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    Military budget of the Russian Federation

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    Viktor
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    Re: Military budget of the Russian Federation

    Post  Viktor on Tue Jan 06, 2015 5:49 pm

    Kimppis wrote:I did some VERY unscientific calculations...

    It would be interested to see those calculations and perhaps even make some corections with the help of other members.

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    Re: Military budget of the Russian Federation

    Post  Kimppis on Tue Jan 06, 2015 6:03 pm

    sepheronx wrote:Take into account that majority of this is into procuring equipment (Sap2020) and that after procurment, Russias modernization of military will stand at 70%, so there will be another SAP to deal with the next 30%, which I imagine will be a smaller number (much smaller) and after that, military budget will plung to maintaining gear, R&D, and procurement of additional equipment here and there. Only purpose for this massive budget is because of procurment (creates a lot of jobs) and restructuring. I imagine 10 years from now, western monkeys will be swinging from the chandaleres, screeching how well they did in "hurting" Rus economy that they "had to drop" defense spending, when reality is that it is because the SAP's are done and no need for mass modernization anymore.

    Hopefully by then, most defense companies would be involved in import substitution. Would love to buy cutlery and a TV with the Mikoyan/sokol brand name or a vehicle/truck with the Kalashnikov brand.

    But my point kind of was that it's not even that big, the official figure. It's "only" around 4% of the GDP, 20% of the budget, comparable to the US. If it gets considerably lower, it would less than UK's military spending. If by "much smaller" you mean something like 3% of the GDP, then I can understand but the official numbers are not that large to begin with.

    And as I said, with only a budget of 30-50 billion they didn't modernize basically at all. Now, with 70 billion, they procure massive amounts of equipment and conduct massive exercises, improve housing, etc., etc.. It's not only weapons. And that's why I really don't understand the numbers. The difference is massive but the budget really isn't that much different.

    They should keep roughly this amount of spending and I don't see why they couldn't. But sure, the percentage to the GDP is probably going to get slightly smaller and less will used to buy new equipment, when there is no need.

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    Re: Military budget of the Russian Federation

    Post  Kimppis on Tue Jan 06, 2015 6:15 pm

    Viktor wrote:
    Kimppis wrote:I did some VERY unscientific calculations...

    It would be interested to see those calculations and perhaps even make some corections with the help of other members.

    I showed pretty much all of them in that post. Very Happy As I said, VERY unscientific.

    Russian military spending was supposed to be $90 billion before the fall of the ruble. That still stands, because of Russia's domestic military industry. By purchasing power, Russia GDP is (was, before ruble lost its value) around 40% higher than in dollar terms. So I simply increased that 90 billion by 40%. I did the same thing with China.

    They certainly get more bang for their buck than the western militaries, in dollar terms, as we can see with the current Russian modernization. So around $130 billion could be a more accurate figure when we compare Russian military spending to some other countries, especially in the west.


    Last edited by Kimppis on Tue Jan 06, 2015 8:03 pm; edited 2 times in total

    AbsoluteZero
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    Re: Military budget of the Russian Federation

    Post  AbsoluteZero on Tue Jan 06, 2015 7:45 pm

    So when the Military shifts its funding from production to maintenance in the next decade, isnt that going to affect the military industrial complex? I mean, without new orders how would the factories maintain the production lines and technological expertise? Or maybe they wiill switch to dual purpose products and probably secure orders abroad

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    Re: Military budget of the Russian Federation

    Post  Kyo on Tue Jan 06, 2015 11:23 pm

    Kimppis wrote:
    Viktor wrote:
    Kimppis wrote:I did some VERY unscientific calculations...

    It would be interested to see those calculations and perhaps even make some corections with the help of other members.

    I showed pretty much all of them in that post. Very Happy As I said, VERY unscientific.

    Russian military spending was supposed to be $90 billion before the fall of the ruble. That still stands, because of Russia's domestic military industry. By purchasing power, Russia GDP is (was, before ruble lost its value) around 40% higher than in dollar terms. So I simply increased that 90 billion by 40%. I did the same thing with China.

    They certainly get more bang for their buck than the western militaries, in dollar terms, as we can see with the current Russian modernization. So around $130 billion could be a more accurate figure when we compare Russian military spending to some other countries, especially in the west.

