Author Archives: Dodge Billingsley

Russia Increases Defense Spending for 2024

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Early variant of the 152mm self-propelled gun 2S35 Koalitsiya-SV on parade in Moscow, 2015. The Koalitsiya-SV is set to be fielded in 2024.

“It became clear that a large-scale war requires a lot of equipment. It needs to be constantly improved, adapting to new weapons that the enemy has, damaged vehicles need to be repaired somewhere. And the priority in rearmament shifted towards the army.”

According to the 10 January excerpted article from the Russian state-owned domestic news outlet RIA Novosti, Russia will increase its defense spending in keeping with the release of Russia’s federal budget in October 2023 that dedicated “almost 11 trillion rubles” ($117 billion) to the armed forces.[i] The article notes plans to grow the armed forces by nearly half a million men, while most of the funds will be earmarked for weapons and equipment, whose procurement is informed by lessons learned in Ukraine. The emphasis is on ground forces but includes new spending on air and naval assets. As it articulates: “In recent decades, the ground forces of many countries have been financed on a residual basis—the United States relied on the Air Force and Navy. Russia was no exception in this regard, but the Ukrainian conflict put everything in place.”

Increasing the quantity and quality of its armor, tanks, and artillery is a primary focus, according to the article. Russia will ramp up production of improved variants of the T-90M Proryv [RG1] , T-72B3M [RG2] , and T-80BVM [RG3] main battle tanks. Artillery is also being updated with the introduction of the upgraded 152-mm Msta-S [RG4] self-propelled gun[ii] and the latest Malva [RG5] -wheeled howitzer, which entered service in late 2023.[iii] Russia’s newest artillery system, the 2S35 Koalitsiya-SV [RG6] , is projected to be fielded in 2024. The weapon systems and upgrades reflect immediate application of lessons learned from the Ukrainian battlefield. Ukraine seemed to have an edge when NATO-manufactured long-range weapons arrived on the battlefield and Russian units were forced to move their command and logistic lines farther from the front lines. The article notes that the Koalitsiya-SV “will become the longest-range weapon in the Russian Army, able to fire a “high-explosive fragmentation projectile at a range of 40 kilometers, and a guided projectile at 70 kilometers…more than enough [distance] for effective counter-battery warfare.” Drones are also featured in Russia’s defense plans for this year.[iv] The “long-awaited Izdeliye-53, another version of the Lancet [RG7] kamikaze drone,” is projected to be fielded in 2024. Like long-range artillery, the Izdeliye-53 could have an immediate battlefield impact as it is said to have a range of more than 60 kilometers. The much-publicized increase in Russian defense spending, and the types of weapons Russia will field, based on lessons learned in Ukraine, could put additional pressure on Ukraine and its Western partners just to maintain the status quo.

Sources:

Andrey Kots, “Приоритеты на будущее. Чем вооружат армию России в 2024-м (Priorities for the future. What will the Russian army be armed with in 2024?)” RIA Novosti (Russian state-owned domestic news outlet), 9 January 2024. https://ria.ru/20240109/perevooruzhenie-1917044593.html?in=t

… Earlier, back in January 2023, Defense Minister Sergei Shoigu announced an increase in the size of the army to one and a half million people by 2026.

…

At the end of October, Finance Minister Anton Siluanov announced the total amount of defense spending in 2024 – almost 11 trillion rubles. The lion’s share will go to the purchase of military equipment. The domestic defense industry has to work hard: it is necessary to saturate not only new units, but also units on the front line with everything necessary.

“Taking into account additional budgetary allocations in 2024, the volume of purchases and repairs of weapons and military equipment will increase,” Sergei Shoigu said at the end of November. “In the current conditions, it is necessary to ensure an advanced supply of weapons, military and special equipment to the troops, as well as to increase the production capabilities of enterprises military-industrial complex for the production and repair of the most popular models.”

In recent decades, the ground forces of many countries have been financed on a residual basis – the United States relied on the Air Force and Navy. Russia was no exception in this regard, but the Ukrainian conflict put everything in place. It became clear that a large-scale war requires a lot of equipment. It needs to be constantly improved, adapting to new weapons that the enemy has, damaged vehicles need to be repaired somewhere. And the priority in rearmament shifted towards the army.

The Ground Forces will continue to receive modern main battle tanks. First of all, the T-90M Proryv, T-72B3M and T-80BVM, which have proven themselves well in combat. New tanks are significantly different from pre-war ones. They received additional armor, equipment to suppress UAVs, and modern communications equipment. Many are equipped with a factory “visor” – a lattice superstructure over the turret with dynamic protection modules for defense against “roof-killing ATGMs” and kamikaze drones.

Motorized rifle units will receive vehicles, BTR-82A [RG1] armored personnel carriers, BMP-3 [RG2] infantry fighting vehicles and modernized BMP-2M [RG3] . The latter began to enter the troops only in 2020. Their difference from the early “twos” is the Berezhok combat module, equipped with a 30-mm automatic cannon, an automatic grenade launcher, a machine gun and four Kornet ATGMs. The vehicle has an updated fire control system, ensuring round-the-clock use, automatic target tracking and increased shooting accuracy.

The artillerymen will receive 152-mm Msta-S [R4]  self-propelled guns and the latest Malva wheeled howitzers, which first entered service with the troops in the fall of 2023. What’s even more important: next year, the promising self-propelled gun “Coalition-SV,” which the troops have been waiting for a long time, will go into serial production. It will become the longest-range weapon in the Russian army… .In 2024, the long-awaited Izdeliye-53, another version of the famous Lancet kamikaze drone, should go into service with the troops. All that is known about the new UAV is that its range is over 60 kilometers and it will be designed to operate in a “flock.”

Notes:

[i] For more information regarding defense spending within Russia’s new federal budget, see: Dodge Billingsley, “Russia’s Federal Budget Puts Economy on War Footing,” OE Watch, 01-2024. https://fmso.tradoc.army.mil/2024/russias-federal-budget-puts-economy-on-war-footing/

[ii] For a look back at Russian efforts to increase the effective firing range of the Msta, see: Charles Bartles, “New Artillery Rounds Will Extend Russian Artillery Range,” OE Watch, January 2018. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-articles-singular-format/294224

[iii] The Msta-S is an old system introduced in 1989. For information on recent modifications and upgrades, see: “Artillery of the future: modernization of the ACS 2S19 “Msta-S” and its prospects,” Military Review, 16 December 2023. https://military-review.com/12479016-artillery-of-the-future-modernization-of-the-acs-2s19-msta-s-and-its-prospects; the 2S43 Malva wheeled artillery is also a legacy system but previous Russian claims refer to the new variant as the Russian HYMARS, although the effective range as been disputed. See: Ellie Cook, “What Is 2S43 Malva? Soviet Self-Propelled Howitzer Dubbed ‘Russian HYMARS’,” Newsweek, 17 August 2023. https://www.newsweek.com/russia-military-2s43-malva-howitzer-ukraine-himars-artillery-1820411

[iv] Drones, or UAVs, have become ubiquitous in the war in Ukraine at every level. For additional insight on Russia’s use of drones, see: Charles Bartles, “Russia Plans To Add Remote Mining UAV Platoons To Engineer Units,” OE Watch, 09-2023. https://fmso.tradoc.army.mil/2023/russia-plans-to-add-remote-mining-uav-platoons-to-engineer-units/; see also, Dodge Billingsley, “Russia Details Plan To Overcome Military Drone Deficiencies,” OE Watch, 01-2024. https://fmso.tradoc.army.mil/2024/russia-details-plan-to-overcome-military-drone-deficiencies/

Image Information:

Image: Early variant of the 152mm self-propelled gun 2S35 Koalitsiya-SV on parade in Moscow, 2015. The Koalitsiya-SV is set to be fielded in 2024.
Source: Vitaly Kuzman, https://en.wikipedia.org/wiki/2S35_Koalitsiya-SV – /media/File:9may2015Moscow-35_(cropped).jpg
Attribution: CCA BY-SA 4.0

Nauru Recognizes China, Further Isolating Taiwan

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Map of the Pacific or Oceania region featuring Nauru.

“As a sovereign country, the Republic of Nauru independently made the right choice to announce that it recognizes the one-China principle, breaks the so-called “diplomatic ties” with the Taiwan authorities, and seeks to reestablish diplomatic ties with China. This fully shows that the one-China principle is where global opinion trends and where the arc of history bends.”

On 15 January, a day after the election of a pro-independence presidential candidate in Taiwan, the tiny Pacific Island nation of Nauru announced a switch of diplomatic relations from Taiwan to China.[i] The switch has left Taiwan with official diplomatic ties to only 12 states,[ii] although Taiwan enjoys unofficial support from others, including the United Kingdom and the United States. Chinese Foreign Ministry Spokesperson Mao Ning noted that, “China appreciates and welcomes the decision of the government of the Republic of Nauru,” according to the below excerpt from the printout of a press conference. Mao Ning skirted a question about whether Taiwan’s accusation “that China has lured Nauru with monetary support” was true.  There has been broad criticism of China’s tactics insinuating that it bribes nations to turn from Taiwan. According to the excerpted article from Singapore-based Channel News Asia, Taiwan accused China of engaging “in money diplomacy by offering far more money than what Taiwan provides to allies.” The same article also references an official statement from Nauru noting that the move to recognize China is a “significant first step in moving forward with Nauru’s development.” [iii] Regardless, Nauru’s shift towards Beijing is the latest of several countries that have switched diplomatic recognition from Taiwan to China—10 since 2016—and the latest manifestation of China’s long-term strategy to grow its influence in the region and isolate Taiwan.

