Russia's military is often seen as hopeless, suffering from lethal hazing, undisciplined and corrupt officers, with procurement money mysteriously only buying rather few weapon systems. While the War Nerd probably knows more on this subject than I do, I have yet to hear him opine on the matter, so I thought I'd consider it from a political-economic angle. When one considers the rate at which the Russian economy is growing (I'm estimating $1.8 trillion/?1.4 trillion by 2010) and the small amount Russia is currently spending on its military-- about 2.5% GDP right now-- it's easy to think Russia's always going to have a worthless conventional army when looking at things from a Western POV.
Still, it's important to look at Russia's current military assets and successes to remember what Russia's capabilities are: tolerance for high casualties and a willingness to commit ethnic cleansing. The Russians have won Chechnya on a shoestring-- substituting casualties and genocide for money. There aren't many industrialized nation states prepared to win under such circumstances, and in that regard, Russia has a huge advantage over other Europeans, and Americans. Advantages which may be good enough for the moment, but still inadequate for your hardcore Siloviki-nationalist ambitions.
With globalsecurity.org estimating Russia's 2005 military spending at $18 billion, and this year's spending estimated to be at something like $25 billion, one might presume a continued degradation of capabilities, until one factors in purchasing power parity. Since Russia's military industry's products are more competitive than the rest of the economy's, it's safe to multiply the dollar spending into purchasing power parity, which gives us something closer currently to $60-$75 billion depending on how much you want to weight the competitiveness of Russian defense related industries vs. other sectors of the Russian economy. P>With such a powerful spending rate at PPP, one asks where that money's going? I don't know Russian so I can only infer and conjecture. Still, I am a chess player and know another chess player when I see one, so I figure their set of moves is positioning the board in their favor. Leaving aside of course the notorious graft and budget theft, I'd suspect that all that extra money is going into R&D as well as refurbishing 4th gen systems.
It seems likely, with the Russian economy re-inflating, that military spending will climb. I think a conservative estimate is 5%, though I wouldn't be surprised to see 10% spending by 2010. Assuming 5%, that means that with a GDP around $1.8 trillion in 2010, that's $90 billion, or about what the UK's spending will be. Factoring in PPP at 2x $ value (again, conservative), gives us $180 billion. Enough to field a modern 250k man army or so at US/UK per soldier spending levels, while maintaining other capabilities. Not exactly the fully professional army envisioned. If Russia were to spend a third per soldier, it could converge with current French levels of spending per soldier at around $175k per active soldier with enough left over to maintain and grow current military capabilities. That's still a pretty deadly military when combined with a doctrine that's indifferent to domestic and enemy casualties.
Still, even with half that spending wasted; Russia's military will recover its capabilities. If Putin's cabinet does to the Generals what he did to regional Governors, then a shake-up in the officer corps seems likely soon. If Eastern Ukraine revolts and joins Russia in 2010, who's going to dare go to war with Russia then? In this case, a spiffed up Russian military won't be used for conquest, but for counter-insurgency. Future Russian wars will be fought in regions in and around Russia. If they do it right, they can tie down fewer troops than the Chinese do in quelling insurgencies, and leave enough ready troops to scare the neighbors.
Selling arms south of the border is part of the equation too- by selling to India and China, Russia fuels the regional arms races in South and E. Asia that keep the security threat focus off Russia on most of that continent. China's planning for a war in Taiwan, Korea, and Kashmir-- they can't afford a war in Siberia. Likewise, selling arms to India, Iran, and Syria keeps S. Asian and SW Asian conflicts at a boil, which benefits the Russian arms export industry, bringing sorely needed foreign currency into the Russian military industry.
The net result is that Russia is free to project its power into the former Soviet space, with only NATO as a counterbalance. Russian arms help fuel the war in Iraq, so one could say this security strategy has worked, by tying down NATO's two biggest players--the USA and UK--in expensive wars at the end of long supply lines. When Russia decides to re-exert its control over recoverable portions of the former USSR, NATO will be too exhausted to counter Russia. Rather than leading to world war, it's more likely such an expansion will spell the end for NATO. If that's been the plan, it's an ambitious and possibly brilliant one. It also means Russia's gambling the West doesn't want to risk nuclear war over Eastern Europe and the Caspian Sea.