Military personnel who sign a contract to participate in the full-scale military invasion of Ukraine from August 1 to December 31, 2024 will receive a starter one-time payment of RUB400,000 ($4,363), more than double the previous sum of RUB195,000, RBC business portal reports citing a presidential decree signed by Vladimir Putin.

As followed by bne IntelliNews, most recently Moscow boosted the one-time starter payment for volunteer military conscripts to as much as RUB1.9mn ($22,000).

bne IntelliNews has already suggested that Russia will focus on recruiting paid contract servicemen for the war in Ukraine, rather than resorting to a potentially unpopular mass mandatory draft. This was confirmed by newly appointed army chief Andrei Belousov, who earlier in May ruled out a mass-scale mobilisation.

At the same time, pumping state funds into the military is overheating the Russian economy and worsening the tight labour market crisis. Russia most recently has moved into the upper-middle-income bracket rating of economies by the World Bank.

Some reports warned that Russia’s full-scale military invasion of Ukraine is fundamentally reshaping the Russian labour market and ending the era of cheap labour.

Nevertheless, in the latest decree, Putin also recommended that the regional authorities double the salary of the active contractors to at least RUB400,000.

Currently, in addition to starter payments, military contractors can count on:

·    monthly payments (from RUB210,000);

·    mission-driven payments (from RUB8,000 to RUB50,000);

·    allowances and bonuses;

·    payments in case of injury (from RUB3mn);

·    disability payments (from RUB0.78mn);

·    insurance payments depending on the severity of the injury (from RUB80,000);

·   a one-time payment in equal shares to the family members in case of death (total of RUB2.96mn).

According to the Ministry of Defence data as of early July 2024, about 190,000 Russians have signed contracts with the defence ministry since the beginning of 2024. In December 2023 the Ministry of Defence estimated the number of contractors at 640,000, and most recently in June, Putin estimated their number at 700,000.