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But first, a note about those two articles published here this morning: As I hope many (if not all) of you guessed, it was a scheduling accident. In particular, as regards the piece “Russia’s Economy Is Now Europe’s Largest,” this is what I expected to see once the World Bank released its PPP-adjusted GNI figures for 2012 (it always does this in April, but for whatever reason it has been late this year). Russia is already very close to Germany as of 2011, and due to a planned harmonization of its GDP counting methodology with international standards – i.e. the introduction of imputed rent – it is projected to automatically increase by 5% in addition to its normal growth. Hence the title: It’s something that’s likely to happen, hence I wrote that title with “see data” for text and scheduled it for publication on April 30th, on the assumption that the World Bank will have released its new data by then and I’d have time to write the actual post. But the World Bank dallied and I forgot about the scheduled publication date.

Now, onto the demography. In contrast to the first 3 months of 2012, when both mortality and birth rates saw big improvements, they have now gone into reverse for the same period in 2013. Namely, births have decreased by 0.8%, deaths have also risen by 0.8%, and the rate of natural decrease widened from 35,000 in 2012 to 43,000 in 2013. Mark Adomanis notes that this is a “pretty worrying development,” with “2013 is shaping up to be the year in which Russia’s streak of improving demography comes to an end.”

That is true enough if current trends continue. The operative word being “if.” But as I cautioned in my last post, extrapolating from a month or even a few months is a risky proposition, given the sharp seasonal swings in mortality. This is particularly true for extrapolations from winter months, in which there is an additional strong independent factor in the form of the influenza/pneumonia situation (which, on average, is worse during colder winters) and climatic factors (e.g. all else equal, Russians tend to drink more during colder winters). Now we know that this year’s has been exceptionally severe in Russia, so let’s look at the detailed breakdown for causes of mortality: -3% for infectious diseases, -1% for cancers and heart/CVD diseases, +18% for pulmonary diseases (e.g. pneumonia), no change in digestive tract diseases, -5% for deaths from external causes (but a +1% rise in alcohol poisonings), and +14% in deaths from sundry causes.

Now on the surface this now looks quite a lot better. Despite a harsh winter, deaths from heart disease (the biggest killer in Russia) continued to decline, as did deaths from external causes (which disproportionately affect the young and thus have an especially negative impact on life expectancy). The additional 3,000 increase in deaths from pulmonary diseases will have mostly accrued to elderly deaths from pneumonia, most likely due to the season swings typical of its epidemiology. The major, overriding question is this: What are “deaths from sundry causes” (прочие причины смерти)? I don’t know. But we can speculate. In old age, it is frequently unclear which of a panoply of ailments finally do someone in. And harsh winters are associated with mortality rises, especially among the elderly. Perhaps a large part of that 7,000 rise in deaths from “sundry causes” were simply a result of more elderly dying due to general winter causes and not being precisely classified.

In any case, I submit that three months is too short a time period to make any meaningful conclusions as to the final trajectory for the year. Again, I refer to Sergey Zhuravlev’s graph as a graphic demonstration of why that is so. Russia’s improvements in mortality are not a steady process, to the contrary they look like a series of intermittent sharp declines followed by steady periods of up to a year’s duration.

Then there is the decline in birth rates. To be fair, it is increasingly unrealistic to expect further rises in crude birth rates, because the “echo effect” is real (if often overstated, because of a failure to adjust for birth postponement/rising age of mother at childbirth). Russia’s total fertility rate started plummeting around 1991; the girls born then are now in their early 20′s. The average age of the mother at childbirth is now about 27 and rising, and up by 2 years since the 1990′s. Nonetheless, despite that counteracting effect, the fact is that the demographic “chasm” of the 1990′s continues to gain on women at their peak fertility (even if the age of peak fertility continues to increase) and it is a deep chasm, with women of the age of 5-19 making up just 61% of women of the age of 20-34 in 2012. So as there will be accumulating downwards pressure from changes in the age structure until the late 2020′s/early 2030′s we can now expect crude birth rates to start consistently falling from year to year.

(Republished from Da Russophile 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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In my previous demography post, I argued that for all intents and purposes, Russia’s “demographic crisis” can be reasonably argued to have ended. Population growth is now consistently positive since 2009, and as of last year, the country’s natural decrease was a mere 131,000. This is a massive improvement over the 500,000-1,000,000 annual natural decrease seen in 1993-2006.

The latest figures continue to beat all expectations (even my relatively optimistic ones) in the first three months of this year. The crude birth rate has risen by 6.5% over the same period last year, implying a c.8% rise in the total fertility rate (slightly higher since the ratio of women of childbearing age is now falling). Projecting it for the rest of the year – a risky assumption, granted, but this is back of the envelope stuff anyway – would give a TFR of about 1.73 for 2012 (from c.1.60 in 2011). This would make it broadly comparable to the Netherlands (1.79), Iran (1.70), Canada (1.67), and Estonia (1.62); below the US, France, the UK, and Scandinavia (1.8-2.0); and above Germany, the Med, Japan, South Korea, Poland, China, and the Christian ex-USSR (1.2-1.5). It is time to stop thinking of Russia as a low-fertility country; it is firmly in the middle of the pack among industrialized countries. It is particularly noteworthy that whereas Russia is frequently described as the sick man of the BRIC’s (in demographic terms), it is now probably closer to Brazil (1.86) than it is to China (c.1.4-1.5).

The numbers of deaths fell by 3.3%, and this is a trend that is likely to persist as excise taxes on alcohol and tobacco are raised at a more rapid pace now that the elections are done with. As a result, the natural population loss in the first quarter this year is now only 35,000 relative to 79,000 last year. There is now a distinct chance that natural population growth will actually be positive this year – linearly extrapolating from this quarter (which is of course an unreliable method, but whatever) would give 1,793,828*1.065 births and 1,925,036*0.967 deaths = 1,920,426 – 1,861,509 = c.60k increase – although I’d still give it less than even odds. As graphs are worth many words…

January and February were both record-breaking months for post-Soviet births, continuing on from record birth numbers in August-September and November-December in 2011.

Monthly deaths have also set new records this year for both January and March, following on from remarkable improvements throughout 2011 as a whole – when new records were the rule rather than the exception.

As you can see above, Russia’s natural population growth was essentially stable for the second half of 2011. If current trends continue, there may be significant natural population increase in the second half of 2012.

For more of these graphs stretching to 2002, see the old post by Sergey Slobodyan on this blog: Russia’s Demographic Resilience II.

Needless to say, overall population growth is absolutely certain, because of immigration (which increased to 320,000 last year).

Above is a long time graph of births and deaths by months from 2006 to today. A linear extrapolation (very crude) will see the two cross sometime in mid-2012.

Here is a graph of population natural increase. The pattern again is clear; it has virtually edged up to zero.

The structure of deaths is also moving in a highly encouraging direction, with improvements in “deaths from vices” (suicide, homicide, alcohol poisoning) being the most notable. That is good because these deaths accrue to younger people, so the positive impact on life expectancy (not to mention their especially tragic nature) is particularly strong. In the first three months, deaths from alcohol poisoning fell by 23% (so they are now as low as during the height of Gorbachev’s anti-alcoholism campaign), homicides fell by 10%, and suicides fell by 5% (and are now lower than they’ve ever been since at least 1970). The only downside was a 3% increase in deaths from transport accidents, but this is presumably a function of more vehicle ownership given the improvements in other areas.

A potentially serious development, but one that isn’t, is an increase in the infant mortality rate from 7.1/1000 to 8.4/1000 in the first three months of this year relative to the same period last year. That is because this year Russia switched to the WHO definition of infant mortality as the share of life births, as opposed to the old system that excluded very premature babies for the first 7 days of their lives from the statistics. The old system underestimated the infant mortality rate by 22%-25%, so an 18% increase now is actually a modest improvement in real terms.

Some conclusions and predictions to round off the post.

  • Russia should no longer be considered a low-fertility country (by industrialized world standards), though it is still a high-mortality one.
  • This year, 2012, will see further improvements, with life expectancy rising to about 71.0-71.5 (barring a repeat of 2010′s monster heatwave or other environmental cataclysm); TFR rising to around 1.70; close to zero natural population growth (though probably still slightly negative, maybe -50,000); and substantial overall population growth once immigration is accounted for.
  • The Western media will continue shrieking about the Dying Bear and variations thereof.
(Republished from Da Russophile by permission of author or representative)
 
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It’s one thing if Western journalists and Yukos PR henchmen – if there is indeed any difference – shill for all they’re worth about the travails of Khodorkovsky, the former oligarch doing time for fleecing the Russian Treasury to the tune of billions of dollars, charges he sooner boasts about than denies when given the opportunity to address Russians on national TV. It’s quite another when many ordinary Russians begin to lap up their lies, with a disturbing 10% describing him as a political prisoner in a recent VCIOM poll, and opinions are split 50/50 on a Presidential pardon. Congrats to the PR team, I guess.

Fortunately, at least some court systems still keep their judgments partitioned from the demands of self-interested businesspeople, their PR hacks, libertarians who believe that money should be able to buy a Not Guilty verdict, liberals operating under the delusion MBK is a popular and legitimate political opponent of Putin, etc. According to four (by my count) judgments to date, the European Court of Human Rights (ECHR) is one such institution. The Yukos team managed to get their cases heard at Europe’s highest court of appeal, and they decided that – barring a few administrative irregularities, for which Khodorkovsky was awarded a paltry $35,000 – there was no proof for any of his allegations that the case was politically motivated. This is despite the fact that the ECHR can in no sense be having a Russian government-friendly stance, given the numbers of judgments that have gone against it there.

To wit, despite the swarms of high-profile lawyers batting for Khodorkovsky, they could (1) neither prove that Khodorkovsky didn’t engage in tax evasion – to the contrary, the ECHR sided with Russia’s arguments; (2) not could they evidence their claims that it was a case of selective prosecution, i.e. that MBK’s schemes were prevalent at the time; indeed, the ECHR judges even went so far as to point out that rich businesspeople like MBK have the position and incentive to claim that prosecutions are politically motivated, whereas courts of law need concrete evidence as opposed to the opinions and aspersions that journalists and politicians are free to indulge in.

Nonetheless, op-eds of the WSJ, FT, etc. continue to gloss over the ECHR judgments where they do not ignore them altogether, and paint Khodorkovsky as some kind of principled human rights champion standing up to the dark Chekists who surround Putin (this despite that his right-hand security man Pichugin was convicted to life for contract murders). Masha Gessen, a particularly mendacious piece of work even by the sordid standards of Western journalism on Russia, claimed that the ECHR judgments could even be “read as mandating [Khodorkovsky's] release” in a 5 page hagiography for Vanity Fair.

Since these people seem to feel safe in assuming that no-one will ever read the ECHR judgments (depressingly, it seems to be a valid assumption), I am doing what I can to expose their lies by reprinting the most relevant parts here. Bits of particular interest are bolded.

CASE OF KHODORKOVSKIY v. RUSSIA, 28/11/2011 [AK: As regards whether MBK's prosecution is politically motivated]

VIII. ALLEGED VIOLATION OF ARTICLE 18 OF THE CONVENTION

249. The applicant complained under Article 18 that the State had used the criminal prosecution for a political end and in order to appropriate the company’s assets. Article 18 of the Convention provides:
“The restrictions permitted under [the] Convention to the said rights and freedoms shall not be applied for any purpose other than those for which they have been prescribed.”

A. The parties’ observations

250. The Government submitted that the applicant’s allegations that his criminal prosecution had been politically motivated were not supported by the materials of the case. The Government referred to the judgment delivered in the applicant’s case as proof that the charges against him were serious and genuine. They also described the events which had preceded the start of the investigation into the activities of the Yukos management, especially with regard to the Apatit case.

251. The applicant maintained his allegation that his criminal prosecution had been politically motivated. The applicant submitted that the above materials were powerful evidence of ulterior purposes contrary to Article 18. He had at the very least adduced “prima facie evidence pointing towards the violation of that provision” (Oates v. Poland (dec.), no. 35036/97, 11 May 2000), which the Government had entirely failed to address. The fact that he had been convicted in no way precluded improper motives in bringing the charges. Further, as a matter of Convention law, it was immaterial whether there was evidence justifying the bringing of the prosecution, if, as a matter of fact, it was brought for “other purposes” (see Gusinskiy v Russia, no. 70726/01, 19 May 2004). Indeed, the fact that he had received a long sentence supported the inference of political motivation. The travaux préparatoires for Article 18 indicated that the drafters of this provision were concerned to ensure that an individual was thereby protected from the imposition of restrictions arising from a desire of the State to protect itself according “to the political tendency which it represents” and the desire of the State to act “against an opposition which it considers dangerous”. The applicant maintained his argument that his arrest and consequent detention on 25 October, just a few weeks before the Duma elections on 7 December 2003 and shortly before the completion of the Sibneft/Yukos merger, had been orchestrated by the State to take action against an opposition which it considered “dangerous”, contrary to Article 18.

252. The applicant asserted that those activities had been perceived by the leadership of the country as a breach of loyalty and a threat to national economic security. As a counter-measure the authorities had undertaken a massive attack on the applicant and his company, colleagues and friends.

253. In support of his allegations the applicant submitted reports from international and Russian media, various governmental and non-governmental organisations, the PACE report “On the circumstances surrounding the arrest and prosecution of leading Yukos executives” (published on 29 November 2004 by Mrs Leutheusser-Schnarrenberger, the Special Rapporteur for the Parliamentary Assembly of the Council of Europe), the US Senate resolutions on this subject, European Parliament reports, documents of the UK House of Commons, decisions by the UK courts in cases of extradition of several former Yukos managers to Russia, and decisions by the Cypriot, Dutch, and Swiss courts to the effect that the prosecution of the applicant was politically motivated. In particular, the applicant referred to the words of the Swiss Federal Tribunal, which in August 2007 found that the facts, if analysed together, “clearly corroborate the suspicion that criminal proceedings have indeed been used as an instrument by the power in place, with the goal of bringing to heel the class of rich ‘oligarchs’ and sidelining potential or declared political adversaries”. The applicant also quoted public statements by several high-ranking Russian officials who had acknowledged that “the Yukos case” had political overtones (Mr Gref, Mr Illarionov, Mr Shuvalov, Mr Mironov, Mr Kasyanov and some others). The applicant produced witness statements by several former Yukos managers. He further referred to his submissions within the case Khodorkovskiy v. Russia (no. 2), no. 11082/06, which contain a more detailed analysis of his political activities and business projects.

B. The Court’s assessment

254. The Court reiterates that it has already found that, at least in one respect, the authorities were driven by improper reasons. Thus, the Court found that the applicant had been arrested in Novosibirsk not as a witness but rather as a suspect. However, the applicant’s claim under Article 18 is different from his grievances under Article 5. The applicant maintained that the entire criminal prosecution of Yukos managers, including himself, had been politically and economically motivated. The Court reiterates in this respect that “Article 18 of the Convention does not have an autonomous role. It can only be applied in conjunction with other Articles of the Convention” (Gusinskiy v. Russia, no. 70276/01, § 75, ECHR 2004-IV). In the light of the above the Court will consider the applicant’s allegations under Article 18 of the Convention in conjunction with his complaints under Article 5 of the Convention, cited above.

255. The Court reiterates that the whole structure of the Convention rests on the general assumption that public authorities in the member States act in good faith. Indeed, any public policy or an individual measure may have a “hidden agenda”, and the presumption of good faith is rebuttable. However, an applicant alleging that his rights and freedoms were limited for an improper reason must convincingly show that the real aim of the authorities was not the same as that proclaimed (or as can be reasonably inferred from the context). A mere suspicion that the authorities used their powers for some other purpose than those defined in the Convention is not sufficient to prove that Article 18 was breached.

256. When an allegation under Article 18 is made the Court applies a very exacting standard of proof; as a consequence, there are only few cases where the breach of that Convention provision has been found. Thus, in Gusinskiy v. Russia (no. 70276/01, § 73–78, ECHR 2004-… (extracts), the Court accepted that the applicant’s liberty was restricted, inter alia, for a purpose other than those mentioned in Article 5. The Court in that case based its findings on an agreement signed between the detainee and a federal minister of the press. It was clear from that agreement that the applicant’s detention was applied in order to make him sell his media company to the State. In Cebotari v Moldova (no. 35615/06, §§ 46 et seq., 13 November 2007) the Court found a violation of Article 18 of the Convention in a context where the applicant’s arrest was visibly linked to an application pending before the Court. However, such cases remain rare (see, as an opposite example, Sisojeva and Others v. Latvia [GC], no. 60654/00, § 129, ECHR 2007-II). Particularly, the Court notes that there is nothing in the Court’s case-law to support the applicant’s suggestion that, where a prima facie case of improper motive is established, the burden of proof shifts to the respondent Government. The Court considers that the burden of proof in such a context should rest with the applicant.

257. In the case at hand the applicant referred to various sources which confirm his allegations of “improper motive”. First, he invited the Court to consider the facts surrounding his business and political activities, as well as the major policy lines adopted by the President’s administration at the relevant time. Indeed, those facts cannot be ignored. In particular, the Court acknowledges that the applicant had political ambitions which admittedly went counter to the mainstream line of the administration, that the applicant, as a rich and influential man, could become a serious political player and was already supporting opposition parties, and that it was a State-owned company which benefited most from the dismantlement of the applicant’s industrial empire.

258. On the other hand, any person in the applicant’s position would be able to make similar allegations. In reality, it would have been impossible to prosecute a suspect with the applicant’s profile without far-reaching political consequences. The fact that the suspect’s political opponents or business competitors might directly or indirectly benefit from him being put in jail should not prevent the authorities from prosecuting such a person if there are serious charges against him. In other words, high political status does not grant immunity. The Court is persuaded that the charges against the applicant amounted to a “reasonable suspicion” within the meaning of Article 5 § 1 (c) of the Convention.

259. Nevertheless, the combination of the factors mentioned above have caused many people to believe that the applicant’s prosecution was driven by the desire to remove him from the political scene and, at the same time, to appropriate his wealth. The applicant strongly relies on those opinions; in particular, he relies on resolutions of political institutions, NGOs, statements of various public figures, etc. The Court took note of those opinions. However, it must recall that political process and adjudicative process are fundamentally different. It is often much easier for a politician to take a stand than for a judge, since the judge must base his decision only on evidence in the legal sense.

260. Finally, the Court turns to the findings of several European courts in the proceedings involving former Yukos managers and Yukos assets. Those findings are probably the strongest argument in favour of the applicant’s complaint under Article 18 of the Convention. However, the evidence and legal arguments before those courts might have been different from those in the case under examination. More importantly, assuming, that all courts had the same evidence and arguments before them, the Court reiterates that its own standard of proof applied in Article 18 cases is very high and may be different from those applied domestically. The Court admits that the applicant’s case may raise a certain suspicion as to the real intent of the authorities, and that this state of suspicion might be sufficient for the domestic courts to refuse extradition, deny legal assistance, issue injunctions against the Russian Government, make pecuniary awards, etc. However, it is not sufficient for this Court to conclude that the whole legal machinery of the respondent State in the present case was ab intio misused, that from the beginning to the end the authorities were acting with bad faith and in blatant disregard of the Convention. This is a very serious claim which requires an incontrovertible and direct proof. Such proof, in contrast to the Gusinskiy case, cited above, is absent from the case under examination.

261. In such circumstances the Court cannot find that Article 18 was breached in this case.

CASE OF OAO NEFTYANAYA KOMPANIYA YUKOS v. RUSSIA, 08/03/2012 [AK: As regards whether Yukos' prosecution was lawful]

γ. The Court’s assessment

588. The Court notes that in this complaint the applicant company challenged the lawfulness of the Tax Assessments 2000-2003 only in the part linked to the payment of reassessed taxes. The examination will therefore be confined to the question of the lawfulness of the additional tax liability. The Court further notes that the company did not seem to dispute that the relevant laws made it clear what taxes were due, at what rate and when. Rather, the company claimed that in 2000, 2001, 2002 and 2003 it used lawful “tax optimisation techniques” which were only subsequently condemned by the domestic courts in 2004, 2005 and 2006. It also complained that any existing legal basis for finding the company liable fell short of the Convention requirements in respect of the quality of the law and that, in any event, the application of the relevant laws contradicted established practice. Accordingly, the Court has to determine whether the relevant tax arrangements were domestically lawful at the time when the relevant transactions took place and whether the legal basis for finding the applicant company liable was sufficiently accessible, precise and foreseeable.

589. Turning to the first question, the Court would note at the outset that the applicant company disputed the findings of the domestic courts concerning the nature of relations between the applicant company and its trading entities. In view of its conclusion that the tax assessment proceedings in respect of the year 2000 did not comply with the requirements of Article 6 §§ 1 and 3 (b) of the Convention, the Court is required to decide whether the factual assessments made by the domestic courts could be used for the purposes of its legal analysis under Article 1 of Protocol No. 1. In this respect, the Court reiterates that according to its well-established case-law it is not its task to take the place of the domestic courts, which are in the best position to assess the evidence before them and establish the facts. The Court will not, in principle, intervene, unless the decisions reached by the domestic courts appear arbitrary or manifestly unreasonable (see, mutatis mutandis, Ravnsborg v. Sweden, 23 March 1994, § 33, Series A no. 283-B; Bulut v. Austria, 22 February 1996, § 29, Reports of Judgments and Decisions 1996-II, and Tejedor García v. Spain, 16 December 1997, § 31, Reports 1997-VIII) or if the court decisions have been issued in “flagrant denial of justice” (compare Stoichkov v. Bulgaria, no. 9808/02, § 54, 24 March 2005).

590. Having examined the materials of the case and the parties’ submissions and despite its earlier conclusions under Article 6 §§ 1 and 3 (b) of the Convention in respect of the 2000 Tax Assessment (see paragraph 551), the Court has little doubt that the factual conclusions of the domestic courts in the Tax Assessment proceedings 2000-2003 were sound. The factual issues in all of these proceedings were substantially similar and the relevant case files contained abundant witness statements and documentary evidence to support the connections between the applicant company and its trading companies and to prove the sham nature of the latter entities (see paragraphs 14-18, 48, 62-63, 165, 191-193, 212 and 213). The applicant company itself did not give any plausible alternative interpretation of this rather unambiguous evidence, as examined and accepted by the domestic courts.

591. From the findings of the domestic courts and the parties’ explanations, the Court notes that the company’s “tax optimisation techniques” applied with slight variations throughout 2000-2003 consisted of switching the tax burden from the applicant company and its production and service units to letter-box companies in domestic tax havens in Russia. These companies, with no assets, employees or operations of their own, were nominally owned and managed by third parties, although in reality they were set up and run by the applicant company itself. In essence, the applicant company’s oil-producing subsidiaries sold the extracted oil to the letter-box companies at a fraction of the market price. [AK: Here one is tempted to recall Khodorkovsky's open statement on Russian TV, "I’m uninterested in the cosmetic tricks of the judicial bureaucrats. The statement that oil in Siberia has to be sold at Rotterdam prices is too bizarre to comment on."] The letter-box companies, acting in cascade, then sold the oil either abroad, this time at market price or to the applicant company’s refineries and subsequently re-bought it at a reduced price and re-sold it at the market price. Thus, the letter-box companies accumulated most of the applicant company’s profits. Since they were registered in domestic low-tax areas, they enabled the applicant company to pay substantially lower taxes in respect of these profits. Subsequently, the letter-box companies transferred the accumulated profits unilaterally to the applicant company as gifts. The Court observes that substantial tax reductions were only possible through the mixed use and simultaneous application of at least two different techniques. The applicant company used the method of transfer pricing, which consisted of selling the goods from its production division to its marketing companies at intentionally lowered prices and the use of sham entities registered in the domestic regions with low taxation levels and nominally owned and run by third persons (see paragraphs 14-18, 48, 62-63 for a more detailed description).

