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Putin miscalculated, must make a change: O'Neill

Russian President Vladimir Putin may still be popular in his country despite the ongoing economic crisis, but he made a miscalculation that could hurt him unless he makes a big change, well-known economist Jim O'Neill told CNBC on Thursday.

"The miscalculation I think he's made here is because of the collapse of the ruble, there's going to be a huge shock to the real incomes of 140 million Russians. And his popularity is not just because he's tough. It's because Russian people have done so well the past decade, if not longer," said O'Neill, former chairman of Goldman Sachs Asset Management.

"Even though they're not the biggest of the BRICS, they're the wealthiest of the BRICS. That's now in the process of changing dramatically."

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Russian President Vladimir Putin
Maxim Zmeyev | Reuters
Russian President Vladimir Putin

Putin assured Russians during a speech Thursday that the economy would rebound after the ruble's dramatic slide this year, but offered no remedy for the financial crisis.

The country's central bank has been trying to stem a further collapse of the currency, including a 17 percent interest rate hike earlier this week that caused the ruble to nose-dive.

So far, the situation hasn't apparently affected Putin's popularity, according to an Associated Press-NORC Center for Public Affairs Research poll released Thursday. It found 81 percent of Russians still support him. However, the survey found that confidence in the economy is slipping.

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O'Neill, who is perhaps best known for coming up with the acronym BRIC (Brazil, Russia, India and China) to describe the rapidly emerging markets (South Africa was added in 2010), said Putin has long been viewed by many as one of the smartest politicians on the world stage.

"If he's as smart as people think he is, somewhere along the lines here he's going to make a big change," O'Neill said in an interview with "Power Lunch."

"In my judgment, he can't carry on down the same path or he's not going to retain his popularity and ultimately his power base."

—Reuters and the Associated Press contributed to this report.