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We Are At War And Military Spending Must Take Priority
by James Dunnigan
June 25, 2015

Despite the sanctions and low oil prices Russia continues to maintain high military spending. This is hidden from the Russian public by increasing the size of the classified (“black”) budget. This has doubled since 2010 to $60 billion a year. Much of this is believed for defense related items. Thus Russia (with or without the black budget) has the third highest defense spending budget in the world (after the U.S. and China). But while the U.S. spends 18 percent of its government budget on defense, Russia is spending about a third (or more). As a percentage of GDP the Russian defense budget is close to five percent, versus less than two percent for China and less than four percent for the United States. Russia is still below previous peak defense spending. For example, World War II cost the U.S. over 33 percent of U.S. GDP. World War II cost Russia more than half its wartime GDP, and they continued spending over 20 percent of GDP during most of the Cold War. The U.S. was able to spend much less of the national wealth on military matters. As a percentage of GDP American military spending continues a decline that has been going on since the 1960s. Back then because of the $686 billion cost of the Vietnam War, defense spending was 10.7 percent of GDP. That went down to 5.9 percent of GDP in the 1970s and, despite a much heralded defense buildup in the 1980s, still declined in the 1980s (to 5.8 percent.) With the end of the Cold War, spending dropped sharply again in the 1990s, to 4.1 percent. For the first decade of the 21st century, defense spending has stayed below four percent of GDP. Russia still has domestic needs resulting from economic mismanagement during the Cold War. But now the Russian government is trying to convince Russians that they are at war again and military spending must take priority. The government also stresses that the damage done by sanctions and low oil prices is not as bad as earlier thought. Earlier in the year the government admitted that the military operations in Ukraine had cost Russia over $100 billion so far and would probably cost more before it is all over. It was also admitted that the sanctions made it very difficult to borrow abroad. Russians also know that over $150 billion in cash held by Russian businesses has left the country because the owners felt this money would be safer abroad. All this meant a continued contraction of GDP into 2016. But now the government believes the contraction for 2015 will be 2.7 percent instead of 3.8 percent and maybe no contraction at all in 2016. The opinion polls, many of them kept secret (as all were during the Cold War) indicate that the public is less convinced that Russia is “at war” with NATO or anyone else and more interested in more non-military spending.

Russia has other internal problems which add up to a resumption in population shrinkage. For centuries Russia (rebranded as the Soviet Union in the early 1920s) was considered a threat to its neighbors in part because of its larger population. But since the Soviet Union fell apart in 1991 (and half the population broke away to form 14 new nations) the remaining Russian population has been in decline. Twenty years after the Soviet Union collapsed, the Russian population implosion was getting worse. While in the 1990s the population was shrinking at a rate of .1 percent a year, in the first decade of the 21st century that increased to .2 percent a year. This was because the non-Slav Russians are having fewer children, just as the Slavs have been doing (or, rather, not doing) for decades. The Russian population had declined three percent since 1989, from 147 to 142.9 million. The proportion of the population that is ethnic Russian (Slav) declined from 81.5 percent to 77 percent in that same period. The Russian slide could have been worse had it not been for the fact that millions of ethnic Russians in the 14 new states felt unwelcome with government controlled by the locals, not Russians in far off Moscow. Often the locals wanted the ethnic locals in their midst gone and Russia made it easy for ethnic Russians to return to the motherland. This prevented the Russian population decline from being closer to ten percent. Until the recent invasion of Ukraine, sanctions and lower oil prices, the Russian birth rate was growing again. That has stopped since the invasion of Ukraine and more Russians are seeking to emigrate as are many foreigners working in Russia. The extent of this can be seen in Moscow where rents for high-end (“Western”) apartments (for wealthy Russians and foreign professionals) have declined over 40 percent in the last year.

Since the Soviet Union fell apart many Russian neighbors have feared a revival of the traditional Russian aggression. Thus in 2004 Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia joined NATO, putting parts of the former Soviet Union (Estonia, Latvia and Lithuania) within NATO and on Russia’s border. Many Russians do not like this, for Russian policy since 1945 has been to establish a "buffer" of subservient countries between Russian territory and Germany and the rest of Western Europe. This attitude is obsolete in a practical sense but old habits die hard. The Russian government said it was willing to work with NATO in areas of mutual benefit but that did not work out. Now there is a state of undeclared war between Russia and NATO. These new NATO members are more worried about the renewed Russian aggression than the original NATO members (the U.S. and Western Europe). The nations of “east NATO” are asking for more presence by troops from “west NATO.” Some of the eastern members (especially Poland) have called for the permanent basing of U.S. troops on their territory. Some of the smaller states (like the Baltic States of Estonia, Latvia, and Lithuania) believe Russia could overrun them in two days and senior NATO military commanders openly agree. Russia considers such talk more evidence of NATO aggression against Russia.

