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A negative outlook for the Russian economy in 2015

Hermitage turns 250

ALEXANDR PETROSIAN

Officials predict the economy will go into recession early next year P.03

Russia’s best-known art museum celebrates an important milestone P.04-05

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The New York Times Wednesday, December 17, 2014

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Foreign policy Politicians divided over prospects of a long-term downturn in U.S.-Russia relations

NEWS IN BRIEF

No Clear Way Forward

Russian Public Divided Over International Isolation

A quarter century after the end of the Cold War, experts say today’s tensions between Russia and the U.S. are not the same, but nevertheless show that the countries remain poles apart.

A late November poll by the analytical Levada Center showed that nearly half (47 percent) of all Russians feel isolated from the international community. Forty-five percent of respondents said that they did not feel Russia was isolated. Eight percent did not know. Sixty-three percent of those who said that Russia was isolated were concerned about the situation, whereas 35 percent did not find this isolation troubling. The poll surveyed 1,600 respondents in 134 cities across Russia.

ANDREI ILYASHENKO SPECIAL TO RBTH

Google to Close Engineering Operations in Russia Google has made the decision to shut down its engineering office in Russia following the passage of a law requiring Internet companies to store personal data of users in the country. Google employs about 50 programmers in Russia, most of whom work in Moscow. The company has said that it will offer them positions in other Google offices. The company also said it may retain some employees in Russia to handle local sales, marketing and user services. Despite the office closure, Google intends to increase investment in Russia next year, according to Bloomberg. “We remain committed to our Russian users,” Bloomberg quoted a Google representative as saying. REUTERS

“I’m not ready to say whether this is a new edition of the Cold War or how long this period will last,” said Russian Deputy Foreign Minister Sergei Ryabkov, one of the architects of the Russia’s U.S. policy, during hearings before the State Duma on Dec. 8. entitled “Russia-U.S.: Temporary FlareUp or a New Cold War?” But, Ryabkov warned, “it will take many years to emerge from the situation with the American sanctions.” The deputy foreign minister, a career diplomat, seemed to be trying to avoid overusing the term “Cold War,” which has military connotations — especially since the current geopolitical standoff doesn’t involve the buildup of weapons that accompanied the original Cold War, at least not yet. Sergei Rogov, the director of the Institute for U.S. and Canada Studies at the Russian Academy of Sciences is equally pessmistic about the future of U.S.-Russian relations as Ryabkov, although he pointed out a few important differences between the Cold War era and today. “A situation has arisen that could give rise to a Cold War. Right now it’s just cold peace,” he said at a meeting of the presidium of the Russian Academy of Sciences. “But there can’t be a literal repeat of the Cold War. This isn’t a collision between two systems; there is no socialist camp. There is no bipolarity, either,” he said. Leonid Kalashnikov, the First Deputy Chairman of the State Duma Committee on International Affairs, said that while the current standoff does not involve a confrontation of different economic and political systems, there are serious differences of opinion

Mariinsky to Perform at BAM between the U.S. and Russia that could lead to a new Cold War. According to Kalashnikov, the current problems are rooted in contradictory assessments of the role the U.S. should play on the world stage, as well as the commitment to liberalism in the U.S. and the conservatism in Russia — not so much in economic terms as in terms of values.“The world has become less stable than it was during the Cold War,” Kalashnikov added.

The American perspective American officials seem to be slightly more optimistic than their Russian counterparts. In his first interview with the Russian press since becoming U.S. ambassador to Russia, John Tefft promoted ways the U.S. and Russia could work together. “Many things in our bilateral relations continue to develop. Ongoing contacts

between people. I would like to extend these contacts and cultural ties, I hope that this will help improve relations,” Tefft said in the interview with Russian daily Kommersant. “We have collaborated in the Middle East — in the fight against the Islamic State in Syria. In my opinion, the joint efforts of our two countries in this field can give amazing results that would meet the interests of both sides.” Additionally, on Dec. 11, U.S. President Barack Obama said that the U.S. was not inclined to enact more unilateral sanctions against Russia. The U.S. Congress, however, does not share the president’s view. On Dec. 13, both houses passed a bill approving military assistance to Ukraine and the imposition of additional sanctions against Russia. The bill moved to the President Obama’s desk, and advisors said he was

considering the measure. Russiawatchers expect the new, Republican-led Congress, which will convene in January, to be even more critical of Russia. For his part, Deputy Foreign Minister Ryabkov said he wasn’t closing the door on working with the U.S. just yet. “We’ll do everything we can to stabilize relations with the U.S. and find a reasonable, durable basis for them,”he said, but added“I won’t rule anything out. Things could get even more complicated.” Ambassador Tefft said in his interview that he was taking the long view. “Throughout my career I have repeatedly witnessed highs and lows in our relations,” Tefft said. “There were also historical moments… I am aware that in such long and complicated relations as the dialogue between the U.S. and Russia, turbulence is inevitable.”

