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Getting past the stereotype Russian abstraction on exhibit at MoMA of the Slavic beauty P.07

One year until the Olympics, where does Sochi stand?

P.08 MIKHAIL MORDASOV_FOCUS PICTURES

This special advertising feature is sponsored and was written by Rossiyskaya Gazeta (Russia) and did not involve the reporting or editing staff of The New York Times.

WEDNESDAY, MARCH 20, 2013

NEWS IN BRIEF

Entertainment A partnership between Hollywood and Moscow should thrill Russian families

DreamWorks to Build First Theme Parks in Russia

Putin nominates new head of Central Bank Elvira Nabiullina, a former economic minister and aide to President Vladimir Putin, has been nominated to lead Russia’s Central Bank. If confirmed, she will take charge of the bank at the end of June when current bank chairman Sergei Ignatiev retires. She would be the first woman to head the Central Bank. A Putin loyalist, Nabiullina is likely to take the Kremlin line on monetary policy, which may include a lowering of interest rates in the near future.

Arrest of star dancer causes further turmoil at the Bolshoi

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Soon, Russian fans of such popular franchises as “Shrek” and “Madagascar” will be able to see their favorite characters up close and in person.

VIKTOR KUZMIN SPECIAL TO RBTH

Russian commercial real estate firm Regions Group has partnered with DreamWorks Animation to build indoor theme parks in Moscow, St. Petersburg and the Urals city of Yekaterinburg. The project will cost $1 billion, with 30 percent funded by the company itself and the other 70 percent financed through bank loans. The theme parks will take up a total area of 10.7 million square feet, and construction sites have already been selected for St.

Petersburg and Yekaterinburg.

Negotiations on the Moscow site are still in progress.

Regions Group board member Amiran Mutsoev expects the project to turn a profit after 10 years, assuming that the parks attract 11.7 million visitors per year. The three cities are home to a cumulative 20 million people. The ticket price will be between $50–$80 and will include all rides.

The Russian parks are DreamWorks’ first project of this kind, and so it is not yet known what types of attractions — or what popular characters — the parks will feature. There is no shortage of options, however: “Shrek,” “Madagascar,”“How to TrainYour Dragon” and “Kung Fu Panda” are all popular DreamWorks films.

But even if DreamWorks has a corner on the market, there seems to be plenty of room for everyone. The Russian entertainment sector is growing at a rate of 10 percent per year.; the market grew 12 percent in 2011 alone. According to assessments from PricewaterhouseCoopers, Russia is one of the top 10 fastest-growing entertainment markets in the world, and more than 60 percent of the demand comes from Moscow, St. Petersburg andYekaterinburg — the three cities targeted for theme parks.

PwC predicts that by 2014, the entertainment market in Russia will be the largest in the EuropeMiddle East-Africa region, outstripping the current leader, Spain.

Mutsoev is certain the parks will not be a hard sell. “DreamWorks’ characters are the most popular in Russia,”Mutsoev said.

His assessment is backed up both by ticket receipts and DreamWorks management. Last year’s release “Madagascar 3” was the second-most successful animated film in the history of the Russian box office; the picture took in more than $48 million in Russian theaters, second only to 20th Century Fox’s“Ice Age 4.”And at the project launch, DreamWorks C.E.O. Jeffrey Katzenberg said: “DreamWorks’ characters are even more popular in Russia than Universal’s or Disney’s. Six of the 10 most successful cartoons and animated films were produced by DreamWorks.”

Pictured (L-R): DreamWorks C.E.O. Jeffrey Katzenberg and Regions Group board member Amiran Mutsoev celebrate a deal that will bring DreamWorks branded theme parks to Russia.

CONTINUED ON PAGE 4

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Rosneft has taken a 30 percent stake in 20 deepwater exploration blocks in the Gulf of Mexico held by U.S. giant ExxonMobil. The Russian oil company’s C.E.O. Igor Sechin announced the deal to an international audience of investors on March 6 at the Cambridge Energy Research Associates (CERA) Week in Houston, Tex.

Daughter of Pussy Riot artist visits mother in prison

Stalingrad: 70 years since the battle that changed history

REUTERS

IGOR ROZIN

tors an updated synergies forecast for the united company,” Sechin said.

Rosneft is in the process of buying 100 percent of TNK-BP. As part of the deal, Rosneft will pay BP some $12 billion in cash, and the British company will get a 19.7 percent stock interest in the Russian firm. Rosneft plans to pay TNK-BP’s other shareholder, Russian consortium AAR, $28 billion in cash for its stake.

“The consolidated balance of Rosneft will also include about $5 billion of cash accumulated on the accounts of TNK-BP,” Sechin said.

Political scientist Nikolai Zlobin has founded a new think tank in Washington, D.C., called the Center for Global Interests. The center was launched with a forum and panel discussion at the Brookings Institution on March 12. According to Zlobin, the center will focus on global politics, particularly on the United States, Russia and their bilateral relations. The first major project of the center will look at the G20 and Russia’s presidency of the organization.

© RIA NOVOSTI

Rosneft Touts Gulf of Mexico Deal, Arctic Exploration Sechin, an influential former deputy prime minister and close ally of President Vladimir Putin, emphasized Rosneft’s increased collaboration with foreign oil companies, such as Exxon, Italy’s Eni and Norway’s Statoil, to attract investment for the exploration of Russia’s offshore energy fields. Rosneft already has a strategic partnership with the U.K.’s BP, which last year became a major shareholder in Rosneft as part of the buyout of joint-venture TNK-BP. Rosneft is expected to conclude the deal in the second quarter of 2013, said Sechin at the conference.

“After the acquisition closing, Rosneft will provide to its inves-

New research center to probe U.S.-Russia relations

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Energy Russia’s oil major extends its reach both north and south

Rosneft acquires a 30 percent stake in an ExxonMobil project in the Gulf of Mexico, underlining the Russian oil company’s plans to become a bigger player in the global energy market.

Hundreds of Bolshoi Theater staff have signed an open letter in defense of dancer Pavel Dmitrichenko following his arrest as the mastermind of the acid attack on Bolshoi Artistic Director Sergei Filin. A source close to the theater said that those who signed the letter are not hostile to Filin, who is undergoing treatment in Germany, but want to prevent the investigation from making rash conclusions and defaming Dmitrichenko. Shortly after the letter was released, Filin held a press conference praising the work of the Moscow police and the speed at which they had concluded the investigation. He did not comment on the statement by his colleagues.

Rosneft is trading icy fields for warmer waters.

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Youth At one point, the Nashi youth group attracted tens of thousands to its rallies. Now the Kremlin says the movement has run its course

No Longer Ours: Nashi to Be Reorganized Pro-government forces have announced intentions to create a new youth-oriented political movement on the remnants of a former favorite project.

Nashi Up Close and Personal

ALEXEI BAUSIN

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A member of the Nashi movement participates in a rally wearing a cloak featuring a portrait of Vladimir Putin.

Sundance honoree “Putin’s Kiss,” tells the true story of teenage proKremlin youth activist Masha Drokova as she rises through the ranks of the Nashi movement and is eventually disillusioned with it. In the film, Danish director Lise Birk Pederson

follows Drokova over a four-year period. Drokova’s ultimate fallout with the Nashi movement propels the film forward as she befriends opposition journalist Oleg Kashin, who became an international figure after his near fatal beating in 2010.

In 2012, there were 20,000 activists left on the squares, ready to fight. Now everything is just repeating itself,”Yakemenko said in an interview with business daily Vedomosti.

“If we want something new and meaningful to take our place, then we need to change course politically. And it has to be the right course,” he added. “I don’t think anybody needs that.”

Political analyst Alexei Makarkin said that the movement has run its course.“The Nashi move-

ment had two goals: it wanted to control the ‘street,’ and it wanted to make sure that today’s youth was cut off from the opposition,” Makarkin said, adding that the organization had failed on both accounts. According to Makarkin, the authorities will continue to engage in youth politics, but efforts in this area will be more localized.

AP

The pro-Kremlin Russian youth movement Nashi (Ours), which made a name for itself by organizing outrageous political acts, is set for a complete overhaul.

Russian news media report that it will be replaced by a new youth organization with a new name and different objectives. The primary goal of the new movement will be helping young people better integrate into society. Russian daily Izvestia reported that the new organization will no longer take part in political actions and public rallies.

Nashi was founded in 2005 to support the political establishment and made its name through mass rallies. Vasily Yakemenko, one of the movement’s founders, stated that the Nashi movement viewed Russia “as the historical and geographical center of the world,” the freedom of which is threatened by the “unholy union of communists, fascists and liberals that is fueled by their common hatred of our president,Vladimir Putin.”

Many of the Nashi movement’s actions have been deliberately scandalous in nature. In 2007, activists held protests in front of the British Embassy in Moscow, accusing then-Ambassador Anthony Brenton of financing the Russian opposition.

By 2008, the movement had started to turn into a kind of con-

The primary goal of the new youth movement will be helping young people better integrate into Russian society.

