Between Guns, Bread and Common Sense
No. 2 2013 April/June
Pavel Zolotarev

Deputy Director of the Institute for U.S. and Canadian Studies of the Russian Academy of Sciences.

Ways to Optimize Military Expenditures

Budget cuts, including those in military spending, will remain a relevant issue for most countries in the foreseeable future. The possibility for economic maneuvering will primarily depend on the budget structure and the proper correlation between the state’s traditional expenditures (defense and security) and modern public expenditures (social welfare, education, healthcare).

Being under NATO’s collective defense umbrella, European countries have already cut their military spending to two percent of GDP or even more. When the economic crisis forced them to reduce public expenditures, they had no other way but make social security cuts. However, the events in Greece and some other countries have shown that such measures are fraught with the risk of political destabilization. In the United States, social security expenditures are legislatively protected. Unlike in other developed countries where public vs defense expenditures ratio is 6 to 1, in the U.S. it is only 3 to 1. However, with a large GDP, the U.S. surpasses all other countries in terms of education and healthcare expenditures both in absolute figures and in per capita terms. But this does not mean that America can infringe on social obligations and lower the ratio below the 3:1 level. As a result, the Americans have to economize on national defense.

Barack Obama declared defense budget cuts to be among U.S. objectives during his first presidential term. Some steps to this end have already been identified and are being taken and others are to follow. The tasks facing the Pentagon will be correlated with the actual national security needs. Programs based on traditional approaches to armed conflicts (wars of the past) are either being frozen or removed from the list of priorities.

Strange as it may seem, the situation in Russia is somewhat similar to that in the U.S. Neither country can cut state expenditures at the expense of public sectors but both can optimize military spending to avoid social tensions and damage to national security.

Russia’s defense expenditures have been growing steadily of late. Official statistics show that they will increase from 3 percent of GDP in 2012 to 3.7 percent by 2015. However, estimates differ because of the complex calculation methods used and a special structure of the Russian economy. According to SIPRI and some unofficial Russian experts, the country spends about 4.3 percent of GDP on defense now and this amount will increase to at least 4.8 percent by 2015. Such figures are characteristic of developing countries. But attempts have been made to bring the structure of the Russian budget in line with that of developed countries. Although education and healthcare expenditures in the federal budget are declining, their consolidated value is actually growing.

As budget revenues continue to depend on the export of natural resources, attempts to increase defense and social expenditures at the same time obviously hold back qualitative changes in the economy. The ultimate goal should apparently be 2.5-3 percent of GDP. This is the range within which the Armed Forces should maintain their combat capability and develop further, relying largely on the creation of up-to-date weapons and military hardware.


The current trend is such that military force is gradually turning from a foreign policy tool into a military power potential. The purpose is to solve political tasks without using military force but relying entirely on the superiority in military potential. This trend is consistent with developed countries’ common interest in preserving the stability of the global economic and financial systems, which makes regional and local, let alone large-scale, conflicts undesirable. As a result, the probability of interstate confrontation decreases and large-scale conflicts become less likely. Nevertheless, countries seeking world power status have to consistently build up their military capability as the latter’s role can hardly decrease in an unpredictable international situation (efforts to build a polycentric world order, growing energy needs with limited energy resources, global environmental problems, etc.).

Endowed with the world’s largest territory and rich mineral resources, Russia should be prepared for any conflict, including a large-scale war.

In accordance with the Russian Military Doctrine, the level of preparedness for armed conflicts is defined on the basis of military risk analysis. A military risk cannot turn immediately into a military threat as any conflict is preceded by a long period of information warfare. It is then that the scale of possible confrontation is determined.

To optimize defense budgets, it is critical to clearly formulate peacetime tasks and mobilization/deployment plans with regard to possible conflicts of different scale. A peacetime army should be capable of carrying out missions during armed conflicts, peacekeeping operations and local wars without additional mobilization efforts. Weapon and military hardware reserves should be maintained at levels sufficient for solving these tasks without further mobilization and deployment, but the army should be ready to build up its military capability.

There is no need to keep a peacetime army in a state of readiness for a regional war as its likelihood is low and before a military risk develops into a military threat there will be enough time to build up military capability in the threatened area, launch production under mobilization plans and augment weapon and military hardware reserves.

A large-scale war is highly unlikely and may break out as a result of long escalation of military threats and local conflicts. Planning for such conflicts can include long periods allowing for changes in recruitment plans for troops and training of reservists, for the creation of additional industrial capacities and acquisition of long-term contracts for the development and production of new weapons and military hardware.

