Russia and India Business Report

in.rbth.com

WEDNESDAY MAY 14, 2014

Business Report RUSSIA&INDIA THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

ECONOMY: Moscow looks at Oregon model, Ministry of Economic Development has firmed up a blueprint for SEZ

Russia plans to create SEZ, offshore tax haven in Crimea

STATISTICS Ruble/Rupee dollar rates

The Russian government has set a record low rate for value-added tax (VAT) in Crimea and is offering a host of incentives to attract both Russian and foreign investors to convert the peninsula into an economic dynamo.

ALEXEY LOSSAN

Stock Market Index

RIBR

A

Major stock markets ranked by P/E SHUTTERSTOCK/LEGION-MEDIA

mid the raging crisis in Ukraine, Russia is planning to make Crimea a special economic zone and a “civilized offshore” which will become a hub for investment. Unveiling the plan, Russia’s Minister for Crimean Affairs Oleg Savelyev said the government is planning a liberal model of development of the peninsula, and the creation of a “civilized offshore.” He said the new model will provide maximum delegation of federal powers to local authorities and help minimise costs, which will allow making deals according to the British law.

Since early May, the Crimea State Council has established new rates on value-added taxes: 4 percent for regular wares and 2 percent for socially important ones, including foodstuff, children’s goods, and medicines.

The NDS (VAT) is 18 percent throughout Russia. The lowering of the NDS is unprecedented for Russia. Such low taxes only occur in offshore zones.

According to Investcafe analyst Mikhail Kuzmin, such a decision seems a logical step to attract additional investments into the region. “The Russian authorities will try to create maximum relief to get business onto the territory of Crimea,” says the expert. The new tax rate is set through the beginning of 2015. However, it may be extended in the future. “If this measure results in positive results and stimulates investment activity, then the given NDS rates for the Crimea will be retained after the end of the transition period,” says Victor Demidov, the Head of the Department of Legal Consulting at Finexpertiza.

The VAT is a federal tax, but in the case

Crimea is poised to create ideal conditions for attracting more business and investment.

of Crimea, an exception has been made: the Russian federal legislation will start to function on the island only at the start of the New Year. “This tax zone will be interesting, first of all, for the enterprises operating in the Crimea, as well as for Russian and foreign investors – provided the tensions surrounding Ukraine are lowered,” says the UFS IC expert Vasiliy Ukharsky.

In other countries, the lowering of taxes has worked. For instance, the income tax was eliminated in the American state of Oregon, which helped transform this region into an attractive destination for shopping, e-commerce, and the development of new designs by major clothing brands.

The Russian authorities have somewhat similar plans for Crimea. The Ministry of

Economic Development has worked out a plan for creating a special economic zone on the peninsula. If a company puts 150 million rubles ($4.2 million) into the economy of the region over a period of three years, then it will be relieved of all taxes except for the 10 percent tax on profit. However, this programme is still being finalised by the Russian government.

Poll: Will Russia’s isolation impact its fortunes?

MARKET: Rosneft, targeted by the US sanctions, is now being traded at 4.3 times than its annual profits

Undervalued companies: Wait for the tide to turn The Ukraine crisis has led to a fall in shares of Russian companies, making them more attractive to investors.

IVAN BRIZOV RIBR

R

ussian companies have traditionally been undervalued by the market, and the current crisis in Ukraine, combined with US and EU sanctions, have led to a further fall in prices. One way to determine the fair price of a company is considered as the ratio of its market capitalisation to its annual profits (PE ratio) – this factor acts as

an indicator of how much the company is undervalued by the market. Thus, the securities included on the main Russian index, the MICEX, are being traded at an average of five times their annual profits. In Turkey, this indicator is 9.4, in Poland 12.5, while in Brazil it is 13.1 Russian companies, on an average, are, therefore, valued at 2.5 times less than companies in Brazil.

At the same time, in some Russian companies, the ratio of market capitalisation

to profits may exceed that of their foreign counterparts several times. For example, the capitalisation of Norilsk Nickel, the world’s largest producer of nickel, is 41.7 times greater than its annual profits, a record for the Russian market. According to the investment holding company Finam, the most undervalued Russian company is Transneft, engaged in the construction and operation of pipelines. The second most undervalued company is Gazprom, which provides 40 percent of gas deliveries to the European Union. This company is worth $83.7 billion, which is just 2.7 times its annual profits. The shares of Gazprom are the most popular securities

among foreigners investing in Russia. Lukoil comes third, followed by Surgutneftegas – the most closed Russian oil company.

