Russia Now #3.11

Celebrating 50 years of Yuri Gagarin’s space flight P.08

Fries and fizz are just for starters...

P.04

Russian literature – a star is reborn

Writers and publishers rise to challenge of future

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Big Macs and Coke, the Cohons’ gifts to USSR

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Tuesday, March 29, 2011

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News in Brief

Nuclear crisis Russian specialists offer to assist Japan as a nervous world watches and waits

The ghost of Chernobyl

Anti-corruption bill clears first hurdle A new anti-corruption bill sponsored by President Dmitry Medvedev has passed a first reading in the State Duma, the lower house of parliament. The bill forbids prison sentences for many types of economic crimes and introduces fines as a punishment for bribe-taking by officials. The law would also bring Russia closer in line with international standards for fighting corruption. It signed the UN Convention Against Corruption in 2006, but has struggled to put all of its recommendations in place.

The bill has been backed by Prime Minister Vladimir Putin, who also heads the dominant United Russia Party. Politicians must be “transparent”, he said.

Russian veterans of nuclear disaster control stand ready to assist Japanese teams still fighting overheated reactors at the Fukushima plant.

Alexander Emelyanenkov special to RN

Fourfold increase in alcohol tax planned The Finance Ministry has proposed big increases in taxes on alcohol and cigarettes to help plug gaps in the budget. The proposed fourfold increase in alcohol tax from 220 roubles (£4.80) per litre today to over 900 in 2014 would cause the price of the cheapest bottle of vodka to increase from 98 roubles to 210 roubles.

Analysts says the black market for alcohol would grow if the proposals are implemented. Cutting alcohol consumption is a priority for the government.

Star-studded party for Gorbachev, 80

getty images/fotobank (2)

As the catastrophe at the tsunami-hit Fukushima nuclear power plant unfolds, Russia, with its proximity to Japan and vivid memories of the 1986 disaster at Chernobyl, is following developments more closely than most.

The question on the minds of Russian experts, and much of the world’s population, is: how bad will this get before it gets better?

The good news is that there appears to be no immediate threat of a Chernobyl-scale disaster for Japan and neighbouring countries, according to the crisis centre at Rosatom, Russia’s state nuclear energy corporation. Rosatom has been monitoring the situation since the devastating earthquake and tsunami struck on March 11.

“The equipment proved even more reliable than we could have expected. It has coped quite well,” said Rosatom’s director general, Sergei Kirienko, whose organisation has offered assistance to the Japanese.The situation at the fifth and sixth reactors at Fukushima had been stabilised, Mr Kirienko said, and the threat of disaster at other reactors was receding.

The bad news is that the plant is still emitting radiation. Gaseous fission material is being emitted into the atmosphere with steam and dust, which is being carried over long distances. And much radionuclide-contaminated water, which is used to cool the reactors, is flowing back into the ocean along with spent nuclear fuel.

Atmospheric currents are moving mostly from the Japanese coast into the Pacific Ocean and towards North America, where minuscule traces of radiation have already been detected in Washington and California. In Europe, the first traces of radioactive iodine thought to originate in Japan were registered in Iceland last

Workers brave high radiation levels in an attempt to salvage the situation at the stricken Fukushima plant. Recent events recall the accident in 1986 that devastated Chernobyl (inset)

Wednesday, detected by radiation monitoring stations operating under the Comprehensive Nuclear Test Ban Tr e a t y O r g a n i s a t i o n .

Patrol missions have been set up at 63 points around the world, 15 of which have traced radioactive particles to Fukushima.

The International Atomic Energy Agency (IAEA) says that radiation levels detected so far pose no threat to human health and do not require any preventive measures. But it is believed they could potentially trigger ailments among some people at a psychological level.

At the disaster scene, radiation levels within the 30km (19-mile) evacuation zone were still 1,000 times above normal, although experts said the situation was man-

ageable. “This is not at all a meltdown – if that had happened we would be seeing a completely different radiation picture at the site and outside it,” said Alexander Bychkov, deputy director of the IAEA. The disaster, triggered when the tsunami swamped infrastructure around the six reactors at Fukushima, came six weeks before the 25th anniversary of the explosion of the fourth reactor at Chernobyl on April 26, 1986.

Caused by human error rather than nature, the meltdown at the Ukrainian plant was the worst incident in the history of nuclear power generation. The explosion of the reactor and subsequent fire emitted huge amounts of radioactive substances into the atmosphere and contaminat-

ed much of Europe. At least 4,000 people are believed to have died as a result of the disaster, according to the World Health Organisation, and the health of tens of thousands was damaged.The last operating reactor at Chernobyl was only permanently shut down in December 2000.

By contrast, the situation at Fukushima more closely resembles the loss-of-coolant accidents at the Hungarian Paks plant in 2003, and America’s Three Mile Island site in 1979.

In the broader picture, the nature of the Japanese disaster has implications for industries other than nuclear power generation, according to Nikolai Laverov, the vice-president of the Russian Academy of Sciences.

“We cannot develop dangerous industries without due consideration of natural processes. The worst catastrophes in recent years, some with huge numbers of human victims, have been triggered by the water element, so we should think carefully before deciding to situate new atomic power plants and large oil refineries in coastal zones.”

The Japanese disaster had provided a case study of how large oil-refining facilities would burn when affected by the elements, said Mr Laverov. He added:“This will deliver a colossal blow to the ecology, to say nothing of the economic damage.”

The death toll in Japan is 10,800 with 16,000 missing and the economic cost is put at $205bn (£129bn).

Whether Tokyo will yet call

on Russian experience to help control the reactors was unclear, but help was at hand, officials in Moscow said.

“Rosatom is ready to help Japan resolve the situation at the crippled atomic power plant Fukushima-1, should we receive such a request,” said Sergei Novikov, head of communications at Rosatom.

“As soon as our Japanese colleagues tell us what help they need, naturally, we will respond immediately.”

The Russian leadership responded to the disaster by ordering safety checks at all of its own nuclear plants and those built for foreign governments. But there would be no retreat from nuclear power expansion plans, Mr Novikov said. future still nuclear, page 5

Energy Competition between gas link projects hots up as Germany’s BASF lines up beside Gazprom

War and nuclear fears fuel pipeline race Yuri Solozobov

special to Russia now

A pipeline race between Russia and the EU and the United States has intensified amid fears of energy shortages following the turmoil in North African states that produce natural gas.

With the European market standing to lose up to 10 billion cubic metres of gas a year because of the conflict in Libya – and up to 50 billion more if the conflict spills

getty images/fotobank

Former Soviet president Mikhail Gorbachev, who was 80 on March 2, will celebrate his birthday at a charity concert at the Royal Albert Hall on Wednesday, March 30. The Queen is reported to be attending.

The concert line-up includes Roxy Music frontman Bryan Ferry, mezzo-soprano Katherine Jenkins and conductor Valery Gergiev. It aims to raise funds for Gorby 80 Ltd, which Mr Gorbachev and his daughter Irina founded to help children suffering from leukaemia.

Most of the proceeds will go to the Raisa Gorbachev Children’s Institute of Transplantology and Haematology in St Petersburg, named after Mr Gorbachev’s wife, who died from leukaemia in 1999.

The event will be presented by the Hollywood stars Sharon Stone and Kevin Spacey, and will include the premiere of a documentary about the former president’s life, family and career.

In this issue Opinion

into neighbouring Algeria – interest is growing in Russia’s South Stream pipeline project, with Germany’s BASF bringing $2bn (£1.2bn) on board last week.

“Political instability in Africa and the Middle East, along with fears that a nuclear meltdown in Japan might prompt national governments in Europe to curb their nuclear programmes, makes Gazprom’s South Stream increasingly attractive,” says Yevgenia Dyshlyuk, an analyst with the Russian investment company TKB Capital.

With the competing Nabucco pipeline project of several EU countries, and the US unable to secure sufficient

getty images/fotobank

Events in North Africa and Japan have added fresh impetus to Russia’s South Stream gas pipeline project, as it races for the tape against European and American competitors.

photoxpress

reuters/vostock-photo

Blazing a heavenly trail for humanity

Pipe dream: workers at Germany’s port of Lubmin lower a section of pipeline into place as part of the Nord Stream gas link being built from Russia

guaranteed gas imports from Azerbaijan, Turkmenistan, Iraq and possibly Egypt, Russia is poised to make up any shortfalls in demand.

Russia currently delivers around 150 billion cubic metres of gas to the EU a year and has the capacity to sell more: a quarter of the world’s proven reserves lies in the Russian Arctic region.

But with some analysts saying as recently as earlier this month that South Stream was on the verge of collapse, the addition of the German giant BASF to a line-up that includes Gazprom, Italy’s Eni and Électricité de France may well have rescued the project with added muscle.

“The appearance of the new

partner in the South Stream project will speed up the signing of Gazprom’s agreements with countries the pipeline will pass through,” said Anna Znatnova, analyst at Alemar Investment Financial Corporation.

To avoid disputes between Moscow and Kiev that have previously paralysed supplies to Europe, South Stream is designed to carry Russian gas under the Black Sea and across Bulgaria to markets in southern Europe. Its eventual capacity is estimated at 63 billion cubic metres a year – about what Europe will lose if Libya, Algeria, and Egypt fall out of the continued on PAGE 4

niyaz karim

The Libya dilemma Russia seeks united voice on a spiralling conflict Turn to page 3

02

Politics & Society

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North Caucasus A region blighted by conflict is now turning to holidaymakers to boost the local economy

Fighting terrorism with tourism A plan to tackle unrest in the North Caucasus by boosting tourism has many critics. RN joins one of its champions to see what is at stake.

ARTEM ZAGORODNOV

The sins of the past

In 1999, a bomb at the central market ofVladikavkaz left more than 50 dead; in 2010, another attack in the same

ria novosti

RUSSIA NOW

Divine view: the Alansky Epiphany Monastery in North Ossetia’s Kurtatin Gorge

Interview taymuraz mamsurov Big country: the Adyr Su Valley in the Caucasus Mountains of North Ossetia

location killed 19.The culprits were convicted and sentenced, but these blasts, along with the Beslan atrocity, caused lasting damage to the republic’s reputation.

And image is not the only problem.“In Soviet times we got by pretty well as a transit point for tourists,”Mr Karsanov says, steering down a valley between pristine snowcapped peaks.“Nowadays the

Tourism is seen as a remedy for many ills, bringing economic stimulus, jobs, and a sense of purpose places they used to go to, like Georgia and Abkhazia, are either an independent country or no longer popular.We have to be the destination, and that’s a lot harder.”

But the flow of visitors is growing. Near one four-star hotel under construction, a tourist group from St Petersburg is boarding its bus.“We’re here to ski,” says Alyona.“So far it’s been fun.”

Oleg Karsanov’s plan is twopronged: to build up basic infrastructure such as roads, plumbing and electricity via state grants, and to provide incentives for investors to open hotels and other amenities.“The infrastructure is the

expensive part we have to take care of ourselves. Nobody’s going to invest until it’s here,” he says.

The minister initially hopes for the support of the large North Ossetian diaspora in Russia and abroad, which includes such names as the former national football coach Valery Gazzaev and the conductor Valery Gergiev.

Rostislav Khortiev, 50, a businessman, has already taken the plunge, returning from Siberia three years ago to build a £1.7m hotel project 75 miles fromVladikavkaz. Employing 35 people, the hotel hosts groups from across Russia on skiing and fishing packages.

“The local government helps a lot by not interfering with what I’m doing, which is very rare in Russia. I haven’t paid a penny in bribes. But the federal government still hasn’t built all the infrastructure that was promised. It will only become profitable once a road is in place.”

Another half-hour’s drive west lies the abandoned 14th-century farming village of Tsemeti, a cluster of stone temples and roads perched atop a hill a few hundred feet above the valley floor.

“It’s a great place to make an ethnic village for tourists,” Mr Karsanov gleams.

“Most of these stone buildings are in pristine shape. I

want to convince a few locals to move in seasonally, accommodate guests and raise livestock like they did hundreds of years ago.”

Meanwhile, his department is trying to get eco-tourism off the ground by exempting locals from taxes while they open up to paying guests.

“Right now, it’s just about letting people try to make an extra buck,” he says.

World-class ski slopes

The most ambitious element of the plan revolves around Mamison, a $1bn (£615m) ski resort under construction two hours’ journey south-west of Vladikavkaz. The completed site will have more than 60 miles of slopes of assorted grades at altitudes of 1,900 to 3,300 metres.

“Unfortunately, there are still few – if any – world-class ski resorts in Russia. Mamison will offer our countrymen the opportunity to experience world-class skiing without leaving the country,”Mr Karsanov says.

There is stiff competition across the North Caucasus for a piece of the federal funding pie. But Mamison is the largest of five approved resort projects, and is slated to receive $600m (£370m).

However, sceptics predict that the programme’s impact will be limited.“Building up tour-

ism is a legitimate way of injecting money into the local economy and boosting other sectors such as construction, but it won’t resolve the problems it’s designed to fix,”says Nikolai Petrov, a security expert at the Moscow Carnegie Centre. And for the locals, seeing is believing when it comes to grand projects.

“It all sounds a little utopian t o m e ,” s a y s G a l i n a Gokashnavili, a teacher in Vladikavkaz. “They’ve been talking about building something like Mamison since the Seventies, and now we have a bad reputation. People from the surrounding area might go, but not from Moscow.”

“When people look at a map and see we’re only ‘millimetres’ away from places like Chechnya, they are discouraged,”concedes Oleg Kalayev, first deputy prime minister of North Ossetia.

