Cynical calculation: why Russia is economically advantageous to fight in Syria

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Циничный расчет: почему России экономически выгодно воевать в Сирии

The country shows off its military development, saves on border protection and inhibits the development of the oil sector in the East.

Armed conflict in Syria lasts from spring 2011 and in addition the Syrian army and numerous terrorist, religious and tribal groups that are already involved more than two dozen countries, including the US, Russia, Iran, Saudi Arabia, Turkey and Qatar.

Because the goals of the participating States and their coalitions do not always coincide, and in some ways are the opposite, the success of Assad’s army and videoconferencing to support government forces from the air, has already led to confrontation with the United States and its satellites. Around the Syrian crisis sounded notes of the cold war and the threat of new Western sanctions against Russia and expressed fears that the Russian economy will not withstand a new confrontation with the United States and that this is not our war.

The media discussed the counting of economists that within a year the military operation in Syria has cost the Russian budget of 58 billion rubles. Costs may increase because it is necessary to create a full-fledged naval base of Russia in the Syrian Tartus.

But the economy is subject to certain laws and regulations, and in the analysis of the cost of the military campaign is necessary, first, to separate capital expenditure (CapEx), which is in Syria, yet virtually no, and operating costs (OpEx) associated with the operation of machinery, work of the personnel of the armed forces, and that ammunition and fuel, and secondly, do not mix the cost of the operation with the socio-economic results. And if not to delve into political theory, it is possible to evaluate the results and cost of operation using conventional methodologies for investment project evaluation.

Performance criteria

From an economic point of view, foreign military operations effective in two ways. The first is when they bring for the country as a whole, real income exceeding not only all possible costs for the preparation and conduct of military operations, but losses from the sanctions, trade restrictions and reactions of third countries. This was, for example, the First Opium war of great Britain against China in 1840-1842, in which the British received a multimillion-dollar indemnity from the Qing administration, the huge Chinese market for thousands of tons of opium from their Indian colonies and … Hong Kong in the bargain.

The second option is when the total costs of an external military campaign to proactively counter threats are known to be less harm to the economy, prejudice to the public and the integrity of the state in comparison with the possible consequences of defence on its territory and repel the attack gained the enemy’s strength. An example is the British bombardment of Copenhagen in 1807 with the capture and destruction of the Danish fleet, which largely prevented the invasion of Napoleon’s army to the British Isles.

Because Syrian oil is not enough, and all gold deposits in the Levant have been exhausted in antiquity, the main value of Syria to the country itself and its neighbours appears to be its territory and a key location in the middle East and southern Mediterranean. In Syria thousands of years intersect the main transit corridors from North Africa to West and Central Asia, from southern and Central Europe and Turkey to the countries of the Arabian Peninsula. Damascus was the end point of the main route of the famous silk road and may become part of the modern Chinese project “Economic belt silk road”.

Before the war in Syria was built by a network of highways with a total length of 1103 km, which connects the roads of Turkey, Iraq, Jordan and Lebanon. Syria could become a transit country for cheaper and safe delivery of middle East oil and gas to consumers in Europe and Turkey than the more risky routes through the Gulf of Aden and the Straits, located between the hot spots: Somalia and Yemen.

Modern Russia cannot afford a war of ideological principles, as did the USSR, so the operation of our videoconferencing is a preventive measure aimed at combating terrorist threats and protecting the economic interests of Russia. And in the Syrian operation has several aspects, directly or indirectly related to the economy.

The savings on deterring terrorists

According to the General staff of the armed forces, our videoconferencing for the year with operations beginning in Syria killed about 35,000 fighters. Given that the length of the Russian borders in the Caucasus is 1254 km, plus the territory of CSTO allies to ensure security and deterrence comparable number of terrorists Russia would have to deploy in the southern Federal district (including the Crimea) an additional one or two field armies, that is, from 70 000 to 120 000 personnel and an appropriate number of appliances. Budget costs could in this case increase to 250-300 billion rubles a year.

For comparison, our group in Syria has only about 4,000 military personnel and 70 aircraft and helicopters, accounting for only 2% of Russian combat aircraft. Even if you agree with the estimate of 58 billion rubles, it is still the most effective Russia’s military campaign in decades.