Finally, closing the Top-5 list of the most undervalued companies, is the state-owned Rosneft, which is now worth only $66.87 billion and is being traded at 4.3 times its annual profits. It has been hit hard by the US sanctions as its president, former deputy prime minister Igor Sechin, was placed on the US’ “black list.” However, as they noted in Finam, once the sanctions’ issue disappears and investors return to the Russian market, then most likely they will turn their attention to Rosneft.

Poll: Will Russia become a great power?

THE OUTSIDER’S INSIGHT

Follow Get best stories from Russia straight to your inbox IN. RBTH.COM/SUBSCRIBE

Read daily at IN.RBTH.COM or on your mobile reader

BORIS VOLKHONSKY Foreign policy analyst

RBTH for i Pad ® BOSS, FATHER, TSAR OR SLAVE DRIVER?

DOWNLOAD NOW

NEXT ISSUE

11

How unshakable is territorial integrity?

June

In its approach to the situation in Ukraine, the Indian leadership has consistently underlined its commitment to the principle of a state’s territorial integrity. However, if India had always followed this principle, the independent state of Bangladesh would not exist on the world map today. As the events in Ukraine become more terrible and tragic, I get a feeling of déjà vu more and more often.

Judge for yourself.

A country in which the division of East and West can clearly be seen; not only is the population of these parts simply unable to get along with each other within a single state, but also feels an absolute rejection of principles which one part of the population is trying to impose on the other. When the Eastern population begins to demand respect for their

legitimate rights and interests, the government, representing the interests of the West, unleashes a bloody massacre and genocide against its own people.

Which country are we referring to? Ukraine in 2014? Yes, but not just Ukraine. Remember that the same thing happened over 40 years ago, much closer to the borders of India, which now takes a rather balanced position in relation to Ukraine, but for some reason still cannot openly admit who is right . The duality of India’s position can be partly understood.

But let’s acknowledge that, for example, the Indo-Pakistani dispute over Kashmir has no parallels with the current situation around Ukraine. The referendum in the Crimea was held with the legitimate authorities being in full control of its territory, and nobody

prevented the citizens from making their choice. And the voting showed that 97 percent of the population was in favour of reunification with Russia.

None of this is possible in today’s Kashmir; there is no need to talk about a referendum in a territory controlled by at least three administrations. And, of course, one cannot expect such a clear voting outcome.

Here’s another parallel with respect to what is happening today in the south-east of Ukraine. It’s about the 1971 events in Bangladesh (East Pakistan at the time), the same struggle of the Eastern population for its vital national interests and the same attempt by the central government to crush protests by force.

If during that time, nobody in the world had stood up for the rights of East Pakistanis, this would have led to greater scale of genocide, a complete infringement of the rights of the Bengali population, and a relegation of Bengalis living in East Pakistan to the level of second-class people who do not have any rights to their language, culture, or identity.

In 1971, India had no doubt about how to act in this situation. As soon as the Indian troops, who entered East Pakistan and saved hundreds of thousands, the national liberation struggle of the Bengalis was a success, and the independent state of Bangladesh appeared on the world map.

Of course, today it is not so easy

for India to take a similar position in relation to the Ukraine crisis. Firstly, Ukraine is far away. Secondly, India itself is at a crossroads, and the country’s leaders have to think more about their own political future in the country rather than about some actions in the international arena. Finally, over the decades that have passed since the events in Bangladesh, India’s foreign policy has evolved towards the West.

However, today the West is an active supporter of pogroms in Kiev’s Maidan; it contributed to the rise to power of Nazis in Ukraine, encouraging genocide of the Ukrainian people, perpetrated by illegitimate authorities of that country. In these circumstances, there is hope that the current (or future) Indian leadership will still remember that the territorial value is not immune when it comes to people’ survival.

There is still hope that following the example of India in 1971, Russia will not have to send troops to Ukraine to protect the civilian population.

However, if the Nazis consolidated in Kiev continue to pursue a policy of genocide of their own people, Russia will have to take adequate measures.

Then I would very much like to see India, while assessing the situation, recall Bangladesh rather than Kashmir.

The author’s blog in.rbth.com/blogs/ the_ outsiders_insight

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

E |C |O |N |O |M |Y WEDNESDAY MAY 14, 2014

ECONOMY: Western sanctions over Ukraine will only bolster Putin’s position as it will lead to consolidation of the elite, says aide

Russia plans to set up a manned colony in Moon by 2030 SHUTTERSTOCK/LEGION-MEDIA

Russia is planning to put a manned colony on the Moon in 2030, and is racing to dispatch the first robotic rovers to explore the lunar surface two years from now, says a report by Izvestia. A draft government programme outlines a three-step process, which includes sending a robotic craft to the Moon in 2016 and manned missions to orbit the Earth’s satellite by 2028.

Putin may target US, European oil giants Russia may rethink the presence of Western companies in crucial sectors of its economy.

