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Russian defense spending is much larger, and more sustainable than it seems
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The United States has a basic problem: Devising a strategy toward
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adversaries necessitates having some reasonable estimate of their economic and military power. We do not do this especially well.

Ask yourself: Do we really know how much our adversaries spend on their military, and what they are getting for their money? Russia, for example, presents a glaring problem for academic and policy circles alike. Most comparisons are done in current U.S. dollars based on prevailing exchange rates, making Russia’s economy seem the size of South Korea’s. This approach is useless for comparing defense spending, or the country’s purchasing power. Yet, it is used frequently to argue that despite a large military modernization program, and a sizable conventional and nuclear deterrent, Moscow is a paper tiger. As a consequence, the debate on relative military power and expectations of the future military balance is terribly warped by a low-information environment.

The best example of this problem is a recent announcement by the Stockholm International Peace and Research Institute that
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to the sixth highest in the world in 2018, at $61.4 billion. Rest assured, or perhaps discomforted: Russian defense spending is several times higher than $61.4 billion, and the Russian defense budget remains the third largest in the world, dwarfing the military expenditures of most European states combined. In reality Russia’s effective military expenditure, based on purchasing power parity (Moscow buys from Russian defense manufacturers in rubles), is more in the range of $150-180 billion per year, with a much higher percentage dedicated to procurement, research and development than Western defense budgets.

Although there are challenges with comparing economies based on purchasing power parity, it would do good to keep in mind that Russia is actually the sixth-largest economy in the world and not long ago was the largest economy in Europe based on purchasing power parity (PPP) — ahead of Germany. Purchasing power comparisons come with their own shortcomings, especially when understanding global financial flows, import/export, and the like, but it helps paint a much more accurate picture than comparing economies by converting their gross domestic product into dollars based on the current exchange rate. If ruble valuation suddenly dropped by 50 percent against the dollar, which it did in 2014, does that mean the Russian economy suddenly contracted by half in one year? No, it doesn’t. Then why is this a useful way of looking at the world and understanding the relative balance of economic power or military expenditure?

There is no value in conceptualizing Russian defense spending in U.S. dollars based on the prevailing exchange rate, since Russia does not buy its weapons or major components
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. Yet, this is how SIPRI arrives at its $61.4 billion figure, which places Russia safely behind France, even though Moscow fields a military that’s almost 900,000 strong, with a conventional and nuclear arsenal capable of taking on the United States. PPP is not without limitations, but it is heavily advantaged when comparing defense spending as opposed to consumer spending, where countries may import a broad range of goods. As a consequence it is not only the most accurate way to compare defense spending in countries using different currencies, but should arguably be the only method of doing so.

The Russian defense budget fluctuates at around 3 trillion rubles, but total military expenditure includes housing, pensions, infrastructure, the National Guard, the Border Guard Service and some line items that are secret. Depending on what you count, total military expenditure can add to roughly 4 trillion rubles in 2018 or about 4 percent of GDP. This also means that a decline in overall military expenditure, as recently reported by SIPRI, does not necessarily mean a reduction in Russian spending on military operations, procurement, R&D, or maintaining the force. There is well over 1 trillion rubles of military expenditure in Russia outside of the regular defense budget.

Moscow spends about half of that defense budget on procurement, R&D, and repair, typically at 1.4-1.6 trillion rubles. As a middle-income country, with conscripts making up close to a third of the force, Russia spends much less on maintaining its military than Western counterparts. This overall level of military expenditure is not only sustainable, but has in practice been sustained throughout the last five years of confrontation, largely unaffected by sanctions.

Rather than consume the government budget, Russian defense spending is slowly declining as a share of GDP, which is in part what makes it sustainable well into the 2020s or perhaps 2030s. Moscow is cognizant of the runaway defense spending that led to the Soviet Union’s demise, at a time of economic decline. The reasons for the spending plateau include a conscious decision by the state to sequester defense spending so as to prioritize national welfare and the simple fact that the Russian military had already procured a tremendous amount of equipment during the first five years of modernization spending. Russian arms exports have also held steady at about $15 billion per year on top of domestic procurement.

Moscow is not exhausting itself with defense spending, but military expenditure as a share of GDP is still too high, reflecting a problem posited by Talleyrand long ago to Napoleon: “You can do everything with bayonets, sir, except sit on them.” It may be convenient to simply believe that something has to give when surveying the stagnant state of the Russian economy and political ossification. However, Russia is not the Soviet Union, spending itself into oblivion as the economy collapses, and we are not living in the 1980s. The truth is that for the foreseeable future, nothing has to give. It can go on, and it will.
 

Tirdent

Junior Member
Registered Member
Only issue is: from a Russian perspective, they could be doing that much better still if they had managed to avoid the moronic actions which precipitated the sanctions. That, rampant corruption and lots of needless duplication of effort in R&D.

Yes, Russia is neither down nor out as is, but compared to the hypothetical ideal they did take a severe hit.
 

gelgoog

Brigadier
Registered Member
I would not say the duplication of effort in R&D is useless. They are training a cadre of researchers and designers after decades of neglect.
Some programs will be massive failures as a result of lack of experience. The duplication of effort increases the likelihood a viable weapons system will still be made despite that.

