T h i s e i g h t - p a g e p u l l - o u t i s p r o d u c e d a n d p u b l i s h e d b y R o s s i y s k a y a G a z e t a ( R u s s i a ) , w h i c h t a k e s s o l e r e s p o n s i b i l i t y f o r t h e c o n t e n t s

The Arab world in turmoil

Whisky makers in high spirits

Reality checks for hasty architects of revolution

Wee dram becomes a torrent on Russian market

P.06 P.05

Arkady Dvorkovich: view from the top

NeWs iN Brief

In thIs issue

Queen guitarist Brian May has joined with Germany’s etherial electronic music group Tangerine Dream to record two songs ded-icated to Soviet cosmonauts: one to Yuri Gagarin, the first man in space; and anoth-er to Alexei Leonov, the first man to carry out a space walk. The songs will be debuted at the Starmus science and music festival being held in Ten-erife and La Palma, Spain, in June to mark Gagarin’s flight on April 12, 1961.

The 12th Annual Nutcracker Internation-al Television Contest for Young Musicians, scheduled to take place at the beginning of November, has launched its application process. Sponsored by state-controlled TV network Russia K, the event brings togeth-er talented classical musicians under the age of 14 from around the globe to com-pete against one another. The jury includes world-renowned virtuosi such as Vladimir Spivakov and Yuri Bashmet.The winners perform before a live audi-ence with the Tchaikovsky Symphony Or-chestra in Moscow, conducted by Vladimir Fedoseyev. After the contest they also have the opportunity to continue their training with jury members after the contest.See the Nutcracker website at www.tvkul-tura.ru.

Rock stars appear for space heroes

Search begins for new musical talent

feATure

ChernobylLife in the danger zone – now and then

The number of Russia’s billionaires surged by more than 50pc over the last 12 months to reach a total of 101.A year ago there were 62 billionaires in Russia and only 32 in 2009, Vedomosti re-ports from a new Forbes Russia magazine survey.As before, the number one spot fell to Vladimir Lisin, owner of Novolipetsk Steel, who was valued at $24bn. He was followed by Severstal chairman Alexei Mordashov at $18.5bn and Onexim owner Mikhail Prokhorov at $18bn.Wealth is highly concentrated even in the top 10, who together account for around 40pc of the total net worth of the top 100.Uzbek-born mining and media mogul Al-isher Usmanov posted the greatest abso-lute wealth increase, rising from $10.5bn to $17.7bn owing to greater asset values.

Billionaire club hits 100-member mark

TurN To PAge 3

Libyan lit-mus test: russia is fol-lowing mili-tary devel-opments in North Africa closely

At a Berlin meeting of Nato foreign ministers, Russia re-iterated its stance that the western alliance’s Libya cam-paign has overstepped its UN mandate through use of ex-cessive force. It also pressed home concerns in the ongo-ing issue of missile defences in Europe. “We consider that certain ac-tions by Nato in Libya do not correspond to its mandate, and we would like to inves-tigate this,” Sergey Lavrov, the Russian foreign minister, said after Friday’s talks.Participating in the frame-work of the Russia-Nato Council, Mr Lavrov added that he had requested that the Nato leadership strictly observes the positions on Libya adopted by resolution 1973 of the UN Security Council. Russia saw the Nato action

Play by the rules, says Lavrovrussia-Nato Berlin talks address Libya action and missile wrangles

as a real-life litmus test of that organisation’s new stra-tegic conception and its read-iness not to overstep its au-thority as defined by the UN, Mr Lavrov told ministers from Nato’s 28 member states and leaders of allied nations. Russia, which has power to veto UN resolutions, ab-stained from last month’s vote that authorised the air-strikes by Nato.As the alliance sought in Ber-lin to find extra aircraft for the campaign against Colo-nel Gaddafi’s loyalists, Mr Lavrov stressed that “using excessive military force will lead to additional casualties among civilians”. However, he went on, “Russia does not in-tend to act as watchdog when it comes to respecting Secu-rity Council resolutions on Libya.”The Russian delegation ex-pressed satisfaction that the first report by Nato General Secretary Anders Fogh Ras-mussen on the implementa-tion of Libya-related resolu-tions had been delivered to the UN Security Council. Regarding the planned de-velopment of a European an-ti-ballistic missile defence

As Nato members met to rally forces in the Libya operations, russia kept up pressure on the alliance to adhere to its uN mandate. old concerns about missile defences were close behind.

YevgeNY shesTAkovspeciaL To Russia now

executive decision: BP’s robert Dudley told shareholders the company would not offer ‘large sums’ to AAr

A last-minute reprieve grant-ed by the Stockholm Arbitra-tion Court to BP in its strug-gle to push through a $16bn share swap with Russia’s Ros-neft state oil corporation has dramatically fired up the saga of the year’s biggest oil deal. With last Thursday’s exten-sion – to May 16 – of the dead-line to resolve the dispute with Russian partners in the TNK-BP joint oil venture, the pres-sure is on to find a solution. Those partners, a consortium of Alfa, Access and the Ren-ova Group (AAR), successful-ly argued that the share swap breaches the TNK-BP share-holder agreement. And with AAR effectively now having these giants over an oil bar-rel, Rosneft president Eduard Khudainatov had little more to say after the deadline ex-tension, other than that he was “hopeful of a quick resolution to the arguments”.BP is now trying to buy back AAR’s share in TNK-BP, and, according to insiders, the sums floated are astronomical. “Together with Rosneft we made a fair offer,” BP’s CEO Robert Dudley said at the company’s annual general meeting in London last week. Sources close to BP say that the sum offered for 50pc of TNK-BP was $27bn. Sources close to AAR called this offer – in terms of both price and assets – “not serious”, and raised the stakes. At first the private Russian owners were ready to sell their share to BP for $30bn, then for $35bn; now they are talking about $40bn

oLgA seNiNA speciaL To Rn

As BP and rosneft cling to hopes of saving their planned alliance, can a one-month extension to the deal end the stalemate with AAr?

BP-rosneft: oil on the rocksMergers & Acquisitions Russian shareholders ebullient in struggle against $16bn share swap

CoNTiNueD oN PAge 7

down Rosneft’s doors to swap shares,” said Valery Nesterov, an analyst at Troika-Dialog.The BP-Rosneft alliance was to be effected in two stages. By April 14, the companies were due to have finalised the share swap of 9.53pc of Ros-neft and 5pc of BP. The sec-ond stage envisages the joint exploration of three areas on Russia’s Arctic shelf. Cue AAR, which, fronted by such formidable figures as Alfa Group’s tycoon chairman

Mikhail Fridman, successful-ly blocked the way. While being a likely source of boardroom palpitations, the share swap saga debunks a widespread notion about doing big business in Russia. The history of the planned al-liance vividly illustrates that the influence of administra-tive resources in private busi-ness in Russia is greatly ex-aggerated.Neither the presence of Prime Minister Vladimir

Putin at the signing of the co-operation agreement, nor the support of President Dmitry Medvedev and the chairmanship (until recent-ly) of the “all-powerful” dep-uty prime minister Igor Sechin on the Rosneft board could save the deal from the claims of the Russian share-holders. In February, the London High Court imposed an injunction on the deal, and in April the London-based Stockholm court ex-tended the ban. The optimal solution to the conflict was allowed to slip away, say observers. “At the very beginning of the confron-tation, there was hope that the sides would settle out of court,” said Mr Nesterov. “TNK-BP’s Russian share-holders would receive some form of compensation — money or assets — in ex-change for withdrawing their objections to the deal.” AAR has long wanted to enter foreign markets, but the var-iants proposed by BP (includ-ing Arctic exploration) did not suit the consortium. TNK-BP can now either buy back the Russian partners’ package in TNK-BP – for money or shares – or sell theirs. Theoretically BP could find $40bn: at the end of last year it had $18.5bn on its accounts, while Ros-neft had $4.1bn, said Boris Denisov, an analyst at the Bank of Moscow. But it now has to sell assets to pay com-pensation for last year’s oil spill in the Mexican Gulf. Shareholders are unlikely to appreciate such sacrific-es. “We are not planning to offer large sums or signifi-cant stock participation [to AAR in BP],” Mr Dudley said in an attempt to calm BP’s British shareholders.

Meanwhile, there are signs that Rosneft is keeping its op-tions open in the quest to form a strategic alliance, and real-ise its ambition of becoming one of the world’s top five oil and gas concerns. Speaking on condition of anonymity, sources close to the Rosneft board of directors said anoth-er foreign company might be found to replace BP. But if an-yone is keen to explore Arc-tic oil deposits as BP aims to do, “They are not banging

– some reports say $70bn – though on the Russian stock exchange the whole of TNK-BP is worth only 1.3 trillion roubles ($46.4bn). Officials at Rosneft are incensed by the demands, which they slammed as “market speculation”.Analysts say BP stands to lose the most if the issue is not re-solved: Russia accounts for a quarter of the company’s re-serves, so it must remain there to avoid being swallowed by global competitors.

Tuesday, April 19, 2011Distributed with

shield, a major sticking point in relations with Nato, Mr Lavrov underscored Mos-cow’s basic position: all par-ticipants in the project must agree on criteria guarantee-ing that the system will not be directed against any of them. Russia also wants guarantees that Nato’s mili-tary planning will not threat-en its interests.The meeting in Berlin also failed to allay Russian ap-prehensions about Nato

plans to adopt a “stage-by-stage adaptive approach” in developing a European shield. In the opinion of Rus-sian military experts, the an-ticipated appearance of mis-sile interceptors near Russia’s borders within 8 to 10 years under current plans would create potential risks for its intercontinental missiles. It remains unclear to what extent the alliance and the US are willing to involve non-Nato members like Rus-sia in work on the system. After the Nato-Russia Coun-cil meeting in Berlin, Mr La-vrov said talks about the pos-sibility of Russia joining the European system of missile defence are being conducted not only with the alliance, but also in Washington. The ministers in Berlin af-firmed renewed efforts to fight terrorism. Actively being promoted is a joint Russia-Nato programme to develop remote identification of ex-plosives carried by suicide bombers. For Afghanistan, the sides agreed to create a special helicopter fund to help raise the qualifications of Afghan personnel who service flight equipment.

From several hundred Rus-sians – exotic birds inhabit-ing these lands in the Seven-ties – to several hundred thousand at the start of the new century, this is the speed at which the UK is being “Russified”. It’s no coincidence that Lon-don has earned the nickname “Londongrad”: as the famous British translator of Chekhov, Professor Donald Rayfield, noted humorously, it has be-come impossible to speak Rus-sian peacefully on the Lon-don Underground, as a native Russian speaker will undoubt-edly be found in the same car-riage. Russians are everywhere, dis-guised as boutique salespeo-ple, doctors, waitresses, estate agents, schoolteachers and university professors: Pyotr Reznikov has held a depart-ment chair for many years at

Migrants Russians in Britain

forget the famous Cold War warning, “the russians are coming”: they’re already here – and making a big impact on British society.

Eton College. Let’s not, how-ever, get into window dress-ing. There are also stains spilled by our countrymen on the starched tablecloth of their new British homeland. There have been scandals in-volving disgraced oligarchs, the gloomy “poisonous” years of the Litvinenko polonium scare, and rumours about the dirty billions held by the filthy-rich Russians who have settled in Albion.So why have all these peo-ple come to Britain? What good have they brought to British society? In what way

Destination: ‘Londongrad’

oLgA DMiTrievA AND YADvigA YuferovA Russia now

Big hand: roman Abramovi-ch is a familiar face in Britain

The presidential aide talks eco-nomic strategyP.04

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02 MOST READPolitics & Society RUSSIA NOW WWW.RBTH.RUSECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA DISTRIBUTED WITH THE DAILY TELEGRAPH TUESDAY_APRIL 19_2011

Khodorkovsky: from oil tycoon to imprisoned musehttp://rbth.ru/12632

When entrepreneur Yana Yakovleva resisted police extortion attempts, she went to jail for seven months on principal. Now free again, she is a champion of business against corruption.

In 2006, Yana Yakovleva was an ambitious co-owner of chemical company Sofex. By all accounts a savvy execu-tive, she was still shocked when a special police drugs unit came to her offices look-ing for kickbacks.Young and principled, Ms Ya-kovleva refused to pay up – a noble stance that got her ar-rested and thrown in jail. Be-fore she knew it, she was teaching exercise classes to down-and-out women in a female detention centre. “Some government officials consider businesspeople in Russia to be criminals in the � rst place,” she says. “They can approach anyone, open a criminal case and begin extorting money. And the entrepreneur should un-derstand that they will have to � ght the bureaucratic ma-chine to the death.”Now 39, Ms Yakovleva spent seven months in jail awaiting trial. The Moscow native lan-guished behind bars, she says, because she refused to take part in the scheme concocted by drug enforcement police.Life in the detention facility was no picnic for someone with no previous “form”: “There was no shower, no re-frigerator; we kept groceries on the windowsill and boiled water with a metal heating element that we also used for a TV antenna. The approach Enough’s enough, say entrepreneurs after two decades of arbitrary harassment from corrupt officials

VLADIMIR RUVINSKYRUSSIA NOW

INTERVIEW MIKHAIL FEDOTOV

What sort of document are you going to send to the president?It should be a massive pro-gramme for creating the right conditions for development of a civil society and human rights safeguards. The meas-ures should help create the outlook required for the coun-try’s modernisation – which is impossible without the modernisation of public con-sciousness, social relations and behaviour patterns.The [pre-1991] totalitarian state produced certain types of behaviour re� ecting peo-ple’s dependence on govern-ment. Can a person with such a mindset become a modern-iser? Of course not, because he assumes that his fate is de-cided by the boss and is not in his own hands. The Soviet system collapsed 20 years ago, but these stereotypes did not go away.

