Da Russophile’s Predictions For 2013

I just remembered I’d made some in 2012. It’s time to see how they went, plus make predictions for the coming year.

Of course I failed to predict the biggest thing of them all: The hacking that made me throw in the towel on Sublime Oblivion (remember that?), but with the silver lining that I could now split my blog between my interest in Russia and my interest in many other things. After all tying my criticism of the Western media on Russia with topics like climate change and futurism and HBD was never a very good fit. Overall I am very satisfied with the new arrangement.

Predictions For 2013

(1) Russia will see slight positive natural population growth (about 50,000) as well as significant overall population growth (about 400,000). Do bear in mind that this prediction was first made back in 2008 when a Kremlinologist who did the same would have been forced into a mental asylum.

(2) The life expectancy will reach 71.5 years, the total fertility rate will rise to 1.8. The birth rate will reach a local maximum at about 13.3-13.5 (it will then remain steady for a couple of years, and then begin to slowly decline) while the death rate will go down to about 13.0-13.2). Net immigration should remain at about 300,000.

(3) Putin will not be overthrown in a glorious democratic revolution. In fact, things will remain depressingly stable on the political front. As they should!

(4) Currently Russia is one of Europe’s most corrupt countries. While it’s certainly not at the level of Zimbabwe, as claimed in the Corruption Perceptions Index, it’s not like having the Philippines, Romania, or Greece for neighbors on an objective assessment is anything to write home about. I believe that Russia missed a great opportunity to undermine the rotten culture of official impunity that exists there by refraining from prosecuting former Moscow Mayor Luzhkov with his Montenegrin villa, billionaire wife, and his VP Mayor Resin who wore a $500,000 watch following his dismissal in 2010. Today a similar opportunity presents itself with blatant evidence of large-scale corruption on the part of former Defense Minister Anatoly Serdyukov and his female hangers-on (see the comments threads here, here at the Kremlin Stooge for details). There are conflicting signals as to whether charges will extend to the very top, i.e. Serdyukov himself. Having incorrectly anticipated a Luzhkov prosecution, I am now once bitten, twice shy. So I’ll take the lame way out and call it a 50/50.

(5) Needless to say, the economy remains as uncertain as ever, and contingent upon what happens in the EU and the world. In the PIGS the economic contraction is finally starting to slow down, but Greece is something of a disaster zone, and Spain is raiding its pension fund to keep afloat. If this becomes unsustainable this year then the EU member states will have to make some fundamental choices: Fiscal union? Or its division into a “Hanseatic” core and Mediterranean periphery? Which of these three things will happen I find impossible to even begin to foretell… As applied to Russia, under the first two scenarios, it will continue plodding along at a stolid but unremarkable pace of 3-4% or so GDP growth; if things come to a head (as they eventually must) and Germany decides to toss the Latins overboard, then the divorce I assume is going to be very, very messy, and we can expect Russia’s economy to fall into recession.

(6) No special insights on foreign policy. Ukraine may join the Customs Union; however, I suspect that’s more likely to happen in 2014 or 2015, as Yanukovych faces re-election and has to make a choice between continued prevarication between it and the EU, and encouraging his Russophone base. The creeping influence of the Eurasian Union will likely keep US-Russian relations cold; whatever the current disagreement that’s talked about (Magnitsky Act; Dima Yakovlev Law; Syria; Libya…) I lean to the “Stratfor”-like position that at heart the US just does not want what it sees as a “re-Sovietization” of the region – which the Eurasian Union is, in geopolitical terms, if under conditions much softer than was previously the case – and will thus be driven, almost by force of instinct, to oppose this trend.

How did I do for 2012?

Here is the link again. In short, this wasn’t the best year for my predictions.

1. “So that’s my prediction for March: Putin wins in the first round with 60%, followed by perennially second-place Zyuganov at 15%-20%, Zhirinovsky with 10%, and Sergey Mironov, Mikhail Prokhorov and Grigory Yavlinsky with a combined 10% or so.I later ended up refining this, and running a contest. My predictions for the five candidates were off by an aggregate error of 14%. The heroic winner was Andras Toth-Czifra (who has yet to get his T-Shirt – my profound apologies dude, it will be done…) Half a point.

2. “I will also go ahead and say that I do not expect the Meetings For Fair Elections to make headway.” Correct, although this was self-evident to anyone not afflicted with Putin Derangement Syndrome (which admittedly doesn’t include 90% of Western Russia journalists). Full point.

3. Here I made general points that I still think fully apply. That said, my own specific prediction turned out to be false. “But specifically for 2012, I expect Greece to drop out of the Eurozone (either voluntarily, or kicked out if it starts printing Euros independently, as the former Soviet republics did with rubles as Moscow’s central control dissipated).” Wrong! I am perhaps foolhardy to do so, but I repeat this prediction for this year. I really don’t know why the Greeks masochistically agree to keep on paying tribute to French and German banks when they know full well they have no hope of ever significantly bringing down their debt-to-GDP ratio without major concessions on the parts of their creditors. Zero points.

4. Last year I made no major predictions about the Russian economy; basically, unexciting but stable if things stay normal – a downswing if the EU goes down, albeit not on as big a scale as in 2008-2009. I was basically correct. One point.

5. “I expect 2012 will be the year in which Ukraine joins the Eurasian common economic space.” Nope. To activate their Russophone base, they decided to go with the language law. Zero points.

