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    Russian Economy Index Thread - No Discussion

    miketheterrible
    miketheterrible

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    Russian Economy Index Thread - No Discussion Empty Russian Economy Index Thread - No Discussion

    Post  miketheterrible Sun Jun 20, 2021 2:37 am

    I will be requesting the mods to make this thread simply as a pure economic thread of information and no ridiculous articles that we see posted time and time again that spreads false narratives (Russia is a gas station, Oil and Gas is entire Russia's economic drive, etc etc etc).

    I have requested assistance from KVS as well.  Anyone else interested in this project, please pm me.

    Index:


    Last edited by miketheterrible on Sun Jun 20, 2021 3:04 am; edited 3 times in total
    kvs
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    Russian Economy Index Thread - No Discussion Empty Russia is not an oil banana republic.

    Post  kvs Sun Jun 20, 2021 2:41 am

    This is intended to be a thread on the trope that Russia depends on oil and gas exports for its economic survival.   Western coverage
    of Russia repeats this lie in true Goebbels style.   It has become common wisdom in the west that Russia "does not make anything"
    and is a gas and oil pump.

    Please keep any posts in this thread strictly on this narrow subject.   It is intended as a FAQ that will develop over time.   It is not easy
    to debunk western misinformation using western sources.

    A good starting point are the following links:

    https://www.awaragroup.com/blog/russian-economy-2014-2016-the-years-of-sanctions-warfare/
    https://www.awaragroup.com/blog/russian-economy-strong-and-stable/

    1) Share of Oil and Gas Taxes in the Federal budget of Russia.

    The pivot of the nonsense about Russian oil and gas export dependence.   Routinely the tax fraction is confused as GDP fraction.  They
    have nothing in common.   Russia has a 13% flat income tax.   It chooses to tax resource extraction instead of the public.

    Russian Economy Index Thread - No Discussion Structure-of-russian-state-revenue-2013

    Rent income includes resource rents such as oil and gas taxes.   Not apartment rent.

    Russian Economy Index Thread - No Discussion Budget-revenue-by-source-December-2016



    Oil & gas related revenue made up only 17% of the total consolidated budget revenue in 2016.

    Contemplating these figures that disprove the claim of Russia’s supposed hydrocarbon dependency, US senator John McCain, aka McInsane, pops to mind. He infamously quipped that “Russia is a gas station masquerading as a country.”

    There are two budgets being bandied about in the MSM.   One is the narrow federal budget, the other is the consolidated government budget.   Russia
    does not have provinces or states.   It has the federal level and municipal levels.   So called "oblasts" in Russia outside of special ethnic zones are like
    counties or townships in North America.   Since oil and gas are being discussed in the context of Russia's economy, the consolidated budget is the only
    relevant one.   As for the fraction of oil and gas taxes in the narrow federal budget, they were 36% in 2016.   The endlessly repeated figure of 50% is
    BS.  

    Again, taxing resource rents is smart.  It removes the tax burden from consumers, who drive the GDP in developed countries, and puts it literally onto
    foreigners who pay for Russia's oil and gas exports.   Trying to paint this is a fail takes the cake for cheeseball propaganda.

    2) Diversification of Russia's Economy

    The claim that Russia is an oil banana republic is based on the ludicrous notion that its export profile reflects its economic profile as if there is some
    law of nature that mirrors exports to reflect the economic profile of any country.   This amateur hour drivel is easily debunked by a real measure of
    Russia's economic diversification, its imports profile.

    Russian Economy Index Thread - No Discussion Imports-as-share-of-gdp

    Russia is less dependent on imports than the USA and much less compared to Europe.  The supposedly rich and diversified Europe (Germany, France, UK, etc.)

    The relevance of this metric is that banana republics do not produce and cannot produce what they need to function domestically.   They use their commodity
    exports to import all the other essentials necessary to function as countries.   For example, machinery, medicine and even food.    If Russia was some oil banana
    republic "which does not make anything", it would be much more import dependent than Sweden and similar to Saudi Arabia.    Yet the western fake stream
    media never rides Saudi a** like it attempts to ride Russia's.   Thus the western media has zero credibility.

