Hacker News Reader

Comment by nwiswell | Hacker News Reader

This figure is transparently nonsensical.

Russia's 2019 military spend was 65 billion USD, or 58.6 billion EUR. Clearly they are not blowing through an entire year's defense budget in three days (that would be over 100x the usual rate of spend!).

Or another sanity-check figure: Russia's entire 2020 GDP would pay for only 67 days of war at this run-rate. In other words, the country is using over 500% of its productive output on the war (a neat trick without any imports!)

For reference, in 1940 the United States spent 1.64% of its GDP on defense. In 1945 it spent 37.19%.

I'm as hopeful as anyone for Ukraine to survive this awful war with her sovereignty intact, but we must be realistic.

View on HN

Another estimate was a lot less based on the cost of previous operations.

"Firstly, Russian ordnance is generally less sophisticated and cheaper than US kit. Secondly, Russian military vehicles do not use petroleum, but diesel – a fuel that is cheaper and offers a better range.

He also estimated the cost of equipment losses in the first four days of fighting. Ten aircraft, at an average price tag of $30 million per airframe, would cost $300 million. One hundred armored fighting vehicles – troop carriers, infantry fighting vehicles, mobile artillery and tanks – which cost an average of $5 million each, would hit the Russian taxpayer with a $500 million bill.

The source then estimated the daily cost of keeping a Russian soldier – a cheaper fighting man than his US counterpart – in the field to be approximately $1,000. He multiplied that by the upper estimate of Russia’s force level in Ukraine – 200,000 troops.

For one day, that would be $200 million. Over four days, troop maintenance costs would total $800 million.

So the total cost for four days of combat operations in Ukraine would be in the region of $1.6 billion – the source added it could rise to $2 billion. But even that upper range would put daily costs to the Kremlin of its invasion at about $500 million."

https://asiatimes.com/2022/03/russias-low-cost-war-can-endur...

Only 500MM per day. Very affordable for a couple of weeks. After 6 months, though, that's a $90 billion accumulated bill. That's not including escalation of costs as everything gets more difficult. Unlike the United States with its US dollar, Russia does not own the reserve currency of the world, so it cannot really afford to wage war at this level of intensity for the next 10 to 20 years that it would need to, in order to hope to achieve its extreme political and military objectives. It's a clearly idiotic an egregiously costly strategic error.

But they are partly bankrolled by China. They will wont be able to sustain years of war, but it could go on much longer than expected.

There's also a new Gas pipeline deal with China.

Although when there is no other trading partner but China left, I bet China's conditions on the deal beats Germany's wildest dreams.

The biggest winner out of this diplomacy mess of the last decades seems to be China. Just like with the 10 year lease China got in Afghanistan from the Taliban.

Why is that in China's interest though? As a casual observer, all I can see right now is Russia messing up China's Belt and Road strategy, in which Ukraine is one of several transit countries towards Europe.

>Why is that in China's interest though?

That is a good question with no concrete or simple answer. Apart from they are allies. May be China wants to gain control of Russia as some have stated ( I find that highly unlikely ), or Xi wanted a test and see how Taiwan could be handled.

People must stop using west-based numbers for these calculations, the economy is totally different in the east

* lost equipment costs basically 0 - they are mostly old hand-me-downs, the factories are not producing them anymore, so all the costs are already sunk; also the supply is plenty, so abandoning them is nothing; but let's be generous and say $100k / piece of equipment lost

* airplanes are more expensive, but again, this is old stock, there is plenty of them, and not incurring costs of producing more - let's say 10M per craft

* $1000 / day / soldier - this is absurd. They left the poor blokes in the cold with no fuel, military rations that expired in 1997 for food, and they rob the houses and stores they encounter for necessities; I'd say max $20 / day / soldier, and this is a country that average salary is $500 / month, so paying your soldiers $600/month is above average !

So in total this gets you 14M / day. Let's double that for the upkeep and then round up to 50M / day and you'll get a closer look at what the costs truly are like for Russia.

Basically the military in this invasion costs them spare change. The really costly bit is sanctions - in this context the lost at least 300B so far, with no end in sight. No wonder Putin is pissed.

> lost equipment costs basically 0 - they are mostly old hand-me-downs, the factories are not producing them anymore, so all the costs are already sunk;

Sure, for some legacy capital items, the production costs are sunk. But the cost of not having the equipment isn't. You can pay replacement cost or you can pay the permanent reduction in military capacity cost, but you are paying the cost either way if you lose the equipment.

Unless you are saying the operational value of the equipment is zero, in which case, sure, the loss is zero but then why did you even bring it to war in the first place?