The new organization will no longer take part in political actions and public rallies.

glomerate whose activities were directed at tackling issues that were only indirectly political. One of these projects was “Piggy Versus,”which involved Nashi activists periodically raiding supermarkets in order to clear the shelves of items that had passed their sell-by date.

Another project, called “Stop ’em,” attempted to enforce driving laws.

At a youth forum in 2010, Nashi activists set up an installation that featured the decapitated

heads of certain Russian opposition leaders and Western politicians on sticks wearing caps covered in Nazi symbols.

Time for a change Yakemenko believes the movement is ready for new direction.

“In 2005, 50,000 people came out to support the Nashi movement rally against the Orange threat in Russia. On Dec. 6, 2011, Nashi activists were the only ones who went to Mayakovsky Square in support of the election results.

The article is a combined report based on material from Izvestia and Vedomosti.

Education Startup aims to help students keep track of their classes and schools manage their workflow

A New Way to Keep Track of Assignments ADRIEN HENNI SPECIAL TO RBTH

Dnevnik.ru was founded in 2009 as a free service to help schools.

Traditionally, schools have coped with I.T. problems by buying or developing separate systems to manage different processes.

Dnevnik, however, takes a more comprehensive view. The St. Petersburg company’s cloud-based, modular platform aims to cover all the essential I.T. needs of schools, including management systems, learning processes (including online tests), social networking and messaging.

Dnevnik also offers real time information and alerts about class

million from Prostor Capital, a Russian fund concentrating on solutions for the public sector.

In September, Dnevnik secured $5 million from Runa Capital, a Moscow-based venture fund working in both the local and international markets.

Dnevnik is now trying to attract a new round of financing to accelerate its development abroad. By the end of 2013, Dnevnik aims to serve 40,000 out of 53,000 Russian schools, plus 20,000 schools abroad, mainly in Ukraine. The company has just started collaborations with schools in Hungary, Poland and Israel. Its next targets are the U.S. and Chinese markets.

Dnevnik is preparing for the launch of new paid services and, in the long term, intends to develop solutions for kindergartens and universities.

Name: Dnevik.ru (Russian for “daybook” or “diary”) Web site: www.dnevnik.ru Concept: A cloud-based, modular platform to cover schools’ I.T. needs, including management systems, learning processes, social networking and messaging, plus realtime information and alerts, including class schedules, grades and homework assignments.

Unique selling point: A comprehensive one-stop-shop for schools’ I.T. solutions, based on a “freemium” approach.

Start date: 2009 Development plans: Expansion to 20,000 schools abroad by the end of 2013.

RUSSIAN STARTUPS Find out about developments in the hottest Russian startups in our special section!

ITAR-TASS

schedules, grades and homework assignments, as well as a large educational resource center.

In early 2012, the Russian startup was honored as one of the of the best e-learning and educational Web sites at the World Summit Award, an annual contest for electronic media held under the auspices of the United Nations.

Dnevnik has a“freemium”approach. The main functions are available for free, but some additional services are provided on a paid basis. For example, for $3 per month, parents can subscribe to SMS alerts that let them know when their child is entering or leaving school, or when homework assignments are turned in.

Dnevnik was initially funded by its founder Gabriel Levi, who declined to disclose the amount of his initial investment, but in 2011, the startup attracted $1.7

Russian students write down their homework in a book called a “dnevnik.” Now an I.T. firm with the same name wants to help schools manage their challenges.

What to Know

Rankings Russia’s flagship institute of higher education hopes new rating will increase its attractiveness for foreign students

Moscow State Back Among the World’s Top Universities The latest version of the respected Times Higher Education World Reputation Rankings includes just one university from Russia.

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Moscow State University is the only Russian university to make it into the top 100 of the Times Higher Education World Reputation Rankings, coming in at 50.

The first five places in the survey were taken by Harvard University, the Massachusetts Institute of Technology, Cambridge University, Oxford University and the University of California, Berkeley. Appearing on the list at all was a victory for Moscow

foreign students attend Moscow State University out of an enrollment of about 50,000. The university has seven campuses outside of Russia, including one in Geneva

M.S.U. is housed in an iconic buiding in Moscow’s Sparrow Hills.

State, which last year did not even make the rankings.

“It certainly has to do with reputation,” said university rector Victor Sadovnichy in an interview with Kommersant FM radio.“And it is a signal for employers, with-

out a doubt. It is important for foreign students, as it helps them choose which university they want to attend. But I wouldn’t put too much stock into the rush for rankings. I’d like to reiterate that the most important thing for a university is to consistently do a good job.”

Sadovnichy stressed that the university has always been well thought of in certain circles.“Moscow State University has always had a good reputation internationally,” Sadovnichy said. “And we have our fair share of foreign students — around 7,000. But I’m confident that M.S.U. now being firmly among the top 100 universities in the world will certainly help to increase the number of foreign students wanting to come and study with us.”

The Times Higher Education Ranking is compiled from polling of leading scientists and academics. The poll that produced the most recent ranking was held in March–April 2012. More than 16,000 responses from 144 countries were received.

Respondents were asked to name a maximum of 15 top educational and research institutions based on their personal experience. They were also asked specific questions, such as:“Which university would you send your best graduate to for postgraduate courses?”

According to Sadovnichy, it was a question like this that prevented M.S.U. from making the top 100 last year: “Last year, we raised an objection against one of the questions,”Sadovnichy said.“The question initially was: ‘Would you send a postdoc to Moscow State University?’We objected, arguing that postdoctoral positions are not very common in Russia, and there are almost none within the Moscow State University. “ We a s ke d t o a l t e r t h e question to: ‘Would you be willing to accept a graduate of the Moscow State University as a postdoc in your lab?’ This wording makes a huge difference, since our graduates work successfully in countless labs around the world.”

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Lifestyle Russian women work on standing out from the crowd. Can it be attributed to their historical and cultural background?

A selection of Russia’s most powerful women

IRINA FORD, NATALYA NEMCHINOVA SPECIAL TO RBTH

The international advertising agency DDB once worked on an campaign for a cream by RoC skincare to air in several markets. The commercial the agency created, which showed a woman looking at herself in the mirror smiling at the results of her skincream, won acclaim in France, but was a failure in Russia, scoring low on believability and likeability.When the DDB team introduced a man looking at the woman in admiration, the attitudes of Russians toward the spot changed dramatically. The scores of the new ad on likeability, persuasion and believability were sky high.

DDB’s experience is just one example of what beauty experts consider the key difference between Russian and Western women. Ads directed at Europe-

an women emphasize that a product can make the user feel comfortable in her own skin; they often show women wearing comfortable clothes and light makeup that underlines natural beauty.

But Russian women prefer clothes to see women in ads with the kind of bright make-up, sky-high heels and designer clothes they see on the streets in Moscow. or St. Petersburg. Russians themselves attribute the look to their particular mindset — one that draws on historical investment experience.

Natalya Tsel, a linguist from vacation St. Petersburg who completed a student exchange program in the United States, says that many Russian women find it hard to comprehend the love of Americans for casual style. “How do American women dress and apply makeup? They’d use the words ‘comfortable’ and ‘practical’, but According to research compawe’d say ‘careless’ and ‘dull’,”Tsel ny Nielsen, 69 percent of Russaid. sian women said they would spend Said stylist Natalya Tan: “The spare cash on makeup. Only 8 perreason Russian women dress the cent of the respondents said they way they do is because of their would invest their extra money. background. We shouldn’t forget that half of the country is in Asia.

81%

73%

8%

What Russian women spend on

Our art, our national costume and architecture build on the heritage of the Scythians, Mongols and Byzantines. Look at the Orthodox churches, their luscious painting and the shining domes.

This is the cultural code that identifies our taste and penetrates us from early childhood.”

Studies show that Russian women spend generously on cosmetics. Euromonitor notes that Russian women spend a higher proportion of their income on cosmetics than European women.

Citizens of Spain, Portugal or Greece spend about 100 euros ($128) on cosmetics a year; French women spend 200 euros ($256); Swiss women 180 euros ($230) and British women 150 euros ($198). A Russian woman is ready to spend about 70 euros ($89) on cosmetics a year. However, monthly salaries in Russia are much lower, averaging $760 in 2012, compared to $2,715 in Spain and $2,521 in Greece).

The beauty industry in Russia is considered one of the most potentially profitable sectors of the economy today. The European market for beauty services is oversaturated, but in Russia it is still developing, with growth estimated between 5 per cent and 10 percent annually. Analysts note that since Russia joined the W.T.O., the market for beauty services has become increasingly attractive for global chains of beauty salons as well as global cosmetics manufacturers.

The beauty industry in Russia is one of the most potentially profitable sectors of the economy.

Some women attribute the way Russian women dress and wear makeup to a Darwinian mentality that arose due to the shortage of men after World War II. Others say that Russian women are breaking out from the restrictions of the Soviet era, when any attempt to stand out was frowned upon and high-quality clothes and makeup were hard to come by.

