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 birth of a green activist

Sail away: Russian rules the waves

Brave campaigner fights for her forest

Former banker catches yachting bug in Britain

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The Public Chamber, which brings togeth-er state and civil society representatives, launched an online project to crack down on superficial spruce-ups of towns before visits by government ministers.The project, Dear Old Potemkin Village, a reference to the fake Crimean settlements set up to impress Catherine the Great in 1787, encourages users to submit videos of hasty and costly makeovers. Blatant cases would be publicly investigated and win “anti-awards”, the chamber said.

The main building of the Bolshoi Theatre in Moscow, closed for reconstruction since 2005, is to reopen on October 17. “The Bolshoi Theatre is a symbol, not just for Moscow, but for the whole of Russia,” First Deputy Moscow Mayor Vladimir Resin told Rossiskaya Gazeta. “Therefore, for the builders, of whom there are 3,200, it is a matter of honour to keep their word and finish construction on time and without any setbacks.”The work will provide 50,000 square me-tres of extra space. The refurbished thea-tre will have a new backstage area, extra foyers and cafés, and underground storage premises for scenery and props. Details will include restored tsarist insignia, embroi-dered silk tapestry and new panels to im-prove the acoustics.

Costly makeovers face public ridicule

Bolshoi Theatre to reopen in October

PoliTiCS & SoCieTy

last of the NomadsReindeer herders lament their vanishing way of life

The human rights activist Oleg Orlov has been cleared of slandering the Chechen pres-ident Ramzan Kadyrov.Mr Orlov, the head of the Memorial human rights group, was charged with defamation last July after he publicly accused Mr Kady-rov, a former separatist rebel, of being behind the murder of the campaigner Na-talia Estemirova in 2009. Ms Estemirova recorded hundreds of cases of alleged abuse against civilians by paramilitary forces in Chechnya.Mr Kadyrov’s lawyers said they would ap-peal against the Moscow court’s ruling, which Mr Orlov hailed as a sweeping tri-umph. “It is a victory for everyone, for jour-nalists and the whole of civil society, be-cause I defended in court the right to freedom of expression,” he said.

Activist Orlov is cleared of slander

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Cruel sea: HMS Belfast on convoy duty. ice on deck threatened to capsize the ships

For Tim Elkington, a former RAF Hurricane pilot, the gruelling voyage to and from Murmansk to bring aid to the beleaguered Soviet forc-es is as memorable today as his combat with German planes in northern Russia. The Arctic winter brought thick ice, while sea spray would freeze on the decks of the British ships that brought his fighter squad-ron to Russia in September 1941, slowing the convoys to a vulnerable crawling pace.“The ice made you top-heavy: you had to keep chip-ping the stuff off to keep yourself from capsizing,” says Tim, 90, one of the few surviving members of the huge war effort in which 5,000 tanks and 7,000 air-craft were delivered to the Soviets, not to mention 15 million pairs of boots, among the four million tons of vital supplies sent to the Allies.

Brothers in arms rememberedArctic convoys Britain’s aid in aircrew, weapons and supplies honoured

The partnership between Joseph Stalin and Winston Churchill was never easy, given the latter’s vehement opposition to the Bolsheviks. But when Germany invaded the USSR on June 22, 1941, bringing to an end the 1939 Molotov-Ribbentrop non-aggression pact between the countries, the two men began working together.In a radio address on the day Adolf Hitler’s forces in-vaded, Churchill expressed his sympathy for the Soviet people, saying that though “no one has been a more consistent opponent of Com-munism than I… Any man or state who fights against Nazism will have our aid.” Within weeks, British naval convoys began steaming through the enemy hunting grounds on the Arctic sea route to Murmansk and Archangelsk, skirting Nazi-occupied Norway and fight-ing a relentless battle against the elements. Convoys mov-ing in the winter months had to navigate in perpet-ual darkness, while those travelling in the summer were highly visible and ex-posed to sustained and co-ordinated attacks from war-ships, U-boats and the Luftwaffe.

on the 70th anniversary of the german invasion of the Soviet Union in June 1941, Russia Now pays tribute to the vast British effort to supply the Red Army in the harshest of conditions.

PAUl DeANspecial To Russia now

Reflected glory: The Sukhoi Superjet 100 debuted in Paris this month, producing at least a dozen new orders

A fatal plane crash, Krem-lin rumblings about drastic steps to modernise fleets op-erated by regional carriers, and a flurry of orders for new aircraft have thrust Russia’s aviation industry into a patch of intense turbulence. Debates about the correct course for the sector’s growth intensified at the Interna-tional Air-Transport Forum held in Ulyanovsk in April. Participants heard upbeat forecasts that Russia could corner 10pc of the global market by 2025. They also heard the president of the Partner for Civil Aviation Foundation, Oleg Smirnov, railing against “all these bankers who now run our industry” – a comment evi-dently aimed at the Aeroflot chief executive Vitaly Save-lyev and the oligarch Alex-ander Lebedev, a stakehold-er in several airlines.Then on the evening of June 20, a Soviet-built Tupolev Tu-134 airliner crashed on a road near Petrozavodsk in the north-western Karelia region while attempting to land in heavy fog, leaving 47 people dead. In their preliminary findings, investigators blamed pilot error rather than technical failure, although a formal conclusion has yet to be an-nounced. However, President Dmitry Medvedev promptly ordered a study of whether

PAUl DUveRNeT AND DMiTRy RoDioNovRussia now

Russia’s aviation industry, which has been in transition since the Soviet collapse, is back in the headlines – for reasons good and bad.

Superjet cleared for take-offAviation air-crash investigation gets under way as the next-generation airliner is unveiled in paris

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Tuesday, June 28, 2011Distributed with

In London last year, the then Russian ambassador Yury Fedotov presented awards to Arctic convoy veterans on HMS Belfast, an escort cruiser that served on the convoys and is now a per-manent exhibit on the Thames. “It’s impossible to overesti-mate the role played by Brit-ish sailors to provide vital supply routes across the Arctic,” Mr Fedotov said. “The sailors are still remem-

bered in Russia for their bravery and self-sacrifice.”A total of 1,400 vessels plied the route in 78 convoys be-tween August 1941 and May 1945; 101 ships were lost. Belfast’s own sister ship, HMS Edinburgh, was sunk near Murmansk. The first convoy was carry-ing a very special cargo. By September 1, 550 pilots and ground crew from No 151

Parents with three children or more will be given free plots of land in an attempt to reverse the decline in Russia’s population.The measure was introduced in an amendment to the na-tional Land Code signed by President Dmitry Medvedev in mid-June. It said: “Citi-zens with three or more chil-dren will be given free par-cels of land held in state and municipal property, includ-ing for the purpose of indi-vidual house construction.” The size of the plot will be decided by local govern-ments, although in some re-gions it has been set at up to 1,500 square metres.In an address to the nation in November, Mr Medvedev outlined a range of propos-als aimed at supporting fam-ilies with many children, and helping to reverse the decline in the population of 142.9 million (2010 census), down from 145 million in 2002.

Society Bid to boost population

As the number of childless couples grows, parents are being offered an incentive to defy the Soviet stigma surrounding larger families.

“We have started seriously tackling the demographic problem and have launched a long-term programme,” the president said. “But we should understand that the next 15 years will see the effects of the demographic downturn that we suffered in the early Nineties.”Families used to receive so-called “mother’s capital,” a cheque for £8,100 issued on the birth of the second and third child.But despite incentives for bigger families, willing par-ents still face Soviet-era stigma, with several children being seen as a way to win a “free ride” from the state.

Bigger families to be given free land

iNNA leoNovAspecial To Russia now

Birth rights: the size of the plot will be decided locally

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Medvedev looks beyond Europe in St Petersburg

since 1991, according to the Rosaviatsia civil aviation au-thority. “[In doing this] we will instantly ruin dozens of air companies,” said Vic-tor Gorbachev, head of the Airport Association, a pri-vate lobbying group work-ing to develop civil aviation in Russia. “This is the main aircraft for domestic regional flights; there’s not much else to fly on,” he added.

order book grows Meanwhile, Russian manu-facturers came away from the Paris Air Show this month with a dozen new orders for the new Sukhoi Superjet 100, an aircraft that is hoped to win favour among interna-tional carriers, and which could potentially replace the Tu-134.Production of the Superjet, together with the larger Tu-polev Tu-204, is seen as a key

and its larger modification, the Tu-154, have been the re-liable workhorses of Soviet and Russian civil aviation since the Sixties, with more than 800 planes built. The plane that crashed was built in 1980.The president’s comments were a cause for some con-cern, since 90 Tu-134s are still in operation with many of the regional carriers that have sprung up in Russia

the ageing aircraft should be withdrawn from service en-tirely - while stressing that this was nothing to do with the crash. “In the case of scheduled flights, it might be the right thing to ensure they [the Tu-134s] do not fly any more starting from next year,” he said. The Kremlin’s own air fleet also includes the Tu-134.The twin-engined aircraft,

factor in determining the sector’s future. The Super-jet, the first Russian plane to be developed entirely in the post-Soviet era (and to use a large number of for-eign components, including a French-made engine), marked an important mile-stone last month after it suc-cessfully completed its

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02 most readPolitics & society Ban on EU vegetables: the cucumbers of discordhttp://rbth.ru/13049

Russia now www.rbth.rusection sPonsored by rossiyskaya gazeta, russia distributed with the daily telegraPh tuesday_june 28_2011

Several years ago, the name of Evgenia Chirikova, a res-ident of the Moscow Region town of Khimki, was known to few people outside her circle of friends and family. She was a thirtysomething, focused on her children and her career.Ambitious by nature, she earned three college degrees and ran a small business with her engineer husband, and had no interest in pol-itics. “I didn’t think it was possible to change anything, so politics seemed a sense-less endeavour,” she says.Ms Chirikova, now 34, could pass for a student in her jeans and T-shirt. She doesn’t look like a person who com-mands the attention of a broad spectrum of opposi-tion parties and movements. Yet a metamorphosis from suburban working mother to one of Russia’s best-known activists occurred after Moscow city govern-ment decided to bulldoze the forest by her house to build a highway to St Petersburg.She became interested in the forest’s fate after the birth of her second daughter: “Suddenly I had time to look around, and I realised that while I was working and paying taxes, somebody else was using that money to destroy my habitat.” Ms Chirikova gathered local residents together and spoke out in favour of rerouting the highway; ecologists later came up with 11 alternative routes. Bureaucrats reacted to this initiative with bewil-derment, while many local

activism Developers of the Khimki Forest highway project – and the authorities – discover something is stirring in the woods

residents were suspicious: an international multimil-lion-dollar project had never been stopped by a forest be-fore. “The Khimki adminis-tration didn’t understand what we wanted,” she ex-plains. “‘If you want to live in the woods,’ they said, ‘go to Siberia.’”

no future in fearBut the activist did not re-alise what she was getting into: “I was so naïve at first. I thought this highway must be some mistake.” During the conflict over the Khimki Forest, 10 activists were injured by unknown assailants. Ms Chirikova,

too, received anonymous threats, but she refused to give up. Some people thought she must be crazy; others thought that she was an aspiring pol-itician trying to make a name for herself, or suspected that she had a commercial inter-est in the deal. “It’s the bu-reaucrats who turned me into an opposition leader,” she says. “I became a citizen very late, at 30.” She and her husband Mikhail own two companies special-ising in the electromagnetic protection of equipment. Mikhail manages both com-panies while Evgenia does the PR. While she is used to

the threats on her life, if she’s afraid, she doesn’t show it: “Every time [someone was beaten up], I said to myself: ‘One more time and I’ll run away.’ But you can’t spend your life running away. If we’re afraid, then we’ve lost.” Her many exchanges with bureaucrats, who told her that the highway was a fed-eral project and therefore not subject to change, did nothing to increase her confidence in the powers-that-be. “I grew up fast,” she says. Prime Minster Vladimir Putin, who, as president, had shifted the construction of a new oil pipeline further from

Voice crying in the wilderness becomes chorus of disapprovalgrowing outrage at both environmental damage and the erosion of civil rights has bred a new type of activist – and one who wins votes.

