Russian defense spending has grown inexorably

In January 2009, the Daily Telegraph reported that:

“The Kremlin is transforming its army into an entirely professional force as part of the most ambitious military modernisation since the Cold War.

Russia’s official defence budget will be £27 billion this year, compared with £20 billion in 2008, according to “The Military Balance”, an annual study compiled by the International Institute for Strategic Studies (IISS).

This increase – one of the largest in peacetime history – will leave the Kremlin’s defence budget almost double the level of 2006. Over the same period, by contrast, Britain’s defence spending has risen by only 1.5 per cent after inflation.

The Kremlin’s official figures almost certainly understate the real amount that Russia devotes to its armed forces. Taking into account the revenue from weapons exports and military components of supposedly civilian budgets, “The Military Balance” estimates that Russia’s total defence spending was about £40 billion in 2007.

If so, Russia was comfortably outspending Britain even before the latest increases. Britain’s military budget amounted to £30 billion in 2007, rising to £34 billion last year.

John Chipman, the chief executive of the IISS, said that after last summer’s war with Georgia, Russia “announced plans for the most radical reform of the armed forces since the end of the Soviet Union.”

Mr Chipman added: “The army will be fully professionalised. The structure of the armed forces will change radically from divisions to more flexible brigades. This restructuring, if implemented jointly with the previously announced ambitious modernisation plans, could make the Russian armed forces more capable to operate against modern threats.””…

The Russian defense minister, Anatoliy Syerdyukov has indeed developed a blueprint of the most radical reforms of the Russian military since 1991. They are actually the most radical reforms of the Russian military since 1945, when Russia was still a part of the Soviet Union.

Divisions have already been disbanded and replaced with brigades. Syerdyukov plans to reduce the number of generals from 1100 to 900, the total number of officers from 350 thousand to 150 thousand, and the number of military academies. He also plans to close unneeded military bases (which the USDOD has done several times) while reducing rear units.

The Telegraph was right to point out that, as the IISS has reported, Russia is understating its defense spending and that Russia’s real defense budget for FY2007 was 40 bn GBP (the equivalent of $80 bn back then), which was larger than British defense budget of the time, as well as all British defense budgets before the FY2010-2011 defense budget.

This means that as of FY2007, Russia had the third-largest defense budget in the world, trailing only the US and China, and vastly outspending any European country, including Britain, France and Germany.

Of course, Russia’s defense budget has only grown since FY2007. As the DT reported, Russia’s defense spending grew by 34% from FY2008 to FY2009, and is scheduled to grow by 65% from FY2010 to FY2013 (Russian fiscal years are the same as Gregorian calendar years, i.e. they begin on 1st January).

“Russia approves 65 per cent defence budget increase

The spending boost is part of an ambitious £276 billion rearmament programme to re-equip Russia’s conventional forces between now and 2020

Vladimir Popovkin, Russia’s first deputy defence minister, said earlier this month that the overall programme budget is also being reassessed and could be boosted to 425 billion pounds in the near future.” –…

This huge defense spending increase is possible, because:

1) Russia has huge gold reserves;

2) The price of oil is $76 per barrel;

3) Russia plans to privatize many of its industries, including its railroads, Rosneft, and two banks.

Of course, in Russia, you can buy much more for one dollar than in the US or Britain. Moreover, Russian weapons are cheaper than their American and British counterparts. For example, a Generation #4+ Su-30 fighterplane costs a paltry $30 mn, and a fifth-generation Su-35BM fighterplane costs only $65 mn, whereas an F-35 costs $83 mn and an EF-2000 Typhoon costs ca. 60 mn GBP (the equivalent of ca. $120 mn). These aircraft are excellent, but they cost much more than their Russian counterparts.

This means that, contrary to the denials of many American politicians, including Bob Gates, William Lynn, Barney Frank, Ron Wyden and Ron Paul, America IS facing a large-scale conventional military threat that is a peer competitor (two peer competitors, actually: Russia and China), and conventional threats to America are growing, not shrinking.


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