IGOR ROZIN RIBR

R

Kudankulam Unit I reaches 90% of operating capacity

ussian President Vladimir Putin has cautioned that Moscow will rethink the presence of the US and the EU in strategic sectors of the Russian economy if the West continued further sanctions and restrictions over the Ukraine crisis.

“The Russian government has already proposed some measures in response, but I believe that they will not be necessary,” said Putin after a Supreme Eurasian Economic Council session in Minsk. “[If ] this will continue, we will, of course have to rethink all aspects of Western involvement in key sectors of the Russian economy, including the energy sector,” he said.

“We really do not want to resort to retaliatory measures, and I hope that it will not be necessary,” he added.

The first reactor of the Russian-built Kudankulam Nuclear Power Plant (KNPP) reached 90 percent of its operating capacity on May 5, sources told RIR. The reactor generated 900 MW and it is likely that the plant will attain maximum capacity soon. Russia will help build units 3 and 4 of KNPP, with a capacity of 1,000 MW each. Rosatom head Sergei Kiriyenko said the technical parameters of units 3 and 4 have been appproved. RIBR

SiburJV: India likely to be self-reliant in butyl rubber soon

Russian President Vladimir Putin has made it clear that if Western sanctions continued, Moscow will have to strike back.

caused by the inability to establish a dialogue between Kiev and Ukraine’s southeastern regions. The authorities in Kiev prefer to shift the responsibility for what happens to Russia.

In an interview with Vzglyad online newspaper, Yaakov Kedmi, a political scientist and former Israeli intelligence officer, said that he is sceptical that Russia can be influenced through sanctions and threats. “The dependence of the Russian defence on the US is minimal. Russia’s Defense industry will not suffer, nor will the space programme. However, the European and

American programmes will certainly suffer, given that they have a much greater dependence on Russia,” said Kedmi. “Obama can say whatever he likes. Washington doesn’t have the resources to make Russia back down in Ukraine. Washington should have never provoked the conflict to create the illusion of a global Ukraine and the EU,” said the Israeli political scientist.

Sanctions will only strengthen Putin’s position, presidential aide Andrei Belousov said. “We are mobilising more now – and our colleagues do not understand this. They do not

understand that through their sanctions over the past 10-15 years, they have achieved the consolidation of the elite.” “Apparently, our psychology is structured in such a way that we need a strong negative external force to compel us to unite and consolidate. The heavier the sanctions, the stronger the bonds among the elite, “ said the presidential aide.

Read more in.rbth.com/politics

GEOPOLITICS: The Ukraine crisis nudges Russia to explore new gas pipelines to India, stakes in Trebs and Titov oil fields likely

Indra-2014 exercises linked with joint economic projects

India is likely to save around $360 million in synthetic butyl rubber imports once Sibur’s joint venture with Reliance Industries (Reliance Sibur Elastomers) starts production by the end of next year, Evgeny Griva, chief executive of Sibur Petrochemical India said. He added that India’s current imports were estimated at 60,000 tonnes per annum as against the plant’s capacity of 100,000 tonnes. RIBR

VLADIMIR MUKHIN NEZAVISMAYA GAZETA

A

s its relations with Western Europe and the United States deteriorate, Moscow looks set to step up its military and economic cooperation with its southern partners.

Recently, the final conference on the joint Russian-Indian naval counterterrorism exercise Indra-2014 was held in Vladivostok. The manoeuvres will be held in the Sea of Japan in mid-July.

Four ships of the Indian Navy will participate in them along with the Russian Pacific Fleet (PF) ships.

These exercises are associated not only with counterterrorism objectives,

BRICS countries to set up common credit rating agency

PRESS PHOTO

Russia will propose to its traditional partners to establish a single common credit rating agency that will compete with the Big Three – Standard & Poor’s, Moody’s and Fitch. According to sources from the RBC-Daily newspaper, a new agency could be established through a partnership between the Russian rating agency RusRating and China’s Dagong Global. The US agency, Egan-Jones Ratings, could help them. Dagong Global has already held talks with RusRating in Beijing at a meeting within the framework of the BRICS: the company has proposed to start negotiations to establish a new international credit rating agency to be based in one of the BRICS nations.

In response to the first package of sanctions by the US, Russia had imposed a travel ban on some closest advisers of US President Barack Obama.

The ongoing Western projects in Russia include virtually all the leading oil and gas companies as partners, including British BP, the British-Dutch Royal Dutch Shell, Norwegian Statoil, and Italian Eni. In late March, after the beginning of the sanctions campaign, France’s Total has been negotiating with LUKOIL on the joint development of Russian oil fields. The American Exxon Mobil has shown very serious interest in Russia, having enjoyed a long and productive collaboration with Rosneft. Ironically, Igor Sechin, the chief of Rosneft, was one of the first to land on the US sanctions list.