    Interesting. Generally speaking international economic comparisons can be very misleading because they use the exchange rate, which in monetary terms might mean something, but in real economic terms it means almost nothing. I fully agree with Kimppis that Russia certainly gets more punch for their buck than western militaries in US dollar terms, but the purchasing power of the ruble in the internal Russian economy is much higher than it would appear to be when converted to an international currency. It all depends on the prices' level (including manpower costs), which in Russia are significantly lower than in western economies. Therefore, I would agree to raise Russia's GDP by something around 40% in dollar terms for the effect of international comparisons, although I would raise Russia's and China's military budget by a much higher level due to much lower wages. The cost-effectiveness of investing the equivalent of one dollar in the Russian or Chinese military is tremendously higher than investing the same dollar in western military countries. That's why Russia, with its much lower budget is building a military might that raises concerns in the US/EU.

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    Re: Military budget of the Russian Federation

    Post  GarryB on Wed Jan 07, 2015 1:04 am

    Maintainence and attrition replacements will still be needed, plus hopefully export orders will have most plants busy.

    Certainly civilian products will also keep the lines busy too.

    As long as they scale production levels correctly they should be OK... their current production rates are not ambitious, so they should be able to continue working for longer.


    Last edited by GarryB on Wed Jan 07, 2015 2:37 am; edited 1 time in total


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    Re: Military budget of the Russian Federation

    Post  Vann7 on Wed Jan 07, 2015 2:10 am

    Kimppis wrote:I did some VERY unscientific calculations... Russia's nominal GDP per capita used to be 14k before the fall of the ruble. It is 23k by PPP, IIRC. In other words, the nominal GDP is only 60% of the PPP value. So Russia's "real" military budget is also 40% higher. Military budget will rise 30% this year. That is $90 billion, old ruble rate. And let's increase that by 40% and we get roughly around $130 billion. US military budget is 510 billion. So Russia's military budget, without 10 supercarriers, hundreds of foreign military bases, etc., is pretty much exactly 1/4th of the US budget. IMO that is atleast much closer to the truth.  

    China's situation is pretty much the same. This year, their budget should be around $150 billion. We get $210 billion.

    Their combined budget would be around $350 billion vs. the US $510 billion. Not bad. And at this rate the Chinese budget will keep increasing considerably every single year. (And no, I'm not saying there's a military alliance between them, just for the lulz.)

    Why people always think the Dollar vs RUble ration have any direct influence on Russian military defense budget?
    As far as i know Russia defense industry does not depends on american technology of artificial manipulated benchmarks in jewyork wallstreet..  So if Russia orders 20-30 submarines and they cost in 2013 10 trillions rubles
    in 2013.. the price will be the same in 2015 with the current undervalued ruble in the west.. because Russia does not depend on American dollars.. for its domestic industry .. only for trading with the west. So yeah Iphones will be way more expensive... but their yasen and borei submarines.. and 99% of their defense industry ,there is zero reasons for the purchasing power of the Ruble inside of Russia to be different.  So yes it is misleading benchmark how nations economy are valued by brainwashed people in the west.. because Russia defense industry does NOT depend on how wallstreet value the Ruble..   The americans could easily declare economic war directly to Russia..and stop accepting Rubles.. which means value = 0.. but that will not change the value of the Ruble inside Russia.


    anyone who calculate Russian Defense budget.. based on manipulated numbers of ruble vs Dollars.. is misleading itself and others.  Ruble vs Dollars value is IRRELEVANT inside Russia domestic Industry.. So the Defense minister saying that their defense budget will increase by up to 40% only means.. more warship and submarines and military hardware.. NOT LESS. and how the dollar is artificially valued is wallstreet is meaningless . Because Russian Ruble have not lost its value inside of Russia..military hardware is valued in Rubles. not dollars and is made in Russia.

    The propaganda in the west is amazing ,that Ruble will not even have value to buy toilet paper and other nonsense.
    because of how weak is in comparison with over valued dollars.. and thats completely FALSE.. because again Dollar value means nothing for Russian Defense industry.. it only matters for importing foreign products in Russia..

    Russia is already independent on its defense industry. Not many nations can say the same.. and fully independent too in their space technology too.. Russia only need to do the same with their food industry and civilian technology either for business ,health or entertainment.. which pretty much they can do.. and become a truly free nation of western manipulated economies.

