Putin, the Kremlin power struggle and the $40bn fortune
Luke Harding in Moscow
Friday December 21, 2007
Guardian
An unprecedented battle is taking place inside the Kremlin in advance of Vladimir Putin's departure from office, the Guardian has learned, with claims that the president presides over a secret multibillion-dollar fortune.
Rival clans inside the Kremlin are embroiled in a struggle for the control of assets as Putin prepares to transfer power to his hand-picked successor, Dmitry Medvedev, in May, well-placed political observers and other sources have revealed.
At stake are billions of dollars in assets belonging to Russian state-run corporations. Additionally, details of Putin's own personal fortune, reportedly hidden in Switzerland and Liechtenstein, are being discussed for the first time.
The claims over the president's assets surfaced last month when the Russian political expert Stanislav Belkovsky gave an interview to the German newspaper Die Welt. They have since been repeated in the Washington Post and the Moscow Times, with speculation over the fortune appearing on the internet.
Citing sources inside the president's administration, Belkovsky claims that after eight years in power Putin has secretly accumulated more than $40bn (£20bn). The sum would make him Russia's - and Europe's - richest man.
In an interview with the Guardian, Belkovsky repeated his claims that Putin owns vast holdings in three Russian oil and gas companies, concealed behind a "non-transparent network of offshore trusts".
Putin "effectively" controls 37% of the shares of Surgutneftegaz, an oil exploration company and Russia's third biggest oil producer, worth $20bn, he says. He also owns 4.5% of Gazprom, and "at least 75%" of Gunvor, a mysterious Swiss-based oil trader, founded by Gennady Timchenko, a friend of the president's, Belkovsky alleges.
Asked how much Putin was worth, Belkovsky said: "At least $40bn. Maximum we cannot know. I suspect there are some businesses I know nothing about." He added: "It may be more. It may be much more.
"Putin's name doesn't appear on any shareholders' register, of course. There is a non-transparent scheme of successive ownership of offshore companies and funds. The final point is in Zug [in Switzerland] and Liechtenstein. Vladimir Putin should be the beneficiary owner."
Putin has not commented on Belkovsky's claims. The Guardian put the allegations to the Kremlin but was told Putin's chief spokesman, Dmitry Peskov, was not available.
Discussion of Putin's wealth has previously been taboo. But the claims have leaked out against the backdrop of a fight inside the Kremlin between a group led by Igor Sechin, Putin's influential deputy chief of staff, and a "liberal" clan that includes Medvedev.
The Sechin group is made up of siloviki - Kremlin officials with security/military backgrounds. It is said to include Nikolai Patrushev, the head of the Federal Security Service (FSB), Russia's KGB successor agency, his deputy Alexander Bortnikov, and Putin's aide Viktor Ivanov.
Those associated with the liberal camp include Roman Abramovich, the Russian oligarch and owner of Chelsea football club who is close to Putin and the Yeltsin family. Other members are Viktor Cherkesov, the head of the federal drug control service, and Alisher Usmanov, an Uzbek-born billionaire.
Insiders say the struggle has little to do with ideology. They characterise it as a war between business competitors. Putin's decision to endorse as president Medvedev - who has no links with the secret services - dealt a severe blow to the hardline Sechin clan, they add.
Some analysts have said Putin would like to retire but has been forced to carry on to shield Medvedev from siloviki plotting. Others disagree and say Putin wants to stay in power. On Monday Putin confirmed he intends next year to become Russia's prime minister.
"The siloviki are not at all nice," Yulia Latynina, a Russian political commentator said. Latynina, who hosts a political talkshow on the liberal radio station Ekho Moskvy, was one of the first journalists to draw attention last month to Putin's reported links with Gunvor.
The company is based in Zug, a picturesque Swiss canton known as a bolthole for publicity-shy international businessmen. Gunvor has neither a website nor a Moscow office - but in 2007 posted profits of $8bn on a turnover of $43bn, an astronomic figure, according to industry experts. Like Putin, its reclusive owner, Timchenko, worked in the KGB's foreign affairs directorate. He is said to have met Russia's president in the late 1980s through KGB circles.
Gunvor, which has its head office in Geneva, failed to comment.
Critics say the wave of renationalisations under Putin has transformed Putin's associates into multimillionaires. The dilemma now facing the Kremlin's elite is how to hang on to its wealth if Putin leaves power, experts say. Most of its money is located in the west, they add. The pressing problem is how to protect these funds from any future administration that may seek to reclaim them.
