Monday, September 30, 2013

Top 5 Russian innovations at the MAKS-2013 airshow

Children's pictures promote tolerance all over the world

Technology Culture

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Special supplement from Rossiyskaya Gazeta (Moscow, Russia) which takes sole responsibility for the contents.

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Economy Key deals lay future foundations for UAE-Russia investments and trade

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The ongoing evolution of UAE-

Russia business relations means

the two nations are now looking

towards the long term.

New grounds for cooperation

Business cooperation between Rus-sia and the UAE is expanding into mutual investment projects that lay a foundation for the exchange of innovative ideas and practices through business partnerships. These partnerships include joint projects in nuclear power, renew-able energy, sea, ports and road infrastructure, tourism and other areas.

According to the UAE Federa-tion of Chambers of Commerce and Industry, UAE investments in Russia are estimated at AED 81 billion (US$ 22 billion).

The UAE has recently commit-ted to investing up to US$5 bil-lion into Russian transport infra-structure, as Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Com-mander of the UAE Armed Forc-es, on behalf of Abu Dhabi De-partment of Finance and Kirill Dmitriev, Head of The Russian Di-rect Investment Fund (RDIF) signed a memorandum of coop-eration on September 12, 2013 in Moscow.

The US$5 billion represents the largest investment made by the UAE into the Russian economy so far. According to RIA-Novosti, the investment will take 7 years to complete and fi nancing of the Rus-sian infrastructure will come on a project-by-project basis. The projects will include a fast-speed train line between Moscow and Kazan, construction of the Mos-cow city ring road in Moscow’s

outskirts and an overhaul of the Trans-Siberian railway.

The rise in investment appetite has been fostered by the ratifi ca-tion of the UAE-Russia Agreement on Securing Bilateral Investment at the end of last year, as well as by the launch of RDIF (the Rus-sian Direct Investment Fund), cre-ated to give major foreign inves-tors reassurance through sharing investment risks with them. These events also spurred the signing of

other important UAE-Russia co-operation agreements.

Also, in June this year, the Abu Dhabi-based Mubadala Develop-ment Co and RDIF set up a co-investment fund, with each party pledging to contribute US$1 bil-lion. The fund has been set up to cover long-term investment op-portunities across a range of in-dustry sectors in Russia, and proj-ects will be financed on a deal-by-deal basis. The agreement

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IN THIS ISSUE

You need to be one of the world's largest producers of the metal to have a heart of gold.

Special report

YEKATERINA POKROVSKAYASPECIAL TO RBTH

Following the key deal between

Russia and the US, Syria has

agreed to abandon its chemical

weapons stockpile. Yet what

exactly are the Kremlin's motives?

Why is Russia so tough on Syria?

Many question why Moscow con-tinues to defend Syrian President Bashar Al Assad, a man who West-ern media paint as a bloodthirsty dictator and war criminal. Pun-dits quote Russia's geopolitical am-bitions and multibillion-dollar arms sales. But a closer look re-veals a different picture.

Firstly, it should be understood that the presumed strategic alli-ance between Russia and Syria is a myth. Their relations have al-ways been of a pragmatic nature. In fact, relations were frozen dur-ing the 90s and remained that way until 2005 because of Syrian debt, which had reached $13.4 billion. Damascus wanted it relieved while Moscow demanded cash for arms and other export goods.

After the debt issue was resolved in 2005, most of it was written off and only about $1.5 billion was directly invested in joint projects. Only then did trade and military cooperation resume. Although Syria paid about $2 billion to mod-ernise its Soviet-era arsenal, by then Russia was no longer Damas-cus' sole client, as it had been in the Cold War -Syria now had other sponsors and lacked the military and political clout needed to pro-mote Russian interests in the re-gion. Even at the UN Russia did not always back Syria – in 2005 Moscow voted for the withdrawal of Syrian troops from Lebanon.

NIKOLAY SURKOVRBTH

was announced at the 2013 St. Pe-tersburg International Economic Forum.

In December, 2012, Russia’s larg-est bank, Sberbank, and the UAE’s Invest AD, a subsidiary of the Abu Dhabi Investment Council, the UAE sovereign wealth fund hold-er, signed an agreement to coop-erate on investment in the Rus-sian and Middle East markets.

Crown Prince of Abu Dhabi and Deputy Com-

mander of the UAE Armed Forces Moham-

mad Bin Zayed Al Nahyan (l) visited Moscow

in early September for bilateral talks.

GLEB POSTNOVSPECIAL TO RBTH

Held in the capital of the Republic

of Tatarstan since 2006, the star

of the Kazan International Festival

of Muslim Cinema is rising.

Islamic cinema takes centre stageCulture Film festival focuses on the interaction of cultures and civilisations

The Russian city of Kazan's repu-tation as a fi lm forum has been lift-ed to the heights of Berlin and Ven-ice by renowned Russian director Karen Shakhnazarov, who headed the jury. The festival programme abounded with high-quality pic-tures from Russia, Iran, Syria, Tur-key, Saudi Arabia, as well as France, Germany, Italy, and other Eastern and European countries where Islam is present or predominant.

From the 50 fi lms that made up the body of the programme, Shakhnazarov's jury chose the best ten. The main prize — a golden statuette depicting the Syuyum-beki Tower (a legendary tower in-side the Kazan Kremlin that bears the name of the last Tatar queen) — was awarded to Serbian direc-tor Srdan Golubovich for "Circles," a portrayal of the groping efforts to fi nd a fragile peace amidst the chaos of a bloody civilian massa-cre in a sectarian war. Egypt's Hala Lotfi won the prize for best direc-tor of a feature fi lm for her fi lm "Coming Forth by Day." The award for best screenplay was given to Iranian duo Marjan Ashrafi Zadeh and Ali Asghari for the fi lm "The Wet Letters." The best featurette was the Kazakh picture "Father."

The capital of Tatarstan aims to become a centre of Islamic culture.

The UAE has recently committed to investing up to US$5 billion into Russian transport infrastructure.

For each metropolis

For each strip of taiga

For each supermodel For each of you

there is an off-the-beaten-track village.

there is a new techno-park.

there is a CEO.there is a Russia of your choice.

RBTH for iPad

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02RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_MONDAY_SEPTEMBER_30_2013Politics&Society

Proposed plan will allow transit

passengers who fly through

Moscow to stay in Russia for three

days without a visa.

Russia to offer 72-hour visa-free travel for transit tourists

According to a draft bill approved by the Government Legislative Commission, foreign nationals ar-riving in Russia in transit from specifi c countries (a list to be ap-proved by the Russian government) and via international airports for the purpose of tourism will be able to stay in Russia for up to 72 hours without a visa.

Thus, while waiting for their fl ights, tourists will be able to leave the airport to visit the city.

For now, the 72-hour visa ex-emption will apply only to tour-ists fl ying into Moscow, St. Peters-burg, Kazan and several other cities. However, it is possible that the plan may be expanded in the future to cover other parts of the country.

The bill is expected to pass through parliament before the end of the year. Its adoption will help promote an increase in inbound tourism through the Moscow trans-portation hub.

How to arrive without a visaPassengers who wish to stay in Russia for 72 hours without a visa must have proof of identity, au-thorisation for entry (if required), medical insurance for the dura-tion of their stay in Russia and proof of a hotel or tour booking.

A separate requirement is that the tourist must fl y out of Russia on a Russian airline. To receive vi-sa-free transit for 72 hours, the passenger must “present an airline ticket from a Russian carrier with the confi rmed time of departure.”

DARYA GONZALESRBTH

Why is Russia so tough on Syria?The notion that Moscow is pro-tecting murderers of innocents while the West champions bright-eyed freedom fi ghters is another popular myth. In reality there have been as yet no unbiased interna-tional investigations of the events in Syria. Neither the Arab League nor the UN can place sole blame on the government, which most likely used excessive force in the early days of the crisis, but whose actions have since been equalled in cruelty by its adversaries.

From a political standpoint, for Russia, Assad’s government is a minor evil. Moscow sees its defi -ciencies and has consistently called for reforms. But a rebel victory is likely to plunge Syria into chaos that will engulf the whole region.

