Oct 2009, Russia&India Report

Russia India

Power to the people Nuclear energy is not our tomorrow, it’s our today P.05

REPORT

...Marching towards a common future A Business Report from The Economic Times In association with Rossiyskaya Gazeta MUMBAI ● NEW DELHI

Wednesday, October 14, 2009

THE ECONOMIC TIMES

Economic partnership New trade targets must be met

Looking forward to a new era Interview with a former President

Who’s wearing the trousers?

Bosses set the style code

P.02-03

P.07

P.16

Investigation

Investing in leaders of the future A new business school set up to raise Russia’s next generation of top managers has been unveiled by President Dmitry Medvedev near Moscow.The Skolkovo School of Management is touted as having one of the best MBA programmes in the world.

The project is supposed to rival famous business schools in America and Europe.“We noticed that in many industries, if not all, a lot of profit is going to come from emerging markets – Russia, India, China and others – which have very difficult and challenging environments; there is not really a school in the world addressing that,”said Skolkovo deanWilfriedVanhonacker.

Meanwhile, Russia is now undergoing challenging educational reform designed to pull the country into modern times. So far, this has thrown up more questions than answers...

The hidden past inside the secret cities Cold War relics, Russia’s 45 closed cities continue their proud military traditions facing an uncertain future.

They were created as centres for research and production of arms and nuclear weapons, hidden from public view and living in isolation. But now they are opening up: how will they adapt to new economic realities?

ANNA NEMTSOVA RIR

The Russian film industry, which this year marked its 100th year of existence, is developing despite the crisis. Indian cinema is still loved in Russia, and filmmakers from both countries are keen to co-operate.

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KONSTANTIN ZAVRAZHIN_RG

panies last month, removing a hurdle for its privatisation or an additional share offer.

Nabiullina, speaking after a Putin-chaired government meeting on privatisations, reiterated plans to sell upto 20 pc in shipper Sovkomflot through an initial public offering or a sale to a single investor, either at the end of next year or in early 2011.

To walk the autumnal streets of Znamensk, trimmed with roses, asters and chrysanthemums, tourists need a special permit. The only other way into a closed city – unofficially, that is – is to avoid the checkpoint and walk in through one of the holes in the nine-kilometre-long wall surrounding the city. Only 33,000 people live on this otherwise deserted steppe southeast of Moscow.

The holes in the wall, and rumours that ongoing reform might one day open their city, do not please the citizens of Znamensk: for many, the lock on the gate and secretiveness of their hometown is not a Soviet relic, but the meaning and pride of their lives.

Russians first heard officially in 1986 that there were dozens of closed cities and towns all over the country with more than one million people living in them.The cities had mysterious numbers attached to their names: Arzamas-16 (the home of the nuclear engineers who put an end to America’s nuclear monopoly), Krasnoyarsk-26,Tomsk-7, and others that sound like sci-fi thriller titles.

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Business A new wave of privatisation to come

Filmmaking Crisis no obstacle

The government plans to raise 70 bn rubles ($2.34 bn) next year by selling stakes in more than 450 companies, Economic Development Minister Elvira Nabiullina said.

ANATOLY MEDETSKY THE MOSCOW TIMES

Prime MinisterVladimir Putin reiterated his support for the major sell-off of government property, saying the efforts

would help fill the federal budget.The forecast revenues from the privatisations would be dwarfed by the anticipated budget deficit of 3 trln rubles.

The assets to go on the block will include 13.1 pc of the government’s blocking stake in insurance industry leader Rosgosstrakh, Nabiullina said. President Dmitry Medvedev excluded the company from a list of strategic com-

MAXIM BOGODVID_RIA NOVOSTI

State hopes to raise $2.3 bn in 450 sell-offs

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Co-operation

BOOKMARKS

RUSSIA INDIA REPORT IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

www.rbcnews.com English-language business news en.rian.ru/business RIA Novosti newswire www.rus-ind.com/forum Find more about the III Russian-Indian Forum on Trade and Investments

News in brief Investment Russian and Indian leaders pledge to increase sluggish bilateral trade ties

The Russian government may buy a 20 pc stake in AFK Sistema’s Indian subsidiary, Sistema Shyam TeleServices (SSTS). Funds could be provided by Vnesheconombank, but in this case AFK Sistema would have to buy back SSTS shares in five years, repaying Vnesheconombank $680 mn plus 9 pc interest. The deal is part of a scheme to settle India’s debt to Russia. Avers Appraisal Centre tentatively valued the SSTS stock at $3.4 bn, at the request of the Federal Agency for State Property Management.

Different scenarios are being considered. The arrangement described above, in which the government would buy a 20 pc stake in SSTS from AFK Sistema, is widely seen as most likely. Тhe government would give AFK Sistema a loan with the SSTS shares used as collateral. SSTS is a joint venture between the Shyam Group of India and Sistema. It has a unified license for granting services of fixed and cell lines on India’s entire territory.

Kommersant

Norilsk еyes India Norilsk Nickel is planning to open an office in India, said Viktor Sprogis, the company’s Deputy General Director for Sales and Distribution.

He described India as an interesting partner with very promising markets. It makes sense for Russia to move to long-term (3-5 year) contracts with India, Sprogis believes. Norilsk Nickel is interested in enhancing information support and developing personal rapport with Indian colleagues.

Norilsk Nickel is the world’s largest producer of precious and nonferrous metals, accounting for more than 20 pc of global nickel production, over 10 pc of cobalt output and 3 pc of copper. Bigness.ru

India to buy Russian tourist spacecraft India’s space agency has applied to buy a manned spacecraft for tourist missions from the Russian Federal Space Agency (Roscosmos). “A company called Space Adventures and the Indian Space Research Organisation have offered to buy manned spacecraft from us,” confirmed Alexei Krasnov, director of Roscosmos manned space programmes.

Each vehicle can take two tourists for a space flight, according to Krasnov. The spacecraft will be manned by professional crews from Russia. ITAR-TASS

Ministers: We have more work to do Russian-Indian trade is expected to reach $15 bn in 2012. The projected figure was discussed by the two countries’ top economic officials as they met at the third Russian-Indian Trade and Investment Forum, which took place in Moscow late last month.

VIKTOR KUZMIN RIR

The agenda of the gathering, which was attended by some 400 delegates from Russia and India, focused on plans for new joint projects and efforts to boost the long established business relations between companies and regions from both nations.

Russian-Indian trade totalled $3.2 bn in the first six months of this year, with $8.4 bn expected for the whole of 2009 and $10 bn projected for 2010, Deputy Prime Minister Alexander Zhukov told the forum.

This is not much, especially given both countries’trade with China (trade between India and China topped $40 bn in 2008, behind the Russian-Chinese figure of $56 bn).

However, it’s not all doom and gloom: India is one of the few countries to see trade ties with Russia growing in 2009, in defiance of the overall trend whereby cross-border commerce shrinks as oil and gas prices fall.

“With India, we have a different trade structure, with hi-tech products playing a greater role.

As a result, Russian-Indian trade is on the rise,”Zhukov explained.

Russian Economic Minister Elvira Nabiullina continued in the positive vein, reporting that Russian-Indian trade has been growing by a third every year since 2005, while the share of high value-added products has been climbing, too. Despite the global economic downturn, Russia’s trade with India increased by 10 pc over the first seven months of this year.

Nabiullina criticised the $10 bn target for 2010 as “too low given both countries’ potential.” Among Russia’s trade partners, India currently occupies a modest 24th place, accounting for as little as 0.9 pc of Russia’s foreign trade – but still more than Russia’s share of Indian foreign trade, estimated at a mere 0.8 pc.

The Economic Minister described India’s market as one of the most attractive to Russian companies. At the same time, Nabiullina stressed the need to enhance the structure of bilateral trade, including through joint co-operation.“We expect both countries’ business communities to submit their pro-

EXPERT MAGAZINE

Vnesheconombank to fund AFK Sistema’s Indian deal

Russian Economics Minister Elvira Nabiullina (centre) and Indian Commerce and Industry Minister Anand Sharma (right).

posals for such projects,” she added.

Among priority areas for joint projects, the minister named manufacturing, energy, mechanical engineering, aircraft building, communications, pharmaceuticals, metallurgy, construction and agriculture.

For his part, Indian Commerce and Industry Minister Anand Sharma pointed to the need to diversify co-operation, focus-

ing on investment in vital areas such as pharmaceuticals, energy, IT, food and the jewelry industry.

Addressing the forum, Nabiullina noted India’s accumulated investment in Russia greatly – by a factor of one thousand – exceeded Russia’s investment in India.According to Russia’s Federal State Statistics Service, India’s total investment in Russia was reported at

just over $1 bn as of the end of 2008, including $895 mn in direct investment, while Russia’s total investment in India stood at just $12.1 mn, including $900,000 in direct investment.

“Russian-Indian trade is set to rise over the next few months as India remains interested in Russian investment. Russian authorities seem to be serious about boosting trade ties with India. Besides, we have a power-

ful and interesting rival in the region, namely the United States: American-Indian co-operation has increased greatly recently,mostly in the military and technical areas. India also attracts the US as a potential hitech market.In this respect,Russia certainly wants to put up competition,” believes Alexei Mukhin, Director of the independent Centre for Political Information in Moscow.

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RIR Dossier: key joint investment projects In Russia

In India

ONGC Videsh Limited (OVL) invested in the development of the Sakhalin-1 oil and gas project and in the acquisition and development of the Imperial Energy Company, developing two oil fields in the Tomsk region. OVL plans to bring its oil output from the current level of 500,000 tonnes to 5 mn tonnes a year.

ICICI Bank invested in the opening and development of ICICI Bank Eurasia in Russia.

Tata Motors invested in the assembly of light commercial Indian vehicles at Russia’s Avtomobili i Motory Urala factory and the assembly of Indian buses at Russia’s Volzhanin and Samotlor works.

CUMI International Ltd. invests in the production of abrasives in the Russian city of Volzhsk (Volgograd region).

TATA Tea invested in the creation of a joint tea and coffee packaging business, involving Grand Trading House (49 pc), TATA Tea (33 pc) and the European Bank for Reconstruction and Development (18 pc).

AtomStroyExport completed construction of the first two power generating units of the Kudankulam Nuclear Power Plant in the Indian state of Tamil Nadu. In December 2008, an agreement was signed for co-operation in the construction of four additional power units, 1,000 MW each, as well as new nuclear power plants in India based on Russian design.

AFK Sistema will invest up to $5.5 bn in the development of its Indian subsidiary Sistema Shyam TeleServices (SSTS, in which AFK has a controlling interest of 73.71 pc) over the next seven years.

KAMAZ JSC and India’s Vectra Group set up a joint venture in April 2009 to manufacture KAMAZ heavy commercial vehicles in the Indian city of Hosur (Tamil Nadu). The company will produce 5,000 vehicles a year. KAMAZ has a controlling interest.

Titanium project. An intergovernmental agreement was signed in November 2007 to expand the use of funds paid by

India to settle its debt to Russia, which stems from government loans granted to India by the former USSR and the Russian Federation. As a result, some $1.2 bn of debt repayment funds will be available for investment.

The first project is a joint venture to produce titanium products, created in the Indian state of Orissa in 2008. Russia will invest about $126 mn.

Banking sector. In 2008, VTB Bank opened an office in New Delhi. Sberbank of Russia is also in talks to open a branch in India, announcing plans to invest $17-20 mn in the project.

In 2008, Russian Helicopters JSC (part of Rosoboronprom Corporation) and India’s Vectra Group set up Integrated Helicopter Services Pvt. Ltd., a joint venture specialising in helicopter equipment maintenance and spare parts delivery. Russian Helicopters has a controlling interest of 51 pc. Oboronprom Corporation’s entire business in India is worth billions of dollars.

Military and technical co-operation. Both countries are implementing a military and techni-

cal co-operation program through 2010, covering over 200 projects worth some $20 bn.

Some of these have already been completed; one of the largest is the licensed production of Russia’s Su-30MKI fighter jets in India. Russian companies are also fulfilling India’s orders for MiG-29K and MiG-29KUB shipborne fighters, as well as Ka-31 helicopters. India imports Russia’s T-90S battle tanks, also producing them at home based on a Russian license.

An agreement was reached during an aerospace show in the Indian city of Bangalore in February 2009 to create a 50-50 joint venture producing a multi-functional transport aircraft (the contract is worth $600 mn).

Among interesting projects under discussion are plans by Russia’s SIBUR and India’s Reliance Industries Ltd. to build a gas chemical company in Russia, and the planned construction of a LNG terminal and a refinery in the Indian city of Haldia by India’s Spice Group and Russia’s Zarubezhneftegaz.

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BOOKMARKS

www.indiashowrussia.com/index1.htm India show 2009 in St Petersburg website lenexpo.net/a0/en/ "Lenexpo" exhibition center www.ficci.com FICCI website

RUSSIA INDIA REPORT

Co-operation

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

News in brief

Trade fair Russian and Indian business interests come together in St Petersburg

Technological collaboration goes on About 150 leading Indian companies, both public and private, took part in a farreaching exhibition of India’s technology and traditional crafts, which was held in St Petersburg’s Lenexpo exhibition center earlier this month.

The India Show 2009 has become Russia’s largest Indian business event of the year.

The exhibition’s prime goal was to highlight the broad spectrum of India’s manufacturing and technological achievements, fostering business contacts between exporters, importers, suppliers and buyers on both sides.

There was no shortage of exhibits featuring a wide variety of products and technology, with emphasis on mechanical engineering, chemicals, IT, electronics and software, along with space technology, light industry, agriculture and food products.

India’s famous fabrics, jewelry and souvenirs added a unique touch to the event.

An important place was reserved for scientific research

DMITRIY KOSCHEEV_RG

EVGENIA TSINKLER RIR

Traditional Indian arts and crafts were a popular attraction at the recent trade fair in St Petersburg.

projects from the Integrated Long Term Programme (ILTP) for Russian-Indian co-operation in science and technology, launched 22 years ago. Rajeev Kumar, a professor at India’s Department of Computer Science & Engineering, said 500 projects have been implemented since 1987, and another 100 are in the works. In addition, 10

joint scientific and research centres have been created.

Co-operation between scientists peaked during 1988-1991, which saw a flurry of exchange programmes, but this period was followed by a decline due to financial shortfall.“Now our co-operation is getting back on track.We are particularly interested in such areas as biotech-

Interview RIR speaks to a business leader

Harsh Pati Singhania, President of the Federation of Indian Chambers of Commerce and Industry (FICCI), believes Indo-Russian economic relations are entering a new stage of fruitful co-operation. He believes considerable positive collaboration has already been achieved.

IRINA KOSYREVA RIR

How would you estimate the level of bilateral economic ties today?

The Indo-Russia relationship runs deeply across a number of areas including defence, space and security, but less emphasis had been laid on trade and investment.

However, things are changing.

The level of economic engagement between business is rising: until the 90s, we had more“officially-managed trade”based on barter arrangements between the two governments and state companies. Most private companies had little or no direct business contacts with the erst-

while Soviet Union.There is increasing recognition that we can do (and have done) well on economic engagement.More Indian companies are turning to Russia, and vice-versa. Russia has a dynamic and optimistic attitude towards private investment. It is also a very good destination for high-end software development and energy investment. It offers the benefits of a well-developed infrastructure and high literacy rates. Indian interests in Russia have been mostly limited to defence, nuclear power and heavy industry. But it also offers huge opportunities in infrastructure, metallurgy, real estate, pharmaceuticals and other sectors.Some sectors attracting FDI from Russia to India are chemicals, telecommunication and trading and consultancy services.

Moscow and New Delhi continuously stress the importance of direct contact between our business communities. What is FlCCl doing in this respect?

FICCI has been taking various

KONSTANTIN FETS

The future is looking bright in science and technology

Mr Harsh Pati Singhania President, FICCI

initiatives with Russia.We have been able to form a powerful business delegation across two sectors – oil & gas and pharmaceuticals. There are CEOs representing both PSUs and private organisations.Additionally, we have strong representation from sectors such as chemicals, textiles, steel, diamonds, paper, tyres, tea, etc.

