Andrei Belousov: From macroeconomist to Russia's new defense minister

Reference News Network reported on May 15 that Andrei Belousov's nomination as defense minister was the most sensational event in the formation of the new Russian government.

Russia's "Kommersant" reported on May 13 that after Putin's presidential inauguration, important news related to the change of government did not come out until the evening of the 12th: Sergei Shoigu, 68, who has been Russia's defense minister since 2012, will step down from this post and be replaced by Andrei Belousov, 65, former first deputy prime minister. Presidential spokesman Dmitry Peskov said that according to the presidential decree, Shoigu will be the secretary of the Federal Security Council, and at the same time deputy chairman of the Council of the military-industrial complex.

Laying the foundation for economic transformation

Economist Belousov worked in the Ministry of Economic Development for many years, from 2013 to 2020 as assistant to the president for economic affairs, and in 2020 he joined the cabinet of Mikhail Mishustin and served as first deputy prime minister.

In the government, his efforts laid the groundwork for the structural transformation of the economy: during the coronavirus pandemic and the onslaught of sanctions, the official was responsible for solving market problems and adjusted support measures for Russian enterprises based on feedback. Belousov is systematically working to improve the investment climate and attract private capital to invest in the economy: one of the important mechanisms is the agreement on the protection and promotion of capital investments, which guarantees the same conditions for the implementation of investment projects (including taxes and customs duties) and compensation for infrastructure costs.

In order to create a unified investment climate in Russia, Belousov requested that the entities of the Russian Federation introduce regional investment standards, which provide for the treatment of investment projects in accordance with a unified model, simplification of processes and support for investment projects throughout the project cycle. One of Belousov's main ideas is to stimulate the export of Russian companies in order to support competitive industries. Due to sanctions and supply chain disruptions, the export task has been partially shifted: in recent years, Belousov has been working on the creation of a logistics structure and the construction of new transport corridors in order to reorient Russia's foreign trade towards new markets.

One of Belousov's last projects as first deputy prime minister was the implementation of the concept of "technological sovereignty" – ensuring that the Russian economy is based on the development of its own scientific and technological resources in key areas. He developed the concept of technological development in the Russian Federation, which provides for the narrowing of the gap between science and production within the framework of large-scale innovation projects with the participation of the state, as well as the development of innovation support mechanisms in Russia.

Ruslan Pukhov, a member of the Russian Council on International Affairs and director of the Center for Strategic and Technical Analysis, said: "Belousov is a technical official, he has the trust of the president and is well versed in economics and management. In the conditions of the continuation of the special military operation, it is precisely such people that the country needs. ”

Nominations "well thought out"

Sergei Hrapach, an expert in the field of security, stressed that Belousov is not involved in behind-the-scenes and elite relations in the Ministry of Defense. According to the expert, the state invests a lot of resources in the defense industry and needs a person who "can do audits" to manage the industry. Hlapach did not rule out that the reshuffle of the Ministry of Defense could be related to the case of Deputy Defense Minister Ivanov (arrested on April 24 on suspicion of taking bribes), as well as to the acute situation in the area of the special military operation.

Political adviser Yevgeny Minchenko believes that Belousov's new appointment is similar to that of Anatoly Serdyukov, who served as Minister of Defense from 2007 to 2012. "It is necessary to adjust the financial situation of the Ministry of Defense to an appropriate state," Minchenko said. Napoleon once said, 'There are two things that matter in war – the first is money, and I forget the other'. Now the military strategy of the Russian authorities is to minimize losses. To this end, we must pay the greatest attention to material and technical support. ”

Political scientist Alexei Makarkin notes that Shoigu, a veteran of Russian politics, is not ending his career. "The secretary of the Federal Security Council has direct access to the president," Makarkin said. However, Shoigu will need some time to get used to the work in the Security Council, which Makarkin noted that has previously been working in large and resource-rich departments, and the role of the Security Council is more analytical - in addition, during Patrushev's tenure as secretary of the Federal Security Council, "a considerable part of the work was the development of ideas, which largely determined the ideology of the mechanisms of state power". According to the expert, there is no comparison between the appointments of Belousov and Serdyukov: Belousov's experience is clearly much more extensive and "here there is hardly a purely accounting function."

Belousov's nomination as defense minister was almost the most sensational event in the process of forming a new government. However, Andrei Kartapolov, chairman of the State Duma defense committee, called Belousov's nomination "well thought out, prudent and reasonable." In his opinion, "possible changes in the structure of the Ministry of Defense can only be discussed after all legal processes have been completed".

Commenting on the nomination of Belousov, Peskov noted that now, on the battlefield, the one who is more open to innovation and implements it as quickly as possible wins. Belousov's appointment as defense minister will not change the power structure in the military sphere, since direct responsibility for military management has always been the competence of the chief of the General Staff, and the president does not intend to make adjustments in this regard at the moment: Valery Gerasimov will continue to be the chief of the General Staff of the Russian army.

The military operation against Ukraine may be adjusted

According to the website of the Financial Times, in his last public appearance as Russian Defense Minister on the 9th, Sergei Shoigu wore a general's uniform full of medals and saluted Russian President Vladimir Putin.

Andrei Belousov, who was appointed his successor on the 12th, was very different from him. A Soviet-era economist, Belousov has never served a day in the army and has worked for Putin, serving in a number of positions including economic adviser.

For analysts familiar with the two figures, as well as Russia, Putin's surprise move to appoint Belousov to run the Defense Ministry suggests that Putin wants to make a major adjustment to the military operation in Ukraine.

As a proponent of state-led industrial policy and a technocrat with no power base, Belousov's appointment as defense minister suggests that Mr. Putin wants to better manage Russia's record 10.8 trillion rubles ($118.5 billion) in defense spending, and that he wants a compliant, capable official to do the job, according to people familiar with the matter.

A person who has known Putin and Belousov for decades said: "Belousov is a workaholic. He is a technocrat and very honest, and Putin knows him very well. ”

The son of a well-known Soviet-era economist, Belousov worked in academia before joining the government in 1999. He has served as Minister of Economic Development, Economic Adviser to Putin, and First Deputy Prime Minister.

During his time in politics, Belousov advocated for the state to play a strong role in the economy, stimulating economic growth through state investment, low interest rates, and loose fiscal and credit policies.

Konstantin Soning, an economist at the University of Chicago, said: "Belousov believes that the state is the main agent of everything. According to Soning, who has known Belousov for 20 years, when Belousov joined the civil service, the role of the" macroeconomist " in him was replaced by the" Putin's soldier ".

As his position grew, Belousov became a well-known advocate of policies such as windfall taxes and capital controls on Russian commodity exporters, especially the metal industry.

Russian war correspondent Yuri Kotenok wrote on the Telegram social media platform: "Belousov will conduct an audit of all the finances of the Ministry of Defense. He was all too familiar with them. He is a top professional economist and a statist. ”

Pious Orthodox Christian, tycoon Konstantin Malofeev, said Belousov's nationalist views meant the Kremlin would be more successful in producing weapons for the war in Ukraine.

Malofeyev wrote on Telegram: "The defense sector is becoming an absolute priority of all state policy. That's how it should be. With the right planning, supported by the new Minister of Defense, we will be able to have both artillery and butter. ”

Alexandra Prokopineko, a former official of Russia's Central Bank, said that Belousov's appointment means that the cabinet and the Ministry of Defense will coordinate spending more closely. "Military spending is likely to increase, not decrease. Belousov is a supporter of the role of industry in the economy, so he fully supports the injection of money into the economy through the defense sector. (Compiled by Zhu Lifeng, Tu Ji)