As we relaunch our Russia-focused podcast under the Carnegie Politika brand, FT correspondent Polina Ivanova and economist-in-exile Sergei Guriev join podcast host Alexander Gabuev to discuss how access to both data and sources has changed since Russia’s invasion of Ukraine, and whether people inside the Russian government itself also have a poorer understanding of the broader picture as a result of the same changes.
Alexander Gabuev (AG): The Carnegie podcast on Russia is back. We've been on pause after the abrupt departure of our team from Moscow, and most of the team members are scattered around the world and Europe. I think that the challenge for people who try to analyse Russia outside is this: we've been in the country, we've been on the ground, we've been seeing people, and we've been talking to various sources—but not anymore. So we are trying to assess what's going on in the country without the physical ability to go there. That is the terrible news. The good news is that we are not alone in this. And there are many brilliant Russian analysts who cannot go back, and they are also trying to make sense of what's going on in the country from the outside.
We don't know how long this situation will last. But let's assume that the current deplorable state is this: that many people have to watch Russia from the outside and try to make sense of what's going on in the economy, in society, in politics, and in Russia's foreign policy, and the most brutal manifestation of this foreign policy, this ugly war against Ukraine.
Today I'm joined by two terrific, astute observers who everybody knows: Sergei Guriev, who is provost of Sciences Po, one of the most respected global economists, but also an economist with Russian roots and somebody who writes and thinks about Russia.
Sergei Guriev (SG): Thank you very much, Alexander, for inviting me.
AG: And Polina Ivanova, who is a Financial Times correspondent working on Russia, and has been in Russia before with the FT and Reuters before that.
Polina Ivanova (PI): It’s great to be here, thank you very much.
AG: So I think the three of us are having somewhat similar problems. But you, Sergei, have had these problems longer than Polina and I. You've been outside of Russia since what, April 2013, and you haven't gone back, right? You were back then called by the Russian investigators body, they were looking into various issues about your independent expertise on the second Yukos case. And then you decided to leave the country and never came back and made a distinguished career outside—of course, no surprise to anybody who knows you—in Sciences Po, for the European Bank for Reconstruction and Development, and back at Sciences Po. So your area of research is of course far wider than just the Russian economy, but you still do write a lot on this subject, and you’re among the finest experts on Russia. So do you think lack of physical access to the country impacts the quality of your analysis, or it doesn't matter in your line of work? Because you just work with data and figures and the economy, and you can do that from Paris or Brussels or Berlin or DC?
SG: As you rightly said, I left in 2013. At that point, I would say, a physical presence in Russia for economic analysis was not actually that critical. You could talk to people on Skype (at that point it was Skype rather than Zoom). People would come through Paris all the time. And then later on, I worked in the European Bank for Reconstruction and Development as a chief economist, and people would come through London. People would come to our conferences in third countries. So at that point, it was not a problem at all. And indeed, data were available. So in this sense, yes.
The challenge comes now when some people have left and can’t go back, some people who have not left don't want to talk to you or can't talk to you, and people who do talk to you from Moscow often think that they should be careful with what they say, and that is a problem. And then the next problem is, of course, that the data are classified. And so this is when people-to-people contact is important, because you can try to figure out why some data are classified and which data are distorted. The old Russian statistics were problematic, but at least honest. Now we do see inconsistency in Russian statistics, and so it's important to talk to people to figure out which variable, which time series is cooked up. And so this makes it difficult, yes.
AG: So if I'm hearing you correctly, you would say that before the war—before February 24—physical access to Russia didn't matter that much for an economist. Data was open, you would still see a lot of these people, and they were willing to talk to you. And then the significant worsening happened after the war started and is connected to both sources and people you know, because you have a plethora of very senior people in various positions that have known you for many years. And also the effort of the government to classify data works hand in hand and makes our picture of the Russian economy incomplete. Is that correct?
SG: That's correct. I would say that the declining quality of Russian statistics actually started slightly before the war. For example, nobody would trust the Russian data on Covid, nobody would trust the last Russian census. The other thing was Russian economic growth in 2018, where numbers were pretty much reshuffled in a way that the growth that came up that year was questionable. But these were kind of smaller things, not comparable to what we are having now, when whole areas of economic statistics—for example, trade statistics—are just classified. And of course, that makes analysis very difficult.
