Putin replaces Russia’s defense minister with a civilian as Ukraine war rages and defense spending spirals

(CNN) — Russian President Vladimir Putin has replaced his defense minister and a long-time close ally Sergei Shoigu with an economist, a major reshuffle of military leadership more than two years after Moscow’s grinding war against Ukraine has sent defense spending soaring.

Andrey Belousov, a civilian who served as former first deputy prime minister and specializes in economics, was appointed to the top defense post, Kremlin spokesperson Dmitry Peskov said on Sunday.

Peskov tried to downplay the move, but the reshuffle comes amid speculation about infighting at the highest echelons of power. Just last month, one of Shoigu’s long-time protégés at the defense ministry was arrested and charged with corruption.

Shoigu was “relieved” of his position by presidential decree, Peskov said, but he will remain an influential part of Putin’s administration as secretary of Russia’s Security Council, replacing Nikolai Patrushev, a former head of the Federal Security Service (FSB), who would “transfer to another job.”

Shoigu will also become the deputy in Russia’s Military-Industrial Commission, Peskov said, as Putin embarks on a fifth term as president.

The timing of Shoigu’s exit is notable, coming off the back of several significant advances by Russian troops in eastern Ukraine.

Russia has launched its most serious cross-border ground assault since Ukraine recaptured the northern Kharkiv region in the late summer of 2022. There have been several months of increased Russian air attacks on the city of Kharkiv amid a grinding advance in Donetsk in the east that has seen incremental but significant progress.

Shoigu had helmed the country’s defense ministry for 12 years and led the full-scale invasion of Ukraine in 2022. Russian troops initially caught Kyiv by surprise but were soon beaten back, exposing the weaknesses of Moscow’s corruption-riddled military and its willingness to send waves of poorly trained and equipped soldiers into what Ukraine and Russian troops have both dubbed a “meat grinder.”

His critics have frequently described Shoigu as remote and out-of-touch with the realities of the conflict. His most forceful critic was the late Wagner chief Yevgeny Prigozhin who accused the Defense Ministry of starving his fighters of resources and bureaucratic incompetence before launching an unsuccessful mutiny last year and dying weeks later in a plane crash.

Despite the criticism, Shoigu has remained a popular politician in Russia. Having spent two decades as the minister of emergency situations, he cultivated an image of a helpful official who brings help when it’s needed.

He is also a rare outsider in Putin’s original inner circle, which consists mostly of the president’s allies from his St. Petersburg political beginnings and his former KGB colleagues. Shoigu was born and grew up in the remote Siberian republic of Tuva and got into politics through his association with the former president Boris Yeltsin.

Rising military spending and need for ‘innovation’

Belousov’s appointment suggests Russia’s strategy will continue to focus on outgunning Ukraine.

Belousov was selected by Putin because of a need for “innovation,” Peskov said in a press call, during which he highlighted the ministry’s rising budget, saying it was approaching levels last seen during the Cold War.

“Today on the battlefield, the winner is the one who is more open to innovation,” Peskov said. “Therefore, it is natural that at the current stage, the president decided that the Russian Ministry of Defense should be headed by a civilian.”

In a reference to the war in Ukraine, Peskov said that due to “well-known geopolitical circumstances, we are gradually approaching the situation of the mid-80s when the share of expenses for the security bloc in the economy was 7.4%. It’s not critical, but it’s extremely important,” Peskov said.

The budget currently amounts to 6.7% of GDP, he said.

Peskov highlighted Belousov’s previous leadership experience and economic background.

“This is not just a civilian, but a person who very successfully headed the Ministry of Economic Development of Russia, for a long time he was aide to the president on economic issues, and was also the first deputy chairman of the government in the previous cabinet of ministers,” Peskov said.

Much has been made of Belousov’s civilian status, even though Shoigu himself has limited hands-on experience with the military. He holds a rank of a general as a result of his official roles and has never served in active service.

Peskov added that the new appointment did not signal a shift in Russia’s current military system.

“As for the military component, this appointment will in no way change the current coordinate systems. The military component has always been the prerogative of the Chief of the General Staff [Valery Gerasimov], and he will continue his activities. No changes are currently envisaged in this regard,” he said.

In his new role, Shoigu will oversee Russia’s military industrial complex, Peskov said.

“He is deeply immersed in this work, he knows very well the pace of production of military-industrial products at specific enterprises and often visits these enterprises,” he said.

The news follows the arrest last month of one of Shoigu’s close allies, deputy defense minister Timur Ivanov, who was charged with taking a bribe in what was the country’s highest-profile corruption scandal since Putin launched his full invasion of Ukraine more than two years ago.

Ivanov has been accused of accepting a bribe of 1 million rubles (at least $10,800), according to Russian state media TASS.

Former US Secretary of Defense Mark Esper told CNN in an interview Sunday that Putin’s reshuffle is an “important” and “interesting move.”

“The bigger argument coming out of Moscow right now is that Russia is moving toward a war economy,” he said. “They’re on a war footing.”

Esper said that “one of the disappointing things about Shoigu’s tenure is we thought the Russian army, at least during my time at the Pentagon, we thought they were professionalizing, that they were modernizing all their equipment, their doctrine, how they train and fight, and we really haven’t seen that on the battlefield.”

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