Most people had trouble believing media reports last month that the Russian Navy was planning to buy a $1 billion helicopter carrier from France. First, the Kremlin has always adhered to the sacred principle of producing big-ticket military projects domestically at any cost. After all, it is a given that a superpower must be able to manufacture its own ships, fighter jets and missiles. Second, France is a NATO country. Third, Russia is supposed to be in a deep economic crisis. Where would the military come up with $1 billion to buy a single ship? Fourth, Russian officials themselves denied the reports.

But on Wednesday, General Staff chief Nikolai Makarov put an end to all of the speculation. He announced at a news conference in Ulan Bator that Russia is indeed planning to sign an agreement by the end of the year on the purchase of a Mistral-class helicopter carrier. This represents Russia’s largest foreign military purchase in history — and the first from a NATO member. Moreover, Makarov announced plans to manufacture jointly with France three or four additional carriers, but in Russian shipyards.

The head of the Navy, Admiral Vladimir Vysotsky, is thought to be the chief initiator of the idea to buy the Mistral. Last year when he visited France, his jaw dropped once he saw the French carrier. It is also believed that the Kremlin supported his idea for political reasons — to thank French President Nicolas Sarkozy for his pro-Moscow stance on many foreign policy issues.

If the Navy does indeed have an extra $1 billion in its budget, shouldn’t it spend this money on more important projects? Perhaps the money should be spent on improving the country’s own shipbuilding industry, which has been underfinanced for years. The Navy has spent a disproportionate amount of its funds on building nuclear submarines, such as the Yury Dolgoruky, which have run into problems being fitted for Bulava missiles. Meanwhile, few new ships are being built, existing ships are poorly maintained, and an increasing number of old, dilapidated ones are being decommissioned. This may explain why Makarov and many in the Kremlin fantasize about adding a modern, French-built aircraft assault carrier that can carry 16 helicopters, 40 tanks or 900 troops and is equipped with a fully functional hospital.

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The real question, of course, is whether the Navy even needs such an expensive helicopter carrier. Just where does Makarov plan on deploying the Mistral? In Somalia? Perhaps it would make much more sense to concentrate on beefing up its naval defense capabilities closer to home — in the Baltic, Black and Barents seas — before it gets itself bogged down in interventions overseas.

As for Makarov’s idea of building a series of French-designed carriers in Russian shipyards, how will Russia finance these huge projects? It can’t even finance the manufacturing of simple corvettes. More likely than not, the Navy will wreck its new expensive toy even faster than it has destroyed and neglected its Russian ships.

It is mind-boggling that the Navy and the Kremlin are willing to let the country’s domestic shipbuilding industry die out because of chronic underfunding and misallocation of funds, but they do not mind heaping $1 billion — which could easily increase  — to support ship building in a NATO country.

Needless to say, the Mistral purchase will have a devastating effect on Russian shipbuilders’ already difficult task of selling their ships to other countries. It would be hard to develop a more damaging advertising campaign for Russia’s defense industry. Russia’s shipbuilders don’t deserve this negative PR. After all, they are not to blame when the military refuses to pay them for already completed jobs.

The military’s top brass is tightfisted with its own shipbuilders but is more than willing to squander a huge amount of money on French ones. Maybe this is because traveling to Paris to negotiate purchasing contracts is more enjoyable than trekking to dismal Severodvinsk or Komsomolsk-on-Amur.

Mikhail Barabanov is editor-in-chief of the Moscow Defense Brief.