Kalev Stoicescu, RKK/ICDS August 12, 2015
Most NATO members continue to reduce their defence budgets, in spite of Russia’s assertiveness, continued aggression against Ukraine and the risk of conflict spill over. Russia, pretending that the West is its worst enemy, is doing quite the opposite, having adopted in 2010 an ambitious programme to modernize at least 70% of the equipment of its armed forces by 20201.
The Kremlin keeps this fairly expensive modernization programme (22 trillion RUB or more than $400 billion over 10 years) mostly hidden away, offering occasional boastful comments, while President Putin seems absolutely determined to proceed with it, whatever it takes. Russia’s shrinking economy (GDP projected to decrease by at least 4.6% in 2015), low oil prices (about twice lower than Russia’s expected $100/bbl) and Western sanctions have induced Putin to accept a 10% cut in overall government expenses, including a similar reduction in Russia’s huge Ministry of Interior personnel (around 100,000 people will reportedly lose their jobs). Nevertheless, Putin seems adamantly opposed to diminishing defence expenditures (3.3 trillion RUB or $60 billion, an estimated 5.4% of Russia’s GDP), as well as pensions (which would obviously condemn millions of elderly Russians to face a new Holodomor). Astonishingly, the Russian Federal Treasury reported in April 2015 that defence expenditures actually reached 9% of Russia’s quarterly GDP, in what seems a desperate effort to speed up modernization well beyond the 30% marker (whatever that means), that was supposedly achieved by the end of 2014.
Russian defence contractors are making record profits, due to unprecedented sales ($13.2 billion in 2014) of air defence systems, tactical missiles, fixed and rotary wing aircraft among others, mostly to non-Western markets (Algeria, China, India, Venezuela etc.). Their business seems, for now, to go on successfully, despite the on-going conflict in Ukraine and overall economic pressure, and is contributing to Russia’s military modernization effort. However, most Western, but also quite a few Russian military observers seriously doubt that Russia will be able in the long run to afford military expenditures and modernization on such a scale.
First, while the Kremlin has largely depleted the Russian state reserves to stabilize the crumbling rouble, rising inflation coupled with a possible further drop in global oil prices will make the procurement of new weapons increasingly more expensive. Secondly, Western-imposed sanctions will continue to disrupt supply chains of Russian defence contractors, since not all components of weapon systems can be indigenously produced (at least not in the nearest future). Ukraine, a key supplier of different types of engines and other hardware to the Russian armed forces, has also terminated defence related exports to Russia, and 30% of these exports are considered unique and currently impossible to substitute via Russian production. Last but not least, the Russians seem to have a certain tradition, for better or worse, of making ambitious plans that actually do not match their resources and capabilities, and then announce great successes that do not match reality. It is worth recalling that a former Russian prime minister, Viktor Chernomyrdin, once said: “We wanted the best, but it turned out like always”. President Putin should not be underestimated, but the chances that Russia will be able to fulfil the goals set for 2020 (or even later) in a completely satisfactory manner, are rather meagre, considering the present situation and perspectives.
Still, why is the military modernization plan so important for Putin and the Russian elite that it has to be implemented at all costs, sacrificing almost everything else?
Without mentioning several military modernizations in Russia’s history following periods of weakness and decline, the current plan has several critical internal and external aspects. It keeps Russia’s huge defence industry running and hundreds of thousands of people employed. It also makes Russian military exports more competitive (mostly in non-Western markets) and provides highly needed hard currency. Besides, defence products are amongst Russia’s most lucrative export articles in financial and political terms. Most importantly, modernization does much to increase the morale, loyalty and combat readiness of the Russian armed forces.
On the other hand, a speedily modernized Russian armed forces adds up to the assertiveness and intransigence of the Kremlin, and will likely make the already grim new reality look even more sombre and perilous. Why would Russia produce – at such cost and with such effort – thousands of the deadliest tanks, hundreds of the most capable fighter aircraft and sophisticated missiles, dozens of next generation navy vessels and nuclear warheads, if not to use them? Would those advanced weapons be used only for self-defence purposes? Most likely not, given Russia’s already demonstrated readiness to use force against its neighbours and to threaten even NATO allies (with large snap-exercises, nuclear air-patrols and simulated nuclear strikes).
Therefore, the more Russia is successful in rapidly implementing the modernization plan of its armed forces, to which some Western allies readily offered their support (until EU sanctions were enforced), the more imminent the threat of Russian aggression in Europe – in Ukraine, in the Nordic-Baltic region and/or elsewhere. Significantly improved Russian naval and coastal defence assets, coupled with largely increased air and air defence, missile strike and heavy armour capabilities, will pose an immediate and much more serious threat (than at present) to the littoral countries around the Baltic Sea and the Black Sea. Furthermore, Russia seems to be busy developing unmatched weapons (e.g. the HGV mentioned above), in addition to simulating a Soviet-era-like nuclear global reach, in order to blackmail Western powers, including the US, and prevent them from countering possible Russian military actions in these regions that are critical to European defence and security.
In light of these considerations, Westerners cannot simply sit idle and keep their fingers crossed, hoping that Russia will ultimately lack the finances, technology and organizational skills to fulfil its military modernization plan. It seems that EU sanctions are a non-negligible factor in this equation. Russia has reportedly attempted to by-pass the sanctions, and acquire through the back door (e.g. Cyprus) critical Western military technology (e.g. US produced night vision cameras, good for T-14s). Any further discussion of the sanctions should also keep these aspects in mind. France has bravely set an excellent example by ultimately refusing to sell to Russia two Mistral-class amphibious assault ships (although Russia may have already copied these, and now enjoys the refund).
NATO members have to realize that Russia should not be allowed to jeopardise the military balance of Central, Eastern and Northern Europe to the point where the Kremlin feels tempted or literally obliged to use – as it has repeatedly done – the right of the strongest. NATO nations should deploy to the Baltic States, Poland and Romania much more significant forces, which Russia cannot regard as symbolic flags. Putinist Russia understands and respects military force, despises Western pacifism and abuses the (perceived) politically and militarily weak.
The author has made reference to certain data from:
Russia’s military modernization versus peace and stability in Europe