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A socioeconomic estimation of the annulment of a number of draft deferments N. Kardashevsky This publication represents a continuation of the description of results of logical - heuristic analysis and mathematical modeling of reform of the RF military organizations recruitment system. In particular, one of its key aspects is discussed the socioeconomic impacts of the annulment of a number of draft deferments formerly granted to RF citizens.

By late 2007, not only the concepts proper, but also certain numerical indices have at last become clearly determined, which now makes it possible to more reliably estimate the consequences of the annulment of a number of draft deferments for RF citizens (draftees, servicemen, and their families).

It should be reminded that from 1 January 2008 a federal law will come into force whereby the period of conscription service is to be shortened to 1 year. Some of the consequences of the adoption of this law and of the overall results of implementing the program of a switchover to a new conscription system have already been estimated by the IETs specialists27.

According to the RFs top military officials, in order to maintain the current manning level it would be necessary to increase conscription by one and a half to two times. This can be explained by the following.

During the materialization of the Federal Target Program (FTP) designed to implement the switchover of the permanently combat-ready troops to military service by contract, it was found out that the payments additional to money allowances were low. This produced difficulties when attempts were made to man these troops by contract on a voluntary basis. And even these meager payments were not granted to the other military units, which gave rise to an outflow of the previously contracted persons from the units not included in the category of permanently combat-ready troops. As a result, the overall number of servicemen on contract turned out to be less than the planned figures. As a consequence, it was impossible to adequately man the rest of the armed forces while preserving intact the existing system of draft deferments. Therefore it was decided that some of the deferments should be annulled.

The second reason for the annulment of draft deferments is the negatively vectored demographic situation in this country. Until 2012 the number of young males reaching the age of 18 years will be diminishing every year due to the declining birth rates in the late 1980s and the early 1990s.

As will be shown later, there also exist other, less obvious reasons.

The most painful outcome for society will be the annulment of a number of draft deferments on social grounds. Thus, from 1 January 2008 onward, the army will be drafting those citizens who have disabled relatives or elderly parents requiring constant care, or who have children aged under three years, or wives expecting the birth of a child. While the first two types of deferments - in order to provide care to disabled relatives or elderly parents are entirely welfare-related and have no explicit long-term demographic and socioeconomic consequences, the last two deserve special attention. As shown by historic trends in the diagram, in each half-year approximately 170,000 persons were drafted in 2002 - 2005 (for the period of two years) and approximately 130,000 persons (for the period of one and a half years) until recently. Specifically, according to the RF Presidents edict, in the second half-year of 2007 a total of 132,350 persons will be drafted28.

Tsymbal V., Kardashevsky N. The socioeconomic consequences of reform of the RF military organizations recruitment system // Economico political situation in Russia. 2005. August. P. 3542.

http://www.iet.ru/files/text/trends/08-05.pdf Tsymbal V., Kardashevsky N. The positive changes in the economic backing for Russias military organizations switchover to a new recruitment system // Economico political situation in Russia. 2005. May. P. 3745. http://www.iet.ru/files/text/trends/05-05.pdf Edict of the President of the Russian Federation of 30 September 2007; see Rossiiskaia gazeta [The Russian Gazette], No 4481 of 2 October 2007.

It is especially important to note that the number of persons reaching the conscription age in all the past years was nearly three times as high as the number of those drafted. In other words, one in every three males of the conscription age was serving in the army. Those citizens who were not drafted, while being aged between 18 and 27 years, remained (or were registered as) part of the so-called draft contingent, thus enabling some of the top military officials (on the basis of an incorrect comparison of the number of the actual draft with that of the draft contingent instead of the inflow of conscription-age persons) to insist that only one-tenth of all young people serve in the Armed Forces.

Soon the situation will change dramatically.

Draft (thousands of persons) 700,600,500,400,300,202198 213212 209210 217 175 200,100,0,2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Draft between ages of 18 and 23 yars Draft between ages of 23 and 27 yars Reaching age of 18 years.

It should be noted that approximately 30 % of the persons reaching the conscription age are recognized as unfit for military service for health reasons, and approximately 50 % are granted draft deferments. As declared by representatives of the Ministry of Defense, this type of deferment will be preserved for a certain period of time. But, evidently, in such a case, the hunt for the graduates of higher educational establishments from the moment of their graduation and until they reach the age of 27 years will be spurred up.

Due to the increased demand for draftees after the switchover to a one-year-long period of military service, there will clearly be a deficit of draft contingent. Besides, during the next two or three years the entire reserve of the previously accumulated draft contingent will be exhausted. In order to maintain the conscription level the Ministry of Defense will be forced to mainly draft persons with higher education.

This circumstance is interpreted by the military administration as a benefit for the army. In a certain sense this is true, because the graduates of higher educational establishments recruited for military service will be equipped with some practical experience and, which is most important, knowledge. But does the army really need them It should be remembered that, according to the new Minister of Defenses report29, beginning with the year 2008, it is planned that the drafted military servicemen should be appointed to military posts which do not require long training. Previously, the Head of the General Staffs GOMU classified these posts as not being important in terms of the combat capacity of military units.

One should add that graduates of higher educational establishments are going to serve under sergeants the majority of whom have no higher education. What kind of relationship may develop between them It would also be reasonable to suppose that, on the other hand, many graduates of higher educational establishments by the moment of their graduation will be coming to grips with their future civilian activity.

