Tag: military spending

The War on Poverty

Russia spent approximately 10.9 trillion rubles [approx. 118 billion euros] on military operations against Ukraine in 2025: this is five times the combined income of all Russians living below the poverty line. This estimation is based on Rosstat’s data (as of Saturday, March 14) on the country’s GDP (213.5 trillion rubles), as well as on a statement by Defense Minister Andrei Belousov, who reported at a Defense Ministry meeting that expenditures “directly related to the special military operation” (as the Russian Federation refers to its armed aggression against its neighbor) amounted to 5.1% of GDP. The combined income of all Russians living below the poverty line was less than two trillion rubles.

According to Rosstat, 9.8 million Russians lived below the poverty line in 2025; this is the first time the figure has fallen below ten million. Their percentage of the country’s total population thus decreased from 7.1% to 6.7%. The poverty line, as calculated by Russia’s federal statistics agency, stood at 16,903 rubles [approx. 183 euros] per month.

One-fifth of the cost of the war against Ukraine would thus technically suffice to completely eradicate poverty in Russia—simply by raising the incomes of the poorest Russians to the official poverty line.

Inflation for the poor

The methodology used to define the poverty line raises questions among experts. The index is based on the minimum subsistence level for the fourth quarter of 2020, adjusted for official inflation. For low-income citizens, however, real inflation is generally higher than the average.

TsMAKP (Center for Macroeconomic Analysis and Short-Term Forecasting), a think tank with close ties to the Russian government, calculates a separate metric,“inflation for the poor.” It is based on a simplified consumer goods basket which includes a minimal assortment of food, medicines, cleaning products, and housing and utility services, but excludes hotels and transportation. This metric regularly exceeds the average inflation rate for Russia.

TsMAKP calculates that that last year’s actual poverty line stood at 18,311 rubles per month for working-age Russians, 16,621 rubles per month for children, and 13,947 rubles per month for pensioners—which is sixty percent lower than last year’s average pension of 23,425 rubles per month.

Source: Sergei Romashenko, “Russia spent five times as much on the war as the combined income of all its poor people,” Deutsche Welle Russian Service, 14 March 2026. Translated by the Russian Reader

Source: Katharina Buchholz, “Where the Super Rich Reside,” Statista, 11 March 2026

Income inequality in Russia has reached its highest level in more than a decade, according to an analysis by the independent research group Yesli Byt Tochnim.

The state statistics agency Rosstat initially published and later removed the inequality measure known as the Gini Index from its January 2026 social and economic report, Yesli Byt Tochnim said.

The group said it was able to reconstruct the indicator using other publicly available data on income distribution.

According to its analysis, Russia’s Gini Index rose 2.2% over the past year, from 0.410 in 2024 to 0.419 in 2025, the highest level since 2012. On the scale, 0 represents perfect equality while 1 represents maximum inequality.

Income inequality in Russia has risen for four consecutive years and is now approaching the record highs of 0.421-0.422 recorded between 2007 and 2010, Yesli Byt Tochnim said.

President Vladimir Putin has set targets to reduce Russia’s Gini Index to 0.37 by 2030 and to 0.33 by 2036 — the final year he could remain in power under constitutional changes that reset presidential term limits.

Other data in Rosstat’s report also point to a widening wealth gap.

The share of total income going to the richest 20% of Russians rose from 46.9% to 47.6% over the past year, while the share earned by the poorest 20% fell from 5.3% to 5.2%.

The average income of the wealthiest 10% of Russians is now 15.8 times higher than that of the poorest 10%, up from 15.5 times a year earlier.

This week, Forbes included a record 155 Russians in its annual ranking of the world’s billionaires, marking the fourth straight year that the number of Russians on the list has increased. Their combined net worth was estimated at $695.5 billion.

Source: “Income Inequality in Russia Approaching Record Highs, Research Group Says,” Moscow Times, 13 March 2026

Squandering Its Way to Superpowerdom

“Squandering”: Did the US Secretary of State Grasp the Russian Approach to Budget Spending?
The Kremlin Accused the State Department of Tactlessness and Unprofessionalism, Yet Pompeo’s Remarks Were on the Mark
Yevgeny Karasyuk
Republic
December 13, 2018

padrino.jpgVenezuelan Defence Minister Vladimir Padrino gives his thumb up as he sits on the cockpit of a Russian Tupolev Tu-160 strategic long-range heavy supersonic bomber after it landed at Maiquetia International Airport, north of Caracas, on December 10, 2018. Courtesy of Federico Parra/AFP/Getty Images

Russian’s decision to send strategic bombers on a junket to an airport near Caracas elicited a curious reaction from US Secretary of State Mike Pompeo, who publicly expressed his pity for Russian taxpapers, whose money the Kremlin, habitually disregarding the costs, has been spending on its geopolitical moves.