What spheres of Indo-Russian bilateral co-operation look most promising and beneficial?

nology, informatics and nanotechnology,”Dr Kumar said.

Among the most vital is a joint Russian-Indian project to build a collector for deep-seabed polymetallic nodules.

India’s vast territory underlying the central Indian Ocean, some 75,000 square kilometers in size, is rich in manganese, nickel, cobalt and copper, but it

I mentioned areas where Russian and Indian businesses can co-operate. Science and Technology is another major field.

Russia has excellent know-how in disciplines like theoretical physics, plasma physics, mathematics, nanotechnologies, aerospace, nuclear science and biology. It has powerful research organisations: the Russian Academy of Sciences, the Russian Foundation for Basic Research and a funding agency built on Western models.

Twenty years of active collaboration between India and Russia under the Integrated LongTerm Programme (ILTP) have resulted in stable scientific relations. Several bilateral thematic centres have been established to promoting bilateral scientific research and liaise with industry.

Under the new bilateral programme for 201 0-20, thrust areas of co-operation in science and technology will be renewable energy, healthcare, drug discovery and nanotechnology.

India and Russia have graduated from being just buying and selling partners. Both are now focusing on technological collaboration: a light transport aircraft, seismic instrumentation, accelerators and lasers for different applications, polio vaccine manufacture, develop-

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is a daunting task to extract the minerals as they rest at a depth of 6 km, says Mr Sudhakar from India’s Ministry of Earth Sciences. “Russians are good at deep-water technology. Experts from the Experimental Design Bureau of Oceanic Engineering at the Russian Academy of Sciences helped us create a multi-functional unmanned underwater vehicle with the required immersion depth and capacity to process up to 100 tonnes of nodules a day. It can also be used for gas hydrate deposits, which is important for Russia, too,”he explained.

Another crucial area is space exploration. India’s first satellite was launched in 1975 with the help of Russia’s Vostok launch facility. Since that time, Russia has been India’s permanent partner in space exploration. Eleven remote sensing satellites and 10 communication satellites are currently in orbit, monitored by a Russian-made tracking station. India plans another lunar mission in 2012, Chandrayaan II, consisting of an orbital spacecraft and a lunar vehicle to be produced in Russia.

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ment of thin films and industrial catalysts. In nuclear energy, Russia will supply India with four third-generation WER1200 reactors of 1170 MW. The reactors will be set up at Kudankulam inTamil Nadu,where two VVER-1000 reactors have already been installed, under an intergovernmental agreement.

How do you view future prospects for co-operation within the BRIC format?

India has the potential to be among the top global economic players as a young nation and with a vast talent pool. At the same time, we face enormous challenges of inclusive growth and reducing the urban-rural divide. I am confident we can overcome these and become a global leader. Indians, particularly the young, have the confidence level to take on the world in a variety of fields. India will play an important role as a BRIC member – both in terms of an increasing share in the global economy and in formulating global economic policy. Economic specialisation will largely be based on the need to achieve growth with ensuring employment opportunities for our people.

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Full version at www.rbth.ru

India invited to develop helicopters The Russian Helicopters company said it has invited India to participate in a number of joint projects and investment programs, including the assembly and sales of civilian helicopters.

"The Russian Helicopters holding considers the Indian market as the most prospective for joint business development. According to our estimates, the demand for civilian helicopters on the market will grow to 200 aircraft by 2020," Andrei Shibitov, the company's general director, said. The offer to India included the assembly and sales of Ansat and Ka-226T helicopters, setting up servicing centers in India, and joint development and production of new-generation helicopters. Shibitov said both Ansat and Ka-226T are light helicopters, which could be used for passenger and cargo transport, search-and-rescue, firefighting and patrol purposes.

The estimated investment in this project is about $145 mn and the return is expected in 5-7 years. RIA Novosti

India wants to buy 50 more Su-30 fighters India wants to buy another 50 Sukhoi-30MKI multi-role fighters. The 50 air-superiority fighters will come on top of the 230 already contracted from Russia in three deals worth a total of $8.5 bn. Indian Air Force (IAF) chief Marshal P V Naik said his force was indeed "interested" in acquiring more Sukhois, which will be "the mainstay of India's fighter fleet for the foreseeable future, to further enhance its combat potential."

He stressed, however, that the acquisition was not "country or adversary-specific."India previously said it was satisfied with the performance of Russian Su-30MKI fighters. RIA Novosti

Russia tests Indian fighter jets on board MiG aircraft maker successfully tested on board the Admiral Kuznetsov aircraft carrier four MiG-29 carrier-based fighter jets due to be delivered to India. "During the tests on September 28-29, the MiG29K and MiG-29KUB fighters conducted several take offs and landings on the deck of the [Admiral Kuznetsov] aircraft carrier in the Barents Sea," the company said in a statement.

The two MiG-29Ks and two MiG-29KUBs were officially transferred to India earlier this year. They were inspected by Indian technical experts and used in a five-month flight training course for the Indian pilots.

The aircrafts are expected to be delivered to India in midOctober. RIA Novosti

04

Business

Deal on wheels: now Opel knows its route

OLEG MIKHASENKO

fallen sharply – decreasing by 50-65pc for bonds and Eurobonds – making lending a more lucrative business.

In other words, the situation seems to have stabilised and there are funds available for investment. If investors decide corporate lending is a good business, given the risk/return ratio, rates will be going down.

For this to happen, companies must show they have learnt to deal with the crisis, finding customers despite falling demand.

The situation in the banking sector is further complicated by the fact that bad debts are undermining capital adequacy ratios. To raise their capital adequacy to mandatory levels, banks will either have to write off such debts or add more capital. All this could create new problems in the banking sector.

Problems will probably not reach the scale of the 1998 default. That could only happen if oil prices dropped to $20 a barrel. But with oil prices hovering at $70 a barrel and the West showing signs of economic recovery, such pessimistic scenarios are unlikely.

Among the most interesting aspects of the crisis is the change in consumer demand for financial products. Last year there were many investors willing to take risks. They were investing in equities, including in Western companies, and also in mutual funds.

Few investors opted for lower risk fixed-income securities: some players not only invested all their savings, but even borrowed to invest in equities.

Now, in a U-turn, the number of risk-loving investors has decreased.

Today demand is rising for savings products, including gold, hard currency and structured products. Clients are seeking protection against inflation and devaluation.

Strange as it may seem, the number of clients increased during the recession, with interest in investment and savings products growing.

People are beginning to appreciate the opportunities offered by equities, and the average investment of private individuals putting their money into mutual funds is around 350,000 roubles ($11,500).

MEDIA.GM.COM

PRESIDENT, BCS FINANCIAL GROUP

hit the buffers. With plenty of available funds, the benchmark RTS index is stuck at around 1,100-1,200 points.

The reason is straightforward: investors, unwilling to take risks, are trying to discern the long-term trend.

Strategic investors have adopted a wait-and-see attitude, not hurrying to choose a long-term strategy. A number of factors suggest that the global economy, and Russia in particular, has withstood the storm and is beginning to recover.

While investors have taken this into account, more specific signs are required – for example, steady GDP growth, stabilising employment, and increasing production – to support the rally.

There is enough cash to fuel growth, especially in the West, where more loans were issued, and discount rates are lower. There is no shortage of attractive investment opportunities, but the risk is still high. In Russia, economic growth is also hampered by fears of banking sector problems. Heightened risk is due to the fact that banks have not yet fully recovered from the crisis. Hit by shrinking demand, many corporate borrowers have been unable to repay their loans and have had to sell collateral to settle their debts. The level of nonperforming loans is quite high and this autumn we should see which banks can cope with the burden of bad debts and which will collapse.

As the crisis unfolded, loan rates rocketed to 20-25pc or more. Despite such high rates, in the first half of the year banks and financial companies found it much more beneficial to invest in fixedincome instruments than lend to companies. In some cases, annual yields on bonds and Eurobonds reached 30pc in foreign currency. Even bank bond yields rose to 60pc. At one point, Russian Standard’s bonds offered a yield of 100pc per annum.

In such a situation, it made more sense to invest in fixed-income securities. The paradox was that by lending to companies, banks earned less while assuming more risk.

Now bond returns have

www.sbrf.ru/en Sberbank website www.magna.com/magna/en Magna International Inc www.bcs.ru/eng BrokerCreditService (BCS) financial group

Auto industry Sberbank makes landmark deal

Financial barometer Investors are losing their appetite for risk

Russia’s stock market has

BOOKMARKS

RUSSIA INDIA REPORT IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

German and American technologies will help to modernise the Russian automobile industry

General Motors has finally agreed to sell a 55pc stake in its European Opel subsidiary to Canada’s Magna International and Russia’s Sberbank – who now face the task of invigorating the loss-making business.

IRINA SUKHOVA RIR

The saga of the sale of Opel seems to be at an end. But why were Magna and Sberbank so interested in acquiring the car manufacturer? Magna’s motives are relatively clear: the Canadian company produces auto parts and assembles cars, but it does not have its own brand.

State-owned Sberbank represents the interests of the Russian automobile industry. Its CEO, German Gref, commented on the purchase:“The whole point of our participation in the deal is technology import. If that does not materialise, it will be a waste of time.”

The Russian car industry needs these technologies desperately.

In spite of strong government support Russian car manufacturers have received over the last few years, from a technological perspective, the industry still lags far behind leading international players. The technology gap has, of course, affected performance, especially since foreign manufacturers have been allowed to build production facilities in Russia (a cluster comprising several plants is forming near St Petersburg). As a result, Russian consumers have increasingly preferred cheap but reliable foreign-made cars to domestic models designed (with rare exceptions) in Soviet times.

Recently,Avtovaz, Russia’s flag-

ship car maker and leader in the low-end price band, has lost much ground to foreign companies that assemble cars in Russia. Chinese and Korean manufacturers are now producing models that occupy the same market niche. The emerging partnership with shareholder Renault-Nissan, which was to modernise the Avtovaz production facilities, has been cut short by the crisis.

The attempt by Gaz, Russia’s second largest car manufacturer, to launch the Volga Siber (based on a Chrysler model), ended in fiasco: the company now faces a very uncertain future. IzhAvto, which assembles

‘The Russian car industry needs these technologies desperately. In spite of strong government support over the years, the industry still lags far behind the leading international players’ South Korean Kia cars, was about to be bought by Avtovaz to launch joint production with Renault, but the crisis also scuppered this deal.

Any of these plants would be happy to host Opel, and Sberbank will soon announce the lucky winner. Sberbank is the major provider to the industry: every major car manufacturer depends on Sberbank for financing. Should a manufacturer go bankrupt, it would spell trouble for Sberbank.

While victorious, the consortium will, nonetheless, face a host

of problems. Magna’s automotive partners, including Germany’s Volkswagen, question its ability to prevent a conflict of interest between Opel and its other clients. And Opel’s plants outside Germany, including the Vauxhall factory in Britain, now fear massive job cuts.

The main job cuts (according to reports leaked to the press before reorganisation plans were unveiled) will affect plants in Germany.All in all,about 11,000 jobs,almost a quarter of the total number, are to be cut in Europe.

Opel’s four plants in Germany are to shed 4,500 out of a total 25,000 jobs, writes the Russian business newspaper Vedomosti, citing the German Frankfurter Allgemeine Zeitung.Most of the cuts will be made at the plant in Bochum (its workforce will be reduced by half by 2011). Opel’s main enterprise in Russelsheim will lay off between 1,400 and 1,800 workers out of a total 15,000, while the plant in Kaiserslautern will trim 300 workers. The only Opel enterprise to remain untouched is the assembly plant in Eisenach, where production capacity from Saragosa, Spain, is to be moved.

One has to bear in mind, however, that the final job-loss figures will be published after this report is issued. Indeed, the US company had already promised Opel to the same bidder in the summer, but the transaction failed to close and the competition continued.

Nothing prevents GM from withdrawing from the deal again, especially given that Magna’s principal lobbyist,German chancellor Angela Merkel, will lose much of her zeal in November when the parliamentary election is over.

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State hopes to raise $2.3 bn in 450 sell-offs CONTINUED FROM PAGE 1

Most of the privatization money will come from selling government stakes in ports and airports, Nabiullina said, without naming them.

Nabiullina said the government dropped plans to privatize Sheremetyevo Airport, saying it would instead invite bids to manage the airport.

The government will not offer stakes in Rosneft, Sberbank, Aeroflot,VTB, Gazprom Neft or Russian Railways next year, Nabiullina said.

In offering stakes, the government will scrutinize national security consequences, especially when it comes to selling assets in strategic industries, which include oil and gas production, Putin said. Also, bidders should promise to invest in the companies that are being privatized, Putin said.

Bidders must offer a fair price to help plug the federal budget deficits that are projected for the next three years, Putin said.

“Some federal property may have to be sold, but it has to be sold only at real market prices, without any discounts,” he said.

The government annually drafts plans to sell stakes in various companies, Putin said, but the plan for next year will be special because the state has increased its corporate holdings countrywide as part of its efforts to bail out crisis-stricken enterprises. Putin ordered next year’s plan to be completed in the near future.

Putin previously raised the issue of the privatizations at an investment conference last week, saying the government would support the sell-offs.

First Deputy Prime Minister Igor Shuvalov first announced the government’s extensive privatization plans when he accompanied Medvedev on a US trip at the end of last month.

Despite the weakened economy, sales of government stakes would likely attract interest, said Nadezhda Timokhova, an analyst at the investment bank Metropol.

Southern seaports would be most sought-after because they handle grain exports, she said. Potential buyers would include the companies that own the grain or other commodities handled by the ports, she said.

The government will probably not offer to sell its stake in the strategic Novorossiisk port, she said. Airport sales would generate less enthusiasm because air passenger traffic has been contracting, she said.

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BOOKMARKS

www.rosatom.ru/en State Atomic Energy Corporation, Rosatom www.atomstroyexport.com Joint Stock Company Atomstroyexport

RUSSIA INDIA REPORT

Business

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

05

Energy Russia claims a quarter of the world’s atomic power capacity

News in brief

Welcome to the nuclear club

Power afloat leads the way

According to estimates from the International Atomic Energy Agency (IAEA), global reliance on nuclear energy will double by 2030, with the number of nuclear power plants (NPP) rising by 60 pc. As President Dmitry Medvedev put it recently, Russia could claim a quarter of the world’s “nuclear pie”.

Why are so many countries focusing on nuclear energy? The answer is simple: the world needs a cheap and reliable power source. The pressure of high oil and gas prices, coupled with the need to cut greenhouse gas emissions, have superseded fears over nuclear power. There are 10 nuclear power plants (31 power-generating units) in Russia, and they generate 16pc of the country’s total electricity supply. By 2015 there will be 40 power-generating units, providing a quarter of all electricity.

In China, NPPs produce 2.3pc of domestic output; in the US it’s 20pc, and in France, 80pc.

Over the next few years, China plans to construct about 100 plants, while the US hopes to build twice as many.

The nuclear boom has boosted uranium prices by more than 10 times over the past five years, driving the cost of one power generating unit to between $5-6bn.

With things as they are, countries with uranium reserves and nuclear technology will hold sway in the global power industry for the next two to four decades.

Russia is a member of an elite nuclear club which offers huge future benefits. First, few countries in the world know the secrets of building state-of-theart and reliable power plants.

Second, few countries possess uranium enrichment technol-

SERGEY PYATAKOV_RIA-NOVOSTI

YURI SOLOZOBOV RIR

Power units of the Voronezh Nuclear Power Plant, which celebrated its 45th anniversary this month

RIR Dossier Russian nuclear reactors successfully operate in 10 countries, and there are construction projects running in three others.

Another 17 nations, from Brazil and Egypt to Ukraine and the Czech Republic, are in talks with Rosatom on new projects.

Russia is ready to build another four power generating units for India’s Kudankulam nuclear power plant.

Rosatom also has certain interests in Turkey, Southeast Asia, North Africa and Latin America.

ogy. And finally, the countries producing fuel for nuclear power plants can be counted on the fingers of one hand.

