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Thursday, June 25, 2015

June 27 - July 3, 2015

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What’s next after Baikonur?

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News Digest

BEST CITIES

Top 10 places in Russia to do business The top ten regional business climates in Russia include the Tambov, Kostroma, Ulyanovsk and Tula regions, according to Russia’s presidential administration chief Sergei Ivanov. “The start of such work has already allowed us to assess the business climate in different regions. Certainly, it is neither a secret nor a surprise that it varies drastically. Today we have already determined the top 10 regional leaders,” Ivanov said at the St Petersburg International Economic Forum on June 18.

Business people themselves have said that these regions have the most comfortable business climates and the local authorities support the development of different forms of entrepreneurship, he noted. “They primarily include the Kaluga region, the Belgorod region and Tatarstan. In my opinion, it is not surprising because they were named in all groups of leaders previously. But new regions have emerged as well. The Tambov region was never ‘the talk of the town’ previously, but today it is

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one of the leaders.The same concerns the Ulyanovsk region and the Kostroma region,” the Kremlin official said. For example, the Kostroma region was described as a “basket case” not so long ago, and “it seemed to be living back in the 1950s”, Ivanov said. “But the region made an economic ascent after new people came to power there,” he said. Russia’s list of the best places to do business also includes the Krasnodar territory, the Rostov region, the Republic of Chuvashia and the Tula region. “This region is not simple either, but industrial production has been growing there recently, and its business climate has noticeably improved,”Ivanov said. Hopefully, further similar ratings will see changes, he said. “Some regions will quit the top 10, others will join it. I am not naming any regions that lag behind.”

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CHINA

Gas pipeline work begins China has started construction on its section of the Power of Siberia gas pipeline, Gazprom said in a press release. Work on the Russian section of the pipeline is on schedule, the company said. “It has been noted that the construction of the pipeline to receive gas from Russia was officially launched in China last week, while the welding of the first joint is scheduled for the end of June,” Gazprom said in the press note.

In late May, Gazprom reported that it expects to build between 43 and 50 km of the Power of Siberia gas pipeline in 2015, while China’s CNPC could begin to build a portion of the pipeline on its territory as early as in June. Gazprom’s chairman of the board Alexei Miller met the State Council of China’s First Deputy Premier Zhang Gao and CNPC’s chairman of the board WandYilin in Beijing on June 2. The parties discussed the progress of negotiations on

gas supplies to China via the western route and the schedule of further preparations for the signing of the contract. I n N ove m b e r 2 0 1 4 , Gazprom and CNPC signed a framework agreement on the supply of gas via the western route. At the initial stage, gas supplies to China in this area may be 30 billion cubic meters per year. In May 2014, Gazprom and CNPC signed a 30-year contract to supply natural gas via the Power of Siberia pipeline.

VLADIVOSTOK

IN BRIEF

$450m resort plan

MoU with Myanmar on nuclear energy

YURI SMITYUK / TASS

EPA/VOSTOCK-PHOTO

View of the bridge to the Russky island in Vladivostok.

Japanese real estate developer Iida Holding is looking to invest up to $450 million to construct a resort on Russky Island, off Vladivostok, a city in the Russian Far East. The resort would have golf courses and a ski resort, Sergey Kachaev Russia’s Deputy Minister for Development of the Far East told Kommersant on the sidelines of the MIPIM Japan Exhibition in Tokyo. Iida declined comment, but a representative of the governor of the Primorye territory confirmed that negotiations were taking place. Russky Island, formerly home to a military base,

was transformed to host the APEC Summit in September 2012. The original plans called for the creation of a recreational area on the island. If Iida decides to go ahead with the investment, it will receive preferential treatment, since Russky Island is on the verge of gaining priority development territory status, a representative of the governor of Primorye territory said. Residents of a priority development territory are exempt from the payment ofVAT and income taxes for 10 years. The Iida Holding has a 25-per-cent share in Japan’s residential housing market.

The state corporation Rosatom has signed a memorandum with Myanmar on the peaceful use of nuclear energy, at the St Petersburg International Economic Forum 2015, an Interfax correspondent has reported. The document was signed by Rosatom chief executive officer Sergei Kiriyenko and Myanmar’s Minister of Science and Technology Ko Ko Oo. This memorandum is the first stage in the work on an intergovernmental agreement on cooperation on the peaceful use of nuclear energy. The latest negotiations between Russia and Myanmar on cooperation on the peaceful use of nuclear energy took place in March.

Transport research centre

MOSCOW

Five-star hotel plan The Mandarin Oriental Hotel Group is looking to operate a five-star hotel in Zaryadye, next to the Moscow River near the Kremlin in the centre of Moscow, Kommersant Daily said, citing a source close to the negotiations. The design of the 54,000-square-metre hotel was submitted to the Moscow authorities, the paper said. The hotel will have 150 rooms and 51 apartments, as well as restaurants and commercial areas. The space became vacant with the demolition of Hotel Rossiya in 2007. The 13-hectare plot is located 100 metres away from the Kremlin on the Moskvareka Waterfront.

The space was empty for a long time, even though its location courted plenty of interest from Moscow’s developers. In 2012, Russian President Vladimir Putin and Moscow Mayor Sergei Sobyanin decided to landscape a park on the plot, and add an amusement centre. Potential traffic woes shot down proposals for a commercial tower to be built on the land. The Mandarin Oriental Hotel Group was founded in Hong Kong in 1963. Currently, it has 29 five-star hotels, but none in Russia. In 2007, Mandarin unsuccessfully tried to obtain permission to manage a hotel on Moscow’s Tverskaya Street.

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A Russia-South Korea joint research centre opened in Vladivostok on June 18. The main aim of the centre at the Admiral Nevelskoy Maritime State University, is to analyse the transport and logistics complex and port infrastructure in the Far East and Arctic regions, according to the report. The centre is a joint project of the Nevelskoy Maritime University and the Korea Maritime Institute. It was set up under an international agreement on cooperation signed by the Transport ministries of Russia and South Korea in 2014.

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Diplomacy Defence and economic cooperation revive strategic relations

CHINA LAUNCHES THE WORLD’S LONGEST FREIGHT TRAIN ROUTE

Why ties with Vietnam are on the upswing again

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RUSSIA COULD GAIN FROM CHINA-SOUTH KOREA FTA

The strategic relationship between Russia and Vietnam has been growing closer and is connected to cooperation in the areas of oil exploration and defence.

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RAKESH KRISHNAN SIMHA SPECIAL TO RBTH

The value of the partnership Located at the gateway to the Indian and Pacific oceans, Vietnam is of critical importance to Russia. Permanent basing of air and naval assets inVietnam helps the Russian Pacific Fleet solve its problem of having to pass through the narrow straits of the Sea of Japan to gain access to the Pacific. To be sure, the current Russian presence is minimal compared with the firepower of the 1980s, when Moscow’s Pacific fleet consisted of an incredible 826 ships, including 133 submarines, 190 naval bomber jets and 150 anti-submarine aircraft. In fact, back then Alvin H Bernstein of the US Naval War College had written the Russian buildup is “unlikely to have a specific, aggressive, regional intent since that would be quite out of character for

VUNG TAU: A TROPICAL ABODE FOR RUSSIANS IN VIETNAM asia.rbth.com/46825

FACTS ABOUT ARMS

In 2011 Vietnam acquired two Gepardclass guided missile stealth frigates from Russia at a cost of $300 million.

Vietnam’s legendary air force acquired 24 Su-30 combat jets from Russia, and by the end of 2015, it will operate 36 Sukhois.

In 2009, Vietnam signed a $3.2-billion deal with Russia that includes six Kilo class submarines and construction of a submarine facility at Cam Ranh Bay.

Vietnam also acquired Svetlyak-class fast patrol boats with anti-ship missiles; 12 frigates and corvettes of Russian origin; and two Molniyaclass missile fast attack ships.

To be sure, the current Russian presence is minimal compared with the firepower of Moscow’s Pacific fleet in the 1980s

PHOTOSHOT/VOSTOCK-PHOTO

Russia-Vietnam ties that seemed to be cooling after the end of the Cold War are warming up all over again. More than 20 years after Moscow abandoned its largest foreign base, Russian military aircraft are once again welcome visitors at Cam Ranh Bay. The renewed Russian presence in Vietnam has predictably set the alarm bells ringing in the Pentagon, with the Commander of the US Army in the Pacific confirming that Russian strategic bombers circling the massive American military base in Guam are being refuelled at Cam Ranh Bay. On March 11 Washington wrote to Hanoi requesting that the Vietnamese authorities not assist Russian bomber flights in the Asia-Pacific. The Vietnamese reaction was to remain publicly silent.

CRISIS IN RUSSIAN CLOTHING SECTOR CREATES OPPORTUNITIES FOR SOUTHEAST ASIAN EXPORTERS

A MiG-21 jet that took part in the Vietnamese war.

a power” that has revealed itself as“cautious and nonconfrontational”.