Vladimir ruVinskyrussia now

Lake Baikal, approved the construction of the highway in 2009. That same year Ms Chirikova, with the opposi-tion’s support, ran for mayor of Khimki on a single plat-form – the rerouting of the highway. She came third, but the wide range of beliefs among her supporters shows that there is a demand in Russian so-ciety for specific problems to be solved, says Alexei Mukhin, head of the Centre for Political Information. “That’s why traditional op-position movements, afraid to switch from slogans to ac-tions, are losing popularity,” he adds. The fight for Khim-ki Forest ended in a decision to narrow the route from 600m (1,970ft) to 100m (328ft), and prohibit com-mercial construction either side of the highway. Today, Ms Chirikova pins most blame for the destruc-tion of the forest not on Rus-sian bureaucrats with “their sleepy views of ecology”, but on foreign construction part-ners in the project.

influential ally One of the people who doubt-ed Ms Chirikova’s chances of success was Alexei Nav-alny, a lawyer and blogger who has made his name fighting corruption in state companies. Several years ago, he was a member of the liberal party Yabloko, and worked on a committee to protect Muscovites. “People came to me complaining about the construction of a highway in Khimki,” he says. “My answer then was that it was senseless to get in-volved. They would put to-gether an initiative group and then all be beaten up. Now I see how wrong I was.” Today, he is an active sup-porter of the Khimki move-ment, and helps members make sense of the competi-tions to build the highway, in which, according to Elena Panfilova, head of the Rus-sian branch of Transparency International, “corruption is a large component”.Like Ms Chirikova, Mr Na-valny became famous through actions rather than words, defending the rights of minority shareholders in

large state companies. He and she are the same age; neither is affiliated with any political party; both prefer to work independently as ac-tivists, attracting supporters from across the political spectrum. They are a new kind of op-position in Russia, orientat-ed toward solving real prob-lems, says Nikolai Petrov of the Moscow Carnegie Cen-tre. “If with Evgenia it’s the transformation of a civil po-sition from a private protest, then Alexei targets political activity at the outset,” he said. Ms Chirikova “didn’t plan to go into politics; she was pushed into it by the local authorities,” says Mr Mukhin, adding that both she and Mr Navalny “have the image of a popular lead-er responding to public despair”.

The pair are now ready to share their experience. In June, they participated in a four-day workshop in the Khimki Forest that attract-ed more than 3,000 people of divergent political per-suasions. The workshop be-came known as “Anti-Seliger”, in reference to the annual meeting of pro-Kremlin youth group Nashi at Lake Seliger in the Tver Region. The Khimki work-shop succeeded, says oppo-sition politician and partic-ipant Boris Nemtsov, because it drew people of different views and from different walks of life. Ms Chirikova says the goal of Anti-Seliger was to cre-ate a dialogue between dif-ferent political and civil forc-es, and to “give Russian citizens real knowledge about how to defend their honour, dignity and rights in this country”. The organisers intend the workshop to be an annual event.

evgenia chirikova found a new identity for herself – and others like her – by giving voice to a local grievance

blogger alexei navalny, left, was sceptical of opposition to the khimki project; now he is one of ms chirikova’s key allies

Until he was 16, Sasha was a child of the streets. His fa-ther died young and his mother was an alcoholic. He lived at several orphanages and stopped going to school, and finally fell victim to the bottle himself. In the spring of 2007, Sasha joined the two-year Street Children programme for homeless children and teen-agers, launched in St Peters-burg with EU funds. He moved into a centre operat-ed by the Doctors for Chil-dren charity which secured the backing and devised the programme. Doctors, psy-chologists and teachers began to work with Sasha and he was soon back in school. He became interested in art pho-tography, and entered St Pe-tersburg State University of Cinema and Television.Sasha is now in his third year at the university and living with his grandmother, after the centre’s workers put him in touch with her.The EU spent €300,000 (£267,000) under this pro-gramme, providing help for more than 1,600 orphans and homeless children. In the end, most of the children were en-rolled in schools. Some teen-agers have found jobs, and almost 100 children have been adopted or returned to their biological parents. Denis Daniilidis, spokesman

ngos new funding initiatives on the agenda for orphanages

as the eu reduces financial assistance for charity programmes, it is helping them team up with private funds and russian donors.

for the European Union del-egation in Russia, described the Street Children pro-gramme as one of the EU’s most successful projects in Russia. “If the municipal ad-ministration or any other local body takes this project over after the money from Brussels runs out, it will be an achievement,” he said. The good news is that the St Pe-tersburg government took over funding and the project is still going strong.

euro well runs drySince 2002, the EU has fi-nanced more than 70 projects for children and people with disabilities in Russia. Yet the cash is drying up, the spokes-man said. In 2002, the EU spent €9m on 39 projects in Russia; €3m on eight projects in 2009; nothing in 2010; and

then just €2m on people at risk this year.There are several reasons for the shrinking financing. First, the Tacis programme came to an end in Russia in 2006. Since its inception in 1992, Tacis had been the EU’s main channel for supporting re-form in the former Soviet re-publics. “Russia used to be seen as a developing coun-try, which accounted for the significant budget,” accord-ing to Mr Daniilidis. “Now, Russians have to solve their problems themselves, which is why we are winding up our projects.” Looking ahead, the needs of charities in Russia may be overshadowed by the turmoil in north Africa in recent months. The European Com-mission has earmarked this region as a funding priority.

But while well-received, the European funding alone can-not radically improve the sit-uation in Russia. So the del-egation is helping local funds to find non-governmental partners in Europe. “Today, we are focusing on networking; we want to help get people together, instead of just paying ourselves,” Mr Daniilidis said.

Private partnershipsMore and more Russian non-governmental organisations are finding private sponsors in Europe. For instance, an international programme of-fering scholarships to gifted homeless children has been in place in the Pskov region since 2006.It is being run jointly by Eu-ropean and American donors, who are providing cash for

98 children to pay their way through top schools.Staff at the Pskov branch of the Russian Children’s Foun-dation also help care for the stipend winners. Tatyana Bo-drova, deputy director, who has worked with orphans since the early Nineties, says the foundation never got any direct help from the EU, re-lying on private sponsors from Austria, the Nether-lands and Sweden. “Like any public organisation, we have an opportunity to take part in EU competitions – win-ning them and getting funds, or losing and remaining emp-ty-handed,” she said.“Even so, we prefer to estab-lish direct contacts with Eu-ropean organisations and we have many such partners”. Along with Finland, Germa-ny is one of the main char-ity providers in Russia. Psk-ov’s children are also supported by sponsors from Moscow, St Petersburg and other Russian cities. Russian money is hard to come by, however. “Though Russian businessmen – who are our potential sponsors – have recently been topping the Forbes list, it is much more difficult to get cash out of them,” Ms Bodrova said.However, ordinary Russians are also now more concerned with civil society problems, said Irina Yasina, an econo-mist and member of the pres-idential Human Rights Coun-cil. The numbers of charity institutions and sponsors are rising by the year. In the early 2000s, the Open Russia Foundation was, in fact, the only one to provide educational support for dis-abled children. “Only five years ago, it was as if these children did not exist, even for charity institutions,” Ms Yasina said. “And now, wheel-chairs are being bought, and programmes have been put in place to teach orphans the basics of their future life. “In other words, there have been huge changes in recent years, and we are getting closer to Europe in this respect.”

Children’s charities learn to find different partners as EU money runs out

Private virtue: a german foundation provides funding for this orphanage in Pskov

soPhia izmailoVa special to russia now

It’s easier than it was to get a Russian visa, but delays caused by consulates “over-doing the formalities” are still putting visitors off, the tour-ist industry says.Russian tourists spent more than $26bn (£16bn) abroad last year, the Russian Tour-ist Industry Union (RST) says; foreign tourists in Rus-sia spent just over $8bn. Last year, Russia hosted two mil-lion foreign tourists; while 12 million Russians travelled abroad.“Inbound tourism in Russia is growing more slowly than globally on average,” says Yuri Barzykin, RST’s vice-presi-dent. “The average inbound tourism index in the world in 2010 was almost 7pc, but just 2pc in Russia.”The Russian Tour Operators’ Association says fewer peo-ple are visiting from coun-tries that have traditionally provided the largest number of holidaymakers. Although overall tourist numbers in Russia increased by 5pc in the first quarter of 2011 com-pared with the same period last year, the number of vis-itors from leading countries has dropped: from Finland by 24pc; Germany 19pc; the Netherlands 17pc and Spain and France 16pc.Tour operators mainly blame current visa rules and the de-lays in processing documents for entering Russia. “The de-cline in the number of tour-ists is observed in the coun-tries where our consulates

travel Bureaucracy still keeps europeans out of russia

are overdoing the formali-ties,” says Irina Tyurina, RST press secretary. Another deterrent for would-be visitors to Russia is a shortage of modern cruise ships, tourist coaches and in-formation in foreign languag-

es. But operators reject the frequent claim that Moscow hotels are much too expen-sive. “That everything in Rus-sia is too expensive and that there is no infrastructure is a myth,” says Sergei Voitov-ich, director general of Svoi TT, an official representative for Bedsonline in Russia.“Most of the tourists coming to Russia buy the Moscow-St Petersburg tours, both cit-ies with excellent four-star and five-star hotels. Hardly

a week passes without new foreign-brand hotels open-ing; their quality is quite up to global standards. Over the past five years, a total of 850 motels have opened in St Petersburg alone”.Yet despite the wealth of his-toric sites and comfortable hotels, the Russian tourist market also suffers from poor promotion. “Almost all other governments contribute to promotion by paying for the publication of catalogues about their countries. They often pay extra to the tour operators who organise char-ter flights to the country, and for the seats that they have failed to sell in order to keep up the flow. Russia does noth-ing,” says Ms Tyurina. But Russian tour operators are now trying to get the gov-ernment involved. This month, the Russian Tourist Industry Union wrote to the Foreign Ministry proposing the setting up of a working group to address the future of tourism in Russia.

Visas: the biggest tourist trap of all

with their watermarks and holograms, russian travel visas are tough to forge — and can be tough to obtain

delays in issuing visas and poor promotion of russia as a destination are blamed for disappointing tourist figures.

inna leonoVaspecial to russia now

every time [someone was beaten up], i said to myself: ‘one more time and i'll run away.’ But you can’t spend your life running away. if we're afraid, then we’ve lost

Despite the wealth of historic sites and comfortable hotels, poor promotion holds back tourism

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03most read Russia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_june 28_2011 politics & societySurrogacy: posthumous grandchildren

http://rbth.ru/13047

Lena Sarteto’s puffy, rough-skinned hands are a flurry of activity. As water boils over the fire in the centre of her teepee, Ms Sarteto, a nomad with the Nenets in-digenous people of western Siberia, is cooking a feast for her guests and her family of five. She chops up dark red pieces of jerked deer meat, peels a huge silver fish, and places pieces of dry bread and biscuits on plates that she stores in a wooden sled. Her floor is the grass beneath her feet; fish bones and scales litter the room around the fire. The fish bones will stay there when they move on.Ms Sarteto is in a hurry. In a few hours, her nomadic group of about 10 families -

tribal people Nenets reindeer herders fight to keep their traditional way of life as their north-western Siberian homeland is transformed by the gas industry

nenets reindeer herders are struggling to protect their nomadic heritage as state-owned gazprom transforms the tundra in the search for gas.

