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

What unites Britain and Russia

Priceless treasures fit for a king

The ambassador sets out his vision for co-operation

On display: the glittering gifts of the Romanovs

P.03 P.08

Hang on to your cash...

NeWs iN BRief

In thIs issue

The Russian health ministry is to outlaw smoking in public places, starting with a ban on public transport, including airports and train stations, in time for the Sochi Winter Olympics in 2014. It will be followed by a ban on smoking in hotels, cafés, res-taurants and nightclubs in 2015. The ban will include hookah pipes, which are often smoked in cafés.To encourage smokers to kick the habit, the price of cigarettes will be increased under measures driven by the World Health Or-ganisation’s Convention on Tobacco Con-trol, which Russia ratified in 2008. A survey last year showed 60.2pc of Rus-sian men and 21.7pc of women smoke, more smokers per head than any other country.

Fyodor Bondarchuk, one of Russia’s most successful young film directors, has begun filming a new drama, Stalingrad. The ac-tion takes place during the Battle of Stal-ingrad in 1942-43, one of the most bloody battles in history and a turning point in the Second World War. “It is a touching and dramatic love story. Of course, there will also be battle scenes,” says Bondarchuk. The movie, which will be shot in 3D technol-ogy, has a budget of $30m and is due to be released in 2013. The director’s The 9th Com-pany (2005) took $20m (£12.2m) at the box office, a record for post-Soviet Russia.

Smoking in public to be snuffed out

Stalingrad to hit the big screen in 3D

HisTORY

After the coupYeltsin takes on the mantle of radical reformer

The third-highest political post in Russia could soon be held by a woman for the first time in the country’s history. The governor of St Petersburg, Valentina Matviyenko, re-signed last week so that she could stand as a candidate for the role of speaker of the Federation Council, upper house of the Russian parliament.Ms Matviyenko has won a seat on the Fed-eration Council, and now faces an election within the council for the speaker’s role. Ms Matviyenko, 62, a member of the Unit-ed Russia party, has run St Petersburg for eight years. She is backed by the Russian president, Dmitry Medvedev. The speaker’s post became vacant in May, when Sergei Mironov of the Just Russia party was ousted by the ruling United Rus-sia party after criticising Ms Matviyenko.

Ex-governor for first female speaker

TuRN TO PAGe 7

T H E B E A R R E T U R N S O N L Y O N R B T H . R U / 1 3 2 5 3C A N N E W O L Y M P I C M A S C O T U N I T E T H E N A T I O N ?

Murdered: the writer uncovered human rights abuses in Chechnya

Five years after the murder of the campaigning journal-ist Anna Politkovskaya, who investigated human rights violations in Chechnya, po-lice have arrested a man sus-pected of organising the killing. Lt Col Dmitry Pav-lyuchenkov, was then chief of a secret Moscow police unit, one of whose functions was outdoor surveillance. The Russian Investigative Committee (SKR) has estab-lished that “Pavlyuchenkov was commissioned to organ-ise the killing of Politko-vskaya for a fee, and he set up a criminal group [for this purpose]”, said SKR spokes-man, Vladimir Markin. The police chief, who has since retired, was a witness

Politkovskaya suspect heldCrime Officer at secret police unit ‘organised murder of journalist’

in the case and allegedly tried to mislead the investigation concerning his invovement in Politkovskaya’s murder, according to the murdered journalist’s newspaper Novaya Gazeta. Mr Markin said that Pavly-uchenkov was suspected of organising surveillance of the journalist. “[He] acquired the weapon, worked out the plan and determined the role of each of the accomplices in preparing and carrying out the murder.”Investigators suspected four Makhmudov brothers from Chechnya of involvement in the murder. Dzhabrail and Ibragim were charged but acquitted in February 2009, along with a retired police officer, Sergei Khadzhikur-banov, who was accused of supplying the murder weap-on. However, the verdicts were overturned by the Su-preme Court, which ordered a retrial. Charged in absen-tia, Rustam Makhmudov, who was suspected of firing

A retired police chief has been accused of organising the murder of journalist Anna Politkovskaya. But whoever ordered the killing is still at large.

vlAdiMiR RuviNskYRussia nOw

Pipe dream: The Nord stream pipeline will deliver gas to the uk from Russia

Nord Stream is ready to start delivering Russian gas to Eu-rope through the first of its pipelines: the final weld con-necting the onshore and off-shore sections was complet-ed last week. The pipeline, which will supply Germany, France, Holland, Denmark and the UK with gas, will now be connected to the European gas grid.“The pipeline through the Baltic Sea has already been pressure tested, drained and dried and, since August 22, completely filled with nitro-gen, which serves as a safety buffer between air and gas,” said Dr Georg Nowack, Nord Stream AG project manager for Germany.The Nord Stream project has been under development since the late-Nineties. Then, the European Union wanted to minimise transit risks in the supply of oil and gas to EU countries, as differences between Russia and the former Soviet republics, Be-larus and Ukraine, had caused interruptions. Be-cause relations between the neighbours are often unpre-dictable, the route under the Baltic Sea was chosen to en-sure that supplies would not be disrupted.The Nord Stream company, which was founded in 2005, is a joint project between Russia, Germany, the Neth-erlands and France. The Rus-sian energy giant Gazprom owns 51pc, Germany’s Win-tershall and E.ON Ruhrgaz command 15.5pc each, with the Netherlands’ Gasunie and France’s GDF Suez both owning a 9pc stake. The former German Chancellor Gerhard Schroeder is chief executive of the company.

NikiTA dulNevRussia nOw

The first Nord stream gas pipeline is ready to deliver gas to Northern europe, but building of the south stream project has been put on hold.

Gas pipeline is ready to flowenergy The Baltic pipeline is ready to connect with Europe, but Eu rules delay progress of the larger Black sea link

CONTiNued ON PAGe 6

Tuesday, August 30, 2011distributed with

the fatal shots, was arrested in Chechnya this year. Pav-lyuchenkov, according to Mr Markin, had provided the brothers with information on Ms Politkovskaya’s move-

ments. She was killed by four shots from a pistol on Octo-ber 7, 2006, in the lift of the building where she lived on Lesnaya Street in Moscow. Who commissioned the crime remains the key question. Some have blamed the Chechen leadership, which she targeted in her hard-hit-ting articles about people disappearing and being tor-tured in Chechnya. Mr Markin said: “The inves-tigation has information about the person suspected of commissioning the crime but deems it premature to disclose this information.” The journalist’s colleagues at Novaya Gazeta are conduct-ing their own investigation. Deputy editor-in chief Ser-gei Sokolov says the investi-gative committee’s announce-ment was “just one theory”, and that the newspaper “has its own theories”. “I think there was a chain of middle-men, and the key question is how long it was,” he told the ITAR-TASS news agency.

A visitor to the 2012 Olym-pic yachting events in Wey-mouth who strays into the Nothe Fort museum might be surprised to see a Soviet sailor’s hat. It’s a gift to the Dorset museum from Eric Alley, a local resident who was presented with it in Ar-menia in 1989, when he was working there for a United Nations disaster relief team after an earthquake.At a dinner on Mr Alley’s last night in the country, his host asked him if he had ever been to the Soviet Union before. “Yes, in 1941,” he replied. After a brief pause, the host said: “But that was in the

Anniversary The arctic convoys

seventy years ago last week, the first Arctic convoy left for Russia. Churchill called it ‘the worst journey in the world’; 3,000 British sailors had died by May 1945. But two nations found friendship in adversity.

Great Patriotic War. Where were you?” Mr Alley grins at this point in his story and says: “Murmansk.” “Ahh,” said his host as the penny dropped. “The Arctic convoys.” From that moment, Mr Alley was a firm friend. He was given the hat and made an honor-ary member of the Soviet navy. Arctic convoys don’t

Friendships forged on the cruellest sea

ROGeR WilliAMsspEcial TO Russia nOw

eric Alley at a convoyremembrance ceremony

P.05

Russian portfolio values tumble as fear returns to world equity markets

ever, they are controversial because of the control they give to countries on the gas route. The Nord Stream, project has been granted an exception to the regulations; but other pipelines linking Nord Stream with various parts of Europe are not ex-empt. For example, NEL, which links the Russian pipe-line to the German gas trans-port system, has not been granted an exemption. As yet, the South Stream project does not have an exemption either, but high level discus-sions are being held to try to resolve these problems.Some experts believe that unless an exemption to the Third Energy Package is

granted for the South Stream project, it will not be built. “The South Stream pipeline will go ahead only if it is awarded priority project status,” says invest-ment company analyst Vit-aly Kryukov.

exemption is unlikelyHowever, Mikhail Krutikhin, a partner with RusEnergy, believes Europe is unlikely to make an exception solely for the sake of transporting Russian gas: “There is no rhyme or reason in that. Under European laws, cross-border pipelines within the European Community have to comply with the princi-ples of the Third Energy

Russia is planning to build the South Stream pipeline through the Black Sea, via Italy, to deliver gas to south-ern European countries by 2014. When built, it will carry 65 billion cubic metres of gas. A major advantage of both Nord Stream and South Stream is that there will be no transit costs, which should reduce the end price.

eu regulationsThe European Union’s Third Energy Package, a set of reg-ulations governing the price and supply of gas to Europe, has recently come into force. Their aim is to encourage competition and improve choice for consumers. How-

It plans to start delivering gas this autumn through the 1,224km (760 mile) pipeline, which will carry 27.5 billion cubic metres of gas a year. Construction of the second Nord Stream pipeline is still in progress, and is expected to be complete by the end of 2012. When complete, Nord Stream will carry 55 billion cubic metres of gas to Europe – around 36pc of the gas that EU members buy from Russia.

Growing demandAs the International Energy Agency has pointed out, the world has entered “the gold-en age of gas”. To further meet the West’s growing demand,

Package.” But when the South Stream project was presented in Brussels in May, energy commiss ioner Günther Oettinger promised the European Commission would support it without no strings attached. The Russian energy minister, Sergey Shmatko, expects preliminary results of talks with the European Commis-sion on special status for the project to be announced in the autumn. One option is to recognise the pipeline as part of the Russian gas transpor-tation system.If both projects are imple-mented, then Russia will become Europe’s biggest energy supplier.

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02 MOST READRUSSIA NOW WWW.RBTH.RUSECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA DISTRIBUTED WITH THE DAILY TELEGRAPH TUESDAY_AUGUST 30_2011Politics & Society The hard-working women behind the matryoshkas

hope for an Olympic boosthttp://rbth.ru/13151

As the elections for the State Duma draw nearer, Rus-sian politicians are

playing on people’s fears to help them win votes: it is suggested that Russia will fall apart if there is a change of government. After the events from 1917 to 1991, Russians are once bitten, twice shy, when it comes to the collapse of re-gimes. Add to that our sub-conscious guilt about our vast, underdeveloped areas, and it’s clear why the fear of the disintegration of Rus-sia holds the same place in society today that nuclear war used to hold in the Six-ties and Seventies.But when you look closely, it is an empty scare tactic. One of the predictions is that one or more regions or republics will withdraw from the Russian Federa-tion, leading to its collapse. But there is currently no legal way for a region to withdraw from Russia.Seceding from Russia is also impossible geopolitically. The vast majority of Rus-sia’s regions and republics are surrounded by the Rus-sian Federation. Those that have an external border are surrounded by former So-viet republics or China – neither of which would be likely to risk war with Rus-sia to support a separatist republic. Everything that China needs is easily pur-chased in Russia, and war would be too costly in fi-nancial terms.And the vast majority of Russia’s regions are subsi-dised by the federal govern-ment, so independence from the Russian budget would not be especially advanta-geous for them. Russian people like to grumble about Moscow, but they wouldn’t dream of seceding from Russia. So long as Russia has a cen-tral government, individual regions cannot break off. But what if we did away with Russia’s central gov-ernment? Then could we completely dissolve the country? The answer is no. It would not be legal to dis-solve an entire country. In contrast to the Soviet Union, Russia is not a union of dif-

OPINION

Leonid Radzikhovsky

ROSSIYSKAYA GAZETA

Ignore the scare stories, Russia will not break up

ferent states, so a total col-lapse of the government would not follow the 1991 model, but rather the 1917 model, which involved the dismantling of all laws.Of course, nobody supports this course of action. There would be total economic chaos in the territory of “the former Russia”. Who would be in charge of Gazprom, Sberbank, Russian Railways, Rosneft, and other companies that are mostly owned by the Russian state? Economic turmoil would force millions of people to � ee – but to where? This scenario would be a re-peat of the years from 1917-1920, but with nuclear war-heads. It would be the complete and irreversible de-struction of the state of Rus-sia and a direct threat to the survival of the human race. And for what? For Russia to dissolve in 1917, it required the illegitimate rise to power of extremists who eliminated private prop-erty and sparked a civil war. Are there any extremists today who might seize power in Moscow and make life

impossible for its people? There are none among the le-gitimate political parties. So who? Nazis? Anarchists? Just someone crazy? The limits of human stupidity have yet to be established, but individ-ual fanatics can’t just take over, as the army and intel-ligence agencies are there to stop them. And, as a whole, the people of Russia are not prone to collective suicide.That’s why I think all of this talk of the collapse (or self-dissolution) of Russia is noth-ing more than vicious fraud. It’s not a threat to us. The real threat is the continued dete-rioration of our basic social institutions – health care, ed-ucation and the government apparatus. But why think about that? It’s more glam-orous to espouse theories about the apocalypse, and easier, too, as it doesn’t re-quire any action.