What recommendations will you make?It is important for people to have access to genuine jus-tice; to know the truth about what is happening around them; and to feel themselves as free. An awareness of jus-tice, truth and freedom is es-sential, because sometimes a person simply does not un-derstand that he is free, has no sense of this and is unable to escape from the labyrinth of unwritten taboos.

How quickly do you hope to be able to eradicate the stere-otypes that have taken shape over centuries?Actually, the Bolsheviks man-aged to do it very quickly. Be-haviour stereotypes in tsarist Russia were very different

The Kremlin’s Human Rights Council is due to submit a point-by-point programme for building civil society to President Dmitry Medvedev.

People power, not herd mentality, is key to civil reforms

VYACHESLAV KOZLOVMOSCOVSKYE NOVOSTI

It looks like a Moscow evening from inside the TGI Friday’s restaurant on Push-kin Square, even though it is daytime. There are plenty of windows, yet something stops the sun from coming in.The building’s facade is sheathed in an advertise-ment for a Sochi ski resort, covering most of the early 20th-century Constructivist building on two sides. Just across the street, another building is shrouded on two sides with an advertisement for Chanel. Huge neon ads top buildings around the historic square.Twenty years ago, a sign on top of a building was a So-viet exhortation to work harder. But Moscow has taken advertising to such extremes that even business executives say the city has descended into “visual chaos”. Moscow is drowning in its advertising – legal and illegal – on roofs, on pave-ments, straddling streets, down high-rises, � uttering, � ashing, pumping neon, day and night.

Taking on the eyesoreTo applause from preserva-tionists, the new city gov-ernment, which took over after long-term mayor Yuri Luzhkov was � red last year, has vowed a 20pc reduction in the amount of outdoor ads in Moscow by 2013. “His-torical buildings should rule, and not ad constructions in

Cityscape Moscow’s advertising boom is swamping the capital with hoardings and banners

Two decades ago, the only big signs on buildings were Communist slogans. Now, even advertising executives question the visual chaos.

the central postcard area, with its panoramic views,” says Konstantin Mikhailov, an advocate with the archi-tectural preservation group Archnadzor. “It is all down to a desire to get the most money out of every square foot in the city.”Pushkin Square could be Moscow’s equivalent of New York’s Times Square or Lon-don’s Piccadilly Circus. But ads are so ubiquitous that travelling through the cen-tre feels like going from one Times Square to another. The senses are bombarded by huge video screens and banners over streets, creat-ing an ad tunnel for the traf-� c beneath. “Advertisements have conquered civilisation,” local novelist Arina Kholina

them, has created the visual chaos that we see now,” he concludes. A crackdown on illegal ads would immediate-ly cut the scourge by the tar-get 20pc, he claims. The previous official in charge of supervising outdoor advertising was arrested and charged with corruption. His case is ongoing, but he has been replaced under new mayor Sergei Sobyanin, whose plans are welcomed by one market expert. “The first step has already been taken around the Kremlin and the Novodevichy Cem-etery,” says Andrei Beryozkin, head of Espar-Analitik, which analyses outdoor ad-vertising.But it is an ongoing battle. As of last summer, even the paved ground underfoot has become an advertising can-vas, as companies started to use graffiti-style tactics to saturate thoroughfares. Leg-islation has even been pro-posed in the State Duma to impose large � nes to stop the pavement ads. “The problem is not just the ads,” Mr Mikhailov says. “It’s the fact that the city does not have a concept for how the city should look.”There is an official city art-ist, an official architect and committees ostensibly re-sponsible for city planning, but there is no visual plan for development, he said.“I would just like to see the city that I live in,” added Ms Kholina, noting that the change in the city is most ap-parent when a Muscovite gives typical directions. “Turn left after Toyota, there you will see L’Oreal, and after Pepsi turn right… for the house where Sony is.”

Turn left at L’Oreal, right at Toyota, straight on at Intel…

What would Ivan the Terrible have made of this sight by his treasured St Basil’s Cathedral?

GALINA MASTEROVARUSSIA NOW

protested in a Russian liter-ary journal, comparing the bannered promotions to “knickers drying on a bal-cony”. Many of the ads are illegal. In January, the city removed 33 of the “pirate” ads, but the lack of concrete action against those who put them up has fuelled more suspi-

cion of city corruption. Maxim Tkachev, the head of News Outdoor, a leading player on the market, says he and others have the “feeling that the city is not interest-ed in transparency and order” in outdoor advertising. “The � agrant breaking of federal law and Moscow rules, and the selective application of

£236mThe value of Rus-sia’s outdoor adver-tising in 2010 – up 18pc from 2009.

20pcof the eyesores in Moscow could be removed if laws on advertising were en-forced, say experts.

33 The small number of illegal adverts removed in Moscow in a half-hearted clampdown by au-thorities in January.

THE NUMBERS

ONLINEPOLITICS & SOCIETYPROTECTING RUSSIA’S ORPHANS

The Russian government is finally getting serious about the problem of adoptions by foreign citizens. A major mile-stone will be the scheduled signing in May of a bilateral agreement between Russia and the United States. But

monitoring international adoptions is only part of the solution to the problems of orphans: changing the system within Russia is also essential.

Read more atwww.rbth.ru/12692

Read full version atwww.rbth.ru/12667

of leaving Russia herself, Yana Yakovleva stuck to her guns and created Business Solidar-ity, an organisation that sup-ports entrepreneurs against illegal actions of the author-ities and law enforcement agencies. Recently, she was also ap-pointed to chair an anti-cor-ruption centre pledged to as-sist entrepreneurs in the � ght against bureaucratic raids. The centre has begun work-ing with Delovaya Rossiya (Business Russia), the lead-ing public association of non-oil and gas companies. “This is a union of two forc-es – the authorities and busi-ness,” said Boris Titov, who co-chairs the body.

Theft of a companyOne of the � rst cases the cen-tre took on involved Galina and Yevgeny Konovalov, hus-band and wife entrepreneurs from the southern city of Krasnodar, whose company was wrested from them by local officials. “In 2008, we learned that the company’s owner had been mysterious-ly replaced. When we went to court, my husband was ar-rested on fabricated charges,” Ms Konovalova says. Lawyers said the case was hopeless, but this year the couple won two major victo-ries: in February, one court ruled that there had been sev-eral breaches in the case against Yevgeny, while anoth-er returned the company to the Konovalovs. The case against Yevgeny, however, has not been closed, and compa-ny property was sold during the court proceedings. “This is a typical case of raiding, and we are trying to help them recover their property,” Ms Yakovleva says.Delovaya Rossiya believes corruption has now reached epidemic proportions, with some 70,000 enterprises across Russia being targeted by similar raider attacks. “Up

to 10pc of a business’s expenses go to-

wards meeting the

corrupt requests of officials,” Mr Titov says. These assessments might be questionable were it not for seemingly corroborating statements from the top about the extent of corruption, which, in Mr Medvedev’s words, “is not weakening and has the entire economy by the throat”.Meanwhile, Yana Yakovleva says it is the criminal law that is currently the main chan-nel for seizing businesses. “It used to be arbitration courts, but the quality and independ-ence of the judges increased there,” she said.

Enforcing new legislationFurther amendments to the criminal procedure code took effect last month, softening penalties for economic crimes which used to provide ideal leverage for corrupt officials. State duma deputy Alexei Nazarov, deputy chairman of the parliamentary Legislation Committee, says the Supreme Court needs to regulate law-enforcement practices in the court system in particular: “The amendments create the prerequisites for improving the investment climate, but more work is needed.” In response to his recent in-quiry, the Interior Ministry said the number of criminal cases opened on economic charges dropped by 35pc in 2010. The Kremlin is now pre-paring the third phase of criminal legislation liberali-sation: it is expected that the majority of economic crimes will be made punishable by a � ne instead of prison. But few of these measures may work without efforts from below to connect laws and the reality of doing business.These days, Yana Yakovleva maintains a diverse set of con-� dants – from oil executives to Lyudmila Alexeyeva, a So-viet-era dissident who heads civil rights organisation the Moscow Helsinki Group. “I see my calling in using my own experience to try to help people and change the situ-ation,” says Ms Yakovleva. “Before my arrest I didn’t think that business should have societal obligations. But it shouldn’t keep silent – rath-er work to improve its own environment.”

from those that prevailed in the first 20 years of Soviet rule. Now we have to restruc-ture public awareness just as drastically, while offering it totally different moral con-tent, methods and goals. We should not herd people into the kind of democratic, social, law-governed state that our constitution de-scribes. We should instil in them self-discipline, self-or-ganisation, a readiness to act rather than sit around idly.

Are you sure that Russian socie-ty seeks such independence?Sponging is still strong in so-ciety. All around you can hear, “Give us money; give us hous-es.” We want to see a change of motivation and, conse-quently, in the nature of the demands. What is needed is freedom of initiative, resources for inde-pendent rendering of social services and responsibility for the quality and scope of such services. It is important to en-courage people to come for-ward and assume manage-ment in the running of society, and only ask from the state what they cannot ob-tain by themselves.

Private business rises against the Goliaths of graft

Legislation Entrepreneurs lead the fight against institutionalised corruption

Mikhail Fedotov: looking for Russia’s missing motivation

to prisoners has not changed since the Thirties.” Her case drew the attention of human rights activists in and outside of Russia, as well as that of President Dmitry Mevedev. According to Ms Yakovleva, the police had tried to extort from her on the basis that the industrial solvent her com-pany manufactured could be considered a controlled sub-stance. The charges were dropped when a court removed that particular regulation. She � led a complaint, but the po-lice denied any wrongdoing.

Fighting backFive years later, Ms Yakovle-va is probably the most prom-inent business activist work-ing against corruption. Displaying a drive that comes of having been on the receiv-ing end, she co-operates with start-up businesses and also works with the Russian government. There are tens of thousands of people in pretrial detention charged with white-collar crimes, activists say,

but official statistics are patchy. Few are acquitted, though.It is not only foreign inves-tors who worry about rogue police and officials demand-ing bribes, arresting CEOs without cause, and taking over businesses. Recent re-search conducted by the Rus-sian government revealed that 17pc of Russian businessmen intend to emigrate because of such fears, while 50pc would not rule out such a move. If it occurred, such an exodus would undermine the presi-dent’s plans to modernise Russia. Mr Medvedev has repeatedly said that business must be supported – to boost the econ-omy, break dependency on raw materials, create new jobs and pay off the budget de� -cit.Instead

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Originally published in Moscovskye Novosti

Slide Show atwww.rbth.ru

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Russians are calling for No More Trashhttp://rbth.ru/12668 Chernobyl

VERONIKA DORMANRUSSIA NOW

Twenty-five years on, Ukraine is still grappling with the consequences of the 1986 Chernobyl nuclear disaster, while tourists come to ponder a topical tragedy.

To enter the 30-kilometre ra-dius exclusion zone around Ukraine’s decommissioned Chernobyl nuclear power plant and the No 4 Reactor that exploded on the night of April 26, 1986, visitors must pass through a checkpoint and show previously obtained permits. They must also sign a form assuming all respon-sibility for the risks involved before the site visit begins. Handheld dosimeter detec-tors begin to wail and display radiation levels far above the norm as you near the wrecked reactor, which is now encased

in a giant sarcophagus made of concrete and steel. But the guides from the Chernobylin-terinform government agen-cy, which manages and con-trols the zone, reassure the group. “The radiation dose re-ceived from a day spent here is lower than from a dental X-ray,” explains Yuri Tatarchuk. He has worked on the site since 1998, and ac-companies journalists and people in search of extreme tourism experiences.Yet while its safe enough to visit the zone, the hazard is more insidious. The area is a picture of natural growth in the springtime, and therein lies the problem – here and much further a� eld. Beyond the exclusion zone, which was cleared immediately after the accident, lie hundreds of square miles of inhabited land where the soil absorbed the

toxic debris that spread from the damaged reactor. In the intervening years, the locals have been exposed through their food: mushrooms, ber-ries and milk from cows graz-ing freely are all sources of radiation. “Seventy to 95pc of radiation exposure today is internal, compared to � ve to 30pc external,” notes Valery Kashparov, director of the Ukrainian Institute of Agri-cultural Radiology. “We don’t have an officially recognised diagnosis, but chil-dren in the contaminated zones have weakened immune systems, often showing growth de� ciencies,” says Olga Vas-silenko, a doctor at Les En-fants de Tchernobyl, Kiev’s French medical centre.This is worrying for Ivan Nevmerzhitski, a doctor at the Lipniki hospital in the Zhi-tomir region. “Cases of stom-

Alexander Antonov sits chain-smoking at the kitch-en table in a worn jacket and jeans. He’s had 25 years to re� ect on his experience, but the retired journalist still struggles to � nd the words. “After Chernobyl, I know what it must have been like in a war,” he � nally begins. In his youth, Mr Antonov had been stationed as a Red Army soldier for almost three years in East Germany. Little did he expect to be conscripted again – at the age of 40. Immediately after the Cher-nobyl reactor explosion on 26 April 1986, young recruits were sent to the disaster zone to begin crude clean-up ef-forts. Mr Antonov heard from people who were there how that went. In one instance, teenage soldiers were sent up to the roof of the undamaged reactor where the radiation was strongest. “They ran up like they were possessed, picked up say a chair leg with a shovel, threw it off the top and then ran back down, all in about 40 seconds,” he says.Ample time to receive a le-thal dose of radiation.

