It was the first time Russian military expenditure fell since 1998 — the year the country defaulted on its debts.
Throughout the era of President Vladimir Putin, military spending increased continuously, but it could now stay flat or even decrease further over the next few years. The Kremlin’s military spending made up 4.3 percent of its gross domestic product last year, and there are plans to cut it below 3 percent within five years, which could either be achieved through (a rather unlikely) economic growth or radical cuts.
The Kremlin’s plans to cut back on its military comes as military expenditure is on the rise across the world, topping $1.74 trillion in 2017. While U.S. spending still outmatched every other global power, its expenditure remained constant last year. China’s rose once again.
“This should come as a relief for Europe and for NATO,” said Siemon Wezeman, a senior researcher with SIPRI. “But of course, budget and intentions are distinct. Russia is still strong enough to make a mess out of things.”
Make no mistake: Russia’s military is still among the world’s most well-funded and its budget ranks fourth worldwide. But military budgets can most easily be slashed by cutting down on foreign operations and procurement, which could result in a declining Russian footprint in places like Syria. The Kremlin’s willingness to engage in conflicts abroad has been the key reason for Western concerns over its military in recent years.
So, is that good news for a Europe afraid of Russian military incursions? It very well could be.
Putin continues to be hugely popular in Russia — he won the last presidential election in March with 76.7 percent of the vote — even though the country’s economy has been stagnating since 2014. But while Putin’s favorability ratings haven’t suffered as a result, trust in the structures that keep him in power have.
At least some of Russia’s economic woes can be blamed on the nation’s isolation following the annexation of Crimea, resulting in sanctions. Falling oil and gas prices added to the bleak economic outlook.
Russia’s gross domestic product per capita has declined in recent years and about 20 million citizens lived in poverty in 2016, according to the government’s own statistics.
“We need to improve our people’s lives,” Putin said in a speech before his reelection in March. Among the promises Putin made in March were an increase in children’s day care and more funding for road infrastructure improvements. With an economy that has been on the edges of recession for years, Putin has been forced to slash the military budget — even as the country continues to be involved in a number of conflicts abroad.
The poisoning of former Soviet Union double agent Sergei Skripal in Britain have triggered new tensions with the West, but there are also signs that the Kremlin may be willing to strike a more conciliatory tone in an attempt to repair relations with the West and confront the sanctions burden.
“The new political cycle will unfold under the pressure of three unfavorable factors: continuing economic stagnation, international isolation of Russia and the need for preservation of the regime after 2024,” said Kirill Rogov, an independent political and economic analyst, who was quoted by the Financial Times.
Invading Europe doesn’t sound like a great solution to tackle any of those problems — much to the relief of officials in Berlin, Paris and Warsaw.