Problems in the Russian space industry are no secret for the international audience. At the same time, the space industry is among the key sectors, alongside with the energy and defense, of the Russian economy.
Over the past few years, there have been multiple scandals involving the management of space companies, as well as projects and programs in this field. In many cases, these scandals have been linked to corruption issues and cause by an incompetence of the management.
On April 16, Russian President Vladimir Putin held a major meeting of the Security Council devoted to discussing state policy in space sector. Following the meeting, Putin declared that Russia needs to heavily upgrade its space industry and improve the sector’s management model.
“It is obvious that it is necessary to fundamentally modernize the rocket and space industry, introduce the modern model of managing the production process, R&D work and learn to use the results of space activity in all the spheres of our life by a factor more efficiently,” he said emphasizing that these issues are extremely important.
In particular, the president urged the government, the agencies concerned and the Russian space agency Roscosmos to maximally use available competitive advantages instead of marking time. In fact, the Russian leader admitted the ongoing collapse in this field and was forced to bring this field under his personal exceptional control and employ micromanagement practices.s
What problems do impact the development of the Russian space industry and why is it so hard to cope with them?
First of all, it’s corruption practices, which infested most of enterprises that have an access to the state budget. A second problem is the lack of professionalism among the management. This situation is caused by a general attitude of the modern bureaucracy towards managed entities and the Russian nation. Another problem is the personnel gap, especially engineers and technical personnel. It’s surprising, but a qualified engineer in the space industry has a monthly wage of about 1,000 USD. At the same time, office workers in the same field have a monthly wage from 2,000 USD and more. The office management has much higher salaries. There is also a problem with the technological competitiveness – the park of machines and equipment.
These issues are a logical result of the existing inconsistencies. What’s the main idea of the Russian Federation? The USSR had an idea of a fair society of work and knowledge. The idea of the Russian Empire was a heroic service to Csar and God.
The modern US national idea is also not focused on gaining personal wealth by any means, but has a strong idealistic (missionary) component. This is common for any developed country.
So, what’s the national idea of the modern Russia? There is no such thing in official documents and it has never been declared publicly on the official level. However, the personal wealth as the key stone of life is being unofficially propagandized on the de-facto government level. Nothing else. An idealistic component is excluded from this narrative. Actions of the modern bureaucracy and management of state companies are logical, if they are described within the framework of this de-facto national idea.
Let’s return from high ideas to current issues with the Russian space industry. According to April 16 remarks by President Putin, the works on the second stage of the Vostochny Cosmodrome project cannot be started because of issues with “price” parameters. External collaborators are not ready to participate in the project on the current terms and conditions.
“For example, the price and time parameters projected in drafting space projects frequently lack due substantiation and, as a result, the planned timeframe is shifted while budget expenses increase. This has happened many times in recent years,” Putin stated commenting on this problem in the industry.
It should be noted that the budgets and parameters projected in the plans are comparable with those of similar US projects. However, Russian companies are not ready to participate in the project because they believe that a hundreds percent profit is not enough for the state mega project. In reality, a notable part of the works in Vostochny Cosmodrome is being made by migrant workers with low salaries. Even these salaries are delayed. Scandals involving this issue repeatedly surfaced online in 2018 and 2017. It has become common that a string of companies from the general contractor to a company that really carries out some work can include around 10 companies. This leads to the situation when the main part of the allocated funds is being turned into profit of a close circle of persons affiliated with the office management. These groups of people do not want and are not ready to walk back from this source of income. A de-facto price-fixing agreement is shaping the industry. It is important to understand that this behavior looks logical if their only goal is personal wealth.
The situation in the Russian space industry could be improved if the Russian leadership decides to take direct actions to get rid of this situation. An effective development in the space direction is possible when it is imprinted in the national narrative. Ritual phrases and allocated budgets are not enough. There is a need of real actions to promote and idealize the space development, science and technology.
The issue of wealth as the national idea affects not only the space industry. It influences the development of other economic sectors and social life. However, the space direction is one of the best examples uncovering the existing inconsistencies.