“As it became clear that they were all doomed to die, they called in 40-year-old reserv-ists. Their logic was some-thing to the effect that they already had children and had nothing else to live for.” And the journalist was one of them. One evening in Jan-uary 1987, two military per-sonnel came to his door, checked his passport and or-dered him to appear at armed forces headquarters the next morning. Mr Antonov knew immediately what this meant and that there was no avoid-ing it. A few days later, he was riding in a truck through the “Red Forest” – woodland near the power plant that had been exposed to such high levels of radiation that

the trees turned red and died. “The villages were all desert-ed, and the birds’ nests were empty,” he recalls.

Spared by chanceThe soldiers lived in a tent in the 30-kilometre exclusion zone around the reactor. Al-though Mr Antonov was there as a truck driver, to bring soldiers to the area daily, those in charge decid-ed they needed someone who could use a typewriter to type up reports – and he was cho-sen. “That probably saved my life,” he says.Mr Antonov was there for 50 days and drove three times to the reactor, taking him past cooling ponds that had frozen over: “I could not be-lieve my eyes when I saw an ice � sherman out there.” The majority of the soldiers did not wear protective masks, even though many of the objects lying around were heavily contaminated. Mr Antonov was not as exposed to the radiation as many oth-ers ,thanks to his typing duty. But to this day his skin red-dens severely when exposed to the sun, the result of his time as a so-called “liquida-tor”, doctors tell him.One scene in particular re-mains seared into his mem-ory: the sight of a young sol-dier from Turkmenistan who sat beside him in a hospital

in Kiev: “He looked ghastly, his eyeballs were literally hanging out of their sock-ets.”The soldier, who was also a truck driver, had got out to change a tyre that blew in the middle of the Red Forest – where they were under strict instructions never to stop. “Many died there,” Mr Antonov says quietly, light-ing another cigarette.

Badge and a fruit basket The only way they could cope with the horrors of the work was, he says, with vodka. Peo-ple have generally avoided the subject of Chernobyl and what he went through. Not even his fellow journalists at Pravda would speak to him about it, perhaps afraid of what they’d hear, he says. For his services as a liquida-tor, Mr Antonov received a monetary bonus that allowed him buy a car, a rare privi-lege in Soviet times. But he ditched it after the 1991 So-viet collapse because it was a reminder of something he wanted to forget. In 2006, on the 20th anniver-sary of the disaster, the So-viet Union caught up with him one last time: “The state presented me with a liqui-dator badge, a basket of fruit and vegetables, biscuits and chocolate – just like in the ‘good old days’.”

Through the hell of the Red Forest: a liquidator remembers

Horrors of Chernobyl still haunt Alexander Antonov

Alexander Antonov was pressed into action in the Chernobyl clean-up. Unlike some of his comrades, he survived to tell the tale.

ANASTASIA GOROKHOVARUSSIA NOW

Which energy for the future?

POLLS

PEOPLE IN 130 RUSSIAN TOWNS WERE ASKED TO CHOOSE THEIR ALTERNATIVE TO OIL AND GAS...

... AND DECIDE THE IMMEDIATE FUTURE OF THE NUCLEAR POWER INDUSTRY IN RUSSIA

ach and lung cancer have risen these last 25 years, and bronchitis now takes weeks to cure because people have no more immunity,” he ex-plains. “In my opinion, this is directly tied to radiation ex-posure through food.”Products sold in supermar-kets are strictly monitored, but not those sold illegally by the side of the road by rural residents. And neither is the food eaten daily by villagers. According to studies carried out by Greenpeace, in regions such as Rivnenska (located 150 miles north-west of the plant), it is possible to � nd concentrations of the radio-active isotope caesium-137 in milk up to 16 times the ac-ceptable limit. And 73pc of pastureland is still contami-nated. It’s a chilling thought for vis-itors from other parts of the

world who come here to pay homage to the victims and heroes of those dark days, a re� ection underscored by the current events at Japan’s tsu-nami-ravaged nuclear power plant at Fukushima.

Fresh controversyClose to the reactor, steel rods jut towards the sky. This is the construction site for the new sarcophagus that will eventually cover the current structure, which has fallen into disrepair. The project, which since 2007 has been headed by the French consor-tium Novarka, is a controver-sial one. Tens of millions of euros have already been swal-lowed up by a construction venture that has yet to begin, even as the current model ap-proaches the end of its 25-30 year lifespan. “The main objective of the

Graffiti art reminiscent of Ed-vard Munch’s The Scream adorns a wall in Pripyat, near the shrouded fourth reactor

Active nuclear power plants in Russia

The invisible menace goes to ground

new shelter was to allow the dismantling of the old sar-cophagus and the extraction of the nuclear fuel,” explains Nikolai Karpan, who worked as the plant’s chief engineer from 1969, was a member of the huge team of “liquidators” of the consequences of the ac-cident until 1989, and cur-rently heads the assessment programme of the Chernobyl National Party. “But this goal was completely overlooked; the current project is an empty shell that doesn’t plan for a dismantling process any more than it enables protec-tion for the people who will work inside. “The chief danger is internal exposure from the inhaled ra-dioactive dust,” says Mr Kar-pan, adding that, 25 years after the catastrophe, the in-ternal absorption of these ra-dioactive particles is an on-

going threat for the plant’s employees, as well as the thousands of people still liv-ing in contaminated areas.

Tourist magnetWhile still some way off a package-holiday favourite, Chernobyl is now a destina-tion on the “extreme tourism” circuit. For several years, op-erators in Kiev have offered excursions into the zone, for around £140-£215. The serv-ice is frugal: a bus takes groups to the checkpoint, where they’re handed over to Chernobylinterinform. “I decided to make the trip [into the exclusion zone] to immerse myself in the nucle-ar problem; to spend a few hours thinking about it,” says Ronan, an American lawyer who is in Kiev on business.On one recent trip, however, there were no agency people

on board, nor was anyone given any information before-hand – as evidenced by the ballet pumps worn by a young Canadian, who was obvious-ly unaware she’d be walking around the radioactive ruins of Pripyat, the nearby ghost town littered with broken steel, concrete and glass. The excursion was quick and with a minimum of explana-tion, accompanied by the con-stant background din of the dosimeters carried by most visitors. The noise is largely super� uous, however, because the landscape speaks for it-self: the dilapidated high-ris-es and streets of Pripyat, which have stood empty since its evacuation a day after the accident; the deserted villag-es; and the hillocks marked with yellow triangles, where particularly contaminated homes were buried.

A catalogue of disaster

THE PLANTThe Chernobyl Nuclear Power Plant is located in Ukraine near the city of Pripyat, 19 miles north-west of Chernobyl and 68 miles north of Kiev. The first reactor was built in 1977 and the fourth in 1983.

THE CATASTROPHEAt 1:23am on the morning of April 26, 1986, a 20-second shutdown – part of a planned systems test – was followed by a sharp power surge in the fourth reactor that triggered a series of explosions and a fire.

THE CONSEQUENCESReactor four was destroyed, releasing more than 500 haz-ardous radionuclides into the atmosphere – 190 tons of radi-oactive material altogether. It took almost two weeks to extinguish the resultant fire. The accident exposed people living in Chernobyl to radiation levels 90 times greater than those generated by the atom-ic bomb dropped on Hiroshi-

ma. The worst fallout covered a radius of about 20 miles, but more than 60,000 square miles of Ukraine, Belarus and Russia were also affected.

THE VICTIMSThirty-one people were killed on the spot, while 600,000 “liquidator” workers involved in the clean-up received high doses of radiation. After-effects of the accident are thought to have caused or contributed to the deaths of almost 18,000 people, including children, over the following two decades. The exact number of casualties has yet to be calculated.

Legacy A quarter of a century after the world’s worst nuclear accident, life goes on around Ukraine’s Chernobyl site

THE FUTUREWork is underway on a new 340-foot arch-shaped sarcoph-agus for the fourth reactor block. Funded by 28 interna-tional donors, the Shelter fa-cility replaces the one built in 1986. It is due to be completed in 2015, and will have a service life of 100 years. The last operational reactor at the plant was shut down in December 2000. According to the dismantlement schedule, the remaining nuclear fuel will be removed by 2013, and the reactors between 2045 to 2065.

SOURCE: RIA NOVOSTI

“ Russia is doing the right thing in planning to build 32 new reac-

tors by 2020. Russia is not Saudi Arabia, and it must stop being a mere supplier of raw resources. Oil and gas reserves won’t last for ever; at some point Russia will have nothing to export. Therefore, it must develop and export atomic en-ergy if it wants to retain its role as a global energy supplier.”

“ Instead of renovating and modernising [inef-ficient conventional

power plants], the state prefers to invest in nuclear plants, which in such numbers [as planned by 2020] are unnecessary. Also un-necessary is Russia’s complete and immediate withdrawal from nuclear energy. It is rich in coal, gas and uranium, which means that alternatives like renewable energies, constitute no real stra-tegic path and, moreover, are far too cost-intensive.”

THE GREAT ENERGY DEBATE

Nikolai Ponomarev-StepnoiMEMBER OF THE RUSSIAN ACADEMY OF

SCIENCE; FORMER DEPUTY DIRECTOR OF

THE KURCHATOV INSTITUTE

Bulat Nigmatullin ENERGY EXPERT, FORMER DIRECTOR FOR

NUCLEAR POWER PLANT SAFETY, AND

DEPUTY MINISTER FOR ATOMIC ENERGY

Three Mile Island; Chernobyl; Fukushima: what do these dis-asters have in common? And can nuclear energy be cured of its problems? Independent ex-perts in nuclear surveillance and nuclear safety, from 10 different countries, offer their opinions.

ONLINE

Read full text atwww.rbth.ru/12680 SOURCE: LEVADA CENTRE

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04 most readRussia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_april 19_2011

US-Russia move forward with “commercial reset”http://rbth.ru/12661economy

business in brief

Following a recently signed $370m deal with the Unit-ed States to supply 21 Rus-sian-made helicopters to Afghanistan, state-control-led Russian Helicopters has decided to launch a $500m initial public offering on the Moscow and London stock exchanges.The company was formed last year from 11 regional helicopter manufacturers in an effort to streamline pro-duction and development. It produces a broad range of helicopters that serve as the backbone of both Rus-sia’s military aviation and the oil and gas industries. One of its models, the Mi-26, is one of the largest hel-icopters in service in the world, weighing around 50 tons.With the Russian armed forces due to replace around 1,000 Mil-family helicop-ters in the next decade, Rus-sian Helicopters anticipates a high demand for the IPO. The company plans to use the money to pay off debts and purchase smaller man-ufacturers, chief executive Dmitry Petrov said in a statement.

helicopter firm to float on stock exchange

Moscow this year jumped up a spot in the global prop-erty company Knight Frank’s Global Cities Sur-vey to 21st place. The survey measures the importance of cities to wealthy individuals from around the globe. It com-pares cities by economic ac-tivity (Moscow took 16th place), political power (31st), quality of life (19th) and knowledge and influence (21st).New York, London and Paris topped the survey, while seven of the top 10 spots went to cities in Western Europe, or North Ameri-ca.However, the fortunes of de-veloping countries (and the so-called Brics: Brazil, Rus-sia, India and China) in the rating are expected to rise over the decade, with Mos-cow predicted to take 10th place by 2020.

moscow climbs a notch on the top cities list

The Federation Council, the upper chamber of Russia’s parliament, has passed amended legislation grant-ing the right to teach with-out additional permission to foreigners who enter the country on assorted regu-lar travel visas. “Foreign citizens invited to Russia for business or hu-manitarian purposes, or to work here, may be involved in teaching at scientific or-ganisations and state-ac-credited universities, with the exception of profession-al religious education insti-tutions,” the Itar-Tass news agency quoted from the rul-ing. Foreigners complying with the new norms will not be required to obtain spe-cial work permits. The move accompanies a softening of migration leg-islation and is aimed at peo-ple “who want to live in Russia, respect Russia and seek additional opportuni-ties”, said Vladimir Pligin, co-author of the bill and chairman of a parliamen-tary committee on consti-tutional legislation.

new law grants teaching rights to foreigners

Prepared by ben aris (business new europe)

at all levels and comes back to the state’s involvement in the economy. If we can re-duce this, then the potential for corruption will also fall. Corruption is connected to the preferential treatment that state-owned companies receive.

the share swap deal between bp and russian oil major rosneft ran aground when the swedish arbitration board froze it amid a dispute over bp’s sharehold-er agreement with its russian joint-venture partner in tnk-bp. will the government lean on this partner, the aar consorti-um, to resolve the matter? Clearly this deal began with a legal risk, and everyone knew before the deal was done [that there was an issue with the shareholder’s agree-ment]. But we hope the par-ties will find a compromise and the partnership will not be entirely broken.

the government just signed off on a round of big investment deals with many of the world’s

leading automotive producers who have agreed to significant-ly boost production. is russia ready to compete head to head in the global car market, assum-ing russia joins the wto and import tariffs are lowered? We hope to attract new in-vestment to Russia and this is not just assembling [cars]. I am not sure that this can be achieved just by raising tariffs, because it is about in-creasing the quality of the investment climate. We are not quite ready to compete head to head with international producers, but the WTO includes a seven-year transition period and that is enough to be ready. Big companies like [Lada maker] Avtovaz and GAZ are still not competitive, so we need these seven years. We also need good strategic in-vestors.