Leonid Radzikhovsky is a political commentator for Rossiyskaya Gazeta.

The real threat is the continued deterioration of our basic social institutions

Bureaucrats are to move out of central Moscow en masse into a vast new administra-tive centre on the outskirts of the capital.The idea was announced by President Dmitry Medvedev at the St Petersburg Econom-ic Forum in June, and the Mayor of Moscow, Sergei So-byanin, recently unveiled more detai led plans which officials had been given a month to prepare. The new bureaucratic centre is to be built on a 160,000 hec-tare (395,000 acre) plot in the south-west region. The cur-rent boundaries of Moscow encompass 107,000 hectares, so the new area will, in effect, more than double its size. Within it, 45 million square metres of offices and 60 mil-lion square metres of housing are to be created – the equiv-alent of what Russia usually builds in two years.The local governments of Moscow and the Moscow Re-gion have already approved the ambitious project. Mr So-byanin has set a time frame of a year to � nalise plans for staging the move. And an in-ternational competition for developing the concept of Greater Moscow is soon to be announced.

Choosing to relocateAs the experts are quick to point out, many governments have moved their staff outside their capital cities in the past, for varying reasons. Brazil, for example, built its capital from scratch in the middle of the jungle. Although not the most convenient place to build, the move helped to sever the cor-rupt links between govern-ment officials and members of the elite classes, by replac-ing them with new people who had no connections to old, often criminal, schemes.Government offices are also relocated for more practical reasons, such as streamlining

administration. This was why France created its high-rise district, La Défense, on the edge of Paris. Mr Medvedev seems to be thinking more along the lines of streamlining rather than replacing officials, as the pro-posed site is within commut-ing distance of central Mos-cow. It is also hoped that the move will help to relieve traf-� c congestion in the city. Journalists were quick to ask Mr Sobyanin how much the new city for bureaucrats would cost. His answer was crisp: “The cost is not yet known because there are no concrete projects.” Finance minister Alexei Kudrin said that the reloca-tion would “cost nothing”. He said the movement of the bu-reaucratic staff would free up premises, property and other assets in the city centre. If these buildings were reused effectively, the cost could turn out to be zero.But Konstantin Kovalyov, managing partner with the estate agents Blackwood, says that the � nal bill will be con-siderable. “Every government official needs 12-15 square

metres, each costing $3,000 (£1,800). And one has to bear in mind that the officials will be accompanied by secretar-ies and staff who need space, too. So it may cost between $50,000 and $100,000 to re-locate a single government official.”As the president of the Mos-

cow Architects’ Union point-ed out: “Top federal executive bodies are not only about the offices in which the bureau-crats sit. Housing, a social and transport infrastructure, and commercial services are needed too.”As in most cases when offices are relocated, it is always inconvenient for some staff. One bureaucrat probably spoke for many others when she said: “I personally like the atmosphere of the old Mos-cow city centre and would prefer not to move out.”

According to a recent survey published by the Levada Centre, 61pc of Moscow citi-zens support the idea of mov-ing government offices out of the city centre, while 26pc object. But equal numbers both approve of and object to Moscow expanding in size (both 41 per cent). The other survey respondents were undecided. Some Muscovites, though, are seeing the funny side of the development. Residents of the suburban south-west districts of Moscow joke that soon their homes will be located in the city centre.

Building on experience Previous attempts to build a replica of La Défense in Moscow have met with lit-tle success. In 2005, the cab-inet of the former Moscow mayor, Yuri Luzhkov an-nounced a plan to build an administrative district on an 800-hectare plot of land north west of the city’s busi-ness centre. As around 100 industries located there would have had to have been moved out of the area, the total cost of the project was

Moscow’s bureaucrat army to receive new barracks

Gridlock: officials hope that moving government offices out of the city centre will help ease Moscow’s traffic congestion

Moscow’s expansion zone

Leisure Run-down 300-acre Moscow site is to be transformed into a modern tourist attraction

Illegal food stalls and tacky fairground attractions will be replaced by features inspired by London landmarks in an ambitious renovation project

Once a crown jewel of the Soviet Union, Gorky Park has fallen into a sad state of disrepair . But the billionaire businessman and Chelsea FC owner Roman Abramovich, along with the Mayor of Mos-cow Sergei Sobyanin, plans to rebuild and modernise the park with the aim of attract-ing up to nine million visi-tors a year.Designed by the Soviet avant-garde architect Konstantin Melnikov in the Twenties, the park was supposed to be a place where the Soviet pub-lic could relax and learn. With its theatre and huge cinema, it drew large crowds of Muscovites.“It was one of the few things which was well run in the Soviet era,” says Alexei Kli-menko, an independent ad-viser to the city. “It’s a na-tional monument; but a

criminal element crept in.”The park, which in winter is best known for its massive outdoor ice rink, became em-blematic of the Soviet Union when Western readers fell in love with Martin Cruz Smith’s 1981 thriller Gorky Park. The novel, which opens with an atmospheric tour of the rink, introduced readers to the � c-tional detective Arkady Renko, who fought corrup-tion among the elite.But there was no Renko for the real park. With its rick-ety-looking fairground at-tractions, unregulated food stalls, crumbling infrastruc-ture and criminal activity, it had an unsavoury reputation with the locals.Mr Abramovich’s close aide Sergei Kapkov, who previ-ously ran the billionaire’s Na-tional Academy of Football which funded Russian foot-ball development, has been put in charge of the renova-tion works. He has already promised a London Eye-type wheel for Gorky Park instead of its current Mount Rush-more fairground ride, and in-vestment of up to $2bn

Better than Hyde ParkIlya Oskolkov-Tsentsiper of the Strelka design and ar-chitecture institute is a con-sultant on the project. Im-pressed with the speed at which progress is moving, he says this could only happen in Moscow. “Gorky Park is bigger than Hyde Park and can be better,” he says. The comparison with Hyde Park began in 2009, when President Dmitry Medvedev

says: “I was in London not long ago and had a look at that Hyde Park. It looks great of course. We need to speak to the Moscow powers that be and let them build their own Hyde Park.”Plans to revive Gorky Park were � rst discussed in 2006 under then-mayor Yury Luzhkov. They were shelved after some expressed worries that Mr Luzhkov’s close ties with the construction lobby

Abramovich cash helps perk up Gorky Park

Park life: the facelift will include restoration, renovation and a number of new attractions

GALINA MASTEROVARUSSIA NOW

would result in skyscrapers being built in the park.

A park for everyone?The park’s new upmarket restaurant Olive Beach has led many to ask if the rede-sign will price out most or-dinary Russians. Olive Beach is run by Ginza Project, a chain with few, if any, budg-et family-style restaurants in Moscow. Ginza Project will be in charge of all the food outlets in the park.Mr Kapkov says that the park has to appeal to a wide variety of people, and accom-modate those who already use it. They include the JRR Tolkien fans who enact bat-tles from the English writ-er’s books there; the ballroom dancers who dance by the river at weekends; and the outdoor table tennis players who have been coming to the park for decades. Mr Klimenko adds: “It’s very important the park should be a public zone and work in society’s interests.”A competition is to be held to select the architect who will redesign the park.

(£1.2bn) over the next two to three years.

Out with the old...One of the park’s attractions was the test unit for the Soviet space shuttle, the Buran, which had been turned into a rather feeble fairground attraction. Its re-moval by boat along the Mos-cow River marked one of the � rst stages of the ambitious plan to revive the park.

New features include a skate-board park, and Olive Beach, an upmarket cafe where vis-itors can sunbathe by the river. The entrance fee has been scrapped and there is now Wi-Fi available through-out the park. More than 50 of the kiosks selling fast food and other goods were illegal constructions, and Mr Kap-kov has had them removed in the past two months. Much of the asphalt that was

laid in the park over the years will also be removed, and a lengthy promenade will link the park to Sparrow Hills, one of the highest points in Moscow. The jewel of the renovation will be the restoration of the brick Hexagon cinema back to its former glory. A con-structivist gem designed by Ivan Zholtovsky, it was once Europe’s largest cinema, but now lies in ruins.

Residents of the suburban south-west areas of Moscow joke that soon they will live in the city centre

New lease of life for Olympic site

An important recreational area of central Moscow, the Luzhniki Olympic Complex, is to be redeveloped. Built in 1956, its Grand Sports Arena will be renovated to prepare for the 2013 World Athlet-ics Championships. The arena will reportedly be completely rebuilt to meet Fifa’s require-ments for hosting the World Cup in 2018. This spectacular 145-hectare complex could also become an important cultural centre. The cinema

and concert hall housed in the huge Rossiya Hotel, which was demolished in 2006, may be rebuilt on the site.

Slide Show atwww.rbth.ru/13211

Planning Office workers will leave the city centre for new district

A new area for government offices and staff to be built on the outskirts of the Russian capital will cover 160,000 hectares and create a ‘Greater Moscow’.

ANTON MAKHROVRUSSIA NOW

estimated at $80bn. Conse-quently, it never got off the ground.Planners and developers, though, may have plenty of time to avoid making the same

mistakes. According to the Property Market Indicators analytical centre, the presi-dent’s grand scheme will take at least 10 to 15 years to come to fruition.

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03most read Russia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_august 30_2011 russia & britainImmigration challenges both Russia and the EU

http://rbth.ru/13221

we are united by the threats we face

For example, in the SME strand, issues of concern to UK businesses have been raised, such as product stand-ards, customs procedures and

filing procedures with Com-panies House in London. “Standardise standards!” has been the cry from UK manu-facturers. If a company is pro-

The visit to Moscow in Sep-tember by the British Prime Minister, David Cameron, will be the first official visit to Rus-sia by a leader of the British Government for five years. But the mere fact of the visit is not enough to declare the opening of a new chapter in Russian-British relations. We

business relations David Cameron’s proposed visit to Russia next month is a great opportunity to develop stronger ties

the potential for more collaboration between britain and russia in business is huge... if only there were a little less bureaucracy and a bit more awareness.

need concrete results which indicate a real improvement, or this will be little more than a box-ticking exercise. Relations cooled after the ap-parent warmth generated by the state visit to London by then Russian President, Vladimir Putin, in June 2003. The the British Prime Minis-ter, Tony Blair, began to have doubts about the relationship when his advisers raised ques-tions about Mr Putin’s dem-ocratic credentials and Rus-sia’s human rights record. The political relationship went into deep freeze after the murder in London in Novem-

ber 2006 of Alexander Litvinenko. Business relations suffered, too, as the British Government insisted on the extradition of those they ac-

cused of the murder, and the Russian side refused. Something had to be done to break the deadlock, and busi-ness held the key. In Novem-

ber 2008, Lord Mandelson, as Business Secretary, visited Moscow to restart the dia-logue of the Russo-British Intergovernmental Steering Committee (ISC), which aims to improve business relations between Britain and Russia. The committee has identified areas of co-operation, nota-bly financial services; hi-tech and nanotechnology; energy efficiency; the Olympic lega-cy; small and medium-sized enterprises (SMEs); and the overall business environment. But while discussion contin-ues, business is frustrated by a lack of practical action.

Time for us to to take a few practical steps to a better future

stephen dalzielspeCial to Russia now

Moscow, and it is not enough for the City simply to believe it is the best potential part-ner for Moscow. The City has to prove its case and Mr Cam-eron ought to underline this.The British Government has made much of the fact that it sees the encouragement of sound business and trade re-lations as an important ele-ment of foreign policy. There is much in British business practice which can be an ex-ample for a market economy as young as Russia’s. It is expected there will be a significant business delega-tion accompanying the Prime Minister. If it plays an active part in discussions about the future of affairs between Brit-ain and Russia, then this visit may signal a fresh start in bilateral relations.

