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Opinion

Inside view

The ups and downs of Russia’s much-desired WTO membership

Duma elections: Power-sharing arrangement

PAGE 6

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Thursday, 24 november 2011

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

EU-Russia summit Russians get set to cast their ballots as the Kremlin heads for Brussels

Visas, trade on the agenda

International partners roll up to take part in the initiative, but questions linger about its viability.

Russia needs to show resolve on the EU visa question, but it risks being too forceful and driving Brussels back onto the defensive.

Alexander Vostrov russia now

to reluctance to put Russia in a more privileged position than Georgia, Ukraine and Moldova, all potential future EU members. Another possible motive is that any breakthrough, positive decision by the EU in its relations with Russia could be construed as an endorsement of the Kremlin’s overall policy course.

Dubbed “innovation city”, the cluster of research institutes and private companies rising at Skolkovo, outside Moscow, has ambitions of becoming a new home for investors and scientists from far beyond the borders of Russia. The brainchild of President Dmitry Medvedev, Skolkovo is the most visible sign yet of Medvedev’s drive to modernise the Russian economy and move the country beyond its dependence on oil and gas exports. The Skolkovo initiative hopes to return Russia’s largely uncompetitive science and technology sectors to the high prestige they held in the Soviet Union, this time with the profit motive in mind. Companies based here are on the verge of bringing the first products to market. Located just outside the Moscow ring road, the complex is planned to become the home for 15,000 scientists, researchers, entrepreneurs and their families when completed in 2014.

continued on PAGE 2

CONTINUED ON PAGE 3

Vladimir Babkin

kommersant

russia now

For ordinary Russians (and that’s precisely whose voices are increasingly important in the run-up to the parliamentary and presidential elections), the most important issue in EU relations is the visa regime. This is no less true now, ahead of the December EU-Russia summit in Brussels, than it was in June during the last summit in Nizhny Novgorod. Unless the public mood p e rc e ive s s i g n i fi c a n t progress on easing travel restrictions, other joint initiatives between Moscow and Brussels are unlikely to receive popular support in Russia. However, when it comes to visa prospects, there is no consensus in Russia. In late October, Foreign Minister Sergei Lavrov expressed hope that a joint list of steps to move towards a visa-free regime would be approved at the December summit, followed in a few months by direct negotiations to resolve the question.

Skolkovo project on the rise

Herman Van Rompuy, Dmitry Medvedev and José Manuel Barroso share a laugh at the EU-Russia summit in June.

Ordinary citizens do not share the minister’s optimism.“They can wrap fish in their road maps,” said Polina Kiseleva indignantly, referring to the agreement to create four “common spaces”: economic, national security and justice, external security, and science and education. Polina’s father, an ardent fan of the Russian biathlon team, wanted to travel to

Sweden in November to watch the team compete in an international event. His loving daughter has twice made the 800-kilometre round trip from Nizhny Novgorod to Moscow to deliver visa documents to the Swedish embassy, and her scepticism is understandable.“They don’t respect us,” Polina said. The list of joint steps required to lift visa require-

ments for short-term trips by Russian and EU citizens to each other’s countries is 99% ready, diplomats say. But the remaining 1% will be difficult to agree on. Moscow insists that approval of the list would automatically activate the mechanism for abolishing visas. Brussels says this is not yet guaranteed. Some Russian observers attribute Europe’s slow pace

Finance The aftermath of Cannes

inside

Energy Looking to the east, too

Eurozone: Russia and China to the rescue?

Travel Beyond the Moscow stereotypes

New pipes, tankers broaden gas options

Analysts see the BRICS countries stepping up to play a major role in solving the European debt crisis. Andrey Weissman Russia now

The most significant decision to come out of the G20 summit in Cannes at the beginning of November was made not at the summit itself, but at a meeting on the sidelines. Leaders of the BRICS countries –

Brazil, Russia, India, China and South Africa – met separately and decided to work out a common position on the eurozone’s problems – a move that shows that the group is becoming a real global player. The central issue facing world leaders in Cannes was the mounting debt of eurozone members. continued on PAGE 4

featureS

page 8

Environment A scientist fights to save a sea

Russian gas producers will be less dependent on a handful of big customers. Pavel Arakov russia now

Features

laif/vostock-photo

page 8

Pipes emerge from the wet sand near where a pine forest runs down to the leaden waters of the Baltic Sea. The Nord Stream pipeline began disgorging its cargo of natural gas here in Lubmin, Germany on 8 November, bringing

the Russian and German leaders to this resort and industrial town.Yet for the Russian gas industry Nord Stream represents just one among many current or planned projects whose scope extends from the European Union to the Far East and which will exploit new pipelines and a growing fleet of gas tankers. continued on PAGE 5


02

Politics

Russia now www.rbth.ru 24 NOVEMBER 2011 section sponsored by rossiyskaya gazeta, russia

continued from page 1

“The European Union’s main strategic concern is Russia’s domestic policy on the one hand, and Moscow’s desire to in one form or another reintegrate the former Soviet space,” said Nikolai Kaveshnikov, an expert on European integration at the Russian Academy of Sciences. That said, experts don’t rule out Brussels or individual members of the EU making certain economic demands. Russian experts believe that the Kremlin will also not consent to show leniency in this area. “It is inadvisable for Russia to make significant economic concessions in EU talks on transitioning to a visa-free regime,”said Alexei Kuznetsov, head of the Centre for European Studies at the In-

culture voice serious concerns that these sectors would take a hit from the country’s new foreign economic status. They fear being unable to withstand competition from foreign manufacturers and farmers, especially European ones. And the Partnership for Modernisation (one of the new Russia-EU joint programs) won’t help, according to some sceptics. Russian farmers were pleased with the recent ban on the import of European vegetables, seeing it as a protectionist measure by the state, and were upset when the ban was lifted. “Why get tomatoes and cucumbers from Holland? I can feed them to half of Russia,” says Nikolai, a landowner from Stavropol, a southern

stitute of World Economy and International Relations. “In the EU, only strong partners are respected, but weak ones are forced to make additional concessions.” There are still unresolved

Growing vegetables is easy. Not so competing against European agribusiness. economic issues in MoscowBrussels relations, despite the successful conclusion of negotiations on Russia’s entry to the World Trade Organisation. These questions are not raised only by politicians and big business. Many in Russian manufacturing industries and agri-

lori/legion media

Visas, trade top summit agenda

Russia's desire to move closer to Europe can be illustrated by the Square of Europe in the center of Moscow.

