Top economist fired in Russia after scandalous speech about war

Andrei Klepach, chief economist of Russia's state corporation VEB.RF, was dismissed after the uproar over his May speech, in which he said Russia was losing the war of attrition and facing a looming social crisis. The dismissal took place on August 16, with the order signed by VEB head Igor Shuvalov after a call 'from above'.

Andrei Klepach, the chief economist of the Russian state corporation VEB.RF, was dismissed following public backlash over his May speech. According to Novaya Gazeta Europe, the dismissal occurred on August 16, right after a surge of media interest in his earlier remarks. During that speech, the expert openly stated that Moscow had no prospects of winning the protracted war of attrition and warned of an inevitable acute social crisis. One of the publication's informants claims that the dismissal order was signed by VEB head Igor Shuvalov after a call 'from above'. A second source also confirmed a direct link between the dismissal and the recent uproar over the May speech. Klepach has about twelve years of experience as chief economist of the state corporation. Earlier, in 2004, he headed the macro-forecasting department at the Russian Ministry of Economic Development. From 2008 to 2014, he served as deputy minister. After moving to VEB, he also became deputy chairman of the corporation's board. Speaking in the spring, Klepach detailed the destructive impact of Western sanctions and strikes on critical infrastructure. According to him, the country is bogged down in the conflict and losing its position on the world stage. He openly admitted Russia's severe lag behind major world powers. 'We are falling behind. We are losing both the technological and economic competition in the world. Moreover, as I said, we are losing not only to China and the US, but in some ways to Ukraine,' Klepach said. The economist emphasized the illusory hopes for a quick collapse of Ukraine's financial system, which is externally supported. Meanwhile, Russia's costs are snowballing. 'In this war of attrition, we will not win the competition. We have an illusion that everything will collapse there. It hasn't collapsed and won't. Our costs are rising,' Klepach noted. After a short-term military boom, the country's economy entered a prolonged phase of decline. Civilian industries have slid into recession, and accumulated imbalances threaten a systemic explosion. According to the expert, the coming social crisis could erupt suddenly, echoing the scenario of 1917. Meanwhile, the technological gap with developed countries will only widen rapidly.