Last but not least is the wider geopolitical perspective. Since 2003, Russia has watched the US and its allies meddle in Middle Eastern affairs, embark on mili-tary interventions, arrange and sponsor revolutions. This has left no real legacy of democracy in Iraq, Afghanistan or Libya, just casualties and instability.

Vasily Kuznetsov, assistant pro-fessor in the faculty of world pol-itics at Moscow State University, told RBTH that Russia is defend-ing not only Al Assad but the es-tablished philosophy of interna-tional relations and the concept of sovereignty. “Moscow is also try-ing to maintain stability in the Middle East for the sake of its own security. Otherwise the chaos will spread and hit Russia’s southern regions. I mean the spread of rad-icalism”, explained the expert.

According to Kuznetsov, there are numerous reasons to believe that the crisis will undermine re-gional stability: “Firstly, interven-

There is one more dimension to the crisis that means Russia is un-likely to stay out of it. About 30,000 Russian citizens remain in Syria, mostly women and children from mixed families. If the rebels win, all of them will be in danger.

Marina Sapronova, professor at Moscow State Institute of Foreign Relations, believes that Moscow’s stance cannot be based only on economic or military interests. “Bi-lateral trade is insignifi cant - only about $2 billion. Syria is not a major buyer of Russian arms - in that respect India, China and Ven-ezuela are much more important”, she says. “Yet Russia cannot ignore the fact that Syria has become a training ground for militants who may later reappear in Chechnya or Dagestan and provoke a new surge of terrorism.”

CONTINUED FROM PAGE 1

Russian naval ships in the Mediterranean

tions in Afghanistan, Iraq and Libya only led to an increase in violence. Secondly, military inter-vention automatically rules out a political transition. Finally, the op-position is fragmented and is full of radicals linked to Al Qaida”.

Fight against corruption is a vote-winner

Elections Russia's opposition puts on a strong showing in recent local elections

Opposition parties have ad-

opted a strong stance against

corruption to win support

among voters.

Battling graft has emerged as a

rallying cry for Russia’s

opposition, yielding victories at

the ballot box. Analysts hope the

business climate stands to profit.

ARTEM ZAGORODNOV RBTH

In late 2011, Dmitry Bykov, the charismatic Russian TV host-turned-opposition leader, stepped up to the podium in central Mos-cow and spoke to thousands of Russians who had gathered to pro-test the alleged rigging of parlia-mentary elections.

“A real civil society has been formed in Russia, and it won't dis-appear,” Bykov told the cheering throng, whose very appearance be-lied longstanding assumptions about the apathy of Russian vot-ers. “Never before in Moscow was there such a feeling of unity and determination.”

Nearly two years later, Bykov and his allies believe the momen-tum is still in their favour. Despite widespread approval for President Vladimir Putin in opinion polls, analysts say opposition fi gures are capitalising on rising frustration with corruption.

Pro-business and anti-corrup-tion platforms helped propel op-position fi gures to previously un-

imaginable recognition and importance in regional elections this month, including a signifi cant showing in Moscow's mayoral vote.

“Russia's economic growth and societal development over the last decade has reduced tolerance for corruption,” said Dmitry Butrin, business editor at leading daily Kommersant.

The electoral results will put pressure on the Kremlin to keep Russia’s economy healthy, said Chris Weafer, Senior Partner at Macro Advisory, a Moscow-based research consultancy.

“The protests of late 2011 and early 2012 are fi nally starting to deliver a positive legacy,” Weafer said. “Investors, far from fearing the political trends may lead to instability, should be much more encouraged that this process of change may soon start to add a greater focus on promised, still slow-moving, reforms.”

Anti-corruption activist lawyer Alexei Navalny initially gained prominence after alleging the theft of billions of dollars from major state-owned corporations. This month, he emerged as the de facto leader of Russia's fragmented op-position after garnering an impres-sive 27 per cent in Moscow's may-oral elections, taking second place.

Navalny has fi led a suit, claim-ing electoral fraud. But many Kremlin critics said the elections appeared to have been more open than expected.

“I was impressed. Fair elections have returned to Moscow,” wrote

Yulia Latynina, Kremlin critic and talk show host, in Moscow’s Eng-lish-language daily newspaper, The Moscow Times.

In the Urals city of Yekaterin-burg, prominent anti-drugs cam-paigner and politician Yevgeny Roizman, from billionaire Mikhail Prokhorov's Civic Platform party, upset the pro-government candi-date to win the mayoral election.

An opposition candidate also won the mayor’s seat in Petroza-vodsk, capital of Russia's Karelia region.

In Moscow, Navalny led a US-style grassroots campaign, deliv-ering over 100 speeches in the month before the vote. His slogan read: “We'll change Russia. We'll start with Moscow.”

However, Putin's popularity re-mains steady. The Levada Centre, Russia’s respected independent polling agency, put his approval rating at 65 per cent in July.

Leonid Polyakov, Head of the General Political Science Depart-ment at the Higher School of Eco-nomics, says the public’s rising

frustration with corruption could have long-term economic benefi ts.

“Fighting corruption was a pri-ority for many politicians who at-tracted support from voters, so pressure on corrupt officials is like-ly to increase,” Polyakov said. “The fact that the elections were con-ducted fairly and openly also rais-es the legitimacy of the entire po-litical system. Nothing will be turned upside-down overnight. But both these factors will have a pos-itive effect and provide new op-portunities for business."

The electoral results will put pressure on the Kremlin to keep Russia's economy healthy

Interventionism has left no real legacy of democracy in Libya, Afghanistan or Iraq, just casualties and instability.

03RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_MONDAY_SEPTEMBER_30_2013 Economy

ARTYOM ZAGORODNOVRBTH

Economists predict downward

pressure on Russia’s currency will

boost tax revenues and provide a

fillip to carmakers and local

vendors. This time, oil exporters

will miss out on the party.

Falling ruble to boost industry, state coffers

Trends A host of factors is pushing currency down but there may be a silver lining.

Russia’s falling ruble may provide a boon for government coffers and a bonanza for the nation’s car in-dustry and other vendors, prompt-ing Russians to buy local as the currency hits its lowest level against the dollar in four years.

largest in Europe.” Carmakers that may benefi t include local giants VAZ, GAZ and Sollers.

At the start of 2013, the ruble traded at around 30 to the dollar. Today it trades at around 33 per dollar, though some economists predict the currency may sink to as low as 37 per dollar by the end of the year, especially if the price of oil, Russia’s main export, falls.

The ruble is only partly free-fl oating. The currency is allowed to trade within a range against a dollar-euro basket set by the Cen-tral Bank of Russia, which has spent $11 billion propping up the currency since this spring as it al-lowed the band to slip, according to Bloomberg. Russian policymak-ers aim to allow the currency to fl oat freely by 2015.

“In 1998, Russian oil companies paid almost nothing in taxes,” Weafer said. “Today the combined tax burden approaches 90 per cent. So the real benefi ciary is the state budget.”

Tax receipts from oil exports provide a buttress to Russian sov-ereign debt, Weafer said, creating a possible opportunity for yield-hungry investors looking for fi xed income with low risk.

The falling ruble should provide local vendors a hand in capturing the Russian consumer, a group that is increasingly targeted by global retailers as rising incomes boost purchasing power in Europe's larg-est country by population.

A recent World Bank study ranked Russia as Europe’s largest economy, and the world’s fifth-largest in terms of purchasing power parity.

“Nowadays, the disposable in-come of the average Muscovite ex-ceeds that of the average Housto-nian,” said Edward Verona, former President of the US-Russia Busi-ness Council.

Experts believe that the falling ruble should help local vendors to capture the Russian consumer.

A host of factors have combined to push the ruble down, from fears about the end of quantitative eas-ing by the US Federal Reserve to statements by Russian Finance Minister Anton Siluanov that a weaker ruble would have econom-ic benefi ts for Russia.

Sluggish performance in the Eu-ropean Union, Russia’s largest trading partner, and less-than-rosy forecasts for GDP growth have also had an effect.

But unlike the historic ruble de-valuation of 1998, when Russia’s oil companies booked windfall

ruble profi ts by selling crude in dollars, new tax rules mean the state will collect most of the sur-plus oil profi ts this time.

