Russia is Running Out of People

Chukotka is an unlikely center for a  resurgence of Russian civilization. For one, it’s hardly the “center” of anything. Its  capital, Anadyr, is also the country’s easternmost city and sits just below the Arctic Circle. 

It’s closer to Chicago than it is to Moscow. A road connecting it to the rest of Siberia is  on track for completion… in 21 years. Until then, the only way out is this airport, accessible  only by helicopter for half the year.

Nor is there much “civilization” to be  found. Despite being larger than France, the region’s entire population would  fill less than half of Michigan Stadium. Life here moves pretty slowly.

When two brave Australian tourists  visited in 2018, they made the local news. And yet tiny, remote Anadyr, of all places, was  one of the first stops Putin made this year. There, in a staged meeting with local residents, the president celebrated its rising number  of large families, portraying the town as a model for the rest of the country,  a beacon of hope for Russia’s future.

So, what “rising number,” exactly, was  Putin referring to? A net population increase of 157 between 2010  and 2021, or 14 people per year. …Not quite the shining success story  the Kremlin would have you believe.

Still, he wasn’t wrong. An  increase of 157 — any increase, in fact — is far more than most places can claim. Between 2010 and 17, over 70% of  Russian cities shrunk in size.

And while Chukotka’s fertility rate of  1. 6 is well below the world average, it’s among the highest in Russia, where  children are becoming increasingly rare. In the 1980s, the Soviet Union had one of the  highest birth rates in Europe.

Its population peaked at nearly 149 million, making it  the 6th largest country in the world. But after its collapse in ‘91, its birth  rate has never recovered. Since then, more Russians have died than been born for  every one of the last 33 years except three.

Russia was first overtaken by Pakistan,  then Nigeria, and finally Bangladesh. And by the end of this century, it’s expected  to fall all the way down to 20th place, shrinking to three and a half times  smaller than the United States. Needless to say, these are troubling signs for  a leader intent on reviving the Soviet legacy.

And it gets worse. Because the Soviet Union collapsed 33 years ago,  birth rates fell 33 years ago, which means today, 33 years later, Russia is missing a whole lot of  33-year-olds — the prime working-age demographic. As a result, the country has a massive shortage of labor — especially of the blue-collar and  tech variety, which skew much younger.

A mere 15% of all workers are under 30 years old and the unemployment rate has now  reached a new low of just 2. 6%. …Not to mention, this dwindling 20-35-year-old group is the exact one you’d need,  to, say, fight a troop-intensive war.

Now, Russia is not alone. Far from it. China’s birth rate, famously, fell much faster.

Korea’s is much worse.  And Japan’s has stayed low for even longer. Families across the developed world are getting smaller and much of Europe  and East Asia is shrinking.

Take Italy, for instance. As you can see, both it and Russia saw the same roughly 50%  drop in births — albeit, with a ten-year delay. Likewise, both will experience the same economic  challenges stemming from their smaller working-age populations.

More retirees withdrawing pensions  than young people funding them. Fewer children left supporting a larger number of older  relatives. Fewer inventors to invent things, landscapers to landscape, and caregivers  to care for a growing cadre of seniors.

Russia may be in trouble, you might  think, but no more so than Italy, or Japan, or Britain. “Nothing to see here. ” But… there’s a critical difference. 

While the effects may look the same, the causes couldn’t be more different. In Italy, like most countries, these unfortunate  problems have a silver lining. Birth rates fell because fewer teenagers were getting pregnant. 

Women could go to school, had more career opportunities, and were increasingly free to  have as many or as few children as they wanted. An economic defeat, but a human victory. Whereas, in Russia, this drop was less a  choice and more a reaction — to hard times, mass unemployment, and a general  sense of uncertainty and despair.

An economic and human failure. Meanwhile, Italians were also living longer,  healthier lives. Medicine was advancing, the standard of living was rising,  and pollution was being regulated.

Thus, even while the country  got older, the number of deaths, as you can see, remained more or less constant. The same cannot be said of Russia. And this is  where the two countries really begin to diverge.

There, deaths surged at the exact moment birth  rates fell, producing what demographers call the “Russian Cross. ” And this was not just a temporary  phenomenon — deaths have remained high ever since. There’s no silver lining to be found  here.

This is the bleak story of a nation being squeezed simultaneously from two  directions — fewer births and more deaths. Consider, for a moment, the scale of this tragedy.  The annual number of deaths more than doubled during the thirty years when HIV treatment, ICUs,  and organ transplants became widely available.

As the economist Nicholas Eberstadt once observed,  the last 16 years of Soviet rule saw 11 million more births than deaths. Over the next sixteen  years, it saw 12 million more deaths than births. These are war-like casualties in peacetime.

So, what exactly caused all these deaths? One clue is that heart-related fatalities — the  leading kind — seem to spike on the weekend. Another is that — whatever the cause — it  appears less common in Muslim-majority regions.

All signs, in other words, point to alcohol. The problem is not simply one of quantity. Though it certainly doesn’t help that in  some years Russians have consumed almost double what the World Health  Organization considers to be dangerous.

The problem, above all, is what  kind of alcohol, where, and when. The French sip wine, the British  beer, and Russians, overwhelmingly, vodka. Some stereotypes, apparently, are true.

Not only do Russians get more  intoxicated, faster, as a result, but a deeply embedded culture of social  and binge drinking compounds these effects. During Soviet times, vodka was sold with  non-reusable caps. Bottles were consumed all at once, usually in groups, and often in uncontrolled  public spaces — unsupervised by bartenders.

This is an extremely lethal combination. So much so that every Russian male  has a roughly 25-30% chance of dying, one way or another, thanks to alcohol. The numbers on screen, bear  in mind, are from 2012, but note how Russia’s number is  ten times higher than America’s.