592. The domestic courts found that such an arrangement was at face value clearly unlawful domestically, as it involved the fraudulent registration of trading entities by the applicant company in the name of third persons and its corresponding failure to declare to the tax authorities its true relation to these companies (see paragraphs 311, 349-353, 374-380). This being so, the Court cannot accept the applicant company’s argument that the letter-box entities had been entitled to the tax exemptions in questions. For the same reason, the Court dismisses the applicant company’s argument that all the constituent members of the Yukos group had made regular tax declarations and had applied regularly for tax refunds and that the authorities were thus aware of the functioning of the arrangement. The tax authorities may have had access to scattered pieces of information about the functioning of separate parts of the arrangement, located across the country, but, given the scale and fraudulent character of the arrangement, they certainly could not have been aware of the arrangement in its entirety on the sole basis on the tax declarations and requests for tax refunds made by the trading companies, the applicant company and its subsidiaries.

593. The arrangement was obviously aimed at evading the general requirements of the Tax Code, which expected taxpayers to trade at market prices (see paragraphs 395-399), and by its nature involved certain operations, such as unilateral gifts between the trading companies and the applicant company through its subsidiaries, which were incompatible with the rules governing the relations between independent legal entities (see paragraph 376). In this connection, the Court finds relevant the warning given by the company’s auditor about the implications of the use of the company’s special fund during the year 2002 (see paragraphs 206-209) and is not persuaded by the applicant company’s reference to case no. A42-6604/00-15-818/01 (see paragraphs 356-357), the expert opinion of its counsel (see paragraph 577) and its reliance on Article 251 (1) 11 of the Tax Code (see paragraph 376).

594. By contrast to the Tax Assessments in issue, the respondent entity in case no. A42-6604/00-15-818/01 was not alleged to have been part of a larger tax fraud and the Ministry failed to prove that it had been sham. The courts established that the entity had some assets, employees and a bank account at the place of its registration and dismissed the Ministry’s claims. As regards the expert opinion and the company’s reference to Article 251 (1) 11 of the Tax Code, the Court finds them irrelevant as they refer to the relations of openly associated companies and not, as was the case at issue, to the use of sham entities fraudulently registered in the name of certain third parties. Thus, the Court cannot agree with the applicant company’s allegation that its particular way of “optimising tax” had been previously examined by the domestic courts and upheld as valid or that it had used lawful “tax optimisation techniques” which were only subsequently condemned by the domestic courts. The above considerations are sufficient for the Court to conclude that the findings of the domestic courts that applicant company’s tax arrangements were unlawful at the time when the company had used them, were neither arbitrary nor manifestly unreasonable.

595. The Court will now turn to the question whether the legal basis for finding the applicant company liable was sufficiently accessible, precise and foreseeable. In this connection, the Court notes that in all the Tax Assessments (see paragraphs 14-18, 48, 62-63, 165, 191-193, 212 and 213) the domestic courts essentially reasoned as follows. The courts established that the trading companies had been sham and had been entirely controlled by the applicant company and accordingly reclassified the transactions conducted by the sham entities as transactions conducted in reality by the applicant company.

596. The courts first decided that the transactions of the sham entities failed to meet the requirements of Article 39 of the Tax Code defining the notion of a sales operation (see paragraphs 48 and 324) as well as Article 209 of the Civil Code describing essential characteristics of an owner of goods (see paragraph 48 and 381). In view of the above and relying on Article 10 (3) of the Civil Code which established a refutable presumption of good faith and reasonableness of actions of the parties in commercial transactions (see paragraph 48 and 382-383), the courts then changed the characterisation of the sales operations of the sham entities. They decided that these were in reality conducted by the applicant company and that it had been incumbent on the latter to fulfil the corresponding obligation to pay various taxes on these activities. Finally, the courts noted that the setting up and running of the sham arrangement by the applicant company resulted in an understating of the taxable base of its operations and, as a consequence, the intentional non-payment of various taxes, which was punishable as a tax offence under Article 122 of the Tax Code (see paragraph 400).

597. Having regard to the applicable domestic law, the Court finds that, contrary to the applicant company’s assertions, it is clear that under the then rules contractual arrangements made by the parties in commercial transactions were only valid in so far as the parties were acting in good faith and that the tax authorities had broad powers in verifying the character of the parties’ conduct and contesting the legal characterisation of such arrangements before the courts. This was made clear not only by Article 10 (3) of the Civil Code relied on by the domestic courts in the Tax Assessment proceedings, but also by other relevant and applicable statutory provisions which were available to the applicant company and other taxpayers at the time. Thus, Article 45 (2) 3 of the Tax Code explicitly provided the domestic courts with the power to change the legal characterisation of transactions and also the legal characterisation of the status and activity of the taxpayer, whilst section 7 of the Law on the Tax Authorities of the Russian Federation granted the right to contest such transactions to the tax authorities (see paragraph 393). In addition, the case-law referred to by the Government indicated that the power to re-characterise or to cancel bad faith activities of companies existed and had been used by the domestic courts in diverse contexts and with varying consequences for the parties concerned since as early as 1997 (see paragraphs 382-393 and paragraphs 428-468). Moreover, in a number of its rulings, including decision of 25 July 2001 no. 138-0 specifically relied upon by the domestic courts in the Tax Assessment proceedings against the applicant company (see paragraphs 384-387), the Constitutional Court confirmed the significance of this principle, having mentioned various possible consequences of a taxpayer’s bad faith conduct.

598. In so far as the applicant company complained that the bad faith doctrine had been too vague, the Court would again reiterate that in any system of law, including criminal law, there is an inevitable element of judicial interpretation and there will always be a need for elucidation of doubtful points and for adaptation to changing circumstances. In order to avoid excessive rigidity, many laws are inevitably couched in terms which, to a greater or lesser extent, are vague and whose interpretation and application are questions of practice (see, among other authorities, Sunday Times, cited above, § 49 and Kokkinakis, cited above, § 40). On the facts, it would be impossible to expect from a statutory provision to describe in detail all possible ways in which a given taxpayer could abuse a legal system and defraud the tax authorities. At the same time, the applicable legal norms made it quite clear that, if uncovered, a taxpayer faced the risk of tax reassessment of its actual economic activity in the light of the relevant findings of the competent authorities. And this is precisely what happened to the applicant company in the case at hand.

599. Overall, having regard to the margin of appreciation enjoyed by the State in this sphere and the fact that the applicant company was a large business holding which at the relevant time could have been expected to have recourse to professional auditors and consultants (see Špaček, s.r.o., cited above, § 59), the Court finds that there existed a sufficiently clear legal basis for finding the applicant company liable in the Tax Assessments 2000-2003.

600. Lastly, the Court observes that the applicant company made a number of additional arguments under this head. In particular, it also alleged that there was no basis in law to deny the repayment of VAT in respect of the export of oil and oil products, that the domestic courts had failed to apply Articles 20 and 40 of the Tax Code, that it should have been dispensed from payment of interest surcharges under Article 75 (3) of the Tax Code and that in respect of the year 2000 the company had been subjected to double taxation in respect of the profits of the sham entities.

601. The Court notes that both Section 5 of Law no. 1992-1 of 6 December 1991 “On Value-Added Tax” governing the relevant sphere until 1 January 2001 as well as Article 165 of the Tax Code applicable to the subsequent period provided unequivocally that a zero rate of value-added tax in respect of exported goods and its refund could by no means be applied automatically, and that the company was required to claim the tax exemptions or refunds under its own name under the procedure set out initially in Letter no. B3-8-05/848, 04-03-08 of the State Tax Service of Russia and the Ministry of Finance and subsequently in Article 176 of the Tax Code to substantiate the requests in order to obtain the impugned refunds (see paragraphs 326-336). In view of the above, the Court finds that the relevant rules made the procedure for VAT refunds sufficiently clear and accessible for the applicant company to able to comply with it.

602. Having examined the case file materials and the parties’ submissions, including the company’s allegation made at the hearing on 4 March 2010 that it had filed the VAT exemption forms for each of the years 2000 to 2003 on 31 August 2004, the Court finds that the applicant company failed to submit any proof that it had made a properly substantiated filing in accordance with the established procedure, and not simply raised it as one of the arguments in the Tax Assessment proceedings, and that it had then contested any refusal by the tax authorities before the competent domestic courts (see paragraphs 49 and 171, 196, 196 and 216). The Court concludes that the applicant company did not receive any adverse treatment in this respect.

603. As regards the company’s argument that Articles 20 and 40 of the Tax Code should have been applied by the domestic courts in their case and that the Ministry’s claims were inconsistent with the above provisions, the Court notes that the Ministry and the domestic courts never relied on these provisions and there is nothing in the applicable domestic law to suggest that they had been under a legal obligation to apply these provisions to the applicant company’s case. Thus, it cannot be said that the authorities’ failure to rely on these provisions rendered the Tax Assessments 2000-2001 unlawful.

604. Finally and in so far as the company disagreed with the interpretation of Article 75 (3) of the Tax Code by the domestic courts and also alleged to have been subjected to double taxation, the Court would again reiterate that it is not its task to take the place of the domestic courts, which are in the best position to assess the evidence before them, establish the facts and to interpret the domestic law. On the facts, the former provision only applied to cases where the taxpayer was unable to pay the tax debt solely due to the seizure of its assets and cash funds (see paragraph 402). The domestic courts established that the company had been unable to pay because of the lack of funds and not because of the injunctions and refused to apply Article 75 (3) of the Tax Code in the applicant’s case (see paragraph 216). The Court does not find this conclusion arbitrary or unreasonable. Likewise, the Court finds nothing in the parties’ submissions or the case file materials to cast doubt on the findings of the domestic courts, which specifically established that the Ministry took account of the sham entities’ profits in calculating their claims so as to avoid double taxation (see paragraph 49).

605. Overall, the Court finds that, in so far as the applicant company’s argument about the allegedly unreasonable and unforeseeable interpretation of the domestic law in the Tax Assessments 2000-2003 is concerned, the Tax Assessments 2000-2003 complied with the requirement of lawfulness of Article 1 of Protocol No. 1.

(b) Whether the Tax Assessments 2000-2003 pursued a legitimate aim and were proportionate

606. The Court is satisfied that, subject to its findings in respect of the lawfulness of fines for the years 2000 and 2001 made earlier, each of the Tax Assessments 2000-2003 pursued a legitimate aim of securing the payment of taxes and constituted a proportionate measure in pursuance of this aim. The tax rates as such were not particularly high and given the gravity of the applicant company’s actions there is nothing in the case file to suggest that the rates of the fines or interest payments can be viewed as having imposed an individual and disproportionate burden, as such, on the applicant company (see Dukmedjian v. France, no. 60495/00, §§ 55-59, 31 January 2006).

(c) Conclusion concerning the compliance with Article 1 of Protocol No. 1 as regards the Tax Assessments 2000-2003

607. Overall, the Court finds that there has been a violation of Article 1 of Protocol No. 1 on account of the 2000-2001 Tax Assessments in the part relating to the imposition and calculation of penalties. Furthermore, the Court finds that there has been no violation of Article 1 of Protocol No. 1 as regards the rest of the 2000-2003 Tax Assessments.
2. Compliance with Article 14, taken in conjunction with Article 1 of Protocol No. 1

(a) The applicant company’s submissions

608. The applicant company argued that the courts’ interpretation of the relevant laws had been selective and unique, since many other Russian companies such as Sibneft and TNK International Ltd. had also used domestic tax havens.

609. The company also submitted that the authorities had tolerated and even endorsed the tax optimisation techniques used by the applicant company in that they had accepted the applicant company’s and its trading companies’ tax returns and payments on a regular basis, and the company’s rate of tax payment had been comparable to or even higher than that of its competitors. In this connection, the applicant company relied on statistical data contained in a report by the Centre for Development, a report of the Financial Research Institute and reports of the Accounts Chamber of Russia. The company also under this heading argued that the legislative framework had permitted the company to use such techniques and that the interpretation of the domestic law in its case had been unique, selective and unforeseeable.

(b) The Government’s submissions

610. The Government responded that the allegations that other taxpayers may have used similar schemes could not be interpreted as justifying the applicant company’s failure to abide by the law. They further contended that the occurrence of illegal tax schemes at a certain stage of Russia’s historical development was not due to failures or drawbacks in the legislation, but rather due to “bad-faith” actions by economic actors and weakened governmental control over compliance with the Russian tax legislation on account of objective criteria, such as the 1998 economic crisis and the difficulties of the transition period.

611. At present, the Government was constantly combating tax evasion and strengthening its control in this sphere. They also referred to statistical data by AK&M and some other news agencies in 2002, which had reported that OAO LUKOIL and OAO Surgutneftegas, two other large Russian oil producers, had posted sales proceeds of RUB 434.92 billion and RUB 163.652 billion and paid RUB 21.190 billion and RUB 13.885 billion in profit tax respectively, whilst the applicant company had posted sales proceeds of RUB 295.729 billion and paid only RUB 3.193 billion in profit tax. The Government submitted that at least two Russian oil majors, OAO Surgutneftegaz and OAO Rosneft, had never engaged in such practices, whilst some, in particular OAO Lukoil, had ceased using them in 2002.

(c) The Court’s assessment

612. The Court will examine this grievance under Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1. This former provision reads:
Article 14 of the Convention

“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

613. Before considering the complaints made by the applicant company, the Court would reiterate that Article 14 does not forbid every difference in treatment in the exercise of the rights and freedoms recognised by the Convention (see, for example, Lithgow and Others, cited above, § 117). It safeguards persons (including legal persons) who are “placed in analogous situations” against discriminatory differences of treatment; and, for the purposes of Article 14, a difference of treatment is discriminatory if it “has no objective and reasonable justification”, that is, if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality between the means employed and the aim sought to be realised” (see, amongst many authorities, Rasmussen v. Denmark, 28 November 1984, §§ 35 and 38, Series A no. 87). Furthermore, the Contracting States enjoy a certain margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment in law; the scope of this margin will vary according to the circumstances, the subject-matter and its background (ibid., § 40).

614. The Court would reiterate that nothing in the case file suggests that the applicant company’s tax arrangements during the years 2000-2003, taken in their entirety, including the use of fraudulently registered trading companies, were known to the tax authorities or the domestic courts and that they had previously upheld them as lawful (see paragraphs 592-594). It thus cannot be said that the authorities passively tolerated or actively endorsed them.

615. As regards the applicant company’s allegation that other domestic taxpayers used or continue to use exactly the same or similar tax arrangements as the applicant company and that the applicant company was the only one to have been singled out, the Court finds that the applicant company failed to demonstrate that any other companies were in a relevantly similar position. The Court notes that the applicant company was found to have employed a tax arrangement of considerable complexity, involving, among other things, the fraudulent use of trading companies registered in domestic tax havens. This was not simply the use of domestic tax havens, which, depending on the exact details of an arrangement, may have been legal or may have had some other legal consequences for the companies allegedly using them. The Court notes that the applicant company had failed to submit any specific and reliable evidence concerning such details. It further notes that it cannot be called upon to speculate on the merits of the tax arrangements of third parties on the basis of data contained in non-binding research and information reports and that therefore it cannot be said that the situation of these third parties was relevantly similar to the situation of the applicant company in this respect.

616. The Court concludes that, in so far as the complaint about discriminatory treatment is concerned, there has been no violation of Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1.

(Republished from Da Russophile by permission of author or representative)
 
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Sometimes a single picture is worth a thousand words. This is one.

Though Russia remains a highly dangerous country by developed country standards, it has improved immeasurably in the past decade. Fewer Russians today die from alcohol poisonings, homicides, suicides, and even – despite a near doubling of car ownership rates – transport accidents that they did in the 1990′s to early 2000′s. Indeed, most of these “non-natural deaths” indicators are back to the levels of the late 1980′s, coinciding with Gorbachev’s anti-alcohol campaign.

The importance of this decline shouldn’t be understated. 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. Furthermore, the fact that the pace of improvements actually speeded up during the crisis indicates that Russia is becoming a “normal country” in the sense that health improvement trends have decoupled from economic fluctuations.

(Republished from Sublime Oblivion by permission of author or representative)
 
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Sergey Zhuravlev is a Russian economist who runs a wonky but eminently readable and very useful, interesting blog and writes for Expert (author profile), which I may add is an excellent publication. You have met him previously on my blog as the inventor of a clever – if, in my opinion, flawed – argument that the 2011 Duma elections were marred by 5%-6% fraud, but were clean in Moscow; and if you read the Russia blogs, you may also have come across Mark Adomanis’ translation of one his articles about Russian regional inequality. Now I am presenting a translation of his Feb 13 article on what I called as the end of Russia’s demographic crisis: The Reversal of the Russian Cross. In my opinion, it has a few weaknesses; in particular, he is too cavalier about dismissing the “alcohol hypothesis” about post-Soviet Russia’s “supermortality”. But overall it is a brilliant and deeply informative survey of the origins of the Russian Cross – the crossover of the births and deaths graphs in 1992 – as well as of its recent reversal, to the extent that natural population decline is now almost stabilized and the overall population is able to grow due to net migrants.

The Reversal Of The Russian Cross

Last year our country’s population increased, for the first time in 20 years. Although positive growth in aggregate was only enabled by immigration from the Near Abroad, existing trends in rising fertility and falling mortality were maintained.

If we are to go by Rosstat’s figures, in the past year Russia’s population – for the first time in virtually the entire twenty years of Russia’s existence as a sovereign state – increased, exceeding 143 million people. The maximum population size was reached in 1992, at 148.56 millions, and has since decreased at a practically monotone rate. That said, it should be added that small population growth was previously observed in 1994 and 2009, and that the population fall in 2010 was, most likely, explained by cumulative errors over the period since the 2002 Census, and by the abnormal mortality during that summer’s heatwave [AK: There were c.56,000 excess deaths during the anomalous 2010 heatwave, which is basically equivalent to population decline of 48,300. Furthermore, the 2010 Census showed there to be 143.9 million Russians, which was one million higher than projections based on the 2002 Census; this implied that during the period, net immigration was underestimated by more than 100,000 per year. So its likely that even despite the heatwave, Russia's population still eked out an increase in 2010].

Caucasian Mountains only bested by Urals Mountains

The aggregate growth in our country’s permanent population was 165,000 for the past year [AK: This was a preliminary estimate that seems to have discounted December's migration stats; the final figure is population growth of 189,000]. Although overall positive growth is only enabled by migrants – net immigration is estimated at 296,000 for this year – the rate of natural population decrease continued to decline at a fast pace. Whereas in 2005 there were 828,000 more deaths than there were births, this past year it declined to 131,000.

Russia’s population is substantially affected by the effects of migration from the former Soviet Union. In the 22 years after 1990 – the year when ethnic problems in the former USSR exploded – some 7 million people have moved to Russia for permanent residency. This figure is in net terms, accounting for reverse flows from Russia, and discounting temporary labor migrants. Although net population outflow from Russia into countries of the Far Abroad constituted 80,000 annually throughout the 1990′s – in total, 1,050,000 Russians have officially moved into countries of the Far Abroad for permanent residency since 1990 – it has practically ceased from 2006 [AK: The Far Abroad is the world outside the former USSR, minus the Baltics and (recently) Georgia. Note also that Russia's "brain drain" came to a dripping halt at precisely the time when hacks in the Western media began to propagandize it].

Russia hosts the world’s second largest migrant population, after the US; it slightly exceeds Germany in this respect, and doubly so the next five largest migrant centers: Saudi Arabia, Canada, Great Britain, Spain, and France. A third of Russia’s migrant inflow from 1990 to 2010 from the former Soviet bloc accrued to Kazakhstan. But in the noughties Kazakhstan ceded leadership as a source of migrants to Uzbekistan, and after the Orange Revolution Ukraine caught up with them, and Kyrgyzstan after the Tulip Revolution [AK: Zhuravlev has a separate blog post noting that emigration waves typically accompany revolutions in the former Soviet space. I guess its something to look forwards to if the White Ribbon crowd seizes power.]

The only former Soviet republic with which Russia has had a negative migration balance these past 21 years – in which more people left than came in – is Belarus. That said, it should be noted that starting from 2005 the migration balance with Belarus too has turned positive, albeit it remains modest (net immigration from Belarus constitutes less than 8,000 people over the past six years). It is unclear why more people left for Belarus before this date; perhaps because the Russian provinces neighboring Belarus, such as Belarus, aren’t exactly the richest ones. Maybe it was tied to family reunification – parents returning to their children, or Belorussians returning to their homeland, for instance from Komsomol construction projects. Perhaps for this same reason Russia had a net outflow of migrants into Ukraine in the very early 1990′s.

As regards internal migration, the statistics do not reveal any special revelations that could refute or even complement intuition. There are three main destinations for internal migrants: The city of Moscow and Moscow oblast (in the past year the entire agglomeration absorbed 125,000 people, or three quarters of Russia’s population growth), and St.-Petersburg (33,000 migrants in the past year). There is also substantial migration into the Southern Federal District (in significant part from the neighboring North Caucasus) and into the Urals Federal District.

An important caveat is that in the two latter cases, population growth carries an exclusively point-like character. In the Urals Federal District, it is almost entirely concentrated around Tyumen oblast, the richest province in Russia today. Due to the high levels of social support in Tyumen oblast, fertility is also high: Young families get generous housing benefits, there are special programs for families with children. On its part the situation is similar for the Southern Federal District, which grows entirely thanks to Krasnodar krai, which is also understandable: Sochi.

It is clear that Russia’s demographic situation has improved in substantial part on account of the Northern Caucasus, where a strengthening baby boom started from about 2005. The other more or less demographically balanced Russian region, experiencing positive natural population growth, is the Urals Federal District thanks in turn to Tyumen. But contrary, perhaps, to popular belief, the Northern Caucasus isn’t the main source of migrants to the Central Federal District. In 2010, the most recent year for which internal migration data is available, only 16,000 people from the North Caucasus got permanent residence in the Center. This is but a drop in the ocean to the 19 million population of the Moscow region.

The biggest “donors” to the Moscow agglomeration are the Center itself and the Volga Federal District. These two regions, which constitute the primordial Russia as it developed in the 16th-17th centuries, experience not only the maximum natural population decrease in Russia but also the maximum mechanical loss of population, which in its turn is getting fairly intensively replaced by migrants from Central Asia (and in Siberia, apparently, from China [AK: Here I disagree with Zhuravlev. While there are significant numbers of Chinese labor migrants and shuttle traders in the Far East, very few of them choose to stay. This is not the case for Central Asians.])

Wartime Losses in Peacetime

Russia’s natural population decrease has declined as a result of a significant improvement in mortality, as well as a modest increase in fertility. The fall in mortality, just as its rise earlier in the 1990′s and early 2000′s, for the most part affected men, and substantially affected their expected life expectancy. From a remarkably low level for a civilized country of 58.9 years six years ago (the minimum was 57.4 years in 1994) it has now improved to 63.6 years. This is still far from a result to write home about, but at least it is now almost equal to the best Soviet-era indicators in the early 1960′s and late 1980′s. As for mortality among under 40′s, which has always been the scourge of Russian men, the current curves are even better than the Soviet ones (granted, the share of men living to 35-40 years is now higher mostly thanks to significantly lower infant and child mortality rates).

The phenomenon of “supermortality” from 1991 to 2009 – the 6.24 million excess deaths in the past 19 years, of which 3.2 million accrue to the 1990′s, that would not have occurred had age-specific mortality rates remained fixed at 1990 levels – has yet, in my opinion, to be endowed with a rational explanation [AK: This is the weakest point of Zhuravlev's essay. Yes, there is a rational and very convincing reason: Alcohol. There is a very close correlation between alcohol consumption and mortality since the late Soviet period, when an anti-alcohol campaign reduced consumption and improved life expectancy, to local peaks in consumption - and mortality - around 1994 and the early 2000's, to the past few years, when mortality reductions have occurred in lockstep with less boozing. There are similar correlations between alcohol consumption and mortality by geography, sex, and socio-economic sex; see the evidence here.]

