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From 1 October Edict of the RF President of 30 Sep- Order To establish, from 1 October tember 2004, # 1258, On the Issues of of 30 October 2004, # 345, On the onwards, a monthly money bonus for the Money Allowances of Servicemen Money Allowances of Individual Cate- servicemen enlisted for military service gories of Servicemen in the central apparatus of the Ministry The document has become invalid. of Defense, according to the rates listed in the annex (from 2.6 to 10.5 as much as the rate of payment for a military position).

DG Order To establish, from 1 October of 31 December 2004, # 905, On the of 5 February 2005, # 33, On the onwards, for servicemen enlisted for Introduction of Alterations in the De- Establishment of the Rates of Payment military service under contracts, the cree of the Government of the Russian for Military Positions, for Servicemen rates of payment for a military position Federation of 26 June 2002, # 462. Enlisted for Military Service under in accordance with Annex # 1.

Contracts.

The document has become invalid.

From 30 June DG Order To increase by 1.15 times, from 1 Januof 13 December 2005, # 759, On the of 30 June 2006, # 200, On the Con- ary onwards, the rates of payment for Increase in the Money Allowances of firmation of the Procedure for Granting military positions and the rates of payServicemen Enlisted for Military Ser- Money Allowances to Servicemen of ment for military ranks for servicemen vice under Contracts. the RF Armed Forces. enlisted for military under contracts.

From 1 January DG Order To increase by 1.1 times, from 1 Januof 30 December 2006, # 857, On the of 29 January 2007, # 33, On the ary 2007 onwards, the rates of payment increase in the Money Allowances of Increase in Some Categories of Money for military positions and the rates of Servicemen Allowances of Servicemen of the RF payment for military ranks for serviceArmed Forces. men enlisted for military service under contracts.

From 1 December DG Order To increase by 1.15 times, from 1 Deof 1 December 2007, # 837, On the of 10 December 2007, # 510, On the cember 2007, the rates of payment for Increase in the Money Allowances of Increase in Some Categories of Money military positions and the rates of payServicemen. Allowances of Servicemen of the RF ment for military ranks for servicemen Armed Forces. enlisted for military service under contracts.

From 1 February DG Order To increase by 1.09 times, from 1 Febof 31 January 2008, # 35, On the of 1 February 2008, # 35, On the ruary 2008 onwards, the rates of payIncrease in the Money Allowances of Increase in the Money Allowances of ment for military positions of serviceServicemen in the Year 2008 Servicemen of the RF Armed Forces men enlisted for military service under contracts.

In our estimates of the consequences of the adopted administrative decisions, we have taken into account the rates of money allowances and regular bonuses granted to servicemen. We have not taken into account the bonuses for special types of work (parachute jumps, decommissioning of ammunition, etc.) and the bonuses paid to a limited number of persons (those with academic degrees, etc.). The bonuses taken into account include the following types: the long service bonus; the efficiency bonus for excellent fulfillment of military duty (in the amount of up to 3 allowances per year); the lump-sum money reward for the conscientious fulfillment of service duties (by the results of a calendar year in the amount of 3 money allowances);

and material assistance (in the amount of 2 money allowances). The emphasis was placed on the following bonuses: for the special conditions of combat training for the 42nd Guards Mechanized Infantry Division; for the special conditions of combat training for military units of permanent readiness; the monthly financial inducement for servicemen enlisted for military service in the central apparatus of the RF Ministry of Defense; the monthly financial inducement for the rest of servicemen enlisted for military service not in the central apparatus of the Ministry of Defense.

A stimulating bonus not depending on the basic rates of allowance and thus mainly oriented to the interests of the low-paid categories of servicemen was introduced only once, at the moment of adoption of the Federal Target Program in 2003. In the 2004 08 period, the size of money allowances of servicemen was increased by simultaneously rising, by an equal percentage, the rates of payment for military positions and the rates of payment for military ranks for all servicemen. Thus, this initiative was oriented to the interests of highly-paid servicemen.

