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Tuesday, November 27, 2012

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Trade After 26 years, Russia allows two UK companies to resume meat exports

NEWS IN BRIEF

We’ve no beef with British meat

Moscow to honour Syrian arms deals

VIKTOR KUZMIN SPECIAL TO RUSSIA NOW

SHUTTERSTOCK/LEGION-MEDIA

Moscow has lifted a 26-year ban on imports of British beef and lamb, and given two companies the go-ahead to export to Russia. This was announced by the Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) head, Sergei Dankvert, last week. The embargo was introduced during the second year of Mikhail Gorbachev’s perestroika in 1986 when the first UK cow contracted BSE, also known as mad cow disease. More than 37,000 cases of BSE a year were reported in the first half of the Nineties, while almost 200 people have died from variant Creutzfeldt–Jakob disease, possibly as a result of consuming BSE-infected meat. The epidemic was halted after the use of processed animal protein in cattle fodder was banned in Britain in 1996 (and in the EU in 2001). Animals born before August 1996 were excluded from the food chain, according to Rosselkhoznadzor documents. The EU lifted its ban on British beef in 2006, but Russia took a more cautionary approach. To end Russia’s ban, the UK’s chief veterinary officer Nigel Gibbens produced evidence detailing the disease’s eradication to Rosselkhoznadzor in September. Satisfied with the evidence, Mr Dankvert said

that the first steps to resuming trade would be made. Russian authorities generally take a fairly tough approach when it comes to inspection of imported products. They declared that Norwegian salmon was offlimits this May, stopped eight Ukrainian meat and dairy companies exporting their products to Russia in Sep-

tember, and banned meat imports from the United States and Australia in October. The day the lifting of the British meat ban was announced, 11 German companies were found to be giving inaccurate certificates of origin for animal products and were banned from exporting to Russia. The two British companies

given authority to trade with Russia, which are listed only as UK 5513 (a beef producer) and UK 8216 (a lamb producer), pave the way for other companies to start exporting to Russia. However, Rosselkhoznadzor said that there had to be a demand for British meat before further imports were allowed. These companies will face

tough competition and will have to market their meat carefully to appeal to Russian consumers. American and Australian steak is widely consumed in Russia, and consumers have recently been introduced to Argentinian and Brazilian beef, too.“Cooperation with South American suppliers is growing fast, mostly because these coun-

Bull market: British exporters will face tough competition for beef, while the prospects for lamb are more promising

tries don’t distort the real prices of their products with various hidden subsidies,”Mr Dankvert said. Brazil’s share of the Russian beef market now exceeds 40pc, according to Anna Yevangeleyeva, trade web portal analyst for Meatinfo.ru. Russia is also gradually building up its own meat production. According to Ms Yevangeleyeva, growth will reach 8pc this year, driven mostly by pig and poultry breeding, which are the most attractive sectors for investors in terms of profit. The poultry sector has also been growing particularly fast, with imports falling by a total of 50pc since 2007. However, this growth could well be affected by the sharp increase in fodder prices which followed last summer’s drought. The prospects for British lamb farmers are slightly more promising. Demand for lamb has been rising by 5pc to 10pc a year. Experts say that the increase is a direct result of the immigration of Central Asian Muslims to Russia. But the domestic production of lamb is also growing. Russia imported just 6,400 tons of lamb and goat meat between January and September 2012, which was 4.4pc less than last year, Meatinfo.ru reported. Lamb is not currently a staple food for the typical inhabitants of central Russia, who generally prefer to eat beef, pork or chicken. But with the right marketing, British exporters will be hoping that lamb could be on their menus, too.

BP-Rosneft New expertise will help Russia exploit Arctic reserves

Defence All change at the top

Deal of the century creates Russo-British oil giant

General approval for new forces chief

In return for its technical and management expertise, BP will gain access to Russia’s unexploited oil reserves in a deal agreed with Rosneft. BEN ARIS SPECIAL TO RUSSIA NOW

REUTERS/VOSTOCK-PHOTO

Industry analysts have welcomed the BP-Rosneft deal, which has been described as the “deal of the century”. Last month, the British oil giant BP swapped partners in Russia, from the AngloRussian joint venture, TNKBP, for the state-owned Rosneft, in the process creating the biggest listed oil company in the world and transforming the Russian oil sector into the bargain. BP sold its 50pc stake in TNK-BP to Rosneft in a stock-and-cash deal worth $27bn (nearly £17bn), that saw the British company become the biggest single

shareholder in Rosneft after the government. At the same time, Rosneft bought out the Russian AAR consortium that owned the other half of TNK-BP for $28bn. The merged entity will produce four million barrels of oil a day, making Rosneft responsible for nearly half of Russia’s entire oil production. The deal will significantly boost the state’s role in the sector. Even President Vladimir Putin was squeamish about increasing the government’s influence in Russia’s most important sector. “Both the government and I had mixed feelings when the idea of this project appeared,” Mr Putin said at a meeting with members of the international Valdai discussion club.“This is not in line with our trend to reduce the growth of the state sector.” Turning on the tap: the merged company will However, the logic of the produce four million barrels of oil a day

deal was compelling: a good deal is one where the interests of the two parties are aligned and BP needs access to Russia’s oil reserves, while Rosneft is in desperate need of BP’s management and technical expertise. Russia is one of the world’s biggest oil exporters, but the fields that were developed for the most part in the Soviet era are now past their peak and production is beginning to decline. Furthermore, before the end of the year, the government intends to auction off its last three big unexploited oil fields. “If we complete the auctions on Imilor field in the Khanty-Mansiysk autonomous district, the SeveroRogozhnikovskoye field in the Shpilman region and the Lodochnoye field in East CONTINUED ON PAGE 5

As the new defence minister, Sergei Shoigu, prepares for the latest overhaul of the armed forces, there is much speculation about his plans. A BRATERSKY, J EARLE THE MOSCOW TIMES

When Sergei Shoigu took over at the Defence Ministry earlier this month, he inherited a military at a crossroads, torn between tradition and the half-completed reforms of his predecessor, Anatoly Serdyukov. Mr Shoigu will have to decide between maintaining a large, conventional force or pursuing Mr Serdyukov’s goal of creating leaner, more modern armed forces. While servicemen rejoiced at the ousting of Russia’s least popular minister, ostensibly over corruption allegations, analysts said it was still too early to say which path Mr Shoigu would follow. There has been much spec-

ulation about his plans, but the news that Mr Shoigu has appointed long-time aide Yury Sadovenko to head the ministry’s administration suggests that a transition is already under way behind the scenes. Analysts told The Moscow Times that Mr Shoigu faces many challenges, as years of underinvestment and corruption has eaten away at the forces’ battle-worthiness. In its current state, the army is capable of fighting only short, relatively small-scale skirmishes, like the brief August 2008 conflict with Georgia, but not a prolonged war, says Alexander Khramchikhin, deputy director of the Institute for Political and Military Analysis. Mr Serdyukov’s modernising reforms have stalled, leaving the military in limbo between its past as a large CONTINUED ON PAGE 2

New book prize for non-fiction writers Pushkin House, a cultural centre for Russian arts in London, has launched the Pushkin House Russian Book Prize, which is to become an annual event with the winner announced at the Hay Festival. The £5,000 prize will be sponsored by Waterstones for the first three years. It is designed to further understanding of the Russian-speaking world by encouraging strong non-fiction writing on Russia, and promoting debate on issues raised.The shortlist will be announced in April 2013 and the winner will be chosen by five judges.

Lord Myners joins MegaFon board Lord Myners, City minister in the last Labour government, is to join the board of directors of leading Russian mobile phone company MegaFon ahead of its imminent floatation on the London Stock Exchange. “MegaFon hopes that the appointment of Lord Myners will help assuage investors’ concerns,”says Leonid Delitsyn from asset management firm Finam Global. “This move aims to mitigate risks for potential buyers of MegaFon shares. It is one thing to buy into a Russian company, but a different thing to deal with a man who knows this business, has relevant management experience and is capable of protecting investors’ interests,” Mr Delitsyn said. “It is more than a simple image-making move, because we can’t say he will be an ordinary board member. Naturally, he will have access to certain information, and he’ll have some influence on decision-making.”

IN THIS ISSUE OPINION

IORSH

As Moscow drops the ban on British beef and lamb, British meat producers face tough competition to attract Russian consumers.

Russia will not back either side in the Syrian civil war but it will continue to honour arms contracts with President Bashar Assad's regime, according to Prime Minister Dmitry Medvedev. “Despite popular belief, Russia supports neither the Assad regime nor the opposition. We’re neutral,” Mr Medvedev told France Presse and Le Figaro. Russia was bound by law to honour existing arms contracts with the Syrian government. “The deliveries we’ve made are of weapons for defence against foreign aggression,” he said. Russia would stop arms sales if they were banned by international sanctions. The United States has accused Russia of sending attack helicopters to Syria, and last month Turkey intercepted a plane that it said was carrying munitions to the Syrian government. The Moscow Times

European choice Bitter fruit from EU tree leaves a nasty taste TURN TO PAGE 6

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Adjusting to the Magnitsky Act http://rbth.ru/20233

Policing Illegal traders are targeted

Shoigu takes command with armed forces at a crossroads

Cossacks help tackle crime on the streets Cossacks are helping the police by taking part in a campaign against illegal traders in Moscow. Their only reward is a free travel card. SEMYON KVASHA

conscription force and its future, most likely as a professional one. Mr Serdyukov, who became defence minister in 2007, was responsible for carrying out major reforms that were to transform the Soviet-era military into a more modern fighting force. Russia is one of the few G20 countries with a conscription army, though reforms under Mr Serdyukov reduced obligatory service from two years to one. He also reduced the size of the army considerably, making painful cuts to ranks of middle officers and generals, and simplified a tangled bureaucracy. Dramatic increases to the military’s budget in recent years have helped provide troops with new weapons, raise salaries and improve housing. “In many ways the reforms Serdyukov launched, particularly the massive recapitalisation of Russia’s military equipment, are still in their infancy,” says Nicholas de Larrinaga, Europe editor at Jane’s Defence Weekly. Mr Shoigu is the first defence minister in more than a decade to hold the rank of general.Widely respected and popular, he served as emergency situations minister from 1994 until earlier this year, when he was appointed governor of the Moscow region. “Shoigu comes with a reputation as a strong administrator, but his position on reform is less clear,” says De Larrinaga. Mr Khramchikhin predicts Mr Shoigu will adopt a policy of “trial and error” because he has no military philosophy to guide him. James Nixey, an analyst at

Mr Shoigu is the first defence minister in more than a decade to hold the rank of general Whatever he does, Mr Shoigu must deal with an industry that has failed to keep up with the West ahead with reforms initiated under Mr Serdyukov, also a Putin appointee: “It is likely that Shoigu will continue where Serdyukov left off on reform, as Putin has considerable political capital invested in improving the military,” he says. However, Mr Shoigu fired General Staff chief Nikolai Makarov, a Serdyukov ally, and replaced him withValery Gerasimov, an opponent of the Serdyukov reforms. This may indicate that Mr Shoigu will try to undo at least part of his predecessor’s legacy. Whatever Mr Shoigu does, he will have to face the reality of dealing with a defence industry that has failed

Rising up the ranks: Mr Shoigu, top, replaces Mr Serdyukov as defence minister

Anatoly Serdyukov was widely loathed among active servicemen, who regarded him as a hostile outsider hellbent on outsourcing and gutting the system. Soldiers and officers mocked his background in the furniture business and as a tax official. Mr Serdyukov failed to end the vicious, institutionalised practice of “hazing”new conscripts, and the military has also been embarrassed by a string of deadly fires at weapons depots. However, it was

a corruption scandal that eventually brought about Mr Serdyukov’s political demise after six years in the post. Last month, investigators opened five criminal cases in connection with allegedly illegal sales of military property, including sanatoriums, guesthouses and land worth $95.5m (£60m), by Oboronservis, a firm chaired by Mr Serdyukov until last year. This month, police detained a businessman on suspicion of soliciting a three-million rouble bribe to “speed up” a deal for the sale of Oboronservis property in the Moscow region. Mr Putin indicated that the embezzlement scandal around Oboronservis was the main reason for Mr Serdyukov’s dismissal from his post, although pundits say that conflicts with Putin allies and other law enforcement offi-

CAREER: Mr Shoigu became popular when, as minister for emergency situations, he attended every fire or flood over an eight-year period to meet the people affected. Six months ago he became the Moscow Region governor.