AG: Polina, what about your angle as a reporter? My impression is that before the war, foreign correspondents in Russia and bureaus you worked in—the FT, Reuters—were very successful. They were a very important source of information. I only realized the value of journalism after leaving journalism in 2015. When I switched from Kommersant to Carnegie, I realised that actually, journalists are doing tremendous work, and I keep myself informed across every issue only by reading stuff that you put out. Like I could be narrow in my foreign policy speciality or Russia-China, but not across the board. So thanks for doing this work. But my impression was that the space was closing up for foreign reporters before the war anyway. But you still managed to break stories. Some of the best Covid stories were written by you and other colleagues. FT managed to do scoops on banking like Otkritie and stuff. What was the situation before the war? And how did it change after February 24?
PI: Thank you. I came to Russia to work as a reporter maybe five years ago. And since then, it has been a downward spiral and a closing and tightening space in terms of what you can do as a journalist—not necessarily as a foreign correspondent, but speaking about Russian journalism in general. One of the first things that happened after I arrived and one of the first things that I was covering was the arrest of Ivan Safronov, then Ivan Golunov. You have one journalist after another facing the state at its most cruel and frightening, and seeing protests for the freedom of the press and that kind of tension escalating. And really, the space began to close very, very rapidly in the year preceding the start of the war. You could really sense it. The government started publishing these foreign agent lists that we all know very well, and one after another your colleagues who cover Russia in Russian were ending up on these lists. And you could see it limiting the space for work very, very quickly.
As a foreign correspondent, you are privileged in some way in that you are not writing in Russian, and therefore you are not influencing a domestic audience. And therefore you are not perceived as having an impact necessarily on the mood in the country or anything like that. So that does give you a distinctive role to play and one which is more about kind of filtering the information that you know, understanding what's happening in Russia, and translating that to an audience abroad. And so it's more about the messages that the government has to convey, and whether it still has a need to convey that to a global audience. And whether it still is in dialogue with that global audience in some way after the war. You still see some foreign media working in Moscow, but it has become very difficult because a string of new laws have been applied that again that we all know very well, about discrediting the armed forces, which basically bans quite a lot of the language that you can use around the war or quite a lot of the kind of information that you can share around the war. So if you want to basically write anything that isn't coming from a direct government source, that becomes difficult. So the space has really shrunk down to just a handful of people that we can talk about who are still working on the ground in Russia.
AG: I remember, in terms of the sources, that before the war, a lot of people—at least the economic part of the bureaucracy, it's not that Nikolai Patrushev or the hard men who are in charge of the so-called siloviks ever
bothered to talk to foreign reporters, other than just delivering some propaganda messages—but definitely people working in the Bank of Russia or Putin's economic advisers, people in the large banks saw the value of talking to the Financial Times, to Bloomberg, or to Reuters, or Wall Street Journal. And I remember senior people coming to the editorial teams and sitting down for two hours of off the record conversations, because they knew that they need to talk to the markets in this way. Has that changed? Do these people still talk, do they want to convey messages and send signals, or have they completely shut up?
PI: Obviously, in a state of war—and Russia really does see this as being a war between itself and the West—in that sense, obviously the desire for a dialogue between it and the West has declined, and sanctions mean that a lot of economic ties have broken down, so it's more of a war between these two worlds than before. But I do think there is still access. There is still a possibility to work. I have just been to Moscow on a work trip, the primary goal for which was to test exactly this environment, to see what you can do: whether it's still possible to meet with people, to talk to people. It has become more complicated, there's no denying that. But in my experience, it was still possible. There were still businessmen, officials even, or people close to government who were clearly interested in speaking, and also hearing my own perspective on things.
AG: Can you share some stories of work protocols? Because I hear a lot of stories, like how people who work in the government leave their phones with their assistants. Many people now have these devices that make their cell phones or Apple watch impenetrable for surveillance techniques. A friend just visited Moscow and saw a senior official and they left the devices in his office and drove in a car for fifteen minutes to take a stroll in a park to talk about absolutely non-political things. That just shows you the level of anxiety, and the higher in the chain of command you are, the more people feel this anxiety.
