Facing ever-shrinking allocations from the state, the issue now confronting the Russian military is not how to bolster its budget but how to make the most of the money it gets, analysts and officials say.


The military's financial plight was highlighted Thursday when Defense Minister Pavel Grachev pleaded poverty to his fellow cabinet ministers, demanding that the government release the rest of the army's budget.


The army's share of the national wealth is falling in real terms as a percentage of gross national product. And even as the army shrinks in size, unexpected expenses have kept it in enormous debt.


"That's an issue the Security Council is going to discuss," Vladimir Klimenko -- aide to Yury Baturin, President Boris Yeltsin's national security adviser -- said in an interview Friday.


Klimenko suggests that the army will have to reallocate its expenditures away from maintenance and toward investment in money-saving high-tech equipment to preserve its state of readiness.


Klimenko also predicted that the army will gradually increase the level of civilian managers within its ranks, adding, however, that they would work only in non-combat fields.


Part of the problem lies in the very size of the military. Roy Allison, head of the Russian and CIS program at the Royal Institute of International Affairs in England, said even a massive firing of the army's bloated upper echelons would not help.


"I don't see how that in itself would amount to much of a saving," he said. "There are very sharp increases in costs that were not taken into account."


Enormous unexpected expenses have arisen at a time when the military's share of GNP has fallen from 8 percent in 1991 to about 5 or 6 percent this year, Allison said. Those costs have included the decommissioning of nuclear facilities, the return of soldiers to Russia from Eastern Europe and the Baltics and the high cost of the army's planned shift toward contract soldiers.


A recent Yeltsin decree allowing the military to reduce its level of readiness has brought about some saving, Allison said.


Regardless of the military's path toward efficiency and thrift, it will have to do something. In a recent opinion piece in The Moscow Times, a senior economist said the military is hobbling the civilian economy.


"Currently, 30 percent of the population is living below the poverty line," wrote Viktor Belkin, a professor of economics and a senior researcher at the Institute of National Economic Forecasting.


"If a quarter of the military budget were distributed among these people, all of them could be lifted out of poverty."