still called Brigade No 5, their official name from So-viet times – will push further into the North. They herd their 3,000 reindeer to the shores of the Kara Sea, reach-ing that part of the Arctic Circle in August. Then they turn around, fleeing the frost and returning their reindeer to the grass and moss of the warmer tundra.It is an age-old cycle, but one that these families know is increasingly under threat.The Yamal Peninsula is also home to Gazprom, the huge Russian energy company that supplies natural gas to much of Western Europe. And as Gazprom pushes into the pe-ninsula it has brought the kind of development — road, rail, and pipelines — that is transforming the tundra into a landscape they are increas-ingly failing to recognise. The Nenets have in recent years been introduced to asphalt highways, rusty metal, wire and drilling towers. In short, Russia’s wealth appears to

be cut out of the tundra that they once called their own.“The fish tastes dead; we feel sick after drinking water out of the lakes; our reindeers get stuck in wire loops or trip over pipes, break their legs and die,” said Ms Sarteto. Then she repeats a line like

mantra: “We are the last gen-eration to lead a nomadic life; our children will live in towns, without tundra.”The Yamal Peninsula con-tains the Bovanenkovo gas field, a vast tract containing about 4.9 trillion cubic me-tres of natural gas that Gazprom expects to begin pumping next year. Drilling towers have begun to dot the horizon. And to help exploit the valuable gas resource, a

new 325-mile long railway opened last year.Many of the 13,000 nomads left on Yamal Peninsula fear they will be forced into per-manent settlements - a life-style change the government is encouraging, but which is dreaded by a people who have long forged their iden-tity as travellers across the tundra’s expanse. No one knows exactly how many hundreds of years the Nenets have kept the same yearly rhythm that always keeps the reindeer ahead of the biting frost.“Our research shows that the biggest fear that nomads have is not global climate change, but the fear of being pushed out of the tundra,” said Vladimir Chuprov, who is a spokesman for Green-peace Russia.During a recent camp break, men exercised by lassoing deer while women put up the teepees, or mya, as the Nenets call their homes. The rein-deer provide the skins for the

pery insulation material. It was a goodwill gesture, in-tended to ease the migration route to pasture for the Nenets, that failed. Tradition-ally, different Nenets groups moved across the Yamal Pe-ninsula along defined corri-dors, and Ms Sarteto’s route leads into the heart of the gas field.A spokesman for Gazprom said the company was at-tempting to share the land with the tribes and act as a benevolent neighbour, but gets little thanks. “No matter how hard we try to help them – provide trans-portation, pay them salaries for what they historically did for free, build bridges over the pipes, or build schools and kindergartens for their children – the Nenets still complain,” said Andrei Teplyakov, spokesman for the company’s Yamal operation.Indeed, there is a long list of Gazprom efforts that could be read as improvements for the nomads in what is called

anna nemtsovaSpecIal to ruSSIa Now

the Yamalo-Nenets Autono-mous Area. The company pays salaries to the Nenets tribesmen for herding or to Nenets women for looking after their families. Lena and her husband receive about $2,500 (£1,500) per month, a decent income in this part of Russia. Every summer, Gazprom helicopters fly to the nomads’ camps to pick up more than 2,000 Nenets children and take them to boarding schools in Yar-Sale, the capital.But Lena Sarteto says she would live without the cash in return for an untouched tundra, her family around her. She turns to the family’s wooden idol, resting on a piece of fur, and places it out-side. The divinity it repre-sents is not supposed to share the house with strangers, a promise increasingly difficul-ty to fulfil. Ms Sarteto repeats her prayer, as futile as it seems: “Let Gazprom leave soon, and Yamal become only ours again.”

they have bare earth floors, endure extreme temperatures and are always on the move. but the nenets are not impressed by gazprom’s ‘improvements’ to their homeland – or its money learning the ropes: a youngster tries out his herding skills

tented love: the nenets claim their tundra life is vanishing

out on a limb: the yamal peninsula in north-western siberia

‘we are the last nomads. our children will live in towns’

teepees, fabric for clothes, and food.This is not the first assault on their way of life. The So-viet Union attempted to force the Nenets into a form of col-lective farming. They split various tribes into Kolkhoz brigades, and obliged them to pay reindeer meat as taxes. Thousands moved into towns in Siberia, and the Nenets struggled to maintain their traditions. Their activists see the latest government at-tempts to settle them as a re-newed assault. “We are little people,” said Yezingi Hatya-ko, a 61-year-old elder. “We have no deputies to speak out for us in parliament, no oli-garchs to give us money for our legal defence.”As Lena Sarteto’s Brigade No 5 moved north they had to cross two paved highways, a struggle for the reindeer – 300 per family – and young families with a few dozen wooden sleds. A team of Gazprom workers had cov-ered the Tarmac with a slip-

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nomads still live on the Yamal Peninsular, despite decades of state attempts to resettle them in towns and cities.

trillion cubic metres of natural gas awaiting extraction by Gazprom from the peninsula’s main gas field.

dollars of state funds are paid to the Sarteto family per month. They would give it up for an undisturbed tundra.

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we have no deputies to speak for us in parliament, no oligarchs to pay for our legal defence

education along with parents and teaching professionals, president Medvedev has stepped up the campaign to address falling standards

when a textbook gave a false version of evolution, parents angered by falling standards took demands for reform right to the top.

“Over time, apes waded into water more and more often, further and further away from the shore, learning how to swim and to dive for food. They developed an erect pos-ture. For some yet unknown reason, some apes resumed their way of life on land, while others became so adapted to life at sea that they remained there forever and turned into dolphins.”This version of the origin of man from a recently approved civics textbook for fifth-grade pupils prompted some par-ents to write a letter to Pres-ident Dmitry Medvedev com-plaining of the incompetence of the Education Ministry.The parents’ frustration was echoed by some of the teach-ers: “Some dubious subjects have recently been introduced in the curriculum. This rub-bish takes away time from the main disciplines. It’s no won-der the quality of education

is declining,” said Sergei Raisky, a Russian language teacher in Moscow. Mr Raisky, 41, is considered young com-pared to his colleagues: the average age of a schoolteach-er is 48, and one in every five teachers is past the retirement age. Young people do not want to work as teachers because of the low pay, an average of $480 (£300) a month.Critics say that Russian schools are steadily deterio-rating, partly due to the age of teachers and underfund-ing of schools at all levels. The big shock came when a re-cent Programme for Interna-tional Student Assessment (Pisa) survey ranked Russia – a country once known for its education prowess – 43rd in the world. Pisa is an inter-nationally recognised student assessment for 15-year-olds carried out by the Organisa-tion for Economic Co-oper-ation and Development (OECD).After the Pisa survey results were announced last Febru-ary, President Medvedev an-nounced a programme for school reform. “Pupils will be involved in research projects and creative activities so they

can learn how to invent, un-derstand and assimilate new things, express their own thoughts and make decisions,” he said.

giving schools a choiceThe Government is prepar-ing full-scale school reforms which will introduce individ-ualised learning. Reforms in primary and secondary schools (grades 1-9) will begin in September. Some teaching

will be done outside the class-room: students will be given 10 hours a week for tours, walks and creative work in places of cultural interest. The government has also prom-ised a 30pc increase in teach-ers’ salaries this year. But re-forms at high school (grades 10-11) are still in the design phase.“The school will have more power to form its own cur-riculum in accordance with

the students’ wishes,” said Irina Abankina, director of the Institute of Education Studies at the Higher School of Economics National Re-search University.The pupils will choose a total of six additional subjects and decide whether they want to study them at the basic or professional level. There should be at least four in which the pupil will pass the Unified State Examination.

The applicant will then be ad-mitted to university based on these results.Accordingly, a student who is not interested in the natural sciences will not be forced to study chemistry, physics and biology separately, and will be able to opt for an integrat-ed natural sciences course that includes a more general study of these subjects.

in europe’s footstepsThe reforms, designed to bring Russian school education in line with the European model, have caused a public outcry, as many parents feel they are an attempt to destroy a clas-sical general education.

“But the standard for high school assumes that basic subject knowledge already ex-ists,” Ms Abankina said.Supporters of reform have also targeted the system for teaching foreign languages. Languages can at present only be mastered properly at spe-cial or private schools. At most public schools, students study a language, usually English or German, twice a week. But they learn by focusing on grammar and memorising texts, forsaking conversation-al language, say critics.“In recent years, our schools have offered only knowledge and not education. The result was a rampage staged by na-

Schools report: must try harder, say educators

a new generation of russian children enters a school system facing radical change

alesya lonskayaSpecIal to ruSSIa Now

tionalists in the centre of Mos-cow last December,” said Al-exander Kondakov, a research adviser to the state on edu-cational standards. He said that Russian schools were still authoritarian, but he also pointed out that there was a difference between now and 20 years ago. After the collapse of the Soviet Union, Russia began teaching the works of dissident writers and alternative views of the coun-try’s history. However, the teaching system remains the same: lectures and repetition of what the students have been told by the teacher. Disagreement with the teacher, or any kind of in-classroom debate, is still perceived as insolent.“The [contemporary] school is less authoritarian than the Soviet school, but a partner-ship model of teaching where-by teacher and pupil act as equals has not yet arrived,” Ms Abankina said. “The teach-er has lost authority and has to deal with rudeness in class, and he has yet to learn how to organise teamwork in the classroom, where an interest in teaching and learning is reciprocal.”

how the system worksTuition at Russian schools is free, as are textbooks. Parents pay only for school uniforms and meals (this applies to 48,809 state-run schools, while the number of private schools in the country is just 665). Children start school at seven, and the academic year lasts from September 1 until the end

of May, with winter, autumn, spring and summer holidays. To enter a higher grade, pupils take set tests, and after the senior grades 9 and 11 they sit the Unified State Examination in Russian language, maths and two elective subjects that are required to enter their university of choice.

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04 MOST READ It’s time to take the brakes off the Russian economyhttp://rbth.ru/13059

RUSSIA NOW WWW.RBTH.RUSECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA DISTRIBUTED WITH THE DAILY TELEGRAPH TUESDAY_JUNE 28_2011Business & Finance

� rst commercial � ights with the airline Armavia. The air-craft is also due to go into service with Aero� ot. “We es-timate the market volume to be more than 800 planes,” said Mikhail Pogosyan, the United Aircraft Corporation president, who oversaw the Superjet launch.The consortium of compa-nies that builds the Superjet already has 170 orders on its books – from Russia, the CIS and Latin America, Mr Pog-osyan added.But the mood over the Su-perjet’s launch has been clouded by comments by Igor Levitin, the transport min-ister, regarding potential compensation for Aeroflot (the largest buyer with 30 or-ders) after repeated hold-ups in delivery and, in particu-lar, following disappointment over higher weight and lower energy efficiency than had been claimed.The position taken by gov-ernment-owned Aero� ot on the largely federally funded Superjet programme “reduc-es the appeal of the product in the eyes of potential buy-ers, and could lead to state money being spent in vain,” said Maxim Pyadushkin, an air transport expert.None the less, the latest or-ders placed at the air show at Le Bourget were by the Italian air company Blue Panorama and the Indone-sian carrier Sky Aviation. Media reports after the event also suggested that the US airline Delta was also con-sidering placing an order.

Sector unrestThe situation is more criti-cal for the Tu-204, a medi-um-range plane capable of carrying 210 passengers. Having flown for the first time in 1989 and resembling the Boeing 757, the aircraft is having difficulty reinvent-ing itself, given that only 69 have been built in 20 years.An order for 44 aircraft from

the airline Red Wings was supposed to kick-start pro-duction, but that deal has been in doubt since late April.With further upheavals like-ly in the sector, the Ulyanovsk International Air-Transport Forum in April did see some

key issues aired. One bone of contention is how the in-dustrial logic of concentrat-ing production in one area clashes with the political drive to maintain employ-ment levels in many loca-tions. For example, despite

the international composi-tion of the Superjet, the fac-tory responsible for its � nal assembly is in Komsomolsk-on-Amur, almost 4,000 miles east of Moscow.But forum participants also struck an optimistic note. Mr Pogosyan said the consorti-um of Russian and foreign manufacturers involved in the project would build 30 Superjets in 2011, up from just seven last year, and that the number was expected to peak eventually at 50-60 a year. He also said he hoped that, with the help of the gov-ernment aviation industry stimulus programme, Russia could take a 10pc share of the global civil aviation mar-ket by 2025.The government programme is focused on three aircraft, the � rst being the Superjet.

The second currently in de-velopment is the MS-21, a medium-range aircraft with a capacity of up to 212 pas-sengers, based partly on the

Tu-204. With commercial op-erations due to start in 2016, Ryanair has shown particu-lar interest in the aircraft, ac-cording to Kommersant. The

third aircraft is a 300-seat plane aimed at low-cost carriers, which has been dubbed “Samolet 2020”, or 2020 Aeroplane.

Turbulent times for air industry IN BRIEFMANUFACTURING MAZDA AND FIAT TO MAKE 150,000 CARS A YEAR

TOURISM FRANCE TAKES $1BN CHANCE ON CAUCASUS SKI RESORTS

ENERGYRUSSIA AND NORWAY MAY ISSUE ARCTIC LICENCES

Russia and Norway may start granting licences to develop offshore deposits in the Barents Sea and the Arctic Ocean in 2013-14 under a bilateral sea border agree-ment, Russia’s Natural Resources Ministry said.The Russian-Norwegian agreement on delimiting the sea border and co-operation in the Barents Sea and the Arctic Ocean will come into force on July 7, 2011. A ministry spokesman said the agreement offered new opportunities for the oil and gas industry in the northern

regions. The spokesman’s comments came after bilateral talks on the prospects of geological works in the area.The two countries intend to set up consortia to develop promising offshore deposits. The consortia will face severe environmental condi-tions, a shortage of infrastruc-ture and various technological problems. The ministry is working out the legal terms of shelf development regulation, and trying to improve the tax regime for raising investment in shelf projects.

