Putin’s new defence minister has displayed vision

Russian President Vladimir Putin’s decision to appoint an economist who has no experience of military matters as defence minister has unleashed speculation in Russia and outside. Putin chose Andrei Removich Belousov to replace veteran military man, General Sergei Shoigu, as defence secretary. Shoigu has been promoted as adviser to the Federal Security Council.

The question is what is Putin’s thinking behind the move? There are many views in the matter. One view is that the war is not just about overwhelming force. It is about putting the war on a strong economic footing to sustain it for a long time. Alexandra Prokopenko, a former central bank adviser, has written on X, formerly Twitter: “War of attrition is won by economics. Belousov is in favour of stimulating demand from the budget, which means that military spending will at least not decrease but rather increase.”

There is the belief that Belousov believes in the State like Putin, and he would want different sectors of the economy to serve the State. He is then against the market economy model. He is known to have garnered enough money from the private enterprises through windfall taxes on the corporates for the war effort. He is expected to turn the economy as a vehicle for supporting the war in Ukraine. People who know Belousov say that he is a Soviet man, who fully believes in the state system.

As an economist, Belousov has also displayed vision. He is credited with starting a drone industry with an emphasis on digital technology in 2017. He understands the importance of technology as an economy driver. Putin, it is being said, wants to avoid the Soviet dead-end of building up the armaments industry, and he feels the need to build the engines of the economy. And Belousov is seen as the right man. Dimitry Peskov, the Russian president’s spokesman, said that Russia’s spending on defence has risen from 3 per cent to 6.7 per cent and is heading towards 7.4 per cent, and this is a situation that was prevalent in the last days of the Soviet Union in the 1980s. There is the feeling that defence spending should dovetail into economic growth, and defence expenditure should not be undermining the rest of the economy.

The other view is that Belousov will also break the nexus between military corruption and armaments industry in the country, and thus stabilise the economy which has been hit by international sanctions since the beginning of the war two years ago. Sergei Markov, a former Kremlin adviser, is quoted as saying “Money now , in the era of the Special Military Operation (in Ukraine), has come to the Ministry of Defence in huge amounts. And the situation of Timur Ivanov (sacked deputy defence minister for taking bribes and kickbacks worth $11 million) showed that the situation with corruption goes beyond all normal limits.” According to Rybar, a war blogger, “Belousov’s appointment as defence minister means the start of a major audit and restructuring of all financial models within the defence establishment.”

While the battlefield strategies will remain with the generals, Belousov would be responsible for drawing a larger plan where victory is achieved through economic resilience as much as breakthroughs on the war front. Belousov is considered capable of forging the larger tactic of gearing the economy innovatively to the war. Putin is thinking hard about the war and finding new ways to fight it while the US and the EU are confined to thinking increasing arms supplies to Ukraine.

Ukraine’s economy is battered and it cannot recover until the war ends. Meanwhile Putin is thinking of building a vibrant economy around the war in Ukraine.