Speaking about the economic dimension of Putin's mobilization, most commentators focus on the catastrophic consequences for the skilled labor market and the loss of workers by enterprises. All this is true: for example, back in July, Putin at a meeting with his ministers admitted that in the IT industry alone, a shortage of qualified personnel of a million people is expected in the next two years, and now it is clear that it will only get worse.
According to surveys of entrepreneurs conducted by Rosstat, the lack of skilled workers is among the top 5 factors limiting the growth of industrial production, and the importance of this problem has grown in 2022. Mobilization poses the most unexpected threats, including to attempts to circumvent Western sanctions: for example, it hits small companies specializing in complex parallel import schemes.
But it remains to be seen how mobilization will hit the skilled labor market, and for now, one can only guess. But what has now become completely clear is that Putin will not have any sufficient budget for the maintenance, equipment and supply of the newly mobilized manpower.
This becomes clear from the document “The main directions of the budget, tax and customs-tariff policy for 2023-2025”, which fell into the hands of Vedomosti. This document allows for the first time to see the scale of the increase in military spending in connection with Putin's aggression against Ukraine. And the main conclusion from it is deafening: Putin will not have enough money to further finance the war and mobilization. All his efforts are doomed primarily financially.
Putin does not have enough money to further finance the war and mobilization
What follows from this document? The fact that military spending in 2022-2024 (for a later period the government does not plan them yet; I would like to believe that another government will decide this issue in the future) is planned to be increased from the previously approved about 3 trillion rubles a year to about 5 trillion per year (a total of 3.4 trillion over three years, from 2022 to 2024 inclusive).
This is absolutely not enough even to finance the current war – not to mention the cost of additionally mobilized manpower of several hundred thousand people. We do not know how many Russians will eventually be called up for mobilization – maybe the declared 300,000, perhaps more or less. But, relatively speaking, this is a force comparable to the current number of contract employees declared to Shoigu (the leadership of the Ministry of Defense spoke of 400,000 contract soldiers).
To put it simply, in the previously approved “peacetime” military budget, out of 3.5 trillion spending on the actual maintenance of the army (monetary allowance and supplies), about 1.2-1.5 trillion went (the rest went to the military-industrial complex and the purchase of weapons, mainly under the "closed" articles of the military budget). This is already extremely small for the second largest army in the world. For example, in December at the collegium of the Ministry of Defense, Putin admitted that the average salary of a lieutenant is only 81,000 rubles.
It is clear that in the conditions of such a large-scale war, the cost of monetary allowance, taking into account "combat" payments, should increase sharply. Only under these items, the increase in the cost of maintaining the troops stationed today in Ukraine should have been increased, in my estimation, by no less than 3-4 trillion rubles a year, and not by the planned 1-2 trillion.
In the conditions of a large-scale war, the cost of monetary allowance should rise sharply
However, Putin, in addition to the active troops, wants, in fact, to mobilize a second army, comparable in size, officially equating the newly mobilized to contract soldiers. It is quite obvious that even the military budget, increased to 5 trillion rubles a year, will not suffice for these purposes. Apparently, Putin and the Ministry of Finance are preparing for a massive "scam" of the military with a salary (show your relatives and acquaintances of the military these figures and warn them about it) – there is no other explanation (in case of death, you will still have to pay large compensations to families).
With the supply of the army, everything is generally very bad. In the current military budget, only 436 billion rubles are allocated for these purposes for the entire army (the data is from the materials for the federal budget approved in December 2021). We see this impoverished "supply" on the battlefield in all its glory. In order for Putin to be able to establish a normal supply of the army, he needs to allocate amounts of a completely different order for these purposes – several trillion rubles a year. Nobody is going to do this. Apparently, the calculation is that they will get food and uniforms “on their own”.
We see the poor "supply" on the battlefield in all its glory
In addition to the fact that it is not possible to fit into the newly proposed 4.5-5 trillion rubles a year the financing of the newly recruited manpower and its supply, there is a more serious problem. In previous years, about two-thirds of the military budget went not to the army itself, but to the production and purchase of weapons – that same military-industrial complex. This took about 2 trillion out of the total 3 trillion military spending – and it was precisely the spending on armaments that was basically secret (the open third of the military budget is actually the maintenance of the army itself, which, as we see, acts as a kind of unloved Cinderella on background of the main recipient of military appropriations, favored by Putin's military-industrial complex).
Although we do not know exactly how the items of the increased military budget will be distributed, we can say with confidence that against the backdrop of huge losses of weapons in Ukraine and the depletion of ammunition, the share of military-industrial complex spending in the military budget of 2022-2024 will definitely not decrease, and possibly even increase. Therefore, the army itself, most likely, will not get any special additional money.
No special additional money will go to the army
It turns out that no one is really going to finance or supply all this huge newly recruited 300,000th (or whatever) force. Leaving aside other aspects, we will dwell on only one conclusion – an unpaid and unsupplied army will not be able to fight. In fact, the newly mobilized are literally thrown to certain death – because sufficient money is not allocated for their equipment and supplies. With the current scale of the war, one could expect Putin to increase the military budget to, say, 9-10 trillion rubles a year – but nothing of the kind is even close.
You may ask – perhaps there are some secret items of expenditure that we do not know about? No, they don't. The above figures for total military spending include classified items and are reflected in the Ministry of Finance's aggregated figures. If there was something else, it could be calculated. The conclusions about why Putin throws the newly mobilized into battle without allocating funds for such elementary things as monetary allowances and supplies for the army will be left to you to draw for yourself – it seems that we are dealing here with one of the most striking examples of the complete collapse of the state administration system in Russia , which is generally not able to adequately assess reality. The closer the catastrophic defeat of Putin.
