2013 10 mp all

Tuesday, October 29, 2013

SPECIAL REPORT

RUSSIA

BEYOND THE HEADLINES www.rbth.ru

Monthly supplement from Rossiyskaya Gazeta (Moscow, Russia) which takes sole responsibility for the contents

For each grumpy russian waiter, there is a smiling babushka serving pelmeni.

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NATALIA MIKHAYLENKO

Snowden ‘to get’ high-paid job Dire warning

Mountains of doom

Moscow probes CEO amid cartel row

Experts predict more flood disasters to hit regions

Volcanoes in Kamchatka are deadly as ever

> PAGES 8-9

> PAGE 11

> PAGES 12-13

REUTERS

Potash war

GETTY IMAGES/FOTOBANK

Social media firms hope to employ American fugitive PAGE 3

2 Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

AP

History in the making

CRISIS IN MOSCOW ON OCTOBER 3, 1993, post-Soviet Russia faced its first crisis - a conflict between then-president Boris Yeltsin and the State Duma, resulting in protesters storming the Ostankino TV tower.

MIKHAIL SINITSYN

BRAZIL HERE WE COME

AP

© RIA NOVOSTI

TIME OUT

© RIA NOVOSTI

RUSSIA’S NATIONAL FOOTBALL TEAM qualified for next year’s World Cup in Brazil after it drew 1-1 with Azerbaijan earlier this month. Fabio Capello’s side sealed top spot in Group F, ahead of Portugal. Russia went into the match with an impressive four-match winning streak.

GREENPEACE CONTROVERSY

MURDER TRIGGERS RIOTS

SHINING LIGHT

ARCTIC SUNRISE CREW members were detained on September 19 over their protests against Russia’s decision to drill for oil in the Arctic’s Pechora Sea.

THE MURDER OF AN ETHNIC RUSSIAN MAN triggered violent protests in southern Moscow this month. At least 380 rioters were arrested following the rampage.

THE SOCHI 2014 WINTER OLYMPICS torch relay started this month. The relay will pass through nearly 3,000 towns, covering more than 65,000km and ending in Sochi on February 7.

RUSSIA BEYOND THE HEADLINES’ SUPPLEMENTS AND SECTIONS IN ASIA: GET THE BEST STORIES FROM RUSSIA EACH MONTH IN YOUR FAVOURITE NEWSPAPER In Huanqiu Shibao (China)

In Mainichi Shimbun (Japan)

“RUSSIA’S PUBLIC HEALTH CARE: FREE BUT BETTER FOR THOSE WHO PAY”

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In JoongAng Ilbo (South Korea)

In The Economic Times (India)

“JAPANESE UDON RESTAURANT CHAIN MARUGAME SEIMEN EXPANDS IN RUSSIA”

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“POST-AMERICAN AFGHANISTAN IS A CHIMERA”

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“INTERVIEW WITH RUSSIAN PAYMENT SERVICE QIWI FOUNDER”

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Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

‘High-paying’ job awaits Snowden

NEWSMAKER

American whistle-blower may start work in a social media organisation, writes Gleb Fedorov

REUTERS

F

Edward Snowden (above), his father Lon (right) and his lawyer Anatoly Kucherena

AP

ugitive American intelligence whistle-blower Edward Snowden could soon find a job in Russia’s social media.

The 30-year-old former CIA employee and National Security Agency (NSA) contractor is reported to have received several job offers in Moscow, where he sought asylum in June, having disclosed classified details of topsecret United States and British government mass surveillance programmes to Western media.

Russian social media operators have been among the first to check out the exiled American’s credentials. The first job offer was made by Pavel Durov, founder and CEO of the Russian social network VKontakte, which has 43 million daily users and is one of the world’s few websites to have won the battle with Facebook in its home market.

“It would be interesting for Edward to apply his skills towards protecting the personal data of millions of our users,” Durov says.

Snowden has also received an offer from Ruslan Gattarov, head of the personal data protection working group in the Federation Council, the upper chamber of the Russian parliament.

Gattarov’s proposal was more of an adhoc consulting arrangement, so he has also called for a special donations account to be set up for Snowden.

“Edward is not a wealthy man, and his savings will not last him very long,” the Russian senator says. “I also want to say thank you to the bloggers who are not indifferent to his fate. Naturally, I am also helping him as best I can.”

Many experts in Moscow say that Snowden is unlikely to find any employment that involves access to classified Russian information, and that some companies will try to use his fame for their own public relations purposes.

The Russian internet giant Mail.ru Group and the computer security firm Kaspersky Lab could be among the American’s potential employers, and the fugitive’s lawyer, Anatoly Kucherena, has hinted that Snowden could probably work “in IT or rights activism”.

Kucherena says he is “absolutely certain” that Snowden “will find a highly paid job”. Snowden’s exact location in Russia remains a mystery. Since the whistle-blower’s arrival in Russia, the media have only learned that he is free to travel around the country. However, Kucherena says Snowden is “making some progress” in learning to speak Russian.

Edward Snowden’s father, Lon, said

his son should stay in Russia. Returning from a week’s reunion in Moscow last month, Snowden senior also said he liked the country.

“I am very grateful to the country for giving asylum to my son,” Lon said.

Snowden senior intends to return to Russia. He insists that his son has more information to disclose. One of the latest batches of classified information published on October 15 in The Washington Post has revealed that America’s NSA collects millions of contact lists from personal e-mail and instant messaging accounts belonging to the users of Facebook, Gmail, Hotmail, Yahoo, and others.

Snowden, who faces espionage charges, defended his disclosures as serving the country’s interests by sparking a public debate and informing the public about secret surveillance.

He escaped to Russia via Hong Kong International Airport on June 23, two weeks after the former CIA analyst first broke cover in Hong Kong.

When a spy’s cover is blown, a new life awaits in Moscow. Some real or alleged spies have found interesting work in Russia.

Others have found controversy and a hint of scandal.

Andrey Lugovoy, whom Britain accuses of murdering intelligence officer Aleksandr Litvinenko by poisoning him with radioactive Polonium in 2007, has become a member of the Liberal Democratic Party of Russia, and won a seat on its ticket to the State Duma.

Anna Chapman, whom the United States extradited to Russia in

2010 on spying charges, has become a presenter on the national Russian network REN-TV. Also a member of the proKremlin youth movement, The Young Guard, Chapman (pictured) has also posed for an erotic photo shoot for Russia’s most popular men’s magazine, Maxim.

When she appeared to Tweet a marriage proposal to Edward Snowden on July 4, the exiled American whistleblower said: “I would have married Chapman.

Goddamn, just look at her!”

PHOTOSHOT/VOSTOCK-PHOTO

‘Former spies’ enjoy life after escaping to Moscow

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4 Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

Mainland’s nuclear drive

C

onstruction of a fourth Russian-designed power unit has begun at China’s Tianwan nuclear power plant (NPP). The NPP4 unit is being built according to Russian blueprints, just like the first two plants that started operation in 2007.

Concrete was poured into the foundation and a spectacular fireworks display marked the start of yet another power project in Jiangsu province, with Russian scientists proudly thinking of the facility as their creation.

The concrete-pouring ceremony for the third unit took place in December last year and the launch of the fourth project was originally scheduled for October 20. However, Chinese construction workers had enough experience working on past Russian projects to complete preliminary operations almost

ENERGY one month ahead of schedule. This was done without affecting the quality of work, which is being closely monitored by specialists in the Atomenergoproekt field supervision team.

The construction of NPP3 and NPP4 has now entered an active phase with

the units being designed by St Petersburg-based Atomenergoproekt, a subsidiary of Rosatom Corporation. “The two first-stage power units, each with a 1,060MW reactor, were launched six years ago. They continued under warranty until September 2009, after which the units were handed over [to the Chinese side] for commercial operation,” says Pavel Bezlepkin, deputy chief engineer of the project.

The Tianwan project is evidence of the solid reputation of Russian nuclear technology, and of steady demand for time-tried design solutions in this sector. China’s approval of the projects boosts the reputation of Russian-designed nuclear power plants in the wake of safety concerns after the Fukushima crisis in Japan in March, 2011.

After the Fukushima accident, China introduced a moratorium on new NPP

PHOTOSHOT/VOSTOCK-PHOTO

Jiangsu province launches construction work for fourth power station, writes Alexander Yemelyanenkov

Construction of a fourth power unit has begun at Tianwan nuclear plant. projects. The ban lasted for nearly two years, until the Russian project to build a second stage of the Tianwan NPP was finally cleared after strict checks for compliance that adhered to post-Fukushima safety requirements.

