Bloomberg News

Putin Calls for $772 Billion Upgrade to Rebuild Military

February 20, 2012

(Updates with analyst’s comment in fourth paragraph.)

Feb. 20 (Bloomberg) -- Prime Minister Vladimir Putin said Russia will spend 23 trillion rubles ($772 billion) over the next decade to upgrade its military with the latest weaponry and forge a “smart” defense system against new threats.

The outlays are “suitable to the country’s capabilities and resources,” Putin said in an article published today in the government’s Rossiiskaya Gazeta today, part of a series the premier is publishing to lay out his campaign platform for the March 4 presidential elections. “We shouldn’t tempt anyone with our weakness.”

The spending spree will add hundreds of intercontinental ballistic missiles, military satellites, warships and submarines to the country’s arsenal over the next decade, according to Putin. The buildup is needed to extend the military reach of the world’s biggest country by area, countering conflicts near its borders and the development of non-conventional, non-nuclear weapons, he said.

Putin is backing a military overhaul initiated by his successor, President Dmitry Medvedev, after a five-day war with Georgia in 2008 revealed the shortcomings in Russian technology. Putin served as president from 2000 to 2008 and then moved to the premiership to comply with constitutional term limits.

The Candidate

“Putin is the only presidential candidate to articulate Russian defense strategies,” Igor Korotchenko, head of the Defense Ministry’s Civil Council, said by phone today. “The military electorate including the army, veterans and defense industry workers is about 10 million people -- after reading this article, they’ll definitely see Putin as the candidate they’ll vote for.”

Russia is ramping up spending after years of cutbacks in the 1990s decimated the armed forces. The country’s military spending has increased in ruble terms every year since 1998, according to Stockholm International Peace Research Institute data. The Obama administration plans to trim U.S. defense spending by 8.5 percent in the coming decade.

Former Finance Minister Alexei Kudrin clashed with Medvedev in September and was dismissed after criticizing the arms spree for creating “additional risks for both the budget and the economy as a whole.”

“We aren’t talking about the militarization of Russia’s budget,” Putin wrote, adding that the government is making up for years of underfinancing the armed forces.

The importance of nuclear arms as a strategic deterrent will soon begin to recede as cyber and space capabilities grow, Putin said.

--Editors: Paul Abelsky, Zoe Schneeweiss

To contact the reporters on this story: Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net; Stepan Kravchenko in Moscow at skravchenko@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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