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Further to my post on the remarkable failure of Scandinavian education systems to develop their students to anywhere near the levels indicated by their IQ potentials, a professor of mathematics at a Wisconsin university sent me data on the percentage of respondents in the TIMSS who gave the correct answer to the following question:

Which shows a correct method for finding 1/3 – 1/4?

A (1 – 1)/ (4 – 3)
B 1/ (4 – 3)
C (3 – 4)/ (3*4)
D (4 – 3)/ (3*4)

Below are the results. Do bear in mind that these are 8th graders we are talking about.

A B C D
Korea 2.7 6.9 4.2 86
Singapore 4.8 5.5 6.5 83.1
Taipei 2.9 7.7 7 82
Hong Kong 4 8.7 10 77
Japan 15.4 11.1 8.2 65.3
Russia 12.3 18.8 4.8 62.8
Average 25.4 26 9.4 37.1
US 32.5 26.1 10.7 29.1
Finland 42.3 29.5 8.7 16.1
Sweden 14.4
Chile 11.7

Finally, an international ratings list on which those smarmy, goody-goody Scandinavians don’t come on top! They barely do better than Chile, a country that got 421 (equiv. IQ ~88) in the PISA 2009 survey. Here is what he has to say on the matter:

One interesting fact is that among the 42 countries which tested 8th grade students, Finland had the highest percent of students who picked answer A and the third lowest percent correct. Chile had 11.7 correct and Sweden had 14.4 percent correct. The Finnish result is likely a surprise to the people who have praised the Finnish school system for their results on another international test, PISA. However university and technical college mathematics faculty in Finland will not be surprised. See [this] article signed by over 200 of them.

Anybody who suggests the progressive/neoliberal education policies of the Scandinavian countries are worthy of emulation should be presented with these figures and laughed out of the room.

The results for individual American and Canadian states:

A B C D
Mass. 21.4 20.8 9.9 44.4
Calif. 28.2 21.6 11 38
Minn. 23.5 26.3 14 35.1
Quebec 27.3 23 13 33
Ontario 27.7 22.4 14 32.5
Conn. 21.8 25.8 17.7 31.3
Alberta 34.7 23.7 12.3 27.8
(Republished from AKarlin.com by permission of author or representative)
 
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One of the standard memes about Russia’s demographic trajectory was the “Russian Cross.” While at the literal level it described the shape of the country’s birth rate and death rate trajectories, a major reason why it entered the discourse was surely because it also evoked the foreboding of the grave.

russian-cross

But this period now appears to have come to a definitive end. Russia’s population ceased falling around at about 2009; in the past year, it has increased by over 400,000 thanks to net immigration.

Meanwhile, against all general expectations, the birth rates and death rates have essentially equalized. Whereas in 2011 natural decrease was still at a substantial 131,000, preliminary figures indicate that it has subsided to a mere 2,573 for this year. It could just as easily turn positive once the figures are revised. For all intents and purposes, the “Russian Cross” has become the “Russian Hexagon.”

russian-hexagon

This is a momentous landmark in many ways.

(1) More than anything else, Russia’s demographic crisis during the past two decades has been advanced as a quintessential element of its decline. Phrases such as the aforementioned “Russian cross”, the “demographic death spiral”, and “”the dying bear” proliferated in respectable journals and books. Until a few years ago, some entirely serious demographic projections had Russia’s population falling to as low as 130 million by 2015. This “deathbed demography” imagery was in turn exploited by many journalists to implicit condemn the rottenness of the Russian state in general and Putin in particular. Will they now rush to trumpet Russia’s demographic recovery, which was only possible through directed state intervention to improve the population’s health, cut down on the alcohol epidemic, and provide generous benefits for families with second children? For some reason I suspect the amount of ink that will be spilt on this will be but a tiny, minuscule fraction of that used to herald Russia’s demographic apocalypse. They will predictably move on to other failures and inadequacies – both real or perceived.

(2) For many years there has existed the notion among some demographers that once a society’s total fertility falls to a “lowest-low” level, there can be no return. It was theorized that the social values of childlessness and small families would spread, and that the resultant rapid aging would make it impossible for young families to have many children anyway. Russia’s total fertility rate fell to a record low of 1.16 children per woman in 1999, but rose above 1.30 in 2006, reached 1.61 in 2011, and rose further to an estimated 1.70 in 2012. It is thus so far the biggest and most important exception to this “lowest-low fertility trap hypothesis.” In reality, what was actually happening was that many Russian women were postponing the formation of families – a process common to most nations that reach a certain level of development. This in turn laid the foundations for the mini-baby boom that were are now seeing.

(3) There was likewise widespread pessimism that Russia’s life expectancy would ever significantly improve for the better. In the best case, it was assumed it would creep upwards, reaching 70 years or so in another few decades. However, the experience of other regions with Russia’s mortality profile, such as North Karelia in the 1980′s or the Baltic states in the 2000′s – very high death rates among middle aged men who drank too much – suggested that rapid improvements are possible with the right mix of policy interventions. This has happened. Russia’s life expectancy in 2012 was about 71 years, still nothing to write home about; however, it was higher than it ever was in the USSR, where it reached a peak of 70.0 years at the height of Gorbachev’s anti-alcohol campaign in 1987, and equal to Estonia’s in 2002, Hungary’s in 1998, and Finland’s in 1973. If it were now to follow in Estonia’s mortality trajectory – and this is not an unreasonable supposition, considering Russia is now passing the tough anti-alcohol and anti-smoking taxes and regulations typical of developed countries – it would be on track to reach a life expectancy of 75 years by 2020 (Putin’s goal of 2018 is however probably too optimistic).

russia-deaths-from-external-causes

In particular, it should be noted that the worst types of deaths – those from external causes – have been cut down the most radically. Though they only account for a small proportion of total deaths, they tend to happen at earlier ages and thus have a significant impact on the workforce and overall life expectancy out of proportion to their actual prevalence. A calculation from 2005 showed that the effect of a 40% decline in deaths from external causes would be as good as a 20% decline in deaths from all circulatory diseases at extending male life expectancy. This has been achieved; as of 2012 it was at 125/100,000, down from an average of about 250/100,000 during the “demographic crisis” period but still far, far short of the 40/100,000 rates more typical of developed countries with no alcoholism epidemics. But as I’ve said before and will say again, while Russia’s “hypermortality” crisis isn’t anywhere near as severe as it once was, it is nothing to write home about; a great deal remains to be done. But the trend-lines are pointing firmly down, and the economic crisis of 2009 had zero effect on the underlying processes. This is extremely encouraging, as it implies that Russia has now become a “normal country” in which improvements in health and mortality steadily advance regardless of economic fluctuations.

I have anticipated many of these developments, and indeed, ventured forth with projections of my own. Here are some predictions made on the basis of my research and analysis from 2008:

  1. Russia will see positive population growth starting from 2010 at the latest. CHECK.
  2. Natural population increase will occur starting from 2013 at the latest. CHECK.
  3. Russia’s total life expectancy will exceed 68 years by 2010 and reach 75 years by 2020. Looks increasingly LIKELY.

There is no need for false modesty. I put my neck on the line and came out best against most of the established expert opinion.

But this is no time to rest on laurels and reminsce on past glories. The 2010 Census is out. Demographic data up till 2012 is available. It’s been a long four years since I wrote that model. It is high time to update it. I’ve been planning to do that for my book anyway, but now that I think about it, why not publish a paper at the same time? I have long been a fan of open access anyway, especially as regards academia.

(Republished from Da Russophile by permission of author or representative)
 
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Editorial note: This article was first published at Arctic Progress in February 2011. In the next few weeks I will be reposting the best material from there.

The Arctic to become a pole of global economic growth? Image credit – Scenic Reflections.

Behold! Far north along the shores of the Arctic a quiver of upspringing settlements fringes the coast. Boats swarm around canning factories, smoke flutters above smelters, herds of reindeer dot the prairies… And here or there, on every street-corner, glimmer out the lights of theaters where moving-pictures entertain white people through the sunless weeks of the midwinter dancing-time, the singing-time, the laughing-time of Eskimo Land.

- Northward ho!: An account of the far North and its people.

In 2003, Goldman Sachs economist Jim O’Neill wrote the now famous paper Dreaming with BRIC’s, predicting that Brazil, Russia, India and China would overtake the developed G8 nations within a few decades and make astounding returns for faithful investors. The BRIC’s concept entered the conventional wisdom, spawning a host of related acronyms (BASIC, BRICSA, etc) – and if anything, realizing its promise well ahead of schedule. Last year, China’s real GDP possibly overtook America’s, and Russia’s approached Germany’s.

Yet for all their successes, the BRIC’s may not fulfill their expected roles as the stars of the global economy in the 21st century. The level of education is horrid in Brazil and atrocious in India; without the requisite human capital, these two countries will find it difficult to rapidly “converge” to developed world standards. China is much better off in this respect, but its high growth trajectory may in turn be disturbed by energy shortages and environmental degradation. China produces half the world’s coal, which is patently unsustainable given its limited reserves. But since coal accounts for 75% of China’s primary energy consumption and fuels the factories that keep its workforce employed, there is little it can do to mitigate this dependence. Meanwhile, China’s overpopulation, pollution and climate change predicament is so well known as to not require elaboration. Many other countries flirting around the edges of BRIC status – Indonesia, South Africa, Vietnam, etc. – face serious challenges in the form of low human capital, uncertain energy and food supplies and a rising incidence of AGW-induced droughts, floods and heatwaves.

There is one global region that may hold the key to resolving these intertwined problems – and even to become a major pole of global growth in its own right. For the most part, it is now an empty wilderness, but climate change is opening it up as potential living space. Its exploitation has the potential to halve the length of global freight transport routes while increasing their security, uncover sizable to gigantic new sources of hydrocarbons and minerals, and stabilize global food prices through the expansion of arable land. Its experience of management and conflict resolution may inspire a global model of cooperation – or it may degenerate into an economic, legal, or even military battlefield over shipping routes and sub-sea resources.

This global region is the Arctic Rim, and its adjoining ARCS: Alaska, Russia, Canada, and Scandinavia. The ARCS of Progress in the 21st century.

Arctic sea ice extent on September 1, 2010 – both the Northern Sea Route and the Northwest Passage are clearly open. Image credit – The University of Illinois Cryosphere Today.

From North Pole to Growth Pole

The core reasons behind the Arctic Rim’s bright prospects are global macro-trends: climate change; peak oil and resource nationalism; overpopulation in the South. These “push” and “pull” factors will induce a decades-long Arctic boom, starting with shipping, energy and mining, and culminating in a fundamental northwards shift of the center of the world economy. Let’s examine each of these in turn.

Breaking Ice For Shipping

Ah, for just one time I would take the Northwest Passage
To find the hand of Franklin reaching for the Beaufort Sea
Tracing one warm line through a land so wild and savage
And make a northwest passage to the sea.

- Northwest Passage song, Stan Rogers, 1981.

Typically, the cryosphere – the frozen part of the world – remains stable, because its snow and ice reflect much of the Sun’s heat, thus cooling itself. This process is called the ice-albedo feedback.

However, when the high-albedo ice melts, it leaves behind darker-hued earth, flora or sea that absorb far more heat. Local air temperatures soar and inhibit the reformation of the ice during cold seasons. From working to keep the system stable, beyond a critical threshold the ice-albedo feedback begins to reinforce a runaway dynamic of melting and warming.

The ice-albedo feedback largely explains why the Arctic is warming about twice faster than in the world as a whole.

In summer 2007, Arctic sea ice extent fell 38% below average since records began – an area the size of six Californias. The next year saw both the Northwest Passage and the Northern Sea Route clear of ice for a short period in late summer. As of December 2010, sea ice extent was the lowest for the month on satellite record, even surpassing the 2007 melt.

While the relentless fall in sea ice extent over the past three decades is remarkable enough, what’s stunning is the 55% decline in summer sea ice volume. Once the thick, multi-year ice is gone, then it’s really gone – the low albedo of the ocean water will raise local temperatures, preventing all but a thin film of sea ice from reforming during the cold winters. It is thus a near certainty that Arctic sea ice is already deep in its death spiral.

Inland, earlier snowmelts enable the ground to absorb more heat, while dark-hued shrubs and boreal forests encroach on the tundra.

Many of the effects will be negative. The polar bears will probably go extinct, either drowning for lack of sea ice, or starving, or migrating south and merging with their grizzly cousins. Invasive species from the south will drive out Arctic flora and fauna off the top of the world. Global ocean and air currents will be interrupted as the temperature differential between the Arctic and the tropics shrinks.