For the years 2002, 2006, and 2008, the process of growth in the money allowances (MA) is illustrated in Figure 1. Before the year 2003, the size of MA was represented by one line of the basic MAs dependence on the tariff rank, while starting from the time of setting the central apparatus apart and of the later division of military units into those placed into the category of permanent readiness and those not placed into it, these dependencies have been divergent.

MA in MA in other forces in MA in CO [central apparatus] of RF Ministry of Defense in MA in units of permanent readiness in MA in 42nd Mechanized Infantry Division in MA in other forces in MA in CO [central apparatus] of RF Ministry of Defense in MA in units of permanent readiness in MA in 42nd Mechanized Infantry Division in Fig. 1. Stage-by stage changes in the sized of the money allowances of servicemen of various categories (according to the tariff rank) in 2002, 2006, and 2008.

When analyzing the dependencies represented in Figure 1, it is possible to come to a conclusion that the method for increasing the money allowance, which have been practiced in recent years, has one principal flaw. The point in question is that by using this method it is simply impossible to considerably increase the money allowances of servicemen filling the positions from the 1st to the 10th tariff rank. At the same time, the money allowances of senior officers have been significantly growing with every new stage of their rising. And the case in point is not just the difference between the sizes of the money allowances paid to soldiers and those paid to officers.

There has also emerged an enormous gap between the money allowances of the officers serving in the central apparatus of the Ministry of Defense and those of the officers serving in the RF Armed Forces. It is becoming a destabilizing factor in the officers milieu. And with each rated increase in the size of money allowances, which is extended to all servicemen simultaneously, this gap becomes ever larger. This is also evidenced by the relationship between the maximum size of the money allowance (in our estimates, the 49th tariff rank, the military position army general) of a serviceman enlisted for military service under a contract and the minimum size thereof (the 1st tariff rank, the military rank private). In 2002, this ratio was 5.6; in 2006 11.24; in 2008 9.63. The latter fall is explained not by a changed methodology for increasing MA, but by the inclusion of ration payments, which are the same for everybody, into the payment for military rank.

This trend is becoming ever more pronounced. By Order of the Ministry of Defense of 1 July 2007, # 1459, for the staff of the central apparatus of the RF Ministry of Defense, the sums of additional payments to servicemen and those of bonuses to civilian employees and workers shall be determined by the results of their fulfilling their service duties, and shall not have the upper limits.

This is a real breakthrough of sorts so far as the system of material incentives for servicemen is concerned. Sometimes one could get an impression that people in the central apparatus of the RF Ministry of Defense do not know the size of the money allowance received by a serviceman in ordinary forces (not in the Arbat Military District, or in the units of permanent readiness, or in Chechnya). Judging from the information posted on the forum of the Servicemen Mutual Assistance website23, in her interview to the newspaper The Red Star of 24 November 2007 24, RF Deputy Minister of Defense L. Kudelina pointed to the absolutely incredible figures of money allowance, in her words, received by lieutenants in the Armed Forces. Visitors to the site demanded that she should either give explanations with regard to the procedure for the calculations which makes it possible for lieutenants to receive salaries exceeding those of the colonels who have served for more than twenty years, or publish an official disclaimer of this information, while informing on this all the journalists who were present in the press-club off the RF Ministry of Defense when Mrs. Kudelina was delivering her speech.

Our estimates indicate that the indignation of these servicemen is justified. Especially disastrous is the situation with the money allowances of servicemen of the lower tariff ranks. Of course, it is absolutely evident that the money allowances of servicemen of the 1st to 5th tariff ranks (classifying precisely those positions which are be filled under contracts by soldiers and sergeants) have grown both in absolute and relative terms. However, this growth should be compared with the state of affairs on the labor market, that is, with the average wage in the country. The graphs in Figure 2 illustrate the size of the money allowances of soldiers and junior officers platoon commanders (the 10th tariff rank) in comparison with the national average (the data of Rosstat and the periodical press) for the years 2003 08.

