Russia and Ukraine facts of the day

by on March 10, 2014 at 2:54 am in Current Affairs, Data Source | Permalink

The World Bank lists Russia at $14,037 per capita income.

That same source lists Ukraine at $3,867.

Russian per capita income is slightly more than 3.6 times higher. I am not suggesting that Crimea will now experience an economic boom, but this differential is worth keeping in mind as the issue unfolds.

Admittedly the Russian incomes are distributed quite inequitably (Gini of 40 compared to 26 for Ukraine), which lowers the attraction of belonging to that country.

Anonymous coward March 10, 2014 at 3:11 am

In the XXI century we might finally be able to characterize income distribution with graphs, not a couple of numbers. Ya think? At the very least, the median PPP income is much more salient for ordinary people considering the issue than per capita (average) income. The median income also has the great virtue of excluding Moscow, which is almost a different country from Russia proper.

Steve Sailer March 10, 2014 at 3:23 am

Judging from Ukraine’s not bad average scores on TIMMS tests of 8th graders (close to California’s) and terrible GDP per capita, it would appear to have a lot of economic upside.

bolko1 March 10, 2014 at 3:24 am

If the World Bank thinks that the Gini for Ukraine is 0.26, then I am thinking that the US is poorer than Russia.

Ivan Gusiev March 10, 2014 at 3:56 am

More numbers (from Wikipedia, my apologies).

Let’s include PPP in this picture:
Russian GDP (PPP) per capita, 2012: $17.5K
Ukrainian GDP (PPP) per capita, 2012: $7.2K
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita

Now let’s add shadow economy:
Russian shadow sector is about 15% of formal economy, giving 17.5 * 1.15 = $20.3K
Ukrainian shadow sector is about 45% of formal economy, giving 7.2 * 1.45 = $10.4K
http://ru.wikipedia.org/wiki/Теневая_экономика_в_России
http://uk.wikipedia.org/wiki/Тіньова_економіка

Throw in the Gini differential, and one could say that quality of life differences in two countries are not that significant (I’d bet that anyone who traveled to both Ukraine and non-Moscow Russia can confirm).
I’m not suggesting that the economies are somehow equally economically developed — corporations are richer and startups are more common in Russia, not to mention the fossil fuel dollars — just that a median Ukrainian lives pretty much in the same conditions as a median Russian.

Richard Besserer March 10, 2014 at 10:24 am

Yes. It would be more helpful to look at median household income, a wage index or something else less influenced by short-term fluctuations in commodity prices.

Cryptael March 10, 2014 at 5:15 am

This is what they invented medians for

Craig March 10, 2014 at 10:03 am

Ukraine suffers from an extreme shortage of oligarchs.

Thor March 10, 2014 at 11:53 am

i) They just ran an inefficient one out of town.

ii) Their immediate neighbour to the East is intent on supplying them with some replacements.

prior_approval March 10, 2014 at 6:01 am

Want to guess which country is one of the world’s leading producers of fossil fuels and raw materials, and which isn’t?

This is the sort of observation that only the truly ignorant would find interesting.

‘Russia’s Top 10 Exports

The following export product groups represent the highest dollar value in Russian global shipments during 2012. Also shown is the percentage share each export category represents in terms of overall exports from Russia.

Mineral fuels including oil: $375,423,947,000 (71.6% of total exports)

Iron and steel: $22,601,664,000 (4.3%)

Fertilizers: $11,176,846,000 (2.1%)

Inorganic chemicals: $7,835,699,000 (1.5%)

Machinery: $7,609,061,000 (1.5%)

Aluminum: $7,281,329,000 (1.4%)

Wood: $6,731,569,000 (1.3%)

Cereals: $6,246,547,000 (1.2%)

Copper: $5,787,339,000 (1.1%)

Organic chemicals: $4,516,890,000 (0.9%)

http://www.worldstopexports.com/russias-top-10-exports/2350

One should note that ‘Fertilizers’ at position 3 is directly connected to position 1, though ‘Organic chemicals’ at position 10 is essentially tightly coupled.