Mazda of Japan and Italy’s Fiat have joined the influx of carmakers into Russia with investments worth $80m (£50m) and $1.1bn respectively. Elvira Nabiullina, the econom-ic development minister, said Fiat would make 120,000 cars a year, Russia Today re-ported. The agreement is under the “new regime” of incentives for foreign manu-facturers, although the rules say they must make at least 300,000 vehicles a year. Car-makers can bring parts into Russia duty-free if they lo-

calise 60pc of production by 2020. They must also invest a minimum of $500m.Mazda will operate under the current regime, which specifies annual production of 25,000 cars using 30pc locally made parts. It will produce up to 30,000 vehicles a year in the Primorsk region. Jaguar Land Rover has also indicated it will set up a plant in 2012 . According to the analysts Avtostat, car production in Russia is forecast to grow from 1.8m vehicles in 2010 to 3m in 2014–15, mostly in co-opera-tion with foreign companies.

French companies have signed a £1.2bn deal to install ski-lift equipment at new resorts in the conflict-prone North Caucasus region.The deal, which was signed at the St Petersburg Interna-tional Economic Forum ear-lier this month, marks the first major foreign participation in the $16bn (£10bn) North Caucasus investment cam-paign that President Dmitry Medvedev announced in Janu-ary, just days after a bombing

organised by North Caucasus insurgents killed 35 people at Domodedovo airport, Moscow’s busiest. The infrastructure work will be delivered by French investors, while the Russian state will add financial security to the package. Two French companies have signed up to the project, but the high threat to security meant the Kremlin had to pro-vide funding guarantees in case terrorist attacks stop the project going ahead.

World Trade Organisation membership, visa wrangles and Russia’s warming to China and the US rather than the EU were the main themes of the Kremlin-sponsored St Petersburg International Economic Forum .Attended by a weighty line-up of political leaders and leading executives from the international business com-munity, the forum underlined the Kremlin’s main foreign policy initiative: promoting a multi-polar world. The EU will undoubtedly be disap-pointed with its low pro� le at the meeting in terms of ini-tiatives and deals. A comment by BP’s chief ex-ecutive Bob Dudley highlight-ed Europe’s difficulties. He told delegates that his com-pany’s deal to explore the Arc-tic with Russia’s state-owned Rosneft ‘‘was in everyone’s in-terests” – at about the time that Rosneft announced it would � nd another partner.One of the main messages coming out of the meeting, held on June 16-18, was that Russia was disappointed with Europe, and was working to-wards closer co-operation

Economic forum Russia seeks closer links with US and China and makes joining WTO a priority

Despite continuing dependence on trade ties with the EU, Russia is increasingly signalling that it has other options.

with the US and China. Eu-ropean leaders were invited to the forum as honoured guests, but the presence of China’s President Hu Jintao was a reminder of Russia’s ever closer ties with its eastern neighbour.President Dmitry Medvedev said in his keynote speech: “The global financial crisis created big � nancial imbal-ances in a number of coun-tries, including in Europe and the United States. New bub-bles can form in almost any market, as we have seen clear-ly; and, with the global � nan-cial system the way it is, when

responsible for the lack of any results at the Russia-EU sum-mit in Nizhny Novgorod on June 9-10, where WTO acces-sion and visa requirements topped the agenda.The two sides are so far apart on the visa question that they cannot even agree on a date to start discussions on what to do. The deadline to start talks about introducing a visa-free regime between Rus-sia and the EU was delayed again to the end of July.Nor was there any movement on the EU’s stance towards Russia’s membership of the WTO, which is a pre-condi-tion for talks on a badly need-ed new Russia-EU basic agreement. Without the ac-cord, Russia’s prospects for joining the trade club before the end of this year are less favourable, despite the opti-mism of both the Kremlin and commentators.And little progress was made in the Partnership for Mod-ernisation: the European In-vestment Bank and Russia’s state-owned Vnesheconom-bank only signed a memoran-dum of understanding to mu-tually consider funding projects that are part of this programme with up to €500m (£445m) from each side.Lack of progress in visa talks with the EU was thrown into relief by an announcement on the � rst day of the forum by the US ambassador to Rus-sia, John Beyrle. The diplomat said a new agreement to give citizens of Russia and the US three-year multiple-entry visas had been agreed – a signi� cant easing of rules and an important gesture.“Three years is just the � rst step,” Mr Beyrle promised delegates to the forum.

Relations with EU cool as visa and trade talks stall

Strides of sorts: talks on visa-free travel to the EU foundered but the US agreed a deal

BEN ARISBUSINESS NEW EUROPE

they burst, the whole world feels the effects. “There can be no doubt as to Russia’s continued integration into the global economy. We have no choice here.”While closer integration with Europe, by far Russia’s larg-est trade partner, remains im-portant, Mr Medvedev stressed that joining the World Trade Organisation (WTO) was Russia’s top priority for ex-ternal trade relations.“I think we can realistically complete the process [of join-ing] by the end of the year, if, of course, political games do not start up again,” he said.

The president blamed these “political games” for Russia’s long delay in joining the glo-bal trade club, but also took a sideways swipe at the EU for playing similar games, par-ticularly on the easing of visa requirements.“We seek to introduce visa-free travel with the EU and other countries, but much here depends on our partners. We are ready to demonstrate our goodwill on this matter by taking concrete steps,” Mr Medvedev said.The visa issue has become a sticking point in developing bilateral ties, and was largely

Russia’s decision to lift its grain export ban has led to fears of shortages at home and of falling prices for European farmers.The ban, which ends on July 1, was imposed in August 2010 following the rampant wild� res and drought that caused a substantial de-crease in the country’s grain yield, and threatened a shortfall in Russian agricul-tural production. With exports due to resume imminently, Sergei Ignatiev, chairman of the Central Bank, has proposed solving this problem in part by in-troducing export a tempo-rary duty on grain. Support-ed in his initiative by the Ministry of Economic De-velopment and the Ministry of Agriculture, Mr Ignatiev is convinced that introduc-ing duties is the only way to curb in� ation and maintain steady supplies of the food-stuff on the domestic mar-ket. “Export duties should soften the in-� ationary effect from the lifting of the ban,” the central banker said. Foreign producers and con-

Agriculture Ignatiev tries to calm fears as exports resume

As Russian grain exports resume, foreign producers fear prices could fall, but experts say an international shortage is inevitable.

sumers are also concerned about the resumed supply of Russian grain to the inter-national market. The in� ux could affect grain prices in Europe and on the stock market, and since the mar-ket has adjusted to the ab-sence of Russian imports, they now have no guaran-teed consumers. Since May 23, when Russia announced that it would lift the almost year-long embar-go, European wheat futures have dropped steadily. But Tim Hannagan, an analyst with PFGBEST in Chicago, does not believe that there is any cause for panic on the grain market. “Russia will not dump huge vol-umes of grain on the market,” Mr Hannagan said. “Last year it en-dured a genuine disaster, therefore a large part of the production will go to the domestic market.”

Russia was not expected to have a strong grain harvest this year, so there may be almost nothing left over to sell abroad, he predicted.The International Grain Council maintains that a shortage of grain on the world market over the com-ing year is inevitable. Ac-cording to the council, the world’s consumption of ce-reals this autumn and next spring will outstrip total glo-bal production by several per cent. Weather forecasters are also warning of the possibility of another unusually arid sum-mer, which could lead to an-other poor harvest.

Russia may face grain shortage as ban ends

NIKITA DULNEVRUSSIA NOW

Growing concern: Sergei Ignatiev has proposed export duties on grain to help maintain supplies

High flier: the Sukhoi Superjet 100 is at the forefront of ambitious plans for the Russian aircraft manufacturing industry

TYPE: SHORT-HAUL

PASSENGER AIRCRAFT

WINGSPAN: 91 FT

LENGTH: 98 FT

MAXIMUM TAKE-OFF

WEIGHT: 42.52 TONS

PASSENGERS: 98

CRUISING SPEED: 514 MPH

RANGE: 1,850 MILES

CONTINUED FROM PAGE 1

There are already 170 orders for the Superjet – from Russia, the CIS and Latin America

Who builds what for the Superjet?

Wikipedia’s Russian-language section is one of the largest, with over 720,000 articles, says

founder Jimmy Wales. President Medvedev “understands the internet... I’m excited about the future of innovation in Russia,” he adds.

Find more at http://rbth.ru/13067

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uk@rbth.rurbth.ru/letters

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05most read Russia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_june 28_2011 business & FinanceWhen to let go: state’s role in transitioning economies

http://rbth.ru/13022

stephen dalziel

specIAl to russIA now

russia’s leading com-panies are falling over themselves to invest abroad, strik-

ing deals from America to Africa in the past year. Rus-sian companies have always been keen on investing overseas, but have previ-ously tended to confine themselves to the countries of the former Soviet Union. Now, however, nervousness ahead of the forthcoming elections, combined with sound business practice, has caused the amount being invested abroad to soar: Russian companies invest-ed $19bn (£11.8bn) in other countries during the first three months of 2011. At the same time only $9bn of for-eign direct investment (FDI) came into Russia.Analysts were additionally disappointed as inward FDI into Russia was only $9bn in 2010 – less than half of the country’s outward FDI of $19.4bn.“The huge difference between the two figures suggests that Russia has to focus on improving its investment climate; it will be hard to attract more for-eign investment while Rus-sian business is actively in-vesting abroad despite the huge need for domestic in-vestment,” said Natalia Or-lova, chief economist with Alfa-Bank.Russia has been plagued by capital flight. The country lost hundreds of billions of dollars to offshore havens in the Nineties, although once the economic boom started in 2000 much of that money returned. Since September 2008, however, the flow of capital has once again re-versed. In 2010, $35.5bn left the country, $22.7bn of this in the final quarter of the year. Those losses were fol-lowed by another $21.3bn in the first quarter of 2011, de-

and then start the whole pro-cedure all over again.If you’ve been a good boy or girl (ie, visited the UK on several occasions, and showed that you were ready and willing to go home again and not disappear into the English hinterland) you can apply for a two- or five-year visa. This takes 28 working days (in real terms, a month and a half).Now, if this procedure meant that fortress UK was protect-ed against an influx of unde-sirables, I would agree that, awkward though it is for hon-est visitors, it was worth doing. But in practice, the UK visa system serves more as a hin-drance to people wanting to do business than it does as a deterrent to the undesirables. And to make things worse, bureaucrats have a tit-for-tat mentality. So the harder it is

for Russians to obtain a Brit-ish visa, the greater the like-lihood that it will be more difficult for Britons to get a Russian visa. For once, I should be delight-ed if we were to take a leaf out of the Americans’ book. It’s high time that the bureau-crats realised the benefits that international business brings to the country and made the visa process simpler or – shock, horror – abolished it altogether. This, of course, is unlikely to happen any time soon. Apart from the fact that bureaucrats would lose their self-perpetuating jobs, it smacks too much of common sense. And that’s a commod-ity that’s all too rare in bu-reaucracies the world over.

Stephen Dalziel is executive director of the Russo-British Chamber of Commerce.