“We are too bright for European women. But we are not better or worse; we are from different cultures,”Tan said.

ALYONA REPKINA

The beauty industry is considered a growth area in Russia, where women spend a large percentage of their monthly income on cosmetics.

SHUTTERSTOCK/LEGION-MEDIA

Always Put Your Best Look Forward

SOURCE: RIA NOVOSTI

A recent ranking of Russia’s 100 most-powerful women divided the group into six categories: politics, media, society, culture, sports and business. Many of these women are known widely only inside Russia, but a few, such as tennis pro Maria Sharapova, have a more international profile. New Yorkers may also know Irina Prokhorova, the head of her brother MIkhail Prokorov’s charitable fund, and pop culture watchers may know Xenia Sobchak, socialite-turned-opposition politician.

Seniors After leaving behind work and child-rearing responsibilities, older Russian women are taking advantage of new freedoms

Kicking Up Their Heels in Retirement A “babushka” used to spend her time babysitting and gardening, but today’s retirees are getting online and taking up new hobbies.

Making the most of that pension

NATALIA YAMNITSKAYA

SOURCE: RBC DAILY

According to the Federal State Statistics Service (Rosstat), women outnumber men in Russia by 16.2 percent. The average life span of Russian women is 73, while for men

© RIA NOVOSTI

Fitness classes are just one of many new activities older women are embracing.

Kremlin Fund.“She retired a couple of years ago, started driving, and is now thinking about courses in photography and English.”

Others are using technology for a new take on old hobbies. “My grandmother downloads computerised embroidery patterns and uses them in a special sewing machine,” said student Yulia Vedinina. “If she doesn’t understand something, she takes a video tutorial on Skype.”

Body-and-soul courses aimed at older people are suddenly popping up everywhere in Moscow. A dance school for seniors recently opened at the All-Russia Exhibition Center (VVTs) in northern Moscow. And the Mitino social ser-

vice center in the Moscow Region now hosts an amateur puppet theatre. Under the Age of Happiness project, set up byVladimirYakovlev, founder of the business daily Kommersant, seminars are held on how to live, eat and stay busy, regardless of age and social stereotypes.

And this more active type of retirement is not only on the rise in Moscow and St Petersburg. Gertruda Pankrushina, a former anaesthesiologist from Novosibirsk, enrolled in a computer course at the age of 70.

“It wasn’t easy, but I got through it,” she said. “I now Skype my grandchildren, write emails and get recipes online.”

it is 60. Currently one in eight Russian citizens — 12.8 percent — is aged 65 or older, and in this age group there are more than two women for every man.

They won’t be confused with the average girl group The Buranovskiye Babushki (The Grandmothers from Buranovo), a folk collective with an average age of 75, showed the world that growing older doesn’t have to mean slowing down when they represented Russia in last year’s Eurovision song contest. The group, from the Republic of Udmurtia in the Volga region, dances in traditional birchbark shoes and rehashes hits by Russian and foreign performers into the Udmurt language. They took second place in the competition with their rousing song “Party for Everybody.”

© RIA NOVOSTI

Olga Kuznetsova, 55, who graces the floor of a dance studio in an elegant dress and heels, can hardly be described as a “babushka,” the Russian word for grandmother. Her recent retirement has given her the chance to do something she has long dreamed about: learn to dance the tango. And she is not deterred by being the oldest in her group. Kuznetsova’s new routine involves meeting friends after class, and she is planning a trip to Europe with them in April. “I raised a child, worked three jobs, and now just want to live for myself,” she said.

While such activities may be common for retired women in other parts of the world, for Russia this is a novelty. The traditional image of Russian grandmothers is of old ladies sitting on benches outside apartment buildings, watching their grandchildren play nearby as they discuss the latest news and gossip.

But exposure to other globetrotting retirees — both in person and through movies and magazines — has given Russian women some new ideas for what to do with themselves after they escape the daily grind. Today, retirement can mean taking up a new sport or hobby, chatting online and helping not just their families, but also society.

“My mother is 62 years old, and she is by no means a ‘babushka,’” saidYulia Bushueva, managing director of Arbat Capital’s New

ALYONA REPKINA

SPECIAL TO RBTH

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QUESTIONS & ANSWERS

Who Wants to Be a Programmer? ference on the personnel problem in I.T. at the 10th Krasnoyarsk Economic Forum in Siberia not so long ago. Representatives of the I.T. industry, from startups to Yandex and Microsoft, as well as large consumers of I.T. services like Sberbank, the World Bank and many more, were all in attendance. We are already putting in practice some of the provisions adopted at the conference. Once of these is placing an emphasis on programming competitions.

PRESS SERVICE

There is an American video on YouTube showing the founders of Microsoft, Facebook, Twitter and Dropbox explaining why it is important to learn programming. Will Russia have anything of this kind?

We won’t directly copy the American idea, but such things are absolutely required in Russia. Our task is to turn the I.T. specialist into the symbol of this generation. To this end, we should have TV shows about the sector, talk to school students about career prospects, have meetings with successful I.T. personalities.

Russia’s Deputy Minister of Communications, Mark Shmulevich, spoke with Elena Shipilova of Russia Beyond the Headlines about how I.T. can become Russia’s leading nonresource sector in terms of export volumes, and what the government should do in order to make the profession attractive among young people.

During the last decade, Russian software giants such as Kaspersky Lab and ABBYY have accounted for the

ALYONA REPKINA

GETTY IMAGES/FOTOBANK

The Ministry of Communications and Mass Media plans to increase exports of the Russian I.T. sector so that it rivals the defense industry.

How and when can this be done?

Software exports from Russia soared from $200–$300 million per year in the 2000s to $5 billion in 2012, according to various estimates. The sector has been growing an average of 20 percent annually over the past few years.

In 2012, Russia sold approximately $15 billion worth of arms to foreign buyers. If the trend continues, then we will soon be able to get even closer to the defense industry, despite the expected growth in foreign arms supplies.

A major increase in I.T. exports is not an end in itself; it is rather an indicator of how well the I.T. sector is developing and how well Russia is integrated into the global economy.

Growth of Russian I.T. exports in billions

SOURCE: RUSSOFT

The best-known name in Russian I.T. is that of internet giant Yandex, whose office is filled with the country’s top young specialists in the field.

majority of this increase in export supplies. Is there any demand for the products of medium-sized companies or startups?

Export is also growing thanks to outsourcing to Russia, and that’s what medium-sized companies do. When it comes to software products, we have had some successful projects, too. Take Ecwid, for example [a system that creates e-commerce platforms and has a strong working relationship with Facebook], or Prognoz [which produces analysis systems for companies] and Diasoft [which provides automation of banking and insurance systems].

There are many such examples,

all of which offer internationally competitive products. Many of them were startups, but they have now found their niche. The only question is whether they are interested in staying in Russia or shifting their business to a neighboring country, Europe or the U.S., where the business environment is often more favorable.

How can we encourage them to stay?

There are two blocks of institutional arrangements that are critical to the development of the I.T. sector. These are the favorable tax regime and availability of skilled personnel. We have a preferential social tax – 14 percent instead of

30 percent – for companies where I.T. services and products account for 90 percent of business. The discount is valid through 2017.

But it’s not enough for them to keep developing at their current pace, and we are working on having the preferences extended until 2020. It is important that the state pursue a consistent policy on I.T.; some countries have a moratorium on sudden aggravations of the tax regime. To ensure sustainability, these companies need to understand that the rules of the game won’t change overnight.

The reputation of Russian programmers in the global market is that they

can deliver where Chinese, Indian and even American specialists have failed.

They can learn from our ingenuity and resourcefulness. It is this competitive advantage that promotes the Russian outsourcing segment. Our graduates are excellent engineers, but there is a significant shortage of them. Currently, less than 1 percent of the Russian workforce is employed in the I.T. sector, compared with more than 4 percent in the U.S. and 3 percent in Europe. The ministry has a considerable challenge to address; namely, how to make this profession more popular. We had a roundtable con-

Prepared by Elena Shipilova

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Rosneft Touts Deals in Gulf, Arctic CONTINUED FROM PAGE 1

The Arctic and Venezuela At the Houston conference, Rosneft also expressed its interest in opening a new oil and gas field in the Arctic, in the Kara Sea. The company expects to begin exploration at this field by the end of 2014 with the assistance of foreign energy firms. Rosneft and ExxonMobil started geological work at three places in the Vostochno-Novozemelskiye section of the field last year.

“2012 marked the beginning of large-scale operations at the Russian Arctic shelf,”Sechin said.“We successfully performed an exploration program at our fields in the Kara Sea. As a result of that and together with our partner ExxonMobil, the core structure for drilling in the Kara Sea was selected. Drilling should begin in 2014. To drill this well, the West Alfa semi-submersible drilling platform has been contracted and we expect that, based on the drilling results, we should be able to open a new Arctic offshore oil and gas field by the end of next year.

