How much does Russia spend on defense?

Russia is often described by hawks as armed to the teeth and dangerous. It is part of the new axis of evil, is aggressive and must be contained. To do so, the West in general and the US in particular, must increase their defence budget and park as much troops and hardware at Russia's borders to deter Moscow.

At the same time, Moscow is ridiculed as an economic midget in the global arena, a country with the economic output of Italy, or, as McCain once said, "A gas station masquerading as a country".

Those two snapshots are not really compatible, now, aren't they...

So, what are the figures?

In 2018, Russia's nominal GDP stood at $1.630 trillion, making this huge country the 11th (or 12th, depending on who you ask) biggest economy in the world. Following the same calculation, Russian defence related expenditures came up at $64.4 billion. That is 3.9% of GDP, which would be great if Russia was part of NATO. It is also a very sustainable ratio, much more so than the ratio adopted by the Soviet Union, when the Defence budget ate anywhere between 10% to 20% of the country's GDP!! $64.4 billion also places Russia as the 6th biggest global spender in defence expenditures.

However... Nominal GDP is not the most accurate method of calculation when applied to comparing budgets: It uses the current exchange rates for national currencies, converted in Dollar. Currencies are sometimes subjected to wild variations and manipulations. The value of a currency converted in dollar often distorts the picture.

Looking at everything Russia produces and manufactures and looking at the size of its armed forces and military investments, both GDP and Defence budget look wrong when converted straight into dollar..

This is why several organisations use the Purchasing Power Parity method when calculating just this type of things.

What is PPP? Well, according to Wikipedia, “PPP takes into account the relative cost of local goods, services and inflation rates of the country, rather than using international market exchange rates which may distort the real differences in per capita income”.

Following this method, Russia's PPP GDP stands at $4.213 trillion, making it the 6th largest economy in the world, just behind Germany. Using the same PPP concept, Russia's current military expenditures stand at anywhere between $88billion and $98 billion, placing it at the third place, globally, just behind China.

Now, this looks a little more accurate. Still, as far as military spending is concerned, Russia is far behind China and the US: Washington spent $649 billion in defence related expenditures in 2018 and Beijing $250 billion. It means that if one combines both the American and Chinese defence budget for 2018, they represent 50% of all military expenditure worldwide for that year!

Read more at Defensionem - The War Bible

Added:

By: m-lom (4970.54)

Tags: Russia, military

Location: Russia