Russia India
Aviation set to soar Business deals signed at the MAKS 2009 air show P.08-09
REPORT
...Marching towards a common future A Business Report from The Economic Times In association with Rossiyskaya Gazeta MUMBAI ● NEW DELHI
Wednesday, September 09, 2009
THE ECONOMIC TIMES
Nuclear partnership Overcoming the problems
Indian writers in Moscow Star attraction at global book fair
To the heart of Russia Trans-Siberian adventures
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P.07
P.15
Cinema
H1N1, access denied!
Necessary precautions A new barrier has been erected between Russia and the USA and between Russia and the UK. Surely not another ColdWar? In fact, Russia has put up the barrier to keep out something rather hot – the high temperature which accompanies swine flu. Medical checks have been introduced on planes arriving from countries suffering widespread cases of infection, which include Britain and America. In a couple of seconds, a special device takes the temperature of incoming passengers,after which you hear a friendly “Welcome: Russia is open to you!”Although, those carrying the flu virus are denied entry.The radical measure is, say some, unduly severe. Russia’s chief medical officer, however, believes this barrier is the only way to prevent a mass epidemic.There’s a saying that those who win are never judged: so far, in the war against swine flu, Russia looks like a winner.
Bollywood returns to Russian screens Indian films are returning to Russian cinemas. As part of the Year of India in Russia, a series of major film events are including Indian film festivals. The exhibition “The History of Indian Cinema (Bollywood)” will also take place in various Russian cities.
DENIS RUSINOV_ITAR-TASS
OXANA NARALENKOVA RIR
READ MORE ON PAGE 11
SERGEY GUNEEV_RIA NOVOSTI
Heads of state meet Russia and India confirm strategic relationship The development of relations with India was and will be one of the priorities of Russia’s foreign policy, President Dmitry Medvedev said,speaking at a solemn ceremony devoted to the Year of India in Russia at the presence of Indian President Pratibha Devisingh Patil. During the talks, Medvedev mentioned "your visit proves of further development of special strategic partnership
between Russia and India." The Russian president recalled that recently, Russia and India has had bilateral and multilateral contacts at different levels, in particular, at the SCO summit inYekaterinburg and the BRIC summit. "Such dialogue is very useful," he added. Medvedev mentioned that trade turnover between Russia and India could reach $10 bn in the short-term period. "Even under the crisis condi-
tions, our relations develop dynamically," he said. "The Indian people are always attached to Russia and India has always supported the strengthening of close relations with Russia.The development and the strengthening of these relations has always remained the priority task of India's foreign policy," Patil stressed. FOR AN EXPERT OPINION, TURN TO PAGE 12
The first screenings took place at the 31st Moscow International Film Festival.An Indian week was also part of the 14th St Petersburg International Film Festival in June. Films included the drama Yarwng, shot in the indigenous Kokborok tribal language by Catholic priest Father Joseph Pulinthanath; the first film directed by Bollywood star Aamir Khan, Like Stars On Earth, which was India's official entry to The Oscars; Four Chapters from young Calcuttan director Suman Mukhopadhyay; Priyadarshan’s The Wedding Sari; Indian James Bond; and Fashion from leading Indian director Madhur Bhandarkar. In addition, retrospective screenings were held of films by the famous Indian director Shyam Benegal, member of the jury at the 31st Moscow International Film Festival. The Russian passion for Indian films, born in the USSR, continues to grow in the modern day. It was in the 1950s that Soviet moviegoers first discovered “the distant India of miracles”. CONTINUED ON PAGE 5
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BOOKMARKS
RUSSIA INDIA REPORT
Business
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
www.rbcnews.com English-language business news en.rian.ru/business RIA Novosti newswire www.troika.ru/eng/start.wbp Troika Dialog, the oldest and largest private investment bank in the CIS
Prospects After all the doom and gloom of the last year, recent economic analysis shows reasons for optimism
Business news
Crisis second wave will not hit hard
Three into one for the WTO
SERGEY SAVOSTIANOV_RG
The Russian stock market is heading for recovery after its record plunge in the winter of 2008, with Russia’s benchmark Russian Trading System index more than doubling from 498 at the end of January to 1,067 in August. Most analysts are optimistic, and believe investors are likely to see positive returns. In the first of a series of pieces from prominent investment professionals, Pavel Teplukhin, chairman of Troika Dialog Asset Management, assesses the situation. Russia’s financial markets are more a reflection of the US economy than of Russia’s. This is because market conditions are largely determined by foreigners, one of three distinct groups influencing the markets. The second group, the Russian government, follows a“buy and hold” principle and eschews short-term speculation. The third group consists of Russian institutional investors, who make long-term equity investments and follow a highly cautious strategy.You also have the “cowboys”acting at their own risk and peril, of course, but these investors have almost no impact on market dynamics. Six months of growth in the US market is pushing up Russian stock indexes. The oil price is another key driver for the Russian market. Today, it is well below its previous highs: if it rises, Russian stocks will rise as well. Unfortunately, the Russian government and market participants have very little influence on these indexes. Russian fundamentals certainly are present, but they have no impact on the stock market whatsoever. However, this connection might reappear several years from now, when economic growth leads to increased investments into core capital – new manufacturing sites will appear, plants, factories, property, etc. For now, Russian businesses aren’t even operating their existing factories at full capacity.
Withstanding the global crisis Russia was first hit by the global crisis in September 2008, almost a year after the start of the banking crisis in the US. The collapse of Lehman Broth-
RN Dossier Pavel Teplukhin was one of the founders of Troika Dialog in 1991 and has been president of Troika Dialog Asset Management since 1997. He pioneered mutual investment funds in Russia and is one of the authors of the federal law on mutual investment funds. Dr Teplukhin has advanced degrees in economics and statistics from Moscow State University and gained a masters degree in economics from the London School of Economics. He has topped the national rankings as best financial manager, and in 2006 was awarded the Silver Archer national prize as Person of the Year. In 2007, Teplukhin was named among the 20 Rising Stars of Wealth Management by Institutional Investor. He is a chevalier of the Tatischev Order for Service to the Homeland.
ers, one of the biggest portfolio investors on the Russian market, caused foreign banks to close their limits for emerging markets. Basically, a bankruptcy of that calibre causes a systemic shock. At that time, Lehman was one of the world’s biggests investment banks, which was linked one way or another to enormous financial currents. Everyone expected the US government to help out, like it did with other large investment banks. But no help was offered. A failure then occurred, a crisis of trust. This was Russia’s first major brush with the global financial
Merrill Lynch: Russia is recovering Russia’s economy is recovering, but from a lower level than was expected. At first, following rising oil prices, the real sector of the economy will rise, and only later the credit market will improve. Monthly figures indicate the economy has already bottomed out. An interview with Yulia Tsepliayeva, chief economist at Bank of America Securities Merrill Lynсh, will appear online at rbth.ru.
crisis. Companies and major shareholders had been taking loans with their own shares as collateral. Russian financial institutions interacted with Western counteragents. So when all the limits were closed, a jolt set in. Of course, the Russian banking system was hurt, but it survived. It could have been wiped out, but it wasn’t. After Western sources of credit ran dry, Russian companies in the real economy turned to the government for help. There’s nothing shameful about how the Russian government offered help to Russian shareholders and company proprietors: something else was the problem. In September and October of last year, loans were issued in enormous numbers, perhaps without sufficient credit checks into the quality of borrowers. Admittedly, in those conditions this would have been hard, since many of the benchmarks were lost.The loan period was one year and these loans will fall due this autumn. It’s clear that many will not be able to return this money, raising the question of how to proceed – prolongation, restructuring, increasing collateral, etc. One way or another, these procedures will be evident within bank balances, including through increased reserves for problem loans. This accounting measure could cause a loss of positive equity at many banks. If so, they will either have to find additional resources or, if the regulators prove too severe, declare bankruptcy. In fact, this will be the second wave of Russia’s current eco-
nomic crisis. However, accounting issues can be resolved through other accounting means, such as revising asset valuation methods. Such a measure would allow a resolution to the accounting valuation problem and would weaken the second wave. Although the second wave will definitely happen, it’s possible that no one will notice it. Today, it is already clear that the second wave – the banking one – is unlikely to affect the population or the real economy.Whatever loans individuals took out recently were issued by one of half a dozen banks where the situation is not that bad. There hasn’t been much lending to individual borrow-
‘It would be wrong to compare how the US and Russian markets reacted. The US economy goes through a crisis every 10 years, and has even developed a certain immunity’ ers. As for real economy companies, they too borrowed from a few select banks, and last year borrowed very little. In the first two quarters of the 2009 financial year, the US financial sector made a sharp upturn. Many banks are reporting major profits. However, this is due to changes in valuation standards recently initiated by the US regulators.This caused profits to appear unex-
The national benchmark RTS stock index during the crisis
pectedly, and big ones at that. Last year, we saw record writedowns. Meanwhile, the banks continue doing pretty much the same thing.The Russian financial sector has quite a bit of “paper” losses which can quickly turn into“paper”profits. All that is required is a revision of accounting mechanisms and valuations.
Not accustomed to economic crises Russia experienced a drop in output during the first quarter of 2009, the likes of which was unheard of even during WWII. This is indeed difficult to comprehend. But the situation in other former Soviet countries, such as Ukraine, the Baltic states and Central Asia, is even worse. It would be wrong to compare how the US and Russian markets reacted to the economic crisis. The US economy goes through a crisis every 10 years, and has even developed a certain immunity. A legislative block is in place, as well as rules guiding the government’s reaction. As for Russia, this is just the second powerful shock. We still aren’t used to this, and we don’t know how to react.We still believed in certain ideals regarding the free market. Now we understand that liberal economics has its pluses and minuses. The US economy is expected to begin recovery in late 2009 or early 2010.These expectations are still on track. This means that the Russian stock market is also heading for stable growth and could regain its pre-crisis position in two to three years, provided that Russian industry starts operating at maximum capacity. The export-oriented industries will be the first to benefit from the global recovery and spring back to life.These include metals, especially non-ferrous metallurgy, as well as oil and gas companies. However, due to domestic consumption, the gas companies will benefit less. This group will include a number of venture capital companies also geared toward Western markets – first and foremost in the IT sector.
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Prepared by Vladislav Kuzmichev
The Customs Union of Belarus, Russia and Kazakhstan has formed a World Trade Organisation accession working group, said Russian deputy prime minister Igor Shuvalov, following the seventh Customs Union meeting in Moscow. The group will be entitled to speak on behalf of both the Customs Union and national governments,after the three countries upheld their June decision to abstain from separate negotiations with the WTO, forming a single negotiation group instead. This decision is based on mutual trust.“It does not really matter whether we finally opt for bilateral relations with the WTO, or act as a part of the Customs Union, or both,”said Shuvalov.“It’s only a matter of paperwork.” RBC
Regions may soon borrow abroad According to a draft law recently submitted to the parliament, the Russian government plans to permit Russian regions to float their bonds on foreign markets. A region contemplating a bond issue will need positive, investment-grade ratings from the world’s two biggest credit-rating agencies.According to the Bank of Moscow’s Egor Fedorov, the international demand for high-quality regional bonds is now on the rise, and the bonds of Russian regions can be an increasingly attractive option for foreign investors, provided the investment climate remains stable. “The regions could take full advantage of the new opportunity to generate extra cash,”said Fedorov. Vedomosti
Diamonds for football The Russian Football League, together with the Choron Diamond company, are offering a new prize to the winner of the Russian football championship in 2010.The prize will be awarded to the football club whose professional and youth teams perform the strongest during the season.The prize is in the shape (and size) of a real football and contains 2,5 kilos of 585-quality Gold as well as 33140 white and 10728 black diamonds. The ball's value is estimated at around $1 mn.The winning team will also receive a trophy case to hold the prize. A. Zelenkov
BOOKMARKS
www.bric-competition.com BRIC International Competition Conference website www.economy.gov.ru Ministry of Economic Development of the Russian Federation
RUSSIA INDIA REPORT
Markets Brazil, Russia, India and China are planning to fight international cartels as one
New polymer plant launched in Tatarstan
BRICs acting together
VLADISLAV KUZMICHEV
VASILIY ALEXANDROV_PHOTOXPRESS
RUSSIA NOW
The conference plenary session was opened by Russian first deputy prime minister Igor Shuvalov, who said the economic potential of BRIC countries is the most promising in the world. By 2039, these countries, home to nearly half the planet’s population, will have overtaken the Big Six in economic development. However, to this end, it is imperative the BRIC countries begin work on improving anti-monopoly legislation. Although Russia’s anti-monopoly legislation is now, according to Shuvalev, one of the best in the world, competition must still be defended, not only from private monopolies, but from government itself. “If we ask entrepreneurs from any one of our countries what has the greatest effect on competition and business, they will mention first of all, not cartels and monopolies, but the abuse
of office by officials,”said Shuvalov.“They will mention the preferences government officials give to certain companies and enterprises. Therefore, in drafting Russian anti-monopoly legislation, we have included the opportunity to oppose such preferences. This is important for all countries counting on fast growth in the post-crisis world – especially the BRIC countries, which have developed in the past as a result of government efforts.”This is why Federal Anti-Monopoly Services in Russia are actively working in a comparatively new direction, fighting preferences on the part of state officials.To this end, for example, the second package of anti-monopoly laws has stiffened punishment: fines have been instituted and even a disqualification of up to three years. As before, anti-monopolists consider the fight against cartels a priority. Shuvalov also addressed complaints about the Big Six, which do not always play according to the rules and whose markets are not sufficiently open for BRIC goods.“On the world market, competition is often organised by protectionism of various countries, including WTO lead-
Global Russia business calendar Russia Today, Business Briefing 2009 September 28, London Chamber of Commerce and Industry, London, UK Russia remains a key long-term market for UK businesses. The UK accounts for 2pc of Russian imports, and UK exports to Russia were valued at £4.1bn in 2008. British goods and
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Opinion Expect slower growth in recovery JAMES DOWEY
Russia's Alabuga Special Economic Zone (SEZ), located in the automobile-producing Republic of Tatarstan, recently welcomed the opening of a new polymer factory.
Anti-monopoly service leaders from BRIC (Brazil, Russia, India and China) have decided to join forces against the formation of cartels. They met on September 1 in Kazan at the BRIC International Competition Conference and defined the main aims of their co-operation.
Economy
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
ers,” said Shuvalov.“The food markets, for instance, of countries like Japan, the United States and European Union members have been closed in recent years. India and China are not able to promote agricultural production, which hinders economic growth.” During the Kazan meeting, representatives of BRIC competition services formed working groups to study different problems, including the formation of cartels. According to Federal Anti-Monopoly Service chief Igor Artemyev, BRIC country anti-monopolists have agreed to exchange information about international-scale price fixing. Another group will study state purchases. Russia’s BRIC partners are ready to use Russian experience in introducing electronic auctions. All BRIC members agreed that such auctions represent not only a real step forward in the fight against corruption but an enormous economy of government means. On the eve of the conference, this new package of anti-monopoly laws came into effect in Russia.
