Many people in
various countries are concerned with a question,
what is a real status and prospects of the
Russian space program? Is it going to collapse
soon or will it survive? If it survives, which
way the new Russian space policy may go and how
that would influence a global scene of space
practical aspect of such questions is whether it
is worth relying on cooperation with Russia in
on-going or future projects (if its space
infrastructure is about to collapse)? On the
other hand, is it wise to support it in any form
(if there is a chance for return to
in answering these and other similar questions
are complicated by problems in obtaining sound
information about what exactly is going on in
Russia and, perhaps the most difficult, in
correctly interpreting the available data, which
are typically scattered and subjective.
represents an effort to watch the Russian space
program from a close distance, while remaining
independent from its establishment and thus able
to critically analyze official statements and
reasonings behind them.
considers status of the space activity in Russia,
of the national space programs;
status of national space systems;
in the space industry.
implications of the above to global space
cooperation and competition, the paper discusses:
role of international activities for
survival of the Russian national programs
political environment for international
space projects, particularly prospects
for drastic changes of a state space
policy after upcoming elections.
2 Status of
space activity in Russia
situation in the Russian space program is
determined by two fundamental factors: the end of
the Cold War and on-going economic
transformations. The former factor results in
several features, which are common to all
participants of the Cold War. However, the latter
causes substantial specifics of the current
In the former
Soviet Union missile and space programs enjoyed
very high priority and were appropriately
supplied with money and materiel resources. A
demilitarization of the economy with the end of
the Cold War lowered priority of missile and
space programs, while economic crisis, associated
with break-up of the state planning system,
decreased a total amount of resources, available
to the government.
summarizing officially released data on the
Soviet/Russian space budget between 1989 and
1995, clearly shows drastic decline of funding
immediately before and after the break-up of the
Soviet Union in 1991. According to Russian Space
Agency (RSA), funding for space program in real
terms fell more than 5-fold, from equivalent of
3.9 to 0.69 billions dollars and relatively to
GNP it declined from 0.73 to 0.29 per cent.
- Figure 1. Space budget of
interpretation of these figures is complicated by
two factors. First, prior to 1991 an exchange
rate of ruble/dollar was not fully representative
because of the closed nature of the Soviet
economy. Second, figures before 1991 relate to
the whole USSR, while figures after 1992 relate
to the Russian Federation, which has
significantly smaller overall budget, but, on the
other hand, possesses less number of space
industrial and research organizations.*
the available data leave no doubt, that the
financial situation of the Russian space program
is extremely tough.** The U.S. NASA with its
expected budget cuts of some 12% in 5 years looks
like an etalon of steadiness and wealth from a
- * As will be discussed
below, official statements, including
budget calculations, should be taken
with a grain of salt. The outcome of
those heavily depend on when, by whom
and with which purpose they are done.
- ** RSA and Space Forces
claimed, that they need nearly triple
as much money as they have been
allocated in FY'95 budget (5860
millions rubles vs 2551 millions).
of space operations
One of the most
obvious consequences of budget cuts is a decline
of procurement, which is observed in decreased
launch rate. Figure 2 shows, that in 1993-1994
Russian launch rate fell to one half of the level
launches in 1983-1995.
launch rate, however, is not an unambiguous
indicator, since it may diminish because of
increased operational longevity of spacecraft, as
it was the case with the U.S. space systems in
60s. More representative is the status of
operational space systems.
Table 1 lists
all Russian space systems currently in use and
shows their replenishment during 1994 and 1995.
demonstrates, that practically all space systems,
inherited by Russia from the Soviet Union, are
still maintained and the launch rate declined
primarily because of less frequent replacements
in operational constellations.
replacements cause aging of constellations, with
a growing number of spacecraft operating beyond
their warranty period. If earlier spacecraft
tended to be replaced as soon as warranty
expired, these days customers are forced to use
them as long as they actually perform.
in procurement is easier to observe, budget cuts
have yet more profound impact on advanced
research and developments. Table shows, that the
R&D segment of the Russian space program
suffers even more than routine operations. If
such a trend will persist for few years, it will
result in a loss of innovative capability and
will block development of new, advanced systems
in a future.