“But when we had Western experts examine the location from a helicopter, they said that the potential was there,” he adds.

The Sochi Olympic Winter Games in 2014 will help, Mr Karsanov believes.“Not only will they show southern Russia in a more positive light, but more Russians will become interested in skiing, as happened in other countries. And this will bring more tourists here.”

Time to remember, heal and build a good future RN spoke to Taymuraz Mamsurov, president of North Ossetia, about Beslan, jobs, and bringing peace to this troubled region.

Why would a family choose to fly to the North Caucasus for a holiday rather than a region with a more stable reputation?

It’s a psychological barrier we have to overcome, and this will take time. We can’t do this through a barrage of advertising – this will only have the opposite effect.What we need is for people to come, have a good time, and recommend it to their friends.

Have the upcoming Winter Games in Sochi affected the republic?

Of course.We supply raw materials and some of our construction workers are there.

After the Games are over, we’re going to receive one of the ice arenas to be used in Sochi here inVladikavkaz. It’s not the Sochi Olympics; it’s the Russian Olympics. And we all – from Kamchatka to Kaliningrad – have to do our part to make them great.

Your region has relatively low unemployment (12 per cent).

How did you achieve this?

The Caucasus always had excessive labour, even in Soviet times. Back then they would

ruslan sukhushin

alamy/photas

The drive from Vladikavkaz airport into the North Ossetian capital passes through the village of Beslan and by the monument to 334 victims, – more than half of them children – of the 2004 school siege that won the region global notoriety. “A horrific tragedy; several of my relatives are buried here,”says Oleg Karsanov, the republic’s tourism minister, as we pass by the graves, the nearby mountains obscured by overcast skies.

Here, as in many parts of Russia’s troubled North Caucasus, one would expect the history of violence and horror to blight hopes of attracting visitors. But amid a wider $15bn (£9.2bn) federal programme to develop resorts across the entire region, presented by President Dmitry Medvedev at the Davos summit in January, tourism is now seen as a remedy for many ills, bringing sorely needed employment, economic stimulus and a sense of purpose.

For his part, Mr Karsanov is determined to rebrand his native North Ossetia and turn the mountainous republic into a magnet for tourists. There is already a solid core of 100,000 visitors a year –mostly Russian but including around 10,000 foreigners – and Mr Karsanov wants to double the total by 2014.

“I spend half of my time convincing investors we’re a good place to put their money, and the other half fighting red tape here on the ground,” he says, with the measured tone of a man on a mission.

Mr Karsanov, 43, spent eight years in London in the Nineties, running a consulting firm and attaining an MBA, before deciding to go back to his roots. After holding several posts in local government, he was tasked with nurturing regional tourism; he had developed a solid bank of targets four years before the federal model appeared. A grim legacy meant that his work was cut out for him.

fill one job with three people to combat unemployment; it was economically inefficient, but unemployment was considered a greater problem.

Which sectors could drive the republic’s economy over the coming decades?

Metallurgy and forestry are obvious choices based on our natural resources. They provide the inputs for construction and manufacturing, specifically road-building and furniture-making.

We also must learn to take advantage of our hospitality via the services sector. We’re investing resources and providing basic management training for our youth.

Does North Ossetia still feel the wounds of Beslan?

We will feel and remember this for a very long time.There are things that are hard to forget, there are things that are

impossible to forget, and there are things that shouldn’t be forgotten. Beslan belongs to the second and third categories. The kids who were four or five years old – may they live to be 100 – will therefore remember it for 90 years or more. We always have to remember Beslan, even when so much time has passed that it seems like it couldn’t have happened.

Do you believe in the success of the programme to develop tourism in the North Caucasus? Will violence decrease?

I’m convinced we’ll have a long-lasting peace during my lifetime, but I wouldn’t connect this directly to developing tourism.

Then what factors will facilitate this long-lasting peace?

The younger generation has proven itself remarkably adept at adjusting to new realities, utilising its talents and maintaining honourable values. We had groups of young people here from Chechnya, Ingushetia and KabardinoBalkaria, and the positive interaction that goes on between their youth and ours is remarkable.This youth will lead us to a prosperous future.

Prepared by Artem Zagorodnov

Terrorism As the government steps up the fight against Islamic militancy, a media-driven witch-hunt is escalating

Amid growing public alarm at terrorism rooted in the North Caucasus, families of dead insurgents are victims of suspicion and hysteria.

Anna Nemtsova

Special to Russia Now

Zaira recently gave birth to a boy. But outside her home of Makhachkala, the bustling capital of the Russian Republic of Dagestan, people think of her not as a mother, but as a potential killer. On a recent shopping trip, she says, customers pointed and said, “Here comes the martyr.”

Now, she prefers to stay at home, “locked between the four walls”of her apartment, rather than confront the accusing looks of strangers in this largely Muslim region of southern Russia.

The nightmare for Zaira

began last spring, after two women from Dagestan blew themselves up in the Moscow Metro, killing 40 and injuring more than 100 passengers. They shared more than geography with Zaira.

Like her, their former husbands were insurgents who had fought Russian forces in the North Caucasus and been killed. Because a number of suicide bombers targeting Moscow have been the wives of dead rebels, they were called“Black Widows”by the Russian media.

After the attack, Komsomolskaya Pravda published the photographs of 22 actual and potential Black Widows, along with personal information, such as the districts in which they lived.

The first portrait was of one of the Metro bombers. The

headline said:“1,000 widows and sisters of Dagestan guerrillas help terrorists.”

Zaira’s picture was among the 22, a clear accusation that she was a potential suicide bomber, someone to be feared and watched.“How reckless of them to put me on that list,” Zaira said in a recent interview. “If I wanted to commit a terrorist attack, I would not have lived openly in Dagestan’s capital. I would not have enrolled my son in school.”

In the previous decade, Russia’s security agencies tended to label all fundamentalist Muslims – called Wahhabis by the police – as terrorist suspects. And the police have engaged in brutal tactics to suppress a violent insurgency, according to human rights activists.

“Your house gets burned, and you and your family may ‘disappear’ or be murdered,”says Tatyana Lokshina, of the Moscow office of Human Rights Watch.“Brutal methods and the lack of free space for alternative opinion or religious views push youth into the underground.”

According to Zaira, when the list of the widows was released to the newspaper by officials, nobody cared much about the women’s rights, or the effect such a branding might have on their lives. It was just another tactic in a dirty conflict.

The police insist they are fighting a deadly enemy in the Caucasus. Last month, they arrested another young woman and alleged Black Widow in the Republic of Ingushetia. Fatima Yevloyeva,

© oksana ushko

Guilt by association: the rebel widow’s tale

Zaira, the widow of a dead Dagestani insurgent, offers prayer as she tries to salvage her life

22, is a sister of Magomed Yevloyev, the suspected suicide bomber who struck at Domodedovo airport in January, killing 36 people.

Investigators say Fatima had traces of explosives on her hands; allegedly she helped her brother to build the bomb. Fatima’s husband, a

suspected insurgent, was killed last summer.

Last year, 68 people died and 195 were injured in 112 attacks in Dagestan, five of them committed by suicide bombers, while Human Rights Watch reported 20 abductions and the killing of eight fundamentalist Mus-

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lims by the police in the last six months of 2010. According to deputy prosecutor general Ivan Sydoruk, there were twice the number of terrorist attacks here in 2010 than in 2009 in the entire North Caucasus.

But as the conflict hots up, its workings remain murky.

Gennady Gudkov, a deputy in the State Duma and the deputy head of the security committee, says legislators need new political power to oversee counter-terrorism efforts by the security services, especially the National Anti-Terrorism Committee.

“We deputies are not allowed to investigate the committee’s work,”he says.“So it is a big secret what methods they are using to fight terrorism. We have no idea.”

And the case of Zaira suggests that some of those methods may be counter-productive. Since her first husband was killed six years ago, Zaira says she has tried everything to move on and build a new life. She remarried, had another baby and got a job. All of that collapsed with the newspaper list. She lost her job as a cleaner; she took her eight-year-old son out of a secular school, and enrolled him in a private religious school, after a teacher beat him for being a Wahhabi. The police, she says, frequently question her.

“We wish we could fit in,”she says, “but we are being pushed out.”

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section sponsored by rossiyskaya gazeta, russia Distributed with THE daily telegraph TUeSDAY_MARCH 29_2011

LIBYA CRISIS DEMANDS A SINGLE VOICE Fyodor Lukyanov

russia in global affairs

niyaz karim

T

he air campaign against Colonel Gaddafi’s forces in Libya has had an unexpected consequence far from the front lines: it has resulted in the first distinct manifestation of disagreement within Russia’s ruling duo. And the evident difference in position between President Dmitry Medvedev and Prime MinisterVladimir Putin has revealed a fork in the road for Russia’s foreign policy.

When questions of war and peace are being decided, powers that aspire to a global role should occupy a clear position – either for, or against. In the case of Libya, Russia abstained from voting on the UN Security Council resolution.

Abstention under President Medvedev contradicts Russia’s prior strict adherence to a single foreign policy principle: opposition of foreign interventions in internal affairs. Moscow has only once sanctioned military action against a sovereign state – 20 years ago, when Iraq occupied Kuwait and action was aimed at punishing an aggressor. In former Yugoslavia and Iraq in 2003, Russia came out against such action, and at the height of the crisis in Zimbabwe in 2008, it infuriated the United States and Britain by wielding its veto to block a UN resolution imposing sanctions on Robert Mugabe’s regime.

Incidentally, many people at the time said the Russian position was the result of disagreements between Mr Putin and Mr Medvedev. At a G8 meeting ahead of the UN vote, the new Russian president supported a petition criticising Mr Mugabe.

Commentators in the West supposed that the prime minister must have overruled the president behind

the scenes, whereafter the Kremlin’s position changed.

But this is just speculation, and in all likelihood does not correspond to the reality. At the G8 meeting there was talk only of a political condemnation of Harare, whereas at the meeting of the UN Security Council, the United States and Britain immediately proposed tough sanctions that had not been agreed on with Russia.

Be that as it may, Russia did not have its own interests in Zimbabwe and its decision was based on principle.

These days, the Kremlin remains neutral, although the case of Libya is far more urgent. As for the real goal of the military campaign, there

Russia now regards itself not as a likeness of the Soviet Union, but as a major regional power The simultaneous declaration of two approaches puts Russia in a weak and ambivalent position

should be no illusions: the aim is regime change. Any scenario that leaves Muammar Gaddafi in power would be a moral and political defeat for the West and Westfriendly regimes in the region. And given the example of Saddam Hussein, Col Gaddafi knows what his fate will be if he is overthrown.

Neither side can back down now.

In the case of Libya, Russia voted pragmatically. There was no need to take a stand when the action was approved – regardless of motives – by leading countries in the Middle East.

To Moscow, Col Gaddafi is just one of many partners, and for Russia to jeopardise

the current positive dynamic in relations with the US and the EU for the sake of Tripoli makes no sense. Deliberations about lost contracts in Libya are a waste of breath: given the situation there now, there would be no more business as usual with the Libyan ruler anyway.

The geopolitical purpose of Operation Odyssey Dawn for Washington is to stop the erosion of its influence in the Middle East, while for Europe it is to prevent the definitive loss of its international role. If they put a quick end to the Gaddafi regime they will have achieved their aim, at least for a while.

But if the operation drags

Vladislav Vorobyov

special to rn

R

ussia’s recent announcement of a massive rearmament drive – worth $700bn (£430bn) through to 2020 – has caused not a little consternation in the West. Maybe it’s just old habits from an uneasy past kicking in, but the truth is, few can still intelligently explain what exactly London, Washington, et al are afraid of.

In the aftermath of the Second World War, the Soviet armed forces were indeed formidable. The largest, the most combat ready, and, admittedly, the most unpredictable geopolitically. The West had something to fear. Many a Western politician lost sleep over the prospect of Soviet tanks rumbling across t h e n o rt h e r n G e r m a n plains.

But times have changed. The Soviet Union collapsed, the once indomitable Red Army rapidly decayed, and once scrupulously equipped regiments waited decades for new arms. At times during the post-Soviet period, the West was less afraid of the Russian army’s might than it was of its weakness and its poorly controlled nuclear arsenal. Foreign intelligence services were left trying to anticipate which terrorists might manage to get their

hands on one or more nuclear warheads from Russia or its neighbours.

But the roller coaster of major upheavals appears to have come to an end, and the country has been able to reset its economic model.

While many issues remain to be resolved, the state coffers started to fill with billions of dollars, and eventually the time came when fiscal authorities could pay proper attention to the military.

The Russian rearmament programme was finally adopted, and the government makes no secret of wanting to kill two birds with one stone: to implement the most modern overhaul of the armed forces while investing billions in upgrading a huge number of companies that have diversified into non-defence manufacturing.

One would think Western governments would be relieved. The long-obsolete computers that run Russia's strategic forces will at last be replaced by state-of-theart systems. This means the threat of an accidental ballistic missile launch in a random direction will be greatly reduced. A gradual replacement of the strategic aircraft fleet will also take place. This means nuclear missile carriers will fly accident-free for at least another decade. The number of accidents involving nuclear-

Letters from readers, guest columns and cartoons labelled “Comments”, “Viewpoint” or appearing on the “Opinion” and “Reflections” pages of this supplement are selected to represent a broad range of views and do not necessarily represent those of the editors of Russia Now or Rossiyskaya Gazeta.

Please send letters to the editor to UK@rbth.ru

niyaz karim

dividends of military might

There are many common benefits of Russia’s rearmament programme, but the West is still alarmed

armed submarines will fall.

