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Putin's 'pivot to Asia' Russia turns to Asia as historic agreement with China is signed P3

Mayakovsky Russia's revolutionary poet is remembered P 15

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This supplement is sponsored by Rossiyskaya Gazeta, which takes sole responsibility for its contents and is wholly independent of Fairfax Media. The supplement did not involve Fairfax Media editorial staff in its production.

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Thursday, June 12, 2014

Distributed with The Age. Other distribution partners include: The New York Times, The Daily Telegraph, Le Figaro, La Repubblica, El Pais, Mainichi Shimbun, Gulf News.

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wishes all ing in ss Ru ians liv happy a lia Austra . Russia Day

World beaters ... in sambo and bandy THE SURPRISING SPORTS WHERE RUSSIANS ARE AT THE TOP OF THEIR GAME

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TWO-THIRDS OF RUSSIAN INVESTORS ARE READY TO INVEST IN BRICS MARKETS rbth.com/37091

History 'It pains me to write this'

Opposition Putin's stance on Crimea and Ukraine has bolstered his support

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A protest in Moscow during the peak of popularity of Russia's opposition movement in 2011-12.

Russia’s opposition movement, which was gaining momentum, has become marginalised as public support for Putin’s stance on Ukraine has grown. DANILA ROZANOV SPECIAL TO RBTH

In May 2012, large crowds gathered in downtown Moscow for the “March of Millions”protest against Russian President Vladimir Putin on the eve of his inauguration for his third term as president. The march ended up as a violent confrontation between protesters and police. But today, two years after one of the most significant public protests in modern Russian history, Putin’s approval rating is rising. It hit 83 per cent in the wake of Russia’s reunification with Crimea. It has been said by commentators that the March of Millions appeared to be a high-water mark for Russia’s opposition movement following its most active period, in 2011-12. According to sociologist Lev Gudkov,“by winter this year [2014], willingness to support or participate in protests had sunk to its lowest ebb since the collapse of the Soviet Union”. In an OpEd in The Moscow Times, opposition politician Vladimir Ryzhkov

ON UKRAINE: rbth.com/ukraine

wrote that the standoff over Ukraine has helped rally support for Putin. Events surrounding Crimea had a“powerful mobilising effect” and served to strengthen the position of the Kremlin at a time when economic growth has stopped. A legal process unprecedented in post-Soviet Russia, dubbed“the Bolotnaya Case”, was initiated after the March of Millions.

ing a lemon into the crowd. On 24 February, this year, six defendants in the case were sentenced to between twoand-a-half and four years in prison. In the summer of 2013, blogger-turned-opposition activist Alexey Navalny, who came to prominence after publishing anti-corruption investigations online, was charged with embezzlement and sentenced to five years

Events surrounding Crimea...served to strengthen the position of the Kremlin

A Russian anti-war rally, on March 15... attracted 50,000 people, according to rally organisers

Although an independent international commission that included Amnesty International and Human Rights Watch came to the conclusion that “the violence and disruption of order were largely caused by the actions of the authorities, and especially by the police,”only protest participants faced legal repercussions, with 27 people having charges pressed against them by the state. Twenty-three-year-oldYaroslav Belousov was sentenced to two-and-a-half years in prison, based solely on police testimonies and a video that showed him throw-

in prison. His sentence was then suspended after President Putin described the sentence as “strange”. At the time, the opposition figurehead was already a defendant in another court case in which a firm linked to Navalny and his brother was accused of defrauding the French cosmetics company Yves Rocher to the tune of 27 million roubles ($A830,000). Navalny is under house arrest and is not permitted to use the internet or telephone or communicate with anyone other than family members and attorneys. The fact that he was not taken into custo-

ITICISES RUSSIA CR ITIES TIV C A 'S NATO N IN EASTER EUROPE /37 169 rbth .co m

Solzhenitsyn on Ukraine: there will be many difficulties The writer and public figure Aleksandr Solzhenitsyn (19182008), who survived Soviet labour camps, predicted the current situation in Ukraine almost half a century ago. ROSSIYSKAYA GAZETA RG.RU

Even back in Soviet times, dissident author Aleksandr Solzhenitsyn predicted that Ukraine might attempt to break away from Russia. In his The Gulag Archipelago, which was written in 1968 and published in 1974, Solzhenitsyn wrote: “With Ukraine, things will get extremely painful.” In this extract from part 5, chapter two of The Gulag Archipelago, Solzhenitsyn’s thoughts on Ukraine are revisited. “… it pains me to write this as Ukraine and Russia are merged in my blood, in my heart, and in my thoughts, but considerable experience of friendly contacts with Ukrainians in the camps has shown me how much of a painful grudge they hold. Our generation will not escape from paying for the mistakes of our fathers. “To stamp one’s foot and shout: ‘This is mine!’ is the easiest option. It is far more difficult to say: ‘Those who want to live, live!’ Surprising as it may be, the Marxist teaching prediction that nationalism is fading has not come true. “On the contrary, in an age of nuclear research and cybernetics, it has for some reason flourished. And the time is coming for us, whether we like it or not, to repay all the promissory notes of self-determination and independence. Do it ourselves rather than wait to be burnt at the

stake, drowned in a river or beheaded. We must prove whether we are a great nation, not because of the vastness of our territory or the number of people in our care but because of the greatness of our deeds. “With Ukraine, things will get extremely painful. But one has to understand the degree of tension they [Ukrainians] feel. As it has been impossible for centuries to resolve it, it is now down to us to show good sense. We must hand over the decisionmaking to them: federalists or separatists, whichever of them wins. Not to give in would be mad and cruel. The more lenient, patient, coherent we are now, the more hope there will be to restore unity in future. Let them live it, let them test it. “They will soon understand that not all problems are resolved through separation. Since in different regions of Ukraine there is a different proportion of those who consider themselves Ukrainians, those who consider themselves Russians and those who consider themselves neither, there will be many difficulties there. Maybe it will be necessary to have a referendum in each region and then ensure preferential and delicate treatment of those who would want to leave. Not the whole of Ukraine in its current formal Soviet borders is indeed Ukraine. As for Crimea, Khrushchev's decision to hand it to Ukraine was totally arbitrary. And what about Carpathian (Red) Ruthenia? That will serve as a test too: while demanding justice for themselves, how just will the Ukrainians be to Carpathian Russians?”

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Kremlin's response to events in Ukraine weakens opposition

dy during the investigation is unusual in terms of Russian judicial practice. “In light of the Bolotnaya Case court rulings, the legal system’s leniency towards Navalny sets him apart from the protesters,” said Alexander Pozhalov, from the Institute of Socio-Economic and Political Studies. High-profile representatives of the opposition are downbeat about the movement’s future prospects. “The opposition is not doing so well right now,”said Boris Nemtsov, one of Russia’s best-known liberals. “A lot of our comrades are behind bars, some people are wanted by the authorities and some have emigrated.” “The opposition has ceased to exist as an organised political force, because there has been a separation of various political forces,” said leftleaning politician and Duma member Ilya Ponomaryov – who in 2012 was banned from speaking in the Duma for a month after he called Putin's party, United Russia, a“party of swindlers and thieves,”echoing Navalny's words. The Russian Opposition Coordination Council, established by representatives of various opposition groups in October 2012, fell apart just a year after its creation, as its members were so divided. According to sociologist Gudkov,“the ideas put forth by the opposition – honest elections, anti-corruption and electoral reforms – were supported by about half the population at first.” But he said that the numbers dropped off as the Kremlin launched a propaganda campaign that included catch-cries such as“the hand of the West” and “foreign agents”. “These Kremlin accusations neutralised the slogans put forth by the opposition,” he said. “At some point, the public started listening to the Kremlin and public opinion gravitated toward the authorities. The situation is slightly different in Moscow, where the number of protest activities has always been higher. A Russian anti-war rally on March 15, which opposed Russian military intervention in Ukraine, attracted 50,000 people, according to the organisers. “A fairly large group of people who always take part in demonstrations has recently sprung up,”Ilya Ponomaryov said.“When it all started, there were only about 500 of them in Moscow. “Now there are about 20,000.”

Solzhenitsyn: foresight came from experience in the camps.

EST: THE PRESS DIG UKRAINE’S F O N R RETU RIES'; 'MERCENA O’S BUDGET NK POROSHE 70 8 1 /3 rbth .co m

NEXT WHY THE L BE IL W E MOV R DECISIVE FO UKRAINE /370 5 5 rbth .co m


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POROSHENKO VOWS TO TAKE RUSSIA TO COURT rbth.com/37003

Energy Shanghai agreement will help Russia to reduce its dependence on European customers

IN BRIEF

Gas deal seals closer links to China

New Amnesty report slams Putin's Russia

SPECIAL TO RBTH

Russian President Vladimir Putin has outdone US President Barack Obama’s“pivot to Asia” as the signing of a recent agreement between Russia and China marks a new era of cooperation and collaboration in a range of areas, but particularly in energy supplies. Negotiations around the issues covered in the agreement started as far back as 2004, when discussions about Russia supplying China with gas began. While common goals were reached around this some time ago, the stumbling block to closing the deal was the price. Putin, who witnessed the historic signing of the deal in Shanghai, said the Chinese had been tough negotiators. Konstantin Simonov, director of the National Energy Security Fund (NESF), said China understood the political importance of the gas contract to Russia and was haggling hard. Russia wanted to prove to its Western partners that it

3

NEW DEALS FOR RUSSIA WITH CHINA

The new agreement marks Russia's own pivot to Asia.

The Chinese car manufacturer Great Wall Motors will build a plant in the Russian region of Tula, south of Moscow. The plant will produce 150,000 fourwheel-drive vehicles a year.

A joint venture between Russian and Chinese petrochemical companies will build a chemical plant based on Russian technologies at Shanghai's Chemical Industry Park.

New transport links across the Russia-China border will be built to reduce travel routes and times. One of these links will be a new road and railway bridge across the Amur River.

and the West have sparred over Ukraine.” The Chinese national petrol and gas company CNPC denied that it tried to take advantage of Russia’s difficulties with the EU to bring down the price of Russian gas, and said it had named its price long before recent sanctions against Russia. But the timing of the deal has added to its significance. It may well be a game-changer in the history of the Russian/Soviet gas industry being focused on Europe. More than a trillion cubic metres of Russian gas worth $400 billion will flow in the opposite direction over the next 30 years. On the news of the deal, Gazprom shares rose nearly 2 per cent. The agreed price was not disclosed, but is believed to be on a par with what Western Europe pays. Because of underdeveloped pipeline infrastructure in Siberia, there will be extra costs for building supply lines. The two countries will need to invest about $75 billion in building this infrastructure. Some commentators have said it is a high price to pay for the diversification of Russia’s gas exports, while others have said it is a perfect development opportunity for a neglected part of Russia.

Economy Russia, Kazakhstan and Belarus commit to common markets and more co-operation

The Eurasian Economic Union, which will come into existence in January 2015, will bring three former Soviet republics greater levels of economic integration. OLGA SAMOFALOVA VZGLYAD.RU

At a ceremony in Astana, Kazakhstan on May 29, the Russian PresidentVladimir Putin, Kazakh President Nursultan Nazarbayev and Belarussian President Alexander Lukashenko signed an agreement to set up the Eurasian Economic Union (EaEU), which will start operating from January 1, 2015. While the union has been welcomed by many econom-

ON CHINA: rbth.com/China

ic analysts in Russia, some commentators have warned against the potential risks associated with hastily establishing a single energy market. According to Putin, the agreement takes the three countries to a new level of integration.“While fully preserving our state sovereignty, we will ensure closer and better coordinated economic cooperation,” he said. However, Aleksandr Knobel, head of the international trade laboratory at the Gaidar Institute, said that the EaEU agreement does not create anything new from an economic point of view. Everything that this docu-

KONSTANTIN ZAVRAZHIN / RG

Eurasian nations agree to form new economic union

The EaEU will eventually have a single energy market.