But the new Arctic merchants will be making a killing.

Shipping routes during ice-free Arctic summer . Image credit – Laurence C. Smith.

In 2010, the Baltica became the first high-tonnage tanker to sail with petroleum products by the Northern Sea Route, steaming from Murmansk to China. This was followed by the voyage of the MV Nordic Barents, the the first vessel to sail from one non-Russian port to another through the Arctic, cutting 5,000km off the traditional Suez route. It carried 41,000 tons of iron ore from Kirkenes, Norway to feed the steel mills of China. One upping them all, the year ended with the first round-trip voyage without icebreaker assistance via the Northern Sea Route. The Norilsk Nickel-owned ship Monchegorsk carried the metal from the north Siberian port of Dudinka to Shanghai, taking just 41 days of steaming (the Suez route would have lasted as long as four months).

The opening of the Northern Sea Route and rising demand for metals and petroleum products from China and other emerging markets is set to continue spurring the development of Arctic shipping. In January 2011, a Sovcomflot executive said the Russian shipping company has already received 15 requests for icebreaker assistance in the Arctic for this year, compared to just four in 2010*. The governor of Murmansk, Dmitry Dmitriyenko, predicts that cargo transport through the Northern Sea Route will increase tenfold by 2020. This expansion will be sustained with private investment funding: both Sovcomflot and the Port of Murmansk are to be partially privatized in the coming years.

Similar trends are in play with the opening of the Northwest Passage across Canada. It has been conquered by cruise ship in 2006 and the commercial ship MV Camilla Desgagnés in 2008. Exploitation of the Northwest Passage will likely go slower than of its north Eurasian counterpart, because of lower demand and the (relative) underdevelopment of Canada’s icebreaker fleet. But there is still a wealth of opportunities there.

Black Gold or Fool’s Gold at the Top of the World?

Use it or lose it is the first principle of Arctic sovereignty.

- Speech by Canadian Prime Minister Stephen Harper, 2007.

Our first and main task is to turn the Arctic into a resource base for Russia in the 21st century.

- Speech by Russian President Medvedev in September 2008.

Global oil production has now either peaked or is close to peaking, and will now either continue on its present “undulating plateau” – or begin to decline at an accelerating pace. The specifics are intensely argued over and the debate is far too extensive to detail here. But suffice to say, the “cornucopian” position that technological ingenuity and market forces will always conjure more and more resources out of a finite planet is untenable.

Any number of factors – global production exceeding new discoveries since the mid-1980′s; the world’s inability to significantly ramp up oil production despite soaring prices for the commodity; the rising costs of oil production due to the falling EROEI of the remaining oil sources; massively inflated reserves numbers from OPEC members; growing resource nationalism – militate against a business-as-usual future of increasing production in the oil industry.

These mounting challenges are the reason the big oil majors are pushing into the deepwater drilling that produced the Horizon blowout in the Gulf of Mexico, and partnering with Russian state oil companies to develop offshore gas deposits in the Kara Sea, and sinking millions of US dollars on prospecting off Greenland despite no returns to date. They need to maintain their reserves numbers to prevent their stocks from tanking – but to do so, the oil majors are forced into taking escalating financial, environmental and political risks.

The Arctic’s natural resources. Image credit – Global Research.

In 2008, the US Geological Survey estimated that the Arctic may hold as much as 13% of the world’s undiscovered oil (90 billion barrels) and 30% of its undiscovered natural gas. Unsurprisingly, the Arctic is rapidly becoming central to oil exploration. That said, capitalizing on these resources – even assuming they are as big as estimated above – will be exceptionally difficult. For a start, some 84% of these sources are likely to be offshore. Second, according to more recent USGS calculations, developing them will be prohibitively expensive: “Assuming production costs of up to $100 per barrel, only 2.5 billion barrels of oil could be lifted… and only with a 50% probability.” For perspective, an average oil price of $92 per barrel broke the world economy in 2008.

Talk of the Arctic becoming the next Saudi Arabia is unrealistic. Its oil reserves are smaller, more dispersed, more remote, of worse quality, and far more challenging to exploit. But this isn’t to say that its black gold is fool’s gold. Technological progress on Arctic drilling, as well as a lack of better options elsewhere, will draw Western oil majors and National Oil Companies north.

The Arctic isn’t only of interest to shippers and oilmen. Confronted with inexorable rises in demand from China, the global mining industry is rushing to add metals and minerals production capacity wherever they can. Just to take a few Arctic examples, there are plans to start or expand iron ore production on Canada’s Baffin Island, Norway’s Kirkenes and the Kola Peninsula. Coal production is resuming at Svalbard. Just in case the whole oil thing doesn’t work out, Greenland is looking to exploit its potentially vast mineral resources. The Coeur d`Alene Mines Corporation recently opened a gold mine near Juneau, Alaska ahead of schedule. Though volumes remain small, this will change as depletion becomes as evident for minerals as it is now for oil.

Towards an Arctic Civilization?

… Before this century is over billions of us will die and the few breeding pairs of people that survive will be in the Arctic where the climate remains tolerable.

- James Lovelock, inventor of the Gaia hypothesis.

Beginning with the shipping and energy industries, the influence of the Arctic will eventually come to encompass the entire world. Assuming that efforts to quickly cut greenhouse gas emissions are unsuccessful, and that geoengineering is either not attempted or doesn’t work, then many of the middle regions will become too hot and dry for sustained agriculture (and maybe human survival), and masses of climate refugees will try to migrate north. The center of global economic growth, politics, and perhaps – in the far future – population, will come to rest within the Arctic Circle.

The North Pole may become the spatial center of the world. Image source – Trausti Valsson.

This process will likely be accompanied by mass upheavals, societal collapses, famines, border conflicts, maybe even bigger wars. But as usual misery contains the seeds of opportunity. It is not impossible that the farsighted individuals who are now buying up Hudson Bay territories or Siberian riverside lands are positioning themselves or their heirs for lordships and kingdoms in 2200.

But let’s focus on just the next three decades. The opening of the Arctic by various “push” factors (overpopulation, global warming) and “pull” factors (shipping routes, resources) will create demand for infrastructure, housing, associated services, etc. Buying up strategic lands, routes and infrastructure in the Arctic region offers one of the best, and most overlooked, rates of return in the world today. Take inspiration from OmniTRAX, a Colorado-based company that bought the derelict Port of Churchill and its railway from the Manitoba government for a bargain basement price of $10 in 1998. Now that Hudson Bay has become clear of sea ice during the summer, these assets are receiving tens of millions of dollars of investment from the Canadian government.

How can you benefit from the coming Arctic boom? In the coming years, Russia is going to partially privatize lucrative state assets, such as shipping company Sovcomflot and the Port of Murmansk (which handles 60% of shipping across the Northern Sea Route). New ports, roads, railways, pipelines, mines, dams, oil and gas fields, aluminium smelters, LNG plants, etc. are springing up over the entire region.

Enter the ARCS of Progress: Why Alaska, Russia, Canada, and Scandinavia are Positioned to Dominate the Polar-Centric World

Идут на Север срока огромные,
Кого ни спросишь – у всех указ…
Взгляни, взгляни
В глаза мои суровые,
Взгляни, быть может, в последний раз.

- Soviet GULAG song, 1947.

O Canada!

Our home and native land!
True patriot love in all thy sons command.
With glowing hearts we see thee rise,
The True North strong and free!

- National Anthem of Canada.

Watching the economic news these days is a sure path route to depression. Anywhere you seem to look in the developed world there are awning budget deficits, soaring debts, depressed output, and stagnation. We’ve established that putting your money into the PIGS (Portugal, Italy, Greece, Spain) isn’t such a good idea. But the US is the “safe haven,” right? Unfortunately, its fiscal sustainability indicators are actually worse than the PIGS average. In 2009, the US got $0.6 in tax revenue for every $1 of outlays, or a receipt-to-outlay ratio of 0.6; the equivalent ratio for the PIGS was 0.78. Maybe Japan? With a 0.52 receipt-to-outlay ratio, it makes the US look like a paragon of fiscal discipline.

But within all that mess there’s a few, sparkling gems. Not only are they at the heart of the opening Arctic, but they are all excellent investment destinations on their own merits. They are the ARCS countries: Alaska, Russia, Canada, and Scandinavia.

Alaska

In contrast to the rest of the US, Alaska was barely dented by the economic crisis, its GDP declining by just 0.3% in 2009 and recovering 0.6% in 2010. Employment is lower than the US average. While states like California and Illinois flirt with state bankruptcy, Alaska has accumulated $40 billion in its Permanent Fund. Finally, it is – along with Greenland – the most demographically vigorous of the Arctic states, with a total fertility rate of 2.32 children per woman in 2006. It won’t be afflicted by the First World’s looming aging crises any time soon. Alaska is well set to fulfill its motto: “North to the Future!”

Russia

Though the poorest of the ARCS, Russia is also its fastest growing one, with 5% annual GDP growth during 2001-2010. Its high level of human capital (around 70% of Russians continue to higher education, a First World rate), vast resource wealth and decent macroeconomic management set it on a promising path to convergence with developed countries.

Additionally, Russia has a predominant population, economic and military presence in the Arctic. The Murmansk region by itself has more people than all of Alaska, while the Russian Northern Fleet is by far the strongest Arctic force. State policy is to transform the Arctic into Russia’s “strategic resource base” within the next decade.

Criticisms of Russia’s prospects typically center on allusions to its “Zaire with permafrost”-like corruption levels, plummeting population, crumbling infrastructure, “legal nihilism” and Putinist authoritarianism. While each of these has a grain of truth, taking them as gospel fundamentally misrepresents the country. For a start, if Russia really was more corrupt than Nigeria or Zimbabwe – as implied by Transparency International’s Corruption Perceptions Index – then it would still be deep in debt as in the late 1990′s, and its $480 billion foreign currency reserves would be in Cayman Islands accounts instead of the Central Bank’s vaults.

What about Russia’s demographic “death spiral”? A quick glance at Rosstat will show that its population grew in 2009, and that its total fertility rate, at 1.6 children per woman, is now higher than the European average.

One can spend pages upon pages unraveling the double standards, misrepresentations and outright lies which the Western media and political class use to attack Russia. But if you’re unconvinced, and refuse to buy into Russia’s undervalued market on principle, it’s your loss.

As t he professional Russia investor Eric Kraus wrote in Business Week in July 2010, “Russian markets are fashion victims, and are currently both unfashionable and cheap. You can own them now, or wait and buy the next time they surge back into vogue. And I will be selling out just about then.” I’d trust him – that’s exactly what he did in 2008!

Canada

Canada combines the American spirit of free enterprise, with a greater safety net and social mobility. It is also on far better fiscal footing. In 2010, its cyclically adjusted primary budget deficit was -2.7% of GDP (US: -7.0%), and its net debt was 32.7% of GDP (US: 65.2%; Japan: 104.6%). Possessing huge energy, mineral and freshwater reserves, as well as a well-educated and growing population, it is surely one of the better investment bets in the developed world.

Scandinavia (and Nordic)

The Nordic region is one of the richest, most educated and socially cohesive on Earth, frequently coming at or near the top in any global index of freedom, social mobility, environmental sustainability, and technological modernity.

In 2010, Sweden’s GDP grew the fastest in Europe at a blistering 5.2%, while maintaining a balanced budget throughout the crisis. Norway’s fortunes are far more directly tied to its oil industry, but peak oil, excellent state management of reserves and a low population make for bright prospects. Norway is the second richest European country after the banking center of Luxembourg.

Even apparent basketcases like Iceland may be a good investment to buy up on the cheap. While its international banking career might be over, it still has massive freshwater and geothermal energy reserves, that make it an attractive center for energy-intensive industries such as aluminium smelters.

Finally, contrary to right-wing depictions of social democracies as retirement homes full of effete, aging liberals, all the Nordic states have fertility rates that preclude major aging crises (they range from 1.8 children per woman in Finland to 2.2 in Greenland).

The Arctic when all the ice melts.

From an Ultimate Dim Thule…

By a route obscure and lonely,
Haunted by ill angels only,
Where an Eidolon, named Night,
On a black throne reigns upright,
I have reached these lands but newly
From an ultimate dim Thule —
From a wild weird clime, that lieth, sublime,
Out of Space — out of Time.

- Dreamland by Edgar Allen Poe.

Even in our day, science suspects beyond the Polar seas, at the very circle of the Arctic Pole, the existence of a sea which never freezes and a continent which is ever green.