6. “Russia’s demography. I expect births to remain steady or fall slightly… Deaths will continue to fall quite rapidly, as excise taxes on vodka – the main contributor to Russia’s high mortality rates – are slated to rise sharply after the Presidential elections.” Too pessimistic on births, albeit understandably so because Russia’s cohort of women in their child-bearing age has now begun to decline rapidly (the echo effect). Although ironically enough however I am one of the most optimistic serious Russia demographers. In reality, as of the first 10 months of 2012, births have soared by a further 6.5% (which translates to a c.8% increase in the TFR, bringing it up from 1.61 in 2011 to about 1.74 this year – that’s about the level of Canada and the Netherlands – while deaths have fallen by 1.5%, implying a rise in life expectancy from 70.3 years in 2011 to about 71 years in 2012 (which is a record). Most remarkably the rate of natural population growth is now basically break-even, with birth rates and death rates both at about 13.3/1000; the so-called “Russian cross” has become a rhombus. Still, considering that my predictions were basically more optimistic than anyone else’s (even Mark Adomanis’), I still feel justified in calling this n my favor. One point.

So, that’s 3.5/6 for the Russia predictions. I will be very brief on the non-Russia related ones, as this is a Russia blog.

7. Wrong, Romney did not win LOL. Although later I did improve greatly, coming 12th out of 66 in a competition to predict the results of the US popular vote. I now owe a few bottles of whiskey to various people.

8. US did not attack Iran, but I gave it a 50% chance anyway. So, half point?

9. “But I will more or less confidently predict that global oil production in 2012 will be a definite decrease on this year.” Too early to tell.

10. “China will not see a hard landing.” Correct.

11. “Record low sea ice extent and volume. And perhaps 100 vessels will sail the Northern Sea Route this year.More like 46 vessels, and completely correct on extreme new sea ice lows.

12. “Tunisia is the only country of the “Arab Spring” that I expect to form a more or less moderate and secular government.” I think that’s basically correct.

13. Protests will not lead to any major changes outside the Arab world – yes.

14. “The world will, of course, end on December 21, 2012.” Correct, we’re now living in a simulation, the real world having ended as I predicted.


  1. Dear Anatoly,

    I think you basically got the Russian Presidential election right and more right than you give yourself credit for. Putin did win with around 60% of the vote and Zyuganov did come second with 17% of the vote – exactly within your predicted range. I would give yourself a full point for that one. You also got the Russian economy right and you correctly predicted the decline in the protest movement and the demographic uptick. Those are the big ones and you got them all right. I think 3.5/6 is much too modest a score. Think about it: you have been more consistently right about Russia than 99% of analysts I know (including Russian ones).

    Just a few further points:

    1. I think you also got the oil price situation right. I appreciate that you didn’t make a specific prediction but it was clear that you did not expect the collapse in oil prices that most analysts were predicting and sure enough it didn’t happen.

    2. The reason the Russian economy is “only” growing at 3.5-4% is ultimately the world economic crisis. Like you the Russian government and Russian companies also expect a recession in the event of a deepening of the crisis or a break up of the eurozone. The result is that both the Russian government and Russian companies are putting off investment decisions and husbanding resources to prepare for the recession if and when it comes. Some of the money Russian companies are husbanding is being parked offshore and this is one of the factors in the capital outflow that has been so much talked about. Whilst the uncertainty in the eurozone persists it is very difficult to plan ahead and this is forcing the Russian government and Russian companies to be extremely conservative and risk averse in their investment and spending strategies and inevitably this is having an effect on growth. This must be extremely frustrating to economic decision makers in Russia given that Russia’s economic fundamentals taken by themselves would allow for a much more ambitions investment and spending strategy but given the extent of Russia’s interdependence with the eurozone it is difficult to see what else they can do. One day possibly trade with China and Asia may substitute for trade with Europe but we are very far from that position now and in the meantime the uncertainties about the oil price, which are themselves in part a consequencet of the eurozone crisis, are complicating the negotiation of oil and gas delivery contracts with China. I would not be surprised if there are not some people in Moscow who would actually welcome a eurozone crisis as a way of ending the uncertainty and restoring clarity. Having said all this, in a global context and given the effect of the crisis a growth rate of 3.5-4% is by no means bad.

    3. There is a very simple reason why people in Greece are prepared to put up with so much punishment in order to stick with the euro. They are terrified (that is not too strong a word) of seeing their wages and pensions and savings converted from euros into worthless drachmas, which would effectively mean that they would disappear. No mainstream politician, not even Syriza, are prepared to admit publicly that retaining the euro may be impossible since they know that if they do so they will be committing electoral suicide. The constant cycle of Greek politics since the start of the crisis in 2008 is that all politicians (except the Communists) insist that they will keep Greece in the eurozone but say when they are in opposition that the terms of the bailouts are too harsh and that if elected they will renegotiate them. When they enter government and are told by the European authorities that the terms of the bailouts are non negotiable they invariably back down and after a while they agree to even more of the austerity that when in opposition they opposed. In the meantime no one plans or prepares for the possibility that Greece may leave the eurozone since to be seen to do so is the political equivalent of signing one’s own death warrant.

    We are at the moment in a quiet period in Greece. The right of centre government that was elected in Greece in the summer promised during the election that it would renegotiate the bailout whose terms it said were too harsh. Within days of getting elected it backed down and has now accepted a dose of further austerity. In return it has received additional funding that has enabled it to maintain payments of wages and pensions. This offers a brief respite (one of several there have been during this crisis) but in the meantime the recession deepens, the money will in time run out and in a few months we will have to have a request for another bailout. I don’t know how long this cycle will go on for but I continue to think that a Greek exit is eventually inevitable and that it will happen when the Greek government in desperation finds itself obliged to print money (which it will initially try to pass off as euros) to pay essential running costs and the Germans and the European authorities find out about it.

