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Why young Russians are choosing to volunteer rather than protest

Cyprus: a financial crisis the EU must seek to contain

Igor Sakhnovsky and his magical approach to reality

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Comment & Analysis ITAR-TASS

Politics & Society

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Tuesday, April 02, 2013

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Trade New leader Xi Jinping signs key oil and gas deals

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ALSO IN THIS ISSUE

Russia and China take great energy leap forward

Boris Berezovsky, 1946-2013: the final chapter

Comment & Analysis Russia and the West How to work together on international conflicts

CO PA MM G EN E 2 T, PA GE 6

NIYAZ KARIM

PAGE 6

Deepening economic ties with the new leadership in Beijing are evidence that Russia is increasingly looking towards Asia. BEN ARIS SPECIAL TO RUSSIA NOW

Russian oil giant Rosneft will triple supplies to China to a million barrels per day courage reciprocal investment,” Mr Putin said. “We agreed to make more active use of the possibilities the Russian-Chinese Investment Fund offers, and pay particular attention to infrastructure and production projects in [Russia’s] Far East.” The deals come after tough negotiating with China over a range of deals, which were stymied during the leadership changeover in China in the past two years. After President Xi was confirmed in office on March 14, the new Chinese leadership was eager to get off to a flying start.

Another illustration of the deepening alliance was Russia’s announcement that it will give China access to its jealously guarded oil sector: Rosneft promised the China National Petroleum Corporation (CNPC) a share in eight upstream projects including a “breakthrough” deal for China to explore and exploit Russia’s prized Arctic reserves. Progress was also made on a key gas deal stalled for more than six years over prices. The dispute was not settled, but a deal was signed between Gazprom and CNPC that will see 38 billion cubic metres of gas a year delivered to China from 2018. The deal is significant, as Russia agreed to supply China from its East Siberian fields. It had wanted to supply China from its West Siberian fields, which also supply western Europe, which would have given it a choice of customers in east or west. China met this concession with one of its own, agreeing to pay for 30 years’ worth of gas in advance. Gazprom was confident the last piece in the jigsaw, an agreement on price, would be reached by the summer. “I think that in June the price will finally be determined and by the end of the year all of the contracts will be signed with regard to the supply, with the volume and price agreed,” Gazprom chairmanViktor Zubkov said in a televised interview.

Business & Finance Wonder woman Elvira Nabiullina will become the G8’s first female Central Bank chief PAGE 3

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A foreign field: adventures in organic farming How one UK executive found happiness in the Russian countryside

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A multibillion-pound raft of deals struck during new Chinese president Xi Jinping’s recent visit to Moscow demonstrates a strengthening of ties between the two countries. As does the fact that Mr Xi chose Moscow as his first foreign visit since being appointed. New deals were announced in banking, energy and even rabbit husbandry, but the most important deals involved energy – underlining Russia’s increasing focus on China, and contrasting strongly with its lukewarm reaction to Europe during the recent Cyprus crisis. Russia’s state-controlled oil giant Rosneft, for example, will triple supplies to China to a million barrels per day, making China Russia’s single biggest oil customer, with total exports rising from 34 million tons to 50 million tons by 2018 per year. In further testament to the tightening of relations between Moscow and Beijing, the Chinese said they would give Rosneft $30bn (£20bn) in loans, which the company will use to finance its recent purchase of the British-Russian joint venture TNK-BP at a cost of $55bn – a deal that made Rosneft the world’s

largest publicly traded oil company. Kingsmill Bond, chief strategist at Citigroup in Moscow, described the Russian-Chinese relationship as “the best synergy on the planet,” as “Russia has the raw materials and energy China’s factories so desperately need, while Beijing has the market and the money for Russia.” This was a view echoed by President Vladimir Putin after his first meeting with President Xi on March 22. “Both countries want to en-

Decline and fall: Boris Berezovsky, who died at his Berkshire home on March 23, was once known as the Godfather of the Kremlin but fled Russia after a fraud charge

Technology Russia invests in people and new projects

Adoption A new drive to find families for orphans

Why hi-tech success is just a stroll in the park

Giving children in care a better chance in life

PRESS PHOTO

After 20 years in Russia, Kendrick White sees the new technoparks as crucial in identifying, nurturing and financing hi-tech winners. ARTEM ZAGORODNOV RUSSIA NOW

If one investor typifies foreign involvement in Russia’s burgeoning technoparks, it would be Kendrick White, CEO of Marchmont Capital Partners, who has spent the

past 20 years promoting horizontal integration and startup financing to generate demand for hi-tech solutions in the country’s regions. After stints at PricewaterhouseCoopers and the European Bank for Reconstruction and Development, Mr White set up Marchmont in his native Florida eight years ago.“As an entrepreneur, I’ve been interested in technology commercialisation for my

The Idea technopark in Kazan has become a sprawling incubator for hi-tech start-ups

CONTINUED ON PAGE 5

REUTERS

It’s April but still winter: Russia Now gathers photos of everyday life

A mother tells how visiting orphanages inspired her to adopt two children rejected by other couples.

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YULIA PONOMAREVA

Going cashless

RUSSIA NOW

When Yelena Sheba, a 35-year-old economist and mother-of-two, first got the idea of adopting a child, she wanted a perfect baby. But after visiting orphanages,Yelena says she realised the children most in need were the ones she had to help. “Like 90pc of candidates, at first I wanted a healthy, beautiful, Slavic girl,”Yelena says from her two-bedroom apartment in a Moscow suburb.“But such children have the highest chance to find a family. The biggest problem is children with serious diseases that wait for parents for years.” Yelena joined the charity Volunteers for Orphaned Children five years ago. Now, as well as their two biological children, Yulia, six, and Andrei, 13, Yelena and husband Alexander have two adoptive six-yearold girls, Marina and Praskovya.“I studied a lot but I’ve come to realise my real call-

A ban on paper money transactions over £6,500 could combat bribes SAVOSTIANOV SERGEY

entire life,” Mr White says. “Mathematics, which is the basic language of science, is in Russians’ genetic code – this is the logical place for me to be.” But the opportunities in today’s Nizhny Novgorod were unthinkable even a generation ago, when the city (then named Gorky) was both closed to foreigners and a virtual open prison for famous scientists such as Andrei Sakharov, a Nobel Prize winner and Soviet dissident. Following the Second World War, the Soviet government provided generous funding for national security-related research as closed cities – not unlike Los Alamos in the US – flourished across the country. Cities like Sarov (formerly Arzamas-16) – not far from Nizhny Novgorod where White has lived for the past 20 years – were home to millions of people and gave birth to projects such as the Russian atom bomb (directed by Sakharov). But while the US had a matching wave of entrepreneurs ready to found startups and commercialise the offspring of state-funded research over the past two decades, Russia faltered at the first hurdle. Following the end of the Cold War many of the closed cities opened up, but funding was slashed, and nobody

Heaviest snow for 50 years

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London forum In harmony: Yelena Sheba’s ‘real calling’ was to be a mother

ing is to be a mother,”Yelena says. Marina, the first child the couple adopted, had been rejected twice ; Praskovya had been rejected 30 times. “The orphanage staff tried to talk us out of it,”Yelena says, as she recalls taking Marina from an orphanage in the Moscow region.“They said, ‘Why do you need this? This girl has a bunch of health problems.’”There was a similar reaction from staff at Praskovya’s orphanage in the Astrakhan region.

But the situation for Russia’s orphaned children is improving gradually. Orphanages are now much better funded, and there is greater understanding that children should be adopted by a family to prevent them becoming institutionalised. Grassroots organisations are also growing to support vulnerable mothers who might otherwise give up their children to orphanages. However, huge challenges CONTINUED ON PAGE 2

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Death of an oligarch Increasingly desperate battle with Kremlin plus high-profile court defeat left once-powerful tycoon a broken man

Berezovsky: how are the mighty fallen How the top man became an also-ran

TIMELINE

From mathematician to Kremlin insider

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1946 Berezovsky is born in Moscow, an only child. 1975-89 After graduating in applied mathematics, Berezovsky researches optimisation and control theory at the Russian Academy of Sciences. 1989-94 Goes into business with senior managers at carmaker

Avtovaz. Through his connections, Berezovsky gains access to President Yeltsin’s inner circle. 1994 Survives assassination attempt when his car is blown up in central Moscow, decapitating his driver. 1995-96 Takes control of ORT television and founds Sibneft

with Roman Abramovich. 1996-99 Helps Yeltsin secure re-election and benefits from loans-for-shares privatisations, then becomes head of Yeltsin’s Security Council. 1999-2000 After supporting Putin’s election campaign, he later falls out with the Kremlin.

week, heard Berezovsky was found on his bathroom floor “with a ligature around his neck and a piece of similar material on the shower rail above him”. Berezovsky had struggled with depression towards the end of his life. He broke the record for a UK divorce payout with a £220m settlement in 2011, and last year was

ordered to pay former business partner Roman Abramovich £35m in legal fees after unsuccessfully seeking £3bn in damages. Berezovsky emigrated to the UK in 2000 to avoid fraud charges in Russia. He was convicted in absentia of defrauding airline Aeroflot and carmaker Avtovaz of millions of pounds. He de-

nied any wrongdoing. The underlying cause of Berezovsky’s exile was reportedly a rift with the Kremlin. Having initially supported Mr Putin’s presidential campaign in 2000, Berezovsky, who controlled Russia’s biggest TV channel ORT and business newspaper Kommersant, switched sides. He openly criticised the

Law man: Berezovsky was devastated by his failed lawsuit against Roman Abramovich

The controversial oligarch's death may finally give London and Moscow a chance to turn the page. YULIA PONOMAREVA RUSSIA NOW

In death, as in life, Boris Berezovsky – oligarch, powerbroker and dissident – continues to stir controversy and potential conflict between

