Bloomberg: the secret money that lurks behind Vladimir Putin’s “war machine”

“According to data collected Bloomberg“Putin is allocating unprecedented amounts of classified funds to speed up the largest buildup of Russia’s armed forces since the Cold War,” says the publication’s correspondent Andrei Biryukov.

“Since 2010, the so-called “black” part of the federal budget (that which is authorized, but not detailed) has doubled - to 21% of the budget. Now it accounts for 3,2 trillion rubles ($60 billion),” the publication retells the calculations of the Gaidar Institute (Moscow).

According to the publication, Putin is turning to defense spending as a tool for reviving the economy. “The cost of new tanks, missiles and uniforms underscores growing militarization, which is widening shortages and pushing services such as health care to the periphery. Thousands of conscripts will be deployed to commercial enterprises for the first time to aid rearmament efforts,” the article states.

“The government faces two urgent tasks: strengthening security at all levels of society and promoting innovation to overcome macroeconomic stagnation,” says Ruslan Pukhov, director of the Center for Analysis of Strategies and Technologies (Moscow). “The solution to both problems lies in intensifying the development of the military-industrial complex.”

The publication provides several figures: Russia’s defense budget in 2014 amounted to more than $84 billion. “Defense and the related category - national security and law enforcement - now consume 34% of the budget, more than doubling compared to 2010. The United States spent 2014% of its budget ($18 billion) on defense and international security in 615,” the article says.

On May 12, Putin signed documents on the creation of “production companies”: conscripts will be able to work at defense enterprises instead of serving in regular military units.

Russia has begun paying in advance for goods and services provided by more than 1300 enterprises and 2,5 million people employed in the defense industry. “Already in the first quarter of the year, approximately 50% of the defense budget for this year was spent. True, information about what exactly was paid is mostly classified,” writes Biryukov.

The only thing that is not hidden from society is the number of personnel. Igor Sutyagin (Royal United Services Institute, London) wrote: “While in all Western countries the number of “manpower in uniform” has been decreasing since 2011, in Russia the number of personnel from 2011 to mid-2014 increased by 25 %. True, the bar set in 2010 (1 million manpower) has not yet been reached.”

According to the organization Global Firepower, in Russia there are about 2,5 million active reservists (with a population of 143 million people), the article says.