Wednesday, December 4, 2013

The challenges of turning a terrorist haven into a tourist hub.

Next-generation nuclear submarines come to life.

Economy Technology

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

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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.

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IN THIS ISSUE

In February, Russia will welcome the world to the XXII Olympic Games. RBTH gives you the latest on preparations as well as advice for visitors.

Special report

YAROSLAVA KIRYUKHINARBTH

ARTYOM ZAGORODNOVRBTH

While Moscow residents are a

diverse mix of nationalities and

religions, not all Russians in the

country’s capital are content with

the city's high levels of

immigration.

Russia has moved ahead of its

fellow BRIC countries in the World

Bank’s latest Ease of Doing

Business ranking thanks to its

intensive reform efforts.

Hostility towards immigrants is growing

Society Muscovites wary of ethnic minoritiesEconomy Drive to improve business climate pays off in new international rankings

creased crime rates. According to a survey conducted by the Levada Centre polling agency in June this year, 84 per cent of Russians sup-port the idea of introducing visas for people from former Soviet re-publics.

Among Moscow's population of 11.5 million, approximately 1 mil-lion are migrants or immigrants. Experts estimate that one third of them live in the capital illegal-ly, which limits their job oppor-tunities to low-wage labour such as garbage collection, cleaning, roadwork and construction.

Russian President Vladimir Putin has declared that migration will be the focus of next year's G8 sum-mit in Sochi. The topic has become increasingly relevant this autumn after riots erupted in southern Moscow following the murder of an ethnic Russian by a man from Russia's North Caucasus region. The riots broke out before the per-petrator was identifi ed, proving the extent to which migrants and immigrants are stereotyped and scapegoated in Russia.

The bulk of Russia's migrants and immigrants come from two regions: the North Caucasus re-publics in Russia's south, includ-ing Chechnya and Dagestan, which are actually within the borders of the Russian Federation, and coun-tries such as Tajikistan, Uzbeki-stan and Moldova that were part of the Soviet Union and now be-long to the loose confederation known as the Commonwealth of Independent States.

Despite a shared history, polls show that the Soviet-era ideal of the "friendship of the peoples" has mostly vanished. A survey by the Russian Public Opinion Research Centre in August reported that two-thirds of Russians believed that migrants and immigrants in-

Russia has jumped 20 places in the World Bank’s Ease of Doing Business survey, moving up to number 92 out of 185 countries, following a concerted reform effort and widespread improvements in access to electricity, according to a new report from the internatio-nal body.

MIgrants are often employed in

low-wage construction jobs.

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Many of the world's largest

producers already operate

plants in Russia.

Russia tops BRICs for business

This result brings the country closer to meeting President Vladi-mir Putin’s goal of taking Russia from 120th place to 20th place by 2018, via a series of “road maps” designed to reduce bureaucracy and red tape. This is the fi rst tangible sign of success as recognised by a major international body.

Russia edged ahead of China, which placed 96th in the index. Russia ranked higher than any of its peers in the BRIC (Brazil, Rus-sia, India, China) club of large emerging economies. Brazil rose two notches to 116th place, while India slipped three places to 134th.

“Improving the investment cli-mate is a top policy priority for the Russian authorities, and local en-trepreneurs are seeing the results,” said Augusto Lopez-Claros, direc-tor of global indicators and analy-sis of the World Bank Group, in a statement accompanying the study. “Businesses dealing with obtaining electricity connection in Moscow now face fewer delays, more strea-mlined procedures and lower fees, thanks to the regulatory and pro-cedural improvements in this area on the federal and Moscow level.”

Russia is among the top 10 most-improved countries in the survey

this year, and also features among the 10 economies that have ad-vanced the most towards global good practices since 2009.

Electricity and Borders

According to the World Bank, Rus-sia made signifi cant progress in improving access to electricity, jumping ahead 71 places in that category. The country's weakest sectors remain construction per-mits, where it languishes in 178th place, and trading across borders, where it ranks 157th.

YEKATERINA POKROVSKAYASPECIAL TO RBTH

Despite the strong competition,

Russian service companies are

becoming more assertive and

actively promoting their interests

in the Middle East.

Oilfield suppliers eye Gulf opportunitiesEconomy Regional firms develop ties with Russian oilfield service companies

businesses. The scope of Russian machinery and services on show at ADIPEC 2013 included a wide range of pipes, pumps, compres-sors and appliances for measur-ing pressure inside oil drills.

Among large Russian oilfi eld service companies actively pur-suing opportunities in the region were TMK GIPI, Novomet and Burintekh, alongside several new-comers, such as PKBA, Geostar, and Borkhimmash.

Arthur Sakaev, Burintekh’s Re-gional Manager for the Middle

The Abu Dhabi International Pe-troleum Exhibition and Confer-ence (ADIPEC 2013), held on 10-13 November, saw active representa-tion by Russian companies, result-ing in signifi cant attention and in-terest from regional oil and gas

a Russian market share of up to 66 per cent. Since entering the Gulf market in 2010, it has suc-cessfully completed three trial sessions of its products for the Abu Dhabi Company of Onshore Oil Operations (ADCO), and re-cently won a tender with Oman Petroleum Development (OPD) to supply 4 per cent of their drill-ing sites with PDC bits. Burintekh is also planning to open an office and a service centre in the UAE.

East and North Africa (MENA), emphasised the Gulf area’s po-tential for expanding his compa-ny’s business: “The market is huge here. There are at least 500 drill-ing sites throughout the Gulf. One drilling site may have up to 12 drill holes, that is 6000 drill holes altogether and about 18,000 PDC bits. In PDC bits alone it is worth $500 million USD.”

Based in Ufa, the capital of Rus-sia's Republic of Bashkortostan, Burintekh manufactures PDC bits and drill hole equipment, and has

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GULF NEWS_WEDNESDAY_DECEMBER_04_2013Politics&Society

Migrants in Russia:

countries of origin

According to the Federal Migration Service, there are 3.5 million for-eigners in Moscow. The majority are citizens of CIS countries.

Uzbekistan

Kyrgyzstan

13,6%

Tajikistan

16,7%

24,2%

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Hostility towards immigrants is growing

The slogan "Russia for Russians" is appearing more frequently, and nationalists are becoming increas-ingly vocal about deporting im-migrants from other countries and requiring migrants from other parts of Russia living in Moscow to return to their native repub-lics.

With a total immigrant popu-lation of 11 million, Russia has the second-highest immigrant population in the world, after the United States, which has 45.8 mil-lion. But Russia's immigrants make up just 7.7 per cent of the total population, which is pro-portionately much less than in the US and gives them less po-litical leverage.

Not surprisingly, migrants fl ock to large centres such as Moscow. Despite this, Russia's capital has little infrastructure and few ser-vices to cater to them. The city has just one "migrant-friendly" hostel, which is on the outskirts of the city and costs just $5 a night.

"They (the police) can stop us several times in one day," said one of the hostel's resi-dents, 20-year-old Maxim from Dagestan. "So we try to keep a low profile." Maxim works as a cashier in a super-market and says he earns $1500 a month. Outside Moscow, the sal-aries of illegal migrants and im-migrants are much lower.

Apart from the fortunate few who stay at the hostel, many migrants live where they work, which may be on the actual construction site they're building. Or they might be crammed into a tiny fl at, with a dozen-odd compatri-ots per room.

The head of the Federal Migra-tion Service, Konstantin Romo-danovsky, recently admitted that Russia had failed in terms of its immigration policies. He proposed setting up 81 special centres for illegal migrant workers, but did not say whether the centres would help migrants fi nd work and res-idency permits or whether they

would be pre-deportation deten-tion centres.

Someone who supports the lib-eralisation of immigration legis-lation is Boris Titov, Presidential Ombudsman for Entrepreneurs' Rights. Titov has proposed an am-nesty for all illegal migrants in Russia.

"If we suddenly deport all the migrant workers, the economy will crumble," Titov told RBTH. "Today Russia desperately needs workers. Migrants do one in every 15 jobs. Taking into account the demographic pit into which Rus-sia has fallen, the need for work-ers will only increase. And who will fi ll this need?"

According to Titov, about 75 per cent of illegal migrants come from CIS countries, which have visa-free agreements with Russia. But only a fi fth of these migrants ac-tually want to settle in Russia and obtain citizenship.

