Putin’s Military Spending Plans Destroying Russian Economy – OpEd


Vladimir Putin plans to boost military spending by “almost three and a half times” in 2024 from what it was in 2021, something that can be achieved only if Moscow is able to secure a rise in oil and gas prices abroad and a highly unlikely growth in the Russian economy at home and then takes all the gains for spending on the military, Vladimir Milov says.

The former Russian government finance official and current opposition politician says that even if the regime can do that, and he judges the prospects as unlikely, the Russian economy will suffer because the money spent on the military will not have the multiplier effect that money spent on other things does (theins.ru/opinions/vladimir-milov/265527).

Money spent on munitions may boost the GDP now, but once the tanks, planes and bullets are used, they do not play any role in the future growth of the economy; and as a result, military spending now will have the most negative impact on the economy in the future, making it even more difficult for the regime to balance the budget.

The worsening of the current economic situation that such expanded military spending makes virtually inevitable recalls “the spiral” of the late 1980s that Yegor Gaidar described in his book about The Death of the Empire which tells the story of what led up to the collapse of 1991, Milov continues. 

The Soviet leaders, Gaidar wrote, “as is clear from their remarks in 1985-1986 were certain that they would be able to return the lost dynamism to the Soviet economy, raise the tempos of economic growth, and overcome its lag behind the more developed countries” but did not “see or understand the nature and extent of the threat.”

Milov says that something similar happened before 1917; and in both cases, expanded military spending effectively torpedoed further economic growth and led to political crises the leadership of the country couldn’t cope with. Unfortunately, it is clear that the current Russian elite hasn’t learned anything from either event.

Paul Goble

Paul Goble is a longtime specialist on ethnic and religious questions in Eurasia. Most recently, he was director of research and publications at the Azerbaijan Diplomatic Academy. Earlier, he served as vice dean for the social sciences and humanities at Audentes University in Tallinn and a senior research associate at the EuroCollege of the University of Tartu in Estonia. He has served in various capacities in the U.S. State Department, the Central Intelligence Agency and the International Broadcasting Bureau as well as at the Voice of America and Radio Free Europe/Radio Liberty and at the Carnegie Endowment for International Peace. Mr. Goble maintains the Window on Eurasia blog and can be contacted directly at [email protected] .

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