    The moral story here.. is that NATIONs economy is much more than wallstreet and american financial system . A nation can build its economy completely Independent of western markets manipulation and be very very rich..with a fully developed modern nation , while at the same time its currency have ZERO value in the west. In fact not even paper money is need for trading..  Looks at Argentina.. and IRAN ,under American financial system its currency have zero value.. but their economy continue developing its nation ,business as usual. For foreign trade they not even use paper money.. Same with IRAN..  The real economy is not paper money.. but goods.. real material things. You can see that more clearly in war times.. that nobody use paper money for trading.. but Gold..  i bet you didn't knew that. US dollar only matters for importing  american products.. same with Euro currency. This is why this western currency war is a good opportunity for RUssia  to move their economy to Asia but more importantly to develop fully its nation industry.. and build Russia economy completely irrelevant of US dollar domination in the financial market.

    The dollar value ,how fraudulent is the western system should be obvious for anyone ,when the Ukraine currency was rated better than the Russian Ruble..  lol1   How can anyone believe such bullshit? A nation that cannot feed its army ..and depend everything from the outside.. do not have anymore anything of value to sell other than its womens  ,that is on the middle of a war and losing territory and needs US and EU to get energy from Russia???

    The only thing misleading here.. is US financial petrodollar system. US sells paper money as if that was goods..
    and print paper money from thing air..and continue expanding its debts and never pays it. Once BRICS countries start trading only in their own currencies it will significantly impact US dollar presence in the world and its value will sink.




    Last edited by Vann7 on Wed Jan 07, 2015 3:19 am; edited 10 times in total

    sepheronx
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    Re: Military budget of the Russian Federation

    Post  sepheronx on Wed Jan 07, 2015 2:18 am

    GarryB wrote:Maintainence and attrition replacements will still be needed, plus hopefully export orders will have most plants busy.

    Certainly civilian products will also keep the lines busy too.

    Uralvagonzavod produces civilian equipment as an example:
    - Railway cart systems like tankers and carts (transportation of goods via rail)
    - Construction working equipment like excavators and miniloaders
    - Railmover
    - Tractors

    This company is known for producing T-72 and T-90 type tanks and heavy tank like systems.

    Kamaz produces military grade trucks but also produces majority of Russia's shunting trucks and semi's used for logistics.  This same goes for UAZ and Zil and all the rest.

    In the future, there should be more.  At one point, Izmash used to produce cars and motorbikes, but it doesn't look like it anymore.  Would like to see other products from Izmash on the market like cutlery, tools, etc.

    Kyo wrote:
    Kimppis wrote:
    Viktor wrote:
    Kimppis wrote:I did some VERY unscientific calculations...

    It would be interested to see those calculations and perhaps even make some corections with the help of other members.

    I showed pretty much all of them in that post. Very Happy As I said, VERY unscientific.

    Russian military spending was supposed to be $90 billion before the fall of the ruble. That still stands, because of Russia's domestic military industry. By purchasing power, Russia GDP is (was, before ruble lost its value) around 40% higher than in dollar terms. So I simply increased that 90 billion by 40%. I did the same thing with China.

    They certainly get more bang for their buck than the western militaries, in dollar terms, as we can see with the current Russian modernization. So around $130 billion could be a more accurate figure when we compare Russian military spending to some other countries, especially in the west.

    Interesting. Generally speaking international economic comparisons can be very misleading because they use the exchange rate, which in monetary terms might mean something, but in real economic terms it means almost nothing. I fully agree with Kimppis that Russia certainly gets more punch for their buck than western militaries in US dollar terms, but the purchasing power of the ruble in the internal Russian economy is much higher than it would appear to be when converted to an international currency. It all depends on the prices' level (including manpower costs), which in Russia are significantly lower than in western economies. Therefore, I would agree to raise Russia's GDP by something around 40% in dollar terms for the effect of international comparisons, although I would raise Russia's and China's military budget by a much higher level due to much lower wages. The cost-effectiveness of investing the equivalent of one dollar in the Russian or Chinese military is tremendously higher than investing the same dollar in western military countries. That's why Russia, with its much lower budget is building a military might that raises concerns in the US/EU.

