolitical and economic orbit.
New times. Capabilities and Opportunities
It is worth noting that significant changes also occurred within the Ukrainian defense industry. Unlike in the 1990s when ready-made equipment made up from 8% to 12% (by varying estimates up and down) of the country’s total defense production, this level has now risen to 20-25% due to implementation of a range of export market initiatives. Beyond the aforementioned equipment types, new projects emerged such as the Oplot MBT (Kharkiv’s Malyshev Factory), light armored vehicles (Kharkiv’s Morozov Design Bureau), ‘dual-use’ and military trucks (AvtoKrAZ Holding Company), radar systems (Ukrspetstechnika), trainer simulators (MATS Holding Company), a variety of upgrade packages for combat aircraft MiG-29, Su-27, Su-25, L-39, and Mi-24 and Mi-8 helicopters, as well as modular assembly of armored military vehicles of all types.
Domestic defense industries now have the capability to produce up to 30% of the range of the AME types required by the Ukrainian Armed Forces and other security sector institutions, according to CACDS’ statistics, thanks largely to the emergence and growth of brand new R&D schools of thought, most particularly on precision-guided weapons (an anti-ship cruise missile, a tactical-and theater range missile system, a smart bomb etc). An experimental piece of the first indigenous SAM missile system designated Alta was inaugurated at a defense technology exhibition in Kyiv on 24-25 September 2014. Antonov aircraft maker announced being ready to launch a fighter trainer development project, while a number of privately-owned companies said they would intensify developments of new UAV capabilities.
In this new environment created by Russian aggression in Ukraine, a leap in the development of AME types for the Ukrainian military, particularly through international defense-industrial cooperation has become possible. Ukraine needs to diversify foreign sources of defense technology and manufactured products required by the country’s military establishment. Therefore, an emphasis placed on leading-edge Western technology is becoming a must for the growth of Ukraine’s capacity to provide its own security.
It should be emphasized that, with the launch of the Kremlin’s aggression against the Ukrainian State, new, sufficiently appealing opportunities have emerged for Western defense companies. While a persistent lack of funding for homeland defense programs was previously the key hurdle for Ukraine’s partnership with the West, Ukraine is now evolving into a capacious market for defense technology.
This is precisely about the technology, rather than defense products proper, because, given the availability of extensive domestic defense industrial capabilities, there should be no expectation of any significant procurements of arms and military equipment directly from foreign suppliers.
Western partners are now guided by the statement made by Ukrainian President, Petro Poroshenko during festivities celebrating the 23rd Anniversary of Ukraine’s independence on 24 August 2014, wherein he promised the disbursement of about UAH40B in funding for technical military modernization programs over the next three years. This is the key signal for European countries to launch cooperation with Ukraine, as this implies opportunities for collaborative R&D and co-production programs and for the development of multinational projects.
Ukraine’s Ministry of Defense budget was set at UAH44.6B (USD2B) for 2015. On 9th February 9, the Government approved a record high level of the State Defense Procurement Order at UAH14B (USD600M), of which 15% is reserved for imported procurements. In addition, it makes provisions for a range of new R&D projects.
Technical status of the defense industries in Ukraine might be another contributing factor to defense-industrial cooperation between Ukraine and the West. For example, provisions regarding modernization and retooling of production lines and implementation of incentives for critical technology development in selected areas of specialization could be incorporated into offset agreements accompanying major armaments projects. It is known that, due to ineffective, incompetent military-technical policy, Ukraine is lagging seriously in important technology areas such as microelectronics hardware, microprocessor technology and nanotechnology which are all indispensable components of modern armaments. In this context it should be added that the Ukrainian Government, by its decree issued on 24 September 2014, exempted foreign defense companies from customs duties. This is significant in the context of technical modernization of the Ukrainian Armed Forces as the domestic defense industry is obviously not able to proceed as fast as needed with modernization of the homeland defense capacities. Important AME categories such as communications, ISTAR assets, C4I systems, some weapons types (especially ATGM and portable SAM systems) as well as some upgraded types of Soviet-built military equipment (particularly fighter airplanes and military helicopters) could be supplied to Ukraine under the already ongoing programs. Regarding strategic priorities of future cooperation, these include the building of a robust air defense infrastructure in Ukraine; production of helicopters, ammunition and unmanned aircraft systems; as well as the upgrade of gun fire capabilities among other areas.
