Russia Now by Russia Beyond

Terrorism

Space

After a suicide attack in Moscow, “black widow” label complicates life for Muslim women in the north Caucasus.

Fifty years after Yuri Gagarin became the first human in orbit, Russia steps up its space exploration and co-operation programs.

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PAGE 8 OKSANA USHKO

THURSDAY, 31 MARCH 2011

RIA NOVOSTI

A paid supplement from Rossiyskaya Gazeta (Moscow, Russia), which takes sole responsibility for the contents

Distributed with European Voice

After the quake, the fallout

EDITORIAL

Welcome to Russia now Eugene Abov PUBLISHER, RUSSIA BEYOND THE HEADLINES

REUTERS/VOSTOCK-PHOTO

Just a few weeks ago nuclear power’s prospects in Europe were looking up. A quarter-century after the Chernobyl accident, modern nuclear technology seemed to have many advantages over fossil fuels. Then the

earthquake-battered reactors on the Japanese coast began leaking radiation into the air. The Japanese disaster has divided world opinion and heightened concern over a shift in the global energy balance back toward

oil and natural gas, Russia’s main exports, even as Russian leaders reaffirm their commitment to a nuclear future. ENERGY: SEE PAGES 1, 4, 5 AND 6

Nuclear energy The average Russian reactor is half the age of the stricken units in Japan

Russia to stick to its guns on nuclear power Stunned by the disaster in Japan, western Europe reassesses its nuclear future even as the east affirms its commitment to atomic power. BEN ARIS BUSINESS NEW EUROPE

Germany’s Chancellor Angela Merkel was forced into an embarrassing about face after all six reactors at the Fukushima Daiichi plant got into trouble in the days after their supporting infrastructure was washed away by the terrifying tsunami on 11 March. She ordered seven of the country’s oldest reactors to be shut down for extensive tests. Six months earlier Germany saw some of its biggest pub-

SOURCE: ROSATOM

The nuclear spread of Russia’s Rosatom agency

lic protests in a decade after Merkel forced through a plan to increase the amount of nuclear power the country generates. While many western Europe’s leaders find themselves in a similar position, Russian Prime Minister Vladimir Putin was quick

to affirm that Russia will continue to build new nuclear power stations, although following Merkel’s decision he also ordered a comprehensive safety review of Russia’s nuclear assets. Putin’s comments were followed by similar statements

MONTHLY SUPPLEMENT ABOUT Politics, economics, business, comment and analysis

from the leaders of Belarus, Ukraine and Turkey, all of which have recently bought Russian-made nuclear power stations. Russia will ensure that the plant to be built in the southern Turkish town of Akkuyu will be able to withstand powerful earthquakes, Russian President Dmitry Medvedev said in mid-March during a visit to Moscow by Turkish Prime Minister Recep Tayyip Erdogan. “The plant will be an example for the rest of the world,” Erdogan said during a press conference following the talks with Medvedev. Russia and Belarus signed off on an agreement to cooperate in building a nuclear power plant in Belarus on the same day. 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. Russia also signed a deal to build a nuclear power plant in Bangladesh, ITAR-TASS reported on 1 March, citing officials in the Bangladesh government. Ever since the explosion in 1986 of the Chernobyl reactor in Ukraine spread a highly toxic radioactive cloud over much of western Europe, European public opinion has naturally been wary of Russian-made nuclear power stations. Russia abandoned its Soviet-era RBMK class of reactor following the Chernobyl disaster, although 11 RBMK reactors are still operating in Russia. Putin said that Russia would continue selling nuclear technology to its allies and claimed that the new-generation nuclear power plants are safer than ever. CONTINUED ON PAGE 4

ear readers, Welcome to Russia Now, an eight-page supplement that you will receive once a month with your copy of the European Voice. Russia Now first appeared in 2007 and now runs in 12 prominent newspapers in Europe, the Americas and Asia, including the Washington Post, Süddeutsche Zeitung, the Daily Telegraph, Le Figaro and La Repubblica. We are happy to add the European Voice to this list in 2011. Our goal is to provide EuropeanVoice’s readers with a range of articles that show today’s Russia in all its diversity, warts and all – and, like any emerging economy, Russia has its share of problems. On these pages you will find reporting and informed opinion by independent authors on the changes Russia is undergoing, on international affairs, civil society, innovative ideas and on leading personalities. For more information on Russia, please visit our website at rbth.ru. We welcome your valuable feedback and opinions at ev@rbth.ru. Happy reading!

OPINION Europe’s risky game with gas

NIYAZ KARIM

European optimism about gas lacks a solid foundation. Based on flimsy assumptions, the EU’s energy policy is forcing Russia toward other markets, primarily China. SEE PAGE 6

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Terrorism As security forces step up the hunt for militants in the north Caucasus, the media finger terror suspects

Marked as a dangerous woman

112 OKSANA USHKO

terrorist attacks occurred in Dagestan last year, five of them suicide bombings, Russian officials say. The toll in the north Caucasus republic: 68 deaths and 195 people injured.

Zaira. Photograph by Oksana Yushko

Muslim women labelled “black widows” after last year’s Moscow metro bombing find it difficult to go on with their lives.

The young woman says she prefers to stay “locked between the four walls”of her apartment rather than confront the accusing looks of strangers in this largely Muslim region of southern Russia. What has turned into a public nightmare for Zaira began last spring after two women, also from Dagestan, blew themselves up in the Moscow metro, killing 40 passengers and wounding more than 100. Like Zaira, their former husbands were slain insurgents who had battled Russian forces in the north Caucasus.

ANNA NEMTSOVA SPECIAL TO RUSSIA NOW

Zaira, a petite woman living in Makhachkala, the busy capital of the Russian Republic of Dagestan, recently gave birth to a boy. But outside her home, people think of her as a potential killer, not a mother. On a recent trip to a grocery store, she said, customers pointed and said, “Here comes the martyr.”

