Andrey Klepach has been removed from his position as chief economist at Russia's state development bank VEB, according to Russian media reports, following the publication of a speech in which he warned that Russia's economy is being harmed by the war in Ukraine.
Russia's state news agency TASS reported on Sunday that Klepach no longer holds the position at the bank. VEB.RF said in a statement quoted by TASS: “Andrey Klepach is no longer the chief economist at VEB.RF. His successor will be appointed shortly. The candidate has already been chosen.”
Klepach, who was appointed to the role in 2014, also confirmed his dismissal to Reuters.
Klepach reportedly warned about the economic damage from the war at a financial forum in May, but those comments were only published last week.
“We are falling behind. We are losing the technological and economic competition in the world. And we are not just losing to China and the United States — in some respects, we are also losing to Ukraine,” he said, attributing this to Kyiv receiving financial support from the West.
Klepach predicted that the economic problems caused by the Ukraine war would create a social crisis. “We will not win this war of attrition. We have the illusion that everything there (in Ukraine) will collapse. It hasn't collapsed and won't collapse. Our costs are rising,” he said.
The speech, posted on the website of the Nikitsky Club — a forum for economists, academics, and government officials — marked a rare public criticism from a senior figure at a state institution about the cost of continuing the war launched by Moscow in 2022.
Klepach held various roles in economic institutions and worked at the Ministry of Economic Development for 10 years before joining VEB.
Pressure from Ukraine
In his May speech, Klepach warned that Russia's resilience to Western sanctions is being severely tested by Ukraine's strategy of striking Russian energy and logistics infrastructure. He pointed to rising income inequality and slower gross domestic product growth compared to the U.S. and Ukraine.
In June, Russia's central bank suggested the economy might not grow at all this year.
President Vladimir Putin has reassured Russians that the economy remains stable despite what he calls external attempts to undermine it.
“Economically, we won't collapse, but our backwardness will continue to increase, with all the consequences that entails,” Klepach said in his speech, predicting a social crisis could emerge “at the exact moment when no one expects it.”
Klepach also criticized the quality of governance in Russia. “The quality of governance is almost constantly declining,” he said. “Decisions are made all the time with extremely low levels of justification but long-term strategic consequences.”
