Streetwise Professor

November 16, 2008

That Was Fast

Filed under: Economics,Energy,Politics,Russia — The Professor @ 10:47 am

I went to the World Bank website to see if their November report on the Russian economy was up.   It wasn’t, so I took another look at the report issued in June.   It looks prescient in some ways, although I doubt that the WB folks thought that this danger would be realized so soon:

Issue 1: Oil revenues, booming today, could become a drag on economic
performance
.

The strong recovery of oil prices since 2000 increased Russia’s dependence on oil and gas revenue, making it more vulnerable to price declines.

The share of oil revenue in total fiscal revenue increased substantially—from 10 percent of GDP to about 30 percent. Instead of diversifying, Russia has specialized in oil, which now accounts for about 60 percent of exports (figures 2.1 and 2.2). Higher oil revenues create more room for spending, but they also complicate macroeconomic management and foster dependence on a volatile, uncertain source of income. This has not been a problem in the face of high oil prices, but it could become a major vulnerability if oil prices begin a rapid descent.

The report also notes:

External debt stock and external vulnerability remain within a comfortable range, but Russia’s private corporate and banking debt is growing fast (figure 1.13). A rapid buildup of corporate and banking debt partly financed the massive consumption and investment spree of recent years. With general government external debt modest and declining, this banking and corporate debt—public and private—explains almost all the buildup of external debt (figure 1.13, left panel). External private debt almost tripled, from $106 billion at the end of 2005 to $275 billion at the end of 2007. External public debt, which includes the general government and public financial and nonfinancial organizations, has also grown thanks to borrowing in large state companies—but not nearly as fast as private sector debt. Although overall debt appears low compared with the economy’s size and its massive international reserves, it has become a concern at the central bank. That exuberant private borrowing, if continuing at the same pace during a prolonged global credit crunch, could undermine corporate liquidity and repayments, spilling over into the banking system, which faces its own risks.

The report mentions the real estate financing issue too:

Russian banking has weathered global financial turbulence, but credit, liquidity,
and market risks require monitoring.

The credit portfolio may face strains from the rapid credit expansion over the last decade, the entry of new and inexperienced borrowers, and banks’ uncertain ability to manage the risks. The brisk growth in mortgage lending could become a concern. Mortgage loans increased fivefold during 2000-06 and by at least 70 percent in 2007, though the consumer segment remains small (13 percent). The following issues are worth noting.

  • The retail deposit base is concentrated in Sberbank, forcing large and medium-size banks to rely more on international funding.
  • Household deposits represent 30 percent of bank liabilities on average, but they are concentrated in the state-owned banks, which hold more than 40 percent of bank assets (Sberbank, VTB, Gazprombank, Bank of Moscow, and the Russian AgriculturalBank).
  • The concentration of corporate deposits • remains a concern for smaller banks. Withdrawals by a few large customers could reduceliquidity. For some smaller banks, the 20 largest depositors account for more than half of customer funding.
  • Banks relying on external funding risk a   contraction in global credit. Benefiting from abundant global liquidity, banks operating in Russia have borrowed significantly from abroad over the last few years. This may pose refinancing risks for some banks.
  • Banks’ exposure to market risk has grown with deeper capital markets and banks’ greater sophistication. Securities portfolios, about 20 percent of assets at the end of 2007, are dominated by corporate bonds, though equity holdings are also significant for some banks. These securities expose banks to potential equity or bond prices.losses from adverse movements in equity or bond prices. sustained strong earnings, but profits are coming under pressure.

The continuing global credit crunch is straining banks’ funding model. If the global credit crunch is prolonged, the system could face funding problems. With Russia’s thin domestic capital markets and its retail deposits concentrated in the largest state banks, some banks must depend on foreign funding. Sustained, restricted access to foreign borrowing could increase funding costs, slow credit growth, reduce profitability and capital, and expose banks to refinancing difficulties. Rapid credit growth has so far sustained strong earnings, but profits are coming under pressure.

In sum, most of the major vulnerabilities that the World Bank identified are being tested, and far sooner and far more severely than pretty much anybody had anticipated at the time the report was written.