ANDREI ILYASHENKOIVAN FLEGONTOVSPECIAL TO RBTH

Iran’s foreign minister returned

home from talks in Geneva to a

hero’s welcome as thousands of

people took to the streets of

Tehran to celebrate what they

saw as an undisputed victory.

Nuclear deal hailed as a landmark for Middle East

International The Geneva agreement could reshape political relationships across the region

Britain and Germany will become clear in six months, when they aim to sign a comprehensive treaty.

“The victory achieved in Gene-va is tactical,” Vladimir Yevseyev, head of the Centre for Social and Political Studies in Moscow, told RBTH. “The bulk of the sanctions, including those imposed by the UN, remain in place for the time being, and Iran has yet to consent to placing its nuclear programme under full international controls.”

An indication of the difficulties ahead came almost immediately after the signing, when Iran de-clared that it would continue building at its Arak heavy water reactor, a facility that critics fear could be used to produce pluto-nium for nuclear weapons. Iran claimed that the text of the deal did not prevent construction, but France’s foreign ministry said that a halt to work was “specifi cally targeted” by the agreement and should be respected.

A winning positionNevertheless, Russia’s foreign minister Sergei Lavrov believes that the talks have had a positive outcome, and that the deal Rus-sia helped to broker was in line with its own foreign policy inter-ests. Few had hoped for such a successful outcome after 34 years of confrontation between Wash-ington and Tehran, and 10 years of seemingly fruitless talks be-tween Iran and the international community.

“The key reason the Geneva ac-cord is important is that it has helped form a foundation of trust that was clearly lacking during the previous years of negotiations,” said Prof. Vladimir Sazhin of the Institute of Oriental Studies at the Russian Academy of Sciences (RAN). “It is extremely important that the Iranian nuclear pro-

An international agreement signed by Mohammad Javad Zarif with six major powers in Geneva has confi rmed Iran’s right to pursue a peaceful nuclear programme and eased a crippling sanctions regime by allowing the Islamic Republic to resume exports of gold and pet-rochemicals, as well as to conduct certain types of fi nancial transac-tions on the international markets.

In return for the reduction in sanctions, worth an estimated $7-10 billion to the embattled re-gime, Iran has agreed to halt the uranium enrichment programme that the international community suspected of being part of secret plans to develop a nuclear bomb. It has made a commitment to cease enrichment of uranium above 5 per cent, to “neutralise” stocks that have already been enriched be-yond this level, and to allow great-er access to its nuclear sites for inspectors from the International Atomic Energy Agency (IAEA).

Tehran has no intention, how-ever, of dismantling the centrifug-es that permit enrichment at its facilities in Fordo and Natanz. President Hassan Rouhani said during a live appearance on Ira-nian television that Iran had re-tained its inalienable right to en-rich uranium under the terms of the Geneva deal, and “no country can deny or qualify that right”.

The true value of this month’s agreement between Iran and the so-called P5+1 group of Russia, China, the United States, France,

a united front on this issue, though they disagree on almost everything else with the possible exception of their attitude to Syria’s Bashar Al Assad.

In such a situation, Washington needed strong backing from the other mediators, said Yevgeny Shestakov of the Russian Council for Foreign and Defence Policy. “Lavrov worked hard to persuade his colleagues in Geneva that even an interim deal with Iran on a nu-clear programme, that would en-able IAEA inspectors to visit Ira-nian nuclear facilities, would be better than pressing ahead with the policy of blockade and sanc-tions,” Mr Shestakov said.

“In essence, Russia was ener-getically backing the American approach to Iran in Geneva. That was an example of practical co-operation between the two coun-tries, which ultimately enabled Moscow and Washington to agree on a date for another important international conference, the one on Syria.”

Sergei Lavrov (L) and French Foreign Minister Laurent Fabius.

YEKATERINA POKROVSKAYASPECIAL TO RBTH

Twenty-three key players in the

Russian defence and aviation

market took part in this year's

Dubai Airshow, which ran from

Nov. 17-22 and set a new record

for Russian participation.

New Russian aircraft turn heads at Dubai Airshow

International Aircraft companies show off latest models

versions of the famous MIG-29 fi ghter, and the Kamov Ka-52 Al-ligator and Mi-28NE Night Hunt-er helicopter gunships. The fi rm also brought to Dubai its unique jet-propelled amphibious aircraft, the Beriev Be-200.

Viacheslav Dzirkalin, Deputy Director of the Federal Service for

The event saw Russian fi rms ex-hibiting both commercial aircraft and military hardware.

The commercial highlights were the Sukhoi Superjet 100, which took its fi rst fl ights with Mexican airline Interjet in September, and Russian Helicopters, which pre-sented its Ka-32A11BC search-and-rescue model, the modernised heavy-lifter Mi-26T, the latest modifi cation of the popular mul-tipurpose Mi-171A2, and the pas-senger helicopter Ka-62, making its international debut at the show.

Meanwhile, Rosoboronexport presented close to 70 models of military aircraft and air defence systems, including the Sukhoi Su-35 multirole fi ghter, the latest

Military-Technical Cooperation, said that the Russian delegation was in great demand at the air-show. “The level of interest in our equipment and technology here is always very high. We have been receiving foreign delegations in-terested in our equipment through-out the whole period of the exhi-bition. We are constantly conducting business negotiations.”

According to Dzirkalin, air de-fence systems attracted attention from participants from Iraq, Sudan, Yemen and Algeria. Addi-tionally, a high-ranking delegation from Egypt expressed serious in-tentions in further cooperation in this fi eld.

Russian participants also found a chance to discuss new deals at the show. On Nov. 18, Boeing and Rostec signed an agreement to ex-pand their joint venture by estab-lishing a second Ural Boeing Man-ufacturing production facility in the Urals, Russia’s “titanium val-ley,” for parts for the new Boeing 777.

Rostec and Tawazun signed a

memorandum of understanding.

"It is important that the Iranian nuclear programme is becoming more transparent" - Prof. Vladimir Sazhin

gramme is becoming more trans-parent.”

The main obstacle to agreement had been the unwillingness of Washington and Tehran to listen to each other. Mr Lavrov said that the situation changed dramatical-ly following Mr Rouhani’s election as president.

Gleb Pavlovsky, a political an-alyst and president of the Foun-dation for Effective Politics, be-lieves that President Obama is pursuing a risky course for any US president. Détente with Iran is not universally popular in the US, while Washington’s main al-lies in the Middle East, Israel and Saudi Arabia, are putting up fi erce resistance. The two have formed

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GULF NEWS_WEDNESDAY_DECEMBER_04_2013 Economy

Russia tops BRICs for business

making the need to reform all the more urgent. Kazakh President Nursultan Nazarbayev suggests expanding the Eurasian Union to include countries like Turkey and Armenia.

“I haven’t heard of a single major company relocating to either of those countries from Russia since the Customs Union [the predecessor to the Eurasian Economic Union] came into being,” countered Alexander Ivlev, Ernst & Young's country mana-ging partner for Russia. “In Rus-sia we have a growing middle class and better margins. Plus our tax system meets the standards international investors expect.”

Real Work Still Ahead

“The easiest work is behind us,” said Andrei Nikitin, head of the Agency for Strategic Initiatives, which has been tasked with de-veloping and implementing the plans to meet Mr. Putin’s target.

Oleg Budargin, CEO of the Fe-deral Grid Company, notes that, in electrical reliability as measu-red by the number of outages, Rus-sia has already surpassed many developed countries. Outages in Russia last an average of 0.9 hours, compared to 1.7 hours in Europe and 3.3 hours globally.

“We’ve reduced the cost of an electricity connection by two-thirds to around 3,000 rubles [about $93] today, from 9,500 ru-bles in 2009. This has led to a sub-sequent increase in applications, to 416,000 in 2012 from 200,000 then,” Mr. Budargin said.

Alexei Komissarov, head of Moscow’s Department for Indus-trial Policy and Entrepreneurship, expressed gratitude for the visi-ble progress that had already been made, saying: “In Moscow, we have set up a special customs point for high-tech equipment that allows it to be imported in six hours rather than several months like before. It’s very important for the city in attracting high-tech com-panies here.”

