Publication: Monitor Volume: 7 Issue: 93

As the Kremlin and newly named Defense Minister Sergei Ivanov have moved over the past several months to begin a far-reaching reform of the Russian armed forces, considerable media attention has been devoted to personnel changes atop the military hierarchy and to proposed administrative restructurings of the country’s various service branches (see the Monitor, May 10). Less noted have been Kremlin plans to reform the manner in which Russian military personnel are paid and compensated for their service. Given the impoverishment of Russia’s officer corps and the precipitous decline in living conditions officers have faced over the past ten to fifteen years, however, it is perhaps no surprise that many military personnel appear to have their eyes fixed more firmly on if and when their next paycheck will arrive than on competing plans for military reform in Moscow. And if Russian press reports are to be believed, considerable resentment is growing within the armed forces over Kremlin plans to replace a host of longstanding military benefits and privileges with more regularized forms of cash payments. The government’s ultimate goal appears to be the replacement of these benefits and privileges–which include such things as allowances for housing and telephone expenses as well as free travel on public transport–with higher salaries and cash compensation. But the transition from the old to the new system appears to have gotten off to a rocky start, and threatens to increase distrust of the central government within Russia’s already demoralized officer corps.

The point person in the Kremlin’s effort to restructure the Russian military payment system is Lyubov Kudelina, a long-time Finance Ministry official who was unexpectedly named deputy defense minister for financial-economic issues this past March. In a series of interviews published since she assumed her current post, Kudelina has tried to calm fears among military personnel that the system she is implementing will result in new financial complications for them and a net cut in their overall pay. She has emphasized again and again that the proposed changes will be introduced gradually, and that the government has no intention of eliminating paid benefits and various privileges across the board. With regard to military salary levels, she has said that the government intends by the year 2002 to raise military pay to a level commensurate with that of regular government employees, and that by 2003 additional monetary allocations for rank will bring military salaries into conformity with salary levels for equivalent government officials.

A significant hike in military pay scales would certainly seem to be in order. According to Russian news accounts, an officer must rise to the rank of major general (commander of a division) to earn the salary of a janitor in an average Moscow office. And similar large pay differentials proceed up the chain of command. According to one report, a deputy defense minister currently earns 2,100 rubles per month, roughly half of the 4,100 rubles taken home by a deputy federal minister. A governmental department head is paid 3,780 rubles per month; his counterpart in the Defense Ministry central apparatus earns 1,350. According to General Staff Chief Anatoly Kvashnin, state officials are currently paid on average 2.6 times more than their military counterparts.

And these wage differentials persist despite a 20-percent pay increase received by servicemen as of December 1, 2000. Indeed, military personnel are said to complain that the pay increase, which was introduced with much fanfare last year by the Kremlin, did not even keep up with Russia’s inflation rate, and that living conditions have in fact continued to worsen for military families. Moreover, officers complain that they are scheduled this year to get only one pay increase–in September–and that their take-home pay has been cut in any event by the fact that they have been compelled since the end of last year to pay Russian income tax. They were previously freed from that obligation. Anger over their financial situation has reportedly led some officers to warn that the government will face a mutiny if it does not do more to meet the demands of military personnel.

According to Kudelina, the government is now working with lawmakers to finalize the plan under which military salaries are to be indexed to those of government employees. The military’s suspicions appear to have been stoked, however, by the difficulties that the relevant legislation has faced in getting final approval. And there have been complaints that the government itself has stepped in and weakened the legislation being considered by lawmakers. Perhaps more important, military personnel see looming behind these irksome problems an even greater potential obstacle to increased military pay: the government’s unwillingness or inability to come up with the actual funding in the event that the relevant legislation is actually passed. The Russian government has reportedly already done a great deal to clear up wage arrears, and Defense Ministry sources claim that all officers were paid their March salaries on time. But broader Russian defense budget plans probably provide military personnel with little in the way of comfort. The government hopes over time to allocate a smaller percentage of defense spending to salaries and troop maintenance, and to devote correspondingly more to weapons development and procurement. Given what are expected to be continuing constraints on the budget, officers are probably justified in wondering if their pay increases will ever actually materialize.

For the time being, however, military resentments appear to be focused on more mundane matters. Already complaints are being heard about initial plans to convert some military privileges to cash compensation. The sentiment in the armed forces is said to be that money succumbs to inflation, while such privileges as free use of public transportation do not. Cash compensation can also be more troublesome. It is easier to simply have the privilege of riding on public transportation than to have to go the base financial department to receive compensation for bus tickets afterward. Russian military leaders are reportedly arguing strongly against any sudden moves to end privileges of this sort, and they have been quoted as saying that the government is likely to leave them in place until 2005 (Obshchaya gazeta, No. 14, April 5-11;, April 2; Izvestia, April 11; Parliamentskaya gazeta, April 28; Krasnaya Zvezda, May 5).