THE BELL WEEKLY: The mounting costs of Russia’s army recruitment

Hello! This week we look at Russia ramping up spending to lure soldiers for its war on Ukraine. We also highlight calls for a tax on couples who choose not to have children.

Russia boosts army sign-up bonuses amid escalating frontline losses

After the unpleasant experience with forcibly calling up army reservists in the 2022 “partial mobilization” drive, the Kremlin has since gone into overdrive to convince people to sign-up as contract soldiers for the invasion of Ukraine. The recruitment of “volunteers” (those who sign-up specifically to take part in the war on Ukraine) has allowed Moscow to replace losses at the front. But, the practice is getting increasingly expensive. Dozens of regions have raised payments for those signing up in recent months, with the one-off sign-up bonus reaching three million rubles ($30,000) in some areas.

• The business daily Kommersant collected data on one-off payments for signing a contract with the army in various Russian regions. The payment comes in two parts: each volunteer gets 400,000 rubles from the federal budget, then the region where they were recruited typically makes a top-up payment, set locally. Since the start of this year, regions have been competing to offer the most generous amount.
• Ten of 89 regions (the 89 includes five in Ukraine — Crimea, Donetsk, Kherson, Luhansk and Zaporizhzhia — that Moscow claims to have annexed) are offering more than 2 million rubles ($21,500) as a total sign-on package. The biggest “golden handshake” is in the Belgorod region, which borders Ukraine, where governor Vyacheslav Gladkov recently upped the payment to 2.6 million rubles from 800,000. In wealthy Moscow, the sign-up bonus is 2.3 million rubles. St. Petersburg also makes the top 10, along with the oil-and-gas rich Khanty-Mansi, Yamalo-Nenets and Tatarstan regions, military industrial centers in Kurgan and Sverdlovsk regions, the densely populated Krasnodar Territory and Tatarstan, plus Karachay-Cherkessia in the North Caucasus.
• The payment is smaller in other regions but a trend of higher payments is clearly visible. In several places there have been frequent gradual increases, whereas others have gone for one-off big hikes. For example, in Stavropol, the amount of offer went from 200,000 to 1.5 million rubles. Even in the poorest areas, payments are running at the same level as the 400,000-ruble federal contribution. Thus, every volunteer recruit gets at least 800,000 rubles ($8,500) for agreeing to fight in Ukraine. 
• It is hard to imagine that Russia has simply decided to start offering soldiers more money out of generosity. Instead, it points to a basic shortage of supply. Potential soldiers assess the benefits of signing up based on the pros and cons. The “pro” is overwhelmingly financial — a substantial one-time payment, plus monthly pay (starting at 210,000 rubles upwards, more than twice the average wage) for however long they are in service before being killed or injured (there is no other way to “leave” or be discharged from the “special military operation”). The “con” is exactly that — being killed or seriously injured. There is little reliable data on life expectancy among those sent to the front, due to the lack of official information. The BBC and Mediazona say deaths of “volunteers” now account for more than any other type of Russian soldier. And based on analyzing the fate of 3,000 mobilized soldiers who were conscripted in the September 2022 drive and later killed, IStories and the Conflict Intelligence Team calculated half who died did so within five months of being sent to the combat zone.
• Up until now, the “pros” have outweighed the “cons,” allowing Russia to replenish its ranks. But the balance is fine, according to The New York Times. It reported around 25-30,000 contract soldiers a month are joining the Russian army — “roughly the same as are leaving the battlefield.” Among other things, this means that recruitment this year will fall short of last year’s record 490,000 men.
• According to US intelligence assessments, cited by the NYT, Russia has lost 615,000 men since the start of the war — 115,000 dead and 500,000 injured. September was the bloodiest of the war, it added. Ukraine’s estimated losses are exactly half Russia’s: 57,500 dead and 250,000 wounded.
• We recently devoted an extended article to the “price of life” in Russia, showing that Russians tend to place a low estimate on the value of a person’s life. According to surveys, they said the level of fair compensation for somebody’s death would be 5-8 million rubles ($52,000-83,000) — based on the likely sum they would earn before their natural death. This ties in to the maximum payment offered to the families of dead servicemen, about 11 million rubles. This sums up the deal that contract soldiers strike with the authorities. “They sell their blood for money that they could not earn with their labor or their minds under the current system,” Pavel Luzin, a senior research fellow at the Jamestown Foundation, told The Bell.

Why the world should care

Large payments to contract soldiers are barely able to maintain the size of Russia’s fighting force given the current level of battlefield losses. Any attempt to seize the initiative in the war would require another round of mobilization, something that Vladimir Putin has carefully avoided. This dynamic makes some kind of status quo at the front more likely. “We are watching very closely to what extent and for how long Russia can maintain its current system,” a Pentagon official told the NYT.

Calls for childless tax

Weeks after advancing a bill to ban “childfree ideology,” several Russian figures have started calling for a tax to be introduced on couples that do not have children. It is the latest proposal that advocates say will address the country’s war-related demographic problems and fits into a deepening conservative agenda.

• The idea has been raised at least twice in the last few weeks. The first proposals came from Dzhomart Aliyev — the rector of a second-tier Moscow University who apparently got his diploma from a “fake” American university. He said that to stimulate the birth rate it would be necessary to increase income tax by 3% (he likely meant percentage points), property tax by 0.5% and inheritance tax by 5% for those without children.
• A few days later a more respected figure, Alexey Zubets, director of the institute of socio-economic research at the Government Financial University, made a greater splash with his proposal. He suggested collecting 30,000-40,000 rubles a month ($300-400) from childless couples or families with only one child. According to him, this money could be used to address the national demographic program. “Our average salary is 85,000 rubles. A family of two earning that is getting 170,000 rubles. For them, 40,000 rubles is not much money,” Zubets said. This is obviously a wild proposal, amounting to a new tax equivalent to 25% of average income that would apply to most households (the average number of children per Russian family is 1.6, according to the latest census).
• Lawmaker Andrey Gurulyov, the leading figure in the military lobby in the duma, also spoke up for a tax on childlessness, highlighting that during the Soviet Union men aged 20-50 and married women aged 20-45 paid an extra 6% in income tax if they did not have children.
• The political background to these discussions appears to be favorable. The Russian authorities have long been concerned about demographic problems. Preliminary data suggests that in 2023, Russia’s population fell by 243,000 people (0.17%). There is no sign that this trend will change anytime soon. Moreover, due to the war and the changing economic situation, a third of Russians have decided to either postpone or abandon their plans to have children, according to a study from the Higher School of Economics.
• A possible tax on childlessness would be bad news for millions of families in Russia — but it is unlikely to be introduced. First, fines and other levies on childlessness have never stimulated the birth rate, as many demographers point out. Even Vladimir Putin’s press secretary Dmitry Peskov pointed that out on Monday. Duma speaker Vyacheslav Volodin, one of the most experienced courtiers with his finger on the Kremlin pulse, also dismissed the idea. “There is no need to scare people. This is extreme,” he said.

Why the world should care

The Kremlin’s political and ideological fixation on “conservative values”, ramped up following its invasion of Ukraine, is more and more being seen as a way to address real issues that concern the state due to a shortage of young men. The number of repressive demographic proposals will likely increase.