The Kremlin has fired one of Russia’s most senior bankers after he warned that the country was falling behind economically and technologically — and could lose its economic war of attrition with Ukraine. Andrey Klepach, chief economist at state-owned VEB, was reportedly dismissed at the behest of the authorities after comments he made at a roundtable in May surfaced publicly. Banker breaks ranks with a stark warning Klepach said Russia was “falling behind” globally and warned that Ukraine’s economy was continuing to survive despite the devastation caused by the war. He also warned that the costs of the conflict were mounting inside Russia, pointing to worsening healthcare and rising inequality. A social crisis, he said, could emerge “at a moment when no one is really expecting it”. His historical comparisons were particularly striking. Klepach cited the unexpected outbreak of the 1917 February Revolution and the collapse of the Soviet Union in 1991 as examples of upheaval that had not been considered inevitable. His punishment exposes the Kremlin’s pressure point Speaking critically about the war carries serious risks in Vladimir Putin’s Russia, where laws against alleged “fake news” about the military can bring lengthy prison sentences. Klepach nevertheless appeared to avoid criminal charges, telling Vedomosti that he would “see what happens next”. His dismissal, however, sends a stark warning to other economists operating inside the system. Russia’s numbers are starting to bite The firing comes as pressure builds on the Russian economy. GDP grew by 1.3 per cent between April and June, but economists expect the rebound to be temporary, while the effects of Ukrainian strikes on Russian oil infrastructure have yet to fully appear in official data. The central bank has cut its growth forecast for the year to up to 1 per cent, while the Kremlin faces soaring defence costs. Government procurement rose by almost 40 per cent between January and July compared with the same period last year. The war is tightening the economic vice Russia can silence a banker. It cannot easily silence the economic pressures he identified. With defence spending surging, inflation still elevated and growth forecasts weakening, the longer the war continues, the harder those pressures are likely to become. Klepach may have been the first senior economist to say it so bluntly — but he is unlikely to be the last. Firing a senior banker won’t save Putin’s faltering war economy
Create an account or sign in to comment