    Problem with Nominal GDP comparisons is that once your currency drops in value greatly, so does its GDP nominal value compared to other countries (which are all compared within USD). This is a flawed logic as this is mentioned under GDP PPP:
    For example, if the value of the Mexican peso falls by half compared to the US dollar, the Mexican Gross Domestic Product measured in dollars will also halve. However, this exchange rate results from international trade and financial markets. It does not necessarily mean that Mexicans are poorer by a half; if incomes and prices measured in pesos stay the same, they will be no worse off assuming that imported goods are not essential to the quality of life of individuals. Measuring income in different countries using PPP exchange rates helps to avoid this problem.
    Which is the exact thing happening in Russia. Just because the value of the Ruble dropped in half, does not mean that their wealth or the nation itself is half as rich as before. This is important as Russia produces all goods for military and imports have dropped significantly for military production (technically, reason for MCST and Mikron is to replace imports of semiconductors for military production. Elbrus 2C+ processor is used for radar systems as an example).

    At 32% of budget (if it is even close to that, don't know total budget numbers), that is still less than what US spends on a budget for their military. Russia also has a significant amount spent on social welfare (people are given free education through the state run universities, now free housing for families with 3 or more kids, public medical care system so you don't go broke for a basic doctors visit, etc). After all of that, that still leaves the nation with roughly 35% left in budget to spend on infrastructure projects, venture funds, etc. That is still a lot of money. Not to mention that the previous two ties into the third aspect in bringing in a higher budget and helping reduce governments work in infrastructure development as many companies who work in the military and civillian sphere, will get enough money to expand productions and increase workforce (which creates more taxable income), example is Almaz Antey as of recent (building two new facilities as example), and medical needs and schooling needs which creates new technologies that can be used in multipurpose.

    One major aspect to all of this is the cost of a soldier in Russia and the Cost of the equipment vs anywhere else. A T-90A tank, which is equivelent to any other modern MBT, costs roughly $2M per unit, while an Abrahms or Leopard II (which are usually on par with the T-90A in performance) is estimated at around $4 - $5M per unit. That is double or more than average price of T-90A. Another one that is coming up recently is the India's Rafale Bid. A Rafale costs roughly $150M per unit in what the contract states (mind you, that also includes maintenance and what not), while the Su-30MKI (which is arguably either better or the same) costs about a 1/3 of that (this is export price, which is higher than Russian prices by normal) at a $50M per unit. Su-30MKI has a farther ferry range, high payload, and about similar electronics onboard (actually, both use same Thales HUD, Domacles pod and possibly EW equipment) while Su-30MKI has a more advanced PESA radar with the Bars-M while Rafale is possibly more low observable than Su-30MKI (not verified). PAK FA aircraft at first may cost upwards to $100M per unit, and you will get yourself a 5th gen jet with advanced AESA radar similar to the Irbis-E Hybrid Radar on Su-35S, far more advanced electronic suite, its own Optoelectronics pod, internal weapon bays, greater range and speed than a Rafale, while still being $50B cheaper. After the devaluation of the Ruble, it now allows Russian military equipment to be even more cheaper for outsiders to purchase, thus exports will be greater. In the coming while, Iraq and Egypt are interested in more Russian mil equipment, and that can expand to Argentina, Brazil, further orders with India and China.

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    Re: Military budget of the Russian Federation

    Post  type055 on Wed Jan 07, 2015 9:13 am

    talking about miliatary budget I am curious why India budget is so small.
    Coz India is the biggest buyer in military market recent years. They buy a lot of weapons and they need find a way to integrate weapon from different sources . it need money
    Plus they have more than 1 million soldier to feed. How could they get a smaller budget than japan only has 200,000 man in service .
    And a lot domestic weapon research programs need money .
    It's a miracle

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    Re: Military budget of the Russian Federation

    Post  Austin on Wed Jan 07, 2015 9:36 am

    ^^^ PPP what a $1 can buy in India , US or Russia. We are third largest economy by PPP method

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    Re: Military budget of the Russian Federation

    Post  type055 on Wed Jan 07, 2015 9:39 am

    I think Russia military budget is big enough compare with their GDP. 4% of GDP is high in major military power .
    Ussr failed coz they use more than10%gdp in military and ignore develop their economy
    Russia can slightly slow down their weapon modernization .cos Russia has more than 5000 n bomb . Russia is safe no one really wants to has a hot war with Russia . So just keep the intercontinental missle and nuclear sub program .
    Economy is the foundation of military , no. Economy= no military. Even though Ussr has very powerful military mic ,they can't stand long .
    Now Russia economy rely on nature resource export . It's dangerous . Russia need modify their economy structure. So does china

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    Re: Military budget of the Russian Federation

    Post  sepheronx on Wed Jan 07, 2015 2:59 pm

    USSR had a mil budget of 40% of GDP. It was bad.