U.S. President Barack Obama and Russian President Vladimir Putin, shown here at November’s APEC summit in Beijing, are carefully watching each other’s reaction to the crisis in Ukraine.

PRESS-PHOTO

The Brooklyn Academy of Music (BAM) is partnering with the Mariinsky Theater for a 10-day residency, from Jan. 14–25. The St. Petersburgbased company will perform Rodion Shchedrin’s rarely seen opera “The Enchanted Wanderer” in its U.S. premiere and present nine ballets, including “Swan Lake” and Alexei Ratmansky’s “Cinderella.” Diana Vishneva as Cinderella in the Jan. 17 performance. The orchestra will be under the baton of Mariisnky artistic director Valery Gergiev.

ONLY AT RBTH.COM Politics Opposition loses momentum

Economic Concerns Dampen Activism YEVGENY LEVKOVICH, ILYA KROL SPECIAL TO RBTH

Three years ago, Russia witnessed its largest antigovernment protests since the early 1990s. There were four mass demonstrations in a month protesting fraud in the December 2011 State Duma elections, the largest of which drew 150,000 people to the streets of Moscow, according to the organizers. Today, opposition rallies struggle to attract 10,000. Looking back at the protests, organizer and former deputy prime minister Boris Nemtsov said: “There were many reasons to take to the streets. Not a

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single opposition party had been permitted to take part in the elections. We did not expect so many people to turn out. To be honest, we were quite unprepared for that.” The first protest, on Dec. 5, protest marked the birth of a new opposition coalition that included liberals and nationalists. It concluded with an improvised attempt to walk to the Kremlin, which was violently broken up by the police. There were more than 300 arrests. The next day, Interior Ministry troops were called into Moscow. Ordinary people saw the move as aggressive and it provoked even more discontent. A demonstration held the following weekend drew 100,000 people, according to Novaya Gazeta, to the city center’s Bolotna-

A demonstration held on Dec. 10, 2011, drew thousands of people to central Moscow’s Bolotnaya Square. Today political activism is trumped by concerns over the economy.

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Changes to Migration Regulations Aim to Legalize Shadow Workers

RIDUS / TASS

This month marks the third anniversary of Russia’s largest antigovernment protests in decades, but the political opposition has since lost steam.

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ya Square. But the first divisions within the protest movement leaders were already emerging.There was no common vision on the next steps. “Democrats had tried to unite before, in 2003, but it was shameful and did not work. There’s long been division within the nationalists and half of their leaders are suspected of working with the F.S.B. or presidential administration,”said journalist Andrei Kozenko. After the Bolotnaya protest, Eduard Limonov’s Other Russia party decided to leave the coalition. Radical nationalists soon followed, saying they had been

denied a voice. Nevertheless, the opposition increased the pace of its activities and began calling protests several times a month, organizing concerts or excursions along Moscow’s Boulevard Ring with well-known Russian writers and actors, or arranging antiPutin car races on the city’s inner Garden Ring road. The biggest demonstration was held on Dec. 24, 2011, on Sakharov Prospect, but the opposition had reached a peak. Most people ordinary Muscovites wanted more than criticism. CONTINUED ON PAGE 2

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Politics & Society

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Society Has anti-Americanism in Russia really reached a post–Cold War high?

Family Marriage? No thanks, I’m too busy

A War of Words in U.S.-Russia Relations

Young Russians Are Delaying Tying the Knot

Russian attitudes towards the United States over time

In a major change from earlier eras, Russians today are marrying at a later age in order to focus on their careers and personal fulfillment. DARYA LYUBINSKAYA RBTH

NATALIA MIKHAYLENKO

The press has hyped poll numbers showing an increase in anti-Americanism in Russia, but experts argue that the numbers need context. PAVEL KOSHKIN ZURAB DZHAVAKHADZE/TASS

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A popular T-shirt sold in central Moscow features a man in a martial arts costume resembling Russian president and known judo enthusiastVladimir Putin knocking down his opponent, a clear stand-in for U.S. President Barack Obama, with a firm kick. Kiosks selling T-shirts such as this one alongside others with slogans like “My Iskanders think your sanctions are funny,” began popping up in March, just after the conflict in Ukraine began to heat up. Less than a year ago, seeing people on the streets of the Russian capital in such attire would have been very unusual. According to a poll on U.S.Russian relations conducted by the Public Opinion Foundation (F.O.M.) in February, only 18 percent of Russians viewed the U.S. negatively. Today the situation has changed, and the attitude of Russians towards the U.S. is indicated by more than fashion choices. A Nov. 16 poll by F.O.M. showed that 37 percent of respondents have a negative attitude towards the U.S.