ation between Russia and Europe, the parties’ interests still remain different. Diversification of energy supply in the EU is a concern not only to the major Russian oil and gas players, but also to millions of people whose welfare depends on those companies’ revenues. No matter which political party they support, the ma-

jority of Russians plan to vote“for a strong Russia”in the State Duma elections on 4 December, political pundits are saying. All parties vying for seats in parliament promise to make the country even stronger internationally. In light of these promises it seems unlikely that Russia will make concessions to the EU.

pipeline to Europe. This would open a direct route from Turkmenistan’s gas

fields to European consumers.The EU’s inability to nail down concrete commitments from the eastern partners, however, has left both projects at the talking stage. The pipeline scheme“is about much more than gas infrastructure, and the issue is not limited to the energy sector”, Chizhov said. The five countries that border the Caspian – Russia, Az-

erbaijan, Iran,Turkmenistan and Kazakhstan – all possess vast hydrocarbon reserves that Europe and other big energy consumers including China are eager to tap. A declaration the five Caspian Sea nations signed in Tehran in 2007 states that key components of Caspian Sea policy should be decided by consensus, Chizhov said, adding that construction of a pipeline on the seabed “qualifies as a key issue”. “Unfortunately, the Europe-

an Union did not discuss this [pipeline] project either with Russia or with the other nations that are not directly involved in it,” he said. The EU and other backers of the project “bear full responsibility”under international law for the environmental and other questions it raises, he said. Ecological implications of the project need to be considered, as the sea is a closed ecosystem and is located in an area of high seismic activity, the envoy said.

the other, Russians no longer want their country to pursue closer integration with a united Europe. The fatigue in MoscowBrussels relations grows more and more obvious.The parties need to take frequent pauses to figure out how to proceed. But breaks are needed: the agendas for the regular Russia-EU summits, like the one coming up in December, are constantly shrinking, boiled down to discussion of recurring issues. The impression is growing in Russia that a united Europe is no longer capable of long-term strategic decisions. Most of the questions given priority in top-level

negotiations have not seen practical development.Work on a new basic agreement between Russia and the EU is stalled. Moscow is tired of waiting for Brussels to revive interest in closer ties with its eastern neighbour. Russia is ready to partner with the EU, but only on equal terms. It should not be treated as a negligent student always under threat of a failing grade for behaviour. The problem is that Moscow sees no demand for closer ties from the Old World, which is still fenced off from Russia by visa barriers and restrictive measures on Russian business. It’s beginning to seem as though Europe,

in mid-crisis, is chiefly interested in preserving an asymmetrical trade system with Russia. That is understandable: the world is full of goods and services. Asia, by contrast, seeks ways to get closer to Russia and is ready to grant it equal partner status. Asian countries see that rapprochement with Moscow has considerable economic potential. Debate about which way – European or Asiatic – Russia will choose to go in the next five years is based on outdated intellectual models. Russia remains one of few countries in the world capable of conducting its own foreign policy game. According to Foreign Min-

istry Sergei Lavrov, Russia is willing to wait for the European Commission to“mature on the visa issue”. But while Russia waits for rapprochement with the West, Moscow continues to be active in its own interests in the East. This isn’t about a defiant freeze on relations with the European Union. But as one of the participants in the Valdai Club forum commented,“Orienting toward Asia is not a civilisational choice, but is necessary to allow Russia to maintain its rightful place in world politics.”

region in European Russia. But he was mum about underdeveloped infrastructure and the high prices that vegetables go for in big cities. Even after WTO entry, Russian imports of vegetables are going to be dwarfed by its exports of gas and oil to the EU. No matter how many good things have been said about energy co-oper-

Russia’s envoy to the EU insists the trans-Caspian pipeline scheme must be negotiated with all five countries that border the sea. victor onuchko russia now

The European Union is failing to respect the views of Russia and other Caspian Sea countries in its drive to diversify its energy supply,

Russia’s ambassador to the European Union says. In an interview in October, Vladimir Chizhov said the problems associated with the proposed trans-Caspian gas pipeline are both political and legal. The EU proposes to link Turkmenistan and Azerbaijan with a new pipeline across the Caspian, meant to hook up with the Nabucco

Comment

Russia’s future course is pro-world, not anti-Europe Yevgeny Shestakov

journalist

A

mong Russians, the desire to live in Europe is weakening. That was the message of research presented in early November to the annual forum of the Valdai Club, a group of prominent international experts on

Russian affairs. Based on data from interviews with focus groups, experts from the Centre for Strategic Research drew the conclusion that only one in three members of the Russian middle class fully shares traditional European values. On the one hand, European countries top the list of nations with whom closer ties would be desirable for Russia. On

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Modernization

Russia now www.rbth.ru 24 NOVEMBER 2011 section sponsored by rossiyskaya gazeta, russia

03

Innovation City project on the rise CONTINUED FROM Page 1

Entrepreneurs, scientists and a university will be housed at the 600-hectare Skolkovo site

press service

More than 200 private companies are taking part in the Skolkovo initiative. will reduce its share of the funding to 50% and eventually withdraw altogether. Supporters of the initiative draw inspiration from its early successes.Portfolio investments in Skolkovo have already reached €150 million, with global

giants Siemens, Boeing, EADS, Intel, Nokia, General Electric and IBM among its business partners. Naumov and his colleagues at the foundation are well aware that even a publicly funded project must operate by market laws: you have to get investors interested or you will not sell your product. The opportunity to create start-ups will also help entice investors. Research and business at the future city of innova-

tion will be concentrated in five technology clusters: IT, nuclear, space, energy and biomedicine. Within this framework, the foundation intends to build a huge international research network that should be of equal interest to investors and scientists. Recently, Skolkovo and the Massachusetts Institute of Technology announced plans to set up a joint Skolkovo Science and Technology Institute, meant to be a university where business and inno-

Innovators with heart

QUESTIONS & Answers

Smart meter could save lives

alexandra bazdenkova russia now

As its inventor explains, the DO-RA is a dosimeter-radiometer which can be attached to a mobile phone or laptop computer. If the user enters a high-radiation area the device issues warnings by voice, text and light signals.The device can also display a real-time radiation map of a given site and deliver information on health risks associated with the measured level of radiation. Users or their doctors can access this information at any time. How did you come up with the idea for the DO-RA? I had the idea in March, when I was asked to write an article about the Fukushima events.As I was taught at the Bauman Technical

University, if you don’t understand something, figure it out; if you doubt something, verify it; and if you feel confident, do it yourself! That’s exactly what I did in this particular case. What difficulties did you face? Assembling a team of developers was a problem; it took around two months. I stumbled onto a solid team by pure luck. Another problem was financing.Very few Russian banks lend money for scientific and technical projects. Most Russian inventors are far from rich, while people with money don’t like to risk their capital. So the main problem for Russia’s inventors is lack of funds to promote their inventions. My advice for Russian inventors is to fight for grants to develop their inventions from places like Skolkovo. WhatisSkolkovo’sroleinyour project? I used the Skolkovo website

A better artificial heart valve. A safer way to kill cancer cells. Innovations developed at Skolkovo promise to transform lives. Tatyana Toropova russia now

The radiation counter operates with mobile devices.

to create a road map of the project, including a detailed description of its research and development components and a business plan. After a preliminary assessment by a panel of ten industry experts, five Russians and five foreigners, the board decided that my project complied with Skolkovo requirements. As a Skolkovo resident, Intersoft Eurasia, the developer of the DO-RA, will only have to pay a 14% payroll tax.We will be exempt from all other taxes. A company can only qualify for such exemptions under the Russian tax system by conducting R&D work as a part of proprietary innovation projects with the subsequent commercialisation of the invention.

biography

Vladimir Elin

itar-tass

Vladimir Elin invented a radiation detector that talks to mobile phones. Skolkovo offers his company a low-tax home.

