Russia to boost arms sales to $ 7.5 bln in 2007

Moscow, Feb 20: Russia will boost arms sales to a record of 7.5 billion dollars in 2007 as the Kremlin breaks into new markets for its military equipment, First Deputy Prime Minister Sergei Ivanov said today.

''If we sold 6.4 billion dollars in 2006, the target for this year is already 7.5 billion dollars for arms export sales,'' Ivanov told President Vladimir Putin at a meeting of senior ministers on how to raise Russian economic growth.

''It is not just about the reaching of a new record -- I would like to underline the quality of those exports,'' Ivanov said in comments shown on the Vesti 24 television station.

Russia's drive to boost arms exports have raised tensions with the United States as the two former Cold War foes are often now in direct competition for major arms contracts.

Kremlin officials see Russia's arms industry as one of the few sectors that can compete with Western firms on equal terms after the chaos which accompanied the fall of the Soviet Union.

Military sales also bring in billions of dollars of revenue for the arms sector, which is dominated by former security officials who form a key part of Putin's power base.

Russia's state arms exporter, Rosoboronexport, is headed by an old colleague from Putin's KGB past, Sergei Chemezov. The firm has soared in influence under Putin, taking over major metals and car companies.

Russia, China, India:

China and India are the biggest buyers of Russian arms as the Kremlin seeks to forge ties with the swiftly growing powers of Asia.

But Ivanov said the share of sales to India and China had declined as Russia found new markets for arms.

''It is no secret that our main partners in military and technical cooperation are India and China -- their share of the total arms sales has continued to decline. What does that say? It means there is diversification,'' he said.

Russia has sought to boost arms sales all over Asia, Latin America and the West Asia.

Details of a multi-billion arms deal with Venezuela surfaced after a visit by President Hugo Chavez to Moscow in July. The United States criticised the contracts.

Ivanov said last month Russia had delivered anti-aircraft missile systems. Russia has supplied military equipment to Syria, Myanmar and Sudan in the past.

''The part of the exports based on parts and services, not just end equipment, has risen by 10 times over the past four years,'' said Ivanov, who served as defence minister from 2001 until last Thursday, when he was promoted by Putin.

Ivanov, 54, will now oversee military sales, industrial policies, transport and telecommunications, a significant widening of his responsibilities.

His promotion revived speculation that Ivanov is one of the leading candidates to takeover from Putin, who says he will step down in 2008.

Reuters