London and Moscow. While it remains unclear whether his death will allow both governments to move on, observers expressed the hope that relations will finally improve. The death on March 23 of the man once dubbed the “Godfather of the Kremlin,” who later became an implacable foe of PresidentVladimir Putin, has provoked a flurry

of speculation about whether he committed suicide due to depression after his finances were reportedly destroyed by high-profile lawsuits. A subsequent post-mortem showed cause of death was “consistent with hanging” and there was nothing to indicate a violent struggle. An inquest,which was opened and adjourned last

Kremlin over the jailing on tax charges of media mogul Vladimir Gusinsky in June 20 0 0. Berezovsky later claimed to have received an ultimatum to hand over his share in ORT to the state or “follow Gusinsky’s path”. In 2003, Britain granted Berezovsky political asylum, rejecting Russia’s attempts to extradite him, which soured bilateral relations. The radiation poisoning in 2006 of Berezovsky associate and former FSB officer Alexander Litvinenko, who also lived in London, exacerbated already tense diplomatic relations. Britain demanded the extradition of Andrei Lugovoi, another former Russian security service officer, but in vain. Berezovsky accused the Kremlin of being behind the killing, while Russia officials vehemently denied any link to Litvinenko’s death, suggesting Berezovsky was implicated in the murder. The inquest into Litvinenko’s death has been postponed until October to let the coroner gather more evidence. Berezovsky would have been a key witness. “The Litvinenko case damaged Russian-British relations like nothing else,” says Vyacheslav Nikonov, president of the Moscow-based Politika Foundation. Sir Tony Brenton, British ambassador to Russia from 2004 to 2008, says Berezovsky was a big issue, as “Russ i a wa s v e ry k e e n t o

see him extradited. They didn’t manage to persuade a British judge to extradite him, even though they tried to do so a few times.” More than Berezovsky’s opposition to Mr Putin and potential influence over British policy towards Russia, the Litvinenko affair will continue to cast a long shadow over UK-Russian relations. “Berezovsky didn’t have so much influence in Britain, and certainly didn’t have access to UK ministers,”a close associate of Berezovsky says. “Even close business friends such as Rupert Murdoch were not interested in taking part in his political fight with the Kremlin.” Mr Putin’s spokesman Dmitry Peskov said last week that Berezovsky had recently written a private letter to the President, expressing his wish to return to Russia. Sergei Markov, a political analyst close to the Kremlin, said Berezovsky’s death was a chance for Britain to turn a new leaf and show it no longer“supports people only because they’re at odds with the Russian government”. “Berezovsky was a major opponent of Putin’s, [so] relations may well get better – though to some extent this has already happened,” says Sir Tony Brenton.“Trade relations are very good, and Foreign Secretary William Hague gets on well with his counterpart, Sergei Lavrov. “Hopefully, life moves on.”

Youth Sociologists paint a mixed picture of the current generation of young Russians who would rather volunteer than protest

SVETLANA SMETANINA SPECIAL TO RUSSIA NOW

Young people see theft, poverty and abuse of power as modern Russia’s most troubling problems. They believe bureaucrats are the embodiment of social evil. Research also suggests that the young-

Elena Omelchenko, head of the Centre forYouth Studies at Moscow Higher School of Economics, adds: “There is a large segment of the youth that supports the government. But they do it for various reasons, with career considerations being the prevailing motive.” She believes there is no clear opposition group among the youth. Disenchantment with and alienation from politics are the pre-

ITAR-TASS

er generation has no idea how the state machinery works and why it is needed. It sees the state’s main duties as distributing subsidies, loans and pensions, as well as organising recreational activities.“Young people don’t think about ‘repairing’ the system. The best way to fix the situation is to destroy everything,” says sociologist Olga Kryshtanovskaya, following her research conducted in February 2013.

NAME: VLADIMIR PUTIN POSITION: PRESIDENT OF THE RUSSIAN FEDERATION

NAME: VLADIMIR ZHIRINOVSKY POSITION: LIBERAL DEMOCRATIC PARTY HEAD

NAME: CHULPAN KHAMATOVA POSITION: GIFT OF LIFE FOUNDATION CO-FOUNDER

Zhirinovsky, ranked second among the most popular politicians. Billionaire Mikhail Prokhorov, a recent entrant in Russian politics, was third,

with PresidentVladimir Putin coming out on top. Ms Kryshtanovskaya explains: “The president’s high rating reflects hopes that he will try to break

or change the corrupt bureaucratic system.” Young people also admire those who follow their convictions, like the actress Chul-

Couples rise to adoption challenge CONTINUED FROM PAGE 1

remain: at least 80pc of orphans in Russia have at least one living parent, and in many cases the parents have been deprived of parental rights due to social problems such as alcoholism. Adoptions by Russian families fell from 9,530 in 2007 to 7,416 in 2011, while the number of children placed in foster families dropped from 20,864 to 13,766 in the same period. In Russia, fostering is a commitment to care for a child until their 18th birthday. It can also lead to adoption. Having banned adoptions into American families on January 1, the government is going to pump more cash into the childcare sector to buck the declining trend. “An orphanage is never interested in placing a child in a family,” says Marina Andreyeva, head of children placement at Volunteers for Orphaned Children. “The more children there are in an orphanage, the more funding it receives from the state.” Childcare authorities often

THE POLLS

Home and away

SAVOSTIANOV SERGEY

Critical of the authorities and sceptical of the opposition, most young Russians fail to identify with any political party.

pan Khamatova, who founded the Gift of Life charity foundation that helps children with cancer. Young people are also becoming increasingly interested in charity work and volunteering. Having found no one to idolise among their own generation, they are becoming heroes themselves. The Centre forYouth Studies at the Higher School of Economics has discovered another important trend. “A pattern of behaviour among the youth envisages the rejection of drugs, alcohol and sexual promiscuity. Environmentalism and all kinds of physical exercise have become popular,” Ms Omelchenko says. Sociologists believe this is a way for the young to find a niche for their civic activity. Moreover, moral and ethical qualities are playing an increasingly important role in their search.

Three who win the youth vote

ITAR-TASS

Politics fails to capture young hearts and minds

vailing sentiments. “Young people’s brains are in a mess. Nationalist views co-exist with liberal ideas, and homophobia is mixed with aspirations to freedom for all,” Ms Omelchenko says, adding that most of those polled had not taken part in the recent protests because they distrust the opposition leaders. “Forty per cent of people polled believe the opposition is weak and will not succeed. They don’t see genuinely selfless people among its leaders – people who would be ready to sacrifice their lives for their ideals,”Ms Kryshtanovskaya says. At the same time, 90pc of those polled said they did not see a political party they could call“their own”among the existing factions. Still, the leaders of certain political parties enjoy a high level of trust among young people. The leader of the Liberal Democratic Party, Vladimir

Family values: Yelena at home with (left to right) Andrei, Praskovya, Yulia and Marina

don’t take enough interest in helping orphans find families either, she says. The requirements for would-be Russian foster parents include a medical check-up and a monthly income at least double the sub-

sistence level in the region they live in. A foster parent also has to attend a series of training courses spanning seven to 10 weeks. Foster families receive monthly payments from the state, with rates varying by

region. In Moscow, a foster child receives between 12,000 and 15,000 roubles (£255£320 per month) and foster parents 13,000 roubles per child.“It’s enough to buy food and clothes,” says Yelena. Yelena’s daughters are

SHOULD THE ADOPTION OF RUSSIAN CHILDREN BY FOREIGNERS BE MADE EASIER OR MORE DIFFICULT?

WHICH CHILDREN HAVE A BETTER CHANCE OF SUCCESS: THOSE ADOPTED BY RUSSIANS OR FOREIGNERS? (OR NO CONNECTION WITH NATIONALITY)

50pc Make it easier 23pc Make it tougher 14pc Ban adoption 13pc It’s hard to say

16pc Adopted by foreigners 12pc It’s hard to say 19pc Adopted by Russians 53pc No connection with nationality

SOURCE: PROJECT 'DOMINANTY', POLLS 'FOMNIBUS' 23RD DECEMBER, 2012

lucky to have free certificates to Russia’s best clinic for children, the Filatov Hospital, and local kindergartens employ specialists to help foster children integrate smoothly in the community. In other regions, payments

can be much smaller and benefits more limited. “In Moscow there are all the necessary conditions to take care of such children, and I think more of them should be placed in Moscow families,”Yelena says.

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Business & Finance

Health Government campaign targets alcohol abuse

NEWS IN BRIEF

A sobering thought for Russian drinkers

Overseas banks face restrictions President Vladimir Putin has signed a law prohibiting foreign banks from opening branches in Russia. The new law stipulates that foreign-based financial institutions must only operate in Russia through subsidiaries and representative offices. The legislation is aimed at protecting Russian credit institutions by ensuring that they have a competitive edge.