    4. For the rest I simply do not know how the larger eurozone crisis will pan out. If Greece does leave the eurozone then despite its small size I would have thought that there would still be a serious risk of a chain reaction. It is difficult to see how the austerity that is being imposed on Spain is going to solve the underlying problems in that country whilst what is not understood about Italy is that the reason its economy has been stagnating for so long is that even under Berlusconi it did try to observe the disciplines of the eurozone by running a primary budget surplus, which stifled economic growth. The further austerity that has been imposed on Italy is only making the underlying problems worse. Further afield the situation in France is also beginning to look shaky. Whilst the pace of economic contraction has slowed down it is difficult to be confident about any return to growth any time soon and one wonders how sustainable this situation is. At the same my strong impression is that popular opinion in northern Europe is hardening against further fiscal transfers and a genuine fiscal union seems politically out of the question. In the absence of this we have an effective policy paralysis with no alternative to the austerity that is being imposed except for the monetary initiatives taken this year by the European Central Bank, which whilst they have kept the show to some extent on the road have only done so by tanking the European Central Bank up with what almost certainly promises to be a mountain of bad debt. Economically it is difficult to see this situation going on indefinitely but the political will behind this project is enormous if only because the whole existence of the EU is now so bound up with it.

    5. For the rest, I agree with you about the missed opportunity offered by Luzhkov’s sacking, the mixed signals about the Serdyukov affair (we have discussed it), the problem of corruption in Russia generally and Ukrainian membership of the Customs Union (though it may not be up to the Ukrainian government to decide when it joins given the deteriorating financial position there). I wouldn’t beat yourself up too much about Romney’s failure to win the election. Contrary to what some press commentary is suggesting it was a very tight race and a very close call. At this time last year I too thought Romney would win. In my opinion the reason he didn’t win was because pressure from within the Republican party forced him into more rigid positions than he wanted to take. Had he been able to run a more flexible and honest campaign he would have won.

    • Actually, the conventional press narrative throughout the campaign was that it was a very tight race, when in fact fundamentals predicted a comfortable Obama win and he never trailed in aggregated state polls. Obama’s final margin in the popular vote of near four percent and his 332 electoral votes are not “tight” outcomes in U.S. presidential elections.

      So, I would argue that elections in the U.S. two-party system are comparatively “tight,” for obvious structural reasons, but that this one was quite decisive by the historical standards of that system. Indeed, Obama became the first U.S. President since Eisenhower to win at least 51% of the popular vote twice.

      Ironically, I find much of the “America-watching” here to be the mirror-image of the Western media’s typically sensationalist treatment of Russia: paint an unflattering picture of a country from half-truths and imagination and then mold (and twist, and contort) events to fit that constructed image.

      The fact is, the majority of Americans are not neoconservative plutocrats who view Russia as America’s top geopolitical foe and want to encircle it with color revolutionaries and anti-ballistic missile systems. As such, they can be expected not to vote that way. Indeed, American attitudes toward Russia remain quite favorable [ http://www.gallup.com/poll/1642/russia.aspx ].

      One way to improve the record of predictions on this blog might therefore be to adopt a more realist, nuanced view of America and the West — one more similar to the author’s approach to Russia. Of course, such a view would also apply to the Western media itself, which is far more often motivated by sensationalism than any enmity with Russia. As anyone who is familiar with the Western media knows well, this sensationalism is not confined to the political press.

      • I’m afraid you’re just making up my motives for predicting a Romney win. Here are some quotes on the matter from October 2011:

        I have a fair record: Obama to become President? Check. Republicans to win 2010 mid-terms? Check. The emergence of “a new party, a new politics”, with “the feds [facing] challenges from the far-left and the far-right”? Check (Tea Party, Occupy Wall Street).

        In that post I gave it as a balance of probabilities: To be fair, the title is a bit of a misnomer. I’d actually put his odds at 35% (Republicans – 65%).

        I try to assess these things objectively, my predictions of a Romney win had zilch to do with Russia because I am well aware that 99% of Americans do not give a damn about Russia and why should they: By the metrics I used to predict McCain’s defeat in 2008, Obama looks like he’s in deep trouble.

        Furthermore: For what it’s worth, the InTrade prediction market is coming to the same conclusion. The latest figures created by gamblers who put their money where their mouths are give Obama a 48% chance, but as you can see since the market became high-volume in around April this year he has been trending down.

        I said all this as a moderate Obama supporter, and as someone who adjusted his assessment as the elections came nearer, about a month prior to it I readjusted it to a 303 Obama victory in the EC (actually – 332) and a 50.39%-to-48.21% victory in the popular vote (actually – 51.0%-47.2%),

        • Oh, yes, I read the post you link to, and in fact it was one of those I based my assessment on.

          “There really isn’t much to explain, is there? The economy sucks and is almost guaranteed to get better than worse. Output remains below peak 2007 levels. The deficit remains stubbornly high and the budget crisis will rear its head again in January 2012. Lord knows what it will become if there is another recession on the scale of the last one. Unemployment remains stuck at over 9%. Obama’s net approval rating is -12%. By the metrics I used to predict McCain’s defeat in 2008, Obama looks like he’s in deep trouble.”

