Russia’s economy is ‘in a bind’, claims Moscow’s former finance minister | world news

Russia's economy is headed for disaster in 2024, a former top Kremlin official has claimed (Image: AFP)

Russia’s economy is headed for disaster in 2024, a former top Kremlin official has claimed (Image: AFP)

The Russian economy is “in a bind” and Vladimir Putin has “decided to settle there,” according to Moscow’s former economy minister.

In a rare high-level criticism of President Putin’s policies, 70-year-old Andrei Nechayev blamed Western sanctions over the war in Ukraine for Russia’s economic downturn, which he predicted would worsen next year.

He added that while food franchises like McDonald’s could be replaced by blinis [Russian pancakes]”High-tech products can’t do that,” reports the Times.

Nechayev’s comments elicited nervous smiles, but were nonetheless applauded by participants at the Yekaterinburg financial forum.

Andrei Nechayev, leader of the Civil Initiative party, shows Ksenia Sobchak's ID card after she was registered as a candidate in the upcoming presidential elections at the headquarters of Russia's Central Election Commission in Moscow, Russia, February 8, 2018. REUTERS/Maxim Shemetov

Andrei Nechayev is one of the few prominent figures to publicly criticize Putin (Image: Reuters)

In Putin’s Russia, those who disagree with the Kremlin’s official account are routinely branded “foreign agents” and face arrest and imprisonment.

Many outspoken critics have been arrested, tortured and even poisoned for speaking out against Putin, while a number of senior oligarchs have been killed in a series of mysterious “accidents” after falling out with the Russian leader.

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 former minister also added that mass emigration, capital outflows and falling oil and gas revenues would continue to have a devastating impact on the Russian economy.

Economists were surprised by the resilience of Russia’s economy, which has proved more resilient than expected in the face of Western sanctions.

This photo shows a view of the Kremlin taken through the barbed wire of a Moscow city engineering facility on May 18, 2023. (Photo by ALEXANDER NEMENOV/AFP) (Photo by ALEXANDER NEMENOV/AFP via Getty Images)

Economists surprised by the resilience of the Russian economy (Image: AFP)

Food is still readily available in Russia, GDP has only been slightly affected and wages are still paid regularly.

Unemployment is also at its lowest level in 30 years, and Western products that have been withdrawn from the country have been replaced by local ones or imported via Turkey and Central Asia.

However, analysts believe the numbers don’t tell the full story of Russia’s impending collapse.

There are fewer unemployed Russians because thousands have fled the country, been drafted into the military or been killed in Ukraine.

More than a million workers are also technically employed but are on unpaid leave. Russian opposition leader Vladimir Milov claims that up to 25% of the manufacturing sector is affected by a form of “hidden unemployment”.

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”.

Nechayev’s comments are not the first time he has offered scatological criticism of the Russian economy.

In an April 2022 speech, he said he and his family would remain in Russia as long as there was no direct threat to his 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.

At that time Nechayev said the phrase he repeated at the forum: “I 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.”

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Justin Scaccy

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