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Special Report The BRICS countries are developing an alternative to the IMF

Technology A cheaper and more reliable test to determine the gender of a baby

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Monday, August 31, 2015

International Cooperation between Moscow and Tehran will include nuclear technology and the supply of modern weaponry

Russia looking to boost ties with resurgent Iran after landmark deal

Russian leader Vladimir Putin met with Hassan Rouhani in July during the BRICS summit in the Russian city of Ufa. AFP/EASTNEWS

With the lifting of Western sanctions against Tehran imminent, Russia and Iran are preparing to push bilateral relations to a new level, with priorities focused on nuclear energy and military cooperation. DAVID NARMANIYA, ALEXEI TIMOFEICHEV SPECIAL TO RBTH

Russia and Iran are preparing to take bilateral relations to a new level once Western sanctions against Tehran are lifted, following recent talks in Moscow between Russian Foreign Minister Sergei Lavrov and his Iranian counterpart Javad Zarif. One of the central topics of the

negotiations, which took place on Aug. 17, was the realisation of the "Joint Plan of Action for the Iranian Nuclear Program,” with officials keen to underline during the course of the post-talks press conference that Russia will play a key role in the implementation of the agreement. As part of the deal, Russia will take charge of Iran’s reserves of low-enriched uranium in exchange for natural uranium and will help establish the production of stable isotopes at the Iranian nuclear facility in Fordow. Russia will also construct eight more nuclear plants in the Islamic Republic. "This is a very promising major

Russian analysts now see a more flexible attitude in Brussels' position on the conflict in Ukraine. avenue, which will strengthen Iran’s energy and at the same time provide for the full observation of the non-proliferation regime while respecting the right of Iran to a peaceful nuclear program,” said Lavrov. Meanwhile, cooperation is continuing in the economic sphere. Lavrov made it clear that Russia will use the new opportunities that

will open up through the realisation of the nuclear deal with Iran to develop business relations with Tehran. A special place in the plans is reserved for military-technical cooperation.“While according to the Vienna agreements, in the near future Iran will not be able to buy offensive weapons, there is an opportunity for developing collaboration in other spheres,” Vladimir Sazhin, a senior researcher for the Institute of Oriental Studies at the Russian Academy of Sciences, told Russian daily Rossiyskaya Gazeta. “In particular, we are talking about the purchase by Tehran of

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Antei-2500 mobile anti-aircraft multichannel missile systems, which will replace the already outdated C-300 anti-aircraft missile systems,” added Sazhin.

Moscow’s interests During a briefing for experts, Russian Deputy Foreign Minister Sergei Ryabkov underlined that the agreement on Tehran’s nuclear program reached by Iran and the P5+1 group of international mediators (the U.S., Russia, China, the UK, and France, plus Germany) corresponded to Russia’s national interests. By subscribing to the deal, Moscow was seeking to avoid the occurrence of a new conflict in the

Middle East, not wishing for a“further loosening of the regional situation.” According to Nina Mamedova, director of Iranian studies at the Institute of Oriental Studies at the Russian Academy of Sciences, besides eliminating the threat of an armed conflict involving Iran itself as a result of its nuclear programme, this could mean the Syrian conflict and the problem of Daesh radical militant grouping. “The new agreement between Iran and the West will allow the parties to forge closer positions on these conflicts,” she said. CONTINUED ON PAGE 2

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Politics&Society

GULF NEWS_MONDAY_AUGUST_31_2015

Terrorism More and more reports are appearing of young Russians who want to join the ranks of ISIS

Lure of radical groups reflects alienation of young Muslims

CONTINUED FROM PAGE 1

She added that as a result of Russia’s efforts, it had been possible to achieve “more favourable conditions for Iran,”which had made it significantly easier to reach an agreement and find compromise for all involved parties. Mamedova noted that the deal had also increased Moscow’s political heft in the eyes of the Iranian leadership, which broadened the perspectives for economic cooperation between the two countries.

nomenon of young people who grew up in secular Western families joining terrorist groups is rooted in the existential crises of youth. “If we are to speak about Karaulova, we will see that she tried to commit social suicide; that is, she attempted to completely delete herself from the society in

The case of a Moscow student who left her family to join Daesh has focused the attention of Russian society on the threat posed by religious extremists. OLEG YEGOROV SPECIAL TO RBTH

At the end of May, Varvara Karaulova, a 19-year-old Moscow State University philosophy student, left Moscow with a one-way ticket to Istanbul. According to her family, Karaulova planned to cross the Turkish border into Syria and join Daesh. The story made headlines in Russia, partially because Karaulova is ethnically Russian and grew up in a nominally Russian Orthodox family. Her father said that until recently, she would always wear a cross around her neck. Fluent in English and French, Karaulova was a student of Middle Eastern culture and Arabic. None of Karaulova’s family of friends can say exactly when her behaviour started to change, but over the past few months, she began wearing a hijab to her classes and reading books on radical ideology. On May 27, she left the apartment she shared with her parents in the afternoon and disappeared. While Karaulova’s story has some unusual elements, she is far from the only Russian national who has joined or tried to join radical groups. According to the Federal Security Service (FSB), in the year more than 1,700 Russians have joined religious extremist organisations.

Syrian problem at centre of attention

Russian scholars are quick to point out that the problem of young people travelling to join terrorist groups is not unique to Russia. Georgy Mirsky, a scholar of Arabic culture at the Russian Academy of Sciences, a said that large numbers of people in France are joining the ranks of ISIS, adding that the percentage of non-Muslim women in the country who had joined the radical group was 30 percent, though RBTH was unable to verify this statistic. According to Russian psychologist Pavel Ponomarev, the phe-

The Islamic issue Despite the press being given to Karaulova, she is an anomaly among Russians fighting for ISIS. I n M ay, t h e M e d u z a n e w s website published an interview with an ISIS preacher who said that “no fewer than 1,500 people — half of them Dagestani, and half Chechens — from the North Caucasus are fighting with the Islamic State.”Both of these regions are majority Muslim.

Varvara Karaulova was extradited from Turkey to Russia on June 11 after being detained by Turkish police.

Varvara Pakhomenko, a specialist on the Caucasus and a consultant with the International Crisis Group, believes that there are several reasons for the appeal of radicalism among Russia’s Muslims. The first is disillusionment with the government. This dissatisfaction with the authorities is reinforced by the authorities themselves, who often harass Muslims not for any crimes they have committed, but simply because of the way they look.“When people are persecuted not because they violate a law but because they wear long beards, the result is usually radicalisation even of the moderate Muslims,” Pakhomenko said.

An ongoing problem Varvara Karaulova’s mobile phone was tracked to a town near the Turkish-Syrian border, and she was apprehended there in early June with a group of 13 other Russians. She returned to Moscow on June 11. It is unclear if she will face charges. A source in law enforcement told sta-

REUTERS

The allure of extremism

TASS

According to the Federal Security Service, about 1,700 Russians have joined religious extremist organisations in 2014. which she lived and find a new identity in a different world. Students and other young people are going through a crisis: Society is not giving them a chance to express themselves, imposing harsh restrictions. The intention to free oneself from this society and obtain everything, and immediately, in a different system is so great that people are practically ready to give their life for it.” Mirsky says that the attraction of ISIS today is no different from that of other radical movements of earlier eras, such as fascism and communism: “There are neither any fascists nor any real communists today, but against the background of the dullness of everyday life, there is a big new movement — ISIS.” In Mirsky’s opinion, the real revelation of Karaulova’s case is that Russians have underestimated the threat radical ideology poses.“The most amazing thing is that everyone — her family, her friends — was indifferent. No one noticed anything until she disappeared. This is complete disorder.”