Despite the hugeness of the number itself. It is equal to or even exceeds the “supermortality” caused by collectivization, is almost an order of magnitude greater than the number of victims of the Great Terror, and has the same order of magnitude as the rear losses of the USSR during the Great Patriotic War.

Falling living standards? This fit the maximum in 1994, but not the second local maximum in 2003, when normality was returning. And on the whole, while living standards fell during the transition period and reattained Soviet levels only in 2003-2005, the depth of the fall was nowhere near deep enough to explain this “supermortality” as during the war years with reasons such as malnutrition, poor sanitation, and the unbearable conditions of mobilized labor. The “supermortality” of the past twenty years carried some war front characteristics: Excess mortality among males from 25 to 44 years of age in percentage terms relative to Soviet norms was maximal, at 57%. As if Russia had a war.

To this day another very popular explanation is the “alcohol hypothesis.” Booze became more accessible, people got more free time on their hands, and parasitism was no longer a jailing offense. It is probable that more accessible spirits, and especially drugs – which were little known in the USSR – played their role. However, during the period, people didn’t start to buy fewer spirits; it remained at a constant 9-10 liters of ethanol per capita annually (the contribution of homemade moonshine is purely evaluative, often they add on about 10 liters of ethanol per capital, but who’s doing the counting?).

Be that as it may, the reduction in external (“non-natural”) causes of death in the past few years was very significant and was visibly faster than the reduction in mortality from all other causes. For instance, if aggregate mortality declined by 2.9% in 2011, for non-natural causes – homicides, suicides, alcohol poisoning – it fell by 9%-17%. Albeit, mortality from traffic accidents did increase by 1.3%.

The causes for this reduction in “non-natural” mortality should probably not be sought for beyond rising living standards. Especially revealing in this context is a comparison between large megapolises, especially Moscow, with the rest of Russia. In the capital, the numbers of murders and suicides, not to even mention alcohol poisonings by counterfeit vodka, are many times lower – by up to five to ten times lower – than in the rest of the country.

In aggregate drunkenness, banditry, the increasing number of auto accidents, and the war in Chechnya explain much less than 100,000 of the annual number of abnormal deaths, which in some years have reached up to 600,000 in the past decade. Furthermore the rise in mortality also affected women, albeit to a lesser extent, for whom the chances of meeting one of the deaths described above are much less characteristic.

The melancholy arising from a career loss is surely an important factor, especially when it comes to people near the end of it. But then its unclear why mortality increases afflicted 25 year old youths; there are cases of suicide even among party and Komsomol activists of this age, even though they fit perfectly into the new capitalist economy.

The mere fact of the demise of the state of “Kuzmich” could hardly have caused such an overpowering depression, as to invoke the desire to end it lethally [AK: Кузьмичи refers to a person who grew up on Soviet kitsch and later became disillusioned by it, but was forced to continue living the lie to retain his power. This cynicism and obscurantism described the Soviet nomenklatura by the 1970's-80's.] To be honest, it was sooner the other way round: They had annoyed everyone by then. One final consideration: We may be dealing with a statistical artifact from Soviet times. It’s well known that to a Soviet economic statistics were just rubbish to a significant extent. Is it possible that similar techniques were applies to mortality statistics, even though its more difficult? [AK: I very much doubt it, not only because falsifying demographic stats is more difficult but because the picture they reveal is damning nonetheless: Stagnant life expectancy (an overall decline for men) and an infant mortality rate that actually, unique among industrialized countries in peacetime, that actually increased under the late Brezhnev period.]

Girls, Ask your Girl Friends

The shifts taking place in fertility were no less interesting. In the 1990′s, the quantity of children per woman younger than 25 years nearly halved. This decrease barely affected older women; however, because it was specifically “youth fertility” that was high in the USSR, the aggregate result was dramatic. The total fertility rate (TFR) – the number of children a woman can expect to have in her lifetime – fell from 1.89 children in 1990 to 1.16 (!) in 1999, which is, of course, very far from level required to assure population replacement. Although the noughties observed an increasing TFR on account of more births among older women – in 2009, the TFR reached 1.54 children – the total “shortfall” of births from the reduction in “youth fertility” during the 1991 to 2009 period consisted of 11.292 people.

Up until 2007, the influence of these changes on the crude birth rate – the numbers of births per 1000 people – was slightly offset by the increase in the numbers of women in their childbearing age.

In the graph below, it is clear that in this indicator, adjusted for changes in age-specific mortality, was actually growing in the 1990′s and the first half of the 2000′s. This is not surprising, as fertility was mostly formulated on account of women born in 1975 or younger, when we had a repeat demographic spurt (an echo of the baby boom of the 1950′s). After 2007, the crude birth rate is starting to be affected by the echo of its own collapse in the 1990′s and by population aging. That is why the birth rate has remained almost flat since that year, despite the number of children per woman markedly increasing. This “echo effect” is going to influence fertility in the coming decade, since women from the small 1990′s cohort will be reaching child-bearing age.

It is difficult to say with certainty what caused this fertility shift towards women of greater age. In the Soviet period, a significant contributory factor to early childbearing was that it was figured as a condition for registration for the provision of housing. Apparently, postponed childbearing was enabled by growing income inequality (as a result of which, women began to take more care in choosing a mate, with economic factors playing a significant role in the process), new opportunities for international migration, or something else.

It’s clear that under the Soviet Union, the presence of kindergartens, schools, the Constitution’s guarantee – which was more or less followed in practice – of free housing constituted significant social supports, which enabled high fertility rates. One can also add that many Soviet cities – maybe, all of them – were developed like a “company town”, with social and housing infrastructures closely tied to the town-forming enterprise. When markets were introduced, and it became clear that nobody wanted so many tractors or so many tanks and the revenues of these enterprises dried up, all this infrastructure were left hanging in thin air. There was nothing left to finance the kindergartens and nurseries, no funds to build housing. And the destruction and uncertainty, of course, also influenced decisions on having children.

The economic stabilization of the 2000′s, and especially the new social support measures introduced in 2006-2007 – maternity capital, credit programs, etc. – launched a “delayed fertility” effect, a shift of births towards older women. In general fertility has matured, albeit one shouldn’t exclude the possibility that further concerted efforts to provide social support for families and children will return TFR back to Soviet levels. In any case, more than half of the movement back is already behind us.

(Republished from Sublime Oblivion by permission of author or representative)
 
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In the wake of Putin’s article on national security for Rossiyskaya Gazeta, there has been renewed interest in Russia’s ambitious military modernization plans for the next decade. I am not a specialist in this (unlike Dmitry Gorenberg and Mark Galeotti, whom I highly recommend), but I do think I can bring much-needed facts and good sources to the discussion.

1. This is not a new development. In fact, the massive rearmament program was revealed back in 2010 (I wrote about it then). Russia’s armed forces were neglected in during the 1990′s and early 2000′s, and enjoyed only modest funding until now; relative to Soviet levels, they are now far degraded. The main goal is to create a mobile, professional army equipped with modern, high-tech gear by 2020.

2. To recap. With oil prices high and Russia’s fiscal situation secure, it IS affordable; it’s not like the old USSR (or today’s US for that matter) spending money it doesn’t have. I also don’t necessarily buy the argument that most of the additional funds will be swallowed up by corruption or inefficiency. Massive new procurement can create temporary bottlenecks, which raises prices, but on the other hand it also allows for economies of scale. The real question is whether Russia absolutely needs to retain the hallowed One Million Man Army, which would appear far too big for the modest anti-insurgency or local wars it may be called to fight in the Caucasus or Central Asia. (There is no possibility of matching NATO or Chinese conventional strength in principle, so that consideration is a moot point).

3. Putin argues for 700,000 professional soldiers by 2017, with the numbers of conscripts reduced to 145,000. This is a huge change, as today – with the failure of the attempt to attract more contract soldiers under Medvedev – conscripts still make up the bulk of the Russian Armed Forces. Many are ill-trained; even things like dedovschina aside, it is impossible to create a good soldier capable of fighting in modern wars in one year’s time. So if successful this will undoubtedly be a change for the better.

4. Will this effort be successful? Based on the results of the previous attempt, Streetwise Professor argues not. I disagree. The previous attempt was marred by the inconvenient fact that salaries were ridiculously low; few reasonably bright and successful people would want to make a career of the military. But since January 1, 2012 military salaries have been radically increased, so that whereas before they were below the average national wage, they are now about twice as big. According to this article this is how the new salaries look like in international comparison.

Lieutenant salaries (pre-bonus)
Russia (2011) $500
NATO East-Central Europe $800-$1400
Russia (post-2011) $1600
France $2300
US $2800
Germany $3000
UK $3500

When one also bears in mind that living expenses in Russia tend to be lower than in most developed countries, it emerges that the new pay scale is only slightly below West European standards. Furthermore, whereas the West European rates are similar to their prevailing national average salaries, the average salary of the Russian lieutenant will be twice higher than the average national salary, which was $800 as of 2011. Remarkable as it may seem based on current culture*, but it’s quite possible that the military will come to be seen as an attractive career choice in Russia.

Below is an infographic from Vzglyad which gives you some idea of the extent of the increases. There are three rows of figures for each rank. The third one represents the average salary (including bonuses). The dark column represents 2011, the lighter column represents post-Jan 1st, 2012.

5. The total cost of the program to 2022 is 23 trillion rubles: 20 trillion for modernization, 3 trillion for defense plants.

According to Vesti, 1.7 trillion rubles will accrue to the additional costs of higher salaries and military pensions in 2012-14 alone. Extending this to 2022 gives a figure of 4.2 trillion rubles. However, we can expect the costs after 2014 to increase further, because of the growing share of contract soldiers and probable further increases in military salaries. So in practice that would probably be something like 7-10 trillion rubles on personnel costs.

So while the rearmament program which focuses on “hardware” is gargantuan, the increases in spending on “software” are very substantial as well.

6. Another myth is that the increased military spending will bite hard into social spending, education, and healthcare. After all, the projected federal budgets show declines in the share of education and healthcare spending, while military spending increases. I bought into it, until I found this article by Sergey Zhuravlev, a noted Russian economist.

This is because of the changing structure of government spending. First, under Medvedev there was a big increase in spending on anti-crisis measures (which are temporary and have now ebbed away), then on big increases on social spending in the run-up to the elections. So naturally, as revenues grow, there will develop room to increase military spending without decreasing social spending, e.g. on pensions. The sum total of the increase in military (and general security, police) spending is not going to be more than 1.5% points of GDP.

In practice, most of the increased spending will accrue at the expense of declines in spending on the national economy and (a very modest) amount of new debt. The former is substantially associated with the end of spending on the Sochi Olympics. So the picture, as Zhuravlev argues, isn’t so much “guns instead of butter”, as “guns instead of Sochi.” As for the debt, it will only constitute an additional 3.5% points of GDP to 2014, which is an insubstantial sum, especially considering Russia’s minimal aggregate levels of sovereign debt.

It is true that as a share of GDP, spending on education and healthcare will fall; this isn’t too desirable, since – especially on the latter sector – they aren’t high in the first place. But it is important to note that this refers to the federal budget, and that the total GDP is projected to increase substantially to 2014; in practical terms, federal spending on education and healthcare will remain flat. But most healthcare and education spending occurs at the regional level. Regional spending in turn will not be under the constraints imposed on the federal budget by rearmament, so in real terms aggregate total education and healthcare spending will continue increasing.**

* Even here I need to make a caveat. Whereas the Army is very unpopular in intelligentsia, Moscow, and emigre circles (of which I am, admittedly, a part) this isn’t quite the case at the all-Russia level where opinions are on balance ambiguous, NOT negative. A majority consistently approves of the Army, and as shown in this Levada poll, even opinion on conscription is typically split 50/50. Only 21% think that Army service is “a waste of time.” The lesson is not to make general extrapolations from unrepresentative samples.

** This is assuming that the whole military spending thing isn’t just pre-elections braggadocio that will be quietly dropped in favor of boring, useful stuff like transport, education, and healthcare as argued in a recent Vedomosti article citing anonymous government sources. I guess that’s a possibility, but I doubt it will happen; the big military spending rises have been in the works far too long to be just dismissed this May.

(Republished from Sublime Oblivion by permission of author or representative)
 
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I will have a much longer and detailed post on this in the future, with new projections, but this breaking news (at least as far as it comes with dry demographic statistics) so I can’t refrain from writing a preliminary post on the matter.

For all intents and purposes, Russia’s demographic crisis – the infamous “death spiral” afflicting it for much of the post-Soviet period – is at an end.

Here is a summary of the preliminary data for 2011:

1. The population increased by 189,000. The rate of natural decrease, deaths minus births, is now at a mere 131,000; for comparison, it was consistently within the 700,000 to 1,000,000 range from 1993 to 2006. This was more than balanced by an uptick in net immigration, which rose to 320,000 this year. (This has not stopped the hackish Western media from slobbering on about Russia’s “brain drain” at just the precise moment in time that it finally came to a complete halt).

2. Births continue to rise, with Total Fertility Rates reaching 1.57 in 2010 and 1.60 in 2011. This is marginally higher than the EU average (1.59 in 2009), and similar to Canada (1.67 in 2009) and to Estonia (1.62 in 2009), which was the majority-Christian nation least affected by the demographic crisis after the Soviet collapse. Life expectancy is still dismal by industrialized country standards but is immeasurably better than before, having increased to 70.3 years in 2011. Russians have never lived longer; the previous two peaks were in 1964, at 69.9 years, and in 1986-87, at 70.0 years.

3. The structure of mortality has improved a lot, with fewer Russians dying from external causes (the bulk of which, in its case, are caused by drunkenness). Suicides, homicides, and deaths from alcohol poisoning are all now below the levels of 1990, the last year of Soviet “normality.” They are still far above the levels they should be but I am confident they will continue to improve as the effects of excise taxes and regulations causes alcohol culture to transform into the more reasonable forms seen in the US and Western Europe.

4. Because the immigrant population was previously under-counted, the most recent Census revealed the population to be 142.9 million as opposed to the projected 141.9 million. With the growth this year, it is now at 143.0 million.

4. Let me take the opportunity to remind the reader that I predicted this all. Hardly anyone else did. Back in mid 2008 I wrote: “Russia will see positive population growth starting from 2010 at the latest” (back when all the agencies and Big Name Experts were expecting unrelenting decline). I was 100% correct. The population was already growing by 23,000 in 2009. It did dip by 48,000 in 2010, but this was due to the chaotic effect of the heatwave and an unexpected decline in net immigration; this year, it more than made up the difference by growing for 2010 (and even 2008). My models were if anything too conservative on life expectancy. Even the most optimistic only broke the (unprecedented) 70 years barrier by 2012-13, but as of 2011 it was already at 70.3 as mentioned above.

5. For those smart-ass commentators who are going to talk about the “echo effect” of declining birth rates as women from the diminished 1990′s cohort come of age, please note that:

(A) The purpose of this post is primarily to avail readers of the latest developments, which have barely even been covered by the Russian media let alone the likes of Eberstadt.

(B) This effect is implicitly addressed in my models. I’m not going to argue with you on this until or unless you first read this post (which describes my models) and this discussion.

(Republished from Sublime Oblivion by permission of author or representative)
 
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It is now increasingly evident that Russia’s population has settled on a small but decidedly firm upwards growth trend. I have been vindicated.

According to the latest data, in the first eight months of the year births fell by 1.4% (12.5/1000 to 12.3/1000) and deaths fell by 6.2% (from 14.6/1000 to 13.7/1000) relative to the same period last year. The rate of natural population decrease eased from -198,3000 to -128,800. The big fall in the death rate is due to two factors: (1) the continuing secular increase in life expectancy, due to decreasing alcohol consumption and more healthcare spending; (2) specific to 2011, the “high base” effect of the mortality spike during the Great Russian Heatwave last year.

This natural decrease was more than compensated for by 200,255 net migrants during the same period, making for a population increase of 71,500 this year to August. This more than cancels out the population decrease of 48,300 for the whole of 2010, and let it be reminded that it rose by 23,300 in 2009. In other words, in stark contrast to the avalanche of doom-mongering articles that continue to be written in the Western press about “dying Russia” – of which two of the most egregious examples are this and this – the reality is that today in net terms Russia’s population is now larger than it was in 2009.

At this point an important methodological point has to be made. This year, Rosstat switched to only accounting for immigrants who “register at the place of residence” in their population updates, as opposed to the previous method of accounting for anyone who enters the country with a permit to stay for a year or more. The former number is much smaller than the latter: whereas there were the aforementioned 200,255 net immigrants by the old method, Rosstat’s registration method only shows 68,822 (with the result that Rosstat says that Russia’s population actually decreased by 60,000 in the first eight months of this year). However, as Sergey Slobodyan (a frequent guest blogger here) noted at the JRL, this was an opaque and rather bizarre switch. For a start, even using the first method in the years before 2011, which gives far more emigrants than the by residency method, Rosstat still under-counted the numbers of migrants in Russia by one million – the 2010 Census showed there to be 142.9 million Russians, as opposed to the 142.0 million estimated by Rosstat on the basis of projections from the 2002 Census. And even on an intuitive level, doesn’t it seem obvious that far from every migrant to Russia will immediately bother (or be able to afford!) registering at a place of residence? Slobodyan speculates that the reason the new methodology was adopted was because of nationalist tensions over immigration levels in the run-up to the upcoming elections, which may have pressed the Kremlin into pressuring Rosstat, at least for the time being, into purposefully under-counting immigrants; hence the unexplained switch in methodology.

Particularly encouraging in the statistics for this year is that “mortality from vices” continues to fall very rapidly – things such as homicides, suicides, poisonings, etc., that have a much higher than average negative impact on life expectancy (because people who die those deaths tend to be younger) and the social problems they are typically associated with. Note that all of these figures are already lower than in 1990, the last year of Soviet normality (more or less). The same trend can be seen for deaths from accidents. Now to be accurate these death rates are still very high by global standards: whereas Russia’s total numbers of deaths from “external causes” (suicides, homicides, accidents, etc.) was 134 / 100,000, thus dipping below the levels of 1990, it is still far from the 40 / 100,000 types of figures in countries like Australia. No-one doubts that there is still a lot of work to be done on the health and safety front.

Predictably, none of this gets mentioned in the Western media, which is still replete with tropes about the mass emigration of Russia’s middle classes (debunked here multiple times), non-existent population collapse, and citations of outdated CIA World Factbook figures which are cited in lieu of official Rosstat ones. To the contrary, the population has stabilized, and the “brain drain” is now a mere trickle (only 400 Russian R&D specialists emigrated abroad for an undefined amount of time in the first half of 2011, which is a drop in the ocean besides its population of 143 million). Meanwhile, they have missed the true demographic apocalypse that is occurring not in Russia itself, but in one of its neighbors, Latvia, long lauded as a pro-Western and economically liberal “Baltic tiger”: almost as many people are now leaving Latvia every year as leaving Russia. But Latvia’s population is 75 times lower!

S/O, vindicated

Three years ago, based on my own demographic models, I predicted that Russia’s demographic future will be either one of stabilization, or slow population growth. In late 2009, I wrote that even under undemanding assumptions, “the population size will remain basically stagnant, going from 142mn to 143mn by 2023 before slowly slipping down to 138mn by 2050.” This was highly counter-consensus, even scandalous, at the time, given that the debate was dominated by the likes of Nick Eberstadt and most of the main demographics agencies believed a decline to the low 130 millions was likely by 2025. For instance, in the professionally titled Spring 09 article Drunken Nation, Dr. Eberstadt wrote: “UNPD projections for the year 2025 range from a high of about 136 million to a low of about 121 million… The Census Bureau’s projections for the Russian Federation’s population in 2025 are 128 million.”

Now the big demographics agencies are recognizing that things have fundamentally turned around. For instance, in its most recent 2011 World Population Data Sheet, the PRB’s Medium forecast for Russia’s population in 2025 is now 139.0 million. In the 2010 Revision of the World Population Prospects by the UN Population Division has Russia’s population falling to 139.0mn in 2025, with the High forecast being 144.5mn in 2025. Russian statistics agency Rosstat forecasts 140.9 million in 2025, the High version being 146.7 million (note that they still use the base population of 142.0 million for this estimate, not the 142.9 million revealed by the recent Census; in reality, once this is accounted for, their 2025 would logically be by a million bigger).

Whither now? I believe the current Low scenarios, envisaging a drop to the low 130 millions by 2025, have become very unlikely – they assume that many of the trends we see today, such as falling mortality, and net emigration, almost completely stall. In the light of the government’s campaign against excessive alcohol drinking – the primary cause of Russia’s high mortality rates – and the historical successes that tend to accompany such campaigns (e.g. Karelian Finland in the 1970′s and 1980′s), not to mention the more recent Baltic experience; as well as continued economic growth that will enable more resources to be diverted to healthcare and for consumers to pursue healthier lifestyle choices; means that life expectancy will continue rising relatively quickly. Meanwhile, as long as there remains a substantial income gap between Russia and the Caucasus and Central Asia, immigrants will continue to come. Some commentators have argued that fertility convergence in those regions will reduce the number of potential migrants to Russia in the years to come. Perhaps. On the other hand, as Moldova and the Baltic nations show, even being in demographic straits of their own does not necessarily lead to diminishing supplies of emigrants from economically-behind countries.

The above graph is a set of Low, Medium and High projections from Rosstat in 2000, with the High version (green) being a stabilization at 142.7 million people in 2011. As one can see, the mere fact that Russia’s population is at 142.9 million is a surprise to the upside as viewed from a decade ago. If things go well – the economy continues growing, mortality rates keep falling, etc. – then it is entirely possible that Russia’s population will follow today’s mainstream High projections (144-147 million) or even surpass 150 million (as in my original High projection) by 2025.

EDIT: This article has been translated into Russian at Inosmi.ru (Российская демография: развенчивая мифы).

(Republished from Sublime Oblivion by permission of author or representative)
 
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One thing that strikes you, as you wander the shops of any Russian city, is the sheer cheapness of booze and cigs. As little as 3 years ago, one could buy a pint-sized bottle of beer or a pack of cigarettes for just $1, while a 0.5l bottle of vodka cost as little as $3. Prices have since risen, but they remain very low in comparison to incomes.

This happy era was due to come to an end. The Finance Ministry planned to raise excise duties on ethanol products by a factor of 4.3 and by a factor of 15 on tobacco products, in a graduated way through to 2015. The result would have quadrupled the minimum price of lower-range vodkas (105 rules, to 410 rubles) and of the average cigarette pack (24 rubles, to 100 rubles). The practice of selling beer in large, plastic containers is to be forbidden from January 2013. Given that alcohol was found to cause 32% of aggregate mortality amongst middle-aged Russians in 2005, and the high prevalence of smoking among Russian men, these measures are surely long overdue. The plans will help Russia to consolidate the reductions in alcohol-related mortality of recent years.

The main driving force behind this seemed to be Finance Minister Kudrin, if for reasons that have little to do with public health (the taxes are estimated to bring in a further $11 billion in revenues, in addition to the $3 billion garnered through existing ones). Though these sums are very small relative to Russia’s total budget, they will nonetheless help to appreciably narrow the budget deficit. However, these ambitious plans may have received a setback following Putin’s criticism of the plans in late March; namely, that such rapid price rises would encourage more Russians to take to moonshine alternatives. The alcohol and tobacco lobbies also raised objections.

According to a Finance Ministry source who contacted Russian Reuters, the revised plans call for a smaller increase in excise tax on vodka, by a factor of 2.2 instead of the previous 4.3 by 2015. The result will be a mere doubling of lower-end vodka prices (105 rules, to 180 rubles); and, given rising incomes and substantial inflation, only a modest decrease in its relative affordability. Likewise, smokers are in for good news: the former quadrupling is now little more than a doubling by 2014. It is still unclear which plan will ultimately be favored. For instance, the pro-Communist Trud speculates that the revised plan will be adhered to until after the 2012 elections – after which there is a chance that the rate of excise tax increases will be stepped up.

