Kathmandu— Andrey Klepach has been removed from his position as chief economist at Russia's state development bank, VEB, after publicly warning that the war in Ukraine is harming the Russian economy and causing it to fall behind global competitors. The dismissal, reported by Russian state news agency TASS on Sunday, follows a speech delivered in May but only recently published online detailing Klepach’s concerns about Russia's economic future. He warned of mounting costs, declining competitiveness, and potential social crisis stemming from the ongoing conflict.

Warning on Economic Lag

Klepach reportedly voiced his concerns at a financial forum in May, stating that Russia was losing ground to rivals including China, the United States, and even Ukraine. He attributed this decline to Western financial support for Kyiv, allowing it to withstand economic pressures while Russia faced increasing costs. “We are falling behind,” he said, adding that Russia’s illusion of Ukrainian collapse was unfounded.

Predictions of Social Crisis

The economist predicted the economic problems caused by the war would ultimately lead to a social crisis in Russia. He stated that Russia would not succeed in an extended “war of attrition” and warned that costs would continue to mount, despite assurances from President Vladimir Putin regarding the economy’s stability. Klepach foresaw this crisis arising “precisely when nobody is particularly expecting it.”

Governance Concerns

Beyond the direct economic impact of the war, Klepach also criticized the quality of governance within Russia itself. He asserted that decision-making processes were deteriorating and leading to strategically damaging outcomes with insufficient justification. His comments marked a rare public critique from a senior figure at a state institution regarding both the economic and political landscape.

VEB has stated that a successor to Klepach will be appointed shortly, but did not provide a timeline. The dismissal underscores growing internal debate within Russia about the long-term consequences of the war in Ukraine.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.