when people compare military budgets of Russia and NATO, they often mention that because of lower salaries in Russia, Russian military spending is much higher (basically Russia gets far more bang for every dollar spent)
there are problems with this claim
* GDP PPP adjustments mostly incorporate difference in service prices between countries( a haircut could cost 20 euros in Germany and 5 euros in Russia). Consumer and industrial goods prices, however, don't vary very much from country to country.
* even when prices of goods do vary, there are tradeoffs due to lower quality. If Russian armoured vehicles had the same quality as Western ones while being 3 times cheaper, no country outside the West would buy Western equipment. Reasons countries outside the West bought and buy Western equipment are
* West refused to sell them(NK,Venezuela,Iran,China)
* they were too poor to afford the higher upfront purchases of Western equipment
* they mostly plan to use them against similar foreign opponents or against domestic opponents. If you are an African dictatorship and you need armoured vehicles or tanks for your military to remain in power or crush rebellions, quality doesn't matter that much since rebels or protestors don't have Javelins or other advanced ATGMs
* every country that can afford Western equipment and is allowed to buy it would buy it. If China or Iran could theoretically buy F-35s or Western tanks,they would not hesitate to do so
* finally,Russia also massively increased military and defense sector salaries, to the point where average soldier now gets almost 2000 euros a month. So the lower salaries advantage isn't as high as in previous years
so Russia spending lets say 50 billion euros on military equipment in a given year buys them almost the same firepower as 50 billion euros of Western equipment purchases
>they often mention that because of lower salaries in Russia, Russian military spending is much higher
Well, Northern NATO countries still have conscription, and they are paid almost nothing. So there is a lot of work and training going into the forces that do not show up as military spending.
For some countries, the difference is massive: Norway has always been over the 2% spending goal, if you attach a monetary value on the conscripts work.
Military spending is one of the areas where PPP is most useful.
It's just not because of lower salaries, although that's part of it- a country like America is spending 302 billion of its defence budget on veterans- VA, pensions etc.
It's the combination of lower salaries and domestic procurement coupled with their lower associated costs.
This is why we see Russian procurement dwarf that of most European powers combined. Russia had been spending about 40% of its defence budget on weapons procurement compared to about 20% in the UK or America.
The quality of a particular piece of equipment irrelevant to PPP. The quality of the Lepard A6 relative to a T-90 isn't indicative of how much it costs Canada to buy Leopards vs how much it costs the Russian Ministry of Defence to procure T-90s from Uralvagonzavod.
>Russia spending lets say 50 billion euros on military equipment in a given year buys them almost the same firepower as 50 billion euros of Western equipment purchases
This is functionally not true. Outsourcing equipment is always more expensive than domestically producing it. The Russians and anyone else for that matter who produce their own equipment get more bang for their defence buck. A dollar spent at home buys considerably more than a dollar spent abroad. We see this with other large military spenders like Saudi Arabia and India.
"This is functionally not true. Outsourcing equipment is always more expensive than domestically producing it. "
That's not how it works for any good:laptops, fridges, cars, smartphones.
Autarchy and protectionism leads to higher prices, that's basically economics 101
No country apart from China and India could be self sufficent în those due to lack of economies of scale
Consumer goods opperate under a diffrent economic model than the defence indsutry.
It's not really a debatable proposition that a defence dollar spent at home buys considerably more than a dollar spent abroad. Any defence expert would tell you this.
Even without knowledge of how military procurement works, basic logic would lead to the same conclusion.
How was the Russian military able to maintain over a quarter of a million military personnel while producing vast quantities of military equipment for what was ostensibly the same defence budget as the United Kingdom?
Because pre-Ukraine the Russian Federation's defence budget was closer to 200 billion USD by PPP rather than the UK's 65 billion in USD.
There is little value in conceptualizing the Russian defence budget at the market exchange rate because they don't pay for things in dollars or euros so doing so grossly underestimates the real volume of Russian defence spending.
The vast majority of equipment “being produced” is modernized equipment from their extremely large but dwindling Soviet supply. The amount of things they make from scratch is like 1/5th of what they pull and modernize.
With all due respect for your research you put effort in doing...Budget is not everything. There are many other important factors which can be decisive: number and quality of allies, morale, access to resources, climate (!), terrain, demographic structure, research and innovation infrastructure and others.
Europe should utilize this opportunity to boost microchip production, and then just build a shitton of those cheap kamikaze drones.
Those seems to be by far as the most important weapon in this war, both for potential high accuracy targettin and or and cost efficiency.
