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- in undermining the tentative achievements in the States demographic policy (because of the drafting of young fathers), as it is absolutely clear to everybody that a compensation in the amount of 6 thousand rubles / month per every child whose father will be drafted cannot be considered as adequate, bearing in mind that the average wage in the country approaches 14 thousand rubles per month;

- in reducing the personnel potential of defense industry (because of the drafting of the young workers with the most sought after specialties, who used to be granted deferrals, and the drafting of young engineers who have oriented themselves to work in the DIC;

- in increasing the intensity of the brain drain (because of the drafting of the majority of graduates from higher educational establishments irrespective of their specialties, who are afraid of army service as such, in addition to the potential resulting loss of qualification and career prospects).

There is one real achievement among the socially significant results of the FTP: according to the assurances of high-rank officers, no draftees are serving in Chechnya. However, the legal possibility of servicemen enlisted for compulsory military service being used in combat action in time of peace had not been eliminated. At least in the existing Military Service, Item 3 of its Article 2 still reads: Servicemen enlisted for compulsory military service can be dispatched (including within a subunit, unit, or formation) to perform tasks in conditions of armed conflicts (or for taking part in combat action) after their having served for no less than six months and after their having been trained in military occupation specialties.

A similar situation exists with regard to many other factors determining societys dissatisfaction not only with the current system of manning, but also with the general state of affairs in military units. The reasons for citizens discontent and the facts of violation of their rights are as numerous as ever. It is typical that in the period after the year 1999, the number of servicemen who perished outside of the zones of combat activity (non-combat casualties) was approximately equal to that of combat casualties.

Thus, the military personnel policy, already demonstrated in the period of the FTPs implementation, could be beneficial only to criminal structures who profit on the deficiencies of the system of manning the army and on the citizens fear of military service.

After the year 2007, it could lead the country to a social explosion.

There is no need for any new recommendations to be invented in this connection. One has simply to recall some of the existing ones:

1. To discuss the results of the FTP at an open joint meeting of the Interdepartmental Commission, created to analyze the FTPs progress, and representatives of all nongovernmental organizations who capable of presenting independent estimates of the FTPs results and of the state of affairs in regard to compulsory and contractual military service. It is important that the participants should be on a timely basis provided with complete financial and economic information on the FTP and its previous substantiation. Only after all the deficiencies of the previous FTP are taken into consideration, a new one can be initiated.

2. To urgently increase the level of money allowance of all contractees, from soldier and sailor upwards (and not only in military units of permanent readiness), to a level by 20% higher than the average wage in the country. This level should be then sustained on the annual basis. It should be noted that the afore-said level has remained stable since the 2001 survey Section Institutional Problems conducted by the All-Russian Center for Public Opinion Studies and referred to in the IETs previous publications. The results of surveys carried out by the Russian State Insurance Company have confirmed this conclusion134. The size of a just wage for workers of budgetfunded institutions is estimated in accordance with the age and the level of well-being of the respondents. Young people aged up to 26 years are sure that private contractees should get the highest wages (23,400 rubles). Female respondents also voted for contractees (26,300 rubles). The most generous wages were suggested by Muscovites (up to 35,000 rubles), while the lowest (from 13,000 rubles upwards) ones by residents of small towns.

The money allowance of officers, warrant officers and midshipmen should also be accordingly increased. It should be necessary to simultaneously reduce the number of troops, mainly in those military units that are not included in the category of permanent readiness or are not on stand-by duty.

3. It is necessary to urgently revise (in cooperation with non-governmental organizations, which is absolutely essential) the legislative base of military service, and to eradicate its defects concerning the draft procedure and the procedure for the enrollment of contractees, as well as the terms of contractual and compulsory military service. It should be laid down in a law that the only purpose of military service in time of peace should be the acquisition, by a serviceman or woman, of a military occupation specialty necessary for his or her further service in regular forces and for his or her being included in military-trained manpower resources (or reserve), if the military-political situation in the world would require it to be sustained at a corresponding level.

4. It is equally crucial to lose no time in initiating an open discussion of the main directions of RF military-technological policy in the part concerning the rational use of know-how and dual-purpose technologies in the interests of the development of the civil economy and for the sake of achieving all types of beneficial economic effects, including the military, economic, and commercial ones.

5. The recommendations regarding the problems faced by the military budget also remain unchanged.

It is high time to coordinate the RF budget classification with the mission, objectives and tasks of the RF military organizations activity, and to establish a strict correlation between the indices characterizing this activity and the amounts being spent on their implementation. Without this, as far as the prospects for the future are concerned, RF military expenditures will be implemented without any control at least during the period until the year 2010.

RF military expenditures will continue to be overclassified in excess of any reasonable norms and, most importantly, this will be done with violation of the federal law on State secrets. This corruption-generating defect of Russian budgetary system will surely exert a very negative influence not only of the military economy of the Russian Federation, but also on its national economy as a whole.

Of course, the actual military expenditures of the RF, if estimated by the international standards of military expenditures of states (it is not without interest that they are acknowledged by Russia), indeed exceed the level, in percentage points, of GDP as shown in the budget and as declared by the military-political leadership of the RF. This situation by no means improves the image of the State in anybodys eyes.

