The 2020 Military Strength Rankings list Russia's military as #2 in strength:
United States
Russia
China
However, their defense budget rankings show that Russia's only #8 in spending:
United States (~750 billion USD)
China (~237 billion USD)
[... Saudi Arabia, India, United Kingdom, Germany, Japan ...]
How is Russia able to maintain such a powerful military despite relatively low defence spending compared to other similarly ranked countries?
Second, this question is like asking Compared to a Ferrari a Mustang outruns tons of Priuses, Civics and SUVs. And it costs a lot less.
Does that mean a Mustang is anywhere close to a Ferrari in speed?
The US is, by virtue of its spending, #1, no question. It deliberately has put itself in a similar position as the Royal Navy's old bigger-than-the-next-two-navies-combined doctrine.
It could spend a lot less, it would still be #1. Maybe with a lot smaller margin, but it could trim its spending. A better question might be: why does the US electorate put up with this level of spending, with the USSR gone?
This doctrine remained in place until 1989–90, when President George H.W. Bush ordered the "Base Force" study which forecast a substantial cut in the military budget, an end to the Soviet Union's global threat, and the possible beginning of new regional threats. In 1993, President Bill Clinton ordered a "Bottom-Up Review," based on which a strategy called "win-hold-win" was declared—enough forces to win one war while holding off the enemy in another conflict, then moving on to win it after the first war is over. The final draft was changed to read that the United States must be able to win two "major regional conflicts" simultaneously.
If you count in nukes, yes, that's Russia.
Without them? Not so sure. Their actual operations aren't always amazing. For example, their aircraft carrier had to be towed around in the recent Syria engagement and and caught fire later. Yes, they decisively beat Georgia in 08, but... Georgia? And even then, not everything was rosy - there was significant criticism, external and internal of their performance, which may have been corrected. In Chechnya, they massively goofed up in the first Grozny battle because of untrained troops and horrible tactics.
They, to answer your question, get a lot of theoretical bang for the bucks by using cheap conscripts. Would they be up to snuff in real combat - (check that Grozny link)? After while, sure. At the start?
In terms of budget, a lot of their equipment is, like the US's B52s, Cold War era, so needs no procurement. And they may have better control over costs than the Americans with their F35s, though they also wasted untold amounts of money through corruption in the 2014 games.
Some of their new gear really does look pretty good however, but they may not always be able to buy enough for that to matter.
Fighting in Europe, they would trounce the European forces (minus the US). For a while. But then they just lack the industrial infrastructure to keep it up if they don't win right away. They might still win, but more to European military weakness than due to their own merits.
And now you have China. Do you want to bet they could beat China in conventional war? I wouldn't, but that's exactly what your article claims. Not that they aren't nice to China, giving it one aircraft carrier, and not picking up on the fact that it's largely a training carrier, to get Chinese naval airpower doctrine figured out - the real PLA carriers are yet to come.
Does that mean China can beat them? Not sure, now. As time goes on, yes, China will be gaining.
Wars are, to a degree often underestimated by people, determined by the training, morale and quality of the weapons, not just sheer numbers, which seems to be all the linked article cares about. Look the UK's #8 position, well behind Japan (which, I was intrigued to hear, has 4 aircraft carriers). Yup, makes a lot sense.
Look at Israel, not just now, but 40-50 years ago. The numbers looked one way, the actual wars went entirely another way. In 2003, the Iraqi army was 4th in the world. I bet that NK is very impressive, in sheer numbers.
With its numerous consumer ads, pompous domain name, Lego-styled design and PwrIndx (™) , these guys look they publish cat videos for armchair generals. Saudi Arabia #17, Israel #18. The Houthis must be quaking in their boots.
US: 0.0606, Russia: 0.0681, China: 0.0691. What, next, Death Star: 0.001?
What, and this relates directly to the title of the question, does the difference between 0.0606 and 0.0681 even try to convey, besides implying a near-match?
I have no experience in the Russian or US military, but my impression is that Russian weapons manufacturers face much greater pressures to charge lower prices.
US weapons manufactures consider the Pentagon a bottomless pit of money and face no pressure to reduce prices. 200 TOW missiles? Let's add a 3 extra zeros to the bill. Raytheon can charge whatever because there is no "mark to market" for a TOW.
