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Migrants seeking work in the trade, house maintenance and service sectors will soon have to prove they can speak at least basic Russian. The requirement was added to the first reading of the bill on the legal status of foreign citizens approved by the Duma last week. The measure is designed to help migrants understand their rights as well as to remove the language barrier. Statis-tics show 20pc of migrants from Central Asia do not speak Russian and 50pc can-not complete a simple form.Meanwhile, Moscow’s new culture depart-ment head Sergei Kapkov will launch the Museums for Migrants programme next year, reports The Moscow News. Run in conjunction with the Federal Migration Service, working migrants will be taken to the city’s museums with the aim of edu-cating them in Moscow’s cultural values.

The Russian federal budget for 2012 to 2014 has been passed by the State Duma last week. Spending in a range of areas has been promised with social expenditure given top priority, closely followed by national defence and law enforcement. Wage rises for public sector staff are detailed, too.The budget is based on projections that GDP will rise by 12.8pc over the period going up to 72.493 trillion roubles (£1.5trn) by 2014. The acting finance minister, Anton Siluanov, said that the budget is balanced at an oil price assumption of $100 per bar-rel. Some analysts say it does not factor in the possibility of a second recession.

Migrant workers must speak Russian

COmmENT & ANALYSIS

The Iran endgameRussia seeks to avoid a new war in the Middle East

Prime Minister Vladimir Putin has approved plans for a $3.6bn (£2.3bn) pipeline to new Arctic oil fields that could produce a size-able share of Russia’s output by the end of the decade, reports The Moscow Times. The state oil pipeline monopoly Transneft will complete the Zapolyarye-Purpe link by 2017, according to a government decree. Lukoil, TNK-BP and Gazprom Neft will use the pipeline, with a capacity of 45 mil-lion tons a year, to carry oil from fields in Yamal that they plan to develop.The fields could produce at least 74 million tons by 2020, according to Nikolai Tokarev, Transneft’s president, accounting for around 15pc of Russia’s current output of 500 mil-lion tons. The 300-mile pipeline will be linked to Russia’s pipeline network, allow-ing exports to Europe and Asia.

Pipeline will take Arctic oil to Russia

TURN TO PAGE 6

United front: the three presidents,Nursultan Nazarbayev, Alexander Lukashenko and Dmitry medvedev

The creation of the Common Economic Space (CES) has begun. On November 18, the presidents of Russia, Belarus and Kazakhstan signed an agreement for the establish-ment of a central integration body for the three countries, the Eurasian Economic Com-mission (EEC). The EEC will replace the Customs Union, which will cease to exist on July 1, 2012, and will be a supranational body for governing the inte-gration effort. The commis-sion is due to start work on January 1, 2012. The Krem-lin has said that the EEC will be “a management body for integration processes in the format of the Customs Union and the CES”.The structure of the EEC is similar to the European Union, with its European

A new Eurasian union is born International trade Belarus, Kazakhstan and Russia form an alliance

Council and European Com-mission. The EEC will have two tiers. The upper tier, its council, will include the dep-uty prime ministers of the three countries, with First Deputy Prime Minister Igor Shuvalov representing Rus-sia. The lower level, the board, will be the EEC’s main work-ing body, with decision-mak-ing powers over customs du-ties as well as sanitary, veterinary, and immigration

The new Eurasian Economic Commission brings new business opportunities and increased financial security, and paves the way for the Eurasian Economic Union.

EkATERINA SHOkHINAExpERT MaGazinE

Rocket men: Progress in the stalled ABm talks may have to wait until after elections in Russia and the US

After unsuccessful talks with President Barack Obama in Honolulu on the deployment of the US anti-ballistic mis-sile system (ABM) in Europe on November 23, President Dmitry Medvedev issued his toughest statement in his four years as president.The US says the ABM strat-egy in Eastern Europe has been prompted by the grow-ing threat Iran poses to the European allies, and that Russia has not the slightest reason for taking any mili-tary counter-measures. Mos-cow wants Washington to provide at least legal guar-antees that the American ABMs near Russia’s borders will not be targeted at Rus-sia. But according to unoffi-cial reports, Mr Obama made it clear that neither he nor any other US president could ever provide any legal guar-antees.In response, Mr Medvedev warned that if the US and Nato do not heed Russia’s warnings, “Russia will deploy modern offensive weapons systems in the west and south of the country, thereby en-suring its ability to take out any part of the US missile defence system in Europe.”He listed a number of coun-ter-measures that would be taken, including: deploying early-warning radar and Iskander missiles in Kalin-ingrad; reinforcing the pro-tective cover of Russia’s stra-tegic nuclear weapons to develop Russia’s air and space defences; installing ad-vanced missile defence pen-etration systems and new highly effective warheads; and developing measures that can disable missile de-fence and guidance systems.

IGOR VYUzHNYRussia now

Experts have been reading between the lines of President Dmitry medvedev’s announcement on retaliating to the US missile strategy.

medvedev blasts US plan Defence The us anti-ballistic missile system in Europe is proving a thorn in the side of us-Russian relations

CONTINUED ON PAGE 3

control. It will also oversee the allocation of industrial and agricultural subsidies. Viktor Khristenko, Russia’s industry minister, is the ap-pointed head of the EEC. “We have taken a new and very powerful step on the path to forming a Eurasian Economic Union (EEU), an alliance which will undoubt-edly determine the future of our countries,” President Medvedev said, adding that

the agreement allows the three countries to establish the CES and then the EEU, possibly before 2015. The EEC leaders are keen to avoid the mistakes of the Eu-ropean Union. The Russian president believes that the EEU will avoid the problems of the eurozone because its members, “starting out from a more or less level econom-ic playing field”, share com-mon history and have rap-idly growing economies – meaning they are less like-ly to become a fragmented conglomerate. Nursultan Nazarbayev, the Kazakhstan president, said “the union of three” will be-come “the most powerful” al-liance, with “the combined GDP of the three countries approaching $2trn.” Alexander Lukashenko, the Belarus president, assured the audience at the signing that “these documents will be ratified as soon as possi-ble and will go into law in our country.” Experts see the EEC’s establishment as an

The Russian Ambassador to the UK, Alexander Yakov-enko, has written a letter to the Duke of Cambridge praising his role in saving the lives of two Russian seamen, following the sinking of the cargo ship Swanland in the Irish Sea off the Llyn penin-sula in North Wales.Mr Yakovenko wrote:“Your Royal Highness,All day long we were anx-iously following the rescue operation searching for Rus-sian seamen from the sunk Swanland vessel.“We know that you took an active part in the rescue and that the two seamen were saved thanks to your selfless effort under the bad weath-er conditions.“Let me express to you and

mission sailors pulled from sea

Gratitude has been expressed for British air-sea rescue efforts following the sinking of the Russian-crewed cargo ship Swanland in the Irish Sea.

your colleagues my deepest gratitude for saving the lives of the Russian citizens.”In his role as an RAF Search and Rescue helicopter co-pi-lot, the Duke was part of a crew which flew from their base in Anglesey in response to the Swanland’s distress call in the early hours of Sun-day, November 27. The operation involved four helicopters and seven coast guard vessels, but their work was hampered by severe weather conditions. Two of the eight all-Russian crew were pulled from the water clinging to liferafts; a third man was recovered from the sea but pronounced dead. The 265ft Swanland was car-rying 3,000 tons of limestone from Llanddulas to the Isle of Wight when it was hit by what the men described as an “enormous wave”. At the time of going to press, the operation to find the five men still missing was carry-ing on, although hopes for their safe recovery were beginning to fade.

Russia says ‘Thank you’ for rescue

PAVEL SmIRNOVspEcial To Russia now

former chief of staff of the strategic missile forces, says the new ballistic missiles Russia is building have the potential to penetrate any anti-missile defence for the next 20 to 30 years. Some analysts believe Mr Medvedev’s statement is a signal of displeasure, but one that invites the US to keep talking. Some military ex-perts say it is about impress-ing voters. Major General Vladimir Dvorkin, chief re-search fellow with Imemo, says a compromise will be agreed after the Russian and US elections.But that view was challenged

by Russia’s permanent rep-resentative to Nato, Dmitry Rogozin. “The issues connect-ed with the country’s strate-gic security cannot be packed into matters of electoral ex-pedience,” he said.Washington’s reaction to Mr Medvedev’s statement has been relaxed. Tommy Vietor, the White House spokesman, said the US administration was still seeking co-opera-tion with Russia, but the de-ployment of ABMs in Europe would go ahead. But political scientists think Mr Medvedev’s announce-ment will irritate the US. “Obama has long been

yet have new weapons. The idea of deploying Iskanders in Kaliningrad, an enclave surrounded by Europe, is not new either. The experts do not believe that Russia is ready to with-draw from Start. Russian strategic forces are ageing and are being decommis-sioned. They are already down to the level at which they were to be reduced, Alexei Arbatov, head of the Russian Academy of Scienc-es’ Institute of International Economy and International Relations (Imemo), told The Moskovskie Novosti. Colo-nel-General Viktor Yesin,

Mr Medvedev also said that Moscow reserves the right to withdraw from Start (the Strategic Arms Reduction Treaty) s igned by Mr Medvedev and Mr Obama in April 2010.But experts say all of the measures that Mr Medvedev has threatened to take are either already in place or due to be introduced. For example, the Voronezh-DM radar is already being built near Kaliningrad and due to be working before the end of the year. And the aer-ospace defence system (VKO) is formally already in place, although VKO forces do not

touting the reset of relations with Russia as the key achievement of his foreign policy and has defended Moscow before Congress. Now the Kremlin has dealt a blow to its partner and, what is more, it has done so at the beginning of the pres-idential race”, Fyodor Luky-anov, editor-in-chief of Rus-sia in Global Affairs, told Kommersant. He added: “That provides the Republi-cans with more ammunition against Russia: Putin is com-ing back and Moscow is en-gaging in sabre-rattling again. Obama has nothing to trump it with.”

Budget gambles on oil price stability

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02 most readRussia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_noVember 29_2011politics & society Engaging in the sport of politics

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The parliamentary system of modern Russia is not yet 20 years old. Founded in 1993, it copied some features from more established democra-cies, including Britain, so the parliamentary structures have some similarities. But while in the UK, the mon-arch signs Bills passed by a bicameral parliament into law, in Russia this is the task of the president.There are differences of opin-ion as to how to describe Russia’s government system formally. When Alexei Kudrin resigned from his post as fi-nance minister last October after a row with President Medvedev, the president as-serted his authority. “We have a presidential rather than a parliamentary republic,” he said. “We have a government that implements the presi-dent’s policy. Whoever doesn’t agree must step aside.”According to Valeriy Zorkin, chairman of the Constitu-tional Court, a more precise definition is that Russia is a mixed presidential and par-liamentary republic.

elections Next week, Russians elect deputies to the Duma, the lower chamber of parliament. We look at the parties and how the political system works

The Duma is the lower house in the Federal Assembly. Its elections are decided by pro-portional representation on the basis of party lists. In the past, independents could run, too, but this is no longer al-lowed. The incumbent ad-ministration and the oppo-sition have argued over the threshold allowing parties to win seats. Initially a party

had to get at least 5pc of the popular vote to get into the Duma, but this was increased to 7pc (in order to prevent what the pro-government majority believes to be “in-capable” parties from win-ning parliamentary office). But the 5pc threshold will return for the next election.The Duma, which convened for its last session last week, consists of 450 deputies. The pro-government United Rus-sia party had a majority of 70pc. The Communists, the main opposition party, had around 13pc of the seats. The Liberal Democrats (in real-ity, a nationalist party) and A Just Russia (the socialists)

had less than 9pc each. The new Duma will meet as early as the end of Decem-ber and will sit for a five-year term. Previous parlia-ments sat for only four years, but the current deputies have extended the term “in the in-terests of stability”.Like any other parliament, the main task of Russia’s State Duma is to pass laws. Since Russian democracy is still young and lacks an es-tablished legal framework for its society, the deputies have to consider a lot of bills. This year, the Duma looked at a monthly average of 100 bills in first, second, or third readings.Although the Duma Speak-er Boris Gryzlov once said that “parliament is no place for discussion”, at times the debates became very heated, especially over economic or social bills. The disagree-ments were driven by both political factors, and by spe-cial interests pushed by lobby groups. But representatives of different parties tended to agree on foreign policy. It is safe to assume that the new Duma will focus its at-tention primarily on passing laws aimed at economic di-versification, and reducing the country’s dependence on exporting energy and other natural resources.

even calling for the dissolu-tion of Nato.Duma deputies have a lot of responsibilities besides the passing of legislation. For ex-ample, they can approve or reject the candidacy of the prime minister nominated by the president, and even im-peach the president. Back in the Nineties, the Communists attempted to use this power twice in order to get rid of Boris Yeltsin.However, the president also has a power he can use against the Duma: he can disband it if it rejects his can-didate for prime minister three times or passes a no- confidence vote in the gov-ernment twice within three months. Even so, the Duma cannot be dissolved during the first year of its term.

will any new parties make it into the duma this year? the electorate will decide this sunday when they cast their votes.