A legendary capacity for hard drinking is finally being challenged – by a changing work ethic and a government crackdown. BEN ARIS SPECIAL TO RUSSIA NOW

KOMMERSANT

History woman: the former economics minister joins the Bank at a challenging time

Banking Nabiullina to become the first female Central Bank head in the G8

Central Bank chief-in-waiting Elvira Nabiullina must balance the need for growth with the need to bring inflation under control. TIM WALL RUSSIA NOW

President Vladimir Putin’s nomination of former economics minister Elvira Nabiullina as Central Bank chief was hailed as a sign of continuity, but also of concern about flagging growth. She is likely to align the regulator’s fiscal policy closer to the Kremlin’s. Economists welcomed the choice of Ms Nabiullina, who will be the first female Central Bank chief in the G8, pointing to her track record on liberal reforms and closeness to the president. Outgoing Central Bank chairman Sergei Ignatiev is expected to be asked to stay on as an adviser to Ms Nabiullina. Ms Nabiullina comes to the post as the administration is grappling with the twin challenges of boosting flagging growth while trying to curb inflation. Russia’s growth at 3.2pc in 2012 is the weakest since 2009 and year-on-year inflation in February, at 7.3pc, is the highest in 18 months. The appointment of a politician also raises questions about whether the Central

Bank will be able to maintain the independence displayed under Mr Ignatiev, who has resisted calls for looser fiscal policy and higher spending. Ms Nabiullina’s appointment was welcomed by Alexei Kudrin, the former finance minister, indicating support for her across the political spectrum.“I believe this is a good candidacy, and I am sure she will be able to do the job,” Mr Kudrin told reporters at the Russian Business Week forum in London. “I believe she is among those most deserving this position.” Mr Kudrin had been touted as a possible Central Bank

The market is ‘likely to expect the Central Bank’s monetary policy to become more dovish’ chief, but is thought likely to be setting his sights on the prime minister’s post instead. Leading officials, and the President himself, have hinted that a cut in interest rates could be on the cards to boost credit flows and growth, if inflation can be controlled. Some economists say such measures will probably only have a limited effect in boost-

CURRICULUM VITAE

Ms Nabiullina, an ethnic Tatar, was born in Ufa, Bashkortostan, in 1963. After graduating from Moscow State University with an economics degree in 1986, she worked at the Rus-

sian Union of Industrialists and Entrepreneurs in the early Nineties before joining the economics ministry. From 2000 to 2003, she was first deputy to the economics minister German Gref, the current president of Sberbank. In June, if her appointment is approved by parliament, she will become the first female Central Bank chief – in Russia and across the G8.

ing growth. Anna Bogdyukevich, analyst for Aton Capital, said the Russian economy was “operating close to its long-term potential,”and that“policies aimed at stimulating aggregate demand… would result in higher inflation while not affecting the real sector much.” It was “difficult to say whether the Central Bank’s independence is going to be compromised by Ms Nabiullina’s appointment”, but the regulator’s fiscal policy would not necessarily become“more accommodative”. Investment analysts from Moscow-based Sberbank said the market “will likely expect monetary policy to become more dovish based on Ms Nabiullina’s experience as economics minister,

in which she particularly advocated increased government spending to spur economic growth… We bear in mind that the fight against inflation remains a key priority for the government’s economic team.” Much will depend on the state of the economy when Ms Nabiullina takes charge in June. Sluggish growth will increase pressure for a cut in interest rates, but inflationary pressures and a further global downturn may restrict her room for manoeuvre. One important new role for Ms Nabiullina could be supervising the government’s planned creation of a new “mega-regulator”,combining the functions of the Central Bank and financial markets watchdog.

Elvira Nabiullina PROFESSION: ECONOMIST CAREER: ECONOMICS MINISTER, 2007-11

Software Russia aims to crack global markets

IT specialists should be role models for the young, says minister

engineers, but there is a terrible shortage of them. Less than 1pc of the Russian workforce is employed in IT. The ministry has a considerable challenge to address in making the profession more popular. We had a round-table conference on the personnel problem at the 10th Krasnoyarsk Economic Forum in Siberia not long ago. We are already putting into practice some of the ideas from the conference.

Russia Now speaks to deputy telecommunications and mass communications minister Mark Shmulevich about Russia’s potential as a global software exporter. ELENA SHIPILOVA RUSSIA NOW

PRESS PHOTO

Russia plans to increase IT exports so they rival the defence industry. How and when can this be done? Software development is emerging as a key sector among Russian exports. In the decade leading up to the end of last year, Russia’s annual software exports rose to $4bn (£2.6bn) from $200$300m (£132-£198m). Arms exports remains the main driver, with $15bn of weapons sold last year. However, the software sector can expect to close in on defence over the next few years. Exports are also growing thanks to outsourcing to Russia, and that’s what small firms do. When it comes to software, we have had some successful projects: Ecwid, Prognoz and Diasoft were start-ups that found their niches. The only question is if they are interested in staying in Russia or shifting their business to neighbouring countries or the US, where

CURRICULUM VITAE

Mark Shmulevich graduated from Moscow Institute of Physics and Technology. From 2009 to 2012, he was head of busi-

ness development at Russian Space Systems, which developed the satellite navigation system Glonass. In 2010, he founded Rusnavgeoset, a joint Russian-US satellite navigation venture. In 2011-2012, he was director for development at the Russian Quantum Centre.

the business environment is often more favourable.

gime and the availability of skilled staff.

How can we encourage them to stay? Two [areas] are critical to the development of the IT sector: a favourable tax re-

Do you agree that sometimes Russian programmers can succeed where Chinese, Indian or Americans have failed? Our graduates are excellent

AGE: 30 STUDIED: PHYSICS AND TECHNOLOGY

There is an American video on YouTube with the founders of Microsoft, Facebook and Twitter explaining why it is important to learn coding. Will Russia have anything of this kind? We won’t copy the American idea, but such things are required. Videos are just one method. Our task is to turn IT specialists into a symbol. To this end, we should have TV shows and talk to students about career prospects. When you were working on the development plan for the sector, were you building on the experience of countries that have succeeded in IT? You can’t take someone else’s model and apply it to Russia. We have some important peculiarities and pitfalls. But we are keeping an eye on developments in other countries. We are also building on other countries’ experience in copyright protection. The fact that we are lagging behind gives us an advantage in, say, patent wars. On infrastructure, we are exchanging experiences in the creation of technoparks with Singapore and Israel. But we still have a lot to do.

Faced with Russia’s alarming demographic decline, the government is getting serious about tackling the country’s love of strong liquor. In January, stiff new taxes saw the cost of vodka soar, while tough restrictions on retailers banned over-the-counter alcohol sales after 10pm. Vodka consumption has been falling in recent years, although contradictory forces mean the fall has not been even. Over the past four years, Russians’ consumption of vodka has officially fallen by 7pc – to 417 million gallons in 2012 from 449 million gallons in 2009. That still leaves the average at 3.2 gallons per person annually – putting Russians among the hardest drinkers in the world. The government’s most effective measure so far has been to shut down many moonshine factories, which accounted for an estimated third of vodka production, according to Vadim Drobiz, director of the Research Centre for Alcohol Markets. Daria Khaltourina, cochair of the Russian Coalition for Alcohol Control, agrees. “The [authorities] have become serious about illegal production of alcohol, and a lot of illegal plants have been closed by the regulator recently.” But while Russia’s middle class is becoming increasingly health conscious and switching to lower-alcohol drinks, such as wine and beer, rising incomes mean some Russians are drinking more. Many Russians’ incomes have continued to rise since

Foreign owners to be disclosed

ITAR-TASS

Elvira takes hold of the nation’s purse strings

Offshore companies that own strategic facilities in Russia, such as Moscow’s Domodedovo airport, will be obliged to disclose their owners, according to a new bill. Such companies would have to either re-register in Russia or reveal their ultimate beneficiaries under the legislation.

Softer stuff: the middle class is switching from vodka to wine

IN FIGURES

3.2

gallons was the average consumption of vodka per person in Russia in 2012. Ministers say this will fall to about 2.6 gallons this year.

300

pounds was the average spend on alcohol over the New Year holidays, says the Research Centre for Alcohol Markets.

the 2008 economic crisis, due to high energy revenues and increased government spending. And, while overall vodka consumption has been falling, the change is not smooth: consumption rose again between 2010 and 2012 by 6pc.

Changes in society may prove helpful. The changing work ethic has already had a big impact on drinking habits. In Soviet times, a regional manager who needed extra resources from the state would simply turn up in Moscow to meet with officials, armed with a bottle of vodka and some sausage. While an overt anti-alcohol campaign may be unpopular, the government has to stick to its guns if it wants to avert a demographic disaster. Since 1991, Russia’s population has shrunk by five million people to 143 million. The government has been trying to address this by investing more in pre-natal and maternity health care; the new rules on vodka represent the next phase in the campaign to improve public health.

Rosneft now world’s No 1

REUTERS

Russia’s Rosneft has become the world’s biggest publicly traded oil firm, following the completion of its £36bn acquisition of TNK-BP, the country’s third-biggest oil company. The unified company will produce about four million barrels of oil per day and its reserves will total 28 billion barrels, according to Rosneft data.

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INVESTING IN THE FUTURE DOZENS OF INNOVATION HUBS ARE SPRINGING UP ACROSS RUSSIA, PROVIDING FERTILE GROUND FOR START-UP COMPANIES AND NEW INVESTMENT OPPORTUNITIES

PICKING HI-TECH WINNERS IN A CROWDED FIELD The Russian government has spent billions setting up innovation hubs in the past five years. The best have the potential to be world leaders in a variety of sectors. DANIIL ZHELOBANOV

SPECIAL TO RUSSIA NOW

In the 2000s, the Russian government came to regard technoparks as a perfect means of fostering innovation in the economy. Technoparks began to spring up all over the country thanks to numerous government programmes and initiatives. Five years ago, a World Bank study said one of the Russian provinces, the Republic of Tatarstan, had more technoparks per capita than the country that invented them, the United Kingdom.

A variety of innovation

There are 88 registered technoparks in Russia, of which about 10 have the potential to nurture innovative hi-tech companies that can successfully compete in the domestic and global markets. The Russian technoparks do not have any distinct industry specialisation. Most of them pursue technological innovation in areas designated as national priorities by the federal government, including biotechnology, pharmaceuticals, nanotechnology, IT, space and nuclear technology. Almost all of the Russian technoparks aim to establish an IT cluster; other popular industries include the aforementioned nanotechnology and biotech. The choice of specialisation largely depends on the availability of the required expertise – including universities and research centres – in the respective home region. Another factor is the profile

of the region’s economy. For example, Tatarstan, which has a large petrochemicals industry, has established KhemGrad Technopolis, which aims to nurture startups and small businesses specialising in chemicals. To help attract investment in hi-tech ventures across the whole country, the Russian government in 2005 created Special Economic Zones (SEZs), which offer a simplified procedure of land assignment, as well as special free customs regime and a number of tax preferences. So far, there are six industrial zones, five technology zones, four for tourism and recreation, and two port zones in operation.