The creation of common markets means the harmonisation of rules and tariffs

ES PUTIN GO A IN H C TO /36973 rbth .co m

ment describes has been envisaged within the other associations which already unite the three countries, he said, which is why, in the short term, the union is not likely to result in trade increases between the countries. For example, trade between these countries has been duty-free since 1992, Knobel pointed out. But in part four of the agreement, the new union creates a basis for finding further compromises and removing some remaining restrictions. The three states undertake obligations to guarantee the free movement of goods, services, capital and labour. Members of the union will also pursue co-ordinated policies in the sectors of energy, industrial production, agriculture and transport. Part four of the document sets out further agreements

INA: RUSSIA-CH ARDS W TO E A MOV HIP PARTNERS 69 4 5 /3 rbth .co m

on the commodities and financial markets and relevant timeframes, Knobel said. For example, by 2025 a common financial mega-regulator will be created and the signatories to the agreement will arrive at common macro-economic, anti-monopoly and financial policies. And within the next 11 years, member states plan to have set up a common oil and gas market. By 2019, Russia, Kazakhstan and Belarus intend to create a common electricity market, while a single pharmaceutical market is due to start operating from January 1, 2016. The creation of common markets in different sectors will not only mean the free movement of goods inside the EaEU, but also the harmonisation of rules and tariffs in these countries’ markets, which it is hoped will have economic benefits for member states.

Amnesty International has released a report that condemns recent changes to Russian law, which it describes as“a clampdown on government critics and dissenting voices”. It also says: “...respect for the rights to freedom of expression, peaceful assembly and association has long been tenuous in Russia. In the two years since Putin’s inauguration for a third term... however, these have come under a sustained assault.”

Moscow bows out of PACE In a clear statement of its position, Moscow has officially informed the Parliamentary Assembly of the Council of Europe (PACE) about its decision to halt bilateral co-operation. Officials at PACE have been told that Russian delegates will skip this year’s summer session, according to the head of Russia’s PACE delegation. “The Russian delegation will not take part in the June session of the Parliamentary Assembly of the Council of Europe,” said Alexey Pushkov, who chairs the State Duma’s Foreign Affairs Committee.“We have suspended our co-operation with the assembly until they lift sanctions from our delegation.”

New president for Ukraine The Ukrainian Central Election Commission announced on June 2 that the billionaire businessman Petro Poroshenko, an independent, was elected president in Ukraine’s recent presidential elections, held on May 25. According to a commission report, Poroshenko won 54.7 per cent of the vote, while former p r i m e m i n i s t e r Yu l i a Timoshenko gained 12.8 per cent.

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NIKOLAI GORSHKOV

has alternative markets for gas, but China was equally interested in sealing a deal because it needs gas for its eastern industrial regions that have not been able to get their gas needs met by Central Asia. Aware of the growing environmental and health costs of using cheap local coal, China is switching to cleaner gas to fire its industries and, in doing so, is poised to become the largest gas consumer in the world. “Both countries’ interests have aligned in recent years,” says US-based global security think-tank Stratfor.“For China, the cost of importing liquefied natural gas is high, and its energy demands continue to grow. “For Russia, the stability of demand from Europe – where Russia sends more than 80 per cent of its natural gas exports – has been a growing concern, especially as Russia

PHOTOSHOT/VOSTOCK-PHOTO

AFP/EASTNEWS

Moscow has signed a 30-year, $400 billion deal to supply gas to China – an agreement which is a major step forward in the diversification of Russian gas exports.

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Bureaucracy Government employees' low pay is balanced by a wide range of benefits

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Perks prop up public service

Workers at Ford plant defend their rights PRESS PHOTO

High-ranking Russians officials get access to state dachas (country houses).

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Despite the fact that politicians and bureaucrats in Russia are not as well paid as their counterparts in the West, they get their share of perks. ALEXEY ANDREYEV RBTH

GOVERNMENT

Fighting corruption in Russia Since mediaeval times, corruption has been a part of Russia's governing system. The third presidential term of Russian President Vladimir Putin has been marked by an unprecedented war on corrupt officials, in both the central governing apparatus and in the

Vladimir Putin’s tax return

Curiously, Russian President Vladimir Putin’s 2013 tax return did not contain any information about his former spouse Lyudmila – the divorce was finalised last year. Putin's declaration also did not include details about the income and assets of his two adult daughters (Maria, 28, and Katerina, 27) even though Russian bureaucrats are required to

For each grumpy Russian waiter,

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regions. The movement in this direction began in 2006, during Putin’s second term, when Moscow ratified the UN Convention Against Corruption and was obliged to employ effective measures to fight corruption. Read more at: http://rbth.com/28099

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According to official figures, at the end of 2013, Russian President Vladimir Putin’s salary was a few times lower than US President Barrack Obama’s. Putin earned 3.672 million roubles ($A112,000) a year and Prime Minister Dmitry Medvedev 4.259 million roubles ($130,500). In comparison, Obama’s income for the same period was $516,000 and Vice-President Joe Biden’s was $437,000. European leaders also earned more than Putin and Medvedev. German Chancellor Angela Merkel’s yearly income was €280,0 0 0 ($410,000) and French President Francois Hollande’s €180,000. Public servants in Russia on the whole earn a lot less than their colleagues in other countries; however, they receive benefits and privileges ranging from housing, education and health perks to places to take holidays. High-ranking officials can use government vehicles, dachas (country houses) and a special postal service. Lower-ranking officials also receive benefits. Officials have the right to subsidised housing or to the privatisation of a state-owned apartment (al-

though they can only claim this once in their career). This is how the mayor of Moscow, Sergei Sobyanin, became the owner of a 308-square-metre apartment in the centre of Moscow. Free education is also considered an important benefit: Russian bureaucrats are entitled to take a second degree at a Russian institution without paying any fees and while earning their regular salary. They are entitled to take study leave or to study by correspondence, while continuing to do their job. As well, civil servants can use specialised health clinics and resorts. With a recession in the private sector, the public service is becoming a more attractive employment option in Russia. According to data from the Independent Institute for Social Policy, the portion of the population engaged in public service as part of the middle class continues to grow. In 2013, public sector employees formed 20 per cent of the Russian middle class, which is one-third more than it did in 2007. After the collapse of the Soviet Union, the number of government officials in Russia grew substantially, by about three times, says Aleksandr Dorofeev, general director of the consulting company Arkaim. To precisely compare the number of public servants in Soviet and post-Soviet times

For each bottle of vodka,

For each of you,

declare information about family members, including children. According to the president's declaration, he earned 3.672 million roubles ($A112,000) last year, and his key assets included two large apartments, two collector cars – the Volga brands GAZ M21 and GAZ M21-R (the M21 is pictured) – a NIVA car and a Skiff (Scythian) car trailer.

is difficult because the political structures are so different. Today, however, it is possible to single out three levels of officials: civil servants in federal executive agencies, employees of the subjects of the Russian Federation, and municipal employees, according to Ruslan Korchagin, director of the Public Management Scientific Research Centre at the International Institute of Public Administration and Management inthe Russian Presidential Academy of National Economy and Public Administration (RANEPA). In recent years, there were an average of 4.5 civil servants for every 1000 people in Russia, while in the US there are 6.5. According to Andrei Klimenko’s data, Russia does not have enough bureaucrats for its population. According to OSCE data, the total number of employees of the central government in Russia is more than 600,000. In comparison, there are 420,000 public servants in Great Britain, 260,000 in Canada, 620,000 in Portugal, 1.8 million in Turkey and 2 million in the US. According to the Russian State Statistics Service, if all federal, regional, and municipal employees are included, then the total number of executive branch employees in Russia is about 1.3 million. Whatever the exact number, according to Maksim Klyagin, analyst for the management company Finam Management, considering Russia's population, the overall number of government officials in Russia is at least two times less than the comparable numbers in most developed countries. Attracting skilled staff to Russia's public service would be likely to require a policy that monetised the existing benefits. “We have repeatedly proposed monetising the greater part of the benefits with the goal of increasing the effectiveness of budgetary expenditures,”said Andrei Klimenko, director of the Institute of Public Administration and Municipal Management at the National Research University — Higher School of Economics. According to Klimenko, for the Russian public service to attract the country's best young professionals, pay rates will need to be raised to match private-sector levels.

Russia's trade union movement might be young, but it is growing in strength and numbers. Earlier this year, when the Ford Sollers car manufacturing plant northeast of St Petersburg offered its workers a controversial severance package in the event that production at the factory dropped, the plant’s workers protested loudly and visibly. Their coordinated and confident response suggests that workers in Russia know something about their rights at work, and are increasingly not afraid to defend them. Read more at rbth.com/36369

Schools develop music and art There are more than 5000 music and art schools for children in Russia. At these schools, students can learn musical instruments and how to master the basics of painting or sculpture, in addition to their regular education. This kind of specialised education, from Soviet times, is helping to foster children’s creative skills from an early age. Read more at rbth.com/37079

Interest grows for languages The more globalised Russia’s economy becomes, the greater the demand for foreign languages. Traditionally in Russia, students of foreign languages studied at universities and public schools, but many are now turning to the private sector, preferring a different style of teaching and learning from native speakers. RBTH interviewed several foreign-language teachers living in Moscow to find out what the language skills of Muscovites are like. Read more at rbth.com/36857

there is a smiling babushka serving pelmeni

there is a glass of kvas

there is a Russia of your choice oice ice ic


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Fashion Designers in Russia are leading the way in creating lines to meet the needs of people with disabilities

New clothing collections indicate new attitudes INNA FEDOROVA RBTH

The creation of these new collections in Russia, which include everyday wear, children’s apparel and formal wear, shows that people with disabilities in Russia are far more visible than they were during Soviet times. During the Soviet period, if someone had a disability, they were usually put in an institution or were housebound. Today, however, there are greater opportunities for people with disabilities in Russia, in regard to mobility, accessing services and employment. These improvements are largely due to the advocacy work of NGOs.

Oksana Liventsova, a designer who has created a clothing collection for people with cerebral palsy, said that there was a real demand for clothing designed especially for people with disabilities, and that more designers are interested in getting into this growing market. She noted, however, that designers should be sensitive to the needs of their clients. “What’s important is finding a balance between catering to special needs and keeping prices reasonable,” Liventsova said.

Fashion and job creation

ITAR-TASS

A number of Russian fashion designers are now producing collections for people with disabilities – something that is indicative of a broader shift in attitudes about disabilities.

“To create industrial production-ready collections, we need entire experimental laboratories researching specialised techniques for fitting and various ways of using different stiffeners to support the spine and other parts of the body,” Liventsova said. “This requires an approach completely different to the normal one used when designing conventional clothes.”

Models showcasing innovative garments that look good and cater for those with special needs.

Urusova and the German founder of Without Borders, Tobias Reisner, helps professional fashion designers craft clothing for people whose physical challenges make it difficult for them to feel comfortable in regular clothing. The first Couture Without Borders international design competition took place in 2011 and involved about 60 designers. Two years later, 80 designers participated in the event. This year, the project got an important boost; the Couture Without Borders fashion show took place as part of Mercedes-Benz Russian Fashion Week.

Couture without borders Many of the designers creating collections for people with disabilities were encouraged to give the idea a try by the NGO Without Borders, which in 2010 introduced a project called Couture Without Borders. The project, launched by Russian entrepreneurYanina

And in Moscow’s Manezh exhibition hall, next to the Kremlin, designers Daria Razumikhina, Masha Sharoyeva, Sabina Gorelik, Oksana Liventsova, Dima Neu, Svetlana Sarycheva, Albina Bikbulatova, Christina Wolf and Miguel Carval showed their work. Razumikhina, whose collection featured striped sailor vests, brightly coloured cardigans and spectacular ornamental skirts made of thick fabric that does not get caught in the wheels of wheelchairs, said that all people want to look good. The designing duo of Dima Neu and Svetlana Sarycheva

showed a line of sportswear for people with prosthetic arms and legs. One special feature of this collection is a voluminous bag that — in addition to being a place to keep things — compensates for the absence of a symmetrical load on the spine because of the loss of a limb. Oksana Liventsova’s collection, called Odyssey, was created especially for people with cerebral palsy who have difficulties co-ordinating their movements. In her garments, some elements fit tightly and support the body, while others create volume. Her clothes also come with easy-to-use zip fasteners.

