Putin’s Business Plan

War is business, and business is booming.  It’s simply a statement of fact, not an assertion as to whether it is right or wrong.  Global military sales average $1.7 trillion (yes, trillion with a “t”) every year. With that much money up for grabs, you can bet there are a lot of savvy business people jumping in the game attempting to boost corporate profit margins. Some of these businessmen and women are more capable of influencing the global military market than others. In the business of war, Vladimir Putin is a polished executive officer – and the Syrian conflict is now unfolding before us as his business plan.

The world collectively gasped when Russia began deploying aircraft and troops to Syria in a move to prop up the Assad regime. Analysts have thrown out several possible reasons for the buildup, and the situation is proving to be a very complex one. In addition to whatever political objectives Putin may be trying to accomplish, the fact remains that having combat proven aircraft and missile defense systems is a great selling point. I believe a driving factor behind Russia’s involvement in the Middle East is the potential to boost Russian Global Military sales.

Here’s why I think this move by Putin is, in part, an elaborate marketing scheme:

1. Russia has been developing costly, hi-tech projects that its own budget is not capable of sustaining.

Russia is the #3 top global spender when it comes to military purchases, behind the U.S. and China. When these expenditures are viewed as a percentage of GDP, Russia outpaces both the U.S. and China.

2. It just so happens that the countries involved in Putin’s “coalition” are some of his biggest customers.

Syria and Iran have long been customers of Russia’s military factories. There is still a lot of money to be had in the Iraqi oil fields, and Iraq will no doubt turn once again to the military supplier that outfitted the Saddam regime when given the chance – especially if Russia is “helping” them solve their ISIS problem.

3. Other global customers are watching and will likely order, or increase orders, based on the success of the Russian Air Force in the Middle East.

Sales of Flanker series aircraft (Su-27, Su-30, Su-33, Su-35) have been strong in the orient. India has ordered 200 aircraft and China over 400. Numerous aircraft have been sent to Venezuela, Malaysia, and a host of other countries around the world. All those aircraft need armament, and Russia has some pretty decent air-to-air missiles to sell along with those jets. I swear I saw a Groupon for “Buy 3 AA-11 Archer Missiles, and get the 4th one FREE!” (I think the Groupon expired last week.)

Groupon

4. This is an opportunity to showcase a product to other potential buyers with a lot of money.

There is a huge market for military power in the Middle East. Numerous military manufacturers are heavily marketing countries like the United Arab Emirates, Saudi Arabia, and Qatar. Russia is vying for a larger share of military contracts in that region.

When it comes to marketing air power, Putin knows what he’s doing. Although Russia’s primary reasons for deploying to Syria may not be all about business, it is difficult to turn a blind eye to the influence this move will have on his foreign military sales. The U.S. has had a corner on the market of combat-proven weapon systems, and Putin has taken note. He would love nothing more than to stamp each one of his emerging weapon systems as “Combat Proven” when marketing them around the world. Keep an eye on Russian foreign military sales for the next couple of years, and I bet you will see the money flowing into Moscow.

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