And Russian sailors on new vessels will be able to assist Nato, for example, in eradicating piracy along Somalia’s coast.

And so the list of common benefits of the Russian rearmament programme goes on.

But the West is still alarmed, and it seems Nato is always on the verge of panic no matter what happens in Russia.

Are we, the Russians, and a hundred or so other peoples living in Russia, really all that intimidating? Or is it that people in the West refuse to

understand that life beyond the former Iron Curtain has markedly changed?

Who would want to kill the goose that lays the golden egg? Europe remains Russia’s key economic partner.

We are already united by hundreds of multibilliondollar projects, thousands of joint ventures and many millions in investments. What sense would it make to threaten those who regularly accept hordes of Russians for Christmas and NewYear festivities, as everyday friends and colleagues? And

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Comment & Analysis on and requires more than air strikes, which looks probable, the effect may be just the reverse: Western influence may plummet in the region. Arab regimes that supported the action will also be in a vulnerable position.

Their hope is to distract attention from internal problems, but as a result, they risk triggering a radicalisation of the masses, which will accuse the powers-thatbe of betraying the interests of Arab nations.

All scenarios are on the table at this point, and there is the sense that the initiators of this war do not have the faintest idea which scenario is most likely to play out.

After the collapse of the Soviet Union, Moscow was at pains for a long time to assume or at least imitate the status of a global power, participating in all decisions on the international stage.

But towards the end of the last decade, Russia began to see itself not as a likeness of the former Soviet Union, but as a major and influential, although regional, power whose vital interests have definite geographical contours. To defend its interests, Moscow is ready to use force, as it did in South Ossetia. All other actions are subject to negotiation or non-participation. Mr Medvedev’s statements on Libya reflect this position.

In contrast, the striking messages from Mr Putin show a global and universalist approach. The prime minister called the action against Libya “a medieval crusade” and American militarism a persistent tendency. Mr Putin’s position insists on principles and the need to resist world hegemony. This means the interests of Russia as a global power are not confined by regional frameworks, and that abstention is not an option when making decisions based on principle.

Both approaches have the right to exist, but it would be advisable to pick one of them and stick to it. Simultaneously declaring both puts the country in a weak and ambivalent position, indicating that the Russian leadership has no mutual understanding and no coordinated policy. This is especially dispiriting at a time when chaos is only increasing around the world.

Fyodor Lukyanov is the editor-in-chief of the journal Russia in Global Affairs.

what would be the point of spoiling relations with Moscow’s strategic partners in the struggle against global terrorism?

Yes, Russia remains the world’s largest country with a population that wants to feel protected. Yes, Russian voters must be confident that the government is capable of an adequate response to any external threat, and rusty armaments dating back to the Sixties, fighter jets with broken engines and tanks stripped of tracks scarcely fit the bill.Yes, Russia, as well as the West, has learnt its lessons from the past and believes in “trustbut-verify” political wisdom.

And verifying is not possible without the latest and greatest ground- and spacebased surveillance systems.

Moreover, what should we tell our children if, God forbid, terrorists should capture another school like they did in Beslan?“Sorry, but we decided not to invest in defence so as not to rattle our neighbours.”

All of this applies equally to the Americans, French, British or Germans, who know that they will be protected and that any threat towards them will be squarely met.

Emotions aside, the rearmament of Russia is both logical and justified. Western countries regularly spend billions on defence. Why do the Russians deserve anything less?

V l a d i s l a v Vo ro b y o v i s foreign policy observer at Rossiyskaya Gazeta.

03

THE WEST’S iLLUSIONS OF REVOLUTION Yevgeny Shestakov

I

special to Rn

n spite of the bloody events in Libya, the Western world still seems to be euphoric about the revolutions in North Africa.

This is no great surprise, since Europeans have never before seen young people in cities there coming out in support of Western values, free speech, free and fair elections and freedom of assembly.

The television images have brought back fond memories of 20 years ago, when the peoples of Eastern Europe overthrew their Communist regimes, touting the same democratic slogans that we are hearing from the youth in North Africa today.

In the European Union, people have suddenly stopped fearing that pro-Western Arab leaders might be succeeded by Islamic fundamentalists. They have come to see the bogey of radical Islam played up by political scientists as little more than a myth. The consequences of this radical turnaround of consciousness are both positive and highly negative.

Lack of fear is blunting the

The revolutions that have gone off so smoothly in Tunisia and Egypt are a far cry from what is currently happening in Libya. Events there have now gone terribly awry

The only revolution that could possibly happen in Central Asia is an Islamic one. The secular democratic opposition in the region is too weak to hold power sense of self-preservation that has traditionally informed the attitude of Europeans to their North African neighbours.

Yet it must be remembered that the revolutions that have gone off so smoothly in Tunisia and Egypt are a far cry from what is currently happening in Libya. Just a couple of weeks ago, it seemed that democracy would triumph there and Gaddafi would escape to a Latin American country. But events there have since gone terribly awry, and what started as a popular uprising has now mushroomed into a civil war.

It is doubtful that Europe expected such a bloody regime change in Libya. This distinctly non-textbook scenario of transfer of power will probably cool many hotheads in other countries dreaming of change. Presidents in Central Asian countries have been in power for several successive terms, yet European public opinion is gravely mistaken if, having come to believe in the possible Europeanisation of Tunisia, Egypt and perhaps Bahrain, it anticipates that a similar scenario will play out in the Central Asian states recently created in the outposts of the former Soviet Union. Their leaders, who may rightly be called the founding fathers of their nations, will not be forced to relinquish power without a bloodbath.

The revolutionary sentiments of the Arab world may, indeed, reach Central Asia, Russia’s “soft underbelly”. A

number of political analysts consulted by this author admit such a possibility.Yet the scale of future protests would depend on the early results of the continuing spate of revolutions. If they lead to chaos and protracted civil wars in Egypt and Tunisia, along the lines of Libya, and if formerly stable North African countries become Somalia-like quasistates, Europe will hardly wish for a repeat of such a scenario in Central Asia.

As one Soviet-era song puts it: “Revolution has a beginning but it does not have an end.”Europeans should bear this in mind if they do not want to sit atop a powder keg for many years to come.

If the world community fails to avert chaos in key North African and Middle Eastern countries, various pro-Islamic terrorist groups, riding the crest of popular uprisings, will gain access to huge resources and will penetrate vast territories.

Then these forces will come to Central Asia, which they perceive as another bridgehead in the attack on Europe, not in sorties, but in a massive, armed onslaught.

Is that the kind of bearded Taliban-style revolution that people in the Old World want to see?

According to the Collective Security Treaty Organisation, which includes Russia, Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan, several years ago the Taliban in Afghanistan were discussing ways to destabilise the situation, first in Central Asia and then in the Caucasus. If these plans materialise, Nato troops in Afghanistan will have to open up what would amount to a “second front” against the enemy.

So far, Islamic radicals are concentrating their resources mostly in Afghanistan and Iraq. But the extremists’ potential will grow dramatically if radical Islam succeeds in unleashing chaos in the vast expanse from Morocco to Saudi Arabia.

The only revolution that could possibly happen in Central Asia is an Islamic one. The secular democratic opposition in the region is too weak to hold the reins of power. Some cities might, of course, see outbreaks of unrest inspired by the events in Egypt and Tunisia, but local authorities are prepared to quash any such protests. The key causes of the recent revolutions have been the absence of any so-called social lifts, which are capable of dampening popular discontent and mitigating economic problems.

With the possible exception of Kyrgyzstan and Tajikistan, however, the situation in the Central Asian countries is fundamentally different.

They are experiencing an economic boom driven by growing energy prices, enabling the old Soviet-era elite to skilfully contain broad protest sentiments. These former “apparatchiks”, who went through fire and brimstone under Socialism, know exactly how to nip popular unrest in the bud.

The North African revolutions might, indeed, prompt even the more autocratic Central Asian regimes to think about putting a series of cosmetic reforms in place.

These reforms will create a semblance of change without posing a serious threat to the rulers. And they may just prevent a classic revolutionary situation, when those at the bottom do not want to live as they did in the past, while those at the top cannot rule in any but the old way.

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

To advertise in this supplement contact Julia Golikova Advertising & PR director, on golikova@rg.ru or Toby moore on toby.moore@telegraph.co.uk © copyright 2011, ZAO “Rossiyskaya Gazeta”. All rights reserved.

Alexander Gorbenko chairman of the board. pavel nEgoitsa general director. Vladislav Fronin Chief Editor. Any copying, redistribution or retransmission of any of the contents of this publication, other than for personal use, without the express written consent of Rossiyskaya Gazeta is expressly prohibited. To obtain permission to reprint or copy an article or photo, please phone +7 (495) 775 3114, or email uk@rbth.ru with your request. RN is not responsible for unsolicited manuscripts and photos.

04

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Russia’s car market reaches critical mass http://rbth.ru/12586

Entrepreneurs Russia Now hears the latest plans of the father-and-son duo who brought two massive brands to the country

From the Big Mac to the Big Top Father-and-son partners George and Craig Cohon brought McDonald’s and Coca-Cola to Russia. Now they are set for the next bold leap with a $57m circus entertainment venture. artem zagorodnov russia now

AP

ria novosti

In 1976, George Cohon, an American-born Canadian, ran into the Soviet delegation at the Montreal Olympics. This was perfect networking for the chairman of McDonald’s Canada, who throughout the Cold War nurtured the idea of bringing the golden arches to the Soviet Union. Even then, he did not anticipate the hurdles in a 14-year process to cajole a sceptical Communist bureaucracy into opening just one McDonald’s.

When the restaurant finally opened on Moscow’s central Pushkin Square in January 1990, more than 30,000 people came on the first day, clamouring for a taste of capitalism and threatening to burst the police barricades.

Years later, Muscovites still recall the event fondly. Many Russians might turn their nose up at McDonald’s, but just try getting in line on a Sunday afternoon.

Soviet times of deprivation are long gone, but it’s this same grass-roots enthusiasm that the father-and-son team aim to tap with their latest project: bringing the new $57m (£35m) Cirque du Soleil show Zarkana to the Kremlin Palace Theatre in February 2012 – one of only two venues in the world to stage the show. Zarkana opens in New York’s Radio City Music Hall in June.

“We’ll try it in NewYork, and then take it to the Kremlin,” George says over lunch in Moscow, insisting that, ambitious as the project was, the time and business environment were ripe. They are also bringing Cirque’s main travelling show, Saltimbanco, to four Russian cities in 2011.

“It took 14 years to bring McDonald’s to Russia, four years to set up Coca-Cola distri-

On queue: a huge crowd assembles for the opening of the first McDonald’s in Moscow in 1990; inset, George and Craig Cohon have plenty to smile about

Unlike many other businessmen, the Cohons say they were never asked for a bribe ‘I was here when tanks shot at the White House in 1993. We continued business’ bution and production, and eight months to get Cirque du Soleil rolling,” he says.“I think that’s a good barometer for the ease of doing business here.”

“Cirque du Soleil is amazing,”Craig, 47, enthuses about the Canadian outfit, which has invested close to $50m (£30.7m) in Russia since 2008, and whose founder, Guy Laliberté, reportedly spent $35m (£21.5m) as a space tourist with the Russian space programme.

The Cohons hold another trump card: “We’re the first Western entertainment company to partner with [the Kremlin],” says Craig.

kets, the Cohons remain staunch advocates of doing business in Russia and are dismissive of the concerns of their more risk-averse peers.

“I was here when tanks shot at the White House in 1993,” says Craig, who was a key executive for Coca-Cola during its introduction to the newly opened markets of Eastern Europe in the Nineties.“We continued business.

I signed the latest deal in the Kremlin in January half an hour before the bomb went off at Domodedovo [airport].

That’s just a part of life.

“I could easily picture myself as a Russian investor in the United States saying, ‘I was here during the Oklahoma City bombing, 9/11 and the Arizona shootings and we continued business.’”

Such stoicism drew the approval of Dmitry Butrin, business editor at Russia’s leading daily Kommersant, who noted:“Business is often far away from dramatic political events. As long as an owner is physically able to continue running a store or restaurant, he will do so even in the bleakest times. This is true for all countries.”

The Cohons’ first-hand experience of Russia’s business evolution means they have built up a unique understanding of what the public wants, since that first Big Mac was served in 1990. From the start of that initial venture, George Cohon strove to make McDonald’s a people’s burger joint, triggering his own Russian revolution in service, cleanliness and, more controversially, fast food.

“There were these restaurants then that had long lines for customers with roubles and practically no lines for people with [US dollars],” the 73-year-old entrepreneur says. “We didn’t do it that way. We put the ‘roubles only’ sign outside together with [then Moscow Mayor Yuri] Luzhkov to emphasise the point.”

Cohon now has 280 restaurants in Russia and 25,000 employees. And he notes proudly that 80pc of what he sells is domestically produced, an inconceivable statistic in Soviet times. “We even export the odd pie to Germany,” he says.

Despite the inherent risks of working in emerging mar-

McDonald’s: food for thought The average McDonald’s in Russia, with 850,000 visitors a year, is twice as busy as any McDonald’s in the United States, according to The New York Times.

It all started when the restaurant came to the Soviet Union in 1990. George Cohon hired a young Chechen to manage the first Pushkin Square restaurant, no easy task in Moscow; 80pc of the products had to be imported. A proprietary factory called the McComplex was built to supply the 300 ingredients for each outlet. (In those days, there were no private suppliers.)

