Military budget of the Russian Federation

33%!?!? It has mostly been fulfilled! And I repeat: it's not only Russia, China also proves that PPP is the correct indicator here.

If PPP "doesn't mean jack," do you realize that the Russian military would have basically collapsed in 2014!?!? Literally. (In fact, the whole economy and living standards would've collapsed.)

So apparently procurement grinded to a halt after the ruble devalution. There have been no additional deliveries of S-400s, Su-30/34/35s, or even upgraded T-72s after the late 2014. Nothing. No increase in the number of contract soldiers either. The Syria operation didn't happen. It was the return of 2007, clearly.

The idea that there is some intrinsic market price for tanks and submarines is absurd. These are not free markets.

Definition of a free market: the limit of a large number of producers making almost zero profit. This highly competitive
regime is what gives the lowest price and also the real free market price. In the real world we have what is know as
oligopolies and even monopolies. Both are not, by definition, free markets. They are controlled price markets where
through collusion or, for monopolies, total domination the price is set to maximize the profit of the producers. The MSM
spreads the BS that oligopolies are free markets. And clearly some believe this rubbish.

The US military industrial complex is an oligopoly that is worse than the automobile oligopoly. Car and truck makers
actually have to sell their product without government assistance or coercion. So there is some degree of competition.
But military contractors have only one consumer, the US government. Vassals like Saudi Arabia don't count since sales
to these other consumers are controlled by the US government. It sounds as if the US government can dictate to the
MIC oligopoly to get the best price. But the opposite is true due to corruption. Politicians do not haggle down prices.
They create phony bidding processes that allow Lockheed-Martin et al. to game the system. At the end of the day
the US government consumer is totally spineless and defaults to the vast pool of tax revenues as an infinite piggy bank
to pay whatever prices that the MIC oligopoly wants. In fact, the rot is even worse since politicians have a clear conflict
of interest since they get to serve on the boards of directors of these oligopolies.

In contrast to the US case, the Russian government is a majority owner of most of the Russian MIC. And at the same
time it is much more aggressive in haggling prices with various producers that are dreaming of running a US style racket.
So Russian MIC prices are lower because they reflect a fairer exchange not because Russian equipment is junk.

Using the grossly inflated and corrupt US military hardware prices as some sort of reference is simply epic ignorance
or dishonest.

As for PPP, posters have been demonstrating how the exchange rate globally rescales the Russian prices and GDP only
when converting to US dollars. In rubles there are no dramatic jumps up or down when the exchange rate changes.
It is absurd to think that the exchange rate percolates instantaneously through the whole GDP. The only impact on the
GDP are import prices and Russia is near the bottom of the list in terms of imports. Russia has a diversified GDP and
does not need imports like a banana republic. That is why import substitution has been such a spectacular success.
If it was so easy to import substitute, then 3rd world countries would have reached 1st world status decades ago.

miketheterrible wrote:...........

........

This image says it all

If price in dollars is directly proportionate to performance then that Japanese tank would have dominated over Abrams... which is total BS since Abrams would rip through that tin can like through wet paper bag


Also, Merkava seems to be quite affordable and with balanced features, I think our guys should consider switching

PapaDragon wrote:
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.

If the value of the rouble can get to pre-sanction levels, it still can be.  The only question is, how do we get the value up under a sanctions regime.  The easiest answer is higher energy prices.  The best way to do that is to get the US to stop fracking.  A Green minded Democratic president is the answer.

EDIT: the new armaments program is cheaper, because there's less focus on the military and no need procure a similar amount of new equipment. Maintanence costs have probably increased and will keep increasing as well. Inflation, more professionals, higher salaries and pensions etc, more focus on living conditions, etc.

Russia currently has huge budget and trade surpluses. Military's GDP share is also now smaller than it was a few years ago, so again: less focus on it.

Not to mention that the Russian government is extremely conservative in their economic planning. I mentioned the surpluses. It's very likely that the spending will turn out to be quite a bit higher than planned by 2027.

PPP wouldn't matter if Russian wages and other expenses were as high in dollars as they are in the US/West. PPP wouldn't matter if Russia imported everything, in this case the weapon systems, from abroad.