"There's no point in having all this money if you can't travel to the Maldives or Paris and spend it," Elena Panfilova, the director of Transparency International in Russia said.
The first hints of the intra-clan warfare gripping the Kremlin emerged last month, when the FSB arrested General Alexander Bulbov, the deputy head of the federal drug agency, and part of the liberal group. His arrest saw a surreal standoff, with his bodyguards and FSB agents pointing machine guns at each other.
Earlier this month Russia's deputy finance minister, Sergei Storchak - another "liberal" - was also arrested and charged with embezzling $43.4m. He is currently in prison. His boss, Russia's finance minister, Alexei Kudrin, part of the liberal clan, says he is innocent.
But the liberal group - one of several competing factions inside the Kremlin - has struck back. Earlier this month Oleg Shvartsman, a previously obscure businessman, gave an interview to Kommersant newspaper claiming he secretly managed the finances of a group of FSB officers. Their assets were worth £1.6bn, he revealed.
The officers were involved in "velvet reprivatisations", Shvartsman, a fund manager, said - in effect forcibly acquiring private companies at below-market value and transforming them into state-owned firms. These assets were redistributed via offshore companies, he said.
According to Panfilova, the "randomised" corruption of the 1990s has given way to the "systemic and institutionalised corruption" of the Putin era. Members of Putin's cabinet personally control the most important sectors of the economy - oil, gas and defence. Medvedev is chairman of Gazprom; Sechin runs Rosneft; other ministers are chairmen of Russian railways, Aeroflot, a nuclear fuel giant and an energy transport enterprise.
Putin has created a new, more streamlined oligarchy, his critics say. "The crown jewels of the country's wealth have ended up in the hands of Putin's inner circle," Vladimir Rzyhkov - a former independent MP - wrote in Monday's Moscow Times.
Belkovsky - who published a book about Putin's finances last year, and who is the director of the National Strategic Institute, a Moscow thinktank - claims he is confident of his assessment of Putin's hidden wealth. "It's not a secret among the elites,' he said. "But please pay attention that Vladimir Vladimirovich [Putin] has never sued me."
Belkovsky adds that the west has misunderstood Putin and has been distracted by his "neo-Soviet" image. Putin, Belkovsky claims, is ultimately a "classic" businessman who believes money can solve any problem, and whose psychology was shaped by his experiences working in the St Petersburg mayor's office in Russia's crime-ridden early 1990s.
"He is quite sure of this. A problem that can't be resolved with $1bn can be resolved with $10bn, and if not with $10bn then $20bn, and so on," Belkovsky said.
In an interview on Wednesday with Time magazine, which named Putin its person of the year, the president vehemently denied that those inside the Kremlin were corrupt.
Asked whether "some of the people closest to you are getting rich", Putin said: "Then you know who and how. Write to us, to the foreign ministry, if you are so confident. I presume you know the names, you know the systems and the tools.
"I can assure you and everyone who would listen to us, watch us and read us, that the reaction would be swift, immediate, [and] within the prevailing law."
Guardian Unlimited © Guardian News and Media Limited 2007
http://www.guardian.co.uk/russia/article/0,,2230924,00.html
Full Version: Putin, the Kremlin power struggle and the $40bn fortune
Maybe Time is buttering Putin up for a loan.
QUOTE (beasty @ Dec 22 2007, 03:05 AM) 
Maybe Time is buttering Putin up for a loan.
I'd like to collect the vig on that!
QUOTE (TruthTrekker @ Dec 21 2007, 08:07 PM)
I'd like to collect the vig on that!
I'm sure he's big into sharing. I suppose if you risk everything for complete power you'd better have a stash of cash in case things go bad. 40B would buy a small country and a fine bit of firepower.
Putin's Military Might Fails to Keep Pace With His Ambitions
By Ken Fireman
Enlarge Image/Details
Dec. 21 (Bloomberg) -- Russia's military, which once defined its power and is central to President Vladimir Putin's ambitions for global influence, is lagging behind its energy- driven economic boom.
The nation's armed forces remain beset by manpower and morale problems, aging equipment, graft and unfulfilled promises to overhaul their Cold War-era structure, Western and Russian analysts say. While Putin, 55, has increased Russia's defense budget to a level four times greater than when he became president in 2000, it is still less than 6 percent of U.S. spending.
