COMMENT ON THE 2004 MILITARY BUDGET

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The defense and Security committee of the Federation Council considered the basic parameters of the 2004 defense and security budget on Tuesday. There are some conclusions drawn by the Federation Council committee.

The total sum of money, which the government plans to spend on money allowances amounts to 73.5 billion rubles. Judging from the federal law on the 2004 federal budget, the government will not increase servicemen’s money allowances regardless of the inflation rate. In other words, the government has disobeyed paragraph five of article 4 of federal law No. 49-FZ on making amendments to some legislative acts of the Russian Federation connected with servicemen’s money allowances and fringe benefits.

The total sum of money, which the government will spend on servicemen’s food allowances amounts to 19.365 billion rubles.

The government has violated paragraph four of article 14 of the federal law on the status of servicemen: it intends to pay compensation 20 rubles worth despite the fact that the actual cost of the food allowances is 51.45 rubles.

It turns out that the government can only supply food to 70% of servicemen. The remaining 30% of servicemen will receive 20-ruble compensation (a day).

The government’s allocation for this purpose (7 billion rubles) makes it possible to purchase:

– field uniforms for all servicemen;

– everyday uniforms for only 30% of contract servicemen;

– an incomplete set of uniforms for servicemen of the Navy;

– military property for servicemen of limited groups of sources.

The government will pay compensation for clothing only to servicemen dismissed from the Army. The sum of the compensation will not exceed 3,000 rubles. The remaining contract servicemen will receive clothing depending on conditions of their service. Article No. 14 o the Federal law on the status of servicemen, which ensures dollar adjustment instead of clothing, has been suspended until 2005.

Bills payable does not let the Army restore a reserve of military property next year. The Army needs extra 8 billion in order to solve this problem.

The total sum of money, which the government intends to spend on fuel within the framework of the State defense order, amounts to 17,848 billion rubles.

The 2004 draft budget’s expenses on fuel and lubricants will make it possible to purchase 80% of gasoline, 85% of diesel fuel, 95% of kerosene, 95% of fuel oil and 85% of 85% of bunker fuel.

Each pilot of the Air Force will only be able to fly during 32 to 35 hours a year(instead of 80 hours); warships will spend only 16 to 20 days in the sea (the minimum requirement is 40 days).

Specialists say that Russia’s ability to purchase oil products is going down from year to year owing to high oil prices on the world’s market.

The total sum of money, which the government intends to spend on transport charges amounts to 13.568 billion rubles.

The Russian Defense Ministry’s actual ability to solve this problem does not exceed 75% to 80% of the Army’s needs.

The total sum of money, which the government intends to spend on medical services amounts to 3.931 rubles. This money will only make it possible to offer free of charge medical services to 65% of servicemen. Only 30% of servicemen and members of their families will receive grants for sanatorium-and-spa treatment.

Expenses on the maintenance of sanatoriums will be covered by means of offering medical services on a commercial basis.

The total sum of money, which the government intends to spend on capital construction will only make it possible to solve the minimum quantity of problems of the Russian Army and create decent conditions for Russian troops on the border with Georgia, the Republic of Ingushetia and special centers in Plesetsk and Novaya Zemlya.

Financing of the State Housing Certificates program will decrease next year. In all, the government plans to spend 75% of the sum spend in 2003. The Defense Ministry will only be able to give 13,500 apartments to servicemen next year. In this regard, the defense and security committee of the Federation Council proposed to find extra money in order to issue 9,000 extra state housing certificates.

Expenses on research and development, purchase of weapons and military hardware and repair of weapons at industrial enterprises will amount to 137.366 billion.

The government has been passing the structure and size of the state defense order on the basis of the 2001-2010 State armament program since 2001.

Research and development. The basic research and development programs will continue. The consequences of cutting the budget of the research and development projects by 16% and redistributing money are as follows:

– Russia will fail to launch 60 new research and development projects (1.6 billion rubles);

– Russia will fail to complete some research and development projects, which will necessitate postponing serial production of new weapons;

Purchase of weapons and military hardware. A 25% decrease of this budget will make it impossible to finance the strategic nuclear force.

Repair of weapons and military hardware. The government does not plan to realize all projects in this sector. This budget has been decreased by 30%.

The government decided to spend the major part of the military-technical rearmament budget on research and development, and also the maintenance of weapons and military hardware, which the Army currently has.

The government plans to allocate 7.245 billion rubles for realizing military reform. The absence of precise plans of the reform and clear tasks and evaluations does not make it possible to check the efficiency of the use of money in this sector.

Financing of scrapping of chemical weapons in 2004 will amount to 5.36 billion rubles (5.36 billion rubles in 2003). According to the schedule of financing of the Scrapping of Chemical Weapons program passed by the government on March 21, 1996, the sum, which Russia must spend on the program next year amounts to 11.58 billion rubles. In other words, the state finances only 50% of the program.

Considering the fact that the state did not manage to finance the program properly, the total gap will amount to 19.391 billion rubles at the end of 2004. As a result, Russia will fail to accomplish the second phase of the program (to scrap 20% of chemical weapons by 2007). In addition, this will create prerequisites for the failure to meet international commitments within the framework of the Convention of the prohibition of production chemical weapons.

The bill is aimed at altering some legislative acts of the Russian Federation in the defense sector.

It is intended to change the order of military service of cadets of military educational institutions (namely, article 38 and article 35 of the federal law on military service). Article 98 of the federal bill on the 2004 federal budget reads that cadets of military educational institutions get the status of draftees and sign their first contracts when they enter the last year (except for people studying at military medical and military veterinarian institutes). The duration of the contract is ten years.

Owing to the fact that the government does not intend to increase servicemen’s money allowances in 2004, the defense and security committee of the Federation Council opposes a decision to suspend a range of legislative acts:

– paragraph five of part two of article five of the law on additional guarantees and compensations to Russian servicemen sent to the Trans-Caucasian region, the Baltic States and the Republic of Tajikistan, and servicemen involved in armed conflicts;

– paragraph four of article 14 (dollar adjustment instead of food allowances);

– paragraph two of item two of article 14 (compensation of the cost of clothing to contract servicemen);

– paragraph item seven of article 15 (payment of compensation at the expense of the federal budget);

– paragraph two of article 19 and paragraph two of article 24 (lax credits to servicemen issued according to the federal law on the status of servicemen dated May 27, 1998.

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This situation prompts several conclusions:

Firstly, Russia’s GDP is too low, and it cannot cover all defense needs.

Secondly, the Army’s needs will be satisfied only after Russia’s economy revives.

Thirdly, the Defense Ministry does not intend to cut the Army’s strength in the near future. This means that problems connected with financing of Russian troops will aggravate if another crisis breaks out in the economic sector.

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