Today, 80pc of the products

come from local suppliers and Khamzat Khasbulatov (the young Chechen) is now president of the entire Eastern European division. The chain currently operates 280 restaurants in Russia, some in previously remote locations such as Tyumen in Siberia, and continues its rapid expansion.

McDonald’s celebrated another milestone last year when it closed its McComplex outside Moscow after outsourcing the last ingredient – hamburger buns – to a local company.

French fries are still imported because of a lack of a market for frozen potatoes: Russians still prefer to buy them fresh.

But doing good business in Russia is not all about backbone. According to Craig, the key to success here is threepronged: first, a commitment to the long-haul for real returns; second, cultivating personal relationships, and third, not managing from afar. “It’s a handshake market,” he says.

The Cohons claim they have never been asked for a bribe, unlike many Russian and expatriate businessmen.

“It could be because we have maintained our core principles from the start,” says Craig. “We’re here for the long term, we build relationships, we hire locals and we help develop other sectors

Chinese funds key to unlocking riches of Far East Rachel Morarjee

business new europe

Serving up Chinese food with lashings of mayonnaise for his Russian clients, restaurant owner Liu Yanzhao is one of many Chinese entrepreneurs hoping to make money in Russia’s Far East.

“In the old days, Russia was like China’s big brother,”says the 26-year-old owner of the White Nights restaurant in the Russian border town of Blagoveshchensk. “We all looked up to Russia but the relationship has changed.”

Mr Liu is one of the many Chinese businessmen who are hoping to make money in the resource-rich expanses of Siberia and the Far East.

With thousands of miles of unexplored forest and tundra, Russia’s Far East is sparsely populated, with only 6.7 million people. But what it lacks in people it makes up for in natural resources, with rich seams of iron ore, rare earth metals, gold and coal, which China needs to feed its hurtling economic growth.

Relations between Russia and China, which fought a border war in 1969, have long been marked by mutual suspicion. In the past, that hampered cross-border economic co-operation. But the benefits of trade and invest-

ia and Brazil. Russia was a natural alternative, and the economic crisis also made Russian companies aware of their need for foreign investment. The K&S iron ore project at Birobidjan, the capital of the Jewish Autonomous Region, is a good example of Chinese and Russian co-operation in action.

A seam of iron ore laced with titanium and vanadium runs across the Sino-Russian border. China’s iron mines have been depleted but its mills need to be fed, so Hong Konglisted IRC, which raised $241m (£149m) in an initial public offering last year, is developing mines on the Russian side of the border. The Kimkhan mine, which is the The Chinese want to first stage of the K&S project, build a steady supply is currently producing about million tons of ore, which of raw materials and 1.2 is now being exported to the infrastructure to China, and IRC plans to exget them back home port 10 million tons a year to China once a bridge is a key partner in building built to connect Birobidjan roads, railways and ports. with its largest market just “We know that Russia needs across the Amur River. The to co-operate with another new bridge would halve the country to open up the Far ore’s transportation costs of East and the natural partner $12 (£7.40) a ton, and conis China, which has far more struction of the bridge is due financial resources than ei- to start by summer.“This area ther Japan or South Korea,” is a hugely exciting one for says Boris Krasnojenov, met- companies like us and we als and mining analyst at would welcome new companies in the region, which Renaissance Capital.

The economic crisis of 2008 would increase investors’ made China look at ways to comfort,” says Jay Hambro, diversify its supply of raw the executive chairman of materials, from iron to cok- IRC. ing coal, much of which it The region’s key challenge, had imported from Austral- in common with other isoment are beginning to erode old enmities. Chinese investors have set up special economic zones in places including the Amur Region and the Primorye and Khabarovsk territories, as well as the Jewish Autonomous Region (created by Stalin in the Thirties), investing $3bn (£1.9bn) in various new projects. That compares with less than $1bn (£618m) in direct state investment allocated for the same areas by Moscow in 2011, Russian press reports say.

The Russian government has said that it wants to invest $100bn (£62bn) to develop the region over the next five years, and that China will be

continued from PAGE 1

getty images/fotobank

As the Chinese hunger for raw materials grows, so does impetus for growth in some of Russia’s most remote and neglected territory.

Rich seam: Chinese-Russian mining in the Far East

lated mining projects from Africa to Mongolia, is infrastructure, and China has the funds to solve the problem.

“China has never been interested in acquiring controlling stakes in Russian companies,”says Mr Krasnojenov.“What they want is to secure a steady supply of the raw materials they need and build the infrastructure to get it back to the home market.That is their development model everywhere.”

Not surprising then, that project financing for IRC’s K&S project was arranged

by China’s ICBC bank and the China National Electrical Engineering Company (CNEEC).

CNEEC is one of the Chinese companies working to develop the K&S mine, which is also providing jobs for Chinese workers. “We use Chinese workers to develop the

Registration rules eased for foreigners like agriculture. People who complain [about corruption] could be the ones who were burnt because they came for the quick buck.”

His theory holds water, says Mr Butrin: “McDonald’s is a franchise and is essentially selling a financial and logistical model in Russia. They are also selling an established brand that has been here for a long time. I wouldn’t expect them to encounter corruption for those reasons... and there are businesses that don’t pay any bribes.”

George says philanthropy is another critical component.

“You’ve got to do charity. A lot of my friends wanted to come to the opening of the first McDonald’s here. I said, ‘OK. You pay for your own airfare, hotel and meals. And then you cut me a check for $10,000.’All that money went to the first Soviet charity for kids. Now we’ve got our own charity that converts unused rooms in children’s hospitals to apartments so parents can stay with their kids.”

At the end of the 2010 Winter Games in Vancouver, Craig’s two children, aged 12 and 10, took part in the ceremonial handover to the Russians organising the next Winter Games in Sochi. “I think that’s the perfect archetype for the last 30 years of my life,” says Craig, who, like his father is optimistic about Russia’s future, and urges Western critics of its democratic development to be more patient.

“By 2030, I see four key points of development: the middle class learning to defend its rights via the evolution of strong political parties; business moving away from raw materials and investing in manufacturing and hi-tech, which is already happening; culture developing with a local base as opposed to being imported from the West; and Russia being a leader in anti-terrorism with the US and India.”

Meanwhile, George is thoroughly looking forward to it all. “I’ll be 93 then,” he says with a smile.

Crises in Libya and Japan fuel pipeline race

Resources Vast tracts of undeveloped territory are a magnet for investment

mine. It’s a win-win for everybody,” says Svetlana Kostromitinova, a mining analyst with Petropavlovsk, which owns a controlling stake in IRC. Enthusiasm for the Chinese presence is not universal – many locals are wary of the gradual penetration.

“The growth of China so close to our borders is really frightening. I know they want to invest, but many of us fear they will then want to control things here,” says Svetlana Ivanova, a secretary in Blagoveshchensk.

But those looking at the bigger picture say that the climate is generally receptive.

“Chinese investment is quite welcome in this area,” says Mr Krasnojenov. “All big projects in the Far East and Eastern Siberia require very significant infrastructure and China’s role will be vital.”

equation. The land portion of the project includes the construction of two pipelines, one crossing Greece to Italy, the other linking Serbia, Croatia, Slovenia, Hungary and Austria.

Russia has been working to build three pipelines that will supply the bulk of western Europe’s gas needs. It already operates the Druzhba pipeline that runs through Ukraine, and carries about 80pc of Russian gas deliveries to western European clients. It is also building the Nord Stream pipeline under the Baltic Sea that will convey Siberian gas to northern Europe via Germany. South Stream is intended to complete the trio and supply southern Europe.

Meanwhile, the competing 3,300km (2,000 mile) Nabucco line is intended to bypass Russia as it pipes natural gas to Europe from the Caspian Sea via Turkey, Bulgaria, Romania and Hungary to Austria and other countries in Europe. But the project is moving slowly because of cash and gas shortages, though its initial capacity was set at just 8 to 10 billion cubic metres a year. The planned launch has been rescheduled twice, and hopes of bringing Nabucco online in 2014 are slipping.

And as the Russian project consolidates its lead over Nabucco, its architects say their rivals are trying to hobble South Stream with alarmist comments.

“They are raising concerns over increasing dependency on Russian energy supplies

Business in brief

and the need to diversify deliveries, fearing that Russia could use the pipeline as an ‘energy weapon’,” according to Konstantin Simonov, head of Russia’s National Energy Security Fund.

But the situation is changing all the time. Another problem being faced by Moscow is the Balkan countries’ growing appetite as they look to get their piece of the Gazprom pie.

“For example, look at the difficulties that arose after right-winger Boyko Borisov became Bulgarian Prime Minister in 2009,”noted Evgeny Minchenko, director of the International Institute for Political Expertise. “Countries wishing to profit from transit operations will be bargaining and revising terms over and over again.”

Bulgaria has backtracked more than once as it tries to pressure Russia for better terms. As a result, Moscow is still undecided whether the pipeline should come ashore in Romania or Bulgaria.

The greatest hurdle, however, is Turkey, where the government had been due to approve construction of the line last November before negotiations broke down. Ankara is haggling hard for additional benefits on nuclear power plant projects and is trying to talk Moscow into extending another gas project across the Black Sea called Blue Stream.

“The Turks want to get as much as they can in return for their permit,”said Sergei Demidenko, an expert on the Middle East at the Moscow Institute of Strategic Studies and Analysis.

A law easing the cumbersome process of registration on arrival in Russia has been passed in record time following complaints from the international business community about new guidelines that came into force in mid-February.

President Dmitry Medvedev signed into law changes that allow foreigners up to seven business days (up from the current three) to stay in the country without registering, and forbidding police from collecting on-the-spot fines for violations. Any offences will now be reported to the organisation that invited the foreigner, which will be responsible for paying any penalties.

The changes are part of a drive to attract foreign talent to Russia and to combat corruption and excessive bureaucracy. The Association of European Businesses said the steps were “immediate and constructive”. Visitors often complain about the difficulty of entering Russia.

Kaspersky and Yandex attain global ranking

kommersant

The web-search company Yandex and the anti-virus software developer Kaspersky Lab fly the Russian flag in a 2011 ranking of the world’s most innovative companies. The Moscowbased companies are both new entrants in the list, released by the United States business journal Fast Company last month.

The pair are now among the World’s 50 Most Innovative Companies – above global giants such as Microsoft, Cisco and Samsung. With a 65pc share of the Russian internet search market,Yandex took 26th spot, with Fast Company praising it as one of few companies to have fended off the US giant Google – which is sixth in the list. The magazine singled out for praise the Yandex real-time traffic maps alerting drivers in Moscow and other cities to the worst jams.

Kaspersky Lab, the world's fourth-biggest maker of secure content management systems, debuts at 32. Fast Company applauded its efforts to harness Russia’s legions of hackers to help fight viruses.

GLOBAL RUSSIA BUSINESS CALENDAR EuroSummit of The European Business Union ‘EU-CIS: NEW OPPORTUNITIES FOR STRATEGIC PARTNERSHIP’ April 4, 1 Whitehall Place, London SW1A 2HD

Topics include: partnerships in oil and gas, transport and construction, telecoms and nanotechnologies; regulation of international financial markets and instruments; risk management; corporate governance of publicly owned enterprises, and International Accounting Standards. Among the invited speakers are the Russian deputy prime minister and minister of finance Alexei Kudrin, and the Russian Corporation of Nanotechnologies director general Anatoli Chubais. More on the programme at: www.eurosummit.co.uk.

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Energy Russia to keep building plants despite Fukushima

Nuclear still power of the future southern town of Akkuyu, is designed to withstand powerful earthquakes.“The plant that will be built will be an example for the rest of the world,”Mr Erdogan said after their talks.

On the same day, Russia and Belarus signed off on a $6bn (£3.7m) agreement to cooperate in building a nuclear power plant in Belarus.

Construction is due to start in September. Russia and Hungary also opened talks on the possible participation of Russian companies in a project to modernise Hungary’s Paks nuclear power plant. And at the start of the month, media reports said Russia had signed a new deal to build a nuclear power plant in Bangladesh costing $2bn (£1.25bn), citing government officials.

Yet public opinion in western Europe is wary of Russian-made nuclear power stations following the explosion at the Chernobyl reactor in 1986. Russia abandoned the Soviet-era RMBK class of reactors after Chernobyl, although there are still 11 RMBK reactors operating in Russia.

As Japan struggles to contain its nuclear catastrophe, Mr Putin stressed that Russia would continue selling nuclear technology to its allies, and that the next generation of nuclear power plants were safer than ever.

“We now have a whole arsenal of progressive technological means to ensure the stable and accident-free operation of nuclear power plants,” he said.

Russia has the youngest nuclear reactors in the world, with an average age of 19 years, compared with 26 in western Europe and 30 in the United States, according to Bloomberg. The Fukushima reactor is 38 years old, making it one of the oldest reactors in the world still in operation. It was scheduled for decommissioning this year,

Tim gosling

business new europe

As the world anxiously watches efforts to contain the threat from Japan’s Fukushima nuclear power plant, governments are either hastily re-examining their nuclear programmes, or like Russia, saying they will not scale them down.

German Chancellor Angela Merkel was forced into an embarrassing about-face after all six of Fukushima’s reactors showed signs of trouble in the days after their supporting infrastructure was washed away by the tsunami on March 11.

The chancellor ordered seven of Germany’s oldest reactors to be shut down for extensive tests, even though six months earlier, she forced through a plan to increase the amount of nuclear power Germany generates. That decision sparked some of Germany’s biggest public protests in a decade.

