Baluyevskiy Blasts Russian Military Reform: ‘Money Down the Drain’

Publication: Eurasia Daily Monitor Volume: 9 Issue: 198

General Yury Baluyevskiy (Source: Wikimedia Commons)

Army-General (retired) Yury Baluyevskiy, the former Chief of the General Staff and until January 2012 Deputy Secretary in the Russian Security Council, has attached his name to an important article in the military press blasting the ongoing “reform” of the Armed Forces. The significance of the article published in Voyenno Promyshlennyy Kuryer on October 16 is apparent on three levels: its authorship, the use of the book review motif to attack the reform and the scathing content of the failure of the reform aims to date. However, its timing, the secretive nature of the book in question and the main theme of Baluyevskiy’s book review may mark an effort to move the question of financing the military modernization center stage.
Baluyevskiy was staunchly opposed to the reform of the Armed Forces since it began and used his position in the Security Council to cause some background friction. With the restraint of his position in the Security Council lifted, he was one of the outspoken senior officers involved in the YouTube documentary anonymously posted on August 8, 2012, attacking former President Dmitry Medvedev for his alleged indecisiveness on the first day of the war with Georgia in August 2008. Baluyevskiy accused Medvedev of cowardice and said that it took Vladimir Putin’s intervention “to kick backsides” (; Baluyevskiy, therefore, to some extent now carries the public mantle of reform critic extraordinaire.

Although Baluyevskiy attached his name to the book review, he may not be the author of the damning overview of the reform process. The book in question, which is not for sale, was produced by “academics, teachers, and graduates of the Military Financial and Economic University,” and “with the support of the Council of Veterans of the Military Financial and Economic Service.” Reformy po Krugu Ili Dengi na Veter (Reforms in a Circle, Or Money Down the Drain) was produced by a team of authors headed by retired Colonel-General V. V. Vorobyev, head of the Armed Forces financial service in 1991–1995. Moscow-based retired Russian military officers told Jamestown that the content of the book review bears a resemblance to the output of Vooruzhenie i ekonomika ( It may be the case that the article was prepared by some authors involved in the book and offered to Baluyevskiy to sign. In any case, he decided to act as the front man in the latest reform attack.

Baluyevskiy asserts that the aims in reforming Russia’s Armed Forces remain dubious targets rather than firm achievements. But the attack, utilizing the book review mechanism, contains a rather compelling economic demarche that may be intended to provoke an answer from the dwindling number of reform advocates (Voyenno Promyshlennyy Kuryer, October 16).

The book itself, according to the review, contains a number of chapters examining the state of the Russian economy as a means to support the country’s defense capability, development of the budget mechanism, forming and implementing the state defense order and “components and mechanisms of military organizational development,” as well as the changes in the organization of the “financial and economic structures and systems of social protection for service personnel and departmental financial oversight in the context of the reform.” Turning to the chapter on the five main goals of the reform, Baluyevskiy suggests the unnamed authors convincingly “demonstrate the lack of preparation, lack of consistency, and exclusively cost-based nature of the measures carried out in the course of the reform in all areas of the activity of the Armed Forces. They note that many of the objectives of the reforms declared in 2008 were not achieved by 2012. Not all formations and troop units meet the requirements of permanent combat readiness. The state defense order is not being implemented in full and prices for defense products are growing. Many planning documents relating to the training and use of the Armed Forces do not meet modern-day requirements. The system of material-technical and financial support for troops based on outsourcing is suffering hitches, the resolution of the housing problem has failed, and the potential of military science has fallen dramatically” (Voyenno Promyshlennyy Kuryer, October 16).

The root cause for these setbacks in the reform is using “untrained people” to implement the changes, “who do not understand the nature of the reforms and bear no responsibility for their own “reformist activities.” Reforms conducted on the “trial and error principle” meant that even the new financial structures were flawed; the single settlement center created in 2012 has resulted in numerous complaints about its capability to function. A separate chapter examines the material and technical support for the Armed Forces, in particular offering critical comment of the process of outsourcing catering to “commercial companies,” though this is provided by the defense ministry–linked Oboronservis OAO (Open-Type Joint-Stock Company) holding, and its nine sub-holdings. This has led to “extremely negative consequences in a number of cases,” with instances of food poisoning, increasing the prices for services in the military retail system, sickness caused by exposure to cold, while the outsourcing has pushed up military expenditures for low quality service. Oboronservis is now the subject of a major corruption investigation (see EDM, October 25; Voyenno Promyshlennyy Kuryer, October 16).

A chapter on the changes in the pay and allowances system is used to show that “ill-considered, dilettante decisions on introducing unreasonable payment norms, abolishing concessions, and establishing an unfair bonus system boosting the level of material provision for some service personnel to the detriment of others who are no less deserving,” resulted in “a dramatic exodus from the defense ministry by professionally trained officers and warrant officers, their transfer to other security agencies, their discharge to the reserve, and the creation in the troop collectives of an unhealthy morale climate and other phenomena that are extremely dangerous to the Army and Navy.” The pay structure was “reformed” on January 1, 2012, and the authors reached the following conclusion: “The incomes of service personnel serving in remote regions and performing tasks involving risk to life and health improved. For other categories, income hardly increased at all, while for some it even fell” (Voyenno Promyshlennyy Kuryer, October 16).

The final chapter deals with financial oversight in the context of disbanding the defense ministry financial inspectorate and local level inspectorates in 2011. An auditing and financial inspectorate was created in their place in Moscow and St. Petersburg, but with limited functions in the sphere of financial oversight. Baluyevskiy states: “The new structures, by virtue of their composition and numerical strength, are incapable of performing the tasks facing departmental financial oversight. For this reason it is premature to talk about increasing the effectiveness of use of state resources or combating corruption and other abuses in the Russian defense ministry. At the moment, in the authors’ opinion, everything possible is being done to ensure that the mistakes and failures that have occurred in this work during the reform process do not become widely known to the public” (Voyenno Promyshlennyy Kuryer, October 16).

Consequently, the reform launched in 2008 failed in many of its key aims, marked by an ineffective use of financial resources, mismanagement, abuses and waste, and numerous issues linked to the defense budget and lack of transparency. Baluyevskiy concludes that the Armed Forces are not capable of carrying out their required tasks due to the following reasons:

• the incompleteness of the military reform and the imperfect nature of the cadre system both of the Armed Forces and of the country’s military organization as a whole;

• non-compliance with the requirements in the provision of modern arms and military and specialist equipment;

• insufficient civilian oversight of the course of the military reform.

Baluyevskiy could have focused on the planning weakness inherent in the reform. Instead, he turned on the financial and economic underpinning for the whole process including modernization. He calls for closer alignment between reform and modernization with the 2010 Military Doctrine and the need to avoid an arms race, stating: “In this context, the end result should not be the untargeted distribution of financial resources ‘by types of activity,’ but concrete distribution—in a clear, comprehensible, and transparent linkage to the state defense order and other types of work, services and measures.”

Baluyevskiy’s book review is important as a critique of the “new look” for a number of reasons. It is an insider Russian perspective that shows many of the publicized “achievements” of the reform are open to question. At the heart of the reform was an effort to create “permanent readiness” brigades, which more recently gave way to reverting to a reliance on battalion tactical groups. Its authorship, attributed to a retired general known to oppose the reform, conceals its actual source or real purpose and the non-availability of the book underscores the opacity of detailed reform criticism. While the article’s timing may aim to raise financial and economic issues rather than highlight the flawed approach to reform planning, it sends a stark signal to the political elite that four years of reform has not left the Russian Army “good to go.”