The ex-Soviet Union

[Chumpsky]

The standard of living of the vast majority of citizens in the ex-USSR are vastly worse now, more than a decade after capitalist restoration. Apparently the free market has yet to work its marvels. Any explanations?

[december]

*Originally posted by Chumpsky *
**The standard of living of the vast majority of citizens in the ex-USSR are vastly worse now, more than a decade after capitalist restoration. **

Can we start with some economic data supporting this allegation?

[Shodan]

Because the free market has yet to work its marvels?

[Chumpsky]

*Originally posted by Shodan *
**Because the free market has yet to work its marvels? **

So how long do you figure it will take for those marvels to start working?

[Airman_Doors_USAF]

Because people like you are so intent on making sure capitalism fails so the totalitatianism of the past can be restored and they can regain the lost power and prestige they once had?

That’s my guess. Maybe posting some facts instead of saying “OK, it doesn’t work, so neener neener neener” would help to make it less of a guess and more of an educated opinion.

[Shodan]

Well, Chumpsky, my best guesstimate would be between twenty and thirty years.

If they go back to Marxism, never.

They have to switch from a labor-extensive to a labor-intensive economy, build up their communications infrastructure, and nurture their enterprenueurial class. Tough row to hoe, no doubt about it.

If you thought free-market capitalism was an easy answer, don’t bet on it. There aren’t any of those. They were stalled for eighty years figuring out that a planned economy just doesn’t react fast enough to work.

Regards,
Shodan

[Chumpsky]

*Originally posted by Airman Doors, USAF *
**Because people like you are so intent on making sure capitalism fails so the totalitatianism of the past can be restored and they can regain the lost power and prestige they once had?
**

What, you mean a few anti-capitalists like myself have the power to sabotage the wonders of the free market? Amazing. And, even with plenty of you guys out there making the world safe for Wall Street, just our malcontentedness can do that? Now, get back to defending the Fortune 500!

BTW, here is a discussion of the situation 5 years after capitalist restoration in Russia. One of the best summaries is in Michael Parenti’s book Blackshirts and Reds. The situation is a total disaster, in every arena. While a few people have become very rich, the rest of the population is really suffering. In Russia, 10,000 workers stopped working not because they had gone on strike, but because they had lost all strength from hunger. Agricultural production has plummeted, life expectancy has plummeted, and the infant mortality rate has sharply risen.

[Chumpsky]

*Originally posted by Shodan *
**If you thought free-market capitalism was an easy answer, don’t bet on it. There aren’t any of those. They were stalled for eighty years figuring out that a planned economy just doesn’t react fast enough to work. **

Really? Well, that doesn’t explain why people are worse off now than under socialism. It also doesn’t explain how the USSR was able to industrialize in a decade if planned economies are so awful.

Yeltsin claimed that 5 years was enough for the free-market to bring greater prosperity to Russia. Now, we see that free-market reforms have a negative impact on the economy and well-being of the people. Of course, this is all just a “temporary” adjustment period, that seems to go on forever. Of course, it will go on forever if there is no socialist reform.

[Brutus]

*Originally posted by Chumpsky *
**Really? Well, that doesn’t explain why people are worse off now than under socialism. It also doesn’t explain how the USSR was able to industrialize in a decade if planned economies are so awful.

Yeltsin claimed that 5 years was enough for the free-market to bring greater prosperity to Russia. Now, we see that free-market reforms have a negative impact on the economy and well-being of the people. Of course, this is all just a “temporary” adjustment period, that seems to go on forever. Of course, it will go on forever if there is no socialist reform. **

Could we see a cite for “people are worse off now…”?

You may say so, but that hardly makes it so.

[El_Kabong]

Over in this thread, Chumpsky has been asked by a couple of Venezuelan posters to support with some specifics his assertion that the election of Chavez has benefited the poor. So far he has ignored these requests.

Seems to me if he has time to open this thread, he has time to respond there. Me, I suggest holding off further discussion in this thread to provide the OP with sufficient time to clear up some of his loose ends.

[Duck_Duck_Goose]

Not until I get done posting this.

The CIA Speaks, Your Tax Dollars At Work.

http://www.cia.gov/cia/publications/factbook/geos/rs.html

A decade after the implosion of the Soviet Union in December 1991, Russia is still struggling to establish a modern market economy and achieve strong economic growth. In contrast to its trading partners in Central Europe - which were able to overcome the initial production declines that accompanied the launch of market reforms within three to five years - Russia saw its economy contract for five years, as the executive and legislature dithered over the implementation of many of the basic foundations of a market economy.

Russia achieved a slight recovery in 1997, but the government’s stubborn budget deficits and the country’s poor business climate made it vulnerable when the global financial crisis swept through in 1998. The crisis culminated in the August depreciation of the ruble, a debt default by the government, and a sharp deterioration in living standards for most of the population.

The economy subsequently has rebounded, growing by an average of more than 6% annually in 1999-2001 on the back of higher oil prices and a weak ruble. This recovery, along with a renewed government effort in 2000 and 2001 to advance lagging structural reforms, have raised business and investor confidence over Russia’s prospects in its second decade of transition.

Yet serious problems persist. Russia remains heavily dependent on exports of commodities, particularly oil, natural gas, metals, and timber, which account for over 80% of exports, leaving the country vulnerable to swings in world prices. Russia’s industrial base is increasingly dilapidated and must be replaced or modernized if the country is to achieve sustainable economic growth. Other problems include widespread corruption, lack of a strong legal system, capital flight, and brain drain.