``There is this notion in the West that the Russian army is coming back,'' said Zoltan Barany, a professor at the University of Texas in Austin who published a book this year about the decline of the Russian military. ``They're not back. Things have started to change, but there's a long way to go before they're back, and I don't think they will ever be back like they were.''
A report last month by Moscow's Institute for National Strategy and two other independent research groups underscored the lack of progress. It said defense spending during Putin's tenure had grown only 15 percent after inflation from the 1990s, and that Russia has bought fewer weapons under him because of a ``dramatic rise in corruption.''
Outdated Fears
The analysts said military doctrine was still based on outdated fears of war with the West instead of more realistic threats from China or Islamic terrorists.
Russian and Western news media ``are inflating the myth of an active remilitarization of modern Russia,'' the analysts said. ``This myth bears no relation to reality.''
The gap between Putin's ambitions and his capabilities was evident in August, when he said that regular strategic-bomber flights would resume after a 15-year hiatus. The announcement revived memories of Cold War days, when Soviet and U.S. nuclear- armed bombers patrolled on hair-trigger alert.
The reality turned out to be far different. The new patrols are done mostly by aging Tu-95 ``Bear'' bombers that have turbo- prop rather than jet engines, carry no nuclear weapons and are limited to about one flight a week by budget and equipment constraints, according to Pavel Baev, a military analyst at Oslo's International Peace Research Institute.
A Shrinking Fleet
The resource crunch affects all military branches, analysts say. The Russian Navy now has one active-duty aircraft carrier -- the U.S. has 12 -- and its fleet of strategic nuclear submarines is shrinking as vessels wear out and aren't replaced.
The most modern sub, the 11-year-old Yuri Dolgoruky, was designed as a platform for the Bulava-M long-range nuclear missile. The Bulava failed several tests, raising questions about its future and the sub's utility, Baev said.
While Russian defense industries produce some good-quality equipment, especially fighter planes and surface-to-air missiles, most is sold abroad, said John Pike, director of GlobalSecurity.org, an Alexandria, Virginia-based military research group.
``They're basically playing with the same set of toys that Gorbachev gave them,'' Pike said, referring to Mikhail Gorbachev, the last Soviet leader.
Russia still fields a formidable nuclear arsenal, with 4,237 warheads deployed on 875 missiles and bombers as of July, according to data compiled by the Arms Control Association, a Washington research group. Only the U.S., with 5,914 warheads on 1,225 missiles and bombers, has more.
Repairs Required
Still, 60 percent of Russian missiles have exceeded their service life and half require major repairs, according to a 2005 Defense Ministry report, Barany said. Just 30 percent of the country's fighter planes are combat-ready, he said.
The Moscow researchers said that if present trends continue, attrition will reduce Russia's intercontinental missile arsenal to between 100 and 200 in a decade. Russia's Defense Ministry didn't respond to written questions about the military's capability.
The head of the Russian Strategic Missile Troops, Colonel- General Nikolai Solovtsov, was quoted by the official Itar-Tass news agency Dec. 17 as saying that Russia would be ``compelled'' to maintain the strength of its nuclear arsenal because of U.S. plans to base a missile-defense system in Eastern Europe.
Manpower problems remain acute, although some -- such as chronic late payment of officers' salaries -- have been eased by the budget increases.
Russia's Spending
Aided by a 255 percent surge in oil prices during Putin's eight years in office, Russia's 2007 defense spending was about 821 billion rubles ($33.6 billion), about 15 percent of total government expenditures, according to the London-based International Institute for Strategic Studies. U.S. military spending in 2007 was about $582 billion, or 21 percent of the total federal budget, the institute said.
Russia also suffers from endemic draft avoidance, with as many as nine out of 10 of those in the eligible 18-to-26 age group escaping service. ``If you've got 90 percent draft evasion, those who show up are just too stupid to evade it,'' Pike said. ``Imagine what kind of military you can put together with that.''
Military officials are seeking to make compliance more common by eliminating some deferments and gradually reducing draftees' terms to one year from two. Meanwhile, they have created all-volunteer units and stationed them in the volatile northern Caucasus, Baev said. ``That's why Georgia has reason to be worried,'' he said.
Vested Interest
Russian political leaders have long talked of shifting to a smaller, more professional all-contract military. They have made little progress, partly because of opposition from generals who have a vested interest in blocking the change, analysts say.
The generals exploit draftees by using them to do personal work or renting them out as cheap labor to enterprises, with the generals pocketing the fees, said William Hill, a professor at the U.S. National War College in Washington.