Domestic fi rms that target the Russian shopper, on the other hand, should get a lift, as Made in Russia becomes more competitive.

“The costs of imported goods will increase, and one of the big-gest winners will be Russia’s bur-geoning auto industry,” said Chris Weafer, founding partner of Mos-cow-based Macro Advisory. “Rus-sia’s auto market will soon over-take Germany to become the

New grounds for cooperationCONTINUED FROM PAGE 1

Teaming up on energyOn December 17, 2012, in Abu Dhabi, Russia and the UAE signed an agreement on cooperation in the peaceful use of atomic energy.

Earlier, in August 2012, Tekhs-nabexport (TENEX), a state-owned Russian company, under-took to deliver about 50 per cent of the uranium product supplies and enrichment services necessary for manufacturing fuel assemblies for the UAE’s fi rst nuclear plant. First deliveries are planned for 2014.

Demand for gas in the UAE is also growing, due to a growth in population and industrial needs. Crescent Petroleum and Rosneft are currently carrying out a joint exploration of gas deposits in a 1,250-square-kilometre zone in Sharjah, UAE. Badr Jafar, Presi-dent of Crescent Petroleum, high-lighted the importance of the UAE-Russia bilateral relationship: “Together, these two countries ac-

count for 36 per cent of the world’s oil production and 29 per cent of the world’s gas production, and yet we are only just beginning to realise the full potential of this bilateral relationship. In a glo-balised energy and logistics world, the UAE and Russia are natural partners.”

UAE to invest in sea ports UAE-Russia bilateral investment and trade is also expanding into sea and port infrastructure.

According to Jafar, who is also the managing director of the Cres-cent Group and the CEO of Cres-cent Enterprises, Gulftainer is set to invest over US$300m in the next fi ve years in Russia, thereby in-creasing its port coverage in the Baltic and the Black Sea areas. Gulftainer has also committed to an investment in the Ust-Luga port, 110 kilometres from St. Pe-tersburg. “The new deep-water terminal is set to become the big-gest port infrastructure project in the Russian Federation,” he added.

Global projectsAfrica is now emerging as one of the most important markets for the UAE.

According to Yury Tarilov, Re-gional Director of the Russian-Emirates Business Council (REBS), the idea of using Russian Railways technology and UAE fi -nancing for developing rail infra-structure in countries like Sudan and Namibia has found support from Saif Ahmed Belhasa, a co-chairman of REBS on behalf of the UAE, and chairman of the Saif Belhasa Group of Companies.

5 billion USDThe amount the UAE is to invest into Russian port, road and bridge infras-tructure within the next seven years

22 billion USDThe total of Emirati investments in Rus-sia, according to the UAE Federation of Chambers of Commerce and Industry

THE NUMBERS

Nikolay Surkov, RBTH

TATIANA LISINASPECOIAL TO RBTH

Soon, Transaero Airlines fl eet will be joined by an unusual aircraft: a Boeing 747 covered with co-loured handprints. This plane will perform the "fl ights of hope," dur-ing which passengers will be able to make donations to help chil-dren with heart, brain and spine diseases. The meaning of the palm prints is simple — passengers are offering a helping hand to chil-dren in need. And the fi rst to lend a hand was Transaero CEO, Olga Pleshakova.

The Tatarstan Investment

Development Agency (TIDA) has

developed a five-year plan for the

creation of a Regional Centre for

Islamic Finance in Russia and the

CIS.

Transaero charity flights to reach UAE

Kazan welcomes Muslim investorsFinance Tatarstan may become a centre for attracting capital from Islamic countries

fl ows, the developers plan to cre-ate a regional regulatory bank in Kazan.

According to the press service of TIDA, “The main objective of the project is to stimulate the de-velopment of Islamic fi nance in the Russian Federation by pro-viding an alternative to tradition-al banks, not just for the Muslim population, but also for people of other faiths. Moreover, Islamic fi -nancial instruments are a means of attracting investments from Muslim countries.”

Olga, what prompted your compa-

ny to take part in this charity action?

Transaero is aware of its social re-sponsibility and has been involved in charities since 2007.

Now, in cooperation with the Life Line Fund, we are about to launch

According to estimates developed by Thomson Reuters, during this period the CIS countries could raise about $28 billion in invest-ments from Malaysia and Gulf states. To coordinate the fi nancial

Transaero's CEO Olga Pleshakova

was the first to leave a handprint.

It is quite clear why Kazan has been chosen as the hub for Islam-ic investments. Tatarstan has ac-cumulated considerable experi-ence in international projects and contacts with investors from Mus-lim countries.

Kazan has repeatedly hosted major international events devot-ed to Islamic business and fi nance. Support and widening of invest-ments will be one of the key is-sues at the upcoming Fifth Inter-national Economic Summit of Russia and the Countries of the

OIC, which will be held in the capital of Tatarstan in October.

According to experts, Islamic investors are showing interest in Russia due to both economic and geopolitical factors. Alberto Bru-gnoni, chairman of the Italian nonprofi t organisation ASSAIF, says: “Muslim investors simply cannot ignore Russia due to its huge size, its raw material re-sources, the size of its Muslim population and its proximity to several strategic Muslim coun-tries in Central Asia.”

the "Flight of Hope" programme, which will help to promote a cul-ture of charity and give passengers an opportunity to do a good deed. The funds raised from the fl ights will go to the Life Line Fund, and donors will be able to keep track of how their money is spent sim-ply by going online.

Who came up with the idea for the

design of the liner?

The idea of in-fl ight donations was proposed by the Lifeline Fund, and we offered to provide a special plane for the "fl ights of hope."

Which routes will the "flights of hope"

cover?

To begin with, they will fl y to Rus-sia's Far East and the US. I also plan to take the "Flight of Hope"

plane to the US in December. After that, we will begin to operate this plane on other key routes. One of them is Dubai, which we made a regular destination.

Why were there no scheduled Trans-

aero flights to Dubai before?

The airline ran chartered fl ights to Dubai for more than a decade, and ranks fi rst among Russian airlines in terms of passenger traffic be-tween Russia and the UAE. This spring, the Ministries of Transport of Russia and the UAE agreed to assign a second carrier on each part.

It allows us to sell tickets not only as part of travel packages, as before, but also by retail through our website and agency network. Hence, passengers will be offered a choice of four classes of service: fi rst (Imperial), business, economy and tourist.

Indeed our Imperial class ser-vice, is a unique product. In devel-oping this class of service, we held fi rm to the traditions of the Rus-sian Imperial Court.

QUESTIONS & ANSWERS

COR

BIS/FO

TO SA

04RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_MONDAY_SEPTEMBER_30_2013Special Report

Metals Already among the world’s largest producers of yellow metal, Russian firms are ramping up production in Siberia and the Far East

Golden prospects for Russia

Last summer, the world’s collec-tion of unique gold ingots gained a new addition. A heart-shaped gold nugget weighing 2.4 pounds was found in Russia’s Irkutsk Re-gion. Irkutsk, located in central Siberia, is the fi fth-largest region in Russia and the country’s second-largest gold-producing area. It is home to one fi fth of the country’s gold production facilities.

Were it not for the unique shape of the nugget, however, the fi nd would hardly have made the headlines. The weight of the little heart is only a tiny fraction of the 250 tonnes of gold produced in Russia every year.

Russia is the fourth-largest gold producer in the world, after China, Australia and the United States, but it ranks second in the world in terms of proven reserves. Although the sector is highly frac-tured — more than 600 compa-nies work in gold production in Russia — the industry has its major players. The country’s bi-ggest producer is Polyus Gold, which is also one of the top 10 gold producers in the world. Ac-cording to the official statistics from Russia’s state statistics agen-cy, Rosstat, in 2012 Russian com-panies increased year-on-year gold production by 8.3 per cent. Polyus, for its part, increased production of refi ned gold by 12 per cent and is anticipating even better num-bers for 2013 — in particular, the

In terms of sheer volume Russia

could overtake US as the third

largest gold-producing country in

the world by 2013.

VIKTOR KUZMINSPECIAL TO RBTH

company has said it expects to pro-duce 1.8 million ounces of gold in 2013, up from 1.68 million in 2012.

