Military budget of the Russian Federation

It is a double bonus.... all this crap from the US regarding sanctions against anyone who deals with Iranian oil pushes up the price of oil.

All the crap about dropping the INF treaty pushes up the price of oil too... sabre rattling always makes markets nervous.

Both these things are pushing extra money into the Russian budget because they are making more money from the antics of the US... so it makes sense to put a bit of extra money into dealing with the US if needed...

Russian defense spending is much larger, and more sustainable than it seems

https://www.defensenews.com/opinion/commentary/2019/05/03/russian-defense-spending-is-much-larger-and-more-sustainable-than-it-seems/


I don't agree with his assessment that 4% of GDP is too high, but the rest is on point.

The russian defence spending is as large as the russian government says. Don´t use western manipulated exchange rates (Ruble to Dollar). And remember that purchasing power in Russia is much stronger then in the west.

The west is embarrassed that they waste so much money on trying to dominate smaller less powerful countries so they try to inflate the perceived spending of Russia and other countries to make their own spending seem more reasonable to the poor bastards who have to pay for it with their taxes.

Besides, they are actually under an economic siege from the US and the EU... their defence budget should be double what it is, but the Russians have some self control and much less corruption... Russian generals are not going to feather their nests by buying unnecessary expensive things that Russia does not need and then retire to a nice cushy job in the company that makes said useless weapon system...

The US needs a law that states former pentagon officials should not be allowed to get jobs with defence contractors with pentagon contracts for 20 years after they retire from the military and they lose their clearances for secret material the day they retire...

Tingsay wrote:Russian defense spending is much larger, and more sustainable than it seems

https://www.defensenews.com/opinion/commentary/2019/05/03/russian-defense-spending-is-much-larger-and-more-sustainable-than-it-seems/


I don't agree with his assessment that 4% of GDP is too high, but the rest is on point.

The article is excellent overall. The 4% part is debatable of couse, but as the author points out, the current spending of 3% or 4% of GDP, or whatever, is totally sustainable for Russia, because its PPP GDP is actually large.

Though he seems to think that Russia's economy will remain stagnant in the future (I think?). Maybe these people should do some research on Russia's economic plans for pre-2020 AND post-2020. Russia has not and will not prioritize short-term GDP growth until 2020. I guess that concept is unknown in most Western countries nowadays? But it shouldn't be that hard to understand... It's also simply not "feel-good" Russian propaganda, the surpluses and reserves are huge.

One other, smaller thing: the author suggests that PPP military spending is a more accurate indicator for all countries. I disagree, and I argue that in that sense, Russia and China are almost exceptions. There are only a few countries with proper, full-scale MICs. India, for instance, is not yet one of them. Neither is Saudi Arabia. Or Poland. For these type of countries (except Saudi, the country and its human capital is a total joke), you should probably combine nominal and PPP in some way.

Russia could spend 10% of their GDP on defense and it would be a huge boost to industry simply because its all local. Recall what Pogosyan once said (head of Sukhoi) - For every Ruble you invest by buying a Sukhoi jet, you get 3 Rubles back.

Reason for this was because of all the contractors involved. It was said a large portion of the accelerated GDP growth also gave thanks to Russia's large procurement of weapons.

But one has to be careful. It has to be done via replenishment, not just throwing money around at every R&D facility that releases something that may sound cool.

Hole wrote:The russian defence spending is as large as the russian government says. Don´t use western manipulated exchange rates (Ruble to Dollar). And remember that purchasing power in Russia is much stronger then in the west.

PPP money won't buy you a Big Mac, or a missile, or a tank.

Actually, that is exactly what it does. Big Mac Index is basically the same thing lol.

The admin of Russia Defence Forum doesn't get purchasing power parity. After 2014. No offence, but I find that hilarious...

Vladimir79 wrote:

Hole wrote:The russian defence spending is as large as the russian government says. Don´t use western manipulated exchange rates (Ruble to Dollar). And remember that purchasing power in Russia is much stronger then in the west.

PPP money won't buy you a Big Mac, or a missile, or a tank.  

Yes it does, cause that is what Russia gets in Rubles, not USD.

Kimppis wrote:...There are only a few countries with proper, full-scale MICs. India, for instance, is not yet one of them. Neither is Saudi Arabia. Or Poland. For these type of countries (except Saudi, the country and its human capital is a total joke), you should probably combine nominal and PPP in some way.