Secrets of success

The vast majority of the Russian technoparks are very young, so the only things that distinguish a successful technopark are its residents. For example, the technopark in Tomsk is an SEZ, and the region is trying to create an attractive climate for start-ups as well as large Western hi-tech companies. The technopark’s residents specialise in areas which have a good chance of triggering a new global wave of innovation, including the development of a vaccine against cancer, LED lighting, plasma technologies and the use of nanotechnologies in medicine. Tomsk technopark projects include Western partners such as Nokia Siemens Networks. The successful technoparks have one thing in common: all are based in cities that host leading universities, research centres or clusters of privately owned hi-tech companies. Such technoparks and business support systems

were designed right from the start to cater to the needs of specific companies or startups already operating in the respective regions. For example, Russia’s oldest nuclear centre, the town of Obninsk in Kaluga Region, two hours’ drive from Moscow, hosted several successful pharmaceutical and biotech companies in the 1990s. The region has also managed to attract global pharmaceutical giants such as Sanofi, which have built research and production facilities there. It is these existing companies that the technopark now

The most successful technoparks are often based in cities that host leading universities Skolkovo and SEZs are attractive to investors because they have their own customs regimes being set up in Obninsk is designed to support and retain. Time will tell how successful the new technopark will turn out – but it will definitely not lack for residents.

Cracking global markets

Examples of the innovative products and services developed in regional technoparks and capable of winning a share of the global market are few and far between for the moment – but they do exist. One is the completely new service and software for cheap 3D visualisation based on 2D images, developed by 3DBin, a university-based start-up in Tomsk. With the

product selling well in Europe and the US, the company has recently opened an office in California, and its customers include such global giants as eBay. As for Skolkovo, many of its residents are spin-off projects launched by large Russian hi-tech companies whose products are well known in the West. These include Yandex, ABBYY, Kaspersky Lab, and IPG Photonics Corp (IRE-Polyus), which develops laser technologies. Otherwise, Skolkovo has identified thousands of potentially profitable projects from across the country, and has managed to stimulate international funding for a few dozen of those.

US and European models

The most advanced of the Russian technoparks take their cue from American, French and other global leaders. They market and promote the products and services developed by their residents, set up meetings with potential investors, and facilitate participation in various exhibitions and industry events. But the level of support services – and of the specialists who provide them – remains well below the benchmarks set by European technoparks. Russia’s reputation as an investment destination still leaves much to be desired. Being a technopark resident offers some additional investment security assurances, but much depends on the specific technopark and its home region. Some of the Russian provinces regard hi-tech industries and innovation as an important priority. The technoparks they host enjoy full support of the respective regional governments, which

often designate senior officials (deputy governors, in most cases) in charge of innovation policy. As a result, technopark residents – especially foreign investors – enjoy greater access to regional government officials. In Russia, that makes a lot of problems much easier to resolve. The provinces that host successful technoparks – such as Kaluga Region and Tatarstan – tend to have a much better investment and business climate than the rest of the country. The technopark being set up at the Skolkovo Innovation Centre just outside Moscow is something of a special case. Having managed to attract several dozen anchor investors at a very early stage, including such international hi-tech giants as Boeing, Cisco and Microsoft, Skolkovo is essentially a domestic offshore haven for hi-

tech companies, able to offer its residents unprecedented tax breaks and huge grants. Other privileges include a special system of tax administration and technical regulation, and exemptions from immigration restrictions. As a consequence, Skolkovo is in a position to choose only the best innovation projects from all over the country. That is why it stands out among even the most promising regional innovation centres, in terms of both the number of companies developing breakthrough technologies and the general level of specialists who are involved in the projects.

Passing the test

As a rule, all applicants who wish to become technopark residents are required to pass rigorous vetting. They need to demonstrate to a

and western scientists, venture capitalists and senior managers of successful hitech companies. The application review process usually takes about a month, which is not very long by international standards. In Singapore, for example, an evaluation by A*Star – the science, technology and research agency – can take up to six months. Professors from universities and technoparks across Russia often say that one of the biggest barriers to developing hi-tech industries and new science is the customs service: importing the proper equipment into Russia is a major hassle. This is another reason why Skolkovo and SEZs are particularly attractive to international investors: unlike regional technoparks, they have their own customs regimes.

special commission that the project they propose represents genuine innovation, and that their business proposal is in line with the goals and objectives of the technopark. For a foreign project to become a Skolkovo resident, it needs, first, to register as a business in Russia; and second, to have Russian researchers as partners. In addition, the company in question must pursue R&D in one of Skolkovo’s designated specialist areas: nanotechnology, biotechnology, nuclear technology, space, and energy efficiency. The application must pass a formal vetting by a committee of experts before it is submitted for what is essentially an anonymous evaluation by randomly selected specialists who are on the Skolkovo panel of experts. The panel includes Russian

Start-ups Company develops pioneering technology to foil illegal downloading of films, music and software

Skolkovo trio take up arms against internet pirates

IN HIS OWN WORDS

Nikolai Nikiforov

RUSSIA NOW

In 2009, brothers Andrei and Alexei Klimenko and their friend Dmitry Shuvaev created a file-sharing traffic management solution for an internet service provider (ISP) network. The three twentysomething colleagues soon realised that the application offered some unintended but significant opportunities for intellectual property protection. “After creating the prototype, we realised we could more generally prevent files from being downloaded, which meant that the program had great promise in combating the spread of pirated content,” says Andrei Klimenko, now the CEO of Pirate Pay. The technology prevents file-sharing in torrent networks. These peer-to-peer (p2p) file-sharing solutions allow large amounts of data to be transferred between individuals. After the first user uploads a file to an accessible network, the file does not live in any central location, but is accessible only from people who have already accessed it. In order to download a file, however, these secondary users must know the IP address of a computer that

expanding the company’s staff to a total of seven. “The underlying technology of Pirate Pay has no analogues in the world,” says Alexander Turkot, executive director of the Skolkovo Information Technologies Cluster, explaining the decision to accept the company as a resident. Potential residents at Skolkovo, Russia’s government-supported answer to Silicon Valley, are assessed according to several criteria, including scientific innovation and the prospect of commercialisation.

Cracking down on copyright infringement

PROFILES

Dmitry Shuvaev PRESS PHOTO

ELENA SHIPILOVA

has the file. Without the information, the connection ends and the file cannot be downloaded. Mr Shuvaev and the Klimenko brothers found a way to prevent these secondary downloads from taking place even when the IP address is known. “It was not so hard to do from inside an ISP’s network. But to turn the technology into a global service, we had to convince all ISPs to acquire our solution. This is what some would call mission impossible. To create a global service, we had to find the way to do it from the cloud,” Andrei Klimenko says. “So we needed money for development.” The partners quickly found that obtaining the financial support needed to refine the technology into a successful venture was not a simple task. But after taking part in a host of grant competitions, their efforts have finally begun to pay dividends. The Microsoft Seed Fund has invested $100,000 (£66,000) and the Bortnik Fund, which assists small innovative enterprises, contributed approximately $34,000. And, perhaps most significantly, the Skolkovo Innovation Centre accepted the company as a resident, which will result in a range of tax benefits as well as interaction with other innovators. The newly minted businessmen have been able to recruit four programmers,

PRESS PHOTO

The creators of Pirate Pay, a hi-tech start-up, say they can stop files from being illegally downloaded from torrent networks.

Andrei Klimenko

Alexei Klimenko

TITLE: DEVELOPMENT

TITLE: FOUNDER, CEO

TITLE: FOUNDER, CTO

DIRECTOR AGE: 29

AGE: 29

AGE: 28

STUDIED: MANAGEMENT

STUDIED: PHYSICS

The problem of copyright infringement in Russia is extremely serious, and there is significant international pressure on the government to crack down on what is seen to be rampant piracy. Foreigners in Russia find they can obtain foreign films before their release dates in the US. According to various estimates, filmmakers lose about $500m a year to piracy. Hundreds of thousands of gigabytes of illegal content are downloaded every day through file-sharing services, including computer software, music and films. Threatening internet users with legal liability or appealing to their consciences has largely failed. And that is why the company has begun to attract attention outside Russia as well as at home.

In December 2011 Peter Buslov’s film Vysotsky: Thank God I’m Alive came out in cinemas, and for a month after its opening, Pirate Pay protected the film on torrent networks. “We used a number of servers to make a connection to each and every p2p client that distributed this film,”Andrei Klimenko says. “Then Pirate Pay sent specific traffic to confuse these clients about the real IP addresses of other clients and to make them disconnect from each other. “Not all the goals were reached. But nearly 50,000 users did not complete their downloads.” The company’s successful defence of the film brought its first big payday. Company officials will not discuss exact earnings, but said that projects will cost clients between approximately $12,000 and $50,000 depending on the resources needed to mount a defence. “We try to conduct deals with a profit margin,” says Andrei Klimenko.“However, significantly more is currently being spent on development than we are earning, and thus there is not yet an opportunity to recoup our expenses from revenue.” Over the next two years, the company plans to consolidate its place in the Russian market and gain a foothold internationally. It hopes that its presence at Skolkovo will assist in that growth.

RUSSIAN MINISTER OF COMMUNICATIONS AND MASS MEDIA

Technoparks are about business – it isn’t about government-funded initiatives; it isn’t about receiving grants. It is impossible for companies to get into [the Tatarstan technopark] if their ideas do not have the ability to earn money, not only in Tatarstan, but ideally across Russia, across the world."

IN FIGURES

Technoparks focus on innovation – in fields as diverse as software and chemicals – in 36 Russian regions.

SEZs focusing on industry (six), technology (five), tourism (four) and ports (two) are currently in operation.

$1.3

bn in revenue has been earned by residents of technoparks since their inception in 2006.

most read Government aims to stimulate Russia’s IT sector http://rbth.ru/23301

Russia now www.rbth.ru

section sponsored by rossiyskaya gazeta, russia Distributed with THE daily telegraph TUeSDAY_April 02_2013

viewpoint

Native talent and investment boosts pace of innovation Conor Lenihan

Technoparks: invest in people and hi-tech success will follow continued from PAGE 1

filled the gap between science and the free market. But in the past five years, many special economic zones (SEZs) and technoparks have sprung up, aiming to benefit from Russia’s vast scientific potential and wean the country’s economy off its raw materials dependency.