The power plant is near the town of Lianyungang with a population of around 4.5 million. Experts say it is the largest project in the history of econom-

ic co-operation between China and Russia. Under the terms of the contract for the second stage, signed between Russia’s Atomstroyexport and Jiangsu Nuclear Power Corporation, two more power units are to be built, with a combined capacity exceeding 2GW. Tianwan’s third unit is scheduled to start operation in February, 2018, with NPP4 due to begin in December, 2018.

China UnionPay given green light to operate Marina Maksimova

UnionPay has not yet unveiled its action plan for Russia; there is no information on the amount or areas of investment, or on its partner companies ALAMY/LEGION MEDIA

China UnionPay (CUP) has been granted a long-awaited licence for operating in Russia, although experts are sceptical about the Chinese credit card giant’s prospects in the country.

Many believe the main reason Russia is allowing one more player into the market is to exert pressure on global brands such as MasterCard and Visa.

The granting of a licence in Russia to China’s leading payment operator means CUP card holders will be able to withdraw cash from ATMs and pay for purchases in Russia. UnionPay has yet to unveil its business strategy for Russia and no information is available on the amount or areas of investment, or even its partner companies.

The national payment system law allows foreign companies to operate in Russia.

The question experts are asking is more about timing. With the CUP licence up in the air for so long, why did Russian regulators agree to it now?

It is suggested that the Russian authorities’ aim is not so much in giving one more payment system full-fledged access to the market as in applying more pressure on MasterCard and Visa.

“They [MasterCard and Visa] were required to move processing to Russia

China UnionPay is not well-known in Russia, although it has a potential. and were presented with other demands, which did not happen in any other country,” says Aleksey Logvin, chief economist with RGS Asset Management.

CUP does not have any particular advantages over its rivals and the competition is unlikely to become stronger.

However, the two American companies may now become more compliant, he adds.

In theory, the arrival of a new payment company will give a fresh impetus to direct transactions in Russians’

online shopping market, whose volume grows year-on-year. Still, many are wary about CUP’s prospects. “CUP’s arrival will have no effect on the payments market. It is impossible to take up a large share of this market from scratch. Besides, Chinese goods can be paid for with Visa and MasterCard cards,” says Maksim Vasin, a senior analyst with the National Rating Agency.

A successful global company must be highly competent and have a credible potential in the country it operates in, not only its home country, he adds.

“Western companies are usually successful in developing a global business, whereas all the others are less so. That is why the Chinese company will not have a specific advantage on the Russian market, even though it may be dominant in China. Without an advantage they will not achieve anything,” Vasin says.

A more significant factor, though, according to experts, is PayPal’s arrival in Russia.

PayPal, they feel, is stronger than local payment systems in many respects.

In addition, they are not convinced that Russian banks will be willing to issue Chinese payment system cards en masse.

“My guess is that banks actively developing business in the Russian far

east, especially in the border areas, would be interested in becoming acquirers. As for the prospect of Russian banks issuing millions of cards, I don’t think that is likely,” says Yuriy Bozhor, head of plastic card management at Otkrytiye Bank.

“Of course, more and more Russian tourists visit China, and there are difficulties with accepting Visa and MasterCard cards in China, especially in the remote regions.

“Still, it is not clear what a tourist will find easier to do, take 2,000 dollars in cash with them or obtain a new card, especially for the trip.”

The benefits will be obvious for Russian tourists, retail companies and ATMs in the far east and for shuttle traders, he adds.

According to Retail Banking Research, in terms of the number of payment cards issued globally, in 2010 UnionPay outstripped Visa (29.2 per cent against 28.6 per cent) and MasterCard (20 per cent).

CUP is the world’s leader in the number of issued plastic cards, with the total number of UnionPay cards having reached 3.4 billion.

Payment cards are accepted in 141 countries of the world. In Russia, CUP co-operates with VTB, Gazprombank, Uniastrum Bank, Moscow Bank for Reconstruction and Development and Bank of Moscow, among others.

Tuesday, October 29, 2013

5

RUSSIA BEYOND THE HEADLINES

Freight expectations Moscow and Beijing work towards increasing cross-border trade volumes, writes Viktor Kuzmin

R

BUSINESS “These trains consist of a hodge-podge of containers, box cars, platforms and tanks.” This stretch is used for the daily Moscow-to-Beijing passenger service (both inbound and outbound trains), and two daily services to and from Chita.

Freight trains can only use the track in between the passenger services.

Golubchik says that once a planned second track is built on the stretch, its transit capacity could increase five-fold to seven-fold.

PHOTOSHOT/VOSTOCK-PHOTO

ussia and China are putting in place the infrastructure required to speed up freight traffic across the border – but progress is slowed by bottlenecks in Russia’s own transport system.

In late September, Beijing hosted the 17th meeting of a Russian-Chinese subcommission for transport co-operation.

Figures discussed during the meeting showed that freight turnover between the two countries was growing across all types of transport, despite the continuing weakness of the global economy.

However, one problem is a singletrack railway stretch of more than 400km that connects the border town of Zabaykalsk with the Trans-Siberian Railway in which freight trains play second fiddle to more frequent passenger services.

“For that simple reason, the stretch can accommodate only four inbound and four outbound trains a day, five at the very most,” says Andrey Golubchik, head of the foreign trade and transport department at the law firm Marsh&Wilts.

Russian companies will invest in cross-border infrastructure.

An avid traveller’s tale about Hong Kong Gleb Fedorov Russian entrepreneurs often venture into rather unexpected lines of business.

For example, most visitors and fans of the highly popular Amazing Hong Kong page on Facebook probably have no clue that the page was created by a Russian.

Olga Bereslavskaya launched her people’s guide to Hong Kong this year. By the end of summer, the number of subscribers topped 100,000 and the figure has already reached about 150,000.

“This is a serious thing for me,” Be-

Over the years of travels, I have taken lots of photos. I am not a professional.

But at some point I decided to set up a page about Hong Kong to tell people about the places I have visited in the city, the things I have done, the food I have tried. I launched the project on January 5.

reslavskaya says. “I have been spending time on this page every single day since the beginning of the year.”

In an interview with Russia Beyond The Headlines, Bereslavskaya, an online marketing expert, uses the Hong Kong page as an example of a successful strategy when starting a popular group on Facebook.

Did you know right from the start what exactly you were going to do?

How did the whole thing begin?

No, at first I just set up a group and invited my friends to have a look. They liked it, and then they started asking questions.

On January 6, I deleted the whole thing and then re-posted the photos using watermarks. I also supplied captions with details about the things shown on the photos. I always provide a link to pages containing more details, and use geo-location tags. The thing that makes me different is that I do this every single day.

I like travelling, and I have been to many countries around the world. I like architecture, I like smiling people, and I like clean and orderly streets.

Do you keep track of your competitors?

PHOTOSHOT/VOSTOCK-PHOTO

Amazing Hong Kong has now become a people’s guide to the city.

Among all the groups about Hong Kong, mine is the second most popular after Discover Hong Kong, which has about 430,000 fans. It has won a large audience, but when my group started to gain prominence, it made changes that make it look like my own page.

Lack of railway capacity is the main obstacle to increasing trade between Russia and China, which is why the costlier and time-consuming sea route is a more common option.

Freight traffic between the two countries is mainly channelled via four border crossings: Zabaykalsk-Manchuria, Rodekovo-Suifenhe, Naushki-SuheBator (transit via Mongolia) and Dostyk-Alashankou (transit via Kazakhstan).

During the September meeting, the parties resolved several issues on passenger road traffic and air traffic. They also completed an important stage of preparations for the construction of a railway bridge on the Nizhneyeleninskoye-Tunjian section, and signed an agreement on maritime transport.

According to the Russian Transport Ministry, freight turnover in 2012 reached 39 million tonnes by sea and river transport, and 29.3 million tonnes by railway. In the first half of this year, there was a large increase in coal shipments from Russia.

6 Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

T

he traditional school-university-work-marriage-children system gave young Soviet citizens a blueprint for their lives.

Now, 22 years since the collapse of the Soviet Union, times have changed.

“In the USSR, we always thought that a woman should give birth before she turned 25,” says retired midwife Militina Dolina, who has 52 years of experience. “If you gave birth after 25 it was said to be late.”