Comparison of national space program
performances in 1989 and 1995.
|space budget as
a share of GNP
|share of R and
R&D in overall financing
spacecraft, ope-rating beyond warranty
of new systems development
of spacecraft in stockpile
of launchers in stockpile
Hearings at the Committee on Geopolitics
of the State Duma of Russian Federation,
23 Feb 1995.
Note, that the
year of 1994 featured as many as 5 maiden
launches of new spacecraft (see Table 1). Those
spacecraft, however, were under development for a
long time and were delayed for several years by
budget shortfall. For space systems, which
originally expected to be completed by now,
timing of completion shifts to the year 2000 and
decline of the state financing, associated with
the end of the Cold War and with transformation
from planned to market economy, put Russian space
industry in an unprecedentedly difficult
situation. The volume of production in rocket and
space industry in 1994 fell to 30% of the 1989
The problem is
not only an abrupt decline in state orders, but
also late and/or incomplete payments of even
these short money by the Government.
peculiarities of the Russian transitional economy
the Government is unable to raise a full amount
of planned revenues. As a result, it can not pay
enterprises in time/in full for their work under
state orders. Naturally, the heavier an
industrial sector depends on state orders, the
more it suffers from Government's inability to
pay for its obligations, with the space industry
standing high in this list.
The impact of
not-payments to companies is the more severe, the
deeper they are down in a production cooperation
contractor, say, Progress Plant has to cope with
short or delayed payments from RSA or Space
Forces for its Soyuz launchers. When it
eventually gets some money, it is not in a hurry
to pay its subcontractor, say, Voronezh
Mechanical Plant for the 3d stage engines.
Similarly, VMZ does not pay NII of Physical
Measurements, for supplied engine sensors, i.e.
sub-subcontractors appear in a yet worse
enterprises, subordinated to RSA, had a
cumulative debt of about 500 billions
rubles (as of this February), while the
Governments owed them 470 billions . Figures
for individual enterprises varied from 5 billion
rubles to the highest of 170 billions at
Lavochkin NPO .
Level of salaries
is extremely low. The most unpleasant feature is
that these salaries, which traditionally were
higher than in non-defense industries are now
some 25% lower, than the average in Russia (see
Average monthly salaries
salary in space industry in1994 was 192 thousands
rubles , what was equivalent to about 80
dollars. In February of 1995 average salary was
296 thousand rubles, but its dollar equivalent
decreased to 70. Even these salaries are often
delayed for several months because of
not-payments from customers
Note, that an
acting Russian legislation subjects an enterprise
to a progressive additional taxation, if it pays
its workers, employed on state orders, more than
6 "minimal salaries". Since the
official "minimal salary" is currently
equivalent to about $14 (a cost of monthly ticket
in Moscow subway), this limitation prompts
enterprises to find other ways to pay people and
escape from formal accounting.
the above is a profound loss of personnel
in space industry (as well as in all
state-dependent defense-related industries). By
the end of 1994 employment in space sector
decreased to 64-66% of the 1989 level (to about
600 thousand people).
There is also a
significant hidden unemployment, with lots of
people using their formal job affiliation just as
an anchor and spending most of their time
pursuing more profitable businesses.
sector suffers more severe reductions, i.e.
design, testing and research divisions lose more
personnel, than manufacturing units. Figure 4
displays, that the cumulative loss of
"qualified employee" has reached 50%.
- Figure4. Decrease
ofemployment in the Russian space
people are also more active in quitting job in
space sector and more reluctant to join it.
Hence, there is a problem of aging of personnel*
and growing threat to succession of technological
culture and know-how.
that everything said above about differences in
situations of individual companies, depending on
their place in production chain and their
individual role, remains true with respect to
personnel losses. Prime contractors experience
lower losses, typically about 25%. Energia Corp.
reported a loss of about 7500 of its peak
employment of some 35000 people, i.e. about 20%.
Khrunichev State Space Center did not claim any
significant losses and even known to re-hire
experienced personnel from other companies to
augment perspective developments.
- There is
also a difference depending on location
of companies. For companies, located in
large cities (Moscow, Saint-Petersburg),
observable loss is higher. For those,
located in dedicated "closed
towns" (like NPO PM in
Krasnoyarsk-26), hidden unemployment is
more significant. In these confined
enclaves employees of defense-related
companies simply do not have other place
to go for a job.
- * For example, at Design
Bureau of General Machine-building
(KBOM), average age of personnel
reached 49 years.
for international space cooperation and
financing of space sector by the Government
prompts the Russian industry to search for a
non-governmental support. Such a support could be
looked for either within the country or outside.