As an Englishman, I don’t tend often to quote our cousins from “across the

pond” in the United States. However, I gladly credit the inspiration for this column to John Beyrle, the US am-bassador to Moscow, who said at the St Petersburg Economic Forum: “Bureauc-racies are bureaucracies; businesses get things done”. Ambassador Beyrle was re-ferring to the mutual deci-sion by the US and Russian governments to ease visa re-strictions for their citizens visiting the other’s country. Soon, US and Russian citi-zens will be able to obtain three-year multiple-entry visas without even needing to get a letter of invitation. Marvellous. Are you watch-ing, United Kingdom Bor-der Agency?The matter of visas between the UK and Russia exercis-es members of the Russo-British Chamber of Com-merce more than almost any other. The process of obtain-ing a visa for Russia is bu-reaucratic but fairly straight-forward, especially if you go through an agency. There are some absurdities on the visa form, like “Give the tele-phone number of your uni-versity”, and a requirement to list all of the countries you have visited in the past 10 years; but on the whole the process is relatively quick and painless.Oh, but pity the honest Rus-sian businessman who wants to come to the UK. Even for the basic six-month visa, a Russian must apply to the consular sec-tion at least 15 working days before the visa is re-quired, and leave a passport with the application. If, in that time, you need to trav-el anywhere else, you have to retrieve your passport

uK red tape still a barrier to russian businessmen

london blog

moscow blog

ben arisspecIAl to

russIA now

election jitters prompt another cash exodus

spite the clearly improving macro-economic situation. Why is the money leaving? Clearly, domestic businessmen are nervous. In April, Andrei Klepach, the deputy econom-ic development minister, put on a brave face, saying that the government expects zero capital outflow over the course of the year. But in a May speech, presidential aide Ark-ardy Dvorkovich admitted that local investors were jumpy. Power in Russia is so vertical that any potential change at the top would cause huge disruptions in how the country is run, and business doesn’t like uncertainty. Oli-garchs and “minigarchs” alike are salting away a little some-thing in other jurisdictions, just in case everything blows up this winter. But unlike the capital flight in the Nineties, which was simply cash put

on deposit, this time Russians are buying foreign companies and, in the long run, this will actually be good for the econ-omy.The Kremlin is in the middle of a huge PR campaign to im-prove Russia’s image and at-tract more FDI, although Rus-sia doesn’t need the money. The country has plenty of cash thanks to the high price of oil, but it desperately needs man-agement skills and modern technology. FDI comes with these valuable assets. It doesn’t actually matter if the invest-ment is foreign firms invest-ing into Russian projects or Russian companies buying into foreign ones: at the end of the day, Russia still gets ac-cess to these valuable resourc-es, regardless of where they are located.

Ben Aris is the editor and publisher of Business New Europe.

unlike the capital flight in the nineties, wary russians are now buying up foreign companies

the uK visa system is more a hindrance to doing business than a deterrent to the undesirables

interview AlexeI uvArov

come on down for the £22bn share bonanzaprIvAtIsAtIon chIef promIses sell-offs In 1,300

stAte-owned compAnIes – If the prIce Is rIght

ben arisspecIAl to russIA now

as the sale of the decade looms, alexei uvarov, head of the ministry of economic development’s property relations department, explains how it will happen.

what is the goal of the privati-sation programme – to make money or to transfer business from state to private hands? A combination of the two: money and management. The federal budget is in deficit, but raising money is not the overriding goal of the programme. The privatisation will have a good effect on companies that become transparent and understandable to interna-tional investors, as they will be brought to the same high standards as those in the West. We want our com-panies to meet these high standards.

how many companies are being sold, and how much money do you expect to raise? This is a very large, three-year programme. There are more than 1,300 [companies] on the privatisation list, of which about 90pc are small- and medium-sized enterpris-es. These are companies that have ended up in government hands during the transition period of the past 10 years.

They are state-owned, but most of these companies are not big, and will only appeal to local business investors. Only the top 10pc on the list will interest international in-vestors. These are big, stra-tegic companies that we plan to sell off gradually through 2013, raising 1 trillion rou-bles (£22bn) in the process. This year, we expect to raise 200bn roubles (£4.4bn) by selling stakes in Sovcomflot and Sberbank.

how will these companies be sold? by auction, through ipos or from direct negotiation with foreign investors? and will you sell controlling packets of shares or offer the companies in smaller pieces?The method we use to sell the company will depend on the company itself; there is no universal recipe. The size of the packets will also depend on the company. For example, we could sell a controlling packet to a big foreign investor or sell them via IPOs in chunks with sub-sequent issues of shares.

Following the infamous “loans-for-shares” auctions in the mid-nineties, auctions have a bad name in russia. what can you do to ensure auctions are trans-parent and open to everyone? The auctions will be abso-lutely open and transparent.

We did not apply the proper rules to the “loans-for-shares” auctions. Actual privatisa-tion law envisages clear auc-tions, so that anyone who wants to can participate. All they have to do is pay the deposit.

while there are a few impor-tant companies on the list, won’t it be hard to sell most of them? For example, in may the attempt to sell murmansk port failed as there were no bidders. We expect that about a third of the companies will not be sold at the first attempt. If they are not sold at the first auction, then we will use a “Dutch auction” and try again [where the auction starts at a high price, and re-duces it until there is a buyer]. In 2010 and this year, we have sold most of the objects put up for auction, despite the failure of Murmansk.

what are the major companies on the list that will most interest foreign investors? In 2011, major companies to be sold include Sovcomflot and a 7.5pc stake in Sber-bank. In 2012, among the most important companies on the list are FSK, RusHy-dro, and another 10pc of VTB Bank. Sovcomflot is the one of the biggest shipping companies

in the world, and it already works to international stand-ards. It already has to com-pete with its international peers, so it is ready to be sold. We plan to sell a 25pc – minus one share – stake this year. Sovcomflot will probably be sold as an IPO, privatising its shares through the stock market. Later, we will sell another 25pc, and in 2015 we might sell a 25pc stake plus one or two shares.

some of these companies are extremely expensive. since the market has only a limited ca-

pacity to absorb offers of this size, isn’t there a danger of flooding it with shares?The valuation of some of these companies is very high and we cannot sell them all at once. We also understand that Russia’s privatisation programme is in competition with the privatisation pro-grammes being carried out by other countries.There is a lot of activity on the international markets at the moment, and investors have a great number of com-panies to choose from, but there are limited funds avail-

man with a plan: alexei uvarov says asset sales will go ahead, even if they result in dutch auctions

contenders for the 2011-2015 sale (prices in $bn)

public market cap For sale value timeline

vtB yes 34.9 25.5pc -1 share 8.7 2012-13

sberbank yes 77.1 7.58pc -1 share 5.8 2011-13

rosneft yes 76.1 25pc -1 share 19.0 2012-15rushydro yes 13.5 7.97pc -1 share 1.1 2012-13fsK yes 14.6 4.11pc -1 share 0.6 2012-13sovcomflot no 4 to 6 50pc -1 share 2 to 3 2011-13rshB no 3 to 5 25pc -1 share 0.8 to 1.3 2012-15united grain company no 0.5 100pc 0.5 2012-13

rosagroleasing no 2.4 to 4.8 50pc -1 share 1.2 to 2.4 2013-15russian railways no 48 to 66 25pc -1 share 12 to 16.5 2013-15

able. However, we believe it is possible to raise 1 trillion roubles in the course of the next three years.

some companies listed fall under the “strategic invest-ment law” that was passed in 2008 and excludes foreign in-vestors from some sectors. how will these companies be sold?Strategic objects can and will be sold to foreign investors. However, a state commission will review the sale. But there are only a few such compa-nies on the list, like Mur-mansk port. The deal will be reviewed by the commission, but the sales will almost cer-tainly be approved.

you have a schedule for the sales, but market conditions remain volatile. will you go ahead with the sales even when conditions are bad? Market conditions are im-portant as we don’t want to privatise objects irrespective of the price. We do want to sell these com-panies over the next three years, but we won’t sell them cheaply. Getting a good price is not the top priority, but we are not going to sell at any price, either.

m&a central Bank remains upbeat, while market fears loss of competition could lead to poorer service

personal wealth In the quest for a ‘loadsamoney’ lifestyle, one country stands head and shoulders above the rest

by the end of the year, russia will have only one stock exchange. government officials say the move will help make moscow a global financial hub, but traders are not convinced.

For the past 15 years, the MICEX (Moscow Interbank Currency Exchange) and RTS (Russian Trading Systems) have been fierce competitors. But, by the end of this year, MICEX will have swallowed its rival. The deal, in which roughly 35pc of RTS will be paid for in cash and the other 65pc exchanged for MICEX shares at a ratio of three to one, was scheduled to be signed in late June/early July. RTS has been valued at 34.7bn roubles (£768m), and supporters of the merger maintain that it will make the

Russian market more attrac-tive to foreign investors, who were put off by the system of two exchanges.The united stock exchange is expected to eventually launch an initial public offering (IPO), and also to attract in-vestors such as the European Bank for Reconstruction and Development (EBRD) and the International Financial Cor-poration (IFC), which will re-ceive some shares in the uni-fied exchange from Russia’s Central Bank.“The merger of RTS and MICEX, the creation of a united structure, raising its standards of corporate man-agement and holding an IPO, a quality IPO, will help in-crease the organisation’s cap-italisation and increase the liquidity of the Russian mar-ket,” said Alexei Ulyukaev, first deputy chairman of the Central Bank.Market players are, however,

sceptical about the plans for a merger. “The only way to attract Western investors is to raise the quality of the services we offer,” said trader Dmitry Belchenko. “And

development is impossible without competition.”“The only thing pushing the market to develop was the competition between MICEX

and RTS,” said Ana-toly Gavrilenko, chair-

man of the oversight commit-tee at the Alor Group of companies. “All new products appeared on the market

thanks to competition. The market worked fast because RTS had to compete with the developing MICEX market. The RTS market lived by mar-

ket principles.” In response, backers of the merger point out that the London Stock Ex-change has not been hin-

dered from developing by the absence of competitors

in Britain. Private traders are also ap-prehensive about impending changes in the trading sys-tem. They are frightened by the idea of creating a single market index, the possible raising of tariffs, and the pro-posed reduction in lines of products and services. At the same time, the heads of MICEX have so far said nothing about the specifics of the merger, and interested parties can only guess how the Russian stock market will look next year.

Traders sceptical over MICEX merger

good fit? opinion remains divided over the merits of amalgamating the two exchanges

trinkets for tycoons: gold-plated mobile phones are a must

anton makhrovrussIA now

there’s no beating russia for size, mineral deposits, ethnic diversity, or, as the figures show, opportunities to rack up a cool billion.

Russia may not be the rich-est or fastest-growing large economy, Europe’s largest, or even the economy that hosts the world’s most important financial centre, but it is still the best place to be if you want to become a dollar billionaire. The rate of return on invest-ment in Russia is among the highest in the world - for the well-connected or aggressive

risk-taker, that is. And over the past 15 years it was this large economy that offered the best odds of joining the big-hitters’ club beside the likes of Mikhail Fridman, Viktor Vekselberg and Roman Abramovich. There were no billionaires in Russia when the Soviet Union was dissolved in 1991. In fact, there were none until 1994, when the first business-men began to secure control over privatised property. “But since then, Russia has been churning out billionaires by the dozen every year,” says Jacob Nell of Morgan Stanley in Moscow. “Today, there are 101, according to Forbes

magazine, and no sign of the number slowing down any-time soon.” Between 2004 and 2011, Rus-sia produced one billionaire for every 1.87 million people, compared with every 2.29 million in the US and 4.13 million in Britain.

Who wants to be a billionaire?‘We do,’ says Russia’s rich list

tim goslingBusIness new europe

what are the chances?

Meanwhile, China, the dar-ling of the emerging markets, has produced one billionaire for only every 11.76 million people over the same period. Prospects are leaner still in Germany, where the number of billionaires has stood at 52 since 2004.

source: russIAn government, vtB cApItAl reseArch

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06 most readRussia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_June 28_2011comment & analysis Business moves beyond Moscow

http://rbth.ru/13018

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Yandex can Be a gloBal plaYer

fyodor lukyanov

political analyst

the debate on a joint European missile de-fence system that gained momentum

after the Russia-Nato Lisbon Summit in November 2010 has come to its logical con-clusion. On the eve of the meeting of Russian and Nato defence ministers, the alli-ance’s secretary general, An-ders Fogh Rasmussen, official-ly declined Russia’s idea of a “sectoral” missile defence and Russia’s demand for legal guarantees that the system would not target Russia. The same was said with total fi-nality at the meeting. The dis-cussion has thus been thrown back to the chronic phase in which it has languished for 10 years (the topic was broached by then defence minister Sergey Ivanov in the early 2000s). Does that mean six months of intensive talks have been wasted and the parties have simply been confirmed in their opinion that no strategic rap-prochement is possible? It would be odd to expect that close co-operation in such a supremely delicate sphere as strategic security would see a surge of progress after a se-ries of well-wishing but non-committal statements by the parties involved. Russia’s representative to Nato, Dmitry Rogozin, gave a graphic portrayal of the Russian proposal on joint missile defence as the mu-tual assistance of two knights standing back-to-back and fending off common enemies that appear before each one. A fine metaphor, but one that also explains the cause of the proposal’s failure: knights would not entrust their life and health to anyone unless they trusted each other utterly as they faced that common enemy.Relations between Russia and the United States (who have the final say on missile defence while Europe is merely an onlooker) have cer-tainly improved compared to three years ago. But the chal-lenge is not so much to es-tablish trust as to put an end to an anomalous state of acute mutual suspicion. That is admittedly not enough to warrant standing back-to-back. Nor has Moscow been seriously counting on it, as evidenced by the other pro-

