A Trap for Russia or a Trap for Both?

The historical causes of the Cold War between the Soviet Union and the U.S.-led NATO Alliance lie in a 1949 disagreement over Germany’s future. The Soviets supported a unified Germany and the Western powers did not. Then at the beginning of the 1960s, with the crisis surrounding Soviet missiles in Cuba and American missiles in Turkey, the nature of the race between the two powers changed, and the Kennedy administration ramped up the arms race in order to bankrupt the Soviet Union.

The creator of this strategy was then-Secretary of Defense Robert McNamara, who served in that position until 1968. He continued his work on this strategy in his subsequent position as director of the World Bank, remaining in that position until 1981. Remember that he was also the true architect of the Vietnam War under the guise of “fighting communist expansion.”

Successive presidential administrations continued this strategy, which reached its peak during the Reagan administration with the launching of what he called the “Strategic Defense Initiative” and everyone else called “Star Wars.” This project has since been proven to be nothing more than a ruse for which the Soviet Union paid a high price in the economic hemorrhaging, which was one of the reasons for its subsequent dissolution.

The United States was merely playing a game by spending billions of dollars to develop defense systems based on rockets, death rays and satellites scanning for intercontinental ballistic missiles. They never had sufficient know-how to implement this project in reality.

Yet the Reagan administration was successful in passing off this scheme, dealing a fatal economic blow to the Soviet Union. The Obama administration is currently trying to replicate this strategy against Russia. Many experts do not think that Russia has been inoculated to this trap, while others see this trick as a double-edged sword despite the massive gulf between the two powers’ respective abilities to bear the consequences of a new arms race.

A consequence of the crisis in Ukraine has been a re-ignition of the arms race between the United States and Russia. The conflict over the future of Ukraine is similar in a number of ways to the conflict over the future of Germany in 1949, mirroring the pre-conditions of McNamara’s method of economic depletion.

Over the last ten years, Washington has spent an average of 4 percent of the United States’ GDP on weapons purchases, making up 44 percent of global spending in this regard. Compare this to the Russian Federation’s military expenditures, which make up around 4.5 percent of that country’s GDP. This figure is expected to rise to 5 percent by 2016.

Washington spent $619 billion on its military in 2013. In terms of percentage of GDP, this means a drop from 4.8 percent in 2009 to 3.8 percent in 2013, a result of the country’s fiscal austerity policies. Russia’s military spending rose to $70 billion in 2013, and it is possible that number will reach $100 billion by 2016.

Rising military spending as percentage of GDP is a huge burden on the Russian economy; this is not true for the United States. Adding to that, there is a huge gap in infrastructure development and technological ability, along with Washington’s ability to leverage wars and conflicts in their favor. This has happened in the past through the funding Washington gives to its partners’ military operations and by providing them with powerful weapons, which gives a shot in the arm to the military manufacturing industry.

Russia faces many challenges in developing its rentier economy — one which is dependent on oil, gas and raw materials exports — into an advanced and diversified one. This at a time when America’s economy is showing signs of recovery, and has demonstrated an ability to manage high levels of public debt.

An Unbalanced Equation

In light of these facts, some Russian economic experts warn of the consequences of getting drawn into another arms race and overburdening the Russian economy while the United States has an interest in igniting major new wars to compensate for its economic losses resultant from the global financial crisis of 2008 and revitalizing its economy. If decision makers in Moscow don’t heed this, Russia could once again find itself in McNamara’s trap like the Soviet Union before it.