“We’re losing.” It was not an opponent of the Kremlin who uttered such clear words about the war in Ukraine, but one of Russia’s best-known economists, who for over a decade was at the top of one of the main state financial institutions. Words that may now have cost him his job.
Andrei Klepach was in fact removed from the post of chief economist of VEB, the Russian state development bank, after having publicly questioned the sustainability of the war and denounced the country’s growing economic and technological delay. Veb confirmed that Klepach no longer holds the position, without however explaining the reasons for the dismissal. The economist himself confirmed his exit to the agency.
Klepach, appointed VEB’s chief economist in 2014 after working for about ten years at the Ministry of Economy, made the comments during a financial forum in May. His speech, published on the website of Nikitsky Club (a forum for political and economic discussion), was however only picked up by the Russian media last week.
“Our delay will continue to grow”
The picture drawn by the economist is very different from that of an economy capable of sustaining conflict indefinitely. “We are falling behind,” Klepach warned, arguing that Moscow is losing technological and economic competition with the United States and China and, in some respects, even with Ukraine, thanks to the financial support Kiev receives from Western countries.
According to Klepach, Russia cannot win a long “war of attrition” by counting on the collapse of its opponent. “We have the illusion that everything will collapse there. It hasn’t collapsed and it won’t collapse,” he said, underlining instead how the costs incurred by Moscow continue to increase.
The economist does not foresee an imminent collapse of the Russian economy, which has so far shown remarkable ability to resist Western sanctions. The problem would rather be the progressive deterioration of the country’s position: the gap with other large economies could continue to widen, with consequences that in the long term could even lead to a social crisis.
Also weighing are the Ukrainian attacks on Russian energy and logistics infrastructure, which have caused new tensions on supply chains and risk fueling inflation. In July the Russian Central Bank itself raised the possibility that the economy might not grow at all this year.
Klepach also criticized Moscow’s growing dependence on China and poor coordination between monetary, industrial and budgetary policies. The judgment on the state machine is even harsher: according to the economist, the Russian “quality of governance” is progressively worsening, with decisions that are poorly motivated but capable of producing long-term strategic consequences.
The pacifist leader sentenced to 11 years
The case comes as the space for critical voices on the war is further narrowed in Russia. Lev Schlosberg, vice-president of Yabloko, a historic liberal and pacifist opposition party, was sentenced by a Pskov court to 11 years and one month in prison for having “discredited” the army and spread information considered false about the armed forces.
Among the complaints include the sharing on his Telegram channel, in February 2022, of an article by Ekho Moscow with a cover of Daily Mirror and the publication of a recording of a debate in which the need to end the war was discussed.
Schlosberg rejected the accusations, claiming that some of the disputed statements had actually been uttered by his opponent during the confrontation. During the trial he called the war in Ukraine a “catastrophe” for Russia. He will have to serve his sentence in a penal colony.
The ruling also comes a few days after the Russian Supreme Court’s decision to prevent Yabloko from participating in the next parliamentary elections. Two different stories, that of Klepach and that of Schlosberg, which show how risky it can be, in Russia at war, to publicly question the costs and consequences of the conflict.