THe MISSIleS MInd gaMe

Should ratification by all the Nato member states be re-quired, there are many mem-ber countries for which the whole point of the alliance is guarantees not for, but against Russia.As for the US Congress, any bill that would seek to limit American military reach – even if it is strictly verified arms reductions such as that agreed under Start – will have a hard time of it. In the case of missile defence, one can-not imagine any legislative limitations. Some US con-gressmen, like the majority of the public, are convinced that missile defence is a strictly defensive system, and there-fore no one has the right to demand from the United States that it renounce or re-duce its capacity. Others who see mutual as-sured destruction as the key principle of strategic stabil-ity, parity and interconnec-tion between offensive and defensive components of stra-tegic forces, believe that hav-ing a free hand is an inalien-able right of the United States and that America should not follow Russia’s lead.

igor ashmanov

it expert

posal that has been aired in recent months, namely con-cerning legal guarantees that the US system does not tar-get Russia. That is a horse of another colour. Back-to-back is not the same as formal non-ag-gression commitments – meaning these things cannot happen simultaneously but only consecutively, with a considerable time lag. First commitments and getting used to each other, and then somewhere a good distance down the road, sectoral mis-sile defence. But that leads to a vicious cir-cle, because neither side in-tends to assume obligations.

since the Yandex IPO triumph last month, there has been a heat-ed discussion in the bl-

ogosphere and media: about the stock options granted to its employees; the number of staff who became instant mil-lionaires and shareholders who became instant billion-aires; whether its stock will fall or rise. I am less interest-ed in the greed games or in how many start-ups Yandex’s newly rich will establish than in what Yandex is going to do with all that cash.Investment memoranda al-ways overflow with promises of unprecedented business de-velopment. So, in what areas can this web search engine boldly expand its business? In principle, maintaining a 66pc share of the domestic search market and unchallenged leadership on the Russian-speaking web is a worthy goal. There is a lot to be done here, of course, with e-commerce, mobile platforms, alliances and competition with social networks, digital TV, or geolo-cation services, to name just a few. But global expansion trumps them all. Today, real success must be global.So which direction can Yan-dex take outside the Runet, and what does it need to suc-ceed? Google dominates the global web search market. Search is the core of the Yan-dex business model, too, so any global expansion would mean taking on Google. This seems unimaginable: the glo-bal leader is much bigger in every possible respect. How do you compete with a rival that is, say, 50-fold bigger and better known than yourself? And one that owns what is generally considered to be a far superior global technol-ogy to boot?There are several obvious things to consider. First of all, the club of national search engines is very small. In fact, it is much smaller than the space exploration club – im-plying that web search tech-nology is more intricate than space technology. Fewer than 10 countries have a national web search engine, and in only five of them is the coun-try’s own search engine more popular than Google. Yandex is already a member of this small club, which makes it stand out.Second, Google achieved its leadership in most countries virtually for free – simply be-cause there was no national search engine there to start with. Wherever Google en-countered some sort of resist-ance (such as China, the Czech Republic, South Korea, or Russia), it had to take a back seat. There are, of course, mid-dle-of-the-road cases such as the cash-strapped Ukraine, which used to have its own web search engines (called Meta and Bigmir) and where Yandex and Rambler also made forays, yet Google still prevailed there.In most countries, however, Google came to fill a void. To some extent this void is still there because Google has made no special efforts to be-come localised in those coun-tries and has no incentive to do so. That is the beauty of its singular position – it does not even have to spend any-thing in order to maintain its leadership (except, perhaps, for keeping the languid Bing at bay).Analysis of Yandex’s success on the Russian web demon-strates that profound locali-sation has been one of its key strengths, including local lan-guage support and a rich local content (including maps, schedules, traffic, movies and news), ie keeping a strong focus on whatever is impor-tant for the local user. It may, therefore, be concluded that this model might work on

other local markets where Google has been formally lo-calised at the source code page level, but continues to offer what is essentially no more than a simple query box.For example, a close look at Asia’s web search engine mar-ket reveals that Google is used there for want of anything better. The average number of pages viewed by a Google user after submitting a query is often three or four, com-pared with one on the Runet or in the United States, which shows the low quality of the search results. There are rea-sons to believe the Arab world, Africa, Latin America and even Europe are not quite satisfied with the global search engine.Granted, deep localisation re-quires resources, such as staff, a local office, and cash. But Yandex does not need to start up everywhere at once. Even Google cannot afford to fight Yandex on each individual local market.So far as Google’s technolog-ical supremacy on the Eng-lish-language web is con-cerned, Yandex trails Google by 15pc on the English-lan-guage web in terms of the ag-gregated search quality indi-cator, but it is far ahead of all other English-language web players. Bing, for example, is only one third as good as Yan-dex.As for Google’s hardware supremacy, in the initial stag-es the number of servers or data centres had little bear-ing on the efficiency of index-

ation. Analysis shows that Yandex trails Google signifi-cantly in terms of recall (by two-thirds), while Bing and Yahoo are much worse off. That is where the IPO comes into play: double or triple your hardware to index no fewer English-language (or any other) web pages than Google does, and worry about the load later, when you achieve user numbers any-where near Google’s. But that would be an enviable prob-lem indeed.All in all, catching up with Google on key quality meas-ures is quite doable, even on the English-language web – not to mention the various national web segments.The real problem facing in-ternational expansion is mar-keting, not technology. How do you displace Google, the very synonym for web search, from consumers’ minds? In principle, the experience of IT security firm Kaspersky Lab (retail brand number one in Germany, the US, and doz-ens of other countries) shows that it is possible to take the fight with huge global rivals onto their own territory. The tools are available; all you need is effort, boldness, time, and money.In short, I believe that inter-national expansion should be the focus of Yandex’s devel-opment. Technological devel-opment, fighting for a share of the Russian-speaking web, or dabbling in mobile appli-cations are all fine, but you just cannot sit in your nation-al domain and wait to be swallowed up by your rivals. Attack is the best form of de-fence.

originally published inVedomosti

Igor Ashmanov is an IT expert and the founder of Ashmanov and Partners.

HappIneSS under wrapS

one day in spring, an acquaintance invit-ed me to attend an unusual event: a

practical psychology festival called Planet of People. The organisers explained that the festival’s main goal was to bring psychologists together with potential cli-ents. In Russia, the services of psychotherapists are not in great demand. The phrase “personal psychoan-alyst” is more associated with a Hollywood film than with real life. According to a re-cent opinion poll by VCIOM, when confronted with a dif-ficult situation, most Rus-sians prefer to go to friends, relatives or colleagues for ad-vice; or if worse comes to worst, they’ll solve the prob-lem on their own. Only 2-3 pc of the respondents said that they would consult a psychotherapist.Still, that last statistic is hard to believe, given the hordes of people who turned out for the practical psychology fes-tival. Although it’s possible that many were drawn by the free admission, because going to see a psychotherapist costs a pretty penny.There were so many inter-esting topics, I didn’t know where to look first. In cases

like these, it’s better to pick one thing, preferably some-thing global, such as a “dis-cussion about happiness”.I wasn’t the only one look-ing for happiness: 40 min-utes before the discussion began, the auditorium was jammed. I wiggled into the

svetlana smetaninajournalist

Finally, there are those who think that the outdated Cold War agenda should be scrapped, as nobody expects Russia and America to go to war with each other; that there are entirely different threats; and that one should let bygones be bygones. The insuperable dilemma is that Russian-American nuclear deterrence, of which the mis-sile defence is a part, is a leg-acy of a bygone era and makes no military sense today. It still makes political sense, however, because possession of the largest nuclear poten-tials still makes Moscow and Washington exclusive part-ners who must comply with the rules imposed by this in-terconnection. Attempts to remove it lead to a degrada-tion of relations bringing them to a dangerous line. America’s withdrawal 10 years ago from the 1972 ABM Treaty, which Russia initial-ly took in its stride, marked the first step towards bilat-eral destabilisation that reached its peak in the au-tumn of 2008. It is not by chance that the “reset” final-ly took off only after Barack

imise the damage from the lack of a result. That is, a for-mula must be found that would leave the door open for a continued dialogue while tempering expectations. The next challenge would be to formulate a new agenda apart from missile defence, indeed one reaching beyond the Eu-ro-Atlantic area. There is a consensus that in the 21st century the Asia Pa-cific region will be the main strategic arena. It faces the same problems of security and strategic stability that Europe once faced, but the balance of forces and the mentality of the actors are markedly different. Missile defence is a relevant topic there, too, but it must involve China and its concerns about US plans. The problem of Russian-American mutual deterrence will not go away, but in a different context lone knights may get new ideas.

originally published atgazeta.ru

Fyodor Lukyanov is chief editor of the magazine Russia in Global Affairs.

last free seat. The 40 people who arrived after me had to stand around the edges of the room. The discussion was led by Olga Troitskaya and Na-talia Tumashkova, both mem-bers of the festival’s organ-ising committee, and by Ekaterina Mikhailova, a pro-fessor at the Moscow Psycho-pedagogical University. Some people had come especially to hear them. “I attended their lectures a few years ago and liked them a lot,” the man sitting on my right told me. He had brought his girl-friend; she was about half his age, so his therapy sessions

must have done some good. Still, the moderators began by saying that they did not intend to dispense recipes for happiness. In the opinion of Ms Mikhailova, “The idea of raising happy people like broiler chickens is simply monstrous,” while the myth that says that if you do eve-rything right you’ll be happy is destructive. The audience was soon drawn into the dis-cussion – everyone had some-thing to say. Opinions were divided. One part of the au-dience maintained: “A per-son does not need to go out and look for happiness since

Obama renounced George W Bush’s plans to deploy na-tional missile defence ele-ments in Central and East-ern Europe.Even today, when the discus-sion on a joint missile defence is at an impasse, Washington’s current plans (phased deploy-ment of missiles and radar in Poland and the Czech Repub-lic) are much less feared in Moscow than the earlier plans, which at least gives breath-ing space for a mutually ac-ceptable trade-off. Months of diplomatic talks and expert discussions on the European missile defence system have not been wast-ed. Perhaps for the first time, an attempt has been made to discuss the technical pos-sibilities of a nexus between the systems as well as poten-tial common enemies. In other words, the conversa-tion has shifted from the “it cannot be because it cannot be, ever” phase to an “it can-not be, but why?” phase. Not bad for a first try. That lack of political readiness is the stumbling block is not sur-prising. The challenge today is to min-

catching up with Google on key quality measures is quite doable for yandex, even on the english-language web, not to mention the various national web segments

the insuperable dilemma is that russian-american nuclear deterrence, of which missile defence is a part, is a legacy of a bygone era, and makes no military sense today

as one professor argued, the idea of raising happy people like broiler chickens is simply monstrous

he already has everything in-side him.” Another part in-sisted: “If we knew from the beginning that we have eve-rything inside us, we wouldn’t do anything. But since we don’t know, we suffer many hardships in life and come to understand that this is happiness.” Russians imbibe this attitude with their moth-er’s milk, thanks to Russian literature. Happy people, as we know, are few and far be-tween in the Russian clas-sics. And if in the end a char-acter does find the happiness he or she deserves, like Na-tasha Rostova in War and Peace, then it comes only after all manner of physical and moral sufferings.I too wanted to ask the learned ladies a question: not a personal one, but in the name, so to speak, of all Rus-sians. I have long been dis-turbed by Russia’s consist-ently low rating (around 150th) on the international happiness scale. I wanted the opinion of professionals: are Russians really that unhap-py, or does this have to do with our tendency always to play things down? The experts all favoured the second explanation. “For a Russian to say to someone he doesn’t know that he is happy is equivalent to show-ing himself to be an idiot. We are complicated, after all; that means we must have

problems. Not to have them is almost indecent,” said Ms Tumashkova. She imagined that the ordinary Russian would probably answer the question of whether he was happy or not as follows: “Now, sir, let’s first define what you mean by happi-ness.” After that, the pollster compiling the international happiness rating would prob-ably check the box marked “deeply unhappy” and say goodbye. This fruitful discussion went on for two-and-a-half hours. And none of the people forced to stand left early. We were all too busy searching for the Russian formula for happiness. And we found it, as it always happens, com-pletely unexpectedly. The discussion had finally wrapped up and we were all getting up to go when a girl in glasses, evidently a student, suddenly exclaimed: “I’m so happy I had the chance to talk to such intel-ligent people!” Well, there you have it, Rus-sian happiness: an animated discussion about lofty mat-ters. And from this point of view the festival was a resounding success.

