On this day (May 13), the news of Russia's change of coach shook the world. The author has roughly searched, from Europe to Africa, from Thailand to Brazil, almost every media outlet has put this news on the front page.
No one expected that Shoigu would leave the Ministry of Defense building at this moment, where he had worked for more than ten years. So how did all this happen, and what exactly is Putin's move for? The author tries to give readers an answer through this article.
A lurking crisis
Since Peter the Great, Russia has always become a world-class power, no matter what era it is in. It has to be said that the people of this country have an amazing national resilience, even though the current Russian Federation is generally considered to be a period of relative weakness of Russia for 400 years.
The United States and the West have exhausted almost all resources to impose sanctions and blockades on Russia, but they have still failed to defeat the Russian giant bear. Since 2024, Russia's overall economic data has been very bright, and even The Economist has to lament that the West's economic sanctions against Russia have ended in failure.
It is not for nothing that Putin shouted "we are getting better and they (the West) are getting worse" during the presidential election in March. However, despite the seemingly beautiful data, Russia still has great crises and hidden dangers.
That is, the wartime economic system is inherently unsustainable.
Russia's economic growth this year is expected to be different in different terms, but 3%-5% is generally acceptable, which can be said to be a very good result, and it is rare that the unemployment rate has also been greatly reduced while the economy has grown.
Russia has done all this because of the booming military industry in wartime. The Russian Center for Macroeconomic Analysis and Short-Term Forecasting (CAMAC) believes that 60-65% of the growth in industrial output over the past two years is due to military orders from the Russia-Ukraine conflict.
In order to reduce unemployment and increase the production capacity of the military industry, the Russian government exempted workers in military-related enterprises from military service and increased wages, causing a large number of idle people to pour into military production enterprises. This has effectively stimulated household consumption, which is one of the driving forces behind Russia's rapid economic growth.
But the problem is that this model is not sustainable, and according to the Russian economist Alexandra Suslina, the constant investment of the military-industrial complex is draining Russia's economic production. This makes Russia lack the ability to support other civilian industries, which means that the economic hematopoietic capacity continues to decline.
The reason is very simple, without fresh blood, where will the funds continue to support the war? After all, the shells and bullets produced are consumables that create GDP, but not wealth.
The direct problem brought about by this is that the economy is overheated on the surface, but it is actually facing serious inflation, which leads to difficulties in residents' daily consumption. Yes, the economic problems that the United States and Russia are currently experiencing are very similar. The two countries are raising interest rates to maintain economic enthusiasm while struggling to reduce inflation.
Industrial goods from the countries of the East ensured that the market did not experience a shortage of goods of the Soviet era, but the incomes of the majority of the population did not outpace inflation. The country's domestic economy has shrunk due to sanctions, a large number of high-income jobs have disappeared, and government funds have been used mainly for war and military production, resulting in a lack of funds for social security and pensions.
I remember that not long ago, the big V Lu Kevin was shocked by the shocking low salary of Russian professors, but there are many more who do not even have basic social benefits.
But war industries have driven economic growth in Russia, St. Petersburg and the southwestern regions of Russia, close to Ukraine, with some cities growing at staggering double-digit annual GDP rates. But the rest of Russia's vast economy is declining, exacerbating regional disparities.
I remember that many military Vs complained that most of the Russian soldiers on the front line were from poor areas, and young people in big cities seemed to have nothing to do with the war. There are some institutional problems, but the bigger reason is that there is no shortage of jobs in the big cities, and the rest of the country can only improve the economic situation by serving as soldiers.
However, life in big cities is not entirely glamorous, with the price of beef, chicken and eggs rising, with egg prices rising by 40% (nearly doubling in some areas), creating an egg crisis that has lasted for months.
In addition, the oil and gas industry, which Russia relies on, has also encountered the problem of the upper limit of the export scale, which means that the energy export volume cannot be increased anymore, and the big eastern countries cannot buy so much energy if they want to, and the oil reserves are all full.
So now Russia urgently needs to find a new way to open up its finances, and President Putin naturally knows the seriousness of the problem.
In his annual State of the Union address to the State Duma at the end of February, he announced a massive six-year investment plan focused on improving infrastructure, including reducing imports (increasing the trade surplus), attracting foreign investment, and increasing the country's low birth rate.
So how much does Russia now invest in military spending every year? With more than $120 billion, Russia's fiscal revenue is about one-tenth of ours, but its military spending is half of ours.
And this $120 billion has become the target of some silverfish.
fuse
The author has detailed the corruption of Timel Ivanov in a previous article, and this article gives us a deeper understanding of Ivanov's behavior.
Despite the fact that Shoigu had a dozen deputies (Deputy Minister of Defense), Ivanov was one of his closest allies. Their relationship dates back more than a decade, when Ivanov and Shoigu worked together in the Moscow government and can be said to know the roots.