Popular T-shirts feature slogans making fun of U.S. sanctions.

A great deal of attention is focused on the 37 percent of respondents who hold unfavorable attitudes about the U.S., not on the 62 percent who say both U.S. and Russia need to improve their bilateral relations. It’s important to remember that polls are simply a snapshot of a particular moment in time.

Reality or hype? The situation may not be as bad as it seems at first glance, however. Media reports about these

READ THE LATEST UPDATES ON THE CRISIS IN UKRAINE at rbth.com/ukraine

polls tend to highlight the headline-making negative numbers while failing to give sufficient space to the more positive responses. In the Nov. 16 poll, for example, 62 percent of respondents said bilateral relations between the U.S. and Russia need to improve, while 50 percent agreed with the statement that the Kremlin “should aim to improve its relations with the U.S.” David Foglesong, a professor of history at Rutgers University and an expert in U.S.-Russia reactions, said that journalists“have hyped the recent deterioration of U.S.Russian relations, particularly by comparing it to the Cold War.”According to Fogelsong, such comparisons are reckless and “inappropriate,”primarily because the Kremlin doesn’t claim “to offer the world a model of political and economic development that rivals American liberal capitalism.” Andrei Tsygankov, a professor of International Relations and Political Science at San Francisco State University, also lays the blame for the negative numbers at the feet of the press.“Media on both sides follow the state line with vigor,”Tsygankov said, adding that the press is responsible for “hyping up the U.S.-Russia disagreements.” While the American media spread stereotypes of “revisionist”Russia, their Russian counterparts describe the U.S.“as the epitome of all geopolitical and cultural problems in the world,” Tsygankov said. Victoria Zhuravleva, a professor of American history and the director of the American Studies Program at the Russian State University for the Humanities, said that American coverage of Russia feeds into the negative coverage of the United States by the Russian press. “American cartoonists, journalists and politicians often represent a value-based approach to the image of Russia,”Zhuravleva said.“Russia, in its turn, uses this American approach to foster anti-American sentiments through the state-controlled mass media in order to shape the image of a hostile American ‘other’ and to maintain its besieged fortress mentality.”

Historical context In the view of experts on both sides of the Atlantic, it’s also important to remember that polls are simply a snapshot of a particular moment in time. Gregory Feifer, a former NPR correspondent in Moscow, argues that Russia has a love-hate relationship with the U.S. that has ebbed and flowed over the years, and that Russian authorities play upon popular feelings of envy toward the West in public statements and through manipula-

RUSSIA BEYOND THE HEADLINES IS AN INTERNATIONAL MEDIA PROJECT SPONSORED BY RUSSIAN DAILY NEWSPAPER ROSSIYSKAYA GAZETA. ITS PRODUCTION DOES NOT INVOLVE THE REPORTING OR EDITING STAFF OF THE NEW YORK TIMES. RBTH IS FUNDED THROUGH A COMBINATION OF ADVERTISING AND SPONSORSHIP TOGETHER WITH SUBSIDIES FROM RUSSIAN GOVERNMENT AGENCIES. RBTH’S EDITORIAL VOICE IS INDEPENDENT. ITS OBJECTIVE IS TO PRESENT, THROUGH QUALITY CONTENT, A RANGE OF PERSPECTIVES ABOUT RUSSIA AND RUSSIA’S PLACE IN THE WORLD. PUBLISHED SINCE 2007, RBTH IS COMMITTED TO MAINTAINING