The lion’s share of Russia’s gold comes from the extraction of mi-neral resources, which was up 6.3 per cent in 2012 to 200 tonnes. Gold also comes into circulation via recycling scrap and waste.

In the past year, nearly all of Russia’s gold-producing areas re-ported growth in production. Numbers were particularly strong in the Krasnoyarsk Territory and the Irkutsk, Magadan and Chel-yabinsk regions. There was a drop in output at the Kupol Deposit in the Chukotka Autonomous Region in the Far East, but the Prime news agency reported that the decrea-se was the result of a known re-duction in the gold content of pro-

Russian gold production by region

THE NUMBERS

2.4 pounds is the weight of a heart-shaped gold nu-

gget found last summer in the Le-na-Vitim district of Siberia.

4.9% 

is the in-crease in Rus-

sian gold production in the first 11 months of 2012 compared to the same period in 2011.

254 

tonnes of gold were produced in Russia in 2012,

making the country the world’s fourth-largest gold producer.

tage of gold held in international reserves will increase as well. Rus-sia, for its part, has been stockpi-ling gold as a hedge against in-ternational fi nancial instability. In 2007, the Russian government held 443 tonnes of gold in its strategic reserves; by autumn 2012, the number had increased to 1,028 tonnes. In 2012, gold prices rose by 7 per cent year-on-year, but some observers say that this level of growth is unlikely in 2013. One of the main factors has been the increased use of the metal to pay for energy supplies between Iran

cessed ore there. Gold production is likely to increase throughout 2013, which could result in Rus-sia overtaking the US as the third-largest gold-producing country in the world by volume.

Commenting on the numbers, Investcafe analyst Andrei Schenck noted that the increase in produc-tion was due to more output from existing facilities rather than new ones coming online, and that Russia’s potential for gold produc-tion is far from exhausted.

“Some projects have been im-plemented, while others are still at the development stage,” Schenck said.

In 2014, production is schedu-led to begin at Russia’s largest gold deposit, Polyus Gold’s Natalka. Although Natalka was discovered during World War II, it sat idle for many years due to its remote lo-cation in the Magadan Region, in the north of Russia’s Far East. Once production begins at the facility, Natalka will process 11 million tonnes of ore and produce 16.5–22 tonnes of gold per year.

A gold mine is also under cons-truction at the neighbouring Pa-vlik deposit. Another 7.3 tonnes of gold a year are expected to be pro-duced at this site, which is under the management of the metals in-vestment fi rm Arlan.

From mine to marketHowever, general market instabi-lity and the volatility of the gold market in particular have thwar-ted a number of major deals in Russia. The merger of Polyus Gold and Polymetal International, for example, failed to go ahead, and not a single mining or metals com-pany issued an IPO in 2012. The

government also shelved an auc-tion for Sukhoi Log, one of the country’s largest undeveloped gold deposits.

Still, Valentina Bogomolova, a senior analyst for metals and mi-ning at Uralsib Capital, said that the current fi nancial climate bodes well for gold mining in Russia. The global price of gold has increased steadily since 2000, and Goldman Sachs has predicted a rise in the price of one ounce of gold from the current $1,690 to $1,825 by the second quarter of 2013. As a result, it is likely that the percen-

SOURCES: U.S. GEOLOGICAL SURVEY AND GOLD AND TECHNOLOGY MAGAZINE

“We need to create the right conditions to attract willing investors”

QUESTIONS & ANSWERS

Sergei Kashuba, chairman of the Russian Union of Gold Producers, spoke with Alexei Boyarsky of Kommersant-Money about what needs to be done to keep produc-tion rates up and how to attract investors to Russia’s gold indus-try.

What drives growth in the price of

gold?

The main driver is investors at all levels. In times of instability, ever-yone buys the metal. Demand heats up further when exchange traded funds (ETF) appear in a pre-crisis period, with shares bac-ked up by physical metal. Our Cen-tral Bank is also buying up gold: under its own internal regulation, at least 10 per cent of foreign ex-change reserves must be held in the form of bullion, and as of July 1, 2012, gold reserves stood at 936 metric tonnes (1,031 tonnes).

At the current rate of production,

gold should last for more than 40

years. Why are Russian gold produ-

cers buying foreign assets?

There are no new licences to be allocated. There is one strategic deposit at Sukhoi Log in the Irkutsk Region, but it hasn’t been distributed yet. Other new sites simply do not exist.

Over the past 25–30 years, the world has adopted the practice of division of labour. Large mining

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and Turkey, as well as higher de-mand from India. Indian jewellery manufacturers are trying to in-crease their supplies of gold be-fore the import tax is raised this year, according to analysts at UBS.

Bogomolova said that demand for gold from Russian jewellery manufacturers is also likely to in-crease in 2013. According to Bo-gomolova, while Russian investors do not view pure gold as a way to accumulate capital, individuals consider jewellery to be a good investment while the dollar and euro remain volatile.

companies that develop ore depo-sits focus on production, gradua-lly buying up more and more as-sets. But those same assets — prospected deposits with pro-ven reserves and a ready develo-pment plan — are sold by mino-rity shareholders called junior companies. In Mexico, for exam-ple, junior companies perform 80 per cent of exploratory drilling; in Canada the fi gure is 70 per cent; in Russia, just 10 per cent.

Why don’t foreign junior companies

come to Russia?

In the 1990s, there were about 30–40 foreign juniors operating in Russia; but now there are no more than a dozen. Today, according to Russian law, fi rms more than 25

per cent foreign-owned cannot be awarded licences to large depo-sits. There are problems associa-ted with converting exploration licences into production ones, which also affect domestic com-panies. Therefore, such junior com-panies more often than not look elsewhere.

If nothing is done to reverse the trend, in 10–15 years production rates will have dropped signifi -cantly. As old deposits become de-pleted, increasing amounts of ore are required to maintain produc-tion levels.

We have huge untapped territories

in Eastern Siberia. Could there be a

new Klondike?

The word “suddenly” is not part of a geologist's vocabulary. Befo-re every discovery comes explo-ration. We need to create the right conditions to attract investors wi-lling to invest in junior companies. Firstly, the regulatory framework needs revising, in particular the issue of converting exploration li-cences into production ones. Se-condly, in the absence of major venture capital funds, the gover-nment itself must fulfi l the role of anchor investor by setting up a fund or creating a state corpora-tion. Otherwise, Russian geology will see no investment at all, and domestic gold producers will start looking abroad.

rbth.ru/23529

05RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_MONDAY_SEPTEMBER_30_2013 Science&Technology

MAKS-2013: Top 5 Russian innovations

Technology New aircraft and aviation equipment were presented to the public in late August

IGOR ROZIN RBTH

For the sixth time in the 22-year

history of the Ig Nobel Prize,

a Russian takes home the

honours

People can walk on water... on the moonWeird Science Latest Russian win in satirical science awards continues longstanding tradition

A team of scientists featuring Rus-sian Yury Ivanenko have won the award in physics for their publi-cation in the journal PLoS ONE. In it, the scientists proved that peo-ple would be able to run on the surface of water if the attempt were carried out on the moon.

Russians have received the Ig Nobel Prize a total of fi ve times before:

1. Corresponding Member of the Russian Academy of Sciences Yury Struchkov received the Ig Nobel Prize in 1992 for his achievements in the fi eld of literature. In the period between 1981 and 1990, he co-authored 948 scientifi c pa-pers, which means that, on aver-age, he published a new article about every four days.

Almost all of his work was de-voted to crystallography—the sci-

ence of crystals and their struc-ture.

Gossips claimed that there were not enough facilities in the So-viet Union in order to conduct research in the fi eld of crystal-lography. Soviet scientists used the facilities of the Institute of the Academy of Sciences, and therefore, as a thank-you gesture, they added the head of the insti-tute to the list of co-authors.

2. In 2000, the Ig Nobel Prize in physics was awarded to a native of the Soviet Union, Andre Geim, and an Englishman, Sir Michael Berry of Bristol University, who forced a frog to float in the air with a powerful electromagnet.

According to Berry, the mag-net pushes the frog out in the air because of the difference in the fi elds. A frog is not a magnet, of course. However, it magnetises the electromagnetic field. This is called “induced diamagnetism."