Russia looks to boost ties with resurgent Iran after landmark deal

Young people from dozens of countries are joining terrorist groups.

te-run news agency RIA Novosti that Karaulova could work out a deal with the authorities if she was willing to provide information about terrorist groups or recruiting organisations operating in Russia. The day before Karaulova returned, St. Petersburg local news site Fontanka.ru reported

that another young woman, Fatima Dzhamalova, a student of pediatrics at the First Medical University of St. Petersburg, had also left home to join ISIS, but had appeared to have changed her mind. After arriving in Turkey, she sent text messages home saying she regretted the move and asked for help.

One of the main topics discussed by Lavrov and Zafir was the situation in the Middle East. Answering a question about Russia’s position regarding the future of Syrian President Bashar Al Assad, Lavrov remarked that Moscow’s stance had remained unchanged since the beginning of the crisis and that the fate of the Syrian leader should be decided only after the settlement of the crisis. Interestingly, not long before Zafir’s visit to Moscow the Kremlin welcomed Saudi Arabia’s foreign minister Adel Al-Jubeir and representatives of the National Coalition for Syrian Revolution and Opposition Forces (on Aug. 11 and 14, respectively). This has given grounds for rumours about the possibility of Moscow playing the role of a mediator. Russia has on a number of occasions declared its aspirations to reduce the tensions in the region stemming from the events in Syria. Andrei Baklanov, Russia’s former ambassador to Saudi Arabia and now deputy chairman of the Council of Associations of Russian Diplomats, did not rule out that Moscow was trying to reduce tensions in Saudi-Iranian relations. However, according to him, Russia does not currently have the resources to play the role of mediator between Iran and Saudi Arabia. “Yes, down the line, in a certain set of circumstances, this is possible, but for the moment the necessary conditions for this do not exist,” he said. He added that Russia was indeed seeking to lower the temperature in the region:“Russia is proceeding from the position that relations between the two key regional players do not have to be focused on confrontation. And our leadership is taking measures accordingly. The results so far are unimpressive, though the general background of relations in the region may improve significantly if we continue working in this direction," he said.

Society Despite financial difficulties, thousands of Muslims from Russia intend to visit the holy sites in Saudi Arabia

Russian pilgrims prepare for the Hajj Dagestan, Chechnya, and Ingushetia send the largest number of Russian Muslims to Makkah and Medina. But Russian pilgrims are facing difficulties this year due to the fall of the ruble. VIKTORIA SEMIOSHINA

The Russian Hajj Committee has begun accepting applications from the country’s Muslims for the annual pilgrimage to Makkah and Medina. According to Rushan Abbyasov, first deputy chairman of the Council of Muftis of Russia, internal republics in the North Caucasus such as Dagestan, Chechnya and Ingushetia send the largest num-

EPA/VOSTOCK-PHOTO

RBTH

A pilgrim from Russia (L) looks on as he prepares to leave with his family after the last prayer of the day near the Great Mosque (Al Haram Al Sharif) in Mecca in 2011.

ber of pilgrims from Russia to Saudi Arabia. Tatarstan also sends a significant amount of pilgrims, he said, adding that there are even a few groups from Siberia and the Russian Far East. The Muslim holy sites became more accessible to Russians after perestroika. While pilgrims from Russia are more aware of the hardships of undertaking the pilgrimage, they still find the trip physically and mentally challenging, according to Rashid Al-Rashid, who works at the Russian Hajj mission. “The Russians are not as well prepared as pilgrims from Indonesia, Malaysia, Turkey, Iran,”said Al-Rashid, who has been accom-

panying pilgrims to Saudi Arabia for more than 15 years. He says the hot weather and large crowds tend to overwhelm Russian pilgrims. They also take time to adjust to Arabian cuisine.

Increasing costs The pilgrimage has become prohibitively expensive for many Russians this year since the ruble collapsed. The cost of a package tour has doubled this year and can be as expensive as $5,000, which is around half a year’s salary in some regions. “A couple of years ago, we had a long list of people willing to go, but this year, we had to run publicity campaigns to attract peo-

ple,” said Syed Muhammad from the Medina Travel agency. However, despite the drop in demand, the Hajj mission of Russia has requested the Saudi Arabian authorities to increase the Russian quota from 16,400 to 17,000. This is on account of Crimean Tatars, who previously travelled on Ukrainian passports, but are now Russian citizens. According to the last census (taken in 2010), there are around 14.5 million Muslims in Russia, forming about 10 percent of the population. Immigration from former Soviet republics has pushed up the numbers over the last few years, although there are no updated official statistics.

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Business&Economy

GULF NEWS_MONDAY_AUGUST_31_2015

Economy The IMF forecasts Western sanctions may end up costing Russia a significant portion of its GDP fell precipitously in late 2014 from over $100 a barrel to roughly half that value in just a few months.

IMF: Russian economy to lose 9% due to sanctions Economic sanctions imposed by the West may shave off almost a tenth of the Russian economy and restrain economic growth for years to come, according to a recent IMF report. DAVID MILLER SPECIAL TO RBTH

REUTERS

Sanctions linked to the conflict in Ukraine could end up costing Russia as much as 9 per cent of its gross domestic product, the International Monetary Fund said in a new report, adding that the country will struggle through recession this year before returning to“weak growth.” The IMF predicted Russia would undergo a 3.4 per cent economic contraction in 2015 and expand by only 0.2 per cent in 2016. Thereafter, the Russian economy will likely grow at a slow average rate of about 1.5 per cent per year over the medium term, the IMF forecast. “The dual external shock of lower oil prices and geopolitical tensions are key factors exerting downward pressure on Russia’s GDP in the near term,” the IMF said in a press release accompanying the report this month. The forecast presents a stark contrast to the rapid growth rates Russia experienced during the early years of President Vladimir Putin’s tenure in the mid-2000s,

when oil prices surged far above $100 per barrel and propelled the Russian economy to growth rates exceeding 8 per cent per year. In those heady days, Putin announced a plan to double the size of Russia’s economy within a decade, a goal that would have required sustained growth in excess of 7 per cent per year. But after being hammered by the 2008-2009 financial crisis, Russia’s nascent recovery was undone last year when the price of oil, Russia’s main export, collapsed, and the US and Europe slapped the country with economic sanctions over its role in the conflict in neighbouring Ukraine The IMF report suggests the damage from US and EU sanctions, if left in place, will have a significant and long-term impact on the overall Russian economy. “It is very difficult to disentangle the impact of sanctions from the fall in oil prices,” the multilateral financial organisation said. “However, IMF estimates suggest that sanctions and counter sanctions might have initially reduced real GDP by 1 per cent to 1.5 per cent. Prolonged sanctions may compound already declining productivity growth.” The authors of the report added that “the cumulative output loss could amount to 9 per cent of GDP over the medium term.”

The ‘lowest point’?

A weak national currency may encourage Russians to buy more local products.

The IMF noted, however, that the estimate is “subject to significant uncertainty.”