Economic angle According to a research paper by Portugal-based academics Phuc Thi Tran, Alena Vysotskaya G. Vieira and Laura C Ferreira-Pereira,“The acquisition of military capabilities is critical, not only purely for the sake of defence and strategic calculations, but also for the important function it plays in the safeguarding of both economic interests and the security of oil field explorations in the South China Sea. This latter aspect is particularly critical given the role that Russia has been playing herein. Indeed, the lion’s share of these exploitation projects has being undertaken by Vietnam jointly with Russia.” While defence gets more traction in the media, it is energy that’s the single biggest area of cooperation between Moscow and Hanoi. The Russia-Vietnam joint venture Vietsovpetro has generated big dividends for both countries. The company has produced more than 185 million tonnes of crude oil and more than 21 billion cubic metres of gas from oilfields in the South China Sea. Nearly 80 per cent of Vietnamese oil and

gas comes fromVietsovpetro, and the income corresponds to around 25 per cent of gross domestic product. Russia has also made considerable investments in Vietnam’s heavy and light industries, transportation, post, aquatic culture and fishing. These projects have led to other spin-offs – impressed by the profits generated by Russian corporations, a slew of other companies such as Mobil, BP and TOTAL have upped investments in Vietnam. Vietnam’s strategic hedging towards Russia is closely connected to its economic cooperation in oil exploration, which brings significant economic benefits to both sides. Strong defence ties between the two countries has enabled Vietnam to acquire modern military equipment, providing the country with the ability to advance joint explorations of oil and gas despite growing Chinese opposition towards these projects. At the same time, Russia is returning to reclaim its great-power legacy.Vietnam offers Moscow a myriad of opportunities to secure political and economic influence with the various emerging powers in the heart of the most dynamic region on the planet.

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25 YEARS OF POST-SOVIET RUSSIA: HOW FAR HAS THE COUNTRY COME? asia.rbth.com/46869

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Finance Western sanctions-hit companies mull strategy to overcome funding difficulties

Islamic funds offer hope in crisis Russian banks reflect on borrowing from Islamic banks, which could help to tackle their credit shortage, caused by the cooling of relations with the West. ALEXEI LOSSAN RBTH

REUTERS

Islamic finance could help Russian companies hit by Western sanctions to gain access to credit, Rustam Minnikhanov, president of the predominantly Muslimpopulated Russian republic of Tatarstan, said at the Kazan Summit Forum. “Muslim countries did not join attempts to isolate our country on the international arena, and the latest events in the world economy have shown that Islamic banks help counter world crises and supplement the world financial system,” Minnikhanov said. He added that this Islamic finance could not completely substitute Western credit, but instead could provide Russian companies with an

important financial instrument. According to IMF’s latest calculations, by the end of 2015 the volume of Islamic finance around the world will amount to $3.4 trillion. “Against the backdrop of world crises, the importance of Islamic finance only increases, because all the operations in this scheme are backed up by real money, while investments become secure and do not carry any risks,” said Qatar’s Undersecretary of Economy and Commerce Sultan al-Khater. According to the requirements of Islamic banking, it is prohibited to charge interest while lending, while receiving credit essentially implies exchanging one commodity for another. Ahmad Mohamed Ali AlMadani, president of the Islamic Development Bank, said,“Islamic finance is by nature tied to real economic activity, which is why such a scheme allows the

Islamic finance could provide short-term relief to Russian companies.

Muslim-populated Tatarstan could be promoted as “an Islamic finance hub in Russia”.

optimisation of the internal resources.” He added, “The concept of dividing risk in Islamic banking stimulates healthy financial practices. In Islamic finance, the transactions are tied to real investments, which helps avoid specula-

tion and the instability related to it.” Al-Madani suggested that Tatarstan could be promoted as “an Islamic finance hub in Russia”. According to Rustam Minnikhanov, Russian banks, including the coun-

try’s largest bank Sberbank, are currently showing an interest in Islamic finance. One of the advocates of the development of Islamic banking in Russia is the head of Sberbank, former Russian minister of economic development, German Gref. “There are still problems with taxation and the lack of qualified personnel, but with the help of our colleagues in the Russian government, we will be able to make this process more dynamic,”Minnikhanov said. One example is Tatarstan’s largest bank, AK Bark, which has already attracted financing in accordance with Sharia regulations. In January 2015, the local Alliance Insurance Company started selling an Islamic insurance product called Khalal Invest. Minnikhanov also told RBTH that the development of Islamic banking in Russia should be done on a federal level and that there is no talk of creating a unique financial zone in Tatarstan. “Today the Kazan Summit is a platform that must change the attitude that Russians and Russian regions have towards Islamic finance, and this is our mission,”he said.

Energy New Russian-backed portal brings all ESCAP data under one roof

April Quarterly Report

Open source will offer easier access to databases

BEST RUSSIAN STUDIES PROGRAMMES 2015

The new portal is a totally open resource that does not require user registration, and promises to become popular among the general public.

Russia Direct is a forum for experts and senior Russian and international decision-makers to discuss, debate and understand issues in geopolitical relations at a sophisticated level.

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IRINA VINOKUROVA RBTH

This April, Russia Direct released its comprehensive ranking of Russian and post-Soviet Studies programmes in US universities, together with an analysis of the current state of Russian Studies programmes in the US. While bringing together top experts (including Harvard’s Alexandra Vacroux, Georgetown’s Angela Stent and Rhode Island University’s Nicolai Petro), the report will address the major challenges facing Russian Studies programmes in the US and ways of tackling them.

A team from Russia, which has been one of the most active participants in the United Nations Economic and Social Commission for Asia and the Pacific or ESCAP, was instrumental in the development of the Asia Pacific Energy Portal (asiapacificenergy.org), whose launch ceremony took place in Bangkok in late May. An important factor in the success of multilateral dialogue in this field today

is to create unified databases of current and updated information and ensure easy access to them. It is to solve this problem that the Asia Pacific Energy Portal was designed.It is a totally open resource that does not require user registration, and promises to become popular among the general public, and not just within the narrow circle of ESCAP experts. All this is thanks to the original concept, an up-to-date platform and a unique opportunity to extensively explore energy issues in the region almost in a single click. “The driving objective of the portal is to make information easier to access and also centralised,” says the author of the project’s con-

cept and an ESCAP consultant, Kim Roseberry. “There is data out there and you can find it, but you have to do research and that could take literally days.We tried to make data very fast, very interactive and enable a user to ask the question and find the answer in a very short period of time. Here you seek to the data within seconds and just look at the visualisation of that data.” One part of the portal is the statistical data from ESCAP databases, based on information of the International Energy Agency, which in turn gets it directly from the statistical services of the region. Although these data are just relevant, but not new, the IEA publishes it openly for the first time as part of the action plan for the exchange of information, adopted during the Vladivostok forum. The other part of the portal is information about the legislation and regulation of the energy field by the

state institutions in the region. Sergey Tulinov, Economic Affairs Officer in the Energy Security and Water Resources Section of the Environment and Development Division, ESCAP, says, “The portal is a part of the bigger project to promote energy cooperation in the Asia-Pacific. It is done by the UN and by ESCAP, but with Russian participation and financial and substantial support.” He adds,“The idea is to provide energy information, policy, data, and just about everything. This idea was floating here for 5-6 years, but it felt like we were waiting for the right moment. So we wrote a concept and found a very good software company, located in Bangkok that is small but very active and innovative.” The next stage of development of the portal is to create a single ‘map’ of the energy infrastructure in the region, which will bring together data on all facilities of the energy sector.

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Atomexpo Indonesia, Malaysia and Thailand express interest in power plants

COMMENT

Forum sees mounting interest in nuclear energy

Questions linger over the health of economy Sourat Rakhimbabaev EXPERT

The Atomexpo 2015 international forum in Moscow drew a record number of participants, with many nuclear ‘newcomer’ countries. ANDREI RETINGER SPECIAL TO RBTH

PRESS PHOTO

A panel of experts at the Atomexpo 2015 international forum, which was held in Moscow in June, estimated the share of nuclear energy in the global energy mix to reach 20 to 30 per cent by 2050. More than 2,200 delegates from 47 countries came to the forum, which is twice as many as a year ago. The discussions were attended by foreign experts, with a large number from Malaysia, Bolivia and Kenya.They expressed interest in the safety features and cost effectiveness of Russia-designed nuclear plants, and the management of spent nuclear fuel. The highlight of Atomexpo 2015 was the signing of a large number of cooperation agreements between Russia’s state-owned nuclear energy corporation Rosastom and countries that are taking their first steps on the path of the peaceful use of nuclear energy. Russia initiated a partnership with Tunisia and Indonesia, and even signed a roadmap for cooperation with Ghana.“Only research reactors operate in Ghana, but the country can receive its first nuclear reactor thanks to the cooperation

Nuclear power plants give a country an independent source of power supply.

with Russian specialists,” Alexander Uvarov, an independent expert and the editor of the web portal AtomInfo, said. A number of countries have shown a serious interest in a floating nuclear power plant and mobile energy stations showcased at Atomexpo 2015. “Rosatom is just completing the construction of the first floating nuclear power plant at the Baltic Shipyard. It will be delivered next year,” Uvarov said. Floating power units are adapted for use in remote and not easily accessible areas along the banks of major rivers and seashores. This technology becomes of great interest to island states.