with over $600bn in hard cur-rency reserves going into the crisis, it seemed the govern-ment thought it could bail out the whole economy. however,

russia was badly mauled. as the crisis recedes, what will be the biggest effects? If this had been a local cri-sis we would have had enough money to deal with it, but it was a global crisis, and we couldn’t deal with that. The conclusion is that we need to change the struc-ture of the economy and not repeat the same mistakes. But look at the results of the crisis: there was no run on banks, no major bankrupt-cies. Some people bought dollars, but in a few days they sold them again and the de-mand for the rouble went up. There is trust in the banking sector and the rouble that we didn’t have before. One of the main problems we face is that people don’t re-alise we are already compet-ing globally. But now, after the crisis, people are start-ing to understand this. They realise that we can’t rely on our own market.

interviewARkAdy dvoRkovich

risks and returns: the rocky road to economic health With Wto membeRShiP beckoning, RUSSiA iS SteAdily geARing

UP to meet inteRnAtionAl economic comPetitoRS heAd on

Arkady Dvorkovich is one of the faces of Russia’s liberal reform programme and, as an aide to President Dmitry Medvedev, is in a position to make a difference. Here, he discusses the econ-omy, the crisis and how cor-ruption has impacted Rus-sia’s progress.

a year ago there was a string of opinion pieces calling for the ‘r’ to be removed from the acro-nym bric. certainly russia is the least loved of the four emerging market powerhouses. do you think that is fair? China and India are a lot big-ger than Russia and that is important to investors. They have a total of 2.5 billion peo-ple compared to Russia’s 142 million. Russia is better com-pared to Brazil, where the size of the population and the technological level are similar. But the expectations for Russia are much higher [than for Brazil], as we are treated like a European coun-try and we need to reach the same level of comfort for for-eign investors. So, yes, that is fair: we are a European country and we should have the same stand-ards.

there is a lot of talk about re-forms, but why are they going so slowly? The reform drive has slowed as there is a lack of focus. This is such a big system that, if people know there is a po-

litical focus on an issue they follow up on it, but if not then they go back to doing the same things they did before the reform. We have made progress in cutting red tape and there are less licenses than before, but there is not enough focus. The problem is made more difficult as we have to try and combine federal initiatives with an active regional ad-ministration participation if we are to improve the invest-ment climate. There are some regions that are already very active and have been very successful –

Kaluga [home to one of Rus-sia’s main car production clusters] and [the autono-mous region of] Tatarstan are good examples of active and progressive regions. A huge responsibility rests on the governors and may-ors of regions. We need to in-troduce best practice across Russia, but we cannot im-pose this top down. We could do more to make this work, but we are not like [such progressive former So-viet republics as] Georgia or Estonia – both those coun-

tries are smaller than most Russian regions.

one of the main complaints of foreign investors is that the rus-sian state plays too big a role in the economy. what is being done to reduce its share? We have already agreed to sell off state-owned stakes, but it is a question of tim-ing. However, it is clear that eventually we don’t need state participation in most sectors. [State-owned retail banking giant] Sberbank is a special case, and we need to be careful as it has a big social component. Gazprom, too, and [the state-owned rail monopoly, the federal power grid company and the oil pipeline monopoly] are also all special cases – but every-thing else, like VTB Bank, does not need state partici-pation. Still, the market will only bear so much and we can’t sell all these things at once. However, the president has already ordered an increase in the pace of privatisation. The National Banking Coun-cil board just agreed to sell 7.58pc of Sberbank over the next three-year period. We are preparing this now, and waiting for the best time. It will happen in 2011 or 2012, depending on market condi-tions, but the decision has al-ready been made to do it.

maybe the biggest complaint about russia is the high level of

corruption. has any progress been made in the anti-corrup-tion drive? The anti-corruption drive works and the trend [towards improvement] is there. There has been a positive change, but it will not be finished in a year. Bribes are going up, but that is partly because people who take bribes can see it is not going to last too long. They want to catch the “last train”.But this is a systemic issue. This is not just a bunch of criminals: corruption exists

The global car market just turned a major corner. Rac-ing to beat a February dead-line to sign off on new in-vestment agreements (exempting them from new tightened limits on imports), a flock of big international names took a long-term leap into Russia. These moves will leave the country in pole po-sition as top European car-maker by the end of the dec-ade, experts say.As of this month, the gov-ernment imposed a hike in duties for any producer that did not pledge to increase ve-hicle production to 300,000 units, and increase the pro-portion of domestic made in-puts to 60pc by 2020. The in-vestment race was prompted by changes to the tax code that came into effect on March 1. Under the new rules, carmakers may import components with 0.3pc duty in return for investment agreements to build those 300,000 cars locally per year. Previously, auto companies could avoid punitive tax rates on parts by producing 25,000 cars in-country, so some moved to build assembly lines in Russia with little fur-ther commitment.

cars Foreign firms invest heavily as tax window shuts

propelled by a recent string of major investment deals, russia’s car market is on track to emerge as europe’s largest by 2020.

A batch of deals signed last month saw global brands teaming up with domestic producers to boost produc-tion. Of the eight internation-al manufacturers already working in Russia, six sub-mitted proposals, and the new investment agreements are expected to be signed by June, according to Alexan-der Rakhmanov, director of the automotive and agricul-tural machinery department at the Ministry of Industry and Trade, which oversaw the process. Those who took the plunge include Ford Motor Co, with an assembly and distribution venture with OAO Sollers, while Volkswagen AG and

OAO GAZ agreed to produce VW brand and Skoda cars at a Russian factory. Gener-al Motors and Toyota an-nounced investments of over $1bn to boost local produc-tion, and Fiat also pledged to hit the magic number of 300,000 locally produced cars. “We didn’t expect such a strong response from the producers,” said Mr Ra-khmanov. “So now we are sure that Russia will be the number one car producer in Europe in the next years.”The outlook is good. Boston Consulting Group predicts that the Russian auto mar-ket will overtake Germany to become the biggest mar-ket in Europe – and the

world’s sixth largest – in the next nine years. “Internation-al carmakers are pretty ex-cited, because they forecast significant growth in car sales in the next decade,” said Mikhail Ganelin, transport analyst at Troika Dialog. “We expect that car sales will re-cover to pre-crisis levels by 2013.” The Russian consumer should also benefit. “Russia is a very big market, and that is why foreign companies are flock-ing in. More competition will mean lower prices for con-sumers, and thus more sales,” said Alexander Kazbegi, transport analyst at Renais-sance Capital.Russia is currently under-in-vested, with approximately £890 (€1,000) per capita of foreign direct investment in 2010 – compared to between four and eight times as much for the Central European states. Yet the government’s investment strategy for the automotive sector has proved to be a winner. The new agreements are de-signed to follow on from the existing ones, which expire in 2020. Meanwhile, the Kremlin is hurrying to com-plete the reform of a sector that employs well over a mil-lion people. If Russia does accede to the WTO this year, after a 16-year effort to join, it will face a mandatory re-duction on import duties for cars.The investment policy for the automotive sector dovetails with Kremlin goals of mod-ernising and diversifying the economy, and it is expected to become an investment node for building out indus-try, while serving as a blue-print for other sectors. “For every one job that we create in the automotive in-dustry, we create another 16 jobs in ancillary sectors,” Mr Rakhmanov said, adding that the Russian market is still far from saturation point.

Pole position beckons as big car firms motor in

with extra foreign muscle, russia’s car market is revving up

clare nuttall business new europe

As fossil-fuel demand and prices surge due to recent events in North Africa and Japan, Russia is moving to strengthen its export opera-tions with construction of new facilities to produce liq-uefied natural gas (LNG). Transported by special freez-er ships, LNG in large quan-tities frees both producer and purchaser from the tangled politics involved in building permanent pipelines. Russia already has one LNG plant on the Far Eastern island of Sakhalin that sells much of its output to Japan. In March, the Kremlin announced plans for a similar processing plant on Russia’s western coast. Building an LNG plant on the Yamal Peninsula, which taps into the vast reserves of western Siberia, is an alter-native to supplying natural gas to Europe via pipelines. But it also underpins pros-pects for Russia’s contentious South Stream pipeline project to southern Europe by broadening supply op-tions, according to Energy Minister Sergei Shmatko. “Russia does not face a bot-tleneck in its obligations under the South Stream project, but has several al-ternatives,” Mr Shmatko told Prime Minister Vladimir Putin in a recent report.Uniting Russia's semi-state

energy pipeline troubles strengthen the case for LnG

gas giant Gazprom with Ger-many’s BASF and Eni of Italy, South Stream would pipe Siberian gas to south-ern Europe. But the project is ranged against the rival Nabucco pipeline promoted by the European Union which, if built, would skirt Russian territory and link Europe directly to the gas re-serves of the Caucasus and Central Asia. Recent revolu-tions in North Africa have bolstered South Stream by jeopardising supplies for Nabucco, but both pipelines have been embroiled in geo-political wrangling by coun-tries along their routes. The planned LNG process-ing plant in Yamal would break the deadlock, as liq-uefied gas can be shipped to anywhere that has a port and facilities to offload it. Over-all, exports of LNG from Yamal, Sakhalin and the Shtokman gas field in the Barents Sea should move up

to 85 billion cubic metres of gas annually to Europe and Asia, Mr Shmatko said last November. Mr Putin also ordered the en-ergy minister to study the possibility of building an LNG plant on the Black Sea coast, close to Russia’s main oil export ports and the planned undersea route of the South Stream pipeline, which will come ashore in Bulgaria or Romania. Gas is coming back into focus after oil prices rose rapidly due to the North African po-litical turmoil, plus the im-pact of Japan’s recent earth-quake and tsunami tragedy and ensuing nuclear accident. VTB Capital estimates that, with the disruption of oil supplies to Europe caused by the Libyan conflict, Russian gas exports could this year grow by 10-15 billion cubic metres , or 7-10pc o f Gazprom’s total exports.Prices on European gas spot markets also spiked after Ja-pan’s earthquake. “We believe the increase in the spot price reflects the market’s antici-pation that LNG demand will be significantly more than previously expected, as Japan strives to make up for the loss of nuclear power generation capacity,’ said VTB analyst Lev Snykov. Meanwhile, leading private gas producer Novatek spent $526m (£321m) on a 25.1pc option on the planned Yamal LNG plant. Novatek already owns 51pc of the project and has a call option on another 23.9pc stake, should the plant go ahead.

New liquidity for global gas market

...in fact it’s a gas: a worker at the sakhalin lng plant

faced with gas pipeline problems, russia is ramping up the development of liquefied natural gas as an alternative supply option.

tim gosling business new europe

The anti-corruption drive works. There has been positive change, but it won’t be finished in a year

arkady dvorkovich

age: 39

hometown: moScoW

Arkady Dvorkovich graduated from Moscow State Universi-ty with a degree in economic cybernetics, received a Mas-ter of Economics degree from the Russian School of Econom-ics and an MA in economics from Duke University in North Carolina. From 2001-2004 he was a deputy minister for eco-nomic development and trade, and, after serving in Vladimir Putin’s administration, was in 2008 appointed as presidential aide and Russia’s G8 sherpa by Dmitry Medvedev.

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05most read BusinessRussia now www.rBth.rusection sponsored By rossiyskaya gazeta, russia distriButed with the daily telegraph tuesday_april 19_2011

BP-AAR endgame: knowns and unknownshttp://rbth.ru/12686

stephendalziel

Russo-bRitish cham-beR of commeRce

Let us take an esoter-ic look at how quan-tum mechanics and maths puzzles relate

to investment, now that the abstruse has just invaded our daily lives – in the form of the earthquake and tsu-nami in Japan. These occurrences constitute a Black Swan event, or some-thing that has an extremely small chance of happening, and so governments and in-vestment bankers spend very little time thinking about or planning for them.The Japanese authorities had contingency plans – but none anticipated an earth-quake and tsunami, a nu-clear plant’s cooling system being washed away and its reactors approaching melt-down all at the same time. It’s an understandable mis-take: our lives are for the most part a succession of or-dinary days; summers are hot; and the train to work comes at 8:17.The term “Black Swan” comes from the danger of assuming everything stays the same. The swan was used in a famous inductive rea-soning example: “All swans are white” was a universal truth, as each swan ever seen was white – until a Victori-an explorer found a black swan in Australia. We are very poor at assess-ing just how likely the very unlikely is, and the unlikely happens a lot more often that one might expect. This is neatly illustrated by the birthday problem in math-ematics: “How many people do you need in a room so there is a 50:50 chance two were born on the same day?” The intuitive answer is 183 (ie half of 366, which covers every day of the year plus one). The actual answer is only 23 people. The reason is (without getting into de-tail) that you have to calcu-late the chances of an iden-

Alexei Leonov became the first man to go outside his capsule in space on the first so-called “space walk”. And even after the US Moon land-ing, another noteworthy milestone went to the Sovi-ets with the launch in April 1971 of Salyut 1, the first space station.So why, almost 20 years after the collapse of the Soviet Union, could most British schoolchildren have told you that 2009 marked the 40th anniversary of man landing on the Moon; but not that 2011 marked the 50th anni-versary of the first human spaceflight?Firstly, old habits die hard. While few people nowadays would admit to having an openly hostile, Cold War at-titude towards Russia, for many Britons there is a nat-ural cultural and historical

affinity with the US. Second-ly, space exploration in So-viet times was considered to be a part of the country’s mil-itary programme, so few de-tails of Soviet space flights were ever revealed. Nor did the Soviet programme intro-duce and develop as many tangible day-to-day benefits as its US rival did, such as smoke alarms and TV satel-lite dishes.But be it home comforts or more accurate weather fore-casts, man’s exploration of space has not only improved life on Earth but taught us more about ourselves, about our species’ courage and en-durance. So, when Gagarin’s statue is unveiled in London this sum-mer, may it give people pause to marvel at all of those pi-oneers who pushed back these shared boundaries.

