Russian defence spending dips as sanctions bite

STOCKHOLM • Russia's military spending fell sharply last year for the first time since 1998 as a slew of Western economic sanctions hit government coffers hard, a report by defence think-tank SIPRI showed yesterday.

Despite soaring tensions between Moscow and the West, Russia's military expense last year came in at US$66.3 billion (S$88.5 billion), 20 per cent lower than in 2016, according to the Stockholm International Peace Research Institute (SIPRI).

The last time Moscow was forced to cut spending was in 1998, at the height of a massive economic crisis.

"Military modernisation remains a priority in Russia, but the military budget has been restricted by economic problems that the country has experienced since 2014," senior SIPRI researcher Siemon Wezeman said, referring to Western sanctions imposed on Moscow over its annexation of the Ukraine's Crimea peninsula.

Russia's frosty relations with Nato, which have plummeted to their lowest levels since the Cold War, are also driven by sharp divisions over the Syrian conflict and the recent poisoning of a former Soviet spy and his daughter in the UK.

Russia has largely protected its defence budget up to now, imposing cuts in areas such as infrastructure and education, but 2017 was the first time it had no option but to spread the pain, according to Mr Wezeman.

"Russia definitely has a very clear feeling it has to show that it is still a major power, and you show that by undertaking operations in, for example Syria, by showing up on the Atlantic Ocean with your navy," Mr Wezeman said. "But I am sure that there will be serious cost cuts to those."

Based on the government's spending plan until 2020, defence costs are expected to stay flat from 2017 or possibly even fall somewhat adjusted for inflation, according to Mr Wezeman.

Russia dropped to fourth place in the ranking of the world's biggest military spenders, overtaken by Saudi Arabia.

"It's no longer possible to keep defence at a high level or keep it growing," said Mr Wezeman. "For Russia, it means they may have to swallow their pride."

All 29 Nato allies, meanwhile, spent US$900 billion on the military in 2017, which accounts for 52 per cent of total world spending, SIPRI said.

Military spending in both Central and Western Europe rose by 12 and 1.7 per cent, respectively, in 2017, triggered "in part by the perception of a growing threat from Russia".

The United States, which remains the world's biggest military spender at US$610 billion, spent more on its military than the seven next highest-spending nations - China, Saudi Arabia, Russia, India, France, the UK and Japan - combined, SIPRI said.

The independent institute also said that world military expenditure reached the highest level since the end of the Cold War at US$1.73 trillion in 2017.

"Continuing high world military expenditure is a cause of serious concern," SIPRI chair Jan Eliasson said in a statement. "It undermines the search for peaceful solutions to conflicts around the world."


A version of this article appeared in the print edition of The Straits Times on May 03, 2018, with the headline 'Russian defence spending dips as sanctions bite'. Print Edition | Subscribe