Publication: Monitor Volume: 8 Issue: 4

As Russia’s armed forces move into the new year, it is clear that they continue to face several old problems. One of the most serious of these, and the one that is perhaps of most direct concern to military personnel themselves, involves the government’s plan to restructure the current system of military pay and benefits as part of a broader defense reform effort. Russia’s officer corps has long borne the brunt of declining military budgets, and many of those in uniform had hoped that the election of President Vladimir Putin, who rode to power on a platform that included a pledge to rebuild Russia’s military might, would lead to a significant improvement in their own living standards. To date, that has proven by and large not to be the case. Putin has backed only modest increases in defense spending, and talk of raising military pay has mostly been just that.

The year 2002 may prove to be a critical juncture, however. Amid hints that disgruntlement is growing in the ranks over the officer corps’ continued penury, the Defense Ministry will move this year to restructure a pay and benefit system that has been in place since Soviet times. The plan, which has generated apprehension within the armed forces since it was first proposed last year, involves in its broadest terms the elimination of a host of long-standing benefits, privileges and bonuses, and their replacement with higher basic pay scales. The goal, according to Defense Ministry sources, is to create a more rational and cost-efficient military payment system. Over the next year, they have said, the salaries of Russian officers will be raised dramatically, so that it comes to equal in its various gradations that of Russia’s civilian government employees. Russian military personnel fear, however, that they will lose their benefits and privileges without a commensurate gain in basic pay. Those fears have been stoked by the government’s failure to deliver on an earlier pay raise due in September, and by concerns either that inflation will eat into any implemented pay raise, or that a downturn in world oil prices could trigger significant enough budget shortages so that pay raises are delayed.

The government effort to reform the military pay system has been spearheaded by Deputy Defense Minister Lyubov Kudelina, the head of the Defense Ministry’s main financial-economic department and the first woman to be named to a top Defense Ministry post in recent Russian history. In interviews given to the media over the past several weeks, she has tried both to clarify the government’s plans in this area and to offer assurances that military personnel will not be left in the breech when the planned changes are implemented this year. Kudelina was brought into the Defense Ministry last spring as part of a so-called “civilianization” of the ministry. She and current Defense Minister Sergei Ivanov, himself the first civilian to be named to the post in recent Russian history (Ivanov is actually a career intelligence officer), are therefore seen as direct agents of the Russian president. The manner in which the pay reform plan is implemented is therefore likely to reflect directly on Putin, in much the same way as he is likely to be held to account by military personnel for a broader defense downsizing and restructuring effort that is also underway at present.

As the new year arrives, there is apparently still some confusion in the Russian army regarding the details of the new military payment plan. Kudelina, in an interview published late last week by Russia’s main military newspaper, suggested that this was the result of delays in getting related legislation drafted and passed by Russian lawmakers. She made clear, however, that the first major changes in military pay will occur on July 1 of this year. At the same time, Kudelina said that the government would implement stop-gap measures aimed at improving the situation for some military personnel during this interim period. Specifically, commanders of smaller Russian military formations (regiments and lower), will on January 1 begin receiving monthly pay supplements ranging from 200 to 500 rubles. This will constitute an increase in their pay of about 15 percent, she said. But Kudelina also made clear that additional raises in pay, which many military personnel had been hoping for, will not be forthcoming between now and July 1.

Kudelina attributed the government’s current unwillingness to fund higher military salaries to a reordering of defense spending priorities that has been implemented over the past year. That involves, in essence, the allocation of less money to troop maintenance and a simultaneous rise in monies directed at the army’s “development,” that is, troop training and equipment procurement and repair. Until only recently, she said, some 65 percent of all funding allocated to the armed forces had gone to troop maintenance. Now that number has been lowered to 44 percent. Interestingly, Kudelina also implied that, of some 20 billion rubles in supplemental funding that was allocated–with much fanfare–to the armed forces last year, little had made its way into the pockets of impoverished junior officers and other military personnel. The Russian deputy defense minister said that a considerable sum had been directed at the operation to raise the Kursk submarine, and that much had gone also to financing military operations in Chechnya. The news that the Kursk salvage operation had come out of Defense Ministry funding may not have been especially pleasing to Russian military personnel, given that the plan to raise the Kursk reportedly had only limited support in the military and that many officers believed it to be a primarily political action (Krasnaya Zvezda, January 4; Strana.ru, December 25, 29, January 5; Sovetskaya Rossiya, January 4).

It remains to be seen whether resentment over continued low pay levels in the armed forces will turn into a political issue of any significance in Russia. The newspaper Nezavisimaya Gazeta, which is often critical of the Kremlin’s defense policies, had some harsh words for the government’s military pay reform plan in an article published in late December. It dismissed official claims that pay for servicemen is scheduled to rise between 80-90 percent this year, arguing that inflation and the loss of benefits that soldiers now face will largely offset the pay increases that the government has in mind. The newspaper looked at the possible consequences for one imaginary officer–a naval institute instructor with an advanced degree–and concluded that his overall compensation package will remain virtually unchanged after implementation of the government’s pay reform. More generally, the newspaper disputed the government’s claim that military pay rates will soon equal their civilian equivalents, and reached the unhappy conclusion that “the degree of the increase of money allowances [to soldiers] is exaggerated, and the reality is tragic–officers will be poor” (Nezavisimaya Gazeta, December 28).

Russian Defense Minister Sergei Ivanov, meanwhile, continues to sound the alarm over what he in recent weeks has suggested is the government’s failure to allocate enough money overall to the armed forces. In a December 25 interview Ivanov lamented the fact that the government had failed in 2001 to devise a workable plan whereby some of the profits earned through Russian arms sales abroad might be directed toward helping the army purchase its own military hardware. He urged that in 2002 the government find a way to make this idea a reality (Strana.ru, December 25). Ivanov’s admonition suggests that defense spending could yet emerge as a significant political issue in Russia in 2002, and that a failure by the government to improve living conditions for servicemen could undermine both the army’s faith in Putin and the Kremlin’s own plan to reform and revitalize the Russian military.

The Monitor is a publication of the Jamestown Foundation. It is researched and written under the direction of senior analysts Jonas Bernstein, Vladimir Socor, Stephen Foye, and analysts Ilya Malyakin, Oleg Varfolomeyev and Ilias Bogatyrev. If you have any questions regarding the content of the Monitor, please contact the foundation. If you would like information on subscribing to the Monitor, or have any comments, suggestions or questions, please contact us by e-mail at pubs@jamestown.org, by fax at 301-562-8021, or by postal mail at The Jamestown Foundation, 4516 43rd Street NW, Washington DC 20016. Unauthorized reproduction or redistribution of the Monitor is strictly prohibited by law. Copyright (c) 1983-2002 The Jamestown Foundation Site Maintenance by Johnny Flash Productions