Ruble weakness

...but a weaker ruble may promote growth

The drop in the value of the ruble, Russia’s national currency, is likely to be one of the main drivers helping the country return to growth, the IMF said. A cheaper currency reduces the price of Russian products on international markets. “The recovery in 2016 will be supported by the ruble’s more competitive exchange rate, increasing external demand and normalisation of domestic financial conditions,” the IMF said. Russia’s national currency has fallen in tandem with oil prices from a rate of about 33 rubles per dollar to about 64 rubles per dollar as of mid-August. The price of crude oil, Russia’s key export,

ALYONA REPKINA

Russia’s economic decline accelerated in the second quarter of 2015, falling 4.6 per cent year-on-year after a 2.2 per cent decline in the first quarter of 2015, according to figures from the Federal Statistics Service in Moscow. The slump in the second quarter was worse than economists expected. Shortly before second-quarter figures were announced, Economic Minister Alexei Ulyukayev told reporters that the second quarter of this year would be the “lowest point”for Russia’s current economic downturn. Economists at Moscow brokerage Uralsib noted that within the second quarter, monthly statistics toward the end of the quarter appeared to be improving. “Most of the key indicators for Russia’s economy improved moderately [year-on-year] in June,” Uralsib analysts Alexei Devyatov and Olga Sterina wrote in a note to investors on Aug. 10, noting that key economic indicators like industrial production, manufacturing and capital investment fell less sharply in June than in May, while overall employment rose. Economists at Deutsche Bank predicted Russia's economy would decline by 3.2 per cent in 2015, saying that, “in our view, economic growth is likely to remain negative” going into the third quarter, with a fall of about 4-5 per cent. “Overall, the economic contraction was driven by the producer segment, especially in such areas as industrial production and construction,” Deutsche Bank economists Yaroslav Lissovolik and Artyom Zaigrin wrote in a note to investors following the release of the economic data. Western sanctions are aimed at Russia’s crucial energy, finance, and military-industrial sectors, cutting off companies’ access to international finance.

Energy Moscow keen to expand oil and gas business with the UAE, as well as developing nuclear power partnership

Oil firms boosting output despite low prices Moscow has emphasised its commitment to boosting oil and gas ties in the Gulf, as well as developing an active partnership with the UAE and other regional states in the nuclear power field. ALEXEI LOSSAN RBTH

Russian Energy Minister Alexander Novak said that the Russian budget for 2015 had been based on a price of $50 a barrel of Urals oil (which traditionally is traded slightly cheaper than Brent), $60 a barrel for 2016, and $65 a barrel for 2017. "Today the budget is balanced, however, we would like for the prices to be higher, especially considering that the value of the ruble largely depends on foreign currency earnings," said Novak. "The earnings of oil companies fell by 40 per cent throughout the world, but the ruble earnings of the Russian players remained at the same level as before due to the low value of the ruble," he said, explaining that Russia had planned to reduce the volume of oil production, but in reality production increased by 1.6 percent. In May 2015 Russia became the world's largest oil producer for the first time since 2010. Official data reports that Russian companies

Saudi Arabia produced an average of 10.25 million daily barrels in May.

Prices to remain stable in short-term

REUTERS

Despite the cost of crude on international markets, Russian oil companies are increasing production, according to Gazprom Neft CEO Alexander Dyukov. Speaking at the St. Petersburg International Economic Forum on June 18, Dyukov said that the price of $50-60 a barrel does not frighten Russian companies. “By 2020 our company alone plans to increase production by 33 percent by expanding geographically, for example into the region north of [the Arctic peninsula of] Yamal and to Eastern Siberia," said Dyukov. He added that the increase of production benefits from the use of modern technologies and the cheap ruble.

Reasons for growth

In May 2015 Russia became the world's largest oil producer.

According to IHS Energy and Power Consulting, gas consumption in the Gulf countries will reach 400 bcm by 2030.

produced 45.288 million tonnes of oil and gas condensate in May, which is 1.6 per cent more than in 2014. As a result average daily production in May reached 10.708 million barrels, slightly higher than the April figure of 10.67 million barrels. For comparison,

Shell CEO and forum participant Ben van Beurden predicted that the price of oil is set to grow to a level of "$79 plus or minus $10 a barrel" in the near future, dismissing the idea that a potential influx of Iranian oil would keep prices low. "If sanctions on Iran are lifted and the country increases its oil exports to 20-30 million barrels a day, it will not have a serious influence on the world oil market and on the cost of crude because demand is also growing," said van Beurden. Nevertheless, Russian Energy Minister Alexander Novak believes that the average annual price of oil in 2015 will be lower than in previous years: "The market opportunities are such that Brent prices will stay at a level

of about $65 a barrel," he said. Alexander Dyukov said that in the end, Brent prices at a level of $80 a barrel may suit both consumer and producer since low oil prices help increase investments in production, though he cautioned that “the longer the prices remain low, the likelier it is that prices will soar in the future,”saying that while that the short-term price will remain around $75 a barrel, in the future it may return to a level of $100 a barrel. In early June, OPEC decided to maintain its oil production quotas at the previous level – 30 million barrels a day. The decision saw oil prices dip slightly, accompanied by a consequent weakening of the ruble. The OPEC decision was expected, said Alexander Novak, since "any other decision would only have had a short-term effect. Today a decision to reduce production would mean that there would be more non-OPEC countries on the market," he said.

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Special Report

GULF NEWS_MONDAY_AUGUST_31_2015

BRICS FIVE COUNTRIES PUSH FOR CHANGE

Number crunching – comparing the BRICS economically

BRAZIL, RUSSIA, INDIA, CHINA AND SOUTH AFRICA AIM TO COORDINATE POLICIES AND DEVELOP COOPERATION

FROM ACRONYM TO ALLIANCE: BRICS Conceived as an abstract idea in a research note penned by Goldman Sachs, today the BRICS countries are out to prove they can change the world. ALEXEY LOSSAN RBTH

At first, BRICS was nothing more than a catchphrase dreamed up by an investment banker: an acronym grouping four large countries with emerging economies at similar stages of development. But today, the group’s members — Brazil, Russia, India, China, and late-comer South Africa — have an agenda. The five countries have banded together to form a loose international political organisation that aims to combine their political and economic heft for increased global impact. The group has agreed to invest hundreds of billions of dollars setting up new international financial institutions as alternatives to the World Bank and International Monetary Fund, or IMF. The emergence of the BRICS as a cohesive group, if fully realised, would pose a challenge to the American and European dominance of recent decades. What’s more, the group is eyeing expansion — with Greece being tipped as a potential future member, despite the awkwardness of potentially adding a “G” to the name. “There are a whole number of countries that want to join BRICS, major developing economies,” Vadim Lukov, Russia’s deputy representative to BRICS, said recently in an interview with the Bloomberg agency. “This might take a year or two, but this is an absolutely unavoidable process.” Mexico and South Korea have also been eyed as candidates.

THE QUOTE

Jim O’Neill CONTRIBUTION FOR BRITISH NEWSPAPER THE DAILY TELEGRAPH, NOVEMBER 2011

The BRICS’ role in world trade is expanding faster than we first thought and certainly much faster than world trade overall. Trade within the BRICS has accelerated sharply, largely because Brazil and Russia supply so many of the commodities needed by China and India. This pattern looks set to continue in the next decade and beyond, forcing adjustments to these countries’ foreign exchange policies. BRICS leaders are already discussing alternatives to using the US dollar as their main trading currency. The BRICS, notably China and Brazil, have become powerful magnets for foreign direct investment. Simply applying the most credible estimates of long-term demographic trends ... is the intellectual cornerstone of the argument for the BRICS’ potential.