Another Russian organisation that adapts fashion for people with disabilities is Ortomoda, and this company also has a program for offering employment opportunities for people with disabilities. For example, one of its staff, Maxim Katush, is hearingimpaired. He works as Ortomoda’s website manager and occasionally as a model. Katush has not, however been to Special Fashion – a modelling school specifically for people with disabilities. The school held its first fashion show in the Siberian city of Tyumen in 2005. Today, in addition to training models, Special Fashion holds design contests for clothing adapted for people in wheelchairs and people who use walking aids. While these programs are small steps in the big picture of integrating people with disabilities into Russian society, Couture Without Borders is expecting to add even more designers in 2015.

Education Meeting people with disabilities in the classroom gives Russian schoolchildren new insights

Russian schools have been taking part in an education initiative for students to learn first-hand what it is like to live with different kinds of disabilities. ANNA FEFELOVA SPECIAL FOR RBTH

In Moscow, a three-day education program for children is being offered by the internationally funded NGO Perspektiva – the Regional Society of Disabled People. Perspektiva has different programs for different age groups, and this school year, 1800 Moscow students took part in the program. In a recent class, held in one of the city’s suburban primary schools, second graders (eight-year-olds) listened attentively as their guests

were being introduced. The guests, Alexander Zaykin, who is visually impaired, and Julia Kuleshova, a woman who has difficulties with her speech and hands, described to the children what it was like to live with a disability, and then gave them the opportunity to ask questions. One girl asked: “And what do you see with your eyes? Is everything black?” “No, on the contrary," Zaykin answered with a smile. “I see something bright, like a light fog. Have you seen Hedgehog in the Fog [a Soviet children’s animation]?” Zaykin showed the children his“talking phone”and how it worked. He explained that people with visual impairments can still read and

PRESS PHOTO

‘Lessons in kindness’ explore living with disabilities

In Moscow, 20 schools are involved in this disability education program, and similar initiatives have started in other regions.

One girl asked: "And what do you see with your eyes? Is everything black?"

write and use phones and computers. The children showed great interest when they were shown Braille, and a map that could be navigated by touch. In a country where it is not

uncommon for people with disabilities to be called “invalids”, the guests also explained how they preferred their disability to be described. When at the beginning of the lessons the children were unsure about whether people with disabilities could work, by the second lesson they were immersed in a game called “Find a Job”. In teams, they were given the task of making lists of professions suitable for people with particular disabilities. The first team, who were choosing jobs for someone who could not hear or speak, listed a racing car driver, an acrobat and a pilot. After the lessons, the children told RBTH that the lessons had taught them about

WHERE WOULD YOU LIVE IN RUSSIA? Have you ever wished you had been born in a different country? C h e c k o u t o u r Q U I Z : I f yo u h a d b e e n b o r n i n R u ss i a , w h e re wo u l d yo u b e l i v i n g? > > t rave l . r b t h .co m / 1 4 2 7

kindness, courtesy and helping each other. The classes, which are called “Lessons in kindness”, have been held in Moscow for a decade, and there are now more than 20 schools involved. The initiative is also being followed by partner organisations across Russia: in Buryatia,Voronezh Oblast, Kaliningrad Oblast, Khabarovsk Krai and the republics of Tatarstan, Chechnya and Dagestan. Perspektiva has been fighting for more than 15 years against negative stereotypes of disability and advocating for greater inclusion of people with disabilities in all aspects of society. Participation in the education program is free for schools and the educators and guests are paid by Perspektiva.


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Trade It was business as usual for the St Petersburg international economic meeting amid Ukraine tensions

Record numbers at forum despite sanctions Russia’s northern capital recently hosted Russia's largest economic forum, and despite US sanctions affecting the guest list, the event was productive. ALEXEY LOSSAN

The St Petersburg International Economic (SPIEF) forum is traditionally considered the largest international business event in Russia – an opportunity for CEOs of international companies to meet directly with Russian government representatives, including Russian President Vladimir Putin. However, this year, according to the New York Times, the US presidential administration advised American executives not to attend. “Corporations that were advised against attending the forum sent second-rank executives, so there were actually a lot of representatives from foreign partners,” said Ivan Fedotov, vice-rector of the Russian Presidential Academy of the National Economy and Public Administration (RANEPA). For example,Visa Inc. was represented by Kamran Siddiqi, its executive director for Central and Eastern Europe, the Middle East, and Africa; PepsiCo by the chief executive officer of PepsiCo Europe, Enderson Guimaraes; and ExxonMobil by Stephen Greenlee, the president of

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RBTH

The forum continued to be a key platform for establishing international relationships.

ExxonMobil Exploration Company and vice-president at Exxon Mobil. According to Investcafe analyst Timur Nigmatulin, in light of this one can hardly say that the event turned out to be any less significant than it had been in previous years. “SPIEF remains a key platform where public and private, Russian and foreign partners establish working relationships,” he said. Anton Soroko, an analyst from the financial services

company Finam, said:“Western attempts to boycott the forum and put pressure on domestic business to refrain from participating failed to have the desired effect.” According to Soroko, this year’s forum actually broke records in terms of numbers: a total of 6500 participants registered, of which 1500 were media representatives. More than 150 billion roubles ($A4.6 billion) worth of agreements were signed at the forum, although most of

them involved public companies. Agvan Mikaelyan, managing partner at ACG FinExpertiza, said that a key trend the forum highlighted was that Russia’s focus on state capitalism remained unchanged. “Attitudes towards foreign business remained exactly as been before,” he said, adding that if there had been restrictions on foreign companies as retaliation for events surrounding the Ukrainian cri-

sis, such restrictions will be loosened now. In addition, Mikaelyan argued that US sanctions and measures to put pressure on Russian business had been ineffective. To support his argument, he highlighted the number of agreements signed with Rosneft, in light of the fact that the head of Rosneft, Igor Sechin, is one of the Russian business people who were blacklisted by Washington, following the Ukrainian crisis. Sechin’s agreement with Mubadala Petroleum from the UAE involves jointly developing oil fields in Asia and south-east Africa. Moreover, the company signed an agreement on the collaborative exploration and development of oil fields, including offshore oil fields, with companies from Azerbaijan, Venezuela, India, and Cuba. According to a joint statement, Rosneft and ExxonMobil have completed geological explorations of the Black Sea. The costs for geological exploration projects totalled $3.4 billion, the majority of which was allocated for the project by ExxonMobil. Earlier, the two companies announced plans to jointly develop seven new subsoil areas in the Russian Arctic: the Chukchi, Laptev and Kara seas. Another key outcome of the forum was the fact that after negotiations with First Dep-

uty Prime Minister Igor Shuvalov and Minister of Finance Anton Siluanov, Visa and MasterCard decided to continue operations in Russia (see below). Before the event, the Visa and MasterCard systems had blocked cards issued by banks that were included in the US sanction list, which was a point of concern for the Russian authorities. “Accusations turned into a constructive dialogue, which sets the tone for an economically reasonable solution to the conflict,” Soroko said. The privatisation of state assets was another important issue, especially for telecommunications company Rostelecom, which will start privatising in the third quarter of 2014. “As the organisers had anticipated, the main event turned out to be the president’s speech, and the forum served as a platform to declare Russia’s position on gas, Ukraine and other important issues,” Fedotov said. Alexey Kozlov, UFS IC’s chief analyst, summed it up: “Considering the current state of affairs – the conflict in Ukraine, the confrontation between Russia and the West, the president’s visit to China, and the outcomes of this visit – the forum turned out to be a lot more significant than it had been in previous years, in spite of an incomplete list of participants.”

Finance Uncertainty around Ukraine sanctions prompts Kremlin to require security deposits from MasterCard and Visa

In line with new legislation in Russia, international payment systems need to place security deposits with Russia's Central Bank. ALEXEY SERGUEYEV RBTH

Under recently approved amendments to Russia’s law on the national payment system, international payment systems have to place security deposits on special accounts with the Russian Central Bank equal to the value of two days of transactions processed in Russia. According to calculations by investment bank Morgan Stanley, MasterCard will have to pay about $1 billion and Visa $2 billion. “The payment systems will also have to build processing centres in Russia and pay fines of up to 10 per cent of the funds held by the Central Bank in the event of a

unilateral denial of services,” the bank’s report said. This requirement was a response to the decision byVisa and MasterCard to stop processing transactions on credit cards issued by Russian banks connected to business people blacklisted by the US as part of sanctions against Russia over the Ukrainian crisis. (These business people, in the opinion of the White House, belong to Russian President Vladimir Putin’s inner circle.) In particular, the sanctions affected the bank Rossiya, owned by media tycoonYury Kovalchuk, and SMP Bank, controlled by Arkady Rotenberg. Without warning, MasterCard andVisa stopped servicing cards issued by the two banks, leaving card-holders who happened to be abroad at the time no way of accessing funds in their accounts. Under the new law, should

a similar situation happen again, the payment systems will face heavy fines: about $100 million for MasterCard and $200 million forVisa.“For this type of business, this is quite a significant amount,” says Finam Management analyst Anton Soroko. The payment systems have already expressed their dissatisfaction with the new rules. MasterCard has officially stated that“some of the provisions of the new law may not only create serious difficulties for our operations in Russia, but may also damage the Russian market of electronic payments over the long-term”. The new rules were adopted against the backdrop of political pressure on the companies. In a recent interview for Bloomberg, Russian Foreign Minister Sergey Lavrov said that Russia will be able to find a substitute for Visa

DPA/VOSTOCK-PHOTO

New laws put pressure on credit card companies

Visa and MasterCard risk losing the Russian market.

and MasterCard should they decide to leave the Russian market. “It’s all virtual money, virtual transactions,” he said. “Anything that is virtual, especially now, can be ‘replicated’ in Russia and in other countries. Many experts know how it works.”He added that Visa and MasterCard were already “losing the market”. Earlier, Putin hinted that because of the restrictions they had imposed on Russian banks, Visa and MasterCard

might lose their positions in the Russian market. However, according to Soroko, Russia does not have alternative suppliers of this type of services. For their part, he says,Visa and MasterCard cannot afford to lose a market that presents a long-term opportunity: card payments in Russia are just starting to pick up. According to the Russian Central Bank, in 2013, the number of card transactions for the first time ever exceed-

ed the number of cash withdrawals. In the first nine months of 2013, turnover on plastic cards in Russia amounted to just 1000 billion roubles ($31 million), while the overall amount of cash transactions reached about 8000 billion roubles. According to Investcafe analyst Mikhail Kuzmin, the amount of card payments for goods and services is growing by more than 40 per cent a year, with 90 per cent of the rise on Visa and MasterCard. For the international payment systems, an alternative solution would be to spin off their Russian business into separate entities registered in Russia. This way, they would be exempt from complying with US sanctions. Meanwhile, Russia’s Central Bank is considering options for creating a new payment system, one of which is based on technologies developed by Russia’s biggest retail bank, Sberbank. As VTB24 bank’s Mikhail Zadornov points out,“the creation of a fully-fledged system will require hundreds of millions, if not billions, of dollars”.


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STATE STEPS IN TO SAVE CRIMEA’S TOURIST INDUSTRY rbth.com/36789

Rebuilding Reduction in rates aimed at drawing foreign and domestic investment

Crimea offers tax breaks to business

C O N V E R T I N G M O N O LO G U E S I N TO D I A LO G U E S Russia Direct is a forum for experts and senior decision-makers from around the world to discuss, debate and better understand the current issues dominating global geopolitical debates.

