>From RIA Novosti

Argumenty i Fakty, No. 32

August 1997

ARMY WILL HAVE TO BE DISBANDED DUE TO LACK OF MONEY

By Alexander KONDRASHOV, Vitaly TSEPLYAYEV

The appeal of the officers from the four military units of the Novosysoyev garrison in the Far Eastern military district describe the situation in the army in the following way: "Wages are delayed for 4-5 months, cash compensation for food rations and business trip expenses has not been paid for 2-3 years and the arrears of payment for vacation travel expenses and also child allowances constitute 6 months and more."

The report of the Russian Defence Ministry on the state of the moral and psychological atmosphere in the army as of July 14, 1997 reveals that 92% of polled servicemen have lost any hope to get their due wages. Only 8% of officers and warrant officers believe that since the young reformers have kept their word to pay out pensions, they will also settle wage arrears with the army in time.

However, it will be far more difficult to pay wages to officers than to pay pensions to senior citizens. Wage arrears are enormous. In actual fact, the Defence Ministry is a bankrupt.

From January 1996 to July 1997 the debts to suppliers alone had risen from 9 to 42 trillion roubles. For the first half of the year, the Armed Forces received only 25% of the funds endorsed by the law on the state budget. Taking into account the federal budget cuts, the army has not received 75% of their money.

Chief army financier, lieutenant-general Georgy Oleinik said that by the middle of July the arrears of wages for servicemen and civilian personnel had risen to 8.1 trillion roubles. The debts under social and compensation payments (ration money, child, medical and other allowances) will make up another 5.3 trillion roubles. This will amount to a total of 13.4 trillion roubles. However, the Finance Ministry has promised to pay only 4.56 trillion.

It is true that the army has not been properly financed. But it is also true that even the allocated funds are often used for other purposes. For instance, last year due to efforts of the Procurator's Office the Moscow garrison alone recovered damage in the amount of 2.56 billion. In the Volga Area Military District the Accounts Chamber revealed illegitimate expenses to the tune of 4.1 billion roubles. In the central bodies of the Defence Ministry violations amount to 3.3. billion. However, this is a small loss as compared to the losses of the budget in the sphere of military education. According to the Accounts Chamber, for the past two years every third student of a military school was discharged. However, the state spent 1.1. trillion roubles for their education.

The system of military trade is really a black hole for finances. In 1994 as many as 120 billion roubles were channeled into it for food deliveries to the North. The money which was scattered among firms and small companies cannot be found to this day. Incidentally, the results of most checks carried out in the military department receive the classification of "strictly confidential" documents and remain inaccessible for journalists.

And what about counting the cost of unnecessary lands, enterprises, social, cultural and trade facilities owned by the defence department? According to data of Argumenty i fakty, a closed session of the working group of the Defence Council cited the figure of 100 trillion roubles.

It will be a miracle if a lieutenant somewhere in a remote area in Transbaikalia or the Far East receives all his due wages by September 1. But while this money travels the way from the Finance Ministry to the Defence Ministry and then to various arms and armed services, and subsequently settles in the headquarters of various military districts, armies, divisions and regiments or, God forbid, is placed on accounts of commercial banks at an interest, it will reach junior officers at best by the New Year.

---------------------

Johnson's Russia List

#1112

10 August 1997

djohnson@cdi.org