Putin has said that heightened tensions in Ukraine have actually been

PHOTOSHOT/VOSTOCK-PHOTO

NEWS

but also with the interests of joint economic projects in the region, say military and diplomatic sources.

A joint maritime defence is supposed to be worked out as well as the holding of firing as part of the manoeuvres. The relevance of such actions can be attributed to India’s participation in the Sakhalin-1 project for the development of oil and gas field (the share of India’s state-owned ONGC is 20 percent), as well as the planned shipment of natural resources from the Arctic.

India and Russia are also involved in a joint development of phosphate deposits on the Kola Peninsula and potassium-magnesium salts in the Perm region, with a cumulative invest-

ment of $2.5 billion. It is possible that in the near future, caravans of Indian ships and tankers with these and other natural resources will pass through the Northern Sea Route, La Perouse Strait and through the Sea of Japan to the trading ports in the Indian Ocean, and such caravans should, of course, be protected against pirates and other intruders. That’s why, according to the head of the Russian delegation, 1st Rank Captain Sergey Sinko, “the Indian side attaches great importance to these exercises, which have a great potential.” He believes that all the issues brought up at the Indra-2014 conference are agreed upon and approved.

This is not the first time that Indian

Navy is participating in the exercises in the Far East in collaboration with the Russian Navy. Such joint manoeuvres were held in the Sea of Japan on April 24-26, 2007. At that time, five Indian Navy ships under the command of Commander of the Eastern Fleet of the Indian Navy Rear Admiral Robert Dhowan arrived in Vladivostok.

“Tensions between Russia and the Western countries, caused by the events in Ukraine, forced Moscow to intensify the process of diversification of oil and gas,” Lieutenant-General Yuri Netkachev, a military expert, said.

“Now there is talk of a possible construction of a pipeline to India through China. Although, in my opinion, it is more profitable to carry oil tankers from Sakhalin, and from the Arctic, especially because our joint naval groups will be able to ensure the security of such transportation in the future.

“India is our strategic partner and its military presence in the maritime

economic zone in the Far East and the Arctic will strengthen security in these regions,” Netkachev added.

Sergey Lunev, professor at the Department of Oriental Studies at MGIMO, feels that India “would like to take an active part in the development of polar riches.” In December 2010, AFK Sistema and ONGC signed a framework cooperation agreement.

India’s participation is now being considered in the development of Trebs and Titov oil fields in the Nenets Autonomous District (their reserves are estimated at 78.9 million tonnes and 63.4 million tonnes respectively).

Russian President Vladimir Putin could sign agreements on these fields when he eventually visits India for the 2014 Indo-Russian annual summit.

Read more indrus.in/world

INDUSTRY: Kamaz CEO says India could become second leading market for its trucks; China, Latin America also priority regions

KAMAZ parts ways with Indian partner, eyes Asia market Russia’s truck maker Kamaz is upbeat about its expansion plan for India and Asian countries.

VIKTOR KUZMIN RIBR

R

ussian truck manufacturer KAMAZ has parted ways with its Indian partner, Vectra Group, with whom it created a joint venture, Kamaz Vectra Motors Limited, in February 2010. The Russian company bought shares from the Indian partner

in December 2013 and wrested full control of the plant with a design capacity of 5,000 trucks per year.

Analyst Narek Avakian of AForex has suggested that disputes with Vectra Group about the results of implemented projects and the slow penetration into the Indian market were principal reasons for the split. Prior to the acquisition of the shares, the group’s share

of Kamaz Vectra Motors Limited’s net loss was a little over $5 million. Now, according to KAMAZ spokesman Oleg Afanasiev, KAMAZ’s stake in the Indian market is less than 1 percent.

In a recent interview with the newspaper Vedomosti, KAMAZ’s CEO Sergey Kogoghin talked about the auto giant’s Indian experiment. “The vehicle, which is produced there, has 80 percent localisation. There had been a joint venture there, but now it is completely our asset. Having localised the vehicle there, we immediately got the

opportunity to work with partners in supplying automotive parts to Russia,” said the CEO. “We have identified three strategic directions: India, the countries of Latin America, and China.”

Avakian believes that, in the next 3-5 years, the Indian market could become second in Asia. India is currently third, as the number two spot is held

by Japan. “I estimate the global market for heavy-duty trucks to be worth about $120 billion of which Kamaz’s share could reach around 5-7 percent, and, therefore, the Russian manufac-

turer’s revenue could exceed $12 billion in the next 3-4 years,” he said.

