I pretty much agree with your analysis based on economic science, which practically or sadly, only deals with part of social phenomena and judgments at this moment.

Strength and competitiveness of a nation or a culture are determined by well-beings as well as the absolute number of its population. Putin wants Russia to be important, not just being rich, though richness partly contributes to importance. Russia needs to have enough people to matter in world affairs.

I don't think nationalism is something people can ignore when weighing nation-scale policies. However, I do believe nationalism can be analyzed via economic theory. It's not easy: Putin may feel insulted when someone compares Russia to Singapore.

Russia's low birthrate, high death rate and record incidence of HIV/AIDS infections portend that it may have to do something drastic between now and mid-century (the date mentioned by Becker) to keep alive its dream of being a global player.
For instance, could a Sino-Russian confederation result given the former's increasing need for oil and the latter's desire to remain a world power? More to the point, recognizing a limited number of future adult males given present low replacement rates, would China export child-bearing age females in order to create a greater number of future Russian adults?
Should Russia do nothing it runs the risk of continued independence by its confederates, an ever decreasing population, and--perhaps worst of all--global irrelevance.

Re: Apart from the effect on the dependency ratio, I don't think a country should worry much or maybe at all about a declining population. A declining population means less pollution and congestion and, as Becker also notes, a higher ratio of land to population--the Black Death in Europe in the Middle Ages contributed to a substantial increase in average wages as a result of the reduction in the population (by about a third--which is almost the reduction predicted for Russia by mid-century); and that wage increase, some economic historians believe, set the stage for Europe's subsequent economic takeoff. The effect in Russia would not be nearly so dramatic, however, because Russian population density is already low, although this is a little misleading because large parts of Russia are virtually uninhabitable.

I agree and I disagree. I agree that the impact of declining population on per capita income in the medium and long run in Russia is not negative. I disagree since the impact of declining population on Russia which has aspirations to (near) major power status in the world is negative.

First:

The issue of adverse selection seems to be glaring one in this case. It seems likely that the women most swayed by this proposal are not the ones Russia necessarily wants having more children. While one may argue that the money being offered is not enough to cover the total cost of raising a child into adulthood and therefore only those women who could afford the difference would be incented to have more children. However, I disagree, believing that women driven by financial hardship will be attracted to this program, without using the monetary benefit on behalf of the child. One should consider the correlation Steven Levitt found between abortion and crime rates and the issue of family stability at the heart of that analysis. Should we worry that not only might this program have only a nominal impact on the country's long term population decline but that it may create more severe social problems in the future?

Second:

"The broader point is that before Russia throws a huge amount of money (by Russian standards) at a problem, it should be careful to make sure that there are no better uses for the money."

I think this is a key point. Given Russia's issues with HIV and alcholism alone it seems there are other areas that funds could be directed to. However, attacking these problems may negatively impact the country's dependency ratio by increasing the longevity of its current population without necessarily impacting birthrates in the near term.

Finally:

While opening itself up to immigrants would undoubtedly help, the country is much too xenophobic at this point for that to be an option. Maybe Mr. Putin would be well served to play down nationalism and work at changing the population's attitude toward outsiders. While the United States is little better, Russia's recent attacks on homosexuals suggests the country is not a tolerant one.

Come on, you really think that Russians want Russia to become Singapore or Switzerland? Rich, but ultimately insignificant?

Success is measured in more than economic terms.

Although cynical of me to point it out, Russia faces the prospect in the near future of holding its far east with a total pop. of 100M against an expansionist (and expanding) China, pop. 1,300M. While devoid of people, Siberia is not devoid of natural resources. It seems clear to me that Putin's desire to reverse the country's population decline is grounded in geopolitical realities, not economics. When the Treaty of Nerchinsk was signed in 1689, Russia felt acutely its effects and sought to remedy this through a concerted effort to weaken China, and eventually, in the 19th c., through the Treaties of Aigun and Beijing, it succeeded in aggrandizing its position, receiving the lands on the left bank of River Amur from China, or so-called Outer Manchuria. Don't think it hasn't crossed the mind of some Russians that China may want the land back eventually. With its demographic problems, Russia will be able to offer little in the way of defense of its far eastern oblasti.

Old Russian joke (from 1993):

Optimist says: The future Russian currency is the dollar.

Pessimist says: The future Russian currency is the Yuan.

I agree. The Russians are worried about national importance, not just prosperity. Though at the moment, they seem in danger of attaining neither.

nice
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