- The mystic H. P. Blavatsky.

Before the rise of the world economy, spatial perspectives were local, at most extending to the boundaries of their cultural sphere or world-empire: The Ecumene for the Ancient Greeks and Romans; Dar al-Islam for the Muslims; Christendom for the Franks; the Great Wall for the Chinese. Medieval European geographers referred to any lands beyond the borders of the known world as Ultima Thule.

Globalization from the 19th century bound the entire world together, for the first time in history, but its flows and links of labor, capital and commodities passed the Arctic by. Unattractive to sustained private investment, the region’s development was always fitful and unbalanced, from the Yukon Gold Rush that petered out almost as suddenly as it flared up; to the penal camps, subsidized settlements and military bases of the Soviet Arctic, now decaying away except where hydrocarbons extraction has thrown them a lifeline.

But now the world is changing. No longer will opening the Arctic have to be a hubristic project, as with the chiliastic visions of Soviet planners; or a costly and unprofitable strategic necessity, as with the Cold War submarine patrols beneath the Arctic sea ice or the bomber flights over it. Today, it is global macro-trends such as global warming, resource depletion and overpopulation that will ensure the rapid but organic development of the Arctic.

With the growing human presence, the Arctic will inevitably begin to lose its luster of mysticism, foreboding and darkness. As the years turn into decades, and 2050 approaches, the polar-centric view of the world will become increasingly central to human spatial consciousness. The world’s trade, energy and capital flows will have been largely rerouted north.

The ARCS of Progress, their numbers swelled by climate refugees, and their economies bolstered by a flood of capital investment, will be amongst the leading Powers in the world. This assumes they retain their present political configurations. For instance, could an independent Greenland, with just 56,000 people today, retain its own national identity? Facing resource shortages and droughts in the south, would China encroach on the Russian Far East? Would the US try to assimilate Canada?

Whatever the answers to these questions, one thing is near certain. The vision of a northern Ultima Thule is dissipating, and will soon dissolve altogether (thought teh concept may be resurrected to describe a desolate, uninhabitable South many hundreds of years into an extreme AGW future). In its place there will emerge a polar world-economy of open seas, farms and growing cities by 2050.

There will arise an Arctic ecumene.

* According to more recent data, there were 34 transits of the Northern Sea Route in 2011, up from just 4 in 2010; with 820,000 tons of goods transported relative to 111,000 tons in 2010. Volumes are predicted to double again this year. This goes in tandem with record breaking sea ice melt in 2012.

Edit Jan 28, 2013: There were a record-breaking 46 vessels making the transit through the NSR this year.

(Republished from AKarlin.com by permission of author or representative)
 
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A few months ago I posted a table and map of Russian IQ’s as derived from regional PISA performance. Those figures are based on Jarkko Hautamäki’s slideshow comparing regional PISA performance in Finland and Russia.

That material is a bit inadequate because, as had been my custom up that point, I was only making IQ estimates based on the Math and Science components of the PISA tests, and avoiding Reading to maintain reverse compatibility with my (now disused, in favor of just IQ) Human Capital Index. In light of some realizations that verbal IQ is no less important than numerical, I have updated the figures to include the verbal component as well. This doesn’t create any radical changes – the overall IQ only drops by 0.3 points – so I reuse the same map.

(Note that the legend on the map isn’t converted to IQ. “PISA scores, mean 500, SD 100, have to be transformed into IQ values, mean 100, SD 15, by adding or subtracting the deviation from the mean in the relationship 100 : 15 = 6,67.”)

Commentary

There are any numbers of comments one can make, but I will confine myself to the most important ones:

(1) In some regions, margins of error are high, as samples were low. Nonetheless, it is still possible to identify some concrete patterns. The overall estimate is very accurate because the sample was N=5,308 and representatively distributed across the country.

(2) Moscow pupils performed very well, at the level of the highest scoring OECD countries like Finland, Taiwan, and Korea. This is especially impressive considering the significant numbers of immigrants in that city from the North Caucasus and Central Asia, who come from poorly-scoring countries and rarely have good Russian. This is surely the result of a century of attracting Russia’s (the USSR’s) cognitive elite.

(3) St.-Petersburg and Tyumen oblast performed above the OECD average, while a few other regions performed at or only slightly below the OECD average.

(4) Among ethnic Russian republics, Siberian regions performed well, while the Urals and southern regions performed badly.

(5) Performance in ethnic minority republics differs dramatically. Many of the Turkic and Finno-Ugric regions, such as Tatarstan, Komi, Chuvashia, and Karelia did well; however, Mari El is a big exception. The Buddhist peoples of Asia, such as Chita oblast (now merged into Zabaykalsky Krai) and the Sakha Republic, performed relatively poorly, as did the Muslim North Caucasus region of Dagestan. Chechnya and Ingushetia would probably score around very low – probably in the mid-80′s. We can be pretty confident about that because their unemployment rates are nearly 50% despite tons of federal transfers.

Bear these figures in mind when considering long-term investments into Russia alongside with their business climate, corruption levels, etc.

PISA-derived IQ of Russian regions

The results by each of the 44 Russian regions which participated in PISA are reproduced below:

IQ
Moscow 106.6
Saint-Petersburg 102.6
Tyumen oblast 100.6
Novosibirsk 100.0
Chelyabinsk oblast 99.7
Omsk oblast 99.3
Samara oblast 99.2
Vladimir oblast 98.9
Tula oblast 98.6
Karelia 98.1
Tatarstan 98.1
Komi 98.0
Tomsk oblast 97.9
Primorie krai 97.2
Krasnoyarsk 97.1
Chuvashia 97.0
Udmurtia 96.4
Sakhalin oblast 96.4
Saratov oblast 96.0
Tambov oblast 95.9
Moscow oblast 95.6
Volgograd oblast 95.5
Vologda oblast 95.3
Kemerovo oblast 95.3
Altai krai 94.9
Astrakhan oblast 94.8
Ryazan oblast 94.7
Kursk oblast 94.6
Khanty-Mansijsk 94.2
Bashkortostan 93.4
Krasnodar 93.3
Perm krai 93.3
Rostov oblast 93.3
Nizhnij Novgorod 93.1
Voronezh oblast 92.7
Orenburg oblast 92.7
Kaluga oblast 91.7
Sverdlovsk oblast 91.6
Ulyanovsk oblast 91.5
Adygea 91.2
Stavropol 91.0
Mari El 90.1
Dagestan 88.7
Chita oblast 88.5
Sakha (Yakutia) 87.7
RUSSIA 96.0

Correlation with economic development

Doing the same exercise as I once did with Italy, the exponential correlation between IQ and GDP per capita (adjusted to reflect local prices; 2008) turns out to be R2=0.5262, if we only take into account those regions whose economies aren’t skewed by substantial natural resource sectors.

This is not as good as Italy’s R2=0.7302, but the result is still an amazingly good one in social sciences. In fact in Russia’s case it’s all the more impressive because its economy was for the most part built up under central planning, which isn’t as good as markets at allocating resources efficiently.

Even under a command economy, the principle still holds: Higher average IQ, higher human capital, greater productivity, greater GDP pre capita.

Other data on the Russian average IQ

(1) The PISA-derived IQ is 96.0.

(2) Richard Lynn estimates Russia’s average IQ to be 96.6 in his 2012 book Intelligence: A Unifying Construct for the Social Sciences.

(3) Heiner Rinderman estimates it at 97.3 in a 2009 paper.

The two most comprehensive authorities on international IQ’s, as well as the most comprehensive international standardized test, are all in agreement that Russia’s current average IQ is in the 96-98 range.

Other data on Russian regional IQ

(1) Map of average Unified State Exam (USE) scores among Russians admitted to institutions of higher education in 2010.

This is a biased sample because it only measures those Russians who were admitted to a university in 2010. It is not indicative of average regional IQ.

Data from Межвузовское исследование «Успеваемость студентов первого курсавысших учебных заведений России».

(2) Here is the same data by Federal District. They are, in order: Volga; North-West; Siberia; Central; Urals; Far East; North Caucasus.

(3) The share of “Olympians” (basically students who did really well and get benefits) in the annual university cohort. By region from top to bottom: Northern Caucasus; South; Far East; Volga; Urals; Siberia; North-West; Central.

There is nothing surprising about this. The Central Federal District contains Moscow. The North-West Federal District contains Saint-Petersburg, and I also suspect that ethnic Russians from the North-West region also have the highest IQ potential of all Great Russians because of admixture with Finno-Ugrics. (Finns and ethnic Estonians both have very high PISA scores).

(4) Unfortunately, Russia does not release regional average USE scores. It does this on purpose to avoid inciting ethnic enmity. (Basically, some regions – most of them non-Russian ones – systematically cheat and inflate their USE scores).

(However, I do recall visiting a site showing the number of people from each region who scored a 100/100 on USE subjects such as the Russian language, math, etc. It is a very rigorous exam and getting full marks on a subject like math is exceedingly hard; only a few hundred manage to do it every year if memory serves right. As IQ distributions are bell curves, it should be theoretically possible to get some idea of regional IQ’s by looking at the perfect scorers per capita rate. To do this however I will need to locate that site.)

Other EE Nations

The Ukraine didn’t participate in PISA 2009, but extrapolating from its TIMSS scores, its IQ would be around 93.1. Belarus would probably be considerably higher, because (1) they are basically genetically identical to Great Russians and Poles, and (2) they have done economically better than Ukraine since the 1990′s despite keeping much of their economy state-owned.

This section will be updated with info on other countries in the near future.

Slavic Genetic IQ Ceiling

The Slavic genetic ceiling appears to be around 100 based on the Czechs and Poles. The average height of young Russian men is about 175cm compared to 179cm-180cm among the Central-Europeans (Poles, Czechs, Slovaks). This discrepancy likely arose from the fact that Russia’s (and Ukraine’s) post-Communist transitions were far more catastrophic than those of the Poles and Czechs, involving a major deterioration in quality of nutrition during the 1990′s when the PISA 2009 cohort was growing up.

Russia’s meat consumption per capita (kg).

Russian nutrition has already returned to First World levels however; for instance, meat , fish, fruit, etc. consumption is now basically the same as in Europe or the US. This means that in the next decade I expect the Flynn Effect to kick off in Russia’s favor, raising its average IQ levels to their theoretical peak of 100 by the 2020′s.

(Republished from AKarlin.com by permission of author or representative)
 
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scylla-charybdis-and-me Contrary to what some might try to take from my post on the longterm failure of the Soviet economy, I am not an anti-Soviet ideologue. I loathe lies about its achievements and the blanket condemnations directed its way by moralistic poseurs every bit as much or more than I detest reality-challenged attempts to paint it off as some kind of utopia or at least superior to alternative paths of development.

After communists, most of all I hate anti-communists. – Sergei Dovlatov, Soviet dissident.

On the latter point, I especially notice a tendency to ignore wider historical and comparative context. In the crudest cases, Russian literacy rates and GDP are compared with those of the Tsarist era: Yes, of course the average Soviet citizen c.1980 lived far better than the average Russian citizen in 1913, but then again, so did the average citizen of EVERY OTHER European country. The more important question to ask: Would the average Russian have been better off had the Russian Empire continued on its natural development trajectory without the distortions of Stalinist central planning? Yes, he almost certainly would have, as per comparison with, say, Finland (the sole part of the Empire that didn’t go Communist), or even the Mediterranean periphery nations.

Alternatively, they say that the USSR nonetheless managed to be richer than the “Third World”, as if that was some kind of achievement. Of course it was not, as (1) they were much less advanced than the Russian Empire even in 1913, and (2) their low national IQ’s would have precluded, and continue to do so, convergence with the rich world anyway; a weakness that Russia *doesn’t* suffer from. But the evidence is simply too overwhelming to be deniable: China; North Korea; Cuba; to a lesser extent, the ex-Soviet countries and Eastern Europe – all these nations, which have little in common except insofar as they suffered from the scourge of Communist economics, are ALL glaring and consistent downwards exceptions to the otherwise remarkably tight correlation between levels of national IQ/human capital and GDP per capita. (Of course a further problem here is that hardcore Soviet apologists tend to be cultural Marxists and deny Human Biodiversity and intelligence theory).