    3) Don't Shoot the Messenger

    I am sure some will try to fob off Awara as "Putin's propaganda outfit".   Whatever that means.    But if you prefer to cherry pick your sources instead of
    dealing with data that "can't possibly be true", then consider the World Bank.   Unless it is in Putin's pocket also.

    https://data.worldbank.org/indicator/NY.GDP.TOTL.RT.ZS

    The resource rents for Russia for 2019 estimated by the World Bank are 13.1%

    https://data.worldbank.org/indicator/NY.GDP.TOTL.RT.ZS?locations=RU
    https://data.worldbank.org/indicator/NY.GDP.PETR.RT.ZS?locations=RU

    Looking at the graph of this metric over the last 30+ years it needs some context.   In 2016 the resource rents were 8.6% so it depends on the nominal
    price of oil and gas exports but confounded by some adjustments.   The oil rents for 2019 were 9.2%.  This figure appears to include natural gas since
    there is a separate coal rents category but not gas.

    https://tradingeconomics.com/commodity/crude-oil

    The minima in the World Bank data for resource rents in Russia correspond to minima in world oil prices.   But the shape is different.   In particular, the
    increase after 2016 is not consistent with the oil price (and the gas price which is indexed to the oil price for Russia's exports).   Anyway, according
    to the World Bank oil and gas account for 9% of Russia's GDP.   Not 50%.
    miketheterrible
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    Russian Economy Index Thread - No Discussion Empty Re: Russian Economy Index Thread - No Discussion

    Post  miketheterrible Sun Jun 20, 2021 2:48 am

    I'll start off with the most famous one: Russia relies on oil and gas for its economy.

    FALSE: Russia's oil and gas rents is rather small to the overall economy standing at around 9 - 10% of its GDP.  So that is a tenth of its economy.

    Russian Economy Index Thread - No Discussion 1MIRpqU

    Here is a study that was done by Awara group regarding this:

    https://www.awaragroup.com/blog/russian-economy-2014-2016-the-years-of-sanctions-warfare/

    Time to bury the hydrocarbon dependency meme –  Oil & Gas now make up less than 10% of Russia’s GDP

    The really devastating news for “our Western partners” (as Putin likes to refer to them) must be – which we are the first to report – the extraordinary decrease in the share of oil & gas revenue in Russia’s GDP.  Chart #3 shows that as of 2015 according to World Bank data the total natural resources rent (the national income derived from natural resources) was 10.3%. It should be noted that the figure includes also income from other natural resources than the energy sector. We are not privy to the break-up of the figure on its components, but we think it is fair to expect that other than hydrocarbons would comprise a couple of percentage units, thus leaving oil & gas with only an 8% share of the GDP. (Disclaimer! We do not assume any liability for the pain this piece of news may cause to Russia haters who have been relying on fake news outlets for their information. In severe cases, those readers should seek immediate professional help).

    As mentioned, it is all hydrocarbons, so not just "oil and gas" or in other words, raw material here.
    kvs
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    Russian Economy Index Thread - No Discussion Empty Re: Russian Economy Index Thread - No Discussion

    Post  kvs Sun Jun 20, 2021 3:01 am

    Looks like we initiated the same type of thread at the same time. The mods should merge this thread with the one I started.

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    miketheterrible
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    Russian Economy Index Thread - No Discussion Empty Re: Russian Economy Index Thread - No Discussion

    Post  miketheterrible Sun Jun 20, 2021 3:04 am

    Russian's are generally poorer than everyone in the west.  They are all poor!

    FALSE:  The biggest falsehood has been comparing Russia's GDP with others.  Russians buy goods priced in Rubles, not in USD, Yuan, Euro, Peso, Pound or Shekel, etc.  They pay for goods in their country with their national currency - The Ruble.  GDP nominal takes into account the valuation of the currency to that of the USD.  That is false when in reality GDP PPP (Purchasing Power Parity) takes into consideration how much cost of goods are in the country and how far its currency can take them.

    https://statisticstimes.com/economy/countries-by-gdp-ppp.php#:~:text=International%20Monetary%20Fund%20%28IMF%29%20%20%20%20Country%2FEconomy,%20%203%20%2029%20more%20rows%20

    Russia is ranked at 5 - 6th place depending where you look.  Just right behind that of Germany.  I would say a huge accomplishment from going bankrupt in 1998.

