--- Doug Henwood <dhenwood at panix.com> wrote:
>
> That just doesn't sound plausible - it works out to
> a growth rate of
> 25% a year, more than twice as fast as China,
> something like three
> times India. The World Bank has Russian per capita
> GDP up about 7% a
> year (real, PPP) up an average of 7% a year from
> 1999-2005, which is
> a lot more plausible.
>
> Doug
FWIW, here;s the relevant passage (already posted on the Untimely Thoughts list).
The Russian Economic Miracle
The Russian GDP in dollar terms has increased fivefold during Putin’s term from 2000 to 2006. According to our source, Deutsche Bank, the total growth will be six fold by end of 2007 (Deutsche Bank www.deutsche-bank.de). At end of 1999 the Russian GDP per capita was 1334 dollars (the dollar to ruble exchange rate being 27,0). End of 2005 the GDP had risen to $5346 per capita; for year 2006 it was $6879 and by end of 2007 we are expected to reach $8,350. This is more than 600% growth in 7 years.
It is hard to understand why economists question whether the goal of doubling GDP is really achievable within 10 years when it already by 2006 had already grown more than fivefold in six years by 2006 in real inflation adjusted figures in dollar terms! These figures can be verified by looking at any macro economic charts that carry Russian GDP figures. The problem is that often an element of confusion is brought in by trying to adjust the figures to ‘real growth’ which supposedly would clear the performance of emerging markets from inflation, asset value hikes etc. But GDP of Western economies are not reported in this way, and therefore comparison is lost. - Nothing can be more real than comparing the dollar denominated GDP of 1999 with the GDP of 2006. And these figures speak for themselves. We can also compare the Russian GDP as a share of e.g. of the USA figure, and see how fast Russia is closing the gap. The Russian GDP per capita which still in 2000 was 1/20 of the US level is today 1/7, and according to the purchasing parity figure approximately 1/3- 1/4 of the US level.
Every now and then we hear the misleading claim that the Russian GDP is only the size of the Dutch economy, or say that of Sweden. Even with the formal, PPP adjusted figures, the Russian economy is the 9th or 10th biggest economy in the world. There is good reason to believe, that Russia in a not so distant future will pass Brazil, Italy, UK, and France and become one of the 6 biggest in the world.
Often GDP of various countries are made comparable adjusting the figures by the so-called purchasing power parity (PPP). This is done in order to attempt to take into account the differences in the relative price level in various countries e.g. the price for a hair-cut in France and China (or the fact that there are places where the hair cuts are done at home for no pay). In that regard Russian GDP would on a PPP measure be $12,000. which is already more than one third of the Western European average. It also more than half of the year 2000 level of the GDP in Finland, to take this European showcase as an example. This should show how deceptive it is to try to read in too much structural difference to these statistics. According to some estimates the ruble is very much undervalued, and therefore the correct purchasing parity figure could be as much as 18 000 USD per capita. If we were to consider the huge differences in the general price level over this biggest country in the world, then this adjusted figure could, in fact, be the one closer to the truth.
>From Rags to Riches During Putin's Presidency
When Putin took over the presidency in year 2000 the country was at the brink of ruin for many it seemed that the fall was inevitable and final. GDP per capita was at the level of traditional low-income nations; the external debt was 150 billion USD or more than 100% of the country’s GDP; Russia had recently gone through a devastating devaluation and received an emergency aid loan of 10 billions from the International Monetary Fund (many claim that even this money did not reach the state coffers being appropriated in greedy hands on the road toRussia). By contrast in June 2006 the external debt had dropped to $60 billion or less than 6% of GDP, which makes Russia practically debtless by international comparison. The debt rates in European countries are significantly higher e.g. in the same year in Germany the total was 67,7%, in France 66,8%, in Finland 41,1% and Italy 106,4% (2006 figures, ECB). The problem in recent years has not been to extract payments from Russia on its debt, but to keep Russia from paying off all the creditors ahead of schedule like the Paris Club, the group of Western creditor nations, was shocked to experience last year.
The currency and gold reserves of the Russian Central Bank where a mere 36,6 billion USD in 2001, but today they have ballooned to a staggering 315 billions (source: www.minfin.ru). Russia’s reserves are today the third biggest in the world trailing just behind China and Japan. On top of that there is a stabilization fund where surplus proceeds from oil revenues are channeled; this fund had by January 1, 2007 accumulated 88,7 billion USD (source: www.minfin.ru).
The officially calculated average monthly salary in Russia was 81 USD at the time when Putin took the helm of a very shaky country, but at the beginning of year 2006 the average salary was 371 in dollar terms and by December 2006 it had already reached 550 dollars. This is the highest level of salaries paid in all CIS countries. Still these absolute figures should not be compared with Western salaries; the differences in purchasing power and the economic structure hide a different reality more favorable for Russia.
The World Bank estimated that in 2001 27,3% of Russians or 40 million people lived below the poverty line; end of 2005 the number of people in such dire poverty had been halved amounting to 15,8% of the population or 22,6 millions (World Bank). According to recent EU statistics this figure corresponds exactly with the EU average which is the same unfortunate 16% (Business Week, February 2007).
http://www.russiablog.org/2007/03/russias_good_fortune_the_tax_r.php
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