2012_09_DT_all by Russia Beyond

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Tuesday, September 25, 2012

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Energy A new deal is being prepared that will make BP the largest investor in Russia’s biggest oil company Rosneft

NEWS IN BRIEF

BP-Rosneft: back to business

Airline chief in top businesswomen list

As part of the Kremlin’s bid to raise £617bn of investment in energy companies by 2020, BP is preparing to buy a 12.5pc stake in Rosneft. BEN ARIS SPECIAL TO RUSSIA NOW

British oil major BP is close to signing a deal that would make it the largest shareholder in Russia’s oil powerhouse Rosneft and secure the beleaguered company’s future into the bargain. BP’s President Robert Dudley was in Moscow last week to meet president Vladimir Putin and Rosneft’s head Igor Sechin, a Kremlin insider and widely seen to have hands-on control of Russia’s oil sector. Rosneft is the biggest company in the sector (first by reserves and number two by production) and accounts for about one third of Russia’s oil exports. “The sides discussed issues related to the continuation and expansion of BP’s presence on the Russian market, and also the prospects of cooperation with Russian companies,”was all the Kremlin press office would say after the meeting. The deal, if it goes ahead, is BP’s second attempt at tying up with Rosneft; it would also allow the company to exit from its troubled joint venture, TNK-BP. BP is reportedly negotiating to swap its 50pc share

in the Russo-British TNKBP in exchange for a 12.5pc stake in Rosneft, plus $10bn$15bn (£6bn-£9bn) in cash. The government would retain a 12.53pc stake worth $8.6bn at current market prices if the deal goes ahead. Relations with BP’s Russian partners in TNK-BP, the Alfa Access Renova (AAR) consortium, made up of some of Russia’s richest private

businessmen, went sour last year when BP did a deal to jointly exploit Russia’s rich Arctic territories. That deal collapsed after AAR bought legal action against BP, insisting AAR should have been invited to participate. In June of this year, BP announced that it would quit TNK-BP, but said last week that it is not giving up on Russia. “BP’s manage-

ment has assured the Russian president that the company is interested in a long-term and mutually beneficial partnership with Russia,” the company said in a statement after the meeting with Mr Putin. For its part, the Kremlin seems keen to do the deal as part of its long-term strategy for reviving the oil sector. “Russia is running

out of cheap oil and shifting its focus to resources in places like eastern Siberia and to offshore deposits,” says oil and gas analyst Ildar Davletshin. “Foreign companies are clearly going to play an important role in the development strategy.” Rosneft has already replaced BP in the Arctic adventure with ExxonMobil – which has made a 30-year

Thinking big: Mr Dudley and Mr Putin at their meeting in Russia in 2011

commitment to the project. And news came the same week as the Kremlin in effect relaunched its privatisation drive by selling a 7.6pc stake in state-owned banking giant Sberbank to international investors for $5.4bn. The sale of one of the state’s most important companies is now expected to be followed by a raft of offerings as part of a $100bn sell-off. Russian energy minister Alexander Novak also announced that the government will launch a road show in October to showcase Russian energy assets as part of the Kremlin’s effort to raise $1 trillion of investment in oil, gas and power by 2020. At a more prosaic level, the deal makes sense for Rosneft, too, which would add TNK-BP’s 1.8m barrels to its own daily production of 2.7m barrels (from Russia’s total production of about 10m barrels a day). This would mean the company would account for more than one third of Russia’s daily output. “What we are talking about here is a partial backdoor nationalisation of the oil sector,” said one analyst who didn’t want to be named. “That is not necessarily a bad thing. The end result is that Russia becomes a bit more normal; after all, the state owns the oil resources in most other oil-rich states.”

Apec summit Plans emerge to double trade with Pacific Rim

Legislation Bureaucrats under scrutiny

New dawn for strategic deals with the East

Innocence abroad: civil servants may be forced to give up foreign assets

Talks in Vladivostok revealed that Russia’s planned $100bn trade expansion eastward will be based on energy and agriculture. ARTEM ZAGORODNOV RUSSIA NOW

tional and medical facilities. “Within five years, our foreign trade should balance in favour of Asia and guarantee high growth rates in the Far East. Within 10 years, we want our trade volume with Apec states to be greater than with the European Union.” While the EU currently accounts for around half of Russia’s foreign trade at approximately $320 billion, Apec trade stands at less than half of this figure. Russia’s leaders have been careful to emphasise that this rebalancing act would not come at the expense of relations with the EU. However, a raft of free trade incentives with Asian countries have been announced in recent months, to help facilitate the rapid growth needed.“For us, joining the WTO was a stepping stone to becoming an OECD member,” said Mr Shuvalov. “We’re also engaged in several important integration projects: the Eurasian Economic Space with Belarus and Kazakhstan; free trade agreements with New

Transport In a recent report, PwC predicted that Russia’s exports to Apec countries would more than double to $206 billion by 2021. One of the most promising sources for this increase is also its greatest impediment. The Trans-Siberian Railway is arguably the most important component of Mr Putin’s desire to turn Russia into a major transportation corridor between Europe and Asia (along with the Northern Sea Route). Already operating at full capacity, it also requires billions of dollars of investment for upgrading the single-rail line and building logisticsfacilities along the way. Russian sea ports also have an important role to play in the country’s eastward expansion. “The amount of trade between Europe and Asia now exceeds $1 trillion, and every 1pc of cargo that is transported through Russian territory will bring our economy no less than $1bn,” said Ziyavudin Magomedov, chairman of the board of Summa Group. Currently CONTINUED ON PAGE 5

PHOTOXPRESS

“A few months ago people were saying the summit would be a disaster,” said David Gray, managing director of PriceWaterhouseCoopers (PwC), on the last day of the Apec summit in Vladivostok earlier this month. “They said we’d be living in tents; the bridge wouldn’t be ready; and we’d be taking the ferry to Russky Island. Now that’s all been quickly forgotten.” A few shabby roads and the firing of one local transportation official aside, Vladivostok’s reconstruction for the 24th Apec summit went off on time and without a hitch. New investment projects in the region include the first ever launch of a Mazda assembly line outside Japan (which was attended person-

ally by President Vladimir Putin immediately before the summit); a new Hyundai engine plant; and a deal with a Japanese firm to build a $7bn (£4.3bn) liquefied natural gas (LNG) plant outside Vladivostok. A similar plant, built with American and Japanese firms, opened on Sakhalin Island in 2009; the project transformed Sakhalin from a debtor into one of the few Russian regions contributing to the federal budget. “Costs aside, the development made here in Vladivostok will allow Moscowbased expats like me to convince our bosses in London, New York or wherever about the benefits of longterm investment in Russia’s regions,” said Mr Gray. The key purpose of the summit, however, was summed up by First Deputy Prime Minister Igor Shuvalov at one of the opening sessions: “All of the infrastructure is in place around Vladivostok now: a new airport, roads, railroads, educa-

Zealand and Vietnam. Russia takes on more risks by not integrating with Asia than by doing so.”

State employees at all levels may be banned from holding property or bank accounts abroad if a draft bill is passed through parliament. VIKTOR KUZMIN SPECIAL TO RUSSIA NOW

A draft bill has been put before the Russian parliament that would force all state employees to close foreign bank accounts, and sell overseas properties.The bill covers not only homes purchased by bu-

Home truths: the bill would force state employees to sell overseas properties

reaucrats in person, but also property acquired by inheritance, or as a “gift”. The bill, if ratified, would cover state employees of all ranks – from municipal officials to federal bureaucrats, including the military – and extend to members of both the lower and upper houses of the Russian Parliament. It is possible that even senior management of state-owned corporations will have to abide by the new rules. Mitigating circumstances may be claimed in only a handful of instances: for example, if having overseas property is essential for fulfilling professional obligations, or if the official has to obtain medical or educational services abroad – in which case, an overseas bank account is permissible. Penalties for violation of the rules – in addition to dismissal from the civil services – run up to 10 million-rouble fines or a five-year jail term. CONTINUED ON PAGE 3

Olga Pleshnakova, head of Transaero, was named 49th in Fortune magazine’s 50 most influential businesswomen this year.Transaero, Russia’s second biggest airline, operates regular and charter flights to about 100 domestic and international destinations. Ms Pleshnakova, 45, is credited with transforming the loss-making firm into a global competitor. The company recently launched services to three cities in the US. The last Russian woman to be listed was Basic Element general director Gulzhan Moldazhanova, who was ranked in the magazine between 2005 and 2008.

Plans for Moscow mosque scrapped Plans for a new mosque in the Mitino district north-west of Moscow were scrapped last week after 1,500 residents took to the streets to protest against it. They claimed the Islamic United Centre and mosque, covering nearly 38,000sq ft, would attract thousands of worshippers during Muslim festivals, causing major disruption to traffic. Islam is the second-biggest religion in Russia after Orthodox Christianity. Representatives of the Muslim community say there are not enough mosques in Moscow to cater for the two million Muslims living in the capital. There are only four mosques in addition to a Shia mosque at the Iranian embassy. In August, the Russian Mufti Council proposed that a mosque should be built in every region of Moscow.

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Survey Moody Moscow comes way down the list in a recent quality of life survey covering Russia’s 100 largest cities

Happiness begins in the regions City residents’ index of happiness

Moscow is ranked way down at 52 on the happiness index, while Grozny takes the top position

ITAR-TASS

Building a brighter future: 73pc of Grozny residents are very happy with the new city environment

tor monitoring agency and the Russian Regions’ Regional Research Fund found that when it comes to places that people love living in, Moscow is ranked way down at number 52 on the happiness index, while top position on the list is taken by the Chechen capital, Grozny. Almost 27,000 people from Russia’s 100 largest cities were asked how satisfied they were with their financial status, the local environment, the pace

A recent study comparing the quality of life enjoyed by people living in different parts of Russia finds life in the regions more fulfilling. DMITRY KAHN SPECIAL TO RUSSIA NOW

While many people move from regional areas to seek a better standard of living in Moscow, it seems that those in the regions are generally happier with their lot. A joint study conducted by the NewsEffec-

of development and their overall standard of living. Lastly, they were asked: “Are you happy in your city?”

Money matters The researchers discovered that, despite the conventional wisdom that money can’t buy you happiness, material well-being does indeed matter. The Siberian city of Surgut, located deep in the taiga, is one of Russia’s main oilproducing centres.While it has

not undergone rapid development and doesn’t have a favourable living environment with its bitterly cold climate, the city is the country’s leader is terms of its residents being satisfied with their income (71pc). This helps explain why the city is number four on the happiness index. “The average monthly wage in Surgut (around £1,050) is about twice as high as the national average,” says Andrei Korovkin, from the Institute

of Domestic Economic Forecasting at the Russian Academy of Sciences. Nizhnevartovsk and Tyumen, two other oil-producing centres, also made it into the top 10. While residents of Moscow and St Petersburg are also mostly happy with their financial situation (67pc and 61pc respectively), the overall picture is spoiled somewhat by the rate of municipal development in the two capitals (as Russians call them). Fur-

thermore, Moscow does not rate very highly in terms of the living environment. Only 13pc of Muscovites say that they have enough fresh air, which is only slightly better than in some heavy industrial areas, such as Bratsk (3pc) and Magnitogorsk (8pc). Sociologists say quality of the environment is one of the most important factors determining happiness for Russians. Indeed, cities on the balmy Black Sea and in the temperate Caucasus received high ratings for their living environment, including Vladikavkaz (71pc), Grozny (68pc), and Sochi (65pc). And Grozny was overall favourite. But it seems a warm climate and clean air are not in

themselves always enough to guarantee happiness. Vladikavkaz, ranked number one on the environmental list, was only number 40 on the overall happiness index. This can be put down to the low level of material wealth there, and a relatively high dissatisfaction level with the development of the city. “Don’t expect a mass migration south just yet,” says Olga Solomatina, a lecturer in sociology at the Higher School of Economics. “The Caucasus and the European part of Russia are drastically different in their mentality and way of life. It’s very hard for newcomers to the city to socialise. I can’t imagine the lengths that Muscovites must have to go to become accepted in Chechnya.”

Urban development Satisfaction with the urban development of cities seemed to let many cities down, but there are some exceptions, the

most surprising of all being Grozny. NewsEffector director Sergei Moroz admitted the top rating of the Chechen capital came as a bit of a surprise, even to the researchers. Grozny was lying in ruins 10 years ago, and the aftermath of the two Chechen wars could be seen in every street of every neighbourhood. The authorities had to rebuild the capital from scratch; no other Russian city has been so dynamically changed in recent years. Massive cash injections from the federal budget have really helped to transform the city. Now, a total of 73pc of citizens are happy with the way Grozny has been built up. “Incidentally, Grozny has changed dramatically for the better in the past few years,” adds Mr Moroz. Kazan is the runner-up in this category with 52pc, compared with the overall average figure of 30pc of residents who are happy with the development of their cities.