The post of defence minister must be filled by a person who will be able to augment the positive results achieved in the armed forces’ dynamic development, and to guarantee the fulfilment of the state defence order and of the grandiose plans to modernise the armed forces."

cials played a role as well. “Nobody I asked doubted for a second that removing Serdyukov was the correct and sound decision – 100pc of respondents [agreed with the decision],” Grigory Pru-

tyan, an active-duty military doctor, wrote on his blog on Ekho Moskvy’s website. However, according to Mr Nixey, Mr Serdyukov was not known to be any more corrupt than other ministers.

2000 Becomes co-chairman of the United Russia party. He also leads the evacuation and subsequent reconstruction of the flooded city of Lensk.

2003 Awarded the military rank of army general, and collects many other honorary titles including the Order of St Andrew the Apostle.

2012 Appointed Moscow Region governor by Mr Putin in May after his candidacy was unanimously approved by the Moscow Region Duma.

2012 After four months as governor, appointed defence minister, replacing Anatoly Serdyukov, a former furniture store executive.

Serdyukov scandal

CURRICULUM VITAE

Sergei Shoigu BIRTHPLACE: TUVA (SOUTH SIBERIA)

IN HIS OWN WORDS

Vladimir Putin PRESIDENT OF THE RUSSIAN FEDERATION

AGE: 57 RANK: ARMY GENERAL

TIMELINE 1991 Mr Shoigu becomes head of the Rescue Corps, which was then given more responsibilities and later renamed the Ministry of Emergency Situations.

1999 Working as minister of emergency situations, he is presented with Russia’s most prestigious state award: Hero of the Russian Federation.

A squad of more than 600 Cossacks is helping police by targeting illegal traders on the streets of Moscow. They will focus on Tverskaya Street, Belorussky Railway Station Square and the Mayakovskaya underground station area, where unauthorised demonstrations are often held. “There are always peddlers selling flowers, SIM cards, glasses and clothes there. As we move towards the new year, it will be firecrackers and toys,” Andrei Kuleshov, deputy head of Tverskoi neighbourhood, told Izvestia: He said the central district would follow the practice in the south-eastern district, where Cossacks have assisted the Interior Ministry, the anti-drugs police and even the Federal Penitentiary Service for some time. On November 13, Nikolai Komarovsky, adviser to the committee for Cossack affairs, told Izvestia that“Cossack police squads”in excess of 600 officers would begin patrols of the city’s main streets, which are said to be teeming with illegal traders. Gennady Kolesnikov, the deputy head of the Central Cossack Society, said he expected that Cossacks would also soon be given powers to address the problem of motorists who park their cars illegally. The Cossacks will wear special armbands and carry identication certificates just like any other volunteer patrolmen. However, they will be more conspicuous as they are permitted to patrol in their traditional blue uniforms with red stripes on their trousers. They cannot carry any weapons, and have no right to detain or escort people to a local police station. Like the police community support officers (PCSOs) in the UK, all they can do is reason with offenders in an attempt to persuade them to stop their illegal activities and call the police should further action be needed. But while PCSOs are paid for their

ITAR-TASS

CONTINUED FROM PAGE 1

to keep up with the West. “Much [of the military’s] equipment stocks remain aged and out of date, while the country’s defence industry is inefficient and has suffered from a lack of investment,” says De Larrinaga. “It is incapable of matching the technologies produced in the West.” Mr Serdyukov was heavily criticised by Russia’s powerful defence industry for proposing that the military buy more foreign-made weapons, including Frenchbuilt Mistral amphibious assault ships and German tanks. “ Like Serdyukov, Shoigu is not going to buy old equipment,”says Igor Korotchenko, head of the Defence Ministry’s public advisory council, adding that Mr Shoigu would continue to buy limited amounts of foreign equipment for experimentation and to spur domestic manufacturers. During his presidential campaign in February, Mr Putin announced that Russia’s armed forces would receive more than 400 ballistic missiles, eight submarines and more than 2,300 tanks over the next decade.

REUTERS/VOSTOCK-PHOTO

RUSSIA NOW

Chatham House, believes Mr Shoigu might look to build a large, Soviet-style military, given his fierce loyalty to President Vladimir Putin – who has often bemoaned the loss of the Soviet Union’s “great power”status.“Clearly, there is a sort of tension between the need to be a great, large force versus a modern, technologically equipped force that is capable of dealing with current security issues,” he says. But De Larrinaga thinks that Mr Shoigu will press

History men: Cossacks may soon enforce parking laws

work, Cossacks do the work voluntarily, with their only compensation being a free monthly travel card. The horses, sabres and whips, with which Cossacks are famously associated from the days of tsarist Russia, are not permitted on patrols. Historically, the Cossacks were a privileged military social class in the Russian Empire. They cultivated their land and served in the army. As it was their mission to protect the nation’s borders, they mainly settled along southern and eastern fringes of the empire. In the early 20th century, Cossacks were used by the tsar to quell riots and crush attempted revolutions. After the Communist revolution in 1917, most of the Cossacks revolted against the new Soviet regime and were virtually extinguished as a class. But now their numerous descendants in Russia are trying to preserve and recreate their history. In the past year, there have been a number of controversies as a result of Cossacks attempting to champion public morality in both St Petersburg and Moscow, areas that were never traditionally Cossack regions. They disrupted exhibitions and protested against what they assumed to be frivolous stage productions. Many regard the new Cossacks as a subculture, a form of role-playing. Traditionally, membership of the Cossack class was, with very rare exceptions, hereditary. These days, it is open to newcomers and the group often attracts nationalists.

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Legislation Groups dispute legitimacy of new ruling

OPINION

Anger over law calling NGOs foreign agents

History proves the need for collective leadership

YULIA PONOMAREVA RUSSIA NOW

Amendments to the law on non-governmental organisations came into effect earlier this month. They oblige foreign-funded non-governmental organisations (NGOs) engaged in any political activity to declare themselves as“foreign agents”,an expression synonymous with the word “spy”. The law also requires NGOs to be inspected and audited more frequently – even at the request of an individual. They must now also report on their expenses every quarter and their activities every six months, instead of submitting annual reports as previously. Irina Yarovaya of United Russia, who heads the AntiCorruption and Security Committee in the State Duma, is a sponsor of the legislation. She says: “The law on NGOs corresponds with the law on political parties (political parties are prohibited from receiving funding from abroad) and guarantees against illegal political interaction.” Only organisations connected with politics, such as human rights organisations, will be affected by the law,

but it is estimated that it could be applied to 1,000 of the 220,000 NGOs operating in Russia. Failure by the organisations to comply with the new law could result in fines of up to 500,000 roubles (£10,000), sentences of up to four years and termination of operations for up to six months. Despite this, many NGOs have publicly stated that they are refusing to register as “foreign agents”with the Justice Ministry and are prepared to defend themselves

Failure to comply could result in fines of up to £10,000, sentences of up to four years and termination of operations for up to six months in court. Oleg Orlov, a member of the board of the Memorial human rights centre, argues: “Officials and law enforcement agents would shy away from us if we are labelled as a foreign agent”. He added that the label could also complicate human rights activists’ access to penal colonies, police stations and military garrisons. A survey conducted by the Levada Centre in September 2012 showed that 62pc of

Russians perceived the expression“foreign agent”negatively, and 39pc of those polled would define it as meaning “a spy”. The new regulations were brought up at President Vladimir Putin’s most recent meeting with the Presidential Council on Human Rights earlier this month, in which he reiterated that “foreign influence on our home politics should not be allowed”. Mikhail Fedotov, head of the Presidential Council on Human Rights, who has repeatedly pointed out the shortcomings of the new legislation, suggested revisiting the law. He said: “This law will either not be applied in practice at all before it is revamped, or the first attempts to apply it will cause a big political scandal and legal problems – it will come into conflict with the rest of the legislation, including the Constitution and the Civil Code. “If the authorities want to fine an organisation or to suspend its activity, then they can do it. But they won’t, they’re not crazy.” Mr Fedotov added that the Human Rights Council would draft a federal law on amending the new legislation. But Ms Yarovaya said: “It is premature to speak of possible revision of the law before we see how it works in practice.”

DIPLOMAT

Legal challenge: critics say the State Duma legislation is ambiguous and may be unworkable

Russia’s Civic Chamber gave a highly critical evaluation of the bill in September, which its authors say was not taken into account. No consultations were held with public organisations. “I haven’t seen anything more absurd and harmful to the state,”saidYelena Lukyanova, director of the Institute for Monitoring of the Efficiency of Law Enforcement of the Civic Chamber. Ms Lukyanova also noted that one of the biggest shortcomings of the law was that it did not offer a clear and unambiguous definition of what it means by NGOs engaged in “political activity”. Analysts say the clampdown on NGOs could be viewed as a reaction to the protests against the allegedly rigged elections that broke out in Russia last winter. “NGO shelp restrict law-

IN THEIR OWN WORDS

Irina Yarovaya

Elena Panfilova

HEAD OF ANTI-CORRUPTION AND SECURITY COMMITTEE IN THE STATE DUMA

DIRECTOR OF TRANSPARENCY INTERNATIONAL RUSSIA

People should understand who does politics in Russia using money received from overseas. Russian law prohibits funding political parties from abroad. The law on NGOs corresponds with the law and guarantees against illegal political interaction.

This law spurs inequality among public organisations and makes us acknowledge that our activity, which has always been meant to benefit the Russian Federation and its people, is actually carried out in the interests of other states.

lessness in this country, for example by reporting vote fraud,”said Dmitry Oreshkin, an independent political analyst and former member of the Presidential Council on Human Rights, who walked out of it in the wake

of the election campaign. Another problem for some NGOs is the generous donations they receive from American governmental organisations, especially USAID, which recently closed its offices in Russia.

Better cities Activists are defying the bureaucrats by taking direct action to create safer and greener streets

VLADIMIR YERKOVICH SPECIAL TO RUSSIA NOW

A new generation of Russian street artists is making streets safer and more pleasant by creating zebra crossings and cycle routes and installing benches rather than waiting for local authorities to act. The movement is known as “Partizaning”, from the Russian word partizan, which means guerrilla. Activists focus on almost anything that improves the urban environment for resi-

dents – be it zebra crossings, road signs, bike routes, or fixing pavements and public benches. The idea is the brainchild of Anton Make and Igor Ponosov. It emerged when Mr Make drew up a map of potential cycling routes in Moscow. The Russian capital lags behind other European cities when it comes to provision for cyclists. When he developed the map electronically and put it online, he attracted media attention, and the concept began to gain popularity. Partizaning activists often disguise themselves as city workers when they go about their work.Their public-spir-

ited efforts are not always appreciated, though. Benches have frequently been either smashed or stolen and road signs are often removed. But there have been positive outcomes, too. A few days after an activist had painted a zebra crossing on a Moscow street, municipal workers turned up to repaint it officially and put up the necessary road signs.“We want our activities to show people that they can change the world by themselves. Don’t sit waiting until the penpushers finally get around to it,” said Mr Ponosov. The activists carry out their own research to find out what facilities people feel are

DIDIER COURBOT

The urban guerrillas who paint their own zebra crossings A new movement has taken the battle for a better urban environment to the streets, where officials are often slow to make improvements.

Road sense: a Partizaning activist paints an illegal crossing

lacking in their area. They do this by putting up mailboxes around the city for people to drop suggestions into, talking to people in the communal courtyards of their apartment blocks, and through internet campaigns. Mr Ponosov discovered that many people do not want benches put up near their properties because they tend to attract alcoholics, homeless people and noisy youngsters. Residents often remove benches put up by

the authorities. “Right now, we’re working on setting up special areas for those who want to drink in public places. We could put up benches, sandboxes for their cigarette stubs and waste bins for the bottles,” he said. There is no shortage of ideas among the Partizaning fraternity. More often, there is a shortage of time and resources, their work being financed either by the activists themselves or by using funds collected from

people who are sympathetic to their cause. The pair have set up the website www.partizaning. org, where they write about the results of Partizaning, share their experiences and discuss similar projects in other countries. “In western Europe there is so-called ‘tactical urbanism’, which involves a range of designers, artists, architects and so on. Their primary focus is on visual appearance, while ours is on functionality. Their projects are more attractive and polished – ours are more marginal,” said Mr Ponsorov. These public-spirited activities are, however, still against the law; the activists face penalties – for example, a 1,500 rouble (£30) fine – for painting a zebra crossing. Partizaning has spread beyond Moscow to St Petersburg, Novosibirsk and other urban centres. Some say the anarchic nature of Partizaning will prevent it from ever becoming a serious influence on life in the city. But its adherents are hoping to prove the sceptics wrong.

