Russia is beginning to show signs of financial strain from its prolonged war in Ukraine. St. Petersburg has slashed its military recruitment bonus from 3.5 million rubles ($43,000) to just 400,000 rubles ($4,900), a reduction of nearly 89%. The city had already lowered the payment to 1 million rubles in October before announcing another reduction in November. New recruits can still receive an additional 400,000 rubles from the federal government, bringing the combined guaranteed signing bonus to approximately $9,800.
The cuts are spreading beyond St. Petersburg. Mari El reduced its regional recruitment bonus from approximately $28,300 to $4,900, while Mordovia lowered payments from $36,900 to $9,800. Irkutsk and Novosibirsk have also reduced incentives. These bonuses became an important part of Russia’s recruitment strategy because Moscow has attempted to maintain its military manpower through paid contracts rather than another politically disruptive mass mobilization. The government offered enormous financial incentives, particularly in poorer regions where a military contract could provide several years of ordinary wages. Now some of those payments are disappearing, even as the war continues consuming manpower.
The Conflict Intelligence Team suggested that St. Petersburg may have already fulfilled its annual recruitment target, allowing authorities to reduce payments toward the end of the year. Regional governments have incentives to recruit soldiers at the lowest possible cost, and bonuses could increase again when new recruitment targets are established in 2027. A government reducing payments because it has sufficient recruits faces a very different situation from one reducing payments because it can no longer afford them.
Nevertheless, the financial pressure on Russia’s regional governments is becoming increasingly apparent. St. Petersburg is attempting to contain a budget deficit estimated at approximately $1.34 billion. Officials have reportedly cut planned spending on social programs and urban improvements by $860 million and are considering eliminating about 15% of government and public-sector positions. Other regions are confronting similar problems. Russian regional governments had accumulated combined budget deficits exceeding $1.65 billion by September. Ukraine’s Foreign Intelligence Service has also reported that 65 Russian regions are preparing spending reductions between 2027 and 2029, although those projections should be treated as assessments from a party to the conflict rather than established outcomes.
