Last Monday President Vladimir Putin ordered the government to increase servicemen’s money allowances by at least 20% in 2005. In addition, he ordered to increase compensation for servicemen’s travel expenses to 200% of their wages. As is known, the Defense Ministry, the Duma and the Federation Council have been demanding this for a long time. This issue was raised during the discussion of the 2005 budget. However, the government did not support such demands. The government did not intend to increase servicemen’s money allowances in 2005. The pro-government majority in the parliament did not support the idea of increasing servicemen’s wages despite deputies’ and senators’ protests. In the meantime, the leadership of the country seized by demonstrations and protests was forced to change its mind in January. Servicemen’s money allowances will go up. Will the Army be satisfied with this raise?

Sergei Mironov, Speaker of the Federation Council, stated that over 80% of officers criticize the law on monetization of benefits. Only 15% of officers and ensigns and 27% of soldiers are satisfied with such changes. It should be noted that only 5% of servicemen are satisfied with their social status and incomes (20% in 2003). Only 10% of officers are satisfied with housing conditions.

It is hardly likely that statistical reports will change after the government increases servicemen’s wages. The state has not increased money allowances for over two years. Inflation has amounted to 25% over this period. In the meantime, 34,000 officers (8,000 of them are younger than 30 years old) resigned from the army in 2003. At present the situation is much worse. Young lieutenants who receive around 4,000 rubles a month do not want to serve in the Army. If the state increases their wages they will receive 6,000 rubles a month. The average wage in Moscow is equal to 11,000 rubles. It should be noted that many officers serve in remote garrisons where it is impossible to find jobs, for officers with families. This means that they will have to share this 6,000 rubles with members of their families and live below the poverty line.

Sergei Ivanov described these problems in the presence of the Army’s leadership and President Putin in November 2004. However, the president did not pay heed to his complaints. He changed his mind only three months later. No one knows when money allowances will go up. Servicemen hope that this will happen before September 1, 2005.

If the government increases officers money allowances this will affect military pensions, many benefits, which military pensioners had, have been cancelled. Will the increase of pensions cover these losses? Colonel-general Vladislav Achalov, president of the Union of veterans of the Airborne Force and the Task Force, thinks that it will not. He stated that the government invalidated article 23 of the federal law on veterans, which means that military pensioners younger than 60 years old will lose all compensations and social benefits.

How will these changes affect the budget? As is known, the 2005 budget is large, over $571 billion (3% of GDP). It is easy for Russia to increase money allowances thanks to high oil prices; however, no one knows where it will find money in the future. Prices for energy resources are unstable. All this prompts that expenses on defense are too high in Russia, and will increase in the provinces. In the meantime, the Army (including civil workers) consists of over 2 million people. The General Staff does not hurry to dismiss servicemen. The FSB, the Interior Ministry and the Emergencies Ministry do not want to do this either. If we calculate all expenses on security and law enforcement agencies, it turns out that expenses in the defense sector amount to a third of the budget. This happens in a period when Russia does not have foreign enemies, and seeks to solve topical socio-economic problems. It may prove to be too hard for Russia…