Danish military analyst Anders Puck Nielsen on the comparison between Russian and European defense budgets.
Here's a summary of the main points:
• Recently, news surfaced claiming that Russia's defense budget allegedly equals the combined defense budgets of all European countries. The figures in this news were presented very inaccurately, though it’s also important not to underestimate the Russians.
• The International Institute for Strategic Studies (IISS) publishes an annual report called "The Military Balance," which compares the sizes of armies from different countries. Journalists picked up on these numbers, claiming that Russia’s military budget exceeds the combined defense budgets of European countries.
• The problem is that Russia’s budget is calculated based on purchasing power parity (PPP) – a GDP calculation modifier that considers the fact that prices and wages are lower in Russia, so producing a product there is cheaper than producing the same product in European countries. At the same time, European budgets are presented without considering PPP, which underestimates them in comparison. Moreover, in its report, IISS didn’t include Ukraine among European countries, which is extremely illogical and shameful for those who made this comparison.
• It’s important to note that both underestimating and overestimating Russia’s potential are dangerous. Those who tend to underestimate argue that Russia’s economy is similar to Italy’s, meaning Europe as a whole overshadows Russia. This leads to the conclusion that there’s no need to increase military budgets, even though Europe is facing the worst political crisis since World War II.
• At the same time, the impact of purchasing power parity should not be disregarded. The Russians produce most of their weapons domestically, rather than purchasing them abroad, so the PPP modifier clearly plays a significant role in how much they can produce. In this context, Russia’s military budget is quite large.
• Both methods of calculating nominal GDP and purchasing power parity have their advantages and disadvantages. According to Nielsen’s estimate, it’s fair to say that Russia’s defense budget is larger than the combined defense budgets of the UK, France, and Germany, but certainly not larger than the combined budget of all of Europe.
• Another issue is that spending just a little more than the Russians is not enough to deter Russian aggression. The Russian leadership may believe that Europeans won’t have the resolve to dedicate all their efforts to defend one or more countries in case of an attack.
• Additionally, the Russians may achieve local superiority in forces – of course, if, for example, the French, Spaniards, and Brits don’t send all their forces to Eastern Europe if it’s attacked. It’s important to consider how many of their own forces they can realistically deploy to a distant theater of war.
• The third problem is that European armies have a lot of powerful high-tech weapons, but they are expensive, which limits their quantity. These weapons will quickly run out if the war drags on. Therefore, Europe really does need to increase its defense budgets, but manipulating figures, like those in the IISS report, can also lead to harmful misjudgments in assessing the balance of forces.