Interestingly, in 2010, Andre Geim, who had already aban-doned his citizenship of Russia, together with his associate Kon-

The Ig Nobel Prize: science's fl ip side

The Ig Nobel Prize was introduced in 1991 by the American magazine Annals of Improbable Research, and is given for scientific achievements that are deemed trivial or amusing.

Since 1991, 10 Ig Nobel Prizes have been awarded annually in various categories—from classical Nobel physics and chemistry, to ornitholo-gy and astrophysics.

Master of ceremonies Marc Abrahams, left, introduces the winners.

BORIS YEGOROVRBTH

RBTH spent two days at the

MAKS-2013 international airshow

near Moscow. We present a

selection of interesting

innovations from Russia's

military-industrial complex.

1. A state-of-the-art radar system for a Night HunterRadio-Electronic Technologies ex-hibited the NO25E radar system, which is without parallel in Rus-sia and will be installed in the Mi-28N Night Hunter helicopter. The principal quality of the new radar system is that the receiving array for the transmit/receive module is located above the helicopter’s rotor blades.

On a combat mission and away from shelter, this radar allows the Night Hunter to remain undetect-ed while updating the crew with all the necessary information with split-second timing.

Apart from this, the radar can detect objects and weather forma-tions that pose a threat in fl ight. It warns the crew of the threat and provides them with the coor-dinates.

2. The Tu-214R: One of the most secret aircraft in RussiaAs part of the airshow, the Tu-214R was revealed to the general pub-lic for the fi rst time. This radio-electronic and optical-electronic intelligence aircraft was developed back at the end of the 2000s and is based on the Tu-214 passenger aircraft. The fi rst photographs of this aircraft only appeared in the media in May 2012.

This aircraft is planned for use in the international Open Skies programme, in which participat-ing states have the right to fl y over one another’s territory to monitor military activity.

3. Mobile aerostat systemsThe Dolgoprudny Automation De-sign Bureau presented mobile aerostat systems that were 645 square feet and 860 square feet in volume. They are intended to mon-itor given geographical areas.

Any cargo up to 33 pounds in weight — such as communication relay stations, analytical equipment, fi lm cameras and thermal imaging equipment, depending on the re-quirement — can be attached to them and lifted to an altitude of

1,000 feet. If necessary, these aero-stats can be used for military pur-poses. These systems can be load-ed onto any vehicle with a payload of up to 3 tonnes and taken to any geographical location.

4. The first prototype of the Ka-62 helicopterRussian Helicopters demonstrat-ed the fi rst prototype of the new multi-role Ka-62 helicopter at MAKS-2013. This helicopter is fi t-ted with the latest avionics, while the airframe and more than half the blades are made from polymer composites.

In the long term, this helicopter can be made compatible with the European satellite navigation sys-tem Galileo — a European Union and European Space Agency proj-ect in which China, Israel, South Korea, Ukraine and Russia are participating.

The Ka-62 is intended to carry 12–14 passengers in a cabin or a 2.5-tonne load on an external winch system. These helicopters can be used in the petrochemical industry or to carry out rescue op-erations. It is expected that certi-fi cation of the Ka-62 will be com-pleted by the end of 2014, while the fi rst batch of helicopters will be delivered to partners in 2015.

5. The Vityaz (Knight) air defence missile systemThe aerial defence company Almaz-Antey displayed the new S-350E, medium-range, air de-fence missile system at the air-show. The new generation system works in conjunction with all-as-pect radar and a command post based in a BAZ (Bryansk Auto-mobile Plant) vehicle.

The armament includes medi-um-range missiles used in the S-400 airdefence missile system, as well as short-range missiles.

In the long term, the Vityaz should replace the obsolete S-300, and sup-plement Russia’s multi-layered mis-sile and air defence system, of which the new S-400 and S-500 systems will also form a part.

rbth.ru/29429

The new generation multi-role

Ka-62 will compete with the

popular Mi-8 and Mi-17 models.

As part of the airshow, the Tu-214R intelligence aircraft was revealed to the public for the first time.

Russian aviation industry spreading its wings worldwide

QUESTIONS & ANSWERS

Dmitry Shugayev, deputy director

general for international econom-

ic cooperation, Rostec

Dmitry Shugayev, deputy director general for international econom-ic cooperation for the state cor-poration Rostec, told RBTH in an exclusive interview about the cor-poration’s successes and its stra-tegic plans.

What new products did Rostec un-

veil at MAKS this year?

Rostec’s companies, which pro-duce more than 80 per cent of electronics for the Russian avia-tion industry, presented almost the entire range of equipment used in modern aviation and cos-monautics, including avionics, the

newest elements for spacecraft, various optical devices, aero-nautical and space commu-nications systems, as well as weapons for the air force and

air defence. For example, the Radio-Electronic Technology

group KRET showed off its new equipment for the PAK FA [T-50] fi fth generation fi ghter, as well as the IRBIS-E, the world's most powerful radar management sys-tem for the Su-35 fi ghter.

In addition, as part of its air-show business programme, Ros-tec and its member companies con-cluded a number of cooperation agreements with Russian and in-ternational aircraft manufactur-ers. An agreement has been signed with South Africa's Denel group, French fi rm Turbomeca, and Air-bus.

What are the priority markets for

the corporation?

Almost one-third of our products is exported. Rostec has 50 over-seas offices, which help to pro-mote our products in more than 70 countries. Largely because of this, the Helicopters of Russia holding company, for example, al-ready ranks fi rst in the world for its sales of attack helicopters, and VSMPO AVISMA supplies over 30 per cent of the world’s titani-um—including 40 per cent of Boe-ing’s demand, 60 per cent of that used by Airbus and 100 per cent of Embraer's supply. We are now focusing on increasing the share of civilian products in the do-mestic and foreign markets.

Besides MAKS, what other channels

are being used to find new partners?

Contracts are often made at the world’s largest airshow,s such as Le Bourget, Farnborough, Peru-vian SITDEF, Dubai Airshow, He-liRussia and others. Rostec serves as a unifi ed organiser of more than 20 exhibitions of Russian prod-ucts abroad. Thus we fi nd inter-national partners to create joint ventures. This fosters the transfer of innovative technologies to Rus-sia and expands the Russian pres-ence in the export markets.

What are the main spheres for coop-

eration with China, India and Latin

America?

We continue to develop partner-ships with our colleagues in China. Atomic energy, civil rocket science, the export of helicopters and their after-sales service are now among the potential areas of cooperation.

As for India, it is one of Russia's key markets for military and du-al-use items. Rosoboronexport's portfolio of orders is worth more than $6 billion. We are negotiat-ing contracts for the supply of a wide range of weapons for India’s air force, navy and army.

For us, Latin American coun-tries are a fast-growing and high-ly promising market in terms of aircraft exports. Rostec has offic-es in Argentina, Brazil, Chile, Co-lombia, Cuba, Mexico and Peru.

Yekaterina Turysheva

RBTH

stantin Novoselov, won the Nobel Prize in Physics for obtaining a material called graphene. He thus became the fi rst—and so far the only—holder of both the world's real and comic Nobel Prizes.

3. The year 2002 was marked by scandals related to distortions in the fi nancial statements of large corporations. The organisers and the jury of the Ig Nobel Prize

4. In 2012, Igor Petrov, who headed a group of Russian engi-neers from the SKN company, re-ceived the Peace Prize for devel-oping a method for producing nanodiamonds using military ex-plosives.

"Ladies, if you want diamonds, come up to me after the ceremo-ny: But you have to bring your own explosives with you," Petrov announced to the audience in his acceptance speech as he received the award.

5. In 2012, the Ig Nobel Prize in the fi eld of exotic hydrodynam-ics was received by another Rus-sian native, Ruslan Krechetnikov, who is a professor at the Univer-sity of California. Together with his graduate student, Hans Mayer, Krechetnikov discovered the rea-son why coffee spills out of a cup while a person is walking. It may come as a surprise to readers, but it is the unevenness of a person's stride while walking and carry-ing a cup which is to blame, ac-cording to the results of the re-search.