Most of western Europe’s leaders find themselves in a similar position, but Russian Prime Minister Vladimir Putin was quick to affirm that his country will continue to build new power stations. However, following Chancellor Merkel’s decision, he also ordered a comprehensive safety review of Russia’s nuclear assets.

His comments were followed by similar statements from the leaders of Belarus, Ukraine and Turkey, all of which recently purchased Russian-made nuclear power stations.

During a visit to Moscow in mid-March, Turkish Prime Minister Tayyip Erdogan was told by President Dmitry Medvedev that Russia would ensure that Turkey’s nuclear power plant, planned for

The disaster will not stop Russian nuclear expansion at home and abroad

The Fukushima events do not seem to have seriously dented confidence in nuclear power As economic growth strengthens, the government has little choice but to build new nuclear plants but its licence was renewed for another 10 years.

Nuclear industry watchers noted that the emerging markets were keenest to buy into the field.

“Until now, countries in emerging markets were well out in front of the nuclear industry revival, accounting for a disproportionate share of the expected growth in nuclear energy use,” said Ser-

MOSCOW BLOG

High oil prices a mixed blessing as inflation soars Ben Aris

Special to Rn

R

reuters/vostock-photo

Europe is reassessing nuclear power after the disaster at Japan’s Fukushima plant, but Russia stands by its exportrich nuclear power sector.

m a n d fo r p owe r we re evenly matched, so further economic growth would be constrained by blackouts.

The Energy Ministry plans to cope with rising Russian energy needs by building 18 nuclear power and hydropower plants with a combined installed capacity of 11.2 gigawatts.

“It is impossible to speak about a global energy balance without the nuclear power industry,” Mr Putin said at a meeting of the intergovernmental council of the Eurasian Economic Community (EurAsEC).

Without waiting for the Fukushima crisis to be resolved and an investigation to be carried out by international experts, Russian authorities ordered an urgent review of all nuclear plant construction projects, both at home and abroad.Tests are already under way to assess

gei Bubnov, who heads Renaissance Asset Managers’ utilities fund.“Out of the 62 reactors currently under construction, 48 – or 77pc of the total – are being built in China, Russia, India and South Korea.”

Among the emerging markets, Russia is the most reliant on nuclear power. Sixteen per cent of its power comes from nuclear energy and it is planning to double nuclear capacity in the next 20 years.

“Inevitably, some of these plans might have to be reconsidered,” said Mr Bubnov.

“Russia has a vocal environmental lobby, which might lead to the delay or even cancellation of some projects, leading to higher prices.”

However, as Russia’s economy returns to strong growth, the government has little choice but to build new nuclear plants. Before the financial crisis, the supply and de-

the fire- and seismic-proof qualities of the country’s own plants, and facilities will be shut down if necessary, officials said.

“We will take all necessary measures, however much that might cost,” said Alexander Lokshin, deputy director general at the Rosatom state nuclear energy corporation.

However, events at Fukushima do not appear to have seriously dented confidence in nuclear power in the Russian industry.

A post-tsunami poll conducted by the internet portal nuclear.ru among Russian nuclear power specialists showed that 42pc were convinced this“will not substantially change attitudes toward nuclear energy”. Only 16.5pc of respondents believed the events would reverse the “nuclear renaissance”seen in many countries in recent years.

05

ussia’s economy took a hit at the start of this year, raising fears that the recovery is starting to splutter and could reverse as inflation rises.

From the top down, Russia looks in great shape thanks to oil prices that have passed the $100 per barrel mark.

High oil prices are, of course, good news for the Kremlin.

Growth in GDP is coming back nicely and will clearly exceed the state’s official 4pc growth estimate for this year.

The budget deficit is falling fast, total foreign investment is almost back to pre-crisis levels, and oil revenues are starting to be siphoned off to rebuild the Reserve Fund again this year, after much of the fund was used to bail out the economy during the recent crash.

But from the bottom up the economy looks less good.The one black cloud in otherwise sunny skies is inflation, which is being driven up by food and oil prices. Inflation fell to a post-Soviet low of 5.5pc in July 2010, but in the first few months of this year rose to an annualised rate of well over 10pc. The Central Bank has already reversed its growth-supporting loose monetary policy and started to increase rates again.

Rising prices cause pain. Retail sales were recovering strongly at the end of 2010, but then plummeted in January.“These companies had stellar results in the last months of last year but then sales dropped off a cliff at the start of this year,” said Daniel Thorniley, founder of DT Global Business Consulting, adviser to most of the biggest fast-moving consumer goods companies.“Clearly the demand is not stable.”

Oil has brought macroeconomic relief, but sustainable

growth depends on domestic demand, which is spluttering.

Oil exports account for about a third of GDP and commodity prices are volatile, whereas consumption already makes up 52pc of GDP. Once consumer spending restarts, shopping, not oil, becomes the stable and long-term driver of growth.

And Russian consumer confidence took a hit in January when an increase in real disposable income of 3.5pc actually turned into a 5.5pc decrease.With less cash to spend, consumers pulled back and nearly every retail statistic fell as a result. Still, these results are not a death sentence for the recovery and could be just the “funny numbers” from January, a month almost the

Driven up by oil and food prices, inflation this year posted a post-Soviet record high of over 10pc entire population takes off thanks to the holiday-rife Russian Orthodox Church calendar.

Improved investment figures testify to the fact that Russian and multinational companies are far more confident about the future than the people are. Imports surged last year and almost entirely consisted of imports of machinery, suggesting that companies are retooling ahead of a recovery. But they have also recalibrated from chasing highmargin profits to concentrating on lower-margin but more sustainable revenue streams.

As Mr Thorniley says: “The challenge in Russia is for companies to move away from a good profit model to a model which gives strong top-line growth.” In other words, real competition has arrived in Russia and companies are chasing the neighbourly rouble rather than the oligarchs’ glistening dollar.

Retail banking Barclays and HSBC pull out as financial crisis and competition from state banks leaves big players counting the cost

High street bubble bursts for Western giants As leading international names cut their losses and run, Russia’s once alluring retail banking sector is again dominated by local firms Ben Aris

The shutters appear to be coming down on Western players in Russia’s retail banking industry.

Announcing plans to sell off high street assets despite having invested heavily into the business, HSBC and Barclays Bank are the most high profile of a string of foreign banks that are giving up on Russia.

Despite the country’s low banking penetration – only one in four Russians have a bank account, according to polls – potential yields from a population of 142 million saw the retail banking business double in size every two

getty images/fotobank

special to russia now

Cash withdrawal: familiar names are vanishing from Russia

years before the financial crisis. The stampede by international bankers into the market from about 2004 sent prices for bank acquisitions through the roof. At the very top of the banking boom in March 2008, Barclays paid £373m for Expobank, based

in Russia’s Far East, valuing it at six times book value. In the next few years, Barclays rolled out a retail offering across the country. But in February, it said that it was seeking a buyer for its retail business and would focus on investment banking.

player Orient Express in December. And both Belgium’s KBC Groep NV and Swedbank AB, the biggest Baltic lender, have also cut back their Russian operations in the past year, citing stiff competition as the cause.

There are many reasons for the withdrawals. The crisis has obviously depressed earnings and the number of n o n - p e r fo r m i n g l o a n s soared. At the same time, almost all of Russia’s banks slashed interest rates as the crisis receded in an effort to rebuild their deposit basis, reducing the profit margins for everyone in the sector.

And the relentless expansion of the two state-owned giants of the sector – Sberbank andVTB Bank – means competition has become increasingly tough.

Founded in the Soviet era,

“The people in London realise that they paid stupid money for these banks. There was a rush into Eastern Europe but now they are willing to write off a big loss. It seems to me to be a very emotional decision,” said Sergei Nazarov, the head of Renaissance Asset Managers financial institutions fund.

A week later HSBC was also reportedly pulling the plug on retail operations less than two years after announcing an ambitious $200m (£125m) expansion plan, although the bank has not yet formally confirmed this.

The exit of the two British banks comes after a string of other foreign banks left the Russian market. Holland’s Rabobank gave up its Russian retail licence last year. Spain’s Santander sold its Russian business to local

Sberbank is a monster with about 20,000 branches nationwide and accounts for 27pc of Russian banking assets and 26pc of banking capital. VTB’s retail business, VTB24, has more than 530 offices. Most of the bigger private retail banks have at best a few hundred branches, mostly concentrated in Russia’s biggest cities.

A few foreign banks succeeded in gaining a toehold in Russia, cumulatively accounting for just over a quarter of the sector’s total assets in January this year.

France’s Société Générale is probably the most successful after it bought a string of banks and launched a greenfield retail operation of its own over the past decade. The bank has almost three million clients and its consumer unit posted a

€13m (£11.3m) profit in the fourth quarter of 2010, following a loss of €58m (£51m) a year earlier, according to the bank’s website. By 2015, Russia is expected to be the largest contributor to its international retail earnings.

But Roland Nash, chief investment officer of Verno

Capital, said: “Shrinking margins and growing competition means the days of easy money are over. Those banks that have not built up sufficient bulk in the past few years will be pushed out of the Russian market or bought up by the stronger players.”

Most profitable banks in Russia Bank

Profit as of Jan Profit as of Jan 2011 (bn roubles) 2010 (bn roubles)

Change (pc)

Sberbank

183.5

36.2

VTB

47.6

27.96

70.41

Gazprombank

14.4

9.19

57.26

VTB24

407.08

14

4.18

235.02

11. 4

0.58

1 861.40

Unicredit Bank

10.84

5.79

87.01

Citibank

10.8

6.9

56.00

10

4.1

145.41

Bank of Moscow

Raiffeisen Bank

source: RBC

Energy Three-way clash looms as Swedish court upholds objections to historic oil industry deal worth £10bn

The Russian state and some of the country's most powerful businessmen face off over a landmark tie-up between Rosneft and BP. Tim Gosling

business new europe

The decision by Swedish arbitrators last week to issue an injunction blocking a major share swap between BP and Rosneft has sparked a three-way clash between Russia’s business elite, the state and one of Russia’s largest foreign investors.

At stake are an estimated $16bn (£10bn) in investment and a key plank in the Krem-

lin’s energy strategy. On January 14, BP signed off on a deal to take a 9.5pc stake in Rosneft in return for giving away 5pc of its shares to form an exploration and production joint venture. Now aiming to thwart the move is the holding company Alfa-Access-Renova (AAR), which owns 50pc of a separate TNK-BP joint venture, and represents four of the most powerful businessmen in Russia. AAR claims the BP and Rosneft tie-up violates a shareholder agreement in the joint venture that either partner must run all Russian projects via TNK-BP.

Stan Polovets, AAR’s chief executive, said in a statement: “Wilfully ignoring the provisions of the shareholder agreement was a serious misjudgement by BP that has severely damaged the relationship between the TNKBP shareholders; it has also harmed BP’s reputation in Russia. We expect [BP CEO] Bob Dudley to make every effort to rectify the situation and rebuild the trust that has been lost.”

For its part, BP said it “has always been and remains, fully committed to investing in Russia” and would look for ways to carry out the deal

with Rosneft despite the injunction.“BP will now apply for a determination whether the share swap may proceed on its own,”the company said on its website. It expressed the hope of resolving its differences with its Russian partners “to allow these important Russian Arctic developments to proceed”.

Observers fear a clash between the state-owned oil giant and a private firm run by oligarchs could turn extremely ugly. In February, Rosneft issued a statement threatening a lawsuit in the High Court in London.

But some have speculated

reuters/vostock-photo

Injunction puts brakes on BP-Rosneft share swap

Oil talk: Jeremy Huck, BP Russia president, left, and Peter O’Brien, Rosneft vice-president, discuss the deal in January

that AAR’s case was designed to force BP to buy out the oligarchs in the joint venture or merge the TNK-BP into the new venture.

“It would be very attractive for the Russian side,”says Roland Nash, chief investment officer atVerno Capital.“Rosneft would become one of the biggest oil companies in the

world and TNK-BP would get access to new resources; currently they don’t have any offshore fields and are unlikely to be given access to them. The loser would be BP, [which] would be squeezed on one side by the state and the other by some powerful Russian businessmen.”

Reports surfaced late last

week that BP could be forced to spend more than £9bn, according to analysts’ estimates, to buy out its partners in TNK-BP and force through its Arctic exploration deal.

Sources close to the dispute quoted by The Scotsman newspaper suggested Mikhail Fridman, chief executive of TNK-BP and the leader of AAR, has told BP to buy out him and his colleagues. AAR rejects the claim.

Igor Sechin, Deputy Russian Prime Minister, who is also Rosneft’s chairman, also denied there was any such negotiation under way following the injunction.

“We have not received any proposals regarding these proceedings and are not holding any talks,”Mr Sechin told a press conference.

Asked whether TNK-BP could participate in Rosneft’s deal with BP, he said TNKBP’s shares were of no interest for the swap deal, as they

were not traded in NewYork, London, or Frankfurt.

Analysts speculate that the dispute will be resolved as the Arctic exploration is a key element of the Kremlin’s energy strategy. The RosneftBP deal is also a blueprint for tie-ups that are central to Russia’s plans to modernise and diversify the economy: large international companies are offered access to the country’s rich natural resources through minority stakes in state-owned companies, and in return the Russian company gets access to world-class technology.

The Stockholm court has blocked the deal only until April 7, while a final decision has not yet been made, according the Russian deputy prime minister. Rosneft is preparing a complex of measures to protect its interests in the deal with BP and is ready to demand compensation, Mr Sechin added.