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

ducing goods to UK, Europe-an and world standards, why should it have to spend more time and money proving that its products are good enough for Russia? And Companies House should be more aware of the problems of filing de-tails of Russian firms, rather than rushing to impose pen-alties for overdue filing.So while the fact that the ISC is meeting regularly again is encouraging, there is frustra-tion that it is still dominated by government and thus bu-reaucracy. When British busi-nessmen come up against bu-reaucratic processes left over from Soviet times, it is often easier to decide to do busi-ness with new markets, such as Brazil, India and China. Give business what it needs in terms of changes in legis-lation to ease procedures and it will look after itself.Mr Cameron should pay close attention to one aspect of An-

glo-Russian business relations which has a great future if given proper support. Britain is particularly strong in finan-cial services. Many foreign companies, among them many Russian firms, choose to list on the London Stock Ex-change ahead of other inter-national options. There have been serious developments in the past six months in the plans to develop Moscow as an international financial cen-tre (IFC). Where better to look for a partner than the City of London?Significant progress was made when the Lord Mayor of the City of London, Alderman Michael Bear, visited Russia in June. The City does not see Moscow’s development as an IFC as a threat to its own po-sition, and much can be gained on both sides by co-operation. But the City cannot afford to be complacent. Other inter-national centres are courting

diplomacy alexanDeR YakovenkoambassaDoR of the Russian feDeRation to the uniteD kingDom of gReat bRitain anD noRtheRn iRelanD

nations united: the monument to yuri gagarin, the first man in space, is unveiled in the mall, london, on July 14. guests included alexander yakovenko, left; prince and princess michael of kent, centre; nataliya koroleva, daughter of sergei korolev, soviet lead rocket engineer, second right, and elena gagarina, daughter of yuri gagarin, right

“What is most lacking in the hu-man body in the 21st century?”, an illustrious Russian surgeon was asked during the celebration of his 100th birthday. “Optimism”, answered the doctor, ever young at heart. “Optimism cures.”It looks as if Russian-British rela-tions need a good dose of op-timism in order to fully recover. Alexander Yakovenko, Russian Ambassador to the United King-dom, calls this dose “guarded op-timism.” A career diplomat, aca-demic, international lawyer and writer, Dr Yakovenko handed in his credentials to the Queen in March. Prior to his appointment to London, Dr Yakovenko was depu-ty foreign minister of Russia for five years. In the mid-Nineties, as deputy director of the Russian Foreign Ministry International Technical Cooperation Department, Dr Ya-kovenko headed up the Russian delegation at the negotiations on the International Space Station. He recalled later that an unprec-edented level of openness had been achieved during this work. As it went along, certain regula-tions that impeded the “link-up” of space co-operation had to be amended, but “as a result, we had the most vivid example of how countries can co-operate for common good.”Probably the only serious obsta-cle to a full link-up between Rus-sia and Britain on the way to mu-tually beneficial co-operation is the impasse caused by the well-documented extradition disputes. Perhaps the two countries’ dip-lomats will be able to set a new precedent of openness that will take us down a straight path to mutual prosperity.Here, Dr Yakovenko outlines his strategy for progress.

Globalisation in general and the current crisis in particu-lar show with great clarity that in the 21st-century, Russia and the UK have no reason to stand apart but, of course, a healthy competition remains. The complex character and unprecedented nature of the problems every government faces are dictating the over-all agenda of the day, which has to be implemented despite the current misunderstand-ings and disagreements on some issues. But it is also im-portant to remember the spe-cial role of our countries in international affairs, as Rus-sia and the UK are perma-nent members of the UN Se-curity Council, Group of Eight, and the G20. It is time we openly admitted that the cooling of Russian-British relations has not only impaired bilateral contacts; it is in stark contrast with the active co-operation between Moscow and London on a broad spectrum of interna-tional problems in the vari-ous multilateral forms. The mistrust needs to be overcome by the combined efforts of the governments with the wider involvement of civil society.Interestingly, the mindsets of the political classes of our countries run parallel on a number of issues. In Russia, people are starting to think about ways of mobilising civil

give business what it needs in terms of legal changes to ease procedures and it will look after itself

most british business people dealing with Russia... enjoy the experience and make good profits

ticular instance of the global tendency towards synthesis and fusion. The common stra-tegic aim is to encourage eco-nomic growth through mod-ernisation and innovation, to expand foreign trade and at-tract capital from abroad. Both countries, like many of our other partners in the northern hemisphere, need to find sources of growth and new ways of increasing their competitiveness.

Fiscal consolidationThe UK is currently going through a phase of rapid fis-cal consolidation, which is a key component of the Coa-lition Government’s strategy for promoting sustainable in-dependent development of the country in conditions of crisis. The wheels of state are trying to cut expenses and increase income to eliminate the budget deficit. Budget-ary injections to support the momentum of developments in the markets and various sectors, as used in the first years of the crisis, are now virtually non-existent, as they would lead to further rapid growth of government debt. And I do not need to remind you how much con-sideration economists and experts are currently giving

thought exchange: russia and britain have much to gain from ‘open and honest conversation’

speaking as a diplomat, whose job it is to observe the workings of great britain, i have concluded that many of the threats and challenges we both face actually unite us

the common strategic aim is to encourage economic growth through modernisation and innovation, to expand foreign trade and attract capital from abroad

billion dollars of investment made Britain the sixth-largest investor in Russia in 2010.

thousand Britons visit Russia every year and approximately the same number of Russian citizens make tourist trips to the UK.

billion dollars of exports came from Russia to Britain in 2010, of which 75pc were mineral fuels.

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the numbersthe problem of sovereign debt. In Russia, the situation is dif-ferent. Here, the budget defi-cit and government debt is substantially lower than that of many Western countries. But our foreign trade, and in fact the economy as a whole, continues to be dependent on the export of raw materials and energy resources. Trade figures between our two coun-tries are indeed a very clear illustration of this – in 2010 around 75 pc of Russian ex-ports to the UK were miner-al fuels, amounting to around $8.5bn (£5.1bn). In Russia, it is widely understood that there cannot be a modern trade structure unless the economy is diversified; that we must not be content with inorganic methods, and that we need a systematic techno-logical breakthrough. Hence our determination to develop the innovation sector, includ-ing biomedicine and nanote-chnology. The projects for the Skolkovo innovation centre and the international finan-cial centre in Moscow – these are all component elements in the modernisation agenda for Russia.

modernising togetherI do not consider Russia and the UK to be competitors in the sphere of innovation. The idea that “the early bird catch-es the worm” does not work in this context. We are very capable of moving on along the path of modernisation to-gether. For example, what could stop companies from working in Skolkovo and the equivalent hi-tech centre in London’s Shoreditch at the same time? Both these cen-tres have their advantages. For example, we have a large ed-ucated and well-qualified workforce and low income tax. And modern communi-cations allow companies to work together effectively – regardless of borders and time zones.There are good prospects for collaboration in the field of energy efficiency, which would not only help tackle the challenges of climate change, but also help us to be more competitive. There are also other areas where our interests coincide, and where we can achieve substantial results by combin-ing our efforts. In 2009, the governments of the two coun-tries resumed a bilateral eco-nomic dialogue on a high level

in the form of the Intergov-ernmental Steering Commit-tee on Trade and Investment. In particular, six key areas were identified as the most promising for the future de-velopment of our co-opera-tion, requiring special atten-tion from both parties: the financial services sector; the sphere of high technology; the energy and energy-efficiency sector; strategies for improv-ing the business climate, in-cluding access to markets; the promotion of small and me-dium-sized businesses and the expansion of regional co- operation, and finally, the Olympic legacy and the successful development of a sports infrastructure. It seems obvious that all of these areas, without excep-tion, are important not only for developing bilateral co-operation, but also for multifaceted modernisation in our countries. A good example of co-oper-ation in the most modern fields is the links established between Roscosmos and the UK Space Agency. A collab-oration programme has been approved, and this was given particular symbolism by UK-Russia Year of Space, which took place on a large scale, culminating in the unveiling of the statue of Yuri Gagarin in the centre of London on the 50th anniversary of his trip to England. It was a real celebration which allowed us to relive the mutual feelings of joy at his success, which became an achievement for all mankind.I especially want to focus on the importance of cultural ties and contacts between people overall in modern diplomacy and in Russian-British rela-tions. On the one hand, pro-motion of these is one of the ultimate aims of foreign pol-icy, as access to culture and freedom of international con-nections is a vital condition for the successful develop-ment of any society. On the other, it is human links which, to a very great degree, enable the growth of mutual under-standing between nations and create a positive background for relations at an intergov-ernmental level, as they strengthen mutual trust.

beatles to hamletThe way Russian people think of the UK is largely shaped by the images formed at a young age – ranging from the Beatles to Hamlet to Sherlock

Holmes. Russian culture has also become part of the fab-ric of everyday life for ordi-nary Britons, and is just as much loved by them. A recent survey of British actors showed that they rate Anton Chekhov as the best play-wright after William Shake-speare. I am sure that in Rus-sia no one would argue with the fairness of this judge-ment. Tours by Russian theatre com-panies in the UK are met with invariable success, and the names of Tolstoy, Dostoevsky and Tchaikovsky are dear to every educated person. Rus-sian contemporary art also at-tracts an audience here, and we, along with our British partners, are working hard to encourage this. Every year more than 200,000 Britons visit Russia and about the same number of Russian citizens make trips to the UK. These are quite impressive fig-ures, but we would like them to be higher. Personal impres-sions are much stronger than crude stereotypes, and every direct contact will help to dis-pel mutual prejudices which were inherited from the previous era.

removal of visasIt is in the interests of Britain and Russia to make joint steps towards the alleviation, and, eventually, the removal of visa restrictions between our coun-tries. This is the direction in which we are moving in our relations with the European Union. Significant progress has already been made with a whole range of other coun-tries, including the United States. I think it is important that Russian-British relations should not fall behind this general trend in modern in-ternational relations which, in this way, are taking on a human face in the full sense of the word.Finally, we should not forget that there is a new and very different competitive environ-ment forming in the world. The fight for a “place in the sun” in the international com-munity is not being fought with dreadnoughts and war-planes; instead, nations are strengthening their own de-velopment potential and net-work diplomacy to build re-lationships of co-operation with the maximum number of partners. This is, most probably, the foremost priority of modern foreign policy today.

initiatives and consolidating the country’s legal framework to overcome the corruption that is obstructing economic development and hampering social progress. In the UK, people are debating the ideas behind David Cameron’s “Big Society”, which are intended to lighten the load on govern-ment structures by decentral-ising the way the country is run and creating the necessary conditions for citi-zens’ bold ideas to come to fruition and to alleviate social tension.

united by challengesSpeaking as a diplomat, whose job it is to observe the inner workings of the UK, I have concluded that many of the threats and challenges we both face actually unite us. Recognition of this common ground is what forms the basis of the political connections that have recently been re-sumed between our coun-tries. And are we not united by the problems of international ter-rorism and the proliferation of WMD, the drug trade, or-ganised crime and illegal im-migration? Do we not need to have an open and honest talk, albeit from different his-torical perspectives, about the

future of democracy and sus-tainable models of socio- economic development in the 21st century? How can we collaborate in our response to criminals’ use of digital technology? These are just the first in a catalogue of intergovernmen-tal issues requiring immedi-ate and daily responses. And all this is happening when, with every technological breakthrough, with every new tourist visiting our cities, and with every new cross-cultur-al marriage, our societies are becoming closer. The estrangement at an offi-cial level has become ever more out of touch with this reality. This has started to be recognised in the British cap-ital. Hence also the conclu-sion drawn by President Dmitry Medvedev following his conversation with Prime Minister David Cameron in June 2010 in Huntsville, when he said: “UK-Russia relations require adjustment and top-level attention.” Over the past year or so, some foundations have been laid in the area of Russian-British re-lations that allow us to look to the future of our partner-ship with guarded optimism. Authorised Russian and Brit-ish government bodies are

now collaborating in the fields of sport, culture, space, jus-tice, the fight with the illegal drug trade, and many other areas.

mutual respectOur most immediate task is to build on the level of co-op-eration that has been achieved through a dialogue of mutu-al respect, and to expand sig-nificantly the scope of our col-laboration. The co-ordinated response of Moscow and Lon-don to the challenges of our time and the ability of the countries’ leaders to under-stand and identify with one another will have a major im-pact on the harmonisation of our own relations and mod-ern international relations as a whole. Russian-British collaboration in the sphere of trade and in-vestment is an exceptionally important element in the whole set-up of our relation-ship. Its momentum has hard-ly been affected by the polit-ical situation, and the negative effects of the global financial crisis are being successfully overcome.I would especially like to note that today, probably as never before, Russia and the UK are at a stage where their paths are converging. This is a par-

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global russia business calendar 2011 yaroslavl global policy Forum september 7–8, yaroslavl, russiaThis year’s event will explore the role of “The Modern State in the Age of Social Diversity”. Guests include Irina Bokova, Unesco direc-tor-general, John Laughland, director of studies at the Institute of Democracy and Co-operation, and Lord Robertson, former secretary general of Nato. The forum will include discussions on global income

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russians are big spenders abroad again Russian consumers are now spending more abroad than they did before the financial crisis began in 2007, according to a Citi-bank survey. The bank predicts that by the end of 2011, Russians will have spent $40bn (£24bn) abroad with their credit cards this year alone, representing 3pc of the country’s GDP. This includes internet purchases.

“Since the beginning of 2011, we have witnessed a substan-tial growth in consumer ac-tivity that is exceeding the pre-crisis period,” says Michael Berner, head of con-sumer lending at Citibank.

The survey also indicates that the UK is Russians’ third most popular place to spend money, attracting 8pc of its overall spend, following the US (16pc) and Italy (11pc). Russians spend the most on hotels, followed by clothes and shoes, particularly from Italy and the UK. Russian spending on jewel-lery and luxury goods is also increasing.The study used data on purchases made abroad by Citibank’s clients with cred-it cards between January 2007 and June 2011. It was based on a sample of 50,000 random respondents.

These findings are support-ed by the latest consumer confidence survey by the Federal Statistics Service, Rosstat, whose consumer confidence index rose to - 9pc (from -13pc) in the second quarter of this year.

murdoch sells ad company The embattled media mogul Rupert Murdoch has sold his Russian advertising com-pany News Outdoor to the state-owned investment bank VTB Capital. News Outdoor is a big play-

er in the billboard business. The massive ads that domi-nate Moscow streets each cost between $400 (£245) and $4,000 a month.The former Moscow mayor Yury Luzhkov, who was ousted last year, was criti-cised for his inability to con-trol the explosion of bill-boards, and efforts to limit their numbers have only been partly successful. Announcing the deal, VTB Capital said that the new m a n a g e m e n t w o u l d “interact with authorities to implement programmes aimed at improving the appearance of cities”.