Russia scores a poor 3.70, “Mostly Unfree”, on the Heritage Foundation’s Index of Economic Freedom. Mainly it’s the high inflation rate, the booming black market, the poor level of protection of property rights, and “Overweening bureaucracy, lack of transparency, and red tape” that are all holding Russia back.

http://cf.heritage.org/index/country.cfm?ID=122

Since being elected president in April 2000, Vladimir Putin has concentrated on consolidating his political power and boasting of economic reforms. The trend toward increased political and administrative regulation is characterized by cutbacks in regional autonomy, interference in regional elections, crackdowns on the independent media, the granting of increased power to the country’s security agencies, and a reluctance to introduce military and judicial reforms. Putin’s market-oriented policy could be undermined in the long run by the lack of democratic control and transparency.

Nevertheless, his achievements have been impressive. He has presented balanced budgets, enacted a flat 13 percent personal income tax, and reduced the corporate tax to 24 percent and the small-business tax to 20 percent. In addition, since September 11, he has demonstrated his readiness to integrate Russia into the Western community.

Although Putin’s rating in opinion polls remains exceptionally high at 70 percent, it is possible that as the parliamentary and presidential elections of 2003-2004 approach, he will try to preserve his strong public support at the cost of slowing unpopular but vital structural reforms. Although the government has clearly indicated that accession to the World Trade Organization is a major priority, it is not likely to meet the accession standards before 2003-2004. Russia must comply with WTO requirements that include creating a non-discriminatory environment for foreign goods and services, protecting intellectual property rights, and reforming the financial and banking sectors.

Although the main portion of capital spending is financed by profits from increased oil and gas exports, bank lending accounts for only 3 percent of investment. Without significant foreign competition, financial companies lack proper incentives to improve their operations.

Scores for previous years–the higher the number, the worse the score. Looks to me like it’s been slowly getting a little bit worse since 1995. But bear in mind, this is only an index of economic freedom–how open Russia is to foreign investors, how much regulation their banking system has, how well they take care of your investment.

2003 3.70
2002 3.70
2001 3.70
2000 3.70
1999 3.50
1998 3.35
1997 3.55
1996 3.50
1995 3.40

Contrast this with Switzerland, which scores 1.95 “Free”, the U.S., which scores 1.80 “Free”, and the UK, which scores 1.85 “Free”. You can look up other countries here.

Center for Defense Information

CDI Russia Weekly #216 Contents
#1
Moscow Times
July 25, 2002
UN Says Russia 60th Best Place to Live
By Robin Munro
Staff Writer

Norway is ranked first and Russia slid from 55th to 60th as the best country in which to live, according to a United Nations report released Wednesday.

However, officials at the UN Development Program, which compiled the annual report on 173 countries, said the quality of life in Russia was steadily rising and had only dropped in this year’s report because other countries had progressed more quickly.

“The changes in ranking are due to other countries’ actions rather than a slip in Russia’s performance,” UNDP spokesman Nikolai Dyuzhev said.

The Human Development Index measures a country’s achievements in terms of life expectancy, educational attainment and adjusted real income.

Norway led the list for a second year, followed by Sweden, Canada, Belgium, Australia and the United States. Russia is topped by the former Soviet republics of Estonia (42), Lithuania (49), Latvia (53) and Belarus (56). Ukraine (80) is sandwiched between Kazakhstan (79) and Georgia (81).

From 168th to 173rd place on the index are Ethiopia, Burkina Faso, Mozambique, Burundi, Niger and Sierra Leone.

Big tables of wages, etc. comparing the different former Soviet republics with each other. It’s FWIW, as it’s apparently his own research.

Center for Defense Information

November 21, 2001: #5558 #5559
#12 Trud No. 210 November 20 (?), 2001 [translation from RIA Novosti for personal use only] POST-SOVIET REPUBLICS HAVE DIFFERENT LIVING STANDARDS By Vitaly GOLOVACHEV, Trud political analyst

The Soviet Union’s disintegration was announced December 8, 1991, that is, almost 10 years ago. Consequently, 12 Soviet republics became independent states, subsequently merging into the Commonwealth of Independent States (CIS). They had different “jump-off positions” that were determined by economic-development levels, the role of republican economies in the entire system of nationwide co-production arrangements, specific features of the social sphere, minerals, other natural resources, education standards, national mentalities, as well as by local customs and traditions.

National-development models also played a really important part in this context. Living standards constitute a veritable indicator, or litmus test, for assessing the social efficiency of specific reforms.

They say that statistical records know everything; however, the situation is somewhat different in this particular case. Press releases being issued by the CIS Committee for Statistics imply that Uzbekistan, Turkmenistan and Georgia don’t submit the relevant data dealing with their respective wages and other vital social indices. Therefore we had to find all the required materials on our own.

The Georgian statistical service eagerly informed me about average wages being received by local hired workers (90-106 lari), also telling me about the number of Georgians, who live below the official poverty line (approximately 50 percent of the entire republican population). I also learned the size of minimal pensions (14 lari). All these statistics enabled me to compare some aspects of living standards in 10 CIS countries.

http://www.rferl.org/nca/features/1999/08/F.RU.990812135001.html

Russia: Standard Of Living Still Lower A Year After Economic Crisis
By Sophie Lambroschini

This is the second of two features marking the one-year anniversary of the Russian financial meltdown of August 17, 1998. In part two, RFE/RL Moscow correspondent Sophie Lambroschini reports that while average Russians are far from regaining their modest pre-crisis standard of living, many Muscovites have “adapted” to the new circumstances. However, she says that reports from many of Russia’s regions indicate life outside the capital is tougher.

Moscow, 12 August 1999 (RFE/RL) – Right under the Kremlin walls, the Alexandrovsky garden attracts hundreds of Muscovites on sunny weekends for a walk or even the celebration of a wedding. Hot-dog, ice-cream and soft-drink vendors stand shoulder to shoulder. While rented stretch-limousines wait outside the park, newlyweds line up to lay carnations at the tomb of the unknown soldier before swallowing the first of many glasses of champagne. Nothing reflects the economic crisis that hit just one year ago.