          To be fair, you made these comments in 2011 and you were hardly alone in your doom-saying (more of that media sensationalism I was referring to — it affects all nationalities!). It’s amusing, really, as your commentary tends to reflect the worst analysis of both the American left and right. You’re extremely bipartisan in that you draw equally on the simplistic pessimism of both liberals and conservatives. 😉

          As for specifics, the truth of course is that the U.S. economy doesn’t suck compared to the rest of the developed world coming out of the crisis. While the recovery has been predictably sluggish in the aftermath of a financial crisis, the U.S. with all of its dysfunctional politics and smothering debt has fared remarkably better than Japan and most of Europe. I’m not sure whether your really meant the economy was “almost guaranteed to get better than worse” — it certainly has, but that would have been an odd reason to bet against Obama, to say the least. I imagine you intended to say that the economy was almost guaranteed to get worse — thus bad news for Obama. In any case, this analysis was clearly wrong.

          I’m not sure what you meant by the budget crisis rearing its head in January 2012. Whatever, it didn’t. I’m not sure why you would have imagined that unemployment would remain over 9%. It didn’t. And of course, your incorrect analysis of the economy led you to make a similar error on the prospects for Obama’s approval rating. What might have inspired you to compare any of this to the dynamics of the 2008 election are beyond me.

          In any case, this gloomy view of America’s future prospects drives much of the commentary on your blog (Occupy Wall Street…LOL!). Perhaps you simply don’t notice, much as Western journalists likely don’t notice their assumed narrative about Russia.

          The truth is, the U.S. has plenty of problems and challenges, but this is nothing particularly new…and nothing particularly limited to the U.S. The much-discussed budget deficits, driven in large part by the Great Recession, are four or five percent of GDP over the medium term. With its very low tax rates and very high health care costs, the solution to closing this gap is fairly straightforward — doing so will of course entail a great deal of sound and fury in the political arena, but everyone already knows the broad outlines of what will emerge. (And of course, you were wrong that taxes wouldn’t be raised!) In the meantime, the U.S. will continue to sell bonds to the rest of the world at negative real interest rates.

          The ironic thing is that we probably share many opinions on the challenges the U.S. faces — income inequality, education, infrastructure, public health, etc. The difference is that I expect the country to continue addressing these problems and meeting these challenges in the usual imperfect way, while you apparently expect the country to collapse…at least based on some of your posts. This is where I feel your bias is at work, exaggerating those challenges and disregarding the country’s ability to meet them.

          And, whatever — I’m still reading. 😉

          • Dear Momus,

            Let me tell you why this time last year I thought Romney would win.

            Briefly, the US is as you yourself say a deeply divided society. There is no big Obama coaliition as there was once a Roosevelt coalition or a Nixon/Reagan coalition. Despite Obama’s charisma in the late summer of 2008 before the crash of Lehman Brothers McCain was starting to draw ahead. Notwithstanding the economic crisis following the crash of Lehman Brothers Obama’s victory in 2008 was hardly overwhelming.

            In the light of this it was entirely logical to think that with economic conditions still difficult there would be a swing back to the Republicans and that duly happened in the mid term elections in 2010. Giiven that this was why should one also not think that the prospects of Obama’s re election looked dim?

            It seems to me that the points you are making about Obama’s 4% lead and his lead in the swing state and the rest are very much arguments from hindsight. I still get no sense of any vast enthusiasm for Obama despite his victory. Frankly I still believe that if Obama had been up against a more effective Republican candidate with a broader and more inclusive agenda he would have been in serious trouble and would probably have lost. As it is (and I am not the only person looking at this election from Europe to think this) what was extraordinary about this election was that Romney the multi millionaire plutocrat and tax avoider with his Ayn Rand economic policies and reactionary social agenda (neither of which one senses he truly believed in), his declared willingness to write 47% of the US population off and his complete lack of charisma nonetheless came as close to winning as he did

            For the rest I am afraid I have to disagree with your view that what gets written about Russia in the western media is simply or mostly media sensationalism. The Economist whose latest anti Russian demarche Anatoly discusses in his previous post is not normally thought of as a sensationalist news magazine. Nor are newspapers like the New York Times, the Washington Post, the Financial Times, the London Times and the Guardian. Nor is the BBC. All of them when it comes to Russia pursue the identical line as in large measure do western governments. The Magnitsky law, whatever else it is, is not the product of media sensationalism. The regular comments of the likes of John McCain and his like about Russia are also not the products of media sensationalism and nor by way of example was Hillary Clinton’s latest lurid characterisation of the proposed Eurasian Union as an exercise in “reSovietisation”.

            You complain about the way the US’s prospects are discussed on this blog in apocalyptic terms and you imply that there is a lack of balance towards and a bias against the US. I have to say that I disagree with you completely on both points. However as I see this blog its purpose is not to discuss or comment on the US, which it does only incidentally, but to refute the apocalyptic way Russia’s prospects get written about and to seek a measure of balance (and indeed reality) in the way Russia is discussed. On any objective assessment surely you will agree that it is Russia not the US that has to suffer from overwhelmingly unfair apocalyptic coverage about its prospects and a total lack of balance in the coverage it gets? Given that this is so, it does seem to me that complaining about bias against the US is not only wrong but frankly beside the point.

            • “Given that this is so, it does seem to me that complaining about bias against the US is not only wrong but frankly beside the point.”

              I don’t think I was complaining (it’s AK’s blog). As I said, I just think it’s ironic that such bias is on clear display in a blog intended to counter bias.

              (And yes, I’m aware that some punditry has gone from “Obama is almost guaranteed to lose” to “Wow, look how close this loser Romney came to winning!” I am, it is safe to say, appropriately amused and entertained.)

              • Dear Momus,

                “I don’t think I was complaining…..I just think it’s ironic that such bias is on clear display in a blog intended to counter bias”.

