In a calm and satisfying 2019, Rosstat reported that almost 80% of Russian families are having difficulty buying the most necessary things. Half of those surveyed said that they could not afford at least one week of vacation every year. And a third are not able to purchase two pairs of shoes suitable for the season for each family member. After the publication of the data, a scandal erupted, and Rosstat did not conduct more “high-profile” polls.
And last year, a specialist left the service, who claimed that in some regions of Russia, governors draw “dead souls” for themselves, and the data on the number of deaths from coronavirus are greatly underestimated. What other indicators “twist” statistics, why do they do it, and why is it dangerous for the country?
“Dead Souls” of Russia
“In authoritarian societies, there is always a question of sprawl, growth, sovereignty, imperialism – people are needed for this. If you don’t have people, you won’t be an empire. It is impossible to be a superpower with a share of the population [от всего] world in 1.85%, as in Russia. Take China, a power with 15% of the world’s population. But Russia is not, and never will be, ”he said recently in interview Aleksey Raksha, an expert on demography, dismissed from Rosstat.
However, all over the world, local authorities tend to overestimate or inflate the population in order to get more money for infrastructure, social benefits, housing construction and other expenses, he said.
We all try to embellish reality – from individuals who create an image for themselves in social networks, and ending with entire states, says Fyodor Naumov, an economist and managing partner at PFL Advisors.
“Some time ago, there was a popular theory that there are actually far fewer people living in China than they report. It’s right by Sun Tzu [автор трактата «Искусство войны» — примечание редактора]: you have to seem bigger than you are,” says the expert.
But only in Russia, it seems, PR is turning into the basis of statehood, and the scale of falsifications is going through the roof. Some republics attribute to themselves 25-60% of the population, says demographer Aleksey Raksha.
For example, not 525 thousand people live in Ingushetia, but at best 350 thousand. There are 600,000 fewer people living in Dagestan than indicated in all reports. About a quarter of the population does not exist in Kabardino-Balkaria and Karachay-Cherkessia, Kalmykia.
Why is this even possible? In 2017, Rosstat was again reassigned to the Ministry of Economic Development (before that, the service was directly subordinate to the government). As a result, it has become easier and easier to draw economic statistics – for the sake of creating an image of a great power, at least on paper.
Employees who do not agree with this are fired. This is exactly what happened to Alexei Raksha – a professional who had worked for Rosstat for six years “left” of his own free will. One of the reasons for this was his comments on deaths from coronavirus. The demographer, in a conversation with The New York Times, said that Moscow does not report about 70% of coronavirus-related deaths, and the regions about 80%.
A lot of primary data is processed at the regional level, and statistical indicators are also calculated at the level of local departments. The center does not influence them in any way and actually takes on faith everything that the local services report. Already under the previous head of Rosstat, Alexander Surinov, who headed the service until 2018, there was information that local authorities were putting pressure on regional employees.
“According to the metrics of Rosstat, they began to evaluate the implementation of presidential decrees, and hence the work of governors. It is clear that it is easier to ask for corrections in some of them than to achieve actual improvements. And it is not excluded that somewhere they go for it. After all, it depends to a certain extent on the governor how a particular Rosstat employee will live. It is almost impossible to check regional statistics from the center,” says Evgeny Nadorshin, chief economist at PF Capital.
Unreal inflation
In all countries, people doubt the reality of statistical data, and there are both objective and subjective reasons for this. Most of us are seeing price increases for those goods that are most often in front of our eyes – that is, for food. But counting inflation for products alone is wrong, and no one does.
To determine the consumer price index, a basket of goods is used, which, in addition to products, includes many other things – clothing, household appliances, services, jewelry – about 500 items in total. Each group of goods has its own “weight” in the basket. By changing the ratio of weights for various groups of goods and the composition of the basket itself, it is indeed possible to “twist” inflation. After all, some things rise in price more slowly, and some generally become cheaper.
“Inflation is an extremely difficult indicator to calculate. Often people, considering a specific situation with a rise in prices for categories of goods close to them, extrapolate the situation to the entire economy. And they conclude that inflation is considered incorrectly,” says Evgeny Nadorshin.
Talk about a biased calculation of inflation is especially aggravated when the price of various items of food products rises. But often, against the background of rising food prices, prices for household goods fell.
“The inflation indicator is multifaceted, and it includes, among other things, a change in the quality of the product. Twenty years ago, most people walked around with simple Nokia phones, now many people use iPhones. Here’s how to compare them in a basket of goods?” Fedor Naumov asks.
Apparently, in 2022 it will be extremely difficult to “twist up” inflation – almost all goods from the basket on which prices are calculated are going up. So, in March, household appliances increased in price by 21-46%, food by 15-50%, non-food products by 10-19%. And at the same time, Rosstat estimated the overall inflation for the past month at 7.61%, and annual inflation at 16.69%.
At the same time, inflation is one of the most important indicators of the economy, on which others are tied – in particular, starting from it, the number of poor people in the country is considered.
Hunger-level poverty and the secret unemployed
With indicators of the number of people below the poverty line and unemployment, too, not everything is going smoothly. The notorious poverty line was set by Rosstat last year at 11,908 rubles. Only those who receive less than this amount per month are officially recognized as poor.
