Economist predicts Russian GDP fall 'by 20%' as Putin set for 'major embarrassment'

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Economist Anders Åslund, former Senior Fellow at the Atlantic Council and currently the chairman of the International Advisory Council at the Center for Social and Economic Research, spoke to Express.co.uk about the financial impact of the war in Ukraine.

It comes a day after the Kremlin announced it will reduce the troops operating around Kyiv and Chernihiv, after negotiations in Istanbul.

The expert predicted Russian troops will be withdrawn from northern Ukraine as well, and concentrated in Donbas.

From that point onwards, the Ukrainians will be able to “kick out” Russians for good, before an agreement is reached, Mr Åslund believes.

He said: “Russia will be beaten – that’s already happening on the ground. It will be a major embarrassment to Putin.”

Anders Åslund worked as a senior adviser to the Russian reform government under President Boris Yeltsin from 1991 to 1994.

He then became an economic adviser to President Leonid Kuchma of Ukraine and, in 2016, was appointed to the supervisory board of the Ukrainian bank Kredyt Dnipro until 2020.

The economist suggested that Putin has “absolutely nothing” to win from this war since he “did everything wrong”.

Mr Åslund, whose last book is titled “Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy”, attributed the wrongdoings to the corruption of the Russian government.

He stated: “Putin lost the war because of his authoritarian kleptocracy – everything in his government is corrupt.

“The soldiers are not given sufficient supplies because of the monopoly on food rations – and some of them have expired since 2015!”

Moreover, the economist said that, due to the agreements for military supplies, the Russian military is using faulty equipment.

He said: “They are using cheap Chinese tires because somebody is getting kicked back from a tire production company.

“Putin also wants to decide everything from the top, so he can’t utilise the intelligence services.

“If you do everything wrong, you lose!”

Asked about the sanctions imposed by the West, Mr Åslund said: “Russian economy will be severely hit, but it will take some time.

“My expectation is that the GDP is likely to fall by around 20 percent. Others see 10-15 percent decline in the economy.

“The decline will hit the Russian population in two to three months’ time.”

And when asked to comment further on the financial disaster that awaits the Russian people, he responded: “It is a big disaster for them to have Putin as a President…That’s the consequences of his regime.”

The economist went on to say that the sanctions will remain in place until Russia pays reparations to Ukraine.

In strictly financial terms, the humanitarian catastrophe aside, the damage that Russia has caused to Ukraine is estimated at about $200 billion (£152 billion), according to the expert.

Mr Åslund said: “Ukraine’s GDP has fallen by about 35 percent.

“Others say that Ukraine’s economy has fallen by $550 billion (£419 billion), but I think that’s exaggerated.”

Although the cost of the lives lost cannot be compensated, the expert expects the financial sanctions against Russia will be tightened.

He said: “The US is now working with the EU to impose stricter sanctions on oil and gas, and the next step would probably be sanctions against shipping.

“The general attitude of the West is that, ‘In order to stop Putin, the Russian economy has to be taken down’.”

Mr Åslund added: “I would be very surprised if Putin’s authority survived after that.

“He has committed too many crimes against humanity.

“And against his own people as well as the Ukrainian people.”



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