> airplanes are more expensive, but again, this is old stock, there is plenty of them, and not incurring costs of producing more - let's say 10M per craft

If you aren't calculating it at the cost of replacing the capacity provided, you are underestimating the real cost.

Those don't matter too much if you win first, I suppose.

They do if you have other potential conflicts, of your choice or someone else’s, after winning.

Cash flow is a present issue while CAPEX is an issue for the future and can be spread along years. Most of what Russia sent to fight (except the jets and Pantsir AA systems) is stuff they intended to replace in the future and already planned for CAPEX. Thus, if you would apply accounting terms that stuff is already depreciated to 0 even if still has some operational value.

The big question that we want answered is will be Russian forces insolvent? And they can be both financially and operationally insolvent. In the former they don't have cash to pay soldiers and suppliers and thus will have to depreciate their currency even further. In the latter they just don't have enough production capability and stock to cover the war needs for fuel, ammo and rations. Giving the know corruption on the military and government I think the latter is possible at least for a few critical items like MLRS ammo and cruise missiles.

note that what you say is the _lower_ limit, "business as usual" if you can use that phrase.

nothing was usual for the russian army in the first week. now that they're starting to reorganize, it might go back down, but that's assuming logistics will be functioning. this is not a given since the army seems to be corrupt in and out.

Worth to read the article rather just the headline. Few mentions in the article

1) $20B is not the cost right now but expected to be: "the daily cost of war for Russia is “likely to exceed $20 billion” as the invasion scales.

2) Article mentions also lost of $2.7B from GDP because those killed russian soldier won't be veteran in the future and won't work in private sector etc and won't bring any money to russia economy in the future.

3) Article also mentions other supplies: ammunition, fuel, etc. - they are using a lot of rockets and those are not cheap to build and in comparison to tanks rockets are just 'disposable' products.

> Clearly they are not blowing through an entire year's defense budget in three days (that would be over 100x the usual rate of spend!).

The figure in the article includes losses; indeed, it speaks of costs, not spending.

Of course losses can obliterate many years of budget, if you're losing permanent assets that took literal decades to build up! Armies don't get rebuilt from scratch every year.

Unless they put a 15 day time limit to the operation:

https://www.businessinsider.com/ukraine-revealed-secret-batt...

If that's anything like 15 days to flatten the curve...

"nothing more permanent than a temporary government policy"

Don't forget that the source for that claim is still the ukrainian government. Not exactly the most reliable source when it comes to russian intentions.

Russia does not normally buy 5 advanced fighter jets every day, so their peace time military budget is not a relevant comparison. The numbers in the article also seem to include future costs that might be ammortized over 50 years or something. So in short: the numbers are just wild guesses, but not nonsensical.

The report and your figures are in USD. But the rouble, the currency Russia actually uses to pay for salaries, equipment, etc., has crashed, and we don't even know what was the course when the report's estimations were made.

Furthermore, the losses they've suffered are significant, and most of that equipment is decades old, acquired under Soviet "budgets".

The Ruble did crash, but not that hard that those numbers could be attributed to that. It's roughly at -36% when compared to EUR two weeks ago.

>>I'm as hopeful as anyone for Ukraine to survive this awful war with her sovereignty intact, but we must be realistic.

I am willing to bet 90% of people will believe that number when it is printed by the press or shared on social media.

It is so sad we live in a world where 99.9% of news are either factually incorrect or completely taken out of context.

I can’t see the article because the server isn’t happy with all the attention, the headline makes me assume that this is total cost to Russia including e.g. sanctions.

The foreign reserves that were frozen (which I know is different from “seized”) were 2-4 months GDP depending on which estimate I use for how much was frozen.

I’ve not seen any estimate for the economic impact from reduction in trade.

Your point is well received, and these numbers definitely deserve some scrutiny.

But it isn't particularly hard to imagine a higher spend rate during a large scale active conflict than during peace times.

And as many have pointed out, which is really clear from the article. Losing assets is a very significant part of the tally. Which makes me think this is a case of not understanding what the numbers are talking about.

Hence the title such as "Direct losses from military action". Of course these numbers are very different compared to when stuff doesn't get blown up. Not to mention the stuff that is intended to be blown up.

As for running costs, although less obviously different, as you mention, are not a surprise to be orders of magnitude larger during war. Logistics is expensive. War is expensive.

But the article is talking about costs, not spending

> This figure is transparently nonsensical.

Think of consultancy more of a wellness program instead of substantial help.

Reply on news.ycombinator.com