Paul R. Gregory's writings on Russia, the world economy, and other matters that he finds of interest.
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Thursday, May 1, 2014
Putin's Promises To Eastern Ukraine Could Bankrupt Russia
With a Russian budget of 38 percent of GDP, or slightly less than one trillion dollars (Moscow’s Gaidar Institute), the annexation of just the Donbass region of eastern Ukraine would eat up between 6 and 8 percent of the Russian budget each year – as compared with 12 percent for the military. This is $60 to $80 billion less for investment, military expenditures, modernization, and other state activities.
If Putin were to annex the whole of east Ukraine (about 15 million population), the cost would double to $120 to $160 billion – to an untenable share of the budget.