Sunday, December 21, 2014

WaPo Reports on Vladimir Putin's Economic Miracle in Russia

Dean Baker writes:

chart accompanying a Washington Post article on Russia under Putin tells readers that Russia's per capita GDP rose from $1,771 when Putin took power in 1998, to $14,611 in 2013. This would imply an increase in per capita GDP of 725 percent in 15 years for an annual rate of more than 15 percent. Such rapid growth in income would be unprecedented in world history. If it were true, then Russians would have cause to hold Putin's accomplishments in awe. Of course it isn't (although there was a substantial increase in Russian GDP over this period), so Putin doesn't have quite as much to boast about as the Post's chart implies.
 
Note:
I should have provided a bit more context here as many of the comments point out. There is actually a measure of GDP where the Post's numbers would be correct. It is by taking an exchange rate measure of GDP that converts rubles into dollars and does not control for inflation. This measure is largely meaningless, since most Russians are not buying most of their goods and services in dollars. They are paying in rubles.
The performance by this measure is still impressive. According to the IMF's data, overall real GDP has increased by 105.7 percent between 1998 and 2014, a 4.6 percent annual rate. Much of this was just bounceback from the collapse of the economy following the break-up of the Soviet Union, but there is little doubt that most people in Russia would consider themselves much better off today than when Putin took office.
Anyhow, some alarm bells should have been going off at the Post when they were putting in a chart showing an increase in per capita GDP of more than 700 percent in 16 years. Some folks were clearly asleep on the job.

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