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The birth of a green activist
Medvedev looks beyond Europe in St Petersburg P.04
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Brave campaigner fights for her forest P.02
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Sail away: Russian rules the waves
Former banker catches yachting bug in Britain P.08
Tuesday, June 28, 2011
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Aviation Air-crash investigation gets under way as the next-generation airliner is unveiled in Paris
Superjet cleared for take-off Russia’s aviation industry, which has been in transition since the Soviet collapse, is back in the headlines – for reasons good and bad. paul duvernet and Dmitry rodionov russia now
News in Brief
Activist Orlov is cleared of slander The human rights activist Oleg Orlov has been cleared of slandering the Chechen president Ramzan Kadyrov. Mr Orlov, the head of the Memorial human rights group, was charged with defamation last July after he publicly accused Mr Kadyrov, a former separatist rebel, of being behind the murder of the campaigner Natalia Estemirova in 2009. Ms Estemirova recorded hundreds of cases of alleged abuse against civilians by paramilitary forces in Chechnya. Mr Kadyrov’s lawyers said they would appeal against the Moscow court’s ruling, which Mr Orlov hailed as a sweeping triumph.“It is a victory for everyone, for journalists and the whole of civil society, because I defended in court the right to freedom of expression,” he said.
Costly makeovers face public ridicule The Public Chamber, which brings together state and civil society representatives, launched an online project to crack down on superficial spruce-ups of towns before visits by government ministers. The project, Dear Old Potemkin Village, a reference to the fake Crimean settlements set up to impress Catherine the Great in 1787, encourages users to submit videos of hasty and costly makeovers. Blatant cases would be publicly investigated and win “anti-awards”, the chamber said. AFP/eastnews
A fatal plane crash, Kremlin rumblings about drastic steps to modernise fleets operated by regional carriers, and a flurry of orders for new aircraft have thrust Russia’s aviation industry into a patch of intense turbulence. Debates about the correct course for the sector’s growth intensified at the International Air-Transport Forum held in Ulyanovsk in April. Participants heard upbeat forecasts that Russia could corner 10pc of the global market by 2025. They also heard the president of the Partner for Civil Aviation Foundation, Oleg Smirnov, railing against “all these bankers who now run our industry” – a comment evidently aimed at the Aeroflot chief executive Vitaly Savelyev and the oligarch Alexander Lebedev, a stakeholder in several airlines. Then on the evening of June 20, a Soviet-built Tupolev Tu-134 airliner crashed on a road near Petrozavodsk in the north-western Karelia region while attempting to land in heavy fog, leaving 47 people dead. In their preliminary findings, investigators blamed pilot error rather than technical failure, although a formal conclusion has yet to be announced. However, President Dmitry Medvedev promptly ordered a study of whether
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Hello China... Hello USA...
Reflected glory: The Sukhoi Superjet 100 debuted in Paris this month, producing at least a dozen new orders
the ageing aircraft should be withdrawn from service entirely - while stressing that this was nothing to do with the crash. “In the case of scheduled flights, it might be the right thing to ensure they [the Tu134s] do not fly any more starting from next year,” he said. The Kremlin’s own air fleet also includes the Tu-134. The twin-engined aircraft,
and its larger modification, the Tu-154, have been the reliable workhorses of Soviet and Russian civil aviation since the Sixties, with more than 800 planes built. The plane that crashed was built in 1980. The president’s comments were a cause for some concern, since 90 Tu-134s are still in operation with many of the regional carriers that have sprung up in Russia
since 1991, according to the Rosaviatsia civil aviation authority. “[In doing this] we will instantly ruin dozens of air companies,” said Victor Gorbachev, head of the Airport Association, a private lobbying group working to develop civil aviation in Russia. “This is the main aircraft for domestic regional flights; there’s not much else to fly on,” he added.
Order book grows
factor in determining the sector’s future. The Superjet, the first Russian plane to be developed entirely in the post-Soviet era (and to use a large number of foreign components, including a French-made engine), marked an important milestone last month after it successfully completed its
Meanwhile, Russian manufacturers came away from the Paris Air Show this month with a dozen new orders for the new Sukhoi Superjet 100, an aircraft that is hoped to win favour among international carriers, and which could potentially replace the Tu-134. Production of the Superjet, together with the larger Tupolev Tu-204, is seen as a key
Bolshoi Theatre to reopen in October
continued on PAGE 4 ruslan sukhushin
Arctic convoys Britain’s aid in aircrew, weapons and supplies honoured
Brothers in arms remembered On the 70th anniversary of the German invasion of the Soviet Union in June 1941, Russia Now pays tribute to the vast British effort to supply the Red Army in the harshest of conditions.
Bigger families to be given free land
Inna leonova
special to russia now
Cruel sea: HMS Belfast on convoy duty. Ice on deck threatened to capsize the ships
In London last year, the then Russian ambassador Yury Fedotov presented awards to Arctic convoy veterans on HMS Belfast, an escort cruiser that served on the convoys and is now a permanent exhibit on the Thames. “It’s impossible to overestimate the role played by British sailors to provide vital supply routes across the Arctic,” Mr Fedotov said. “The sailors are still remem-
bered in Russia for their bravery and self-sacrifice.” A total of 1,400 vessels plied the route in 78 convoys between August 1941 and May 1945; 101 ships were lost. Belfast’s own sister ship, HMS Edinburgh, was sunk near Murmansk. The first convoy was carrying a very special cargo. By September 1, 550 pilots and ground crew from No 151 continued on PAGE 7
Parents with three children or more will be given free plots of land in an attempt to reverse the decline in Russia’s population. The measure was introduced in an amendment to the national Land Code signed by President Dmitry Medvedev in mid-June. It said: “Citizens with three or more children will be given free parcels of land held in state and municipal property, including for the purpose of individual house construction.” The size of the plot will be decided by local governments, although in some regions it has been set at up to 1,500 square metres. In an address to the nation in November, Mr Medvedev outlined a range of proposals aimed at supporting families with many children, and helping to reverse the decline in the population of 142.9 million (2010 census), down from 145 million in 2002.
shutter stock/legion media
As the number of childless couples grows, parents are being offered an incentive to defy the Soviet stigma surrounding larger families.
ria novosti
The partnership between Joseph Stalin and Winston Churchill was never easy, given the latter’s vehement opposition to the Bolsheviks. But when Germany invaded the USSR on June 22, 1941, bringing to an end the 1939 Paul Dean Molotov-Ribbentrop nonspecial to Russia now aggression pact between the For Tim Elkington, a former countries, the two men began RAF Hurricane pilot, the working together. gruelling voyage to and from In a radio address on the Murmansk to bring aid to day Adolf Hitler’s forces inthe beleaguered Soviet forc- vaded, Churchill expressed es is as memorable today as his sympathy for the Soviet his combat with German people, saying that though planes in northern Russia. “no one has been a more The Arctic winter brought consistent opponent of Comthick ice, while sea spray munism than I… Any man would freeze on the decks or state who fights against of the British ships that Nazism will have our aid.” brought his fighter squad- Within weeks, British naval ron to Russia in September convoys began steaming 1941, slowing the convoys through the enemy hunting to a vulnerable crawling grounds on the Arctic sea route to Murmansk and pace. “The ice made you top- Archangelsk, skirting Naziheavy: you had to keep chip- occupied Norway and fightping the stuff off to keep ing a relentless battle against yourself from capsizing,” the elements. Convoys movsays Tim, 90, one of the few ing in the winter months surviving members of the had to navigate in perpethuge war effort in which ual darkness, while those 5,000 tanks and 7,000 air- travelling in the summer craft were delivered to the were highly visible and exSoviets, not to mention 15 posed to sustained and comillion pairs of boots, among ordinated attacks from warthe four million tons of vital ships, U-boats and the supplies sent to the Allies. Luftwaffe.
Society Bid to boost population
The main building of the Bolshoi Theatre in Moscow, closed for reconstruction since 2005, is to reopen on October 17. “The Bolshoi Theatre is a symbol, not just for Moscow, but for the whole of Russia,” First Deputy Moscow MayorVladimir Resin told Rossiskaya Gazeta.“Therefore, for the builders, of whom there are 3,200, it is a matter of honour to keep their word and finish construction on time and without any setbacks.” The work will provide 50,000 square metres of extra space. The refurbished theatre will have a new backstage area, extra foyers and cafés, and underground storage premises for scenery and props. Details will include restored tsarist insignia, embroidered silk tapestry and new panels to improve the acoustics.
In this issue Birth rights: the size of the plot will be decided locally
“We have started seriously tackling the demographic problem and have launched a long-term programme,”the president said. “But we should understand that the next 15 years will see the effects of the demographic downturn that we suffered in the early Nineties.” Families used to receive so-called “mother’s capital,” a cheque for £8,100 issued on the birth of the second and third child. But despite incentives for bigger families, willing parents still face Soviet-era stigma, with several children being seen as a way to win a “free ride” from the state.
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Last of the Nomads Reindeer herders lament their vanishing way of life Turn to page 3
02
Politics & Society
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Ban on EU vegetables: the cucumbers of discord http://rbth.ru/13049
Activism Developers of the Khimki Forest highway project – and the authorities – discover something is stirring in the woods
Voice crying in the wilderness becomes chorus of disapproval
Lake Baikal, approved the construction of the highway in 2009. That same year Ms Chirikova, with the opposition’s support, ran for mayor of Khimki on a single platform – the rerouting of the highway. She came third, but the wide range of beliefs among her supporters shows that there is a demand in Russian society for specific problems to be solved, says Alexei Mukhin, head of the Centre for Political Information. “That’s why traditional opposition movements, afraid to switch from slogans to actions, are losing popularity,” he adds. The fight for Khimki Forest ended in a decision to narrow the route from 600m (1,970ft) to 100m (328ft), and prohibit commercial construction either side of the highway. Today, Ms Chirikova pins most blame for the destruction of the forest not on Russian bureaucrats with“their sleepy views of ecology”,but on foreign construction partners in the project.
Growing outrage at both environmental damage and the erosion of civil rights has bred a new type of activist – and one who wins votes. vladimir ruvinsky russia now
One of the people who doubted Ms Chirikova’s chances of success was Alexei Navalny, a lawyer and blogger who has made his name fighting corruption in state companies. Several years ago, he was a member of the liberal party Yabloko, and worked on a committee to protect Muscovites. “People came to me complaining about the construction of a highway in Khimki,”he says. Evgenia Chirikova found a new identity for herself – and others like her – by giving voice to a local grievance “My answer then was that residents were suspicious: too, received anonymous the threats on her life, if she’s it was senseless to get inan international multimil- threats, but she refused to afraid, she doesn’t show it: volved. They would put to“Every time [someone was gether an initiative group lion-dollar project had never give up. been stopped by a forest be- Some people thought she beaten up], I said to myself: and then all be beaten up. fore.“The Khimki adminis- must be crazy; others thought ‘One more time and I’ll run Now I see how wrong I tration didn’t understand that she was an aspiring pol- away.’ But you can’t spend was.” what we wanted,” she ex- itician trying to make a name your life running away. If Today, he is an active supplains. “‘If you want to live for herself, or suspected that we’re afraid, then we’ve lost.” porter of the Khimki movein the woods,’ they said, ‘go she had a commercial inter- Her many exchanges with ment, and helps members est in the deal. “It’s the bu- bureaucrats, who told her make sense of the competito Siberia.’” reaucrats who turned me that the highway was a fed- tions to build the highway, into an opposition leader,” eral project and therefore in which, according to Elena No future in fear But the activist did not re- she says.“I became a citizen not subject to change, did Panfilova, head of the Rusnothing to increase her sian branch of Transparency alise what she was getting very late, at 30.” into: “I was so naïve at first. She and her husband Mikhail confidence in the powers- International,“corruption is I thought this highway must own two companies special- that-be.“I grew up fast,”she a large component”. Like Ms Chirikova, Mr Naising in the electromagnetic says. be some mistake.” During the conflict over the protection of equipment. Prime Minster Vladimir va l ny b e c a m e f a m o u s Khimki Forest, 10 activists Mikhail manages both com- Putin, who, as president, had through actions rather than were injured by unknown panies while Evgenia does shifted the construction of a words, defending the rights Blogger Alexei Navalny, left, was sceptical of opposition to assailants. Ms Chirikova, the PR. While she is used to new oil pipeline further from of minority shareholders in the Khimki project; now he is one of Ms Chirikova’s key allies
As the EU reduces financial assistance for charity programmes, it is helping them team up with private funds and Russian donors. SOPHIA IZMAILOVA
dmitry markov
special to russia now
Until he was 16, Sasha was a child of the streets. His father died young and his mother was an alcoholic. He lived at several orphanages and stopped going to school, and finally fell victim to the bottle himself. In the spring of 2007, Sasha joined the two-year Street Children programme for homeless children and teenagers, launched in St Petersburg with EU funds. He moved into a centre operated by the Doctors for Children charity which secured the backing and devised the programme. Doctors, psychologists and teachers began to work with Sasha and he was soon back in school. He became interested in art photography, and entered St Petersburg State University of Cinema and Television. Sasha is now in his third year at the university and living with his grandmother, after the centre’s workers put him in touch with her. The EU spent €300,000 (£267,000) under this programme, providing help for more than 1,600 orphans and homeless children. In the end, most of the children were enrolled in schools. Some teenagers have found jobs, and almost 100 children have been adopted or returned to their biological parents. Denis Daniilidis, spokesman
Private virtue: a German foundation provides funding for this orphanage in Pskov
for the European Union delegation in Russia, described the Street Children programme as one of the EU’s most successful projects in Russia.“If the municipal administration or any other local body takes this project over after the money from Brussels runs out, it will be an achievement,”he said. The good news is that the St Petersburg government took over funding and the project is still going strong.