Piracy is believed to be the reason that many games and films do not reach Russia in their licensed forms. But the Russian Pirate Party, which is part of the international piracy movement, wants to change this situation. It is calling for reforms that would benefit both users and creators of these media. Stanislav Shakirov, head of the party, explains: “There are websites, such as ivi.ru, which has a free collection of licensed movies (support-ed through advertising), and fidel.ru which charges for watching a certain number of films (its subscription is about $20 (£12) per month).“Many of my friends and I would gladly pay [to see licensed content], for exam-ple, through pay-per-view or any other system if it is sim-ple, convenient, and a rea-sonable price.”The problem is that the number of users on torrents (large file-sharing networks where people download files from each other for free) is constantly growing in Rus-sia, whereas licensed online websites cannot boast such impressive figures. A song by Russian rapper MC Donatel-lo features the line: “Why on earth have they launched ivi.ru? Did they forget about tor-rents?” Mr Shakirov believes that this attitude is at the root of the problem. “We have no normal payment culture... If you download a game from a Western torrent, the description of the game will certainly have a para-graph saying, ‘If you like the game, go and pay its crea-tors.’ Western users do so in most cases. Russian users will never even think of such an idea: why pay if you’ve al-ready got what you need?”The Pirate Party wants to re-vise the current system of cash-flow distribution, both to help protect users’ rights and to help authors earn more than they do today.The RAO (Russian Authors’ Society) is an organisation set up to support authors which lobbies the govern-

copyright downloading reform plea

ment. According to Mr Shak-irov, one of its ideas is to levy taxes on each blank disc im-ported into Russia. But he says that authors would get only 45pc of these fees, while the rest would be used for RAO operations. “It turns out that this organisation acts for anyone’s benefit but the authors’,’’he says.Russian pirates believe there is an alternative. They want to see more competition. “The world is changing,” says Mr Shakirov. “Rights holders un-derstand they have to look for new business models to profit – ones that would not infringe the rights of users and secure a trouble-free life for authors. For example, Mosfilm opened a licensed channel on YouTube – this is really cool, they’re profiting from advertising without paywalls. But the RAO is fil-ing hundreds of lawsuits be-cause music is allegedly being played illegally in restaurants through it.” The pirates want support from the state, particularly the abolition of criminal prosecution for breach of copyright. Boris Turovsky of the International Pirate Party says: “Russian officials ignore international free licences such as Creative Commons, GFDL, BSD and others. They

should help implement them in full. Otherwise, the cur-rent policy sets a double standard.” Mr Shakirov agrees: “This is a case where a comprehen-sive set of reforms is needed. Only then will the RAO mo-nopoly be shaken, competi-tive business models emerge and users understand what to pay and to whom.” But the Russian government is sceptical about such ini-tiatives and seems not to be taking the party seriously. Not long ago, the Ministry of Justice denied the Russian Pirate Party official registra-tion because of its name: it referred to Article 227 of the Criminal Code which de-scribes piracy as “an attack against a ship or riverboat”.

The pirates who would rather pay than plunder the russian pirate party wants to fight illegal downloading, but the authorities remain unmoved by their proposals.

alexander vostrovspeCial to russia now

most popular russian torrentstorrent tracker

websiteapproximate number of users

2010 2011rutracker.org 4,560,000 5,300,000

lostfilm.tv 1,345,000 2,100,000

tfile.ru 900,870 1,400,500

novafilm.tv 560,000 1,100,900

nnm-club.info 500,450 700,080

pirates want support from the state: the abolition of criminal prosecution for breach of copyright

“Voodoo People” reads the sign taped to a door in the new building for KupiKupon, Russian’s answer to the dis-count retail site Groupon. “That’s the room for the guys responsible for the content,” says Djasur Djumaev, one of the four young Uzbek found-ers of the company.The building near Pavelt-skkaya in Moscow is so new that workmen are still in-stalling windows, and bits of the lift are lying about in their plastic wrappings. The move was needed because the company, which was started in May last year, has grown so quickly and now has a staff of more than 200.From behind large Mac screens, a few staff are putting the company’s latest deals on the website. Today, an 85pc discount for “non-invasive liposuction in the hips or abdomen” is availa-ble in a Moscow clinic for 3,600 roubles (£75), instead of 24,000 roubles (£500). The room is more than half empty. “Most staff don’t turn up until near the end of the day. They like to work late. The office usually fills up at about 6pm, and then some-one is here until 2am or 3am,” says Mr Djumaev. Along the corridor, another door says “Miami Police”

e-commerce KupiKupon in $66m expansion plan

with offers on everything from haircuts to holidays, russia’s version of groupon is proving a big success with internet bargain hunters.

(legal department); “We make money” (deal team 1) and “We make the big money” (deal team 2). And, further reflect-ing the youth of the partners, who were all in their 20s when they set up the busi-ness last year, there is a play-room – a kitchen-cum-gym which will soon be kitted out with Sony PlayStations and table football.

grabbing market share The explosion of broadband over the past two years has made Russian e-commerce a highly lucrative market. And the potential customer base is growing, as the number of Russians online is doubling every 18 months or so and is now well over 50 million peo-ple – over a third of the Rus-

sian population. According to financial corporation Ural-sib, 69pc of the population will be online by 2015. KupiKupon saw revenues grow from nothing to $400,000 (£240,000) in its first seven months of opera-tion. This year, the company expects to turn over $30m, rising to $110m by the end of 2012. However, this upstart com-pany has only a 20pc share of the group deals market. This is because of the loom-

ing presence of its direct competitor, Groupon, which entered the market after Rus-sian businessman Yury Mil-ner, the owner of Mail.ru, bought a 5.13pc stake in the US company for a report-ed $75m. Mail.ru is a giant, servicing about eight out of every 10 emails sent in Russia, and the exclusive advertising that Groupon gets as part of this partnership has allowed the company to streak ahead in Russia. However, according to mar-ket rumours, this arrange-ment is due to expire this September. If true, this will throw the field wide open. “We don’t need new money to get growth, but simply to keep ahead of the competi-tion,” says Mr Djumaev. “The three main players [in the group deals market] are all growing very fast, but we are eating into an untapped market. There is a ceiling on this non-competitive growth, and there are about two years left until it is all gone. Then the only way to grow will be to eat into each other’s market share.” KupiKupon has already man-aged to raise $6m worth of funding, and is negotiating to raise another $10m, which it expects to receive by Sep-tember, mainly from inves-tors in the former Soviet Union. Then the company plans to go overseas to raise a further $50m at the start of next year to pay for ex-pansion to fill out the cor-ners of the market.

land, and plans to build up the business in Scandinavia over the rest of this year.

Finding online customersThanks to the as yet under-developed online retail busi-ness in Russia, customers are fairly easy to sell to: the hard part is finding them. In the West, online compa-nies buy contacts from cost-per-action (CPA) networks, which are intermediates that buy lists of email addresses from websites with well-de-fined users. CPA networks are only just starting to ap-pear in Russia, so they are still very cheap to use. “We can buy leads like con-firmed emails for half the price we would buy them from social media sites,” says Mr Djumaev. “In the US, it costs about $7 per subscrib-er to your website, and $15 per real customer (one that buys something from your site). But in Russia the cost of a subscriber is about $2, and the cost of getting real customers is about half of what you pay in America.”

bargain boom: rise and rise of a discount site

saving grace: kupikupon was an instant hit and now offers deals from 20 leading retailers

ben arisbusiness new europe

the regions and beyond Mr Djumaev and his part-ners have enjoyed an instant hit with KupiKupon. “At first we set up a basic website where customers could buy a simple coupon,” says Mr Djumaev. “The first deals were from companies like

beauty salons offering a fa-cial or haircut at a discount-ed price. Initially, we had a deal every three to four days, then we had one every day, and now we get dozens a day.” Mr Djumaev has struck deals with 20 of Russia’s leading retail chains. From the very beginning, the company began hiring staff in the regions to target the wider market, not just the 15 million Muscovites, before quickly moving into other countries. Russia represents a strong market of 100 mil-lion people, and if you in-clude the Russian-speaking former republics, this rises to 200 million. With the rap-idly increasing numbers going online, the potential market is growing all the time. The company is now in 52 Russian cities and in Ka-zakhstan, Belarus, Ukraine and the Baltic states. It launched in Estonia in April this year, and was the second largest company in the market with a $400,000-a- month turnover by July. It has also launched in Fin-

the company is now in 52 russian cities and in Kazakhstan, belarus, ukraine and the baltic states

aviation stealth fighter makes troubled debut as helicopters and civil aircraft steal the show at maKs 2011

contracts for more than $10bn were signed at the maks 2011 international air show held outside moscow this month.

The unveiling of the fifth-generation stealth fighter jet T-50 was the most eagerly anticipated attraction of the international MAKS 2011 airshow this month.A prototype of the jet per-formed its inaugural public flight at the five-day show in the outskirts of Moscow. The display was repeated every day for the audiences, but on the final day, the T-50 suf-fered an engine problem and had to abort takeoff. Experts point out that the T-50 is a rather crude proto-type, and its engine is still in

the development phase. When complete in 2015, the aircraft will take part in active serv-ice with the Russian and In-dian air forces. The contracts signed at the show for fixed-wing aircraft were worth a record $10bn (£6bn) but all were for civil aviation. Several deals be-tween the Russian Army and the Russian state holding company OAK (which in-cludes all aviation manufac-turers in the country) were pushed back indefinitely be-cause of pricing problems.

cargo market pledgeThe lack of orders for mili-tary aircraft was disappoint-ing for many, but OAK tried to smooth things over by promising that Russia will have at least a quarter of the world market in cargo air-

Gazpromavia. Two of the jets are flying for commercial air-lines. Still, no European com-pany has shown interest in the 100-seat plane that must compete with Brazil’s Embraer and the Canadian company Bombardier. Aerospace companies are hesitant to use an aircraft that has had operating prob-lems and is still being produced at very low vol-umes – just one aircraft a month. Certification from the European Aviation Safety Agency, due before the end of 2011, and the successful resolution of operating prob-lems should help interest European buyers.

France buys helicoptersRussian Helicopters (Verto-lety Rossyi) stood out from the rest, and signed deals for

79 civilian aircraft (Mi-8AMT and Mi-171), as well as 450 aircraft for the military. The firm’s head, Dmitri Petrov, proudly noted that the French Mistral assault ship would probably be equipped with Ka-28 (anti-submarine) and Ka-52 Alligators (attack) hel-icopters, made by the com-pany. Mr Petrov also told Russia Now that two heli-copters produced by the firm had a good chance of success on the European market. “Spain and Portugal have already purchased about 20 of our Ka-32A11BC fire-fighting aircraft. This heli-copter is equipped with unique horizontal water can-nons that can put out fires in skyscrapers,” he said. India and China remain the company’s biggest custom-ers for military aircraft.

Record plane sales brighten the skies

testing time: the t-50 managed one successful flight

paul duvernetrussia now

craft by 2025. Of the civilian aircraft at the show, the new Irkut MS-21 accounted for $6bn of the contracts signed with a total of 78 sold. Rus-sia’s answer to the Airbus A320, though, still exists only on paper. Its first test flight

is scheduled for 2014, with mass production beginning in 2016.The Sukhoi SuperJet 100, a regional aircraft, received only 22 orders – 12 from an Indonesian company, and 10 from the Russian company

Expected turnover of KupiKupon this year in dollars. Founded in May 2010, it made $400,000 in its first seven months of operation.

of the Russian population are expected to be online by 2015, according to Uralsib. Currently, more than 50 million (over a third) are online.

30m

69pc

the numbers

inequality, security issues and democracy in multi-ethnic societies. It will take place in one of Russia’s oldest cities, 1,000-year-old Yaroslavl.

› http://en.gpf-yaroslavl.ru/ ›

6th russia-singapore business Forum (rsbF 2011) september 25–28,marina bay sands, sinGapore The forum is the leading net-working platform for business elites from Russia, the Com-monwealth of Independent States and the Asia-Pacific

region. This year, the forum focuses on emerging markets, with a session dedicated to opportunities in the greater China growth area. RSBF 2010 attracted more than 800 par-ticipants; judging by the many joint ventures arising from RSBF, the forum has become a significant event in the business calendar.