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Thailand is among the countries looking to develop the peaceful use of nuclear energy. Back in 2008, Thailand announced that it planned to build two nuclear power plants that could significantly help increase its electricity generation. Russian specialists can help the country in the development of nuclear energy and basic research in the nuclear field. The foundation for cooperation has already been laid. In September 2014, the parties signed a corresponding memorandum. In April of this year, the first meeting of a bilateral working group on the peaceful use of atomic energy was held in Bangkok. “With our Thai partners,

we discussed the possibilities of cooperation in various fields of nuclear energy, such as nuclear safety and radioactive waste management, the use of isotopes for the needs of industries, including agriculture, medicine, training of professionals of all levels for the nuclear industry and the use of applied research in nuclear physics,” said Nikolai Drozdov, director of the international business department of the state corporation Rosatom. With the construction of nuclear power plants, a country gets an independent source of power supply, thereby strengthening its energy security. The economy also receives a powerful development impetus.

t is too early to say that the crisis is over but it is certainly on the decline, and next year Russia is going to see some economic growth. Some analysts believe that the Russian economy will contract for another couple of years, while others expect a small growth in the GDP next year. The government, though, is of the opinion that the crisis is over. It is not easy to find an informed answer to this question and we must now decide what we consider as a crisis. If we take the fall of the stock market index by more than 10 per cent as a sign of a crisis, the answer is a clear yes, but now the market is performing well. Another sign of a crisis is the devaluation of the national currency. Again, the answer is yes. At the end of 2014, the Russian ruble had lost 60 per cent of its value, but since then appreciated by 40 per cent. The third feature in a crisis is an increase in the key interest rate of the Central Bank. For this, the answer is also yes, although the rates are gradually being cut. So, the experts have all three “yes” answers, but at the same time, the latest data shows that the Russian economy is visibly on a path of growth again. In the medium term, the IMF expects annual economic growth in Russia

to be at the level of 1.5 per cent a year. Moreover, there are positive aspects which the country has received as a result of this crisis. Companies that have more or less modern formats of business, confidently conduct their business further. Recently the World Bank improved its GDP forecasts for Russia in 2015-16. In 2015, the World Bank anticipates a decline in real GDP of Russia by not more than 2.7 per cent, and the growth rate in 2016 is estimated to be around 0.7 per cent. But the Russian forecast is slightly different. On May 21, the Russian Ministry of Economic Development announced that in 2015, the decline in GDP could reach 1.8 per cent, but added that the Russian economy is expected to grow by 2.3 per cent in 2016 and 2.5-2.7 per cent in 2017. The ministry added that this is a conservative estimate. So, who do we believe? It is too early to say that the crisis is over but it is certainly on the decline, and next year Russia is going to see some economic growth. The ruble has stabilised, exports are increasing, major projects go on as per plans and economic activity is picking up. For some, the crisis is over, and for others it is still around.We can unanimously agree that a lot of hard work is required to restore Russian economic growth levels to what we witnessed a few years ago. The writer is the executive director of the Thai-Russian Chamber of Commerce

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Aviation Carriers respond to the growing demand from some Asian markets by widening their networks

As some airlines shut shop, others increase flights Russia’s economic crisis and the ruble’s devaluation have led some Asian airlines to cancel their flights to Moscow. But other carriers are expanding. KIRA EGOROVA RBTH

REUTERS

The devaluation of the ruble led to a drastic reduction in demand for international air carriers in Russia, which forced at least three Asian companies to stop operating in the country. As of June 1, 2015, Cathay Pacific Airways stopped flying to Moscow. Company representatives say the decision was due to“commercial reasons”and“high operating costs”. The Hong Kong-based carrier follows in the footsteps of Thai Airways, which stopped flying to the Russian capital in February. In addition, popular budget carrier Air

Some Asian and Chinese air companies are increasing their flights to Russia.

Arabia cancelled its flights to Sharjah fromYekaterinburg, Rostov-on-Don and Kazan. Meanwhile, the market is witnessing a contrary trend:

FlyDubai, Etihad Airways and Sichuan Airlines are increasing their flights to Russia. The Middle Eastern and Chinese carriers are putting

greater emphasis on flights to Russian regions, especially to cities in the Asian part of the country. Last month, Sichuan Airlines started a flight from

Chengdu to Moscow. Despite the stagnation of the Russian market last year, Etihad Airways had announced plans to increase freight capacity and the frequency of flights to the country. From October 2015, FlyDubai will fly to Novosibirsk and Nizhny Novgorod, expanding its network in Russia to 10 cities. Oleg Panteleev, head of the Aviaport analytical services agency, says the regions are offering these airlines better conditions than Moscow’s three busy airports - Vnukovo, Sheremetyevo and Domodedovo. Chinese companies continue to consolidate their positions in Russia. “Currently, besides the Russian airlines flying to China, there is also the active presence of Air China, China Eastern, China Southern and Hainan Airlines,” says Svetlana Pyatikhatka, executive director of the World without Borders Tourist Association. China is now connected with Moscow, St Petersburg,Yekaterinburg, Novosibirsk, Krasnoyarsk, Irkutsk, Chita, Ulan-Ude,

Khabarovsk, Vladivostok and Yuzhno-Sakhalisk, Pytikhatka adds. “New flights from China to Sochi are also being discussed,” according to Pyatikhatka.“This will increase the tourist flows to the region.” The increase in flights from Asia reflects the demand from the continent, says Alexander Burtin, Director of Tez Tour. Burtin says the ruble’s devaluation will lead to a 35-40 per cent year on year fall in overseas travel by Russians this year.“The biggest fall is in the long-distance flights (Thailand, Sri Lanka). The fall in demand at the end of 2014- beginning of 2015 was up to 60 per cent,” he says. At the same time, ticket prices in rubles have been corrected in accordance with the strengthening of the ruble (currently the exchange rate has stabilised at 51 rubles to a dollar). Philip Brinkman General Director of the Tripsta online tourist agency says that currently the most popular Asian destinations for Russians are India, Indonesia and China.

Banking Autonomous financial system a response to US-imposed sanctions RUSSIA DIRECT IS A FORUM FOR EXPERTS AND SENIOR RUSSIAN AND INTERNATIONAL DECISION-MAKERS TO DISCUSS, DEBATE AND UNDERSTAND ISSUES IN GEOPOLITICAL RELATIONS AT A SOPHISTICATED LEVEL. June Report

HIGH-TECH AND SCIENCE CITIES In June, Russia Direct released a new brief, examining the topic of Russian high-tech and science cities. New efforts to modernise the Russian economy have taken on even greater significance with the introduction of Western sanctions and recent volatility in global energy markets. This report highlights the early successes and challenges of Russia’s modernisation drive, with an emphasis on the role of the state in supporting innovation efforts at the local level, primarily through the creation of new technoparks.

Prototype of payment card ready A prototype plastic card for the country’s new national payment system was presented in May. Ten banks have already shown interest. ALEXEI LOSSAN RBTH

The Russian authorities have created a prototype national payment card for use in the country’s new internal payment system. Mass production of the new payment card, called Mir (World), will begin in 2016. As the Central Bank’s deputy head Olga Skorobogatova stated at the official presentation of the card in Moscow on May 29, American payment system MasterCard and Japan’s JCB have already expressed interest in issuing cobranded cards with the new system. The creators of the new card see the payment

A prototype plastic card for Mir

systems of the BRICS countries as future partners, she said. According to Ilya Balakirev, chief analyst at investment company UFS, the system is being created “at a rapid pace”,which has already led to“various kinds of technical problems”. It will take some time to become clear whether the system receives the support of the population, said Balakirev. The issue of the payment

card is part of a large-scale programme to create an autonomous financial system in Russia, launched as a countermeasure to the sanctions imposed against Russia by the US over Moscow’s role in the Ukrainian crisis, which resulted in international payment systems Visa and Mastercard ceasing to process card payments for customers of several Russian banks in March 2014. To avoid a repetition of such a situation, on April 1 Russia launched a national payment system, in which payments are processed within Russia. The issuing of plastic cards is intended to be the next stage of the implementation of the system, which Visa and Mastercard have now joined. “The idea of establishing a national payment card

was not a direct result of the sanctions,”said Dmitry Bedenkov, head of the analytical department at Russ-Invest.“Although the activation of the process began after the introduction of sanctions, this topic had been discussed to varying degrees earlier. The transition to a sanctions regime just increased the relevance of creating domestic payment systems,” he said. According to the Central Bank, 10 Russian banks are ready to issue the new card, including the sanctioned Bank Rossiya and credit institutions in Crimea, where all recognised international payment systems pulled out following the imposition of sanctions and Russian banks have so far yet to venture. Incidentally, proposals for co-branding do not apply to the banks under sanctions.

