Putin's Cleanup: Defence Minister Shoigu Replaced by Economist Belousov

Amidst a startling upheaval in the Russian government, economist Andrei Belousov, nominated as the successor to Defence Minister Sergei Shoigu, highlights the nuanced interplay between Russia’s economy and war in Ukraine. Shoigu, a longstanding ally of President Vladimir Putin, is slated to transition to the role of secretary of the National Security Council, marking a significant shift in Russian leadership.

Shoigu’s Shifting Role: Promotion or Demotion in Russian Government Shake-Up?

The departure of Sergei Shoigu from his post as defence minister raises questions about whether it signifies a demotion or a promotion. He will now take on the role of secretary of the National Security Council, succeeding Nikolai Patrushev, a key figure in Putin’s inner circle.

On the surface, Shoigu’s new position may appear to be a promotion, as his predecessor wielded significant influence over the president, controlling the flow of information and shaping policy decisions. However, analysts speculate that Patrushev’s conservative agenda, which allegedly influenced Putin’s actions regarding Ukraine, may now see a shift with Shoigu’s more reserved stance on military interventions.

Despite Shoigu’s lukewarm attitude towards the invasion of Ukraine, his move to the National Security Council may not translate into a significant shift in policy. In Russia, formal structures often belie the true balance of power, with the National Security Council serving as a retirement ground for sidelined leaders. This is exemplified by the inclusion of former Russian President Dmitry Medvedev, whose current role on the council is largely ceremonial.

Shoigu’s tenure as defence minister was marked by discontent among military commanders, who felt ill-prepared for the conflict in Ukraine. Reports of shortages in equipment and the uprising led by Wagner Group founder Yevgeny Prigozhin highlighted the challenges faced by the Russian military under Shoigu’s leadership.

The recent arrest of Deputy Defence Minister Timur Ivanov on corruption charges hinted at broader reforms within the defence establishment. While corruption allegations are often a pretext for sidelining officials, the move signalled a broader cleanup within the Russian military hierarchy.

Shoigu’s transition to the National Security Council is unlikely to afford him the same level of influence over Putin as his predecessor. Meanwhile, the fate of Nikolai Patrushev remains uncertain, leaving Shoigu with diminished prospects in his new role.

Andrei Belousov’s Ascension: Navigating Russia’s Economic and Military Nexus

Equally significant is the appointment of Andrei Belousov as the new defence minister. As a seasoned economist and longtime advisor to Putin, Belousov’s selection underscores the symbiotic relationship between Russia’s economy and its military objectives. His advocacy for state intervention in the economy aligns with Putin’s vision of a wartime economy, where the government exerts maximum control over economic resources.

Belousov’s appointment signals a strategic shift towards consolidating state power and prioritising military interests within Russia’s economic framework. As tensions with the West persist and the conflict in Ukraine escalates, Belousov’s role will be pivotal in shaping Russia’s economic and military policies in the coming years.

Amidst the backdrop of escalating tensions and geopolitical maneuvering, the appointment of Andrei Belousov as Russia’s new defence minister has sparked widespread debate and scrutiny. With no prior military experience, Belousov’s selection may seem incongruous, given the intensity of Russia’s conflict with Ukraine. However, insights from multiple sources paint a picture of Belousov as a formidable and pragmatic figure within the corridors of power.

Described as a wiry white-haired economist and devout Orthodox churchgoer who enjoys rock climbing, Belousov’s unconventional background raises eyebrows in the context of his new role. Yet, testimonies from six sources, including individuals who have closely collaborated with Belousov, attest to his tenacity and adeptness in navigating the complexities of governance.

Belousov’s track record as a government insider is underscored by his leadership in campaigns aimed at bolstering state revenues through taxation of corporate windfall profits. His ability to drive policy initiatives and mobilize substantial financial resources, reportedly amounting to around 300 billion roubles ($3 billion), has evidently left a lasting impression on President Putin.

One of the Russian billionaires familiar with Belousov describes the potential effect of his appointment as follows: “It indicates that the war will be prolonged: firstly, he shares the same positions as Putin, and secondly, he knows how to make the military economy more efficient.”

Indeed, Belousov’s appointment is seen as emblematic of Putin’s strategic vision for a protracted war in Ukraine. In wartime, the role of Russia’s defence minister extends beyond military strategy to encompass overseeing vast financial flows and economic planning. Belousov’s demonstrated efficacy in this realm aligns with Putin’s agenda of reshaping Russia’s economy for the long haul.

However, Belousov’s staunchly statist views have drawn criticism from some quarters, particularly those advocating for a more liberal economic agenda. Described as a “half Soviet” figure by a senior Russian source, Belousov’s commitment to state supremacy in economic affairs has sparked concerns about its potential adverse impact on private enterprise.

As Belousov assumes his new responsibilities, he faces a daunting array of challenges. From navigating Western sanctions to grappling with persistent inflation, his tenure as defence minister will require deft maneuvering amidst a complex geopolitical landscape. Moreover, his lack of military experience may provoke resistance from within the military establishment, where entrenched interests may seek to safeguard existing contracts and operational protocols.

Despite these challenges, some observers remain optimistic about Belousov’s potential to address endemic corruption within the military-industrial complex. His reputation as a tough and results-oriented leader has led some to believe that he may possess the necessary skills to root out systemic graft and inefficiency.

In his inaugural remarks as the nominee, Belousov sought to assuage concerns within the military ranks, pledging to prioritise the welfare of soldiers and improve essential services such as housing and healthcare. However, the road ahead for Belousov is fraught with obstacles as he grapples with the multifaceted demands of his new role amidst a backdrop of geopolitical uncertainty and escalating conflict.

Aligning Economy and Ukraine War

The appointment of Andrei Belousov as Russia’s new defence minister signals a strategic alignment between the country’s military objectives and its broader economic policies. Putin’s decision reflects a concerted effort to bolster the military-industrial complex, not only to compete in a technological arms race with Ukraine and the West but also to leverage the wider economy in pursuit of military goals.

“Putin’s priority is war,” remarks Alexandra Prokopenko, a former Russian central bank adviser, emphasising the pivotal role of economics in warfare. Belousov’s advocacy for stimulating demand from the budget suggests a commitment to increasing military spending, a sentiment echoed by analysts who anticipate a rise in defence expenditures under his leadership.

Belousov’s involvement in initiatives such as the national drone development programme and his advocacy for the digital economy and blockchains underscore his recognition of the importance of technological innovation in modern warfare. While his expertise may lie more in economic strategy than battlefield decisions, Belousov’s appointment signifies a broader strategy to modernize Russia’s military capabilities.

General Valery Gerasimov, chief of the General Staff, retains his position as the key architect of military operations, underscoring the division of responsibilities within Russia’s military hierarchy. Meanwhile, Sergei Shoigu, the outgoing defence minister and a trusted ally of Putin, assumes the role of secretary of the Security Council, maintaining proximity to the president while potentially wielding less influence.

Dmitry Peskov, Putin’s spokesman, elucidated the rationale behind Belousov’s appointment, citing the significant increase in defence spending necessitated by the ongoing conflict in Ukraine. Belousov’s mandate includes not only boosting output and reducing corruption within the defence sector but also integrating defence spending into the wider economy and adapting to technological advancements on the battlefield.

Moreover, Belousov is tasked with ensuring that civil economic priorities are not neglected, underscoring the government’s commitment to maintaining acceptable living standards amidst heightened military expenditures. Putin’s vision for the development of the defence industry aligns with his broader strategy of enhancing Russia’s scientific and industrial potential, emphasising efficiency and innovation over a traditional arms race mentality.

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