Ivanov was responsible for the construction and logistics of military engineering at the Ministry of Defense, and Ivanov's representative projects included a military-themed church in Moscow, a patriotic theme park, and the reconstruction of Mariupol.
In Moscow, everyone is accustomed to calling Ivanov Shoigu's "wallet", and Ivanov, who believes that he has "someone on top", does not shy away from the massive wealth he has, for example, I mentioned in my previous article that his eight-hectare mansion is worth 150 million yuan alone, and the angry Russian official new media Mash scolded Ivanov for being insatiable.
Before the war, Putin turned a blind eye to it, and the problem was that when other officials smelled the change in the atmosphere and began to gradually lower their profile, Ivanov did not know how to restrain himself. Mansions, beautiful women, real estate, and extravagant French vacations are all in the eyes of the Russian people who are living through the difficult times.
As mentioned in my previous article, Shoigu was unaware of Ivanov's arrest (according to Russian state media). When he appeared in court, he was still wearing the same military uniform as the day before when he opened an account with Shoigu, which means that he was arrested after the meeting.
According to the Russian opposition (of course, their words are listened selectively): since the Russian-Ukrainian conflict, embezzlement in the defense sector has skyrocketed as military spending has increased.
Putin is well aware that in March he appointed a new deputy defense minister in charge of material procurement, and the warning was very clear, but Ivanov continued to go his own way.
And the fuse of all this was Prigozhin's previous military advice.
Prigozhin angrily accused Shoigu of deliberately withholding ammunition and other logistical supplies from Wagner's mercenaries, and repeatedly hampering Wagner's operations, and Ivanov was the one who obstructed Prigozhin's operations.
According to an unreliable source, Prigozhin's son later personally wept to Putin about his father's grievances and the corruption under Shoigu. The truth of this news is unknown, but judging by Putin's attitude towards Prigozhin in hindsight, he still sympathizes with his chef and friend.
Later, Shoigu disappeared from public for a month, triggering speculation in world opinion, but he later attended military meetings and state events normally, and it seems that he was not affected by the Prigozhin affair.
But now it seems that this is nothing more than the last chance that Putin has given them. In his speech to Russia's Federal Security Service after the March elections, Putin stressed that they should pay attention to corruption in the defense sector. As a result, the Federal Security Service arrested Ivanov in April, and it is clear that Putin began to plot to solve the problems of the Ministry of Defense very early.
So what is the purpose of solving these problems?
To unite the Russian people, of course. If Putin is an inactive leader, there is no need to do these things after he has been re-elected, but he cannot continue to let it go.
Although Shoigu himself is not necessarily corrupt, there is no escaping the fact that he is the head of Ivanov and other corrupt elements. Therefore, leaving the last dignity to friends in the way of bright rise and dark falling, and completely eliminating the chaos of the Ministry of National Defense, can not only restore the confidence of the people, but also lay a good foundation for the next reform.
Mr. Key
When it became known that the replacement was First Deputy Prime Minister Belousov, it was difficult for anyone not to be shocked.
Belousov graduated with honors from the Faculty of Economics of Moscow State University in 1981. According to Russian media reports, the civilian defense minister was fond of Brazilian fighting and karate in his youth, but he has been doing economic research since graduation and has never been associated with the military.
I looked at his academic achievements, and his main area of study was macroeconomics, with a bias towards globalized economics and governance, and after 2006 he joined the government, he stopped publishing academic monographs.
And the reason why Putin chose Belousov Peskov made it very clear: after Russia's war spending has increased significantly, it is very important that the defense economy is aligned with the national economy in order to cope with the current domestic and foreign situation.
That is, Belousov needs to solve the problem of the current lameness of the Russian economy. The author can conclude that even if Belousov becomes the Ministry of Defense, he will still be President Putin's first choice in Russia's economic decision-making.
A former Russian defense official, speaking to the media on condition of anonymity, said: "The Kremlin wants the ministry to be headed by an economist who knows how to optimize the functioning of the Ministry of Defense." As for the operational component, it remains for the Armed Forces under the head of the Chief of the General Staff, Gerasimov.
In the author's opinion, Belousov will definitely not serve in the Ministry of Defense for a long time, what he has to do is to try his best to avoid a backyard fire after the advantages of the Russian army gradually appear.
It is necessary to promote the development of the national economy and make the people willing to walk together with the government; It is also necessary to sort out the existing problems of national defense units, and do a good job of providing aftermath support for the front line, so that the troops can fight without distraction.
At present, the battle of Kharkiv is at a critical moment, and if Kharkiv can be taken a year ahead of schedule (originally planned for 2026), then Russia is getting closer and closer to victory.