The defense budget of the Russian Federation is set to contract by twenty five percent, as the recession and sanctions-plagued country continues to tighten its belt. The situation will have serious implications for Russian military equipment modernization and for overseas operations such as Moscow's campaign in Syria.
According to Jane's, Russia's defense budget will plunge from $65 billion to $48.4 billion dollars. Russia will go from the fourth largest spender on military hardware in the world to the eighth, behind India and France. The Kremlin was knocked from third place to fourth in 2016 by Saudi Arabia.
When the cutting is complete, Russia's defense budget will be less than President Donald Trump's proposed $54 billion increase to the U.S. defense budget for a single year.
Russia's defense budget has increased an average of 19.8% a year since 2011. While that sounds impressive, Russia is just now coming out of a period of high inflation-in 2015 the inflation rate was 17%-that ate up large amounts of the defense budget increase. The steep drop in military spending is likely a reflection of an underperforming economy, depressed commodity prices (particularly oil), and the effect of Western sanctions over Russia's annexation of the Ukraine.
The steep drop in spending will continue to derail Russia's much-hyped defense buildup, which in 2014 promised to replace 70 percent of the Russian military's arms with brand new items by 2020. The modernization effort was intended to procure 2,300 new tanks, 1,200 new helicopters and aircraft, 50 new surface ships and 28 new submarines. Russia's plans to field a new generation of nuclear platforms, from new rail-mounted ICBMs to a new strategic bomber will likely be slowed or placed on hold.
In November, likely as a sign of things to come, Moscow floated plans to refurbish 3,000 old tanks with upgrades-a substantially cheaper option than buying new tanks.
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