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An analysis of Russia’s state spending shows that Vladimir Putin’s Kremlin is taking the country in a dangerous direction, girding for a new Cold War while neglecting the domestic infrastructure. Military and security spending is so lopsided in Russia that the country’s cash cow - the energy sector - is being starved of funds.

According to figures recently released by the State Committee for Statistics, Russia’s revenue for the first half of 2008 amounted to almost 4.4 trillion rubles, or, at the current exchange rate, about $176.5 billion. Expenditures totaled almost 3 trillion rubles, or $120.9 billion. Overall, the Russian government is projected to spend almost 7 trillion rubles, or $278.6 billion, under the full-year 2008 budget.

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