One Way Russia has ‘Recovered’ from Pandemic: Kremlin Plans Again to Spend More on Military than on the Economy

Paul Goble

            Staunton, Oct 3 – According to an analysis of the Russian government’s proposal for the budget next year, Moscow will again spend more on the military than on the economy, a real return to the pre-pandemic situation albeit not the inherently optimistic one Vladimir Putin has sought to project in speaking about recovery.

            According to figures in the draft budget, Moscow plans to spend more than 3.5 trillion rubles (50 billion US dollars) on defense, approximately 15 percent of the total annual budget. At the same time, it is allocating less than that to the economy (rbc.ru/economics/03/10/2021/61571a279a79478e0bc0b011).

            Last year, for the first time since 2014 when Putin invaded Ukraine and annexed Crimea, the Russian government spent less on defense than on the economy; but now that anomaly has been corrected, RBC analysts say.  At the same time, the new budget calls for spending 5.8 trillion rubles (80 billion US dollars) on the social sphere.

            With regard to the economy, according to the new budget, “more than half” of the total allocation will involve subsidies to banks given the credit they have extended to agricultural producers and to small and mid-sized companies suffering from the pandemic. Almost a third of the budget will go for highway construction.

            These numbers and percentages are from the public declaration of the government, but as is well known, “spending on defense is classified. Consequently, the actual amounts going to the military and the defense sector more generally are far higher; but even the public figures indicate the direction Putin wants to take the country.