Analyst: Recent sharp rise in Russian military spending shows Putin preparing for bigger war

Andrey Illarionov, Russian economist and former economic policy advisor to the President of Russia, Vladimir Putin. Currently, a senior fellow in the Center for Global Liberty and Prosperity at the Cato Institute in Washington, DC

Andrey Illarionov, Russian economist and former economic policy advisor to the President of Russia, Vladimir Putin. Currently, a senior fellow in the Center for Global Liberty and Prosperity at the Cato Institute in Washington, DC 

2015/04/03 • Analysis & Opinion, Military analysis, Russia

Russian military spending, even as officially given by the finance ministry, provides a remarkably accurate early warning indicator of Russian intentions, Andrey Illarionov says, and a dramatic increase in spending since January of this year thus suggests that Vladimir Putin is preparing for a larger war in Ukraine and/or elsewhere.

Between the time that Putin came to power up to January 2014, the Moscow economist and commentator says, Moscow has spent on average 2.5 to 3.2 percent of GDP on the military, with the figure tending to rise over time. During the first 13 years of his rule, Illarionov says, spending in constant prices went up 2.6 times.

But over the 14 months – the period of Moscow’s intervention in Ukraine – Russian spending on its military has not only gone up significantly as one would expect at a time of military operations but has tracked in a way that provides insights on Russian intentions for the future, the Moscow analyst says.

After Putin made his final decision to intervene in Ukraine in February 2014, he says, Moscow’s military expenditures “were increased by more than twice,” a figure that suggested the Russian government intended not only to seize and occupy Crimea but all of what it calls “Novorossiya.”

Military Spending as % of Gross Domestic Product (Image credit: kasparov.ru)

Russian Military Spending as % of Gross Domestic Product. Source of data: Russian Ministry of Finance (Image: Andrei Illarionov)

In February, March and April of last year, Russian military spending amounted to 6.7 percent of GDP and 27.7 percent of all budget expenditures.

At the end of April, the Kremlin halted its most ambitious plans and reduced its monthly military spending for the rest of 2014 by approximately a third compared to the first three months of last year, reductions that were possible even though Moscow increased its exercises near the Ukrainian border and supported military action within Ukraine.

Military Spending US$ Billion (Image credit: kasparov.ru)

Russian Military Spending, US$ Billion. Source of data: Russian Ministry of Finance  (Image: Andrey Illarionov)

According to Illarionov, official Russian government figures show that “the situation radically changed” in the first two months of this year, the latest period for which figures are available. Average monthly military spending increased 2.3 times, compared to the May-Deceber 2014 period, 3.3. times compared to the last pre-war period, and 8.8 times compared to 2000.

For those two months alone, he says, military spending was more than 1.3 trillion rubles – that is, more than 20 billion US dollars – and it constituted 43.3. percent of the federal budget and 12.7 percent of Russia’s admittedly diminished GDP.

Such a “sharp increase” in military spending provides addition evidence that Putin is preparing for military actions “on a far larger scale and much higher level of intensity than even those which [the world] has seen over the course of the last 14 months.” In short, Illarionov says, the Kremlin leader is preparing for a major war in Ukraine and/or elsewhere.

Edited by: A. N.

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  • DejaVu

    I agree. We have seen a major modernization and military programme by both Russia and China in the past decade or so and sharply increasing from around 2008 and onwards for Russia. While the West disarms and cuts defense spending the East is rising.

    Remember that rising powers and declining powers almost always come into a military confrontation and that is where I believe we are heading especially with the major regional wars about to break out in Asia and the Middle East.

  • Petrolkoks

    Might have to do, with inflation too, no?

    • Eddy Verhaeghe

      No, the figures that Andrey Illarionov gives are in % of Russia’s GDP and in US $.

  • Morris

    The West is trying to see this story in rather other ways than it is really about. Sooner or later mister Putin will be ready and even forced to unleash own war machinery. Who is one with a believe that is just show of force! Or the question is – who is next one? Large scale operation in Eastern Ukraine, Moldova, Baltic ….? In any case next Kremlin’s move will completely destroy the believes into the Western ability and willingness to deal with an aggressor.

    • Randall Cook

      Morris–please cut back on your PCP usage when posting. Do take your meds too, there’s a good vatnik bootlicker.

      • Morris

        Hey, Randall Cook! I did not get a point. Could you please switch from that benglish or whatever language to normal queens language.I can’t read you.

        • Randall Cook

          Morris, the Cat (or is it Pussy?)–you are an hallucinogenic addict. Please, for the luv of Mutter-RuSSland, sober up before you attempt, lamely, to troll…..Sie leben hinterm Sonnenschein

          getrennt von uns unendlich weit

          sie müssen sich an Sterne krallen (ganz fest)

          damit sie nicht vom Himmel fallen

          • Morris

            Rammstein … that is good. Wirklich, Ihr seit ein Kerl, aber es ueberzeugt Mich garnicht.
            Randall … I still insist that you specify yourself and tell me one strong argument about comment I wrote and article.

          • Randall Cook

            Die Wahrheit ist ein Chor aus Wind

            kein Engel kommt um euch zu rächen

            diese Tage eure letzten sind

            wie Stäbchen wird es euch zerbrechen.. ruSSland can unleash its rusty, aged war machine on the West, that is fine. America will anihilate the ruskis down to the last katsap…Arguement, Morris? I don’t argue, I debate..and although you attempt to do so, it’s impossible to take you seriously.

          • Morris

            I like your approach, attacking and killing discussion or will to post. Looks like you are more like a Kremlin Troll than
            me. By the way your slang is good, but argument means as well reasoning.
            I wonder, are Volksdeutsche aus Kazahstan or …. You are even less
            serious than am I. Rusty, aged war machine Ruski from former Soviet
            Union. I agree, but read the article and think I little. Move your grey matter.

          • Randall Cook

            I like the approach which I make, as well. That is why I use it.

          • Morris

            Enjoy me friend. This battle is not over, we will meet again either on this or other virtual battlefield, at least.

          • Randall Cook

            Oh, I do..just as I enjoy viewing incinerated moskali……smells like, victory….ПТН ХЛО

          • Morris

            Piplyuk and Pautelis.

          • Randall Cook

            Why don’t we play ”name this moskal’, Morris the Troll; I’m sure you got all wet and runny when THIS guy’s chums shot down the Civilian Airliner Malaysia MH17…..ПТН ХЛО

          • Morris

            Ja, Kamerad! Spielen wir Arschlo……chers nad Fotz….en Maler. Du bist ein Braunes Faschist mit Roten Putin XLO auf dem Swa…nz. Übrigens heute ist wahrscheinlich dein Lieblings Tag … Fuhrer ist geboren.