Bright Idea

“There are currently over 90 technoparks and special economic zones offering various tax breaks and cheap office space,” Mr White notes. “Probably about half of them are not effective because federal and local officials approached them as huge real-estate projects without establishing the critical relationships between scientists, entrepreneurs and venture funds. “They thought they’d build the infrastructure and the market would take care of the rest. It doesn’t work that way – but now the technopark is finally seeing an influx of entrepreneurs.” The sprawling Idea technopark in Kazan (450 miles east of Moscow on the Volga River) was set up on the grounds of an abandoned defence plant in 2004 with the aim of creating hi-tech businesses. By providing two key services – cheap rent and sound business advice – the technopark graduated enough firms within three years to become self-sustaining; by 2007, its companies were paying enough taxes into the local budget to repay the start-up capital. “For the past few years, we’ve been independent of the regional budget, and this is important,” says general director SergeiYushko.“Our experience proves technoparks are a viable model for economic development.” Most of the companies at Idea provide engineering services, software or web design. One such company, Smarthead, has scored topnotch clients as diverse as Honda, Danone and L’Oreal. After three years, graduates of Idea have the option to leave the technopark, usually securing bank loans in-

dependently to acquire office space, or moving into its business park, where rent is no longer subsidised. There, neighbours include the local R&D branches of international behemoths such as GE, Honeywell and Siemens. “The foreign companies come, first and foremost, for the qualified personnel,”says Mr Yushko, arguing that intellectual capital is the key to added-value projects.“I’m a believer in the unpopular notion that we don’t need factories in Russia. Production will eventually be moved to where you have cheap labour. Our advantage is people and their ideas.”

Exciting times

Kendrick White believes that the government’s investment of billions of dollars into special economic zones and technoparks is now paying off. “They’re starting to get

Idea technopark in Kazan (450 miles east of Moscow) was set up on the grounds of an abandoned defence plant in 2004 with the aim of creating hi-tech businesses to the root of the issue – how to get the flow of new companies into them and successfully commercialise science,” he says. “This is will be the exciting phase over the next five years because the officials in Moscow at Skolkovo, the Russian Venture Company and similar organisations now understand this.” “Games and programming outsourcing have been the first signs of Russia’s emerging hi-tech sector, but I’m a lot more excited about projects in microelectronics, medical sciences, nanotechnology, chemistry, space and quantum mechanics that will gain global recognition in the coming years,”says Mr White. “If you go into any Apple store in the United States, you’ll discover that a surprisingly large number of their top 100 products come

from Russia,”says PekkaViljakainen, an adviser to the Skolkovo Foundation. “But most of them have offices in California and hide their Russian origins.” “I’m currently invested into the [St Petersburgbased] Speech Technology Centre, which is developing cutting edge voice-recognition software, and Borean Electronics. These will become well-known brands globally in the coming years.” For his part, Mr White singles out Kuzbass technopark in the coal-mining Siberian region of Kemerovo for developing coal-based sorbents to absorb oil spills,and the pharmaceutical cluster in Obninsk (“home of the peaceful atom”) offering cutting-edge solutions to medical problems.

Horizontal integration

In the US, it was the BayhDole Act of 1980 that played the“critical role of transferring patent rights from the federal government to universities and small businesses,” says Mr White. “A Russian equivalent is currently under development in Russia’s parliament. This is critical. What Russia’s leaders are beginning to realise is that it all has to be part of a comprehensive ecosystem,” he says. “In addition to building up the technoparks’ infrastructure, you need to link them with scientists in nearby universities and provide management training. You need a proof-of-concept centre to test the commercial viability. Then you need an accelerator programme that can contribute real money to developing a prototype. “Soviet tradition has most scientists and entrepreneurs looking to budget-holders in Moscow for money; what needs to happen is local horizontal integration between all these forces.”

rbth.ru/skolkovo

erman statesman Otto von Bismarck once famously observed that the Russian cavalry were“slow to saddle up, but ride fast”. Nowhere is this saying truer than in innovation, where Russia has climbed rapidly up the innovation rankings in the past five years. France’s Insead Business School recently placed Russia in 51st place in its innovation index, while a new Bloomberg ranking put the country as high as 14th worldwide in a measure that looked at research and development intensity, among other things. The collapse of the Soviet Union dealt a tough blow to the prestige and standing of Russian science. The resulting human capital flight, through the emigration of talented Russian scientists, engineers and technologists, was dramatic. Just ask Cisco Systems, now a strong promoter of Skolkovo, Russia’s flagship innovation project: it has no fewer than 700 Russian émigrés among its staff in Silicon Valley alone. The sharp increases in oil, gas and commodities prices in the 2000s also left an economy lopsided and in need of diversification, modernization and improved infrastructure – with a particular focus on growing small and medium-sized businesses. The OECD has stressed the need to create alternative champions to the giants Gazprom and Rosneft in the non-resource sectors. Of course, these companies are vital for Russia’s revenues, but nimbler, more innovative, small companies need to emerge from the country’s research landscape. In response, the government has launched a series of initiatives on innovation, including technology platforms, tax benefit-driven territorial clusters, special economic zones and development institutions such as Skolkovo, Rusnano, the Russian Venture Corporation and the Russian Direct Investment Fund. When fully built, Skolkovo will be a brand new, hi-tech city 12 miles south-west of the Kremlin. Since its inception has already created a startup pipeline of more than 850 companies, in addition to the presence of large global corporates, such as Samsung, Intel, Microsoft, Honeywell, Siemens, J&J,

Special to Russia now

SAP and BP – all of which are either locating R&D centres or venture funding start-ups. All of this has been accomplished in under three years. In my native country, Ireland, the decision to ramp up R&D spending came about as a result of success in inward investment, and over a 10-year period commercialisation began to occur. In Russia it is happening at a much sharper pace, thanks to huge investment from the state, the obvious technical talent and the valuable market opportunity that Russia represents for investor companies. Apart from the traditional locations of research excellence, a number of other technopark locations, including Skolkovo, are set to emerge. Locations such as Novosibirsk, Nizhny Novogorod,Tomsk, Ulyanovsk and Zelenograd are providing a competitive R&D challenge. From Cold War days, Russia had a total of 11 closed cities where research scientists worked, mainly on Soviet defence-related projects. Nowadays, those skills are being put to commercial use instead, especially through Skolkovo. While Skolkovo will accommodate more than 31,000 residents, Tatarstan is creating an innovation hub of some 150,000 scientists, engineers and information technology professionals. Nikolai Nikiforov, the author of the idea, was last year appointed Russia’s Communications and IT Minister at the age of 29. The Massachusetts Institute of Technology experts managing the development of the graduate-only Skolkovo Institute of Science and Technology, or SkolTech, hope Russia’s rise up the research rankings will ensure talented Russian technologists will not have to leave the country to pursue their careers elsewhere. SkolTech aims to instil values of commercialisation, top-quality research and entrepreneurialism with thirdlevel institutions from all over Russia making a contribution. The ready availability of significant talent, funding and WTO accession are fuelling an investment push toward Russia. Conor Lenihan is Vice President for External Economic Relations at Skolkovo Foundation. He previously served as Ireland's Minister for Science, Technology and Innovation.

In Focus

Patent success in the zone At this year’s Davos Forum, the Russian government announced the launch of a new branding campaign, Invest in Russia. It has also hired Goldman Sachs as adviser to improve its business image in the next three years. A major priority will be to accelerate the development of the country’s special economic zones (SEZs). Having appeared in their present form only in 2005, Russia’s special economic zones now host 57 foreign companies from 21 countries. “Our company faced a tricky choice: where to locate our production facilities, in Russia or some other Eastern European country? In the end, we got residency status in the Alabuga SEZ in the Republic of Tatarstan last December,” says

Alexei Zavalev, 3M Russia’s legal director. The tax incentives are good: 3M will pay a 2pc profit tax in the first five years, instead of 20pc. It will also be exempt from VAT, import duties on parts and equipment and enjoy free electricity. Designed to stimulate innovation, SEZs have led to the filing of more than 350 patents in Russia. They have expanded into industrial production, tourism and shipping, and attracted Boeing and Apple. All SEZ residents must be approved via a supervisory board and the Ministry of Economic Development, a procedure now being simplified to dovetail with Russia’s aim to rise to No 20 in the World Bank’s ease of doing business ranking by 2018.

the contacts • Russian Venture Company, leading state VC fund ›› www.rusventure.ru/en/

• Skolkovo, state-sponsored tech hub nearing completion in south-west Moscow (in co-operation with MIT)

• Marchmont Innovation News, leading English-language resource on Russian technoparks ›› www.marchmontnews.com

• Rusnano, state-owned nanotechnology giant

›› www.sk.ru/en

›› en.rusnano.com

• Russian Special Economic Zones

• Association of Technoparks (in Russian)

›› eng.russez.ru

›› www.nptechnopark.ru

Special report

Comment & Analysis

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Magnitsky-Browder trial: prosecuting Dead Souls http://rbth.ru/24015

NOW IS NOT THE TIME TO BE THROWING STONES Yevgeny Shestakov ANALYST

vents in civil war-torn Syria have demonstrated the lamentable inability of Russia and the West to agree on a mechanism to overcome the crisis. The only consolation is that it has made leading powers think about how to structure dialogue and where the fine line lies that separates fundamental contradictions from pragmatic policy. On one hand, the recent talks in London between the Russian and British defence and foreign ministers can formally be described as a failure. Not even a hint of a compromise was achieved on the prospects for a settlement in Syria. And yet the two countries stressed the need to continue strategic dialogue. The ministers were at pains to emphasise what united Moscow and London, playing down the issues on which they failed to agree. I would not describe this as a form of politeness. The emergence of new challenges – North Korea’s nuclear tests and the rapid development of Iran’s nuclear programme – have forced world powers to renounce confrontation in favour of partnership, such as it is. Geopolitical competition is being replaced with the awareness that there are enough areas in which Britain and the US could interact with Russia to mutual benefit. But for this to happen, all sides have to

NIYAZ KARIM

Pragmatism requires that all sides should refrain from building up mutual tensions publicly move away from exchanging “pinpricks” under various pretexts and start “gathering stones” to build a new centre for managing international processes, along with the UN mechanism. Whatever the explanations given in Washington for not

going ahead with the final stage of missile defence in Europe, it certainly allayed some of Moscow’s fears for its security and created the prerequisites for a meeting between Vladimir Putin and Barack Obama at the G8 summit in Northern Ireland and later at the G20 summit in St Petersburg. I would guess that the publication of the names of Russians on the Magnitsky list, scheduled by the US Congress for April, will not provoke such a negative reaction from Moscow as one might have expected only a few months ago.