Diversity across Russia Overall, the cities ranked in the top 10 are striking in their diversity. Russians considering a move have a wide choice: there is subtropical Sochi; Surgut, with its cold climate but high rates of pay; industrial Tyumen and agrarian Krasnodar; peaceful provincial Yaroslavl and millionstrong Kazan. However, there is one feature common to all of the top cities: they are located in the west and centre of Russia. Surgut and Tyumen are the only representatives of the Asian part of the country.

Universities must survive strict examination or be closed, says Medvedev verted or closed.”The deputy education minister, Igor Remorenko, told Russian Reporter magazine that he supported Mr Medvedev, adding: “After the Soviet Union fell, the number of institutes and universities in our country increased tenfold, from 300 to 3,000. “Considering this, the number of academic institutions should certainly be reduced. The key criteria will be the quality of education, no matter if it is a state or a private institution.” Naturally, some academics are very apprehensive about Mr Medvedev’s proposal. Alexander Sigov, rector of Moscow State Techni-

The number of higher education institutes boomed after the fall of the Soviet Union. Now ministers say only the best should survive. ALEXANDER KILYAKOV COMBINED REPORT

Dmitry Medvedev has called for colleges that perform poorly to be closed to reduce the number of academic institutions. The Prime Minister told the“open government”meeting on education, with an allusion to ancient Rome: “Carthage must be destroyed, and a considerable number of academic institutions, which do not meet up-todate criteria, should be con-

cal University of Radio-Engineering, Electronics and Automation, said that the plan should be implemented with caution:“The decision [to close an estab-

After the Soviet Union fell, the number of institutes in our country increased 10-fold lishment] should be based on the opinion of a professional expert commission and carried out with a human approach. It should consider the opinion of the professional community, scientists and

those who recruit new specialists in the education market.” One of the most widespread fears concerning the initiative to reduce the number of higher education places is that it could result in more corruption. There will be more competition for places among students, which could result in people using contacts and money to get their child into the university of their choice. But Mr Sigov admitted that this situation is possible only in“bad”institutions, which would no longer exist. “I cannot imagine a corruption network in a university with deep traditions and

strong teaching staff,”he said. The recently founded Association of Russian Leading Economics and Management Universities announced its readiness to take on a role in developing criteria to assess the standards in academic institutions and make judgements about whether they can be improved or should be closed. The financial efficiency of academic institutions will be measured according to a range of criteria, such as the income of its students five years after they graduate, the level of lecturers’ salaries compared to average salaries in the region, how many accolades are won by students, and how many were accepted without entrance exams. The scientific success of the institution will be also considered, for instance by looking at the citation index of its teaching staff. The final decision on whether or not to close a particular academic institution will be taken by its founder, which in most cases is the Ministry of Education and Science, in consultation with

Television Soviet cartoons depicting smoking could soon be categorised as adults only

THE QUOTE

Albert Likhanov

DMITRY KAHN SPECIAL TO RUSSIA NOW

CHAIRMAN OF THE RUSSIAN CHILDREN’S FOUNDATION

GETTY IMAGES/FOTOBANK

A law requiring Russian TV channels to protect children from unsuitable programmes has been criticised as too rigid and led to claims that it represents the“nanny state”. The legislation, backed by a system of classifying programmes by age suitability, details what kind of information cannot be shown to children below certain ages. Children under six can’t watch fictional scenes featuring severe diseases; those under 12 cannot watch fictional scenes featuring violence, alcohol consumption, smoking, or even scenes that mention drugs; from the age of 16, children are allowed

Everyone loves to censor Soviet cartoons, but art is a reflection of our reality, where there is always both good and evil.

Staying safe: children are troubled by some programmes

to hear certain swear words that are not listed as obscene. Programmes must flag up any age restriction information before they are aired. The authorities say the regulations are similar to those in other countries. There is a watershed after which adult material can be shown, though it is at 11pm rather than 9pm as in Britain.

Broadcasters agree with the law in principle, but are concerned about its details. According to Natalya Piskunova, general director of the National Association of Broadcasters:“TV and radio broadcasters are not against the new law, but we’d like it to be applied correctly.” According to experts, the wording could lead to com-

plications. If the letter of the law is followed strictly, many Soviet cartoons would fall into the 18-plus category or even be banned. There are no erotic scenes, but there are racy characters, such as crocodile Gena or the smoking wolf from Nu, pogodi! (“Well, just you wait!”) which is the Russian equivalent of Tom and Jerry. To abide by the

Degree of excellence: Moscow State University sets the benchmark for academic achievement

the Universities Association. Experts say that the Association’s mission will not only be to reduce the number of academic institutions, but also to protect some of them. According to Victor Panin,

cut from Tom and Jerry. But Russian cartoons will not be re-edited, according to Aleksander Zharov, head of the federal television regulator, Roskomnadzor.“Our position is quite clear,” he said. “The cartoon Nu, pogodi! and other similar programmes have cultural values in our country, so there is no need to age-label these products.” A study by Moskovskye law, TV broadcasters either have to cut certain scenes or Novosti newspaper showed classify the cartoons in an some children are troubled adult category. The pro- by TV programmes. Kristina, gramme-makers don’t like 10, said she was frightened either option. According to by programmes showing surRussian animator Garri Bar- gery, and thought detective din: “If they act strictly ac- films and news about crime cording to this law, cartoons should be banned. But Arina, five, is already with crocodile Gena and other characters – including following recommendations mine – will be equated with issued by Roskomnadzor. “I only watch TV programmes pornography.” Deputy Sergei Zheleznyak that my mother permits. For defended the law, saying: example the cartoon Mada“Cartoons featuring scenes gascar and cartoons about with smoking, for example, Mickey Mouse— they are not are to undergo an examina- scary and not harmful.” According to Mr Zharov, tion by experts. If they decide that this scene of the the law will be trialled for a cartoon may encourage view- month and then reviewed. ers to try cigarettes, it won’t “We’ll discuss and analyse be shown to small children.” each disputable issue. We Old cartoons have been re- have been consulting with edited for American and media representatives to British audiences to remove work out an approach that scenes that might now be would be efficient on the one deemed unacceptable. In hand, and acceptable to the 2006, smoking scenes were media on the other,” he said.

Nanny doesn’t always know best say critics of new children’s TV law TV programmes must now be classified according to their age appropriateness, but the wording of the law could be problematic.

Higher education Academic institutions face rigorous new standards under the prime minister’s plan to cut the education sector down to size

deputy chairman of the AllRussia Society for Protecting the Rights of Consumers of Educational Services, the Association will potentially be able to lobby the interests of academic institutions con-

nected with its members in some way. The Russian Rectors’ Union has also said it wants to participate in the development of a programme for the reduction of universities.

New immigrants asked to mind their language New tests on immigrants’ ability to get by in Russian are being trialled and could become compulsory for those seeking work. YEVGENIYA TSINKLER ROSSIYSKAYA GAZETA

A centre that tests immigrants’ command of Russian has opened in St Petersburg following concerns that many new arrivals have a poor grasp of the language. Middle Asia includes five former Soviet republics, but Russian is no longer taught in all schools there, meaning that the language skills of many are not good enough for them to work in Russia. The centre is piloting a test to determine whether immigrants can ask for directions, read employment ads and buy medication and groceries. Around 20pc of those tested fail; those who pass are issued with certificates endorsed by St Petersburg State University.

Most tests are voluntary at this stage; the language test is mandatory only for foreigners seeking a permanent Russian visa. But the procedure might soon become mandatory for all immigrants seeking work permits that allow them to work in various sectors of the economy, including housing and retail. “Tests for terms used in professional jobs are not yet included.We are aware of this problem and are currently engaged in resolving it,”said Evgeny Yurkov, director of the Institute of Russian Language and Culture of St Petersburg State University. “Soon we will be ready to test immigrants on the vocabulary used in every specific profession”. According to Konstantin Romodanovsky of Russia’s Federal Migration Service: “In 2010, 22pc of immigrants from Uzbekistan, Kyrgyzstan and Tajikistan did not learn Russian at school.”

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Elections Unlikely candidates with little or no experience and unclear agendas are standing in regional polls

come a member of the United Russia faction, I will naturally be bound by party discipline,”Mr Kasimov says. While Mr Kasimov is already involved in politics, many candidates have no previous political experience and seemingly no serious agenda. For example, little is known about Andrei Pelipenko, 27, a bartender at an art café in Saratov who has nominated himself for the Saratov regional Duma. And Alexander Kurochkin, 23, the owner of an online shop selling lingerie, has nominated himself for the Chelyabinsk city Duma. Mr Kurochkin has tried to impress local voters by promising to release a line of party logo panties, and even to show up for an interview wearing nothing but “elephant briefs”if he is elected. Despite this, he seems to be taking campaigning seriously. He has pasted banners of the All-Russian People’s Front (which was set up by Vladimir Putin and the proKremlin movement Young Russia) on his website, and he has mastered the basics of self-promotion and garnering support through the use of soundbites, including “I want to work for the people” and “My primary wish is not to be indifferent to the life of our people.” Professional boxer Vasily Zhukov, 31, plans to run for the parliament of the Khanty-Mansi Autonomous Region as a member of the Communist Party of Russia. “First, I joined the Just Russia party, but when I saw that it was not about justice, I quit and joined the Communist Party,” Mr Zhukov says. When asked what made him run, he says, perhaps na-

What do a boxer, a bartender and a lingerie vendor have in common? They are all candidates for local legislatures in Russia. ALEXANDRA BELUZA MOSKOVSKIE NOVOSTI

While Russia doesn’t have its own version of the Official Monster Raving Loony Party, the political spotlight is falling on some colourful and eccentric candidates as the regional elections approach. Following the demonstrations at the beginning of the year, new rules were brought in meaning candidates for regional elections can be directly elected instead of being appointed by central government. So anyone can now stand in the poll on October 14 – the result being a lineup including candidates from unconventional backgrounds. In the Republic of Udmurtia, United Russia’s electoral list for state council includes Envil Kasimov, a local legislator representing the Liberal Democratic Party of Russia. He promises to run a campaign based on the preservation of national culture, which sounds reasonable but he is also notorious for more controversial ideas. For instance, in February 2011, he wrote on his Facebook page that he wanted to become a woman because women can retire at 55. Those who know him say Kasimov can come up with wacky ideas a couple of times a week, but joining United Russia would put a damper on his fertile imagination. While shocking statements are easier to make by a member of the Liberal Democratic Party, they are inexcusable coming from a member of the ruling party. “If I be-

ITAR-TASS

Power games: first-timers join the big political party

Nearly man: former police officer Alexei Dymovsky says he decided standing in Krasnodar was pointless. Yabloko says he didn’t stand because his documents failed to arrive in time

pler in the boxing ring,” he says.“You have an opponent Kurochkin has tried and you need to win. The poto impress local ring is meaner. It has voters by promising litical many hidden dangers.” The to release a line of cause he would champion if elected is sport, he says, addparty logo panties ing: “I am not comfortable ively:“My fellow party mem- with Russia’s fourth place in bers advised me to, so I did.” the Olympics medals table.” Most candidates for theVoMr Zhukov doesn’t seem to have much of a feel for logda city Duma put “Tempolitical life.“It’s much sim- porarily out of work” in the

Travel The capital is becoming an affordable luxury

Moscow cashes in on tourism Despite the traffic and the weather, more tourists are choosing to visit Moscow and finding it an affordable place in which to stay and sightsee. OLGA IGNATOVA

PRESS PHOTO

ROSSIYSKAYA GAZETA

While Moscow has consistently topped the list of cities with the most expensive hotel rooms, it doesn’t mean a trip to the capital has to be prohibitively expensive. According to the statistics service Mosgorstat, the average price of an economy-class double room in a Moscow hotel is 4,100 roubles (around £81). Sergei Shpilko, head of Moscow’s Committee for Tourism and the Hotel Industry, said this figure gave a true picture of Moscow hotel prices. Economy-class hotels in Moscow, which are normally given three stars and located outside city centres, make up 46pc of the hotel market in Moscow. Surveys show most overseas tourists find the service in these hotels perfectly adequate. International hotel chains in Moscow, which usually have four or five stars, cost from 11,500 roubles (£226) a night. But a check on equivalent hotels in London or Paris showed rooms would cost from £257–£277. According to statistics collected by the FSB Border Control, the number of foreigners arriving in Moscow in the first half of 2012 increased by 18.5pc over 2011, totalling 2.47 million visitors. But almost half are migrant labourers from former Sovi-