Gulf of Mexico The deal with ExxonMobil will give Rosneft 30 percent in offshore blocks covering a total area of 175 square miles. Seventeen of

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these are located in the western Gulf of Mexico, and the other three are in the central Gulf.

Depths vary from 2,100 feet to 6,800 feet.

At the moment, specialists are analyzing seismic reconnaissance data at all of these blocks and no oil is being produced there.

ExxonMobil will remain the project’s operator, while Rosneft will be represented in the project through its subsidiary, Neftegas America Shelf.

Looking for foreign investments ExxonMobil is also expected to participate in the exploration of Rosneft’s offshore fields in Russia together with France’s Eni and Norway’s Statoil. Together, Rosneft’s partners could invest up to

MOSCOW CITY GOVERNMENT ROAD SHOW MARCH 20 NEW YORK © RIA NOVOSTI

Rosneft is actively raising financing to close the deal, and has already reached agreement with traders Glencore and Vitol on an advance of $10 billion against oil supplies. It has also signed agreements with several international banks for a credit of $14.2 billion.

The estimated resource base of this block alone is more than 35 billion barrels of oil equivalent and the total resources for the Kara Sea are more than 100 billion barrels of oil equivalent.”

Rosneft is also seeking to expand its collaboration with BP beyond the TNK-BP deal.

BP chief Robert Dudley discussed his firm’s cooperation with Rosneft in an interview with the Rossiya-24 TV channel.

Dudley said joint projects with Rosneft could include the Arctic and offshore production.

“We are also discussing onshore projects, some of them outside Russia. The list is fairly long, but first we have to wait for the takeover of TNK-BP by Rosneft to be completed,” Dudley said.

He said the projects might include joint production by BP and Rosneft in Venezuela.

“We’ve always been linked to Venezuela one way or another,” Dudley said.“And now it has become clear that huge investment will be needed in that country in the decades to come, we do of course plan to return there. BP is a big oil company, so you can expect us in Venezuela. Of course Rosneft can play an enormous role there.”

When you were working on the development plan for the sector, were you building on the experience of those countries that have succeeded in I.T.?

Unfortunately, you can’t just take someone else’s model and apply it to Russia without adjustment.

But we are keeping an eye on developments in other countries.

India liberalized its regulations on currency options, so we are looking at how this could apply to Russia. Options are not yet an effective motivation tool in Russia. We are studying special tax regimes and building on other countries’ experience in copyright protection. The fact that we are lagging behind gives us an advantage in, say, patent wars.When it comes to infrastructure, we are exchanging experience in the creation of technoparks with Singapore and Israel. We still have a lot to do to improve this sector.

Rosneft C.E.O. Igor Sechin (left) during a working visit to Venezuela.

$14 billion into geological exploration.

Rosneft currently holds 41 offshore exploration and production licenses in Russia, containing an estimated 275 billion barrels of oil equivalent. Rosneft’s exploration program includes drilling at 96 wells.

Rosneft is also focusing on talks with potential buyers of liquefied natural gas (L.N.G.).

“Natural gas can account for

half of the resource base in the Arctic,” Sechin said in Houston.

“Commercialization of these volumes is only possible with the development of infrastructure for liquefied natural gas. We are already in discussions with interested customers for this L.N.G..”

Rosneft and ExxonMobil agreed in the middle of February to explore the possibility of building an L.N.G. plant in the Far East.

The Moscow City government in cooperation with K.P.M.G. and the U.S.-Russia Business Council, will present a seminar and luncheon on the development of Moscow as an international financial center. › www.usrbc.org

2ND ANNUAL V.T.B. CAPITAL INVESTMENT FORUM APRIL 9–11 NEW YORK

During the three-day forum, leading Russian and international experts will discuss the Russian economy and the factors affecting investment opportunities in emerging markets, as well as the ease of doing business. › www.vtbcapital.com

Russian Oil Deals in Venezuela Unclear Upon hearing the news of Venezuelan President Hugo Chávez’s death, Russian Minister of Industry and Trade Denis Manturov told Russian reporters that the possible shakeup in Caracas should not affect Russia’s agreements and contracts with the country.

Russian companies have long been welcome guests in Venezuela and deals have been made for products from flowers to fighter jets. Venezuela is second only to India in its

procurement of Russian arms.

However, the most progress has been made by the state corporations Rosneft and Russian Technologies (Rostechnologia). Rosneft has signed numerous agreements with Venezuelan companies and owns 40 percent of National Oil Consortium, which is due to develop the Junin-6 field.

Over the past 11 years, Caracas has become a critical strategic partner of Moscow in Latin America.

Vladislav Zhukovsky, senior analyst at RIKOM-Trust, estimates Russia’s investment projects in Venezuela to be in the area of $22-25 billion, while other experts put the figure closer to $30 billion.

According to Ivan Kibardin, an analyst at Intercommerce Bank, Russia’s oil and gas companies will try to freeze their investment agreements while the political situation in Venezuela is unstable. However, any such moves are likely to be temporary as long-term cooperation between Russian oil companies and Venezuela is not in any real danger.

AUTOMOTIVE AND AGRICULTURAL MACHINERY FORUM APRIL 3 DETROIT, MICH

This event, hosted by the U.S.Russia Business Council, will introduce investors to opportunities in Russian automotives. › www.usrbc.org

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Money & Markets

05

Corruption Cash economy plays a major role in illicit transactions

Russian Economy Still Affected by Illicit Capital Outflow BEN ARIS SPECIAL TO RBTH

Russia has lost $782.5 billion in illicit capital flight over the past 18 years, while $552.9 billion of illegal money has entered the country over the same period according to a recent study by Global Financial Integrity (G.F.I.).

However, as G.F.I. director Raymond Baker wrote in the report: “These figures could be a gross underestimation as they don’t include estimates of money transferred by criminal groups engaged in things like drug smuggling and prostitution.” Russia ranks sixth globally in the size of illegal outflows behind India, Indonesia, Malaysia, the Philippines and Nigeria.

The G.F.I. report, which used the World Bank’s methodology to calculate both declared and undeclared outflows, states:“Russia has a severe problem with illegal flows of money. Hundreds of billions of dollars have been lost that could have been used to invest in Russian health care, education

and infrastructure. At the same time, more than a half-trillion dollars has illegally flowed into the Russian underground economy, fueling crime and corruption.”It also said that some of the causes of the outflow were corruption, financial crime and inefficient customs administration.

Of the total amount that left the country, 63.8 percent was made via unrecorded wire transfers. Transfer pricing — selling commodities to shell companies registered overseas at discounted prices — is another favorite way of sending money offshore. The Russian government has been concerned, particularly as the visible capital outflow spiked following the onset of the 2008 crisis. At the start of the last decade, capital flight had fallen to $18 billion a year, but ballooned to $133.7 billion by the end of 2008 as a result of the economic crisis.

In the next two years, the amount of capital flight fell again, but alarmingly jumped back up to $80.5 billion in 2011, compared with $34.4 billion in 2010. The outlook for this year is better, with analysts and the government expecting capital flight to fall to about $50 billion. But the report found that things are slowly im-

IN FIGURES

$782.5 billion in illicit capital flight has left Russia over the last 18 years while $552.9 billion of illegal funds have entered the country over the same period.

KOMMERSANT

The size of Russia’s shadow economy undermines recent efforts to improve the business climate and track actual capital flow.

Finance Minister Anton Siluanov (center right) is trying to combat the problem of the shadow economy.

$50 billion

proving; the size of the shadow economy fell to 35 percent in 2011.

Finance Minister Anton Siluanov said part of the problem is that 25 percent of Russia’s money mass is cash, compared with the 7 to 10 percent average in O.E.C.D. countries, and suggested such changes as encouraging salaries to be paid by bank transfer, promoting the use of bank and credit cards, and setting a limit to the size of allowed cash transactions.

Said Siluanov in an interview with business dailyVedomosti,“It is essential to reduce the level of cash payment in the economy, which currently comprises 25 percent of all turnover, over 100 percent more than in developed markets, and even 50 percent more than in other developing markets.”

The size of Russia’s shadow economy is 3.5 times larger than

is the estimated capital flight for 2013. However, in more positive news, the size of the shadow economy has fallen from 46 percent for most of the last decade to 35 percent in 2011.

50,000 corruption cases were investigated by Russian police in 2012 and resulted in convictions of more than 7,000 people on graft charges.

Corruption, financial crime and inefficient customs administration are some causes of the outflow.

that of any other G8 country due to inefficiencies with public administration and tax evasion.

Taking on corruption The Kremlin has finally started to act by significantly stepping up an anticorruption drive. Since last November, a number of high level public officials have been put in the spotlight. In the most recent case, State Duma Deputy Vladimir Pekhtin asked to be temporarily relieved of his duties as chairman of the Duma’s Credentials and Ethics Commission after opposition blogger Alexei Navalny posted documents indicating that Pekhtin owns $2 million worth of U.S. property in Florida that he had failed to declare under transparency laws for members of parliament.

