As oil prices remain high, and natural gas has become a critical fuel for Europe, Russia’s strategy for geopolitical action and leverage has revolved around energy. After the disastrous collapse of communist Russia’s illusion economy, high energy prices are lifting the Russian economy – and with it, available funds for Putin to spend on military modernization.
Russia’s military has declined from 4 million men to 1.1 million, and the vast majority of its equipment consists of holdovers from the Soviet Union. During the 1990s, weapons procurement was almost completely halted; indeed, there were frequent reports of Russian soldiers in uniform, begging in the streets. Times have changed, and Russia’s military is set to change and modernize. The invasion of Georgia shows a Russia that is once again prepared to use military power beyond its borders. Budgets are rising, and will rise further.