Russia's defense minister is replaced by a civilian economist in an unexpected move by Putin.

On Sunday, Russian President Vladimir Putin appointed a civilian economist as his new defense minister in an effort to prepare for economic war by optimizing the defense budget and leveraging innovation to succeed in Ukraine.

After more than two years of conflict, which has resulted in significant losses for both sides, Putin proposed Andrei Belousov, a 65-year-old former deputy prime minister with expertise in economics, to replace his long-time ally, Sergei Shoigu, 68, as defense minister.

The Kremlin announced that Putin wants Shoigu, who has been in charge of defense since 2012 and is a long-standing friend and ally, to become the secretary of Russia's Security Council and also have responsibilities for the military-industrial complex.

Patrushev will get a new, as yet unannounced, job.

Since sending tens of thousands of troops into Ukraine in February 2022, Putin has made the most significant changes to the military command.

Dmitry Peskov, a spokesman for the Kremlin, stated that the change was necessary because Russia was facing a similar situation to the Soviet Union in the mid-1980s, where the military and law enforcement accounted for 7.4% of GDP.

Putin wants a civilian economist in the defense ministry job to ensure that military spending is aligned with and integrated into the country's overall economy, as stated by Peskov.

Peskov stated that the person who is more receptive to innovations will triumph on the battlefield.

Belousov, a former economy minister with close ties to Putin, shares the Russian leader's vision of rebuilding a strong state and has collaborated with Putin's top technocrats who advocate for greater innovation and are receptive to new ideas.

Belousov has played an important role in overseeing Russia's drone programme.

Putin is intensifying the Ukraine war and leveraging more of Russia's economy for it, despite the West's unsuccessful attempt to weaken the economy through sanctions.

Economic war

Despite the toughest sanctions ever imposed on a major economy, Russia's economists have largely ensured economic stability and growth. However, the failings of the Russian military were laid bare shortly after the invasion.

Alexander Baunov, a former Russian diplomat and senior fellow at the Carnegie Russia Eurasia Center, stated that Putin's proposal to appoint one of the main court economists and the main state minister in the economic bloc to head the Defence Ministry could indicate that he is planning to win the war with the defense industry plants and international markets.

"The winning strategy in this case will not be mobilizations and breakthroughs, but slow pressure on Ukraine with the superior power of the Russian military-industrial complex and the economy as a whole, which is supposed to be made to work more effectively for the front and rear."

Putin's unexpected move maintains equilibrium in the intricate network of personal loyalties that govern the current political system.

Valery Gerasimov, the chief of Russia's General Staff, will remain in his post, while Shoigu will take on a job technically senior to his defense ministry role, ensuring continuity and saving his face.

In 2022, Russian military bloggers heavily criticized Shoigu for a series of retreats made by the Russian military. Prigozhin, the leader of the Wagner mercenary group and a fierce critic of Shoigu, attempted to stage a mutiny to overthrow him last year. However, the mutiny was unsuccessful and Prigozhin was later killed in a plane crash.

Mark Galeotti, director of Mayak Intelligence, stated that the defense minister's role in Russia during wartime is to ensure the military has all it needs, while Gerasimov's job is crucial as he now reports directly to Putin, the commander-in-chief.

Galeotti stated that in that context, having an economist who has been advocating for subordinating much of the economy to the needs of the defense sector makes sense. It is now essentially a financial administrator's job, and Belousov can excel in this role.

Putin is attempting to increase scrutiny of defense spending to ensure funds are used efficiently after a Shoigu ally and deputy defense minister, Timur Ivanov, was accused of accepting kickbacks worth nearly $11 million.

Putin retained Alexander Bortnikov and Sergei Naryshkin as the chiefs of the Federal Security Service (FSB) and the Foreign Intelligence Service (SVR).

The Kremlin announced that Sergei Lavrov, the country's longtime foreign minister, will remain in his position.