According to Afanasiev, India could become a base for the expansion of Russian trucks in Asia. While what is made at the Indian plant will be sold in India, the markets of third world countries have not been ruled out for the future. Investcafe analyst Igor Arnautov projects that, in the next 3 to 5 years, Kamaz intends to increase sales to 8,000-10,000 trucks per year, and to increase the Indian plant’s sales to 2,000 trucks per year.

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

E |D |U |C |A |T |I |O |N WEDNESDAY MAY 14, 2014

SYSTEM: The USE, say its advocates, evaluates students’ knowledge more objectively

TRENDS: Students hail from 147 countries

The unified exams puzzle The Unified State Exam (USE), which seeks to curb corruption in college admissions, arouses mixed feelings among students and teachers.

© RIA NOVOSTI

IAN VASLAVSKY

written tests, exams and creative competitions.

Since its inception in 2001, the USE has generated a massive public debate. The discussion reached a fever pitch in 2008 when the USE spread to all regions of Russia and an

RIBR

T

he introduction of a college admissions system based on the Unified State Examination (USE) has ignited a public debate that refuses to die. Whereas previously each university was effectively free to determine its own intake, including the disciplines that students were required to pass (orally or in writing), now the system resembles many of its foreign counterparts. After passing their final exams, school-leavers apply directly to the universities of their choice and then take part in a general selection process based on their USE results. Only federal universities of Russia and some specialised and leading institutes are permitted to set their own entrance examinations (alongside the USE), which may take a variety of forms, including

USE has provided an opportunity for talented students from regions to enter prestigious institutions without patronage. overwhelming majority of high school graduates began to take the exam.

The USE is backed by the government, as well as some college heads and lecturers. They argue that the exam helps reduce corruption in

the university entrance system and evaluates students’ knowledge and skills more objectively than traditional formats. Since the exam uses a wider points scale (100 instead of 5), it is possible to identify the best students.

Besides, the USE allows school-leavers to enter universities located far from where they live, since they are not required to attend in person, but can mail their results instead. In fact, the exam is able to detect talented applicants in the regions who previously would have been unable to sit for entrance exams in the major cities.

The submission of documents is much easier now as the results can be sent to several universities at once, without having to take entrance exams in many different institutes.

The backers of the USE argue that its key advantage is that it allows comparisons to be drawn between the quality

of education in different schools and regions. The computerised checks of the results save time and money as they do not need hired verifiers.

Overall, the tougher requirements of the USE, argue its advocates, are leading to a higher standard of education, better qualified teachers, and improved educational literature. From an international perspective, the exam is similar to the final examinations system in other developed countries (the U.S., Israel, and others), which could eventually lead to the recognition of Russian school certificates abroad.

One of the most prominent adherents of the exam is the rector of the Higher School of Economics, Yaroslav Kuzminov. Representatives of the Ministry of Education and Science also make frequent statement in support of it.

Those negatively inclined include students, parents, lecturers, and some school teachers. Celebrities like Writer Andrei Maximov and satirist Mikhail Zadornov are among the most vocal opponents of USE. The sceptics point out that students tend to score lower in the USE than they do in internal school tests and in traditional exams.

The transition under the USE from a full examination to a test-based system is also criticised for disregarding the ability to formulate a correct answer.

There have also been instances when computerised checks of the USE erroneously marked correct answers as incorrect.

The debate can go on endlessly, but not many will contest that the USE has led to a significant decline in corruption in the school graduation and college admissions procedures. Another positive spin-off is that more talented students from the Russian regions are now able to enter prestigious institutions without patronage.

BRANDING: High quality of education and lower fees are key factors for foreign students

Creating Delhi-Moscow education bridge India and Russia are set to ink a pact for mutual recognition of higher education diplomas.

SERGEY IVANOV

told RIBR. Striking an upbeat note, Prof. Dr. A. Najeerul Ameen, President, AllIndia Foreign Medical Graduates Association, said such an agreement will lead to a five-fold increase of Indian students coming to Russia for higher education.

Just a couple of years ago, 145,900 foreign students were studying in Russia. Today, that figure is rising.

Many students say they come to

RIBR

I

ndia and Russia are poised to sign a deal on the mutual recognition of higher education diplomas, a crucial step that is expected to lead to an upswing in educational and student exchanges. “The text of the agreement is ready and practically approved,” Sergey Karmalito, Senior Counselor at the Russian Embassy in New Delhi,

Russia for the high-quality, inexpensive education. These are future engineers, doctors and teachers. Most of them subsequently return home, but around 35 percent stay back.

This year, the government has allocated more than $1 billion to raise the profile of a Russian education.

Alexander Klimov, the deputy minister of education and science, said the money will go toward developing international ties with institutes of higher education, attracting foreign instructors and supporting foreign students.