The border corresponds to the cost of the consumer basket in the fourth quarter of the previous year, taking into account inflation. But even last year, with a moderate level of inflation, it was clear that 12,000 rubles was a life on the verge of starvation or malnutrition, as in Venezuela. And such people, even according to official data, in Russia there are 16 million people, or 11%.
Unemployment also has its own nuances. In Russia, it has been quite low in recent years, which is certainly good. True, according to the international methodology, which is also used by Rosstat, if a person cannot find a place for himself within six months, he ceases to be considered unemployed. In a number of countries, for example, the United States, there are additional parameters that allow a more objective assessment of the situation on the labor market. In particular, this is an indicator of involvement in the labor force; they can also quickly receive information on part-time employment.
In Russia, operational statistics with such parameters is worse. And a certain number of really unemployed people may not be taken into account in the statistics. Understanding this, as well as assessing the scale of the phenomenon, is very difficult. For the purposes of calculating wages, part-time employment is counted up to full-time employment, Yevgeny Nadorshin notes. And factory workers who were transferred to a three-day work week with a halving of wages will look “as usual” in salary statistics – for the purposes of comparability, they consider that they received a full salary in their hands.
As you already understand, this indicator, in turn, affects another – the level of disposable money income of the population. In recent years, amazing metamorphoses have also taken place with him.
paper income
In December 2018, President Vladimir Putin at his annual press conference said that he hoped for an increase in real incomes of the population by the end of the year, even if it would be insignificant – only 0.5%. However, after that, statisticians reported a 0.1% drop in income in 2018. In an authoritarian state, the leader cannot be wrong – and Rosstat urgently had to change the calculation methodology. After that, the decline was replaced by a small increase – plus 0.4% at the end of 2018.
It is possible to say that there are doubts about the objectivity of this or that indicator when the calculation methodology is changed. There is a possibility that when choosing a new methodology, the service pays attention to the final values that are obtained as a result of its use, Nadorshin believes.
“However, it is extremely difficult to verify this by outside experts,” the economist notes. As for real cash income, the new methodology is better, it better takes into account the income of the population, he believes.
By the way, with the main and sacred indicator for the authorities – the gross domestic product, which shows the dynamics of the entire economy, not everything is clear either. GDP is very difficult to calculate. And it is not clear how adequate this calculation is – Rosstat has not yet published its methodology. However, all three corrections of this indicator were made in the direction of its increase, not fall. So don’t be surprised if Rosstat paints a rosy picture even this year.
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In a calm and satisfying 2019, Rosstat reported that almost 80% of Russian families are having difficulty buying the most necessary things. Half of those surveyed said that they could not afford at least one week of vacation every year. And a third are not able to purchase two pairs of shoes suitable for the season for each family member. After the publication of the data, a scandal erupted, and Rosstat did not conduct more “high-profile” polls.
And last year, a specialist left the service, who claimed that in some regions of Russia, governors draw “dead souls” for themselves, and the data on the number of deaths from coronavirus are greatly underestimated. What other indicators “twist” statistics, why do they do it, and why is it dangerous for the country?
“Dead Souls” of Russia
“In authoritarian societies, there is always a question of sprawl, growth, sovereignty, imperialism – people are needed for this. If you don’t have people, you won’t be an empire. It is impossible to be a superpower with a share of the population [от всего] world in 1.85%, as in Russia. Take China, a power with 15% of the world’s population. But Russia is not, and never will be, ”he said recently in interview Aleksey Raksha, an expert on demography, dismissed from Rosstat.
However, all over the world, local authorities tend to overestimate or inflate the population in order to get more money for infrastructure, social benefits, housing construction and other expenses, he said.
We all try to embellish reality – from individuals who create an image for themselves in social networks, and ending with entire states, says Fyodor Naumov, an economist and managing partner at PFL Advisors.
“Some time ago, there was a popular theory that there are actually far fewer people living in China than they report. It’s right by Sun Tzu [автор трактата «Искусство войны» — примечание редактора]: you have to seem bigger than you are,” says the expert.
But only in Russia, it seems, PR is turning into the basis of statehood, and the scale of falsifications is going through the roof. Some republics attribute to themselves 25-60% of the population, says demographer Aleksey Raksha.
For example, not 525 thousand people live in Ingushetia, but at best 350 thousand. There are 600,000 fewer people living in Dagestan than indicated in all reports. About a quarter of the population does not exist in Kabardino-Balkaria and Karachay-Cherkessia, Kalmykia.
Why is this even possible? In 2017, Rosstat was again reassigned to the Ministry of Economic Development (before that, the service was directly subordinate to the government). As a result, it has become easier and easier to draw economic statistics – for the sake of creating an image of a great power, at least on paper.
Employees who do not agree with this are fired. This is exactly what happened to Alexei Raksha – a professional who had worked for Rosstat for six years “left” of his own free will. One of the reasons for this was his comments on deaths from coronavirus. The demographer, in a conversation with The New York Times, said that Moscow does not report about 70% of coronavirus-related deaths, and the regions about 80%.