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    Re: Military budget of the Russian Federation

    Post  sepheronx on Wed Jan 07, 2015 3:02 pm

    Austin wrote:^^^ PPP what a $1 can buy in India , US or Russia. We are third largest economy by PPP method

    Not quite. It is what 1 rupee can get you in india. What you described is nominal. Because the Su-30MKI and T-90S are partially made and all assembled in India, that greatly reduced costs and that means India can get away with a budget in mil, calculated in USD and still get a lot of weapons.

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    Re: Military budget of the Russian Federation

    Post  Kimppis on Wed Jan 07, 2015 4:59 pm

    sepheronx wrote:USSR had a mil budget of 40% of GDP. It was bad.

    No way it was 40%, that's ridiculous. Maybe 20-25, we'll probably never know the exact figures. They had a reasonable standard of living, especially during the 60s and 70s. That would've been totally impossible with a military budget of 40% of the GDP. But yes, it was bad, and most importantly just got worse and worse.

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    Re: Military budget of the Russian Federation

    Post  George1 on Wed Jan 07, 2015 5:44 pm

    Kimppis wrote:
    sepheronx wrote:USSR had a mil budget of 40% of GDP. It was bad.

    No way it was 40%, that's ridiculous. Maybe 20-25, we'll probably never know the exact figures. They had a reasonable standard of living, especially during the 60s and 70s. That would've been totally impossible with a military budget of 40% of the GDP. But yes, it was bad, and most importantly just got worse and worse.

    i think USSR had around 15% of GDP for military budget

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    Re: Military budget of the Russian Federation

    Post  Kimppis on Wed Jan 07, 2015 6:41 pm

    George1 wrote:
    Kimppis wrote:
    sepheronx wrote:USSR had a mil budget of 40% of GDP. It was bad.

    No way it was 40%, that's ridiculous. Maybe 20-25, we'll probably never know the exact figures. They had a reasonable standard of living, especially during the 60s and 70s. That would've been totally impossible with a military budget of 40% of the GDP. But yes, it was bad, and most importantly just got worse and worse.

    i think USSR had around 15% of GDP for military budget

    Yeah, In my opinion that's a figure that would make the most sense. First of all, USSR's economy was something like 50-60% of the US, by PPP. And If I remember correctly, US allocated something like 6-8% of GDP for the military. So that way their military spending would have been very similar. Regarding the USSR military budget, I've read how the Soviets had 40% or 50% of their GDP for the military according to some, but usually the numbers are at around 20, which is atleast plausible. The numbers are just all over the place. They were extremely secretive about their military spending.

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    Re: Military budget of the Russian Federation

    Post  George1 on Wed Jan 07, 2015 6:44 pm

    Kimppis wrote:
    George1 wrote:

    i think USSR had around 15% of GDP for military budget

    Yeah, In my opinion that's a figure that would make the most sense. First of all, USSR's economy was something like 50-60% of the US, by PPP. And If I remember correctly, US allocated something like 6-8% of GDP for the military. So that way their military spending would have been very similar. Regarding the USSR military budget, I've read how the Soviets had 40% or 50% of their GDP for the military according to some, but usually the numbers are at around 20, which is atleast plausible. The numbers are just all over the place. They were extremely secretive about their military spending.

    yes and consider that 6-8% of USA military budget was the highest rates (vietnam war, 80s build up)

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    Re: Military budget of the Russian Federation

    Post  GarryB on Thu Jan 08, 2015 8:44 am

    It wasn't the Soviets military budget that was the problem... look at Cuba or North Korea or Iran.

    It is economic isolation and sanctions from the west that did in the Soviet Union.

    Look at Communist China and the enormous growth it enjoyed when it was being used as a pawn against the Soviet Union in the wests game of the enemy of my enemy is my friend logic.