This explains why the average marrying age for women in the USSR during the 1970s and 1980s was around 22 years, and in 1990, it was 21.9 years, according to the HSE Institute of Demography.

However, as Russia’s state-controlled economy gave way to a free-market one, priorities changed. According to online surveys by Russia’s employment website Superjob, in 2013, a third of economically active Russians over the age of 18 believed that raising children was incompatible with building successful careers.

In addition, most young adults under 24 put their careers ahead of family.

“I am against settling down early,” says 25-year-old sales manager Ekaterina. “A man and woman must first find their purpose in life, and they should be ready to start a family. As for early marriages – they don’t last.”

Indeed, most young urban Russians who are educated and well-travelled share this view, though there remain in this group those who believe in early marriage.

Housewife Anna, 27, has two daughters, aged seven and three, and a threemonth-old son, is happy with her role in life. “When I was 19 and my husband and I started living together, we both really wanted a child,” she says. “So I gave birth at the age of 20. I spend all my time with my kids and I am very happy that this is possible. Their child-

SOCIETY

In Russia, a young mother can take maternity leave for up to three years and still return to her job hood will go by fast, but my work will still be there.”

In Russia, the legal age for marriage is 18, and in some regions exceptions are granted under specific circumstances to marry as young as 14. The number of people marrying at younger than 18 is not very high, but the average Russian woman marries at 22, and the Russian man at 24, among the youngest in the world, according to 2012 data from the Levada Centre.

In comparison, HSE Institute of Demography data states that the average marriage age in the United States is 26.1 years, while it is 28.8 in Japan and 30.2 in Germany.

Because of government policy in Russia that actively promotes increasing the national birth rate, Russian maternityleave conditions are among the best in the world. A young mother can take ma-

In the USSR, every stage of a person’s life was regimented. There was a specific time to marry and have a career. ternity leave for up to three years and still return to her previous job afterwards.

However, this law does not help families who need the mother’s salary because, for the 18 months after birth, she will only receive a lower salary after taxes, and sometimes this is quite low.

“I would have happily stayed with my children,” says Olesya, 26, who works in an embassy visa division. “But I was left all alone, my child’s father didn’t help me and I had to go to work. Social payments are less than 40,000 roubles [HK$9,600], which isn’t enough to live in a big city.

“At first, my mother baby-sat my daughter, after that I hired a baby-sitter, but now she is almost two and goes to kindergarten.”

Two-parent families may be financially secure, especially if the man earns enough to support the whole family. For women who want ca-

Poll: children or career?

42% age under 24

want a successful career

35% age 25-34

23% age over 45 think children are more important

want a balance between the two

ITAR-TASS

Attitudes are changing over how old, or young, couples must be before tying the knot, writes Olga Gorshkova

ITAR-TASS

It’s the age of modern marriages

Government policy encourages increasing the national birthrate.

reers, though, staying at home to raise a child for three years is near impossible.

Anastasia, a 27-year-old designer at a glossy magazine, is convinced of this.

She gave birth at 23 and returned to work just two weeks later, leaving her daughter in the care of a baby-sitter.

“You lose your abilities, your circle of contacts,” she says. “It’s impossible to return to your profession at the same level. Besides, when your child grows up, they will blame you for not giving them everything their peers have.”

Socialisation and professional growth are the main reasons young Russians choose their career paths. According to Superjob survey results, 42 per cent of people under 24 dream about successful careers, to which children are only perceived to be a hindrance.

Thirty-five per cent of those between 25 and 34 think that couples should focus on their careers until the birth of a child. However, among those over 45 years, only 23 per cent think that children is more important than a career.

Elena Bolashova, head research scientist of the psychology faculty at Moscow State University, agrees that there is a tendency today to put careers before family.

“Today, people have started thinking about their careers in a completely different way,” she says. “This is because there are a lot more possibilities for professional growth, if we compare it to the situation 30 to 40 years ago. Today, there are possibilities of serious financial growth, of work abroad and of travelling. We used to see career-driven men, but now there are many more career-driven women.” In order to spend time with their children, and earn a living, many young mothers find freelance work, or start their own business.

Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

Diplomatic spotlight Lavrov emerges as a key player in world politics, writes Yulia Petrovskaya

I

n terms of global diplomacy, it was a deal of seismic proportions and grabbed the world’s attention. The agreement between the United States and Russia to destroy Syria’s chemical weapons was, without doubt, the diplomatic shock of the year.

However, while it was US Secretary of State John Kerry who first suggested it, the international spotlight somehow fell on Russia’s foreign minister, Sergey Lavrov.

Some commentators have gone as far as to say that the Syria agreement will come to be known as the pinnacle of Lavrov’s diplomatic career.

Lavrov’s friends describe him as affable – he likes to sing, play the guitar and drink whiskey. Unlike many Russia’s influential politicians, he prefers to spend his holidays riding the river rapids of Russia rather than travelling to some exotic foreign resort.

Lavrov likes rafting, football, mountain skiing and underwater hunting. It is said that he collects old weapons. He serves as the president of the Russian Federation of Canoe Slalom.

“Mr Lavrov is quite fit and sporty,” his former classmate, journalist and retired intelligence officer Yuri Kobaladze said in an interview. “He has a good appetite, but he is always lean and in good shape. It probably helps that he likes to split logs and chop wood so much. Even at the Russian ambassadorial country residence in New York, he would often ask the gardeners to leave a few round logs for him to split.”

In the US, Lavrov has had to not only chop wood but also cross swords at the United Nations Security Council.

He had served as Russia’s permanent envoy to the Security Council for just as long as he has now spent serving as Russia’s foreign minister.

Still, did Lavrov foresee his own longevity on the diplomatic arena? After all, up until now the only people who have managed to make successful predictions about appointments in the Russian government are the ones who make these very appointments. Back in 2006, I was present at a conversation discussing plans for the following year, during which Lavrov said, smilingly: “That’s if I am still a minister by then.”

Lavrov was born in 1950, and his ethnicity is stated as Russian. Lavrov’s father was an ethnic Armenian living in Tbilisi. After finishing high school, Lavrov entered the Oriental faculty of the Moscow State Institute of International Affairs. In addition to his major, Sinhalese, he also studied English and French. After graduating in 1972, he became an intern at the former Soviet embassy in Sri Lanka.

Lavrov’s diplomatic career began when he served at the Soviet Foreign Ministry’s Department for International Organisations. From 1981 to 1988 he held the positions of first secretary,

NEWSMAKER adviser, and senior adviser at the Soviet mission to the United Nations.

From 1988 to 1990, he was deputy head of the Department for International Economic Relations at the Russian Foreign Ministry. And from 1990 to 1992, he served as director of the Foreign Ministry’s Department for International Organisations and Global Problems.

In 1992, Lavrov was appointed deputy foreign minister under then-foreign minister Andrey Kozyrev. Two years later, he left on a posting to New York as the permanent Russian envoy to the UN. This was a turning point in his career.

During his years with the UN, Lavrov took part in discussions on the conflicts in the former Yugoslavia, Iraq, the Middle East and Afghanistan. Lavrov was first slated to replace Kozyrev, in December 1995 – but the Kremlin appointed Yevgeny Primakov instead. And, in 1998, Primakov was succeeded by Igor Ivanov.

Lavrov’s turn came in 2004, and since then, he has covered considerable ground.

He has defended Russia’s missile defence system against criticisms from the US, he signed a new agreement about Russia’s border with China, he discussed a peace treaty with Japan in an effort to end a longstanding territorial dispute, and he has been closely involved in negotiations about Iran’s nuclear programme.

Lavrov likes to sing, play the guitar and drink whiskey

GETTY IMAGES/FOTOBANK

3

SERGEY LAVROV’S PREDECESSORS

1

First foreign minister under former president Boris Yeltsin (1991-96), Andrey Kozyrev was criticised for his failure to support the Bosnian Serbs.

2

Eighty-three-yearold Yevgeny Primakov, who served as Russian prime minister (1998–99) and chief of foreign intelligence (1991-96), was Vladimir Putin’s adviser and ally.

3

Foreign minister (1998-2004) and secretary of Russia’s Security Council (2004-2007), Igor Ivanov retired from politics in 2007. He chairs the Investment Strategy Committee at Lukoil.

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8 Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

Potash war takes bizarre twist co-operation between members, a public row between two of the founding partners threatens the entire programme.

