Russia has planned a $45 billion increase in its military budget for 2024, despite international sanctions. This raises the question: how is Russia managing to increase its armament production? What measures has the Russian government put in place to develop its defense industry, and what are the impacts on Russia’s economic future?
In 2024, the Russian economy is deeply engaged in the war effort in Ukraine, leading to a major restructuring of its budgetary and economic priorities. The Russian government has significantly increased its defense budget, now representing about 30% of total federal expenditures and 6% of GDP. This massive increase, around 70% more than the previous year, underscores the Kremlin’s commitment to the conflict in Ukraine.
So how is Russia managing such a drastic increase in military equipment production, despite being the target of international sanctions?
Russia first considered introducing a six-day workweek without a salary increase. This proposal, coming from state-backed Russian business groups and relayed by the media, aims to increase workforce productivity and strengthen the Russian economy against the challenges posed by sanctions and the ongoing conflict.
The proposal followed a call from the Avanti business club, which includes Russian business leaders and several members of parliament. The club emphasized the need for additional investments in the country’s “financial and economic system” to face crippling Western sanctions. This request comes in the context of a labor shortage in Russia, exacerbated by the exodus of citizens following the war in Ukraine and the partial mobilization announced in September 2022.