Space Glonass system to operate for at least 15 more years but space agency fears long-term funding is under threat

New lease of life for navigation satellites The Russian global satellite system’s short-term future seems bright, but it may face competition from new surface-based projects. IVAN CHEREBKO IZVESTIA

A draft statement from the space agency Roscosmos has reaffirmed Russia’s commitment to maintaining its Glonass (Global Satellite Navigation System) for at least another 15 years. Prepared on the instructions of a working group set up by Deputy Prime Minister Vladislav Surkov, this is in accordance

with International Civil Aviation Organisation (ICAO) Standards and Recommended Practices. The Roscosmos chief Vladimir Popovkin reminded the group that Russia had promised to maintain Glonass for 15 years back in 1996. However, that promise was not kept, since funding for the replacement satellite fleet was irregular. By 2001, only six operational satellites remained in orbit, instead of the 24 units required for a fully fledged global service. The future of Glonass looks relatively safe for the

next few years. Today there are 31 satellites in orbit: 24 are being used for operational purposes, two are undergoing maintenance, four are in reserve and one in test mode. Three more satellites are in reserve on the ground and scheduled for launch in the first half of next year. But Roscosmos is worried about long-term funding. “The funding proposed by the Ministry of Finance will lead to the deterioration of the Glonass orbital fleet (to 10 satellites by 2016–2018), as well as to delays with deployment of the new

lobal development processes are going through a transition phase, and so are international relations. What we may be witnessing now is yet another change of epochs. This change also marks the completion of processes of various durations – from the Cold War and its intellectual and geostrategic momentum to the 500-yearlong domination of the West in global politics, economics and finance. What is happening now h a s c l e a r c a u s e s . We shouldn’t panic when trying to respond to the current developments. We need to have a cold-eyed analysis in a broader historical context making use of the categories going beyond the narrow framework of the ideological discourse of the Cold War. History didn’t start in 1945, and neither did international relations. We can draw some really reassuring conclusions from this broader unbiased perspective and identify the real potential for convergence and synthesis in North Atlantic politics. Seeing things in a historical perspective is not just useful, but often imperative. Upsetting the European balance, which had secured peace in Europe for more than 40 years, the Crimean War started the countdown for the First World War and the tragedies that occurred in Europe and the world throughout the 20th century. It paved the way for the aggressive nationalistic mutual demonisation of the leading European nations as an excuse for not only the war, but also the subsequent humiliation of the loser, including its territorial partition. Russia was followed by Denmark, Austria, France and, finally, Germany, which caused a collapse of the European and world order. Karl Jaspers wrote in the middle of the 20th century that there could be two options for the world to continue: either a global empire or a world order. The developments of the past two decades make it clear that the former option is impossible, which makes the latter the only one worth pursuing. History also shows that we shouldn’t take what we have for granted, especially the United Nations, which was quite wisely established to balance our multipolar world. The bipolar confrontation became a time warp. We can’t tear it all down to the ground the way Bolsheviks and Puritan fanatics before them wanted to; to build a whole new world from scratch while denying others their right of salvage. The question is how the UN has managed to adapt to reality. However, the fundamental health of the postwar adjustment shouldn’t be questioned. This includes the principles of the UN Charter and international rule of law. The main feature of the current epoch is the variety of scenarios, according to which things can develop, and the lack of definiteness, hence the need for diplomatic instruments to pursue flexibility. There are no more reasons to have the cumbersome military and political alliances of the past. A network of multivector diplomacy is a good alternative. It has been Russia’s official strategy since

AFP/EASTNEWS

NGOs are preparing to challenge in court new legislation that threatens to damage their reputation and paralyse their work in Russia.

Alexander Yakovenko

Glonass-К satellites,” Mr Popovkin wrote in a letter to President Vladimir Putin in August this year. Insufficient federal funding for Glonass is not the only threat to the satellite fleet. A bureaucratic struggle is under way for a revision of the 2012–2020 Glonass federal programme. Aleksandr Gurko, head of the non-profit partnership Agency for Development and Use of Navigation Technology, NP Glonass, has proposed rewriting the programme to win more money for the implementation of surface-

based telemetric applications. If this was approved, less money would then be available for the space-based segment. Most significantly, Mr Surkov views Mr Gurko’s initiative as worthy of attention and has already ordered amendments to the federal programme to be drafted. Securing Russia’s commitment to maintaining Glonass at the required level benefits Roscosmos and Mr Popovkin: it effectively guarantees continued funding for the programme. It is not a coincidence that Mr Popovkin initiated this statement rath-

er than the Ministry of Transport or Rosaviatsia, the Federal Air Transport Agency – both of which are more closely tied to the ICAO. Civil aviation expert Semyon Belgorodsky said the shelf life of the current Glonass-М satellites had turned out to be longer than that of the satellites used in the Nineties – seven years compared to three. Consequently, the promise given to the international community to maintain the satellite fleet has a much higher chance of being kept this time around.

the Foreign Policy Concept was adopted in July 2008. Since then, this idea has gained public support, including in the United States and the UK. An essential common denominator is for all countries to make development challenges their chief priority. Everyone agrees that sustainable socioeconomic (as well as other) development is a key foreign policy resource. It should become a rallying principle, because unlike in the colonial epoch, global development can’t remain a zerosum game. The new challenges and threats emphasise the need for bringing development levels closer, the more so because the growth potential of large dynamic developing economies and ordinary developing economies is to become the main source of the economic revival of the industrially developed nations. To effectively address the insecurity issue, one needs to overcome the downturn and restore its paying capacity. Globalisation (and Gordon Brown was speaking about the threat of de-globalisation) calls for a new level of understanding. So far, unfortunately, it has addressed challenges in the same way empires did in the past, namely, it has exploited development potential in a zero-sum game. Only“capitalintense”social groups became winners, which impaired social integrity. Incomes on investments were essentially removed from the country, disregarding national devel-

There are no more reasons to have the cumbersome military and political alliances of the past

Foreign policies should be compatible with the interests of the international community opment priorities. It appears that this globalisation pattern became one of the reasons behind the current crisis in the West, the kind of crisis that virtually eliminated the middle class in one European country. The “new” players will get what they want sooner or later, albeit based on their own development progress and benefiting from other nations’ development experience. A challenge for “old” players is how to formulate their foreign policy objectives in a way for them to be compatible with the interests of the international community as a whole. This would be possible if all nations were making concerted efforts to tackle the entire range of international problems, including the form of collective leadership of the leading nations of the world. This mutual engagement envisions the phasing down of unilateral response, let alone forceful response. The article is based on a speech given at the recent conference Global Power Shifts in Ditchley Park.

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

Moscow – the places that inspired writers and poets We visit the city haunts immortalised in literature

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December 18

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Coal miners: sticking to their helmets http://rbth.ru/18905

Norilsk A Russia Now correspondent visits a Norilsk Nickel mine beyond the Arctic Circle for a taste of life in the tunnels nearly a mile below ground

Polar city: Norilsk was built in the Thirties so that nickel and copper could be mined for the defence industry

Deep underground, dinosaurs roam Every day, 900 miners extract 10,000 tons of ore from the Taymyrsky mine, which extends 1,300 metres below ground.

Copper: an ancient history

ANTON MAKHROV RUSSIA NOW

In preparation for a trip down the mine, I get up at 7am when it is still pitch black outside, and drink two cups of strong tea. I then climb into whatever warm clothes I have brought with me – it’s -28C outside. On approaching the Taymyrsky mine’s administrative building, I see the first Martian artefact: shrouded in the pre-dawn darkness is the menacing bulk of a machine with wheels three feet high and a huge scoop attached to the end of its iron, brontasaurus-like nose. It looks heavy and threatening. I ask Rostislav, a Norilsk Nickel employee who is accompanying me, what kind of military-grade equipment this is.“It’s the underground loader made by Atlas Copco, a loading and delivery machine with a capacity of 14 tons,” he replies. I learn later on that Norilsk miners regularly hold underground slalom races driving those machines, and regret that I didn’t have a chance to see it with my own eyes: a rodeo on 25-ton, 400hp dinosaurs must be spectacular. After a meeting with the mine’s director, Sergei Gorbachev, I prepare to enter the mine by putting on a full miner’s outfit, with a head torch and a 2lb accumulator over my shoulder. The accumulators have built-in microchips that count each miner as they enter the mine. “Each click is one man going underground,”explains the mine’s chief production engineer, Aleksei Bylkov. “If a person is missing at the end of a shift, we will look for them; we will shut the whole mine down.” With the miners, I march along in single file through a long underground corridor linking the administrative and recreation building with the mine itself, and enter the anteroom of an elevator shaft. A cage behind the lattice doors will take us almost one mile below ground. While waiting, Rostislav points to a row of sinks lining the wall and says: “Go ahead, try it.” I turn the tap and a reddish-brown liquid starts dripping. The mine water looks unappealing, to put it mildly. “Try it,” Rostislav repeats. It turns out this is not rusty water after all – it’s actually tea. The miners

between 1,200C and 1,600C; the metal resembles volcanic lava at these temperatures. Fire-refining is the next stage, followed by casting liquid copper into moulds. The cooled copper plates are brought to the cell room, where they are placed in tubs with a blue-green electrolyte fluid. After a few days of “bathing” in a sulphuric acid solution, copper plates are ready for the customer. The mud that remains after electrolysis is not wasted, for it contains platinum, silver and other rare (and very expensive) metals.

same time, the engine roars into life, and the 14-ton scoop is ready to eat into the rock. The first bite is enough to chop off 10 tons of ore, but the miners want more. The machine growls and comes back for seconds. “It will now fill its scoop and travel to the ore chute. It doesn’t make sense for it to go back and forth halfempty: productivity would decline, and the equipment’s service life is limited.” Loading and delivery machines serve for four or five years on average. After that, they are written off and taken apart for spare parts. Some

of the Norilsk miners have been working here for 20 or 30 years, spending shift after shift underground. The mine operates 24 hours a day; there are three sevenhour shifts per day – with around 300 workers on each one. Up to 10,000 tons of rich ore is extracted with the machines every day. The ore is collected, prepared, crushed and lifted to the surface using a skip hoist. It is then sent to a concentrator, and then to nickel or copper smelters, depending on which metal prevails in the concentrate.“There’s almost no manual labour these

Rock sounds: powerful machines excavate the ore at the Taymyrsky mine. There is little manual labour

fill their flasks with it. I touch in my accumulator – it’s my ID for today’s trip – and enter the cage. The lift has an enormous platform which transports both the miners and their mining equipment down the shaft. It makes its first stop at the 1,050-metre (3,445ft) mark.

An underground city The mine is a web of tunnels, mining galleries, crosscuts and other underground passages with German names such as Querschlag (which means cross-cut) or Strecke (which means drift). They

cover hundreds of miles, with electric trains, mine buses and loaders running through the wider tunnels. The one we have stopped at is slightly below the ore body. There’s one more above it, which is mainly for ventilation, and one below. The tunnels are about four metres (13ft) wide and four metres high; they look like subway tunnels or underground nuclear missile control bunkers. Ours is quite well lit by powerful lamps that diligently disperse the darkness. Breathing is surprisingly easy at this level. Several minutes later, after

a bumpy ride down, we come to a stop.“We are now inside the ore body,” Aleksei explains. At this level, there are no lamps on the walls, our torches struggle to shed light through the darkness and the unusual smell is stifling.