Euro well runs dry
Since 2002, the EU has financed more than 70 projects for children and people with disabilities in Russia.Yet the cash is drying up, the spokesman said. In 2002, the EU spent €9m on 39 projects in Russia; €3m on eight projects in 2009; nothing in 2010; and
then just €2m on people at risk this year. There are several reasons for the shrinking financing. First, the Tacis programme came to an end in Russia in 2006. Since its inception in 1992, Tacis had been the EU’s main channel for supporting reform in the former Soviet republics. “Russia used to be seen as a developing country, which accounted for the significant budget,” according to Mr Daniilidis. “Now, Russians have to solve their problems themselves, which is why we are winding up our projects.” Looking ahead, the needs of charities in Russia may be overshadowed by the turmoil in north Africa in recent months. The European Commission has earmarked this region as a funding priority.
But while well-received, the European funding alone cannot radically improve the situation in Russia. So the delegation is helping local funds to find non-governmental partners in Europe. “Today, we are focusing on networking; we want to help get people together, instead of just paying ourselves,”Mr Daniilidis said.
Private partnerships
More and more Russian nongovernmental organisations are finding private sponsors in Europe. For instance, an international programme offering scholarships to gifted homeless children has been in place in the Pskov region since 2006. It is being run jointly by European and American donors, who are providing cash for
The pair are now ready to share their experience. In June, they participated in a four-day workshop in the Khimki Forest that attracted more than 3,000 people of divergent political persuasions. The workshop became known as “AntiSeliger”, in reference to the annual meeting of proKremlin youth group Nashi at Lake Seliger in the Tver Region. The Khimki workshop succeeded, says opposition politician and participant Boris Nemtsov, because it drew people of different views and from different walks of life. Ms Chirikova says the goal of Anti-Seliger was to create a dialogue between different political and civil forces, and to “give Russian citizens real knowledge about how to defend their honour, dignity and rights in this country”.The organisers intend the workshop to be an annual event.
Travel Bureaucracy still keeps Europeans out of Russia
NGOs New funding initiatives on the agenda for orphanages
Children’s charities learn to find different partners as EU money runs out
Every time [someone was beaten up], I said to myself: ‘One more time and I'll run away.’ But you can’t spend your life running away. If we're afraid, then we’ve lost
98 children to pay their way through top schools. Staff at the Pskov branch of the Russian Children’s Foundation also help care for the stipend winners.Tatyana Bodrova, deputy director, who has worked with orphans since the early Nineties, says the foundation never got any direct help from the EU, relying on private sponsors from Austria, the Netherlands and Sweden.“Like any public organisation, we have an opportunity to take part in EU competitions – winning them and getting funds, or losing and remaining empty-handed,” she said. “Even so, we prefer to establish direct contacts with European organisations and we have many such partners”. Along with Finland, Germany is one of the main charity providers in Russia. Pskov’s children are also supported by sponsors from Moscow, St Petersburg and other Russian cities. Russian money is hard to come by, however. “Though Russian businessmen – who are our potential sponsors – have recently been topping the Forbes list, it is much more difficult to get cash out of them,” Ms Bodrova said. However, ordinary Russians are also now more concerned with civil society problems, said Irina Yasina, an economist and member of the presidential Human Rights Council. The numbers of charity institutions and sponsors are rising by the year. In the early 2000s, the Open Russia Foundation was, in fact, the only one to provide educational support for disabled children. “Only five years ago, it was as if these children did not exist, even for charity institutions,” Ms Yasina said.“And now, wheelchairs are being bought, and programmes have been put in place to teach orphans the basics of their future life. “In other words, there have been huge changes in recent years, and we are getting closer to Europe in this respect.”
Visas: the biggest tourist trap of all Delays in issuing visas and poor promotion of Russia as a destination are blamed for disappointing tourist figures. Inna leonova
special to russia now
It’s easier than it was to get a Russian visa, but delays caused by consulates “overdoing the formalities”are still putting visitors off, the tourist industry says. Russian tourists spent more than $26bn (£16bn) abroad last year, the Russian Tourist Industry Union (RST) says; foreign tourists in Russia spent just over $8bn. Last year, Russia hosted two million foreign tourists; while 12 million Russians travelled abroad. “Inbound tourism in Russia is growing more slowly than globally on average,”saysYuri Barzykin, RST’s vice-president. “The average inbound tourism index in the world in 2010 was almost 7pc, but just 2pc in Russia.” The Russian Tour Operators’ Association says fewer people are visiting from countries that have traditionally provided the largest number of holidaymakers. Although overall tourist numbers in Russia increased by 5pc in the first quarter of 2011 compared with the same period last year, the number of visitors from leading countries has dropped: from Finland by 24pc; Germany 19pc; the Netherlands 17pc and Spain and France 16pc. Tour operators mainly blame current visa rules and the delays in processing documents for entering Russia.“The decline in the number of tourists is observed in the countries where our consulates
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Influential ally
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Several years ago, the name of Evgenia Chirikova, a resident of the Moscow Region town of Khimki, was known to few people outside her circle of friends and family. She was a thirtysomething, focused on her children and her career. Ambitious by nature, she earned three college degrees and ran a small business with her engineer husband, and had no interest in politics. “I didn’t think it was possible to change anything, so politics seemed a senseless endeavour,” she says. Ms Chirikova, now 34, could pass for a student in her jeans and T-shirt. She doesn’t look like a person who commands the attention of a broad spectrum of opposition parties and movements. Yet a metamorphosis from suburban working mother to one of Russia’s bestknown activists occurred after Moscow city government decided to bulldoze the forest by her house to build a highway to St Petersburg. She became interested in the forest’s fate after the birth of her second daughter: “Suddenly I had time to look around, and I realised that while I was working and paying taxes, somebody else was using that money to destroy my habitat.” Ms Chirikova gathered local residents together and spoke out in favour of rerouting the highway; ecologists later came up with 11 alternative routes. Bureaucrats reacted to this initiative with bewilderment, while many local
large state companies. He and she are the same age; neither is affiliated with any political party; both prefer to work independently as activists, attracting supporters from across the political spectrum. They are a new kind of opposition in Russia, orientated toward solving real problems, says Nikolai Petrov of the Moscow Carnegie Centre. “If with Evgenia it’s the transformation of a civil position from a private protest, then Alexei targets political activity at the outset,” he said. Ms Chirikova “didn’t plan to go into politics; she was pushed into it by the local authorities,” says Mr Mukhin, adding that both she and Mr Navalny “have the image of a popular leader responding to public despair”.
With their watermarks and holograms, Russian travel visas are tough to forge — and can be tough to obtain
are overdoing the formalities,”says Irina Tyurina, RST press secretary. Another deterrent for wouldbe visitors to Russia is a shortage of modern cruise ships, tourist coaches and information in foreign languag-
Despite the wealth of historic sites and comfortable hotels, poor promotion holds back tourism es. But operators reject the frequent claim that Moscow hotels are much too expensive.“That everything in Russia is too expensive and that there is no infrastructure is a myth,” says Sergei Voitovich, director general of Svoi TT, an official representative for Bedsonline in Russia. “Most of the tourists coming to Russia buy the MoscowSt Petersburg tours, both cities with excellent four-star and five-star hotels. Hardly
a week passes without new foreign-brand hotels opening; their quality is quite up to global standards. Over the past five years, a total of 850 motels have opened in St Petersburg alone”. Yet despite the wealth of historic sites and comfortable hotels, the Russian tourist market also suffers from poor promotion.“Almost all other governments contribute to promotion by paying for the publication of catalogues about their countries. They often pay extra to the tour operators who organise charter flights to the country, and for the seats that they have failed to sell in order to keep up the flow. Russia does nothing,” says Ms Tyurina. But Russian tour operators are now trying to get the government involved. This month, the Russian Tourist Industry Union wrote to the Foreign Ministry proposing the setting up of a working group to address the future of tourism in Russia.
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03
Tribal people Nenets reindeer herders fight to keep their traditional way of life as their north-western Siberian homeland is transformed by the gas industry
‘We are the last nomads. Our children will live in towns’
Out on a limb: the Yamal Peninsula in north-western Siberia
anna nemtsova (3)
Tented love: the Nenets claim their tundra life is vanishing
They have bare earth floors, endure extreme temperatures and are always on the move. But the Nenets are not impressed by Gazprom’s ‘improvements’ to their homeland – or its money
Learning the ropes: a youngster tries out his herding skills
Nenets reindeer herders are struggling to protect their nomadic heritage as state-owned Gazprom transforms the tundra in the search for gas.