Relations between Uralkali and Belaruskali have become increasingly strained over the past year. Together, the two companies account for about 40 per cent of global production and BPC has considerable pricing clout. But, like all cartels, accusations of unfair practices had undermined the partnership.

As the Belarusian economy came under increasing financial pressure, Belaruskali was selling potash on the side to make extra cash. In December, Lukashenko cancelled BPC’s exclusive rights to export Belarusian potash, opening the door to more side deals.

Uralkali responded by setting up a trading company of its own in the middle of this year and has also started doing deals independently. Uralkali’s independent entity signed an agreement to supply China – the world’s largest potash consumer – with 500,000 tonnes of

Relations between Uralkali and Belaruskali have become increasingly strained over the past year.

The Kremlin was outraged and the business community was shocked at Baumgertner’s arrest

Investigators prepare extradition papers The Russian Investigative Committee is preparing an extradition request for Uralkali’s CEO Vladislav Baumgertner, spokesman Vladimir Markin told Russian media.

“After reading the files received from the Belarusian [police], the committee’s investigations department started a criminal case against ... Vladislav Baumgertner [pictured], ex-first deputy head of the Belarusian Potash Company Konstantin Solodovnikov and others on counts of abuse of authority, which is an offence under Article 201 of the Russian Criminal Code,” Markin said.

AP

T

he “potash war” that started in August, when Russian fertiliser giant Uralkali pulled out of a major partnership with Belarus’ Belaruskali, took a bizarre twist with Russian investigators saying they are conducting a probe into the financial dealings of Uralkali CEO Vladislav Baumgertner.

Baumgertner, who accused the Belarusian side of selling potash, which is primarily used as a fertiliser, outside of the Belarus Potash Company (BPC) – the cartel company they both set up to co-ordinate sales – has been under house arrest in Belarus’ capital Minsk since August.

“This is the fastest track to get him [Baumgertner] back to Russia,” Konstantin Yuminov, an analyst at Raiffeisenbank in Moscow was quoted as saying in the Financial Times, adding that this was “a positive development for the company”.

Experts believe that by extraditing Baumgertner to Moscow, it could help end the stand-off between the two companies and act as a face-saving exercise for Belarus president Alexander Lukashenko, whose country was already heading towards a financial crisis even before the potash war started Baumgertner flew to Minsk at the invitation of Belarus Prime Minister Mikhail Myasnikovich for talks on the crisis before being promptly arrested.

In July, Uralkali pulled out of the cartel, sending the price of potash plummeting and threatening Belarus with a payments crisis because it relies on Belaruskali for 25 per cent of export revenues and could cost the country US$1 billion.

It is also a headache for the Kremlin, which is trying to build a Customs Union – a trade bloc to rival the European Union. So far, only Belarus and Kazakhstan are members, although Armenia and Kyrgyzstan will join soon. Because the bloc is supposed to promote closer

REUTERS

Moscow probes Uralkali CEO Vladislav Baumgertner amid cartel row with Belarus, writes Ben Aris

Baumgertner has been under house arrest in Belarus since August.

potash in the summer, cutting the Belarusians out of the deal.

At the time, Baumgertner said: “Belaruskali has made a number of deliveries outside BPC. We have repeatedly informed our Belarusian partners that such actions were unacceptable.”

Lukashenko had tried to pressure Suleiman Kerimov, Uralkali’s main shareholder who has huge debts, into selling his 22 per cent stake and some Uralkali shareholders have insisted that Baumgertner be freed as a precondition of any negotiations or a sale by Kerimov, the Financial Times reported, citing insiders.

Russian authorities were reported to have said that the investigation into Baumgertner was based on information provided by Belarusian police. By October 15, he had yet to be charged.

Still, Uralkali holds the upper hand because the deal is more important to the Belarus side than the Russians.

The end of the BPC sales partnership, if confirmed, could completely change the nature of the business and make potash a simple commodity. Instead of controlling production levels to keep prices high, Uralkali says that it would now follow a high-volume, lower-price strategy.

BPC had been restricting production to keep prices above US$400 per tonne, but

now the price could fall to US$300, the company said last month. The row took a decidedly aggressive turn on August 26 after Baumgertner was arrested on “abuse of office” charges at the airport on his way home to Moscow.

The Kremlin was outraged and Russia’s business community was shocked at the arrest. Baumgertner was made to do the “perp walk” on Belarusian national TV the same day; he was shown handcuffed and being marched to a prison cell. Even in Russia this was considered to be a step too far for a senior Russian businessman.

Since then the situation has become confused. The Kremlin called for Baumgertner’s release and followed up by announcing a cut in crude deliveries to Belarus’ two refineries, and threatening to ban dairy imports into Russia.

At the same time there has been a freefor-all among investors to buy into the company – which remains a world leader in the business – after its share price plummeted some 40 per cent after the end of the BPC partnership was announced. China is one of the clear winners and announced on September 24 that it had bought a 12.5 per cent stake in Uralkali, enough to give it a seat on Uralkali’s board.

Tuesday, October 29, 2013

9

RUSSIA BEYOND THE HEADLINES

China reaps spoils of row and has say on prices

BUSINESS

Mikhail Volkov

PHOTOSHOT/VOSTOCK-PHOTO

Alexander Lukashenko

AFP/EASTNEWS

Suleiman Kerimov

Fertile grounds

As the row between Uralkali and Belaruskali simmers and the relaunch of their potash cartel hangs in limbo, the only party smiling is China. Indeed, the Chinese have emerged as the big winners from the dispute.

Not least of all because the cost of this crucial fertiliser has already fallen by about a third. China is one of the leading consumers of potash and a key market for all of its major exporters, accounting for 25 per cent of Uralkali’s sales.

Russian billionaire Suleiman Kerimov, who is heavily in debt, has reportedly been trying to sell his 21.75 per cent stake since August.

China was the first to step into the breach and the Chengdong Investment Corporation (CIC) converted the Uralkali bonds it bought in November last year into a 12.5 per cent stake in the company – enough to give it a seat on Uralkali’s board.

This makes Uralkali’s biggest customer privy to all the company’s discussions on pricing strategy and production plans, undoing some of the company’s monopolistic power in the market. It was also the first case of a Chinese company buying into a potash producer.

Uralkali CEO Vladislav Baumgertner, now under house arrest in Belarus, maintained in an interview to Vedomosti that the deal with CIC did not carry any additional obligations on sales to China or price.

Renaissance Capital analyst Boris Krasnozhenov thinks that having Chinese representatives on Uralkali’s board would have a positive effect on the company.

“They can help make good deals in China and in other countries like [south] America,” he says.

On the other hand, the move could entail political problems because the new Chinese directors could try to block the potential alliance with Belaruskali from coming back, Krasnozhenov says.

Meanwhile, China has been building up stocks of potash and has been delaying signing a new contract for next year in the hope of forcing the price down. The Russian and Belarusian com-

China was the first to step into the breach and CIC now has a seat on the Uralkali board panies have cut production and insisted on higher prices. The negotiations turned into a game of chicken. By the start of October, it looked like the fight was coming to an end and a new deal with Belaruskali may be on the cards.

“The potash market now has a high chance of returning back to an oligopoly,” Elena Sakhnova, an analyst with VTB Capital said in a note on October 3.

“Suffering from a lack of potash sales that bring urgently needed foreign exchange into the country, Belarus has said ownership changes at Uralkali is the major prerequisite for recreating the Belarus-Russian trading consortium. After Russian President Vladimir Putin said that the problem needed to be resolved, there has been a search for a replacement for Suleiman Kerimov, with [St Petersburg-based oligarch] Vladimir Kogan the most likely candidate.”

Whatever happens it seems that China will exit this saga in a much-improved position.

The two potash producers may be able to patch up their differences and reform the cartel, but they have seriously damaged their pricing power and the cost of potash is likely to remain cheaper than it was before.

“No man ever steps in the same river twice, for it is not the same river and he is not the same man,” says Sakhnova, quoting ancient Greek philosopher Heraclitus.

Sakhnova says with a global capacity of 77 million tonnes next year, and expanding, against the all-time record consumption at 56 million tonnes, it will take at least five years to add US$100 back on to the price of potash.

10 Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

Saddled between truth and treason E

OPINION

dward Snowden, the former National Security Agency (NSA) contractor, can be considered the West’s equivalent of a modern-day Alexander Solzhenitsyn (1918-2008), the late Russian dissident and writer.

