January 23, 2013: The rapid growth of American oil and gas production is threatening Russian efforts to rebuild its decrepit Cold War era armed forces. Over the last few decades the U.S. developed and perfected fracking technology, which enables vast new sources of oil and gas to be used. The U.S. is already importing a lot less oil and will soon be exporting. This is driving down the price of oil and natural gas, which are the two major Russian exports and key sources of income for the Russian government.

Russian leaders long ignored this trend but their economic experts have now managed to get the attention of the senior officials. This was inevitable because the impact of fracking was more and more in the news as other major oil importers (like China) announced that they were also going to use fracking to cut their oil and gas imports.  Russia can also benefit from fracking, to the extent that this provides Russia with more oil and gas supplies. But this is not what the government needs. It’s the high gas and oil prices that keep the government afloat. The anti-corruption efforts and government reforms have not reached the point where Russia is a good place to do business. All that oil and gas income took the pressure off the government to make Russia more “business friendly.” Now the government is finding that the big enemy is within Russia; the armed thugs and thieving officials that make it so difficult to start and operate a business that can provide jobs and tax income for the state.

Currently the government plans to spend over $600 billion by the end of the decade to replace most of the Cold War era warships, aircraft, ballistic missiles, and armored vehicles. Most of this money is dependent on oil and natural gas prices staying where they are. That is not happening.

All sorts of new equipment is to be purchased, stuff that the troops see their Western counterparts using. This will be great for morale, as the Russian armed forces suffered a major self-esteem hit when the Cold War ended in 1991, right about the time American forces romped over the Russian equipped Iraqi army in a hundred hour campaign. While the Cold War ended with a quiet collapse, not a bloody military defeat, it was clear that the Soviet military, as well as the Soviet economy, was inefficient and ineffective. The Russian economy has since become more efficient, but the military has made less progress. The economy had to get better, otherwise people would starve and freeze to death. But aside from some Islamic terrorism in the Caucasus, the Russian military has had no major challenges. The forces were allowed to quietly fall apart. Aging ships and warplanes were not replaced. Over 100,000 armored vehicles became scrap metal or continue to rust away in remote storage sites. Now that the military is finally getting a significant chunk of change, it might all disappear because American innovation has scuppered the financing of the Russian military rebuilding. And people wonder why the Russians hate America.

Russian officials claim a record $15.3 billion in arms exports last year. This includes questionable deals with Syria and other countries that are very poor and are buying only because Russia is providing loans. These deals were common during the Cold War and led to billions in unpaid (and unpayable) bills. This time Russia is being more attentive to getting paid, but that may not be enough. Time will tell. There are also growing problems with India, the largest customer for Russian arms exports. The Indians are growing more displeased with bad Russian service and are buying more Western stuff. Then again, so is Russia. There needs to be some reforms in the Russian arms industries. There have been some reforms but not enough to keep a lot of export customers happy.

Government planners are also taking a hard look at how the continued corruption and economic problems upsets more and more Russians. The government has tried to suppress open dissent by nationalizing most of the mass media and jailing more and more prominent complainers. That has not worked, and the government planners point out that only Stalin-era terror would be able to shut down most open dissent. That degree of repression is unlikely, as Russians now know the details of how that all worked out the last time around. Although many Russians still admire Stalin as a “strong leader”, they are less supportive of Stalin’s mass murder and labor camps. People want Stalin’s “order”, not his body count and police state methods.

January 22, 2013: The government has advised its citizens to get out of Syria. Some have already driven into Lebanon and more passenger aircraft are being sent to Syria to fly key people out before the rebels close the main airports. There are about 30,000 Russians in Syria, including those living there with Syrian spouses. Some amphibious ships are beings sent to Syria’s short coast, an area held by a pro-government population. This is where most Russians in Syria will flee if the rebels continue to close in. Russia still officially supports the Assad government, despite growing reports from Russians in Syria that the rebels are winning. These Russians have also been asking the government for some help in getting out and the government has responded.

