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. Last Updated: 07/27/2016

Finding Hope in a Paradox

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When President Vladimir Putin unexpectedly named Anatoly Serdyukov as defense minister six months ago, I was certain it amounted to a rejection of any serious attempt to modernize the military. After all, Serdyukov had spent the better part of his professional life managing a firm that sold furniture. It seemed a clear illustration of the Peter Principle, which says that in any hierarchical system employees tend to rise to their level of incompetence. Needless to say, I never thought that I would be so disappointed to see Serdyukov submit his resignation to Putin, nor that I would be genuinely happy to see Putin reject it.

In this case, it is possible that, instead of the Peter Principle, which has become so widespread in Putin's power vertical, we have a unique phenomenon that can be termed the "Serdyukov Paradox." Former Defense Minister Sergei Ivanov was unable to solve what Putin considered the most important organizational problem -- determining where all the money allocated to various defense agencies has gone. Under Putin, the military budget rose from 109 billion rubles ($4.4 billion) in 1999 to 860 billion rubles ($34.6 billion) in 2007, but this occurred without any corresponding fundamental improvements to match the increases.

Discipline and battle readiness remain at their former low levels, and the plan to switch a portion of the conscripted armed forces to volunteer contract duty has been a washout. The senseless expenditures are most evident in the re-armament program, which, according to experts and even some government officials, is approaching a complete breakdown. Increased funding has only led to sharp price increases in the defense manufacturing sector, while the number of weapons produced remains unchanged.

Of course, Putin had no intention of carrying out military reforms in an election year. He addressed the problem in the only way he knows how -- bureaucratically. He removed Ivanov, who had little competence in financial matters, and replaced him with Serdyukov, who headed up the Federal Tax Service and knows a thing or two about controlling finances.

But as Serdyukov attempted to fulfill the president's directive to put the military's finances in order, he immediately realized that he could not accomplish the task by relying on the existing Defense Ministry staff, which consisted exclusively of military officials. It is clear that they have a direct corporate interest in inflating military spending as much as possible.

What Serdyukov needed was a staff of new people who could figure out where all of this military financing went, and he started to recruit them. The first people to join him were former colleagues from the Federal Tax Service. Next came top managers from the private sector such as Mikhail Motorin, who was vice president of TNK-BP. If tax officials know how to track finance flows, then business managers know how to supervise large projects.

U.S. Secretary of Defense Robert McNamara initiated similar reforms in the 1960s. He instituted an extensive program of expense planning and control, which has remained in place to this day. This system gave the defense department the ability to get maximum returns on its defense expenditures. A number of Russian experts, including Vitaly Shlykov of the Defense Ministry public council, believe that the time has come for these types of reforms to be instituted in Russia as well.

So let's do it! No problem at all! The only thing we have to do is fundamentally change the way the Defense Ministry functions. But to achieve that goal, the ministry must recruit civilian experts like in the Pentagon, where thousands of lawyers, auditors and other specialists are employed.

If Serdyukov takes the initial steps in this direction, it could result in a paradox. The ordinary bureaucratic act of appointing a competent and conscientious person to put an end to a problem sometimes ends up as the catalyst to a process of fundamental reform.

It is far from certain, however, that these reforms will be carried out. In the current power vertical, reformers are doomed to rely exclusively on their own bureaucratic resources, without even trying to enlist public support. This minimizes their chances for success.

After many years of the military establishment falling behind, if the new defense minister manages to take even a few steps in the right direction, then we will be able to speak of the Serdyukov Paradox.

Alexander Golts is deputy editor of the online newspaper Yezhednevny Zhurnal.