OUR Russia plans to spend almost a third of next year’s budget on defense and national security, cutting funding for schools and hospitals, as well as roads. This essentially diverts the use of the liquid to financially support the war effort in Ukraine. A Reuters analysis of the budget shows that Moscow will spend a total of 9.4 trillion. rubles ($155 billion) for defense and security, undermining other priorities in a critical year leading up to the eventual re-election of President Vladimir Putin in 2024. Only security spending, including the work of the State Investigative Committee, the prosecutor’s office, the correctional service and the National Guard stationed in Ukraine, will increase by 50% compared to 2022. Combined spending on the military and national security is at a record high for the Kremlin, but only about 18% of what the US plans to spend next fiscal year on defense and certain national security needs. “The budget is a tool for financing a military campaign,” says independent analyst Alexandra Suslina. “The increase in pensions and student enrollment is small compared to what should be done in Russia. Decades of problems remain unresolved.”

Funding for schools, hospitals and the road network is being cut.

The change in the form of the budget is indicative of Russia’s attempt to step up its military operations in Ukraine, where it has lost ground since September despite announcing the annexation of four regions it partially controls. Putin ordered the central government and the country’s more than 80 regions to work together more effectively to meet the needs of the armed forces. According to the documents, defense spending will increase by just 1 percent next year to $4.98 trillion. rubles, but only because this year they were revised by a third of the originally planned 3.5 trillion. rubles after Moscow moved its troops into Ukraine in February. In contrast, domestic security spending is expected to increase by 50.1% to $4.42 trillion. rubles. Western sanctions are backfiring, Putin said, as the countries concerned struggle to curb the highest rate of inflation in decades as energy and food prices rise. However, the Russian economy also suffered. In particular, the third quarter saw a 3% year-on-year contraction, showing the impact of the sanctions and the Kremlin’s decision to call up 300,000 reservists. Hundreds of thousands more fled the country to avoid the draft.

In the 2023 budget, spending on the “national economy” including roads, agriculture and research and development will be cut by 23% to $3.5 trillion. rubles. Health care will receive 9% less funding or 1.5 trillion. rubles, while spending on education will decrease by 2% to 1.4 trillion. rubles. Finally, spending on infrastructure and industry will also fall by 23.5% and 18.5%, respectively, according to a joint study by the Russian Academy under the President of the Russian Federation (RANEPA) and the Gaidar Institute. This “could cause significant difficulties” as Moscow struggles to find new markets away from the West, the institutes said.