A considerable amount of reduction in duplication and waste has happened already.
Most of the companies which did not have attractive military export products died in the 1990s.

The new weapons systems are sometimes way more effective than the older systems so the fact that they have less platforms is not necessarily an issue.

To a large degree the main focus over the last decade was on precision weapons, air defense systems, and the nuclear deterrent. If you look at those systems, the precision weapons allow you to achieve the same terminal effect with a lot less resources, the modern air defense systems are sometimes way more cost effective (compare the Voronezh and Daryal OTH radars for example), the modern solid propellant ICBMs are also a lot more compact.

I do question some of their present choices though. For example I see no reason for producing more Admiral Grigorovich frigates now that the Admiral Gorshkov is finally operational. They have way too many corvette classes but I kind of understand their problem as they have not settled on a proper design yet. I also consider the MiG-35 to be a waste of time and resources. The air transport and heavy bomber segment is also a bit of a disaster to be honest. The nuclear submarine classes are diverging too much. In my opinion there is no reason to have different reactor designs for example. The T-72 tank upgrade program has also outlived its usefulness, I think, yet they still dump money and resources into it. Heck, they are even resurrecting the T-80. Just kill it already.
 
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TerraN_EmpirE

Tyrant King
The T-72 tank upgrade program has also outlived its usefulness, I think, yet they still dump money and resources into it. Heck, they are even resurrecting the T-80. Just kill it already
despite claims to the contrary Russia still depends on both T80 and T72.
T72 is still the back bone of the Russian army and Exports. T80 is a serviceable third gen tank that still has room to grow.
These are not bad tanks per say it's just a question of where they need more work.
T14 Armata is a fantasy.
T90 was an attempt at a alternative to T80UD.

It is true for China as well.

The Chinese defence spending should be between 50-100% of USA.
Also a fantasy. Much of US spending is support of NATO and allies. The U.S. is still the biggest economy.
 

gelgoog

Brigadier
Registered Member
I would not say the T-14 Armata is a fantasy. It is just that it has the same flaws a lot of leading edge weapons have. A lot of components in the tank are poorly designed.
The Soviet Union had the same issue in the 1930s with tanks like the SMK. Much of the technology was eventually repurposed into the successful KV-1 tank which led to the IS series.

The T-14 has a great armor package, suspension, and engine design from what I understand. The problems are the turret, gun, and probably the cockpit.
 
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Pmichael

Junior Member
Well, you can read that comment in a different way. Russia is running thin, its economy isn't better than the one of the Soviet Union so less military spending means they can't maintain the same capacities.

Just look at the numbers of flight hours an Russian pilot is getting those days, the state of its only aircraft carrier or the fact that every superweapon never see service in meaningful numbers, etc..
 

gelgoog

Brigadier
Registered Member
Well of course Russia has a downsized military. It simply does not have the same kind of production or output as the Soviet Union did.
Just look at the population numbers as an example. The population has shrunk down and is a lot older.

The Soviet Union at its peak had 293 million people. Modern Russia has 146 million people.
Even if you added together the population of all the ex-republics of the USSR today it is less than that 293 million.

But Russia still has like over twice the population of a country like Germany or the UK and plenty of natural resources.
So you would expect them to have a military twice the size of the one in either of those countries. That is sustainable for them.

Russia has 127x Su-34, 137x Su-30, 78x Su-35, 359x Su-27. Compare this with the Royal Air Force's 142x Eurofighter, or the French Air Force's 110x Rafale B/C, 117x Mirage 2000s.
So Russia basically has 342x modernized fighter/bomber aircraft of types which did not exist at the time of the Soviet Union.
Still, one could argue that much of the technology is derivative of the Su-27's.

Russia also has 105x Yak-130 trainer aircraft. So their Air Force has the equipment to better train pilots than they used to.

Much the same situation is true in the army with regards to tanks and other vehicles.
The US is still using the M1 which is a tank designed in the 1970s.

The major Russian weakness is the surface Navy for sure. But even there you can find new systems like the Gorshkov frigates. Just not in enough numbers.

The US has a similar problem with their nuclear deterrent. They are still using systems designed in the 1970s. In comparison Russia has a much more modern nuclear deterrent.

Russia simply had different priorities. Like the nuclear deterrent, and surface-to-air missiles.
Given constrained resources focusing on conventional weapons was not the best choice for them.
Russia is not like the US who had to fight in police actions all over the world.

While it is true the Russian naval industry is seriously lackluster, the US naval industry seems to be going pretty much the same way. Other than the military programs, where is their civilian naval construction sector? Gone basically.
 
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Pmichael

Junior Member
So with other words. Just the European NATO forces bought actually more aircraft than Russia in the post-Cold War era, while Russia is also stuck with Su-25 derivates.

So Russia suffers from brain drain, lost of domestic industry, lowered budget and massive corruption.
 
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