pery insulation material. It was a goodwill gesture, intended to ease the migration route to pasture for the Nenets, that failed.Traditionally, different Nenets groups moved across the Yamal Peninsula along defined corridors, and Ms Sarteto’s route leads into the heart of the gas field. A spokesman for Gazprom said the company was attempting to share the land with the tribes and act as a benevolent neighbour, but gets little thanks. “No matter how hard we try to help them – provide transportation, pay them salaries for what they historically did for free, build bridges over the pipes, or build schools and kindergartens for their children – the Nenets still complain,” said Andrei Teplyakov, spokesman for the company’s Yamal operation. Indeed, there is a long list of Gazprom efforts that could be read as improvements for the nomads in what is called
anna nemtsova
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Lena Sarteto’s puffy, roughskinned hands are a flurry of activity. As water boils over the fire in the centre of her teepee, Ms Sarteto, a nomad with the Nenets indigenous people of western Siberia, is cooking a feast for her guests and her family of five. She chops up dark red pieces of jerked deer meat, peels a huge silver fish, and places pieces of dry bread and biscuits on plates that she stores in a wooden sled. Her floor is the grass beneath her feet; fish bones and scales litter the room around the fire. The fish bones will stay there when they move on. Ms Sarteto is in a hurry. In a few hours, her nomadic group of about 10 families -
be cut out of the tundra that they once called their own. “The fish tastes dead; we feel sick after drinking water out of the lakes; our reindeers get stuck in wire loops or trip over pipes, break their legs and die,” said Ms Sarteto. Then she repeats a line like
still called Brigade No 5, their official name from Soviet times – will push further into the North. They herd their 3,000 reindeer to the shores of the Kara Sea, reaching that part of the Arctic Circle in August. Then they turn around, fleeing the frost and returning their reindeer to the grass and moss of the warmer tundra. It is an age-old cycle, but one that these families know is increasingly under threat. The Yamal Peninsula is also home to Gazprom, the huge Russian energy company that supplies natural gas to much of Western Europe. And as Gazprom pushes into the peninsula it has brought the kind of development — road, rail, and pipelines — that is transforming the tundra into a landscape they are increasingly failing to recognise. The Nenets have in recent years been introduced to asphalt highways, rusty metal, wire and drilling towers. In short, Russia’s wealth appears to
We have no deputies to speak for us in parliament, no oligarchs to pay for our legal defence mantra:“We are the last generation to lead a nomadic life; our children will live in towns, without tundra.” The Yamal Peninsula contains the Bovanenkovo gas field, a vast tract containing about 4.9 trillion cubic metres of natural gas that Gazprom expects to begin pumping next year. Drilling towers have begun to dot the horizon. And to help exploit the valuable gas resource, a
new 325-mile long railway opened last year. Many of the 13,000 nomads left on Yamal Peninsula fear they will be forced into permanent settlements - a lifestyle change the government is encouraging, but which is dreaded by a people who have long forged their identity as travellers across the tundra’s expanse. No one knows exactly how many hundreds of years the Nenets have kept the same yearly rhythm that always keeps the reindeer ahead of the biting frost. “Our research shows that the biggest fear that nomads have is not global climate change, but the fear of being pushed out of the tundra,” said Vladimir Chuprov, who is a spokesman for Greenpeace Russia. During a recent camp break, men exercised by lassoing deer while women put up the teepees, or mya, as the Nenets call their homes. The reindeer provide the skins for the
teepees, fabric for clothes, and food. This is not the first assault on their way of life. The Soviet Union attempted to force the Nenets into a form of collective farming. They split various tribes into Kolkhoz brigades, and obliged them to pay reindeer meat as taxes. Thousands moved into towns in Siberia, and the Nenets struggled to maintain their traditions. Their activists see the latest government attempts to settle them as a renewed assault.“We are little people,” said Yezingi Hatyako, a 61-year-old elder. “We have no deputies to speak out for us in parliament, no oligarchs to give us money for our legal defence.” As Lena Sarteto’s Brigade No 5 moved north they had to cross two paved highways, a struggle for the reindeer – 300 per family – and young families with a few dozen wooden sleds. A team of Gazprom workers had covered the Tarmac with a slip-
THE numbers
13,000 nomads still live on the Yamal Peninsular, despite decades of state attempts to resettle them in towns and cities.
4.9 trillion cubic metres of natural gas awaiting extraction by Gazprom from the peninsula’s main gas field.
2,500 dollars of state funds are paid to the Sarteto family per month. They would give it up for an undisturbed tundra.
the Yamalo-Nenets Autonomous Area. The company pays salaries to the Nenets tribesmen for herding or to Nenets women for looking after their families. Lena and her husband receive about $2,500 (£1,500) per month, a decent income in this part of Russia. Every summer, Gazprom helicopters fly to the nomads’ camps to pick up more than 2,000 Nenets children and take them to boarding schools inYar-Sale, the capital. But Lena Sarteto says she would live without the cash in return for an untouched tundra, her family around her. She turns to the family’s wooden idol, resting on a piece of fur, and places it outside. The divinity it represents is not supposed to share the house with strangers, a promise increasingly difficulty to fulfil. Ms Sarteto repeats her prayer, as futile as it seems: “Let Gazprom leave soon, andYamal become only ours again.”
Education Along with parents and teaching professionals, President Medvedev has stepped up the campaign to address falling standards
Schools report: must try harder, say educators Alesya Lonskaya
special to russia now
“Over time, apes waded into water more and more often, further and further away from the shore, learning how to swim and to dive for food. They developed an erect posture. For some yet unknown reason, some apes resumed their way of life on land, while others became so adapted to life at sea that they remained there forever and turned into dolphins.” This version of the origin of man from a recently approved civics textbook for fifth-grade pupils prompted some parents to write a letter to President Dmitry Medvedev complaining of the incompetence of the Education Ministry. The parents’ frustration was echoed by some of the teachers: “Some dubious subjects have recently been introduced in the curriculum. This rubbish takes away time from the main disciplines. It’s no wonder the quality of education
is declining,” said Sergei Raisky, a Russian language teacher in Moscow. Mr Raisky, 41, is considered young compared to his colleagues: the average age of a schoolteacher is 48, and one in every five teachers is past the retirement age.Young people do not want to work as teachers because of the low pay, an average of $480 (£300) a month. Critics say that Russian schools are steadily deteriorating, partly due to the age of teachers and underfunding of schools at all levels.The big shock came when a recent Programme for International Student Assessment (Pisa) survey ranked Russia – a country once known for its education prowess – 43rd in the world. Pisa is an internationally recognised student assessment for 15-year-olds carried out by the Organisation for Economic Co-operation and Development (OECD). After the Pisa survey results were announced last February, President Medvedev announced a programme for school reform.“Pupils will be involved in research projects and creative activities so they
How the system works
photoxpress
When a textbook gave a false version of evolution, parents angered by falling standards took demands for reform right to the top.
A new generation of Russian children enters a school system facing radical change
can learn how to invent, understand and assimilate new things, express their own thoughts and make decisions,” he said.
Giving schools a choice
The Government is preparing full-scale school reforms which will introduce individualised learning. Reforms in primary and secondary schools (grades 1-9) will begin in September. Some teaching
will be done outside the classroom: students will be given 10 hours a week for tours, walks and creative work in places of cultural interest.The government has also promised a 30pc increase in teachers’ salaries this year. But reforms at high school (grades 10-11) are still in the design phase. “The school will have more power to form its own curriculum in accordance with
the students’ wishes,” said Irina Abankina, director of the Institute of Education Studies at the Higher School of Economics National Research University. The pupils will choose a total of six additional subjects and decide whether they want to study them at the basic or professional level. There should be at least four in which the pupil will pass the Unified State Examination.
Tuition at Russian schools is free, as are textbooks. Parents pay only for school uniforms and meals (this applies to 48,809 state-run schools, while the number of private schools in the country is just 665). Children start school at seven, and the academic year lasts from September 1 until the end
of May, with winter, autumn, spring and summer holidays. To enter a higher grade, pupils take set tests, and after the senior grades 9 and 11 they sit the Unified State Examination in Russian language, maths and two elective subjects that are required to enter their university of choice.
The applicant will then be admitted to university based on these results. Accordingly, a student who is not interested in the natural sciences will not be forced to study chemistry, physics and biology separately, and will be able to opt for an integrated natural sciences course that includes a more general study of these subjects.
“But the standard for high school assumes that basic subject knowledge already exists,” Ms Abankina said. Supporters of reform have also targeted the system for teaching foreign languages. Languages can at present only be mastered properly at special or private schools. At most public schools, students study a language, usually English or German, twice a week. But they learn by focusing on grammar and memorising texts, forsaking conversational language, say critics. “In recent years, our schools have offered only knowledge and not education. The result was a rampage staged by na-
In Europe’s footsteps
The reforms, designed to bring Russian school education in line with the European model, have caused a public outcry, as many parents feel they are an attempt to destroy a classical general education.
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tionalists in the centre of Moscow last December,” said Alexander Kondakov, a research adviser to the state on educational standards. He said that Russian schools were still authoritarian, but he also pointed out that there was a difference between now and 20 years ago. After the collapse of the Soviet Union, Russia began teaching the works of dissident writers and alternative views of the country’s history. However, the teaching system remains the same: lectures and repetition of what the students have been told by the teacher. Disagreement with the teacher, or any kind of inclassroom debate, is still perceived as insolent. “The [contemporary] school is less authoritarian than the Soviet school, but a partnership model of teaching whereby teacher and pupil act as equals has not yet arrived,” Ms Abankina said.“The teacher has lost authority and has to deal with rudeness in class, and he has yet to learn how to organise teamwork in the classroom, where an interest in teaching and learning is reciprocal.”
04
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Turbulent times for air industry CONTINUED FROM PAGE 1
TYPE: SHORT-HAUL PASSENGER AIRCRAFT WINGSPAN: 91 FT LENGTH: 98 FT MAXIMUM TAKE-OFF WEIGHT: 42.52 TONS PASSENGERS: 98 CRUISING SPEED: 514 MPH RANGE: 1,850 MILES
Mazda of Japan and Italy’s Fiat have joined the influx of carmakers into Russia with investments worth $80m (£50m) and $1.1bn respectively. Elvira Nabiullina, the economic development minister, said Fiat would make 120,000 cars a year, Russia Today reported. The agreement is under the “new regime” of incentives for foreign manufacturers, although the rules say they must make at least 300,000 vehicles a year. Carmakers can bring parts into Russia duty-free if they lo-
French companies have signed a £1.2bn deal to install ski-lift equipment at new resorts in the conflict-prone North Caucasus region. The deal, which was signed at the St Petersburg International Economic Forum earlier this month, marks the first major foreign participation in the $16bn (£10bn) North Caucasus investment campaign that President Dmitry Medvedev announced in January, just days after a bombing
High flier: the Sukhoi Superjet 100 is at the forefront of ambitious plans for the Russian aircraft manufacturing industry
the airline Red Wings was supposed to kick-start production, but that deal has been in doubt since late April. With further upheavals likely in the sector, the Ulyanovsk International Air-Transport Forum in April did see some
There are already 170 orders for the Superjet – from Russia, the CIS and Latin America
Sector unrest
The situation is more critical for the Tu-204, a medium-range plane capable of carrying 210 passengers. Having flown for the first time in 1989 and resembling the Boeing 757, the aircraft is having difficulty reinventing itself, given that only 69 have been built in 20 years. An order for 44 aircraft from
key issues aired. One bone of contention is how the industrial logic of concentrating production in one area clashes with the political drive to maintain employment levels in many locations. For example, despite
the international composition of the Superjet, the factory responsible for its final assembly is in Komsomolskon-Amur, almost 4,000 miles east of Moscow. But forum participants also struck an optimistic note. Mr Pogosyan said the consortium of Russian and foreign manufacturers involved in the project would build 30 Superjets in 2011, up from just seven last year, and that the number was expected to peak eventually at 50-60 a year. He also said he hoped that, with the help of the government aviation industry stimulus programme, Russia could take a 10pc share of the global civil aviation market by 2025. The government programme is focused on three aircraft, the first being the Superjet.
Who builds what for the Superjet?
calise 60pc of production by 2020. They must also invest a minimum of $500m. Mazda will operate under the current regime, which specifies annual production of 25,000 cars using 30pc locally made parts. It will produce up to 30,000 vehicles a year in the Primorsk region. Jaguar Land Rover has also indicated it will set up a plant in 2012. According to the analysts Avtostat, car production in Russia is forecast to grow from 1.8m vehicles in 2010 to 3m in 2014–15, mostly in co-operation with foreign companies.
SOURCE: RIA NOVOSTI
The second currently in development is the MS-21, a medium-range aircraft with a capacity of up to 212 passengers, based partly on the
Relations with EU cool as visa and trade talks stall Despite continuing dependence on trade ties with the EU, Russia is increasingly signalling that it has other options. BEN ARIS
PHOTAS
BUSINESS NEW EUROPE
organised by North Caucasus insurgents killed 35 people at Domodedovo airport, Moscow’s busiest. The infrastructure work will be delivered by French investors, while the Russian state will add financial security to the package. Two French companies have signed up to the project, but the high threat to security meant the Kremlin had to provide funding guarantees in case terrorist attacks stop the project going ahead.
