Lyubov Kudelina, the first female Deputy Minister of Defense in Russian/Soviet history, will supervise the Defense Ministry's Main Directorate of Military Economic Analysis and Expert Examination, and the Main Finance and Economic Directorate [the former Main Directorate for Budget and Finance] (Agentstvo voyennykh novostey, 30 March). She will serve in a position with a rank equivalent to Colonel-General. Kudelina said in a Mayak Radio interview that her appointment was unexpected (31 March).

• A deputy finance minister since 1999, Kudelina will oversee financial operations and expenditures for the reform of the Armed Forces and the program for re-equipping the army in 2001-2010. According to Vice Premier Ilya Klebanov, this program may be signed by the president as early as mid-April (Izvestiya, 30 March).

• Kudelina has worked on defense sector financial issues in the Ministry of Finance since 1996, in charge first of the defense sector and then of all "militarized agencies." She also worked with Sergey Ivanov in the Security Council on military finance and reform (RIA Novosti, 28 March).

Both government officials and the media have praised the new deputy minister's professional skills and abilities, considering her Finance Ministry experience as vital to undertaking reform of military finances and as enabling her to "take on the generals."

• Speaking on the Vesti television program, newly appointed Minister of Defense Sergey Ivanov said Kudelina is "one of the best specialists in the country on the financing of the military structures, including the Ministry of Defense [MoD]." Kudelina's appointment occurred "not because she is a woman, but because she is one of Russia's best specialists on the issues. . . . I am counting on her, not only in planning the disbursement of monies for the necessities of the Defense Ministry, but in particular in the plan for oversight over the expenditure of funds" (RIA Novosti, 28 March).

• RF Deputy Prime Minister Valentina Matviyenko stressed that Kudelina is a "literate professional" who knows the contemporary situation in the army "better than anyone." The appointment of a woman and a professional to the Defense Ministry is "quite justified" and is "a good sign, since we are talking about going toward a civilian society and the demilitarization of the militarized structures" (RIA Novosti, 29 March).

• The daily Izvestiya considered it a "military sensation . . . that for the first time in Russian history Lyubov Kudelina [i.e., a woman] who had occupied the post of Deputy Finance Minister, has become Deputy Defense Minister." Perhaps it is not a sensation, said Izvestiya, "because in the past the commanders of the [military] districts used to stand to attention in front of Kudelina, who used to distribute the military's financial flows" (29 March). Izvestiya added the next day, "the prevailing system of armed services finance is such that you can find out how much guard dogs cost, for example, but you will not find out what an aviation regiment or motorized rifle division costs. Kudelina is the only person who has this information in her head. She is capable of making and implementing any decision, even if there is major resistance."

• The business daily Kommersant wrote, "for the first time an outsider will be able to look into the mechanism for the distribution of funds within the Defense Ministry -- the task the President has given her. This will be another trump card to use against the generals during the army cuts" (29 March) -- either budgetary or personnel.

• Highlighting her impartiality, the government daily Rossiyskaya Gazeta wrote: "No one has any doubts as to the professionalism of the former Deputy Finance Minister. . . . only a person who stands apart [from allegiance to special or corrupt interests], who is very competent and impartial will finally succeed in solving the financial problems [related to] optimally reforming Russia's Armed Forces" (30 March).

The new Deputy Minister of Defense is likely to face extensive opposition, which will hamper her effectiveness. Oligarchs who have used defense funding to enrich themselves will see her as an obstacle. Resistance to change is also likely from the general officer corps, given the endemic corruption among its members. Moreover, if the MoD under Ivanov becomes a "super-ministry," which aims to oversee not only the Armed Forces, but all of Russia's "militarized agencies," Kudelina will face opposition from them as well.

• Exiled oligarch Boris Berezovskiy's grani.ru website claimed that, "Lyubov Kondratevna's reputation among military financiers has been poor, to put it mildly. Her relentless desire to keep military expenditure within the limits established by the Finance Ministry has been viewed on Arbat Square [location of the Defense Ministry] as an anti-Army policy, as the strangulation of national defense. And now the military financiers' constant opponent becomes their direct boss" (29 March).

• According to Izvestiya, MoD personnel know Kudelina's "principled approach" to funding matters and assume her arrival could lead to "sensational resignations and dismissals, and it is not ruled out that there will also be criminal cases concerning the nontargeted use of budget funds in the Army" (30 March).

Kudelina's recent predecessor in the MoD, Colonel-General Georgiy Oleynik, lost his budget and finance position in a scandal over the manipulation of 450 million dollars in defense funds, which were used in an elaborate scheme to eliminate the tax indebtedness of Gazprom, the giant Russian energy firm, causing the MoD to lose roughly 300 million dollars.

• In commenting on Oleynik's potential indictment, Kudelina affirmed the general's innocence, a stance that may help her to establish rapport with the generals (Grani.ru, 12 February).

