In a major reshuffle of his cabinet, President Vladimir Putin is set to relieve Sergei Shoigu, Russia’s defence minister of 12 years, of his post and appoint him as secretary of the Security Council, a position previously held by Nikolai Patrushev since 2008.

The move has prompted speculation among Kremlin watchers, intrigued by what could have led to the surprise move, and what it means for Shoigu, Patrushev and Andrei Belousov, the deputy prime minister and economist set to become Russia’s new defence minister.

Shoigu is known as a Putin loyalist, the pair having been photographed on many a manly fishing expedition through the depths of Siberia together, and has led the Russian armed forces throughout their invasion of Ukraine.

Belousov’s appointment is expected to be confirmed by the Federation Council this week.

“Today, the winner on the battlefield is the one who is more open to innovation, more open to implementation as quickly as possible,” Kremlin spokesman Dmitry Peskov told the press. “It is natural that at the current stage the president decided that the Ministry of Defence should be headed by a civilian.”

Observers said the reshuffle is a signal that Russia has no plans to end its war on Ukraine, now in its third year.

“This indicates that the Kremlin is not seeking an exit from Ukraine, but once to extend their ability to endure the conflict as long as possible,” said Jeff Hawn, a doctoral candidate and guest teacher at the London School of Economics’s international history department. “Russia is very limited [on] how much they can increase scale, due to economic deficiencies. However, they can maintain a certain level of attritional warfare. And are likely hoping to do that longer than Ukraine can.”

Shoigu will soon hold the deputy president role of the Military-Industrial Commission. He will also head the Federal Service for Military-Technical Cooperation (FSVTS), which is responsible for military hardware dealings with other countries.

“With an economist taking over the Defence Ministry, and the old minister taking up a policy and advisory role, the technocrats are in the ascendant. The goal though is not peace, but a more efficient war,” Mark Galeotti, the author of several books on Putin and Russia, wrote in The Spectator. “As Putin digs in for the long term, with the ‘special military operation’ now being the central organising principle of his regime, he knows he needs technocrats to keep his war machine going.”

Putin’s decree also removes the FSVTS from the Ministry of Defence, leaving Shoigu only answerable to the president himself.

“In just over two years of the special military operation [in Ukraine], Sergei Shoigu has nevertheless outgrown the level of the minister of defence in terms of his professional level,” Alexander Mikhailov of the Bureau of Military-Political Analysis, a Russian defence think tank, told the state-run TASS news agency, noting Shoigu’s level of international expertise and experience abroad.

Military expert Rob Lee wrote on X, “This doesn’t appear to be designed as a demotion for Shoigu, who not only received an important position as Secretary of the Security Council but also will retain oversight of domestic and foreign defence issues.”

“The big loser in this shuffle appears to be Patrushev, who was also one of the key decisionmakers behind the invasion of Ukraine.”

It is yet unclear where Patrushev’s new assignment will be.

However, Shoigu’s new placements may not be the promotions they seem.

The reshuffle comes less than a month after Deputy Defence Minister Timur Ivanov was arrested on bribery charges.

“The Security Council is becoming a reservoir for Putin’s ‘former’ key figures – who cannot be let go, but there is no place to house them,” political analyst and founder of R.Politik, Tatiana Stanovaya, wrote on Telegram, referring to the recent turbulence in Shoigu’s career.

Ivanov enjoyed a reputation for an opulent lifestyle and has been accused of pocketing funds meant for the reconstruction of the battle-ravaged Ukrainian city, Mariupol. Stanovaya also pointed to recent disputes with Rostec, the state-owned arms manufacturer Shoigu accused of slow work, and the fallout from last year’s Wagner mutiny.

“Putin thereby makes it clear that the connection with the previous position will remain, that continuity is important – quite in his spirit,” Stanovaya continued. “But all this is more reminiscent of a desire to take Shoigu out of the game so as not to offend, with maximum honours. Not because he is a friend, but because it is safer for Putin himself. Just like it happened with Medvedev in January 2020. Apparently, this is how the Security Council justifies its own name: to ensure security from former heavyweights who have nowhere else to settle and cannot be thrown out.”

Who is Andrei Belousov?

Like Shoigu, Belousov is also known as a Putin loyalist and keen proponent of government spending, thought to have been behind the controversial Value Added Tax (VAT) increase in 2019.

“One of Putin’s most extravagant appointments is the Keynesian economist Belousov as defence minister,” said Andrei Kolesnikov, a senior fellow at the Carnegie Endowment for International Peace. “It is now important for Putin to make sure that the enormous sums of money spent on war are not stolen.”

“Belousov is not just a performer [of tasks], he has his own vision in his head of how the Russian economy should function, and he brings it to life as best he can,” a source close to the Kremlin told independent Russian news outlet The Bell.

Another added that, in 2014, he was the only economist close to Putin at that time who supported the annexation of Crimea.

“I have known Andrei Belousov, the new Russian defence minister, for many years,” said economist Konstantin Sonin in a lengthy post on X, adding that they do not enjoy a relationship now. “The new changes – Belousov instead of Shoigu at Defence [Ministry], Shoigu instead of Patrushev in Security Council – is a perfect illustration of our ‘degenerate autocracy’ theory.

“Things are not going according to Putin’s plan, but he will endlessly rotate the same small group of loyalists. Putin has always feared to bring new people to the positions of authority – even in the best of times, they must have been nobodies with no own perspectives. Towards the end of his rule, even more so.”