Russia's black market may amount to 50 percent of the country's GDP
Copyright 1998 Nando.net
Copyright 1998 Scripps Howard
MOSCOW (January 16, 1998 00:13 a.m. EST http://www.nando.net) --
Russia's black market economy could account for 50 percent of its gross
domestic output, according to a new report that will fuel arguments
over
how fast the economy is changing -- and in what direction.
The report, sponsored by the U.S. Treasury, suggests that average
living
standards are far higher than officially stated, with millions of
Russians moonlighting in second jobs.
The survey, presented to the Russian parliament last month, has angered
some Russian economists who say it understates the problem of poverty,
and has provoked skepticism among ordinary Russians.
The newspaper Izvestiya commented: "A defense worker or pensioner who
hasn't received his pay may think: 'At last, here comes an economist
from America and tells us that we are living 1 1/2 times better than we
are."'
Most economists agree that official figures on the Russian economy are
wrong. The argument is by how much and in what way. . Goskomstat, the
state statistics committee, was set up to monitor detailed
manufacturing
output as one of its main roles. In spite of improvements in its
information gathering, it's ill-equipped to monitor the service sector
and shadow economy.
In the Soviet era, enterprises had a clear incentive to overstate
output
to fulfill their plans. Modern Russian companies, by contrast,
understate production to avoid taxes.
Igor Birman, one of the report's authors, said the lack of reliable
statistics made it hard to formulate economic policy. "The best way of
forecasting how an economy will do in future is to extrapolate from
current trends. The trouble is the statistical base is terrible," he
said.
But other economists agree with Goskomstat's estimate that the shadow
economy accounts for 25 percent of gross domestic output.
Vincent Koen, principal economist at the Organization for Economic
Cooperation and Development, said: "It is not obvious to me that there
is a huge understatement of the black economy in the Goskomstat
figures.
If anything, they have a clear incentive to err on the side of the bold
and to inflate GDP to make the budget deficit seem more respectable."
By JOHN THORNHILL, The Guardian
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