Russia conducted its largest ever debt issue in a day, collecting RUB 820 billion ($13.6) billion to cover military spending, which has gone up significantly since its full-scale invasion of Ukraine, reads the UK Defence Intelligence update for Nov. 19.
According to the update, Russia plans "national defence expenses" at about RUB 5 trillion ($84 billion) for 2023. That is over 40% more than in the sum allocated in the 2021 budget.
"The size of this auction highly likely indicates the Russian Ministry of Finance perceives current conditions as relatively favourable, but is anticipating an increasingly uncertain fiscal environment over the next year," UK intelligence said.
Russian dictator Vladimir Putin has pumped over $1.1 trillion into his army over his 21 years in power, and Russia now has one of the largest defense budgets in proportion to GDP. The Russian Ministry of Finance is also banned from reducing military spending.
Meanwhile, for more than two decades the Kremlin has been underfunding education, medicine, infrastructure, and the nation’s other peaceful needs for the sake of the Russian Armed Forces, Russian journalist Farida Rustamova said in a report on her own website.
At the same time, as the war against Ukraine shows, the effectiveness of the Russian army is extremely low, with corruption and waste thought to have soaked away much of Russia’s defense spending.
In 2020, Russia’s defense budget was $66.84 billion or about 4.3% of GDP. The United States defense budget was 3.7% of GDP, but was much higher in real terms ($766.58 billion) due to the country’s vastly greater GDP.