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    Re: Military budget of the Russian Federation

    Post  sepheronx on Thu Jan 08, 2015 9:46 am

    GarryB wrote:It wasn't the Soviets military budget that was the problem... look at Cuba or North Korea or Iran.

    It is economic isolation and sanctions from the west that did in the Soviet Union.

    Look at Communist China and the enormous growth it enjoyed when it was being used as a pawn against the Soviet Union in the wests game of the enemy of my enemy is my friend logic.

    No it wasnt. The concept of gdp was pointless to Soviets. What did them in was their own stupidity in not financing other sectors of economy. Canada was exporting farming equipment to soviet union cause they didnt build their own (or at least not modern ones). Now they make their own. Sanctions hasnt brought down any nation. Iran has been blocaded for 30+ years and they are still around and not doing bad economically. They like to pretend that sanctions work, but they dont. No real example of them ever working. Sovoets let themselves fall apart with the spat between gorby and yeltsin. If that didnt happen, SU would possibly be around still.

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    Re: Military budget of the Russian Federation

    Post  Kyo on Thu Jan 08, 2015 8:36 pm

    sepheronx wrote: Sanctions hasnt brought down any nation... Sovoets let themselves fall apart with the spat between gorby and yeltsin. If that didnt happen, SU would possibly be around still.

    I must agree. Ever since the Bukharin vs. Preobrazhensky debate in the 20s (which Preobrazhensky won) that led to the fall of the NEP (New Economic Policy) and an emphasis in industrialization, Soviet agriculture, with its kolkhozes and sovkhozes, was never a priority. The relatively limited agricultural output of the SU was mainly channelled to feed the massive Red Army, the bureaucracy and the industrial manpower.

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    Re: Military budget of the Russian Federation

    Post  Kyo on Tue Jan 20, 2015 8:26 pm

    Expenditures on state arms programme not cut yet: Rogozin

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    Re: Military budget of the Russian Federation

    Post  Viktor on Fri Jan 23, 2015 7:08 pm

    Interesting thumbsup

    By 2020, up to 70% of the budget will be allocated to the Ministry of Defense of the Russian Federation for the purchase of new equipment

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    Re: Military budget of the Russian Federation

    Post  Kyo on Sat Jan 24, 2015 1:03 am

    Half of Russian Defense Ministry's expenditures in 2015 to be used on armament program

    Expenses on the defense industry will not be cut regardless the current economic situation, deputy chairman of the Military Industrial Commission board Oleg Bochkarev said earlier

    ST. PETERSBURG, January 23. /TASS/. Russian Defense Ministry will have more than half of its spending in 2015 to fund a state-financed armament program, Deputy Defense Minister Tatiana Shevtsova said at a lecture delivered for students of St. Petersburg State Economic University on Friday.
    “This year the Defense Ministry will channel more than half of all expenditures to fund the state armament program,” Shevtsova said.
    Expenses on the defense industry will not be cut regardless the current economic situation, deputy chairman of the Military Industrial Commission board Oleg Bochkarev said earlier. The state defense order will grow by more than 20% year on year in 2015 and by more than 40% in 2017, he said.


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    Re: Military budget of the Russian Federation

    Post  Kyo on Sun Jan 25, 2015 7:53 pm

    Defaults on defense order in 2014 made up for in 2015

    Obligations under the state defense order in 2014 made 95%, but there are failures on a number of points, they are brought under control and will be completed within 1-2 quarters of 2015, said Deputy Minister of Defence of the Russian Federation Yuri Borisov.

    MOSCOW, January 24 - RIA Novosti. Plucked obligations on state defense orders in 2014 were followed up and will be implemented in the 1-2 quarter of 2015, said on Saturday, Deputy Defense Minister Yuri Borisov.

    GOZ-2014 reached 95%, but there are a number of failures on some points, recalled the official.

    "They were all taken under control. Reconcile Now" dogonochnye "graphics performance of those outstanding commitments," - Borisov said in the program "General Staff" on radio RSN. He noted that in the 1-2 quarter of 2015, these obligations will be met.

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    Re: Military budget of the Russian Federation

    Post  George1 on Fri Feb 27, 2015 11:00 pm

    Russia's military budget may shrink 10 percent in 2015 - Rostec

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