ENERGY RUSSIA AND NORWAY MAY ISSUE ARCTIC LICENCES
Tu-204.With commercial operations due to start in 2016, Ryanair has shown particular interest in the aircraft, according to Kommersant. The
Economic forum Russia seeks closer links with US and China and makes joining WTO a priority
World Trade Organisation membership, visa wrangles and Russia’s warming to China and the US rather than the EU were the main themes of the Kremlin-sponsored St Petersburg International Economic Forum. Attended by a weighty lineup of political leaders and leading executives from the international business community, the forum underlined the Kremlin’s main foreign policy initiative: promoting a multi-polar world. The EU will undoubtedly be disappointed with its low profile at the meeting in terms of initiatives and deals. A comment by BP’s chief executive Bob Dudley highlighted Europe’s difficulties. He told delegates that his company’s deal to explore the Arctic with Russia’s state-owned Rosneft ‘‘was in everyone’s interests” – at about the time that Rosneft announced it would find another partner. One of the main messages coming out of the meeting, held on June 16-18, was that Russia was disappointed with Europe, and was working towards closer co-operation
MANUFACTURING MAZDA AND FIAT TO MAKE 150,000 CARS A YEAR
TOURISM FRANCE TAKES $1BN CHANCE ON CAUCASUS SKI RESORTS
LORI/LEGION MEDIA
first commercial flights with the airline Armavia. The aircraft is also due to go into service with Aeroflot.“We estimate the market volume to be more than 800 planes,” said Mikhail Pogosyan, the United Aircraft Corporation president, who oversaw the Superjet launch. The consortium of companies that builds the Superjet already has 170 orders on its books – from Russia, the CIS and Latin America, Mr Pogosyan added. But the mood over the Superjet’s launch has been clouded by comments by Igor Levitin, the transport minister, regarding potential compensation for Aeroflot (the largest buyer with 30 orders) after repeated hold-ups in delivery and, in particular, following disappointment over higher weight and lower energy efficiency than had been claimed. The position taken by government-owned Aeroflot on the largely federally funded Superjet programme“reduces the appeal of the product in the eyes of potential buyers, and could lead to state money being spent in vain,” said Maxim Pyadushkin, an air transport expert. None the less, the latest orders placed at the air show at Le Bourget were by the Italian air company Blue Panorama and the Indonesian carrier Sky Aviation. Media reports after the event also suggested that the US airline Delta was also considering placing an order.
IN BRIEF
responsible for the lack of any results at the Russia-EU summit in Nizhny Novgorod on June 9-10, where WTO accession and visa requirements topped the agenda. The two sides are so far apart on the visa question that they cannot even agree on a date to start discussions on what to do. The deadline to start talks about introducing a visa-free regime between Russia and the EU was delayed again to the end of July. Nor was there any movement on the EU’s stance towards Russia’s membership of the WTO, which is a pre-condition for talks on a badly needed new Russia-EU basic agreement. Without the accord, Russia’s prospects for joining the trade club before the end of this year are less favourable, despite the optimism of both the Kremlin and commentators. And little progress was made in the Partnership for Modernisation: the European Investment Bank and Russia’s state-owned Vnesheconombank only signed a memoranStrides of sorts: talks on visa-free travel to the EU foundered but the US agreed a deal dum of understanding to muwith the US and China. Eu- they burst, the whole world The president blamed these tually consider funding “political games”for Russia’s projects that are part of this ropean leaders were invited feels the effects. to the forum as honoured “There can be no doubt as to long delay in joining the glo- programme with up to €500m guests, but the presence of Russia’s continued integration bal trade club, but also took (£445m) from each side. China’s President Hu Jintao into the global economy. We a sideways swipe at the EU Lack of progress in visa talks for playing similar games, par- with the EU was thrown into was a reminder of Russia’s have no choice here.” ever closer ties with its While closer integration with ticularly on the easing of visa relief by an announcement on the first day of the forum by eastern neighbour. Europe, by far Russia’s larg- requirements. President Dmitry Medvedev est trade partner, remains im- “We seek to introduce visa- the US ambassador to Russaid in his keynote speech: portant, Mr Medvedev stressed free travel with the EU and sia, John Beyrle.The diplomat “The global financial crisis that joining the World Trade other countries, but much here said a new agreement to give created big financial imbal- Organisation (WTO) was depends on our partners. We citizens of Russia and the US ances in a number of coun- Russia’s top priority for ex- are ready to demonstrate our three-year multiple-entry goodwill on this matter by visas had been agreed – a tries, including in Europe and ternal trade relations. the United States. New bub- “I think we can realistically taking concrete steps,” significant easing of rules and an important gesture. bles can form in almost any complete the process [of join- Mr Medvedev said. market, as we have seen clear- ing] by the end of the year, if, The visa issue has become a “Three years is just the first ly; and, with the global finan- of course, political games do sticking point in developing step,” Mr Beyrle promised bilateral ties, and was largely delegates to the forum. cial system the way it is, when not start up again,” he said.
third aircraft is a 300-seat plane aimed at low-cost carriers, which has been dubbed “Samolet 2020”, or 2020 Aeroplane.
Russia and Norway may start granting licences to develop offshore deposits in the Barents Sea and the Arctic Ocean in 2013-14 under a bilateral sea border agreement, Russia’s Natural Resources Ministry said. The Russian-Norwegian agreement on delimiting the sea border and co-operation in the Barents Sea and the Arctic Ocean will come into force on July 7, 2011. A ministry spokesman said the agreement offered new opportunities for the oil and gas industry in the northern
regions. The spokesman’s comments came after bilateral talks on the prospects of geological works in the area. The two countries intend to set up consortia to develop promising offshore deposits. The consortia will face severe environmental conditions, a shortage of infrastructure and various technological problems. The ministry is working out the legal terms of shelf development regulation, and trying to improve the tax regime for raising investment in shelf projects.
Agriculture Ignatiev tries to calm fears as exports resume
Russia may face grain shortage as ban ends As Russian grain exports resume, foreign producers fear prices could fall, but experts say an international shortage is inevitable. NIKITA DULNEV RUSSIA NOW
Russia’s decision to lift its grain export ban has led to fears of shortages at home and of falling prices for European farmers. The ban, which ends on July 1, was imposed in August 2010 following the rampant wildfires and drought that caused a substantial decrease in the country’s grain yield, and threatened a shortfall in Russian agricultural production. With exports due to resume imminently, Sergei Ignatiev, chairman of the Central Bank, has proposed solving this problem in part by introducing export a temporary duty on grain. Supported in his initiative by the Ministry of Economic Development and the Ministry of Agriculture, Mr Ignatiev is convinced that introducing duties is the only way to curb inflation and maintain steady supplies of the foodstuff on the domestic market. “Export duties should soften the inflationary effect from the lifting of the ban,” the central banker said. Foreign producers and con-
sumers are also concerned about the resumed supply of Russian grain to the international market. The influx could affect grain prices in Europe and on the stock market, and since the market has adjusted to the absence of Russian imports, they now have no guaranteed consumers. Since May 23, when Russia announced that it would lift the almost year-long embargo, European wheat futures have dropped steadily. But Tim Hannagan, an analyst with PFGBEST in Chicago, does not believe that there is any cause for panic on the grain market. “Russia will not dump huge volumes of grain on the market,” Mr Hannagan said. “Last year it endured a genuine disaster, therefore a large part of the production will go to the domestic market.”
Russia was not expected to have a strong grain harvest this year, so there may be almost nothing left over to sell abroad, he predicted. The International Grain Council maintains that a shortage of grain on the world market over the coming year is inevitable. According to the council, the world’s consumption of cereals this autumn and next spring will outstrip total global production by several per cent. Weather forecasters are also warning of the possibility of another unusually arid summer, which could lead to another poor harvest.
Growing concern: Sergei Ignatiev has proposed export duties on grain to help maintain supplies
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MOSCOW BLOG
Interview Alexei uvarov
Election jitters prompt another cash exodus
Come on down for the £22bn share bonanza
Ben Aris
Special to Russia now
R
privatisation chief promises sell-offs in 1,300 state-owned companies – if the price is right
ben aris
special to russia now
What is the goal of the privatisation programme – to make money or to transfer business from state to private hands? A combination of the two: money and management.The federal budget is in deficit, but raising money is not the overriding goal of the programme. The privatisation will have a good effect on companies that become transparent and understandable to international investors, as they will be brought to the same high standards as those in the West. We want our companies to meet these high standards. Howmanycompaniesarebeing sold, and how much money do you expect to raise? This is a very large, threeyear programme. There are more than 1,300 [companies] on the privatisation list, of which about 90pc are smalland medium-sized enterprises. These are companies that have ended up in government hands during the transition period of the past 10 years.
They are state-owned, but most of these companies are not big, and will only appeal to local business investors. Only the top 10pc on the list will interest international investors. These are big, strategic companies that we plan to sell off gradually through 2013, raising 1 trillion roubles (£22bn) in the process. This year, we expect to raise 200bn roubles (£4.4bn) by selling stakes in Sovcomflot and Sberbank. How will these companies be sold? By auction, through IPOs or from direct negotiation with foreign investors? And will you sell controlling packets of shares or offer the companies in smaller pieces? The method we use to sell the company will depend on the company itself; there is no universal recipe. The size of the packets will also depend on the company. For example, we could sell a controlling packet to a big foreign investor or sell them via IPOs in chunks with subsequent issues of shares. Following the infamous “loansfor-shares” auctions in the midNineties, auctions have a bad name in Russia. What can you do to ensure auctions are transparent and open to everyone? The auctions will be absolutely open and transparent.
We did not apply the proper rules to the“loans-for-shares” auctions. Actual privatisation law envisages clear auctions, so that anyone who wants to can participate. All they have to do is pay the deposit. While there are a few important companies on the list, won’t it be hard to sell most of them? For example, in May the attempt to sell Murmansk port failed as there were no bidders. We expect that about a third of the companies will not be sold at the first attempt. If they are not sold at the first auction, then we will use a “Dutch auction” and try again [where the auction starts at a high price, and reduces it until there is a buyer]. In 2010 and this year, we have sold most of the objects put up for auction, despite the failure of Murmansk. What are the major companies on the list that will most interest foreign investors? In 2011, major companies to be sold include Sovcomflot and a 7.5pc stake in Sberbank. In 2012, among the most important companies on the list are FSK, RusHydro, and another 10pc ofVTB Bank. Sovcomflot is the one of the biggest shipping companies
Man with a plan: Alexei Uvarov says asset sales will go ahead, even if they result in Dutch auctions
ben aris
As the sale of the decade looms, Alexei Uvarov, head of the Ministry of Economic Development’s property relations department, explains how it will happen.
05
Contenders for the 2011-2015 sale (prices in $bn) Public Market cap VTB Sberbank Rosneft RusHydro FSK Sovcomflot RSHB United Grain Company Rosagroleasing Russian Railways
yes yes yes yes yes no no
34.9 77.1 76.1 13.5 14.6 4 to 6 3 to 5
For sale
Value
25.5pc -1 share 8.7 7.58pc -1 share 5.8 25pc -1 share 19.0 7.97pc -1 share 1.1 4.11pc -1 share 0.6 50pc -1 share 2 to 3 25pc -1 share 0.8 to 1.3
no
0.5
no no
2.4 to 4.8 48 to 66
100pc
0.5
50pc -1 share 1.2 to 2.4 25pc -1 share 12 to 16.5
Timeline 2012-13 2011-13 2012-15 2012-13 2012-13 2011-13 2012-15 2012-13 2013-15 2013-15
Source: Russian Government, VTB Capital Research
pacity to absorb offers of this size, isn’t there a danger of flooding it with shares? The valuation of some of these companies is very high and we cannot sell them all at once. We also understand that Russia’s privatisation programme is in competition with the privatisation programmes being carried out by other countries. There is a lot of activity on the international markets at the moment, and investors have a great number of companies to choose from, but there are limited funds avail-
in the world, and it already works to international standards. It already has to compete with its international peers, so it is ready to be sold. We plan to sell a 25pc – minus one share – stake this year. Sovcomflot will probably be sold as an IPO, privatising its shares through the stock market. Later, we will sell another 25pc, and in 2015 we might sell a 25pc stake plus one or two shares. Some of these companies are extremely expensive. Since the market has only a limited ca-
able. However, we believe it is possible to raise 1 trillion roubles in the course of the next three years. Some companies listed fall under the “strategic investment law” that was passed in 2008 and excludes foreign investorsfromsomesectors.How will these companies be sold? Strategic objects can and will be sold to foreign investors. However, a state commission will review the sale. But there are only a few such companies on the list, like Murmansk port. The deal will be reviewed by the commission, but the sales will almost certainly be approved. You have a schedule for the sales, but market conditions remain volatile. Will you go ahead with the sales even when conditions are bad? Market conditions are important as we don’t want to privatise objects irrespective of the price. We do want to sell these companies over the next three years, but we won’t sell them cheaply. Getting a good price is not the top priority, but we are not going to sell at any price, either.