Help the oil and gas sector

Before the Syrian conflict, there were plans for a strategic inter-Arab energy cooperation with Turkey and the European Union. The transit of oil and gas to pipelines through Syria to the terminals on the Mediterranean coast was presented to Iran, Saudi Arabia, Qatar, UAE and Iraq more secure and cost-effective than the sea route from the Persian Gulf through the Gulf of Aden, the Red sea and the Suez canal, so at the beginning of 2000-ies has adopted a comprehensive “Strategy 2025” to create a pipeline and roads, including in Syria.

But pretty soon apparent contradictions between Saudi Arabia and Qatar on the one hand, and Iran and Iraq on the other. Qatar with Iran to the same share for the two largest field of the “North/South Pars” containing 28 trillion cubic meters of gas and 7 billion tons of oil. Religious differences between Sunnis and Shiites play an important role in the middle East, and Bashar al-Assad chose to sign an agreement with Shiite Iraq and Iran, where the government is now also in the hands of the Shiites.

The Sunni monarchy hoped to replay the situation with the pipelines in their favor, eliminating Assad the hands of armed Sunni groups such as the banned in Russia LIH and “al-Nusra Front” or anyone who is referred to in the media as “moderate opposition”. Numerous victims among the Syrian people and the genocide of infidels didn’t care. Remember the words of Karl Marx that “a 300% profit there is no crime that would not have dared capital”.

Now a third of consumption of the EU energy comes from Russia and most of Central and South-Eastern Europe only uses Russian gas, the other there. If not for this dependence on oil and gas supplies, the sanctions of the West against Russia would now be much tougher and would be like the Iranian version of the with freezing accounts and trade embargo and technology. By the way, the annual cost of Iran sanctions was estimated at 12% of nominal GDP.

Given that gas talks between Qatar and Ukraine, conducted in 2012, in case of a victory of the Sunni groups in Syria, the Qatari gas would pass through Syria to Turkey and then connect the black sea pipelines with the existing gas transportation system of Ukraine, which through the decades, first the Soviet and then Russian gas supplied to Europe. Such a route might go and Saudi oil in addition to a potential terminal in Latakia. It is very good that Russia and Turkey to 2016 managed normalizewhitespace.

The export of Russian oil to Europe is 160 to 170 million tons per year. Net revenues of Gazprom from gas sales in Europe amounted to in 2015 2.16 trillion rubles. Losing half of the European market of hydrocarbons, the Russian economy would have felt a powerful blow, and the fall in GDP, given the severe sanctions could be 3.7%, and 12% (as in Iran), or 9.6 trillion roubles in nominal terms, the dollar could not talk. And again, compare that with a conditional rating 58 billion spent on the operation of our videoconferencing in Syria.

The development of the defense industry

The openness of the Ministry of defense in light of the actions of our forces in Syria allows daily to demonstrate the effectiveness of real combat use not only the latest su-35S, but also time-tested su-24M, su-25SM, su-30CM, attack helicopters Mi-24, Mi-28 and Ka-52, as well as proper weapons and ammunition. Sounds a bit cynical, but the world always sees kind of a report on “aviation and space salon”.

According to published in mid-October, 2106 according to the Federal service for military-technical cooperation, the portfolio of export orders weapons Russia is $52 billion, and by the end of 2016 Russia will sell weapons worth $15 billion And, in addition, thousands of jobs at Russian enterprises, the capacity to conduct R & d, including fundamental research and development in the field of high technology, which is lacking in our economy.

Export

In 2016, Russia took first place in the world for grain exports (about 40 million tonnes), overtaking the United States and Canada. The export of oil and oil products via black sea terminals exceeds 60 million tons per year, and overall turnover of the ports of the Azov-black sea basin is approximately 220 million tonnes a year, only one of the Novorossiysk sea port has a capacity of 152 million tons of cargo, and there not only Russian grain, coal and oil but also Kazakh, Azeri and Turkmen oil. Most of the exports are sent via the routes from the Black sea to the Mediterranean through the Bosporus and Dardanelles.

Permanent naval base in the Syrian Tartus and control of the South-Eastern part of the Mediterranean sea by ships of the Russian Navy is the best guarantee for the security of hundreds of millions of tonnes of Russian export supply, and not the Montreux Convention on the status of the Straits, which had already been broken by the Americans (and miss them by the Turkish side) in 2008 and 2014.

 

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