Two things are news, both bad. The first is that, following the heinous terrorist acts in Washington and New York, European countries are triggering a chain reaction of boosting army and special services budgets and revising national defense priorities. Kyiv is already concerned about this. Last Friday, addressing the parliamentary defense and security committee, Minister of Defense Gen. Oleksandr Kuzmuk, said, “A new period has come. The world became different after September 11, and we should not let this go unnoticed.”
The second piece of news is especially unpleasant for Ukrainian citizens in uniform. Having examined the 2002 draft budget prepared by the Cabinet of Ministers, military officials have begun to unanimously state this kind of funding undermines their ability and capability to effectively fend off various threats. Actually, it is proposed that the Ministry of Defense will receive UAH 4.45 billion next year in contrast to the current year, when military expenditures were UAH 2.72 billion. Yet, as a Ukrainian saying goes, the devil lurks in the details. More on this later.
For the first time the 2002 budget envisages that the Ministry of Defense pay pensions to retired servicemen and veterans from its own coffers. Earlier, the Ministry of Finance did so. Pensions will require such an enormous amount that the army’s real budget will be a little more than UAH 3 billion.
“We, the army, are asking for four billion hryvnias, a modest amount quite realistic for a state like Ukraine. This is even lower than the minimal acceptable level. Moreover, I do not even mention pensions. For this is not part of defense spending,” Gen. Kuzmuk claims. The more so that the President instructed the Cabinet of Ministers in time that the draft budget should take into account provisions of the law On Defense which says that military expenditures in this country should be at least 3% of GDP. The instruction also said that funds should be sought to carry out the state program of armed forces reform and that money for this reform should be projected as an additional item in the budget.
So much for theory. In real life, however, the money available is always less than expected. The armed forces salary fund, UAH 1.67 billion in 2001, will shrink to UAH 1.38 billion in 2002. This makes it impossible to enlist servicemen on a contractual basis, as was suggested in the plans of putting the armed forces on an all-volunteer footing.
Now consider logistical support. The promise is to allocate 458 million against 400 million in 2001. Buthis his does not take into account the 20-30% rise in food prices. What is now left in the armed forces for food purchases to the end of the year is 20 million hryvnias. But the army eats up a solid million a day. As to clothing, the picture is bleaker still.
Transportation costs are comparable with those of the last year, when they ran out in three months. Under such conditions, the Ministry of Defense is in no position to disband units as part of the army reduction plan: there is no money to get rid of the equipment, property, and ammunition.
The army also has to tighten its belt because public utility expenses are to be cut from 327 to 274 million. On the other hand, the government has guaranteed that Naftohaz will pay to the Ministry of Defense its old UAH 500 million debt for strategic bombers. Funds for new housing, with 50,000 servicemen on the waiting list, have been cut from 20.7 to 15.5 million hryvnias.
Now take combat training, the holy of holies. The Ministry of Finance has lowered this item from 15 million to 5.5 million. Some time ago, exercises displayed tanks cabled to electric generators, which made it possible to save fuel during practice firings, but even this may soon seem an unaffordable luxury for Ukrainian’s defenders. In addition, it could become standard practice, not exceptional, to commission pilot officers who have almost never touched an airplane’s controls. Who gains from this kind of economy?
Now for the most interesting thing: the prospects of fulfilling the state program of armed forces reform. This year’s budget provided 450 million for its implementation. Last year, although 350 million was appropriated, 100 million had to be diverted to buy food. The 2002 draft budget is niggardly to the limit with a mere 69.6 million. This means the reforms will fizzle out, unless, of course, it finally occurs to the Cabinet, President, National Security and Defense Council, and parliament that reforms are not to be carried out on paper only. Moreover, we have trumpeted throughout Europe for their grand scale.
“Investments of the Armed Forces of Ukraine in the state economy have come to an end. By investments I mean continuous annual underfunding of the army. We’ve had to live off our inner reserves. Now I am telling you that everything has already been spent,” the defense minister told members of the Verkhovna Rada Defense Committee. The service life of most ground, air- force, air defense, and naval equipment has expired. About 200 aircraft engines require urgent repairs this year. It takes $200,000 to $400,000 to repair one such engine. There is no question at all about something new. But even funds for the modernization of armaments and materiel are going to be reduced from 83.2 to 51 million hryvnias.
“Could Osama Bin Laden have possibly taken part in the formation of such a budget? This is perhaps the only explanation to all this,” Gen. Kuzmuk said irritably. He insists positively that expenditures for military intelligence be raised at least to the minimal acceptable level. In this matter, he enlisted the support of Borys Andresiuk, chairman of the parliament’s Defense Committee, who is convinced that expenses for the nation’s intelligence agencies should be increased by 15-20%. For intelligence is the first line of resistance to potential and real threats, especially after the world was shocked by a terrorist aggression against the world’s most militarily and technologically powerful state.
When asked why the secret services failed to forestall such a broad terrorist act, US ambassador to Ukraine Carlos Pascual said, among other things, that America will pay special attention after this tragedy to strengthening its intelligence and law enforcement agencies. But even before the hijacked planes struck the Manhattan skyscrapers and Washington’s Pentagon, the US intelligence services were considered the most expensive. For instance, in 2001 the US intelligence agencies were granted $30 billion. Their budget grows with each passing year, as does the same budget in those European countries toward which Ukraine is trying to orient itself. Germany and France spend an annual $300 million on military intelligence alone. As to Ukraine, people in the know claim that our military intelligence has a considerably smaller budget than does little Hungary, where the khaki-clad intelligence agents “cost” about $30 million.
But this is only one side of the coin. Now consider the other, technical, side. While the US and NATO (and Europe as a whole) gather 90% and 80% of their information, respectively, by technical means, Ukraine does only 20%. This gap can be explained to a large extent by the obsolescence and wearing out of surveillance equipment. The latter should have been upgraded long ago. If we still drag on, we can put forget our electronic surveillance in the medium term. All we will have to rely on is binoculars.
To be able to keep itself afloat and fulfill its assigned tasks, military intelligence should receive at least 186 million hryvnias in 2002, while the next year’s draft budget allots only 57.5 million. No comment needed here. The picture in the Security Service (SBU) intelligence branch is the same. SBU officials claim that in comparison with 2001 they need a twofold increase in expenditures for intelligence activities to ensure Ukraine’s security and a threefold rise to fund the Antiterrorist Center.
Members of the Defense and National Security Committee have decided to insist that the Ministry of Finance revise the budget and find the needed UAH 709,300,000 for the army, including UAH 480.4 million to reform the armed forces and the rest for logistical support and medicine. They have also resolved to try to wrest funds to strengthen the intelligence services and, should all their demands not be met, to vote the bill down in the first reading. Yet, if these promises remain forgotten, all we will have to do is remember Osama Bin Laden.