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Poverty 11 per cent of Russians were living below the poverty line in 2014

EPA/VOSTOCK-PHOTO

More people joining ranks of the poor As sanctions continue to take their toll on the economy, an increasing number of Russians are finding themselves unable to make ends meet. YEKATERINA SINELSCHIKOVA RBTH

As Russia’s economy continues to slide into recession under the effect of Western sanctions and falling relative incomes, figures published by Russia’s state statistics bureau Rosstat show that 16 million people, or 11 per cent of the population, found themselves below the poverty line in 2014. However, Russian experts claim that this figure is far too low: The Rosstat statistics are merely the official data, which analysts traditionally see as unreliable. They warn that the official figures underestimate the

problem and that in 2015 almost one in five Russians may find themselves in dire financial straits. According to alternative estimates, even a year ago 25 to 40 per cent of Russian citizens described themselves as poor. Yelena Kiselyova of the Institute for Complex Strategic Studies told RBTH that while 40 per cent is “certainly an exaggeration,” 30 per cent is “quite a realistic figure”. “Official” poverty comes when incomes fall below the minimum subsistence level. Today, the minimum is 8,000 rubles a month ($150) per person.“Until recently, the number of poor in the country had been steadily declining since 2000. Even during the last crisis [in 2008] there was no significant increase in the number of poor,” said

Kiselyova. But with wages and incomes shrinking, and most of this money going to cover food costs, housing and communal services, and other priority needs, there is no money left for other expenses, such as loan payments. “Today we are seeing an increase in the number of second and third loans that are taken out to service previously taken loans,” said Kiselyova. According to Sergei Smirnov, director of the Institute of Social Policy at the Higher School of Economics in Moscow, people are slipping into poverty faster than Rosstat thinks. This year, as a result of the sanctions, consumer prices have increased by 20 per cent on average. If Smirnov’s forecasts are correct, it is possible that by the end of the year one Rus-

sian in eight will be living from paycheck to paycheck. A specific feature of Russian poverty is that it is often those who work who are the most affected.“The salary level of many people is close to the subsistence level or slightly above,”said Kiselyova. According to official statistics, this is the case for 13 per cent of Russian workers. “It has become impossible to live on a small pension or salary,”says leading Russian sociologist Leontiy Byzov. “This is a very important factor, which we have been trying to leave behind for 15 years after the default of 1998, and now we have returned to it.” What has changed during the current crisis is that today’s poor are not only people with social problems. According to public opinion surveys carried out in late March-early April 2015, the number of Russians who see themselves as poor has increased by 25-30 per cent, he said. So what steps is the Kremlin taking to combat rising poverty in Russia? When asked about the measures being taken by the government, the press service of Russia’s Ministry of Labor and Social Protection reminded RBTH that insurance pensions have been indexed by 11.4 per cent (averaging 13,000 rubles, or $241 monthly), welfare payments by 10.3 per cent, and benefits for families with children and monthly payments for certain categories of citizens by 5.5 per cent. In turn, on May 23 Russian President Vladimir Putin authorised the use of the state allowance paid for the birth of a second child as mortgage fee payments, as an additional measure to support families.

Islam ‘A believer must be a patriot’

Clerics come up with doctrine for Russian Muslims A new social doctrine recently adopted by Russia’s Islamic clerics defines the role and outlook of Muslims in contemporary society. OLEG YEGOROV SPECIAL TO RBTH

This May, members of the Council of Muftis of Russia, together with leading Islamic theologians, religious scholars and academics, drafted a new doctrine about what it means to be a Muslim in Russia. It combines recommendations to Muslims on a wide range of issues, from attitudes to the state to everyday mat-

The social doctrine combines recommendations to Muslims on a wide range of issues ters. The provisions of the doctrine are supported both by Muslim sources, the Koran and Sunnahs (teachings and practices of the Islamic prophet Muhammad) and by Russia’s secular laws. The doctrine effectively outlines the views of Muslim theologians that are loyal to the current authorities on what a true Muslim should be like. Firstly, a true believer must be a patriot.“Love for one’s motherland is not only acceptable but is essential from the point of view of teachings of Islam,”the doctrine says. This covers not only patriotic sentiments but also compliance with the law. It is prescribed that

a Muslim assumes obligations of the social contract envisaged in the constitution. This is not the first social doctrine to be adopted by Russian Muslim scholars. The previous one was published in 2001. In an interview with RBTH, one of the contributors to the 2015 doctrine, Damir Khayretdinov, the vice-chancellor of the Moscow Islamic Institute, explained: “Since the adoption of the first doctrine, the situation has changed. In Russia it has stabilised [the end of hostilities in the North Caucasus]. whereas for the rest of the world, unfortunately, the opposite is true.” Khayretdinov pointed out that many young Muslims have become influenced by extremists and some have even travelled to the Middle East and joined terrorist groups there. One of the main tasks of the new doctrine is to keep the young generation within traditional Islam, he added. The threat of radicalisation of Islam is one of the reasons why the current doctrine deliberately focuses on peace, Khayretdinov said. “The two biggest sections in the doctrine are devoted to Muslims’ peaceful coexistence with those of other faiths and the right attitude to jihad and takfir. Takfir is a practice whereby a religious leader declares that a particular state is a godless one and Muslims must fight against it. The doctrine says that takfir should not be applied now.”

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RUSSIA’S TOP SPOTS WITH SUMMER IN FULL SWING, RBTH LOOKS AT THE BEST-RATED WARM-WEATHER DESTINATIONS THE COUNTRY HAS TO OFFER

EXPERIENCE SUMMERTIME IN RUSSIA SLAVA SHIROKOV SPECIAL TO RBTH

While Russia often hits international headlines, it’s rarely for its travel destinations. And yet, Russia is a vast country, with diverse natural, cultural and historical attractions. In summertime, it opens up, and locals celebrate the good weather. And with the ruble being at such a low ebb this year, now is a particularly good time for international tourists to visit. 2015 also sees Russia en-

joying the results of preparations for the 2014 Winter Olympics in Sochi.The country now has new tourist and transport infrastructure, which has made certain destinations much easier and more convenient for international visitors to navigate.

Timeless Classics — Moscow and St Petersburg

More than 90 per cent of visitors to Russia visit Moscow and St Petersburg, and for good reason. These are the most iconic cities in Russia, and if you’re a first-time visitor, stopping here for several days is an absolute must.

SEVEN COMPELLING REASONS TO VISIT THE URAL REGION

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Apart from worldfamous sights like the Hermitage and the Kremlin, both Moscow and St Petersburg offer plenty of exciting activities – particularly during the summer. From the inspiring White Nights Festival on the banks of St Petersburg’s Neva River to the colourful open-air food and music festivals in Moscow, there are plenty of opportunities to enjoy the long summer days and nights.

Sochi — the Perfect Blend of Sea and Mountains

The host city of the 2014 Winter Olympic Games has always been a popular resort among Russians. Sochi’s popularity lies in its unique geographic location. Stretching along the Black Sea coast, Sochi is a place where you can enjoy almost every recreational activity imaginable. From soaking in therapeutic mineral springs with healing qualities to skiing at lofty mountain resorts; to lazy days sunbathing on the Black Sea Coast to reenergising in a traditional Russian “banya”, there are plenty of options for everyone here. This year, after its major upgrade for the Winter Games, Sochi has brand new trains and hotels to make every tourist feel comfortable.

The Ultimate Rail Trip — the Trans-Siberian

This is probably the best time to take the Trans-Siberian rail-

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While Russia is often presented as a dark and wintry place, in summertime, the country comes alive and is far more hospitable. It is the perfect time to visit.

road across Russia and Mongolia all the way to China. This year, costs per person on the famous route will be approximately $800 lower than last year. Start in either Moscow or St Petersburg and end in either Vladivostok or Beijing. Plan your trip to include stops along the way in beautiful and historic cities likeYekaterinburg, Irkutsk and Ulan Ude. Additionally, the Mongolian capital of Ulaanbaatar is an absolute must for anyone on this route.

The Trans-Siberian is one of the most exciting travel experiences on Earth, but it does require some legwork. It’s not too late to make the trip this year if you plan now.

The Rising Star of Russia — Kazan

Sometimes called Russia’s third capital, Kazan, the capital of the Republic of Tatarstan, deserves all the praise it gets. It doesn’t take long to get a sense of

the mix of Islamic, European and Asian cultures in Kazan. This multi-ethnic city is most famous for its colourful Qolärif Mosque, one of the largest mosques in Europe; the Temple of all Religions, which includes a mosque, a pagoda, an Orthodox church and a synagogue; and the Kazan Kremlin. However, these sites are only the tip of the iceberg. Other top attractions for visitors include a 16th-century fortress, the Raif monastery and the

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House of Tatar Cuisine, which is distinctly different from traditional Russian food. The city has convenient links with Moscow and St Petersburg by train or plane and is celebrating the 1010th anniversary of its founding in 2015.

YURI SMITYUK

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Far Eastern jewels — an Expedition Cruise to Remember

Nature lovers and adventure seekers will enjoy taking an expedition cruise along Russia’s Pacific coastline and discovering the unspoiled nature of the Russian Far East. Adventure cruise programmes offer a wide variety of activities, from whale watching to visiting remote Eskimo settlements.The best part about these trips is that every group member partakes in nature conservation activities led by professional biologists, ornithologists and enthusiastic naturalists. So, if spending a couple of weeks on a well-equipped expedition vessel and surviving the rough conditions

of the Far Eastern weather while enjoying some of the best natural scenery on Earth sounds like a plan for you, this cruise is just what you’ve been looking for.

Slava Shirokov, CEO of Travel All Russia and a keen globetrotter, recommends inspiring destinations for a tour of Russia.

SIBERIA’S SEVEN WONDERS: THE REGION’S MOST ASTOUNDING PLACES TO VISIT TRAVEL.RBTH.COM/1921

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RUSSIA CEMENTS LEAD ROLE WITH BRICS PRESIDENCY

IORSH

Alexander Gabuev JOUNALIST

he BRICS Summit, to be hosted by Russia in Ufa from July 8-10, will be the seventh meeting for the organisation since its establishment and the fifth since the four BRIC countries were joined by the Republic of South Africa. Until recently, the BRIC countries were united only in the imagination of former Goldman Sachs economist Jim O’Neill, who created the abbreviation in 2001 to define the fastest-developing economies in the world and to offer his clients new investment opportunities (the bank immediately began offering portfolios contain-

ing the four countries’ securities). Russia has special relations with BRICS. It was Moscow that breathed political life into the BRICS stock exchange chimera. Back in 2006, on the initiative of Russian president Vladimir Putin, the first ministerial meeting of the BRIC countries was held in New York. Then in May 2009, in Ekaterinburg, Putin’s successor Dmitry Medvedev hosted the bloc’s first summit. Even though there were no concrete results from that event, it had an important propaganda effect for Russia: relations with the West at the time were at a low and Moscow demonstrated to the US and the EU that it had other influential partners.

