How Much Does Russia Spend On Highways?

Does Russia really spend more on roads than we do?

Despite my resolution not to fact-check the State of the Union address, I couldn’t resist this one. In his State of the Union message last night President Obama said:

Countries in Europe and Russia invest more in their roads and railways than we do.

Presumably, the president does not mean that if you sum up all of the spending that all European countries including Russia do on their roads and railways it’s more than ours. The aggregate population of Europe and Russia is greater than ours, their aggregate GDP is greater than ours, and their aggregate land area is greater than ours. Even if they do spend more on highways and railways than we do (of which I’m not certain) doesn’t it stand to reason? Why should that matter to us? I note also that Illinois’s GDP is less than Russia’s. Am I worried? No. It’s comparing apples to oranges.

Does Russia spend more than the U. S. on highways? I couldn’t identify any measure by which that’s the case. In 2008 the U. S. federal government spent about $60 billion on highways. The states add to that figure considerably from their own budgets.

In 2008, the most recent year for which I could obtain information, the Russian Federation spent about $400 billion rubles on highways. That sounds like a lot of money but a ruble is worth a little more than three cents. Factoring in the conversion that means that the RF spends about $17 billion per year on roads—significantly less we do. The RF’s population is a little more than a third ours so we spend about half again per capita on roads than they do (from the federal government alone). Our GDP is between six and seven times theirs so, yes, they spend more on roads as a proportion of GDP.

Unfortunately, they get a lot less for their money than we do. The cost per mile in Russia is about six times what it is here. That means we’re building significantly more miles of road as a proportion of GDP than they are.

Russia needs to spend a lot more on roads than we do:

Despite Russia’s size, its railway network is half the length of that in the US and freight trains crawl along at an average 25mph. The paved road network is less than one-10th the size of the US’s, and barely 5 per cent of its roads are considered “good quality” – which in Russia means having at least two lanes and a decent surface.

Improving this will mean radically changing the structure of the Russian economy away from consumption, to which it is currently geared, towards investment.

Investment, as measured against GDP, is 30 per cent for a typical emerging market, but in the middle of the past decade this fell to 15 per cent. It has only slowly been creeping back up, achieving the average overall world level of 23 per cent in 2007.

Russia invests far less in infrastructure than China or other Asian high-growth countries. Infrastructure investment is roughly 4-5 per cent of Russia’s GDP, while in China it is 8 per cent, according to Troika Dialog.

There’s a joke going around in Russia that the cost of adding a kilometer to the Moscow highway ring is about the same as building a kilometer of the Large Hadron Collider. They’re not far off.

Russia’s total infrastructure spending in 2010 was less than half our highway spending.

I emphatically don’t blame President Obama for this blooper: I blame his advisors. Either they don’t know any better or they’re afraid to correct him. In either case he’s not being well-served by them, something I’ve been complaining about since he took office.

For my other remarks on the 2011 State of the Union address see here.

The picture above is of a highway construction project in Russia in the Khimki Forest on the outskirts of Moscow.

FILED UNDER: General, , ,
Dave Schuler
About Dave Schuler
Over the years Dave Schuler has worked as a martial arts instructor, a handyman, a musician, a cook, and a translator. He's owned his own company for the last thirty years and has a post-graduate degree in his field. He comes from a family of politicians, teachers, and vaudeville entertainers. All-in-all a pretty good preparation for blogging. He has contributed to OTB since November 2006 but mostly writes at his own blog, The Glittering Eye, which he started in March 2004.

Comments

  1. Victor says:

    It will be interesting to hear if there is any further clarification on this, or other figures thrown about. The thing with numbers, which all politicians seem to embrace, is they can be twisted to prove almost anything. So it would not be surprising to learn they twisted these in some manner, to make it so the statement is technically true.

    However, unlike the common saying, I do NOT think technically right is the best type of being right. Instead, I would prefer that numbers are not twisted disingenuously, which is probably the best case scenario here with the Presidents figures.




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  2. john personna says:

    Our GDP is between six and seven times theirs so, yes, they spend more on roads as a proportion of GDP.

    Funny, that is the obvious measure to use, but you bury it even as you agree it is correct.

    That’s not too admirable.




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  3. Franklin says:

    Funny, that is the obvious measure to use, but you bury it even as you agree it is correct.

    If you consider the clearly marked fact that this is only being measured against our *federal* spending, no methods of measurement are obvious.




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  4. G.A.Phillips says:

    Packed down snow, blah, they spent the money on vodka……




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  5. john personna says:

    Look, the spending doesn’t mean a heck of a lot, but there is a straightforward way to look at it, and in that way it is factually correct.

