Ben Aris in Moscow -

The people at The Economist don't like Russia, but on the eve of the Sochi Winter Olympics, the latest cover, "The Triumph of Vladimir Putin", takes the biscuit for the weekly's worst ever anti-Russian rant.

Those who cover and invest in Russia have long ago cancelled their subscriptions to The Economist; in Moscow at least it has a reputation for bias and selective reporting that makes its coverage next to useless. However, the weekly surpassed itself this time: nearly every paragraph of the leader is full of mistakes, half-truths, sloppy reporting, omissions and blatant fact twisting.

That is not to say there is nothing wrong with Russia: there is a lot wrong with Russia. But for some reason Russia has a special place in the minds of most western journalists. Some that have suffered from the mindless bureaucracy and old-school politicking, like Luke Harding of The Guardian and more recently David Satter, formerly of the Financial Times, have an understandable personal beef with the Kremlin. But The Economist has an institutional hatred of the country, which makes it incapable of balance or objectivity when reporting on the country.

Personally I am becoming increasingly worried by rising numbers of this sort of piece, as it is dangerous. Russia is facing a gamut of really nasty problems, but the atmosphere of hate and ridicule that has crept into most of the "reporting" can only generate more misunderstanding. Relations with the West are already so strained that there is even talk of a new Cold War brewing.

Russia's expansion of its military capacity is partly, I would argue, down to the constant haranguing Moscow receives from the bulk of the western press. Russia's new media tsar Dmitry Kiselyov is right when he told his staff at Ria Novosti this month that "Objectivity is dead!", as it applies as much to most of the Russia coverage in the western press as it does to the Russian media.

Let's select a few examples from this piece, but as I said I could pick nearly every paragraph apart.

The piece opens with the Olympics that start this week in the "unsuitable subtropical resort" of Sochi, which sets the tone. Sochi is about as "unsuitable" for a skiing event as California or Granada in Spain, which also both have skiable mountains within easy driving distance of hot beaches.

But, more seriously, the newspaper points out that the widely cited $50bn the Kremlin has spent on getting Sochi ready for the games is "four-times more than spent on the London jamboree." The implication is that some $30bn has been stolen during the development of Sochi.

Of course, there is a lot of corruption in Russia, but the big difference between getting London ready for the summer Olympic games and getting Sochi ready is that London came with hotels, roads, airports, restaurants, accommodation, services and even a few stadiums pre-installed. The Kremlin said the pure Games-related spending was closer to $5bn-7bn, but these comments have simply been ignored by almost everyone.

The point here is that the Kremlin is using the Sochi games as a template for badly needed regional development. The story is the same with the 2018 Fifa World Cup, where the Russians bid $20bn in sports-development for the competition, but just the high-speed rail links between the 11 European cities will cost an estimated $60bn.

In all fairness, you can justifiably argue there was a lot of stealing at Sochi, but the piece goes on to say: "And, as the Sochi costs indicate, corruption is endemic."

Note: "indicate" not "show". If you want to "show" how bad the corruption is, then where better to go than the highly respected Transparency International's annual "Corruption Perspectives Index", which used to be widely cited as "proof" of Russia's corruption. The trouble is that, rather embarrassingly, the latest survey released in December showed Russia going from the "most corrupt country in Eastern Europe," to the "least corrupt." This even happened close to International Anti-corruption Day on December 9, yet none of the western press bothered to report it. Of course, Russia remains very corrupt in 127th place on the list of 177 countries, but the Kremlin's growing anti-corruption drive (something else that is barely reported and not even mentioned in The Economist leader) seems to be making some headway.

The piece goes on to complain about Russia's obvious resurgence as if that were something bad; Putin had a stellar year in 2013 as the recovering economy began to translate into growing political muscle on the international stage. "At home, [Putin] has seen off the huge protests... Lacking any serious challenger, he has felt confident enough to free both Mikhail Khodorkovsky, an oligarch whom he jailed in 2003, and the Pussy Riot protesters."

