What’s the cost of war for Russia, and what could be done with this money?
Hostilities in Ukraine are now in their third month. At the time of my calculations, day 65 is underway. The war is an endless horror: according to the latest UN figures, it has claimed the lives of 2,899 civilians, military casualties are probably in the tens of thousands (back in March, military intelligence and the US State Department estimated Russian military losses at 7,000 and Ukrainian losses at 2,000-4,000).
Destroyed cities, millions of refugees. And a paradoxical fact that defies comprehension: enormous sums of money are spent daily on this mass murder that could have been spent on solving social problems. This money could have been invested in the prosperity of both countries, but now Vladimir Putin has invested it in destruction.
In fact, what sums are we talking about? Kyiv, according to estimates of the Ukrainian Ministry of Finance, spends $10bn a month on the war. Of course, this money could also be put to better use, but it should be understood that the Ukrainian side was forced to spend it: it had no choice whether to go to war or not.
But for Russia, which initiated the war, such spending was a conscious choice. And that is why it is the expenditure of the Russian budget on the “special operation” that can be evaluated in terms of the best use of money.
So how much is Russia spending on the war? There is no official information about it, and experts’ estimates vary greatly. Therefore, in order to derive a possible amount of expenses, we will consider the range of expert data available in the public domain and reduce it to an arithmetic average. Of course, we must immediately stipulate that the figure obtained will not be exact: it will only be a weighted average. So:
According to American military expert Robert Farley (who is incidentally often quoted in Russian official publications), one day of war with Ukraine costs Russia no less than $500m. That's 35.5 billion rubles.
Surprisingly, the Russian state media quote even more than the cost of one day of the “special operation”. The publication Ukraina.ru (part of the holding company Russia Today) reports the figure of $20bn (1.4 trillion rubles), pointing out, however, that these are not official figures, but their own calculations.
Other sources also quote the figure of $20bn. It appears, for example, in the publication of the Turkish news agency Anadolu, which cites a study conducted by the Centre for Economic Recovery and EasyBusiness, and Civitta.
Meanwhile, the data department of Novaya Gazeta, without naming the exact amount spent, estimated the daily expenses of the Russian budget on the war differently. The journalists used data about the cost of the “special operation” in Syria ($2.4m per day), and compared the forces involved in both wars. The Russian contingent in Syria was 1,600 men; in Ukraine it was at least 149,000 men.
A rough calculation (taking into account payments to military and civilian specialists, communications and IT services, maintenance of military equipment, medical expenses and food, but without taking into account the transport shoulder due to the lack of a complete list of military units involved in the Ukrainian “special operation”) shows that for one day of war Russia can spend about $223.5m – or 15.8bn rubles.
- The arithmetic average of all these figures is $6.9bn. This is 483 billion rubles per day.
Once again, we should emphasise that the figures are approximate. It should be understood that even in conditions of sanctions, Russia continues to receive money from the export of hydrocarbons, partially covering the cost of the war. According to The Guardian, during the "special operation", Moscow even doubled its profits from the sale of oil, coal and gas to the EU compared to last year's figures, earning €44bn ($46.2bn or 3.2 trillion rubles) in two months.
Around 483 billion rubles in one day of war is 31 trillion rubles in 65 days. “There is, of course, a ‘margin of safety’: even the unfrozen Russian reserves amount to about $340bn, and from the funds hanging in foreign accounts (about $300bn) Russia, judging by government statements and according to analysts, is paying off foreign debt. However, the money spent on the war could have been put to better use.
So, what problems could have been solved by spending 31 trillion rubles?
Russia spends 60 billion rubles a year on drugs for children with orphan diseases (there are about 4,000 of them in the country). If the dynamics is maintained, 31 trillion could support people with rare diseases for 516 years.
The cost of gasification of 82 per cent of Russia's population (now, according to official data, 72 per cent is gasified) was estimated by the Presidential Administration at 1 trillion rubles. Thus, the war has already “piped up” 31 programmess of gasification.
The budget expenditures of Moscow in 2022 will amount to 3.63 trillion rubles and those of Saint Petersburg will reach 971.5 billion rubles. The money spent during the first two months of the war could have been enough for nine years of maintenance of the capital and 31 years of life support of the second city of the country.
#### The money spent during the first two months of the war could have been enough for nine years of maintenance of the capital and 31 years of life support of the second city of the country.
31 trillion rubles is the equivalent of:
25 federal annual budgets for education.
50,488 kilometres of federal highways of Tavrida level (6 lanes with safety lanes and video surveillance).
22 Russian space programmes
620 programmes for the resettlement of citizens from emergency housing.
In the end, even if this money were simply handed out to all 146,171,015 residents of Russia, there would be more than 212,000 rubles per person.
But instead - bombed out Odesa, Kharkiv, Sumy, Chernihiv, Kyiv, Mykolaiv, destroyed Mariupol...