Putin to Dissolve Roscosmos and Launch New State Run Space Corporation

On December 29, 2015, the Russian government announced that it would be closing its federal space agency, Roscosmos.   On January 1, 2016, Russia will launch a yet-to-be-named state run corporation that will take over the responsibilities of the former federal agency.  Due to Russia‘s economic struggles, billions of dollars have been cut from the budget of its space program, notably to its proposed manned lunar exploration flights.  The agency was also marred by corruption scandals that brought to light the massive misuse of funds.  Current cooperation with NASA will reportedly not be affected and missions to the International Space Station (ISS) will continue as scheduled.

Reorganization of Roscosmos will be aimed at ending the corruption that plagued the former agency as well as increasing its commercial competitiveness.  As companies like SpaceX make progress in their endeavors, Russia will need to take action to maintain market share.  Manned flights are a profitable business for Moscow, as transport on one of its rockets to the ISS now costs $82 million a seat.  Besides the economic benefit, the monopoly held by Russia‘s space program in this strategic industry offers a great deal of prestige and leverage internationally.  Greater competition in this field is a negative development for Russia‘s space industry as its Soyuz rockets are based off of 1960s technology.

As the country looks to compete in the growing commercial spaceflight industry it must modernize both its governing structure and its technology or it risks being pushed out of the market.