The military pressures draftees to sign long-term service contracts, according to the Committee of Soldiers' Mothers, a Moscow-based group that works to expose abuses in the military. The pressure includes sleep deprivation, beatings and threats of transfer to combat zones.
Hazing persists even after high-profile cases generated official promises to curb abuses, Baev said.
``Soldiers are mistreated in every possible way,'' he said. ``That's why it's so difficult for this army to shift into contract service. You have to treat soldiers differently if they are professionals. Many of the officers aren't prepared to do this.''
To contact the reporter on this story: Ken Fireman in Washington at kfireman1@bloomberg.net
Last Updated: December 20, 2007 18:30
http://www.bloomberg.com/apps/news?pid=206...&refer=home
More bark than bite.
By Ken Fireman
Enlarge Image/Details
Dec. 21 (Bloomberg) -- Russia's military, which once defined its power and is central to President Vladimir Putin's ambitions for global influence, is lagging behind its energy- driven economic boom.
The nation's armed forces remain beset by manpower and morale problems, aging equipment, graft and unfulfilled promises to overhaul their Cold War-era structure, Western and Russian analysts say. While Putin, 55, has increased Russia's defense budget to a level four times greater than when he became president in 2000, it is still less than 6 percent of U.S. spending.
``There is this notion in the West that the Russian army is coming back,'' said Zoltan Barany, a professor at the University of Texas in Austin who published a book this year about the decline of the Russian military. ``They're not back. Things have started to change, but there's a long way to go before they're back, and I don't think they will ever be back like they were.''
A report last month by Moscow's Institute for National Strategy and two other independent research groups underscored the lack of progress. It said defense spending during Putin's tenure had grown only 15 percent after inflation from the 1990s, and that Russia has bought fewer weapons under him because of a ``dramatic rise in corruption.''
Outdated Fears
The analysts said military doctrine was still based on outdated fears of war with the West instead of more realistic threats from China or Islamic terrorists.
Russian and Western news media ``are inflating the myth of an active remilitarization of modern Russia,'' the analysts said. ``This myth bears no relation to reality.''
The gap between Putin's ambitions and his capabilities was evident in August, when he said that regular strategic-bomber flights would resume after a 15-year hiatus. The announcement revived memories of Cold War days, when Soviet and U.S. nuclear- armed bombers patrolled on hair-trigger alert.
The reality turned out to be far different. The new patrols are done mostly by aging Tu-95 ``Bear'' bombers that have turbo- prop rather than jet engines, carry no nuclear weapons and are limited to about one flight a week by budget and equipment constraints, according to Pavel Baev, a military analyst at Oslo's International Peace Research Institute.
A Shrinking Fleet
The resource crunch affects all military branches, analysts say. The Russian Navy now has one active-duty aircraft carrier -- the U.S. has 12 -- and its fleet of strategic nuclear submarines is shrinking as vessels wear out and aren't replaced.
The most modern sub, the 11-year-old Yuri Dolgoruky, was designed as a platform for the Bulava-M long-range nuclear missile. The Bulava failed several tests, raising questions about its future and the sub's utility, Baev said.
While Russian defense industries produce some good-quality equipment, especially fighter planes and surface-to-air missiles, most is sold abroad, said John Pike, director of GlobalSecurity.org, an Alexandria, Virginia-based military research group.
``They're basically playing with the same set of toys that Gorbachev gave them,'' Pike said, referring to Mikhail Gorbachev, the last Soviet leader.
Russia still fields a formidable nuclear arsenal, with 4,237 warheads deployed on 875 missiles and bombers as of July, according to data compiled by the Arms Control Association, a Washington research group. Only the U.S., with 5,914 warheads on 1,225 missiles and bombers, has more.
Repairs Required
Still, 60 percent of Russian missiles have exceeded their service life and half require major repairs, according to a 2005 Defense Ministry report, Barany said. Just 30 percent of the country's fighter planes are combat-ready, he said.
The Moscow researchers said that if present trends continue, attrition will reduce Russia's intercontinental missile arsenal to between 100 and 200 in a decade. Russia's Defense Ministry didn't respond to written questions about the military's capability.
The head of the Russian Strategic Missile Troops, Colonel- General Nikolai Solovtsov, was quoted by the official Itar-Tass news agency Dec. 17 as saying that Russia would be ``compelled'' to maintain the strength of its nuclear arsenal because of U.S. plans to base a missile-defense system in Eastern Europe.