The report also details Russia’s investment-led growth, and notes that this investment was heavily-oriented to the resource extraction sector, and largely ignored manufacturing.   These investments are not looking to good now, with resource prices down hard across the board.   The report further notes that although Russia’s investment rate (investment/GDP) has ticked up in recent years, it is still far below (barely half) the rate in other rapid growth emerging economies (21 percent vs. 38-42 percent.)     The report’s data shows that growth has been heavily driven by non-tradeables, notably construction.   So much for that.

In other words, the WB painted a picture of a nation with its private economy and government finances highly dependent on natural resource prices, largely funded by hot money, and dependent on a fragile banking system.   Oil prices (and the prices of other natural resources) are the lynchpins of such an economic system.   It is pretty clear what the implications of a collapse in these prices are.   And we are seeing them unfold before our very eyes.

The WB mentions the outstanding institutional issues facing the country, but doesn’t place tremendous emphasis on them.   The problem is that the very institutional weakenesses that the Bank acknowledges will exacerbate these problems, and make it very difficult for Russia to surmount them.

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23 Comments »

  1. Meanwhile, the Russians are thinking of bringing back the man who caused all this bedlam as president for life. It’s barbarism, pure and simple.

    Once again, an iron curtain has descended across the continent. Once again, the monstrosity behind it degenerates slowly to utter ruin.

    Comment by La Russophobe — November 16, 2008 @ 12:31 pm

  2. What’s left to say except Russia going into the future would be a better country if Putin and Khordorkovsky traded places. Hold that thought for a minute. Oh, the irony.

    Comment by penny — November 16, 2008 @ 4:31 pm

  3. I would say it boils down to this: Russia believed it could regain “superpower” status as an energy producer and had visions of grandeur based on the chimeric goal of being an energy superpower. However, this was never truly feasible, even when oil prices were increasing. If it were possible to become a superpower state based solely on the sale of natural resources, then Saudi Arabia and Canada should be superpower states today.

    The one Russian who has been critical of the Kremlin’s energy policies is Vladimir Milov. He has been quite thorough in documenting how Russia failed to invest adequately in production and the dangers on believing that the sale of oil and gas alone will guarantee Russia’s prosperity. In March 2006, he wrote a nice piece entitled “How Sustainable is Russia’s Future as an Energy Superpower?” that details nicely why the plans to become an energy superpower were likely to fail. An excerpt from his piece:

    “Not only will the Kremlin plan ultimately fail, but it is also causing harm now. The authorities promote the “energy superpower” idea instead of fixing economic and social problems. Sustainable development and international competitiveness have vanished from the agenda. Instead there is only this phantom idea, which holds out the promise of a footprint in the global geopolitical landscape.

    In discussing the resource curse, people normally mention weak institutions, corruption, and perverse political incentives. But Russia faces a more basic problem—it doesn’t have enough resources. Only a few petrostates have enough resources per capita to create a good life for their people. All have small populations. (Norway, Kuwait, the United Arab Emirates, and Qatar are in this category.) With Russia’s large population the state cannot rely only on resource revenue to promote development. Even if the state were to expropriate all oil profits, it would have only $80 per person per month to redistribute. Moreover the Russian economy is extremely energy-intensive and the country’s large territory imposes significant transportation costs, limiting export capability. So the Kremlin cannot build an economic and social policy on energy alone.”

    Source: http://www.carnegieendowment.org/events/index.cfm?fa=eventDetail&id=860

    Comment by Michel — November 16, 2008 @ 6:30 pm

  4. Thanks. I’ll look up the Milov paper. About a year ago, I did write on some things Milov wrote. You are right, he was pretty prescient, and pretty courageous, though it seems he’s fallen from view recently. I tried to email him a couple of times, but no response. Illarionov was also pretty outspoken on this issue. My colleague at U of H, Michael Economides (a petroleum engineer) has written some pretty critical things about Russia’s management of its petroleum resources.

    The ProfessorComment by The Professor — November 16, 2008 @ 6:49 pm

  5. One of LR readers posted a nice link to an article in The Telegraph. It sums up Russia nicely:

    The inevitable energy rebound will bail out Russia again, but not enough to restore the country to superpower status soon, if ever. “Does Russia really have energy power?” asked Professor Alan Riley, from City University.

