According to Bloomberg, Russia has been spending a huge amount of secret funds on accelerating its military buildup since the Cold War. This unprecedented amount of money is hidden in the so-called black part of the federal budget. It is estimated that 60 billion dollars have been allocated to the secret funds of the federal budget.
According to the Gaidar Institute, an independent think tank in Moscow, this budget has doubled since 2010 and it is part of Putin’s new policy to revive Russia’s shrinking economy by ordering local factories to construct more new tanks, aircraft, boats, submarines and missiles etc.
Recent information states that defense, national security and law enforcement consume up to 34% of the national budget, more than double the percentage spent in 2010. Of course this new economic policy has affected crucial social sectors such as health care.
The main goals of the Russian government are, according to Ruslan Pukhov (Director of the Center for Analysis of Strategies and Technologies, and an adviser to the Defense Ministry in Moscow),
“…to strengthen security at all levels of society and promoting innovation to end the macroeconomic stagnation”. As Pukhov said, “The solution to both problems is to intensify the development of the military-industrial complex.”
Since 2000 Putin has increased Russia’s defense budget more than 20-fold in ruble terms. Last year Russia’s defence budget exceeded 84 billion dollars. This was the third biggest defence budget in the world, behind the budgets of the U.S. and China.
There are 1,300 companies and organizations and 2.5 million people that make up the Russian defense industry and about half of the defense budget for 2015 was used in the first quarter of the year, though most of what was paid for is characterized as ‘classified’.
Additionally, Putin recently authorized the initiation of the “industrial battalions” programme. This will give thousands of draftees in the Russian Armed Forces the option of working in defense enterprises instead of joining the regular military. This new programme will allow an increase of productivity in the defence industry and the reduction of costs.