Manpower problems remain acute, although some -- such as chronic late payment of officers' salaries -- have been eased by the budget increases.
Russia's Spending
Aided by a 255 percent surge in oil prices during Putin's eight years in office, Russia's 2007 defense spending was about 821 billion rubles ($33.6 billion), about 15 percent of total government expenditures, according to the London-based International Institute for Strategic Studies. U.S. military spending in 2007 was about $582 billion, or 21 percent of the total federal budget, the institute said.
Russia also suffers from endemic draft avoidance, with as many as nine out of 10 of those in the eligible 18-to-26 age group escaping service. ``If you've got 90 percent draft evasion, those who show up are just too stupid to evade it,'' Pike said. ``Imagine what kind of military you can put together with that.''
Military officials are seeking to make compliance more common by eliminating some deferments and gradually reducing draftees' terms to one year from two. Meanwhile, they have created all-volunteer units and stationed them in the volatile northern Caucasus, Baev said. ``That's why Georgia has reason to be worried,'' he said.
Vested Interest
Russian political leaders have long talked of shifting to a smaller, more professional all-contract military. They have made little progress, partly because of opposition from generals who have a vested interest in blocking the change, analysts say.
The generals exploit draftees by using them to do personal work or renting them out as cheap labor to enterprises, with the generals pocketing the fees, said William Hill, a professor at the U.S. National War College in Washington.
The military pressures draftees to sign long-term service contracts, according to the Committee of Soldiers' Mothers, a Moscow-based group that works to expose abuses in the military. The pressure includes sleep deprivation, beatings and threats of transfer to combat zones.
Hazing persists even after high-profile cases generated official promises to curb abuses, Baev said.
``Soldiers are mistreated in every possible way,'' he said. ``That's why it's so difficult for this army to shift into contract service. You have to treat soldiers differently if they are professionals. Many of the officers aren't prepared to do this.''
To contact the reporter on this story: Ken Fireman in Washington at kfireman1@bloomberg.net
Last Updated: December 20, 2007 18:30
http://www.bloomberg.com/apps/news?pid=206...&refer=home
More bark than bite.
QUOTE (beasty @ Dec 22 2007, 03:18 AM)
I'm sure he's big into sharing. I suppose if you risk everything for complete power you'd better have a stash of cash in case things go bad. 40B would buy a small country and a fine bit of firepower.
I think Forbes has to update their list.
Seriously, this whole story is SO typical of Russian politics. The more things change, the more they stay the same.
Russia hasn't changed much since the czars. Good intentions or not it seems to keep ending up the same.
QUOTE (SpaceCowboy @ Dec 22 2007, 03:19 AM)
Putin's Military Might Fails to Keep Pace With His Ambitions
By Ken Fireman
Enlarge Image/Details
Dec. 21 (Bloomberg) -- Russia's military, which once defined its power and is central to President Vladimir Putin's ambitions for global influence, is lagging behind its energy- driven economic boom.
The nation's armed forces remain beset by manpower and morale problems, aging equipment, graft and unfulfilled promises to overhaul their Cold War-era structure, Western and Russian analysts say. While Putin, 55, has increased Russia's defense budget to a level four times greater than when he became president in 2000, it is still less than 6 percent of U.S. spending.
``There is this notion in the West that the Russian army is coming back,'' said Zoltan Barany, a professor at the University of Texas in Austin who published a book this year about the decline of the Russian military. ``They're not back. Things have started to change, but there's a long way to go before they're back, and I don't think they will ever be back like they were.''
A report last month by Moscow's Institute for National Strategy and two other independent research groups underscored the lack of progress. It said defense spending during Putin's tenure had grown only 15 percent after inflation from the 1990s, and that Russia has bought fewer weapons under him because of a ``dramatic rise in corruption.''
Outdated Fears
The analysts said military doctrine was still based on outdated fears of war with the West instead of more realistic threats from China or Islamic terrorists.
Russian and Western news media ``are inflating the myth of an active remilitarization of modern Russia,'' the analysts said. ``This myth bears no relation to reality.''
The gap between Putin's ambitions and his capabilities was evident in August, when he said that regular strategic-bomber flights would resume after a 15-year hiatus. The announcement revived memories of Cold War days, when Soviet and U.S. nuclear- armed bombers patrolled on hair-trigger alert.
The reality turned out to be far different. The new patrols are done mostly by aging Tu-95 ``Bear'' bombers that have turbo- prop rather than jet engines, carry no nuclear weapons and are limited to about one flight a week by budget and equipment constraints, according to Pavel Baev, a military analyst at Oslo's International Peace Research Institute.
