April 16, 2014

TSG IntelBrief: Russian Military Spending: Priorities and Power Projection

• A nation’s budget is a list of its priorities, and Russia’s recent and near-term budgets signal a willingness to absorb economic drag in order to increase its ability to project force in the region

• NATO’s defense budgets have steadily shrunk since the breakup of the USSR, while Russia’s military spending is now larger as both a share of its GDP and a share of overall government spending over any NATO country, including (for the first time since 2003) the US

• Much of Russia’s defense spending is aimed at modernizing a smaller army, with increases in mobility and speed that are applicable to maintaining dominance among the former Soviet republics and satellites.

  The numbers are telling. US Vice President Biden once said “Don’t tell me what you value. Show me your budget and I’ll tell you what you value.” And according to recent and projected budgets, Russia values hegemony in its traditional sphere of influence. Russia is now spending a greater part of its Gross Domestic Product (GDP) on its military than any time since the breakup of the USSR, the results of which can been seen in its ongoing actions in Ukraine.

More specifically, Russia is spending money to increase its ability to project power across the region, with Russian President Putin openly stating “Russia cannot rely on diplomatic and economic methods alone to resolve conflicts.” The Russian military budget reflects this statement, as Russia plans to spend $770 billion by 2020 to transform the remnants of a fallen global power into a highly capable regional power.

The values shown in the Russian budget are now reflected in events in Ukraine. The situation is accelerating, as Ukrainian forces seek to regain control of government buildings from pro-Russian militia in the eastern region near Slovyansk and Donetsk, a sign that the government believes it must act to prevent a rolling annexation that began with Crimea last month. On cue, Moscow began talk of impending civil war and the need to protect ethnic Russians in the area, the same pretext it used with Crimea.

Also accelerating is Russia’s defense spending, which as a percentage of GDP more than doubles the spending of its European NATO rivals, and for the first time in ten years has exceeded US defense spending in terms of percentage of GDP and as a percentage of overall government spending. Russian budgetary priorities are highlighted in converging trend lines, with NATO and US defense budgets steadily declining and Russia’s defense budget increasing ever more quickly. For example, in 2013, Russia spent 4.5% of its GDP on its military, while Germany spent 1.3%, France 1.9%, UK 2.4%, Poland 1.8%, and the US 4.4%. This converging trend of decreased NATO funding and increased Russian spending is projected to continue not only through the next year but for the foreseeable budgetary future, out to 2020.

There is little need to speculate as to the reason behind Russia’s increase in military spending. In a February 2014 article in Foreign Policy magazine, Putin states clearly that “Russia cannot rely on diplomatic and economic methods alone to resolve conflicts” and therefore Russia has “adopted and [is] implementing unprecedented programs to develop our armed forces and modernize Russia's defense industry.” Putin states that his country’s nuclear deterrent means that “nobody will dare launch a large-scale aggression against us,” making it clear that improvements in a rapid deployment force are primarily to project power and expand Russia’s sphere of influence.

Putin’s enhanced budget and recent actions show what he values. Russia has long needed to modernize its lumbering army of the Soviet era, and increases in pay and living standards will help discipline and retention levels. He has stated that corruption and inefficiency, long a scourge of Russia’s armed services, will be rooted out. But Putin isn’t so much trying to repair the Russian military as he is trying to reinvent its purpose and capability. The budgetary increases will not bring back the 4.3 million-man army of the mid-1980s, but it is designed to reach and maintain a mobile lethality that projects power quickly and decisively throughout much of the territory it once controlled. And even with a reduced but modernized army of 700,000, Russia’s army is still 1.5 times larger than the armies of Germany, France, and the United Kingdom combined.

The Russian president views Ukraine as part of a greater Russia. And in his words, he views attempts to peel Ukraine from its orbit as a call for the “resources of global significance to be freed from the exclusive sovereignty of a single nation. This cannot happen to Russia, not even hypothetically.” His increased military budgets until 2020, which focus less on becoming a hypothetical global power and more on a functional regional hegemon, indicate that he is serious.



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