Putin's Reshuffle Betrays 'Serious Concerns' over Rising Cost of War: ISW

President Vladimir Putin's latest top-level reshuffle may reflect Kremlin concerns that the full-scale war on Ukraine is not going to plan, with ballooning casualties and costs in exchange for relatively limited battlefield success.

The Institute for the Study of War (ISW) think tank on Sunday said Putin's decision to replace long-serving Defense Minister Sergei Shoigu with economist Alexei Belousov suggests the Russian leader "has serious concerns over corruption levels and misuse of funds within the Russian military, conflicts between the military and the Russian DIB [defense industrial base], and the perceived inefficacy of the Russian MOD as a whole."

Shoigu—who is being moved to head Russia's powerful national security council—has faced sustained criticism for the military's failings in Ukraine.

Appointed to lead the ministry in 2012, much was made of Shoigu's reported success in modernizing Russia's military. The quick seizure of Crimea from Ukraine in 2014 appeared to underscore this narrative and boost Shoigu's popularity and political influence.

But Russia's disastrous invasion of Ukraine quickly revealed that Shoigu had failed to address the systemic corruption and incompetence long metastasizing at the heart of the military establishment. Last month's arrest of his deputy Timur Ivanov on corruption charges appeared to signal that the Shoigu era was coming to an end.

Putin's reshuffle indicates he is doubling down on his war economy. Belousov's appointment, ISW wrote, "is a significant development in Putin's efforts to set full economic conditions for a protracted war."

Kremlin spokesperson Dmitry Peskov explained the appointment in economic terms. "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."

"it is very important to fit the economy of the security bloc into the country's economy," Peskov added.

Respected as an economist and known as a pragmatic technocrat, Belousov can be expected to take a "very professional" approach to his new role, Oleg Ignatov—the Crisis Group's senior analyst for Russia—told Newsweek. "He's a technocrat, and he's very blunt, very straightforward," Ignatov added. "He doesn't like to hide the truth...He can fix problems."

"From Putin's point of view, it's a very good appointment," Ignatov said. Unlike Shoigu and most other top officials, Belousov does not have a power base of his own. "He's independent and loyal exclusively to Putin," Ignatov said, and likely to allow Russian generals to prosecute the war rather than meddle from above like his predecessor reportedly did.

"He has his own vision," Ignatov added, describing Belousov as "very anti-Western" and believing strongly "that the state should play a crucial role in the Russian economy." Considered "very hawkish" and not corrupt, Ignatov said, the new minister can be expected to launch a massive anti-corruption drive.

Belousov is expected to improve oversight within the beleaguered Defense Ministry and finesse cooperation with the defense industrial base so needed to win the war.

But Russia analyst and economics professor at the University of Chicago, Konstantin Sonin, wrote on Twitter—formerly known as X—that the reshuffle shows the war is "not going according to Putin's plan, but he will endlessly rotate the same small group of loyalists."

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