Correct

Basically one would need to go over list of items in country's defense budget, separate local ones from imported ones and split GDP/PPP scale accordingly

The USSR concentrated too heavily on the former seeking full parity (mainly due to political considerations, eg cock-stroking), and Russia has learnt that lesson well and truly and won't repeat the mistakes of the past.

Putin and the Russian military have proven they can be responsible when it comes to protecting Russia, they have not rashly ended production of 4th gen fighters and focussed only on 5th gen fighters when the latter are not proven and the former are still useful and effective... it is almost like the high low formula of the cold war with big expensive fighters F-14 and F-15 used together with electronically more sophisticated smaller cheaper fighters like the F-16 and F-18 which were numbers fighters, and also where the F-15C was air to air only while the F-16 tended to be the bomb truck along with the F-15E... today the US has gone for the F-22 and the F-35 except the roles are almost reversed as the "cheaper" smaller lighter more numerous fighter is turning out to be rather more expensive than the bigger more capable aircraft.

There is no question the Su-35 and MiG-35 are cheaper than the Su-57, but operating them together you mix the strengths and minimise the weaknesses and get a powerful force much cheaper.

Equally T-72s are upgraded and still used because with the right ammo and the right tactics they should be fine for a lot of missions...

Lots of things have been delayed and some things they might not even get, but it seems a lot more thought is going in to where money is invested and where it is not.

Kimppis wrote:Actually, that is exactly what it does. Big Mac Index is basically the same thing lol.

The admin of Russia Defence Forum doesn't get purchasing power parity. After 2014. No offence, but I find that hilarious...

Please tell me at what bank I can exchange my money for non-existant PPP money?  The PPP doesn't account for quality of the item purchased.  The Big Mac in Russian villages is not the same beef source as the more expensive one in Moscow.  The Russian tank quality varies in our own country, Armata is better than T-90 but costs as much as the Abrams. Yasen is as good as the Virgina, and it also costs as much as the Virginia. You get what you pay for.

Vladimir79 wrote:

Kimppis wrote:Actually, that is exactly what it does. Big Mac Index is basically the same thing lol.

The admin of Russia Defence Forum doesn't get purchasing power parity. After 2014. No offence, but I find that hilarious...

........

The Big Mac in Russian villages is not the same beef source as the more expensive one in Moscow. Armata is better than T-90 but costs as much as the Abrams. Yasen is as good as the Virgina, and it also costs as much as the Virginia. You get what you pay for.

Alright so let's see:

Russia needs 3 CVNs

CVN must cost as much as American one in order to be usable

Ford-class aircraft carrier unit cost: US$12.998 billion (let's round it up to 13)

13x3=39 billion

Russian defense budget: 61 billion

That leaves 32 billion for aircraft fleets that will operate from those CVNs, fleets of large escort ships will have to protect these CVNs, crews and pilots that will operate those CVNs and of course for rest of Russian Military (little things like entire Army, Navy, Aerospace and Nuclear Force)

Development costs not included.




Unless PPP money suddenly becomes good Russia will without a doubt absolutely NEVER have CVNs and even if they somehow get an aircraft carrier it will definitely NOT be nuclear, it will NOT have catapults, it will NOT be any larger than Kuznetzov and above all it will NOT be anywhere close to being anything other than Kuznetzov-style trash.



So unless Russia starts printing some very awesome money real soon I think we can finally put this whole CVN fantasy to bed.

And that's barely tip of the iceberg of what will have to be ditched when it comes to Russian Military budget if PPP doesn't work.



Also, regardless of where in the country you buy Big Mac content is the same and they cost the same (otherwise a lot of suckers in Moscow are getting ripped off and rightfully so). By the way, don't expect it to be anything other than trash and definitely don't expect beef in it.

Location doesn't help with it, junk is junk. Stick with pizza, you can see the content in that and take your business elsewhere accordingly.

Vladimir79 wrote:

Kimppis wrote:Actually, that is exactly what it does. Big Mac Index is basically the same thing lol.

The admin of Russia Defence Forum doesn't get purchasing power parity. After 2014. No offence, but I find that hilarious...

Please tell me at what bank I can exchange my money for non-existant PPP money?  The PPP doesn't account for quality of the item purchased.  The Big Mac in Russian villages is not the same beef source as the more expensive one in Moscow.  The Russian tank quality varies in our own country, Armata is better than T-90 but costs as much as the Abrams.  Yasen is as good as the Virgina, and it also costs as much as the Virginia.  You get what you pay for.