Extracting the ore Miners have two main kinds of tools: drilling machinery and explosives. Special machines are used to drill narrow wells 50ft deep, in which the explosives are placed.The resulting cavities are deepened further. The ore itself is mined using the “room and pillar method”in which min-

ers use explosives to cut out “rooms” from tunnel walls with an area of five by five metres (16ft) and up to 20 metres (65ft) high. Then it’s the turn of the “brontosaurus”– the loading and delivery machine. “Sergei, show the guys how you do your job,”Aleksei tells one of his colleagues. Sergei exits the cabin and stands a couple of metres away from the machine.Then, with well-trained precision, he presses two buttons on the remote control and all the lights on the machine turn on, cutting through the mine’s pitch-black darkness. At the

Clocking off I start my ascent back to the surface from the 1,300 metre level below. My ears pop in the elevator on the way up, as do the miners’ ears. They ask me what it’s like to be a journalist and what sort of salaries are paid in Moscow. The miners smile discreetly upon hearing how much a reporter makes in the capital; as far as I could make out from the managers, the miners earn considerably more than I do. The elevator cage would take the miners back down the 1,300 metre mine again the next day. But I boarded a flight back to Moscow with a copper ball smelted from the ore extracted at the mine in my pocket as a souvenir. I still don’t know how I managed to get it past airport security. It must have been my good luck.

City where ‘argishing’ provides relief from pollution, the big chill and Stalin’s legacy The victims of Stalin’s Terror and the Gulag are respectfully remembered in Norilsk, but the city now has a more promising future. ANTON MAKHROV RUSSIA NOW

The Arctic city of Norilsk generally doesn’t get a good press from the Russian media. Journalists home in on its extreme climate, the state of the local environment and drag up the grimmest pages of the city’s history – the Stalin-era Gulags that were once on the outskirts of the city. Located about 3,000 miles from Moscow, the easiest way to travel to Norilsk is by plane. I flew there with local airline Nord Star in about four hours. On arriving, the captain announced without a hint of irony: “Our plane has landed at Alykel airport. The weather outside is pretty average, -28C.” For Norilsk in November, it really is pretty average weather.

was a simple wooden shack, with four rooms, crudely put together tables and chairs, a stove and kerosene lamps – the same as you might find in any village in Russia. The only difference is the snow and relentless ice outside the windows for the duration of the dreary Norilsk winter. The first house still stands in the middle of the city, as a reminder of the hardy souls who first settled here. The town does not try to cover up the fact that there was a Gulag camp here in the Thirties. Indeed, it shows a refreshing willingness to face up to its past. The local museum has a new exhibition dedicated to the camp’s victims and survivors and there is a memorial 'Norilsk's Golgotha' to the scores of local victims of Stalin’s Terror at the city’s first cemetery on Schmidt Hill. Norilsk’s industrial regions

are an environmental hazard. The lion’s share of criticism is directed at the giant Norilsk Nickel mining company w h o s e o p e r a t i o n s surround the city. However, environmental experts believe that the situation in the region is far from being an emergency.

The Soviet legacy The head of the company’s Polar Division,Yevgeny Muravyov, makes no attempt to conceal the difficulties the firm’s management faces. “You can’t even imagine the attitude to ecology in the Soviet period. Now we have to rake over that legacy,” he shrugs, as he begins to list the many initiatives to tackle pollution being carried out in the city. The most ambitious of these programmes aims to cut sulphur emissions radically. Mr Muravyov explains

that in other Russian or foreign plants, sulphur dioxide is recycled as sulphuric acid, which can then be sold. It’s woefully unprofitable, but essential for the environment. The problem with this approach in Norilsk is that transopity sulphuric acid from the city is simply impossible because of the city’s isolated geographical position. Norilsk is cut off from the main part of Russia for long periods of the year. Instead, the company has now invested in new technology designed to eliminate elemental sulphur from the flue emissions of the metallurgical plant, which will be installed at both of the company’s Norilsk facilities by 2019. The cost of installation runs into billions of dollars, but the new technology will reduce sulphur emissions in the flue gases by at least 95pc, which will cut sulphur diox-

IN FIGURES

History of the city Development of the Taimyr peninsular began in the 17th century but it didn’t have any residents until much later. The first house in Norilsk was built in 1921 by members of a geological survey team. It

10,000

124,000

minutes is the amount of daylight Norilsk residents can expect to enjoy on November 27 when it will be dark for most of the day.

tons per day of ore is extracted by miners whose average working life in the mine is between 20 and 30 years.

tons of nickel and 304,000 tons of copper were produced by Norilsk Nickel Polar Division last year.

ide emissions by four-anda-half times. Ironically, while air pollution is a massive problem for the people of Norilsk, the quality of its water is a cause of justifiable pride. Norilsk resident Marina says:“I visit my parents on the Russian mainland at least once a year, and every time I go I take them a new electric kettle as a present. They have to throw their kettle away once a year, because of the limescale. I’ve had my kettle for 10 years, and there’s no trace of limescale in it.” I take a cautious sip of the tap water – and to my surprise, there’s not a hint of the chlorine I’ve become used to during my life in Moscow. And the air here, even for asthmatics like me, seems OK, although, at -28C, I was lucky with the weather.

Getting through winter Medical experts believe that a mixture of long winters, a shortage of sunlight and environmental problems is very likely to cause depression.Yet the inhabitants of Norilsk don’t seem to smile any less than people in any other Russian cities. “So what’s the secret?” I ask Natalya Fedyanina, from the Northern City media

ITAR-TASS

Descent into darkness

PRESS PHOTO (2)

If Norilsk isn’t on Mars, then it must be nearby. Norilsk is one of the largest cities beyond the Arctic Circle. Like Mars in the John Carpenter film Ghosts of Mars, it was developed for mining – back in the Forties, the Soviet Union needed nickel and other metals for use in its defence industry.

Norilsk is known primarily for nickel; however, the first miners came here for a different, more commonly used metal. Back in the Bronze Age, people discovered copper in these mountains and started smelting it. The smelting process has changed dramatically since then, of course, but the raw material remained unchanged. Ore from Norilsk pits goes through several processing steps before turning into shiny plates of saleable copper. First, ore is granulated, dried and prepared for the Vanyukov furnaces, some of the world’s biggest. Copper is smelted at

days, unlike in the past,”says Mr Gorbachev. The work is still dangerous, though. Norilsk Nickel miners are mostly afraid of tunnel collapses. To reduce the risk, offloading wells are drilled that take on excess pressure and reduce the risk of collapse in cavity areas where people are working. After ore is removed, the cavities are filled with concrete. The fewer cavities there are underground, the safer it is for the miners.

Cold comfort: in January, temperatures can fall to -40C

company, an organisation which, aside from its main activities, provides Norilsk with a host of cultural activities, including exhibitions, festive events and even flash mobs. “Everyone agrees that winter is great; it is a time when we go hunting and fishing.

We go argishing every week,” she replies enthusiastically. “Argishing”, apparently, means going on a trip into the countryside for a pursuit such as fishing. The annual festival for Taimyr indigenous people marking the onset of the polar night is called “The Big Argish”.

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Energy Russia aims to win 15pc of atomic energy market with new fast reactors

Rosatom is to build a fast neutron reactor that it hopes will lead to a new wave of clean and commercially viable power stations. ANDREI REZNICHENKO SPECIAL TO RUSSIA NOW

Russia is attempting to eliminate nuclear waste through an unprecedented international partnership based on fast-reactor technology, which has the potential to win 10 to 15pc of the world's £150bn nuclear energy market in the near future. At the Central European Nuclear Industry Forum (Atomex) in Prague last month, Russia’s Rosatom nuclear agency signed a deal to build a fast-neutron nuclear reactor on Russian territory in co-operation with 13 Czech companies. It is called the SVBR-100 project.

Advantages of fastreactor technology Like all nuclear plants, fastreactor plants to not emit carbon dioxide. But conventional plants produce huge amounts of spent and irradiated fuel that has to be accumulated, stored and monitored as hazardous nuclear waste. This poses a radiological threat for thousands of years. The problem of what to do with it is a major headache for any country that uses atomic energy. The main advantage of fast-neutron reactor technology over traditional nuclear power plants is that it can utilise this waste product – irradiated or highly-enriched nuclear fuel – in the process of generating energy. Fast reactors also produce far less new nuclear waste than con-

ventional reactors, while some reactors, called fastbreeder reactors, can be used to produce an excess of plutonium, which can then be used in nuclear weapons or recycled to fuel the plant. According to Leonid Bolshov, professor at the Institute for the Safe Development of Nuclear Energy of the Russian Academy of Sciences, the development of fast nuclear reactors is essential to close the nuclear fuel cycle.“Fast reactors will help us solve one of the most pressing problems connected with atomic energy, and that is what to do with the

The main advantage of fast-neutron reactor technology over traditional nuclear plants is that it can use the waste product in the process of generating electricity atomic waste from nuclear power stations that are currently operational.” In Britain, the Nuclear Decommissioning Authority is considering plans to build two fast reactors at Sellafield in Cumbria to deal with the 120-ton plutonium waste problem there – the world’s largest stock of civilian plutonium. A feasibility study has already been submitted for building the plants, which, if given the go-ahead, could eradicate the British plutonium stockpile by around 2030. This would also have the benefit of generating electricity in the process.

All of the fast reactors tested in the world so far have been experimental models; Russia, the United States and France have considerable experience building and working with experimental fastneutron reactors. Russia’s BN-600 reactor, which was operational from 1980 until 2005 in the Ural Mountains, was the most advanced testing ground for the technology. It is now being replaced with the nearby BN800 reactor, which is close to completion and is based on more advanced development of the same technology.

Powerful sodium unit produces little waste The BN-600 reactor holds the world record for safely operating fast nuclear reactors that use sodium. It was also the world’s most powerful fast nuclear reactor with a sodium coolant; sodium in a fast reactor does not dissolve amid high levels of radiation. Thus the sodium coolant does not require regular drainage and removal of the dissolved absorber while being refuelled. Sodium also connects with radioactive iodine during non-volatile chemical reactions, which basically prevents its release from a normal power plant through ventilation systems. Consequently, the reactor produces a small amount of nuclear waste, which has a relatively minor effect on the surrounding environment when compared to the effects of waste produced by traditional reactors. In 2004, the developer Fedor Mitenkov was awarded the international Global

Energy Award for his contribution to fast reactors with the BN-600 project. The technology has been so successful that Rosatom subsidiary OKBM Afrikantov led the construction consortium for the China Experimental Fast Reactor outside Beijing, which went into operation in July 2011. During a recent visit to China by Vladimir Putin, Rosatom head Sergei Kiriyenko announced active discussions with Chinese partners on the construction of a fully functional (non-experimental) fast reactor in China, similar to the one being constructed in Russia, by Rosatom in the near future. Prof Bolshov is very excited about the potential of the planned new fast reactor:“We have learnt a great deal from our experience with the BN600. Russian nuclear scientists spent years perfecting the design of the reactor, and have learnt how to use sodium as a coolant. “If, after all the discussions and licensing is taken care of, the next project is given the green light, then it has the potential to become the first commercially viable high-powered fast-neutron reactor in the world,”he says.

Nuclear plants that can solve a 120-ton waste problem

Clean dream: the BN-800 fast-neutron reactor is under construction at the Beloyarsk nuclear power plant

The SVBR-100 reactor

Chain reaction was key ﬁnd Main circulation pumps

Control rods Steam generator modules

Monoblock chassis

Active zone of the monoblock

The coming years Research and design work on the SVBR-100 reactor will continue until the end of 2014, while operations proper are set to begin in 2017. Potentially, it could take 10 to 15pc of the global nuclear energy market for small and medium-sized power stations. “Fast reactors are the basis of our [global] competitiveness,” says Mr Kiri-

yenko. “These include the fast-neutron reactors that already exist at Beloyarsk, lead-bismuthic reactors, lead reactors and other liquid metal coolants. All of these technologies will allow us to utilise the U-238 [highly en-

riched] isotope in the fuel cycle, which is abundantly available in nature but is currently almost unused.” According to Mr Kiriyenko, the United States is a key partner for developing new types of reactors for the com-

pany. “We can conduct joint R&D to develop a new generation of nuclear reactors; such co-operation should go on between our two countries on a national level and not be restricted to just one company,” he said.