They are alleged to have committed “acts of treason” and share other similarities. However, the attempts of both controversial figures to appease the public came too late.

Snowden’s tardiness was in the interview he gave to The New York Times, in which he explained his actions in leaking NSA files and denying rumours he passed on United States secrets to Chinese and Russian intelligence organisations.

After all, it came several months after the peak of the Snowden hysteria, which resulted in the forced landing of the plane carrying the Bolivian president, Evo Morales, after the US and its allies suspected the aircraft of ferrying Snowden from Moscow to a new sanctuary.

Solzhenitsyn erred when he returned to Russia in 1994, 20 years after being exiled from the Soviet Union. Many view it as a return that was several years late and he would have better served the Russian people had he arrived in his homeland between 1989 and 1991, when the mountains moved to initiate the collapse of the Soviet Union.

In the interview, Snowden explained that he did not consider his action to be anti-American, and that he did not carry any sensitive documents after releasing the information about the NSA’s surveillance programmes to journalists in Hong Kong. He also defended himself against accusations that he worked for the Chinese or Russian

NATALIA MIKHAYLENKO

Dmitry Babich

intelligence, stating that he had carefully protected sensitive data from Chinese intelligence officers. When in the US, Snowden had taught a course on Chinese intelligence. Snowden also said that the NSA knew he had not revealed any secrets to the Chinese.

By this time, however, Snowden’s reputation was battered beyond repair. Until then, US officials had mounted an aggressive campaign against him, calling him a traitor and hinting at possible material gains he might be pursuing by making his revelations in Hong Kong and Russia.

Solzhenitsyn was also very careless. Instead of

defending himself against accusations of treason, launched against him by the Soviet authorities, he always talked about the global problems of Russia and the world in general. However, do we judge these men by the standards normally reserved for celebrities? There is no doubt that, for the majority of Russian and American public figures, being stuck in Moscow airport, with the whole world watching, offered the ideal opportunity for some publicity. Snowden, however, hid from view as much as he could.

Snowden is not like Barack Obama, or Dmitry Medvedev or others who crave the spotlight. He

is more like Solzhenitsyn. Both are personalities in their own right without trying to be one. While Snowden leaked information about US surveillance operations, Solzhenitsyn wrote novels about the Soviet prison system. The content is different but the context remains the same.

In the 1950s and ’60s Solzhenitsyn wrote his best books. In Snowden’s case, people prefer the real thing – genuine e-mail messages leaked into the internet.

The main similarity came in the reaction from the authorities. The Soviet authorities in Solzhenitsyn’s 1970s and the American authorities in 2013 did not deny that the revelations were true.

Leonid Brezhnev, the Soviet leader of the 1970s, could not deny the existence of Stalin’s concentration camps, which Solzhenitsyn described in his novels. Brezhnev just said these were “deviations” in socialism and “individual mistakes”. The NSA’s defenders said that the Prism programme was targeting terrorists. They apologised if some peaceful citizens were sometimes eavesdropped on.

Solzhenitsyn and Snowden were accused by some of their compatriots of revealing their findings to foreigners and not to their respective governments. Several congressmen bemoaned Snowden for “not using the congressional way”.

Solzhenitsyn was accused by the Soviet authorities of behaving like a “foreign spy”.

These accusations could be justified if there had been even a remote possibility of getting one’s voice heard at home. In his interview, Snowden’s described his CIA boss’s reaction to his criticism of the agency’s actions before his “coming out” as a whistle-blower. The boss just told Snowden not to rock the boat.

Dmitry Babich, Radio Voice of Russia, special to RBTH.

Provocative language leads to nowhere David S. Foglesong To fulfil the potential for co-operation, the United States and Russian leaders must refrain from the kind of provocative statements that inflame national sentiments.

All nations are unique, of course, and, in principle, each country’s sense of distinctiveness need not harm their relations with others. In practice, however, a nation’s belief in its own exceptional status often contributes to a sense of racial superiority or a cultural arrogance that results in violent and ugly consequences.

Americans’ deep faith in the perceived exceptional status of the United States does not neces-

sarily drive specific foreign policy decisions, but it tends to pull US foreign policy in three different directions: towards a revulsion at revolutions by hotheaded foreign masses unable to emulate the supposedly sober and moderate examples displayed by Americans; towards an isolation from the conflicts and corruptions of morally and politically inferior nations; or towards ambitious and costly efforts to remake countries in the image of the US. Especially in the context of the economic downturn after the costly and disillusioning experiences in Iraq and Afghanistan, American exceptionalism is unlikely to be a danger to the world. Yet, the unilateralist strain of American exceptionalism certainly does not contribute to strengthen-

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ing the United Nations and other international institutions.

The Americans’ need to affirm the moral superiority of their country has led them to magnify the evils of other nations. Since the late 19th century, Americans have defined the exceptionalism of the US through contrasts with Russia – in its tsarist, Soviet and post-Soviet forms – more than any other nation.

That tendency has often contributed to highly charged media representations, emotionalism and personal attacks on Russian leaders by American politicians that make it more difficult for Washington and Moscow to pursue their common interests. The Russians, in turn, have also often tried to affirm their moral superiority through contrasts

with the US regarding American materialism, racism and imperialism. They also have succumbed at times to the self-flattering notion that very different nations were following their uniquely shining example. Yet, since the demise of the Soviet Union, Russian leaders have been freed from that ideological delusion and in the 21st century they have generally focused on Russian national interests.

To fulfil the potential for co-operation with the US, Russian leaders will need to refrain from reacting to American vilification with provocative statements that inflame US sentiments.

David S. Foglesong is professor of history at Rutgers, The State University of New Jersey.

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Tuesday, October 29, 2013 11

RUSSIA BEYOND THE HEADLINES

Staff from the Emergency Control Ministry erect barriers.

Dire warning

SERGEY SAVOSTIANOV / RG (3)

A local takes time out for a bit of fishing near his house.

S

evere flooding in Russia’s far east regions of Amur and Khabarovsk this summer has caused considerable damage, with tens of thousands of residents losing their homes to surging waters.

The floods, that have affected an area of more than 400,000 square miles, is another example of unusual weather conditions that have afflicted the country this year and serve to increase fears that Russia’s climate is changing.

Russian scientist Alexander Minin, senior researcher with the Institute of Global Climate and Ecology, says that while the earth’s climate naturally changes, the patterns now are more disturbing.

“Our climate is forever changing, it’s just that these days, it has become less balanced,” he says.

“There is indeed a warming trend, but it is confined to individual regions and it isn’t distributed unequally throughout the year. In some areas, we’re actually observing a cooling process.”

This summer, a hot and humid air mass hang over China, while in Yakutia in northeastern Siberia air temperatures stayed relatively low.

This temperature difference caused a low-pressure system to form, triggering high rainfall over Yakutia’s largest rivers: the Amur, Zeya, Bureya, Sungari and the Ussuri.

The head of the Russian Hydrometeorological Centre, Roman Vilfand, says the floods were caused by climatic changes that brought about abnormal air-circulation patterns over the Far East of Russia.

During the 1990s alone, Russia’s mean annual temperature in the lower atmosphere increased by 0.4 degrees.

CLIMATE According to Russia’s 2005 long-term climate-change forecast, published by the Federal Service for Hydrometeorology and Monitoring of the Environment (Rosgidromet), the country can expect a sharp increase in natural disasters across its territory. Yakutia, the north-eastern areas of the far east and Kamchatka, are likely to see more floods as a result of increased precipitation.

Natural disasters will mostly be caused by meteorological phenomena

related to upward and downward movements of great air masses below the level of cumulonimbus clouds, and these phenomena are difficult to predict.

According to a joint study by Princeton University and the University of Maryland, Russia’s far east will likely see the advent of tropical typhoons and hurricanes, which will bring storms, tornadoes and floods.

The bad weather is because of the tropical zone gradually moving northwards.

Minin says climate change is invariably influenced by a number of factors, and is exacerbated by local factors such as deforestation and the reclamation of natural water reservoirs.

“In some areas of Siberia and the far east, plant-growth cycles have been offset by several weeks and bird-migration cycles have also changed.

“And in the Arctic tundra, some plant species have found themselves on the brink of extinction due to increased temperatures,” he says.

“Urban dwellings are also being affected. For example, the thawing of per-

Warm welcome to taller plants The warming of the tundra has seen low-growth plants being gradually replaced by taller plants. Several species of mosses and lichens have become threatened, including the Aloina moss (Aloina brevirostris).