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Based on materials of Rossiyskaya Gazeta
In midsummer 2009, Polimatiz, a new polymer production facility, went into operation in Tatarstan’s Alabuga Special Economic Zone (SEZ). In addition to being the crowning glory of construction within the Russian polymer industry, it also added a new element for car makers in the region. The new facility was built close to such polymer industry leaders as Nizhnekamskneftekhim, OAO Kazanorgsyntez, Ufakhimprom and Salavatnefteorgsyntez as well as the Sollers-Elabuga and Seve r s t a l av t o - I S U Z U a u t o plants. Another SEZ neighbour is KAMAZ, whose trucks have been regular winners of many prestigious international rallies. Today Russia has 13 special economic zones of three types: production, research and development, and tourism and leisure. SEZs are granted tax, customs, administrative and land use privileges and are exempt from any possible tightening in Russian tax legislation. As of July 1, 2009, all SEZ territories had 184 officially registered residents (24 in industrial and production zones, 142 in R&D zones and 18 in tourism and leisure zones). The total investments of the SEZ residents amounted to 19.9bn roubles. Polimatiz’s annual capacity is 3,500 tonnes of staple fibre, 1,800 tonnes of needle felt, 560,000 of car carpeting sets and 9,400 tonnes of spunbond/ meltblown.
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ECONOMIST, NEPTUNE INVESTMENT MANAGEMENT
After three years of 7.5pc average annual growth, the Russian economy, along with the global economy, has been in recession for the first half of this year. What are the prospects in the coming months? Can the country return to the growth seen between 2006 and 2008? A sharp decline in output came in the first quarter – a much milder contraction followed in the second. It looks likely bottom will be reached in the third quarter. The economy would then be positioned to start growing; recent business surveys appear to corroborate this encouraging view. There are two reasons to believe Russia is past its worst. External demand will be crucial to recovery, giving support to the prices of exports – global conditions have stabilised. Second, the Russian government has reacted to the downturn with strong short-term fiscal policy, which should support domestic demand. Immediate recovery is likely to be subdued by lack of credit, but not to the same degree as developed economies. Prior to the collapse of Lehman Brothers, foreign lenders played an important role financing the Russian banking sector. When global risk appetite vanished following the Lehman news, investors and banks pulled funds out of Russia, curtailing domestic credit supply. As Mervyn King, the Bank of England governor, has commented, banks live internationally but die nationally. Western banks are not soon likely to resume lending to Russia in large volumes.
expertise will remain in demand regardless of the current economic dip. The participants of the event will find out more about how their companies can crunch the crisis and realise potential market opportunities in Russia.
the opportunity for all industry stakeholders to debate the way forward for Sakhalin’s oil and gas sector.
www.londonchamber.co.uk
6th Annual Russian CFO Summit October 27-30, Marriott Grand Hotel, Moscow
Sakhalin Oil and Gas 2009, 13th Annual Conference & Exhibition September 30-October 2, Sakhincentre, Yuzhno-Sakhalinsk, Russia The aim of this meeting is to provide a high-level platform for both the Russian government and leading oil and gas operators in Sakhalin to provide detailed project updates, outline strategic development plans for the future, and to offer
www.adamsmithconferences.com
The summit is the foremost gathering of CFOs and senior finance professionals in Russia, annually attracting 400 senior executives from throughout Russia and the rest of the world. www.adamsmithconferences.com
Find more in the Global Calendar at www.rbth.ru
However, recent growth of Russia’s middle class has not been based on credit growth but strong income growth. Real income per head in Russia almost doubled between 1999 and 2008, raising purchasing power and living standards. Once employment and the economy start growing again, Russia’s main driver of consumption will be back on track. Can the Russian economy return to rapid growth in the medium term? Probably not, but this is not necessarily bad. Growth of 7-8pc was dependent on an extraordinary global boom that has now ended. Global growth was close to 5pc a year, but our projection for the next five years is less than 3pc. This environment will provide less impetus for Russian growth based on external demand. Also, Russia was never entirely comfortable with 7-8pc annual growth. With capital investment as a share of GDP of less than 20pc (compared with more than 40pc and 30pc in China and India respectively), such high GDP growth was straining the country’s productive capacity, giving rise to high inflation. Growth of around 5-6pc per year, which we believe possible, would result in a more balanced economy and a better investment environment. Russia’s shock came from a period of excessive global financial leverage and its subsequent collapse. Longer-term growth potential based on a large, under-capitalised, innovative, resource-rich economy remains. Lower external leverage and slower growth would be a good thing for Russia.
VIII International Investment Forum Sochi 2009 September 17-20, Sochi, Russia The forum facilitates discussions about projects, new opportunities and areas in need of investment, with foreign investors having a chance to detail their experiences and concerns. In addition, lawmakers and state representatives are able to debate new initiatives aimed at raising investment attractiveness in Russia. www.forumkuban.com
04
BOOKMARKS
RUSSIA INDIA REPORT
Energy
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
www.gazprom.com Gazprom official website en.rian.ru/business RIA Novosti newswire www.rbcnews.com English-language business news www.oilru.com/or/39 Oil of Russia magazine LEV FEDOSEEV_ITAR -TASS
Project Moscow is diversifying gas transportation routes to boost export to Asia
On 18 February 2009, Russian President Dmitry Medvedev opened Russia’s first liquefied natural gas (LNG) plant built by Sakhalin Energy as part of the Sakhalin II infrastructure.
Gazprom building gas link to Asia
ALEXEY NIKOLSKY_RIA NOVOSTI
Gazprom, the world's largest gas company, this summer embarked on an ambitious project to build a new pipeline stretching from the gas-rich island of Sakhalin to Khabarovsk and onward to Vladivostok on the Pacific Coast. The project will energise development in Eastern Siberia and Russia’s Far East, boosting regional economies and delivering Russian gas to Asian markets. YURI SOLOZOBOV RIR
The first section of the pipeline to be launched will be 1,350 km long with an annual capacity of 6 bn cubic metres. The pipeline’s total planned length is approx. 1,800 km, and the pipeline will carry up to 30 bn cubic metres of gas annually.This year 50 bn roubles will be spent on construction; figures for 2010 and 2011 are yet to be released, but total costs are estimated at approximately 150 bn roubles. Gazprom plans to build a liquefied natural gas (LNG) plant in Vladivostok and sell production to Asian partners.The new pipeline’s launch is anticipated prior to the opening of the AsiaPacific Economic Co-operation (APEC) summit scheduled for 2012 in Vladivostok. Russian leaders will use the event to send a clear message to the world that Russia will not sit on its vast Far Eastern reserves like a dog in the manger. On the contrary, leading foreign companies are welcome to share in the development of these rich regions and they should not miss out on a historic opportunity to “conquer”Siberia. Construction of the SakhalinKhabarovsk-Vladivostok pipeline is the keystone of the Russian government’s sweeping Eastern Gas Programme. Approved in 2007, the programme is aimed at creating a unified system for the production, transportation and processing of gas in Russia’s Far East.Gazprom,the project’s
principal co-ordinator, plans to create new gas hubs in the area, along with new gas refining facilities and gas chemical plants. The government has targeted four gas producing centres, including theYakutia, Sakhalin, Krasnoyarsk and Kamchatka regions, with reserves totalling 8 trln cubic metres of gas.The first stage of the programme includes construction of the SakhalinKhabarovsk-Vladivostok pipeline, to be followed by a project to secure sufficient gas supply to the Kamchatka region. Further plans feature the accelerated development of deposits in Sakhalin, Kamchatka and the Republic of Sakha (Yakutia), as well as the construction of another gas pipeline from Yakutia to Khabarovsk and Vladivostok, with possible offshoots to China and Korea. In fact, Eastern Russia’s gas industry will be created from
Sakhalin 3 Sakhalin-3 is a promising oil and gas field located on the island’s coastline. Reserves here are estimated at 700 mn tonnes of oil and 1.3 trln cubic metres of gas. The license for Sakhalin-3 is held by Gazprom.
scratch. Currently, a mere 6-7 pc of the Russian Far East region is supplied with gas, a far cry from the country’s average 60 pc. The government’s gas programme will bring gas to over 500 locations across the Far East. Gazprom expects demand for gas in the area to quadruple over the next five years, from 5 bn cubic metres in 2010 to 20 bn cubic metres by 2015. But the programme is not aimed only towards household consumption. New generating capacities and state-of-the-art
technology are needed, too. The Sakhalin-KhabarovskVladivostok pipeline and the entire Eastern Gas Programme are vital to both the Russian government and Gazprom. The pipeline’s significance is emphasised by the fact that Gazprom did not hesitate to increase pipeline financing at the expense of other projects. And Gazprom will get its money’s worth.As part of the deal to coordinate the programme, the company was awarded licenses for several gas fields without any competition, including three blocks within the Sakhalin-3 field and the Zapadno-Kamchatsky field on the Okhotsk Sea shelf (see Box).The major challenge for the new project,which will cost Gazprom some $11 bn, is to accelerate the development of resources. Concerns have been raised,however, that Gazprom won’t begin producing from the Sakhalin-3 field until 2014, while the new pipeline will come online in
Energy No consensus on oil production shortages
Oil's empty prospects The world will face a “catastrophic energy crunch” within five years, warns Dr Fatih Birol, chief economist of the International Energy Agency (IEA). Russian analysts are less certain, but say that, in the future, Russia will launch 60 pc of the new oil fields. OLGA SENINA RIR
The IEA report is based on the assessment of more than 800 oil fields, accounting for 75 pc of global reserves. Forecasters reason that the largest fields are running short of oil, and independent oil producers have already peaked. The IEA experts say that oil production declined at the rate of 6.7 pc in 2008 com-
pared to 3.7 pc in 2007.They believe most oil fields will not be able to ensure adequate supply in case of post-crisis demand recovery.The situation is aggravated by under-investment in production, Dr Birol told the British press. Anatoly Dmitrievsky, director of the Institute of Oil and Gas Problems (Russian Academy of Sciences), points out that $280 bn of investment into the development of global oil reserves has been postponed due to the global financial crisis. He further notes that, while it might take from several months to a couple of years to overcome the crisis, it takes at least five to seven years to kick-start development of a new oil field. According to IEA estimates,
global oil production will peak in 10 years, which will be followed by a decline. By 2030,“six Saudi Arabias”will be required for the global economy to meet its energy needs, said Dr Birol. Interestingly, until the end of last year, IEA oil production forecasts were based on demand analysis, but now the Agency also takes account of geological data, thereby implicitly acknowledging the concerns of advocates of the peak oil theory developed by geophysicist M King Hubbert. Dmitrievsky, who shares IEA concerns regarding the low rate of new developments, believes peak production forecasts are driven by economic as well as resource factors. Low oil prices are hardly conducive to invest-
Sakhalin 1 Sakhalin-1’s reserves are estimated at 485 bn cubic metres of gas and 2.3 bn barrels of oil. American company Exxon Neftegas Limited and Sodeco of Japan each have a 30 pc stake in the project, while Russia’s Rosneft and India’s ONGC hold 20 pc each. Total costs are estimated at $7.1 bn. Sakhalin-1 became profitable last summer.
2011. Gazprom management admits that, in order to kickstart the project, they will have to “co-operate closely” with their American partners. The Russian gas behemoth hopes to use the pipeline to transport gas produced from Sakhalin-1, which is operated by US oil major ExxonMobil (see Insert 2).This is likely to go forward as the Russian government has
ment. For example, shale oil production passes the breakeven point only at $90100 per barrel, to say nothing of new developments in Eastern Siberia, the Arctic shelf and other regions of the world. Of course, oil is a non-renewable resource, but some reserves are yet to be explored. Dmitrievsky is sure that“Russia will launch 60pc of new oil fields”.Although these discoveries have nothing to do with the “cheap oil” era, they let us hope that we are not past the peak just yet. “There could be different views as to when the peak will be reached, but it is obvious the world might possibly run out of proven reserves,”believesValery Nesterov, an analyst with the Troika Dialog Investment Company. Russian oil companies share this view. More than a year ago, Leonid Fedun, vice president of Lukoil, said that Russia would never produce as much oil as in 2007 – almost 10
typically succeeded in finding persuasive arguments to encourage co-operation from Western partners. In return for Sakhalin-1 production, Gazprom could offer American companies participation and ownership stakes in lucrative new projects. Gazprom’s pipeline challenge is largely politically motivated. First, Moscow is paying particular attention to its eastern regions, realising their great potential and fearing weakening influence. Though still poorly developed, Siberia and the Far East are crucial in geopolitical terms. Second, an effort to diversify resources and oil and gas supplies is an important part of Russia’s energy strategy, with special focus on the East. Russia’s national emblem, the double eagle with one head facing East and the other West, is particularly symbolic. CONTINUED ON PAGE 5
mn barrels a day – and would be able to maintain a production level of 8.5-9 mn barrels a day for the next 20 years only given billions of investment in exploration. The problem is that investment is uneven and mirrors price cycles, since oil corporations prefer to spend money only when oil is expensive, says Nesterov. The global crisis plays into the hands of foreign investors who want to pump oil in Russia, believes Nesterov. Shelf development involves multibillions in investment, and, in his opinion, Moscow has come to realise it has few options left: either be tied up in deep water development for 150 years, or engage international corporations with their technical expertise and finance. There is a pretty high chance of the latter scenario; indeed, the rules for foreign investors to access Russian mineral reserves are likely to be loosened, says Nesterov.
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www.oilandgaseurasia.com Oil and gas magazine www.rosatom.ru/en The State Atomic Energy Corporation (Rosatom) www.npcil.nic.in NPCIL website
RUSSIA INDIA REPORT
Good prospects for nuclear partnership
SERGEY KULIKOV_AFP
Shreyans Kumar Jain, head of the Nuclear Power Corporation of India Ltd (NPCIL), has spoken about the construction progress on the Kudankulam nuclear power plant, being built on a Russian design, and about his company’s plans to expand cooperation with Russia.