the decision by the British Council to unveil a statue of the world’s first space-

man, Yuri Gagarin, in Lon-don rights a wrong born of the Cold War, which has long outlived that era.Generations of British (and even more so, American) schoolchildren have grown up in the belief that the United States has always led the way in space explo-ration. The reality is very different. Okay, the US has the big one: as the first (and to this day, only) country to put a man on the Moon.That is, of course, a mas-sive achievement, bettered only by that of bringing them safely back to Earth again. But if that is the pin-nacle of man’s achieve-ments in space, most of the steps leading to the sum-mit were trodden by Rus-sians, and the occasional other Soviet nationality.On October 4, 1957, the USSR put the first man-made object, Sputnik, into orbit around the Earth. From that point until the Americans landed on the Moon on July 20, 1969, the most significant steps for-ward were all Soviet. The first living creature to be put into orbit around the Earth was a Russian dog, Laika, a month after Sput-nik. The first man in space was Yuri Gagarin, 50 years ago, on April 12, 1961. (The unveiling of his statue in July 2011 will mark 50 years since Gagarin came to the UK.) A little over two years later, on June 16, 1963, another Russian, Valentina Tereshkova, became the first woman in space. With-in a further two years, on March 18, 1965, another space record had gone to the Soviet Union, when

Reaching the moon on the shoulders of giants

london Blog

moscow Blog

Ben aris

speciaL to Rn

all bets off as black swans come home to roost

tical birthday for each person individually and sum all the probabilities up, rather than dividing the chance for the group as a whole by half. (You get a 99pc chance of two iden-tical birthdays with just 57 in the room.) It is the interconnections be-tween each and every varia-ble that is important – and hard to see. These add up rap-idly in complicated systems, and what should be extreme-ly rare events happen surpris-ingly often. Investors know this as “tail-end risk” which you can price and sell. Nassim Taleb, the au-thor of the bestseller The Black Swan, has made a for-tune selling options on tail-end risks. His point is that the straight-line inferences most

traders make, based on the news of A leads to B leads to “buy”, is meaningless, so he sells bets on very unlikely events. These do not come up often, but they do come up more often than most people expect, making Mr Taleb a very rich man indeed. There remains a conviction that, given enough informa-tion, an analyst can say for sure what will happen next. The trouble is that the world doesn’t work like this. Quan-tum mechanics shows the uni-verse is intrinsically unpre-dictable, as enshrined in the Heisenberg uncertainty prin-ciple. You cannot know any-thing precisely. Emerging-market investors are good deal better at deal-ing with Black Swan events, as they are used to this un-predictability. They focus less on risk and more on growth and opportunity because, un-like their peers in the West, emerging-market investors are not surprised when some-thing goes wrong.

We are very poor at assessing how likely the very unlikely is – and it happens more often than we expect

how is it that british children can date the us moon landing, but not the first human spaceflight?

After ignoring the rise of the fast economies for much of the Nineties, mainstream in-vestors have woken up to the huge gains that can be earned in a relatively short amount of time from these markets, and have turned to the ex-change-traded fund (ETF) as their vehicle of choice. How-ever, long-term investors into the biggest emerging mar-kets warn that these funds may destabilise fast-growing stock markets. Russia’s stock market has been the star performer this year, but as the economy is increasingly dependent on oil, analysts worry that the increased importance of ETFs means any correction could be sudden and sharp. The appeal of ETFs is that, unlike a mutual fund, these funds can be traded on an exchange. That means inves-tors can get in and out of a fund instantly. But, like a mu-tual, the underlying fund is based on a basket of stocks that give the diversity that is the cornerstone of any long-term investment in a risky asset class. They also have low costs and a benefi-cial tax status. “In many ways, the parallel development of exchange-traded funds and the invest-ment case for emerging mar-kets has been a happy coincidence,” said Chris Weafer, head of strategy at UralSib in Moscow. “ETFs have enjoyed a huge wave of interest from investors want-ing to tap into high-growth markets, as they can offer broad exposure or drill down into specific areas.” Few would have expected emerging markets to benefit from the flight-to-safety trade, but that is what has happened as developed mar-kets bury themselves in a debt hole. Emerging-market investments have done very well over the last two years, and Russia’s market has been one of the best performing

equities exchange-traded funds attract overseas cash, but increase market volatility

the rapid rise of exchange-traded funds in russia as a convenient means of tapping this emerging market has divided expert opinion.

in the world, up about 150pc in 2009 and 22pc in 2010. Most gains in 2010 were made in other emerging mar-kets, but Russia is the front-running Bric market this year, up 15pc over the first three months of 2011. The leading RTS index passed the psychologically important 2,000 mark in

March as the valuation of Russian stocks overtook their pre-crisis highs for the first time in two years. The RTS is expected to pass its all-time high of 2,487.92 later this year. Russia is now attracting con-siderable overseas cash, and fund tracker EPFR Global says that new money flows

the rise and rise of the etF

nick watsonbusiness neW euRope

into Russia-focused funds in the last week of March amounted to $486m – up from $139m the week before. By the end of March, assets under management in Rus-sia-dedicated funds hit a new all-time record high, breach-ing the $20bn mark, accord-ing to Uralsib. Half of this is now in ETFs.“ETF investors continue to increase exposure to Russia,” said Mr Weafer. “Notably, al-most all inflows into Russia funds came from country ETFs, which is a continua-tion of the trend of large in-flows into country ETFs, which began late last year.”However, thanks to the stock-like nature of ETFs, fund managers say they add to the volatility by acting like “hot money” – highly speculative investments looking for short-term gains. The point was brought home in March when all emerging markets experienced a sell-off as developed markets showed signs of revival. “The Russian market is currently standing apart from this

trend, said Liam Halligan, chief economist of Prosper-ity Capital Management, a dedicated Russia fund. “As a difficult EM, Russia re-ceived a disproportionately low share of the portfolio in-vestment that fled the West following the credit crunch. Having absorbed much less Western “hot money”, Russia has been less susceptible to profit-taking, and the more general sentiment shift away from EM and back towards the developed world.” The silver lining in the rise of ETFs is that, as a main-stream investment vehicle, the word “Russia” has entered the lexicon of financial ad-visors selling to the small in-vestor and the more conserv-ative institutional investor. “ETF inflows [to Russia] re-flect the fact that Russia is increasingly cited among mainstream professional in-vestors as a market with good prospects during 2011 and beyond,” said Mr Halligan. It is an education process that will ultimately benefit everyone. In the meantime,

investors can expect a chop-py ride as fund managers fret over the turmoil in the Arab world, and its effects on oil prices. If these fall and ETFs take fright, there could be a sharp correction in Russian share prices. In one worrying sign, Bloomb-erg reported that the Market Vectors Russia exchange-traded fund, the biggest US-listed Russian ETF, sharply increased its short selling of Russian funds in late Febru-ary. Short sellers sell bor-rowed shares, hoping to buy them later at a lower price and return them to lenders. Other investors point to the still-cheap valuations: Rus-sian stock, on a price-to-earnings basis, is the lowest among 21 major emerging markets, notes Bloomberg.“Russia is in pretty good shape at the moment,” said Julian Mayo, a London-based money manager who helps oversee some $3.5bn in de-veloping nations at Charle-magne Capital Ltd. “I think it will continue to outper-form.”

drinks in the massive domestic spirits market, where vodka leads, scotch follows

russia is still the bastion of vodka manufacturers, but their whisky-distilling rivals are determinedly closing in.

Could whisky really be the new vodka? Not yet, in Rus-sia at least, but this staple of the western drinks cabinet is the firm favourite among a growing sector of the pop-ulation. “Gin is down, tequila is down, cognac is static, but whisky imports are growing,” says Erkin Tuzmukhamedov, a prominent sommelier and one of Russia’s foremost whisky aficionados. “It was the only spirit to continue to grow during the crisis, and it accounts for about two-thirds of all spirit imports.”Russia is the world’s largest overall spirits market, con-suming 275 million nine-li-tre cases in 2009, of which domestically produced vodka accounted for 229 million cases, according to the Ed-inburgh-based Scotch Whis-ky Association. There may still be a mountain to climb to assail vodka’s supremacy, but marketing managers in Edinburgh see “significant room for growth”.One reason is that whisky is genuinely new to the coun-try. When the global craze for whisky took off in the late-19th century, imperial Rus-sia was largely insulated by a state monopoly on alcohol, a situation continued after the 1917 Revolution. For the next 70 years, the Soviet pub-lic had two choices of legal spirits: vodka, and French-style cognac, the latter most-ly from the Caucasus.Whisky wasn’t exactly un-known in the Soviet Union:

the party and security elite could enjoy imported Ballan-tine’s, and an enterprising drinker with money could track down a bottle of black market Teacher’s. But Rus-sians really only discovered whisky en masse after Boris Yeltsin lifted the state mo-nopoly on alcohol in 1992.“It was a glamour thing. You watch a Hollywood film, and everyone is drinking whis-ky; you read Western litera-ture, everyone is drinking whisky. We’d never had it be-fore,’’ Mr Tuzmukhamedov recalls.What started as an expen-sive novelty and status sym-bol has become a feature of the more discerning drinker. In the past 10 years, sales of imported spirits have in-creased 40 times, driven by rising incomes and the

growth of the middle class, says Vadim Dobriz of the Russian Regional and Fed-eral Alcohol Markets Stud-ies Centre. And whisky’s nov-elty has kept it ahead of rivals gin, rum and tequila.Mr Dobriz attributes much of this popularity to drink-ers – especially women – who yearn for an alternative to knocking back knocking back shots of vodka. “Women don’t like vodka; they want something with flavour that they can sip. So you’ll find female drinkers are a signif-icant part of whisky’s suc-cess,” he says.Today, the Russian market in many respects resembles the rest of the world. As else-where, it is dominated by Scotland. The biggest-selling single malts are Glenfiddich and Glenlivet. White Horse,

The Famous Grouse and Wil-liam Lawson’s led the pack in the blended segment in 2010, while the most popu-lar premium blends include Johnny Walker Black Label, Chivas Regal and Dewar’s. But there are peculiarities. Irish whiskeys have a dispro-portionately strong presence, because Jameson was one of the first brands to enter the market, in the early Nineties. And, apart from the ubiqui-tous Jack Daniel’s, North America is sorely under-rep-resented.Plenty of obstacles still re-main for those working this market. The Federal Service for Alcohol Market Regula-tion is pledging to reduce the number of import licence holders by half. Then Alexei Kudrin, the finance minister, last month unveiled plans for a fourfold increase in the ex-cise tax on alcohol by 2014. For consumers, that would mean a huge tax increase on half a litre of vodka and other spirits – from the current 46.20 roubles (£1) to 180 rou-bles (£3.90).But Russian distillers are still optimistic. In February, Alli-ance 1892, a Kaliningrad-based spirits producer, signed a deal with Scottish suppli-ers to import and bottle its own blend. Dubbed “Seven Yards”, the newcomer will take on The Famous Grouse and White Horse in the economy segment. And the Prasko-veiskoye winery and cognac distillery in Stavropol adver-tises a three-year-old oak-aged whisky that “combines centuries of Irish tradition with the experience of Prask-oveiskoye’s cognac masters.”

A longer version of this article was originally published in

the moscow times.

Whisky: the new toast of the town

acquired taste: whisky is becoming a favoured tipple of the more discerning drinker

roland oliphantthe moscoW times

litres of spirits were consumed in Russia in 2009

the amount by which sales of imported spirits have grown since 2001

is the current level of tax lev-ied per litre of spirits sold. A fourfold increase is planned

2.4bn

40x

£2

the numBers

i spy a single malt, says kgB’s yuriDuring his 1977-84 posting to London, former KGB spy Yuri Kobaladze headed the wine club of the Association of Foreign Journalists as part of his cover. A love of malt whis-ky that grew from this “duty” returned with him to the Soviet Union. “I came to the conclu-sion that there is nothing bet-ter than a 16-year-old Lagavu-lin,” he recently recalled. “Later, in Nineties Moscow, everyone became interested in whisky, and I was often called in as an expert. The high point was my participation in a TV show where I was asked to identify three types of drinks based on their smell and taste.“In the second glass there was

something ordinary: Red Label. I guessed correctly. In the third glass they had poured what I took to be a single-malt whis-ky. I didn’t know the name, but I could tell that it had been di-luted. It turned out that the props men had taken swigs from the bottle and topped it up with tap water. “When this was discovered, the professional bartender judging the contest took his hat off to me: it was the first time in his 40-year career that he had met a man able to tell from one sip whether a drink had been di-luted. That made my reputa-tion as a great whisky expert – but it all began with ordinary visits to London pubs.”

global equity market performance: Feb-march 2011

3 Reasons to investin etfs

1 ETFs are transparent tools, easy to under-stand even by investors

lacking advanced financial knowledge. Their simplic-ity offers a welcome bonus in the post-recession confidence crisis.

2 With just one payment, ETFs allow you to par-ticipate in a variety of

underlying instruments. Such diversification translates into reduced risks to the portfolio, while aiming for sustainable long-term growth.