A Shrinking Fleet
The resource crunch affects all military branches, analysts say. The Russian Navy now has one active-duty aircraft carrier -- the U.S. has 12 -- and its fleet of strategic nuclear submarines is shrinking as vessels wear out and aren't replaced.
The most modern sub, the 11-year-old Yuri Dolgoruky, was designed as a platform for the Bulava-M long-range nuclear missile. The Bulava failed several tests, raising questions about its future and the sub's utility, Baev said.
While Russian defense industries produce some good-quality equipment, especially fighter planes and surface-to-air missiles, most is sold abroad, said John Pike, director of GlobalSecurity.org, an Alexandria, Virginia-based military research group.
``They're basically playing with the same set of toys that Gorbachev gave them,'' Pike said, referring to Mikhail Gorbachev, the last Soviet leader.
Russia still fields a formidable nuclear arsenal, with 4,237 warheads deployed on 875 missiles and bombers as of July, according to data compiled by the Arms Control Association, a Washington research group. Only the U.S., with 5,914 warheads on 1,225 missiles and bombers, has more.
Repairs Required
Still, 60 percent of Russian missiles have exceeded their service life and half require major repairs, according to a 2005 Defense Ministry report, Barany said. Just 30 percent of the country's fighter planes are combat-ready, he said.
The Moscow researchers said that if present trends continue, attrition will reduce Russia's intercontinental missile arsenal to between 100 and 200 in a decade. Russia's Defense Ministry didn't respond to written questions about the military's capability.
The head of the Russian Strategic Missile Troops, Colonel- General Nikolai Solovtsov, was quoted by the official Itar-Tass news agency Dec. 17 as saying that Russia would be ``compelled'' to maintain the strength of its nuclear arsenal because of U.S. plans to base a missile-defense system in Eastern Europe.
Manpower problems remain acute, although some -- such as chronic late payment of officers' salaries -- have been eased by the budget increases.
Russia's Spending
Aided by a 255 percent surge in oil prices during Putin's eight years in office, Russia's 2007 defense spending was about 821 billion rubles ($33.6 billion), about 15 percent of total government expenditures, according to the London-based International Institute for Strategic Studies. U.S. military spending in 2007 was about $582 billion, or 21 percent of the total federal budget, the institute said.
Russia also suffers from endemic draft avoidance, with as many as nine out of 10 of those in the eligible 18-to-26 age group escaping service. ``If you've got 90 percent draft evasion, those who show up are just too stupid to evade it,'' Pike said. ``Imagine what kind of military you can put together with that.''
Military officials are seeking to make compliance more common by eliminating some deferments and gradually reducing draftees' terms to one year from two. Meanwhile, they have created all-volunteer units and stationed them in the volatile northern Caucasus, Baev said. ``That's why Georgia has reason to be worried,'' he said.
Vested Interest
Russian political leaders have long talked of shifting to a smaller, more professional all-contract military. They have made little progress, partly because of opposition from generals who have a vested interest in blocking the change, analysts say.
The generals exploit draftees by using them to do personal work or renting them out as cheap labor to enterprises, with the generals pocketing the fees, said William Hill, a professor at the U.S. National War College in Washington.
The military pressures draftees to sign long-term service contracts, according to the Committee of Soldiers' Mothers, a Moscow-based group that works to expose abuses in the military. The pressure includes sleep deprivation, beatings and threats of transfer to combat zones.
Hazing persists even after high-profile cases generated official promises to curb abuses, Baev said.
``Soldiers are mistreated in every possible way,'' he said. ``That's why it's so difficult for this army to shift into contract service. You have to treat soldiers differently if they are professionals. Many of the officers aren't prepared to do this.''
To contact the reporter on this story: Ken Fireman in Washington at kfireman1@bloomberg.net
Last Updated: December 20, 2007 18:30
http://www.bloomberg.com/apps/news?pid=206...&refer=home
More bark than bite.
By Ken Fireman
Enlarge Image/Details
Dec. 21 (Bloomberg) -- Russia's military, which once defined its power and is central to President Vladimir Putin's ambitions for global influence, is lagging behind its energy- driven economic boom.
The nation's armed forces remain beset by manpower and morale problems, aging equipment, graft and unfulfilled promises to overhaul their Cold War-era structure, Western and Russian analysts say. While Putin, 55, has increased Russia's defense budget to a level four times greater than when he became president in 2000, it is still less than 6 percent of U.S. spending.
