A recent report by the Canadian Security Intelligence Service (CSIS), entitled 2018 Security Outlook, has painted a misleading picture of Russia’s military procurement. The document warns Russia “is modernizing conventional military capability on a large scale; the state is mobilizing for war.” Such statements suggesting a Cold-War-style military buildup ignore the formidable difficulties Russia faces in renewing its military forces.

The reason for this alarmist tone is obvious: to give impetus to the creation of a minimal NATO standing force in the Baltic states. The Trudeau government has since committed troops to Latvia, as well as a small number of fighter aircraft. But the effect of these statements is to take at face value the Putin government’s domestic propaganda of resurgent military power. In fact, the combination of budgetary problems, a need to replace and refurbish aging equipment and several ambitious prestige projects is leading the Russian military and its government into a fiscal trap.

So, about that modernization…

Although Russia produces a great deal of modern military equipment for export, only a minority of its own inventory has been replaced since the fall of the Soviet Union. In theory, Russia possesses about 2,500 active main battle tanks, 1,400 fixed-wing tactical aircraft, about 25 operable major surface combatants and 47 attack submarines. While this is still a formidable force, it represents a fraction of Soviet-era numbers, and much of this equipment is in urgent need of refurbishment or replacement.

The bulk of the Russian tank fleet consists of Cold-War-era T-72s, and the land forces’ entire fleet of armoured vehicles is long in the tooth. Russia’s tanks are widely held to be inferior to their much better protected Western counterparts. To address this gap, the new Armata vehicle program, famously unveiled at the 2015 Victory Day parade, aims to replace not only old tanks but the majority of armoured fighting vehicles, a vast recapitalization that would be hugely expensive – and has yet to materialize.

Most Russian ships and submarines will require upgrades in the near future simply in order to keep functioning. Quite apart from repairs of old hulls and replacement of old engines, all the older vessels need complete electronic refits including such expensive items as new radars, sonars, and communications and countermeasures systems. In addition, no Soviet vessel was built with an integrated combat system, the digital system that coordinates weapons and sensors in modern warships. Currently, a large part of the Russian submarine fleet and the aircraft carrier Kuznetsov are scheduled for complete overhauls, which will be expensive and time-consuming.

Construction programs for new ships are also in trouble. The Admiral-Gorshkov-class frigate, which the navy had hoped would replace most of its old hulls, lost its source of engines in the Ukraine, forcing production delays. There is no sign of the projected 20-to-30-unit run originally announced. The less ambitious Admiral-Grigorovich-class ran into the same problem. For financial reasons it seems the navy is looking for foreign buyers for three of the six planned Grigorovich-class frigates. The Yasen-class attack submarine, meanwhile, has only one active unit three years after the first vessel commissioned and two decades after the project started.

And these are not even the most expensive naval projects. Replacing nuclear ballistic missile submarines is the most expensive project any navy can embark upon, and Russia’s existing fleet is aging rapidly. On top of this, the navy’s prestige projects also appear to be on shaky ground. It had promised a complete refurbishment of decommissioned Kirov-class nuclear-powered battle cruisers as well as additional aircraft carriers. The latter is completely beyond both budgetary feasibility and the state of existing Russian industry.

The air force has had to sharply curtail its ambitions for new stealth fighters due to the deteriorating economy, delaying any large procurements beyond 2020. In the meantime, old airframes continue to be refurbished, with relatively small numbers of new ones in the pipeline. The new aircraft are formidable, comparable to the current generation of European fighters, but the air force suffers from a lack of airborne early-warning aircraft and other infrastructure needed to fight a modern air war.

In short, Russia has talked big about new defence procurement for many years, but in each case, budgetary realities have fallen far short of even basic recapitalization of the remaining Soviet-era equipment, let alone more ambitious projects. Not only will Russia not be able to fulfill its ambitions of a complete renewal of military power, it will fall further and further behind as old equipment wears out.

Unsustainable spending

To put this issue in economic perspective, Russia is a country of 146 million people, with the sixth largest GDP in the world at around $3.6 trillion, according to International Monetary Fund figures. The World Bank’s data indicate Russia’s GDP per capita (adjusted for purchasing power parity) is around $22,000, ranking it 51st in the world. Canada, with 36 million people, is the world’s 15th largest economy, but we enjoy around $45,000 GDP per capita (PPP), placing us far ahead of Russia on that list. Russia spent 5.4 per cent of its GDP on defence in 2015, according to Stockholm International Peace Research Institute data, whereas Canada habitually spends around 1 per cent of GDP.

With that significant investment, Russia maintains an active military establishment of around 700,000 people, as opposed to our paltry 68,000. With a floundering economy, Russia cannot afford its military footprint, something two recent Russian finance ministers have said publicly; one resigned in part over this issue.

Russia’s far-reaching defence modernization programs have been defended by President Putin despite persistent advice from the country’s finance ministry that they are not feasible in budgetary terms. Meanwhile, Russia’s financial situation grows worse due to a number of contributing problems including low fossil fuel prices, Western sanctions, a poor investment climate, and inefficiency and corruption in the defence sector and the wider economy. There may or may not come a point where the defence procurement budget hits a wall, but it is already Zeno’s arrow paradox, flying and flying and doomed never to hit the target.

So the Baltic is safe, right?

None of this is to say that the Russian armed forces are not formidable. Russia could, if it desired, take the Baltic states almost irrespective of any NATO forces stationed there. It always could. Its assets for a conventional war are formidable, and it could easily dominate for perhaps the first one to three months of a conventional conflict. While all European NATO members put together would be hard-pressed to match Russia in the air or on the ground in terms of numbers, the United States could, if necessary. All it would need is time to build up its forces, and Russia is long past the days when it could have contemplated closing the Atlantic.

Russia is financially unable to do anything to change this state of affairs, and NATO does not have the political will to do so. And perhaps, in the interests of stability, that’s just as well.

Photo: Ev. Safronov/Shutterstock.com


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Tony Rodger
Tony Rodger has been studying international defence procurement for over ten years. He wrote his MA thesis on East Asian procurement patterns, and has since written on Canadian and international defence procurement for Canadian research institutes. He works as a writer and researcher for Global Resilience Solutions, an Ottawa-based consulting firm.

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