Nuclear capabilities should be directed towards containing armed conflicts (preventing a local war from escalating into a regional one, and a regional war into a large-scale one). This is one of the key elements of information confrontation. Information warfare capabilities have to be used constantly as deterrence, starting at the armed conflict stage.

This prompts conclusions on priority funding for certain components of the Armed Forces and plans for their combat training and use. The following would appear to be optimal:

  •  The main financial resources under current planning programs should be used to solve concrete tasks in armed conflicts, peacekeeping operations and local wars.
  •  The main financial resources under medium-term planning programs should be used to solve tasks in a regional war.
  •  The main resources under long-term planning programs should be used to solve tasks in a large-scale war.

Clearly, current planning should also provide for funding for fighting a large-scale war, but its amount and priority may not be high. Expenditures can be optimized as part of current planning as well. For Russia, there are threats of local conflicts in neighboring countries. This gives priority to raising the capabilities to participate in peacekeeping operations, including peace enforcement ones, and fight irregular armed groups (gangs, terrorist and subversive groups, etc.). Experience shows that such tasks go beyond the capabilities of the Army and may require coordinated actions by all armed services, except for the strategic missile forces.

The probability of local conflicts in neighboring countries necessitates increased attention to the security of infrastructure, transport routes and communication lines. Are there enough weapons, military equipment and trained personnel for that? Just as in modern local conflicts, special task forces and the training of troops to fight paramilitary groups play an increasingly growing role in such missions. Manning units for such operations is a necessity but it is hard to prepare enough trained reservists for them. Therefore, each man in these units should have proper equipment, including communication and control systems, which will enable them to fight effectively with minimal losses. But this is a challenging task given the current level of the supply of communications, command and control equipment to tactical units.

It would be advisable to study the experience of coalition operations in Iraq and Afghanistan and acquire military hardware that is specifically designed for combat in such environments and has proved effective. Since only a limited amount of such hardware would be necessary and there is no need to organize its serial production, it would be unjustified and too costly for the country to develop and make its own equipment of this kind.

On the whole, there are two tasks to consider separately: readiness to act in local conflicts and readiness to act in peacekeeping operations and against guerilla groups. The solution involves different methods and forms of combat and some differences in weapon and military hardware requirements. In addition, local armed conflicts are based on interstate contradictions, whereas guerrilla activities are not directly related to the latter, except when they are used and supported by other countries in their own interests. In this case, responding to such threats would be a shared concern of several countries.

It would make no sense for every country to develop its own special equipment and weapons to respond to such threats because their import creates no risk of making national security dependent on the policies of other states. For example, buying a limited number of Iveco LMV M65 armored vehicles for the Defense and Interior Ministries and the Federal Security Service is justified. These are anti-mine protected vehicles that can withstand explosions of up to 6 kilograms of TNT. These vehicles are better suited for fighting irregular armed groups than Russia’s GAZ 233014 Tigr (Tiger) vehicles. However, it would hardly be advisable to buy Centauro-type vehicles intended for conventional combat operations because Russia can design similar vehicles and launch their cost-effective serial production so that the army does not depend on supplies from a NATO country. A similar approach can be applied to communication and control systems for troops engaged in peacekeeping missions and combat operations against irregular armed groups. Communication and control systems in coalition forces must be compatible.

The security of maritime transport and communication networks can also be listed among priorities. The security of surface water routes is not a new task, but solving a similar task under water will require the use of new technologies to detect and localize threats, as well as technical and organizational solutions to respond to them. But expenditures can be optimized here too through international cooperation as many other countries are facing similar problems as well.

On the whole, several new factors have to be taken into account and new weapons and military hardware, other than those used in conventional combat, need to be created for a peacetime army to make it able to solve its tasks such as stopping armed conflicts, carrying out peacekeeping operations and fighting local wars. At the same time, some of these tasks can be solved through military and military-technical cooperation with other countries, including NATO member states, and this can also help optimize current military expenditures.


National security priorities should also include nuclear deterrence and spending in this field can be optimized as well.