PI: I didn't experience that so much, though I know that it absolutely is happening, I think quite a lot of conversations I was having were on record and quite public. I was keen to do more public facing work. But I know that that is definitely happening. People are taking more security measures, and you can just sense that people are really careful about the wording of their language and the kind of things that they say, everybody is really checking themselves in terms of what exactly they're saying, and what words they’re using. This has all become very risky.
And if you go to meet anyone from the handful of people who are left who still see themselves as activists or opposition people, then that, of course, is a completely other world of risk and fear to the point at which people (and this is something I never experienced in Russia before) just in their social lives, are discussing things in bars at a whisper and looking over their shoulder. I've really never experienced that before. And I'm seeing that happen all the time. It's a state of fear.
AG: That brings back terrible memories. I was born on the day Gorbachev became the secretary general of the Communist Party, so I was made in the USSR, but never actually experienced the USSR. And my vivid memories were about the funeral ceremony for Sakharov, or 1991. But this is how things used to look in Russia, and now these days are coming back.
Sergei, when you are talking to people, you don't need to write an FT piece, nobody gets quoted, so it's all very private. Do you sense the same restraint that Polina describes? And then the other angle: probably some people were more restrained when talking to you before the war, because you are known as one of the people who take a critical stance toward the regime. And you are open about that, you criticized both the political system and the way Putin manages his economy. You are not an activist, obviously. But you are a critical Russian, a patriot intellectual. So among the people who still talk to you and were open, did you notice a change in tone? The level of openness using digital means?
SG: Yes, people are very careful in not being recorded: much more careful than before. There are some people who just don't want to talk to me. That happened already before the war. But right now, the people that do talk to me, it's very clear what they think about the war. They would never say that openly in a digital communication on Zoom or Skype or secret messenger. They will try to avoid doing something that would get them to jail. But it's very clear what they think about the war.
People who I talk to outside of Russia are much more open. For some reason, they think that they are not followed. But anyway… as you rightly said, I don't quote those conversations. They understand that I'm not going to quote them, so they are not scared of that. The main fear is coming exactly from being recorded by somebody who would then take it to Vladimir Putin and get them in jail or poisoned. So this is important, but overall, the fear is there. And it’s very, very clear that people, when they speak in public, are really, really aware of the fact that Putin doesn't like dissent at all these days.
AG: I experienced the same, but it's interesting that you mentioned this, Polina, that people are very interested in what you have to say about life outside of Russia. In my Moscow life, I've had a lot of access to the government because of my China connection: as a China expert to various senior people in the Bank of Russia or the government itself or the Foreign Ministry. But now people know that you travel between Washington, DC and European capitals and Asia, and some of the old contacts are just so curious in trying to learn what's going on out there. And of course you don't share the details of your conversations with senior Western officials, and who said what. But just getting the overall perspective from somebody they trust, they are very interested. And they also are ready to share—not necessarily classified details, which we don't do anyway, but it's interesting to get this picture and just to see the curiosity.
Another metric which is fun is Carnegie, which was a very successful publication—we ran the number of hits, perhaps comparable to some Russian media. Carnegie Politika, which is the successor to Carnegie.ru, was relaunched in September and it's probably double the number of hits. We are not blocked, but most people use a VPN, so it's very hard to figure out where the traffic comes from. But you see that people in Russia are more silent than they used to be, but they are probably increasingly curious about what's going on in the outside world.
But Sergei, since a chunk of official statistics is gone, do we have a more proxy way to figure out what's going on in the Russian economy? Because a lot of data is now available on the internet. You can compare prices in various retail shops online and figure out what the real inflation is. So there are probably many more tools due to the Russian digital economy that would enable an economist to figure out what the reality is, even if the Central Bank or Ministry of Finance don't publish figures anymore.
SG: Yes and no. There are certain things you can do, but they are not representative. The Russian economy is quite digital, but the central bank collects much more data, and the Russian statistics agency Rosstat collects much more data than is present on the internet. That's true in all countries, including the US or digital paradises like Estonia. You still have non-digital segments, and they matter. That's why official statistics matter. And so in that sense, unfortunately, without access to data, it's hard to do analysis.