According to Major-General (ret.) Aleksandr Piskunov, member of the the RF State Duma Budget Committee, Kudelina will be engaged in efforts to resolve the imbalance between strictly "defense" funding and "security" funding for the other "militarized agencies" [silovyye vedomstva], including the MVD, Federal Security Service, Foreign Intelligence Service, Federal Border Service, Federal Agency for Government Communications and Information, and Ministry of Civil Defense, Emergencies, and the Elimination of the Consequences of Natural Disasters.

• "Expenditure on safeguarding security and law and order is more than one-half of MoD's expenditure. This is to some extent right -- the internal threat has increased. But we have a vast number of special services -- we have the cardinal's guards fighting against the king's musketeers. We have more than 10 bodies engaged in operational investigations. . . . Lyubov Kondratyevna will be handling the task of creating a balanced relationship with the other defense and security departments." (Izvestiya, 30 March)

There is one piece of evidence that Kudelina's role in resolving the interagency feud over funds has been planned for some time. Prime Minister Kasyanov appointed Kudelina to the Interdepartmental Commission on State Secrecy in September of 2000 (government.ru, 28 September 2000). During the fall 2000 debate over the defense budget, classification became a weapon used to withold information from outside interests who sought to influence the budgetary process. She commented at the time that "openness of military expenditures leads to a clash of lobbyists' efforts, which complicates normal work around the budget" (Itogi,17 November 2000). Kudelina's appointment to the secrecy commission gave her restricted access, denied to others.

• Agentstvo voyennykh novostey asserted that the new defense appointments of Kudelina and Colonel-General Aleksey Moskovskiy, as another deputy minister, meant that "from now on the Defense Ministry will be the main charterer of military equipment and weapons for the Armed Forces, not the General Staff as it used to be." (30 March)

In the long run successful Armed Forces reform requires extending reform to Russia's other militarized agencies.

• President Putin attempted during 2000 to put together a consensus among all those militarized agencies in favor of a wide-spread reform. However, the security or "militarized" ministries and services successfully resisted, meaning military reform was confined largely to the Ministry of Defense.

• If the Armed Forces General Staff is removed from the acquisitions process, it would decrease the potential of that agency to dominate the other militarized agencies financially. That in turn may lessen the objections of the latter to a broader reform of Russia's defense and security sector. It remains to be seen whether increased budgetary secrecy and a reduced General Staff role in defense acquisitions would be sufficiently effective mechanisms to bring the other militarized agencies into consensus on wide-scale reform.

In the short run Lyubov Kudelina is unlikely to effect significant change in the defense financial area, unless she receives extraordinary support from the President and Government. She will surely have the support of Defense Minister Sergey Ivanov, but Ivanov's own success will depend upon powerful support from President Putin, who was himself unable to force through similar reforms in 2000.

Successful military reform also requires funding, however, and Russia currently has little money available for defense or defense reform. In addition, institutional conflict over resource allocation between the MoD and the Ministry of Finance will further thwart her efforts.

While President Putin has reorganized the defense export sector under a single agency -- Rosoboroneksport -- and inaugurated yet another reform of the defense industrial sector, under the supervision of Deputy Prime Minister Ilya Klebanov, neither effort is liable to generate the large amount of cash needed for defense reform, in the short run.

The funding Kudelina will need must come from cleaning up corruption and mismanagement in the MoD, and from extending reform to the other "militarized agencies." According to the Russian press, she appears capable of undertaking the former. Resolving the latter problem will require powerful political support.

Lyubov Kondratyevna Kudelina was born 4 April 1955 in Vladivostok; her father was a naval officer; she has an 18-year old son, who is a student in the Ministry of Finance's Academy of the Budget and Treasury; she enjoys driving cars (Rossiyskaya Gazeta, 20 March).

Graduated from the Moscow Finance Insitute in the "economist" speciality (Lenta.ru, 28 March).

1977-1992, assigned to various posts in the RSFSR Ministry of Finance, which became the RF Ministry of Finance (Lenta.ru, 28 March).

1992, named Deputy Head of the budget department -- Chief of the General Department for Budget Consolidation of the Ministry of Finance (Lenta.ru, 28 March).

Was member of a Ministry of Finance Commission to review commercial banks involvement in fulfillment of the state defense order (Prikaz Minfina RF, 9 April 1996. No. 193, (http://mingar.park.ru/private/document.asp?no=1419109)).

1996-1998, headed the Finance Ministry's Department for the Defense Complex. In 1998 the law enforcement agencies were added to her portfolio (Lenta.ru, 28 March; Agentstvo Voyennykh Novostey, 28 March; Komsomolskaya Pravda, 31 March).

Since 1998, a member of the Ministry of Finance Collegium, according to Interfax (Lenta.ru, 28 March).

July 1999, appointed Deputy Finance Minister (Agentstvo Voyennykh Novostey, 28 March). According to new Defense Minister Sergey Ivanov, she worked with him at the Security Council on reform of "the Armed Forces and the entire military organization of the country" (RIA Novosti, 28 March).

29 September 2000, appointed by Prime Minister Kasyanov to the Interdepartmental Commission on State Secrecy (government.ru, 28 September 2000).

28 March 2001, appointed RF Deputy Minister of Defense (RIA Novosti, 28 March).