Opulent option: the five-star Ritz Carlton Hotel in Moscow

et states and further abroad. The number of tourists was 1.2 million. More Germans visited Russia than any other nationality, with a total of 152,000 visitors in the first half of this year, with Chinese second on 107,000, and France third with 73,000. Aleksandr Kurnosov, deputy director of one of Russia’s largest travel companies, says foreign tourists pay an average of £563 for a week’s stay, not including air travel. Half goes on accommodation and the rest on dining, entertainment and excursions. The cost of sightseeing in Moscow is reasonable; a ticket to the Pushkin Fine Arts Museum is 300 roubles (about £6) but a comparable ticket to the Louvre in Paris is 1,500 roubles (£30). What bothers foreign tour-

ists most about Moscow is traffic jams, the weather and patchy service, according to Mr Kurnosov. “We carry out feedback surveys of our clients regularly,” he says. “Five or six years ago, the main grumbles were about the quality of hotels, the lack of information in English, littered streets and grubby public toilets.” Now people were more annoyed by things that make travel awkward, like the distance of car parks, bus stops and stations from the attractions they serve. As far as traffic jams are concerned, the best plan was to avoid busy periods . “Visit Moscow in early January,”say Mr Shpilko. “You’ll get the lowest prices on hotels and practically no traffic blocking the streets.”

occupation column. One of them, Vitaly Burenkov, admitted that he was really a businessman working in the timber industry. “I thought it would be better for the safety of my business if I were listed as temporarily unemployed,” he says. Mr Burenkov is also a human rights activist who has set up a charity fund to help pensioners and veter-

ans, and he supports the presidential candidate Mikhail Prokhorov. His reasons for running for the city Duma are purely to gain political experience. Mr Burenkov, 24, wants to master the fundamentals of campaigning this time round in order to win at the next elections.“I want to get an understanding of how the system operates, how to submit the documents and how to structure my election campaign,” he says. Alexei Dymovsky, who was previously employed by the police force in Krasnodar, became famous for speaking out against corruption in law enforcement agencies. He was slated to run on the united opposition list (a coalition of several parties including Yabloko, the Republican Party of Russia Parnas, Democratic Choice, and Solidarity) for the legislative assembly of the Krasnodar Region. He later withdrew his candidacy after the flooding in Krymsk, claiming that it was pointless. He says:“This civilisation is going down a blind alley. All most people have now is animal instincts and no one cares what is going on at their neighbour’s,” Mr Dymovsky says. When asked whether he has become disappointed in the opposition, Mr Dymovsky responds that he has always been “for the people, rather than some parties”. He adds:“Were I ever to join any of the parties, I would not go to Yabloko. I like nationalist parties better.” However, Andrei Rudomakha, chairman of the Krasnodar division of Yabloko, says the reason Mr Dymovsky didn’t stand in the elections was merely because he failed to submit all of the required documents on time. The forgotten hero is now working as a legal adviser and running a small business. “I cannot tell you what kind of business it is, because they [the government] will immediately levy taxes, and I am not paying any taxes to the current government,” Mr Dymovsky somewhat surprisingly confesses.

Bureaucrats could lose foreign perks CONTINUED FROM PAGE 1

dismissal from the civil services – run up to a 10 million-rouble fine or a five-year jail term. The bill has a good chance of being passed into law by the Duma, according to Oleg Lebedev of the Russian Communist Party parliamentary faction. The bill was introduced and advanced by a group of lawmakers which includes members of all the four political groupings elected at the most recent elections. “People support this point of view, so the chances of ratification are high”, Mr Lebedev said. According to research conducted by the Russian Public Opinion Research Centre (WCIOM), 61pc of Russians support a complete ban on the holding of foreign assets, while 28pc of those polled thought that the right to own foreign property and bank accounts should not be annulled, but instead subjected to a separate declaration. Nearly two-thirds of respondents supported imprisonment alongside sackings and fines for violators. There are no official estimates of the value of foreign property owned by Russian bureaucrats, but independent analysts have a varying range of estimates. Maria Tsyguleva, an analyst at Fibo Group, suggested that the figure is somewhere in the corridor of $350m to $700m (£216m to £432m). Highlighting the timeliness of the discussion on bureaucrats’ wealth,Vladimir Milov, head of the Democratic Choice movement, pointed to

view. “It’s extremely unlikely that these measures will have any real effect in tackling corruption in Russia.You have to treat the disease, instead of alleviating its symptoms,” she said. “Most experts agree that [the ruling party] United Russia is engaged in populism [with this bill] and is trying to take a number of ideas from the opposition ahead of October regional elections,” explained political scientist Alexei Mukhin. The parliamentary bill is being prepared for consideration by a special committee on constitutional legislation and state administration. In the latter half of September, United Russia’s Valery Trapeznikov, Duma deputy Research shows that and one of the bill’s authors, announced that bureaucrats 61pc of Russians may be allowed to keep propsupport a complete erty acquired or inherited beban on the holding fore the fall of the USSR in 1991. It is also possible that of foreign assets the ban will not affect prop“A raft of legal loopholes ex- erty acquired abroad before ists to prevent distant rela- individuals entered governtives from hoodwinking the ment service if it was purgenuine owner of the prop- chased during a long-term erty, and they’ll be listed as foreign residence. Examples cited include fathe owners in name only,” said Mr Delyagin. He also mous sports personalities, claimed that an entire indus- such as ice-hockey ace Vytry of expertise in offshore acheslav Fetisov, and boxer companies exists, which is Nikolai Valuev – both of dedicated to minimising in- whom had lived and worked abroad and purchased apartheritance tax liability. For legal measures to be- ments before embarking on come an effective mechanism political careers. “Even if the bill is signed against corruption, Mr Delyagin believes they should be into law, the Constitutional targeted at the officials’ in- Court will probably strike it comes. “The incomes of a down because it limits the huge number of officials har- freedoms of law-abiding bour an enormous suspicion citizens who earned their money legally,” concluded of corruption, he said.” Ms Tsyguleva supports that Mr Mukhin. the fact that state employees had recently been named on the Forbes List of Russian individuals with the highest net wealth. Mikhail Delyagin, director of the Institute of Globalisation Problems, thinks the bill does not go far enough to tackle the deep problems of corruption in Russia. He said that because the law defines a family unit to be only the two parents plus any children below the age of legal maturity, adult-age children, parents or even distant family relatives of bureaucrats can easily help them to get round the proposed laws by having property or bank accounts put in their names.

OPINION

Pragmatic partnerships with a global dimension Alexander Yakovenko DIPLOMAT

espite the turbulence the global economy is experiencing, the AsiaPacific region is firmly established as a leader of world development. This opens up new prospects for Russia, which is a natural part of the region. The Asia-Pacific Economic Cooperation (Apec) forum offers additional opportunities for advancing our interests in the region. There is much talk today about the “Asian pivot” of America’s foreign policy. One often hears the question whether the same is happening in Russian diplomacy. The answer is simple: Russia’s history and geography have ordained that we develop links both with the West and with the East. The European Union is our biggest economic and political partner. While strengthening our positions in Asia we intend to preserve our gains in Europe. If you add the intensive development of integration in the Eurasian space, spearheaded by Russia, and our accession to the World Trade Organisation, a fairly complete picture emerges of a pragmatic, multidirection network diplomacy envisaged under the foreign policy concept adopted in 2008. Russian public opinion is united on this front. The question is the speed of this process, but it is determined by the logic of the integration processes. Today, Apec comprises 21 regional economies. They are dynamic, economically and technologically developed countries, including the US, China and Japan. Apec accounts for 40pc of the Earth’s population, 54pc of world GDP and 44pc of global trade. The region has achieved a high level of economic integration. The share of mutual trade among its participants is almost 70pc of total foreign trade. Relations in this sphere are governed by, among other things, 44 free-trade agreements. Both shores of the Pacific are working vigorously within Apec to create a single free-trade area. Russia’s accession to Apec was a considered decision of our country which has put it on the path of market development and fully fledged integration into the world economy. Our participation in Apec activities has vindicated the strategic validity of that decision. The Apec summit held in Vladivostok on September 8–9 under Russian chairmanship was no exception. Leaders have agreed approaches to overcoming the consequences of the global financial and economic crisis, the development of regional integration processes, and the formation of a new, equitable and fair configuration of economic links in the Asia-Pacific region. Particular attention was paid to solving the practical tasks of counteracting protectionism, protecting investments and stimulating their flow into hi-tech sectors. An agreement on transparency in concluding free-trade pacts was reached. Important early steps were made towards combining integration in the Eurasian and Asia-Pacific regions. In terms of innovation,

Russian initiatives towards creating a common Apec education space, establishing co-ordination between the research and academic communities, and encouraging dialogue between educational institutions and businesses have been approved. We have initiated partnerships in the field of scientific, technological and innovative policy involving representatives of governments, business and science. Russia has made a considerable contribution to the discussion of food security in order for Apec to boost productivity in the agrarian sector and to stabilise the food markets. This will provide the socially vulnerable with greater access to food and attract more investment into agriculture. A special Apec partnership was initiated to this end. We have also offered to make greater use of Russia’s transit potential to diversify regional transport corridors with the active use of advanced satellite and computer systems, including Glonass. Trade liberalisation now goes hand-in-hand with environmental protection. The Vladivostok summit approved a list of 54 “environmental goods” for which Apec countries are planning to cut customs duties to 5pc or less by 2015.

Today, Apec comprises 21 dynamic economies, including the US, China and Japan On the whole, the agreements achieved mark an important step towards creating a regional system for free and open investment and trade activities. The summit also ensured progress in the implementation of Russia’s strategic course for joining regional and integration processes with the aim of modernising and developing our country, especially Siberia and the Far East. Our trade with the Apec e c o n o m i e s i s a l r e a dy developing vigorously: their share in Russia’s foreign trade increased from 16.4pc in 2002 to 23.9pc in 2011. That increasing trend looks set to continue. The success of Vladivostok, and the large scale of the decisions taken there, reflect a new balance of forces in the global economy. In particular, all the participants must think strategically and proactively. This may not be so apparent looking at it from outside, from Europe. But I can assure you that, in a spirit of noblesse oblige, all our Apec partners are aware of their responsibility for the success of our joint undertaking. Indeed, they all share the view that economic development and its changing paradigm create the basis for tackling all of the other problems that society faces. AlexanderYakovenko is Ambassador of the Russian Federation to the United Kingdom. He was previously Deputy Minister of Foreign Affairs of the Russian Federation. Follow him on Twitter: @Amb_Yakovenko

The Russian Embassy in London is present in the following social networks: www.twitter.com/Amb_Yakovenko www.twitter.com/RussianEmbassy www.twitter.com/RussianEmbassyR (Russian version) www.facebook.com/RussianEmbassy www.youtube.com/RussianEmbassy www.slideshare.net/rusemblon www.flickr.com/photos/rusembassylondon russianembassy.livejournal.com

An Englishman in Moscow Author Alex Preston shares his impressions of Russia

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October 30

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Q & A GRIGORY REVZIN

Skolkovo wins great acclaim in Venice RUSSIA’S INNOVATION CITY PAVILION AWARDED

What was Russia showcasing at this year’s Venice Architecture Biennale ? This year we presented the Skolkovo Innovation Centre project. The display was truly amazing – our architects were trying to create a space that would create a balance between the physical and the virtual. We have never had such a sophisticated project before. The pavilion has two storeys. The ground floor revealed a Soviet phenomenon – closed science towns that were inaccessible to ordinary citizens.Visitors can not only have a glimpse of the past but will also see the life that very few people lived in the Soviet Union. On the second floor, they can see the modern, accessible Skolkovo Innovation City, as if contrasted to the Communist secrecy of closed towns.