                Do you not see the obvious contradiction in this paragraph? How does this paragraph respond to the point I made?

                For the rest, I am glad you are amused and entertained by my frank and honest explanation of why I thought a year ago that Romney might win. Personally I am simply relieved that he lost.

              • Alexander, I’m not sure why I can’t find a reply button on your post. Maybe there is a threading limit.

                In any case, I don’t think there’s any contradiction in the paragraph you quote. I can point out irony without complaining. Likewise, I believe I made clear what amused and entertained me, and that it was not your honest effort to explain your predictive error.

                AK: “Maybe there is a threading limit.” That is correct. Make it any deeper, and you’ll get columns with one or two words per line. Basically unreadable.

              • Dear Momus,

                Your paragraph alleges bias on the part of a blog that is intended to counter bias. How can you say that is not complaining about what is written in the blog?

                Viz the election, to be honest I am not sure I do understand the point you are trying to make. Are you saying that Obama won big or that Romney’s defeat was a foregone conclusion?

  2. Last year I predicted that Ukraine entering the customs union would not be something to bet on (or against, either) and I think the same way about this possibility in 2013, 2014 and 2015. The opposition parties (Svoboda, of course, as well as Klitschko and Yatseniuk) are firmly against it and they collectively got the majority of the votes (although they are a minority in the parliament thanks to splitting the vote in first-past-the-post district voting). Moreover even within the PR certain factions (such as Tyhypko, who left the government over its flirtation with the Customs Union) are opposed to the Customs Union. As Ukraine’s economy sinks or stagnates Yanukovich and by extension his policies will not be getting any more popular – the silver lining for the opposition not being in government.

    Yanukovich may, however, go through with the union in the hopes that Russia will save him, and depending on how desperate he is, he may do this earlier than 2014 or 2015. Or not.

    Incidentally, support for the Russian language in Ukraine seems to have been collatoral damage of Yanukovich’s support for it. It has dropped dramatically country-wide while remaining popular in the Donbas and South:


    To me, this seems to reflect greater polarization as the Center is becoming more closely alligned with the West. The implications for a possible Customs Union are negative.

    • Dear AP,

      I broadly agree with your analysis with the one important caveat that I get the feeling that the Customs Union is not an issue that people feel sufficiently passionate about to oppose strongly. If Yanukovitch decides to join the Customs Union (which he may have to for economic reasons) my feeling is that this will be widely welcomed in the south and east but no longer bitterly opposed in the centre or even in the west as it might have been in say 2004. I say this obviously without knowing Ukrainian politics anywhere near as well as you but I have to say I was struck by the absence of visible widespread opposition to Tymoshenko’s imprisonment, the new language law and the election result.

      • Thanks for your comment, and apologies for my delay in responding. Tymoshenko’s electorate has largely moved on – not as much as people moved away from Yushchenko but they have moved on. She continues to have her core support, but these people, judging by her supporters at rallies, seem to skew towards being middle-aged or older women from central Ukraine. The youth who everywhere tend to be the ones to spearhead protest movements have moved onto figures perceived as untainted by corruption (unlike the oligarch Tymoshenko) – Klitschko who earned his money through boxing, Svoboda who are kind of dissidents (not all dissidents are nice liberal democrats), and even Yatseniuk, who at least is no oligarch.

        The emergence of Svoboda outside Galicia does not mean a rise in ultranationalism (perhaps half of Svoboda’s votes were protest votes, and Svoboda’s rise coincides with a moderation in some of its xenophobic rhetoric) but does indicate a hardening of attitudes against Yanukovich in central Ukraine (Svoboda came in second in Kiev). More people there seem to want an uncompromising enemy of the government. I won’t guess if this means they are more likely to actively oppose a customs union, but it suggests they are not less likely to do so.

  3. @Momus,

    I have to echo Mercouris’ comment: “Are you saying that Obama won big or that Romney’s defeat was a foregone conclusion?”

    Here is a graph of the InTrade odds of an Obama win over time.

    These aren’t empty-brained pundits, these are RL punters who are putting their money where their mouths are. And as you can see Obama was hovering at the 50% mark throughout H2 2011.

    Back then as I recall there were very real concerns that the withdrawal of stimulus spending would hit the US economy significantly, including tipping it back into recession. I was hardly the only person to entertain that notion, Krugman is about as mainstream as one gets.

    Edit: Incidentally, I did change my mind once the election neared. From August 2008: “Why Obama Will Sooner Win.”

    • Anatoly, InTrade’s track record on this sort of thing is not good. Punters, well, Las Vegas makes billions of dollars every year off punters.

      I predicted Romney would be the nominee in June 2011 (not hard! who else was there?) and called it for Obama in May 2012 — nothing but an economic collapse or equivalent disaster could have brought Romney in after that point. Romney was facing a moderately popular President running a very competent campaign; his own campaign had gross weaknesses (we saw these in the primaries, and they didn’t improve much in the general), he was saddled with a bunch of unpopular right-wing positions thanks to the long primary season, and he was fighting a demographic headwind.

      (That demographic headwind is only getting worse, BTW. I hesitate to make predictions, but I don’t see anyone in the current crop of GOP pre-candidates who can appeal far beyond the GOP base of white guys.)

      Doug M.

      • I disagree about Intrade. Individual punters are inaccurate but as a whole they are extremely accurate.

        Vegas punters are burdened by the house edge. So of course, on average, they would lose.

        My sincere congratulations on your win – I respect that. That said, I really do think more caution should be exercised against rear-view mirror inevitability.