Sources:

“Foreign Ministry Spokesperson Mao Ning’s Regular Press Conference,” Ministry of Foreign Affairs of the People’s Republic of China, 15 January 2024. https://www.mfa.gov.cn/eng/xwfw_665399/s2510_665401/202401/t20240115_11224311.html

CCTV: The government of the Republic of Nauru officially announced its decision to recognize the one-China principle, break the so-called “diplomatic ties” with the Taiwan authorities and seek to reestablish diplomatic ties with China. What’s your comment?

Mao Ning: As an independent sovereign country, the Republic of Nauru announced that it recognizes the one-China principle, breaks the so-called “diplomatic ties” with the Taiwan authorities and seeks to reestablish diplomatic ties with China. China appreciates and welcomes the decision of the government of the Republic of Nauru.

There is but one China in the world, Taiwan is an inalienable part of China’s territory, and the government of the People’s Republic of China is the sole legal government representing the whole of China. It’s what has been affirmed in Resolution 2758 of the UN General Assembly and is a prevailing consensus among the international community. China has established diplomatic relations with 182 countries on the basis of the one-China principle. The Nauru government’s decision of reestablishing diplomatic ties with China once again shows that the one-China principle is where global opinion trends and where the arc of history bends. China stands ready to work with Nauru to open new chapters of our bilateral relations on the basis of the one-China principle.

NHK: Why did the government of Nauru announce the decision to cut diplomatic relations with the Taiwan authorities after the elections in Taiwan?

Mao Ning: The government of Nauru announced that it recognizes the one-China principle, breaks the so-called “diplomatic ties” with the Taiwan authorities and seeks to reestablish diplomatic ties with China. This is a choice made independently by Nauru as a sovereign country. It shows that the one-China principle is where global opinion trends and where the arc of history bends.

Reuters: A Taiwan official just said that China has lured Nauru with monetary support. May we know how much money is China going to give Nauru?

Mao Ning: As a sovereign country, the Republic of Nauru independently made the right choice to announce that it recognizes the one-China principle, breaks the so-called “diplomatic ties” with the Taiwan authorities and seeks to reestablish diplomatic ties with China. This fully shows that the one-China principle is where global opinion trends and where the arc of history bends.

“CNA Explains: Why tiny Nauru ditched Taipei for Beijing – and why it matters,” Channel News Asia (Singapore based, Asia specific news service), 16 January 2024. https://www.channelnewsasia.com/asia/nauru-taiwan-china-diplomatic-can-explains-4051026

The Nauru government also said in a statement that the move was in the “best interests” of the island nation and its people.

It added that Nauru would be moving to follow the “one China principle” and was seeking a resumption of full diplomatic relations with the People’s Republic of China – referring to China’s official name.

“This means that the Republic of Nauru will no longer recognise the Republic of China (Taiwan) as a separate country but rather as an inalienable part of China’s territory,” said the statement.

It also called this “a significant first step in moving forward with Nauru’s development.”

China claims Taiwan as part of its territory and sees it as having no right to establish state-to-state ties – a position which Taipei rejects.

…

Nauru’s move announcement also coincided with a visit to Taiwan by an unofficial delegation from the United States, much to Beijing’s displeasure.

But Mr Sung said while the timing conveniently gave Nauru’s diplomatic switch added significance, the US trip was not the trigger. 

“Moves like this take time to pull off,” he noted.Taiwan also alleged that China had engaged in “money diplomacy” here, by offering Nauru far more money that what Taipei provides to allies.

Notes:

[i] This is not the first time that Nauru has switched allegiances between Taiwan and China. See: China formally restores diplomatic relations with Nauru after Pacific island nation cut Taiwan ties,” AP, 23 January 2024. https://apnews.com/article/china-nauru-taiwan-diplomatic-recognition-23fd9cdd0210a2340b5ae2092d2a85d1

[ii] The 12 entities that continue to maintain official diplomatic relations with Taiwan are: Marshall Islands, Palau, Tuvalu, Eswatini, Belize, Guatemala, Haiti, Paraguay, St. Kitts and Nevis, Saint Lucia, St. Vincent & the Grenadines, and the Holy See (Vatican).

[iii] For a discussion of China’s efforts to turn Latin American countries, see: Ryan Berg, “Honduran Presidential Visit Kicks Off New Relations With China,” OE Watch, 07-2023. https://fmso.tradoc.army.mil/2023/honduran-presidential-visit-kicks-off-new-relations-with-china/; and Ryan Berg and Wazim Mowla, “Taiwan’s Future in Latin America and the Caribbean,” The Diplomat, 1 September 2022. https://thediplomat.com/2022/09/taiwans-future-in-latin-america-and-the-caribbean/

Image Information:

Image: Map of the Pacific or Oceania region featuring Nauru.
Source: World Regional Geography, https://open.lib.umn.edu/worldgeography/part/chapter-13-the-pacific-and-antarctica/
Attribution: CCA-NC-SA 4.0 Int

China’s Economic Interests at Risk With Rise of Houthi Shipping Attacks

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Chinese container ship off the coast of Los Angeles, California.

“China is the customer for 90% of the oil exported by Iran. The chances of the Houthis firing on ships of a state-owned Chinese company are therefore very low, raising questions about the reasons for COSCO’s decision”

The Israel-Hamas conflict and the conflict’s subsequent spread to Yemen and the Red Sea is challenging Chinese economic interests and policy in the region. In early January, Chinese shipping giant China Ocean Shipping Company (COSCO) and Hong Kong–based subsidiary Overseas Orient Container Line announced that they would cut service to Israeli ports in response to Houthi attacks on ships destined for Israel. According to the first excerpted articles from the Israeli business news publication Globes, China has in effect sacrificed trade with Israel to maintain shipping access to the Red Sea. While the article vilifies the Chinese position, China is in a bind because both Israel and Iran are significant regional trading partners with China. The Houthis are militarily and diplomatically supported by Iran. China must balance its priorities in the region between Iran and Israel—and any regional war would be bad for China’s Middle East interests.[i] In the second excerpt, taken from a speech delivered by China’s UN Ambassador less than a week after the COSCO announcement, the Ambassador noted that “the waters of the Red Sea are an important transportation channel for goods and energy” and called on the Houthis to “to immediately stop harassing merchant ships and respect the navigation rights of merchant ships from all countries in the Red Sea waters, in accordance with international law.”[ii] Not long after, a Houthi official interviewed by Russian news source Izvestia stated that all Russian and Chinese ships would be safe navigating the Red Sea but that ships aligned with Israel would be subject to targeting. The Houthi spokesman continued “Our goal is to raise the economic costs for the Jewish state to stop the carnage in Gaza.” However, despite these assurances, any economic pain that Israel might feel because of reduced shipping to its ports also transfers to China, complicating its economic strategy in the Middle East.

Sources:

“Chinese shipping giant COSCO to stop visiting Israeli ports,” Globes (Israeli business news), 7 January 2024. https://en.globes.co.il/en/article-chinese-shipping-giant-cosco-to-stop-visiting-israeli-ports-1001467115

Chinese state-owned shipping giant COSCO Shipping has stopped visiting Israeli ports, “Globes” has learned. The company, the fourth largest container shipping line in the world, with about 11% of world trade, decided on this step even though it is not much threatened in the Red Sea, because of the very fact that it is Chinese, and because of China’s ties with Iran, the patron of the Houthi rebels in Yemen.

Besides the effect on trade between the Far East and Israel, COSCO’s decision is significant because it cooperates with Israeli shipping line ZIM, which will have to operate more ships on the Far East routes, which is liable to will lead to higher shipping costs, since XIM will be short of ships.

The second direct effect will be on the Haifa Bayport, which is operated by another state-owned Chinese company, SIPG. The port is dependent on the many COSCO ships that visit it.

The Houthis are threatening to attack vessels of any company that sails to Israel, but China is the customer for 90% of the oil exported by Iran. The chances of the Houthis firing on ships of a state-owned Chinese company are therefore very low, raising questions about the reasons for COSCO’s decision, of which international shippers have yet to be notified.

A pointer to COSCO’s step was the recent announcement by its Hong Kong-based subsidiary OOCL that it was ceasing to sail to Israel because of “operational problems”. That announcement, intended to enable it to sail in the Red Sea without interference by the Houthis, led to wide criticism. In the end, the company caved in, like Singapore-based shipping line ONE (Ocean Network Express).

“常驻联合国代表张军大使在安理会红海局势紧急公开会上的发言 (Speech by Ambassador Zhang Jun, Permanent Representative to the United Nations, at the Security Council’s emergency public meeting on the Red Sea situation),” PRC Permanent Mission to the United Nations, published by Ministry of Foreign Affairs People’s Republic of China, 12 January 2024. https://www.mfa.gov.cn/web/zwbd_673032/wjzs/202401/t20240114_11223386.shtml

Mr. President: China thanks Russia for its initiative to hold this emergency meeting and thanks Assistant Secretary-General Kyali for his briefing. The United States, Britain and other countries have carried out air strikes on targets in Yemen, further escalating tensions in the Red Sea region. China expresses serious concern about this.

