Trends in Russia's Armed Forces: an Overview of Budgets and Capabilities

C O R P O R A T I O N Trends in Russia’s Armed Forces An Overview of Budgets and Capabilities Keith Crane, Olga Oliker, Brian Nichiporuk For more information on this publication, visit www.rand.org/t/RR2573 Library of Congress Cataloging-in-Publication Data is available for this publication. ISBN: 978-1-9774-0195-3 Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2019 RAND Corporation R® is a registered trademark. Limited Print and Electronic Distribution Rights This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions. The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. Support RAND Make a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org Preface This report documents research and analysis conducted as part of a project entitled Security in Europe in the Wake of the Ukraine Crisis: Implications for the U.S. Army, sponsored by the Office of the Deputy Chief of Staff, G-8, U.S. Army. The purpose of the project was to undertake an assessment of European security requirements into the next decade and concomitant implications for the U.S. Army. This research was conducted within RAND Arroyo Center’s Strategy, Doctrine, and Resources Program. RAND Arroyo Center, part of the RAND Corporation, is a federally funded research and develop- ment center sponsored by the United States Army. RAND operates under a “Federal-Wide Assurance” (FWA00003425) and complies with the Code of Federal Regulations for the Protection of Human Subjects Under United States Law (45 CFR 46), also known as “the Common Rule,” as well as with the implementation guidance set forth in Department of Defense (DoD) Instruction 3216.02. As applicable, this compliance includes reviews and approvals by RAND’s Institutional Review Board (the Human Subjects Protection Commit- tee) and by the U.S. Army. The views of sources utilized in this study are solely their own and do not represent the official policy or position of DoD or the U.S. government. iii Contents Preface ............................................................................. iii Figures .............................................................................vii Tables .............................................................................. ix Summary .......................................................................... xi Acknowledgments ...............................................................xv Abbreviations ................................................................... xvii CHAPTER ONE Introduction ....................................................................... 1 CHAPTER TWO Russia’s Military Budgets and Defense Industry ........................... 3 Trends Since 1994 .................................................................. 4 Composition of Military Spending by Expenditure Category ...............11 Composition of Military Spending by Service ................................12 Future Spending ..................................................................26 CHAPTER THREE Russian Capabilities Today ....................................................29 Ground Forces and Airborne Troops .......................................... 30 Air and Aerospace Defense Forces ..............................................35 Naval Forces .......................................................................39 Strategic Rocket Forces and Capabilities .......................................45 Conclusions .......................................................................54 v vi Trends in Russia’s Armed Forces CHAPTER FOUR Assessing Russian Military Capabilities ....................................55 Reform Goals .....................................................................56 Personnel ...........................................................................59 Interoperability and Reorganization ...........................................60 Modernization .....................................................................61 A Mixed Military Posture ........................................................65 CHAPTER FIVE Conclusion ........................................................................69 References .........................................................................73 Figures 2.1. Russian Defense Budgets and Military Expenditures, 1996–2016, in Constant Price Rubles of 2014 .................... 6 2.2. Russian Defense Budgets and Military Expenditures, 1996–2016, in Constant Price Dollars of 2014 ................... 7 2.3. Russian Defense Budgets and Military Expenditures as a Share of Gross Domestic Product, 1995–2017 .................... 9 2.4. Russian and European Defense Budgets, 2016 ..................11 2.5. Russian Military Expenditures by Category, 2000–2016 .......12 2.6. Russian Military Expenditures by Service, 2001–2016 .........13 2.7. Russian Defense Industry Sales, 2000–2014 .....................14 2.8. Russian Arms Exports and Domestic Procurement versus Sales of Russia’s Largest Defense Companies, 1998–2014 ......16 2.9. Cumulative Russian Arms Transfers by Recipient Country, 1998–2014 ............................................................18 2.10. Cumulative Russian Arms Transfers by Weapon System, 1998–2014 ............................................................19 2.11. Russian Defense Budgets and Military Expenditures in Constant Price Dollars of 2014 ................................... 27 4.1. Russian Federation Military Districts .............................61 4.2. Capability and Capacity of Classes of Major Weapon Systems ...65 vii Tables 2.1. Major Enterprises by Sector ........................................21 3.1. Ground Combat Units by Military District ......................31 4.1. Percentage Targets for Modernization, 2013–2020 .............62 4.2. Modern Russian Cruise and Ballistic Missiles .................. 64 ix Summary This report assesses how Russian military forces are postured and are likely to operate based on open-source reporting about their organization, modernization plans, force structure, and readiness. It discusses the goals and effects of Russian military reform efforts, including ini- tiatives that span all of the Russian armed forces’ services and indepen- dent branches. The report touches on most of Russia’s armed forces’ major capabilities, by service or domain, but it is not comprehensive. It concludes with a look at how those capabilities are being integrated in practice.1 Russian military capabilities are considered in light of more than a decade of effort by Russia’s leadership to devote increased resources and political will to reform Russia’s armed forces into a more respon- sive and effective tool to pursue Russia’s interests and defend Russia’s territory. The study team found that although Russian projections of its future capabilities are often optimistic, since 2008 the Russian military has become much more capable in general, not only of defending Russian territory but also of launching invasions against its neighbors, Georgia and Ukraine. Improvements have been a result of substantial increases in expenditures on military programs and forces, as well as a focus on readiness, organization, fielding modernized weapons, and updating tactics and doctrine. After the 1998 economic crash, Russia’s defense budget began to grow in rubles in real terms, adjusted for the rate of Russian infla- tion, although with some ups and downs. Increases in the budget were 1 The research for this report was done primarily in 2015–2016; it was updated in 2018. xi xii Trends in Russia’s Armed Forces especially large between 2005 and 2009 and from 2012 through 2016. Those made through 2015 permitted growth in the resources for personnel costs, which has been a major area of emphasis of Russian reforms in recent years. The increase in Russia’s defense budget in 2016 was due entirely to a write-off of loans to Russian defense manu- facturers by the Ministry of Finance, which recognized past expenditures on recapitalizing the Russian defense industry; these loans will never be repaid to the government. Deducting the write-off, the defense budget fell that year and in 2017. Planned defense budgets by the Ministry of Finance indicate that Russia’s spending on defense has entered a period of decline: In constant price rubles, the 2020 defense budget is projected to be less than every budget since 2010. On the one hand, the willingness of Russia’s leadership to cut back on defense spending over the next few years while increasing expenditures on social programs suggests that it is satisfied with the progress that has been made in improving Russia’s armed forces and that Russia’s leadership is focused on trying to narrow the

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