According to an old adage, a political analyst is a person who is able to give a coherent prediction of what is going to happen in six months’ time, and also able to explain coherently, in six months’ time, why that prediction failed. But let’s not be cruel to political analysts. Or not only to them, says this political analyst. Other social scientist forecasters also make mistakes – especially when they are pressured by politicians, are trying to give predictions for several years ahead, or when they are asked to set ambitious targets. Or all three at the same time. Sometimes therefore it makes sense to take a step back and ask if the predictions have come true.
Russia adopted an ambitious development strategy in 2008. The strategy had been under consideration since 2006, shortly after the monetization of social benefits in 2005 ended Russia’s first love affair with Vladimir Putin. The strategy had to be revised in 2012, in light of the global economic crisis, but its goals, set for the year 2020, remained ambitious. In hindsight, perhaps a little too ambitious for the politics that Russia’s leaders chose to conduct in the past decade.
The strategy intended to:
- put Russia on the trajectory of economic growth of roughly 6.5% per year. Actually, since 2014 the Russian economy has barely registered any growth. According to the latest estimates of the Ministry of Economic Development, its growth in 2019-20 could be 1.7%. The expert consensus points towards a longer period of sluggish growth.
- increase the productivity of Russian workers by 40-41%. Rosstat data is patchy, but by 2017 productivity only increased by about 14.3% from the 2007 basis and was still significantly below labor productivity in OECD economies. Russians worked longer hours than most OECD member states, yet they produced significantly less.
- increase the real disposable income of Russians by 64-72% (compared to 2012) and raise the monthly average wage to 2,700 USD. In reality, following years of falling real incomes, Russians’ real disposable income today is slightly below their 2012 level. As of September 2019, the average monthly salary was equal to slightly less than 700 USD.
- cut the energy intensity of economic production by 17-19%. In reality, this number has barely budged in relation to 2007.
- raise the proportion of the middle class to 60-70% of Russia’s population. Last year it made up only roughly 38% of it.
- ensure that by 2020 Russia is one of the five biggest economies of the world based on GDP figures in purchasing power parity. Russia nearly missed this mark: according to the IMF in 2019 it was sixth, just behind Germany. However, in terms of nominal GDP it is much further behind: in 2019, it was 11th, behind Canada, roughly at the same place as in 2008 but in a worse position proportionally.
These were not the only ambitious predictions. In 2007, Vladimir Putin promised that Russia would build 142 million square meters of housing every year – one square meter per citizen. The construction market was indeed in an upswing in 2007 and it grew again in 2011-15. But not nearly enough: on average, Russia built about half of the amount of living space that Putin promised between 2008 and 2018: 71.3 million square meters. 2019 data will probably bring this number further down.
Foreigners also started to discover Russia in larger numbers, but like in so many other cases, the trajectory was broken by the “new cold war” Putin sought to pursue with Russia’s geopolitical adversaries. In 2008 the World Tourist Organization expected Russia to be in the top 10 tourist destinations of the world in 2020. This did happen: as early as 2014 Russia was in the top 10 and preserved its position even in 2015, but numbers dropped afterwards and despite the temporary boost of the FIFA World Cup in 2018, Russia has been out of the top 10 since.
We are not too far from fulfilling some predictions. In 2008 the then Belarusian deputy prime minister Vladimir Semashko predicted that by 2020, the customs union of Russia, Belarus and Kazakhstan would join the World Trade Organization. This may still happen, but the three founding members of the Eurasian Economic Union, as the union is now called, did not enter hand in hand. Russia joined in 2012, Kazakhstan in 2015 and Belarus is still negotiating. The WTO Secretariat expects the country to join in 2020. This will hardly make what appears to be a very difficult year in Russia-Belarus trade easier.
And there are also some successes. In 2008 the government aimed to increase the number of small and medium enterprises to 6 million. In December 2019 their number was 5.9 million. This of course does not mean that these businesses are very successful. In fact, the last couple of years have seen a quasi-stagnation of small business activity, even as credit became more easily available.
The strategy predicted an increase in the expected lifespan of Russians by 2.5 years from the 2007 basis, which was 67.61 years. This goal was not only fulfilled: it was overshot. Average life expectancy reached 73 years in 2019, according to the Russian Health Ministry, though it is still significantly lower for men. This very likely has to do with a significant reduction in drinking. As it happens, this was another significant benchmark: in 2009 the government aimed to reduce consumption from 18 liters per capita to just 5-9 liters in 2020. A study by the World Health Organization, published last year observed a 43 percent drop between 2003 and 2016, bringing the per-capita average down to 11.7 liters – and it was on a downwards trajectory. A study published in November 2019 by the researchers of the Moscow Pedagogical University predicted that in 2020 the average Russian would consume no more than 2.2 liters of alcohol, most of it in the form of beer. This is a very significant and very positive change.
And even for a humbled forecaster, there is also much to look forward to in the 2020s: among other things, I hope we are all excited for the first thirty- and forty-story buildings that will soon spring up in Chelyabinsk.