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To attract foreign and domestic investment into Crimea, the Russian government has established a record low value-added tax (VAT) rate for the region. ALEXEY LOSSAN RBTH

Since the beginning of May, the Crimea State Council established new rates for value-added tax: 4 per cent for regular commodities and 2 per cent for socially important commodities, including foodstuffs, children’s products and pharmaceuticals. In comparison, the NDS (Russia’s equivalent of GST) is 18 per cent throughout the rest of Russia. As well as the new tax rates, the Crimean regional government has cancelled all existing taxpayer debts. The lowering of the NDS to this level is unprecedented in Russia. Such low tax rates usually occur only in offshore zones. For example, Jersey, in the English Channel Islands, has a VAT rate of 3 per cent. According to Investcafe analyst Mikhail Kuzmin, the decision is a logical one. “The Russian authorities will try to create maximum relief for the introduction of business into the territory of Crimea,” Kuzmin said. “The region is in need of restoration and new investments for development.” The tax rate is set to remain in place until the beginning of next year, although it may be extended. According to the head of the department of legal consulting at Finexpertiza,Victor Demidov, “if the measure results in positive results and stimulates investment activity, then the given NDS rates for Crimea will be retained after the end of the transition period”. It is interesting that the value-added tax is a federal tax and does not fall into the sphere of responsibility of the

regional authorities. However, in the case of Crimea, an exception has been made: Russian federal legislation will start to function on the island only at the start of the new year. “This tax zone will be interesting, first of all, for the enterprises operating in Crimea, as well as for Russian and foreign investors – provided the tensions surro u n d i n g U k r a i n e a re lowered,”said Vasiliy Ukharsky, from UFS IC. In his opinion, the decision to reduce the NDS may be considered a step in this direction. Other countries actively practise the lowering of taxes in certain regions. For instance, income tax was eliminated in the American state of Oregon, which helped transform the region into an attractive destination for shopping, e-commerce and the development of new designs by major clothing brands. Russian authorities have somewhat similar plans for Crimea. At the moment the Ministry of Economic Development has worked out a plan for creating a special economic zone on the peninsula. If a company puts 150 million roubles ($A4.6 million) into the economy of the region over a period of three years, then it will be exempt from all taxes except for the 10 per cent tax on profit. However, this program is still being finalised by the Russian government. The creation of favourable tax zones in Crimea is happening against the backdrop of Russian companies searching for new locations on Russian soil for their operations. The banking crisis in Cyprus is a major factor in this. According to data from the Central Bank of Russia, Cyprus was ranked first among all the countries to which money was transferred from Russia.

Europe's lowest income-tax rate In contrast to the US and to its BRIC partners (Brazil, India and China), Russia has a flat income-tax rate. In Russia, regardless of how much money you make, you will pay 13 per cent. This rate is the lowest of the BRIC countries and it is also lower than any income tax level in Europe, where rates can be as high as 52 per cent. There are four main taxes that Russians pay. In addition to personal income tax, there are taxes on company profits and a value-added tax, called the NDS, as well as a specific tax

on the extraction of mineral resources (MET). Russian companies are also required to pay insurance premiums on wages, which contribute to social security payments. Taken together, these key taxes still equate to lower tax rates than in Europe. The main indirect tax, the NDS, which replaced Russia's sales tax, is 18 per cent. VAT in Europe fluctuates between 21 and 25 per cent. However, this is still much higher than sales taxes in the US, which are generally less than 10 per cent.

In Moody’s estimation, the volume of deposits from Russian companies was approximately $20 billion. In total, Moody’s experts estimated that Russian banks held up to $57 million in Cypriot banks. Of this money, $11-13 billion was irretrievably lost because of the crisis, and just as much is stuck in the local banking system. As a result, Russian companies have had to face the danger of losing money tucked away in a“safe zone” for the first time. The Kremlin also announced a large-scale program for reversing the movement of capital offshore and the return of Russian-owned companies to Russian soil. Last December, in his address to the Russian Federal Assembly, PresidentVladimir Putin spoke out about the importance of fighting for the “de-offshorisation” of the country’s economy. Following the speech, the Russian Ministry of Finance drafted a new law. In accordance with this document, all Russians who directly or indirectly own even 1 per cent of a foreign company are required to inform the government.

And if they own 10 per cent of a company registered offshore, they need to inform the Russian tax authorities and pay tax on any retained earnings. As businesses return from offshore, Russian regions are trying to attract the largest taxpayers. In particular, the authorities in Moscow have announced a lowering of the regional taxes on profit for oil companies from 18 per cent to 13.5 per cent. However, this is not for all profit, only for its growth; that is to say the 13.5 per cent taxes are paid only on the difference between profits of the current and the former year, while the remainder of the revenues will be subject to the standard 18 per cent tax. So market players do not consider Moscow’s offer very generous. An alternative platform for companies is St Petersburg, where Gazprom Neft, the subsidiary of the gas monopoly Gazprom, is located. However, if the promises of tax benefits by the regional and federal authorities continue, then the Crimean peninsula might beat Moscow and St Petersburg in the race to attract large companies.

Russia Direct's second quarterly of 2014 examines the mobility of the global workforce and the increasing competition between countries for the best and brightest. After the fall of the Soviet Union, Russia became a net exporter of brainpower. Today, however, Russia has significant advantages that could help it become a magnet for professionals from all over the world. This memo explores 10 strategies Russia could use to attract the world's top minds.

The Arctic: a new geopolitical focus DECEMBER’13 MONTHLY MEMO As global temperatures rise, the Arctic has the potential to become the new geopolitical focus of the 21st century. Containing vast deposits of natural resources and hosting newly accessible sea routes, the region could become the scene of a fresh round of competition between Russia and the US. Russia Direct's December Monthly Memo analyses the roles of the Arctic coastal states and other states, like China, in formulating an agenda for the region.

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THE GOOD, THE BAD AND THE UGLY: THREE POSSIBLE SCENARIOS FOR UKRAINE

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RUSSIA PLOTS COURSE FOR OLYMPIC GLORY rbth.com/37023

POPULAR SPORTS IN RUSSIA THE SUCCESS OF THESE FIVE SPORTS IN THE RUSSIAN FEDERATION MIGHT COME AS A SURPRISE TO SPORTS FANS IN AUSTRALIA

While international sport fans know that Russians excel in ice hockey and other winter sports, Russian prowess in these five sports is less well known. LEO ZAITSEV SPECIAL TO RBTH

Sambo The history of the combat sport sambo is a vivid example of how certain sports acquired political significance during Soviet times.The early versions of what became Sambo emerged in the Soviet Union in the 1920s after the Soviet government began targeting karate, judo and even boxing for being bourgeois. The word sambo is an acronym for“samooborona bez oruzhiya”(self-defence without weapons). Sambo, which has diverse influences, incorporates techniques from various martial arts (most obviously from judo and jiujitsu) and from fighting styles of indigenous cultures in Mongolia and regions of the Soviet Union (including Georgia, Ossetia and Kazakhstan). Pioneers of the sport were Viktor Spiridonov and Vasily Oshchepkov, who spent much of his life living in Japan, training in judo, under its founder Kano Jigoro. Oshchepkov’s connections with

Japan later resulted in accusations that he was a Japanese spy and he died in prison during the Great Terror. Despite the fate of one of the sport’s founders, sambo was actively developed in the Soviet Union as both a sport and as an important element in hand-to-hand combat training in the Soviet Red Army and special forces units. In 1938, sambo was recog-

Sambo incorporates techniques from various martial arts and from fighting styles of indigenous cultures in Mongolia and regions of the Soviet Union nised as an official sport by the USSR All-Union Sports Committee. In the 1970s, the USSR saw a boom in karate, but in 1984, karate was banned and many were even prosecuted for practising it. The reason was said to be because the sport was associated with criminal networks. But with perestroika in the ’80s and the subsequent collapse of the Soviet Union, the situation changed radically.

Sambo fell by the wayside and karate became the flavour of the day, arguably because of the influence of Western films, which suddenly began flooding Russia. Today the two martial arts are equally popular in Russia. Sambo’s image has been strengthened by its most famous player, Fedor Emelianenko. Thanks to the skills he acquired through sambo, Emelianenko has become well known internationally in mixed martial arts. In November last year, St Petersburg played host to the World Sambo Championships. 2013 was the 75th anniversary of sambo’s creation, and the 40th anniversary of the sport’s first sambo world championship. The St Petersburg tournament set records for the number of participating countries and the number of athletes who competed, with 600 Sambo wrestlers from more than 75 countries taking part. “Today, more than 410,000 people practice sambo in Russia,” said Vasily Shestakov, president of the International Sambo Federation.“We are working hard to make Sambo an Olympic sport.”

Beach soccer Russia has twice been the world champion in beach soccer. And the incredible popularity of this sport in Russia seems paradoxical for a country where beaches are a rarity and where snow falls for at least five months of the year. In Australia, for example, the sport has yet to become popular despite the abundance of beaches and an ideal climate for it. “It’s not about beaches, but about interest,” said Andrei Bakhmutsky, the goalie and one of the heroes of the Russian team.“We became champions in six years. If Australians put their minds to it, they could become a major force in the sport. In the meantime, of course, we will be playing with a clear advantage.” Russia’s international success in beach soccer began in 2011, when its World Cup final team handed a 12-8 defeat to the Brazilians, who are

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FROM SAMBO TO BANDY, RUSSIA IS HARD TO BEAT

said to have beach soccer in their blood. Then in 2013, the Russian team defeated the Spanish 5-1. Curiously, although the Russian team have twice become world champions, their members earn far less than many other less successful athletes. Beach soccer is a very young sport: the rules were only standardised in 1992. And the level of its commercialisation is incomparable with soccer or hockey, for example. “It's a cool sport: there's a lot of team spirit, beautiful goals, and the players play on the sand, out in the fresh air, making it perfect for television,” Butyletsky said. “We need to work on the development of beach soccer at all levels, including organising camps for children and promoting the sport in the media. “As for salaries, we’re certainly not envied by athletes in other sports,”he said.“But we are the pioneers of beach soccer, and we love our sport. “We play to win, and the money will come eventually.”

Biathlon According to television ratings, biathlon is the third most popular spectator sport

in Russia after soccer and ice hockey. Every winter, men in Russia are glued to their television screens, watching Russian biathletes compete at the World Cup. One of the main sponsors of the sport in Russia is the oligarch and Brooklyn Nets owner Mikhail Prokhorov.

Biathlon is the third most popular spectator sport in Russia after soccer and ice hockey Biathlon is also popular in Europe, especially in countries that have traditionally pursued winter sports such as Germany, Norway, Sweden, and Austria. It is not so well known in Australia, despite the fact that Australia sent Alex Almoukov and Lucy Glanville to compete in biathlon at the Winter Olympic Games in Sochi this year. Olympics biathlon in its modern form was first introduced in the US. In 1960, at the Winter Games in Squaw Valley, California, only one set of medals was won – for the 20-kilometre race. RBTH was able to speak with a member

of the Russian team, 80-yearold Alexander Privalov, who won the bronze in biathlon at Squaw Valley. “The competition was held away from the main stadium, the Olympic Village, and all of civilisation,”Privalov said. “Nevertheless, there were many spectators, a friendly atmosphere and we all were talking to each other. “The track was very good. I’d say my memories are most pleasant.”