› www.rsbf.org.sg ›

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05most read Russia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_august 30_2011 business & FinanceRussian diamonds are the markets’ best friend

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How much involve-ment should the state have in the economy of an

emerging market? While most agree that the private sector is the most efficient manager, academics say that, during the transition period, state involvement is crucial.“All emerging markets fol-low a similar pattern,” Pro-fessor Bernard Yeung of the National University of Sin-gapore said during a pres-entation at the European Bank for Reconstruction and Development in Kazakhstan in May. “At the start of the proc-ess, the state has to engage in a big push to get the wheels of commerce turn-ing, because it is the only entity with the resources to do anything. But once the economy is up and run-ning, it must step back and adopt more of a nurturing strategy.”Prof Yeung was joined on his panel by Professor Ser-gei Guriev, director of the New Economic School in Moscow. Prof Guriev said that when the economy is healthy, the state should give the job of driving eco-nomic growth to entrepre-neurs and small- and me-dium-sized enterprises. Prof Yeung added that a key element of nurturing was “creative destruction”– where inefficient compa-nies go out of business to allow their resources to be put to better use elsewhere. Indeed, a lack of creative destruction leads to stag-nation. But this is where it starts to get tricky, be-cause government lobbies and vested interests are set up in order to protect com-panies from being down-graded or sold off.It can be argued that Rus-sia’s economy has already reached the point where

moscow blog

ben arisSpecial to

RuSSia now

Governments must learn when to let go of business

its government can afford to become less involved. But while Russia has made a lot of progress, the needs of its economy are mixed. A joint survey conducted in May by the Moscow Higher School of Economics and the Russian economics mag-azine Ekspert found that since 1991, levels of both in-come and consumption per household have soared. Those sectors that have ben-efited from the boom in re-tail spending are the clear winners, and the state now needs to do little more than nurture their growth.However, not all manufac-turing sectors are self- sufficient. While the state’s involvement in the power and automotive sectors of the economy has been very successful, the shipping, avi-ation and metallurgy sectors have a way to go.

The Kremlin has relaunched the privatisation process, and is planning to raise up to one trillion roubles (£21bn) in the next three years. The stakes are high: Russia used a lot of its spare capacity in the economic crisis, and slower growth of about 4pc may not be fast enough to stop the country's ageing infrastructure slow-ly crumbling away. Even if the government stays on course, it still has to get the speed of transition – from the big push to nur-turing – correct, which will not be easy.

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

at the start of the process, the state has to engage in a big push to get the wheels of commerce turning. But once the economy is up and running, it must step back

President Dmitry Medvedev has launched a drive to im-prove Russia’s investment cli-mate and is putting $10bn (£6bn) of state money where his mouth is: in the Russian Direct Investment Fund (RDIF). This new sovereign wealth vehicle aims to attract the world’s leading funds to co-invest in major projects. The hope is that it will re-duce the perceived risk of doing business in Russia by dramatically increasing pri-vate equity investment.The appointment of Kirill Dmitriev to run the fund is a testament to the commer-cial nature of the project. One of Russia’s new generation of rising business leaders, Mr Dmitriev cut his teeth work-ing as a manager at Delta Private Equity Partners, a US-government backed in-vestment fund designed to promote capitalism by fi-nancing the growth of inde-pendent business in Russia.He then set up the highly suc-cessful Icon Private Equity — a $1bn fund that invested in projects across the Com-monwealth of Independent States. He also founded the Russian Association for Ven-ture Capitalists and advised the government on the crea-tion of the Russian Venture Company, a state-backed fund promoted by Prime Minister Vladimir Putin to kick-start the country’s ven-ture capital sector.“I am not a politician. I am a fund manager, and the pri-mary goal of the RDIF is to earn returns for the inves-tors,” says Mr Dmitriev. “We thought long and hard

one of the stars of russia’s new generation of business leaders explains how the new fund will attract the best investors in the world.

about the best form for the fund, to make it as attractive as possible to investors. The state finance will be limited to a minority role of no more than 50 per cent minus one share in any project. It means the co-investor doesn’t have to invest into anything they don’t believe will earn re-turns. I don’t see the RDIF as a political initiative. How-ever, the political goals of the government will be achieved from these investments – but as a by-product.”Mr Dmitriev is currently hir-ing staff, mostly Russian pro-fessionals, and the first $2bn will be released by the state in September. The first in-vestment is anticipated by the end of the year. After that, Vnesheconombank, the state-owned development bank, will release another $2bn each year over the next four years. The Kremlin hopes that the fund will also at-tract $90bn from private co-investors. “Russia is a very attractive investment desti-nation. People have to some extent lost sight of what the country has to offer,” says Mr Dmitriev. “It’s the sixth-largest [PPP adjusted] econ-omy in the world – even Rus-sians forget this fact – and the number of people earn-

ing more than $10,000 (£6,000) a year has tripled in the last six years. I’m not saying that everything is good, but rising incomes have led to an incredible amount of change in a remarkably short time.”The structure of the RDIF is designed to allay the fears

foreign investors have about investing into Russia. Such worries are illustrated by the Russian stock market, which has been the best-perform-ing significant market in the world over the past decade, but is still stuck with an av-erage price-to-earnings ratio below seven – a stark con-

trast to the early teens en-joyed by other major emerg-ing markets. Russia also performs far below its emerg-ing market peers in both in-coming portfolio and direct investment volumes.So a major focus for the fund, is to offer investment firms some reassurance. With the

state limited to a minority stake, investors will not only have the security of a con-trolling stake but, more im-portantly, the state will share the risks and be subject to the same rules and corporate governance practices as its co-investors.The structure of the fund is also designed to allow it to tap into the expertise of the best investors in the world – whom it also wants to attract. An investment committee, which will meet as needed, can approve deals up to $250m and will feature pro-fessional investors from Rus-sia and around the world.The supervisory board, which will meet four times a year, will determine the strategy and also approve deals of up to the $500m maximum. Government officials will join that board, but interna-tional institutional investors and professionals will make

ben aris BuSineSS new euRope

less risk for more reward

the appointment of Kirill Dmitriev to run the fund is a testament to its commercial nature

‘i am not a politician. i am a fund manager, and the primary goal of the RDiF is to earn returns for investors’

First person KiRill DmitRievceoRuSSian DiRectinveStment FunD

safety first: rdiF manager kirill dmitriev has a reassuring message for would-be foreign investors

up the majority. The final level of supervision will be an international advisory committee, composed of rep-resentatives from the lead-ing global funds, which will meet once a year.“There will be some no-brainer investments as the primary goal of the fund is to produce returns, but we also want to leverage the ex-pertise of our partners,” ex-plains Mr Dmitriev. Among the international in-vestors that have expressed

an interest and will proba-bly end up on the interna-tional advisory board are: Goldman Sachs, Blackstone, the Abu Dhabi Investment Authority, Kuwait Invest-ment Authority, China In-vestment Authority, Permira and Caisses des Depots. The point of roping in these big names is to create the same sort of creative discussion found at events like the an-nual Davos forum, with the difference that RDIF can ac-tually act on their insights.

$10bnThe amount of state finance allocated to the RDIF – limited to no more than 50pc (-1) per project.

$90bnThe amount of private equity the Kremlin is hoping the fund will attract from co-investors around the world.

6thRussia’s rank by size among world econ-omies. The number of people paid over $10,000 a year has tripled in six years.

the numbers

Alongside world stock ex-changes, the Russian stock market has lost, on average, one-sixth of its capitalisation since the beginning of August. By August 25, the RTS dollar index had dropped by 18pc, and the Micex index, denominated in roubles, by 15pc. “The Russian market has now stabilised,” according to Evgeny Osin, chief economist with the Finam managing company. He expects it to re-bound late in the third quar-ter or perhaps the fourth quarter of 2011. The slump on the Russian stock market was triggered by Standard & Poor’s down-grading the US credit rating. Micex and RTS beat the 2008 record daily falls by 5.33pc and 7.56pc respectively. The market bounced back 6pc be-tween August 10 and 17, be-fore plunging again. “Everything was plunging: it was Gazprom one day, Sberbank the next and Ur-alkali the day after”, says An-drey Kukk, Uralsib’s chief trader. The main reason was that investors were shedding

equities investors shedding risky assets cause plunge in share values

assets marked as risky in their portfolios – shares, that is – and moving them into the dollar and bonds with lower, but presumably guaranteed, yields. Simultaneously, the markets have moved into a period of greater instability, with daily Micex fluctuations reaching

8pc. This has prompted ex-perts to compare these leaps to the volatility of the mar-ket in 2008. Mr Kukk at-tributes the wild fluctuations to speculative investors. “Every spike has been initi-ated by short positions on any good piece of news from any country,” he says. Institutional investors risk less, trying not to lose any-thing. This will continue, he thinks, “until market players make up their minds about whether they are included in the current share prices”.According to Mr Kukk, four

main factors influence inves-tors on the Russian stock market: “Fear of sliding into a second wave of global re-cession; fear of a worsening debt crisis in Europe; insta-bility on the currency and commodity markets, and ge-opolitical instability.” Mr Osin points to one more factor: media reports with “a deliberately negative mac-ro-economic and financial character that were reflected in the business climate indi-cators and investor mood on the market.” Mr Kukk says investors

Moscow markets not immune to the global panic bug

taking the plunge: the rts dollar index fell by 18pc

the russian equities market lost everything it had gained over a year this month as investors sought security in cash and bonds.

igor VyuzhnyRuSSia now

Like most Europeans, Rus-sians are used to finding the Ikea brand stamped on their tables, chairs and meatballs, but they could soon find the ubiquitous blue-and-yellow logo displayed on their cred-it cards as well. The Swedish retailer is report-edly considering creating its own retail bank, joining a host of other shops and car man-ufacturers aiming to take ad-vantage of expanding con-sumer credit. While retailers enjoy the sales boost that credit schemes offer, the costs can add up if they leave the running and risk of the loans to a contracted bank.Credit Europe Bank current-ly provides the loans at Ikea’s stores across Russia, but an-alysts told The Moscow News that the company could cut its total costs by up to 2pc by setting up its own finance op-eration.The Russian daily Kommer-sant reported that Ikea would now set up its own bank in partnership with Ikano Finance, which is part of a group spun off from the re-tailer in 1988, but still con-trolled by Ikea’s owner, Ing-var Kamprad, and family.

retail banking Furniture giant to cash in on credit boom

the swedish retailer’s familiar blue-and-yellow logo could soon be appearing on credit cards in its russian customers’ wallets.

However, while retailers worldwide run their own credit operations, in Russia, only licensed banks can offer such services, so Ikano Fi-nance would have to apply for a banking licence. And after going through all the trouble it takes to be given a banking licence, it doesn’t make much sense to stop at offering loans to your own customers.For the moment, Henrik Jensen, managing director of Ikano Finance Russia, says that a final decision has yet to be made: “Ikano has been considering different oppor-tunities, including setting up a local bank, but so far we have not applied for bank registration,” he said.Other retailers, however, have set up their own finance op-erations, following the trend pioneered by a range of in-ternational car manufactur-ers, including GM, Volkswa-

Ikea plans to furnish Russian shoppers with bank loans

tim goslingBuSineSS new euRope

branching out: ikea may go into banking following the trend set by other firms

‘everything was plunging: Gazprom one day, Sberbank the next and uralkali the day after’

gen and Toyota. The French food retailer Auchan is expected to import its Banque Accord Group to Russia in the near future, while electronics retailer Svyaznoi teamed up with Promtorgbank to launch Svyaznoi Bank last year. The company hopes to develop Svyaznoi Bank into one of the leading financial institutions in the country. It has already issued 500,000 credit cards with loyalty schemes.The lure for these companies is the huge potential of Rus-sia’s under-leveraged consum-er. Consumer credit – partic-ularly at the point-of-sale and via credit card – is expand-ing again as consumers regain their confidence and turn to upgrading their homes and cars. But income and wage growth remains somewhat sluggish, which means that the growth in retail sales num-bers is increasingly being driv-en by consumer loans.“Retail sales increased 5.5pc year-on-year in May, almost unchanged from 5.6pc in April, despite the continuing decline in disposable income (down 7.7pc year-on-year) and subdued real wages growth (up 2.6pce year-on-year),” said Alexandra Evtifyeva, an econ-omist at VTB Capital. “The robust consumption growth is supported by an acceleration in retail lending (up 22.8pc year-on-year in May) in a tightening labour market.”

should rethink risk assess-ment: “What we see is a debt crisis, while investors move from shares to bonds, which is a paradox.” Some market players think the stock mar-ket is on the way to a slow recovery. Big investment banks have accumulated lots of money in their accounts, notes Pavel Dorodnikov, head of trading with Rye, Man & Gor Securities – but are not doing anything with it. The policy of the US and Eu-ropean regulators remains committed to supporting eco-nomic demand recovery, which implies rising share prices, including in Russia, Mr Osin points out. “The recovery may be rapid, considering that the EU and US have managed to resolve the situation, although it may have involved market shocks,” he says.Analysts with the Alfa-Cap-ital investment company think current Russian share prices are attractive for long-term positions. Mr Osin agrees: “Today, against the background of a stabilising market, we see a certain very gradual increase in the number of those wishing to open a long position.” So far, investors have no pointers in this country or abroad and many volatile days may lie ahead. Alexey Dolgikh, vice-president of Troika Dialog, says: “There is still a lot of uncertainty. Big investors are confused and are sitting on cash. So, there will be a lot of vol-atility; the market is emo-tional, but we do not expect a slump.”

