Putin’s priorities put the Russian people at risk

Spoiler: Recently released data from The Stockholm International Peace Research Institute (www.sipri.org), shows that Russia continues to prioritise the military. Russian military expenditures as shares in GDP and total government expenditure exceed most countries’.

Spending so much of a country’s resources on the military would be justifiable if the country faces a threat from other countries. But there is no threat. Following the collapse of the Soviet Union, military expenditures in Western Europe decreased significantly and USA withdrew many of its troops, weapons and military equipment from Europe.

But for a president who considers the collapse of the Soviet Union to be a larger geopolitical disaster than the WWII, which cost the lives of at least 20 million Soviet citizens, a strong military is useful for invading one’s neighbouring countries and restore the evil empire.

The Stockholm International Peace Research Institute (www.sipri.org) has a database of military expenditures which makes it possible to compare such for different countries over time. As I showed in this post, comparisons of different countries’ military expenditures are often made in meaningless ways, such as comparisons in absolute numbers.

Military expenditures relative to GDP shows how much of a country’s resources the government is willing to set aside for the military.

The correct way to measure and compare countries’ military expenditures, over time and for a certain year, is to relate them to some entity that reflects the governments’ priorities. Below I will relate the expenditures to GDP and other government expenditures. Expenditures relative to GDP reflect how much of a countries resources that a government is willing to spend on the military. A disadvantage with this is that while military expenditures are often determined in plans encompassing several years and therefore are relatively stable, annual changes in GDP can be quite large due to business fluctuations. The resulting changes in the share of expenditures in GDP can therefore be quite large for reasons unrelated to the governments’ ambitions. The measure should therefore be used for analyses stretching over longer periods of time.

Military expenditures relative to total government expenditures gives a picture of how the government's priorities.

Expenditures relative to other government expenditures better reflects a government’s priorities. Other government expenditures include expenditures on health care, education, elderly care, infrastructure and pensions. Such expenditures tend to be relatively high in countries which strive provide their citizens a decent living standard and welfare. In some countries such as Russia, the government and the president cares more about its military than the welfare of its population, c.f. Figure 1.

Figure 1. Military expenditures as shares in GDP and total government expenditures.

Source: SIPRI military expenditure database,https://www.sipri.org/databases/milex

Part of the relatively higher spending in Russia is due to the low-tech and sub-efficient Russian industry. Russia needs to spend more than other countries in order to attain the same level of military capacity as its industries can’t deliver the Armata tanks  and Su-57 aircraft in time.

From first having bragged about having the situation under control, Putin now has admitted that the situation is serious. How serious it is and will be may never be known. Deaths due to corona virus are understated since the Russian health system is not capable of performing proper diagnoses in a situation like this. According to nurses and doctors who dare to speak out, there are shortages of practically everything. According to this discussion with the prominent Russian economist, Sergei Guriev, things are going to get much worse. At the time of the discussion, 23 April, the number of deaths was doubling every five days. If that’s not stopped and reversed, the number of deaths in Russia will be larger than in France and Italy in two or three weeks. But despite all the chaos and concerns that many more Russians will die, Putin wants to begin to open up Russia on May the 11th.

In Russia, the military is a higher priority than ordinary Russians health.

Russia would have been in a much better position to combat the corona virus, if Putin had put more weight on the Russian people’s welfare when he allocated the budget. While Sweden allocates five times as much to the health care system than to the military, the USA allocates less twice as much to health care. Still this is more than in Russia where Putin thinks that the military is more important the people’s health. The Russian health care system does not even get half of what the military gets, c.f. Figure 2.  

Figure 2. Health expenditures relative military expenditures in Russia, Sweden and the USA.

Source: Military expenditures:SIPRI, www.sipri.org. Health expenditures: UnitedNations Human Development Report 2019,http://hdr.undp.org/en/2019-report Note: Data refers to 2016 which is the latest available year for health expenditures.

With a health care system in chaos, people lose trust in the authorities’ and Putin’s possibilities to manage the health care system not only during the corona outbreak but also afterwards. Patients without the corona syndrome, such as cancer patients, have their treatments postponed. Tragically, many of these die due to Putin’s ignorance.

Given Putin’s priorities, the health care system will take another hit due to the economic crisis. And, as Guriev points out in this discussion, the government’s reaction has been slow, indecisive and ridiculous. The first package only amounted to 0.3 percent of GDP which is nothing compared to what other countries do. More has been done since, but most of the packages comes in terms of loans, not subsidies as in other countries. This is probably due to Putin’s obsession with the budget deficit and foreign debt. As time goes on, the Kremlin will need to do more. A comparison of how different countries try to mitigate the economic crisis can be found here. As of 1^st of May, the overall Russian fiscal measure amount to 1.2% of GDP, the Swedish to 14.6% of GDP and the corresponding in the USA to 9% of GDP. Again, Putin is left wanting.