Bandy Bandy, or“hockey with a ball”,’ is perhaps the most underrated sport in Russian history. Technically and tactically, it is on a par with ice hockey, basketball and soccer. However, the sport, which supposedly originated in Russia as a monastic game in the 10th century, has not made a great transition to the media age, since bandy matches are held on ice fields the size of football pitches, making it a difficult game to show on television. For this reason, bandy declined in popularity around the beginning of the television age. From the 1950s, bandy was supplanted by Canadian ice hockey. The fact that hockey was in the Olym-


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RUSSIA BEATS FINLAND AND RECLAIMS ICE HOCKEY CROWN rbth.com/36955

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© RIA NOVOSTI

Top of the world in ice hockey

Russia won its second ice hockey world title in three years at the recent 2014 World Ice Hockey Championships in Minsk, Belarus. Russia beat neighbouring Finland 5-2 in the final on May 25. The victory restored Russian national pride after the team’s early elimination at Sochi's Winter Olympics. The Russians played the final without their coach Oleg Znarok, who had been suspended for a game for making what looked like a throatslashing gesture at the Swedish coach Rikard Gronborg during Russia’s semi-final game with Sweden. When asked about the incident, Znarok told sportbox.ru that he “had a sore throat.”

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Fedor Emelianenko has four sambo world and MMA heavyweight titles.

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Russia's biathlon team has taken 10 gold medals at Winter Olympics since 1994.

pic program carried enormous weight, as did the social and economic influence that the National Hockey League (NHL) had. Today, bandy is still popular in Russia and Sweden.The two countries’ national teams meet on a regular basis in the finals of the World Cup. The International Federation is attempting to promote the sport, and so far it has had some interesting developments but perhaps not farreaching ones. For instance, a bandy team was recently formed in Somalia. Outside of Russia and Scandinavia, however, bandy remains little known, even although in 1995 the world championship was held in the US, in Minnesota – the state where the sport is best known and where the US national championships are held.

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The Russian men's volleyball team has won the World League three times.

In 2006, Australia joined the Federation of International Bandy, which was created in 1957, but the Australian team has not had any outstanding results. The Australian Bandy League is based in Victoria.

Men’s volleyball Despite the fact that the Australian men’s volleyball team came eighth at the Sydney 2000 Olympics, the popularity levels of this sport in Russia and in Australia cannot be compared. This is not just about the quality of play either (although, in this respect, the Russian team is now one of the strongest in the world). It is more about the broad popularity the sport enjoys, as well as the attention it is given by sponsors and the government.

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Russia's beach soccer team won two World Cups in a row (in 2011 and 2013).

Australia’s national team had one player with Russian origins – Igor Yudin, 26. Yudin moved to Australia with his family when he was 14, and he represented Australia at London’s 2012 Olympic Games. Yudin quit the Australian team and returned to Russia to live last year, where he now plays for the Russian club Kuzbass Kemerowo. The Russian league is the highest-paid in the world and men’s volleyball stars from around the world go to Russia to play. The arenas are packed with spectators and the sport receives ample government funding. One of Russia’s top volleyball fans, for example, is the former head of the Federal Security Service, Nikolai Patrushev.

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IN NUMBERS

Clockwise from above left: the Russian national team playing Finland in the ice hockey World Championships finals in late May; a competitor in one of the biathlon races in Sochi; Sambo star Fedor Emelianenko in a mixed martial arts fight; Russia's national beach soccer team playing Spain last year in the World Championships finals.


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UKRAINE: WHY THE NEXT MOVE WILL BE DECISIVE rbth.com/37055

KEY CHAPTER IN HISTORY OF EURO EXPORTS Fyodor Lukyanov ANALYST

ussia and the countries of the European Union have been cooperating in the area of gas supplies for a long time. The Soviet Union began to supply gas to Europe at the end of the ’60s. Back then, the Soviet gas industry was undeveloped and supplies were shipped in limited volumes and only to neighbouring countries. In Europe, the gas industry was also in its infancy – and the development of a field in Groningen, in the Netherlands, was just beginning. Russia and Europe’s gas sectors developed at the same time and in ways that left them enmeshed. The story of the Urengoy-Uzhgorod Pipeline is a good example of the history of this relationship. In the ’70s, the framework of the Council for Mutual Economic Assistance (Comecon) realised a project to develop a large gas field in the Urals city of Orenburg and create the Soyuz Pipeline for gas exports from Russia. The most dramatic stage of this project was the deal that provided for the construction of the Urengoy-Uzhgorod Pipeline, which would provide for large-scale exports of Russian gas to Western Europe. The construction of the pipeline, which stretches more than 5000 kilometres, was a massive undertaking, involving both Soviet and European manufacturers. The pipeline connects the Siberian gas field of Urengoy with the city of Uzhgorod in western Ukraine. From there, gas can be supplied to countries in Central and Western Europe. The Mannesmann factories in Germany were scheduled to provide a significant part of the large-diameter pipes for this pipeline. Another portion of the pipes was provided by a mill in Khartsyzsk, in the Kharkov region of Ukraine. The Ukrainian plant had

R KONSTANTIN MALER

GAS DEALS STILL CRUCIAL TO EU Stanislav Zhizhnin RESEARCHER

fter the EU summit in March, British Prime Minister D av i d C a m e ro n claimed Russia was more dependent on the European gas market than the EU was on gas imports from Russia. He also said that the EU should diversify its sources of gas over the long term, to be less dependent on Russian gas. The agenda of an EU summit, scheduled for later this month, contains a point on the development of a plan about how to do this. According to 2013 data from Eurostat, Russian gas accounted for about 25 per cent of total EU gas supplies. However, the Baltic states, Finland and several Eastern European countries are completely dependent on Russian gas supplies, while several others rely on Russia for up to 40 per cent of supplies. Russian gas gives European countries economic benefits worth hundreds of billions of dollars. In other words, there is a solid system of mutual economic benefit.

A

According to Laszlo Varro, head of the gas, coal and power markets division of the International Energy Agency (IEA), EU countries are going to remain the largest consumer of Russian gas over the next decade. This is partially because of economic reality, since replacing Russian gas supplies will

sources have not yielded great results. The EU 20-20-20 program, which aims to increase the use of renewable energy to 20 per cent of the total energy balance in the EU by 2020, has been stalled. In order to fully diversify away from Russian gas supplies, Europe would have to

The EU gas system is adapted for the supply and distribution of pipeline gas

Significant changes in Europe's consumption of Russian gas are unlikely

require significant financial resources, and the price for gas from new external sources may be substantially higher than the price of Russian gas. The EU policy aimed at improving energy efficiency is one of the steps taken to reduce dependency on Russian gas supplies, along with increases in the use of renewable energy sources. While energy efficiency policies have proven to be effective, hopes for actively developing alternative energy

resort to purchasing gas from other countries, which would require significant investments and a period of 10 to 20 years. According to calculations by Sanford C. Bernstein & Co, Europe would need $A231 billion in investment over the next four years to completely shift away from Russian gas supplies. In addition, European companies would have to pay fines to Gazprom under long-term take-or-pay contracts that will remain in effect until at least 2020.

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The main part of the EU gas transmission system is adapted for the supply and distribution of pipeline gas. Additional supplies of pipeline gas from Norway are limited. While the construction of gas pipelines from the Middle East and Iran has b e e n c o n s i d e re d , s u ch projects could be risky because of regional political instability. Gas supplied from Turkmenistan via the Trans-Caspian pipeline under the Caspian Sea (along the Baku-Turkey-Europe route) is also not an alternative option at the moment because of the absence of a defined legal status for the area. It is reasonable to assume that the Ukrainian political crisis will be resolved and that the Russia-EU gas supply partnership will continue to develop in accordance with the interests of both sides, including in the framework of the Russia-EU Energy Dialogue. Regardless of political developments, significant changes in Europe’s consumption of Russian gas are unlikely in the near term, given the existing infrastructure and contractual obligations. Stanislav Zhiznin is a professor at the Moscow State Institute of International Relations (MGIMO) and the president of the Centre of Energy Diplomacy and Geopolitics.

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been producing these pipes for some time, but the German pipes were more suited to several sections of the pipeline. Also, the number of pipes needed was so great that no one factory could produce all of them. Then the Italian firm Nuovo Pignone was contracted to provide gas compressors. A complication, however, was that the project began just after Soviet troops invaded Afghanistan. Following the invasion, the US called for sanctions against the Soviet Union. As part of the sanctions, the US demanded that its European allies refuse to supply pipes and equipment for UrengoyUzhgorod.

Without the pipeline, the entire deal to supply Europe with Russian gas would have fallen apart Without the pipeline, the entire deal to supply Europe with Russian gas would have fallen apart. The US, which was not a direct participant in the agreement, would lose nothing from its collapse, but the ramifications would be serious for many European countries. Nuovo Pignone pulled out of the deal because it was a licensee of the General Electric company and the US had forbidden any components produced under American licences be used in the deal. The German companies, however, decided to supply pipes for the project anyway. Efforts by the US to derail the construction of the pipeline was one of the most serious crises of the Cold War. Vladimir Feigin is the president of the Institute for Energy and Finance and the Russian co-speaker of the EURussia Gas Advisory Council, EU-Russia Energy Dialogue.

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Opinion

WHY MOSCOW CARES ABOUT SEARCH ENGINE YANDEX rbth.com/36821

Alexei Knizhnikov ECOLOGIST

n the past decade, the world has seen a rapid increase in the use of renewable energy, including wind, solar, biomass, biofuels and small hydroelectric power plants. Over the past few years, global investment in renewable energy development has consistently exceeded $A200 billion a year. From 2010 to 2013, wind power capacity increased by 150 per cent, surpassing 300 gigawatts (GW). Compared with 2010 figures, solar power capacity has almost doubled, reaching 135GW in 2013. These figures are comparable with the total capacity of the power plants of Russia’s energy monopoly, United Energy Systems, which can produce 227GW per year. The US, China, Germany, India, Brazil and Spain are the global leaders in clean energy. A 2013 analysis of the G20 countries showed that all of the G20 countries, with the exception of Saudi Arabia and Russia, have made significant advancements in renewable energy capacity in recent years. According to different estimates, Russian wind power capacity is 13-15 megawatts (MW), comprising less than

I

There have been some successful projects that use biogas produced by processing industrial waste, but this renewable energy source’s potential is hardly being met on a national scale. The fact that several regions in Russia, such as the Kola Peninsula, Lake Baikal and the Altai, are unmatched in terms of weather conditions for the development of wind energy stands in sharp contrast with Russia’s share of wind and solar power production. The good news is that the authorities have started to pay attention to Russia’s need to develop the renewable energy sector. The federal law governing electricity adopted in 2003 contains measures to support the use of renewable energy by facilitating power grid connectivity, as well as obligations to purchase energy produced by these power plants to compensate for grid losses. However, these measures have not brought any significant changes. In 2012 and 2014, the Russian government adopted several stimulus measures with more detailed and concrete targets for renewable energy development. According to these measures, wind capacity must increase from 100MW in 2014 to 1GW in 2020, which should ensure a

0.005 per cent of global wind power output. At the end of 2013, Russia’s largest solar power plant, with a capacity of 5MW, began operating in Dagestan. Against this backdrop, experts sometimes raise the argument that Russia has large reserves of fossil fuels and therefore has no need to develop renewable energy sources.Yet international ex-

Russian wind power capacity comprises less than 0.005 per cent of global wind power output perience shows that this argument is untenable. The US is one of the largest global producers of oil and natural gas, but it is comparable to China in terms of renewable energy use. In contrast, Norway, which is the largest producer of oil and gas in Europe, increased its wind power capacity from 13MW in 2000 to 766MW in 2013. Russia’s potential in renewable energy sources is great. Its traditional source is wood, and it uses an estimated 20-30 million cubic metres. However, the use of wood and biomass to produce electricity is not widespread.

