Moscow: Economist predicts defeat and is fired

A prominent Russian economist has been dismissed after predicting Russia's defeat in its ongoing war of attrition against Ukraine. Andrej Klepatsch, who served as chief economist at VEB.RF, the state-owned institution responsible for Russia’s economic development, was fired following his public forecasts of a Russian loss and warnings about looming economic crises. According to multiple Russian media reports published late yesterday, Klepatsch had previously made statements suggesting that Russia could not win the war of attrition against Ukraine. He was also confident that the country was heading toward a crisis. The Moscow-based newspaper The Moscow Times had earlier covered a speech Klepatsch gave at a club associated with the Moscow Stock Exchange in May, during which he stated that Ukraine would not collapse economically. “We are clinging to the illusion that everything there will collapse,” Klepatsch reportedly said. “It hasn’t collapsed and won’t collapse either.” At the same time, he pointed out that Russia’s costs were rising and that the country would suffer setbacks in both technological and economic competition globally. Klepatsch’s dismissal comes amid growing scrutiny over dissenting voices within Russia’s economic establishment. His predictions had already drawn attention from international observers, who noted that such open criticism of the government’s military and economic policies is rare in Russia. VEB.RF, a key player in financing Russia’s industrial and energy sectors, has long been under pressure to support state initiatives despite mounting financial strains caused by Western sanctions and the war effort. The timing of Klepatsch’s firing appears significant. Recent months have seen increased volatility in Russia’s economy, with inflation remaining high and foreign investment dwindling. Analysts suggest that the government may be tightening control over its economic messaging ahead of critical political developments, including upcoming elections and potential policy shifts. Klepatsch’s comments likely conflicted with official narratives promoting resilience and success in the conflict. His removal follows a pattern of silencing critics within Russia’s intellectual and business circles. Other economists and analysts have faced similar consequences for expressing views deemed too critical of the government’s handling of the war and its economic repercussions. This trend reflects broader efforts to maintain a unified front in public discourse, particularly as the war continues to take a toll on both the population and the economy. Klepatsch’s career had been marked by a mix of pro-government rhetoric and occasional skepticism. In previous roles, he had advised on infrastructure projects and supported state-led economic strategies. However, his recent assessments of the war’s impact on Russia’s standing and stability appear to have crossed a threshold that prompted his departure from VEB.RF. As the situation unfolds, the absence of Klepatsch from his position raises questions about the internal dynamics within Russia’s economic leadership. Whether this move signals a broader crackdown on dissent or simply reflects the personal decisions of VEB.RF’s management remains unclear. What is certain is that his departure adds another layer of complexity to an already challenging economic landscape.