In recent years, the organisation has expanded its field of activity. Besides the political image, it also began creating new international regulations. For now, BRICS is most famous for its attempt to create an alternative to the Bretton Woods international finance architecture, which is dominated by the West. However, in 2014, when it finally became clear that the US Congress had blocked the IMF reform approved by the G-20 concerning the redistribution of votes in favour of the developing countries, BRICS participants agreed to create their own bank and a pool of national currencies. In the future, this should help reduce the dependence of international finance on the dollar-euro

duopoly. So far these have been BRICS’s main achievements. A key challenge to BRICS’s effectiveness is the specifics of its bureaucratic system. BRICS is perhaps the only association in which the leaders’ summits do not represent the crowning of the presidency, but rather its beginning. Thus, one country prepares the agenda throughout the year, while another country made the decisions. Due to a lack of synchronisation, many initiatives remained poorly developed. Russia decided to put an end to this. Russia’s presidency formally began in May, meaning it has less than three months to set up the summit; the 2016 summit in China will be the result of a fully fledged year-long presidency. Already within the framework of its management, Russia is doing its best to expand the agenda: The Kremlin has asked all federal agencies to present their proposals concerning cooperation with BRICS. As a result, the Ufa summit’s agenda has a total of 130 points. In Ufa, the Russian administration will have an opportunity to present the country as a leader of the non-western world. Presidency of BRICS will allow Moscow to position itself as a participant of an association that offers an alternative to the global world order. In the company of the largest economy in the world and the dynamic leaders of South Asia, Latin America and Africa, Moscow can confidently say that it does not intend to return to the G-8. Alexander Gabuev is director of the Russia in the Pacific Rim Region programme at Moscow’s Carnegie Centre.

CONVERGENCE OF INTERESTS Vitaly Naumkin EXPERT

he rapid advance of radical Islamist terrorist groups represent a threat both to Russia and the United States, but they have mostly asymmetrical interests in the region. The US, not to mention its allies, still remains a major buyer of Middle Eastern oil; a number of states in the region are strategic partners of the US, having signed bilateral security and defence treaties, so there are Amer-

US-Russia cooperation is affected by a number of constraints ican military bases there. Russia has none of these. On the other hand, Moscow cooperates both with countries that have a difficult relationship with the US and with some of its partners, like Turkey. On the whole, Moscow arguably does not have any vital interests in the Middle East. Accordingly, Russia and the US do not have any serious contradictions there, even if their administrations have different takes on certain regimes and events. Hypothetically, this could create an opportunity for both countries to cooperate in the areas where they have common interests. But what are those common interests? First and

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foremost, there is of course the need to fight international terrorism and extremism. Russia and the US both want stability in the Middle East. Even if Washington, as many believe in Russia, has actually been seeking to create “controlled chaos”in the region, I do not think this would correspond to the long-term interests of the US regime change in the countries that are hostile to (or not controlled by) Washington, as it would create problems for the US, rather than advantages. However, US-Russia cooperation, even in the areas of common interests, is affected by a number of constraints.The main one is the deplorable state of bilateral relations and the resulting deep mistrust between the two governments. Even once the Ukrainian crisis is settled, the situation is unlikely to change significantly. On one hand, the US supports several Islamist groups considered“moderate” in some Arab world countries that suffer from terrorism. In turn, Russia believes these groups are almost as dangerous as the al-Qaeda branch operating in Syria and Lebanon. Abridged. First published in Russian in Kommersant Daily Vitaly Naumkin is the director of the Institute of Oriental Studies of the Russian Academy of Sciences.

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Science&Tech

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Space The problem of space debris may have consequences for space travel and even for the Earth’s climate

New strategies to clean up space ARAM TER-GHAZARYAN

cecraft, causing serious damage. A two-centimetre piece of debris can completely destroy a spacecraft. If even a grain hits a piloted spacecraft, it will cause depressurisation and the death of astronauts.”

SPECIAL TO RBTH

In 2017, the ISS will set up the Extreme Universe Space Observatory, which will monitor space debris. If the project proves successful, the scientists will develop a laser gun. It is expected to fuse dangerous particles from a distance of about 100 kilometres and then direct them towards Earth where they will burn up in the atmosphere. The project was developed by the Riken Computational Astrophysics Laboratory of Japan. Scientists believe that lasers represent just one of the possible way to clear low Earth’s orbit of unwanted particles. Russia is planning to create the Liquidator satellite scavenger by 2025, which will remove parts from defunct satellites. The Lomonosov satellite, which will observe space debris, is set for launch in December 2015. Space debris flies at a speed of about eight kilometres per second. “The problem is very pressing,” Alexander Zheleznyakov, a scientist at the Tsiolkovsky Russian Academy of Cosmonautics, told RBTH. “In recent years, small pieces of debris often hit spa-

Where does orbital debris come from? Scientists around the world are trying to solve the problem of space debris. According to Ivan Moiseev, the scientific director of the Space Policy Institute, until recently, Russian and American space services were trying to track the movements of debris pieces during launches of spacecrafts or to correct their orbits.“The laser is useful because it can heat up the debris,” Moiseev says. “When it starts evaporating a jet thrust is created. The debris flies towards the Earth’s atmosphere and burns up in it.” The space debris issue became particularly acute after the collision of satellites Cosmos-2251 and Iridium 33 in 2009. The incident literally “showered” low Earth orbit with debris at an altitude of 700900 metres. Scientists have counted tens of thousands of large fragments of a few centimetres in size and millions of smaller ones. Another case that seriously complicated the work of space services was an experiment by the Chinese military after they

STEPS OF THE ACTION PLAN

In 2017, the ISS will set up the Extreme Universe Space Observatory, which will monitor space debris. If the project proves successful the scientists will develop a laser gun.

Scientists believe that lasers represent just one of the possible way to clear low Earth’s orbit of unwanted particles. Russia is planning to create the Liquidator satellite scavenger by 2025, which will remove parts from defunct satellites.

The Lomonosov satellite, which will observe space debris, is set for launch in December 2015. Space debris flies at a speed of about 8 km/sec.

The Earth is surrounded by space debris and scientists are looking at ways to deal with it.

shot down their own weather satellite in 2007. “The fragments of the missile and the satellite will always revolve around the Earth,” Moiseev says. He believes that in order to prevent similar disasters in the future, it is necessary to introduce a legal framework for regulating space. Additionally Moiseev thinks that the countries participating in the ISS project should agree on how to share the costs of a laser gun being deve-

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The International Space Station (ISS) may soon be equipped with a newly developed laser gun to help protect it from space debris.

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SIBERIAN SCIENTISTS DEVELOP MEDICINE FOR STROKE AND HEART ATTACKS

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loped by Japanese scientists. “Until a decision is made, nothing important can be done,” he adds.

The situation is close to critical The problems associated with space debris have been studied since the early 1990s. Back then scientists from the US and the Soviet Union had already prepared a number of major forecasts that are starting to come true. According to some experts,

the situation is gradually getting out of control. “It is thought that the amount of debris will be critical when it will start reproduction [of debris] on a mass scale,” says Yury Zaitsev, head of the Institute of Space Research. “We are now at a level that can be called close to the critical point.” According to Professor Andrey Nazarenko, author of the book “Space Debris Modelling”, debris fission causes a dangerous process

when fragments collide at high speeds.“Measures such as lasers are local,”says Nazarenko.“They can solve the problem of safety for one spacecraft or satellite. According to our estimates, in some 200-300 years, humans will not be able to launch spacecraft because space debris will form rings similar to Saturn’s rings around the Earth. Our planet would simply be constrained by these small particles. It is possible that this could lead to serious climate changes.”