  4. I’d like to believe that you are right in your 3rd prediction (revolutions never went well in Russia).

    Few days ago I read a very interesting post by Yevgeny Schultz [ http://eugenyshultz.livejournal.com/405477.html ], who analyzed the story with Depardieu and saw in it one of the symptoms of systematic attack on Putin’s image.

    He thinks that someone (and actually not the liberal / liberast opposition) is preparing the ground for removing Putin from the power.

    I’d like to know your opinion on that post…

  5. AK,

    I think with Greece you are gonna get it wrong again this year. Halfway through 2012 I began researching the hows of Greece leaving the euro (and it is not as simple as Greece just up and printing new money – there are many legal barriers which could be exploited by irate citizens who still support having the euro (by about 70%) to not having the euro).

    Having discovered what I did I came to the conclusion that the chances of Greece exiting the euro (and I mean REALLY exiting the euro, not just being forced to print IOUs for a temporary period like California) are about equal to the percentage of Greeks who support an exit from the euro. The last opinion poll I saw on Greek support for the euro had 70% of Greeks supporting it and under 30% of Greeks being opposed to (with some being undecided).

    And further to that, any real Greek exit from the euro is likely to be a long and drawn out process taking at least a year (in order to negotiate a treaty change which in turn will require a referendum in Ireland and possibly in France and the UK) or two years (in case Greece and the rest of the EU fail to negotiate a treaty change or to negotiate the terms of a Greek exit not just from the euro but from the EU (as currently the only legal way to really leave the euro is via treaty change or exiting the EU entirely), meaning that after two years Greece would have legally left the EU after it announced its intentions to do so).

    Thus for a real Greek exit to happen there would need to be an upsurge in opposition to the euro in Greece (which would probably take months – otherwise any attempt by any Greek government to exit without a treaty change or leaving the EU would result in mass lawsuits by citizens aiming to prevent the government from switching out their euros for worthless “new drachmas”…and the government would almost certainly lose those court cases) followed by a government announcing it wished to exit the euro and calling for a treaty change or simply announcing it was going to exit the EU. At best then Greece will not be exiting before 2014, and probably not before 2016 if at all.

    I think the best proof of my research is that the Economist changed its tune at the end of last year and began citing the factors I had come across in a couple of articles on why the euro hadn’t yet collapsed into a heap of rubble as they had been predicting all along (while of course failing to mention that they were among those predicting and even rooting for such a collapse via an exit by Greece).

    • Agreed. A Grexit might be the best policy choice, but Greece’s elites (of both ruling parties) are firmly against it, and there isn’t nearly enough popular support to force them to do it.

      Unfortunately, this means another year of protracted agony for Greece.

      Doug M.

      • I actually disagree that an exit by Greece would be the best policy choice. After all why is it touted as the best policy choice? Because pundits claims an exit would allow Greece to introduce its own currency which can then be devalued and allow Greece’s exports to become competitive.

        The problem with that theory is that Greece had it’s own currency before the euro (the drachma) but despite having its own currency Greece has been a net importer for practically its entire existence as an independent state (and has definitely been a net importer since the 1960s). If in the period between 1973 (end of Drachma participation in Bretton Woods) and 1984 (start of Drachma participation in the European Currency Unit and presumably in the European Exchange Rate Mechanism I) Greece did not see an improvement in its balance of trade it does not stand to reason that things would be any different if Greece abandoned the euro in favour of a heavily devalued drachma today.

        The thing about having a devalued currency enabling export competitiveness is that consumers have to actually WANT the products being exported. Unfortunately Greece doesn’t seem to be making stuff that is in sufficiently high demand to offset its needed imports. Greece is not China (cheap, mass produced goods), nor is it Argentina (beef, agricultural products, fuel based products and metals). So solutions that would work for China and Argentina would not necessarily work for Greece.

        • Certainly Greece has structural weaknesses that will limit its ability to run a positive balance of trade. A devalued drachma would lead to an explosion of tourism, but that only takes you so far.

          But that’s not why I support a grexit. I support it because it would allow Greece to inflate its way out of its current trap. Yes, inflation is dangerous medicine. But Greek unemployment is currently standing at around 25%. Desperate times, desperate measures.

          Doug M.

          • I have doubts over whether a devalued drachma would actually lead to an explosion of tourism.

            Even so, Greece inflating its way out of its current trap is only an extremely short term solution as Greece needs to address its structural weaknesses if it wants to avoid these situations in the future. This is not the first time Greece has had debt problems. Greece had defaults and moratoria on debt repayments in 1826 (not settled until 1878), 1843 (which resulted in Greece being shut out of the international capital markets for decades), 1860, 1894 (which resulted in the creation of the International Committee for Greek Debt Management tasked with monitoring the country’s economic policy, tax collection and management systems) and 1932-1964. The combined length of time under which Greece was in default since independence in the 1820s is 90 years. And during those times Greece had its own currency and could inflate it’s way out of trouble if it wanted. The problem was that trouble always came back.

            If I’m not mistaken one of the purposes of the single currency was to force countries to identify and address their structural weaknesses by removing from them the ability to institute short-term measures that may bring relief in the short-run but in the long run only lead to the same problems recurring in the future. Ultimately a better debt relief program linked to a program to address Greece’s structural weaknesses (including an overhaul of the tax collection system) could provide more short term relief without ignoring the long term fixes needed.

  6. RusFed-o-phile says:

    Regarding the demographic turnaround everybody seems to underestimate the current recovery…even you Anatoly.

    No I don’t provide numbers for December 2012 (still didn’t search for it) but for the January holidays from a few federal objects/cities. Not very meaningful so early in the year but nothing but simply astonishing.