Speaking in economic terms, over 65 pc of Russia’s gas exports go to Europe, prompting concerns over dependency on the EU. Given Europe’s keen interest in building the Nabucco gas pipeline bypassing Russia, Gazprom’s eastward expansion seems justified. The construction of new pipeline infrastructure and long stretches through harsh climate and rough terrain will come at a price, but Gazprom officials have no doubts the investment will ultimately pay off.The gas giant hopes to produce some 150 bn cubic metres of gas annually in the Far East by 2 0 2 0 . A c c o rd i n g t o a Gazprom press release,“This is close to Russia’s entire export volume to countries outside the CIS.” The new project will allow Gazprom to link its huge Chayandinskoye and Kovykta gas fields to the Asia-Pacific markets. Gazprom knew what it was doing when it defined the maximum capacity of the Sakhalin-Khabarovsk-Vladivostok at an ample 47 bn cubic metres: the new pipeline will service all gas producing areas in Russia’s east. Thanks to their geographic location, the region’s mineral riches will be instrumental in spearheading Russia’s entry into the energy markets of the Asia-Pacific region, with a focus on the US, Japan, Korea, China and India in particular. India, not China, is seen by many as the most likely target of Gazprom’s new project. If growth of gas consumption continues at the current rate, by 2025 India will need some 145 bn cubic metres of gas per year, and will be happy to buy gas from Russia’s Far East. India’s ONGC already has a substantial stake in Sakhalin-1, and is keeping an eye on other oil and gas projects. On the other hand, China has proven a tough partner, unwilling to purchase Rus-
Gas price In the second half of last year, Russia’s export gas prices jumped to their all-time high of $500 per 1,000 cubic metres. Meanwhile, China is offering to buy Russia’s Kovykta gas at a mere $60 per 1,000 cubic metres, citing “the specific nature of China’s planned economy.” By 2010-2015, China’s planned gas prices are expected to reach $140–$150 per 1,000 cubic metres, in line with South Korea’s $140–$160 per 1,000 cubic metres.
sian gas at the price offered. Thus far, Gazprom has no plans to build a pipeline to China. Besides, a shift to China could foster another overly-dependent relationship on one market. Consequently, it is far more reasonable to build a LNG plant and sell production to the vast Asian market. For its part, Gazprom is concentrating on LNG production, seeing it as the key factor in potential gas market expansion.“To a large extent, liquefied natural gas helps gas producers ease their dependence on transit nations; the ‘flexible pipeline’ can be re-directed to the right market as soon as the situation changes,” Stanislav Tsygankov, head of Gazprom’s foreign projects department, explained at Russia’s seventh
Gasprom presence Currently, Gazprom’s presence on the Asia-Pacific market is limited to small LNG supplies to Japan, South Korea, India and China. According to Gazprom Export chief Alexander Medvedev, the supplies will reach 5 mn tonnes toward the end of 2009, rising further to 9.6 mn tonnes next year.
05
Power India’s energy future is in good hands
At Izhorsky engineering plant, St Petersburg, an engineer polishes the interior of a 1,000-megawatt nuclear reactor for the new Indian plant at Kudankulam.
CONTINUED FROM PAGE 4
Energy
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
Oil and Gas Congress in Moscow. Many countries, including the United States, are planning to boost their LNG imports, while leading gas producing nations such as Qatar are betting on LNG exports. Russian experts are also convinced the country should have long been developing its LNG technology, in co-operation with such international giants as America’s СonocoPhillips, ExxonMobil and ChevronTexaco, or Britain’s BP. Russia needs such co-operation if it is to quickly boost its LNG supplies to the Asia-Pacific region (see Insert 4). Given the huge oil and gas reserves in Eastern Russia, the SakhalinKhabarovsk-Vladivostok pipeline could become one of Gazprom’s major export routes in the future. However, Gazprom has no ambition to go it alone in Siberia. The company welcomes reliable partners from both theWest and East to join in its Siberian conquest. Development of the Chayandinskoye deposit in Yakutia, estimated at 1.24 trln cubic metres of gas, requires an efficient method to separate helium and ethane, important strategic resources. This is where Russia’s business community and government are looking for foreign investor support and new technology, and are prepared to provide access to new projects in return. “The Far East and Eastern Siberia are not just part of Russia’s mineral resources, but they form a vital part of global reserves,”Russian Prime Minister Vladimir Putin stated. His words are worth heeding. As US President Woodrow Wilson so aptly put it, Siberia, which holds over 40 pc of global mineral resources, is the biggest prize in the history of humankind after the American conquest. Thus, participation in Russia’s Eastern gas programme will give foreign companies an entry ticket to the race for this grand prix.
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A group of Russian and Indian expertshavejustconcludedameeting at the Kudankulam Power Plant construction site to review progress. What is the status of the construction and when is the launch of Unit 1 expected? Lots of work has been done at the site – electrical systems have been commissioned and a desalination plant, a demineralised water plant and other auxiliary systems have reached the advanced stage of commissioning. Still, we have not met an earlier target: in January 2008, it was decided to load fuel in December 2009.All materials from the Russian Federation will be supplied. However, there are 600 tons of piping, as well as instruments, joints and other items due to be shipped last year that we are still waiting for. These are coming in November, and some materials will arrive only in the first quarter of 2010. India and Russia have reached an agreement on construction of an additional four reactors in Kudankulam. At the same time, India is keen to produce many components locally. When do you expect to sign the commercial contract and begin actual work? We have completed levelling and grading and are ready to start excavation. We have received a techno-commercial offer from Atomstroyexport.We have gone through it. To take care of localisation, we have given them our own proposal. We are building our own plants and components except for the nuclear reactor, steam supply system and turbine generator, which have to come from Russia for Unit 3 and 4, but the rest is available in our country.A big team of our Russian friends have come, seen all these facilities and are satisfied. In the interest of the project (the time and money points of view), detailed proposals have been given to Atomstroyexport, for which negotiation is expected to start by late August or early September. It is our desire that sometime in December, or early next year, we shall start ground breakup for Units 3 and 4. What sites for the construction of new nuclear power plants, in-
FROM PERSONAL ARCHIVES
BOOKMARKS
Shreyans Kumar Jain is Chairman and Managing Director of the Nuclear Power Corporation of India Limited, a public sector enterprise under the Department of Atomic Energy.
cluding with possible Russian andAmericanparticipation,have been identified as suitable? There is a basket of suitable sites. Large reactors can be located at coastal locations only from the point of view of availability of cooling water and easy transportation of large equipment – it is easier through sea routes.We have 4,000 km of coast in India – from Saurashtra toWest Bengal – so there are many places in our country for further expansion. The government of India has selected the best sites available. There are no restrictions from the safety perspective – at one site, eight reactors can be set up. The north east, West Bengal and other regions are is slightly earthquake-prone, but it does not mean that reactors cannot be designed for these locations. It is still better than Japan. Out of four sites identified so far, one is assigned for the Russian Federation. One – Kudankulam – is already under construction, and now two extra reactors have been approved.Very soon there will be approval for an extension of up to six reactors. A site in Jaitapur has been assigned for France, and two for American companies, though these are not yet declared. The 11th Five Year Plan envisages construction of 10 nuclear reactors in India during 20072012. Are these plans actual and where are these reactors expected to be built? The FiveYear Programme was drafted and finalised in 20052006. At that time, it was expected that initiatives by America and the Russian Federation in terms of intergovernmental agreements and IAEA support for the initiative would have been be complete in one year. But it took almost three years and was signed in 2008. So, for
the first two years of the Five Year Programme from April 2007,no progress could be made, and only now has that deck been cleared. We expected, at one time, that all of them would be launched and some would be operational. Now, we will start serious work on some, and on others we will be engaged in preproject activity and XI Plans (2007-2012). We are also getting approval for our own reactors. NPCIL, according to the FiveYear Plan, is supposed to start work on 11 reactors based on our own technologies: eight with 700 Mw pressurised heavy water reactors, two with fast breeder reactors and one with an advanced heavy water reactor using thorium (300 Mw). We have approval for four heavy water reactors, on work has begun. Procurement of equipment has started and ground break will be this year. For the other four, we hope to receive approval soon. According to international obligations, India can use this fuel only for IAEA safeguarded reactors. How is the verification process going? Fuel has been fabricated and loaded under IAEA inspection into Rajasthan 2. We hope Rajasthan 2 will start power production next month. We have now six reactors under safeguards: Rajasthan 1 and 2, Tarapur 1 and 2, and Kudankulam 1 and 2. In addition to these two reactors, there is a proposal to safeguard eight more reactors: Rajasthan 3, 4, 5 and 6; Kakkrapar 1 and 2; Narora 1 and 2. Of all those six, only Rajasthan 1 and 2 use imported fuel. Five and 6 are expected to be notified and commissioned this year, with clearance to come in next two to three months. What can result from the visit of an Indian delegation to Russian nuclear fuel facilities in Novosibirsk and Angarsk? I was part of a former delegation, which explored areas of co-operation in various sectors. There is one more intergovernmental agreement under negotiation with Russia to expand the peaceful use of nuclear power, to include many other areas of research and development.
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Prepared by RIA Novosti
For full version go to www.rbth.ru
06
BOOKMARKS
RUSSIA INDIA REPORT
Internet
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
www.russianinternet.com Find more about the Russian internet en.wikipedia.org/wiki/Russian_Business_Network Russian business network
Brief facts
Internet The former Soviet Union is in the throes of a social-media website boom
The President heeds his blog
People-catching nets and net-catching people
The Russian blogosphere is growing faster than the global one According to a search on Yandex, Russia’s leading search engine, there are 7.4 mn blogs in the Russianlanguage blogosphere: 6.9 mn personal journals and 0.5 mn communities. This is almost double the number a year ago. Worldwide in 2008, according to Technocrati, there were over 133 mn blogs – Russian-language blogs make up 5 pc of the global blogosphere. A year ago that index was 2.5 pc. The Russian blogosphere is expanding at an extraordinary rate.
Russians have yet to try Twitter The world-popular microblogging service Twitter has yet to take hold in Russia. In August 2009, Twitter had under 30,000 Russian accounts. And although that is practically five times the number of accounts listed in May 2009, micro-blogging in Russia remains a realm for the select few. Experts say the expansion of Twitter in the former Soviet Union may promote an increase in the number of handheld computers and smartphones. As we know, 80 pc of all tweets (Twitter texts) around the world are sent from handheld devices.
The use of social media and social networking in Russia is widespread, making it the fourth largest market in Europe behind the UK, Germany and France. The rate of growth in membership of social networking sites in Russia is even more so. Recent research from comScore shows that Russians are the most engaged users of social media in the world. DENIS TEREKHOV SPECIAL TO RIR
My mother will soon be 62. For her last birthday I gave her a laptop computer. I learned she was making forays into the Internet when she added me to her friends on Odnoklassniki.ru (the Russian equivalent of Classmates.com, with more than 40 million members). Odnoklassniki was my mother’s first site, and essentially her only site.Just as Odnoklassniki was the first site for hundreds of thousands (perhaps millions) of Russians of the older generation. According to a Russian folk saying, Russians take a long time to harness their horses, but they ride fast. A case in point is the approach of residents of the former USSR to the world wide web. Statistics show that every year in Russia the number of people online increases by 2-2.5 mn. These people are mostly aged 45 and up.What’s more,between 1.8 and 2 mn of these new users sign up for broadband so they can enjoy everything the Internet has to offer. Most important of all,they can be in constant touch with each other through social networks.That is probably why, according to the latest research from comScore, Russians spend more time than any other nationality in the world on those sites: 6.6 hours per month, as opposed to 3.7, the global average. Vlad Piskunov, the 40-year-old owner of a factory that makes electrical equipment in the town of Sukhinichi near Kaluga, found out about the existence of blogs and social networks less than a year ago. Since then, thanks to two of his hobbies (cooking and photography),Vlad has become one of Russia’s most famous Internet cooks. Every post on his online journal (vlad_ piskunov.livejournal.com) is read by some 25,000 people. Nearly every week he is asked for an interview or to participate in a cooking programme. It all
INTERPRESS/ITAR-TASS
Russian President Dmitry Medvedev has moved his video-blog from its official kremlin.ru site to Russia’s most popular blog host, LiveJournal. Medvedev’s blog was originally conceived as a communication channel with the Internet community: a conversation in understandable language with ordinary users. But those users have since revised this project according to their own desires. Now Medvedev’s blog is an alternative channel for receiving information from the president. Many of the appeals from users (about cases of corruption or the injustice of local authorities) have gone from being comments in a blog to being the reason for an investigation. Dmitry Medvedev, in instructing his government to deal with this or that question, regularly refers to information received via his blog.
Online social networks have become a vital component of unofficial grass-roots movements in Russia, including flash mobs (random gatherings of people organised at public places via the internet). This flash mob met outside the Savior Upon the Blood church in downtown St. Petersburg and danced to the music of Michael Jackson to commemorate the late artist's 51st birthday.
began whenVlad started taking pictures of dishes he made for family and friends. He had no idea of becoming famous. But now he’s seriously thinking about launching an Internet store and publishing his own cookbook.Vlad jokes that soon his hobby will be more profitable than his business of producing wall plugs and light switches. Russian business learned only fairly recently about the power hidden in the world of social
Statistics show that every year in Russia the number of people online increases by 2-2.5 mn media websites. Ten years ago, large Russian companies thought they did not need a website. Concerns involved in web development could not explain to Russian businessmen how an Internet presence would help them sell timber and coal. In the last 6-9 months, however, it seems there isn’t a single brief on developing communications strategies that doesn’t include a section on“Working with Social Media.”During the financial crisis, when marketing budgets have been slashed, brands are looking for alternative ways of reaching consumers. Expensive store promotions have given way
to focused efforts with target audiences. Nokia, for instance, is making increasingly active use of communications in social media networks to attract more visitors to stores in Moscow and St Petersburg.The Finnish company is creating an informational stir around the launch of a new line of Nokia phones and encouraging loyalty among user-fans via the Internet. Discount flyers are no longer handed out on the streets; they are published in groups on social media websites. For more than a year-and-ahalf, one of Russia’s leaders in telecommunications, MegaFon, has been closely monitoring what subscribers say about the company’s services on blogs, forums and thematic sites.Armed with this information, MegaFon representatives then get in touch with users. According to the agency Social Networks, more than 75 pc of the negative views among cell-phone subscribers are the result of absence of information. When subscribers have the information they need, their complaints about and problems with their provider are far fewer.You would think that to remedy the absence of information,one need only open hotlines and support services for subscribers. But experience shows users would rather tell their problems to friends in a forum or a LiveJournal than call a support service.
Russian high school graduates, for instance, talk constantly about their problems in taking the new Single State Exams (standard college entrance exams, the Russian equivalent of SATs in the United States) in the social networkVKontakte. Meanwhile, the Russian Ministry of Education and Science is vitally interested in what students who have taken these new exams think about them. In spring 2009 there was a scandal
Educators have now realised the Internet is an alternate reality that must be attended to and dealt with when some high school students posted answers to the exams in VKontakte. The discussion ranges from innocent exchanges about questions and answers to the quasi-extremist views of those who want to dispose of Education Minister Andrey Fursenko. Educators, who only yesterday preferred to ignore the Internet, have now realised it is an alternate reality that must be attended to and dealt with. School students who gladly complain about exams are less apt to talk about family problems. InVKontakte there is still not a single group where users
discuss family violence. Using theYandex search engine, one discovers that in all Russian blogs over the last three years, there have been only a few dozen posts in which children wrote: my father beats me, my mother abuses me. Evidently, Internet journals for young Russians are more a form of entertainment than a chance to share their problems. At the same time,Russian adults see blogs as an alternative opportunity to receive and distribute information.Groups of Muscovites involved in protesting certain municipal building projects co-ordinate their activities exclusively using blogs, planning protest actions and coming up with slogans. This proves once again that social media websites in Russia are developing in two diametrically opposed directions. For adults, they are a platform to discuss serious problems; for young people, they are a place to have fun and spend time with friends. And no one can say which direction is the right one. A few months ago my mother suggested we give a laptop to her 72-year-old sister. I suspect that very soon, thanks to Odnoklassniki.ru, I will discover that Aunt Lyuba has also discovered the Internet.