After that attack, the newspaper Komsomolskaya Pravda published the photographs of 22 actual and potential“black widows”,as female suicide bombers have been dubbed by the media, with personal information such as the districts where they lived. The headline of the article ran,“1,000 widows and sisters of Dagestan guerrillas help terrorists”. Zaira’s picture was among the 22, an unmistakable 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 last decade, Russia’s security agencies have tended to label all fundamentalist Muslims as terrorist suspects. And the police have engaged in sometimes brutal tactics in an attempt to suppress a violent insurgency, according to human rights activists.“Your house gets burned, and you and your family may ‘disappear’ or be murdered,”said Taty-

THE QUOTE

Alexander Khloponin PRESIDENTIAL ENVOY TO THE NORTH CAUCASUS, SPECIAL TO RUSSIA NOW

KOMMERSANT

THE NUMBERS

ana 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.” But police insist they are fighting a deadly enemy across the Caucasus. In February they arrested another young alleged “black widow” in the republic of Ingushetia. Gennady Gudkov, a deputy head of parliament’s security committee, complains that parliament has no control over the National Anti-Terrorism Committee, the main agency charged with leading the campaign against terrorism, and can’t even get basic information about its activities. “It is a big secret what methods they are using to fight terrorism. We have no idea,” Gudkov said. The case of Zaira suggests that some of those methods may be counter-productive. Since her first husband was killed six years ago, Zaira said she has tried to move on and build a new life. She remarried, had another baby and got a job. All of that collapsed with the “black widow”article. Zaira lost her job as a cleaner. She said she took her 8-year-old son out of a secular school after a teacher beat him for being a “Wahhabi”.The police, she said, frequently question her. “We wish we could fit in,” she said.“But we are being pushed out.”

Nobody can win the war on terror in the north Caucasus as long as there are wars in the Middle East. The terrorism we deal with is not just a purely Russian phenomenon but a threat of international scale. The terrorist groups in the north Caucasus are supported by countries at war in the Middle East. The terrorism is inspired by multiple factors, including globalisation."

Our main priority in the north Caucasus is fighting terrorism – we will continue to destroy the guerrilla nests and the individuals and organisations that finance them. We will also fight criminal groups that finance the terrorist underground. Our third goal is obviously the fight against corruption. And our fourth priority, essential for progress, is creating new jobs in the north Caucasus. We plan to create 400,000 new jobs by 2025."

Law enforcement New law cuts numbers and increases pay in an attempt to clean up the police’s image

A new force to be reckoned with Russia’s police have a new name but face the same old problems of low pay and lack of trust. RN goes on the beat with Moscow’s cops. ARTEM ZAGORODNOV

Police Sergeant Mikhail Menshenin dodges blows as he tries to subdue a screaming 86-year-old pensioner. He and his partner were called to the apartment by a social worker, who says, “She’s gone completely mad.” Calm is eventually restored, and back in the squad car the sergeant says he’s thankful the pensioner didn’t have her cane to hand. “They’re lethal with those things.” The 25-year-old Muscovite patrols in the south-west of the capital, supporting a wife and child on a monthly income of about 25,000 roubles (€625), a small sum on which to live in one of

RUSLAN SUKHUSHIN

RUSSIA NOW

Mikhail Menshenin (right) and his partner, Alexander Kuzminov, on patrol in Moscow’s south-west.

the world’s most expensive cities. “It’s tough psychologically, but hard work is rewarded,” Menshenin said. “The salary may not be great, but we get bonuses.” A member of the capital’s 98,000-strong police force,

Menshenin wonders what the new law which took effect on 1 March will mean for his employment terms, powers and social status. President Dmitry Medvedev ordered the overhaul last year. He was prompted to act after a police major

went on the rampage and shot dead two people in Moscow in 2009. Police pay will go up and staffing levels will be cut by 20%. And the tsarist-era name politsiya has been restored in place of militsiya. To bring Russia in line with policing practices around the world, an officer’s authority will be limited to his precinct, citizens will have to be read their rights before being arrested, and they will be entitled to make a free phone call after they are taken into custody. Pay rises are an attempt to eliminate one of the root causes of low-level bribery and abuse of power. It is an important matter for both officers and a public that simply wants to feel protected. In the latest survey by the Levada independent polling organisation, 60% of respondents said they were dissatisfied with the performance of the police,

and only one in ten fully trusted the force. Public anger at the police appeared to peak in December, when thousands of youths took to the streets of central Moscow in violent protests, accusing police of taking bribes to release key suspects in the murder of a football fan. But above all it is the routine solicitation of small bribes that has soured Russians against the force. The police, meanwhile, defend themselves vigorously. “What do you expect for the money we make?” asks Alexei, a lieutenant in a different precinct who did not want to give his last name. “The good officers only take bribes for minor stuff, a few roubles from someone violating immigration rules or something, just to make ends meet.”Some lawmakers fear that the new law will fail to end corruption or ease popular discontent with the police. “Instead of a new force, we get the same militia with a new name,” said Gennady Gudkov, deputy chairman

of the security committee in the State Duma (lower house of parliament) and a member of the opposition party A Just Russia. Some senior police officials are also sceptical that the reform will usher in a new era, and believe there needs to be a broad attack on corruption, targeting both state institutions and public attitudes. “If we don’t reform other institutions along with the police and clarify who’s responsible for what, no staff cuts or increases will make any difference,” said Yuri Matyukhin, police chief of Moscow’s Southwest District. Matyukhin even claimed that few institutions had attempted to combat internal corruption as aggressively as his. Back on the beat, Menshenin said that whatever the implications of the bill, layoffs had already begun and had even had a positive effect: “They’ve already fired a lot of the bad apples in our ranks who were harming our reputation.”

Business

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Education The MBA course that tackles marketing – and corruption

Real-life MBA for emerging business challenges The first class at the Skolkovo business school emphasised practical skills such as living in a factory town in China. RACHEL MORARJEE

When Canadian Kane Cuenant was looking at MBA programmes, he thought about studying at Harvard University or Tsinghua University in China. In the end he opted for Skolkovo Moscow School of Management. “I looked at different schools in developed markets, but it didn’t seem real enough. I knew that I wanted to work in emerging markets and I wanted to truly understand how to do it,” he said. Cuenant is among the first 40 Skolkovo MBAs to complete their studies at the campus outside Moscow in November.Thirty-three students enrolled in the second MBA class; an “executive MBA” programme allows business people to study part-time. Cuenant said that what attracted him to the school was its emphasis on learn-

SKOLKOVO

BUSINESS NEW EUROPE

Skolkovo's aesthetic reflects its program goals.

ing practical skills in the markets he really wanted to work in. Skolkovo’s graduates hail from as far afield as Germany, India, Brazil and Australia, as well as from the former Soviet Union. It turns out that a Skolkovo education costs just as much as a Harvard MBA: about $80,000 (€56,000). The young Canadian decided against the Chinese school because of its USstyle theoretical pro-