The heads of universities are optimistic that more students be heading

Money, prestige and stability: Mantras for popular professions Research shows that medicine, law and finance are the most coveted careers for Russian youth.

ANASTASIA MALTSEVA

S

table career and incomes – this is the reigning mantra for Russian parents who want their children to pursue prestigious, “stable” professions and specialist occupations.

The research conducted by sociologists at the National Research University Higher School of Economics (NRU- HSE) also reveals that creative professions are considered unsuitable because of the lack of financial stability and difficulty in finding future work.

According to the HSE research, the professions considered most desirable for their children by Russian parents include: lawyer (24 percent), doctor (21 percent), economist and accountant (19 percent), entrepreneur, military serviceperson, programmer and systems administrator (14 percent), engineer (13 percent), architect and designer (10 percent), and translator (9 percent).

Very few (3 percent) of those surveyed want to see their children rep-

SHUTTERSTOCK/LEGION-MEDIA

RIBR

resented in the creative professions – as performers, writers, or artists. Only 6 and 7 percent want to see them as politicians, sportsmen, journalists, and skilled workers.

In mass consciousness the professions of lawyer and economist are associated with a stable income and career opportunities, explains Konstantin Fursov, a researcher at the NRU HSE and the head of the research project, titled “Monitoring the innovative behavior of the population.”

And being a doctor has always been considered prestigious work although it has only now gained popularity among the parents of matriculates.

With the development of private medicine and voluntary health insurance, doctors’ incomes have started to increase. Against this backdrop, the country’s authorities have increased the number of funded positions in Russian universities in the areas of medicine, engineering and technology, and natural sciences.

According to data provided by the Russian Ministry of Education, in 2013 the total matriculation in the areas of economics and management had reduced to 19.8 percent.

The data also shows that a quarter of upper classmen are oriented toward the opinion of their parents when it comes to selecting a profession and one in five make their decision about the future by relying on information published in internet resources.

An employment recruitment portal analysed the preferences of upperclassmen and discovered that they choose a profession based on two key parameters: income and the possibility of quickly and easily building a career. The prestige of the profession, social status, self-realisation, and the opportunity to help others is important for only one in ten matriculates.

That’s why there are not many takers for courses in humanities.

to Russia provided the country creates the right conditions.

“When they come to Russia, students are looking for similar conditions — necessary infrastructure, campuses, and food. The very idea of a campus, a place for communal living, academic cooperation, socialising and relaxing, is attractive to young people and is a powerful factor in drawing foreign students, who simply don’t imagine a university without a campus,” said Vladimir Filippov, the rector of the Peoples’ Friendship University of Russia, which is home to a large number of international students.

ARKADY KOLYBALOV / RG

PFUR continues to enjoy global reputation: Rector Vladimir Filippov, rector of PFUR, talks about the evolution of the university as a global brand.

MUNZER HALLUM RIBR

What has changed in the way the Peoples’ Friendship University of Russia (PFUR) prepares its graduates as compared with the Soviet period?

In Soviet times, 30-40 years ago, higher education in all countries was quite elite. Over the past 20 years, higher education worldwide has moved into the category of mass education. PFUR was established in 1960 as the Patrice Lumumba People’s Friendship University to provide higher and professional education for students from developing countries. Its first class, comprising students from 47 countries, graduated in 1965. Today it is considered one of Russia’s leading institutes of higher education with more than 29,000 students. Russian degrees in engineering, physics, mathematics and medical science continue to enjoy recognition in the world because in Russia we have state standards of higher education. This is a guarantee that specific subjects will be learned and an exact number of academic hours will be allocated to teach these subjects.

Do you have enough staff to ensure compliance with these standards?

We had a big problem with personnel in humanities, especially in the 1990s. As far as the scientific disciplines (mathematics, physics and chemistry) are concerned, we had some cushion. We, fortunately, had enough qualified teachers in the scientific and engineering disciplines.

To what extent is PFUR connected with the real needs of society?

Students from 147 countries are studying at PFUR this year. As the rector, I can’t take into consideration the needs of 147 countries. I have to give fundamental knowledge to these students, to enable PUFR graduates, on their return to their homelands, to work in public service industries, at universities or in business.

What is the percentage of Russian citizens among the students?

In the Soviet era, PFUR’s student body was 70 percent foreigners and 30 percent Soviet citizens. Currently, the situation is the opposite: we have 70 percent Russians and 30 percent foreigners. Thirty percent of the Russians attend for free, thanks to the state budget and 70 percent of them pay tuition and fees. This is a sign of public demand for a good education, in particular for a good knowledge of foreign languages. We have foreseen the needs and set a goal for ourselves: each person to graduate from PFUR should know at least two foreign languages.

Are any courses taught in foreign languages?