The fear amongst Putin, lobbyists, most Russian regions, and about 50% of Russians as per a VCIOM poll, the main effect of rapid price rises is going to be negative, as many people will supposedly only switch to “dangerous and unregulated homebrews, as well as poisonous surrogates like eau de cologne, shoe polish and even jet fuel”, according to Mark Schrad of the NYT. The Gorbachev experience, in which alcohol laws were made stricter from 1985, is continuously cited as evidence.

I remain to be convinced. First, according to that same VCIOM poll, 30% of Russians say they will continue drinking the same alcohol and another 20% say they will drink less; only 15% say they will start drinking homebrews and 4% will look for bootlegged vodka.

Second, for all that maligned Soviet experience of restricting vodka, life expectancy increased from 67.7 years in 1984 to more than 69 years for the rest of its existence (peaking at 70.0 years in 1986-87); and only fell below the late Soviet-era low in 1993, when the state’s vodka monopoly was dissolved and the country was in the midst of a rapid socio-economic collapse. Now given the differences between the Soviet Union and modern Russia, namely that there are far more alternatives to hard spirits, e.g. beer and wine, increasing prices will probably be even more effective now.

Gorbachev's anti-alcohol campaign: now maligned, but more or less successful while it lasted.

Gorbachev’s anti-alcohol campaign: now maligned, but more or less successful while it lasted.

So while I don’t usually agree with Boris Nemtsov, I can only support him in his condemnation of the regime for reducing the scope of vodka and tobacco excise tax increases.

EDIT 5/18/2011: Synopsis of final FinMin plans from Kommersant. The growth in excise taxes will be minimal until after the 2012 elections. From July 1st, 2012, they will start increasing at a faster rate, reaching 500 rubles per 0.5l of spirits (prev. 901 rubles) and 1040 rubles per 1000 cigarettes (prev. 874 rubles) – with the possibility of going higher if the action is coordinated with neighboring Belarus and Kazakhstan. The result is that the typical price of a lower-range 0.5l vodka bottle will rise from 125 rubles now, to 175 rubles in H2 2012, 220 rubles in 2013, and 260 rubles in 2014. The minimal price of a pack of cigarettes will rise from 16 rubles now, to 22 rubles in 2012, 29 rubles in 2013, and up to 38 rubles rubles in 2014.

As expected, this is a substantially watered down version, under which the price of vodka and tobacco will remain well under Western norms through to 2015. Cynical electoral populism, and the influence of the alcohol and tobacco lobbies, are working to limit the potential public health gains that could have resulted from a more aggressive plan for raising excise taxes on spirits and tobacco.

(Republished from Sublime Oblivion by permission of author or representative)
 
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As you may have noticed, posting has slowed down in the past few days, mostly thanks to a combination of (1) Kindle, (2) 中文 and (3) the natural periods of apathy that afflict most non-pro bloggers. I don’t really see that changing until the end of the year…

1. Sayonara, Luzhkov. Props to Jesse Heath for predicting it, Patrick Armstrong for IMO the best summary, and STRATFOR for the most bizarre interpretation (they think Luzhkov was dismissed because the Kremlin no longer needs him to control the Moscow Mob). The best way of viewing this is not as a struggle between the tandem, or even Medvedev asserting himself, but as the latest stage in the campaign to replace entrenched regional barons with civiliki that are closer to the Kremlin. This appears to be part of the overall Kremlin drive towards greater centralization and technocratic management.

2. Structural Remilitarization? Of far greater long term import than the political scuffles around the Moscow mayoralty is the gigantic, even prodigal, plans and figures are being bandied around by senior members of the Russian leadership for the 2011-2020 rearmament program (1, 2, 3). The main points of the program are to spend 22 trillion rubles (c. $700bn) over the next decade to modernize Russia’s increasingly obsolete military hardware, complementing domestic items with imports from foreign countries like Israel, France and the US*.

These are huge sums for an economy with a nominal GDP of $1230bn in 2009 (the US has $14.3tn). To put this into perspective, taking into account changes in relative prices, $700bn of dollar spending in Russia would translate into about $1200-1500bn in the USA (e.g. just compare the unit costs of equivalent fighters, the higher salaries of researchers, etc). That’s $120-150bn in procurement and R&D per year. For comparison, in 2009 the US spent $219bn, and this figure is likely to decrease in the years ahead due to fiscal constraints and withdrawal from Iraq and Afghanistan. As Steven Rosefielde speculated back in 2004, we may see the start of a “full-spectrum, fifth-generation rearmament” next year. If so, the wisdom of this course must be questioned:

  • Thanks to peak oil and growing demand for natural resources, this is now fiscally feasible (unlike in 2000, or even 1990 for that matter). But Medvedev’s absurd claims that military modernization is going to be “a generator of innovation” to the contrary, these investments are more likely to distortive and misallocative.
  • The move towards professionalization has been a flop and it is now evident that the conscription system will be retained for the foreseeable future (with minor adjustments, such as stricter controls on waivers, to make up for the coming 40% reduction in the pool of conscript-aged men due to the fertility collapse of the 1990′s). This is unfortunate, not only because dedovschina remains as prevalent as ever (the cutdown in military service to one year has altered the pattern of hazing, from age-based hierarchy to alpha/beta-male in/out-group dynamics), but because Russia has no discernible need for a million-strong military.
  • What exactly is the use of so many soldiers with 5th-gen hardware? Countries like Georgia, Azerbaijan or Uzbekistan are already walkovers. In the South Ossetia War of 2008, the main problem wasn’t with the weaponry, but with “softer” factors such as unit coordination. There is a vast range of non-military levers that can be used against Belarus or Ukraine. War with NATO is almost entirely theoretical, and as with China, will probably have a nuclear endgame.
  • Another factor that is often overlooked is the danger of over-investing into the 5-th gen paradigm, and in doing so becoming locked into it (e.g. much like the USSR build thousands of tanks in the early 1930′s that were obsolete by the time 1941 rolled by). In reality, it is just a transitional step towards the real face of future war: drone fighters; all-electric ships with railguns and laser weapons; massively networked forces with a plethora of robotic platforms, etc.

* I suspect that the reason why Russia finally disallowed weapons sales to Iran, including of the S-300, was because of an informal deal with the US allowing it market access to some of its military technologies.

3. Heatwave Toll. The demographic stats are showing a big mortality spike in July-August 2010 due to the Great Russian Heatwave, especially in the central and Volga regions. The overall excess mortality during the period is now at around 55,000 – almost twice as much per capita as during the 2003 European heatwave in France. Detailed info on Rosstat’s demography page.

4. Russia’s GDP up 30% this year!!! That is, unless (1) the World Bank made a clerical error or (2) the IMF and CIA are more reliable. ;)

I was looking through Wikipedia’s latest GDP lists and observed that the World Bank’s estimate for Russia’s real GDP in 2009 was $2.7tn, which is $18,900 per capita. (The IMF and CIA estimates are unchanged at the usual $2.1tn.)

IF accurate, the World Bank revision would indicate Russia is the world’s sixth largest economy and within spitting distance of Germany’s $3tn economy. In per capita terms, it would put it in the same league as Poland, Estonia and Hungary or nearly 60% of the EU average.

So what gives? In your opinion, are the newer estimates more accurate? Were there any political motivations behind it, e.g. the reset?*

* The IMF and WB are not unknown to sometimes make drastic changes in
GDP estimates. For instance, two years back China’s real GDP suffered
a 40% cut. Perhaps not entirely coincidentally, China was within spitting distance of overtaking the US at the time of the revision!

5. Is Russia really more corrupt than Greece, let alone Pakistan? Stay tuned for the Karlin Corruption Index, a sequel to the Karlin Freedom Index.

(Republished from Sublime Oblivion by permission of author or representative)
 
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The two dunces.

The two dunces.

During the past two years, Russian “dissident” liberals Boris Nemtsov and Vladimir Milov have produced a frankly maniacal quantity of so-called “Independent Expert Reports” (there are now seven of them) that purport to debunk the “persistent myths imposed by official [Kremlin] propaganda”. The authors say that their latest exegesis, melodramatically entitled “Putin. The Results. 10 Years” and at 48 pages one of their shorter works, will have a print run of one million copies and will be distributed throughout Russia’s regions. This latest iteration of Nemtsov’s anti-Putin screed differs little in substance from the first, which was pilloried by Sean Guillory in Nemtsov’s White Paper: Bombshell or Dud?

Though Sean castigated the “dynamic duo” for their middle-class chauvinism, neoliberal elitism and poverty of proposed solutions, even he was far too kind in granting them the benefit of the doubt on their “litany of statistics, examples, and facts” showing that Russia had been brought to the brink of collapse by Putin (of course Russia was pushed well past that brink under Yeltsin, when Nemtsov reached his political apogee; but I digress). Now I hadn’t previously read any of Nemtsov and Co.’s earlier scribblings, but their introduction to this latest report raised my suspicions. Apparently, one myth peddled by Kremlin propagandists is that under Putin, Russians began to “give birth more and die less”. Of course, anyone with the slightest familiarity with Russian demography knows this is either a howler or a mendacious lie. If these guys can’t be relied on to get simple facts right, facts which can be looked up on the Internet within seconds, what basis is there to trust them on anything else they have to say? So I decided to sneak a peek at Nemtsov’s chapter on Russia’s demography… and discovered a truly epic mountain of red herrings, statistical manipulation and outright lies worthy of a Brezhnev-era Goskomstat apparatchik.

Nemtsov’s Bomb Defused

The chapter in question is entitled “A Dying Country”… not only is it a kitschy trope, but one that is no longer really valid as Russia saw positive population growth in 2009. But whatever. The choice of title fades into irrelevance in comparison with what comes next.

1. According to the Gospel of Vlad and Boris, one of the main tenets of the “Putinist mythology” concerns Russia’s recent demographic progress, in stark contrast to the “1990′s national extinction”. The authors then invite us to look at the “facts”, which apparently look something like the graph below.

[My translation of Nemtsov's graph (the "Yeltsin" and "Putin" insertions were my own, but otherwise it is unchanged). Click to enlarge.]

Where to start? First, the giant elephant in the room that our democracy crusaders “forgot” to mention was that immigration into the Russian Federation was far higher in the 1990′s than it was during the Putin period. From 1992-1999, Russia received a one-off 3.6mn influx of net migrants, the vast majority of them ethnic Russians repatriating from the other former Soviet republics. During the 2000-2009 period, Russia received just 1.5mn net migrants. This single factor of declining net immigration would account for almost two thirds, or 2.1mn out of 3.4mn, of the “extra” population decline under Putin.

Second, drawing any conclusions just from a straightforward calculation of Russia’s average yearly population decline under Yeltsin and Putin is an exercise in complete absurdity, given that Yeltsin’s early years were influenced by the (relatively) low Soviet mortality rates and high fertility rates, while Putin’s were influenced by the (relatively) high mortality rates and “lowest-low” fertility rates of the Yeltsin legacy. A more nuanced analysis would:

  • Identify defining trends instead of using blanket averages: a transition to fullblown “hyper-mortality” by 1994, a series of peaks and dips under a Yeltsin and early Putin administration that couldn’t care less for the nation’s demography, and concrete improvements after 2005 when the state began to take these issues seriously.
  • Take into account Russia’s aging population (which places upwards pressure on mortality rates over time), and hence use a statistic that is independent of the population age structure: life expectancy, which at 69 years in 2009 was higher than at any time during the Yeltsin period, when it fell from 68 years in 1992 to 65 years by 2000.

Third, note that the vertical axis Nemtsov uses stretches from just 140mn to 150mn people, giving the impression (to the passing eye) that Russia’s population completely collapsed under Putin and most likely continues to retreat into oblivion (whereas a year by year graph would show population decline flattening out during the past 2 years). This is of course done on purpose to elicit a negative emotional reaction.

2. The next paragraph discusses “hyper-mortality” – the fact that Russia’s mortality rates are abnormally high for an industrialized country at peace. This is a major problem I have written about at length, though since it has been metastasizing since as far back as the mid-1960′s what it has to do with Putin must remain a mystery. Yet even here Nemtsov can’t refrain from “embellishing” an already depressing picture. He does this by citing Russia’s mortality and fertility statistics from the CIA, whose demographic stats on Russia paint a bleaker picture than those produced by Rosstat, the Russian statistical agency.

Let me explain. As a rule, only national statistics services have the manpower and regulatory resources to compile comprehensive demographic (economic, etc) statistics on their own countries. The stats you see from international institutions like the World Health Organization are mostly drawn and aggregated from them. Same goes for the CIA on demography, except that since it rarely brings its figures into “sync” with updated ones produced by the national statistics agencies, most of its demographic data is the result of inhouse projections of what the demographic situation might be given a set of increasingly obsolete past assumptions instead of current measures. Hence, whereas Nemtsov claims that Russia has a birth rate of 11/1000 and a death rate of 15/1000 based on July 2009 CIA figures, the real numbers for that year were a birth rate of 12.4/1000 and a death rate of 14.2/1000. Ultimately, this is a fairly minor point, but it does illustrate how Nemtsov is very selective about the data he uses (he has no problems with citing Rosstat on numerous other occasions).

3. The authors begin showing their reactionary colors when they come to dissing Russia’s rising natality. Granted, not quite as in your face as in their first Report, but the ass is still showing. This section is worth translating in full.

Excessively rapid fertility growth in a non-affluent country, especially amongst the lumpenized segment of the population (which are receiving pro-natality stimuli thanks to Putinist measures such as “maternal capital”[20]), could lead to negative consequences: a reduction in the standard of living, poor caretaking of the newborn, and high rates of illness amongst them.

In April 2008, the Health Minister Tatyana Golikova was forced to admit that this [fertility] increase was accompanied by an increase in infant mortality in 48 regions of the country.

[20] For “maternal capital” of 250,000 rubles [AK: today equivalent to $8,000], based on average housing costs it would have only been possible to buy 4-5 square meters of living space.

They’re really getting desperate, firing at every possible angle in the hope of hitting Putin, aren’t they?

First, forget the negative long-term consequences of the continuation of “lowest-low” fertility (seen up until 2006, hovering at 1.3 children per woman). Is Nemtsov really disconnected and foolish enough to believe that Russians will rally to his holier than thou middle-class chauvinism? Especially considering that most Russians have paternalistic views of government, believing that it should help the poorest members of society? Considering that many Russians complain that they want two children but can only afford one?

Second, the authors transparently try to give the (false) impression that Russia’s recent fertility spurt was accompanied by rising infant mortality through very selective quoting of Golikova. Was that really the case? Not at all. Data on infant deaths per 1,000 live births: in 1990 – 17.4; 2000 – 15.3; 2006 – 10.2; 2007 – 9.4; 2008 – 8.5; 2009 – 8.2; 2010 – still falling

4. Then we come to a rather banal history of Russia’s hypermortality with a generous serving of anti-Putin spin. I’ve translated a typical segment below and filled in what Nemtsov wants you to think on reading it.

The rise in Russia’s mortality began way back with Brezhnev, during the 1970′s [AK: actually from the mid-1960's but whatever], and continued up until the mid-1990′s [AK: hence Yeltsin and the reformers can't be blamed for any of this... according to the Gospel of Vlad and Boris]. In 1995, however, Russia’s mortality began to fall and in 1998 retreated below 2 million deaths per year [AK: 1) by "below 2 million deaths", he means 1.99 million deaths - not kidding!, 2) the inconvenient truth that death rates began to soar again in 1999 during the last year of the Yeltsin Presidency - in the aftermath of the 1998 financial crisis, which was enabled by the incessant stealing within Yeltsin's inner circle (and happening to coincide with Nemtsov being Deputy Prime Minister!) - naturally goes unsaid].

But under Putin, the tendency towards a rise in mortality rates acquired a new strength, and reached a new peak of 2.37mn deaths in 2003 [AK: this at a time when Putin was still surrounded by Yeltsin's "Family" cronies and occupied with consolidating a half-disintegrated state]. Lowering deaths back below 2 million still hasn’t been achieved [AK: but this is harder now that it was in 1998, since the Russian population in 2009 is now considerably older than it was back then!].

Look, if you really want to, it is just as easy to spin this the other way. Here’s an alternate narrative. The USSR was a healthy nation. Soviet mortality rates strongly increased under Gorbachev, thanks to the anti-alcohol campaign and the birthmark on his bald head (year: 1989, LE: 70 years). Then Yeltsin and his cabal of traitors undermined and collapsed the Soviet Union, resulting in a massive fall in life expectancy (year: 2003, LE: 65 years). However, heroic Putin rescued long-suffering Holy Rus’ from the Judeo-Dollar yoke in 2003 by attacking Khodorkovsky. Now everything is getting better because Putin kicks ass (year: 2010, LE: 70 years).

[Russia's life expectancy - closely tied *not* to politicians, "shock therapy", etc, but to alcohol affordability and consumption rates. In fact, perhaps one of the main healthcare achievements of the Putin era is that the correlation between (relatively) cheaper booze and higher mortality rates may have broken. Source: Rosstat data.]

Does the above sound kind of ridiculous? Not really any more so than Nemtsov’s narrative. His screed is the mirror image of what a fawning Kremlin sycophant would write.

5. Nemtsov proclaims in gloomy tones that Russia has a very high number of deaths from external causes, murders, suicides, alcohol poisoning, etc, the aim presumably being to present Putin as a bad ruler based on the ills of his kingdom. But what he doesn’t mention is that in recent years Russia’s mortality from “vices” (alcohol poisoning, homicides, suicide) has fallen back down to late Soviet levels and is now well below the peaks around 1994 and 2002-3.

[The drop in deaths from alcohol poisoning is probably the most encouraging indicator, because excessive alcohol consumption accounts for around a third of all Russian deaths (in the broad sense) and drives trends in homicides, accidents and suicides (in particular). Source: Rosstat.]

6. Nemtsov goes on to make another startling claim (to anyone remotely familiar with the situation on the ground).

Low quality healthcare remains a big problem [AK: certainly], and Putin didn’t manage to do anything about this during ten prosperous years [AK: wtf?]… Russia spends just 5.3% of its GDP on healthcare, like Morocco or Ecuador, in contrast to 9-11% in many countries of Western Europe.

Many, many people would disagree with him. E.g. the guys at The Lancet, a respected British medical journal.

A vigorous anti-alcohol campaign, new road safety measures, and a programme of health awareness workshops for teenagers are among the positive signs 6 months after the Kremlin introduced a new 12-year health-care blueprint which identified the “formation of health as a priority in the social and spiritual values of Russian society” as a key task.

Even Nemtsov’s fellow liberal reformer Yegor Gaidar (as translated by Mark Adomanis):

In 2009, despite the economic crisis, expenditures on healthcare from the Federal budget grew 25% in nominal terms from 231.4 billion rubles to 289.5 billion rubles. Expenditures from the budgets of the subjects of the Russian Federation remained practically at the previous level: 518.7 billion rubles against 520.1 billion in 2008. Taking into account investments to obligatory medical insurance of the working population, state financing of healthcare grew in 2009 by 5.6% (2.9% in real terms) having reached 1.06 trillion rubles. This differentiates the situation in 2009 from the crisis in 1998* when state expenditures on healthcare and spending by the population on medicines and medical services all declined.

At the beginning of 2009 the government made a decision to continue the realization of the national project “Health” until 2012. The project’s financing still comes out of funds of the federal budget as well as off-budget funds: the Federal fund of obligatory medical insurance and the Fund of social insurance. Despite the economic crisis and the significant reduction in government income, expenditures on the national project not only weren’t subject to reduction, but grew by 20.2% in comparison with 2008. This attests to the real priority of this project in the government’s budget policy.

*But Kathryn Stoner-Weiss told me that Yeltsin defended Russians’ welfare better than Putin!!

7. Then a big sprinkling of statistics and anecdotes about trends in consumption of alcohol and illegal drugs, and smoking. For once in this chapter I think Nemtsov makes a valid point about the Russian government’s overly cosy relations with the alcohol and cigarette lobbies, which have prevented or delayed the passage of needed legislation. Nonetheless, even here Nemtsov’s point is (politically) wrecked by the class hatred that he just can’t keep bottled in. Sean’s summary of Nemtsov’s position still applies:

The poor “drink more” and the wealthy live the “high life.” In contrast, the middle class is the archetype of healthy and productive living. “Moderate use of alcohol and a healthy lifestyle in general,” they write, “is the way of the middle class.”

Now there might well be research showing that this is the case, as Nemtsov claims. (He doesn’t provide a link or citation). But it certainly isn’t the kind of language that is going to get anything more than 5% of Russians fired up with puritanical bourgeois fervor.

Furthermore, Nemtsov’s comparison of Russia’s 30,000 annual drug-related deaths to its (lower) losses during ten years of war in Afghanistan will surely be viewed as offensive and asinine by most Russians. There is a fundamental difference between the two in that people (by and large) make the choice to become drug addicts, whereas Soviet conscripts had little to no choice about being sent to the graveyard of empires. Incidentally, one of the reasons for the increased flow of heroin into Russia in recent years that Nemtsov decries so much is the US inability or unwillingness to control the growth of opium production in Afghanistan**… (But don’t forget that in the Russian liberal universe America is always right and if it isn’t then suck on it).

8. Nemtsov miscomprehends the French Paradox, saying that the reason the French lead long lives despite a high alcohol consumption rate is because they drink fine wines. (The real paradox has to do with their low rates of heart disease and high rates of saturated fats consumption)*. However, he is correct in his (one-line) suggestion, a rather obvious one, that incomes have to improve if Russians are to afford more expensive drinks.

His suggestion for cutting smoking rates? “It is necessary to implement the successful experience of the US and Western European countries that was accumulated over decades”. You don’t say, Sherlock?! While it is valid to say that Russia’s progress on this front has been on the slow side, it is not fair to imply, like Nemtsov does, that nothing is being done.

9. Now Nemtsov talks about depopulation and labor force decline without trying to distinguish between them.

Population decline has a long-term character. In the last few years and in the near future Russia will lose one million people of working age annually due to the high mortality rates and natural population aging. The loss of one million workers is equivalent to a fall in GDP of 1.5%, and a loss of revenues to the budget, which will lead to problems with paying for pensions and as a result to social stresses. Therefore, chronic depopulation threatens economic development and puts into question the future territorial integrity of the country.

First, Russia’s population has already returned to growth (or more accurately “stabilization”) in 2009, thanks to rising fertility and life expectancy. Second, declines in the working population are now inevitable, but Nemtsov curiously neglects to mention that this was made inevitable by the fertility collapse of the early 1990′s during the Yeltsin period! Nonetheless, he need not worry too much. According to the Rosstat medium scenario, the labor force will fall from 62% of the total population now… to a truly apocalyptic rather unremarkable 55% by 2030.

Furthermore, Nemtsov’s mixing of depopulation and labor force decline is particularly disingenuous because each counteracts the other. If Russia’s population falls, this means it will have failed to raise its life expectancy or fertility rate, and hence its labor force will be higher as a percentage of the population. Paradoxically, if Russia sustainably stabilizes its population by improving people’s health and getting them to have more children, its labor force will shrink much faster as a share of the population for the very reason that this population will have more children and pensioners! (To illustrate this, the labor force in 2030 is at 57% of the population in Rosstat’s low scenario and at 54% in its high scenario).

10. Finally Nemtsov talks the talk about migration.

Instead of [pursuing an effective immigration policy], in 2002 the Putin regime passed repressive [AK: sic!] immigration legislation, which increased illegal immigration while reducing the flow of law-abiding and hard-working citizens into the country. In the 1990′s near 8 million Russophones arrived into Russia from the post-Soviet republics [AK: just to clarify, this is *not* net immigration; during the period, many Russians also left Russia]. With Putin’s arrival this process came to an abrupt halt.

The sudden reduction in the numbers of immigrants became the main cause of the plummeting Russian population during the Putin years relative to the 1990′s.

