CRISIS IMPACTED MILITARY EXPENSES OF CIS COUNTRIES

WPS Agency
DEFENSE and SECURITY (Russia)
February 9, 2009 Monday
Russia

Military development in some countries will be corrected

Analysis of public data about the amounts that former Soviet republics
are ready to spend on defense in 2009 shows that despite the economic
crisis, many CIS member states keep spending a lot of money on their
armies even though the relative parameters (in percents of the GDP)
of military expenses of majority of CIS countries remain in 2009 on
a level of previous years or slightly low. In any case, Table No. 1
shows that even in conditions of the crisis, the aggregate defense
expenses in 2009 grew by 9% in comparison to 2008. In any case, this
parameter is much smaller than that in the CIS in 2008. In 2008,
defense expenses grew by 21.4% in comparison to 2007 and by 65% in
comparison to 2006. During all these years the aggregate GDP of the
former Soviet republics grew only by 15%. In comparison to 2008, the
average growth of GDP of all CIS countries (Georgia and Turkmenistan
are traditionally included into this group) is planned in 2009 on a
level of 12.4%.

Along with this, as in past years we see record holders in military
expenses. Georgia remains the absolute leader according to military
expenses despite the war in South Ossetia. The table presents expenses
of this country ($600 million) planned in the law on the budget for
2008. In reality these expenses were corrected throughout 2008 and
totaled almost $1 billion. Georgia was defeated in South Ossetia but
its military appetite did not grow smaller. In 2009 it plans to spend
4.4% of the GDP on military expenses. This is the record parameter
of the planned military expenses not only in the CIS but also in the
whole world. Proceeding from this figure it is possible to presume
that the regime of Saakashvili has not given up its revenge plans
and a new aggression of Georgian forces against South Ossetia and
Abkhazia is possible.

Table No. 1

Military expenses of the CIS countries in 2009 (in millions of US
dollars)*

* – the table was composed on the basis of analysis of public data
on economies of the CIS countries and their budgets for 2009; similar
data for 2008 were given in brackets.

** – data of the expenses part of the budget of Turkmenistan in 2009

After Georgia a significant percentage of GDP will be spent on
Defense in 2009 by Armenia (3.6% of the GDP) and Uzbekistan (3.4%)
like before. There is an explanation of this. There is a conflict
about Nagorno-Karabakh between Armenia and Azerbaijan and Yerevan is
preparing for possible hostilities. Uzbekistan has an adverse social
situation connected with overpopulation, unemployment and influence
of radical extremist and religious movements. The development of
these trends should be prevented by the so-called military factor.

Countries with a relatively developed raw materials economy – Russia,
Kazakhstan and Azerbaijan – reduced their defense expenses in relative
terms: Russia reduced them from 2.7% to 2.67% of the GDP, Kazakhstan
reduced them from 1.1% to 1% of the GDP and Azerbaijan reduced them
from 3.6% to 2.76% of the GDP. Along with this, in absolute terms
their budgets grew at least by 10-15% in 2009 in comparison to 2008
due to the economic growth. Of all CIS countries, only Ukraine reduced
its expenses on national defense both in relative terms (decrease of
the military budget from 1.1% of the GDP in 2008 to 0.85% of the GDP
in 2009) and in absolute terms (from $1.2 billion to $1.08 billion
respectively) due to the significant impact of economic crisis and
devaluation of national currency (hrivna got devaluated by more than
73% in comparison to US dollar in half a year). Kyrgyzstan and Moldova
will spend less than 1% of the GDP on defense again.