Andre Geim has become the first — and so far the only — winner of both the world's real and comic Nobel Prizes

could not ignore it and awarded officers, directors and auditors of about 30 companies a joint prize in economics. The wording of the award reads: "for application of the mathematical concept of imaginary numbers in business." One of the companies which re-ceived the award was the Russian gas giant Gazprom.

AP/EA

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06RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_MONDAY_SEPTEMBER_30_2013Culture

There are more than 100 parks and garden estates in and around Moscow which are

open to the public. Here even the choosiest of visitors will find something to tickle their

fancy. Russia and India Business Report recommends some of the best ways of

spending time in the Russian capital's great green outdoors.

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3. SAVOUR FINE ARCHITECTURE The Arkhangelskoye estate – located to the north-west of Moscow – was first laid out in the 1780s. The landscape here is adorned with palatial buildings and structures in the style of Roman villas or terraced French chateaux. Paths and lawns line the grounds, along with numerous antique marble statues.

1. GO FOR A SWIMThe best place for a relaxing sum-mer afternoon by the waterside is the Serebryany Bor woods. Here you can see rare flowers, ride a bike or have a swim in the beauti-fully clean water. In winter, you can go skiing and skating on the ice.

4. CATCH A CONCERTAnother of the city-centre parks, the Hermitage Garden, has pleasant out-door restaurants, table tennis tables, and an array of concerts – which you can enjoy by buying a ticket.

6-7. SOAK UP THE HISTORYTwo parks in the south-east of Moscow are just a few metro stops apart – the Kolomenskoye Museum-Park, and the Tsaritsyno Open-Air Historical Park. Kolomenskoye was formerly a royal summer residence. In the 17th century, Tsar Alexei Mikhailovich built a unique wooden palace there. Today, it’s the only park in Russia to retain its original layout as an English park.

2. ENJOY A COMFORTABLE STROLL BY THE MOSKVAMoscow’s most famous park is Gorky Park, in the very centre of the city, on the banks of the Moskva River. Visitors can enjoy free wi-fi through-out the park, chic cafes with water-side views, an open-air cinema – and the famous winter ice-rink.

5. HAVE FUN WITH THE KIDSThe Kuzminki-Lublino Park is in the south-east of the city. A river runs through the estate, which has two manor houses, five museums, stables with a music pavilion, and 26 children’s play areas.

8. GO FOR A PICNIC IN THE WOODSThe Losiny Ostrov (Elk Island)Park is the largest of all of Moscow’s parks, covering 44 square miles, of which woodland makes up 80 per cent. It was once a favoured hunting ground for the Russian tsars. Visitors to the park will find picnic spots, marked walking trails, and sports facilities.

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Gorky ParkSerebryanny Bor Arkhangelskoye Hermitage Garden Kuzminki-Lublino Kolomenskoye Tsaritsyno Losiny Ostrov

YAN SHENKMANRBTH

The artist's project, which unites

children of different ethnic and

social backgrounds to create sails

for a ship, has been recreated in

Venice, Miami, Sharjah and other

cities around the world.

Hoisting the sails of tolerance all over the world

Art One of Ilya and Emilia Kabakov's ships of tolerance is to open in New York this month

Before their 60-foot ship with co-loured sails made of children's drawings was installed on Gorky Park’s Pioneer Pond, Moscow schoolchildren listened to lectures on tolerance for four months and worked on their paintings for the sail.

Ahead of the opening of their ship of tolerance in New York on September 27, Emilia Kabakova told RBTH about the history of the ships:

“We built the fi rst ship in the Egyptian city of Siwa, located on the shores of a salt lake. They have never had ships there before, and we decided that the children should make the sails.”

The ship was built by 17- and 18-year-old boys from Manches-ter, and the Kabakovs noticed that they quickly built a rapport with the local children, despite the cul-tural differences.

“Immediately, some common in-terests appeared. They began to play soccer together. Then they wrote on the sails: ‘We want to be friends,’ ‘Come to visit us,’ ‘Siwa is a lovely city’...”

The Kabakovs’ next ship was launched in Venice – a location cho-sen due to tensions that have aris-en in recent years in Italy as a re-sult of high levels of immigration.

“There are many immigrants in Italy and the issue of tolerance is crucial there,” says Kabakova. “Children at schools are always bullying each other; there is a lot of aggression, racism and many other problems. So we organized a six-month course on tolerance.”

“People need knowledge about culture to be able to get along, to understand each other and to avoid wars. Culture is a way to learn

The 'Ship of Tolerance' on display in Moscow's Gorky Park.

Ilya Kabakov lives in the United States, but he was born in the So-viet Union and became known as one of the founders of the Moscow conceptual school. He started as a book illustrator and was an acti-ve member of dissident exhibitions. Kabakov's “Beetle” ($5.8 million, 2008) and “Luxury Suite” ($4.1 mi-llion, 2006) are two of the most expensive pieces of contemporary Russian art ever sold. His artwork is exhibited in Moscow’s Tretyakov Gallery, St. Petersburg’s State Her-mitage Museum, New York's Mu-seum of Modern Art, and in other prestigious international collections.

CURRICULM VITAE

more about another person, and the easiest way to do this is to use visual images. Everything is based on two main things — knowledge and respect.”

"The ship is a universal symbol. The ship is a way of transferring knowledge about other civilisa-tions and different cultures," said Kabakova.

As part of the Moscow project, 15 children fl ew to the city from Miami with pictures they had drawn for the ship. The children were inspired by the ship that was built three years ago in Miami.

The Kabakovs are now prepar-ing for next spring’s exhibition at the Grand Palais in Paris, where they will construct an installation they call a “Strange Town.”

Exhibitions will also be held in Mexico, the UAE and Switzerland.

Islamic cinema takes centre stage

leh Village" by Golamreza (Bah-ram) Azimi of Iran — about a romantic relationship between two elderly residents of Masouleh, Iran, who are looked after by a recent-ly arrived young couple.

The event was not short of scan-dal. The chairman of the selection panel, Sergei Lavrentiev, who runs the Kazan edition of Business On-line, told of his surprise that a fi lm about the deportation of the Crimean Tatars in 1944 was re-moved from the main competition programme, since the picture in question ("Khaytarma" or "The Re-turn"), by Crimean Tatar director Akhtem Seytablaev, was initially slated to open the festival. At the fi nal press conference, the head of the selection panel suggested that the decision was taken following "a call from the Russian Ministry of Foreign Affairs."

According to panel member Rustam Batrov, chairman of the Council of Ulems under the Spir-itual Administration of Muslims of Tatarstan, such events affirm Kazan's status as the Muslim cap-ital of Russia: "The importance of the festival is that it portrays Islam as a part of our culture, not just as a religion or act of worship rel-evant only to believers. The festi-val helps everyone — regardless of religious conviction — to see the beauty of Islam and become enriched by the values and ideals inherent in Islamic tradition. Usu-ally, at the end of the festival, I re-quest DVDs of all the fi lms, so I can watch them in my own time. Such fi lms cannot be found on TV or the big screen — it is special, 'underground' cinema."

Russia came away with only one award. The golden statuette for best cinematography was present-ed to Oleg Lukichev for his work in Maxim Panfi lov's "Ivan, Son of Amir." However, besides the main awards, Russian pictures picked up some special prizes. The Pres-ident of Tatarstan's Prize for Hu-manism in Cinema went to direc-tor Maxim Shvachko for the documentary film "The End Game," fi lmed on location in Ta-tarstan. Another special prize from Rossotrudnichestvo (the Federal Agency for the Commonwealth of Independent States, Compatriots Living Abroad and International Humanitarian Cooperation) was awarded for "Chippendale" by Ka-milla Safi na, who shot a curious one-reeler about how the owner of an antique shop in Tmutarakan

goes in search of a rare antique chest-of-drawers.

Among the foreign full-length documentaries, the main award was collected by German director Martin Gerner for "Generation Kunduz — The War Of The Oth-ers." The equivalent award in the short-fi lm category was presented to Azerbaijani filmmaker Fariz Akhmetov for "Melting Island." Recognition for the best animat-ed fi lm was conferred on "Masou-

CONTINUED FROM PAGE 1

"The importance of the festival is that it portrays Islam as a part of our culture, not just as a religion." -Rustam Batrov

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07RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_MONDAY_SEPTEMBER_30_2013 Opinion

LETTERS FROM READERS, GUEST COLUMNS AND

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WHAT CAN RUSSIA OFFER TO THE WEST?