However, many of those enjoying a sunny summer day in the garden are quick to tell you that times are hard. They know that since the ruble collapsed and Russian banks gobbled up peoples’ savings, the standard of living of the average Russian has fallen by up to 30 percent. And under the appearance of well-being, not much can temper the bitterness they feel.

OTOH, there’s this.

http://news.bbc.co.uk/2/hi/business/2296107.stm

Tuesday, 15 October, 2002, 12:44 GMT 13:44 UK
Investors wary about Russian industry

< snip >

Despite a groundbreaking new joint-venture between US global car giant General Motors and the country’s largest car maker AvtoVaz, Russia is failing to convince foreigners to invest. Foreign direct investment, or FDI, in Russia is tiny compared with other East European countries - and the situation is getting worse. FDI fell 25% in the first half of this year to a paltry $1.1bn (£720m), according to figures released Tuesday by the Central Bank of Russia.

But there are exceptions that may lead to a new wave of investments in the future. To great fanfare and the blessing of Orthodox priests,the first Chevrolet Niva 4x4s have rolled off the GM-AvtoVaz production line in the southern city of Togliatti, known here as the Detroit of Russia.

< snip >

The deal is remarkable as a rare example of foreigners investing in Russia’s middle weight industry, a high-cost long-term sector that until now most have steered clear of, preferring the fast returns of light industries like food processing.

< snip >

Today, however, corruption, an ineffective legal system and what some see as a deep ambivalence towards foreigners making money in Russia means investing here is so far still risky.

“Russians welcome investors who buy factories, re-employ people, and pay taxes. But when they see how easy it is to make these industrial assets profitable some of them resent it and try to take control themselves,” says Roland Nash of Renaissance Capital in Moscow, who points out that these are now the exception rather than the rule.

Stories of failed or lost investments still occur regularly, the tactics in these battles as ingenious as they are troubling. Shutting off power to factories, forging shareholder registers to change ownership, or insider sales of company assets at rock-bottom prices to friends and cronies are all well documented examples.

And then there’s…Hosiery.

http://www.bisnis.doc.gov/bisnis/country/010713rustextiles.htm

HOSIERY: A MARKET SNAPSHOT AND CERTIFICATION REQUIREMENTS
Marina Parshukova
07/10/2001

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2001. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.

Summary.

In the past two years, Russia’s apparel and textile industry has
shown steady growth with production increasing by 10-20%. Imported goods, particularly hosiery, account for a considerable portion of the apparel market. Hosiery is in a high demand in Russia. Because of growing income levels and an increasing standard of living, Russia is among the best markets for U.S.-made hosiery. As with other goods, hosiery imports must
be certified.

End summary. [ more]

So, it looks like the Bottom Line is:
[ul][li]that the Russian Capitalist Experiment is still ongoing[/li][li]that Russia is pretty much still where it was 10 years ago–not that much better, but not that much worse[/li][li]that it isn’t Capitalism itself that’s at fault, but the fault of the people who make up the system[/li][li]that Putin wasn’t “evil” or “wrong”–he was just over-optimistic, and stonewalling, because he’s a politician, and that’s what politicians do[/li][*]that the Experiment might be progressing faster if the Russians could stop shooting themselves in the foot. (feet?)[/ul]

[Eva_Luna]

Well, for starters, what’s going on in Russia right now may no longer be socialism (if, indeed, it ever was), but it sure ain’t free-market capitalism, either. The old elites are still in control in many respects, and while it’s true that the Soviet-era safety nets have been removed from those who needed them most (pensioners are getting royally screwed, as are public employees such as teachers), even in Soviet times most people scraped by through earning extra money from side, under-the-table jobs and limited private (illegal) commerce. In fact, the worst fate you could ever wish a Soviet was “may you be forced to live on your salary!”

Start off with Jim Leitzel’s * Russian Economic Reform* if you want a more complex depiction; if you find it useful, there’s lots more where that came from. I also really like David Remnick’s Lenin’s Tomb for a general, non-scholarly overview of contemporary Russian society. Upon request, I’ll dig out my syllabus from a grad course called “Post-Socialist Economies in Transition.”

Eva Luna, M.A. in Russian & East European Studies (Leningrad fall '89, Novosibirsk summer '95)

[syncrolecyne]

Here’s some selected figures from the CIA Factbook of 1991 (the last year there was an entry for the U.S.S.R.) and the 2002 edition.

I have a few doubts about the CIA’s factbooks (especially on their calculations of GDP and Per Capita Income, which underwent some reorganization in the mid-1990’s). But it’s what I have…

Also I won’t post all 15 republics, just Russia, but I think it is somewhat average (between the wealthier Baltics on one hand and impoverished places like Moldova and Tajikistan on the other hand).
1991 U.S.S.R.

Population: 293,047,571 (July 1991), growth rate 0.7% (1991)

Birth rate: 17 births/1,000 population (1991)

Death rate: 10 deaths/1,000 population (1991)

Net migration rate: 0 migrants/1,000 population (1991)

Infant mortality rate: 23 deaths/1,000 live births (1991)

Life expectancy at birth: 65 years male, 74 years female

Total fertility rate: 2.4 children born/woman (1991)

Literacy: 98% (male 99%, female 97%) age 15 and over can
read and write (1989)

GNP: approximately $2,660 billion, per capita $9,130

_#_Telecommunications: 37 million telephone subscribers; phone
density of 37 per 100 households; urban phone density is 9.2 phones
per 100 residents; rural phone density is 2.9 per 100 residents (June
1990);
automatic telephone dialing with 70 countries and between 25 Soviet
cities (April 1989);
stations–457 AM, 131 FM, over 900 TV; 90 million TVs (December 1990)
** Russia (1996)**

Population: 148,178,487 (July 1996 est.)