They plead special circumstances, e.g. that the USSR was encircled, and it suffered from wars, crises, etc. But the USSR was far from alone from being wracked by catastrophe during the 20th century – in fact, quite a few of them were self-inflicted, like the Stalinist famines – and (to its credit), it remained stable and recovered quickly from shocks, unlike many developing capitalist countries. (E.g., lost WW2 industrial output was restored by the late 1940′s). As for the sums it spent on the military, this was a reason but not the main reason why the Soviet economy became sluggish and living standards stagnated from the 1970′s, at a level that was far beneath that of the advanced world (regardless of whatever absurd anecdotes commentators like Kirill or Leon wish to recount).

That said, I equally despise ideologized LIES about the USSR, which tend to come most prominently from Russophobe Westerners and their liberal compradors in Russia: That it shares responsibility for WW2 with Nazi Germany; that it “drowned” the fascist invaders with bodies (there is a whole host of myths on that front, most of which were initially advanced by retired Nazi generals); that the Holodomor was a genocide against Ukrainians (it was a manmade famine enabled by ideological zeal, and remarkably comparable to the Irish Famine); that the Soviet space program was run by German scientists; that the Soviet system was doomed to collapse; that the Communists killed 70 million people (in reality about 2mn executed or died in camps, and a further 5mn in manmade famines – which is STILL horrible, lest critics accuse me of apologetics, especially when one considers that the most severe late Tsarist era famine happened in 1891, in which half a million people died).

I also consider Andropov to have been the best of the Soviet leaders, and am of the opinion that on balance it would have been better had the USSR not collapsed and instead reformed itself while maintaining political unity (though in practice, again contrary to pro-Soviet propaganda, this was a very hard if not impossible task in the conditions that had developed by the late 1980′s). Despite not having really lived there I very much REGRET the Soviet collapse; for a start, I would not have become a rootless cosmopolitan slouching about foreign countries, and more generally the new democratic and “independent” Russia would not have been pushed about and bullied by the West, which contrary to its democracy propaganda only truly respects the fist. If I were really the anti-Soviet ideologue some people insist on painting me as, would I have made SEVEN out of the 50 (14%) of my article on Russophobe myths directly tied to clearing up misconceptions about Soviet history? Would I have translated the controversial textbook by Filippov, which was smeared as Stalinist by various liberal ideologues and Russophobes?

Of course, there are also polarly opposite ideologues who consider me a Stalinist or Soviet apologist, such as La Russophobe and Economist “journalist” Edward Lucas and his various Balto-fascist minions. They hardly deserve mention. After all if I was this sovok diehard would I bother doing stuff like translating this article which is largely anti-Soviet by Estonian writer Jaan Kaplinski?

My only real sin is being objective, radically ambiguous, not taking sides, etc., and for this I come under assault from everybody – the liberals, the PC brigade and cultural Marxists, the traitors and compradors, the Russophobes Western and Russian, Western chauvinists, the hardcore Stalinists, the Communists, the monarchists and white nationalists, and what’s worst in my view, the Russian “patriots” who think Stalin and/or the USSR in general were the best thing since vodka. That is because many of the above are actually viciously intolerant fascists if not in name then in spirit. Those thugs will never shut me up!

Nonetheless, for all the lively discussion the recent post on the Soviet economy generated, I have taken the strategic decision to henceforth place all my commentary on Russia that is not more or less directly involved with this blog’s sub-header – “Exposing Western myths about Russia” – at my other blog AKarlin. That blog will be for controversial, original, etc. comment on Russia that will at times not jive well with DR’s theme. This blog will be exclusively about specific Russia myths, exposes of lying journalists, Russia-related translations, telling statistical charts, etc.

EDIT Jan 29, 2013: I have moved taken the above paragraph to heart and transferred the post from DR to AKarlin, where you are now reading it.

(Republished from Da Russophile by permission of author or representative)
 
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Many Communists, leftists, and even patriots (I’m sorry to say) have a pronounced tendency to make out the Soviet economy as not quite the resounding failure it really was – or even to paint it as a success story that was only brought down by perestroika and liberal reforms.

The above chart – based on historical GDP per capita (Geary-Khamis 1990 Int$) by Angus Maddison, compiled by liberal economist Illarionov, popularized online by Lopatnikov, and Starikov – purports to destroy two “myths”: That of (1) Prosperous Tsarism, and (2) The ineffectiveness of the Soviet economy. After all, the average Russian went from being 40% as rich as the average American in 1885, to only 23% by 1917; whereas during the Soviet period, despite the turmoil of two major wars, Russian incomes reaches a relative peak at 40% of American levels during Brezhnev’s “stagnation” period.

These is however a glaring hole in this logic, namely that (1) relatively slow growth under late Tsarism reflected a permanent state of affairs, as opposed to the heavy but temporary burden of a large rural, illiterate population; and (2) that a level of per capita GDP that is a mere 40% of what Americans enjoy was in any way a fulfillment of Russia’s potential during the 20th century. In fact, graphical comparison with other countries shows this to be almost certainly false.

I replicated the graph comparing Russia’s historical performance relative to the US, but adding in another reference – those south European countries that were broadly comparable to Tsarist Russia in terms of economic development at the turn of the century (i.e. both were backward), but were spared from the distortions of central planning. (I could only find figures for the Russian Empire/the USSR as a whole, not Russia specifically, hence the slight disparity from the first graph; but the trends would remain the same). You can click on the graph to view it in higher detail.

On examination, several things became clear:

(1) While it is true that Russia was losing ground relative to the US under late Tsarism, or at least until 1905 (see first graph) – the same was true for all other backward European economies. In fact, the Russian Empire tracked Portugal almost exactly. But bear in mind that Russia in 1870 was 90% rural and illiterate, a state of affairs utterly nonconductive to industrial development; and agriculture’s potential for productivity gains is extremely limited, especially in the context of the system at that time. In contrast, the US was almost universally literate and embarking on its great industrial boom. It is no wonder then that the relative gap between the US and Russia increased from 1870 to 1905 (why the gap existed in the first place can be traced back centuries and is far beyond the scope of this post). Notice that the same thing was happening in all the other similarly backward countries: Portugal, Spain, Ireland, to a lesser extent (but more developed) Italy also all lost ground to the US from 1870-1913.

(2) The Soviets inherited Tsarist infrastructure, hence the period until 1925 was simply one of restoration. It should also be noted that the literacy rate by 1916 was around 50%, i.e. in terms of human capital development, much of the legwork had already been done; that is, the country was ALREADY ripe for a faster rate of industrialization, that would have happened regardless under any political regime. Nonetheless growth began to flag by the late 1920′s, as Tsarist-era production levels were restored. It was only further turbocharged from 1930 on by forced savings via collectivization and consumption repression, and German and American investment. But even so note that the sharp rise in the early 1930′s was in large part an artifact of the Great Depression that wracked the US, and that in that period ALL countries rose upwards, and that the USSR failed to make substantial gains on the US standard of living following the mid-1930′s; indeed, Soviet GDP actually fell in 1940. Needless to say this growth was also achieved at much higher human cost than elsewhere.

(3) Everybody suffered from the wars and the collapse of trade during the 1940′s. The USSR did start recovering earlier, showing strong growth relative to the US during the 1950′s and to a lesser extent during the 1960′s; it also held its own against what were still the weakest West European economies, that is Portugal, Greece, Spain, and Ireland – although Italy sprinted far ahead. The fast growth during this period was structurally similar to the US some fifty years prior: The large-scale shift from agriculture to industry, which is a one-off in historical terms.

(4) Once this process started exhausting itself by the 1970′s, relative growth flat-lined at a base only 35% of America’s (or slightly more than 40%, taking into account only the RSFSR). By 1990, it dipped below 30%. Note that it is a linear downslope from 1975, well before perestroika or “reforms”. From 1970 a sharp gap began to develop with Portugal, Greece, Spain, and Ireland; by 1990, for instance, the weakest of this group, Portugal, was at 50% of US GDP per capita. European nations that a century ago were overwhelmingly rural, undeveloped and superstitious just like the Russian Empire had now pulled decisively ahead of Soviet Russia; during the 2000′s, Ireland briefly almost converged with the US! While as we all know, during the 1990′s, the Russian economy fell into a precipitous collapse…

(5) Yes, on the one hand, this collapse wouldn’t have happened had the USSR retained political authority and central planning. On the other hand, there does not appear to be any good reason that the USSR should have experienced a productivity spurt relative to the US; if anything the reverse as demographic prospects were deteriorating by the 1980′s (especially the pool of surplus rural labor was drying up) and resources for higher investment rates were hard to find (due to the demands of the MIC, and falling oil prices). Indeed, Goskomstat planners in the late 1980′s assumed growth to the end of the millennium would be around 1.5% per annum, i.e. even further decline relative to the US. In the big picture, Russia exchanged a very punishing transitional depression for the prospect of normal market growth, which has predominated since 1998, and the longterm possibility of real convergence.

fennoscandia-russia-gdp-usa-compared

Another interesting set of countries Russia can be compared to are Fennoscania, though with a word of caution – Sweden, Norway, and to a lesser extent Finland were in literacy (human capital) terms far ahead of the late Russian Empire. Note that Finland, relatively backward nonetheless, declines more relative to the US than its Nordic neighbors; again, presumably a function of its initial backwardness (highly rural, can’t grow fast). Its performance in the 1930′s is every bit as impressive as Russia’s, and unlike the USSR, it continues to rapidly converge with US living standards from the 1960′s onwards. Note that Finland was only a modestly richer subject of the Russian Empire in 1913 than the national average.

russia-gdp-historical-compared

The final graph shows Russia’s historical performance relative to the US, Finland, Greece, and Portugal all in one. It is particularly telling that plotted against Finland, it is a story of almost inexorable decline during the Soviet period. While Russia did makes massive gains vis-a-vis Portugal and Greece under Stalinism, both the latter grew far more quickly during the 1950′s and 1960′s, with the result that they overtook the USSR in per capita terms at around 1970 and held a substantial lead by the 1980′s. This substantial gap became an awning abyss during the catastrophic nineties, however it is important to emphasize that the economy of the 1990′s was for the most part still a continuation of (well, the dissolution of) the stagnant Soviet command economy.

There are of course many caveats. Some might argue that what the USSR suffered from in inefficiency it made up for in more focus on developing human capital (which is the single most important factor for long-term productivity growth). I don’t see this as convincing. As mentioned above, literacy rates by the 1910′s were above 40%; the school enrollment figures of the mid-1910′s would only be reattained in 1925. It is simply wrong to say that the Tsarist regime neglected human capital, it was just developing it from a lower base and the Soviets merely took over that process.

The two biggest problems were that (1) the Soviet economy was seemingly unable to develop to more than 40% of the US per capita level, due to its inefficiency – that was its ceiling; and what’s worse, (2) it could not be dismantled without incurring a hyper-depression in the meantime. That second point is the reason why many Russian leftists continue to insist that the Soviet economy was a good thing, at least it held steady relative to the Americans under Brezhnev as opposed to collapsing in the 1990′s (which is in actuality the collapse of the Soviet economy), and being on the retreat throughout late Tsarism (for aforementioned structural reasons, but whose negative influence was weakened from the 1900′s); they also for some reason think that a GDP per capita at 40% of the US level is something to be proud of.

Addendum 6/22: I noticed Sergey Zhuravlev makes much the same arguments in his article Wily Lines

(Republished from Da Russophile by permission of author or representative)
 
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Human capital (primarily education) is the single most important factor behind long-term productivity gains, and hence economic growth. The relatively high human capital of Russia and China, which is comparable to developed country levels, is the most important reason why I rate their future prospects much higher than those of the other two BRIC’s, Brazil and India.

But the internal distribution of human capital is also very important. For instance, in Italy there is an almost perfect correlation between regional PISA scores in Math and Science, and regional GDP’s. I have long wanted to find a similar data set for Russia, and I finally did so today in Jarkko Hautamäki’s slideshow comparing regional PISA performance in Finland and Russia. Based on the figures there I estimated the PISA scores (Math and Science) for Russia’s regions and compiled the map below.

russia-map-pisa-results-2009

The results by each of the 44 Russian regions which participated in PISA are reproduced below*:

Region PISA 2009
Moscow 546
Saint-Petersburg 519
Tyumen oblast 506
Novosibirsk 502
Chelyabinsk oblast 499
Omsk oblast 497
Samara oblast 496
Vladimir oblast 494
Tula oblast 492
Karelia 489
Tatarstan 489
Komi 488
Tomsk oblast 488
Primorsky krai 483
Krasnoyarsk 482
Chuvashia 482
Udmurtia 478
Sakhalin oblast 477
Saratov oblast 475
RUSSIA 475
Tambov oblast 474
Moscow oblast 472
Volgograd oblast 471
Vologda oblast 470
Kemerovo oblast 470
Altai krai 468
Astrakhan oblast 467
Ryazan oblast 466
Kursk oblast 465
Khanty-Mansiysk 463
Bashkortostan 458
Krasnodar 457
Perm krai 457
Rostov oblast 457
Nizhny Novgorod 456
Voronezh oblast 453
Orenburg oblast 453
Kaluga oblast 446
Sverdlovsk oblast 446
Ulyanovsk oblast 445
Adygea 443
Stavropol 441
Mari El 436
Dagestan 426
Chita oblast 425
Sakha (Yakutia) 419

There are any numbers of comments one can make, but I will confine myself to the most important ones:

(1) In some regions, margins of error are high, as samples were low. Nonetheless, it is still possible to identify concrete patterns.

