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CHIEF OF GENERAL STAFF DISPLEASED WITH DEFENSE SPENDING ENVISAGED IN DRAFT BUDGET FOR 2005

MOSCOW, June 17 (RIA Novosti) - Chief of the General Staff of the Russian Armed Forces Anatoly Kvashnin sharply criticized the draft federal budget for 2005 in what regards defense spending.

"The draft budget does not allow us to expect significant changes in the attitude to national defense, nor does it allow overcoming the crisis in the Armed Forces," he said at a cabinet meeting on Thursday after Finance Minister Alexei Kudrin presented the draft budget to the government.

"In the materials presented here national defense spending increased by 83.8 billion rubles ($1 roughly equals 29 rubles), but it is caused only by structural changes in the budget sphere and in budget planning," the Chief of the General Staff added.

He requested Prime Minister Mikhail Fradkov that his arguments be heard at a closed meeting, but the Prime Minister suggested considering the matter at a closed meeting of the military industrial commission, and left the further discussion open.

Kvashnin agreed that the closed part of the question be discussed at a meeting of a special commission, but asked the Government "to revise the parameters of the budget and pay attention to the amount of money allocated for effecting the program of modernizing arms."

"I also ask to make transparent the mechanism replacing privileges for servicemen [with payment of money], to envisage matters associated with indexing, increase salaries for servicemen and make allocations in accordance not with the planned figures for inflation but with real figures indicating a price increase," Kvashnin said.

"The figures for inflation rise was 10%, but, for instance, the growth of tariffs for transportation of servicemen was 18%, for the price of gasoline it was 16% and for diesel oil, 13%," he added.