In one of her recent interviews, Deputy Defense Minister for finance and economy Lubov Kudelina announced with pride that in 2002 the national military budget would grow by 68 billion rubles, or almost by one-third in comparison to 2000. However, in any case the defense budget totaling about 287 billion rubles will be insufficient to solve all the social problems of servicemen and improve the level of combat training of the troops. In 2002, the share of the defense budget in the GDP will remain actually the same amounting to 2.7% (2.8% in 2001). Along with this, the Armed Forces will undergo substantial reductions, assignments for the purchase of armaments will be increased by 27 billion rubles, and money allowances will be raised for servicemen.

Money allowances for officers and warrant officers will be raised gradually. At the first stage, from January 1, the additional allowance “for difficulty and intensity of military service” will be raised to 70% (from current 30-50%). A special monthly additional payment for command of military units of the platoon-regiment level will be implemented from January 1. This additional payment will be applicable to junior officers. It is expected that this payment will vary from 300 to 500 rubles. According to Kudelina, this measure will “slightly compensate for the unjustified hopes of junior officers for raising of money allowances in 2001.” Kudelina emphasized that all financial reserves of the Defense Ministry are used for increase of servicemen’s wages. When the Duma was debating this issue it already made a decision to increase additional payments for long service, reiterated Kudelina. According to her, all these novelties will enable the Defense Ministry “to correct the formerly made decisions on reforming money allowances to prevent infringing on interests of servicemen and to make the real increase noticeable, like the President has said, and to protect the increase from negative influence from the liquidation of allowances in payments for public utilities services.”

At the second stage, from July 1, 2002, the ministry plans to raise wages of servicemen according to their posts, adjusting them to wages of state employees and increasing additional payments for long service. Along with this, the ministry will stop paying compensations for the income tax and payments for housing, telephone and public utilities services. A so-called addition will be canceled for the officers who have served at least for 20 years (it amounts almost to one-third of a retired officer’s pension).

Thus, from July 1, 2002, servicemen will earn twice as much as they earn now. For example, monthly wages of a platoon commander will amount to about 4,000 rubles, wages of a battery commander to about 6,000-7,000 rubles, and wages of a regiment commander to about 8,000 rubles. However, officers will have to pay a 13% income tax from their wages and to pay fully for the apartments and other services. As a result, they will have by 40-50% less money left from this sum.

Many officers do not understand why it is necessary to introduce such novelties. There is logic in their arguments. If the stage cares about the Armed Forces it could have simply retained the social benefits and could have simply raised the wages. In the near future inflation will devaluate the compensations to servicemen for the canceled benefits. This means that the social motives, although very weak, which somehow make people serve in the Armed Forces now will cease to be effective in the future.

Meanwhile, from the standpoint of the state, the Kremlin initiatives regarding cancellation of benefits for the servicemen look ideal. Financial novelties will slightly increase money allowances for junior officers. Senior officers, especially those who had an additional payment, will lose practically all incentives for service. The state actually did not increase the military budget but took a part of money from senior officers and gave it to junior officers.

The government also plans to introduce some other novelties related to reduction of the social component of military expenditures. For 2002 the government sets the value of food ratios at 43.20 rubles per day, or approximately 1,400 rubles per month, and plans to pay a monetary compensation to those who prefer money to food according to the former level of 20 rubles per day. This means that a person who eats in a military canteen will receive food worth 43.20 rubles per day and a person who prefers money will receive 20 rubles per day in cash. The government has the right to “choose categories of servicemen who are entitled to compensation of 20 rubles per day.”

Payments to military pensioners will be lowered. The value of the food rations (that is, 1,400 rubles a month) will be excluded from their pensions.

The government also plans to lower the maximum pension for retired officers. Andrei Nikolaev, chair of the Duma defense committee, explained, “a pension is assigned to an individual, and henceforth the law will be an effective antedate, and we will take this pension from an individual. On which grounds?” Nikolaev is also concerned about the planned lowering of additional payments for work in the ministries and agencies where there is military service from 50% to 25%. Nikolaev says that in the draft budget for 2002 the government launched an unprecedented offensive on the social rights and benefits of servicemen. According to his opinion shared by a majority of members of his committee, it is necessary to invalidate the new federal bill “On amendments to some legal acts on money allowances and benefits to servicemen” because it contradicts to the Constitution and cancels some benefits for servicemen. Nikolaev refers to conclusions of the Supreme Court stating that “The cancellation of social guarantees and benefits for servicemen and members of their families do not meet requirements of the law on the reliable protection of servicemen’s rights, state interests and the task of modernization and strengthening of the Armed Forces.” Duma deputies already split according to their attitudes on this bill. The pro-government majority (right-wing and centrist organizations) supports the bill, and communists and agrarians are opposed to it.

It is likely that the bill will be passed. Thus, for the first time during entire post-Soviet history an event will occur which definitely shows a real attitude of the incumbent authorities to the Armed Forces. Many experts say that social conditions of servicemen will get worse.

Meanwhile, some politicians and observers point out that the Kremlin has a way out to not worsen social protection of servicemen. According to presidential decrees, which outline the military policy of the country and were issued by Yeltsin, it is necessary to spend at least 3.5% of the GDP on defense. If these figures are included in the budget for 2002 Russia will be able to solve the problem of substantial improvement of servicemen’s efficiency and to prevent the outflow of junior officers from the Armed Forces.