It might be recalled that Sweden has already stepped up its cooperation in military technology with Ukraine. In October 2014, a team of the Swedish Defense Research Institute visited Kiev to meet and talk with executive officials of the Ukrainian defense industry. At the conclusion of the negotiations the parties agreed to develop bilateral projects in the defense technology industry. In April 2015, Ukrainian and Turkish defense industry officials agreed to launch new collaborative initiatives in space, aeronautical and armored industries. According to statistics provided by Ukroboronprom as of early March 2015, the Company added twenty more countries to its portfolio of international partners in the period between July and December 2014, and partnership talks were launched with Airbus, Boeing, Textron, Lockheed Martin, BAE Systems and Thales.
True, during the earlier part of 2015 Ukraine was more busy with exploring own AME production capacities. As reported by Oleksandr Turchynov, Secretary of the National Security and Defense Council on 9th April 2015, 50 new AME types have already been delivered to forces in the field. At the same time, according a statement made by Volodymyr Bashynsky, head of the Ukrainian Armed Forces’ R&D and Test Center on 31st May 2015, defense industries have increased the proportion of AMEs manufactured to NATO standard requirements, while Western countries have intensified their military aid supplies to Ukraine. Particularly the USA, who decided to provide Ukraine with non-lethal defensive equipment on 11th March 2015, delivered initial ten HMMWV vehicles in late March, of the total of 230 vehicles slated for delivery to Ukraine. All those events are contributing to an intensification of MTC and solidify the ground for further collaboration.
At the same time, it is urgent that the Ukrainian military-political authorities make the necessary actions to facilitate the domestic defense industries’ transition to Western technology standards.
First and foremost, legislative and administrative actions need to be made, which implies corporization and organizational restructuring of most of the country’s military production companies. There is need for a transparent process to compile a list of companies eligible to be acquired (with a legislatively determined stake of equity to be privatized) by Western defense companies.
Second success factor in defense industrial and procurement relations between Ukrainian and Western defense companies is the establishment of an appropriate, effective legal and regulatory framework for offset contracting in defense and security procurements.
Third, Ukrainian Government needs to appoint a single government coordinator of the national defense industry, who could be put in charge of awarding government defense procurement contracts and imported procurements of defense technologies. This would made it possible to re-direct Ukraine’s MTC with Western defense companies towards the establishment of joint ventures and industrial partnerships operating based on common free market principles.
Areas of intensive search and overlapping interests
In 2014 NATO and Ukrainian experts resumed consultations on potentialities for developing new MTC projects.
It should be noted that a number of MTC areas have been intensified as a result of the Russian aggression. Privately-owned entities were first to come with their initiatives. HC AvtoKrAZ, for example, launched deliveries of new Cougar and Spartan armored trucks to Ukrainian National Guard units and, joined with Streit Group, developed flat-bottom armored vehicles HMPV-A and Raptor based on its 6×6 KrAZ-6322 truck chassis.
One of potential MTC areas could include a review of previously suspended potentialities. For example, Ukraine has long had the potentialities of assembling helicopters under a license from the American company Sikorsky, as well as assembling (and marketing) Antonov airplanes (equipped with Pratt & Whitney powerplants) joined with U.S. partners. Another promising long-term cooperation project calls for getting Ukraine engaged as partner in the development and production of target missiles for use under the US national missile defense (NMD) program (previously Ukraine refused to participate due to Russia’s concerns). Now that Ukraine terminated the servicing of SS-18 ICBMs of the Russian Strategic Missile Forces in 2014, and Russia announced a refusal to continue buying airplanes and Motor-Sich engines from Ukraine, not only the resumption of said projects looks realistic but sensible as well.
One more potential MTC area could encompass projects to adjust Ukrainian technologies to new conditions. First and foremost, we are talking about aircraft industry projects. It would be fully realistic to give a new lease of life to military transport and specialty aircraft projects designed and built by Antonov, such as the AN-70 and AN-178. According to Antonov’s officials, other promising projects for MTC between Ukraine and the West include the An-148-300MR maritime patrol and border surveillance aircraft, the An-148T light military transport aircraft with a loading ramp, and the An-178 medium military transport aircraft with a loading ramp. The An-178 has now become a priority project for Antonov as the new aircraft made its successful maiden flight in May 2015. If accepted for MTC projects, the aircraft could be offered equipped with a Western-supplied powerplant, avionics and some other key subsystems. Regarding the An-70, the talk could be about Western defense companies replacing Russia who previously was key partner in this project.
The potential areas of partnership could include a previously suspended initiative on co-development and marketing of sonar equipment. In 2007-2008, the Kyiv Research Institute of Hydroacoustic Instruments and STN ATLAS Elektronick GMBH of Germany were co-working on a project to develop and market an active sonobuoy system. The same goes for projects on overhaul and upgrade of Soviet-built helicopters.