Look, while I’m not a huge fan of said 2002 law, calling it “repressive” is well beyond the pale – especially for any politician the least concerned about his popularity! It is also interesting to note that Nemtsov puts this section on immigration at the end of the demography chapter, well away the graphs showing population decline under Yeltsin and Putin. One can only assume that Russians wouldn’t be so moved by Russia’s almost-stable population under Yeltsin had they known that it was only being sustained by an unsustainable inflow of ethnic Russians repatriating from the Near Abroad!

[Would an honest observer interpret the above graph as a "sudden reduction in the numbers of immigrants" under Putin? Source: from Rosstat. Click to enlarge.]

Which brings us to a much bigger misrepresentation by Nemtsov. He essentially claims that thanks to Putin’s mismanagement of migration policy (the 2002 law is cited), ethnic Russian immigration came to a halt. Yet as we can see from the graph above, Russia received by far the biggest numbers of migrants during the early to mid-1990′s. By 2000, most ethnic Russians who would ever immigrate back to Russia from the Near Abroad had already done so. This process was always due to come an end, regardless of who was President, and had already mostly petered out by the late 1990′s. (The new uptick in immigration from 2006 mostly consists of Central Asian, Caucasian, and Ukrainian Gastarbeiter drawn to Russia’s rising affluence).

Conclusions

This chapter “A Dying Country” constituted about 20% of Nemtsov’s paper by word count, so it is a valid gauge by which to judge the rest of it. Now demography is a pretty easy subject, especially when it comes to checking up on straightforward factual claims. For this post I didn’t need much else other than Rosstat, Wikipedia, and my sick googling skills. ;) In contrast, making accurate statements on the economy, an entity that can be measured and interpreted in any number of ways, is much harder. And assessing levels of corruption is an order of magnitude harder still, since it relates to the quantity of that economy that people take so many pains to hide away from view. So if one finds so much blatant ignorance or deceit in a big chunk of work dealing with demography – practically on every paragraph – chances are the overall opus isn’t worth anyone’s time.

The pattern of simplification and misrepresentation appears to be repeated throughout the entire paper. For instance, take Nemtsov’s graph of the structure of Russian exports in the chapter on the economy, which shows the share of hydrocarbons exports soaring from 44.9% in 1999 to 69.6% in 2009, while hi-tech exports fell from 10.9% to 4.9% during the same period. But only a hack like Nemtsov would say that this proves that Russia under Putin became more resource dependent “than ever before in its history”. For a start consider that the price of oil rose from $16.56 in 1999 to $91.48 in 2008! If there is a sixfold increase in oil prices over a decade, then its share of total exports was practically bound to increase too, barring Russia blowing up all its pipelines! (Besides, that would be “energy imperialism”). But even all this neglects a more fundamental fact: while Russian exports remain dominated by resources because they constitute its comparative advantage, Russia’s domestic economy has, in real terms, become substantially more productive, more services-centered and less extraction-heavy since the late 1990′s (in relative terms).

Now a defender of this Report may accuse me of missing its entire point – isn’t Nemtsov politicking against equally nefarious Kremlin propaganda? Isn’t it perfectly normal and acceptable for politicians to play fast and loose with the facts? While this may normally be an argument, this is not the case here. First, Nemtsov and Milov portray themselves as paragons of accountability and integrity (as opposed to the kleptocratic Kremlin regime) – if they want to demand their bed they have to lie in it too. Second, these ass-clowns entitle their work an “Independent Expert Report” for crying out loud! I am approaching Nemtsov’s writings on his own terms – as an analytical work. It is on its own analytical merit that it either stands or falls under the weight of its lies and contradictions.

But what about its impact as a political statement? Nemtsov’s only natural constituency, as evidenced by his classist rhetoric, is “the urban, semi-intellectual, semi-politically engaged class” who now make up around 25% of the Russian population. A not inconsiderable potential base, true, but they more than most in Russian society owe their allegiance to Putin; it was under his system that they made – or made off with – their wealth. No amount of one-sided paens to the glory Yeltsin years delivered by Nemtsov is going to change that. And although Nemtsov does make some faux populist overtures, they are hardly going to win him any supporters from amongst the lumpen-proletariat whom he wants to breed out into extinction! (Assuming they even bother reading the 12,000 words of what is really a very dull paper). No, the Gospel of Vlad and Boris is only going to be treated as such by the 50,000 odd signers of the Putin Must Go petition, at least in Russia. As for abroad…

In an interesting twist to the story – and ironically what made me aware of Nemtsov’s report in the first place – Russian police confiscated 100,000 of the one million copies of the Report and sent them to the MVD’s “extremism” department for analysis. Coming as it does on the eve of the St. Petersburg International Economic Forum, where “Medvedev is set to hobnob with businessmen from around the world”, Nemtsov and Milov could not have hoped for a better source of publicity. Tinpot dictatorship here we come! Once again, the idiotic zeal of Russian officialdom elicits outraged editorials in the Western (and Russian) press, snickers from the suave and sophisticated, and delivers further confirmation of Russia’s impending slide into totalitarianism to the typical Westerner.

Not to mention endless frustration for people like myself. I am even coming to think that the deaf Russian state might just deserve its blind liberals.

* Though I do agree with Nemtsov that getting Russians to switch from samogon to vodka to wine or beer is a good strategy as far as these things go. Me from two years back: ;)

Convert wine production into a strategic industry and massively fund its expansion. Try to remake Russia into a wine-drinking nation. Aim to turn vodka into an exclusively export industry.

** That said, I’m very skeptical about the (self-interested?) arguments, or alarmism, of Russia’s anti-narcotics department. To test if this is a major, rapidly-spreading drug epidemic, it is logical to look at death rates for the most-affected demographic groups. Say, 20-25 year old males, among whom death rates are low and mostly due to external causes and poisonings.

Take the death rate for 25 year old males in Russia, a demographic group that would be one of the most exposed to drug abuse (Nemtsov cites the average age of death of Russia’s druggies as being 28). In 2000, i.e. before the Afghanistan campaign, it was 0.0060, and it stayed above 0.0050 until 2007 when it fell to 0.0047, and in 2008 fell further to 0.0041. These improvements, one would think, would have been exceedingly unlikely had there been a big jump in Russian heroin consumption.

(Republished from Sublime Oblivion by permission of author or representative)
 
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In a recent post, Mark Adomanis pointed out that the Russian economy has done significantly better than many other East European nations during the recent crisis and is now mounting a strong recovery. He also speculated on the effects of the crisis on the demography of badly-affected countries such as Romania, Bulgaria, and the Baltics, on the basis that “Russia’s experience during the 1998 debt default amply demonstrates that cutting healthcare budgets and pensions in the midst of an economic catastrophe causes a lot of excess deaths among vulnerable sectors of the population”.

Now I’ve never really worried about the consequences on mortality of an economic recession, because I don’t buy into The Lancet‘s arguments that it was the reduction in Russian social spending in 1998 that contributed to the mortality wave of 1999-2002, since the increasing affordability of, and consumption of, alcohol was by far the more convincing factor. (Also, in industrialized states, recessions tend to correlate with falls in mortality rates). On the other hand, hard recessions – especially ones which result in reduced public spending on social welfare – usually are associated with substantial reductions in fertility. In this post I’m going to take a look at how valid these observations and theories are in light of the recent economic crisis in Eastern Europe.

Russia. At the start of the crisis in late 2008, I expected Russia’s fertility rate to fall slightly – though nowhere near the magnitudes predicted by Russia’s “demographic doomers”, of course. (Though even for that I got a lot of flak). Yet ironically even my predictions turned out to be too pessimistic, probably because increased government spending meant that Russians’ social welfare hardly suffered at all during the crisis. Even Russia’s fertility rate continued to climb, reaching 1.56 in 2009 (2008 – 1.49, 2007 – 1.41, 2006 – 1.30), a level last seen in 1992. And like I said, Russia’s trends towards falling mortality actually accelerated, with life expectancy for both genders hitting 69.0 years in 2009 (2008 – 67.9, 2007 – 67.5, 2006 – 66.6, 2005 – 65.3) – a level that was only ever previously observed in 1963-1974 and 1986-1991. Most encouragingly, Russians’ mortality from “vices” – homicide, alcohol poisoning, and suicide – have fallen back to their late Soviet levels. The decline in alcohol poisonings is particularly good because much of Russia’s “hyper-mortality” (including the high rate of heart disease) is tied to excessive alcohol consumption.

[Source: Rosstat].

Demographic improvements relative to the same period last year continued in Q1 2010, with the birth rate up another 1.3% and mortality rates falling by 2.0% (inc. by about 10% for external causes). (The figures on fertility are particularly significant when you recall that Russia reached the nadir of its economic crisis in H1 2009). According to Sergey Slobodyan’s demographic model, the data indicates that a projection of 1.9-2.0mn deaths and 1.8-1.9mn births in 2010 is feasible, meaning that natural population decrease will almost cease (the total population should grow, as last year, due to immigrants).

Conclusion – contrary to hysterical predictions of economic and demographic apocalypse propagated about Russia in late 2008, the real impact on social welfare was very marginal and the demographic situation actually continued to improve. This year, Russia’s life expectancy will probably approach 70 years (still very low for an industrialized country) and its total fertility rate will hit around 1.6 children per woman (as in Canada). Although the mortality rate remains very substandard relative to the industrialized world, current healthcare and anti-alcohol initiatives are helping usher in rapid improvements.

PS. There has been a small update to Rosstat‘s demographic projections. Its middle projection now indicates a population of 140.9mn and its high projection a population of 146.7mn in 2025, relative to 141.9mn in 2009; in the last few years, Russia’s demography has tracked between the High and Medium projections. (This is in line with my own forecasts).

Ukraine. Mark Adomanis claims that Ukraine has a “much more serious demographic crisis than Russia”. But much as one can condemn Orange mismanagement of the economy and social relations, it can’t really be said in good faith that its demography is a lot worse. Whereas its birth rates are lower and its death rates are higher than Russia’s, this is in large part because Ukraine has a marginally older median age than Russia.

Let’s instead use measures that cancel out the effects of specific population age structure. Ukraine’s life expectancy (68.3) was marginally better than Russia’s (67.8) in 2008 (World Bank), and its big mortality reductions in 2008-09 indicate that it kept the lead. Similarly, Russia’s fertility rate (1.49) is not awesomely bigger than Ukraine’s (1.39) in 2008, and may be partly or wholly explained by the fact that Russia’s demographic collapse in the 1990’s was both quicker and sharper than Ukraine’s. Finally, both countries have been displaying very similar demographic dynamics in recent years, despite their political differences – a moderate recovery in fertility rates (from a low base), and plummeting death rates (from a very high base).

[Source: World Bank Development Indicators. Note that for all the vast differences in the political economy and post-transition success of Russia, Latvia, Belarus, and Ukraine, their fertility (and overall demographic) dynamics are remarkably alike].

Now what about the crisis, which hit Ukraine much harder than Russia? (Ukraine’s GDP declined by 15% in 2009, compared to Russia’s 9%, and it wasn’t cushioned by increased government spending on social welfare). Ukraine’s birth rate increased ever so slightly from 11.0/1000 in 2008 to 11.1/1000 in 2009 (but fell from 11.2/1000 in Jan-Feb 2009 to 10.7/1000 in Jan-Feb 2010). Meanwhile, its death rate decreased from 16.3/1000 in 2008 to 15.2/1000 in 2009 (and from 17.2/1000 in Jan-Feb 2009 to 16.4/1000 in Jan-Feb 2010). In crude terms, Ukraine had a higher rate of natural population decrease than Russia (-4.2/1000 versus -1.7/1000 in 2009), and its overall population is still falling fast because unlike Russia it does not have many immigrants.

Nonetheless, the Ukrainian crisis is now easing and the new government seems to be moving from concentrating on historical grievances to modernization and stability. Given the inherent similarities between and increasing integration of Russia and Ukraine, their demographic dynamics will probably be likewise similar – a recovery of fertility rates to 1.7-1.8 within a few years, a rise in life expectancy to 75 years within a decade, substantial net migration to Russia and zero net migration to Ukraine. The result would be a slowly rising or stagnating population in Russia, and a stagnating or slowly falling population in Ukraine.

Conclusion – Ukraine is experiencing a demographic recovery, with particularly impressive gains in life expectancy during the crisis. Though its fertility rate remained more or less stagnant, it now again shows signs of improvement – a good sign, since nine months ago Ukraine was still at its economic nadir.

Belarus. Thanks to its isolation from the global financial system, Belarus did not experience much of an economic crisis at all. It’s GDP even grew by 1.5% in 2009, and has since expanded by 6.1% in Jan-Apr 2010 relative to the same period last year. But ironically, its demographic improvements have been modest.

The birth rate rose from 11.1/1000 to 11.6/1000 and the death rate rose from 13.8/1000 to 14.2/1000 from 2008 to 2009*. (In Q1 2010 relative to the same period last year, the birth rate fell from 11.3/1000 to 11.2/1000 and the death rate fell from 15.3/1000 to 15.1/1000). The rate of natural increase eased slightly to -2.5/1000 in 2009, from -2.6/1000 in 2008.

This means that Belarus retained a fertility rate of about 1.45-1.5 children per woman in 2009, compared to Russia’s 1.56 and Ukraine’s 1.4-1.45, and its life expectancy was somewhat higher than both at 70.5 years in 2008 (very slightly lower in 2009), compared with Russia’s 69.0 years in 2009 and Ukraine’s 68.3 years in 2008 (maybe a year higher in 2009).

Conclusion – despite emerging from the crisis largely unscathed, the demography of Belarus showed no significant improvement (or deterioration).

Latvia. Latvia saw a catastrophic decline of GDP of 18% in 2010 and its welfare state has been decimated to a degree unparalleled anywhere else in Europe (at least so far). From 2008 to 2009, births fell by 9.5% and marriages, a very rough indicator of future fertility, fell by a truly stunning 23.3%. The decline continued into 2010, with births in Jan-Mar falling by 11.6% and marriages declining by 22.4% on the same period in 2009. Since Latvia’s total fertility rate was a not too healthy 1.45 back in 2008, this means that it is now in one of the deepest demographic chasms in Europe.

[Source: Latvijas Statistika].

On the positive side, Latvia did see modest improvements in its mortality rates, which fell by 3.6% from 2008 to 2009 (though they’ve remained almost stagnant so far in 2010). Unsurprisingly, after a period of demographic recovery in the 2000′s, Latvia’s rate of natural population decrease has started opening up again, rising from a loss of 7058 people in 2008 to 8220 people in 2009, and almost certain to increase further this year.

Small consolation. Going by the experiences of other countries in the region, the falling marriage rate in Latvia should have been accompanied by a simultaneously falling divorce rate, so the post-2008 annual decline in net couple formation should have been less than 20%.

Estonia. Estonia’s had a milder recession than Latvia with a GDP fall of 14% (it’s all comparative!) and it did not decimate its welfare state to quite the same extent. It also started from a position of significantly greater affluence and its fertility rate was at 1.66 children per woman in 2008. The number of births fell by 2.6% from 2008 to 2009, and by a mere 0.9% in the first four months of 2010 relative to the same period last year. This decline was outpaced by improvements in longevity, with mortality rates falling by 3.7% in 2009 relative to 2008, and a further 3.5% in the first four months of 2010 relative to the same period in 2009. Since it now shows signs of mounting an early recovery, the crisis should not make a big dent in Estonia’s long-term demographic prospects.

Lithuania. Their situation seems to have become somewhat worse, based on the monthly estimates of the population size for 2009. But their national statistics site is bad and doesn’t have detailed recent data so I can’t really say much more than that it is worse than in Estonia but far better than in Latvia.

Conclusion – the crisis has been a demographic disaster for Latvia, with its total fertility probably falling to a “lowest-low” rate of around 1.2 children per woman by 2010. Since its economic crisis seems to be deep and long-lasting, with deleterious effects on social welfare, we can expect a resumption of demographic free fall and perhaps a rise in ethnic Russian emigration to (fast recovering) Russia. In contrast, Estonia’s stronger foundations weathered the crisis well and its total fertility rate, now at perhaps 1.6 children per woman, is still relatively healthy by East and Central European standards.

Caucasus. In Armenia, the crude death rate remained unchanged at 8.5/1000 from 2008 and 2009, while the birth rate rose from 12.7/1000 to 13.7/1000, despite its big decline in GDP during the crisis. Given that its total fertility rate was at 1.74 in 2008, it is doing fine. Georgia is probably doing OK, since their population actually rose in 2009 – the only other post-Soviet year in which Georgia experienced population growth was in 2006, which happened to coincide with Russia’s deportation of illegal Georgian immigrants.

Moldova. Doesn’t have vital stats for 2009. Its overall population fell by five thousand people in 2009 relative to 2008, which is lower than usual, since on most years it falls by around ten thousand. I don’t think this was due to demographic improvements – don’t forget that many Moldovans were returning from their work in Russia during its recession in 2009.

Rest of post-Soviet space. Azerbaijan and Central Asia don’t need to be considered since they have healthy demographics anyway.

The Balkans. Birth rates and death rates seemed to have remained essentially stable from 2008 to 2009 in Bulgaria and Romania, with a slight improvement overall. Crisis hasn’t affected them much – at least, not yet.

Final conclusion – overall, the crisis did not greatly affect the demography of the Eurasian region. There continued to be modest improvements in the two most populous nations, Russia and Ukraine. The death rate has fallen rapidly during the crisis almost everywhere, the sole exceptions being Belarus and Romania where it increased by a tiny amount. On the other hand, birth rates have either risen slowly (e.g. Russia), stagnated (e.g. Ukraine), or fallen slowly (e.g. Estonia). The major exception is Latvia, where birth rates have collapsed at an amazing rate from regional average to “lowest-low”. This reflects the particular severity of the economic crash in Latvia.

* The real rise in the birth rate and the death rate from 2008 to 2009 are actually slightly exaggerated. That is because from 2009, Belarus lowered its total population (on the basis of which birth and death rates / 1000 people are calculated) to correlate with the preliminary results of the 2009 Census. The actual number of births rose from 107.9 thousand to 109.8 thousand and the number of deaths rose from 133.9 thousand to 135.0 thousand.

(Republished from Sublime Oblivion by permission of author or representative)
 
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What liberasty does to you over the years.

What liberasty does to you over the years.

So I decide to write about Putin’s mistakes to counter my public image as “ein strammer Putin-soldat“, and guess what, the first comment I get denounces me as a “completely naive and/or delusional person” for daring to “take “Russia’s corruption trends” seriously” (I suppose it proves the old dictim that you can’t please everyone all of the time). Anyhow, to atone for my brief lapse into liberast heresy, I return to my old neo-Soviet ways by translating Russian businessman and LJ blogger gosh100‘s excellent short essay “On Liberasts and Liberasty” (Про либерастию и либерастов) from June 2007. In doing so, I hope to introduce “liberast” and “liberasty” into the English lexicon to denote Russia’s self-styled liberals, who are in fact anything but liberal in word and deed*. Enjoy!

Liberasty is a contagious disease that binds the patient’s worldview to a few uninspired principles:

  1. There’s nothing but shit in Russia and it will never improve.
  2. The state is incompetent by definition, and anything it does only worsens the situation further.
  3. The Russian people deserve their suffering because they are a herd of brain-dead sheeple.
  4. Russia must make unconditional concessions and show unflinching obedience to the West.
  5. This is because the West is, by definition, the beacon of freedom, justice, and rationalism to the entire world, and wishes Russia only the best.

Liberasty affects the human brain with varying degrees of severity, from the first degree (mild form of disease that has almost no effect on the personality) to the fourth degree (critical, irreversible degeneration, frequently associated with a disturbed psyche). Below are some examples of liberasts classified according to the severity of their illness:

This pathosis can be both innate (under certain mental disorders) and acquired (infectious). There are several avenues of transmission, including long exposure to liberasty carriers or mass media with a liberast slant (e.g. Novaya Gazeta, Russian Newsweek, Profile, Echo of Moscow, Kommersant, Novye Izvestia, MK).

Liberasty can be diagnosed by the following symtoms.

  • Usage of expressions such as “this country”, “fed up with this sovok”, “need to bug-out [from Russia]“, “but in the West”, “Rasha”, etc**…
  • Devotion to liberast media outlets (see above).
  • Negative reactions to all new state initiatives and negative spin on any events that happen in Russia.
  • Only very active or negligible involvement in political life.
  • Frequent quotation of Solzhenitsyn, Suvorov (Rezun), and articles by famous liberasts (see above).
  • Poorly educated liberasts can be identified through their frequent use of the word “putztriot”*** (since they find the idea of Russian patriotism altogether difficult to understand).

High risk groups: Persons of Jewish nationality, students, unemployed with higher educations, liberal arts majors with low earnings, tourists from the provinces recently returned from their first trip to the West.

Recommended treatments: High-paying job or profitable business, a failed emigration, reading non-liberast literature and journals, frequent communication – preferably on business matters – with typical Westerners.

Preventive measures: Regular perusal of inosmi.ru.
PS. That’s it, Inosmi has been infected. Achtung!
But Profile has since achieved recovery under its new editor Mikhail Leontyev.

* Most of Russia’s self-styled liberals would be considered reactionary neocons and Tea Baggers in America (progressive Europeans and Americans might be interested to know that Russia’s liberals are only “liberal” in the 19th century sense of the word, in that they love capitalism and the middle class but hate the poor, support bombing brown people, and deny global warming).

Since most Russians are statists, the liberasts enjoy the support of, at best, 5% of the population (this rejection makes the liberasts bitter, making them view Russians as stupid and herdlike, which certainly bolsters their wild popularity and electoral prospects). Nonetheless, they are taken to be the genuine voice of the Russian opposition by ignorant or cynical Western chauvinists.

** Translating “употребление выражений «эта страна», «достал совок», «надо валить», «а вот на Западе», «Рашка»” literally is pretty hard.

*** The Russian word the liberasts use in referring to а Russian patriot, or “патриот”, – is “поцтреот”. According to an this site, this word is an amalgamation of paTRIOT (треот) and POTS (поц), which is Yiddish slang for the male sexual organ. Translated directly in English, this would be “putztriot”, from “putz” and “patriot” (h/t poemless). An archetypal example of a putztriot is someone who leaves absurdly over-the-top nationalist comments on YouTube videos such as this (e.g. “РУССКИЙ НАРОД В СТАНЕТ С КОЛЕН. НЕ ДОЛГО ОСТАЛОСЬ СМУТЕ!!!”).

(Republished from Sublime Oblivion by permission of author or representative)
 
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paul-goble Mark Adomanis, who recently burst into the Russia-watching blogosphere like a fluffy pink grenade, has a series on “Who is the world’s worst Russia analyst”? (So far Stephen Blank and Leon Aron are in the running). Personally, I think that Ed Lucas would “win” hands down. However, since he’s already been exposed and discredited on this blog, – and I don’t have the time or will to flog dead horses – let’s instead take a closer look at Paul Goble, the oft-cited “Eurasia expert” whose output seems to consist entirely of recycling stories from marginal Russian commentators about the country’s imminent demographic apocalypse, breakup along ethnic lines, and takeover by Muslims. If one fine day some random Tatar blogger on LiveJournal decides to restore the Qasim Khanate, we’ll certainly hear about it on his blog… and guess what, we do!

Sure, he might be a fact-challenged Russophobe propagandist who worked for the CIA, Radio Liberty, and “democracy-promoting” NGO’s. Yes, he has extensive professional links to the Baltic nations and Azerbaijan. True, he is essentially an agent of a latter-day Promethean Project, the interwar Polish strategy to preempt the reemergence of a Eurasian empire by stirring up ethnic separatism in the Soviet space, a project now pursued by Washington and its proxies. That is all understandable and commendable – he serves US geopolitical aims, and geopolitics is profoundly amoral, so what’s the problem? Why am I writing a hit piece on Paul Goble? Simple. The utter hypocrisy and double standards I encountered in his Jan 2010 ‘No Ordinary Year’ for Azerbaijan article, in which the guy who incessantly condemns Russia’s human rights, takes to advising Western countries to refrain from reprimanding authoritarian Azerbaijan because the “level of anger about such criticism is so great” that it could lead to a “rebalancing of Azerbaijan’s foreign policy away from the West”. Or translated from quackademic neocon-speak into English, “They might be bastards – though nowhere near as bastardly as the Russians, I mean they even pay me my salary!, – but they are our bastards!”

