Vladimir Putin made a surprising move by replacing his long-serving defense minister with a trained economist, signaling a shift in focus towards growing the Russian war economy more than two years after the invasion of Ukraine.
Putin nominated his former economy aide and First Deputy Prime Minister, Andrey Belousov, 65, to succeed Sergei Shoigu, 68, who was gently demoted and placed in charge of the security council. Nikolai Patrushev, an old ally of Putin who previously held that post, was dismissed and is set to assume another, unspecified role.
While many of Shoigu’s predecessors under Putin did not have military backgrounds, this marks the first time Putin has selected a career economist to serve as defense minister.
The reshuffle comes shortly after Putin’s fifth-term inauguration, extending his quarter-century in power. It appears to indicate Putin’s dissatisfaction with the handling of the war by those overseeing security.
This move is also Putin’s most significant political shake-up since 2020, when then-prime minister Dmitry Medvedev was sidelined to make room for technocrat Mikhail Mishustin, who continues to serve alongside Foreign Minister and veteran diplomat Sergei Lavrov.
Recently, Russia has been making limited, local gains along the frontline as Ukrainian forces struggle with shortages of weapons, manpower, and a critical need for more air defense systems.
The Kremlin currently controls nearly 20% of Ukrainian territory. However, its forces are advancing cautiously, as Putin has been reluctant to order another unpopular mobilization after the call-up of 300,000 Russians in September 2022 sparked panic and prompted an exodus from the country.
Sergei Markov, a political consultant with close ties to the Kremlin, suggested that the appointment of Belousov is aimed at Putin exerting greater control over military affairs as the Ukraine war drags on. The need for a new face to represent Russia’s armed forces became more pressing after a corruption scandal involving former deputy defense minister Timur Ivanov, a key aide to Shoigu.
“Belousov is personally loyal to Putin, and he will resolve these issues,” Markov said in a phone interview. “There have been too many personal interests at play.”
There was also lingering unresolved tension after the conflict involving Wagner founder Yevgeny Prigozhin, which resulted in a failed mutiny last year. Speculation arose at that time about Shoigu’s potential departure, but the decision was postponed.
Ultimately, Putin took his time to make changes, waiting until after Prigozhin’s death in late summer under mysterious circumstances and his own re-election earlier this month. A Kremlin insider, speaking on condition of anonymity, revealed that Putin trusts Belousov, considering him honest and free from corruption.
“The shake-up aims to consolidate the role of the military-industrial complex as the main driver of the economy,” said Evgeny Suvorov, chief Russia economist at CentroCredit Bank.
Belousov graduated from Moscow State University in 1981 with a degree in cybernetic economics and later obtained his doctorate. Initially, he pursued a career at the Russian Academy of Sciences.
Belousov’s first official position under Putin was as the director of the department of economics and finance in 2008, during Putin’s brief hiatus as president—when he swapped roles with Medvedev, intending to return to the presidency later. Belousov later briefly served as economy minister and then as Putin’s top economic aide. He played a crucial role in transitioning Russia into a war economy.
He is known for his tough stance toward companies and businesses and was a key figure behind the government’s initiative to increase taxes on the metals and mining industry, even after the war began.
In contrast, Shoigu’s trajectory took a different turn after becoming a target of Prigozhin during the June 2023 revolt. His fall from favor comes despite once being a close confidant of Putin, accompanying him on highly publicized hunting and horse-riding trips in Siberia, and leading Russia’s emergencies ministry for nearly two decades.
Shoigu’s reassignment to the security council indicates that the body, already centralized around the president’s decision-making on national security strategy, has been marginalized and is now being used as a “reservoir for former key Putin figures,” according to Tatyana Stanovaya, founder of the political consultancy R.Politik.
Medvedev, the deputy head of the Security Council, has seen his role greatly diminished over the years. In 2020, Putin amended the Constitution to allow for two more terms, potentially enabling him to rule until 2036, when he would be 83.
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