    “The giant gas fields are running down. Russia must turn to the High North where reserves are 560 kilometers into the Arctic, 360 meters down, and very expensive to extract. This is at an incompetent Russia with a Soviet-style gas system that has not made the investments needed,” he said.

    Somewhere between yesterday’s inflated talk of Russian riches and today’s talk of Russian bankruptcy lies the banal reality of a mid-ranking nation, run by a dysfunctional elite, with the worst aging crisis in the Western world, that happens to be sitting on a lot of resources.

    Source: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3469090/Russias-banal-reality-lies-in-between-energy-superpower-and-bankrupt-state.html

    Comment by Michel — November 16, 2008 @ 7:37 pm

  6. A few quick comments…

    1. AFAIK, the term “energy superpower” was a Western designation, and was mostly bandied around by Western commentators be it in a derogatory or a laudatory sense. To the extent that the term has filtered through to Russian discussions t was as a question of whether the latest Western label to be attached to it had or did not have any merits.

    2. “The report also details Russia’s investment-led growth, and notes that this investment was heavily-oriented to the resource extraction sector, and largely ignored manufacturing.”

    This is true, but it should be noted that Russia exceeded Soviet levels of resource extraction some years ago, whereas manufacturing is still at around 80% of the late Soviet peak. If you look at the statistics you will see that manufacturing has been booming since around 2006, while investment into it has only gradually been creeping up. This is presumably because of prior overcapacity.

    I do agree that the weakness in manufacturing, especially the collapse of the machine tool building industry (which is even now only at 60% of Soviet levels) due to the wanton destruction of the Soviet industrial ecosystem during the 1990’s, is the single biggest threat to long-term economic vitality.

    3. When forecasting future superpowers, say in 2030, it behooves one to take into account several key long-term trends. In my view, these are:

    1 Resource depletion (oil and gas to peak soon, while nuclear and renewables can’t cover the gap in time)
    2 Climate change
    3 Economic convergence (which I view as mostly dependent on relative human capital)
    4 Technology (in particular nanotechnology, IT, supercomputers, etc)
    5 Manufacturing (in particular having a functioning industrial ecosystem with thriving machine building industry)

    Russia scores very well for the first 3, there are some promising trends in 4, while 5 is dormant.

    For comparison, the US is not going to benefit from 3 (it will lose out relatively), will be hit hard by 1 and somewhat less hard by 2, it has excellent prospects in 4 and 5 is a matter of concern (since so much of its industrial base has been hallowed out).

    China is very well off on 3 and 5, much less so on 4, and will be catastrophically impacted by 1 and 2.

    Of course I know that you don’t share the same assumptions as I do about the huge importance of 1 and 2, while unlike you I don’t think things like “institutions” merit a prominent mention. So of course your conclusions will be different.

    Comment by Da Russophile — November 16, 2008 @ 8:07 pm

  7. Da Russophile,

    What exactly is you “Economic convergence (which I view as mostly dependent on relative human capital).” Sorry, I don’t see how Russia leads the United States or Europe in terms of human capital.

    Michel

    Comment by Michel — November 16, 2008 @ 9:31 pm

  8. It is a pretty basic concept that all other things being equal, economies tend to converge due to diffusion of best practice and relocation of capital to achieve the best rates of return.

    Since Europe and the US are already “leaders”, they will not benefit from convergence. They will suffer in relative terms.

    Russia, eastern Europe and China are in the process of “catch-up” – their human capital is relatively high, and so they find it easy to assimilate productivity improvements and thus converge at a pretty good pace.

    (Latin America and Africa don’t have such good prospects, because although they’re economically behind the developed world, their relative human capital is also very much sub-par – which probably best explains why their GDP growth per capita has been similar to that of industrialized nations in the past decades).

    Comment by Da Russophile — November 16, 2008 @ 10:14 pm

  9. What is exactly the “human capital” that you seem to admire in Russia? True, the education system was decent, but in the last decade or two, corruption has eroded its quality. Too many bright scholars fled academia (or Russia if they could) and many degrees were simply bought instead of earned.