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Denis Terekhov is a managing partner of the agency Social Networks.
BOOKMARKS
www.mibf.ru/?id=20&lang=en Moscow International Book Fair home.freeuk.com/russica4/ Russian books translated into English
RUSSIA INDIA REPORT
Culture
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
07
Books India was guest of honour at the 22nd Moscow international book fair in September
Indian literature is a star attraction
The guest country’s delegation was very representative: more than 60 Indian cultural figures – publishers, writers, poets, translators, playwrights and critics. An exhibition of contemporary Indian books was installed in the central hall of pavilion 75 at the All-Russian Exhibition Centre, a site of almost 1,000 square metres. Every visitor was plunged into the magical world of India. The official opening of the fair featured speeches by First Deputy Prime Minister Sergei Ivanov and Press Minister Mikhail Seslavinsky, and there was also a word of welcome from the leader of the Indian delegation, Mr Bipan Chandra, chairman of the National Book Trust of India. He recalled the time when India and Russia, at that time part of the USSR, enjoyed strong political, economic and cultural ties.“There was a single cultural space from the Ganges to the Volga,” he said,
ry Russian merchant Afanasy Nikitin and his journey beyond three seas. In addition to this display of achievements of Indian literature,there was an extensive programme devoted to the two countries’ cultural co-operation. On September 4, India Day at the book fair, artists and musicians put on a day-long Indian celebration concert. Round tables on“Indian literature: a contemporary view”and“Inter-cultural co-operation through translation”,as well as dialogues The writer Gulzar at the entrance of the Indian Pavilion during the Moscow international book fair. between Indian and Russian writers, also took place. India’s literary academy (Sahitya Akademni) and the Russian Translations publishing house Vostochnaya Literatura presented their The situation with translations projects – editions of the An- of Indian authors in Russia is thology of contemporary Indian fairly positive. stories and the ancient treatise The book fair had a display of on the theatre, Natyashastra. Indian classics, for example a During the weekend (Septem- fine edition of Somadeva, an ber 5-6), there were master- ocean of tales in the Library of classes for children with the World Literature series pubwell known Indian children’s il- lished by Eksmo. But the Russian reader also has opportunilustrator Subir Roy. Finally, the“Book of the year” ties to discover contemporary prize was presented at a Mos- writers in India or born in the cow theatre. There was a new country. The Amfora publishing special category – “The hun- house, for example, has pubdred-petalled lotus”– for a Rus- lished the novel Shalimar the sian-language book opening up Clown by the world-famous InIndia’s culture for Russian dian Salman Rushdie, and Limreaders. The award went to the bus in Saint Petersburg has Indian Philosophy encyclope- published Hari Kunzru’s novel dia published by Vostochnaya Faceless. Literatura. ANNA ARTEMEVA
PAVEL BASINSKY RIR
“but a lot of water has flowed under the bridge since then.”He confirmed the enormous interest in Russian literature that still exists in India today. In his address, Ivanov cited an interesting statistic: the total published number of books by RabindranathTagore is exactly the same as the global total for Dostoyevsky, one of the most widely-read classics in the world. The Indian pavilion featured a display of books by Mahatma Gandhi and literature about him.The number and variety of these books could not fail to impress. In the centre of the hall there were books by Russian writers published in India and Russian books about India. Unfortunately, we don’t know very much about each other in terms of contemporary literature, and today’s Hindus’ impression of Russia seems to consist of the books of Tolstoy, Dostoyevsky and, at a stretch, Gorky. There was also quite a number of books about India in the Russian language on display. Books of essays by Russian writers who travelled in India at one time or another are generally very popular. Maria Arbatova, Ravil Bukharayev, Marina Moskvina and others have put out books about their impressions of this amazing country, in some intangible way similar to Russia. This tradition goes back to the days of 15th-centu-
ANNA ARTEMEVA
2009 has been declared the year of India in Russia, so it is logical that this country, with its thousand-year literary tradition, should be the guest of honour at the Moscow book fair – the biggest in Russia and one of the biggest in the world.
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Cinema Indian films remain popular in post-Soviet times
Bollywood returns to Russian screens When Indian Prime Minister Jawaharlal Nehru visited the Soviet Union in 1955, his photograph was everywhere – in shop windows, on streets and at intersections. Thousands of people lined up for tickets to be the first to see Indian films and the striking, colourful performances of Indian dancers and musicians. Indian actor Raj Kapoor, who came to Moscow around the same time, left the Soviet people literally besotted. According to eyewitnesses, Kapoor’s shiny ZIS (the grandstyle Soviet automobile meant to ferry the actor back to his hotel), which was parked outside the Udarnik movie theatre, never left the curb. The crowd
VASILI EGOROV_ITAR-TASS
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Raj Kapoor meets participants of the 1957 Moscow Youth Festival
simply picked the car up (with Kapoor in it) and carried it off. Then came the Indian saga about twin sisters, Seeta Aur Geeta (1972), a marvelous rem-
iniscence of distant childhood. Children in Moscow courtyards tried to repeat the circus tricks of the brave heroine, Hema Malini. They copied her tightrope
act and her daring manner of behaviour and speech. Indian cinema fans here still remember how one of the twins taught her wicked aunt a lesson. Songs from Indian movies were especially popular in the Soviet Union in the 1980s.The fashion for disco dancing forced young Russians to view Indian cinema differently after the appearance of Disco Dancer (1982). The rags-to-riches story of an ordinary young Indian boy who manages to become a famous singer once again staggered the imagination of Soviet moviegoers. Mithun Chakraborty, the film’s star, replaced Raj Kapoor in the eyes of the new generation. Disco Dancer earned close to 60 mn roubles at a time when movie tickets cost 20-50 ko-
pecks.The dance halls at Soviet summer resorts in the ‘80s resounded with the sounds of“I Am a Disco Dancer”.Some fanatics were capable of requesting the song ten times over. After 1979, the year of the joint Soviet-Indian film The Adventures of Ali Baba and the Forty Thieves, new Indian films began to be distributed in the USSR every month – this at a time when the number of movies imported from capitalist countries did not exceed 40 per year. Who of the newest generation of Indian actors is loved in Russia today? The answer would probably be the strikingly beautiful Aishwarya Rai (“rai” in Russian means“paradise”). Even her last name sounds magical to the Russian ear, paradise being“a place of eternal bliss for the souls of the righteous”. True, Miss Rai is best known to Russians, as with residents of other countries, for her work in Hollywood films. Bride and Prejudice (2004), Mistress
of Spices (2005) and The Last Legion (2007) are the films featuring Rai shown most often on Russian television. Meanwhile, Russia continues to love Indian cinema classics from the 1960s and 1970s. These are the films most talked about on Internet forums,where fans lovingly collect photographs and stories of their idols. They constitute a retrospective of Indian cinema that is regularly shown on Russian television, especially the Domashny channel, which is aimed at women and promotes family values. For Russian fans of Indian films, there is even a special satellite channel called IndiaTV.Russia’s love of Indian films has now spilled over into a mass passion for Indian dance. Every self-respecting sports club in Moscow teaches yoga and the art of Indian dance. Russian girls array themselves in saris for these lessons, which are more popular even than traditional European fitness classes.
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Moreover, over almost 50 years of military technical co-operation with Russia, India has developed expertise in maintaining Russian aircraft. Also, Russia is just about the only country to transfer its technology to India – various armaments are manufactured there under li-
cence. The current tender also envisages the same set-up regarding co-operation with the supplier, and Russia’s relevant experience may give it an advantage. None of this means, of course, that the tender is virtually in MiG’s pocket. India is aiming to establish a closer relationship with Russia’s main competitor in the arms market
Russia india report
Aviation
in association with rossiyskaya gazeta, russia THE economic times wednesday_september 09_2009
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News in brief
$2.6 bn in military aircraft sales expected Russia's state arms exporter Rosoboronexport has said military aircraft will continue to dominate the company's foreign sales in 2009, and will total about $2.6 bn. Rosoboronexport is planning to sell about $6.5 bn worth of military hardware in 2009, and earlier said its defense order portfolio was worth $27 bn. "Aviation has always been a predominant part of Rosoboronexport's foreign sales portfolio, and 2009 will not be an exception. According to our plans, exports of Russian military aircraft will worth about $2.6 bn or 40.6 pc of the total,"
said Alexander Mikheyev, the company's deputy general director. Rosoboronexport is also seeking to expand its presence on other markets. "We are expecting a major breakthrough in the Libyan direction, because Soviet and Russianmade combat aircraft continue to be the backbone of the Libyan air force," Mikheyev said in an interview with the Arms Export Journal. "At present, Libya is expressing an interest in MiG-35 [multirole fighter], Su-35 [multirole fighter], advanced attack helicopters and air defense systems," the official said. RIA Novosti
Production of MiG-35 fighters to start in 2013 Production of MiG-35 multirole fighters offered for sale to India cannot start before 2013 or 2014, a Russian aircraft maker has said. Russia's MiG-35 Fulcrum-F, an export version of the MiG29M OVT (Fulcrum F), is a highly maneuverable air superiority fighter, which won high acclaim during the Le Bourget air show in France last year. "We have begun testing the MiG-35 fighter for the Indian tender," said Alexander Karezin, general director of the Sokol company based in Nizhniy Novgorod. Six major aircraft makers Lockheed and Boeing from the United States, Russia's MiG, which is part of the UAC, France's Dassault, Sweden's Saab and the EADS consorti-
um of British, German, Spanish and Italian companies - are in contention to win the $10 bn contract for 126 light fighters to be supplied to the Indian Air Force. Sokol earlier said that the first two MiG-35 aircraft would be delivered to India in August for test flights prior to the award of the tender. In late 2009, Russia will conduct a series of flight tests with live firing for an Indian Air Force delegation at one of the testing grounds on the Russian territory. Moscow said if MiG35 wins the tender, Russia is ready to transfer all key technology to India's Hindustan Aeronautics Ltd. and provide assistance for the production of aircraft in the country. RIA Novosti
India & Russia complete design of lunar probe India and Russia have finished the design of a second unmanned lunar orbiter to be sent to the Moon in 2011-2012. "Right now, the design has been completed. We had a joint review with Russian scientists here." Next...we will go towards prototype building, which will be taken up next year," said Madhavan Nair, chairman of the Indian Space Research Organization (ISRO). Chandrayaan-2 is the second Indian mission to the moon that "would have an orbital flight vehicle constituting an Orbital Craft (OC) and a Lunar Craft (LC) that would carry a soft landing system up to Lunar Transfer Trajectory (LTT)," the
Indian space official said. Russia is responsible for the design and construction of a lander and a rover, which could collect samples of the lunar soil, analyse them and send the data back to Earth. The ISRO and the Russian Federal Space Agency signed in November 2007 an agreement to work together on the Chandrayaan-2 project. The work started following the launch of India's first unmanned mission to the moon, the Chandrayaan-1, in October last year. India became the third Asian country to send an unmanned probe to the Earth's largest satellite after Japan and China. RIA Novosti
sukhoi.org
Co-operation
Su-30MKI fighter IRKUT corporation is about to fulfill contractual obligations to supply 18 multipurpose Su30MKI strike fighters to India. The Su-30MKI multi-role fighter (NATO reporting name FlankerH) was jointly-developed by Russia's Sukhoi Corporation and India's HAL for the Indian Air Force.
photoxpress
– the USA. In July the new American administration signed an agreement with India on co-operation in the field of military equipment. Secretary of State Hillary Clinton visited India especially for this. Now the Americans are expecting India’s Prime Minister Manmohan Singh on a return visit in November, when he will have talks with President Barack Obama. All the same, Russia is still India’s main arms supplier. And for Russia, India is still a strategic partner in the field of military equipment and one of its main customers.The recent MAKS confirmed this once again. Joint work by Russia and India on the creation of a fifth-generation fighter continues. Alexander Zelin, Russia’s air force commander-inchief, said ground tests of the aircraft are already underway in Moscow. It is expected that the aircraft will take off for flight tests in November–December 2009, and it is due to come into service with the Russian air force by 2015. Agreements made under earlier Russian-Indian contracts are also being fulfilled. Oleg Demchenko, head of the Irkut company, reported that the latest batch of 18 Su-30MKI fighters has been delivered to India. By 2015 India will have 230 of these aircraft. Moreover, Rosoboronexport announced at the air show in Zhukovsky that before the end of this year Russia and India may be signing an agreement on fitting these aircraft with the Russian-Indian BrahMos supersonic cruise missile, the air-launched version of which is currently being developed.
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A-50 AWAKS Russia has delivered to India the first of three ordered A-50 Shmel (NATO code name Mainstay) early warning aircraft. The A-50, based on the Ilyushin Il-76 transport aircraft, is produced by the Irkutcontrolled Beriev aviation plant, Taganrog, and can control up to 10 fighter aircraft.
photoxpress
www.uacrussia.ru/en Joint Stock Company «United Aircraft Corporation» (UAC) www.beriev.com Beriev aircraft company www.irkut.com/en Irkut corporation
Ka-31 AEW helicopters India and Russia are planning to sign a contract for 5 more Russian Kamov-31 airborne early warning helicopters. The Indian Navy currently operates 9 Ka-31s, deploying them on its remaining aircraft carrier INS Viraat, its 3 Talwar class guided missile frigates, and key shore facilities.
photoxpress
bookmarks
Brahmos missiles The total order book for the Brahmos supersonic cruise missile, including supplies to other countries, could reach $10 bn, said Dr. Sivathanu Pillai, Brahmos CEO, speaking in Moscow. India has placed $2 bn of missile orders with Russian-Indian joint venture.
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in association with rossiyskaya gazeta, russia THE economic times wednesday_september 09_2009
www.airshow.ru MAKS 2009 airshow website www.sukhoi.org/eng Sukhoi Company (JSC), Russia’s major aircraft holding, website www.ifc-leasing.com/en lIyushin Finance Co.
The latest International Aerospace Show (MAKS) took place in the town of Zhukovsky, near Moscow, in late August. Judging by the number of contracts signed by the military wing of Russia’s United Aircraft Corporation (UAC), India is still a key partner for Russia in the arms market.
vladimir vyatkin_ria novosti
irina sukhova RIR
Fifth-generation Sukhoi PAK FA/T-50 fighter
konstantin zavrazhin_rg
Russia unveiled the first element of its fifth-generation Sukhoi PAK FA/T-50 fighter during the Moscow MAKS 2009 air show. Russia's fifth-generation fighter planes, being developed by the Sukhoi design bureau in collaboration with India's Hindustan Aeronautic Ltd (HAL), is set to start flight trials in November.
Tupolev 204 -300
Allocer
The TU-204-300 with PS-90A engines is a mid-range passenger a/c is intended to carry passengers, luggage and cargo on domestic and international trunk routes of 500 to 8500 km long. The plane's navigational system and low-noise levels allow it to fly to European destinations.
Iluyshin-214 The year 2013 is expected to see the first flight of the Il-214, the medium-range militarytransport plane, developed jointly by Russia and India. The Il-214 will see production in 2015-16.