The naval component of Russia’s strategic nuclear forces is present in both the Northern and Pacific Fleets. It is not a secret that both assign a considerable part of their capabilities to ensuring the security of this component. Obviously, the role of the Pacific Fleet’s general-purpose forces will grow in the foreseeable future as China, the U.S. and Japan continue to build up their navies in that part of the world. At the same time, the need to maintain the combat sustainability of ballistic missile submarines in the region will distract the Pacific Fleet’s main forces and make them focus on solving this task. Also, one has to take into account a possible enhancement of the U.S. regional missile defense capabilities, which include antimissile defense systems aboard Japanese ships (once SM-3 Block IIB interceptor missiles become available). It would be advisable for Russia therefore to concentrate the naval component of its strategic nuclear forces in the Northern Fleet only. In this case, it will take fewer general-purpose forces to ensure greater sustainability of the sea-based strategic nuclear forces. In addition, the reliability of submarine communication and control in the Northern Fleet-controlled area is higher than in the Pacific Fleet.

The land-based component of Russia’s strategic nuclear forces consists mainly of the Strategic Rocket Forces and requires much smaller expenses than the sea-based strategic nuclear forces. And yet, it would be prudent to once again assess the appropriateness of creating a heavy liquid-propellant missile. It seems that the decision to build it was based not on efficiency considerations but on some other factors, such as a desire to preserve the existing production facilities and technologies. If the U.S. missile defense system is enhanced further and if conventional precision weapons, including long-range ones, become increasingly effective, it would not be reasonable to place a large number of warheads on one delivery vehicle. In addition, an upgraded version of a rail-based ICBM system may be created as part of nostalgic efforts to revive the military-industrial complex. There is no doubt that this idea will get the support with both industry and railroad companies. However, its realization will require tremendous expenditures to re-equip railroad networks, renovate railroad bridges, etc., even though the area where such systems can be used is quite limited and they can easily be detected and monitored online by space surveillance systems.

The restoration of the defense-industrial complex will inevitably revive the practice of advancing departmental interests and imposing new weapon systems upon the Defense Ministry instead of upgrading existing ones, largely discounting real needs. With the problem of conversion remaining essentially unsolved, defense enterprises continue to be dependent on military contracts and are returning to the practice of lobbying for their interests.

The production of similar-type equipment and weapons, incompatible, ununified and probably even unnecessary, must be prevented. The post-Serdyukov period has seen attempts on the part of industry and some military leaders to launch production of weapons and equipment designed to fight bygone wars. This is a dangerous coincidence of interests. For example, light armored vehicles for airborne troops are intended for operations in a large-scale war where ground forces may need the support of a large landing party complete with armored vehicles dropped behind the enemy lines. But in smaller-scale operations it is much more important to provide for effective operation of tactical landing parties. This requires modern communication and control systems as well as commanders who can organize tactical interoperability with army and front-line air units, as well as land-based weapon crews, rather than wait for orders and instructions from their own superiors. The Military Doctrine 2010 draws on the experience of previous conflicts and notes the need for decentralizing control and giving troops greater freedom of action. Now it is important to get this done.

Going back to the structure of strategic nuclear forces, one should note the importance of front-line and strategic aviation. During the Cold War when massive nuclear missile strikes were seen as the main form of using strategic nuclear forces, aviation played a supportive role, while the main actors were the Strategic Missile Forces and ballistic missile submarines. However, aviation has much more diverse and effective roles to play in modern deterrence missions.

Under the New START Treaty, each strategic bomber is counted as one nuclear warhead. Unlike missiles, aircraft can be used many times with both conventional and nuclear weapons. It is the aircraft that are the most convincing means of containing local conflicts and preventing their escalation when the use of missiles is not practical and therefore not effective.

As to readiness for regional and large-scale wars, the training of military personnel for that should be done full-scale. Strategic exercises can be limited to the command and staff level (without troops). However, executive-level training should involve not only military but also civilian specialists related to mobilization and deployment operations, information warfare, etc. To this end, the Academy of the General Staff should change its training practices. The previous military leadership’s decision to make drastic cuts in the Academy enrollment plans was wrong as the number of officer trainees at this level should not be limited by the demand for strategic commanders. Moreover, these training programs should cover not only strategic staff officers but also civilian specialists. They should be trained together in strategic deployment and preparations for large-scale and regional conflicts. Therefore strategic command and staff exercises should be conducted in interaction with civilian agencies rather than be confined solely to the Defense Ministry level, with the presence of the supreme commander-in-chief.

Following the new military leadership’s decisions to return control over academies of armed services to their commanders, it is necessary to preserve the correct approach to the training of operational-level officers for joint operations. The events of August 2008 highlighted the importance of operational interaction between different branches of armed services. Moreover, tactical-level officers should undergo more intensive interoperability training.

On the whole, the optimization of defense expenditures should be based on two key approaches: realistic and reasonable military planning, and the introduction of a federal contract system as the basis of relations between the State and defense industry enterprises.