ussia’s leading companies are falling over themselves to invest abroad, striking deals from America to Africa in the past year. Russian companies have always been keen on investing overseas, but have previously tended to confine themselves to the countries of the former Soviet Union. Now, however, nervousness ahead of the forthcoming elections, combined with sound business practice, has caused the amount being invested abroad to soar: Russian companies invested $19bn (£11.8bn) in other countries during the first three months of 2011. At the same time only $9bn of foreign direct investment (FDI) came into Russia. Analysts were additionally disappointed as inward FDI into Russia was only $9bn in 2010 – less than half of the country’s outward FDI of $19.4bn. “The huge difference between the two figures suggests that Russia has to focus on improving its investment climate; it will be hard to attract more foreign investment while Russian business is actively investing abroad despite the huge need for domestic investment,”said Natalia Orlova, chief economist with Alfa-Bank. Russia has been plagued by capital flight. The country lost hundreds of billions of dollars to offshore havens in the Nineties, although once the economic boom started in 2000 much of that money returned. Since September 2008, however, the flow of capital has once again reversed. In 2010, $35.5bn left the country, $22.7bn of this in the final quarter of the year. Those losses were followed by another $21.3bn in the first quarter of 2011, de-
spite the clearly improving macro-economic situation. Why is the money leaving? Clearly, domestic businessmen are nervous. In April, Andrei Klepach, the deputy economic development minister, put on a brave face, saying that the government expects zero capital outflow over the course of the year. But in a May speech, presidential aide Arkardy Dvorkovich admitted that local investors were jumpy. Power in Russia is so vertical that any potential change at the top would cause huge disruptions in how the country is run, and business doesn’t like uncertainty. Oligarchs and“minigarchs”alike are salting away a little something in other jurisdictions, just in case everything blows up this winter. But unlike the capital flight in the Nineties, which was simply cash put
Unlike the capital flight in the Nineties, wary Russians are now buying up foreign companies on deposit, this time Russians are buying foreign companies and, in the long run, this will actually be good for the economy. The Kremlin is in the middle of a huge PR campaign to improve Russia’s image and attract more FDI, although Russia doesn’t need the money. The country has plenty of cash thanks to the high price of oil, but it desperately needs management skills and modern technology. FDI comes with these valuable assets. It doesn’t actually matter if the investment is foreign firms investing into Russian projects or Russian companies buying into foreign ones: at the end of the day, Russia still gets access to these valuable resources, regardless of where they are located. Ben Aris is the editor and publisher of Business New Europe.
M&A Central Bank remains upbeat, while market fears loss of competition could lead to poorer service
By the end of the year, Russia will have only one stock exchange. Government officials say the move will help make Moscow a global financial hub, but traders are not convinced. anton makhrov russia now
For the past 15 years, the MICEX (Moscow Interbank Currency Exchange) and RTS (Russian Trading Systems) have been fierce competitors. But, by the end of this year, MICEX will have swallowed its rival. The deal, in which roughly 35pc of RTS will be paid for in cash and the other 65pc exchanged for MICEX shares at a ratio of three to one, was scheduled to be signed in late June/early July. RTS has been valued at 34.7bn roubles (£768m), and supporters of the merger maintain that it will make the
Russian market more attractive to foreign investors, who were put off by the system of two exchanges. The united stock exchange is expected to eventually launch an initial public offering (IPO), and also to attract investors such as the European Bank for Reconstruction and Development (EBRD) and the International Financial Corporation (IFC), which will receive some shares in the unified exchange from Russia’s Central Bank. “The merger of RTS and MICEX, the creation of a united structure, raising its standards of corporate management and holding an IPO, a quality IPO, will help increase the organisation’s capitalisation and increase the liquidity of the Russian market,” said Alexei Ulyukaev, first deputy chairman of the Central Bank. Market players are, however,
getty images/fotobank
Traders sceptical over MICEX merger
Good fit? Opinion remains divided over the merits of amalgamating the two exchanges
sceptical about the plans for a merger. “The only way to attract Western investors is to raise the quality of the services we offer,”said trader Dmitry Belchenko. “And
and RTS,” said Anatoly Gavrilenko, chairman of the oversight committee at the Alor Group of companies.“All new products appeared on the market
d e ve l o p m e n t i s impossible without competition.” “The only thing pushing the market to develop was the competition between MICEX
thanks to competition. The market worked fast because RTS had to compete with the developing MICEX market. The RTS market lived by market principles.” In response, backers of the merger point out that the London Stock Exchange has not been hindered from developing by the absence of competitors in Britain. Private traders are also apprehensive about impending changes in the trading system. They are frightened by the idea of creating a single market index, the possible raising of tariffs, and the proposed reduction in lines of products and services. At the same time, the heads of MICEX have so far said nothing about the specifics of the merger, and interested parties can only guess how the Russian stock market will look next year.
Personal wealth In the quest for a ‘loadsamoney’ lifestyle, one country stands head and shoulders above the rest
There’s no beating Russia for size, mineral deposits, ethnic diversity, or, as the figures show, opportunities to rack up a cool billion. Tim gosling
business new europe
Russia may not be the richest or fastest-growing large economy, Europe’s largest, or even the economy that hosts the world’s most important financial centre, but it is still the best place to be if you want to become a dollar billionaire. The rate of return on investment in Russia is among the highest in the world - for the well-connected or aggressive
What are the chances?
risk-taker, that is. And over the past 15 years it was this large economy that offered the best odds of joining the big-hitters’ club beside the likes of Mikhail Fridman, ViktorVekselberg and Roman Abramovich. There were no billionaires in Russia when the Soviet Union was dissolved in 1991. In fact, there were none until 1994, when the first businessmen began to secure control over privatised property.“But since then, Russia has been churning out billionaires by the dozen every year,” says Jacob Nell of Morgan Stanley in Moscow.“Today, there are 101, according to Forbes
AFP/eastnews
Who wants to be a billionaire? ‘We do,’ says Russia’s rich list
Trinkets for tycoons: gold-plated mobile phones are a must
magazine, and no sign of the number slowing down anytime soon.” Between 2004 and 2011, Russia produced one billionaire for every 1.87 million people, compared with every 2.29 million in the US and 4.13 million in Britain.
Meanwhile, China, the darling of the emerging markets, has produced one billionaire for only every 11.76 million people over the same period. Prospects are leaner still in Germany, where the number of billionaires has stood at 52 since 2004.
LONDON BLOG
UK red tape still a barrier to Russian businessmen and then start the whole procedure all over again. specIAl to If you’ve been a good boy or russia now girl (ie, visited the UK on s an Englishman, I several occasions, and don’t tend often to showed that you were ready quote our cousins and willing to go home again from “across the and not disappear into the pond” in the United States. English hinterland) you can However, I gladly credit the apply for a two- or five-year inspiration for this column visa. This takes 28 working to John Beyrle, the US am- days (in real terms, a month bassador to Moscow, who and a half). said at the St Petersburg Now, if this procedure meant Economic Forum:“Bureauc- that fortress UK was protectracies are bureaucracies; ed against an influx of undebusinesses get things done”. sirables, I would agree that, Ambassador Beyrle was re- awkward though it is for honferring to the mutual deci- est visitors, it was worth doing. sion by the US and Russian But in practice, the UK visa governments to ease visa re- system serves more as a hinstrictions for their citizens drance to people wanting to visiting the other’s country. do business than it does as a Soon, US and Russian citi- deterrent to the undesirables. zens will be able to obtain And to make things worse, three-year multiple-entry bureaucrats have a tit-for-tat visas without even needing mentality. So the harder it is to get a letter of invitation. Marvellous. Are you watching, United Kingdom Bor- The UK visa system der Agency? is more a hindrance The matter of visas between to doing business the UK and Russia exercises members of the Russo- than a deterrent to British Chamber of Com- the undesirables merce more than almost any other.The process of obtain- for Russians to obtain a Briting a visa for Russia is bu- ish visa, the greater the likereaucratic but fairly straight- lihood that it will be more forward, especially if you go difficult for Britons to get a through an agency.There are Russian visa. some absurdities on the visa For once, I should be delightform, like “Give the tele- ed if we were to take a leaf phone number of your uni- out of the Americans’ book. versity”, and a requirement It’s high time that the bureauto list all of the countries crats realised the benefits that you have visited in the past international business brings 10 years; but on the whole to the country and made the the process is relatively quick visa process simpler or – and painless. shock, horror – abolished it Oh, but pity the honest Rus- altogether. This, of course, is sian businessman who unlikely to happen any time wants to come to the UK. soon. Apart from the fact that Even for the basic six- bureaucrats would lose their month visa, a Russian must self-perpetuating jobs, it apply to the consular sec- smacks too much of common tion at least 15 working sense. And that’s a commoddays before the visa is re- ity that’s all too rare in buquired, and leave a passport reaucracies the world over. with the application. If, in that time, you need to trav- Stephen Dalziel is executive el anywhere else, you have director of the Russo-British to retrieve your passport Chamber of Commerce. Stephen Dalziel
A
06
Comment & Analysis
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section sponsored by rossiyskaya gazeta, russia Distributed with THE daily telegraph TUeSDAY_JUNE 28_2011
Business moves beyond Moscow http://rbth.ru/13018
THE MISSILES mind game Fyodor Lukyanov
political analyst
T
Igor Ashmanov
S
niyaz karim
he debate on a joint European missile defence system that gained momentum after the Russia-Nato Lisbon Summit in November 2010 has come to its logical conclusion. On the eve of the meeting of Russian and Nato defence ministers, the alliance’s secretary general, Anders Fogh Rasmussen, officially declined Russia’s idea of a “sectoral”missile defence and Russia’s demand for legal guarantees that the system would not target Russia. The same was said with total finality at the meeting.The discussion has thus been thrown back to the chronic phase in which it has languished for 10 years (the topic was broached by then defence minister Sergey Ivanov in the early 2000s). Does that mean six months of intensive talks have been wasted and the parties have simply been confirmed in their opinion that no strategic rapprochement is possible? It would be odd to expect that close co-operation in such a supremely delicate sphere as strategic security would see a surge of progress after a series of well-wishing but noncommittal statements by the parties involved. Russia’s representative to Nato, Dmitry Rogozin, gave a graphic portrayal of the Russian proposal on joint missile defence as the mutual assistance of two knights standing back-to-back and fending off common enemies that appear before each one. A fine metaphor, but one that also explains the cause of the proposal’s failure: knights would not entrust their life and health to anyone unless they trusted each other utterly as they faced that common enemy. Relations between Russia and the United States (who have the final say on missile defence while Europe is merely an onlooker) have certainly improved compared to three years ago. But the challenge is not so much to establish trust as to put an end to an anomalous state of acute mutual suspicion. That is admittedly not enough to warrant standing back-toback. Nor has Moscow been seriously counting on it, as evidenced by the other pro-
The insuperable dilemma is that Russian-American nuclear deterrence, of which missile defence is a part, is a legacy of a bygone era, and makes no military sense today posal that has been aired in recent months, namely concerning legal guarantees that the US system does not target Russia. That is a horse of another colour. Back-to-back is not the same as formal non-aggression commitments – meaning these things cannot happen simultaneously but only consecutively, with a considerable time lag. First commitments and getting used to each other, and then somewhere a good distance down the road, sectoral missile defence. But that leads to a vicious circle, because neither side intends to assume obligations.