“Skolkovo is preparing entrepreneurial leaders for difficult environments” gramme and opted to study at the first Russian management school more focused on emerging markets. Skolkovo’s English-language syllabus is designed to teach students from around the world the day-

to-day realities of doing business. Skolkovo’s dean, Wilfried Vanhonacker, moved to Russia in 2008 after setting up the now highly ranked China Europe International Business School (CEIBS) in Shanghai in 1994. At Skolkovo, he shifted the emphasis from classroom learning to a programme where graduates spend more than 70% of their time in the challenging environments of emerging-

market companies and government departments. “We are trying to bring reality into the classroom,” Vanhonacker said. Multinationals will see most of their growth in the next 20 years in dynamic emerging markets where the business climate is volatile and uncertain, and managers face talent shortages, infrastructure and institutional gaps – as well as corruption. The Skolkovo MBA is designed to prepare students to face these challenges, Vanhonacker explained. “Traditional business schools were not preparing the talent the market needed: entrepreneurial leaders for difficult environments,”he said. Students at Skolkovo must vault hurdles such as living for two months in a dormitory in a Chinese factory town and even helping Russian bureaucrats to draft laws that could then be passed by the country’s parliament.The programme features the building blocks of MBA courses in the West, such as financial accounting, macroeconomics and marketing, but also puts graduates in stressful situations in alien cultures to hone their ability to cope. For Western students, the course means dealing with the bureaucracy and corruption that come with doing business in emerging markets. For many Rus-

sian students, it means understanding corporate life in China and India as well as their native land. Cuenant said the sheer volume of paperwork needed to get things done in China and Russia really took him by surprise. “A common banking task in the US requires one form, three or four pieces of information and one signature. In Russia, the same task requires four forms, five pieces of information and four signatures,” he said. However, despite the stresses of experiential learning, the small classes enable the school to give students oneon-one career coaching, as well as customised leadership development classes. Each student works with a mentor from the business world who helps direct the student’s goals and provides him or her with insight into the business culture of different companies. Teachers also handpick groups of students to work on projects that reflect the culture clashes graduates will face. “We don’t allow students to pick their own groups until they get to the final phase of the course and have to launch a startup.You don’t pick your colleagues in a company,” Vanhonacker said. “Most of the students who sign up at Skolkovo are not after a simple desk job. They want something more,” Cuenant said.

Equities The Russian state begins shedding its wealth of assets

Investment Metals and mining

VTB sale launches huge privatisation drive

Chinese money for the far east

Privatisation of major companies

BEN ARIS BUSINESS NEW EUROPE

The Russian government got a giant privatisation programme under way with the sale last month of its 10% stake inVTB Bank, the country’s second-largest, raising a record $3.3 billion (€2.3bn). The sale showed “proof of trust in the Russian financial system”, Prime MinisterVladimir Putin told the press after the deal was closed. The secondary public offer (SPO) was met with lukewarm, but sufficient, demand from investors.VTB’s stock was initially offered in May 2007 in what was called “the people’s IPO” and raised $8bn (€6bn at the time) in the biggest IPO of that year. Small investors flocked to that sale, but the government was left with egg on its face after the share price tanked when the world fi-

SOURCE: CEEMARKETWATCH, ECONMIN, DEUTSCHE BANK GLOBAL MARKETS RESEARCH

nancial crisis struck, ending in a market crash in September 2008.VTB share prices never fully recovered: the state raised $10.56 per share during the IPO but was only able to muster $6.25 with the SPO this time around. Understandably, Russia’s retail investors remain livid at“the people’s IPO”,and the debacle has impaired the state’s ability to float more companies amid broad public scepticism about its investment promises.

Just getting the share offer off the ground was an impressive achievement given the current dire market conditions. After a strong run in 2010, equity investments in emerging markets have done badly this year as fears of inflation rise, although Russia has been a partial exception to the trend. While the new VTB offering was not a great success, it will do, and there are plans to roll out more blue chips this year. It is all part of the effort to fund an enor-

Region is a good example. The Kimkhan mine, the first stage of the project, is currently exporting about 1.2 million tonnes of ore to China with plans to increase annual Chinese exports to 10m tonnes. “This area is a hugely exciting one for companies like ours and we would welcome new companies in the region, which would increase investors’ comfort,” said Jay Hambro, the executive chairman of the Hong Kong-based mining group IRC. The region’s key challenge is infrastructure, Krasnojenov said, and China has the funds to solve the problem.

China’s insatiable demand for raw materials is driving infrastructure development in Russia’s remote provinces. RACHEL MORARJEE BUSINESS NEW EUROPE

Chinese investors have already come to places like the Amur Region and the Primorsky and Khabarovsk territories in Russia’s far east, as well as the Jewish Autonomous Region, investing €2.1 billion in various projects. That compares with less than €0.7bn in direct state investment allocated for the same areas by Moscow in 2011. The Russian government has said that it wants to invest €71bn to develop the region over the next five years, and China will be a key partner. “We know that Russia needs to co-operate with another country to open up the Far East and the natural partner is China,” said Boris Krasnojenov, mining and metals analyst at Renaissance Capital. The K&S iron ore project in the Jewish Autonomous

REUTERS/VOSTOCK-PHOTO

The Kremlin hopes to raise almost 2 trillion roubles by selling stakes in hundreds of state-owned companies in the coming years.

mous 1 trillion rouble (€25bn) programme of badly needed infrastructure investments. However, the state has also said that it wants to get out of business. Taking stock in exchange for loans and bailouts during the crisis, the Kremlin has doubled its ownership of listed companies in the past two years and now controls about 40% of Russia’s total market capitalisation. “The state is now the biggest shareholder in Russia, and so, for once, its interests are aligned with those of investors, as it wants to see the market do well,” said Chris Weafer, the head of strategy at UralSib. The privatisation is also intimately linked to the fight against corruption and attempts to boost productivity, as the Kremlin has realised that employees steal from publicly owned companies, which are generally badly run. The state plans to raise 1.8 trillion roubles (€45bn) in the medium term through the sale of 900 state-owned companies. Next up will be an SPO of state-owned Sberbank – the biggest bank in the country and the bluest of Russian blue chips. The share sale is slated for the end of this year.

Miners near Khabarovsk.

