Russia cuts defense budget!

As this article suggests, sanctions have hurt the Russian economy, forcing significant cuts to the defense budget. But another factor forcing defense cuts are Russia’s own oil production cuts, arranged in concert with OPEC, designed to keep the price of petroleum high. The cuts do, in fact, keep prices for oil higher, but at the cost of production and the loss of market share to American oil companies. All of this is being driven by the Fracking boom.

Russia’s military spending fell sharply in 2017 for the first time since 1998 as a slew of Western economic sanctions hit government coffers hard, a closely followed review said Wednesday.

Despite soaring tensions between Moscow and the West, Russia’s military expenses last year came in at $66.3 billion, 20 percent lower than in 2016, the Stockholm International Peace Research Institute (SIPRI) said.

The last time Moscow was forced to cut spending was in 1998 at the height of a massive economic crisis.

“Military modernization remains a priority in Russia, but the military budget has been restricted by economic problems that the country has experienced since 2014,” senior SIPRI researcher Siemon Wezeman said, referring to Western sanctions imposed against Moscow over its annexation of Ukraine’s Crimea Peninsula.

https://www.japantimes.co.jp/news/2018/05/02/world/sanctions-force-russia-cut-defense-spending-first-time-since-98-study-says/#.WumsMpch2Uk

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