Vladimir stepanoVspecial to Russia NoW

helen dupuyspecial to Russia NoW

“We need to conduct a new industrialisation of our coun-try”, Mr Gryzlov said, describ-ing one of the tasks facing the new parliament. He added that modernisation should also continue in the areas of education and health care, with a number of im-portant bills to be passed. That said, investment in the hi-tech sphere must still al-most exclusively come from oil and gas revenues, so the country’s energy producers are unlikely to suffer from any new legislation.It is also possible that the Russian parliament might become more hawkish in its attitude to foreign policy. All the parties likely to be rep-resented in the Duma next month want to see a “strong Russia”, with the Communists

hold on to your seat united russia: a modern-style ruling partyleaDeRs: Vladimir putin, dmitry medVedeV

membership: 2,009,937 regional branches: 83Established on December 1, 2001 as Unity and Fatherland – United Russia. The party won 64.3pc of votes in the 2007 parliamentary elections and has 315 of the 450 seats in the State Duma. It also controls regional parliaments and local elective bodies.declared priorities United Russia’s main goal is the modernisation and reform

of the economy, as well as improvement of the investment climate. These reforms would enable the party to fulfil its promises of better health care, education and pensions. To fight corruption, the party intends to introduce public scrutiny of all government initiatives that directly affect material rights and civic freedoms. Its electoral programme promises to strengthen the judicial system, making it more independent and transparent. The longer-term priority of “an independent and reasonable foreign policy” involves the creation of a Eurasian Economic Union, an association of former Soviet republics.

the liberal democratic party: the oldest opposition party

leaDeR: Vladimir zhirinoVsky

membership: 185,573 regional branches: 83Set up in 1990, the LDPR rejects Communist ideology and, despite its name, is on the far-right of the political spectrum. Its rhetoric is unashamedly nationalist. In the 2007 elections, it won 40 seats in the Duma (8.4pc of the vote).declared priorities The LDPR is critical of the existing world order in general, and the Russian political system in particular. It divides the world into

three groups: the first includes the United States, the UK, and their allies, which it says regards the second group – which is made up of Russia, China, India and most Asian and Latin American countries – merely as providers of resources for hi-tech industries. The third group consists of African countries, which it claims “have no place in the concept of the world order”. The LDPR believes that the main mistakes made by the Russian authorities are: engaging in partnership with the West, compromising on international issues, and hoping that “the market will put everything right”.

yabloko: the democratic opposition

leaDeR: sergey mitrokhin

membership: 54,911 regional branches: 75The party was officially registered in 2002, but has been an electoral bloc since 1993. It advocates a socially orientated market economy, the sanctity of private property, competition in politics and economics and a strengthening of democratic institutions. It consists of several factions, which are essentially

human-rights movements, and co-operates with environmental, trade union, and other non-govern-mental organisations. It has had no seats in the Duma since 2003.declared priorities The party’s main agenda is to fight the influence of bureaucrats and big business. It wants to ban businessmen and their close relatives from holding government office, and make the justification of actions by Stalin and the Bolsheviks a punishable offence. Much of its programme is devoted to civil rights. It believes that Russia must guarantee the security of neighbouring states, promote co-operation with Europe and be more active in international organisations.

the communist party: back to the ussr

leaDeR: gennady zyuganoV

membership: 554,244 regional branches: 81The main opposition party held its first constitutional congress in February 1993 after a three-year ban on Communist activities in Russia. It considers itself to be the legal successor of the Communist Party of the Soviet Union (CPSU) and espouses the same ideology. Most of its supporters are nostalgic about the Soviet era but it also has some support in other protest circles. It won 11.57pc of

the vote in 2007 and holds 57 Duma seats.declared priorities Its main foreign policy priorities are to enhance the role of the UN, limit the influence of Nato (and eventually dissolve it), and bring the countries of the former Soviet Union closer together. It backs the Kremlin’s commitment to modernising the army, which “must be strong enough to repel any invader”. Its main economic aim is to end “the destructive sway of the wild market” by nationalising key sectors of industry, and achieving the free distribution of land for agriculture. The Communists would also like to carry out a tax reform that favours the poor.

Just russia: ‘the left foot’ of the two-party system

leaDeR: sergei mironoV

membership: 414,558 regional branches: 83The party was formally set up in October 2006, bringing together several left-of-centre and patriotic political organisations. The idea of the merger came from the Russian president’s staff, who thought there should be a fully fledged two-party system. In early 2010, the party signed an agreement with United Russia for the formation of a coalition, yet co-operation never got off the ground

and, in the summer of that year, Just Russia announced its opposition to the governing party. Just Russia holds 38 seats in the Duma and won 7.74pc of the votes in the 2007 elections.declared priorities The party promises to build “21st-century socialism” in Russia by blending socialist ideas with universal democratic values. It advocates reform of the political system, notably the direct election of governors (who are now in effect appointed by the Russian president) and stronger local government. The party backs the Kremlin’s plans to modernise the economy, but wants the state to play a stronger role and stop privatisation and the movement of assets to offshore zones.

patriots of russia: left-of-centre nationalists

leaDeR: gennady semigin

membership: 86,394 regional branches: 79The party was created in 2005 through a merger of several moderate left-wing and patriotic political organisations. The Patriots of Russia’s programme calls “for the unification of all the opposition forces in the country on the basis of patriotism, proceeding from socialist, social-democratic and centrist views”. The party gained less than 1pc of the votes in the previous elections and has

so far failed to make it into the Duma.declared priorities The party’s economic strategy is based on the nationalisation of “illegally priva-tised” industries. Its main political task is to return “to the principles of democracy and a rule-of-law state”, as well as introducing broader rights for the regions. The main social goal is to provide Russians with the same guarantees as those enjoyed by their Western European neighbours. The Patriots of Russia think Russia should not be in a hurry to join the World Trade Organisation.

right cause: on the road to the european union

leaDeR: andrei dunayeV

membership: 64,022 regional branches: 77This pro-business liberal party was established in 2008, when several political organisations with shared ideologies formed an alliance. It says: “The party considers its social base as consisting of independent-minded free citizens who have renounced the nanny state idea.” Before the start of the 2011 election campaign, billionaire Mikhail Prokhorov became the party leader, causing

resentment among many party functionaries. The conflict resulted in two congresses being held simultaneously, one of which removed Mikhail Prokhorov from his post, while, at the other, he announced that he was resigning from the party. Right Cause has no seats in the present Duma.declared priorities The party’s social and economic goals are intended to make life in Russia more comfortable. It believes these should be achieved through economic reforms that have already been launched or are being planned by the present authorities. The party wants to restore the control of society over the authorities, to ensure an equal dialogue between the authorities and civil society, and to separate the civil service from business. Right Cause seeks to rid Russian foreign policy of ideology and wants Russia to join the European Union.

the political system of the russian federation

As head of state, the president holds the reins of power in Russia’s presidential- parliamentary system, and the next president will be in office for six years rather than four. A candidate may be president for only two successive terms: an-other candidacy is possible af-ter a break. The upper chamber of the Russian parliament, the

Federation Council, consists of two members from each of the 83 federal subjects: 21 repub-lics, 46 oblasts, nine krais, two federal cities, four autonomous okrugs and an autonomous ob-last. Half are representatives of regional governments appoint-ed by the president, half are elected by regional legislatures. The president appoints the

ministers, although his nomi-nation for prime minister can be rejected by the Duma. The president must work with the Duma to pass laws. Bills ap-proved by the Duma must have a second reading in the Federation Council. If it rejects a bill, the Duma can override the second chamber with a two-thirds majority.

current deputies have extended the term for their successors ‘in the interests of stability’

The date for the presiden-tial election was set last Fri-day by the Russian Parlia-ment’s upper house, the Federation Council, for March 4, 2012. Two days later, Prime Minister Vladimir Putin was nomi-nated as United Russia’s presidential candidate at its party congress at the Luzh-niki Olympic Sports Arena on Sunday. All 614 delegates from United Russia and Pu-tin’s All-Russia People’s Front movement took part in the vote and supported their candidate. “I accept this nomination with grati-tude,” said Mr Putin.Luzhniki stadium was also the venue for the “job swap” announcement in Septem-ber, when President Dmitry Medvedev told United Rus-sia members that he would stand down to allow Mr Putin to stand as president again, and Mr Putin backed Mr Medvedev to be the next prime minister. Mr Putin was barred by the constitution from seeking a third consec-utive term as president, and became prime minister after his hand-picked successor, Mr Medvedev, was elected president in 2008.The Liberal Democrat Party

the date of the presidential election has been set and the campaign has officially started, even before the state duma elections have been held.

ideologies, priorities and promisesthe political parties

countdown to the presidential poll begins

and the Communist Party have already announced that their leaders Vladimir Zhir-inovsky and Gennady Zy-uganov will stand as presi-dential candidates. A Just Russia will decide on its par-ticipation in the presiden-tial poll at a party congress on December 10. Parties without seats in the Duma, such as Right Cause and Ya-bloko, are as yet undecided on whether they will take part. To do so, if they still

have no seats in the next Parliament, they will have to secure signatures of at least two million supporters for their candidate. All the candidates running must register by January 18 and the full list will be an-nounced on January 29.While polls suggest Mr Pu-tin’s popularity is falling slightly, he is still expected to win. Preliminary results will be given on March 5 and official results will be an-nounced by March 15. In the 2000 elections, Mr Putin won 52.94pc of the vote and in 2004 he won 71.31pc. If he wins again, Mr Putin will have a six-year term in office, with the pos-sibility of a further six years if re-elected in 2018.

parties without Duma seats have to secure two million signatures for their candidate

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03most read Fear of falling: the demise of Phobos-Grunthttp://rbth.ru/13778 Politics & societyRussia now www.rbth.ru

section sPonsored by rossiyskaya gazeta, russia distributed with the daily telegraPh tuesday_noVember 29_2011

Nuclear power after Fukushima is a topic being dis-cussed on many

professional forums. Several governments, facing pressure from NGOs and the public, have had to declare that they will abandon nuclear energy. But for the time being, the situation is virtually un-changed: plants are still in operation and will remain so at least through the 2020s, including those in Germany and Switzerland. And nucle-ar plants that were being built at the time of Fukushi-ma are still being built. Some countries (the UK, South Korea and Saudi Arabia) plan to generate a bigger pro-portion of their energy through nuclear power.A total of 29 countries have nuclear power. The World Nu-clear Association (WNA) pre-dicts that by 2030, Russia, China, India, South Korea, the United States and France will account for about 71pc of the total number of nu-clear power plants scheduled for construction by 2030 (212 of 297 reactors). In its Nu-clear Fuel Market Report 2011, the WNA says the world’s nuclear capacity will nearly double by 2030. Especially notable are the 21 states that, according to WNA data, declared their inten-tions to build their country’s first nuclear power plants and confirmed these inten-tions even after the Fukushi-ma accident. These include the United Arab Emirates, Turkey, Vietnam, Jordan and Bangladesh. New nuclear power plants aren’t just an energy project, but also a huge stimulus for infrastruc-ture development, the con-struction industry and job creation, as well as a major boost for science and educa-tion. They can also help to expand international part-nerships, for example the ex-port of energy to neighbour-ing countries.Fukushima has had a most-ly positive effect on the nu-clear industry. This is because it has made the most ad-vanced safety systems an es-sential requirement and vir-tually eliminated the supply of Generation II reactor fa-cilities on the market (those without double containment or passive safety systems, or with incomplete systems).The accident in Japan has also led to proposals for tougher safety rules. Dmitry Medvedev, the Russian pres-ident, has suggested improve-ments to the international legal framework for nuclear safety, as well as to Interna-tional Atomic Energy Agen-cy (IAEA) standards. These were reflected in the action plan and resolutions adopt-ed at the IAEA general con-ference in September. The general conference also affirmed that nuclear power continues to play an impor-tant role in providing for the world’s growing demand for energy. Chris Huhne, Secre-tary of State for Energy and Climate Change, pointed out in a recent article that a bal-anced approach to energy

oPinion

alexanderyakovenko

Special to RN

Fukushima has made the nuclear industry safer

issues is needed: “Renewables, fossil fuels, and nuclear are not mutually exclusive.”In addition, any military strikes against nuclear facilities – which in recent years have been discussed in connection with Iran’s nuclear power pro-gramme – would not only vi-olate international law, but would also run counter to the wider interests of the interna-tional community.Russia has already taken heed of the lessons to be learned from the Fukushima accident. It conducted stress tests ear-lier than other countries, and Russia’s procedures proved to be even more thorough, since it has also tested stations’ phys-ical protection systems against possible terrorist attacks. It has gained experience by search-ing for usable sites in earth-quake zones: the Armenian nu-clear power plant, for example, is in one. In addition, reassess-ments of seismic activity in nu-clear power plant regions are currently under way in Rus-sia. After this, each power-gen-erating unit will work on im-proving the stability of key facilities. In all, Russia plans to build a total of 26 new re-actors as part of its programme to develop nuclear power by 2030. Taking into account the units that will be decommis-sioned by that time, up to 25pc of electricity consumed in Russia will be generated by

47 nuclear power units. All of the units being constructed by Russian nuclear power plant specialists – both in Russia and abroad – are the so-called Gen-eration III+ reactors, which use a unique mixture of active and passive safety systems to with-stand any possible combina-tion of external impacts.Russia continues to participate in bids to build new nuclear power plants in foreign coun-tries. Its competitive advantage is that Rosatom, the state atomic energy corporation, is prepared to guarantee client countries a supply of nuclear fuel for a station’s entire op-erating life. That’s because we are absolutely confident that nuclear power is still by far the safest, cleanest, and most cost-effective source of energy available today.In general, we must acknowl-edge that the past 20 years have largely been lost in terms of actively preparing the glo-bal economy for a transition to clean energy. Every nation can probably be said to be guilty of this, but it is espe-cially the fault of countries that could show foresight and afford to implement ambitious programmes in this realm.Now we must reform our views of the immediate situation with a healthy pragmatism, and a real understanding of the world in which we now live – in the 21st century, and not in the 22nd.

Alexander Yakovenko is Ambassador of the Russian Federation to the United Kingdom.

Nuclear power is still by far the safest, cleanest, and most cost-effective source of energy today

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on the eve of the russia-eu summit, russia now looks at the political and economic issues that are of most concern to russian people.

the head of the united nations industrial development organisation (unido) gives russia some tips on sustainability.

