RIA Novosti reports that "President" Putin has found the ideal candidate to replace Sergei Ivanov as Secretary of Defense: An accountant named Anatoly Serdyukov.

Vladimir Putin has always been famous for his ability to make unexpected personnel changes.

Although sources on Sergei Ivanov's staff had hinted that their boss would be promoted soon, nobody could venture to predict how high he would be moved. Some said he was ready for prime minister, a post that could pave his way to the president's chair. Ivanov, it turns out, has been appointed first deputy prime minister, which should level the playing field for the 2008 presidential elections. Ivanov and his rival in the race, First Deputy Prime Minister Dmitry Medvedev, must now prove that they are fit to hold the country's top post. Medvedev is responsible for the four priority national projects in healthcare, agriculture, education and housing construction. Ivanov has been put in charge of civilian and defense industries.

Can they prove their worth in the 12 months before the elections? Or will Putin propose other candidates, which he has the right to do as president and a citizen of Russia? Nobody can answer these questions yet.

For now, it would be interesting simply to determine why Ivanov has been replaced as defense minister by financier Anatoly Serdyukov, former head of the Federal Tax Service, whom few people in the army know. Statements on this issue by military experts can be reduced to two explanations:

First, by making this sensational change in the defense ministry, Putin has shown the country, the army and the world that he alone is in charge of Russia's military policy. Defense ministers can change, but the president will always remain in charge of the modernization and rearmament of the armed forces, conversion of the army to a mixed volunteer/conscript system of recruitment, and the social welfare for the military. Judging by the reaction of the army, which has hardly taken notice of the change at the ministry's top, officers fully agree with this principle.

Second, although many good words have been said about the departing minister ("I think Sergei Ivanov has fulfilled his tasks in the defense ministry honorably" - Putin), military analysts claim there was a note of displeasure in the president's words. ("In modern conditions, we need someone with experience in the economy and finance to address this task, to organize efficient work [of the armed forces], and to rationally use huge budgetary funds - at least they are huge for Russia" - Putin).

LR: So Ivanov was a failure just like Putin. Naturally, his next step may be the presidency since, like Putin, he posesses the key qualification, slavish obedience to the outgoing president and a firm committment not to send him to prison.

Indeed, spending on the rearmament of the army and the navy has grown by 250% times since 2001; the 2007 budget allocates more than 300 billion rubles ($11.44 billion), or 20% more than in 2006. However, the acquisition of modern hardware is lagging behind requirements in the Russian armed forces, only 20% of whose weapons are modern, and even behind the demands of the Indian army.

India, which is a major military-technical partner of Russia, has bought more than 100 Su-30MKI Flanker multirole fighters, 350 T-90C main battle tanks, four multirole frigates, submarines, supersonic anti-ship missiles, and Smerch multiple-launch rocket systems in the past few years.

Although comparable funds were allocated to the Russian armed forces, they have received only several weapons systems over that same period, including two Su-34 Fullback fighter-bombers late last year, seven modernized Su-30MK2 fighters, one battalion (30) of T-90 tanks, and three ground-based RS-12M2 Topol-M intercontinental ballistic missile systems.

Funds for housing and capital construction, training, recruitment of contract servicemen, and combat training have not been used wisely either. The new defense minister will have to work hard to remedy these shortcomings.

Officers know very little about Anatoly Serdyukov. Apart from serving his obligatory two years of military service (1984-1985) after graduation from the Leningrad Institute of Commerce, he has never had anything to do with the army. He worked for commercial organizations (the furniture business) and tax services, where he has made a career and was head of the Federal Tax Service for the past three years. His colleagues said he was a top-class professional and a workaholic.

LR: In another country, officers might balk at being led by an accountant they've never heard of. But in Russia, officers know better than to balk. When the pitches come they swing at them, even if they are being pitched in a different stadium.

At the same time, Serdyukov has done his best to avoid the limelight; he did not give a single interview during his work at the tax service and his face has not become a fixture on TV. According to experts, this means that the issue of military reform, which has been a favorite of the media, will now be toned down.

How soon can Serdyukov learn the ropes in the defense ministry? It is a difficult post with complicated tasks, and it will take some time for him to get his bearings. However, analysts predict that after a new president comes to the Kremlin in 2008, he will appoint a new defense minister who will take on new tasks.

So far, the president has given the task of controlling the situation in the army and navy and their reforms to professionals on the General Staff, who have the skills and experience to fulfill Putin's orders.