Putin exchange jobs next spring with Medvedev taking the less powerful post of prime minister? Political scientist Nikolai Zlobin says Skolkovo has always been Medvedev’s personal project and doubts that it will hold the same allure for Putin. Naumov disagrees. He says Skolkovo rises above the personal idiosyncrasies of politicians. “The project’s future does not hinge on any possible reshuffles within the government,” he says.

vation activity goes on side by side with training and research. Students at “SkTech”will receive guidance from 200 lecturers and 300 research fellows, to be recruited from Russia and abroad. Scientists from MIT, Harvard, Stanford and other globally renowned institutions will be invited to deliver lectures. Questions still linger around the project, however. Can Medvedev’s vision survive when, as expected, he and Vladimir

Born in 1957, he received a doctorate in technical science from Bauman Moscow State Technical University in 1984. Founder and head (1995-2007) of the customs warehouse operator EMSTS. Named CEO at Smart Logistic Group in 2007. Manages the DO-RA project.

Biomedical research at Skolkovo ranges from the development of speech-recognition software to artificial 3D vision technology. One invention that is already helping extend life is a mechanical heart valve which its developers hope will eventually replace the US-designed bi-leaflet valves used for more than 20 years. “Our valve model is based on three nano components,” said Alexander Samkov, one of the developers of the valve.“Everything was made using special equipment with up to 150-nanometre tolerance.” Clinical trials have been completed and patents have been obtained in Russia, the European Union and the United States. The company has a green light from the Russian ministry of health to start manufacturing and marketing the de-

photoxpress

Skolkovo’s builders have not skimped on providing a comfortable and attractive environment, making use of the talents of architects and designers such as the French landscape designer Michel Desvigne. Living conditions, however, are not the only way to attract foreign and Russian brains. Companies participating in the project will get considerable customs and tax benefits. The Skolkovo Foundation has already signed up 200 companies and the figure is likely to reach 250 by the end of the year. The foundation has already invested 4.7 billion rubles (€110 million) in 40 start-ups. However, as some critics point out, almost all of that money has come from the government. “How can they speculate on building a competitive environment at Skolkovo while living off the state?” wonders Mikhail Emelyanov, deputy leader of the Just Russia faction in the State Duma. “It is customary to castigate all government initiatives in Russia and nothing could be more pleasant than to lash out against what appears to be a very controversial project,”says Skolkovo Foundation vicepresident Stanislav Naumov. Naumov is sure the state

vice. The valves have been implanted in 40 patients already, including a six-yearold boy. Another Skolkovo-based company is in the early stages of researching a process that could revolutionise cancer treatment.They have developed a way to carry anti-cancer drugs directly to the nuclei of target cells. Expensive clinical trials are needed in addition to regulatory approvals in order for the process to reach the market. The company applied for a $500,000 Skolkovo Foundation grant and has raised as much from investors.


04

Economy

Russia now www.rbth.ru 24 NOVEMBER 2011 section sponsored by rossiyskaya gazeta, russia

Eurozone: Russia and China to the rescue? continued from page 1

THE numbers

$10

billion: Russian offer to invest in eurozone economies. “A drop in the ocean”, analyst Denis Barabanov says.

reuters/vostock-photo

In the final declaration, the G20 leaders merely said they were committed to increasing the resources of the International Monetary Fund, clearly with an eye to helping the most indebted EU countries, but gave no concrete details, and welcomed the resolve of the Europeans to defend the euro. Major emerging markets have a stake in preventing a financial disaster in Europe because it would inevitably spread to other regions. The EU is a key trading partner for the BRICS. The EU’s trade with China stands at €35.6 billion – €800 million more than its trade with the United States.The eurozone also accounts for 50% of Russia’s foreign trade. So, if the Greek scenario spreads to Italy and other debt-ridden EU countries, a new world financial crisis would become almost inevitable. Experts calculate that, in order to deal with the problem, €1 trillion will be needed before the end of this year and a further €1.5 trillion next year. The European Financial Stability Facility (EFSF) cannot resolve this problem alone. There is growing talk on the market that the eurozone cannot do without outside help, in-

Leaders of the BRICS countries at their April summit in China.

After a slow start, BRICS is beginning to act like a real player in the global economy, cluding from the emerging markets. BRICS countries have been discussing options for helping the eurozone since September. IMF head Christine Lagarde has sup-

mechanisms, purchase of the problem countries’ debt instruments … In fact, China has already embarked on this road.” Beijing has already bought €100 billion worth of Italian debts, and EFSF head Klaus Regling held talks in the Chinese capital in October on further investments, with figures of up to €100 billion reported. In mid-October, Russia indicated that it was prepared

ported the group’s efforts, which is notable because co-operation with the IMF is necessary for delivering any aid the BRICS decide to provide. “Financial support for the eurozone by major emerging markets is highly probable,”said Bogdan Zvarich, chief analyst with the investment firm Net Trader. “The forms may vary: loans from individual BRICS countries through IMF

to lend the eurozone $10 billion, and during the Cannes summit, Russian President Dmitry Medvedev reaffirmed that this was a possibility. But the decision by the group to act together represents a new phase in the development of the BRICS from a collective of emerging economies to a global economic and political force. “The appearance of a common BRICS position means that its status is rising to that of a real global player. It is worth the effort. These countries can meet the challenge”, said Nikita Maslennikov, an adviser to the Institute of Contemporary Development. He describes the decision to hammer out a common position as “the start of the process of BRICS positioning itself as a subject of geopolitics. It is already a player in the world economy but it has yet to emerge as a player in global politics”.

