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Politics : Foreign Policy Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (8874)	9/5/2008 1:30:02 PM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 15987

RUSSIA: ON A DEFENSE SPENDING BINGE (as very peaceful country) 9/04/08 An analysis of Russia’s state spending shows that Vladimir Putin’s Kremlin is taking the country in a dangerous direction, girding for a new Cold War while neglecting the domestic infrastructure. Military and security spending is so lopsided in Russia that the country’s cash cow - the energy sector - is being starved of funds. According to figures recently released by the State Committee for Statistics, Russia’s revenue for the first half of 2008 amounted to almost 4.4 trillion rubles, or, at the current exchange rate, about $176.5 billion. Expenditures totaled almost 3 trillion rubles, or $120.9 billion. Overall, the Russian government is projected to spend almost 7 trillion rubles, or $278.6 billion, under the full-year 2008 budget. A breakdown of federal expenditures during the first half of the year indicates that Russia is muscling up, spending lavishly on defense and security. At least one-quarter of Russia’s expenditures during the first six months of 2008, or $31.2 billion, was directly devoted to those two sectors. Given the fact that the budget also contains almost $15 billion for discretionary spending, the actual share of defense-security spending during the time period could hover around 35 percent. Long before Russian troops swarmed into Georgia, military-security spending was projected to accelerate during the second half of the year. If discretionary funds are included, the share of military-security outlays for all of 2008 is projected to approach 40 percent. ............................................. The rapid shrinkage of surpluses could have profound geopolitical ramifications for Russia, as in recent months the Kremlin, operating through state-controlled conglomerates such as Gazprom, has been able to purchase the allegiance of Central Asian states, especially Turkmenistan and Uzbekistan. During a September 2 visit to Uzbekistan, for example, Russia’s political supremo Vladimir Putin was able to convince Uzbek leaders to agree to the construction of a new Central Asian gas pipeline by promising to pay higher prices for Uzbek gas. Current spending patterns could leave Russia dangerously exposed to sudden shifts in global economic conditions down the road. The budget suggests that the Kremlin is not giving much thought to contingency planning, despite the presence of warning signs, such as double-digit inflation. In a report issued in June, the International Monetary Fund expressed concern that the Russian economy was overheating. eurasianet.org