Vladimir Putin 5TH BRICS SUMMIT IN DURBAN, SOUTH AFRICA, MARCH 23, 2013

The number five has a special ring here in general. Our summit is taking place in Africa, with its rich nature and very diverse fauna. In Africa people talk about the ‘big five’ – the five biggest animals on the African continent. BRICS is also made up of five countries, and as I just said, we make a very visible contribution to the global economy.

For now, though, the group has a moratorium on new members, and is focused internally on developing cooperation in global banking and finance, including joint financial institutions. Yet even bringing the current five members together into meaningful coordination will be no easy task for the BRICS, and the organisation is facing significant challenges. Originally linked by the size of their economies and high growth rates, today, two of the group’s members — Russia and Brazil — are stagnating. The fifth member, South Africa, is significantly smaller than the others. Even the man responsible for the term in the first place, former Goldman Sachs chief economist Jim O’Neill, has quipped that Russia and Brazil may get left behind if they don’t revive their economies, paring the group down to “just ‘IC’.”

Birth of BRICS O’Neill first penned the term in a research note in November 2001 titled “Building Better Global Economic BRICs.” In his paper, O’Neill argued for the inclusion of “China and probably Brazil and Russia and possibly India” into the Group of Seven, or G7, organisation, a group of advanced economies including the US, Canada, Germany and Japan that meets every year to coordinate macroeconomic policies. “Representation at global economic policy meetings might need to be significantly changed” to account for these fast-rising economies, O’Neill wrote. In his book, The Growth Map, O’Neill later forecast that the BRIC countries would overtake G7 in terms of combined economic size by 2035.

In 2006, the foreign ministers of the original four BRIC countries met at the United Nations. That began as a series of informal meetings, and eventually resulted in the first formal summit in the Russian city of Yekaterinburg in 2009. The BRICS members, however, are at different stages in terms of economic structure and levels of socio-economic development, says Valery Abramov, a professor at the Russian Presidential Academy of National Economy and Public Administration. Despite its current slower rate of growth, Russia’s Gross Domestic Product per person is higher than that of its partners in terms of purchasing power parity, which incorporates the relative value between currencies. According to the International Monetary Fund, GDP per capita on a purchasing power parity basis in Russia in 2014 was $24,800, significantly more than Brazil ($16,096), South Africa ($13,050), China ($12,880), or India ($5,850). “Russia is at a higher stage of economic competitiveness, having the highest scientific and technological potential,” Abramov says.

Russia takes the chair On April 1, 2015, Russia became the chairman of the BRICS ahead of the group’s key annual sum-

Brics timeline – meetings and resolutions since the body was founded

THE NUMBERS

$75 BILLION is how much the BRICS countries offered to add to the IMF’s capital reserves in 2012 — on the condition that significant changes be made to the IMF voting system.

$41 BILLION is China’s share of the BRICS’ $100 billion currency reserve pool established in Brazil’s Fortaleza in July last year.

The BRICS bank is a step towards the “dedollarisation of the world economy,” said Anton Soroko of Finam.

mit, this year held in the Russian city of Ufa from July 8 to 10. Besides new proposals, Russia has overseen the further development of two key ideas reached earlier by the group: the establishment of a $100 billion currency pool and a development bank. The joint currency reserve pool, agreed during last year’s summit in Brazil, is intended to be an emergency fund for BRICS countries that experience balance of payments difficulties. The pool is being seen as an alternative to the International Monetary Fund, or IMF, which BRICS members have criticised as being too heavily influenced by the US and Western Europe. China is to contribute $41 billion. Russia, Brazil and India are to contribute $18 billion. South Africa’s share is $5 billion. Another key project is the New Development Bank, which will provide loans to invest for a variety of developmental projects in other countries. The BRICS bank will start with $100 billion in charter capital, and be headquartered in Shanghai, China. India nominated K. V. Kamath, chairman of India’s largest private lender ICICI, as the bank’s first head. Establishing the BRICS development bank“is one of the many steps toward the gradual de-dollarisation of the world economy,” says Anton Soroko, an analyst at the investment holding Finam.

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Special Report

GULF NEWS_MONDAY_AUGUST_31_2015

Russia and China agree to pursue ‘common economic space’ in Eurasia Russia and China will coordinate their efforts to open up trade networks in Eurasia, bringing two separate initiatives into line where analysts had expected competition. DAVID MILLER SPECIAL TO RBTH

Russia and China have said they will seek cooperation rather than competition for two large, international initiatives aimed at expanding trade opportunities throughout Eurasia. Before a May 8 summit between Russian President Vladimir Putin and Chinese leader Xi Jinping, political analysts had expected the two programmes — Russia’s Eurasian Economic Union, or EEU, and China’s Silk Road Economic Belt initiative — to come into conflict with one another as Moscow and Beijing compete for influence in the countries of Central Asia. “We seek ultimately to reach a new level of partnership that will create a common economic space across the entire Eurasian continent,” Putin told reporters after the meeting in Moscow.“We think that the Eurasian integration project and the Silk Road Economic Belt project complement each other very harmoniously.” The EEU aims to create a free trade zone among countries that previously belonged to the Soviet Union. China’s Silk Road Economic Belt initiative is geared towards establishimg a string of trade deals and infrastructure projects that facilitate commerce across Central Asia towards Europe.

ALENA REPKINA(3)

Finance Planned reserve pool will help countries to stabilise their currencies

The world’s most important multilateral lenders, the World Bank and IMF, have long been subject to criticism from both outsiders and member states alike. SERGEY STROKAN, VLADIMIR MIKHEEV SPECIAL TO RBTH

In April 2014, Russia proposed establishing a new, single common credit rating agency to compete with the Big Three – Standard & Poor’s, Moody’s and Fitch. While the BRICS nations already have their own national rating agencies, the countries may start working towards setting common standards and integrating their ratings systems. The new common agency may be established via a partnership between the Russian rating agency RusRating and the Chinese agency Dagong Global.

“BRICS have a chance to succeed where the World Bank has failed,” wrote Jessica Evans of Human Rights Watch.

