July 21, 2020 / 11:49 AM / 16 days ago

Russia, hit by coronavirus crisis, considers military spending cuts

MOSCOW (Reuters) - Russia is considering cutting spending on the military as low oil prices and the coronavirus crisis have pummelled its economy, a document published by the finance ministry shows.

The ministry has proposed the government cut state spending on the military by 5% between 2021 and 2023. The proposal, published on Monday, also includes budget spending cuts of 10% for the court system, the servicing of Russia’s debt and wages for civil servants.

Russia, which flexed its military muscle with its 2014 annexation of Crimea from Ukraine and intervention in the Syrian conflict, dropped out of the list of the top five biggest military spenders in 2018 after its spending fell 3.5%.

Last year it returned as the world’s fourth largest military spender and increased its military expenditures by 4.5% to $65.1 billion, according to the Stockholm International Peace Research Institute. That amount corresponded to 3.9% of its gross domestic product, it said.

President Vladimir Putin has called for better living standards and investment in healthcare and education. Some government officials have called for lower military spending to free up funds for such initiatives.

Military expenditures have increased under Putin, but the Kremlin said in 2018 that Russia would cut its defence budget to less than 3% of GDP within the next five years.

Exact figures for military funding are considered a state secret in Russia, but in 2018 the defence ministry said 20 trillion roubles ($282 billion) had been earmarked for the construction of military infrastructure under a new armament programme for 2018-2027.

The World Bank expects the Russian economy to contract by 6% this year.

Reporting by Gabrielle Tétrault-Farber and Darya Korsunskaya; Editing by Katya Golubkova and Steve Orlofsky

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