Symbolic – economic – Russian secrecy reached unprecedented proportions

Since April 2022, Russian authorities have restricted access to all foreign trade statistics, censoring data on both exports and imports and trade within the Eurasian Economic Union. According to the official explanation, Russia uses statistical obfuscation to protect companies and individuals against Western sanctions, but Moscow also appears to be particularly afraid of releasing sensitive, even vulnerable, information. The bottom line is that conflicting statistics continue to emerge about the state of the Russian economy.

The head of the Federal Customs Service, Vladimir Bulavin, said the new level of secrecy was needed to prevent “improper assessments, speculation and misinterpretation of imports”. Before the war, the Russians only encrypted data related to trade in military goods, aircraft, and nuclear materials. If we can now see the figures publicly, we can say that we can also learn about the current major economic issues, and Moscow obviously does not want that.

Military spending must have increased

“Unfriendly countries” that have introduced economic sanctions against Russia accounted for about 62 percent of the country’s imports last year. From this it can be concluded that, in the long run, Russian economic and technological isolation will lead to a decrease in the standard of living. Secondary U.S. sanctions would limit technology imports from China, further exacerbating Russia’s decline. Earlier, Moscow’s official export statistics were able to track the trends, volume and direction of important oil and gas exports, which are now in record surpluses.

According to official Russian statistics, the central budget’s oil and gas revenues rose 45 percent year-on-year in January, from 3.1 trillion rubles to 5.7 trillion rubles. Oil is certainly a good example of the problem of reliability of statistics: data are available from other countries that import from Russia, but they are not always enough to provide a complete picture, since it is not easy to track this raw material after processing. . This is especially true for crude oil products.

The Russian Central Bank has stopped publishing information on the structure of Russia’s international reserves: from the end of March, only data on the total amount will be updated, the breakdown of specific assets will no longer be updated. Similarly, the government has allowed Russian companies not to release data until the end of 2022, and the central bank will no longer require banks to provide key data required by Russian accounting standards.

Finally, as of May 2022, even Russian citizens will not be able to see government spending, as Moscow’s Ministry of Finance has encrypted current information on all federal spending and deficit funding sources. According to the latest figures, its military expenditure has risen to 630 billion rubles or so 150 percent increase from last year.

Reliability of data

There have long been concerns about the quality of estimates made by Rosstat, especially when the data is back-checked. In 2019, economist Kirill Tremazov called the data “more like a drawing than a statistic” after such a review. This eventually led to a public debate with Maxim Oreshkin, then Minister of Economic Development, who was Vladimir Putin’s economic adviser. A month later, following the controversy, Rosstat stopped publishing monthly indicators of Russians’ incomes.

Political considerations determine what data to withhold and do so in a way that hides both weaknesses and strengths.

– He said A source working at Rosstat told the Carnegie Endowment that officially officials are not obligated to publish economic statistics. The federal plan for statistical data defines which ministries should calculate which indicators, but does not specify whether they should be published: “The government has all the information it needs to make decisions, but businesses, experts and journalists currently have less information,” he noted. Source of research institute.

The concealment or manipulation of economic and budgetary statistics constantly worsens the quality of analyses, leads to speculation, and creates a completely suitable field for the development of different narratives.

(Cover image: Vladimir Putin. Photo: (Michael Metzel/Sputnik/AFP)