Budget Expenditures on Security Forces to Grow to Two Trillion Rubles by 2019
Vladimir Dergachov and Elizaveta Antonova
RBC
October 23, 2016

The authorities have decided not to save money on the security forces, despite the difficult economic situation in the country. The draft budget shows that annual spending on national security will grow to 2 trillion rubles by 2019.

The government has inserted an increase in expenditures from 1.94 trillion rubles to 2 trillion rubles [approx. 30 billion euros] by 2019 under the line item “National Security and Law Enforcement.” These figures are contained in the draft budget for 2017-2019, as submitted by the Finance Ministry. (RBC has the relevant memorandum in its possession.) These expenditures also include the secret part of the budget, which this year grew to 22.3%.

Total budgetary provisions for national security are supposed to reach 1.943 trillion rubles in 2016. Over the next three years, a spending increase in this sector has been laid into the budget. In 2017, 1.967 trillion rubles will be spent on the security forces; in 2018, 1.994 trillion rubles; and in 2019, 2.006 trillion rubles. That is, spending on national security will increase by 63 billion rubles [approx. 933 million euros] over three years.

The “National Security and Law Enforcement” section of the budget has fourteen subsections, including prosecution and investigation authorities (the Prosecutor General’s Office and Russian Investigative Committee, the Justice Ministry, the Interior Ministry, security, border guards, Interior Ministry Troops, drug police, and the penal system). The section also includes spending on emergency situations, migration policy, civil defense, and specialized applied research.

A government spokesperson forwarded RBC’s questions about spending on law enforcement to the law enforcement agencies.

RBC found out which ministries would benefit from the allocation of funds after the latest reforms in the law enforcement sector.

How Creation of the National Guard Impacted the Budget

In early April 2016, President Vladimir Putin abolished the Federal Drug Control Service (FSKN) and Federal Migration Service (FMS) as free-standing entities, incorporating them into the Interior Ministry. The Interior Ministry, in turn, lost part of its powers. Its internal troops and special forces units were turned into a new security agency, the National Guard of Russia. The National Guard acquired, in particular, the OMON (Special Purpose Militia Detachment or riot cops), the SOBR (Special Rapid Deployment Unit), the Licensing and Permit Center, and the Extra-Departmental Security Service.

As a result, the line item for spending on drug control agencies has been eliminated. (The subsection contains dashes after 2016, in which 27.3 billion rubles were allocated.)

The draft budget also incorporates a spending decrease in the line item entitled “Police Agencies,” from 683.4 billion rubles in 2016 to 625 billion rubles in 2019. (Hereinafter, expenditures are given for the period from 2016 to 2019.)

Spending on the line item “Internal Troops” will nearly double due to the formation of the National Guard: from 114.6 billion rubles to 206.6 billion rubles.

When asked about the growth in spending on this line item, National Guard spokesman Yevgeny Kubyshkin suggested that RBC readdress their question to the government officials who drafted the document.

Among other significant changes in spending due to agency and ministerial shake-ups is the more than tenfold reduction on “Migration Policy,” from 33.7 billion rubles to 285.5 million rubles. This line item incorporates spending on the Federal Migration Service, which has been merged with the Interior Ministry.

The Russian Interior Ministry’s press office confirmed to RBC that appropriations were reallocated when the budget for 2017-2019 was drafted. Monies were reallocated to pay for the Interior Ministry units transferred to the National Guard. Sources at the ministry also confirmed that spending on the abolished FMS and FSKN had been accounted for in the ministry’s budget.

“Thus, the parameters of the draft federal budget of the Russian Interior Ministry for 2017-2019, excluding pension funds, are 695.1 billion rubles in 2017; 691.9 billion rubles in 2018,; and 689.7 billion rubles in 2019. This testifies to the fact that federal financing of the Russian Interior Ministry will remain nearly at the levels of 2015-2016,” a source at the ministry told RBC.

Prosecutors Get More, Security Officers Less

The line item for “Prosecuting and Investigative Authorities” stands out among the expenditures, with an increase from 86 billion rubles to 94.8 billion rubles.

The growth of spending on prosecutors and investigators is due to the fact that, as of January 1, 2017, military investigators will be merged with the Investigative Committee and will be financed out of their budget, Investigative Committee spokeswoman Svetlana Petrenko explained to RBC. RBC is waiting for a response to its questions from the Prosecutor General’s Office.

Spending on the line item for the “Penal System” will be slashed from 196.3 billion rubles to 176.8 billion rubles. Federal Penitentiary Service (FSIN) spokeswoman Kristina Belousova declined to comment.

The subsection “Security Agencies” (which includes the FSB) will be also be cut, from 306.4 billion rubles to 292 billion rubles. RBC’s request for information from the FSB’s Public Relations Office went unanswered.

The line items for “Justice Authorities” and “Border Guards” have been marked for slight decreases in spending. Over the three years, spending on the Justice Ministry will decrease from 43.4 billion rubles to 42.6 million rubles, while the border guards’ budget will be reduced from 124.2 billion rubles to 119 billion rubles. The Justice Ministry promised it would answer RBC’s inquiries at a later date.

According to the government’s draft budget, spending on “Protecting the Populace from Emergency Situations” will be reduced from 81.2 billion rubles to 70.1 billion rubles. On the other hand, spending on “Fire Safety” will be increased from 109.9 billion rubles to 119.4 billion rubles. RBC has sent an inquiry to the Emergency Situations Ministry and is still waiting for a reply.

“Non-Transparent” Expenditures Grow by Two and a Half Times

However, expenditures on “Other National Security and Law Enforcement Issues” will grow by two and a half times, from 108.4 billion rubles in 2016 to 237 billion rubles in 2019. According to the budget classification codes, this subsection includes expenditures having to do with the “leadership, management, and provision of support for activities such as the development of overall policy, plans, programs, and budgets, as well as other undertakings in the field of national security and law enforcement not covered by other subsections in this section.”

The Russian budget already contains a voluminous secret section, and line items like “Other Expenses” make expenditures even less transparent, Vasily Zatsepin, head of the military economy lab at the Gaidar Institute for Economic Policy, told RBC. According to Zatsepin, this subsection could contain anything whatsoever, for example, “financial assistance to certain districts in the Donetsk and Lugansk regions [of Ukraine].”

However, the subsection “Applied Research in the Field of National Security and Law Enforcement” will be slashed from 27.5 billion rubles to 22.3 billion rubles, respectively.

Security Priorities

The government memo makes clear that overall allocations for the entire national security section of the budget amount to 2.3% of GDP. Their share of total federal spending is 11.8%.

Although spending in this category in terms of GDP will drop from 2.3% to 2% by 2019, spending on national security in terms of overall spending will increase over the next three years, from 11.8% in 2016, to 12.2% in 2017, to 12.5% percent in 2018, and to 12.6% in 2019. This is more than combined spending on education, health care, culture, sports, media, and environmental protection.

The regime’s priority is to redistribute the budget toward foreign policy and the deep state, as well as social welfare payments to the populace to maintain stability, Nikolay Mironov, head of the Center for Economic and Political Reform told RBC.

“Everything else is overlooked, although education, health care, and the national economy, whose line items have been cut, are strategic areas. Investment in them does not pay off in the current year, but always pays off later,” argued Mironov.

Translated by the Russian Reader