Population growth rate: -0.07% (1996 est.)

Birth rate: 10.15 births/1,000 population (1996 est.)

Death rate: 16.34 deaths/1,000 population (1996 est.)

Net migration rate: 5.47 migrant(s)/1,000 population (1996 est.)

Infant mortality rate: 24.7 deaths/1,000 live births (1996 est.)
total population: 63.24 years

male: 56.51 years

female: 70.31 years (1996 est.)

Total fertility rate: 1.42 children born/woman (1996 est.)

Literacy: age 15 and over can read and write (1989 est.)
total population: 98%
male: 100%
female: 97%
GDP: purchasing power parity - $796 billion (1995 estimate as extrapolated from World Bank estimate for 1994)
GDP real growth rate: -4% (1995 est.)
GDP per capita: $5,300 (1995 est.)

Telephones: 25.4 million (1993 est.)
Radios: 50 million (1993 est.)(radio receivers with multiple speaker systems for program diffusion 74,300,000)
Televisions: 54.85 million (1992 est.)

Russia 2002
Population:
144,978,573 (July 2002 est.)

Population growth rate:
-0.33% (2002 est.)

Birth rate:
9.71 births/1,000 population (2002 est.)

Death rate:
13.91 deaths/1,000 population (2002 est.)

Net migration rate:
0.94 migrant(s)/1,000 population (2002 est.)

Infant mortality rate:
19.78 deaths/1,000 live births (2002 est.)

Life expectancy at birth:
total population: 67.5 years
female: 72.97 years (2002 est.)
male: 62.29 years

Total fertility rate:
1.3 children born/woman (2002 est.)

HIV/AIDS - adult prevalence rate:
0.18% (1999 est.)

HIV/AIDS - people living with HIV/AIDS:
130,000 (1999 est.)

HIV/AIDS - deaths:
850 (1999 est.)

Literacy:
definition: age 15 and over can read and write
total population: 98%
male: 100%
female: 97% (1989 est.)

GDP:
purchasing power parity - $1.2 trillion (2001 est.)
GDP - real growth rate:
5.2% (2001 est.)
GDP - per capita:
purchasing power parity - $8,300 (2001 est.)

Telephones - main lines in use:
30 million (1998)
Telephones - mobile cellular:
2.5 million (October 2000)
Radios:
61.5 million (1997)
Televisions:
60.5 million (1997)
Providers (ISPs):
35 (2000)
Internet users:
9.2 million (2000)

---

Now, and I am just practicing armchair demography here, it seems the decline was set in motion by the break up, conditions bottomed out several years ago, and are now recovering somewhat.

I won’t even get into the question of how accurate those late-Soviet statistics were. Gorbachev initiated glasnost largely because Soviet fiddling with numbers had become endemic.

[Duck_Duck_Goose]

originally posted by Chumpsky:
In Russia, 10,000 workers stopped working not because they had gone on strike, but because they had lost all strength from hunger. Agricultural production has plummeted, life expectancy has plummeted, and the infant mortality rate has sharply risen.

[ol][li]I can’t find the “10,000 workers stopped working because they were faint from hunger” thing anywhere. I find references to hunger strikes by smaller groups (miners, aviation workers, etc.) but nothing that says that 10,000 workers had to down tools because they were too faint to continue. Got a cite?[/li]
[li]Why agricultural production has “plummeted”.[/li]
http://www.ers.usda.gov/briefing/Russia/issues_econ_reform.htm#agprod

March 8, 2001
Agricultural production

Reform substantially reduced agricultural production. The livestock sector has severely contracted, herds and production, for both demand and supply-side reasons. The drop in consumers’ real income from price liberalization reduced demand for all foodstuffs, particularly meat and other high-value products, which are highly sensitive to changes in consumer purchasing power. Price liberalization also worsened livestock producers’ terms of trade, as input prices increased much more than output prices. This shows that the Soviets subsidized the livestock sector not only directly, but also indirectly through the price system. Trade liberalization further hurt Russian livestock producers, who could not compete with low cost, high quality imports.

The contraction of the livestock sector also contributed to a drop in grain output, because smaller livestock herds require less feed grain. Like the livestock sector, the crop sector also suffered from worsening terms of trade.

Although the drop in agricultural production reduced overall food consumption, pre-reform Russian per capita consumption of most foods was high, relative to both health requirements and other countries. **The decline in food production and consumption has not threatened life or health. **Although any drop in food consumption might appear detrimental to consumers, the restructuring of production and consumption is in fact a result of their new power to influence what goods are produced. Decreasing the livestock sector allows the transfer of resources to produce other goods and services that people want more, given existing prices that reflect the true costs of production.[bolding mine]

[li]The statistics that say that life expectancy in Russia has “plummeted” are based on data from 1990-1994.[/li]
http://jama.ama-assn.org/issues/v279n10/abs/jlf71019.html

Age-adjusted mortality in Russia rose by almost 33% between 1990 and 1994. During that period, life expectancy for Russian men and women declined dramatically from 63.8 and 74.4 years to 57.7 and 71.2 years, respectively, while in the United States, life expectancy increased for both men and women from 71.8 and 78.8 years to 72.4 and 79.0 years, respectively. More than 75% of the decline in life expectancy was due to increased mortality rates for ages 25 to 64 years.

Overall, cardiovascular diseases (heart disease and stroke) and injuries accounted for 65% of the decline in life expectancy while infectious diseases, including pneumonia and influenza, accounted for 5.8%, chronic liver diseases and cirrhosis for 2.4%, other alcohol-related causes for 9.6%, and cancer for 0.7%. Increases in cardiovascular mortality accounted for 41.6% of the decline in life expectancy for women and 33.4% for men, while increases in mortality from injuries (eg, falls, occupational injuries, motor vehicle crashes, suicides, and homicides) accounted for 32.8% of the decline in life expectancy for men and 21.8% for women.