Russian companies are ready to provide the entire cycle of production, from uranium mining to NPP construction.

Today, Russia accounts for 40pc of the world’s uranium

Safety first: the lessons of Chernobyl Russia has begun to use active and passive safety systems to make atomic power stations more reliable.

According to RM Topchan, deputy director of the Atomic Energy Project Institute, these include the use of a trap for liquefied nuclear fuel, the installation of a defence mechanism for human error and triple back-up equipment. After the terrorist events of recent years, Russian atomic power stations have

significantly increased their physical defences. As a result, and according to objective indices, Russia has a high level of security. In terms of the most important criteria, for instance, the number of unplanned automatic stoppages at a reactor in the course of 7,000 hours of operation, Russia is on the same level as Germany and Japan and significantly ahead (in terms of operational reliability) of the United States and Japan.

enrichment facilities, 17pc of the international fuel market, 28pc of NPP building capacity and 8pc of uranium mining.

So far, Russia’s uranium needs are covered from Soviet-era stockpiles of nuclear weapons, but what will happen next? To be on the safe side, Moscow has decided to secure access to foreign uranium reserves. Russia’s Rosatom Nuclear Energy State Corporation has already signed uranium contracts with South Africa and Australia. Another way is to deepen co-operation with uranium-rich nations in the first place, for example Central Asian republics and Mongolia. Neighbouring Kazakhstan has the world’s third largest reserves of uranium, after the US and South Africa.

Mongolia is next, occupying fourth place, but its prospective reserves (1.3m tonnes) could make it one of the world’s largest uranium suppliers.

Today, Russia has joint uranium mining projects with Kazakhstan, Armenia and Namibia. Following Dmitry Medvedev’s visit to Ulan Bator in the summer, Rosatom is also preparing to initiate production in Mongolia. Rosatom experts possess the world’s most advanced uranium mining technology. Fifteen foreign companies have tried to start up uranium production in Mongolia over the past 15 years, but were unable to plough the country’s virgin nuclear soil.

Russia’s exploration and production technology now allows for the development of deposits that were earlier deemed unrecoverable. With these resources, Russia’s uranium re-

serves could be multiplied“at least by a factor of three, or maybe five or even 10”,according to Rosatom chief Sergei Kiriyenko. Those countries that co-operate with Rosatom in uranium production will receive nuclear fuel supply guarantees for the next 60 years.

Russia is also ready to offer the unique services of the interna-

tional uranium enrichment centre in the Siberian city of Angarsk.

Fast neutron reactors will also be instrumental in solving the uranium fuel problem. Conventional reactors can use only 5kg from a tonne of uranium, while fast neutron reactors will be able to use up to 700kg.

“With fast reactors, our uranium reserves will last for a millennium,” estimates Nikolai Oshkanov, director of the Beloyarsk nuclear power plant.

Russia and China are currently in talks to build a new fast reactor, with a capacity of 800MW. According to estimates, Russia is 10-15 years ahead of the rest of the planet in this respect.

Russia also has something to offer in another prospective area: floating nuclear power stations, based on nuclear shipbuilding technology. The IAEA values the world market for such stations at between $300bn and $600bn. They are vital for remote regions, where power lines or organic fuel supplies are inexpedient. Such floating stations could also be used to desalinate sea water, for example, in the Persian Gulf countries or on an ocean shelf.

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India eyes Russian nuclear research India is in talks to join Russia’s Joint Institute for Nuclear Research (JINR). Located in Dubna, outside Moscow, JINR is one of the world’s leading nuclear research centres, created in the 1950s as Russia’s response to the European Organisation for Nuclear Research (CERN).

Cooperation in Science & Technology (ILTP) between Russia and India,also reported that two Indian delegations had already visited the Dubna institute.“Our Nuclear Energy Department is already in talks,”he added.

Russia’s Institute for Nuclear Research, like CERN, is an international organisation funded by membership fees from 18 “We will join the Joint Institute member states, including for Nuclear Research in Dubna,” former Soviet republics and sostated Prof. C.N.R. Rao, Chair- cialist bloc nations. The instiman of the Science Advisory tute attracts leading nuclear reCouncil to India's Prime Minis- searchers from all over the ter. world who come to work, train India got the chance to join and share experience.

JINR last year, after the Nucle- JINR Deputy Director Alexanar Suppliers Group (NSG) lift- der Ruzayev confirmed that ed a global ban on nuclear co- India was in talks to join the inoperation with India.The deci- stitute. He said the talks cursion was facilitated by India’s rently focused on associated impeccable reputation in terms membership, an arrangement of nuclear non-proliferation, allowing for membership fees despite New Delhi’s reluctance to be discussed separately. India to sign the Nuclear Non-Prolif- will take part not in all of JINR’s eration Treaty (NPT). programmes, but only in those Prof. C.N.R. Rao, who co-chairs of special interest to it. the Joint Council of the IntegratRIA Novosti ed Long Term Programme of

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The world’s first small-capacity floating nuclear power station (FNPP) will be completed in 2012 and operational in 2013.

“We will take it to Kamchatka,” said construction project head Sergei Zavyalov.“We plan to launch serial production of such power plants, which will be located in remote areas like Chukotka andYamal.”

The advantage of an FNPP is its ability to vary heat and electricity generation levels, Zavyalov added. Unlike huge reactors, an FNPP can work in a flexible mode, adapting quickly to changes in demand.The project offers the prospect of radically changing the geography of nuclear power use in the future.

Fast times ahead for atomic energy It seems the crisis has had little impact on Russia’s nuclear plans.“The government’s support for the atomic industry allows us to maintain our current nuclear power plant construction projects as planned,”Kirill Komarov, executive director of Atomenergoprom, said at the 34th meeting of the World Nuclear Association.

“We continue to work to create a new technology basis for our atomic industry, relying on fast neutron reactors, which will raise the industry to a new level,” Komorov added. The Russian government has approved the blueprint for new generation nuclear technology up to 2020, with up to 110.4bn roubles to be allocated from the federal budget to the project.

Currently, Russian nuclear reactors successfully operate in 10 countries, there are construction projects running in three others and another 17 nations have shown interest in new projects.

Nuc ties to strengthen India is ready to cooperate with Russia not only on completing the Kudankulam nuclear power plant but on the construction of a new station, Russian state nuclear corporation Rosatom spokesman said. According to him, Anil Kakodkar, the chairman of the Atomic Energy Commission of India, at his meeting with Rosatom chief Sergei Kiriyenko has confirmed India's prinicipal stance to expand cooperation with Russia in the construction of a nuclear power plant on a new site. RIA Novosti

06

BOOKMARKS

RUSSIA INDIA REPORT

Economy

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

en.wikipedia.org/wiki/Closed_city Find more information about the closed cities www.cncp.ru/eng/eng.shtml UK-Russia closed nuclear cities partnership (CNCP)

The hidden past inside the secret cities Closed cities remained a dark secret for most Russians: only now, as the government tries to reckon with their future, are we learning about them.

For decades, the people of these cities lived in a kind of prestigious internal exile: they had foreign food, special privileges and better schools. Now, some 10 years after they began their economic and social slide, many inhabitants of the beleaguered strategic military centres still want to live in exile, especially since the government started pumping in oil money – in the case of Znamensk, to the tune of $25m per annum.

In Soviet times, all sorts of tricks were used to hide the cities in plain daylight; today the “post boxes”– so called for the addresses residents used to receive mail – are in epic transition. Znamensk residents make holes in the wall for a shortcut to their dachas, but the porous borders have brought new realities well known to the rest of the country. Recently, local kids started taking their fights outside the wall: when one person died and several were wounded, officials became concerned about the holes and put doors in some of them. To obtain an entry permit, visitors must be invited by a friend or relative; foreigners and journalists, if allowed to visit, are accompanied by guards wherever they go.

The process of modernisation is still nascent.The economy of the city depends on one industry – missiles and missile testing on a moonscape of steppe

MIKHAIL GALUSTOV

CONTINUED FROM PAGE 1

Checkpoint at the entrance to the closed city of Znamensk in Russia’s southern Astrakhan region. Few foreigners have been to such cities

about 20 miles from the town centre.“The wall is not to make us close-minded, or isolated, but to provide us with a special status,”says mayorVictor Likh.

“Since Kapustin Yar is the country’s major range for testing ballistic missiles and antiaircraft systems, the government is paying 80pc of the city budget, which is now 1bn roubles – the biggest budget for a population of 33,000 in the entire Russian south.”

However, when the Soviet Union fell apart, the govern-

Global Russia business calendar

ment stopped almost entirely the financing of KapustinYar, and more than 40 other closed cities. In despair, dozens of officers’ families fled, abandoning their apartments, which fell into disrepair. Privatisation was not allowed. “Ten years ago, I could not even dream of registering a company,” says Alexander Volchkov, the owner of the biggest construction company in Znamensk. In the last four years, Volchkov’s company has built three multiple-storey build-

stakeholders to explore the region’s enormous potential and meet new investment partners.

With more than 60 speakers lined up to provide an insight into the market plus networking opportunities, this conference should be a must for anyone with an interest in the hotel investment industry in Russia and the CIS. www.russia-cisconference.com

Russia & CIS Hotel Investment Conference (RHIC) October 25-27, Corinthia Hotel, St Petersburg The foremost annual event for the region’s hotel investment community. The conference provides an opportunity for senior industry

6th Annual Russian CFO Summit October 27-30, Marriott Grand Hotel, Moscow 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 and

ings and almost completed the construction of a modern water filtering system for the city.

Mikhail Avrashuk’s property company renovates the abandoned apartments and sells them.

An association of politicians and officials regularly meets in Moscow to decide which cities will remain closed and which will eventually be opened.

There are currently 45 closed cities: it has been decided to open six of them. “With the military reform transforming

the Russian army and the market economy booming, it is inevitable that most of these cities will open up,”says Alexander Golts, an independent military analyst.Such programmes as the US Cooperative Threat Reduction Programme and the British Closed Nuclear Cities Partnership are helping Russia and the West to open some of the doors and reduce secrecy.

But it is clear that Russia will always have a few closed cities left – and Znamensk might be one of them.

from a wide range of industry sectors. www.adamsmithconferences.com

Corporate Restructuring in Russia and the CIS November 19-20, Moscow This conference, which deals with building and optimising business in the new economic environment, includes: analysing the economic situation and business climate in Russian and CIS markets; regulating holding activities – the influence of governmental bodies; exploring specific features of restructuring process management; financial planning and refinancing sources; and the legal aspects of reorganisation. www.marcusevans.com

“Under constant threat of terrorism, the world will be moving towards deeper secrecy,” Sergey Markov, a Duma deputy, says.“As long as Russia remains the target of aggression, we will need to test our rockets and keep the tests behind the wall to provide secrecy.”

Not everyone is happy in exile: most of Znamensk’s graduates prefer to leave.“We live here under a magnifying glass – every step to the left or right is noticed and discussed. My friends and I plan to move to Moscow right after graduation.

At least I will see people from other countries there,” says Olga Sibiyato, an 11th-grader at High School No 235.

A year ago, a few American and German specialists stayed in Znamensk for a month.They came to launch six small satellites from the Voskhod spacerocket complex. A few Egyptian, Brazilian and some“Arab” clients (officials prefer not to identify from which country) came last month to see the test of a new missile, the Tor-M2E. And that was basically all foreign visitors in the past year.

As the sun sinks in the sky, soldiers and officers line up for their evening march.The songs they sing,“Katyusha”and“The Soldier Is Walking in the City”, drift over the town and signal the day is coming to its end.

Aleksei Prudnikov is the commander of the anti-terror unit at Znamensk military range.

“We are rocket specialists, the elite of the Russian army,” he says.“Thousand of missiles have gone through our hands… If not us, then who is going to keep Russia safe?”

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16th International Russian Banking Forum 2009 November 30-December 3, Grange City Hotel, London The forum is the leading annual international gathering for the movers and shakers in the Russian banking sector, offering an opportunity for key decision makers to share anti-crisis and restructuring strategies, exchange ideas for the future in the new financial landscape and make important business contacts. www.adamsmithconferences.com

Find more in the Global Calendar at www.rbth.ru

BOOKMARKS

www.gorby.ru/en Gorbachev Foundation www.cdi.org/russia/johnson Johnson’ Russia List www.wto.ru Information Office on Russia’s Accession to the WTO

RUSSIA INDIA REPORT

Politics

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

Interview Soviet President Gorbachev discusses Russia’s future

The men of change

07

Opinion Playing the global game with the WTO ALEXEY PORTANSKIY

President Dmitry Medvedev recently published an article “Forward, Russia!” It echoed some of Mikhail Gorbachev’s ideas in transforming the former Soviet Union 20 years ago. RIR caught up with the man who changed the world.

“We must have freedom so people can feel confident about themselves. Let them be wrong: everyone makes mistakes. But as long as dialogue takes place, we’ll enter a new epoch.”

Joining the World Trade Or-

JUAN BARRETO_AFP

ARTEM ZAGORODNOV RIR

Mededvev’s article – published on the opposition-leaning Gazeta.ru website – brooded over “excessive government presence in many significant aspects of economic and other social activities”.He slated Russia’s economy, which “still reflects the major flaw of the Soviet system [and] largely ignores individual needs”.

Medvedev wrote“civil society is weak” and suffers from a “lack of initiative, lack of new ideas, outstanding unresolved issues, the poor quality of public debate, including criticism”.

Most importantly, in stark contrast to many among Russia’s ruling elite, he reached out to his constituents. He called on “all those who share [his] convictions to get involved… [as well as] those who do not agree with [his] ideas but sincerely desire change for the better”.

“Our people like to say, in [poet Vladimir] Mayakovsky’s words, ‘We can’t do anything. Let the leaders think’,”mused Mikhail Gorbachev. Age has taken its toll on the former leader. But his phenomenal memory and engagement with the future buries any suspicion of mental feebleness.

“Medvedev’s article was a genuine appeal to his people.That’s very important."

“He didn’t get too specific, but that wasn’t his goal. It was his calling to us to get involved in solving the problems he presented. In that, he was successful,”explained Gorbachev.

He reminisced about his own turbulent and historic years of power and transformation. He is keenly aware that, for Russians, the Gorbachev era still begs the question: at what price, reform?

“Falling oil prices were a big blow to our economy. We lost two-thirds of our foreign currency and weren’t able to provide the market with basic goods. That’s when the lines began to form.”

“It’s now official that the United States had pressured the king of Saudi Arabia into boosting oil production. It hurt.”

The long breadlines contributed to his unpopularity at home.

While some in theWest remember when censorship was lifted, Russians associate him with the

HEAD, INFORMATION OFFICE ON RUSSIA’S ACCESSION TO THE WTO

While Gorbachev may never be entirely understood at home, he is surprisingly unburdened by regret.

loss of empire.When he made a bid for the presidency in 1996, he finished with just 0.5pc of the vote.

While it is clear that Gorbachev may never be entirely understood at home he, too, is looking forward and is surprisingly unburdened by regret. “[My opponents] used the situation to destroy the Union and undermine me as president.

They were eager for Ukraine’s declaration of independence.

What Union could there be without Ukraine?”he asked.

The man who once led nuclear weapons reduction negotiations with President Reagan and accepted the Nobel Peace Prize, recently advised Barack Obama prior to the first summit with a newly elected Medvedev.

“A few years ago I was at a major university in the Midwest,”he recalled.“They pressured me into answering questions about America. I told them: ‘You’re going through a process everyone goes through'.

“In our time, we had recognised that we needed a perestroika.

Today, you need your own perestroika." Can you imagine?

Everyone in the audience, professors, students and visitors, gave me a standing ovation. I turned to my translator and said: ‘Change will come to America.’

“But Obama will have a difficult job,” he added somberly.

“He’s already facing problems, but they will only get worse.

Obama is democratic, calm, confident and has a strong character. I hope he succeeds.”

