Putin humiliated as Russia can’t pay army and defence industry faces collapse | World | News
Russia is struggling to pay its soldiers as regional budgets come under great financial pressure. The Kremlin used generous financial incentives to persuade Russian men to sign military contracts to fight in Ukraine.
Many of these new recruits live in poor regions of Russia, far from the country’s major cosmopolitan cities. This policy has so far allowed the Kremlin to collect enough fresh meat for its crushing war in Ukraine without the need to launch a general national mobilization. But the regions face increasing budget debts and in many cases can no longer pay soldiers and their families.
Authorities in Yakutia in the Russian Far East have suspended payments to conscripted soldiers.
The region’s Finance Minister Ivan Alekseev confirmed the suspension in a recent TV interview.
“Unfortunately, we are really faced with this situation,” he explained.
The region pays up to 2.6 million rubles (£25,000) per contract; it also pays thousands more rubles to families to compensate for injuries and deaths. Injured soldiers receive up to 750,000 rubles (£7,200), while families in the event of death also receive up to (£9,600).
Money to pay soldiers and their families comes from federal, regional and municipal budgets.
Russia’s regions are struggling to balance the books, running a cumulative deficit of 724.8bn rubles (£7bn) by the end of September.
In October, regional governments in Tatarstan, Chuvashia, Mari El and Belgorod reduced military service payments, while others canceled additional bonuses altogether.
Meanwhile, 850 workers at the Yaroslavl Shipbuilding Plant, one of Russia’s most important military shipbuilding companies, spent almost two months without pay.
The company has not received any funding from the Russian Ministry of Defense and has been unable to pay workers since the end of September.
The facility, which builds landing and patrol ships, has faced strict Western sanctions since 2019, further restricting its activities.
The defense sector overall is facing a growing production crisis as it struggles to cope with severe labor shortages, serious cash flow problems and shortages of critical components for weapons.