For ordinary Russians (and their voices are increasingly important in the run-up to the elections), the most im-portant issue in EU relations is the visa regime. If signifi-cant progress on this issue is not made at the Decem-ber summit, other joint ini-tiatives between Moscow and Brussels are unlikely to re-ceive popular support. In late October, Foreign Min-ister Sergei Lavrov said he hoped that a joint list of steps to move towards a vi-sa-free regime would be ap-proved at the summit. And in a few months, when the requirements are met, Mr La-vrov wants the parties to enter into negotiations for a visa-free regime.Ordinary citizens do not share the minister’s opti-mism. “They can wrap fish in their road maps,” said Polina Kiseleva indignantly, referring to the agreement to create four common eco-nomic spaces from Lisbon to Vladivostok. Her scepti-cism is understandable. Poli-na’s father, a fan of the Rus-sian biathlon team, wants to go to Sweden this month for the IBU Cup competition. Ms Kiseleva has twice travelled from Nizhny Novgorod to Moscow (more than 250 miles each way) to deliver visa documents to the Swed-ish consulate on his behalf. The list of joint steps and measures for moving to a vi-sa-free regime for short-term trips by Russia and EU cit-izens is 99pc ready, diplomats say. But it will be difficult to

what is unido’s main focus in developing countries?We focus on a niche area of industrial development – pol-lution management and green industries. In today’s context of climate change and resource efficiency in an overpopulated world, these areas are important to help provide solutions to increas-ing production and consump-tion. While market forces are important, industrialisation does not occur by accident. From Singapore to the EU, it’s been determined by the leaders. We want govern-

policy in general (both do-mestic and foreign).“The European Union’s main strategic concern is Russia’s domestic policy on the one hand, and Moscow’s desire to, in one form or another, reintegrate the former So-viet space,” noted Nikolai Kaveshnikov, head of the Centre of European Integra-tion Studies at the Institute of Europe. That said, experts do not rule out Brussels or individual members of the EU making certain econom-ic demands. Russian experts believe that the Kremlin will not make concessions.“It is inadvisable for Russia to make significant econom-ic concessions in EU talks on transitioning to a visa-free regime,” said Alexei

Kuznetsov, head of the Cen-tre for European Studies at the Russian Academy of Sci-ences. “In the EU, only strong partners are respected, but weak ones are forced to make additional concessions.”There are still unresolved economic issues in relations between Moscow and Brus-sels, despite the successful conclusion of negotiations on Russia’s entry to the World Trade Organisation. Russians are not only concerned about politicians and big business; they are also worried about workers in the manufactur-ing industry and agriculture. They fear that these sectors would be damaged by the country’s new foreign eco-nomic status, and specifical-ly that they would not be

able to withstand competi-tion from foreign manufac-turers, especially European ones. And the Partnership for Modernisation (one of the new Russia-EU joint pro-grammes) won’t help, ac-cording to some sceptics.Russian farmers were pleased with the recent ban on the import of European vegeta-bles, seeing it as a protec-tionist measure by the state, and were upset when the ban was lifted. “Why get toma-toes and cucumbers from Holland? I can feed them to half of Russia,” says Nikolai, a landowner from Stavropol, a southern region in Euro-pean Russia. However, he was less vocal about the problems of underdeveloped infrastructure in many rural areas and the high prices that vegetables are sold for in Russian cities.

differing interestsNo matter how many good things have been said about energy co-operation between Russia and Europe, the par-ties’ interests remain differ-ent. Diversification of ener-gy in the EU is a concern not only to the major Rus-sian oil and gas businesses, but also to millions of peo-ple whose welfare depends on the energy industry.No matter which political party they support, the ma-jority of Russians plan to vote “for a strong Russia” in the State Duma elections on December 4. Sensing the vot-ers’ mood, all of the parties vying for a seat in parlia-ment have in one form or an-other included in their elec-tion manifestos a promise to make the country even more influential. In light of these promises, it seems unlikely that Russia will make any concessions.

no visas and no concessions

seller’s market: farmers oppose eu imports of fruit and vegetables because local produce fetches high prices in the cities

clean and green: dr yumkella says russia can lead the way

Vladimir babkinRuSSia Now

artem zagorodnoVRuSSia Now

reach agreement on the re-maining 1pc. Moscow insists that full approval of the doc-ument must automatically put into place the mecha-nism for abolishing visas. But Brussels says this is not yet guaranteed.Worse, in Moscow it is feared that the EU will intensify the politicisation of this issue. Some observers attribute Eu-rope’s slow pace to a reluc-tance to put Russia in a more privileged position than their close (as of now) partners, Georgia, Ukraine, and Moldova. Another possible motive is that any positive decision by the EU in its relations with Russia could be construed as an endorse-ment of the leaders’ job re-shuffle and the Kremlin’s

" We actually view the problem of visas as a rudiment from the

past, which Europe should refuse [in order to] build full-fledged relations with Russia

" Russia is ready to move towards easing the visa regime with the

European Union, with Germany, as quickly as our partners are ready for this

the Quote

Dmitry MedvedevpReSiDeNt oF RuSSia

Growth must be greeninterView DR kaNDeh yuMkella

RuSSia coulD cReate MillioNS oF joBS By iNveStiNg iN

cleaN-eNeRgy techNology aND iNSulatiNg BuilDiNgS

ments to mobilise their pri-vate sectors to engage in a green transformation.

how do you envisage this green transformation will take place ?Experts call it a third indus-trialisation based on green growth. Strong public-pri-vate partnerships in green industries are needed, where the state hedges some invest-ment risk while allowing market forces to operate.

how are unido’s plans being re-alised in russia?We’re pushing a number of projects in Russia focused on green energy and cleanup production. These include a centre for the disposal of haz-ardous consumer products and industrial waste in the Republic of Tatarstan, and a

$1.5m (£960,000) project to improve water quality and reduce the impact of indus-trial activities in the middle and lower Volga basin. We’re also promoting the produc-tion of energy-efficient re-frigeration and air-condi-t i o n i n g s y s t e m s v i a technology transfer.

what specific green technolo-gy suggestions would you like to see in russia?If Russian authorities were to adopt new municipal building codes and use pub-lic money to build new in-sulation, they could create millions of jobs. Mayors – like Michael Bloomberg of New York City – will tell you one of their biggest challenges was figuring out how to keep skyscrapers hot and cool. They’ve been thinking about

incentives for owners and tenants to be energy efficient. We’re pitching these ideas to wealthy Russians as new business opportunities. The message I brought to the Nevsky Ecological Congress in St Petersburg this year was that Russia has always been a leader in science, but there has not been enough mobilisation for it to lead the green revolution. Russian sci-entists who can lead this re-search are out there.

what long-term challenges does russia face in the context of green growth?When Russia went through rapid industrialisation, sus-tainability was not an issue. There are now places where accumulated pollution has killed ecosystems, and con-taminated heavy-metal pro-

duction sites where pollution is seeping into waterways. But technologies to clean up these problems do exist.

how do you promote energy ef-ficiency while stimulating eco-nomic growth?Japan and Denmark have shown you can grow GDP continuously while cutting energy use – the new govern-ment in Denmark is pitch-ing green technologies as a way to stimulate economic

growth. But I don’t think this mentality has gained a foot-hold in Russia yet. The gov-ernment has set up an ener-gy-efficiency programme, and I have heard people ask: “What for? We have lots of energy!” The answer is that there is a high demand for that energy – what you don’t waste, you can sell to other countries.

extremely important devel-opment and a triumph for Russia, as well as for its part-ners in the commission, Be-larus and Kazakhstan.Political analyst Sergei Markov said: “The signing is a very important step for-ward and an extraordinary success.” He believes it is part of a new trend towards in-tegration, which is important in light of the threat of a new economic crisis, as it will help all three countries greatly re-

duce its possible impact. “We will have more oppor-tunities to combat the crisis by relying on our domestic market,” he said.An analysis of existing eco-nomic trends in the post-So-viet space shows that the business communities of all three countries have already been actively implementing integration plans. “The main advantage for our countries’ companies is the elimination of customs barriers, which will not only lead to direct savings on customs fees, but

also to indirect benefits from the removal of bureaucratic obstacles, and accelerate trade between the member countries of the future union,” said Aleksandra Lozovaya, the head of research at Vector Securities, an invest-ment company.For example, the Russian company Eurochem plans to invest $2bn in a large-scale project it is actively pursu-ing in Kazakhstan. The project involves developing phosphate deposits in the Karatau Basin in southern

Kazakhstan, and building a mining and processing plant in the city of Zhanatas, as well as production plants for phosphate, nitrogen, and mixed fertilisers in Karatau with a combined capacity of more than one million tons annually.In another example of busi-ness integration, Lukoil is successfully operating in Ka-zakhstan and Belarus. Ka-zakhstan projects make up 40pc of the largest Russian oil company’s overseas re-serves. In addition, more than

half of its investments in for-eign upstream projects are in Kazakhstan.This autumn, ZAO Atom-stroyexport (SC Rosatom) and SA Nuclear Power Plant Construction Directorate (Belarus) signed a contrac-tual agreement to build Be-larus’s first nuclear power plant. It will be built in As-traviec in the Grodno region, where preparatory work has already begun. Belarus will thus acquire a reliable and stable source of energy, which will to some extent help it

solve its power supply prob-lems. According to Lukoil’s CEO, Vagit Alekperov, one of the main tasks of the gov-ernments and the business community, as part of the in-tegration process is to har-monise legislation, and to lift national as well as interna-tional legal and administra-tive barriers.

Commission to remove trade barriers continued from Page 1

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Originally published inexpert magazine

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04 most readRussia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_november 29_2011technology Angry Birds fly into Russia, but don’t Occupy Wall

Streethttp://rbth.ru/13710

games industry The world is devouring mobile apps created by Russian designers but the home market is still small

Watch out Angry Birds and Fruit Ninja: Russian compa-nies in the booming mobile and games app markets are conquering the world with imaginative creations like Cut the Rope and MewSim. The emerging players include traditional mobile content companies such as Dynamic Pixels, HeroCraft, Game In-sight and i-Free, which orig-inally focused on social games. With Game Insight’s new Crime Story, each gamer can become a crime boss, building a criminal empire by eliminating rivals and ex-panding the business. Founded in Moscow in 2005 as a mobile development stu-dio, G5 Entertainment is now a global company develop-ing mobile and PC games on a massive scale – one release a week, according to the com-pany’s website – with such international successes as Stand O’Food, Virtual City Playground and Supermar-ket Mania 2. The company is listed on the Aktie Torget eq-uity marketplace in Stock-holm, and operates from that city, as well as Moscow, San Francisco and Ukraine. But much smaller develop-ers are also enjoying success. Tens of millions of mobile gamers across the globe are downloading Cut the Rope. Developed by a Moscow team, the game features a lit-tle monster fed with sweets, while Maxim Petrov, a Mos-cow programmer, has built a flourishing business with PowerAMP, praised as one of the best music players on the Android market. “The Russian mobile content

industry has been develop-ing for almost a decade,” says Leonid Kovalev, marketing director of DaSuppa, a Mos-cow-based mobile games company. “But in recent years, new-generation apps have created a new situation. Through global stores, such as the Apple App Store or the Android Market, Russian developers can easily sell eve-rywhere in the world. Their vision and practice has be-come global.”The domestic market in Rus-sia is still quite small. Smart-phone sales are growing fast – more than doubling from 2010 to 2011 – but the number

of smartphone owners is still a fraction of that in Europe and the United States, ac-cording to a TNS survey. The total number of iPhone and Android-supported smart-phone owners in Russia bare-ly reaches 1.5 million and five million, respectively, accord-ing to i-Free.

paying is a problemPaying for services is more difficult in Russia. “Most Rus-sian users are ready to pay for good mobile products,” says i-Free co-founder Kirill Petrov. “But Apple’s App Store and Google’s Android Market accept payments

almost exclusively through bank cards, which Russians are reluctant to use.”New-generation mobile ap-plications and games gener-ate huge revenues in the tens of millions of dollars for Rus-sian developers, Mr Petrov estimates. Although tradi-tional mobile content – from ringtones to Java games – still generates hundreds of mil-lions of dollars in Russia, the market is expected to decline and a number of developers are switching to new-gener-ation content. I-Free still generates $60m (£38m) in revenue from tra-ditional content in Russia

and abroad, but last year it created an entire division dedicated to new apps and games. Its most significant international success to date has been Pocket Blonde. Fea-turing a smart personal as-sistant, the application has been downloaded more than a million times from the An-droid Market since its release in March 2011. In another move to position itself at the leading edge of innovation, i-Free has also created a fund to invest in Russian and foreign startups.Other companies, such as DaSuppa, have stopped pro-ducing traditional games,

and are putting all of their resources into new-genera-tion products.Outsourcing is another prom-ising option companies are exploring. Established off-shore developers, such as Epam and DataArt, have opened dedicated depart-ments, while dozens of small-er businesses or teams are experimenting in this new market. “These companies and teams can barely meet the demand,” Mr Petrov says. “Some Russian companies have already found addition-al teams or subcontractors in Belarus, Ukraine or the Baltic states.”

playing to win at gamesFrom cut the rope to pocket blonde, apps built by russian developers are making serious money in the global games market.

adrien henniEasT-WEsT DigiTal NEWs

AlterGeo is a location-based social networking service for mobile devices. The app allows the user to discover new cafés, shops and other places of in-terest and share their opin-ions of them with friends. Us-ers can benefit from discounts and be rewarded with points when “checking-in” to a ven-ue. Launched in 2008 – before its US competitor foursquare reached the Russian market in September this year – AlterGeo now claims 800,000 registered users. Only a fraction, however, are considered active users.

