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No Amount of ‘Reset’ Can Avert the Looming Russian Disaster

By Nick Eberstadt and Apoorva Shah

July 8, 2009, 1:11 pm

As President Obama invests time this week in the U.S.-Russia relationship, it’s important to remember how Russia continues to disinvest in its own people. Over the course of our recent blog posts, we have seen that the Russian polity is facing vastly more profound problems than its awkward, strained relationship with the United States. Russia’s pronounced and ongoing population decline, precipitated by tragically high mortality levels and historically low fertility levels, portends serious risks to the country’s political economy over the decades ahead.

Consider the impact on the Russian working force—which we conventionally define as adults aged 15 to 64. From 2005 to 2030, this population is expected to decline by 20 percent, or approximately 20 million people. The steepest decline will be among young Russians aged 15 to 29. But as in other mass-education societies, it is this youngest group that would be the most educated: distinguished by the highest levels of school attainment and vocational training, imbued with cutting-edge technical knowledge and scientific know-how. Improving the overall level of educational and technical skills in the labor force is critical to productivity growth for any modern economy—but the task becomes far more daunting when the stream of new workforce entrants dries to a trickle.

figure-13

In the decade leading up to the current global economic crisis, Russia’s economy boomed—but that upsurge was largely based upon windfall gains from natural resources. By contrast, the human-resource-driven sectors of the Russian economy remained surprisingly stagnant and underdeveloped. The discrepancy can be seen in the next chart, which places Russia’s export performance in international perspective. Between 1999 and 2007, revenues from extractive exports, which are comprised mostly of oil and gas, skyrocketed (thanks to rising international energy prices). Not so non-extractive exports: stripped of its natural resource component, Russia’s remaining export totals were barely higher than Turkey’s, a country half Russia’s demographic size. They were no higher than Ireland’s—even though Russia’s population is over 30 times larger. The human engine ultimately undergirding the Russian economy, in short, is not exactly firing on all cylinders.

exportsfigure

While Russian natural resources such as oil and gas bring in copious albeit inconsistent flows of cash, the country’s human resource crisis is slated to be constant and severe. Not only will the Russia of 2030 have a shrunken population, it will have a “grayed” population. In projections from the United Nations, the U.S. Census Bureau, and Russia’s statistical agency Goskomstat, the only age groups that will grow in size are Russians aged 60 and older.

figure-14

President Obama may think he can quickly “reset” the faltering U.S.-Russia relationship, but there is no “reset” button for the demographic woes that afflict Russia today. Demographic realities are unforgiving—and even under the best of circumstances, they change only slowly and gradually. For the next generation, Russia’s prospects—social, economic, and geopolitical—will be compromised by the tragic conditions we have described in these past five posts.  Much as we may wish it were otherwise, a rapid turnaround in Russia’s dismal demographics does not look to be in the cards any time soon.

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Russia Is Disinvesting in Its Human Resources

By Nick Eberstadt and Apoorva Shah

June 25, 2009, 5:33 am

By now we have seen just how bad the Russian health situation looks—prolonged reversals in life expectancy, aberrant and erratic mortality rates, and scant signs of recovery anytime soon. This must mean that Russians spend next to nothing on healthcare, right? Maybe not…

figure-93

In fact, Russian health expenditures correspond closely with levels that would be expected for any OECD or European country at a similar per-capita income level. It really isn’t about the money, then. What we see is that with absolutely normal investments in health, Russia has achieved absolutely abnormal results.

In practical terms, what does this mean? To begin, it means that adult health in Russia—as reflected through the mirror of death rates for people of working ages—was better four decades ago than it has been during this decade. The next figure shows the ratio of death rates for Russian males and females ages 20 to 65 in 2005 versus death rates in 1965. At some ages, the death rates of males in 2005 were more than twice as high as those of males in 1965. Perhaps no less striking, death rates for Russian women were fully 50 percent higher than four decades earlier at some ages.

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Furthermore, Russia’s awful record of health performance over the past two generations means there is by now significant “negative health momentum” in the Russian system. We can see this when we compare male death rates for three birth cohorts in Russia and Japan. Japan has achieved an exceptionally good record for health progress over the postwar period. In Japan, as expected, subsequent generations face better changes of survival than former generations. But of course, the whole point of this blog series is to show that Russia isn’t normal, and as expected, the graph doesn’t disappoint. In Russia, for almost all ages, men born in 1920 had better survival odds than men born in 1940, who had better survival odds than men born in 1970.

figure-122

Per capita income in Russia has increased significantly over the last decade while health, as measured by life expectancy and mortality rates, has stagnated and by some measures even regressed. Could we say that Russia is “disinvesting” in its human resources? In our next and final post of this series, we will talk about the Russian human disaster and what all of these horrendous health trends, and grim demographic trends, portend for the Russian political economy over the next two decades. It doesn’t look too good.