Conclusion.

The striking rise in Russian mortality is beyond the peacetime experience of industrialized countries, with a 5-year decline in life expectancy in 4 years’ time. Many factors appear to be operating simultaneously, including economic and social instability, high rates of tobacco and alcohol consumption, poor nutrition, depression, and deterioration of the health care system. Problems in data quality and reporting appear unable to account for these findings. These results clearly demonstrate that major declines in health and life expectancy can take place rapidly.

More recent data shows Russia on a par with Latin America in terms of life expectancy.

http://www.who.int/inf-pr-2000/en/pr2000-life.html

Latin America – Cuba has the highest healthy life expectancy in the region, at 68.4 years, near U.S. levels. It is followed by Uruguay at 67.0 years; Argentina at 66.7 years and Costa Rica at 66.7 years. Brazil is split, with a high healthy life expectancy in its southern half, and a lower one in the north. The total average is a relatively low 59.1 years, at 55.2 for men and 62.9 for female babies.

< snip >

Russia – Healthy life expectancy is a fair 66.4 for female babies but just 56.1 years for males. This is one of the widest sex gaps in the world. The most common explanation is the high incidence of male alcohol abuse, which led to high rates of accidents, violence and cardiovascular disease. From 1987 to 1994, the risk of premature death increased by 70% for Russian males. Since 1994, life expectancy has been improving for males.
Similar rates exist for other major countries of the former Soviet Union. In Ukraine, female babies can expect to live an equivalent of 67.5 years of healthy life versus 58.5 years for male babies. In Belarus, the rates are 67.2 years for female babies and 56.2 years for male babies.[bolding mine]

[li]The Russian infant mortality rate (2002 estimate) was 19.78 deaths/1,000 live births. (This is about the same as Romania, Panama, Malaysia, and the British Virgin Islands.)[/li]http://www.cia.gov/cia/publications/factbook/fields/2091.html

The infant mortality rate in 2001 was 20.05 deaths/1,000 live births (2001 est.)
http://www.bartleby.com/151/a28.html

The infant mortality rate in 1995 (estimated) was 26.4 deaths/1,000 live births
http://www.immigration-usa.com/wfb/russia_people.html

So, far from the Russian infant mortality rate “sharply rising”, it has in fact lowered, from 26.4 deaths in 1995 to 19.78 infant deaths per 1,000 live births in 2002.[/ol]

**The situation is a total disaster, in every arena.

** Um, no, doesn’t look like it.

[Sunspace]

:eek:
The average Russian’s heart must be breaking. A very tough thing, to go through such a decline. Yet… not as tough as some others.

[Ulterior]

Chumpsky, your logic works along the following lines:

1. Russia used to be Communist.
2. Russia is now Capitalist.
3. Russia is doing a lot worse now.
4. Capitalism must be at fault.

That’s one of the silliest examples of post hoc ergo propter hoc logic that I’ve seen on this board. It consists essentially of a logicl leap (stuff sucks now, this must be the reason, not demonstrating evidence that the shift to Capitalism was the reason). It’s also a lead-in to an example war, even if valid: for every Russia, I’ve got a United States.

There’s a few other things you could argue that would make more sense:

1. The pace of change was far too quick, since people didn’t recognize the incongruities of attempting to apply capitalism instantly to a nation that had been Communist for 70 years, and before that, feudal, caught up as they were in dewy-eyed idealism and the idea that capitalism would be some sort of magic pill.
2. It simply makes sense that Russia, like any other country wracked with extreme corruption at every level of government, regardless of economic model, would be in the crapper.

The difficulty is that you get caught up in #1 as well: you think that capitalists, by and large, argue that capitalism is some sort of instant fix. If they do, they are silly capitalists. However, capitalism applied with foresight, reason, creativity, memory, and self-criticism, makes sense to me. The idea that Russia is not a case of this sort of application isn’t a particularly stunning one.

-Ulterior

[Caffeine.addict]

Have the former Soviet republics really converted to free market capitalism? IIRC, most of the industries are state controlled. In addition, how many of those republics are really democracies now? I seem to recall that a fair number of these countries have fairly authoritarian and corrupt governments which does not bode well for rule of law. This is important because if you have a stable government and strong rule of law, you are more likely to be able to attract foreign investment which would allow them to develop infrastructure and industries.

It truly is a shame since quite a few of those nations have natural resources which if properly exploited could allow their economies to grow.

[even_sven]

*Originally posted by Shodan *
**If you thought free-market capitalism was an easy answer, don’t bet on it. There aren’t any of those. They were stalled for eighty years figuring out that a planned economy just doesn’t react fast enough to work.
**

You do realize that the USSR went from being a third world country to an industrialized world power (superpower, even) despite getting 20-40 million of their people slaughtered by Nazis, ya?

Say what you want about the USSR (and there is plenty to say), you can’t say they didn’t progress. Breadlines may suck, but they mean that they get bread, which is a lot more than they had before and is still more than people in plenty of good capitalist countries have nowdays.

You guys gotta remember, what happened in 1991 was not a situation where the people where calling for the system to fall (although there was plenty of discontent). In 1991, the people in charge figured that they’d have more to gain by dismanteling the USSR and dividing what the state once owned amongst themselves. The only thing they sought to improve was their own pocketbooks.

The Vladivostok Daily had a pretty good article a few days back about how children view Soviet times

Russia has got to be the misunderstood country ever. Even if you don’t have an agenda to push (which Chumpsky and I surely do) it’s still hard to convince people of some pretty basic facts, like that Communist Russia had a thrivng and innovative film industry,. It’s amazeing the amount of disinformation people are willing to hold one to, despite ample evidence to the contrary.