ELENA SHIPILOVA SPECIAL TO RUSSIA NOW

Skolkovo’s i-city pavilion, which aims to create“a space between the physical and the virtual”, was given a special mention by the jury at the Architecture Biennale inVenice last month. It was the first success for a Russian exhibit at the Biennale. The Skolkovo team built a pavilion covered from floor to ceiling in QR codes. When visitors scan the illuminated codes with the tablet devices supplied, they are taken to websites that give more information about Skolkovo Innovation Centre, the hitech business area being created near Moscow to encourage science and technology companies. The theme of this year’s international exhibition, which runs until November 25, is Common Ground. “We feel proud and happy with the work done, and are looking forward to further successful participation in architectural competitions of such a high level,” said Viktor Vekselberg, president of the Skolkovo Foundation. Below, Grigory Revzin a member of Skolkovo’s Urban Council talks, about the ex-

Which projects and architects competed for the right to represent Russia this year? The Ministry of Culture believes there should always be some large, national-scale project to represent Russia at the Venice Biennale. For instance, in 2004, when the reconstruction of the Bolshoi Theatre and the Mariinsky Theatre was launched, we presented the display Two Theatres. Although the Bi-

ennale is a modern arts exhibition and architectural monuments are, as a rule, not allowed there, the reconstruction project gave us that rare opportunity. The problem is that there are few nationwide projects that can compete at the exhibition – Sochi-2014, Russky Island, Greater Moscow, the reconstruction of central St Petersburg and Skolkovo. The Innovation City has brought together Russian and foreign professionals, and we thought it would be exciting to make use of this blend. Furthermore, we had to take finances into account. It costs about $1m (£617m) to build a pavilion. The Ministry of Culture pays for a third and, as a commissioner, I have to find the rest of the money. The Skolkovo Foundation was able to provide the required amount. Sponsorship is never the main criterion for us in choosing our competitor, but it is an important factor. Why are most national projects in Russia carried out by foreign architects – take Skolkovo, where infrastructure is being developed by Japanese, Swiss and French companies? Are there no good Russian firms? Our federal authorities have always opted for western specialists. I am always telling them: “We have talented architects, let me bring someone.” But they say: “No

BIOGRAPHY

Grigory Revzin NACIONALITY: RUSSIAN AGE: 47

Grigory Revzin is a member of the Urban Council, editor-in-chief of Project Classic magazine and an architectural columnist for Kommersant newspaper. Mr Revzin is the author of more than 50 scientific papers on the theory and history of architecture. He was curator of the Russian pavilion at the Venice Biennale in 2000 and 2008.

PHOTOXPRESS

STUDIED: ARTS

Intelligent design: the floor, walls and ceiling of the i-city pavilion are covered in functioning QR Codes, which can be scanned with a special tablet, below

thanks, we have not heard of any.” For instance, when Prime Minister Dmitry Medvedev chaired the guardianship board of the Pushkin Museum in 2009, he wanted to assign the reconstruction of the museum to the British architect Norman Foster, simply because he knew the name. I tried to explain to him that Foster is just a brand, under which other people work; that the maestro spends a limited amount of time on each of his projects. But I couldn’t change his mind. I became a member of the Skolkovo Foundation city planning council because I wrote a [critical] article about the use of foreign architects in the project, even though such projects should be used to promote the national architecture school. The situation enraged me – as if Russian citizens were not allowed to vote for their own president. They proposed I invite Russian architects to tender. Now, there is Boris Bernaskoni, who has almost completed the first Skolkovo building, the Hypercube; Sergey Tchoban and Sergey Kuznetsov, partners at Speech – which is designing the D1 district; Grigorian’s Mega-

nom is working on the D4 district; and other young Russian architects who have been awarded contracts to develop residential quarters. This is another reason why I wanted to showcase Skolkovo at the Biennale. You are sometimes very critical of how the state approaches architectural projects. Why? We tend to do many things half-heartedly. There is not enough consistency and accuracy; so many excellent initiatives get corrupted. They decided at the economic forum in St Petersburg that a billion dollars of budget funds would be allocated annually over the next 10 years to reconstruct the city centre. This is good money, but it will not do the city any good. There is another difficult situation in St Petersburg surrounding the Gazprom tower. Economically, this project is crucial for the city. Gazprom’s chief executive Alexei Miller, a very intelligent man, decided that a 300-metre skyscraper would be an appropriate building to represent his firm in the low-rise part of the northern capital. He was forced to shift the construction site, but at what cost?

THE NUMBERS

300 metres is the height of the proposed Gazprom skyscraper planned for the Unesco World Heritage city of St Petersburg.

400 hectares will be the eventual size of Skolkovo Innovation Centre. The city will house 21,000 permanent residents.

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hibit in Venice and modern Russian architecture.

An architectural exhibit that explores the past and future of Russian scientific research was met with wide acclaim at the Venice show.

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SPECIAL MENTION AT INTERNATIONAL BIENNALE

St Petersburg was in danger of losing its status as a Unesco world heritage site because of the Gazprom tower, wasn’t it? That is not the worst problem. What is worse is that we often consciously destroy our historical legacy, allowing our buildings and city layouts to be ruined. As for Unesco, it is a timid, bureaucratic organisation that enjoys major contributions from Russia, which pays

mostly to deal with internal discrepancies. When Luzhkov (Yuri Luzhkov, the former mayor of Moscow) wanted World Heritage Site status to be granted for the Cathedral of Christ the Saviour, Unesco protested, but this is not what really matters. The main thing is that if a site is protected by Unesco, it automatically falls under the jurisdiction of both the Ministry of

declassified science cities (of the 62 in the former USSR) formed part of the exhibition to show Russia’s scientific past.

Foreign Affairs and the Ministry of Culture; and few people would dare challenge both state institutions at once. However, we should not use Unesco as a bogeyman all the time. We need to deal with our problems independently.

Architecture Skolkovo’s first completed building will wow the world with its use of sustainable technologies and innovative design

Thinking out of the box: The Cube revealed As the flagship building of the Skolkovo Innovation Centre nears completion, Russia Now looks at its hi-tech and eco credentials.

THE QUOTE

Jean Pistre

M CHOBANOV, T TOROPOVA, A VOSTROV SPECIAL TO RUSSIA NOW

CHAIRMAN OF THE SKOLKOVO FUND’S CONSTRUCTION COMMITTEE

Skolkovo will combine lecture halls, research centres and private companies in one place. Despite the simplicity of this idea, it has not been entirely implemented anywhere else in the world. It must be at the heart of the new city’s ideology and its main reason for success. The plans will allow the new city to avoid traffic congestion, overpopulation and inefficient grid patterns.

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Just as the recent opening of the Shard in London caused huge waves of excitement, a new glass and concrete structure is about to cause a similar sensation in Russia. Known as The Cube, the building will be the first completed building of the 400acre Skolkovo Innovation Centre, the hi-tech park currently being built just outside Moscow. It is scheduled for completion this autumn. Skolkovo, often called Russia’s Silicon Valley, has ecoefficiency planning at its heart. Transport will be dominated by bicycles and electric cars, while green alleys and walkways will be the main thoroughfares. Utilities will be regulated by a single electronic network – developed by Cisco – which is capable of monitoring energy consumption and altering traffic patterns to optimise usage. The chairman of the Skolk-

Office of the future: the innovative and eco-friendly Cube is Skolkovo’s flagship building

ovo Fund’s construction committee, Jean Pistre, says that the plans will allow the new city to avoid the common problems facing other metropolises, such as traffic congestion, overpopulation and inefficient grid patterns. Added to this, a single platform for ordering any kind of service or product – from pizza to a doctor’s visit – will

save time and energy. The architects also promise that more than half of the city’s energy requirement will come from renewable sources. As the flagship building of Skolkovo, The Cube is suitably packed with eco-friendly, technological solutions. Externally, it is covered on all sides by solar panels, and a stainless-steel mesh front

allows the building to be turned into a giant screen for displaying images, messages or advertising. The only external connection is the power line. Solarcell batteries are installed on one wall. They don’t generate enough power for the entire building but they suffice to light one or two floors at night. Heating is provided by

heat-pump units which use ground energy. There are no ordinary radiators; split systems are installed on ceilings. The water supply is also unconventional: water is pumped from an artesian well and waste water is treated and then used for watering landscaped areas. The windows are huge, to allow as much natural light

as possible. Normally, Russian buildings don’t have big windows for fear of losing precious heat. However, special heat convectors installed in the building create an air curtain that keeps the temperature in the building stable. Furthermore, light conductors allow sun rays into the centrally located rooms. Waste disposal is another smart solution: all waste is recycled in the building and is transformed into household gas. Meanwhile, the interior will consist of easily adjustable panels to allow for changes in layout. Anton Yakovenko, general director of the Skolkovo administration, commented:“We aimed to keep it ascetic, both inside and outside. It is split into clear sections; we decided against fancy finishing.” The architect of the Skolkovo Cube, Boris Bernaskoni, might have been inspired by Andrzej Sekuła’s sci-fi thriller Hypercube when he chose the framework concept for the building. In the film, the characters are trapped inside a cube-shaped building constructed by an undisclosed genius. It has partitions dividing it into smaller cubes

and each of these cells has unique properties: some make time run faster; some distort space. Although Bernaskoni’s Cube can’t claim to do either of these things, it has, nevertheless, been dubbed“The Hypercube”by many for its resemblance to the fictional building. The Cube provides a revolution in office space. There are seven floors, the first of which will feature the reception and cafés. The second floor will have the offices of the key Skolkovo partners, which include IBM, Ericsson, Nokia, Intel and Cisco. The third floor will be given over to the companies working on innovation projects with Skolkovo support. The fourth will feature a vast conference hall, with a capacity that can be transformed for any type of event. Indeed, the building is intended to be the primary venue for the 2014 G8 summit in Russia. The remaining three floors will most likely accommodate more offices of companies dealing with Skolkovo startups (all in all, a total of 16 companies have been authorised to have their offices in the building).

Maxim Kiselev, the chief development officer of the technopark, explains: “The Cube will be of major importance to its tenants and their promotion, as it will essentially be one giant showroom for everyone working there. It is The Cube that will welcome top-level delegations and individual visitors, including heads of state and representatives of the international investment community. It is an important factor for the residents, as they will be able to meet potential investors. “The Cube building and Skolkovo’s infrastructure are based on the innovative open space concept, and should become models for building up the Skolkovo ecosystem.” According to Andrei Potapov, head of the microsatellite constructor Sputniks, which will soon be renting office space in The Cube, the technology potential is very high and the area is open to transformation offers. “The first Innocity (Innovation City) building has lots of hidden reserves and surprises that tenants and architects will learn about later”, he says.

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Retail Store chain returns to Russia

Asian trade is full of eastern promise less than 1pc of the cargo is transported via Russia. A recently announced federal plan calls for increasing the traffic cargo at all of Russia’s ports from the current rate of 540 million tons annually to 900 million tons by 2020. About half of this increase is to come from ports on the Pacific Ocean. Bureaucracy is a major impediment toVladimir Putin’s transport goals. Goods passing through Russian ports can spend nearly two weeks in customs, while the corresponding figure for Singapore is a single day. “A one day delay in shipping leads to a 1pc price depreciation of exports,”said Tony Nowell, chairman of Scion – New Zealand Forest Research Ltd.

Agricultural exports Summa, an industrial holding company which has close links to the government, looks set to emerge as a key player in the development of Russia’s Far East, having already invested in a raft of infrastructure projects in the region. Earlier this year, the group concluded a deal to buy a 56pc stake in the Far East Shipping Company, and it signed a memorandum of understanding during the Apec summit with Russia's state development bank, Vnesheconombank. Currently, the eight largest Apec countries by population import more than 100 million tons of grain annually.“Apec countries account for about 37-38pc of all [grain] imports worldwide. Our share of that is currently zero,” explained Vyacheslav Nikonov, a member of the State Duma Budget and Taxation Committee.

Russia has neither the roads, railways nor the ports in place to direct its grain exports towards Asia. Grain exports leave ports on Russia’s European coastlines, destined for markets in the Middle East and elsewhere. But Mr Putin’s promise to increase grain production from the current 80-plus million tons a year to around 120 million tons has been enough to convince Mr Magomedov of the potential for exporting grain to Asia.

Debenhams flies flag for British design The first of nine Debenhams stores has opened in Moscow. The retailer hopes good service and British design will impress shoppers.

copper production in partnership with Indonesia's Nusantara Smelting Corporation for the construction of a 400,000-ton-per-year smelting facility. At a meeting with Norilsk's CEO Vladimir Strzhalkovsky, Indonesia's President Susilo BambangYudhoyono voiced support for Norilsk Nickel’s goals to implement projects in Indonesia and acknowledged the possible benefits for the company.