3 Since they do not re-quire the active man-agement of financial

professionals, ETFs have a low-er cost (by as much as 50pc) than mutual funds. Past results show that such an approach often means better outcomes for the investors.

etFs now account for around half of the $20bn tied up in russia-dedicated funds

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06 most readRussia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_april 19_2011comment & analysis Managing Russia’s pragmatic idealists:

Alexander Arkhangelskyhttp://rbth.ru/12677

The Egyptian crowd threw eggs at the motorcade of UN Secretary General Ban Ki-moon, but stepped aside to let through Sergei Lavrov's limousine with the Russian flag

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Logic of Samovar dipLomacy

dmitry babichRia NovoSTi –

SPECiaL To RUSSia NoW

Why aren’t Rus-sians brimming with admiration for the Arab rev-

olutions? I have heard this question at least 20 times in the past three months. It came from BBC journalists interviewing me; from West-ern university professors lec-turing Russian students; sometimes even from West European diplomats. Somehow, we Russians (ac-cording to others) are never supposed to be free. A refus-al to see our condition as an-ything but the most misera-ble of states crying for an immediate new revolution is seen at best as resignation be-fore evil; at worst, as a gross injustice. “Don’t you want to have the same freedom as Tu-nisians now have? How rot-ten of you not to want it!” This was a question with a read-ily attached answer from a friend of mine, a British jour-nalist whose every report from Moscow starts with the words, “In another blow to Russia’s democracy…” No, I don’t want to be one of those 25,800 Tunisians cur-rently waiting for the Italian government to decide their fate as illegal immigrants on the island of Lampedusa. We Russians have learnt the hard way since 1917 – or maybe even since 1789, when the first refugees from the French Revolution started coming to Russia – that a revolution’s quality is best defined by mi-gratory flows. Having overthrown the tsar's autocracy in 1917, millions of Russians suddenly found themselves in the situation of émigrés, enduring such hu-miliations that the tsar’s “hu-miliating” rule seemed a par-adise lost in comparison. Worse still, those who stayed in Russia, and found them-selves under Lenin and Sta-lin, envied their relatives who

as the old Russian saying goes, you don’t take a samo-var to Tula – just as

you don’t take coals to New-castle. These simple truths also work for geopolitics. It would be untrue if we said Russian diplomats have stopped taking their “samo-vars” on diplomatic trips. And yet it is precisely this approach that helps them emerge unscathed in difficult situations, or even elicit a warm welcome, especially in the Islamic world. Almost one month ago, on March 21, I accompanied Sergei Lavrov, the foreign minister, on his trip to post-revolutionary Egypt. Our first visit was to the Arab League headquarters at the corner of Tahrir Square – a name now known all over the world. The barricades were removed two days before, but the city was still far from quiet. I got out of the car some 20 yards away from the Arab League building and just five yards away from a crowd of peo-ple shouting something in Arabic. European-looking re-porters immediately attract-ed the demonstrators’ atten-tion. “Beat them!” shouted one, and the crowd moved towards us. Luckily, one of the protestors asked in Eng-lish: “Where are you from?” When we said that we were Russians, the crowd stopped.

tonomy. While international observers failed to find any significant voting irregular-ities, neither the United States nor the European Union recognised Hamas’ victory, refusing to negotiate with the representatives of this movement. On the contrary, Russia chose to respect the will of the Pal-estinian people. “As for Hamas, we maintain ties with this movement now that a significant part of Palestin-ians voted for it in the elec-tion recognised by all as free and democratic,” Mr Lavrov stressed. “To solve the eco-nomic problems of Gaza, we have to co-operate with Hamas on a daily basis. This is a complicated process, but there will be no results if we do nothing.” The West used to criticise Russia for supporting “ter-rorists” when it received Hamas leaders in Moscow, but it emerged last year that European diplomats also made direct contacts with Hamas. Apparently, they re-alised that any progress in the Palestinian-Israeli con-flict is unthinkable if we ig-nore the opinion of the ma-jority of Gaza’s people. In other words, Moscow was right to urge its European colleagues to take a more dif-ferentiated approach. In Egypt, meanwhile, Mr La-vrov stressed: “Russia has no right to quarrel with the Is-lamic world, let alone to be dragged into such quarrels. I am sure that the choice of Russia and other leading na-

yoU Say yoU WaNT a rEvoLUTioN?

tions, including such geopo-litically important countries as China and India, in favour of unifying policy shall be the main factor, and a guar-antee that the world will not be split between civilisa-tions,” he said. What is happening today is that the West is losing its mo-nopoly on globalisation. As the foreign minister said, it is perhaps for this reason that some people are tempted to interpret the current events as a threat to the West and its values and lifestyle. How-ever, he added, “When such conclusions produce attempts to split the world between the so-called civilised hu-mankind and the rest, this is fraught with the risk of glo-bal catastrophe.” On the return flight from Cairo to Moscow, I asked a top-ranking official from Mr Lavrov’s team whether we might have done better to support the international co-alition in meting out the toughest possible response to Gaddafi? If only to improve our relations with the West. “Are you proposing to send Russian planes to bomb an Arab League country?” he re-plied. “We once made that mistake in Afghanistan, and we all know what happened. We won’t do that again.” Sometimes it takes simple geopolitical logic, like the samovar, to boil things down to their essence.

prised to see hundreds of thousands of them appear. Why? Because Tunisia, for ex-ample, which was expected to post economic growth of 4-5pc this year, will actually muster no more than 1pc – not a good time to have to find work for 80,000 young col-lege graduates who will join the labour market this year in Tunisia alone. Consequent-ly, the heightened expectations of the young are going to clash with reality, and then we shall hear the familiar slogan: “Islam is the solution.”Much has been written about the “conflict” between the Russian president and his prime minister over the Lib-yan problem. In reality, their two approaches reflect the complicated nature of the problem, which only self-as-sured ignoramuses could deny. Dmitry Medvedev ex-plained why Russia did not

block the UN Security Coun-cil’s resolution on helping Libyan civilians, while Vladimir Putin expressed his doubts about the ease with which Western nations resort to force in humanitarian in-terventions. Aren’t there grounds for such doubts? Hope is not a strat-egy, as American president Barack Obama rightly said recently, and Nato action in Libya seems to be more based on hope than on actual knowledge of the situation. The hope, obviously, was that Colonel Gaddafi’s defences would collapse with the first news about French air strikes. The hope was unfounded. But now Nato members are dis-qualified from working as in-termediaries in the Libyan conflict. Would it help if Rus-sia and China, as well as Bra-zil, disqualified themselves from this role too, by giving

their full support to resolu-tion 1973? One may try to acquit the “French George Bush,” Pres-ident Sarkozy, by his not hav-ing sufficient information on Libya. But who is to blame for Nato and the EU having such sketchy intelligence about the life of their close African neighbour? How did a situation arise where the French president recognises the National Transition Council in March 2011, while the identities of two thirds of its members were still a mystery? Of course, establishing con-tacts with the Libyan oppo-sition during Gaddafi’s rule was hard; talking to the “star” of the Russian opposition, Boris Nemtsov, in a fancy Moscow restaurant is much easier. But isn’t it the respon-sibility of governments and media to see real leaders and threats instead of invented ones? The European press and the EU’s policy planners failed the Libyan exam horribly, concentrating on imaginary threats for decades. It is enough to recall the sheer amount of stories written about how to respond to Rus-sia’s eventual decision to cut gas supplies to the EU. Whole institutes and policy centres made their living on such plans. But I don’t remember a single story or policy plan discussing a cut in energy supplies from Libya.Russians learnt the hard way to appreciate the wisdom of the words of philosopher Joseph de Maistre, a refugee from the French Revolution who lived in Russia in the early 19th century: “Revolu-tions happen because of the government’s iniquities; but no government iniquity is as bad for people as revolution itself.” The West seems to have forgotten its own wisdom on revolutions, despite the pain of its original acquisition.

Dmitry Babich is a political analyst for RIA Novosti.

Nato action in Libya seems to be based more on hope than on actual knowledge of the situation

Vladislav Vorobyov

SPECiaL To RN

resounded to chants of “Shame on Sarkozy” and “No bombing sovereign states.” Five minutes later, I saw the crowd throwing eggs at the motorcade of UN Secretary General Ban Ki-moon leav-ing the Arab League head-quarters. But this same crowd stepped aside to let through Sergei Lavrov’s limousine with the Russian flag. One can elaborate endlessly on why Muslims treat Rus-sians differently to, say, the French, British or Americans. To cite just one example, let us consider the attitude of the Quartet of Middle East peace mediators towards Hamas. In late January 2006, this radical movement, which many in the West still see as terrorist, won elections and received a parliamentary ma-jority in the Palestinian au-

had left. So, if the wind of change is so sweet as the Eu-ropean press describes it, why are so many people now flee-ing North Africa? But this is a different kind of revolution, my British reader will tell me, one that is not about Communism but free-dom. My answer will be: how do you know which form the now flowing Arab lava will take? To the tune of heated debates about a few hundred niqabs in France, a longtime ban on this sort of Muslim dress was lifted in Tunisia and Syria, and I wouldn't be sur-

Vladislav Vorobyov is foreign policy observer at Rossi-yskaya Gazeta.

“We won’t touch Russians,” one of the demonstrators ex-plained to me. “We thought you were French or English, we’d kick their a*** for Libya.” As it turned out, the crowd was angered by the interna-tional coalition’s bombing of Colonel Gaddafi’s positions the day before, and the air

UNLockiNg rUSSia WiTh a SWEdiSh kEy

Historically speaking, Russia has never re-ceived especially rave reviews from

those intrepid travellers who journeyed here from the West. Memoirs of Russia over the centuries have been rife with epithets like “wild and barbaric”, or “mysterious and strange”. At the same time, every second book about Russia claimed to be the first to reveal this remote and un-known country to foreign-ers. For example, in the pref-ace to his Russia in 1839, the Marquis de Custine gave the impression that before him no Westerner had set foot in this “bizarre country” and experienced this “utterly un-known society”.An age has passed since Cus-tine made his way to the frontiers of Siberia, but the picture of Russia abroad re-mains essentially the same. “People in the West know as-tonishingly little about Rus-sia,” writes Lennart Dahl-gren, a Swede who worked for close to a decade in Rus-sia as the head of IKEA. “We tend to take the stereotypes about this country as the re-ality. We have an outdated mould with which we try to cast our image of Russia, when it is made up of a mo-saic and is constantly chang-ing.”Dahlgren, too, has published a memoir: Despite Absurd-ity: How I Conquered Rus-sia While It Conquered Me. Anyone expecting another manual on how to succeed in sales will be disappoint-ed. The book, published last year in Swedish and Russian, contains nary a word about business. Its value lies rath-er in its attempt to explain why one would do better not to approach Russia with the standard set of myths and stereotypes. “Those who call themselves Russia experts usually don’t understand the first thing about it,” writes Dahlgren. “People who say they don’t know much about Russia come much closer to under-standing it.” Like most of IKEA’s manag-ers, Dahlgren began with a distinctly negative attitude towards his host country, the result of negative informa-tion in the media. When he first came to Russia on a business trip in the early Nineties, he brought two boxes of children’s clothes for the throngs of poor Rus-sian children supposedly roaming Red Square. One evening, he and a friend set out for the square, intent on bringing happiness to those local ragamuffins. How sur-prised and even disappoint-ed they were to find the chil-d r e n t h e y m e t w e r e well-dressed and mostly ac-

companied by parents. Cold and exhausted, the Swedes began to force their goods on anyone who would take them. Most people politely refused, but one person threatened to call the police. Dahlgren never brought an-other box of second-hand clothes to Russia again. Nor was business smooth sailing at the outset. IKEA managed to launch stores in Russia only on its third at-tempt. The first was derailed by the collapse of the Soviet Union in 1991, the second by the 1993 conflict between the Russian government and parliament. Third time around in 1998, just as con-struction was about to begin on the first store, the rouble collapsed. You would think that, from the point of view of Western logic, one should simply drop notions of doing business with such a coun-try. Western logic, however, doesn’t work in Russia. But the old Russian saying does: “Nothing ventured, no cham-pagne.” Dahlgren’s experi-ence convinced him of this.Much of his account con-cerns the long-running tug-of-war between IKEA and local authorities in the Mos-cow region. The Swedish company was supposed to build a bridge over the Len-ingrad Highway so that cus-tomers could get to the store more easily. First it received permission to build the bridge, then permission was withdrawn. Soon traffic on the highway was backed up for miles and the on-off bridge was back on again – but in the wrong direction. Dahlgren does not say so in

so many words, but he im-plies that the problem could have been easily solved with money. It is no secret that the local authorities in many regions of Russia see the ar-rival of a major Western com-pany as one way to beef up the local budget. IKEA ended up having to contribute $5m (£3.1m) to the development of children’s sport in the Moscow region.Of course, only a very large concern has the confidence necessary to engage in a pro-tracted battle with the local authorities. Others often give up and abandon the market. IKEA persisted and here’s the result: in less than 10 years in Russia, 13 gigantic malls were opened in 10 cit-

ies along with an enormous distribution centre, and three manufacturing complexes began operation. “Where else could you achieve such im-pressive results over such a short period?” asks Dahlgren. Incidentally, it was in Rus-sia that IKEA tested its new business model. It began opening not just furniture stores, as in other countries, but enormous shopping and entertainment complexes. Their success exceeded all expectations: the first com-plex became the most visit-ed in the world just two years

after it opened, with 50 million visitors annually.Having lived in Russia for a decade, Dahlgren found an explanation for Russia’s neg-ative image in the West: clear-ly it is in someone’s best in-terest. “I noticed fairly quickly that many Western businessmen in Russia lead a merry life full of affairs with Russian beauties and wild drinking sprees – this hardly promotes success in business.” So what do these über-re-laxed businessmen do? “There is a huge temptation to live as one pleases, and then to attribute any failures to the ‘horrors of Russian reality’: the mafia, corruption, pres-sure, threats,” writes Dahl-gren. The boss will think that his poor underling was knock-ing himself out under inhu-man conditions, forgive the losses and pack him off to a calmer country for a rest cure. Social benefits for staff in the Russian offices of Western firms are substantially high-er than for staff in offices else-where.But the fact is that anyone can get what he wants from Russia, be it pleasure and en-tertainment, fantastic prof-its or a murderous headache. One thing is certain, con-cludes the Swede: “You can love Russia or you can hate it, but you can never remain indifferent.”“I know for a fact that I will always miss that crazy space full of love, without fully un-derstanding why,” Dahlgren says. “Russia is a drug and I’m addicted to it.” Now that’s love – Swedish-style.