Energy

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GAS AND OIL THE MAIN COMPETITOR TO THE EU’S NABUCCO GAS PIPELINE IS SET TO GET A WELCOME INVESTMENT FROM GERMANY

BIG BOOST FOR SOUTH STREAM PROSPECTS BEN ARIS BUSINESS NEW EUROPE

The German energy company Wintershall signed a preliminary agreement to acquire the stake for around €2 billion, Deputy Prime Minister and chairman of state-owned oil major Rosneft Igor Sechin said. The news is a coup for Russia, which has been pushing the South Stream pipeline as a rival to the EU-backed alternative Nabucco pipeline, which aims to break Russia’s near-monopoly over the gas pipeline network from the large gas fields in central Asia. Russia operates the Druzhba pipeline that runs through Ukraine and carries about 80% of Russian gas deliveries to western European clients. Russia is also building the Nord Stream pipeline that will

connect Germany’s north coast directly to a large gas field in Russia’s north-west and supply northern Europe. South Stream is intended to complete the trio and supply southern Europe. But the project is fraught with politics. Part of the rationale for the two new pipelines is that they would allow Russia to bypass Ukraine. The two countries clashed in the winter of 2006 over tariff rates. The row came to a head on New Year’s Day when Russia turned off the taps and plunged much of western Europe into darkness. The EU, keen to diversify its gas supplies away from Russia, has been backing Nabucco, a pipeline that would avoid Russian territory and link western Europe directly to central Asia’s gas reserves – if enough gas and demand exist to fill it. The wrangling between the two projects has gone on for years, with each side accusing the other of lacking economic sense. While

South Stream is tentatively set to reach southern European markets by 2015, carrying 63 billion cubic metres (bcm) of Russian gas under the Black Sea to Italy, Nabucco has yet to get more than a half-promise from Azerbaijan to supply the gas it needs and no

There is not enough gas to fill both Nabucco and South Stream. If and when they are built. commitment from Turkmenistan, home of the region's biggest gas fields. Without Azerbaijan’s gas, the Nabucco project is dead in the water. And on 4 March, the Dow Jones news service cited unnamed sources as saying that a decision to allocate gas for Nabucco of up to 10 bcm from the second phase of Azerbaijan’s big Shah Deniz gas field had been put back, from the first half of this year to the second. The report said that the consor-

NIYAZ KARIM

Overturning reports of South Stream’s demise, Germany’s Wintershall signed up to a 15% stake in the project on 21 March. Your move, Brussels.

Knitting pattern: a latticework of pipes will weave together countries in Europe and Asia

tium of companies behind Shah Deniz, including BP, Statoil and Azeri state firm Socar, had found the negotiations with the pipelines bidding for the gas, including Nabucco,“unexpectedly complex”. By joining the South Stream consortium,Wintershall has given a fillip to South Stream’s prospects. As recently as the beginning of March, several reports had written off the project after Prime Minister Vladimir Putin suggested building

several new liquid natural gas facilities in Russia's west to transport gas across the Black Sea by ship. Gazprom chief Alexei Miller evidently sought to put lingering doubts to bed at the signing ceremony with Wintershall, saying: “This means that the South Stream project has been decided and Gazprom will remain a supplier of gas to Europe for many decades to come,” AFP reported. “Liquefied natural gas can only be viewed as an addi-

tional option.” Putin too praised the deal with Wintershall, saying that participation by its parent chemical concern BASF in the project was a “sign of stability”on the energy market.“This is a tremendously important agreement considering the processes occurring today on the international energy markets,” he continued. “Gazprom has the markets and, most importantly, Gazprom has the volumes.”

Russia to stick to its guns on nuclear power

PRESS PHOTOX

“We now have a whole arsenal of progressive technological means to ensure the stable and accident-free operation of nuclear power plants,” Putin said. Russian reactors are the youngest in the world with an average age of 19 years against 26 years in western Europe and 30 in the US, Bloomberg reports. Fukushima Daiichi, at 38, is one of the oldest nuclear plants in the world still in operation. It was originally scheduled for decommissioning this year, but its licence was renewed for another ten

years. “Until now, countries in emerging markets have been well out in front of the nuclear industry revival,” says Sergei Bubnov, who heads the utilities fund at Renaissance Asset Managers. Of 62 reactors currently under construction, 48 are being built in China, Russia, India and South Korea, Bubnov said. Nuclear plants produce 16% of Russian electricity, making the country the most nuclear-reliant among emerging economies, followed by Ukraine at 15%. And over the next 20 years, Russia plans to double its

Is the Kremlin serious about fighting corruption? Businessmen in jail and how they got there

Nuclear power plants in seismic zones

NIYAZ KARIM

CONTINUED FROM PAGE 1

SOURCE: RUSSKIY PEPORTER MAGAZINE

nuclear capacity. “Inevitably, some of these plans might have to be reconsidered,” Bubnov said. “Russia has a vocal environmental lobby, which might lead to the delay or even cancellation of some projects, in turn leading to higher prices.” However, as the Russian economy returns to strong growth, the government may try to convince the public that it has little choice but to build new nuclear facilities. Prior to the crisis, supply and demand for power were evenly matched.The collapse in demand that followed the cri-

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sis bought the government some time, but as economic growth picks up again the window is closing fast. Russia’s energy ministry says it need to add 164 gigawatts worth of power capacity by 2030 at a cost of 1 trillion roubles (€25 billion), Vasily Nikonov, a department director at the ministry, said in March. “It is impossible to speak about a global energy balance without the nuclear power industry,”Putin said at an intergovernmental council meeting of the Eurasian Economic Community just days after the earthquake struck Japan.

Energy

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Oil Prices rise reflects instability fears

Russian oil must invest to survive price shocks The situation in Africa, the Middle East and Japan could lead to dramatic jumps in world oil prices and a new global economic crisis. YURI SOLOZUBOV RUSSIA NOW

Concerns over oil prices on the Russian and international markets were first voiced in late January when unrest broke out in Tunisia and Egypt. The burden on national economies of buying more expensive oil is reaching the levels typical of a recession,VTB Capital analysts say. Energy analysts’ major concern is whether the wave of uprisings will reach Saudi Arabia. Saudi reserve capacities are being kept at moderately high levels, but should any interruptions in Saudi oil supplies occur, the situation in the global market will spiral out of control. When for the first time since 2008 the price of Brent crude oil exceeded $100 per barrel in London, Rafael Ramírez, Venezuela’s minister for energy, predicted that global oil prices might soon reach $200 a barrel. The devastating earthquake in Japan has exacerbated the situation. The world’s third-largest economy is facing an energy deficit as a consequence of damage to its nuclear plants, which produce about a third of the country’s electric power. This will put upward pressure on the prices of oil, gas and coal in the short term, Citibank analysts say. Russian Finance Minister Alexei Kudrin recently said that oil prices might soon grow to $150-200 per barrel because of the situation in Japan and the Middle East. The US Department of Energy at the end of last year forecast oil prices hitting $200 by 2035 as global consumption climbs from about 84 million barrels in 2009 to almost 111m barrels. Most of the oil production growth, the US Department of Energy believes, will be in Brazil, Russia and Kazakhstan, none of which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).