Satellite imagery data suggests that tall shrubs, which thrive in higher temperatures, are gradually ousting mosses farther to the north.

These invading shrubs are growing taller.

According to estimates, around 10

to 15 per cent of the southern portions in the northern and western Eurasian tundra, which stretches from Finland to west Siberia, have been taken over by shrubs standing more than two metres tall, whereas only recently they were not more than one metre tall. Scientists were first alerted to these changes after nomadic northern shepherds began complaining that these “new trees” were restricting their sight of their deer herds.

mafrost is starting to affect pipes and buildings.”

The damage the floods have caused is estimated to be about US$1 billion.

About 10,000 homes in 190 towns have been damaged.

The Amur River has started to recede in some places along its mid-section by between five centimetres and 49 centimetres per day.

“We’ve been living in the attic for almost a month. The water is waist-deep inside the house and it’s impossible to stay there — it’s damp and moldy everywhere,” said Marina Maslova, who lives in the village of Vladimirovka.

“Today, we applied for a place to stay in a hostel, and we hope to move to normal living conditions soon.”

People are being sheltered at resorts and in army barracks. Homes that can still be salvaged are being dried out with space heaters.

Three hundred of these have already arrived from the government emergency fund and 2,000 more are on the way.

Last month, Russia’s President Vladimir Putin visited the affected areas and talked to local residents.

“We have never experienced a catastrophe on this scale before,” Putin said.

Putin also visited 20 evacuees at a temporary shelter.

After his visit, Putin’s special envoy to the far east Federal District and minister for far east development, Viktor Ishaev, was fired. Presidential aide Yuri Trutnev has become the new envoy.

According to official statements, the firing had nothing to do with the flooding, and the decision regarding Ishaev was made a month ago.

China’s Liaoning province was also hard hit by the floods, with more than 50 deaths. President Xi Jinping called for an all-out-effort in relief aid.

ITAR-TASS

Experts predict more natural disasters will hit a number of regions, writes Vsevolod Lazutin

Flooding was a major problem for the Amur River this summer. The river experiences two flood peaks annually – in spring and in the period between July and September. These are dictated by the monsoon rains.

However, last month, the river water level was 8.71 metres in Komsomolsk-on-Amur and still rising. In all, more than 5 million Russians and Chinese were affected by the flooding and thousands of buildings were inundated.

The flooding got so bad, one rescue worker, Yury Varakin said: “It’s not the same Amur [River] anymore, it’s almost an Amur sea, with its width ranging from 20km to 30km and over 1,000km in length.”

Scientists identified a number of reasons for the floods, including the Asian monsoon. The floods were also caused by persistent heat from the Pacific Ocean and six weeks of nonstop cyclones over the Amur region.

June’s rainfall was 3.5 times higher than average. A third reason for the floods was a late high-water spring.

ALEXANDER FROLOV, CHIEF OF THE RUSSIAN METEOROLOGICAL SERVICE

12 Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

Mountains of fire and doom

TRAVEL This freshwater lake is close to its ‘evil brother’ - an acid lake, separated by a wall

GETTY IMAGES/FOTOBANK

Travellers can meet the indigenous people of Kamchatka.

then briskly descends into the valley, and there the Mutnovsky and Gorelyi stand menacingly before us. Mutnovsky is an unforgettable sight. Even when the sky is covered by dense clouds, and the threat of getting drenched is real, it is worth putting on a raincoat and trudging through the mud and snow to enjoy the rare sight.

A trail, barely noticeable, rises along the slopes. A short, gentle climb up to the canyon and soon a peculiar smell, similar to rotten eggs, engulfs the senses. This is harmful sulfur dioxide that escapes from the volcanoes.

The last 50 metres of the climb is steep but once over it, we are here – here one finds a veritable living hell. Under our feet are small, bubbling geysers; hot steam bursts out from bigger holes with eerie screams and whistles. Fickle winds intermittently pelt us with dense clouds of toxic fumes.

Breathing in such a poisonous fog is not possible without some kind of mask.

We didn’t bring respirators and were therefore forced to use our hats.

However, the wind and toxic air is only one of the hazards. If you stumble, you can plunge into one of the holes.

After each winter, fumarole fields on the volcano Mutnovsky undergo a dramatic transformation. One year later, it was impossible to recognise the place.

It seemed like there was less gas escaping from the ground, but making up for it were big bubbling lakes that looked like they were cooking up something nasty.

After Mutnovsky volcano the climb up Gorelyi at first appeared to be a casual, carefree walk – excellent visibility, fresh air and sunshine. When we reached the edge of the crater, at the bottom of the lake we saw floating chunks of ice. This freshwater lake is close to its “evil brother” – an acid lake, separated by a small wall.

Going back in time, in the late 1960s, Russia started to explore space and one of its ambitions was to conquer the moon. Plans called for more than lunar landings. After research, scientists and testers came to the conclusion that the lunar surface, to a great extent, resembled the harsh landscapes of Kamchatka. Under tight security, in 1969 and 1970, tests were conducted in the area of Tolbachik volcano on technology and equipment that may be used on the moon. But in 1975, Tolbachik’s eruptions caused cracks in the land and the tests were disrupted. For more than a year, it was hell on earth.

Our jeep left the woods and reached

a clearing in the area before dawn.

Against the black sky, a blazing cone could be seen. We knew we were at the foot off Klyuchevskaya. Later that morning, we found a road that led to a campsite and lake a few kilometres away. We had to walk.

We set our camp in the afternoon as Klyuchevskaya rumbled. Shortly after our tents were raised, a thin coating of ash started to form on our bowls, mugs and forks. Ash was everywhere.

The volcanoes in Kamchatka offer breathtaking views for adventureseekers.

How to get there Flying is the easiest way to get to Kamchatka. From Moscow it is about eight to nine hours.

There are also flights from Vladivostok and Khabarovksk, and ferries and cruise ships leave from Sakhalin and Vladivostok.

There is no rail connection to Kamchatka because the mountain ranges between the peninsula and the mainland prevent tracks being laid.

Picture-perfect wonders Katerina Mukhina Kamchatka offers spectacular nature adventures in which visitors can gasp at the scenery and marvel at the variety of wildlife. Autumn on the Kamchatka Peninsula is considered to be the best and most beautiful time of the year. The weather is relatively warm and sunny and the temperature holds at about 8 to 10 degrees Celsius. Quite often, there are thaws in which the air heats up to 15 to 20 degrees Celsius.

The views are spectacular and good enough to be framed. Indeed, the golden days of autumn, from September 15 to October 15, attract hordes of photographers from around the world who consider Kamchatka to be the most beautiful place on the planet at this time.

It is difficult to organise independent trips to the peninsula, so a number of companies provide services using accredited English-speaking guides.

Helicopter tours are by far the best way of gaining a true understanding of what the peninsula offers. These include hiking through the valleys and overnight stays in tents. Many of the routes re-

GETTY IMAGES/FOTOBANK

R

ussia boasts a vast and diverse geological landscape, from dry cold tundras to lush forests. One environment that stands out can be found in the harsh Kamchatka region – the land of fire-breathing volcanoes.

This is one of the few places on earth where one can observe volcanoes close up and actually feel the earth’s hot breath, which can be lethal to creatures caught in its fury. The area is also one of the first places in Russia that greets the dawn.

We flew here to shoot a film about survival in Kamchatka and it was raining as we arrived at Petropavlovsk-Kamchatsky Airport. The time difference from Moscow is eight hours ahead; the body was still asleep, but we needed to buy enough supplies before reaching the mountains.

Our guide advised us: “The main thing is to survive until the evening and sleep at night. A couple of days and you’ll get adjusted. It’s important to bring along hand flares, in case you meet a bear. And whatever happens, don’t run away from them. It will not help …”

By the evening, rain had stopped and a light breeze helped to disperse some of the fog. And by sunset, we could see the outlines of the volcanoes from afar.

Only then did we realise that we were in the real presence of these monsters on the very edge of the earth – our dreams of many years were coming true.

There we were, about to face Volcanoes Mutnovsky (Cloudy) and Gorelyi (Burned). Before we had a chance to meet the volcanoes, we had to drive a few hours on a bumpy gravel road.

