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Vladimir Putin: This is the first time we have met this year to discuss problems related to military-technical cooperation [MTC]. Our agenda includes assessing the results of the year 2000 and drawing up objectives for 2001.

Military-technical cooperation is unique because it spans a number of crucial fields of activity. It includes foreign cooperation, military-political work (inside and outside the country), and trade and economic activities. Judging by the profits military-technical cooperation brings to the country’s budget, it is a crucial area.

Early last year, the state of and prospects for MTC raised concern, and not without reason. Competition on the world markets and among domestic state and other MTC intermediaries became tougher to the extent that it undermined Russia’s reputation as a stable and reliable partner, and deprived the Russian budget of funds. There was no strict government control, a fact which required improvements to the MTC system and the taking of appropriate decisions.

In the new system of military-technical cooperation, Rosoboronexport is the only state intermediary in the arms export/import trade. Our foreign partners welcome the appearance of a single state intermediary. The new system also includes seven defence companies – MTC members which directly export their products. Thus today an economically viable and efficient organisation for exporting weapons has been set up.

It is crucial that we managed to delegate responsibilities for decisions which earlier only ministerial collegiums could take. A committee for military-technical cooperation with foreign countries was set up for monitoring and coordinating activities of the state intermediary and other participants in MTC.

I am pleased to say that we managed to avoid interruptions in work and a decrease in quality, which usually accompany any transition period.

We achieved good results in 2000, fulfilling contracts worth $3.68 billion and earning the country $2.84 billion. Rosoboronexport accounts for the bulk of the work, and the companies that received the right to enter foreign markets also showed good results, accounting for over 16% of the total sum, or some $500 million.

Work on creating an efficient and integrated MTC system is finishing. However, we have to address a number of organisational and regulatory issues. I believe it will make the work in this sphere more efficient.

But there is much room for improvement here, because, despite the figures I mentioned, we are lagging far behind the leading industrialised countries. For example, our exports are only a fraction of the United States’ and almost half the size of Britain’s. It is important that Foreign Ministry officials take this into account in their work with our foreign partners, who are telling us that we sell too many weapons. It appears that we are lagging far behind our partners in this sphere.

The Government was tasked with further improving foreign economic activities in this sphere, which include elaborating detailed measures on types of military equipment exports and importing countries. Persistent and consistent efforts should be made to improve the use of political resources in MTC and provide political support for major contracts and export programmes.

This and other sectors should be immune from any personal interests, be they military, diplomatic or financial, rather, the interests of the state should be observed. In MTC, the coordinated actions of ministries and agencies, as well as special services and defence companies, should benefit the state.

It is important that we have chosen the right direction in MTC with our traditional partners, which lays a good groundwork for further improvement and development of military-technical contacts.