tion of the state-owned domestic media. “When Putin calls Washington a threat to global stability, many profess to agree whether they really believe it or not,”Feifer said. “The Public Opinion Foundation poll, if accurate, appears to reinforce that view.” Ivan Kurilla, a former Kennan Institute fellow and professor at Volgograd State University, argues that from a historical point of view, U.S.-Russian relations today are just in “one of the recurrent periods of hostility that were always replaced by periods of rapprochement, and from this point of view the situation is not as catastrophic as some journalists paint it.” He added, however, that in his opinion, the recent poll results released by F.O.M. were not overly dramatized, “as the anti-Americanism in Russia is high indeed.” Robert Legvold, professor emeritus in the department of political science at Columbia University, agrees that even though historically Russians have had shifting views of the U. S., today “the depth of animosity toward the U.S. both in the media and among the public is deeper than any time I remember in years.” Foglesong believes that the current rise of anti-Americanism in Russia is more serious than earlier ones because it is the result of concrete actions.“[Anti-Americanism] stems in large part from a series of actions by the U.S.,” Fogelsong said, citing such events as NATO’s eastward expansion, the bombing of Kosovo in 1999 and support for Georgia in the 2008 Five Day War between Russia and Georgia. “I believe that series of actions has made a deep and lasting impression on many Russians,” Foglesong said. Likewise, Ivan Tsvetkov, an associate professor at the School of International Relations at St. Petersburg State University, believes that although Russians’ attitude to the U.S. has fluctuated in recent years,the current spike in anti-Americanism in Russia is linked to specific events and therefore may last “until the factors that caused it are eliminated.” Gregory Feifer is not so pessimistic in his assessment of the situation, however. Reflecting on his time as a reporter in Moscow, Feifer said: “When I spoke to Muscovites during Barack Obama’s first trip to Russia as president in 2009, I was surprised to hear a great majority say they admired him and believed his presidency would help restore relations with the United States,” he said.“That wasn’t very long after the war with Georgia, when many were saying very nasty things about America and its leaders.”

Statistics show that Russians are getting married later and later, with both men and women increasingly postponing tying the knot in favor of developing themselves professionally and following their dreams. According to the Federal State Statistics Service (Rosstat), in 2013, for the first time in 50 years, the majority of newlyweds were aged 25 or older. The number of men in particular getting married between the ages of 18–24 has plummeted since 1980. That year, slightly more than 900,000 marriages registered involved a groom aged 18– 24, while by 2013 that number had fallen to just over 300,000. Among women in the same age group, more than a million marriages were registered in 1980 and just over 460,000 in 2013. Although the number of Russians choosing to marry later has been growing steadily since 1980, it was the 20-year period between 1980 and 2000 that saw the most dramatic changes. During this time frame, the number of women between 18–24 tying the knot fell by half. These numbers indicate that the trend toward postponing marriage began before the fall of the Soviet Union. Since 2000, however, the trend has accelerated. The number of men marrying in the 18–24 age range has fallen by a further 25 percent, while the number of brides in the same category declined by an additional 10 percent.

Changes in cultural norms The decline in the number of young marriages is a natural reflection of ongoing processes in Russian society, according to psychologist Natalya Trofimova.“The public mindset has changed regarding civil marriages, which became a completely acceptable norm in our time,” she said. Young people, particularly those who live in big cities, don’t think it necessary to officially register their relationships, but choose rather to simply live together. According to Trofimova, motives for getting married usually include love, children, stability, social status and independence from one’s parents. “Modern young people can accomplish almost all of that without entering into an official marriage,” she said. Additionally, the premium placed on having a successful career has risen, and many young people want to enjoy their freedom and discover themselves be-

fore settling down,Trofimova said. Family psychologist Maria Romantseva thinks socio-economic and socio-psychological factors also have an important role to play in this trend, as they incentivize higher education and career growth. “If you don’t have a higher education, there’s no normal opportunity to get a start in life. Since the time it takes to get an education has increased, it has pushed back the marriage age,” Romantseva said. Liana Shakirova met her fiancé when they were students,“but we decided to wait to get married until we finished studying,” she said. Shakirova plans to finish her master’s degree abroad, which also factored into her decision to delay marriage. “We didn’t see the point in getting married and living a year apart,” she said. “Full-time studies and a family aren’t very compatible.” According to Romantseva, the ability to support a family and children independently is an important factor in deciding to get married today. “In the Soviet Union, people were willing to live with their parents for some time, while the current generation is more oriented towards earning it own livelihood,” she said. Anna Varga, the director of a master’s program in Systemic Family Psychotherapy at the Higher School of Economics in Moscow, agrees with these ideas. “People have a clear understanding of how they would like to live and how they could live, and that often isn’t consistent with the idea of marriage. Career-building often implies a certain way of life that is incompatible with a family and children,” Varga said.