The road first winds its way along a river and, within two hours, we reach the pass. From the top of the pass, in clear weather, a magnificent view opens up to the Vilyuchinskaya hill. The road

© RIA NOVOSTI

The volcanoes are deadly places that are probably the closest things to hell on earth, writes Ivan Dementievsky

Brown bears can be found throughout the peninsula. quire courage and endurance. After all, spending the night in a tent at the foot of a volcano can turn up a number of surprises – possibly a shrewd wolverine or curious bear looking for items of interest in the camp.

Brown bears – the symbol of the Kamchatka region – can be found throughout the peninsula and are sometimes even seen in the city. An encounter is more likely during a walk along the river or a lake.

Tourists can watch the beasts from

the safety of a special tower. There are tracks on both sides surrounded by fencing. Accompanied by a reserve inspector, visitors can walk along grazing trails and observe the bears in their natural environment.

Bears can also be encountered on the shores of Lake Kambalny. It is a small pond, surrounded by hills and often covered by fog. Getting acquainted with bears in the vicinity is possible at the ethno-cultural complex “Kaynyran”, which translated from the Koryak language, means bear’s house. It is located near Zelenovsk, 40km from Petropavlovsk.

This is also where the famous Kamchatka dog sled camps are, with more than 30 operators offering sled rides throughout the year.

There is also an abundance of wildlife on the river Zhupanova, which is only accessible by helicopter. Here, visitors can meet Kamchatka’s various residents such as otters, wolverines, lynx, sables, mink and reindeer.

Birdwatchers can marvel at the variety, including white-winged and white-tailed sea eagles, peregrine falcons and merlins, all of which have lived in these forests for ages.

Tuesday, October 29, 2013 13

RUSSIA BEYOND THE HEADLINES Poisonous gases spew out from the volcanoes.

However, the toxic air is just one of the hazards adventure-seekers face when they climb the fiery mountains in Kamchatka.

GETTY IMAGES/FOTOBANK

ITAR-TASS

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FACTS ABOUT KAMCHATKA

Kamchatka boasts diverse and abundant wildlife. There are 58 species of mammals, 232 kinds of birds, 93 types of fish and 763 varieties of plants, 38 of which are rare. Kamchatka is also famous for the abundance and of its brown bears. In the Kronotsky Nature Reserve, there are about three to four bears per 100 square kilometres.

ON HORSEBACK US$2.7 for a pony or horse ride Izmaylovsky Park, which has its own stables, offers horseback or horse-drawn cart rides on weekends, Fridays and bank holidays, between 11am and 7pm.

There are two pick-up points in the central and northern sections of the park.

CYCLING US$27, inclusive of bike hire It has been possible for tourists to hire a bicycle in Moscow, but guided cycling tours is a recent phenomenon. Several cycling clubs offer a whole range of services, from simply cycling around the city centre, to cycling guests involving real adventures.

For schedules and prices in several languages, visit moscowbiketours.com

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Most flights to Petropavlovsk-Kamchatsky go from Moscow. The trip takes a little more than eight hours. Autumn is the traditional time to travel to the peninsula, and the cost of a flight from Moscow in September is about US$1,600. It is also possible to fly from Vladivostok and Khabarovsk, which is easier for tourists travelling via China or Japan.

TROLLEYBUS US$2.7 for a one-hour trip One of the more unusual sights in Moscow is the Blue Trolleybus, which plies the route along the Sadovoye Koltso ring road around the city’s historic centre and features famous invited artists playing the guitar and performing songs. Once the concert is over, the Blue Trolleybus turns into a regular transport vehicle for public use. The schedule for entertainment is available in Russian on the Blue Trolleybus.

Website at http://www.sin-troll.ru/or by calling +7 (499) 760-21-56, +7 (926) 215-48-49.

In the indigenous Koryat language, Kainyran means bear’s corner. And the Kainyran cultural centre, on the banks of Lake Kabalny, 40km from Kamchatka’s capital, gives visitors the chance to safely see bears in their natural habitat. The centre also shows visitors how indigenous people live: their homes, transport (dog sleds), dance and cuisine.

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STEAM LOCOMOTIVE US$23 per trip A steam engine built in the late 19th century offers a tour of the small railway ring around Moscow. The trip starts at the Rizhskaya railway station and offers views of the Novodevichiy Monastery, the Moscow City high-rise towers, the Ostankino TV tower, the All-Russia Exhibition Centre, and the Botanical Gardens.

The timetable and other details are available in Russian at http://retropoezd.ru The regular service operates only on weekends, but weekday trips can be booked in advance by calling +7 (495) 608-01-58.

TRAM From US$3.3 for a 15-minute trip to US$162 per hour for the whole tram The history of the Annushka, the affectionate name given by Muscovites to the old Tram Route A, dates back to 1911. This was the first electric tram to appear on the streets of the Russian capital. Many years later, the Annushka was upgraded and a small cafe was built in the tram. Passengers were now able to enjoy a tasty snack while watching the historic sights of Moscow pass by from the tram windows. The upgraded tramcar can take several different routes around Moscow.

The most popular route covers the distinct high-rise towers built in the southwest of Moscow during Stalin’s rule, and magnificent old architecture in the city centre.

EN.TRAVEL2MOSCOW.COM/WHERE/VISIT/

new ways to see Moscow for those tired of walking and taking bus tours

14 Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

GETTY IMAGES/FOTOBANK

Rock dances to perestroika Gorbachev’s reforms were, in part, fuelled by an underground rock music scene, writes Vasily Shumov

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times prior to Gorbachev’s reforms.

In 1984, the Soviet government of general secretary Konstantin Chernenko cracked down on bands, accusing them of ideological and moral sabotage of Soviet society.

Blacklists were issued by the top brass of the communist party and sent to all cultural and youth departments.

Many underground bands were prohibited from performing live and their songs were banned in discos and public places.

Musicians came under pressure.

Some were banned from rehearsing,

and others were suddenly called up for military service. Rock musicians, such as Alexei Romanov, leader of Voskresenie, and Zhanna Aguzarova, the female singer of Bravo, were jailed. However, Gorbachev’s appointment sparked a sudden U-turn. Rock music was legalised and the songs of previously ostracised bands were played on radio and TV shows. Soviet media started publishing a flood of positive articles about rock music and fans lined up for live concerts, which were now allowed.

One of the first public rock gatherings was a New Year’s Eve festival called “Yolka” in Moscow. The newly formed Moscow Rock Laboratory held an unthinkable rock festival, featuring more than 10 live bands that were blacklisted just a year ago.

The festival was packed, with performances by popular acts such as Moscow’s Mashina Vremeni, Brigada S, Leningrad’s Kino, Aquarium, and Alisa and Sverdlovsk’s Nautilus Pompilius. These bands, along with many others, quickly became regular guests of late night TV shows, such as Vzglyad, Musical Ring and Program A. Musical Ring was unique for its time and became a trailblazer for modern reality TV in which bands would face off against each other by performing and taking part in questionand-answer sessions in front of a live audience. rbth.asia/48447

ITAR-TASS

Rock music began to flourish when the Soviet Union began to crumble.

MUSIC

© RIA NOVOSTI

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ussian rock music was unleashed during and after the perestroika reforms of former Soviet Union leader Mikhail Gorbachev. However, what many modern musicians may not know is that rock music itself may have played a significant part in giving impetus to perestroika in the first place.

During the early days of perestroika, there was a blurry image of rock songs in the country that were not exactly protest or political by nature. The reform period posed a big challenge for underground rock musicians and not all of them survived the changes.

Perestroika was deemed to have started in 1985 when Gorbachev became general secretary of the Communist Party of the Soviet Union, a reign that lasted about five years.

Soviet rock music was starting to blossom to the extent that some historians consider it among the major factors, along with food shortages, lack of human rights and freedoms, censorship and closed borders, behind the collapse of the Soviet Union.

One Russian website dedicated to rock music says: “According to many music critics, [Soviet rock’s] golden years were the 1980s, especially the era of perestroika, when Soviet underground rock bands could release their records officially and were no longer banned by the media.”

However, the liberation of Russian rock – music in the Russian language – came after a long period of difficult

A TV show called ‘Musical Ring’ was special because musicians took part in a face-to-face competition.

Tuesday, October 29, 2013 15

RUSSIA BEYOND THE HEADLINES GETTY IMAGES/FOTOBANK

AP

Mystery continues Soviet Su-15 interceptor and the Korean Airlines Boeing 747

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n the early hours of the morning, some 30 years ago and at the height of the cold war, Soviet fighters were ordered to scramble and intercept a Boeing 747 passenger jet in the skies above Sakhalin.

