Russians call it the “privatization” of the armed forces. The world’s second most powerful military machine now lies in disarray. Desperately short of recruits, the former Soviet Army cannot adequately guard its own firepower. Last week President Boris Yeltsin even charged that officials of the Ministry of Defense were stealing and selling entire ammunition depots. Some of the weapons find their way into the hands of organized-crime rings. Others are snapped up by fighters in ethnic conflicts that Moscow can no longer contain.

So far, the collapse has not affected the Soviet nuclear arsenal, which is still well guarded and well serviced, even amid the chaos. The trouble is that protecting the nukes drains scarce resources away from the current mission of the Russian Army. With the cold war over, Moscow is setting aside plans for a superpower war and focusing instead on quashing local disturbances. But there’s little money to build the mobile units needed. “Not only are they incapable of stopping a Western incursion,” says Paul Felgenhauer, a military analyst in Moscow, “they barely have enough resources to stop some [ethnic] irregulars.”

Outside Russia, new armies have sprung up overnight. During the cold war, Moscow placed much of its best equipment on the periphery to protect against external attack. As a result, when the Soviet Union collapsed, some outlying republics suddenly came into possession of superior fighting machines. Azerbaijan, for example, may even exceed the limits set by the treaty on Conventional Forces in Europe. Azerbaijan is no threat to the West, but even a few tanks could make a difference in its five-year struggle with Armenia.

The Russian military faces a catastrophic shortage of manpower. One top administrator of the draft said last week that only one in five young men had answered the autumn call-up. Russia was even forced to suspend its pullout from the Baltics last fall owing to a lack of servicemen to haul equipment around. The military leadership has been hoping a voluntary army would solve its manpower problems. But the first year’s results are dismal. Instead of 1992’s 100,000 men, only 13,500 signed up as volunteers.

The manpower shortage means that costly equipment often goes unguarded. There’s a ready market for it. “Everybody in Moscow wants a gun these days,” says Anatoly, a former arms trader in Moscow who claims he quit the business after cops forced him to pay a $10,000 bribe to stay out of jail. Weapons aren’t the only army property being “privatized.” Gas and aviation fuel, radio sets, trucks, Jeeps and other vehicles are also regularly pilfered, prosecutors say. In a spectacular case last fall, the commander of an air force base and his deputy were arrested for allegedly using combat transport planes to ferry paying customers between the Far East and central Russia.

The booming market in weapons can destabilize areas where the Soviet Army used to keep the peace. When Russian troops withdrew last June from Chechnya, a small ethnic enclave that had proclaimed its independence from Russia, they left behind 13,000 firearms and thousands of grenades, many of which ended up on the local black market. Now Grozny, the Chechen capital, is awash in weapons. Private citizens carry automatic rifles openly. The president, Jokhar Dudayev, says the population must be prepared to defend itself against hostile Russians. “Everyone should be armed,” he insists. As gunfire echoes outside his office, Dudayev is asked if the lawlessness doesn’t worry him. “Not me,” he says, pulling a gleaming Stechkin pistol from his belt. “Isn’t she a beauty?”

Where weapons are available, there is likely to be bloodshed. A NEWSWEEK correspondent traveling through the mountains of southern Russia last October visited an open-air arms bazaar at the side of the road. Kalashnikov assault rifles were laid on blankets spread out on the ground. Hand grenades, boxes of ammunition, pistols and grenade launchers were displayed from the trunks of cars. “You can get anything here,” said one seller. Days later fighting erupted there between two ethnic groups, the local Ingush and the North Ossetians, who live just a few miles down the road. The very spot where the arms were being peddled had become a battleground.