The draft budget for 2001, passed by the Duma in the fourth and final reading December 15, allocates 218.924 billion rubles for defense needs, which will total about 2.8% of the GDP. Together with “other expenditures” not included in the national defense clause (purchase of state housing certificates, additional state expenditures, and so on) the overall military budget may total up to 250 billion rubles, more than 3% of the GDP. This is more than the defense assignments of 2000.

During his visit to the Duma December 20 Defense Minister Marshal Igor Sergeev said that he is happy with the military budget for 2001. “The military budget for 2001, amounting to 3.2% of the GDP, is characterized by the highest level,” comments Sergeev. He adds, “Henceforth it is necessary to efficiently spend the money on the most vital needs, taking into account prospects for development of the Armed Forces, proceeding from resolutions of the Security Council, and military buildup plans.”

Meanwhile, we can hardly agree with the Defense Minister that 3.2% of the GDP is “the highest level.” First, according to presidential decree, it is necessary to spend at least 3.5% of the GDP on defense. Second, until 1997 defense spending in Russia varied from 11% of the GDP in 1992 to 3.8% in 1997. Only with the arrival of Sergeev as Defense Minister did military reach about 2.7% of the GDP, in 1998 and 1999.

In his interview to Krasnaya Zvezda Sergeev admitted that the military budget for 2001 was insufficient, and most allocations, “taking into account the limited capabilities of the state with regard to purchase of new armament and combat material, will be spent on extension of resource of available armament and materiel.”

It would seem that in 2001 defense spending will grow almost by 45%, but the new figure, if it is finally approved, will total slightly more than $7 billion. This is still a very low level. The budget assigns adequate sums for maintenance of the Armed Forces, but assignments for armament and combat materiel purchase are obviously not enough. Assignments for armament purchase in the budget for 2001 are classified. However, according to experts, they are not big. Duma Deputy Yury Maslukov reports that in the next year the ratio of spending on Armed Forces maintenance to armament purchase will be 7 to 1 (in the US military budget this ratio is 1 to 2).

According to the General Staff, the state currently owes over 60 billion rubles to the Defense Ministry. This sum amounts almost to 30% of the military budget for 2001. The government will finally return these debts. However, this will hardly improve the Armed Forces’ combat capability. Over the last eight years, only single models of new armament were purchased (about 6% of all defense spending, and NATO countries spend at least 20% of their military budget on new armament, plus 20% on combat training), and the Armed Forces simply spent money on money allowances, food, uniforms (NATO countries allocate 25-27% of defense spending to this purpose).

New models of armament and combat materiel in the Armed Forces currently account only for about 15-20% of all armament, whereas in NATO countries this figure is 60-70%. The Russian Armed Forces have only a few Ka-52 helicopters, T-90 tanks, thermal imaging devices, close-range radars, encrypted communication radio sets, and so on. Since the breakup of the Soviet Union, the Russian Armed Forces have not purchased a single military transport airplane. The Russian Armed Forces mainly spend money on repair and upgrading of all types of armament and combat materiel.

According to the reform plan, troops reduction will allows doubling of the financing of each serviceman by 2005, and tripling by 2010, because the relative value of national defense spending will decrease. Thus it is planned that additional money will be found for armament purchase.

Meanwhile declassifying of some military budget clauses was a step forward in the budget for 2001. Andrei Nikolaev, Chair of the Duma Defense Committee commented on this move, saying “declassifying of military clauses of the budget for 2001 is the first important step towards establishment of civil control over the Armed Forces.” Nikolaev said that when the Russian public knew only four clauses of the military budget and the government submitted 23 clauses of the military budget to the UN it was “anachronism.” “We have finally managed to enable each taxpayer to learn how his money is being spent,” added Nikolaev. He emphasized that the clauses were declassified due to “well established business relations among the parliament members and the Presidential Administration, government, and Defense Ministry.”

Nikolaev named the sums of state assignments for defense needs in 2001, according to the following declassified clauses:

-central military command- 912 million rubles;

-personnel maintenance- 91.6 billion rubles (including over 62.5 billion rubles for monetary allowances and wages for civilian personnel, 17 billion rubles for food, 3.6 billion rubles for uniforms and so on, as well as 3 billion rubles for holiday pay and assignments for healthcare and 1.4 billion rubles for benefits and compensations);

-combat training and logistics- 37.51 billion rubles (including 15.9 billion rubles for housing maintenance and repair, 12 billion rubles for payment for and storage of special fuel and fuel, 5.7 billion rubles for transportation, 1.8 billion rubles for maintenance, operation, and repair of property and installations, and 1.9 billion rubles of other expenditures);

-education and healthcare expenditures- 2.15 billion rubles;

-insurance guarantees- 1.5 billion rubles.

The new budget will also assign 6.8 billion rubles for defense needs from additional budget revenue, and return of outstanding debts for the state defense order (50 billion rubles) by January 1, 2001.

Thus, expenditures on the troops maintenance will account for more than 50% of the defense spending. However, this does not mean that the welfare of servicemen will improve substantially. Income tax will be implemented for servicemen from January 1, and benefits regarding payments for housing and other public utilities services will be cancelled as of April 1. It is unknown how will the cash compensations for these benefits will be paid, although the budget allocates 8 billion rubles for this purpose. However, nobody knows whether this money will be enough to provide full compensation for the elimination of benefits for officers and warrant officers.