The waters of the Red Sea are an important transportation channel for goods and energy. For some time, the Houthi armed forces have repeatedly attacked and seized merchant ships in the Red Sea waters, disrupting international trade order and not conducive to regional stability. China has repeatedly called on the Houthis to immediately stop harassing merchant ships and respect the navigation rights of merchant ships from all countries in the Red Sea waters in accordance with international law. China also calls on all parties, especially influential major powers, to play a constructive and responsible role in jointly safeguarding the safety of waterways in the Red Sea.

We regret to see that the brazen military actions taken by relevant countries against Yemen not only caused infrastructure damage and civilian casualties, but also aggravated security risks in the Red Sea waters and did not help protect the safety of commercial ships and freedom of navigation. Relevant military actions may also impact the political process in Yemen. We fail to see how such a military operation could achieve the stated intended objectives.

It must be noted that the Security Council has never authorized any country to use of force against Yemen. The military actions taken by relevant countries run counter to the purpose of Resolution 2722 just adopted by the Security Council. China reiterates that no country shall misinterpret or abuse international law and Security Council resolutions to create new tensions in the Red Sea waters.

Mr. President: The current tensions in the Red Sea are one manifestation of the spillover effects of the conflict in Gaza. Letting the conflict in Gaza prolong while hoping that the conflict will not expand may be wishful thinking. It is even more contradictory and irresponsible to advocate preventing conflicts from spilling over, while at the same time adding fuel to the fire and provoking military confrontation. The Middle East is already on the brink of extreme danger. What we should avoid most at the moment is reckless military adventurism. What we need most is calmness and restraint to prevent further expansion of conflicts. We urge all relevant parties, especially the influential powers, to abide by the UN Charter and international law, adhere to the correct direction of dialogue and consultation, and make practical efforts to maintain peace and stability in the Red Sea and the Middle East. Thank you, Chairman.

В «Ансар Аллах» гарантировали безопасность судам РФ и КНР в Красном море (Ansar Allah guaranteed the safety of Russian and Chinese vessels in the Red Sea),” Izvestia (Russian news source), 19 January 2024. В «Ансар Аллах» гарантировали безопасность судам РФ и КНР в Красном море | Новости мира | Известия | 19.01.2024 (iz.ru)

Representative of the al-Buheiti movement: the Houthis will not attack Russian and Chinese ships

The Yemeni Houthi movement Ansar Allah is attacking US and British ships in the Red Sea; as for other countries, including Russia and China, their shipping in the region is guaranteed safety. A member of the Ansar Allah Politburo, Muhammad al-Buheiti, stated this on January 19 in an interview with Izvestia.

“As for all other countries, including Russia and China, their shipping in the region is not threatened. Moreover, we are ready to ensure the safety of the passage of their ships in the Red Sea, because free navigation plays a significant role for our country,” Al-Buheiti noted.

The politician also added that any Israeli ships or those connected with Israel will not have the slightest opportunity to sail through the Red Sea – attacks on them will continue.

“Ansar Allah does not pursue the goal of capturing or sinking this or that sea vessel. Our goal is to raise the economic costs for the Jewish state to stop the carnage in Gaza. If the crews of the ships that came under our fire had not ignored our warning signals and changed their direction, the further escalation that the American side caused in the interests of protecting Israel could have been avoided,” he said.

Earlier, on January 17, the military representative of the Ansar Allah movement, Yahya Saria, said that it launched a missile attack on the American ship Genco Picardy in the Gulf of Aden. According to him, the Houthis recorded a direct hit on the ship.

On the same day, the UK Navy’s Maritime Trade Coordination Center (UKMTO) reported that a drone attacked a ship off the coast of Aden, Yemen, which led to a fire on board the ship. A previous attack on a ship in the Red Sea was reported the day before. The Houthis then took responsibility for it and confirmed the fact of a missile attack on the bulk carrier Zografia, which was flying the Maltese flag.The Houthis began attacking shipping in the Red Sea and Gulf of Aden from November 2023 to protest Israeli actions in the Gaza Strip…

Notes:

[i] For a previous perspective on the conflict in Gaza’s impact on China interests in the region see: “Israel’s close economic ties with China worked well – until the Gaza conflict,” South China Morning Post, 2 November 2023. https://www.scmp.com/news/china/diplomacy/article/3240061/israels-close-economic-relationship-china-worked-well-until-gaza-conflict-revealed-its-limits

[ii] A wide range of global reporting has indicated that China is also said to have put pressure on Iran to rein in the Houthis, while the United States has asked China to take more of a role in mediating the conflict in Israel.

Image Information:

Image: Chinese container ship off the coast of Los Angeles, California.
Source: Corey Seeman
Attribution: CC By-NC-SA 2.0

Russia’s Federal Budget Puts Economy on War Footing

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The new Russian budget, 2024-2026, will throw a lifeline to the Russian defense industry as well as the war in Ukraine. Russian pavilion at a previous International Defence Exhibition & Conference (IDEX) held in Abu Dhabi, UAE.

“Everything for the front, everything for victory,” – Head of the Ministry of Finance, Anton Siluanov

On 27 November 2023, Russian President Putin signed the federal budget for 2024-2026. The budget dedicates a dramatic 30 percent of total expenditures to the Armed Forces and military industrial complex. According to the excerpted article from the Russian and English-language independent online newspaper The Moscow Times, the increase in funds dedicated to the military establishment is “2.3 times more than [was appropriated] in 2022.” For comparison, funds dedicated to the military represented only 17 percent of the federal budget in 2022 and 19 percent in 2023. That percentage will increase to 29.5 percent in 2024. The Russian government will also spend “another 3.338 trillion rubles under the heading ‘national security,’ which includes the budgets of the Ministry of Internal Affairs, the National Guard, the special services and the FSIN[i] system. Thus, in total, nearly “40 percent of the [federal] budget will be spent on law enforcement agencies.” To make this happen, Russia will have to pull funds from other parts of its economy including healthcare (which will be cut by 10 percent), aid to small businesses (which will lose 20 percent), and the “development of Infrastructure for Scientific Research,” (which will be reduced by 25 percent). Notably, “funding for state propaganda,” a line item of Russia’s federal budget and a critical part of its war in Ukraine, would remain the same as in the last budget. The signing into law of the new budget comes in conjunction with multiple other significant financial changes, including the Russian reintroduction of capital controls[ii] to stabilize the ruble against the dollar and other global currencies.[iii] Taken together, the signaling demonstrates Russia’s determination to see the war to a positive outcome—at a time when funding for Ukraine in the U.S. and among other Western powers is under scrutiny.

Sources:

“Путин утвердил рост расходов на армию до рекорда со времен СССР (Putin approved an increase in spending on the army to a record since Soviet times),” The Moscow Times (a Russian-English language online newspaper), 27 November 2023. https://www.moscowtimes.ru/2023/11/27/putin-razreshil-rosnefti-idesyatkam-goskompanii-zasekretit-informatsiyu-osebe-a114361

Russian President Vladimir Putin on Monday, November 27, signed the law on the federal budget for 2024-26. According to the document, which was adopted by the State Duma on November 15 and approved by the Federation Council a week later, next year, for the first time since Soviet times, the Russian authorities intend to allocate almost a third of all expenditures on maintaining the army and the military-industrial complex.

For the year, under the item “national defense” the budget will spend 10.775 trillion rubles – 70% more than in 2023 (6.8 trillion), 2.3 times more than in 2022 (4.7 trillion), and three times higher than the pre-war 2021 indicators (3.5 trillion).

The share of military expenditures in the budget, the total size of which will be 36.66 trillion rubles, will reach 29.5%. For comparison: the current year’s budget initially included only 19% of defense spending (5 trillion rubles out of 26.1 trillion); in the first year of the war with Ukraine, this share was 17% (4.7 trillion rubles out of 27.8 trillion).

The USSR spent a third of its budget on defense in its final years. Thus, in the 1990 budget, 71 billion rubles out of 241.3 billion, or 29.4%, were allocated for “military purposes” (data published in the archive of ex-Prime Minister of the Russian Federation Yegor Gaidar).

According to the budget law, the government will spend another 3.338 trillion rubles under the heading “national security”, which includes the budgets of the Ministry of Internal Affairs, the National Guard, the special services and the FSIN system. Compared to the current year, these expenses will increase by 163 billion rubles. Thus, in total, almost 40% of the budget will be spent on law enforcement agencies.

To make ends meet, the government will cut costs to support the national economy: they will decrease from 4.125 to 3.889 trillion rubles. Funding for education and medicine – 1.6 trillion rubles each – will be “frozen”, and in real terms – taking into account inflation – will be reduced.

Expenses under the national Healthcare project are planned to be cut by 10%, from 321.3 to 289.9 billion rubles, and the sequestration will affect almost all of its subprograms. Expenses under the federal project “Modernization of Primary Health Care” will be reduced by 14%, to 81.64 billion rubles. The federal project “Fighting Cancer” will lose weight by 8%, to 147.4 billion rubles. Expenditures on the development of children’s healthcare will be reduced by almost half – from 19.5 to 10.2 billion rubles; for the development of primary medical care – by 20%, to 7.677 billion rubles.

