Putin Deserves a Dunce Cap for Russia's Annual Report Card

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.