The current MAKS was not the same as usual. The exhibition in Zhukovsky was opened by Russia’s Prime Minister Vladimir Putin. However, this year Putin also held a conference there devoted to the development of the Russian aerospace industry.“The development of the aerospace industry is undoubtedly one of our priorities today,” said the premier. In recent years, Russia has been merging its design centres and its volume aircraft production facilities, which were separated and functioning independently after the collapse of the USSR, into the UAC. The current world crisis caught the industry at a point where it was especially vulnerable. The process of consolidating the various companies is virtually complete, but the corporation has not yet managed to reach full working capacity as a single entity. Some of the companies that were incorporated in it had debts and needed a boost to their financial health. Without government help, it would have been practically impossible to pull them out of the financial hole they were in. Since 2004, said Putin at the opening of the air show, the government has brought a fourfold increase in assistance to the aerospace industry. In 2009 alone the industry received about 80 bn roubles from the state budget: the money was used to increase the capital available to businesses run by the United Aircraft Corporation and also to upgrade production facilities. The Prime Minister gave an assurance that the industry would not be left without government support at a time of
Air show results More then 700 companies from 34 countries, including 436 Russian firms, took part in the air show Contracts totalling $10 bn were signed at MAKS-2009 Russia's Defense Ministry and the Sukhoi aircraft maker signed a $2.5 bn contract on the delivery of 48 Su-35S, 12 Su-27SM and four Su-30M2 fighter jets to the Russian Air Force
crisis: “We intend to continue to put serious investment and resources into the aerospace industry, to create truly competitive companies, businesses that are capable of winning their own niche in the market, and to generate and attract resources for modernisation and re-equipment.” Now all that’s left is to sort out the matter of its debts – the government puts them at 120 bn roubles. The corporation’s senior management has been given time until October to work out how to get their businesses out of debt. Russian aircraft builders, especially in the military sector, have every reason to be optimistic. The biggest deal at the air show was done by the Russian Defence Ministry and the Sukhoi company, one of the key businesses in the UAC. In the period up to 2015 the Russian air force will take delivery of 64 new fighters made by this company – four Su-30s, 12 Su27s and 48 Su-35s. The contract runs to 80 bn roubles – approximately one quarter of the total value of deals concluded at MAKS. And that’s not all as far as the Russian air force is concerned. According to Alexander Zelin, commander-in-chief of the air force, another major purchase may be announced by the end of the year – this time the MiG-35 multi-purpose fighter. This is the machine that Russia is offering in one of today’s main tenders for the supply of a large consignment of fighters, which was announced by
Pilots from the elite Russian Knights aerobatic team show off Su-27 fighters India in 2007. The Indian air force is planning to buy 126 aircraft. All the world’s leading arms manufacturers are fighting for this giant contract: the USA’s Boeing and Lockheed Martin have put forward the F-18 and F-16 respectively, France’s Dassault the Rafale, EADS the Eurofighter Typhoon, and Sweden’s SAAB
the Gripen NG. And there’s plenty to fight for: the contract is worth $12 bn. India recently began the lengthy process of testing the aircraft taking part in the contest, starting with the Americans. The winner will be announced in 2010, and delivery of the first aircraft under this contract should begin two years later.
Alexander Mikheyev, deputy chief of the state defence export agency Rosobronexport, believes Russia has a good chance of winning the contract. MiG aircrafts are known to Indian pilots, since they are the core of the country’s air force combat aircraft fleet. CONTINUED on PAGE 9
Sukhoi Superjet 100 airliner ready to take off
Engines for Russia's new Superjet 100 regional airliner will be certified later in 2009, a senior official at the PowerJet company announced at the MAKS-2009 air show. PowerJet, a joint venture by France's Snecma and Russia's NPO Saturn, has designed the SaM146 engine for the Superjet, a family of medium-haul passenger aircraft developed by Russia's Sukhoi Civil Aircraft company in co-operation with a number of US and European aircraft makers. The company
started the SaM146 engine certification programme in February 2009 and plans to run certification tests in line with European, the US and Russian standards, which would allow the plane to operate without restrictions anywhere in the world. According to Vladimir Prisazhnyuk, president of Sukhoi Civil Aircraft, the first 18 Superjet 100s are expected to be delivered to customers, including Aeroflot and Armavia, in 2010. Sukhoi plans to manufacture at least 700 Superjet 100s.
lilia zlakazova_rg
Russia is ready to export the new state-of-the-art Su-35 Flanker-E multi-role air superiority fighters to India. The Su-35, powered by two 117S engines with thrust vectoring, combines high maneuverability and the capability to effectively engage several air targets simultaneously using both guided and unguided missiles and weapon systems.
denis sinyakov_epsilon
Su -35 fighter
Long-term partnership to continue
sukhoi.org
sukhoi.org
Co-operation MAKS 2009 The $10 bn air show was the most effective ever conducted in Russia
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IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
Mumbai to host India’s inaugural ‘Leaders’ event
Investment Bilateral trade targets must be pursued
The Third trade forum will open new doors KONSTANTIN FETS
The third Russian-Indian forum on Trade and Investments in Moscow in October has every chance of being an important milestone in the development of bilateral co-operation.
Over the past few years, thousands of CEOs have been making an annual pilgrimage to international events in the ‘Leaders’series.The inaugural Indian chapter of the world’s largest and most respected series of leadership events, the Leaders in India Business Forum, will take place at the Taj Lands End in Mumbai on 9-10 October 2009. Kofi Annan, Richard Branson and Philip Kotler are amongst
those who have spoken at recent events. Themed ‘Visionary Leaders changing the world,’the upcoming forum in Mumbai features speakers including Steve Forbes, Tom Peters, Donald Trump Jr., Adi Godrej and Kiran Mazumdar-Shaw. Also participating are Chairmen and CEOs from over 12 countries. The agenda is based on months of extensive research with business leaders across the region,
and facilitates close-knit interaction at the highest level. The Leaders in India Business Forum 2009 will mark a new age of leadership events, a platform to network with iconic and visionary leaders, inspirational strategists, entrepreneurs and thinkers from India and abroad. Topics include Mergers & Acquisitions, India’s Globalisation Strategy and powering the 21st century knowledge economy. www.leaders-india.com
Expert speakers’ views on the Leaders event
on the construction of four more reactors for the Kudankulam nuclear power plant, which will allow Russia’s Atomstroyexport and NPCIL to start drawing up an actual contract. It is worth noting that all these projects, different as they are, are clearly part of a single major trend. The global turbulence experienced at the end of last year and the beginning of 2009 is gradually fading.The picture of a new world order is of course not yet fully clear, but some key elements are already discernible. Let’s take one of them – the BRIC. This term, coined by Goldman Sachs’ chief economist Jim O’Neill, has already become a popular cliché in the newspapers, but when it first appeared, the forecast that by 2050 the economies of Brazil, Russia, India and China would collectively outstrip the richest economies in the world (the G7) was an absolute sensation.This abbreviation is of most direct relevance to trade between Russia and India. The BRIC countries all have different trade patterns and, up to now, the dominant role has been played by trade with industrially developed countries and regional links; nevertheless the weakening of the dollar in its role as a global reserve currency is objectively prompting these four countries to strengthen their trade and economic links on a bilateral basis. China has so far been more active than the
others in this respect, since it has huge currency reserves which give it the opportunity to create an alternative system of financing its foreign trade operations by means of yuan credits. However, the other BRIC countries are not going to be left out; they all have a positive balance of trade and are interested in developing exports to stimulate the industries which are the basis of these countries’ economic development. In this regard, the area of Russian-Indian co-operation begins to look very promising. India’s economic growth rate is about 9pc. India’s dependence on oil and gas imports is growing, and by 2015 India will be importing about 90pc of its oil needs. Indian businesses have already invested $1.7 bn in the Sakhalin-1 project and are considering expanding prospecting and extraction projects in Russia and offering Russian companies opportunities in the oil extraction and marketing sector in India. However, India cannot meet its energy requirements with oil alone. Without large-scale construction of thermal and nuclear power stations and an increase in the capacity of its energy and transport infrastructure, India may run into serious limitations to future economic growth. These are areas where co-operation between Russia and India promises to be most fruitful.
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FROM PERSONAL ARCHIVES
The 2nd Russian-Indian forum in February 2008 was in New Delhi
TOM PETERS AUTHOR & MANAGEMENT GURU
“I am thrilled – a carefully chosen word – about Leaders in India 2009. Having spoken in India for 30 years, I find the story and reality of its ongoing transformation inspiring and unstoppable. The best is yet to come. I am simply a great fan and admirer of India, and humbled to beinvited to these events.”
STEVE TAPPIN CEO CONFIDANT & AUTHOR
“Being a CEO is daunting and most CEOs don’t do it well.The CEO role should probably come with a health warning.Unfortunately there are few forums where aspiring CEOs can get both help and inspiration.Leaders in India stand out for provid-
FROM PERSONAL ARCHIVES
ing both genuine insight and practical tips, which delegates can apply in practice to their businesses."
FROM PERSONAL ARCHIVES
Economic ties between our countries may be lagging behind the level of political dialogue, but it is very likely new circumstances will soon change the picture. Despite a very steep rate of growth (more than 30 pc per year), trade between Russia and India remains very much an optional matter for both economies. Judging by the current measures of external trade turnover and average annual rates of growth for the last three years, it is going to be very difficult to reach the target of $10 bn by 2010, agreed by the two governments in 2006. Nevertheless, it is already possible to clearly outline a group of Russian companies with a real interest in developing business with India. First among these is Sistema, which has already acquired a 51pc holding in Indian operator Shyam Telelink and also plans to invest up to $7 bn in developing a mobile network in India, as announced in February 2008 at the second Russian-Indian forum in Delhi. In May 2009, KamAZ andTatra Veсtra Motors Limited have concluded talks to set up a joint venture. The new company, in the town of Hosur, will produce 5,000 trucks over the next two years, with an initial investment of £13 mn. The Mechel group is considering the possibility of building its own coking plant in India and holding talks with potential partners. Alrosa is planning to set up a joint venture in India to process its own precious stones. Itera and the Indian gas monopoly GAIL have agreed to co-operate in prospecting and extracting raw hydrocarbon, both in liquefied gas production projects in Russia and gas distribution and petrochemical projects. Rosatom and the Nuclear Power Corporation of India Limited (NPCIL) have initialled an intergovernmental agreement
www.leaders-india.com Leaders in India business forum www.rus-ind.com/forum The third Russian-Indian Forum on Trade and Investments website
PRAVIN RAJPAL GLOBAL INNOVATION THOUGHT LEADER
“Innovation separates the leaders from the followers.The next decade of the 21st century will be shaped by new ideas. Leaders in India provide the greatest opportunity to leverage some of the best minds in the world to become future leaders.”
cial shifts underway right now. More than anything, what times like these call for is leadership. Leaders in India will bring together the kind of leadership insight we need during these uncharted times.”
TANMAY MODI FORUM DIRECTOR, LEADERS IN INDIA
“Leaders in India attract some of the sharpest minds in business. The forum’s agenda has been carefully designed to stimulate even the most seasoned professionals while leaving ample room for spontaneous discussions. Navigating this agenda requires a wide breadth of experience and intellect. Steve Tappin has interviewed over 150 senior business leaders at length and consults to many Fortune 500 CEOs; I am delighted he is anchoring the upcoming forum.”
Testimonials from past delegates at the global Leaders series: FROM PERSONAL ARCHIVES
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WIM ELFRINK EXECUTIVE VICE PRESIDENT, CISCO
“We are walking in new territory as we navigate the seismic demographic, financial and so-
“It’s where leaders and the world’s organisations help you create your own local leaders.” Imad Kamal Sultan W.J. Towell & Co, Oman “The best gathering of speakers anywhere in the world!” Manjula De Silva, HNB Assurance Ltd, Sri Lanka
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www.fsvps.ru Official website of the Federal Service for Veterinary and Phytosanitary Surveillance www.mnweekly.ru The Moscow News, a weekly independent newspaper
RUSSIA INDIA REPORT
Health
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
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Pandemic Russia’s emergency measures contain the H1N1 virus as it continues to spread globally
Fighting the flu: vaccine is nearly ready According to the World Health Organisation, Russia is still in the category of “countries not yet hit” by the swine flu pandemic. 187 confirmed cases of the infection is not many, especially considering the hundreds of thousands of Russians who take summer holidays abroad (it was after returning from foreign countries that all those infected fell ill). SVETLANA SMETANINA RIR
KIRILL SIROTYUK_AFP
Most have already recovered and been discharged from hospitals. In Russia, it is the practice to hospitalise swine flu sufferers, because doctors do not trust home treatment: patients who stay at home have to buy their own costly medicines, and it’s difficult to check if they have bought the medicines and are shaking off the illness. In hospital, however, patients get free treatment. At the slightest suspicion of flu, people are sent to hospital and everyone they’ve been in contact with is followed up. According to Russia’s Federal Agency for Health and Consumer Rights, almost 10,000 flights and about 800,000 pas-
The first batch of vaccine against the H1N1 swine flu will be ready by October 1, say scientists
sengers have been checked since April 30, when monitoring began. The most serious case was in July inYekaterinburg: 14 of 24 children returning from a lan-
guage school in the UK ended up in hospital with flu symptoms. The reaction of Gennady Onishchenko, Russia’s chief medical officer, was immediate: he banned organised groups of
children from going to the UK. This was followed by a similar temporary banning order from Nikolay Filatov, chief medical officer for Moscow, which surprised travel companies. They
Swine flu The authorities mustn’t be too relaxed about the threat
Russia has created an effective barrier against swine flu. The H1N1 virus will not spread here before mass production of a vaccine starts in November, believes Sergei Dankvert, head of Russia’s Veterinary and Phytosanitary Service, who talks to Vladislav Kuzmichev from RIR. In 2005, following an outbreak of bird flu, it became evident that the spread of the H5N1 virus could have severe consequences. We were able to predict that a further recombination of the virus would be particularly dangerous, generating a new form of human flu based on the fusion of human, swine and bird flu.The spread of such a new virus could be disastrous for humans. A recombinant virus, H1N1, which incorporates genetic material from swine, human and bird flu originating in Asia, Europe and America has indeed emerged and is spreading to other countries and continents.
