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/

“The main difficulty in conducting defense in the context of the enemy’s implementation of the “multi-domain battle” concept is that units, occupying strong points, positions and areas, are not able to quickly and effectively respond to enemy actions, especially when changing the direction of action and carrying out flanking maneuvers.”

Russia is working to understand the U.S. Army’s “multi-domain operations” (MDO) concept,[i] Which can roughly be described as the coordinated employment of the domains of war (land, air, sea, space, cyber, etc.) to achieve an operational-level objective.  The accompanying excerpted article from the monthly Russian military periodical, Armeisky Sbornik, discusses the Russian Armed Forces’ understanding of the U.S. MDO concept, the potential effects of MDO if employed against the Russian Ground Forces, and what course of action a Russian Battalion Tactical Group (BTG) should execute to best overcome it.[ii] The authors believe that a successful first strike on a Russian BTG by a U.S. Army MDO Brigade could be decisive due to the attrition of the BTG’s command and control and combat capabilities. The authors posit that the best defense for a BTG against an attacking MDO Brigade is the use of positional defense (as opposed to maneuver defense), and a preemptive attack. To achieve this, up to one-third of the combined arms subunits in the BTG should act as flanking or raiding detachments and conduct preemptive actions to hinder the enemy. These actions might include defeating artillery, air defense systems, and command posts, and disrupting command and control and logistics, thereby disrupting the MDO Brigade’s ability to conduct a decisive counter-attack. It is important to note that the authors, and many other Russian commentators, see the so-called “Special Military Operation” in Ukraine as not only a testing ground for new Russian military technologies and tactics, but also as a testing ground for new U.S./NATO technologies and tactics by way of Ukrainian proxies. As such, this article will likely be the first of many analyses discussing the best ways for the Russian Armed Forces to counter  U.S. military technology and tactics based on the lessons from the Russian invasion of Ukraine.

Sources:

R. Shaykhutdinov, I. Starodubtsev, “Оборона батальонной тактической группы в условиях «многосферного сражения» (The conduct of a defense by a battalion tactical group under conditions of «multi-domain battle»),” Armeisky Sbornik (monthly Russian military periodical), October 2023. https://army.ric.mil.ru/Stati/item/521356/

Against the background of strengthening the military power of Russia and China, the United States began to develop new approaches that would ensure the superiority of its troops in military conflicts with an enemy of comparable combat capabilities. The basic principles and procedures for conducting combat operations as part of interservice and coalition groupings of troops in various operational environments at the strategic, operational and tactical levels were formulated…

Military experts F.I. Ladygin, S.V. Afanasyev and A.V. Khomutov argue that such a model provides for the creation in the US ground forces of “a new type of formations deployed in advance in forward areas – “ multi-domain brigade tactical groups”, which will be able to operate in all environments, in isolation from the main grouping of troops, in conditions of constant contact with the enemy to identify his vulnerabilities and ensure the involvement of the main forces in them”…

The main difficulty in conducting defense in the context of the enemy’s implementation of the “multi-domain battle” concept is that units, occupying strong points, positions and areas, are not able to quickly and effectively respond to enemy actions, especially when changing the direction of action and carrying out flanking maneuvers. Also significant is the inevitable disunity of battalion defensive strong points during defense — when on a wide front these strong points cannot provide mutual fire support to one another, which can allow the enemy to employ flanking and raid actions to infiltrate the battalion’s combat formation….

The analysis of the views of the US and NATO command on the offensive and the experience of conducting a special military operation in Ukraine raises the need to search for new ways of conducting combat actions at the tactical level. The enemy’s use of modern weapons supplied by the united West, especially during shelling of Donetsk, Lugansk and other liberated areas, requires improved methods of action of combined arms formations when defeating the enemy.

The extreme saturation of modern armies with guided anti-tank weapons, air defense and missile defense systems has sharply increased the importance of the positional defense. The combat formation of a battalion tactical group in positional defense is built primarily in one echelon and includes: the first echelon, combined arms reserve, artillery units, air defense units, anti-tank reserve, as well as regular and attached units and fire assets that remain directly subordinate to the commander of the battalion tactical group…

An analysis of the possible distribution of forces and means of a battalion tactical group shows that with a “typical distribution” of forces and means of a battalion, taking into account the fact that before an attack the enemy will inevitably lay indirect and direct fires, shows that most of the fire will fall on strong points of the first echelon companies (on 50–60% of the battalion’s forces). Losses of the battalion tactical group can reach up to 70%.  Consequently, the existing methods of conducting the defense of a battalion tactical group raise questions regarding the capabilities of successfully completing a combat mission.  To increase the effectiveness of the defense of a battalion tactical group, it must conduct “preemptive actions”.

The method is based on active use of offensive actions when conducting defense, going beyond the front line. At the same time, up to 1/3 of combined arms subunits, acting as flanking and raiding detachments, carry out preemptive actions against the enemy, such as defeating artillery, air defense systems, command posts, and disrupting command and control and logistics.The essence of preemptive attack is to defeat enemy targets by flanking and raid groups of combat vehicles operating forward of the front line of defense in order to prevent further enemy offensive actions…

Notes:

[i] “The U.S. Army in Multi-Domain Operations 2028 concept proposes a series of solutions to solve the problem of layered standoff. The central idea in solving this problem is the rapid and continuous integration of all domains of warfare to deter and prevail as we compete short of armed conflict. If deterrence fails, Army formations, operating as part of the Joint Force, penetrate and dis-integrate enemy anti-access and area denial systems; exploit the resulting freedom of maneuver to defeat enemy systems, formations and objectives and to achieve our own strategic objectives; and consolidate gains to force a return to competition on terms more favorable to the U.S., our allies and partners.” TRADOC Pamphlet 525-3-1, The U.S. Army in Multi-Domain Operations – 2028 (Fort Eustis, VA: TRADOC, 2018), iii. https://adminpubs.tradoc.army.mil/pamphlets/TP525-3-1.pdf

[ii] For an in-depth analysis of the Russian Battalion Tactical Group (BTG), see: Lester W. Grau and Charles K. Bartles, “Getting to Know the Russian Battalion Tactical Group,” Royal United Service Institute, 14 April 2022. https://www.rusi.org/explore-our-research/publications/commentary/getting-know-russian-battalion-tactical-group