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November 10, 2013 - 12:12 am
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It’s that time of year again, when countries begin to receive their national report cards from the array of international proctors who evaluate their performance across a wide gamut of empirical criteria. And this means it’s time once again for Russia to take its place in the corner facing the wall wearing a dunce cap.

A year ago last summer, the Russian dictator Vladimir Putin made a rather startling admission.  After years and years in which his flunkies had insisted that international surveys rating Russian performance were biased against Russia to the point of racism, Putin not only admitted that the World Bank’s “Doing Business” survey was valid, he pledged to improve Russia’s dismal ranking from #120 in 2011 to #50 in 2015 and #20 by 2018.

Putin’s pledge called for Russia to improve 100 places in the rankings in six years, or about 17 places per year.  This meant that Russia’s ranking for this year should have been 86 — and it was actually 92, impressively not too far off the pace Putin promised. But Russia still has a long way to go, and despite its improvement still languishes precariously close to the bottom half of all world nations in encouraging business activity.

Russia is ninth in the world by population and eighth by total GDP. Given Russia’s large size, rocket technology, and substantial income, the country does shockingly poorly when compared to other countries, regardless of what criteria are applied or who applies them.  Unfortunately, Putin hasn’t made it a priority to improve any of Russia’s other results.

If you look at a list of 14 critical international surveys, “Doing Business” is one of only six where Russia ranks in the top half of all world nations.  Its best score is 47th out of 184 countries when ranked for per capita GDP by the International Monetary Fund.  That places it in the top 16% of all world nations.

There are two critical issues with Russia’s per capita GDP ranking, however, which make this “best” result not very good at all.

First, Russia lags to a shocking extent behind its fellow G-8 members.  The worst-performing G-8 nation besides Russia is Italy, which ranks #24 and has a per capita GDP more than double that of Russia.  Russia ranks behind the likes of Uruguay and Chile, and needs to be compared to backwaters like Venezuela and Kazakhstan to look good.

More importantly, in no other international survey is Russia able to sustain its top-fifty position.  Russia’s GDP ranking is due largely to Russia’s vast fossil fuel resources, which have dramatically increased in value over the past decade. It’s not due to innovation, efficiency, or hard work, and that explains why Russia isn’t able to translate its economic performance into tangible benefits for the population.

For instance, Russia’s next-highest score comes on the United Nations Human Development Index, but there it slides from 47th to 55th (out of 186 nations, placing it in the top 30% of all countries surveyed).  The HDI evaluates countries for life expectancy, education, and income. Russia’s slide occurs because although Russia has a relatively solid system of basic education (Russian universities are another story) and a top fifty per capita GDP, its life expectancy performance is appalling. The World Health Organization ranks Russia 130th out of 198 nations, the bottom third of the planet.

There’s simply no reason why a well-run Russia could not do better on the HDI than its per capita GDP score would indicate. Instead of doing better, however, Russia predictably does significantly worse. If you use Russia’s population size or total GDP amount as the benchmark, Russia’s HDI score is quickly exposed as an absolute outrage.

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Top Rated Comments   
I am puzzled why this column exists on this site.

There's nothing anyone in the US can do about Russia, nor is there anything we should do. How about fixing our many problems here at home before telling others how to run their own countries?

If we want to change the world, let's do it by setting a proper example for the rest of the world.
49 weeks ago
49 weeks ago Link To Comment
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All Comments   (8)
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Ms. Zigfeld, I respectfully suggest you're missing the larger point about Putin's Russia. It's all about Putin and his cronies getting keeping as money, power, bling and chicks as is humanly possible. And he's getting all of that by the boatload. Everything else is just noise. When seen in that context, Russia is doing extremely well.