Ali Novruzov, an Azeri human rights blogger, condemns this duplicity, characterizing Goble’s viewpoint as: “Don’t criticize Azerbaijan, no matter how many Emins and Adnans are beaten and jailed, how many grams of heroin are found in shoes of Eynulla Fatullayev, how many villages like Benaniyar is ransacked by government militia and its residents detained en mass, shut up you, Amnesty International and State Department, otherwise Azerbaijan will get angry, turn away from you and befriend Russia”.

He certainly has reason to be concerned. Even Freedom House, a “democracy measuring” organization that gives freedom cookies for being friendly with the US (bonus points if you have oil) and takes them away for being “anti-Western”, rates Azerbaijan as “unfree”, on the same level as despised Russia. Given that Azerbaijan hits the Full House in that it is 1) relatively pro-Western, 2) oil-rich, and 3) nestled in a crucial geopolitical region, there is cause to suspect that it would perform a lot worse on any objective analysis of political freedoms. We don’t even have to suspect this, we can just head over to Polity IV, – a vast research project that attempts to quantify levels of democratization in different countries since World War 2 – and observe that Azerbaijan scored -7 in 2008, on a scale from -10 to 10. This makes it a formal “autocracy”, the same as China (-6) or Iran (-7), – and far worse than its neighbors Russia (5), Armenia (5) or Georgia (6). No wonder, since unlike in Russia there is not even the simulacrum of political competition, and the Presidency is passed down along hereditary lines.

However, as alluded to at the beginning, hypocrisy, double standards, and Western chauvinism aren’t Goble’s only talents – they’re just the ones that roused my ire enough to write this piece. The fact of the matter is that article after article, Goble demonstrates the most fact-challenged, non-sequiturial, inane claptrap – and manages to get himself cited and listened to by major institutions which determine Western policy towards the region. Debunking his drivel is thus in any case long overdue.

1. Let’s start with this article (October 2008) on how the financial crisis was supposed to “compound” Russia’s demographic decline. It conveniently illustrates Goble’s OM – seek out the most sensational (and wrong) opinions in the Russian language media and reproduce them in his articles. By adding his label/name to them, they become citable to the rest of the Cold Warrior clique and even some respectable institutions that are ignorant of Goble’s incompetence and bias.

The financial crisis in the Russian Federation has pushed up the already high rates of mortality from heart and circulatory diseases there to third world levels, according to medical experts.

This sentence is wrong on so many levels. First, in Third World countries, mortality from heart/circulatory diseases is typically LOWER than in industrialized nations (since there are few older people and the population continues dying from infectious diseases, particularly amongst younger ages). Second, Russia has had one of the world’s highest levels of mortality from heart/circulatory diseases SINCE AT LEAST the 1980’s – it is NOT a recent development, as implied by Goble! Third, how the financial crisis figured into this I have absolutely no idea, since it only began to affect most Russians in October (the same month Goble’s article was written), and at which time the latest Russian demographic statistics only covered AUGUST 2008!

Yevgeny Chazov, one of Russia’s senior specialists on heart disease, told a Duma hearing that as a result of the difficult psycho-social circumstances and stresses from instability in the country, 1.3 million people – 56 percent of the total number of deaths there – now die from heart disease.

As has been the case FOR THE PAST 60 YEARS – i.e., a pattern of mortality heavily tilted towards heart disease – ever since the epidemiological revolution from 1930-50. And instability has been a feature of Russian life for the PAST 20 YEARS. Chazov was misquoted, or is a dummy; Goble, in any case, is certainly a dummy.

But if many speakers blamed the financial crisis or personal behavioral choices like smoking or alcohol consumption, one, Aleksandr Baranov, the vice president of the Academy of Medical Sciences, was prepared to blame the Russian government. Medical science knows how to lower mortality, he said, but we haven received an order from the powers that be.

There is a lot of investment in newly-equipped hospitals and clinics since 2007, and positive results are already showing. The current situation is far better than under Yeltsin or the early Putin years, when healthcare and social spending in general were cut and neglected, back when Russia’s robber barons wallowed in their ill-begotten billions with Western connivance. Baranov either lives under a rock, or wants to score rhetorical points. The financial crisis is irrelevant. Excessive alcohol consumption is what causes 1/3 of all Russia’s deaths. Reducing it is should be by far the #1 priority of any harm reduction strategy for Russia, and the “powers that be” have indeed recognized this and launched an anti-alcohol campaign. Nor surprisingly, Goble fails to mention any of this.

Finally, and most importantly, REAL LIFE HAS PROVED GOBLE TOTALLY, 200% WRONG. Contrary to the vision of demographic doom he peddled, deaths from cardio-vascular disease fell by 4.6% in 2009. Furthermore, RUSSIA SAW ITS FIRST POPULATION INCREASE IN 15 YEARS! And Goble’s predictable response to his utter failure at prediction?… “Russia’s Population Stabilization Only Temporary“.

2. Now let’s move on to the more general theme of Goble’s thesis on Russia – as an imperialistic country in rapid decline (demographic, cultural, etc), afflicted by an imminent, sub-Saharan scale AIDS epidemic, it will break up along its ethnic faultlines (Tatars, Bashkirs, Finno-Ugric peoples, Caucasians) and become majority Muslim by 2050. For instance, see a 2006 briefing he gave to Radio Liberty, which they summarized thus:

But Russia’s Muslims are bucking that trend. The fertility rate for Tatars living in Moscow, for example, is six children per woman, Goble said, while the Chechen and Ingush communities are averaging 10 children per woman. And hundreds of thousands of Muslims from Tajikistan, Uzbekistan and Kazakhstan have been flocking to Russia in search of work. Since 1989, Russia’s Muslim population has increased by 40 percent to about 25 million. By 2015, Muslims will make up a majority of Russia’s conscript army, and by 2020 a fifth of the population. “If nothing changes, in 30 years people of Muslim descent will definitely outnumber ethnic Russians,” Goble said.

Goble’s comments to RFERL made their way into the wider commentariat in 2006-07, such as this article in SFGate, Daniel Pipes, and certain plain demented Russophobe bloggers.

Unfortunately for Russophobes, Islamophobes, and Islamists alike (quite an adorable grouping, isn’t it?!), Goble’s projections are complete twaddle. In 2005, the year before Goble started spouting off about Russia’s Islamification, the homeland of Russia’s Tatars, Tatarstan (1.26), had a LOWER total fertility rate than the Russian average (1.29)! Where did Goble get the figure of 6 women per children amongst Tatar women in Moscow? Stormfront Russia?!

Likewise, the figure of 10 children per women amongst Muscovite Ingush and Chechen women is risible and should be laughed off by anyone with the smallest knowledge of demographic history. Not only did Ingushetia (1.56) and Chechnya (2.91) themselves have far lower figures in 2005, a total fertility rate of 10 children per woman HASN’T BEEN OBSERVED IN PRACTICALLY ANY COMMUNITY, EVER!! (Even in PRE-INDUSTRIAL times, the fertility rate typically flunctuated between 4-8 children per woman, depending on factors like urbanization and food affordability. The idea that it could be 10, or anyone near that number, in a modern metropolis, is ludicrous in the extreme).

As for the Muslim-takeover-by-2050ish claim, this is the usual bogus fallacy of linear extrapolation of the worst-case trends with total, cavalier disregard for positive trends (e.g., the convergence of ethnic Russian and Muslim fertility rates) and current day facts (e.g., that ethnic Russians still make up nearly 80% of the population, WHEREAS ONLY 4-6% OF THE POPULATION CONSIDER THEMSELVES TO BE MUSLIMS in opinion polls; that the fertility rates of the biggest Muslim ethnicities, Tatars and Bashkirs, is little different from the national average; and that Russia’s Muslims are far less religious than their counterparts in the Middle East and Western Europe alike).

In fact, sometimes I wonder if Goble really works for the CIA/Azerbaijan, or Russian Slavophile nationalists. He is certainly willing to cite the propaganda of the latter when it suits his purposes.

3. Now what about the imminent AIDS apocalypse, that will further decimate the ranks of Russia’s vodka-swilling, impotent hordes, making them too sick and too few to prevent Russia from disintegrating “into as many as 30 pieces by the middle of this century” (March 2009)? In his ominous-sounding article February 2009 article Russia’s HIV/AIDS Epidemic Enters New and More Dangerous Phase, Goble wrote:

In his briefing yesterday, Onishchenko did not provide much context for the numbers he reported. But in an interview with “Nauka i zhizn’,” Boris Denisov, a demographer at Moscow State University, suggested that figures like those Onishchenko provides are more disturbing than the public health chief in fact suggested (www.nkj.ru/archive/articles/15097/). …

The Moscow State researcher pointed to three aspects of the situation which suggest Russia has reached the tipping point regarding HIV/AIDS and that the epidemic is likely to result in an increasingly large number of deaths, something that will have a serious impact on the over-all demographic picture of that country.

First and foremost, 63 percent of the new cases in the Russian Federation last year were the result of sexual contact rather than intravenous drug use, a pattern that means the disease has now passed into the general population where it may spread more slowly but could potentially touch far more people and where an increasing share of its victims will be women.

This Eurasia “expert” can’t even copy from his Russian sources correctly. If you look at the source Goble cites, what Denisov actually said was that 63% of new FEMALE infections came from sexual contact in 2007, whereas 34% of OVERALL new infections came from heterosexual contact. If he’s so wrong on such basic facts, why should we have to listen to anything he says on Russia’s AIDS problem?

4. And it goes on and on. One of his most amusing/ridiculous articles was about how Putin was starving his miserable subjects (December 2009):

After seeing an improvement in caloric consumption since the 1990s, Russians are again consuming an average of only 2550 calories a day, an amount comparable to the amount provided by the diet given German POWs in Soviet camps at the end of 1941 and one that casts a shadow on that country’s demographic future. …

“According to the estimates of international experts,” the Russian leader said in striking language, “if the population goes hungry for two or more generations, a situation that in fact is quite characteristic for a large group of countries, then processes of physiological and intellectual degradation at the genetic level arise.”

What a load of claptrap even by Goble’s dismal standards. First, the recommended caloric intake for not very active adult men is around 2500 and around 2000 for adult women. Averaging it and taking into account children and the elderly, and the optimal for a nation where most people do office jobs is around 2100-2200 calories. In this respect Russia is far better off at its quoted 2550 calories, than the US is at 3700.

This is not to deny that there are problems. During crisis-wracked 2009, some 10% of Russians had difficulty buying food – slightly up from 9% in 2008, but massively down from the glorious prosperity of 1998-99, when some 36% of Russians could barely afford this privilege. (Incidentally, in the “free” Ukraine of 2009, the hungry indigent made up 35% of the population – i.e., the same as Russia ten years ago!).

But it gets worse. I simply have no words to describe the sheer inanity of the comparison between 2009 Russia and 1941 German POW’s. Really – how the fuck can he even take himself seriously after writing shit like this? Unless he means to say that during the 1990′s, when Russia’s economic policies were directed by a neoliberal cabal from Washington and many people really did go hungry, Yeltsin’s government treated Russians worse than Stalin treated soldiers who were fighting a war of extermination against Russians. So is Goble also a crypto-Stalinist, or just an asinine idiot?

(Not that Medvedev is the sharpest tool in the box either, if he actually spewed that insane drivel about genetic degradation. Since most of humanity has spent 99.9%+ of its entire history at near-subsistence levels of food consumption, why the hell isn’t everyone intellectually degraded like Goble or Medvedev?)

And the same shit goes on and on, Goble’s never-ending Groundhog Den’. All of Russia’s negatives are made apocalyptic, all its positives made into negatives.

Two examples of the latter. Take his befuddling assertion that the “Russian Federation will be more profoundly and negatively affected by global warming over the next 40 years than will any other country”. Come again? Sure the melting of Siberian permafrost might collapse a few buildings and fuck up some gas pipelines, but ALL serious analyses of global warming suggest that Russia will suffer FAR LESS than almost all other nations in a warmer world, and may even make big bank under moderate warming as its agriculture expands into Siberia, new energy and mineral deposits become accessible, and the Arctic becomes the world’s major trade region.

Second example. Medvedev declared a need for modernization and more accountability, and guess what – Russia is therefore a failing, decrepit state about to embark on perestroika 2.0! Ok, if you want (superficial) historical comparisons for Putvedev’s Russia, you could justify making it with Stolypin’s reforms, with Peter the Great’s “revolution from above”, even with the “Great Break” of 1929 if you’re feeling really bold and unafraid of being accused of reducing everything in Russian politics to Stalin. But the late 1980′s = today = WTF? Back then, the Soviet state truly was in a profound state of “imperial overstretch”, its citizens were disillusioned, and its mounting fiscal obligations were outrunning the resources and foreign currency at its disposal. Today’s Russia is a confident, rising Power, its elites are united, and a firm and consistent majority of Russians uphold the Putin system of illiberal statism (and if anything the main complaint you will hear from them is not that there is too much illiberality and statism, but too little!). Given such a tectonic shift in the very foundations of the Russian state during the past two decades, such vapid analogizing is superficial in the extreme, and indicative of an ideological decrepitude amongst the neocons that is every bit as profound as the one which afflicted the late Soviet Union.

So what is Goble’s game? He seems to be genuine in his bizarre beliefs – for instance, in an interview shortly after the 2008 South Ossetia War, he stated that Russia’s “illegal” violation of Georgia’s borders is “not in the interest of continued existence of the Russian Federation”, which will lead to “a more authoritarian and hence a more unstable and poor Russia in the future”. (Of course, how letting regional upstarts like Saakashvili rip off chunks from Russia’s southern underbelly would HELP the continued existence of the Russian Federation is not at all clear). Nonetheless, this kind of analysis seems highly favored by the lowest common denominator in the Russia-watching world – Paul Goble is, at least according to the number of tags assigned to him (“43 topics” at the time of this article’s writing), is the most popular outside authority at the infamous hate blog La Russophobe. He is also highly regarded at his former place of employment, the corrupt Radio Liberty.

Why? All these institutions are, in some way, and whether they realize it or not, pursuing a script first written in 1918 Poland – the Promethean Project to break up Russia and forever forestall its reemergence. What few of them realize is that 1) they are utterly ineffectual in this endeavor, and 2) their overt Russophobia, and close association with Russia’s “liberal” West-worshiping ass-lickers, ACTUALLY REINFORCES THE VERY SIEGE MENTALITY that the Kremlin shares with ordinary Russians. In other words, the lies and double standards espoused by people like Goble strengthen the very same “retrogressive” tendencies in Russia that they profess to loathe.

(Republished from Sublime Oblivion by permission of author or representative)
 
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This post tries to debunk some popular, but misguided, views on demographic trends in today’s Russia. These consist of the perception that Russia is in a demographic “death spiral” that dooms it to national decline (Biden, Eberstadt, NIC, CIA, Stratfor, etc). Some extreme pessimists even predict that ethnic Russians – ravaged by AIDS, infertility and alcoholism – will die out as an ethnicity, displaced by Islamist hordes and Chinese settlers (Steyn, Collard).

The Myth of Russia’s Demographic Apocalypse

Think again. While it is true that Russia’s current demographic situation is nothing to write home about, most of the demographic trends that matter are highly positive – and there is compelling evidence that Russia can still return to a healthy, longterm pattern of sustainable population replacement.

1

MYTH: Russia is losing 750,000 of its population per year and will become depopulated within decades.

REALITY: In 1992, for the first time since the Great Patriotic War, deaths exceeded births in Russia, forming the so-called “Russian Cross”. Since then the population fell from 149mn to 142mn souls. However, the rate of depopulation has slowed massively in recent years.

As of 2008, there were 362,000 more deaths than births in Russia, down from 847,000 in 2005. Furthermore, adding in migration would give a total population loss of just 105,000 people in 2008, equivalent to -0.07% of the population, which is a massive improvement from the 721,000 fall in 2005. The situation continued improving in 2009, despite the economic crisis, with Russia seeing positive natural increase in August and September for the first time in 15 years.

[Source: Rosstat; analyzed & published by Sergey Slobodyan @ Da Russophile].

Though this is still far from demographic salubrity, the situation today more resembles the stagnation seen in Central Europe than the catastrophic collapse of athe transition era, and the trends remain positive. As such, pessimistic predictions of imminent demographic apocalypse are becoming increasingly untenable.

2

MYTH: Granted, Russia’s crude birth rates have risen in recent years. But this was all due to the big size of the 1980′s female cohort, which reached childbearing age in the 2000′s; since the 1990′s cohort is about 40% smaller, birth rates will tumble again.

[Source: Rosstat; edited by Anatoly Karlin].

REALITY: From 1999-2007, only 37% of the increase in the crude birth rate was due to an increase in the size of the childbearing age segment of the population (only 10% in 2007 itself). The rest came from an increase in the total fertility rate (TFR), the average number of children a woman can be expected to have over a lifetime, irrespective of the structure of the age pyramid.

Speaking of which, Russia’s TFR has risen from a nadir of 1.16 children per women in 1999, to 1.49 children in 2008 (and thus also breaking the “lowest-low” fertility hypothesis that states that no society has ever recovered from a fertility collapse to below 1.30 children). The figures for 2009 will almost certainly show a TFR above 1.50.

This is not to say that the coming reduction in the fertility contribution of the 1980′s “youth bulge” will not exert a growing downwards pressure on Russian birth rates in the next two decades. However, a growing TFR will be able to partially, or even fully, counteract these adverse trends.

3

MYTH: The recent rise in fertility is small and fragile, based on the temporary effects of new maternity benefits and pro-natality propaganda. It will shatter as soon as the first economic crisis interrupts Russia’s petro-fueled swagger.

REALITY: It is true that Russia’s current TFR, at 1.5 children per woman, is well below the 2.1 needed for long-term population stability. That said, there are compelling reasons to believe that we seeing an incipient fertility reversal in Russia.

First, fertility expectations today are little different from those of the late Soviet era when the TFR was near replacement level. According to numerous surveys since the early 1990’s, Russians consistently say they want to have an average of 2.5 children. This is broadly similar to respondents from the British Isles, France and Scandinavia, who have relatively healthy TFR’s of around 1.7-2.1. This suggests Russia’s post-Soviet fertility collapse was caused by “transition shock” rather than a “values realignment” to middle-European norms, where people only want 1.7-1.8 children.

Second, a major problem with the TFR is that it ignores the effects of birth timing. A more accurate measure of long-term fertility is the average birth sequence (ABS), which gives the mean order of all newborn children. If in one fine year all women in a previously childless country decide to give birth for some reason, the TFR will soar to an absurdly high level but the ABS will equal exactly one.

[Source: Demoscope; edited by Anatoly Karlin].

In Russia the ABS remained steady at 1.6 children per woman from 1992-2006, little changed from the 1.8 of Soviet times, even though the TFR plummeted well below this number. This indicates that many women were postponing children until they settled into careers and improved their material wellbeing – a hypothesis attested to by the rising age of mothers at childbirth since 1993. As such, it is not unreasonable to expect a compensatory fertility boom in the 2010′s.

[Source: Demoscope; edited by Anatoly Karlin].

Though this may be a false positive if many women remain childless, the 2002 Census indicated that only 6-7% of women did not have any children by the end of their reproductive years. This indicates that childlessness is not in vogue and worries about widespread abortion-induced sterility are overblown.

Third, a new, confident conservatism has recently taken hold in Russian society. After two decades of disillusionment, at the end of 2006 consistently more Russians began to believe the nation was moving in a positive than in a negative direction. The state began to reconstruct an ideological basis for belief in Russia’s future, which included the aforementioned maternal benefits and pro-natality campaigns – and contrary to pessimist assertions, the examples of France and Sweden indicate that such efforts tend to be successful at incubating longterm improvements in TFR. Can it really be the case that the genesis of Russia’s rediscovery of belief in itself, and of consistent improvements in its demography, were a matter of mere coincidence?

Fourth, the cohort now entering the workforce will probably enjoy greater job opportunities and higher wages because of the imminent shrinking of Russia’s labor force. This may provide incentives to marry earlier and have more children, which would compensate for this cohort’s smaller size. Nor are they likely to be subjected to taxes high enough to discourage family formation; relative to continental Europe, Russia is still a younger nation and can be expected to enjoy high energy revenues in the post-peak oil age.

Finally, the economic crisis has come and gone – and in stark contrast to popular predictions of a renewed fertility collapse and higher deaths from alcoholism (which I challenged in the face of heavy opposition), Russia saw its first two months of natural population growth for the last 15 years in August and September 2009. So the notion that Russia’s demographic recovery is built on quicksand has been objectively refuted.

4

MYTH: Russia’s main demographic problem is not the fertility rate, but a dismally low life expectancy, especially for middle-aged men.

REALITY: It is true that Russia’s life expectancy is exceptionally bad by industrialized-world standards. Death rates for middle-aged men today are, amazingly, no different from those of late Tsarism – a phenomenon Nicholas Eberstadt termed “hypermortality”. This tragic development is almost entirely attributable to the extreme prevalence of binge drinking of hard spirits, which accounts for 32% of Russia’s aggregate mortality (compared to 1-4% in West European nations)

However, not all demographic indicators are created equal. High mortality rates only have a direct impact on the replacement-level TFR when significant numbers of women die before or during childbearing age, as in Third World countries. Russia’s infant mortality rate of 8.5 / 1000 in 2008 is close to developed-country levels and not statistically significant. Though tragic and unnecessary, its “hypermortality” crisis mainly affects older men and as such has negligible direct effects on fertility.

That said, mortality rates must be curbed if Russia is to avoid significant population decline in the coming decades. Contrary to prevailing opinion, plans to raise life expectancy to 75 years by 2020 or 2025 are feasible if approached seriously. From 1970-1995 in Finnish Karelia, better healthcare and lifestyle reforms reduced incidences of heart disease, Russia’s main cause of death, by over 70%. Considering the sheer size of the gap between Russia and the advanced industrial world, even modest improvements will have a big impact.

These modest improvements are now coming about. Russia is now installing new equipment in oncology centers, aims to increase access to hi-tech medical services from 25% to 80% by 2012, and is becoming more serious about implementing anti-smoking, anti-alcohol and safety measures. In 2008, Russia’s life expectancy, as well as deaths from accidents (including alcohol poisoning, violence, and suicide), have improved past the (pre-transition) levels of 1992 – and the recovery continues into 2009.

5

MYTH: There is an unrivaled panoply of social ills in Russia, such as sky-high rates of abortion, alcoholism and accidents. These will induce Russians to disinvest in the future, which will result in low economic growth and a perpetuation of its death spiral into oblivion.

REALITY: Quite apart from this being a “mystical” explanation for national decline, and hence unscientific, this assertion is not backed up by the historical record. All these social ills first manifested themselves in the USSR from around 1965 (accompanied by sky-rocketing male mortality rates), yet nonetheless, that did not preclude Russia from maintaining a near replacement level TFR until the Soviet Union’s dissolution – and ultimately, that is all that matters for maintaining longterm population stability.

The Russian abortion rate was nearly twice as high during the Soviet period relative to today, but today’s prevalent fears of widespread infertility as a byproduct somehow never materialized – the 2002 Census indicated that only 6-7% of women did not have any children by the end of their reproductive years. Today, abortions continue on their longterm decline, even in the aftermath of the late-2008 economic crisis (and despite the hysterical predictions to the contrary).

[Source: Demoscope; edited by Anatoly Karlin].

