Russia: New Deputy Defense Minister Breaks Mold, Faces Tough Challenge
At the end of March, President Vladimir Putin appointed Lyubov Kondratyevna Kudelina Deputy Minister of Defense. Her portfolio will be defense finances. The media have been fascinated by the first appointment of a woman to the Ministry of Defense and praiseworthy of her professional demeanor and skills. Nonetheless, she may face serious problems reining in corruption and mismanagement in the Armed Forces and possible opposition from other "militarized agencies"(MVD, FSS, etc.), who have thus far avoided extensive financial reform. Despite positive media reaction to her appointment, effective financial reform in Russia's defense sector requires major funding, thus far unavailable; consequently, Kudelina will require powerful political support to succeed in her task.
Lyubov Kudelina, the first female Deputy Minister of Defense in Russian/Soviet history, will supervise the Defense Ministry's Main Directorate of Military Economic Analysis and Expert Examination, and the Main Finance and Economic Directorate [the former Main Directorate for Budget and Finance] (Agentstvo voyennykh novostey, 30 March). She will serve in a position with a rank equivalent to Colonel-General. Kudelina said in a Mayak Radio interview that her appointment was unexpected (31 March).
Kudelina's Capabilities Praised
Both government officials and the media have praised the new deputy minister's professional skills and abilities, considering her Finance Ministry experience as vital to undertaking reform of military finances and as enabling her to "take on the generals."
Kudelina's Challenges: Opposition and Corruption within the MoD . . .
The new Deputy Minister of Defense is likely to face extensive opposition, which will hamper her effectiveness. Oligarchs who have used defense funding to enrich themselves will see her as an obstacle. Resistance to change is also likely from the general officer corps, given the endemic corruption among its members. Moreover, if the MoD under Ivanov becomes a "super-ministry," which aims to oversee not only the Armed Forces, but all of Russia's "militarized agencies," Kudelina will face opposition from them as well.
Kudelina's recent predecessor in the MoD, Colonel-General Georgiy Oleynik, lost his budget and finance position in a scandal over the manipulation of 450 million dollars in defense funds, which were used in an elaborate scheme to eliminate the tax indebtedness of Gazprom, the giant Russian energy firm, causing the MoD to lose roughly 300 million dollars.
. . . and Balancing Defense and the "Militarized Agencies"
According to Major-General (ret.) Aleksandr Piskunov, member of the the RF State Duma Budget Committee, Kudelina will be engaged in efforts to resolve the imbalance between strictly "defense" funding and "security" funding for the other "militarized agencies" [silovyye vedomstva], including the MVD, Federal Security Service, Foreign Intelligence Service, Federal Border Service, Federal Agency for Government Communications and Information, and Ministry of Civil Defense, Emergencies, and the Elimination of the Consequences of Natural Disasters.
There is one piece of evidence that Kudelina's role in resolving the interagency feud over funds has been planned for some time. Prime Minister Kasyanov appointed Kudelina to the Interdepartmental Commission on State Secrecy in September of 2000 (government.ru, 28 September 2000). During the fall 2000 debate over the defense budget, classification became a weapon used to withold information from outside interests who sought to influence the budgetary process. She commented at the time that "openness of military expenditures leads to a clash of lobbyists' efforts, which complicates normal work around the budget" (Itogi,17 November 2000). Kudelina's appointment to the secrecy commission gave her restricted access, denied to others.
In the long run successful Armed Forces reform requires extending reform to Russia's other militarized agencies.
Outlook: Can Kudelina succeed?
In the short run Lyubov Kudelina is unlikely to effect significant change in the defense financial area, unless she receives extraordinary support from the President and Government. She will surely have the support of Defense Minister Sergey Ivanov, but Ivanov's own success will depend upon powerful support from President Putin, who was himself unable to force through similar reforms in 2000.
Successful military reform also requires funding, however, and Russia currently has little money available for defense or defense reform. In addition, institutional conflict over resource allocation between the MoD and the Ministry of Finance will further thwart her efforts.
While President Putin has reorganized the defense export sector under a single agency -- Rosoboroneksport -- and inaugurated yet another reform of the defense industrial sector, under the supervision of Deputy Prime Minister Ilya Klebanov, neither effort is liable to generate the large amount of cash needed for defense reform, in the short run.
The funding Kudelina will need must come from cleaning up corruption and mismanagement in the MoD, and from extending reform to the other "militarized agencies." According to the Russian press, she appears capable of undertaking the former. Resolving the latter problem will require powerful political support.
Appendix: BIOGRAPHIC INFORMATION
Lyubov Kondratyevna Kudelina was born 4 April 1955 in Vladivostok; her father was a naval officer; she has an 18-year old son, who is a student in the Ministry of Finance's Academy of the Budget and Treasury; she enjoys driving cars (Rossiyskaya Gazeta, 20 March).
Graduated from the Moscow Finance Insitute in the "economist" speciality (Lenta.ru, 28 March).
1977-1992, assigned to various posts in the RSFSR Ministry of Finance, which became the RF Ministry of Finance (Lenta.ru, 28 March).
1992, named Deputy Head of the budget department -- Chief of the General Department for Budget Consolidation of the Ministry of Finance (Lenta.ru, 28 March).
Was member of a Ministry of Finance Commission to review commercial banks involvement in fulfillment of the state defense order (Prikaz Minfina RF, 9 April 1996. No. 193, (http://mingar.park.ru/private/document.asp?no=1419109)).
1996-1998, headed the Finance Ministry's Department for the Defense Complex. In 1998 the law enforcement agencies were added to her portfolio (Lenta.ru, 28 March; Agentstvo Voyennykh Novostey, 28 March; Komsomolskaya Pravda, 31 March).
Since 1998, a member of the Ministry of Finance Collegium, according to Interfax (Lenta.ru, 28 March).
July 1999, appointed Deputy Finance Minister (Agentstvo Voyennykh Novostey, 28 March). According to new Defense Minister Sergey Ivanov, she worked with him at the Security Council on reform of "the Armed Forces and the entire military organization of the country" (RIA Novosti, 28 March).
29 September 2000, appointed by Prime Minister Kasyanov to the Interdepartmental Commission on State Secrecy (government.ru, 28 September 2000).
28 March 2001, appointed RF Deputy Minister of Defense (RIA Novosti, 28 March).