PPP is the best way to see the Russian economy and purchasing power. Afterall....It's called Purchasing Power Parity.

But....If PPP accounts for shit, say goodbye to large numbers of Armatas, Su-57s, SSBNs, SSNs, Super Carriers, and all high end equipments.
They might get away with a few here and there but never all of that in sufficient  and effective numbers.
Afterall, Russia has the economy of 1 state of the USA, right?

CVN must cost as much as American one in order to be usable

Ford-class aircraft carrier unit cost: US$12.998 billion (let's round it up to 13)

13x3=39 billion

Russian defense budget: 61 billion

Another anti carrier rant from the zealot...

Why don't you mention the cheap option of mini carriers that are also very expensive but also actually rather useless because their aircraft don't have much more flight range that would make them more useful than Ka-31 helicopters...

Using your logic the F-35 VSTOL fighters will cost 1.5 trillion dollars in development and production costs so there is no way they can afford those either.

But then your original premise is flawed... saying a Russian CVN for air defence is going to cost the same as a US imperial star destroyer is just ignorant.

Also any decision on the numbers built will never be made within a one decade time period let alone have to be paid from one years defence budget... even if the decision was made right now and set in stone that three CVNs would be built the first one would not hit the water before 2028 and the third one is not going to even get wet before 2040, so why would all those bills need to be paid in next years budget?

Third, if you want to have any influence on the world stage you need a global presence and no cruiser no matter how powerful can do that on its own... things on the ground or in the water are too vulnerable to attack from the air.

Air power provides both early warning and the flexibility to return fire over great distances... those fighters might just be flying high altitude fighter cover for low flying subsonic attack missiles... the fighters shooting down any aircraft that take of to intercept the cruise missiles.

Unlike the US 100K ton super invasion and democracy destroyers, the Russians need air cover for their ships and subs... the land attack strike can be largely missile based... hypersonic attack missiles wont need an aircraft escort... and they wont cost what US aircraft carriers cost either.

You get what you pay for.

Well no you don't actually... american companies sell a dream which often turns in to a nightmare because they are so good at marketing... let that read lying.
What you are basically saying is right though... new stuff is technical and more expensive than simple and good enough, which is what they used to get.

I had a lecturer from Singapore who taught me about human computer interaction at university a few decades ago and he told me about a problem he took to the Americans. He was working with computers deployed to forward units and they needed a kill switch... a button they could push to format the hard drive so information would not be captured and used by the enemy against them. The American solution was a new keyboard with a big red switch cover and a kill switch that forced the hard drive to format itself automatically... but it was going to cost over $1,000 per keyboard for that solution. That was a ridiculous price at the time so he came up with his own solution... two pieces of duct tape placed on the computer box locating the exact position of the hard drive... every soldier had a 45 calibre pistol so two shots on the duct tape cross and no body is reading from that hard drive any time soon...

Different solutions, both effective and practical, but one is enormously expensive, but technological.

All of our new generation equipment that doesn't get purchased like Su-57, Armata and Yasen are as good as their Western counterparts, but they cost just as much. PPP doesn't make them cheaper and it hasn't convinced Putin to order them. As the state armaments plan gets more sophisticated in its equipment, so does the cost of that equipment which is why we have only purchased a fraction of it. That is why PPP is a useless metric, it does not account for quality of the item purchased. With the effect of force multipliers, quality of the military has a quantity of its own.

@PapaDragon as long as we keep wasting money on a littoral navy, there will never be a CVN. The reason it is not in the state armaments plan is because it is too expensive. PPP didn't save that either.

No, PPP does matter in this case because they purchase the equipment in Rubles, not USD.  But that also means the equipment prices adjust based upon the value of the exchange rate if the equipment is made in Russia.

As said, its called Purchasing Power Parity.

Example

Su-35 first purchase was an 2009 at close to 100B Rubles

Second Order was 2015 at about 100B Rubles.  2015.

Defense budget has stayed the same.

Contract though stated:

$2.5B in 2009 (USD)

$1.6B in 2015 (USD)

So yes, PPP does count because the jet went from:

~$50M per aircraft

to

~$30M per aircraft

both in USD.

And no, you do not "get what you pay for".  Enough of this stupid fallacy.

BMW ranks lower than Kia and Hyundai for quality:

https://www.jdpower.com/business/press-releases/2018-us-initial-quality-study-iqs
https://www.usatoday.com/story/money/cars/2018/06/20/hyundai-kia-and-genesis-top-critical-j-d-power-quality-survey/716842002/

Yet prices are that BMW is much higher.  Notice Mercedes vehicle wasn't mentioned?