[Duck_Duck_Goose]

**Have the former Soviet republics really converted to free market capitalism? **

http://www.countrywatch.com/@school/new_countries.htm

The following is a comprehensive list of new countries:
The Former Soviet Union (The U.S.S.R.):

After the breakup of the former Soviet Union, 12 countries became independent on December 26, 1991. Several months prior to the disintegration of the U.S.S.R., however, three countries (the Baltic States), Estonia, Latvia and Lithuania, declared their independence and became sovereign states. Some analysts suggest that although the dissolution of the former Soviet Union was imminent, the declaration of independence by the Baltic States acted as a catalyst for the breakup. The fifteen independent states rooted in the former Soviet Union are:

Armenia - Heritage Foundation Index of Economic Freedom, 2.65 “Mostly Free”.
http://cf.heritage.org/index/country.cfm?ID=5.0
http://www.cia.gov/cia/publications/factbook/geos/am.html

Under the old Soviet central planning system, Armenia had developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics in exchange for raw materials and energy. Since the implosion of the USSR in December 1991, Armenia has switched to small-scale agriculture away from the large agroindustrial complexes of the Soviet era. The agricultural sector has long-term needs for more investment and updated technology. The privatization of industry has been at a slower pace, but has been given renewed emphasis by the current administration.

Armenia is a food importer, and its mineral deposits (gold, bauxite) are small. The ongoing conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh and the breakup of the centrally directed economic system of the former Soviet Union contributed to a severe economic decline in the early 1990s.

By 1994, however, the Armenian Government had launched an ambitious IMF-sponsored economic program that has resulted in positive growth rates in 1995-2001. Armenia also managed to slash inflation and to privatize most small- and medium-sized enterprises. The chronic energy shortages Armenia suffered in recent years have been largely offset by the energy supplied by one of its nuclear power plants at Metsamor.

Armenia’s severe trade imbalance has been offset somewhat by international aid, domestic restructuring of the economy, and foreign direct investment.

Azerbaijan - Heritage Foundation Index of Economic Freedom, 3.35 “Mostly Unfree”.
http://cf.heritage.org/index/country.cfm?ID=8.0
http://www.cia.gov/cia/publications/factbook/geos/aj.html

Azerbaijan’s number one export is oil. Azerbaijan’s oil production declined through 1997 but has registered an increase every year since. Negotiation of production-sharing arrangements (PSAs) with foreign firms, which have thus far committed $60 billion to oilfield development, should generate the funds needed to spur future industrial development. Oil production under the first of these PSAs, with the Azerbaijan International Operating Company, began in November 1997.

Azerbaijan shares all the formidable problems of the former Soviet republics in making the transition from a command to a market economy, but its considerable energy resources brighten its long-term prospects.

Baku has only recently begun making progress on economic reform, and old economic ties and structures are slowly being replaced. An obstacle to economic progress, including stepped up foreign investment in the non-energy sector, is the continuing conflict with Armenia over the Nagorno-Karabakh region.

Trade with Russia and the other former Soviet republics is declining in importance while trade is building with Turkey and the nations of Europe. Long-term prospects will depend on world oil prices, the location of new pipelines in the region, and Azerbaijan’s ability to manage its oil wealth.

Belarus - Heritage Foundation Index of Economic Freedom, 4.30 “Repressed”.
http://cf.heritage.org/index/country.cfm?ID=13.0
http://www.cia.gov/cia/publications/factbook/geos/bo.html

Belarus has seen little structural reform since 1995, when President LUKASHENKO launched the country on the path of “market socialism.” In keeping with this policy, LUKASHENKO reimposed administrative controls over prices and currency exchange rates and expanded the state’s right to intervene in the management of private enterprise.

In addition to the burdens imposed by high inflation and persistent trade deficits, businesses have been subject to pressure on the part of central and local governments, e.g., arbitrary changes in regulations, numerous rigorous inspections, retroactive application of new business regulations, and arrests of “disruptive” businessmen and factory owners. Close relations with Russia, possibly leading to reunion, color the pattern of economic developments. For the time being, Belarus remains self-isolated from the West and its open-market economies.

Estonia - Heritage Foundation Index of Economic Freedom, 1.80 “Free”.
http://cf.heritage.org/index/country.cfm?ID=46.0
http://www.cia.gov/cia/publications/factbook/geos/en.html

Estonia, as a new member of the World Trade Organization, is steadily moving toward a modern market economy with increasing ties to the West, including the pegging of its currency to the euro. A major goal is accession to the EU, possibly by 2004. The state of the economy is greatly influenced by developments in Finland and Sweden, two major trading partners.

Georgia - Heritage Foundation Index of Economic Freedom, 3.40 “Mostly Unfree”.
http://cf.heritage.org/index/country.cfm?ID=53.0
http://www.cia.gov/cia/publications/factbook/geos/gg.html

Georgia’s main economic activities include the cultivation of agricultural products such as citrus fruits, tea, hazelnuts, and grapes; mining of manganese and copper; and output of a small industrial sector producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals.

The country imports the bulk of its energy needs, including natural gas and oil products. Its only sizable internal energy resource is hydropower.

Despite the severe damage the economy has suffered due to civil strife, Georgia, with the help of the IMF and World Bank, has made substantial economic gains since 1995, achieving positive GDP growth and curtailing inflation. However, the Georgian government suffers from limited resources due to a chronic failure to collect tax revenues.

Georgia also suffers from energy shortages; it privatized the T’bilisi distribution network in 1998, but collection rates are low, making the venture unprofitable. The country is pinning its hopes for long-term recovery on its role as a transit state for pipelines and trade. The start of construction on the Baku-T’bilisi-Ceyhan pipeline in summer 2002 will bring much-needed investment and job opportunities to the country.

