Is Russia's Defense Budget Crashing? Not So Fast
Russia's defense spending is not undergoing an apocalyptic crash. That's the assertion of an article at the blog Russian Military Analysis, which is challenging a report last week from Janes that Moscow's military spending was falling an astounding 25 percent in a single year.
Military spending is actually falling just seven percent, according to Michael Kofman, a research scientist with the CNA Corporation who writes on Russian defense matters. That's a long way from the 25 percent reported by Janes. Kofman explains that Russia's 2016 military spending budget was boosted by a $13.8 billion one time loan payment by Russia's Ministry of Finance to pay down defense sector debt.
This artificially boosted defense spending for that year, so compared to the 2017 defense budget, which had no such boost, defense spending appeared to fall 25 percent. Russia's defense budget for 2016, minus the debt payment, was $53 billion. The budget for 2017 will be $49.2 billion.
The original article, by worldwide defense authority IHS Janes, was picked up by Popular Mechanics just last week.
While the original report may have inflated 2016's defense budget, the numbers for 2017 remain the same. Russia will still spend less on defense than France and India did in 2015, and has still drifted to eighth in spending worldwide. Moscow's 2017 military budget is still less than the proposed $54 billion increase to U.S. defense spending for a single year.
Budget cuts aside, a major danger to the Russian defense budget is inflation. Inflation affects all countries: in 2010, Chinese defense spending rose 7.8 percent but was kneecapped by a 6.7-percent inflation rate, for a net gain of just 1.1 percent. Russia's problem is actually worse: Russia is just coming off a rise of inflation, which spiked to 15.55 percent in 2015. The European Union forecasts an inflation rate for Russia in 2017 of approximately 4.9 percent, which, on top of the seven percent defense spending reduction, means the Russian military will see the real purchasing power of its defense budget drop by nearly twelve percent.
According to Kofman, this is the third straight year defense spending has fallen.
Source: Russian Military Analysis
You Might Also Like