Kinda sounds like "fundamental transformation" here at home, don't it?
49 weeks ago
49 weeks ago Link To Comment
Putin's Russia is a failure. So is Obama's America. Yet Putin saved Obama from his self-inflicted red-line. Score 1 to Putin.
49 weeks ago
49 weeks ago Link To Comment
Moscow looked pretty good shown from the perspective of the Miss Universe show last night, Donald Trump presiding. So the real problem in Russia may be the distribution of what wealth they have. Oligarchs, and like that. Which is also the problem with the US economy over the last couple of decades. Well, at least some of our oligarchs at least earn their way up the ladder, but maybe that's still not good enough, especially when others don't, and I'm talking here about such things as banksters and, ahem, certain Washington politicians if you know what I mean, maybe ALL Washington politicians, plus or minus a couple.

We still have a much better foundation than does Russia (or China), but sometimes I wonder.
49 weeks ago
49 weeks ago Link To Comment
I am puzzled why this column exists on this site.

There's nothing anyone in the US can do about Russia, nor is there anything we should do. How about fixing our many problems here at home before telling others how to run their own countries?

If we want to change the world, let's do it by setting a proper example for the rest of the world.
49 weeks ago
49 weeks ago Link To Comment
The person that wrote this article also wrote an article here claiming that the US should interfere in Russian domestic policy by promoting sodomy and anal marriage over there.

http://pjmedia.com/blog/gop-falls-short-in-standing-up-for-first-amendment-rights/
49 weeks ago
49 weeks ago Link To Comment
This is the goody, goody blah, blah of old. We changed the Soviet Union into non-existence. If not. I could not have visited Russia. What can Russia do? Ask the Polish? Ask the parts liberated from the Soviet Union and threatened by Putinian expanionsim. Yes, we should set an example for the rest of world in order to change, just we did with Nazi Germany. You are not puzzled about this article. You arereally against what this article is for. A proper defense of Putin & Co would evince an honesty I could respect, not your backdoor "do nothing-ism" in order to change the world by, well, electing, say, Obama (and his mess up in Egypt, where Russia is now showing up). The comment is not honest. Be honest and admit it. I seldom get personal in comments, but this one offends my sense of truth.
49 weeks ago
49 weeks ago Link To Comment
Bank firgures, macro values, etc. are nice and I accept the report. But this misses how the "normal" working persons live. There I have some experience. I have visited somewhat regularly Russia since 1991, specifically St. Petersburg. What a difference over the years. I stay with a colleague. In 1991 there was one large building for Soviet citzens of a section of the city, then food and commerce stands popped up all over the place (a form of proto-capitalism), then larger and supermarket larger business came to replace the stands. Indeed, now there are mirads of new, phantastic apparments, houses and freeways, all pointing to a massive increase in wealth (not just for the oligarchy). "Who earns such money", I ask my host, a university teacher for tourism. She does not know. What does she know? Today in Russia there is more freedom of choice, surface expression of opinions (for money I can rent tv services with world news), although it is of no interest to my colleague. Why? My colleague tells me that, despite all the many wonders, she works today as hard and long as she did during the Soviet time. More fredoms, same work. Well, just a few words.

In 1991 my colleague could live from €100/m and today costs are €1000, enough with support from me. A couple years ago, everyone at the uni. had their salaries reduced, boom!, by 25%. Oh, slowly salaries are increasing, but also more work. I could have bought in 1991 her one room Khrushchev-style apparment for €5,000. Today for several hundred thousand euros. Housing elsewhere with same cost increase. The woman is literally working herself to EXHAUSTION, but cannot retire as that means hunger. The same pattern is evident in her friends. Work and work and work and just make it with fear of retiring. (Try saving for several days just to buy a large chocolate pastry as a treat). My colleague is a-political, her friends also, no time to lose with "silly" show-off protests. Generalized apathy within current living conditions. Let Putin lose these mainstream Russians with their contented apathy and they will metamoprhize into anger and anger into ... (an old Russian tradition aginst Tzars).
49 weeks ago
49 weeks ago Link To Comment
That's cute but those numbers are compared to what? US? China? Germany? Russia? Peru?

You know the Chinese and EU economy output depend on the Russian natural resources input? You know Russia is getting (or about to get) a tight grip to the gas/oil output of the ME?

To paraphrase Mr Goldman: The news of Russia's demise are greatly exaggerated.
49 weeks ago
49 weeks ago Link To Comment
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