KONSTANTIN MALER

FUNDING THE KEY TO ACHIEVING ENERGY TARGETS

total capacity of 3.6GW for the period from 2014-2020. For solar power stations, capacity figures are set to increase from 120MW in 2014 to 270MW in 2020, providing a total capacity of 1.5GW for 2014-2020. Government initiatives are also aimed at developing the use of biomass in the form of biogas, liquid biofuels and solid wood fuel. Yet the federal budget does not provide funding for these activities, which is the main reason behind the lag in renewable energy development. Of the 28.7 trillion roubles ($880 billion) in funding allocated for the Energy Efficiency and Energy Development state program to be implemented in 2013-2020, only 104.8 billion ($3.2 billion) are to be provided through the federal budget. Only 1.8 billion roubles ($55 million) will be used to

fund the development of renewable energy. Amid a lack of federal funding, grid companies that are obligated to purchase energy to compensate for losses will have to pay higher prices in order to ensure return on renewable energy

Russia adopted several stimulus measures with detailed targets for renewables projects. Grid companies clearly have other priorities for the funds they receive from users. It will soon become clear whether the establishment of target indicators will lead to significant changes. There are many methods to support renewable energy development that have yield-

ed significant results on a global scale over the past decade. In order to develop the use of renewable energy, it should be understood and acknowledged that past renewable energy initiatives in Russia have not been effective, and the country should start developing plans for further action. These plans should involve all interested parties, primarily the public and business representatives who work in the field of renewable energy. Further bureaucratic experiments in this field will simply preserve the current state of affairs, in which Russian wind power plants (1315MW) lag far behind those in Honduras (120MW). Alexei Knizhnikov is the director of the Environmental Policy Program at the World Wildlife Fund Fuel and Energy Complex.

Andrei Frolov EDITOR

ussia inherited its nuclear energy sector f ro m t h e S ov i e t Union and can take pride in the fact that the world’s first nuclear power station was launched in the USSR in 1954. In the 1970s and ’80s the sector enjoyed a period of exponential growth, but this was cut short by the Chernobyl disaster in 1986 and the break-up of the Soviet Union that followed shortly after. As a result, in the ’90s and early this century, Russia’s nuclear infrastructure was barely developed. In the post-Soviet period, only four power units were put in operation. Still, Russia’s existing 33 power units, with a total rated capacity of 24.25 gigawatts (GW) generate about 16 per

R

cent of all power in the country. Yet this is far from the limit of the country’s ambitions. Ten more power units are under construction (including two reactors on the floating nuclear power station Akademik Lomonosov) with a capacity of 9.2GW. The plan is to increase the share of nuclear-generated power in Russia to 25-30 per cent by 2030 and to 45-50 per cent by 2050, which means the construction by 2030 of some 32GW in new capacities, although by that time, some of the current power units will already be decommissioned. There are several reasons for Russia’s ambitious plans for developing its nuclear resources. The first is that the Russian nuclear sector consists of some 500 enterprises with about 20,000 employees. These employees are divided among four major industry segments: nuclear fuel

KONSTANTIN MALER

FUTURE STRATEGY HAS A NUCLEAR FOCUS

Nuclear energy has the potential to be an important export for the Russian Federation

creation, nuclear power generation, nuclear weapons maintenance and development and research at scientific institutions. Russia’s list of nuclear assets includes the world’s most powerful icebreakers, which run on nuclear power. A large-scale program for growing nuclear power ensures a

natural development for the sector and provides employment for experts not only within the state nuclear organisation Rosatom, but also in other sectors such as machine engineering and construction. The second reason is an economic one. By increasing the share of nuclear power in the country’s energy balance, it is possible to maintain economic growth without increasing carbon dioxide emissions and violating Russia’s quotas under the Kyoto Protocol. In addition, the emphasis on nuclear power makes it possible to reduce domestic consumption of oil and gas and reserve these resources for export, which is far more advantageous economically than selling them at discounted rates on the domestic market. Additionally, transporting oil and gas to thermal

power stations across Russia is logistically difficult and expensive, which makes exporting them even more beneficial to the economy. Finally, given Russia’s climate and limited opportunities for solar power, nuclear energy may be the most viable alternative to fossil fuels. Nuclear power is important for Russia’s continued economic development. Keeping up with the latest technologies in the sector keeps thousands of highly qualified Russian scientists employed. It is also the best chance to develop renewable sources of energy. And nuclear energy has the potential to be an important export for the country, one that some day could counter the Russian dependence on fossil fuels. Andrei Frolov is editor in chief of the magazine Eksport Vooruzheny (Arms Exports).


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Science & technology

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ROSTELEKOM LAUNCHES STATE-OWNED SEARCH ENGINE SPUTNIK rbth.com/36897

Innovation Young Russian scientist develops a hydrogen battery which will power portable devices

IN BRIEF

Eco fuel cells may replace batteries

Crowdfunding finances ocean expedition

Yevgeny Shkolnikov (left) says his hydrogen fuel cells are sustainable and longlasting.

er for TopDevice in Russia. “Power supplies that are affordable and practical to use will be a timely solution for users,” he added.“Right now there are a number of different companies working in this sphere. “Some of them, Asian manufacturers in particular, have obvious advantages. “There is a tonne of competition in the marketplace, but I have yet to hear about cheap hydrogen.” PRESS PHOTO (2)

Developers at the start-up HandyPower have created a portable hydrogen-powered battery for gadgets, which they say is long-lasting and an ecological alternative. DAN POTOTSKY RBTH

Yevgeny Shkolnikov, the young director of the Russian Academy of Sciences’Alumohydrogen Energy Laboratory, has developed an innovative portable hydrogenpowered battery, which consists of two simple ingredients: activated aluminium and water. The start-up HandyPower is developing and marketing a new device which incorporates the battery. It will allow gadgets to be charged from the device, just using a USB cable. According to Shkolnikov, it took him about 15 years to develop and build the first prototypes of the devices. The technology used in the fuel cells has been around for a century, but hydrogen – which powers the cells – is explosive and usually stored in gas cylinders because of how dangerous it can be. Shkolnikov came up with

ON SCIENCE & TECH

a solution to use hydrogen for power safely: storing it as a liquid and then isolating it using a chemical reaction. He says the technology is safe, and that it has numerous advantages. “Aluminium, reacting with water, acidifies and isolates the hydrogen,” he explains. “The hydrogen, passing through a membrane of the fuel cell, immediately turns into a watery vapour, and when that happens, an electrical current is produced in the membrane.” Boris Pospelov, managing engineer of the Urals Electrochemical Integrated Plant (UEIP), said that Shkolnikov’s innovative technology was very interesting. “For 20 years, the world’s best minds weren’t able to appreciably lower the cost of a kilowatt of energy taken from hydrogen-powered energy,” he said. But he added that he had serious doubts about how easily it could be marketed in the short term. Shkolnikov's project has been popular with investors and has received more than 5 million roubles ($A154,000) in investment from the Dubna

and Sigma Novosibirsk nanotechnology centres, as well as a grant from the Bortnik Foundation. Project staff are now working to attract another $154,000.

The battery itself consists of two simple elements: activated aluminium and water The large-scale distribution of fuel cells for portable devices will start in 2015 Main competitors According to the predictions of Pike Research, an energy sector research firm, the large-scale distribution of fuel cells for portable devices will start in 2015. Pike believes the market is likely to have a value of $2.5 billion in 2016. The firm predicts that new technologies will make fuel sources for power supply sufficiently cheap and sustainable that these kinds of de-

FUTURE R U SS IA 'S OGRAM R P S PAC E U N V E IL E D / 3 5 8 93 rbth .co m

vices could become a viable alternatives to traditional batteries. The idea of creating portable energy supplies has not been confined to Russia, however. Similar devices have appeared in other countries too, and the HandyPower project is not without competitors. The American company Lilliputian Systems used a similar cartridge concept, but without using hydrogen. One of their removable cartridges is enough to charge a mobile phone for two weeks. Interestingly, Rosnano, a Russian technology company, invested about $25 million into the American project. There is also a Swedish fuel cell called myFC. This device generates power from water, which has to be poured into the device. One such “refuelling” is enough to recharge a mobile. A similar Japanese device, called the Aquafairy, also requires water to be poured in. “The Russian portable battery market is just barely taking shape, and one can surmise that it will grow at an unbelievable speed,” said Aleksei Korostelyov, manag-

Advantages The device is going to be very affordable considering how long it can last. The main active components of the battery — aluminium and water — are easy to source. The device will cost about $50 to $60 to produce, and the removable cartridges only a few cents each. These devices have the capacity to go on for years and years. All that is required is that users put a new cartridge into the device, and as the chemical reaction starts, power will be generated. Not needing access to an electricity source will give these fuel cells a big advantage over other traditional rechargeable batteries, particularly for certain situations such as camping. According to Ilya Kalashnikov, the innovation manager at HandyPower, if everything goes to plan, the mass production of the product will allow the start-up to recover its research and development costs in just two to three years. “In the future, we want to embed our solution in hundreds of other devices and work on that which we do best, the packaging of energy,” he added.

HE L AY IN G T R WO R K F O GROUND NEERS OF IO P : THE G AG A R IN EARCH PAC E R E S S OV IE T S / 3 5 8 61 rbth .co m

Russian marine biologist and underwater photographer Alexander Semyonov is planning an expedition called Aquatilits, in which he will carry out research into gelatinous plankton. Academics from the US, Brazil, France, and other nations, have already given their support to Smeyonov’s project, which is the world’s first scientific expedition to be financed by crowdfunding. Read more at rbth.com/36759

Safer rockets for cosmonauts

SHUTTERSTOCK/LEGION-MEDIA

A new rocket pack developed by Russian engineers will help cosmonauts move freely and work in space. In dangerous situations, it will automatically return them to their space station or spacecraft. The packs will be made by the Zvezda [star] research and production enterprise, which specialises in making space suits and emergency equipment for pilots. Read more at rbth.com/36677

New technology for copying art

PRESS PHOTO

The Russian start-up Prixel has developed a technology which makes it possible to print copies of paintings that fully convey the texture of the artist’s brush strokes, with replicas costing about $200.The new technology may be used in museums. Fuji has a similar technology, but its price tag for one painting can reach $35,000. Read more at rbth.com/36223

L G LO B A L W H AT W IL CO S T WA R M IN G ? IA S RUS / 3 57 9 3 rbth .co m


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Science & technology

MOSCOW CHILDREN FIGHT FLOODS WITH LEGO rbth.com/36277

Digital health From a slow start, the marriage of healthcare and information technology is beginning to build momentum

Start-ups target health market

from pharmaceutical companies and the producers of other health products.

Life Button Life Button, a medical alarm system, helps seniors and people with disabilities call emergency care. The project offers two packages: one consists of a phone with an SOS button that determines its location using GPS and is connected to a round-the-clock call-centre with doctors as operators; the second is a bracelet with the same button, a fall sensor and a loudspeaker communications system. The project has managed to raise nearly $1 million, and phones with Life Button are sold now throughout Russia.

Digital health, which combines IT and medical science, is a new market in Russia. Despite being young, the area is likely to prove profitable for start-ups. DAN POTOTSKY

The financial success of Russian start-ups in the area of digital health may seem modest compared to the turnover of similar companies in the West, but this is a growing new sector in Russia. Asked about Russia’s investment climate for digital health products and services, Ilya Pavlov, a venture partner at Bright Capital Fund, said that digital health projects usually require long lead-times before they become profitable, and that this may be why investment in this area has not been as strong as it could be. Despite impediments, Russia still has interesting and successful digital health ventures. One example is the Doctor at Work project – a successful social network site for doctors, which has about 200,000 users in Russia and other former Soviet republics. Its co-founder and CEO, Stanislav Sazhin, described the initiative as essentially a “facebook for physicians”. “During the registration, we check all candidates, their graduation credentials or call their employers,” he said. Bright Capital Fund invested $A1 million in the project in 2012 and $3.2 million this year. The project also earns money from pharmaceutical advertising. According to Sazhin, his start-up has signed agreements with 13 out of the

SHUTTERSTOCK/LEGION-MEDIA

RBTH

world’s 20 largest pharmaceutical companies. And last year, the social network earned $1.6 million and had a net profit of $540,000. Another project is Medesk, a cloud service of health records and the Russian equivalent of Practice Fusion - the largest US platform offering this kind of service. Medesk sells its service to medical clinics, and is being used by about 1000 doctors across 25 clinics, serving some 100,000 patients. The young start-up brought in as little as $325,000 last year, but, its founders of the project that its profits will reach nearly $1 million by the end of 2014.

