WAR IN UKRAINE: RUSSIAN COST GETS OUT OF CONTROL
Some experts believe wars are won because of strategy and
tactics, while others believe it is supply and logistics that matter. However,
the most likely element of winning wars is the amount of money a country is
willing to spend, something Russia has caught onto.
According to Reuters, the doubling of Russia’s defense
budget will work out to account for about one-third of all public spending by
Moscow in 2023, a situation which the news agency said revealed the spiraling
costs of fighting in Ukraine being placed on Russia.
Reuters obtained government documents that showed in the
first half of 2023 alone, the country had spent 12% more on its defense budget
than initially planned, and defense spending for the first six months of the
year amounted to 5.59 trillion rubles.
The Moscow Times noted Russia stopped sharing detailed
information on its budgetary spending in June, which has cast the Kremlin’s
financial situation “deeper into secrecy.” However, there are some things we
can learn from previous years of spending on defense.
Military spending prior to the invasion of Ukraine amounted
to between 3 and 3.5 trillion rubles annually from 2019 to 2021, according to
analysis from the American-based think tank The Wilson Center, which put
Russian military spending at $44.1 to $48.5 billion.
These costs equaled between 14% to 16.5% of the Kremlin’s
federal budget at the time. They only represented roughly three to four percent
of Russia’s Gross Domestic Product (GDP), an amount Moscow kept consistent in
the leadup to the invasion of Ukraine.
“The Kremlin kept its plan to launch a war against Ukraine
secret,” The Wilson Center’s Boris Grozovski wrote on September 7th.
“Therefore, the amount of money allocated for the army in the 2022 budget law did
not surpass the long-established trend.”
Russia’s 2022 budget did not "betray" its invasion
plans, according to Grozovski, but things began to change after the war was
launched, and by the summer and fall, the Russian Ministry of Finance was
forced to adapt to the country’s changing economic situation.
Costs associated with the war exceeded the Kremlin’s budget
by 57.4%, and the issues only got worse for Russia. By the end of 2022,
Moscow’s military expenditure cost reached 81.7 billion dollars—an increase of
76% on its 2019-2021 budget averages.
“Toward the end of 2022, the government realized that it was
in this for the long haul,” Grozovski wrote, adding: “Military spending,
including funding for the military-industrial complex, needed a significant
boost.”
Russian arms factories began hiring more workers and
increased their shifts from a two to three-a-day working schedule, and the
federal government stopped publishing budget statistics that included a
breakdown of expenses in order to hide its military spending.
What we know about Russia’s military spending in 2023 comes
from the leaked document that was shared with Reuters in August, and as shown
previously, Russia has taken on a massive financial burden in order to win the
war in Ukraine.’
After analyzing the document, Reuters estimated that Russia
would shell out upwards of 9.7 trillion rubles for its annual defense spending,
a number that again represents about one-third of the country’s total spending
of 29.05 trillion rubles.
This would make Russia’s current spending on defense the
highest it has been in over a decade, according to Reuters, which noted that
between 2011 and 2021, Moscow spent between 13.9% and 23% of its defense.
“The extra spending, combined with the effects of Western
sanctions and a collapse in energy sales to Europe, have pushed Russia’s budget
into a $28 billion deficit in the first half of 2023,” The Moscow Times noted
after analyzing the August report from Reuters.
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