The debate raging over Russia's budget may be missing the point. As spending has become skewed in favor of the military, half of the analysts surveyed by Bloomberg say that what the government needs to do to unlock economic growth is to reallocate money to education or health care as well as to a category that includes roads and investment. Only a fifth of the 20 respondents or fewer believe higher outlays are needed for social spending, utilities and defense.
With Russia’s largest rearmament program since 1991 in full swing, shifting into reverse gear is easier said than done. Although Russia is no longer an Upper Volta with nuclear weapons, as the Soviet Union was called at the height of the Cold War, President Vladimir Putin has become embroiled in conflicts from Ukraine to Syria. That means extricating the country from the drag of military commitments will be a challenge after the share of spending in the consolidated budget on education and health care has already declined in the last five years.