NormaSahar (NormaSugar), an automated online system which monitors the condition of diabetic patients, has attracted $1 million in investment, although its development has been slow so far. In an interview with Sekret Firmy, NormaSahar CEO Aleksandr Podgrebelny said that the service had 7500 registered users and 44 endocrinologists giving online consultations. Podgrebelny believes that the project has a great future: “We have gathered the initial audience, and we will gradually grow. “And NormaSahar has become the standard for the care for and treatment of pa-

tients with diabetes in several major Russian public medical centres.” To succeed in the field of digital health in Russia, some have said it is necessary to fill profitable niches and then wait. “These days, the prize for a successful start in the US is much higher than anywhere else, but competition is also higher there,” Sazhin said.“In Russia, it is easier to launch new products and initiatives because there are just a few competitors.” According to Arkady Moreynis, a NormaSahar investor, digital health start-ups take more time than other start-ups to develop. “Their development can be described by an ‘ice-hockey stick’ graph: first the line

moves upwards very slowly, but then it passes the bend, and after that it sky rockets,”Moreynis said. “This take-off has already happened in the US, but it hasn’t taken place yet in Russia. However, in the coming years, medical startups will become popular and will start to make good money. Four notable Russian startups in the digital health sphere are:

Med-Room.com Med-Room.com, a project from the Siberian city of Novosibirsk, consists of an electronic reception office and a service for the comparison of medical services. A test version of the website helps users find the nearest private clinic or doctor, to compare the cost of services and even make an appointment. The company operates solely in the sphere of private medical care: 60 per cent of its service is in dental clinics and 15 per cent is in multidisciplinary health clinics.

VitaPortal VitaPortal is a medical resource that provides access to information on treatments and pharmaceuticals for a wide target audience. All of the portal's content is checked by doctors before publication. VitaPortal was launched in May 2011 under the auspices of the investment company Fast Lane Ventures. The initial investment was more than $1 million. The portal's services are also being funded by advertising and sponsor support

Mir Vracha The professional medical web-portal Mir Vracha (The world of a physician) is similar to a social network for physicians. However, unlike most social networks, the project also includes tools for the work of a medical doctor: interactive medical calculators, data on clinical trials, a database of pharmaceuticals and clinical guidelines. The start-up works in collaboration with the Japanese company M3, Inc.

Security Moves to limit the GPS in Russia won't affect civilian users, but further curbs depend on negotiations with the US

Space agency blocks the use of GPS for military purposes Russia's federal space agency has limited the scope of the capabilities of the US's Global Positioning System (GPS) on Russian territories. DAN POTOTSKY RBTH

The Russian Federal Space Agency (Roscosmos) has limited the operation of the US Global Positioning System (GPS) on Russian territories for military purposes, a statement published on the agency’s website says.

PROMISING INNOVATIVE RUSSIAN

Russia’s GPS ground stations will continue operating under existing agreements until August 31 but they will not be able to be used for military purposes, the statement says. Measures taken by Roscos-

mos and other state agencies are now effectively preventing data from Global Seismographic Network stations in Russia from being used by the GPS. Russia’s Deputy Prime Minister, Dmitry Rogozin, said that these measures were in line with national security interests, but do not affect civilian users. On June 1, Rogozin tweeted: “To clarify: we have developed and implemented

technical measures that prevent the use of these stations for military purposes. Now, they are under our complete control.” He also tweeted that Russia had initiated talks with the US to discuss having GLONASS stations [Russia’s alternative to the GPS] on US territories. The US had been given the deadline of August 31 by which to make a decision on the matter.

As background, on May 13 Rogozin announced that Russia would totally suspend the operation of GPS stations in Russia from June 1, unless Washington agreed to deploy GLONASS stations in the US. The US government had p re v i o u s ly h a l t e d t h e construction of GLONASS stations on US territories because of security concerns and about the Russian navigation system.

RUSSIAN STARTUP UP Check our summer RATINGS edition this June 2014 at rbth.com/startups


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Culture

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ADD A SLAVIC TOUCH TO YOUR WARDROBE rbth.com/36787

Culture Traditional Cossack clothing and customs are making a comeback in Putin's nationalist Russia

IN BRIEF

Cossacks ride back in style

'Ukraine is not a brothel' at SFF A documentary about Ukraine’s radical feminist movement FEMEN, by the Australian filmmaker Kitty Green, will screen at the Sydney Film Festival on June 13. In their quest for empowerment, FEMEN’s “naked warriors”, as they describe themselves, go topless or wear G-strings on the street, with slogans painted on their bodies. This courageous but vulnerable approach to activism has resulted in many members being arrested and some being brutalised by police. Green’s film, which is in Ukrainian and Russian and which earned a special mention at the Venice Film Festival, looks at FEMEN’s aims and the lives of its members. It also focuses on the fact that the movement was actually founded by a man, Viktor Svyatsky.

As traditional Cossack clothes are appearing more frequently on Russian streets, kuban hats and Cossack burka overcoats are also hitting international catwalks. INNA FEDOROVA

Collections by Ralph Lauren, Simon, Kneen, Manolo Blahnik and Anastasia Romantsova have each incorporated motifs from Cossack traditional dress – motifs which, have been popular in highend fashion in Russia for some time. Online and high street stores that specialise in traditional-style Cossack clothing are easy to find in Russia these days. Companies such as Cossack Dawn and Cossack Shoppe offer cherkeskas (coats) and beshmets (waistcoats), bashlyks (headdresses), wide trousers and papakhas (hats). Garments can be ordered in the size, colour and fabric of choice. Buyers aren’t necessarily purchasing them for performances or festivals. Cossacks can wear their traditional clothes in their home towns, at regular Cossack events or while out doing volunteer street patrols.

Revival of Cossack culture A revival of Cossack culture in the Soviet Union began with Mikhail Gorbachev’s perestroika, and in 1988 the USSR passed a law allowing the re-formation and creation of Cossack voiskas (organisations). Today, the re-imagining of Cossack culture continues, and Cossacks are carving out new roles for themselves in Russian society. Russia has at least 30 Cossack military schools, for example, and some regional authorities have handed limited policing duties over to local Cossack militias, which is why Cossacks, in traditional uniform, can be seen patrolling the streets of Moscow. In addition, the Russian Army has had a Cossack division since 2005, and Cossack units have even turned up – uninvited – to several post-Soviet conflicts on Russia’s southern borders. The Cossacks’ brand of patriotism fits well with the nationalist and morally conservative sentiments that have come to characterise Russia's political climate during Pres-

REUTERS

RBTH

What a Cossack woman wears Cossack women’s dress was usually a blouse and skirt. The blouses were made of cotton and usually form-fitting, always had long sleeves and were typically finished with a tight row of elegant buttons and handmade lace. The skirts were long (other lengths were considered indecent), made of cotton or wool and draped at the belt. For the Kuban Cossacks, linen skirts were as a rule worn only as undergarments. Cossack women usually wore several layers of petticoats, made from cotton or satin, and tradition decreed that the innermost petticoat was always white.

Cossacks, in traditional uniform, can be seen patrolling the streets of Moscow Superstition was also behind Cossacks wearing forelocks on the left side of their heads

ident Vladimir Putin's third term.

Cossack wardrobes Pre-revolution, Cossacks served on Russia’s borders. Their clothing was varied and incorporated aspects from serf traditions, probably largely because runaway serfs often found refuge in Cossack communities. One of the more colourful images we have of Cossack style is from communities in Zaporozhye (in south-eastern Ukraine, on the banks of the Dnieper River). Zaporozhye Cossacks wore cloth trousers, a papakha (a tall sheepskin hat with a fabric cloth), smocks and kaftans, of kneelength, which gently flared at the bottom, and which were fastened tightly at the chest with buttons. Underneath, they wore cloth trousers on top of spodniks (linen underpants). On to the spodniks they fastened a small cloth pouch with money, held to the body along with the pants themselves with the help of a gashnika (a belt). The collarless open-breasted kaftan became part of the traditional costume of both the Don and Ural Cossacks. Later, in the 19th century, it transformed into a uniform kaftan, which was fastened tightly with elaborate hooks and eyes. After the introduction of firearms, the Caucasus,

Kuban and Terek Cossacks sewed cartridge belts onto their kaftan (portioned charges were specifically needed by cavalrymen in battle), and as a result the legendary cherkeska (Circassian coat) came into being. It is impossible to picture a Cossack without a hat, and hats had significance in Cossack hierarchies.Young Cossacks removed their hats as a token of submission when they were in the presence of elders, when serious issues were being discussed, while atamans (chiefs) wore taller hats than everyone else, to emphasise their authority.

Design and superstition Cossacks treasured their uniforms and wore them as long as possible. This was not due to miserliness but superstition – it was good luck. Superstition was also behind Cossacks wearing forelocks on the left side of their heads (their heads were usually completely shaved, leaving only one long lock of hair). They believed that an angel sat on their right shoulder and guided them on the right path, but that a devil sat on the left and needed brushing off by the forelock. The forelock was an important element of Cossack identity and to lose it was associated with terrible shame. “Without a forelock, a Cossack is not a Cossack.”

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It was believed that for killing his enemies the Cossack went straight to hell when he died but that the Lord, knowing he did so out of love for his homeland, pulled him out of the furnace by that same forelock. Another important attribute of being a Cossack was the wearing of silver crescent-shaped earrings. Not everyone had the right to wear them. Those deemed worthy of protection from danger by virtue of their social status were“marked”by an earring. A pierced left ear meant that the Cossack was the only son in the family and a pierced right one meant that he was the last man in his family. The earring was worn as a talisman and amulet. The crucifix was also worn and an icon was stitched into the lining of a Cossack’s hat. It was not until the mid19th century that standard uniforms appeared across Cossack troops. The Don troops wore a chekmen (cloth kaftan), grey-blue trousers with a red stripe and boots, as well as a bashlyk (woollen hood), winter chekmen and fur hat or papakha. The Kuban troops wore a cherkeska made from dark cloth, dark trousers, a tunic, a bashlyk, a winter burka, a papakha or the truncated Kuban papakha, and boots or chabotki (summer shoes).

Political themes make comeback

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After a long period of Rusian theatre companies avoiding political themes altogether, in the past few years Russia has seen the return of politically-charged theatre. Russia’s most provocative contemporary theatre directors and productions are examined in a probing feature by RBTH, which tracks the history of politics in Russian theatre. Read more at rbth.com/37063

'Leviathan' wins Russian director Andrei Zvyagintsev’s new film Leviathan won Best Screenplay at the Cannes Film Festival in May. While critics praised the allegory of a man’s struggle with corruption in northern Russia as a masterpiece, the film may not be released in Russia, the director said, because the Minister for Culture didn’t like it. Read more at rbth.com/36947

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THE FINAL DAYS OF THE RUSSIAN WRITERS: ALEKSANDR PUSHKIN AND MIKHAIL LERMONTOV rbth.com/36873

Visionary Mayakovsky remembered 84 years after his death

Lasting influence of ‘the poet of the revolution’ YOLANDA DELGADO RBTH

Mayakovsky was only 13 when he first read Karl Marx, and soon after, he was participating in secret meetings and handing out Bolshevik Party pamphlets. In 1909, he was arrested for the third time and spent 11 months in Butyrka Prison. In the solitude of cell 103, he honed his writing skills and his art. After his imprisonment, he would be known as an actor, playwright, journalist, cartoonist, draftsman, children’s book author, cultural agitator and, above all, a poet, whose gaze was set on the future. “My verse will reach you/across the peaks of ages,/ over the heads/of governments and poets.” “I remember when my brother came out of prison we were all so excited,” his sister recalled.“The first thing he did was go and wash his hands.”Those who knew him well spoke of his obsession with cleanliness and the fact that he carried his own soap. Mayakovsky was born in Baghdati, a small town in Georgia, where his father worked as a forest ranger. In the company of his father, in the mountains and with the murmur of the river in the background, he discovered the rhythm and music of the verses he would eventually write. But he was an especially sensitive and at times troubled child who was slow to read, according to his biographers. The tragic and sudden death of his father from septicaemia – from a small prick by a rusty pin – caused Mayakovsky’s family great anguish and prompted them to move to Moscow, where they lived hand to mouth. His father’s death may have contributed to him developing obsessive compulsive disorder, a condition that plagued him his entire life.