Is Russia’s economy ready to go green? Every year, Russia wastes enough energy to power the French economy. But energy efficiency is the new mantra. RACHEL MORARJEE BUSINESS NEW EUROPE

The Russian government approved a 9.5 trillion rouble (€237 billion) energy efficiency programme last October. Will it be too little too late, or is Russia about to embark on a genuine green energy revolution? “The political winds have changed at the top, and there is a growing consensus that climate change is happening and a will to change and build a more efficient economy,” said Kevin James of Londonbased Climate Change Capital. He added that the forest fires of the summer spurred a growing belief that climate change may not be entirely positive for Russia. Prime Minister Vladimir P u t i n o n c e f a m o u s ly quipped that global warming meant Russians would need to spend less on fur coats. President Dmitry Medvedev, however, has taken a much tougher line on the environment, backed by a report from the World Bank, which says that improving energy efficiency will improve the

country’s productivity and competitiveness. He has said that investment in this sector could save the equivalent of almost 70 million tonnes of oil annually. Russia is the world’s biggest oil and gas producer, and cheap, governmentcapped domestic energy prices have drained the motivation to conserve energy. Medvedev hopes attitudes will now change, and, aiming to make the country’s economy 40% more energy efficient by 2020, has introduced initiatives to help reduce Russia’s dependence on oil – from the decision to phase out incandescent light bulbs to setting requirements on the share of electric power generated through the use of green technologies. Russia lags far behind China, which is already the world’s leading manufacturer of wind turbines and solar panels and is on track to produce the world’s first totally battery-powered car. However, Russia has made moves in the right direction. Eight plants that will produce energy-saving lamps are to be built, and the first Russian solar plant will probably break ground in the north Caucasus resort city of Kislovodsk next year.

With an output of 13 megawatts (MW) the 3 billion rouble plant is small, but more solar and wind plants are in the pipeline, including plans to develop wind and solar power worth some €210m in the southern Krasnodar Region. The wind project will be implemented in two phases with a total eventual capacity of 100 MW. Work on the wind farm could start as early as next year, pending necessary approvals, with German engineering group Siemens slated to co-oper-

Russia lags far behind China in wind energy, solar power and hybrid automobiles ate in the project. In addition, the hydro-power producer RusHydro has plans to build a wind-power park in the city of St. Petersburg, and the Russian company signed a co-operation agreement last June with Italian fellow energy giant Enel to work in other areas of renewable energy, including tidal and geothermal power projects, as well as in retail power sales. Biofuel development is making similar progress. Russian natural gas produc-

er Itera plans to build a methanol complex in the Urals Federal District. In June, presidential economic adviser Arkady Dvorkovich said the government should support small energy-generating projects that use biofuel by offering them tax breaks and subsidised interest rates. Biofuels could also benefit from recycling plans currently afoot. Russia’s Natural Resources and Environment Ministry drafted a bill in August to promote recycling. While the separation of tin cans and garden waste seen in Western European households is a long way off, under the bill factories will have to recycle the material they currently throw away. Pulp and paper factories could easily sell much of their waste to biofuel plants, resulting in economic gains for them as well as reduced waste. Russia is even entering the hybrid car business. At the start of this year, multibillionaire Mikhail Prokhorov said he would launch the mass production of inexpensive electric cars in Russia with a project that has Putin’s personal backing. The first three prototypes of the €8,500 car rolled off the production line in December. And finally, after a long and slow start, Russia’s carbon trading sector also got off the ground this year with the government signing off on 15 projects worth €21m, with more in the pipeline.

AFP/EASTNEWS

Energy The Kremlin tries to get serious about trimming the fat

The American experts say this trio will need increased investment and modernised infrastructure if there is to be a significant increase in oil production. Investment is the key word. Without foreign investment, Russia cannot expect to see a rapid increase in oil-production volume. Russia’s national energy strategy assumes that,“with domestic investments only”, oil production volume will increase by a mere 13% or 14% by 2035, from 470m tonnes to 535m tonnes. The world’s oil consumers have only two alternatives – invest in the oil sector today, or fight over increasingly expensive oil on the stock exchange tomorrow. A rise in oil prices may cause long-term inflation problems. In the long run, economists foresee two main scenarios. The first is a new global economic crisis. According to Torsten Slok of Deutsche Bank Securities, a steady growth in oil prices to $110 per barrel would slow the world’s GDP growth rate by 0.4% in 2011, while oil prices at $150 would snatch away 2% in growth. That would be a bitter pill to swallow, as slowing growth rebounds on the oil industry, temporarily bringing the oil fever down and restoring economic equilibrium. The second scenario is more optimistic. It looks to new technological developments and a gradual phasing out of oil in favour of alternative energy resources and fuels over the next 20 to 30 years. “The next decade will become the decade of natural gas,” says Mikhail Krutikhin, the lead analyst at Exploration & Production magazine.“Its role may significantly increase in the electric power production sector and automotive industry.” Rising oil prices will spur the oil and gas companies to pump more money into exploration and production, including the so far lowprofit projects along Russia’s Arctic shoreline. The first bold explorer to tap into the reserves of this new Klondike will come out the winner.

The Libyan oil port of Ras Lanuf seen on 12 March.

Opinion

RUSSIA NOW WWW.RBTH.RU 31 MARCH 2011 SECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA

EUROPE’S GAS POLICY MUST COUNT ON RUSSIA Konstantin Simonov SPECIAL TO RN

NIYAZ KARIM

ussia-EU energy relations cannot but surprise. After all, Europe is our biggest target gas market, while for the EU we are the most reliable supplier of gas.Yet, we watch in amazement as European politicians and experts repeat that Russia is just about the main threat to EU energy security. Such a policy is, putting it mildly, rather strange. But what is much worse for Europe is that the bet may not even be a winning one. Europe has begun a rather risky game. Recall that only three or four years ago the EU was predominantly pessimistic on energy. There was talk of a looming energy drought and the question on everyone’s lips was,“Will Russia produce enough gas for the EU?”The situation changed in 2009-10. Europe suddenly got a boost of optimism. Now another idea has become predominant: that Europe is in for five to ten years of gas surpluses and

ultra-low prices. Let us consider the three pillars of this European optimism.The first is the bet that the energy-efficiency policy will be successful. That would reduce energy consumption and demand considerably. The second pillar is the hope placed in renewable-energy sources. And, fi-

nally, the third pillar is the firm conviction that new players will enter the EU gas market, thus generating a gas surplus. In this scenario, the EU’s role would be confined to liberalising access to the gas transmission infrastructure. The problem is that the pillars may not be so sturdy.