This is amazing...

Funnily enough, countries like Iran, and even Ukraine and Venezuela prove the validity of PPP.

kvs wrote:The idea that there is some intrinsic market price for tanks and submarines is absurd.   These are not free markets.

The workers and engineers building these systems are in a workforce that competes for wages. They are not based in PPP but roubles that are competing with other industries in and outside of the country. The materials extracted to build these systems have a market cost, they do not get reduced in price just because the state wishes it was so. Things are not made in PPP lala land.

BTW, here is another example of distorted prices. Consider the 10% inflation in the US health care industry. The economy wide inflation is under 2%.
It is not as if the health care industry is 1) growing in real terms and 2) appeared on the scene a few years ago. The issue is that the US health care industry
is like the US MIC. It is an oligopoly with one real consumer. The way that this industry is arranged is that it is a collection of state-level markets. There is no
national-level market. So we have the same one-consumer racket where every state government bends over and gives the HMOs, hospitals and suppliers whatever
they demand. The racket is maintained by the false narrative that this trapped market is a "free" market. It is actually closer to a monopoly market.

The US health care consumer has the false illusion of choice, but insurance is what pays the bills if the consumer is lucky enough to have it. And the
insurance is covering prices not set by many consumers, but by the state-level government. There are national health-care assistance plans in the USA,
but these do not create competition for consumers and are enabling grossly inflated prices to be "afforded" by the majority of US citizens. A real health
care market would have tens of millions of US consumers paying out of their own pockets without any insurance. Think about it, do you buy cars, houses,
appliances via insurance? No you don't. Companies would then have to deal with the real purchasing capacity of consumers and the prices would have
to be lower even for oligopoly conditions. You can't make a pauper pay for a mansion.

Well, you certainly aren't an economist. Because yeah, a strong ruble would be soooo good for Russia. That is clearly an objective of the Russian government as well. They are obviously desperate for it...  

Btw, "a green minded Democratic president" -> a far-left SJW, I assume? Realistically, that is. Do you realize that those people absolutely despise Russia, because of Trump and because of Western propaganda about Russia's "gay holocaust," the Dark Lord Putler and general "ultra-conservatism". That means more sanctions!

If you haven't noticed, nowadays the rouble is much less linked to the price of oil, which has considerably increased, but the ruble has not strengthened. Also Russia's budget is based on an oil price of $40 per barrel, the rest goes to reserves.

Kimppis wrote:EDIT: the new armaments program is cheaper, because there's less focus on the military and no need procure a similar amount of new equipment. Maintanence costs have probably increased and will keep increasing as well. Inflation, more professionals, higher salaries and pensions etc, more focus on living conditions, etc.

Russia currently has huge budget and trade surpluses. Military's GDP share is also now smaller than it was a few years ago, so again: less focus on it.

Not to mention that the Russian government is extremely conservative in their economic planning. I mentioned the surpluses. It's very likely that the spending will turn out to be quite a bit higher than planned by 2027.

PPP wouldn't matter if Russian wages and other expenses were as high in dollars as they are in the US/West. PPP wouldn't matter if Russia imported everything, in this case the weapon systems, from abroad.

This is amazing...  

Funnily enough, countries like Iran, and even Ukraine and Venezuela prove the validity of PPP.

There is no rational discussion when one of the parties engages in total denial (ad hoc at that) of basic economics. We have a fanboi level discussion here. The Abrams does not
have reactive armour, is so heavy that it breaks its treads and overloads the logistics chain due to its fuel demand, but since it costs more in US dollars, then it must be better. The onus is on the maker of this infantile claim to prove it.

Vladimir79 wrote:

kvs wrote:The idea that there is some intrinsic market price for tanks and submarines is absurd.   These are not free markets.

The workers and engineers building these systems are in a workforce that competes for wages.  They are not based in PPP but roubles that are competing with other industries in and outside of the country.  The materials extracted to build these systems have a market cost, they do not get reduced in price just because the state wishes it was so.  Things are not made in PPP lala land.

Or pretext to help yeminis against evil saudi arabia and "missile cruise" them and by "them" I mean their oil production. Just like YS and EU do.

