Putin might have thought that “war is too serious a matter to entrust to generals” as he appointed Belousov.
The witticism, usually attributed to the French statesman Georges Clemenceau or Napoleonic minister Charles-Maurice de Talleyrand, gave rise to the concept of a grand strategy. Unlike an operational plan, which deals with purely military matters, this one encompasses the management of the resources of an entire nation in the conduct of a protracted war.
Belousov is seemingly tasked exactly with that — how to manage resources for war. And those resources are not insubstantial — the Russian defense budget has doubled to 6% of the GDP since 2021, and combined with other national security expenditures, it’s now at 8%. The share of the national wealth the Soviet Union spent on defense in its final pre-death decade is estimated at 10% to 13%. Belousov’s task is to manage this cash pile effectively and not bankrupt the country.
He is just the man for the job. A 65-year-old Soviet-trained economist, he cut his teeth in academia before joining the government. He spent a quarter century in various government positions, including as a minister of economic development, Putin’s economic advisor, and as first deputy prime minister responsible for the financial sector. Married with one child, he notably spurns the flashy wealth of the Putin-era elite and shifted from Soviet Orthodox to Russian Orthodox (he was baptized in 2007) without any obvious difficulties.
During his meritocratic rise, he has remained a staunch statist. In his view, the state should not be a mere night watchman but an active helmsman of the economy; both the leading investor and the primary market player. At times of trouble, he insisted on windfall taxes on exporters, toyed with ideas including capital controls, and proposed caps on staple food prices.
Belousov, a cunning courtier, has no known ties to any power groups around the Kremlin and no record of rampant corruption (in stark contrast to his predecessor Sergey Shoigu and his senior officials, whose ranks are now being thinned by graft-related arrests.)
He sees the world economy as a zero-sum game whose rules are changing right now, as the US and the West lose eight decades of global leadership. He has been talking about Russia’s competition rather than cooperation for years. Now, as competition turns into war, he might feel he was right all along.
His task will be to ensure that the army gets what it needs, that military production runs smoothly, and that corruption is cut, if not eradicated, to aid the war effort. He has the competence to mobilize the economy and the whole of society to the level Putin finds necessary.
With Belousov at the helm, the military-industrial complex of Russia will more and more come to resemble that of the Soviet Union — it will be the main driver of the economy, the source of enviable jobs, and succulent procurement contracts.
Sooner rather than later, it will become Russia’s new oil — a geyser of wealth and power. Belousov’s second task will be to curb its appetite.
This is easier said than done. The war has already become the main driver of Russia’s economic growth and wealth redistribution.
As Clemenceau said in 1919: “It is easier to make war than peace.” That particular conundrum will remain, whatever the new defense minister does.
Alexander Kolyandr is a researcher for the Centre for European Policy Analysis (CEPA) specializing in the Russian economy and politics. Previously he was a journalist for the Wall Street Journal and a banker for Credit Suisse. He was born in Kharkiv, Ukraine, and lives in London.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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