In a pivotal cabinet reshuffle following his fifth term as Russia’s President, Vladimir Putin has appointed civilian-economist Andrei Belousov as the new Defence Minister, replacing Sergei Shoigu, who assumes the role of Secretary of the Security Council (NSA). This decision, amidst soaring defence expenditures due to the ongoing conflict with Ukraine, underscores Putin’s strategy to navigate economic challenges while bolstering national defence.

Why the sudden move?

Sharing his views with Financial Express Online, senior war correspondent, Neeraj Rajput says: “The cost of the Ukraine war is taking a toll. The Defence Budget has reached 6.4 percent of the GDP (almost equivalent to the Soviet era). Last year (2023) it was US$109bn (around 16 percent of total govt expenditure).”

“Club this with corruption charges on Shoigu’s deputy and unable to win war after more than two years,” adds Rajput, who has covered the ongoing Russia-Ukraine war.

Who is Belousov?

Belousov was currently posted as the Deputy Prime Minister of Russia. Along with being the Finance Minister of Russia (2012-13), he has also served as Putin’s economic advisor (2013-2020) for a long time. If Russia’s economy is on track despite the Ukraine war and all the sanctions from Western countries, then Belousov is considered to have a big role in it. This is the reason why Putin has given the responsibility of the Defence Ministry to him. 

According to information in the public domain, Putin’s media advisor Dmitry Peskov himself admitted this while announcing the new Defence Minister. Why? Because Russia’s ever-increasing defence budget is a matter of concern for Putin. According to Peskov, Russia’s defence budget is now 6.7 percent of GDP. This defence budget is now about to reach the level of the Soviet era when it used to be 7.4 percent.

In fact, due to the Ukraine War (Special Military Operation), huge expenditure is being made on the Russian army. According to the latest report of the global think-tank, Stockholm International Peace Research Institute (SIPRI), Russia is the third largest military spending country in the world (after America and China).

Last year i.e. in 2023, Russia’s annual defence expenditure was US$109 billion i.e. about 9 lakh crores, which is 24 percent more than in 2022. It is clear that due to the Ukraine war, Russia is increasing its defence expenditure significantly.

Following the annexation of Crimea in 2014, Russia’s defence budget has gone up by 57 percent. Russia’s defence budget is 16 percent of the total government expenditure. In such a situation, Russia not only has to use its defence budget very carefully, it also has to make it in line with the country’s economy.

The decision to remove Shoigu, who has been heading the Defence Ministry for the last 12 years, has surprised everyone. During the Ukraine war, there were many occasions when it seemed that Shoigu could be removed from his post but Putin did not do so. Even last year, when Prigozhin, chief of the private Wagner Army, rebelled against Putin, Shoigu was considered a major reason for it. Prigozhin later died in a plane crash.

According to Peskov, victory is achieved only through innovation in the battlefield.

What does this mean?

“In such a situation, it can be assumed that Russia is not able to get a decisive victory against Ukraine because the army under the leadership of Shoigu is fighting in a traditional manner. Whereas the Ukrainian Army has been equipped with drones and destructive technology since the beginning and is causing great damage to Russia. This is the reason why Shoigu has been removed from the post of Defence Minister for 12 years,” says Rajput.

Meanwhile …

Recently, Shoigu’s Deputy Defence Minister was also accused of corruption. Putin may also be upset with the news of corruption in the Defence Ministry amid the increasing defence budget, due to which Shoigu has been criticized. This is why Belousov, a seasoned economist, has been appointed in his place.

This is the first time in the last several decades that a civilian has been appointed as the Defence Minister of Russia. In former communist and socialist countries like China and Russia, there is generally a trend to make the military commander the defence minister. Even America’s current Defence Secretary (Minister) Lloyd Austin is also a former military commander. In India too, a former army officer (now late) Jaswant Singh was also given the charge of the Defence Ministry for some time in the Atal Bihari Vajpayee government (March-October 2001). But in India, there is a tradition of giving the post of Defence Minister to civilians only.

However, Putin has now appointed Shoigu to the post of Secretary of the Security Council, which is equivalent to the National Security Advisor (NSS). Until now Nikolay Patroshev was holding this post. Apart from this, Shoigu has also been made the Deputy Minister of Defence-Industrial Complex where he will be responsible for the manufacturing of weapons.