Svetlana Smetanina is a free-lance journalist and former staff writer at Kommersant, Gazeta and The Moscow News.

Those who call themselves Russia experts usually don’t know the first thing about it. People who say they don’t know much about Russia come much closer to understanding it

For foreigners, there is a huge temptation to live as one pleases, and then to attribute any failures to the ‘horrors of Russian reality’: the mafia, corruption, pressures, threats

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Londongrad – From Russia with cash“Russian oligarchs have also breathed new life into one of Britain’s oldest industries: yacht building. After refitting Roman Abramovich’s yacht Pelorus…Terence Disdale found himself inundated with new orders and even had to turn some clients down. According to Jonathan Beckett, managing director of Burgess Yachts, the Russians have ‘taken the yacht business by storm. From 10 to 20pc of our clients are Russians.’ “In early 2008, Disdale said that people from Russia probably do not dominate the world market, but ‘they are the biggest spend-ers. They want the very best de-sign and materials. On the char-tering market, they lease the very biggest and very best ves-sels for the longest periods of time. The Russians will charter

RUSSIA NOW WWW.RBTH.RUSECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA DISTRIBUTED WITH THE DAILY TELEGRAPH TUESDAY_APRIL 19_2011 Special reportYoung Russians move abroad for “breath of fresh air”

http://rbth.ru/12678

has this society enriched them? In order to answer these and other questions, Russia Now canvassed the opinions of several seasoned “Russia watchers” in a recent round-table discussion at London’s Pushkin House Russian Cultural Centre.

RN: An increasing number of Russians are moving to Brit-ain, especially London, for the long haul. And they are ready to spend: so much so, that British economic commenta-tors say that if the Russian money vanishes, there’s going to be one heck of a gap. So, just who are these Rus-sians putting down roots in Britain? Lucrative clients and investors? Murky business-men? Or regular neighbours who just happen to live next door in Britain’s multicultur-al melting pot?

Seva Novgorodtsev: The Brit-ish have experienced several generations of Russian emi-grants since the Seventies. [Then] there were probably 100 Russians in London, and they were such a rarity that the locals would come up and touch them. We then started seeing people arriving here, mostly intellectual dissidents, scientists, artists and musi-cians. Chekhov holds such an ap-peal in the UK because the British were nostalgic for their own lost “Cherry Or-chard” [legacy of heritage]. Ironically, some of the more recently arrived Russians were the same energetic mer-chants who cut down those orchards. Now we see a new wave of Russians here, a second gen-eration who studied in the UK, are highly skilled and bi- or even trilingual. They are a smart lot – lawyers, insurers and other successful profes-sionals, and you can’t tell by looking at them that they are Russian until you hear them speak the language. These are people who are to-tally international: they could work in any country and can go back to work in Russia for foreign or Russian compa-nies.And if we are talking about what Britain gave to the Rus-sians or vice versa, it is this generation we should be con-centrating on: they can func-tion as a link between the two countries.

Shirley Humphrey: Harrods Estates have been dealing with Russian clients for the last 15 years, and our percep-tions of Russian people have changed dramatically over this time. There used to be people coming to buy prop-erty here with suitcases full of money, which we were not allowed to take – we have strict anti-money laundering regulations. On both sides there was an element of mistrust, and per-haps there were many cases of Russians being treated un-fairly by unscrupulous agents, and cases when, on hearing a Russian accent, the selling price would go up.

Katerina Ukhankova: I own a company that helps wealthy families from Russia and former CIS republics take up

Migrants A growing number of our people are choosing to relocate to Britain. But who are they? And why do they remain such an enigma to the Brits?

New wave of Russian expats washes up in ‘Londongrad’

Giant matryoshka dolls take a spin on the London Eye for the opening of the Russian Winter Festival held at the South Bank Centre in January 2008

By royal appointment: Sergei Pavlenko with one of his portraits of the Queen

million – amount spent annual-ly by Russian tourists in the UK

The number of Russian stu-dents enrolled at London’s prestigious LSE in 2009-10

thousand Russians visited Brit-ain in 2010 – both on business and as tourists

£310

111

241

THE NUMBERS

residence in the UK. I can con� rm that the Russian cli-ents have become more civi-lised and “transparent”. In fact, there are no longer any suit-cases � lled with cash.And while most local banks still consider Russia a high-risk country, Russians have a much easier time today un-dergoing all the checks the UK � nancial institutions put them through. Most of the leading local banks, large law � rms and es-tate agents now have special Russian departments to make sure the rich Russians get higher quality service.

RN: At the same time, it’s a fact that these rich Russians are the ones who drove Brit-ain’s already pricey property market through the roof. This has presumably not gone down too well among the British.

Mark Hollingsworth: The Rus-sians are far from the only ones to heat up the market; look at the Kazakhs, Chinese, Americans and Arabs.

Katerina Ukhankova: Accord-ing to � gures published in the British media, in terms of property purchases, Russians are only in � fth place, behind the Chinese, Indians, Malay-sians and Saudis. But today we’re not just talk-ing about rich people from Russia: there are lots of Rus-sian students here, and local universities are happy to take them in, not just because they pay for tuition, but also be-cause they usually study well and raise the university’s rat-ing with their high marks. I’ve met some highly talent-ed Russians in the UK, and the majority of them can speak multiple languages and adapt perfectly to the local culture. I even get the feeling some-times that perhaps Russia’s most gifted and intelligent people have all emigrated. If that’s the case, it’s extremely sad.

Oksana Morgunova: I believe that we are currently witness-ing the formation of a new national minority in the UK. More and more Russians are arriving here with both Brit-ish and Russian passports. The number of Russians who were born and educated in the UK is growing, and the question arises whether or not to remain in this country after receiving a diploma, or return to the motherland. This is extremely difficult to answer, because it’s a super-� ous question. They don’t “re-main” anywhere – they can work simultaneously both here and there, or in some other country. The world’s younger generation has be-come very receptive to this way of life.

a vessel that costs $100,000 a night, whereas the Americans will settle for a yacht that leases for $40,000 a night.’“The advent of this gigantic geyser of foreign money has launched new industries and spawned huge profits while turning London into an immense club for those who can afford the membership fee. New jobs have appeared... chauffeurs, bodyguards, and gardeners are suddenly in great demand. Lon-don now boasts more butlers than it had in the time of Queen Victoria. Abramovich employed 28 servants at his Fyning Hill estate alone, while Oleg De-ripaska’s mansion on Belgrave Square was swarming with at-tendants all year round, though he rarely lived there himself.”

Around the tableFRANK ALTHOUSE Director, Russian Language CentreOLGA BALAKLEETS Ensemble Productions VASILINA BINDLEY Executive director, Willis LtdJULIAN GALLANT Director, Pushkin House Russian Cul-tural CentrePAUL HALLORAN Writer and pub-lisherMARK HOLLINGSWORTH Co-author of Londongrad – from Russia with CashSHIRLEY HUMPHREY Director, Harrods EstatesWILLIAM MACDOUGALL Director, MacDougall’s Auctions DR OKSANA MORGUNOVA Co-au-thor of Russian Presence in BritainSEVA NOVGORODTSEV BBC broadcasterSERGEI PAVLENKO ArtistKATERINA UKHANKOVA Director, Kalido Private Office

Preserving 'Russian-ness' can be an anxious affair

Images of oligarchs on the run, spies and blondes...

Russian brushstrokes captured the Queen

A place called ‘Londongrad’

RN: Everyone in the UK who is interested in the Russian “diaspora” notes that immi-grants from Russia emphat-ically refuse to set up their own residential districts, and make every effort they can to live as far apart from each other as possible. Thus, while it’s well known that hundreds of thousands of Russians live in London, nobody has any idea where they live exactly. How can this phenomenon be explained?

Mark Hollingsworth: One of the biggest revelations for me, while I was researching my book, was the Russian ob-session with secrecy at all levels of society, that is what causes a major problem for the Russian image abroad.

Julian Gallant: What we in Britain probably do not ap-preciate about Russians is that they are always anxious about the uncertainties of the future, irrespective of their � nancial position and living standard.

Shirley Humphrey: Russians are more discreet than many other nations – they tend to keep their important deal-ings very discreet, and will often bring their own inter-preters [to be doubly sure].

Seva Novgorodtsev: I recent-ly heard two little Russian girls outside their £12m house in Mayfair talking on the phone to their father who is in Matrosskaya Tishina [a Russian prison] and who is never coming out. He used to be a politician and an oil magnate and was arrested on trumped-up charges: he lost and landed a life sentence. The house is still there, the daughters are growing up but he is in prison. That’s why Russians have to be discreet. This money carries a price tag.Julian Gallant: And yet Rus-sians are drawn to each other in London. They mainly so-cialise at church and various cultural events. In my view, one of the big-gest problems facing the Rus-sian expat community is that they have nowhere to teach

their children Russian. They can only take their children once a week to one of the Russian schools that have been set up by genuine en-thusiasts and volunteers who devote their time and efforts to preserving the Russian language and Russian cul-ture in the UK. One such school is located at Pushkin House in London.

Olga Balakleets: Cultural events with nation-al colouring are extremely important for Russians liv-ing in the UK. It would be wonderful to see wealthy Russians supporting Russian cultural events, Russian com-munity events and some ded-icated Russian charities in the UK. However, with a few excep-tions, we are far from receiv-ing enough support from our rich compatriots.

Vasilina Bindley: Russians do get together for various cul-tural events all the time. Go to a concert of [classical pi-anist Evgeny] Kissin and there will be plenty; go to a KVN [Soviet-style comedy/talent competition] show and you’ll � nd a thousand. The Sovremennik Theatre tour was sold out, as was the May-akovsky Theatre tour. In the City of London, where thousands of Russians are employed in business and � -nance, there are several pro-fessional associations and clubs, such as the Anglo-Rus-sian Legal Association, the Russian MBA Group, the Russian Banking Group, and the Russian Insurance Club. If you go to a Russians in the City [club] event, you will see

RN: We have been discussing the visible presence of talent-ed Russian professionals and diligent students in London, yet in the view of most Brit-ons, the Russians who come to their country are either fu-gitive oligarchs with dodgy money, call girls or spies of every kind. Where does this image come from?

Sergei Pavlenko: Russians have always been looked at differently, there is still some political angle here...

Paul Halloran: The generation of Russians who came here in the early Nineties are not the same as the Russians who come here now. The latter group is a lot more savvy and is less exploited. I have been around Russians a long time, and have come to the conclusion that there is no such thing as a Russian heart: they just have a com-munity of interests. People who come here from Russia and do well work hard, and people who come here from Russia with money are no different from those com-ing from Arab countries or China, or any other nation-ality. Russian illegals are not a

problem. Russians assimilate quickly and you do not see many of them working in kitchens and restaurants.Mark Hollingsworth: With the new generation of Russians coming here, the real issue is the difference in [the British] perception of Russians and other nationalities. It is Rus-sian oligarchs and Russian ma� a [who form the stereo-type], and so the problem is one of perception and reali-ty. As Paul indicated, 99.9pc of Russians in the UK are hard-working professionals. The problem is that if you talk to educated and reasonably in-formed British people they immediately think of Russian ma� a, oligarchs and [Alex-ander] Litvinenko…

Everybody joining in: ...and Anna Chapman and blonde Muscovites called Masha!

Mark Hollingsworth: The prob-lem is the perception. There are only very few oligarchs who came here to hide from prosecution. They are fugi-tives and they do not even cre-ate any business or revenue here; they are just � nancial engineers, simply hiding their money here, and the key rea-son is security, partly psycho-logical.

Frank Althouse: I have been teaching Russian for 20 years, and we are in danger here of misunderstanding how the perception of Russia among young British people now is very different from that of the generation of the Seventies. I notice that when we teach Russian to young British law-yers, they go to Moscow with

Olga Balakleets: We have a unique person sitting with us, Sergei Pavlenko, who painted [a portrait of] Queen Elizabeth. For the Queen, the nationality of the artist doesn’t matter, as long as he or she is a true profession-al. Sergei Pavlenko: Out of 100 leading portrait painters in the UK, at least 50 are for-eigners, foreign trained or foreign born.

William MacDougall: I imag-ine that English art schools no longer teach the skills of portraiture.

Sergei Pavlenko: Russian art schools have the same prob-lem: some that were once fa-mous for this are now going downhill. When the gates opened to the West there was a lot of in-terest in Russian art, and

some artists started to believe they could paint and sell an-ything. But people in the West aren’t fools.

