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5 755

7 124

7 074

8 872

5 092

8 083

8 266

7 818

7 937

7 464

8 065

10 050

* In this line, there are presented the estimated monthly expenditures as per the semiannual report of the RF Government.

It should be noted that on the whole the expenditures for military purposes were conducted rather regularly, although there was observed a gap in the beginning of the year and a peak late in the year. Military expenditures of RF subjects made Rub. 1 billion 28 million in 2003, 56 per cent of these expenditures were for civil defense and 40 per cent were for mobilization preparedness of the economy.

As it was noted in the materials of the preceding annual IET publication, in the end of 2002 there were achieved significant shifts in the declassification of the federal budget for year 2003.

However, an analysis of the reporting data submitted to the RF State Duma revealed that the declassification of a considerable part of the military expenditures achieved in the course of passing of the draft budget through the RF Federal Assembly had no impact on the reporting. First, reports on the execution of declassified targeted items and types of expenditures remained secret (see, for instance, the data on expenditures for maintenance and equipment of MES troops in Table 62), although it infringes on the provisions of the Budget Code.

Second, there was observed the unpunctual preparation of documents confirming the legitimate nature of expenditures, and, therefore, delayed transfers of funds to the financial departments of armed and state security agencies (see Table 65). Not only the fact that the budget execution was unsatisfactory organized in the said agencies (especially as compared with the Ministry of Atomic Energy) draws attention, but also the simultaneous significant exceeding of the budget targets across a number of items, what is reflected by negative values in the Table below. The general picture of the administration of military budget expenditures would not be complete without mentioning the misappropriation of Rub. 14 billion of federal budget funds on the part of the Defense Ministry revealed by the RF Audit Chamber.

Table 65

The share of deficient financial resources in the total amount of financing of military and related expenditures of the federal budget for 2003

Section (subsection) of expenditures

The share of deficient funds, %

3 months

6 months

9 months*

12 months

In the total expenditures





National defense, including:





Development and maintenance of RF Armed Forces





Military program of the Atomic Energy Ministry





Mobilization and extra-military preparedness





Collective security and peace making operations





Ensuring of industries’ activities for the national defense





Law enforcement and state security, including:





Troops of RF Interior Ministry





State security agencies





Border guard service agencies





Military reform





Military pensions





* As concerns the results of the 3rd quarter, there are presented the estimates of the actual execution relative to 9/12 of the amounts of the initial annual budget; the results of the year are evaluated relative to the budget targets as increased in November.

3.8.3. Evaluation of military, economic, and other consequences
of planned measures in the framework of the military reform

The dubious character of the statement made at the meeting in the Defense Ministry with participation of the RF President held on October 2, 2003, that the military reform was completed has been already noted above.

The military reform, or, using the term modernization, which has become more popular since recently, as well as the military development, are complex phenomena. However, the reform of the recruitment system of the RF military organization is the priority, especially for the society. The issue of the military personnel, the question of whose hands would hold weapons of the 21st century, if the soldiers would be able to expertly use such weapons, if they would wish to selflessly defend their homeland are the questions requiring attention and settlement in the first turn.

The RF President, while indicating the priority guidelines of military development at the meeting of October 2, 2003, said that the most urgent task was to improve the principles of recruitment. The RF Defense Minister also paid attention to this issue, however, he did not stressed its priority. The Defense Minister report focused on the more active transition to the new system of recruitment on the contractual basis. This transition was defined as the implementation of the federal target program (FTP) Transition to the recruitment of servicepersons serving on the contractual basis to a number of formation and military units for 2004 till 2007, which was approved by the RF Government on August 25, 2003 (Resolution No. 523).

Item 4 of the RF Government Resolution approving the FTP is of special importance. According to this item, in the 4th quarter of 2003 there should be elaborated a draft federal law setting forth the one year term of the military service by conscription since January 1, 2008. This item was introduced in order to implement the requirements set by the RF President in his address to the RF Federal Assembly and should concern not only the Defense Ministry, Interior Ministry, and FSS, but also other federal executive agencies, where the military service is determined by the law.

Judging by the FTP text, a number of military units transiting to the recruitment on the exclusively contractual (voluntary) basis, should be reduced to the military units of the Defense Ministry, Interior Ministry, and FSS (border troops), which were included in the category of constant combat readiness. According to the published definition of this category it includes formations and military units, which in the time of peace and war should be able to carry out combat missions without taking measures for complementation from the mobilization resources.

The report of S. B. Ivanov, the Defense Minister of the Russian Federation at the meeting mentioned above and the booklet Urgent tasks of development of the RF Armed Forces assess the FTP very positively. For instance, after stressing the necessity of changes in the recruitment system, without which the maintenance of the required level of combat readiness of the RF Armed Forces will not be possible it is noted that the decisions taken recently by the RF Government radically change the situation existing in this sphere.

In connection to such statements, IET has carried out a complex evaluation of expected military, economic, and social consequences of the implementation of the approved FTP. The key results of the research are as follows:

1. As concerns the key military objectives set for the RF military organization, the said FTP was worked out and approved as a program aimed to form elite military formations defined as military units of constant combat readiness in three armed agencies taking part in the settlement of problems arising in hot spots: the Defense Ministry, Interior Ministry, and FSS. Only these military units will transit to the exclusively voluntary principle of recruitment.

In the case it could be assumed that military threats to the Russian Federation are limited only to those emerging from the hot spots, there would be no doubt of the success of the FTP. However, it should be noted that the role played by force methods, for instance, in the Chechen Republic, is diminishing. Second, there are also other military threats. In the case it is assumed that there is also the possibility of emergence not only of hot spots, but also hot territories, water areas, and air and space areas, where military missions should be performed by different types and arms of the armed forces, it turns out that the ensuring of the national military security even in the narrow sense of recruitment to these forces is rather problematic. It should be also noted that these armed forces include a special category of military units on permanent combat alert, the importance of which is not less great than that of the military units of constant combat readiness. However, in the report of the Defense Minister there was no indication of the time, when the issues of the complementation of these military units on the exclusively contractual basis and of rendering them professional character could be settled.

2. The situation concerning the settlement of social problems seems even more vague. The society expected, first, a significant decrease in the terms of military service in the immediate future, and, second, changes in the objectives and conditions of conscription service.

The measures envisaged by the FTP do not explicitly indicate that these expectations will be met.

3. IET has evaluated the probable consequences of the FTP implementation in quantitative terms using imitation and analytical mathematical models. As concerns the methodology, this approach is different from that used in the course of substantiation of the FTP by its developers. First, the evaluations were made not only within the period set by the program (2004 through 2007), but also outside this period, since the consequences (especially social, economic, and mobilization ones) of such programs, as a rule, become clear only in the long outlook. Second, the military units implementing the transition to the new recruitment system were evaluated not separately from other military units, but in the framework of the whole military organization.

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