The national project to support small businesses will lose almost 20% of funding (67.7 billion rubles); Expenses for the federal project “Development of Infrastructure for Scientific Research” are reduced by 25% – to 47 billion rubles. Allocations for the state program “Development of the Aviation Industry” will be cut by 28% – 37.3 billion rubles. In addition, the government plans to save on supporting the regions: transfers to them from the federal budget will be less by 4% – 1.474 trillion rubles.

Funding for state propaganda will remain at record levels: state media will receive 121.3 billion rubles from the budget compared to 122 billion this year. Expenditures under the item “culture and cinematography,” which includes budgets for the creation of war propaganda films, will increase by 11%, to 234 billion rubles.“Everything for the front, everything for victory,” said the head of the Ministry of Finance Anton Siluanov in September, commenting on the document. He urged people not to worry that there would not be enough money in the treasury. “But there will be enough for what is planned. A normal, healthy budget,” the minister emphasized.

Notes:

[i] FNIS is the Federal Penitentiary Service (ФСИН России), the federal authority for the detention of suspected and convicted persons, and the security and maintenance of prisons in Russia.

[ii] Capital Controls are measures taken by a government to limit the flow of foreign capital in and out of the domestic economy. Since the war in Ukraine began in February 2022, Russia has sought, among other regulatory actions, to stabilize the ruble by requiring that a large portion of all foreign currency profits made by Russian exporters be converted into rubles. For a recent discussion on some of the capital controls recently imposed by Russia, see: “Russia has tightened capital controls to help prop up ruble, report says,” The Guardian, 31 October 2023. https://www.theguardian.com/world/2023/oct/31/russia-capital-controls-rouble-vladimir-putin

[iii] For more on other Russian moves to reduce the dominance and dependency of the U.S dollar, see: Dodge Billingsley, “Russia Enlists Partners To Attack U.S. Dollar To Fund War In Ukraine,” OE Watch, 09-2023. https://fmso.tradoc.army.mil/2023/russia-enlists-partners-to-attack-u-s-dollar-to-fund-war-in-ukraine/

Russia Details Plan To Overcome Military Drone Deficiencies

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Russia and Ukraine are engaged in a drone war.  Here, an unidentified Ukrainian Special Forces soldier with small quadcopter UAV that will be modified to carry a small explosive charge.

“The military still faces a serious shortage of drones for strategic reconnaissance and subsequent strikes over fairly long distances. Saturating the troops with them would greatly increase our ability to identify and destroy enemy equipment accumulations and other priority targets.”

The use of unmanned armed vehicles (UAVs), or drones, on the battlefields of Ukraine has increased dramatically since the conflict began in February 2022. While Ukraine may have held the initial advantage, Russia continues to prioritize its drone capabilities.[i] In a recent meeting of the Ministry of Defense regarding weapons procurement, Russian Defense Minister Sergei Shoigu detailed the state of military drone procurement. According to the excerpted article from the Russian online publication Free Press, Shoigu noted that “Russia has trained 93,000 specialists to service the latest types of weapons, a significant part [of this workforce] of which are drone operators.” Shoigu also noted that drone operators were being trained at several military training centers “at universities,” and that the number of these training centers would soon rise from only 16 in 2022 to 139, although no timeline was given as to when all 139 training centers would be operational. The Free Press article also included an interview with Igor Korotchenko, the editor-in-chief of National Defense,[ii] a magazine focused on Russian defense and security issues, who noted that although Russian front-line troops were being “saturated” with drones, “the military still faces a serious shortage of drones for strategic reconnaissance and subsequent strikes over fairly long distances.” Korotchenko also noted that drones with these capabilities are being delivered to the frontlines but “the task is to saturate our battle formations with them as much as possible.” Finally, the article notes that at the end of 2022, Putin had declared Russia would boost spending on its military drone program from 4.4 billion rubles (approximately $48 million) to 92 billion rubles (approximately $1 billion) effective immediately, increasing spending up to 200 billion rubles (approximately $2.2 billion) by 2030.

Sources:

“СВО: Российской армии срочно нужны дроны для наступления. По мере изменений тактики будут видоизменяться и модели боевых БПЛА (SVO: The Russian army urgently needs drones for the offensive. As tactics change, combat UAV models will also change),” Free Press (Russian socio-political online publication specializing in political, socio-economic and cultural news), 21 November 2023. https://svpressa.ru/war21/article/395461/ 

Supplies of unmanned aerial vehicles to the army have increased 16 times compared to the beginning of last year. Sergei Shoigu announced this at a meeting of the Ministry of Defense dedicated to state defense procurement. The head of the military department also cited other figures: the number of basic types of missile and artillery weapons in the troops increased by 4.9 times, high-precision long-range missiles by 5 times, and armored weapons by more than 3 times. In total, the supply of the army with various means of defeating the enemy has been increased 12 times. At the same time, the state defense order for the needs of the Northern Military District is clarified and adjusted 2-3 times a month depending on the needs of the front. The breakthrough in the field of unmanned aircraft can be considered a special achievement because before the SVO, we paid practically no attention to this type of weapons, and in the first months of the operation, the superiority of the Ukrainian Armed Forces in this component looked deafening. Our soldiers had to make do mainly with Chinese quadcopters, which caring citizens bought for the front in regular stores. Sergei Shoigu also said that in 2023, Russia has trained 93 thousand specialists to service the latest types of weapons, a significant part of which are drone operators. A certain percentage of them are now serving in the Northern Military District zone. Students at military training centers at universities are also learning to control combat drones. The number of such centers will soon reach 139, although the first 16 were created only last year. Igor Korotchenko, editor-in-chief of the National Defense magazine, told Free Press about which drones are currently being used by our military in the Northern Military District zone, and which ones are in greatest need. Thus, the time when soldiers and officers had to master the control of quadcopters directly in combat conditions is over. And the drones that are now going into the army are no longer a mishmash of different Chinese toys. They are collected in Russia and are sufficiently standardized. — The Northern Military District zone is being massively saturated, first of all, with tactical-class drones, which are used for reconnaissance and attack operations against the enemy on the line of contact and the front line. These are mainly quadcopters. They can conduct surveillance and then be used like kamikazes. Such UAVs are most intensively used by the troops today,” says a military analyst. “The military still faces a serious shortage of drones for strategic reconnaissance and subsequent strikes over fairly long distances. Saturating the troops with them would greatly increase our ability to identify and destroy enemy equipment accumulations and other priority targets. The most important task is to hit vehicles with weapons and ammunition in a timely manner. And if we consider that our enemies are now preparing to redeploy F-16 [R1] fighters and ATACMS missiles with a range of more than 300 km to Ukraine, which can be launched from HIMARS[R2]  installations, then our strategic drones must be able to identify and destroy such targets. This task is now No. 1 for our engineers and designers. Until the end of 2022, drones remained in short supply in our troops. In December, Vladimir Putin instructed the government to prepare a national project for the development of unmanned aircraft. And in April, the president visited the capital’s Rudnevo technology park, which became a cluster for the production of UAVs. A meeting was also held there with the government and drone manufacturers. The talk in the open part was about unmanned civil aviation, but it is clear that any aircraft or copter initially has a dual use. During the meeting, the president gave a number of instructions. Among them is to increase the portfolio of government orders for unmanned aerial vehicles from 4.4 billion rubles to 92 billion, and by 2030 to 200 billion.

Technoparks for the production of UAVs, similar to the Moscow one, should be organized in all federal districts, and better yet, in all regions. Begin organized training and retraining of specialized specialists in the production and operation of UAVs.

Notes:

[i] For additional reading on Russia’s increasing use of drones on the battlefield, see: Charles Bartles, “Russia Plans To Add Remote Mining UAV Platoons To Engineer Units,” OE Watch, 09-2023. https://fmso.tradoc.army.mil/2023/russia-plans-to-add-remote-mining-uav-platoons-to-engineer-units/

[ii] National Defense magazine is tied to Russia’s military industry complex and bills itself as covering a “wide spectrum of problems related to safeguarding Russia’s National Security.” For more information about National Defense, see its website: https://oborona.ru/

Image Information:

Image: Russia and Ukraine are engaged in a drone war.  Here, an unidentified Ukrainian Special Forces soldier with small quadcopter UAV that will be modified to carry a small explosive charge.
Source: Combat Films and Research
Attribution: By permission of Combat Films and Research

Russia Signs Agreement To Open Naval Base In Abkhazia

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Map of Russian Black Sea naval bases Sevastopol and Novorossiysk and the proposed base at Ochamchira on disputed Georgian territory.

“The interaction between Moscow and Sukhum in terms of military-technical cooperation is aimed at increasing the level of defense capability of both Russia and Abkhazia, says Bzhania.”

Abkhazia has signed a bilateral agreement to host a Russian naval base near the southern Abkhazian city of Ochamchira. Western observers have interpreted the announcement as proof Ukraine is having success driving Russia’s Black Sea Fleet out of Crimea, while the Russian and Abkhazian press are focused on the regional implications of the proposed Russian naval base.