“The Russian and Venezuelan people should see this for what it is: two corrupt governments squandering public funds, and squelching liberty and freedom while their people suffer,” Pompeo wrote.

The Russian Foreign Ministry responded by calling Pompeo’s statement “utterly unprofessional” and even “villainous.” Pompeo’s remarks, which the Kremlin, in turn, dubbed “inappropriate” and “undiplomatic,” were apparently really lacking in nuance: the hardships of Russians, fortunately, cannot yet be compared with the suffering of Venezuelans. But, hand on heart, was Pompeo so wrong when he talked about the losses to the Russian federal budget and lack of oversight?

Russian society has an extremely vague notion about how much the Kremlin’s expansionism has ultimately cost the country. According to calculations made by IHS Jane’s at the outset of Russia’s operations in Syria in autumn 2015, Russia could have been spending as much as $4 million a day. Later, the Yabloko Democratic Party, which is not seated in the Russian parliament, estimated the Kremlin had spent a total of 108–140 billion rubles [between $1.6 and $2.1 billion] on Syria. A more accurate assessment would be difficult to make. Experts doubt that anyone, including the Finance Ministry, keeps tabs on such expenditures. Thus, nobody knows the real cost of Russia’s involvement in the Syrian conflict, argues the Gaidar Institute’s Military Economics Laboratory.

The budget’s fading transparency has been a trend in recent years. In 2016, secret and top-secret allocations accounted for 22% of total federal budget expenditures, a record for the entire post-Soviet period, and much higher than secret allocations in comparable countries, according to RANEPA’s March 2015 report on the Russian economy.

Quite naturally, this state of affairs has not improved the quality of the state’s financial decisions. In terms of effective state spending, Russia ranked nineteenth in a new rating of twenty-five countries, compiled by the Higher School of Economics using data from the World Bank and OECD. Since they are not priorities for the current regime, problems with child mortality and life expectancy were among the reasons Russia ranked so low in the survey: the government spends more on the army than on healthcare—4.3% of GDP versus 3.8% of GDP, respectively. In these circumstances, the chances the Kremlin’s strategic projects in the Middle East and Africa (e.g., the Central African Republic, Burkina Faso, the Democratic Republic of the Congo, and Mozambique) will be decently funded are always much greater than the national healthcare project, which stipulated increased government spending on cancer treatment. The government nixed the plan over summer.

Since it remains largely Soviet in spirit, Russia’s foreign policy has been categorically blind to history’s lessons. The Soviet Union’s exorbitant geopolitical ambitions and support for fringe regimes around the world left the country with a legacy of mostly toxic multi-billion-dollar debts. The process of writing them off has been disguised as a form of international charity or, speaking diplomatically, official development assistance (ODA). According to RANEPA, writing off the debts of developing countries accounted for 35% of all such “international aid” last year or $425 million. It has been the Russian government’s usual way of doing business. Previously, the Russian government wrote off the debts of Nicaragua ($6.3 billion), Iraq ($21.5 billion), North Korea ($10.9 billion), Syria ($9.8 billion), Afghanistan ($11 billion), and Cuba ($29 billion), among other countries. Venezuela risks joining this sad list. Over the past twelve years, Russia has invested a total of $17 billion in the country.

Russia’s Expenditures on Official Development Assistance (Excluding Humanitarian Aid), 2005–2017, in Millions of Dollars. Sources: OECD, Russian Finance Ministry. Courtesy of Republic

Since it was paid for by the Russian federal budget, which has been running a deficit for the last seven years, Russian officials probably did not see the transatlantic flight of its strategic bombers as too expensive. On the contrary, they saw it as a flashy display of Russia’s military prowess and proof of its influence in the region. However, the government of Nicolás Maduro signed off on the stunt. Subject to growing pressure from creditors and an angry, desperate population, it lives day by day. In all likelihood, it will soon collapse, leaving behind a mountain of unpaid bills and unfulfilled obligations to its allies. If this is the case, can we evaluate the Russian government’s action better than the tactless Mike Pompeo did? Probably not.

Translated by the Russian Reader