A New Model Army.(World Affairs)(Russia builds new army)

Byline: Owen Matthews; With John Barry in Washington and Anna Nemtsova in Gori With in Washington and in Gori

Russia's military may be no match for NATO's. But it doesn't have to be.

The Russian army on the March is a terrifying sight--part Stalingrad, part Mad Max. In the Georgian town of Gori late last month, Russia's advance guard rode freshly painted tanks and armored personnel carriers in neat formation, crushing barriers and rolling over the Georgian Army with ease. "Behind the vanguard trailed Chechen and Ossetian irregulars in beards, skullcaps and running shoes, riding dirty Ladas and Soviet ambulances. Russian officials shrugged off reports of looting, calling it a "tradition of war." Some things, in other words, haven't changed. But for all that there was no denying that the Russians won with ease--and that in itself shows that something is going right with Russia's military machine.

Remember that just a decade ago this same Army was humiliated by a gang of Chechen rebels. Now the Russian steamroller is back in business, and able to execute the plans of an increasingly ambitious Kremlin. Last week, when Russian President Dmitry Medvedev announced he was recognizing the breakaway republics of South Ossetia and Abkhazia, he said that he "wasn't afraid" of a new cold war. That may have been empty swagger--analysts agree that Russia is still very far from being able to take on NATO. But it is slowly and steadily creating an Army more than capable of dominating its own backyard.

As with most things in Russia today, the change is in part because of the country's vast new oil wealth. In 2006, then President Vladimir Putin inaugurated a $200 billion military overhaul. Annual budgets were increased to $40 billion a year, up from $15 billion in 2000, when Putin came to power. This money has been used for better training and morale-boosting measures like better pay and perks. Deputy Head of the Russian General Staff Anatoly Nogovitsyn says that the lessons of defeat in Afghanistan and Chechnya have been obvious for years--but "there were no resources" to capitalize on them. "Now," he says, "a new era has started." Russia's military today is "a reinvented institution and a military force to be reckoned with," says retired British general Sir Michael Rose.

The architect of the military revolution is Anatoly Serdyukov, a chubby 46-year-old former lawyer who managed a chain of St. Petersburg furniture stores before being recruited by his old friend Putin to reform Russia's armed forces in February 2007. According to defense analyst Ruslan Pukhov of the Moscow-based Centre for Analysis of Strategies and Technologies, in the year and a half since Serdyukov became Defense minister, the Army has seen "one grandiose scandal after another." But that's meant as a compliment: hired to end corruption and inefficiency, Serdyukov has delivered by firing nearly a third of the top officers of the Central Military Administration, selling off billions of dollars worth of land and real estate and launching an anticorruption audit soon after his appointment last year. Just days later, Viktor Vlasov, a general responsible for providing apartments to officers, shot himself with his own engraved Makarov pistol, and dozens of top-level resignations followed, including Chief of the General Staff Yuri Baluyevsky. Their replacements are considered by analysts to be more forward-thinking, better trained and younger.

Perhaps Serdyukov's most important move has been to take on the military's insistence on universal conscription. In reality, only 8 percent of eligible Russian youths have served in recent years, but fines on draft dodgers provided income for corrupt officers, says Ella Polyakova of the Soldiers' Mothers of St. Petersburg. The old system was so badly managed that, as the Air Force's commander in chief, ...