‘Guns & Butter’: Putin Explains Reason Behind Major Cabinet Shake-Up

Russian President Vladimir Putin has for the first time explained the rationale behind this week’s major cabinet reshuffling, which for the first time of the Ukraine operation saw Sergey Shoigu removed as defense minister (and ‘promoted’ to head of the national security council), and former minister for economic development Andrey Belousov moved into the defense chief spot. He described the decision as due to the dramatic rise in the defense budget and military spending.

Putin said of Belousov: “He understands perfectly well what needs to be done in order for the economy of the entire security complex – and the Ministry of Defense as its key component – to fit into the overall economy of the country,” according to state media translation.

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The Russian president was addressing a gathering of top military officers. “This is extremely important and relates to the innovative development of industry and taking into account the capabilities of the economy and the budget,” he said, explaining further

“This relationship between ‘guns’ and ‘butter’, so to speak, must be organically integrated into the overall development strategy of the Russian state,” Putin said. “I hope that Andrey Removich [Belousov] will handle this task in the best possible way.”

Putin noted that Russia’s military spending has grown to approximately 8.7% of GDP in 2024. While not quite the 13% that the Soviet Union was spending in the 1980s at the height of the Cold War, “these are significant resources, and we have to use them very efficiently and effectively,” the president explained. 

The appointment had raised eyebrows inside and outside Russia given Belousov has no military experience, nor has he been involved in strategic decision-making regarding the war in Ukraine. Instead, Belousov has always been a ‘numbers guy’ and Russian central bank planner.

The United States was among those countries claiming that the big shake-up points to a destabilizing trend in the Kremlin due to significant losses suffered by Russia in the context of Ukraine, as well as the sometimes devastating cross-border attacks on Russian soil.

The Biden administration on Monday said it shows signs of “desperation” for Moscow sustaining the high costs of the Ukraine invasion, also amid unprecedented Washington sanctions aimed at Moscow (but which have by and large backfired).

“Our point of view is that this is further indication of Putin’s desperation to sustain his war of aggression against Ukraine, despite it being a major drain on the Russian economy and the heavy losses of Russian troops, with some estimates as high as 315,000 casualties,” State Department spokesman Vedant Patel said to a press briefing.

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