Cut the Rope is arguably the biggest Russian success in mo-bile games. The player swipes a finger across the screen to cut ropes which hold sweets to feed the little monster Om Nom. After going on sale at Apple’s App Store in October 2010, Cut the Rope was down-loaded a million times in its first 10 days. It topped the paid applications section of the An-droid Market a week after its launch there and won an Apple Design Award for the iPhone platform at the Apple World-wide Developer Conference.

MewSim is a comic interac-tive simulator in which you can bring up a cat to be an affec-tionate pet or a little devil. You can choose its sex, colour and name, and give it unique char-acteristics. You can also ex-change it with friends via Bluetooth. After initial suc-cess in traditional Java format, MewSim was made available in 2010 to iPhone and Samsung users. It topped the games and free sections of Apple’s Rus-sian App Store and the family and simulator games section in the Polish App Store.

A high-definition role-simula-tion game where players turn sun, sea and beaches into a flourishing resort business. Gamers entertain rich tour-ists in casinos and entertain-ment centres, build hotels, restaurants and discos and learn to manage the business. Launched in December 2010, the game has held first place in the Top Grossing Android Market since May 2011, gener-ating up to $1m every month for its publisher Game In-sight. In September, the game reached five million players.

A charming and smart girl who lives in your phone and talks to you. She wakes you in the morning, chats about recent news, makes jokes, sends out birthday reminders, delivers a morning horoscope, keeps an eye on the weather and more.Blondie also has a memory: if you change your mobile, she will remember you, so you won’t have to get acquainted again. Pocket Blonde was developed by the St Peters-burg-based i-Free, as part of Brainy, a series of smart mobile aide applications.

russia’s top five mobile and games apps

title: AlteRgeO

platForms: iOS, AndROid

developer: AlteRgeO

title: Cut the ROpe

platForms: iOS, AndROid

developer: zeptOlAB

title: MeWSiM

platForms:J2eM, iOS, BAdA

developer: dynAMiC pixelS

title: pARAdiSe iSlAnd

platForms: iOS, AndROid

developer: gAMe inSight

title: pOCket BlOnde

platForms: AndROid

developer: i-FRee

A Russian research engineer has designed a radiation dosimeter that can be inte-grated with mobile phones or added as an application. The trial version of the DO-RA mobile application (the name is an acronym of dosimeter-radiometer) is al-ready available on the An-droid Market.After the Fukushima radia-tion leak, Vladimir Yelin, 54,

innovation New mobile protection for the atomic age

in the wake of the Fukushima disaster, a new radiation monitoring device that works with mobile phone and satnav systems is being marketed.

who is head of the company Smart Logistic Group, was asked to write an opinion piece about the incident. This gave him the idea for the device. The DO-RA mobile applica-tion operates in four differ-ent modes. It can work as a radiometer which can dis-play a radiation map of a given area, such as a reser-voir or area of land, on a mo-bile phone screen. It has three levels of alert: normal (green zone), high-risk (amber zone,) and an urgent evacuation warning (red zone.) It can su-perimpose the map onto a downloadable world map on the screen and owners can

add their GPS/Glonass meas-urements to it. The dosime-ter function displays the ra-diation level absorbed by the holder. In the event of expo-sure to a critical dose, the DO-RA alerts its holder with audio and visual signals. Finally, in another mode, the phone can provide relevant information on potential risks for different organs of the body associated with the absorbed radiation levels. Users or their doctors can then access the data from an-ywhere in the world. The very process of creating the device wasn’t smooth. “At the initial stage, assembling a team of developers was

tricky; it took at least one-and-a-half to two months to find them. I stumbled upon a worthy team by pure luck”, recalls Mr Yelin.Another problem was obtain-ing finance. “Very few Rus-sian banks are prepared to lend money for such projects. Venture funds that special-ise in financing new busi-nesses are only testing the waters in the huge Russian

market. Most don't like to risk their capital on inven-tions,” says the inventor. Mr Yelin decided to try his luck with the Skolkovo In-novation Centre, the much-discussed Russian Silicon Valley-in-the-making. He used Skolkovo’s website to create a resume and a road-map for the project, includ-ing a detailed description of its research and development

components and a business plan. After an assessment by a panel of 10 industry ex-perts, Mr Yelin obtained the board’s assent on the project’s compliance with Skolkovo requirements. “I have become a fully fledged participant in Russia’s innovation process, entitled to Skolkovo’s unique benefits,” he says. “As a Skolkovo resident, OAO Intersoft Eurasia, the opera-tor of the DO-RA project, will pay only 14pc payroll tax. We will be exempt from all other taxes. One can only qualify for such exemptions under the Russian tax sys-tem by conducting R&D work as part of proprietary innovation projects with the subsequent commercialisa-tion of the invention.” At the moment, the compa-ny representing the invention is in negotiations with mo-bile phone producers Sony Ericsson and Fujitsu. Accord-ing to Mr Yelin, the price of the device to be integrated into the mobile phone will be around $30-$50, but if the device is to be integrated into the phone in the production process at the factory, the cost can be cut to $10.

Monitor your nuclear risk with DO-RA the radiation explorer

radiation alert: device transmits readings around the worldalexandra bazdenkovaRussia NoW

As Russia emerges as the new hotspot on the global IT scene, foreign startups are flocking there to meet poten-tial investors and clients. Among them is Capptain, a Paris startup that helps mo-bile app and game develop-ers to better manage and serve their users. CEO Lau-rent Lathieyre visited Mos-cow recently to drum up business. He met major app and game developers, an in-ternet group and three Rus-sian venture funds. He hopes to close deals soon. “There’s a lack of funds for early-stage investment in France, and the US market is so competitive it’s hard to get attention from venture funds. It is encour-aging that some renowned Russian funds studied our proposition seriously and are considering investing in us,” says Mr Lathieyre.Manchester startup mScrib-er also made good contacts on a recent business trip to Russia. The company runs mobile applications for se-curing and sharing data stored on phones. Not only did Nicky Singh, vice presi-dent business development,

startups Funds for foreign firms

Forget dragons’ den: mobile app startups are finding willing investors in russia, as well as clients and partners to boost their businesses.

talk to Russian mobile op-erators (one has started test-ing his solutions) he also met a major Russian venture fund which could lead to mScrib-er’s first round of financing. “In the past few months, we have witnessed a sharp rise in the interest of Russian investors in foreign tech companies,” says Vasily Bar-gan, publisher of venture-news.ru, a website specialis-ing in the Russian venture capital market. “In Septem-ber and October of this year, Russian funds invested more abroad than in domestic companies.”The trend towards investing in foreign companies started in 2009, when DST acquired a stake in Facebook. Since then, it has invested in glo-bal internet firms including game maker Zynga, deal site Groupon and Chinese online marketplace Alibaba. Other Russian investors have followed suit. This year alone, Yandex invested in the US mobile app startup refine.io as well as in the US search engine blekko. The American business software publisher BigTime, UK-based web business information com-pany aiHit and Vietnamese e-commerce project MJ Group, to name just a few, have also received funding from Russian investors Runa Capital, VTB Capital and ru-Net, respectively.

Russian investors pick the winners in mobile app market

adrien henniEasT-WEsT DigiTal NEWs

playtime: the apple app store and android market make it easy for russian firms to sell their games internationally

business in brieF

russia tops european online league Russia now has more inter-net users than any of the 18 largest countries in the Eu-ropean Union. It had a total of 50.8 million users in Sep-tember, according to a sur-vey by the market research company ComScore, and has now overtaken the lead-ing economies Germany, France and Britain.The Moscow Times says that it is an encouraging mile-stone but not unexpected given the size of the coun-try’s population.Half of Russia’s 142.9 mil-lion people are expected to be internet users by the end of this year, the Communi-cations and Press Ministry said in emailed comments, citing “experts’ estimates” for the figure.

yandex and Facebook team up for new music service Yandex, the world’s fifth-largest internet search pro-vider, has announced the in-tegration of its music service with the social network giant Facebook, according to The Moscow News.Yandex.Muzika was launched in September last year and allows users to listen to music free using a live-feed stream from Yandex’s catalogue of 2.6 million tracks. The new system will display the names of tracks to which a Yandex.Muzika user is listening on the Facebook news feed that is displayed to friends. Friends can click on the dis-played tracks and listen to the songs without any addi-tional registration.

global russia business calendar

third international Forum oF nuclear industry suppliers: atomex 2011 DEcEmbER 6-8, WoRlD TRaDE cENTRE, moscoWAn international exhibition and conference with a programme that includes a series of dis-plays by customer representa-tives, technical specialists and designers from major organisa-tions in the nuclear industry.› www.atomeks.ru/en/atomex2011

Fourth international banking conFerence oF cis countriesNovEmbER 30–DEcEmbER 3baku, azERbaijaNThe theme of this year’s conference will be “Finan-cial markets in the CIS: Fac-tors of sustained growth during global instabil-ity.” The Investment Angel awards will also be present-ed at this year’s event. The nomination categories are: “Most dynamically develop-ing business in the CIS” and “Most dynamically develop-ing bank in the CIS”.

www.confer.fbc-cis.ru/baku2011/ ›index-eng.php

Find more iN ThE global calENDaR

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climatehttp://rbth.ru/13696

stephen dalziel

specIAl to russIA now

the global financial crisis, which began in 2008, sent a tsu-nami of pain around

the world, damaging mar-kets and consumers. Rus-sian consumers have not been immune. A report from the Zircon research group, entitled The Trend of the Fi-nancial Activity of the Rus-sian Population 1998-2011, says the share of Russians identifying themselves as middle class has fallen from 54 pc to 47pc. Zircon defines the middle class as “well-off people on the whole, who only have difficulties buying durable goods, and identifies “well-off” citizens as those who can afford more expensive items such as cars and flats. The number identifying themselves as “well-off” has also shrunk from 20pc of the population before the crisis to 12pc.Russians’ economic woes were exacerbated by the Kremlin’s decision to in-crease social taxes at the start of this year, which cut personal incomes. Real dis-posable incomes were down 2.9pc in the first quarter of this year, according to the State Statistics Service, which has had a trickle-down effect on other seg-ments of the economy, de-pressing retail sales as prices continue to rise.According to the Zircon survey respondents, the minimum needed to live a “normal” life in Russia is 24,000 roubles (£495) a month, while the minimum cost of living needed to cover the basics is 11,500 rubles (£240) per month. But given some disposable income, they would choose to treat themselves to more of those capitalist baubles that are the hallmark of the free market. Asked what they would do with 40,000 (£825) roubles in monthly

has highlighted the need for new infrastructure, includ-ing modern stadiums and the transport links between them, tourist facilities and new housing. Anyone who has flown into a provincial Russian airport or waited at a railway sta-tion will know the transport system leaves much to be de-sired. But agreements such as the memorandum of un-derstanding to rebuild rail-way stations, signed between Russian Railways and a group of British companies, shows a determination to bring Russia’s infrastructure into the 21st century. Institutions is the most dif-ficult of the I’s to pin down.

RBCC’s interpretation was to look at organisations such as our own, so the panel was made up of the heads of our French and Canadian coun-terparts in Moscow, CFIIR and Cerba; the Association of European Business and the Russian Trade Delega-tion in the UK. In each case, our business is about help-ing businesses do business, notably across national boundaries. You can never have too many contacts, and these institutions all have wide networks which facili-tate this. And with the bu-reaucracy which sometimes engulfs business in Russia, a helping hand through that maze can be very useful. But are we “institutions”? As the session’s chairman said: “Marriage is a great institu-tion; but who wants to live in an institution?”

Stephen Dalziel is executive director of the Russo-British Chamber of Commerce.

For the seventh year in a row, in the chill of a Moscow au-tumn, the staff of the

Russo-British Chamber of Commerce (RBCC) hosted RussiaTALK, the leading forum in Russia for those interested in doing business between the UK and Rus-sia. We chose as our themes this year the “Four I’s” as enunciated a while ago by the Russian president, Dmitry Medvedev, as being key to the country’s devel-opment: Investment; Inno-vation; Infrastructure and Institutions. Investment into the Russian economy remains strong, despite problems such as increased capital flight from Russia this year. And it is not just foreign money com-ing in. As the Moscow stock exchange, Micex, can dem-onstrate, Russian invest-ment continues to flow into Russian companies. Wheth-er this investment is always wisely utilised is another matter. But at a time when the eurozone is in crisis, Russia still looks a pretty safe bet for investors. Innovation presents more challenges. Many Russian entrepreneurs continue to struggle with bureaucracy and enterprise, and new ideas do not get the sup-port they deserve from cen-tral government. Innovation is the lifeblood of small and medium-sized enterprises (SMEs), the backbone of any developed economy. Some 90pc of companies in the UK are SMEs; in Rus-sia it’s 20pc. If Russia is to end its long dependency on natural resources it has to encourage innovation and SMEs. Mr Medvedev has made in-frastructure one of his key themes. The awarding of the 2018 World Cup to Russia

thinking small can lead to big innovations

london blog

moscow blog

ben aristhe moscow

tImes

squeezed middle classdoesn’t trust the banks

disposable income, 54pc of the respondents said they would go shopping; 11pc said they would invest (which in-cludes putting money on a time deposit at a bank); while another 13pc would save (in a current account).Perhaps the most surprising result of the report is how few financial services Rus-sians use. In 2011, the most popular service was insur-ance policies (40pc), which is largely because of state laws that make car insurance compulsory for drivers, fol-lowed by debit cards (37pc). Only 15pc of respondents had any kind of bank account; only 14pc had taken out a loan; and a mere 2pc had used a mobile bank. About 22pc had not used a single financial service this year.These results show that Rus-sians are still very wary of banks. When asked which were the most “dangerous”

financial services, the lottery came top (46pc). But, surpris-ingly, mortgages came a close second (41pc), and, even more worryingly, non-state pen-sion funds were rated third riskiest (33pc).“Russians have lost their sav-ings so many times in the past two decades that you have to have some sympathy for their anti-bank senti-ment,” said Olga Kuzina, head of the National Finan-cial Research Agency. Indeed, financial protection for Russian consumers is still woefully inadequate. Im-proved regulation is required before more Russians will be persuaded to trust the banks with their money.