Eurasian Union

A number of experts have poin-ted out that Russia’s common eco-nomic space with neighbors Be-larus and Kazakhstan – set to become fully operational in 2015 – could push companies to invest there instead of Russia to better take advantage of the 170 million consumer market. Belarus took 63rd place in this year’s study, while Kazakhstan came in 50th,

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ARTYOM ZAGORODNOVRBTH

After three years of intense

federal investment into the

volatile North Caucasus, the

region's tourism sector hopes

potential visitors will look beyond

its recent history.

Does tourism offer a glimmer of hope for the North Caucasus region?

Regions Area with a reputation for violence hopes to reinvent itself as a tourist hub

A brand new, French-built cable car taking international tourists to the world’s highest-altitude hotel on the ledge of Europe’s high-est mountain, with a serene, yet snowy mountainous backdrop, is not what most people picture when they think of Russia’s Caucasus Mountains, better known for ter-rorist bombs and ethnic strife.

Yet this was exactly the image the North Caucasus Development Corporation (NCDC) was trying to project to a small group of jour-nalists attending the recent un-veiling of the LeapRus hotel on Mt. Elbrus.

Following two brutal wars in Chechnya in the 1990s, sectarian violence and an ongoing insurgen-cy spilled over into neighbouring regions over the next decade. In 2010, then-President Dmitry Med-vedev announced a broad initia-tive to channel federal funding into mostly tourist projects across the entire North Caucasus. More than

“We are also conducting business negotiations with Saudi ARAM-CO on possible shipments of PDC bits and jars,” said Sakayev. “We are eager to prove the competitive advantage of our products over our competitors. Even though such big name companies as Baker Hughes and Schlumberger have been in this region for 30 years and have large market shares, we intend to show that we can per-form just as well or even better.”

Ali Al Jarwan, CEO of Abu Dhabi Marine Operating Compa-ny (ADMA OPCO) shared his feed-back on the performance of a Rus-sian oilfi eld technology unit: “One Russian company did servicing on our pipes in our offshore opera-tions. The result was excellent, and we are convinced that the com-pany’s high technology solutions are very competitive.”

Meanwhile, TMK Gulf Interna-tional Pipe Industry LLC (TMK GIPI), now a trading subsidiary company of Moscow-based TMK Group, has come forward with some effective solutions to deliver a product that meets the indus-try’s challenges.

Having started its operations in the Gulf in 2006, TMK GIPI was the fi rst company to begin manu-facturing high pressure steel lines pipes and casing pipes in Oman, and also pioneered a mill for pro-duction of high-pressure 24-inch electric resistance welded pipes in the MENA region and India.

Today TMK GIPI annual pro-duction capacity exceeds 250,000 tons. Among TMK GIPI’s major customers in the Gulf region are PDO, ADNOC’s ADCO, Kuwait Oil

related industries and small and medium businesses,” explained NCDC head Anton Pak.

Andrei Katayev, the NCDC's point man for the hospitality in-dustry, took reporters up 3,912 me-tres for the opening of LeapRus in the Republic of Kabardino-Balkaria. The hotel consists of three cylindrical structures de-signed to house up to 36 guests aiming for the summit of Europe’s highest peak.

The solar-powered facility was constructed using the latest Ital-ian green hospitality technologies. “The investors were enthusiastic about building something that pro-duces virtually no waste or harm to the surrounding environment so high up,” said Katayev.

The upcoming 2014 Winter Games in nearby Sochi have acted as a catalyst for federal efforts to stabilise the region.

Some experts have warned that Southern Russia is ripe for terror-ist attacks ahead of the Games, but overall data for the North Cau-casus Federal District are some-what encouraging. Reports by the Caucasian Knot information agen-cy show a drop in violence in all but one of the regions. The num-ber of civilian casualties from ter-rorism decreased to 87 in 2012 from 176 the year before. This year's numbers are also positive.

“If there are some positive trends, they could be explained by that fact that the federal au-thorities are not the only ones pre-paring for the Olympics,” said Alexei Arbatov of the Moscow Carnegie Centre.

Katayev countered: “We have to use next year’s Olympics as a cat-alyst for bringing people here to see the region's beauty and poten-tial.”

Chechnya's capital Grozny has been reconstructed with federal funds.

$15 billion was earmarked for eight key clusters located in re-gions like Dagestan and Ingush-etia, in hopes of creating jobs.

“We’re currently overseeing seven projects in manufacturing, tourism and agriculture, with a total investment of over $200 mil-lion. As they near completion, over 5,000 jobs will be directly creat-ed, with another 10,000–12,000 in

Oilfield suppliers eye Gulf opportunities

Company (KOC), Saudi ARAM-CO, ADGAS, Qatar Petroleum and others. The company has a service centre in Abu Dhabi and a sales office in Dubai Airport Free Zone.

Russian company Novomet ALS is co-owned by ROSNANO Group, which manages Russian govern-ment investments in innovative technology projects. Novomet es-tablished a presence in Dubai in 2007 by opening a representation office there and setting up an in-ventory facility in Ras Al Khaimah.

Originally from Perm, the com-pany has been developing its busi-ness activity throughout the MENA region by introducing a special power-saving electrical submersible pump (ESP) that has proved to be able to save from 25 to 40 per cent of power consump-tion and retain its efficiency for fi ve years. Novomet produces over 700 ESP systems per month and sees a wealth of opportunities for growth in the MENA region.

“The deeper an oil layer is, the more pumping needs to be done to extract the oil, as the pressure in the drill hole subsides. Some-times sucker rod pumping or fl uid gas extraction methods are not possible. That’s where our prod-uct has a lot of potential for this region,” said Enver Smailov, Gen-eral Manager of Novomet MENA Region.

The fi rm’s ESP system fi eld-test-ing with ADNOC will commence any day now and the pump will operate without interruption for 12 months. Recently Novomet has also become involved in Suez Gulf offshore operations, and this year won two tenders to partake in Lu-koil’s project in Iraq’s West Qurna and BP’s Rumailah project. Smailov said that operations in Iraq are due to commence in 2014.

Several Russian companies who were represented at the exhibi-tion for the fi rst time were well-received. Geostar, a manufacturer of echometers and dynamometers from Naberezhniye Chelny in Ta-tarstan, found a business partner in Dubai; and Borkhimmash, a producer of heat exchangers and compressors from the Voronezh Region, attracted a lot of interest with its products.

92 Russia’s current rank-ing in the World Bank's Doing Business

index, out of 185. Russia jumped 20 places in this year’s survey.

71 the number of places Russia jumped ahead in one year in the catego-

ry of ease of access to electricity.

IN FIGURES

CONTINUED FROM PAGE 1

250,000Annual production capacity in ton-nes exceeded by TMK Gulf Internatio-nal Pipe Industry LLC (TMK GIPI).

700Electrical submersible pump systems produced every month by Novomet ALS, co-owned by ROSNANO Group.

25-40Percentage of power consumption that Novomet's submersible pump has proved to be able to save.

THE NUMBERS

Russian oilfield service companies are attracting increasing levels of interest from Gulf firms.

TMK GIPI, a subsidiary of Moscow's TMK Group, was the first company to begin manufacturing casing pipes in Oman.

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GULF NEWS_WEDNESDAY_DECEMBER_05_2012Special Report

a

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Sochi sets a Games record of $46�billion

Winter Olympics Sochi's limited infrastructure and warm climate have contributed to the high costs

JEFF VAUGHANSPECIAL TO RBTH

The Sochi Winter Olympics will be

the costliest Games in history. But

what has the money paid for and

how will the venues be used once

the athletes have gone home?

If hosting London’s 2012 Games on a former industrial waste site seemed challenging, try holding the Winter Olympics in a sub-tro-pical region. Palm trees adorn Sochi’s Olympic Park, while in-land 450,000 cubic metres of snow sit in storage, in case the sun melts what’s on the slopes come February 7, when the Games begin. Sochi had almost no sporting facilities when Russian President Vladimir Putin charmed the In-ternational Olympic Committee’s delegates in 2007, winning the Olympics for Russia.

Its location, in a relatively un-developed part of southern Rus-sia where the climate is similar to the south of France, in part explains why the Sochi Games are fast becoming the most ex-pensive Olympics in history.