A few hours later, on September 1, 1983, Korean Airlines flight 007 was shot down west of Sakhalin Island, in the Sea of Japan, known to Koreans as the East Sea, killing 269 passengers and crew.

Following a lengthy investigation, the International Civil Aviation Organisation found that the 747 had accidentally strayed into Soviet airspace. But it condemned the Soviet Union for shooting down the aircraft.

However, the controversy continues.

The official explanation, which the governments of at least four countries – South Korea, Japan, Russia and the United States – adhere to, said the Korean Airlines Boeing 747 was on a routine flight from New York to Seoul, with a refuelling stop in Anchorage, Alaska.

Its route lay above the Pacific Ocean, skirting Soviet territory. However, right from the take-off in Anchorage the aircraft began to deviate from its course.

By the time it was shot down to the southwest of Sakhalin, the Boeing 747 was some 500km off its intended route.

At 4:51am local time the aircraft entered Soviet airspace above a restricted area in Kamchatka, where a Soviet nuclear missile base was situated.

According to the official explanation, the Soviet air defence mistook the Boeing for a US RC-135 reconnaissance aircraft, which was reportedly monitoring the launch of a Soviet ballistic missile on the same night. On radar screens, an RC-135 looks exactly the same as a passenger Boeing.

MiG-23 fighter jets were scrambled to intercept the Korean aircraft above Kamchatka and accompany it until it left Soviet airspace.

However, at 6:13am, the Boeing crossed the Soviet border again, this time above Sakhalin. Su-15 interceptor aircraft were dispatched to deal with it.

At 6:24am, fighter pilot Gennadi Osipovich launched two missiles that hit the aircraft.

HISTORY The wreckage fell into the sea from an altitude of nine kilometres near the island of Moneron to the southwest of Sakhalin. According to the official report, the incident was a result of a series of coincidences. However, those who were involved in the events on the Soviet side point to numerous inconsistencies, indicating that the Boeing entered Soviet airspace not by accident,

It was a carefully planned operation.

There were no passengers, just the crew and they continue to question the official explanation of what really happened.

The former Soviet military leadership, says the Boeing entered the country’s airspace on a reconnaissance mission aimed at gathering information on radar installations in the Soviet far east.

It should be noted that considerable areas of the Soviet far east were restricted territory. The first question that the Soviets asked was how the aircraft could have deviated so much from its course.

The Boeing 747 was equipped with the most advanced navigation systems of its day, serving as a backup for each other. Furthermore, it is unusual for US

and Japanese air-traffic controllers not to make any attempt to get in touch with the KAL-007 flight to tell the crew that they were off course. The second question is whether there were passengers on board the aircraft. Unlike in other air crashes, a passenger list was not published following the disaster. “The Koreans were supposed to publish the list of passengers. That did not happen.

Who then can claim that there were passengers there?” says test pilot and military expert Aleksandr Shcherbakov.

Only 30 body parts were found at the scene of the crash, despite the fact that there were more than 200 people on board. “I am convinced that they were not there.

They could not have disappeared or dissolved in seawater,” says Anatoly Kornukov, who in 1983 headed the 48th Fighter Aviation Division of the Far East Military District.

Filipp Bobkov, who in 1983 served as a deputy chairman of the former KGB, said it was “a carefully planned operation. There were no passengers, just the crew,” he says. The theory that the flight was a reconnaissance mission, Soviet officials believed, was further strengthened by a seemingly insignificant 40-minute delay that the aircraft had in Anchorage.

The delay in itself is a common enough and does not raise any questions. However, it allowed the aircraft to enter Soviet airspace simultaneously with the US Ferret-D/Farrah satellite.

“Its departure was adjusted to coincide with the approach of a US satellite.

The whole of the air defence system of the Soviet Far East was exposed,” says Vasily Alekseyev, who in 1983 headed the Air Force counterintelligence division at the USSR Defence Ministry.

According to Ivan Tretyak, who in 1983 served as the commander of the Far East Military District, Soviet intelligence intercepted a coded message sent from the Boeing to the satellite saying, “am seeing submarines deep underwater. Visibility good. Am taking pictures”.

AP (2)

Questions still linger about whether Korean Airlines Boeing 747 was indeed a passenger plane, writes Gleb Fedorov (Above) Soviet naval personnel take away parts of the 747’s wreckage. Gennadi Osipovich (left) was ordered to shoot down the Korean Airlines flight.

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16 Tuesday, October 29, 2013

RUSSIA BEYOND THE HEADLINES

Price-cooling measures Government imposes rules to make sure operators keep costs down for visitors, writes Maria Karnaukh

OLYMPICS

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our packages are an established practice for global multisport events, but capitalism will not be allowed to run riot at the Sochi Winter Olympics next year, according to reports.

This year, Prime Minister Dmitry Medvedev signed a draft decree proposing price regulations on certain services at the Winter Olympics and Paralympics. Sochi mayor, Anatoly Pakhomov, had proposed such controls and the idea also received support from Deputy Prime Minister Dmitry Kozak.

One media report said: “The decree states that the government will not set price caps, but instead will mandate that the local administration sign agreements by November 1 with companies that provide such services to prevent unjustified price hikes during the Olympics.”

The only exception for price caps are hotel rooms, with other services such as medical, transport, tourism and personal grooming, catering services and internet access likely to come under strict

supervision with penalties imposed on operators who flout the rules. Under the new rules, a double room at a Sochi mini-hotel (1-2 stars) cannot officially cost more than US$145. A three-star hotel is capped at US$180, four star at US$204 and premium hotels cannot charge more than US$332 a night.

Companies providing services and products at the Sochi games, from February 7 to 23, 2014, must sign an agreement to abide by the rules.

During the Vancouver Winter Games, hotels hiked prices by an average of 30 per cent to 40 per cent, while London hotels tripled their rates ahead of the 2013 Olympics. Beijing hoteliers increased prices by between four and 10 times in 2008.

Meanwhile, tour packages have already been advertised abroad and in Russia. Watching the ice hockey tournament in Sochi will cost round US$14,000 for two, including a fournight stay at a three-star hotel but excluding air fares.

During the Vancouver Olympics,

Dash Tour was selling packages for US$22,100 each, including air tickets from any United States or Canadian city and 18 nights at a four-star hotel – but admission to the competitions was extra. In Beijing, local operators offered an air ticket, hotel accommodation (the number of nights depending on the hotel category), and one admission ticket per day for US$16,000.

Russian citizens are able to buy tickets online on the official 22nd Winter Olympics website, tickets.sochi2014. com. Sales were until the end of summer though, according to information on the website.

The opening ceremony will set you back between US$200 and US$1,500, while the closing ceremony is US$150 to US$1,200. Event tickets cost in the range of US$16 for the mountain cluster and US$30 for the coastal cluster.

Ice hockey is the most expensive event, with tickets to the finals ranging from US$220 to US$1,070.

Figure skating, one of the gala events, will cost US$150 to US$720. According to the organisers, more than 40 per cent of all tickets will be priced below US$100 and about half of them below US$160.

The list of official ticket distributors by country is available at tickets. sochi2014.com. Cosport.com offers tickets to the mountain cluster at reasonable prices: bobsleigh for US$41 and biathlon starting at US$145. The opening ceremony is sold out, and the price for the closing ceremony is US$1,379.

The ticket-price range for the London Olympics was between US$32 and US$3,120. Admission to some open-air events was free and the soccer final went for between US$64 and US$296.

Ticket prices for the Sochi Olympics are not too high.

Cost of admission to previous Games

ITAR-TASS

ITAR-TASS

Ticket prices for the 2012 London Olympics were between US$32 and US$3,120.

Admission to some open-air events was free. The soccer final went for US$64 to US$296. Some 75 per cent of tickets cost less than US$60.

At the 2010 Vancouver Winter Games, tickets started from US$25; the opening ceremony

cost US$175 to US$1,100, and the closing ceremony were between US$175 and US$775. Half of the tickets cost US$100 or less.

In Beijing 2008, the opening (US$650) and the closing (US$390) ceremonies were the most expensive.

Spectators did not have to pay more than US$20 for most others.

Russia invested billions of dollars in infrastructure projects in Sochi for the Winter Games.

WHAT THE SOCHI OLYMPICS MEAN TO RUSSIA Follow our Hot Topic Sochi2014 to stay up-to-date on all the Olympic news!

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