“The overall picture shows that BRICS countries tend to solve issues collectively. That means that BRICS will channel its aid to the Europeans through the International Monetary Fund,” Maslennikov said. On 7 November, Russian Foreign Minister Sergei Lavrov effectively confirmed that the world’s biggest emerging economies were ready to give financial assistance through the IMF, although he linked aid to promises of changes in the operating procedures at the Washington-based institution. The BRICS countries “are ready to take part in these combined efforts, including by issuing loans through the channels at the disposal of the IMF”, Lavrov said. “I think BRICS aid to the European Union is a distinct possibility”, said Andrei Mordavchenkov, director of financial markets operations with the Partner company. Help could come either through IMF credits or through purchase of bonds, he said. Not all analysts agree. Denis Barabanov, head of research with Grandis Capital, said, “I don’t think BRICS will take part in the eurozone rescue, for the simple reason that none of them, except China, are anxious to buy European countries’ bonds.”

Finance Savers have put the black days of the 1990s far behind them as the ruble has become respectable

Dollars and euros still make up the large majority of central bank foreign currency reserves, with gold playing a bigger role. vladimir kuzmin russia now

Russia’s central bank intends to switch some of its foreign currency reserves into Australian dollars, even as ordinary savers convert foreign holdings back into rubles. As the euro and US dollar weaken, are they losing their allure for Russians? Although Australia is far from being one of Russia’s strongest trading partners, the Australian dollar is to be included in the gold and currency reserves of the central Bank of Russia by the end of 2011, the bank’s deputy head Alexei Ulyukayev said in October. He also said Russia would be further increasing the proportion of gold in its reserves. The central bank began buying more gold at the beginning of the year, raising gold’s share in the total reserves by one percentage point to 8.5% on 1

October – a smart move, because the market value of Russian gold reserves has increased by 24% to €35 billion this year. The central bank still holds plenty of euros and dollars, however. Its €365 bn foreign reserve is made up of 47% dollars, followed by euros at 41% and British pounds at 9%. The yen and Canadian dollar – soon to be joined by the Australian dollar – round out the portfolio. The instability on the financial markets has resulted in a soaring interest in Russia in foreign currencies, at least in the short term. The stock of euro deposits leaped by 19% during one week in September. Bankers sayVIP clients in particular are attracted by the euro and that half of their foreign-currency deposits are in the European common currency. Speculation by private savers has led to an outflow of ruble deposits, although this has been less dramatic than some analysts predicted.The proportion of foreign currencies in private bank accounts stands at a mere 18%,

according to the Bank of Russia. Rather than go to the bank, when ordinary Muscovites need foreign currency they are as likely to visit one of the city’s many bureaux de change. Currency exchange offices mushroomed during the 1990s as the economy shrank and the ruble came under pressure, eventually forcing the state into a debt default and devaluation in 1998. Russians had lost faith in their own currency and were attempting to rescue their savings, initially favouring the Deutschmark, then the euro when the European common currency was introduced. It took a while before Russians made friends with the euro: many thought that the EU was expanding too quickly and was including countries with obviously ailing economies into its ranks. Against the backdrop of the current European debt problems, concerns over the stability of the European currency have received fresh impetus.When Russians see the US dollar also in diffi-

alamy/legion media

Russians find renewed faith in the ruble

Russia’s central bank has announced plans to begin buying Australian dollars.

culties, the natural reaction has been a renewed trust in the ruble. On 1 September, deposits in private bank accounts totalled 10.7 trillion rubles (€255 bn), and 82% of that was in the national currency. The ruble’s stability for the past several years largely explains savers’ faith in the currency. In addition, for borrowers, it is safer to take out loans in the same currency as the main source of income, as Hungarians and Latvians have learned to their sorrow. For Russians, this is still the ruble.

Bank of Russia currency reserves


Economy

Russia now www.rbth.ru 24 NOVEMBER 2011 section sponsored by rossiyskaya gazeta, russia

05

Industry Pre-election gift to GAZ

Automakers look to brighter future, with state help The Russian government moves to prop up the domestic auto industry as WTO accession takes a step closer to reality. Tai Adelaja

russia profile

dpa/vostock-photo

Taking time off from the festivities marking the country’s Day of National Unity on 4 November, Russia’s ruling tandem stopped by at the automaker GAZ Group in Nizhny Novgorod, bearing a generous gift. For thousands of GAZ auto workers and their families, the surprise gift, which turned out to be a credit line worth 38 billion rubles (€915 million), could not have come at a better time. Prior to their meeting with the workers, Russian President Dmitry Medvedev and Prime Minister Vladimir Putin toured the GAZ plant where the first Skoda Yeti models had just rolled off the line. “It’s customary to give gifts on holidays, and Dmitry Anatolyevich and I arrived with a gift,”Putin said. The line of credit from the stateowned VTB Bank would help create “conditions for a sustained, effective growth of your enterprise”,said the prime minister, who has been widely credited with spearheading the government-aided turnaround in the automobile industry. The Russian prime minister was not only making good on his oft-repeated promise to support the domestic auto industry by stimulating production and boosting sales. Russia’s auto sector employs over a million workers, itself a sizeable electoral constituency, not counting their dependants. For a government facing parliamentary elections in December, the generous gesture might not have been completely coincidental. Some analysts have described the government’s loan package as a pre-emptive move designed to guarantee the domestic auto industry a soft landing into the World Trade Organisation. Industry leaders have long suggested that Russian automakers would be

Top brass from the EU and Russia open the Nord Stream tap in Lubmin, Germany on 8 November.

New pipes, LNG ships broaden gas options Russia’s state-controlled gas distributor Gazprom is already supplying liquefied natural gas (LNG) to Japan and South Korea and is conducting talks to lay pipelines to those countries. Simultaneously, new pipes are being built to the west. The Russian parliament is in talks with members of the Asian Parliamentary Assembly to draft proposals for a single Asian energy market, State Duma Deputy Speaker Valery Yazev has said. The assembly includes politicians from major energy-importing countries. “Reconciling the interests of the world’s largest energy consumers such as China, India, Japan and South Korea with those of energy producers is not an easy task, since the latter want to sell at a high price, while the former want to buy cheap,”saidYazev, a former manager in the state gas industry. To find its way in this flurry of often opposing assessments and interests, Russia is rapidly creating new routes to deliver its gas. Nord Stream was the first major gas pipeline from Russia deeper into Europe since the collapse of the Soviet Union. Bypassing the traditional transit countries in northern Europe, including Belarus and Poland, the pipeline is designed to deliver western Siberian gas to the huge European market with a minimum of political risk. Next in line is the construction of South Stream under the Black Sea to Bulgaria and on to Austria. “Russia is currently extracting 650 billion cubic metres of gas per year, with gas reserves estimated to last for