The GDP of the Russian Federation is 1/3 the size of California alone. Russian generals count every penny spent on defense. On a weapons per weapons basis, Russia has much more parity than $ per $. Roughly speaking, 1 Kalibr = 1 Tomahawk. But, just because the US Navy is charged 4 times more for 1 Tomahawk than the Russian Navy is for 1 Kalibr does not make the US Navy 4 times stronger.
China has the weakest military. None of their weapons or soldiers have been proven in real combat. Mike Tyson famously said: "Everyone has a plan, until they get punched in the face." Soldiers have told me, no matter how much training you might do, nothing can prepare one for live incoming and facing death... US and Russia have proven their current weapons and soldiers in real battles (in the Middle East).
The future of India's national defense will be revealing. Will Modi switch from "as good" Russian weapons that cost ~1/10 in total ownership to that of US weapons... Unlike the Pentagon, Modi will have to monitor his defense budget. And, he might be using defense contractors that have never had concerns about controlling prices. So, let's see what Modi does.
Another issue is PPP (purchase power parity). You're comparing the budgets in Forex equivalents, which is generally thought to seriously underestimate the Russian defence budget. Keep in mind that when it comes to selling arms, Russian companies need state approval. So the prices that they can sell internationally vs domestically can be substantially different.
Based on the annual average dollar-to-ruble exchange rates, Russia is typically depicted as spending in the region of $60 billion per year on its military. This is roughly in line with the defense spending of medium-sized powers like the United Kingdom and France. However, anybody familiar with Russia’s military modernization program over the past decade will see the illogic: how can a military budget the size of the United Kingdom’s be used to maintain over a million personnel while simultaneously procuring vast quantities of capable military equipment?
[...]
The reason for this apparent contradiction is that the use of market exchange rates grossly understates the real volume of Russian military expenditure (and that of other countries with smaller per-capita incomes, like China). Instead, any analysis of comparative military expenditure should be based on the use of purchasing power parity (PPP) exchange rates rather than market exchange rates. This alternative method takes differences in costs between countries into account. As we demonstrate, despite some shortcomings, PPP is a much more methodologically robust and defensible method of comparing defense spending across countries than the method of comparing spending using the market exchange rates that are commonly used by think tanks and academics. Using PPP, one finds that Russia’s effective military expenditure actually ranged between $150 billion and $180 billion annually over the last five years. That figure is conservative; taking into account hidden or obfuscated military expenditure, Russia may well come in at around $200 billion.
The BI article doesn't have a terribly clear methodology how they ranked the countries, but if you look at some such military power indexes with clearer methodology, they generally employ a weighted sum of various indicators: tanks, aircract, personnel etc.
The issue with these indices is that they usually don't account for the "quality factor" in either equipment or personnel training. So, on such measures Russia (or China) tend to get overestimated. Russia for example has a lot of older tanks, that would not compete 1:1 with US ones, but there's usually no discount applied for this in military power indices. (Likewise for aircraft quality, etc.)
So when you combine the effects of Russia's budget being underestimated (at Forex rates) with the quality of their equipment being overestimated in typical indexes of (accumulated) military power, you get this large "huh" discrepancy.
Let's put it this way. Suppose military might is measured by the number of guns you have, and each gun costs exactly $100. If the USA has 100 guns, Russia has 99, and the rest of the world have 0, then Russia has the second most powerful military in the world, and it needs to spend 99% of the US military budget.
If the USA has 1,000,000 guns, Russia has 99, and the rest of the world have 0, then Russia still has the second most powerful military in the world, but now it only needs 0.0099% of the US military budget.
The second situation is pretty close to what the world is right now. The US military is capable of fighting the rest of the world combined. Small wonder it costs so much money.
Edit: to clarify the assertion that the US military is capable of fighting the rest of the world combined - see the source, the claim isn't that the US can conquer the world; it is only that the rest of the world cannot forcibly occupy the US.
The Russian military is powered not only by the official military spendings. There are a lot of indirect ways that the army gets goods, services and labour and these are deeply entrenched in the russian economy, administration and the general way of living.
First, ordinary conscripted soldiers are paid symbolicaly (in the 90's it was even considered normal for a soldier to be supported by his parents). Professional military personnel is paid more or less the market rate, but options like early retirement (paid by the general social security system and not by military budget) distort the picture.