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ASTROPHYSICS ASTRONOMERS HAVE FOUND WATER MOLECULES IN A DISTANT GALAXY

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Cosmodrome 60 years after Baikonur, Russia is building its own facility

Automation Military and civilian use

Developers plan underwater robots in the Far East

Taking off into a new future

By 2017 Russian technology producers are planning to create Russia’s first cluster for designing underwater robots for civilian and military use. DARYA KEZINA RBTH

FOTOSOYUZ/VOSTOCK-PHOTO

An RBTH correspondent visited the Baikonur Cosmodrome, which marks its 60th anniversary in June, and the newly built Vostochny Cosmodrome. ALINA POROSHINA SPECIAL TO RBTH

Baikonur was the first cosmodrome in the world and to this day it remains the largest. Yuri Gagarin became the first human to journey into space after launching into the cosmos from here. After the collapse of the USSR, Baikonur ended up in a different country – Kazakhstan. Russia continues to lease the facilities. In 2004, the presidents of the two states signed an agreement extending the contract through 2050. In 2007, Russia decided to build a cosmodrome on its own soil. The new site for the ambitious plans will become the Vostochny Cosmodrome in the Amur Region in Russia’s Far East. Many await the completion of its construction.The Russian Space Agency (Roscosmos) is waiting, as are those that dedicated their life’s work to Baikonur.Years ago, they left everything to come here and start their lives over from scratch. They are somewhat anxious, as they don’t what lies ahead for them. I went to Vostochny before flying to Baikonur. My flight from Moscow to Blagoveshchensk was in the evening. At the airport, we got into cars and drove along a bumpy road for another four hours to the

distant city of Uglegorsk. Black squirrels and grey hares keep running across the road. We made a stop on the steep banks of the Zeya River. The panorama that unfolded before me took my breath away. The next day we went immediately to the Vostochny construction site, 20 minutes along the road through an absolutely blinding sandy cloud of dust. The construction workers, already accustomed to inspections, paid no attention to us. “And what did you come to see?”a grey-haired friendly man asked us when he met us at the facility. “There is nothing in here, only a fence, sand, dogs…” However, the launch pad already loomed through the sand. And the first buildings of the future city Tsiolkovsky are rising in the village. A new space story is being written here. TheVostochny Cosmodrome is supposed to ensure Russia’s independent access to space. In time, it is slated to become a major centre for space research and create new opportunities for the development of the Russian Far East and give a new impulse to the Russian space industry. However, the date for the cosmodrome’s opening keeps getting pushed further into the future and the process itself is accompanied by scandals tied to the waste and embezzlement of construction funds. Before embarking on my flight to Baikonur, I had to write so many letters and send so many requests to

so many different government offices that all the joy of the upcoming trip nearly evaporated; every step was coordinated. Approval had to be obtained for each little detail and my mobile phone never stopped ringing. We flew for just over three hours. The view did not change for the entire last

Over half of the world’s first space launches were made at the Baikonur Tatyana is prepared to relocate to the distant Amur Region and start everything all over hour of the flight. We land on the steppe. We go through many security checkpoints.“Tatyana, I understand that everything needed to be checked in the 1960s. But there probably aren’t any cases of espionage now, are there?” I say after yet another document inspection.“You are wrong in thinking this way. All sorts of things happen here,” Tatyana replies. Seeing my eyes grow wide, she lets it be known that no details will be given out. Finally, we reach the entrance to the city. A wistful camel stands at the gate. As soon as we get through the security checkpoint, to the left and to the right,

green trees begin to flash in view, as if we have entered a new climate zone. The city has one foot in the USSR. It is seen in everything – the central market, the signs, the lack of 24-hour cafes. Half the city is dressed in the same uniform. They all work at the cosmodrome. Over half of the world’s first space launches were made at the Baikonur Cosmodrome. Among the many aircraft sent from here were the manned spacecraft series Vostok, Voskhod and Soyuz; the Salyut space stations; Mir; the reusable Energia–Buran system; interplanetary spacecrafts; and scientific and military satellites.To this day, Baikonur is among the world leaders for launches per year. Tatyana accompanies me for all three days in Baikonur. “You know, I am 43,” she says.“And I don’t know what’s ahead. Everything is here. My whole life is here. I understand that no one will take us there - to Vostochny. I don’t know what will happen to us. Although they have said that they won’t give up on Baikonur until 2050…”Tatyana looks at me. I remain silent and am surprised by her worries. She is prepared to relocate to the distant Amur Region and start everything all over. Again. There is an extraordinary pitch-black sky over Baikonur. And there are extraordinary people working there, people who lit up and still light up the stars of Russia’s space history.

Developers of underwater robots in Russia’s Far East want to unite into one professional cluster. They plan to create new robots that would be able to spend months underwater carrying out challenging missions and even replacing divers. They could be used for both military and civilian objectives, including shelf and geological exploration. According to developers, underwater robots may be available in the Asia-Pacific market in the near future. The most promising foreign partners in the creation of robotic systems are India, China, South Korea, as well as a few potential collaborators in Southeast Asia. The initiator of the Primorsky Cluster was the Concern MorinformsystemAgat JSC.The company has been developing automatic managing systems for the Russian fleet for over 60 years. Within the framework of the cluster the developers also plan on creating a system that will help to control robots from a great distance. “The marine robotic system will be constructed in modules, which will make it universal,”said MariaVorobieva, MorinforsystemAgat’s press secretary. The developers hope that the cluster will assist in the defense capability of Russia’s Pacific Region. “With the help of our partners, we plan on creating a comprehensive solution, one that will be used for defending Russia’s borders and economic interests, as well as for civilian use,” added Vorobieva. Twenty Russian enterprises are planned for the cluster, including the Tetis group, Okeanpribor and Gidropribor Underwater Armament. In total the asso-

ciation will be supported by more than 100 industrial and scientific organisations. Several specialised scientific-research institutes and production enterprises already operate in the Far East. For example, the Institute of Marine Technology produces apparatuses that are used in the North Sea, Black Sea and the Pacific Ocean fleets. This institute created the Klavesin-1R robot, which is capable of submerging to a depth of 6,000 metres. It proved its usefulness on the Arctic seabed, where no other robots or technologies can function due to the low temperatures. Klavesin-1R helped scientists gather proof that the Lomonosov Ridge in the Arctic Ocean is a continuation of Russian territory. Currently, the robot is being used by the Russian Ministry of Defence. One of the world’s most experienced underwater robotic technology teams works at the Far Eastern Federal University.With the cluster’s help the university hopes to create underwater autonomous and remote-controlled robots that will extract oil and monitor the ecological situation and security matters. Despite the great potential of these Russian scientists and the robots’ developers, their innovations are not breaking into the market quickly enough. Problems exist related to the marketing and commercialisation of the already completed models. The initiators of the Far East cluster hope to solve this problem. “In order for these underwater robots to catch on first of all a strong industrial partner will be needed, one that would help bring the idea to the level of an authoritative model with large industrial potential,” says Tskhe. “We have high expectations for the cluster because its aims are the commercialisation and promotion of Russian developments.”

RUSSIA BEYOND THE HEADLINES

Culture

A global media project, sponsored by Rossiyskaya Gazeta (Russia) www.asia.rbth.com

Animation In an era when following Western trends was frowned upon, home-grown creativity was the alternative

In 1969 in the USSR, things like rock music, fashion magazines, hippies and other cultural trends that were flourishing in the West were considered hostile and were accordingly banned from official media. But it seems Soviet animators may have reasoned that if they couldn’t do it in real life, at least they could make a cartoon of it. And so animated rock opera The Town Musicians of Bremen was born. The Troubadour wears a Beatles haircut, flared pants and a disco shirt with pointed lapels; his love interest, the Princess, sports a mini dress straight out of the latest fashion magazines, and they sing together: “Our carpet is a meadow, our walls are trees, our roof is the bright blue sky! The glittering walls of palaces will never be a substitute for our freedom”. In fact, everyone born in the USSR knows this“hippie-esque” song.

2. Nu, Pogodi! (Just You Wait!) Soviet children had their own Tom and Jerry, only instead of a cat and mouse, they had a wolf and a hare. This is Nu, Pogodi!, once the most popular animated series in the Soviet Union. The plot is simple: The Wolf (just Wolf, no given name) tries to catch the Hare. However, Nu, Pogodi is anything but a Tom and Jerry clone. Of course, it’s a slapstick comedy with chases and comic falls, but social satire is also involved: The Wolf is a caricature of the kind of“hooligan” disapproved of by Soviet society. He smokes, drinks and wears stylish clothes – like a Hawaiian shirt or bell-bottom pants. The Hare, on the other

Best-known cartoon characters

TASS

1. The Bremen Town Musicians

Soviet-era animation is still regarded as national heritage.

The Bremen Town Musicians The Troubadour wears a Beatles haircut, flared pants and a disco shirt with pointed lapels; his love interest, the Princess, sports a mini dress out from fashion magazines...

SPECIAL TO RBTH

Nu, Pogodi! (Just You Wait!) The plot is simple: The Wolf (just Wolf, no given name) tries to catch the Hare. However, Nu, Pogodi is anything but a Tom and Jerry clone.

TASS

ELENA KORENEVSKAYA

Complete the picture with the Rooster in disco glasses, the Ass in its silly cap, and lute-shaped guitars for everyone, and there you have early 70s pop culture in one children’s cartoon. No wonder everyone loved it, and even now The Town Musicians of Bremen remains one of the most loved and most well-known Soviet animated films. All the male parts (except for the Ass) in The Town Musicians of Bremen are sung by one man – actor Oleg Anufriyev.

Gena the Crocodile It is a story of the friendship between the title character, Gena the Crocodile, who has a steady job working at the zoo, and Cheburashka, a fluffy animal with big ears.

KINOPOISK.RU

In the USSR, animation was a huge cultural phenomenon. RBTH has compiled a selection of the most cherished examples of the genre.

Cartoon characters who left their mark

The Mystery of the Third Planet The Mystery is an animated movie with a complicated detective plot involving spacetravel, intergalactic criminals, various aliens and robots.

hand, is a model Soviet teen – modest, engaging in sports activities, always eager to help others. But, as a typical Soviet teen, the Hare is also very cunning and loves to play harsh pranks, mainly on the Wolf. The cartoon scarcely has any dialogue: Just remember that“Nu, Zayats, pogodi!”,the Wolf’s catchphrase, means “Just you wait, Hare!”, and you are all set. But don’t turn off the sound completely: in Nu, Pogodi you can hear popular music of the time, including the Western tunes that Soviet people had no chance to hear on the radio. The Nu, Pogodi! franchise is still active, with the latest series released in 2012, although only the 16 series made in 1969-1986 are considered classic.