Ben Aris is the editor and publisher of Business New Europe.

russians are still very wary of banks: only 15pc of respondents had a bank account of any kind

If russia is to end its long dependency on natural resources, it has to encourage innovation and smes

Ivan Svitek, chairman of Home Credit and Finance Bank, once Russia’s leading retail lending institution, re-cently lamented that only 24pc of Russians take out loans and only 18pc have de-posits with banks. Most Eu-ropeans use two to four fi-nancial products, and some five or six, but most Russians do not use any. Home Credit is now the eighth-most successful lend-er and it wants to regain more market share. Mr Svitek believes that there is plenty of potential to expand the business in Russia if the bank reaches out to remote regions and embraces new technol-ogies, in the way that Mc-Donald’s does.

high-risk businessThe statistics back Mr Svitek’s belief. According to the World Bank, Russia has a quarter of the global aver-age number of bank branch-es. The International Mone-tary Fund says individuals’ debt to credit institutions is only 9pc of the Russian GDP (it is 85pc in the US). And, according to Rosstat, 44pc of Russians live in remote areas not reached by retail banks which focus their business in large cities. Even in cities, only 63pc of Russians use a bank service, according to polls by the Public Opinion Fund, mainly to pay for util-ities and access salaries.Research from the National Agency for Financial Stud-ies shows there are 11 mil-lion active credit cards in Russia, a country of 140 mil-lion people. Some banks claim higher figures than this, but these may include “is-sued” cards which are never

lending Institutions seek new loan business in regions

reforms have made using a credit card safer, but attempts to make plastic more popular could be foiled by the eurozone crisis.

used, have been blocked or have expired.Russia saw a rapid growth in retail loans and credit card take up in the mid-2000s, when personal incomes began to increase. The fig-ures peaked in 2008 before the financial crash. Private commercial banks and Rus-sian subsidiaries of interna-tional banks were the main players in this underdevel-oped market. The business was high risk, mainly because many Russians had unoffi-cial incomes.

beatings and threats Focusing on gaining a big-ger market share, banks were not overly concerned about their customers’ ability to pay, but included the risk in the loan rates. A popular tac-tic was the one employed by Russky Standart Bank, which sent out credit cards by post without even receiving ap-plications for them. Recipi-ents could simply open the envelope, activate the card and use it. The bank would charge up to 250pc annually, as well as undisclosed com-missions, and many borrow-ers realised this only when they came to pay. This ag-gressive policy helped Russky Standart Bank secure the leading position in the Rus-sian credit card market. The 2008 crisis entailed mass non-payment of credit card bills and forced the banks to change their tactics. They would write off smaller debts of up to 40,000 roubles (£800) if there was little chance of collecting them. But larger unrecoverable debts were sold on to debt collectors, who used illegal methods, in-cluding beatings and threats, to recover the money.In the courts, borrowers’ ar-guments that banks charged three or four times the orig-inal advertised rates fell on deaf ears. The banks insisted that all undisclosed pay-ments and commissions were

indicated in the contracts, and that borrowers should simply read the contracts more carefully. The courts sided with the banks in 90pc of cases, according to Mikhail Kozlov, head of the public or-ganisation Credit Amnesty, which seeks to protect bor-rowers’ rights. “We are in correspondence with an American associa-tion of borrowers. They com-plain that the advertised in-terest rate on credit cards is 7pc but it eventually turns out to be 12pc – these hor-ribly unfair American banks. I told them we often have a declared rate of 12pc, which later turns into 200pc”, says Mr Kozlov. He adds that al-though western banks can-not afford to treat their do-mestic borrowers like that, they “have their own way” with borrowers in Russia.Since Russia has no law on personal bankruptcy to pro-tect borrowers’ rights, for some people lending led to a loss of everything.The financial crisis brought personal tragedy to many people. According to Credit Amnesty, about 100 private borrowers commited suicide every day before the state in-tervened in 2008, and obliged credit institutions to reveal the full cost of their loans. While this was a welcome step forward, there are still problems – about 15 million people have difficulties in paying off credit card debts, according to Mr Kozlov.

banks improve their act Banks, for their part, do now treat borrowers more seri-ously. Before lending, they run credit history checks to assess borrowers’ solvency. State banks, which offer lower loan rates than the market average, have stepped up their efforts in the credit card market to grab some of the market share from the commercial banks. Accord-ing to Tinkoff Credit Systems

banks to give credit where credit is due

sharp cards: the number of credit card users in russia reached a peak in 2008

Vladimir ruVinskyrussIA now

Bank, the state-controlled banks Sberbank and VTB now have the second and third biggest shares of the market, with 14.5pc and 10.3pc respectively. Russky Standart Bank, though, is still in the lead with 18.5pc of the market.

state banks criticisedMany experts regard the in-tervention of the state banks as a negative factor hamper-ing market development, but nevertheless banks have re-ported an overall increase in the number of credit cards they issue. The combined portfolio of credit cards in the first half of 2011 rose by 26.1pc and now totals 287 billion roubles of credit. Most banks now provide credit cards free of charge, although some still charge issue fees of 2,000-3,000 rou-bles (£40 to £60) and service fees of around 600 roubles (£12) a year, although some banks waive the annual fee for the first year. Interest rates for credit card loans are higher than those

on regular loans, but the ad-vantage of a card is that it can be obtained within 15 minutes. Sberbank offers a minimum annual rate of 17pc for credit card loans, but loans issued via a contract can be 5 or 6pc cheaper. Com-mercial competitors have had to reduce their rates to com-pete with the state-run banks, and now charge any-where between 15pc and 50pc interest rates. If credit cards are used to withdraw cash from a cash dispenser, a commission starting from 2.5pc of the loan, or at least 200 roubles (£4) is charged. An interest-free grace period of 50-60 days on purchases is allowed. According to VTB24 vice-president Mikhail Ioffe: “Most credit transactions with cards are completed at a zero rate.”

growth of lendingWhile there is still potential to expand the Russian cred-it card market, the anxiety caused by the debt crisis in the eurozone prevents bank-ers from being too optimis-tic. The impressive growth of consumer lending is hardly at risk, but one cannot be cer-tain that borrowed funds will not become more expensive. After all, these are mainly in-vestments by private custom-ers in deposits and bonds in Europe, where Russian banks will no longer be able to borrow at the old rates of 5-7pc.

million active cred-it cards are used in Russia – out of 140 million people.

pc of GDP is cred-it debt in Russia, compared with 85pc in the US.

bn roubles (nearly £6bn) is the amount owed in credit card debt.

11 9 287the numbers

credit cards used per person

The average number of credit cards used per person in dif-ferent countries, according to a survey by TNS Bank. The figures show there is plenty of potential to expand the credit card market in Russia.

crisis Banks may be hit but analysts see strength in commodities and a growing economy

russia is not immune to the effects of the eurozone crisis, but investors may see the country’s markets as a shelter from the storm.

Spikes in eurobond yields have convinced investors that Greece is just the tip of the iceberg, and that major econ-omies such as Italy and Spain may be next in line. Adding fuel to the fire are rumours that Germany might with-draw from the eurozone.Russia cannot stand apart from these problems. Russian banks will be the earliest vic-tims, as they are partners of European banks that have already been hard hit by the debt crisis. The performance of Russian lending and finan-cial institutions has already deteriorated markedly. And Russia is sure to suffer from the general instability caused by the European sovereign debt problem.Europe is Russia’s main trad-ing partner. Russia’s trade with the EU amounted to $254.8bn (£163bn) from Jan-uary to August 2011, repre-senting half of the country’s foreign trade. It is easy to see the negative consequences of the inevitable drop in Euro-pean purchases of Russian products, including commod-ities, gas above all.Market players cannot afford to ignore these factors. No wonder capital flight from Russia is increasing. It amounted to $13bn in Sep-tember alone and a total of $49.4bn between January and September, according to the Central Bank. This month,

the Central Bank almost dou-bled its capital flight forecast for 2011 to $70bn. The un-derlying cause is not only the debt crisis but also the vol-atility of the markets. The Partner company’s di-rector for financial market transactions, Andrey Mor-davchenkov, takes a dim view of the situation: “Western in-vestors are likely to withdraw money from Russia to patch up the holes in their coun-tries’ economies and compa-nies. If this happens, we may see a new wave of capital outflow.”Opinions among Russian ex-perts vary, however. Mikhail Kozakov, financial markets director with investment company Grandis Capital, says: “In the medium term, Russia is a more attractive investment destination than the developed markets. And besides, we have a trump

forming in a moderately pos-itive manner. According to the State Statistics Commit-tee (Goskomstat), industrial output increased by 5.1pc from January to October and GDP in the third quarter is expected to grow by an es-timated 4.8pc.“When times are hard, investors always look for alternative markets”, says Georgy Aksyonov, an analyst with the Net Trader compa-ny. “I think the Russian market, which is part of Brics and is still growing, albeit at a slower pace in recent years, may be promising in this situation.”Another cause for optimism is that, in the current situa-tion, the single European cur-rency did not go into a tail-spin, as many predicted: at the time of going to press, the euro/dollar rate has not once dropped below 1.30 since January of this year.It should also be noted that the European debt crisis is

changing the attitude to pro-tective mechanisms such as government bonds. Investors today are clearly shifting their focus from sovereign to corporate debt. This is good news for Russia, because Russian corporations are much cheaper than their Western counterparts.Russia’s financial authorities appear to be optimistic. Sergey Shevtsov, vice-pres-ident of the Central Bank, does not anticipate any seri-ous threats to the domestic economy, though he admits that the crisis might lead to a shortage of liquidity. “We expect it to peak in mid-December and, thereafter, the budget will be disbursing ac-tively,” he said on the fringes of an international financial conference sponsored by Sberbank. “The liquidity deficit will grow but it will not, on the whole, create problems for the banking sector and the economy in general.”

Euro cloud has silver lining for Russia

rouble rousers: demonstrators in moscow show their support for the russian currency

andrei VaismanspecIAl to russIA now

card in the shape of our com-modities. With the currency exchange situation as uncer-tain as the outlook for the economically developed countries, the commodity market is also becoming

more interesting, at least for speculative capital.”Some other positive factors will not escape investors’ no-tice. In spite of the overall mood of recession in Russia, the country’s economy is per-

The oil market is confusing. While the European debt cri-sis threatens to slow the glo-bal economy and cut demand, it is also turning commodi-ties into protective assets, prompting capital flight into

the european debt crisis threatens demand for oil – but increases its value as a commodity. the two factors could result in price stability.

oil. While there are conflict-ing predictions as to which way prices will move, many experts think the trends will balance each other out.Dmitry Dorofeyev, senior an-alyst with the Ursa Capital investment company, says: “Brent prices are down be-cause Europe is virtually in recession and China has launched its ‘soft landing’ policy, reducing the demand for North Sea oil. At the same time, the light brand has been

rising fast because statistics show the US economy is on the rise. I think by the end of the year, the two brands will even out and be traded at $100-$105 a barrel.”Evgeny Tarubarov, chief asset manager of Aton Manage-ment, sees a different path leading to a similar outcome: “There is a kind of play be-tween brands on the oil mar-ket,” he says. “Brent will cease to exist from next year and a new pricing methodology

oil price to remain calm in troubled waters

andrei VaismanspecIAl to russIA now

for will be offered. I think positions in the product will gradually shrink, but alarm-ing signals coming from the Middle East will preclude sharp price changes. “Before the end of the year and in the first quarter of next year, oil prices will re-main at current levels. The spread between Brent and West Texas Intermediate (WTI) will narrow, and pric-es will virtually even out at about $100 per barrel.”

