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Russia’s Defense Capabilities in 2018

War weary and under financial pressure, Russia’s defence and security policy will remain assertive in 2018, but there will also be a greater degree of risk aversion.
Author: Pavel Luzin
Sky high defense spending, as if in preparation for a major war, is depleting Russia. In 2018, Moscow will face the question of how long this can endure. Although the authoritarian regime has not been prepared (so far) to up the ante even further, it cannot significantly cut this type of expenditure either, mostly for domestic political reasons. So far it has also failed to overburden the West with confrontation and newly created problems.

Consequently, the Kremlin will try to create more problems for the West in the coming year while avoiding any excessive waste of its main resources; there will be a reluctance when it comes to taking on too many further foreign policy responsibilities, but the Kremlin will endeavour to remain unrestrained in its assertive actions abroad for as long as possible.

At the same time, the general inefficiency of the Russian political and economic system makes further self-isolation of Russia and the development of semi-military governance methods the most likely outcome.

The limit to financing

By 2017, Moscow reached the limits of its defense spending: in 2016, it spent 5.67 trillion rubles ($84.6 billion at an average annual exchange rate) or 6.59 percent of GDP. It is important that Russia’s cumulative defense expenditure should be estimated based on two items of the federal budget – “National defense” (3.77 trillion rubles/ $56.3 billion) and “National security and law enforcement” (1.9 trillion rubles/ $28.3 billion). It is noteworthy that 800 billion rubles earmarked for “National defense” was used to repay debts owed by Russian defense companies.

The trick is that the Russian military doctrine and national security strategy actually encompasses external and internal threats. What is more, not only the armed forces but also divisions of the National Guard of the Russian Federation (Rosgvardia), Federal Security Service of the Russian Federation (FSB), Ministry of Emergency Situations and Ministry of Internal Affairs participated in military exercises “Zapad-2017” (West-2017). In other words, all the Russian siloviki are incorporated into the system of domestic and international military planning. Hence, the necessity to inflate the level of funds earmarked for security agencies arises.

On the whole, the 2016 level can be considered an aberration, largely stemming from the high level of inefficiency of the Russian military industry. It comes as no surprise that Russian defense spending apparently shrank to around 5 trillion rubles in 2017. Of this sum, approximately 3 trillion rubles has been earmarked for “National defense” and almost 2 trillion rubles – for “National security and law enforcement”. In 2018, these limits will generally be maintained (classified expenditure included): t