Mediaboss Marketing

Ukrainian factories for decades have been a key supplier to the Kremlin's war machine, providing jet engines, uranium fuel and electronics for Russia's nuclear arsenal.

That interdependence, created when both were partners in the Soviet Union's Cold War-era arms race, now confronts an independent Ukraine with a strategic conundrum: How to keep legions of local defense industry workers employed when their output can end up in the hands of separatists waging war often with weapons supplied by Russia against the government in Kiev.

More than 70% of Ukraine's military exports have gone to Russia in each of the last few years, according to one recent analysis, and it is almost certain that Ukraine is now on the receiving end of some of the deadly materiel.

Tanks and armored vehicles have rolled out by the hundreds each year from the Malyshev factory in suburban Kharkiv, Ukraine's second-largest city. Gun sights and optics from the Dzerzhinsky machine-building plant have given Russian soldiers a better eye on potential enemies.

The Kremlin's postwar military-industrial complex has been so inextricably bundled over the years with components from factories in Ukraine's rust belt region here that defense forces from the two nations have remained entwined throughout the 23 years since the breakup of the Soviet Union.

All of that has suddenly changed in recent months, as Russian troops have rolled into eastern Ukraine, annexing the Crimean peninsula and supporting Russian-speaking separatists in their bid for control over the rest of the region, a conflict that so far has left more than 4,300 people dead.

Suddenly, towns in the Kharkiv region, known around the world for its factories producing armored vehicles and tanks, are face to face with the irony of being threatened with armaments of their own making thundering across the Russian border. Half the region's industrial output was sold to Russia before the outbreak of fighting in April.

"We are at war, and we can't provide the Russian army with technology that can be used against us," said Igor Rainin, Kharkiv's first deputy governor.

In March, shortly after Russian President Vladimir Putin annexed Crimea, the Ukrainian government-run agency that controls arms production, UkrOboronProm, announced a freeze on military exports to Moscow.

Already, it has halted deliveries from the Malyshev tank factory and the Dzerzhinsky machine-building plant in Kharkiv, local officials said. Rainin said local trade with Russia was down by about 40% this year. Ukrainian officials estimate that the cutoff of defense contracts with Moscow could mean the loss of at least $1.5 billion a year, slashing government revenue at a time when the nation's economy is already on its knees.

View original post here:
Ukraine's freeze on military exports to Russia carries risks