RIA NOVOSTI

The move by BRICS member countries to allocate hundreds of billions of dollars for a new international developmental lending bank and currency reserve fund is being seen by outsiders as a challenge to the World Bank and International Monetary Fund, or IMF. For years, the five BRICS members — Brazil, Russia, India, China and South Africa — have been critical of those international institutions, alternately pushing for change from inside or grumbling from the sidelines. For example, in 2012, the BRICS countries offered to add $75 billion to the IMF’s capital reserves — but only on the condition that significant changes be made to the IMF voting system that would have given the BRICS a louder voice. The move followed years of criticism that the IMF’s decisionmaking process is too heavily dominated by the US and western European countries. The World Bank and IMF were established in the wake of World War II as key components of the Bretton Woods system, an attempt by the victorious Allied powers to establish a negotiated framework for global economic and financial stability during peacetime. The two groups appear somewhat similar but are highly distinct. The World Bank issues development loans to impoverished countries with the goal of ending poverty, while the IMF focuses on ensuring an orderly system of financial transactions between nations. Both the IMF and World Bank are headquartered in Washington, D.C., and virtually every country on earth is a member of both institutions. Yet their policies are often criticised as serving the interests of the “lending” states — especially

New BRICS agency

the US and Europe — over the “borrowing” states, or emerging economies. Both issue loans to poor countries that typically come with conditions, such as the requirement to privatise government-owned enterprises or to institute free-market reforms. Critics of the groups’ lending practices say they often do more harm than good, disrupting local economies or funding projects that cause disruptive change to impoverished communities. Attaching conditions to loans that require countries to open up their economies to global capital has led to criticism from the left that both groups actually end up serving the interests of big corporations. Some observers, therefore, heralded the arrival of the BRICS institutions as an alternative to the World Bank and IMF. “The BRICS have a chance to succeed where the World Bank has failed,” wrote Jessica Evans, the senior advocate and researcher for international financial institutions at Human Rights Watch, in a column for the UK’s The Guardian newspaper. “The [BRICS] bank should include policies on indigenous people, involuntary resettle-

The BRICS group has pledged billions to create new multilateral lenders.

ment and labour standards that meet the norms provided for in international law, and prohibit discrimination. The absence of such rules has come back to haunt the World Bank.” Other observers said the BRICS currency reserve pool, which aims to preserve financial stability among its members, may actually end up working in tandem with the IMF. “The pool also operates in accordance with international rules,” said Georgy Toloraya, executive director of the Russian National Committee of the BRICS research center.“If a country receives more than 30 per cent of its quota, it has to present some kind of stabilisation plan agreed with the IMF and made up in accordance with IMF rules. This means that it is not a substitute for the IMF, as some critics claim, but a good addition to it.Yet it also has a competitive edge to provide aid to countries not dependent on the IMF and US dollar-pegged systems.” Toloraya said the pace of the establishment of the BRICS currency reserve and the development bank show momentum behind the new institutions. “I think this measure has both symbolic and practical value. The currency reserve pool was agreed in Fortaleza in July last year. So the BRICS countries are moving on quite steadily, increasing their consolidation, especially in economic and financial affairs. The planned reserve pool will help countries to stabilise their currencies in case of crisis, which is quite relevant, without addressing the International Monetary Fund." “For example, South Africa can get twice as much money as it has reserved for the pool. Russia, Brazil and India can receive the same amount they have allocated, while China has access to half the amount it invested. This is logical since the Chinese share is the biggest one: $41 billion. This gives China, naturally, the leading role in the institution but the principle of equality is unchallenged,” Toloraya said.

New Silk Road The extent of the future collaboration between the EEU and the Silk Road initiative remains to be seen. But observers said the agreement on May 8 is at least a nominal victory fo Russia’s so-called “Pivot to Asia,”a policy that aims to expand trade and economic opportunities for Russia with Pacific Rim countries after Europe and the United States hit Russian firms with sanctions over Moscow's role in the conflict in Ukraine. Russia achieved an earlier breakthrough in trade talks with China in May 2014, when the two sides signed a deal worth $400 billion at the time for Russia to supply China with natural gas for 30 years, following a decade of deadlocked talks. Putin later expanded that agreement with a new memorandum that foresaw Russia shipping an additional 30 billion cubic metres of gas to China a year, on top of the 38 BCM per year agreed in May, along a second pipeline route. Sceptics have pointed out that the gas deals are still non-binding, and that years of difficult negotiations in the past suggest future haggling over the final terms.

EPA/VOSTOCK-PHOTO

BRICS take aim at World Bank and IMF with new reserve pool

“It is very likely that a new area of economic development will be formed in the centre of Eurasia that will benefit all, and probably become the centre of the new community of Grand Eurasia,” Sergei Karaganov, Dean of the Faculty of World Economics and Politics of Moscow's Higher School of Economics, told Russian daily Rossiyskaya Gazeta after the summit.

Russian President Vladimir Putin greets Chinese President Xi Jinping during a summit in Moscow in May.

VIEWPOINT

Complementing, not competing with World Bank Yakov Mirkin EXPERT

he International Monetary Fund and World Bank are important parts of the international financial system, providing loans to developing countries and working to preserve stability, promote growth and fight poverty. Yet in the decades since they were established in 1945, global finance has become considerably more complex. In order to maintain stable development and minimise risk in the world economy, the IMF and the World Bank aren’t sufficient by themselves. Financial institutions of a second level are needed. So the BRICS countries have created their own versions of these institutions: a $100 billion currency reserve pool, and the New Development Bank.

BRICS member countries hold enormous foreign currency and gold reserves, totaling about $5 trillion. China ranks first in the world in terms of reserves. Brazil, Russia and India rank 7th, 8th and 9th, respectively. So, competition for the IMF and World Bank? Yes, sure: in ideas, and in their outlook on the world. These new institutions represent an alternative source of liquidity during turbulent times, and of funding for new projects. But it’s not just competition. It’s also about cooperation for the most difficult cases. For one example, look no farther than Russia’s recent invitation for Greece to join the BRICS bank. Yakov Mirkin is Director of the Department of International Capital Markets at the RAS Institute of World Economy and International Relations.

RUSSIA BEYOND THE HEADLINES www.rbth.com

Science&Technology

GULF NEWS_MONDAY_AUGUST_31_2015

Technology The 'Russian WhatsApp' is attracting more and more users around the world

Telegram app catching up on rivals In the past six months the number of Telegram messaging app users has increased by 12 million, reaching 62 million people. Does it pose a threat to the giants of the industry?

Pavel Durov, founder of the Telegram app.

THE NUMBERS

YELENA TEMCHENKO RBTH

62 million

2013

5 million

People all over the world use the Telegram messaging app.

The app was created in 2013, and was immediately oriented towards the international market.

Joined Telegram in February 2014 when Facebook bought the popular WhatsApp messaging system.

In the middle of July the Telegram messenger service created by Pavel Durov, founder of Russia's largest social network, Vkontakte, was subjected to a series of large-scale DDOS attacks that caused the application to break down all over the world. Shortly before, the application had been deleted from the Google Play store for several hours due to complaints from Korean competitor Line. According to Durov, the attacks occurred because of the application's growing popularity. In the previous two months alone Telegram user activity had grown threefold, and about 2 billion daily messages are now sent with the service.

To protect the data that users exchange, Durov created the MTProto protocol. It uses several encryption systems, and the app also offers a secure chat option. Thanks to this option even the app's developers themselves cannot decipher the user data and gain access to someone's correspondence. The app's creators say that it will always be free to the public. In an interview with the magazine Wired, Durov said Telegram will never become a commercial project concentrating on revenues. Its mission is to allow secure and protected communication.

Protected, free, dangerous Created in 2013, Telegram was immediately oriented towards the international market and had an English interface. In an interview with The New York Times, Durov said the idea of the messenger service came to him after Russia's Federal Security Service demanded that he delete opposition communities from his Vkontakte social network. After the demands were refused special service agents tried putting pressure on the programmer and searched his apartment and that of his parents. The entrepreneur then understood that he did not have a safe channel for communicating with friends and family, and so he decided to create a secure messaging app.