Changes in age at first marriage

NATALIA MIKHAYLENKO

Read the full story at rbth.com/41673

Economic Concerns Dampen Activism CONTINUED FROM PAGE 1

They wanted to hear constructive ideas for improving the country and its political system. Whether the opposition actually had such plans is unclear, but nothing was ever made public. “We realized that going on these marches was actually useless, even unfashionable,” said Nikita Denisov, 33, who took part in protests in St. Petersburg in December 2011. The turning point came on May 6, 2012, on the eve of Putin’s inauguration for his third presidential term. Gathering again at Bolotnaya, the opposition only marshaled 20,000 people. Three years later, Russian society’s concerns are less political and more economic. “We could see mass protests in the next two years, inspired by

not political, but social and economic factors,” said Vladimir Ryzhkov, a historian, liberal politician and co-chair of the political party RPR-Parnas. Georgy Chizhov, the vice president of one of Russia’s oldest independent think-tanks, Moscow’s Center for Political Technologies, agrees that economic issues will dominate but doubts that major unrest is in the cards.“It is difficult to imagine a repetition of Bolotnaya in the near future,” he said, adding,“The Kremlin’s rhetoric has changed, people in Russia are now divided between ‘us’ and ‘national traitors.’ In such a situation liberals cannot protest, or they would be going against most of society.” Read the full story at rbth.com/42239

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Economy Falling oil prices coupled with Western sanctions are taking their toll on Russia’s economic sector

Officials Predict Recession in 2015 DAVID MILLER SPECIAL TO RBTH

Economists within the Russian government and the World Bank predict that Russia will enter recession in 2015, as historic declines in the price of oil and stubbornly persistent inflation usher in the first contraction since 2009. The Russian economy has taken a beating in recent months as oil, the country’s main export and the source of roughly half of the government’s tax income, slid to five-year lows. Meanwhile, inflation reached 9.1 percent in November compared to a year earlier as a drop in the nation’s currency, the ruble, pushed up the price Russians must pay for imported goods. The nation’s economy will probably shrink about 0.8 percent in 2015, deputy economy minister AlexeiVedev said in early December, citing a ministry forecast. The ministry had previously predicted growth of about 1.2 percent next year. “Most macroeconomic indicators for the economy will worsen through the next three quarters and will look a whole lot worse by the time we get to next summer,”wrote Chris Weafer, a senior partner at the Moscow-based Macro Advisory and a long-time observer of Russia’s economy, in a note posted on the firm’s Web site. “Where there can be more of a debate is about whether there will be meaningful recovery from next autumn.”

barrel or less, the Finance Ministry estimates, according to a statement posted on the ministry’s website by the director of the long-term strategic planning department, Maxim Oreshkin, on Dec. 2. Crude oil sank below $70 per barrel in early December for the first time since 2010 as the Organization of Petroleum Exporting Countries decided not to reduce output, and shale-oil production in the U.S. continued to rise. Oil prices continued to fall throughout the month. Russia, currently the world’s biggest energy exporter, is pumping crude at near-record levels of more than 10 million barrels a day. Oil and natural gas accounted for 68 percent of Russia’s total exports in 2013, according to the U.S. Energy Information Agency.

Rising prices Inflation may reach 9.8 percent year-on-year in 2014 and peak at “double-digit growth”in the first

IN FIGURES

quarter of 2015, Moscow-based brokerage UralSib predicted. Inflation will spike following the sharp decline of the ruble “because normally prices grow for 3–4 months after an exchange rate shock,” UralSib analysts Alexei Devyatov and Olga Sterina wrote in a note to investors on Dec. 5. The ruble has lost more than a third of its value against the dollar this year, shrinking Russians’ purchasing power. But the falling ruble has also relieved some of the pain of lower oil prices, giving Russian energy firms and the government extra rubles for every dollar’s worth of foreign oil sales.

Searching for growth GETTY IMAGES/FOTOBANK

Russia is expected to enter a recession next year for the first time since the global financial crisis in 2009 as the ruble and oil prices continue to fall.

The course of the ruble against the dollar since January

9.1%

was the inflation rate in Russia in November, as the falling ruble pushed up the price Russians must pay for imported goods.

0.8%

is how much Russia’s Finance Ministry expects the economy to contract in 2015, but only if oil prices average $80 a barrel.

Oil and recession

$59

NATALIA MIKHAYLENKO

Russia’s Finance Ministry said it tentatively supported the forecast for a 0.8 percent decline in 2015 — but only on the assumption that oil prices average about $80 a barrel. The contraction may accelerate to 3.5 percent or 4 percent if the price of oil averages $60 a

was the price of crude oil on Dec. 12, and the price was expected to continue to fall.

In a feisty state-of-the-nation speech on Dec. 4, Putin acknowledged the challenges facing the economy, and offered a raft of measures in response. He pledged to reduce intrusive government inspections on small businesses, establish two-year tax holidays for new small businesses and initiate a full amnesty for Russians who return capital to the country from abroad. “The period ahead will be complex and difficult,”Putin said.“We must escape the trap of zero-level growth and achieve an aboveaverage global growth rate within the next three to four years.” Putin charged officials to work to deter currency speculators from driving down the ruble. “I’d like to ask the Bank of Russia and the government to carry out tough and concerted actions to discourage the so-called speculators from playing on fluctuations of the Russian currency,” Putin said.“The authorities know who these speculators are. We have the proper instruments of influence, and the time is ripe to use them.” However, Putin also noted that a weaker ruble would also help make Russian goods more competitive, and called on Russian producers to use the opportunity to seize market share from foreign competitors over the next few years.