Putin promised to spend $US12 billion to get Sochi ready, but the budget has come in at $US46 bi-llion, mostly funded by the go-vernment or state-run companies. This is more than the $US44 bi-llion estimated to have been spent on Beijing 2008, and dwarfs the $US14 million price tag of London’s Games.

Sochi had serious engineering challenges, which have been over-come at considerable expense. Sochi’s Olympic Park, for exam-ple, used to be a swamp. Roads and railways had to be built to remote locations before construc-tion of the sporting facilities could even begin.

A new railway provides a 30-minute link between the two competition zones, the Coastal Cluster and the Mountain Clus-ter, and organisers say Sochi will be the most compact Winter Games yet staged.

All the arenas in the Coastal Cluster are within walking dis-tance of each other, while athle-tes will stay just five minutes away in the Olympic Village. A separate Olympic Village in the Mountain Cluster, which will host ski, snowboard and bobsleigh events, is 15 minutes from com-petition venues.

If the world’s biggest country has the dubious distinction of hosting the world’s most expen-sive Olympics, then another num-ber gives a nostalgic tinge to the occasion for Russians. The Sochi Games is the 22nd Winter Olym-piad, which mirrors the 1980 Olympics in Moscow being the 22nd Summer Olympiad.

But the return of the Olympic fl ame is to a different country, one that sees Sochi as a chance to present to the world Russia’s mo-dern face.

However, the nation's chronic problems with corruption have led to speculation over the amount of construction funds that seem to have been diverted

into offshore bank accounts. There has also been controversy over what to do with the 11 com-petition venues once the Games are over. The biggest arena, the 40,000-seat Fisht Olympic Sta-dium, will not stage any sporting events, but only the opening and closing ceremonies and medal presentations. Post-Olympics, this $US63 million stadium, named after Mount Fisht, which is visi-ble through the arena’s transpa-rent roof, will be the training and match venue for Russia’s natio-nal football team.

One plan to scatter some Olympic stardust around Russia is to relocate three of the arenas to other cities.

SVETLANA SINEPOSTOLOVICH SPECIAL TO RBTH

Russian authorities have pulled

out all the stops to ensure that

visitors to Sochi 2014 will have a

range of multi-lingual translation

services at their disposal.

If you get lost in Sochi and pas-sers-by don’t speak your langua-ge, you will be able to call the city's 24-hour information centre (8-800-550-86-42), which will have Russian, English, French, German, Chinese, Japanese and Korean speakers on hand.

They will also be able to give advice on public transport time-tables and the location of hotels, as well as call taxis or contact emergency services, if required.

Information about hospitals, pharmacies, banks, 24-hour ATMs, museums and tour operators will all be stored on their database.

Special telephones with two handsets will be another tool to help visitors communicate with Russians. If two people who speak different languages want to com-municate, they can pick up the phones and call the Sochi centre and the conversation will be translated by a third party.

These telephones will be avai-lable at Sochi's bus terminal and Sochi, Adler and Krasnaya Pol-yana railway stations, as well as at the international airport.

The phones are also being ins-talled at police and fi rst-aid sta-tions to assist visitors in times of difficulty.

Now the Olympics are a chance for Sochi to attract new tourist markets and to rebrand itself.

Sochi and London share an in-teresting parallel. A Levada poll last month found 65 per cent of

Russians thought Sochi was a waste of money, while 64 per cent of Britons surveyed told the BBC before London 2012 that the Olympics were too expensive. But just four months after the Olym-

pics, four-fi fths of Britons consi-dered it to have been money well spent – an achievement which Russia may be hard pressed to match, considering Sochi's roc-keting costs.

This article was first published byKommersant

The Sochi Winter Olympics will be

the most sophisticated in history,

offering visitors state-of-the-art

facilities and communications.

Russia steps up transport and telecom for Games

Aerofl ot passengers will also be able to enjoy Wi-Fi internet ac-cess on some of the fl ights.

New trainsRussian Railways is building the key transport route of the Games — a combined road and railway

Russia's biggest fi rms are doing their best to ensure that guests of the 2014 Games will have no dif-fi culty getting to Sochi by air or land — all while remaining con-stantly connected to the Web.

New wingsMost athletes and guests will fl y into Sochi-Adler International Airport. Aerofl ot's 2013–14 win-ter schedule has fi ve daily fl ights between Moscow and Sochi; if nec-essary, this can be raised to 12.

In addition, between Jan. 27 and Feb. 25, Aerofl ot will be operat-ing a daily service between Sochi and Frankfurt-am-Main with Air-bus A321 narrow body airliners.

grees Celsius. The trains are also the fi rst in Russia to have wheel-chair lifts fi tted. In fact, all Rus-sian Railways facilities in Sochi will have been built or retrofi tted to accommodate disabled passen-gers.

Staying connectedSpecial care has been taken to ensure uninterrupted mobile phone and Internet connectivity at peak times. Russian mobile phone operator MegaFon is work-ing to expand and improve So-chi's telecom infrastructure with over 700 new 2G/3G/4G mobile network towers.

Sochi 2014 will be the first Olympic Games to offer 4G con-nectivity at a speed of 10 MB/sec.

A new train service will link the Sochi-Adler International Airport (right) with central Sochi.

line from Adler to the Alpica-Ser-vice mountain resort; the Sanki Sliding Centre and other Olympic facilities can be reached from there. The 48km line runs through 12 tunnels and over 46 bridges.

Another new railway line will link central Sochi and the airport

in under one hour. The line will be served by Lastochka trains.

This new type of electric loco-motive, based on the Siemens De-siro design, has been developed for commuter transportation in Rus-sia and can operate in outside air temperatures from -40 to 40 de-

It will also host matches of the 2018 World Cup.

One plan to scatter some Olym-pic stardust around Russia is to dismantle three of Sochi’s arenas after the Games and relocate them to other cities. But this plan ap-pears to be foundering, with offi-cials disagreeing on where they should go. It’s likely they will stay in Sochi, and may become part of an elite winter sports academy for children.Whatever decisions are made about the future of the fa-cilities, the Olym-pics are providing Sochi with a rare opportunity to im-prove its infrastructu-re and transform its Soviet-era tourist facilities.

Sochi has a long history as both a summer and winter ho-liday destination. However, in re-cent years it has lost out to Me-diterranean beach and ski resorts.

MIKHAIL MORDASOV

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GULF NEWS_WEDNESDAY_DECEMBER_04_2013 Science&Technology

How to build the perfect submarine

Technology Top-secret shipyard that helps Russia to remain a superpower

DANIIL ILCHENKORUSSKY REPORTER

Nuclear submarines are built by

just six countries: Britain, France,

India, China, the US and Russia.

Severodvinsk, on the White Sea,

is home to Sevmash, the firm that

builds Russia's nuclear fleet.

“It's like taking a child to school for the fi rst time: On the one hand, it’s a sort of coming of age, but, on the other, you know, it’s just the beginning,” says Nikolai Se-makov, the deliverer of the fi rst fourth-generation Russian subma-rine, the Yury Dolgoruky (Borey-class project number 955).

Semakov is head of Sevmash’s construction section. It took 17 years to build his fi rst submarine.

“It was a test of our entire in-dustry, because every order in-volves more than 600 companies—an entire industry,” says Semakov. “All sorts of problems arose in the course of the work and a lot of things had to be refi ned after test-ing, but we built our next vessel, the Alexander Nevsky, in seven years, and the Vladimir Monomakh in six years.”

From tugs and barges to fi sh fac-tories, in the last couple of decades,

Sevmash has built more than 100 ships for Germany, Sweden, Nor-way and the Netherlands. The de-velopment of civil shipbuilding kept Russia’s largest defence ship-yard afl oat and, in effect, saved it from ruin in the 1990s.

“Submarine-building is a busi-ness nowadays. Gone are the days when the party leadership han-dled our production-related issues. Today we need to be able to ne-gotiate both prices and delivery dates. We survive by hook or by crook in difficult market condi-tions,” says Alexandra Vlasova, head of the company’s testing and measurement group and winner of the national Engineer of the Year 2012 award.

It is difficult to overestimate the responsibility borne by Vlasova and her team. At the submarine’s operating depth, the jet of water that shoots out of a one-centime-tre hole in the hull has enough power to cut a man in half. So it is small wonder that, when sub-mariners gather around the table on special occasions, the third toast is always: “To the hull. May it stay strong.”

