The ensuing scandal was picked up by the Russian press.

This is an unpleasant incident not only because Algeria has thereby expressed its dissatisfaction over the quality of Russian exports. This brings into doubt the entire military-technical cooperation between the two countries with a price tag of $7 billion. This is the sum of the contracts signed by Russian representatives during President Vladimir Putin's visit to Algeria.

This is the first demonstrative return during Russia's entire military-technical cooperation with foreign countries. What is the reason behind it?

Although military-technical cooperation is a sensitive subject, and not everything is known for sure, experts see many reasons behind this decision. One of them is the struggle between different political groups and clans in Algeria.

Arms supplies always involve middlemen who receive impressive shares for their services. Those who get nothing are naturally displeased about this. Intrigues are always part of these deals, but when those who sign the contracts possess real power, scandals never acquire global dimensions.

Competition is another reason. Paris was going to sell its own Rafale fighters to Algeria, but the Algerians opted for the MiGs instead of the French planes.

The terms of the contract for the MiG fighters were very good. First, the price of the Russian fighters was much lower and the characteristics were very much the same. Second, by buying the fighters Algeria was paying off its debt to the former Soviet Union and its successor Russia. Moreover, as part of the payment, Russia offered to take back 36 old MiGs that had been bought by Algeria from Ukraine and Belarus, and flown by the Algerian air force. Who would refuse such incentives?

It is hard to believe that the MiG-29SMTs -- one-seat and two-seat combat and training versions -- were of poor quality. Off the record, Russian arms exporters maintain that before being sent to the south Mediterranean coast, the fighters were approved by Algerian experts. They also checked them upon arrival in the country, and even started flying them.

How can they now complain of defects, used spare parts or rusted units? Why didn't they see them before? But the time for rhetorical questions has gone. Russia has signed the deal on the return of the 15 MiG-29SMT Fulcrum fighters and therefore Moscow is obliged to take them back.

Algerian experts are right when they talk about a drop in quality of Russian arms exports. This is openly admitted by top-ranking officials in charge of the Russian military-industrial sector, such as Sergei Ivanov, first deputy prime minister and head of the military and industrial commission, and his first deputy, Vladislav Putilin.

At a recent Academy of Military Sciences conference, Putilin said that "although the enterprises of the military-industrial sector have increased their turnout by more than 14 percent -- military production went up by 19.1 percent, and civilian by 7.6 percent -- some of them are simply unable to fulfill state-awarded contracts. Moreover, they cannot even use the allocated funds."

The Russian federal budget has long been generous. Thus, 800 billion rubles -- $28 billion -- were earmarked for defense purposes for 2008, 900 billion rubles -- $33 billion -- for 2009, and 1.1 trillion rubles -- $40 billion -- for 2010.

The reasons for this situation are well-known. Highly qualified personnel have come close to retirement age. Machines and technologies are becoming obsolescent -- capital equipment in the defense industry is more than 30 years old. Major technologies have been lost, usual contacts severed, and the required raw materials and equipment are in short supply. The price of energy has skyrocketed. It is leaving the inflation rate far behind and greatly exceeds the deflators fixed by the Ministry of Economic Development and Trade.

It is already clear that the 2006-2015 Russian state defense order endorsed just two years ago will not be fulfilled either in the range or number of products. This is the third order that the defense industry will not be able cope with.

Graduates of technical colleges are reluctant to work in the Russian defense industry. Salaries are rather low, and career opportunities cannot compete with those in the oil and gas industry. In order to become a leading expert, a graduate has to work in the defense sector for at least 10 years. This is a slow process.

And there is another reason. Before, young people were not drafted if they worked at a military plant called a mailbox. Now this benefit does not exist. After graduating from a technical vocational school or college, young people take any job rather than going to a place where getting a foreign passport may become a hassle.

One more problem is that technical vocational schools no longer exist. Nobody is training future workers. Good turners, assembly fitters and welders are worth their weight in gold. Without them, it is impossible to build high-quality aircraft, ships or missiles.

Putilin said that the "reasons for this situation in the defense industry are known. Talk about these problems in different formats and by all branches of power has become a ritual, but it is not always possible to coordinate the efforts by federal executive bodies, organizations, and enterprises aimed at removing these obstacles."

Apparently, the 15 MiG fighters to be returned by Algeria are a major example of these problems that are discussed at length but not resolved. This scandal may not only affect bilateral relations between Russia and Algeria. It has also dealt a heavy blow to Russia's image as arms exporter. This is fraught with big problems for the future. Mistakes on the world's arms market spell enormous losses.

(Nikita Petrov is an expert on the Russian defense industry. This article is reprinted by permission of RIA Novosti. The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.)

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

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