Russia's Vnesheconombank dismisses chief economist after warning of economic lag

Andrei Klepach, a prominent Russian macroeconomist, has been dismissed from his role as chief economist at the state-owned Vnesheconombank (VEB) following public statements warning that Russia is losing ground in global economic and technological competition. The bank confirmed his departure without providing a specific reason.

Klepach made these candid remarks in May at a financial forum, though they gained wider attention recently. According to Reuters, two sources close to the situation confirmed his subsequent removal from VEB. "We are falling behind. We are losing both technological and economic competition globally. And we are losing it not only to China and the United States, but, in a way, we are also losing it to Ukraine," Klepach stated, linking Russia's struggles partly to Western financial aid for Ukraine.

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We are falling behind. We are losing both technological and economic competition globally. And we are losing it not only to China and the United States, but, in a way, we are also losing it to Ukraine.

He also addressed the economic toll of the war on Russia, countering the notion that Ukraine's economy would collapse under the conflict's pressure. "We will not win the race in this war of attrition. We have an illusion that everything there will collapse. It has not collapsed and will not collapse. Our costs are increasing," he said, according to Reuters, even anticipating the possibility of a social crisis.

Vnesheconombank, Russia's development bank, confirmed Klepach's exit but remained silent on the cause. Klepach, who had held the position since 2014, also confirmed his dismissal to Reuters. His speech, published on the Nikitsky Club website, represents a rare public critique from a high-ranking official of a state institution regarding the economic consequences of Russia's 2022 invasion of Ukraine. Klepach previously held various economic roles, including a decade at the Ministry of Economy.

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We will not win the race in this war of attrition. We have an illusion that everything there will collapse. It has not collapsed and will not collapse. Our costs are increasing.