NEWSWATCH: Russia’s military budget may shrink 10 percent in 2015 – Rostec

File Photo of Russian Tanks in Military Parade

[“Russia’s military budget may shrink 10 pct in 2015 – Rostec” – Reuters – Stanley Carvalho – Feb. 23, 2015]

Reuters covers news that Russian defense spending might shrink this year, due to the impact of Ukraine-related sanctions.

Finance Minister Anton Siluanov previously had said that 10 percent cuts to government spending would spare defense.

But on Monday the head of a state-owned defense conglomerate Rostec predicted cuts would hit military spending as well.

The country’s defence spending will be watched closely …, mainly in view of events in Ukraine, with Western nations accusing Moscow of providing weapons and soldiers to a separatist revolt …. Russia denies it has troops in eastern Ukraine.

* * *
… even favoured ‘power ministries’ are beginning to feel the pressure of Russia’s economic crisis … Sergei Chemezov … key ally of Putin and among those targeted by Western sanctions … indicated on Monday that cuts could even impact the military.

‘It could shrink a bit, within 10 percent, but a decision is not yet made”…

Complicating matters, ironically it was Ukraine that used to supply some of Russia’s military needs, such that Russia now has to shift to domestic production to make up the difference.

‘Sanctions have given us a kick to produce our own (equipment),’ said Chemezov. ‘Before sanctions we procured from Ukraine, which has many defence plants and factories. By 2017, we plan to substitute all our imports.’

But Russia also will look to their arms industry as a source of revenue to potentially compensate for slumping oil.

Click here for “Russia’s military budget may shrink 10 pct in 2015 – Rostec”

Comment