06

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Opinion

Literature Fifty Russian authors will flex their literary muscles at the London Book Fair at Earls Court, April 11-13

Rulers and writers live in different worlds now

Word power: An elaborate trade stand at a Moscow Book Fair illustrates the richness of Russia’s literary heritage

Zakhar Prilepin

T

Interview vladimir grigoriev

as writing and publishing heavyweights prepare for the london book fair next month, russia now looks at the prospects for this fast-changing business Global recession, rampant piracy, encroachment of television, digital expansion – it’s time for a rethink in the book world, says one expert.

Biography

Trendsetting publisher Vladimir Grigoriev is deputy head of the Federal Agency for Press and Mass Communications and a leading expert in the Russian book market. Born in 1958, he worked as an editor for the Novosti news agency, after which he founded and directed the publishing house Vagrius, one of the trendsetters in Russia’s ever-changing literature scene.

Konstantin Milchin

special to Russia Now

Is the Russian book market currently undergoing a crisis?

I have been working with books on a professional level for 25 years. I can’t remember a single year in which some publisher didn’t lament how bad everything is. And despite all the technological revolutions that allegedly threaten books, despite the emergence of sound recordings, radio and television, the book lives on.

case in [the financial meltdown] in 1998, when the market experienced a very difficult time recovering.

The numbers say the market is shrinking: total circulation amounted to 716.6 million copies in 2009 and 653.8 million in 2010, while the number of titles fell to 121,000 from 127,000.

The book market should not be considered separately from the media market or the country’s economy. The global crisis erupted in 2008 and our segment of the economy is slow to respond. The book publishers managed through the first half of 2009 and everyone began having problems later that summer.

The book industry is one of the last to be affected by the crisis and one of the last to emerge from it. This was the

Is the growth in electronic literature a good thing?

It’s good from the reader’s perspective. It requires that publishers and the authorities take a systematic approach to creating a new market. At present, 80pc of texts travelling in the Russian segment of the internet are pirated. If the market is organised, systematised and regulated, then neither publisher nor author suffers and books cost less for a reader because printing and paper expenses are removed from the overall cost. A system should be created in which

authors and publishers get what they are entitled to.

And how should this system be created?

There are two important factors here. On the one hand, after 70 years of Soviet rule, we are used to compensating for the severity of the law by disobeying it. This is why a person who was raised in Soviet times has the mindset of “The government has always stolen from me, so why should I pay somebody for something?”This is how we ended up in the current situation.

An identical situation is currently taking place in the audio and video industries, while the same thing happened with the video market in the Nineties. We need to

educate the law-abiding population and create an atmosphere in which stealing is not considered cool. In principle, more than half of the population is prepared to pay reasonable money for electronic books. On the other hand, a normal system needs to be created where people who want an electronic text don’t jump around from site to site and put their credit cards at risk.

But who should be in charge of all this, the government?

The government will facilitate and contribute to this process, but the main initiative should come from the market. The book-selling companies and the publishers will serve as the basis for the creation of a normal system of relations between consumers and manufacturers.

All kinds of people are currently fighting against copyrights in their current form. There are people who don’t want to pay publishers and those who believe that art belongs to everyone. Then others argue that the only way to save the country from an onslaught of illiteracy is to make all books publicly available. What do you make of this?

This is a total distortion. First of all, there is public domain.

All the classics are there. Second, there are many authors

ria novosti

Pirates, profits and turning the page in the digital era

who are prepared to make their texts publicly available on the internet. As part of the policy of modernisation that our leaders have announced, different types of libraries, media libraries and electronic information centres that are accessible electronically are popping up across the country.You go to the library and if you want to read a book online, it is accessible free of charge. If you want to print a copy, then you have to pay for it. I think legislation can be built around this framework. The digitalisation of the book market could eventually become a lifesaver for all the readers around Russia.

How do you regard the recent boom in the numbers of small publishers in recent years?

Small publishers now have a strong sense of injustice: big publishers own bookstore chains and are trying to build virtual monopolies. Seeing no other way out, the small publishers knock on their doors and are offered the most unfavourable terms, after which they begin searching for alternative ways to distribute their books. For example, they look for allies among their own ranks. One day we will

come to realise that book sales and publishing need to be separated. Otherwise, we are going to run into a dead end.

It appears you are convinced that the market will regulate itselfwithoutthegovernment’s intervention.

Our book-publishing industry is almost 95pc private and market-oriented. If we dig, we find something similar in the history of the British, American and German book publishing industries. They had the same problems with growth in the market and growth in business.

What do you think the Russian book market will look like in 2030?

There will be a print-on-demand or similar digital equipment in every regional library, every post office branch around the country.

Anywhere in Russia, people will be able to access books electronically or print them, and there will be no need for trucks to carry books from Moscow to Vladivostok. At the same time, traditional books will have been preserved, but mainly those with elements of high literary art and design.

By the book: the leading Russian publishing houses in 2010 Publisher

Established

Number of titles published

Overall number of books

Eksmo

1991

9,663

78. 8m

AST

1990

9,333

72.25m

Prosveschenie

1930

1,646

48.8m

Egmont Russia Ltd

1992

1,266

24.9m

Rosman

1992

1,146

12.3m source: Russian book chamber

writer

he Russian writer has always suffered from a dichotomy of emotion towards those who rule above him.

Pushkin probably started it all: in the space of a couple of days he would write verses that sent essentially conflicting political messages.

First he composed his address to the Decembrist revolutionaries: “The heavy locks will burst… At your door will freedom wait to meet you…”

Then he would don his statesman’s hat:“In hope of glory and goodness / I fearlessly look into the future / The beginning of Peter’s glorious days / Were tainted by riots and executions”.

The meaning is simple: Sure, a couple of officers and poets have been hanged and the rest of the troublemakers sent to Siberia, but what can you do? During Peter the Great’s times, worse things happened.This does not trample away hope for glory and good.

A century later, Osip Mandelstam wrote:“…authorities are foul like a barber’s hands”, but then vowed: “If you should even try to separate me from my time / I promise you, you’ll break your own neck!”

The Russian writer is often both an advocate of a strong state and a revolutionary. Here we use“revolutionary”in the widest possible sense, speaking primarily of the utmost freedom of spirit.

In this respect, Maxim Gorky followed the tradition when he first invested himself both in word and deed in the Bolshevik Revolution in order to destroy the monarchy, and then proceeded to serve the new Caesarism in good faith and fidelity.

A few decades earlier, Fyodor Dostoevsky was almost executed for mutiny, only to go down in history with a reputation as a monarchist and a conservative.

Examine the life of any major Russian author and you will see that the same person is often a vilifier and a protectionist, be it Gogol, Leskov, Leo Tolstoy, Chekhov, Esenin, Pasternak, Leonid Leonov, Solzhenitsyn or even Brodsky.

Reducing any Soviet writer’s life to a fierce struggle against the Soviet regime would be as crude a simplification as the interpretation of the 19th-century classics by Soviet researchers, who saw hatred towards the Tsar in every line of Lermontov or Turgenev.

In the more than 200 years secular literature has existed in Russia, men of letters and the authorities have experienced mutual attraction and repulsion.The two sides have always conversed and the discussion has been, in the historical sense, that of equals – even when the latter physically exterminated the former.

It was only during the past decade and a half that the

situation underwent a qualitative change. I shall not even try to judge whether for better or worse. The truth is that literature (and art as a whole) is no longer seen by the authorities as something that gives meaning to life and is therefore relevant in the context of governing a country.

Nicholas I acted as Pushkin’s personal censor. Stalin wrote “Scum!” in the margin of Andrei Platonov’s books, while Gorbachev understood the value of words and sincerely flirted with various spellbinders.

I cannot, however, even start to picture Dmitry Medvedev or Vladimir Putin as a censor or, indeed, as an attentive reader and conversation partner of, say, the esoteric postmodernist writer Viktor Pelevin. Nor can I picture Vladimir Putin reading the works of Eduard Limonov, radical author and leader of the National Bolshevik Party, and writing “Scum!” in the margin. And it takes some power of imagination to see the pair of them pitching into a group discussion of the prose of the psychological realist Vladimir Makanin.

Actually, when it comes down to it, I can scarcely picture either being avid bookworms in their spare time, since the President looks quite content with his gadgets, and the Prime Minister on his skis or at the helm of an aircraft.

All in all, the life of the writer has probably never been so peaceful as it is today.

For over 200 years, men of letters and the authorities have felt mutual attraction and repulsion There is no fear of being shouted at, booed or trampled upon. It is even less likely that you and your friends will be hanged for sedition.

Nowadays, the authorities and writers exist independently and meet very rarely, only to observe formalities; when they do, their meetings are completely meaningless.

So what if Boris Akunin and Lyudmila Ulitskaya speak out in support of Mikhail Khodorkovsky? So what if Boris Grebenshikov and Konstantin Kinchev, celebrated rock stars who also happen to be wonderful poets, wrote a letter before the new year expressing a wish that Khodorkovsky not be jailed a second time for things for which he had already served a term?

It is democracy we have here, isn’t it? You wish to write – be my guest; you wish to protest – feel welcome.

In this type of democracy, one can certainly speak out.

Speak about oneself, one’s country, the future, the authorities... about anything. It’s just that what you say does not concern those above in the slightest.

Born near Ryazan in 1975, Zakhar Prilepin is a former special forces soldier, author and journalist with Novaya Gazeta. Renowned for his critical views of the national authorities, he is widely recognised in literary circles and his work has been translated into several languages.

events From the classics to video poetry, a calendar of culture

Nostalgia for Censorship Monday 11 April, 7pm, Waterstone’s, 203-206 Piccadilly, London

Leading Russian authors Ludmila Ulitskaya, Vladimir Makanin, Dmitry Bykov and Polina Dashkova discuss the controversial value of censorship for culture, the creative challenges involved in working around restrictions and the fatal attraction between the censor and the creator. Is it true that censorship make the act of writing more ex-

lated in her debut book, The Possessed, which she discusses with Pavel Basinsky, winner of Russia's Big Book Award for his biographical work, Leo Tolstoy: Flight from Paradise.

The authors examine the legacy of great Russian writing today, both for writers and in the wider public consciousness.

Speakers: Elif Batuman and Pavel Basinsky.

Tickets £8 (£4 conc); booking line: 0844 847 9910, or visit

getty images/fotobank

The following is a calendar of scheduled events in the Russia Market Focus Cultural Programme, which accompanies the London Book Fair next month and will take place across the city.

›› www.southbankcentre.co.uk

citing and more demanding?

Tickets from £3; booking line: 020 7851 2400 or visit ›› www.waterstones.com

The Russian Classics Monday 11 April, 7.45pm, Level 5, Royal Festival Hall, Belvedere Road, London, SE1 8XX

Elif Batuman’s obsession with the lives and novels of great Russian authors is encapsu-

Andrei Bitov in conversation with John O’Brien Monday 11 April, 7pm, Free Word Centre, 60 Farringdon Road, London, EC1R 3GA

Your chance to discover one of modern Russia’s great writers in an intimate setting, talking to the founder of Dalkey Archive Press, the publishers of

Bitov’s acclaimed novel Pushkin House.

Tickets £6 (£3 conc) from bookings@freewordonline.com ›› For more information go to www. academia-rossica.org

Leonid Parfyonov talking about Russia today 12 April, 6pm, London School of Economics and Political Science, Houghton Street, London WC2A 2AE

The prominent journalist and writer Leonid Parfyonov will talk about a broad range of issues relating to Russia today and answer questions from the audience. A rare chance to gain an insight into the thoughts of this highly respected figure.

Tickets free, but to reserve a place please rsvp at rsvp@ academia-rossica.org ›› www.lse.ac.uk

The Soviet Dream Wednesday 13 April, 7.45pm, Purcell Room at Queen Elizabeth Hall, Southbank Centre, Belvedere Road, London, SE1 8XX

Marking the 50th anniversary of Yuri Gagarin’s first manned space flight, three writers explore the Soviet Union of the Fifities and Sixties, in which the planned economy would outstrip capitalism, and Communism would be the economic model of the future.

Speakers: Lev Danilkin, Francis Spufford. Chair: Orlando Figes Tickets £10; booking line: 0844 847 9910, or visit ›› www.southbankcentre.co.uk

Contemporary Russian Fantastical Fiction Thursday 14 April, 6.30pm, Foyles Bookshop, 113-119 Charing Cross Road, London, WC2H 0EB

Russian literature has often

toyed with the boundaries of reality, and its science fiction and fantasy writers have pushed those parameters even further.

On the 50th anniversary of Yuri Gagarin’s flight into space, two pioneering writers of the future fiction genre make a rare visit to Britain.

Speakers: Sergei Lukyanenko, Dmitry Glukhovsky.

Tickets free; email events@ foyles.co.uk to reserve a seat

Live performance and experimental video poetry by Russian slam poet Andrei Rodionov Thursday 14 April, 6.30pm, Poetry Café, Poetry Society, 22 Betterton Street, London, WC2H 9BX

At the forefront of contempo-

rary Russian performance poetry, Andrei Rodionov is the organizer of the first national Russian slam final. He is also a pioneer of video poetry, one of the most dynamic and exciting areas of the Russian arts scene, comprising the moving image, poetry and music. Enjoy a rare chance to see him perform at London’s leading poetry venue.

MC Joelle Taylor.

Tickets free

Spy Wars – The Fiction behind the Truth Thursday 14 April, 7pm Courtauld Institute, Somerset House, Strand, London, WC2R 0RN

Spy Wars: The Fiction behind the Truth will explore how the

genre of espionage fiction grew both in Russia and the West during the Cold War, how it has developed since, and how much fiction has influenced the reality of espionage and vice versa.