3. Gena the Crocodile Gena the Crocodile is a three-episode stop-motion animated film that holds a kind of cult status among Russians. It is a story of the friendship between the title character, Gena the Croco-

dile, who has a steady job working at the zoo, and Cheburashka, a fluffy animal with enormous ears who has arrived in the Soviet Union from Africa in a box of oranges. The plot is simple and sweet. The characters, even the bad ones like the old crone Shapoklyak and her pet rat, are excessively cute and the soundtrack is perfect. Gena’s song about his birthday (which you can hear in Episode 2, Cheburashka) has become a Russian classic. Since 2004, Cheburashka himself has become an official mascot of the Russian Olympic team. But the series’ fame has spread even wider. A Japanese animation studio recently remade two episodes of the show: One features Cheburashka in an original story and other one is a direct remake of the Soviet series.

4. The Mystery of the Third Planet Writer Kir Bulychov was enormously popular in the USSR for his children’s science-fiction novels about Alisa, a schoolgirl from a hi-tech communist future. The Mystery of the Third Planet is a 1981 adaptation of his novel. The Mystery is an animated movie with a complicated detective plot involving space-travel, intergalactic criminals, various aliens and, of course, robots. But there is more than just an intricate storyline to this film: like The Town Musicians of Bremen it represents its era in a nutshell. The Mystery has almost all that early 80s pop culture can offer. Check out the wonderful electronic progressive “outer space” soundtrack, the bright disco colours and the overall futuristic feeling of the film.

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RUSSIA BEYOND THE HEADLINES

Literature

A global media project, sponsored by Rossiyskaya Gazeta (Russia) www.asia.rbth.com

Legend A devoted family man in his lifetime, the literary lion engenders the same loyalties from his descendants

Tracking down Tolstoys

Russian TV presenter Fyokla Tolstaya.

Vladimir Tolstoy is Leo Tolstoy’s great-grandson.

PHOTOXPRESS

The importance of family values was a theme that Leo Tolstoy explored thoroughly in his work. His novel Anna Karenina presents the idea of family as something almost sacred, and one of the central characters in War and Peace, Countess Natasha Rostova, who is first depicted as a flighty and rather promiscuous girl, later finds real happiness with her family and her children. Tolstoy’s autobiographical trilogy, which comprises the novels Childhood, Boyhood and Youth, also revolves around his relationship with his relatives. A devoted family man, Tolstoy had 13 children. Four died either in infancy or early childhood, while the rest mostly left Russia in the aftermath of the Russian Revolution. During Tolstoy’s lifetime, all his family members contributed to the dissemination of his literary work and legacy, a devotion that continued after the author passed

PHOTOXPRESS

RBTH

Tatyana Tolstaya, granddaughter of Alexey Tolstoy.

Great-grandson of the writer, Pyotr Tolstoy.

Tolstoy TV

VOSTOCK-PHOTO

ALEXANDRA GUZEVA

The Tolstoys can claim to be the second-largest family from the Russian nobility, after the Romanovs. Leo Tolstoy has around 400 descendants.

for future generations. I think we still do not fully comprehend the depth of what has been done,” says Vladimir Tolstoy. “By creating an electronic version of his complete works, we actually fulfilled Leo Tolstoy’s will – we made his work accessible to everyone,” says another greatgranddaughter of the novelist, famous Russian TV presenter Fyokla Tolstaya, who managed the project. According to Fyokla, Tolstoy represents one of Russia’s “international brands”,and she is engaged in promoting his novels.

This picture of an elderly Leo Tolstoy and his children was taken at his estate, Yasnaya Polyana, near Moscow.

away. Tolstoy’s wife, Sophia Andreyevna, copied – by hand, no less — War and Peace in its entirety numerous times; in 1917 his eldest daughter Tatyana became the first director of his memorial museum,Yasnaya Polyana, while his other daughters Maria and Alexandra were his aides and authorised representatives.

The Tolstoys today

asia.rbth.com/literature

According to tolstoys.ru, there are currently almost 400 descendants of Leo Tolstoy living in different countries. Quite a few of them continue their famous ancestor’s work, preserve his legacy and study his work. One of them is Vladimir Tolstoy, 52, who is Leo Tolstoy’s great-grandson. During the 1990s, he wrote several articles to notify the public about the illegal log-

ging taking place on the grounds of theYasnaya Polyana estate, and in 1994 he was appointed the museum’s director. Under his management, Yasnaya Polyana was revived and transformed into a major cultural centre. Incidentally, it was Vladimir Tolstoy who organised the first convention for Leo Tolstoy’s descendants in 2000, returning the family members to their roots. The convention has since become a traditional event and is held on the estate every two years. In 2012,Vladimir Tolstoy became President Vladimir Putin’s cultural adviser, while his wife, Ekaterina Tolstaya, took over the role ofYasnaya Polyana’s director.

Fulfilling Leo Tolstoy’s will When 2015 was designated

the Year of Literature in Russia, Vladimir Tolstoy was invited to join its organising committee, an appointment that came off the back of his organisational role for 2014’s All Tolstoy in a Single Click project, which was one of the major literary events of the year. The project involved digitising the complete works of Leo Tolstoy – comprising 90 volumes, including the writer’s letters and diaries – to make them available online free of charge. Several thousand volunteers from all over the world took part in the initiative, helping to proofread the digitised material. “The work was presented as like a game, a competition of sorts: Participants tried to do more than the others, proofreading as much as they could. It was a tremendous contribution

Yet another great-grandson of the writer, Fyokla’s second cousin Pyotr Tolstoy, is also a TV celebrity: He presented Russia’s main evening newscast, Vremya, which aired on Channel One, from 2005-12, and also hosted his own programme, Tolstoy: Resurrection, a reference to Leo Tolstoy’s novel of the same name. Pyotr is a member of the Civic Chamber, a government body charged with coordinating the interests of citizens and authorities. Pyotr says his famous name has never helped or hindered him, but he did jokingly admit in one of his earlier interviews that it made his army service somewhat more difficult, as his army buddies sometimes refused to give him a hand, saying, “No, Tolstoy, you’re not getting anything from us, we got fed up with your grandpa back when we were in school.”Tolstoy’s works, including War and Peace, one of the longest novels ever written, are required reading in Russian schools.

Another popular author Another famous member of the Tolstoy family is Tatyana Tolstaya, granddaughter of the famous Soviet author Alexey Tolstoy, a distant relative of Leo’s. Even though she is not a direct descendant of Leo Tolstoy, she is a talented author in her own right. Her most famous work is the post-apocalyptic novel The Slynx. Just like some of her relatives, Tatyana is also a famous TV personality in Russia: Up until 2014, she hosted The School for Scandal, a popular talk show loved by Russian intellectuals.

RUSSIA BEYOND THE HEADLINES

Literature

A global media project, sponsored by Rossiyskaya Gazeta (Russia) www.asia.rbth.com

Contest Russia declares 2015 as the Year of Literature

IRINA VINOKUROVA RBTH

Russia has declared 2015 as theYear of Literature. As a part of it, the Russian Embassy in Thailand, in cooperation with the Thammasat University, held a short story contest that required participants write essays about paintings by celebrated Russian artists. A choice of three works – In the Vast Blue Skies by Arkady Rylov, In the Garden by Vladimir Pervunin-

sky, and Day and Night by Elena Zharskaya – was offered. The jury headed by Professor Yodboon Loesrit selected the winner ahead of Russia Day, celebrated on June 12. First place went to a story written by Phisit Churothong on Rylov’s painting. The People’s Choice Award determined by Facebook voting went to a story by Chalemchai Sriphanlom on Pervuninsky’s work.

Be a free spirit and fly to your freedom PHISIT CHUROTHONG CONTEST WINNER

You want to know about something, you’ve got to check it out yourself. If you don’t open your mind, your vision, if you don’t develop your own sense of things, you will never know them. All things in the world have many sides and many colours no matter if you see them at the moment or not. Some things are locked in frigid frames of everyday rules and routines. The frames are like cages – inflexible, impossible to expand. But not everything in the world can be caged. If you dare to break out of the cage, you will gain a new vantage point, you will see a different, much clearer view of things around you, and that is why breaking out of the cage is something worth doing.That is the way you discover the meaning and the value of freedom. Look at the sky and think.You will see, the space up there is vast, it has no limits. Whichever angle you choose to look from, you can’t see it all at once. Has it ever occurred to you that you should try to get away from the rules and routines, from the cage in which your

spirit dwells today? That there are many things you won’t ever learn about if you don’t touch them, if you don’t get that taste of something new and different? Try breaking out of the cage, try shaking off all things that fix you in place, and crushing the frame into useless dust! Start anew, from scratch, from whatever you find in your mind. A quest in search of your

The bird will take up those physical and mental exercises which, in the end, will give it freedom. own, very individual freedom is the best gift life can give you.You don’t have to live in a cage! Nature doesn’t. Freedom lives in the very fabric of Nature, and no one can ever rob Nature of its freedom. There are lots of new places waiting for you out there. But you look like a bird that is, for some reason, unable to fly. The only way for the bird to act is to train its body, teach it to sing in unison with its already airborne spirit, so a habit of cooperation be-

FROM PERSONAL ARCHIVES (2)

Translating legendary paintings into words

In the Vast Blue Skies by Arkady Rylov.

tween them could form, and the ability to fly will follow. Then and only then the bird will learn how to fly in a way that befits it. It will fly wherever it needs to fly. The bird has freedom, and its freedom is the essence of being a bird because Nature created it that way. The bird will take up those physical and mental exercises which, in the end, will give it freedom. That is much better than idling and gradually forgetting how to fly. The bird thus discovers a new faculty in itself: the urge and ability to look for new things. It cracks the world wide open for its own beholding, and it doesn’t have to be afraid of being alone in it, for there are myriads of other birds out there, all in search of their own freedom. A blink of an eye, and we see them flying in formation, flying together, a single common purpose evident in their flight, not one of them ever to be lonely again. Free spirits, every one of them, the birds yet can become not simply fellow travellers but parts of a whole – a flock purposefully gliding across the blue vastness of sky. All this is priceless experience for the bird, the experience of discovering new things. Not all is easy for the bird, there are always obstacles in its way... The text is abridged

In the Garden by Vladimir Pervuninsky.