Consumerism According to public surveys, residents of Russia are now allocating most of their income to food purchases

Russians remain attached to the ruble even as the weakening currency forces them to limit discretionary spending and spend more on essential items. ALEXEI LOSSAN RBTH

The fall of the ruble is leading to a reduction of the population’s purchasing power, according to the Russian Ministry of Economic Development. In the last two months the ruble has lost almost 50 percent of its value against the U.S. dollar. As a result, according to the ministry, the number of people living in poverty will reach a four-year high of 11.7 percent in 2014. “With the weakening of the ruble, many people are trying to protect themselves from the devaluation of the currency by buying rather expensive durable goods, especially if they have no Russian equivalents,”said Alexei Kozlov, chief analyst at investment company UFS.“Thus we are witnessing a growth of purchasing activity.” However, according to Kozlov, this spending pattern is a temporary phenomenon, and the weakening of the ruble has a whole range of more lasting neg-

ative consequences, such as the growth of inflation, the contraction of the consumer market and an increase in the credit rate, which can lead to the deceleration of economic growth. Surveys show that Russians are already spending most of their money on food and limiting their travel to within the country.

Despite the fall of the ruble, the population prefers to keep its savings in the local currency. Feeling the pain “The consumer sector is under a lot of pressure and the standard of living is decreasing,”said Finam Management analyst Maxim Klyagin. “Consumers have reduced their spending on capital purchases, such as apartments, cars, and also on nonessential goods and services.” According to the Russian Federal State Statistics Service (Rosstat), results from the first half of 2014 show that the yearon-year dynamics of retail sales overall have fallen from 3.9 to 2.7 percent.The retail sector has post-

ed limited, but steady, growth since 2009. Delays on credit payments have also gone up in recent months. According to data published by the Central Bank on Dec. 3, as of Nov. 1, the share of 90-day delays on credit payments reached 7.9 percent. The last time a similar indicator was registered was Feb. 1, 2011. The bank’s official announcement says that the growth in arrears is a result of the deterioration of the population’s financial situation. The most likely reasons for defaults are delays in salary payment, a decrease in income and the loss of a job. Most Russians hold loans in rubles, so the decreasing currency shouldn’t be a contributing factor. According to Fitch Ratings, at the end of September, only 17 percent of all bank credits were in foreign currencies and almost all were corporate accounts.

Falling ruble, growing fears? Despite the fall of the ruble, Russians still prefer to keep their savings in the national currency. According to a survey conducted by the All-Russian Center of Public Opinion (VTsIOM), 53 percent of Russians are worried about the

IN THEIR OWN WORDS

Maxim Klyagin INVESTMENT ADVISOR, ANALYST FINAM MANAGEMENT

"

The consumer sector is under a lot of pressure and the standard of living is decreasing. Consumers have reduced their spending on capital purchases, such as apartments, cars, but also on nonessential goods and services.”

Alexei Kozlov CHIEF ANALYST AT UFS INVESTMENT COMPANY

"

With the weakening of the ruble many people are trying to protect themselves from the devaluation of the currency by buying rather expensive durable goods, especially if they are expensive and have no Russian equivalents. Thus we are witnessing a growth of purchasing activity, which won’t last long however.”

© VLADIMIR ASTAPKOVICH / RIA NOVOSTI

Russians Spending More on Food and Durable Goods

Analytics from VTB Capital show that the amount Russians spend on food will increase in the near future from 31 to 40 percent.

weakening of the ruble. However, only seven percent of Russians have exchanged rubles for foreign currencies in the last two months. Dmitry Bedenkov, director of the analytical department at Russ-Invest, said that “trust in the national currency is an important element in the investment process, which stabilizes the economy and guarantees a normal production cycle and the functioning of market mechanisms.”

Changes in spending According to a study from the Levada Center, 80 percent of Russians said that prices in the country are growing while the standard of living is falling.Those who participated in the study named the fall of oil prices as the main reason for the problems in the

economy (45 percent), followed by Western sanctions against Russia (33 percent) and the annexation of Crimea (30 percent). Romir, the largest private independent research firm in Russia, recently released a study showing that the share of respondents who are restricting their purchases has increased from 8 to 20 percent. Moreover, one out of three households is being forced to re-allocate budget funds to food and essential items. Analytics from the bank VTB Capital show that the amount Russians spend on food is likely to rise from 31 to 40 percent. Meanwhile, according to data from the Federal Tourism Agency, the number of Russians choosing to spend their vacations within the country due to the sanctions and the fall of the ruble has already increased by 30 percent.

