Russia’s out-of-control military spending. What are the implications for the rest of the economy?

In the first six months of 2023, total budget expenditure rose to almost 15 trillion rubles (€142.3 billion), an increase of 2.5 trillion rubles (€23.7 billion) on the previous year, with defence spending responsible for almost the entire difference, economic analyst Boris Grozovsky says. The Russian government has simultaneously increased military spending while decreasing spending in other sectors, which is “why budget statistics are no longer being released,” Grozovsky added.

ChaoticEntropy,
@ChaoticEntropy@feddit.uk avatar

How much of this money actually gets to their military rather than being soaked up by profiteers and corrupt officials…?

MrMakabar,
@MrMakabar@slrpnk.net avatar

How much more money would Russian corrupt officals steel from the military, if they can not steel that money?

gajustempus,

as long as there’re still european countries buying stuff from Russia (yes, I’m looking at you, Austria, Hungary, Poland…) and therefore financing the whole war, I fear we won’t see an end of all of this in the near future.

Plus it’s beyond me why PayPal and all other payment processing sites don’t block stuff like Boosty, which is used by almost exclusively russian firms to bypass western sanctions and receive cash - which does, in the end, also fuel the war business of Russia.

awwwyissss,

Poland? What are they buying?

gajustempus,

Polish state energy giant Orlen explains increased Russian oil imports | Notes From Poland notesfrompoland.com/…/polish-state-energy-giant-o…

awwwyissss,

Interesting, thanks.

lemick24,

Terribly disappointing to hear, especially given how much Poland has otherwise gone to bat for Ukraine lately…

agarorn,

As far as I understand Russia spending most of their money in the country itself to pay for the salaries of soldiers and manufacturing.

Instead, the state is just printing money,

If Austria is really financing the war, then only if Russia used that money to buy war stuff from elsewhere. For that I have no information. (I know that they buy from Iran and north Korea. However both of these countries do not use the euro?)

MrMakabar,
@MrMakabar@slrpnk.net avatar

Parts of a lot of Russian weapons are of Western origin. That is stuff designed for civilian use, but can be used in weapons as well. For example GDS chips are used in smartphones, but also can be used in drones. That is the kind of stuff Russia needs hard money for. Then you have machining tools and similar products as well, which can be used to make weapons.

At the same time it enables Russia to focus its production on military products, if it can use hard currency for civilan goods.

agarorn,

Shouldn’t these thing fall under one oft the 11(?) sanctions packs we put on Russia so far?

gajustempus,

what good are sanctions packs if they aren’t properly enforced?

MrMakabar,
@MrMakabar@slrpnk.net avatar

Just as an example, some of the Western chips found in Russian weapons are also installed in dish washers. You can buy them online without anybody really looking into it and have them delivered to say Kazhkhstan and then transport them into Russia. It is basicly impossible to enforce, as anybody can buy them with such ease.

severien,

If Austria is really financing the war, then only if Russia used that money to buy war stuff from elsewhere

Does not compute. Money from Europe helps financing the war even if it’s domestic production. Money is fungible, you can’t say this specific euro or ruble is not used for weapons and therefore it’s ok to pay them. Western business helps prop up ruble exchange rate which limits inflation and domestic discontent, which allows Putin to spend more on domestic weapon production.

tryptaminev,

what are you talking about? countries buying from russia gives russia money that they can use to import stuff. without the foreign spending theyd lack that money

severien,

Sure, I’m not disputing that.

The message I was reacting to claimed that since the money Austria pays to Russia isn’t spent directly on weapons in foreign countries, there’s no moral issue in doing that. Which is not true.

Astroturfed,

PayPal, and every other company doesn’t actually give a fuck. They pretend to, so they don’t upset their customers. They wouldn’t spend a dime they don’t have to turning away business. That’s just not good capitalism. Businessmen gotta do business.

MrMakabar,
@MrMakabar@slrpnk.net avatar

There needs to be a drop in oil prices and right now it does not look like that.

what_is_a_name,

Thank the Saudis for that. Since the start of the invasion, the Saudis have been coordinating with Russia in decreasing output to drive oil prices high.

The US has been subsidising the domestic demand/prices by releasing from its strategic reserves, but last I heard this are about run dry.

tal,
@tal@kbin.social avatar

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCSSTUS1&f=M

According to this, since February 2022, when the invasion started, it's fallen by 40%. That's significant, but not exactly running dry at this point.