Firstly, what exactly does "seen off" mean here? Rather than sending in the elite riot police to beat up protestors, as Ukrainian President Viktor Yanukovych has just chosen to do, Putin is enjoying in the latest polls from the independent Levada Centre a popularity rating of 68% - his highest level since 2002. This has probably a lot to do with that resurgence of Russia - another fact that is conveniently omitted. The opposition has not been "seen off" but fizzled out, thanks to infighting amongst its potential leaders, a lack of a clear platform and Putin's ongoing strong performance with the economy and on the politcal stage.

Secondly, the connection between Khodorkovsky's release and domestic politics is simply nonsense. Letting Khodorkovsky out of jail had nothing to do with Putin's domestic political challenges and everything to do with improving Russia's international investment image. Khodorkovsky is widely despised among ordinary Russians.

Putin also apparently "saw off" western ideas in its argument over Syria. "Putin has used his UN Security Council veto to see off Western ideas of military intervention in Syria, instead brokering a deal on chemical weapons and sponsoring a Syrian peace conference. His brutal ally, Bashar Assad, remains in power."

Now the bias is becoming blatant: why should a sovereign power accept ideas simply because they are "western"? Right or wrong, Russia's foreign minister, Sergei Lavrov, has been very clear on Russia's position: Russia is against imposing regime change on countries, because if you look at the examples of Iraq, Afghanistan and Libya (Iran soon?), the West's idea of military "intervention" appears to put the emphasis less on "intervention" and more on "regime change by force". Russia's position on this is obvious: someday someone in the West might decide that Russia is a "brutal ally" and decide it has the right to change its regime too.

But the main thrust of the pieces is the standard rubbishing of Russia as a petro-economy. "[Russia's] resurgence is limited by a corrupt, state-directed economy that seems to be condemned to stagnation... This achievement was founded almost entirely on oil and gas prices, which have climbed fivefold since 1999."

Firstly, this piece already admits that Russia is resurgent so what seems to be happening is not stagnation, but resurgence.

Secondly, oil prices have gone up since the 1990s, but then so has the price of coffee in London. In real terms, the price of oil is not that far off the long-term average of $25 a barrel now that it was under Yeltsin.

More confusingly, when Putin took over oil was at $10 a barrel, yet in 2000 the economy grew by 10%. And it continued to grow by around 4-5% until 2005, and only then did the price of oil take off, climbing to a high of $150 a barrel. So if Putin's recovery is entirely due to oil, how is it he managed to produce growth with the same oil prices that Yeltsin had? There was no growth at all in the 1990s.

Clearly something else is going on. And equally clearly it has to do with the devaluation and re-monetisation of the Russian economy due to the 1998 crisis: ironically, all economic topics that one would have thought a newspaper called The Economist would have been all over. Instead, the newspaper takes the boilerplate position that Russia's economy is only about oil. "Dependence on energy exports is greater even than under the Soviet Union: they now account for 75% of the total, against 67% in 1980."

Journalism 101: "when citing statistics, you need to attribute them to the valid source so they can be checked."

The same point can be made about predictions for this year's growth of the Russian economy.

"Now that energy prices have stopped rising, best estimates of GDP growth have been cut to below 1.5% in 2013 and to 2% in 2014."

Here the author appears to be simply making up statistics to suit his purposes.

The last number I have is from the Russian customs service saying that oil accounted for 49.4% export revenues and another 11.7% for gas in 2013 - a total of 61.1% of export revenues, which is less than the "Soviet number" (wherever that came from).

Likewise, 2% growth predictions are not the consensus view and actually well below every one else's estimates. Investment banks are predicting growth in a range from 2.4% and 3.5%, with the official Ministry of Economy predicting 2.8%. Indeed, the World Bank is "mildly optimistic" and predicts 3.1%. This is actually better than the World Bank's prediction for Poland (1%) and Estonia (3%). Again The Economist seems to have picked the very lowest number it could find, without citing a source, and present it as if it were Gospel. And even if the 2% number is right, Russia would be preforming on a par, and even slightly better, than the rest of Europe.

