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Economy Western sanctions may stimulate sectors of Russia's economy. P.04-05

Culture Country's largest museum celebrates 250th birthday. P.06

Thursday, October 30, 2014

International Deteriorating relations between the US and Russia have revived the fears of the Cold War era PHOTOXPRESS

A new nuclear arms race?

Russia's TOPOL-M mobile intercontinental ballistic missile (ICBM). Though the Cold War is over, Russia and the US maintain considerable nuclear arsenals as deterrents.

The current breakdown in bilateral relations between the United States and Russia has brought a return to rhetoric and attitudes previously associated with the Cold War. ALEXANDER BRATERSKY SPECIAL TO RBTH

When a group of Russian high schoolers were shown an artificial launching site during an excursion to a Cold War-era bunkerturned-museum in Moscow recently, they were introduced to a simulator that allowed them to make a 'nuclear launch'. Given the option of directing their virtual warheads at any country they liked, the majority of them chose to 'target' the United States. The episode at the museum, reported on a social network by one of the teachers, whose teenage son also participated in the trip, came as a shock to those who consider the idea of nuclear war between the United States and Russia as a forgotten relic of the past, and even more so to the younger gen-

eration, for whom such a notion has never really existed. However, signs of growing mutual distrust are in the air and memories of the Cold War-era nuclear arms race are being reawakened by the current tensions between the US and Russia. “We have not been confronted with the actual use of nuclear weapons in many, many years –since 1945,” said General (Ret.) Eugene Habiger, a former commander in chief of US Strategic Command. “People today, the Millenials as we call them, people born after 1990, really haven’t been concerned about nuclear weapons. It wasn’t on their radar screen, they didn’t go to school hiding under their desks. They have other priorities, other concerns.” However, officials on both sides of the Atlantic seem inclined to put nuclear war onto that list of concerns once again. In July, the United States accused Russia of violating the Intermediate-Range Nuclear Forces Treaty (INF), signed by Soviet President Mikhail Gorbachev and

US President Ronald Reagan in 1987. The treaty lays out “the obligation to neither acquire, produce, nor test ground-based cruise missiles with a range of 500-5,500 km [310-3,420 miles], and not to maintain or build launchers for such missiles.”

In July, the US accused Russia of violating the INF treaty signed by Gorbachev and Reagan in 1987. The US said Russia was violated the agreement by launching a ground-based cruise missile. In response, Russia said that the US itself had violated the treaty by test firing the Ground Based Interceptor, a missile defence system designed to destroy strategic ballistic missiles during the midphase of their trajectory, according to Major General Midykhat Vildanov, a professor at the Academy of Military Sciences.

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In mid-September, US Under Secretary of State for Arms Control and International Security Rose Gottemoeller was in Moscow for a bilateral discussion of the issues of concern relating to the treaty, but although neither side came away satisfied with the outcome of the talks, they have promised to continue the dialogue. Frank Orban III, a US State Department official during the Reagan administration who helped negotiate the INF treaty once called it a "cornerstone of modern US-Soviet/Russian arms control." Additionally, many of the principles and terms of the INF treaty were carried through into the START (Strategic Arms Reduction Treaty) treaty, which makes a possible withdrawal from the INF even more significant. “If there are problems, violations of the INF, the world should be concerned that the START treaty will also soon be violated, thus reigniting the strategic arms race - creating once again a serious confrontational atmosphere between

the United States and Russia,” Orban said.“Violations of the 1987 INF carry far more serious implications than most people recognise.” But while many ordinary Russians may have never heard of the 1987 treaty, the country’s nuclear might still gives them cause for pride – a pride that for this generation is not tainted by concern of a new arms race. At the end of September, a group calling itself “Fashion’s answer to the sanctions is ‘no!’” began distributing a line of T-shirts with slogans such as “You make my Iskanders feel funny”and "The Topol is not afraid of sanctions," references to Russian ballistic missile systems. The group is giving the shirts away to those who give up a T-shirt made by a Western company. In compliance with the terms of the INF, the Soviet Union destroyed 1,752 of its missiles and decommissioned 845 launchers, three production facilities and 69 missile bases, while the United States dismantled 859 medium and

short-range missiles, 283 launchers, seven production facilities and nine missile bases. But there may soon be new weapons to replace these. Deputy Prime Minister Dmitry Rogozin, who is responsible for Russia's military-industrial complex, recently announced that Moscow is accelerating the renewal of its nuclear deterrence capacities. The project is scheduled to be completed by 2020. In early October, a US State Department report showed that for the first time in history, Russia had surpassed the United States in the number of deployed nuclear warheads. General (Ret.) Habiger is not completely opposed to both countries maintaining nuclear weapons. According to him, “The true of value of nuclear weapons is not military or political: It is to deter other nuclear weapons. As long as nuclear weapons are out there, [there] will be some deterrent value in maintaining nuclear weapons stockpiles,” he said.

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Politics&Society

GULF NEWS_THURSDAY_OCTOBER_30_2014

Society Extremists in the North Caucasus may be inspired by events in Syria and Iraq

Education Improving global perceptions

Russian academies fall short in world ratings - but why? A new state programme aims to propel five Russian universities into the QS World University Ranking's top 100 by 2020, but why are Russia’s institutions struggling in rankings?

THE QUOTE

Nikita Mendkovich

Vadim Kozyulin

EXPERT FROM THE RUSSIAN COUNCIL ON INTERNATIONAL AFFAIRS

EXPERT FROM THE PIR CENTRE OF POLITICAL RESEARCH (MOSCOW)

Marginal elements with an extremist orientation use the name ISIS as a well-promoted brand. Although extremists recently hung up an ISIS flag in a town in Uzbekistan, this does not mean that the organisation has penetrated into Central Asia.

Two years ago the Arab world saw the introduction of the same types of bombs that were used in the military campaign in Chechnya. That is, the Arab world and Chechnya have been exchanging technologies for quite a while.

Day," said Goncharov.“It was obviously planned. The suicide bomber could certainly have had links to the ISIS [Islamic State] militants.” Kadyrov had recently responded sharply to aggressive statements from ISIS directed at Russia, saying that he would defend

Kozyulin noted that the exchanges that have been going on between Chechnya and the Arab world concern both technology and people, who are being recruited by ISIS from Central Asia, the Caucasus and Russia: "Islamists are the threat that our region will soon have to confront," he said.

GALIYA IBRAGIMOVA RBTH

A suicide bomber blew himself up by the entrance of a concert hall in Grozny, the capital of Russia’s Republic of Chechnya, on Oct. 5, killing five policemen and wounding 13 members of the public. The concert hall was to host an event celebrating Grozny Day, which coincides with the birthday of Ramzan Kadyrov, the president of Chechnya. The suicide bomber has been named as 19-year-old Apti Mudarov, a resident of the city’s Staropromyslovsky neighbourhood. Mudarov had been missing since leaving home about two months ago, and his family had no idea of his whereabouts. Kadyrov wrote on his Instagram page that the event would not influence the situation in the republic and that the republic is "fully controlled by the law enforcement organs." He also promised to "destroy anyone affiliated with this terrorist act."