The nervousness over Russian aggression is spreading west in part because of increased Russian military activity in West Europe. It’s not just the sharp increase in Russian bombers and recon aircraft over the Baltic, North Sea and Atlantic, but increasing activity of Russian submarines off the coasts of Baltic States and those bordering the North Sea and Atlantic. While Russia admits the aerial activity it is quiet about the submarine operations.

The UN believes that over 6,400 people have died in eastern Ukraine (Donbas) since early 2014 and more than 16,000 wounded. More than a million people have been driven from their homes. Worse, the UN openly agrees with the growing evidence that Russia is responsible for all this, not a spontaneous uprising by disaffected Ukrainians. Russia, as a founding member, has a lot of clout in the UN but not enough to reverse the UN accusations regarding Ukraine. The UN blames Russia and the Russian backed rebels for continued violations of ceasefire agreements and firing on civilians. NATO analysts note a buildup of Russian forces on the eastern borders of Ukraine and other indications that the February ceasefire is about to be broken (as the one before it was) by another major attack in Donbas, led by Russian troops who, officially, are not there. Violations of the ceasefire are increasing, another indicator of a new offensive.

Over a thousand Russian soldiers have been killed or wounded in Donbas during the last year and the Russian government is finding it impossible to manage the news about how those soldiers ended up in combat In late May the government enacted a new law that made it a crime to discuss or reveal any information about Russian military deaths in peacetime. This is mainly in response to the continued political problems with the Russian personnel losses in Ukraine and the fact that many of the dead are conscripts. Even before the Cold War ended in 1991 conscription was becoming more unpopular in Russia. That dissatisfaction grew rapidly after 1991. One government response to that was the reduction of conscript service to twelve months and a law forbidding sending conscripts into combat during peacetime. In response to this media mess the Russian military began carefully screening who it sent into Ukraine to eliminate those who might change their minds. This means more conscripts from less affluent parts of Russia (Siberia and the Far East), to whom the extra pay means more and the danger is not as daunting, are selected. The rebel controlled areas of Donbas are not heavily policed and many of the civilians there don’t want to be ruled by Russia but keep their mouths shut and their cell phone cameras active. With the addition of commercial satellite photos and military grade satellite photos released by the United States it has been possible to identify the extent of the Russian effort. Russia still pushes the official line that they have no troops in Ukraine and call any evidence to the contrary another example of how clever and insidious the NATO plot against Russia is. So far this is gaining some traction inside Russia but not so much anywhere else.

As much as Russia tries to hide the presence of Russian troops in the Donbas those troops have become more and more visible to the general public. Some commanders believed that if conscripts volunteered (and signed a document attesting to that) they could be sent into Donbas. Apparently some conscripts, caught up in the nationalist “NATO is conspiring against us” propaganda the government has been pumping out with increasing frequency and intensity, really did sign the document willingly. They were also encouraged by the much higher pay offered for those serving in a combat zone. But as it always happens in the military, some volunteers were acting under duress or were deceived when told signing the contract was a formality to justify the extra money for some “special training exercises inside Russia”. Some of these volunteers later figured out where they really were and deserted inside Ukraine and have been sharing details of their experiences with Ukrainians and others outside Russia. This sort of thing is officially denied and denounced by the Russian government via the government controlled mass media. But the Internet is another thing and there are a growing number of Russians who call out their government for lying about what is going on in Ukraine and for forcing conscripts into combat zones. Some of those conscripts have been sent back to their families in sealed coffins with the explanation that it was because of a training accident. But soldiers who served with some of the dead soldiers, especially those who were also conscripts, are providing more accurate and embarrassing (to the Russian government) versions of what went on.

On another front Russia and Iran are both reconsidering their support for the Assad government in Syria. This is part of a new Russian-Iranian call for a peaceful, political settlement of the Syrian civil war. Considering the ISIL (Islamic State in Iraq and the Levant) attitude towards the rest of the world, that is not likely. Russia and Iran are both having financial problems (because of low oil prices) at home and support for the Assads is very unpopular. Russia and Iran now appear willing to take the political hit at home for abandoning the Assads because less cash for the Assads means more money spent on the needs of Russian and Iranian civilians. Already Russia has pulled over a hundred technical advisors out of Syria.



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