AngryCommieKender,

Not to mention that’s just the strategic reserves. Thanks to shale fracking, the US is the largest petroleum producing country in the world, and that isn’t likely to change any time soon.

MrMakabar,
@MrMakabar@slrpnk.net avatar

The Saudis need the money, due to having to diversify their economy. MBS is starting to take out the Wahhabi elite, but it can backfire. So he needs to pacifiy the crowd. So we see Ronaldo and co going to Saudi Arabia, massive construction projects lining the country and other other massive spending programs. So the Saudis need a high oil price. Pissing of the US is just a nice thing to do, as they did not protect them against Iran, when they attacked a refinery a few years back.

The best thing to happen, would be a massive economic crisis in China with a strong push towards EVs in the West and especially in the US. It might happen, but right now it looks like Chinas demand is not falling as fast as expected and well the US loves to drive cars as big as WW2 tanks.

deft,

Good we should get off the rock juice and move to smarter energy sources

what_is_a_name,

There are more … controlled ways to do that than in the middle of a war.

AllNewTypeFace,
@AllNewTypeFace@leminal.space avatar

It’s in MbS’ interests that his golf buddy/useful idiot Trump wins the presidential election. As such, we can expect oil prices to keep increasing until November 2024, on the theory that significant proportions of Americans will vote against the incumbent primarily out of hip-pocket pain at the pump.

anon_water,
@anon_water@lemmy.ml avatar

Here’s ruzzia, trying to outspend the west. What happened last time for the ruzzians?

OwlPaste,

Oil prices are high, sometimes they are still selling above sealing price. They are still making more thab enough money from oil and other resources sales to keep financing this war for a long time. Plus every year they get about a million conscripts. Its unfortunate that they are so big that a massive cluster fuck of a war is bot affecting them as much as we are led to believe.

Compared to the west they had years and years of oil sales to build up a lot of capital to continue financing such wars.

What we need is to boost ammunition production and provide more military aid/training to Ukrainians. Alot more than now. The front is huge, few tanks won’t make a weather there without being able to chunk through ammunition like theres no tomorrow. So ammunition first and more tanks/planes after.

MrMakabar,
@MrMakabar@slrpnk.net avatar

Russia has 7.3 million men between 20 and 30. So conscripting a million men is going to have a massive impact on the country. Especially since a lot of the eligable Russians have left Russia as soon as conscription was announced. Russia already has worker shortages due to that.

Then Russia is mostly using old Soviet weapons. This means the arsenal is going down. As long as Ukraines losses in equipment are replaced that looks pretty decent.

The big question is the politcal will to see this throu from the West. The Wests economy is much larger then that of Russia, so it can be financed with greater ease. However Ukraine has to deliver on destroying a lot of Russians.

eran_morad,

The West (and her allies in the East, such as Japan, S. Korea, Australia, NZ, etc.) is getting an incredible deal on another 100 years of dominance over the Russia/China cabal. This costs the West a pittance in exchange for continued domination of the world order (and I believe that’s a good thing), along with economic dominance. Strategically, this is a master play organized by Biden, Scholz, et al. Only the right-wing degenerates could possibly pull the plug on Western support for Ukraine. Which is why they are the target of russian propaganda.

MrMakabar,
@MrMakabar@slrpnk.net avatar

China and Russia are not natural allies. China is not sending Russia weapons at least not that many. However China benefits a lot from this. It is able to buy oil and gas the US navy can not cut from Russia, is able to move its influence into Central Asia, the area of the world with the weakest natural Western influence and the West is looking at Ukraine rather then Taiwan.

It is going to hurt Russia long term, but it also might make it a complete puppet of China.

tryptaminev,

The goal of the West is not to make Ukraine win. it is to make Russia lose. The longer the war goes the more Russia loses.

eran_morad,

The West is using Putin’s feeble mind against russia. Good, fuck ’em.

MataVatnik,

Is this all Russia can muster at 45%?

Tar_alcaran,

Spending 45% doesn’t mean anything like getting 45%. You’ve gotta subtract all the graft and corruption, and all the sanction-dodging isn’t exactly free either.

Additionally, it’s the 11th largest economy fighting against the donations of more than half of the countries above it in the ranking

MataVatnik,

Let’s donate more then

Burn_The_Right,

“Is no problem. I have money guy. He make much money in garage. No problem.”

-Vladimir Putin (August 12th, 2023)

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