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06 most readRussia now www.rbth.rusection sponsored by rossiyskaya gazeta, russia distributed with the daily telegraph tuesday_august 30_2011arctic convoys Life after borders: summer school as summit for

students from Russia and the EUhttp://rbth.ru/13165

figure on the school curricu-lum in Britain’s classrooms, but the story of the British and Allied sailors who braved what Sir Winston Churchill described as “the worst jour-ney in the world” has been taught in Russian schools since the war ended. It was Churchill who pro-posed the convoys, following Operation Barbarossa, Ger-many’s invasion of Russia. He promised to supply Stalin “at all costs”, knowing that, had Russia fallen, the full weight of the Nazi machinery would have been directed at the West. War Cabinet documents now available in the Nation-al Archives called for send-ing “the maximum this coun-try could afford… We must supply her with munitions to the limit of our ability. To do less would increase the dangers of Russia’s making a separate peace.”

the first convoysMr Alley, originally from Preston in Lancashire, was on the first Arctic convoy, code-named Operation Der-vish, which left Hvalfiourdur in Iceland on 21 August, 1941. By then, Norway and the Bal-tic states had been overrun by Germany, and the only way that supplies could reach Russia was through the ports of Murmansk and Archan-gel, which are both inside the Arctic Circle.He had twice tried to join the navy since war broke out but it wasn’t until his 18th birthday that he could be ac-cepted. He volunteered for the first active role that came along, which was for a radar operator, and after three weeks’ training he joined the destroyer HMS Inglefield. Be-tween August 1941 and March 1943, Mr Alley would make 15 convoy journeys to Russia in his ship from its base in Iceland. On that first journey to Arch-angel, HMS Inglefield was deployed as part of the screen for the convoy. “Most of the merchant ships were very an-cient,” says Mr Alley. Their cargo included 10,000 tons of rubber, 3,800 depth charg-es and magnetic mines and 15 Hurricane fighter planes. That summer, the weather was kind, and they reached Archangel on August 31. “Operation Dervish was dead simple,” Mr Alley recalls as he sifts through his boxes of memorabilia in the study of

his Weymouth flat. “There were no rough seas or any action, and there was virtu-ally 24 hours of daylight. The Germans didn’t wake up to what we were doing. We all thought that this was going to be easy.”“But after Dervish, the Ger-mans did wake up to what was happening. The Luft-waffe and U-boats moved to northern Norway, so the convoys had to keep as far north as possible.”

extremes of weatherOver the coming months, conditions grew increasing-ly grim. Convoys in winter sailed through almost com-plete darkness in tempera-tures so low that skin was flayed from bare fingers if they touched any part of the exterior of the ship – some-thing that happened to Mr Alley when he grabbed a ladder rail.He recalls the high seas, with waves as high as cliffs, that would set the ships on great roller coasters. Waves landed on decks as solid ice, which

had to be picked off at every spare moment, no matter the weather, as it was capable of capsizing a ship – and no one lasted long in the water. Four merchant ships sank purely through bad weather. Tales of fires, of terrible deaths and miraculous survivals were le-gion, some involving sailors as young as 14.Even when there was no ac-tion, with hatches and port-holes closed, life was far from cosy. “We were warm in our radar cabin, but the mess decks were terrible,” says Mr Alley. “From leaving Iceland to the Russian ports, we kept our hammocks up, and food and clothes were stacked in the hammock nettings under the mess table, in the offic-ers’ cabins, even in the en-gine room. The mess decks smelled and they were awash with water filled with dried peas and flour and other things. And practically eve-rybody on board smoked.”

disaster strikesWorking in the radar room, Mr Alley didn’t actually see

much action, though he could hear events on the radio. Most appalling was the fate of Convoy PQ17, the largest that had ever sailed. In July 1942, while HMS Inglefield was searching for the Ger-man battleship Tirpitz, PQ17 was ordered to scatter be-cause of reports that German warships were being refu-elled so they could intercept the convoy. Unprotected, the ships were picked off one by one in the worst setback of the campaign: 24 of 35 cargo ships were sunk. “We heard ships call for help and could do nothing about it,” Mr Alley recalls sadly. “We had our own job to get on with.”

In March 1943, after a year and a half of constant con-voy work, HMS Inglefield was sent to the Mediterra-nean, where she was sunk by a German glider bomb off Anzio in Italy. Mr Alley was rescued, but 33 of his com-rades died: their bodies re-main in the hulk of the heroic Arctic convoy ship, which still lies at the bottom of the Mediterranean.

death tollBritain’s Arctic convoys, based in Iceland and at Loch Ewe in Scotland, continued their journeys until May 1945. A total of 78 convoys delivered more than four mil-

lion tons of cargo, including 7,000 planes, 5,000 tanks and other vehicles, as well as medicine, fuel and raw ma-terials. In all, 101 ships were sunk, and some 3,000 Mer-chant Navy and Royal Navy seamen were killed by ex-plosions, fires and freezing water. The death toll among merchant ships was lower because their crews were far smaller. They were lightly armed and their guns were manned by the Royal Artil-lery. The RAF provided them with fighter pilots and planes that were catapulted from the decks, but with no way of returning. “We hated to see a Royal

Navy ship go down, because there would be so many on board,” says convoy veteran Jock Dempster, who managed to enlist in the Merchant Navy at the age of 16. Al-though he was young then, he says: “We appreciated the great dangers.”

mutual gratitudeMr Dempster, who is now chairman of the Russian Convoy Association (Scot-land), enjoyed his contact with Russians. “One time in Murmansk we gave away everything we had – we ended up without a stitch. We weren’t asked to, we just wanted to help.”

heroes of the world’s worst journey

medal recognises britons’ braveryEvery 10 years since 1985, Russia has struck a commem-orative medal to give to the British Arctic convoy veter-ans in formal recognition of the critical role they played in carrying vital supplies to Rus-sia. In Ocober 2006, the Brit-

ish Government issued veter-ans with the Arctic Emblem to show its gratitude for the hero-ism they displayed in the face of terrible hardship. The em-blem can be worn on the lapel but cannot officially be worn alongside campaign medals.

Alexander Kurganov is showing a photograph of a group of elderly people dressed in naval jackets: “This is a captain – he sailed for a long time. He was a good fellow, now dead. This one sailed with different ships and could tell many stories. He’s dead, too.” Then, as if it had just occurred to him, he says with some dis-may: “Of all of them, only five of us are still alive.”Now 83, Mr Kurganov lives in a flat in Murmansk, in the extreme north west of Rus-sia within the Arctic Circle. He became an assistant en-gine driver for the Lenin steam icebreaker in 1944, aged 15. The vessel cut a path through the ice for transport convoys travelling on the hazardous route across the White Sea to Archangel. Weapons, ammunition and food supplies transported on the ships by Russia’s allies saved many lives and helped win the war. It was a chance meeting that led to Mr Kurganov’s recruit-ment. “There were seven of us kids, and we lived with our mother in a village near

Rostov. One day, a naval of-ficer from Archangel came to our village on a business trip. He suggested that I should become a sailor,” says the vet-eran. At that time, only chil-dren, the elderly and women were left in the village – all the men were at war. Those who stayed behind ploughed the land, harvested crops and dug anti-tank ditches – six metres deep and nine metres wide. Mr Kurganov was a tractor driver and very good at handling equipment, which attracted the officer’s atten-tion. There was a shortage of crew for convoys, as profes-sional sailors were at the front. Consequently, teenag-ers were often recruited to work on the ships.

Following ordersAfter some brief training at a school for young sailors in Archangel, Mr Kurganov was selected to work on the ice-breaker. Soviet Russia had obtained the ship from Eng-land: the vessel was built in 1917 in Newcastle. “The mil-itary valued this icebreaker and tried not to put it at risk. It was only 7,000 tons, allow-ing it to sail in shallow water, which came in very handy when we were taking trans-port ships to Archangel. The steamer did a good job then,” the veteran recalls. If any of the crew fell over-board, the ship was not al-

lowed to stop. He could only be picked up by the next ves-sel, and only if he was in its path. If not, the man was doomed to die. Mr Kurganov recalls a trau-matic incident when the ice-breaker led a transport steamer from the ice into open waters: “After three farewell horn blasts, we re-turned to the ice where Ger-man submarines could not reach us. Suddenly, just half an hour later, the transport ship sent an SOS signal – it

had been torpedoed by a sub-marine. There were people dying, but we couldn’t go and rescue them since we had or-ders to retreat into the ice as far as possible. Everyone on that ship died.”

Foreign friendshipsThe icebreaker accompanied warships as well as transport ships through the ice. The convoy operations were co-ordinated by a special team of American and British sig-nallers, radio operators and

pilots – about 15 people in all, according to Mr Kurga-nov. “We worked, ate and went onshore together. And what’s interesting is that al-most all of them spoke Rus-sian. The radio operators were actually fluent, since they needed to be for their work. Of course, the foreign-ers dressed better than us. If we went out dancing or to a club, we were all in pea coats and simple flannel uniforms, while they wore denim jack-ets and coffee-coloured trou-

Clearing the way for cars, tanks, planes... and caviar

There is a continuing mutu-al feeling of gratitude, and a team of 11 specialists from St Petersburg recently came to London to repair the masts of HMS Belfast, the surviv-ing Arctic convoy ship which is now part of the Imperial War Museum. The £250,000 project was a donation from the Russians in appreciation of the convoys, though Brit-ain had benefited from them just as much as Russia.

celebrating the memoryThere were no official cere-monies in England to mark the 70th anniversary of the first Arctic convoy, but in Scotland a dozen veterans celebrated the event with a service at the Loch Ewe me-morial, organised by Mr Dempster and attended by Prince Michael of Kent and the Russian consul from Ed-inburgh. This was followed by a meal in the handsome Pool House Hotel at Poolewe, the former headquarters of the Loch Ewe naval base, where guest rooms are named after navy ships. In Aultbea, on the east side of the loch, a museum dedicated to the convoys is soon to be built by the village hall.Year by year the number of Arctic convoy veterans de-creases, from a height of 17,000 to around 200 today. Like many of his comrades, Mr Alley couldn’t attend the Loch Ewe memorial. Long retired from his career as an emergency planning officer, for which he was appointed OBE, he is in good spirits, but is recovering from a hip operation, making long jour-neys difficult. Plus, his wife Peggy, who was a Wren when they met during the war, has Parkinson’s disease. Steeped in memories of his Arctic experiences, though, he is writing a book about them. Fewer Christmas cards are exchanged with the Rus-sians he met, but he has warm memories of his visits, and maintains an interest in contemporary Russia. He can find information about the convoys on the internet, in-cluding videos of HMS In-glefield that have begun to appear on YouTube. “The children and grandchil-dren of many of the veterans have become interested in what we did, and they’ve kept the memories going,” he says. “It’s gratifying to think that the Arctic convoys will still be talked about in the years to come.”

sers. They had money, too.” The Germans attacked the convoys from their bases in nearby occupied Norway, but the there were fewer raids by mid-1944. “Towards the end of the war, German pi-lots took fewer risks: they would drop their bombs 100-200 metres away from us and then fly home,” Mr Kurganov recalls. He says that German planes were afraid to get close to civilian ships as even they had proper weap-ons on board: “We had three American-made anti-aircraft machine guns – two by the stern and one at the bow of the ship.”

trading cigarettesThe transport ships led by the Lenin icebreaker carried planes, tanks, cars – such as American Dodges and Stude-bakers – tractors and loco-motives. They also brought food, such as canned meat, and tobacco. “We even had caviar,” says Mr Kurganov. In Archangel, all the sailors re-ceived cigarettes with their rations: “We boys traded our cigarettes with the adult sail-ors for condensed milk.” He says the allies were gen-erous with food, which was then transported inland by rail, saving many lives. “At that time, the British and the Americans were a great help,” the veteran adds. In return, the Soviet Union supplied their allies with timber, ores and apatites (phosphate minerals). Deliveries from the United States and Britain along the Arctic convoy routes contin-ued even after the Second World War had ended, right up until 1946. Mr Kurganov’s icebreaker was in service until 1953, and he remained

in the north of Russia sail-ing with icebreakers and var-ious other ships until his retirement.

looking backSeveral years ago, at a meet-ing of veterans, Mr Kurga-nov met a British man who had been on a warship that had sailed with the convoys. He was very happy to meet Mr Kurganov, saying: “Oh, I

remember your icebreaker, it cut the way for us.” Another anniversary meet-ing of convoy crews was or-ganised this year in Archan-gel, also attended by British and Americans. But Mr Kur-ganov decided not to go. “My health isn’t so good now. Here, I have my doctors who know my illnesses and can always help,” he says. His health is also the reason he

has stayed in Murmansk, as his doctors recommend a cold climate for him.In his 83 years, this man has seen war, the heyday and collapse of the USSR, and the rise and fall of the navy – his life’s work. He has sur-vived a stroke and a heart attack, but you wouldn’t know it from looking at him. He has a calm, clear mind and a good memory. At home, he wears a warm sweater: it is cold but there is no heat-ing in summertime. Over cof-fee and sandwiches in his small kitchen, the pensioner says he is quite happy – he still has his wife, with whom he’s lived for several decades, and his two sons, as well as his grandchildren. There is something in the ap-pearance of this retired sail-or that evokes Moses, as he is usually depicted. “I have done my job, and now I would like to pass away without much suffering, quickly and painlessly,” he says calmly, as if speaking of something he cannot quite settle with God. He has, after all, taken care of everything else.

vladimir ruvinskyrussia now

veteran alexander kurganov tells of the dangers of life at sea and remembers fondly the foreign allies he met as his ship led the convoys.

pride and sadness: convoy veteran Jock dempster joined the navy at 16; he enjoyed socialising with the russians

arctic convoys a sailor on a russian icebreaker recalls how his vessel steamed ahead of the convoys, helping to keep the vital supply lines open

The number of convoys that made the gruelling journey to Russia.

