- Andrei Nechayev, 70, blamed sanctions imposed over Putin’s war in Ukraine
- He said the Russian economy will plunge into a financial crisis next year
Russia’s economy is “in a bind” and Vladimir Putin “has decided to settle there,” Moscow’s former economy minister said.
Raising a rare criticism from a senior Russian politician, Andrei Nechayev, 70, blamed Western sanctions imposed over the war in Ukraine for the crisis that would plunge the country into a financial crisis next year.
He also said that western franchises like McDonald’s could be replaced by blini [Russian pancakes]”High-tech products can’t do that,” reported The Times.
According to the publication, Nechayev’s comments at the financial forum in Yekaterinburg this week drew nervous smiles from the audience. A listener gave the former minister a lot of applause, it said.
He condemned Moscow’s economic prospects, saying Russia’s finances are “crappy,” adding, “And what’s even worse is that we’ve decided to settle there.”
Speaking in the rare criticism from a senior Russian figure, Andrei Nechayev, 70 (pictured in 2018, file photo), blamed Western sanctions imposed over the war in Ukraine for the crisis that plunged the country into a financial crisis for the next year would fall
Under the draconian rules put in place by Putin and the Kremlin, those who oppose the official narrative in Russia face arrest and jail. It is known that some have been arrested, tortured and even poisoned.
Many have been forced to flee the country, while those who questioned the Russian invasion of Ukraine and stayed on faced 15 years in prison under anti-treason laws that prohibit any criticism of the country’s military.
Nechayev was in office from 1992 to 1993, after the collapse of the Soviet Union.
Addressing the forum audience, he pointed to the fact that Russia exceeded its budget deficit plan in the first four months of 2023 as one reason for the coming crisis.
He said there were enough reserves to fund the deficit for a year but then the country would have to resort to borrowing.
The economist also said that Russia was facing mass exodus, capital outflows and falling oil and gas revenues, and was a dire warning to officials in Moscow.
This isn’t the first time Nechayev has made such a comment.
In an April 2022 speech, he said he and his family would remain in Russia as long as there was no direct threat to my freedom. This came at a time when many were fleeing the fight, fearing an even more repressive Kremlin regime and the call-up of reserves.
It was then that Nechayev said the phrase he repeated at the forum: “I have found a wonderful formula for everything that is happening in Russia right now.” “The problem is not that we are in shit, but that we have decided to be in it to live.”
Under the draconian rules introduced by Vladimir Putin (pictured today) and the Kremlin, those who oppose the official narrative in Russia face arrest. It is known that some have been arrested, tortured and even poisoned
Ukraine’s western allies – including the UK, US and European Union countries – imposed sweeping sanctions on Russia after Putin ordered his troops across the border in February 2022.
On Thursday, G7 leaders arrived in Hiroshima, Japan, to weigh tougher sanctions on Russia, amid reminders of the harrowing costs of the war.
An EU official said the leaders’ meeting in Japan will discuss sanctioning Russia’s billion-dollar diamond trade in hopes of draining even more money from Moscow for its war in Ukraine. “We believe that we need to limit exports from Russian trade in this sector.”
Other Russian sectors heavily dependent on Western technology have been hit hard by the sanctions, such as airlines.
Viktor Basargi, the country’s transport inspector chief, said that in 2022 alone, more than 2,000 flights in Russia were operated on planes whose parts had expired because sanctions could not replace them.
He said it was “simply impossible to import certain products”.
Meanwhile, Russian media reported that Russian airline Aeroflot has instructed staff not to report disruptions as it cannot fix them.
Despite the measures imposed by the West, the resilience of the Russian economy has surprised many. The country’s GDP has only been slightly affected, groceries are still on the shelves and unemployment is at its lowest level in 30 years.
Observers have suggested that Moscow used a series of “Potemkin indicators” to disguise the full impact of Western sanctions on its finances and to hide that the market is headed for a collapse. Pictured: The Kremlin can be seen through barbed wire on May 18
The country has been able to substitute Asian alternatives for Western products that could not be sent to Russia, while some in the country circumvent sanctions by shipping them through more neutral territories such as Turkey and Asia.
Meanwhile, Russia has made deals with other countries – such as China – to fill the gaps left by the West. The pair declared a boundless friendship and increased trade in a way that hampered the ability of financial sanctions to contain the war.
However, observers have suggested that Moscow has used a series of “Potemkin indicators” to disguise the full impact of Western sanctions on its finances and to hide that the market is headed for a collapse.
For example, the employment rate in Russia is low because hundreds of thousands have either fled the country or been sent to their deaths in Ukraine. In addition, more than a million workers are technically employed but furloughed.
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