The mark of ISIS? Sergei Goncharov, president of the Veteran Association at the Alpha Antiterrorist Unit, told RBTH that he does not consider the timing of the terrorist attack to be coincidence. "The terrorist act coincided with the [Muslim holy] celebration Eid al-Adha, Kadyrov's birthday and Grozny

It is too early to speak definitively about a serious penetration of Russia by radical Islamists. Russia's interests, added Goncharov, who believes that the terrorist attack could have been a response to the Chechen president's statements. Vadim Kozyulin, from the PIR Centre of Political Research, also does not exclude the possibility of a link between the suicide bomber in Chechnya and Islamist militants from the Arab world.

Too early for conclusions However, Nikita Mendkovich, from the Russian Council on International Affairs, said that there is still no direct link between the Chechen terrorist and ISIS, and that speculation on this subject is related to the broad access to information about the activity and ideology of Islamic State militants. According to Mendkovich, the most terrorists from the Caucasus can do is establish contact with ISIS representatives via the internet - therefore it is too early to speak definitively about a serious penetration of Russia by radical Islamists.

Vadim Kozyulin confirmed the fact that modern communication methods help terrorists demonstrate their presence in the region and react to anti-terrorism measures, arguing that Islamist movements are "conducting a PR war.” “In the case of Chechnya it is possible that the motivation behind the terrorist act was to show that the government is weak and Kadyrov is speaking in vain," he said. However, Sergei Markedonov, a political analyst and professor at the Faculty of Foreign Regional Studies and Foreign Policy at the Russian State Humanitarian University, believes that there is still too much speculation about the terrorist act in Chechnya and it is too early to draw conclusions. "We have little information about ISIS activity in the Caucasus,”said Markedonov.“It is still not clear whether the terrorist act in Grozny was some kind of signal for the republic's government or for Russia in general." While Markedonov believes that Chechnya has become more stable in comparison with neighbouring republics, such as Ingushetia, he acknowledged that problems still remain. "By and large, in Kadyrov's stabilisation model many things exist only on the surface, while real problems are kept quiet," he said. "Hushing them up could sooner or later explode into a terrorist act." However, Markedonov considers Sunday’s incident unlikely to be capable of seriously destabilising Chechnya: "It is important to understand that Kadyrov's stabilisation is not the solution to all the problems. Probably, it is only a tactical solution," he said.

A question of quality? The first conclusion that a reader might draw is that Russian edu-

The language barrier The general lack of proficiency in English is also crucial. "Our universities are very poorly represented on the internet, especially in English, so it's very difficult to obtain the information necessary for the rating's evaluation," says Abankina, adding that the language barrier influences the score of academic publications, as in Russia it is customary to publish studies in Russian, excluding those journals from the global databases used for the rating's evaluation.

Irrelevant criteria

What is the QS university ranking? The QS World University Rankings is one of the most authoritative global university ratings in the world. The ranking was developed by the British Quacquarelli Symonds consulting company in 2004. More than 2,500 world universities are evaluated annually. The ranking rates the 500 best universities in the world, as well as universities according to individual disciplines.

The traditionally closed nature of technical universities, a legacy of Soviet times, is also a factor. "The Bauman is a defence-space university, so international ratings can't assess us," says Anatoly Alexandrov, rector of the Bauman Moscow State Technical University (322nd in the QS Ranking). Another problem, says Alexandrov, is cultural differences in interpreting the results of research activity. "In Western culture, being cited is the main criterion for evaluating a university's effectiveness,” he says. "That was never and will never be the case in Russia."

KIRILL LAGUTKO

An explosion rocked the centre of Chechnya's capital Grozny on Sunday, Oct. 5, killing five policemen and wounding 13 other people. Experts do not exclude the possibility that the attack was linked to Islamic State (ISIS).

RBTH

The international QS World University Rankings for 2014 included 21 Russian universities - six more than in 2013. The new Russian universities on this year’s list made it into the rating thanks to the 5-100 Federal Programme of University Support, which aims for five Russian universities to feature in the international rating’s top 100 by 2020. However, none of the Russian universities made it into the prestigious top 100. The best result was obtained by Moscow State University (MGU), which was assigned 114th place in the QS Ranking. So what is impeding Russian universities from hitting the top 100?

Chechnya attack raises fears of ISIS involvement

GLEB FYODOROV

cation is of lower quality than that available in the West. However, Director of the Institute of the Development of Education at Moscow's Higher School of Economics Irina Abankina says the problem is that “the ratings only evaluate our Bachelor courses, and our traditional spetsialitet (Soviet 5-year bachelor course) and aspirantura (Soviet 3-year PhD course) aren't counted.” Most Russian universities switched to the Bachelor-Master's system only in 2011, meaning results are not yet available.

Moscow State University was the highest QS-ranked Russian institute.

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Technology

GULF NEWS_THURSDAY_OCTOBER_30_2014

Techonology New augmented reality service has the potential to breathe new life into the Russian tourism industry

App aims to reconstruct ancient history Piligrim XXI, an augmented reality app, is preparing to launch on the world tourism market. The mobile application allows its users to reconstruct lost landmarks and historical events.

THE QUOTE

Diana Sorina PILIGRIM XXI PROJECT CO-FOUNDER

SOPHIE TEREKHOVA SPECIAL TO RBTH

Our main task was to create a platform that allows you to manage augmented reality objects anywhere in the world with the help of markerless positioning technology."

PRESS PHOTO

Peoples and civilisations that vanished from the face of the Earth long ago can today be seen with the help of state-of-the-art augmented reality services. This year Russia launched its own such technology: the Piligrim XXI app. The app’s creators have managed to reconstruct bygone landmarks and past events by installing virtual three-dimensional models and real landscapes over vast areas that can cover more than 1.5 hectares. According to the project’s cofounder Diana Sorina, the app transports entire architectural ensembles to the present day and allows users not only to see landmarks from the outside, but also to walk around inside them. “Our main task was to create a platform that allows you to manage augmented reality objects anywhere in the world with the help of markerless positioning technology,” Sorina says. The Piligrim XXI service is developing rapidly. Its team plans to launch 15-20 new locations within the next year to help them foster brand recognition among travellers around the world.

The Piligrim XXI creators have managed to reconstruct bygone landmarks and past events by installing virtual three-dimensional models and real landscapes.

In May 2014 the company created the first virtual open-air museum on the ruins of Ludza Castle in Latvia.

Project has potential, say industry experts Alexander Sizintsev, the CEO of one of Russia’s largest tourist service companies, Biletix.ru, thinks

that informative and exclusive travel content is of interest to a very wide audience. “This is a feature that a whole lot of online travel projects are lacking right now,”Sizintsev says. However, he believes that the key question is how to monetise this content, and this is only feasible

if the product is accessible enough to attract users. “A widespread problem is that the majority of ordinary users lack understanding of this brilliant, unconventional technological solution, which in many cases is ahead of its time,” Sizintsev continues. “If the Piligrim XXI creators

manage to tackle these complicated challenges, they will capture the interest of a wide audience, from internet users to investors.” The Microsoft Seed Fund provided a grant to develop the Piligrim XXI programme, and the Seed Investment Fund of the St. Petersburg Administration Eco-

nomic Development Committee also contributed resources. In May 2014 the company created the first virtual open-air museum on the ruins of the Livonian Order castle in Ludza, Latvia, at the request of the Latgale Region Development Agency. Now there are plans to create a network of virtual augmented reality parks in Russian regions and in Europe. However, according to Diana Sorina, the search for financing on the Russian market is fraught with problems. “Countless architectural landmarks were destroyed in Russia during tragic historical events,” Sorina says. “All of this wealth could restore and breathe new life into domestic tourism infrastructure.”She thinks that it is especially important for regions that were damaged and rebuilt after World War II. “But it’s very difficult to get investors interested in this idea in Russia,” Sorina continues. “As it turns out, it was easier to get financing to reconstruct the Ludza Castle in Latvia.”