In 2012, Russian police inves-

tigated over 50,000 corruption cases and convicted more than 7,000 people on graft charges.

At the recent all-Russia anticorruption conference, which took place in Kazan in mid-February, Federal Council Speaker Valentina Matviyenko spoke about the ways corruption damages the Russian state.“These figures show that despite all implemented measures, corruption is one of the most burning issues. Moreover, it has penetrated all spheres of social life in Russia: authorities, housing services and utilities, education, health care, law enforcement. And attempts to equate ‘official and corruptor’ are superficial and unfair,” Matviyenko said.“If we don’t truly overcome [corruption], the country won’t be able to successfully develop and move forward.”

Business A survey shows that younger Russians believe that there is more potential for new businesses at home than abroad

Entrepreneurs Go Big and Stay Home ASYA PANOYAN

sians are bullish on the country is the change in business strategy since the early 1990s. “The typical entrepreneur’s profile has evolved to the next level,” said Biznes Molodost co-founder Pyotr Osipov.“Today’s business-

RBC DAILY

A survey conducted jointly by Biznes Molodost and the Levada Center has revealed that the majority of young Russian entrepreneurs believes doing business in Russia has great potential.

Eighty-four percent of participants responded that in terms of business opportunity, Russia has a lot more to offer than the West. Although 56 percent of those who took the survey have no plans to settle permanently outside Russia, 73 percent expressed an interested in studying abroad.

Part of the reason young Rus-

Part of the reason young Russians are bullish on the country is the change in business strategy since the 1990s. people are looking to have fun rather than just make money.”

Nevertheless, young entrepreneurs do need support. Apart from tax cuts and a lower administrative burden, businesses need guidance from those who have learned the ropes in a real-life environment. According

to the survey, 82 percent of aspiring business owners would like to work with a personal business mentor.

Yevgeny Yakubovsky, a member of the managing board at the small business association Opora, said: “There is no doubt that the business community in Russia has come along in leaps and bounds. Business activities in Russia during the first few years after the collapse of the Soviet Union boiled down to either privatizing state-owned property or siphoning off government budget funds. Today, the situation is different.”

Yakubovsky believes that modern Russian entrepreneurs are getting closer to their Western counterparts. Moreover, starting a business has become trendy among young people, which he sees as a good sign.

Inside the minds of entrepreneurs

ALYONA REPKINA

Business experts are optimistic about a poll indicating that the next generation of entrepreneurs is ready to create new companies at home instead of going abroad.

SOURCE: BIZNES MOLODOST, LEVADA CENTER

But Anton Danilov-Danilyan of Delovaya Russia thinks that the country remains too reliant on raw materials — and rather than improving, the situation is actually getting worse.“We never said [Russia’s] current business activities were going in the right direction,” Danilov-Danilyan said. Unfortunately, the raw materials industry remains the only area that has been developing.

Before 2010, the share of raw materials and primary industries in exports was to the tune of 63–65 percent, whereas today it amounts to approximately 85 percent.”

According to Danilov-Danilyan’s forecasts, the country will have to focus on agriculture in the second half of the 21st century.“We have huge potential here, which can be tapped by lifting the existing barriers,” he said.

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ON SYRIA, NO EASY ANSWERS FOR RUSSIA, A QUESTION OF PRINCIPLE who told the Lebanese newspaper Al-Akhbar: “Shutting down Syrian borders for weapons and contraband would have solved the problem in a couple of weeks, because there would have been no sources of money and arms.”

Nuland’s grievances against Russia have a political dimension too. Moscow has repeated, on more than one occasion, that it is not exactly fond of Assad. Rus-

Andrei Ilyashenko SPECIAL TO RBTH

arch marks two years since the beginning of antigovernment protests in Syria. Though it is increasingly clear that the West and Russia must work together to resolve the crisis, they still seem to favor different approaches. Russia, on principle, is against external interference, while the U.S. is pushing Moscow to support political transition in Damascus.

U.S. President Barack Obama has demonstrated a balanced approach. In an interview with The New Republic magazine, he asked a rhetorical question:“Could it [a military intervention] trigger even worse violence or the use of chemical weapons? And how do I weigh tens of thousands who’ve been killed in Syria versus the tens of thousands who are currently being killed in the Congo?”

Later in an interview with CBS, Obama offered a reply to his own question:“Syria is a classic example of our involvement; we want to make sure that not only does it enhance U.S. security, but also that it is doing right by the people of Syria and neighbors like Israel that are going to be profoundly affected by it.”

In other words, there will be no direct intervention.

Still, the situation in Syria is so bad not because the U.S. has avoided openly helping the armed opposition; the problem is rather that Russia openly supports Damascus — or, more precisely, Syrian President Bashar al-Assad.

U.S. Department of State spokeswoman Victoria Nuland said on Jan. 28:“There are a number of steps that Russia can take.

It can firmly and publicly cut off the [Assad] regime’s supply of Russian weapons — especially attack helicopters. It can cut off Assad’s circle of access to Russian banks.

It can actively support a political transition and work with us on who can come next, who can keep the country united and take it on a democratic path.”

This statement is only partially true. To speak of a civil war in Syria is wrong according to Boris Dolgov, senior researcher at the Institute of Oriental Studies of the Russian Academy of Sciences. Syria’s government troops are not fighting armed citizens, but rather well-trained combat units financed and supplied from abroad.

It is hard to argue with Assad,

M

Russia is against external interference while the U.S. is pushing Moscow to support political transition. sia’s Foreign Minister Sergei Lavrov reiterated this much.

“We were never enamored with this regime and never supported it,” Lavrov said. “And all of the steps we took that were aimed at facilitating the implementation of the Geneva Agreement on the formation of a transition governing body confirm that we want the situation to be stabilized and conditions created for the Syrians themselves to determine the fate

of their leadership, their people and their country. That’s what our position is all about, rather than about supporting any specific side in this tragedy.”

The essence of the disagreements between Moscow and Washington is that Russia opposes regime change through external military, political or economic pressure as a matter of principle.

The United States, meanwhile, is apparently inviting Moscow to agree on who is going to be Syria’s next president — to “squeeze out” Assad together. This is certainly a tempting proposal since the Kremlin is openly declaring its readiness for cooperation on an equal basis on a broad range of issues.

In a recent interview, Russian Prime Minister Dmitry Medvedev confirmed that Syria’s future is a subject of Russian-American dialogue. “There are no irreconcilable contradictions in our positions,” said Medvedev. However, he repeated that the Syrian people are the ones who should decide Assad’s fate.“Not Russia, not the United States, not any other country,” Medvedev said.

Medvedev’s reply does not quite clash with what Henry Kissinger had to say when asked about Syria at Davos. Kissinger called on the United States and Russia to work together to resolve the crisis. If the outside world intervenes militarily, he said, “it will be in the middle of a vast ethnic conflict; and if it doesn’t intervene militarily, it will be caught in a humanitarian tragedy.”

Andrei Ilyashenko is a columnist on Middle East issues forVoice of Russia.

NOT WILLING TO TAKE THE HARD ROAD for the situation in Syria after the presumed fall of the current regime — in other words, to become the“serious external force.”

The Gulf states lack military might. Turkey, which has the second largest army in NATO, is not eager to burden itself with involvement in a crisis that is likely to take years to settle and might provoke new violent confrontation with the Kurds. The U.S. and

Nikolai Surkov SPECIAL TO RBTH

hile Western actors push for the creation of an interim government in Syria, Russia is pessimistic about the chances for improvement in the situation.

Moscow sees no state willing to guarantee such a government by use of force. Furthermore, Moscow believes the Syrian opposition is too splintered to come to the negotiating table as a unified voice.

As the war in Syria claims more and more lives, the West insists that the only chance to avoid religious strife and chaos is to pass a U.N. Security Council resolution calling for the creation of an interim government that will be guaranteed by “a serious external force.” Russia, which has its own lucrative interest, seems to be an obstacle, however, since it has teamed up with Iran and China to protect its ally and client, Bashar al-Assad.

In reality, it is not that simple.

For one thing, none of the international or regional players are willing to accept responsibility

W

None of the international or regional players are willing to accept responsibility for the situation in Syria.

Europe almost openly declare that they do not want to be dragged into a“new Iraq or Afghanistan.”

NATO head Anders Fogh Rasmussen believes that foreign military intervention might not lead to a solution to the conflict, but it may even make things worse.

“It is my firm belief that any foreign military intervention would have unpredictable repercussions, because Syrian society is very complicated — political-

IORSH

Nikolai Surkov is an assistant professor at the Moscow State Institute of International Relations (MGIMO).

VEDOMOSTI.RU

hich sectors of the Russian economy will be the most beneficial ones for investors over the next six months and in the longer term? In my opinion, there are two main categories: sectors contributing to the growth of domestic consumption and those focusing on infrastructure development.