The history of bringing fast neutrons under control can be traced back to the Italian physicist Enrico Fermi who, in 1939, speculated that fast neutrons are released during the uranium fission process. He suggested that if the number of neutrons emitted exceeded the number of neutrons absorbed, then a chain reaction could begin. Experiments proved this theory to be correct. The first serious attempts to develop fast-reactor technology were made in the US with the Clinch River Breeder Reactor in 1970, which was closed in 1983. The Soviet Union developed fast-reactor technology as early as the Fifties, successfully testing a number of prototypes until the sodiumcooled BN-600 FBR went into operation at Beloyarsk in April 1980. Russia continues to develop its nuclear reactor technology, with the BN-800 and BN-1200 models currently under construction. The ultimate goal is to produce a commercially successful fast reactor.

Rosneft and BP to develop new Arctic oil fields Siberia in 2012, we will thus draw the line under the era of the mineral reserve base on oil discovered in Soviet days,”says Igor Plesovskikh, head of the Federal Agency for Subsoil Use. Two of the three fields are due to be sold next month. Russia needs to find new fields and almost certainly has large oil deposits in its unexplored Arctic and eastern Siberian territories that were largely ignored by the Soviet-era leaders. Russia is thought to have more unexploited oil fields than anywhere else on Earth (see chart, right). Russia needs to spend a total of 500 billion roubles (about £10bn) a year on geological exploration in order to maintain its production levels, says Mr Plesovskikh; currently it is only spending 180 billion roubles (about £3.6bn). No potential new reserves will be discovered in the short-to-medium

term, according to the Federal Minerals Agency. That is why the deal with BP is so important to Rosneft, which will lean heavily on its new partner to help with the complex prospecting work that it is not technically capable of performing. The nature of Russia’s oil and gas business was changing even before the RosneftBP deal. For most of the past two decades, Russian oil companies have upgraded Soviet facilities and improved efficiency. But as these Soviet-era wells run dry, analysts believe the Rosneft-BP deal is likely to be the catalyst for consolidation in the sector. More international companies are also expected to be invited to become involved in Russia’s formerly closed hydrocarbon sector. “The Rosneft and BP deal will be followed by more deals in the Russian oil sector as it enters the next phase of development,” says Ildar Davletshin, an oil and gas

IN FIGURES

World’s unexploited oil reserves

pc is the stake that BP holds in Rosneft, making it the second-largest shareholder after the state.

million barrels of oil are currently produced in Russia every day.

billion dollars was the value of the deal between Rosneft and BP, which has created the biggest listed oil company in the world.

CONTINUED FROM PAGE 1

Rosneft's head Igor Sechin and President Putin plan to float the oil company

analyst at Renaissance Capital. “Russia urgently needs to replace its depleting wells with new ones from much more challenging reservoirs in terms of their geology and geography. “The most likely partners

to co-operate with global majors will be state and state-backed companies. “At the same time it is anticipated that, while the state has increased its hold on the oil and gas sector, it will start to withdraw it again in a few

LONDON BLOG

Nord Stream: is the UK link a pipeline too far? Dmitry Loukashov SPECIAL TO RUSSIA NOW

n June, Gazprom announced initial plans to extend the Nord Stream gas pipeline; in October, it concluded in a preliminary study that the proposed Nord Stream extension was economically and technically feasible. The project would see the construction of two new lines, one going straight to the United Kingdom with a total annual capacity of 27.5 billion cubic metres (bcm). Gazprom’s CEO Alexei Miller has confirmed the in-

terest of the company’s UK partners in the project, and has hinted that a memorandum of understanding could be signed by January 31, 2013. The cost of the UK extension is estimated to be $16-$20bn (£10bn-£12.5bn). However, according to BP’s Statistical Review of World Energy, overall gas consumption in the UK has fallen steadily in recent years. In 2011, it was 80bcm, down 15pc from the previous year, and down sharply from the previous decade’s average of 94bcm. Preliminary data indicates an even larger decline in demand this year as a result of weak economic activ-

ity and, more interestingly, an increase of consumption of coal rather than gas. Falling consumption has, of course, led to a rapid drop in domestic gas production. However, the demand for gas imports is rising, reaching around 53bcm gross, 35bcm net in 2011. And it is likely that EU regulation and UK government policy will restrict the use of coal in power generation, which should increase demand for gas. If liquefied natural gas is bid away to other parts of the world, that too would increase the need for importing pipeline gas. Gazprom sold around

13bcm of natural gas to UK customers in 2011. Longterm contracts play an important role in Gazprom’s supply to European customers. However, the UK market is predominantly based on spot prices. As a result, Gazprom is not able to enjoy the substantial premiums on its UK sales (as opposed to oil-linked gas contracts) as it does in other markets. The company recently signed a three-year contract with Centrica, parent company of British Gas, to deliver 2.4bcm of natural gas per year. I believe that it is crucial to ensure there is demand for additional volumes of gas de-

livered via Nord Stream. In March this year, the media speculated that Gazprom was interested in buying a 50pc stake in Dong Energy’s gas-fired Severn Power station near Newport. However, further news about this development has not been forthcoming. Given the potentially weak demand for gas in the UK there is little room for additional supplies of Gazprom gas. The company has earned a reputation for high capital spending associated with ambitious projects, and Nord Stream is no exception. The construction of two additional lines would be highly cap-

ital intensive. The high costs of the project would also result in higher transit costs for Gazprom in the future (in the first quarter of 2012, Nord Stream transit costs were more than double that of Ukraine pipelines). The Nord Stream extension is clearly at a very early stage but, if approved, this ambitious project would be a massive commitment for Gazprom over the next few years. I’m not sure that the Nord Stream UK extension would add any shareholder value to Gazprom. Dmitry Loukashov is head of Oil & Gas atVTB Capital.

years’ time after Rosneft is added to the privatisation programme.” The Russian government plans to privatise Rosneft in 2013/14, depending on market conditions, First Deputy Prime Minister Igor Shuval-

ov told the media last month. “We have considered the sale of Rosneft’s shares, among others, for the coming year and 2014.We believe that it will be sold when the right time and opportunity arises,” Mr Shuvalov said.

GLOBAL RUSSIA BUSINESS CALENDAR ATOMEX 2012 THE IV INTERNATIONAL FORUM OF NUCLEAR INDUSTRY SUPPLIERS DECEMBER 12-14 EXPOCENTRE, MOSCOW

The forum is organised by the state atomic energy corporation Rosatom for nuclear industry suppliers as it implements a large-scale programme of building new reactors both in Russia and abroad. A massive order of equipment will be needed as well as services for vendors in power machine engineering, construction, installation, machinery and building materials. › http://www.atomeks.ru/en/ atomex2012

6TH ANNUAL RUSSIA & EURASIA TRADE & EXPORT FINANCE CONFERENCE FEBRUARY 5 BALTSCHUG KEMPINSKI, MOSCOW

Exporta returns to Moscow in February 2013 for the 6th Annual Russia & Eurasia Trade & Export Finance Conference. Speakers will discuss issues including WTO accession, financing priorities of corporates, opportunities offered by Nordic-Russia trade flows and assessing corporate risk in a challenging market. › http://www.exportagroup.com/

FIND MORE IN THE GLOBAL CALENDAR

at www.rbth.ru

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WHY THE EU HAS LOST THE RIGHT TO LECTURE US Dmitry Babich ANALYST

he heated debates in Britain around the country’s contribution to the EU budget are seen from a different angle in Russia. Before the current crisis, and especially in the last years of the Soviet Union the European Union (formerly known as the European Community) had a very positive image in all the lands to the east of Poland. For decades, talks about “European choice” were an important tool used by the pro-western intellectuals and the liberal media to lure Ukraine, Moldova and other post-Soviet states (including Russia) away from the muchmaligned and in fact rather mythical“Moscow’s control.” (This control was supposed to be embodied by the Soviet state until 1991 and by the perpetually demonised “Kremlin” later on.) Now it becomes clear that this black-and-white vision of Europe and “European spirit” is in fact simplified and misleading. “By their fruits ye shall know them,” says the Bible. If the tree of the European Union is so good, how could it bring forth such fruit? The latest events inside the EU, including the debt crisis in Greece and several other European countries, has made people question old Euro-centric assumptions. For example, Fyodor Lukyanov, editor-in-chief of Russia in Global Affairs magazine and a commentator for theVoice of Russia radio station, came up with a blunt question: does the “European choice” still exist for the post-Soviet countries? And is the much-publicised“European integration” still as positive a phenomenon for, say, Ukraine or Moldova as it was for Germany and France in the Fifties or, indeed, for Spain and Portugal in the Seventies? Let’s take the example of Spain and Portugal. The par-

Yevgeny Shestakov

ticipants in a recent IberianAmerican summit, held several days ago in the Spanish city of Cadiz, came to a stunning conclusion: modern EU member states, and Spain in particular, probably need the Brics countries (Brazil and Russia in the first place) probably even more than Brics needs Europe. This conclusion was based on statistics announced at the summit, which was attended by 18 Latin American countries, Spain, Portugal and Andorra. Despite the fact that Spain is the second

ANALYST

Although Spain is the second largest investor in Latin America, it was Spain who asked for help

IORSH

able level of independence and sometimes even a condescending attitude to Spain and Portugal. This applies not just to the presidents of Cuba and Venezuela, Raul Castro and Hugo Chavez, who are not in the habit of coming to IberianAmerican summits.This time the same is true about the president of Argentina, Cristina Fernández de Kirchner, who did not attend the summit in Cadiz because her doctors advised her not to overburden herself with transatlantic flights. So, she preferred the summits of Mercosur and Unasur – the Latin American variants of the“Eurasian Union”that the Russian president Vladimir Putin is trying to set up with the countries surrounding Russia. At the Cadiz summit, the Spanish hosts and their Por-

tuguese friends did not lecture their former colonies on freedom, democracy and elections. It is high time for the other countries of the EU to adopt the same attitude to their eastern neighbours – Belarus, Ukraine and Russia. After all, Belarus, for example, has no less reason to shrug off the criticism of its former European master, Poland, than Brazil has to shrug off any sign of a condescending attitude from Portugal, its Iberian“mother country.” And these words can be supported by figures. Numerically, Portugal and Belarus have roughly the same populations (about 10 million); both countries faced a financial crisis in 2011. But Belarus devalued its currency, took a loan of less than $3bn from Russia and managed to come through the crisis largely unscathed.

Portugal, where people had been buying apartments on borrowed money for decades, got a $97bn rescue package from the EU and the IMF and is now asking for more. The reason is simple: having surrendered its financial independence to the eurozone, Portugal cannot now devalue its currency, the euro. It can only borrow more money. Is this the “European choice”we were told so much about? Then we don’t need this choice. And we won’t tolerate any more lecturing. In the Nineties, when Russia had a debt problem with the EU countries, who banded together in the London Club of creditors, there were some grounds for this kind of lecturing approach. But the EU made its choice: it did not make any gifts to Russia; it did not write off a single penny when

Russia in fact abandoned its empire for the sake of those largely mythical “European values”. Now Russia is crediting some EU member states (including Cyprus, Ireland and some other insolvent “professors of democracy”). So, why should we be accepting condescending attitudes towards ourselves? The irony of history may set things right. And the multiethnic, impatient and pioneering “extensions” of Europe (formerly the US, now Latin America, Russia and the Eurasian mass of countries) can become better adapted to survival in the modern world – better certainly than the ageing, unapologetic and ultimately arrogant Old World. Dmitry Babich is a political analyst with theVoice of Russia radio station.