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Manufacturing plants Energy resources PwC predicts that Asia will become the world’s largest natural gas market by 2015, and the $7bn joint LNG pro-

Russia’s future rapid economic growth rests on two legs − Europe and Asia ject with Japan suggests that Russia is planning to take full advantage of this trend. It is expected that most of the liquefied gas coming from the plant will be exported to Japan, as the country increases its gas imports and shuts down nuclear reactors in the wake of the Fukushima disaster.The LNG plant inVladivostok is expected to reach its full capacity by 2017. Russia-based Norilsk Nickel, the world’s largest producer of nickel and palladium, used the summit to sign a Letter of Intent with Indonesia's Ministry of Industry declaring the company's interest in investing in mining and metallurgical facilities in Indonesia. The agreement lays the basis for Norilsk Nickel launching

Mr Putin and his recently appointed minister of far eastern development Victor Ishaev have placed much faith in “re-industrialising” all of Russia and, in particular, its Far East region. One of the region’s few exportable manufactured goods remains the Sukhoi Superjet plane, which is assembled at a factory in Komsomolskon-Amur. A crash during a test flight in Indonesia earlier this year killed all 45 people on board and cast a shadow of doubt over Russia’s long-term plans to take 10pc of the global civil aviation market. However, Sukhoi has more than 200 domestic and international contractual commitments on the plane over the next few years. Another step towards creating a full-scale automobile cluster in the region was taken during the summit, whenVladimir Putin attended the launch of a Mazda production line at the Sollers plant in Vladivostok. “Initially, $350m will be invested in the Mazda joint venture, ” Sollers’ general directorVadim Shvetsov told reporters. The eventual capacity of the plant will be

ITAR-TASS

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Bridging the gap: Vladivostok’s new bridge across downtown Golden Horn Bay

NEW DEVELOPM ENTS IN VLADIVOSTOK

The bridge over Golden Horn Bay (pictured) connects both sides of downtown Vladivostok; the summit was held on nearby Russky Island, connected by another new bridge.

100,000 vehicles annually, with Sollers seeking to take advantage of the good reputation Japanese cars already enjoy in Russia’s Far East. A recently opened Hyundai engine plant in Vladivostok is a sign that the localisation of car production sought by Sollers is becoming a reality. Previous scepticism among officials and experts alike that the region would ever manufacture exportable

The new campus of the Far Eastern Federal University on Russky Island is built to accommodate 25,000 students. It is aiming to attract them from all over the world.

goods cheaper, or of better quality, than neighbouring countries is now being replaced with a more optimistic outlook. Sergei Kryukov of the Russian Small and Medium-sized Business Development Bank said:“All of the problems impeding competitive products from being manufactured in the Far East are solvable through proper policies.” The big question remains

The new terminal of Vladivostok International Airport is designed to handle 3.5 million passengers annually. It is connected to the city by a high-speed railway line.

to what extent Russia will be able to increase exports to Asia of higher value-added goods, as opposed to a continued dependency on raw materials, including in the Far East. Either way, according to Mr Shuvalov,“Russia’s future rapid economic growth rests on two legs – Europe and Asia.” This year’s Apec summit was an acknowledgement of that fact.

Debenhams has opened a store in Moscow in a second attempt to crack the Russian market. It made its debut in the capital in 2006, only to close the outlet two years later: analysts say Russians found its prices too high. But this time experts say prospects are good for the new store at the Mega Belaya Dacha shopping mall. Aleksandr Kuznetsov, a financial analyst at the RIA Moda news agency, said: “Russians were very pricesensitive in 2006, and Debenhams was never the cheapest store around. Now the market is growing and developing, the chain’s new arrival may be well-timed. If a war is also waged on counterfeit goods, the store’s sales will grow pretty well.’’ “With 70 million visitors annually, the Mega Belaya Dacha shopping mall is an excellent location,”said Francis McAuley, Debenhams’ international sales director. “Debenhams will be one of the first retailers to offer a full range of fashion, cosmetics, accessories, lingerie and homeware in one store, and the product and prices will appeal to the vast majority of Russian consumers.” The chain was planning to open a further eight branches in Russia, which is on target to become Europe’s biggest retail market by 2013/14. Debenhams is believed to be investing £2.5m in the store, which has a retail space of about 35,000sq ft. Representatives of Debruss, Debenhams’ Russian partner, say the plan is to break even

MOST READ Golden years ahead for Russian e-commerce http://rbth.ru/18411

Service first: the Russian retail market is growing fast

in two years, when the second Moscow Debenhams store is scheduled to open. According to Debruss, the new Debenhams store will stand apart from its rivals in the quality of its service and the range of its merchandise. “You won’t see assistants in our store folding clothes instead of helping a customer, or customers left alone trying to reach for an item,” a Debruss representative said. Debenhams also emphasised the novelty of the store’s styling. The marketing strategy is to give consumers a strong sense of traditional England, formal yet refined, in a market dominated by German minimalism and Italian “luxury”. To emphasise the store’s British roots, a classic red London telephone booth has been installed near the entrance. Debenhams ranks second in the UK in sales of apparel, cosmetics, and household goods. The chain has about 170 stores in the UK, Ireland, and Denmark, as well as a total of 70 franchised stores in the rest of the world.

Nuclear energy Cautious approach in the aftermath of Japanese disaster is a blow for Rosatom’s ambitions and global plans to tackle greenhouse gases

Bulgaria faces political fallout over axed reactor ANDREI REZNICHENKO SPECIAL TO RUSSIA NOW

The Fukushima nuclear disaster in Japan last year has forced many governments to question their continued investment in nuclear energy. One of the considerations for countries in Europe is the Euro 2020 strategy, which sets a number of climatechange and energy targets, including a 20pc reduction in greenhouse gas emissions. Nuclear power plants do not emit CO2, which means they can help governments to reach this target. A transition towards coaland gas-driven power generation would cancel out virtually all global efforts to combat the threat of climate change, whose effects, such as abnormal heat, floods, storms and droughts, have already been seen in a number of countries. For the time being, nuclear power plants are irreplaceable, as alternative energy sources lack the capacity for a major breakthrough and remain a pipe dream among

specialists. Until new and reliable sources of energy are developed, nuclear energy will remain the most ecofriendly alternative to coal and gas. Most Western European states have now decided to keep their nuclear energy development programmes after Fukushima, with the only exception being Germany. The British government has concluded that the country needs more nuclear power plants to ensure its national energy security. Throughout the next decade, approximately 25pc of the nuclear stations currently active in the UK will be decommissioned. In the meantime, these obsolete facilities will have to be replaced with safe, low-carbon and efficient plants. However, in Eastern Europe, things are less clear cut. Bulgaria’s decision to abandon construction of the nuclear plant in Belene, which Russia’s state energy company Rosatom was building, has caused a political row between Bulgaria and Russia. There was concern that the region where the site was to be built was prone to earthquakes. However, the planned power plant was intended to

How energy company felt the Fukushima effect

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The decision to abandon construction of the Belene nuclear plant could damage the Bulgarian economy and the environment.

Power struggle: Rosatom is seeking compensation over the unfinished Belene nuclear plant

be a third-generation reactor which is deemed to be very safe and meets all the EUR (European Utility Requirements) standards. Its safety systems incorporate a core catcher, which is designed to catch and cool molten material in the event of a meltdown.The plant also successfully passed the International Atomic Energy

Agency-compliant stress tests which were developed after the Fukushima Daiichi nuclear disaster. According to the Bulgarian government, the main reason for calling off the project in March was a lack of funds for construction. Yet, given that Rosatom was offering to cover between 70pc and 100pc of the project

costs, which would later have been recovered by power supplies generated from the plant, this argument was not very convincing. Rosatom plans to take legal action against Sofia to recover the €1bn (£800m) it has already spent on the project. The cancellation of the Belene plant was welcomed by the United States, which re-

cently lost out to Russia in a bid for several energy projects in Europe, including for nuclear fuel supplies to the Czech Republic and Ukraine. It said that the plant would make Bulgaria too dependant on Russia for energy. But the Belene plant could still be built. Unexpected support for the new power plant has come from the country’s former prime minister Simeon II, Tsar of Bulgaria from 1943-6. He believes that it is unwise to abandon the Belene plant, given that increasing numbers of Bulgaria’s neighbours

are building new nuclear reactors, guided by the economic outlooks and energy consumption forecasts for the next few decades. Romania, for example, has already completed the first two units of its Cernavoda nuclear power plant, and obtained approval from the European Union for the construction of two more reactors, which are scheduled to begin operations in 2017. Turkey is also building a nuclear power station with the aim of exporting electricity to neighbouring countries. Moreover, the cancelled pro-

ject cost Bulgaria many jobs, which prompted 700,000 of its citizens to sign a petition calling for a national referendum on this issue. Nevertheless, if Sofia does pull the plug on the Belene project for good, it could face an even worse economic depression. By closing down the Belene project permanently, without any adequate tradeoff, Bulgaria runs the risk of running low on energy with virtually no chances of increasing output after its only nuclear power plant at Kozloduy, 120 miles north of Sofia, becomes obsolete.

as euroclearability of Russia’s local securities (first and foremost Russia’s local sovereign debt, OFZs), the introduction of T+N settlement procedures for equities, and the eventual abolishment of limits on the size of depository receipts programmes by Russian issuers. The progress along that path will have tangible results for the scale of the foreign investors’ participation in the Russian capital markets, enhancing their depth, reducing volatility and ultimately lower-

ing cost of capital for the Russian corporations. The investment climate enhancement policy talk is no longer a fashionable posture, but reflects the need to support the shift towards a more investment-intensive growth model. As this need is already quite urgent, the progress along the path may be more rapid than that perceived by the pragmatic sceptics.

LONDON BLOG

Russia is laying out a welcome mat for the latest influx of new investors Alexey Zabotkin SPECIAL TO RUSSIA NOW

t was in his remarks at an investment forum in Moscow in February that then Prime Minister and now President Vladimir Putin presented his vision of promoting Russia from 120th to 20th spot in the World Bank’s authoritative Doing Business survey.

Since then, the improvement of the business climate has been firmly established as one of the central issues for the policy agenda. There is more than one reason that this policy has commanded much more tangible traction than most pragmatically sceptical observers assume. First, the broader economic policy vector has shifted the emphasis to investment demand and pro-

ductivity growth as the principal ingredients of Russia’s growth paradigm. For Russia’s investment-to-GDP ratio to expand from 20pc to 25pc by 2015 and 27pc by 2018 as suggested in the president’s objective-setting decrees of May 7, a radical improvement in the ease of doing business is indeed the critical precondition. Second, the tighter budget constraint of the Russian

government makes the authorities more directly interested in increasing the depth of Russia’s financial markets and securing higher prices for the Russian financial assets. The government is now a regular net borrower in the debt market, hence, the liberalisation of foreign investors’ access to the local bond market can no longer be postponed. It also contemplates the grand privatisa-

tion agenda which, if implemented as planned, would amount to many tens of billions of dollars over 2011-16; the 10pc VTB stake sale in February 2011 and recent 7.58pc Sberbank sale are the most prominent highlights of this plan rolling ahead. In a nutshell, the government is becoming increasingly confident in its role as a player. Third, even though many items on the investment cli-

mate checklist are yet in a fairly early stage of detailing and policy design, several pieces, including the market infrastructure enhancement, are already falling into place. On this count, the creation of the Central Depository, legislated for in late 2012, entered the final stages of implementation. The emergence of the Central Depository will open the door for such crucial steps

Alexey Zabotkin is head of investment strategy at VTB Capital.

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A STRATEGY FOR CHAOS Fyodor Lukyanov SPECIAL TO RUSSIA NOW

bout seven years ago, after Iraq had been liberated from Saddam Hussein by the Americans and plunged into chaos, violence and terrorism, I overheard a conversation at an international conference. An American participant from a very conservative think-tank said to a Russian colleague: “Yes, I have to admit Russian experts did a better job of calculating the consequences of invading Iraq.”The Russian, choking with surprise, replied:“Experts? In my country, any child could have told you how it would all end.” Today we are witnessing a partial repeat of those events. When the Arab Spring began two years ago, many Russians did not know what to make of Western discussion on this topic. For most, it was beyond belief that the West could seriously expect the Arab political awakening to take a similar course to that of the “velvet revolutions” that took place in Eastern Europe in 1989. Most Russian experts knew that democracy in the Middle East, if it took root, would have an anti-Israeli and anti-Western tone. And that the main beneficiaries of the collapse of secular authoritarian regimes would be Islamists of various degrees of militancy. People often recall the experience of Afghanistan in the Eighties, when the United States helped the mujahideen in the struggle against the Soviet Union. This group was to give rise to al-Qaeda, which would eventually turn its weapons against its patrons.The parallel works only up to a point. In Afghanistan, it was a conscious decision, since causing damage to the Soviets and to communism was such priority that the cost was irrelevant. Besides, it was hard to foresee how much Islam would strengthen its political position once the former ideological model of confrontation was gone. Today there are no illusions as to the overall trend: antiAmericanism in the Arab and

Muslim world is universal, especially among the masses and the seeds of cultural and religious confrontation sown in the early 2000s by George Bush’s counter-terrorist campaign have started to sprout. Radical Islamists see the pastor Terry Jones publicly burn the Koran and revel in the fruits of his action, while en-