    1. Nizhniy Novgorod Oblast
    960 births / 8 days compared to 2012: 809 births / 9 days


    2. Klin / City Hospital
    24 compared to 14 life births in 2012


    3. Irkutsk City / 3 hospital incl. perinatal center
    398 births -130 (!) more than in 2012


    • PvMikhail says:

      Thank you, It is good to see, that things go in the right direction. I have been watching Russian birth and death indicators for years… ca. since 2007. It gets better and better.

    • I want to be based on the most recent but also comprehensively recorded territory, and in demography, month to month fluctuations do not mean much (especially if you’re talking of particular oblasts or even hospitals!). A quarter does have some significant weight. A half-year and you’re in good territory.

      That is why I prefer to wait until Rosstat’s official preliminary estimates come in. The figures for December should be available in about a month’s more time.

      • RusFed-o-phile says:

        I would only say the growth potential is not exhausted despite the beginning decline in the primary cohort of childbearing age. The TFR of 1.70-1.72 in 2012 is expandable and can surpass the 2.1 barrier. The desire of having children is more or less intact in Russia, at least far better than in Europe or developed Asian countries. I think it’s ‘infectious’ when the playgrounds are crammed with strollers and you see pregnants and young families everywhere.

        That’s why I’m pretty sure these very few numbers I provided are more than the usual monthly fluctuations. I was tired of waiting to the month’s end for Rosstat’s
        updates I began (since August 2012) to search the ru.net for more information…after data for 15-20 federal objects rolled out I knew that the August and October would be very strong and September and November less so.

        Try these 2 LJ blogs which are primarely focused on demographics:



      • I also underestimated Russia’s resilience. The birth figures for the last couple of years have been really surprising, especially given that the population of child-bearing women is rapidly decreasing as the “empty cohorts” of the early 1990s move into the peak child-bearing years.

        I strongly suspect that what we’re seeing is a “tempo effect” That means women delaying childbirth — older mothers. Since the average age of first birth in Russia has traditionally been very low, there’s still plenty of room for this. This is unlike, say, Germany, where most kids are already being born to women aged 30 or older. It’s biologically impossible for Germans to delay childbirth much longer. Russians, on the other hand, still have plenty of slack. If at least some Russian women born in the 1980s are having an extra kid in their late 20s or early 30s, then that will compensate neatly for the empty cohorts — at least for now.

        On life expectancy, I bet Anatoly that the life expectancy for Russian *men* would not exceed 70 years before 2020. Based on current trends, I’m likely to lose that bet. We didn’t name a stake, so it’s bragging rights only — but I will certainly confess if I’m wrong. I’m watching with interest.

        Having said all that, I have to disagree sharply with the poster who thinks Russia could reach a TFR of 2.1 again. That’s just not going to happen, or at least not in the next decade or two. No large country has ever managed to raise its TFR from ~1.7 back over 2. The closest is France, which managed to claw it back from about 1.65 to around 1.9. That took a couple of decades, and France deployed a much more coordinated and aggressive set of pro-natalist policies than we’re yet seeing in Russia. So I don’t think it’s very likely at all.

        (Note that it’s important not to confuse TFR — especially completed TFR — and birthrate. Tempo effects and demographic inertia can cause the two to diverge dramatically sometimes.)

        Having said /that/, I’ll add that there’s reason for a Russophile to be cautiously optimistic anyway. A TFR of 1.7 to 1.8, combined with modest levels of immigration and the tempo effect, means that Russia could maintain a roughly stable population for the next 50 years or so. I’m still slightly skeptical of this, but I now have to concede that it’s within the realm of plausibility.

        Doug M.

        • I strongly suspect that what we’re seeing is a “tempo effect” That means women delaying childbirth — older mothers.

          That is exactly what’s happening. According to my models (and common sense) this is going to dampen the negative shock of the 1990’s baby bust.

          On life expectancy, I bet Anatoly that the life expectancy for Russian *men* would not exceed 70 years before 2020. Based on current trends, I’m likely to lose that bet.

          I’ve forgotten about this anyway. 😉 In any case, it will be a close shave anyway.

          Having said all that, I have to disagree sharply with the poster who thinks Russia could reach a TFR of 2.1 again. That’s just not going to happen, or at least not in the next decade or two. No large country has ever managed to raise its TFR from ~1.7 back over 2. The closest is France, which managed to claw it back from about 1.65 to around 1.9.

          I agree. I wouldn’t exclude it 100% however. There is no precedent for it since the 1970’s. However, when you have a conjunction of two particular trends – growing social conservatism AND a reasonably fast growing economy (especially if accompanied by an increase in the social sector) – the TFR can increase very substantially even in developed urban societies. For instance, compare the US or France in the 1930’s to the 1950’s/60’s. Arguably all those conditions are present in today’s Russia.

          My own best guess now is that the TFR will stabilize at somewhere around 1.7 to 1.9 in this decade.

          Having said /that/, I’ll add that there’s reason for a Russophile to be cautiously optimistic anyway.

          I don’t really think of myself that way nowadays. If I could do it with no hassle/SEO penalties I’d rename it to “Russia in the media” (except it’s already taken) or “Russia by the numbers.” 🙂

          A TFR of 1.7 to 1.8, combined with modest levels of immigration and the tempo effect, means that Russia could maintain a roughly stable population for the next 50 years or so.

          That is correct. In fact with that TFR, and annual net immigration of 300K (the sustainability of which I recall you questioned), and optimistic-realistic expectations for LE increase, the population will actually increase if at a glacial pace.

