The Technocrat Who’s Taking Control of Putin’s War Effort

In more than two years of war against Ukraine, President Vladimir V. Putin of Russia has found that the technocrats he assembled to manage the Russian economy have turned out to be his most reliable foot soldiers.

The Russian leader has now tapped one of them, Andrei R. Belousov, who has no military experience, to become his next defense minister.

Mr. Belousov, 65, a fan of Rembrandt who is fond of quoting Fyodor Dostoyevsky and Carl Jung, has for years stood apart from the other technocrats, many of whom have provided excellent economic guidance, even as they privately have seen Mr. Putin’s provocative geopolitical moves as hazardous for Russia’s economic future.

Mr. Belousov, however, has been a true believer.

His rise shows how Mr. Putin is fully redirecting Russia’s economy toward the war effort and suggests that the Kremlin may grow even more deeply involved in mobilizing industry for the fight. Mr. Putin cast his new defense chief, who joined him on a trip to China in recent days, as a much-needed coordinator for a rapidly changing Russian military industrial complex that is critical to success in the war.

“His job is to open the Defense Ministry to innovation,” Mr. Putin told journalists on Friday, while visiting the Chinese city of Harbin.

The philosophy that Mr. Belousov has promoted for decades casts state intervention as the main driver of economic development, as opposed to private business investment, an outlook that makes him particularly relevant to the moment.

“There are a number of other quite efficient technocrats. He is different compared to these people,” said Andrei Yakovlev, an economist at Harvard University’s Davis Center for Russian and Eurasian Studies. His ideological view, Mr. Yakovlev said, is “in some sense close to Putin’s view — about this confrontation with the West, and the necessity to do many things to defend Russia.”

He also brings a clear personal loyalty to Mr. Putin, having advised the president for years, and is expected to ease tensions between the Defense Ministry and the state arms industry at a time when battlefield success depends on industrial might. And he has the clean image of an expert, largely untainted by scandal, and has openly embraced the Russian Orthodox religion — a major part of Mr. Putin’s campaign for family values.

Sergei M. Guriev, a Russian economist and the provost at Sciences Po, a research university in Paris, suggested that Mr. Belousov’s appointment reflected the financial pressures that Mr. Putin will face if Russia continues to make large-scale defense outlays.

“Putin understands that he really doesn’t have a lot of money,” Mr. Guriev said. “One of the indications is that Putin already in 2024 has started talking about increasing taxes. Appointing Belousov sends a signal that he will want spending to be less corrupt and more efficient.”

The son of a prominent economist, Mr. Belousov grew up in an intellectual family. His mother was a chemist. His father advised the Soviet government in a high-profile attempt to reform the Communist economy in the 1960s.

Mr. Belousov graduated from Russia’s prestigious Moscow State University and spent much of the 1990s and 2000s conducting research and making economic forecasts, first at a Russian Academy of Sciences research institute and later at an economic think tank he founded.

At the time, his contemporaries, like the Russian central bank chief, Elvira Nabiullina, and the Sberbank boss, Herman Gref, fully embraced Western-style market economics, working to transform Russia into a modern European economy driven by competition, investment and innovation among private businesses.

Mr. Belousov was different. He understood modern economics and did not want to return to the Soviet system. But he pressed for an aggressive government role in the economy, envisioning a kind of state-directed capitalism.

“His whole philosophy basically was whatever is happening that’s good, this is driven by the state,” said Konstantin Sonin, an economist at the University of Chicago. “The state is the source of innovation, the state is what drives business and eventually leads to the development of the economy. Business in this view is a necessary evil but not something that is a force for good.”

Mr. Belousov also earned a reputation as a good forecaster. A prescient manuscript he released in 2005 warned of an increased likelihood of a financial crisis in 2008-2009, in part from “a cyclical wave of defaults” in high-risk financial instruments.

He joined the government in 2006 as a deputy economy minister. He later served as economic chief to Mr. Putin when he was prime minister and became Russia’s economic development minister when the Russian leader returned to the Kremlin as president in 2012, following a four-year hiatus. Mr. Belousov ran the ministry for a year before joining the Kremlin as its top economic adviser.

From his influential perch, Mr. Belousov tussled with other Russian economists, who argued for restrained state interference in private markets so businesses could drive growth. He wanted state money from the national welfare fund to be spent on infrastructure and other government development projects; his opponents argued the funds should be saved for financial emergencies.

Despite crossing swords with top corporate leaders, he worked to better the country’s business environment, spearheading a state-backed agency that improved Russia’s position in the World Bank rankings for ease of doing business to No. 28 in 2019 from No. 120 in 2011.

Mr. Belousov caused a furor in 2018, when he proposed raising about 500 billion rubles (or about $7.5 billion at the time) for the government from a surprise “windfall” tax on metals and chemical firms, which he said had been reaping extraordinary profits.

The proposal ignited a sell-off of stocks in those sectors and ultimately failed. But as the Russian government looked for ways to shore up money to fund the war effort last year, the idea of a windfall profits tax re-emerged. This time, it went through.

In early 2020, Mr. Belousov was named deputy prime minister, helping run Russia’s Covid-19 response and standing in as prime minister when Mikhail V. Mishustin came down with the virus.

At the time, the Russian publication Metla published an article highlighting how a small engineering and digital consulting firm run by Mr. Belousov’s son, Pavel, had won government contracts with the state arms company, space agency and Trade Ministry. It also said his son was driving around in a Mercedes S.U.V. costing roughly $79,000.

By then, Mr. Belousov was embroiled in another uproar over the arrest of an American investor, Michael Calvey, who was charged with embezzlement amid a business dispute with a friend of Mr. Belousov. Mr. Calvey denied the charges.

In an interview with Russian Forbes, Mr. Beluosov denied helping his friend secure Mr. Putin’s blessing to have the authorities pressure the American businessman, saying that if he had brought such a matter to the Russian leader, he would have been “carried out feet first.” Mr. Calvey received a five-and-a-half-year suspended sentence that was later reduced.

Since the Kremlin’s full-scale invasion of Ukraine began in February 2022, Mr. Belousov has placed himself at the forefront of formulating national “megaprojects,” where the state is seeking to spur innovation and big leaps in industrial development.

He has promoted one such project for Russia’s domestic drone industry. Another is aimed at microelectronics. He told Kommersant that the “new normal” in Russia, with restrictions and geopolitical pressures, would last at least a decade.

“We need our own lines of high-tech products: aviation, shipbuilding, electronics, machine tools, diesel engines, turbines, etc.,” he said in the interview. “If this product is needed, then we must be able to make it.”

Many experts question whether such an approach can work in Russia, where corruption is rife and the rule of law weak. Despite many attempts over many years, the Russian state has failed to drive innovation, Mr. Guriev said, noting that state investment is often pilfered by corrupt officials.

He said that Mr. Belousov had been in the government for many years and, so far, had had little success creating dynamic new companies, noting that most of the world’s innovation was happening in private companies in places like Silicon Valley.

Nevertheless, Mr. Belousov’s ideas appear to have become intoxicating for Mr. Putin. The Russian leader is looking for a way to make his new war economy a foundation for Russia’s future development, while trying to avoid the excessive military spending many Russians believe led to the Soviet Union’s collapse.

“Belousov’s task would be to make sure that the military gets everything they need and more, but without killing the economy,” said Alexander Kolyandr, a nonresident senior fellow at the Center for European Policy Analysis, a nonprofit based in Washington. “The needs of the war may justify anything.”

Oleg Matsnev contributed reporting.