NATO must find ways to accelerate the decline of Russia’s military industry

The NATO summit in Washington is an opportunity for Western leaders to push for innovative deterrence mechanisms against Russia’s war machine.

Expert comment Updated 9 July 2024 Published 5 July 2024 3 minute READ

In mid-July, NATO leaders will gather in Washington for the annual summit of the alliance, the 10th such summit since the first invasion of Ukraine in 2014.

The Washington summit also marks a decade of renewed deterrence policy against the Kremlin and international targeted sanctions against Russia. Moscow has been waging its unrelenting war against Ukraine and the wider Western world for over a decade too, with two invasions, as well as upscaling low-intensity warfare activities against Western interests and NATO.

The Washington summit should be an opportunity to push for further deterrence mechanisms against Russia through more targeted sanctions against its military industry.

In this context, future NATO policy regarding Russia seems clear: the Kremlin represents a strategic threat to the safety and security of the alliance and its allies. The Washington summit should be an opportunity to push for further deterrence mechanisms against Russia through more targeted sanctions against its military industry.

Chronic Russian ailments

A decade of targeted international sanctions against the Russian military industry has highlighted its critical dependencies on Western components, especially computer chips, semiconductors and electronics. The more advanced a weapons system is, the more it depends on imports. 

Mitigation strategies put in place by Russia since 2014 – such as various import substitution programmes – have failed to meet expectations, forcing Moscow to import lower-end substitutes and retrofit Soviet-era legacy platforms.

A decade of targeted international sanctions against the Russian military industry has highlighted its critical dependencies on Western components.

Sanctions have also reinforced sectoral weaknesses in Russia’s defence industry, with a growing list of critical gaps including micro-electronic components and micro-chips, machine-building tools, special steels and metallurgic products, space-grade materials, engines and turbines, and bearings for military vehicles.

Pre-existing ailments plaguing Russia’s military industry have worsened as a result of international sanctions and a decade of war against Ukraine. Such ailments include (but are not limited to) crippling financial and profitability issues; systemic workforce problems such as low productivity and brain drain; the impact of COVID-19; the life cycle of imported machine-building tools and industrial machines; and structural factors such as corruption and rigid bureaucracy.

As a result of these compound factors, the Russian military industry is in a phase of decline, deterioration, and simplification of production. A new Chatham House research paper shows how this affects the ability of the armed forces to quickly regenerate and meet the growing demands of the full-scale invasion of Ukraine.

Resilience and adaptation

Yet despite the sanctions and chronic ailments, Russia’s military industry remains a formidable force, able to adapt under pressure. Russia still accesses large amounts of Western military-grade components and foreign off-the-shelf systems that help sustain its war machine. 

This is mainly accomplished by circumventing the sanctions regime and exploiting existing gaps in sanctions enforcement and export control to third-party countries. 

Notorious trade networks have been created or strengthened with China, Iran, North Korea, Türkiye, Kazakhstan and Belarus.

Russia also manages to produce systems that are ‘good enough’ to pose a threat to Ukraine, as well as to NATO – especially long-range standoff systems and asymmetric capabilities that have not yet been used in Ukraine.

But these solutions will not solve the issues its military industry is facing. Ultimately, third-party imports will have to be replaced with domestic production and genuine military innovation policies – especially military AI, autonomy, and the robotization of the armed forces.

In the coming decade, the gradual deterioration of the military industry will eventually affect Russia’s ability to confront NATO symmetrically in both conventional and strategic competition. NATO countries must find innovative solutions to accelerate its decline.

Deterrence by defeat

Western policy should employ a new strategy of ‘deterrence by defeat’ to accelerate the decline of Russia’s military industry. The NATO summit in Washington provides an opportunity to discuss how this can be achieved.

There is a need for a comprehensive and systematic methodology to put pressure on sectors enabling the Russian military industry.

For instance, primary and secondary sanctions could be strengthened in parallel sectors to the military industry, such as consumer electronics, heavy industry and metallurgy, heavy chemistry and agrochemicals, and the nuclear industry. As outlined by a recent RUSI report, there is a need for a comprehensive and systematic methodology to put pressure on sectors enabling the Russian military industry.

A shortage of military-related components will ultimately create a shortage of weapons systems. Stronger dual-use and military goods export control policies are also needed to close existing gaps that the Kremlin is currently exploiting, especially when it comes to secondary sanctions.

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Furthermore, there are specific military industrial segments where being ‘good enough’ is, in fact, not good enough – notably advanced military technology such as the space industry, electronic warfare, hypersonic systems, and the nuclear industry. Western policies must force Russia to ‘go cheap’ in sectors where excellence cannot be compromised.

Western policies must force Russia to ‘go cheap’ in sectors where excellence cannot be compromised.

The policy goal should be to ‘out-tech’ Russia as well as to ‘out-smart’ it, for instance by incentivizing a scientific exodus. Only then will NATO be able to blunt the Kremlin’s ability to compete symmetrically. 

The consequence will be that the decline of the Russian military industry will force Moscow to put more emphasis on ‘low-tech warfare’ and sub-threshold operations – something NATO policymakers will have to address and deter.

Russia is now a war economy. International sanctions and deterrence against Moscow’s aggression must equally be on a war footing for NATO and its allies to prevail – and for Ukraine to have a sovereign future.