.03 .03 .04 .04 .05 .05 .06 .06 .07 .07 .Monthly national average MA of soldier in other forces MA of soldier in units of permanent readiness MA of soldier in 42nd Mechanized Infantry Division MA of platoon commander in other forces MA of platoon commander in units of permanent readiness MA of platoon commander in 42nd Mechanized Infantry Division Figure 2. The money allowance of soldiers contractees and lieutenants - platoon commanders by comparison with the national average.

http://vsud.ucoz.ru/forum/15-792- Apalkov, Iu. Armii sotsialnyi proryv. [The Army needs a social breakthrough] // Krasnaia Zvezda [The Red Star], 24 November 2007.

The graphs demonstrate that, after all, in the period under consideration the money allowances of servicemen filling the afore-said positions (especially of those who do not serve in the units of permanent readiness and in Chechnya) failed to approach the national average. And moreover, for many categories of servicemen this gap is further increasing.

Therefore the method of rising the money allowances of servicemen by way of uniform rated increases really cannot resolve the problem of attractiveness; moreover, it widens the gap between the various categories of servicemen to a socially dangerous magnitude. To make things worse, this method is the matter not only of our past or present the period of its application has already been prolonged in the budget until the year 2010. It means that the resolution of the most acute problem of increasing the attractiveness of military service is postponed in order to safeguard the interests of highly paid servicemen.

The drawbacks in the formation of the money allowances of servicemen were recently discussed at the outside meeting of the Public Council at the RF Ministry of Defense, which took place in Severomorsk. As it was justly noted there, the existing practice of annually rising the rates of payments for military positions and military ranks by 10 15% at the beginning of each year can, in fact, compensate only for inflationary processes, and cannot exert any actual influence with regard to the improvement of their socio-economic situation25.

Further development of the military-social sphere must be carried out in accordance with the adopted Strategy for the Social Development of the RF Armed Forces. The Strategy envisages growth in money allowance. However, the text of this document gives rise to a number of questions. The following two are the major ones.

1. It was declared in the editorial foreword to the document published in the newspaper The Red Star that military contractees are becoming the countrys middle stratum, and the money allowance of a soldier (or a sailor) of the first tariff rank will exceed the national average by 25 percent. The message is delightful.

But when will it be achieved By the year 2020 And what about nowadays 2. A careful reader will not fail to notice that in the body of the document proper, the essence of the above-quoted passage is stated differently than in the foreword. The text indicates that the indicator of the problem resolution will be the achievement of such a situation when the size of the money allowances of servicemen will exceed by 25 percent the average wages of workers in the branches of the countrys economy. It is not specified which servicemen are to enjoy these money allowances soldiers, junior officers, or senior officers. Or will it once again be some average serviceman As has already been shown, the size of money allowance varies so widely that to speak in terms of average money allowance would be simply unfair. Especially if one considers the issue of making military service attractive to those citizens who are aware of the situation on the labor market.

The conclusion: as it is stated in the Strategy, the size of the money allowances of servicemen will exceed the national average only by the year 2020. This date appears to be too remote; in fact, the attractiveness of military service under contracts must be increased urgently and without delay.

State corporations: peculiarities, risks, prospects Iu. Simachev, M. Kuzyk The article adresses the issues of forming state corporations in the narrow sense of the word as an organizational legal form, the use of which was especially typical of the year 2007. Special attention is paid to an analysis of the risks and the blank spaces associated with the process of creation of state corporations in 2007 08.

Before 2007, it was only on two occasions that the State had taken advantage of the opportunities to create state enterprises. In 1999, simultaneously with the introduction of the organizational legal form state corporation, it established the state corporation The Agency for Restructuring Credit Institutions. In 2003, Russia adopted the law envisaging the creation of the state corporation The Agency for Deposit Insurance.

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