By Martin Nesirky

MOSCOW, July 17 (Reuter) - Russia's decision to grasp the potentially dangerous nettle of military reform underlines the belief of its revamped cabinet that without it, economic change cannot succeed.

"This is absolutely essential," said Andrei Piontowsky, head of the Centre for Strategic Studies in Moscow. "The Soviet armed forces existed to prepare for World War Three. Just from an economic point of view Russia cannot support such an army."

President Boris Yeltsin announced the military shake-up from his northwest Russian holiday retreat on Wednesday, issuing a series of decrees on merging branches of the vast armed forces, slashing troop numbers by 500,000 and holding down Defence Ministry and general staff administration costs.

"The president has decided he can no longer treat the army with a course of medication and has gone for the scalpel," NTV television commented.

Military analysts feel Yeltsin finally means business after years of false starts. But they say there is still not enough detail, not least on where the cash will come from to dissect and reshape the once-mighty but now demoralised armed forces into a smaller and professional outfit of 1.2 million men.

Some Western and Russian experts even feel the Kremlin has been too hasty and piecemeal rather than too slow off the mark.

"The president is pushing the pace. It's not the way to do it," said Alexander Zhilin, a former military man who is now a commentator at the weekly newspaper Moscow News. "No one can explain to me how the state will cope with hundreds of thousands of officers being paid off. It is a very dramatic situation."

No one is predicting widespread military unrest at this stage but they say half-considered plans could irritate rather than placate middle-ranking officers who stand to lose most, and could lead to a "hot autumn" in a nascent market economy already saddled with vast domestic debts and social inequalities.

Dmitry Trenin, a defence analyst at the Carnegie Endowment for International Peace, said there was a clear pattern emerging that started with Moscow paying off arrears to pensioners.

The government, spearheaded by dynamic first deputy prime ministers Anatoly Chubais and Boris Nemtsov, then announced it would pay wage debts to the armed forces by September and to other public sector workers by the end of the year.

"The reformers have agreed that without military reform, the whole structure of reforms and the progress achieved so far may be in danger," said Trenin. "Chubais and Nemtsov are not necessarily interested in military matters but they see this as a key part of the total reform agenda."

While the government sees the military reform as vital for market changes, for Yeltsin it is a political must. The ex-Soviet army has been disgruntled for too long.

A hasty withdrawal from Eastern Europe, a humiliating defeat at the hands of Chechen separatists, NATO's expansion towards Russia's borders, infighting and corruption among the top brass are all too much even for a patient Russian soldier.

It is small wonder that Yeltsin, who has an unerring ability to sniff out danger even before it materialises, has publicly announced that military reform is now his top priority.

Yeltsin's latest military decrees -- as yet unpublished -- will be supplemented by next Friday with plans for those branches of the armed forces so far untouched, Defence Council Secretary Yuri Baturin told Ekho Moskvy radio on Thursday. Only after that would an overall concept be finalised.

"Somebody seems to have decided 'let's go with what we've got'," said one Western diplomat.

Piontowsky said he believed a major unresolved element was the lack of transparency in the defence budget, but that he expected the State Duma lower house of parliament to be presented with much more detail when it reconvenes in September.

Defence spending for 1997 was originally set at 88.3 trillion roubles ($15.3 billion) out of total spending of 530 trillion roubles. But these sums have since been sharply reduced by budget cuts and officials say the military have so far received only 22 trillion roubles.

Zhilin said other drawbacks were what he saw as a poorly-defined view of Russia's geopolitical role in the post-Cold War era and insufficient planning for a safety net for officers who will lose their jobs.

But if there are differences on the approach, all seem to agree military reform is unavoidable if Russia is to succeed.

"They have to grasp the nettle," said one Western military expert. "But it's a big nettle. Someone is bound to get stung."

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Johnson's Russia List

#1059

18 July 1997

djohnson@cdi.org