A lot of primary data is processed at the regional level, and statistical indicators are also calculated at the level of local departments. The center does not influence them in any way and actually takes on faith everything that the local services report. Already under the previous head of Rosstat, Alexander Surinov, who headed the service until 2018, there was information that local authorities were putting pressure on regional employees.
“According to the metrics of Rosstat, they began to evaluate the implementation of presidential decrees, and hence the work of governors. It is clear that it is easier to ask for corrections in some of them than to achieve actual improvements. And it is not excluded that somewhere they go for it. After all, it depends to a certain extent on the governor how a particular Rosstat employee will live. It is almost impossible to check regional statistics from the center,” says Evgeny Nadorshin, chief economist at PF Capital.
Unreal inflation
In all countries, people doubt the reality of statistical data, and there are both objective and subjective reasons for this. Most of us are seeing price increases for those goods that are most often in front of our eyes – that is, for food. But counting inflation for products alone is wrong, and no one does.
To determine the consumer price index, a basket of goods is used, which, in addition to products, includes many other things – clothing, household appliances, services, jewelry – about 500 items in total. Each group of goods has its own “weight” in the basket. By changing the ratio of weights for various groups of goods and the composition of the basket itself, it is indeed possible to “twist” inflation. After all, some things rise in price more slowly, and some generally become cheaper.
“Inflation is an extremely difficult indicator to calculate. Often people, considering a specific situation with a rise in prices for categories of goods close to them, extrapolate the situation to the entire economy. And they conclude that inflation is considered incorrectly,” says Evgeny Nadorshin.
Talk about a biased calculation of inflation is especially aggravated when the price of various items of food products rises. But often, against the background of rising food prices, prices for household goods fell.
“The inflation indicator is multifaceted, and it includes, among other things, a change in the quality of the product. Twenty years ago, most people walked around with simple Nokia phones, now many people use iPhones. Here’s how to compare them in a basket of goods?” Fedor Naumov asks.
Apparently, in 2022 it will be extremely difficult to “twist up” inflation – almost all goods from the basket on which prices are calculated are going up. So, in March, household appliances increased in price by 21-46%, food by 15-50%, non-food products by 10-19%. And at the same time, Rosstat estimated the overall inflation for the past month at 7.61%, and annual inflation at 16.69%.
At the same time, inflation is one of the most important indicators of the economy, on which others are tied – in particular, starting from it, the number of poor people in the country is considered.
Hunger-level poverty and the secret unemployed
With indicators of the number of people below the poverty line and unemployment, too, not everything is going smoothly. The notorious poverty line was set by Rosstat last year at 11,908 rubles. Only those who receive less than this amount per month are officially recognized as poor.
The border corresponds to the cost of the consumer basket in the fourth quarter of the previous year, taking into account inflation. But even last year, with a moderate level of inflation, it was clear that 12,000 rubles was a life on the verge of starvation or malnutrition, as in Venezuela. And such people, even according to official data, in Russia there are 16 million people, or 11%.
Unemployment also has its own nuances. In Russia, it has been quite low in recent years, which is certainly good. True, according to the international methodology, which is also used by Rosstat, if a person cannot find a place for himself within six months, he ceases to be considered unemployed. In a number of countries, for example, the United States, there are additional parameters that allow a more objective assessment of the situation on the labor market. In particular, this is an indicator of involvement in the labor force; they can also quickly receive information on part-time employment.
In Russia, operational statistics with such parameters is worse. And a certain number of really unemployed people may not be taken into account in the statistics. Understanding this, as well as assessing the scale of the phenomenon, is very difficult. For the purposes of calculating wages, part-time employment is counted up to full-time employment, Yevgeny Nadorshin notes. And factory workers who were transferred to a three-day work week with a halving of wages will look “as usual” in salary statistics – for the purposes of comparability, they consider that they received a full salary in their hands.
As you already understand, this indicator, in turn, affects another – the level of disposable money income of the population. In recent years, amazing metamorphoses have also taken place with him.
paper income
In December 2018, President Vladimir Putin at his annual press conference said that he hoped for an increase in real incomes of the population by the end of the year, even if it would be insignificant – only 0.5%. However, after that, statisticians reported a 0.1% drop in income in 2018. In an authoritarian state, the leader cannot be wrong – and Rosstat urgently had to change the calculation methodology. After that, the decline was replaced by a small increase – plus 0.4% at the end of 2018.
It is possible to say that there are doubts about the objectivity of this or that indicator when the calculation methodology is changed. There is a possibility that when choosing a new methodology, the service pays attention to the final values that are obtained as a result of its use, Nadorshin believes.
“However, it is extremely difficult to verify this by outside experts,” the economist notes. As for real cash income, the new methodology is better, it better takes into account the income of the population, he believes.
By the way, with the main and sacred indicator for the authorities – the gross domestic product, which shows the dynamics of the entire economy, not everything is clear either. GDP is very difficult to calculate. And it is not clear how adequate this calculation is – Rosstat has not yet published its methodology. However, all three corrections of this indicator were made in the direction of its increase, not fall. So don’t be surprised if Rosstat paints a rosy picture even this year.
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