After prison, he left the Communist party and enrolled in Moscow Art School, where he met David Burliuk, who became his best friend and “his first master” – the first who believed in his poetry. Burliuk paid him 50 kopeks a day so he could write and not go hungry. With his friend Burliuk, he embarked on an adventure called the Futurist Movement, which rejected any art form that smacked of bourgeois influence. In 1912, they published The Slap in the Face of Public Taste, with texts by Burliuk, Alexander Kruchenykh,Velimir Khlebnikov and Mayakovsky. The Futurists would cause scenes in public and were not taken seriously by the Russian intelligentsia. Their poetry evenings were provocative. Sporting yellow shirts, top hats and canes, their faces painted, they read their poems to audiences that howled and booed at them. A famed poet of the time, Anna Akhmatova, recalled a young Mayakovsky, along with his noisy companions, frequenting the Stray Dog, a cellar bar where St Petersburg’s intellectuals of the day gathered. Regardless of his irreverent ways, Mayakovsky’s poems were praised by his contemporaries: Alexander Blok, Maxim Gorky and Boris Pasternak. In the summer of 1915, Mayakovsky had a decisive encounter with the married couple Lilya and Osip Brik, who became his close friends. He fell in love with Lilya and dedicated his most beautiful poetry to her (A Cloud in Trousers, The Backbone Flute, The Man, About That). Even though she stayed married to Osip and Mayakovsky had other relationships, she was his muse and his great love. And Osip, in addition to being his friend and editor, was a faithful ally in every cultural undertaking.“To accept or not to accept? There was no such question for me… my revolution.” Author Viktor Shklovsky wrote:“Mayakovsky entered

ON LITERATURE: rbth.com/arts/literature

OPERA

Opera first for Sydney An avant-garde opera about Vladimir Mayakovsky will premiere at Sydney's Carriageworks on July 28. The work, written by Michael Smetanin, an Australian-born composer of Russian descent from Sydney's Conservatorium, and writer and librettist Alison Croggon, will be performed by Sydney's Chamber Opera. “Mayakovsky was a '20s equivalent of an '80s punk,” Smetanin said, and went on to describe how he used a rough-around-the-edges recording of Maykovsky reading his poem Listen, from 1914, as the musical inspiration for the score. He stretched the 52-second recording to 90 minutes, and using a spectral analysis, mapped its pitch and rhythm to determine the work's chord progression and melodies. “The result isn't atonal, but it’s also nothing like an aria from Figaro,” Smetanin said. Blending electronica and voice recordings, the opera will also feature characters and commentators from the past and present. Even Stalin will make an appearance, Smetanin said.

the revolution as he would enter his own house.”The poet finally saw his dream from adolescence come true. From that moment on, there would be no rest for him. It was the Futurists, following Mayakovsky’s slogan“The streets our paintbrushes, the squares our palettes”,who collaborated with the new government. Mayakovsky became a oneman band. He could be found arguing in meetings about how to organise the arts in the Soviet Union, writing poetry for propaganda posters or visiting factories. The“poet of the revolution” contributed to newspapers and magazines, wrote screenplays and worked as an actor in films such as Not For Money Born, The Lady and

WRITERS H RUSSIAN IN ENGLIS READING W GIVES NE S TO N IO S N E DIM R DS THEIR WO 4 353 3 / m o .c rbth

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Born in 1893, Vladimir Mayakovsky, a poet and one of the most influential figures in Russia's Futurist movement, is still admired and remembered.

Soviet poet Vladimir Mayakovsky was a brooding embodiment of Russia's Futurist movement.

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POSSIBLE FACTORS IN POET'S DEATH

Mayakovsky was demoralised and deeply disillusioned by the course of Soviet politics and the criticism levied against him by the implacable Russian Association of Proletarian Writers.

The Hooligan (which can be viewed online) and Fettered by Film, which co-starred Lilya Brik. Mayakovsky liked Buster Keaton and Charlie Chaplin. American cinema fascinated him because it had created a unique language. In the mood to do“whatever necessary”,he teamed up with the photographer and artist Alexander Rodchenko and they pioneered a new kind of graphic art and a maverick form of branding the communist message. Their emblematic work is even mimicked today. Rodchenko’s brooding photos of Mayakovsky are among the most iconic of the era, and a striking visual testament to Mayakovsky’s magnetism. In 1923, Mayakovsky and

His last plays, The Bedbug and The Bathhouse, had been total failures. And on April 9, 1930, at a meeting with university students, he had been booed and rudely attacked.

Osip Brik founded LEF, the magazine of the movement Left Front of the Arts. Mayakovsky still had time to devote to his poetry. He became a catalyst of the artistic avant-garde, and a multidisciplinary artist before the concept was even invented. In 1925, he published his famous poem Vladimir Ilyich Lenin, to commemorate the death of the leader. From July to October of that year, he toured Europe, Mexico, Cuba and the US. His experiences were collected in My Discovery of America, which includes his famous poem Brooklyn Bridge. The news of poet Sergei Esenin’s death affected him deeply. On December 27, 1925, Esenin slit his wrists and, with his own blood, wrote a

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On April 14, 1930, Mayakovsky was found dead. It is said he shot himself. Two days earlier he wrote a note that read: “As they say/the incident is closed/The love boat/ wrecked by daily life.”

poem that concluded:“There’s nothing new in dying now/ Though living is no newer.” Mayakovsky had had his ups and downs with Esenin but he admired him. In his requiem poem, To Sergei Esenin, Mayakovsky replied to him:“It’s not difficult to die./ To make a life/Is more difficult by far.” Paradoxically, it seems that Mayakovsky chose the same path five years later. The official story is that he committed suicide following the breakdown of a love affair. And with his history of suicidal threats, this seems likely. However, it has also been rumoured that the secret service killed him because of the increasingly nonconformist nature of his writing.

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RUSSIAN SOCCER TALENT VIES FOR SUCCESS rbth.com/36847

Soccer For the first time in 12 years, the national football team is competing in the World Cup finals

Russia's return to the finals built on coach's toughness In Russia, Italy is not traditionally associated with punctuality and discipline. But as the Russian national football team takes part in its first World Cup in 12 years, the new Italian coach, Fabio Capello, has managed to challenge the stereotype. Compared to his Dutch predecessors – the good-natured Guus Hiddink, who was said to have been over-indulgent with the players, and the surly Dick Advocaat, who seemed more interested in his bank account than actually training the team – Capello appears almost a tyrant. And while the Dutch coaches only came to Russia for short visits, Capello has so far managed to attend three to four matches in each round of the Russian championships. Within a short time of taking up the coaching position, Capello started to rebuild the team. First, players formerly seen as indispensable were struck off, including Andrei Arshavi, Roman Pavlyuchenko and Pavel Pogrebnyak. New players brought in included Alexei Kozlov and Andrei Eshenko. Capello is taking players to Brazil who not long ago may not have even dreamed about being in the national team: Victor Fayzulin and Dmitri Kombarov have become key players for him. Capello’s tough approach made it clear to the players that they needed to work hard consistently and that no one was automatically guaranteed a spot in the line-up. He has also imposed stricter rules on the team: players

"The team has become more solid and cohesive." – former head coach Valery Gazaev "We're taking part in the World Cup after a long break." – Russian team coach Fabio Capello Capello has brought to the team,”he said.“We’ve started to play better defence, although some of our defenders, because of their age, sometimes can’t keep pace with the fast players of our opposing teams.” Semin’s complaint about speed is likely aimed at the central defenders. Sergei Ignashevich will soon celebrate his 35th birthday, while Vasili Berezutski will turn 32 this month. Despite the age of the players, Capello has not been able to replace them. In contrast, there is plenty of choice when it comes to players for midfield and the flanks, where two or three players are competing for each spot. The whole game of the Rus-

Before the 1970 World Cup, there was no such thing as substitutions. The starting teams had to play the whole 90 minutes and, if necessary, extra time. The first player subbed out in the history of the World Cup was the USSR’s Viktor Serebryannikov.

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sian team is built on quality midfield play. However, there are concerns when it comes to the attack. Scoring goals in Brazil will be the task of the best striker in Russia today – Alexander Kerzhakov. He is the only team member with experience of playing in a world championship, back in 2002 in Japan. But today, Kerzhakov belongs to the veterans’ group, and at his club, St Petersburg’s Zenit, he spends most of his time warming the bench. Another possible attacker is the Dynamo player Alexander Kokorin, who has talent but not much experience. Kokorin also is not known for consistency. It is in attack that the Russian team will be most vulnerable. Although they recognise that the Russian team isn’t a favourite in this tournament, commentators in Russia are predicting that the team’s performance in their group is likely to be strong, especially since they will be playing teams that are not considered to be in the first rank (South Korea, Belgium and Algeria). “Making it through the group round may not be guaranteed, but it will not be a surprise if it happens,” said Vyacheslav Koloskov, honorary president of the Russian Football Union. “I’m convinced that we’ll make it into the playoffs.” Vladimir Stognienko, a well-known television commentator who will be broadcasting Russia’s matches in Brazil, agrees with him: “I’m convinced that we’ll be in the last 16. Then, if we manage to avoid playing the Germans, I’m sure that we’ll go on and on, although, in principle, just making it past the group round will be a great achieve-

At the 1990 World Cup, in Italy, a team from Africa reached the quarter-finals for the first time. Cameroon, the “Indomitable Lions”, were led by Valery Nepomnyashchy.

At the 1994 World Cup in the US, the Russian team's Oleg Salenko managed an incredible feat, scoring five goals in one match – a first in World Cup history.

4  REUTERS

ILYA ZUBKO

must comply with their training schedule, staff must be disciplined and journalists are not allowed to bother players unless it is an official media event. Commentators are saying that the Russian team has really benefitted from Capello's fresh approach. “The team has become more solid and cohesive,”said former head coach Valery Gazzaev. Yuri Semin, another trainer who at one time also worked with the Russian national team, agrees.“I would like to note the unity which

The 1970 World Cup in Mexico saw the first use of red (sending off) and yellow (caution) cards by the referees. They were introduced to avoid language difficulties in international tournaments and are now universal in many others sports. The Soviet Union's Yevgeny Lovchev received the first warning in the history of the World Cup.

THE ODDS

What chance for Russia?

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Italian football coach Fabio Capello has taken a tough approach to overhauling Russia's national team, and Russian fans approve.

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Coach Fabio Capello has revitalised the national team by bringing in many new young players.

ment for us, since in 1986 we didn’t succeed in even doing that. “Generally, my optimism is based on the coach. Capello isn’t perfect, but he’s the strongest part of our team.” However, Capello himself

is not in a hurry to make any dramatic statements. “We’re taking part in the World Cup after a long break, and this tournament is completely different from any other,” he said. “First, we’re preparing for the group stage.

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According to the influential bookmaker William Hill, the Russian national team is not among the favourites for the World Cup. The Russian team is ranked in 14th place, and the odds on offer for a victory for the Russian team are 81 to 1. The bookmaker is predicting Capello's team will make it past the group stage though, quoting the chances of that as 1.44 to 1.

If we can get through that, it’s quite probable that in the 1/8 finals we’ll play against Germany or Portugal. “However, we’ll think about that later. Let’s not hurry, but go one step at a time.”

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RBTH Australia issue (June 2014)  

Russia Beyond the Headlines issue, distributed with The Age and The Sydney Morning Herald on June 12.

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