Second, most of the government-run (and a lot of private) businesses have military "departments" that do pretty much military-related projects/services. Their military-related activities are usually not directly financed by country's military budget. And remember, in post-Soviet Russia a lot of economy is still government-run.
All things put together, the part of the GDP going to military is way above the official numbers and for the late '80s can be estimated as 25-40%. Present-day percent is harder to estimate (a lot of private business and a lot of gray economy), but I doubt it is less than 10%.
And with these adjusted numbers you get a rather reasonable picture of the russian army.
Sorry, no official sources. The picture is deduced from the personal knowledge of the russian culture, lifestyle, tradition and economy.
edit: p.s. The "#2" or even "#1 depending on who strikes first" claim is made mainly by Russians themselves. It may be legitimately attributed to some decade in the past century BEFORE 80's and 90's. In 2020 - nyet, except for some really impressive cyberwarfare and fakenews feats. No wonder about the fakenews - they have enormously developed culture of both making and filtering "news" long before the Internet era. The Internet only made possible their already strong propaganda machine to deploy worldwide.
Couple more points to consider, first one for US vs Russia (US vs everyone really) and second for China vs Russia...
Some nations are relying on the US to do the research and development for them. Many nations let the US pave the road for a technology, so the US spends a gazillion dollars for R&D on something to get it first. Then allies buy it at a fraction the cost, and enemies steal it - also at a fraction the cost.
It is no secret that sources in Russia and China, among others, are frequently hacking US systems and paying traitors to hand over US technology secrets. Of course, the US probably does the same, but since I'm from the western world I don't hear about that complaint. But since the US is spending the big bucks, spying on Russia and China is probably more just so we know where their tech is at than it is to acquire new tech.
Comparing just Russia and China, I think most people would agree the Chinese suffer more governmental oppression and corruption. People outside Russia hear that supposedly Russia hassles government-critical media and has some oppressive tendencies, but that does not seem to be anything like what we see in China where the government censors everything, reporters disappear and drop like flies when they dare speak their mind, their people are limited in the information they have, people can be forced to move to cities and oppressed into their industrial complex, etc., etc., etc....
To really thrive, people need to be happy, free, and remain in high morale. The old saying "a happy worker is a superior worker" really is true. China is able to get tons of economic might by forcing so many people into cities to manufacture stuff, but economic might alone does not measure military strength in our age of high-tech warfare. You need your populace to be truly invested emotionally, mentally, spiritually, in a way that scales with freedom or oppression.
Neither the US nor Russia are paradises of complete freedom and liberty as both have their fair share of oppressive laws, but both seem better off than China.
Also free tinkerers discover more things. Even in the US tinkerers are not as free as they once were to make whatever they please. This reduction might play into US increased costs as well.
This whole "freedom" point is highly subjective, yet it is difficult to deny its enlightening benefits.
The USA has military posts all over the world, at huge expense. Russia has almost none in comparison. Russia has been able to spend money on technology and internal infrastructure and therefore has a world-class military at a fraction of the cost.
First of all, GDP is not very good measurement of wealth. It is based on currency ratios, and ruble is usually vastly underestimated in those. Better measurement would be PPP (purchasing power parity), and Russia stands much better there.
Second, military industrial complex in US is privately owned, and basically tends to bribe politicians and generals (mostly legally, trough donations, consultation jobs etc...) in order to maximize profit. Just look at F-35 saga and cost overruns and you will get the picture. On the other hand, Russian military manufacturers like Sukhoi are under government control (majority of shares) and aircraft companies are joined into UAC, but they do have certain competition among themselves. Overall, government would not allow large budget overruns.
Third, Russia tends to develop asymmetric cheaper response to US threats. For example, US has large fleet of aircraft carriers for global power projection. Russia responds with supersonic missiles with long range that could sink those carriers at the fraction of cost. Recent example is Kh-47M2 Kinzhal - even if half of Russian claims for this missile are true, it would be formidable weapon and grave threat, especially for USN carriers.
Fourth, sadly, quality of STEM studies on US universities has declined. Asians are now largest ethnic group in STEM studies in US, many of them Chinese nationals, and this goes especially for studies in fields of physics and chemistry that would be potentially useful for US military complex. Brightest minds turn toward more lucrative carriers (IT, banking etc ...) or easier goings (management, law ...) . In Russia, there is still some prestige (not necessarily monetary) in finishing difficult STEM studies and then working "for motherland" in some institute. Lot of this would of course depend on social structure of Russian society, but it seems that for now, Russia is not yet so brutally plutocratic and mercantile as US.