NIKOLAY KOROLEV
We’ll do whatever it takes to contain it
Sergei Dankvert, head of Russian Federal Service for Veterinary and Phytosanitary Control
Luckily, there are as yet no fragments of H5N1 in the new virus, and we are faced with a less dangerous form of the disease. The H1N1 virus affecting both swine and humans is spreading rapidly across South-East Asia, the locus of the bird flu (H5N1) epidemic. This increases the risk that a new virus will emerge that would combine the most dangerous features of its predecessors. We attempted to act judiciously to maintain the country’s bio-
logical security while continuing to promote global trade. Unlike some other countries, Russia did not impose indiscriminate bans but rather targeted the states that had been hardest hit and only during the rapid spread of the virus. We have been much more flexible than many others. This flexibility is exactly why our bilateral trade has not suffered. The US authorities recognised this, although they applied considerable pressure to discourage any restrictions at all. They argued that the World Health Organisation did not recommend imposing bans and that Russia’s limits were viewed negatively by American pork producers. Public health interests in Russia outweigh the commercial interests of American pork producers. The complications that did emerge resulted from a lack of trust on the part of American veterinary authorities, who spent considerable time debating what we considered to be
petty issues instead of participating in a fruitful dialogue. This prompted us to take harsher measures.For instance,we initially banned the import of all meat from the States, as we had no information regarding health monitoring procedures for slaughterhouse employees.Meat preserves the flu virus. If an infected person in the US sneezes on a steak, the virus will survive all the way to Russia. As a matter of fact, thoroughly cooked pork is safe to eat, as the virus is killed within minutes at temperatures over 72 degrees C. But raw steaks and barbecue pork may be dangerous. Many wonder why we imposed these restrictions when the World Health Organisation announced sometime in April or May that the pandemic, as well as the penetration of the disease into any country, could not be stopped. We clearly saw that Russia would not be spared and did not try to isolate the country from the rest of the world in order to avoid exposure. Being
were supported by lawyers in denouncing the move, including State Duma deputy Pavel Krasheninnikov, who said a medical officer does not have the right to close the border. However, the Federal Agency for Health and Consumer Rights quotes the 1999 law on epidemiological protection of the population, which prescribes quarantine if it is recommended by the public health service. It’s not clear why children’s trips have been banned, when they can still travel abroad individually. Parents also have the problem of having paid for trips which will not be reimbursed, as cancellation wasn’t the fault of the travel companies. In theory, the trip can still take place, but only if the travel company takes responsibility for the children’s health. If the children fall ill after the trip, the travel company will at best have to pay a fine, and at worst lose its licence for three months, said Irina Tyurina, press officer for the Russian Travel Industry Association. The tourism industry is not prepared to take that risk. Russian football supporters could be next to be grounded. Onishchenko has said they shouldn’t go to Cardiff for the
Wales-Russia match on September 9, saying the trip was “extremely unnecessary and inappropriate during a flu epidemic”.The Russian Football Association’s press officer, Andrei Malosolov, said that while, of course, people should listen to the medical official’s advice, the Russian team should not be left without support. Such measures could be seen as an overreaction, but most experts are convinced that the actions of the medical authorities helped Russia avoid an outbreak of swine flu. Moreover, Onishchenko keeps reminding people it’s too early to relax: autumn is on its way, with its traditional surge in respiratory illnesses. According to him, a swine flu epidemic could start in Russia as early as September, when the majority of Russians return from their holidays and children go back to school. Experts forecast that, in the worst circumstances, Russia could see up to 30pc of the population falling ill. In order to prevent this, medical services are planning a mass vaccination – about 40m doses will be used. Scientists have said that a Russian vaccine against the H1N1 virus will be ready by October 1.
realistic, we set a practical goal: to postpone the spread of the epidemic into Russia until mass production of an H1N1 vaccine could begin.The longer we keep the virus outside Russia, the more likely it is that a treatment will become available and the population will suffer less during an outbreak. We have achieved the goal and we are now confident that the H1N1 flu will not spread throughout Russia before a vaccine is available – actually, production has already been launched, but mass production will require at least four months, beginning only in November. Restrictive veterinary and medical precautions have already helped Russia gain almost three months on the epidemic. Moreover, no Russian business interests have been negatively impacted by the measures, as we announced the measures on our website. A forecasted 60-70 pc of the global population will contract this disease. Fatalities are expected to double from 200,000 to 400,000 people annually. The virus that is spreading now is predominantly located in the nasopharynx and airways.However,in congested groups of population, i.e. in hospitals, army
units, or schools, the virus may be passed, generating a strain that is located in lungs and leads to pneumonia,the main cause of mortality during flu epidemics. If this happens, the death toll could reach millions. Countries suffering from malnutrition and a relatively cold climate will be hardest hit.Thus, equatorial Africa is unlikely to be harmed, while for the North and South of Africa, with rainy seasons, rather low temperatures and malnurished populations, the impact could be disastrous. We live in an extremely open world, and this openness makes us more vulnerable. Hundreds of millions of tons of animal products and many millions of animals are transported in all directions,people are moving all across the globe, and diseases that affect both humans and animals are spreading. All this adds to our burden and prompts us to look for more effective and rapid solutions to new challenges.
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Prepared by Vladislav Kuzmichev
Full version at www.rbth.ru
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IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
WILL MOSCOW AND DELHI LEARN TO VALUE EACH OTHER? ANDREI VOLODIN POLITICAL EXPERT
Relations between Moscow and Delhi have become increasingly strained in recent years, with problems emerging which are sometimes described as ‘roughness’ by Russian diplomats. Such roughness did not come out of the blue, but instead reflects the evolution of Russian-Indian ties over the past 20 years. A strategic alliance between the USSR and India began following the Indian-Chinese border conflict in 1962.The Soviet Union, which by that time was in ideological confrontation with China, responded readily to India’s quest for military and technical assistance, while the West was reluctant to help. In the 1970s, India played an important part in Moscow’s foreign policy strategy, acting as an effective counterweight to China, especially in light of the China-US accord. After the assassination of Indira Gandhi in 1984, the country’s new leadership, headed by her elder son Rajiv, began a cautious diversification of India’s foreign policy, reviewing ties with the US and China, but sparing relations with the Soviet Union. Unwelcome effects came later, in the late 1980s under Mikhail Gorbachev, when impact on foreign policy of the defects of the Soviet-style economy became apparent. On the one hand, both countries vowed to develop bilateral ties. On the other hand, these relations stagnated, bespeaking Moscow’s increasing inability to patch its trade ties with the Asian partner. Russia’s‘departure’from India spoiled Moscow’s image in the eyes of India’s ruling elite and its various social and political forces, creating a negative attitude toward Russia. Finally, the diverging paths of economic reform in the two countries further narrowed the horizon for economic co-operation, restricting it to the military and technical areas and atomic energy. Recent years, however, have seen some positive changes. At the start of the third millennium, Russia is widely seen as liberating its foreign policy from western influences, and turning back to Asia. Relations with India (and also China) lie at the heart of Moscow’s foreign policy in the East. The current state of the two countries’ relations, covering key areas of co-operation, looks as follows.
DRAWING BY DMITRY DIVIN
In building their strategic partnership with Russia, India’s authorities act on the assumption that Russia has moved into the‘second echelon’ of big politics. Following this logic, after the collapse of the Soviet Union, Russia, though still retaining much of its energy and military potential, became part of the US-centric world. In this situation, Delhi’s desire to focus on ties with Washington is understandable. The scale of Russian-Indian trade remains scant, despite efforts by the two countries’leaderships; it is a far cry from India’s trade with China and the US, in terms of goods, services and knowledge exchange. Given that, India’s business community is keen to boost ties with American and Chinese partners, while trade with Russia is seen as a relic of the past friendship with the Soviet Union. The potential of Russian-Indian intellectual and cultural ties was an important resource for the development of bilateral relations. Vital projects were implemented as part of the two countries’ common intellectual concept. However, a lot of these intellectual, cultural and ideological bonds have now been effectively destroyed. Indian politicians are also unhappy with Moscow’s methods, especially in terms of trade.They
say the Russian government has in fact lost strategic control over the development of economic relations, leading to the lack of a long-term cooperation concept, inaccuracy in Russian industrial supplies to India, the worsening quality of exported products, the overall stagnation of the Russian-Indian ties and other problems. Understanding between the two countries was also hampered by the halt in social-science cooperation, which used to ensure experience and knowledge exchange and helped foster common approaches to political issues. Meanwhile, India’s political standing is unstable as it tackles a whole set of problems, including ongoing disputes with its South Asian neighbours wooed by China. In this situation, India has to restore its relations with Russia as a potential counterweight to China, and also as a force that can protect India’s interests in South Asia. The time has come to reverse the process, putting Russian-Indian relations back on track. But how? First, Russia is in desperate need for joint research and industrial projects in promising economic areas such as hi-tech, computers and electronics. It should not be forgotten that India’s system of technology institutes, which was
Letters to the Editor Business and Language I read your column about the Russian language with interest. It reminded me of my experience translating into English professionally a while back when I was involved in leather goods. Many local exporters felt handicapped, especially when the target countries preferred their own language as a medium of communication rather than English.I ventured into the translation business and advertised my services, eventually working on a part-time basis. At the time, both Russia and India were passing through a transition phase - especially in the fields of commerce and tourism - but, to my surprise, I got a very good response from native language speakers and students in ex-USSR countries. Disappointingly, there was hardly any business, tourist flow or exports between our countries. A lot of talent got wasted, and I eventually closed
the venture at a great financial loss to myself. I was also surprised that, among my clientele and colleagues, it was the people who had married into ex-Soviet families that enjoyed a great multicultural understanding of the world. I think it's very important to share this experience via the constant flow of people between both countries, which must be maintained. I was lucky in those days to enjoy working with so many talented and professional colleagues despite the lack of cultural and economic exchange between Russia and India.Today, perhaps, thanks to the internet this exchange is much easier and cheaper, and will develop naturally.
servative political terms. The beauty of“to each according to his need, from each according to his ability”was profound when I first heard it spoken 45 years ago. Now I realise that mankind will never reach that dream while greed and power fuel the fires of the male ego. Alas, I am an American liberal as long as I can protect and retain my conservative assets (my Mercedes, my BMW, my nice home). My government should tax someone else to feed and shelter the poor?
V.ARORA . NEW DELHI
Thanks for your very informative article! I didn't realize the Russian imperial court enjoys such a diversity of rare materials. Keep up the good work!
When are you a ‘liberal’ and when are you not? I have problems with both the liberal and con-
JOSEPH MARTIN VIRGINIA BEACH, USA
Treasures of the Tzars
AVISHEK VISHWAR BANGALORE, INDIA
www.en.rian.ru Russian news and information agency www.russiaprofile.org Russia Profile online magazine
created on the initiative of Jawaharlal Nehru, is considered the most sophisticated and efficient in the world, even outperforming the West. Second, it is necessary to qualitatively enhance the role of intellectual co-operation in the development of Russian-Indian ties. In addition to restoring Russia’s intellectual presence in India, new joint ventures are required in the area of intellectual activities. Such ventures will allow Russia to prepare highly qualified experts on India – which are obviously in short supply now – while also bringing leading Indian economists, social scientists and other professionals to Russia. Third, Russia has to continue diversifying its ties with South Asian countries. Developing mutually beneficial relations with Pakistan, Bangladesh, Sri Lanka and Nepal will highlight Moscow’s interest in the South Asian region as a whole. At the same time, such diversification will also have a sobering effect on the part of India’s elite, which has already removed Russia from the top league of global politics. Then, Russia and India need joint pilot projects in promising industries that could demonstrate the positive changes in relations. This includes agricultural research and manufacturing cooperation between Punjab and Haryana in India and Krasnodar and Stavropol in Russia’s southern regions. These areas have similar climatic and soil conditions. Additionally, India has rich experience in protecting grain crops from droughts. Another potential area of co-operation is civil aviation: India’s fast developing Kingfisher Airlines is showing interest in leasing Russia’s Tu-204-300 aircraft for non-stop flights from Bangalore to Frankfurt. If all goes well, Russia will gain access to India’s vast civil aviation market, currently dominated by Europe’s Airbus and America’s Boeing. And finally, Russia has to work out its long-term strategy on India as soon as possible, focusing, among other things, on the restoration of permanent contacts between the two countries’ leadership and political elites and launching joint projects in military and technical areas based on the investment of Russia’s intellectual potential in India’s defense industry. Exchanging scientific and technical information in this vital area will help boost Russia’s national security, prompting it to follow Washington’s example and soften its tough stance on nuclear non-proliferation in order to bolster its nuclear energy co-operation with India.
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Andrei Volodin is a Chief Researcher at the Institute of International Relations and World Economy, Moscow. Adapted from an article first published by Strategic Culture Foundation
Questions? Opinions? Please send your comments by email (editor.india@rg.ru) or fax (0870 928 9823), with your name, address and other contact details for verification. If you do not wish your name or email to be published, please indicate so, clearly. Once published, letters and guest columns become the property of Rossiyskaya Gazeta, and it reserves the right to reject, condense or edit for clarity, or when information cannot be substantiated. We do not publish anonymous letters, letters advocating extremism or containing personal attacks, mass mailings or commercial appeals. All articles and letters appearing on the pages 12-14 do not necessarily reflect the opinions and views of the editors of Rossiyskaya Gazeta and Russia India Report.
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eng.globalaffairs.ru Russia in Global Affairs online magazine www.ln.mid.ru/brp_4.nsf/english Ministry of Foreign Affairs documents
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Opinion
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
AN ILLUSION OF BIPOLAR WORLD YEVGENY BAZHANOV POLITICAL EXPERT
The United States has been growing more insistent lately in its hopes of teaming up with Beijing to rule the world together.Washington’s was driven to this only because its grandiose plan to build a global empire as the single remaining superpower failed miserably. Beijing could be the better of two evils for Washington. Since the United States is not willing to share power with“junior players”such as Russia in a multipolar world, it might be prepared to share world hegemony with China.But upon closer analysis, a U.S.-Chinese hegemony has little chance of ever panning out. Of course,Washington is flattering China with talk about the greatness of the Celestial Empire. But the Chinese are wise enough to avoid stooping so low as to get involved in some form of pointless adventure. But even if Beijing did yield to temptation, nothing would result from the U.S. project anyway. In the first place, the United States and China are more rivals than they are partners.The two countries have opposing positions on almost every
global issue, including Kosovo, NATO expansion, missile defense, the Middle East conflict, Iran, Central Asia and a host of other issues. It is a rare occasion when they vote in unison at the United Nations Security Council. But the sharpest rivalry betweenWashington and Beijing is playing out in the Asian-Pacific region, and the balance is shifting in favour of Beijing. China is exerting increasing economic and political influence on neighboring states.Washington’s two most important allies in the Far East, Japan and South Korea, already have larger trade volumes with China than they do with the United States. In fact, a Thai diplomat recently told me,“Our prime minister used to start his day by reading The NewYork Times. Now, he is first briefed on the contents of China’s Zhenmin Zhibao newspaper.”Beijing is firm in support of its “one-China” position regarding Taiwan and against the buildup of the Japanese military. Meanwhile, China is modernising its own military, buying advanced military equipment from Russia and shipping arms to countriesWashington considers undesirable. Washington views Beijing’s activity as a challenge to its own military, political and economic hege-
mony in the Asian-Pacific region. As a result, the White House has adopted a policy of both deterrence and coercion.This is one reason why U.S.actions in the region — such as supporting and selling arms to Taiwan, placing limits on the import of Chinese goods to the U.S. market and opposing China’s arms sales to other countries — create so many obstacles to building a stronger U.S.-Chinese alliance. Chinese authorities are particularly opposed to U.S. efforts to interfere with China’s internal affairs. They believe that separatists in Tibet and Xinjiang are finding support not only from individual Hollywood actors, but also from the CIA, White House and U.S. State Department. Chinese diplomats and political analysts cite this as evidence that U.S. actions in China are aimed at undermining the existing political system. They argue that Washington helped cause the collapse of its archrival, the Soviet Union, and that now they are bent on bringing down its only remaining rival, China. The other problem in building aWashington-Beijing axis is that China is in no condition to shoulder the burden of acting as co-ruler of the planet. China is dealing with a host of daunting domestic
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problems that include an extremely low per capita income, a huge gap between the rich and poor, high unemployment, corruption, a shortage of natural resources and ethnic conflicts in the regions. Beijing has its hands full with these problems, and it can ill afford the luxury of pursuing global hegemony. Moreover, China cannot offer an ideology that would capture the hearts and minds of the rest of the world. It is highly unlikely that Germany, Argentina,Nigeria or India would adopt Chinese socialism or Confucianism. In addition, China does not have sufficient might to establish military hegemony. Neither is it a leader in the fields of mass communication,popular culture,education or science. Although China’s is well on its way to becoming the largest economy in the world, no Chinese brand has yet appeared on a par withToyota, Olivetti, Omega, Christian Dior, Microsoft or Mercedes-Benz. The sooner Washington recognises that the world is destined to be multipolar,the better. And this will have a direct positive impact on improving U.S.-Russian relations as well.The world is not easy to live in,difficult to organise and next to impossible to rule. But that’s the type of world we live in, and there is no other option but to adapt to reality.