The former will grow faster than normal because of extensive bank lending, higher incomes, slower inflation and a stronger ruble. The latter will be showing growth because outdated and underdeveloped infrastructure is one of the major obstacles standing between Russia and more rapid economic expansion.

W

Consumer lending in Russia increased 40 percent in 2012, reaching the precrisis record high of 2007. Yet the debt burden on Russian households remains insignificant, at about $1,800 per capita, compared to around $4,000 in Eastern Europe and more than $30,000 in developed economies.

The penetration of mortgage lending — a key banking product — is still very low even though the economy is growing at the precrisis pace. The mortgage-to-G.D.P. ratio in Russia is about 3 percent, compared to 5 percent in Turkey and Brazil and 21 percent in Poland and the Czech Republic.

If the Russian economy manages to grow overall at a rate of between 3 and 3.8 percent this year, the sectors focusing on domestic consumption will gain

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from 10 percent to 20 percent.

The sectors with securities having the highest potential yield in the next six to 12 months are finance, home construction, transport, automotive, media

Consumer lending in Russia went up 40 percent in 2012, reaching the precrisis record high of 2007. services and telecoms. Some banks worth taking a look at include Sberbank, V.T.B. and Vozrozhdenie Bank. Car manufacturers Avtovaz and Sollers are also interesting buys, along with steel producer Severstal, Aeroflot, electronics chain M.Video, telephone provider

Megafon and Internet giant Yandex.

When it comes to infrastructure, potential investors should keep in mind that largely outdated or underdeveloped infrastructure not only affects potential economic growth, but also prevents the country from meeting its international commitments, including holding the 2018 FIFA World Cup. Although it is still some years off, not a single arena of the 12 venues is yet complete and no highways or hotels in the 11 host cities meet the official requirements. Organization of the 2018 World Cup will cost Russia an estimated 1.3 trillion rubles ($42.6 billion). The federal program for development of the transport infrastructure for 2010–2015 envisions investment in the railway infrastructure

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IN 2013, THE NAME OF THE GAME IS INFRASTRUCTURE Mark Rubinstein

ly, ethnically, religiously — and the regional context is very, very complex,” Rasmussen said.

The West must also keep in mind that the Syrians themselves are not likely to welcome foreign troops on their territory. Even the opposition is not asking for an intervention. Under these circumstances, in order to prevent further violence, blue helmets or a joint Arab force with a wide mandate are preferable. The United Nations and Arab League envoy for Syria, Lakhdar Brahimi, mentioned possible deployment of U.N. peacekeepers. The parties still have to agree on deployment, although peace enforcement as it was done in the former Yugoslavia is unlikely.

The Taif Agreement of 1989, which ended the civil war in Lebanon, showed that a peace settlement is possible, even after a decade-long confrontation. That agreement, however, was achieved due to the fact that external actors supporting the main Lebanese groups also wanted peace and were ready to cede some of their ambitions.

Brahimi suggests using agreements reached in Geneva in June 2012 as a framework for a settlement in Syria. Moscow shares this position. Furthermore, Russia is ready to support a U.N. resolution based on these agreements, if the vote in the Security Council is preceded by an agreement between Assad and the opposition.

In the meantime, the Russian Ministry of Foreign Affairs admitted that it does not see any perspective for improvement of the situation in Syria. According to Deputy Foreign Minister Gennady Gatilov, one of the reasons for this is that Western countries and their allies do not work properly with the opposition.

As Foreign Minister Sergei Lavrov put it, “there is no negotiating team on behalf of the opposition, and this coalition includes too many different groups to be able to agree on a unified delegation.”

However, Russia is not giving up dialogue with Assad’s adversaries; it is trying to figure out what they are worth and whether they can keep their promises.

Meanwhile, Russia is providing humanitarian assistance to refugees from the Syrian conflict.

During his meeting with Lebanese President Michel Suleiman, Russian PresidentVladimir Putin promised aid for refugees living in Lebanon.

In the absence of an agreement between Assad and the opposition, Russia also fears that a U.N. resolution could become an excuse for a Libya-style military campaign, which would cause the collapse of the existing state but not give way to a new one.

alone at 320 billion rubles ($10.5 billion) annually.

In the energy sector — the one probably facing the most infrastructure challenges — 62 percent of the facilities in the generating segment alone are over 30 years old.

This segment requires almost 3 trillion rubles ($98.4 billion) in investment during the next six years: imagine how much additional installed capacity the new football arenas, airports,

r a i lway stations and hotels will require. International giants such as General Electric, Siemens, Caterpillar and Komatsu will probably account for a substantial share of the investments in this sector.

The best way to participate in this growth is via shares in Mostotrest, NLKM, MMK, LSR Group, E.ON Russia and Globaltrans.

In brief, investment analysis consists of three basic things: analysis of opportunities, risks, and of the way the first two factors correlate with the current cost of investment. Analysis of the companies noted above indicates a significant potential for growth in the next six to 12 months.

Mark Rubinstein is the director of the analysis department at IFC Metropol.

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Culture

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Art Russia’s contribution to abstraction recognized in new show

THEATER PLUS

MoMA Celebrates 100 Years of Abstraction

“Moscow Trials” Put Art on Trial Over Trials in Art John Freedman THE MOSCOW TIMES

J

2

3

PRESS PHOTO

1

Russian artists were at the center of the Abstract movement — a revolution in visual art currently being revisited in a New York exhibition.

ANNA ANDRIANOVA SPECIAL TO RBTH

On Jan. 2, 1911, Wassily Kandinsky attended a concert of music by theViennese composer Arnold Schoenberg. The next day, Kandinsky worked on some quick sketches to articulate his vision of the concert — an abstract impression — with people and a piano barely visible. The Russian artist called the work “Impression III.” This experience served as a catalyst for Kandinsky, and by the end of the year he exhibited a fully abstract work called “Composition V.” “That moment — Dec. 11, 1911 — was when abstraction made its very first strong public splash,” said Masha Chlenova, curatorial assistant at the Museum of Modern Art (MoMA).“It was as far as anyone had been in creating an abstract picture.”

“Inventing Abstraction 1910– 1925,” an exhibition at MoMA that runs through April 15, tells the story of how abstraction evolved among an international group of artists. The museum has brought the most significant and majestic pieces of the movement

ournalist and theater director Mikhail Kaluzhsky called it a“theatrical slam.”

Olga Shakina, a journalist from the Dozhd television channel, said it was a moment when “one theatrical event replaced another.” What they were discussing was a now-notorious performance of“Moscow Trials,” a documentary theater project that took place at the Sakharov Center on March 3. It was interrupted at first by individuals at least claiming to be representatives of the Federal Migration Service, and then later by a group of Cossacks accompanied by a film crew.

“Moscow Trials”was a threeday event organized by Kaluzhsky to reconsider three notorious trials involving the arts in recent years. Directed by Swiss director Milo Rau, it involved journalists, actors and activists, such as Pussy Riot member Yekaterina Samutsevich, reenacting the roles of defendants, witnesses, jury members and judges in actual historical court cases. On trial, so to speak, were the “Careful, Religion!” and “Banned Art” art exhibits in 2003 and 2007, respectively, and the 2012 case against the Pussy Riot activist group.

Shortly before 1 p.m. on March 3, Kaluzhsky sent out the first of numerous brief reports on his Facebook page, informing whoever was online that the performance had been stopped.

From that first salvo through the final post shortly after 9 p.m., rumors, conjecture, heated opinion and heartfelt advice flew fast and heavy across Kaluzhsky’s page.

Judging by the peak number of“likes”and comments — that occurred at around 2 p.m., when Kaluzhsky posted information that the performance had resumed — a minimum of 100 people followed events on their computers and telephones. They included some of the most influential individuals in contem-

to NewYork, including the works of Russian artists Kandinsky, Kazimir Malevich andVladimir Tatlin, who were at the forefront of this revolution. Only one quarter of the works belong to MoMA; the rest are on loan from more than 100 private collections and institutions.

Abstraction resulted from the interaction among painters, musicians and poets, and the show

published in 1911, the same year he first exhibited his “Composition V,” which is now on display at MoMA. Kandinsky was sent images of Picasso’s paintings.

The 1911 exhibition had a profound effect on other significant artists of the time, including Marcel Duchamp, Paul Klee and Robert Delaunay. The curators of the MoMA exhibition dedicated different rooms and spaces to the

MoMA has one of the most important collection of Russian avant garde thanks to its founder Alfred Barr.

The Russian Wall is a tribute to the exhibition that took place in 1915 in Petrograd (now St. Petersburg).

underscores how the artists constantly influenced each other’s creative process.

“We wanted to do our best to give this idea that abstraction could spread like a wildfire, the way it did,” said Chlenova.

In 1910, Pablo Picasso made a small series of paintings that did not look like anything before them — the images were similar to diagrams with angles and a barely recognizable female figure. While Picasso was making his first efforts at abstraction in painting, Kandinsky was working on his highly influential manuscript“On the Spiritual in Art,” which was

abstractionists from different countries.

