Andrei Klepach, a longtime Moscow insider, was fired for warning Vladimir Putin that Russia is heading towards a social crisis due to the prolonged war in Ukraine.
The Kremlin has dismissed Andrei klepach, a top Russian economist, following his public critique of the country’s economic and social trajectory amid the ongoing conflict in Ukraine. Klepach, who served as the chief economist at the state development corporation VEB.RF, warned that Russia is losing both technologically and economically, not just to global powers like China and the United States, but also to Ukraine.
His dismissal comes as a senior member of Russia’s liberal Yabloko party was sentenced to 11 years in a penal colony for condemning the war in Ukraine. Klepach’s comments, made during a speech at the Nikitsky Club, a forum for economists, academics, and government officials, marked a rare public critique by a senior figure at a state institution.
Klepach’s Stark Warnings
In his speech, Klepach challenged Putin’s belief that Ukraine would eventually collapse. He argued that Western support for Ukraine is a key reason the country has not collapsed and will not collapse. ‘We are losing both technological and economic competition globally,’ he warned.
‘We are losing it not only to China and the US. In some respects, we are losing it to Ukraine.’
Klepach compared the current situation to historical events that led to significant upheavals in Russia. He drew parallels with the February Revolution of 1917, which toppled the Romanov dynasty, and the collapse of the USSR in 1991. ‘No one expected the February Revolution either,’ he recalled. ‘The situation in the Soviet Union in 1991 — we had been heading towards it slowly and consistently, and everyone understood that we were heading towards a crisis, but there was no fatal inevitability that the Soviet Union would collapse.’
The Economic Impact of the War
Klepach highlighted Russia’s resilience to Western sanctions but noted that pressures are mounting due to Ukrainian strikes on energy and logistics infrastructure. He pointed to rising income inequality and a slower GDP growth rate compared to the U.S. and Ukraine. In July, the Russian central bank suggested the economy might not grow at all this year.
Repeated Ukrainian attacks on Russian oil refineries and warehouses of top online retailer Wildberries have created supply shocks, raising inflation risks and public unease. Despite these challenges, President Vladimir Putin has maintained that the economy is stable. However, Klepach predicted that a social crisis could arise ‘precisely when nobody is particularly expecting it.’
The Broader Implications
Klepach’s dismissal comes amid a broader crackdown on dissent in Russia. The Yabloko party, the only registered political party to call for an end to the war, has come under heavy pressure from the authorities. Lev Shlosberg, the party’s deputy chairman, was accused of discrediting Russia’s armed forces and spreading false information about them.
Klepach also criticized Russia’s over-dependence on China and the uncoordinated monetary, budgetary, and industrial policies that have contributed to this year’s economic slowdown. ‘The quality of governance is almost constantly deteriorating,’ he said. ‘Decisions are being made all the time that have an extremely low level of justification but long-term strategic consequences.’
Despite the dismissal, there is currently no sign of serious social unrest in Russia, amid tight wartime censorship, protest bans, long jail sentences for dissidents, and the growth in influence of the Federal security Service. However, Klepach’s warnings highlight the growing concerns about the long-term impact of the war on Russia’s economy and society.