more than a century. This will permit us to not only provide supplies to Europe, China, South Korea and Japan, but also to encourage socio-economic development in our country,” Yazev said in Murmansk recently.“By 2030, Europe will be consuming around 600 bn cubic metres of gas per year. This is our main market and we are perfectly aware of that. We have contracts running through the 2040s.” To honour all its contracts, Russia needs to supply gas in all directions while increasing production. The plan is to boost gas output to 1 trillion cubic metres per year by 2030. However, while Russia has a long history of selling gas to the West, the eastern market is still evolving. “Diversifying export energy markets and commodity structure is the major focus

line, with a capacity of 30 bn cubic metres, is to be provided by the Chayanda andYamal fields in western Siberia. A second pipeline with a capacity of 38 bn cubic metres will link China with fields in eastern Siberia and Sakhalin Island. Construction will begin as soon as the contractual gas price is settled, but the price is still up in the air. China is willing to pay a maximum of $250 per 1,000 cubic metres, while Gazprom wants at least $350. The most recent attempt to resolve the deadlock was made when Chinese President Hu Jintao met with Russian President Dmitry Medvedev on the sidelines of the St. Petersburg Economic Forum in June. The final decision was then postponed until the end of the year. On 5 August, Gazprom and South Korea’s Kogas ap-

“Russia has gas reserves estimated to last for more than a century.”

Russian and South Korea foresee a new gas pipeline across North Korea.

of Russia’s foreign economic activities. This will permit us to increase our share of hydrocarbon exports to eastern countries to between 10% and 13% by 2015,”Deputy Energy Minister AnatolyYanovsky said in an interview with the South Korean newspaper JoongAng Ilbo. Negotiations have been difficult. Gazprom and China National Petroleum Corporation inked a preliminary agreement on gas supply to China more than five years ago, in March 2006, for 68 bn cubic metres of gas after 2011. Deliveries are to be made along two routes. Gas for the first, western pipe-

proved an action plan for supplying pipeline gas. If everything goes according to the plan, a pipeline will be laid across North Korea to the southern republic. Gas from offshore fields in Sakhalin will be pumped through the recently built, 1,350-kilometre SakhalinKhabarovsk-Vladivostok pipeline. The first phase of the pipeline, with a capacity of 6 bn cubic metres, went into operation in September to meet the needs of the Vladivostok region. Later on, the pipeline’s capacity will be expanded to 30 bn cubic metres – enough to sell gas to both Koreas. For now, however, while

THE QUOTE

Valery Yazev

State Duma Deputy Speaker

"

We have come up with the concept of a single Asian energy market that will reflect the key principles of international energy co-operation. … Special emphasis will be placed on the principle of respecting state sovereignty with regard to natural resources and ensuring the safety of international energy transport."

pipeline contracts with large consumers in the Far East are still being worked out, Moscow has room to manoeuvre, experts say. “In terms of transport costs, it is very convenient to supply gas to Europe from western Siberia, and to south-east Asia from eastern Siberia,” said Dmitry Aleksandrov, head of the research department at the investment company Univer Capital. While the network of pipelines in Russia’s Far East is still under construction, there is no direct route for supplying gas from eastern Siberia to European Russia and the rest of Europe. This is where gas tankers can fill the gap. “Constructing gas liquefaction plants has been a top priority. Ten years ago, few people in Russia had heard of LNG, but now Sovcomflot, the state shipping company, already boasts eight LNG carriers with two more under construction. All of them ship gas from Sakhalin gas production facilities,”Broker Credit Service analyst Andrei Polishchuk said.

Originally published on RussiaProfile.org

ria novosti

continued from page 1

crushed by floods of imported cars when and if Russia joins the global trade body, because the high tariff walls that have protected the industry will have to come down. A recent agreement on cross-border trade with Georgia could open the way to WTO membership for Russia in 2012. But whatever the government motivation, the good news, analysts say, is that GAZ has retooled.The company has been turning to foreign partners lately for the know-how to help it gain market share and produce vehicles capable of competing with Western brands. GAZ Group teamed up with Volkswagen Group Rus in February to produce more than 100,000Volkswagen and Skoda cars annually at the GAZ factory in Nizhny Novgorod. US carmaker General Motors joined the queue in February, announcing plans to make 30,000 Chevrolets at GAZ’s plant to boost its local presence in the fastgrowing market. A year ago GAZ agreed with Daimler, the world’s biggest truck manufacturer, to assemble up to 60,000 Mercedes Sprinter vans in Russia. GAZ, primarily a maker of vans, trucks and busses, has also considered forming an alliance closer to home with its Belarusian counterpart MAZ or Ukrainian KRAZ to expand its sphere of sales and strengthen its domestic market share. GAZ Group CEO Bo Andersson said on 4 November that GAZ will roll out 105,000 various vehicle models this year. “This is 33% more than in 2010,” Andersson said. “An average worker’s salary has gone up 40% since last year.” The company hopes to rake in around 70 billion rubles from sales of its yet-to-beproduced models of lowfloor transit buses in 2012, as well as from the newgeneration light commercial vehicle GAZelle-Next, which could roll off the production line in 2013.

An assembly line at a GAZ plant in Nizhny Novgorod.


06

Opinion

24 November 2011 Russia now www.rbth.ru section sponsored by rossiyskaya gazeta, russia

hello, wto. farewell to 20 years in the wilderness Fyodor Lukyanov

political scientist

R

ussia may join the World Trade Organisation before this year ends, bringing to a close an 18-year accession process. The regular claim that “we will join the WTO by year’s end” had come to sound more and more like that famous Jewish pronouncement each Passover, “Next year in Jerusalem!” People stopped believing in it. But the process gathered speed this year, and the final obstacle was removed when the EU essentially forced Georgia to withdraw its objection to Russia’s entry. Myths about the WTO have sprung up over the years. Opponents in Russia warn that the economy will collapse as soon as protectionist barriers are lifted, while advocates act as if the WTO were a magic wand that will transform the economy and make long-planned reforms a reality. Neither argument is realistic. The fear of opening up to the world is rooted in the 1990s and early 2000s, when the Russian economy was very weak and could have been damaged by joining

the WTO. Overall, the greatest benefit of the drawn-out accession process is that Russia has negotiated the best possible compromise on the majority of issues. Since the late Soviet period, the Russian public has questioned the legitimacy of agreements made by its leaders. They still resent the decisions made by Mikhail Gorbachev and BorisYeltsin during the economic and political crises in the late 1980s and early 1990s, believing that these decisions were made in desperate circumstances and were contrary to Russia’s interests. Although mostly unfair, this is a widely held belief, which is why accelerated procedures make Russians suspicious.

Why not us?

