Kalashnikov stays tight-lipped ahead of new US sanctions | Business| Economy and finance news from a German perspective | DW | 26.12.2017
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Kalashnikov stays tight-lipped ahead of new US sanctions

New American sanctions are set to hit the Russian weapons industry. But during a press tour to the home of the famous AK-47 rifle, questions about sanctions were met with defiance – and silence.

Traditional Urdmurt plaid dresses, a log cabin in the snow, and lots of potatoes. It's not what I had expected of the Russian Foreign Ministry's press tour of the Kalashnikov factory. The tour to the industrial city of Izhevsk, the capital of the Urdmurt Republic in the Western Urals, promised a rare glimpse of the company known for its AK-47. 

But first, the handful of foreign journalists on the tour was treated to an unexpected lesson about Urdmurt culture — including a performance by former Russian Eurovision contestants Buratovskyie Babushki. They sang renditions of famous pop songs in Urdmurt, the local language of the republic.

Looking back, their version of the Beatles' "Let It Be" may as well have been a message: a message of patience for journalists with naively high expectations of the openness of Russian arms producers.

More Western sanctions loom

As it turned out, the hotly anticipated visit to the Kalashnikov factory had been replaced by a visit to the factory's museum. At the last minute, access to the factory had not been granted, we were told.

Still, the promise of answers still hung in the air when we arrived at the museum. After all, Kalashnikov is one of the 39 companies that will be affected by a new round of US sanctions. The list includes most of the big names of Russia's military industry. According to the Russian business newspaper "Vedomosti," all in all, the companies account for more than 90 percent of Russian arms exports.

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True, Kalashnikov was already hit by previous sanctions — but from January 29, 2018, firms or countries that do business with sanctioned companies could face American sanctions themselves, which may dissuade US allies around the world from looking to Russia for arms.

From what the guide at the Kalashnikov factory's museum explained, being pitted against the West is not new for the arms manufacturer, which just turned 210 this year. In 1807, there were two other arms manufacturers in Russia — but after a string of wars against France, the Russian empire decided "it was strategically important to build a weapons factory deep inside Russia," further away from the Western border. Still, the new sanctions against the company are clearly a sensitive topic for the Kalashnikov concern.

'No comment'

At the museum, company representatives demonstrated the newest guns, including the newest follow-up model to the AK-47, the AK-204. However, journalists weren't allowed to film or interview any of them apart from the press representative, who promised to provide us with background information but also refused to be officially interviewed or quoted.

Read more: Nazi gun removed from statue of AK-47 founder in Moscow

What we were told about the Kalashnikov company, is that it now produces much more than just automatic guns. The company has recently diversified its production to include motor boats, drones, and is even restarting the production of "Izh" motorcycles. The strategy is in line with Russian President Vladimir Putin's call last year for the defense industry to have 50 percent of their production be "civilian" by 2020.

But in our conversation with the Kalashnikov press service, there were clear limits to what constitutes "background" information. Questions about the privatization or expansion of the company and its most important markets weren't included in that category. And sanctions were the clearest no-go area of them all.

A 'global' region

However, it is worth remembering, that even the city of Izhevsk itself, where Kalashnikov is headquartered, was closed to foreigners during Soviet times. So perhaps expecting Kalashnikov to open up its factory doors to foreign journalists — and open its company to their questions — was too good to be true.

Still the head of Urdmurt Republic, Alexander Brechalov, assured us that he now sees the Republic of Urdmurtia as "part of a global world." And he didn't mind commenting on sanctions during a press conference.

Alexander Brechalov, head of the Republic of Urdmurtia, Russia (DW/E. Sherwin)

Alexander Brechalov, head of the Republic of Urdmurtia

Brechalov played down the importance of upcoming American sanctions on the region, instead pointing to the growing importance of the Asian market for business. The politician also emphasized that though Kalashnikov is a well-known brand around the world, the arms manufacturer doesn't have a unique role in the local economy.  "It's just as important as about 25 businesses, which are large employers here — and large taxpayers. But that's all."

When it comes to European and US sanctions, the politician's stance was just as defiant. "Any crisis is a time of possibilities," he said, pointing to the positive effects of Russia's counter-sanctions on the local and national economy. With a tiny smirk, he told us: "Entrepreneurs have already started saying that 'if there hadn't been sanctions, someone would have had to invent them,'" which sounds suspiciously like a bit of Urdmurt folklore.

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