Russia is doubling pay to recruit more soldiers. But many regions can't afford it

BUSINESS INSIDER:  The Kremlin wants regional governments to increase bonuses for new military recruits. But local authorities are having trouble finding enough money, Bloomberg reports.

An official told the outlet that some regions are asking Moscow for subsidies to comply with the request.

The request was part of a new decree issued by President Vladimir Putin at the end of July, which doubled the federal bonus payment recruits would receive. Through the end of the year, those who now join Russia's military will earn an upfront 400,000 rubles, or $4,651.

The decree asked regional authorities to match this figure from their own budgets.

Putin's order likely aims to replenish troops lost in Russia's invasion of Ukraine without having to rely on a forced mobilization, Bloomberg said. While the Kremlin does not publish Russian battlefield casualty figures, Western statistics estimate that recent months were some of the war's costliest for Moscow.

A troop shortage has also become increasingly apparent in recent weeks amid Ukraine's surprise incursion into Russian territory. Kyiv's intervention has been met with limited resistance, and the Kremlin is reportedly starting to pull frontline troops away from the main fight to defend the country.

In 2022, Russia did enact a nationwide mobilization, but the approach was widely unpopular, spurring a mass exodus out of the country.

And yet, if Moscow can't sustain its troop numbers through financial incentives, two officials told Bloomberg that a mobilization might be considered. Momentum is so far lacking, with regional authorities unable to meet a third of their recruitment quotas, a source said.

Some regions have applied their own bonus offers. Last month, Moscow's Mayor Sergei Sobyanin promised new recruits an upfront bonus of 1.9 million rubles, or $22,000.

St. Petersburg followed by pledging 1.6 million rubles.

While financial encouragement could help offset mobilization, Bloomberg noted that these above-wage payments risk adding pressure to an already overheated economy.

Reuters previously reported that these incentives could create a wage spiral, amplifying Russia's inflation. Wartime spending has already sent inflation soaring in the country, pressuring Russia's Central Bank to lift interest rates to 18% last month.