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Russian President Vladimir Putin (L) and Defence Minister Sergey Shoygu are facing tough budgetary choices as Russia’s defence industry struggles to overcome supply-chain disruptions caused by the conflict with Ukraine (photo: dpa)

Russian military faces budgetary ‘death spiral’ after cutoff from foreign suppliers

The crisis in Ukraine is wreaking havoc on Russia’s ambitious plans to modernise its armed forces. The most obvious cause is the combined impact of cheap oil and Western sanctions on state finances. Thus far, the Kremlin has insisted that military procurement be exempt from otherwise drastic budget cuts. But unless the price of oil starts climbing again very soon, that commitment will stretch to breaking point, forcing tough choices to be made.

Russia’s most visible procurement problem has been the termination of cooperation with Western arms producers as a consequence of international sanctions. The saga of the two Mistral-class amphibious assault ships ordered from France in the sum...

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Professor Stefan Hedlund
Domestic producers have struggled to rebuild supply chains that existed within the Soviet military-industrial complex, but have since been disrupted. Many arms programmes have been delayed, especially since the cut-off of foreign deliveries, as producers searched for component suppliers or even resorted to in-house production
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  • Report is targeted to the decision makers in cross country manufacturing – suppliers, manufacturers, logistics.
  • Also considered useful for the administrative university facilities, to better understand the possible effects of current decisions.
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