    Comment by Michel — November 16, 2008 @ 11:01 pm

  10. Michel:

    With all due respect, you may not like the Russian politicians, per se, but please understand that Russians, with whom I know and work, are as bright, educated, and well-spoken as any of my friends in Western Europe and America.

    One of the mistakes I think is made by many in the West when analyzing Russia is to vastly underestimate the level of awareness and understanding that the Russian people have when it comes to these very same topics.

    Access to information is completely free. If a Russian wants to understand more about a particular topic s/he simply goes online and finds the same sources of information that anyone anywhere has access to today. It may make some of you feel superior to continue this assumption that media in Russia isn’t free. However, to do so simply confirms your lack of understanding of the situation as it now exists in Russia today.

    So, the human capital here in Russia should be thought of like China or India. It’s smart and hungry.

    Comment by Timothy Post — November 17, 2008 @ 4:28 am

  11. Timothy,

    With due respect, I was not talking about the intelligence of individuals, rather the quality of the EDUCATION SYSTEM. Yes, there are very bright people in Russia, as there are very bright people everywhere on this planet. The important question is the quality of the education that these people can receive. Russia lost an entire generation of academics as bright scholars fled academia to either 1. Emigrate to other countries or 2. Work anywhere so they could actually afford to feed their families.

    Also, the education system is notoriously corrupt. Grades could easily bought and a student with money could graduate without having to learn anything. Then, there is the problem of the education infrastructure: it is hard to learn about modern chemistry if your labs are a few decades out of date. These factors will lead to many graduates simply not having been educated or having been poorly educated.

    Overall, bright people will learn and thrive everywhere, but the education system in Russia is hardly a paragon of excellence to be emulated.

    Michel

    Comment by Michel — November 17, 2008 @ 9:50 am

  12. “If a Russian wants to understand more about a particular topic s/he simply goes online and finds the same sources of information that anyone anywhere has access to today.”

    Timothy, what part of 75% of Russians have no access to the internet, that staggering deficiency by western standards and its ramifications, do you not get?

    Comment by penny — November 17, 2008 @ 10:27 am

  13. Michel:

    You are correct. The education system has been riddled with opportunities for folks to buy grades and diplomas. While still possible the practice of buying grades is slowly dying away.

    In fact, the educational system is one of the areas of reform. Undergraduate programs are being shortened from 5 to 4 years with Western style graduate programs being introduced.

    You are right, the past 18 years have been difficult ones for the Russian educational system. However, there are still hundreds of thousands of kids who receive good educations and who are well prepared to think critical.

    For the most part, it’s pretty easy to spot those kids who bought their diplomas when interviewing for jobs.

    Regardless, I think you would be thoroughly impressed with the caliber of young minds here in Russia. It’s really not that much different than America. Most folks don’t really care that much about intellectual issues but rather are much more interested in popular culture and having fun with their friends. But for those kids who are actively seeking to get a great education the opportunities are available. Like most educational systems worldwide, what one gets is based on what one makes of the opportunity.

    Here in Krasnodar I have been encouraged to see that almost all the schools have been renovated within the past two years. The physical infrastructure has been completely rebuilt. Krasnodar also boasts two great universities, Kuban State and the Kuban Agricultural Institute.

    I will be interested to see when graudates here in Russia are solicited by alumni development offices for contributions. It hasn’t happened yet but I can’t imagine it will be to long in coming.

    Comment by Timothy Post — November 17, 2008 @ 11:57 am

  14. Penny:

    You really want to beat a dead horse. The point you are missing, or continue to ignore, is that the percentage of the population that has an interest in such policy issues whether economic, political, or cultural does have access to the internet. What’s important is not the total internet usage but rather, the usage of the internet by the people who actually are active and interested in public life. Amongst this sub-group there is absolute access to the internet and total awareness of ALL competing viewpoints.

    I would suggest that you spend some time here in Russia and you will quickly discard your position that Russians are suffering from a lack of information. It’s just not the case regardless of how many times you continue to repeat.