Should ratification by all the Nato member states be required, there are many member countries for which the whole point of the alliance is guarantees not for, but against Russia. As for the US Congress, any bill that would seek to limit American military reach – even if it is strictly verified arms reductions such as that agreed under Start – will have a hard time of it. In the case of missile defence, one cannot imagine any legislative limitations. Some US congressmen, like the majority of the public, are convinced that missile defence is a strictly defensive system, and therefore no one has the right to demand from the United States that it renounce or reduce its capacity. Others who see mutual assured destruction as the key principle of strategic stability, parity and interconnection between offensive and defensive components of strategic forces, believe that having a free hand is an inalienable right of the United States and that America should not follow Russia’s lead.
Finally, there are those who think that the outdated Cold War agenda should be scrapped, as nobody expects Russia and America to go to war with each other; that there are entirely different threats; and that one should let bygones be bygones. The insuperable dilemma is that Russian-American nuclear deterrence, of which the missile defence is a part, is a legacy of a bygone era and makes no military sense today. It still makes political sense, however, because possession of the largest nuclear potentials still makes Moscow and Washington exclusive partners who must comply with the rules imposed by this interconnection. Attempts to remove it lead to a degradation of relations bringing them to a dangerous line. America’s withdrawal 10 years ago from the 1972 ABM Treaty, which Russia initially took in its stride, marked the first step towards bilateral destabilisation that reached its peak in the autumn of 2008. It is not by chance that the“reset”finally took off only after Barack
Obama renounced George W Bush’s plans to deploy national missile defence elements in Central and Eastern Europe. Even today, when the discussion on a joint missile defence is at an impasse,Washington’s current plans (phased deployment of missiles and radar in Poland and the Czech Republic) are much less feared in Moscow than the earlier plans, which at least gives breathing space for a mutually acceptable trade-off. Months of diplomatic talks and expert discussions on the European missile defence system have not been wasted. Perhaps for the first time, an attempt has been made to discuss the technical possibilities of a nexus between the systems as well as potential common enemies. In other words, the conversation has shifted from the “it cannot be because it cannot be, ever”phase to an“it cannot be, but why?”phase. Not bad for a first try. That lack of political readiness is the stumbling block is not surprising. The challenge today is to min-
imise the damage from the lack of a result. That is, a formula must be found that would leave the door open for a continued dialogue while tempering expectations. The next challenge would be to formulate a new agenda apart from missile defence, indeed one reaching beyond the Euro-Atlantic area. There is a consensus that in the 21st century the Asia Pacific region will be the main strategic arena. It faces the same problems of security and strategic stability that Europe once faced, but the balance of forces and the mentality of the actors are markedly different. Missile defence is a relevant topic there, too, but it must involve China and its concerns about US plans. The problem of Russian-American mutual deterrence will not go away, but in a different context lone knights may get new ideas. Originally published at Gazeta.ru
Fyodor Lukyanov is chief editor of the magazine Russia in Global Affairs.
happiness under wraps Svetlana Smetanina
journalist
niyaz karim
O
ne day in spring, an acquaintance invited me to attend an unusual event: a practical psychology festival called Planet of People. The organisers explained that the festival’s main goal was to bring psychologists together with potential clients. In Russia, the services of psychotherapists are not in great demand. The phrase “personal psychoanalyst”is more associated with a Hollywood film than with real life. According to a recent opinion poll by VCIOM, when confronted with a difficult situation, most Russians prefer to go to friends, relatives or colleagues for advice; or if worse comes to worst, they’ll solve the problem on their own. Only 2-3 pc of the respondents said that they would consult a psychotherapist. Still, that last statistic is hard to believe, given the hordes of people who turned out for the practical psychology festival. Although it’s possible that many were drawn by the free admission, because going to see a psychotherapist costs a pretty penny. There were so many interesting topics, I didn’t know where to look first. In cases
Yandex can BE a global player
As one professor argued, the idea of raising happy people like broiler chickens is simply monstrous like these, it’s better to pick one thing, preferably something global, such as a “discussion about happiness”. I wasn’t the only one looking for happiness: 40 minutes before the discussion began, the auditorium was jammed. I wiggled into the
Letters from readers, guest columns and cartoons labelled “Comments”, “Viewpoint” or appearing on the “Opinion” and “Comment & Analysis” 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
last free seat. The 40 people who arrived after me had to stand around the edges of the room. The discussion was led by Olga Troitskaya and Natalia Tumashkova, both members of the festival’s organising committee, and by Ekaterina Mikhailova, a professor at the Moscow Psychopedagogical University. Some people had come especially to hear them. “I attended their lectures a few years ago and liked them a lot,”the man sitting on my right told me. He had brought his girlfriend; she was about half his age, so his therapy sessions
must have done some good. Still, the moderators began by saying that they did not intend to dispense recipes for happiness. In the opinion of Ms Mikhailova,“The idea of raising happy people like broiler chickens is simply monstrous,” while the myth that says that if you do everything right you’ll be happy is destructive. The audience was soon drawn into the discussion – everyone had something to say. Opinions were divided. One part of the audience maintained: “A person does not need to go out and look for happiness since
he already has everything inside him.” Another part insisted: “If we knew from the beginning that we have everything inside us, we wouldn’t do anything. But since we don’t know, we suffer many hardships in life and come to understand that this is happiness.” Russians imbibe this attitude with their mother’s milk, thanks to Russian literature. Happy people, as we know, are few and far between in the Russian classics. And if in the end a character does find the happiness he or she deserves, like Natasha Rostova in War and Peace, then it comes only after all manner of physical and moral sufferings. I too wanted to ask the learned ladies a question: not a personal one, but in the name, so to speak, of all Russians. I have long been disturbed by Russia’s consistently low rating (around 150th) on the international happiness scale. I wanted the opinion of professionals: are Russians really that unhappy, or does this have to do with our tendency always to play things down? The experts all favoured the second explanation. “For a Russian to say to someone he doesn’t know that he is happy is equivalent to showing himself to be an idiot. We are complicated, after all; that means we must have
This eight-page pull-out is produced and published by Rossiyskaya Gazeta (Russia), which takes sole responsibility for the contents. Internet address www.rbth.ru Email uK@rbth.ru Tel. +7 (495) 775 3114 fax +44 (20 3070 0020) ADDRESS 24 Pravdy STR., bldg 4, Floor 12, Moscow, Russia, 125 993. evgeny abov Editor & publisher konstantin fets executive editor alena tveritina editor Olga DMITRIEVA editor (UK edition) nick allen guest editor (uk) Paul Carroll, sean huggins subeditors (uk) Andrey zaitsev head of photo dept. milla domogatskaya head of pre-print dpt. ilya ovcharenko layout e-Paper version of this supplement is available at www.rbth.ru. Vsevolod pulya online editor.
problems. Not to have them is almost indecent,” said Ms Tumashkova. She imagined that the ordinary Russian would probably answer the question of whether he was happy or not as follows: “Now, sir, let’s first define what you mean by happiness.”After that, the pollster compiling the international happiness rating would probably check the box marked “deeply unhappy” and say goodbye. This fruitful discussion went on for two-and-a-half hours. And none of the people forced to stand left early. We were all too busy searching for the Russian formula for happiness. And we found it, as it always happens, completely unexpectedly. The discussion had finally wrapped up and we were all getting up to go when a girl in glasses, evidently a student, suddenly exclaimed: “I’m so happy I had the chance to talk to such intelligent people!” Well, there you have it, Russian happiness: an animated discussion about lofty matters. And from this point of view the festival was a resounding success. Svetlana Smetanina is a freelance journalist and former staff writer at Kommersant, Gazeta and The Moscow News.
IT expert
ince the Yandex IPO triumph last month, there has been a heated discussion in the blogosphere and media: about the stock options granted to its employees; the number of staff who became instant millionaires and shareholders who became instant billionaires; whether its stock will fall or rise. I am less interested in the greed games or in how many start-upsYandex’s newly rich will establish than in whatYandex is going to do with all that cash. Investment memoranda always overflow with promises of unprecedented business development. So, in what areas can this web search engine boldly expand its business? In principle, maintaining a 66pc share of the domestic search market and unchallenged leadership on the Russianspeaking web is a worthy goal. There is a lot to be done here, of course, with e-commerce, mobile platforms, alliances and competition with social networks, digital TV, or geolocation services, to name just a few. But global expansion trumps them all. Today, real success must be global. So which direction can Yandex take outside the Runet, and what does it need to succeed? Google dominates the global web search market. Search is the core of theYandex business model, too, so any global expansion would mean taking on Google. This seems unimaginable: the global leader is much bigger in every possible respect. How do you compete with a rival that is, say, 50-fold bigger and better known than yourself? And one that owns what is generally considered to be a far superior global technology to boot? There are several obvious things to consider. First of all, the club of national search engines is very small. In fact, it is much smaller than the space exploration club – implying that web search technology is more intricate than space technology. Fewer than 10 countries have a national web search engine, and in only five of them is the country’s own search engine more popular than Google.Yandex is already a member of this small club, which makes it stand out. Second, Google achieved its leadership in most countries virtually for free – simply because there was no national search engine there to start with. Wherever Google encountered some sort of resistance (such as China, the Czech Republic, South Korea, or Russia), it had to take a back seat.There are, of course, middle-of-the-road cases such as the cash-strapped Ukraine, which used to have its own web search engines (called Meta and Bigmir) and where Yandex and Rambler also made forays, yet Google still prevailed there. In most countries, however, Google came to fill a void. To some extent this void is still there because Google has made no special efforts to become localised in those countries and has no incentive to do so. That is the beauty of its singular position – it does not even have to spend anything in order to maintain its leadership (except, perhaps, for keeping the languid Bing at bay). Analysis of Yandex’s success on the Russian web demonstrates that profound localisation has been one of its key strengths, including local language support and a rich local content (including maps, schedules, traffic, movies and news), ie keeping a strong focus on whatever is important for the local user. It may, therefore, be concluded that this model might work on
other local markets where Google has been formally localised at the source code page level, but continues to offer what is essentially no more than a simple query box. For example, a close look at Asia’s web search engine market reveals that Google is used there for want of anything better.The average number of pages viewed by a Google user after submitting a query is often three or four, compared with one on the Runet or in the United States, which shows the low quality of the search results. There are reasons to believe the Arab world, Africa, Latin America and even Europe are not quite satisfied with the global search engine. Granted, deep localisation requires resources, such as staff, a local office, and cash. But Yandex does not need to start up everywhere at once. Even Google cannot afford to fight Yandex on each individual local market. So far as Google’s technological supremacy on the English-language web is concerned,Yandex trails Google by 15pc on the English-language web in terms of the aggregated search quality indicator, but it is far ahead of all other English-language web players. Bing, for example, is only one third as good asYandex. As for Google’s hardware supremacy, in the initial stages the number of servers or data centres had little bearing on the efficiency of index-
Catching up with Google on key quality measures is quite doable for Yandex, even on the English-language web, not to mention the various national web segments ation. Analysis shows that Yandex trails Google significantly in terms of recall (by two-thirds), while Bing and Yahoo are much worse off. That is where the IPO comes into play: double or triple your hardware to index no fewer English-language (or any other) web pages than Google does, and worry about the load later, when you achieve user numbers anywhere near Google’s. But that would be an enviable problem indeed. All in all, catching up with Google on key quality measures is quite doable, even on the English-language web – not to mention the various national web segments. The real problem facing international expansion is marketing, not technology. How do you displace Google, the very synonym for web search, from consumers’ minds? In principle, the experience of IT security firm Kaspersky Lab (retail brand number one in Germany, the US, and dozens of other countries) shows that it is possible to take the fight with huge global rivals onto their own territory. The tools are available; all you need is effort, boldness, time, and money. In short, I believe that international expansion should be the focus of Yandex’s development. Technological development, fighting for a share of the Russian-speaking web, or dabbling in mobile applications are all fine, but you just cannot sit in your national domain and wait to be swallowed up by your rivals. Attack is the best form of defence. Originally published in Vedomosti
Igor Ashmanov is an IT expert and the founder of Ashmanov and Partners.