    Any kerfuffle says more about the listener.

    Now, if you want to move on, just say “yeah, big deal, as a percentage of GDP Russia spends more … they probably have crap roads to begin with.”




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  6. reid says:

    I wonder how Ryan and the Republicans feel about spending at current (never mind higher) levels on roads and (haha) rail.

    Does anyone have any speculation about what would happen to the economy and unemployment numbers if the Republicans and/or TPers got their way with budget cuts? I’ve been avoiding the pundit and interview shows, but I don’t recall any of them being asked that question.




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  7. michael reynolds says:

    Actually the US and Russia are perfectly comparable. Both countries employ one guy to wave a flag, and one guy to lean on his shovel. Not sure which of them parks the unused grader by the side of the road.




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  8. Drew says:

    LOL

    Of course they do, when you start from majority dirt roads, you spend more.

    In addition, let’s let the liberals abandon their drivel about how taxation is required for “investment” in infrastructure; it goes from taxpayers to their neighbors……….




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  9. Davebo says:

    Honestly Drew, you can take my drivel when you pry it from my cold dead lips!

    And of course taxation isn’t required for infrastructure investment. Just look at the tax rates at the time Ike was building the interstate highway system!




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  10. ponce says:

    Oops, the spam filter ate my post, must be my link.

    Anyhoo,

    Obi Wan and Mordred wrote a great book about motorcycling around the world that contains some interesting descriptions of Russia’s “roads” called “Long Way Round.”




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  11. ponce says:

    And her’s a clip from the TV show of the same name: http://www.youtube.com/watch?v=cdgLHO787-0




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  12. Dave Schuler says:

    john personna:

    When you add state highway spending to federal spending U. S. highway spending was about $160 billion in 2008. Whether in absolute terms, relative to population, as a proportion of GDP, relative to land area, in miles laid, or any other reasonable measure, the United States out-spent Russia by a considerable margin.

    The only way you can believe otherwise is to compare all Russian spending to U. S. federal-only spending as a proportion of GDP. That is torturing logic and language.




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  13. anjin-san says:

    Hey, we built some bitchin’ infrastructure in Iraq. Liberals are such pussies. They actually think bridges should be safe and airports modern and crap like that.




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  14. PD Shaw says:

    According to Dave’s link at 14:20, Alaska “invests” the most on highways per capita and Rhode Island the least. Why is Rhode Island falling so far behind on infrastructure? There is an infrastructure gap and the winners will own the future.




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  15. mpw280 says:

    M.R. You know that isn’t true. It isn’t one to wave a flag, one to lean and one to park something so it can’t be used. It is always a party of 6 workers, one to work and five to supervise the one guy in the hole. Drive by any road site and you will see it is true, they never use 3 when 6 will not do the job better or faster. mpw




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  16. steve says:

    “Our GDP is between six and seven times theirs so, yes, they spend more on roads as a proportion of GDP.”

    Then how should we measure it if you do not think this the correct measure?

    Steve




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  17. anjin-san says:

    Well PD Alaska is slightly larger than Rhode island… it is also kind of a federal welfare preserve, but that is a tangent.




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  18. PD Shaw says:

    Steve, I don’t think you can make a comparison based upon spending; I think you would want to make a comparison based upon the finished product and keep in my local conditions like climate, population density and geography. Is there anything wrong with this sentence:

    Countries in Europe and Russia invest less in healthcare than we do.




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  19. john personna says:

    Are you doing Apples to Apples Dave? Spending at all levels in both systems of government?




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  20. john personna says:

    BTW, I think PD’s closest in that we should just look at the roads we have, and compare them to the roads we want, keeping in mind the opportunity costs of building those roads.

    Or worse yet, the opportunity costs of building all that high speed rail.

    I can let the Russia claim float by, because I don’t particularly care what the Russians do.




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  21. steve says:

    PD- Depends on where you are starting from. After many years of communism, Russia is way behind. OTOH, it probably is almost impossible to make direct comparisons. Better to decide what investments we really need, not dependent upon the spending of others.

    Steve




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  22. Tlaloc says:

    “When you add state highway spending to federal spending U. S. highway spending was about $160 billion in 2008. Whether in absolute terms, relative to population, as a proportion of GDP, relative to land area, in miles laid, or any other reasonable measure, the United States out-spent Russia by a considerable margin.”

    Are you including a PPP comparison or just a direct conversion from rubles to dollars? I’m not at all sure it would make the difference but it might. In addition are you sure your russian figures includes any possible local funding (if you are going to include local funding in the US column)? I’m not sure if Russia has any local government levels that do that sort of thing.




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