DOWN WITH DICTATORS Vladislav Inozemtsev ECONOMIST

eavy turbulence in North Africa and the Middle East has forced us to rethink a number of international norms. In recent weeks the kleptocratic regime of Libyan leader Muammar Qaddafi has killed at least 4,000 of its own citizens, apparently with some help from foreign mercenaries. Showing symptoms of the common psychological ailment that cripples aging dictators, Qaddafi’s delusive disorder has reached such an acute state that he may truly believe, as he openly says, that the people still adore him – even as he kills thousands of them. Freezing the accounts held by Qaddafi and his family is a sign of progress when compared with the way similar measures were implemented against the rulers of Tunisia and Egypt only after they had been overthrown. But I ask Western presidents and bankers: Don’t you harbour similar doubts as to whether Yemen’s Ali Abdullah Saleh, Syria’s Bashar Assad, Zimbabwe’s Robert Mugabe or Myanmar strongman Than Shwe amassed their fortunes honestly? How bad must the leader

of a developing country be before Western countries stop showering him with honours and awards? Why was Mugabe given Britain’s revered Order of the Bath? Did Gabon’s President Ali Bongo Ondimba — who came to power in 2009 after his father’s 42-year rule as a dictator — really deserve the Legion of Honour? Closer to home, why did Russia’s St. Andrew the First-Called Foundation – headed by Russian Railways chief VladimirYakunin, the Kremlin’s model“Orthodox businessman”– awardYemeni dictator Saleh its International Prize of the Holy

THE POLLS

Enemies of Russia 70% OF RUSSIANS BELIEVE THEIR COUNTRY FACES ENEMIES. WHOM DO THEY FEAR THE MOST? THE TOP FIVE:

SOURCE: LEVADA CENTER

Apostle Andrew? Saleh was honoured for his contributions to the notion of “dialogue among civilizations” (intended to be an alternative to the “clash of civilizations”) in 2004, the year marking the ten-year anniversary of the civil war in Yemen that Saleh had started – a war that took the lives of more than 10,000 people. Dictatorial regimes around the world that plunder and suppress their own people will weaken in the coming years. Gabon, Myanmar, Nigeria, Sudan, Syria, Yemen and Zimbabwe are the most fragile links in the international system. Their rulers will stop at nothing in the struggle to preserve their power and wealth. It is time for Russia and the West to recognise that the heads of kleptocratic regimes are the main threat to international stability. The Soviet Union and the United States were once united in supporting colonial peoples in their struggle for independence. Of course, they had geopolitical motivations for promoting the collapse of European empires, but the opportunity for co-operation remains. Russia and the other global powers must take the lead and stop governments from carrying out massacres of

Energy efficiency, for instance, is a good thing, but Europe has already done a lot to promote it. It cannot be taken for granted that energy efficiency will restrain demand. In 2010, gas demand grew by 8%, and that in a Europe still struggling to recover from the recession! The trouble with renewable-

their own ethnic minorities who, along with the population at large, are rising up and protesting the government’s egregious abuses of human rights. Almost 40 years ago, Article 6 of UN Resolution 2908 recognised “the legitimacy of the struggle of the colonial peoples and peoples under alien domination to exercise their right to self-determination and independence by all the necessary means at their disposal”. The time has come to frame a similar resolution in support of people struggling against governments willing to kill thousands of their own citizens. The rules governing humanitarian intervention must be codified and boldly implemented wherever people have given their blood in their fight for freedom. The world should unite in providing aid and assistance to countries that have overthrown their dictators. Today, when the abuse of power is becoming more prevalent, Russia, the US, the European Union and other global leaders should unite forces to develop a new code of conduct for the 21st century. If this idea were discussed at US-Russian summits, the“reset”in relations would produce even greater benefits than arms reductions. Vladislav Inozemtsev is a director of the Centre for Post-Industrial Studies in Moscow

energy sources is their cost. Today they are uncompetitive in price compared to hydrocarbons. Publicity campaigns have been launched to promote renewables, all built around one message: yes, renewables are expensive but they are essential, as they provide an environmentally friendly solution. In reality, from the environmental perspective, gas is a rather promising fuel, in many ways as good as renewables. And it is the European states that have to pay the high price for renewables. Indeed, Europe benefits from the new jobs that are created, but they might just as well build pyramids, as this also requires a workforce. In fact, the development of renewable-energy sources is a typical Keynesian project where the state artificially generates employment and injects cash into the economy. The question here is a simple one: will the EU be able to follow its generous policy going forward when most of its members must deal with budget deficits and when there is serious concern about the euro? Now for the most important point: additional gas resources. It is true that shipments of liquefied natural gas (LNG) to Europe increased very significantly in 2009-10, but this was a blip caused by a surplus of Qatari LNG coming on the market.

Nor, in truth, are there that many sources of pipeline gas. The operators of three prominent European pipeline projects are fighting over Azeri gas, and we are only talking 12-15 billion cubic metres. Turkmenistan remains a question mark. Events in north Africa are complicating the picture. The “domino effect” of the revolutions could cut the EU off from major hydrocarbon suppliers Libya and Algeria. Europe’s own production of conventional gas is falling off. This is a significant development and it is no accident that EU gas imports increased by 13% in 2010. Shale gas provides a vague hope but its environmental impact and cost will work against it. Shale gas production can only start when gas prices are high, but Europe wants cheap gas. The assumption that gas will be in good supply thus looks doubtful, and if there is no surplus, the whole concept of liberalising access to the pipeline system makes no sense. The situation is not as straightforward or as optimistic as it might seem and the EU’s perseverance in forcing Russia out and towards other markets, primarily China, cannot but surprise. Konstantin Simonov, director of the National Energy Security Foundation

WHY DID BIDEN GO TO MOSCOW? Eugene Ivanov ANALYST

merican Vice-President Joe Biden was in Moscow in midMarch. And what exactly was he doing there? Reiterating American support for Russia’s membership in the World Trade Organization? Repeating, for the umpteenth time, the administration’s promise to repeal the Jackson-Vanik amendment? Listening to the never-ending whining of Russian human-rights activists and 'opposition leaders”? For all that, Obama could have sent Secretary of State Hillary Clinton, giving her a muchneeded break from relentless efforts to unseat Muammar Qaddafi. Since Obama sent his vicepresident to talk with the top Russian leaders, presumably their conversations dealt with the most important questions in US-Russia relations.Today, one such question is not the WTO or bilateral trade – with all due appreciation of the longterm importance of both – but, rather, the issue of missile defence. The pressure is building on the Obama administration to move into the post-New

Start era. In the resolution ratifying the treaty, the US Senate instructed the president to initiate talks with Russia on cutting arsenals of tactical nuclear weapons. So far, Russia has flatly rejected this idea, insisting that tactical nuclear weapons can only be discussed along with other arms-control issues. Among these, missile defence is by far the most complex and controversial, and the clock is ticking: some contours of a potential agreement should emerge by June, when Russia and NATO meet. As the godfather of “reset”, Biden was sent to Moscow to give his godchild a new life: to find a solution that could bridge the two countries’ very different positions on missile defence, a solution that will be fully supported by the next president of Russia, whoever he might be. For his part, the vicepresident could promise his Moscow partners that if Obama is re-elected in 2012, Biden, too, will be around for the next four years – shepherding“reset”through adolescence. And then Russia will have another chance to enjoy his smile. Eugene Ivanov, Massachusetts-based analyst