Both trends are observed.
companies attempts to stick to those sectors of
Russian economy, which are cash-rich (the latters
being, by large, oil and gas industry). Such
proposals primarily include equipment for oil and
gas industries, but at the top of this trend one
can see the Yamal project (led by Energia Corp.)
to deploy communications satellites to serve
gas-producing facilities, and a proposal of a new
Riksha launcher to use methane as a fuel
(Energomash NPO, Makeyev KB et al.).
non-traditional internal markets are not big
enough to employing all capabilities of the space
sector, which became idle with decline of state
orders. On the other hand, the domestic private
sector is not mature enough to invest into
long-term high-tech projects. Therefore
cooperation between the Russian space industry
and private sector proceeds mostly in such forms,
as leasing out a floor space of the former to the
situation foreign contracts appear as an
important mean for staying afloat.
sell some products or services at the global
space market to substitute for a short
governmental payments are straightforward in
non-commercial projects may also prove vital for
at least some segments of the Russian space
complex. In particular, participation in a high
profile international project (like Mars'96 or
the International Space Station), gives to
appropriate Russian institutes and companies an
additional foothold and leverage to press the
Government for support, quoting an importance of
the project for making Russia's image at the
However, from a
viewpoint of foreign partners there are concerns,
associated with the current Russian situation.
The essence of these concerns is two-fold:
- how viable
is the Russian space program and
- what is
going to happen to it and to Russian
state policy in general after upcoming
of Russian official statements
confusing to outside observers is a dualism of
statements by Russian officials about the status
and prospects of the national space program.
numerous statements by various Russian officials,
saying that at the current level of state support
the national space infrastructure will survive
for no more than 2-3 years and unless urgent
corrective actions are immediately taken, its
degradation will become irreversible .
On the other
hand, at other occasions same officials say, that
"the situation is hard, but we are doing our
best and are sure, we will survive these
difficult times" .
To get a key to
this uncomfortable ambiguity of statements, one
has to take into consideration, where and for
whom the statements are made.
predictions are addressed to the Government or
the Parliament with an intent to get more money
or to resolve other urgent issues. The
"all-right" posture is intended for
foreign partners, to whom Russian officials want
to look good in order to preserve their
willingness to cooperate with Russia.
The desire to
look poor and ill for an own government is not
something unique. However, in modern Russia this
approach is particularly stimulated by a
circumstance, that the Government operate
"in a regime of a fire crew" and needs
a disaster call to make a decisive action.
applying this approach, Russian officials may
underestimate effectiveness of modern information
highways. It is quite possible, that their dire
predictions reach ears of Westerners faster and
easier, than hearts of domestic financial
which of the two contrary statements is right?
Viability of the Russian space
First of all,
speaking about the viability of the Russian space
potential it would be incorrect to speak in
As said above,
the situation in the space complex of Russia is
uneven. It varies both "horizontally"
-- between various companies of a similar
business, between various regions, and
"vertically" -- between different
levels of production cooperation.
the Buran program for all practical purposes is
dead. The Mir program keeps afloat thanks to an
established backlog of international missions.
The Proton launch venture is not simply alive,
but is so well as to afford modernizations and
part of these "horizontal" variations
can be attributed to a "fight for life"
with "survival of the fittest". This is
something, which must have occurred with
transformation of general principles of state
policy and reconsideration of priorities in
"vertical" aspect is more worrisome.
Break-up of lower tiers of production cooperation
could ruin a project, despite its lead contractor
might appear doing fine until the very last
was already appreciated by RSA in 1994, when it
can not get Soyuz launchers from Progress Plant,
first because there was no money to pay Progress
itself and then because Frunze Production Assn.
was not paid for engines for those launchers.
One way RSA
deals with this problem is a targeted
"program oriented" financing, coming
directly from RSA to contractors at different
levels (as opposed to funneling money through the
full chain of subcontractors). These measures by
the state authorities are amended by actions of
companies themselves. Lead contractors gradually
restructure their cooperation, with more
components manufactured internally and some
poorly doing subcontractors being replaced by
newly emerging ventures or by foreign suppliers.
of viability considerations stems from the
abovementioned disparity between R&D and
serial production. Prevailing cuts of R&D
financing (as well as of associated personnel)
means, that ability for future indigenous
advanced development is being lost, while
capability to "clone" articles, based
on once developed technology and hardware,
Note, that it
is this available technological backlog, which is
essential for on-going international cooperative
projects and for initial penetration to
projects the prevailing decay of innovative
capabilities is a threat. However, the purpose of
the current phase of international activity for
Russian participants is to ensure their own
survival. The success of this phase would enable
them to save or recover their capabilities for
advanced developments (which will be necessary
for them to stay in international business
is seen in actions of Russian companies, which
were successful in getting a foothold in foreign
space markets. Khrunichev Space Center, having
signed first contracts for commercial launches,
invests money into upgrades of their Proton
launcher, what would allow to better serve
foreign customers. That development also fits
needs of the national space program -- and gives
new job to designers of Salyut Design Bureau, the
R&D arm of the Center.