Lukashenko, 'Despicable Me' and group chats Telegram also has other advantages that users value. People can use the service from multiple phones, send files without limits in size, and set a timer for deleting the messages.The program also contains a built-in photo editor and a function to search internet attachments. There is also a multichat in which up to 200 people can participate. Like other apps, Telegram can hold picture-stickers. Telegram's distinguishing particularity, however, is that the stickers are free and can be added by any user. Immediately after the activation of this function users started post-

ing images with popular memes, comedians, famous politicians and cultural figures. Users were particularly pleased to see stickers of Belarusian President Alexander Lukashenko, the little frog Pepe, and characters from the "Despicable Me" animation.

A helping hand from Facebook The app's finest hour came in February 2014 when Facebook bought the popular WhatsApp messaging system. According to Telegram, after this deal almost 5 million users joined the Russian app, making it one of the top apps downloaded for the iPhone in 48 countries. The reason is that a part of the general public has lost trust in WhatsApp, said Karen Kazaryan, an analyst from the Russian Association of Electronic Communications. Telegram positions itself as an independent service. "After Facebook bought WhatsApp there was a huge outflow of users to Telegram," explained Kazaryan, who added that the app became popular in Europe, Latin America, India, Southeast Asia, and Arab countries. The app, however, has its shortcomings, which may impede its promotion on world markets. "It is very difficult to call Telegram a real competitor for giants such as WhatsApp and WeChat, which have about 10 times the users that Telegram has," said Kazaryan. She also doubts whether the service will have enough finances to continue its work. But Telegram's founders believe that for now the project does not need additional financing, and they plan to develop according to the fundraising business model.

TECH CRUNCH

Technology New Russian software has the ability to track idleness

Medicine A new method for a non-invasive genetic diagnosis

Firms get new tools to spy on their employees

A simpler, cheaper test to determine a baby's gender

Russian software developer Infomaximum is going global with its staff-monitoring program CrocoTime. Already quite popular in Russia, CrocoTime is designed for big companies. DINARA MAMEDOVA SPECIAL TO RBTH

With 20,000 employees already under its watchful eye, CrocoTime is quite popular with some of Russia’s biggest companies, including global energy giant Gazprom, leading financer Tinkoff Bank, as well as the local branch of Danish shoe retailer Ecco. But what is so special about the program?

Agents? On my computer?

We still have tablets According to Bochkin, Infomaximum is seeking to promote Crocotime in Europe, North America and Asia. However, Sergei Akashkin, an investment analyst for Prostor Capital, believes demand for the program will be limited. “CrocoTime might be of interest for larger enterprises,” said Akashkin. “The need for an employee monitoring solution arises in companies employing more than 50 people. But in smaller companies a good manager can make do without any software.” Moreover, Akashkin believes that the productivity of employees generally depends on the time of day and this factor can influence the accuracy of the data collected by the software and in turn have an impact on the demand and sales growth. Besides, he adds, employees have recently started to circumvent monitoring attempts by using tablets and smartphones to surf the internet while at work.

SHUTTERSTOCK/LEGION-MEDIA(2)

CrocoTime is installed on the client company’s server and comes with so-called“monitoring agents” that access employees’ computers. The software tracks websites that are visited and programs that are used, and sorts all activity into three categories: productive, unproductive and incidental. It is up to the client to decide what is good or bad for their employees. “Incidental activity is something that stands apart,” said Alexander Bochkin, CEO of Infomaximum. “Basically, this is when an employee uses tools that he is not supposed to use, going beyond his direct responsibilities. Such activity shows the company has some

management issues. For instance, one of the companies we worked with found out their client relations managers spent about 60 percent of their time working in Microsoft Word, drafting contracts manually. After having detected that the department switched to using document templates.” CrocoTime also has the ability to track idleness: if someone’s keyboard and mouse do not get used for some time, the software considers the employee as absent. A perpetual licence for a “monitoring agent” is currently priced at 2,560 rubles ($47.80) per employee computer. According to Bochkin, due to his software most companies reduce the amount of

wasted time from 25-30 percent to 5-7 percent.

CrocoTime is installed on the client company’s server and comes with so-called 'monitoring agents' that access employees’ computers.

Scientists have developed a new method that reveals a baby’s gender using the mother's blood by the 10th week of pregnancy.

rbth.ru/47517

DARYA KEZINA RBTH

Just 7-10 millilitres of a pregnant woman’s venous blood is needed to ascertain whether she is expecting a boy or a girl, whether there is a probability of Rh incompatibility (Ed.: an Rh factor is a type of protein on the surface of red blood cells) or if genetic disorders are present, such as Down's Syndrome. Specialists at TestGen, a subsidiary of ULNANOTECH Nano Centre (Ulyanovsk Technology Transfer Centre), have developed a new method for a non-invasive genetic diagnosis. The kits provide results within 2-3 hours. A new generation of tests has already been introduced in perinatal centres and private laboratories in 20 Russian regions throughout the country, as well as in Ukraine, Kyrgyzstan and Azerbaijan. In Kazakhstan the testing has even been included as part of state healthcare programs. Today this Ulyanovsk firm has plans to enter the global market. The test developers told RBTH that the test has already aroused interest in the United Arab Emirates, Singapore and Iraq.

Test is 99 percent accurate “Our research was conducted in 11 laboratories in Russia, Ukraine and Kazakhstan,” Andrei Torop-

According to the developers, the new test has shown to be 99 percent accurate.

ovsky, the CEO of TestGen, told RBTH.“More than 2,000 women were tested. The test has shown to be 99 percent accurate. Until now, it only was possible to find out the gender and potential defects by a scan at 11-13 weeks of pregnancy. And, to identify the Rh factor, it was necessary to obtain foetal blood sampling through puncture [of the maternal abdomen]. Such procedures increase the risk of miscarriage,” said Toropovsky. The price of the Russian test begins at $36, however, it fluctuates depending on the reagents required. According to the developers, the accuracy of existing equivalents in the world market is 95 percent, with a cost ranging from $270-$360. Scientists have known since 1997 that the blood of a pregnant

woman contains the baby's DNA. From the fifth week of pregnancy, the foetus’s share makes up three percent of the mother's DNA. The geneticists in Ulyanovsk used an approach enabling greater sensitivity in order to detect single molecules of foetal DNA in the blood of a pregnant woman. The kits use reagents consisting of short synthetic DNA segments known as nanocomponents. "The absence of the Y-chromosome is what makes a woman,” Toropovsky said.“If theY-chromosome is found in the blood, the expectant mother will have a boy. Another crucial factor is the detection of the Rh factor. Approximately 15 percent of pregnant women are Rh negative, so they may develop Rh incompatibility, a common cause of haemolytic disease, or even pregnancy loss.

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Opinion

GULF NEWS_MONDAY_AUGUST_31_2015

COULD EXTREMISM PROMPT RUSSIA AND THE U.S. TO COOPERATION? coincidence that realist American politicians, like Henry Kissinger, to name one, have criticised their country’s reckless intervention in the affairs of the countries in the region. Working together, however, perhaps Moscow and Washington could bring peace to such states.