Still the key focus in MTC with Western defense companies should be on new high-tech developments, which could be used by partners for enhancing their respective homeland defense capacities. The following are some illustrative examples. Ukraine is extremely interested in developing robotic vehicles using domestic R&D and manufacturing capabilities, but Ukrainian engineers have traditionally had problems with payload equipment. Gyroscopes and other components are provided through imported supplies; the quality of live video data links is far below world standards; there have been none of high-tech secured wideband data links under development; satellite communication capabilities have not been implemented etc.
Several years ago Ukraine announced intent to develop an indigenous helicopter, which could be an appealing opportunity for Sikorsky, but with the proviso that the partners will need to make certain compromises. JSC Motor Sich with its 30,000 employees must become a key partner in this program.
In a situation where there are varying opinions as to the re-establishment of the national Naval Forces, the indigenous corvette program has been put on hold for known reasons (limited resources and the urgent need to build a robust coastal defense and costal fortification infrastructure). But resumption of the program in a longer term perspective looks pretty feasible, and the more so as Kyiv Research Institute Kvant proceeds with the development of a multipurpose active phased array radar system (PHOENICS-E), a shipboard radar-optical fire control system for medium-caliber guns (Stilet), an opto-electronic fire control system for small to medium caliber guns (Sarmat-2), as well as the shipboard optronic countermeasures equipment kit Facet, the optronic naval helicopter landing system Saga, the Infrared threat detection system Selena-X, the electromagnetic interference reducing system Sovmestimost; and the shipboard combat management system CMS that are all included into the Indigenous Corvette program. This ambitious program cannot be implemented other than with a high-level MTC.
A great many projects developed under export contracts could be used as basis for development, in active partnership with Western defense companies, of new AME types for the Ukrainian military. Particularly in 2014, special instrument factory Arsenal in Kyiv launched production line for the upgraded IS-90 infrared-homing AAM seeker head. Now in production for an export customer, it could well be used as baseline for a project specifically focused on the Ukrainian military’s requirements.
There is another example that well illustrates the high intellectual and R&D capacities of the Ukrainian industries. Ukrainian Defense Consulting (UDC) has since 2004 been actively engaged in projects in the field of automation and computerization of gun fire control functions. In 2014, UDC equipped artillery units of the Afghan Armed Forces with its proprietary computerized fire control system. According to Denis Danko, CEO of UDC, his Company has long partnered with U.S. firms Lockheed Martin, General Dynamics, Northrop Grumman and Dynacord. The first major contract in which UDC was involved called for the delivery of 110 BMP-1 infantry fighting vehicles to the U.S. firm BULOVA Technologies Group Inc, via the agency of the Zhytomyr Armor Factory and the Ukrinmash Corporation. This was followed by a major deal between Ukraine and General Dynamics involving the delivery of 44 D-30 howitzers. The Americans requested that the Ukrainian partner assist with “converting” the weapons from Warsaw Pact’s 1/6000 mil scale to NATO’s 1/6400 system. So, UDC, in late 2008, completed the development of its Universal Ballistic Computer” (UBC) that would compute the conversion values and generate data matched to a specific type of the weapon used – be it of the Warsaw Pact or NATO standard. And a short time afterwards, the Ukrainian company equipped the Afghan National Army with a gun battery fire control system – the Universal Battery Level Fire Direction System (UBLFDS). This system enables real time dissemination of data across a network to speed up the fires process and improve efficiency. The system automates the preparation and fine targeting of the various artillery pieces. This is just one example of international MTC for the benefit of third-country markets, but this experience could be highly valuable in terms of technical modernization of the Ukrainian Armed Forces.
So there are all the conditions — political, technological, economic, intellectual – required for the growth and expansion of MTC between Ukraine and Western defense companies. Other success factors may be laying in the domain of political will, both of the Ukrainian government and the EU and NATO governments. In the judgment of Radoslaw Sikorski, the Speaker of the Polish Sejm, the West should share with Ukraine its know-how and provide expert advice rather than give money recklessly. A “Marshall Plan”, which was much talked about after the start of Russia’s military expansion in 2014, is the most appropriate to include a military-technical cooperation component. MTC is in all respects a complex process of interaction between Ukraine and the Western world in critical, sensitive sectors. But what makes it extremely valuable is a mutually beneficial outcome achieved through the real, not declarative partnership.
Director of The Center for Army, Conversion and Disarmament Studies