Armed Forces of The Russian Federation - Budget

Budget

In 1988 military spending was a single line item in the Soviet state budget, totaling 21 billion rubles (687.77100 million U.S. dollars). Given the size of the military establishment, however, the actual figure was considered to be far higher. However, between 1991 and 1997 newly independent Russia's defence spending fell by a factor of eight in real prices. Between 1988 and 1993 weapons production in Russia fell by at least 50% for virtually every major weapons system.

In 1998, when Russia experienced a severe financial crisis, its military expenditure in real terms reached its lowest point— barely one-quarter of the USSR's in 1991, and two-fifths of the level of 1992, the first year of Russia's independent existence.

Defence spending is consistently increasing by at least a minimum of one-third year-on-year, leading to overall defence expenditure almost quadrupling over the past six years, and according to Finance Minister Alexei Kudrin, this rate is to be sustained through 2010. Official government military spending for 2005 was US $32.4 billion, though various sources, have estimated Russia's military expenditures to be considerably higher than the reported amount. Estimating Russian military expenditure is beset with difficulty; the annual IISS Military Balance has underscored the problem numerous times within its section on Russia. The IISS Military Balance comments - 'By simple observation.. would appear to be lower than is suggested by the size of the armed forces or the structure of the military-industrial complex, and thus neither of the figures is particularly useful for comparative analysis'. By some estimates, overall Russian defence expenditure is now at the second highest in the world after the USA. According to Alexander Kanshin, Chairman of the Public Chamber of Russia on affairs of veterans, military personnel, and their families, the Russian military is losing up to US$13 billion to corruption every year.

On 16 September 2008 Russian Prime Minister Vladimir Putin announced that in 2009, Russian defence budget will be increased to a record amount of $50 billion.

On 16 February 2009 Russia's deputy defence minister said state defence contracts would not be subject to cuts this year despite the ongoing financial crisis, and that there would be no decrease in 2009. The budget would still be 1,376 billion roubles and in the current exchange rates this would amount to $41.5 billion.

However, later that month, due to the world financial crisis, the Russian Parliament's Defence Committee stated that the Russian defence budget would instead be slashed by 15 percent, from $40 billion to $34 billion, with further cuts to come. On 5 May 2009, First Deputy Prime Minister Sergei Ivanov said that the defence budget for 2009 will be 1.3 trillion rubles (US$39.4 billion). 322 billion rubles are allocated to purchase weapons, and the rest of the fund will be spent on construction, fuel storage and food supply. According to the head of the Defense Committee of the State Duma Vladimir Komoyedov Russia plans to spend 101.15 billion rubles on nuclear weapons in 2013-2015."The budget provisions under "The Nuclear Weapons Complex" section in 2013-2015 will amount to 29.28 billion rubles, 33.3 billion rubles and 38.57 billion rubles respectively," Komoyedov said, Vechernaya Moskva reports.

Komoyedov added that in 2012 the spending on nuclear weapons made up 27.4 billion rubles. The draft law "On the Federal Budget for 2013 and for the planning period of 2014 and 2015" will be discussed in the first reading on 19 October 2012, The Voice of Russia reports.