According to the first excerpted article from the Russian daily Izvestia,[i] the agreement is intended to increase defense cooperation between Russia and Abkhazia, recognized as an independent state by Russia.[ii] However, the second excerpted article from the regionally focused Echo Kavkav points out, Russian coastal patrol boats already use the port at Ochamchira. This port is small in comparison to Novorossiysk, the naval port to which Russia has moved much of its Black Sea fleet after Ukraine demonstrated it is capable of attacking naval assets at Sevastopol on Crimea. According to political figure and Hero of Abkhazia[iii], Aslan Kobakhia, the announcement is part of the information war between pro-Russian Abkhazians and those Abkhazians who prefer a more independent political path for Abkhazia. He noted there has been talk of an expanded base in Ochamchira for years, further observing that “no matter how deep you go, it’s a small port, only a few ships can be there at a time, and large ships cannot base there.” However, Kobakhia did conclude an expanded port at Ochamchira could be used as a vital refueling hub for Russia’s Navy. According to Giva Kvarchia, as quoted in the third excerpted article from the Abkhaz diaspora media website Abkhaz World, the base in Abkhazia would be mutually beneficial as it would be an economic boon to Abkhazia and provide a military advantage to Russia. A base at Ochamchira would also serve as a deterrent against any future military action by Georgia to take back Abkhazia. Kvarchia acknowledged that the base would be provocative and both “a protection and a potential threat.” A Russian naval base in Abkhazia presents an interesting security dilemma for the region. Ukraine has proven capable of attacking Russian naval vessels in Novorossiysk, Russia, and Sevastopol, on the Ukrainian Crimean Peninsula, which has been annexed by Russia. Given that Abkhazia is not Russian territory, any decision to engage the Russian Navy there would necessarily be seen as an attack on the territory.[iv] While, the announcement of the Russian naval base in Abkhazia is merely that, the positioning of additional Russian assets there could impact the operational environment of the whole eastern Black Sea region.

Sources:

“Бжания сообщил о размещении в Абхазии пункта постоянного базирования ВМФ РФ (Bzhania announced the deployment of a permanent base for the Russian Navy in Abkhazia), Izvestia (pro-Kremlin daily newspaper), 05 October 2023. https://iz.ru/1584377/2023-10-05/bzhaniia-soobshchil-o-razmeshchenii-v-abkhazii-punkta-postoiannogo-bazirovaniia-vmf-rf

A new permanent base for the Russian Navy will appear on the Black Sea coast in Abkhazia; a corresponding agreement between Russia and Abkhazia has already been signed, Abkhaz President Aslan Bzhania said in an interview with Izvestia.

“Two states, but we have a common Fatherland”

“On the day of our holiday [in honor of the 30th anniversary of Victory Day in the Georgian-Abkhaz war of 1992–1993 and Independence Day, which was celebrated on September 30], a small missile ship came to us, we boarded it – a very modern ship with serious combat capabilities . We have signed an agreement, and in the near future there will be a permanent base for the Russian Navy in the Ochamchira region,” Bzhania said.

In addition, the President of the Republic noted that Russia continues to provide support, providing the opportunity for Abkhaz specialists to undergo advanced training in educational institutions of the Russian Federation.

The interaction between Moscow and Sukhum in terms of military-technical cooperation is aimed at increasing the level of defense capability of both Russia and Abkhazia, says Bzhania.

From August 21 to September 1, 2023, joint Russian-Abkhaz military special-purpose, flight and tactical exercises were held in four regions of Abkhazia, aimed at increasing the level of field training of troops and forces, coordinating their actions when performing combat missions.

Russia recognized the sovereignty of Abkhazia on August 26, 2008. This year, ceremonial events were held in the republic in honor of the 15th anniversary of this event. Currently, the Russian and Abkhaz military jointly ensure the security of the republic. Also, the borders of Abkhazia are guarded by the border service of the Russian FSB.

Vitaly Shariya, “Аслан Кобахия: «Шум вокруг Очамчырского морпорта – буря в стакане воды» (Aslan Kobakhia: ‘The noise around the Ochamchira seaport is a storm in a teacup’),” Ekho Kavkaza (regionally specific news source), 12 October 2023. https://www.ekhokavkaza.com/a/32634876.html

“I’ve been there several times. No matter how deep you go…’It’s a small port. Only a few ships can be there at a time. There are no such opportunities that some people are talking abo–t – they left Sevastopol, they left Novorossiysk… The Russian fleet cannot leave either Sevastopol or Novorossiysk, there are no such opportunities. Five percent of those ships will not fit on the territory of Abkhazia. You need to know a little to speak. There is no place to base large ships there. Ships can enter there, refuel, and go back to sea. The Russian Federation doesn’t comment at all, but here we start, you know, creating a storm in a teacup… Why, I can’t understand.”

“Givi Kvarchia: ‘Military Bases: A Double-Edged Sword of Protection and Threat,’ Abkhaz World (pro-Abkhaz web news service run by Abkhaz diaspora in Europe), 6 October 2023. https://abkhazworld.com/aw/interview/2536-givi-kvarchia-military-bases-a-double-edged-sword-of-protection-and-threat?utm_source=substack&utm_medium=email

[Q]. Aslan Bzhania also made a statement indicating that Sukhum is prepared to deepen its military-technical cooperation with the Russian Federation, and that a new permanent base for the Russian Navy will be established on the Black Sea coast in Abkhazia. Could you comment on this matter?

[Givi Kvarchia].  As for the enhanced military-technical cooperation between our nations, it is already outlined in the broader alliance and strategic partnership agreement, as well as in interdepartmental agreements between our defence ministries. This ’sn’t a new development; it has been in planning for a long time. Perhaps it h’sn’t proceeded at the pace’we’d desire, especially in terms of military-technical cooperation. Regarding the Ochamchira port and the basing of certain Black Sea Fleet ships or a portion of it there, this ’sn’t new in Abkhazian politics either. Discussions and negotiations about the joint use of the Ochamchira port by the Russian Federation and the Republic of Abkhazia have been ongoing for years, and as far as I know, an agreement has been reached to use this port on mutually beneficial terms.

[Q]. Givi, could you elaborate on the essence of the“e “mutually beneficial te”ms”?

[Givi Kvarchia]. The crux of it is that a portion of this port will be used by the Abkhazian side for economic purposes. Meanwhile, another portion will tilizedsed by the Russian Federation for military objectives.

[Q]. Givi, considering the war in Ukraine and recent information that a drone made its way to Sochi, a’en’t you concerned that a Naval base in Ochamchira might pose a security threat to the citizens or the country as a whole? What are your thoughts?[Givi Kvarchia]. Any military base or basing point can serve as both protection and a potential threat. However, our discussions about the Ochamchira port began before the military operation in Ukraine unfolded. To put it simply,’it’s a double-edged sword, but from our perspective, it represents more of a security measure than a threat, in my view.

Notes:

[i] Although Russian media outlet Izvestia broke the story of the proposed Russian naval base at Ochamchira, there was very little additional Russian coverage of the topic. In a separate article from Izvestia, Kremlin spokesman Dmitry Peskov deferred on the topic, noting that it was a military issue and inferring that questions about the basing agreement should be directed to the Russian Ministry of Defense, see: “Песков переадресовал вопрос о размещении ВМФ в Абхазии в Минобороны (Peskov forwarded the question about the deployment of the Navy in Abkhazia to the Ministry of Defense), Izvestia, 5 October 2023. https://iz.ru/1584547/2023-10-05/peskov-pereadresoval-vopros-o-razmeshchenii-vmf-v-abkhazii-v-minoborony

[ii] Abkhazia, and South Ossetia, are break-away republics within the Republic of Georgia. Georgia considers both territories occupied by Russia, which is not factually accurate, especially in the case of Abkhazia which has fought to be recognized as an independent state and maintains its own security apparatus. Only a handful of countries have recognized Abkhazia’s independence: Russia, Venezuela, Nicaragua, Nauru and Syria.

[iii] Hero of Abkhazia, much like Hero of the Russian Federation, is a title given to Abkhazians who have performed a heroic deed in the service of the state, usually veterans of the war between Abkhazia and Georgia (1992-1993).

[iv] For more on current Russia-Abkhazia relations see: Dodge Billingsley “Abkhazia Pushes Back Against Russia’s Suggestion Of Incorporation,” OE Watch, 08-2023. https://fmso.tradoc.army.mil/2023/abkhazia-pushes-back-against-russias-suggestion-of-incorporation/

Image Information:

Image: Map of Russian Black Sea naval bases Sevastopol and Novorossiysk and the proposed base at Ochamchira on disputed Georgian territory.
Source: Combat Films and ResearchAttribution: Combat Films and Research by permission using map data from OpenStreetMap

Russia Enlists Partners To Attack U.S. Dollar To Fund War in Ukraine

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Bank Saint Petersburg sanctioned by the U.S. and UK on 24 February, one of many Russian banks sanctioned in the days following Russia’s invasion of Ukraine.

“The document contains a list of friendly and neutral states whose credit institutions and brokers will be able to trade on the Russian market for currencies and asset liabilities.”

Russia seeks to make strategic advances in the economic war in which it finds itself as it struggles to gain an operational advantage on the battlefield in Ukraine. Russian moves to end the global dominance of the U.S. dollar have taken on new urgency as the war in Ukraine has exposed how reliant Russia and other nations are on the dollar for their national economies and settlement of global financial transactions.[i] According to the excerpted article from Russian financial news source RI-Centr.ru, Russian Prime Minister Mikhail Mishustin recently signed a resolution with “more than 30 friendly or neutral states,” including “all Central Asian states” to explore conducting financial settlements in national currencies rather than the dollar. The article acknowledged that the moves away from the dollar contained risks for banks and other financial institutions.