Comment

RUSSIA NOW WWW.RBTH.RU 31 MARCH 2011 SECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA

THE DUO THAT SHOOK OUR WORLD Boris Yeltsin would have turned 80 on 1 February. Boisterous, charismatic and controversial,

he left a huge legacy to the modern Russian state and 14 more independent republics of the former

ON THE RIGHT SIDE OF HISTORY

did not give him much choice. I strongly supported his actions in 1993 against the attempted“military-fascist coup”, as the veteran politician Anatoly Chubais correctly said, that was staged by the Supreme Soviet. I understood the fragility of the economic model he built in the early 1990s and predicted the default of 1998 – a turning point for Russia and Yeltsin. After 1998, he was a different man, exhausted by political struggle. He was not free of bad habits, and had a serious heart problem. He criticised America and argued with his friend Bill Clinton. He was not the same man on whom we pinned our aspirations and expectations in 1987. In the manner of his resignation,Yeltsin again showed himself to be the man we used to know: a human being who was capable of a gesture, a step, a deed. He asked for forgiveness. That is something that not many politicians can do. I will rememberYeltsin as someone who cared about his nation and as someone who always felt himself to be on the side of good, on the right side of history.

SPECIAL TO RN

resident Boris Yeltsin is of our time.We don’t have the distance to evaluate him fully, or unequivocally. Many of my friends worked close to him as journalists or as speechwriters, interpreters and advisers. They remember how he spoke and how he moved, when he was rude, or cracking jokes, drinking champagne and vodka. To some of us it seems only yesterday when he made his famous pronouncements, including “Default is not going to happen!” and “I will lay down on the railroad tracks if the prices go up!” I talked to him only once, in 1990. I was a young TASS reporter in Moscow attending his meeting with a delegation of the Polish parliament. He had just been elected chairman of the Supreme Soviet of the Russian Federation, and after the meeting I was supposed to get his clearance for my copy.Yeltsin said,“As far as I can see, you are an experienced man [this was not true by any means]. It’s up to you to decide.”And then my hand disappeared in his giant grip as he shook it. I saw him speak at Moscow State University in 1988 and he seemed larger than life, just as everyone had said. Once I saw him give a bear hug to the Polish dissident Adam Michnik. And when Yeltsin was expelled from the Communist Party politburo I put his portrait on a bookshelf in our house. My wise grandfather threw it away with the reproach, “Don’t be an idiot, while they are fighting for power, you are taking sides.” Among my friends who worked with him, most say that he was a great statesman with enormous charisma. The best characterisation came from Strobe Talbott, the Clinton administration’s Russia man, who said Yeltsin had a volcanic

character. He could be unpredictable, but his political instincts were without comparison on the Russian political scene. I have also heard the opinion that Yeltsin brought the country to its knees with crucial mistakes, like initiating a privatisation process during which mobs and thugs

Yeltsin looked like a doer, a fixer, like someone who was capable of bringing real change. seized Soviet property. He also started a war in Chechnya and brought into power as his successor “someone we won’t be able to get rid of for a long time”. But for me this is a simplistic view of the man. His supporters say he brought Russia freedom. Others say it was Mikhail Gorbachev who permitted freedom of the press, opened the borders, arranged the first democratic elections, published Solzhenitsyn and refrained from using force against his opponents. The mid-1980s was a period of expectation for the Russian people. Gorbachev looked like an unusual and promising man compared to his grey-faced colleagues. However, his goals were not clear, and it became obvious that he cared much more about his Communist Party friends and his political ambitions. Yeltsin looked like a doer, a fixer, like someone who was capable of bringing real change. And he did.Yeltsin revised and changed the Communist ban on private property, his most significant achievement. Yeltsin did not make everyone in Russia happy. Complicated ethnic conflicts in the north Caucasus – the aftermath of the Soviet nationalities policy and the result of a power vacuum in societies where feudal instincts were still strong –

LETTERS FROM READERS, GUEST COLUMNS AND CARTOONS LABELLED “COMMENT” OR “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 EV@RBTH.RU

Peter Cheremushkin is an Interfax News Agency correspondent in Washington, DC.

ARCHITECT OF PERESTROIKA Lilia Shevtsova SPECIAL TO RN

or taking tough decisions and staying the course even when it was unpopular, Mikhail Gorbachev has earned his place in history. There are leaders who presided over the renewal of their countries: Adolfo Suárez, Margaret Thatcher, Helmut Kohl, Ronald Reagan, Václav Havel.Then there are leaders who changed the world.Vladimir Lenin created the communist system that stood up to the West. Mikhail Gorbachev brought that system down. Between 1985 and 1990, Gorbachev showed that he was a different kind of Soviet leader. First, he recognised that the arms race was futile. He put forward the idea of a nuclear-free world, which resulted in the Soviet-American dialogue on nuclear disarmament and the signing of a treaty on the liquidation of mediumand short-range missiles. The two sides decided to destroy a class of weapons

that could have triggered a nuclear war. This decision was followed by negotiations on strategic nuclear arms reductions, cuts in conventional weapons, and a ban on chemical, and biological weapons. Gorbachev’s dialogue with Reagan on security matters was not

He was the first man in Russian history to have left the Kremlin without clinging to power. merely an admission that the Soviet Union was no longer able to compete with the United States in the nuclear arms race; he took the decision to stop maintaining a nuclear arms industry that had propped up the Soviet system. Gorbachev’s second great departure from his predecessors was his conviction that every nation is entitled to choose its government, a belief that was crucial in his decision to release

NIYAZ KARIM

Peter Cheremushkin

USSR. Russia Now pays tribute to the first Russian president and to the last Soviet leader, Mikhail Gorbachev. eastern Europe from the Soviet grip. When revolutions swept across East Germany, Czechoslovakia, Hungary and Poland, their leaders made frantic calls to the Kremlin pleading for help, but Gorbachev responded with a firm“Nyet”. Soviet troops were still stationed in these countries, but Gorbachev did not want a repeat of the Prague Spring. His actions were crucial in reunifying the German people and returning the former Soviet satellites to the European fold. Gorbachev buried the world communist system. By renouncing the Communist Party’s monopoly on power and opening the floodgates for the freedom of expression, Gorbachev accelerated the disintegration of the Soviet Union. True, he had hoped to preserve the country as a community of allied states, but national republics were distancing themselves from Moscow much too quickly for disintegration to be averted. Gorbachev let the Soviet Union evaporate and, probably without intending to, turned out to be a great reformer. The former Soviet president comes across as a dramatic personality first and foremost because after starting the country’s great transformation, he did not carry it through all the way to the end. He was the first man in Russian history to have left the Kremlin without clinging to power. History knows no reformer who managed to destroy an established system and build a new one in its place. Even today, Gorbachev's name evokes mixed feelings in Russia. No society has ever perceived reformers as heroes during their lifetime. Great politicians are recognised for their achievements only when they pass into eternity. Gorbachev, however, has become a monument in his lifetime. Gorbachev is history. Having assured himself a place in eternity, he remains a remarkable man of a calibre and personality that are larger than life. Lilia Shevtsova is a senior associate at the Carnegie Moscow Centre.

