Putin taps economist to run defence, replacing Sergei Shoigu in unexpected move

MOSCOW – Russian President Vladimir Putin tapped a civilian economist as his surprise new defence minister on May 12 in an attempt to gird the country for economic war by trying to better utilise the defence budget and harness greater innovation to win in Ukraine.

More than two years into the conflict, which has cost both sides heavy casualties, Mr Putin proposed Mr Andrei Belousov, a 65-year-old former deputy prime minister who specialises in economics, to replace Mr Sergei Shoigu, 68, as defence minister.

Mr Putin wants Mr Shoigu, defence minister since 2012 and a longstanding ally, to become the secretary of Russia’s powerful Security Council, replacing incumbent Nikolai Patrushev, and to also have responsibilities for the military-industrial complex, the Kremlin announced on May 12.

Mr Patrushev will get a new, as yet unannounced, job.

The changes, certain to be approved by parliamentarians, are the most significant Mr Putin has made to the military command since

sending tens of thousands of troops into Ukraine in February 2022

in what he called a special military operation.

Kremlin spokesman Dmitry Peskov said the change made sense because Russia was approaching a situation like the Soviet Union in the mid-1980s, when the military and law enforcement authorities accounted for 7.4 per cent of gross domestic product.

That, said Mr Peskov, meant it was vital to ensure such spending aligned with and was better integrated into the country’s overall economy, which was why Mr Putin now wanted a civilian economist to head the Defence Ministry.

“The one who is more open to innovations is the one who will be victorious on the battlefield,” Mr Peskov added.

A former economy minister, Mr Belousov is known to be very close to Mr Putin and shares the Russian leader’s vision of rebuilding a strong state. He has also worked with Mr Putin’s top technocrats who want greater innovation and are open to new ideas.

Mr Belousov has also played an important role in overseeing Russia’s drone programme.

The shake-up, which caught the elite off-guard, indicates Mr Putin is doubling down on the Ukraine war and wants to harness more of Russia’s economy for the war after the West sought, but failed so far, to sink the economy with sanctions.

Russia’s economists have so far largely ensured economic stability and growth despite the toughest sanctions ever imposed on a major economy, even though the failings of the Russian military were laid bare shortly after the invasion.

“The proposal to appoint one of the main court economists and the main state minister in the economic bloc to head the Defence Ministry may mean that Putin is planning to win the war with the defence industry plants and international markets,” said Mr Alexander Baunov, a former Russian diplomat who is now a senior fellow at the Carnegie Russia Eurasia Centre.

“The winning strategy in this case will not be mobilisations and breakthroughs, but slow pressure on Ukraine with the superior power of the Russian military-industrial complex and the economy as a whole, which, apparently, is supposed to be made to work more effectively for the front and rear.”

Mr Putin’s move, though unexpected, preserves balance at the top of the complex system of personal loyalties that make up the current political system.

The shake-up gives Mr Shoigu a job that is technically regarded as senior to his Defence Ministry role, ensuring continuity and saving Mr Shoigu’s face.

General Valery Gerasimov, the chief of Russia’s General Staff and someone with a more hands-on role when it comes to directing the war, will remain in post.

Mr Shoigu had been heavily criticised by Russian military bloggers for a series of retreats the Russian military was forced to make in 2022.

Mr Yevgeny Prigozhin, the leader of the Wagner mercenary group and one of Mr Shoigu’s fiercest critics, led an abortive mutiny he hoped would topple Mr Shoigu in 2023 before agreeing to call it off.

Mr

Prigozhin was later killed in a plane crash.

Mr Mark Galeotti, director of the London-based Mayak Intelligence consultancy, said the defence minister’s job in Russia at a time of war was to ensure the military had everything it needed, while General Gerasimov’s job was the “key one” as he now reported directly to Mr Putin, the commander-in-chief.

“In that context, having an economist, someone who has been speaking about the need to basically subordinate much of the economy to the needs of the defence sector, makes a certain amount of sense. It is now essentially a financial administrator’s job and Belousov can do that,” he added.

The change is likely to be seen as an attempt by Mr Putin to subject defence spending to greater scrutiny to ensure funds are effectively spent after a Shoigu ally and deputy defence minister, Mr Timur Ivanov, was accused by state prosecutors of taking kickbacks worth nearly US$11 million (S$14.9 million).

Mr Putin left Mr Alexander Bortnikov and Mr Sergei Naryshkin, the chiefs of the Federal Security Service and the Foreign Intelligence Service, in their posts.

Mr Sergei Lavrov, the country’s veteran foreign minister, will also stay in his job, the Kremlin said. REUTERS