(2) Moscow pupils performed very well, at the level of the highest scoring OECD countries like Finland, Taiwan, and Korea. This is especially impressive considering the significant numbers of immigrants in that city from the North Caucasus and Central Asia, who come from poorly-scoring countries and rarely have good Russian.

(3) St.-Petersburg and Tyumen oblast performed above the OECD average, while a few other regions performed at or only slightly below the OECD average.

(4) Among ethnic Russian republics, Siberian regions performed well, while the Urals and southern regions performed badly.

(5) Performance in ethnic minority republics differs dramatically. Many of the Turkic and Finno-Ugric regions, such as Tatarstan, Komi, Chuvashia, and Karelia did well; however, Mari El is a big exception. The Buddhist peoples of Asia, such as Chita oblast (now merged into Zabaykalsky Krai) and the Sakha Republic, performed relatively poorly, as did the Muslim North Caucasus region of Dagestan. Extrapolating from Dagestan, Chechnya would probably score around 400, i.e. like Brazil.

Bear these figures in mind when considering long-term investments into Russia alongside with their business climate, corruption levels, etc.

Finally, there is a table below comparing individual Russian regions with countries around the world. (The Ukraine didn’t participate in PISA 2009, but extrapolating from its TIMMS scores, its rating should be around 454. The OECD average is about 500.) I have bolded countries and Russian regions which are especially useful, in my opinion, for comparative purposes.

Region PISA 2009
China: Shanghai 588
Hong Kong 552
Singapore 552
Finland 548
Moscow 546
Korea 542
China 537
Japan 534
Chinese Taipei 532
Canada 528
Liechtenstein 528
New Zealand 526
Switzerland 526
Netherlands 524
Australia 521
Estonia 520
Saint-Petersburg 519
China: Macao 518
Germany 517
Belgium 511
Slovenia 507
Tyumen oblast 506
United Kingdom 503
Novosibirsk 502
Iceland 502
Poland 502
Denmark 501
Chelyabinsk oblast 499
Norway 499
France 498
Ireland 498
Omsk oblast 497
Czech Republic 497
Hungary 497
Samara oblast 496
Austria 495
Sweden 495
United States 495
Vladimir oblast 494
Slovak Republic 494
Tula oblast 492
Portugal 490
Karelia 489
Tatarstan 489
Komi 488
Latvia 488
Tomsk oblast 488
Luxembourg 487
Italy 486
Spain 486
Lithuania 484
Primorsky krai 483
Krasnoyarsk 482
Chuvashia 482
Udmurtia 478
Sakhalin oblast 477
Saratov oblast 475
Russia 475
Tambov oblast 474
Croatia 473
Moscow oblast 472
Volgograd oblast 471
Vologda oblast 470
Kemerovo oblast 470
Greece 468
Altai krai 468
Astrakhan oblast 467
Ryazan oblast 466
Kursk oblast 465
Khanty-Mansiysk 463
Malta 462
Bashkortostan 458
Krasnodar 457
Perm krai 457
Rostov oblast 457
Nizhny Novgorod 456
Voronezh oblast 453
Orenburg oblast 453
Israel 451
Turkey 450
Kaluga oblast 446
Sverdlovsk oblast 446
Ulyanovsk oblast 445
Adygea 443
Serbia 443
Stavropol 441
Mari El 436
Chile 434
Bulgaria 434
United Arab Emirates 430
Romania 428
Uruguay 427
Dagestan 426
Chita oblast 425
Thailand 422
Costa Rica 420
Sakha (Yakutia) 419
Mauritius 419
Mexico 418
Malaysia 413
Trinidad & Tobago 412
Venezuela 410
Moldova 405
Kazakhstan 403
Azerbaijan 402
Montenegro 402
Jordan 401
Brazil 396
Argentina 395
Colombia 392
Tunisia 386
Albania 384
Indonesia 377
Georgia 376
Qatar 374
Panama 368
Peru 367
India 341
Kyrgyzstan 331

* Methodological note: In reality, the figures given were for all three components of PISA (i.e., Reading, as well as Math and Science). I just assumed there is a perfect correlation in relative performance in Reading as compared to Math and Science (a valid one, I think, as the cross-national evidence indicates this relation is very close), and adjusted from Russia’s Math and Science score. The reason is for the Russian figures to have compatibility with my Human Capital Index, which is the average of PISA and/or TIMSS Math & Science scores.

(Republished from Da Russophile by permission of author or representative)
 
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As we covered in the previous instalment, Demographics I: The Russian Cross Reversed?, fertility rates are not abnormally low by European standards and are likely to rise further in the future. The same cannot be said of mortality rates – a ‘quiet crisis‘ that has been a ‘catastrophe of historic proportions’.

Take life expectancy. As of 2007, the average age of death in Russia was 65.9 years. This is way below First World levels (United States – 78.0; EU – 78.7; Japan – 82.0) and even many developing country standards (Mexico – 75.6; China – 72.9; Egypt – 71.6; India – 68.6). Note: this figure was actually 67.7 years in 2007 (the CIA relies on its own projections to estimate demographic data), but the general point stands.

Even compared to other post-Soviet countries, Russia’s mortality stats are far from impressive – as you can see from the graphs in that link, total life expectancy, male life expectancy and death rates for both sexes all hovered near the worst levels. Nor is so-called healthy life expectancy anything to write home about (in 2002, it stood at 53 years and 64 years for men and women respectively, compared with 55/64 for Ukraine, 63/68 in Poland and 67/71 in the US).

Russia’s infant mortality rate, at 10.8 / 1000 people in 2008, is respectable compared to countries of roughly similar income levels (Mexico – 19.0; Latvia – 9.0; Poland – 6.9) and far better than most developing countries. Nor is Russia’s female life expectancy all that bad compared with the typical Asian or Latin American country. The same cannot be said of male life expectancy. According to CIA estimates, in 2008 it stands at a meagre 59.2 years – the US (75.3), Poland (71.4), India (66.9), Ukraine (62.2) and even Bangladesh (63.2) score higher, while Russia’s neighbors in this area are the likes of Madagascar (60.6) and Ghana (58.7). The main reason is amazingly high mortality rates for middle-aged Russian men, which by Rosstat calculations are somewhat higher today than they were in 1897.

Age specific mortality rates / 1000
Left: men; right: women.

As you can see from the graph above, by far the biggest change between 1897 and 2005 occured in a massive reduction in infant mortality, from 233 / 1000 to just 12.5, as well as in children and teens. This was in large part due to basic and fairly cheap to implement advances in vaccinations and basic obstetrics (the latter of which has practically eliminated maternal mortality as a major cause of death amongst women). Female mortality has improved all around, although not to the same extent as in European countries. Yet male mortality has remained stagnant, comparable to old Tsarist and modern African levels.

This is best illustrated by a measure called “Probability of dying (per 1 000 population) between 15 and 60 years”. For Russian women in 2005, this was 17% – not much worse than, say, Egypt. Yet almost half of Russian men, at 47%, died before reaching retirement age. This compared with 9% in Japan, 14% in Finland and the US, 16% in China, 21% in Poland, 28-33% in the Baltic countries and 40% in the Ukraine. In fact, it was worse than in many African countries, e.g. Ghana (36%) and Ethiopia (41%). The only states to have the dubious distinction of beating Russia in this sphere were those with mass AIDS epidemics, like South Africa (60%) and Botswana (76%).

Eberstadt’s Russia: Too Sick to Matter? is as relevant to mortality today as when it was written in 1999. To quote it in extenso:

For every subsidiary age group from 15 to 65, death rates for Russian men today are frighteningly high. Youth may be the prime of life — but Russian men in their late teens and early 20s currently suffer higher death rates than American men 20 years their senior.13 For their part, Russian men in their 40s and 50s are dying at a pace that may never have been witnessed during peacetime in a society distinguished by urbanization and mass education. Death rates for men in their late 40s and early 50s, for example, are over three times higher today in Russia than in Mexico. To approximate the current mortality schedule for Russian middle-aged men, one has to look to India — the India, that is, of the early 1970s, rather than the much healthier India that we know today.14

It is beyond doubt that Russia’s healthcare system has improved in the last one hundred years, and despite its flaws, it is light-years ahead of countries like Ethipia or India, as measured by infant mortality rates, health spending per capita or immunization rates. So how come mortality, especially amongst middle-aged men, is so astoundingly high? To answer the question, it is instructive to look at the historical trends.

Russia life expectancy 1890-2000
Note how overall improvements in life expectancy for men were exclusively
due to the removal of childhood illnesses as a major cause of death.

In 1897, life expectancy in the Russian Empire was extremely low (31 years for males, 33 for females), lagging behind Western Europe and the US by around 15 years. The 1920′s and the period from 1945 to 1965 saw the introduction of mass elementary healthcare, raising life expectancy to 64 years for men and 72 years for women. Since then, the latter has stagnated while the latter went into slow but steady decline, in constrast to First World nations where life expectancy continued rising (see graphs below).

Life expectancy in Russia and other countries 1950-2000
Note how Russia trailed Japan up until 1965.

From the first graph on my Demographics I post, we can see that from the mid-1960′s mortality in Russia embarked on its merciless upwards trajectory (thus reflecting life expectancy trends). Notice how despite the dips (late 1980′s, late 1990′s, 2007?) and troughs (early 1990′s, early 2000′s), it follows a remarkably straight line. Rapid improvements, in which Russia followed Japan’s trajectory, stalled in the mid 1960′s and have been in stagnation ever since. (The Soviet Slavic and Baltic states followed a similar pattern, e.g. see stats and discussion on Ukrainian historical mortality here).

As of 2006, the vast majority of Russians died from cardio-vascular diseases (CVD’s) and injuries/violence. Some 8.6 / 1000 Russians passed away due to CVD’s, which is more than the America’s entire death rate (8.3 / 1000). In contrast, 2.8 / 1000 of Americans died from CVD’s. Russia’s deaths from external causes (DEC’s) were 2.0 / 1000, about four times higher than in the US. Of these, 23 / 100,000 were from alcohol poisoning, 30 / 100,000 from suicide and 20 / 100,000 from murder. On the other hand, cancers did not kill a significantly higher amount of people than in the West, while deaths from infectitious diseases are quantitavely insignificant. So it is clear than any solution of the mortality crisis will have to focus on reducing deaths from CVD’s and injuries / violence.

Historically, it can be seen below that deaths from diseases of the circulatory system have almost doubled since 1970. Forty years ago about an equal percentage of people died from circulatory diseases in both Russia and Europe (although even then, we should point out that this was not a good indicator, since Russians were substantially younger than Europeans then); today, they are separated by a factor of 4, as can be seen in the graph below. Deaths from injuries / violence have followed roughly similar trends.

1970-80 linear projection is mine by Rosstat data

Finally, life expectancy and mortality rates vary by geographical region and socio-economic factors. Siberia, the Far East and the North fare worse in relation to the Volga and the South – in particular, regions like Daghestan and Ingushetia with burgeoning populations of young Muslims were completely immune to the soaring post-1965 mortality rates in Russia proper. In Russia proper, the poor report worse health than the rich (see p.68) and rising mortality has mostly affected those who are poorly-educated (‘The well-documented mortality increases seen in Russia after 1990 have predominantly affected less-educated men and women, whereas the mortality of persons with university education has improved, resulting in a sharp increase in educational-level mortality differentials’).

Having outlined the situation, we can now ask ourselves several questions.

Why have Russia’s mortality rates, especially amongst less well-educated ethnic Russian men, soared since 1965 in such stark contrast to trends in the First World?

Веселие Руси есть пити [The joy of Russia is to drink]. – attr. Vladimir the Great, 988 AD, upon rejecting Islam as Russia’s future religion.

