What with writing on a variety of sources that I typically do not, guest posts and the like, it’s been some time since I visited my old friend and muse La Russophobe. I’ve slowly come round to the viewpoint that the material featured there is mostly just harmless nonsense, but I thought I’d drop by for old times sake and see what the day’s fare offered. Predictably, it relies strongly on rehashed garbage and hysterical hyperbole for a base the way McDonalds relies on ground beef, but a theme I found worthy of comment is yet another repetition of her prediction that Russia will collapse, any moment now. This installment is entitled “Putin’s Russia, Fading Fast”.
I’ve indicated this is a recurring theme, but I’m not sure if I’ve conveyed adequately how frequently and longingly La Russophobe has forecast the iminent demise of Russia. To gain a little perspective, let’s browse the archives. Plug in the word “doomed”, and you’ll get “Economic Innovation Doomed in Russia” (2006), “Employment and Small Business Drowning, Economy Doomed” (2006), “With Friends Like These, Russia is Doomed For Sure” (2006), “Even Putin Admits That Siberia is Doomed” (2006), “On Russia’s Doomed Media Establishment” (2007), “The End of Foreign Investment in Russia” (2007), “Russia”s Illusion of Stability” (2007), “Putin’s Energy Schemes, Imploding Like the USSR” (2007), “Russia, Doomed to Barbarism?” (2008), “The Russian Market is Doomed” (2008), “Medvedev Says Russian Far East is Doomed” (2008), “The End of Russia?” (2009), “Putin’s Russia is Collapsing” (2009), “Russia’s Economy is doomed” (2009), “Russia is Doomed in the Caucasus” (2010), “Why Putin’s Russia is Doomed to Fail” (2010), and to the recent entry where Russia is fading fast.
I won’t bore you with the results of subsequent searches using “collapsing” and “sinking”. Suffice it to say that here we have an individual who has confidently predicted the end of Russia an average of once a month for the past four years. Considering Russia is still very much alive, that’s a pretty dismal record, unless the intent was to amuse readers rather than actually predict an event.
However, just to underscore how emphatically Russia is not collapsing and shows no evidence of being doomed anytime soon, let’s take a look at how Russia performed under Putin’s leadership. I know LaRussophobe doesn’t have a lot of time for “numbers” or “statistics” or “facts”, preferring instead to rely on the Voices In Her Head, but let’s see what economists and mathematicians say about how it’s going in Russia – what’s the harm?
According to this graph, nominal GDP doubled under Putin: the economy gained an average of 7% per year. A few more figures – during Putin’s 8 years as President, industry advanced by 75%, investments increased by 125%, real incomes more than doubled and average salary increased eightfold. There was a sevenfold increase in the proportion of the population designated “middle class”, and not many of those were wealthy people on their way down. Actually, none. The proportion of the population living below the poverty line was reduced by more than half. Yes, indeed; there’s a leader you wouldn’t wish on your worst enemy. Detractors love to hammer on the point that the economy is heavily dependent on oil. So? If Russia has large supplies of oil, should it diversify into walnuts and sour cream? If a country has large reserves of gold, which is also a volatile commodity, do pundits suggest the country is too dependent on gold for the strength of its economy? Not so I noticed. I didn’t hear any such criticism of South Africa, which was overtaken by China only in 2007 as world’s largest producer of gold. Speaking of China, western critics were so concerned that China was too reliant on manufacturing for its economic strength that they handed over all their manufacturing…to China.
In 2004, the Russian government established the Stabilization Fund of the Russian Federation. This fiscal safety net is collected as a percentage of GDP from the export duty on oil. Designed to be used – as the name implies – to stabilize the nation in the event of a crisis, it protects the federal budget, and can only be used to offset other expenses when the balance on hand exceeds 500 Billion rubles. Do you think a similar tithe on American banks when they were making money like they had a license to print their own might have been a good idea? I’ll bet everyone except bankers thinks so now.
The Russian economy took a bit of a dive in 2008 – maybe that was the onset of Russian collapse!! Oh, wait – that was the whole world, almost collapsing. Since then Russia has stabilized at pre-crisis figures for unemployment; 6.8%. What’s the unemployment figure today in the USA? Officially, 9.5%, although some argue the rate is being kept artificially low.
Since Mr. Medvedev took over, Russia’s IT sector has enjoyed a record year of growth, and Russia has moved up to third in the world as a destination for software outsourcing (behind India and China). More recently, Russia overcame the final objections of the U.S. against its acsension to the World Trade Organization (WTO). This doesn’t automatically presuppose membership, but it is acknowledged as the final stumbling block, and there have to be champagne corks popping in major Russian cities this month.
So, let’s summarize; Russia currently has the lowest national debt in the G20. To give you an idea what the difference looks like between running a surplus and running a deficit, have a look at this chart, which uses 2005 figures (the latest public data, at least for this source), and puts Russia at world number 2 and the USA at world number 98. The discrepancy has certainly not improved since 2005. Every major economic indicator in Russia improved under Mr. Putin’s leadership, and since Mr. Medvedev took over Russia has stabilized following a world economic crisis, and shows stronger signs of recovery than most of the world. Russia relies heavily on energy for its economic development, but sensibly puts energy dollars in the bank for a rainy day. The unemployment rate is lower than that of the world’s largest economy. Russian acceptance by the WTO looks certain, which should bring it expanded market share of energy sales as well as increased confidence in its business practices.
Just before I close; I can’t believe LaRussophobe had the audacity to suggest Mr. Putin “negated the election” of Moscow Mayor Yury Luzkhov, thus “disenfranchising the people of Russia”. He was personally fired by Medvedev after he more or less dared him to do it, and refused various “depart with dignity” proposals, and while Luzkhov’s municipal administration rallied around him, a strong majority of Muscovites supported Luzkhov being kicked to the curb. Where’s your usual yells of support for the will of the people? He’s married to the richest woman in Russia when LaRussophobe regularly attacks every wealthy Russian as a bloodsucking oligarch – except for Boris Nemtsov, of course. Having a memory lapse, Ms. Zigfeld? Let me refresh it – as recently as July you denounced Baturina as “…the embodiment of the rich, corrupt woman, whose husband’s fortune is registered under her name.” Spare us your crocodile tears for Luzkhov and his squeeze.
Incoming message for LaRussophobe: Russia is still very much alive, and is not going to collapse in your lifetime.