The best for Russia, Americans and the world would be Jill Stein that I agree.
I hope Soigu can convince Siluanov of the importance of the money invested on defense, but the finance ministers can be very very obsessed.

kvs wrote:

Kimppis wrote:EDIT: the new armaments program is cheaper, because there's less focus on the military and no need procure a similar amount of new equipment. Maintanence costs have probably increased and will keep increasing as well. Inflation, more professionals, higher salaries and pensions etc, more focus on living conditions, etc.

Russia currently has huge budget and trade surpluses. Military's GDP share is also now smaller than it was a few years ago, so again: less focus on it.

Not to mention that the Russian government is extremely conservative in their economic planning. I mentioned the surpluses. It's very likely that the spending will turn out to be quite a bit higher than planned by 2027.

PPP wouldn't matter if Russian wages and other expenses were as high in dollars as they are in the US/West. PPP wouldn't matter if Russia imported everything, in this case the weapon systems, from abroad.

This is amazing...  

Funnily enough, countries like Iran, and even Ukraine and Venezuela prove the validity of PPP.

There is no rational discussion when one of the parties engages in total denial (ad hoc at that) of basic economics.    We have a fanboi level discussion here.   The Abrams does not
have reactive armour, is so heavy that it breaks its treads and overloads the logistics chain due to its fuel demand, but since it costs more in US dollars, then it must be better.   The onus is on the maker of this infantile claim to prove it.  

Yes, especially when one mentions market price. Well, Market price in Russia is in Rubles (Not Roubles). Prices are in Rubles. And in the end, steel in Russia is priced in Rubles. Same with Aluminum. Nothing to do with USD unless for export or import and even that is if they agree on the final price and currency (these days). I have already used the example of price of Su-35 when Ruble was 35/1USD vs 65/1USD and how they are pretty much spot on being the same damn price. But oh no, apparently that has nothing to do with anything even though it goes into counter what dear leader says simply because he thinks prices in Russia are in USD, not Rubles.

Vladimir79 wrote:...If the value of the rouble can get to pre-sanction levels, it still can be. The only question is, how do we get the value up under a sanctions regime. The easiest answer is higher energy prices. The best way to do that is to get the US to stop fracking. A Green minded Democratic president is the answer.

Even before sanctions Russians were nowhere near to being able​ to afford a single 13$ billion CVN let alone three.

Reason Russia still exists after 2014 is lower ruble value with floating exchange rate and increasingly detached and less dependent economy.

Russia wasn't even able to produce enough food to feed itself several years ago when they were Arab style petro-state and you postulate that they would be able to play around with CVNs? Remember USSR?

And how on Earth does fracking in USA affect anything? It's a blip on the radar in overall setup. If they don't do it someone else will, rules of free market. And in what parallel universe do Americans do something as stupid as not fracking? Might as well start burning money while they are at it.

As for "Green minded Democratic president" in the White House, reason why Russians lived this long is because voters/fate/God/universe/karma prevented one from taking office in 2016.

Democrats work for Europeans and they have their marching orders. Don't think for a second they will hesitate to pull the trigger on Russia the moment they are given the chance. Europeans don't forget, don't get distracted and don't trust BS about friendship unlike Russians.

Why not Earth would democrats do anything for Russians?

And hypothetically if Europe ceases to exist and democrats do force USA to accept economic loss in order to drive gas prices higher then why would Russia even need CVNs in that case?
Excuse for wasting money on CVNs disappears if Europe and USA stop being hostile.

Kimppis wrote:Well, you certainly aren't an economist. Because yeah, a strong ruble would be soooo good for Russia. That is clearly an objective of the Russian government as well. They are obviously desperate for it...  

Btw, "a green minded Democratic president" -> a far-left SJW, I assume? Realistically, that is. Do you realize that those people absolutely despise Russia, because of Trump and because of Western propaganda about Russia's "gay holocaust," the Dark Lord Putler and general "ultra-conservatism". That means more sanctions!

If you haven't noticed, nowadays the rouble is much less linked to the price of oil, which has considerably increased, but the ruble has not strengthened. Also Russia's budget is based on an oil price of $40 per barrel, the rest goes to reserves.

k.