Similarly, excessive alcohol consumption – the major cause of “hypermortality” amongst middle-aged Russian men – set in long before the post-Soviet demographic collapse. (Observe how closely Russia’s historical mortality trends correlate to Nemtsov’s estimates of alcohol consumption in the graph below). Yet as mentioned above, high middle-aged male mortality rates have no direct impact on fertility rates. Furthermore, since there is no major discrepancy between the numbers of men and women until the age of 40, women have no physical problem in finding mates (though it is true that high mortality and alcoholism amongst males has a suppressing effect on new couple formation, the late Soviet experience suggests that it does not altogether preclude a healthy TFR).

[Source: Rosstat, V. Treml & A. Nemtsov; note that the official Goskomstat (Rosstat) figures ought to be discarded because they do not account for moonshine, which may constitute as much as half of Russia's alcohol consumption].

The demographer Eberstadt asserts that Russia’s high mortality rates preclude human capital formation through education because men facing elevated mortality risks (supposedly) discount its future value; consequently, this dims the prospects for longterm economic growth. This hypothesis doesn’t stand up to the evidence. The late Soviet Union had one of the world’s highest tertiary enrollment rates, and more than 70% of today’s Russians get a higher education. This should not be surprising due to human psychological factors – “deaths from heart disease and accidents only happen to other people”; and besides, even if a Russian man assumes he’ll die in his 50′s or 60′s, he’d still rather live comfortably, avoid the military draft, etc, than sweep the streets. So this argument is flawed on many, many levels.

It is true that poor health lowers economic productivity. However, one should note the caveats that 1) hypermortality disproportionately effects poorer, lower-educated people, 2) in the post-agrarian society, the main driver of productivity improvements is education – not health, and 3) there is a silver lining in that by curbing aging, a low life expectancy also relieves pressure on pensions. Finally, drunkenness by itself cannot check the growth of a vital civilization – after all, America was known as the Alcoholic Republic during the early 19th century.

6

MYTH: The ruling elite’s criminal neglect of Russia’s growing AIDS crisis will soon result in hundreds of thousands of annual deaths, further accelerating its demographic collapse.

REALITY: Institutions like the World Bank were predicting hundreds of thousands of deaths by 2010, yet the death toll for 2008 was only 12,800. Further, the percentage of pregnant women testing HIV positive plateaued in 2002, suggesting the epidemic remains essentially contained among injecting drug users.

[Source: 2008 Russian AIDS Progress Report].

The problem with the “doomer” models used to predict apocalypse (Eberstadt, NIC, Ruhl et al, etc) is that their projections of imminent mass deaths from AIDS unrealistically assume heterosexual, sub-Saharan Africa transmission patterns, which is unbacked by sociological analysis or surveillance data. A more rigorous model by the Knowledge for Action in HIV/AIDS in Russia research program predicts a peak HIV prevalence rate of under 1% of the total Russian population by around 2020. Thus far, it correlates with reality.

Finally, following a period of real neglect of the problem until 2005, the Russian state has since ramped up spending on AIDS to an annual 0.5bn $. One can no longer speak of official negligence.

7

MYTH: Faster-breeding Muslims will constitute the majority of the Russian Federation’s citizens by 2050, placing the dwindling Orthodox Russians under a brutal dhimmitude.

REALITY: Ethnic Russians still make up nearly 80% of the population, whereas only 4-6% of the population consider themselves to be Muslim in opinion polls. The fertility rates of the biggest Muslim ethnicities, Tatars and Bashkirs, is little different from the national average.

Even the Caucasian Muslim republics experienced a drastic fertility transition in the last twenty years, as a result of which the only one to still have an above-replacement level TFR is Chechnya. However, Chechnya’s 1.2mn people constitute less than 1% of the Russian total.

So the fact of the matter is that Russian Muslims simply do not have the demographic base to become anywhere near the Federation’s majority ethnicity in the foreseeable future.

[Source: Rosstat; edited by Anatoly Karlin].

Furthermore, the main reason some people fear – or relish – the prospect of an Islamic Russia is because they associate Russian Muslims with their less progressive co-religionists in the Middle East. In reality, vodka has long since dissolved away the Koran in Russia. The vast majority of Muslim Russians are loyal citizens, having made their peace with the imperial Russian state long ago; imminent dhimmitude is a myth, the product of fevered imaginations.

8

MYTH: The Chinese are taking over the depopulating Russian Far East by a stealth demographic invasion; tempted by Siberian Lebensraum and vast mineral riches, they will eventually seize it outright from a weakening Russia.

REALITY: There are no more than 0.4-0.5mn Chinese in Russia (and probably a good deal less). The vast majority of them are temporary workers and seasonal traders who have no long-term plans of settling in Russia. Even though the Russia Far East depopulated much faster than the rest of Russia after the Soviet collapse, at more than 6mn today, Russian citizens remain ethnically dominant.

Furthermore, the average Manchurian has no objective desire to migrate to Siberia and squat illegally in a pre-industrial farm in a God-forsaken corner of the taiga. Alarmism on this issue is a trifecta of ignorance, Russophobia, and Sinophobia (the “Yellow Peril”).

Though the possibility that Malthusian pressures will eventually force China into aggressive expansionism cannot be discounted, it would be suicidal to intrude on Russia because of its vast nuclear arsenal.

9

MYTH: But all the demographic models indicate that Russia is going to depopulate rapidly!

REALITY: Not all of them. I give an alternate range of scenarios that see Russia’s population change from today’s 142mn, to 139mn-154mn by 2025, and 119mn-168mn (medium – 157mn) souls by 2050.

In the “Medium” scenario, life expectancy reaches 74 years by 2025 (today’s Poland) and 81 years in 2050 (today’s Canada); the TFR rises from 1.4 children per woman in 2006 to 2.0 by 2015, before gently descending to 1.7 from 2025 to 2050; and there is an annual influx of 300,000 net migrants. (These assumptions are plausible, based on a realistic knowledge of the current situation (see above), and a modest amount of confidence in Russia’s spiritual regeneration and capability to sustain economic modernization). The resulting population dynamics are reproduced below.

scen21

[Source: Anatoly Karlin @ Da Russophile].

But even assuming Russia’s TFR gets stuck at 1.5 children per woman in 2010 – i.e. slightly lower than its level today, while retaining the aforementioned mortality and migration trajectories, the population size will remain basically stagnant, going from 142mn to 143mn by 2023 before slowly slipping down to 138mn by 2050.

On the basis of this model, I made several falsifiable predictions back in July 2008, whose fulfillment will confirm its validity (or not). The three most important predictions are the following:

  • Russia’s population will start growing again by 2010.
  • Natural population increase will resume by 2013.
  • Total life expectancy will exceed 70 years by 2012.

My results are somewhat similar to Rosstat forecasts which see the population growing to 134mn-145mn (medium – 140mn) by 2025. Furthermore, both of them are, at least thus far, more in line with reality than the older “doomer” models, which by and large failed to predict the recent demographic improvements.

10

MYTH: Okay then, the vast majority of models by respectable institutions – i.e., not those of Kremlin mouthpieces like Rosstat or yourself – project that Russia’s population is going to plummet to 100mn or so people by 2050.

REALITY: First, appeal to authority & association fallacy. Second, you can check the reliability of my model because my source code is open and accessible for all, which is more than you can say for many of these “respectable institutions” [edit 2012: No longer, because of this; but I am going to do a new version soon anyway]. Third, the problem with the aforementioned “doomer” models is that they are all essentially based on linearly extrapolating Russia’s post-Soviet fertility and mortality situation into the far future, assuming negligible improvements or even a deterioration (as in the models including the imminent, but fortunately non-existent, African-style AIDS epidemic).

It is my belief that Russia’s demographic “doomers” ignore the importance of the post-Soviet resilience of Russia’s fertility expectations, the evidence that Russia’s post-Soviet demographic collapse was just an aberration caused by its wrenching transition to a new socio-political system, and the newly-emerging sociological trends that are returning Russia’s to its past-and-future Empire – trends that are restoring Russians’ faith in the future, reinforcing social conservatism, and creating the conditions, with the Kremlin’s active support, for a major demographic reversal out of the post-Soviet abyss.

I would be the first to admit that this interpretation of Russian society may be incorrect, and consequently so are my “optimistic” demographic projections. Feel free to disagree with my interpretation, but do note that 1) I accurately called the economic crisis as a non-event in relation to Russia’s demography and 2) made falsifiable, near-term predictions about Russia’s future demography, which few other crystal-ball gazers care to do.

Speaking of crystal balls, I would like to end this by noting that pretty much all demographic projections beyond 20 years into the future – the approximate time needed for a new cohort to reach reproductive age – are near-useless in practical terms. Any simplistic extrapolation will eventually founder on the discontinuities inevitably produced by complex human systems: for a past example, compare 20th century French and German demographic history; regarding the future, note the profoundly disruptive potential of two strong concurrent trends – limits to growth, and technological singularity – either of which could so radically transform human life in the 21st century, as to render modern demographic analysis meaningless as a scientific tool.

Russia Demography Sources

Here are some key resources for understanding Russia’s demography:

Demography Articles @ Da Rissp[ho;e

Finally, a list of articles on Russian demography published at Da Russophile.

  • The Russian Cross Reversed? – initial thoughts on Russia’s fertility.
  • Out of the Death Spiral – an indepth look at its mortality crisis and prospects for improvement.
  • Faces of the Future – my model of Russia’s demographic prospects to 2050, which I argue are not anywhere near as dire as commonly portrayed by the alarmists. This is because the “pessimistic” models that forecast a decline to around 100mn by that date make questionable assumptions about continuing low fertility and high mortality patterns.
  • Myth of Russian AIDS Apocalypse – prognoses of an AIDS mortality crisis are unwarranted because they rely on unsubstantiated assumptions that the epidemic would be essentially heterosexual in nature and follow trends observed in sub-Saharan Africa.
  • Myth of the Yellow Peril – demolishes the myth that Chinese settlers are taking over the Russian Far East.
  • Rite of Spring: Russia Fertility Trends – most comprehensive versions of my demographic work to date, in which I argue Russia’s population will slowly increase or stagnate in the coming decades instead of plummeting as in most scenarios.Counter-intuitive and deeply contextualizing” – Thomas P.M. Barnett.
  • Russia’s Demographic Resilience – I predict the economic crisis will not have a major effect on Russian demography, especially in the longer term.
  • Through the Looking Glass at Russia’s Demography – in this summary of Rite of Spring, I note that Russian fertility expectations, average birth sequence figures and rising social confidence preclude a catastrophic fall in population over the next decades.
  • Russia’s Demographic Resilience II – this guest post by Sergei Slobodyan notes that contrary to the doomsayers, Russia’s demography continued improving in 2009 despite the economic crisis, with the population experiencing its first natural growth in August for the past 15 years.
  • Russia’s “Abortion Apocalypse”: А был ли мальчик? – a second guest post by Sergei Slobodyan unravels the media hysteria over a (non-existent) wave of crisis-induced abortions.
(Republished from Sublime Oblivion by permission of author or representative)
 
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This is a succinct summary of my views on Russian demography, written about 2 months ago.

Through the Looking Glass at Russia’s Demography
By Anatoly Karlin

In 1992, for the first time since the Great Patriotic War, deaths exceeded births, forming the so-called “Russian Cross”. Since then the population fell from 149mn to 142mn souls. Ravaged by AIDS, infertility and alcoholism, Russians are doomed to die out and be replaced by hordes of Islamist fanatics in the west and Chinese settlers in the east.

Or so one could conclude from reading many of the popular stories about Russian demography today. The total fertility rate (TFR), the average number of children a woman is expected to have, was 1.4 in 2007, well below the 2.1 needed for long-term population stability. Though current Russian birth rates per 1000 women are not exceptionally low, they will plummet once the 1980′s youth bulge leaves childbearing age after 2015.

Meanwhile, Russia’s life expectancy is exceptionally bad by industrialized-world standards. Death rates for middle-aged men today are, amazingly, no different from those of late Tsarism – a phenomenon Nicholas Eberstadt termed “hypermortality”. This tragic development is almost entirely attributable to the extreme prevalence of binge drinking of hard spirits.

No wonder then that the recent UN report on Russian demography forecasts its population will fall by 10mn-20mn people by 2025. Set against these gloomy trends, the projections made by the Russian government (145mn) and state statistical service Rosstat (137-150mn) for the same year seem laughably pollyannaish.

However, things aren’t as bad through the looking glass. First, fertility expectations today are little different from those of the late Soviet era, when the TFR was still relatively healthy. According to numerous surveys since the early 1990′s, Russians consistently say they want to have an average of 2.5 children. This is broadly similar to respondents from the British Isles, France and Scandinavia, who have relatively good TFR’s of around 1.7-2.1. This suggests Russia’s post-Soviet fertility collapse was caused by “transition shock” rather than a “values realignment” to middle-European norms, where people only want 1.7-1.8 children.

Second, a major problem with the TFR is that it ignores the effects of birth timing. A more accurate measure of long-term fertility is the average birth sequence (ABS), which gives the mean order of all newborn children. If in one fine year all women in a previously childless country decide to give birth for some reason, the TFR will soar to an absurdly high level but the ABS will equal exactly one.

In Russia the ABS remained steady at 1.6 children per woman from 1992-2006, little changed from Soviet times, even though the TFR plummeted well below this number. This indicates that many women were postponing children until they settled into careers and improved their material wellbeing – a hypothesis attested to by the rising age of mothers at childbirth since 1993.

Though this may be a false positive if many women remain childless, the 2002 Census indicated that only 6-7% of women did not have any children by the end of their reproductive years. This indicates that childlessness is not in vogue and worries about widespread sterility are overblown.

Third, a new confident conservatism has recently taken hold in Russian society. After two decades of disillusionment, at the end of 2006 consistently more Russians began to believe the nation was moving in a positive than in a negative direction. It is likely no coincidence that it the TFR began to consistently rise just then – from 1.3 in 2006 to about 1.5 in 2008, though generous new child benefits helped.

Many pessimists see this as empty petro-fueled swagger, prone to derailment by the first economic crisis. Yet marriage rates continued soaring in early 2009, mortality fell by 5% in Jan-Feb 2009 in comparison to the same period last year, and national morale remains high – notwithstanding the severity of the recent economic contraction.

High mortality rates only have a direct impact on replacement-level TFR when significant numbers of women die before or during childbearing age, as in Third World countries. Russia’s infant mortality rate of 8.5 / 1000 in 2008 is close to developed-country levels and not statistically significant. Though tragic and unnecessary, its “hypermortality” crisis mainly affects older men and as such has negligible direct effects on fertility.

However, mortality rates must be curbed if Russia is to avoid severe population decline in coming decades. Contrary to prevailing opinion, plans to raise life expectancy to 75 years by 2020 or 2025 are feasible if approached seriously. From 1970-1995 in Finnish Karelia, better healthcare and lifestyle reforms reduced incidences of heart disease, Russia’s main cause of death, by over 70%. Considering the sheer size of the gap between Russia and the advanced industrial world, even modest improvements will have a big impact.

And speaking of which, Russia is now installing new equipment in oncology centers, aims to increase access to hi-tech medical services from 25% to 80% by 2012 and is implementing anti-smoking and anti-alcohol measures. Deaths from alcohol poisoning and violence, as well as overall life expectancy, recently improved to the pre-transition levels of 1992.

The percentage of pregnant women testing HIV positive plateaued in 2002, suggesting the epidemic remains contained among injecting drug users. Models projecting imminent mass deaths from AIDS unrealistically assume heterosexual, sub-Saharan Africa transmission patterns, which is unbacked by sociological analysis or surveillance data.

Fears of Islamization ignore the unremarkable birth rates among Tatars, the largest Muslim ethnic group, and the 1990′s fertility transitions in the Caucasus. The idea that no more than 250,000 seasonal Chinese traders and laborers in the Far East pose a demographic threat is risible.

After 2020, Russia will start experiencing severe demographic pressure due to a smaller youth cohort and population aging. It must use the next decade wisely to build the foundations for recovery through increased fertility, mortality reduction and continued immigration. Despite temporary setbacks, Russia retains solid prospects for growth – a well-educated people, an extensive industrial infrastructure, growing centers of innovation and big hydrocarbon reserves. If things go right, large-scale population decline is still avoidable.

(Republished from Sublime Oblivion by permission of author or representative)
 
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In this post I look at the (surprisingly good) Russian demographic data for Jan-Mar 2009 and argue in more depth that the economic crisis is unlikely to have a very major negative impact on short-term fertility, or any but a very minor impact on long-term demographic trends. I make some falsifiable predictions, estimating a birth rate of 11.5 / 1000 and a death rate of 14.5 / 1000 this year, changed from 12.1 / 1000 and 14.8 / 1000 in 2008, respectively.

In my April article Rite of Spring: Russia’s Fertility Trends, I argued that in the next few years Russia is going to experience a minor demographic resurgence to fertility rates of around 1.7-2.1. This is based on a) relatively high fertility expectations, similar to those seen in the late Soviet Union and Western Europe (France, UK,…) which had / have near replacement-level total fertility rates, b) a little-known indicator called the “average birth sequence” implied the natural long-term fertility rate, absent birth postponement, is around 1.6-1.7 and c) a new spirit of confident conservatism. I also dismissed the idea that the current economic crisis is poised to derail these developments

Furthermore, the post-Soviet collapse was an unprecedented hyper-depression, surpassed only by the Civil War in its social costs. Though on paper recovery from the 1998 crisis was rapid, newly severe budget discipline undercut social spending that left many classes and regions destitute for years. It is telling that in the first six months of the 1998 recession, the proportion of people who could hardly afford even food rose from 29% to 40% of the population; in stark contrast, in the five months since the Russian economy began collapsing in October, this figure rose from 9%…to just 10%.

This is notwithstanding that the rate of decline from Q4 2008 to Q1 2009 was even sharper than during H2 1998. However this time round, both state and society have much bigger surpluses to fall back on during the lean times. As such, the probability that the crisis will have a significant longterm effect on Russian fertility is extremely low.

This is not a new idea – in my 2009 predictions, I forecast:

In Russia, the birth rate will be between 11.5 and 12.5 / 1000, the death rate at 14.5 and 15.5 / 1000 and net migration will fall substantially to 0.5 / 1000. For comparison, the figures for the first ten months of 2008 were 12.1, 14.8 and 1.7 respectively.

And even earlier, from http://www.darussophile.com/2009/01/02/2009-predictions.com/2008/12/07/russia-economic-crisis-iii-on-the-importance-of-self-sufficiency-in-liquids/" href="http://www.http://www.darussophile.com/2009/01/02/2009-predictions.com/2008/12/07/russia-economic-crisis-iii-on-the-importance-of-self-sufficiency-in-liquids/">The Importance of Self-Sufficiency in December 2008:

All vital demographic statistics, with the exception of the total fertility rate, improve during this period – the expanding social safety net checks mortality increases, but the confidence crisis temporarily dents the former. The overall humanitarian impact is insignificant compared to the Soviet collapse and even 1998.

(On a side note, I predicted GDP growth of 0-3% for 2009 in the above article. Ouch! It hurts to remember).

Now how do these forecasts stack up against reality?

Though the data for Jan and Feb was encouraging, I refrained from making any big observations since it was too small a sample, but I think it’s appropriate now that Rosstat demographic data for Q1 2009 is available. Relative to the same quarter of 2008, the birth rate increased from 11.5 to 12.1 / 1000; death rates fell from 15.5 to 15.0 / 1000; the infant mortality rate and divorces fell, and marriages remained constant. There are a number of good and bad caveats.

As frequently pointed out in the Western media abortions are going to increase and births are going to be postponed in light of the economic crisis. What will this mean in practice? They can only become statistically significant from around April, because abortions in Russia are only legal within the first twelve weeks of conception and the economy started imploding in October 2008. From then on we can expect to see intensifying downward pressures on fertility, especially as we enter the autumn months.

That said, I do not expect a very big drop – certainly no more than 10%, and probably closer to 5%. In 2008 there were 1,718k births in Russia, giving a crude birth rate of 12.1 / 1000. So in other words, there will be 1,546k births and a CBR of 10.9 / 1000 in the “low” scenario and 1,632k births and a CBR of 11.5 / 1000 in the “medium” or expected scenario. The high(ly unlikely) scenario is 12.0 / 1000. (I also expect 2010 to be similar to 2009, with further solid increases in the TFR starting from 2011). How did I reach this conclusion?

First, as I pointed out above the economic crisis is not (yet) translating into a humanitarian crisis (“It is telling that in the first six months of the 1998 recession, the proportion of people who could hardly afford even food rose from 29% to 40% of the population; in stark contrast, in the five months since the Russian economy began collapsing in October, this figure rose from 9%…to just 10%”).

Second, as I noted in the Rite of Spring article, since 2006 there has been a major sociological shift with sustained increases in the number of people who believe in Russia’s future (I believe this partly explains the fundamental upwards shift in fertility seen recently). It is telling that at no point during the crisis did the number of Russians who thought the country was on the wrong path, exceed those who thought it was on the right path. Though the Western media try to spin up the specter of an imminent socio-political crisis in Russia, frequently citing last year’s mafia-instigated Vladivostok riots for lack of anything better, it is relatively easy to point out their logical inconsistencies just by looking at the Levada polling data. Just as I did in a letter to the Moscow Times. The point I’m making is that national morale was high in 2008, relative to the pre-2006 period, and has been only moderately dented by the crisis.

Third, even during the 1998 crisis – when morale and living standards fell much faster than today – the drop in birth rates was not that huge (though admittedly it was close to its nadir anyhow back then). The number of births fell by just 5%, and almost fully recovered by 2000. However, this was due to the (relatively) rapidly growth in the number of women of reproductive age, for the TFR only caught back up in 2001. Today this age group is growing very slowly (and will start decreasing with accelerating speed from the early 2010′s).

That said, in conclusion it is very unlikely that the birth rate will fall by any more than 10% in 2009. I was certainly surprised by the magnitude of the fall in Q1 GDP (as was Ed Hughes) – my starry-eyed predictions of 0-3% growth for 2009 will haunt me for a long time now that Q1 saw a -9.5% decline and analysts are predicting anything between -4% and -8% for the year (I’m currently leaning towards -5% to -6%). However, I still stick by my initial assessment that 2010 will see a (moderately) strong recovery with GDP growth exceeding 3%. This will stave off any major cuts in budgetary social support and hold Russia in place against plummeting back into the death spiral.

It is highly encouraging that death rates continued falling in the midst of a near-depressionary contraction in economic output, easing from 15.5 / 1000 in Q1 2008 to 15.0 / 1000 in Q1 2009. Even more encouraging was the structure of the mortality decline. Deaths from alcohol poisoning fell by 13%, and overall deaths from non-medical causes fell by 9% (even the suicide rate remained steady). This is tentative evidence that Russians have finally kicked their habit of drinking themselves stupid when things don’t go their way.

There’s also a continuing shift from hard spirits to milder alcoholic drinks, a trend I first wrote about in Out of the Death Spiral. (This is significant because almost all of Russia’s abnormally high mortality can be attributed to excessive binge drinking of vodka). In Q1 2009 the share of vodka in alcohol consumption was 54.2% in pure alcohol terms, compared to 58.4% in all of 2006 (note Q1 is winter, when harder drinks are generally preferred). This bodes well for future improvements in the health of the nation.

However, here is also evidence of a slight shift towards illegal moonshine consumption – though registered production fell by 12%, overall consumption only fell by 4% (albeit part of the discrepancy can be attributed to Ukrainian imports, or drinking down accumulated stocks).

These positive drinking trends are coupled with continued government investment into the National Priority Project on health, which funds the construction of a network of hi-tech medical centers, acquisition of new oncological equipment and healthy lifestyle promotion. As such, we can be pretty certain that unlike in prior downturns – the mortality explosion during the post-Soviet hyperdepression and the mortality spike after the 1998 Crash – there will be no increase in the number of deaths, and quite possibly even a substantial decrease. The prediction? Relative to 14.8 / 1000 in 2008, the mortality rate for 2009 will not exceed 15.0 / 1000 (low scenario) and may be better than 14.5 / 1000 (the medium scenario). The best case is 14.0 / 1000. Subsequent years will see a general trend towards improvement.