Gorbachev is dismissive of the idea of top-down changes in Russia.“I really wish that our leaders wouldn’t be afraid of

their own people,”he explained, pounding the table for emphasis.“We need people to get involved, and share ideas with policy makers.”

Gorbachev recently attracted headlines for criticising Putin’s statement that he would “sit down”with Medvedev and decide who would be president in 2012.“What about the people?

The people have to decide who will be president,”Gorbachev said.

“I think Medvedev is a very educated, thoughtful and democratic person. But he must form characteristics a leader needs.

He must learn to feel the pulse of the country’s life.”

“If we come out of this crisis, but don’t reform our economic and political structures, we’ll find ourselves at a dead end.

We’ll go in circles, but with harsher consequences each time. Medvedev was right in that we need to switch to a new model of development, one with human values at its core,” he continued.

When asked if the country needed a “new Gorbachev”, he laughed: “I'm not going anywhere! Medvedev should utilise public organisations – like our own Gorbachev Foundation – we’re always happy to provide ideas.”

Apart from his think tank, Gorbachev recently co-founded the Independent Democratic Party of Russia with his billionaire ally Alexander Lebedev. Lebe-

dev has been less than exuberant about the party’s prospects: “We’ll have to hold meaningless rallies and gather signatures in half of Russia’s regions…and then our application will be rejected because of some misspelled word.”

Medvedev, however, talks the talk of a multi-party system.“I think Medvedev is a very educated, thoughtful and democratic person. But he must form characteristics a leader needs.

He must learn to feel the pulse of the country’s life, to take hits and defend his positions,”Gorbachev added.

He was less flattering toward United Russia, the primary progovernment party:“It’s a poor copy of the CPSU (Communist Party of the Soviet Union).A recent electoral law brought changes to Russia’s political system. An overwhelming majority of those changes were exclusively favourable toward United Russia. I’d challenge you to try and pass any initiative without that party’s support. It’s not right.”

In the same vein, President Medvedev said recently,“I don’t know how much longer United Russia’s triumphant power will continue.”

He predicted that in the future, Russia will experience a political system with many parties in constant competition.“Democracy is a priority,” Gorbachev concluded.

“The president’s main message was that we need to move forward through dialogue, and for this we must have freedom so people can feel confident about themselves. Let them be wrong: everyone makes mistakes. But as long as this dialogue takes place, we’ll enter a new epoch of development.”

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ganisation is the main priority of Russia’s economic policy.

This idea took shape in the early 2000s, and Russia’s interest has not wavered.

Today, the issue is back in the spotlight; not just for Russia, but also for the WTO partners involved in accession talks.

There are two important factors: the global economic crisis, and the creation of a Customs Union involving Russia, Kazakhstan, and Belarus – who would all like to enter the world trade family simultaneously.

The economic crisis has affected politicians and people all over the world. However, not all measures in response to the global downturn have turned out to be the right ones.

At the beginning of 2009, there was a widespread belief in Russia that the country was lucky to be outside of the WTO on the grounds that, otherwise, it would have been much more difficult to introduce protectionist measures. However, the idea lost its appeal just as quickly. It appeared that many of the measures aimed at protecting the domestic market failed to produce the desired effect.

In this sense, Russia’s nonWTO status is unlikely to have helped it through the crisis.

Some economists were close to predicting the collapse of global financial and economic institutions, including the WTO. But it was the WTO which warned the G20 leaders of the danger of excessive protectionism. The conclusion was based on results from monitoring protectionist measures taken by national governments. If national governments manage to create a system of global governance – an idea which took on added importance during the crisis – the WTO is likely to play a vital role. All addresses by Russian leaders at this year’s international forums send a clear message to the world community that Russia is ready to participate in creating a global governance system.

This means that Russia has no choice but to join the WTO. Russia needs to thoroughly modernise its economy, a need that became particularly apparent with the onset of the crisis. Foreign trade revenues have dropped sharply, which

is understandable, given the substantial decline in prices for oil and gas – Russia’s key exports. Will Russia be able to diversify its exports? Put simply, it must do so, or it will come to a dead end, as President Dmitry Medvedev has repeatedly said recently.

Export diversification is just one part of the total effort to modernise the national economy: neither is possible without WTO membership.

It is possible to encourage competitive production, but finished-product markets have long been divided, differentiating them from raw-material markets: it is impossible to penetrate them without joining the WTO. In turn, modernisation paves the way to international markets for goods, services, and intellectual property, and, significantly, on an equal footing. Again, this requires WTO entry.

If Russia stays out of the WTO, Russian producers and exporters will face increasing difficulties in international markets. WTO membership will provide an opportunity to enter new markets, offering the potential for significant increases in export revenues.

Without WTO membership, Russia will also lose out from failing to participate in working out new global trade rules.

This is exactly the situation we see given Russia’s absence at the current WTO Doha round.

Moreover, if Russia fails to join the organisation before the end of the negotiations, it could face updated requirements for accession which, in turn, will lead to a new round of discussions.

Russia wants to be a predictable trade partner, relying on WTO principles and rules.

This is vital for Russia’s key trade and economic partners – in the first place, the United States and the European Union. The speedy conclusion of the Russia-WTO talks is possible. It seems that the delay, connected with the accelerated creation of the Customs Union within the Eurasian Economic Community is over, and all related legal and technical problems can be settled within reasonable time limits. Thus the conclusion of the WTO entry process largely depends on the political will of Russia’s major trading partners.

08

Russia india report

Education

bookmarks

in association with rossiyskaya gazeta, russia THE economic times wednesday_october 14_2009

w en.wikipedia.org/wiki/Education_in_Russia Education in Russia en.russia.edu.ru/edu Education for foreigners db.informika.ru/AIE Regional educational institutions

Modernisation A new Russian standardised test has sparked fierce debate

Tradition and transition tiple choice questions and doesn’t reflect such valuable qualities as creativity and ability to think out the box. According to those against the EGE, the most talented students will not benefit from the new testing system. The main objection is that EGE demands pupils to meet the requirements of empirical testing methods instead of giving them the opportunity to express proficiency in different disciplines.

Victoria Khamarito rir However, whether welcome or not, EGE was implemented in The most popular topic of dis- all schools across the country cussion is the so-called“ediny – making it impossible for high gosudarstvenny ekzamen” school students to graduate (EGE) – the Unified State without successfully passing Exam implemented upon high the exam. school graduation. The stand- On the other hand, defenders ardised test was introduced in of standardised testing say the Russia for the first time this process helps evaluate intelyear. Its structure is very simi- lectual aptitude and the quallar to that of a well-known ity of education in Russia in an American SAT. Moreover, just unbiased and consistent manlike its foreign counterpart, the ner – a much needed tool in the Russian standardised test current state of the Russian edgreatly effects students’ op- ucation system.The knowledge tions when selecting higher ed- that high school and college ofucation institutes. ficials gain from this new strucThe test’s opponents say EGE tured method of evaluation is a poor measure of high school helps them better judge high students’ academic ability. As school graduates’level of prepwith most standardised tests, aration and more fairly comit is mainly composed of mul- pare applicants.

In recent years, the Russian education system has undergone significant changes.

Most experts still can’t decide whether these are for better or worse. The main task of current reform is preserving the best elements of the old Soviet system while creating new mechanisms to address the needs and demands of the modern world.

Andrey Fursenko, Minister of Science and Education, is among the vivid supporters and initiators of unified state examination in Russia. According to Fursenko, “2009 EGE results provide a complete, valid and unfortunately sad estimate of the state of the education system in Russia.”

However, the minister is optimistic about the testing process: “Besides evaluating the quality of education on all levels, EGE helps us better identify the prospective areas of

The contemporary educational system in Russia is built on the remains of the old Soviet mechanism, which doesn’t always reflect the tendencies of the modern world.

alexander polyakov_ria novosti

Top Russian universities

Students relaxing on the lawn in front of Moscow State University.

Lomonosov Moscow State University (1755), universally recognised as Russia’s number one, enrolls about 2000 international students and postgraduates every year.

St Petersburg State University (1724) is one of the most prestigious in the country.

The State University – Higher School of Economics specialises in social sciences. It was founded as an MA training centre but soon offered Bachelor programmes in economics.

Bauman Moscow State Technical University (1830) was always known as an engineering university of educational excellence.

Kazan State Universty (1804) is routinely listed among the 5-10 best institutions of higher education in the country.

Tomsk State University (1878) is the first higher educational institution in the vast area from the Urals to the Pacific Ocean.

Ural State Technical University (1920) is the leading technical university in the Urals, with 15 faculties and over 40,000 students.

St Petersburg State Institute of Fine Mechanics is a unique University of Optics and Computing Science. It has gained worldwide recognition and inspires significant interest.

our social and economic life,” says Fursenko.“We now understand what areas are in demand among the best of our graduates, so we can forecast what fields will have highly qualified specialists in 5-10 years’ time.”

However, despite the minister’s confidence in the selected testing tool, debates around the EGE’s value continue to rage.

The Russian Ministry of Educations claims the introduction of EGE into the lives of Russian students is a part of its obligations as a member of the European Council under the Bologna convention on higher education. The exams are seen as the first step in much-needed educational reform in Russia.

However, according to some experts, the standardised tests’ “undercover mission”is to also fight corruption and the gradebuying tendency that seems to infect the Russian education system on all levels. According to a UNESCO report in June 2009,this year bribery in the Russian education system was worth about $150 mn. Some experts suggest that the tradition of bribing one’s way into a good school or university has existed in Russia “since Soviet times”.

Most teachers believe the test implementation approach chosen by education officials is not equipped to solve the problem.

“Education reform should assist the people involved in the process – teachers and pupils – not the government officials with their artificial charts and far-fetched goals,”says Elena, a maths teacher and headmis-

tress at a Moscow private school.“Cheaters will always find a way around the system.

The new testing method creates far more problems than it actually solves. Instead of helping our graduates show their knowledge and prove worthy of the selected profession, the new system handicaps their expressional ability and creates confusing results, thus leaving room for manipulation and plain computer mistakes,”she says. Just like Elena, Sergey, a history teacher, is opposed to the reform innovation, calling for a“better and clearer curriculum and new teaching methods, instead of confusing testing procedures alien to the very Russian mentality”.

The contemporary educational system in Russia is built on the remains of the old Soviet mechanism, which doesn’t always reflect the tendencies of the modern world. The main difference between the old Soviet system and the contemporary one is the approach to programme implementation at schools and universities across the country.

The old system set the same standards for all schools, implemented a uniform educational programme for each subject and concentrated on providing students with very thorough and comprehensive knowledge of a wide variety of disciplines.

The modern system’s lack of uniform programmes makes it really hard for dedicated parents to find that perfect school for their children.“In the modern world, each school decides on what and how to teach,”says Natalya, a secondary school English teacher in Moscow.

“Even though all programmes are evaluated and approved by the Ministry of Education, keeping track of all innovations and teaching mechanisms is extremely hard.”

Another innovation of the new education system is the increasing number of schools charging parents for their services. Besides the official sector of privately owned schools, a significant number of public institutions are now dependent on tuition revenues as their second major source of income after state allocations.

As they say in Russia,“time will show”– meaning the quality of education can only be judged by one’s professional success.However, the fact that a significant percentage of foreign university faculty and staff are Russian natives speaks for itself.That’s definitely a valid statement in favour of the Russian education system – both the old and developing one.

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RIR Dossier Education in Russia is compulsory until the 9th form (age 14-15) inclusive. If a pupil of secondary school wishes to go on to higher education, he must stay at school for two more years.

Every school has a core curriculum of academic subjects.

Most children attend preschool educational and development centres. In elementary school, kids become proficient readers during the 1st semester, when they begin studying a foreign language (usually English). By the end of the 2nd grade, the art of writing short essays is fully mastered. Algebra, history and geography start in the 4th grade. The 2nd foreign language of choice starts in grades 4-5.

Primary Education Curriculum: Russian language and

literature, mathematics, Russian and Soviet history, a foreign language (from grade 2), ICT (from grade 3), social science and basic concepts in geography, natural science (including general notions about man and his role in nature), an introduction to physical geography and natural history, arts, music and physical education. Schools operate on a five-day week with the academic year generally lasting from September to May or June. Students receive approximately 24 hours of weekly instruction.

For the most part, students are taught all subjects by one teacher. Formal examinations are held at the end of the fourth grade.

By high school, pupils of Russian schools are introduced to physics, chemistry, biology, technical drafting, Russian and World literature, history, geography and the basics of law. Modern technologies and some professional disciplines, such as economics and basics of finance, are also taught.

Secondary Education Curriculum: Minimum state re-

quirements mandate the following fields of study: humanities (with a special emphasis on Russian language and literature) and foreign languages, social sciences, economic and social geography, natural sciences, technology and basic general skills such as home economics, sewing, cooking,

These students, the daughters of Russian state. They receive a full secondary educa metalwork and carpentry, arts and physical education.

Secondary education is divided into two cycles: lower and up-

per secondary. Lower secondary school, or incomplete general education, is compulsory; 90 pc of students currently transition from the elementary level to the lower secondary level. From grade five, school subjects are taught by specialist teachers.

Students completing the lower secondary cycle take final examinations (the state final attestation).

CONTINUED on PAGE 9

bookmarks

Russia india report

www.skolkovo.ru The Moscow School of Management Skolkovo website eng.mon.gov.ru Ministry of education and science of the Russian Federation

Education

in association with rossiyskaya gazeta, russia THE economic times wednesday_october 14_2009

09

The Skolkovo business school campus represents a disk with four different-sized buildings located on its roof.

Skolkovo students seek connections

alexandr petrosyan

MBA students at the Skolkovo business school spend days studying real-life business cases with top executives and nights at the five-star Baltschug Kempinski hotel.

liliya zlakazova_rg

Nadia Popova The Moscow Times

army personnel, study at a special boarding school totally funded by the ation, including arts and physical education programmes.

CONTINUED from PAGE 8

Successful completion of these leads to the award of the Certificate of Incomplete Secondary Education. The certificate grants the holder access to further studies in either the secondary (complete) general education stream or the vocational stream, as well as to non-university level higher education.

Upper secondary education is divided into two basic streams: academic and vocational/technical. In the academic stream, students complete the secondary cycle after two years of study (grades 10-11) during which they receive a minimum

of 31 hours’ weekly instruction. Students are awarded the Certificate of Complete Secondary Education after successfully passing the state attestation examinations, for which students must be examined in no less than five disciplines: two compulsory examinations (composition and mathematics) and no less than three examinations in elective fields.

In higher education, the old system, based on a five-year programme, exists alongside the new structure consisting of a four-year first degree Bachelor followed by a twoyear Masters programme.

“I envy you, frankly,” said President Dmitry Medvedev, who heads the school’s advisory board, at a welcoming ceremony for the school’s first MBA class in late September.

“To tell you the truth, I didn’t believe it would be constructed that quickly,” he said as he handed out student ID cards.

The area around the school still looked dirty; construction is continuing. An employee said the school was connected to the electricity grid just two days earlier.

But the state-backed project, organised by Troika Dialog and sponsored by Sberbank and private companies, seems to be on track with its bid to attract future and current entrepreneurs who want that key combination of good Russian connections and Western-style business training.

“I am not ashamed I was involved,”Medvedev said of the creation of the school, which started its first MBA classes in January.“I believe that we will get an international rating, just as other business schools.”

Construction has been delayed and is expected to finish in spring,Troika executive director Gor Nakhapetyan said.

The students live and study in the Baltschug Kempinski, just opposite the Kremlin, he said.

This kind of service comes at a price: the 18-month MBA program costs $73,600.

But the opportunities the school is offering justify the cost – “All of you will become millionaires and head corporations in the near future,”said

Sberbank chairman German Gref.

To get there, though, they still have a way to go, said Ingemar Dierickx, a lecturer on business negotiations. “Russian businessmen-students need special treatment,” he said.

“They consider the outer environment constantly hostile, and I have to explain to them not everyone is an enemy.”

“They also express themselves very straightforwardly,”Dierickx said.“I explain to them straightforwardness is read as aggressiveness in foreign business. Some of that, however, is compensated by Russian businessmen being extremely emotional. That helps with talks.”

