Putin Doubles Face Money For War Volunteer Recruitment In Ukraine To IDR 75 Million

Russian President Vladimir Putin/PHOTO: Mikhail Klimenyev/Russian Presidential Press Service/TASS

JAKARTA - Russian President Vladimir Putin has doubled advance payments for volunteers fighting in Ukraine.

This is a step aimed at facilitating military recruitment but will most likely create an imbalance in the economy.

Reported by Reuters on Wednesday, July 31, all Russian citizens who sign contracts with the army will now receive an advance payment of 400,000 rubles (USD 4,651 equivalent to IDR 75.7 million).

The decision also recommended that local governments match this payment from their budget to at least the same amount.

With a minimum monthly payment for soldiers participating in the special military operation' set at 204,000 rubles, the new decision increased the minimum annual wage in the first year of service to 3.25 million rubles (37,791 US dollars or equivalent to Rp615 million).

Monthly salaries for officers are higher and depend on their rank.

All recruits also receive additional money to participate in attacks or destroy enemy tanks and other machines.

Earlier this month, the Mayor of Moscow set advance payments for city residents who registered for the war in Ukraine amounting to 1.9 million rubles (21,777 USD) from the city budget, bringing their annual salaries in the first year to 5.2 million rubles.

This latest increase means the minimum annual salary for Russian contract soldiers fighting in Ukraine will exceed the average wage in Russia more than three times, and the minimum salary for Moscowns exceeds the average wage more than five times.

Such payments have helped Russia avoid a new national mobilization after a problematic campaign in 2022 led to a massive exodus to neighboring countries.

However, some economists argue the payments create a wage spiral in the economy.

The increase in wages is also supported by a series of other measures, such as exemptions from monthly interest payments on consumer loans to volunteers and state guarantees for the loan in the event of death.

These measures have prompted potential volunteers to take consumer loans and contribute to sustainable consumer loan growth, although the central bank raised its key interest rate to cool the economy.

Russian officials say some 190,000 people have been volunteers this year to fight in Ukraine, compared to 490,000 contracts signed by 2023.