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06 most readRussia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_noVember 29_2011comment & analysis The orphan factory: families in distress

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yevgeny shestakov

special to rn

Following the 2012 elections, there are any number of routes that Russia’s future

development might take in the next five to eight years. Working out what these might be and coming up with an optimal model for devel-opment was the task of the Valdai International Club at its recent annual meeting in Kaluga. Political scientists and experts from 14 coun-tries gathered to predict Rus-sia’s future path.First, five scenarios were dis-cussed ranging from a future hard-line authoritarian re-gime to a democratic revo-lution, accompanied by a total change of the ruling elite. In between these ex-tremes were intermediate variants reflecting the direc-tions the country might take under certain conditions. These included: liberal-dem-ocratic reforms; authoritar-ian modernisation; and an inertia model, based on pres-ervation of the status quo and a form of stagnation.None of the proposed mod-els, the participants conclud-ed, was realistic. The author-itarian modernisation path, though slightly closer to re-ality than the other scenar-ios, still failed to take into account many of the factors characteristic of Russia today. Instead, a sixth scenario emerged that takes account of the most obvious trends reflecting the general direc-tion of society. It is basically about gradual accumulation of forces for future change, which will take place simul-taneously with a restructur-ing of society. Sergei Kara-

positive trend – whereby the country, historically based on a besieged-fortress mental-ity, will have no need for mo-bilisation, either peaceful or military. The outside world, given the anticipated chaos in international relations, would not pose any obvious threats. The experts believe that this situation will give Moscow breathing space.The second most probable scenario – “authoritarian modernisation” – far from running counter to the “in-cremental” scenario, actual-ly corresponds to it in many ways and may become its driving force. Both models envisage rapid economic de-velopment with high levels of political stagnation.In the “incremental” model, the political elite seeks to maintain the current rate of development and tries to de-fuse popular discontent through social programmes. Meanwhile, “authoritarian modernisation” implies se-lective economic and politi-cal reforms, carefully control-led by the ruling elite.Will the outside world per-mit Russia to implement the “incremental” scenario? On the one hand, in the coming years the West will be pre-occupied with its systemic crisis and may simply have no time for Russia. On the other, Europe may become impatient with what it con-siders to be a slow evolution, with inevitable elements of stagnation. If so, will it try to isolate Russia? In this model of development, Rus-sia may not fit into Europe’s idealistic perceptions.Whatever domestic policy strategy the Russian leader-ship chooses after the presi-dential elections, the foreign policy rapprochement with

ganov, head of the Foreign and Defence Policy Council, who chairs the Valdai Club meetings, described that path as an “incremental develop-ment” model. Some of the more fiercely an-ti-establishment participants in the forum tried to convince their colleagues that a revo-lution was inevitable. But this possibility was dismissed by the Russian participants and virtually all the foreign members. That is not to say that attempts to rock the boat will not be made by either the right or the left of the Russian political spectrum.Why do most of the political analysts gathered in Kaluga see the “incremental” model as the most realistic? Because

this path guarantees Russia domestic stability and pre-dictable external relations. All the other scenarios pro-posed for discussion were hy-pothetical: they might ma-terialise only in the event of unforeseen global events on a scale that could change the course of world history.The West’s hopes of rapid modernisation after the elec-tions are unlikely to be met, according to experts. They believe Russia will enter a period of stagnation with a

THE GREAT GAmE is To Avoid wAR in iRAn

AmbivAlEncE ovER joininG THE wTo

no other sphere of Russia’s foreign po-licy is subject to such wide-ranging

scrutiny as Moscow’s policy towards Iran. Conservative American analysts in think- tanks such as the Heritage Foundation often view Rus-sia as a tacit ally of Iran, tur-ning a blind eye to its dan-gerous nuclear programme and ignoring the Iranian re-gime’s aggressive form of Is-lamist fundamentalism. Israeli government officials, when visiting Moscow, per-sistently point to the diver-gence of Russia’s national in-terests with those of Iran, citing Russia’s own troubles with Islamist fundamentalism in the North Caucasus and, earlier, in Central Asia and Afghanistan. Obviously pur-suing their country’s national interest, those Israeli officials believe in the possibility of a return to the very cold peace that existed between the So-viet Union and Iran in the Ei-ghties, when Moscow was very wary of the effect of Aya-tollah Khomeini’s teachings on its Muslim minorities.So what is the Russian au-thorities’ attitude now? And where does Russia’s nation-al interest in the Iranian question lie? The truth is that the Kremlin has been send-ing out a whole array of sig-nals on the issue, some of which are contradictory. On the one hand, Russia stopped

the 18-year marathon seems to be over. Bar-ring some extraordi-nary last-minute scan-

dal, in mid-December the World Trade Organisation will agree to accept Russia as a member. Georgia was the last WTO member to ob-ject to Moscow joining the free-trade alliance. It insist-ed on some form of Tbilisi-sanctioned customs controls on the borders between Rus-sia and Abkahazia as well as Russia and South Ossetia. The two regions unequivo-cally broke away from Geor-gia in August 2008. Moscow has since recognised them as sovereign states, while most of the world still considers them to be constituent parts of the Georgian state.Barack Obama and the Eu-ropean Union leaders believe that WTO membership will, in the long term, open Rus-sia up to the world – and ease difficulties that American and European businesses ex-perience there. Hence, Tbi-lisi was heavily leaned on by the EU to agree to a Swiss-brokered compromise in re-turn for some notional cus-toms-check system on the borders. These are widely be-lieved to be a fig leaf cover-ing the de facto recognition of Russia’s protectorate over the breakaway republics.So, is it a political victory for the Kremlin? Yes. Is it en-thused about WTO member-ship? Probably not. Prime

dmitry babichspecial to

russia now

konstantin von eggert

special to rn

Asia will continue. There is no question of a pointed freezing of relations with the EU, but diversification of in-ternational links will be a Russian priority for the next five years. As one participant in the discussion said: “Ori-entation on Asia is not a choice of civilisation but a necessity that will enable Russia to maintain a worthy place in world politics.”

linking asia to europeIn 2012, Russia will, for the first time, host an Apec (Asia-Pacific Economic Co-opera-tion) summit in Vladivostok. As its temporary president, Moscow has suggested that the region’s countries discuss, along with food security and innovation, a programme for the development of transport and logistics to link Asia to Europe and the US. Russia is interested in becoming a key transit country, tapping

minority in Iran, it is ex-tremely keen to avoid a war breaking out on its doorstep. It is not too difficult to guess in which direction the Azeri minority would flee from Iran in the event of it being turned into a war zone. Azeris are already the biggest Muslim minority in Russia.Hence Russia’s strong desire to see Iran at peace with other countries and to have a peaceful nuclear pro-gramme. Incidentally, the Nuclear Non-Proliferation Treaty (NPT), of which Iran is a signatory, obliges nucle-ar powers to help non-nu-clear countries to develop the peaceful use of atomic ener-gy. The balancing act be-tween Iran and the West, which Russia has to perform,

the potential of Siberia and the Far East. The Valdai Club’s forthcoming report on the challenges facing Russia and Asia suggests the agen-cies in Moscow be transferred to Irkutsk, east of the Urals, creating a new economic cap-ital there.Moscow is prepared for clos-er links with Europe, but does not see a reciprocal at-titude from Europe, which is fencing itself off from Rus-sia through visas and pro-hibitive barriers to Russian business. The dialogue be-tween Moscow and the EU shows signs of weariness, with both sides unwilling to admit they need a pause in mutual relations. How long that pause will last – six months, a year, several years – depends on when Eu-rope stops seeing Russia as a junior partner and demon-strates the willingness and ability to launch co-opera-

however, is becoming more and more difficult. It should be said that Iran has shown remarkable restraint in its reaction to a number of re-gional wars in which Russia has been a party in recent years. Unlike certain West-ern circles, Iran never pro-vided help to anti-Russian mudjaheddin in Afghanistan or to the Chechen rebels, and it stayed largely neutral in the conflict between Arme-nia and Azerbaijan, despite an obvious temptation to show solidarity with its Muslim brothers.Tehran’s restraint in Russia- related issues is ever more laudable, since Iran histori-cally has had little positive sentiment about Russia. Mod-ern Azerbaijan had for cen-turies been a part of the Ira-nian empire, and Georgia was in its zone of influence until the Russian tsars wrestled the territories away from Iran in the early 19th century. In his childhood, Ayatollah Khomei-ni was a witness to the joint Soviet-British occupation of Iran in 1941. But despite the troubled history, Iran’s rhet-oric on Russia is in most cases less critical than that of some members of the EU. The recent Western interven-tions in Iraq, and even more recently in Libya, make Rus-sia suspicious of what lies be-hind Western hostility to-wards Iran. Iranian restraint in Afghanistan and the Cau-casus makes Russians some-what sceptical about the in-formation on Iran’s support for extremists in the Middle East – a region which is be-coming more and more dis-tanced and estranged from Russia. Hence Russia’s unwill-ingness to see Iran condemned and punished by the West ac-cording to the Iraqi or Liby-an scenario.

Dmitry Babich is a political analyst at RIA Novosti.

analysts view russia as a tacit ally of iran, turning a blind eye to its dangerous nuclear programme

russia has no sympathy for islamist fundamentalism but is keen to avoid a war on its doorstep

there is no question of a pointed freezing of relations with the european union but diversification of international links will be a russian policy priority for the next five years

selling or transiting any kind of weapons to Iran, fulfilling UN resolution 1929, which was adopted in June 2010. This meant cancelling the contract to ship S-300 sur-face-to-air missiles to Iran, which could have helped the Iranians to challenge Israel’s superiority in the air. On the other hand, Russia finished the construction of the nu-clear power station in Bush-ehr. Where is the logic? Actually, the logic is very simple: Russia is concerned about Iran’s nuclear pro-gramme. It has no sympathy for Islamist fundamentalism but, considering Iran is right next to Russia’s border and to the borders of Azerbaijan, a former Soviet republic with a several million-strong Azeri

tion programmes. So far, Rus-sia-EU summits have had the same, constantly shrinking agenda. In contrast, Asia is looking for closer links with Russia and is ready to treat it as an equal partner, hop-ing for economic benefits.

the middle-class massesA Chinese political scientist at the Valdai Club meeting asked what role China will play in modernising Russia. Moscow does not yet have a clear answer to that question. But it is worth noting that Prime Minister Vladimir Pu-tin’s first foreign visit after becoming a presidential can-didate was to China.Paraphrasing Archimedes’ dictum, “Give me a place to stand on and I will move the Earth,” one could say that so-ciologists see the middle classes as a force capable of moving Russia in the next five to seven years. Accord-

ing to a focus group study presented to the Valdai Club by Mikhail Dmitriyev, head of the Strategic Development Centre, by 2018 the middle class will account for 60pc of adults in cities and 45pc in the country as a whole. The trend towards rising in-comes and the potential de-mographic situation were factored in. According to these calculations, by 2018, the left-wing electorate will be in the minority, greatly re-ducing the risk of left-wing populists winning power. Sociologists claim that, ac-cording to their surveys, the middle class today is inter-ested in politics but is not yet an independent political force. It expects the state to deliver clear and immutable rules for doing business, but does not want government interference in the affairs of the business community. The path Russia takes will

depend on whether the fu-ture middle class rallies under the banners of a party, and, very importantly, what its cultural level and ethnic composition will be.But the head of the Russkiy Mir fund, Vyacheslav Nikonov, says developing even the most plausible scenarios for Russia’s development makes no sense, and traps the par-ticipants in an “old-fashioned intellectual model”. The dis-cussion needs to focus on concrete projects that deter-mine the future of the state: the budget, prospects for re-industrialisation and inno-vation. These are the key pa-rameters that will determine how Russia develops, who its partners will be, and what configuration of the politi-cal system will emerge.

Yevgeny Shestakov is editor of the international desk at Rossiyskaya Gazeta.

Minister Vladimir Putin was always suspicious of WTO membership, fearing it would limit the Kremlin’s total con-trol over the Russian econo-my. At the moment, the Kremlin can write its own rules for foreign investors and rewrite them when need-ed. The accession will intro-duce an independent frame-work of rules, regulations and dispute resolution schemes which are difficult, if not outright impossible, to bypass. This would weaken the government’s so far firm hold on the economy. As he prepares to assume the pres-idency once again, Putin is

in no rush to join the WTO. That is the reason for pro-longed transitional periods for some of the Russian in-dustries, allowing them to lower tariffs and open up the market for competition over the next five to 10 years. This is especially relevant for the energy industry, allowing Gazprom to continue selling gas on the domestic market at reduced prices – one of the key elements of keeping so-cial stability.But not joining the WTO would have been a disaster for Russia’s reputation after nearly two decades of tough negotiations. The country

would have become badly isolated from the world mar-kets. The relatively lenient terms on which Russia joins the WTO may disappoint some potential investors, but the conviction in Moscow is that their numbers would al-ways be sufficient to keep the Russian economy going.Brussels and Washington may be right about the long-term benefits for foreign in-vestors in Russia who, from now on, will have more am-munition to defend their po-sitions in Russia, but also to defend Russian companies abroad. Many of them have found it difficult to invest in Europe and America because of protectionist hurdles. Now, they can appeal to the WTO rules. Although, I think, that with state behemoths like Gazprom, a lot of suspicion would still linger as to their real intentions. But, funny as it may seem, Russian busi-nesses will be able to take their own government to task – for example, if it tries to dictate their choice of for-eign partners.It will be a long and messy story, no doubt, but it is to the Russian government’s credit, that having spent so much time and effort trying to keep Russia aloof and sep-arate from the rest of the world, with the WTO it chose, against its own instincts, to tread a different path.

Konstantin von Eggert is a commentator and host for radio Kommersant FM, Russia’s first 24-hour news station.

is it a political victory for the Kremlin? Yes. is it enthused about wto membership? probably not

wHicH pATH will RussiA TAkE AfTER THE 2012 ElEcTion?

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07most read CityscapesRussia now www.rbth.ruseCtion sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_noVember 29_2011

Krasnoyarsk: frontier outpost to industrial centerhttp://rbth.ru/13743

moscow After decades of enforced atheism, members of the major faith groups are flocking back to new and restored places of worship

the restoration of many religious buildings in moscow has provided muscovites and visitors to the city – both religious and secular – with new spiritual, cultural and architectural treasures.

In the early 20th century, Moscow was one of the most prayerful cities in the world. By 1917, it had nearly 1,000 churches and other places of worship, representing all the major faiths, although Or-thodox Christianity was the official religion of the Rus-sian Empire. It was in Moscow, at the Kremlin’s Assumption Ca-thedral, that Russian emper-ors were crowned, even after St Petersburg became the new capital and political cen-tre of the country in the 18th century.When the atheist Bolsheviks took power in 1917, it became dangerous to be a practising religious believer in Russia, and the country’s centuries-old religious heritage started to be systematically de-stroyed. Only a quarter of

Moscow’s ecclesiastical in-stitutions survived; by 1990, just over 250 places of wor-ship remained in the city.In the Eighties, the authori-ties began to gradually reo-pen the remaining churches and return religious proper-ty to worshippers. The re-building of Russia’s main and largest cathedral, the Cathe-dral of Christ the Saviour, symbolised this movement.

