Last year, Russian national defense spending surpassed $32 billion, compared with less than $3 billion in 1998. Looking forward, Russian defense spending is expected to trend upward; however, Moscow's strategic bandwidth may be constrained by a confluence of defense economic factors.

Forecast International projects that between 2008 and 2012, Russia will spend approximately $294 billion on national defense. This projection is rooted in Russia's amended three-year national defense budget, which allocates RUB959 billion ($37.5 billion) in 2008, RUB1.06 trillion ($41.5 billion) in 2009, and RUB1.92 billion ($46.6 billion) in 2010. In the outyears of 2011 and 2012, Russian defense spending is projected to reach $53 billion and $61 billion, respectively.

"Three major trends will define Russian defense spending between 2008 and 2012," notes Matt Ritchie, an analyst specializing in Eurasian defense economics, "increased procurement, increased funding for strategic arms, and a relative decline in research and development."

These trends are already being manifested in the national defense budget for 2008 to 2010. Procurement spending is set to increase from $27 billion to over $36 billion, funding for the strategic arsenal to expand from $675 million to $990 million, and allocations for applied research and development to decline from just over $5 billion to less than $4.9 billion.

The shifting trends in defense spending align with Russia's evolving strategic priorities. "Russia's quantitative military advantage has enabled it to push its interests throughout its perceived sphere of influence," suggests Ritchie.

"The Kremlin is keen to consolidate these gains and its current level of geopolitical influence, an interest that is driving its acquisition of new military systems (conventional and strategic) in an effort to expand this capability with a qualitative edge."

However, with Russia's power projection capabilities increasingly linked to its national defense budget, a number of defense economic factors threatening the budget's efficacy may undercut Moscow's ability to leverage its influence.

Between 2008 and 2010, the share of the national defense budget devoted to procurement is expected to increase from approximately 72 percent to 80 percent, thus placing greater importance on the Russian defense-industrial base to deliver systems at cost and on time - an unlikely probability.

"As Russia attempts to procure its next generation of military systems, it will run up against the same cost overrun and time delay obstacles faced by Western contractors. Moreover, these issues are likely to be exacerbated by the rate of decline in the high-tech sectors of the Russian defense-industrial base," says Ritchie. Similar conclusions have been drawn by officials in the Russian defense industry.

The paramount issue in Russian defense economics is the extent to which the procurement-driven defense budget expansion will offset long-term underinvestment in the defense-industrial base. Ultimately how this dynamic influences Russia's ability to maintain its current level of strategic bandwidth will determine its geopolitical influence in the future.

Community
Email This Article
Comment On This Article

Share This Article With Planet Earth

del.icio.us	Digg	Reddit
YahooMyWeb	Google	Facebook

Related Links
The Military Industrial Complex at SpaceWar.com
Learn about the Superpowers of the 21st Century at SpaceWar.com