ISRAEL FACES THE NEW REALITY FYODOR LUKYANOV ANALYST

he sharp escalation of the Palestinian-Israeli conflict has been unfolding against a new political background. The security balance that used to exist in the Middle East is eroding fast. And Israel has found itself in the most unenviable position. After a series of wars, a system of formal and informal relationships has emerged in the region since the late Seventies. With American support, Israel made separate peace agreements with Egypt and Jordan, which broke through the all-out blockade of the Jewish state by its Arab neighbours.The United States, in turn, was building ties with the richest and most influential Arab countries, above all the Persian Gulf monarchies. While Washington’s allies and partners remained Israel’s adversaries, they didn’t do anything to upset that balance, keeping it in place. Turkey even established co-operation with the Israelis at the level of special services and military and technical exchanges. While the Palestinian question remained a bone of contention, after the collapse of the Soviet Union – which had been actively using it for geopolitical purposes – the Arab sponsors of the Palestinians preferred to keep the

IORSH

status quo. Especially as the Nineties“peace process”created the illusion of progress toward a settlement and respectable Arab countries could make do by paying lip service to it. Even Syria, Israel’s sworn enemy, was party to an unofficial non-aggression pact, though the occupied Golan Heights remained a ticking time bomb. Everything started falling apart with the advent of the 21st century. The peace process became deadlocked, which was manifested not only in the changing mood of Israeli citizens, who are

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ussia may withdraw from the New Start (Strategic Arms Reduction Treaty) it signed with the United States in Prague two years ago. This is not a hypothetical threat, but a very real scenario about which Sergei Ryabkov, the deputy foreign minister, warned this month. The documents signed in the Czech capital envisaged equal cuts by Moscow and Washington of deployed and non-deployed defence systems. The treaty was part of the“reset”of Russian-American relations. Moscow signed the New Start with a proviso that it could withdraw from the agreement if the US’s missile defence system posed a threat to Russia’s national interests. At the time, that proviso seemed an unnecessary precaution on Russia’s part. But not so now. Why does Moscow feel further disarmament initiatives are unacceptable? The most obvious reason is the continuing build-up of the American ballistic missile defence (BMD) system. According to the Russian military, there is no guarantee that this largescale missile defence system will not be targeted against Russian strategic arms. Unlike other joint initiatives with the West, such as the control over fissionable materials, or the Treaty on Conventional Armed Forces in Europe, where the obligations of the parties are sealed on paper, the US is only prepared to agree verbally on missile defence, although the issue affects Russia’s defence capability and calls for very specific guarantees. The White House says the US Congress would not vote for a written treaty with Moscow that imposes restrictions on the BMD system. Russia sees this as indirect proof that the US missile defence may be used against Russian strategic arms. The fewer warheads Russia has, the easier they can be neutralised by the missile defence system, Russian experts say. Against this backdrop, calls from international institutions for Moscow to further cut armaments defy common sense. Computer-assisted exercises to practise the interaction of Russian and Nato defences in the event of a missile threat from third countries were recently held in Germany. The common system proved to be highly effective in intercepting medium- and short-range missiles, according to Anatoly Antonov, the Russian deputy defence minister. But the results of the exercise have still not been confirmed by the US. No wonder, because if it admitted positive results, Washington would be hard pushed to explain why Europe has to turn down Moscow’s offer of creating a common missile defence system. Addressing a recent international conference in Moscow on nuclear weapons and international security in the 21st century, an American expert argued that continuing to disarm Russia would set a positive example to its nuclear neighbours – China, India and Pakistan. In theory, it would inspire them to start thinking about reducing their own arsenals. Do I really need to explain how Utopian that assumption is, especially if you consider that the simmering old conflicts in Asia and the Arab East are heating up again? Moscow is convinced that a new strand of the global arms race is about to start, if it has not started already. Western armies possess highprecision systems, missiles capable of moving at hyperspeeds making them almost

This black-andwhite vision of the European spirit is in fact simplified and misleading

largest investor in Latin American economies, it was the Spaniards who asked Latin America for help, and not vice versa. The Spanish daily El Pais provided some statistics in that regard: Spain, with its rampant unemployment and looming debt payments, can only be jealous of the trends in Latin American countries, where the number of people living below the poverty level has shrunk from 50pc to 30pc over the past decade and more than 50pc of the population is now middle class. While the Spanish and Portuguese economies show all signs of recession, the“big 20”of Latin America are expected to grow on average by 3.2pc this year and optimists believe growth could be as high as 4pc. No wonder that Latin American presidents show a remark-

WILL RUSSIA STOP THE NEXT START?

no longer voting for left-wing doves, but also in Palestine’s split into the West Bank ruled by the old-time Palestinian elite and Gaza, where Hamas calls the shots. Attempts by the US to stimulate a reorganisation of the Middle East have led to Iraq becoming a de facto Iranian backyard, an increase in general anxiety and to the worsening of the confrontation between Sunni and Shia. And when the Arab spring arrived, it turned out that the new sentiment of the masses did not involve a growing sympathy

Israel has been the target of scathing criticism by practically the entire global community for the West, America or Israel. Israel’s confidence in its own future was based on its image as a country that always resolves any problems by force thanks to its military advantage, its readiness to follow through no matter

what the cost and guarantees of international support, because the US automatically blocks any anti-Israel measures. Now all three of those premises have been called into question. The 2006 military campaign against Hizbollah in southern Lebanon didn’t bring Israel a decisive success. Its previous operation in Gaza, in 2009, was not a triumph either. Israel’s faith in its ability to deal with a crisis using armed force has been shaken. Plus, Israel has been the target of scathing criticism by practically the entire global community, including the EU, which it cannot ignore. Even the US is forced to apply pressure on the Jewish state to put an end to violence; the best Washington can do is give its ally some more time. Israel’s outlook is even gloomier. The Palestinian question has become small change in the complicated reorganisation of the Middle East. The new Egyptian rulers aim to recast Cairo as the political capital of the Arab world. They will most likely dismantle the Camp David accords gradually and behave more assertively on the Palestinian front, claiming the role of the principal patron, as well as on the Syrian issue by promoting a regional solution there. However, Doha is trying to upstage Cairo on all of those matters. A visit by the Emir of Qatar to Gaza this month

THIS EIGHT-PAGE PULL-OUT IS PRODUCED AND PUBLISHED BY ROSSIYSKAYA GAZETA (RUSSIA), WHICH TAKES SOLE RESPONSIBILITY FOR THE CONTENTS. INTERNET ADDRESS WWW.RBTH.RU EMAIL UK@RBTH.RU TEL +7 (495) 775 3114 FAX +44 (20 3070 0020) ADDRESS 24 PRAVDY STR, BLDG 4, FLOOR 12, MOSCOW, RUSSIA, 125 993 EVGENY ABOV PUBLISHER ARTEM ZAGORODNOV EXECUTIVE EDITOR OLGA DMITRIEVA EDITOR (UK EDITION) ALEXANDRA GUZEVA ASSISTANT EDITOR SHAUNA MASSEY GUEST EDITOR (UK) PAUL CARROLL, SEAN HUGGINS SUBEDITORS (UK) PAVEL KOSHKIN ONLINE EDITOR ANDREY ZAITSEV HEAD OF PHOTO DEPT MILLA DOMOGATSKAYA HEAD OF PRE-PRINT DEPT ILYA OVCHARENKO LAYOUT E-PAPER VERSION OF THIS SUPPLEMENT IS AVAILABLE AT WWW.RBTH.RU

has prompted speculation that Hamas, formerly oriented toward Syria and Iran, has found a new sponsor – one that views itself as the herald of change in the Arab world and the leader of the crusade against the influence of the Shia. In general, Qatar has nothing against acting as the “core” of the Muslim Brotherhood movement that has already come to power in Egypt and is becoming increasingly active elsewhere. Tensions are rising in Jordan, where discontent is growing, seemingly also not without encouragement from the Gulf.Turkey has taken an outspoken anti-Israeli stance, too. While Washington has traditionally relied on Sunni regimes, they are turning Islamist one by one. Its unconditional support of Israel is becoming if not a burden then a restraint to its attempts to build a new system of relations in the region. Continuing the operation against the Palestinians threatens to leave Israel in total isolation, while a withdrawal, short of achieving an unequivocal result, would convince the Arabs that Israel isn’t what it used to be, encouraging them to turn up the pressure. Originally published in Rossiyskaya Gazeta

Fyodor Lukyanov is Editorin-Chief of Russia in Global Affairs

as effective as nuclear weapons. Russia has to react to these new threats. First Vice-Premier Dmitry Rogozin, who is in charge of the military-industrial complex, has cited some figures: Moscow will spend 20 trillion roubles on the procurement of new military hardware and a further three trillion to replenish its test bench fleet by 2020. The draft Russian budget for the coming years also earmarks hefty sums for defence. Meanwhile, spending on education, science and health care has been slashed as the Russian leadership considers defence spending so vital that it is ready to sacrifice the budget’s social items. Rogozin suggested that corruption in the military-industrial complex be equated to high treason. A retired Russian military commander recalled how in Soviet times, he distributed warheads required for a preemptive strike on the potential enemy. Everybody at the Ministry of Defence knew the rules of the game: if experts said the Soviets needed no more than eight to 10 nuclear missiles to hypothetically wipe out New York, the figure fixed on paper would be 10 times higher: that is, not eight but 80 missiles. The Pentagon faced a similar problem in its own planning. A report by Global Zero, an international organisation that analyses surplus weapons in Russia and the US, says that for America to counter the nuclear threat from Russia, it should allocate 80 warheads for the hypothetical destruction of

Moscow is convinced that a new strand of the global arms race is about to start

Arms reduction talks should be on a multilateral basis with all nuclear power countries Moscow. Experts say that this is 10 times the number needed but it would assure parity with the Russian nuclear potential. The authors of Global Zero believe that the nuclear weapons reduction parameters envisaged under New Start could easily be increased without damaging the defence capabilities of the two sides. Russia, however, takes a more guarded view of such international initiatives. While not renouncing further nuclear arms reduction talks, Russia thinks they should only be conducted on a multilateral basis and should involve all countries with nuclear programmes, and only after nuclear missile defence guarantees are received from the Americans and all the New Start provisions are implemented. For now, the Kremlin is expected to disarm even as the US missile defence system is being strengthened and new nuclear countries are emerging and building up their arsenals. All of these factors are not conducive to Moscow’s participation in the struggle for a nuclear zero. Unless the West convinces Russia by signing concrete agreements that the building of BMD does not threaten its security, Moscow will start making adjustments to the New Start agreement, arguing that the wording of the document no longer meets the needs of the times. Yevgeny Shestakov is editor of the international politics desk at Rossiyskaya Gazeta.

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Culture

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Russian Art Week with Academia Rossica London auction houses offer classic masterpieces worth millions as galleries showcase the nation’s best contemporary works Lyudmila Konstantinova with her daughters next to her work exhibited at the Saatchi Gallery

EXHIBITION'S CALENDAR

Spotlight falls on the modern masters BREAKING THE ICE: MOSCOW ART 1960-1980S UNTIL FEBRUARY 24, 2013 SAATCHI GALLERY

Sportsmen, a set of 10 lithographs made in 1923 for an electro-mechanical puppet performance in Germany based on the Futurist opera Victory Over the Sun. It also features abstracts by Mstislav Dobuzhinsky and Alexander Benois.

photographs and Janis Avotins’ greyscale paintings. › www.saatchi-gallery.co.uk

ALEXEY KALLIMA: NEW WORKS UNTIL DECEMBER 22, 2012 REGINA GALLERY

› www.aktis-gallery.co.uk

PRESS PHOTO (3)

GAIETY IS THE MOST OUTSTANDING FEATURE OF THE SOVIET UNION UNTIL MAY 5, 2013 SAATCHI GALLERY

A range of “non-conformist art” from late Soviet-era Russia with works by many of the most important artists who defied the enforced Socialist Realism, with around two-thirds of the work coming from the collection of Igor Tsukanov. › www.saatchi-gallery.co.uk

AVANT-GARDE TO NON-CONFORMISM: 20TH CENTURY RUSSIAN ÉMIGRÉ ART IRINA KORINA

UNTIL FEBRUARY 2, 2013 AKTIS GALLERY

Aktis Gallery’s exhibition begins with El Lissitsky’s

Meanwhile, masterpieces by classic Russian artists will be fetching small fortunes at the major London auction houses. Sotheby’s, closely followed by the MacDougall’s sale, are expected to make the most, followed by Christie’s and Bonham’s. Classic 19th-century and early 20th-century Russian paintings, tackling subjects away mysterious country”. ranging from the beauty of Coinciding with Russian Art the Russian landscape to its Week is the launch of an ex- folk history, are expected to hibition at the London be the most sought after. Among them is an imposbranch of the Regina Gallery by the Chechen-born art- ing 11ft-long canvas by Rusist Alexey Kallima, called sian military artist Vasily Everything is for Sale, which Vereshchagin, Transport of takes an ironic glimpse at the the Wounded (Sotheby’s, esRussian consumer culture. timate £800,000-£1.2m); an The gallery has been trans- early Impressionist work by formed into a series of the avant-garde Mikhail Larshopfronts, kiosks and super- ionov, Une Journée de Mai (MacDougall’s, £900,000market shelves. Romilly Eveleigh, director £2m); Boris Kustodiev’s masof Regina London, said: terpiece The Coachman from “Kallima is one of the bright- the collection of the Nobel e s t , m o s t p r o m i s i n g Prize-winning scientist Peter painters in Russia today. His K a p i t z a ( C h r i s t i e ’s , works are in some of the most £1m-£1.5m); and the huge important collections in Rus- 1885 genre painting Fair sia and western collectors are from Vladimir Makovsky’s beginning to take interest in “Little Russia” series (Bonhis highly ambitious projects”. ham’s, £1.5m-£2m).