Granted, a tit-for-tat response, publishing a list of US officials banned from entering Russia, cannot be avoided, if only as an obligatory diplomatic formality. Whatever the cause of the UK court’s decision to postpone the Litvinenko inquest for several months, it is clear that this gave Moscow and London the breathing space to restore bilateral relations. These relations had been greatly weakened in recent years, when foreign policy dialogue was reduced to a minimum. Not the least of the reasons for this was the

Litvinenko case, inherited from the previous British government. Last month, the US ambassador to Moscow, Michael McFaul, tweeted a link to a 2009 Obama speech, in which he said that he wanted to see a strong, peaceful and prosperous Russia. Why did he choose to remember this speech now? Clearly, Washington has decided that it cannot build a fully fledged global security system without Russia. Attempts to resolve international problems without Moscow are doomed to pro-

duce more Syrias. The UN Security Council has been unable to adopt a consensus decision due to objections put forward by Russia and China. In Britain and France, demands are growing for unilateral supplies of arms to the Syrian rebels, bypassing existing Security Council resolutions and the EU’s embargo on this kind of operation. But supplying weapons to Assad’s opponents will amount to a death knell for international institutions, demonstrating their inefficiency in crises. That would speed up the global arms race, prompting non-aligned states to think about developing nuclear weapons as their best defence. By contrast, Russia is calling on its partners to be more pragmatic and not renounce existing international institutions just to settle the Syrian crisis. Moscow is calling on its partners to “gather stones” and not to throw them at each other in the future. Pragmatism requires that all sides must refrain from publicly building up mutual tensions. Differences over Syria or missile defence will not go away soon, but more discussion of these issues should take place behind the scenes. There are many areas where Moscow and the West agree more closely, and it would be beneficial if they were made public. Yevgeny Shestakov is international politics editor at Rossiyskaya Gazeta.

THE FADED FACE OF A BYGONE ERA Yevgeny Gontmakher ANALYST

oris Berezovsky, who died last month, was a shrewd self-promoter, but he was never the real embodiment of an era. It was BorisYeltsin, Russia’s first president, who defined the era of the Nineties, working with people who, while less known to the general public, played no less of a role in the events of that time than Berezovsky did. Admittedly a smart and well-educated professional, what Berezovsky did become was the face of that era. However, he fell victim to his own ambitions, and thought his power had no limits. In the Nineties he rose rapidly from academic to wheeler-dealer small businessman, established contacts with the powers-that-be, got access to Yeltsin’s private office, and started positioning himself as a powerbroker – a figure who could informally decide the fate of the country’s lead-

NATALIA MIKHAYLENKO

ers and, by extension, the fate of the entire nation. An overblown ego was his biggest flaw. In today’s Russia, we have inherited the political legacy of the second half of the Nineties. While it has since

undergone certain modifications, its fundamental principles have remained the same – just take a look around. For instance, look at the economy: opaque deals between private companies involving public property

with informal“mediation”by the state, and so on. Especially important is the contribution of Berezovsky – albeit not by him alone – in the establishment of informal power structures, something Russian society is

EU MUST STOP THE CYPRUS CONTAGION SPREADING Alexei Kudrin FORMER FINANCE MINISTER

n 1998 Kirienko’s government advised that the preferential tax regime with Cyprus be terminated. The Cypriot leadership was shocked – the island stood to lose half its business. The Cypriot president convinced BorisYeltsin not to cancel the privileges. As compensation, Cyprus agreed to buy and host an S-300 missile system, which had been paid for but not delivered because of op-

position from Turkey. Cyprus viewed Russia as a geopolitical ally then. Even now, Cyprus provides services and support for Russian business. But it cannot shy away from the fact that in 2004 it joined the EU and in 2008 the eurozone. Cyprus is no longer in control of its own destiny. German Chancellor Angela Merkel has spoken a lot about the country’s “dysfunctional” financial model, which has greatly undermined the credibility of the Cypriot financial system. The central indicator is the ratio

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of banking sector assets to GDP, which in Cyprus is seven to one. In Luxembourg banking assets exceed GDP

The ‘dysfunctional’ Cypriot model came about because local banks were forced to write off Greek debt by a factor of 20, in Britain five, while in Germany the figure is the European average of around three. The

“dysfunctional”Cypriot model came about because local banks were forced to write off Greek debt. It is possible that Cypriot banks were not very fussy when it came to buying Greek bonds, but all EU policy was aimed at saving Greece. Investors believed the eurozone would not let Greece fail. And therein lies a contradiction: for political reasons, investors overvalued eurobonds in the zone’s periphery. Cyprus became a victim of the spillover from the Greek crisis. The situation in Euro-

still suffering from today. Berezovsky did a lot to prevent public politics and public institutions from emerging in Russia. Manipulation, scheming and building sophisticated cliques were what filled the gap instead. The result was that all crucial policy decisions in the second half of the Nineties were made behind closed doors. The role of public institutions, such as the State Duma and the government, let alone civil society, was sharply reduced. Berezovsky’s other negative legacy – and he admitted as much – was the distortion of the role of the media in Russian society. He was among the first to turn the country’s media into a tool for political struggle and propaganda campaigns. During his years in exile in the UK, I don’t rule out that his ambitions let him down once again. The failed litigation against former business partner Roman Abramovich could well have broken him psychologically.

He was certainly depressed during the past few months. Could a new Boris Berezovsky emerge in Russia nowadays? In short, no. Such a figure is impossible today, because during the more than 10 years since his flight to London, politics in Russia has taken on an established shape. People who seek to position themselves as power brokers cannot enter the public stage under Putin. Berezovsky tried to impose his point of view on Putin publicly – and paid the price. If, sooner or later, Russia makes the transition to a developed political system, people like Berezovsky won’t survive there – they are unthinkable in countries where open procedures prevail over informal networks. In such an open society, anyone who is outside those procedures cannot exert serious hidden influence.

pe is very fragile. Cyprus can infect other countries. And not only because money will flee the island. The threat of a tax on deposits has spooked investors in troubled states, and the outflow of deposits from the European periphery could accelerate. The sought-after sum of €17bn (£14.4bn) could be paid by the EU but we should note two circumstances. First, Cyprus must show the ability to save its own skin, because otherwise no country would bother to reorganise its financial system. The second is a politically motivated unwillingness to help“Russians”whose funds in Cyprus, according to eurocrats, are of“dubious origin”. Measures taken so far will not raise enough money or eliminate risks. Inadequate

support from the EU and the ECB may even cause Cyprus to leave the eurozone. In this case, the conversion of bank assets and payment of salaries in local currency would undermine the financial sector and reduce the quality of life for islanders even more than if the euro was kept. The danger is that the risk for all peripheral European countries will rise. The crisis will intensify, and it is just a matter of time before the next weakest link emerges. The EU must do all it can to rescue Cyprus because overcoming the consequences of the contagion would be far more costly.

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 MARIA AFONINA EXECUTIVE EDITOR OLGA DMITRIEVA EDITOR (UK EDITION) ALEXANDRA GUZEVA ASSISTANT EDITOR TIM WALL 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

Yevgeny Gontmakher is deputy director of the Institute of World Economy and International Relations.

Originally published in Kommersant newspaper

Alexei Kudrin is chairman of the Committee of Civil Initiatives.

OPINION

Brics is building a model of global co-operation Alexander Yakovenko DIPLOMAT

n the run-up to last week’s highly successful Brics summit in Durban, South Africa, I read a number of articles in the British media saying the countries in the forum (Brazil, Russia, India, China and South Africa) were not growing as fast as they had and that Brics was a loose and unsustainable group of countries that saw the world in different ways. I cannot disagree more with these statements. Brics,launched as a forum on Russia’s initiative in 2006, has rapidly become an important factor in world politics. It reflects a trend in global development – one towards shaping a polycentric system of international relations, increasingly characterised by the use of non-institutionalised mechanisms of global governance and network diplomacy, and the growing economic interdependence of states. The authority of Brics in international affairs is based on the growing economic power of the participating states, which act as a major driver of the global economy, and also on their significant share of the world’s population and rich natural resources. The political influence of Brics stems from the fact that the states are active members of leading international organisations such as the United Nations, the G20, the Non-Aligned Movement and the Group of 77 (a large coalition of countries in the UN), as well as regional associations. In Brics we promote strict observance of the UN Charter and international law in general, as well as such principles as openness, pragmatism, solidarity, and a non-bloc and non-aggressive attitude with regard to third parties. A number of fundamental, long-term factors bring Brics countries together. Brics members advocate the creation of a more balanced and more just system of global economic relations. All our countries are interested in long-term sustainable economic growth worldwide and the reform of the financial and economic architecture to make it more efficient. In fact, the average growth of the Brics economies in 2012 was as high as 4pc, compared to 0.7pc in advanced OECD economies. Our common goals also include the rejection of

power politics and policies encroaching on the sovereignty of other states. So, our approaches towards important issues such as the Syria crisis, the stabilisation of Afghanistan, Iran’s nuclear programme and the Middle East peace process, do have a lot in common. Brics countries face similar problems and challenges in economic and social policy, stemming from the need for large-scale modernisation. Given the political will, Brics can potentially become a key element of a new system of global governance, particularly in the areas of finance and economics. One of the advantages of Brics is that it is a new model of global co-operation, transcending the old patterns of east-west and north-south dividing lines. Whatever the differences, everyone feels comfortable dealing with the other partners, since nobody is trying to impose their will on the others. Brics’ credibility and influence in the world is evi-

