With U.S.-Russia relations continuing to deteriorate in the wake of the Ukraine crisis, NATO-Russian relations continue to nosedive as well. As NATO moves to reassure its GUAM (Georgia, Ukraine, Azerbaijan, and Moldova) partners, recent joint military maneuvers between these states and the U.S. highlight investment opportunities with respect to the defense sector.
European Reassurance Initiative
The current U.S.-Russia standoff continues its downward spiral, with attendant political and economic ramifications. As a result, the U.S. has moved to increase military funding under the European Reassurance Initiative, which looks to reassure nervous east European states concerned with Russian motives. Even though Ukraine is the source of current U.S.-Russian geopolitical rivalry, the U.S. has not, as of yet, shifted its stance on only providing non-lethal military assistance to Ukraine.
However, U.S. military training exercises with other GUAM partners have been much more robust, even though these states are not NATO members. In particular, the recent military exercises Noble Partner 16 and Dragon Pioneer 16, in Georgia and Moldova respectively, have displayed the importance of heavy armor vehicles to the U.S. in bolstering partners.
Noble Partner 16
With the 2008 Russo-Georgian War being waged over the status of South Ossetia and Abkhazia, Georgian suspicions with respect to Russian motives post-Ukraine have increased markedly. Subsequently, the U.S recently concluded its Noble Partner 16 exercise in Georgia, highlighting the interoperability between the two militaries. Of particular note was the importance placed on heavy armor formations.
Working alongside Georgia’s older Soviet T-72 tank in the exercise was the U.S. M1A2 Abrams tank, as well as the M2 Bradley fighting vehicle. The M1A2 is a newly-modified version of the original M1 Abrams and Noble Partner 16 was the first time it had ever been deployed to Georgia. This highlights the commitment the U.S. has to stiffening Georgia’s resolve towards potential Russian countermoves and bodes well for both General Dynamics and BAE Systems, the manufacturers of the M1A2 and M2, respectively.
Dragon Pioneer 16
Similar to Georgia, Moldova has its own extensive history with Russia. Also, similar to the status of South Ossetia and Abkhazia within the territory of Georgia, Moldova has its own “frozen conflict” with Russia regarding the status of Transnistria. Because of this tension, Moldova has been open to military exercises with the U.S., culminating in the recent Dragon Pioneer 16 maneuvers.
The Humvee military vehicle was featured predominantly in this exercise, as well as its functionality alongside existing Moldovan forces. A key area of consideration for the Humvee, along with the more heavily-armored vehicles outlined above, is the ability of it to operate alongside the militaries of key partners in a variety of situations. This interoperability and potential systems integration will doubtless be a factor in considering the respective host nations’ suitability for possible future NATO admission. Accordingly, the Humvee’s manufacturer, AM General would appear to be the best initial foray for potential investors.
Black Sea containment
Even though Moldova itself is a landlocked country with no access to the Black Sea, both Noble Partner 16 and Dragon Pioneer 16 are set to complement existing U.S. military operations within the Black Sea. These exercises, along with naval maneuvers with proper NATO members Romania and Bulgaria are set to increase pressure upon Russia and, along with NATO member Turkey, meant to send a strong message to Moscow about the dangers of possible post-Ukraine miscalculations.
For the moment, continued EU and U.S. sanctions against Russia appear to be an alternative to a more direct military response in Ukraine. While this is the case, the U.S. looks set to continue non-lethal support to Ukraine itself, while assuming a more muscular posture in terms of cooperation with Ukraine’s (and Russia’s) regional neighbors. As long as U.S.-Russia relations are set to continue on their current negative trajectory, potential defense sector investment in the areas outlined above appear to be positive.