On the panel will be Henry Porter the writer, civil liberties campaigner and spy novelist; Christopher Andrew, author of the authorized history of MI5; Boris Akunin, detective novelist, and Sergei Kostin, who has written both fiction and non-fiction about espionage. Bridget Kendall, BBC diplomatic correspondent, will chair. The event is held in association with New Statesman magazine.

Tickets: £12 until April 4th, £10 concession, £15 after April 4th ›› http://www.newstatesman.com/ events

The Russia Market Focus Cultural Programme is organised by The London Book Fair with their strategic partner, the British Council, and The Russian Federal Agency for Press and Mass Communications with their official partner Academia Rossica. www.academia-rossica.org

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07

Publishing The Nineties were a lean time for ‘serious’ readers but Russia has rediscovered the virtues of intelligent writing

times of economic hardship, willing to spend their last rouble to keep abreast of the latest literary trends.

Most of these stalwart devotees are women, which is another major sign of the times. One of the most popular novels to be published in the past two years bore the symbolic title The Time of Women, and its author, the St Petersburg university professor Elena Chizhova, was catapulted to fame by winning the Russian Booker prize in 2009.

Women in Russia read more than men for many reasons.

Housewives often have more free time to read. Plus, a majority of school and university teachers are women, and reading is an essential part of their job.

For a career woman, reading is important because, even in the world of literature, she tries to be head and shoulders above the men with whom she has to compete in the workplace.

Perhaps unsurprisingly, women writers are more popular with women readers.

That accounts for the popularity of the novels by Dina Rubina (who lives in Israel but writes in Russian), Lyudmila Ulitskaya, Tatyana Tolstaya, Elena Chizhova, Olga Slavinkova, Elena Katishonok and others, not to speak of the recognised queens of the woman’s detective story, such as Alexandra Marinina, Tatyana Ustinova and Darya Dontsova. The unexpected success of Oleg Dorman’s Verbatim,

Alexei Ivanov, Roman Senchin and Dmitry Novikov.Their style is, for the most part, realistic, psychological in a traditional way, and they do not shy away from describing social problems and provincial and rural life. The undisputed leader of that generation is Prilepin, a native of Nizhny Novgorod who conquered the Moscow literati with his novel Sanka, about a young rebel against the new capitalist rules, the new “mas-

ters,” to borrow Maxim Gorky’s expression. Edgy and sophisticated, Prilepin’s firm grip on the realities of life may stem in part from his work as a prominent opinion-page writer in the national media (read his article on page 6).

Another leader in that generation of writers is Alexei Ivanov from Perm, who made his reputation with the novels The Gold of Revolt and The Heart of Parma. Today,

viktor pelevin born in 1962

vladimir sorokin born in 1955

lyudmila ulitskaya born in 1943

most famous works include The Time of Women, The HalfBlood

most famous works include the shirt, the rivers, the winter

most famous works include The heart of Parma, or Cherdyn is the queen of mountains

most famous works include Generation p, The Sacred Book of the Werewolf and omon ra

most famous works include Oprichnik’s Day, ice and Kremlin Made Of Sugar

most famous works include Daniel Stein, Interpreter, sonechka, Medea & Her Children

HOMEBOY: Ivanov, viewed as one of the most prominent Russian writers and the “gold reserves” of national literature, has like Alexander Pushkin, never been abroad.

KARMA KING: Esoteric motifs in Pelevin’s books are not incidental: the writer studied Eastern culture and went repeatedly to South Korea to live in a Buddhist retreat.

Russia has often been defined by the grandeur of its epic novels. But recent non-fiction brings a documentary-maker’s eye to the story of a nation and its people.

Tatiana Shabaeva

ria novosti

special to russia now

History man: Leonid Parfyonov presents the Our Era series

quite often hilarious commentary. For the past few months, he has also become known as an open critic of state control over his craft.

The author is now at work on the fifth volume of his opus, entitled Our Era, an all-encompassing guide to the Soviet Union and modern Russia. Each volume in the series covers a decade of Russian history.

Parfyonov became an international sensation late last year when he accepted a national prize on Russian television and said that,“national television information services have become part of the government. Journalistic topics, like all life, have been irrevocably divided into those that can be shown on television and those that cannot. … This isn’t information any

more, this is PR or anti-PR by the authorities.”

Russian pundits described his impassioned speech as amounting to a renewed manifesto for perestroika.

Parfyonov does not lack passion, his audience has discovered, and he has a ravenous appetite for his subject.

He wanders from the details of Gagarin’s historic space flight in 1961 to the assassination of President John Kennedy in 1963; from the Warsaw Pact troops being sent to Czechoslovakia in 1968, to theVietnam War. But Parfyonov also writes about the 1980 Olympic Games in Moscow, Russians hooked on the soap opera Santa Barbara in the early Nineties, the scandal of nationwide Ponzi schemes, and the craze for imported chocolate bars.

As with any good quality encyclopedia, Our Era is illustrated with high-quality, vivid and relevant photographs, which help to bring recent history to life for the Russian reader.

They might be giants

In a year especially prolific in non-fiction, the leading national literary award in 2010, The Big Book prize, went to Pavel Basinsky’s emotionally profound biography of Leo Tolstoy, dedicated to the 100th anniversary of the legendary author’s death. The immediate and sustained public interest in Flight from Paradise is all the more remarkable considering the lack of any officially sponsored high-profile events. Basinsky received high critical praise for his work, which will eventually be published in English.

The Limbus Press Literary Agency in St Petersburg published a thought-provoking collection offering a refreshingly new look at the life and work of literary giants. The poet and critic Dmitry Bykov wrote the section on Maxim Gorky; the novelist Lyudmila Petrushevskaya wrote about the poet Alexander Pushkin; and the artist and novelist Maxim Kantor wrote about the satirist Mikhail Bulgakov.

The list goes on with another 40 authors. Fortunately, the forthcoming English translations of these articles are likely to be selective.Thus revised, the book may prove to be an even a more entertaining and focused read.

The enchanted pilgrim

PeterVail emigrated from the Soviet Union in 1977. He lived and worked as a journalist in the United States and then in the Czech Republic. He was a passionate globe-trotter even at a time when the USSR was still secluded behind the Iron Curtain. When it collapsed, Russians eagerly flocked to foreign lands that had been tantalising but in-

accessible for about 70 years.

While some Russians were content with shopping trips and sea resorts, many sought more sophisticated discoveries, which is whereVail’s work comes in.

His travel columns and books were published in Russia and swiftly gained enormous popularity, breathing the balmy air of far-away lands.Vail gave people the impression he had seen every city and province in the world, and could talk about them with esoteric aplomb. PeterVail died in late 2009, about a year after a heart attack sent him into a coma. In 2010, the Moscowbased Astrel Publishing House came out with The Word En Route, a combination of travel notes with essays on art history. In his last work,Vail takes the reader on a post-Soviet journey that includes Armenia, Russia, and western Ukraine, with the same exceptional talent for being genuinely surprised, kindly ironic and sincerely involved.

Safe haven

Verbatim, published by Astrel Publishing House, is among the most powerful of these works. Lungina, the mother of beloved Russian director Pavel Lungin (Taxi Blues; The Island), was a widely famous and popular fiction translator who introduced Soviet readers to the masterpieces of Astrid Lindgren, Heinrich Böll, BorisVian, Henrik Ibsen and many others. She befriended many leading Soviet writers and foreign authors whose works she translated.

Her friends fell victim one by one to the Terror and were crushed or killed in Joseph Stalin’s camps.

She began to know fear but she believed that it was her duty to overcome it. Her house became a safe haven for the persecuted and the penniless, and she herself became a guardian and a witness to their fate.

EDGY: Experimentalist Sorokin is the only novelist to spark protests at Moscow's Bolshoi Theatre for a production casting clones of history's cultural greats as hobos.

UNDERGROUND: Ludmila Ulitskaya worked as a scientist at the Soviet Institute of Genetics until she was fired in 1970 for printing banned literature at the lab.

Interview boris akunin

Clues to making crime fiction pay RN spoke to Boris Akunin, one of the most popular Russian writers of crime fiction, whose novels about charismatic detective Erast Fandorin have won plaudits from critics and the public, at home and abroad.

lucky stars – I have no other explanation for it.

Why are the Fandorin novels so popular?

I think the reason lies in that Erast Fandorin has many qualities that are sadly lacking in our people. Opposites attract – as we know. Fandorin is reserved, cold-blooded, scrupulous, and does not consider the authorities to be something sacred. It seems that, deep down, my readers want to be like him.

alena tveritina russia now

The top 10 most popular authors in Russia have – year after year – almost exclusively been detective fiction writers.

Why do you think the detective novelisthebest-sellinggenrein the country today?

First, this genre is relatively new to Russia, having been around for only some 15 to 20 years. In Soviet times, having a crime take place in literature was simply unthinkable, for how could there be crime in the land of triumphant socialism?

Second, detective fiction is the most interesting genre there is. It encourages the reader to think hard to figure out who the killer is.

Does the Russian detective genre have its own image and some distinctly unique features that make it different from, for example, the Scandinavian novels that have recently become so popular?

The Russian detective genre is characterised by variety – much more so, in my opinion, than the Scandinavian novels. That is because life in Russia is always an overflowing fountain: a fountain of oil, blood, emotions, you name it.

press service

TECHNO-SHY: For four years Grishkovets was one of Russia's most popular bloggers, though he claims that he barely knows where to find his PC’s ‘‘on” switch.

DPA/vostock-photo

alexei ivanov born in 1969

Dramatic slices of real life capture the imagination

One of Russia’s best-known television journalists, Parfyonov is a master of the documentary series, weaving insightful history with closely glimpsed cultural trivia and

Pavel Basinsky is a prominent Russian critic, writer and winner of the 2010 Big Book Award for his biography of Leo Tolstoy.

Yevgeny grishkovets born in 1967

Non-fiction Authors turn to turbulent recent history for inspiration

Parfyonov’s Russia

gakov, and Andrei Platonov

by Alexei Varlamov, Sergey Dovlatov by Valery Popov.

The series owes its success both to the wide range of subjects and the high reputations of the biographers, whose judgements readers have found reliable.

elena chizhova born in 1957

SURVIVOR: Elena Chizhova, a former economist, teacher and entrepreneur, finally turned to writing in 1996 after being rescued from a burning cruise ship.

Perhaps the most touching link between the authors of recent non-fiction books is the connection between the journalist Leonid Parfyonov and Liliana Lungina, who died in 1998. Lungina, a translator, bore witness to the Lubyanka, Stalin and the Thaw. Before her death, she told the story of her remarkable and spirited life, one in which she gave safe haven to many persecuted writers who had been abandoned by friends and colleagues. Her story became a documentary and then a book, Verbatim.

For 11 years, there had been no interest in her story until Boris Akunin and Leonid Parfyonov became involved and devoted their energies to the project.The resulting documentary series by Oleg Dorman, based on her recollections, was so popular in 2009 that it was turned into the book, which has resonated deeply with readers.

story TheVillage), and Senchin ably rises to the challenge.

Another trend in modern literature is a revival of interest in the biography genre.

The Lives of Achievement series has established writers examining the life and craft of their predecessors. Among these titles are Boris Pasternak and Bulat Okudzhava

by Dmitry Bykov, Mikhail Prishvin, Alexandr Grin, Alexei Tolstoy, Mikhail Bul-

he devotes his energies to ethnographic studies of his native Urals, an area he calls “Russia’s backbone”.

Roman Senchin has written an excellent novel called The Yeltyshevs, about an ordinary Russian family that disintegrates under the new economic conditions. The theme of social degradation makes good literature when handled by a talented writer, such as Emil Zola, Maxim Gorky or Ivan Bunin (in his

kommersant

ria novosti

Who’s who among Russia’s contemporary writing talent

Eyes down: the appetite for cheap potboilers is waning, and Russia’s readers are returning to more challenging fare

itar-tass

SPECIAL TO russia now

The first decade of the 21st century saw a sea change in the publishing business in Russia, with heavyweight publishers finally showing an interest in “serious” literature rather than just lucrative potboilers.

In the Nineties, they had ignored it pointedly, as evidenced by their shunning of proliferating literary prizes such as the Russian Booker, the National Bestseller, Yasnaya Polyana and the Big Book. It was assumed that professional critics and writers awarded prizes to the kind of literature that had no interest for the mass reader. Conversely, over that decade the mass reader was interested in literature that professional critics considered beneath them.

The 2000s, however, saw a change in the social, economic and cultural environment in the country. Less choosy readers who consumed cheap literary products (in the literal and the figurative sense) – thrillers, whodunnits, “women’s novels” and fantasy – hastily written, often by ghost writers, soon switched to watching soap operas and Hollywood movies on television.

By contrast, “serious” readers remained loyal to more ambitious literature, even in

kommersant

pavel basinsky

based on the author’s documentary on the well-known Russian translator Liliana Lungina, probably owes much of its popularity to the fact that it is a female confession, in which a woman’s voice is clearly heard.

The novels of Viktor Pelevin and Vladimir Sorokin, who broke into the big time in the Nineties, were still popular in the 2000s, suggesting that they have a loyal following that did not abandon them even during the crisis.To read a new novel by Pelevin or Sorokin is a hallmark of belonging to a certain intellectual milieu – whether you like the novel or not.

In Russian literary circles, it is important to have read it in order to maintain your credentials as a serious reader. In short, being an active reader is still fashionable in Russia, and keeping up with the works of writers such as Pelevin and Sorokin means that you are “with it”.