Foreign students at Skolkovo said the cost of tuition was worth it. “I came because I want to work in a Finnish company in Russia,”said Sebastian Schauman, 30, from Finland.

“You get useful state connections here. We will even get work experience with regional administrations.”

A third of the 40 students enrolled this year are foreigners, including from India,Brazil and Australia.“Entrance criteria are very high,”Nakhapetyan said.

“Giving connections in the Russian business and political sphere is a major goal of our programme,” he added.“The quality of students we accept is also important.”

“I came here not for an MBA,” said Sumanbek Khunkayev, 25.“I like us having real business cases, discussions where top managers from companies including MTS, TNK-BP and Credit Suisse are present.They listen to our advice and give us real-life tasks to solve.”

Such discussions are useful, said Naubar Afeyan, an incoming professor at Skolkovo and senior lecturer at Massachusetts Institute of Technology. “Many of my students don’t believe they can open their own business in this country and succeed.”

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Want to study in Russia? RIR gives you a first person account of an Indian student who studied there. Meet Hemendra Sharma, South Asia business manager for Petro IT, who travelled to Russia to pursue automobile engineering with a lot of apprehension. However, he says the experience of six enlightening years in the country has made him a better professional today. viren naidu rir

After completing 12th class, I agreed to my father’s suggestion to go to Russia. I landed in Moscow in November 1994 and pursued a Masters in automobile engineering from Moscow State Technical University, MAMI (the Moscow Automobile and Mechanics Institute).

The course for foreigners was an integrated course of 1+5 years. The first year was spent learning the Russian language along with basics of science subjects, including engineering drawing. At the time when I joined the institute, there were close to 50 foreigners in different years of their engineering courses.

In the beginning, during the earlier days of my stay in Russia, winters were too harsh, severe and long, which sometimes led to depression. But the biggest problem was my inability to speak Russian. I realised that if you want to learn any language, you should jump into the normal life of the place and, although you might have tough times, no book can teach you the level of language you learn by this method. Besides, as I am a vegetarian, food was a problem.As a student it was not possible to go out to restaurants; there were cafeterias, but most of the food either had non-vegetarian preparation or a touch of meat.

The more you mingle with locals and people around you, the more comfortable you feel. As time passed, a lot of locals became friends and once I started interacting with people, the place became like a second home to me.

The course was a combination of both theory and practical work, but the way in which we were examined was an altogether different experience and this was highly appreciated.

The process of enrolling is very simple. Higher education facilities in Russia are amazing and worth applause. Speaking about Russia as a whole, the number of higher education in-

from personal archives

konstantin zavrazhin_rg

Studying in Russia: an Indian experience

Hemendra Sharma, South Asia business manager, Petro IT. stitutes and universities is so large that there is room for several specialised courses.

Once you have shortlisted the institute of your choice, you need to contact the department for foreign students. Each institute has its own criteria, but the basics are more or less the same: there is a minimum educational qualification of higher secondary school, followed by an application which is reviewed by the in the institute. Based on the university’s judgment, one is either selected or rejected. In this whole process, it is important that one should do the homework of ascertaining the credibility of the institute where he/she wants to pursue the course. In this regard, the foreign missions of India, embassies and other Indian establishments can help you investigate.

The biggest difference to the Indian education system I experienced in Moscow was that, in India, we have targets and deadlines in each semester which are quite taxing; in Russia, this was the same but it all passed very smoothly.All efforts were made by the student, teachers and the institute to help you come out of any problem with regards to pursuing educational goals.

Throughout my stay in Moscow, I never felt the pressure of not being able to cope with myworkload. Even with the problem of language, especially in the initial year, most of us never felt frustrated and never wanted to run away as people around us and the institute were always very supportive.

Fimally, if you go there to study, keep your goals very clear and do not get distracted by the glitter and glamour of Western society in Moscow. Stay focused.

With no one around to monitor you, it is very easy for anyone at that age to lose focus.

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Films Numbers

BOOKMARKS

RUSSIA INDIA REPORT IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

eng.mosfilm.ru Mosfilm website www.indopedia.org/Cinema_of_Russia.html Find more information about Russian cinema www.centpart.com Central Partnership company

Cinema This year Russia marks the centenary of its film industry tch heroes in action Fantasy thriller Day Wa

Russian films: the biggest box office successes

$50.3 mn

Irony of Fate: Continued (2008) Sequel to the 1975 lyrical comedy – a unique Soviet film which is traditionally shown on Russian television every New Year. The continuation was shot by director Timur Bekmambetov, based on a screenplay by Alexey Slapovskiy and produced by Channel One.

$33.7 mn

Admiral (2008) Historical action movie about the life of Admiral Alexander Kolchak.

After the revolution of 1917, he becomes supreme commander of the White forces and is later executed by the Bolsheviks. The film was made thanks to cooperation between 20th Century Fox and Russian cinematographers.

$33.6 mn

Day Watch (2006) Fantasy thriller – second part of the popular Russian blockbuster ‘Night Watch’. Both films were released on limited distribution in the USA. The film was made by Timur Bekmambetov, after which the director was invited to Hollywood and started work on ‘Wanted’ with Angelina Jolie.

$27.6 mn

Best Movie Ever (2008) The first Russian comedy made as a parody of well known Russian films. The movie includes numerous cameos by Russian celebrities, some of them involving a humorous touch on their image.

$23 .0 mn

The 9th Company War drama about the last days of the Soviet forces’ deployment in Afghanistan. The film follows a band of young recruits from a farewell ceremony with friends and family up to a bloody battle on a mountaintop in Afghanistan.

BAZELEVS PRODUCTION

l a v i v e r c i t a m Signs of a cine

first completed shooting its back to its preget l Th e wil y a: str ssi du Ru sis has fam ily film in It’s true the financial cri The els in the very near on lev and sed n sis ba Ma cri The official history of the rs, Old e ste Th Ma un n ry of tio ust ok ma Bo not left the film ind and ts ov . per lam ure Ex Var fut Russian film industry es. d tal oni k t of las Sea and Le Russian fol touched. By the end ists consider that the fijoint tim the Op began on 27 August for et lin’s documentary dg all pa bu of Ko a rd the t Ily thi pu t the year, about one . If the nancial crisis has brough 1919, when the Bolshevik Defeat of the German Armies production at $5-7 mn ts in production were not only jec t pro rke ma Solm fi the an 5, ssi 197 en it is reRu government adopted a wh ll swe s Mo goe the Near Moscow. In le, film mp e plusfrozen. For exa De rsu dy to problems but also som decree on the ction vie t-Jap an ese fil m lea sed , Di sne y is rea film studio halted produ try wi ll be us o als ind ise a aw the nch – ros fra es nationalisation of film Ku te ira al 90 Uzala by Ak shoot a comple of about 25 films of a tot d dimed down and the casual an ors slim production in Soviet act g an Oscar. Russian cinessi Ole an to n Ru th ing wo wi ving being made; accord o inplayers will get out, lea Russia. This day later ma’s trophy cabinet als rectors. s for v, General Director of nie no pa Iva al com ion the nat jor – a r e ma set up am d’O ly e bec on cludes the Palm vie Research, The Bazelevs company, Mo y e pan cor r ts com Ove en . the res Day a ’s rep em rld film wo ssian om Ru the s holiday: Cin wh of ou ard fam s aw er t film highes by anoth in all about 70 of 250 , kmambethe 100 years since, business.

Be ur ges Tim prestigious film forum sta or, st s ect mo iou dir var at seen a were frozen al; in yer in Russian cinema has had The current crisis has vate the Cannes film festiv tov, is a significant pla of production. Many pri p in prices of dro ail nt kh stuica Mi evs nif by zel n its ups and downs, and sig Ba wo e s financ1958 it wa the market.Th ere investors have stopped le for sib ing studios and crew.Th today it is struggling to hir pon res n v for his film The k bee ozo e ban a lat hav g s Ko tin dio g reing films, and get tionsurvive in the midst of a has been a correspondin Cranes are Flying. films which had a revolu become unrealistic. ction has du n pro loa sfilm Ru in rs, on is. yea cti of tributed in cris du dis en rewh ct ing effe ait In the last couple aw ary es inMany films are been , Day costs. In the film servic ersian film studios have Russia – Night Watch se with virtually no adv stantially lea sub is s ply lm fi losup me y, 250 n str edy du tha s com making no les Watch, and the ARTEM MIKHAYLOV tising budgets. nhave than demand.The bignti 90 r Co ate 80e: gre ich Fat wh of of ve ny r, ha Iro yea s ma per dra RIR In 20 09 only 20 film Russia are far in e s Th set evs y. lm zel all fi t nu Ba s, an ges thi ed m DVD been screen ued.Apart fro begun shooting. Sales of operarship from overloaded. number of cinemas in e dropped by is building a close partne hav – l ns sfu ctio du ces pro suc st d mo che the comrea of lm e has fi On ssia ood Ru sin llyw te hin Ho ssia tion wit with the its However, an eight-minu more than half on the Ru Mosfilm studio – traces tures. Baimate the apthe est Pic l ts ya rsa per ova ive Ex com niz n Un 00. y Po sio 1,8 led pan evi cal tel t era. lent picture market, and er of ction history back to the Sovie are under proximate annual turnov zelevs did post-produ ies’ purchases of films volnitsa, better known dios are lopan stu n y’s tha pan film re com mo e can is Th eri ess g to (leader the film busin work for the Am the title Stenka Razin down by half. Accordin etov in the centre of Moscow mb d $1. 5 bn ed ma un cat aro Bek sd ich an pea Di, wh al d, bn and ner nte $1 ck Wa of a major Cossa Dmitry Litvinov, Ge hnical conditec d pro ka goo Be em in od. cin and wo lly and in , Ho ial CG ssia when ser directed in sidant rebellion against Ru rector of Planeta Inform ducing o account. n, so this is where a con int pro tio en now by tak is t of is v n sho ets eto ctio dg and mb du bu y) ma sis ssian the 17th centur at a time of cri po rts about erable proportion of Ru for shkov, Th e gover nm en t sup Black Lightning, a film 3 mn are least risky etition for directorVladimir Roma $1mp Co t. com sho a are on lms erhero and fi film d sup n t on erssia firs sec Ru adv ry a’s e rst ssi fi Th eve .

Ru the ers d duc m of is considere Russian pro es no Mosfilm comes in the for tha t ssian petitive basis.This involv his flying Russian car. d Russian fil m. It wa s thi s fil m tising budget for a Ru ate cre 40 ly ($1 s ent w film ble rec rou the bn of r 4.3 nt n the poi tha s g ano e les rtin “Bekmambetov’s ne rag sta ave the on d s pro marke film add Studios, which has s,since rld ces ds.

Wo suc a fun be an te to ssi sta ve of Ru ) pro of y mn y ma the rich histor $0.7-2 mn in costs. ies in Moscow, er ilit ust fac aight on ckb str cti blo a du rst fi for e the , algon du In Russia he hasn’t , on cinematography.

The situation is now gra s,” says Petersburg and Anapa ve years ago – St film fi y rn onl has ste ed it We com n ear of ny the y app ma ce cop sin and st.

In the years ly stabilising, Night earch.

Russia’s Black Sea coa se of ting a fantasy film called Oleg Ivanov of Movie Res biggest nies are slowly restar enriched the treasure hou the pa sis, cri ned the ear te spi ich De wh , g a film that rel 04) kin rea (20 e and ma is tch som ted ur h Wa hal wit Tim a had y em w allo world cin projects the ings of our Russian filmmakers can ectors ction, $16 mn. By 2008 total tak flects the characteristics masterpieces, and dir tinue makputting them into produ con , to mn es 0 d is elv an $80 ms y ed the lit eed nta exc Al, are not in Russia na tio na l me insuch as Sergei Eisenstein while cinema takings big-budget films.These lms can take values all fi ing ing ual lor ivid An acexp ind le, and on ile o mp ed wh enk exa bas TriTe exander Dovzh looking bad. For -makclude, for example, the vome more than $50 mn. people share. Only film Oscarding to the website mo drei Tarkovsky have bec the cor by m up fil set , o, ag dio to underrs stu ed yea par gpre few ato tak a are em o ice st cin wh off Ju ers rld box wo kit a classics of ieresearch.ru, re fressian wi nn ing dir ect or Ni the e won budgets in Russia we stand the ‘mysterious Ru s for films in Russia in raphy. Russian films hav is shooting ing ich t wh bu , ov, sucmn t alk 5 kh tha $3s Mi n lm fi tha Sergei ched quently less soul’ can make Oscars five times – by first quarter of 2009 rea by the Su n 2 wi th a rs.” cin em awe rnt an vie Bu n ssi ssia Ru ce, ), Ru tly Pea h mn en wit 00 and r d rec cee .

Bondarchuk’s Wa 6.1 bn rou ble s ($2 odor ther budget of about $70 mn scow goers saw director Fy Central Partnership is ano in the same period of yWalt ile pan Vladimir Menshov’s Mo wh com ood ies ser llyw lm Ho e o-fi t.

Th tw rke k’s ma s Nihu the ble rs, arc in rou Tea nd in yer Bo bn e pla 5.6 ting Does Not Believ 2008 films took had a Disney is also co-opera son by the Inhabited Island, which recently 79 mn).This gives us rea kita Mikhalkov’s Burnt ($1 and , dio 11 stu . s thi mn h $40 wit ut CONTINUED ON PAGE in’s anibudget of abo Sun,Alexander Petrov to hope the Russian film

BOOKMARKS

www.geocities.com/rusatg/dir.htm Russian movies database www.kinoeye.org/archive/country_russia.php Web resources on Russian cinema

RUSSIA INDIA REPORT

Connection Going back to Soviet times, Indian films are still popular

s s u R o t ia d In m o fr e v With lo Russia and India are linked through history, audience mentality and film industry development trends. Walt Disney International knows what it is doing when it puts plans for Russian and Indian markets side-byside in its annual report, viewing them as important investment priorities in its aggressive expansion strategy.

PAVEL BASINSKY RIR

Films

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

ia

asts oriented channel broadc ries of their unforgettable sto of Indian ion ulect sim sel ost de alm wi a ney lousy.

Indeed, Dis staff, love, friendship, and jea alisamovies.According to its taneously launched loc ubbed Inn-d ssia Ru urst fi e pop y Th gel hu th in Indian films are l tio n pro gra mm es bo men n fil m, Dh art i Ke La wo dia th g wi y on all Am eci ia. esp , lar rth”), Ru ssi a an d Ind item (“Children of the Ea e loaged 25-60, and are a top eiving other things, they featur rec 9, 194 in t ou e nda. Incam age t el’s las : nn cts cha du the pro on Stalin cal-oriented nnel the blessing of Josef ed its spired by success, the cha 0 Indian autumn Disney releas 30 me So f. sel him Indian Cin, d film uce rod ian int Ind n d eve ate im to the first an ital films made their way s auema Day. As for the dig Roadside Romeo, and thi until its colion Un t acvie Ds So DV ian nce ma rke t, Ind hered tumn the Russian audie ssia’s Ru lapse in 1991. They gat of pc an 1-2 ssi for Ru st nt fir cou 60 mn. will see the hile, huge audiences of 20, Th e legal DVD sales. Meanw ma de Di sn ey mo vie Ind ian pro du cti on s ur Fo distribuuse ho art an ssi rs.

Ru ste highBook of Ma n inmade it into the USSR’s ssian tors are also showing kee Similarity between Ru s, including lm fi ng ssi gro est Indian pics s wa iou es ser nc in die est au ter ian ), ond” and Ind hout Awaara (“The Vagab in the tures, with Cinema wit spotted by filmmakers ncer and BaDa co Dis , ease bby rel Bo to s ing lm nn fi Borders pla Soviet era: both favour oomi d. bh roo tru Ma and ’s ues Jha h val nis ily Ma mostfocusing on fam men”).

Today, Indian films are Pas(“A Nation without Wo simple human feelings.