``There is this notion in the West that the Russian army is coming back,'' said Zoltan Barany, a professor at the University of Texas in Austin who published a book this year about the decline of the Russian military. ``They're not back. Things have started to change, but there's a long way to go before they're back, and I don't think they will ever be back like they were.''
A report last month by Moscow's Institute for National Strategy and two other independent research groups underscored the lack of progress. It said defense spending during Putin's tenure had grown only 15 percent after inflation from the 1990s, and that Russia has bought fewer weapons under him because of a ``dramatic rise in corruption.''
Outdated Fears
The analysts said military doctrine was still based on outdated fears of war with the West instead of more realistic threats from China or Islamic terrorists.
Russian and Western news media ``are inflating the myth of an active remilitarization of modern Russia,'' the analysts said. ``This myth bears no relation to reality.''
The gap between Putin's ambitions and his capabilities was evident in August, when he said that regular strategic-bomber flights would resume after a 15-year hiatus. The announcement revived memories of Cold War days, when Soviet and U.S. nuclear- armed bombers patrolled on hair-trigger alert.
The reality turned out to be far different. The new patrols are done mostly by aging Tu-95 ``Bear'' bombers that have turbo- prop rather than jet engines, carry no nuclear weapons and are limited to about one flight a week by budget and equipment constraints, according to Pavel Baev, a military analyst at Oslo's International Peace Research Institute.
A Shrinking Fleet
The resource crunch affects all military branches, analysts say. The Russian Navy now has one active-duty aircraft carrier -- the U.S. has 12 -- and its fleet of strategic nuclear submarines is shrinking as vessels wear out and aren't replaced.
The most modern sub, the 11-year-old Yuri Dolgoruky, was designed as a platform for the Bulava-M long-range nuclear missile. The Bulava failed several tests, raising questions about its future and the sub's utility, Baev said.
While Russian defense industries produce some good-quality equipment, especially fighter planes and surface-to-air missiles, most is sold abroad, said John Pike, director of GlobalSecurity.org, an Alexandria, Virginia-based military research group.
``They're basically playing with the same set of toys that Gorbachev gave them,'' Pike said, referring to Mikhail Gorbachev, the last Soviet leader.
Russia still fields a formidable nuclear arsenal, with 4,237 warheads deployed on 875 missiles and bombers as of July, according to data compiled by the Arms Control Association, a Washington research group. Only the U.S., with 5,914 warheads on 1,225 missiles and bombers, has more.
Repairs Required
Still, 60 percent of Russian missiles have exceeded their service life and half require major repairs, according to a 2005 Defense Ministry report, Barany said. Just 30 percent of the country's fighter planes are combat-ready, he said.
The Moscow researchers said that if present trends continue, attrition will reduce Russia's intercontinental missile arsenal to between 100 and 200 in a decade. Russia's Defense Ministry didn't respond to written questions about the military's capability.
The head of the Russian Strategic Missile Troops, Colonel- General Nikolai Solovtsov, was quoted by the official Itar-Tass news agency Dec. 17 as saying that Russia would be ``compelled'' to maintain the strength of its nuclear arsenal because of U.S. plans to base a missile-defense system in Eastern Europe.
Manpower problems remain acute, although some -- such as chronic late payment of officers' salaries -- have been eased by the budget increases.
Russia's Spending
Aided by a 255 percent surge in oil prices during Putin's eight years in office, Russia's 2007 defense spending was about 821 billion rubles ($33.6 billion), about 15 percent of total government expenditures, according to the London-based International Institute for Strategic Studies. U.S. military spending in 2007 was about $582 billion, or 21 percent of the total federal budget, the institute said.
Russia also suffers from endemic draft avoidance, with as many as nine out of 10 of those in the eligible 18-to-26 age group escaping service. ``If you've got 90 percent draft evasion, those who show up are just too stupid to evade it,'' Pike said. ``Imagine what kind of military you can put together with that.''
Military officials are seeking to make compliance more common by eliminating some deferments and gradually reducing draftees' terms to one year from two. Meanwhile, they have created all-volunteer units and stationed them in the volatile northern Caucasus, Baev said. ``That's why Georgia has reason to be worried,'' he said.
Vested Interest
Russian political leaders have long talked of shifting to a smaller, more professional all-contract military. They have made little progress, partly because of opposition from generals who have a vested interest in blocking the change, analysts say.