Energy New 3D modelling technology is saving Russia's state nuclear power corporation time and money

Nuclear power plant construction now begins in virtual space Russia is embracing innovative technology to streamline the construction of its nuclear plants. Multi-D, a 3D modelling system that allows the entire process to be optimised, factoring in costs and workflow. MARK COOPER

PRESS PHOTO

The construction of large industrial facilities, such as nuclear power plants, requires special knowledge and skills. A nuclear power plant is also a very expensive facility, making innovations that reduce the cost and time of launch ever more important. Russia's state nuclear corporation Rosatom is now constructing power plants using Multi-D, an innovative control system for the construction of large industrial facilities. This technology is based on three-dimensional numerical modelling and turns the construction site into something akin to a futuristic spacecraft, where engineers walk about with electronic tablets and use three-dimensional models to control complex processes in real-time. Multi-D technology allows engineers, based on a 3D model of the facility, to carry out detailed modelling of construction and installation, to optimise aspects of nuclear power plant construction at the pre-production stage, to play out different scenarios of using resources, and, if necessary, to make changes to the 3D model for its optimisation. The Multi-D model consists of a spatial, sophisticated model of the facility, including drawings and three-dimensional

PHOTOSHOT/VOSTOCK-PHOTO

SPECIAL TO RBTH

Russia's state nuclear corporation Rosatom is now constructing power plants using Multi-D, an innovative control system for the construction of large industrial facilities.

The Multi-D model consists of a spatial, sophisticated model of the facility, including 3D visualisation.

visualisation, a workflow schedule based on production norms the physical volumes for which information is contained in the specifications - and the cost of the facility’s construction.

How Multi-D works First, a flow chart that displays the equipment and machinery is created in the specialised programme. Next, the main work takes place in a three-dimensional design environment. After creating a three-dimensional model of the premises and equipment, a layout is generated for the production equipment at these facilities. The engineers ar-

range equipment strictly within the allocated space and, together with layout specialists, create a single correct sequence for equipment installation. As a result, a workflow schedule is created. Given that in the Multi-D model the schedule is associated with a three-dimensional model, one more practical application is the creation of jobs for contractors for an entire week or just a day. This task is a snapshot of the 3D model of the site, with highlighted colour for the specific process component to be installed and the work list, which contains the specification of the specified process component, the contractor’s spe-

ciality, and the number of required contractors on the site. With the help of Multi-D technology it is possible to generate such tasks automatically. The Multi-D technology was invented and brought to life by Russia's NIAEP-ASE engineering company, which accounts for about 30 per cent of the world market for building nuclear power plants. “It would not be difficult for us to use our Multi-D even in the development of space projects, as well as in aircraft development,” said NIAEP-ASE’s head of marketing for Multi-D, Alex Sachik. According to Sachik, Multi-D uses commercial solutions from lead-

ing vendors, including Intergraph and Dassault. Multi-D has already proven itself at real construction sites. For example, a project for the creation of a third unit at the Rostov nuclear power plant used all MultiD’s technological innovations. Thanks to Multi-D’s structure, this block is planned to be completed several months ahead of schedule, saving 7 per cent of the allotted construction time and millions of dollars. Today, thanks to Multi-D, Rosatom is actually the only company in the world that can guarantee compliance with the terms of nuclear plant construction.

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Economy

GULF NEWS_THURSDAY_OCTOBER_30_2014

TRENDS WILL THE CONFRONTATION WITH THE WEST OVER UKRAINE BRING RECESSION OR INCREASE COMPETITIVENESS ?

MOSCOW COMES TO TERMS WITH SANCTIONS Although Russian leaders hope that sanctions will jump-start domestic industries, economists warn of a lack of accessible credit and fear that the likely result will be recession.

edges: the capacious domestic market,” Putin explained, adding that it needs to be filled with quality goods made by the real sector while maintaining the economy’s stability and equilibrium.

ALEXEI LOSSAN

Mission impossible?

RBTH

Experts reacted to the president’s words with caution, warning that there are many problems that must be overcome before Russian companies can produce, as Putin said, “a sufficient quantity of production that will not be inferior to foreign production in price and quality.” One problem is having the money to fuel development.“Talk of accessible credit has been around in Russia since the fall of the Soviet Union, but enterprises have still not received it,” says Anton Soroko, an analyst at Finam Investment Holding. Restrictions on foreign sources of credit as a result of economic sanctions are also unlikely to help improve the situation. Vladimir Osakovsky, chief economist on Russia and the Commonwealth of Independent States at Bank of America Merrill Lynch, is also doubtful about the ability of the Russian economy to show substantial growth in the near future. “We expect that the macroeconomic situation in Russia will worsen as a result of the accelerating inflation caused by the restrictions on food imports, the fall of consumption and the volume of investment, as well as the reduction of exports,” Osakovsky said in the business publication RBC Daily. The sanctions that Russia has implemented have already led to an increase in inflation within the country. According to a new forecast by Osakovsky, in the second half of 2014 and the first half of 2015 Russia will sink into a recession, which will be followed by a recovery generated mainly by the base effect. Alexei Kozlov, chief analyst at the UFS investment company, has a different opinion, however.“The proposal to accelerate the development of the Russian economy that we heard during the State Council session is completely realistic,” he said.

In response to the sanctions imposed by the United States and the European Union on Russia over its actions in Ukraine, for the first time in Russia’s post-Soviet history, the Russian government initiated its own restrictive measures. While the sanctions that Western countries implemented were aimed at limiting exports, Russia’s aim was to restrict imports. On Aug. 7 the Kremlin introduced a complete ban on beef, pork, poultry, fish and shellfish, milk and dairy products, nuts and fruits and vegetables from Australia, Canada, the EU, the US and Norway for one year. The list was later amended to allow lactosefree milk, young salmon, trout, seed potatoes, onions, hybrid sweet corn and nutritional supplements. According to Ruslan Grinberg, the director of the Institute for International Economic and Political Studies at the Russian Academy of Sciences, Russia did not select these items at random. “In the European Union, agriculture is a subsidised segment of the economy, which usually develops thanks to active support from the government,” said Grinberg. “Thus, the Russian government is trying to influence European politics from within.” According to this theory, Europe’s supply of food products will increase and cause deflation, therefore damaging the European economy. The consequences of these retaliatory sanctions, however, have the potential to be much more serious for Russia’s economy. According to official records, Russia imports about $40 billion worth of agricultural products annually. Approximately 20 per cent of all imports and 10 per cent of all goods on the market have been affected by the sanctions. During a session of Russia’s State Council on Sept. 18, PresidentVladimir Putin suggested that the sanctions could be turned to Russia’s advantage by increasing the competitiveness of the Russian economy, focusing on gross domestic and gross national product, consumption, savings, and capital formation, or the real sector. "In the next one-and-a-half to two years, it is necessary to take a real leap in the improvement of the real sector’s competitiveness,” said Putin, adding that in the past, such actions would have taken years to implement. According to Putin, the efforts of all federal and regional government departments must be oriented towards developing the real sector. In particular, progess must be made on improving access to credit and creating new competitive conditions for financing business expansion. “We need to use one of the country’s most important competitive

The sanctions that Russia has implemented have already led to an increase in inflation within the country. According to Kozlov, such high goals are necessary to enact radical changes in the way the Russian economy functions. “On the whole, Russia has been voicing its aim to reduce its raw material dependence for a long time,” he said. “In light of the recent events, this goal has been expanded and is now attainable.”