Moscow’s position supporting the official leaders in Damascus often raises eyebrows joying impunity thanks to the First Amendment. The point is that supporting revolutions in the Arab East is not a conscious or considered choice of America and Europe; it is an attempt to adjust to the onslaught of events plus the “gut” fear of finding themselves to be “on the wrong side of history.” The result is total confusion. In Libya and Syria (and

in Egypt andYemen as well) the West sides with those who sympathised with the 9/11 terrorists, and sometimes were their accomplices.These countries feel no gratitude towards the West for helping them overthrow their tyrants and continue to fight their usual enemies, the US and Israel. All the more so because America and Europe have enough extremists of their own who think mocking the Prophet Mohammed is not idiotic provocation, but a way of asserting liberal values. Things come full circle. In a recent interview with the television channel Russia Today, Vladimir Putin, criticising the West over the Syrian conflict, said:“In that case, they might as well open the gates of Guantanamo and unleash all its prisoners against Syria. At the end of the day, this is the same thing.” The Russian president’s trademark sarcasm is there, but one cannot deny the underlying logic. It is already impossible to understand who is fighting whom and who is on whose side. Incidentally, reacting to the

murder of the US ambassador in Benghazi, Putin refrained from gleeful“we told you so” remarks, but noted first, the need to co-operate in the fight against extremism and, second, the need to be considerate of religious feelings. For Russia, a multinational and multifaith country, the issue has practical implications. The attitude to the Arab Spring, especially the episodes that clearly involve an external factor (Libya and Syria) stems from the awareness of the dangers of upsetting the fragile balance. Moscow’s position supporting the official leaders in Damascus often raises eyebrows (why cling to a doomed dictator?) and is not shared by many Russian Muslims (who wonder why Russia has quarrelled with the whole Arab world over Assad). But one fundamental principle is hard to deny, particularly in light of recent events. External interference in acute social conflicts on one side cannot yield a positive result. It usually aggravates the situation and makes

There are no illusions as to the trend: anti-Americanism in the Arab and Muslim world is universal

ilised nations. Unfortunately, in relations with “Putin’s Russia” scandals appear to be welcome. The tactic of some western NGOs and “government organisations” behind them is to provoke scandal in Russia – not to avoid them. “Unfortunately, many western-financed NGOs are concentrated on high-profile political cases or on fighting Putin by all means, leaving aside such problems as the plight of Russian refugees from the former Soviet republics or attempts to rehabilitate the Nazis who happened to fight the Soviet Union in, say, Estonia or Latvia,” says Alexander Brod, head of the Moscow Bureau for Human Rights. Of course, the departure of USAID will be bemoaned by those NGOs in Russia which

received generous donations for their attempts to prove elections were falsified and human rights breached. “USAID for many years gave grants to our organisation, they provided the bulk of the money we used to organise observing missions at elections,” Lilia Shibanova, head of the Golos human rights’ association, told RIA Novosti news agency.“There are very few funds in the world which finance the monitoring of elections.” Critics of Golos note that it monitored the latest parliamentary elections in Russia with a “presumption of guilt” on the side of the authorities, saying in advance they would tamper with the election results in favour of United Russia. Optimistic bias on the side of government media on election days

those who interfere hostages to that situation. Russia has only one “advantage”: if the worst comes to the worst, it can simply tiptoe out of the Middle East. That would be unpleasant and humiliating, especially if one remembers the role the Soviet Union played there only a couple of dec-

ades ago. But it would not be disastrous for Moscow, because it does not claim to be a global superpower and is increasingly concentrating on the regional space, which spans the whole of Eurasia. Neither America, which is keen to remain the world leader, nor Europe, which is right next door to Middle East, can afford to leave that explosive region. But they do not know what to do there.

Democracy has always been thought of as a form of government that automatically ensures a state’s proWestern orientation. If the democratic mechanisms for the change of power that the majority of Muslims support are invested with different values (ones that are neither sympathetic to the West, nor neoliberal), then that creates a very unusual situation. Russia’s position is simple: amid growing uncertainty, any kind of intervention, no matter how it is justified, is fraught with complications. Regardless of the commercial and geopolitical interests that Moscow has in the Middle East, it wants to avoid any unnecessary upheavals, not to mention conflicts between civilisations and religions. To this end, it is ready to co-operate with all reasonable forces that are guided not by ideological dogmas, traditionalist or liberal, but by a sense of selfpreservation. Fyodor Lukyanov is editorin-chief of Russia in Global Affairs magazine.

hen Russian authorities asked the United States Agency for International Development (USAID) to stop its operations in Russia from October 1, discontent was limited to a small number of politically active NGOs. This lack of protest should not be mistaken for a negative attitude to foreign aid. With or without Putin, Russia will long remain a rich country with many poor people living in it. There will always be room for charity or well-targeted development aid from abroad, and Russians cherish the opportunities foreign aid opens. They are also prepared to defend them. For example, when five to 10 years ago the Russian government talked about imposing tighter controls on international adoptions, popular discontent was much more serious than over the decision on USAID.“Why is the government trying to be patriotic at citizens’ expense?” was the dominant question in the press and in casual conversations. So, why wasn’t there a protest rally over the USAID decision? Because, much to my regret, the Russian foreign ministry was expressing the

feelings of many Russians when it said that“by distributing its grants, USAID made attempts to influence political processes, including elections at various levels and some institutions of civil society.”It does not mean Russia does not value humanitarian assistance or is not thankful for the aid USAID provided in the difficult times – mostly in the Nineties. But times have changed, and USAID has become interested in different things, and humanitarian assistance makes up a much smaller part of its expenses. And here Putin’s wish to keep the Russian political scene clear of foreign influences (a legal requirement) coincides with the mood in society. Most Russians are happy to see foreigners helping the disadvantaged or investing in Russia’s economic development. But Russians are not happy to see foreigners decide Russia’s future by pulling the strings of politics – even if that is done under the slogans of support for “fair elections”. USAID has become more interested in politics since Vladimir Putin came to power in 2000. The US State Department’s spokeswoman Victoria Nuland admitted USAID had planned to spend at least $50m (£31m) on developing “civil society” in Russia – in addition to many

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other programmes helping this sector, which is becoming ever more politicised. Phrases about the idyllically apolitical nature of“investments in democracy” contradict the combative tone of some of these“investors”who sometimes appear willing to force democracy on Russia in the aggressive way Bolsheviks imposed their “socialism”. David Kramer, president of Freedom House, an American NGO which is USAID’s partner in many projects, suggested Obama should just tell USAID to stay and continue making Russians free against their own free will. “Instead of pushing back and forcing Putin to publicly kick out USAID, the Obama administration has capitulated peremptorily,” Kramer wrote in The Washington Post. Kramer wants the Russian bureau of USAID, an American government structure, to be lenient and compliant when orders come from Washington but not to take “no” for an answer when the “no” comes from Moscow. The consequences were easy to predict: Kramer in fact predicted them, talking about a “forced” kick from the Russian authorities. The effect of such a kick would be an international scandal; an unpleasant affair normally to be avoided among civ-

NIYAZ KARIM

SPECIAL TO RUSSIA NOW

auxiliary in character.) One of the outcomes of the summit in which Moscow has an SPECIAL TO RUSSIA NOW interest involves plans for a efore the Apec sum- transport corridor fromVladmit in Vladivostok, ivostok to Brest to carry carRussia’s first deputy goes from the Asia-Pacific prime minister Igor Region by rail to Europe. There is no question as yet Shuvalov said: “Russia already has a ‘European foot’ of renouncing the sea route and now it needs an ‘Asian via the Suez Canal. But the foot’ for stability”. Later, ad- financial benefits – it would dressing the business session save more than $300bn in the of the meeting, he again for- first few years and speed the mulated Moscow’s goal in the journey by 30pc – make the Asia-Pacific region: to make Apec countries consider the sure trade with Apec coun- Russian plans in a positive tries exceeds Russia’s trade way. This is understandable with Europe. The meeting of considering the unstable sitthe representatives of lead- uation in the Persian Gulf ing economies inVladivostok and the Middle East, as well could be a milestone on the as piracy and other threats that increase the delivery way to solving that task. In formal terms that goal costs for Apec countries servhas not been reached. The ing Western consumers. Russia does not make any few documents signed were not connected with the sum- demands of its future partmit’s main programme. They ners; it does not attach any were signed “on the fringes”. political or financial strings Russia and the US signed to the policy it has declared. documents on joint inspec- The problems Moscow raised tions in the Antarctic, and during the summit were of on the creation of a common a purely technical nature, and Beringia national park.These ones that the Apec countries agreements did nothing to had to solve to speed the help Moscow break into the movement of cargoes across Russian territory and enjoy Asia-Pacific markets. But if one looks at Apec in the promised benefits: unifiterms of the Latin expres- cation of the transport code, sion“from the existing to the automation of logistical syspossible”,then a different pic- tems and so on. For its part, Russia promture emerges. The proverb does have a flip side, howev- ised to cut the time taken to er:“The existing does not fol- clear foreign containers from low from the possible”.What 12 days to four to five days was discussed inVladivostok by 2018. The capacity of exwas above all the “possible”. isting railways and highways Nobody expected to sign any will increase over the next documents that would lay six years. The government down the rules of the game agencies responsible for in the region or seal the cargo transportation will be agreements reached by the integrated into a single compolitical leaders. But a great puter and logistical scheme. To implement all these prodeal was said during the jects, Moscow intends to meeting about prospects. The forum was not expect- bring in private investors, ed to produce formal agree- some of them from abroad. ments: it was a platform for Incidentally, the Russian dialogue where all agree- budget contributed only a ments were gentlemen’s third of the money spent on agreements, with nothing to the summit, with the rest stop one of the parties reneg- coming from long-term priing on them. Russia present- vate investments. It would be an exaggeraed more than 50 initiatives, but many were long-term, tion to say that Russia has not ready for implementa- gained an“Asian foot”on the back of the summit. But Mostion before 2018–20. The summit was also im- cow did identify “the possiportant as a trigger to give ble”during the forum; a fora new impetus to the devel- mula for successful trade opment of the country’s Far which it managed to sell to East. It is no coincidence that its partners in the Asia-PaPresident Vladimir Putin, cific region in the context of when asked about the con- the economic crisis. While manufactured goods siderable cost of the event – more than $20bn – (£12.4bn), will flow west across Russian spoke about the ambitious territory, the East will get infrastructure projects that fuel and energy. Not surprishad been implemented in ingly, the participants in the Vladivostok. Under different summit – the presidents and circumstances these projects prime ministers – took part would long have remained in the Apec business summit that ran in parallel with the on paper. While previously, Russian main events and addressed political scientists and ex- many of its panels. The question might well be perts attending discussion forums spoke only about the asked as to what the future possibility of shifting the holds in store for the “westcountry’s economic capital ern component” of the Ruseast of the Urals, the Apec sian economy if Moscow is summit turned that concept so persistently seeking ecointo a reality. Although none nomic benefits in the East. of the Russian leaders in Moderate growth, stagnation Vladivostok spoke about or oblivion? Russia says it is “moving the capital”,the logic interested in western marof such a move was never- kets. But it is obvious that theless in the air. The inter- Moscow is tired of overcomnational airport built inVlad- ing the artificial trade barivostok from scratch, two riers erected by the EU bumodern bridges, a number of reaucrats. In contrast, the new highways, a gigantic uni- East, with its vast markets, versity compound whose ca- booming economies and free pacity at present far exceeds competition, looks more atthe number of students in the tractive and dynamic. The longer Europe pursues region, would require an entirely new approach from a selfish policy and creates Russia to the development of problems for Russian commodity trade, the less chance the Far East. By carrying out grandiose it has of remaining Russia’s construction projects in the main trading partner. It takes two years preceding the sum- two to tango. Meanwhile, mit, Moscow has demonstrat- Asia is behaving like a brideed its readiness to invest in to-be. Its leaders see Russia developing the country’s not only as an additional East. But now it is just as market but also as an effecimportant to make these in- tive and, most important, rich investor capable of implevestments pay back. Let us outline the goals menting large-scale capitalthat Russia can achieve intensive projects. thanks to the summit (leaving aside the numerous edu- Ye v g e n y S h e s t a k o v i s cational, innovative and en- editor of the international vironmental initiatives, politics desk at Rossiyskaya which, though important, are Gazeta. Yevgeny Shestakov

POLITICS AND AID JUST DON’T MIX Dmitry Babich

IN THE EAST, A BRIDE IS WAITING

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is usually balanced by the “pessimistic bias”of westernfinanced organisations. Russia remains far from its goal – transparent elections that would not be questioned by rival groups. The State Department and USAID said they would continue to finance Russia’s civil society, so the closure of USAID’s office in Moscow is largely symbolic – and it is not a good signal. USAID’s Nineties audience, people in need, shrank as the agency concentrated solely on“civil society”– as it understood it. And the audience of the proAmerican Russian civil society is ludicrously small. Hence the lack of protest – and attention in general. Dmitry Babich is a political analyst with the Voice of Russia radio station.

