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Leonid Bershidsky

You Say Debt, I Say Tax Dodging

New tax avoidance strategies are making companies and entire economies look more heavily indebted than they actually are.
So good, even regulators can't tell the difference.

So good, even regulators can't tell the difference.

Brent Lewin/Bloomberg via Getty Images

The world is awash in debt -- but a lot of it isn't real. The culprits are the big accounting firms that have been mass-marketing tax avoidance strategies to their clients. The result is that official statistics have become so skewed that it's almost impossible to draw intelligent conclusions from them.

According to the Russian central bank, the country's companies and banks owe $128.2 billion in foreign debt -- a threateningly large number, about an entire quarter's worth of Russia's exports. Finance Minister Anton Siluanov, however, says actual repayments should fall in the $60 billion to $70 billion range. According to Siluanov, about one-third of Russia's external corporate debt stems from so-called "intragroup operations."