Vitaly Naumkin KOMMERSANT

he rapid advance of radical terrorist groups is one of the major concerns in global politics today. These groups represent a threat to both the United States and Russia, and as such could be one area — perhaps the only one — where the countries currently share a common interest and common goals. In the Middle East generally, like in the rest of the world, Moscow and Washington are pursuing mostly asymmetrical policies. The U.S. still remains a major buyer of Middle Eastern oil and a number of states in the region are strategic partners with bilateral security and defence treaties that include the hosting of American military bases. Russia, for its part, has relationships with countries in the region that are hostile to the United States, like Iran, and U.S. allies, like Turkey. But Russia does not have strategic ties in the region, as the U.S. does. On the whole, Moscow arguably does not have any vital interests in the Middle East, which should give little reason for the U.S. and Russia to disagree about overall policy there, even if there are disagreements over certain regimes. It follows, then, that there could be an opportunity for coo-

Barriers to collaboration

KONSTANTIN MALER

Moscow is especially concerned about the growing numbers of extremists from Russia fighting for ISIS.

peration in the one area where the countries have a common interest — the fight against international terrorism and religious extremism. Russia and the United States both want stability in the Middle East. Even if we take the view of Russian officialdom at face value and accept that Washington has actually been seeking to

promote regime change in the region, it could still cooperate with Moscow to fight the ISIS (Islamic State in Iraq and Syria) radical militant group. There are also possibilities for the U.S. and Russia to cooperate on bringing stability to countries like Libya, which at the moment is controlled by no one. It is no

However, U.S.-Russia cooperation 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 due to the ongoing conflict in eastern Ukraine. The damage to the bilateral relationship is so severe that, even once the Ukrainian crisis is settled, relations will take time to heal. More to the point, however, the United States and Russia have differing views on which Islamic groups operating in the region — particularly in Syria — to support. On one hand, the United States supports several Islamist groups it considers moderate; Russia, however, believes these groups are almost as dangerous as the al-Nusra Front, the Al Qaida branch operating in Syria and Lebanon. And Washington, for its part, refuses to cooperate with the Syrian government, which is regarded by Moscow as an important partner in the fight against terrorism. Even if we assume there could

be counter-terrorism cooperation between the two countries, and it could be advanced to a level corresponding to the threat, Russia would also never agree to join any coalition led by the United States, and the U.S. will never refuse to be the leader. Russia, which has learned some valuable lessons from America’s (and its own) experience in the region, would likely refrain from conducting military operations in Arab countries, or even conducting airstrikes there, but instead would focus on making its influence felt in the U.N. Security Council.

Low profile? Nevertheless, Russia is willing to cooperate both with the West and with regional states in the fight against terrorism, noting its preference for working with legitimate governments. Moscow is especially concerned about the growing number of extremists from Russia and Central Asia fighting for ISIS, a problem that became more acute this spring. I think the need to stand together against a common threat will eventually prompt Washington and Moscow to make amends. But considering all the abovementioned constraints, the cooperation will likely be low-profile. At best, the parties will coordinate their efforts and share relevant information, while acting on their own. That said, even this kind of trust will be helpful for mending the rift between the countries. Vitaly Naumkin directs the Institute of Oriental Studies at the Russian Academy of Sciences. Originally published in Kommersant

TAKING STOCK OF KADYROV’S CHECHNYA Sergei Markedonov SPECIAL TO RUSSIA DIRECT

TATIANA PERELYGINA

f sociologists compiled a ranking of the most active media figures in Russia, one of the top three would almost certainly be the head of Chechnya, Ramzan Kadyrov. Not a day goes by without his name topping news feeds and headlines. Early June was no exception. YouTube blocked a film about the Chechen leader made by oligarchin-exile Mikhail Khodorkovsky’s Open Russia organisation. Despite the block, anyone who wants to can watch this film without too much difficulty, but those looking for shocking exposés are likely to be disappointed. The Open Russia project does not lay bare any new facts; rather it systemises and arranges everything that has already been done countless times in the media and via social networks (thanks in part to the efforts of the film’s protagonist). It is not the informational impact of the film that matters, but the fact that it was blocked, which demonstrates once again the considerable resources and influence that Kadyrov wields. The management style of“Chechnya’s CEO”

is to take a hands-off approach — not only in the republic itself, but far beyond its borders. Also important is making friends and enlisting support, which can come in useful at any level of business administration. Ideologically the Chechen leader is fond of appealing to the traditions and history of his people. And surprisingly even his fiercest critics and opponents swallow the bait, reeling off statements about the “new stone age” in Chechnya.

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In fact, the political system of Ramzan Kadyrov is a product of more modern times. In contrast to other North Caucasus republics, where complex models exist to coordinate the interests of different spheres of influence, the Chechen system is de facto autocratic. In Chechnya, “Kadyrov” is not just the name of the leader. It represents the lynchpin of the entire system. For centuries, Chechens have barely tolerated being

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a vassal state inside a feudal system. For them, Kadyrov is the supreme leader, regardless of his age. Such a radical turn of events did not just happen by itself. Some fundamental premises lay behind it. The first is the headlong degradation of the institutions of kinship, which began not yesterday but years ago. The process was rapidly accelerated by the collapse of the Soviet Union and the two wars with Russia in the 1990s. Today the concept of a teip (clan) is nothing more than a journalistic stereotype. That is not the only important premise.Whatever is written about “Chechnya’s special status,” it is worth bearing in mind the republic’s relationship with“Greater Russia” and what would have happened if the Kremlin had not staked all on the policy of “Chechenisation,” which meant counting not only on local cadres, but also on the personification of power. Chechnya in the 2000s became a symbol that Russia had put the years of disintegration following the collapse of the Soviet system behind it. Nowhere else in the former Soviet Union had a separatist territory come back under central control. However, the price of this sym-

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bolism was unprecedented political independence for the Chechen leadership. Whereas previously Chechnya existed under a kind of “one country, two systems” concept (as in the case of China and Hong Kong), Kadyrov thinks in different categories. If you need a symbol of stability so much, then let me take part in shaping your agenda, he seems to say. At the moment, however, Moscow has little room to maneuver in negotiating with Kadyrov. Until a settlement is reached on Ukraine, the logic of avoiding confrontation in the Caucasus will persist. But the indulgence of such a confrontational leader — in unison with Russia’s growing reactionary ideological mood — is tipping the country into the archaic past, while marginalising it internationally, not only in the West, but also in the East. In China, which claims to be a strategic partner of Russia, experts are extremely sceptical about Chechen home rule, seeing it more as a sign of weakness than strength. Sergei Markedonov is an associate professor of foreign regional studies and foreign policy at the Russian State University for the Humanities.

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BRICS 2.0 AND THE METAMORPHOSIS OF GLOBALIZATION The new Russia Direct Brief “BRICS 2.0 and the Metamorphosis of Globalization” analyzes what is next after the BRICS Summit in Ufa, Russia. Written by Marcos Troyjo of Columbia University, the Brief looks into the primary policy choices facing Russia and other BRICS countries within the broader context of reglobalization.

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Feature

GULF NEWS_MONDAY_AUGUST_31_2015

Travel A meal with a view

Arts&Crafts The prototype of the Russian doll may have originally come from Japan

More than just a pretty face: Secrets of the matryoshka The Russian doll is one of the most recognizable symbols of Russia.

"The matryoshka appeared as a result of an artistic project during the Art Nouveau epoch, which involved the use of eastern traditions," says Titova. "The influence of art from the east was definitely significant, but it had a general character."