The market’s reaction Indeed, despite the sanctions, Russian industrial enterprises are showing positive economic signs. According to data collected in September by the Gaidar Institute of

THE QUOTE

Vladimir Osakovsky CHIEF ECONOMIST ON RUSSIA AND THE CIS AT BANK OF AMERICA MERRILL LYNCH

We expect that the macroeconomic situation in Russia will worsen as a result of the accelerating inflation caused by the restrictions on food imports, the fall of consumption and the volume of investment, as well as the reduction of exports."

Alexei Kozlov CHIEF ANALYST, UFS INVESTMENT COMPANY

On the whole, Russia has been voicing its aim to reduce its raw material dependence for a long time. In light of the recent events, this goal has been expanded and is now attainable."

NUMBERS

$40 bln

Economic Policy, short-term investment expectations in the industrial sector are still high, on par with those of 2012. In addition, the institute’s“industrial optimism index” came close to a three-year maximum in September 2014. Between January and July 2014,

The amount of money spent annually by Russia on agricultural imports.

A few industrial sectors are seeing growth, one of which is the production of vessels, aircraft, and spacecraft.

Countries hit by Russia's food embargo

1.5

The growth in Russia's industrial production in the first six months of 2014 compared with the same period in 2013.

the production of consumer goods grew by 3.3 per cent, passenger cars by 5.7 per cent and cargo vehicles by 12.7 per cent. Textile and clothing manufacturing increased by 6 per cent, and the production of electronic telecommunication components by 17.6 per cent. In the first half of the year, the

growth of industrial production was 1.5 per cent compared with the same period in 2013, while G.D.P. grew by 0.8 per cent. According to a study carried out by the Higher School of Economics, the last time this happened was in 2010-2011. However, it is important to note that today, this growth is entirely the result of orders from the state. At the moment, according to experts, only a few industrial sectors are experiencing growth. One is the production of vessels, aircraft, spacecraft and other forms of transport. This segment also includes the production of railway carriages, aeroplanes, helicopters and submarines — a substantial amount of which are purchased by the government and by state companies. Production in this sector has been growing since the middle of 2013, and in 2014 it increased dramatically. While at the end of 2013, this subsector’s contribution was only 0.1 per cent of the growth of industrial production (out of 0.4 per cent growth), in the period between January and August 2014, it was already 0.7 per cent out of 1.3 per cent. Russia’s metallurgical industry has also experienced growth. The sector has received an additional share of the domestic market because of the ban on supplies from Ukraine. But the demand for increased metallurgical production is also related to construction on the South Stream and Power of Siberia energy pipelines.

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Economy

GULF NEWS_THURSDAY_OCTOBER_30_2014

INTERVIEW ALEXEI ULYUKAYEV

Russia is not fencing itself off from the world

What changes has the Russian economy recently undergone, particularly as a result of the international sanctions? We are observing a dual impact of the sanctions on the Russian economy. On the one hand, there is the inevitable decline in growth rates, higher inflation, ruble volatility, and reduced liquidity. On the other hand, these same new realities are capable of helping overcome the structural imbalances that have long been inherent in the Russian economy. I am first and foremost talking about the excessive pegging to fuel and commodity exports, as well as the orientation towards imports of a wide set of goods – both producer and consumer demand. The Russian economy possesses a sufficient reserve of durability, which allows it to ensure future growth. In the World Economic Forum’s Global Competitiveness 2014-2015 report, Russia rose by 11 places to 53rd (64th last year) out of 144.

GETTY IMAGES/FOTOBANK

Markets Cheap Brent and boost in OPEC production leave Russia's economy exposed

Record fall in oil prices places Russian budget under threat Brent oil has tumbled to $92.2 a barrel, putting Russia's federal budget at risk. Russian analysts say the fall in oil prices is due to a strong dollar and a sharp hike in oil production around the world. ALEXEI LOSSAN RBTH

The record slump in oil prices is threatening the Russian federal budget: During trading on Oct. 2 the price of Brent oil dropped to $92.2 a barrel, marking the biggest fall since the 2008 crisis, when oil sold as cheaply as $38.4 a barrel. The price of Brent has fallen by 19.9 per cent since June 2014. "The abundance of oil on the market due to the increase in production in the US and weak global consumption are driving prices down in the current year, which is obviously raising concern in Russia," says Ivan Kapitonov, deputy director of the Faculty of Governmental Regulation of the Economy at the Russian Academy of Sciences.

Negative influence The decrease in oil prices negatively reflects on the Russian federal budget, since its profit percentage is linked to oil prices. According to the Ministry of Finance, the budget will be balanced

only if oil prices reach the level of $96 a barrel of Brent. “It can confidently be said that the average oil price in 2014 will allow the Russian budget to be deficit-free," says Alexei Kozlov, chief analyst at UFS IC. "Moreover, we do not expect the cost of black gold to decrease this year below the minimal price fixed on Sept. 2,” he said. However, according to an alternative study by Citigroup, in order for the Russian budget to be balanced in 2014, Russia needs a price of $105, Iran needs $130, and Saudi Arabia and Qatar $89 and $71, respectively. Kozlov notes that the market is dependent on the agreement between the P5+1 (a group comprised of the five permanent members of the UN Security Council – the U.S., Russia, China, the UK and France – plus Germany) and Tehran on Iran's nuclear programme. "We cannot exclude the factor of oil price manipulation and the artificial increase of supply with the aim of pressuring Russia," he says. However, in Kapitonov's view, in order to achieve this, Russia's potential enemies would have to make an arrangement with all the OPEC countries – which, fearing a further price decrease, have al-

ready begun reducing production volumes.

THE NUMBERS

Finding a solution Currently, as Kapitonov says, OPEC's oil production structures are undergoing important changes, which reveal the discomfort caused by the existing price levels. Saudi Arabia has reduced production volumes and plans on returning prices to the threshold of $100 a barrel. In Sept. 2014 the OPEC countries produced a two-year maximum of 30.96 million barrels a day. "With further decreases, below $90 a barrel, OPEC members may express the need to reduce the quotas within the whole bloc," notes Kapitonov, who adds that the next OPEC session will take place on Nov. 27 in Vienna, but in the case of further negative events in the market, an earlier session may be organised. According to Anton Soroko, an analyst at investment holding Finam, the strengthening of the US dollar is playing against oil prices. The US Federal Reserve System is concluding its programme of quantitative easing and in 2015 it plans to increase rates, while the European Central Bank has only just announced its quantitative easing programme.

19.9 The percentage by which the price of Brent crude has fallen since June 2014.

$105 The price required for a barrel of Brent oil in order for Russia to be able to balance its federal budget.

THE QUOTE

Ivan Kapitonov DEPUTY DIRECTOR , FACULTY OF GOVERNMENTAL REGULATION, RUSSIAN ACADEMY OF SCIENCES

The abundance of oil on the market due to the increase in production in the US and weak global consumption are driving prices down in the current year, which is obviously raising concern in Russia."