Researchers estimate that between 1990 and 2001, over half of all adult male deaths  in Siberia were caused by alcohol. On top of this, about 30% of all crimes and 72% of all murders in 2017 were related to  alcohol, according to the Kremlin. These are staggering numbers,  particularly for one of the world’s most highly educated countries,  with an upper-middle income, no less.

Unsurprisingly, then, the  Russian male life expectancy is just 68 years — closer to Haiti than  Germany. The average man in Sweden, Switzerland, or Macau will live  a full decade and a half longer. So, why does the government accept  this tragic state of affairs?

Surely, even the most corrupt, authoritarian,  and malevolent dictator would recognize this for the epidemic it is,  if only out of self-interest. Well, as it turns out, serious  efforts have been made in the past. During Soviet times, authorities estimated  that Russians spent 15-20% of their incomes on vodka alone.

And no fewer than 75% of  work absences were attributed to alcohol. In response, Gorbachev — a non-drinker himself  — launched the strictest crackdown before or since. Prices were increased, manufacturing  restricted, rules tightened, and curfews enforced.

Entire vineyards were even destroyed by the state. It worked. Almost immediately, consumption fell by  about 25%, and, more importantly, it shifted from vodka to beer.

In less than 3 years, the male life  expectancy increased by 3. 2 years. For women, 1.

4. There was just one problem: or, rather, 28  billion — the number of rubles the government lost in tax revenue, which, as Mark Schrad  points out in his book “Vodka Politics,” was roughly equivalent to Russia’s total  loss from the collapse of world oil prices. The Soviet Union, at the time, truly ran on vodka — the tax revenue from  which funded 25% of the government’s budget.

So, left with no other choice, Gorbachev rolled back the campaign in  1988, just three years after it began. But it was too late. To fund the deficit, the  Soviet Union began printing money, which broke the state-run economy, which led to shortages,  which, in turn, caused its total collapse.

It would be too simplistic to say the  anti-alcohol campaign brought down the Soviet Union. But experts generally agree that  it contributed, at the very least, to its demise. Then, just when you thought things  couldn’t possibly get worse, they did.

After 1991, alcohol suddenly became extremely  cheap and even more accessible. In other words, the floodgates were opened after  3 years of pent-up demand at the exact moment Russians were at their most hopeless. If they drank profusely before,  now they were off the charts.

Consumption soared as they made  up for lost time …and then some. Over two decades later, Putin’s political  placeholder, President Medvedev, tried again, this time with more modest reforms — mandating  health warnings, cracking down on DUIs, and, if you can believe it, reclassifying beer as  “alcohol,” rather than mere “food” product. But, once again, during its economic downturn in  2014 when it was in dire need of extra revenue, many of these measures were  reversed.

In the meantime, Russians turned to all manner of far  more dangerous alcohol substitutes. The lesson? Don’t touch alcohol restrictions  with a ten-foot pole.

They’re costly, they’re wildly unpopular, and they don’t work. During the Great Recession, Russia’s finance minister removed any doubt about  the government’s true motives, saying the best thing ordinary citizens  could do to help the economy was drink more. And one final cherry on top: a popular  brand of Russian vodka is named after Putin — who ironically, is  a teetotaler like Gorbachev.

Now, Russia almost certainly stands more to lose from encouraging alcohol consumption  than it does to gain from taxing it. As early as 2006, Putin declared the demographic  crisis to be Russia’s “most important problem. ” Two decades later, he continues to say similar  things, most recently on his trip to Anadyr.

And this isn’t just empty rhetoric. The country’s  “Maternity Capital” program encourages population growth by giving new families a one-time  payment for giving birth to or adopting a child. Still, these are relatively  easy, low-risk policies — and, frankly, likely not all that effective.

Whenever this demographic goal conflicts with  any other goal, the latter inevitably wins. Year after year, Putin has  made short-term decisions that aggravate the problem  and mortgage Russia’s future. Take healthcare, for example.

In a recent report, Russia ranked last out  of 55 countries for healthcare efficiency. Hospitals are so dirty, corruption so rampant, and  medical practices so outdated that many people, especially those outside of major  cities, avoid seeking care altogether. At no time was this more on display  than during the COVID-19 pandemic.

Distrustful of the government,  people avoided vaccines. Today, a smaller share of its population is fully  vaccinated than the lowest U. S.

state — Wyoming. As a result, as many as 1 million Russians may  have died of the virus, according to outside estimates. If true, this would make it one of  the highest per-capita death rates in the world.

Rather than fund its outdated hospitals, the  government diverts money toward the military. Estimates of Russian casualties from its  war with Ukraine range between 100,000 and 500,000 — in either case, a massive chunk of  the demographic its economy needs the most. Not to mention: countless families have fled the  country since the war began — likely 1-2 million, including 200,000 in the first  10 days of the invasion alone.

Keep in mind that only 29% of the population — the  elite — hold a passport. Those who are leaving, in other words, are disproportionately young, wealthy, well-educated, and  have skills in high demand. The loss of 100,000 software engineers, on its own, will cause chaos in Russia’s  once-thriving technology industry.

Add all this up — alcohol use, declining  birth rates, the poor state of healthcare, the pandemic, war, and the subsequent  exodus, and Russia has a serious problem. It’s running out of people. In 2020 and 2021, its population declined by over  a million.

And the worst may still be yet to come. Again, none of this was unforeseeable, which only makes the Russian government’s  inaction that much more concerning. Perhaps it should have taken the “Understanding  Graphs” course on today’s sponsor, Brilliant, which culminates in a capstone  lesson on population growth.

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