The recent announcement that Col. Gen. Vladislav Putilin, a former deputy defense minister, was appointed deputy minister at German Gref's Economic Development and Trade Ministry gives us insight on how President Vladimir Putin understands the state of the Russian economy and who he believes is most qualified and trusted to strengthen it. With Putilin's appointment, we are being asked to determine if military science is superior to what is known as the art of economics.

Putilin's appointment suggests a number of things. Putin is said to be dissatisfied with state economic readiness in the event of war or major natural disaster. One cannot avoid the impression that the president is more worried about the slow collapse of the country's aging industrial infrastructure. His concerns are real, but placing so much trust in the military may be a mistake. Defending the country's borders and improving the efficiency of economic management is enough of a challenge for the military at this point.

Second, Putin prefers all issues related to national security to be within the purview of the military security clique. Some in the media worry about the military's growing involvement in how the government runs economic policy. I am not so worried about the "militarization of the economy" as I am about importing bad military habits into the management of the economy. Putilin is not an economist; he is a military man educated and socialized by a command economy.

Third, the president's confidence in Gref continues to wane. Putin publicly demands that his minister accelerate the economy's growth. The best Gref can do in response is to ignore this demand – or simply contradict it. It is said that Gref and Putilin have been friends since Gref designed his lackluster strategic plan for the economy to 2010. Whether by design or sloppy PR, Gref appeared to be caught off-guard by his friend's appointment. It is a bit odd that the Defense Ministry, and not the Kremlin, broke the news of Putilin's appointment to Gref. Maybe some members of the military just wanted to do some showing-off by embarrassing their boss, Sergei Ivanov. During all the discussion of Putilin's appointment, not a word came from the Defense Minister.

Putilin's new job puts him in a powerful position. He is charged with, among other things, determining the parameters of the military budget. It is unclear if his appointment within Gref's ministry is to the advantage of the Defense Ministry. Putilin has an uneven track record when it comes to successful implementation of reforms. Remember when the Strategic Missile Forces took over the Space Forces and Space Defense under Putilin's stewardship? Even Ivanov has acknowledged that the merger was a mistake – both the idea and the implementation.

Some of the country's largest enterprises are accepting Putilin's appointment with hesitating relief and some trepidation. The idea of having contingency plans to mobilize the economy during an emergency is nothing new in Russia (or most large economies). What is new is the awareness of its necessity. Over the past decade, this concern has been treated as an unfortunate after-thought that tied up assets. Now Putin wants this trend reversed. However, there is an important difference between 10 years ago and now: Today, Russia's most important strategic assets are in private hands.

The business community's hesitating relief is due to the fact that, finally, there is a senior government official charged to interact with the business community on the issue of national economic security. The business community's trepidation is the result of not knowing how much Putilin knows about private enterprise. How much authority does the new minister expect to have over business planning in some of the country's largest enterprises? It is doubtful that Norilsk Nickel will ever accept being told to produce latrines during wartime. Krasny Oktyabr macaroni might be tasty if produced under coercion, but will shareholders agree with changes in product line? What recourse would shareholders have? Fighting bureaucratic wars is a well-tried Russian art, but dealing with wealthy individuals and shareholders will take a set of skills military personnel rarely learn.

Where do Putilin's loyalties lie? Do they lie with his life-long cadres in the military, or with his new civilian boss? Militaries around the world do their best to get as much money from the treasury as possible, and cost-effective spending is an all but alien concept. Putilin himself has waffled a great deal concerning military reform, especially his stand on conscription. Putilin's agenda – even mandate – is anyone's guess at this point. But one thing is clear: He has a tremendous task ahead of him. Balancing the needs of national security and securing stable economic growth is a difficult mission for countries like Russia that has preciously little of both.

The best of luck to Putilin, but would not it have been better to send some of Gref's people over to the Defense Ministry? In other words, would not it be better to send someone from a ministry about reform to a ministry that has scant understanding of the term?

(Peter Lavelle is a Moscow-based analyst. E-mail him at plavelle@rol.ru.)