The Cold War is back

The new arms race is deadly because Russia is so fragile

Fraser Nelson

14 July 2007

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Fraser Nelson says that Putin’s bellicose strategy — spending his oil millions on a deadly new arsenal — is more dangerous than the actions of his Cold War predecessors because Russia is so vulnerable to economic and social collapse

As recently as six years ago, such an ambition would have been laughable. Then, Russia was an economic basket-case which had been admitted into the G7 group of industrialised nations only as an act of charity. The main security issue in Russia was how to stop its nuclear fuel being sold for scrap to rogue states. But, in those days, oil was $17 a barrel. Now it is $75 and rising. For a country which pumps out more oil than any on earth, save for Saudi Arabia, the consequences could scarcely have been more dramatic. Russia now has a huge surplus, has banked £25 billion in a ‘stabilisation fund’ and has the third-largest currency reserves in the world.

Rather than invest this bounty in Russia’s crumbling infrastructure or its imploding health service, Mr Putin has gone on an arms spending spree. In 2001, the defence budget was 140 billion roubles; today it stands at 870 billion (£16.7 billion) — a sixfold increase, and the fastest in Russia’s peacetime history. Last year, he added six new intercontinental missiles to his arsenal, 12 launch vehicles, 31 battle tanks and seven Mi-28N night attack helicopters. And this is but a small taste of what is to come.

The missile tested last week takes off so fast that no missile defence system could detect it in time. The new variant of the Topol-M missile will have multiple warheads, which splinter so they cannot be shot out of the sky. America’s floundering missile defence system cannot hope to offer protection. Washington struggles to keep up: two months ago, another interceptor missile fired off Alaska fell into the Pacific having failed to recognise, far less hit, its target. America is losing the ballistic missile game.

Meanwhile, Mr Putin has learnt to use energy as a weapon. Russia is sitting on the largest stretch of gas reserves in the world and Europe already depends on Russia for a quarter of its gas. The Kremlin knows that energy security is intimately intertwined with national security, and tested its strength the winter before last when it temporarily suspended gas supply to Ukraine in an argument about prices. Germany is expected to rely on Russia for 80 per cent of its gas within a decade.

Precisely what Mr Putin intends to do with this muscle was made astonishingly clear in February when he delivered a speech at the Munich security conference. It was a ‘J’accuse’ to America, serving notice that Russia had moved from ally to adversary. ‘The United States has overstepped its borders in all spheres — economic, political and humanitarian, and has imposed itself on other states,’ he declared. ‘This is the world of one master, one sovereign.’ And his objective is to challenge such hegemony.