In that case, how fast will the Russian economy be able to overcome the crisis period? Our economic development forecasts are based on the premise of relative stabilisation and a lack of more serious sanctions. Capital outflow may decrease substantially by 2017. The GDP dynamic is expected to rise to 1.2 per cent in 2015, versus 0.5 per cent in 2014. Faster GDP growth will primarily be connected with the investment dynamic, which will grow by 2 per cent in 2015, versus a 2.4 per cent decrease in 2014. We are continuing to work on improving the investment climate so that businesses feel comfortable and safe in all respects. Russia is not fencing itself off from the outside world and is not breaking business ties. How can Russia solve the structural economicproblemsyoumentioned? Russia has entered a period of new economic conditions, and the government needs to tighten its belt. The situation with the budget is compounded by the fact that the country’s revenues will continue to decline relative to previous periods in the long term, which will prevent Russia from counting on any significant shifts in the government’s economic and budget policy. At the same time, the present moment seems the best to make the most effective investments in the country’s development. With Russia’s introduction of tit-for-tat sanctions on imports from the US, Canada, Norway, and the EU, we have a unique opportunity to develop the most crucial industries, such as agriculture and food processing. In your opinion, which Russian regions might be attractive to foreign investors? The dynamic development of Siberia and the Far East is a national priority, and a decision has been made to introduce profit tax breaks for new investment projects being implemented in this region. The next step will be to spread them throughout the entirety of Eastern Siberia, including the Krasnoyarsk Territory and the Republic of Khakassia. Besides that, right now the possibility of creating so-

In an exclusive interview, Russian Minister of Economic Development Alexei Ulyukayev spoke with RBTH about how Russia can attract foreign investment in a difficult political climate.

Russian Minister of Economic Development Alexei Ulyukayev.

called 'priority development territories' in the Far East and Eastern Siberia is being considered, with special conditions for launching non-extractive production facilities oriented towards exports. Five-year 'holidays' are being provided on profit tax, mineral extraction tax (with the exception of oil and gas), and land and property taxes, and discounted insurance premiums are being given to new companies located in the priority development territories. We plan to create positive business conditions in these territories that can compete with the key business centres in the Asia-Pacific region, including procedures for securing construction permits, connecting to power grids, and going through customs. In your opinion, in what way is Russia currently attractive to foreign investors? Our advantages lie in the high return on energy projects, as well as projects associated with natural resources. Not only oil and gas, but also metals and timber attract foreign investors. Unfortunately, we are still seeing only individual examples of the creation of enterprises that produce high valueadded products. In my opinion, there is major potential in that field for cooperation with South Korean companies. Russia is objectively interested not only in attracting financial capital, but also in new technology, knowhow, and best management practices that would allow it to bring entrepreneurial activity to a new level of efficiency. In order to reduce the country’s dependence on commodity exports and high-tech imports, and to increase the share of high value-added products, Russia needs to attract investment into modernising industry, the service sphere, and agriculture. Several major foreign corporations, such as Volkswagen, Siemens, and Samsung, have already entered Russia. Is Russia planning to raise the level of localisation of their production? This applies to all foreign industrial enterprises with assembly operations in Russia. Industrial clusters and parks are an effective tool to raise the level of production localisation. Many Russian regions have created or are creating such production agglomerates. The auto industry is definitely the leader. The Kaluga, Kaliningrad and Leningrad regions already have fullyfledged auto assembly clusters for the leading global companies. The next logical step is to deploy enterprises that produce components in the regions. Interview conducted by Viktor Kuzmin

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Culture&Travel

GULF NEWS_THURSDAY_OCTOBER_30_2014

Museums State Hermitage Museum celebrates its 250th birthday with the acquisition of a new wing for its modern art collection

Two and a half centuries on, future is bright for Hermitage DMITRY ROMENDIK, ILYA KROL, GEORGY MANAYEV RBTH

In 2014 the Russian State Hermitage Museum in St. Petersburg was elected the best museum in Europe by users of the world's largest tourism website TripAdvisor, leaving behind the Florentine Academy of Fine Arts and the Musée d'Orsay in Paris. For its 250th birthday the Hermitage is witnessing its own revival. In fact, the last time it grew and developed so fast was at the time of its foundation by Catherine the Great. The empress first established the Hermitage collection in 1764, having bought 225 paintings from a Berlin merchant - a collection that included Dutch, Flemish and Italian masters. Today the museum's depositories still contain 96 works from the original collection, which in the beginning was housed in the palace's secluded apartments. Hence the name of the museum: ‘hermitage’ means seclusion. But today the Hermitage is no longer a private collection hidden in several rooms. Like all museums with a world-famous name, it also has branches abroad.

For the city and for the world The Hermitage first entered the world stage in 2000, opening a branch in London's Somerset

House and another one in LasVegas a year later (the two branches closed in 2007 and 2008, respectively). Other affiliates were established in Amsterdam and Venice. But the main change in the museum's life in the last decades occurred in its native city, St. Petersburg: The Hermitage came into possession of the General Staff Building, which stands on the other side of Palace Square and which

The museum's objective for the future is to make its global experience accessible without trying to cash in on the brand.

FACTS ABOUT THE HERMITAGE MUSEUM

More than 3 million exhibits, including medieval relics, masterpieces from antiquity, Oriental art and Slavic art . More than 600,000 art exhibits from Western Europe.

The complex combines a total of seven buildings: the Winter Palace, the Old Hermitage, the Small Hermitage, the New Hermitage, the Theatre, the Hermitage Palace's Reserve House, and the Hermitage's garage.

The museum's staff includes over 2,500 people, plus dozens of cats that protect the exhibits from mice and rats.

until then had never served as a museum. Ever since 1829, when the General Staff Building was erected, its parquet had been abraded not by the shoes of art lovers but by military boots. In 2013 a large-scale project helped reconstruct the eastern wing of the building, which now houses the modern art collection. Thus, the museum, which always had a conservative exhibition policy and earlier only occasionally exhibited modern artistic trends, has finally obtained an entire wing dedicated to this kind of art. Important exhibitions now take place in the Hermitage's new premises every year. In 2012 the building hosted Jake and Dinos Chapman's exhibition "The End of Fun" in which the British artists expressed their opinion of the Third Reich in iconoclastic fashion. Last year the General Staff Building presented the Contemporary Art of Japan Exhibition, in which the main attraction was Motoi Yamamoto's extensive Salt Labyrinth installation. This year the Hermitage welcomed the Manifesta European Biennale of Contemporary Art (now extended to October 31). "Never has an exhibition of such level and significance been presented in Russia," says Hermitage Director Mikhail Piotrovsky. "Until now we have organised our own exhibitions, some good, some not so good. But now an exhibition has arrived that was created in Europe and for Europe. It has left the confines of the European Union for the first time.” For art historian Natalya Semyonova, one of the Hermitage's unique traits is the accessibility

GORKY PARK An autumn selfie or just a pretty picture on Instagram is guaranteed for all visitors to Gorky Park. The park offers free access to Wi-Fi along with stands for charging laptops and mobile phones. In Gorky Park visitors can find a wide variety of backgrounds for photographs – one of them being the park’s symbol, the legendary “Girl with an Oar” sculpture. And with a little luck, it’s also possible to get that perfect shot of falling leaves dancing right on the bank of the Moscow River. Walking and cycling paths connect Gorky Park with Sparrow Hills, where visitors can enjoy the autumn colours from the high banks of the river or on a funicular.