Built in the 1880s to com-memorate the victory over Napoleon, it was blown up on Stalin’s personal orders in 1931. The site was used for a public swimming pool be-fore the cathedral was even-tually rebuilt in the Nine-ties.

Crosses and domesNovodevichy Convent’s thick red-and-white walls have housed many a high-ranking

nun (not all of whom chose their vocation voluntarily), including Peter the Great’s sister Princess Sophia. Now surrounded by a picturesque little park, it is a wonderful place for peace and quiet in the heart of the city, where you can listen to the toll of bells instead of car horns, and watch ducks paddle peace-fully on a tranquil pond.One of Moscow’s most im-

pressive monastic institu-tions, built in the lavish Mos-cow baroque style in the 16-17th centuries, the con-vent was declared a Unesco World Heritage Site in 2004. A large-scale restoration, completed in 2010, has re-turned the convent back to its former splendour, and it now attracts an ever increas-ing flow of visitors. Since the government began turning Orthodox property

back to religious groups, there has been an ongoing debate over whether these precious shrines and objects should be safeguarded by the church or by museums, es-pecially since many of them are very valuable. Before it was completely returned to the Russian Orthodox Church last year, the convent housed a branch of the State His-torical Museum.Church authorities are now searching for experts to con-tinue work on the preserva-tion and restoration of the convent. Among other things, the convent takes care of the unique frescoes in the As-sumption Cathedral, which date back to the early 16th century. Commenting on the convent’s work in preserva-tion, its Mother Superior, Mother Margarita, told the Orthodox website taday.ru: “Over the course of centu-ries, the old frescoes have be-come accustomed to temper-ature fluctuations inside the cathedral. There are research-ers in the cathedral who monitor the condition of the frescoes.”

stained glass and spires Catholic churches have al-ways been rare in Moscow. There were three before the Revolution; of these, only two remain. This year, however, Moscow’s Catholics are cel-ebrating a double anniver-sary: 20 years since the Cath-olic Church reopened in Russia, and 100 years since the construction of the Ca-thedral of the Immaculate Conception of the Blessed Virgin Mary on Malaya Gruz-inskaya Street. The cathedral, which is said to be inspired by Westmin-ster Abbey, was closed in 1938, its beautiful neo-Goth-ic façade changed signifi-cantly, with many of its more impressive elements removed.

In the Nineties, it was re-stored with the help of do-nations from charitable or-ganisations and Catholics all over the world.The cathedral’s superb acous-tics make it a good venue for concerts, which are also pop-ular with the secular public. For instance, organist James McVinnie, who played at the wedding of Prince William and Kate Middleton, per-formed here this month. “You can hear a real organ not only during concerts but also at every service,” says Lyudm-ila, a member of the parish. “There are three of them in the cathedral, which creates a very special atmosphere. A café also opened here recent-ly, and there are always many foreigners with children around. All this gives you the sense that you are not in Moscow but somewhere else in Europe.”

kosher cuisine Unlike places of worship for certain faiths, synagogues don’t have to be built accord-ing to specific architectural requirements and can be lo-cated in an ordinary room of any building. Nonetheless, synagogues in Moscow are becoming increasingly im-pressive, architecturally. The reconstruction by architect Sergei Estrin of the syna-gogue at 6 Bolshaya Bron-naya was recognised as one of Moscow’s top architectur-al projects in 2005. Through the five-storey building’s glass front, you can see the restored façade of the syna-gogue as it appeared when it first opened in 1883. The original grand building was funded through dona-tions from Lazar Polyakov, an industrialist, banker and philanthropist. “It was then a two-storey building, a

former mansion that was re-designed as a synagogue,” ex-plains Shlomo, a translator at the synagogue. During the Soviet years, the synagogue was closed, and it became the House of Ar-tistic Creativity Services be-fore being returned to the Jewish community in 1991. Today, it houses a kosher res-taurant on the roof of the building, called Jerusalem, which is open to all.

minarets and memorials The youngest of the three Moscow mosques, the Min-skaya Street memorial mosque was opened in Sep-tember 1997 to celebrate the city’s 850th anniversary. It is dedicated to the memory of Muslim soldiers who died in the Second World War. This mosque is part of a larg-er complex called Victory Park, which also houses a

Resurrected: believers breathe new life into sacred buildings

alena legostaeVaspeciAl to russiA now

synagogue with a museum and the Orthodox Church of St George the Victorious. The idea behind the park was to commemorate all those who fought for their country, re-gardless of their religion.The mosque is very spacious and beautifully decorated in-side. Imam Shamil Khazrat Alyautdinov explains: “Our mosque is a bit bigger than Moscow’s other mosques. We have allocated all available space for prayer.” People there are welcoming and friendly, even to those who come out of curiosity. They explain the etiquette expected in a mosque, offer tours of the building and in-vite you to attend the imam’s public lectures.There are about two million Muslims in Moscow and the number is growing steadily, mainly due to migration from former Soviet republics.

1. novodevichy Convent and pond 2. synagogue on bolshaya bronnaya 3. memorial mosque on minskaya street 4. restored Catholic Cathedral of the immaculate Conception of the blessed Virgin mary, said to be inspired by westminster abbey

(or just under) places of worship existed in Moscow before the 1917 Revolution.

places of worship remained intact in the city at the end of the Soviet era in 1990.

functioning religious buildings exist in Moscow today, repre-senting various world faiths.

1,000

250

645

the numbers

when the Bolsheviks took power it became dangerous to be a practising religious believer

the catholic cathedral’s superb acoustics make it a good venue for secular concerts

Since the 19th century, VIPs, celebrities and business peo-ple visiting St Petersburg have invariably stayed at the Hotel Europe in the heart of the city. Bill Clinton and Prince Charles are two of its famous guests. Located at the intersection of Mikhailovskaya and Italy-anskaya Streets, the build-ing has a prime location and is itself a historical landmark. It was built in 1875 by the Swiss architect Ludwig Fon-tana after a devastating fire destroyed the hotel, inn and guest houses that previously occupied the plot. Fine art and antiques adorn-ing the lavishly decorated hotel add to its rich histori-cal character. The hotel boasts a caviar bar and a restaurant serving sumptuous Russian haute cuisine.Guests can look out at the Ploshchad Iskusstv, or Arts Square, which is at the heart of the city’s cultural life.

the hotel europe has opulent decor, sumptuous food and a prime location close to key landmarks of russian history and art.

You’ll see people hurrying to a play, an opera or concert at the Mikhailovsky Theatre, the Musical Comedy Theatre or the Shostakovich State Philharmonic, and others heading to an exhibition at the Russian or Ethnography Museums. The square also houses the legendary Stray Dog Café, haunt of the early 20th cen-tury intellectuals after the 1917 revolution. A glittering crowd of Acmeist poets, sym-bolists and artists, including Anna Akhmatova, Osip Man-delshtam and Vladimir May-akovsky used to gather there and perform. It was there that they met the father of futurism, Filippo Tommaso Marinetti.Within 20 minutes’ walk of the hotel is the grand Win-ter Palace, the former home of the tsars that now houses the world-famous Hermitage Museum. Other landmarks include the Church of the Saviour on Spilled Blood, built at the place where Em-peror Alexander II was as-sassinated, the Kazansky Ca-thedral, built to commemorate the victory over Napoleon, as well as the boutiques in the Gostinny Dvor building.

alexandra khazinarussiA now

Peter the Great was a bit of a copycat when he built St Petersburg back in 1703. He brought the concept of a whole new city from Italy, and replicated other aspects of Eu-rope, such as the Dutch fleet and French architecture. He wanted foreigners arriving on ships from all over the world to be struck immediately by the grandeur and beauty of his new imperial capital, which is why the waterfront is the city’s face.Often referred to as the “Ven-ice of the North”, St Peters-burg consists of a network of canals surrounding 101 is-lands, just 16 fewer than Ven-ice. “A ride along the rivers and canals is a must for every visitor to St Petersburg”, says travel agency head Yana Khrustovskaya. “Our tourists are amazed at the harmoni-ous and magnificent view of the city from the water.”At night, the interplay of light and shadow emphasises St Petersburg’s impressive archi-tecture. If you take a boat to the middle of the Neva River at about 2am, you can watch the world-famous sight of the drawbridges being raised to let through the huge liners that cruise here every sum-mer night.

a bookworm’s routeThe name of writer Fyodor Dostoyevsky is inseparably linked with St Petersburg. Lit-erary scholars say that the city figures in about two-thirds of Dostoyevsky’s writing – both as the setting and also as a protagonist. The homes of his characters and places associ-ated with the writer’s life can

st petersburg with its rich historical heritage, stunning architecture and network of canals, the former capital is a truly romantic city to visit

there are plenty of ways to experience the atmosphere and beauty of st petersburg, including canal trips, literary tours and rooftop excursions.

View from the bridge: the sights of the picture-postcard waterfront area include the splendid st isaac’s Cathedral, above

hotel europe: lavishly decorated with fine art and antiques

Julia petroVa, pauline naryChkina and marina garinaspeciAl to russiA now

a cultural blast from the imperial pastA haunt of princes and presidents

tle, which used to house the engineering school in which Dostoyevsky was enrolled in 1838. The castle was built be-tween 1797 and 1800 at the behest of Emperor Paul, son of Catherine the Great, as a shelter from conspirators. Ironically, he was assassinat-ed in the castle in 1801. Semyonovsky Platz is where Dostoyevsky was almost hanged. After he became ac-quainted with revolutionar-ies and joined their secret so-ciety, he was arrested on a tip-off, incarcerated in the Peter and Paul Fortress and sentenced to death along with other members. On Decem-ber 22, 1849, he was brought to this place of public execu-tions, along with 20 other convicts. “I have told tourists this story countless times, and each time it sends a chill down

my spine”, says Elena Yako-vchenko, a guide with the Mir travel agency. “Three pillars were put up on the square and the conspira-tors were to be hanged in seven rounds, three at a time. Dostoyevsky, was in the sec-ond three, and while waiting his turn, a messenger arrived with a new sentence: death by hanging was commuted to four years’ hard labour.”After serving his term, Dos-toyevsky lived in Moscow for a while before returning to St Petersburg and settling on Stolyarny Pereulok, where he wrote his most famous novel, Crime and Punishment.

rooftop highlightsIn summer, a tour of St Pe-tersburg’s rooftops offers magnificent views of the landscape and the monu-

ments, but you’ll need a sen-sible pair of shoes. You can scale at least four roofs on a three-hour excursion in the historic heart of the city and get a different perspective from each one. From the six-storey building on the quay of the Fontanka River, opposite the Circus, you overlook a junction where, in the evening, the winding car headlights undulate and in-terweave with the riverboat lights. This synchronised dance is hypnotic.Near Mokhovaya Street the landscape is quite different. On the horizon, the illuminat-ed domes of Kazan and Saint Isaac’s Cathedrals and the Church of Our Saviour on Spilled Blood, plus the spire of the Admiralty are all aligned, like golden balls set along the tops of the roofs.

a taste of the old city

a little piece of britain in the heart of moscow

First opened in 1785, Palkin’s patrons included Dostoyevsky, Leskov, Chekhov and Tchaiko-vsky. Gourmets can enjoy dishes that were served to the imperial court, such as crayfish tails with avocado and caviar. Restored in 2002 by the Hermitage Muse-um, live music and regular cul-tural events are all part of the experience. “This is not our first evening at Palkin’s… we sim-

Moscow’s only Anglican church, St Andrew’s, opened its doors 127 years ago to meet the needs of Moscow’s grow-ing British community. Seeing as the Scots were the wealthi-est members of the community at the time, the church was dedicated to the patron saint of Scotland. The architect, Richard Knill Freeman, never came to Russia, sending the drawings of the building (a replica of hundreds of Victori-an Anglican churches) and his recommendations by post. The first church service was

ply want a repeat of the expe-rience we usually enjoy here,” says Russian director and screen writer Valery Todorovsky.

held in 1884; they continued until it was closed by the Sovi-ets. For 70 years, the building was put to various uses: a warehouse; a hostel; it even housed a recording studio for the famed “Melodiya” label.Church services resumed in 1991, and once again St Andrew’s parish is the centre for Moscow’s British commu-nity. The church hosts a library and a children’s club, as well as Alcoholics Anonymous meetings. It also holds classical music concerts and fairs to raise money for charity.

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2 3 4

be found on city maps, and many travel firms offer Dos-toyevsky-themed tours. “The writer lived here for 28 years and moved apartment 20 times, which is why so many addresses are linked to his name”, says Valery Fridman,

director of Mir travel agency. Dostoyevsky tours start at his memorial apartment on Kuznechny Pereulok, where he worked on his last novel, The Brothers Karamazov. Another must-see is the mysterious Mikhailovsky Cas-

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08 most readRussia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_noVember 29_2011Feature Pyotr Mamonov: from punk rocker to holy fool

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Moscow will keep you partying all night long and, if you’re up to it, several days in a row...

Tarlan Bakhishev, 14, has queued for six hours with friends to get a ticket to watch his local football team, Anzhi Makhachkala take part in a training session. The man the crowd of 8,000 has come to see is a Camerooni-an who has put the Dagesta-ni capital on the world foot-ball map – striker Samuel Eto’o, said to be the world’s highest-paid player.In a corner of the stadium, a few dozen fans perform their evening salah, the Muslim prayer, while thousands more anticipate the arrival of the latest star, a former Real Ma-drid galáctico.Eto’o, 30, has signed with a club that a year ago could not attract top Russian tal-ent, let alone the world’s best. But Eto’o, who has won the European Champions League three times, joined the Rus-sian club in August from Inter Milan for £18.4m on a three-year contract – worth a reported £25.7m a year.

security concernsIt is not unusual for football clubs to be transformed by a cash injection which at-tracts top international play-ers: Chelsea and Manchester City are examples. Manches-ter City are backed by the formidable finances of the Abu Dhabi United Group and fans recently relished the 6-1 defeat of local rivals Manchester United. But Anzhi, it seems, is more than a club with a stack of cash.The football club is in Ma-khachkala, capital of the Dagestan Republic in Rus-sia’s North Caucasus. There is an intense and long-run-ning battle in the region be-tween the authorities and

Football Club owner hopes that success on the pitch will provide a step towards normality for the troubled region

superstar samuel eto’o is proof of anzhi’s ambition to join the giants of europe. the club’s owner believes sport can change society, too.

