DEFENSE SPENDING….

Putin is having trouble delivering on his frequent promises to rebuild the military. Educated guesses about the draft budget for 2001 puts defense spending at around 205 billion rubles (about $7.6 billion), or 2.65 percent of gross domestic product. After inflation, that is a fairly modest increase from this year’s level of 140 billion rubles, or 2.40 percent of GDP. The long-promised hike to 3.0 percent of GDP still seems out of reach–the economy is still too weak and tax collections are still too small. One response to the budget may be a reduction in military personnel from 1.2 million to 1.0 million or even 800,000 over three years. For comparison, defense spending in the United States in fiscal year 2001 will be around $288 billion, less than three percent of U.S. GDP but roughly equal to 100 percent of Russia’s.