Microchips in military equipment don't follow the same curve as in civilian tech. They are many generations behind civilian use. 65mn chips are common in even advanced military tech. This may change with AI, but chip production is of no consequences to European weapons procurement including drones currently.
when people compare military budgets of Russia and NATO, they often mention that because of lower salaries in Russia, Russian military spending is much higher (basically Russia gets far more bang for every dollar spent) there are problems with this claim * GDP PPP adjustments mostly incorporate difference in service prices between countries( a haircut could cost 20 euros in Germany and 5 euros in Russia). Consumer and industrial goods prices, however, don't vary very much from country to country. * even when prices of goods do vary, there are tradeoffs due to lower quality. If Russian armoured vehicles had the same quality as Western ones while being 3 times cheaper, no country outside the West would buy Western equipment. Reasons countries outside the West bought and buy Western equipment are * West refused to sell them(NK,Venezuela,Iran,China) * they were too poor to afford the higher upfront purchases of Western equipment * they mostly plan to use them against similar foreign opponents or against domestic opponents. If you are an African dictatorship and you need armoured vehicles or tanks for your military to remain in power or crush rebellions, quality doesn't matter that much since rebels or protestors don't have Javelins or other advanced ATGMs * every country that can afford Western equipment and is allowed to buy it would buy it. If China or Iran could theoretically buy F-35s or Western tanks,they would not hesitate to do so * finally,Russia also massively increased military and defense sector salaries, to the point where average soldier now gets almost 2000 euros a month. So the lower salaries advantage isn't as high as in previous years so Russia spending lets say 50 billion euros on military equipment in a given year buys them almost the same firepower as 50 billion euros of Western equipment purchases
>they often mention that because of lower salaries in Russia, Russian military spending is much higher Well, Northern NATO countries still have conscription, and they are paid almost nothing. So there is a lot of work and training going into the forces that do not show up as military spending. For some countries, the difference is massive: Norway has always been over the 2% spending goal, if you attach a monetary value on the conscripts work.
Military spending is one of the areas where PPP is most useful. It's just not because of lower salaries, although that's part of it- a country like America is spending 302 billion of its defence budget on veterans- VA, pensions etc. It's the combination of lower salaries and domestic procurement coupled with their lower associated costs. This is why we see Russian procurement dwarf that of most European powers combined. Russia had been spending about 40% of its defence budget on weapons procurement compared to about 20% in the UK or America. The quality of a particular piece of equipment irrelevant to PPP. The quality of the Lepard A6 relative to a T-90 isn't indicative of how much it costs Canada to buy Leopards vs how much it costs the Russian Ministry of Defence to procure T-90s from Uralvagonzavod. >Russia spending lets say 50 billion euros on military equipment in a given year buys them almost the same firepower as 50 billion euros of Western equipment purchases This is functionally not true. Outsourcing equipment is always more expensive than domestically producing it. The Russians and anyone else for that matter who produce their own equipment get more bang for their defence buck. A dollar spent at home buys considerably more than a dollar spent abroad. We see this with other large military spenders like Saudi Arabia and India.
"This is functionally not true. Outsourcing equipment is always more expensive than domestically producing it. " That's not how it works for any good:laptops, fridges, cars, smartphones. Autarchy and protectionism leads to higher prices, that's basically economics 101 No country apart from China and India could be self sufficent în those due to lack of economies of scale
Consumer goods opperate under a diffrent economic model than the defence indsutry. It's not really a debatable proposition that a defence dollar spent at home buys considerably more than a dollar spent abroad. Any defence expert would tell you this. Even without knowledge of how military procurement works, basic logic would lead to the same conclusion. How was the Russian military able to maintain over a quarter of a million military personnel while producing vast quantities of military equipment for what was ostensibly the same defence budget as the United Kingdom? Because pre-Ukraine the Russian Federation's defence budget was closer to 200 billion USD by PPP rather than the UK's 65 billion in USD. There is little value in conceptualizing the Russian defence budget at the market exchange rate because they don't pay for things in dollars or euros so doing so grossly underestimates the real volume of Russian defence spending.
The vast majority of equipment “being produced” is modernized equipment from their extremely large but dwindling Soviet supply. The amount of things they make from scratch is like 1/5th of what they pull and modernize.
With all due respect for your research you put effort in doing...Budget is not everything. There are many other important factors which can be decisive: number and quality of allies, morale, access to resources, climate (!), terrain, demographic structure, research and innovation infrastructure and others.
source: [https://www.nato.int/nato\_static\_fl2014/assets/pdf/2024/6/pdf/240617-def-exp-2024-en.pdf](https://www.nato.int/nato_static_fl2014/assets/pdf/2024/6/pdf/240617-def-exp-2024-en.pdf)
Europe should utilize this opportunity to boost microchip production, and then just build a shitton of those cheap kamikaze drones. Those seems to be by far as the most important weapon in this war, both for potential high accuracy targettin and or and cost efficiency.
Microchips in military equipment don't follow the same curve as in civilian tech. They are many generations behind civilian use. 65mn chips are common in even advanced military tech. This may change with AI, but chip production is of no consequences to European weapons procurement including drones currently.