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Russia: Americans Compete For Philippine Arms Contract


By Simon Sardzhyan



Moscow, 12 March 1997 (RFE/RL) -- Russian and U.S. aviation companies are competing head-on for a lucrative contract to rearm the Philippines air force with new fighter planes.

Authorities in Manila are scheduled to announce two finalists in the international tender process next month. The Moscow-based MAPO, which makes the MIG-29, and McDonnel Douglas of the United States, are expected to be named the finalists, knocking out of the competition rival bids from other American, French and South African companies.

"There will be only us and the F-18 left," MAPO spokesman Vitaly Zotov told an RFE/RL correspondent in Moscow last week. "and we feel the MIG stands very good chances against the American aircraft".

The MIG-29 already has a crucial toe-hold in the southeast Asian market through the successful sale in 1995 of 18 of the advanced jets to the Malaysian air force. The Malaysians have also bought eight F-18s, the first of which is to be delivered next week. Thus, through this rather unusual two-track purchase, the Malaysians will be in a position to compare in the most direct way possible the qualities of the American and Russian jets.

Both Malaysia and the Philippines are members of the Association of South East Asian Nations (ASEAN) and because of these friendly ties, the military chiefs in Kuala Lumpur will be in a position to informally pass on to their Manila counterparts much information on how the two fighters compare under regular service conditions.

Zotov says MAPO is ready to accept what he calls a "flexible system of payments" on any contract, including commodities and other kinds of barter deals. In the Malaysia contract the company accepted vegetable oil as part payment for the jets, and Zotov sees this flexibility on financing as a key additional element in attracting the Philippines. The Russian-built planes are said in any case to be a good deal cheaper -- at reportedly $34 million each -- than the American fighters. No one is revealing prices directly however.

Top Philippines military officials inspected MAPO's most advanced product and other Russian-made military hardware when they visited Moscow last year.

In St Louis, Missouri, the McDonnel Douglas company told RFE/RL yesterday that all the various fighter aircraft competing for the Philippines contract are very capable, and that it's up to the customer to decide between them. A spokeswoman, Barbara Anderson, said however that the F-18 is highly valued around the world for its versatility, durability and cost effectiveness.

She said McDonnel Douglas has been working closely with the Philippines authorities to determine what local participation, particularly industrial work, there would be in any contract involving F-18s. Experts say the Americans will be using the offer of maximum participation by local high-tech industries as a counterweight to the Russian lure of low prices and payment flexibility.

McDonnel Douglas is also competing strongly for major contracts with Poland, Hungary and the Czech Republic. The spokeswoman said the company is receiving positive feedback from each of those countries on its offer of F-18s. MAPO is also active on the central and East European markets, and expresses confidence over its chances.

As for the Philippines, it can well do with complete modernization of its air defense capability. Most of the country's present fighters were acquired from the United States in the 1960s, and even the newer planes are now aging. At present, flights by 10 F-15s were stopped after one of the jets crashed, killing two.

The Philippines plans to spend some $2 billion in the next five years on military hardware, including naval patrol boats. Over the next 15 years it foresees expenditure of some $12 billion on its military modernization program.

On the world's arms scene, the MIG-29 and the F-18 could be called permanent rivals in the top league of air-superiority warplanes. From 1992 to 1995 a total of 114 MIG-29s were sold to Iran, Hungary, Slovakia, India and Malaysia for some $2.8 billion, while McDonnel Douglas sold 106 F-18s worth a total of $5.2 billion to Finland, Switzerland and Malaysia. Topping them both in the sales stakes however was another American product, Lockheed Martin's smaller and less elaborate F-16 model. A total of 248 F-16s costing some $9.4 billion were sold to Taiwan, Greece, Turkey, Singapore and Finland in the same four years.
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