Number of convoy ships lost between August 1941 and May 1945.

Number of Arctic convoy veterans alive today, from a total of 17,000.

78 101 200 the numbers

poignant memories: alexander kurganov joined the crew of the lenin icebreaker in 1944

‘The foreigners dressed better than us... they wore denim jackets and coffee-coloured trousers’

archangel honours those who diedA monument to the victims of the Arctic convoys with the inscription “To those who did not return from the sea” is to be erected in Archangel, one of the convoys’ two main destinations. At the time of going to press, the winning entry in the design competion had not been announced; the result was scheduled to be revealed at the four-day 70th anniversary celebrations at the end of August.archangel: destination port

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07MOST READ Two decades after Russia’s spring: why pushing back the reactionary coup was the easy parthttp://rbth.ru/13273

RUSSIA NOW WWW.RBTH.RUSECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA DISTRIBUTED WITH THE DAILY TELEGRAPH TUESDAY_AUGUST 30_2011 History

Power play: After standing firm against the plotters, Boris Yeltsin salutes the expectant crowd in Moscow

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Like many Russian children in August 1991, Ilya Poliveev experienced the drama of the failed coup against So-viet leader Mikhail Gor-bachev through his moth-er’s shocked expression, as the family watched televi-sion news and his parents anxiously exchanged whis-pers.“I can still recall lots of im-ages from the news: the Rus-sian White House with black burn marks and the look on Gorbachev’s face, which was the same as my mother’s,” recalls Mr Poliveev, 26, who

20th anniversary How the failed coup against Mikhail Gorbachev hastened the demise of the USSR and ushered in an era of dramatic change

Different generations of Russians express their feelings about the coup attempt that changed history, and its aftermath.

ANASTASIA GOROKHOVA AND VLADIMIR RUVINSKY RUSSIA NOW

lived in Magadan in Rus-sia’s Far North in 1991 and is now a stylist in Moscow.Twenty years ago this month, between August 19 and 21, Communist hardliners at-tempted to topple Mr Gor-bachev and thereby halt his reform programme, which was known as perestroika, and his proposed rework-ing of the documents gov-erning the Soviet Union. But the attempted putsch failed, and Muscovites ral-lied around Boris Yeltsin, the president of the Russian Re-public, who famously de� ed the hardliners by standing on a tank outside the White House, the seat of the Russian government. Mr Gorbachev was placed under house arrest in Cri-mea, but returned to Mos-cow after Mr Yeltsin’s suc-cessful stand. However,

Gorbachev was fatally weakened as a leader, and the dissolution of the Sovi-et Union began almost im-mediately. “The thing I most remember is fear,” says Svet-lana Prudnikova, who was a teacher in her 40s at the time. “But it was also a very active and promising time. Everything felt very real and energetic.”Vera Grant remembers dig-ging for potatoes at her grandparents’ dacha (second home) near Moscow, and the adults intently listening to the radio, even in the � elds. “The tension was thick,” says Ms Grant, now a 26-year-old concert promoter.But two decades after the founding of a new state, one that began with great hopes for democracy and prosper-ity, Russians are deeply am-bivalent about what has

been achieved in the inter-vening years, and the cur-rent trajectory of their coun-try. And that now colours their view of what happened in 1991, and whether the victory is worth celebrat-ing.A mere 8pc of Russians look back on the events of Au-gust 1991, and the subse-quent collapse of the Sovi-

et Union, as a democratic revolution, according to the Levada Centre, an inde-pendent polling agency. Echoing the sentiment of Russian prime minister

Vladimir Putin, 36pc de-scribe the fall of the Soviet Union as a tragedy, and 43pc dismiss what many see as a seminal moment in Russian history, the failure of the Au-gust coup, as nothing more than a power struggle among bureaucrats.“It was the illusion of free-dom and the illusion of change,” says Philip Bochk-ov, now an art director. He recalls that his family crawled around their Mos-cow apartment during the coup because it was near the White House and his neigh-bourhood was alive with ru-mours that snipers were on the roofs and randomly targeting people.“Today, no one � ghts for an-ything, but rather everyone is just always against some-thing,” says Mr Grant. But he adds: “It’s important that

No matter how daring the hopes of that August in 1991, it was to be expected that life, in the words of the poet Joseph Brodsky, “would swing to the right after swinging to the left”. And so it happened that the pendulum of Russian histo-ry swung from exciting reforms to the post-reform hangover; from the destruction of an ideology to its partial restora-tion and modernisation.After August 1991, it seemed to some people in Russia (in-cluding those who were at the top levels of power) that if we had only taken an axe to the visible signs of the Soviet ep-och – the hammer and sickle, flags with the red star and por-traits of Lenin – then the coun-try would have been trans-formed overnight.Even today, some people are inclined to think that the rea-son the country has returned to some Soviet-style meth-ods of governing is only be-cause, 20 years ago, the coun-try failed to settle accounts with its totalitarian past. For example, those who worked in the Soviet security services or held leading positions in the Communist Party were not de-prived of their rights and con-tinued to work in government.Although there were talks at the time about enacting such a ban, it didn't come about. Had this happened, it would have split society. The country wasn’t ready to draw a deci-sive, unambiguous line under its totalitarian past and that is why even today the longing for order is still present in society.After the Nineties (or the Yeltsin era), the era of Putin, which began in 2000, brought about stability. The landmarks of this period are: the end of

the hopes and illusions of the first post-Soviet years; the cri-sis of ideology and persistent yet futile attempts to find a national identity; the strength-ening of the state and its insti-tutions by the creation of the so-called power vertical (which was about centralised control); and the increase in nationalism and its subsequent metamor-phosis into xenophobia.Putin’s high approval ratings, combined with high oil pric-es, should have made it possi-ble to start reforms. But social concerns, such as the pension system, housing and communal services, the army or adminis-trative management, have not been addressed.How long will the current pe-riod last? The simplest answer is that it will end at the mo-ment when the price of oil and gas falls dramatically. But it is too one-dimensional to believe that at this moment both the economic and social spheres will be free from the excessive attention of the government and everything will evolve. If oil and gas prices fall, it could trigger a severe economic cri-sis that would destroy every-thing that has been cultivated by state capitalism or sover-eign democracy, and we may again face liberal reforms like those proposed by Yegor Gaid-ar and Anatoly Chubais. Re-form of the country will still continue one way or another, but in response to new chal-lenges and new political, eco-nomic and social needs.Will the movement towards real modernisation begin after the presidential elections in 2012? It must. Otherwise the stability achieved by sacrificing reforms will turn out to be an end in itself.

Valery Vyzhutovich is a political commentator for Rossiyskaya Gazeta.

COMMENT

It’s time to exorcise the ghosts of the totalitarian era

Valery VyzhutovichSPECIAL TO RN

Like many others on that memorable morning, I was roused by a telephone call. “Turn on the radio,” a col-league gasped into the receiv-er. “There’s a coup!”I dashed over to the radio to hear the impassioned present-er say: “Guided by the crucial interests of the peoples of our motherland, all Soviet people are to introduce a state of emergency... a state commit-tee (GKChP)... will be set up to govern the country.”The names of the committee members followed. When it came to the Soviet minister of defence, Dmitry Yazov, I re-called a conversation I had re-cently had with him. The min-ister was indignant when asked about rumours of a mil-itary coup being planned in the Soviet Union: “Why revolt against Gorbachev?” he ex-claimed. “Our deputies can sack him if he is not up to the job. We need no coup; we can achieve everything by consti-tutional means.”The printing office Pravda Publishing House, where my

magazine, Sobesednik, was published, received the order to “suspend until further notice” printing of all news-papers and magazines except Pravda, and some other pub-lications controlled by the government. Telephone calls and fragmen-tary messages arrived at the printing office showing grow-ing confusion both among or-

dinary citizens and leaders at different levels. The most zeal-ous hastened to swear alle-giance to the GKChP, send-ing their telegrams of support; but most adopted a wait-and-see stance.Meanwhile, columns of tanks and trucks full of soldiers were rolling into the capital. Under their cover, the GKChP members gave a press confer-ence for foreign and Soviet journalists. Vice-president Gennady Yanayev announced that Mr Gorbachev was in poor health, but his nervous-ness and insincerity were clearly audible.

During the coup attempt, Yazov did not leave his office – with Gorbachev in isolation, he was the only one left in control of the Soviet nuclear arsenal. Like the rest of the country, the army was split, and Yazov did his best to keep the armed forces from becom-ing directly involved in the standoff. At the same time, he knew that elite combat units, controlled by the KGB chief Vladimir Kryuchkov, had received orders to advance on Moscow. Those units stationed in Moscow had been placed on alert.During those three jittery days, no one could say for cer-tain how events would unfold. But Yeltsin led the way when he and his supporters stood on the top of one of the tanks surrounding the White House to denounce the coup attempt. Tank drivers on barricades began hugging protesters and mocking the rebellious gen-erals. And two KGB divisions advancing on Moscow were stopped and turned back. The GKChP realised it didn’t have the support it needed and the coup collapsed.

In August 1991, Alexander Yemelyanenkov was deputy editor-in-chief of the Sobes-ednik weekly and a deputy of the Soviet parliament.

Three turbulent days that shook the worldThe coup attempt brought the nation to a standstill, and the world watched in disbelief as the rebellion was finally abandoned.

ALEXANDER YEMELYANENKOVSPECIAL TO RUSSIA NOW

In the months after the fall of the Soviet Union, Western goods long banned by the Communist Party began to � ood into the country. Street vendors stocked their kiosks with soft lavatory paper, Levi’s jeans, good shoes and foreign-made cigarettes. But the irony was that most peo-ple could not afford them.“Many people yearn for a by-gone era, the symbols of

Then and now: the winners and the losersWhile some yearn for a return to the times of fixed wages and cheap bread and vodka, a new study shows most Russians are better off now than 20 years ago.

BEN ARISBUSINESS NEW EUROPE

which were vodka for 3.62 roubles (7p), sausages for 2.20 roubles (5p) and bread for 13 kopecks (less than 1p). Today, you cannot buy any-thing for a rouble. But has our existence worsened because of this?” asked Margarita Vodyanova in Obshchaya Gazeta. The minimum monthly sal-ary in 1991 was 548 roubles – then worth, at business ex-change rates, around $395 (then around £200), accord-ing to Yevgeny Gavrilenkov, chief economist at Troika Di-alog. However, this was still enough to have a decent life, as the state provided hous-ing, education, utilities, health, child care, holidays

and retirement homes. None of this was of particularly good quality, but it was uni-versally available, and it was all free. Back in 1991, the minimum salary could buy

74 loaves of bread or 6.2kg (14lb) of meat or 3.5 litres of vodka.A recent survey, conducted by the Higher School of Eco-nomics and the magazine Ek-

A time of fear and expectation

spert, on changes in Russian living standards between 1990 and 2009 found that in-come per head had increased by 45pc, while the volume of consumption per head had more than doubled, accord-ing to GDP-based consump-tion � gures.If you measure quality of life in terms of possessions, Rus-sians have much more now than they did 20 years ago. In 2008, you could buy 70 per cent more durable goods, 25pc more food, and two to three times more cigarettes, vodka, cars and clothing than in the Soviet era.At the same time, however, household spending on child-care and education has in-

creased substantially, along with spending on health care. The survey noted that the World Health Organisation found that Russian spending on private health care was now 40pc of total health-care spending – a level well above the EU average.The amount of living space that Russians have has also risen by about 40 per cent over the past two decades, to an average level of about 237 sq ft per person.But all these � gures are av-erages. Another recent sur-vey showed that one in � ve Russians today lives below the poverty line, and is worse off now than they were under the Communist regime.

Tank drivers on barricades began hugging protesters and mocking the rebellious generals

In terms of possessions, Russians have much more now than they did 20 years ago

Fallen idol: Mikhail Gorbachev, with wife Raisa and granddaughter Ksenia, returns to Moscow, a broken man

The 1991 crisis: what Russians think nowRussians are divided along generational lines over the coup attempt, a recent poll by the Levada Centre shows. The over-50s tend to see it as trag-edy that led to the collapse of the country and sent politics in the wrong direction, while younger people generally see it in a more positive light.

THE POLLS

things do not become like they were before.”Natalia Moshkina recalls a sense of jubilation in the crowds when her grand-mother and mother took her to the White House for a rally after it was clear the coup had failed.“There was a sense of ex-citement, democracy, of so-cial ferment,” said Ms Moshkina, now a 34-year-old advertising executive in Moscow. But looking back 20 years later, Ms Moshkina says that she remembers the time with a sense of de-spondency: “I have a feeling that the country missed a great opportunity. “As for me personally, I have become both more pragmat-ic and more cynical.”According to Boris Dubin, head of social and political studies at the Levada Cen-tre, “most Russians now see the Nineties in a negative light, associating the decade with economic collapse, chaos, cultural degrada-tion… while a minuscule number of the most social-ly active people talk about receiving basic freedoms.”He also notes that public hostility to the Nineties has been stoked by the Russian media, which has consist-ently described the decade as a period of unremitting chaos. “People became in-creasingly more disillu-sioned,” he says. “But dem-ocratic rhetoric has seeped into people’s pores.” The idea that democracy is a good thing has persisted as the principal legacy of the collapse of Communism. And Russians still hope that the promises of 20 years ago will be realised, even if they are unsure how, or even if, they can be achieved.For Irina Potapova, a 51-year-old masseuse who lives near Moscow, Russians still need to develop a civic awareness. Too often, she feels, public service is seen as a cash cow instead of a calling. “In politics,” she says, “corruption should be rooted out.”

