Putin, Medvedev agree to abolish state defense order agency

Russian President has given an order to abolish two key agencies responsible for placing and executing weapons orders for the military and hand over their functions to the Defense Ministry, Finance Ministry and Audit Chamber.

The move was proposed on Monday at a meeting between President Putin and Prime Minister Dmitry Medvedev.

“In the eight years of these bodies’ existence, they have conducted certain activities and fulfilled certain tasks. But today, the fact that one agency falls under the competence of the government – this is Rosoboronzakaz, while the Rosoboronpostavka historically remains in the Defense Ministry’s structure –led to the suggestion of abolishing both agencies in order to concentrate the whole work of military supplies in the Defense Ministry,” the PM said.

According to Medvedev, the control functions of the two bodies can successfully be performed by the Ministry for Industry and Trade, the Federal Anti-Monopoly Service and the Audit Chamber. “This will not lead to any problems but will allow for optimizing the government’s structure,” he noted.

At the same meeting, Medvedev suggested eradicating the Federal Ministry for Regional Development saying that several of the key regions – the Far East, North Caucasus and Crimea had separate ministries in charge of their development.

The president agreed and signed the corresponding orders giving the responsible state officials three months to complete the reform. Putin also charged the deputy PM overseeing the military industrial complex, Dmitry Rogozin, and the deputy PM responsible for regional development, Dmitry Kozak, with the task of preparing plans for the staff of the abolished agencies.

It should be noted that last week the popular Russian daily Izvestia forecasted more changes in the power bodies in charge of the weapons industry. The newspaper claimed that Putin planned to take personal control over the top coordinating group - the Military Industrial Commission –and change its structure in order to balance representation from weapons-making corporations and the top military command.

Russia is currently running a major program to rearm the military. It started in 2008 and will continue till 2020. By then 70 percent of all weapons in the military forces must be replaced by new models. The state is allocating significant sums for the purpose – in 2014 the total defense budget amounted to 2.3 trillion rubles ($60 billion), compared to just 600 billion rubles ($15 billion) in 2003.

The recent crisis in Ukraine showed the need for even more reforms in the Russian defense sector. Facing the turmoil and hostility of the present Kiev regime, Russian authorities decided to cut ties with Ukrainian weapon makers and relocate all production in Russia. President Putin discussed the plan with Deputy PM Rogozin in late July and stated that the inevitable hardships and complications would eventually benefit the nation – new factories will appear in previously underdeveloped places, and old enterprises will be replaced with modern ones.