Islamist extremists which has seen almost daily attacks, mainly on Russian police. On the day Eto’o walked on to the home pitch for the first time, five people died in a se-ries of attacks. In the past few years, more than 100 po-licemen have been killed each year in the republic, home to 2.6 million people.The players and their fami-lies do not live in Makhachka-la – they fly to each game from Moscow. But Eto’o has dismissed any security con-cerns. “Plenty of people will be looking out for my secu-rity. I took this decision be-cause I don’t consider that my life or that of my family are in any danger,” he wrote on his website. “I’ll travel there on the day or the eve of the match and then I’ll go back to Moscow.”After he was presented to fans, Eto’o – a smooth media operator who is adept at say-ing very little – avoided ques-tions about the dangers of Dagestan.Journalists who were flown down in a Yak-42 – now known for the recent crash in which the Lokomotiv Yaro-slavl ice hockey squad were killed – asked Eto’o if he was worried about travelling to games in Russia. “When we sit in a plane, I always give my life up to God. It doesn’t matter whether it is a Cam-eroonian, Spanish or Italian airline,” he replied.German Chistyakov, the club’s general director, insist-ed the city was safe, but ad-mitted that he had a differ-ent image of the republic before he came: “I thought that there was practically a war going on here, that trac-er bullets fly and you have to crawl when you move about,” he told the Russian news agency, Ria Novosti.The money for Eto’o and the other players comes from one man: Suleiman Kerimov, a Dagestani. He is one of the more reclusive oligarchs, even

though he has been a mem-ber of Russia’s lower house of parliament, the Duma, and is currently a senator.Mr Kerimov had tried to take control of the club for at least three years, according to Enver Kisriyev, head of the Caucasus section at an aca-demic think-tank in Moscow. It was only possible to buy the club when the new and proactive Dagestan presi-dent, Magomedsalam Mago-medov, came in. Relations be-tween the club and the president are close, and the support of a high-ranking of-ficial can help soothe the problems in an often dys-functional republic.“Kerimov doesn’t give inter-views; he speaks to Dagesta-ni people through the foot-ball club,” said Mr Kisriyev.Forbes magazine estimated that Mr Kerimov was worth nearly $8bn (£5bn) a fortune made through clever invest-ments in the Nineties. He now owns one of the coun-try’s biggest gold producers, but has so far managed to remain out of the limelight – except for when he crashed his Ferrari into a tree at high speed in Nice in 2006. He suf-fered severe burns and took several months to recover.

escape from povertyDagestan is one of the poor-est republics in Russia with around 40pc of the popula-tion unemployed. Club offi-cials and Mr Kisriyev say that Mr Kerimov’s aim is to encourage young people to turn away from extremism by offering them a chance to channel their energies into football. As part of the project, the club will set up seven football centres for the youth of Dagestan, bring in qualified football trainers and build a new stadium.“People are laughing and being ironical [about the project], but you have to un-derstand the social aspect,” said Mr Kisriyev. “I’m not

dagestan’s galacticos reach for the stars

galina masteroVaspeCial to russia now

saying it is a panacea that will get rid of Dagestan’s problems, but it will create some positive movement.”Judging by the reception for Eto’o, the club can do no wrong in Dagestan. Close to 8,000 packed into the stadi-um just to see a training ses-sion, and more than a dozen children ran on to the pitch to try to touch Eto’o. At one point, a local Cameroonian student, who is studying medicine in Makhachkala, also ran out and dived to kiss Eto’o’s feet.

anything is possibleAt first, few took the club se-riously, even after it bought Roberto Carlos, the former Brazilan international who won the World Cup in 2002, in August. He is 38 and the assumption was that he wanted one last pay day.But the arrival of Eto’o and other stars has shown how serious the club is and more stars are expected to join. The club has sacked its Russian manager, and has been linked to the world’s top coaches, including Guus Hiddink and José Mourinho.“There has never been any-thing like this in Russian football,” said Boris Bogdanov, the football editor at Sport Express. “Anything is possi-ble if the investors are pa-tient and invest in infrastruc-ture.” The club, eighth in the Russian Premier League, will be fighting to win a place in the European competition when the next part of the season starts. “It would be great to sign Cristiano Ronaldo,” Roberto Carlos told a Spanish televi-sion station, referring to the Real Madrid striker who is one of the best-paid players in the world. He also revealed that he had been trying to persuade other stars to join him at Anzhi, adding: “Our aim is to get Anzhi on the same level as Real [Madrid] and Barcelona.”

anzhi’s big-money signings: a team of all the talents?

Yuri Zhirkov Jucilei da silvaBalazs Dzsudzsak Mbark Boussoufa

Neither fans nor football ex-perts could understand Zhirk-ov’s move from Chelsea. They believe he simply gave up struggling for a place in the Blues’ starting lineup, which he had not managed dur-ing his two years at the west London club. Zhirkov said his move to Anzhi would guar-antee him more time on the pitch. He signed for Anzhi, re-portedly for around £12.8m, and it is said that the club will pay him about £4.3m a year.

The 23 year-old played more than 100 matches for Corinthians and even made it to the Brazilian national team. The Dagestan club reportedly paid about £8.5m for him, although Russian football experts believe that the player is worth only half that. However, the Brazilian player is still young and, if he improves with age, Anzhi will be able to sell him to a European club at a significant premium.

One of Hungary’s most talent-ed players, Dzsudzsak had a great career at PSV Eindhov-en, so his decision to sign for Anzhi came as a surprise even to the executives of the Dutch club. Dzsudzsak could have moved to any top league. According to various sourc-es, PSV got between £7.7m and £12m for the player. So far, Dzsudzsak has played few matches in Russia because of an injury, and is currently un-dergoing treatment.

Dutch-born Boussoufa played for Anderlecht, Ajax and Chel-sea, and was Belgian player of the year several times. He al-most signed for Terek Grozny, but the Chechen club failed to meet Boussoufa’s salary de-mands. According to unofficial sources, Anzhi paid Anderlecht about £8.5m for the Moroc-can international, who is paid £2.1m a year. Boussoufa has become a key player and has already scored four goals in the Russian Premier League.

A model of Tatlin’s Tower – otherwise known as the Mon-ument to the Third Interna-tional – dominates the courtyard of the Royal Acad-emy in London. The display complements the academy’s new exhibition, Building the Revolution: Soviet Art and Ar-chitecture 1915-1935. Designed in 1920, Tatlin’s Tower was planned to become the headquarters of the Comintern in Petrograd; the 400-metre structure was in-tended to dwarf the Eiffel Tower. It was to have a projec-tor that would transmit prop-aganda into the clouds for the proletariat to read. But the tower was not a practical prop-osition, structurally, and it could only ever have been built in model form. The spiralling steel and lop-sided dynamism of Tatlin’s Tower contrasts brilliantly with the symmetrical classi-cism and colonnaded facade of Burlington House. Reactions to the tower in the courtyard vary hugely, from couples en-thusiastically photographing themselves in front of it to old women shaking their heads and muttering. These differ-ences reflect the wider debate

constructivism london exhibition of soviet-era art and architecture highlights its utilitarian elegance

a movement banned by stalin is the focus of a show at the royal academy, which includes a model of the grandiose tatlin’s tower.

about the works on show in-side. Constructivism, an attempt to create a utopian architecture, is an acquired taste. With their uncompromising concrete fa-cades and deliberate lack of embellishment, these buildings are not a popular choice for preservation campaigns, but this was a time when Russia led the artistic world. Part of their appeal lies in the radical rethinking of form and func-tion that inspired their crea-tion. These early Soviet monuments – built before 1935 when Sta-lin banned constructivist ar-chitecture – were intended to support post-revolutionary life: apartments for commu-

traordinary space. The Rusa-kov Workers’ Club, also designed by Melnikov, is a fine example of form and function in harmony with lotus-like petals echoing the shape of the auditorium inside. It is harder for a lay person to understand the artistic value of a derelict factory or a crum-bling apartment block, but the exhibition helps by setting the buildings in an aesthetic con-text.The weak point of the Build-ing the Revolution exhibition is that the futurist paintings and drawings on show are only vaguely connected to the ar-chitecture in question. The ge-ometric, modernist works, se-lected from the wonderful Kostakis Collection in Thes-saloniki, certainly form an ap-propriate background for the buildings photographed, but co-curator MaryAnne Stevens’ promise to explore “the inter-play between art and archi-tecture during these heroic years” doesn’t really material-ise: the links between them are merely described as “echoes,” or “redolent of”. Nevertheless, the images do reinforce the powerful impact of the exhi-bition.

Building the Revolution: Soviet Art and Architecture 1915-1935 runs until January 22, 2012 in the Sackler Wing, Royal Academy of Arts, Piccadilly, London. “Tatlin’s Tower” is on display until January 29, 2012 at the

Stark monuments to a lost Utopia

grand designs: the tatlin’s tower model. the original was intended to dwarf the eiffel tower

phoebe taplinspeCial to russia now

nal living, bakeries to cater to the masses and press offices to spread the good news. The RA’s celebration of the utili-tarian elegance of these build-ings is organised thematically by function, with separate halls dedicated to communications, industry, health and housing.The exhibition includes vin-tage photographs of these clubs, cafeterias, towers and turbine halls, alongside Richard Pare’s images of them

seven decades later. Pare’s poster-perfect photographs are the largest and most striking images in the show. They in-clude the mesmerising hyper-boloids of Vladimir Shukhov’s radio tower; the light-filled studio of architect Konstantin Melnikov’s house; the Sochi sunset over the palm-planted Voroshilov Sanitorium and Lenin’s tomb in a crowd-free Red Square.Achitectural expert Clemen-tine Cecil calls Melnikov’s house “an icon of modernist design and one of the most fas-cinating examples in the world of an architect’s own house.” Consisting of two interlocking cylinders with diamond-shaped windows, it is an ex-

such as concept artists, girls dressed as mermaids, impor-tant clients in bathrobes and the sinister, ironic, slogan-toting Uncle Pete. The caryatids come to life if a client wishes them to and no fantasy is too excessive. The hired ideologist tells the sex workers that enemies are trying to brainwash them with a sense of economic in-justice by printing photos of oligarchs in the media and describing their freakish whims and revels. Pelevin has perplexed and delighted readers with his polyphonic sci-fi comedy for two decades. In his first novel, Omon Ra (1992), the hero at-tempts to escape the Soviet nightmare by becoming a cosmonaut, only to find him-self part of a farcical mock-heroic moon landing. The Russian Film Festival in London opened this month with the UK premiere of Generation P, a film adapta-tion of Pelevin’s book set in the chaotic Nineties as seen through the eyes of a poet turned copywriter. Pelevin’s most recent selection of sto-

in this surreal story by the Russian master of postmodern science fic-tion, Victor Pelevin,

young Lena is employed to stand naked for hours at a time and sing. She and her fellow caryatids are green-painted ornaments in the malachite hall of an elite underground nightclub. To enable them to keep suffi-ciently still for up to two days, they are given doses of a classified serum, Man-tis-B, whose unusual side-effects form the thrust of the narrative. In true postmodern style, these drug-induced epi-sodes are interspersed with other voices: pseudo-pre-tentious extracts from the magazine Counterculture; a lecture from an ideolo-gist; and encounters with other bizarre denizens of this subterranean world,

read russia

Join the fantasy club for sci-fi that comes to life

title: The hALL oF The Singing CARyATidSauthor: ViCToR PeLeVinpublisher: neW diReCTionS

ries, Pineapple Water for a Beautiful Lady (published last year), has been short-list-ed for the Nose award for new literature.Pelevin’s novels draw inter-esting parallels: Lena and Omon are victims of the sys-tems they live under, duped by the authorities and kept literally and metaphorically in the dark. In the novel, the building of a secret entertain-ment complex for politicians and businessmen echoes the construction of Stalin’s war-time bunker beneath Iz-mailovo, where a sports sta-dium was built above ground to conceal it. Pelevin’s night-club is built 1,000ft under-ground to double as “a bomb shelter for the national elite in case of war or terrorist attacks”.The Hall of the Singing Car-yatids was published last month in Andrew Bromfield’s English translation. It forms part of New Directions’ se-ries of literary pearls de-scribed as “miniature mas-terpieces”. The story first appeared in a 2008 collec-tion of Pelevin’s short stories, with the surreal title: P5: Farewell songs of the politi-cal pygmies of Pindostan.Recreating this dream-like fable as a stand-alone novel-la possibly throws too much symbolic weight on to the story’s delicate frame. But-this comic gem makes a per-fect introduction for English-speakers to Pelevin’s multi-faceted work, as well as a welcome addition to his oeuvre for existing fans.

phoebe taplin

Constructivism, an experimental attempt to create a utopian architecture, is an acquired taste

nationality: RuSSiAn

age: 28

position: MidFieLdeR

nationality: BRAziLiAn

age: 23

position: MidFieLdeR

nationality: MoRoCCAn

age: 27

position: MidFieLdeR

nationality: hungARiAn

age: 24

position: WingeR

Fan club: anzhi striker samuel eto’o meets a young admirer on a visit to a school in makhachkala

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