The article from the Russian news outlet политический калейдоскоп (Political Kaleidoscope) noted Indonesia, the world’s seventh-largest economy and fourth-most populous country, has also begun the process of transitioning from the dollar for global trade and financial transactions. According to the article, Jakarta has set up a “National Task Force that will support financial transactions in local currencies.” The article concludes by noting that “Indonesia has become the latest ‘heavyweight’ in the company of fighters against the dominance of the U.S. dollar in the global financial system” and that China, India, and Russia have agreed to switch to national currencies for mutual payments. Finally, the article noted that the BRICS nations[ii] are pursuing a dollar alternative and that Russian President Putin recently emphasized that “de-dollarization is an irreversible process that is gaining inertia.” While the U.S. dollar is still the preferred safe-haven currency worldwide, Russia’s (and China’s) efforts to reduce its dollar dependence would give Russia increased flexibility to conduct trade, especially for commodities such as oil—a tool for financing the war in Ukraine and potential wars elsewhere—without the threat of adverse financial conditions imposed on its economy by a dominant U.S. dollar.[iii]

Sources:

“УТВЕРЖДЁН СПИСОК СТРАН — ПАРТНЁРОВ ПО ВАЛЮТНОЙ ТОРГОВЛЕ (LIST OF CURRENCY TRADING PARTNERS HAS BEEN APPROVED),” RI-Centr.ru (Russian financial news outlet), 21 September 2023. https://ia-centr.ru/publications/utverzhdyen-spisok-stran-partnyerov-po-valyutnoy-torgovle/?utm_source=finobzor.ru

The corresponding order was signed by Russian Prime Minister Mikhail Mishustin.

The document contains a list of friendly and neutral states whose credit institutions and brokers will be able to trade on the Russian market for currencies and asset liabilities.

There are more than 30 countries on the list, including all Central Asian states. Approval of the list is part of the process of transition to settlements in national currencies.

The approval of the resolution was announced in July 2023. At that time, the list of partner states included 44 countries. In the current message on the government website, 32 countries are mentioned. Israel and Georgia, which were previously named as included in the list, are not among them. This is not the final version of the document.

Russia and the countries of the post-Soviet space are progressively engaged in financial integration. Thus, on April 28, the Eurasian Economic Union (EAEU) published a draft agreement that should simplify the admission of brokers from the union states to the exchanges of the participating countries. In addition, at the end of August, EEC members signed an agreement on bank guarantees in the field of public procurement.

Experts note that the proposed mechanisms do not yet fully solve the problem of risks for banks and other financial players.

Sergey Manukov, “К дедолларизации подключилась одна из крупнейших экономик планеты (One of the largest economies on the planet has joined dedollarization),” Political Kaleidoscope (политический калейдоскоп), 21 September 2023. https://k-politika.ru/k-dedollarizacii-podklyuchilas-odna-iz-krupnejshix-ekonomik-planety/?utm_source=finobzor.ru

There are new additions to the camp of fighters against the dominance of the dollar in the global financial system and trade. Moreover, it is very significant and noticeable. Indonesia has joined the dedollarization process. This, by the way, is the seventh economy in the world, which, without a doubt, in one or two decades will rise another couple of positions in the ranking. In addition, Indonesia ranks fourth in the world in terms of population – approx. 280 million people.

Jakarta has created a National Task Force that will support financial transactions in local currencies (LCT). In Indonesia, remember, this is the Indonesian rupiah. In a statement, the head of the Indonesian central bank, Bank Indonesia, Perry Warjiyo, said that the transition to national currencies in settlements and trade with friendly countries will help not only strengthen the Indonesian financial market, but also stabilize the local rupiah.

“Increasing local currency transactions should help export-import activities, investments and cross-border payment transactions, including QRIS (Indonesia’s domestic settlement standard),” explains a top Indonesian banker.

Indonesia has become the latest “heavyweight” in the company of fighters against the dominance of the US dollar in the global financial system, consisting of China, India and Russia. Beijing, New Delhi and Moscow agreed to switch to national currencies for mutual payments. In addition, BRICS has not abandoned plans to introduce, if not a single currency of the organization, then at least a single payment mechanism. Indonesia has not yet joined BRICS, but its President Joko Widodo attended the group’s recent summit in South Africa as a guest. Speaking at the summit via video link, Russian President Vladimir Putin emphasized that dedollarization is an irreversible process that is gaining inertia.

Joko Widodo, by the way, not long ago called on local authorities to abandon foreign payment systems and switch to credit cards from local banks. True, he spoke not so much about dedollarization as about the possibility of banning such popular cards as Visa and Mastercard, following the example of what they did with Russia.

In the United States, the plans of China, Russia, India and other developing countries to deprive the dollar of the unofficial title of world currency are, at least outwardly, calmly and they claim that nothing can threaten the “green” in the foreseeable future, at least for several decades.Recently, by the way, Zimbabwe announced its desire to join the bank created by the BRICS countries. As a result, rumors spread that this southern African country also wants to join the de-dollarization. However, according to Zimbabwe’s former finance minister, abandoning the dollar could easily lead to economic disaster.

Notes:

[i] For a Russian perspective on the dollar shortly after its invasion of Ukraine see: Ilya Polonsky, “Россия способна поставить точку в эпохе гегемонии доллара (Russia is able to put an end to the era of dollar hegemony),” Economic Enrichment (экономическое обоэрение) (Russian financial news outlet), 18 March 2022. https://finobzor.ru/116153-rossija-sposobna-postavit-tochku-v-jepohe-gegemonii-dollara.html

[ii] The BRICS nations are Brazil, Russia, India, China, and South Africa. Coined in 2001, the term was originally BRIC and remained that way until the addition of South in 2010. Argentina, Egypt, Ethiopia, Saudi Arabia, and the United Arab Emirates are set to join the bloc and receive full membership on 1 January 2024.

[iii] Historically, when the cost of oil rises the dollar has depreciated. However, since 2022, roughly correlating with Russia’s invasion of Ukraine, the price of oil and the value of the dollar have moved in tandem. Therefore, high energy costs and a rising dollar have put additional pressure on economies like Russia’s and China’s. For an analysis of what is fueling the new connection between commodity prices and the strength of the U.S. dollar see: Boris Hofmann, Deniz Igan, and Daniel Rees, “The Changing Nexus Between Commodity Prices and the Dollar: Causes and Implications,” BIS Bulletin No. 74, (Switzerland based Bank for International Settlements), 13 April 2023. https://www.bis.org/publ/bisbull74.pdf

Image Information:

Image: Bank Saint Petersburg sanctioned by the U.S. and UK on 24 February, one of many Russian banks sanctioned in the days following Russia’s invasion of Ukraine.
Source: Combat Films and Research, Inc.
Attribution: Combat Films and Research, Inc. By permission

Russian North Sea Fleet Deputy Commander Killed in Nagorno-Karabakh

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Map of the 2023 Nagorno-Karabakh war showing Azerbaijan day-to-day advances as of 22 September 2023.

“This was a man who belonged to the fleet, and even though he was a political officer, what did he do down there [Nagorno Karabakh]?”

Attrition continues within Russia’s officer corps as Russian commanders die on the battlefield, even beyond Ukraine and Syria.[i] According to the Norway-based news outlet The Barents Observer, deputy commander and political officer of Russia’s Northern Fleet submarine forces, Ivan Kovgan, was killed in Nagorno-Karabakh on 20 September.[ii] The article noted that Kovgan was deployed to the disputed region as the deputy commander of the Russian peacekeeping contingent. Kovgan’s SUV reportedly was struck by Azeri artillery, killing him and four other Russian servicemembers. It is unclear whether the strike on the Russian peacekeepers’ vehicle was intentional or a mistake as a result of the fog of war. In any case, the event prompted an immediate apology from Azerbaijani President Ilham Aliev to Russian President Putin and the promise of an investigation. The article also noted that residents of the Kola Peninsula, where Kovgan resided, were shocked that he would have even been selected to serve in Nagorno-Karabakh. While units from the Russian Northern Fleet have been deployed to Ukraine, some with catastrophic consequences,[iii] the death of Kovgan while on a less-risky peacekeeping mission is an unexpected blow. Russia has lost many high-ranking officers in Ukraine, and losing another senior officer in far-off Nagorno-Karabakh is costly.

Sources:

Atle Staalesen, “Deputy Commander of Russia’s Northern Fleed submarine forces is killed in Nagorno-Karabakh,” The Barents Observer (Norway based naval news focused news source), 22 September 2023. https://thebarentsobserver.com/en/security/2023/09/deputy-commander-russias-northern-fleet-submarine-forces-killed-nagorno-karabakh

Kovgan was only days away from completing his assignment in the disputed territories between Armenia and Azerbaijan when his car came under attack. He and four more Russian servicemen were killed.

A photo reportedly taken on the site of the attack shows a Russian military SUV type UAZ Patriot that has crashed into a rocky hillside. At least four bodies can be seen in and around the vehicle.

The lethal attack came from Azerbaijani forces and took place on the 20th of September as part of a major onslaught on Armenia-backed forces in the region. It is reported to have taken place near the settlement of Canyataq in the northeastern corner of the self-proclaimed republic.

