Putin seeks to close US military gap

Vladimir Putin called on Russian defence industries to close a growing security gap between Russia and the US, whom he accused of attempting to usurp the "strategic balance” between the two countries.

The Russian president’s robust language, in a major speech to top generals on Wednesday, indicated that plans announced last year to spend an additional Rbs23tn ($755bn) upgrading Russia’s weaponry over the next decade are going ahead.

"Attempts are being made to upset the strategic balance,” Mr Putin said, making clear that he considered an array of threats to Russia’s interests too hazardous to ignore.

"The dynamic of geopolitical developments call for our response to be well-calculated and quick,” he said, according to a transcript of his speech on the Kremlin’s website. "The Russian armed forces must move to a dramatically new level of capabilities as soon as in the next three, four or five years.”

He singled out the US ballistic missile shield programme, as well as the possibility of further Nato expansion and the attempts to militarise the Arctic, as key geopolitical threats that Russia needed to respond to.

High-ranking officials have said the proposed defence hikes, made last year during Mr Putin’s re-election campaign, are too expensive and will divert funds from other uses, such as sorely needed investments in infrastructure and education.

For example, Russia’s former Minister of Finance Alexei Kudrin told the newspaper Vedomosti last November: "Just as every other country starts to cut defence spending, Russia is doing the opposite. And yet we have neither the capabilities nor the money to raise these [defence] expenditures.”

The increase in military spending last year was equivalent to Russia’s entire Rbs2.5tn ($82bn) education budget, he said.

Ensuring that the additional defence budget money is well spent has been a headache for the ministry of defence, which faces entrenched interests in Russia’s "military industrial complex” who historically have attempted to eat away at defence budgets with price hikes.

Conflict between the military industries, known as Russia’s "military industrial complex”, and the defence ministry over procurement prices were thought to be the reason behind the sacking last year of defence minister Anatoly Serdyukov, though the formal explanation was suspected corruption.

Deputy defence minister Yuri Borisov said on Wednesday that in the wake of Mr Serdyukov’s dismissal, both the ministry and defence suppliers would work to avoid "price wars”.

"Up until recently, the whole country was witness to these so-called ‘price wars’ of the ministry of defence with industry. Today we will be working intensively on a dialogue which will avoid these conflict situations,” Mr Borisov said.

Mr Putin said Russia’s main strategic priority in response to the threats he enumerated was "integration of Eurasia” – the creation of an economic union with the former states of the Soviet Union.

Some western officials, such as former US Secretary of State Hillary Clinton, have warned that Putins "Eurasian” project is simply another way of attempting to re-create another version of the USSR.