Brics’ influence in the world is shown by its growing contribution to global development denced by its growing contribution to the efforts to stimulate global development. This important matter was specifically addressed at the Brics Leaders-Africa Dialogue Forum, which was held alongside the Brics summit in Durban. The growing importance of Brics was underlined by Britain’s Foreign Secretary, William Hague, who said in a recent speech that“Brazil, Russia, India and China now account for 20pc of world economic output. The figure has doubled in 10 years, and is still rising.” We can also see that the British Government highly values its relations with the Brics member countries, and we support the idea of developing a positive agenda of co-operation between our economies and the UK. Since geopolitics now mean geoeconomics, it would be natural for Brics to evolve towards a full-scale mechanism of strategic interaction. AlexanderYakovenko is Russia's Ambassador to the United Kingdom and a former Deputy Foreign Minister.You can follow him on Twitter at: @Amb_Yakovenko

Keep in touch with the Russian Embassy in London on these 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

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Igor Sakhnovsky Prose master with a poet’s gift

OPINION

Novelist works miracles with the mundane

Why women prefer the personal to the political

Real life is enough: we don’t need fantasy, says Igor Sakhnovsky, whose extraordinary stories are rooted in reality. ALENA TVERITINA RUSSIA NOW

A young man hears the voice of his long-dead grandmother ordering him to go to a nearby town. At the train station, he inadvertently saves the life of a homeless man. This man turns out to be his g r a n d f a t h e r, w h o wa s thought to have died in the camps many years ago. These serendipitous events – which the author asserts are true – prompted the then 30-yearold poet and magazine editor to write his first novel, The Vital Needs of the Dead. Sakhnovsky, 54, writes prose that has the potential to become classic literature: stylistic originality and opulent language combine with unconventional and entertaining plots where the mundane and the miraculous merge into one. Many of the characters are based on real people but are joined by archetypes including a ghost, a wandering Jew, and an omniscient sage. The author does not restrict himself to a particular time frame: a novel can weave together stories of the Middle Ages and the present day. “Magic realism,”thinks the reader.“Pseudo-documentary prose,” says the author. “Life’s cornucopia of non-

NOTABLE TRANSLATIONS 2013

Zakhar Prilepin WRITER

shortlisted for the Big Book, National Bestseller and Russian Booker prizes. The writer’s background is unusual by the standards of Russian literary circles: almost all of the best-known authors live in Moscow or St Petersburg, or ply their trade abroad. Sakhnovsky lives in the Ural city of Yekaterinburg, where he is literary editor of a magazine.

CURRICULUM VITAE TITLES IN ENGLISH: THE VITAL NEEDS OF THE DEAD; A FAMILY OF MONSTERS

Igor Sakhnovsky has been in the running for the most prestigious Russian literary awards. Despite not getting the final nod, he has been

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Mystery man: Sakhnovsky says his books are inspired by a keen interest in the miraculous

ible exterior, but the volatile essence of what is taking place. It is not a method, not a literary device, not a cerebral design, but the writer’s all-seeing eye.” Sakhnovsky’s rich and idiosyncratic language stems from his long fascination with poetry: he published two collections of verse in the Eighties.“However, fine [word craft] should not drown out the overall appeal,” he says. “I greatly appreciate captivating prose.” In his second novel The Man Who Knew Everything, Sakhnovsky experiments with the genre, twisting the storyline to the limit. All of a sudden, the protagonist is endowed with superpowers and hunted by several global intelligence agencies. In Russia, the novel was adapted for the screen by director Vladimir Mirzoyev, who was the first to appreciate the cinematic quality of Sakhnovsky’s prose.

fictional material renders fantasy unnecessary.” But the world of science fiction sometimes claims him for itself. For example, in 2008, Sakhnovsky’s second novel The Man Who Knew Everything won the Bronze Snail prize, awarded to the finest works of fiction selected by Boris Strugatsky (other winners of this award include Viktor Pelevin, Dmitry Bykov and Zakhar Prilepin). Sakhnovsky believes his books contain neither mystery nor fantasy, just a keen interest in what is usually described as miraculous: “Scientists consider that only about 6pc of what surrounds us can be perceived. The remaining 94pc cannot be recognised by the ordinary physical senses.” This 94pc is the subject of his research. Fellow writer Lyudmila Ulitskaya said of the author: “Sakhnovsky is in possession of a rare gift, which he uses to describe not only the vis-

Death becomes her: a subtle chronicle of lost time and love The Vital Needs of the Dead is an absorbing and powerful account of growing up and learning to love in provincial Soviet Russia. PHOEBE TAPLIN SPECIAL TO RUSSIA NOW

For a book dedicated to the narrator’s dead grandmother, this is a surprisingly sexy novel. Gosha Sidelnikov’s earliest memory of Rosa is “naked and nocturnal” and she remains an active figure in his life long after her death. Sidelnikov is often passive in his later relationships, with mercurial Lora, seductive Nadia, or voluptuousValentina; sex is often described in terms of being embraced,

ALEXANDER TEREKHOV THE STONE BRIDGE Glagoslav

ANDREI GELASIMOV THE LYING YEAR AmazonCrossing

ILYA BOYASHOV THE WAY OF MURI Hesperus Classics

ALEXANDER SNEGIREV PETROLEUM VENUS New Russian Writing

n this prize-winning novel, where fiction and non-fiction merge, the protagonist investigates a murder that happened 50 years earlier. Two teenagers from families close to Stalin were shot on Bolshoy Kamenny Bridge in front of the Kremlin towers. It says more about Soviet life in the 20th century than any non-fiction work.

his novel by Andrei Gelasimov evokes the shifting morality of Moscow in the Nineties; behind the glamour is the emotional carnage of a world where trust is impossible. The novel is a dark comedy in Gelasimov’s usual, colloquial vein and explores fragmented, postmodern life, with its endemic failure to connect.

n impudent cat, a circumnavigating sperm whale, a latter-day Moses and an aviationmad Arab: these are just a few of the extraordinary characters who populate the pages of Ilya Boyashov’s celebrated adventure story. The Way of Muri won the Russian National Bestseller award when it was first published in 2007.

promising young architect – and the single father of a teen with Down’s syndrome – turns away from his glamorous lifestyle to raise the boy by himself, following the discovery of a mystical picture. This somewhat bizarre modern-day fairy tale, despite its unlikely twists and turns, reads easily, narrated in a simple, unpolished voice.

Adaptation Soviet-era short stories dusted off for TV

Bulgakov: a doctor writes

KINOPOISK.RU

Man and boy: John Hamm, left, and Daniel Radcliffe – two incarnations of the same character Sky Arts’ TV version of Mikhail Bulgakov’s A Young Doctor’s Notebook surprised many, as he is better known at home for other works. ALEXANDRA GUZEVA RUSSIA NOW

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Like Anton Chekhov, Mikhail Bulgakov was a doctor; he worked for a clinic in a village about 200 miles from Moscow. But in the early part of the 20th century, travelling to an emergency at night through snowdrifts by troika, it might as well have been 2,000 miles from the metropolis. The script for the TV drama series, like the shortstory collection, begins with a young, inexperienced doctor who goes to work in such a village. Immediately, he is called upon to extract teeth, supervise births and treat syphilis. Swapping wizard’s wand

Sense and censored ability: Bulgakov was blacklisted

for doctor’s bag, Harry Potter star Daniel Radcliffe masterfully depicts the panic of the main protagonist, scurrying from the agonised patient back to his room to consult his medical textbooks. Less well-known than The Master and Margarita (his

magnum opus) and Heart of a Dog, A Young Doctor’s Notebook is not the only collection that draws heavily on Bulgakov’s life. Notes on the Cuff (1923) reflects on his literary journey, especially his experience of living on a writer’s salary in post-revolutionary chaos. In it, the main character, delirious with typhus, is surrounded by mysterious events. It also pokes fun at the Soviet censors – Bulgakov had scores to settle with them. In a letter to the Russian writer and dramatist Maxim Gorky, Bulgakov wrote: “All my plays are banned; there is not a single line of my prose printed anywhere.” Bulgakov considered A Theatrical Novel his best work.When an unhappy journalist decides to quit his boring job to write a novel, the guests he invites to his house promise him that his novel

o the western reader with a basic grasp of Russian literature, contemporary Russian women’s prose evokes such names as Lyudmila Ulitskaya, Tatyana Tolstaya and Lyudmila Petrushevskaya, all of whom established a reputation in the late Eighties. It’s probably futile to seek a common denominator among these literary heavyweights. If anything, their prose generally weighs heavily on the reader, at times painting the bleakest impression. The explanation is simple: these writers spent the greater part of their lives in the Soviet Union, and their recollections of these years tend to be harsh. The next generation of serious writers, emerging in the Nineties, yielded much less. The strongest prose writer of that period Olga Slavnikova, arguably stands alone, an heir of the Nabokovian tradition. Overall, however, women’s prose of the Nineties carried a sense of rampant, almost shameless liberation. Women writers strove to distance themselves from Soviet prudishness and any attempt to restrict the freedom of the individual. Yet an entire generation of new female writers who did not fully experience those times had matured, and was compelled to find its way in this equally unsavoury new era. In the “Noughties” there came an amazing discovery: without Soviet rule, however awful parts of it were, women did not become any happier. I was recently commissioned to

will be staged at a theatre, only to deceive him. Sadly, Bulgakov had experienced this situation personally, too. Written in his characteristic note-like style and, again, autobiographical in nature, the narrator reads “Notes of the dead”supposedly given to the writer by someone about to commit suicide, with the request that nothing be edited or changed. Despite being written 10 years after Notes on the Cuff and A Young Doctor’s Notebook, the novel present a similar exploration of despair. Joseph Stalin refused to approve Bulgakov’s play Days of the Turbins, a drama based on one of his earliest autobiographical works, the novel The White Guard. Examining the toll the Revolution has taken on the everyday life of the Turbin family, readers feel the tumult as the horrors of civil war unfold, disrupting normal family life, during an especially harsh winter in Kiev. Blizzards are one of Bulgakov’s favorite motifs, and these storms make brutally effective appearances in The White Guard and A Young Doctor’s Notebook. For Bulgakov, snow both accompanies and generates chaos and confusion. In fact, many of the trials that characterise his work – civil war, injustice, illness, despair – also characterised his life. What is truly moving is the sometimes funny, always terrifying, beauty he made of it all.