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History
Russia now www.rbth.ru
most read Second World War: a victory we can all agree on http://rbth.ru/12851
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07
Convoys gave Soviet Union a lifeline
The airmen quickly formed tight bonds. Everybody was very friendly; there was no silence or distrust 120 metres minimum,” says Mr Elkington. Each flight of six aircraft was arranged two wide and three deep. With a Hurricane being 10 metres long, the lead planes were more than 30 metres forward. “So you’ve got 100 metres to take off in. One just followed the leader, and he made it. One plane did damage its undercarriage striking the rise at the end of the deck. Mainly, we were glad that all the aircraft started.” Then there was the cold to contend with, and no guarantee that even the hardy Hurricane would not suffer in temperatures lower than -30C.“A couple of aircraft experienced engines cutting [out] at certain heights.” For all the tensions between Churchill and Stalin, the ordinary servicemen quickly formed tight bonds. “Everybody was very friendly indeed; there was no silence or distrust,”says the veteran.“They were very keen to learn and work with us. I think in some ways they were more experienced than we were, and were considerably older than we were. The boss, Safonov, was
Paul Dean
Wing of the RAF arrived in Murmansk with 40 Hawker Hurricane fighters, the planes that, together with the Spitfire, had won the Battle of Britain.Their objective was to provide immediate air defence against the Axis forces that had launched Operation Silver Fox in the hope of capturing this vital port. They were also there to train Soviet pilots to operate the first of what would eventually total almost 3,000 Hurricanes delivered to the Soviets. The huge scale of this aid was also a statement of Churchill’s commitment to the alliance, as both pilots and planes were considered essential to Britain’s defence. “There’s no doubt that we were under pressure; we could have done with 40 Hurricanes going anywhere else but across the seas to Russia,”says Philip Wilkinson, chairman of the RAF-Russia association. “I think they sent a big signal. What got there was immediately effective.They were sent into action on September 11, and on September 12 they shot down their first opponent. They provided an excellent level of cover.” No 151 Wing would eventually claim 15 victories for the loss of just one airman in action. It patrolled the skies over Murmansk, escorting Soviet bombers and helping to halt Operation Silver Fox, one of the few failed Axis operations of 1941. When not flying, the pilots instructed their Russian counterparts and found that the resident Soviet ace Boris Safonov, who particularly enjoyed flying the Hurricane, had a few of his own ideas. “They re-engineered the guns, they couldn’t believe we were firing such low-calibre guns,” says Mr Wilkinson.
Aged just 20, Tim Elkington reached Murmansk on September 1, 1941.While some of the squadron’s Hawker Hurricane fighter planes arrived in crates, others took off from the aircraft carrier HMS Argus. Before even touching down in Russia, the young airman faced the challenge of taking off from a deck only 143 metres long. “The quoted figures for a Hurricane to take off were
The Soviet War Memorial in Southwark, London Courtesy of Philip Wilkinson (2)
continued from PAGE 1
Winston Churchill saw Muscovites eating ice creams in the snow and said: "These people will never be defeated."
Air power: Hawker Hurricanes of 151 Wing shot down 15 enemy aircraft during their two-month deployment to Murmansk
Ramsbottom-Isherwood: received the Order of Lenin
exceptionally good.”Safonov became the first Soviet ace to claim 30 kills, but would die within a year, shot down while defending a British convoy off Murmansk. For their efforts, four pilots in 151 Wing would become the only Britons in the Second World War to receive the Order of Lenin, among them New Zealand-born Wing Commander Henry RamsbottomIsherwood, who later served in Burma. After escorting Soviet bombing raids and also claiming 15 kills to just one loss in action, 151 Wing were given orders to prepare for the voyage home in late November. The Hurricanes were turned over
to the newly trained Soviet pilots, and the British airmen set sail. “Most of the hardship was in that return journey,”Mr Elkington recalls. “The weather going out wasn’t too bad, but coming back it was absolute hell. It was difficult to maintain reasonable speed in the fog banks. We were down to five knots, which makes you very vulnerable, and it was eternal darkness. It was quite dismal. We were stuck in the ice for three days.You would move a few metres and it would freeze again. It was so thick you had to watch out for stowaways, they’d walk across the ice [from land] and let themselves in.”
Archives shed light on Stalin’s defence strategy On the eve of the 70th anniversary of the outbreak of what Russians know as the Great Patriotic War, the Foreign Intelligence Service (SVR) declassified archive material for the years 1938-1941. It includes dispatches from Western diplomats, among them an analysis of Kremlin foreign policy in the pre-war years prepared on September 27, 1941 by the British ambassador to the Soviet Union, Sir Stafford Cripps. The documents show Joseph Stalin was warned in advance of Germa-
ny’s plan to attack the USSR. They also make clear that several European countries did not object to Moscow signing the Molotov-Ribbentrop pact with Germany in 1939. Cripps notes: “There is no doubt that the immediate reason for the signing of this pact was, as the Soviet leaders have often said, their desire to keep out of the war…] In my opinion, the Soviet leaders never considered this pact anything more than a temporary means. The Soviet leaders were full of determination to use any op-
portunity, while there was still time, to strengthen their defences, to strengthen their strategic positions in case of war with Germany.” The first step was sending Soviet troops to Poland in September 1939, “immediately after learning that the only alternative would be the total occupation of Poland by Germany ... however, the USSR did what other countries were unable to do: it used the time it won through ‘appeasement’ to strengthen its forces of resistance”.
Hitler aimed to kill 150 million and impose slavery after shock attack
Night Witches: women pilots the Nazis feared
When the Soviet people learnt of the Nazi invasion in a radio announcement 70 years ago, millions stopped in their tracks in disbelief.
While Soviet men fought the Germans in 1941, women also took to the skies, as deady and committed to victory as their male counterparts.
itar-tass
russia now
“At 4 o’clock this morning, German forces attacked our country without a declaration of war.”That was the announcement Anastasia Polyakova heard on the morning of June 22, 1941.“I was planning to go to the sweet shop to stock up on sweets for summer camp,” recalls Ms Polyakova. “Then suddenly on the radio we heard there was to be an important announcement. I waited, listened, but I didn’t really understand, or rather I didn’t realise what had happened. I went off to buy sweets.The store was jammed, others were stocking up.” The recollections of the few people who remember the day the Second World War came to Russia are surprisingly similar. Both soldiers and civilians wrote in their diaries about the ruby stars over the Kremlin, the marvellous summer sun and the famous announcement on the radio. Few could imagine that the horror of war, raging for nearly two years in Europe and Africa, had come to the Soviet Union. Kirill Dryannov, a military expert at Moscow’s Museum of Defence, says that despite ominous intelligence reports, the Soviet command learnt of the attack only hours beforehand and had little time to prepare. Nevertheless, there had been signs that an invasion was imminent, such as attacks by German soldiers in Soviet uniforms who cut off lines of communication and killed officers. Early on June 22, they destroyed several bridges. Later that morning, 4,90 0 planes bombed airports and army depots. In that crisis situation, decisions were made by a single man: Joseph Stalin. Vasily Pronin, then chairman of the
Muscovites discover they are a nation at war, June 22, 1941
THE POLLS
Was the attack unexpected? Soviet propaganda claimed that the Nazi attack was unexpected. Newly released archive documents prove that Stalin was warned about the threat, although it is unlikely that he knew the exact date. A recent poll by the Levada Centre shows that opinion is still divided, but slightly more people tend to discount the official version.
Moscow Soviet of Workers’ Deputies (the equivalent of mayor today), remembers being summoned to headquarters on the evening of June 21. He said: “Around 9 o’clock in the evening I was summoned to the Kremlin with my secretary. When we walked into Stalin’s office, several members of the Central Committee of the Communist Party were already there. Their faces were stern and frowning.We sensed that this was no ordinary meet-
ing. And indeed, we had barely sat down when Stalin said, ‘According to the reports of deserters, German forces plan to attack our borders tonight. Is our air defence entirely ready?’ After a pause, he added: ‘Today is Saturday.Top workers are already on their way to their dachas, detain whoever you can in the city.’” They had to act fast: on the opposing side was a man who was hell-bent on the swift destruction of their country. Adolf Hitler’s plan to attack
THE QUOTEs
Klavdia Kalugina school pupil, moscow region
“
The war broke out when I was 15. I went to work at the Respirator munitions factory in OrekhovoZuevo. They gave us worker ration cards which were good for 700g of bread a day. So I worked there and joined the Komsomol (Communist Union of Youth). On days off we were required to attend secondary education classes. Later, when we finished our studies, they said that a sniper school had opened. Many volunteered to attend it and I also went there, being 17 years old. That was in June 1943. I was the youngest at the school.”
Ivan Zabolotny school pupil, Odessa region
“
There was a clubhouse in our village, where the local youth liked to gather, play checkers, listen to recitals and so-on. On that Sunday morning we were in the backyard of the clubhouse: I was practising on the horizontal bar and my friend climbed a cherry tree. Because of the border zone, military planes never flew over the village, but at that moment we saw a Soviet plane flying very low right over the centre. At noon, they called a meeting and informed the villagers that we were at war. I remember that it was a bolt from the blue for me. All of the women including my mother began crying, while the young men of the village got worked up with enthusiasm. All being patriots, we immediately set out for the military enlistment office.” More veterans’ memoirs: http://english.iremember.ru
nora fitzgerald
special to russia now
When Nazi forces swept through the Soviet defences 70 years ago, Luftwaffe raids destroyed hundreds of planes clustered together on a handful of airfields, destroying much of the Soviet air force before it even had a chance to fight back. Most of the fighter pilots waiting on the sidelines were inexperienced, and as their numbers also proved insufficient in the fierce battles of the second half of 1941, Radio Moscow made a remarkable announcement that was probably the first of its kind: a call for women who wanted to be “combat pilots just like the men”. The response was overwhelming. Bruce Myles writes in his compelling book, Night Witches: The Amazing Story of Russia’s Women Pilots in World War II (1990, Academy Chicago Publishers Ltd):“As the winter of 1941 continued into the dark days of 1942 and the Soviet counter-offensive around Moscow started, young women from the unoccupied territories of the Soviet Union – from as far
away as Central Asia – arrived in the capital.” They were schoolgirls and factory workers who had won wings in their local flying clubs, and now they wanted to fly fighter planes in the Great Patriotic War against the Germans. It is a chapter of Second World War history unknown to most people in the West. Women poured onto Moscow’s Pushkin Square, often after long rail journeys, arriving in the hope of seeing air combat against the Nazis. Within a year, entire regiments of Soviet women pilots fought the invaders, and inspired fear in the Germans, who called them the Night Witches. Many writers find themselves drawn to Lilia Litvyak, a Soviet fighter pilot in the Second World War, who faced enormous challenges during her heroic tour of duty. Born in Moscow of Jewish descent, she joined a flying club at the age of 15, and devoured every book on aviation, Myles writes. She was such a fast learner that she flew solo on the PO-2 biplane after four hours of lessons; she later became a flight instructor. Flying under the call sign White Lily, Litvyak faced much chauvinism, her colleagues recalled. Like most women, she needed a cushion on the seat to see out of the windshield. Yet her sorties against the Germans
have become the stuff of legend: the figures vary, but she is credited with up to 12 solo kills. Litvyak died in 1943 when her plane was shot down as she attacked German bombers in Ukraine. She was 21. M.G. Crisci, an American businessman and writer, has recently made Litvyak his life’s work. He collaborated withYelena Sivolap and Valentina Vaschenko, founderof the Lilia Litvyak museum, on a book, Call Sign, White Lily (2011). The self-published work is a journey through her life, romance, rebellion, heroism and death. Crisci created the Lilia Litvyak Fund to help preserve the museum. Through his interviews and research, Crisci said it was clear that “Lilia’s worst nightmare was that she could be shot down, and die as an unknown soldier”.But historians, journalists and writers have been drawn to her story, from Myles’s book to Reina Pennington’s Wings, Women and War : Soviet Airwomen in World War II (Modern War Studies, 2007). Litvyak’s story keeps evolving as new writers pick up the torch, but it is not easy to reconstruct her life and death. Her success in combat is not disputed, however, and sheds new light on the possibilities of women’s role in the military today.
itar-tass
Dmitry Zaika
the Soviet Union involved the seizure of its European territory within 16 weeks – before the onset of the first aut u m n f ro s t s . M i l i t a ry developments unfolded at lightning speed. The city of Brest fell on the first day. Six days later came the surrender of Minsk, the Belarussian capital. The Soviets managed to check the German onslaught only in the autumn, just outside Moscow. The military historian Konstantin Korzhenevsky believes that Hitler intended to use the conquered territories for elite housing for the fascist high command. But no servants would have to be hired for the Nazi leaders. Of the Soviet Union’s 190 million people, Hitler intended to kill 150 million and the rest would be made slaves for the invaders. According to Heinrich Himmler, head of the SS and overseer of the concentration camps, the Russian slave would have to know how to do only three things: count to 10 in German, write his name and know his master. “They were trying to convince people that this was a war against Bolshevism,”said Mr Dryannov. “In fact, the fascist ideologues, beginning with Himmler, were defending a racial theory. They maintained that this war would be the last march on the East. It would destroy the Soviet Union as the only impediment to the world supremacy of the Germans.” This information was circulated only among the ruling elite. But the Nazi air force also dropped millions of leaflets to Soviet troops urging them to surrender.Those who defected to the Germans were promised a “warm reception”, food and work. Meanwhile, young people across the country began receiving draft notices the day after the invasion, and posters exhorted: “All for the front! All for victory! The enemy will be crushed! Victory will be ours!”