    Comment by Timothy Post — November 17, 2008 @ 12:02 pm

  15. Timothy,

    You write: “Regardless, I think you would be thoroughly impressed with the caliber of young minds here in Russia. It’s really not that much different than America.”

    Let me reiterate, I have met many, many, many students and scholars in Russia and the FSU. I have spent as much time as you have in Russia by the way. To summarize once again, yes, I agree that there are many bright minds in Russia and everywhere else. What I am saying is that the education system is mediocre at best.

    To support my argument, I will call upon OECD statistics and the Pisa international rankings of how well 15-year-old students from across the globe do in reading and mathematics. In these rankings, Russia is ranked as below average in both reading AND mathematics. Canada, as a point of comparison, is ranked above average in both categories. The United States, like Russia, is below average in mathematics.

    In other words, though there may be some bright people in Russia, overall when looking at large-scare international comparisons, Russia is doing quite poorly. If you believe that Russia still has an exceptional education system, this is clearly not supported by the evidence and comparative international rankings. Once again, it is the problem with anecdotal evidence: it can produce misleading results.

    Source: http://news.bbc.co.uk/2/hi/uk_news/education/7126388.stm

    Comment by Michel — November 17, 2008 @ 12:42 pm

  16. DR–A couple of comments. Re convergence, there’s been a good deal of empirical research on the subject, and the conclusion is that the rate of convergence is extremely slow. For instance, consider that post-Civil War, the US south and US north have yet to converge completely after 140+ years. Neoclassical growth theory emphasizes convergence via the mechanism of capital accumulation and diminishing returns, and neoclassical growth models predict converge in incomes in decades. Modern growth theory emphasizes knowledge generation, and due to the nature of knowledge (not being subject to diminishing returns, and perhaps subject to increasing returns), convergence can be very slow and may never occur.

    Re institutions, really have to take strong issue with you. Although empirical work documenting the contribution of institutions is inherently difficult, because there is no ready, simple quantitative measure of institutional structure, vast amounts of historical work, including economic history, case studies, and some empirical work have documented the salient role of institutions in promoting wealth and growth.

    The subjects are related, inasmuch as institutional quality affects incentives to invest and innovate, and thus affects growth rates (absolutely and relatively.)

    The ProfessorComment by The Professor — November 17, 2008 @ 12:52 pm

  17. Michel:

    I accept your evidence but I would view the situation slightly differently. Like I pointed-out to Penny regarding internet usage, I would focus more closely of the top 25% of a countries population. I don’t mean to sound elitist but to me the bottom 75% of any country’s population is more interested in the pursuit of comfort and happiness than they are in actively shaping that country’s public life.

    Therefore, while both America and Russia may rank below average OVERALL, I would argue that both countries are probably very competitive were one to look at the rank of the top 25% of all countries’ populations.

    I guess its just a matter of emphasis. I think we are overall in agreement that Russia’s educational system could use a lot of reform and investment but that the raw brainpower is as strong as anywhere.

    Have you ever been down here to Krasnodar? Let me know if you have a trip planned, I’d be glad to show you around. I think you would find the changes happening here to be quite encouraging and interesting.

    Comment by Timothy Post — November 17, 2008 @ 12:54 pm

  18. Timothy,

    I don’t have to go to Krasnodar. I have been to close to a dozen cities in Russia stretching from Moscow to the Far East. Trust me, I won’t see anything in Krasnodar that I haven’t seen elsewhere.

    As for the top 25%, that would only matter if Russian universities were ranked the top in the world. They are not.

    According to the Times Ranking, the top Russian university, Moscow State University, comes in at 183rd for 2008 and is the only university listed in the top 500 (see http://www.timeshighereducation.co.uk/hybrid.asp?typeCode=243&pubCode=1&navcode=137).

    The Wuhan State University (China) ranking is a bit more generous. It ranks Moscow State University at 119th and adds the St. Petersburg State University at 421st. Again, Russia only has 2 universities that make it to the top 500 of this ranking (see: http://rccse.whu.edu.cn/college/sjdxkyjzl.htm).