At its core, the mortality crisis is an alcohol crisis. Russia has had a long and rich relationship with alcohol from the times of Kievan Rus. From the earliest days excessive drinking was remarked upon in foreign travellers’ accounts. Ownership or regulation of vodka production has been a major source of state revenue since Ivan IV created a chain of taverns in all major cities through to the USSR, when in the 1970′s receipts from alcohol constituted a third of government revenue. Furthermore, Russian drinking is characterized by the zapoi, long binge sessions involving hard spirits. Nonetheless, until the country became industrialized, excessive regular drinking was circumscribed both by limited incomes (in the 17th century, a keg (12 liters) of bread wine was estimated to cost as much as one and a half or two cows) as well as traditionalist mores and folk wisdom.

Perhaps it was the beginning of the breakdown in social morale that had become endemic by the 1980′s. Perhaps it was linked to a tipping point in the level of development (half of Russians were living in cities by the 1950′s). Perhaps it was the after-effects of Red Army soldiers who had been given daily 100ml vodka rations during the Great Patriotic War (1941-45), became alcoholics and started dying in ever increasing numbers 20 years later. In any case, mortality rates began to increase dramatically since 1965, reaching epidemic proportions by the 1980′s. To quote Alcohol in Russia by Martin McKee in extenso:

Potentially more reliable figures have been generated outside the USSR by, for example, surveys of emigrants, especially to Israel, although these are problematic as there is evidence that Soviet Jews drank rather less than their Slavic neighbours. Nonetheless, one of the most rigorous studies, although again likely to be an underestimate because it did not include that large volume of alcohol now known to be stolen each year, suggests that consumption more than doubled between 1955 and 1979 to 15.2 litres per person (Treml, 1975). This figure is higher than that recorded for any OECD country (France was highest at 12.7 litres in 1990, although most other countries were in the range 5–9 litres), where data are largely derived from validated surveys of consumption (World Drink Trends, 1992). Also note that Russians tend to binge on hard spirits, while the French consume red wine in frequent moderate doses. Of course, this figure relates to the entire USSR and, for religious and other reasons, there are marked regional variations so levels in the Russian heartland are likely to have been much higher. Other studies of emigré families suggested that alcohol consumption accounted for 15–20% of disposable household incomes. Studies by dissidents and others supported the impression that alcohol consumption was increasing at alarming levels, suggesting, for example, that alcohol accounted for 15% of total retail trade (Krasikov, 1981).

Under Gorbachev, official statistics on a wide variety of topics slowly reappeared, although it was still not possible to undertake or publish research on topics such as alcoholism and social breakdown (Korolenko et al., 1994). The available data included figures on official production of absolute alcohol equivalent which was reported to have increased from 2.2 litres per capita in 1940 to 7.2 in 1985, a rather greater increase than had been assumed in the earlier estimates by Western observers.

However, the level of consumption is only one part of the picture. It is also important to know whether the frequency of drinking and the social context within which it takes place are different from those in other countries. Here, the information is even more fragmentary. Various reports suggest that, by the 1980s, the age at which people began to drink had fallen, that increasing numbers of women and children were heavy drinkers, and in some cities the average consumption among working adults was a bottle of vodka each day (White, 1996).

This pattern is reflected in the extensive evidence, reviewed by White (1996), from newspapers and from local surveys that alcohol consumption was becoming a major social problem. This included reports from a chemical plant that 3.5% of the workforce were confirmed alcoholics, 2.2% showed early signs of addiction, and a further 18.8% were alcohol ‘abusers’, with only 1.4% abstainers. Between 75% and 90% of absences from work were attributed to alcohol. It was suggested that loss of productivity associated with alcohol was the main reason for the failure to achieve the Soviet Union’s 5-year plan in the early 1980s, with estimates that the loss of productiv-ity due to alcohol was up to 20%. There were many letters to newspapers complaining of a lack of government action to tackle excessive consumption.

Refer to the male life expectancy chart above. Notice the slight uptick around 1982, and the much larger improvement from 1985-89? It is not a coincidence. In 1982 ‘action was initiated under Andropov and Chernenko under the general heading of reducing anti-social behaviour’, and three years later a wide range of specific action against alcohol abuse was undertaken – the banning of drinking at workplaces, banning sales before 2pm and in trains and restricting sales to off-licenses and over 21′s. Vodka production was cut and alcohol was banned at official functions (interestingly enough, today, there is noise but no action). Alas, initial successes were undermined by black market moonshine (read: more dangerous) production, while the new climate of perestroika decreased the risks of minor lawbreaking. The project was abandoned in 1988. From 1990 to 1994, the price of alcohol in relation to food fell by a factor of more than 3.
Predictably enough, alcohol consumption soared. Life expectancy plummeted.

Alcohol consumption estimates in litres per year
Look at the mortality trends of the first graph here and notice the remarkable
correlation between alcohol consumption and mortality rates.

Furthermore, we noted in this post that mortality rates were 1) geographically not uniform (lowest in the South and Volga) and were worst amongst 2) less well-educated 3) men. Guess what?

Nine per cent of men and 35% of women reported not drinking alcohol at all. Only 10% of men and 2% of women reported drinking several times per week, but 31% of men and 3% of women would drink at least 25 cl of vodka at one go at least once a month, and 3) 11% of men and 1% of women would drink at least 50 cl of vodka in one session at least once per month. There were large geographical differences, 1) with lowest rates of heavy drinking in the Volga and Caucasus regions and highest in the Urals….Unemployment was strongly associated with heavy drinking.

According to a NOBUS survey in 2003 (see pg.68), more than 50% amongst the poorest quintile of Russians consumed hard alcohol daily, compared with little more than 10% of the richest quintile. Since the poor tend to be less well educated, that’s 2) met.

Since 2002, alcohol consumption has remained extremely high. In 2006, it was an ‘estimated 15.2 litres of pure alcohol per capita each year for over-15s’ (no difference from 2002). Another study found that 44% of male deaths and 20% of female deaths can be attributed to alcohol in those aged 25 to 54, including 72% of homicides, 42% of suicides and 23% of CVD’s – in total, 32% of aggregate mortality, compared with 1-4% in all sampled West European countries. Even in Finland, well known as a nation of hard drinkers, the figure was just 4%.

On the other hand, there have been some positive developments, especially since 2005. The mortality rate fell from 16.1 / 1000 to 14.7 / 1000 by 2007. Death rates from CVD’s fell from 9.1%% to 8.3%% and death from external caused tumbled from 2.2 / 1000 to 1.8 / 1000. Perhaps most crucially, deaths from alcohol poisonings halved, while homicides fell by 30%.

What could have accounted for this? Recent times have seen a rise in national morale, documented here. Burgeoning economic growth has seen real incomes nearly triple in the last eight years and the poverty rate halved. The population, or at least its more connected members, has become more exposed to information on healthy lifestyles. During Putin’s second term, there have been more social investments, like the National Priority Projects (one of which is health), and this trend looks set to intensify under Medvedev. Finally, as we’ve noticed here, younger people are turning to beer – ‘beer consumption has risen from 20 litres per person a year to nearly 80 litres’. Considering that total alcohol consumption under Putin has remained about constant, this means that vodka’s 70% share of Russia’s alcohol consumption in 2001 must have fallen since.

In conclusion, it’s safe to say that alcohol is by far the biggest contributor to Russia’s mortality crisis. On the other hand, Russia, and more particularly working Russian men, pursue lifestyles that are practically optimized for ending them. In 2004, 61% of Russian men (and 15% of women) smoked – one of the highest rates in the world and little changed from Soviet times. (Mass smoking began during and immediately after the Second World War, while mortality began to rise 20 years later). Men smoked an average of 16 cigarettes per day. The Russian diet is ‘characterized by a diet high in animal fat and salt, and low in fruits and vegetables’ and many Russians suffer from high blood pressure and excessive blood cholesterol levels. Most Russians lead a sedentary lifestyle – ‘from 2000 to 2002, 73-81% of surveyed men and 73-86% of women aged 25-64 reported having low-levels of physical activity (CINDI 2004)’. Finally, the healthcare system suffers from a legacy of underfunding (real public health expenditure only overtook late Soviet figures in 2007) and inefficiency.

The general population is aware of the problems. Putin is not too impressed either, as he made clear in his state of the nation address in 2005.

I am deeply convinced that the success of our policy in all spheres of life is closely linked to the solution of our most acute demographic problems. We cannot reconcile ourselves to the fact that the life expectancy of Russian women is nearly 10 years and of men nearly 16 years shorter than in Western Europe. Many of the current mortality factors can be remedied, and without particular expense. In Russia nearly 100 people a day die in road accidents. The reasons are well known. And we should implement a whole range of measures to overcome this dreadful situation.

I would like to dwell on another subject which is difficult for our society – the consequences of alcoholism and drug addiction. Every year in Russia, about 40,000 people die from alcohol poisoning alone, caused first of all by alcohol substitutes. Mainly they are young men, breadwinners. However, this problem cannot be resolved through prohibition. Our work must result in the young generation recognizing the need for a healthy lifestyle and physical exercise. Each young person
must realize that a healthy lifestyle means success, his or her personal success.

Which is why the state has set itself the task of stopping negative natural population growth by 2011 and raising life expectancy to 75 by 2020. The billion dollar question is: will they succeed?

How and to what extent can Russia solve its mortality crisis?

The pessimistic demographers are skeptical of Russia’s ability to solve the mortality crisis any time soon. For instance, according to Eberstadt, achieving rapid improvements in mortality from CVD’s is unrealistic:

With heart disease, in a real sense, today’s “bills” cover “debts” accumulated over long periods in the past. For this reason, trends in deaths from heart disease in any country can never turn on a dime. Even with sensible, well-funded medical policies and wholesale popular embrace of a more “heart-healthy” lifestyle — none of which conditions obtain in today’s Russia — the control and reduction of CVD death rates tends to be a relatively gradual affair.

Furthermore, Russia suffers from ‘negative mometum’ in mortality. Working age life expectancy has been decreasing for forty years straight. In a sense, young Russians today are much ‘older’ than their peers of the same age a generation ago. Two assumptions are made. Firstly, as today’s young people are less healthy than their equivalents forty years back (who are now dying at already very high rates), this implies that when they reach their forties, fifties and sixties, their mortality will be even higher. Secondly, the population continues to get older, as the post-war boomers reach pension age. This creates the conditions for a demographic double wammy that, everything else remaining equal, will further depress life expectancy and massively inflate mortality levels even further. An example of these simplistic trend extrapolation can be seen in this model, according to which male life expectancy will fall to as low as 49 years by 2050. This is what we’d call a Stagnation scenario.

If this ‘debt model’ of national health is correct, and if societal attitudes remain stuck in the past, then Russia should indeed reconcile itself to continuing increases in the death rate and accelerating population decline. Fortunately, there is evidence that the first of the above assumptions is flawed.

Generational mortality for men 1981-2006
Indicates mortality levels for each age group for a given year. Lowest line
correspondsto the 40-44 age group, second lowest to the 45-49 age group in 2006, etc.
Colors track out a particular generation’s demographic history,
e.g. pink is the generation who were 60-64 years old as of 2006.

Take a look the above graph. Firstly, notice how mortality amongst all age groups rise and fall with each other. This implies that that in Russia, the factors leading to high mortality affect all age groups about equally. (If it hadn’t – if for example heavy drinking had only been increasing in the younger generations – then the lines above would have overlapped, or at least gotten closer together, as the younger generations started dying more relatively to the older). This puts into question Eberstadt’s whole ticking time-bomb thesis.

But more importantly, notice how mortality amongst all age groups declined from 2001 to 2006. Let us also note that this period came before the health National Priority Project. Nor did alcohol consumption decline, as we noted (although young people started drinking more beer – but we’re talking about middle-aged people here, and the fall in mortality amongst those in their sixties was if anything greater than in other age groups). There was a small drop in cigarette smoking rates, but benefits from that come with at least a few years’ lag. Yet a tipping point seems to have come at around 2005. Remember the 47% male “probability of dying” rates from 15-60 years in 2005? Well, according to Rosstat, in 2006 they fell to 43%, and fell further in 2007 (judging from the fact male life expectancy increased from 58.9 in 2005 to 60.4 in 2006 and 61.5 in 2007).

There is, however, a factor which explains flunctuations in Russia’s life expectancy much better than any other theory. That is the ratio of alcohol to food prices, as shown below. Notice how all price spikes and dips were associated with troughts and crests in life expectancy, especially pronounced amongst men.