Pilots of the 46 Taman female aviation regiment being briefed in the field
08
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The Barneo camp offers the intrepid – and well-off – traveller a taste of extreme outdoor life in the far North MICHAEL MARTIN
STEFANIA ZINI RUSSIA NOW
I have seen all kinds of hotels. In Florida, there are underwater suites; you can spend a night in the trees in Turkey; sleep underground in a coal mine in Sweden or in capsules at a Japanese train station; in a disused church in Scotland or in a former prison in Slovenia. But sleeping at the North Pole was unique. The Russian Arctic ice base Barneo doesn’t even have an address. Every year for more than 10 years it has appeared on the map for just 40 days, from the end of March until early May. Several tents and an airstrip float on the ocean currents, causing the coordinates on a GPS screen to change every second. The drifting camp is the northernmost hotel in the world. It is the only shelter in the expanse of the Arctic Ocean for polar explorers, scientists and a mixed bag of tourists who want to play at being polar explorers and
Krasnoyarsk to grant approval, before the personnel are brought in and construction of the camp starts.
touch the ever-moving top of the Earth.Visitors to this unusual refuge are never stationary, moving this way and that on the current, even when standing on the spot, trying in vain to tell east from west when all directions lie due south. And the endless polar day ensures that there is no sunrise or sunset.
Pole position
For most visitors to Barneo, the base is not the climax of the trip; it is just a temporary stop for several hours or days before and after the main event, the conquest of the North Pole. Tourists are delivered here from the mainland by plane. From the airstrip, the journey to the Pole is made by skis, dogsled or by parachuting from a helicopter. Every year Barneo plays host to hundreds of amateur and professional polar explorers as well as celebrities and the plain curious. Prince Albert II of Monaco visited the Pole in 2006. A few days before this writer’s arrival, Prince Harry left the camp. During his trip, a half-metre-wide crack opened in the middle of the runway, severing the air link to the outside world. Fortunately, the ice plates rejoined within two days. Otherwise, the camp organisers would have had to build a new runway on the nearest suitable ice floe.
On thick ice
As the organisers tell it, finding a suitable ice floe to host the Barneo camp sounds simple. Two bases are set up in
The polar base hosts hundreds of amateur and professional explorers, celebrities and even royalty early March, the first at 87 degrees north and the second closer to the Pole. Fuel and an ice reconnaissance group are flown in and the search for a large and solid ice floe begins. The floe’s coordinates are reported to the support team in Murmansk, which then sends a plane with tractors. An airstrip is cleared and a commission comes from
And the price of this adventure, sleeping in tents – sometimes in snowstorms – and in temperatures of -30C, to using outdoor lavatories? A total of 10,000 to 30,000 euros (£8,800-£23,300), depending on the length of your stay. Arriving too late to make the prince’s acquaintance, this writer instead met dozens of unshaven, happy tourists. Clearly, money was not an obstacle, despite the hefty price tag on the trip. Nor did people seem to mind
At the Pole itself, guests from around the world play golf, parachute, marry and sometimes divorce the basic conditions, being just glad to be able to say, “I’ve been there, too.”
Fast and fearless
On the way to Barneo from the Norwegian island of Spitsbergen, the only thing this batch of visitors could see from the twin-turbine Antonov An-74 plane was water and ice. Upon landing, the
welcome party included the explorer and pilot Alexander Orlov, the head of Barneo, the polar explorer Victor Boyarsky and Alexander Bakhmetyev, commander of the Krasnoyarsk Air Unit which is responsible for the air link with the outpost. The rapid tempo of the reception left no time for any jitters at the fact of our austere location: the group was immediately whisked off to sample Arctic hospitality in the form of slices of frozen fish, washed down with chilled vodka or straight spirits served on an empty oil drum. Then 10 minutes was allowed to carry rucksacks to the camp and be assigned a bunk, put on warmer clothes and make a dash for the waiting Mi-8 helicopter. Its engine and blades sped up and the aircraft, packed to the gills with people and gear, lumbered into the air. The first stop was near 89 degrees north, where the pilot dropped off five Australians who wanted to reach the Pole on skis. Fifteen more minutes of flight and the group finally reached the legendary destination of extreme exploration, the North Pole – where
Journey to the end of the Earth SEASON: April. PRICE: 10,000 to 30,000 euros, depending on length of stay. TRIP DURATION: from 24 hours to two-three weeks. ORGANISERS: For further information about the Barneo ice camp and related polar expeditions, see www.barneo.ru.
LAIF/VOSTOCK-PHOTO
A £8,800 stay in a tent on an ice floe is an unlikely dream holiday. But there are plenty of takers...
it was quickly each to his own. A middle-aged couple from New Zealand produced a bag of golf clubs and hit balls across the endless icescape; four Japanese women whipped out cameras to take photographs; the guide uncorked a bottle and poured champagne, but no one managed a sip before it froze. Then everyone stared as an English Romeo dropped to his knees in front of his Chinese girlfriend and proposed on this hallowed spot. Back at camp, the first hot meal awaited, beginning with
steaming bowls of borsch with sour cream, and followed not by canned meat but fresh beef cutlets. “Barneo is the best freezer for storing meat,” the cook enthused. There are no storage concerns here: sour cream, yoghurt and other perishables can be kept in a warm tent for days because a steady refrigerated temperature prevails at floor level. At an adjacent table, American scientists bemoaned the loss of an expensive buoy that was blown out to sea. At another, a local guide told a
GLOBAL RUSSIA CULTURE CALENDAR
Sailing Banker drops out of rat race to found first Russian-run school in Britain to be certified by Royal Yachting Association
Couch potatoes help launch sailor’s dream 21 for his maiden, life-changing sailing course. “It took place in Wales, in winter, storms for three whole days – I absolutely loved it!” says Yuri, who is now 33. ANASTASIA DEDYUKHINA In 2001 he got his skipper’s RUSSIA NOW licence and immediately “Spend your weekend on a bought a yacht after “long yacht rather than the couch.” and persistent”negotiations That was the first ad placed with the owner. Much as he in Russian shops in London grew to love the Tingara, she byYuri Fadeev, the Tashkent- soon turned out to be a pig born City banker-turned- in a poke. owner of a floating money pit – and founder of the only Skippers of the future Russian-run sailing school in “I soon understood why the the United Kingdom certi- owner agreed to sell it for fied by the RoyalYachting As- half the price,” recalls Yuri, sociation (RYA). who spent three years virtuToday, Yuri and his Musco- ally reconstructing his yacht vite wife Yulia bring hun- at Brighton Marina in East dreds of Russians to the UK Sussex. As his debts grew, to learn yachting, with cours- he decided to try to make es in sailing English thrown some money with the vessel. in. But commercial success The ads were made, the couch aside, theirs is a story of potatoes stirred and signed single-mindedness, romance, up, and he never looked back. high seas and perilously low “I was offering a simple voybudgets. age along the Brighton coast, yet everyone was excited about the idea – for Russians Humble beginnings It all started when Yuri, it was truly exotic.” whose family emigrated to The first four people who rethe UK in 1991, signed up at sponded to the ad went on
COURTESY OF YURI AND YULIA FADEEV
Yuri Fadeev caught the sailing bug in Britain at the age of 21, and later founded his own school. But he hit plenty of squalls on the way.
ple moved onto Tingara together, and the hectic pace of commuting soon overtook the heady flush of romance. They would wake at 5.30am and spend two hours on public transport to get to London whereYuri worked as an investment banker andYulia as a financial analyst. But their own business also grew, and the small group that comprised Capstan began to launch its own events. In 2007 the Fadeevs organised their first regatta.
Sailing boot camp
Inevitably, they had to choose between a professional life in the City or on the sea. The sea won. In 2009, the couple left their jobs in the finanYuri and Yulia Fadeev graduated from a yacht that had to be rebuilt to a RYA-accredited fleet cial sector and embarked on the first of their annual to become skippers at other And then he met Yulia on a was reading. “I asked him, European voyages, through sailing schools, and still take train. The epitome of a Rus- ‘Do you speak Russian?’”she the Bay of Biscay and into part in Capstan's events as sian belle – tall, blonde, blue- recalls.“He replied ‘Da,’ and the Mediterranean. This was eyed, softly spoken – and with then looks and says, ‘I’ve got definitely not a case of sailold friends. ing into the sunset, but rathThe touring business lasted a career in radio journalism a yacht, you know...’” a couple of years. And while behind her, Yulia might not “That’s all I could talk about er embarking on their own Yuri worked in a bank in the have fallen for the paint- at the time since I’d invested kind of 18-month sailing City of London during the smeared man in the cap with all my time and money in it,” boot camp. “We learnt a lot about the week, he spent his free time the bag of beer had it not Yuri responds with a grin. been for the Russian book he After a few months, the cou- reality of cruising,”Yuri says. renovating Tingara.
“Don’t dare ask a Russian how things are going for them. You’ll find yourself sat in some cafe several hours later with the strong impression that you could easily become their biographer.” “The kaleidoscopic speed of change in Russia since 1991 got us used to the idea of not planning for more than a month, or even week, ahead.”
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“They write in books that sailing means unlimited freedom – not really, it’s actually gruelling physical and psychological work.” After steady enlargement, and the gradual acquisition of a modest fleet of four, came the proud moment of Capstan’s acceptance last year as an accredited RYA sailing school. There are 2,000 RYA schools worldwide: Capstan is the only Russian-run school of the 50 in Britain. As well as offering elementary and advanced instruction and vessel charter hire, the school takes experienced and novice sailors to such highlights of the sailing calendar as Cowes Week, which is held in the Solent every August. Today, the Fadeevs constantly count their blessings. “As they say, turning a hobby into work is generally an excellent way of ruining a perfectly good hobby, but we must have been lucky,” says Yuri. “The more we teach people and the more we race and sail, the more we love what we do.”
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newlywed couple how he was present not only at a wedding at the North Pole but also for the announcement of a divorce, after a client called his wife by satellite phone to end his marriage. Eccentricities aside, it is heartening to see so many people keen to tread in the footsteps of the American explorer Robert Peary, who claimed to have been the first person to reach the North Pole in 1909, or Umberto Nobile, whose airship may have been the first flight to reach the Pole in 1926.
NOSTALGIA FOR REALITY AUGUST 5–13, 15-20 AND 22-27 EDINBURGH FRINGE FESTIVAL THE SPACE ON THE MILE, SPACE TWO (VENUE 39)
A performance by the SSSR Production Company – the only Russian troupe at the Edinburgh Fringe Festival in 2011. Experience the talents of Marcel Mithois, Antoine de Saint Exupéry and Nadezhda Teffi – with a smattering of Old Testament surprise – in a show that produces a perilous balancing act by actors and puppet heroes alike. www.nostalgiaforreality.com (from July 1, 2011)
SSSR PRODUCTION
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