HoB March 10, 2014 at 7:58 am

Neighboring Belarus has no fossil fuels and income per capita almost twice Ukraine’s. Its Gini is the same as Ukraine’s.

prior_approval March 10, 2014 at 8:22 am

And that pretty much demonstrates the going rate of Russian vassalage at this point, doesn’t it?

http://en.wikipedia.org/wiki/Belarus%E2%80%93Russia_relations

And Belarus has also been involved in its share of energy disputes – http://en.wikipedia.org/wiki/2007_Russia%E2%80%93Belarus_energy_dispute

Ukraine is pretty much getting the worst of things, since it does not enjoy Russian support like Belarus, nor does it enjoy any advantages of being a member of the EU. That Russia is rich is not a surprise, and it is not a surprise that Russia uses its wealth to bolster its prestige through such things as the Union State. http://en.wikipedia.org/wiki/Union_State Though the future seems to belong to the Eurasian Union.

Thor March 10, 2014 at 11:54 am

“This is the sort of observation that only the truly ignorant would find interesting.”

Now we know what you think of us!

TMC March 10, 2014 at 12:18 pm

I took it as self-referring, as he was the one who brought it up.

msgkings March 10, 2014 at 12:26 pm

Exactly.

prior_approval March 10, 2014 at 1:01 pm

My, people are so inclusive here. As if the fact that Russia is a resource based economy is simply something unknown to anyone.

No, I only had in mind the person who apparently, having never learned anything about ancient Greece in all his years of academic endeavor, was pleased to become aware of what thalassocracy means. Followed by then, apparently, having no explanation for a striking disparity in income between two former parts of the USSR.

Makes one wonder what other Greek based terms the chairman of the Mercatus Center may have missed out on – plutarchy comes to mind. Though I’m confident if he didn’t understand the term’s intended meaning as a goal, he would not be the Certer’s chairman.

msgkings March 10, 2014 at 12:26 pm

“This is the sort of observation that only the truly ignorant would find interesting”

It says, preceding an observation posted by prior_approval. So, you can do the math.

prior_approval March 10, 2014 at 1:09 pm

Damned by logic again – I’m wounded to the very quick.

And yes, as this web site demonstrates on a daily basis, data is something that the ignorant never need be interested in.

msgkings March 10, 2014 at 1:48 pm

Don’t be mad, we think of you just as highly as we did yesterday.

dearieme March 10, 2014 at 6:42 am

“which lowers the attraction of belonging to that country”: to whom?

Z March 10, 2014 at 8:59 am

Russia has a better claim to the Crimea than America has to California. Economics ain’t got nothin’ to do with it. The Russians have an emotional connection to it and the Crimean residents have an emotional connection to mother Russia.

msgkings March 10, 2014 at 12:28 pm

Doesn’t that formulation mean Mexico has a ‘better claim’ to much of the southwestern US?

Michal March 10, 2014 at 10:55 am

More importantly, these numbers explain why EU is not be very keen about accepting Ukraine as a member. The Polish plumber stereotype is still very alive and EU is still having problems absorbing Balkan countries (Romania and Bulgaria). Ukraine’s situation is much worse than the situation in the “new EU countries”. Europe is not ready for a mass immigration of Ukrainians and dealing with their oligarchs and corrupt officials.

B.B. March 10, 2014 at 11:20 am

Russia is energy rich, and Ukraine is energy poor (so far, at least).

I would be more interested in comparing non-energy GDP per person, Russia vs Ukraine. It makes no difference to the average household in either country that Russia exports vast amounts of energy with the economic rents going into the pockets of a small number of politcally-favored plutocrats/kleptocrats. Also, in heavily agricultural economies, home production is important economic output, even if it is not counted as part of GDP.

David Brown March 10, 2014 at 12:04 pm

Crimea should have no trouble capturing the wealth of the Russian Oligarchs. They’ll go vacation in Yalta.

Sean Kelleher March 10, 2014 at 3:52 pm

This data point supports the view that Russia’s invasion of the Crimea is about status, not strategic interests, because it is not in Moscow’s economic interests to take control of a relatively poor region. The Monkey Cage has a good post on this subject – http://www.washingtonpost.com/blogs/monkey-cage/wp/2014/03/06/how-putins-desire-to-restore-russia-to-great-power-status-matters/. For anyone who is interested, my most recent post on the crisis is here – http://veganworldpolitics.blogspot.com/2014/03/the-crimea-crisis-highlights-worlds.html.

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