Vedomosti. 2007. 19 December (No. 240).

RUSSIAN ECONOMY IN trends and outlooks So far as the issue of manning is concerned, equally detrimental is the fact that among all G-8 countries, compulsory military service is preserved only in the RF and Germany, although the term of service in Germany is only 9 months, while the level of support for every serviceman, including those who are enlisted for compulsory military service, is better than that enjoyed by the Russian contractee. The same is true of the conditions of military service.

As regards the declared advantages of the three-year planning of the budget, especially that established for the military organization, the results already visible at end of 2007 (after the final approval and the subsequent publication of the budget) has shown that the budget needed adjustment even for 2008, the first of the three years under consideration. And this indeed happened in early 2008 with regard to the expenditures on combat training, the money allowance of servicemen, and, correspondingly, the pensions of former servicemen.

5.6. Municipal Reform: Accumulation of Problems and Search for Solutions 5. 6. 1. Changes in the Federal Legislation in In 2007, the process of revision of the federal legislation on local self-government continued. In sum, there were adopted 9 federal laws, which introduced amendments to Federal law No. 131 FZ of October 6, 2003, On the general principles of the organization of local self-government in the Russian Federation and to certain articles of sector specific laws regulating the powers vested in the bodies of local self-government. At the same time, it should be noted that the majority of amendments aimed at the division of powers between different levels of government was adopted in the last quarter of 2007. This development was in line with the tradition, in accordance with which the most significant amendments pertaining to this sphere were adopted at the very end of each year, already after the budgets had been approved, thus creating substantial difficulties for regions and municipal entities as concerned their plans pertaining to the financing of powers newly vested in them.

The major avenues of development of the federal legislation concerning local selfgovernment in 2007 were the following:

- The settlement of the issues pertaining to the division of powers and - Introduction of changes in the economic and financial principles of local self-government.

Besides, some updates were made to the territorial and organizational principles of local self-government, as well as the laws regulating the functioning of local self-government in the territories with special status.

In the sphere of division of powers, the most significant changes and updates were aimed, on the one hand, at a more precise determination of powers vested in the bodies of local self-government and related to the settlement of issues of local importance already vested in municipal entities, and, on the other hand, at the expansion of the sphere of competence of municipal authorities.

There were more precisely determined the powers of local governments relating to four issues of local importance vested in the municipal tier by law No. 131-FZ, i. e. the following issues:

Section Institutional Problems - Organization of delivery of health care to the population135;

- Implementation of primary measures aimed at fire protection of the population centers being parts of settlements and city okrugs136;

- Creation of conditions facilitating development of small and medium sized businesses137;

- Carrying out of road related activities as concerns motor roads of local importance138.

The sphere of competence of municipal entities was enhanced via the introduction of additional rights and powers of the bodies of local self-government. For instance, in the sphere of public health care bodies of local self-government were granted the right to create emergency medical services with the structure of health care institutions at the expense of the revenues flowing in local budgets. Besides, there was introduced the power of the bodies of local self-government to organize training, retraining, and professional development of elected officials of local self-government, members of elected bodies of local self-government, deputies of representative bodies of municipal entities, as well as municipal officers and municipal employees139. There were also enhanced the possibilities to delegate state powers to the municipal level.

In the sphere of territorial principles of local self-government, there were elaborated certain issues, which previously had not been regulated by federal laws. For instance, there were envisaged certain procedures governing the alteration of limits of city okrugs by the way of inclusion into them of urban and rural settlements, as well as the procedures related to the liquidation of municipal entities in the territories characterized by low density of the population and hard to reach areas. In the process of settlement of the issues related to the inclusion of settlements in the composition of city okrugs there was streamlined the procedure permitting to take into account public opinion: it was manifested via decisions of representative bodies, whereas with respect to the majority of other types of transformations concerning settlements and the limits thereof public opinion should be manifested via voting or at the meetings of citizens.

In the sphere of organizational principles, the amendments, introduced in 2007, limited the opportunities of the heads of local administrations, deputies, exercising their powers on an ongoing basis, members of elected bodies of local self-government, and elected officials to engage in paid activities140.

The amendments to the sector specific laws were introduced by article 6 of federal law No. 230-FZ of October 18, 2007, On the introduction of amendments to certain legislative acts of the Russian Federation in relation to the improvement of division of powers (hereinafter referred to as law No. 230-FZ).

The amendments to the sector specific laws were introduced by article 7 of law No. 230-FZ.

The list of powers vested in the bodies of local importance was set by federal law No. 209-FZ of July 24, 2007, On development of small and medium sized businesses in the Russian Federation (entered into force on January 1, 2008).

138 The list of powers vested in the bodies of local self-government was set by federal law No. 257-FZ of November 8, 2007, On motor roads and road related activities in the Russian Federation and the introduction of amendments to certain legislative acts of the Russian Federation. The same law has changed the definition of the issue of local importance, which had been earlier defined as the maintenance and construction of motor roads for public access, bridges and other transport engineering facilities within the limits of populated centers of the settlement.

The amendments to article 17 of federal law No. 131-FZ introduced by article 26 of law No. 230-FZ.

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