D or televiDV on le ilab ava ly rall situaove cithe fas s at vie ng mo oki Lo ian ilysionate Ind sion.The“Domashny”fam with nated Soviet viewers

martion on the Russian film ere/ mi Pre ro Ka 9, 200 ket in in g din lea is Ka rop rok at ssing gro , ice off box of ms ter ich is ab ov e $1 22 mn , wh marabout 21 pc of the entire s on use foc y pan com ket. The Bros Ho lly wo od ’s Wa rne r Potter films, of which Harry ince Pr d loo and the Half-B sful, ces suc rly ula tic par s wa and mn $18 n tha re raising mo ess. propelling Karo’s busin ces an fin o als ny pa The com e of new Russian films. On v (“Inthem, Obitaemy Ostro ned a ear ), d” habited Islan d anwhopping $28 mn, an ov 2 ork v-M ubo Ly other, the edy, (“Love-Carrot 2”) com top a’s ssi Ru of e on e becam imfilms of the year with an . mn $18 e ssiv pre tures Buena Vista Sony Pic box comes second, reporting and mn 9 $11 of ts eip office rec

11

.8 pc. a market share of 20 Disng uti Along with distrib ces nan fi o als it ny, So and ney 9, 200 In n. tio duc local film pro $14.5 nt spe rs we vie an ssi Ru nator mn for its film Termi mn Salvation, and almost $13 st Be e Th edy com n ssia for Ru ice off x bo rd Film-2. The thi ntr al lea de r is Ru ssi a’s Ce , 20.3 mn 15 ($1 Partnership h its pc), which distributes bot t oun am Par and ts own produc ured films. Its success was ens ormby Hollywood’s Transf llen Fa the of ers: Revenge Taras a’s ssi Ru and ) mn 8 ($1 sters Bulba ($17 mn) and Hip fourth ($16.8 mn). Finally, in CIS, place is 20th century Fox an ssi Ru the which treated wn of Da e: Ag Ice to ce ien aud ) and the Dinosaurs ($44.5 mn comeure ent adv n ssia Ru the gime dy Holidays Strict Re ($17 mn).

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ill be set in Mumbai w s rie se an si us R w ne A Project

y, beundergoes plastic surger arpe ap in ian coming Ind buycontinue to be, selective rs his memove rec and e, ianc ind E 10 CONTINUED FROM PAG ing of rights and work on taxing ory.And he also faces a Armen vidual projects,”says It is capable of pro, choosing bema em dil ral of mo nt ide Dishdishyan,Vice-Pres e, who ducing a minimum of tween his Russian wif he fact Central Partnership.“T w, and sco three to six films per Mo in mourns him looks that the West more often ya, whom ye ar, co ns ide red a Ma l gir ian Ind al is loc and to Russia for new ideas good level for Russia. he meets in Mumbai. gly integratsin the rea s inc wa y y reb pan the sed in com e Th o Many Indian girls ba int ry part ing the Russian indust the for first in the country to out d trie a Russi wn by s, the world market is sho nth mo o develop the epic fantatw of Maya over enthe companies that are conia’s Ind sy genre,financing prom fro p hel th . wi ction gaged in serial produ search duction of the film Wolfsulate in Moscow.The ger a place just of lon be no is Tri the ssia m Ru fro scow’s nd Mo h hou oug thr e don s to wa ce to buy ideas but also a pla comt den Grey Dogs, investing stu al on internati sell them.” r the Inter$10 mn. It is now conove d an y nit t mu tha ies has “Apart from the countr centrating on the his net, but the final choice neighal are Russia’s immediate ide e Th de. torical war drama Brest not yet been ma also in ng, bours, our content is you a scene of the series a g be otin Fortress with govern st Sho mu ate did s can ort plays an Indian r ian demand in Europe,” rep me nt sup po rt. Ot he Russian hero of the series attractive actress of Ind ov, General The ash dry com Ku lm fi n ton An ssia Ru ing Engak major spe ce, ran pea ap com es, not , Director of the Russian ssian. received secondary rol panies include Interfest y lish and preferably Ru ia. It is the same compan team from Russian World dia.“We have alscene acdA Ind Me wd ska S cro Ka ST y on lis, pan nti opo me Le to V, find a RusST to s ia ing pe Ind inn ho to S -w go l t car RW wil ma Os S) for MumStudios (RW that shot the ready sold the original to fators. RWS travelled to Film and Red Arrow. a e by sian-speaking actress serial e early next month to shoot Slu md og Mi lli on air ting. Director cas the but of our popular family do on, to ati bai nic Hollywood giants hav mu e a. The e On cilitate com the enRussian series melodram Danny Boyle. India Tak Daddy’s Daughters to held in xander Kasatkin was sat ng Ale bei also come to Russia and o als led enis cal g the e, tin ed tur cas vid s Vis. “In in first part of the pic Production pro scetertainment channel Da isfied with the result are actively involved vIndia. According to the du, was shot in Moscow, y. As in our ry is a Hin range of production ser an ust The tire rm Pic ind Ge ny in film So e s. the ert film ia, g ssian anInd Ru makin has the ya in e w: Ma cre io, don , sh be nar l gli com wil n unand the rest ices to the En be own version of the sit big thing.All actors, eve tures Entertainment, for the ces try, bu t thi s co uld mbai and nearby villages. as were English, but n pe rso na lit ies Mu nimpressive ide st ow Mo boa kn up s, llset the one we has on wn le, kno ing mp end exa . RWS changed dep show l be no execution was Indian from the cinema and If she resumes. But there wil umental Pictures, which e model: the final choice of actress. ino sam ont the an d d ssi ite pte A Ru inv e ado GOV for uag are s DOL me na s business Indiou MARGARITA ng fam aki spe makes Russian-lang ll shwi is an Engli crew and top directors RIR dividual episodes.” iences,”Dostal noted. ak Engaud spe y films primarily for distrionl l Inwil ile wh she , a, an, ssi yan novel come from Ru the According to Dishdish The movie is based on a bution in Russia and vide lish in the film. es already the fifth dian partners will pro Russian autur is ary ia Pic al por uss ent tem “R a very con num by Mo .

CIS aloc ng oti “For Russians, India is rld sho , wo th equipment eg Ro i, cal led Th e ssian l be biggest market in the Ol Ru wil r it rst fi tho and the y, is is investing in films wi ntr du eccou dir Hin e t Th exotic t.The drarth biggest in Eutions and assistan l for Ca fou ica ck the typ ai.

Bla a for are mb and e of t Mu ile tha enc s in Sm eri t get sho exp bud series to be the first such dios’ d tors. givplot can compete with rope. The Hollywood stu ve Mosmis tic lea n l ma tai wil cer w e the Russian market. An in cre e hav lm fi We don e S. be Th l RW rket by young The shooting wil ieth betner desire to be in that ma the best Indian films.A we can assume Twent Vai cow on 5 November and ings, but our Indian par ents a mbai and two villages, productions is y inv al Mu n ead loc g geo alr s kin sur set ha ma an nth Fox ssi l, which mo ry Ru na the sio of Centu n fes end thi pro the wi y e d ver for ate is exloc is ique ng and Satara, tre of logical. But for them it t the new implantation techn made its mark by creati tle into the thriving cen gives us confidence tha ling of km of the city. For examhea 300 miportant to have the im the Ad e ly e ma rat me Th dra ele tre l ry. ica ust acc tor to ind ess wi ll go his lm oc fi s the pr ian ter g rac Ind tin oo cha the t sh lm no fi ll s the wi doe ple, one of ian right partner, who ed. bones, but his invention ral at a cost of $20 mn. t the Russians will rely on Ind smoothly,”Dostal stress y and will be cremated agains prirt from Ruspo s sup dio d only take their technolog Stu fin t rld no Wo ks with Bollyian “Western studios are tal du uss in “R Hin is p.

S ful hel eRW our col som of e y. nit giv rop backd ent – invitke a finance but also sia’s scientific commu marily interested in tal ing selected its partner by wood producers to ma undertemples and a breathtak big Indian corporaan bid , seto thing – as a minimum, ver the ies we of Ho n pan sio com ver people who can make all h ian h ing Ind full-lengt t.” r his stmountain landscape, wit standing of our marke in India. nths before tion agrees to sponso on mo uti six films.They are also intere trib ed. job dis olv the for inv l for y ls ria ua lth , the the Hindu rit ys or Based In other words, very hea t this stu die s. Fu ll of ho pe ed in ideas – screenpla ian the start of shooting.

But the problem is tha o planned are two Ind s to India, Als with nt is coming in to our flie s r me lm afi cto est al nd do n of inv loc me ng itio of om s you add rec ake the rem shot on bids and would require t for weddings, which will be But pla ne cra she s. He ducing cinema, and it means tha his Pro lud e t inc On , bu e nes Tak sce ia international potential. all al g Ind loc ns, vin ny tio ma re is in Mu mb ai, ob ser lying ry, and his face ” mo e ct, me those in this market the hav tra his es ich con los wh the gs, d son de it’s unlikely that ‘supp dition lan dances and t the iloc al cu sto ms an d tra ld begood reason to believe tha ducer Aldisfigured beyond recogn ted by the is Pro e dge tiv bu n theWest with ideas’cou ecu bee Ex d yet sai ll not wi a ry is tions. ms to anject film industry in Russi tion. The rest of the sto e come an industry – it see exander Dostal, who org Russian company.The pro ian actors will featur l s crisis too. the doctor Ind g: wil thi tin me and , in tiva rco s now cap ove ces is as re t pro jus the on. ng t ati oti ht me tha neg Eig . der lm fi un ised the shooti is the in prominently

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IOS RUSSIAN WORLD STUD

IOS RUSSIAN WORLD STUD

! n io t c A , a r e m a C , s t Ligh

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Opinion

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

www.en.rian.ru Russian news and information agency www.russiaprofile.org Russia Profile online magazine

UNTANGLING IRAN’S NUCLEAR WEB DMITRY TRENIN POLITICAL EXPERT

The recent Geneva meeting of the five permanent members of the United Nations Security Council plus Germany regarding Iran’s nuclear program did not lead to a breakthrough or a decisive showdown. It did, however, demonstrate more unity among the major powers vis-a-vis Tehran, and we witnessed the first meeting of President Barack Obama’s administration between US and Iranian diplomats.The meeting also encouraged the Iranian leadership to make somewhat conciliatory noises after a salvo of missile test launches and the revelations about a new nuclear facility near Qom.The game that Iran and the international community have been playing with each other continues, and this has to stop. It is a losing game for both sides.

Speaking after the meeting, Obama welcomed Iran’s gestures, but he also held out the prospect of“crippling sanctions”against Tehran if it does not comply with the international community’s demands. President Dmitry Medvedev, speaking before the Geneva talks, produced a jewel of diplomatic casuistry when he stated that although sanctions do not usually work, sometimes they are necessary. Many observers interpreted this as a subtle change in the Russian position to meet the United States in the new, more positive atmosphere created by the cancellation of US plans to deploy elements of a missile defense system in Poland and the Czech Republic.The issue, however, is not so much about sanctions as it is about strategy.

And the strategy is still lacking. The US-European idea of preventing Iran’s development of nuclear weapons rests on the belief that Iran will knuckle under if the Security Council members – including Russia and China – joined in a common front to demand that Iran comply with its obligations as a signatory to the Nuclear NonproliferationTreaty and observe Security Council resolutions. The Kremlin’s plan for dealing with Iran downplays sanctions and apparently assumes that the complex and controversial issue be decided on the basis of goodwill.

If this approach fails, theWest will be faced with a difficult dilemma: either to try to contain and deter Iran by nonmilitary means or resort to air strikes against Iranian nuclear targets – using the Israeli Air Force, the US Air Force or a combination of the two.

Moscow may very well be forced to join the West on a nonmilitary basis, thus admitting it had miscalculated its strategy on Iran, or face a barrage

DRAWING BY DMITRY DIVIN

of sharp criticism from the West for having de facto helped Iran defy the United States and its allies.

Any strategy needs to proceed with a few basic truths about nuclear weapons and countries that

Stopping proliferation of nuclear weapons is clearly not only a concern in the West. It directly affects Russia, which needs to take its global responsibility seriously. seek them. Nations seeking to join the“nuclear weapons club”are in a quest for security and status. In this sense, Iran is no different from India, Pakistan, China or France. Iran is interested, above all, in gaining security for the ruling regime and strengthening its status as the predominant powerhouse in the Middle East. What is also certain is that Iran, despite President Mahmoud Ahmadinejad’s inflammatory, malicious anti-Israeli rhetoric, is unlikely to use nuclear

weapons to attack the Jewish state if it gets the bomb. But the Israelis do not want to take any chances with Ahmadinejad should he wish to follow through with his promise to wipe Israel off the face of the Earth.

Another unwelcome truth is that if a nation the size of Iran – with its rich energy resources and inflated ambition and self-image – is determined to build nuclear weapons, it won’t be stopped.At best, a nuclear programme can be delayed using surgical air and missile strikes, but short of a military occupation of the country, Iran’s nuclear programme will inevitably continue.

The Russians are right about one thing: the only way to prevent Iran from obtaining nuclear weapons is to create a situation whereby Iran no longer wants them. But the United States and many of its allies are naive to think Iran would walk away from its nuclear ambitions simply because of the costs incurred by sanctions.

A successful approach would go beyond the nuclear issues and address Iran’s perceived needs and ambitions. Dealing with both is crucial. Tehran wants a non-interference policy from the United States.This should be offered in exchange

Letters to the Editor Many thanks for the suggestions Dear RIR team, As a Wednesday subscriber to the Economic Times, I happen to read the Russia & India Report supplement too. I must say, while it perfectly caters to your targeted business community, it will definitely auger well with the majority of the wider audience to include some light reading too.

Some off-the-cuff ideas: (1) on (prominent, at least) Russians living in India; (2) profile someone visiting Russia, like a model, as Delhi has lots of them, with photographs; (3) to jazz up interactivity and dynamism, ask some Russian cultural, tradition-centric questions and hand out gift vouchers to winners.

THOMMEN JOSE NEW DELHI

BRIC is the future The G20 leaders have met recently in Pittsburg.

In their closing statements, they announced that India, China and Brazil will be invited to the next G20 meeting in 2010. Western media have given little, or no, publicity to BRIC, so this official announcement will not be seen by the majority of world-observers as a clever chess move to minimise the present power and immense potential of BRIC. Play the game! Keep the BRIC active and strong. Join the G20. But establish a new global currency; expand your current trade links, especially in Africa, South America and Central Asia; and keep strengthening BRIC to challenge the current global monopolists.

that a common man, regardless of his nationality, is facing the same set of situations that others are facing all across the world. Because of the recession, my employers decreased salaries by 10 pc, but still we harbour the belief that in this difficult situation, we will be loyal to our company. And whenever the situation will improve, our company will compensate for our loyalty. This may happen or may not, but we have to trust others – that’s what our values teach us.

SAMIR CHOPRA

Regional theasures

Thanks to Aanchal Anand for her great presentation of the Trans-Siberian journey.Very vivid.

If your job means everything to you, you I’d like to see more regions presented in the fusuffer ture, especially those further away from Russia’s I was reading“Russia Inc employers speak up”, capital. in RIR, July 2009 issue and suddenly realised MARGARET KUMAR AMBRICOURT

for a certifiable commitment to stop well short of the nuclear threshold. Iran also wants to be a regional power, and it can hardly be denied an important role in the Persian Gulf and the Middle East. The future US policy in Iraq and Afghanistan, Pakistan, the Palestinian territories, Lebanon and the Gulf will be critically strengthened if the United States is able to acknowledge Iran as a prominent regional leader.

Iran should also realise there are serious costs involved if the engagement policy fails. For both political and psychological reasons, a common stand by all permanent members of the Security Council is of special importance.The present rapprochement between the United States and Russia on the issue of Iran needs to be translated into a co-ordinated approach where sanctions and opportunities become incentives pushing and pulling Iran towards a solution that is both in the interest of regional and global security and the long-term national interest of Iran itself.

