June 23, 2017

Even direct costs of Putin’s aggression are unsustainable, says analyst


The indirect costs of Vladimir Putin’s invasion of Ukraine and annexation of Crimea, as well as his military muscle-flexing elsewhere – which resulted in the isolation of Russia internationally and greater repression and human suffering domestically – are perhaps incalculable.

But the direct costs for the military can be measured, and they are growing, quite possibly beyond the level of sustainability. That is just one reason behind the Kremlin leader’s declaration during his Direct Line program on June 15 that he plans to cut defense spending over the next few years (novayagazeta.ru/news/2017/06/15/ 132523-putin-zayavil-o-planah-snizit-rashody-na-oboronu).

Such cuts appear likely to hit personnel and military retirees, in the first instance, places where a great deal of money can be saved – in Russia today, personnel increasingly is expensive relative to equipment – but there are limits to that, given that such cuts undermine the loyalty of those in uniform (kommersant.ru/doc/3325573).

In the June 15 issue of Segodnya, Mikhail Pashkov of the Kyiv-based Razumkov Center argues that Russia is following in the path of the USSR in its military spending, a course that he suggests contributed to the demise of the Soviet Union and is placing ever more unbearable burdens on Russia (segodnya.ua/opinion/pashkovcolumn/cena-
rossiyskogo-velichiya- 1029867.html).

Supporting the unrecognized republics its wars have created is costing Moscow enormous sums, something over $200 million (U.S.) annually for South Ossetia alone. Over its entire existence, that republic has cost Moscow about $1 billion and Transdniestria about $6 billion.

At present, the Ukrainian government estimates that Moscow is spending “approximately $6 billion annually on its war in the Donbas, about equally divided between supporting the unrecognized republics there and backing its military operations.” But Russia can’t stop because, if it does, those and the other unrecognized republics will soon cease to exist.

The Crimean Anschluss is also adding to the burdens the Russian state budget must bear, Mr. Pashkov continues. Moscow is currently spending approximately $1.4 billion every year on that occupied Ukrainian peninsula – an amount that accounts for 73 percent of all government expenditures there.

As far as Russian military operations in Syria are concerned, Moscow has spent close to $1 billion, according to some estimates. Exactly how much, however, is unknown, because the Russian government has declared these figures “a military secret.” And the costs are mounting because this military action is continuing.

If one sums up all the costs to the Russian budget of the wars in Syria and Ukraine and the support of occupied Crimea and the unrecognized republics, they total approximately 3 to 4 percent of the Russian state budget this year. And that figure is only “the tip of the iceberg” of Russian spending on promoting itself abroad, Mr. Pashkov says.

That doesn’t include the money Moscow spends on propaganda, cyber war, secret operations and support of agents of influence throughout the world. The Ukrainian analyst says that Kyiv estimates Moscow now spends $2 million a year on the Ukrainian branch of the Institute of CIS Countries alone.

Sanctions add to the burden, having cost Russia some $30 billion in lost GDP growth, a figure to which one must add $9 billion lost because of the Kremlin’s countersanctions program, the analyst continues.

All of this is leading to the militarization of Russia: Moscow has the third largest military budget in the world, but Russia’s GDP is not even in the top 10 of the world’s economies. Russia now maintains more than 4 million siloviki (1.9 million in the army, 1 million in the police, and another 1 million in other forces).

“In other words,” Mr. Pashkov says, “the number of militarized structures in the foreign policy of Russia is comparable with the number of people in uniform in the former USSR, even though the population in the Russian Federation is only half as large.” The Soviet leadership couldn’t carry this burden. Ultimately, neither will Russia, he concludes.


Paul Goble is a long-time specialist on ethnic and religious questions in Eurasia who has served in various capacities in the U.S. State Department, the Central Intelligence Agency and the International Broadcasting Bureau, as well as at the Voice of America and Radio Free Europe/Radio Liberty and the Carnegie Endowment for International Peace. The article above is reprinted with permission from his blog called “Window on Eurasia” (http://windowoneurasia2.blogspot.com/).