  7. I’d like to point out that I also got two out of three of my predictions in your interview: that Russia would ascend to WTO membership, and that Russia and China would hold large-scale joint naval exercises. The third, a real wild leap, was (if I remember right) that Japan would acknowledge publicly that the Kuriles belong to Russia. That didn’t happen, but Japan did stop making an issue of it.

  8. Over at SWP the Prof is having a tizzy because Russian growth is ONLY 3.5% this year, tops. Considering Russia’s top trading partners besides Germany in the EU are nearly in cardiac arrest and China is slowing down (but not tipping into outright recession yet) I would think most countries around the world would gladly take 3.5%. And SWP tries to preface it by saying ‘for Russia’s state of development’. Well Russia is already a middle income country by global standards, ala Poland, with relatively mature demographics — we’re not talking India or Brazil here.

    And isn’t it funny how the Russia stuff is cranked up even more hardcore during a week when the Prof’s home state of Texas had a state attorney general, one Congressman and several state Reps openly call for the arrest of any federal agents who carry out Obama’s executive orders on guns. Nothing to see in my back yard folks, move on, let’s talk about Russia 3,500 miles away some more.

    • “Considering Russia’s top trading partners besides Germany in the EU are nearly in cardiac arrest and China is slowing down (but not tipping into outright recession yet) I would think most countries around the world would gladly take 3.5%.”

      Russia’s export trade consists of “hydrocarbons” and “everything else”, with hydrocarbons dominating. So, you don’t look at economic growth per se in their trading partners — you look at growth in demand for hydrocarbon imports. The two figures are related, but only loosely.

      Also, while Russian exports are dominated by hydrocarbons, Russia’s export partners are quite diverse. No single country absorbs more than about 12% of all Russian exports. China is less than 10%, and the top ten importers together barely absorb 50% of total Russian exports. So, weakness in any one importer is no big deal.

      Doug M.

  9. Finally, as to the Arab Spring — well, it’s pretty much over, other than the long playing-out of Syria. We got a grand total of three new governments. Egypt’s going to go through a period of assholism, because Egypt has very little civil society and no traditions of either liberal or responsible government. That’s unfortunate, because Egypt is big and important. On the other hand, it’s also pretty much inevitable; Mubarak was going to go senile or die eventually anyway, and the nature of his rule pretty much assured that whatever followed would be as bad or worse.

    Tunis, cautious optimism. Tunis does have a very active civil society and close ties to Western Europe. Tunis could go wrong in various ways, but so far — fingers crossed — they seem to be muddling along okay. I’d take a modest side bet on Tunis.

    Libya is the wild card. Libya has *no* civil society, so logically you’d expect a quick descent into anarchy or authoritarian rule. Paradoxically, things seem to be working out much better than expected; while Qaddafi suppressed civil society and any sort of liberal discourse, he also suppressed the evolution of the sorts of entrenched and parasitic elites that are so destructive in Egypt. So, while I’m still not very optimistic, Libya might surprise us.

    So, to summarize: no new revolutions, Syria will continue to be a horrible mess, Egypt will be dismal, cautious optimism on Tunis, and who knows? but so far better than expected in Libya.

    (Incidentally, I expect the next decade to see an attempt at a “Central Asian Spring” as the current crop of strongmen ages gracelessly. I also expect it to fail, since Russia has a strong interest in not seeing a Central Asian Spring.)

    Doug M.

    • Interesting viewpoints. I am inclined to agree with them.

      Not sure Russia has a “strong interest” in not seeing a Turkestan Spring. More specifically I’d say it would not like to see it in Kazakhstan, Tajikistan, and Kyrgyzstan. I think it would be quite fine with one in Uzbekistan because it the US is friendlier with it anyway (as it was also entirely fine with the Tulip Revolution). It would also be happy to see a revolution in Turkmenistan, I imagine, although I don’t expect one there as the place seems to be locked down too tightly anyway.

      • Anatoly, I like the fine-grained analysis.

        I agree about Turkmenistan on both points — Russia could be happy with a different government there, but OTOH the current regime is quite firmly entrenched and seems unlikely to change any time soon.

        I should note that I include Azerbaijan in with the ‘stans. Here, too, Russia might be happy to see the end of the Aliyev dynasty. Aliyev _fils_ has been annoyingly independent on energy policy and unhelpful with Russia’s Caucasus problems. And then of course there’s Nagorno-Karabakh.

        But on the other hand, any plausible ruler of Azerbaijan — authoritarian or democrat, secular or religious — would take a strong position on NK: it’s a core element of Azeri nationalism. And while Aliyev can be annoying, he is running a secular state that is no worse than neutral towards Russian strategic interests. If I were a Russian strategic planner, I’d reluctantly support Aliyev against most plausible alternatives. Regime change in a Muslim country, even a bikini-wearing vodka-drinking Muslim country like Azerbaijan, opens up opportunities for Islamists. And Moscow certainly doesn’t want to risk another Islamist regime on its sensitive Caucasus border. Furthermore, even a secular democracy would probably be more populist than Aliyev, and thus more inclined to roll the dice on NK.

        Anyway, I would say that Kazakhstan is the real elephant in the room. It’s huge, it’s strategically important, it still has a significant (though much reduced) Russian minority, it’s a major hydrocarbon producer, and Nazarbayev has been consistently friendly to Russia for over 20 years now. From Russia’s POV, the desired outcome is a smooth transition with continuity of the regime. Any attempt to interfere with this — whether driven by outside forces or entirely internal to Kazakhstan — will probably provoke a strong reaction.

        Doug M.