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Culture

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History The life of Catherine the Great

Q & A SERGEY LUKYANENKO

A doctor writes: from science fact to science fiction THE AWARD-WINNING AUTHOR OF THE WATCH SERIES TALKS ABOUT HIS SWITCH FROM PSYCHIATRY

How popular are your books in different countries? I sell a lot of books in Germany, the UK and the US. In France, there was an excellent translation, but the book fell flat for some reason. Surprisingly, I sell many books in Taiwan. I’ve sold about 100,000 in mainland China, which isn’t bad. In Korea the numbers have been average, but in Japan my books failed completely. It’s a mystery every time: either the translators didn’t know what they were doing, or the book simply didn’t come out at the right time.

society and culture. If a Russian starts writing like an American, for example, he isn’t going to get translated in the United States – there are enough American writers there. It’s important that writers strike a balance between what’s interesting to people of different cultures, while not forgetting their own.

KOMMERSANT

You trained as a psychiatrist. Why did you abandon your medical career and dedicate yourself to literature? It’s great to be excited by your profession, whether you are a doctor or a writer. I started writing books when I was in medical school and, by the time I graduated, I realised that writing was more exciting to me than being a doctor. And if I tried to be a doctor and a writer, then both would suffer. The only way I would have become a good doctor was to be a doctor full time, but then I would not have been able to write as many books as I would have liked. That’s why I decided to quit medicine and focus exclusively on literature. It was a difficult decision indeed, because the writer’s job is a lottery, and when you’re just starting out there’s no guarantee that you’ll be able to make a living, and you could well end up being an author that nobody takes an interest in.

more to do with having an intimate knowledge of the society for which the book is being translated. Ideally, a translator should come from the country the book will be read and critiqued in, yet be closely familiar with the culture of the country where the book was written. Are you happy with the screen adaptations of your books? Adapting a book into a film means translating it from the language of literature into the language of cinema. I wouldn’t say that I am totally satisfied with the movies that have been made, but I can’t say that they were bad either. I know for sure that the entire film crew tried to do their best. That’s why I love all the movies of my books, even though they are not without their flaws. It’s

What do you look for when choosing translators for your books? Above all, translators must be native speakers. It’s not because they speak the language better – I understand that sometimes a foreigner can learn a language better than native speakers. It has

like the love you feel for your children – even if they misbehave, you still love them because they are your kids. Do you think that there is much of an appetite for Russian literature abroad? Russian authors are having their work translated into many languages these days. Interest is stronger in some countries than others, and there are countries where it’s very hard for Russian writers to make it – for example, China is a rather difficult market for contemporary Russian writers and it’s hard to get published there. I think this has to do with the challenges of translation. Russian books are generally more successful in Europe, particularly in Germany and Britain. Germany has the strongest interest in Russian

writers – I know that from my own experience and from that of my colleagues.

PROFILE BIRTHPLACE: KAZAKHSTAN

What do you think would boost interest in Russian literature abroad? Government regulation and support – something writers demand occasionally – are of little help here. Of course, the state cannot help authors get published in other countries; everything is down to the writers. A writer who wants to be translated and published abroad faces a very difficult challenge: first of all, he must make sure that his book is cosmopolitan in the best sense of the word, that it is interesting to a global audience. Nobody is going to read about problems that they don’t care about. Second, the writer should not be detached from his own

AGE: 44 STUDIED: PSYCHIATRY

Sergey Lukyanenko became popular two decades ago, after the publication of his novels Knights of Forty Islands and Labyrinth of Reflections. BOOKS: The Watch series, which has been adapted into several films and computer games, remains his most popular collection abroad. His much-anticipated release, New Watch, is due to be published next year. MAJOR INFLUENCES: Robert A Heinlein; Strugatsky brothers; Vladislav Krapivin.

PRESS PHOTO

TO FULL-TIME FANTASY WRITING AND THE GROWTH OF HIS INTERNATIONAL READERSHIP

Great ideas: Catherine introduced European thinking on philosophy and art. She also built hospitals and schools

What’s your advice to aspiring authors who are starting their writing careers at a time when books have begun to cede ground to new media? Indeed, being a beginner is very difficult right now. Book publishers are in a crisis, sales are dwindling, and publishing houses are losing money, doing their best to survive. It’s a sign of the times, the emergence of new kinds of entertainment – there’s nothing we can do about it. I don’t think books will perish for good. They could become less widespread, though, falling even further behind movies and computer games. But we shouldn’t be afraid of this, because books will always remain the entertainment of choice for intelligent people, of whom there are still many in this world. My advice to aspiring authors is above all to try to get objective feedback on your writing. How far you push your work depends on your skill.You can be totally sincere and spend a lot of energy on something that isn’t working out. But it can also happen that, although it doesn’t work out at first, some sort of transition occurs and everything comes together just fine. You have to send your texts to publishers. Trust me, they read all the texts they receive. Publishers dream of stumbling upon the next JK Rowling or Dan Brown. Write and make the public aware of your writing – that’s the key to success.

Enlightened empress in a man’s world empress’s dozen lovers would barely have invited comment had she been a man. From her physical passion for the young, handsome Gregory Orlov to her lasting partnership with Gregory Potemkin, PHOEBE TAPLIN SPECIAL TO RUSSIA NOW Catherine’s romantic history Catherine the Great became is sympathetically portrayed. Empress of Russia 250 years In her letter to Potemkin in ago. During her 34-year February 1774, she details her reign, she extended Russia’s previous lovers and writes: boundaries, presided over an “The trouble is that my heart age of cultural enlightenment is loath to be without love and founded a collection, even for a single hour…” Massie’s use of Catherine’s which subsequently became letters and memoirs helps us the Hermitage museum. “She sat on the throne of to see the world through her Peter the Great and ruled an eyes. He also allows Catheempire, the largest on Earth”, rine to write her own epiRobert Massie writes in his taph. Her list of accomplishnew book Catherine the ments, composed after Great: Portrait of a Woman Potemkin’s death, says:“She (Head of Zeus). The Pulitzer wished to do what was good Prize-winning author de- for her country, and tried to votes the first half of the book bring happiness, liberty and to Catherine’s loveless child- prosperity to her subjects.” The image of the princess hood and marriage, as well as the adventures between catching pneumonia as she the“modest grey stone house paced the stone floors of a on a cobbled street” where Moscow palace in winter, she was born in Stettin, Prus- while learning Russian by sia, and her coronation in candlelight, helped bolster Moscow’s Assumption Ca- the idea that Catherine was thedral. He quotes the Earl very dedicated to Russia and of Buckinghamshire, British its people. Her mastery of the ambassador to Russia when language and conversion to Catherine was crowned:“Per- Orthodoxy as well as exhaps the best description of changing her original name, her is that she is a woman Sophia, for her new identity as Catherine, were all seen as well as an empress.” “In some ways it is a fem- as signs of her commitment. Like Peter the Great, to inist book,”says Massie, now in his eighties.“Catherine the whom Massie often compares Great was a strong woman her, Catherine introduced trying to survive when European ideas in the fields women were generally pow- of“moral, political and judierless. My daughters are cial philosophy, literature, art, growing up in a world which architecture, sculpture, medis fairer, but… men still get icine and education”. She built hospitals, schools a free ride.” Much has been made of and orphanages and was inCatherine the Great’s love life oculated against smallpox as but, as Massie points out, the an example to her people. A new book about Catherine the Great offers insight into the life of an extraordinary woman who brought European ideas to Russia.

Literature Varlam Shalamov’s tales of life in the labour camps are now being compared to the works of Solzhenitsyn

The work of forgotton author Varlam Shalamov, who wrote deeply moving stories about life in the Gulag, deserves wider recognition. GEORGE BUTCHARD

ITAR-TASS

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Varlam Shalamov rejected Alexander Solzhenitsyn’s offer to co-author the latter’s book, The Gulag Archipelago, 1918-1956: An Experiment in Literary Investigation, which describes the forced labour camp system in the Soviet Union. In so doing, he sparked a conflict between the two on the question of whether suffering is redemptive, and what role art should play in society. Solzhenitsyn once asserted that “literature becomes the living memory of a nation”.And this has indeed become the case for The Gulag Archipelago as it is now part of Russia’s high-school literature curriculum. But the work of his contemporary, Varlam Shalamov, who survived 17 years in the same camp system and who wrote as powerfully and brilliantly as Solzhenitsyn, failed to gain much recognition in Russia or abroad. For anyone interested in the experience of the Gulag, Shalamov’s collection of short stories Kolyma Tales is required reading, a complement to Solzhenitsyn’s work with its contrasting style and philosophy. John Glad, who

Hard times: the TV series Lenin’s Last Will was based on Shalamov’s Kolyma Tales

produced the first translation of Kolyma Tales, writes in his foreword that the reader is “a person whose life is about to be changed”. This can be seen as a kind of disclaimer, a warning that this material is not for the faint-hearted, with its unflinching presentation of the brutality of power and the range of human suffering. Shalamov’s work is defined by his direct, objective presentation of suffering, with the detached gaze of his narrators bringing the subject matter into sharp relief. Thematically, each of the stories

is self-contained, focusing on a different element of camp life, a specific event, or a personality. However, this the-

Shalamov, who spent 17 years in a camp, wrote as powerfully and brilliantly as Solzhenitsyn matic division masks a deeper artistic unity. Critic and translator Robert Chandler notes that: “Whole passages are sometimes repeated between sto-

ries, but the story will end differently.”For Chandler, this creates the impression that Kolyma Tales is like a mosaic that has been shattered, and intentionally so, as if to demonstrate that the experience of the Gulag really does shatter one’s world. Indeed, it can be hard to read the stories about the terrible plight and loneliness of Shalamov’s lyrical heroes as readers cannot feel indifferent towards the material. Shalamov declined to collaborate with Solzhenitsyn partly because of their differing philosophical outlooks

but also because Shalamov disapproved of Solzhenitsyn’s use of the historical approach. Shalamov did not embark on a historical project with eyewitness testimonies in the mould of Auschwitz survivors such as Elie Wiesel and Primo Levi. Shalamov claimed that “Solzhenitsyn is bogged down in the themes of 19th-century literature”,and that “all those who follow Tolstoy’s precepts are cheaters”.He believed that“art has lost the right to preach”,and that no greater good could possibly emerge from the Gulag. Thus in sentences such as: “I felt a strange and terrible pity at seeing adult men crying over the injustice of receiving worn-out clean underwear in exchange for dirty good underwear,”there is no sense of a deeper moral imperative at work, just a sparse yet emotional presentation of humiliation and degradation. Other Gulag camp stories of lesser-known Russian memoirists tell their own stories rather than inventing heroes. For example, Efrosinya Kersnovskaya wrote about moving to different camps all over the country, working in different roles from a laundress to a miner. When she returned home, she painted a series of pictures illustrating her experiences and put them in an album. These paintings have been exhib-

Imperial treasures on show in Edinburgh The Hermitage museum has loaned a selection of art and artefacts dedicated to the Empress to the National Museum of Scotland. A selection of Russian portraits, porcelain, gowns, guns and a golden sleigh are on display in Catherine the Great: an Enlightened Empress, an exhibition at the National Museum of Scotland in Edinburgh. It is said to be “the greatest collection of treasure from Russia ever seen in the UK”. The museum’s communications officer, Bruce Blacklaw, said the idea was to show the empress as a multifaceted person: art collector, correspondent of Voltaire, lover of Potemkin, writer, rider, educator and rul-

er. “The curator was also keen to bring out her sense of humour and show that her reign was not just about battles.” The exhibition highlights themes such as art and architecture and war as well as the historic links between Russia and Scotland. The neoclassical Scottish architect Charles Cameron worked on the St Petersburg imperial palace Tsarskoye Selo and landscape designer Adam Menelaws created garden pavilions in the park. The exhibition is open until October 21 at Exhibition Gallery 1, Level 3, the National Museum of Scotland, Edinburgh. Phoebe Taplin

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Revealing the dark side of the soul after 17 years in the Gulag

ited several times in Russia and the album, with her own subtitles, was published in several European countries. Shalamov’s central philosophical question is: what sustains and drives humans, giving us the capability to survive experiences such as the Kolyma camps? One of his narrators gives the explanation that “a human being survives by his ability to forget; memory is always ready to blot out the bad and retain only the good,” while another, who stumbles on a picture of children, is moved by happier childhood memories which momentarily distract him from his situation. Such bittersweet moments punctuate the otherwise bleak narratives. In the story Sententious, the mere memory of one word brings about unbridled joy to a man whose language and memory have been all but crushed. Shalamov examines the notion that humans require more than just survival on a physical level, touching on the soul’s spiritual requirements through lines such as: “Needing more than bread, I dip a crust of dry sky, in the morning chill, in the stream flowing by.”In his series of notes,“What I’ve seen and learnt at Kolyma camps”, Shalamov concluded that “the extraordinary fragility of human nature, of civilisation”, is one of his most important lessons. Shalamov consistently played down the profundity of his work, claiming: “My stories are basically advice to a man on how to act in a crowd.”This statement is typical of an unassuming writer who deserves much wider recognition for his great contribution to world literature.

