"To reassure those who believe that the budget is militarized I say that 2.6-2.7% of GDP are earmarked for national defense," Mr. Ivanov stated at the government's meeting on Monday.
"A sizeable part of the additional funds for the Defense Ministry's needs will be spent on compensating for the benefits to servicemen, in particular, on financing the enlistment offices, which was put within the competence of the military department," Mr. Ivanov noted.
According to him, the lion's share of the increase will be spent on financing the state defense contract.
The draft budget for 2005, on the whole, suits Russia's Ministry of Defense provided the monopolists' prices do not grow, the head of the department stated.
"The earmarked sums of money will meet the requirements of the armed forces at the minimal level if the prices of the natural monopolies' services do not grow over the planned level," he said at the government's meeting on Monday.
"This growth, in principle, takes place every year, which makes transportation more expensive and leads to a growth of the fuel prices and of prices in general, owing to which modernization of the army may fail to materialize," Mr. Ivanov noted.
The Minister also stated that Russia's Defense Ministry is short of up to 3 billion rubles (about $100 million) needed for providing housing to servicemen.
"The question of financing the official housing stock has not been decided yet," the Minister went on to say. "We are short of more than 3 billion rubles."
"Definitely, we are now switching over to the new mortgage system of providing housing to servicemen but this does not mean that we do not have to fulfill the earlier assumed obligations," Mr. Ivanov stated.