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Cinema The St. Petersburg must-see celebrates its 250th anniversary with a new documentary

ALEXANDR PETROSIAN

The Hermitage museum complex consist of seven buildings, including the pale-green Winter Palace.

Museum Secrets Revealed on Screen SPECIAL TO RBTH

“It’s a unique situation,” said director Margy Kinmouth, who became the first foreign filmmaker to film inside the Hermitage Museum for her documentary“Hermitage Revealed.” “There’s nothing like it anywhere in the world.” U.K. native Kinmouth, whose previous work includes a documentary about the Mariinsky Theater, came at the invitation of museum director Mikhail Piotrovsky. She was given complete access to the museum’s 2,000 rooms, including ones that most visitors never see, such as the costume department, where imperial gowns and liveries are repaired, and vast storage areas containing“millions and millions more objects,” she said. Filming lasted over two years. “It’s such an enormous place, and there’s so much choice in how you show the story,”Kinmouth added.

Imperial style The Hermitage collection began under Catherine II (the Great), who competed with European monarchs to assemble the world’s best art collection. She brought thousands of old masters to Rus-

Dark days In 1917, during the October Revolution, the Hermitage came under attack: viewers see slashed portraits of the tsars and smashed golden carriages that are now relegated to storage. In the 1930s, over the bitter protests of the museum’s director, Stalin sold off some of the museum’s most priceless treasures, including Raphael’s “Alba Madonna”, to fund the Soviet industrialization drive.The crew traveled to the U.S. to film these artworks where they are now kept, in Washington D.C.’s National Gallery. “We wanted people to fall in love with the artwork,” Mason said. “You have to luxuriate in them and feel an attachment to understand the loss that occurred when they were sold.” The fate of the Hermitage’s staff has always been tied up with the museum: at the height of Stalin’s terror, 45 employees were sent to the Gulag, and over 100 died during the siege of Leningrad (the art, meanwhile, was evacuated to the Urals). Today, this tradition of dedication continues. “There are so many women working there who carry on working there literally until their death,” Kinmouth said. “They don’t retire, they just carry on. They have such knowledge of the collection.” She notes that there is a “dynastic quality”to the Hermitage. Most curators are the descendants

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JOY NEUMEYER

sia, including works by Rembrandt, Rubens andVelázquez, as well as more personal purchases, including engraved gemstones and a porcelain dinner service for her lover Prince Grigory Potemkin. Catherine acquired“not only the best names, but also the best things from the best names,” Piotrovsky said in the film. Piotrovsky’s father Boris served as the Hermitage’s director from 1964 to 1990, and the young Piotrovsky spent much of his childhood there, taking his first steps in the museum. The film recreates how he would wander through the halls at night, going up to the roof and playing in the armory. The film’s editor, Gordon Mason, said these nighttime meanderings through the halls are some of his favorite moments in the film. Kinmouth “always tries to approach the subject from a different point of view,” he said.“It would have been easy to make a staid documentary about the museum, but I think we managed to create something more dynamic.” The film’s crew became familiar with the ins and outs of daily life at the museum. Every Monday, when the Hermitage is closed, artists come to copy its masterpieces. “With some people, we would go back and after a year they were copying the same Rubens,” Kinmouth said.

The documentary marks the first time that a foreign director has been allowed to film in the Hermitage.

A Russian view of the Hermitage on film

of previous generations of staff; when they die, their funerals are held in the museum. The crew witnessed one such funeral.

Lighting challenge

KINOPOISK.RU

A new feature-length documentary film, “Hermitage Revealed,” immerses viewers in the dramatic history of the iconic museum.

In 2002 Russian film director Alexander Sokurov released “Russian Ark,” a feature filmed entirely in the Winter Palace, using a single 96-minute Steadicam sequence shot. In the film, which debuted at the 2002 Cannes Film Festival, an unnamed narrator wanders

through the palace. In each room, he encounters various people — both real and fictional from a mix of periods in St. Petersburg’s 300-year history. The film shows 33 rooms of the museum, which are filled with a cast of over 2,000 actors and three orchestras.

