While defense spending makes up a significant portion of Russia’s economy, the sum itself (an estimated $60 billion in 2020) is quite modest, especially by “great power” standards. In its war against Ukraine, the Russian army is showing the economic weakness of the country

FLORENCE – War represents a contest of wills, the German strategist Carl von Clausewitz argued some 200 years ago. At this point, the Ukrainians fiercely defending their homeland seem to have a clear advantage over the invading Russian forces. But to win a war, the will must be supported by military means, and that requires industrial and economic strength. Here, Russia might have an advantage over Ukraine for now, but she is much weaker than the West, whom she ultimately intends to challenge.

In terms of economic and industrial strength, Russia is a medium-sized power, at best. Its manufacturing output is only half that of Germany, and its GDP is about the same size as Italy’s. The combined GDP of the European Union is almost 10 times greater than that of Russia. And that is before the new round of punitive Western sanctions begins to take its toll.

Given its large economy, Europe can afford to build credible defense capabilities. For European countries to meet their NATO commitment to spend 2% of GDP annually on defense, they need to increase spending by just 0.5% of GDP, on average. Considering that total public spending in these countries currently averages 45% of GDP, this seems entirely feasible.

Even for laggard Germany, the recently announced short-term defense investment of €100 billion ($109 billion) represents only about 2.5% of GDP. Russia, for its part, probably spends more than 4% of its GDP on defense, a significant burden for a country that needs to maintain expensive infrastructure to connect its vast territory.

While defense spending makes up a significant portion of Russia’s economy, the sum itself is quite modest, especially by “great power” standards. Russia spent $60 billion on defense in 2020, compared to Germany’s $50 billion outlay. At that level of spending, and given the corruption that pervades the Russian government, building a large modern fighting force capable of sustaining a protracted conflict, while maintaining a colossal nuclear force and furthering the ambitions of great powers globally, It would be a truly amazing achievement.

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It is an achievement that Russia cannot claim. In fact, it seems that Russia has had a Potemkin army all along. The term “Potemkin” comes from Grigory Aleksandrovich Potemkin, the governor of New Russia who is said to have built fake settlements to impress Catherine the Great during her 1787 voyage to survey Crimea and the newly acquired surrounding territories. But the story of the “Potemkin villages” is largely a myth, and historians disagree about what the Tsarina actually saw on her tour. It seems that Potemkin actually made considerable investments in infrastructure in and around Crimea, but he lacked the resources to link the newly conquered territory with the rest of Russia.

The resulting infrastructure weaknesses, coupled with a lack of logistical capability development, severely limited Russia’s ability to defend itself against British and European forces during the Crimean War 60 years later. Reports that troops in Ukraine today are facing food and fuel shortages suggest that Russia has not learned its lesson. Logistics is always the area most vulnerable to corruption in the military.

Understanding the consequences of the Russian military’s lack of resources requires us to look not only at what happened in Ukraine, but also, and perhaps more importantly, at what did not happen. To begin with, Russia has failed to destroy communications and other electronic control systems.

It has long been widely assumed that Russia would support any military offensive with “devastating” cyberattacks. But this threat has not materialized, presumably because Ukraine is supported by Western intelligence agencies whose cyber warfare capabilities draw on a much larger pool of talent and knowledge than American tech giants.

In fact, just hours before the invasion began, Microsoft detected and blocked malware aimed at wiping data from Ukrainian government ministries and financial institutions. The company later shared the code with other European countries to prevent further use.

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Additionally, SpaceX has shipped Starlink internet terminals to Ukraine to compensate for internet outages in the country. Making the satellite internet system operational in the country will take time, because a large number of base stations must be installed. But this is a matter of weeks, not years.

Another Russian dog that did not bark is the air force, which has not established control of Ukraine’s airspace, despite the fact that Russia has almost 10 times more planes than Ukraine. Yes, Russia deployed a barrage of missiles to destroy radars and airfields on the first day of the invasion. But the first burst was not followed by a second, because the Russian stockpile of precision-guided missiles and other expensive munitions is limited.

Furthermore, Russian pilots appear to be inexperienced, probably because, like precision-guided weapons, effective pilot training is expensive. And finally, crucial weapons delivery systems are out of date.

Putin could have entered this war with a large supply of precision-guided missiles or a large amount of foreign exchange reserves. He chose the latter. Now that half of those reserves have been blocked by unprecedented Western sanctions, he is likely to regret that decision. Given Russia’s limited ability to rapidly ramp up weapons production, especially the production of sophisticated weapons systems, which require inputs it can no longer source from abroad, Putin’s prospects for sustaining his war in Ukraine appear limited.

In a fight between two equally motivated opponents, broad economic and industrial strength is decisive. Putin has launched a war from a weak material starting point. He has motivated Europe to start investing in its own defense. He has set Russia on a course of economic demoralization. And, above all, he has motivated Ukrainians to fight fiercely for their freedom.

If the Ukrainians manage to hold out during the period of the initial attack, their determination, coupled with potentially limitless Western support, could turn the tide of Putin’s war and the Putin regime.

The author

Daniel Gros is a Board Member and Distinguished Fellow of the Center for European Policy Studies. Copyright: Project Syndicate, 2020


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