From one-off to tourist staple

DPA/VOSTOCK-PHOTO

When asked what to bring from Russia as a souvenir, there’s one thing people are guaranteed to say: "A Russian doll, what else?" But the “matryoshka” is not as Russian as it may seem at first. YELENA KOSTOMAROVA SPECIAL TO RBTH

Step into any souvenir shop in Russia and there they are: rows and rows of gleaming bulbous stylised women, a rosy-cheeked, bright-eyed face surrounded by bright colours and folk ornamentation. Twist off the top half of one of these wooden dolls and you will find an identical, smaller replica inside. And inside that, another, and inside that, another… The Russian doll, or "matryoshka," to use the Russian name, is one of the most recognisable symbols of Russia – but while many see it as an example of the nation’s ancient traditions of woodworking and decorative handicrafts, the matryoshka is in fact far younger than it would appear. In fact, it dates back only to the late 19th century. So what are the origins of this famous nesting doll? The word "matryoshka" comes from the name Matryona, which was very popular in the 19th century. The name means "respectable lady," "mother of the family," or "mummy."

PRESS PHOTO(4)

the stout and happy woman, the features that characterise the matryoshka, has been used as a symbol of fertility in various cultures. It is enough to remember the Ancient Greek Paleolithic Venuses, the figurines that archaeologists found in many European countries, and the Chinese, Japanese and Indian toys that were created with a similar technique. According to one version, a relative of the Russian matryoshka is the roly-poly doll personifying the Buddhist monk Bodhidharma, who was one of the chief mentors of the ancient religion and founder of the Shaolin Monastery. His name in Japanese is Daruma. This name was used for a doll made of pa-

Fertility symbol "For all Russians the matryoshka is obviously Matryona, the embodiment of woman's health, fertility, a wonderful female disposition and a symbol of the family," explains Yelena Titova, director of the All-Russian Museum of Decorative, Applied and Folk Art in Moscow. But what was the inspiration for the matryoshka? Throughout history the image of

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pier mache, notable for its solidity. The Kokeshi doll, which served as a talisman for children, is also notable for its resemblance to the matryoshka. However, this Japanese doll bears a closer similarity to Russian straw dolls, which could be found in all peasant homes in the past. The most probable candidate for the title of the matryoshka's older brother is the Japanese elder Fukurumu. Inside this wooden sculpture of the God of Wisdom there were another six figurines painted as his relatives or as other little Japanese gods.

A wind from the east Some believe that the prototype of the matryoshka was brought to Russia from Japan in the 1800s by the wife of famous art patron Savva Mamontov. In the second half of the 19th century a vogue for everything eastern swept over Russia: clothes, prints, statuettes. Even Emperor Nicholas II carried a netsuke in his pocket as a talisman. The story goes that Mamontov asked artist Sergei Malyutin to make something similar. However, according to Yelena Titova from the All-Russian Museum of Decorative, Applied and Folk Art, the story is just that and there is no proof that the Russian matryoshka was "copied" from any particular Japanese "brother."

One way or another, the first Russian matryoshka appeared at the end of the 1890s in the Children's Education workshop in Moscow. Its creators were turner Vasily Zvezdochkin and artist Sergei Malyutin. In 1900 the toy was exhibited at the Universal Exhibition in Paris. The colourful doll was recognised as the best dissembling toy both from the educational and the technical points of view, creating a real craze amidst the public and receiving a bronze medal. Before the 1930s, the painted toys were generally works created by individual artists. The wooden figurines were painted not only by artist-craftsmen but also by representatives of the Russian avantgarde, which was fascinated by the Russian Revival style of the 1800s. In the middle of the 1930s factory production of the matryoshka was introduced, thanks to which it eventually obtained the status of the country's main souvenir. From the 1990s onward the matryoshka in Russia became a unique canvas for the self-expression of various types of artists. All foreign tourists visiting Russia in that period remember the souvenir rows on Moscow’s Arbat with their differently painted matryoshkas representing politicians, pop stars, and actors, sometimes as caricatures. Even today visitors to Moscow and St. Petersburg will find nesting dolls featuring a succession of Russian leaders, from current president Vladimir Putin back to Peter the Great. The doll has also undergone thousands of experiments in colour, form and size, with the record sample made of 80 pieces. "Regardless of all the changes that the matryoshka went through in the years following her birth, which were difficult years in the first quarter of the 20th century, revolutionary years, she became the key element of Russian crafts," says Titova. "There has always been a demand for the matryoshka, both as a children's toy and as a gift, and the doll has always been a symbol of the family."

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Where to dine with a breeze and killer view in the Russian capital.

On top of it all: Dine out in style on Moscow's roofs Moscow views are even more breathtaking from above and what better way to enjoy them than with a delicious meal? Here we present some of the best rooftop restaurants in the city.

Though this one requires you to get out your fanciest shoes and dish out quite a hefty sum, the evening view over the brightly lit New Arbat, the Moscow City business district and basically all of central Moscow is worth it. Thanks to these views from the 21st floor of Lotte Plaza, together with the provocative darkness, the chic atmosphere and the sensual music, it’s the perfect place for a romantic dinner all year around.

One of the capital’s oldest and most beloved rooftop restaurants, Sky Lounge is located on the top floor of the futuristic Soviet-era Russian Academy of Sciences building just southwest of the city centre, which means one thing: marvellous 360 panorama views of the Moskva River, Moscow State University, the Luzhniki Stadium and the Moscow City business district. It’s certainly not the cheapest place in town but for your hard-earned money you will get attentive staff, a high-energy upscale vibe and an internationally inspired menu from brand chef Artyom Dobrovolsky. The views are gorgeous all year around but in the summer months you have the chance to sit outside and take in the views as the wind blows through your hair.

Schastye na Kryshe

Radisson Royal Hotel

Translated as “Happiness on the Roof”,this cute veranda is perfect for a group of girlfriends, a young family or a couple romantically looking into each other’s eyes whilst enjoying beautiful views of Pushkin Square. Many guests complimented the pastries and breakfasts as well as the price to quality ratio but noted that service was rather slow and reservations essential on weekends.

This stylish hotel occupies one of Stalin’s “Seven Sisters” and is a beautiful site in itself, but as the elevator starts taking you higher and higher, the views and dining options only get better and better. Designed by Russian restaurateur Arkady Novikov, Tatler Club Restaurant offers innovative cuisine and river views. For premier Italian dishes, try Buono Restaurant, where chef Christian Lorenzini masterfully prepares each meal with meticulous detail. The lovely terrace features a glass roof that lets natural light flow into the dining area. The Romantic Restaurant is located on the hotel’s top floor and serves delicious cuisine set against a stunning backdrop of panoramic views. Celebrate any special occasion, from an anniversary to an engagement, at the restaurant. Decorated in a 1930s Manhattan style, the 31st-floor Mercedes Bar pours an array of creative cocktails constructed. The views from this bar are unforgettable.

MARIA STAMBLER RBTH

Kalina Bar

White Rabbit White Rabbit is currently all the rage among Moscow’s trendy foodies, not least because it made it into the prestigious British hospitality industry trade journal Restaurant magazine’s top 50 this year. Needless to say, the food here is phenomenal – among the best available in the capital at the moment. But what gives it that extra something? The view, of course. Overlooking Moscow from the 16th floor of Smolensky Passage, this restaurant, which infuses its décor with themes from Alice in Wonderland, essentially puts all of central Moscow right in the palm of your hand as you sit back and enjoy chef Vladimir Mukhin’s culinary masterpieces.

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