Alcohol / food price ratios and life expectancy

Which takes us to the next part of the discussion. What is the government doing to promote healthy lifestyles, and what should it do?

For that, it is sufficient to look at a typical issue of the bi-weekly Russian demographic journal Demoscope Russia section – plans to raise pensions from 30-35% to 60-65% of wages, general increase in welfare, raising the alcohol-buying age to 21 and banning alcohol and tobacco adverts on transport. Increasing numbers of patients are getting access to hi-tech medical care. Even La Russophobe noticed these efforts, which must mean Russia is doing something right. In other words, all the things done in the West since the 1970′s and which the USSR tried to do in the 1980′s but gave up on.

In 1990, “probability of dying” rates for Russian and Estonian men were similar (32% and 30%, respectively), and both soared by 1995 (47% and 40%, respectively). In the next ten years, however, Estonia’s figure plummeted to 28%, while Russia in 2005 remained at 47%, falling only slightly in the interval. As we’ve noted, however, by 2007 this figure was probably already below 40%. Contrary to Eberstadt’s protestations to the contrary, rapid improvements in mortality stats are possible, and at no great expense if the ‘population-based and high-risk prevention strategies’ recommended here are pursued. The example of Karelia in Finland is illustrative:

The North Karelia Project in Finland shows that major changes in mortality from NCDs can be achieved through dietary changes, increased physical activity, and reduced smoking, serum cholesterol, and blood pressure. Coronary heart disease(CHD) in adults aged 65 years and less fell by about 73 percent between 1970 and 1995. In a recent 10-year period, mortality from coronary heart disease declined by about 8 percent a year. Mortality from lung cancer declined more than 70 percent, mostly due to consistent declines in the proportion of men who smoked (from 52 percent in 1972 to 31 percent in 1997). Data on the risk factors from ischemic heart disease and mortality in Finland suggest that the changes in the main coronary risk factors (serum cholesterol concentration, blood pressure, and smoking) can explain most of the decline in mortality from that disease.

As a result of targeting important high-risk factors for NCDs, all causes of mortality in North Karelia declined by about 45 percent during 1970–95. In the 1980s, these favorable changes began to develop all over Finland, improving life expectancy by 7 years for men and 6 for women. The largest decline in age-specific mortality was reaped by the 35- to 44-year-olds: men in this age group saw an 87 percent decline in mortality from CHD between 1971 and 1995. Men 35–64 saw age-adjusted mortality rates decline from about 700 per 100,000 populationin 1971 to about 110 per 100,000 in 2001. This rate for all of Finland among men in the same age group was about 470 per 100,000 and fell 75 percent. These improvements in life expectancy are correlated with significant declines in the amount of saturated fats consumed, coming mainly from milk products and fatty meat (saturated fatconsumption dropped from about 50 gr/day in 1972 to about 15 gr/day in 1992) and significant reductions in blood cholesterol levels (from about 7mmol/L in 1972 to about 5.6 mmol/L in 1997).

…Data from North Karelia reveal that results from preventionefforts may appear in years rather thandecade—improvements occur some 2-7 years after the elimination of the exposure to a risk factor, and that they are beneficial even for people in older age groups.

This suggests that if the trends explained above continue and people continue jumping up income classes, health improvements are sustainable. There’s a handy chart below showing the effects of decreasing different types of mortality on life expectancy.

Even if the only Improvements were a 40% drop in deaths from circulatory diseases and external causes, average life expectancy in Russia would rise to a respectable 72 years (in line with what happened in Estonia, where life expectancy grew from 67.8 years in 1995 to 73.0 years in 2005). On the one hand, Karelia was just one region; on the other, today’s medical technology is much more advanced than even a decade ago. As such, I think the idea of raising life expectancy to 75 years by 2020 is fulfillable, and that is not even taking into account the emerging technologies of life extension – which should be zealously pursued for both its financial (acturial escape velocity) and more tangible everyday benefits (like being able to live as long as you want).

Talking of which, we now move on to the fun bit – the Transformation scenario. This is an event or series of events which would induce a demographic paradigm shift. In the previous post, we’ve identified the artificial womb as a revolutionary concept for supply-side demographics, which will make the ‘birth rate’ independent of sociological factors. What would be revolutionary for the demographic depreciation rate (death rates)? Continuous and exponential growth in life expectancy. How could that be achieved?

Well, to an extent that is the case already.

Life Expectancy in England & Wales, both sexes, 1541-1998
Life expectancy at birth of male landowners in England between 1200 and 1450 AD,
so not strictly comparable with later, more detailed stats.

As you can see, from a historical perspective life expectancy before the Industrial Revolution was essentially stagnant. There were macro-trends associated with pressure on the earth’s carrying capacity, which drove down life expectancy in the 1200′s and 1550-1750, as well as sudden dips due to chaotic factors (the Black Death in the middle of the 14th century, fluctuations from 1500-1800 due to random climate changes impacting on food production), but on the whole it stayed flat. However, around 1750, there was a turning point, coinciding in time with the Agricultural Revolution. The 19th century saw considerable improvement, while in the 20th century it shot upwards.

Granted, the 1900-1960 growth spurt was mainly due to massive reductions in infant mortality rather than adult longevity increases per se. On the other hand, the former stopped playing a substantial role by 1960, and improvements in life expectancy occured mainly through the lowering of adult mortality rates. Since then, the sum of Western lifestyle and healthcare changes decreased adult mortality and pushed life expectancy up. (In the USSR, as we’ve noticed, healthcare remained stagnant and lifestyles worsened, so life expectancy sloped down).

However, now Russia has rejoined the mainstream of world development and as we’ve pointed out here and here, rapid economic convergence with the First World is likely. In the latter, life expectancy has been rising by around 0.3% per annum since 1970. Serious interest and research is already under way, such as the Methuselah Mouse Prize and Aubrey de Grey’s work on strategies for engineered negligible senescence (SENS).

The seven sisters that Dr de Grey wishes to slaughter with SENS are cell loss, apoptosis-resistance (the tendency of cells to refuse to die when they are supposed to), gene mutations in the cell nucleus, gene mutations in the mitochondria (the cell’s power-packs), the accumulation of junk inside cells, the accumulation of junk outside cells and the accumulation of inappropriate chemical links in the material that supports cells.

For more information, read the above Economist article, the wiki entry and a related collection of articles. Unfortunately, however, these technologies are not going to be making a truly revolutionary impact demographically any sooner than in about three decades (10 years to perfect them in animal experiments; another 10 to conduct the necessary human experiments; the final 10 to bring them into mass usage).

Nonetheless, the potential already exists today to radically prolong life expectancy.

Improvements in lowering rates of mortality attributable to alcohol to decent levels will reduce them by maybe 25%. Lowering tobacco usage to normal Western levels of 20-25% and environmental measures could reduce it by another 10%, while better healthcare could account for another 20%. This would lower Russia’s mortality rate from 14.7 / 100,000 to 8.9 / 100,000, which is comparable to the US (a country whose median age is about the same as Russia’s).

The Myth of Economic Collapse due to Ageing Population

According to a Stagnation (extrapolation of today’s fertility and age-specific mortality trends, which sees Russia’s population falling by 12% to 2025), the proportion of population aged 65+ will increase from 12% to 18% – but the latter figure is actually equal to Estonia’s percentage today, whose main problems today are purely macroeconomic (big CA deficit) rather than entitlements. The World Bank’s 15th Russian Economy Report itself admits this:

But growing older does not have to mean growing slower. Aging is not a stop sign for growth – if Russia enacts policy reforms that sustain productivity growth. Changes in labor markets are not immutably determined by demographic legacies. Productivity improvements are the core predictor of growth, so measures to improve labor productivity would swamp any “quantity” effects of a smaller labor force. In fact, in recent years, growth decomposition exercises show that in Russia labor productivity growth has been the single greatest contributor to increases in per capita income.

Considering that the gap between (high) human capital and (low) GDP per capita is so great in Russia, productivity growth should continue to be buoyant for the foreseeable future. Furthermore, considering that in the future older Russians will be both healthier and more educated, an ageing workforce could be counteracted by increased labor participation of the older cohorts in the economy.

Is Russia facing an AIDS Catastrophe?

According to Eberstadt’s ‘Intermediate Epidemic’ scenario in The Future of AIDS, there will be a cumulative total of 13mn AIDS cases in Russia by 2025, 9mn would have died and life expectancy will be down to just 63 years. Other media have also homed in on the apocalyptic dimensions of Russia’s AIDS crisis.

According to government figures, the number of new cases peaked in 2001 at 87,000, but has since stabilized at around 40,000-50,000 per year from 2003 on. As of 2007, there were 402,000 cumulative AIDS cases. However, although Russia’s AIDS epidemic was at first concentrated amongst injecting drug users (IDU’s), ‘HIV-infection is starting to spread more intensively heterosexually’. The share of women diagnosed with HIV every year increased from 20% in 2001, to 38% in 2004 and 44% in 2006. However, other assessments of the share of Russia’s HIV prevalence are usually about three times higher than official figures. HIV prevalence among pregnant women in Russia was 0.3% in 2004 and 0.4% in 2005 and 2006.

But there are good points too. Since 2006, the federal government has started spending huge amounts on the problem. Syphilis and hepatitis B have fallen sharply from their respective 1997 and 1999 peaks. The incidence of tuberculosis peaked in 2001 at around 95 / 100,000, although the fall hasn’t been as dramatic (82 / 100,000 in 2007). According to official sources, AIDS monitoring coverage in Russia consists of 20% of the population, including all the high-risk groups, so perhaps official figures aren’t such big underestimates after all.

The reality is that I simply don’t know enough about this to make a judgement either way, but then again, it is not even known why AIDS exploded in sub-Saharan Africa but remained contained everywhere else. If readers can point to more concrete information on this topic (AIDS in Russia) it would be much appreciated.

Now for Demographics III – Face of the Future

(Republished from Sublime Oblivion by permission of author or representative)
 
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What are the reasons behind the wealth and poverty of nations? Since this question has exercised the minds of thinkers from Adam Smith to David Landes, Jared Diamond and Richard Lynn, I decided to take a look at it myself. I came to the conclusion that while geography, macroeconomic policies, resource windfalls and the microeconomic environment do play important roles, by far the most important factor is the state of a country’s human capital – things like literacy rates, school life expectancy and performance on international student assessments.

This is not a new idea. A Goldman Sachs report, Dreaming with BRICs, noted that:

Many cross-country studies have found positive and statistically significant correlations between schooling and growth rates of per capita GDP—on the order of 0.3% faster annual growth over a 30-year period from an additional one year of schooling.

However, I think education is much more central to this. The problem with using years of schooling as a yardstick is that in many middle-income countries, like Argentina, Turkey or Brazil, the amount of schooling is converging to that of the developed world, but the quality isn’t. This is attested to by their performance on international student assessments like PISA. For instance, in the 2006 PISA Science assessment, only 15.2% of Brazilians were at Level 3 or higher (the threshold for moving beyond purely linear problem-solving), compared with 47.6% of Russian, 51.3% of American and 66.9% of Australian students. Is it really then surprising to discover that from 1997 to 2007 purchasing power GDP per capita in Brazil and Russia, both medium-income countries, has grown at 1.3% and 6.0%, respectively, i.e., that Russia is playing the game of economic catch-up much more successfully?

I collected educational statistics on 65 countries and used a formula to work out a Human Capital Index (HCI), relying on three main stats – the literacy rate, PISA/TIMSS/PIRLS performance and tertiary attainment. I then compared this with their purchasing power GDP per capita and its average growth rate for 1997-2007. The results are in the table below.

Source: CIA World Factbook for literacy rates, GDP per capita, 2007 GDP per capita growth; PISA 2006 executive summary for Maths, Science, Reading stats (note: China, India are guessed); eighth-grade Maths, Science performance from Highlights from TIMSS 2003; fourth-grade Reading from PIRLS 2006; tertiary enrolment, 1997-2006 GDP per capita growth from World Bank. M1 and M2 refer to the mean of a country’s scores across PISA and TIMSS/PIRLS, respectively, divided by average across all participating countries; if there’s a figure for both M1 and M2, then M3 = (M1+M2) / 2; if not, M3 = M1 or M2, as appropriate. HCI = literacy * M3 * tertiary enrolment ^ (1/3). Figures in italics are those for which I’ve had to use other sources.

The chart below shows how closely educational capital and wealth correlate in 2007. We see an inverse square relationship or possibly a kind of S-curve with two inflection points.