Actually, submarines are not built, but welded. Today’s subma-

rines have millions of welds join-ing hundreds of thousands of com-ponents. The fi rm keeps track of who performed each weld, and this information is stored for as long as the submarine is in service.

While every weld is thoroughly

checked by X-ray and ultrasound analysis, the personalisation of re-sponsibility for a potential disas-ter on par with Chernobyl great-ly improves the quality of the work.

Still, there are places where human welders cannot work. For these places, you need a robot.

“Here, the welded seam is near-ly perfect,” says fi rst-class electri-cal engineer Sergei Ryzhkov.

We stumbled upon a small port-hole located at the halfway mark of a huge barrel that is four sto-ries high and can hold 237,755 gal-lons. Behind a thick pane of glass, a huge Terminator-like hand hov-ers over a pile of iron.

The computerised hand holds an electron-beam gun. The elec-tron beams coming out of the bar-rel glide over the surface of the metal, leaving a perfect weld.

“It is remarkable that all of the mechanical equipment was made in Russia. The Progress Research Institute in the city of Izhevsk still produces such things. The gun can execute practically any manoeu-vre. It is a unique assembly. Many know about this and are envious—the Americans, the Japanese and the Germans,” says Ryzhkov.

Stealth is the main weapon of any submarine and the entire rai-son d'etre of the fl eet. A subma-rine that is discovered is as good as destroyed, so the need to keep the noise low is a constant head-ache for those who design them.

The pitch-black anti-echo enve-lope is only the outward aspect of the technological treasures care-fully hidden under the high-strength steel hull. It is this know-how that allows Russian submarines to escape detection in the midst of NATO anti-submarine military ex-ercises and even in the Gulf of Mex-ico.

First published in Russian inRussky Reporter.

About

Sevmash

Sevmash’s Shipyard 42 built the Lenins-ky Komsomol, the So-viet Union’s first nuclear submarine, in 1957. It also built the Zolotaya Rybka, the world's first titanium submarine, in 1968; its top speed of 52 miles per hour un-derwater remains unsur-passed to this day.Gradually, the function of developing into other areas was assumed by Shipyard 55. In the 1980s, it built the Aku-la series (project num-ber 941), the largest “steel predators” in the world — as long as two football fields and as tall as a 9-storey building. The Akula is listed in the Guinness Book of Re-cords.

The identity of the person who performed each weld is stored for the duration of the submarine's service.

Unravelling the universe's secrets

QUESTIONS & ANSWERS

The Joint Institute for Nuclear Re-search (JINR), located in the city of Dubna outside of Moscow, is constructing a new ion collider to study the process of nuclear mat-ter formation. Using the facility, called the Nuclotron-based Ion Collider (NICA), Russian scientists hope to discover the secret of the birth of the universe.

Grigory Trubnikov, deputy chief engineer at JINR and a corre-sponding member of the Russian Academy of Sciences, talked with Russia Beyond the Headlines about plans for the facility.

The media refers to the NICA collid-

er as the “younger brother” of the

Large Hadron Collider (LHC). How

exactly are they related? Do you co-

operate with the European Organ-

isation for Nuclear Research (CERN)?

CERN started showing interest in participation back before the NICA project was launched. We signed a general agreement with CERN in 2008 in which the or-ganisation expressed interest in helping build and operate the Rus-sian collider.

We’ve cooperated very closely for several years now, and we ex-change technologies and develop-ments. Their experts regularly visit us, our experts visit them, we par-ticipate in sessions on their ma-chines, and they participate in ours. We have joint publications, joint test benches, and so on.

Besides that, CERN’s employ-ees are members of our expert

Grigory Trubnikov, deputy chief

engineer at JINR.

committee in both the accelerator and detector areas. They inspect the project’s key technological so-lutions twice a year. In addition, CERN shows us its developments in beam dynamic calculation soft-ware, as well as its administration programme.

What will be the main focus in the re-

search at the Russian collider?

We’ve identifi ed two basic direc-tions. The first, of course, deals with abstract science. That pri-marily entails research on the high density of nuclear matter.

Dense, hot nuclear matter is a relevant topic in global physics, especially in the last 10-12 years. It’s interesting because according to theoretical concepts, it’s pre-cisely in this state that matter ex-isted at the early stages of the for-mation of the universe.

The second direction is applied research. We’ll put nuclear medi-cine at the forefront. By using our experience from working on su-perconducting accelerators, in the future we’ll be able to establish the production of compact accel-erators for medical purposes, which will be used in particular for beam therapy for oncological diseases.

Right now there are about 15-20 such centres in the world, which help cure tens of thousands of pa-tients a year. We expect Russia to catch up with its foreign colleagues in this area in the very near fu-ture, and we expect the accelera-tor technologies that we’re using in the NICA project to be applied in our nuclear medical centres.

In addition, we’re ready to test space equipment at the NICA col-lider complex’s accelerators — to study the effects of ionising radi-ation on electronic devices and various electronic units of space-craft. We’ll be able to model on land what will happen with these devices in space.

Another important applied area is information technology. We’ve already created and are develop-ing a grid structure element to pro-cess data received during experi-ments at CERN at the LHC.

Interview conducted byYekaterina Turysheva

YELENA KRAUZOVARBC DAILY

A new device uses the latest in

technology to help the blind

navigate their surroundings in

safety without the use of a cane

or other localisers.

Startup creates navigator for the visually impaired

Ideas Young engineers find new ways to help the blind

were able to create a fully func-tional prototype using the Israeli-built PrimeSense sensor, which al-lowed the device to be made smaller and lighter. The prototype was then tested in St. Petersburg's Centre of Medical and Social Re-habilitation for the Visually Im-paired.

Oriense, an innovative Russian startup, has created a navigator to help people who are visually impaired through the use of an audio guide. The founders of the startup hope that this tool will be able to replace ultrasonic canes and other localisers.

“We secure a special device on one's chest that can see the sur-roundings and use a special inte-grated voice to warn the person about different hazards in their path,” said Vitaly Kitayev, co-founder of Oriense. The device was originally built using Kinect, a game accessory from Microsoft that imported human moves. But after receiving $20,000 from the RSV Venture Partners venture cap-ital fund, the founders of Oriense

The latest version of Oriense consists of side cameras, a micro-computer, and a 3D camera that records objects in front of the pa-tient. The system analyses the in-formation, choosing the best way to avoid an obstacle then trans-ferring this information into words and into the wireless headset. This is enough for a person to feel free and confident while moving around a room, according to Kitayev.

In August, Oriense received the highest index of investment at-tractiveness (AAA) in the Russian Startup Rating. Currently, the fi rm is in talks with private investors and venture capital funds, which are said to be ready to invest $4 million in the startup. This money will be enough to create a device that will be able to work out the colour of a traffic light or distin-guish a price tag in a supermar-ket.The expected retail price of this device will be around $800.

First published in Russian inRBC Daily.

A demonstration by Oriense at

the Australia Imagine Cup.

AFP/EA

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06RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_WEDNESDAY_DECEMBER_04_2013Culture

Even in Moscow, snow can be on the ground from November until April. But this shouldn't deter you from

making a winter trip to the Russian capital! Russians know just how to cope with winter weather — and how to make it fun. The Russian capital boasts a multitude of winter-

themed activities, from outdoor sports to master classes, to unique tours you won't fi nd anywhere else.

"RUSSIAN WINTER"

In the winter, the Kolomenskoe outdoor architectural mu-

seum complex in the south of Moscow becomes a dreamlike

park lit with magical lights, festive illuminations, and Christ-

mas trees. It off ers a programme of tours called "Russian

Winter," which allow guests to ride in a troika (a Russian sled

pulled by three horses), participate in traditional folk games,

and learn more about Russian New Year traditions.

NEW YEAR AND CHRISTMAS BAZAARS

In the run-up to the New Year celebrations, fairs will be open-

ing one a� er another in Moscow. Designer Christmas tree

ornaments, porcelain bagatelles, warm clothes and many

other items can be purchased in the "Christmas Village" at

the All-Russian Exposition Centre (VVTs). Here visitors can

also learn how to make gingerbread and send a letter to

"Ded Moroz" — Russia's equivalent of Santa Claus.