The Russian Wall is a tribute to the exhibition that took place in 1915 in Petrograd (now St. Petersburg) — “0,10: The Last Futurist Exhibition of Painting” — where Malevich introduced his idea of the supremacy of painting. MoMA’s curators brought together the original works to recreate as closely as possible the original wall, with the exception of the three paintings that are still in Russia. Due to the current ban on art loans from Russia to the United States, these works did not make it to the exhibition.

1. “Monument to the Third International” by Vladimir Tatlin.

2. “Painterly Masses in Motion”

by Kazimir Malevich.

3. “Impression III (Concert)” by Wassily Kandinsky.

Tatlin was also a part of the “0,10”exhibition in Petrograd and became one of the most influential artists of the Russian avant garde. An iconic model of the proposed tower, “Monument to the Third International,”is on display at MoMA. The monument has become emblematic of early Modernism and the Constructivist movement.

MoMA has one of the most important collections of Russian avant garde art thanks to the museum’s founder Alfred Barr, said Chlenova. Barr laid a strong foundation by bringing pieces from Russia and all over Europe in the early 1930s for the famous exhibition“Cubism and Abstract Art” in 1936, which established MoMA’s reputation as a museum that promotes abstraction. Barr managed to collect art from Soviet painters at a time when abstraction was already forbidden by the government. Malevich left some of his paintings in Germany and Barr brought them to MoMA. The painting “White on White” was one of the paintings Barr brought from Germany, and it is on display at the current show.

“The ‘Cubism and Abstract Art’ exhibit is a very important reference point for us in making this exhibition now,” said Chlenova, “and celebrating the centennial of abstraction.”

Performers Armenian-Jewish-American violinist takes pleasure in new and forgotten music

HER STORY

Anastasia Khitruk

AYANO HODOUCHI SPECIAL TO RBTH

CITIZENSHIP: AMERICAN AGE: 38 STUDIED: VIOLIN

Born in the Soviet Union, Khitruk emigrated to the United States with her parents as a child. She made her orchestral debut at the age of 8.

A Grammy nominee and laureate of the Premio Paganini, she is in demand as a soloist with the world’s leading orchestras.

Khitruk most recently appeared in New York in January at the Weill Recital Hall in Carnegie Hall.

LES ANDELOS

Violinist Anastasia Khitruk has carved out a niche for herself as a performer of forgotten works both old and new.

“I play so many pieces I have never heard before [because] then I am forced out of my comfort zone. It’s nice to have selfdiscipline, but it’s better to have discipline imposed upon you,” Khitruk said.“As a performer, you cannot do the same thing the same way; you have to keep surprising yourself.”

The Grammy-nominated artist’s first release consisted of Brahms’s violin sonatas. But she was discouraged by the fact that there were already so many recordings of Brahms. That pushed her to delve into new or forgotten music. Khitruk loves digging into old sheet music in music stores, and while doing so on one occasion came across music by Ivan Khandoshkin, a violinist and composer from the time of Russian Empress Catherine II (the Great). She has also recorded works by Léon de SaintLubin, a contemporary of German composer Felix Mendelssohn.

Seated in the living room of her Upper West Side apartment, Khitruk appears both frank and a little curious.“I think I was born old”she said.“I was never young, never knew what toys were for. I was always reading.”

Born in the Soviet Union and of Armenian Jewish descent, Khitruk is now an American citizen and traverses national and ethnic identities with ease.

Her latest recording, released in November 2012, is a collaboration with composer Michael Colina and features“BabaYaga,” a fantasia for violin with orchestra. She brings richness, fecundity and a sense of potency to Colina’s Latin-infused music.

A daughter of pianists, Khitruk begged for a violin for a long time until her mother gave in and took the 5-year-old to a violin professor at the Central Music School.

The teacher looked at the child’s hands and said, “She can’t become a violinist; her pinky is not

long enough.” Her fifth fingertip did not even reach the last joint of the fourth.“But look,”she said, pressing her hands together. “I grew it — I got it done!”The pinky on her left hand is considerably longer than the one on the right.

“I really wanted to play the violin.You do what you need to do!”

After moving with her parents to NewYork, Khitruk gave up the violin for a few years. But as luck would have it, when she was 13 her violin teacher from Moscow moved into the same building a Khitruk’s family, taking an apartment one floor beneath theirs: the young artist started playing again.

Eventually she was noticed by famed violin pedagogue Dorothy DeLay.

Always an overachiever, Khitruk strove to please, but instead of pursuing the image and sound in her own head, she was pursuing DeLay’s.“After a while, I was in Julliard with a scholarship and all, the famous student of the famous teacher, but I was crying all the time.”She practiced and cried from misery, until she couldn’t stand it any longer and went back to her first teacher, who had moved to Boston.

“That was like going back to Russia for me. And we started out again from scratch to get the right sound. Americans like a very straight and even sound. For me this was profoundly inorganic. In Russia, the sound of a violin breathes, and it has a tear in it.”

porary Russian culture — playw r i g h t Ye l e n a G r e m i n a , documentary filmmaker Maria Razbezhkina, theater director Oleg Rybkin, critic Pavel Rudnev and many more.

There are still plenty of questions about what really happened.

Kaluzhsky said he “cannot be sure” the officials were actually there on official orders.“Only one of the officers showed documents,” he stated, and added that the Sakharov Center has submitted a series of protests and inquiries to the Federal Migration Service.

As for the Cossacks, there remain questions about their authenticity and purpose as well.

Shakina, who performed the part of a judge in the reenacted

“Moscow Trials” was a three-day event organized to reconsider three notorious trials involving the arts. trial of Pussy Riot, told how one project participant showed some Cossacks what was transpiring on stage so that they could see for themselves that “no one was insulting anyone.” But, the journalist said, it was comical to see how the Cossacks only pretended to listen with deep interest. In fact, she concluded, “there was no passion” in their behavior.

According to Kaluzhsky’s realtime Facebook reports, the Cossacks, who mostly had been milling around outside the building, began to disperse when the police arrived around 4 p.m. But the police, too, found themselves in an awkward situation.

“I tried to explain to one policeman what documentary theater is,” Kaluzhsky said with a laugh. “Our discussion lasted 15 minutes and he sincerely tried to understand what was going on.”

Admitting that documentary theater makers still have much to achieve, Kaluzhsky suggested that one of its successes is that it provides an opportunity for“outcasts, those who can’t speak for themselves,” to be heard.

BIBLIOPHILE

Reflections on a Life Lived Behind the Camera

A New Kind of String Theory Comfortable in concert and chamber settings, performing contemporary and 18th century works, Anastasia Khitruk is most at home with unknown pieces.

07

Phoebe Taplin SPECIAL TO RBTH

TITLE: ANDREI TARKOVSKY: THE COLLECTOR OF DREAMS AUTHOR: LAYLA ALEXANDERGARRETT PUBLISHER: GLAGOSLAV

n the summer of 1985, the great Russian filmmaker Andrei Tarkovsky shot “The Sacrifice,” which turned out to be his last film; he died the following year.

Tarkovsky directed five films in the Soviet Union, including classics such as“Stalker”and“Andrei Rublev,”then“Nostalghia”in Italy and “The Sacrifice” in Sweden.

Layla Alexander-Garrett worked as his interpreter during the shooting of “The Sacrifice,”and her new book“Andrei Tarkovsky: Collector of Dreams” is based on the diaries she kept that year.

Tarkovsky’s cinematic trademarks include an emphasis on spiritual themes (which brought him into conflict with the atheist Soviet authorities); long, slow takes; and haunting music. His last movie’s strange story involves the“sacrifice”of an aging actor and critic, who leaves his family and burns down his own beautiful house in order to prevent nuclear catastrophe.

The Swedish director Ingmar Bergman praised Tarkovsky, calling him the greatest filmmaker, one“who invented a new language, true to the nature of film, as it captures life as a reflection, life as a dream.” Images of dreams and reflections recur throughout AlexanderGarrett’s memoir. The two longest sections describe the actual shooting, often frame by frame, of “The Sacrifice.”

I

The chapter on “Gotland Dreams” is a particularly evocative and fascinating portrait of an artist working with, and sometimes against, the windswept Baltic landscape he has chosen to represent timeless simplicity. She reveals his stubborn methods (like insisting that all the dandelions be removed from the grass), verging on the sublime as he allows the sun to shine straight into the camera for the closing shots after hours of overcast skies.

For Alexander-Garrett, the chance to work with her hero is unexpected and she records it in a lively style; the reverence of the star-struck sometimes surfaces, but she can see Tarkovsky’s failings, too: his impulsive moods and possessiveness, including his autocratic insistence that she remove her sunglasses and his preference that she drink iced tea rather than Coke.

