Haunted by the collapse of the Soviet Union, President Putin made the surprise choice of an economist for defense minister. In the 1980s, out of control military spending — for the Soviet occupation in Afghanistan and to match the Reagan era arms race — led to consumer shortages and the collapse of communism in 1991.

“Because of well-known geopolitical circumstances around us, we are gradually getting closer to the situation in the mid-1980s when the share of spending on security was just 4 per cent,” Mr. Putin’s spokesman, Dmitry Peskov, told reporters about the appointment of Andrei Belousov as defense minister.  Noting that Russian spending on defense has doubled over the last two years, he said: “This demands special attention.”

The collapse of the Soviet Union was traumatic for Mr. Putin, a mid-career KGB officer in East Germany at the time. Today, his full scale invasion of Ukraine is often seen as a step toward rebuilding a Russian empire along the borders of the old Soviet Union.

“The West is trying to drag us into an arms race — they are trying to wear us down, to repeat the trick they succeeded with the Soviet Union in the 1980s,” Mr. Putin warned Russia’s leadership in his state-of-the-nation speech in February. “Therefore, our task is to develop the defense-industrial complex” along with “the scientific, technological, and industrial potential of the country.”

To wring more bang for the ruble out of Russia’s massive defense budget, Mr. Putin eased out his defense minister for 12 years, Sergei Shoigu. Counting 11 years as minister of Emergency Situations, Mr. Shoigu, 66,  was the longest-serving minister in the history of modern Russia. He led Russia’s first invasion of Ukraine, in 2014, and Russia’s intervention in Syria, in 2015. His new title is secretary of Russia’s Security Council, a post that gives him access to Mr. Putin, but no command authority.

Mr. Shoigu’s long years in power brought corruption, complacency, and inefficiency. Prior to Russia’s abortive military uprising last June, the minister was the target of repeated  video rants by the leader of the mutineers, Yevgeny Prigozhin. Last month, in a sign that changes were coming, Mr. Shoigu’s right-hand man, Deputy Defense Minister Timur Ivanov, was jailed at Moscow on charges of “large scale corruption.” Online photos show a mini-Versailles palace that General Ivanov allegedly built with kickbacks from military contracts.

Today, Russia’s Federation Council, or senate, is expected to rubber stamp the nomination of Mr. Belousov. Seen as a “Mr. Clean,” the white-haired 65-year-old has worked in various economic posts for the Kremlin over the last 25 years. For the last four years, he has served as First Deputy Prime Minister. As a professional insider, he now has the task rationalizing the massive defense budget and squeezing out much of the corruption. A pro-Kremlin political analyst, Sergei Markov, wrote on Telegram that Mr. Belousov’s “first task will be fighting corruption.” 

Although Russia still floats on a sea of oil and gas, the invasion of Ukraine cost Russia its main market for its main export product — pipeline gas to Europe. Gazprom, long Russia’s most profitable company, recently registered a $7 billion loss for last year — its first loss  in 25 years. Faced with shrinking export revenues, Mr. Belousov’s job will be to help the Kremlin provide guns and butter.

A lifelong economist who never spent a day in the army, Mr. Belousov is expected to leave battle planning to his generals. For now, General Valery V. Gerasimov, chief of Russia’s General Staff, remains in place. A key architect of Russia’s bungled invasion of Ukraine, General Gerasimov was the other main target of the military mutineer’s video tirades last year.

Russian troops are making small gains, most notably by opening a second front near Kharkiv, Ukraine’s second-largest city. However, these gains come at a high human cost. On Sunday, the day of Mr. Belousov’s appointment, Russia reportedly suffered the worst casualty toll of the 27-month war: 1,740 soldiers killed or severely wounded.

“Sergei Shoigu has overseen over 355,000 casualties amongst his own soldiers & mass civilian suffering with an illegal campaign in Ukraine,” Britain’s defense secretary, Grant Shapps, writes on X. “Russia needs a Defense Minister who would undo that disastrous legacy & end the invasion — but all they’ll get is another of Putin’s puppets.”

From Washington,  the State Department deputy spokesman, Vedant Patel, told reporters yesterday that Russia’s defense minister switch is a further indication of Mr. Putin’s “desperation to sustain” his invasion of Ukraine.

Though Soviet-trained, Mr. Belousov appeals to Mr. Putin as a modern man. Over the last six months, he gained national attention as architect of Russia’s new, state-led drone program.

Mr. Belousov “personally announced in January 2023 that Russia had finalized the Unmanned Aircraft Systems project, which provides 696 billion rubles,” or about $7 billion, “for the production of 32,000 drones per year until 2030,” the Washington-based Institute for the Study of War reported Sunday.

Mr. Peskov, the presidential spokesman, chimed in, telling reporters Sunday that Russian’s Defense Ministry “should absolutely be open to innovation, to the introduction of all advanced ideas. Today on the battlefield, the winner is the one who is more open to innovation.”

The other message from the Belousov appointment is that Mr. Putin is in the Ukraine war for the long haul. By bringing an economist to fine tune Russia’s war economy, the Kremlin prepares to go head to head with the West in military production. Washington’s approval three weeks ago of $61 billion in aid to Ukraine may have given new urgency to a leadership shakeup.

“Putin’s priority is war,” a former Russia Central Bank advisor, Alexandra Prokopenko, posted on X. “War of attrition is won by economics.”

From Kyiv, British analyst Jimmy Rushton, observed on X that Mr. Shoigu’s “replacement with a (relatively experienced and apparently competent) economist pretty clearly signals Putin believes victory in Ukraine will come via outproducing (and outlasting) Ukraine and her Western allies. He’s preparing for many more years of war.”