The chief economist of the Kremlin’s top state bank has defied Vladimir Putin and sounded the alarm about Russia’s flailing war with Ukraine.
Andrei Klepach, chief economist at Vnesheconombank and a former Putin appointee, gave a scathing assessment of where things stand for Russia at a Moscow forum, according to The Moscow Times.
“We’re falling behind,” Klepach was quoted as saying. “We’re losing both the technological and economic competition globally. And, as I’ve already said, we’re losing not only to China and the U.S., but in some ways, we’re losing to Ukraine.”
“We won’t win the competition in this war of attrition. We’re under the illusion that everything will collapse. It hasn’t, and it won’t. Our costs are mounting,” he added.
Klepach’s dire warning came as the Russian president embarked on a desperate charm offensive to bolster support for his war as the so-called “special military operation” dragged on in its fifth year, yielding none of the quick victories the Kremlin had promised.
Instead, Putin’s humiliating setbacks have increasingly been laid bare, with Ukrainian long-range drone strikes bringing the war home to ordinary Russians and bleeding the Russian economy by way of fuel shortages and damaged infrastructure. Ukraine’s defense ministry twisted the knife further this week with an announcement that captured Russian tanks would be put on display in five European countries.
Putin, meanwhile, has shrugged off economic concerns and vowed to double down on the war even as some members of the country’s elite say it’s time to find an off-ramp. Klepach appeared to allude to this disconnect as he warned of “mounting” damage.
“The conflict in Ukraine, involving NATO, has lasted longer than the Great Patriotic War, and there’s no end in sight. Both sides are escalating their attacks, including on each other’s economies. Losses from Ukrainian military strikes on our infrastructure—ports, oil and gas, chemical plants, and logistics—are mounting and are already becoming a significant macroeconomic barrier to Russian economic growth,” he said.
The dire outlook prompted Klepach to draw parallels to the fall of the Soviet Union in 1991 and the February Revolution, the 1917 uprising in Russia that toppled Tsar Nicholas II and the centuries-old Romanov dynasty.
He warned that the country was heading towards a “social crisis” that could hit “when no one particularly expects it,” according to The Moscow Times. His remarks appear to have been largely censored on the Russian internet—no trace of his comments could be found on the main search engine, Yandex.
“No one expected the February Revolution, let me remind you,” he said. “Lenin wrote in December 1916 that ‘We won’t live to see it,’ but he did just a few months later,” Klepach said.
“I believe Russia won’t collapse, but I’m almost certain we’ll reach a social crisis. We won’t collapse economically, but our lag will widen, with all the ensuing consequences,” he warned.
Abbas Galyamov, a former speechwriter for Putin, said Klepach’s remarks were particularly noteworthy because the Russian president had been known in the past to heed his advice.
“When I worked in the government apparatus between 2008 and 2010, Klepach served as deputy head of the Ministry of Economic Development. I frequently witnessed the close attention Putin paid to what he said,” he wrote on Telegram. “It would be good if Putin listened to him this time as well.”