The spirit to take to war CHALERMCHAI SRIPHANLOM CONTEST WINNER

Man is born imperfect. Lust, greed, anger, inner demons and desires – everyone has them since birth. These flaws are the reasons for war. There hasn’t been a century without wars in human history. These flaws make humans kill each other in order to achieve peace and safety for themselves and their own, or in pursuit of a more comfortable living. War is a thing that no one wants to happen, but it is also a thing no one can prevent from happening or avoid it when it does. That is why among human occupations there is such a profession as soldier, defender of country and tackler of troubles, the profession of being a brick in the great wall that defends the nation. All men have to take up that profession and serve in the Armed Forces at some point in their lives, and many men become career soldiers. But only his battles and victories can turn a mere man in uniform into a real soldier, a hero who brings fame to his family. Even if he dies in battle, a real soldier doesn’t lose his honour or shed his dignity. A real soldier is a gentleman and a

generous human being who sacrifices himself for the peaceful life of his people. At war, a soldier’s life is always hanging by a hair. Sometimes in combat he has to face enemy weapons of all kinds, all targeting him alone. A soldier expects to be wounded and have scars. For his wounds he would need medicines but no chemical or herbal drug can be as good a balm for the wounds as the soldier’s own spirit, his own heart, when love dwells in it.

A real soldier is a gentleman ... who sacrifices himself for the peaceful life of his people. His Lady-love, gracious and gorgeous, with clear and beautiful eyes full of love, silk-soft skin, with the hands that pour the warmth of love upon the soldier’s heart. By beaming the light of her love on him across great distances she will help the soldier overcome the enemy and return alive. Return to his home, where the spirit of love fills the rooms, to this garden that would live in his memory throughout the war, a silent witness to the promise he is now giving to his Lady: ‘I will

come back to you, my love’. She looks at him, worried about the dangers he would have to face in the war, somewhere in a far-off alien land. She will wait for him to come back. No one can predict when he will return. Only memories of being together, memories of love will be there to sustain her will to live and wait for months or maybe for years. On the day he goes to war she cannot and doesn’t want to contemplate the possibility that he may not be coming back. Her loving soul is full of pride for her soldier, and she is prepared to fortify his spirit for the oncoming fight with her love and faith in him, so he can stand like a wall in the way of the enemy of his country and his people. They both are trying to delay the time when they have to say their goodbyes; they want the final moments of parting to last longer. They look at each other and the best moments of their life together pass through their minds like photographic images, frame by frame. Let’s hope that there will be a day for these two people when these pictures turn back into everyday reality of their lives once again.

RUSSIA BEYOND THE HEADLINES

Cuisine

A global media project, sponsored by Rossiyskaya Gazeta (Russia) www.asia.rbth.com

Dessert Loved by some, hated by others, it was often the third course

Expatriates Catering to niche crowd

Kissel — The juice that pretends to be a meal

Small-scale units in Pattaya process Russian products

ANNA KHARZEEVA

Why would anyone ruin perfectly good juice by adding starch to it? And why was it everywhere in the Soviet era? Read about Russian kissel. ANNA KHARZEEVA SPECIAL TO RBTH

Every Russian child has a few strong dislikes – for some, it’s the Russian-language school teacher; for others, it’s having to wear tights under pants in the winter. For me, it was kissel. Kissel is like berry juice with starch in it. It was the gooey, disgusting, omnipresent nightmare of my childhood. It was impossible to avoid kissel. It was always served in the cafeteria in my kindergarten. I remember having lunch at my best friend’s house and her mum putting a glass of kissel in front of me at the beginning of the meal. It would stare at me the entire time I was eating my soup and bread, trying to figure out how to disappear from their

apartment on the 15th floor before it was time to have “dessert”. Finally an hour or so after lunch was over, my friend’s mum would realise I wasn’t going to even touch it and would kindly put it away. One of the major perks of being a grownup is that kissel is officially out of my life. No more kindergarten cafeterias, no more awkward meals at friends’ places. I was living the dream – until I realised that I couldn’t cook my way through the Soviet cook book without making it. Kissel was a crucial part of the Soviet diet. Granny agreed:“Kissel was everywhere – in every cafeteria, and in the shops you could buy all sorts of varieties. They were ready made, too, sold in solid bricks – you just had to add water.” My brother shares my hatred of kissel, unlike our mother and grandmother, who love it. My mum would apparently finish all the other kids’ kissel when she

RECIPE

Classic kissel Ingredients: 1 cup cranberries; ¾ cup sugar; 2 tbsp starch. Wash the berries with hot water then crush with a pestle or a spoon. Add ½ cup boiling water, rub through a sieve and squeeze through a cheesecloth. Set the juice aside. Put the berry remnants in a pan and add 2 cups of water. Put on the stove and boil for 5 minutes. Then strain and keep the juice. Add sugar to the juice and boil again on the stove until the sugar dissolves. Add starch and boil, stirring, until starch dissolves and mass has thickened. Add the reserved juice to the thickened mixture and stir well.

was in kindergarten. Why, why wasn’t there someone like my mum in my kindergarten? Approaching the recipe for kissel, I tried to be open m i n d e d . M ay b e a p proaching it again as an adult, I wouldn’t find it offensive at all. Maybe I could even tolerate it. But, as it turns out, when it comes to disgusting things to eat, there is no room for open-mindedness. Granny was sweet and ate all the kissel we made together. I told her that I couldn’t understand why anyone would spoil perfectly good juice by putting starch into it and turning it into an inconsumable nightmare. Granny suggested this may have been a way to make it more filling – apparently if you have a glass of kissel, which of course I’ve never done, you’ll be quite full. She says it was the tea or coffee of the Soviet times – often served as“tretye,”or the third course. A friend of Granny’s, who spent part of her childhood in an orphanage because her father was killed when she was 6 and her mother was arrested, says kissel was a favourite of the kids, and indeed if any of the orphans did anything wrong, they wouldn’t get a glass at lunchtime. Granny says she doesn’t know anyone else who hates kissel as much as my brother and I do. I wonder if it’s because we grew up with too much choice.Would we have disliked it so much, for example, if we had grown up in an orphanage? In any case, I am happy to go back to my kissel-free life!

For those in Thailand with cravings for traditional Russian cuisine, a couple of small businesses in Pattaya are now producing Russian food locally. IRINA VINOKUROVA RBTH

A pack of ordinary frozen pelmeni (meat dumplings) can always be found even in the smallest shop in Russia, while the country’s supermarkets have a complete range of dumplings with all sorts of fillings. Russian expats and tourists, however, struggle to get their hands on comfort food and their favourite products such as

Russian expatriates struggle to get their hands on comfort food and their favourite products rye bread, buckwheat, tvorog (quark), gingerbreads and pelmeni. Russian shops and small production facilities in Pattaya are looking to meet this demand. Aram Bakery is run by a family from the Russian Far East.The Mkrtumian family moved to Pattaya from Blagoveshchensk, equipped a production facility and received the necessary certificates to deliver fresh products to supermarkets in Pattaya. They supply bread, sweet rolls, thin Armenian lavash bread, Russian gingerbreads, pastries and baklava. The bakery makes its products according to traditional recipes from natural in-

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gredients, avoiding the use of harmful additives, such as palm oil. “My wife is a physician by training, and we have two children,”the company’s director Aram Mkrtumian says. “We always carefully read the list of ingredients, when we buy them, for example, chocolate. And, of course, when we bake bread, cookies or any other product, we take care to make it not only delicious, but also high quality, and, of course, in no way harmful to the health of our customers.” The number of fans of Aram Bakery’s products is growing every day, and many come from Bangkok to stock their baklava and gingerbreads. People also arrive from Bangkok to stock up on other Russian food products. The Best Frozen Food Company manufactures and sells sour-milk products, spicy salted fish and frozen foods, such as varenyky (Ukrainian dumplings) stuffed with strawberries, tvorog and potatoes, baked pirozhki (stuffed buns), cabbage rolls, cutlets, Kiev chicken and of course, pelmeni stuffed with pork, chicken, beef and lamb. Their products also don’t contain harmful preservatives and additives. Recently, Best Frozen Food and Aram Bakery agreed on a partnership, and are planning to open a few small shops in Pattaya as well as a warehouse for shipping their products to Bangkok.

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