Global Space Economy and Russian Corruption

  • Rosatom has the largest budget violations.
  • Glonass center construction had a theft of 25% of their budget.
  • Over 17,000 criminal complaints.

Roskosmos and Russian space programs have been experiencing certain difficulties for some time. The Roscosmos State Corporation for Space Activities is a state corporation responsible for the wide range and types of space flights and cosmonautics programs for the Russian Federation. Russia is unfortunately known for corruption and theft.

Recently, construction of the new Vostochny Cosmodrome resulted in the theft of 11 billion roubles ($171.3 million). This was confirmed by Russian press secretary Dmitriy Peskov, a Russian diplomat, translator and Turkologist. Since 2012, Peskov has been the Press Secretary for the President of Russia, Vladimir Putin.

Thus far 32 individuals have been convicted of crimes relating to the theft, but the funds have not been recovered. The Prosecutor General of Russia has brought over 140 criminal cases in the past five years, just related to the Vostochny Cosmodrome construction, and has received over 17,000 criminal complaints.

The Prosecutor General of Russia heads the system of official prosecution in the courts, known as the Office of the Prosecutor General of the Russian Federation. The Prosecutor General remains the most powerful component of the Russian judicial system.

The new GLONASS center has lost 250 million roubles ($3.9 million) from a one billion roubles budget to theft, or 25% of the budget. GLONASS is a global satellite navigation system providing real time position and velocity determination for military and civilian users.  The construction has been taking place since 2010 and is now on hold due to a shortage of funds. On November 7 it was announced that Roskosmos has been in violation of their budget for the last two years in the amount of 800 billion Russian rubles ($12.45 billion).

Still, Russian media (owned by the Russian government) continues to hype Roskosmos and its projects. Roskosmos sponsors many intellectual programs in Russia, including “Chto? Gde ?Kogda?” with their partner Rosatom corporation. Rosatom even has its own team on the show. Rosatom (the Rosatom State Nuclear Energy Corporation), is a Russian state corporation headquartered in Moscow that specializes in nuclear energy. What? Where? When? (Russian: Chto? Gde? Kogda?) is an intellectual game show well known in Russian-language media and other CIS states since the mid-1970s. Today it is produced for television by TV Igra on the Russian Channel One and also exists as a competitive game played in clubs organized by the World Association of Clubs. Over 39,000 teams worldwide play the sport version of the game, based on the TV show.

Not all the Russian government funding given to Roskosmos makes it to these types of projects due to the corruption. Much of the money is taken offshore. According to Dmitry Medvedev, Roskosmos only spent 22% of their budget on actual projects. The information became public in June. Roskosmos is predicted to have a consolidated profit for the first time at the end of this year, but this is a guarded prognosis.

This year, the US, Russia and China are the top three countries for number of space launches.

The upcoming launches this month:

  • November 15 – Kuaizhou-1A | KL-Alpha (Kuaizhou is a family of Chinese “quick-reaction” orbital launch vehicles. Flying since 2013, Kuaizhou 1 and 1A consist of three solid-fueled rocket stages, with a liquid-fueled fourth stage as part of the satellite system)
  • November 22 – Ariane 5 ECA | TIBA-1 & Inmarsat-5 F5 (Global Xpress-5) (Ariane 5 is a European heavy-lift launch vehicle that is part of the Ariane rocket family, an expendable launch system designed by the French government space agency Centre national d’études spatiales (CNES). It is used to deliver payloads into geostationary transfer orbit (GTO) or low Earth orbit (LEO).)
  • November 27 – PSLV-XL | Cartosat-3 & NEMO-AM (India)

Global US space economy is $345 billion according to the Federal Aviation Administration, a governmental body of the United States with powers to regulate all aspects of civil aviation in that nation as well as over its surrounding international waters.

According to the FAA, close to 76% of those funds come from satellite systems, including mobile communications. The other 24% are from government budgets and commercial space flights. It is also clear the US is a leader in the space industry.

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Christina Kitova

I spent most of my professional life in finance, insurance risk management litigation.

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