Such fears have been smoothed over thanks to the lengthy accession negotiations. Some people will still be displeased and will claim that their interests have been compromised, but their numbers would have been much greater had Russia joined the organisation ten or even five years ago. On the other hand, miracles only happen in fairy tales and WTO membership

sergey yolkin

Despite the doubters, WTO membership most likely will be positive for Russia. will not replace the need for consistent efforts to improve the investment climate, modernise and diversify the economy, and do everything else we have been discussing but have not accomplished. Initially, the idea of WTO membership was purely political: Russia sought to join all the organisations of industrialized Western states. But that pro-Western euphoria of the 1990s gradually dissipated, giving way to considerations of prestige, especially after China joined in 2001: Why is everyone but Russia a member?

Vladimir Putin was the main driver behind Russia’s WTO bid during his first term as president. He urgently wanted Russia to join the last remaining important global club. But relations cooled when more and more demands were placed on Russia, dragging out a resolution. Moscow became disillusioned with its partners and came to believe that it didn’t need WTO membership that much, especially since Russians have never been enthusiastic about it. Almost no progress was made between late 2006 and 2010. Moreover, in 2009, Putin began a new push to bring the Eurasian customs union to reality. Many saw this as evidence of the Kremlin’s anger at the WTO. Russia hinted that it might prefer a regional alternative. For some time after the customs union project was

proposed, it was unclear if Russia would continue its WTO bid or not.

Victory over Georgia

Serious WTO accession negotiations resumed in late 2010, and it became clear in 2011 that the partners really wanted to come to terms. Georgia’s objection was the last obstacle to fall. Russia made it clear that it saw Georgia’s objections as political, not economic (which is true), and that if the partners wanted to see Russia in the WTO they must resolve the Georgian problem. Many criticised that attitude, but it has worked. When the Europeans decided that they would benefit from having Russia as a member, they told Georgia in no uncertain terms that it needed to accept a compromise. The West is interested in the Russian market, and foreign players would have more

tools to protect their interests and influence decisions in Moscow if Russia were in the WTO. The balance will most likely be positive for Russia, despite a divided attitude to WTO membership. It will help invigorate competition in Russia, while Russian businesses will gain access to new tools to protect their interests on foreign markets. In a way, it is symbolic that the WTO membership problem will be resolved almost exactly 20 years after the collapse of the Soviet Union. The post-Soviet period of overcoming the consequences of collapse is almost over, and the old agenda is no longer relevant. The country must move on. Fyodor Lukyanov is editorin-chief of Russia In Global Affairs. Originally published by RIA Novosti

russia’s left embraces Radical chic Konstantin von Eggert

O

journalist

ccupy Wall Street, Occupy London, Occupy Berlin … Will we see ‘Occupy Moscow’ next? The suggestion is not entirely implausible. Recently, I described the Occupy movement as yet another reincarnation of the Marxist-anarchist-anti-globalist circus, as vacuous and pretentious as its previous versions. This aroused intense criticism of me in the Russian blogosphere by people who could well be called the Russian New Left. Just 10 years ago, people like this could have squeezed into a telephone booth. People like the neo-Marxist professor Alexander Buzgalin appeared regularly on the BBC Russian Service or the Ekho Moskvy radio sta-

tion, but were rather an amusing oddity. These days, intellectuals modelling themselves on Noam Chomsky in the United States and the Guardian crowd in Britain are an increasingly vocal and visible group on the web and among political activists. They are among those who take to the streets in protest against the abuse of the environment (like the popular movement to protect the Khimki forest near Moscow) or the political regime in Russia (Eduard Limonov’s Other Russia party is at the forefront here). Their views are a somewhat strange conflation of anti-capitalist and libertarian slogans. Thus Limonov’s people, who only a decade ago made themselves famous by chanting “Stalin! Beria! Gulag!” at their National Bolshevik rallies, now say they stand for democracy, freedom of

speech and government accountability. Russia’s New Left is not an entirely original product. It claims to take its spirit from the 1968 protest movement in America and Europe, disregarding the fact that conditions in Russia today are vastly different from what they were in the West nearly half a century ago. Russian intellectuals’ newly found love for Che Guevara and the like is more of a reaction to the developments of the last 10 years, a way of saying “no” to the political regime created by Vladimir Putin. The Kremlin-inspired brand of unbridled greed and near-deification of material success in combination with authoritarian politics has come to symbolise capitalism as such to increasing numbers of Russian intellectuals. Our New Left is anti-capitalist, anti-clerical

(although not uniformly atheist yet), mostly pacifist, supports gay rights and Women’s Lib, but is otherwise confused about all other aspects of politics and economics. In a recent debate on the

Russia’s New Left spouts a strange mix of anti-capitalist and libertarian slogans. Kultura TV channel I appeared opposite Boris Kupriyanov, one of the founders of the popular Moscow radical bookshop, Falanster. A mild-mannered 40-yearold self-professed Orthodox Christian, Kupriyanov is one of the most articulate gurus to a generally much younger mass of Russia’s

New Left fans. In the studio Kupriyanov defended this summer’s London rioters as victims of intolerable social conditions rather than products of the British welfare system gone mad and claimed that modern capitalism inevitably breeds authoritarianism and the likes of Norwegian mass killer Anders Behring Breivik. Although none of Russia’s New Left proponents is an original thinker (in the sense that Chomsky or Marcuse are), they are definitely becoming a part of a global left-wing intellectual movement. They are small in numbers and lack political representation, but are quite determined in their goal of ridding Russia of the Putin regime and its ruling class of the last 20 years. The left’s main competitors are increasingly vocal nationalists who are far more

numerous but lack ideological coherence. While the governmentsponsored loyal opposition parties are becoming more and more discredited, demand for voices from the fringe grows. Russia’s New Left is well positioned to offer an alternative to stale and corrupt Russian reality. Its small numbers should deceive no one. With their mix of social demagoguery and anti-authoritarian rhetoric they can capture a significant audience if given a chance.Those of us who still think capitalism and personal responsibility count for something in Russia should take notice. Konstantin von Eggert is a former editor-in-chief of the BBC Russian Service Moscow bureau. Originally published by RIA Novosti


Comment

Russia now www.rbth.ru 24 NOVEMBER 2011 section sponsored by rossiyskaya gazeta, russia

07

inside view russia goes to the polls Liberal? Nationalist? Communists or Right Cause? The elections to the State Duma on 4 December are almost certain to

be dominated by the ruling United Russia party. They will set the stage for the presidential election early next year. The political parties are

banging their drums and making promises, but the view is taking root that in Russia, policy-making has been replaced by a thirst for power.

