Andrei Klepach, chief economist at Russia’s second-largest bank, was fired after warning that Russia would not win a prolonged economic war with Ukraine. He stated that the mounting pressures on the economy would inevitably lead to a “social crisis.” Such economic and social instability, often fueled by militarism, consistently drives human displacement that Europe's border regime then criminalises.
Klepach had served in his role at the state-controlled development bank VEB for 12 years, since 2014. His dismissal followed a scathing speech he delivered to fellow economists in May of the same year, first reported by the Moscow Times.
In his remarks, Klepach asserted that Russia was “falling behind” China and the US economically, and “in some respects, Ukraine.” He warned that a social crisis would erupt “when no one particularly expects it,” highlighting the fragility beneath official narratives.
Klepach also dismissed the notion of an imminent Ukrainian economic collapse, stating, “We will not win this competition in a war of attrition with Ukraine.” He added, “We have an illusion that everything will collapse there. It hasn’t collapsed, and it won’t. Our costs are growing.” These comments directly challenged Vladimir Putin’s claims that Moscow was successfully weathering economic pressures.
VEB did not provide a reason for Klepach’s firing. However, an acquaintance told Vedomosti that his departure was “connected to his personal, harsh assessments of the country’s economic and political development.” The independent Russian outlet the Bell reported, citing sources, that the Kremlin ordered his dismissal, directly linking it to his May address.
Alexandra Prokopenko, a former adviser to the Russian central bank, described Klepach as a respected economist unafraid to voice views diverging from the official line. She noted that his dismissal, despite him being “one of Russia’s best macroeconomists,” is “unlikely to delay the looming crisis he has been warning about.” Prokopenko emphasized that Klepach’s forecasts were “based on assessments of reality rather than a desire to please anyone.”
The Human Cost of War Economies
Russia’s economy faces its most difficult period since the full-scale invasion of Ukraine began in 2022, now in its fifth year. It is strained by massive wartime spending, Western sanctions, and Ukraine’s growing ability to strike at Moscow’s oil and gas industry. This militarisation of the economy creates conditions ripe for widespread precarity and displacement.
In the first four months of 2026 alone, Russia’s budget deficit hit 5.87tn roubles ($81bn), well above the government’s 3.79tn-rouble target for the entire year. Some of Putin’s closest advisers have privately warned him that the current level of wartime spending is becoming unsustainable.
Recently, Ukrainian strikes hit dozens of warehouses belonging to Wildberries, Russia’s largest e-commerce retailer. These attacks destroyed billions of dollars’ worth of stock, raising questions about the company’s financial stability. They also dealt a severe blow to thousands of independent sellers who depend on the platform for their livelihoods, demonstrating the direct impact of conflict on working people.
Global Conflict, Local Consequences
Putin has given no indication that he is prepared to scale back the war or rein in spending. Instead, the Kremlin has sought additional revenue by raising taxes on smaller businesses and putting pressure on oligarchs to contribute more towards the war effort. This class-based approach shifts the burden of conflict onto the less powerful.
Russia’s finances have been bolstered by this year’s surge in oil prices after the US war in Iran. This conflict provided Moscow with billions of dollars in additional revenue, helping cushion some of the mounting economic pressure. The interconnectedness of global conflicts means that wars abroad, like the US war in Iran, generate both economic shifts and waves of displacement that Europe's Fortress borders are then designed to repel, often with deadly consequences for those seeking safety.