A RIVER CRUISE ON AN ICEBREAKER YACHT

Thanks to a fl eet of elegant icebreaker yachts, it's now pos-

sible to take a cruise on the Moscow River any time of year.

The yachts, part of the Radisson Royal Moscow fl eet, feature

panoramic glass covers that shield passengers from the cold

and wind. The ships escort passengers past Moscow's most

famous sights, and it is also possible to have something to

eat and drink on board the ships.

s-ar. ure cold most ng to

FREE MUSEUMS

Visitors can enter 90 Moscow museums free of charge from January 2 until January 8. Additionally, many Moscow thea-tres will off er free behind-the-scenes tours to those who want to see what goes on backstage. Local cinemas will screen contemporary Russian fi lms and the classics of Soviet fi lm, also free of charge.

NEW YEAR HOLIDAYS

New Year is the biggest holiday in Russia, and from Decem-ber 20 until January 8, it seems as if all of Moscow is partici-pating in one big party. Festivities are organised in the met-ro, in parks, theatres, museums, skating rinks and squares. From December 28 to January 8, a huge Christmas fair will spread out across the nine pedestrian areas in the centre of Moscow. All events are free.

NEWS IN BRIEF

Supersize luggage

sparks scandal

Russian representatives of French fashion house Louis Vuitton were asked to remove a huge replica of a luxury travel trunk from Red Square after a public outcry over the suitcase, which was to house an exhibition.

Politicians and ordinary Rus-sians alike were outraged by the appearance of the giant trunk beside the historic walls of the Kremlin, and the presidential ad-ministration demanded that the structure be dismantled.

Constructed at a cost of up to $10,000,000, the trunk-shaped pavilion was to display a selec-tion of travel bags, suitcases and handbags belonging to celebri-ties and historical fi gures, under the title “The Wandering Soul”.

Louis Vuitton agreed to relo-cate the trunk from Red Square to another location in Moscow in the wake of the scandal.

Though the company has al-ready carried out similar events in the US, Japan and elsewhere, the Louis Vuitton “House of Trunks” has not met with criticism in any other country. ITAR-TASS, RIA Novosti

ANASTASIA MARKITANSPECIAL TO RBTH

Few modern Russian films are

equally well-known both in Russia

and abroad. However, an Irish

filmmaker is hoping to change

this with his upcoming drama

Moscow Never Sleeps.

Russian capital is up all nightCinema Irish filmmaker on a mission to bring the flavour of Moscow life to Western screens

Irish director Johnny O’Reilly has lived in Moscow for two decades, and says that the city and its res-idents are a never-ending source of inspiration for him: “The Mos-cow lifestyle is full of life and soul, people fi ght and love more than they do in other European capi-tals.”

“Relationships in Russia are ruled along vertical power struc-tures, which makes things happen more quickly, more unexpectedly,” O’Reilly says, adding that in Eu-rope people tend to make deci-sions in a more consensual man-ner. “It makes things happen more strategically, but slower.”

This ambiguous aspect of the country is reflected in the plot, which intricately interweaves the lives of several people from vari-ous backgrounds, from a troubled businessman to a Soviet fi lm star-turned-abandoned pensioner and a singer searching for her true self.

The fi lm features both stars and promising young talents. Mikhail Yefremov, who won widespread acclaim for the anti-establishment Grazhdanin Poet project, plays an unhealthy 55-year-old who likes the simple life of an easy-going work schedule that yields enough money to feed himself and his con-siderable drinking habit. Yury

"The Moscow lifestyle is full of

life and soul," says director

Johnny O'Reilly.

takes on the role of the singer, and Anastasia Shalonko, as a teenag-er in confl ict with her stepfather.

All the characters in the fi lm live separately, but the closely inter-locking storylines and common theme create the feeling of a har-monious whole.

“Even when people are sprint-ing through their lives, fighting and loving like it's the last day on Earth, they are sometimes asleep,” says the author. But in his film Moscow “never sleeps” because it is “a teeming mass of interconnect-

ed humanity that helps to recog-nise the hidden bonds that con-nect us all.”

O’Reilly argues that not only Russian audiences will find the dramatic stories of modern Mus-covites of interest. Social drama remains one of the best-loved genres of both film experts and ordinary viewers, especially when it comes from such controversial countries as Russia.

“People in the west are hugely interested in Russia but very few have actually been here. Despite

the fact that Moscow is the big-gest city in Europe, it's still an exotic, unknown place for most Europeans,” O’Reilly says.

It is not only the director's gen-uine fascination with Moscow that makes the success of Moscow Never Sleeps likely, but also the business strategy that the creators have employed in promoting the project.

With a $3.5 million budget, it has become the fi rst Russian fi lm to receive funding from Eurimag-es, a cultural support fund of the Council of Europe. While the ma-jority of the fi nancing came from professional fi lm equity investors based in Russia and around the world, the Irish Film Board has also invested in the project.

O’Reilly openly states that his biggest short-term goal is to show the fi lm at the 2014 Cannes Film Festival. “We have little doubt that the fi lm will be selected for a com-petition slot in an A-list in Cannes because of the interest from in-ternational sales agencies into the project,” he says.

Shooting was completed in Oc-tober, and the film crew is now working on editing the picture at the famous Windmill Lane Stu-dios in Dublin, where legendary group U2 recorded their fi rst eight albums.Moscow Never Sleeps is set to debut in the capital with its Russian premiere next autumn. Asked why Russia is so attractive to him, O’Reilly replies with no hesitation: “The amplitude of hu-manity here is higher… There's more suffering, but there's also more soul.”

Moscow Never Sleeps is the first Russian film to receive funding from the support fund of the Council of Europe.

Stoyanov, known in Russia for a long-running comedy show, now adds more drama to his charac-ter. Moscow Never Sleeps is like-ly to be a launchpad to success for Rustam Akhmadeyev, who plays a thug; Yevgenia Brik, who

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07RUSSIA BEYOND THE HEADLINES WWW.RBTH.RU

GULF NEWS_WEDNESDAY_DECEMBER_04_2013 Opinion

LETTERS FROM READERS, GUEST COLUMNS AND

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RUSSIAN XENOPHOBIA: A CREED OF MISCONCEPTION

SHALE REVOLUTION COULD HIT RUSSIA WHERE IT HURTS

Sergei

MarkedonovPOLITICAL ANALYST

Natalya

LebedevaFINANCIAL ANALYST

Riots in Moscow's West Biryulyovo have once again raised the issue of inter-ethnic relations in

modern Russia and attracted the attention of the mass media. Yet the discussions now being held on the causes and consequences speak loudly of the lack of adequate un-derstanding of the situation.

The antagonism between natives and newcomers has come into sharp focus. Here, an explicit em-phasis is made on ethnic collec-tive responsibility for a crime or offence committed by a single per-son. The word “diaspora” has now become common currency. People have also begun to lump migra-tion together with other Russian domestic and foreign policy issues. Such assessments are not just flawed: They lead to incorrect management and policy decisions.

This or that ethnic group is often presented as a single, monolithic structure—a kind of state within a state. However, such an approach has nothing to do with the reality. This is explained by the virtual nature of such “unity.”

For example, the Azerbaijanis whom the riots in Biryulyovo brought into the spotlight may in reality be citizens of one of three separate countries (Azerbaijan, Russia or Georgia) and represent one of two different Muslim de-nominations (Sunni and Shia). As for the Dagestan Azerbaijanis, who represent the sixth-largest group in the North Caucasus, they can be called more “native” than some of the capital's second- and third-generation residents, many of whom are among those who shout the slogan “Russia for the Russians, Moscow for Moscow residents.”

The same applies to some of the Armenians of southern Russia's Don, Kuban and Stavropol areas, whose ancestors settled in the re-gion in the 18th century. Many of them do not speak Armenian, and Russian is as native a language

for them as it is for residents of Moscow, St. Petersburg and No-vosibirsk.

The social status of representa-tives of these “diasporas” varies widely. Russian businessmen like Vagit Alekperov, Alisher Usmanov

ple of collective guilt. This would provoke an ethnic mobilisation on a “defensive basis” and demon-strate the inability of the state to regulate issues that are supposed to have been resolved.