Before he died, Tarkovsky predicted that Alexander-Garrett would write about him. “Don’t describe me as some kind of impossible, tyrannical dictator,” he said.“Write only what you yourself actually felt, what I meant to you … Don’t be neutral … don’t be afraid of the pronoun, I.” It is advice she has honored — and that he lived by. This human connection will delight fans and fascinate students, and it makes “Collector of Dreams”a valuable chronicle.

READ RUSSIA Read other reviews and the latest updates on Russian literature in our special section Read Russia.

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RUSSIA BEYOND THE HEADLINES

MOST READ Kazan Universiade: Testing Ground for Sochi 2014 rbth.ru/23245

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SOCHI 2014

Olympics With the opening ceremonies less than a year away, much remains to be done

TORCH UNVEILED SYMBOL INCORPORATES RUSSIAN TRADITIONS

YULIA PONOMAREVA RBTH

In February 2014, when the world’s athletes descend on Sochi, the average temperature is likely to be a mild 45 degrees. One day earlier this month, the weather at Sochi’s Krasnaya Polyana ski center was the warmest in Europe at nearly 70, according to the weather portal Gismeteo.ru.

But the organizers of the Sochi Games are prepared. In anticipation of the difficulties presented by these temperatures, there are plans in place to make all the snow necessary to carry out the events. Preparations are in the works to create an estimated 3.5 million cubic feet of artificial s n o w — e qu iv a l e n t t o a 150-square-foot ice cube.

Unlike some cities that have hosted the Winter Olympics in the past, the infrastructure in Sochi is basically being built from scratch. The city is getting a total of 14 new facilities, including sta-

diums, skating rinks, ice hockey arenas and alpine ski trails. Additionally, 30 new 4-star and 5-star hotels, and 54 3-star hotels are under construction.

According to Deputy Prime Minister Dmitry Kozak, the total spending thus far from federal and regional budgets is $13 billion. Private investors have also ponied up $25 billion toward making the Games a success.

The work seems to be moving ahead more or less on schedule.

Earlier this month, Jean-Claude Killy, chairman of the International Olympic Committee’s Co-

Venues for the Sochi 2014 Olympic Games

NATALIA MIKHAYLENKO

ordination Committee for Sochi, praised President Vladimir Putin for the progress achieved so far.

“Indeed, it is hard to believe that the promises you made in Guatemala in 2007 have become a reality today,” Killy told Putin.

“The work that has been done is truly outstanding.”

During his latest inspection of the Sochi Olympic facilities and sites, Putin made it very clear that he has zero tolerance for corruption in Sochi, publicly criticizing the vice president of Russia’s Olympic Committee, Akhmed Bilalov, whose company was contracted to build a Sochi ski jump, now 20 months overdue. After Putin’s criticism, Bilalov quit his job and later left the country.

Experts say that despite the price, the Olympics should succeed in turning Sochi into a world-class vacation destination — one capable of attracting tourists year-round.

According to Grigory Birg, codirector of research at the analytical firm Investcafe,“This new infrastructure simply gives Sochi, already hugely popular with Russians, room to grow into an international resort.”

Ilya Sukharnikov, senior manager for real estate with Ernst & Young, agrees about Sochi’s potential: “Given the scale of change Sochi is seeing during the preparations for the Olympics, there are all the necessary prerequisites for Sochi to become a resort that will be up to international standards.”

PHOTOSHOT/VOSTOCK-PHOTO

withstand high winds and frosts.

The lighting ceremony will take place in Greece, home of the Olympics. The torch will then be transported to Moscow in a special plane on Oct. 7, 2013.

The Olympic relay will run through 2,900 residential areas, 83 Russian regions and all nine time zones of the country — from Vladivostok to Kaliningrad.

Torchbearers will cover around 40,400 miles in 123 days. There will be 14,000 torchbearers, and around 130 million Russians will have the chance to see the torch with their own eyes.

TICKETS ON SALE WANT TO GO TO THE GAMES? GET OUT YOUR VISA CARD Tickets for the Sochi 2014 Winter Olympics went on sale to foreigners on Feb. 11.

About 70 percent of tickets are expected to be sold to Russians and the remainder to overseas guests. The prices for Sochi tickets will be slightly lower than for the London Games, but more expensive than for the last Winter Games, which were held in 2010 in Vancouver.

The average ticket price in Sochi will be 6,400 rubles ($213).

The cheapest tickets to the opening and closing ceremonies will be 4,500 rubles ($150), while tickets to some of the sporting events will cost as little as 500 rubles ($17).

The most expensive will be for Russia’s favorite winter sports — ice hockey and figure skating.

The only way to pay for tickets is via a Visa card. This restriction will be in place for the entire Olympic territory: only Visa cards will be accepted by A.T.M.s and in shops there.

COUNTING DOWN OFFICIAL CLOCKS KEEP TRACK OF THE TIME UNTIL THE GAMES BEGIN The clocks that will count down the hours until the start of the 2014 Olympic Games were started on Feb. 7, exactly a year before the opening ceremonies. There are countdown clocks in the administrative centers of Russia’s eight federal districts — Moscow, St. Petersburg, Nizhny Novgorod, Rostov-on-Don, Yekaterinburg, Novosibirsk, Pyatigorsk and Khabarovsk — as well as in Sochi itself.

The clocks were developed by the Omega company — the world partner of the International Olympic Committee (I.O.C.). They stand 20 feet 2 inches in height and

CORBIS/FOTO SA

With all its new infrastructure, Sochi should end its Olympic dream as a world-class resort capable of attracting tourists year-round.

GETTY IMAGES/FOTOBANK

Getting Ready to Take an Olympic-Sized Challenge

The Sochi 2014 torch designers were asked to convey the concept of the Olympic Games based on the idea of the convergence of Russian traditions and contemporary trends.

The resulting torch resembles a firebird feather, which is traditionally used in Russian fairytales to light the way. The torch is made of cast aluminum alloy, and the handle and central insert are molded from high-strength polymer. The torch weighs 4 pounds and is 3 feet long. The torch is specially designed to

weigh 17,200 pounds.

The clocks feature a design made up of a patchwork of official symbols of the games and 16 of Russia’s most famous folk art designs, including Gzhel porcelain and Khokhloma lacquerware.

Volunteers Young people from all over the country have applied to aid athletes and spectators during the Sochi Games

The Best Unpaid Job Imaginable The Olympic volunteer team, made up of 25,000 people from all of Russia’s 83 regions as well as abroad, began their training on March 11.

ANDREY RASKIN SPECIAL TO RBTH

People from 101 countries applied to be volunteers at the Sochi Games. Seventy percent of the applicants were women; only 2 percent were over the age of 60.

IN FIGURES

85

percent of the volunteers for the Sochi Games are between the ages of 18 and 30.

More women than men applied to take part in the program.

MIKHAIL MORDASOV_FOCUS PICTURES

The Winter Olympics in Sochi will begin in less than 12 months, and the Sochi 2014 volunteer movement has already recruited more than 25,000 people to help manage the movement of athletes and spectators during the two weeks of the Games.

All those interested in volunteering began their application journey at the Web site Vol. sochi2014.com. After logging on and filling in a detailed application form, every volunteer had to complete a battery of tests. The first series of tests were designed to test the applicants’ ability to stick with a task and follow it through to the end, while the second test evaluated the applicants’ English-language proficiency.

Applicants who made it past the testing stage were then invited to a 30-minute interview to learn more about them as people, get details on their previous work experience and evaluate their spoken English. According to the organizers, the higher the level of English, the better chance an applicant had of being selected as a volunteer.

Although volunteers are expected to pay their own way to Sochi, the Sochi 2014 organizing committee will provide all volunteers with accommodation and three meals per day.They will stay at a resort in Sochi’s Adler District for the duration of the test events. During the Olympics, the volunteers will stay in special housing in the Olympic village that is currently being built. Each volunteer will be approved to work at a single Olympic facility.

On their days off, volunteers will be given free tickets to attend events.

However, even perfect English

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and a desire to help their country hold its first Winter Olympics is not enough to guarantee volunteers a place on the team. After selection, prospective volunteers still have to complete a training

course designed to familiarize them with the basics of the organization of the Games and the Olympic facilities. Russian volunteers for the London Olympics are involved in this training.

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All of the volunteers will not only have to attend workshops; volunteers must also attend test events in Sochi in order to experience as much as possible what the real Olympic events will look

like. During the test events, they will meet Canadians, Americans and Norwegians who volunteered at the previous Winter Olympics in Vancouver; the group has been invited to give advice and train coordinators and volunteers for the Sochi Games.

Most of the volunteers are students, but other groups of people are also represented. Lyudmila Cherkasova, who currently works in janatorial services at the RusSki Gorki complex, is a Sochi resident with decades of volunteer experience.

“I have been a Nordic combined skier since I was a teenager. I worked in the steering committee of the Sixth Soviet Spartakiad, and I remember that all services had to be well coordinated.

Thirty years later, I keep one of the most important and expensive Olympic facilities clean. I hope I will be able to watch the events and maybe have my picture taken with a champion,” Cherkasova said.

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