To develop such a strategy and implement it will be extremely difficult.The wounds of the 444-day US Embassy hostage crisis 30 years ago still run deep, and anti-Iranian sentiment remains high in the United States. Nonetheless, Obama should not retreat from his campaign commitment to solve the Iranian problem through a bold, but calculated, outreach toTehran. Rather than tinkering with policy instruments divorced from a policy, he needs to have a broad strategy on Iran and the entire region, where the nuclear issue is just one element, albeit of paramount importance. A failure to think big and act boldly could put Obama into a position where he would have to either accept a major policy failure or make a desperate and fateful decision.

Russia, which has a long-standing relationship with Iran, should not support the West’s Iran policy if this contradicts what the Kremlin believes in. But Moscow needs to take its global responsibility as a permanent member of the Security Council seriously.

Stopping proliferation of nuclear weapons in Iran and elsewhere is clearly not only a concern in the West. It directly affects Russia as well.

Russia has always said it wanted an active part in world governance. Iran is a test case for the strength of that commitment.

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Dmitry Trenin is director of the Carnegie Moscow Centre.

First published in The Moscow Times

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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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IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

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AN EXTRA MILE FOR MEDVEDEV? DMITRY BABICH RUSSIAPROFILE.ORG

In the last few weeks, President Medvedev has made intriguing comments on the most intriguing puzzle of recent Russian politics – how far will he go in democratising society? Reassuring statements started in early September, with the publication of his letter “Russia, Forward!”, which promised a bigger role for Russia’s fledgling political parties, more openness to international scrutiny and“a modern, effective justice system”.

The vigour in these promises led observers to think he was not happy with the status quo, fuelling speculation about a rift between Medvedev and Prime Minister Putin. However, Medvedev insisted that“his”democratisation will be different from the reforms of the early Ninieties, and avoided direct criticism of Putin’s eight-year presidential tenure.This line was continued in an interview, 10 days after the letter’s publication.

In the interview, Medvedev gave an indirect clue to his understanding of democracy. Answering a question about Russia’s alleged regression on democratic reforms, Medvedev said:“I think the current political system, party system and system of putting governors in office are more democrat-

ic than what we had in the Nineties.Why? Because this system is more stable and provides better protection for the population’s interests.”

Many sociologists note that Russians tend to view their political system pragmatically.Instead of defending abstract principles of freedom and pluralism, they prefer to judge by effects on the local economy and security.If results are good,Russians reconcile themselves to authoritarianism and certain undemocratic methods. Medvedev’s praise of the current system for its pragmatic achievements reflects the prevailing attitude in the country.

Governors in Russia were elected by direct popular vote until 2004, when Putin proposed choosing them by presidential suggestion and then a secret vote in the regional legislature.The president’s special powers, such as the right to remove a governor without approval of the local legislature, were justified by the need to protect national unity in view of increasing terrorist threats.Under Medvedev, who came to power in 2008, the system was slightly modernised: gubernatorial candidates are first suggested for presidential approval by the strongest party in the local legislature.There are mixed views on these innovations.

“The situation varies between regions,”said Alexey Makarkin, deputy general director of the Cen-

problem impeding development of a multi-party system in Russia.Abused first by a handful of powerful businessmen and, later, by state interference and cumbersome registration procedures, Russia’s party political system has failed to become a tre for PoliticalTechnologies.“The new system fa- real asset to the population – something worth cilitated removal of leaders who had become an fighting or working for. impediment to development. In the Pskov region, “People lack initiative, they don’t use their own the new 34-year-old governor, Andrei Turchak, political rights,”Medvedev complained. In his letwho has led big companies since his 20s, is seen as ter, Medvedev said that, this year, the country an organisational genius.But there are other,more started“moving to the creation of a new political negative examples – it is difficult to generalise.” system”and cited simplified procedures for party However, many observers don’t see how, with this registration as an example. However, the muchmethod of appointing governors, Medvedev can touted reduction of the“membership minimum” keep his promise of making the political system from 50,000 to 45,000 has failed to produce a sense “open, flexible and internally sophisticated”. of revitalisation. Some analysts think simply giv“Sooner or later we shall return to a system of di- ing more power to the parties may lead to an oprect elections. There is simply no other way for- posite result. ward,”said Igor Bunin, general director of the “The problem is that powerful state officials may Centre for Political Technologies. use the increased role of parties to increase their Direct and fair elections are also necessary to es- own power,”commented Oleg Smolin, a member tablish a system where“parliamentary parties pe- of the opposition Communist faction in the State riodically replace each other at the wheel of power”. Duma.“Since the only way of getting to a local legThis presidential idea included the promise to cre- islature is via political parties, they may use party ate a situation where“parties and their coalitions discipline to control deputies, making them toe will form the federal and regional bodies of exec- the party line during votes.In my opinion,the main utive power (and not vice versa)”.“And not vice responsibility of a deputy is before voters, not a versa”,even in parentheses, is important: a lot of party structure. People for whom democracy is political parties are viewed as“projects”of pow- not a value may turn even such a bright idea into erful state officials, who use these“institutions of a parody.” civil society”for their own purposes.

In an interview,Medvedev touched upon the main Dmitry Babich is RIA Novosti commentator.

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SHIPS, CHIPS AND AUTOMOBILES GRAHAM STACK RUSSIAPROFILE.ORG

Recently, Germany has been opening its doors to Kremlin–linked companies looking for technologies in automotive manufacturing, shipbuilding and microchip production. But while the current German election campaign entails that any investors promising to save jobs are welcomed, this new openness could also point to an economic, European dimension to the renowned “reset” in Russian-American relations.

"It is a very good political signal,”Arkady Dvorkovich, economic adviser to Prime Minister Vladimir Putin, said on September 16, referring to the deal that will see Russia’s state-owned Sberbank and Canadian car components producer Magna take a majority stake in Opel, the European subsidiary of the bankrupt US car giant General Motors.“It means the US administration is ready for maximum economic coop-

The polls Russians want a more active government role in supporting the economy 81PC OF RUSSIANS AGREE WITH THE INCREASE IN GOVERNMENT SPENDING TO STIMULATE THE ECONOMY, SAYS A LEADING NEWS CHANNEL'S POLL. WHICH MEASURE OF ECONOMIC SUPPORT ON THE PART OF THE GOVERNMENT DO YOU APPROVE OF?

SOURCE: WWW.BBC.CO.UK

eration with us," Dvorkovich said at the Reuters Russia Investment Summit. Following bankruptcy, General Motors is now owned by the US Treasury.

According to Dvorkovich, powerful anti-Russian interest groups were out to scupper the deal, accounting for General Motors’ down-tothe-wire hesitancy over going through with it.

But President Barack Obama’s support for the Russian bid tipped the scales, Dvorkovich said.

It is very clear what the Kremlin wants from the deals. "If the import of technologies does not take place, it will mean that (the deal) was just a waste of time," Sberbank CEO German Gref told journalists.

Two other deals similar to the Opel rescue have been broached by the Russians during the summer. Both involve opaque, Kremlin-linked structures bailing out struggling German companies which, despite their losses, have technologies the Russians want.

Majorities around the world support governments playing an active role in stimulating and regulating their national economy in response to the current recession, according to a new poll across 20 countries.

Russians are among the most supportive of increased national regulation of the economy, increased government stimulus spending and support for failing industries, with eight in 10 favouring them.Along withTurkey, they are the second most critical of how the costs and benefits of the economic situation have been shared – with three in four expressing dissatisfaction.

Roughly, eight-in-10 (81pc) favour increased stimulus spending by the Russian government and a similar 78pc favour such spending when targeted toward renewable energy.

A large majority of the Russians (78pc) support government assistance for major national industries and companies in trouble, but only 44pc support the same assistance for banks in trouble.

On September 18, the media reported that Russia’s largest telecommunications holding AFK Sistema is negotiating to purchase a share in Infineon, the largest German microchip producer.

According to the Kommersant business daily, the deal currently under discussion is for Sistema to acquire 15 to 20 pc of the company for €1 bn, with the purchase funded by the Russian Bank for Development (VEB) state corporation.

In a smaller but similar deal, the former Russian energy minister, IgorYussufov, is set to acquire Germany’s bankrupt Wadan shipyards, based in Wismar and Rostock.

It is widely believed thatYussufov is acting on behalf of Russian state-linked strategic investors, including the state-owned gas giant Gazprom and the state-owned United Shipbuilding Corporation. The financially stricken Wadan shipyards possess unique ice-breaking technologies that Russia needs to retool its naval shipyards in order to build transport vessels for energy projects in the Arctic.

Do these deals mark an economic, European dimension to the so-called reset? On Friday Putin called on Obama to follow up on the cancellation of the missile shield plans by supporting Russia’s bid to join the WTO – the longest bid in the history of the organisation, with Russia being the largest economy to remain outside the WTO. The former German chancellor Gerhard Schroeder has stated openly that the United States has been blocking Russia’s WTO accession for political reasons. Obama’s position on Russia’s WTO bid might show whether the reset can develop an economic dimension.

An American reset on Russia’sWTO bid will also have knock-on effects for Russian-European ties, since the signing of a new Russian-EU partnership agreement is largely dependent on Russia’s achieving WTO membership.

Russia should maintain its nuclear arsenal, ready to face foreign threats

Most Russians do not see any need to change the volume of the country’s nuclear arsenal in the coming years: 54pc believed it should stay the same (as opposed to 60pc in 2006). Fewer people felt it necessary to increase the nuclear arsenal (14pc against 19pc) and, conversely, there was an increase in the number of respondents insisting on reduction (16pc against 11pc). Finally, 4pc favoured complete nuclear disarmament.

The majority did not feel it necessary to change the volume of the nuclear arsenal in the long term (43pc). In relation to 2006, there was a decrease in the number of supporters of its growth (from 19pc to 14pc): 18pc insisted on an increase.There was an increase in the number of people who advised against disarmament (from 3pc to 7pc).

Russians generally felt that, in the long term, the government is in control of nuclear combat readiness (52pc). 23pc of respondents thought the authorities neglect the issue. Only 6pc were sure the government gives it excessive attention.

The survey was conducted during the period of August 22-30, 2009.

VTSIOM ASKED WHETHER RUSSIANS CONSIDER IT NECESSARY TO CHANGE THE VOLUME OF THE COUNTRY’S NUCLEAR ARSENAL, AND SOUGHT VIEWS ON STRATEGIC NUCLEAR FORCES’ COMBAT READINESS. RUSSIA’S NUCLEAR ARSENAL: INCREASE OR DECREASE?

SOURCE: WWW.WCIOM.RU

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Graham Stack is a business journalist and analyst.

14

Reflections

Found in translation Paradoxal semantics of Russian suffixation IN A RECENT TRANSLATION OF WAR AND PEACE, PLATON KARATAEV, TOLSTOY’S KINDLY PEASANT, ADDRESSES HIS INTERLOCUTOR AS “LITTLE FALCON”. IT JUST DOESN’T SOUND RIGHT, REMINDING OF SOMEONE FROM FENIMORE COOPER’S THE LAST OF THE MOHICANS. REMEMBER MONTIGOMO HAWK’S CLAW?

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RUSSIA INDIA REPORT IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA THE ECONOMIC TIMES WEDNESDAY_OCTOBER 14_2009

www.pircenter.org The centre for policy studies (Russia) www.cdi.org/russia/johnson Johnson’s Russia List

DISCOVERING ZOSHCHENKO Some say there are only three Russian writers that the Western reader is familiar with: Tolstoy, Dostoevsky and Chekhov. Meanwhile, the gold reserves of Russian literature include dozens of names. We are launching a series dedicated to famous Russian authors who remain largely unknown in the West. One such author from the 20th century is Mikhail Zoshchenko.

ALEXANDER MELIKHOV RUSSIA NOW

PAVEL PALAZCHENKO RUSSIAN TRANSLATION COMPANY

The relationship between English and Russian literature – before the emergence of Tolstoy, Actually,“little falcon”is a literal translation of Dostoevsky, and Chekhov – was strictly one way the Russian word, 'sokolik', an intimacy or en- (west to east). Russia’s greatest poets, Pushkin dearment that is still used by older people. The and Lermontov, both in their youth imitated Russian language is full of such words: First, the Byron, but when the author of Fathers and Sons, Russian national character is expressive and Ivan Turgenev, told William Thackeray that the emotional, and one aspect of it is that it has so Russians had a writer just as good (Gogol), the many diminutive adjectives and nouns (hence Englishman laughed. Later, Turgenev would attempts to render them in English by the word write that“the author of Vanity Fair is himself “little”); second,the language itself offers a vari- infected with the vice he so mocks”. ety of ways to be expressive and emotional. One I fear that the name of one of the most famous of them is suffixes. Russian is sometimes called successors to the Gogolian tradition in Soviet the language of suffixes. literature, Mikhail Zoshchenko (1894-1958), is Russian suffixes express an extremely wide not too well known to the English. range of emotions and attitudes. They can pro- He wrote most of his best stories in the 1920s duce words that are caressing, diminutive, fa- when the ideals of the revolution were replaced miliar, vulgar or contemptuous. by petit bourgeois values. Zoshchenko’s stories Polish linguist, Anna Wierzbicka studied the resemble vignettes or anecdotes: short, in simway Russian suffixes work with Russian per- ple language, often paradoxical and always very sonal names. She says the meanings expressed funny. by names with suffixes are so rich and complex He peopled his“Soviet universe”with amusing they cannot be represented by simple labels such puppets, as in Gogol. These puppets lack an inas“affectionate”or“scornful”. ternal world, thus allowing Zoshchenko to make Some are ambivalent.The suffix,'ka' (as in Mash- fun of them without feeling compassion. ka) may express familiarity or “anti-respect” Although if we had seen in them beings like but it becomes diminutive and even caressing ourselves, we would have been horrified: all of in Mashenka. their energies go into struggling for at least 'Ik' (the suffix used in Karataev’s sokolik) is di- some semblance of a normal (petit bourgeois) minutive when used with masculine names.Peo- existence. But they always lose and never deple use it when they talk to small boys,who begin spair: the Soviet absurd is the natural order of to resent it in their early teenage years.

In English,suffixes are rarer,and they are less expressive. Most commonly, standard short forms such asTom or Bill are used with regard to people one knows well.Sometimes,such short forms are preferred by the person and are used officially as in Jimmy Carter rather than James Earl Carter, as Leonid Brezhnev’s letter of congratulations The sticky multipolarity was addressed to the then president-elect.

Translators of fiction face enormous problems Leonid Radzikhovsky rendering the expressive range conveyed by Russian suffixes. I’ve noticed recently that simple shortening has become widespread, at least In 1990-1991, it was clear that Russia’s superin male names. Increasingly, people prefer to be power days were over. But the idea that the viccalledVlad or Stas.We’ll see how that plays out. tor of the Cold War was now the US, was unbearable for Russia. A new idea served as a consolation: instead of a unipolar world order replacing the bipolar world, a multipolar world system emerged. In the early Nineties, many thought Russia’s interpretation of“multipolarity” was an attempt to look virtuous. But only 10 years later, unbiased people could clearly see that multipolarity is just a statement of fact.

[Look at] the US war in Iraq. Unlike inVietnam This issue has been or Korea, the US quickly secured a military vicconceptualised by tory. But not only it was not felt in the US (or INTERNATIONAL anywhere else), the victory turned out to be a MEDIA MARKETING, nightmare for America and for Bush personalRESPONSE ly. The accusation of a“colonial war”became a adqueries@timesgroup.com moral sentence, despite the fact that there was no colonial war! It is impossible in the 21st century to institute a 19th-century semi-colonial, manageable administration in Iraq. But why are Feature Co-ordinator: classic colonial war and the victory impossible?

Mehernosh Gotla Because there is something stronger than the (mehernosh.gotla@timesgroup.com) US, China or any other country…time. The use of brutal military force, which has been the norm throughout human history, is now considered to be pathology, a crime.“Colonial helmets are no longer worn”; in a multipolar world, they’re out of fashion.

things. The totalitarian world of Zoshchenko could not be further from Orwell’s world, where love rises up against the power of slogans and critical thinking encroaches on total control.

