Russian Finance Ministry calls for reducing military expenditures
The Russian Government will have to reduce military expenditures by 6% due to a reduction in revenues of the State Budget over the next three years. As reported by Vedomosti citing its own sources in the Federal Government, 1% of the savings will be reallocated for priority programs and projects under "National Defense," which in 2016 is expected to spend 3,157 trillion rubles.
At the same time, according to Ministry of Finance estimates, the reduction in spending will allow them to save about 190 billion rubles. The representative of the newspaper noted that if these proposals by the Ministry are accepted, spending will be focused on procurement and development of weapons and capital construction. It is noted that the implementation of programs which have been delayed due to funding cuts, will be considered in September at a meeting dedicated to the new weapons program.
On the 8th of September, Russian President Vladimir Putin stated that the large scale rearmament of the Russian Armed Forces will be completed by 2020. Russia’s ambitious plans on large scale rearmament were at risk after its economy was seriously affected due to a drop in energy prices and the imposition of sanctions by the international community due to the aggression against Ukraine.
According to recent estimates, the federal budget revenues in relation to GDP will be reducing over the next three years and reach a 20 year low (13.3% GDP) in 2019. In June 2015, the New York Times wrote that the Kremlin’s desire to build a modern high technology army is just a fantasy, as Moscow’s desire to re-arm is not in harmony with its financial capacity.