46 Percent More or 47 Percent Short?

On Sunday, Defense Minister Anatoliy Serdyukov apparently told Bloomberg that Russia plans to spend 19 trillion rubles on its State Armaments Program 2011-2020.  Recall not long ago Finance Minister Kudrin said a final number had been worked out with the Defense Ministry, but he didn’t release it.

Bloomberg let Serdyukov advertise the plan [repeat, plan — the money has to be allocated in every annual budget] to spend 19 trillion rubles over the next 10 years as 46 percent more than Kudrin’s original offer of 13 trillion.

Serdyukov didn’t describe 19 trillion as 47 percent short of what the uniformed military says it needs to rearm.  Recall Deputy Armaments Chief, General-Lieutenant Frolov told the press 36 trillion was required to rearm all services and branches fully.

In fairness, Serdyukov admitted:

“This is the minimum we need to equip our armed forces with modern weaponry.  We could ask for a bigger number, but we need to understand that the budget cannot afford such spending, so 19 trillion is a serious amount of money that will provide considerable orders for our defense industry.”

OK, good.  There are limits on what the military can have, and this shows civilian control over the armed forces.  But what about saying this “will provide considerable orders for our defense industry.”  Isn’t the point for the armed forces to get some, or most, of what they need from industry, not simply ensuring the OPK has defense orders?

The 19 trillion rubles is not trivial.  If (a very big if) . . . if this gets approved and executed every year, it’s almost 4 times the amount in GPV 2007-2015.  But we know the GPV is always rewritten before it’s completed, so it’s very difficult to say what has or hasn’t been, or can be accomplished with any given amount of funding.

With Russia borrowing abroad to plug deficits, it’s not surprising the amount wasn’t what the military wanted.  And the state of its economy over the next couple years will determine if it actually gets this planned amount for procurement.

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