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Features

RUSSIA NOW WWW.RBTH.RU 31 MARCH 2011 SECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA

Fifty years in space Honouring the man who launched humanity’s “finest competition”

BOOKS

Gagarin flight opened the heavens

IKEA’s man finds love in Russia

A half-century after Yuri Gagarin became the first human to orbit the Earth, Russia is re-energising its space exploration and cooperation programs. NIKOLAI ALENOV

Fifty years ago this 12 April, with a rousing cry of “Let’s go!”, cosmonaut Yuri Gagarin raced skywards on a Soviet rocket to become the first human in space. Blasting off at 9:06am that sunny day in 1961, the 27-year-old son of a carpenter circled the Earth once on a 108-minute flight. “No one could predict what effect Gagarin’s flight would have on the world,” Alexei Leonov, a member of the original squad of Soviet cosmonauts, told Russia Now. The race to build the best spacecraft was“the finest competition the human race ever staged”, he said. Space exploration has become increasingly co-operative since the end of the Cold War, especially with the ongoing assembly of the 18-country International Space Station (ISS). But on 12 April, Russians every-

ITAR-TASS

RUSSIA NOW

On 9 March, the world's first cosmonaut would have turned 77

where honour the spacefaring legacy embodied by Gagarin. The young pilot tragically died in an air crash in 1968 while training for a second space mission. But even in a day of megastars, he retains his iconic status,“our first envoy into space, a star of a man”, as Leonov described him. Now, as in the past, the resolve to go to space comes right 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 the ISS crew in a radio link-up on last year’s 12 April Cosmonautics Day. Russia’s $3 billion (€1.9bn) annual space budget cannot compete with NASA’s almost $19bn (€13.3bn). But Russia is a world leader in the commercial satellite-

The biggest space budgets

launch market, which further helps to propel its space industry. Russia then hopes to establish a Moon base by 2030 and stage a Mars mission shortly after. When NASA’s shuttle fleet is fully retired later this year, the ISS will be dependent on smaller Russian craft to ferry crews and supplies. As Russia forges ahead with its international partners, the vision for space exploration continues to come into focus. “The future lies in co-operation,” Roskosmos space agency chief Anatoly Perminov said. “Space exploration of the future means ... 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, 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.”

Svetlana Smetanina RUSSIA NOW

n times past, Russia never received especially good reviews from those intrepid travellers who journeyed here from the West. Their memoirs of Russia are rife with epithets like “wild and barbaric” or “mysterious and strange”. Centuries have passed, but the picture of Russia abroad remains essentially the same.“People in the West know astonishingly little about Russia,”writes Sweden’s Lennart Dahlgren, who worked for close to a decade as the head of IKEA’s operations here. Dahlgren, too, has published a memoir:“Despite Absurdity: How I Conquered Russia and How It Conquered Me”. This book, published last

NIKOLAY KOROLEV

Profits in space Hidden cosmonaut training centre could become a new Monaco

Star City bets on tourist roubles Still cloaked in secrecy, the ageing Soviet-era space training centre near Moscow is splashing out on a futuristic makeover. VLADIMIR RUVINSKY

PHOTOXPRESS

RUSSIA NOW

The sheer density of decorated Heroes of the Soviet Union and Russia living here – around 40 bearers of this prized medal among a population of 6,700 – attests to a cosmic array of feats performed over the years. Built in the 1960s and still not marked on any map, Zvezdny Gorodok, or Star City, a collection of hangars and Soviet apartment blocks hidden in the pines 25 kilometres 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 futur-

A crew trains on a submerged model of the space station

istic set of space training equipment, entering the complex is like travelling back in time. Formerly designated 'Closed Military Township No. 1', Star City became a curious monument to Soviet architecture. “Nothing has been done here for 45 years,”Mayor Nikolai Rybkin says, adding that 5 billion roubles (€125m) are needed for major renova-

tions. The government has now promised the funds in addition to the 200m roubles (€5m) provided to spruce the town up for the festivities on the 50th anniversary of Yuri Gagarin’s historic flight. A former KGB colonel who was elected mayor in 2009, Rybkin has ambitious plans. As investors appear, he aims to turn Star City into a tourist attraction linked to the

capital by special train, with futuristic hotels, business centres and places of entertainment. “I want to see the whole place abuzz,” Rybkin says, citing Monaco with its luxuries and low crime rate as a model. The transformation effectively began in 1994, when NASA was allowed to establish a permanent presence at Star City. Since then, Rybkin concedes, income from wealthy foreign space enthusiasts has paid salaries and has kept the city going. But 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 three-seater Soyuz spacecraft that, with the retirement this year of the US shuttles, will be the only

means of ferrying crews to the International Space Station. Two Russians and an American were training in the Soyuz simulator. Then there is the giant centrifuge, which can simulate not only G-forces but also weightlessness, and a mock-up of the space station that can be submerged in a giant pool to simulate low gravity. The esprit of the space community is tangible everywhere. Photos of men and women who underwent training here line the halls, including Russians, Germans,Vietnamese, Americans and Chinese. A triple “hooray”thunders from one room as a Russian team marks a birthday, likely 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 Rybkin’s plans come to fruition, many more foreign visitors will also tread as Star City prises open its doors to the outside world.

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year in Swedish and Russian, contains nary a word about business. Its value is in something else, in its attempt to explain to the reader why it is best not to approach Russia with the standard set of myths and stereotypes. “Those who call themselves Russia experts usually don’t understand the first thing about it,”Dahlgren writes. “People who say they don’t know much about Russia come much closer to understanding it.” Thanks to Dahlgren’s book, Westerners can discover what he learned: that, in fact, anyone can get what he wants from Russia, be it pleasure and entertainment, or fantastic profits, or a terrible headache. One thing is certain:“You can love Russia or you can hate it, but you can never remain indifferent.” “I know for a fact that I will always miss that crazy space full of love, without fully understanding why,” Dahlgren writes. “Russia is a drug and I’m addicted to it.”

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