    I challenge you to find me any internationally recognized (i.e. not Russian) rankings that includes any Russian university in the top 10. So your “top 25%” is not a reliable indicator either as those institutions that should be representative of the best minds of Russia do not rate very highly in international rankings either.

    Michel

    Comment by Michel — November 17, 2008 @ 1:06 pm

  19. @Michel,

    “True, the education system was decent, but in the last decade or two, corruption has eroded its quality.”

    It is true that there are cases of paying more for higher grades (which is hardly limited to Russia – there was an article in the Economist a while back how it is widespread throughout east-central Europe, e.g. Poland). But I am quite familiar with Russian academia so I feel safe in saying that it is the exception rather than the rule. Since of late salaries have been rapidly becoming quite respectable for academia, I’d imagine it is even less of a problem now.

    “Too many bright scholars fled academia (or Russia if they could) and many degrees were simply bought instead of earned.”

    As a matter of fact, again from my observations, having brilliant lecturers is not the most important thing. In the better unis people will want to study and in any case much more information can be assimilated from books than from professors, simply because the latter don’t have as much time and reading is more efficient; in the less cerebral unis, it is important to simply teach students basic concepts and procedures, which don’t require star professors either.

    What you need is that students out of school have a good grasp of basics like literacy and algebra. On which note, an acquaintance of mine who teaches at a (sub-par, but far from the worst) British uni has horror stories – people who believe that a/(b+c) = a/b + a/c, and similar. And he’s supposed to teach them differential equations!

    “To support my argument, I will call upon OECD statistics and the Pisa international rankings of how well 15-year-old students from across the globe do in reading and mathematics. In these rankings, Russia is ranked as below average in both reading AND mathematics. Canada, as a point of comparison, is ranked above average in both categories. The United States, like Russia, is below average in mathematics.”

    1. My main argument is not that Russia is particularly well educated relative to the OECD, but to most other emerging markets like Turkey, Mexico, Brazil, etc, which are similarly trying to catch up to the OECD. And you will see that in the PISA tests Russia (and the rest of east-central Europe) is way ahead of those.

    2. PISA is just one international assessment of several. For whatever reason, it’s performance on PIRLS and TIMMS was substantially above the rich country average. (For comparison, Mexico et al remained low).

    @Professor,

    “A couple of comments. Re convergence, there’s been a good deal of empirical research on the subject, and the conclusion is that the rate of convergence is extremely slow. For instance, consider that post-Civil War, the US south and US north have yet to converge completely after 140+ years.”

    That’s not really surprising, because today, just like 150 years ago, the South human capital, strangled by a Bible belt and anti-intellectual in general, is inferior to that of the north.

    On the other hand there are many examples, e.g. the four East Asian tigers, Ireland, Israel, Spain, that have successfully achieved convergence. In all cases this was accompanied by them reaching and at times exceeding developed country norms of human capital.

    Re-institutions: If they’re so important, why is China (CPI=3.4) growing so much faster than Chile (CPI=6.9)?

    Comment by Da Russophile — November 17, 2008 @ 1:48 pm

  20. Da Russophile,

    I sometimes wonder about you. Do you actually believe what you write?

    You write: “But I am quite familiar with Russian academia so I feel safe in saying that it is the exception rather than the rule.” Well, given my familiarity with the Russian education system, I would say it is the rule rather than the exception. When I have a bit more time, I will dig up a few Russian article on corruption and the education system.

    You write: “As a matter of fact, again from my observations, having brilliant lecturers is not the most important thing. In the better unis people will want to study and in any case much more information can be assimilated from books than from professors, simply because the latter don’t have as much time and reading is more efficient; in the less cerebral unis, it is important to simply teach students basic concepts and procedures, which don’t require star professors either.”

    Well, research indicates are those where the brilliant professors are conducting leading research. This attracts the best graduate students and by integrating undergraduate students into the research environment, you can produce much better graduates at all levels. Invariably, the best professors are those who are excited about their research.