Will it be feasible, from the point of view of civil economics, to withdraw them in order to fill minor posts in the army A. Serdiukov. Itogi podvedeny. Zadachi postavleny. [The results have been summed up. The tasks are set up. / A report at the meeting of the executives of the RF Ministry of Defense on 20 November 2007 // Krasnaia zvezda [The Red Star] No 217 of 20 November 2007.

And, finally, the main circumstance. Some of them may well have started, or were going to start their own families, if one considers the programs in support of young families launched by the government in recent years. This will be the moment when the annulment of the draft deferment for persons parenting children aged under 3 years will be felt. This is the contingent of the future draftees to serve as privates in the army, while their families will be receiving money compensations.

The amount of compensation is established by the Federal Law On making changes to the Federal Law On state allowances to citizens with children, signed by President of Russia Vladimit Putin quite recently in October 2007. In accordance with this Law, two types of allowance are to be established. The first one represents a lumpsum payment of 14,000 roubles both at the moment of the birth of a child and when the duration of pregnancy is no less than 180 days. The second one is to be paid on a monthly basis in the amount of 6,000 roubles. And in this connection it is noteworthy that the average monthly wage in this country in 2006 was 10,728 roubles30, having increased by now to the level of more than 13,000 roubles. It is planned that the average wage level will continue to grow.

The payments established by the Law will be covered by subventions from the federal budget. For this item, in the year 2008 the sum of 1,59 billion roubles is earmarked, in 2009 1,7 billion roubles, and in 2010 - 1,81 billion roubles.It should be pointed out that the published materials contain no statements as to whether this type of allowance is going to be taxable by the personal income tax. In 2007 the press repeatedly discussed the situation around the levying of the personal income tax on the allowances granted to foster parents for raising their foster children. But in this case this is not the key point.

By applying simple calculations, one may roughly estimate the number of the young fathers and fathers-to-be earmarked for the army draft in 2008. If one assumes that the number of the births of children is distributed evenly between the fathers age groups, the aggregate expenditures on the payment of the two types of compensations in the year 2008 will be as follows:

14, 000 roubles 12 X + 6,000roubles i X = 1,590 millionroubles., i=Lumpsum Monthly where X is the estimated number of recipients of allowances, and, consequently, the number of children born to the drafted servicemen. Since under existing legislation the fathers of two or more children are free from army draft, the number of children will be the same as the number of drafted young fathers.

By solving a simple equation, we obtain X = 2500 persons per month, the number which, most probably, was applied in the computations. Consequently, if the previously existing draft system (twice a year) is preserved, every half-year 6X = 15 000 of young fathers will be drafted, which is equal approximately to 7.% of the total draft required after the switchover to a one-year period of service. If drafting is to take place once a year (only in spring), the military executives are planning to draft 30,000 persons.

Even if one assumes that there will be no indexation of the allowances (which is quire unrealistic), and that the birth rate of 2008 will remain the same in subsequent years, the forecasted amount of budget expenditures on the allowances in 2009 will be significantly higher than planned - 2,58 billion roubles against 1,billion roubles. A similar situation will be observed in 2010 2,58 billion roubles against 1,81 billion roubles.

These figures are obtained on the basis of an assumption that no indexations will occur. According to the latest forecasts of the World Bank, the estimated inflation rate in 2008 will be 7.5 %32. Then, considering the amount of compensations, the aggregate expenditures on the allowances in 2009 will be as high as 2,77 billion roubles. And in 2010, since the forecasted inflation rate is 6,8 % (according to the RF Ministry of Finance)33, the expenditures will amount to 2,96 billion roubles.

The resulting deficit of the planned subventions in 2009 and 2010 is estimated as being equal to 2,2 billion roubles. The aggregate expenditures in three years will amount to 7,3 billion roubles.

These calculations demonstrate that no adequate substantiation has been provided for the aforesaid budget expenditures. Adjustments will be necessary and the budget will be adjusted accordingly.

Data published by the Federal Statistics Service Vedomosti, 19 October RIA Novosti. 19 November 2007. Section Economics INTERFAKS-AFI of 15 February But how can the socioeconomic miscalculation be corrected Who can provide an answer to the question:

Is it really worthwhile to spend 7,3 billion roubles for the sake of 7.5 % of the total army draft, considering the significant growth of social tension and the potential negative demographic consequences for society of such a policy of manning the army According to our estimations, the compensation payments to the families of young fathers drafted to non-productive military service are comparable with the cost of an increase, by 5%, of the money allowances paid to all the privates and junior command personnel serving by contract. But this will be true if the payments are spread among all. However, if the posts are filled by 30 contracted servicemen, given the allowances in money of 15,000 roubles per month, a total of 5,4 billion roubles per annum will be required, or 16,2 billion roubles in the next three years estimated in current prices. And so, is the State really short of this money The State indeed has the means to cover more decisive incentives to all the contracted servicemen. In order to switch over all the personnel of regular troops to the contractual basis, in addition to the current expenditures, less than 100 billion roubles per annum will be needed, which will constitute only a few per cent of the total current sum of military expenditures. It shouls also be reminded that this years budget expenditure was increased in October by 600 billion roubles. In December one more increase is planned by billion roubles. The RF Stabilization Fund has accumulated more than 3700 billion roubles. So, any talk of a shortage of resources is quite immoral.

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