Tag Archives: Budget

Shamanov Disputes Defense Spending

Shamanov addressing the Duma in 2018.PNG

Shamanov addressing the Duma in 2018

Former VDV commander General-Colonel Vladimir Shamanov’s Defense Committee has criticized the RF government in advance of the first Duma reading of the federal budget for 2020 (and plan for 2021-2022). The committee accused the government of steadfastly “ignoring the army’s needs” — pay for MOD civilians, military pensions, housing, and fuel specifically — in its spending proposals.

Russian media reported the committee’s complaints were spelled out in writing. The legislature will discuss the government budget on October 23.

Committee chairman Shamanov addressed the low wages of the MOD’s 900,000 civilian workers. 

Civilian workers of the MOD march for worthy pay in 2018.jpg

Civilian MOD workers march for “worthy” pay in 2018

As numerous as uniformed officers and soldiers, civilian defense employees are critical to Russia’s military but their pay only averages around 30,000 rubles ($470) per month against 46,000 rubles ($718) elsewhere in the economy, Gazeta.ru reported.

They received a three percent increase on October 1 but, coming so late in the year, it offset only a quarter of this year’s inflation (4%).

The Defense Committee claimed the current average military pension in 2020 will be 23,500 rubles ($368), and has declined 20 percent in recent years because it hasn’t always been adjusted for inflation, wrote Rossiyskaya gazeta.

[NB: Cumulative inflation for the period 2012-2018 in Russia was over 60 percent.]

The committee reminded the government that President Putin promised retirees in 2012 they would get inflation plus two percent to preserve their buying power. It asked for a 6.3 percent pension increase next year.

The MOD’s mortgage savings system for servicemen was lacking 92 billion rubles ($1.4 billion) at the start of this year, the committee said. The mortgage system depends on government contributions and won’t function without this financing.

The military budget also did not contain enough money for other servicemen and their families who depend on MOD rent subsidies.

According to Gazeta.ru, the committee proposed adding 145 billion rubles ($2.3 billion) to close the gaps in the provision of military housing in 2020. But the RF government did not include this funding in the budget bill.

The Defense Committee also reported the MOD owes 7 billion rubles ($110 million) for fuel this year, and the draft three-year budget contains money for only 1.57 million tons against the 2.1 million tons the military will need. Shamanov and company say the MOD will need an extra 20 billion rubles ($314 million) for this, according to Interfaks-AVN.

Speaking to Voyenno-promyshlennyy kuryer, conservative military commentator Konstantin Sivkov said:

It’s easy to find resources for these needs. Even if we don’t cut their pay, but just the bonuses of the top managers of state corporations, we’d find money for military pensions, and for medicine, and for housing subsidies. According to official data, they amounted to 67 billion rubles [$1 billion] for just the one year 2018.

Why Mr. Shamanov and his committee took on these particular issues isn’t clear. They didn’t tackle pay increases for active duty servicemen who are still several years behind the rate of inflation. They didn’t challenge spending on weapons systems, but then large parts of the defense budget are still secret.

They challenged the government (an easy target) rather than President Putin (a dangerous one). Shamanov and the majority of his committee are members of the party of Putin — United Russia.

Kind of a curious moment for the Russian legislature to offer some checks and balances to Russia’s executive branch.

Refusenik Accountants

This morning Argumenty.ru reports that Defense Minister Anatoliy Serdyukov can’t find a new deputy minister for finance-economic work to replace Vera Chistova who left to head the Moscow city finance department on 8 November.  

A Defense Ministry source tells Argumenty.ru, “about 10 offers have been made, but all candidates declined.”

A highly-placed source in the Defense Ministry’s financial directorate says the absence of a deputy minister to answer for financial issues is already creating a number of problems in the ministry’s work:

“A number of contracts for construction of housing for dismissed officers have been broken, draft orders for next year for financial incentives for serving officers have been frozen.  And there’s simply no one to sign the certification of budget execution for this year for the country’s highest leadership.  I simply can’t recall such disorder in my 30 years of service.”

The source says Defense Minister Serdyukov’s report to the President on the fulfillment of orders to provide apartments to servicemen has also been postponed for an undetermined period.

Leaving to work for the new Moscow mayor seemed like a good opportunity for Chistova.  Or did she figure this was an opportune time to escape some blame for problems in the military’s budget? 

Chistova’s predecessor Lyubov Kudelina served for a long time, but left in early 2009 because, according to Viktor Litovkin’s source, she objected to the Defense Ministry pressing some officers to resign short of receiving their severance benefits, and because Serdyukov refused to ask for extra money to pay for military reform.

It seems odd that someone as well-connected in government finance as Serdyukov can’t find a deputy for this.  It would seem he has cronies already brought into the Defense Ministry that he could just order to take the post.  Maybe the refusenik accountants know it’s a bad place to be right now.

We should also recall that Serdyukov was brought to the Defense Ministry in early 2007 reportedly for the express purpose of bringing financial order to the armed forces.