    You write: “My main argument is not that Russia is particularly well educated relative to the OECD, but to most other emerging markets like Turkey, Mexico, Brazil, etc, which are similarly trying to catch up to the OECD.” So you acknowledge then that Russia is pretty mediocre and is doing its best to catch up to the OECD and simply doing its best to stay ahead of other developing countries? I would note that China is ranked above average in both categories. So why is it that China is succeeding where Russia is failing?

    If you don’t like Pisa, then please provide me another internationally recognized ranking that puts Russia in a higher category and I also challenge you to find me some international rankings that would put any Russian university in the top 10 or even the top 25.

    Michel

    Comment by Michel — November 17, 2008 @ 2:08 pm

  21. @Michel

    “I sometimes wonder about you. Do you actually believe what you write? ”

    I sometimes wonder about that as well, but unlike you I have the courtesy to keep it to myself.

    “So you acknowledge then that Russia is pretty mediocre and is doing its best to catch up to the OECD and simply doing its best to stay ahead of other developing countries?”

    Not exactly catch-up. It’s math and science scores, while below that of the OECD average, are comparable to that of the US and higher than Italy’s. And the gap between Russia (and the advanced world’s lower tail in general) and normal developing countries is huge

    “I would note that China is ranked above average in both categories. So why is it that China is succeeding where Russia is failing?”

    China does not participate in the survey – their entry is Hong Kong, which is an atypical Chinese city for obvious reasons. (That said, I would not be surprised if China performed well in PISA if they did participate – they have a high national IQ and like many east Asians, place a lot of emphasis on learning).

    “If you don’t like Pisa, then please provide me another internationally recognized ranking that puts Russia in a higher category ”

    I already did, but if you’re too lazy to search them yourself…

    TIMSS 2003 Math (http://nces.ed.gov/pubs2005/2005005.pdf) –
    Russian Federation 532, International average 495 United States 518(4th graders)
    Russian Federation 508, International average1 466, United States 504 (8th graders)

    TIMSS 2003 Science –
    Russian Federation 526, International average 489, United States2 536 ”
    Russian Federation 514, International average1 473, (United States) 527 ”

    PIRLS 2006 Reading (http://timss.bc.edu/PDF/P06_IR_Ch1.pdf) –

    Russian Federation 565 (first), United Statesh 540 (4th grade)

    “I also challenge you to find me some international rankings that would put any Russian university in the top 10 or even the top 25.”

    International university rankings are, generally speaking, overrated, since they place too much emphasis on publications in US-centric journals and how much money they get, rather than the quality of graduating students. I have a life so I’m not going to try to dig it up, but rest assured I did come across an international study that tested graduating scientists from many unis across the world on their subject matter…the top three were all Japanese, fourth was Moscow State, I believe MIT was 5th or 6th, and most of the Ivies were in the 10’s or 20’s.

    Comment by Da Russophile — November 17, 2008 @ 8:47 pm

  22. Da Russophile,

    I will concede your point: yes the TIMSS does indicate that Russian students are a bit better than average, but clearly not at the top. Russia does better than developing countries, but still lags behind the leading developed countries. It is good, but hardly where a country that aims at becoming an intellectual center should be if it wants to become one of the world’s leading economies.

    As for the ranking of Russian universities, I stand by my assertion that Russian universities are not highly ranked internationally. If you do find the “international study that tested graduating scientists” please let me know. However, I must say that decrying ratings as “overrated” because Russian universities are not highly ranked is a bit disingenuous. It rings of sour grapes ;)

    Michel

    Comment by Michel — November 17, 2008 @ 10:45 pm

  23. SWP:

    On Milov, I’ve translated both parts of the White Paper he co-wrote with Nemtsov:

    http://larussophobe.wordpress.com/polls/

    And I’ve translated several other items by Milov as well:

    http://larussophobe.wordpress.com/2008/05/16/another-original-lr-translation-q-a-with-vladimir-milov-via-essel/

    http://larussophobe.wordpress.com/2008/10/31/another-original-lr-translation-milov-on-the-crisis/

    http://larussophobe.wordpress.com/2008/08/28/another-original-lr-translation-milov-on-the-georgia-crisis/

    I suggest you check them out, my translator Dave Essel has a great interest in him.

    Comment by La Russophobe — November 18, 2008 @ 3:51 pm

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