SMOKE AND MIRRORS IN RUSSIA’S MILITARY BUDGET.

State Duma member and Russian defense intellectual Aleksey Arbatov has argued in a recent issue of Obshchaya gazeta that funding of the armed forces has to date been conducted in an unworkable fashion. The process starts with the government’s proposed budget, one that in theory is agreed upon by all the ministries. For 1997, the government requested some 101 trillion rubles for national defense. Arbatov points out, however, that the Finance Ministry is never able to fully fund the budget, so that even if this amount is approved some 20-25 percent of it will be sequestered and carried over into 1998 as arrears. But, as he notes, the government already owes the military more than 26 trillion rubles in arrears.

This means that the armed forces have less to spend on procurement, R&D, capital construction, and operations and maintenance than the budget would indicate. Arbatov is particularly concerned about shortfalls in procurement and R&D. While the new budget seems to call for a 70 percent increase in procurement, Arbatov says that, in fact, some six trillion rubles will be used to pay off arrears for work already done under the previous budget and another 5 trillion will go to banks for credit. That will actually leave the military two trillion less to spend for new weapons than in 1996 — a year when, in his words, the low rate of procurement left the defense industrial sector "comatose." Even to maintain defense spending at its current (low) level, Arbatov argues, requires allocation of an additional 40 trillion rubles. This, he admits "will completely squeeze out" social spending and investment. But a failure to allocate the additional funds, Arbatov says, would mean that Russia’s military "will be completely destroyed as an organized force."

Arbatov has some interesting things to say about the personnel strength of the armed forces. Apparently only the military leadership knows the true figures, and they aren’t talking. Arbatov also suggests that the Defense Ministry is skimming off payroll money and using it for purposes other than paying officers and enlisted personnel. He also claims that there are considerably more personnel in the armed forces than the 1.7 million authorized in the current law. Arbatov accepts that 10 trillion rubles are owed in wages, and calls for this amount to be added to the budget. But he recommends that this be done only on one condition: that the Defense Ministry submit precise payroll figures and account for every ruble spent. (Obshchaya gazeta, No. 40)

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