In a surprising move during the ongoing intense Russia-Ukraine conflict, Russian President Vladimir Putin suddenly removed his long-time ally Sergei Shoigu as Defense Minister and appointed economist Andrey Belousov, who has no military experience, as his successor. This decision has left global observers astonished.
This is the first time in 12 years that Russia has changed its Defense Minister. Despite rumors of reorganization, nobody could have anticipated that Putin would choose a civilian without a military or security background to lead the Defense Ministry. Belousov has previously served as Russia’s Minister of Economic Development and Deputy Prime Minister.
US State Department spokesperson Vedant Patel stated, “Our view is that this further demonstrates Putin’s determination to maintain his aggressive war against Ukraine at all costs. This war has severely drained Russia’s economy, and the Russian military has suffered heavy losses, with estimates of casualties reaching as high as 315,000.”
According to Reuters, six sources, some of whom have worked with Belousov, described him as a tough-talking and professional government insider. He led a campaign to extract more funds from big corporations for the country.
During wartime, the Russian Defense Minister must oversee massive financial flows, economic and industrial planning, while delegating daily battlefield management to others. Belousov’s capabilities likely impressed President Putin. He managed to collect around 300 billion rubles (approximately $30 billion) through heavy taxation of enterprises.
For many, choosing Belousov as Defense Minister indicates Putin’s reshaping of Russia for the long-term war in Ukraine.
A source familiar with Belousov’s work within the government told Reuters, “He is organized, systematic, tough. He likes to control everything.”
However, some criticize his strong nationalist views, believing they may be detrimental to private enterprises.
“Belousov has half Soviet blood, he is a very Soviet person,” a knowledgeable Russian senior source told Reuters. “He believes in the state, believes the state is paramount, believes the state should decide how to spend money.”
Belousov will need to find ways to circumvent Western sanctions, combat ongoing inflation, and face challenges from the military sector, where some may be discontent with his lack of military experience while others may be reluctant to change longstanding contracts and practices.
Some war bloggers suggest that Belousov’s skills will help eradicate widespread corruption between the military and defense industry, while others prefer a military figure as Defense Minister.
In his first public comments as Defense Minister nominee, Belousov notably reached out to the military, stating that soldiers need better housing, hospitals, and welfare.
According to Reuters, this appointment indicates that Putin not only aims to advance the military-industrial complex in the technological arms race against Ukraine and the West but also wants to utilize a broader economy to achieve this goal. Alexandra Prokopenko, a former advisor to the Russian Central Bank, said on social media platform X, “Putin’s top task is war.”
“War of attrition is won through the economy. Belousov supports stimulating demand from the budget, which means military spending will at least not decrease but rather increase,” Prokopenko said.
Belousov’s skills suggest he is unlikely to be heavily involved in battlefield decision-making, which will remain under the control of Chief of the General Staff Valery Gerasimov. As the Russian military attempts to advance into Ukraine, Putin retained Gerasimov in his position.
Putin’s spokesperson Dmitry Peskov explained the rationale behind choosing Belousov in Sunday’s briefing. He stated that due to the war, Russia’s defense and related expenditures as a percentage of Gross Domestic Product (GDP) have risen from 3% to 6.7% and are moving towards 7.4%. This figure harkens back to the mid-1980s Soviet Union.
“This is extremely important and requires special handling,” Peskov said.
Belousov’s task will be to control the budget, increase output and synergy, reduce corruption, ensure defense spending integrates reasonably into the broader economy, and be flexible enough to adapt to technological changes on the battlefield.
Ensuring civilian economy is not neglected and maintaining living standards at a generally acceptable level may also be part of Belousov’s mission.
Last month, Deputy Defense Minister and Shoigu’s ally Timur Ivanov was arrested and accused of accepting nearly $11 million in kickbacks. He denies any wrongdoing.
Sergei Markov, a pro-Kremlin political analyst, stated that with Russia’s special military operation in Ukraine, the Defense Ministry has received vast funds. Ivanov’s situation indicates that corruption has gone beyond normal bounds.
Sources who have worked with Belousov mentioned to Reuters that the former prime minister has viewed businesses as swindlers and advocates for more redistributions by the state.
War blogger Rybar said, “Belousov’s appointment as Defense Minister signifies the start of a significant audit and restructuring of all financial models within the defense establishment.”
Since Russia’s invasion of Ukraine in February 2022, Western countries have imposed multiple rounds of sanctions on Moscow to cut off Russian funding sources and pressure Putin to end the war. The US and EU have also imposed sanctions on entities and individuals aiding Russia in evading sanctions.