an exercise in power politics Vladimir Ruvinsky

Y

russia now

ou might think a party calling itself the Liberal Democratic Party of Russia would be a bastion of the values its name honours. But in Russia, the LDPR is a self-styled party of“statists”.In their view the state is the chief spokesman for the interests of citizens and civil society. The leader of the “liberals”, Vladimir Zhirinovsky, said recently that his party would propose a law to be titled “On State Support for the Russian People”. And what of the Communists – do they stand for protecting the interests of ordinary people and working for a classless, atheist society? Nowadays members of the Russian Communist Party actively engage in business and support the Orthodox Church. Political parties in Russia rarely reflect the values enshrined in their names. Right Cause supposedly unites pro-business liberals. But its manifesto focuses on social protection and anti-clericalism. The lack of a clear ideology is often compensated for by colourful personalities at the top. United Rus-

United Russia  Leaders: VLADIMIR PUTIN, Dmitry Medvedev Membership: 2,009,937  Regional branches: 83

sia, under its de-facto head Prime Minister Vladimir Putin, the former and possibly future president, claims to be a centrist party. What the media tend to call the “party of power” is the ruling party, but not in the sense that it wins elections. The party has power not because it wins elections; rather, it wins elections because it has power. And it

‘Liberal’, ‘democrat’, and even ‘communist’ are mere labels in Russian politics. truly is powerful; the party gathers nearly the country’s entire ruling elite. Seventy of the country’s 85 governors are members of United Russia, as are a large number of ministers and key government officials. Political experts sometimes say United Russia is a party without an ideology, one that promotes any slogan the authorities put forward. Observers of the Russian political system often comment on the lack of a real opposition. In the decade since United Russia was

formed, the other parliamentary parties have learned obedience.“This is first of all because real politics is concentrated in the hands of United Russia, which does not tolerate competition. Second, there was no public demand for an independent party. Instead, the public mentality demanded strong figures, party leaders,” says Alexei Mukhin, head of the Centre for Political Information. Legislative barriers to the creation of political parties, meanwhile, have grown ever higher; the threshold for election to the Duma has been raised to 7% of the vote – although it will drop back to 5% after the upcoming elections – and procedures for registering parties have been made more elaborate. The minimum turnout threshold has been abolished, as have the “against all”field on ballot papers and direct election of governors and members of the upper house of parliament, the Federation Council – all at the expense of political unpredictability. Formally, seven parties will be vying for seats in the Duma in the December elections, four of which are currently represented in

parliament: United Russia, the Liberal Democrats, the Communists and A Just Russia. Polls indicate United Russia winning by a landslide, followed by the Communist Party and the LDPR.

Know your place

The evolution of A Just Russia illustrates the power relationships among political parties, political analyst Alexei Chesnakov says. According to him the party was created by the presidential administration in 2006, during the Putin presidency, as a “niche group” in response to public demand for a party committed to environmental issues. When party leader Sergei Mironov recently began an “independent game” he paid the price, losing his post as speaker of the Federation Council in May. The party has been losing support since Mironov’s ouster and will be lucky to clear the 7% threshold. Chesnakov argues that the battle of ideas, political competition and meaningful discussions have given way in recent years to a Duma in which everybody’s place has long since been confirmed. Surveys by the Levada Centre polling agency show

that nearly half of Russians are in favour of maintaining the political status quo and the other half is thirsting for change. The status quo is that political campaigns are built not around ideology, but around the confrontation between the “party of power” and everyone else. But now the stakes are higher than ever before. The term for depu-

The ruling party is watching the opinion polls with a new sense of unease. ties in the State Duma has been increased to five years, while the presidential term (starting from 2012) has been increased to six years. Putin and his team, therefore, could stay in power for another 12 years.

Stumping for the ‘Russian’ vote

United Russia has the highest ratings of any party: 35% to 40%, according to recent polls. But its ratings are falling, and there are questions about turnout in December. It is critical for the party that turnout ex-

ceeds 50%, as this will allow it to claim a popular mandate. In the last elections, in 2007, the ruling party won 64% of the vote and more than 60% of the electorate took part. Political analyst Mukhin argues that issues of social justice and national identity are uppermost in the public’s mind. Social issues have been the domain of A Just Russia, he says, but United Russia has begun actively to use social slogans. The Liberal Democrats, Communists, and Right Cause are all seeking nationalist support: the LDPR wants legal protections for “Russians”, the Communists advocate “Russian socialism” and even members of Right Cause are against immigration from the Caucasus. And six months ago Putin – in order to improve the rating of his ruling party – created the All-Russia People’s Front, a social movement where civil society groups can hobnob with party faithful. Non-party members of the front can run for seats in the Duma on United Russia party lists. Vladimir Ruvinsky covers politics for Russia Now.

Yabloko

Liberal Democratic Party of russia (LDPR)

Leader: Grigory Yavlinsky Membership: 54,911 Regional branches: 75

Leader: Vladimir Zhirinovsky Membership  185,573 Regional branches: 83

A Just Russia

  Leader: Sergei Mironov Membership: 414,558                           Regional branches: 82

Patriots of Russia

Communist Party of the Russian Federation (CPRF)

Leader: Gennady Semigin Membership: 86,394                          Regional branches: 79

Leader: Gennady Zyuganov Membership: 154,244 Regional branches: 81

Right Cause Leader : ANDREI DUNAYEV Membership:  64,022                             Regional branches: 77

dmitry divin

Letters from readers, guest columns and cartoons labelled “Comment” or “Viewpoint” or appearing on the “Opinion” and “comment” pages of this supplement are selected to represent a broad range of views and do not necessarily represent those of the editors of Russia Now or Rossiyskaya Gazeta. Please send letters to the editor to ev@rbth.ru

This eight-page pull-out is produced and published by Rossiyskaya Gazeta (Russia), which takes sole responsibility for the contents. Internet address www.rbth.ru Email EV@rbth.ru Tel. +7 (495) 775 3114 fax +44 20 3070 0020 ADDRESS 24 Pravdy STR., bldg. 4, Floor 12, Moscow, Russia, 125 993. evgeny abov Editor & publisher alexey knelz editor Ky Krauthamer subeditor Andrey zaitsev head of photo dept. milla domogatskaya head of pre-print dept. Irina Pavlova layout

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08

Features

RUSSIA NOW WWW.RBTH.RU 24 NOVEMBER 2011 SECTION SPONSORED BY ROSSIYSKAYA GAZETA, RUSSIA

Travel Are the stereotypes true, or is the city’s bad reputation nothing but a myth?

Getting the most out of Moscow, for less INNA LEONOVA RUSSIA NOW

As a tourist destination, Moscow has long been a victim of stereotypes, most dating from a time when few foreigners got a peek behind the Iron Curtain. Although today the Russian capital features more than its fair share of steeland-glass skyscrapers and major chain retailers, many

would-be tourists believe things about Moscow ranging from “the city is run by gangsters” to “the air is unsafe to breathe”. But Moscow expats and visitors take a different view. Their opinions vary, but there is a strong sense among them that the city is an epic place.

