Procurement will fall by 10% this year even as Russia displays its military might in Syria
MOSCOW—Russian defense procurement will drop by about 10% this year as low oil and gas prices drain income from the state budget, according to the powerful head of the conglomerate that controls the key pieces of Russia’s military-industrial complex.
Sergei Chemezov, chief executive of the Russian state industrial holding Rostec—the maker of weapons including Kalashnikov assault rifles and Pantsir antiaircraft systems—said he expected the Russian defense sector to contend with a decrease in government orders.
“Oil and gas prices aren’t as high as desired, and they’re the main source of income for the budget,” said Mr. Chemezov. “So, of course, it’s completely understandable that there is a reduction in defense orders.”
Added Mr. Chemezov: “It’s not to the point of being critical for our industry.”
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WNU Editor: Russian President Putin has a choice .... guns or butter .... and he has chosen butter. What's my take .... this is a wise move .... economic stability is more important (right now) for the Kremlin than supporting wars in Syria and elsewhere.
1 comment:
The way they calculate how much a country spends on defense is wrong. When you consider the Purchase Parity by wages the Russians average wage is $1200 dollars there for the amount of Labour that goes into their Military budget equals $106 Billion in man hours, for China its $585 Billion in man hours. The average monthly wage for the US is $3200, Russia is $1200 and China is $656, when looked at this way it give a more accurate picture, at what the big three are spending. Of course there are variables such as commodity prices, but what is produced without outside inputs Russia and China are getting their hardware cheaper if produce totally within their own countries, with their own raw materials. Also if you consider the over inflated prices we pay for our military hardware, their budgets can be moved up further.
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