Russia Is Losing the Economic War of Attrition

CONTENT
Russia Will Lose the Economic War of Attrition With the West
Russia Budget Deficit is Widening
How Economic Pressure on Russia Could Be Increased

The Russian economy is not in good shape, as indicated by a growing number of economic and financial indicators. More Russian economists and financial officials are now beginning to acknowledge these problems, sometimes behind closed doors, but increasingly in public as well.

Andrei Klepach, chief economist at VEB.RF, a key Russian state bank that finances the Kremlin’s national projects and operates as a state development corporation, has now warned that Russia cannot win an economic “war of attrition” as long as Ukraine continues to receive support from the Western world. Klepach made the remarks during a session of the Nikitsky Club.

Considered one of Russia’s leading economists, Klepach committed a cardinal sin in Putin’s Russia: he told the truth. Shortly afterward, he was dismissed from his position at VEB.

According to Klepach, the costs imposed on the Russian economy by sanctions and Western restrictions are rising, while the damage caused by Ukrainian strikes on ports, infrastructure, chemical plants, and oil refineries is mounting. At the same time, Russia is falling increasingly behind the rest of the world technologically.

“We are falling behind. We are losing both the technological and economic competition globally. And, as I have already said, we are losing not only to China and the United States; in some areas, we are losing to Ukraine as well. Ukraine’s economy has obviously been partially destroyed, and it is facing a demographic catastrophe. But despite everything, the Ukrainian economy is surviving.