THE BOTANICAL GARDEN The pearl of the Botanical Garden is the Japanese garden, arranged according to traditions of Japanese landscape art. The best place in Moscow for solitary contemplation of the harmony of nature, it also creates the ideal opportunity to practise Momijigari, the traditional Japanese custom of admiring maples. The autumn colours of the Manchurian maples, gingkoes, spindles and chestnuts create beautiful reflections in the garden's ponds and create a gorgeous overall view. In the centre of the garden is a stone pagoda that symbolises a Buddhist temple. Tea ceremonies occasionally take place in the tea house here.

KOLOMENSKOYE The old Dyakovo, Kazansky and Ascension apple orchards are symbols of Kolomenskoye. These orchards, located in the highest part of the park, provide the single most wonderful view of the Moscow River in the whole city. Here, visitors can almost taste the scent of apples and the sweet smell of ageing foliage. Few places in the city are quieter, lovelier and more pleasant than these apple orchards. Take a blanket and a picnic basket and spend the whole day in a completely different world! Kolomenskoye also offers another way to enjoy the autumnal view of the capital: Use the free panoramic binoculars at Ascension Square.

visitors annually

LORI/LEGION MEDIA

One of the richest museums in the world, St. Petersburg’s State Hermitage Museum celebrates its 250th birthday this year. RBTH reports on the museum’s recent expansion and its future plans.

2.5 million

The Hermitage's location in the former home of the tsars distinguishes it from other important museums.

Hermitage apps show the way forward St. Petersburg’s State Hermitage Museum is leading the way into the 21st century for Russia’s museums with the release of two smartphone applications in Russian and English. Hermitage Museum and AudioGuide to the Hermitage, as the new mobile apps are called, will allow visitors to properly tour the Hermitage without a guide. In addition, the apps should prevent patrons from getting lost — no mean feat in a museum with over 3 million items on display. The Hermitage Museum app provides the user with the museum’s latest news and exhibition an-

nouncements, and allows them to build a personal catalogue of their favorite artworks and museum pieces by saving digitised copies. Additional content such as educational lectures, themed excursions, and virtual tours can be downloaded free of charge or purchased using the Store section of the app. The second app, Audio Guide to the Hermitage, has been developed specifically for the iPhone, and can just about replace a live tour guide, as the collection of interactive tours is comprehensive. The only thing that may be lacking is personal contact with your guide.

of its exhibits, even those that are not on public display: "No museum in Russia, except for the Hermitage, has an open storeroom, which provides access to an enormous quantity of exhibits never seen by the public," she says, referring to the Hermitage's storeroom in Staraya Derevnya, in the outskirts of the city, which it is possible to visit by arrangement. According to American journalist and Russian culture scholar John Varoli, who lived in Russia for 13 years, the Hermitage’s location in the Winter Palace, once home to the tsars that ruled im-

perial Russia, distinguishes it from other important museums: "For example, the Louvre has a more interesting collection, but its building seems austere and unattractive, whereas the Winter Palace, a magnificent and at the same time cosy imperial residence, mesmerises the visitor with its interior,” says Varoli. “Sometimes the interior is more captivating for foreigners than the collection itself, which is definitely one of the best in the world."

MOSCOW TODAY IS ONE OF THE GREENEST MEGACITIES IN THE WORLD, WITH MORE THAN 50 PLACES WHERE VISITORS CAN ESCAPE THE CITY TO ENJOY THE COLOURS OF THE AUTUMN.. IF YOU HAPPEN TO BE IN THE RUSSIAN CAPITAL IN OCTOBER, HERE ARE SOME OF THE MOST BEAUTIFUL SPOTS.

A VISITOR’S GUIDE TO THE BEST PLACES TO EXPERIENCE MOSCOW PL IN THE AUTUMN

New age The Hermitage will celebrate its

250th birthday on the traditional date of December 7. "We will open everything," promises Piotrovsky. "The eastern wing of the General Staff Building, the new building in Staraya Derevnya, the building of the Small Hermitage, the Auxiliary House next to the Hermitage Theatre. We have lots of plans, but the upcoming plans include exhibitions such as ‘Archaeology in the Hermitage’, ‘New Acquisitions’, ‘Restoration in the Hermitage’, as well as exhibitions on window displays and the history of design." But the Hermitage's main objective for the future is to conserve the museum as a storehouse of global experience and to make this experience accessible, without necessarily striving to cash in on the brand. "Everyone always tries to understand the criteria for a museum's success and often they understand them in the manner of the accountant," Piotrovsky concludes. "But actually the criteria for a museum's success are its ability to have the visitors participate in it, to include the people who live in the museum's city and country, to have the visitors become a part of its life. "A large museum such as the Hermitage is a very democratic cultural institution; it accommodates many people, it shocks and it has things for the most different kinds of people."

IZMAILOVSKY PARK This park is the best place for autumn hiking within the city. Izmailovsky Park, unlike many of Moscow’s parks and estates, is not formally landscaped, which gives it the natural appearance of a real forest, complete with tree branches and old stumps covered in moss. Park-goers can feel the crackle of fallen leaves under their feet as they walk and pause to gather beautiful bouquets of autumn foliage. The Izmailovsky Park grounds cover more than 700 acres, so it is best to rent a bicycle if you want to see the whole property. In order to see it all in one glance, you can take a ride on the park's Ferris wheel.

TSARITSYNO Tsaritsyno is the only English-style landscaped park in Moscow. This park kingdom has a rare and wonderful colour spectrum, combining red brick with white stone ornamentation for vivid contrast. Pseudo-Gothic palaces, pavilions, arches, and lacework bridges effectively set the stage for magnificent autumn vistas. The cascade of ponds acts as a mirror, doubling the surrounding beauty. In autumn, it gets dark early, and a lovely time can be had at Tsaritsyno sitting with friends and watching the musical fountain late into the evening on Horseshoe Island in Tsaritsyno Pond.

KUSKOVO ESTATE The French formal garden decorated with original marble sculptures of mythological characters, as well as a preserved summer palace with authentic interiors and porcelain collections, make this estate a worthwhile place to visit. There is no better spot in Moscow for admiring the vibrant colours and shapes of the autumn landscape. It is a treat to escape to this beautiful location at the weekend, especially in the early autumn, when the trees and shrubs on the site are painted in all of nature's brightest colours.