AUTHOR: IGOR SAKHNOVSKY PUBLISHER: GLAGOSLAV YEAR: 2012

engulfed or “dragged in”. It is the narrator’s passivity that makes him an admirable chronicler of history, an observer of lost time. The introspection of childhood and adolescence is backlit by the upheavals taking place in late 20th-century Russia. On the opening page, the narrator says he finds it hard to “speak about her in the third person”; on the last page, he switches to the first person. Grandmother’s vital needs turn out to be his needs; her desire to “overcome the space and time of that huge country”is his final ambition; and the chronicle of Sidelnikov’s memories of“this woman”is, in fact, his autobiography.

compile an anthology of the latest women’s prose. It comprised short stories and novellas of 14 writers aged 25 to 40: Maya Kucherskaya, Marina Stepnova, Alisa Ganieva, Anna Starobinets and Natalya Klyucharyova. Before submitting the manuscript, I read it again and was surprised to see just how clearly some tendencies shone through. In short, contemporary women’s prose is characterised by political apathy. Another hallmark of this genre of prose is the determination of the heroine to find happiness – but this determination never translates into reality. There is no more Stalin, no more NKVD, no need to talk about mass repressions. But nonetheless one gets the sense that the lyrical heroines invented by today’s women writers inhabit a deeply oppressive world. At the same time, the values expounded by the figureheads of women’s prose are traditional and even conservative: the sanctity of human existence and daily life, family and compassion, and profound, unobtrusive yet distinct religious devotion. But what troubled me in these texts was the absence of men.The woman lives with all her might, and does not surrender until the very last moment. And, it seems, she is now learning to choose whether to be happy or unhappy. A woman bears a child, which means there must be a future, which means there must be hope. And hope there is. In spite of everything, it is there; but where I have yet to understand. Evidently, hope is woman herself. rbth.ru/23665

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Supermodel Natalia Vodianova: Steve Jobs inspired my charity http://rbth.ru/24051

Corporate social responsibility Airline helps sick children and orphans by providing free flights and volunteer programmes

Architecture

Celebrating the miracle of wooden churches

Why caring is all part of the job

A many-domed wooden church that stands in a field of snow is a quintessentially Russian image. PHOEBE TAPLIN SPECIAL TO RUSSIA NOW

More than a decade ago, architectural photographer Richard Davies found old postcards of wooden churches by Ivan Bilibin, a Russian artist famous for his fairytale illustrations. In 1902, Bilibin had made the first of three trips to explore the folklore-rich Russian North and record his findings. Exactly 100 years later, Davies set off to follow in his footsteps. His journeys would span nine years and many thousands of miles. The resulting photographs are a haunting survey of perishable, architectural treasures in various stages of decay. Less than half of the churches Davies searched for had survived the intervening century of communism, war and weather. Collapsing towers and copies of anti-religious propaganda from the Twenties are shown alongside breathtaking shots of churches under Arctic skies or next to sunlit rivers. Several European cities, including London, have hosted exhibitions of these photographs and the book has done well. John Sandoe, a bookseller in Chelsea, tweeted last November: “We’ve sold more of the fab Wooden Churches than Fifty Shades of Grey.” Wood can be a fragile building material but the local pine logs are dense and last well. Traditional building techniques did not involve nails or complicated tools, simply an axe and a beautiful dovetailing of interlocking pieces of wood. “They were building with a material they understood intimately,” says Davies. “The technology is simple but skilled architects and craftsmen can push it to the limit.” For those travellers who want to attempt their own church safari, Davies recommends starting in Kargopol, with its 17th-century stone churches, and then following the Onega River towards the White Sea.

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Helping hand: flight attendant Yulia Makhova at work on the Brief History of Aviation project

THE COMPANY CEO

Olga Pleshakova

ALENA TVERITINA RUSSIA NOW

“I’m Sonya Leventsova and I made a cartoon. The last film we made was about air balloons,” a lively girl with a shaved head says on camera. The cartoon Sonya made was drawn by children undergoing cancer treatment in Moscow and St Petersburg clinics. Yet there is nothing in those colourful episodes of the Brief History of Aviation project to suggest the authors are ill. The videos tell viewers, in children’s voices, of man’s first attempts to conquer the sky: how Leonardo Da Vinci chased a fly to see how its wings worked. It took 10 months to create five episodes of the series. The project was organised by Transaero Airlines with the St Petersburg ani-

mation studio Da, and the cartoons are now shown inflight and in the airline’s business lounges. There are already plans to make a sequel: “The results have shown that children are gaining confidence,” says Elena Zhuravlyova, head of the social programmes group at Transaero Airlines. “They can see they mean something and this has a positive effect on their rehabilitation, doctors and psychologists confirm.” The project is just one of Transaero’s charity programmes, aimed at helping children in difficult situations, which have received a variety of awards. In 2009, its corporate volunteer programme won the People Investor award of the Russian Managers’ Association. In 2012, Transaero’s corporate social responsibility programme made the top three in Russia, following Sistema JSFC and pharmaceutical company Katren, according to an annual joint study by the Vedomosti newspaper,

PricewaterhouseCoopers and non-profit partnership Donors Forum. In the autumn of the same year, the airline was assigned the top AAA(s) corporate social responsibility rating. Its programme, Back to the Future, focuses on three major areas: air transport, rehabilitation and volunteering. The airline is working closely with Russian charity

All parents need to do is call to order a free ticket so they can attend hospital appointments foundations to assist in the treatment and rehabilitation of children with cancer, as well as helping orphans. The airline gives children and parents free air tickets to take them to Moscow, St Petersburg or even abroad. “Transaero’s help is invaluable”,says Jamilya Aliyeva, chair of the Nastenka Charitable Foundation, which

helps children suffering from cancer.“With airline tickets being so expensive, many parents could not afford to bring their children over for follow-up tests after treatment. Now all parents need to do is call to order a ticket for free. Children arrive on time for examinations, which is very important since the loss of a single day can cost a life.” The airline also organises winter and summer camps for child cancer patients, providing medical and psychological rehabilitation after treatment, and funds a year-round facility in Moscow, where children and their parents can receive legal aid and psychological help. Transaero employees have been actively involved in child cancer patient rehabilitation and social adaptation of orphans, with 500 of the company’s staff volunteering regularly. Experts say corporate volunteering has increased recently in Russia.

Ekaterina Tvorogova, 28, has been a manager with Transaero and volunteer in its social responsibility programmes for five years. She sings in the band, Nebesny Ekipazh (Sky Crew), which includes pilots and flight attendants, and plays at parties for sick children and orphans. “Pilots always attract great attention,” Ms Tvoro-

the company’s 200 employees who regularly take part in corporate blood donor drives. In other activities, employees make regular visits to hospitals and cancer clinics to entertain children with games and shows. “When you see a child fighting a disease, all your everyday worries fade away. You start looking at life from a different angle,” Ekaterina says. Many bring their families along to entertain the children. For example, Ivan Melnikov, 34, head of the flight documentation security, started out with Saturday visits to foster homes and orphanages together with his colleagues; he then began to take part in the parties for the children.“Once, I was a host at a NewYear performance and I made a real hit. Everyone wanted to take a photo with me – that’s because of my costume,” he laughs,” I was dressed as a rabbit!”He also brought his own children along once, aged eight and nine.

We let children try on the pilots’ caps and ask them about their planes. It’s a positive experience gova says. “We let children take pictures with them, try on their caps, ask them about their planes. It’s a positive experience for children who have beaten an illness, since they get to see people who are not wearing white coats. It gives them joy and maybe even brings them a little closer to recovery.” Ekaterina is also one of

Just like many other employees, flight attendant Darya Panicheva, 25, started out with one-off visits. Through their corporate volunteer programme, she learned about the Big Brothers Big Sisters programme, which takes care of orphans. Darya now has a“little sister”: Vika, 15, who lives in an orphanage. Darya explains: “We meet at least once a week. It is very important for the children to have friends who care for them, to socialise, because they are confined to a narrow circle of contacts.” For those who cannot help in person, there are options for making private donations for treatment that are then channelled to the relevant charities. “I believe that, unlike many other corporations, Transaero has built very sound and consistent relations with charitable foundations: it provides stability and lets us plan ahead”, Ms Aliyeva says.

LORI/LEGION MEDIA

Transaero’s award-winning volunteer programme gives employees a chance to bring happiness to sick children and orphans.

comes up with the ideas, such as flying children undergoing rehabilitation for day trips to different cities on flights where all crew members are part of the Transaero volunteer movement. She regularly meets volunteers and discusses their work. “I’m convinced the social initiatives of employees should be met with understanding and support by management,” says Ms Pleshakova.

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Stepping out: pilot Evgeny Bogach gives a young patient a taste of the high life

Experts say corporate volunteering has been increasing in Russia for several years. At Transaero, this initiative comes from the top: CEO Olga Pleshakova is convinced corporate volunteering is not just about the company’s social responsibility programme, but is an integral part of its HR policy that allows employees to show their best sides and develop their potential. Often Ms Pleshakova

Architectural gem: the Church of the Transfiguration on Kizhi island in Karelia