In contrast to the United States or the European Union, in our country, external and internal mi-grations are of paramount impor-tance. This is associated with the movement throughout the coun-try of representatives of different ethnic groups, religions and re-gions, who have different histori-cal experiences (sometimes asso-ciated with higher costs) of joining Russia, but who are now citizens of the same country.

Any attempts to impose a visa barrier on migrants from the South Caucasus and Central Asia would fi nally put an end to the Eurasian Union and integration projects (including the post-Sovi-et military-political Collective Se-curity Treaty Organisation proj-ects), as well as strengthen anti-Russian forces in these coun-tries. It should not be forgotten

that, to this day, many Russians live in these countries - more than 3 million Russians live in Kazakh-stan, more than 1 million in Uz-bekistan, and about 120,000 in Azerbaijan.

As a result, all these people will become hostages in the struggle for the purity of blood. Meanwhile, geopolitical threats such as the “export of Afghanistan” will not be stopped by visa barriers.

If the growing xenophobia in Russia is not opposed by a nation-al political strategy that includes the regulation of the two differ-ent migration streams (internal and external) and widespread ed-ucation, and even, I dare say, ad-vocating a united Russian politi-cal identity and integration projects in various fi elds and areas, then the country will suffer seri-ous damage to both its domestic and foreign policies.

The author is a visiting fellow at the Center for Strategic and In-ternational Studies in Washing-ton, DC

An explicit emphasis is made on ethnic collective responsibility for a crime committed by a single person.

Analysts at Goldman Sachs predict that the US will become the world's biggest oil producer by 2017.

and Ruben Vardanyan cannot be compared with traders in the mar-kets and shops or small business-men. While a diaspora is often rep-resented by several public organisations, they are not respon-sible for the crimes of their citi-zens (who, moreover, may have var-ious passports/citizenships). It would be extremely dangerous to replace the principle of individu-al responsibility with the princi-

Recently, more and more experts have begun won-dering how long Russia can remain one of the

world’s leading exporters of raw hydrocarbons. The latest trends in the petrochemical sector in-dicate that competitors are emerging where they were least expected, and the biggest import-ers are declaring that they are prepared, at least in part, to re-fuse imports of oil and gas.

A key threat to the Russian market is the so-called shale rev-olution. Though the initial cost of shale oil extraction is $70 to $90 per barrel - signifi cantly high-er than that of traditional oil - it makes sense when oil sells glob-ally at $100 per barrel.

Russian fi rms saw no sense in investing in these unprofitable projects, as it has a large number of untapped deposits with an ini-tial extraction cost of only $20 per barrel. Meanwhile, the Unit-ed States, which began to invest in developing shale oil and gas extraction technology around 15 years ago, has made a break-through and is now on its way to being self-sufficient in energy. An-alysts at Goldman Sachs are cer-tain that, by 2017, the US will be-come the world’s largest oil producer, overtaking Russia and Saudi Arabia.

What does this mean for Rus-sia? Any increase in production means a drop in the price on the global energy market. For coun-tries, this means a sharp reduc-tion in budgetary income. The pet-rochemical sector cannot be competitive without the develop-ment of production and infra-structure. Competiveness has to be preserved, so as not to lose es-tablished markets.

Thus, Western Europe is Rus-sia’s “favourite consumer.” It is sta-ble, has infrastructure in place to transport oil, and tankers can be used to conveniently deliver oil

products via the Black Sea. There is however one problem: Ecologi-cal requirements in the region are increasing all the time, forcing Rus-sian companies to invest in mod-ernising production. Though this is possible while oil prices are higher than $100 per barrel, it is a com-pletely different situation if global prices fall due to an increase in pro-duction. Russian petroleum ex-perts are proceeding on the basis that, if America is close to achiev-ing oil self-sufficiency, Western Eu-rope will require supplies from Russia for a long time to come. Opportunities for shale extraction are limited in Western Europe by a lack of space and ecological risks.

In the Far East, the Japan Pe-troleum Exportation Company is planning to start exploratory shale extraction in northern Japan in 2014. China is not far behind.

Natalya Lebedeva is a fi nancial analyst and general director of the consulting company Miravil Group.

Correspondingly, Russia has only 10 years to do all it can to prevent exit from the market. Chinese de-mand for oil is bound to increase, as Beijing is only now beginning to develop shale oil extraction, so a deal recently signed between Rosneft and the China National Petroleum Corporation to supply oil to China for 25 years is a sig-nifi cant step in this direction.

Though in the long term, the de-velopment of shale technology will leave Russian exporters with just the European markets, Russian fi rms will continue to be profi t-able by dint of a sufficiently high marginal sum from hydrocarbon exports. Nonetheless, the days of high oil profi ts are numbered.

SNOWDEN – THE ONLY SOLZHENITSYN WE DESERVE

Dmitry

BabichPOLITICAL ANALYST

Is the former NSA analyst a modern-day dissident?

There are many interesting similarities between Edward

Snowden and the famous Russian dissident writer Alexander Sol-zhenitsyn (1918-2008). The most recent example is the interview Snowden recently gave to the New York Times explaining his actions and denying rumours that he had passed US secrets to Russian and Chinese spies.

This interview came too late. It took place several months after the peak of Snowden hysteria. Likewise, Solzhenitsyn’s return to Russia in 1994, 20 years after his exile from the USSR in 1974, was seen by many as belated – it should

standing abroad. But here the sim-ilarities end. Brezhnev could have sent Solzhenitsyn to the Gulag – the system of camps was still func-tioning in the 1970s, even if on a smaller scale – but the Soviet pre-mier preferred to avoid a trial, which would have been a public relations disaster for the Soviet Union.

Instead, Solzhenitsyn was sent to West Germany. Snowden, how-ever, was already in exile when he made his revelations. US Presi-dent Barack Obama has since at-tempted to bring him back to the country to stand trial. In the case of Snowden, the saying is true that history repeats itself not as trag-edy, but as a particularly Orwellian type of farce.

Dmitry Babich is a columnist for Voice of Russia radio.

have taken place in 1989-1991 as the Soviet state was collapsing.

In the interview, Snowden ex-plained that he did not consider his actions anti-American and that he carried no sensitive documents after releasing the information on the NSA’s surveillance programmes to journalists in Hong Kong.

He also defended himself from accusations of working for Chi-nese or Russian intelligence, stat-ing that he had carefully protect-ed sensitive data from Chinese intelligence officers.

The disparity between Sol-zhenitsyn and Snowden is in form, not in substance. In the 1950s and 1960s, when Solzhenitsyn wrote his best books, people still read epistolary novels, whereas in Snowden’s time, people prefer the real thing – genuine e-mail mes-sages leaked onto the Internet. But

the authorities in both cases re-acted the same way. Neither the Soviet authorities in Solzhenit-syn’s 1970s nor the US authori-ties in 2013 denied the truth of the revelations -they just said that the author was presenting atypi-cal phenomena. Leonid Brezhnev could not deny the existence of the Gulag camps, but he said that they were “deviations from the way of Socialist law” and “individual mistakes.”

In the same way, the NSA’s de-fenders in the US said that the PRISM programme was targeting terrorists, adding that it was un-fortunate if some ordinary citizens were eavesdropped on, but this was not standard practice - even if the “individual mistakes” could be counted in the millions.

Both Solzhenitsyn and Snowden were criticised by some of their

compatriots for revealing their fi ndings to foreigners and not to their own domestic bureaucrats. And the people who helped Sol-zhenitsyn transfer the manuscripts of his novels abroad had problems

with the KGB just as the Ameri-can and British authorities have put pressure on the journalists who helped Snowden reveal his secrets.

In both cases, the truth seekers found some support and under-

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RECIPE

Christmas spicy roast chicken with vegetables

This is my own version of roasted chicken. It is not exactly the tra-ditional Russian version - I hardly picture Indian foodies, say, making pickled cabbage and stuffing their roasts with that. I prefer to use chicken with the skin because after roasting it will be very juicy inside with the crispy skin outside. The technique is to mix the spices together and stuff it under the skin of the chick-en. The masala will penetrate the meat and the skin will become crispy.

