Leadership: Red Army Real Estate Riot

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April 4,2008: The Russian armed forces is finally coming to grips with the fact that it will never return to the glory days of the Soviet Union (which dissolved in 1991). The military was called "the Red Army" back then. A sign of these changes is a huge property sale now underway. The military is auctioning off some very valuable property. The armed forces had acquired, during the Cold War, some 135,000 square kilometers of land (including 7,640 bases and 175,000 buildings). A lot of it is now prime real estate, much in demand in a booming economy. It's estimated that all this real estate is worth at least $12 billion. So much of it is being sold off to raise money for construction of housing for the million military personnel still in service.

Back during the Cold War, the armed forces had five times as many troops (over five million) and dibs on over ten percent of the national GNP (no one is sure of the exact amount, as the communists were not big fans of accountants and accurate financial reporting.) Currently, Russia is playing by West European rules when it comes to military spending, meaning no more than three percent of GDP is going to the military. With a $1.7 trillion dollar economy, growing at 7 percent a year, the generals can expect a lot more cash to work with. But most of this money is going to replace Cold War era weapons, which are now considered out-of-date.

 


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