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

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07most read Second World War: a victory we can all agree onhttp://rbth.ru/12851 HistoryRussia now www.rbtH.ru

section sponsored by rossiyskaya gazeta, russia distributed witH tHe daily telegrapH tuesday_june 28_2011

Wing of the RAF arrived in Murmansk with 40 Hawker Hurricane fighters, the planes that, together with the Spit-fire, had won the Battle of Britain. Their objective was to provide immediate air defence against the Axis forces that had launched Operation Sil-ver Fox in the hope of cap-turing this vital port. They were also there to train So-viet pilots to operate the first of what would eventually total almost 3,000 Hurricanes de-livered to the Soviets.The huge scale of this aid was also a statement of Church-ill’s commitment to the alli-ance, as both pilots and planes were considered essential to Britain’s defence. “There’s no doubt that we were under pressure; we could have done with 40 Hurricanes going anywhere else but across the seas to Russia,” says Philip Wilkinson, chairman of the RAF-Russia association. “I think they sent a big signal. What got there was immedi-ately effective. They were sent into action on September 11, and on September 12 they shot down their first opponent. They provided an excellent level of cover.”No 151 Wing would eventu-ally claim 15 victories for the loss of just one airman in action. It patrolled the skies over Murmansk, escorting Soviet bombers and helping to halt Operation Silver Fox, one of the few failed Axis op-erations of 1941. When not flying, the pilots in-structed their Russian coun-terparts and found that the resident Soviet ace Boris Sa-fonov, who particularly en-joyed flying the Hurricane, had a few of his own ideas. “They re-engineered the guns, they couldn’t believe we were firing such low-calibre guns,” says Mr Wilkinson.

Aged just 20, Tim Elkington reached Murmansk on Sep-tember 1, 1941. While some of the squadron’s Hawker Hur-ricane fighter planes arrived in crates, others took off from the aircraft carrier HMS Argus. Before even touching down in Russia, the young air-man faced the challenge of taking off from a deck only 143 metres long. “The quoted figures for a Hurricane to take off were

120 metres minimum,” says Mr Elkington. Each flight of six aircraft was arranged two wide and three deep. With a Hurricane being 10 metres long, the lead planes were more than 30 metres forward. “So you’ve got 100 metres to take off in. One just followed the leader, and he made it. One plane did damage its un-dercarriage striking the rise at the end of the deck. Main-ly, we were glad that all the aircraft started.”Then there was the cold to contend with, and no guar-antee that even the hardy Hurricane would not suffer in temperatures lower than -30C. “A couple of aircraft ex-perienced engines cutting [out] at certain heights.”For all the tensions between Churchill and Stalin, the or-dinary servicemen quickly formed tight bonds. “Every-body was very friendly indeed; there was no silence or dis-trust,” says the veteran. “They were very keen to learn and work with us. I think in some ways they were more experi-enced than we were, and were considerably older than we were. The boss, Safonov, was

air power: Hawker Hurricanes of 151 wing shot down 15 enemy aircraft during their two-month deployment to murmansk

ramsbottom-isherwood: received the order of lenin

the soviet war memorial in southwark, london

continued from page 1

when the soviet people learnt of the nazi invasion in a radio announcement 70 years ago, millions stopped in their tracks in disbelief.

“At 4 o’clock this morning, German forces attacked our country without a declara-tion of war.” That was the an-nouncement Anastasia Polya-kova heard on the morning of June 22, 1941. “I was plan-ning to go to the sweet shop to stock up on sweets for summer camp,” recalls Ms Polyakova. “Then suddenly on the radio we heard there was to be an important announcement. I waited, listened, but I didn’t really understand, or rather I didn’t realise what had hap-pened. I went off to buy sweets. The store was jammed, others were stocking up.” The recollections of the few people who remember the day the Second World War came to Russia are surpris-ingly similar. Both soldiers and civilians wrote in their diaries about the ruby stars over the Kremlin, the mar-vellous summer sun and the famous announcement on the radio. Few could imagine that the horror of war, raging for nearly two years in Europe and Africa, had come to the Soviet Union.Kirill Dryannov, a military expert at Moscow’s Museum of Defence, says that despite ominous intelligence reports, the Soviet command learnt of the attack only hours be-forehand and had little time to prepare. Nevertheless, there had been signs that an invasion was imminent, such as attacks by German sol-diers in Soviet uniforms who cut off lines of communica-tion and killed officers. Early on June 22, they destroyed several bridges. Later that morning, 4,900 planes bombed airports and army depots.In that crisis situation, deci-sions were made by a single man: Joseph Stalin. Vasily Pronin, then chairman of the

ing. And indeed, we had barely sat down when Sta-lin said, ‘According to the re-ports of deserters, German forces plan to attack our bor-ders tonight. Is our air de-fence entirely ready?’ After a pause, he added: ‘Today is Saturday. Top workers are al-ready on their way to their dachas, detain whoever you can in the city.’”They had to act fast: on the opposing side was a man who was hell-bent on the swift destruction of their country. Adolf Hitler’s plan to attack

the Soviet Union involved the seizure of its European ter-ritory within 16 weeks – be-fore the onset of the first au-tumn frosts . Mil itary developments unfolded at lightning speed. The city of Brest fell on the first day. Six days later came the surren-der of Minsk, the Belarus-sian capital. The Soviets managed to check the Ger-man onslaught only in the autumn, just outside Mos-cow.The military historian Kon-stantin Korzhenevsky be-lieves that Hitler intended to use the conquered territories for elite housing for the fas-cist high command. But no servants would have to be hired for the Nazi leaders. Of the Soviet Union’s 190 mil-lion people, Hitler intended to kill 150 million and the rest would be made slaves for the invaders. According to Heinrich Himmler, head of the SS and overseer of the concentration camps, the Russian slave would have to know how to do only three things: count to 10 in German, write his name and know his master.“They were trying to con-vince people that this was a war against Bolshevism,” said Mr Dryannov. “In fact, the fascist ideologues, beginning with Himmler, were defend-ing a racial theory. They maintained that this war would be the last march on the East. It would destroy the Soviet Union as the only im-pediment to the world su-premacy of the Germans.” This information was circu-lated only among the ruling elite. But the Nazi air force also dropped millions of leaf-lets to Soviet troops urging them to surrender. Those who defected to the Germans were promised a “warm re-ception”, food and work.Meanwhile, young people across the country began re-ceiving draft notices the day after the invasion, and post-ers exhorted: “All for the front! All for victory! The enemy will be crushed! Vic-tory will be ours!”

Hitler aimed to kill 150 million and impose slavery after shock attack

muscovites discover they are a nation at war, june 22, 1941

pilots of the 46 taman female aviation regiment being briefed in the field

dmitry zaika russia now

Moscow Soviet of Workers’ Deputies (the equivalent of mayor today), remembers being summoned to head-quarters on the evening of June 21.He said: “Around 9 o’clock in the evening I was sum-moned to the Kremlin with my secretary. When we walked into Stalin’s office, several members of the Cen-tral Committee of the Com-munist Party were already there. Their faces were stern and frowning. We sensed that this was no ordinary meet-

Soviet propaganda claimed that the Nazi attack was unex-pected. Newly released archive documents prove that Stalin was warned about the threat, although it is unlikely that he knew the exact date. A recent poll by the Levada Centre shows that opinion is still divided, but slightly more people tend to dis-count the official version.

tHe polls

“ The war broke out when I was 15. I went to work at the Respirator

munitions factory in Orekhovo-Zuevo. They gave us worker ration cards which were good for 700g of bread a day. So I worked there and joined the Komsomol (Communist Union of Youth). On days off we were required to attend secondary education classes. Later, when we finished our studies, they said that a sniper school had opened. Many volunteered to attend it and I also went there, being 17 years old. That was in June 1943. I was the youngest at the school.”

“ There was a clubhouse in our village, where the local youth liked to

gather, play checkers, listen to recitals and so-on. On that Sunday morning we were in the backyard of the clubhouse: I was practising on the horizontal bar and my friend climbed a cherry tree. Because of the border zone, military planes never flew over the village, but at that moment we saw a Soviet plane flying very low right over the centre. At noon, they called a meet-ing and informed the villagers that we were at war. I remem-ber that it was a bolt from the blue for me. All of the women including my mother began crying, while the young men of the village got worked up with enthusiasm. All being patriots, we immediately set out for the military enlistment office.”

tHe Quotes

Klavdia KaluginascHool pupil, moscow region

ivan ZabolotnyscHool pupil, odessa region

When Nazi forces swept through the Soviet defences 70 years ago, Luftwaffe raids destroyed hundreds of planes clustered together on a hand-ful of airfields, destroying much of the Soviet air force before it even had a chance to fight back.Most of the fighter pilots waiting on the sidelines were inexperienced, and as their numbers also proved insuf-ficient in the fierce battles of the second half of 1941, Radio Moscow made a remarkable announcement that was probably the first of its kind: a call for women who want-ed to be “combat pilots just like the men”.The response was over-whelming. Bruce Myles writes in his compelling book, Night Witches: The Amazing Story of Russia’s Women Pilots in World War II (1990, Academy Chicago Publishers Ltd): “As the win-ter of 1941 continued into the dark days of 1942 and the Soviet counter-offensive around Moscow started, young women from the un-occupied territories of the Soviet Union – from as far

while soviet men fought the germans in 1941, women also took to the skies, as deady and committed to victory as their male counterparts.

away as Central Asia – ar-rived in the capital.”They were schoolgirls and factory workers who had won wings in their local fly-ing clubs, and now they wanted to fly fighter planes in the Great Patriotic War against the Germans. It is a chapter of Second World War history unknown to most people in the West. Women poured onto Moscow’s Push-kin Square, often after long rail journeys, arriving in the hope of seeing air combat against the Nazis. Within a year, entire regiments of So-viet women pilots fought the invaders, and inspired fear in the Germans, who called them the Night Witches.Many writers find themselves drawn to Lilia Litvyak, a So-viet fighter pilot in the Sec-ond World War, who faced enormous challenges during her heroic tour of duty. Born in Moscow of Jewish descent, she joined a flying club at the age of 15, and devoured every book on aviation, Myles writes. She was such a fast learner that she flew solo on the PO-2 biplane after four hours of lessons; she later be-came a flight instructor.Flying under the call sign White Lily, Litvyak faced much chauvinism, her col-leagues recalled. Like most women, she needed a cush-ion on the seat to see out of the windshield. Yet her sor-ties against the Germans

have become the stuff of leg-end: the figures vary, but she is credited with up to 12 solo kills. Litvyak died in 1943 when her plane was shot down as she attacked Ger-man bombers in Ukraine. She was 21.M.G. Crisci, an American businessman and writer, has recently made Litvyak his life’s work. He collaborated with Yelena Sivolap and Val-entina Vaschenko, founderof the Lilia Litvyak museum, on a book, Call Sign, White Lily (2011). The self-pub-lished work is a journey through her life, romance, re-bellion, heroism and death. Crisci created the Lilia Litvyak Fund to help pre-serve the museum. Through his interviews and research, Crisci said it was clear that “Lilia’s worst nightmare was that she could be shot down, and die as an unknown soldier”. But historians, journalists and writers have been drawn to her story, from Myles’s book to Reina Pennington’s Wings, Women and War : Soviet Air-women in World War II (Modern War Studies, 2007). Litvyak’s story keeps evolv-ing as new writers pick up the torch, but it is not easy to reconstruct her life and death. Her success in com-bat is not disputed, howev-er, and sheds new light on the possibilities of women’s role in the military today.

night witches: women pilots the nazis feared

nora fitzgeraldspecial to russia now

convoys gave soviet union a lifeline

the airmen quickly formed tight bonds. everybody was very friendly; there was no silence or distrust

winston churchill saw muscovites eating ice creams in the snow and said: "these people will never be defeated."

was the attack unexpected?

