Russia intends to increase military expenditures while reducing healthcare and education spending

The Russian government has proposed to increase total defense spending in 2017 by 179.6 billion rubles - to 3.05 trillion rubles or $52.4 billion (3.3% of GDP), as indicated in a draft amendment to the budget submitted to the State Duma, reports.

The increase in expenses will be for the closed part of the military budget. The expenditures in all other areas, including social policy, education, and healthcare, are planned to be reduced by 54 billion rubles ($938.5 million).

According to RBC news agency, a year ago, when the Ministry of Finance presented a three-year budget consolidation program, expenditures for the National Defense section for 2017 were planned at 2.84 trillion rubles ($48.8 billion), a quarter lower than in 2016. However, over the summer, the government increased the military budget by 40 billion rubles ($687.7 billion) and is now offering to add another 180 billion rubles ($3 billion).

The last time defense spending was under 3 trillion rubles ($52.5 billion) was in 2014. In 2015, it rose to 3.2 trillion rubles ($55 billion), and last year to a record 3.78 trillion ($65 billion). At the same time about 800 billion rubles ($13.8 billion) in 2016 was allocated for one-time spending to cover the early repayment of government-guaranteed loans to the defense industry as part of the state defense order. Without these payments, national defense spending last year would not have exceeded 3 trillion rubles.

The additional spending in 2017 in the defense sector is almost completely allocated for the Armed Forces and will amount to 2.3 trillion rubles ($39.5 billion) by the end of the year. The head of the Military Economics Laboratory of the Gaidar Institute, Vasily Zatsepin, believes that this may be additional funds for the state defense order. Andrei Frolov, editor-in-chief of Arms Export magazine, agrees with him, however he does not rule out that the reason for this could be the operation in Syria.

According to the amendments made this autumn, the government has increased budgeted expenditures by 125.7 billion rubles ($2.2 billion). "However, the bulk of these funds are distributed among the closed sections of the federal budget. And we do not know what exactly this money will be spent for," First Deputy Chairman of the State Duma Committee on Budget and Taxes, ‘A Just Russia’ Deputy, Alexander Remezkov, said in a commentary distributed by his assistants.

Along with the National Defense section, the most significant increase concerns the funds allocated to the mass media (3 billion rubles or $51.5 million) and inter-budgetary transfers (37 billion rubles or $636 million). Expenditures for social policy are proposed to be reduced by 49.6 billion rubles ($852 million), healthcare by 5.3 billion rubles ($91 million), education by 10.2 billion rubles ($175 million), environmental protection by 3.1 billion rubles ($53 million), and housing and utilities by 9 billion rubles ($155 million). According to the government, the total federal budget expenditures in 2017 will amount to 17.007 trillion rubles ($292 billion), and the budget deficit will amount to 2.5% of GDP.

On October 11th, deputies will discuss the draft budget with Russian Deputy Prime Minister Dmitry Kozak and Finance Minister Anton Siluanov.

  Russia, Ministry of Defense, military expenditures