Richard

Sakwa POLITICAL ANALYST

Pavel

Vasiliadi FINANCIAL ANALYST

Fyodor

Lukyanov POLITICAL ANALYST

Despite President Vladimir Putin’s attempts from the very fi rst days of his lead-ership to “normalise” re-

lations between Russia and the West, relations remain fundamen-tally abnormal.

Putin’s defi nition of normality was straightforward: that Russia would no longer be treated as a special case, but as just another independent country. To this end, he quickly paid off the bulk of sov-ereign debt and ended various de-pendencies that had built up in the 1990s, for example on the IMF.

At the same time, he accelerated the integration dynamics that had languished in the Yeltsin years. This included intensifi ed relations with the European Union and, after 9/11, the attempt to create a partnership of equals with the United States.

However, it soon became clear that this “normalisation” strategy would not work. Russia was un-able to become just another great power. The political demands placed on the country are high, in part because Russia itself accept-ed these demands as part of the process of becoming a nation state in 1991, and in part because of its

self-identifi cation as a European state and a core member of the international community.

The systemic and identity con-tradictions that remain unresolved in Russia mean that “abnormal” features will remain in Russia’s re-lations with the western world for the foreseeable future. The language of boycotts and threats by western powers and activists only exacer-bate the contradictions of the Rus-sian polity rather than help resolve them.

evidence to indicate that the lat-ter is the case.

Russia’s main infl uence today is as a moderating force in interna-tional politics - it can play broker in some of the confl icts and con-tradictions in western policy.

Both Barack Obama and Putin understand that there is no fun-damental ideological divide be-tween Russia and the West, hence talk of a new Cold War is mis-placed. Yet tensions do exist that foster an atmosphere of cold peace. From Syria to Snowden, there is no end of issues on which Russia has its own views. Though a whis-tle-blower is naturally not to Pu-

tin’s taste, Russia was right on nor-mative grounds to offer Snowden asylum, if only for a year. Equally, Russia’s analysis of the Syrian cri-sis was more accurate than that of the West from the beginning.

The fundamental question is whether these are normal differ-ences of view or whether they in-dicate an incompatibility of stra-tegic interests. There is little

Both Barack Obama and Putin understand that there is no fundamental ideological divide.

The value of integration is not taken for granted, but it is giving way to a calculation of what is and what is not of value.

SLASH OR SPEND: MOSCOW TAKES A FRESH APPROACH

EVOLVING A NEW PRAGMATISM TOWARDS POST-SOVIET SPACE

As part of the ongoing de-bate on international fi -nancial architecture, Rus-sia, now an established

host of G20 summits, has proposed opening discussions on a range of issues related to the management of public debts.

One of the steps recommended was the revision of the guidelines for public debt management, which were originally developed by the World Bank and the IMF.

Another focus was a strategy for working towards a gradual reduc-tion in government stimulation. The G20 participants were presented with a medium-term programme aimed at a gradual movement to-ward stabilisation and improve-ment of state budget defi cits and the volumes of public debts.

According to Russian President Vladimir Putin, the G20 members, after some heated debate, agreed on the necessity of fi nding an op-timal balance on the issue.

As the situation in the eurozone has shown, the ambitious auster-ity programmes pursued by some states have failed to bring those countries out of recession. Yet equally, it is clear that taking a lax approach to reducing budget deficits could undermine confi-dence in the markets.

Moscow’s policy with re-gard to its closest neigh-bours is becoming more and more pragmatic.

Demonstrative trade sanctions against Ukraine and an unexpect-edly warm meeting between the presidents of Russia and Azerbai-jan in Baku suggest that the Krem-lin is continuing to play hardball.

As the Eastern Partnership Summit - at which Kiev and Ye-revan are to sign agreements on closer institutional ties with the European Union - draws near, Russia is making it clear that the move would change Moscow’s at-titude toward these countries.

Although Russia has never of-fi cially taken an “either–or” atti-tude like the EU and is stressing that the two projects are mutual-ly complementary, it is clear that it is once again a zero-sum game.

The paradox is that the post-Soviet space has dropped on the scale of priorities for the leading players. Economic activities with regard to the former Soviet Union countries peaked in the middle and second half of the 2000s. The situation has now changed.

The days when the US sought to take the lead and to maintain a universal presence seem to have gone.

The EU is not going to expand or invest in tying itself to the states east of its present borders.

Therefore, individual strategies that will balance these two mu-tually exclusive interests are re-quired.

Meanwhile, Putin stressed that simply restoring stability to state fi nances is not enough to guaran-tee a return to high growth rates. At the G20 Summit, Russia put forward its St. Petersburg Action Plan, an initiative which aims to ensure continued growth and job creation.

The plan is based on the fi scal policies and obligations of nations to implement structural reforms that will make it possible to make progress in labour market regu-lation and taxation, human capi-tal development, infrastructure modernisation and regulation of the commodity markets.

As part of the G20 Summit, Rus-sia presented its fi scal policy, the

basis of which were deficit and public debt parameters approved in the budget for 2013–2015. Ac-cording to Russian Finance Min-ister Anton Siluanov, the St. Pe-tersburg Action Plan includes measures for stimulating invest-ment, which, by 2015, should pro-vide a level of investment equal to 25 per cent of GDP.

Russia's role as the largest en-ergy supplier to the world market means it makes little sense to com-pare the parameters of Russian state fi nancing with those of other countries — even with members of the BRICS bloc. Russia is able to maintain comfortable levels of public debt to GDP and a current account surplus in its balance of payments.

It is too early to say how the implementation of austerity mea-sures in Russia will pan out. The new budget rules came into force only this year, and the slowdown in the national economy is at least partly a result of the reduction in government spending, yet other factors have also been in play.

lationship to be established on both sides. For the West, despite much talk about Russia’s relative marginality and insignifi cance, a strong relationship with Russia is essential for strategic, economic and simple diplomatic reasons.

The tragedy of recent years is that the EU has not been able to develop a distinctive voice of its own as one of the fundamental representatives of the European nations and as a mediator in trans-forming the transatlantic commu-nity. While Europe does have a voice of its own, its failure to chal-lenge the mistakes of the domi-nant power in the western hege-mony over a whole set of issues, including the war in Iraq, has undermined its credibility as a normative power in its en-tirety.

Of course, this allows Rus-sia to rise to the occasion, and instead of reinforcing the margin-ality that its opponents wish to impose on the country, Russia can help resolve some of the impasses of the West’s own making. Supine subservience of the British type to American hegemony helps no one. It is the duty of a friend to point out the errors of one’s friends. Thus, Russia can reposi-tion itself from a perceived trou-blemaker to a problem-solver.

Russia is perhaps the most in-teresting case. Its declared prior-ity is to strengthen the Customs Union and create a Eurasian Eco-nomic Union on its basis. This is the aim of its foreign and econom-ic policies, and all the former So-viet Union countries are invited to join.

Ukraine has been told how much it would lose if it signs an enlarged agreement on a free trade zone with the EU; Armenia has been warned that even its close ties

Even the issue of Ukraine, whose importance as a member of the Customs Union is in no doubt, is not so black-and-white. There is the risk that Kiev—which would play the role of a maverick in any association, haggling over every trifl e — would simply paralyse the Union.

Ensuring security in Central Asian countries, let alone drag-ging them into alliances with Rus-sia, is also a matter of some doubt.

As for the South Caucasus, Georgia and Azerbaijan are out-side the debate, because neither Tbilisi nor Baku (each for their own reasons) wants to join the Russian projects.

Russia is in a state of transition, this being applicable to all aspects of its policy. The post-Soviet era is over and nobody knows what the new era will be like—the path is being determined by trial and error.

As regards neighbouring coun-tries, Moscow has opted to bide its time. It would like things to be in a suspended, transitional state until it makes up its mind about what it wants.

The internal problems of the neighbours and their potential pa-trons in the West (and East) com-plicate the task, because no one is prepared to face serious risks for the sake of Ukraine, Armenia, or Tajikistan.