sales of rocket engine technology by Energomash
NPO to the U.S. will not only help to boost
performances of next generation of American
launch vehicles, but should also enable
Energomash to upgrade engines for the Russian
launcher fleet (e.g. new RD-120M, initially
offered for the U.S. EELV, are later expected to
power Soyuz-2/Rus, Russian evolutionary launcher,
instead of the veteran RD-107/RD-108 family).
So, for the
near-term projects the key problem is ensuring of
uninterrupted chain of production cooperation.
(This problem is equally important for on-going
international programs and for Russian national
project should be mounted on a base, which is
currently sound and may realistically count on
sustained development on the basis of its current
aspects of viability of the Russian space
companies are predetermined by the economic
policy of the state. Most of the economic
problems, outlined above (debts, not payments,
etc.), are not inevitable price of economic
transformations, but rather a result of
indecisiveness of the Government and of slow
advancement of real reforms.
Yet before the
break-up of the Soviet Union the state
authorities lost administrative control of
"state-owned" companies, yet the state
remained responsible for results of their
of the Russian government indicate its
willingness to move in the right direction and
make its economic and fiscal policy more
consistent (decrease a burden of irresponsible
enterprises, hanging on state subsidies, enforce
dues and taxes collection).
for drastic policy change
An impact of
strengthened economic policy to space sector
remains to be seen. Yet, with upcoming elections
to the Russian parliament this 17 December and
elections of the President, due in June 1996,
questions arise about what is going to happen to
this Government and whether the general political
environment for Russian space activity will
change after elections.
attitudes and statements of major opposition
forces and political blocks shows, that drastic
changes are not highly probable. All major
Parties, which may score relatively high at
upcoming elections, either already consider space
program as an attribute of a great power
(Communists, Liberal-Democrats, some nationalist
groups) or regard it as a major social factor
because of a large number of people involved in
In fact, if the
leadership of the ex-USSR was criticized by the
opposition (including current Russian President)
for wasting money to space program, today's
opposition criticize the Russian government for
undermining the national space capabilities.
Thus, neither new Parliament nor new President
will intentionally oppress the Russian space
however, a criticism in some opposition corners
of on-going international cooperative efforts,
particularly of the Russian participation in the
International Space Station Alpha, which is
considered as a non-equal sell-out of unique
national know-how. These stances may have some
negative effect on the environment for the
cooperation, particularly between Russia and the
U.S. However, on-going projects are in fact so
important for survival of the appropriate
segments of the Russian space infrastructure,
that the same industrial lobby, which now often
appeal to opposition, will not allow this
criticism to advance any further, than just
Thus, even the
most drastic overturn of the power after
elections will hardly cause any direct harm to
Russian national space programs and will not
deter Russia from keeping its foreign
There is, of
course, a chance for a new outbreak of general
instability in Russia, but now it seems less
probable, than it ever was since 1991, and
certainly less, than it was at the time of
adopting decisions to pursue the International
Space Station program jointly with Russia.
- * Listing priorities of
Russian Space Agency (for domestic
auditorium), First Deputy General
Director Alaverdov ranked
"keeping obligations to our
foreign partners" as #2,
immediately after "projects with
a fast return or a big economic
of the Russian space program is determined by a
general shift of priorities with the end of the
Cold War and, additionally, by peculiarities of
domestic political and economic situation.
situation in Russian space complex is difficult
and characterized by a crisis of state-dependent
industry, shrinking of most operations down to a
level of marginal sustainability, loss of up to
40 to 50% of personnel and degradation of space
situation is uneven in both
"horizontal" and "vertical"
sectors and companies have widely
is typically getting worse deeper along
the chain of subcontracting;
- loss of
capability to develop new things
is more profound than loss of capability
to make already developed things
situation is ambiguous. It is indeed dangerous,
but not hopeless.
4. In the
current situation international cooperation, both
in form of joint non-commercial ventures and,
particularly, integration into global space
market, is considered vital for sustenance of the
national space capabilities.
support to the national space program appears
assured notwithstanding any feasible outcome of
upcoming elections, although in the most extreme
scenarios an international political atmosphere
for joint non-commercial projects may cool out.