Kazakhstan - Heritage Foundation Index of Economic Freedom, 3.50 “Mostly Unfree”.
http://cf.heritage.org/index/country.cfm?ID=77.0
http://www.cia.gov/cia/publications/factbook/geos/kz.html

Kazakhstan, the largest of the former Soviet republics in territory, excluding Russia, possesses enormous fossil fuel reserves as well as plentiful supplies of other minerals and metals. It also is a large agricultural - livestock and grain - producer. Kazakhstan’s industrial sector rests on the extraction and processing of these natural resources and also on a growing machine-building sector specializing in construction equipment, tractors, agricultural machinery, and some defense items.

The breakup of the USSR in December 1991 and the collapse in demand for Kazakhstan’s traditional heavy industry products resulted in a short-term contraction of the economy, with the steepest annual decline occurring in 1994. In 1995-97, the pace of the government program of economic reform and privatization quickened, resulting in a substantial shifting of assets into the private sector.

Kazakhstan has enjoyed double-digit growth in 2000-01 thanks largely to its booming energy sector, but also to economic reform, good harvests, and foreign investment. The opening of the Caspian Consortium pipeline in 2001, from western Kazakhstan’s Tengiz oilfield to the Black Sea, substantially raises export capacity. Astana has embarked upon an industrial policy designed to diversify the economy away from overdependence on the oil sector by developing light industry.

Kyrgyzstan - Heritage Foundation Index of Economic Freedom, 3.35 “Mostly Unfree”.
http://cf.heritage.org/index/country.cfm?ID=82.0
http://www.cia.gov/cia/publications/factbook/geos/kg.html

Kyrgyzstan is a small, poor, mountainous country with a predominantly agricultural economy. Cotton, wool, and meat are the main agricultural products and exports. Industrial exports include gold, mercury, uranium, and electricity.

Kyrgyzstan has been one of the most progressive countries of the former Soviet Union in carrying out market reforms. With fits and starts, inflation has been lowered to an estimated 7% in 2001.

Much of the government’s stock in enterprises has been sold. Drops in production had been severe since the breakup of the Soviet Union in December 1991, but by mid-1995 production began to recover and exports began to increase. Growth was held down to 2.1% in 1998 largely because of the spillover from Russia’s economic difficulties, but moved ahead to 3.6% in 1999, 5% in 2000, and 5% again in 2001.

Despite these gains, poverty indicators are no better in 2001 than in 1996. On the positive side, the government and the international financial institutions have embarked on a comprehensive medium-term poverty reduction and economic growth strategy. In November 2001, with financing assurance from the Paris Club, the IMF Board approved a three-year, $93 million Poverty Reduction and Growth Facility.

Latvia - Heritage Foundation Index of Economic Freedom, 2.45 “Mostly Free”.
http://cf.heritage.org/index/country.cfm?ID=84.0
http://www.cia.gov/cia/publications/factbook/geos/lg.html

Latvia’s transitional economy recovered from the 1998 Russian financial crisis, largely due to the SKELE government’s budget stringency and a gradual reorientation of exports toward EU countries, lessening Latvia’s trade dependency on Russia. The majority of companies, banks, and real estate have been privatized. Latvia officially joined the World Trade Organization in February 1999 - the first Baltic state to join - and was invited at the Helsinki EU Summit in December 1999 to begin accession talks in early 2000. Preparing for EU membership over the next few years remains a top foreign policy goal. The high current account deficit remains a major concern.

Lithuania - Heritage Foundation Index of Economic Freedom, 2.35 “Mostly Free”.
http://cf.heritage.org/index/country.cfm?ID=88.0
http://www.cia.gov/cia/publications/factbook/geos/lh.html

Lithuania, the Baltic state that has conducted the most trade with Russia, has been slowly rebounding from the 1998 Russian financial crisis. High unemployment, at 12.5% in 2001, and weak consumption have held back recovery. Trade has been increasingly oriented toward the West. Lithuania has gained membership in the World Trade Organization and has moved ahead with plans to join the EU. Privatization of the large, state-owned utilities, particularly in the energy sector, is underway.

Moldova - Heritage Foundation Index of Economic Freedom, 3.20 “Mostly Unfree”.
http://cf.heritage.org/index/country.cfm?ID=98.0
http://www.cia.gov/cia/publications/factbook/geos/md.html

Moldova enjoys a favorable climate and good farmland but has no major mineral deposits. As a result, the economy depends heavily on agriculture, featuring fruits, vegetables, wine, and tobacco. Moldova must import all of its supplies of oil, coal, and natural gas, largely from Russia. Energy shortages contributed to sharp production declines after the breakup of the Soviet Union in 1991.

As part of an ambitious reform effort, Moldova introduced a convertible currency, freed all prices, stopped issuing preferential credits to state enterprises, backed steady land privatization, removed export controls, and freed interest rates. Yet these efforts could not offset the impact of political and economic difficulties, both internal and regional.

In 1998, the economic troubles of Russia, by far Moldova’s leading trade partner, were a major cause of the 8.6% drop in GDP. In 1999, GDP fell again, by 4.4%, the fifth drop in the past seven years; exports were down, and energy supplies continued to be erratic. Following the return to positive GDP growth in 2000 (1.9%), Moldova experienced strong 6.1% rise in GDP in 2001, driven by a marked improvement in industry and a 20% improvement in agriculture.

[Duck_Duck_Goose]

Tajikistan - Heritage Foundation Index of Economic Freedom, 3.95 “Mostly Unfree”.
http://cf.heritage.org/index/country.cfm?ID=142.0
http://www.cia.gov/cia/publications/factbook/geos/ti.html

Tajikistan has the lowest per capita GDP among the 15 former Soviet republics. Cotton is the most important crop. Mineral resources, varied but limited in amount, include silver, gold, uranium, and tungsten. Industry consists only of a large aluminum plant, hydropower facilities, and small obsolete factories mostly in light industry and food processing.

