According to Col. Gen. Anatoly Sitnov, of the MoD, despite this increase, 450 billion rubles is needed in new weapons and R&D in order to match the US capability. Despite withdrawals of obsolete equipment, only half of Russia's tanks, ships and aircraft are in combat condition.

Acting President Putin's enthusiasm for defence may be motivated by the forthcoming presidential elections. Other evidence suggests that there is a genuine commitment to re-establishing some of the lost capability of the armed forces. Efforts are being made through paying 85% of funds allocated for WA and R&D programmes in the 1999 budget, in contrast to the 20% in 1998, to settle outstanding debts for 1999 by March 2000 and to reduce the previous year's debts. This has reportedly created marked improvements in production. SMO'2000 is to move away from the primacy of nuclear weapons and focus on conventional smart weapons, reconnaissance, communications and control systems and, more specifically, upgrades of the Su-25s and Su-24s. The Tu-160 and Tu-95MS strategic bombers are to have their ability to deliver precise strikes upgraded. Flight tests of modified Su-27-series aircraft are also to continue, as will the development of helicopter night flying capability.

The sources of funding seem to be the proceeds from Russia's successful arms exports. Last year, weapons valued at $3.2 billion were sold: a 20% increase on 1998. The state has a pre-eminent role in the export business, with its state agencies, controlling 80-90% of the market, expected to exceed $4-4.3 billion in 2000.

While the market is expanding for new equipment, that for upgrades of in-service MiGs alone is estimated to be worth $10 billion. The recent victory of Nikitin's MiG over Korzhuyev's Russian Avionics through the removal of its industrial operating licences by the Ministry of Economics is anticipated to reconcile personnel, if not the two companies. Nikitin has been careful to make sure that designers at RA are welcome to return to MiG. These moves may allow the creation of one company, capable of competing with Israeli companies, led by IAI.

The competition over the fifth generation 'demonstrators' continued in February, with the MiG MFI recently making runs along the runway at Zhukovsky. However, the aircraft did not have its maiden flight on 24th February. This event was made the more embarrassing for MiG because of Sukhoi's intention to use the first flight to announce the completion of the first phase of the S-37 Berkut flight tests. This reinforces the efforts of many within and without Sukhoi to get funding for full development.

The reason why Russia, which cannot afford a substantial number of such aircraft, continues this "no winners" battle, can only be explained by the view from the bureaux. They contend that funding of development to a point where a foreign buyer could be found, either for the aircraft or the technologies they are currently proving, is a satisfactory objective in itself. Whether this is a good use of limited resources requires little debate, and continues to call into question the strategic view of Russia's leading aerospace figures.