    But what about Russian's themselves?

    https://www.numbeo.com/cost-of-living/country_result.jsp?country=Russia

    https://www.numbeo.com/cost-of-living/country_result.jsp?country=United+States

    This should break it down as Russian's pay less overall in terms of expenses in housing and market.  But, a major but in all of this that isn't included into this is key - Healthcare.  USA does not have a national healthcare system like Russia does.  That should be included.

    https://fortunly.com/statistics/healthcare-spending-statistics

    So in other words, get a heart attack? Pay $20K USD!  Get one in Russia? No fee.  They have a national healthcare system.

    Awara Group blog did a great breakdown how they compared Chicago to Moscow.

    https://www.awaragroup.com/blog/russia-vs-america-real-income-comparison/

    A Russian monthly salary of $1,600 gives at least the same standard of living as $6,000 in America
    A more competitive market economy and socially just society gives Russians much more value for money
    GarryB
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    Russian Economy Index Thread - No Discussion Empty Re: Russian Economy Index Thread - No Discussion

    Post  GarryB Sun Jun 20, 2021 9:46 am

    Merged threads.

    Any OT posts as decided by Mike or KVS will simply be deleted from this thread.

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    George1
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    Russian Economy Index Thread - No Discussion Empty Re: Russian Economy Index Thread - No Discussion

    Post  George1 Sun Jun 20, 2021 3:11 pm

    i have a question. How can we be sure that this thread will not end like the others? there will be discussions unless we delete all posts made by members.
    I remind that a similar thread existed in the begining of the forum and we had to rename it and merge it with other economic related threads in "Russian Economy general discussion". The reason? Very simple. Discussion was getting often off-topic so the whole topic gone off-subject.
    I am not against keeping this thread. Put you have all to consider that it is impossible after some weeks this thread to be as it started

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    kvs
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    Russian Economy Index Thread - No Discussion Empty Re: Russian Economy Index Thread - No Discussion

    Post  kvs Sun Jun 20, 2021 6:31 pm

    Website giving detailed statistics on Russian exports and imports:

    https://en.ru-stat.com/

    An evaluation of import substitution by Awara:

    https://www.awaragroup.com/blog/russias-import-substituton/

    An old report on Russia's economic diversification from 2014:

    https://www.awaragroup.com/blog/putin-midterm-interim-results/

    miketheterrible
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    Russian Economy Index Thread - No Discussion Empty Re: Russian Economy Index Thread - No Discussion

    Post  miketheterrible Sun Jun 20, 2021 9:07 pm

    George1 wrote:i have a question. How can we be sure that this thread will not end like the others? there will be discussions unless we delete all posts made by members.
    I remind that a similar thread existed in the begining of the forum and we had to rename it and merge it with other economic related threads in "Russian Economy general discussion". The reason? Very simple. Discussion was getting often off-topic so the whole topic gone off-subject.
    I am not against keeping this thread. Put you have all to consider that it is impossible after some weeks this thread to be as it started

    As Garry said, KVS and I will just keep posting news and I'll update the index (first post), while stating all posts from others not on the list of those of this thread be purged.
    GarryB
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    Post  GarryB Mon Jun 21, 2021 8:14 am

    Think of it as a reference thread for actual facts about the Russian economy, but not for the purposes of discussion, instead for the purposes of references, so if on any of the discussion threads we have someone pop up and say Russians are poor or Russia is a third world gas station that does not produce anything, they can be referred to this thread and specific posts on this thread that shows that oil revenues are not the basis of the Russian economy and of course refer them to other threads regarding new technology and innovation in Russia to show they are making things... things that are no longer made in the west and often outsourced to other countries like China or soon perhaps India.

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