#11
The Russia Journal
December 3-9, 2000
Secret funds for secret budget
By Alexander Golts
The people who plan Russia's military policy deliberately put their stakes on
total and absolute secrecy. They see no need to inform the public about how
military reform is to be carried out.
Despite the fact that President Vladimir Putin's address to a recent
gathering of generals, and Defense Minister Igor Sergeyev's speech to the
State Duma lower house were both made public, nothing is known of exactly how
military reform will be implemented.
What is known is that cutbacks are planned -- 365,000 servicemen and 135,000
civilian specialists. It's also known that by 2005, the armed forces will
comprise only three branches -- the Air Force, Navy and Army. The strategic
missile forces will lose their status as a separate branch. But neither
cutbacks nor organizational changes are reforms in themselves.
In any other country, an issue like military reform would be widely discussed
in parliament. It is parliament, after all, that distributes (or should
distribute) finances and can therefore exercise control on the government.
But, even among the Duma deputies, only a privileged few know how every
fourth budget ruble is to be spent. The thing is that of the four pages that
give a more or less detailed breakdown of the main items of defense
expenditure, only one figure -- general defense expenditure -- is not
considered secret.
Chairman of the Duma Defense Committee Andrei Nikolayev said he is fighting
for the defense budget to be made open, at least within the limits of what
Russia annually reports to the United Nations on its defense spending. If
this happens, then Russian citizens (and not so privileged deputies) will
finally get access to the same information on Russia's defense spending as
foreign specialists have.
The Defense Ministry also supports making the budget more open, taking the
view that then people will know how little Russia spends on its armed forces.
Only Deputy Finance Minister Lyubov Kudelina at one point said that "open
information on defense spending would increase lobbying, and this would
complicate normal work on the budget."
But those who need to know are fully aware of how much the state plans to
spend on this or that military program. It's another matter that the various
participants in the process would very much like to divide up the budget
money among themselves, without any public attention.
This wish is intensified by the fact that, for perhaps the first time in
Russia's post-Soviet history, the state has some significant funds at its
disposal that could go to priority sectors. The military budget has already
been increased by more than 40 percent. Everyone knows, however, that this
money comes not from economic growth but from favorable world oil prices.
There is, then, no guarantee that the government will have similar amounts of
money next year. In the end, it was decided not to take any risks and leave
things as they are. The secrecy surrounding the defense budget is just a
cover for the emptiness it contains and lack of ideas that would require a
concentration of funding.
"The 2001 defense budget is better than last year's, but it is a budget of
stabilization, not of reform," said Duma Defense Committee Chairman
Nikolayev. "It has no clearly identified priorities. It should improve the
state of affairs, but isn't able to really resolve a single problem."
The budget sticks to the previous structure, with around 70 percent of all
funding going to maintaining the Army. Next year, as in past years, the state
plans to continue propping up a cumbersome and ineffective military machine.
At the same time, as the Security Council decision on reform dictates,
General headquarters will make cutbacks of 200,000 servicemen.
At least half of these people are likely to be officers and warrant officers
who, according to the law, are supposed to receive an apartment and decent
financial compensation if they are laid off. Most of the money budgeted under
"military reform" will therefore go on this, rather than on structural reform
of the armed forces.
Chechnya is another black hole in the budget. Acting out of political
considerations, the Kremlin and Finance Ministry wanted to hide expenses on
restoring (and maintaining) constitutional order in Chechnya among the
current expenses of various ministries, including the Defense Ministry.
As a result, the armed forces are left with not so much money for their own
development â?" 30 billion to 40 billion rubles. It is for this money that a
battle is now under way in the Duma. The interests of the armed forces and
the military-industrial complex have come into conflict.
Nikolayev thinks a maximum should be spent on military training. "To judge by
the budget, it looks like we conscript people into the armed forces just to
feed and clothe them. What's the point of training military pilots if
they're then not going to fly a plane for the next five years. We've lost
around two dozen aircraft in Chechnya, and half were just because the pilots
don't know how to fly."
For these reasons, Nikolayev calls for a three-fold increase in supplies of
fuel purchased, which is essential for effective training.
Nikolayev's main opponent is the chairman of the Industry, Construction and
Technology Committee, Yury Maslyukov, who has been trying to prove that all
additional income should go into buying military technology as the share of
modern weapons in the Russian arsenal continues to decline.
But producing single models of tanks and planes is an absurd waste of money.
Moreover, it makes no sense to produce arms today that don't fit into the
general arms system, which must have common intelligence and information
backup.
As for supporting the military-industrial complex, a giant step has already
been taken in this direction. On the Duma Defense Committee's initiative, the
state has promised to pay 5 billion rubles in Defense Ministry debts to
defense industry companies. Another 27 billion rubles of Defense Ministry
debt will become state domestic debt securities.
However it's looked at, next year's defense budget is a tribute to the past
-- it is all about patching up the holes and paying back debts. The Kremlin
thinks that this will clear the way for real reform to begin. But the
question is, will there be the money for this reform in the future?
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#12
Veteran Russian spy anticipates pardon for US businessman
Interfax
Moscow, 7th December: Veteran of the Soviet intelligence service Mikhail
Lyubimov has said he is "absolutely convinced" that the Russian leadership
will in the end "make the humane gesture" and pardon US citizen Edmond Pope,
who was convicted on spy charges on Wednesday [6th December].
The Russian authorities are unlikely to be interested in keeping Pope in
prison in Russia and "have an enemy in the person of the US administration",
Lyubimov told Interfax today.
Moscow City Court found the US businessman Pope guilty of spying activities
for the US and sentenced him to 20 years in high-security prison.
"The Russian special services have done their job and the trial has been
carried out, in other words, all legal routine has been observed, and the
goal now is releasing Pope graciously," the retired intelligence officer
said...
Lyubimov "flatly excluded" the possibility of exchanging Pope for US citizens
sentenced for spying for Moscow, among them Aldrich Ames, who was sentenced
to life in prison for spying for the KGB.
"The US president cannot do that without a court order, and America has very
tough law in this respect," Lyubimov said.
What is more, "the American public will be unable to countenance, say, the
release of Ames, because it is known in the United States that his work for
Moscow resulted in the execution of several CIA agents, among them a general
of the Main Intelligence Department who was a resident agent in India, in
1986."
Speaking about the Pope case, Lyubimov noted that "apparently, the fact of
espionage took place".
In the opinion of the retired intelligence agent, the US businessman's arrest
is connected with the general tendency "to bring order to Russia, to
kickstart the work of the law enforcement agencies".
According to Lyubimov, he does not understand "why the American received such
a tough sentence", although, as Lyubimov said, "it is hard to judge the
graveness of Pope's actions, not being familiar with the secret materials of
the investigation".
In any case, "if an intelligence agent has gone into business, he should not
deal with spheres connected with state secrets", Lyubimov said.
According to the former intelligence agent, now he would "advise all our
special services to warn" all former US intelligence agents who have gone
into business and are working in Russia "to stay away from sensitive areas".
Lyubimov worked for Soviet intelligence in Great Britain, from where he was
deported as persona non grata in 1965. He worked in Denmark twice (the last
time as a resident Soviet intelligence agent). He retired in 1980. Lyubimov
holds the rank of colonel in the KGB.
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