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SIPRI Stats and Military Bookkeeping

The SIPRI researchers observed an increase in military spending in the states contiguous to Russia since the start of the Ukraine crisis. The leading Western countries feel comfortable having their terrified Eastern European neighbors as a buffer. They are not in a hurry to throw more money into the NATO pot.

The Stockholm International Peace Research Institute (SIPRI) recently released a report on the global arms trade and arms spending, which found that Russia accounted for 4.8 percent of global military spending in 2014. That makes it third after the United States (34 percent) and China (12 percent). According to the report, Russia’s military spending grew last year by 8.1 percent compared with 2013 and amounted to $84.5 billion, or 4.5 percent of GDP. However, the institute’s researchers note that Russia was planning such an increase before the Ukraine crisis. In addition, due to declining oil revenue, Russia's defense budget has been adjusted downward by 5 percent.

The United States has also trimmed its military spending. With the world’s largest military budget (almost three times that of China), the US reduced its military spending by 6.5 percent in 2014 as part of the effort to rein in the budget deficit under the Budget Control Act of 2011. However, according to SIPRI researchers, the United States remains at an all-time high in this area, which is almost the same in real terms as the peak level of the late 1980s. In all, Washington spent $610 billion, or 3.5 percent of GDP, for military purposes. The military budget is expected to be cut in 2015 as well, albeit not as dramatically. After reaching its high-water mark in 2010, military spending fell by 19.8 percent in real terms.

According to SIPRI, China’s military spending tracked economic growth, remaining at a steady 2 to 2.2 percent of GDP. In absolute terms spending increased by 9.7 percent to $ 216 billion dollars.

According to the report, Ukraine’s spending grew by 23 percent in 2014, totaling $4 billion, in keeping with preliminary estimates. This estimate probably does not include all military expenses, and the final figure could be higher, says the report. In 2015, Ukraine plans to double its military spending, according to the researchers.

The SIPRI report offers many other interesting figures, observations and findings. For example, it notes that global military budgets shrank for a third straight year, with the governments of all countries spending a combined $1.776 trillion, which is 0.4 percent less than in 2013. This is a small percentage, but it’s encouraging, especially since it accounts for only 2.4 percent of global GDP. However, if you compare this figure to the military spending of the United States and Russia relative to GDP, the comparison will not be in favor of either Washington or Moscow. All the more so, given the difference in their respective GDPs.

The SIPRI researchers also observed an increase in military spending in the states contiguous to Russia since the start of the Ukraine crisis. These include countries of Central Europe, the Baltics and Scandinavia. For example, Poland and Estonia spend $10.4 billion and $430 million, or 1.9 percent and 2 percent of GDP, respectively. And yet other countries, despite NATO calls to increase their contributions to the common defense to 2 percent of GDP, are not in a hurry to do so. It is my impression that the leading Western countries and their leaders, despite the media campaigns unleashed at home to intimidate people with the specter of “Russian aggression and the Russian nuclear threat,” don’t actually believe it and feel comfortable having their terrified Eastern European neighbors as a buffer. They are not in a hurry to throw more money into the NATO pot. The most prosperous European countries – France, Germany, Italy and Spain – contribute the least as a percentage of GDP.

The researchers behind the SIPRI report, Sam Perlo-Freeman and Jan Grebe, say that the data for these reports is traditionally taken from public sources, such as government budgets showing official defense spending. Specific 2014 indicators do not suggest any far-reaching conclusions, although the trends caused by the Ukraine crisis are already visible. At the same time, they warn against superficial interpretations of this report. It should not be directly linked with Russia’s policy, Jan Grebe says. In many countries, qualitative improvement of the armed forces was part of a standard modernization effort.

This statement is quite true, both for the countries of Eastern Europe, which continue to replace old Soviet weapons with military equipment manufactured in the NATO countries, and for Russia. After many years of stagnation, Russia started state and military tests of new weapons and put them into mass production. The first samples of this military equipment were on display for all to see during the May 9 Victory Parade in Moscow. That includes a new medium-sized T-14 tank based on an innovative unified Armata track platform, a new infantry fighting vehicle and a new armored personnel carrier on the same platform. There are standardized tracked IFV and APC, Kurganets-25, a wheeled paratroops Boomerang APC, a tracked paratroops Rakushka APC, an all-terrain Typhoon armored truck, a mobile strategic RS-24 Yars missile complex, and other equipment, aircraft and helicopters. This equipment started being developed in the late 2000s. It is being transferred to the army now, meaning that purchasing costs will increase. This also has nothing to do with the civil war in Ukraine.

