The Russian combination of an aggressive military modernization plan and a faltering economy have led many to the conclusion that the nation will not be able to sustain its buildup plans.
In fact, it’s a position that has given comfort to many western leaders as they consider the endgames to Russian actions in Ukraine and bombings in Syria.
But a new NATO analysis indicates that despite economic difficulties, Russia looks to be on schedule, and intent to keep to that schedule, in their 10 year 19 trillion ruble rebuilding effort. That effort is about halfway done, and while since the implementation of sanctions over the Russian invasion of Crimea in 2014 the Russian ruble has lost a significant amount of its value (it was about 50 to a dollar before the invasion, and has dropped as low as almost 80 to a dollar, though today is at about 64 to a dollar) the analysis states Russian defense spending has increased by 60 percent in the last five years.
The report states: "Overall, a large part of the program is likely to be fulfilled by 2020… In any case, the analysis developed in this article suggests that Russia’s economic challenges are insufficiently severe to force any significant slowdown or curtailment of the nation’s current military modernization effort."
In any case, the analysis developed in this article suggests that Russia’s economic challenges are insufficiently severe to force any significant slowdown or curtailment of the nation’s current military modernization effort _
NATO Review magazine in what it calls a “sobering prospect” on Russia’s military buildup.
The analysis, in the latest edition of the NATO Review, which was sent out this week, begins by acknowledging the conventional wisdom regarding Russian re-armament.
"Russia’s recent economic difficulties have led many observers to question the economic sustainability of the nation’s current defense spending goals. The latest macroeconomic forecasts suggest a more sobering prospect."
The analysis notes "Developments since 2014 have not been kind to Russia’s economy. Heavily dependent on oil and gas export revenues, the nation’s currency, gross domestic product (GDP), and real living standards, all suffered substantially from the sharp fall in oil prices that occurred in late 2014. Russian GDP shrank by 3.7% in real terms in 2015, and is generally expected to fall by a further 0.8% this year, according to the October 2016 forecast of the International Monetary Fund (IMF)."
It goes on to note that this is despite the fact that much of the international community has made it clear that they still don’t approve of Russian aggression in Ukraine. It also notes that the economic downturn is likely to end.
"A recovery is widely expected from 2017 — a modest one if oil prices remain moderate, a somewhat stronger one if oil prices rally. Western economic sanctions, meanwhile, continue to weigh down on the nation’s business and investment climate — keeping alive the West’s clear signal of disapproval towards Russia’s aggressive actions in Ukraine."
Matthew Schofield: 202-383-6066, @mattschodcnews
Comments