Both BMW and Mercedes are leaps and bounds more expensive.  So where is the "you get what you pay for?"

Land Rover gets one of the worst ratings.  Guess how much a Landrover vehicle costs?  Cheapest is about $63,000 CAD.  Expensive is over $100,000 CAD.  Hyundai and Kia are around $20,000 CAD to $60,000 CAD.

M1A1 still doesn't have an auto loader.

Seriously, its been mentioned - anyone who says PPP doesn't matter regarding economics, has no idea what they are talking about.  It is really everyone vs 1.

Vladimir79 wrote:

Kimppis wrote:Actually, that is exactly what it does. Big Mac Index is basically the same thing lol.

The admin of Russia Defence Forum doesn't get purchasing power parity. After 2014. No offence, but I find that hilarious...

Please tell me at what bank I can exchange my money for non-existant PPP money?  The PPP doesn't account for quality of the item purchased.  The Big Mac in Russian villages is not the same beef source as the more expensive one in Moscow.  The Russian tank quality varies in our own country, Armata is better than T-90 but costs as much as the Abrams.  Yasen is as good as the Virgina, and it also costs as much as the Virginia.  You get what you pay for.

Also wrong.

Virginia submarine costs about $2.6B per sub
https://fas.org/sgp/crs/weapons/RL32418.pdf

Yasen is 47B Rubles for lead sub
https://www.kommersant.ru/doc/1812512
which translate to:
$721,993,931.00 United States Dollar

Armata Costs $3.7M Per tank

Abrams tank costs $8.92M per tank as of 2016.



Numbers mentioned here is 1999 cost gathered for M1:

https://www.globalsecurity.org/military/library/budget/fy1999/dot-e/army/99m1a2.html

Add in inflation, its much more.

And no, you cant "exchange it".  Comment like that shows lack of knowledge on this.  This is how much you can get for goods in RUBLES in RUSSIA.  Crying out loud, its the most basic knowledge for even basic economists.

Here:

KEY TAKEAWAYS
Purchasing power parity (PPP) is a popular metric used by macroeconomic analysts to compare economic productivity and standards of living between countries.

https://www.investopedia.com/updates/purchasing-power-parity-ppp/

I'm doing a Vann7 lol...

Thanks Mike, I was just going to point that out. Armata and Yasen aren't actually as expensive as their American counterparts, at all.

As another example, China's military spending should also be measured in PPP. It also shows well why nominal GDP is a flawed metric in general. So it's not only "economically weak South Korea/Texas/California/Spain, the Netherlands and Belgium combined" Russia.

Look up China's nominal GDP and the growth of its military spending in dollars. You'll notice that China's nominal GDP was stagnant in around 2014-15 due to devaluation of the yuan, i.e. China's "GDP" didn't grow AT ALL, when in reality the growth was close to 7% (in PPP)!

Similarly its dollar military budget has grown quite slowly since then. The budget is officially still not even at $200 billion, even though it would have been there YEARS AGO had the currency not devalued. Which, again, is totally irrelevant for the Chinese military.

The gap between China's nominal and PPP GDP is smaller than in Russia's case, but it's still close to 2x. So China probably spends close to $400 billion on the PLA. A great example is the Type 055 class. Arguably superior to any American surface combatant. But in dollars it's like 2-3 times cheaper than a Burke!

And no, Russian CVNs wouldn't be as expensive as the Ford-class (and yes, I get that it was supposed to be a joke... or something). But considering the problems with shipbuilding and Russia's priorities as a land power, acquiring more than 2, or at most 3, such vessels is of course totally out of the question, ever.

Oh, and btw, Russia's official military budget is actually around $45 billion. Not $60 billion. No joke. Describes reality very accurately, right? That $60 billion is SIPRI's own calculation. Similarly China's official military budget is roughly $170-180 billion, not $250 billion.

For fuck's sake SIPRI, just use PPP for Russia and China!! Shouldn't be that hard. That would make China VERY unhappy though, they still like to keep a low profile. Although even Russia's PR sometimes touts its modest dollar military budget as a good thing, even if in my opinion it just makes Russia look really weak, especially now when the relations with the US are at an all time low.

That being said, I guess Russia likes to keep a low profile too, at least when it comes to the economy, for example. (In my opinion that shouldn't be exaggerated, however. Russia is just not prioritizing economic growth until 2020-21.)

