Russian Government Developed Defense Budget Cutdown Project

14.02.2012 Russian Government began debates on a draft amendment to Strategy 2020; the changes are related to restructuring of the federal budget's disbursement section, writes Vedomosti on Feb 14. According to the newspaper referring to sources in the government, it is supposed to curtail expenses for security agencies, national defense, and law enforcement authorities. State Arms Program may be included in the budget cutdown as well. Volume of reductions could make up to RUR 700 bln per year.

Funds released in such way are to be appropriated for financing of transport system, education and public health service. First of all, it is planned to cut down expenses by reducing number of administrative agencies, liquidation of same-duty units, and civilianization of a part of servicemen. Except for security agencies and defense industry, financing of budget items "National Economy" and "Municipal Housing Economy" may be also curtailed.

Ministry of Finance holds the toughest stance suggesting to reform superannuation system and improving targeting of welfare payments. Thanks to that, funds equal to 0.8% of GDP would be released. In addition, the ministry offered to cut costs of arms procurement program and law enforcement authorities on 1.2 % of GDP.

According to a defense ministry's official, Vice Premier Igor Shuvalov was tasked to find the way for cutting down expenses provided by budget items "National Defense" and "National Security and Law Enforcement" till 2015. Among possible variants, the government considers curtailing, prolongation, or full shutting-down a number of arms procurement programs and staff reductions in Armed Forces and Internal Troops. However, the spending cutback project will not affect nuclear force development programs.

Curtail of defense budget is quite feasible, says the military source of Vedomosti. In particular, it is possible to waive procurement program of French Mistral-class landing ships, reduce number of Project 955 Borei strategic submarines planned for construction, and decommission Project 1144 Orlan nuclear-powered cruiser Petr Veliky. The final decision on cost cutbacks can be made only by the president.

Recall that during debates and adoption of State Arms Program 2011-2020, the then finance minister Alexei Kudrin was speaking against such considerable military spendings. As is believed, that was the reason for his dismissal.