The generals exploit draftees by using them to do personal work or renting them out as cheap labor to enterprises, with the generals pocketing the fees, said William Hill, a professor at the U.S. National War College in Washington.
The military pressures draftees to sign long-term service contracts, according to the Committee of Soldiers' Mothers, a Moscow-based group that works to expose abuses in the military. The pressure includes sleep deprivation, beatings and threats of transfer to combat zones.
Hazing persists even after high-profile cases generated official promises to curb abuses, Baev said.
``Soldiers are mistreated in every possible way,'' he said. ``That's why it's so difficult for this army to shift into contract service. You have to treat soldiers differently if they are professionals. Many of the officers aren't prepared to do this.''
To contact the reporter on this story: Ken Fireman in Washington at kfireman1@bloomberg.net
Last Updated: December 20, 2007 18:30
http://www.bloomberg.com/apps/news?pid=206...&refer=home
More bark than bite.
On the other side, not mentioned in the story, are Russia's highly advanced Topol-M and Bulava ICBM platforms. These systems are the most advanced in the world.
Also, the Russians are designing and deploying advanced submarines and aircraft.
Edit to add:
If I'm wrong, Russ can enlighten me on Russian technical capabilities - especially the aircraft.
QUOTE (TruthTrekker @ Dec 21 2007, 10:26 PM)
On the other side, not mentioned in the story, are Russia's highly advanced Topol-M and Bulava ICBM platforms. These systems are the most advanced in the world.
Also, the Russians are designing and deploying advanced submarines and aircraft.
Also, the Russians are designing and deploying advanced submarines and aircraft.
Putin can get richer selling that poop to Iran, NK, et al.
QUOTE (Bart Katz @ Dec 22 2007, 03:29 AM)
Putin can get richer selling that poop to Iran, NK, et al.
Exactly...
A little SEO and a website.
Mom always said you have to have a tradition of democracy to make it work right. She liked the Russian people she met, but had no feeling that they had any concept of the people having control over the government.
QUOTE (TruthTrekker @ Dec 21 2007, 08:26 PM)
On the other side, not mentioned in the story, are Russia's highly advanced Topol-M and Bulava ICBM platforms. These systems are the most advanced in the world.
Also, the Russians are designing and deploying advanced submarines and aircraft.
Edit to add:
If I'm wrong, Russ can enlighten me on Russian technical capabilities - especially the aircraft.
Also, the Russians are designing and deploying advanced submarines and aircraft.
Edit to add:
If I'm wrong, Russ can enlighten me on Russian technical capabilities - especially the aircraft.
The old Soviet military had a lot of smoke and mirrors. I can only imagine how the new smaller version works.
http://www.spacewar.com/reports/Putin_boas..._Gates_999.html
Putin boast of 'grandiose' military plans no cause for alarm: Gates
by Staff Writers
Washington (AFP) Oct 18, 2007
President Vladimir Putin's boast of "grandiose" Russian military plans, including a new nuclear weapon, were "an assertion that Russia is back" but not a cause for alarm, US Defense Secretary Robert Gates said Thursday.
Russia has used oil revenues to steadily increase the pace of its military modernization over the past couple of years, said Gates, who visited Moscow last week.
"But I would point out that we're coming from a very low base," he told reporters. "In the 1990s, the Russian military was almost inert. And they're spending, perhaps, 10 percent of what we spend, if that, on defense."
"So I think what you see is that these kinds of things that he's talking about are basically an assertion that Russia is back and intends to play a major role on the world stage and intends to be taken seriously," he said.
Asked whether Putin's comments alarmed him, Gates said, "No, it doesn't alarm me."
Putin made the remarks in a a video link-up with servicemen at the Plesetsk nuclear missile base.
He said Russia would build another nuclear submarine next year and was also planning a "completely new" atomic weapon.
"We have grandiose plans and they are absolutely realistic," Putin said, speaking hours after the military announced the successful test firing of a Topol intercontinental ballistic missile.
Considering the Russian economy was looted for roughly 500 billion dollars during the 90's, I'm surprised they have come as far as they have in the last eight years.
If the US doesn't curb spending in a drastic way, we will go the way of the Soviet Union - a defunct and insolvent superpower. The question is, will we be able to pick up the pieces?
If the US doesn't curb spending in a drastic way, we will go the way of the Soviet Union - a defunct and insolvent superpower. The question is, will we be able to pick up the pieces?
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