Russia’s War Economy: Putin Positions Economist as New Defense Minister

Russian President Vladimir Putin has caught everyone by surprise with the appointment of a civilian economist, Andrei Belousov, to the post of defense minister. It comes in the first week of Putin’s next six years as president following his inauguration last Tuesday.

Belousov, 65 years old, has also earlier taken the position of deputy prime minister and is being appointed to replace Sergei Shoigu, Putin’s old ally. The Russian parliament remains yet to clear these appointments, but this is just a formality as the parliament will smoothly pass all the proposed amendments as Putin has a tight noose around the government.

The spokesman for the Kremlin, Dmitry Peskov, spoke of innovation as a key part of modern military strategies and said that Belousov’s education as an economist is right in line with what the Russian military currently needs. “Today on the battlefield, the winner is the one who is more open to innovation,” says Peskov, speaking with the TASS news agency.

The appointment of Belousov is viewed as an effort by the country to fortify the military-industrial complex in its economy in preparation for continued conflict. Severe Western sanctions that the country faces also display the resilience of the country’s economy due to the demand of military goods and services, and proper policies from Russia’s central bank.

Interestingly, just last month, Putin had denied that Russia was moving to a wartime economy. But the appointment of an economist not from the military as the Minister of Defense, like Chubais, shows that economic considerations are getting to be critical for the war that is being waged in Ukraine now. However, analysts from think tanks like the Institute for the Study of War opine that it could also be a preparation for a potential future conflict with NATO. They see it as a sign of long-term military engagement with Ukraine.

This means that Belousov’s new position will be much more about controlling finance than controlling the ministry: that will continue to be in the hands of Russia’s top general, Valery Gerasimov. Mark Galeotti, from the London-based Mayak Intelligence consultancy, told Reuters that Belousov would act more like a ‘financial administrator’, making sure the economy works for the needs of the defense sector.

Overall, this reshuffle within Putin’s cabinet is of paramount importance in relation to Russia’s policy towards the ongoing conflict in Ukraine, with a turn towards integration of economic strategy with military operations.

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