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Russia: Aspiring to Third World Standards

By Nick Eberstadt and Apoorva Shah

June 12, 2009, 8:26 am

In the last post, we showed how aberrant Russian mortality trends have been over the last decade and a half, resulting in almost 6.6 million “excess deaths” against the hardly exacting benchmark of Soviet-era survival schedules. This time, we’ll show you that this country is really an outlier today in global health.

First off: heart disease. In 2005, Russian cardiovascular disease (CVD) levels were almost four times as high as those in Western Europe. While the rest of the former Communist bloc slowly began to converge with the “old EU,” Russia decided to follow the Sinatra Doctrine (“I did it my way”). Normally, CVD is a “disease of affluence.” That is, as countries become richer, their CVD rates go up, but then with continued increases in income and corresponding investments in healthcare and prevention, these rates begin to decrease once again.

And then there is Russia—the country is literally in a league of its own. See the figure below—Russia’s CVD levels are twice as high as would be predicted by its income level.
russiademographics
But chronic disease is just the beginning. Let’s consider “external causes” of death such as injury or poisoning. In 2006, Russian death rates from external causes were almost three times higher than those states of the former Soviet bloc that joined the European Union in 2002. How does that compare with the world? Well, in 2002, only six countries had death rates from external causes higher than 200 deaths per 100,000 people. Guess which was one of them? And just look in the next graph at the company it keeps. By these metrics, Russia’s health situation isn’t third world—it’s fourth world.

russiademographics2

Next time, we will take a look back at the last four decades to see how Russian health standards have regressed—and how the country’s domestic health investments do little to explain this phenomenon.

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Categories:  Europe and Russia, Health Policy, Society and Culture   |   Tags:

Russia: The Death State

By Nick Eberstadt and Apoorva Shah

June 4, 2009, 7:24 am

In our last post, we discussed the impact of decreasing fertility trends and increasing mortality trends on the Russian Federation. In this update, we will focus a little closer on the scourge of “excess” mortality—reflected in the country’s high and erratic death rates—that has plagued Russia since the early 1990s.

Over the 15 years following the end of the Communist era (1992-2006), Russia suffered approximately 6.6 million more deaths than would have occurred if its actual mortality schedules were sustained at the same levels as the benchmark mortality schedules of 1986–1987, the “high water mark” for health standards in Soviet Russia that were witnessed during Mikhail Gorbachev’s short-lived anti-alcohol campaign. By this metric, post-Soviet Russia suffered the equivalent in premature mortality of over three times the casualties it sustained in World War I.

But we are being generous. Let’s say instead we compare Russia’s post-Soviet mortality schedules to France’s mortality schedules from 1986–1987: Russia’s excess deaths would be around 18 million, the majority of whom were males. By this metric, Russia would have actually sustained roughly the same level of losses from premature mortality in the post-Soviet era as the territory endured during the catastrophic and tumultuous years of the Second World War!

How do we explain these stunning numbers? Simply put, health standards have retrogressed over the last two decades. The death rates of EU members since 2004 (remember: with the exception of a few small countries, these are the countries of the former Soviet bloc) have slowly but steadily declined since 1980. By contrast, Russia’s death rates have followed an erratic upward path. By 2006, death rates from all causes in Russia were more than twice as high as those of EU members from Western Europe.

But this is just the beginning of the story. In our next post, we will zoom in even further on these death rates and look at the impact of specific causes of death—infectious and parasitic diseases; cardiovascular disease; and death rates from injury and external causes—the better to understand why Russia has followed such an unprecedented, and tragic, trajectory.

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Categories:  Europe and Russia, Health Policy   |   Tags:

Decline in Births, Uptick in Deaths:
Russia’s Demographic Disaster

By Nick Eberstadt and Apoorva Shah

May 26, 2009, 5:17 am

In this series of posts, Nick Eberstadt and Apoorva Shah describe the demographic disaster that has afflicted Russia since the dissolution of the Soviet Union. What’s already clear is the scale of the human tragedy now unfolding due to retrogressing health standards and the attendant population decline. Yet to be seen are the implications of this crisis on Russia’s political economy and on its standing as a global power.

The story of the latest bout of Russian population decline is shocking not only because of its magnitude and severity but also because it has occurred during a time of relative peace and robust economic growth. In the latest AEI Russian Outlook, we outline the scope of this demographic tragedy and try to understand its roots. In figure 1, you can see that the population implosion in Russia since the fall of Communism is based not only on a steep decline in births but also an uptick in deaths.

Russian Demographics 1

While Russia had about 36 million births and 26 million deaths from 1976 to 1991, there were about 22 million births and 35 million deaths in the following 16 years, from 1992 to 2007.

Figure 2 shows that declining fertility rates are not what make the Russian story so tragically special. In fact, total fertility rates are similar to those of other affluent European countries such as Spain, Italy, and Germany. In the next post, we will describe some of the mortality trends that help to elucidate the Russian demographic crisis.

Russian Demographics 2

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