A Third of Russians Outside Major Cities ‘Invisible’ to State Statisticians, Sociologists Say

Paul Goble

            Staunton, October 12 – The imposition of new rules prohibiting the sharing of statistical information among various levels of Russian government and the continuing impact of Soviet assumptions that individuals only work where they live mean that 33 to 37 percent of the population of Russian regions is “invisible” as far as state statistics are concerned.

            That conclusion, offered by Simon Kordonsky of the Khamovniki Foundation and three other sociologists, means that Moscow “does not see the real life of the provinces” and continues to make decisions and allocate funds on the basis of what appears to be increasingly inaccurate information (tvrain.ru/articles/hamovniki-396045/).

            In the 1990s, they report, municipalities gathered most economic and demographic statistics. Then after 2000, three things happened: Federal agencies began to take over, statistical staffs were cut, and by 2005, Moscow prohibited the sharing of information among local governments, the tax service and Rosstat.

            Such sharing helped to correct mistakes by one agency or another, but now that safety value has been shut down. Indeed, the only administrations that have more or less reliable information are those who ignore this administrative measure and openly violate the law, the sociologists say.

            As a result, the authorities “look at real life” only on the basis of the data they are given without much regard to how accurate it is. And as a result, they make decisions which they might not make if they had accurate data about realities. Moreover, this approach leads to significant undercounts on many indices.

            In Russia’s provinces, the sociologists say, “approximately 33 to 37 percent of the active population is invisible for state statistics” and hence for government officials. The reason, they say, is that many mid-sized Russian cities now live in “the so-called ‘garage economy,’” in which people live in one district but work in another or in the shadow economy.

            In the garages of some cities, “sometimes more people work” in these spheres, including in sectors that should be classified as industrial production, than do in the official local economy.  In Toliatti, the sociologists point out, there are more people involved in “the garage economy” than in the city’s major official employer, AvtoVAZ.

            To a certain extent, they say, “the percent of such enterprises has remained practically unchanged from tsarist times,” but the measurement of them has. “Consumer cooperatives did not disappear after they were banned in 1956, and from that moment began the growth of the shadow sector.”

            “If the traditional economy exists in a system of institutions,” Kordonsky and his colleagues say, “the garage economy does not fit into this system. Registration is necessary only if it is required to avoid interference” with the economic activity of these “firms,” and that is hardly always the case.

            The sociologists give another example of this kind of economic activity which is now uncounted by the state. “Almost 40 percent of the population of Russia uses the resources of the forests in a way uncontrolled by the state.” Most people think this is about mushroom hunting or gathering of firewood, but it often involves far larger and more lucrative activities which are not being counted.

            People at the local level know what is going on, but they no longer have to report it. Most people don’t want to share the information with those higher up because they may be involved as well.  But what this signifies, the sociologists say, is “the formation of a corporative state” in which many people are active at one level without officials at another knowing about it.