Interestingly, I think many intelligence services are able to collect this data, like in good old Soviet times, the CIA would have a better picture of the Soviet economy than not just academic economists in the US, but also better than many policymakers in the Soviet Union, because some of the statistics were classified. But I don't work with the CIA, and I also suspect that they are mostly investing in collecting data on military capabilities, rather than on inflation, even though these things are, of course, connected. But no, the life of an economist is really hard. We shouldn't be happy that Russia classified the statistics.
AG: We saw that the CIA has far better insight into Russian foreign policymaking than many of the people who cover Russian foreign policy and have access to people like Lavrov, Ushakov and others in Moscow. We saw that in preparation for this war, and we will talk about this in a second. But do you think that people inside the government also have far less understanding of the broader picture of what's going on because they used to rely on this data and their decision-making was relying on the data published officially? And now these all are little compartments, cubicles, that are not necessarily interrelated. So in order to get access to some data, you need to go to your FSB supervisor and ask him to give you access to this or that. So does it mean that the quality of governance of the Russian economy might also worsen over time, because the mid-level managers will not have access to correct information?
SG: Well, at the top level, these permissions have been given. So if you work for a government think tank, you have received access to certain data series that people from outside cannot. But the academics outside of the system don't. In that sense, you destroy the critical mass of experts—not just outside of the country, but also within the country. So whoever works with all available data are working for the government. And here, you create the same problem that emerges in all non-competitive systems: you create yes-men. If you work for the government, you create an environment in which experts know what the boss wants to hear. And that's a great problem. And in that sense, of course there will be many economic mistakes made.
There are certain subsets, sectors of economic management where you can actually use a relatively small group of people working with relatively well defined sources of data to produce good policies, and the central bank is one of those. But overall, I'm pretty sure that the quality of the government's information on overall economic activity is now much lower than it used to be before the war, yes. If you compartmentalize information, you undermine independent analysis. And without independent analysis, you get the analysis that you want to get.
PI: Yeah. I was actually thinking about this just in terms of social mood and public opinion in Russia. You know, we sometimes write these sort of mood pieces where you try and check in with what the country or a region or a city's feeling. You know, what is the mood in Moscow? What's the mood across the country and the regions? And I know that I have a certain toolbox that I go to—even when I was in Russia, but working from Moscow, but trying to write about the regions, for example—that you turn to to try and get a sense of what the public is thinking in a particular area, and looking at it now, that toolbox has completely shrunk. So you used to be able to go to the VKontakte social media page for a particular town, and there would always be a forum for that local community to just chat and share their views and criticize the government and the local governor and his decisions and the bad roads and this sort of thing. You go in those forums now, and they are boring. They are empty, and they are either filled with bots and really out there conspiracy stuff, or they're just being cleaned up completely. That's one tool that is out of the toolbox. And there are many, many more examples like that. If you look at local media, this was always an essential part of trying to understand what was happening. There was more freedom in your local blog for a particular city or region than there was on a national level.
And those have all been basically sifted through, and a lot of local reporters have also had to either leave or stop working. And so you start thinking, what is the feedback loop? What is getting into the folder that is landing on the table that has been passed up to the higher table and the next higher table in terms of what the government understands about the public mood? It's interesting. I just wonder whether they run into the same problems we do when we try and write these mood pieces.
AG: Oh that's right. Because Russia is not a country of Moscow. It's a very centralized country, but it's also a country of regions, and regions do matter, and something I loved a lot about your coverage and many other colleagues’ work was really going out to the regions. It’s just a very different layer of Russian reality that you don't get in Moscow. And I think that this part is also missing, because there are some regional media and some brave journalists in the regions that still try to produce these stories, but it's increasingly hard. And then I think a part of the problem for Moscow intellectuals, including myself, was always to try to get out of the Moscow Garden Ring or Boulevard Ring bubble and go to see the country. And I’d bump into this working in the Kremlin press corps, where yes, the reality that you are shown around on these trips with Medvedev or Putin is very much curated and manicured, but you still see glimpses of what life in real rural Russia or small town Russia looks like, and it gives you pause.
