Does Russia have economic capability to support Syria?
Against a background of Syria ruined towns and villages, razed by five years of continuous civil war, beleaguered citizens in the country were given a rare glimpse of hope when Russian forces began to withdraw. For them, it was possibly the beginning of the end of what has been classified as genocide.
But Russian President Vladimir Putin, who dispatched his military to encourage President Bashar al-Assad’s regime last year. The reduction of troops is a versatile strategic leap of faith: Not only will President Assad remain in power, causing a key regional ally for Russia and the residual military presence there, but Russian President Vladimir Putin can also cut back on military spending to ease a recession-ridden economy back home, analysts said. The retraction could even urge the European Union to ease crippling economic sanctions as a result of Russian involvement in Ukraine. And while nothing was made certain, analysts say the move made by President Putin was worth the risk.
"Cutting military spending and cutting short the Syria operation is not the primary plan, but an imperative secondary consideration," said Ariel Cohen, a senior fellow at the Eurasia Center at the Atlantic Council. Above all, President Putin's plans may still work.
Economic Setback to Russia
The war has cost the Russian government about $ 660 million since September, which is below half of what the US is spending and a fraction of $ 50 billion military budget of Moscow, but the cost is important for a country paralyzed by a recession with 15% of their population below the poverty line. Earlier this month, the Kremlin decided to cut its defense budget by 5%, according to a Reuters report.
“They could stay longer, it’s not been that expensive, but this could be a nice story to tell at home,” said Olga Oliker, director and senior adviser of the Russia and Eurasia program at the Center for Strategic and International Studies. "This was a successful, quick and inexpensive war. They do not get bogged down; they did not end up in a quagmire. It runs very nicely as a brilliant Russian success, and it's okay to have a great achievement. "
Russians have been cautious of overseas wars since the Soviet Union pulled out from Afghanistan in 1989 after a 10-year conflict. The war took the lives of about 15,000 Soviet troops and injured over 50,000.
Much more serious economic consequences for Russia could be caused by their interference in the Syrian crisis. Even though Russian officials claim that the Russian air force was bombing the positions of ISIS militants, many sources in the area say that the main purpose of these attacks was the Syrian opposition fighting against the army of Syrian President Bashar al-Assad.
Given that the major countries in the region - Saudi Arabia and Turkey - supports the Syrian Sunni opposition, then the longer and greater involvement of Russian forces in the Syrian civil war, the more economical and political problems will emerge for Russia in the region.
Thus, the Russian Direct Investment Fund has announced the establishment of investment partnerships with sovereign wealth funds of the United Arab Emirates and Saudi Arabia. As part of these plans, these funds have expressed willingness to invest respectively, $ 7 billion and $10 billion in the projects in Russia.
In a case where Western financial capital markets have been shut to Russian companies and banks, the capital from the Gulf nations was contemplated by the Russian authorities as one of the desirable and possible alternatives. It is clear that, in the event of a prolonged military operation of the Russian army in Syria, the likelihood of the realization of these plans will fall sharply.