Translated material
Military budget.
When determining a country's national defense expenditures, it is common practice to compare this figure to its gross domestic product (GDP) so that the share of military expenditures can be seen and the resulting figures can be compared with similar results of other countries. Let us present data for 1999 on military expenditures and the size of the Armed Forces of Russia and the leading world powers with the largest military potential (from the latest published information).
Table 1
| Countries | Military spending (in billions of dollars) | GDP volume (in billions of dollars) | Share of military expenditures in GDP (in percentages) | Number of armed forces active army | Number of armed forces reserve |
| Russia | 4,4* | 170** | 2,6 | 1 004 100 | 20 000 000*** |
| USA | 292,1 | 9 200 | 3,1 | 1 365 000 | 1 211 500 |
| Great Britain | 35,9 | 1400 | 2,5 | 212 450 | 302 850 |
| Germany | 25,4 | 1900 | 1,3 | 321 000 | 364 300 |
| Japan | 43,2 | 4300 | 1,0 | 236 700 | 49 200 |
| France | 29,5 | 1400 | 2,1 | 294 430 | 419 000 |
*According to the International Institute for Strategic Studies in London (IISS), this figure was approximately $5 billion.**According to the same source (IISS), in direct ruble terms, Russia's GDP was $454 billion after the 1998 default (on the eve of the default 2,696 billion rubles). However, the dollar equivalent of Russia's GDP, according to calculations by IISS experts based on average purchasing power parity, amounted to 1,100 billion. Similar IMF calculations, published in October 1999, determined the Russian Federation's GDP for 1998 at $945 billion.*** Of these, 2,400,000 have been demobilized over the past 5 years. Sources: The Military Balance 2000–2001 / The International Institute for Strategic Studies. London, 2001; Independent military review. 2001. No. 12. C. 33.
These data show that in terms of defense spending relative to GDP, Russia is second only to the United States. However, the absolute figures of the military budgets of the two countries are not comparable due to the repeated weakening of Russian economic potential since 1992. Data on this are given in table 2 .
The reduction in Russia's national income for 1991–1996 amounted to 46 percent (during the Great Patriotic War - 34 percent) and directly influenced the repeated sequestration of the country's military budget. The usual practice in these years was to allocate no more than half of the minimum amount of funds required, according to the military, for defense needs. Thus, in 1995, the requests of the Ministry of Defense of the Russian Federation amounted to 125.1 trillion rubles, and the budget law allocated 58 trillion rubles, i.e. 46 percent of actual needs, while only 52.3 trillion rubles, or 42 percent, were actually allocated from the requested amount. Problems with current financing were aggravated by the accumulation of debt of the Russian Ministry of Defense to suppliers of military products, materiel and services. In 1995 it amounted to 7.8 trillion rubles. The debt for unpaid allowances, wages and pensions reached 1.9 trillion rubles. The problem of debt continues to remain relevant today. There is not enough cash even to pay the military personnel in Chechnya. The payment of “combat” pay there is delayed for several months, and soldiers and officers, according to established practice, receive their regular pay a month later. As a result, only 20 percent of contract soldiers last up to a year.
Table 2
Comparative military expenditures of the USSR/Russia and the USA
| Year | Military expenditures (billions of dollars) | GDP (billions of dollars) | Share of military expenditures in GDP (in percentages) | |||
| USSR | USA | USSR | USA | USSR | USA | |
| 1985 | 277 | 258 | 2 118 | 4 054 | 13,1 | 6,4 |
| 1986 | 237 | 280 | 2 250 | 4 278 | 12,7 | 6,5 |
| 1987 | 303 | 288 | 2 348 | 4 544 | 12,9 | 6,3 |
| 1988 | 319 | 293 | 2 507 | 4 908 | 12,7 | 6,0 |
| 1989 | 303 | 304 | 2 648 | 5 267 | 11,5 | 5,8 |
| 1990 | 292 | 306 | 2 660 | 5 563 | 10,9 | 5,5 |
| 1991 | 260 | 280 | 2 531 | 5 741 | 10,3 | 4,9 |
| Russia | USA | Russia | USA | Russia | USA | |
| 1992 | 142 | 305 | 852 | 6 026 | 16,7 | 5,0 |
| 1993 | 113 | 297 | 777 | 6 348 | 14,5 | 4,7 |
| 1994 | 70 | 290 | 656 | 6 738 | 10,7 | 4,3 |
| 1995 | 40 | 275 | 626 | 6 920 | 6,4 | 4,0 |
Source: Russian Army: state and prospects / Ed. R. G. Yanovsky, Yu. I. Deryugina. M., 1999. P. 99.
An indicator of the acute shortage of financial resources and material resources in the Russian army is a sharp drop in the level of military production to approximately 8 percent compared to the corresponding figure in 1990, and production capacity utilization does not exceed 15 percent. Having analyzed numerous indicators characterizing the state of financing of the Russian army up to 1997 inclusive, civilian scientific experts, employees of the Institute of Socio-Political Research of the Russian Academy of Sciences, trying to be restrained in their assessments, nevertheless came to a disappointing conclusion: “There are no illusions about the situation that is now developed in the military-industrial complex, no. This is an absolutely real systemic crisis of the Russian defense industry” [1] .
The dynamics of Russia's defense budget over almost the entire past decade can be judged from Table 3 .
Table 3
| Year | Defense budget (in millions of denominated rubles) | Share of the defense budget in the federal budget (percentage) | Defense expenditures (in millions of denominated rubles) | Share of defense spending in federal spending (percentage) | Share of defense spending as a share of GDP (percentage) |
| 1992 | 384 | 16,0 | 855 | 16,4 | 4,7 |
| 1993 | 3116 | 16,6 | 7 210 | 20,7 | 4,4 |
| 1993 (revised) | 8 327 | no data | 7 210 | 20,7 | 4,4 |
| 1994 | 40 626 | 20,9 | 28 028 | 16,4 | 4,6 |
| 1995 (revised) | 59 379 | 21,3 | 47 800 | 12,2 | 3,1 |
| 1996 | 80 185 | 18,4 | 63 900 | 14,2 | 3,0 |
| 1997 | 104 300 | 19,7 | 79 700 | 16,2 | 3,1 |
| 1998 | 81 765 | 16,4 | 56 700 | 12,7 | 2,1 |
| 1999 | 93 702 | 16,3 | 116 000 | 17,2 | 2,6 |
| 1999(revised) | 109 000 | 19,0 | 116 000 | 17,2 | 2,6 |
| 2000 | 143 000 | no data | no data | no data | 2,6 |
Source: Independent Military Review. 2001. No. 12.
To prevent the consequences of chronic underfunding of the army, the country's first president tried to legislate the minimum annual amount of financial investments for its needs. It should have been at least 3.5 percent of GDP. However, even in the relatively prosperous year 2001, it did not exceed 2.77 percent. According to forecasts for this year, 2002, the share of military expenditures will be no more than 2.5 percent. True, in absolute figures some growth is expected from 214 billion rubles in 2001 to 282.4 billion rubles in 2002.
[1] Russian Army: state and prospects. P. 99.