I was surprised by the migration stats. Though a reduction in immigration was predictable, I did not expect the decline in emigration. I mean, the construction sector pretty much imploded – surely the Central Asian Gasterbeiter would be compelled to go home? But as it is both indicators fell but the net inflow of migrants remained unchanged at 0.17 / 1000.

So in conclusion, the overall rate of population decline eased from 80,900 in Q1 2008 to just 46,900 in Q1 2009, equivalent to 0.03% of the population. In other words, Russia has for all practical purposes halted its population crunch – at least for now.

Incidentally, the situation in Ukraine is also looking bright, despite the fact that the economic collapse there is much more comprehensive – its GDP declined by an estimated 20-25% in Q1 2009 and a third of Ukrainians can barely afford food. Nonetheless, in Jan-Mar birth rates increased from 10.2 to 11.1 / 1000, death rates fell from 18.0 to 17.0 / 1000 and nuptiality measures improved. Since Ukraine shares Russia’s predilection for excessive alcohol consumption, especially in times of economic hardship, it goes without saying that this too is an interesting and encouraging development.

(Republished from Sublime Oblivion by permission of author or representative)
 
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Though hard to imagine, the Washington Post – or Pravda on the Potomac, as Eugene Ivanov quite rightly labels it – surpassed even its own sordid standards for Russia coverage, in the form of the latest op-ed from George F. Will in Potemkin Country. Time to go grenade fishing again, I guess.

America’s “progressive” president has some peculiarly retro policies. Domestically, his reactionary liberalism is exemplified by his policy of No Auto Company Left Behind, with its intimated hope that depopulated Detroit, where cattle could graze, can somehow return to something like the 1950s. Abroad, he seems to yearn for the 1970s, when the Soviet Union was rampant and coping with it supposedly depended on arms control.

I suppose turning the US into a deindustrialized failed empire and possibly post-nuclear wasteland is a great idea. Maybe not.

Actually, what was needed was not the chimera of arms control but Ronald Reagan’s renewal of the arms race that helped break the Soviet regime. The stately minuet of arms negotiations helped sustain U.S. public support for the parallel weapons spending.

The Soviet Union broke because of the internal failures of its planned economy and stymied social and national aspirations. He is right that the arms race helped tip it over, but so did many other factors such as rising social obligations, collapsing oil prices and technological stagnation. However, with the US budget deficit soaring into banana republic territory of 10%+ of GDP, conceivably for years to come, now is no time to start a new arms race – not unless George F. Will is a traitor who wants to see the US go the way of the USSR.

Significant arms agreements are generally impossible until they are unimportant. Significant agreements are those that substantially alter an adversarial dynamic between rival powers. But arms agreements never do. During the Cold War, for example, arms negotiations were another arena of great-power competition rather than an amelioration of that competition.

Since both the US and the USSR accumulated more than enough nuclear weapons to guarantee destruction of each other in a full exchange by the 1970′s, there was no point to further expansion – might as well use the resources for other purposes. Another aim was to strike up a rapport to create trust and lower the chances of an accidental nuclear war, which ever since the MAD (Mutually Assured Destruction) era has been a much greater risk than a planned Armageddon. No agreements on conventional forces were signed during the Cold War that I know of, and they entailed much greater expenditure than nukes.

The Soviet Union was a Third World nation with First World missiles. It had, as Russia still has, an essentially hunter-gatherer economy, based on extraction industries — oil, gas, minerals, furs. Other than vodka, for what manufactured good would you look to Russia? Caviar? It is extracted from the fish that manufacture it.

The smarmy attitude aside, the reason Russia exports few manufactured goods is that its comparative economic advantage lies in exporting hydrocarbons, which appreciates the ruble and makes its manufactured goods unattractive; currently, its industrial base is focused on import substitution, i.e. manufacturing in Russia what is currently imported. Nonetheless, it is the world’s joint-first (with the US) exporter of military hardware and is currently introducing products like the Sukhoi SuperJet which enjoy high chances of international success.

Today, in a world bristling with new threats, the president suggests addressing an old one — Russia’s nuclear arsenal. It remains potentially dangerous, particularly if a portion of it falls into nonstate hands. But what is the future of the backward and backsliding kleptocratic thugocracy that is Vladimir Putin’s Russia?

Props for “kleptocratic thugocracy” – a great new addition to the Russophobe rhetorical arsenal, though granted much less dangerous than Russia’s nuclear arsenal. Even in the 1990′s the fear of loose nukes from the Soviet Union was a largely phantom one, and now it’s just ridiculous.

Putin — ignore the human Potemkin village (Dmitry Medvedev) who currently occupies the presidential office — must be amazed and amused that America’s president wants to treat Russia as a great power. Obama should instead study pertinent demographic trends.

Nicholas Eberstadt’s essay “Drunken Nation” in the current World Affairs quarterly notes that Russia is experiencing “a relentless, unremitting, and perhaps unstoppable depopulation.” Previous episodes of depopulation — 1917-23, 1933-34, 1941-46 — were the results of civil war, Stalin’s war on the “kulaks” and collectivization of agriculture, and World War II, respectively. But today’s depopulation is occurring in normal — for Russia — social and political circumstances. Normal conditions include a subreplacement fertility rate, sharply declining enrollment rates for primary school pupils, perhaps more than 7 percent of children abandoned by their parents to orphanages or government care or life as “street children.” Furthermore, “mind-numbing, stupefying binge drinking of hard spirits” — including poisonously impure home brews — “is an accepted norm in Russia and greatly increases the danger of fatal injury through falls, traffic accidents, violent confrontations, homicide, suicide, and so on.” Male life expectancy is lower under Putin than it was a half-century ago under Khrushchev.

I refuted Eberstadt and demonstrated the bankruptcy of most current “thinking” on Russian demographic trends multiple times in this blog. First, low working-age male life expectancy is tragic but not crippling – it has no direct effect on fertility, disproportionately affects poorer, badly-educated people and partially relieves pressure on pensions. It may lower productivity, but cannot check the growth of a vital civilization – America was known as the Alcoholic Republic in the great early days of its founding.

Second, he ignores that the total fertility rate has been steadily creeping up from 1.3 children per woman in 2006, to around 1.5 as of 2008 – and there is plenty of evidence this is a sustainable trend. Similarly, no mention is made of the mortality decline from 2005 and of its ambitious health plans to 2020.

Third, Russia’s net primary school enrollment stands at 90.9%, compared with 91.6% in the US and similar figures in most eastern European nations like Lithuania (89.4%) or the Czech Republic (92.5%). That the likes of Bolivia (94.9%) and Indonesia (95.5%) claim to have significantly better numbers than any of these obviously far-better educated nations should give us an insight into the usefulness of this indicator as a gauge of human capital.

Martin Walker of the Woodrow Wilson Center in Washington, writing in the Wilson Quarterly (“The World’s New Numbers”), notes that Russia’s declining fertility is magnified by “a phenomenon so extreme that it has given rise to an ominous new term — hypermortality.” Because of rampant HIV/AIDS, extreme drug-resistant tuberculosis, alcoholism and the deteriorating health-care system, a U.N. report says “mortality in Russia is three to five times higher for men and twice as high for women” as in other countries at a comparable stage of development. The report, Walker says, “predicts that within little more than a decade the working-age population will be shrinking by up to 1 million people annually.” Be that as it may, “Russia is suffering a demographic decline on a scale that is normally associated with the effects of a major war.”

The main concern Walker cites in The World’s New Numbers is that it would be hard to maintain economic growth in a country “whose young male work force looks set to decrease by ­half”, and as such voices a familiar argument that Russia does not belong in the BRIC (Brazil, Russia, India, China) quartet of key emerging markets. Yet according to the World Bank, the proportion of the population aged 65+ will increase from 12% to 18% in Russia by 2025, and the latter figure is actually equal to Estonia’s percentage today! – whose current problems are certainly not centered around entitlements spending.

As Walker himself agrees in his article, this is “more of a labor-market challenge than a demographic crisis”. My own dependency ratio projections are far from cataclysmic. The notion of a Russian AIDS Apocalypse is a myth, because according to the international research program Knowledge for Action in HIV/AIDS in Russia, all the pessimistic models assume “the epidemic would be essentially heterosexual in nature and follow trends observed in sub-Saharan Africa”, which is “not borne out by current surveillance data from Russia” or indeed basic common sense.

According to projections by the United Nations Population Division, Russia’s population, which was around 143 million four years ago, might be as high as 136 million or as low as 121 million in 2025, and as low as 115 million in 2030.

Yet another fallacy of linear extrapolation, of which some folks never tire. In 1914, France had a population of 40mn to Germany’s 65mn, had much lower fertility rates and its General Staff looked with trepidation at the future. Today, it has a population of 61mn and is one of the few European countries with replacement-level fertility levels, whereas Germany has a population of 82m which is projected to fall to 70mn by 2050.

Marx envisioned the “withering away” of the state under mature communism. Instead, Eberstadt writes, the world may be witnessing the withering away of Russia, where Marxism was supposed to be the future that works. Russia, he writes, “has pioneered a unique new profile of mass debilitation and foreshortened life previously unknown in all of human history.”

“History,” he concludes, “offers no examples of a society that has demonstrated sustained material advance in the face of long-term population decline.” Demography is not by itself destiny, but it is more real than an arms control “process” that merely expresses the liberal hope of taming the world by wrapping it snugly in parchment.

Not only is this article profoundly ignorant and bigoted, but it also very poorly written – I’ve pretty much lost track of what George F. Will is supposed to be arguing about. Oh yeah, the arms control thing. Then again, you can’t expect much in the way of reason and logic from a global warming denier.

As for myself, I’m just happy I spent less time writing this up than my Kasparov the Bolshevik article. A popular Russian proverb has it that a fool can ask more questions than ten wise men could answer, so no wonder this is a favored strategy of Russophobes everywhere, as pointed out by Patrick Armstrong. Now if only somebody could invent the computer AI version of a grenade-launcher…

(Republished from Sublime Oblivion by permission of author or representative)
 
Models that predict a Russian AIDS catastrophe rely on simple extrapolation from sub-Saharan Africa transmission patterns inapplicable to Russia and are as such fatally flawed.
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Many analysts of an unreasonably gloomy (or Russophobic) bent delight in raising the specter of an AIDS mortality crisis sometime in the next few years, indulging in fantasies of Russia as a dying, blighted wasteland populated by nihilistic, promiscuous druggies. In 2002 Vadim Pokrovsky, well known government anti-AIDS crusader, predicted the number of infected would rise to 3-5mn in “a few years“; by 2005, “we could be talking about five-million being infected, and these are realistic, even conservative figures” and tens of thousands would be dying by 2007. Prominent doomer demographer Nick Eberstadt modeled a 10% HIV prevalence rate by 2025 under a “severe scenario” and 2% under the lowest “mild scenario”. The World Bank (Ruhl et al) predicted a range of 3.21% (3.2mn cases) to 7.26% (5.3mn cases) by 2010, which is still much lower than US governmental National Intelligence Council estimates which project truly apocalyptic figures from 7.0% (5mn cases) to 11.2% (8mn cases). In other words the demographic, economic and geopolitical collapse of Russia is imminent.

To be fair a few years back I too was very concerned about these trends and apparent apathy of the Russian government. Then I became a bit more relaxed as the exponential tidal wave of new infections promised by Pokrovsky and the other prophets of doom failed to materialize and overall anti-AIDS spending ratcheted up to 300mn $ in 2006 and more than 500mn $ in 2007. Furthermore, a bit more research showed that these scenarios of African-style STD oblivion simply don’t stack up neither in theory nor in practice.

In 2007 Pokrovsky believed that there were “as many as 1.3mn” people infected with AIDS, very far from the multi-million rates he was predicting just five years ago, and not a catastrophic increase from “expert estimates” of 0.8mn in 2000. Russian government data shows that the percentage of pregnant women testing HIV positive reached a plateau in 2002 and tended down ever since. The models used by Eberstadt and co. are themselves critically flawed, because according to the international research program Knowledge for Action in HIV/AIDS in Russia, they assume that “the epidemic would be essentially heterosexual in nature and follow trends observed in sub-Saharan Africa”, which is “not borne out by current surveillance data from Russia”. (They are also not borne out by the slightest acquaintance with comparative development and sociology. Few Russians are malnourished and hence have greater immune resistance, their medical equipment tends to be sterilized and it is socially unacceptable for them to have many partners or engage in anal sex; all this cannot be said for sub-Saharan Africans).

I will now look justify my bold claims with more details. Firstly, let’s go through the 2008 Russian Progress Report on AIDS to the UN to get the key statistics.

As of year-end 2007, some 416,114 people were registered as HIV-positive in Russia, which means HIV prevalence amongst the total population stood at 0.3% (in practice, twice or thrice more because many cases go undetected). Infection rates were much more “concentrated” amongst high-risk groups like injecting drug users (IDUs) and to a much lesser extent amongst sex workers, male homosexuals and prisoners. There are great variations in prevalence between regions, from already concentrated epidemics amongst IDUs in some Siberian cities to very low rates in rural and conservative regions.

Although the first case of HIV was uncovered back in 1987, the disease remained relatively dormant for the first decade. However, it exploded from around 1996, when the major vector of infection shifted to the usage of non-sterile instruments for intravenous drug injection (83% of registered cases). The epidemic at this stage was concentrated amongst young men. In recent years the role of heterosexual sex began creeping back up, indicating that it was spreading from IDUs to the general population and women (e.g. men getting infected from drug-injecting sex workers and then spreading it to their usual partners). By 2007 some 34% of infections were through heterosexual sex (including 63% of women, whose share of new cases is increasing).

The government has vastly ramped up spending on AIDS prevention from a paltry 33mn $ in 2005, to 254mn $ in 2006 and 445mn $ in 2007. The latter two years saw the implementation of the “The Project for the Prevention of HIV, Hepatitis B and C and Diagnosis and Treatment of HIV”, which involved spending more money on funding anti-retroviral therapy (ART) and informational campaigns aimed at prevention. By 2007, the percentage of registered people in advanced stages of the infection receiving ART rose to 93%; some 87% of HIV positive pregnant women were getting ART to limit the chances of spreading the infection to their babies; 39% of sex workers, 17% of practicing homosexuals and 24% of IDU’s got covered by HIV prevention programs.

82% of schools were providing some form of HIV/AIDS education by 2007, so it is no longer correct to say Russian society ignores this problem. Nonetheless, people remain relatively uninformed so far with only 34% of young people displaying accurate knowledge about AIDS untainted by myths. 7% of under-15 year olds had sex and 15% of 15-49 year olds had sex with two or more partners in the last year. This is not particularly promiscuous by international standards (in the US, 14% of under-15 year olds are no longer virgins, while 14% of 20-59 year olds had sex with two or more partners in the last year). According to the survey, amongst the high risk groups 92% of sex workers, 60% of male homosexuals and 37% of IDUs used condoms the last time they had sex.

Ever since the first case was uncovered in 1987, a huge surveillance program was set up to monitor the disease in the last years of the Soviet Union. It tests some 20-25mn people per year, which makes it probably one of the most comprehensive systems in the world. After remaining flat and very low until 1998, it spiked in 2001 and has since settled down to a lower level.

Over period to end 2007, some 21,959 HIV positive people died; in 2007 the number of deaths and new cases fell due to wider availability of ART.

Possibly the most important graph is above, which shows HIV prevalence amongst pregnant women (and as such is a good proxy for infection rates amongst the low-risk and overall population). As we can see the figures took off after the IDU explosion in 1996 and accelerated sharply, before hitting a slowly declining plateau by 2002. This is important because it implies that there is a mostly linear relationship between infection rates amongst high risk groups like IDUs and the general population, and that purely sexual transmission does not have a critical momentum of its own. (PS – the reason the number of HIV tested pregnant women fell during the 1990′s was because of the post-Soviet fertility collapse).

Which is not to say that there do not exist ominous signs in the other direction elsewhere. From 2002 to 2007, AIDS cases due to heterosexual contact increased from 18% to 34% of cases and is now the major vector for transmission to women (IDU remains by far the biggest for men). There is a rising incidence of new HIV cases amongst sexually active homosexuals (1.1% HIV positive in 2007 amongst those who sought testing, against 0.5% in 2006). However, there was a decrease in new HIV infections amongst registered IDUs (6% in 2001, 2% in 2007 were new cases of HIV).

My impression is that the epidemic is now more or less controlled amongst the highest risk group, IDUs. There is also evidence that it is not seeping into the general low-risk population. However, the situation is getting worse amongst those who live in the nether regions between these two worlds, by which I mean the partners of men sleeping with drug-injecting sex workers and the girlfriends of IDUs. This would imply that the HIV prevalence rate will continue going up for perhaps another decade and will peak at no more than 1% of the population. This is realistic because as mentioned the material conditions for the mass spread of AIDS simply do not exist and in any case the government is now making lively efforts to provide ART (and thus reduce chances of transmission, i.e. rate of diffusion) and educate people on the topic. While researching this post, I even found a (mildly erotic) children’s poetry book on AIDS from the town of Kaluga!

Now that we know a bit more of the context, let us now turn to the Knowledge for Action in HIV/AIDS in Russia report. This excellent publication has a whole chapter devoted to “modeling the HIV epidemic in Russia”, published in October 2006.

They start off by saying that although there is a risk of a concentrated epidemic amongst IDUs and sex workers transferring to a slower but deeper amongst the general popular, so far this possibility remains conjecture. They criticize the work of the likes of Eberstadt and the NIC thus (my emphasis):

The future of the emerging HIV epidemic in Russia is difficult to project, owing in part to the varying quality of both HIV surveillance and data describing on prevailing patterns of risk behavior. In order for HIV infection to become generalized within a population, sexual transmission must become the main route of transmission (because the other routes influence fewer people)…Despite these problems, demand from policy makers and the media often leads to speculative projections of the future of emerging HIV epidemics and their economic impact, such as those projections by Eberstadt and the US National Intelligence Council.

The key difference between the lower prevalence projections and the very high projections is the assumption about future heterosexual transmission. The higher projections assume that the epidemic will be essentially heterosexual and will follow the trends observed in Sub-Saharan Africa. This seems unrealistic based on current knowledge of the situation in Russia, where the epidemic is still predominantly concentrated in injecting drug users.

As we can see below, there is a huge divergence between models built on differing assumptions.

The sub-Saharan models of Eberstadt, NIC and the World Bank (Ruhl et al) quickly lead to demographic (and economic, geopolitical, etc) catastrophe. The Transnational Family Research Institute (TFRI) works from different assumptions, namely that “the size of the behaviorally define high-risk groups will not grow; prevalence in high-risk groups is close to stabilization; the epidemic proceeds mainly by spreading to rest of population through sex contacts”, which results in a peak of 1.2% HIV prevalence in 2015 assuming that this figure was 0.6% in 2002 (as estimated by UNAIDS).

The Knowledge for Action writers then create their own model, which uses the available data on Russian IDU injecting and sex habits and different assumptions about the patterns of sexual mixing between low and high risk groups, IDU life expectancies and the effect of sex work on future HIV prevalence. (The report also has all the differential equations used for the model, in case you want to play around with the model).

The degree of sharing needles and syringes observed in the IDU data do not produce an epidemic in the model. As already noted this may be because there is no epidemic in the regions or because behavior has changed, or it may be a result of the survey not capturing the high risk individuals. With the rate of sharing estimated by our Russian colleagues an HIV epidemic is observed. The epidemic is concentrated in the high risk population and is driven by IDU transmission with sexual transmission causing a small HIV epidemic in the low risk population.

Under their model the epidemic becomes endemic amongst IDUs, but otherwise affects the general population little.

The model parameters specified in this way with current prevalences of infection in risk groups generated an epidemic concentrated in injecting drug users.

The model parameters specified in this way with current prevalences of infection in risk groups generated an epidemic concentrated in injecting drug users.

Despite the high levels of prevalence amongst IDUs, they are a small part of the population and as such overall prevalence of HIV does not exceed 1% under these conditions.

The overall prevalence does not exceed 1% of the population.

The overall prevalence does not exceed 1% of the population.

IDU’s dominate in absolute numbers too, albeit substantial numbers of low risk women continue getting infected. (Thus the current trajectory of increasing heterosexual transmission, particularly to women, is not surprising).

There are numerous infections in low risk women who are the sex partners of clients of injecting drug using sex workers.

There are numerous infections in low risk women who are the sex partners of clients of injecting drug using sex workers.

There are a number of factors which can either improve or exacerbate the situation. For instance, expanding ART to more patients will substantially reduce new cumulative HIV infections. Effectiveness would be further increased by reducing the use of unclean needles (e.g. by handing out sterilized syringes). If starting in 2010 some 50% of patients were to be given ART and if there was a 70% reduction in the use of unclean needles, then peak infection will come in at 0.7% of the population round about 2015, instead of nearly 1.0% in 2020.

I will now quote their (condensed) conclusion in extenso:

The future of the emerging HIV epidemics in Russia is difficult to project, mainly as a result of the varying quality of surveillance data and information on prevailing patterns of risk behavior. In this chapter we have explored previously published projections for Russia and have used models to explore epidemic trajectories using model parameter estimates derived from the behavioral surveys and other primary research undertaken during the course of the Knowledge Programme…

Previous projections of the future of the HIV epidemic in Russia give results so varied that they are very difficult to interpret. As well as lack of information about risk behaviors, there is also considerable uncertainty over both the size and turnover of high risk populations. The models used here indicate the potential importance of both the size and turnover of high risk population. The model of IDUs and the general population shows an epidemic concentrated in the high risk IDU population. Prevalence in the low risk general population is driven by high risk individuals who cease their high risk behavior and return to the low risk population, bringing with them a higher probability of being HIV positive. Further, the more extensive model developed in collaboration with Russian partners indicates that small changes in parameters describing transmission can have a considerable impact on the HIV epidemic.

The behavioral surveys undertaken in this Knowledge Programme provide some information on both sexual and injecting drug use behaviour in the general population and the harder to reach IDU population. However, as shown in an exploration of possible sexual and sharing partner change rates, considerable heterogeneity in behaviour is observed and characterizing this heterogeneity is problematic. The rates of needle sharing reported in the IDU behavioral survey were not sufficient to produce an HIV epidemic in our models. This may indicate that there will only be a limited HIV epidemic in this population because of a lack of risk behavior, it may also indicate a change in behavior as a result of greater awareness of risk. Alternatively, it may be a result of the IDU survey not capturing the highest risk individuals. As this result is in contrast to that found in other studies further exploration of the distribution of risks of this high risk population is needed…

Finally, predictions of the HIV epidemic produced by the models in this chapter are relatively reassuring. In one sense they are possibly also conservative given that the rates of sharing used to parameterize the models were considerably higher than that reported in the IDU behavioral survey. However, we should still be concerned as many of the parameters used are poorly estimated and model results show that small variations in parameters may have a considerable effect…

So let’s get this straight. Predictions of a sub-Saharan scale die-off due to AIDS are completely without merit from a theoretical, practical or even intuitive perspective. One of the more serious (and transparent!) works on it acknowledges that even its base case of around 1% HIV prevalence in 2020 might be too pessimistic. Finally, the Russian government itself has woken up to the crisis and is lavishing immense resources on the problem.

Speaking of which, at least Pokrovsky has an excuse for wild exaggeration – as a key figure in the Russian government on AIDS policy, he’s allowed to lobby for more funds. Cutting the number of people with AIDS is a noble goal. If doom-mongering about how Russians are going to be dropping like flies a few years down the road if nothing is done is what it takes, so be it. The other analysts don’t have a good excuse.

Available en français at Le Kremlin contre le sida by Alexandre Latsa.

(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.