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Heritage With their beautiful gardens, elegant architecture and rich cultural history, Moscow’s estates and palaces are spectacular places to visit

Discover a glorious corner of paradise valleys nearby to tie votive cloths to trees near sacred springs and rocks, and tourists take boat trips or troika rides. The park has stables, gardens, ponds and the log cabin Peter the Great lived in while he supervised the building of the Russian fleet.

Many estates and mansions built by tsars and noble families survived the Soviet era and have been restored to their former glory. PHOEBE TAPLIN SPECIAL TO RUSSIA NOW

A travel writer in 1914 described “two separate worlds” in Moscow – the estate like “a corner of paradise where all is beauty and elegance… and, beyond its boundaries, Russia – cold, grey and disorderly.” This may be unfair to Russia as a whole, but these historical estates remain idyllic corners of the city surrounded by parks and forests, lakes and orchards. The communists nationalised all grand estates after the 1917 Revolution and many were damaged or destroyed. But, thankfully, some were given“museum status” and preserved.

oshka dolls, fur hats, patchwork quilts and antique silver. The market includes its own replica kremlin (fortress) with a colourful recreation of palace and boat, as well as a museum of vodka.

Unfinished Gothic follies

Tree tunnels and sweeping lawns lead down to a lake and spectacular views across the river valley

Recreating a fairy tale Peter the Great’s father, Tsar Alexei, built a huge fairy-tale palace south of the city among the riverside ravines at Kolomenskoye in the mid17th century. Once hailed as an eighth wonder of the world, it was later demolished, but former Moscow mayor Yuri Luzhkov, built a huge replica. On the far side of the park, a museum of wooden architecture includes a three-domed wooden church, towers and gateways. Tsar Vasily III commissioned the soaring Church of the Ascension here in 1532, on a cliff overlooking the river, to celebrate the birth of his son, Ivan the Terrible. Pilgrims come to the hidden

ished, but its elegant gateways remain, alongside the five-domed Cathedral of the Intercession, with its ceramic peacock-eye tiles and a beautiful, red-brick bridge tower. The teenage Peter trained his troops in the grounds and learnt to sail a small boat he found in one of the barns. A nautical statue commemorates Peter’s first ship, known as the “Grandfather of the Russian Navy”. The island, with the remains of the royal estate, is close to Moscow’s largest craft market, selling matry-

Tourism Companies offering heritage holidays on the Volga try to shed outdated stereotypes

All aboard: river cruises are for young people too Income from tourism is increasingly important for riverside towns, which welcome attempts to exploit new markets. VSEVOLOD PULYA

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Myshkin on the River Volga, named after a mouse (mysh) said to have saved a prince from a deadly snake bite by waking him, is popular with tourists who take cruises on the famous waterway. The town has capitalised on the mouse theme to attract visitors; it has a Mouse Museum and celebrates the Year of the Mouse in the Chinese calendar in fine style. Playing on the well-known Russian saying,“The only free cheese is in a mousetrap,”the Mousetrap café serves free cheese. Magnets with mice hanging from gallows, for example, have enjoyed great popularity with tourists. If visitors tire of mouserelated entertainment, the town is also home to a museum that features old cars, bikes, sleds and launches. According to Anatoly Kuritsyn, head of the Myshkin Municipal District, out of the town’s population of 6,000, tourism employs 700 – as many as work in the city’s main oil refinery. In 2011 alone, the city was

Of mice and men: Myshkin makes the most of the mouse legend to attract visitors

visited by 160,000 tourists – which is almost 27 guests for each resident. But while cruises are traditionally associated with holidays for retired people, the cruise companies are now trying to appeal to younger tourists, and cities like Myshkin are hoping to cash in. “People who go on river cruises are more often than not those who have already been on such a cruise or those who have been recommended to try it by friends,” says Sergei, a tourist company representative. There is still a shortage of younger tour-

Imperial vision: Catherine the Great’s follies at Tsaritsyno

Moscow. The theatre was built by Osip Bove, designer of the recently restored Bolshoi Theatre. The annual Usadba Jazz Festival is held in its grounds in June, and classical concerts are staged during the summer around the neoclassical mausoleum and the 17th-century church. The park’s attractions include tree tunnels and sweeping lawns, leading down to a frog-filled lake, and great views from the terrace across the old river valley. Another aristocratic venue perfect for a stroll is the landscaped park at Kuzminki. Visitors can wander through waterside forests, past bridges, churches and statues of rearing horses. The outbuildings of the original palace house a museum of estate life and the avenue leading to the griffin-guarded gates is famous for its tulips in spring. The area is full of charming surprises, including a wooden village which is the Moscow home of Ded Moroz (the Russian Santa) and collections of vintage cars. One

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months of the year, (June-September) see Volga River cruises run.

50 2.3 thousand roubles (£1,000) − the cost of a 10-day Volga cruise (approx).

ists, and Sergei attributes this to a stereotype fixed in people’s minds: that of a recumbent holiday spent on deck, spa food served three times a day, and boring retro songs

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thousand miles is the length of the Volga River − from Tver to Astrakhan.

issuing from every crevice 24/7, making the ship a kind of floating prison from which there is no escape. But many in the river tour market are trying to change

Should Innocence of Muslims be banned in Russia and over the world?

this image and to diversify the range of their services. And the cities along the route, like Myshkin, are helping by trying to captivate the river tourists when they visit so that they want to return – whether by cruise ship, car, train or bus. The main attractions are heritage and handicraft outlets. A short distance from the city of Nizhny Novgorod, the town of Gorodets is building an extensive folkcraft quarter, where tourists can see the works of traditional artists, ranging from woodcarvers to weavers. Tourists can enjoy a handson approach, decorating a plate in the Gorodets style or moulding a cockerel whistle out of clay, for example. “You get an excellent result, it only takes a little tinkering,” says Alla, supervisor of the Gorodets artists. She spins a crooked clay lump and gives a tourist a figure that resembles a bird. “We had no idea how diverse your country is,” says Lynn, 52, from Australia, standing by the house-museum of the Russian artist Isaak Levitan in the tiny town of Ples, which has only 2,500 inhabitants. “A river cruise on the Volga – that’s what we were advised to do after visiting Moscow and St Petersburg,”adds her husband, Robert, 54. They vie with each other, providing enthusiastic reports about their journey, indicating that the new tactics of the tourism companies were already finding some success.

Russia will never forget Britain’s role in helping it to defeat Hitler by delivering vital supplies to the Red Army via the Arctic convoys. EVE HARRIS SPECIAL TO RUSSIA NOW

On August 31, 1941, the first Arctic convoy, codenamed Operation Dervish, arrived safely in the city of Arkhangelsk in Russia. To mark the 71st anniversary of the event, British veterans gathered at a reception aboard HMS Belfast in London. This was an occasion to honour the bravery of the sailors involved, commemorate those who did not return, and celebrate the co-operation between Soviet and Allied forces. The battleship was alive with the sound of wartime music and the veterans entered into the spirit of the occasion. Veteran Stan Ballard, 90, silenced the gathering with a moving rendition of The Way We Were.This was followed by a violin recital of songs from the Forties to the accompaniment of much applause, many toasts and the traditional call of “Up Spirits” for a tot of rum. It is impossible to underestimate the role of the Arctic convoys in the outcome of the war. On July 1, 1941 Hitler launched Operation Barbarossa— a plan to in-

on a ship anchored in the Russian port for 10 months after delivering timber, and had a chance to go ashore. He remembers loudspeakers in the streets playing the same mix of songs and Soviet slogans every day. But some musicians from his team managed to trade cigarettes for instruments. They played at dances in the local community hall that achieved legendary status, with girls coming from far and wide. But overall, the convoy experience was harrowing. Capital tribute: HMS Belfast Jimmy Potts, a former air hosted the reception gunner, will never forget how vade the Soviet Union. lucky he was to survive. Churchill said the Allies Frank Bond, now 89, recalls would“do everything to help bitterly cold conditions and that time, geography and our towering waves. He and other growing resources allow”, veterans have since been and on July 12, 1941, he back to Russia several times. Event organiser Eugene signed a mutual assistance Kasevin is determined to enpact with Stalin. By July 21, 1941, the Der- sure the convoys are rememvish convoy was ready to set bered. He sees the legacy of sail from Hvalfjordur in Ice- Operation Dervish as an imland, loaded with supplies portant link between Russia that included 15 Hurricane and the UK:“Despite all the fighters, 10,000 tons of rub- misunderstandings, political, ber and 1,500 tons of army media-related or otherwise, boots. Later convoys deliv- the shared history between ered almost a quarter of the Russia and Britain remains Red Army’s supplies in what one of our strongest bonds. “Our successful collaboraChurchill called “The worst tion in the fight against Hitjourney in the world.” Gordon Long, who was ap- ler is part of the common pointed MBE for his wartime heritage of both countries, services and contribution to and this needs to be celebratAnglo-Russian relations, was ed and cherished.”

Happy birthday Moscow - 865 years young!

Auspicious or not, that didn’t stop the hordes coming out onto the streets in celebration of their city,

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more architectural gem stands by the lakes in Kuzminki Park: a colonnaded yellow building known as the Durasov Mansion, now a museum. Four wings radiating from a round central hall and, connected by a colonnade, represent the encircled St Anne’s cross. Nikolai Durasov, an eccentric nobleman, commissioned it in 1801 to commemorate his appointment to the Order of St Anne. It was a venue for balls, banquets and concerts. This was a favourite area with 19th-century dacha dwellers, including Fyodor Dostoevsky, who came here in 1866. His niece’s record of him at that time is at odds with his reputation as a relentlessly gloomy writer. She describes him taking part in word games and amateur dramatics and says he was “the originator of all the pranks and diversions”. Today’s visitors will find plenty to lift the spirits in Moscow’s aristocratic and imperial parks and palaces.

Wartime allies Veterans gather to mark Arctic convoys

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St Petersburg may have been the capital but aristocratic families built their mansions in Moscow

Among Moscow’s surviving imperial palaces are the ruined Gothic castles at Tsaritsyno. Catherine the Great discovered the estate in 1775 on a walk and was enchanted by the series of lakes surrounded by wooded hills. The area belonged to an old prince who, as Catherine complained in a letter,“took no interest in waters, forests or majestic scenery” but spent his life playing cards. Gambling debts eventually forced him to sell the land to Catherine, and work began at once in the renamed Tsaritsyno (empress’s village). The two greatest architects of the day failed to please the Empress, however, and the palaces were unfinished 21 years later when she died. A few years ago Mr Luzhkov decided that these fanciful ruined follies should French impression: Kuskovo, built in the mid-18th century, has been compared to Versailles be rebuilt and a controversial restoration programme Great’s time, built Kuskovo villa and a grotto decorated tankino on the far side of has provided musical foun- in the mid-18th century.With with sparkling sand and sea- town and moved there with tains, grand museums and its sweeping, sphinx-flanked shells. Orangeries house ce- Praskovya in 1795. The theatre, where she was prima gilded ballrooms. stairs leading to stately ramics museums. One of Moscow’s most ro- donna, hosts concerts and rooms decorated with Flemish tapestries, crimson silk, mantic liaisons began in operas under its spectacular Moscow’s Versailles St Petersburg may have been rock crystal chandeliers and these enchanted grounds. painted ceilings on summer the capital for most of the gold-wreathed mirrors, it is Count Nikolai Sheremetev nights. 18th and 19th centuries, but sometimes called Moscow’s fell in love with and secretaristocratic families still Versailles. The gardens are ly married one of his serfs, Cultural haunts built their grand mansions dotted with statues, summer- the opera singer Praskovya Another estate that mainin Moscow. Peter Shereme- houses – including a gabled Kovalyova, whom he nick- tains its musical traditions tev, who was part of the rich- Dutch house with Delft tiles named “Pearl”. Nikolai built is PrinceYusupov’s palace at est family in Catherine the – a Swiss chalet, an Italian the opulent estate at Os- Arkhangelskoye, just west of CORBIS/FOTO SA

Peter’s obsession with boats started in another of his father’s residences on an artificial island at Izmailovo, east of the city. The original wooden palace was demol-

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The island cathedral

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