T R AV E L 2 M O S C O W. C O M

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Opinion

GULF NEWS_THURSDAY_OCTOBER_30_2014

GAZPROM-CHINA DEAL CAN STABILISE GAS MARKETS Alexander Kurdin ANALYST

NATALIA MIKHAYLENKO

espite how well gas markets function in Europe and the United States, the world is far from forming a unified gas market. Sustained price imbalances among key consumers — countries in Europe, North America and the Asia-Pacific region — are evidence of the great potential that a united gas market would offer for more efficient supplies of gas worldwide. However, gas prices have yet to show any signs of converging. At the end of the summer, the price of natural gas at the United States' Henry Hub in Louisiana cost approximately $150 per 1,000 cubic metres (some 35,000 cubic feet), while on European wholesale markets it ranged between $250 and $400, depending on the type of contract. Meanwhile, liquefied natural gas (LNG) has been selling for $600-$700 per 1,000 cubic metre in Japan since the Fukushima disaster. Persistently diverging gas prices over the past four years indicate a paradoxical deglobalisation of gas markets. Initially, this happened because of limited progress on the LNG market. This market has stagnated in recent years, in part because of insufficiently developed infrastructure. For traditional gas supplies, the markets are hamstrung by a lack of a pipeline connection between Europe and Asia. Russia is now working on the construction of a pipeline to China, the Power of Siberia, but there are no plans for a pipeline that would stretch all the way from Europe to Asia. Outside of Rus-

Gas market globalisation will help create a position for natural gas in the global energy market as a whole. sia, Turkmenistan, which has the world’s sixth-largest natural gas reserves, theoretically has the capability of exporting gas to both China and Europe, but its exports are currently dominated by China. Turkmenistan’s gas supplies to Europe are limited because of insufficient production and infrastructural problems in the country itself. Divided regional markets may

benefit individual producers or consumers in the short term, given that they allow these producers or consumers to secure a dominant position in a particular local market.Yet divided regional markets create additional risks and losses for the gas industry as a whole, especially to the players who do not have the ability to switch to other markets in case they are shut out of one. Large-scale gas supplies to China, such as those covered by Gazprom’s recent $400 billion, 30year contract with the Chinese National Petroleum Company, will make it possible to partially overcome this situation and to usher in strong new links between Eu-

ropean and Asian markets. This contract, which was signed during a visit by Russian President Vladimir Putin in May, opens up possibilities and gives impetus to expand gas transport infrastructure and gas production in Russia’s eastern regions. Such a move would not only entail building pipelines, but also developing new fields and, in the future, new LNG terminals. An increase in LNG exports from North America to Europe and Asia will have a similar impact on the global gas industry. These moves toward gas market globalisation will help create a position for natural gas in the global energy market as a whole, amid the gradual development of

new energy sources – particularly renewable ones. Obviously, the main beneficiaries of the Gazprom-China contract are the contracting parties themselves. Gazprom will secure access to the rapidly growing Chinese gas market, which currently needs some 50 billion cubic metres of gas a year, but will need 150 billion cubic metres by 2020 and probably more than 200 billion cubic metres after 2030. In return, China will be able to take advantage of Russia’s vast reserves — the largest and geographically closest of their kind to China. As a result of the arrangement, both Gazprom and China can now intensify competition among their partners on the gas markets. The contract allows both the supplier and the consumer to substitute supplies and, as a result, both have greater room to manoeuvre at the negotiating table.The arrangement means that Gazprom can strengthen its negotiating position with European consumers, although it is important to note that the deal with China comes at the same time that other countries are boosting their LNG imports to Europe. Russian export volumes to the east will not match volumes to Europe until at least 2020, so Gazprom is not at a serious advantage at the moment.Yet in the long term, Europe, Russia and China will all benefit from the development of gas production and the gas transport system in Russia as a result of tighter market connectivity. Thanks to Gazprom’s new contract, Russia will ramp up its gas production capacity and, in the future, will have the option of shifting among exports to the East, the West and internally. This arrangement will help Russia avoid gas shortages or oversupplies on individual markets and will ease price fluctuations for many players in the market. Alexander Kurdin is director of the Strategic Energy Research Office at the Analytical Centre for the Government of the Russian Federation.

A LOOK BACK AND A LOOK AHEAD TO THE NEW CHALLENGES FACING MOSCOW DOWNLOAD TODAY! $5.99 ON

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WHY STUDY RUSSIAN? IT’S NOT ALL POLITICS Ivan Savvine HISTORIAN

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opportunities began opening up, and I moved into my friend’s apartment building in a Russian neighbourhood, just as our friendship began to become romantic....” “Last year I was thinking over what new journalism skills to pick

up, what would be interesting to me and also potentially open doors to new kinds of assignments. At the same time, I was researching some story ideas involving the Arctic, climate change and resource development. I realised there was

NATALIA MIKHAYLENKO

teach Russian at NewYork’s Fluent City – a fun hip language school with campuses in Williamsburg (Brooklyn) and Midtown Manhattan. Our Russian programme's still a baby, but in a year and half of its existence, it has evolved into a steady schedule of evening classes for adults from elementary to advanced levels. Each class I’ve taught at Fluent City is a living epitome of New York: my students’ backgrounds, their experiences and their objectives are as diverse as the city we call home. What unites them is a staunch determination to conquer the mazes of Russian declensions and conjugations, to unlock the verbs of motion, and get those numerals in order despite the rules that follow no known logic. Teaching Russian at a time when major media outlets are happily

predicting a new Cold War, if not World War III, is both a curious and an enlightening endeavour. Why are my students studying Russian, right here, in New York, and right now, in 2014, in the context of heated animosity between the governments of the Russian Federation and the United States? I asked them. Here are some of their responses: “As a Foreign Language teacher [of Spanish and French], I always wanted to speak a non-romance language. Once I retired, one of the first things I did was to enrol in a Russian class. Now I can communicate with my neighbours and shop in the local stores!” “I have Russian relatives on my father’s side, but I never learned to speak Russian with them. Then three years ago, I met an extraordinary Russian woman. I started to learn Russian, then one of my jobs decided also to cater to Russian people, and asked more staff to learn Russian. Other business

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next to no coverage of contemporary Russian science and environmental issues in the American press – and here I was with seven or eight years of Russian language study floating around somewhere in my brain. My hope is that having some skills in a second language will give me a professional edge.” To put these motivations into perspective, I spoke to Kevin Moss of Middlebury College in Vermont who has taught Russian there since 1983:“Enrolments were very high in the 1980s and early 1990s, and then dropped when Russia was no longer the Evil Empire. Another drop came after 9/11, when attention and the federal money shifted to Arabic. Historically, things like the 1991 coup and the war with Georgia have helped, especially if they come in August, right before the students arrive. I suspect Sochi and the Ukraine / Crimea crisis will give us another spike this fall, as it’s clear the US

defunding of Russian expertise was premature.” Congress eliminated funding for the State Department’s Title VIII program, which provided grants for the study of Russia and the former Soviet bloc, last October. Nevertheless, the Russian language remains a key player on the world’s linguistic map: an estimated 255 to 285 million people speak it and it is one of the official tongues of the United Nations. While it is true that today’s geopolitical scene will keep the demand for certain linguistic skills fluctuating, I have come to believe from my own experience that certain aspects of the Russian culture, and in particular the language that continues to form it, will remain in constant demand among the truly open-minded and intellectually astute. Ivan Savvine is an art historian and writer as well as a teacher. He was raised in St. Petersburg.