William MacDougall: Some artists like Oskar Rabin ac-tually did better work before they left Russia.

Sergei Pavlenko: To succeed in the West you have to work hard, but not everyone wants to.

RN: There is no such con-cept as “Parisgrad” or “NewYorkgrad”, while “Lon-dongrad” exists. What is the magnet that draws Russians here?

Paul Halloran: In France, you need three months to set up a company; in London you could do it in a day, even over the phone. The judiciary is independent, � nancial serv-ices are extremely well de-veloped. Education for their kids is good, and the British are very nice people.

William MacDougall: It may be a generalisation, but it is also completely true, of course. I would add that Brit-ain is a good place to be from a tax point of view.

Katerina Ukhankova: Britain is a safe place and a “fash-ionable” country to live in, while London is a world � -nancial centre. So little won-der so many Russians choose “Londongrad”.

a totally different view of Russia. In the past, young peo-ple going to work there would have been briefed about the hardships and peculiarities of working in Russia. Now they go to work in Moscow as they would go to work in UK. As the experience of foreign-ers in Russia normalises, so does the reputation of Rus-sia and Russians.

Fathoming the second influx of the UK’s Russians

CONTINUED FROM PAGE 1

hundreds of Russian profes-sionals making the most of networking opportunities.

Creative industriesConverting Russia’s industrial wastelands into hot properties

through art and innovation

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Pay and play: the project “My part in the movie” offers everyone a chance to grace the silver screen http://rbth.ru/12666Feature

On an intimate Moscow black-box stage, four actors read their parts, including stage directions, from the scripts in their hands. They frequently look directly at the audience (the � rst row is only inches away). Slowly, the reading turns into perform-ance. The tension builds as the actors transform into characters – four young and aimless drunkards. The au-dience appears both shocked and amused by the crude-ness of Zhizn Udalas (Life Smiled at Me) which employs language unheard of in local theatres. A cluster of young Russian playwrights armed with ra-zor-sharp tongues and a hun-ger for realism is charting new territory on the Russian stage, bringing a fresh lustre to the country’s theatrical reputation with its “New Drama” movement. Their theatres are small and their themes are gritty, and they are attracting daring talents and lively audiences. Teatr.doc, which produced Zhizn Udalas, is best known outside Russia for perform-ing a play about the life and death of lawyer Sergei Mag-

Theatre A new breed of realist dramatists has surfaced to take on the Moscow mainstream

Moscow’s emerging “New Drama” theatre movement is shocking and delighting audiences with a broadside of rough realism.

nitsky (who died last year in police custody), giving a voice to civil discontent. The group also staged a play based around internet reactions to the horri� c 2004 school siege in Beslan.Zhizn Udalas has been awarded a Golden Mask Award. The Golden Mask Theatre Festival is Moscow’s premier theatre event. It runs each year from March to April, closing with a show-case for cutting edge work, called the Case Festival. Some foreign theatregoers may think the nation that gave the world Chekhov and Gogol has rested on its lau-rels in recent years. But whatever collapse of con� -dence and creativity occurred in the Nineties has been re-placed with something wor-thy of Konstantin Stanis-lavsky himself.Every night, roughly 30 the-atregoers enter the tiny base-ment of Teatr.doc, which al-ready has a cult following in Moscow. Here, a conspirato-rial air hangs over the min-imalist décor, and a near tan-gible chemistry occurs between the actors and au-dience. Like the Bauhaus, the thea-tre’s maxim is, “Less is more.” And, sure enough, New Drama is driving a crack through the ageing facade of Moscow’s main street thea-tres. The question now is: how long can Russia’s best-known

New Drama production Life Smiled at Me pulls no punches as it reveals the seamy side of modern existence

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So you’re a budding expat in Moscow. How will you ap-proach your life there? A few typical types of Moscow ex-pats are revealed.No Russian revolutions are anticipated over the next few years, at least in part because Russia lacks a con-solidated protest movement.

Passover Russia’s Jews uphold an age-old baking ritual

Through repression and revival, Russia’s Jews maintained the matzo-baking rites of the Passover to commemorate the Exodus.

When Israeli prime minister Benjamin Netanyahu visited Moscow last month, the food he enjoyed at the Kremlin was as kosher as it comes, the result of staunchly up-held Jewish tradition – and terrible sacri� ce.“My grandfather was exe-cuted in 1950 in Leningrad by the Soviet state because he made matzo, the � at un-leavened bread eaten by Jews, instead of leavened bread during the eight days of Pass-over,” says Rabbi Yitzak Kogan, who heads Moscow’s main Lubavitch synagogue, and whose son was tasked by President Medvedev with serving authentic dishes to the visiting Israeli premier.While Orthodox Christians bake their own traditional fare at Easter, Russia’s 223,000 self-identi� ed Jews (2002 census) will, from the April 19 start of the Passo-ver, break the bread of ages that is matzo to mark the

Jewish � ight from Egypt. Since Mikhail Gorbachev’s perestroika reforms of the mid-Eighties, the religious life of the Jewish population has risen from the ashes, and with it, openly baked matzo from the oven. Mass immi-gration to Israel and the US

after 1991 delayed the full revival that came with the economic turnaround in the early 2000s. But today, the Russian capital is home to 15 synagogues, up from just two during the Soviet era.Passover rites were among rare pieces of cultural herit-age passed down within the Jewish community in Soviet times, note stalwarts of the faith. “When I was a child, people would go to (Mos-cow’s) Choral Synagogue, which was the only one func-tioning,” says Rita, Rabbi Kogan’s secretary. “We’d line

up on a huge staircase with our own sacks of � our, and at the top, Jews would be making matzo in silence.” At the tail end of the Stalin-ist repressions, families still came together for the two � rst nights of the Passover and for the forbidden bread. The bolder ones would in-vite guests, despite the lin-gering danger of arrest.“My family welcomed eve-ryone who wished to hear the Hebrew recitation of the Ex-odus from Egypt – during Passover, the door stayed open all night, something that was still a danger in the Fifties,” recalls the Yiddish-speaking rabbi, who sports a long white beard and the traditional black hat of the Lubavitch Hasidim. Today, Rabbi Kogan’s syna-gogue, which is located a few hundred yards from the Kremlin, welcomes 800 peo-ple for the Passover meal. The Choral Synagogue receives around 1,000 people on the holy day, somewhat to the dismay of more fastidious worshippers who insist that much has been lost. “It isn’t a good thing, really,” Yitzak Lifshitz, the head of the syn-agogue’s kosher food service, says of people congregating at the building – rather than people’s homes. “The Passover celebration is a family event, representing an essential occasion for con-veyance between parents and children, where the parents explain the history of the Jewish people. These days, many people have forgotten how to celebrate it, which is why they come here.”

Matzo in Moscow: the religious rite that Stalin couldn’t break

In the past, the baking of matzo endured strict repression

MASHA FOGELSPECIAL TO RUSSIA NOW

Actress Darya Ekamasova graduated from Moscow's prestigious Academy of Theatre Arts (GITIS) in 2007 and now divides her time

between filming and treading the boards of with Teatr.doc.

Do you feel you are a part of New Drama?I joined the movement not long ago. Everything started when I acted in Boris Khlebnikov’s film Free Floating [2006], the screenwriter of which was [New Drama director] Alexander Ro-dionov. I made new connections with extremely talented people. I’m very aware and stay in tune with the movement – it’s excit-

QUESTIONS & ANSWERS

‘A living, breathing, misunderstood process’

True grit causes a real stir on the contemporary stage

While Russia’s Christians bake their Easter fare, the Jews break the bread of ages that is matzo

ing work for an actress.Is it more stimulating to act in a New Drama play than in a big Moscow theatre production?For me, the most important thing… is the text. I have a vo-racious appetite for interesting and complex roles. Unfortunate-ly, they’re rare.Who are your favourite play-wrights at the movement?My favourite authors are Kuro-chkin, Ugarov, Durnenkov, Gremina, Rodionov and Bondar-enko. Something deep is emerg-

establishment. “Politics doesn’t interest me,” Ms Vo-rozhbit says awkwardly. Then, after a pause, she ac-knowledges: “A part of me feels ashamed for not writ-ing on this subject. In fact, without having really dis-cussed it between ourselves, I think we consider the topic too dirty to mention.” The idea seems paradoxical, given New Drama’s fearless treatment of taboos (at least in Moscow’s theatres), such as drugs, prostitution and ho-mosexuality. Yet despite – or perhaps because of – the oth-erwise risque subject matter, a loyal audience is growing, and wider recognition may be in the wings.New Drama has established its presence at an astonish-ing rate of one to two new productions per week, car-ried out with absolutely zero � nancial backing but with a growing con� dence that the movement has broken through. The Golden Mask bestowed on Zhizn Udalas would seem to say so. “The Golden Mask festival is a showcase for the big state theatres, but they still gave us the best award last year and some nominations this year,” says New Drama au-thor Mikhail Ugarov. “This recognition from them is a clear signal that New Drama is penetrating the mainstream. We are the main-stream now.”

directors ignore it? “Theatre must be contemporary. The-atres are suffocating under the old plays, but they slam the door in our faces,” thun-ders Marat Gatsalov, an actor and one of the movement’s leading directors. Mr Gat-salov directed this produc-tion of Zhizn Udalas, and the highly acclaimed Odds and Ends before it. “Contemporary” is a word that reappears like a leitmo-tif with this breed of play-wright. After a March per-formance of her play Mixed

Feelings, Ukrainian drama-tist Natalia Vorozhbit offered her de� nition of New Drama as “people who write about the contemporary world with a contemporary outlook and language. We are not afraid of provoking. Our writing must be emotional.”

Reluctant politicsDon’t go looking for politics in most of these dramas, however. The Magnitsky play is more the exception than the rule. In spite of the dis-sent at the core of the move-ment, its writers so far reject open confrontation with the

Playwrights with razor-sharp tongues and a hunger for realism are charting new territory

Orthodox Easter cuisine in Russia keeps pace with the liturgy’s potent symbols of resurrection: the triumph of light over darkness, and the return of spring. During Holy Week, Russians bake a light, dry traditional Easter cake, called kulich, and colour and decorate hard-boiled eggs, and take it all to their parish church for a Pas-chal blessing. Together with a rich, creamy moulded curd cheese, spiked with spices, candied fruit and citrus zest called paskha, these are the fundamentals of the Easter meal that is served right after a lengthy Church service. It culminates in the joyful East-er greeting “Xristos Voskres!” (“The Lord hath risen!” )to which the faithful respond, “Verily, He is risen!”As an American living in Mos-cow, I remember my � rst Rus-sian Easter as a frantic hunt, not for eggs and chocolate, but for bakeware. Although I now have a sizeable arsenal of pots, pans, dishes and other baking paraphernalia, none

Easter Russian Orthodox dishes test an expat chef’s mettle

of them is suitable for Easter confections. I wanted to do it right and produce a real ku-lich cake that was tall and cylindrical with a slightly puffy cap, and a paskha using an authentic trapezoidal mold called a pasochnitsa. In Russia, sourcing things never comes quite as easily as it does elsewhere. Figur-ing the pasochnitsa would be the harder of the two to run to ground, I started my search there. I prowled supermarkets and specialty kitchen stores to no avail. I checked the farmer’s markets and found

nothing – but got lucky with some local knowledge. Since the primary ingredients of paskha are cream, curd cheese, or tvorog, eggs, and butter, I threw myself on the mercy of the rosy-cheeked ladies who peddle these items at the mar-ket. “Try the churches,” they advised. I’d got the scent, and after a detour to my three local churches and the Danilovsky Monastery gift shop, I head-ed strait towards the source: the Sofrino Ecclesiastical Store in the city centre, where you can buy anything and

everything to do with the Rus-sian Orthodox Church, from a slim two-rouble candle to a 13m-rouble marble baptis-mal font. There was one pasochnitsa there and I held my breath as four priests cut in line in front of me (apparently they can) to stock up on holy water and wedding crowns. But I was in luck and, pasochnitsa in hand, I skipped down the stairs and into the street.The kulich tin proved even more elusive. The church store didn’t have them, so I trawled the aisles of department stores and supermarkets, finding tube pans, charlotte molds and baba cups that were all too short or the wrong shape. Back at home, I burst into tears of frustration.“What’s wrong?” asked my Russian husband. Hiccupping slightly, I explained that, thanks to my lack of a kulich tin, Easter would be ruined – completely ruined. To my surprise, he burst out laugh-ing before disappearing into the pantry and emerging, still chuckling, with four metal tins of various sizes full of to-matoes, coffee, beans and pickled mushrooms. “Kulich tins,” he said. I dried my eyes and let out a chuck-le of my own.“Verily, kulich tins.”

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Crumbs of comfort: the traditional kulich Easter cake

Baking should be a piece of cake in this modern age of kitchen appliances – but you try conjuring up a crumb-perfect kulich this Easter...

JENNIFER YEREMEEVAFOR RUSSIA NOW

ing from them. Most of all, I ap-preciate plays where the writer doesn’t try to overdo it with airing dirty laundry… It seems that some writers compete to see who can use the worst lan-guage, the foulest expressions, etc. There’s a branch of New Drama that is going in that di-rection and it's not for me.Can you define New Drama?It’s an entirely new movement that still doesn’t have a well-de-fined scope. The only clear defi-nition is that it doesn’t have a kopek to its name. Beyond that, it’s a living, breathing and large-ly misunderstood process.

Find kulich and paskha recipes at www.rbth.ru

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Video atwww.rbth.ru