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Yevgeny Bazhanov is the provost for science and international relations at the Russian Foreign Ministry’s Diplomatic Academy in Moscow.
COMMEMORATING THE START OF WWII ILYA KRAMNIK COMMENTATOR
When Germany invaded Poland on September 1, 1939, few people could imagine thatWorldWar II would last six years and become the bloodiest war of the 20th century. The reasons for the war have already been discussed at length, but the debates have resumed now that several East European countries are trying to shift part of the blame for unleashing WWII onto the Soviet Union.The main target for their criticism is the Molotov-Ribbentrop Pact, signed on August 23, 1939. Critics say the pact allowed Hitler to start the war barely a week after it was signed. I cannot agree with this claim. To gauge the importance of that pact, we should analyse the situation before it was signed. Critics say it was inadmissible to sign the pact with the Nazi regime, but all countries subsequently involved in the war had signed similar agreements with Hitler. Therefore, accusing the
The polls After 10 years in power, Vladimir Putin remains Russians’ main hope MOST RUSSIANS POLLED IN A RECENT SURVEY CONDUCTED BY THE LEVADA ANALYTICAL CENTRE STILL SEE NO ALTERNATIVE TO PUTIN. IN YOUR OPINION, WHY DO SO MANY PEOPLE TRUST PRIME MINISTER PUTIN (%)?
SOURCE: WWW.LEVADA.RU
Soviet Union – and Russia – of immoral diplomacy is unreasonable. It became clear by August 1939 that all attempts to create a unified diplomatic front against Hitler had failed. At best, the Western powers pretended not to notice Germany's attempts to strengthen its influence in Europe. At the worst, they supported them. The culmination of that policy was the Munich conference on September 29 and 30 of 1938, the results of which could be ensured only with direct support from Britain and France, both of which eventually granted that support. The first victim of the subsequent war, Poland, took part in the division of Czechoslovakia along with Germany and Hungary. On March 15, 1939, Germany occupied Czechoslovakia, and subsequently split it into the German Protectorate of Bohemia and Moravia and the pro-German independent client state, the Slovak Republic. Germany took over not just Czechoslovakian territory but also its highly developed industries. However, more attempts were made in 1939 to
create a collective security system in Europe, including at the Anglo-Franco-Soviet talks. But the talks were undermined by the anti-Soviet position of Poland and Romania, which denied the Red Army right of transit in case of a war with Germany. Meanwhile, France and Britain dragged out the talks. The diplomatic correspondence from that period that has been published shows that until the very last moment, the Polish government did not expect history to turn against it. In that situation, the Soviet Union, fearing a possible establishment of an anti-Communist bloc in Europe while France and UK remained neutral, decided that a non-aggression pact with Germany was the only way to ensure its security. Poland succumbed to the German onslaught within three weeks of the beginning of the war. None of its allies offered any assistance to it. The Soviet Union received its share in accordance with the secret protocol to the Molotov-Ribbentrop Pact.This included western Belarus and western Ukraine, which Poland had occupied in
1920. Lithuania, still a sovereign state at that point, took over part of Poland, which had seized Lithuania'sVilnius region in 1921. The scale of World War II and its battles, the number of victims, and abominable changes the war brought to people's lives left an indelible imprint on human memory, which has since divided history into "before the war" and "after the war." Moreover, when people say "the war," they invariably refer to World War II, which for Russians means the Great Patriotic War, a war within a war that ended when the red banner of victory unfurled over the Reichstag in Berlin. Understandably, a war of that scale had a huge influence on the political, economic and military order of the post-war world, which saw the disintegration of empires, confrontation between the superpowers' blocs, and an unprecedented number of local conflicts. WWII brought about all of that, as well as the nuclear arms race.
Vladimir Putin’s approval rating has significantly fallen only twice: after the Kursk accident in 2000 and after the“monetization of benefits”in 2005. According to Levada Centre director Lev Gudkov, Russians are not concerned about“Putin having all the power in the country”.Sixty-three pc of respondents believe that“this will benefit Russia”,and only 16pc say that“this does not bode well”.Gudkov also stresses that only 28pc of respondents approve of Putin’s business qualities, saying that“he has been successfully solving Russia’s problems”. Most of people – 35pc – live in hope that Putin“will improve the situation in the country”, while 31pc of respondents trust the prime minister only because they see no alternative to him. Gudkov says the lack of an alternative is one of the causes of the prime minister’s enduring popularity. But the analyst believes that this is not an achievement, but a result of“certain policy aimed at forcing the opposition off the political stage and establishing control over the means of mass propaganda”.
Most Russians in favour of anti-alcohol campaign
The Russian government hopes to ease the grip alcoholism has on the country. President Dmitry Medvedev has proposed sweeping changes to Russia’s legislation, regulation, sale and advertisement of alcohol, but experts fear the government will be unwilling to take the steps necessary for effective reform. At a forum in Sochi earlier this month, Medvedev announced:“Frankly speaking, alcoholism in our country has become a national tragedy… Each person, on average (including children), annually consumes 18 litres of pure alcohol. If you convert this into bottles of vodka, it torments the soul!” Specific proposals included the banning of beer and light-alcohol advertising on TV, increasing penalties for the sale of alcohol to minors and extending the same regulatory measures to beer and light-alcohols currently applied only to hard liquors. The idea of tripling taxes on beer was also raised. A senior official confirmed that the government was considering raising the national drinking age from the current 18 years to 21.
THE MAJORITY OF RUSSIANS ARE IN FAVOUR OF THE INTRODUCTION OF AN ANTI-ALCOHOL CAMPAIGN, THE ALL-RUSSIAN PUBLIC OPINION STUDY CENTRE (VTSIOM) REPORTED. WOULD YOU SUPPORT AN ANTI-ALCOHOL CAMPAIGN (%)?
SOURCE: WWW.WCIOM.RU
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Ilya Kramnik is RIA Novosti military commentator
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Reflections
Found in translation Russian ‘No’: real, or a matter of culture? WITH THE USE OF PHRASES LIKE “YOU ARE NOT RIGHT”, OR THE MORE IDIOMATIC “THAT’S NOT SO”, ENGLISH-SPEAKING RUSSIANS OFTEN SEEM A LITTLE NEGATIVE. ANDREI GROMYKO, THE SOVIET-ERA FOREIGN MINISTER, WAS FAMOUSLY KNOWN AS “MR NYET”, EVEN THOUGH, EVENTUALLY, HE WOULD STRIKE A DEAL. PAVEL PALAZCHENKO RUSSIAN TRANSLATION COMPANY
Is this apparent“negativism”a matter of culture? Is Russian culture the opposite of Japanese, in which they don’t say“no”even when they mean no? My answer is: perhaps. It is actually true that many things that are commonly expressed in an affirmative way in English tend to acquire a negation in Russian.Where an American would ask you to hold on, a Russian would say“Ne kladite trubku”(literally,“Don’t lay down the receiver”).Where an Englishman would wish you to keep well, a Russian would probably put it this way:“Ne bolei”(“Don’t fall ill”).There are many ways of saying“take it easy”in Russian – and there is a“ne”in practically all of them.When we ask for directions or the time of day, we do it in a way that contains a negation, so that when some Russians unwittingly transplant the pattern into English it sounds very funny:“Can’t you tell me how to get to Leicester Square?”or:“Can’t you tell me what time it is?”It sounds as if one expects to get no reply, or is being deliberately impolite.In fact,in Russian it’s the opposite: a polite way of putting it. It is here that things get really interesting: our“no” is not always a real no. The negative can be surprisingly flexible, sometimes serving to convey understatement where other languages would force you to call a spade a spade.For example,the Russian word“nevysokyi”(literally“not tall”) is used when a person is really – well, short. Some other adjectives with“ne”are also quite interesting.“Nebednyi”(literally“not poor”) is used a little sarcastically to describe a person who is quite wealthy.And – translators, beware! –“neveroyatnyi”(according to many dictionaries,“improbable”or“unlikely”) actually means“highly unlikely”,“almost impossible”,and in colloquial speech,“incredible”. Rather than being a flat negation,“ne”can serve to make things rather vague.The Russian phrase that’s literally translated as“in a not distant future”can mean anything – tomorrow,in a few days, weeks,or even months.Don’t ask me why.The bottom line is that we are not as negative as we may sound.We, too, can be surprisingly flexible.
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This issue has been conceptualised by INTERNATIONAL MEDIA MARKETING, RESPONSE adqueries@timesgroup.com Co-ordinator: • Feature Mehernosh Gotla
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RUSSIA INDIA REPORT IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
www.pircenter.org The centre for policy studies (Russia) www.cdi.org/russia/johnson Johnson’s Russia List
FIVE YEARS AFTER BESLAN Beslan, a small town in North Ossetia, became known as Russia's 9-11 after a group of armed terrorists, demanding an end to the Second Chechen War, took more than 1,000 people, including some 777 children, hostage on September 1, 2004, at School Number One. NORA FITZGERALD RIR
On September 1, 2004, I urged my three nervous children into school.We had just arrived in Moscow and everything was new to us. It was a magnificent summer day, nothing to suggest autumn except for the Russian children walking purposefully to school. As journalists, my husband and I had lived in Europe for six years already and squeezed a lot of wonderful as well as scary and confusing times out of those years. Here, we were lucky enough to begin a new adventure, in one of the most epic countries in the world. These were the kind of thoughts running through my head as I returned from school to our Sovietstyle apartment across from the Hotel Ukraine. I turned on the TV to see what was on offer to improve my Russian skills. Instead, I saw immediately that there was some kind of school crisis going on – mothers with small headscarves were crying outside a schoolyard, men ran around haphazardly. I thought this was happening in Moscow.There were clearly children taken as hostages. I called my husband, who was making a good show by already appearing in the office.
“There is a school taken hostage in Moscow!”I almost yelled to him over the phone. “No, no, it’s in Beslan,”he replied. “Where’s Beslan?”I cried. “In North Ossetia,”he said. This meant little to me. I knew something of the hard scrabble life and conflicts in the Caucuses, but North Ossetia was new to me. But soon the children in the school gymnasium rigged with explosives, sweltering in the heat, became the only world that mattered. Beslan, its besieged school and dirty streets, became hauntingly familiar to me over the next 52 hours. It is five years since School No 1 in Beslan was stormed by terrorists and 1,000 students, parents and teachers were taken hostage. All of Russia, and much of the world, stopped, horrified, holding vigil for the next two and a half days. It would all end badly, chaotic, botched-the attempt to rescue hostages. By September 4, 331 people were dead, almost 200 of them children. Hundreds more were seriously injured. On the first day, strangers cried together. After the initial shock, we all struggled to understand. My husband left for Beslan that day. I had not yet started working, so I paced the apartment trying to think of something else besides those children in the gymnasium of the school in Beslan. All of Russia could think of nothing else, in fact, and I bonded with my host country in some primitive way, and quickly. My husband had covered many conflicts, but he would come back from Beslan a little bit different. So did his Russian colleagues. Walking
through a makeshift morgue of children does not leave you. When the siege ended in such catastrophe, the world wept with Russia. Beslan became known as “Russia’s 9/11”. Many prayed for those who died, more prayed for those who climbed out of windows, singed skin and broken hearts, to a much more complicated and tragic life. Every single living person in the city of Moscow was clinically depressed in the autumn of 2004.Anxiety was diffuse, but typical aggressions of everyday living were absent. For a few months, the Bentleys stopped at the crossings and young teens walked the pensioners across the street. There was a strange and quiet empathy in the air. I remember walking on a bridge over the Moscow River on NewYear’s Eve, 2005. The sadness had lifted in Russia, as quickly and collectively, it seemed, as a crowd taking off their coats. At a certain point, people had to move on.Yet, this was eerily quick. Of course, time naturally moves away from grief. But my Russian and expat friends agreed – there was no sense to be made and a heavy effort to this forgetting. When it comes to Beslan, my sense is that Russia – aside from the few Russian activists who will not forget – wants to keep the awful pain away. I understand moving away from the pain. But it makes me wonder about the survivors.The pain is inside them.They have nowhere to go.
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Nora FitzGerald was a Moscow correspondent for ARTnews.
From the newspapers The Moon was chosen over Mars Alexandra Koshkina
Russia introduces house arrest Vladislav Kulikov
The US is planning to explore Mars along with Russia. Russia, on the other hand, is not planning any flights to the planet, citing economic difficulties. An expedition to the Red Planet should be conducted with the participation of space agencies in Russia, the US, and other countries. This was the proposal made yesterday by the Manager of NASA's Moscow Technical Liaison Office, Mark Bowman, at the Sixth International Aerospace Congress in Moscow. According to Bowman,the crew who will pilot the spacecraft to Mars will include citizens of many nations; meanwhile, the mission will be led by NASA and the Russian Space Agency (Roscosmos). "I think that this absolutely must be an international crew," said Bowman. Oleg Korablev, Deputy Director of the Institute of Space Research at the Russian Academy of Sciences (RAS) believes that, at first, the earthlings would work on lunar programs. "This is a problem of will and not technology. From a technical point of view, it will be possible to fly to Mars in 15 years. But no one will invest very much in these programs because they are not of the highest priority," he told a Gazeta journalist. According to Korablev, no manned missions to Mars are mentioned in new legislation, which is being developed by a new space exploration federal program designed to be active until the year 2020.There are only two Mars exploration projects conducted by machines that are designed to collect soil samples."Currently,Mars expedition talks are being held in the circles of enthusiasts who are wishing that this project is carried out as a distant national goal," noted Korablev.