Azerbaijani President Ilham Aliev in a telephone conversation with Vladimir Putin the following day apologised for the killings and assured that an investigation will be initiated and the guilty troops punished.

But for many locals in Gadzhievo it appear a mystery that a top officer from the Northern Fleet’s submarine forces was on duty in the far-away Nagorno-Karabakh.

“Who sent this first rank captain to that place???” a man writes in a comment on local social media in Gadzhievo. “This was a man that belongs to the fleet, and even though he was a political officer, what did he do down there??? After all, he was our naval political officer with both body and mind!” he underlines.Ivan Kovgan had reportedly been two months in Nagorno-Karabakh when he was killed. He was serving as Deputy Commander of the so-called peacekeeping forces that have been deployed in the area since the second Nagorno-Karabakh war of 2020. Back home in the Kola Peninsula he was Deputy Commander of the Northern Fleet’s submarine forces with responsibility for military-political operations.

Notes:

[i] Russia has lost several senior officers in Syria since 2016, including most recently Colonel Oleg Pechevisty, who was killed in May 2023. See: Isabel Van Brugen, “Russian Colonel Killed After Direct Strike on His Command Post – Reports,” Newsweek, 29 May 2023. https://www.newsweek.com/russian-colonel-oleg-pechevisty-killed-syria-strike-ukraine-war-1803136 and “Администрация Подпорожского района (Administration of Podporozhye district),” ВКонтакте (InKontact) Russian online social media and social networking service based in Saint Petersburg). 27 May 2023. https://vk.com/wall-167456645_21197

[ii] For additional information from the Russian perspective on the renewed conflict in Nagorno-Karabakh and presence of Russian peacekeepers, see: Kirill Strelnikov, “Прощание с Карабахом: уроки трагедии с двумя стульями (Farewell to Karabakh: lessons from the tragedy with two chairs),” RIANovosti (state-owned domestic Russian media outlet), 21 September 2023. https://ria.ru/20230921/karabakh-1897672995.html; “Messages appeared on the Internet about an attack by the Azerbaijani Armed Forces on a warehouse of Russian Peacekeepers, Top War (English language Russian military news focused media website, part of Military Review (Военное Обозрение)), 23 September 2023. https://en.topwar.ru/226714-v-seti-internet-pojavilis-soobschenija-ob-udare-vs-azerbajdzhana-po-skladu-rossijskih-mirotvorcev.html

[iii] The 200th is one of two Arctic infantry units subordinate to the Northern Military District’s 14th Army Corps, the 14th Army Corps is Ground Forces unit subordinate to the navy command, and as part of the Northern Military District it is subordinate to the Northern Fleet. For an investigative news piece on the fate of the 200th Separate Motor Rifle Brigade in Ukraine see: “‘Wiped Out’: War in Ukraine has decimated a once feared Russian brigade,” The Washington Post, 16 December 2022. https://www.washingtonpost.com/world/2022/12/16/russia-200th-brigade-decimated-ukraine/

Image Information:

Image: Map of the 2023 Nagorno-Karabakh war showing Azerbaijan day-to-day advances as of 22 September 2023.
Source: https://commons.wikimedia.org/wiki/File:2023_Nagorno-Karabakh_War.svg
Attribution: CCA SA 4.0 Int

Abkhazia Pushes Back Against Russia’s Suggestion of Incorporation

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Map of Republic of Georgia featuring the separatist regions of Abkhazia and South Ossetia.

“We tread a distinct path. We haven’t received any formal requests to join the Russian Federation, and I’m yet to identify any political faction within Abkhazia that envisions such a relationship dynamic with Russia.”

In an interview published on 22 August in the pro-Russian media outlet Arguments and Facts, Deputy Chairman of the Security Council of Russia, Dmitry Medvedev, suggested that for Abkhazia and South Ossetia, the “idea of joining Russia is still popular[i] and it may well be implemented if there are good reasons.” Medvedev’s commentwas not well received by Abkhazian officials, regardless of whether it was an off-the-cuff remark or a more calculated statement. As per the excerpted article on pro-Abkhaz media source Abkhaz World, the Secretary of the Security Council of Abkhazia, Sergey Shamba, responded to Medvedev’s statement by declaring that he was unaware of any political parties or groups that preferred incorporation into Russia, insisting that Abkhazia “tread” its own path. Shamba also noted that Abkhazia “is keen on fostering close and allied relations with Russia,” but that the tiny republic remains committed to independence. A statement from the Foreign Ministry of Abkhazia published in a second excerpted article from Abkhaz World declared that “The millennia-old statehood of Abkhazia is not a subject for debate.”[ii] The same article also included comments by other Abkhaz officials, including Aslan Kabakhia, who declared that it was “very unpleasant to hear of talks of a potential change in Abkhazia’s status from the very individual who [previously] endorsed our independence,” and another official, Akhra Bzhaniya, who noted that “our sovereignty is not a toy.” Abkhazia remains defiant regarding independence, suggesting that a miscalculation by Russian or other regional leaders could reignite conflict in the breakaway republic. For example, some Ukrainian officials continue to call on Georgia to open a second front in the Caucasus by militarily invading Abkhazia, assuming Russia will be forced to divert military forces in defense of Abkhazia.

Sources:

“Abkhazia: Seeking Alliance but Standing Apart from Russian Federation,” Abkhaz World (pro-Abkhaz media outlet based in London and Istanbul), 24 August 2023. https://abkhazworld.com/aw/current-affairs/2484-abkhazia-seeking-alliance-but-standing-apart-from-russian-federation

The Secretary of the Security Council of Abkhazia, Sergey Shamba, emphasised that while Abkhazia is in favour of forming an alliance with Russia, the nation is open to various forms of bilateral relations.

Abkhazia is keen on fostering close and allied relations with Russia. However, Sergey Shamba highlighted that there currently aren’t any political entities within the republic expressing a desire to become part of the Russian Federation.

Shamba’s remarks were in response to the statements made by Dmitry Medvedev, the Deputy Head of the Russian Federation’s Security Council. In a previous article on the http://aif.ru website, Medvedev pointed out that both Abkhazia and South Ossetia still harbour sentiments of aligning with Russia, suggesting that this aspiration “might very well materialize given compelling reasons.”

Medvedev further elaborated, “South Ossetia has, on multiple occasions, held referendums on the prospect of joining Russia. This aligns naturally with the trajectory of uniting North and South Ossetia — a single people. I believe this resonates with Dmitry Medvedev’s statements. I’m optimistic that in due course, the right conditions will emerge, culminating in the unification of the North and South.”

Shamba, speaking of Abkhazia, added, “We tread a distinct path. We haven’t received any formal requests to join the Russian Federation, and I’m yet to identify any political faction within Abkhazia that envisions such a relationship dynamic with Russia.” He reiterated that while Abkhazia is eager to bolster allied relations with Russia, they remain flexible in exploring different relational frameworks.

“Невыученные уроки. Дмитрий Медведев проанализировал события 2008 года (Unlearned lessons. Dmitry Medvedev analyzed the events of 2008),” Arguments and Facts (pro-Moscow media outlet) 23 August 2023. https://aif.ru/politics/world/nevyuchennye_uroki_dmitriy_medvedev_proanaliziroval_sobytiya_2008_goda

At one time, Saakashvili became the first US proxy leader in the Caucasus with a single mission – to incite the hatred of the inhabitants of Georgia towards Russia, shake its position in the Transcaucasus, overshadow the centuries-old friendship of the two peoples. This strange creature brought the war closer with all its might. She pretended to be an “Old Testament shepherd David” – and at the same time did everything so that the Georgians would forget their common history, break ties with Russia, hate their closest neighbors – Russians, Ossetians, Abkhazians – and wish them death. The latest performances of Russophobes in Georgia show that this public is still counting on revenge. Although he constantly runs into rebuff from his fellow citizens, who do not intend to elevate hatred of Russia to the rank of a national idea and are quite warm towards our citizens. This is also obvious: the majority of Georgians are much more comfortable living with our state in peace. Russia is nearby, America is overseas. For Georgia, a country of the richest culture, connected with Russia by thousands of threads, Russophobia is nonsense, ugliness, a serious illness. Luckily, it’s completely curable.

We do not need a repetition of history-2008. We remain ready to tackle problems at the negotiating table in the spirit of the UN Charter. But if our concern has real outlines, we will not hesitate. In Abkhazia and South Ossetia, the idea of joining Russia is still popular. And it may well be implemented if there are good reasons for that.

“Abkhazia’s Foreign Ministry Issues Statement on Medvedev’s Remarks,” Abkhaz World, 24 August 2023. https://abkhazworld.com/aw/current-affairs/2486-abkhazia-s-foreign-ministry-issues-statement-on-medvedev-s-remarks

“In today’s environment, the international security system is under significant strain. We note a substantial escalation in tensions between the Russian Federation and the collective West. Many statements made in the media are viewed as outcomes of the intensifying geopolitical contest.

The millennia-old statehood of Abkhazia is not a subject for debate. Our legislation provides clear insight into this. The Republic of Abkhazia stands as a steadfast ally of the Russian Federation.

Our relations are governed by an extensive legal framework, comprising over 200 agreements. In the Republic of Abkhazia, repeated statements by senior Russian officials regarding the impossibility of revising the fundamental principles of bilateral relations are highly valued.The irrevocable path towards development as a sovereign, independent legal state has been chosen by the people and is protected by the paramount law – the Constitution of the Republic of Abkhazia.”