The government has ordered better protection for government computers and Internet connections. This comes after local Internet security firm Kaspersky Labs recently announced the discovery of a stealthy espionage program that had been secretly planted in the PCs and smart phones of key military personnel in Eastern Europe and Central Asia and dozens of other nations (U.S., Australia, Ireland, Switzerland, Belgium, Brazil, Spain, South Africa, Japan, and the UAE) as well. Kaspersky called this espionage malware Red October because it appeared to have been created by Russian speaking programmers. It is a very elaborate and versatile malware system. Hundreds of different modules have been discovered and Red October has been customized for a larger number of specific targets. The Red October Internet campaign has been going on for at least five years and has been seeking military and diplomatic secrets. Red October does not appear to be the product of some government intelligence agency and may be one of several shadowy private hacker groups that specialize in seeking out military secrets and then selling them to the highest bidder. The buyers of this stuff prefer to remain quiet about obtaining secrets this way. In response to this publicity, the operators of Red October have apparently shut down the network. The Russian government has ordered the security services to find out if Russians were involved with Red October and, if so, to arrest and prosecute them. Russia has long been a sanctuary for Internet criminals, largely because of poor policing and corruption. It may well turn out that the Red October crew is in Russia and has paid off a lot of Russian cops in order to avoid detection and prosecution.

January 21, 2013: Russia began its largest naval exercises since the end of the Cold War. Held in the eastern Mediterranean, the effort involves over a dozen navy ships, dozens of aircraft, and will continue for a week. All this was planned for months, and the fact that it takes place near the Syrian coast is no accident. But the situation in Syria has deteriorated since the idea for this training effort first arose. Instead of supporting Syria, this collection of ships might be pressed into service to help evacuate Russians from Syria. The rebels are hostile to Russians, mainly because of continued Russian support for the hated Assad dictatorship.

January 16, 2013: In the Caucasus (Kabardino-Balkaria) police cornered and killed two Islamic terrorists and seized a large quantity of weapons and bomb making materials. 

January 10, 2013: The first of two new Borei class SSBN (ballistic missile equipped nuclear subs) was commissioned. A year ago the navy said that these two subs would enter service in July or August but there were more delays because of technical problems. The other Borei is still undergoing sea trials. Last year’s announcement was prompted by the recent completion of tests for the new Bulava ballistic missile for the Boreis. Bulava was delayed several years because of technical problems.

January 8, 2013: With conscripts only in for 12 months and better educated Russians increasingly dodging the draft (via bribes or other scams), the military announced that it is increasing the proportion of contract (volunteer) troops in the strategic missile forces. These troops operate and guard the nuclear weapons and it has long been the practice for the brightest and most reliable conscripts to serve here, if only to provide reliable security for the nuclear weapons and missiles. But now more volunteer (and higher paid) contract troops will be used. Currently 25 percent of missile forces troops are volunteers, and this will increase to 60 percent. Over the last decade public opinion about conscription has shifted. Opinion polls now show that most voters want an-all volunteer army. Six years ago only 30 percent did. The military is shifting to an all-volunteer force as quickly as it can. The main constraint is money because the volunteer, or "contract", soldiers have to be paid a competitive (to civilian jobs) salary and be provided with adequate housing and benefits (otherwise, qualified people will not sign those contracts). The one year conscripts are largely useless, as it takes nearly six months to teach new recruits any useful military skills. The one year term of service also means more recruits will be needed, and those recruits are simply not there. The generals are not too perturbed, for they know this situation will force the government to come up with the money for an all (or nearly all) volunteer force. This has not worked and the result is a steadily shrinking armed forces. For some years now the Russian army has been smaller than the American army, a situation that never occurred before.

January 6, 2013: In the Caucasus (Kabardino-Balkaria) police caught and killed three Islamic terrorists who were preparing to attack churches while holiday services were in progress. The Orthodox Christians in Russia celebrate Christmas two weeks later than most other Christians.

January 2, 2013: In the Caucasus (Karachayevo-Cherkessia) police killed an Islamic terrorist who had attacked a police station but got caught in the act.

January 1, 2013: Several new laws went into effect that made it difficult, or impossible, for foreigners to adopt Russian orphans or assist pro-democracy, pro-reform, or anti-corruption groups in Russia. It’s also easier to prosecute Russian protesters the government does not approve of. This is part of a government program to turn Russia back into a police state.

December 29, 2012: In the Caucasus (Dagestan) police killed seven Islamic terrorists after a siege in which the terrorists used a child as a human shield. The six year old child was not harmed.