Richard Sakwa is professor of Russian and European politics at the University of Kent.

Pavel Vasiliadi is Director of the Analytics and Risk Management Department at the UFS Invest-ment Company.

Fyodor Lukyanov is a political scientist and the editor-in-chief of Russia in Global Affairs journal.

would not be immune if a docu-ment on association with the EU were signed. Moldova (due to ini-tial an agreement with the EU) has also been reminded that it still has an opportunity to be of inter-est to Russia.

The irony is that Moscow itself does not know its own mind yet. Unlike fi ve years ago, there is less desire to integrate more than a few former Soviet republics. The value of integration is not taken for granted, but it is giving way to a calculation of what is and what is not of value, whether the game is worth the candle and whether the cost will exceed the benefi ts.

rbth.ru/29209

Russia’s acceptance into the transatlantic community was problematic from the very begin-ning, hence President Boris Yelt-sin’s talk of a “cold peace” as early as December 1994. One of the fea-tures of this cold peace syndrome is the absurd language of resets and pauses. No normal countries would talk to each other in these terms, and it is humiliating for all parties to have degenerated to the point that they do so now.

It is time for a more mature re-

08RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_MONDAY_SEPTEMBER_30_2013Feature

RECIPE

Sweet millet kasha with pumpkin

My daughter Velvet was the fussi-est of fussy eaters and she drew the line at cereal of any kind – hot or cold. Three housekeepers and a babushka despaired of her! The one exception she made each year was pumpkin porridge, or kasha, with millet, made from the meat of the jack o’lanterns we carved for Halloween.The idea and the recipe was giv-en to me by a cheerful woman at Moscow's Leningradsky Mar-ket who kept back whole round pumpkins for us each October. The result was a sweet, creamy, and decorative triumph, which even Velvet relished. I started to buy pumpkin chunks to experi-ment with different versions of pumpkin and millet kasha. The recipe which follows has proved popular throughout the year – not just at Halloween!

Ingredients

• 1-1/2 cups roasted pumpkin, pu-reed or small cubes • 1 cup of millet • 2 cups of milk • 1/3 cup of honey or brown sugar • ¾ cup of curd • 1 pinch of salt • 1 tsp of cinnamon • 1 tsp of ground allspice • 1 cup of raisins or currants • 3 tbl of sweet butter, cut into small cubes • 2 tbl of demerara sugar

Preparation

1. Preheat the oven to 325°F (160°C)2. Place the millet in a colander and run it under cool water for a minute. Set aside to dry.3. Place the dried millet in a heavy-bottomed Dutch oven over medium heat and toast the grains for a few minutes until they begin to brown. 4. Add the pumpkin and stir to com-bine. Add the milk and cook until just simmering. Add the honey, (or sugar) salt, and spices and stir until the hon-ey is dissolved in the mixture.5. Cover and reduce heat, and cook for 15 minutes until the millet has ab-sorbed almost all of the liquid.6. Stir in the curd and raisins. Dot the top of the kasha with butter and sprinkle the top with the demer-ara sugar. Cover the Dutch oven and place in the pre-heated oven for 15 – 20 minutes.

Jennifer

YeremeyevaJOUNALIST

LORI/LEGION-MEDIA

IVAN DEMENTIYEVSKYSPECIAL TO RBTH

Each village has its own

specialisation: the family secrets

of pottery, engraving, gilding,

and carving are passed

down from one generation

to the next.

Arts and arms: on the trail of Dagestan's ancient handicrafts

Travel The mountain villages of the North Caucasus have preserved their artisanal heritage for centuries

The village of Kubachi is one of the most famous traditional cen-tres for the production of silver jewellery, stone and wood carving in the Caucasus.

Armourers have worked in the village since ancient times, forg-ing chain mail, swords, and sabres of various shapes and sizes. Select pieces of weaponry were decorat-ed with ornamental script, silver or gold.

Legend has it that Alexander the Great's helmet was made by Kubachi craftsmen, as well as the collection of blank weapons given as a gift by Alexander III to Queen Victoria.

In Soviet times, items made by Kubachi craftsmen were often pre-sented to people of power as ex-travagant gifts. For example, the village museum features a vase which was given to Stalin. After his cult was dethroned it was mi-raculously returned to the village where it was made.

Today’s realities have naturally left their mark on production. Chain mail is of course no longer

and today the place is remi-niscent of a ghost town. It is

said that climbing up here is con-sidered to be a mini-Haj.

Kala-Koreysh is situated around fi ve or six kilometres from the

village and a clearly vis-ible path leads there. After a long slope offer-

ing views of the sur-rounding mountainsides, there is a short climb, and ten minutes later, beyond a number of ruined houses, lies what for many Mus-lims is a holy place.

Right at the top is the warden's house, where visitors can rest for a few hours, and even spend a few nights. However, water is scarce and should be brought along. Peo-ple come here with their families, with friends or just on their own, to be in communion with them-selves, to enjoy the unspoilt scen-ery or just relax and gather strength for their onward journey around Dagestan.

Many of the traditional artefacts made in Kubachi are decorated with ornamental filigree in silver or gold.

work in the village. For this rea-son it is worth coming here to see how silver plates or a delicate women’s bracelet are produced from offcuts and scraps of silver and decorated with gilt and fi li-gree enamel.

Some local craftsmen are ver-satile enough to take on any work but they are few. It is more often the case that a craftsman will spe-cialise in a specifi c skill. For ex-ample, silver needs to be smelted and sheets cast for further pro-cessing. Only a few people in the

village are able to do this kind of work and the other craftsmen will approach them.

It is not only the craftsmen that lend the village of Kubachi its in-terest. Not far from the village is the historical monument of ‘Kala-Koreysh’.

In the Middle Ages, Kala-Ko-reysh was a political and cultural centre as well as the focal point for the spread of the Islamic faith in the North Caucasus. At that time it was a heavily defended fortress. Gradually its infl uence faded away

ANNA TROFIMOVARBTH

Everything must be upscale and

elegant. Elegant means following

traditions, while upscale demands

the height of modern fashion.

Weddings à la Russe: marrying tradition with extravagance

Lifestyle Many young couples are prepared to spend colossal sums on tying the knot in style

The traditional Russian wedding went like this: matchmaking, bride-assessment, hen party and stag night, the wedding journey, the dowry, the wedding ceremony, a ritual walk, and the nuptial feast.

Very few Russians observe these traditions today. The elements that have survived are the wedding feast, the engagement traditions and the ceremony itself — though the latter two are less observed.

“Today, most couples expect that their wedding will be organised by a designer; they are interested in the colour theme and that the wedding reflects the history of their relationship,” says Alexand-rina Remiz, a manager from the wedding agency pozhenimsya.ru.

The demands of newlyweds con-tinue to grow with each passing year, with an accompanying rise in the price of weddings and in the services of wedding agencies.

Particularly costly are weddings that involve carrying out the reg-istration in the countryside, or even abroad. The price of a wed-ding in a top restaurant can also be exorbitantly high.

Remiz explains: “These days, agencies have to be able to set things up on any budget. I’ve known cases myself in which the young couple has done the whole thing in Moscow for just 100,000 rubles ($3,035), with 50 guests.

Usually, the couple decides what they want to spend. We’ve organ-ised weddings where the couple was ready to spend up to 2–3 bil-lion rubles ($60.7 million–$91 mil-lion). Of course, that price includes the very top photographers, cam-eramen and other staff.”

Generally, weddings can take 2–4 months to organise. The most demanding couples begin organ-ising the details of “the most im-portant day of their lives” up to a year beforehand — booking the wedding date, reserving the res-taurant, etc.

“A wedding these days,” says Remiz, “is like a bet on the indi-viduality of the couple. Just two or three years ago, couples were organising theme weddings in the style of Chicago gangsters of the 1920s, or 1980s disco nights, or modelled on Ancient Russian tra-ditions. So tradition can be found converging with the present.”The traditional white bridal gown is still a must for many brides.

produced, and if a sword is made it is not as a weapon. The village mostly produces dinner sets, eques-trian harnesses, and women's jew-ellery. However, besides the piec-es produced at the village's state factory, many individual craftsmen

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