exceptionally good.” Safonov became the first Soviet ace to claim 30 kills, but would die within a year, shot down while defending a British convoy off Murmansk.For their efforts, four pilots in 151 Wing would become the only Britons in the Second World War to receive the Order of Lenin, among them New Zealand-born Wing Com-mander Henry Ramsbottom-Isherwood, who later served in Burma.After escorting Soviet bomb-ing raids and also claiming 15 kills to just one loss in ac-tion, 151 Wing were given or-ders to prepare for the voyage home in late November. The Hurricanes were turned over

to the newly trained Soviet pilots, and the British airmen set sail.“Most of the hardship was in that return journey,” Mr Elk-ington recalls. “The weather going out wasn’t too bad, but coming back it was absolute hell. It was difficult to main-tain reasonable speed in the fog banks. We were down to five knots, which makes you very vulnerable, and it was eternal darkness. It was quite dismal. We were stuck in the ice for three days. You would move a few metres and it would freeze again. It was so thick you had to watch out for stowaways, they’d walk across the ice [from land] and let themselves in.”

archives shed light on stalin’s defence strategy On the eve of the 70th anniversary of the outbreak of what Russians know as the Great Patriotic War, the For-eign Intelligence Service (SVR) declassified archive material for the years 1938-1941.It includes dispatches from Western diplomats, among them an analysis of Kremlin foreign policy in the pre-war years prepared on Septem-ber 27, 1941 by the British am-bassador to the Soviet Union, Sir Stafford Cripps. The docu-ments show Joseph Stalin was warned in advance of Germa-

ny’s plan to attack the USSR. They also make clear that several European countries did not object to Moscow signing the Molotov-Ribbentrop pact with Germany in 1939. Cripps notes: “There is no doubt that the immediate rea-son for the signing of this pact was, as the Soviet leaders have often said, their desire to keep out of the war…] In my opin-ion, the Soviet leaders never considered this pact anything more than a temporary means. The Soviet leaders were full of determination to use any op-

portunity, while there was still time, to strengthen their defences, to strengthen their strategic positions in case of war with Germany.”The first step was sending Soviet troops to Poland in September 1939, “immediately after learning that the only alternative would be the total occupation of Poland by Ger-many ... however, the USSR did what other countries were unable to do: it used the time it won through ‘appeasement’ to strengthen its forces of resistance”.

More veterans’ memoirs: http://english.iremember.ru it

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“Don’t dare ask a Russian how things are going for them. You’ll find yourself sat in some cafe several hours later with the strong impression that you could easily become their biographer.”

“The kaleidoscopic speed of change in Russia since 1991 got us used to the idea of not planning for more than a month, or even week, ahead.”

I have seen all kinds of ho-tels. In Florida, there are un-derwater suites; you can spend a night in the trees in Turkey; sleep underground in a coal mine in Sweden or in capsules at a Japanese train station; in a disused church in Scotland or in a former prison in Slovenia. But sleeping at the North Pole was unique. The Russian Arctic ice base Barneo doesn’t even have an address. Every year for more than 10 years it has appeared on the map for just 40 days, from the end of March until early May. Several tents and an airstrip � oat on the ocean currents, causing the co-ordinates on a GPS screen to change every second. The drifting camp is the northernmost hotel in the world. It is the only shelter in the expanse of the Arctic Ocean for polar explorers, scientists and a mixed bag of tourists who want to play at being polar explorers and

A £8,800 stay in a tent on an ice floe is an unlikely dream holiday. But there are plenty of takers...

touch the ever-moving top of the Earth. Visitors to this un-usual refuge are never sta-tionary, moving this way and that on the current, even when standing on the spot, trying in vain to tell east from west when all directions lie due south. And the endless polar day ensures that there is no sunrise or sunset.

On thick iceAs the organisers tell it, � nd-ing a suitable ice � oe to host the Barneo camp sounds sim-ple. Two bases are set up in

early March, the � rst at 87 degrees north and the second closer to the Pole. Fuel and an ice reconnaissance group are � own in and the search for a large and solid ice � oe begins. The � oe’s coordinates are reported to the support team in Murmansk, which then sends a plane with trac-tors. An airstrip is cleared and a commission comes from

Krasnoyarsk to grant approv-al, before the personnel are brought in and construction of the camp starts.

Pole position For most visitors to Barneo, the base is not the climax of the trip; it is just a tempo-rary stop for several hours or days before and after the main event, the conquest of the North Pole. Tourists are delivered here from the mainland by plane. From the airstrip, the jour-ney to the Pole is made by skis, dogsled or by parachut-ing from a helicopter. Every year Barneo plays host to hundreds of amateur and professional polar explorers as well as celebrities and the plain curious. Prince Albert II of Monaco visited the Pole in 2006. A few days before this writer’s arrival, Prince Harry left the camp. During his trip, a half-metre-wide crack opened in the middle of the runway, severing the air link to the outside world. Fortunately, the ice plates re-joined within two days. Oth-erwise, the camp organisers would have had to build a new runway on the nearest suitable ice � oe.

And the price of this adven-ture, sleeping in tents – some-times in snowstorms – and in temperatures of -30C, to using outdoor lavatories? A total of 10,000 to 30,000 euros (£8,800-£23,300), depending on the length of your stay.Arriving too late to make the prince’s acquaintance, this writer instead met dozens of unshaven, happy tourists. Clearly, money was not an obstacle, despite the hefty price tag on the trip. Nor did people seem to mind

the basic conditions, being just glad to be able to say, “I’ve been there, too.”

Fast and fearless On the way to Barneo from the Norwegian island of Spitsbergen, the only thing this batch of visitors could see from the twin-turbine An-tonov An-74 plane was water and ice. Upon landing, the

steaming bowls of borsch with sour cream, and fol-lowed not by canned meat but fresh beef cutlets. “Bar-neo is the best freezer for storing meat,” the cook en-thused. There are no storage concerns here: sour cream, yoghurt and other perisha-bles can be kept in a warm tent for days because a steady refrigerated temperature pre-vails at � oor level. At an adjacent table, Amer-ican scientists bemoaned the loss of an expensive buoy that was blown out to sea. At an-other, a local guide told a

STEFANIA ZINIRUSSIA NOW

newlywed couple how he was present not only at a wed-ding at the North Pole but also for the announcement of a divorce, after a client called his wife by satellite phone to end his marriage.Eccentricities aside, it is heartening to see so many people keen to tread in the footsteps of the American ex-plorer Robert Peary, who claimed to have been the � rst person to reach the North Pole in 1909, or Umberto No-bile, whose airship may have been the � rst � ight to reach the Pole in 1926.

welcome party included the explorer and pilot Alexander Orlov, the head of Barneo, the polar explorer Victor Boyar-sky and Alexander Bakhme-tyev, commander of the Kras-noyarsk Air Unit which is responsible for the air link with the outpost. The rapid tempo of the re-ception left no time for any jitters at the fact of our aus-tere location: the group was immediately whisked off to sample Arctic hospitality in the form of slices of frozen fish, washed down with chilled vodka or straight spir-its served on an empty oil drum. Then 10 minutes was allowed to carry rucksacks to the camp and be assigned a bunk, put on warmer clothes and make a dash for the wait-ing Mi-8 helicopter. Its en-gine and blades sped up and the aircraft, packed to the gills with people and gear, lumbered into the air. The � rst stop was near 89 de-grees north, where the pilot dropped off � ve Australians who wanted to reach the Pole on skis. Fifteen more minutes of � ight and the group � nal-ly reached the legendary des-tination of extreme explora-tion, the North Pole – where

it was quickly each to his own. A middle-aged couple from New Zealand produced a bag of golf clubs and hit balls across the endless ice-scape; four Japanese women whipped out cameras to take photographs; the guide un-corked a bottle and poured champagne, but no one man-aged a sip before it froze. Then everyone stared as an English Romeo dropped to his knees in front of his Chi-nese girlfriend and proposed on this hallowed spot. Back at camp, the � rst hot meal awaited, beginning with

“They write in books that sailing means unlimited free-dom – not really, it’s actual-ly gruelling physical and psy-chological work.” After steady enlargement, and the gradual acquisition of a modest � eet of four, came the proud moment of Cap-stan’s acceptance last year as an accredited RYA sailing school. There are 2,000 RYA schools worldwide: Capstan is the only Russian-run school of the 50 in Britain.As well as offering elemen-tary and advanced instruc-tion and vessel charter hire, the school takes experienced and novice sailors to such highlights of the sailing cal-endar as Cowes Week, which is held in the Solent every August. Today, the Fadeevs constant-ly count their blessings. “As they say, turning a hobby into work is generally an excel-lent way of ruining a per-fectly good hobby, but we must have been lucky,” says Yuri. “The more we teach people and the more we race and sail, the more we love what we do.”

“Spend your weekend on a yacht rather than the couch.” That was the � rst ad placed in Russian shops in London by Yuri Fadeev, the Tashkent-born City banker-turned-owner of a floating money pit – and founder of the only Russian-run sailing school in the United Kingdom certi-� ed by the Royal Yachting As-sociation (RYA).Today, Yuri and his Musco-vite wife Yulia bring hun-dreds of Russians to the UK to learn yachting, with cours-es in sailing English thrown in. But commercial success aside, theirs is a story of single-mindedness, romance, high seas and perilously low budgets.

Humble beginningsIt all started when Yuri, whose family emigrated to the UK in 1991, signed up at

Sailing Banker drops out of rat race to found first Russian-run school in Britain to be certified by Royal Yachting Association

Yuri Fadeev caught the sailing bug in Britain at the age of 21, and later founded his own school. But he hit plenty of squalls on the way.

21 for his maiden, life-chang-ing sailing course. “It took place in Wales, in winter, storms for three whole days – I absolutely loved it!” says Yuri, who is now 33.In 2001 he got his skipper’s licence and immediately bought a yacht after “long and persistent”negotiations with the owner. Much as he grew to love the Tingara, she soon turned out to be a pig in a poke.

Skippers of the future“I soon understood why the owner agreed to sell it for half the price,” recalls Yuri, who spent three years virtu-ally reconstructing his yacht at Brighton Marina in East Sussex. As his debts grew, he decided to try to make some money with the vessel.The ads were made, the couch potatoes stirred and signed up, and he never looked back. “I was offering a simple voy-age along the Brighton coast, yet everyone was excited about the idea – for Russians it was truly exotic.” The � rst four people who re-sponded to the ad went on

ple moved onto Tingara to-gether, and the hectic pace of commuting soon overtook the heady � ush of romance. They would wake at 5.30am and spend two hours on pub-lic transport to get to Lon-don where Yuri worked as an investment banker and Yulia as a financial analyst. But their own business also grew, and the small group that comprised Capstan began to launch its own events. In 2007 the Fadeevs organised their � rst regatta.

Sailing boot campInevitably, they had to choose between a professional life in the City or on the sea. The sea won. In 2009, the couple left their jobs in the � nan-cial sector and embarked on the first of their annual European voyages, through the Bay of Biscay and into the Mediterranean. This was de� nitely not a case of sail-ing into the sunset, but rath-er embarking on their own kind of 18-month sailing boot camp. “We learnt a lot about the reality of cruising,” Yuri says.

Couch potatoes help launch sailor’s dream

Yuri and Yulia Fadeev graduated from a yacht that had to be rebuilt to a RYA-accredited fleet

ANASTASIA DEDYUKHINARUSSIA NOW

to become skippers at other sailing schools, and still take part in Capstan's events as old friends. The touring business lasted a couple of years. And while Yuri worked in a bank in the City of London during the week, he spent his free time renovating Tingara.

And then he met Yulia on a train. The epitome of a Rus-sian belle – tall, blonde, blue-eyed, softly spoken – and with a career in radio journalism behind her, Yulia might not have fallen for the paint-smeared man in the cap with the bag of beer had it not been for the Russian book he

The polar base hosts hundreds of amateur and professional explorers, celebrities and even royalty

At the Pole itself, guests from around the world play golf, parachute, marry and sometimes divorce

Go with the floe: drifting ice base is new tourist hotspot

Travel Play polar explorer for a day at Russia’s most northerly outpost – from a mere £8,800

The Barneo camp offers the intrepid – and well-off – traveller a taste of extreme outdoor life in the far North

Journey to the end of the EarthSEASON: April.PRICE: 10,000 to 30,000 eu-ros, depending on length of stay.TRIP DURATION: from 24 hours to two-three weeks.ORGANISERS: For further information about the Barneo ice camp and related polar expeditions, see www.barneo.ru.

was reading. “I asked him, ‘Do you speak Russian?’” she recalls. “He replied ‘Da,’ and then looks and says, ‘I’ve got a yacht, you know...’”“That’s all I could talk about at the time since I’d invested all my time and money in it,” Yuri responds with a grin.After a few months, the cou-

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