Zoshchenko’s world is devoid of slogans, love and critical thinking.

His heroes come together and part owing to primitive everyday circumstances, while the slogans in their speech come through only as parody. In this world there is no room for ideology, for it is dominated by a single total power – the power of a crust of bread and a roof over one’s head. If history plays any part – the Pushkin Jubilee, say – it affects the inhabitants of this world in only one way: they are evicted from their miraculously obtained cubbyhole, which, it turns out, the poet himself once “graced with his insufferable genius”.

Even so Zoshchenko was almost a favourite of the Soviet elite who viewed his satire in ideological terms – as a denunciation of“Philistinism”and the“birthmarks of the old world”.By the end of the war, however, Stalin saw in Zoshchenko’s fiction not only the rank-and-file“positive heroes”, but even that most human of human beings, Lenin, assumed the features of an amusing marionette. Stalin signalled a crackdown.

In 1946, Zoshchenko was labelled a vulgar and loathsome proponent of rotten non-progressive, trivial and apolitical ideas. Zoshchenko (with poet Anna Akhmatova) was expelled by special decree from literature and deprived of his “worker’s”ration card. Publishers, journals and theatres began cancelling their contracts and demanding that advances be returned.

The writer was making ends meet with translations; he sold all his things and even tried to earn money working for a shoemaker. In an effort to absolve himself, Zoshchenko wrote a letter to Stalin that is painful reading: Dear IosifVissarionovich!

I have never been an anti-Soviet person. In 1918,

I volunteered for the Red Army and spent six months fighting against the White Guard forces.

I have never been satisfied with my satirical position in literature. I have always tried to portray the positive sides of life.This wasn’t easy to do, however; it was as hard for me as it is for a comic actor to play heroic roles…

Please believe me when I say that I am not looking for any improvement in my fate. And if I am writing to you, then it is solely for the purpose of somewhat easing my pain. I was never a literary scoundrel or a base man, or a man who worked for the good of landowners and bankers. That is an error. I assure you.

But Stalin never thought Zoshchenko was working for the good of landowners and bankers. It was enough that the writer’s attitude did not coincide not only with the Communist one, but also with any other spirit:“Life in my negligible view is constructed more simply, it is offensive and not for cultivated people.” And where Byron scorns people from the height of certain ideals, in Zoshchenko’s world, the idealists are the first to be broken, turning into boors at best, and at worst, outright troglodytes.

Zoshchenko insults not so much the power of tyrants as the overall power of matter over spirit, an“anatomical dependence”.

After Stalin’s death in 1953, Zoshchenko’s situation very slightly improved. But then, in May 1954, a group of English students asked to meet him and Akhmatova.They naively asked if they agreed with the Central Committee’s inquisitional resolution against them. Akhmatova proudly said“yes”(her son was then a prisoner in the Gulag), while Zoshchenko said that he disagreed with certain things.

A new wave of persecution threw him into a deep depression which, in essence, drove him into his grave.

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Alexander Melikhov, writer and columnist

From the newspapers

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The Internet rescues Russia Igor Petrushov

President Dmitry Medvedev is giving consideration to a letter written by a futuristic writer, Maxim Kalashnikov, which was addressed to the Kremlin and published on the Internet. In it, the writer proposes to create an innovative, futuristic city that will“inspire the nation”.

The blogger was responding to the president’s article:“Russia, keep moving!”In the letter, he writes:“Friends! Let’s see how serious Medvedev is about his stated intentions.”The following day, Mr Medvedev showed the seriousness of his intentions by instructing the chief of the presidential administration to take note.“With this gesture, Medvedev was trying to say that any person in our country shall be heard,”Stanislav Belkovsky, director of the National Strategy Institute, says. However, the expert believes that Kalashnikov’s ideas won’t be realised.

Recovery in big numbers Olga Tanas

In the 12 months since the beginning of the crisis, the Russian authorities have spent 11 trillion roubles ($362bn) to save the economy. As a result, they have helped the financial system but

not prevented the collapse of the economy.

The government still has a few months until the end of the year to save it, but it is unlikely to succeed.Analysts blame the anti-crisis package.The Russian government has spent 4 trillion roubles less than planned, Reuters writes, citing the data from presidential experts, the Central Bank and the government.

The bulk of allocations were used to save the stock market and the banking system at the onset of the crisis. In September-December 2008, the Central Bank allocated 3.8 trillion roubles and the budget 2.8 trillion roubles to issue unsecured and subordinated loans, place temporarily free budget funds with banks, and purchase Russian companies’shares and bonds. Overall, the federal budget has allocated 326.7 billion roubles ($10.75bn) out of the planned 452.1bn roubles ($14.9bn) in 2009.

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www.ekaterinburg.com Learn more about history and present-day of Yekaterinburg en.wikipedia.org/wiki/Trans-Siberian_Railway Find more information about the railway

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Diary Join a trip along the Trans-Siberian railway and visit the Europe-Asia boundary city of Ekaterinburg

Discoveries on the eastern railroad Aanchal Anand’s next story in a series about her trip along the Trans-Siberian railway features the city of Yekaterinburg, situated in the Urals – considered the natural boundary between Europe and Asia – as well as Omsk and Krasnoyarsk in Siberia.

About 30 minutes fromYekaterinburg, as I got ready to leave the train, I must have crossed the Euro-Asia border.About 40 km west of Yekaterinburg, stands a 413m marker at the border andYekaterinburg sees itself as a child of the European and Asian traits of strength and wisdom.

Walking down Lenin Avenue, the cafés, restaurants, shops, museums, theatres and cultural centres kept tricking me into believing that I was in one of Moscow’s streets.

Men in sharp summer-suits and dark glasses and women in short dresses and high heels resonated Moscow’s authority and affluence.Moreover,the city was splashed with banners announcing the ‘BRIC Summit’ in Yekaterinburg that would soon host BRIC Heads of States including our own Dr. Manmohan Singh. It is no accident that Yekaterinburg is the undisputed capital of the Urals.

But despite all this,Yekaterinburg has not been able to divorce itself from its bloody past.

The city will always be best known as the place, wherein the dark hours of 17th July 1918, Tsar Nicholas II with his family was taken to the basement of their home, the Ipatiev House, and assassinated by the Bolsheviks.After the murders, the Romanov bodies were dumped into a mineshaft in Ganina Yama, in a nearby forest, where the Bolsheviks burnt them and doused the remains in acid to hide the regicide. Today, on the

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AANCHAL ANAND SPECIAL TO RIR

A statue of the last Russian tsar, Nikolai Romanov, and his family in Yekaterinburg.

Former tsar Nikolai II, his wife Aleksandra, their four daughters, a son and their faithful servants were assassinated in the Ipatiev House basement on July 16, 1918.

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.

little hill at the site of the Ipatiev House – which was destroyed in 1977 – stands the large white, golden-domed Church of the Blood dedicated to the Romanovs, who have now been canonised and elevated to the level of martyr-saints for bravely enduring 17 months of Bolshevik captivity and the brutal end they met. Ganina Yama houses a gated complex with seven beautiful old-Russian style wooden churches – each of which is dedicated to the Tsar, Tsaritsa and their five children. A duplicate of the

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m i n e s h a ft adorned by white lilies (a symbol of the House of Romanovs) serves as a prayer area.

My next stop on the Trans-Siberian Railway was also my first city in Siberia - Omsk. I had always imagined Siberia to be a giant wasteland of absolute nothingness but my guidebook assured me that there were a few things to look forward to. Luckily, this was an old edition published before the oil boom, so there was a lot more to do in Omsk!

Compared to the cities I had visited so far, Omsk was thinly spread and most of whatever one may want or need could be found on or between the parallel running Marx Avenue and Lenin Street. That’s where the city’s top two attractions are located: The Omsk State Musical Theatre at Lenin Square on Marx Avenue and the Omsk

State Drama Theatre on Lenin Street. The Musical Theatre is curiously shaped like a giant royal, which makes it the subject of both ridicule and admiration. The Drama Theatre, on the other hand, is an ornate white building with a verdigrised green chariot sitting inside its pyramidal head. Going to Omsk and not seeing a play at the Theatre is considered as outrageous as going to Haridwar and not taking a dip in the Ganga. And I was not going to sin!

As luck would have it,‘Macbeth’ – a play I have seen half a dozen times already – was playing. I sighed and bought the ticket anyway. Thanks to my limited Russian language skills, I’m afraid I didn’t understand a great deal. In spite of that, this was one of the best plays I have ever seen. Even with the limited special effects available to theatre, they made my heart jump as if I were in the middle of a

scary movie! I left Omsk a very satisfied person and 21 hours later, I arrived at my next stop – Krasnoyarsk. Little did I know, that my own life’s scary movie was about to begin…

Even before I got there, Krasnoyarsk was a special city. After all, it was the only city on the Trans-Siberian route, where through a friend I knew someone.Yana and Dasha came to pick me up at the train station and took me to my hotel, Tri Medveda, which was situated in the middle of the forest that the city is built around.“How amazing to stay in a hotel in the middle of the forest,”I remember saying to myself!

The next morning, Dasha took me around the city – or should I say, the forest. We stood at the edge of steep foothills averaging at about 400m above the sea level. Right below meandered theYenisei River, separating the city from the gigantic rock cliffs of the Stolby Nature Reserve,

located 20 km south. Of course, Krasnoyarsk is not all forest. A giant grey clock that is part of the City Hall is fondly referred to as“The Big Ben”by the locals.

Right in the vicinity is the Drama Theatre, the Philharmonic Hall, a small park and a monument to 8 Siberian Rivers.

On one side, the 3 km long Komunalnii Bridge connects the city centre to its south and on the other side on Karaulnaya Hill stands the tiny, white and cherry red Paraskeva Pyatnitsa Chapel, which features on 10 rouble banknotes.

So why did Krasnoyarsk feel like a scary movie? Because on the first day in the city, I lost my camera, which had over 500 photographs of my Trans-Siberian trip so far i.e. from Saint-Petersburg to Omsk.

And on the second day, I got lost in the forest for two very long and dark hours when I couldn’t differentiate one tree from another to find my way back. On the third day, when I was leaving, Dasha came to see me off to the station where my next train to Irkutsk had caused quite a stir on the platform. My demeanour somewhat betrayed the physical and emotional beating it had taken in Krasnoyarsk and even though I was hesitant to say it, Dasha could guess that I was itching to get away. As I boarded the train, she held my hand and said,“We believe that when something bad happens, it’s because something good is about to come your way.”

But time was about to reveal how right Dasha was because on the same train were 5 British students, who were going to make sure that I had the most memorable time in Irkutsk…

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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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www.expat.ru The virtual community for Englishspeaking expats www.russianlessons.net Free on-line Russian language course

Language Translation in advertising: Walking on eggshells ALLISON QUINN RUSSIAN TRANSLATION COMPANY

Style police Employers want to know what’s in your wardrobe

LARISA KALLIOMA ROSSIYSKAYA GAZETA

Dress codes in business, and dress necessities, have always been part of life. Think of Romans in togas, and the yellow of imperial China.

Now, however, some large Russian companies are seeking to enforce a dress code on their employees, and it is not being met with unfettered enthusiasm.What particularly niggles, apparently, is not just that some employees have to buy their own outfits – unlike bus drivers [pictured] who will get their slick new uniforms supplied – but the taste and quality of the stuff they have to wear.

“Our corporate style is more ridiculous than in a circus,”wrote a visitor to superjob.ru.“Women have to wear yellow and blue striped men’s ties, plaid schoolgirl skirts of terrible quality, and shapeless knit vests instead of jackets.”

This was the response to internet portal superjob.ru’s recently conducted poll which uncovered the unwritten rules of Russian companies’dress codes.Almost a third of respondents said that there were no official rules

covering what was worn, but plenty was implied. The strict business style for men was for a black, navy or gray pinstripe suit with a button-down shirt and sober tie. For women the colour scheme was the same.

Trouser suits are allowed, though a straight, knee-length skirt was preferred. Long hair should be tied back and makeup understated.

But what’s really got the Internet buzzing is the addendum to a memorandum on “The Outward Appearance of Employees of Gazpromneft”.

Complete with pictures, this outlines the proper length for a woman’s hair (a“schoolteacher’s bun”or short hair that must be trimmed once a month), nails (French manicures of no more than 3-5 mm, and no nail art allowed), as well as the cost and type of appropriate jewellery (no costume jewellery, no dangling earrings, no jangling bracelets or rings with large stones) and acceptable suits (nothing under $500, list of designers and stores attached).

Discussion of this subject became heated.“That sort of dress code is a form of slavery,”commented one internet chat participant.

Incidentally, some companies have an official jeans day. On Fridays, ahead of the weekend, employees can come to work in jeans and sweaters.

According to Superjob.ru, 35pc of all Russian companies still allow employees to wear what they want. Tell that to the cosmonaut when he’s got to fix the outside plumbing on his space station.

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Some companies are now insisting that their workers dress smartly and are even dictating how much must be spent on outfits

ANTON BELITSKY_PHOTOXPRESS

From the butcher in his apron to the cosmonaut in his spacesuit – and at many points in between – at work you are, it seems to many, what you wear. In reality, the butcher needs his apron to stop the blood and gore of his trade spoiling his nice, spotless jeans and white T-shirt, and the cosmonaut would be hard pressed to boldly go without his spacesuit.

OLEG PRASOLOV_RG

It’s suit or boot in the office

In early September, Mosgortrans (Moscow Urban Transportation) instituted a trial dress code. All bus, tram and trolley drivers will wear identical uniforms until the end of this year

By now, most readers are almost certainly familiar with US Secretary of State Hillary Clinton’s embarrassing gaffe with Sergei Lavrov, which saw the eager-to-impress Clinton present Foreign Affairs Minister Lavrov with a red button featuring the Russian word “peregruzka” (overcharge) instead of the desired “perezagruzka” (reset). And, of course, we’ve all heard of Khrushchev’s indignation when, having agreed to an interview on American TV, the interpreter somehow mistakenly informed Mr Khruschev that the interviewer had accused him of “baying like a hound.” Or the now-infamous blunder at a Moscow hotel, where a sign written in English informed visitors: “You are welcome to visit the cemetery where famous Russian and Soviet composers, artists, and writers are buried daily except Thursdays.” The point is that these bloopers are inevitable. In essence, the art of translation is no different from walking on eggshells. Each word carries several different meanings and cultural connotations, and their combinations almost never coincide in different languages – meaning, unfortunately, that mistakes are bound to happen, and when they do, it may be best to use the opportunity to take note of these cultural and linguistic differences.

Perhaps the one sphere in which translation bloopers can be the most costly – with perhaps the exception of politics – is advertising. Some gaffes result purely from major cultural differences, while others scream of human error or laziness. It seems that many international companies enter

the Russian market with slogans that wind up being either completely meaningless in Russian or downright untranslatable.

Yet, while some examples highlight slight cultural differences, there have been other instances that could only have resulted from laziness, or the reluctance of company executives to double check what the foreign words decorating their products actually mean.

Shoppers at a popular retail chain in London certainly suffered quite a shock when they discovered what their trendy t-shirts had written across the front in Russian: “Ochistim Rus’ ot vcyekh nyerusskikh”, or, as the shoppers soon learned, “We will cleanse Russia of all non-Russians.”

These unsuspecting English speakers had been happily sporting their fashionable new shirts with an exotic logo, all the while unwittingly propagating a right-wing ideal of ethnic cleansing. The company sure must have been grateful to the Russian shopper who pointed out such an outrageous blooper!

The benefit of such mistakes is that they force those who make them – or those most severely humiliated – to reexamine their preconceptions and perceptions of not only the foreign language that made them blush in embarrassment, but also the foreign culture they may have previously been ignorant of.

I am fairly certain that Hillary Clinton’s moment of disgrace was followed sometime later by a smile, and then the thought, “Hey, at least now I know a few words in Russian, and that is one complex language!”

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