As Russian who served 20 years at armed forces and had a job at military industrial complex for many years I may try to answer: Some answers already provided are true - indeed, Russian military budget is somehow hidden, and PPP should be taken into account and militaries are underpaid. But that cannot explain almost 5 times difference in spending with China and almost 20 times difference with US. Thus - that explains only part of the difference. Maybe difference is NOT 5 and 20 times. Maybe it is 3 and 10 times less. No one knows. I am afraid Putin does not know exact numbers too. BUT: IMHO of course, main answer is historical and cultural. It can be explained on examples. You know, Leningrad was under siege for almost 3 years. Many countries of Europe tried to take it for that many years. Not only Germany. It was united siege of Germany, Italy, Spain, Romania, Finland and others. Equipment was supplied by almost all of modern EU because everything was occupied or served to 3d Reich at continental Europe. At that times I believe GDP and military expenditures of Germany and continental Europe was higher than USSR one. People virtually eaten each other at Leningrad. There was not chances to survive if to count “numbers”. But - the fact is - Leningrad produced A LOT of military equipment and exported it out of besieged city. People got 250 g of bread from "mainland" per day and exported much more arms to "mainland". And finally won. Can you measure that with money?
Another example from modern days. Military industrial complex is in fact, underpaid. But it works and produces arms according plans. Actually, not many factories ever got good income. But in many cases, they deserve it. Because in some cases they produce best arms in the world. But they produce what they asked for and even more. I guess their counterparts at US would ask for many trillions in income. Russian military industrial complex asks for budget money to pay salaries but not to make income. Can you measure that with money?
Finally, I guess more than half of the country either served at army or produced something for the army. In some cases, free of charge at all. I know only one country on earth alike. It is Israel I guess. So, can you measure that in dollars or euros?
So, as a result, military might, and money are ... quite irrelevant at Russia. They depends on each other but not directly. No surprise here. Money and Love ...Money and happiness...are irrelevant alike. Thus, you would ask a question: "Why my salary is 100 times of John one, but Mary loves Him not Me"? That would make sense alike.
Russia funnels its entire available GDP into its military.
By contrast, in the US, even modest defense appropriations have to contend with widespread disapproval from internal partisan movements and an already overdrawn budget on account of massive welfare spending programs, etc.
My father worked as a defense intelligence specialist for the US Department of Defense for many years. He was tasked at one point to find out whether "consumer" Soviet satellites had a military application. He found that there is no such thing as a Russian satellite that does not have military applications. In his own words, "The Soviet Union does not have a war machine, it IS a war machine". Nothing has changed in that regard in spite of the supposed "collapse" of the Soviet Union. I am an eyewitness to this also. When I was about 14 years old, I toured an assembly plant for the then in-service Space Shuttle program.* I got to see one of the rocket engine assemblies in the hangar. "Where is that made?" I asked. The tour guide announced that the engines are bought from Russia for $9 Million a pop. Yes, this is OUR space program just a handful of years after the Soviet Union had supposedly collapsed! (Wait, who won the space race?) Countries in shambles do not readily produce high technology, nor do they rebound and eclipse the world leader in space technologies within a decade!
And so the sham of Soviet "collapse" continues to be paraded in academia and on news media in spite of all evidence to the contrary, including irrefutable evidence of massive and highly deployed military investments by Russia and its allies, and of espionage, sabotage, and military secrets and materiel being gifted by high-ranking US officials to Communist countries. They could not be where they are today militarily if they were not propped up by traitors within the US and other capitalist nations.
Russia proudly parades its latest military hardware through Red Square every year on May 9th. You can watch last year's parade here: https://www.youtube.com/watch?v=tHeNXcPaEL0. By contrast, the US president drew a lot of flak from left-leaning institutions for holding a simple military parade in connection with the nation's Independence Day celebrations.
*Likely either the tour guide misstated or I misremembered this detail as it appears the US may not have purchased space shuttle engines from the Russians, nonetheless the US space program was purchasing and using rocket engines from Russia at the time (See linked sources).