I think you would find on closer research there are 5 cornerstones to the Russian Economic Plan:

- limit US$ use in and impact on the Russian economy especially in trade.
- keep inflation under control along with government spending and national debt.
- keep the ruble trading around 70P = 1 US$. This stimulates foreign purchase of Russian goods. The Canadians use this with the US. They try to keep their dollar around .75$US.
- use a conservative oil price for budget purposes while actively working with OPEC and other producers to maintain a higher price.
- replace the US$ from their national account reserves and use other foreign currencies plus gold.

Here is another example of distorted pricing related to health care and other industries. I know a family with chronically sick child. They need ongoing purchasing of
basic level medical products such as gauzzes and syringes. If they buy them from local Canadian hospitals they pay 300% the price of the exact same products
from suppliers. This sort of gouging is considered normal. Does anyone think that lowest possible price is charged for boutique items such as tanks? And
they are boutique since the volume of these products is very small.

The US had to resort to command economy tactics during WWII to control production prices of military products (ships, aircraft, tanks, trucks, etc.) in spite of much
larger production volume compared to peace time. Yet we are supposed to believe that only "free market" prices apply to these products.

I'll take a project 636.3 submarine over a Soryu sub at any time. The myth of "you get what you pay for" is really something. For example, it is a common
occurrence when church groups or boy scouts try to raise money by selling chocolate or cookies that they find that it is harder to sell the same product if
the price is too low. That's right, jacking up the prices increases the volume of sales without any quality change. And if you think that this is a pathology
of this small market segment, then you are dead wrong. A developer trying to sell a new housing subdivision north of Toronto about 30 years ago had to jack
up the prices since the homes were not selling. This demonstrates how pervasive and brain-rotting this moronic myth is. And it is the MSM that brainwashes
the gullible proles with this BS. I routinely hear this myth spouted by journalists.

Franco, I'm aware of those things, that was a simplification. In reality things are of course a little more complicated.

Russia was also never an Arab style petro-state, that was mostly just propaganda, but it's absolutely true that the oil price collapse and sanctions had a positive impact in many ways.

If PPP were "fake", Russia would have simply totally collapsed after 2015. It's that simple.

Why didn't inflation increase even more? Why didn't GDP (the real one) decline more than 3%? How have indicators like life expectancy, homicide rate and infant mortality kept improving since then? You could go on and on... but there's no point.

Armored vehicles prices - https://altyn73.livejournal.com/1386477.html

BMD-4M - 117 million rubles. BMP-3M around 130 million, BTR-MDM - 55 mln. And so on.

Russia plans to increase defence spending in the 3 year period of 2020-2022...roughly from 1.7 trillion rubles to 1.9 trillion (about 6%) assuming the proposed budget passes...it would be the first increase since the cuts of the last few years

https://vpk.name/news/329263_v_rossii_planiruetsya_uvelichit_oboronnyie_rashodyi.html

Russia’s national defense budget to total $154 bln through 2022

The share of expenditures on ‘National defense’ will stand at 2.4% of GDP next year

MOSCOW, October 1. /TASS/. Federal budget expenditures on Russia’s national defense will total around 10 trillion rubles ($154.1 bln), according to the files to the draft budget for 2020 and the planned period of 2021-2022.

"Budgetary provisions for ‘National defense’ will total 3.1 trillion rubles ($47.7 bln) in 2020, 3.24 trillion rubles ($50 bln) in 2021, and 3.3 trillion rubles ($51.3 bln) in 2022. The share of expenditures on ‘National defense’ will stand at 2.4% of GDP in 2020, 2.7% of GDP in 2021, and 2.6% of GDP in 2022," the document said.

https://tass.com/defense/1080646

Good article.

WHY RUSSIAN MILITARY EXPENDITURE IS MUCH HIGHER THAN COMMONLY UNDERSTOOD (AS IS CHINA’S)

https://warontherocks.com/2019/12/why-russian-military-expenditure-is-much-higher-than-commonly-understood-as-is-chinas/

AHahahaha... what a load of bollocks... this is the US trying to say... hey we spend more than everyone else on the planet together added up on "defence", but it is OK because it is because you are measuring it wrong... if you use these measurements then other countries actually spend a similar amount... in fact if you use these measurements they actually spend more than we do on our military so we need to spend more right?