And yet, the Ukraine crisis, which led to the fratricidal war in its southeastern regions and involves many Western countries and, in its way, Russia, could not but lead to an increase in military spending, both direct and indirect. NATO politicians and generals accuse Russia of waging a hybrid war in Ukraine, meaning that in order to achieve its goals – such as preventing Kiev from joining NATO and the European Union and keeping Ukraine in Moscow’s orbit with all the attendant consequences – it resorts to all kinds of political, diplomatic, economic, financial, military, information, psychological and special methods.

I am not going to discuss who is really waging a hybrid war against whom – whether Moscow against Kiev, Brussels and Washington, or the latter three against Moscow. Personally, I am completely convinced that the policies and Eastern Partnership program developed by the European Union in cooperation with the United States with a focus on Ukraine and the Maidan protests, which were fueled by leading politicians from Washington, Berlin, Warsaw and Vilnius, as well as support for the Right Sector’s Nazis and their candidates, such as Turchinov, Yatsenyuk and Poroshenko, who sent troops to subdue the rebellious Donbass – all of this is precisely the result of the hybrid war that the West organized to pry Ukraine from Russia, oust the Russian Black Sea fleet from Crimea and Sevastopol and set up its military bases on the Crimean peninsula, right in Russia’s underbelly.

As a military reporter, I believe it’s not entirely correct to calculate military spending of a particular European country, or a NATO member, or any country for that matter, based on official government spending figures or media sources. Doesn’t this hybrid war include information and psychological campaigns aimed at demonizing the Russian leadership and the Russian armed forces for allegedly brandishing its nuclear club at Europe? Should the cost of running such campaigns be included in defense spending? Or are they listed as propaganda expenses? Of course, there are no official ministries of information and propaganda in most Western countries, even though they engage in such efforts on a massive scale, especially against our country.

Should the figure also include the sanctions that Washington has imposed on Moscow and pressured the EU and Kiev to impose, which have to some extent affected the production of Russian military equipment? Not only have they backfired on those countries, their defense companies which had contracts with the Russian Defense Ministry lost money, such as leading German companies like Rheinmetall, or DCNS, which built two helicopter carriers for Russia and is now forced to pay back more than one billion euros. Moreover, Moscow’s retaliatory sanctions against those EU countries that have shortsightedly obeyed the orders from Washington have hurt local meat, dairy and agricultural producers.

It’s also worth asking how much it cost EU and NATO countries to hold the September 2014 NATO summit in Wales, which officially announced resolute opposition to Moscow on all fronts by increasing the number of exercises in the Baltic states, Poland, in the air over the Baltic Sea and the Baltic, Black, Norwegian and Barents seas? The landing of American tanks in the port of Riga? The military exercises of Scandinavian countries in the Arctic with the participation of troops from the United States, the United Kingdom, the Netherlands, neutral Switzerland, Germany and France, which began on May 25 and will last until June 5? As many as 115 multi-purpose aircraft will exercise next to Russian air and sea borders, with 90 aircraft being in the air at all times, and 3,600 personnel. Are these expenses included in the military budgets of the countries studied by SIPRI, or not? That’s a tricky question.

Does SIPRI include the money Western countries spend to carry out special operations and cyber operations? Instances of Russian hackers breaking into the restricted websites of NATO or the Pentagon are occasionally covered by the media. But there are no such leaks regarding similar operations carried out against our government and military organizations by US and NATO cyber forces. I’m assuming it would be considered unseemly to talk about it, while Brussels and Washington claim – not terribly believably – that they are just defending themselves.

I’m writing this not to reproach SIPRI for releasing an unreliable or incomplete report. I have full faith in their academic integrity and objectivity, which is a defining trait of the Stockholm Institute, its employees and partners. However, I believe that modern military statistics, for all their usefulness for various purposes, do not always fully capture the complex reality of military accounting and military spending, primarily because of their classified nature, as well as their ambiguity and diversity – in other words, their hybrid nature.

Many complex factors that are invisible to the naked eye are at play on matters of the army and military victory, competition and political confrontation. Only an integrated analysis of their interdependence and mutual influence can lead to a more or less objective understanding of this topic.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.