So here's my final question, about the ability to be non-emotional, to try not to analyze Russia through wishful thinking. Because a lot of good analysts are very critical of Mr Putin, of his brutal war against Ukraine. I remember when people saw these demonstrations in Khabarovsk, a lot of very good analysts were like, “Oh, this is the end of it. This is the end of the regime.” Or when 30,000 people protested Alexei Navalny’s arrest, like, “Oh, this is something big.” And then it never materializes. And if you try to dispassionately look into the nitty gritty of how the repression machine is working, how much money and resources were pumped into this pillar of the regime, you say, yeah, it's probably doomed. It's much uglier and more terrible than many people think. Same for the preparations for this war. The most brilliant analysts of Russian foreign policy did a very rational analysis and said, “The downsides of invading Ukraine are so long. If I, as an analyst sitting somewhere in the Valdai Club, see this all, definitely President Putin sees it as well. So there will be no invasion.” And then the reality’s just very different. So how do you cope—particularly being outside of Russia and probably wishing for good news and good changes—with this challenge of staying sane and rational in your analysis, and just being very sober, not driven by wishful thinking? Sergei, you have had this challenge for more years than Polina and I, so I go to you.
SG: This is indeed a great challenge. As you mentioned at the beginning, I'm more of a quantitative person. I look at data, and it's harder to get away when you work with data. And it was clear, for example, from many years ago, even in the beginning of the second decade of the century, that the Russian economy was going to stagnate without reforms, but it's not going to collapse. And this is something that my friend and co-author Aleh Tsyvinski and myself wrote a number of articles about.
Now when you start to predict social mood—what Polina was talking about—when you start to think about collective action, this is where all social scientists would agree: it's extremely hard, impossible to predict. And this is where you have a huge space for wishful thinking: you think, “this must be a trigger for collective action against the regime. Now all Russians will take to the streets,” and so on and so forth. And it's not impossible. But this is so uncertain. When you talk about protests and revolutions, what actually triggers them is very, very hard to predict.
And the other thing we should all remember is that this regime is unprecedented in many ways. It's a very skilful regime. It is not the first “spin dictatorship,” as we call it with Daniel Treisman in our book, “Spin Dictators.” But it's one of the most sophisticated spin dictators, and it has oil, and it has nuclear weapons, and it has a big army. Whatever we think about this army, it’s still a big army. And so in that sense, it's very hard to predict how it develops based on the behavior of other regimes, because other regimes are similar in some ways, but very different in different ways. We should remember that we need to keep intellectual humility and learn from past mistakes. And we should remember that yes, regime change can happen tomorrow, but also, the regime may last much longer than we want, and than we want to believe.
AG: Polina, you’re safeguarded by the editorial standards of the FT, but you probably bump into this issue as well, at least talking to your sources.
PI: I think with journalism—especially going back to our conversation about journalism from abroad—there's a structural problem, it becomes harder to start with the question and not with the answer. When you live in a country, you're talking to people all the time, every day you are living and breathing the experience. There is a degree of randomness to which the story comes to you. In a large sense, you're learning things all the time. You're absorbing information.
When you're outside of the country, quite a lot of the time, you have to start conceptually. And you think, sanctions are probably impacting daily life, let me start looking for people who could tell me about this. Then you maybe approach the one person who's desperately affected by it, and they'll tell you a different story. And so you have to really check yourself all the time on this to make sure that you are still talking to people with a degree of randomness, that you're starting from the question all the time, even though a lot of the time you are calling people up from afar with a particular thought in terms of what stories you’re working on. That's the kind of structural problem of working from abroad. You have to constantly keep that in mind.
AG: Well this has been very sobering. And now I feel I need a drink, as usually happens when three Russians discuss what's going on at home—we need a drink at the end of the conversation. I think that my takeaway is that the challenge we are facing to understand Russia now is probably more complex and tricky than the old-time Sovietologists had, to some extent. Yes, Russia is far more open, far more digitalized, there are many streams of data, but at the same time, the regime wants to be very secretive, and it can bring all practices on how to make people scared and not talk too much. And then the system doesn't do a good job of being understandable itself. And then the yes-men that Sergei talked about might distort the picture, and the way the picture is getting to the higher tiers of the system, including Mr Putin himself, are making it less predictable and increasing the risks.
So I think that we have a public duty as academics, reporters and think tankers to put all of these pieces together and arrive at a coherent framework. Thank you so much. It's been a great pleasure to have you on this conversation and we will reconvene soon.