We have master’s programmes in English and Spanish. We have some groups that are taught only in English from the first academic year to the last one, even in the medical faculty.

How are students admitted to PFUR? There is a special commission under the Ministry of Education and Science of Russia that reviews the case of every foreigner applying for admission as a student for a free state-funded place.

The requirement for admission is a score of at least 70 percent from the results of the school curriculum.

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

T |O |U |R |I |S |M WEDNESDAY MAY 14, 2014

TOURISM: Kremlin museums are a mine of rare treasures like Imperial Crown, the Orlov Diamond, Coronation Trousseau and Monomakh’s Cap

Get a feel of undying glory and grandeur of royal regalia, crown jewels of Russia A visit to the Moscow Kremlin opens a new window to the vanished world of Russia’s royal magnificence.

Maharajas’ gems dazzle Russians

RIBR

T

Coronation Trousseau Russian Emperor Peter the Great died in 1725, without leaving a male heir. Instead, Peter left two daughters born out of wedlock – Elizabeth and Anna. After Peter’s death, the rule passed first to his widow, Catherine I; next, to his grandson; and, finally, to his niece. In 1741, Elizabeth seized the throne in a palace coup – one of many to occur in the 18th century.

When the new czaritsa was crowned, a special coronation trousseau was sewn of smooth silver brocade embroidered with gold. It is kept today in the Armory Chamber of the Moscow Kremlin. The dress was made in Russia – it was important to show that the empress was not as fond of foreigners as her predecessors had been. The trousseau was cut according to the fashion of the day: gigantic, as

From left to right: Coronation Trousseau of Empress Elizabeth. Monomakh’s Cap (Coronation regalia of the czars). The Imperial Crown of Russia.

Kremlin factfile: Past and present ● Originally, the word “kremlin” means fortress. The most famous kremlins are in Moscow, Kazan and Astrakhan. ● Moscow Kremlin was built in the 14th century. With the exception of two centuries when St Petersburg was the capital, Moscow Kremlin has always been the seat of the government. Currently, Kremlin is the residence of President of Russia. ● Moscow Kremlin was an inauguration place and dynastic necropolis of Russian tsars. ● Moscow Kremlin consists of renowned museums.

wide as a person’s height.

Elizabeth was considered one of the most beautiful women of her era, and she adored dresses. When she died 20 years after being crowned, she left 15,000 dresses, a chest of stockings, an empty royal treasury, an unfinished

Ireland, and is currently on display in the Moscow Kremlin Armoury State Diamond Fund. The crown is adorned with 4936 diamonds arranged in splendid patterns across its entire surface. Bordering the edges of the “mitre” are a number of fine, large white pearls. It is also decorated with one of the seven historic stones of the Russian Diamond Collection: a large precious red spinel weighing 398.72 carats.

Tracing the Majestic Design

NATALIA MIKHAYLENKO

Monomakh’s Cap Monomakh’s Cap is a conical, golden headpiece, adorned with precious stones and trimmed with sable fur.

The story goes that the golden skullcap was presented by the Tatar Uzbek Khan to the Prince of Moscow, Ivan I Kalita, in the 14th century.

The prince was a loyal ally and vassal of the Tatar Mongols, who had conquered ancient Russia a century before his rule. A little over a century later, Ivan Kalita’s descendant, Ivan III, defeated the Tatars and became an independent monarch. After the fall of Byzantium, the czardom of Muscovy was left as the last remaining Orthodox kingdom.

The Monomakh’s Cap was used to crown Russia’s monarchs. The last czar to be crowned with Monomakh’s Cap was Ivan V, the elder brother of the great reformer and first emperor, Peter the Great. Ivan and Peter were jointly crowned in one ceremony, with a copy of Monomakh’s Cap being made for the younger of the two.

After this, the czars took the title of emperors, and the ancient crown was not used again until 2002, when a copy of the crown was made for Russian President Vladimir Putin’s 50th birthday and given to him as a gift.

ITAR-TASS (3)

he royal regalia of Russia’s monarchs are kept in the Moscow Kremlin – the ancient capital of the grand princes and czars. The most famous item is the golden Cap of Monomakh, also known as the ancient Russian crown.

Winter Palace (the future building of the State Hermitage) and colossal debts.

Imperial Crown of Russia The Imperial Crown of Russia, also known as the Great Imperial Crown,

was used by the Emperors of Russia until the monarchy’s abolition in 1917.

The Great Imperial Crown was first used in a coronation by Catherine II, and was last used at the coronation of Nicholas II. It survived the subsequent revolution and a temporary sojourn in

The Orlov Diamond The Armory at the Moscow Kremlin is home to Catherine the Great’s imperial scepter, which is set with a huge, green-tinted diamond, with 180 facets and a weight of 189.6 carats. This legendary diamond was discovered in India at the end of the 17th century.

