It should come as no surprise that the macroeconomic data presented by many different governments is made up.
Cooking macroeconomic data is done in even the most advanced democracies, but the degree to which numbers are made up is far greater in less developed countries. These practices seem to be part of a perfectly planned strategy to gain power and worldwide influence. And some would argue it is working.
It should come as no surprise that superpowers such as China have spent years trying to extend their area of â€‹â€‹political and socioeconomic influence across the globe. China specifically hasÂ political-military aspirations as well. For example, these other type of aspirations can be seen in its expansionist policies in the China Sea. It has increased its military presence in the area on a continuous basis, even going so far as to create new artificial islands in an outpost where it has located military bases.
In addition, it’s no secret that China has taken over a large part of infrastructure development in Africa,Â in exchange for contractually securing a supply of certain raw materials. In Latin America, Chinese products have also dominated the market, as well as generally in countries where purchasing power is low and where “cheap” is often necessary. And as in the case of Africa, in Latin America the commercial landing of China has been accompanied by investments and an insatiable appetite for the region’s natural resources.
The communist giant has seen how it can conquer the world by playing the capitalist game outside its borders, while keeping an iron grip on the economy inside its borders. China has been invested in continuing to expand its productive and economic capacity, winning more and more influence in a world that, like any superpower worth its salt, it aspires to dominate.
From Russia with (cyber) love
Russia is emerging once again as a superpower, after years of decline in numbers and socioeconomic influence at the end of the Cold War.
The darkest days of the post-communist era came with the economic shock that Russia suffered in 1998 with the infamous Ruble Crisis that placed its economy, heavily dependent on black gold and gas, on the verge of collapse. Russia has (arguably) since learned that if it wanted to remain strong in a world dominated by capitalism, it must play its cards well in a game that is governed by capitalist rules.
Russia has been dedicated to creating other types of unconventional weapons, exerting social influence even on the most consolidated democracies. This has been demonstrated after scandals such as the way in which the Brexit campaign was articulated and here in the US with our racial tensions, with the goal of social destabilization.
Russia has always been aware that although it must abide by the same capitalist rules as the Chinese, its strategy must be different when it comes to playing its cards. They are aware that their socioeconomic potential differed from that of China. It has therefore relied much more on cyber media and online strategies to exert its influence on the rest of the world.
The strategies developed by China and Russia converge at their common border in the Amur River
Although there are obvious differences, some of which we just mentioned, the truth is that, ultimately, both superpowers have ended up getting their way and, by playing capitalism, they have gained great influence in recent years across the globe, while essentially maintaining a dictatorial economy.
Both countries are aware that one of the economic weapons at their disposal are the GDP reports that they publish. These figures not only translate into the relative importance conferred by the capitalist system in a global context, but they were also used to spearhead to break through the intricacies of the economies of the entire planet. Do you want capitalism? We’ll take two (half empty) cups.
The reason why cooking data gives real power internationally in capitalism
The crux of the matter is in the debt ratings. The rating agencies strongly link the credit ratings of the different countries that it assesses to the macroeconomic performance of said countries. If the ratings are good, access to worldwide credit is much cheaper, and they can be financed at a much lower cost than they otherwise would-theoretically.
The end result is artificial growth,which leads to economic strength and a liquidity that allows a country to buy assets and companies all over the world, making the economic conquest a reality supported by imaginary figures.Â Strategic competitors are also bought, infrastructures are financed in countries in exchange for preferential treatment at other levels and influence capacity, relying on productive capacity to gain more market share, as well as investment and innovation in new disruptive technologies in order to position themselves even better to lead the future.
The data that show how the macroeconomic figures of certain countries don’t add up.
According to the Washington Post, a new analysis of satellite data collected over the last quarter of a century has revealed that Russia, China and other authoritarian countries would have been publishing “official” figures for annual GDP growth that would be between 15 and 30% higher than the real ones. It also revealed that estimates of fraud are especially strongÂ in the years preceding elections.
The new indicator that has been analyzed is a satellite imagery system that tracks changes in the nightlight level within a single country and between different countries over the years. The development and economic activity is what lies behind the explanation that, for example, justifies that, in the Korean peninsula, when the sky darkens South Korea shines brightly at night, while North Korea is virtually sunk in deep darkness.
It is true that satellite images can be manipulated, but their veracity can easily be contrasted by other countries with their own satellite images: the truth is latent, measurable and unalterable for all those who have the capacity to capture them from a bird’s eye view.
The relationship between nocturnal light intensity and economic development has been studied for some time, andÂ in 2012 a research study was published that closely correlated both variables. One of the main hypotheses cited by the study is that the consumption of almost all goods requires light at nightfall: if the incomes of citizens and companies increases, the luminous capacity used per capita should increase as well, both in consumer activities and investment. In short, a luminous increase of 10% is correlated with a 2.4% increase in GDP.
Other conclusions of the study are that the differences in the GDP report between “dictapitalist” countries and consolidated democracies can not be explained by structural factors such as massive urbanization, the composition of economic indicators, access to electricity supply or other classic reasons.
What can be done? It’s one thing to discount GDP figures or view them with a skeptic eye, but the real harm is that China and Russia continue to expand their influence globally at a rapid pace, because they have access to cheap capital as a result of their cooked books. It’s quite another to attack them politically and/or militarily. So far, this seems like a line that no one is willing to cross.