Ingredients (For 6-8 pieces)

• Whole chicken with skin 1 pc• Garlic 15 cloves• Rosemary 1 tbsp• Kashmiri chilli 1 tbsp• Vegetable oil 2 tbsp• Black pepper 1 tbsp• Sugar 2 tsp• For the vegetables:• Potatoes 4 pcs• Large carrots 2 pcs• Large courgette 1 pc• Garlic 6 cloves• Rosemary 1 tsp• Chili 1 tsp• Olive oil or butter• Black pepper• Salt

Preparation

Vegetables:There is no need to peel the veg-etables as long as you wash them thoroughly. Cut the potatoes into equal segments, the thickness de-pends on your taste. Cut the carrots and courgette into similar segments. Rub all the spices and oil onto the vegetables and they are ready to be roasted!Roast chicken:Mix all the ingredients together; you can use a mortar and pestle for that. The tricky part of this recipe is to separate the skin of the chick-en from the flesh. It should be done by gently inserting your fingers un-der the skin, trying not to damage it. Once you have done that, you can take the marinade and spread it un-der the skin.Preheat your oven to 240°C. Turn the heat down immediately to 200°C and cook the chicken for 1 hour and 20 minutes. If you are do-ing roasted potatoes and veggies, get them into the oven for the last 45 minutes of cooking. Check the chicken halfway through cooking and if the vegetables look dry, add a splash of water to the tray to stop them burning. When cooked, take the tray out of the oven and transfer the chicken to a board. Cover with a layer of tin foil and a tea towel and set aside to rest for 15 minutes before serving.

Yelena

RevinskayaSPECIAL TO RBTH

JONATHAN HOEFLERLOREMASER

A former Ikea employee has

created a Russian clothing brand

inspired by the Swedish giant’s

ideology. His company "Oh, my"

is now aiming to lead the Russian

market in clothing basics.

Sewn in Russia: fashion startup inspired by IkeaFashion A new clothing brand based on simplicity is making waves on the market

Five years ago, Sergei Kovelenov had the idea of starting his own brand. Three years later, he tur-ned this concept into a fashion startup called “Oh, my”— a basic apparel brand with ambitions to become a leader in this segment of the Russian market. Largely ins-pired by Ikea, the brand focuses on simplicity, warmth and comfort.

“The Russian market did not have enough clothing fi rms spe-cialising in simplicity, let alone promoting it,” said Kovelenov. “Meanwhile, well-informed young people had already taken up Wes-tern fashion blogs’ ideas and rea-lised the importance of basic ele-ments in creating an image.

Launched in 2009, its collection of dresses, which cost $150–200, was too expensive to manufactu-re and implement.

Meanwhile, sales in multi-brand online stores and through corner stores in shopping centres scared potential consumers off and were not good for the brand either, given

the high commission rates and the small volume of sales. As a result, Kovelenov decided to focus on de-veloping the brand’s online store and marketing via social networks.

The online store, ohmyltd.ru, was launched in spring 2010. The fi rst products were T-shirts and sweats-hirts in black, white and grey.

Today, the brand sells about 50 designs of everyday basics for women and men — long-sleeved tops, T-shirts and sweatshirts.

Kovelenov said that the initial capital amounted to $20,000 of their own funds and about $20,000 of loans. The majority of buyers are from Moscow (70 per cent) and St. Petersburg (20 per cent).

Within two years, the company was bringing in monthly sales of $50,000, with average purchases of $80. Each garment sells on the website for prices ranging between $16 and $80. Fabrics are impor-ted but the clothes are made in Russia — in St. Petersburg and in the Leningrad and Moscow re-gions. Seasonal wool designs are produced in Latvia.

“Oh, my” has plans to branch out in the future. Currently, gar-ments only come in black, grey and white, but slowly new colours will be added to the lines. The fi rm is slated to open stores in Estonia, Turkey and Italy by next year.

The “Oh, my” brand focuses on simplicity, warmth and comfort.

An afternoon spent browsing on

a flea market offers a fascinating

glimpse into the nation's past.

$40,000was the initial capital for the busi-ness. One half came from Kovelenov’s personal savings and the other from bank loans and loans from friends.

$50,000is how much the brand earns in monthly sales after two years in exis-tence. The average purchase on the store’s website amounts to $80.

THE NUMBERS

GALINA ZHIKHOREVASPECIAL TO RBTH

Besides being a paradise for

collectors, the second-hand

markets of St. Petersburg and

Moscow (“bloshki” in Russian) are

also the perfect place to hunt for

unusual and original keepsakes.

Flea markets: In search of hidden gems

Travel Where to pick up a bargain souvenir

Before World War II, Moscow's Tishinskaya Square used to be home to a huge market — one of the biggest in the city. In the ‘60s–‘90s, it was a major draw for trendy youth, a place where one could fi nd unique items for pock-et change. It was a Mecca for local fashionistas, even in those days of ubiquitous defi cit and low income.

The contemporary fair is just a shadow of its former self; the "Tishinka" market has been re-placed by a shopping centre.

However, other authentic plac-es remain. The Udelny market in the St. Petersburg suburbs is con-sidered Russia's main fl ea market, while the Mark railway platform in Moscow was home to semi-le-gal trade for a while and was a real experience for those who made it there.

No one spoke a word of Eng-lish, the items were displayed on scraps of newspaper and cloth right on the ground, and most of the vendors were reminiscent of

characters from Maxim Gorky’s “Na Dne” (“The Lower Depths”).

In 2010, the market moved to the Novopodrezkovo railway plat-form (on the St. Petersburg line) and became more civilised. Even so, it is still deemed the most au-thentic, despite never-ending ru-mours about its imminent closure.

That said, there are markets pro-moted by the Moscow authorities that are well-equipped and easily accessible. These offer a half-way

solution by giving space to both antique stalls and poor pension-ers selling their own things.

One such market is located in northeast Moscow, just a 10-min-ute walk from the Partizanskaya metro station. The sign “Vernisazh” marks the start of the boulevard leading to the multicoloured domes of the Izmailovsky Krem-lin — a white brick palace resem-bling the Kremlin in Red Square.

Trade starts at the very entrance, where elderly yet spirited women sell old cutlery and back issues of

However, fi nding something sui-table in Russia was often difficult.”

He decided to create a brand for Russia’s “Westerners” — resi-dents of large cities with Western values based on private property, family and education.

In its fi rst years, the startup ex-perienced the usual trial and error.

The history of Russia flows past under your gaze, from stall to stall - military uniforms, diving suits, busts of Lenin. various magazines. This is a lu-

crative spot that guarantees a bonus to their small pension.

A man asks one of the sellers the price of a tin with a picture of a sturgeon on it—the kind of tins in which black caviar used to be sold. It costs 300 rubles (about $10). Nearby, a fashionably dressed girl in rubber boots and a bright-ly-coloured coat excitedly yells into her iPhone: “Just got a super gramophone — and it works!”

No doubt, this is the place to go for souvenirs. If you take it seri-ously and do not grab the first fl ashy matryoshka (Russian doll)

you see, you can find some-

thing truly memorable, unique and valuable. You are not likely to get it cheap, though.

The vendors make their profi t from tourists, so most prices are far from modest. Still, foreigners are treated with respect, and most sellers speak some English.

At the weekends, the selection is large — especially in the morn-ing. On weekdays, just two trad-ing rows are open. The Vernisazh wooden stalls, carved in Slavonic style, create the atmosphere of a traditional Russian fair.

All of Russia's folk crafts are represented here — laces, shawls, Pavloposadsky headscarves, ce-ramics, blacksmith and leather shops, animal skins, amber, crys-tal, etc. The history of the country fl ows past under your gaze, from

s ta l l to stall — military uni-

forms, diving suits, busts of Lenin (the smallest would cost you about 1,500 rubles). Even Belomorkanal cigarettes, which were popular in Soviet times — and which can still be found on sale for a few kopeks — cost 350 rubles here. A battered pack from those far-off days is al-ready an antique item.

Most vendors are collectors. A man in his fi fties wearing a sailor shirt talks about his huge stall full of pin badges: “This is nothing — just 20 per cent of what I’ve got. Not everything, but what I have on me today… I’ve been collect-ing pins since I was 20, and I know other collectors, of course. It’s im-possible to be on your own, you have to exchange constantly.”

Not all the items on the market are rare and antique — many are just stylised modern creations. Nonetheless, seek and ye shall fi nd.

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