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Feature

GULF NEWS_THURSDAY_OCTOBER_30_2014

Sport Participants and spectators hail success of Russia's first Grand Prix

Formula One debut sets Sochi’s Olympic Park alight PRESS PHOTO

The Black Sea resort of Sochi hosted Russia’s first ever Formula One Grand Prix on Oct. 12. The debut was a success, with drivers, journalists and the public lining up to congratulate the organizers. ILYA ZUBKO SPECIAL TO RBTH

Russia’s first ever Formula One Grand Prix drew plaudits for its organisation and setting, with emotions running high for many fans who witnessed the spectacle at the Sochi Autodrom on Russia’s Black Sea coast on Sunday, Oct. 12. Although rookie Russian driver Daniil Kvyat failed to take the opportunity offered by his best ever qualifying position, coming in 14th despite starting fifth on the grid, the overwhelming feeling was one of positivity for the hosts of the newest addition to the Formula One calendar. British driver Lewis Hamilton took home the first trophy ever to be won at Russia's F1 Grand Prix,

presented to him by Russian President Vladimir Putin, while Hamilton’s Mercedes team won the trophy for best constructor. "I never even imagined that people in Russia are interested in Formula One and that they love it so much," said Hamilton after his win, not hiding his emotions. Most of the people associated with F1 were surprised to see how popular racing is in Russia. Chief architect of the Sochi circuit Herman Tilke, when asked if he had expected to see 55,000 people in the stands of the Sochi Autodrom, first said "no" – though he then corrected himself by saying that he had been hoping for success. The racetrack - one of the longest in F1 at 5,468 yards - was also praised, as was the level of organisation and the views. Holding a race inside an Olympic park was indeed something new, and Formula One CEO Bernie Ecclestone is now avoiding questions about whether it would not be better to make the Russian F1 race a night or at least an evening event, so that the stadium's illumination could be better seen. "It's possi-

ble," Ecclestone replied tersely when asked, without elaborating.

Olympic experience paid dividends As far as organisation is concerned, Russia did not need much effort to make the F1 Grand Prix in Sochi a successful event. "Most members of our team had worked on the Olympics and Paralympics," says SergeiVorobyov, F1's Russian promoter. "The transportation was also [already] organised thanks to the Olympic experience." In terms of dimension and spectator numbers, the F1 race was comparable to the opening and closing ceremonies of the Olympics, so the logistics, security systems and catering organisations were left as they were.

Dreams come true for Russia’s F1 fans

"This is the most astounding debut in all the 23 years that I've worked with F1" - Alexei Popov, commentator

place without seating to 220,000 rubles ($5,500) in a VIP box. "How can you miss an event like this?" said Andrei and Maria, two fans who had come to Sochi from Magnitogorsk, a town in the Urals 1,053 miles from Moscow. "The first Grand Prix can only happen once in a lifetime, so spending money on this is no waste. We've been watching F1 on TV for 20 years, we root for Ferrari and never even dreamt of seeing all this at home." The pair had spent 100,000 rubles ($2,500) on the event and were strolling about the Olympic Park in their genuinely autographed Fernando Alonso and Kimi Räikkönen T-shirts. Many others like them were in the stands, people who have followed F1 for years and know more about racing than many experts. Some had traveled to see the races in Europe, to Monza, Monaco or the Hungaroring. When asked to compare the organisation of the events, they proudly responded, "Ours is better. Everything's new, more modern."

Now repeat the success TV commentator Alexei Popov agrees with the fans. He has covered Grand Prix races for over 20 years and it is partly thanks to him that the sport is so popular in Russia today. "This is the most astounding debut in all the 23 years that I've

worked with F1," says Popov. "Perhaps no one believes us when we praise ourselves, but I’m being completely honest. In terms of organisation, only Abu Dhabi and Bahrain can compare to Sochi.The only difference is that they had to have 3-4 races before improving and reaching this level, whereas our race was fantastic from the first time.” However, Popov points out that hosting the maiden Grand Prix was the easy part – the biggest challenge will be maintaining that success: “Now we only hope that nothing goes wrong the second time,” he says. “The second year will be the most difficult. What if no one comes? Or the organisers lose their determination?" Russians will have time to think about the next F1. Especially since the success of the 2015 Grand Prix will depend not only on the organisers. A week ago it was announced that Daniil Kvyat is replacing four-time champion Sebastian Vettel at Red Bull. This means that Russian fans, along with their driver, their team (Marussia operates with a Russian license) and domestic racing, now have a real hope of getting, if not a world champion, at least a racer capable of winning one of the Grands Prix. And this will attract spectators more than any commercial. The story of Russia and Formula One is just beginning.

Tight and testing: the Sochi Autodrom Adler Arena Skating Centre

Ice Cube Curling Centre

Iceberg Winter Sports Palace Medal Podium

Track length: 5,832 metres (3.6 miles) Average speed: 216 km/h (134.2 mph) Time: 1 min 37.2 sec

Bolshoi Ice Palace

Although were noticeably few foreign racing buffs at the Sochi Grand Prix, their places were gladly taken by the Russians who had come to the event from all parts of the country. The prices did not discourage them: tickets cost from 5,000 rubles ($125) for an open

The Shayba Arena

1. Start/finish line 2. Main spectator stand 3. Stand T2 4. Stand T4 5. Stand T5 6. Stand T6 7. Free spectator area 8. Pit building and team boxes 9. F1 Village

Fisht Olympic Stadium

Feature After many years of training, cosmonaut Yelena Serova has joined a unique club

Russian is first woman to visit International Space Station On Sept. 26, Yelena Serova lifted off for the International Space Station together with Alexander Samokutyayev and NASA. VIKTORIA ZAVYALOVA RBTH

Yelena Serova became the fourth female cosmonaut in Russian space history and the first to enter orbit in 17 years. Serova is one of the crew members aboard the Soyuz-FG, which was launched on Sept. 26 on a mission to the International Space Station (ISS). Serova, who was enrolled as a cosmonaut for the Russian Federal Space Agency, or Roscosmos, in 2011, had expressed a keen in-

Yelena Serova during a news conference prior to the launch.

terest in the scientific experiments being conducted onboard the ISS. One of them is called Firestation, which is an experiment that researches atmospheric gamma flashes and optical glow during thunderstorms.The expedition will last 170 days, during which Serova plans to regularly call her family.“There is no problem with that. The ISS is now equipped with all the modern types of communications. There is IP telephony and e-mail,” the cosmonaut told RIA Novosti in an interview. Serova, aged 38, is married to former cosmonaut and test pilot Mark Serov., with whom she has an 11-year-old daughter. Serova

dreamed of becoming a cosmonaut even as a child. She was born in the small provincial town of Vozdvizhenka in the Ussuriysky District of the Primorsky Territory in the Russian Far East. Serova stayed true to her childhood dream and matriculated at the aerospace faculty of the Moscow Aviation Institute, where she received engineering qualifications. After defending her thesis, she got a job at the S.P. Korolyov Rocket and Space Corporation Energia, a manufacturer of spacecraft. She transferred to the Mission Control Centre in 2004. After training at the Gagarin Research and Test Cosmonaut Training Centre, Se-

RBTH RECOMMENDS » MATRESHKA FESTIVAL More than a month of Russian themed activities kick off on October 16th 2014 16 Осt — 19 Nov. 2014

rova applied for admission as a cosmonaut in 2005. A lengthy period of medical examination and approval of her candidacy ensued. She was admitted to general space

Serova had expressed a keen interest in the scientific experiments being conducted aboard the ISS. training in 2007, and in 2009 she passed her exams and received qualifications as a test cosmonaut. Serova’s final test was to survive in the desert as a crew mem-

The Russian Far East: on the edge of the Pacific rbth.com/travel

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ber with Sergei Ryzhikov and Oleg Novitsky. In December 2011, she was appointed flight engineer for the Soyuz-TMA. Serova says there is no discrimination in space. “At this stage of my preparation, I've been approved as a crew member at the same time that several of my male colleagues are still waiting for their hour of triumph,” she said. “With regards to myself, I can say the following: There is an incredible burden on the woman because she has to be both a professional at work and a good housewife and mother.”She is not intimidated by the hardships of space travel.“This is my job and my professional choice,” she said.

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