Beluosov is Putin's new weapon

By appointing an economist as defense minister, the Russian president showed that he is subordinating the economy to military needs, preparing the country for a protracted war in Ukraine

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Andrei Belousov, Photo: Reuters
Andrei Belousov, Photo: Reuters
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

Without any military experience, Andrei Belousov, an economist and Orthodox believer who enjoys hiking, seems like an odd choice for Russia's new defense minister at a time when Moscow is waging war against Ukraine.

Many in Russia's political and military leadership were shocked by the dismissal of Sergei Shoigu, Putin's loyal defense minister since 2012, current and former officials and sources close to the Kremlin told The Moscow Times.

Some have also expressed concern that the reshuffle could threaten Russia's invasion of Ukraine at a time when the military is regaining momentum on the battlefield.

One source close to the Kremlin said that the decision to remove Shoigu was made last summer after the Wagner mercenary group rebelled against the military leadership.

"The military just doesn't like Shoigu," the source said.

Although Vanger's rebellion marked the beginning of the end for Shoigu, the paper's sources said his replacement was "a big surprise bordering on shock" for Bellows.

"This appointment makes no logical sense. I've already seen 20 versions of why Belous is a good defense secretary. But it's all complete nonsense," said one current government official, who spoke on condition of anonymity.

Shoigu has been the Minister of Defense since 2012.
Shoigu has been the Minister of Defense since 2012.photo: Beta / AP

However, some sources have assessed that Putin's choice of Belousov is a logical and expected move aimed at optimizing military spending while the Kremlin sees the possibility of a protracted conflict in Ukraine.

Reuters sources, some of whom have worked with Bellows, described him as a sharp and professional government insider who once campaigned to extract more money from big companies for the state, proving he was adept at managing the system.

Reuters writes that in times of war, the Russian defense minister has to oversee huge financial flows and economic and industrial planning, while leaving the day-to-day management of the situation on the battlefield to others. He adds that Belousov's ability to get the job done - having collected around 300 billion rubles ($XNUMX billion) in corporate windfall tax - is likely to have impressed President Vladimir Putin.

The appointment of Belousov signals that Putin is focused on subordinating the Russian economy to military needs, in the expectation that the war in Ukraine could shape Russia's future in the coming years, the New York Times estimates.

"He is very organized, systematic, tough. He likes to control everything," a government source who worked with Bellows told Reuters.

However, some have criticized the 65-year-old former first deputy prime minister for his strongly statist views, which they say have sometimes put private entrepreneurship at a disadvantage.

"Belousov is half Soviet, a very Soviet person," said a top government source familiar with the situation.

"Belousov believes in the state - that the state is supreme and that the state should decide how money is spent," the source added. "Belousov has a very difficult job - some generals probably won't like him being there."

Belousov and Putin in the Kremlin in November 2023.
Belousov and Putin in the Kremlin in November 2023.photo: Beta / AP

Analyst Tatjana Stanovaja believes that, despite the surprising nature of these changes, of which there will be more, the overall policy and decision-making mechanisms will remain unchanged.

"Putin's primary goal is to improve the state's capacity to more effectively support military needs, while most elements of the existing 'structure' will remain intact," X posted online.

Reuters reports that Belousov will have to find a way around Western sanctions, deal with persistent inflation, and work in a sector where some will be bothered by his lack of military experience, and be prepared to protect long-established contracts and ways of working.

Some war bloggers say his skills will help root out endemic corruption between the military and the defense industry, while others would prefer someone with military experience.

The appointment suggests that Putin wants not only to strengthen the military-industrial complex in a technological arms race against Ukraine and the West, but also to better harness the wider economy to that end, according to a Reuters analysis.

"Putin's priority is war," said Alexandra Prokopenko, a former adviser to Russia's central bank.

"A war of attrition is won economically. Belousov advocates stimulating demand from the budget, which means military spending will stay the same or increase."

In 2017, Belousov helped establish a national drone development program and, according to Russian media outlet RBC, was among those who convinced Putin in 2017 that the digital economy and blockchains were key to the future.

His skills suggest he is unlikely to be heavily involved in battlefield decision-making, which will remain the responsibility of General Valery Gerasimov, the chief of the General Staff, who has kept his job as Russian forces try to advance in Ukraine, and finally Putin.

Putin and Shoigu at the military parade in Moscow on May 9
Putin and Shoigu at the military parade in Moscow on May 9photo: Reuters

Shoigu will become Secretary of the Security Council, a high-profile post that will keep him close to Putin, but he may have less influence.

Putin's spokesman, Dmitry Peskov, explained the reason for Belousov's election at a press conference late last night, stating that defense and related costs have risen from three percent of GDP to 6,7 percent due to the war and are trending toward 7,4 percent, which is as he said, it was reminiscent of the Soviet Union in the mid-1980s.

"It is extremely important, and requires special handling," Peskov said.

Reuters writes that Belousov will control that budget with the task of increasing production and synergies and reducing corruption, while ensuring that military spending is sensibly integrated into the broader economy and is flexible enough to accommodate technological changes on the battlefield.

It is also likely that part of the task will be to ensure that the civilian economy is not neglected and that living standards remain broadly acceptable.

Putin said in February that Moscow would not repeat the Soviet Union's mistake by waging an arms race that ate up too much of its budget, but should develop the defense industry in a way that boosts Russia's overall scientific and industrial potential.

Russia's problem with military corruption

Some believe that Belousov, a former Putin economic adviser, economy minister, first deputy prime minister and briefly acting prime minister, has become one of the most powerful players in modern Russia.

"He is someone Vladimir Putin trusts a lot," said another government source. "If the system remains as it is, he is not only improved, but has risen to the same level as the prime minister, if not higher."

At a time when Russia is locked in what Putin calls an existential struggle with the West and needs more control over state finances than ever, Sergei Markov, a former Kremlin adviser, said one of Belousov's tasks will be an anti-corruption purge.

Belousov yesterday in the Kremlin
Belousov yesterday in the Kremlinphoto: Reuters

Last month, Timur Ivanov, deputy defense minister and Shoigu ally, was arrested and accused of taking nearly $11 million in bribes in exchange for lucrative military contracts. He denies guilt.

"Now, in the era of the Special Military Operation (in Ukraine), money has come to the Ministry of Defense in huge quantities. And the case of Timur Ivanov has shown that the situation with corruption exceeds all normal limits," said Markov.

A government source who once worked with Belousov said he has no previous big mistakes when it comes to corruption.

"He has always seen businessmen more as frauds and advocates that the state can redistribute more".

Ribar, a war blogger believed to be close to the Defense Department, also said he expected Bellows to "clean up" the department and get rid of what he euphemistically called "fictional beauty" - which critics say are exaggerated claims of technical and military success of Russia.

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