The expensive city

For many years, Moscow was at the top of the list of the world’s most expensive cities. And while many foreigners agree that Moscow is by no means cheap, the rankings are somewhat

misleading – especially if you know how to work the system. One good tip is to eat your main meal at lunchtime, when many restaurants feature a three-course business lunch for around 300 rubles (€7). It’s a good idea to save money on food, because hotels are by far the most expensive part of a trip to Moscow. A survey this autumn by hotel.info revealed that the average cost of a hotel room in the Russian capital is €140 per night. This makes Moscow hotels the second most expensive in the world after Oslo.

Dangers at every step

GOOD TO KNOW

Free call centre aids travellers

PHOTOXPRESS

At Moscow’s 24-hour call centre for visitors, operators speak both Russian and English and are ready to answer questions about sightseeing and public transport. They can also help in case of an emergency by calling the police or an embassy. Dial 8-800-220-00-01 or 8-800-220-00-02.

Is Moscow dangerous? One question potential travellers often have about Russia involves the crime rate. Stories of the “Wild East” of the 1990s were prominent in the Western press, and those stereotypes still loom large in the minds of many potential tourists. “I am sure it is like any big city. However, I do not feel unsafe at all. I was very cautious in the beginning. I had been warned about pickpockets, etc. So far, I

IN THEIR OWN WORDS

Lucie Pokorna

"

LORI/LEGION MEDIA

Moscow has difficulty attracting visitors. But you don’t need to break your budget to discover the charms of this world metropolis.

Lost? Don’t be afraid to ask for directions. Although reputed for brusqueness, Muscovites are happy to help.

i n a s w e l l ,” M a r g e n added.

have not been the victim of a crime. I do not know anyone personally who has been a victim,”said 31-yearold Tessy McKee, an English teacher from Louisiana who lives in Moscow. However, expats in Russia commonly express concerns about encounters with racists or nationalists, not without reason. “I routinely heard disparaging and insulting comments made about people from Africa, the Caucasus and China,”Californian Cole Margen said. “Most Russians I met were very loyal, friendly and generous. However, there are a few bad apples mixed

Getting around

What’s the best way to explore the city? Take the metro. Learning to get around like a Muscovite gives visitors a taste of local life while saving money. “The masses of people can be a bit intimidating if you get lost, but if you’re underground you can find your way. Above ground, the streets can be confusing,”said Elliott Estebo, 25, from Minneapolis, Minnesota. And at 28 rubles (67 cents) per ride, it’s cheap.

Housing is expensive. Transport and culture are rather cheap in comparison to western Europe.” 26, CZECH REPUBLIC

Sarah Kay

"

Moscow is no more dangerous than London. Advice is not to flash your cash and not to speak loudly in a foriegn language.” 22, SHEFFIELD, UK

Andrew Close

"

The stereotype is that Moscow is big, crowded, a city of business, and that people are always in a hurry. These are all true! However, it is possible to find quiet back streets to wander through.” 48, CHESTER, UK

Environment Soviet planners sacrificed the world’s fourth-largest lake to the thirsty cotton industry

The scientist who never gave up on the Aral Sea Nikolai Aladin was a lone researcher no one would fund. Yet his results aided the sea’s partial resurgence.

50 years of dying: A chronology of the Aral Sea

CHRISTOPHER PALA

CHRISTOPHER PALA

RUSSIA NOW

Nikolai Aladin approached the rusting hulk of the small ship. All around, the dry former bottom of the Aral Sea stretched to the horizon. “I went on 25 expeditions on this ship,” Aladin remarked in his stentorian voice on an expedition to the sea last month. Aladin, a professor at the Zoological Institute of the Russian Academy of Sciences in St. Petersburg, can take indirect credit for the recent rescue of the northern, Kazakh part of the sea which has turned the Aral from a symbol of catastrophic environmental management to one of model rehabilitation. The Aral, once the world’s fourth-largest lake, is fed by central Asia’s two great west-flowing rivers, the Syr Darya and Amu Darya. Until the 1960s, it produced 50,000 tonnes of fish a year. But in the 1960s, the Soviet authorities began to di-

Nikolai Aladin in front of the hulk of an old research ship.

In 1960, the Aral Sea covered 68,000 square kilometres. Its fisheries employed 60,000 people. The Syr Darya and Amu Darya rivers replenished the sea and supplied irrigation water to cultivate 5 million hectares of cot-

ton fields. In 1960 Moscow’s policy changed when it calculated that cotton could potentially be 100 times as valuable as fish. More and more river water was diverted to irrigation. By 1987 the sea was one-third its previ-

ous size. The area planted in cotton had doubled, the lake’s salinity had tripled, and the fish had virtually disappeared. The sea split into separate brine lakes. Now, the northern Aral has been brought back to life.

vert water from the two rivers to produce cotton, knowing the sea would die. When Aladin first visited the town of Aralsk, in 1978, “the port was dry and the sea was more than 30 kilometres away”,he said. When he reached the sea, he found

that its salinity had doubled to 2% in less than two decades. But back at the academy, his findings were met with evasive replies. While the decision to sacrifice fish for cotton was not secret, the authorities discouraged any examination of its appall-

ing environmental consequences. All that changed with Mikhail Gorbachev’s policy of glasnost. Aladin’s research was published and the effects of the cottonfirst policy on the health of the Kazakhs and Uzbeks living on the shores of the

s e a w e r e w i d e ly d e scribed. In 1993, Aladin encouraged a local Kazakh governor to build a crude dike that kept the water from the Syr Darya in the northern part of the Aral. Salinity dropped and some fish returned.TheWorld Bank eventually funded the construction of a proper, 12-kilometre earthen dike and concrete sluice. Since 2005, when the dike was finished, the fish biomass in the Kazakh part of the sea has jumped from 3,500 tonnes to 18,000 tonnes, local fisheries director ZaualkhanYermakhanov said. Fishermen are hauling in 6,000 tonnes a year using only crude gill nets.

“The first dam was experimental,” Aladin said. “We wanted to prove that disasters made by the hand of man could be repaired by the hand of man. I am very proud they have built it properly now.” Today, the government of Kazakhstan is considering two new rehabilitation schemes, with Aladin’s support. In the first, the dike would be raised to allow the water to rise another six metres, expanding the northern Aral to 8,000 square kilometres.The other plan foresees digging a canal to divert Syr Darya water to bring the sea back to Aralsk, returning the town to its role as a port.


Russia Now #11 EV