Putin Appoints Economist as Defense Minister... "Russia's Defense Budget Will Continue to Increase"

Dismissal of Shoigu Amid Corruption Scandal
Military Keynesian Appointed as Defense Minister
Distrust in Military Personnel After Prigozhin Rebellion

First Deputy Prime Minister Andrey Belousov, nominated as Russia's new Minister of Defense.
[Image source=Reuters·Yonhap News]

Russian President Vladimir Putin has abruptly dismissed Defense Minister Sergey Shoigu, a close confidant, and appointed Andrey Belousov, an economic expert and First Deputy Prime Minister, as his successor, drawing attention to the background of this decision. The Russian government is promoting the appointment of an economic bureaucrat with no military experience as Defense Minister as a bold move signaling the need to transition to a wartime economy.

However, some interpret that the background of this appointment stems from President Putin's growing distrust of the military following Yevgeny Prigozhin's rebellion last year. By appointing an economic bureaucrat with no ties to military personnel as Defense Minister, it is analyzed that Putin aims to strengthen his own wartime control and restore his diminished authority after the rebellion.

Shoigu dismissed after 12 years... Removed amid corruption scandal involving close aides

Sergei Shoigu, Russian Minister of Defense, dismissed after 12 years since his appointment in 2012 (left).
[Image source=AFP·Yonhap News]

According to Russia's TASS news agency on the 12th (local time), President Putin announced that, following his successful fifth term election, he would replace the cabinet for the first time by dismissing Defense Minister Shoigu and nominating First Deputy Prime Minister Belousov as his successor. Belousov is expected to be formally appointed after review by the Russian Federation Council.

Kremlin spokesman Dmitry Peskov emphasized at a press briefing that "in today's battlefield, those more open to innovation prevail," adding, "Currently, Russia's military and judicial expenditures are approaching levels similar to the mid-1980s Soviet Union, when they accounted for 7.4% of GDP, and a civilian figure was needed to align spending in these sectors more closely with the national economy."

With this appointment, Minister Shoigu steps down from the Defense Minister position after 12 years. He is reportedly to be appointed Secretary of the Russian Security Council soon. Although the Secretary of the Security Council is formally a higher-ranking position than Defense Minister, it is a powerless role, often assigned to Putin's former close aides who were removed from operational posts, usually due to corruption scandals.

Shoigu, once called Putin's right-hand man, has seen his position weaken significantly after Timur Ivanov, a former Deputy Defense Minister and his close aide, was detained on bribery charges. Ivanov was found to have accepted bribes from companies while overseeing reconstruction projects in occupied Ukrainian territories, amassing vast illicit wealth, and Shoigu was also criticized for being implicated in this.

Economist Belousov appointed as first-ever Defense Minister economist... "Loyal and incorruptible"

[Image source=AP Yonhap News]

Belousov, appointed as the new Defense Minister, is an economist and economic bureaucrat who has long served as an economic advisor to President Putin. Recently, he has rapidly grown closer to Putin by drafting several policies related to Russia's transition to a wartime economy.

According to the British BBC, Belousov graduated from Moscow State University's Department of Economics in 1981, worked as a researcher at the former Soviet Central Economic Mathematical Institute, and served as head of the laboratory at the Russian Academy of Sciences' Institute of Economic Forecasting. From 2008 to 2012, he was Director of the Fiscal and Economic Department, served as Minister of Economic Development in 2013, and was Putin's economic advisor for seven years until 2020. Since his appointment as First Deputy Prime Minister in 2020, he has earned recognition from Putin for his competence by implementing tax increases on companies and wartime mobilization economic plans.

Bloomberg cited Kremlin insiders saying, "President Putin trusts Belousov and views him as honest and uncorrupted," adding, "He places great importance on the government's role in the economy and is known to be harsh on businesses."

Belousov's appointment as Defense Minister is expected to significantly accelerate Russia's transition to a wartime economy. Former Russian Central Bank official Aleksandra Prokopenko told the Wall Street Journal (WSJ), "Belousov supports 'Military Keynesianism,' which promotes economic growth through defense spending," and noted, "Russia's defense budget is unlikely to decrease and may continue to rise."

Military trust plummets after Prigozhin rebellion... Strengthening wartime control

[Image source=TASS Yonhap News]

Some argue that after last year's Prigozhin rebellion, President Putin deliberately appointed an economic bureaucrat as Defense Minister to increase control over the military. Having someone unconnected to military personnel as Defense Minister greatly reduces the possibility of a military rebellion.

Following Prigozhin's rebellion in July last year, a large-scale purge began within the Russian military. During this process, Sergey Surovikin, Commander-in-Chief of the Russian Aerospace Forces, was arrested on charges of conspiring with Prigozhin, and dozens of high-ranking officers connected to him were detained and imprisoned.

Konstantin Sonin, a Russian politics expert at the University of Chicago, told the WSJ, "President Putin has always been very cautious about bringing people with strong charisma or political bases into important positions," explaining, "Belousov is a loyal figure who can never surpass Putin's authority."