Let us note a few things:

1. Notice that out of the 30 countries with an HCI below 0.80, with the marginal exception of Saudi Arabia, not a single one had a GDP per capita exceeding 20,000 $. In fact, this chart understates the pattern, because the detailed educational stats produced by programs like PISA and TIMSS typically don’t include low-income countries, where human capital is going to be typically very low.

2. Practically all outliers can be explained by one of two things – resource windfalls and socialist legacies. Among all countries with HCI’s of less than 0.80, the top outliers are all big oil or minerals exporters. This artificially inflates their GDP’s, varying in extent from Iran, South Africa and Mexico (where oil and minerals production co-exists with a burgeoning manufacturing base) to Saudi Arabia and Botswana (which are dominated by hydrocarbons and diamonds, respectively). The latter are green and the former are cyan/green. The reason Norway is the world’s most affluent country also comes down to the oil boost (its human capital is unremarkable by average OECD standards).

3. Similarly, the vast majority of low outliers come from the former Communist bloc. East European former satellites are red, post-Soviet countries are dark red and Russia is black. Note how far off the vast majority of them are from where their HCI seems to indicate they should be (the exceptions being Azerbaijan, the Czech Republic, Slovakia and to a lesser extent Bulgaria and Romania). Poland, Hungary and the post-Soviet world are currently well below their potential. The explanation is that these countries have spent much of this century languishing under central planning with all its inefficiencies and contradictions and thereafter being subjected to a decade-long period of brutal restructuring, before normal economic growth could again resume towards the mid to late 1990′s. Meanwhile, the Communist emphasis on education payed off bigtime, as human capital is comparable to that of much richer countries. It is worth noting also that the gap between potential and actual is greatest in the former Soviet bloc, presumably because the socialist legacy was strongest there (no folk memory of pre-WW2 capitalism, no Visegrad-like experiments with creeping capitalism, etc). The big exception is Azerbaijan, which has an oil windfall; Russia, the other country in a similar position, doesn’t replicate this because its potential (based on human capital) is much higher – its socialist legacy outweighs its resource windfall.

Below is a table with three indicators for each country – their actual GDP, potential GDP based on average macroeconomic/microeconomic policies and potential GDP based on optimal policies.

Potential and Actual GDP per capita (2007 $)
Actual Mean Potential
Max Potential
Georgia 4,200 15,000
24,000
Latvia 17,700 38,000
48,000
Moldova 2,200 17,000
26,000
Poland 16,200 33,000
44,000
Russia 14,600 35,000 49,000

4. There are five other low outliers – Slovenia, Taiwan, New Zealand, Finland and South Korea, of which the latter two are particularly big. The explanations aren’t as clear-cut here, but I’ll throw a few around. Finland is a northern country covered in permafrost that inflates construction, energy and transport costs, while New Zealand has a small population (i.e. a small market) far removed from the arteries of world trade. Slovenia has a socialist legacy. Taiwan and Korea are very densely populated, which impacts negatively on the productivity of the retail and construction sectors. Singapore is a top outlier, much richer than warranted by its human capital – I suppose that’s because of its status as a major trade hub. Not as convincing? I kind of agree. The above explanations do not have the all-encompassing unity and simplicity of the socialist legacy or the resource windfall. Which is why it’s time for us to talk about economic growth rates.

Speaking of which – see below.

Countries are marked by GDP / capita growth rates from 1997 to 2007. The colors go as follows: white (1.0-1.9%); yellow (2.0-2.9%); orange (3.0-3.9%); red (4.0-5.9%); dark red (6.0%-7.9%) and black (8.0%-14.9%). Also, GDP per capita figures (on the y-axis) are for 1997 – this is because what we are interested in is the influence of education levels on future growth, which we know for the period from 1997 up until today. Unfortunately, educational stats for 1997 will be much less comprehensive (PISA and TIMMS embraced much fewer countries then), plus it would take a lot of time digging them up – hence I made a rough assumption that they were the same as for 2007. Actually, the HCI is based on a collation of different stats from the 2000-2005 period).

One thing that immediately stands out is how countries that are below their potential tend to have much higher growth rates than those on or above their potential. In other words, excluding chaotic and cyclical trends, economies tend to a steady state depending on the level of their human capital. Thus, the blue and cyan groups above tend to have equal growth in GDP per capita (although since the population grows in most cyan countries, absolute GDP growth will be larger), meaning that the cyan countries aren’t converging and should not converge economically, no matter their degree of openness or transparency.

The most glaring exceptions are typically due to oil booms and the like, which not only increase GDP in of themselves but also fuel consumption splurges. The purple group is the most interesting, which mainly encompasses relatively well-educated post-Communist countries. Unshackled from the chains of socialism, they are now growing very quickly due to the huge ‘potential gap’ that exists between their human capital and development level. (Picture this as a question of heat diffusion – the greater the difference, the greater the pressure to close it). The green countries must massively increase their investment into education if they want to join the development bandwagon.

Now for some questions and answers:

What does this mean for development strategies?

Policy-makers must realize that education is the elixir of economic growth. Individual incomes grow due to the introduction of new technologies, which increase total factor productivity. (Granted, it is possible to increase labor participation rates and increase savings – but only up to a point. There are only so many people in any workforce, while investment is subject to diminishing returns. The only long-term development model is continuous technological adaptation, which is recognized by the exogenous growth model). However, a country’s ability to take advantage of technology diffusion is governed by its educational levels (e.g., the illiterate will have little need for a computer).

It is not enough, however, to enroll every annual cohort, give them ten years of public schooling and consider the task done, as is the pattern in much of the developing world today. School life expectancy in much of Latin America, the Middle East, South Asia and China might be drawing close to Western standards – the same cannot be said, however, for its quality, as these international student assessments reveal. Secondly, tertiary enrollment there (15-30%) remains far below Western and post-Communist standards (50-80%). To bridge the gap into society-wide participation in the ongoing technological revolutions, developing countries must make efforts to remedy the two above problems. Massive labor and capital infusions will only take you so far. Once a country achieves a GDP per capita of around 5,000 – 10,000$, growth becomes a matter of increasing productivity in the services and higher-tech manufacturing sectors. This requires annual cohorts of well-educated workers.

I am not denying that there are many other conditions that have to be fulfilled for economic convergence to happen. Goldman Sachs, for instance, has compiled a Growth Environment Index that takes into account thirteen factors: inflation, government deficits, external debt, investment, openness, years of schooling, life expectancy, political stability, rule of law, corruption and Internet, PC and telephone penetration levels. I think this approach misses the central point of development, however. An honest and well-run state simply reduces barriers to an economy reaching its maximum potential level of development; if the human resources are lacking, it will not converge to Western levels.

To illustrate this, let’s take a few middle-income countries, say, Chile and Estonia – both have solid macro-economics and perform respectably in rankings such as economic freedom, ease of doing business and corruption perceptions. Nonetheless, Chile’s per capita growth rate for the past ten years has been a sluggish 2.6%, compared to Estonia’s tigerish 7.7%. Why? I suspect it has something to do with Chile scoring 0.69 and Estonia 1.00 in my Human Capital Index. Russia, rarely cited as a paragon of economic freedom but with a good HCI of 0.94, outperformed Chile with growth of 6.0%. I suspect that the 1-2% difference from Estonia is due to the greater barriers to technology/productivity diffusion in Russia. (Incidentally, the reason the late USSR grew slowly was because its human capital was immensely burdened by the planned economy).

The same goes for the arguments of geographic determinism. Yes, being landlocked and frozen, or suffering the scourges of endemic debilitating diseases in tropical climes, tends to negatively affect development. I don’t see, however, how these disadvantages are different in quality from factors like macroeconomic incompetence or failing institutions.

How will this affect the world’s future?

In my previous Core Article Towards a New Russian Century?, I identified economic convergence, doubly exponential growth in IT and climate change as key drivers of world geopolitics in the decades ahead. On the topic of the former, I wrote:

Of course, it’s not sufficient merely to be behind to catch up. One must also have the human capital and physical infrastructure in place. One of the best proxies for human capital is education. Now as we can see from the info above, Russia’s (and eastern Europe’s) educational profile is of a First World character. Hence it is likely that the region’s impressive post-millennial growth will be sustained, resulting in convergence with west European countries by a 2020-30 time frame.

I stand by this prediction. According to the data, Latin America, the Middle East and South Asia all have educational systems that leave much to be desired, and little sign of fundamental change can be observed (there is no discernable improvement in Mexico’s and Brazil’s PISA scores from 2000 to 2006; tertiary enrolments in the above regions are increasing at a glacial pace).

India is still plagued by illiteracy and as late as 2005 a tenth of the youth cohort didn’t receive primary education, 43% didn’t receive secondary and only 11% received a higher-level education (an unimpressive over 6% in 1991), according to the World Bank. India will be a Great Power, but its few economic/technological centres will remain islands of prosperity amidst a sea of backwardness.

China has a decent school life expectancy, literacy rate and enrollment rates (universal primary and 74% secondary), but its tertiary enrollment ratio is low at 20% in 2005. (Nonetheless, it has increased very rapidly, from 3% in 1991, and if the experience of other countries is anything to go by, a concerted effort could see their rates rise to developed-country standards within the next twenty years). I have no idea how average Chinese students would score on the PISA tests (comparing them to Hong Kong or Macau is a pointless exercise, because of the vast disparity in development), so I guessed 420. If so, then China’s current 10% growth rates should soon moderate to around 5% – as my second graph shows, it is a) fast approaching its potential and b) it’s hampered by bureaucracy and corruption. Today most Chinese growth, unlike in east-central Europe, comes from infusions of labor and capital rather than productivity improvements – growth which could experience a severe and protracted slowdown once the surplus labor pool in the countryside is expended and investment rates are hit by a financial crisis, as happened with the other east Asian tigers after 1997.

In conclusion, China seems set to do considerably better than other developing regions of the world (Latin America, Middle East, South Asia and Africa), but will still be very far from converging to advanced industrial levels in 2025. Meanwhile, eastern Europe will converge with western Europe, while Finland, Korea and Estonia may become some of the richest countries in the world.

How did you work out the Human Capital Index?

Explained beneath the big table. Basically, literacy rate * international student assessment scores mean average * tertiary enrollment ^ (1/3). The reasoning is that a) you must be literate, at a minimum, to participate in a modern economy, b) international student assessments give a clue as to the quality of those who are educated (better than school life expectancy) and c) tertiary education improves human capital further, though not to the same absolute extent as elementary schooling – hence we take the cube root of that figure.

I am aware that in an ideal situation, we would make a sample representing everyone in the country take a skills test to gauge human capital; since we don’t have that luxury, we must rely on available statistics, two of which (test scores and tertiary enrolment) apply mostly to the newest cohorts entering those countries’ labor forces.

What has this got to do with Russia?

When I say things like “Russia will have a GDP per capita of 30,000$ by 2020″, I work by a set of assumptions and beliefs that may not be entirely clear to the casual reader of this blog, particularly the Russophobe variety which believes Russia’s economy is an oil bubble about to pop like a balloon. Which is understandable, given that the Western MSM’s discourse on Russia’s prospects is mostly negative.

Nonetheless, some facts must be acknowledged. The government since 1998 has handled the economy well, balancing inflation and ruble depreciation by maintaining fiscal discipline. Since 2006, they have embarked on large-scale basic (agriculture, housing, health and education) and strategic (nanotechnology, venture capital) investment programs. Yes, the bureaucracy is unwieldy, corruption is a problem and life is hard for small businesses, but as the last few years have showed, these problems are not fatal – at worst, they have shaved off 1-2% of annual GDP growth, and in any case the Baltics are the exception rather than the rule in the post-Soviet space. Most importantly, Russia’s human capital is of First World standards – and as we’ve argued here, this is the key component of development.

If anything, it would be exceptional if Russia didn’t converge to west European levels of development by the 2020′s.

(Republished from Sublime Oblivion by permission of author or representative)
 
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Anatoly Karlin
About Anatoly Karlin

I am a blogger, thinker, and businessman in the SF Bay Area. I’m originally from Russia, spent many years in Britain, and studied at U.C. Berkeley.

One of my tenets is that ideologies tend to suck. As such, I hesitate about attaching labels to myself. That said, if it’s really necessary, I suppose “liberal-conservative neoreactionary” would be close enough.

Though I consider myself part of the Orthodox Church, my philosophy and spiritual views are more influenced by digital physics, Gnosticism, and Russian cosmism than anything specifically Judeo-Christian.