Until now, Russians convicted of even relatively minor crimes could end up, under Russian law, in a penal colony. But it appears that’s about to change. In a plan introduced by justice minister and President Dmitry Medvedev appointee Alexander Konovalov, those convicted of minor offences will be offered punishment in the form of community service, house arrest or a fine. Medvedev has long lambasted Russia’s legal system for a lack of options to prison sentencing. Today, the country is home to 890,000 prisoners – more than anywhere else except the United States. Following a decline in the prison population at the start of the decade, this number has started to increase in recent years. Experts hope the new reform will help bring this figure down.
Baku and Ashgabat switch to military threats Sergei Kulikov
Recently,Azerbaijan's Ministry of Foreign Affairs condemned Ashgabat's plans to create a naval base on the Caspian Sea. The information war between Turkmenistan and Azerbaijan, which has been increasing since late July, reduces the chances to complete the Nabucco project, designed as an alternative to Russia's transportation routes of hydrocarbons. "We want to see the Caspian Sea region to be a region of peace and cooperation - that is, a de-
militarized, rather than a militarized region," Elkhan Polukhov, press secretary of Azerbaijan's Foreign Ministry, said when commenting on Ashgabat's plans to establish a military base on the Caspian Sea. According to experts, the increasing tensions between Baku and Ashgabat are mainly beneficial to Russia, because this conflict serves as an obstacle to the construction of the European pipeline, Nabucco, which is meant to transport gas from Central Asia directly to Europe, bypassing the traditional route. Of course, the chances for the ambitious, South Stream - Nabucco's direct competitor - are thus increasing. However, as suggested by Dmitry Aleksandrov, a leading analyst of Financial Bridge, escalation of the Turkmen-Azerbaijani conflict may have very negative implications for Russia. "As soon as a third force comes into this dispute - be it the EU, the UN, etc. - Russia may sustain big losses," he explains. "Besides, the basis to believe that this may be the case exists - Turkmenistan's intention to appeal in the International Court of Arbitration. Russia holds a powerful position; but if international organisations begin to get involved, its exclusive position may be in question."
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Full versions of the articles – and more – can be found at WWW.RUSSIATODAY.RU
BOOKMARKS
www.admcity.nnov.ru/english Nizhniy Novgorod city administration official website en.wikipedia.org/wiki/Trans-Siberian_Railway Find more information about the railway
RUSSIA INDIA REPORT
Travel
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
15
Diary A trip on the Trans-Siberian Railway, lasting about a week, takes you through almost all of Russia
Discoveries on the eastern railroad In this series, Aanchal Anand continues her story about a trip along the Trans-Siberian railway, running 9,288 km between Moscow and Vladivostok. In this piece, she recounts visiting two cities right in the heart of Russia – Nizhniy Novgorod and Perm.
Nizhniy Novgorod is situated on the high banks of the Volga river, the longest in Europe with a length of 3,690 km (2,293 miles). Here you can see the city’s river port and the red brick walls of the Kremlin.
I stepped out of Nizhniy Novgorod’s Gorky railway station and found myself standing opposite the most trusted sign of civilisation – a giant McDonald’s ‘M’ sitting on top of a mall. I had pictured Nizhniy as a small and, I dare say, ‘unhappening’city but this sight alone had raised the bar! Within the first 10 minutes, Nizhniy revealed she could not be conquered on foot. Later, I found a bus that would take me to the centre to Nizhniy’s biggest attraction – the Kremlin. Every layer of the city added to the excitement of getting closer to the centre. For a change, Lenin Square was not in the middle of the city. Lenin’s statue looked more relaxed than in Petersburg and Moscow.And this time, Lenin wasn’t alone either. To his left were tiny metal members of the proletariat, referred to as“reptiles”by the locals! The Kravinsky Bridge, spanning the Oka river, connects the two parts of Nizhniy while the Oka snakes below and surrenders her embankment to the biggerVolga. The Kremlin’s gates ushered me into the massive grounds that housed local government buildings and, more importantly, museums,cathedrals and war monuments. My personal favourite was the ‘Museum of People’s Unity’, a one-room miracle at the Ivanovskaya tower that retraced Nizhniy’s steps through the Mongol invasions, theTimes
ROMAN YAROVITSIN_ITAR-TASS
AANCHAL ANAND SPECIAL TO RIR
The Trans-Siberian is the longest railway in the world, a full 9,288 km. Built in 1891-1916, it connects Moscow with the Far-East city of Vladivostok.
of Trouble and its rise to an important trade centre. “How much is one student ticket?”I asked the supervisor. He looked up at me through his glasses and grey fringe,and said, “For our students,it’s 20 roubles, but for international...”“...Nu ya vasha,”I interrupted, showing my St Petersburg State University student card.No one can appreciate price discrimination more than students in Russia – even compared to prices for international students, students enrolled in Russian universities
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pay a fraction! “So where are you from?”he asked. This is my favourite question because it always leads to royal treatment. And it did! I would have loved to explore all his suggestions, but, considering I was there for just a day, I had to stick to my itinerary and head to Flat 3, 214 Prospekt Gagarina. This is where Soviet Nuclear Physicist and Nobel Laureate Andrei Sakharov was imprisoned under internal exile from 1980-86 for criticising the USSR’s invasion of Afghanistan. Today, the flat is the Sakharov Museum and has exhibits on his life, work and the support extended byVladlen Pavlenkov of US-based ‘Freedom of Communications’ to ensure that Sakharov’s struggle was known to the world, and to lobby with the Gorbachev administration for his release. I spent the afternoon walking
about ‘Shvitsariya’ (Switzerland) – a park nearby running at least a couple of kilometres along the Oka embankment. I snailed my way through the city and got to Gorky Square. During the Soviet period, Nizhniy was named Gorky after the Communist writer, Maksim Gorky, and in the middle of the Square is a small park with a statue of the city’s former namesake. Yamal was a big mistake! This could unarguably have been the Russian Railways’ best train, with immaculate velvet cushioned seats, brand new fittings and linen that could turn the best of us into Sleeping Beauties! That’s why Yamal was a mistake – any train after this was going to be a disappointment and I had five more to go before getting toVladivostok! 14 hours later, I stepped onto Perm’s soil.“Perm is a city most travellers could bear to miss.” My first steps in the city saw me already echoing my guidebook’s sentiments! I had expected
Nizhniy to be small; instead, she surprised me with her size and energy. And now, when I thought Perm would be like the Nizhniy I saw, Perm was determined to be the Nizhniy I had initially imagined. I checked into Hotel Ural on Lenin Street, the city’s spine, and almost immediately started exploring. I didn’t feel the city had much to offer a tourist except, perhaps, an attractive setting in the Urals and a lot of theatres and philharmonic concert halls! But the people factor was the unexpected winner. Everyone from the hotel staff to random people on the street was very friendly and ready to go out of their way to help! But there was bummer – Perm was freezing and my two sweaters were finally coming in handy! The lack of tourist attractions didn’t bother me much. After all, Perm was just an excuse to go to Perm-36, the only surviving Gulag (Soviet forced labour camps) museum, located in Kutchino village
about 80 km east.That’s where I headed the next morning. Lyubov Tretiakova, a co-ordinator with Perm-36, had organised my visit. She suggested which buses to take from Perm and even sent her car to pick me up from the point where the road to the museum branched off from the bus’s route. Moreover, when I got there, she said she would drop me to the next village, 20 km away, from where I could get a bus back to Perm. Narrow wooden plank beds; single toilets shared by over 50 people; possibility to take the day off only if temperature dipped below -55˚C; worn-out shoes and gloves; electric fences; one-year old Larissa’s grave – this was Perm-36. On my way back, as the bus moved along the grassy hills sprinkled with yellow flowers, I remembered Lyubov mentioning that Perm-36 is primarily funded by the Perm regional government,which in turn must receive some funds from the Kremlin. It suddenly occurred to me that the journey from Nizhniy to Perm was a lot longer than the thousands kilometres I had covered a couple of days ago. It was the journey from Sakharov’s exile for speaking against the government to the restoration of a former Gulag camp dedicated to the victims of political repression with support and funding from the very same government! The West doesn’t acknowledge this journey and I don’t know what former Gulag prisoners think of it either. It’s probably not enough. But, at least, like a foetus’s first heartbeats, it is alive!
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Aanchal Anand has a BSc from the London School of Economics. She studied Russian at St Petersburg State University. Look out for more travel diaries in this section
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RUSSIA INDIA REPORT
Feature
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_SEPTEMBER 09_2009
Music Thanks to the talent of violist Yuri Bashmet, an underappreciated instrument is now popular
Mister viola A rock star in the classical world ALEXANDR DANILUSHIN_ITAR-TASS
Certain performers are “inscribed” in time, predestined to stir up the life of music and discover the unexplored. Yuri Bashmet is such a man – a dynamic and generous talent. Thanks to him, the world has come to appreciate the viola as a solo instrument. ELENA FISHER RIR
Yuri Bashmet is the first violist to give solo concerts in nearly all the world’s cultural capitals. Some 50 works have been written for or dedicated to him.As a conductor and soloist, he performs with the world’s best symphony orchestras. Journalists call him“the new Paganini”. Reading Bashmet’s remarks is a pleasure:“When I studied at the Moscow Conservatory, all the students in the Viola Department were either moronic boys or fat girls.”Among instruments,the viola occupied a modest place until Bashmet blazed a triumphant trail. Its students are no longer grey mice in crowded orchestra ranks, but striking youths one can’t help noticing. Bashmet headed the ExperimentalViola Department at the Moscow Conservatory. The viola is now in demand, and this metamorphosis is to Bashmet’s credit. His brilliant career has consolidated his reputation as one of the most original musicians of today, to say nothing
What the Queen loves “Once I found myself playing an absolutely fantastic instrument made by the master Stradivarius. It was a concert in memory of Princess Diana in London. Playing that viola was very difficult – I was sick for ten days, my arms and shoulder ached. After the concert, Queen Elizabeth came up and asked: “How was it to play? Did you like the instrument?” Since the viola had been loaned to me by the Royal Academy of Music in London, I said: “Yes, it’s tremendous, but it was very difficult for me. No one
had played it in a long time.” “Can you be more specific about the problems you had?” “It was like trying to ride an unbroken horse that never had a saddle on its back.” The Queen laughed. She liked that a lot. Her suite moved on, and the last woman in the procession asked “Did you prepare long for your meeting with the Queen?” “I prepared to perform Mozart on a famous Stradivarius viola,” I said. “Horses are the only thing the Queen loves.” (from Bashmet’s book, At the Dream Station)
of his colourful life, sensational interviews and publicity stunts. Yuri Bashmet is a brand, a cult figure, box-office gold. He has played the music of the greatest composers in the best concert halls. He heads one of Moscow’s most elegant music festivals, December Evenings, formerly the domain of world-famous pianist Sviatoslav Richter. His creative energy allows him to run, both the Moscow Soloists Chamber Orchestra and the New Russia Symphony Orchestra. Audiences listen to anything performed by Bashmet. His impressive demeanor is magnetic; only the lazy have not compared his extravagant look to the ecstatic image of Paganini. HisTV
programmes win ratings, while participation in any show guarantees a full house. Bashmet is open to all genres, from academic art to avantgarde experiments. But he always returns to classical music, in which, in his words, one reads messages to eternity.These swift switches go back to childhood: as a music student in Lvov, the future maestro devoted all his free time to playing guitar and drums in a rock group. Today Bashmet performs duets with bards. Or he may, as a master of surprise, throw a cloak over his shoulders and accompany a bold Cossack song on the drums. He recently made his film debut in Sergei Solovyov’s
Assa-2,finding enormous pleasure on the noisy set. Bashmet is indeed someone who knows how to find pleasure. Isn’t that rare quality what makes for the omnivorous creativity of this man-in-perpetual-motion?
“If I leave, I’ll yearn to return” Bashmet is a true virtuoso: many of his renderings set the standard. Playing is not escaping from reality, but expansion of the universe. Classical music is not a museum of petrified exhibits, but a living and powerful force. As is contemporary music, in which Bashmet sees not labyrinths or conundrums, but a strict system that must be made comprehensible. His transcriptions may scald, soothe, torture you with questions or explain the reasons. Bashmet’s viola versions of music written from different centuries and countries always reflect the era. Discoursing on life, he arrives at his own concept: if you study music, your only god is the composer. Also important for every man is his home.That is why Bashmet has never responded to suggestions to live in some warm, luxurious corner of the globe –“I want to be free, to have the right to choose. If I left, I would yearn to return. Moscow is the creative centre. Paris and Munich are cities that are nice to arrive in, and nice to leave.”
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www.yuribashmet.com Yuri Bashmet website en.rian.ru/business RIA Novosti newswire www.russianlessons.net Free on-line Russian language course
Language Proverbs and sayings: A riddle for every occasion ALLISON QUINN RUSSIAN TRANSLATION COMPANY
If Winston Churchill was right, and Russia is in fact a riddle wrapped in a mystery inside an enigma (which I think many foreigners would agree with), one of the surest signs of this is the plethora of Russian proverbs and sayings. Some are simple, some are simply perplexing, and others may leave beginners in the language open-mouthed and speechless in amazement. In fact, they are used so often that for beginners in the language who are not familiar with the popularity of these sayings and proverbs, it may very well seem that they are being spoken to only in riddles. One of the more popular Russian sayings is “Rabota ne volk, v les ne ubezhit,” which translates literally as, “The work is not a wolf; it’s not going to run off to the forest.” The English equivalent would be, “The work isn’t going anywhere – it can wait.” Another popular saying is, “Skazhi, kto tvoi druz’ya i ya skazhu kto ty.” The English equivalent would be, “Tell me who your friends are and I will tell you who you are.” The meaning is clear enough: who you choose as your friends reflects who you yourself are as a person. There is a neverending supply of sayings about friendship, like, “Drug dlya vcekh, drug nikomu,” meaning “A friend to all is a friend to none.” But while the cited examples are perfectly understandable to most foreigners, there are many which, unfortunately, are not, and they are likely to leave those who are new to the language scratching their heads in confusion. Take, for example, “Baba c
vosu – kobyle legche.” This saying would translate literally as, “Once the woman gets off the cart, it’s easier for the horse.” The phrase actually has a very simple meaning and an extremely popular English counterpart – “Good riddance!”—but the sheer style of Russian proverbs and sayings, the fact that they tend to paint a very specific picture or scenario instead of saying something outright, and of course the sheer prevalence of their usage, can leave beginners baffled or under the false impression that they are being spoken to in some sort of mysterious code. Luckily, there seems to be a saying in Russian for just about any situation imaginable. If a certain person is not happy with their looks, for example, their loved ones may comfort them by saying, “s litsa vodu ne pit’.” In English, the same idea would be expressed with the phrase, “Beauty is only skin deep,” but the Russian version translates literally as, “Water is not to be drunk from your face.” And yet, while the sheer richness and abundance of Russian proverbs may seem frustrating to some at first, it’s also one of the most rewarding aspects of the language – there are thousands of these sayings, and each one of them is guaranteed to not only make you think, but also unravel just a little bit more of the elusive puzzle that Churchill was talking about. More often than not, once you get past the enigmatic wrapping of the puzzle, you will find the same universal truths you’d find in any language – expressed, of course, in an utterly Russian style.
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