#7
The Russia Journal
January 18-24, 2002
Old treaties or wages?
The Russian Army’s real priorities
By ALEXANDER GOLTS

How will relations develop between President Vladimir Putin and the Army? The question came up repeatedly at the end of last year when analysts were busy discussing the consequences of the Russian decision to abandon its spying base at Lourdes in Cuba and the Kremlin’s calm reaction to the U.S. withdrawal from the Anti-Ballistic Missile Treaty.

But the reality is that these foreign-policy issues can throw shadows over Putin’s relations with a certain part of the military elite, whose advice he has taken to ignoring lately. The soldiers who shoulder the burden in Chechnya and across the country from Kaliningrad to Sakhalin are indifferent to the fate of the ABM Treaty.

It’s not the Kremlin’s defense and foreign policy that shape the president’s image for the army’s rank and file. As in the days of the ancient Roman emperors, officers’ concerns are for matters closer to their hearts – how long the war in rebellious Chechnya will continue? Will there be enough money to feed the soldiers and teach them the art of war?

The amount of money servicemen receive does more than anything else to determine how they view the president. In this respect, the situation isn’t promising. Although the defense budget increased last year, servicemen haven’t seen their wages rise.

Defense Ministry officials have announced that servicemen will get raises in January. But it’s already evident that there hasn’t been any real increase at all. Deputy Defense Minister Lyubov Kudelina told journalists that the increase concerned not wages themselves, but "premiums." A new premium has been introduced for officers commanding subdivisions, from regiment commanders down to platoon commanders. The premium for difficult and intensive military service is also to be increased by 20 percent.

But the amounts in question are miserly. The "commander’s premium," for example, comes to 200 rubles to 500 rubles a month. Even going by Kudelina’s optimistic forecasts, servicemen’s wages will rise by 15 percent, which is less than last year’s inflation level. By Russian law, servicemen’s wages are supposed to be indexed for inflation, but the government has conveniently chosen to forget about this.

Now the Defense Ministry is trying to convince servicemen that their living standards will rise on July 1. This is the date when military wages are to be made equivalent to wages for civil servants. According to Kudelina, officers’ wages will rise two to two-and-a-half times. So, it would seem it’s only a question of a little patience before officers begin to live the good life.

But rather than rejoicing, officers are making calculations for the future. This is because with the wage rise comes the loss of two benefits. First, they will now have to pay income tax. Second, they will now pay housing and utilities costs. Even Defense Ministry officials say that wages will rise by no more than 40-60 percent in real terms, and that is without taking inflation into account. This is not the kind of improvement in living standards that Putin had promised the military.

This is all the stranger as it comes when government officials are all talking about unprecedented economic growth. Unlike in past years, the Defense Ministry not only received all the money it was promised in 2001, it also got an extra $20 billion to cover costs linked to the war in Chechnya and the operation to raise the Kursk. What’s more, the defense budget for 2002 has more than doubled compared to 1999.

A more interesting question is where this money went. Defense Minister Sergei Ivanov said that 60 billion rubles were spent on developing new arms. But attempts to ascertain what was developed and produced haven’t yielded any result.

The worst expectations look confimed. A number of economists had said that Russia’s military-industrial complex all but didn’t exist anymore and that only huge orders could revive the whole chain of sub-contractors needed to produce modern military equipment. But this would take sums of $600 billion rather 60 billion rubles. As the state doesn’t have this kind of the money, the allocations it has made for development and production of new equipment are quite simply being stolen.

The other "black hole" pointed out by Deputy Defense Minister Kudelina is increase in natural monopolies’ rates – railway freight, gas and electricity costs – that wasn’t provided for in the budget. The paradox is that, as the economy grows, these rates will continue to rise and will draw more and more money from the military budget.

The problem then is less about lack of money. Mistaken political choices are in evidence here. Defense Secretary Sergei Ivanov and his generals realize that the Revolution in Military Affairs isn’t just some invention by Donald Rumsfeld. They are afraid of being left so far behind they’ll never be able to catch up. So they try to resolve the problem by throwing all the available funds into developing new military technology, assuming that the resulting cutting-edge equipment will be used by impoverished officers and semi-literate conscripts.

The Russian military leadership refuses to understand that converting to a professional army is a precondition for a revolution in military affairs. But for that to become reality, soldiers have to receive decent wages. So far, the state is playing a game with officers, giving them money with one hand and taking it away with the other. But, perhaps there is something else at work, too – someone who doesn’t like Putin’s sharp turn to the West and is deliberately trying to drive a wedge between Putin and the officers.

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