Notes:

[ii] The statement by Medvedev set off a firestorm of media responses, but to put it in perspective, his comment was said at the end of a very lengthy diatribe in which he insulted, criticized, and lambasted the U.S. and the West in general, declaring western influence and intrigue as the roots of all problems Russia faces in Georgia and Ukraine. Despite the context Ukraine Pravda and Reuters for example led with the headline that Russia might “annex” Abkhazia and South Ossetia although that is not the word that Medvedev used.  see: “Russia May Annex Georgian Breakaway Regions-Medvedev,” Reuters, 22 August 2023. https://www.reuters.com/world/europe/russia-may-annex-georgian-breakaway-regions-medvedev-2023-08-22/

Image Information:

Image: Map of Republic of Georgia featuring the separatist regions of Abkhazia and South Ossetia.
Source: Ssolbergj, https://en.wikipedia.org/wiki/International_recognition_of_Abkhazia_and_South_Ossetia – /media/File:Georgia,_Ossetia,_Russia_and_Abkhazia_(en).svg
Attribution: CC BY SA-3.0

China and Philippines Spar Over Grounded Ship in Spratly Islands

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Map of South China Sea featuring the Spratly Island group

“[China] deploys hundreds of vessels to patrol the South China Sea and swarm reefs. Its coastguard and navy ships routinely block or shadow Philippine boats in the contested waters, Manila has said.”

China is stepping up enforcement of its claims in the South China Sea due, in part, to its expanding chain of naval bases. There were a pair of confrontations between Chinese and Philippine navies in the South China Sea in August.[i] The dispute centered on the resupply of the BRP Sierra Madre, a WWII-era Philippine ship purposely run aground in 1999, on the Second Thomas Shoal, part of the Spratly Island group. The aging and decrepit vessel has served as a Philippine military base, tethered to the shoal that both the Philippines and China each declare their own.

On 5 August, the Chinese Coast Guard blocked Philippine Coast Guard ships from escorting chartered supply boats sent to resupply the Sierra Madre, according to the excerpted article from the Hong Kong-based South China Morning Post. Philippine officials protested the Chinese actions, noting that the operation was a normal resupply mission. China claimed the Philippine operation also sought to deliver construction materials to repair the aging Sierra Madre—extending the life of the floating Philippine base—in defiance of Chinese demands that the Sierra Madre be towed off the shoal on which it is grounded.

The situation escalated three days later when, on 8 August, China criticized the Philippines for failing to “keep its commitment to tow away the warship that was ‘illegally stranded’ on China’s Ren’ai Reef and attempting to reinforce it for permanent occupation of the reef” as reported by the government-run media outlet China Daily. Philippine officials deny there was ever any commitment to remove the Sierra Madre and vowed to maintain the stranded vessel.[ii] Finally, on 22 August, Philippine supply boats ran the Chinese blockade to resupply the Philippine marines stationed on the Sierra Madre, according to the China Daily article. The two-week saga highlights the fact that the operational environment in the South China Sea has tipped in China’s favor.[iii] Many Chinese naval bases in the South China Sea are now operational negating the need for People’s Liberation Army-Navy vessels and maritime militia to sail from Hainan Island or other mainland naval bases. The chain of Chinese naval bases in the South China Sea allows China faster response times and more loiter time in contested waters, an advantage previously held by the other claimants’ navies that reside much closer to the contested region.[iv]

Sources:

“South China Sea: Philippines says resupply mission reaches remote outpost, China firmly opposed,” South China Morning Post (Hong Kong bases Chinese media outlet), 22 August 2023. https://www.scmp.com/news/asia/southeast-asia/article/3231910/south-china-sea-philippines-says-resupply-mission-reaches-remote-outpost-china-firmly-opposed?utm_medium=email&utm_source=cm&utm_campaign=enlz-today_international&utm_content=20230822&tpcc=enlz-today_international&UUID=200d3857-7b09-402a-bc24-cdd797d79a18&next_article_id=3231923&article_id_list=3231856,3231902,3231857,3231912,3231909,3231884,3231916,3231897&tc=30&CMCampaignID=b607b9fc1b0ca5281837846f6ad244ac

The Philippines said a resupply mission had reached a remote outpost in the disputed South China Sea on Tuesday, despite attempts by Chinese vessels to “block” the boats carrying provisions for Filipino marines.

Two Philippine Coastguard boats escorted two supply vessels to Second Thomas Shoal in the Spratly Islands, where a handful of troops are stationed on a crumbling navy ship.

They arrived just over two weeks after China Coastguard ships blocked and fired water cannon at a resupply mission to the tiny garrison that prevented one of the boats from delivering its cargo.

“The routine follow-on Rotation and Resupply mission to the BRP Sierra Madre was successfully conducted today,” the National Task Force for the West Philippine Sea said in a statement.

…

Second Thomas Shoal is about 200kmfrom the Western Philippine island of Palawan, and more than 1,000 kilometres from China’s nearest major land mass, Hainan island.

The water cannoning on August 5 fanned tensions between the countries, which have a long history of maritime disputes in the South China Sea.

China claims almost the entire waterway, through which trillions of dollars in trade passes annually, and has ignored an international ruling that its assertion has no legal basis.

It deploys hundreds of vessels to patrol the South China Sea and swarm reefs. Its coastguard and navy ships routinely block or shadow Philippine boats in the contested waters, Manila has said.

“China warns Philippine ships for illegally entering waters in S. China Sea,” China Daily (Chinese government owned news organization), 22 August 2023. https://www.chinadaily.com.cn/a/202308/22/WS64e47c43a31035260b81d962.html

Liu Dejun, spokesman for the China Coast Guard, said in a statement that the four Philippine vessels were warned by the China Coast Guard, which effectively regulated them in accordance with law.

At the same time, regarding the fact that the Philippine ships did not carry illegal building materials for large-scale reinforcement, the Chinese side made “temporary special arrangements” for the Philippine side to transport food and other necessary daily supplies to the “stranded” warship in Ren’ai Reef in a humanitarian spirit, he said.

“China has indisputable sovereignty over the Nansha Islands and their adjacent waters, including the Ren’ai Reef,” said Liu in his statement.

“We firmly oppose the Philippines using the opportunity of transporting supplies to ship illegal building materials to the warship that ‘illegally stranded’ in the Ren’ai Reef,” said Liu.Liu added that Chinese Coast Guard will continue to carry out rights protection and law enforcement activities in waters under China’s jurisdiction in accordance with law.

Notes:

[i] For more on Chinese diplomatic strategy regarding disputes in the South China Sea, see: Dodge Billingsley, “Chinese Foreign Minister Calls on Resolved Land Border Disputes with Vietnam to Influence Pending Chinese-Vietnamese Maritime Disputes,” OE Watch, October 2020. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-articles-2-singular-format/376080

[ii] The relationship between the Philippines and China is complicated as they are neighbors and have shared interests despite friction between the two countries regarding territorial claims in the South China Sea. Chinese officials and media frequently blame the United States for its points of conflict with the Philippines. For an example of this perspective, see the following opinion piece by the editorial board of the China Daily: “Manila should be part of solution not problem: China Daily, 17 August 2023. https://www.chinadaily.com.cn/a/202308/17/WS64de058da31035260b81cc04.html

[iii] Coincidently, the Philippines participated in a multination training exercise the same week focused on possible threat scenarios it could face in the South China Sea featuring an air assault with Australian forces and an “amphibious landing” exercise with both Australian and U.S. Marines, see: “Marcos pushes joint drills with neighbors,” The Manila Times, 28 August 2023. https://www.manilatimes.net/2023/08/26/news/marcos-pushes-joint-drills-with-neighbors/1906954; Western press coverage on the joint training exercise with the U.S. Marines refer to the training differently, see: “120 Marines Back Drill Retaking an Island Along the South China Sea,” Marine Corps Times, 25 August 2023. https://www.marinecorpstimes.com/flashpoints/2023/08/25/120-marines-back-drill-retaking-an-island-along-the-south-china-sea/?utm_source=sailthru&utm_medium=email&utm_campaign=mil-ebb&SToverlay=342f5a58-c37b-4142-b049-1f737335b507

[iv] On 28 August, China’s Ministry of Natural Resources released a new version of its national map, which it has regularly done since at least 2006 in an effort to “eliminate ‘problem maps.’” The map drew swift rebuke from many countries, including the Philippines. See: “China’s New Map Draws Outrage From Neighbors,” The China Project, 31 August 2023. https://thechinaproject.com/2023/08/31/chinas-new-map-draws-outrage-from-its-neighbors/?utm_campaign=Thu, Aug 31, 2023 5%3A18 PM – The neighbors hate China’s new map&utm_medium=email&utm_source=Mailjet; For the notice of map release see: “2023年版标准地图正式发布 (The 2023 Version of the Standard Map is Officially Released),” Ministry of Natural Resources of the People’s Republic of China, https://www.mnr.gov.cn/dt/ywbb/202308/t20230829_2798404.html

Image Information:

Image: Map of South China Sea featuring the Spratly Island group
Source: Dodge Billingsley, Combat Films and Research, Inc.
Attribution: By permission of Combat Films and Research, Inc.