Celebrating creativity, from Fabergé to Futurism in parallel – Breaking the Ice: Moscow Art 1960-80s, showing non-conformist art from that period; and Gaiety is the Most Outstanding Feature of the Soviet Union: Art from Russia, showcasing 21st-century art (the title being a quote from Stalin).

While Russian masterpieces go under the hammer at auctions, the work of its contemporary artists is impressing collectors too. JULIA KARLYSHEVA SPECIAL TO RUSSIA NOW

Russian Art Week in London has traditionally been the preserve of elite collectors who flock to the auction houses in the hope of buying a classic masterpiece. But this year, the city is opening up art from Russia to wider audiences. Coinciding with the prestigious auction sales, exhibitions of contemporary Russian art will be displayed in galleries across London. Last week, the Saatchi Gallery opened two exhibitions of Russian art running

The exhibits offer Londoners a unique opportunity to see hundreds of diverse artworks The exhibits offer Londoners a unique chance to see hundreds of pieces, from the internationally acclaimed Ilya Kabakov and Oleg Tselkov to the rising young stars

Lyudmila Konstantinovna and Daniel Bragin; from the colourful surrealist prints of Dasha Shishkin, to the unsettlingly realistic photographs of Boris Mikhailov. “Their art is multifocal and transcendent, poetic and hypocritical, politicised and romantic,” says Dimitri Ozerkov, director of contemporary art at The Hermitage Museum in St Petersburg. As Russian art continues to attract interest in London, new galleries are popping up all over the city with the aim of making art more accessible to the ordinary art lover. One such gallery is ArtMost in Mayfair, founded by the Muscovite Yulia Nagy, who says there are still not enough Russian art events

outside auction weeks to cater for non-collectors. ArtMost has featured emerging artists from St Petersburg, while the latest display, which finished last week, introduced works from the acclaimed Russian film directors Andrey Tarkovsky

Western collectors are taking an interest in Kallima, one of the most promising painters in Russia and Sergei Parajanov. Ms Nagy said: “Contemporary Russian art deserves to be viewed as part of the global art movement, and not as an exotica from a far

This multi-discipline exhibition displays work by no fewer than 20 contemporary Russian artists, including Sergei Vasiliev, Lyudmila Konstantinova, and Nika Neelova. With a title taken from a 1935 speech by Stalin, this exhibition of modern Russian art includes Boris Mikailhov’s harrowing

As one of Russia’s most prolific and influential artists, Kallima’s highly developed canvases and works on paper derive from a technique many centuries old, yet his descriptions of the people and situations around him are deeply rooted in contemporary experience. Everything is for Sale is his latest series, and typically concentrates on one aspect of life in his home town of Moscow: the phenomenon of kiosks. › www.reginagallery.com

LONDON AUCTIONS

Making a wise investment William MacDougall MACDOUGALL’S

Russian art has been one of the strongest performing asset classes of the past 15 years, growing nearly 700pc from 1997 to 2012, even with a drop during the financial crisis. It has performed better than Russian oil prices or equities, and much stronger than US equities. At the same time, the downside risk of Russian art has been favourable. Russian equities fell 75pc peak-to-trough in the 2008 crisis and Moscow property around 50pc, yet Russian art fell only 30pc. A major reason was that collectors generally do not borrow to finance art purchases, so there was no additional collapse due to collateral being called in by lenders. Another factor is that Russian art surprisingly represents the Russian economy better than

the stock market. The latter is nearly all oil and banks, while collectors pay for art from all sorts of revenue sources, including even the sales of bread and toothpaste. Some analysts suggest that art suffers from illiquidity; yet while it may not be as liquid an asset as bluechip equities, it is more liquid than small companies and venture capital, where investors can be locked in for years. It is always possible to sell a painting within a few months. This week will see Russian art worth many millions sold at auctions, including ours, in London’s Russian Art Week, mostly to people from Moscow and Kiev. They will be making wise investments.

MacDougall’s Auctions was set up in 2004 to meet the demands of the burgeoning Russian art market in the UK. At present, it is the only fine art auction house to specialise in Russian art.

Theatre High-flying young director gives Chekhov’s classic drama a contemporary twist

BOOK REVIEW

The Seagull has landed: and it’s a play for today

Literary guide to a city of high culture, hard times and quirky modernism

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Chekhov’s lifelong day job was a physician and his plays often include a doctor. Matthew Kelly brings his TV presenter’s charm to an avuncular and sympathetic portrayal of Dorn. Communication, or the lack of it, is a central theme, and modern technology accentuates it. Arkadina’s frusAn intimate production of tration at being cut off from Chekhov’s play about youth, the oxygen of publicity is ageing and the desire for clear in her complaints about fame is showing at London’s the lack of mobile reception Southwark Playhouse. and her rage at being “trapped”without the Land PHOEBE TAPLIN SPECIAL TO RUSSIA NOW Rover. Without an audience, she is nothing.“Have you ever A 20-year-old London playseen me… without my makewright has rewritten Anton up?” she asks. Chekhov’s classic drama of “No. No one has”. dysfunction, The Seagull, for Sasha Waddell’s portrayal a 21st-century audience. In of the superficial and beau2010, Anya Reiss became the tiful actress, hanging on to youngest playwright to have youth and glory at all costs, had work professionally contrasts brilliantly with her staged in London, when her son’s brooding intensity. Konprize-winning Spur of the stantin, before his fateful Moment, which she wrote at final exit, symbolically drops 17, appeared at the Royal his phone in a glass of water Court Theatre. Presenting her and upends a jug on the keywith an Evening Standard board of his computer. award, actor Benedict CumAt the end, Nina, who has berbatch said she showed now become an actress, “obscenely early promise”. Modern times: Anya Reiss’s updated The Seagull is at Southwark Playhouse until December 1 struggles to remember a quoReiss feels the play has a lot of relevance today:“There come an actress. With South- cent of the TV show I’m a about his taxes. Glamorous tation or its author. Referare things about human na- wark Playhouse in the vaults Celebrity... Get me out of Arkadina glides in on design- ences to suicide, or attemptture that are timeless, so put- under London Bridge station, Here! The distinctively mod- er heels with a glass of rosé ed suicide, become nods, ting it in a modern context the actors have to work hard ern moments fit the emotion- while her neurotic son glow- mimed gestures, stammered was surprisingly easy to do.” to create rural peace while al structure. Flamboyantly ers from behind his laptop. beginnings and hesitations, The young people are bril- followed by silence. Her streamlined produc- trains thunder overhead. depressive Masha, in ladUnlike The Seagull’s many liantly fragile and the old are tion stays close to the spirit Lily James, who plays the convincingly exhausted. The doomed relationships, the of the play, the strong cast innocent and passionate stifled energy of Anthony pairing of Chekhov with performing in an intimate Nina, is a rising star who re- Aspects of human Howell’s self-deprecating Tri- Reiss is an unexpectedly good space with a minimal set pro- cently appeared in the TV pe- nature are timeless, match: the observant 19thgorin is mesmerising. ducing a powerful effect. riod drama Downton Abbey. so putting them in a Replacing snuff with can- century Russian, just emA famous actress, Irina She perfectly conveys her nabis or Dr Dorn’s universal barking on the series of plays Arkadina, visits her broth- bafflement and disgust when modern context was prescription of“some drops” that would bring him interer’s country house, accompa- Konstantin presents her with surprisingly easy with “a paracetamol” pre- national fame and the young nied by her lover, Trigorin, a dead gull, saying: “What’s an equally successful author. wrong with you?” and her dered tights and Gothic mas- serves the contemporary feel woman from London with a Their arrival inspires Irina’s repetitions in her last scene cara, lights a joint and col- Chekhov wanted, throwing gifted ear for natural diason, Konstantin, who is ob- of the famous line “I am the lapses on stage with her iPod the focus on to psychologi- logue. Together with excelsessed with originality, to try seagull” are touchingly dis- while the besotted, geeky cal observations rather than lent acting and direction,they experimental writing and tracted. Her insistence that Medvedenko, played with in- period details. The awkward have created a gripping psyNina, the girl he loves, to in return for fame she would spired nerdiness by comedi- undercurrents in a family chological drama beneath the leave the countryside and be- “live off catfood”is reminis- an Ben Moor, complains card game are as true as ever. railway tracks.

TITLE: ST PETERSBURG EDITORS: H REYES, M SAMSONOVA, J RANN PUBLISHER: OXYGEN BOOKS

loating, lyrical, miraculous Petersburg… beauty built on bones, classical façades that cradled revolution, summers that lie in the cup of winter.” These words, from Helen Dunmore’s novel The Siege, set the scene for the St Petersburg City-pick book, which takes extracts from more than 60 writers’ work to create a portrait of a fascinating city.They include fiction, history, memoirs, letters, travel writing, diaries and journalistic excerpts. Divided into nine sections, most aspects of St Petersburg of interest to visitors and armchair travellers are covered. However, the only mention of food refers to its absence in the city’s hard times – indeed, the city portrait doesn’t opt only for the beautiful and romantic. A logo at the beginning of the book reads“Russian Culture Now”,which is ap-

parently the mission of Academia Rossica, which has formed a partnership with Oxygen Books for this project. With this in mind, the great Russian classic writers – Pushkin, Tolstoy, Dostoyevsky, Gogol, Goncharov – have a token presence, while modern writing and quirky discoveries dominate. My favourite is Truman Capote’s The Muses Are Heard. In 1957, Capote accompanied a US opera company on a cultural exchange, bringing Porgy and Bess to Russia. When Cold War Leningrad meets US wealth and exuberance, the result is entertaining and illuminating. There are enjoyable extracts from Malcolm Bradbury’s last novel, To the Hermitage, Duncan Fallowell’s One Hot Summer in St Petersburg, and Sacheverell Sitwell’s charming evocation, in Valse des Fleurs, of a day in the city in 1868 – written at the height of the Second World War and without ever having set foot in the place. There is some lovely writing from old Petersburgers, such as exiles Nobel laureate Joseph Brodsky and Vladimir Nabokov: the latter’s evocation of “the sepia gloom of an Arctic afternoon” invading his childhood home is particularly haunting. Contributors from the worlds of music, ballet and film include Shostakovich, Prokofiev, Pavlova, Karsavina and award-winning filmmaker Alexander Sokurov. Writers that may be less familiar to British readers, though household names in Russia, include Andrei Bely, Yevgeny Zamyatin, Andreï

Makine and Sergei Dovlatov. Some of the most moving writing, perhaps inevitably, is devoted to the darkest time of the city’s history, the 900day siege of Leningrad during the Second World War. Writing by Helen Dunmore, Gillian Slovo, Debra Dean, Elise Blackwell and Sarah Quigley is set beside documentary evidence and survivors’ accounts. Part city guide, part literary map and illustrated reading list, the anthology will not tell you where to stay or eat, but it will help you understand the city. It doesn’t restrict itself to the obvious city-centre sights, but also covers less familiar locations, particularly in the interesting recent writing unearthed by Russian co-editor Marina Samsonova. Some of this has been translated especially for the anthology. As well as gems such as Andrei Astvatsaturov’s account of spending one’s youth in the boredom of the “desirable”new residential areas in Skunskamera (2010) and Andrei Bitov’s humorous take on ballet, there are a number of translated extracts from the excellent St Petersburg as Cinema (edited by Lubov Arkus): it’s a shame this book is not yet available in English. Tim Stanley’s piece on the city’s contemporary art scene is informative, while recent visits by journalists Miranda Sawyer and Viv Groskop ensure that the reader is given a feel for what is becoming, despite its impressive architectural and artistic heritage, a very 21st-century city. Simona Luff

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Moscow travel New companies attract younger visitors by reinventing traditional sightseeing as a game and a way to meet local people