At the end of the 18th century, it was bought by the Armenian jeweler and banker Ivan Lazarev, who was in the service of the Russian government. In turn, the diamond was purchased from Lazarev by Count Orlov.

Alexei Orlov was one of Catherine’s favourites and a patron of the sciences.

He presented the diamond as a gift to the empress, and she ordered it to be set in her coronation scepter and named in honor of the count.

The Russian emperors’ regalia have an Indian connection. “It is not accidental. The Russian tsars and emperors’ regalia are kept in the Moscow Kremlin, and plenty of them are decorated with legendary gems that came a long way from India,” says Ekaterina Shcherbina, curator of the exhibition entitled “India: Jewellery that conquered the world” at the Museums of the Moscow Kremlin.

Besides, the organisers of the exhibition have been lately in cooperation with European jewellers such as Cartier, and, according to Ekaterina, there is an evident “Indian trace” in their works. The jewellery of the Indian maharajas have always been a symbol of exorbitant luxury and grandeur for Europe. Ekaterina opines that compared to Europe the Russian attitude towards gems is more Oriental.

People admire the natural beauty of gems, and not the refined preciseness of their facets. Among Ekaterina’s favourite exhibits are a small jade Taviz pendant incrusted with gems (Victoria and Albert Museum collection, London), a golden Vanki bracelet with a hammered design (BarbierMueller collection, Geneva), a golden hookah with incredible enamel setting (Khalili museum collection, London), an earring with a diamond flower, bell pendant and pearl string (Al-Sabakh collection, Kuweit). The exhibition is attracting an unending stream of visitors. In the Russian society Indian culture is very popular, and a chance to see the true masterpieces of the jewellery with their own eyes makes many people happy, says Ekaterina.

The curator says that she has learnt a lot about India while preparing the exhibition and that she would love to visit outstanding Indian cities like Delhi, Mumbai, Hyderabad and Madurai.

PRESS PHOTO

SEMYON KVASHA

Turban crown. Lucknow, the late XIXh century.The Khalili Collection, London.

WAR Strikeball shooting-range, great military operation reconstructions, war nurse courses and a huge artillery exhibition

RUSSIAN COLOURS

THE FOURTH INTERNATIONAL HISTORICAL FESTIVAL TIMES & EPOCHS (AGES), WHICH IS DEDICATED TO THE ONE HUNDREDTH ANNIVERSARY OF WORLD WAR I, WILL TAKE PLACE AT THE KOLOMENSKOYE HISTORICAL AND ARCHITECTURAL MUSEUM AND RESERVE ON JUNE 7 AND 8

In 2014, in honour of the 100th anniversary of the First World War the theme of the festival will be the beginning of the twentieth century – the era of the First World War and of the revolutions.

You will be able to see the first Russian cinematography, to take part in the work of the first underground printing office and to try outfits from various XIX-XX century fashion ateliers. You can also try and win over the local strongmen in national Russian combat tournaments, to buy vintage items in antique shops and to walk between the camps of the European army, becoming a witness to the famous battles of the First World War. At the beginning of the summer on the embankments of the Moscow River the best historical clubs of the world will showcase the reconstruction of the early XXth century.

These include The Victorian Military Society of 1837-1914 and the Great War Society (England), Association du Poilu de la Marne (France), 33rd Division (USA), Deutsches Rotes Kreuz (Germany) and Front-Line Eesti (Estonia).

PEACE Fashion shows with dresses from the beginning of the 20th century, a retro car exhibition, street cinema, picnic ‘a la russe’ and retro music band concerts

PEACE Holiday guests will be able to see real power miracles of one of the most mysterious scientists of the XXth century – Nikola Tesla. By the way, some believe that it was his experiments, which contributed to the emergence of the so-called Tunguska explosion in Siberia, better known in the country as the Tunguska event.

THE ARRIVAL OF THE ROYAL ROMANOV FAMILY RECONSTRUCTION, GYPSY MUSICIANS, STREET CIRCUS AND THEATRE, COW AND GEESE TRADE, AS WELL AS CHASTOOSHKI SINGING

WAR GAMES Fans of military history will have the opportunity to see the ancient battle of armoured cars, to touch models of combat airplanes and field guns and to even be trained by experienced gunners. The highlight” of the festival will be the reconstruction of one of the key battles of World War I - the Brusilov Offensive.

THE RUSSIAN SPIRIT Those who came to Moscow to witness the true Russian spirit will be able to visit a real street gipsy circus with a trained bear, acrobats and jugglers.

Rejoice, there is free admission to the festival.

This event will be held with the assistance of the Moscow Committee for Tourism and the Hotel Industry and the City tourist portal travel2moscow.com