Russians are deeply ambivalent about what has been achieved in the intervening years

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Royal history Exhibitions at Buckingham Palace and the V&A show close links between ruling families

From Fabergé artwork to the St James’s Park pelicans, the Russian royals brought many remarkable gifts for their British counterparts.

You no longer need to travel to Russia to taste its history. This year, visitors to Buck-ingham Palace are being treated to displays of both British and Russian royalty. Not only can you see Kate Middleton’s wedding dress eerily suspended in the ball-room, but the royal collec-tion of Fabergé is also on show until October. The collection by the great Russian goldsmith Peter Carl Fabergé contains some in-triguing objects. Queen Vic-toria’s silver-gilt notebook, a present from Tsar Nicholas II, is signed by all the Euro-pean kings and queens who came to Buckingham Palace for the Diamond Jubilee in 1897. From then on, British royals (especially Queen Alexandra) amassed a � ne collection of miniature tea sets, clockwork elephants, platinum-whiskered mice, quartz pelicans and dia-mond-studded eggs. There are also highly decorated ex-amples of the kovsh, a tra-ditional Russian drinking vessel, including one with an enamelled copy of a paint-ing of Cossacks by Ilya Repin. Fabergé artwork became the perfect inter-dynastic gift for the monarch who had eve-rything, and the gifts high-light the close ties between the Windsors and the Ro-manovs. The exhibition also contains some delightful photographs illustrating these ties, including an 1896 glimpse of Queen Victoria and the future Edward VII with Tsar Nicholas II and the Russian Imperial family at Balmoral. Nicholas II was a cousin of King George V as his mother was the sister of Queen Alexandra.Buckingham Palace is only one of many London venues

where you can explore royal Russian connections or ad-mire imperial bling – which is just as well, since entry tickets, which cost nearly £20, are selling fast. The V&A museum is an ideal budget alternative for a Rus-sian royal treasure hunt. You can see the gleaming blue and gold plates of the Krem-

lin Service, silver vodka cups and heraldic snuff boxes. The jewellery collection, which includes Fabergé, is particularly elegant. It con-tains a ruby-studded bouquet from the Russian imperial collection, and Catherine the Great’s dress ornaments, with their intricate silver leaves covered with brilliant-cut

diamonds. These were sold off by the Bolsheviks after the 1917 Revolution. But ex-changes went both ways: the V&A has a copy of a silver-gilt leopard that Charles I sold to Tsar Mikhail in 1627 (the original is still in the Kremlin).

Antique treasuresYou can also admire antique Russian jewellery at the his-toric Wartski store near Ber-keley Square. It is planning a special exhibition of Fab-ergé in May next year to cel-ebrate the Queen’s Diamond Jubilee; a signed photo of Ni-

cholas II on top of the safe reinforces the store’s royal connections. There are impe-rial chairs, upholstered in yellow, and cases full of smoked crystal or jade, with price tags that would buy a small house.

Royal residenciesSeveral of London’s finest houses served as refuges, party venues or hotels for royal Russian visitors. A party for Nicholas I at Chis-wick House in 1844 involved guests being ferried over the lake to admire four live gi-raffes brought in for the oc-

casion. One of the giraffes was said to have waded over towards the party to join them. The future Alexander III also stayed there with his family when on a summer trip in 1873.Peter the Great stayed in London in 1698. The young tsar, drawn to the Nether-lands and England by his passion for shipbuilding, moved to Sayes Court in Deptford, where he rented the mansion that belonged to the diarist John Evelyn. In the manner of modern-day, rock stars, Peter and his en-tourage trashed the house,

which led to its subsequent demise. Now lined with coun-cil � ats, Czar Street in Dep-tford, was so-named because of his visit. A statue of Peter the Great on the river bank to the east of Sayes Court Park serves as a grander me-morial of his visit. Created by the sculptor Mikhail Chemiakin, the tsar stands on a platform � anked by can-nons, between a throne and a laughing dwarf.Grand Duke Michael and his family moved into Kenwood House, on a beautiful slope of Hampstead Heath, in 1909. Despite the favourable loca-tion, he was unhappy because of his exile from Russia and his unsuccessful attempts to gain a British title for his morganatic (non-royal) wife. George V wrote to Nicholas II complaining about “that good fool Michael”, and told him regretfully: “I have not the power to grant a title in England to a foreign subject, and it is still more impossi-ble in the case of a Russian Grand Duke.”Clarence House, official res-idence of the Prince of Wales, was once home to Prince Al-fred in the late 19th century. His wife, Grand Duchess Maria, daughter of Alexan-der II, once had a Russian chapel built there. It no long-er exists, but a similar chap-el survives at 31 Welbeck Street (now home to upmar-ket offices). George V attend-ed a memorial service there for Nicholas II in 1918. With its dome, paintings and

The Tsar’s gifts: a London treasure hunt

Imperial style: above, the royal collection of Fabergé, currently on display at Buckingham Palace; right (from top), a copy of the silver-gilt leopard, bought by Tsar Mikhai from Charles I, at the V&A; statues above the door to Westminster Abbey include the Russian Grand Duchess Elizabeth (far right); Queen Victoria at Balmoral with Edward, Prince of Wales, right, Tsar Nicholas II of Russia, and Tsarina Alexandra holding her baby daughter, Grand Duchess Tatiana

PHOEBE TAPLINRUSSIA NOW

Cyrillic inscription, it now makes a beautifully incon-gruous setting for business meetings and conferences.According to Frances Di-mond, former curator of the Royal Photograph Collection, these visits from Russian roy-als exemplify “the links that have been there for centuries between Britain and Russia, going on quietly even when officially the governments were at war”.She adds: “I like the idea that London was a meeting place for these people… it is fas-cinating to imagine them here, moving about among familiar places.”

A martyr immortalisedAbove the door to Westmin-ster Abbey is a row of stat-ues commemorating modern-day martyrs who died in circumstances of oppression and persecution. One is of Grand Duchess Elizabeth. A granddaughter of Queen Vic-toria, she founded a religious house in Moscow after her husband was assassinated in 1905. Ms Dimond says it con-tained “nuns from all walks of life, who cared for the poor and the sick”. In 1918, Elizabeth was mur-dered by being thrown down a mine shaft. (The White Army later found her body and buried her in Jerusalem.) The connections between the two royal dynasties means that the Duke of Edinburgh walks beneath a statue of his great-aunt whenever he vis-its the abbey.Fabergé artwork

became the perfect inter-dynastic gift for the monarch who had everything

Several of London’s finest houses served as refuges, party venues or hotels for royal Russian visitors

“There’s something in here,” says Marius Stravinsky, pointing at his chest. “They talk about the russkaya dusha, Russian soul. It’s very strong.” British-educated Stravinsky, chief conductor of the Karelia Philharmonic Orchestra (KPO) at the re-markably early age of 32, is explaining why he feels Rus-sia may now be his home.“When I came to Russia at the age of 23, I thought I’d be in Russia for about a year to get my technique. But I found I couldn’t leave, and I thought there must be a rea-son for that. I really love it, and I think of myself as Rus-sian. I just can’t see myself going back to England in the near future.”Stravinsky, who is one of the youngest conductors ever to hold the KPO post, was not even 30 when he was ap-pointed in 2007. A British cit-

Music Conductor introduces his beloved English composers to Karelia

Born in Kazakhstan, but trained at elite institutions in England, Marius Stravinsky is a cultural ambassador with a unique musical vision.

izen, he was born in Kaza-khstan but his family moved to Moscow, and then to Brit-ain when he was 10. Educat-ed at Eton, and a graduate of the Royal Academy of Music, he studied conduct-ing with Vladimir Ponkin in Moscow, and has worked with orchestras in Russia and Europe, including the Royal Philharmonic. As the cultural ambassador for the Petrozavodsk-based KPO, he has become some-thing of a local celebrity, and

The musicians make the ma-jority of the effort. The con-ductor is there just to show the way. I think conductors these days have a lot less re-sponsibility in terms of how the orchestra actually sounds. Over the past 50 years, or-chestras around the world have improved so much. Now I think it’s important to have an artistic vision more than anything else. Musicians re-spond better when they’re guided lightly.”Having conducted orchestras all over the world, these days Stravinsky prefers to work in Russia because he feels there is a sense there that anything is possible. “In Rus-sia, you really can do anything you want if you set your mind to it, which is really important to me. I can programme the British com-poser Thomas Adès, Bartók, Stravinsky, or Mahler. Of course, career-wise, you must never take your eyes off the ball in terms of trying to work with the best musicians available, who are actually based in the West. So it’s al-ways a balance.” When asked how he has man-aged to come so far so fast in a profession which is tra-ditionally associated with older musicians, he states that he still has much to learn: “There’s no such thing as a young conductor. I’m not as good as anyone who’s 40 or older.”

The young British maestro with a Russian soul

England’s glory: Stravinsky is a fan of Elgar and Britten

JACOB GORDONSPECIAL TO RUSSIA NOW

is known for his advocacy of British music, which is rare in Russian concert pro-grammes. “When I � rst ar-rived in London, my music education in Moscow had al-ready [given me] the idea that English music is not of high quality; I had been taught that Russians and Germans were the best,” says Stravin-sky. “Then I actually listened to some Elgar, and fell in love with it. It’s great music, but they really don’t know it here in Russia. I can’t believe I

brought the Elgar Enigma Variations [to Karelia], be-cause it’s so well known. The same was true of works by Walton, Vaughan Williams, and Britten.”Stravinsky’s pride in his orchestra is obvious. “The Karelia Philharmonic is one of the best regional orches-tras in Russia,” he says. “We’re also one of the poorest, since we don’t get any support from big business. But the musicians are so good they keep things moving along.

night. He soon finds his hobby, which he calls “urban extreme”, turns into a cult, but then it is turned into a commercial enterprise. Peter talks passionately about his concept of “blithe fury” which involves him battling through rainy streets and pushing back the wind. But by the time the internet-savvy Nemo – aka Alex – and the business-minded Sergei have com-mercialised his hobby, there is no longer any space for the passion that drove Peter out into the stormy nights. To produce a marketable video, they must wait for a sunny day.The narrator uses the sum-mer heat of a provincial Russian city as a metaphor for the conformism of the “urbanites” around him; to be “normal” is “to smile in the orange air of July”. This rejection of social conven-tions appeals particularly to

Young Russian nov-elists are now of-fering a contempo-rary dimension to

the country’s celebrated literary tradition. Unbur-dened by the Soviet bag-gage of their forbears, but uncertain about Russia’s future, younger writers are looking honestly at their surroundings.In his short novel Rooftop Anesthesia, which is now translated into English, Pavel Kostin does just this. Set in a decaying urban landscape of skyscrapers and street lamps, it follows the introspective Peter in his attempts to escape the pressures of modern life by scaling the tallest build-ings in his home town by

BIBLIOPHILE

Street-smart view of urban alienation

TITLE: ROOFTOP ANESTHESIA AUTHOR: PAVEL KOSTINPUBLISHER: GLAS

the booming young-adult market. One enthusiastic teenage reader described the novel as “imaginative, grip-ping, original and lyrical”. For older readers, there is an intriguing freshness in the raw innocence of a writ-er still � nding his voice.The book is vaguely remi-niscent of Venedikt Erofeev’s iconic prose poem, Moscow Petushki, the rambling 1969 monologue of an alcoholic intellectual on a train. The playful, postmodern style of Rooftop Anesthesia switch-es from philosophical rhet-oric to the science of alco-hol decomposition in the liver. Both works share the same underlying message that, ultimately, the only sane reaction to living in an insane world is to attempt to escape.The English translation of Rooftop Anesthesia is pub-lished together with Andrei Kuzechkin’s Mendeleev Rock – another serving of youth alienation and group dynamics in the city, with side orders of violence, in-cest and rock’n’roll. Andrew Brom� eld, who is well known for translating Boris Akunin’s successful historical whodunnits, has provided serviceable rendi-tions of both authors’ use of street slang and of their streams of consciousness.

FACT FILE

AGED FOUR Marius Stravinsky starts playing the violin.

AGED SIX Joins the Moscow Central Music School.

AGED 10 Attends the Yehudi Menuhin School for musically gifted children in Surrey.

AGED 13 Becomes the first former Soviet student to secure a scholarship in music at Eton. Begins his conducting training at the same age.

Pelicans: fi rst migrants from RussiaNext time you take a stroll in St James’s Park, take a look at the fish-guzzling pelicans. They are the descendants of the 17th-century pelicans brought to London as a gift to Charles II from Tsar Alexei (Peter the Great’s father).

Read more about Russia-related places in London atwww.rbth.ru/13172

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