Roll up for the magical mystery tour JOY NEUMEYER SPECIAL TO RUSSIA NOW

Hugging strangers, reciting poetry and looking for birdshaped graffiti is not usually part of a city tour—but Moscow Game Tour is no ordinary company. Nikita Bogdanov, 25, founder of the company, says: “It’s not a regular tour, it’s a quest.You interact with Russian people, and you gain more experience.” Moscow Game Tour is one of a new breed of innovative tours run by and for young people. They are either lowcost or free, and prioritise interacting with locals over traditional sightseeing. Mr Bogdanov started Moscow Game Tour in 2009 to encourage visitors to explore areas outside the city centre. In the tour, which costs 700 roubles (about £14), participants are“players”and complete challenges that lead them to clues in the shape of a matryoshka doll. Many tasks involve asking passers-by for directions or trying a Russian phrase. Along the way, players discover interesting features such as a monastery canteen, or a Socialist Realist statue. Some clues are easier to locate than others. “There was one spot that we absolutely could not find,” says Vera Baranova, 25, who took part in a quest at Tsaritsyno Park in south-east Moscow. “When we asked someone,

In addition to the Free Tour and Game Tour, Mr Bogdanov’s company offers daily paid-for tours with a variety of themes. The retro Communist Tour visits central Soviet landmarks, including the Lubyanka (former headquarters of the KGB); the Gulag Museum; a Soviet-style canteen and Eliseevsky, a regal shop on Tverskaya Street considered the grandest store in the Soviet Union (which these days sells imported French yoghurt and other modern luxuries). Visitors can also venture Greeters take tourists below ground on the Metro Tour. The latter stops at some to lesser-known of the most ornate stations sights or to events in Moscow’s beloved Stalinand chat to them ist metro system, such as the mosaic-adorned Komsomolabout their lives skaya. In an attempt to supply visitors with information beyond the average pocket Some signs for tourist sights are now guide, the tour recounts litfacts about the in English but metro tle-known metro, such as how many baand street signs are bies have been born on it. Alexei Sotskov, 30, was instill in Cyrillic spired to start Moscow conventional tour can be a Greeter, a local franchise of challenge. “The Free Tour is the international Greeter more popular because it’s network, after giving informore easily understandable,” mal tours to friends.“I have Mr Bogdanov says. “For the a lot of friends in foreign Game Tour, you need to ex- countries, and when they come to Moscow I show them plain to people what it is.” Business has picked up as interesting places. So I Mr Bogdanov has formed re- thought it would be a great lationships with hotels, major idea to start running a tourtour agencies including TUI ist service,” he says. The greeters are mostly and companies such as Google. This year, he also began students learning English receiving support from Mos- who take visitors to lessercow’s Committee for Tourism known sights, such as the forand the Hotel Industry, which mer royal estate Kolomenhas launched a programme skoye, as well as exhibitions called “Moscow Fresh” to and sporting events. The greeters not only show the support creative tourism. it turned out that we were actually right on top of it.” Mr Bogdanov also operates the Moscow Free Tour, which provides an overview of major sites between Kitai Gorod and the Kremlin free of charge. In peak season, this more traditional outing attracts between a dozen and 40 people every day; the Game Tour runs only once or twice a week and usually attracts between five and 10 participants. Convincing visitors to sign up for an un-

IN HER OWN WORDS

Mila MARKETING MANAGER FOR MICROSOFT AND VOLUNTEER FOR WOWLOCAL

Shirt sense: tourists can ask friendly local volunteers for help or follow clues

but they go back and they still don’t really get how people really live here,”she says. “Greeters offers tourists a good way to get a real impression of Russia, so that you don’t just visit the usual tourist sights.” Another unconventional tour company, Lovely Russia, also strives to provide a more engaging experience for tourists.“A lot of the tours I saw being run by tour providers were really boring, just buses with large crowds of 60 year-olds,” says the company’s co-founder Anna Shegurova, 25.“There was not a lot for a younger crowd, a more off-the-beaten-path kind of thing.” Lovely Russia offers a variety of £14 tours in English. Locations include metro stations, Constructivist landmarks and a “Moscow as it is”outing that winds through the city’s side

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Following trails of clues and asking Muscovites for information are part of the visitor experience with a new generation of tour guides.

tourists around but they also chat to them. “Greeters talk about their lives, their parents, where they’re from in Moscow, and where they study,” says Mr Sotskov. “Traditional guides just give people information they read in a book.” Valentina Lebedeva, a second-year linguistics student, has been a greeter for two months.“When most people come to Moscow, they visit the Kremlin and everything,

streets. At the end of the tour, guides suggest places where participants can enjoy a beer. Ms Shegurova says the guides try to show visitors “a different side of Russia”. “It’s a great city with a really long and interesting history… but you wouldn’t really know unless you have someone with you who’s able to share this history and make it interesting,”she says. For visitors without a guide, getting around Moscow can still be a challenge. Over the past year, some English-language signs indicating the locations of historical sights have been put up, but metro and street signs remain in Cyrillic. “Coming here, it’s very hard to get orientated,” says Irina Tripapina, 25, the organiser of WowLocal.“We decided to compensate for the lack of information in Eng-

lish by establishing a community of volunteers who are willing to help visitors find their way.”After passing language and navigation tests, WowLocal volunteers are given T-shirts and badges emblazoned with the phrase “Ask Me, I’m Local.” “Tourists can meet WowLocal at any part of the city and at any time – even at night in Butovo,”says Ms Tripapina, referring to the suburb south of Moscow. Since the project started in July, Ms Tripapina says it has recruited about 400 volunteers. She wears her badge every day on her way to work, and says she’s frequently stopped by foreigners asking for directions (as well as Russians looking for the metro). Occasionally, she fields some more unusual requests: “Once, a guy from Britain asked me where to get a

I enjoy being a WowLocal volunteer. Wearing the “Ask Me I’m Local” T-shirt allows me to help visitors and I always offer plenty of advice. I have foreign colleagues who don’t like Moscow because they can’t find anything. A friend says Muscovites look disgruntled; I guess if we were a bit more friendly to foreigners the attitude towards our city would change.

bowl of pelmeni,” she says. WowLocal also brings together local people and tourists through city navigation games and conversation clubs at hostels. “We bring volunteers together with the travellers, so that they can share with each other,” explains Ms Tripapina. This article was prepared in co-operation with Moscow's Committee for Tourism and the Hotel Industry.

Cinema Will Keira Knightley’s performance in the latest British version of Tolstoy’s tragic tale reignite a love of classic literature in younger Russians?

Anna Karenina: dying to win you over standard. As such, it easily surpasses all of the Anna Karenina adaptations I know. This superlative Anna Karenina hit UK cinemas back in September, but it will not be released in Russia until VALERY KICHIN SPECIAL TO RUSSIA NOW January 2013. Such a long Tom Stoppard and Joe quarantine for a film made in Wright’s Anna Karenina pos- the West is unusual in Russia: sess a quality that most Tol- Moscow premieres often prestoy worshippers lack – ab- cede the premieres in New solute freedom when it comes York and London. The reason for this delay, I to interpreting Tolstoy’s masterpiece. Wright’s bold deci- imagine, has to do with serision to show Russian society ous qualms on the part of the as a giant endless theatre, film’s Russian distributors: where people obediently per- will a movie with such a modform the parts allocated to est name attract viewers? The them, materialises the tem- distributors are probably hoppest of emotions and thoughts ing that after the Christmas that the book evokes in its holiday the young multiplex readers rather than the sim- crowd will become curious; they’ll want to see the film ple plot of the novel. The cast of the film is im- mainly because it stars Keira peccable. Turning life into a Knightley. As far as these kids theatrical performance and a are concerned, Keira Knightstory of families in which ley is more popular in Russia “everything was in confusion” than Anna Karenina. Russian film producer Serinto a universal problem, Wright sees no need to look gei Solovyov,made two film for typically “Russian” char- adaptations of Anna Kareniacters and, for this reason, ap- na, one for cinema and the pears closer to Russian real- other for TV. Despite a star ity than his predecessors did. cast, including OlegYankovsThe theatrical expressiveness ky (Karenin) and Aleksandr of Keira Knightley (Anna), Abdulov (Oblonsky), neither Jude Law (Karenin), Aaron adaptation ever made it to the Taylor-Johnson (Vronsky) and screen. Solovyov's Anna Karenina Domhnall Gleeson (Levin), however conventional the took 10 years to produce, and decor, is fascinatingly natural was the first Russian film to and unique, setting a new fall victim to the economic The trend away from statefunded epics to privately sponsored blockbusters means films are targeted more at teens than adults.

came a box-office hit. The first colour adaptation of the novel, produced by Alexander Zarkhi at Mosfilm in 1967, stirred public interest again. Tatyana Samoylova played Anna, while Bolshoi prima ballerina Maya Plisetskaya starred as Betsy. Seven years later, Plisetskaya played Anna in the ballet by Rodion Shchedrin. In 2006, interest had waned again and the new adaptation by Sergei Solovyov, starring Tatyana Drubich and Russian film icons Oleg Yankovsky and Alexander Abdulov, received only private screenings – the distributors thought the film had no commercial future.

Three faces of Anna: Alla Tarasova, Tatyana Samoylova and Keira Knightley

crisis of the Nineties.Then, the producers were counting on the novel’s popularity for its success, but there were endless delays due to funding shortages. The director, who was accustomed to state financing, had to master the new profession of asking for money from “new Russians”. “A man promised me money – then didn’t give it. So the picture was again held up,” Solovyov explained to me during filming. “The last time it was held up we had only a few days’ of

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shooting left; the scenes at the station where Anna throws herself under the train. It’s an expensive film: actors, crowd scenes, locomotives. Can you imagine: because of our financial straits we were forced to let our heroine go on living – we didn't even have the means to destroy her.” “What if we were to poison her,” I suggested. “It might make for a new reading of the novel. . .” The money was eventually found and Anna was able to throw herself under a train. A decade after going

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Director Maurice Maître produced the first silent film version of Anna Karenina in 1911 starring Moscow theatre actors. The film has not survived and little is known about it. In 1914, Vladimir Gardin directed a new adaptation, inviting Maria Germanova, a star of the Moscow Art Theatre, to play the title role. The film was slammed by critics. Russian film-makers returned to Tolstoy seriously only in 1953, when Tatyana Lukashevich filmed a theatrical performance at Moscow Art Theatre with Alla Tarasova playing the leading role. The black-and-white picture be-

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Mixed fortunes at the box office

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into pre-production, Solovyov’s film was finally ready in 2006. But by then Russian audiences seemed to have no idea who Anna Karenina was. Sergei Solovyov was not simply popular – he was a cult figure. His rebellious films of the Eighties anticipated Gorbachev’s perestroika.The song We Want Change by Soviet rock star Viktor Tsoi in Solovyov’s 1987 film Assa was like a thunderclap for thousands upon thousands of young people; it heralded a new generation with a hith-

‘What if we were to poison her,’ I suggested. ‘It might make for a new reading of the novel’ erto impossible fund of social energy. Solovyov’s films were eagerly awaited: people stood in long lines to see them, while the films’ heroes became symbols of long-awaited change, their names and catchphrases becoming part of popular

folklore. Now, Russian film distributors are convinced that no one needs his latest efforts. “Not because they think it’s a bad picture… But the idea of trying to peddle a movie about Anna Karenina horrifies them: no one in the younger generation knows who she is.” He exaggerates, of course: Tolstoy is part of the reading programme in Russian high schools. But the traditional Russian need for serious literature as a means of better understanding one’s own life

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seems to be disappearing. Where literature and film used to be a sort of school of life, today they are looked to primarily as a source of entertainment. This process began later in Russia than in many other countries, but once it began, it quickly assumed monstrously hypertrophied features: teenagers go to see blockbusters, and movie releases are aimed mostly at teenagers. Meanwhile, many adults have stopped going to the cinema altogether, since movies no longer contain enough sustenance for the mind or heart. The mass media are so focused on teenagers that they have almost stopped reacting to signal Russian films, although they do give a lot of attention to world-famous movie stars.The result is a vicious circle with service-orientated film industry and mass media dumbing down and lowering the level of their audience. Solovyov’s hope is that films can influence people once again and become an event not only for business, but for art and the life of society.While filming his Anna Karenina, Solovyov passionately told me: “The novel helps us to understand why fate hurled us into this life. That level of human truth alone makes the novel worth filming.”

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