While the Russian economy has begun to emerge from its brief post 2014 contraction and today sees growth, albeit extremely slowly, the country’s armed forces have as of 2018 seen a dramatic 20% budget reduction. This has come despite ever escalating tensions with the Western Bloc in a number of theatres, and the United States and Europe for their part have continued to increase their military expenditures dramatically. Moscow’s decision to reduce funding for its military in such a critical and tense period has been met with a number of responses. While Western analysts have widely hailed Russia’s defence military budget as heralding the country’s decline, with the economy buckling under the pressure of ever increasing Western economic sanctions applied since 2014 and the desperate government forced to compromise defence and security as a result, according to the Western narrative, an analysis of Russia’s current economic and military and economic circumstances indicates other motive for this recent development. In the late 2000s Russia began a massive military modernisation program, spurred both by the United States’ withdrawal from the anti ballistic missile (ABM) treaty and by the gross underperformance of its own forces in their brief war with Georgia in 2008, and this would in just over ten years revolutionise the country’s war fighting capabilities. The program has affected almost all aspects of the Russian military, from its fighter jets and bombers to its army and submarines, but has focused in particular on modernising asymmetric capabilities critical to guaranteeing an advantage over and deterring attacks by NATO forces. The country’s air defences, cruise missiles, tactical ballistic missiles and perhaps more importantly its strategic nuclear delivery systems have all made strides in their capabilities and today are very likely the most capable in the world. These systems, while costing relatively little to develop, have a major impact on the balance of power between Russia and the Western bloc and represent the most cost effective means to retain parity in arms. Based on Russia’s military modernisation, and in particular the new ballistic missile systems recently inducted, Russia has had room to reduce its military budget - with the reduction coming immediately after President Vladimir Putin personally announced the commissioning of new ballistic missile systems. These included the Sarmat and Avangard intercontinental ranged hypersonic missies, the Kinzhal air launched ship hunting missiles - which double as a nuclear delivery vehicle, as well as a nuclear armed unmanned submarine among others. These weapons systems remain without parallel anywhere else in the world, and their induction was inevitably met with great apprehension in the Western bloc. While Russia has spent over 5% of its GDP on the military, the country’s economic standing has left much to be desired. Though the Russian economy has seen considerable improvements since 2000, having experienced an abrupt 40% contraction following the disintegration of the USSR in the 1990s, its growth has been well below average and Russian innovation, technology and modernisation pale in comparison to the Soviet era. The New York Times recently reported that the U.S. corporation Microsoft files more patents per year than all corporations in Russia, a far cry from the Soviet era when the country was leading the world in technology and innovation. Strengthening the Russian economy has increasingly become a priority for the country’s leadership - one which it can afford to devote far more resources towards following the completion of the military modernisation program in 2018. Shortly after announcing the country’s new nuclear deterrent capabilities in March, Russian President Putin set out goals for the country’s social and economic development from 2018 to 2024, which included raising life expectancies and radically boosting economic growth - putting Russia within the top five economies. With Russia’s economy currently standing as 12th in terms of nominal GDP, these goals were highly ambitious, bordering on unobtainable, and would require a major refocusing of resources including those previously allocated to defence. Reducing military expenditure in the aftermath of deploying a powerful new deterrent to free funds for economic development has several historical precedents, and the induction of new nuclear weapons systems has been key to facilitating a number of states’ initiatives to reinvigorate their economies. The Soviet Union notably reduced its overall military expenditure under Nikita Kursuchev in the 1950s following the deployment of new intercontinental ballistic missiles, as a massive ground force was no longer perceived as necessary to deter hostile attacks in Europe. The United States adopted a similar strategy on the Korean Peninsula under President Eisenhower, deploying nuclear weapons to South Korea to facilitate a reduced military presence in the country which had previously numbered over 300,000 personnel. North Korea has more recently taken a similar approach, and the development of a viable nuclear deterrent has been a key facilitator of a significantly lower defence budget which has helped the country’s economy not only endure harsh Western led sanctions efforts, but continue to grow at a rate over three times that of the Russian economy despite immense external pressure. Russia’s moves to reduce its own military budget today could well in much the same way reinvigorate the economy in line with the government’s vision for the Putin administration’s fourth term up to 2026. Ultimately a Russian state, with a staggering and relatively small economy, can only pose a limited threat to the Western bloc’s designs, hardly comparable to the Soviet Union, the second largest economy in the world and the fastest growing of the 21st century, or to China today. Should Russia’s new focus towards economic growth, heralded by the reduced defence spending and facilitated by a modern and more cost effective military, be as successful as its previous military modernisation efforts, the country will prove a far more formidable adversary than it has over the past 30 years. Investment in economic growth can even potentially be perceived as a long term investment in more sustainable military capabilities. Even if the country further reduces the defence budget three percent of GDP, should the economy achieve target growth rates of over seven percent the military will in the long run be far better funded than it is today. A wealthier Russia able to compete with the Western bloc in science, technology and living standards as well as in military strength will compound challenges the Western bloc currently faces to its dominant position from China’s rapid economic and military modernisation, and will in the long term allow Russia’s military to grow far more than it can today under the constraints of a stagnant economy. Cutting its defence budget therefore does not represent Russia's opting out of great power competition with the Western bloc, but rather the beginning of a renewed effort towards a return to genuine great power status - something which a large military alone is hardly sufficient to facilitate.