IN TRANSLATION: How Russia Hides its Defense Spending

Article by Georgiy Neyaskin for Slon Magazine

As years have passed, it’s become less and less clear where Russian taxpayer money is going. This is not because of corruption or a lack of transparency, but an increasingly large percentage of spending being classified by officials. The classification mostly concerns federal spending on defense, intelligence, and other agencies dealing with security.

Six years ago, every tenth ruble of federal spending was spent on secret budget items. This year, it’s one in five (according to the 2016 budget amendment prepared by MinFin). If the budget amendment passes, classified spending will grow 680 billion rubles over the initial budget, to 3.7 trillion (over 22% of overall spending.)

totalspending

More than half of secret budget items over the past decade were for defense spending. However, expenditures on rockets, aircraft, tanks etc. are not always classified. In 2013, the total sum of classified items under the ‘national security’ section of the budget slightly exceeded that of items open for anyone interested – they’re accessible in treasury documents on budget implementation. In recent years, Russia annxed Crimea, a war began in Eastern Ukraine, and there’s the Syria operation as well. Defense spending shot upward, and most of all, its classified portion.

defspending

Of the 3 trillion rubles spend on defense in 2015 and that will be in 2016, the public is left to guess on about 2 trillion. It’s entirely possible that state spending on the military industry will be even higher: part of the 3.7 trillion ruble total may well be spent on state credit guarantees, per Natalya Orlova at Alfa Bank.

 

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