Yevgeny Grishkovets is another fashionable writer. Especially popular with Russia’s rapidly expanding middle class, Grishkovets caters to the upper bracket of male readers, those with sleek new cars and chic new apartments – basically upwardly mobile men who want to read about their own lives, described elegantly and ironically by a talented and trendy author.

Another key development in the 2000s has been the emergence of a strong generation of thirtysomething authors, such as Zakhar Prilepin,

photoxpress

A new generation of adventurous Russian writers is winning readers as the audience for cheap thrillers turns to television.

photoxpress

Pulp fiction goes out of fashion

Boris Akunin: crime fiction makes the reader think hard

The Fandorin novels are written in different detective fiction genres – some are conspiracy novels, some spy novels, some political detective novels. They are also characterised by pastiche; they contain numerous references to the Russian classics and specific literary works.

When you first introduced this game to readers, were you sure they would understand it?

Has the reader lived up to your expectations?

The reader has surpassed my boldest expectations. When I was developing this project, my first publisher and I thought that the total target audience for such books in Russia would be about 30,000 people. Perhaps, up to 100,000 if we were lucky. We dared not dream far beyond those figures. As of the start of this year, a total of 25 million copies of my books have been sold. Such are my

Fandorin has been hailed by some as a national hero. Do you agree with this evaluation?

I would very much want for Erast Fandorin to become a true national hero, because a national hero is someone all boys look up to and all girls compare their admirers to. I think Russia would be a much better place if more people were like Fandorin. Then again, I would be pretty biased in this matter…

You openly support Mikhail Khodorkovsky. Your correspondence with him is included in the recently published and widely discussed book ‘Mikhail Khodorkovsky: Articles. Dialogues. Interviews’. How do you think this book is significant for Russian society?

It is yet another step on the way to releasing a person of whose innocence I am absolutely convinced and who (in my eyes) bears an ever greater resemblance to Erast Fandorin.

08

Space

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First flight Russia has high hopes for a mission to Mars and a Moon base as it celebrates the flight 50 years ago that changed the world

Gagarin: universal hero who opened up the heavens Russia is stepping up its space programme, half a century after Yuri Gagarin launched a Cold War space race by becoming the first human in orbit.

THE NUMBERS

17,000 The speed in miles per hour of Yuri Gagarin’s Vostok 3KA-3 capsule as it orbited the planet on April 12, 1961

NIKOLAI ALENOV RUSSIA NOW

Urban spaceman: Gagarin is embraced by daughters Lena, left, and Galya

have now been in orbit. But on April 12, Russians everywhere will honour the spacefaring legacy as embodied by Gagarin. The pilot died in an air crash in 1968 while in training for a second space mission, and his ashes are buried in Red Square.

Now, as in the past, the resolve to drive his legacy further comes from the top.

“Space will always remain a priority of ours. This is not just somebody’s interpretation, it’s our official state position,” President Dmitry Medvedev told members of the ISS crew in a radio linkup on April 12 last year, Cosmonautics Day. Russia’s $3bn (£1.8bn) annual space budget cannot compete with Nasa’s almost $19bn (£11.6bn). But more

funding has been allocated to space in recent years as oil and gas revenues surged.

Russia is a leader in the commercial satellite launch market. And while the Americans had their manned Moon and Mars mission hopes trimmed by the Obama administration, Russia keeps those hopes alive, aiming to establish a Moon base by 2030 and stage a Mars mission shortly after, according to Anatoly Perminov, chief of the Roskosmos space agency.

It’s all a far cry from the heady days of the Vostok 1 mission, when no one knew if the young Gagarin would even make it home alive.

Either in jubilation or to cover his nervousness while orbiting the planet at 17,000 miles an hour, he whistled a

Soviet patriotic song over the radio, the opening lines of which are “The Motherland hears, the Motherland knows/ Where her son flies in the sky.” In a few hours, word of his feat sped round the globe and a new era had begun.

However, the competitive vigour of both programmes tailed off in the Seventies after a series of US Moon landings. The space race in effect ended in July 1975 when US and Soviet crews docked capsules in orbit, symbolising a partial easing of tensions between the superpowers. After the Soviet collapse in 1991, Moscow and Washington pooled resources in missions to Russia’s Mir space station, which after 15 years in orbit was scuttled over the Pacific Ocean in

2001. Meanwhile, assembly of the ISS began in 1998 and the complex now comprises 14 pressurised modules.

After 30 years of service and 135 launches, Nasa’s shuttle

Russia aims to build a Moon base by 2030 and stage a manned mission to Mars shortly after fleet made its final run to the ISS last month. When the shuttles are fully retired later this year, the station will be dependent on smaller Russian craft to ferry crews and supplies until a new US space taxi is produced. Shifting the transport burden boosts the role, prestige and

income of the Russian space agency, which suffered so acutely from underfunding in the Nineties that it had to film commercials on Mir and send tourists to the ISS to raise money.

As Russia forges ahead with international work, the vision for space exploration is now coming into focus.

“The future lies in co-operation,” Mr Perminov told Radio Golos. “Space exploration of the future means automated industrial facilities for mining and processing minerals on the satellites of our solar system; it means electric power stations that feed the space industry as well as the Earth. Consequently, industrial production will be transferred from Earth and our unique planet’s biosphere will be cleansed and restored.”

Half a century after he beheld the spectacle of our precious and fragile world from above, Yuri Gagarin would surely have applauded such a lofty goal.

“Orbiting Earth in the spaceship, I saw how beautiful our planet is,”he said after touching down. “People, let us preserve and increase this beauty, not destroy it.”

Star City counts down to tourism relaunch Still cloaked in secrecy and enjoying legendary status in spacefaring circles, the Soviet-era space training centre at Star City near Moscow is pinning its hopes on a futuristic makeover.

VLADIMIR RUVINSKY

RIA NOVOSTI

RUSSIA NOW

The sheer density of decorated Heroes of the Soviet Union and Russia living on its territory – around 40 bearers of this prestigious medal among a population of 6,700 – illustrates the cosmic array of feats performed over the years from Zvezdny Gorodok, or Star City.

Built in the Sixties and still not on any map, the hangars and Soviet apartment blocks hidden in the pines 15 miles north-east of Moscow was the starting point for all of the country’s cosmonauts, as well as many foreign guest astronauts.

And while it boasts a futuristic array of space training equipment, entering the complex is like travelling back in time. Formerly designated “Closed military townlet No1”,Star City became a curious monument to Soviet ar-

Star quality: a crew trains on a submerged model of the ISS in the giant pool at Star City

chitecture. Everything – utilities, roads and buildings – is in dire need of repair.“Nothing has been done here for 45 years,” says the local mayor, Nikolai Rybkin, adding that five billion roubles (£108m) was needed for renovation. The government has now promised the funds and 200 million roubles (£4.3m) have already been allocated for a spruce-up for the Gagarin flight festivities.

A former FSB intelligence

service colonel elected mayor by popular vote in 2009, Mr Rybkin’s ambitious plans for this historic site involve increasing accessibility while maintaining security. As investors appear, he aims to turn Zvezdny Gorodok into a tourist attraction linked to the capital by special train, with futuristic hotels, business centres and entertainment venues. “I want to see the whole place abuzz,” Mr Rybkin says, citing Monaco

with its luxuries and low crime-rate as his model. By employing hi-tech solutions, he says that he can“strengthen the system while relaxing it on the surface”.

The process in effect began in 1994, when Nasa was allowed to establish a permanent presence at Star City, as American astronauts trained for the first Shuttle mission to the now defunct Mir Space Station. Later, wealthy foreign space enthusiasts were

“Although the recent bombing at Domodedovo was unquestionably a tragedy, investment in the country is unlikely to suffer as a result.”

“As Winston Churchill was being driven to see Stalin, a group of Russians standing in the snow eating ice cream was pointed out to him: ‘These people will never be defeated,’ he replied.”

increasingly chaperoned around the training centre, and Mr Rybkin concedes that this kept the city going:“Rich tourists like sheikhs and Europeans brought enough cash to pay salaries to all the centre’s employees.”

But none of this means a Russian Las Vegas will grow here: Star City remains firmly committed to its original task, and it hums with activity. During a recent tour, visitors were shown a hangar containing replicas of the seven-ton, three-seater Soyuz spacecraft that, with the retirement of the US shuttles later this year, will be the only means of ferrying crews to the International Space Station.

Two Russians and an American are at work training in the simulator. During real flights, occupants spend two days squashed shoulder to shoulder before they reach the orbiter.“The Soyuz is very small, like a barrel, but that’s fine,” says Michael Foale, a Nasa representative who has been to space six times.

Then there is the centrifuge, the only facility in the world that simulates not only

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G-force and acceleration but also weightlessness. Powered by an underground plant, the 305-ton device with its 60ft arm packs the punch of five railway locomotives as it rotates subjects. Elsewhere, teams train on a mock-up of the ISS that is submerged in a giant pool to simulate weightlessness. Wearing 320lb diving suits loaded with weights, they can shed around nine pounds during a four-hour session.

The spirit of the space travel community is tangible everywhere. Hallways bear photos of cosmonauts and astronauts, who underwent training here, including Russians, Germans,Vietnamese, Americans and Chinese. A triple“hooray”thunders from one room as a Russian team marks a birthday, probably raising the traditional cosmonauts’ toast of “To a soft landing.”

In a square outside stands a statue of Gagarin, in whose footsteps they all follow. And where, if Mr Rybkin’s plans come to fruition, many more foreign visitors will also tread as Star City opens its doors to the outside world.

Blast-off: the Soyuz rocket is the programme’s workhorse

Chocolate chemist tasted the Milky Way Briton Helen Sharman helped blaze a trail for amateur space travellers when she responded to an advert for astronauts in 1989.

JEFFREY MANBER

SPECIAL TO RUSSIA NOW

In centuries to come, schoolchildren throughout the solar system may learn the name of Helen Sharman as well as those of Yuri Gagarin and Neil Armstrong. For she was the first space tourist, selected to go into space simply because she could.

Born in Sheffield, South Yorkshire, the chocolate chemist devoted her career to creating a better flavour for Alpine chocolate. She seemed an unlikely astronaut, which was very much the point.

In 1989, a group of Soviet space officials had joined Mikhail Gorbachev’s glasnost drive by launching Project Juno. British advertising companies were enlisted to attract an ordinary man or woman to fly to space and raise hard currency.

There were many unknowns, including whether an everyday Briton would trust the Soviet space programme with his or her life, but almost 15,000 people applied.

Helen Sharman heard about the opportunity when a radio advertisement proclaimed “Astronaut wanted. No experience necessary.”Eighteen months of training later, Ms Sharman, 27, was ready to go.

On May 18, 1991, she and her two crewmates blasted off to the Mir Space Station on a Soyuz rocket.

Project Juno was a breakthrough in space exploration.

Many in the West thought the concept of sending ordinary citizens to space was a joke, and experts in the space industry worried that “ama-

REUTERS/VOSTOCK-PHOTO

Number of people who have made space flights, defined as higher than 100km (62 miles), above Earth

AFP/EASTNEWS

520

RIA NOVOSTI

Fifty years ago on April 12, with a rousing cry of “Poekhali!” (“Let’s Go!”), cosmonaut Yuri Gagarin raced skywards to become the first human in space.

Launching in Vostok 1 from Kazakhstan at 9.06am that sunny day in 1961, the 27-year-old carpenter’s son circled the Earth once on a 108-minute space flight, before parachuting safely to ground in the Saratov region of the USSR. Driven by the Soviet Union’s quest to assert technical superiority over the United States, Gagarin’s flight became one of the 20th century’s most significant achievements. This short but epic foray into the heavens inspired millions of people around the globe, and fired up a Cold War space race between the superpowers that was not explicitly geared towards mutual destruction.

“This was the finest competition the human race ever staged: who could build the best spacecraft, the best manned rocket,” said Alexei Leonov, another member of the original 20-man squad of Soviet cosmonauts.

For three decades the sides pitched their finest engineering minds against each other.

The US Moon landing in July 1969 may have eclipsed all other achievements, but it was still the Soviets who generally led the race.

Space exploration became increasingly co-operative after the end of the Cold War, especially with the assembly of the 18-country International Space Station (ISS).

More than 500 men and women from 38 countries

High life: Helen Sharman and Soviet-issue Sokol space suit

teurs” could not survive the rigours of training and the psychological strain of the mission. But Ms Sharman’s resilience during her eightday flight earned the respect of her colleagues, and showed the world that the dream of so many to fly to space could become a reality.

Despite the failure of fundraising to cover the cost of her ticket – her hosts sent her anyway – the Russians began selling space rides to European space agencies, wealthy Americans and finally even Nasa, which had tried to stop non-professionals from being guests on the International Space Station.

The money raised from the space tours may well have bailed out the Russian space programme. And the success of Ms Sharman’s flight paved the way for more recent attempts to create a commercial ecosystem for visitors in low-Earth orbit.

Helen Sharman said recently that she was living “a different life now. But when I go to the swimming pool, I will sometimes let my body float in the water, shut my eyes and imagine I am back there [in space].”

Commercial space travel takes off Not counting a $28m working flight to Mir by a Japanese TV journalist in 1990, Helen Sharman’s was the only commercial space tour until Russia sent Dennis Tito, a Californian businessman, to the ISS in 2001.

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Six more guests have since flown with the Russians, paying up to $35m for trips of up to 15 days.

Several private companies are also developing craft to take tourists on sub-orbital flights.

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