Of course America is spending more... they are interfering in every country on the planet and have forward deployed troops and listening stations in most countries on the planet... it costs a lot to dominate every country on the planet with force, and just maintaining 10 carrier groups... not to mention the Marine Corp carriers too... is very very expensive... and countries don't just bomb themselves you know... we gots freedom fighters and lovers of real democracy to kill... sorry... we have terrorists and commies to kill...

Notice not one mention of corruption for the US military expenditure... Boeing alone spends millions on buying politicians every election cycle... politicians on both sides of the US...

It's not about that. It's about Russia having a 5th or 6th budget in the world, despite getting 5 times more new military equipment than those countries ahead of it. Dollar should have nothing to do with measuring Russian spending on defense, and you should use PPP instead.

MOSCOW, September 17. /TASS/. Russia plans to allocate 3.1 trillion rubles for national defense in 2021, 3.2 trillion rubles in 2022, and 3.1 trillion rubles in 2023. This is stated in the explanatory note to the draft budget for this period.

"Budget allocations under the section "national defense" in 2021 will amount to 3,113 trillion rubles, in 2022 - 3,231 trillion rubles and in 2023-3,257 trillion rubles, " the document says.

It also notes that the budget allocations provided for in the draft law have been reduced by about 119.38 billion rubles in 2021, by about 87.39 billion rubles in 2022, and by about 25.76 billion rubles in 2023 compared to the amounts provided for in the draft law for 2022.

The change in spending in the field of "national defense" was influenced by an increase in budget allocations for the current maintenance of the Russian Armed forces (in 2021 by about 5.14 billion rubles, in 2022 by about 8.59 billion rubles and in 2023 by about 35.73 billion rubles), as well as the clarification of the average annual exchange rate of the US dollar.

Expenses for the development of the Black Sea Fleet base system (BSF) in 2022-2023 will amount to more than 4.5 billion rubles, the explanatory note says.

According to the document, it is planned to allocate funds "for activities previously implemented under the Federal target program "Creation of the black sea fleet basing system on the territory of the Russian Federation in 2005-2021", in 2022-2023 in the amount of 2,285,9 million rubles annually".

As of may 2020, the black sea fleet consists of about 280 ships and vessels (55 of them warships), the personnel consists of at least 25 thousand military personnel.

The main base of the fleet is Sevastopol, and there are also bases in Feodosia and Donuzlav (Republic of Crimea) and Novorossiysk (Krasnodar territory).

National security and law enforcement work

More than 7.4 trillion rubles will be allocated in 2021-2023 for national security and law enforcement, according to materials for the draft budget.

"Budget allocations under the section" national security and law enforcement " in 2021 will amount to 2,468,030.4 million rubles, in 2022 - 2,429,923. 8 million rubles and in 2023 - 2,551,532. 9 million rubles," the document says.

In particular, the budget will be increased for the salaries of employees of the Ministry of Internal Affairs and Rosgardie, the development of information systems of the Ministry of internal Affairs, Rosgardie and FSO, as well as systems for controlling the turnover of weapons and managing security services based on domestic technologies.

Funds will also be allocated to the transfer of civil servants FSSP of Russia to another service, for payment of medical staff of UIS, ensuring the passports of suspects and accused persons in remand centres, the salaries of employees of the Ministry of justice.

In connection with the judicial reform, more than 1 billion rubles will be allocated to ensure the participation of prosecutors in sessions of cassation and appeal courts of General jurisdiction in 2021-2022. In addition, the UK will receive an additional 150 million rubles for the construction and reconstruction of administrative buildings. More than 4.7 billion rubles will also be allocated for the implementation of FSB activities in the field of information technology in 2021-2023. The Ministry of emergency situations will provide an additional 6.6 billion rubles for salaries (in 2021-2022) and weapons (in 2021).

NOTE: the FSSP is the Federal Bailiff Service which reports to the Ministry of Justice. Not sure exactly what is happening with them although they have always had corruption and political control problems.