Russian chief economist gets fired after saying Moscow cannot win economic ‘war of attrition’

Russia’s state development corporation VEB.RF has dismissed its long-serving chief economist Andrey Klepach after remarks in which he said Russia could not win the economic “war of attrition” with Ukraine were circulated in the media.

Klepach’s departure was first reported by Meduza, an independent Russian-language news outlet based in Latvia, which cited reporting by The Bell and Russian business newspaper Vedomosti. Vedomosti separately confirmed that Klepach had left his position, citing a representative of VEB.RF.

Andrey Klepach is no longer Chief Economist at VEB.RF, his successor has already been nominated, the corporation’s press service told TASS. “Andrey Klepach is no longer serving as chief economist at VEB.RF. His successor will soon be appointed. The candidate has already been selected,” it said.

VEB.RF, formerly known as Vnesheconombank, is a Russian state-owned development corporation that finances major national projects and has been closely associated with the Kremlin’s economic policy.

The corporation confirmed to Vedomosti that Klepach was no longer its chief economist and said a new person would be appointed to the position. It declined to comment on the reasons for his departure.

Klepach himself confirmed to Vedomosti that he had left VEB.RF, but did not discuss why. Asked about his future plans, he told the newspaper: “We’ll see what happens next.”

The Bell, an independent Russian business and political news outlet, reported that two economists familiar with the situation had linked Klepach’s dismissal to his May speech. One of The Bell’s sources said VEB.RF chief Igor Shuvalov had dismissed Klepach following a “call from above”.

Another person familiar with Klepach told Vedomosti that his departure was connected with the economist’s “personal sharp assessments” of Russia’s economic and political development, which could not coincide with the official position of the state corporation.

‘We will not win this war of attrition’

The remarks at the centre of the controversy were made by Klepach at a late-May meeting of the Nikitsky Club of the Moscow Exchange.

The Moscow Times later drew attention to the speech, in which Klepach challenged the assumption that Ukraine’s economy would eventually collapse under the pressure of the war.

“Therefore, we will not win the competition in this war of attrition,” Klepach said, according to the report. “We have an illusion that everything there will collapse. It has not collapsed and will not. Our costs are mounting.”

Klepach also said Russia was losing both the technological and economic competition globally, not only to China and the United States but, in some respects, to Ukraine.

He acknowledged the damage to Ukraine’s economy and its demographic problems, but stressed that the country was nevertheless surviving despite the war.

Klepach was not an outside critic but a senior figure in Russia’s state economic establishment. He had served as VEB.RF’s chief economist for 12 years and previously spent a decade at the Ministry of Economic Development.

VEB.RF has previously sought to distance itself from some of Klepach’s public assessments, stressing that his views on political, social and economic issues were his personal opinions and did not represent the corporation’s official position.

Klepach, 67, has spent decades inside Russia’s economic institutions. He graduated from Moscow State University and began his career as an academic before moving to the Institute of Economic Forecasting of the Russian Academy of Sciences. He later headed a research department at the Russian Central Bank and worked as an executive director and co-founder of the Centre for Development economic foundation.

From 2004 to 2008, he headed the macroeconomic forecasting department at the Ministry of Economic Development. He then served as deputy minister from 2008 to 2014, overseeing economic forecasting, strategic planning and budgeting.

He joined Vnesheconombank as chief economist in 2014 and remained in the position after the state corporation was renamed VEB.RF. He also served on the boards of several major Russian state corporations, including Roscosmos, the United Shipbuilding Corporation, the United Aircraft Corporation and Rosatom.