But put the superficial argument about statistics to one side for a moment, as clearly oil and gas does play a very important role in Russia's economy. But the implication here is that the entire economy is dependent on oil like in countries such as Saudi Arabia and Turkmenistan.

Russia's total dependence on oil is a myth. The statistic that is missing here is the fact that oil and gas accounted for about 15% of GDP in 2013, whereas the service and retail sector made up well over 50%. Russia struggles to export anything other than raw materials, as it suffers from a mild case of the "Dutch disease" that have driven up wages to the point it can't make things like cars and be competitive, hence the government's emphasis on developing the high-tech sector - one place Russia still can be competitive thanks to its undeniable intellectual capital.

But just as clearly, the cheap energy resources reach further than that 15% of GDP: just how important is oil to Russia's economy really?

A study by the highly respected Bank of Finland's Institute for Economies in Transition, released in the middle of last year, tried to answer this question. If you adjust the share of oil in GDP for the secondary effects, that number becomes 25% of GDP.

The study concluded: "When adjusted to reflect the oil and gas sector's actual contribution to GDP, Russia is on par with Norway. This is much less than traditional oil states such as Saudi Arabia, which generates about half of its GDP directly from the oil and gas sector."

Lets just pause for a moment and take that in: Russia's dependence on oil and gas is the same as that of Norway.... not Turkmenistan or Saudi Arabia, but Norway.

If you want to have a serious discussion about the role of oil in Russia's economy, then you are better off looking at the "non-oil federal budget deficit" - another economic topic ignored by The Economist - the deficit Russia budget would have if you suddenly magic'ed the oil away.

In the boom years, Russia briefly ran a non-oil surplus: in other words, the real economy was producing enough tax revenues to pay for everything, before a penny of oil tax revenue was received. The 2008 crisis saw the non-oil deficit blow out to some 13% of GDP as the state poured money into the economy. But compare that with the 1990s where the non-oil deficit (at $25/barrel oil) was well over 25%. In simple terms, this means that Russia's economy was true dependent on oil under Yeltsin, but under Putin it briefly broke its addiction only to relapse following the 2008 collapse.

If you are still not convinced, then another standard indicator to look at is the state's spending as a share of GDP. Last year, Russia's public spending was only 32% of GDP compared with that basket case of centralized autocratic control, the UK, which spent 44.4%, according to the HM Treasury.

I could go on, but will finish with this statement: "The American entrepreneurialism that could never thrive in [Putin's] kleptocracy."

Here the curtain comes down and shows the author never had an intention to write a fair and balanced leader. Russia is still in transition, but a number of world-class, extremely valuable companies have emerged under Putin's stewardship. Yandex? Now the most valuable internet company in Europe that is out googling Google on things like its map service. And anything in the telecom sector. True, the number of these companies is limited, but to suggest that "entrepreneurialism that could never thrive in [Putin's] kleptocracy" is demonstrably false.

More generally, Russia's recent successes in carrying out reforms (albeit at a slow pace) are also completely omitted. Russia has risen from 120th to 92nd in the World Bank's Doing Business index; it was the world's "best tax reformer" in 2013, according to a recent PriceWaterCooper survey; and Moscow was ranked in the top three most attractive retail locations in a survey last year from Jones Lang LeSalle.

Indeed, far from being a basket case, Russia's fundamentals are a wet dream for most European central bankers. Russia is in a league of its own if you compare debt (one of lowest in the world), budget deficits (almost none), currency account balance (positive) or unemployment (20 year record lows) with that of any country in Europe. But most compelling of all is in 2013 Russia was in third place in the UN's foreign direct investment ranking: FDI inflows to Russia jumped by 83% to $94bn form the year before. The trouble is, all these numbers are a bit awkward and don't really fit into this leader's narrative - so they were just left out. That was easy, eh?