The civil war (1992-97) severely damaged the already weak economic infrastructure and caused a sharp decline in industrial and agricultural production. Even though 80% of its people continue to live in abject poverty, Tajikistan has experienced strong economic growth since 1997. Continued privatization of medium and large state-owned enterprises will further increase productivity.

Tajikistan’s economic situation, however, remains fragile due to uneven implementation of structural reforms, weak governance, and the external debt burden. Servicing of the debt, owed principally to Russia and Uzbekistan, could require as much as 50% of government revenues in 2002, thus limiting the nation’s ability to meet pressing development needs.

Turkmenistan - Heritage Foundation Index of Economic Freedom, 4.15 “Repressed”.
http://cf.heritage.org/index/country.cfm?ID=149.0
http://www.cia.gov/cia/publications/factbook/geos/tx.html

Turkmenistan is largely desert country with intensive agriculture in irrigated oases and huge gas (fifth largest reserves in the world) and oil resources. One-half of its irrigated land is planted in cotton, making it the world’s tenth largest producer.

Until the end of 1993, Turkmenistan had experienced less economic disruption than other former Soviet states because its economy received a boost from higher prices for oil and gas and a sharp increase in hard currency earnings.

In 1994, Russia’s refusal to export Turkmen gas to hard currency markets and mounting debts of its major customers in the former USSR for gas deliveries contributed to a sharp fall in industrial production and caused the budget to shift from a surplus to a slight deficit.

With an authoritarian ex-Communist regime in power and a tribally based social structure, Turkmenistan has taken a cautious approach to economic reform, hoping to use gas and cotton sales to sustain its inefficient economy. Privatization goals remain limited. In 1998-2001,

Turkmenistan has suffered from the continued lack of adequate export routes for natural gas and from obligations on extensive short-term external debt. At the same time, however, total exports have risen sharply because of higher international oil and gas prices. Prospects in the near future are discouraging because of widespread internal poverty, the burden of foreign debt, and the unwillingness of the government to adopt market-oriented reforms.

However, Turkmenistan’s cooperation with the international community in transporting humanitarian aid to Afghanistan may foreshadow a change in the atmosphere for foreign investment, aid, and technological support. Turkmenistan’s economic statistics are state secrets, and GDP and other figures are subject to wide margins of error.

Ukraine - Heritage Foundation Index of Economic Freedom, 3.65 “Mostly Unfree”.
http://cf.heritage.org/index/country.cfm?ID=151.0
http://www.cia.gov/cia/publications/factbook/geos/up.html

After Russia, the Ukrainian republic was far and away the most important economic component of the former Soviet Union, producing about four times the output of the next-ranking republic. Its fertile black soil generated more than one-fourth of Soviet agricultural output, and its farms provided substantial quantities of meat, milk, grain, and vegetables to other republics. Likewise, its diversified heavy industry supplied the unique equipment (for example, large diameter pipes) and raw materials to industrial and mining sites (vertical drilling apparatus) in other regions of the former USSR. Ukraine depends on imports of energy, especially natural gas, to meet some 85% of its annual energy requirements.

Shortly after independence in late 1991, the Ukrainian Government liberalized most prices and erected a legal framework for privatization, but widespread resistance to reform within the government and the legislature soon stalled reform efforts and led to some backtracking. Output by 1999 had fallen to less than 40% the 1991 level. Loose monetary policies pushed inflation to hyperinflationary levels in late 1993.

Ukraine’s dependence on Russia for energy supplies and the lack of significant structural reform have made the Ukrainian economy vulnerable to external shocks. Now in his second term, President KUCHMA has pledged to reduce the number of government agencies, streamline the regulatory process, create a legal environment to encourage entrepreneurs, and enact a comprehensive tax overhaul. Reforms in the more politically sensitive areas of structural reform and land privatization are still lagging.

Outside institutions - particularly the IMF - have encouraged Ukraine to quicken the pace and scope of reforms and have threatened to withdraw financial support. GDP in 2000 showed strong export-based growth of 6% - the first growth since independence - and industrial production grew 12.9%. The economy continued to expand in 2001 as real GDP rose 9% and industrial output grew by over 14%. Growth was undergirded by strong domestic demand and growing consumer and investor confidence.

Uzbekistan - Heritage Foundation Index of Economic Freedom, 4.25 “Repressed”.
http://cf.heritage.org/index/country.cfm?ID=156.0
http://www.cia.gov/cia/publications/factbook/geos/uz.html

Uzbekistan is a dry, landlocked country of which 11% consists of intensely cultivated, irrigated river valleys. More than 60% of its population lives in densely populated rural communities. Uzbekistan is now the world’s second largest cotton exporter, a large producer of gold and oil, and a regionally significant producer of chemicals and machinery.

Following independence in December 1991, the government sought to prop up its Soviet-style command economy with subsidies and tight controls on production and prices. The state continues to be a dominating influence in the economy and has so far failed to bring about much-needed structural changes.

The IMF suspended Uzbekistan’s $185 million standby arrangement in late 1996 because of governmental steps that made impossible fulfillment of Fund conditions.

Uzbekistan has responded to the negative external conditions generated by the Asian and Russian financial crises by emphasizing import substitute industrialization and by tightening export and currency controls within its already largely closed economy. Economic policies that have repelled foreign investment are a major factor in the economy’s stagnation. A growing debt burden, persistent inflation, and a poor business climate led to disappointing growth in 2001. However, in December 2001 the government voiced a renewed interest in economic reform, seeking advice from the IMF and other financial institutions.

And of course, Russia.