Russian Ambitions and Russian Realities

Fabius Maximus has posted a full accounting (with permission) of George Friedman's (of STRATFOR) latest Russian analysis. The STRATFOR article titled "The Russian Economy and Russian Power" is an interesting read, well rooted in history, and worth consideration.

Friedman's article takes on a number of issues ranging from the disconnected nature of Russian economy and military power, but places this within the context of Russians demographics issues. It addresses the Obama administrations policy and suggests it is very possible will begin a rapid rearming of its military.

It is not unsound analysis by Friedman, but there are a number of emerging factors suggesting Russia may be at the breaking point as a military power, and that may be the calculation of the Obama administration Friedman describes as something else. You can read all of Friedman's analysis on Fabius Maximus's blog, but let me offer some additional considerations.

Back in early July, the Moscow-based weekly Independent Military Review published an article suggesting the Russian Navy is on an irreversible slide toward only 50 ships by 2020 and there is little reason to expect anything but collapse of the Russian Navy. The key quote, after listing out the woeful state of shipbuilding and noting how many years it is taking to build ships Russia is counting as new, concludes: (translation me)

In general, if you compare all the figures - the state of the fleet, the ratio of the rate of cancellation of the existing ships and building new ones, it becomes quite clear: Russian Navy is in a state of irreversible collapse.

There may be a hint of truth to this. Russia has kept its shipbuilding industry workforce 'sustained' at minimum levels mostly through exports, but the export market is drying up. The latest news is all bad, with India's autonomous Comptroller and Auditor General (CAG) criticizing the purchase of the Russian aircraft carrier Admiral Gorshkov, and the Yantar shiyard currently building frigates for India looking for someone to provide a $60 million loan. These problems are primarily a result of Russia's economic decline, specifically currency issues, but also because Russian shipyards are anything but modern. While the workforce may still be sustained at a minimum level, the design base for Russian naval vessels is almost non-existent, making the likelihood of a new fleet of warships, much less aircraft carriers, very unlikely.

While Russian military reforms are widely praised as a necessary adjustment, and they really are impressive if they can be pulled off, it is unlikely that Russian leadership will be able to pour money into naval forces as planned with expectations of good results. The announced Russian military reforms (this is a great article discussing the Army changes) is to downsize the Army and build up an expeditionary Navy force, but first Naval plans consist primarily of building up the strategic nuclear deterrent centered around a new class of SSBNs. The Bulava missile problems have compounded the issues of doing exactly that, but Russia is spending nearly 46% of its entire 2009 defense budget on its Naval force (most of which is for SSBNs and Bulava missiles).

With grand plans of 6 aircraft carriers, the first of which would begin construction around 2015, and massive changes to the Black Sea Fleet, Russian ambition appears well ahead of Russian potential to achieve stated goals. I have a hard time seeing how the massive rearming of the Russian military George Friedman suggests may be coming is even possible, particularly at sea, when the problems aren't simply economic but also infrastructure. What bothers me though is that I don't believe Russia is in a long term downturn economically, indeed my concern is that Russia is on the verge of a massive rebound, and it is unclear what the result will be.

The Obama administration has made economy the number one priority, but whether the administration will be successful or not domestically remains unclear. Global trends suggest the rest of the world economy is poised for a rebound next year. The largest expected consequence of the global rebound is very high energy prices, specifically the price of oil and natural gas, both of which are big revenue producers for Russia. The result will be a massive increase in Russian cash flow, and potentially as Friedman recognizes, a disproportionate distribution of those revenues in favor of military capabilities towards the purchase of European and potentially Chinese military goods. What Friedman's analysis doesn't address however is that money isn't the biggest challenge to a rebound of Russian military power, Russian industry base is the biggest challenge. That may be why news that Russia looking at the possibility of 'importing' military power is such big news.

While news reports of Russia buying ships from French naval yards is the discussion today, the real issue is that Russian technology can be combined with Chinese shipbuilding and over the next decade Russia could potentially produce a massive fleet expansion, while at the same time allowing the Chinese Navy to benefit by obtaining several modern technologies Russia has for ships systems that China currently does not. I am specifically thinking about sonar systems and electronic countermeasure systems, technologies where Russia is more advanced than China.

With global trade down primarily due to slower economic recovery in the US, workload in Chinese shipyards for new commercial ships is in free fall. China cannot allow shipyards to remain idle long, and latest statistics suggest new ship orders are down nearly 96% in China as of May 2009. This has all the makings of a 'stimulus' package for shipbuilding coming to China, and the final product is likely to be vessels supporting Naval capabilities.

While I am not sure if I agree with Friedman's conclusions, I do think he is right to highlight Russia as the country to watch in the near term. More than anything, many Russian elites believe they are facing a potential existential threat as it relates to demographics, and that could trigger a military response towards insuring populations of former Soviet Union territories. The two Akula submarines off the east coast could be seen as an interesting reminder that US interference in future Russian military operations is not welcome, and Russia retains some capability fight us in our back yard if necessary. If Russia continues to believe the future of Russian military power is at sea, and defense budget spending heavily favoring the Navy does support this point of view btw, it could be that Russia looks to China to rebuild the surface fleet.