Sly Finnish hicks’ new LPI

Russia at 99 has lost 9 positions in the World Bank’s Logistics Performance index.

LPI is measuring several of dimensions of trade — including customs performance, infrastructure quality, and timeliness of shipments — which are then summarized in one rating. So for example, by the parameter of infrastructure Russia has slumped from 77 to 94th line. The authors of LPI argue in the commentary to the report, that the downgrade is not due to the deterioration of the national infrastructure, but to the significant improvements achieved by other countries. So this year such countries as Uzbekistan, Ghana, Ukraine, Congo, Peru, Rwanda have outpaced Russia, also Macedonia, which, apparently, has invested in logistics infrastructure everything it earned on illegal migrants’ trafficking.

By the quality of customs services Russia was put as low as at 141 out of 160. For comparison in the previous rating in 2014 it took 133 line. In this regards the young state of Eritrea, Afghanistan – the world’s major manufacturer and supplier of heroin Afghanistan, Burkina Faso, and Albania are rated higher.

By ‘Tracking and tracing’ criterion Russia has gone down 11 lines to 90. And here it is placed below such countries as Nigeria and Kazakhstan, where, let us recall, Ukraine has lost its train, Pakistan, where armed convoys may cost shippers up to USD 3,000 per box, and Ukraine.

Kotka

Even in terms of delivery times, Russia’s rating declined 3 points from 84 to 87. Whoever works in this country, knows this is nonsense. Let us note too, that in this dimension Russia was rated below Moldova. The example of this small state is particularly noteworthy as an indication of the accuracy of the rating. The authors of the report argue that the distance to the nearest export-import seaport is 3,500 kilometers and that the average distance of ground delivery in the country is 1,200 kilometers. Yet the distance from Moldova capital Chisinau to the port of Odessa is 200 kilometers, and crossing the country from north to south is a little over 400 kilometers. Even if Moldova carried out its entire foreign trade via Hamburg, the distance to this German port from Chisinau is only 1,800 kilometers.

Screenshot of the LPI website about Moldova

This year, LPI’s authors quit evaluating the parameter of logistics cost. In earlier indices this parameter was calculated by restating the cost in national currency in US dollars. Over the past two years since the last index, as we know, national currencies of countries in such as Russia, Kazakhstan, Ukraine were seriously devalued. And obviously, by this parameter, the competitiveness of logistics in these countries would have increased 2 times as compared to Euro-states or the economies which are tightly tied to US dollar. And so it looks as if the parameter was omitted on purpose.

Such slyness Russians consider a trait specific for poorly educated hicks. If a professor in his science does such tricks – then so be it. However it suggests the report should not be treated totally seriously.

Let us too note, that although affairs in Georgia has taken a rather ugly look since the departure of Saakashvili, it is rather unlikely that it is a bad as going down to the 130th line. The same seems true about Kyrgyzstan’s plunging from 103 to 146.

Logistics performance index (LPI) is drawn up every two years by the World Bank since 2007. The head of the project is Dr. Lauri Ojala, Professor of Logistics at the Turku School of Economics, Finland. Early in his career in 1982 he was with the Finnish Border Guard working as an anti-submarine warfare officer. In 2004-2006 he was a Member of the Board of Finstaship, a State-owned Enterprise operating the Finnish icebreaker fleet. Presently a Board Member of a state-owned FinFerries Ltd. It might be that having started watching soviet submarines he blames the misfortunes of these companies on Russia which makes him feel bitter and spiteful.