HomeNewsOpinionDoes money win the war — Inferences from the Russian push in defence expenditure

Does money win the war — Inferences from the Russian push in defence expenditure

In uncertain war atmospherics, overt emphasis on defence spending is more about politics and marketing than an effective tool in war economy management

August 10, 2023 / 09:00 IST
Story continues below Advertisement
russia military
Russia has nearly doubled its defence expenditure target to more than $102 billion in the current year. (Source: AFP/File image)

As the Russia-Ukraine war continues unabated, both countries are exploring ways and means to gain an upper hand. The latest is the so-called quantum jump in Russia’s defence expenditure (defex). According to a recent Reuters report, Russia has nearly doubled its defex target to more than $102 billion in the current year. The announcement is not surprising since Russia is on a spending spree to finance its war activities and has apparently spent the allocated budget by June this year. However, it is debatable if a quantum jump alone would enable Russia to gain a decisive advantage over Ukraine.

War-led Spending

Story continues below Advertisement

According to the 2023 SIPRI Factsheet on Trends in Military Expenditure, Russia emerged as the third largest spender (from fifth in 2021) after the US and China, spending more than $86 billion and accounting for 4.1 percent of its GDP in 2022. SIPRI data, therefore, is at variance with Reuter’s claim, since there is an increase of only 20 percent over last year’s figures. Hitherto, Russia is an autocratic, militarised state with overgrown military establishments, perpetual warfare, high-level military mobilisation and a consequential larger share for the military in resource allocation. For example, in 2022, only seven countries allocated more defex as a proportion of GDP than Russia. Further, Russia continues to monetise some portions of oil exports and, therefore, would most likely sustain the revenue model for its war activities and allocate even higher portions of GDP to defence in future.

However, Ukraine has also pushed up its defex. It moved from the 36th position in 2021 to the 11th in 2022, spending $44 billion. This was a 640 percent increase over its 2021 defex figures. A balance of fortunes would possibly emerge only if there is a huge asymmetry between the two countries. That is not happening since Ukraine was also able to raise a significant amount through military assistance and loans from NATO countries. The US, for example, has committed more than $40 billion in security assistance alone since February 2022. Another $35 billion stands committed for humanitarian and financial aid. A matching contribution has also been committed by the European Union institutions and non-US NATO members. Therefore, Russian defex increases are meaningless.