If we could base our military purchases on PPP, then the state armaments order would have been filled. As it sits it is not even 33% completed and had to be revised downwards. That is all the proof I need PPP doesn't mean jack.

Vladimir79 wrote:If we could base our military purchases on PPP, then the state armaments order would have been filled.  As it sits it is not even 33% completed and had to be revised downwards.  That is all the proof I need PPP doesn't mean jack.  

Alright, now you just keep going.

Proof.  Provide it.  Show me were it has been revised "down".

Budget for Procurement is exactly 19T Rubles.  Now tell me where they dropped it.  And yes, there will be things not fulfilled NOT because of money but because of the industries.  Maybe you should actually think before speaking?

If you do not reply to this with anything, then there is no point any of us having a conversation with you or take you seriously.

If you are trying to state that somehow the orders not being fulfilled by the companies because of... production but you somehow associate it at PPP really shows you grasp at straws and have zero understanding of this.  Which is sad for a forum admin on this topic.

You so far have made nothing but baseless claims that I destroyed you in with providing REAL proof and documentation. Its rather getting sad.

miketheterrible wrote:

Alright, now you just keep going.

Proof.  Provide it.  Show me were it has been revised "down".

The GPV 2027 is smaller than GPV 2020, if you need proof just look at at.

Budget for Procurement is exactly 19T Rubles.  Now tell me where they dropped it.  And yes, there will be things not fulfilled NOT because of money but because of the industries.  Maybe you should actually think before speaking?

Before sanctions the rouble used to be worth twice what it is now. The GPV was cut back for this because the value of what the currency can buy matters.

If you do not reply to this with anything, then there is no point any of us having a conversation with you or take you seriously.

The proof is the uncompleted GPV and the new lowered GPV. There is no other proof that matters. The results are the results.

If you are trying to state that somehow the orders not being fulfilled by the companies because of... production but you somehow associate it at PPP really shows you grasp at straws and have zero understanding of this.  Which is sad for a forum admin on this topic.

You so far have made nothing but baseless claims that I destroyed you in with providing REAL proof and documentation.  Its rather getting sad.

The sad thing is that people think PPP values matter. There is a currency called the rouble, it has a value and can be compared to every currency on the planet at the exchange. The PPP does not have a bank, it cannot be exchanged, it cannot buy anything much less new weapons.

Its the same budget.  19T for weapons and 4T was used for MiC.

This was posted multiple times on this thread.

Once again, you have no idea what PPP even means.  We have gone through this so many times and not only I but others provided data to you with evidence and you just ignore it.  I think we are done here.

Breakdown of Defense spending:

https://www.russiadefence.net/t24p400-military-budget-of-the-russian-federation#223789
https://bmpd.livejournal.com/3350920.html

Vladimir79 wrote:..................
@PapaDragon as long as we keep wasting money on a littoral navy, there will never be a CVN.  The reason it is not in the state armaments plan is because it is too expensive.  PPP didn't save that either.  

And if it's too expensive now it always will be.

If prices need to match dollar for dollar then there is no way Russia will ever be able to afford CVN or any carrier other than helicopter carrier.

Even tub like Kuznetzov is out of reach in that case.

Not that any of it would be a bad thing, carriers are obsolete deathtraps in modern environment. We here definitely couldn't have cared less about enemy Navy. Land based aviation was 90% of the problem.



During WW2 Germans also thought that big fancy ship like Bismark would be weapon of dominance and in the end it was taken out by Swordfish biplane.

Replace Bismark with CVN and Swordfish with missile and you have good overview of modern situation.

And before you say that no CVN has been sunk by missile just keep in mind than no battleship was sunk by cheap torpedo bomber either until British tried.

And once it happened battleships were over for good (alongside all the money wasted on them)

miketheterrible wrote:Its the same budget.  19T for weapons and 4T was used for MiC.

This was posted multiple times on this thread.

Once again, you have no idea what PPP even means.  We have gone through this so many times and not only I but others provided data to you with evidence and you just ignore it.  I think we are done here.

Not once was the collapse of the value of the rouble discussed until I mentioned it.  19t now was worth twice as much before sanctions.  The same budget devalued is just that... devalued.  Now we have a reduced order book to reflect that.  There are no orders for Su-57, no Armatas and trying to get out of Yasens because they are all too expensive.  PPP doesn't pay the workers or buy the materials, the value of the rouble does.