While the Winter Palace’s massive rooms, antique chandeliers and windows overlooking the river are beloved by visitors, they create some difficulties for filming. According to director of photography Maxim Tarasyugin, the main technical challenge of working in the Hermitage is the mixed light.“The light coming through the window has one color temperature, while that of the lamps in the Hermitage varies from room to room and even within the same hall, where there are different chandeliers,”he said.“It’s a bit of a struggle.” While the film’s primary focus is historical, viewers get close to some of the finest artworks in the Hermitage’s three million–piece collection.“I think what’s amazing about film,” Kinmouth said, “is that you can take things that don’t leave Russia, and show them to the world.”

Cooperation The museum has worked with several American organizations

Hermitage Support In New York Cooperation between the Hermitage and American museums, foundations and individuals has gone on despite geopolitical tensions between the U.S. and Russia. IVAN SAVVINE SPECIAL TO RBTH

4

FAMOUS AMERICAN EXHIBITS HOSTED BY THE HERMITAGE

the Classical Tradition.”The show explored the dialogue between Robert Mapplethorpe’s photography and 16th-Century Flemish Mannerism. As the U.S. and Russia have entered a new stage of confrontation, artistic cooperation has been affected as well. Hermitage Director Mikhail Piotrovsky said in November that he is afraid to send works to the U.S. right now because their security cannot be guaranteed. However, there is some reason to hope. This fall, American art collector Helen Drutt English gave the Hermitage a collection of 74 pieces of modern art worth roughly $2 million.

The Hermitage Museum Foundation, based in NewYork, is also stepping up its efforts in cultural diplomacy amidst the political crisis. Paul Rodzianko, the Foundation’s chairman, said that the foundation works to support the Hermitage in several ways. “Through our educational outreach efforts, we conduct tours to the museum and host activities related to the Russian culture in the U.S. We have also instituted our Art from America initiative, which has seen gifts of art and artifacts find their place in the museum’s collections.” Read the full story at rbth.com/42247

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INSTAGRAMMERS CAPTURE RUSSIA’S MOST FAMOUS MUSEUM WITHOUT THE View photos at rbth.com/41417 CROWDS

The Hermitage has long had connections to the United States. During the early years of the Soviet Union, the struggling young state sold off some of the Hermitage’s treasures, allowing several American collectors, including Andrew H. Mellon and J.P. Morgan to acquire the works of Italian painters and Dutch old masters. These pieces became the

cornerstones of the National Gallery in Washington, D.C., and the Metropolitan Museum of Art in New York. During the Cold War, the Hermitage was one of the few places in the Soviet Union that Russians could be exposed to art from the West. When the Soviet Union collapsed and the new Russian state opened itself to the rest of the world, the Hermitage was at the forefront of arranging artistic collaborations previously thought inconceivable. One example was an exhibition created jointly by the Hermitage and the Guggenheim museum in New York entitled“Robert Mapplethorpe and

Andy Warhol: Life and Creative Activities

USA Today: New American Art from The Saatchi In November 2000 the exhibition Gallery London This 2007–2008 exhibit was the of Warhol’s personal collection

Annie Leibovitz: A Photographer’s Life

The Red Wagon by Ilya and Emilia Kabakov

took place in Russia. The items were loaned from his museum in Pittsburg, Pa.

Opened in 2011, the exhibition brought together almost 100 iconic images of famous public figures together with Liebovitz’s personal photographs.

This installation was presented by Soviet-born American conceptual artist Ilya Kabakov to the Hermitage in 2011 and was displayed in 2013 in the General Staff Building.

start of the Hermitage 20/21 initiative, which brings modern art into the museum.


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History The art-adorned halls of one of the world’s greatest museums are also home to a pampered legion of feline guardians

A Cat’s-Eye View of the Hermitage Hallways Throughout the 250-year history of the Hermitage Museum, some of its most devoted servants have had a purr-fect view of the art collection.

QUESTIONS & ANSWERS

Behind the Scenes With the Cats

JOY NEUMEYER SPECIAL TO RBTH

In an interview with Elena Bobrova of RBTH, American writer Mary Ann Allin, the author of “Anna and the Hermitage Cats,” talks about the story behind the children’s book.

YURY MOLODKOVETS (3)

St. Petersburg’s Hermitage Museum is the treasure chest of Russia. Founded by Empress Catherine II (the Great), the pale-green palace on the bank of the Neva River contains one of the world’s most renowned art collections. But beneath its baroque grandeur lies a netherworld of heating ducts and storage rooms. Here, the walls are not covered with works by Rembrandt and Caravaggio, but cat photos. The cats’ story parallels that of the institution they have guarded for centuries, from splendor to poverty and back again.“It’s a true symbiosis of animal and human,”said Maria Haltunen, assistant to the museum’s director and the cats’ press secretary. Cats have resided in the Winter Palace since the time of Empress Elizaveta Petrovna. In 1747 she issued a decree arranging for a chauffeur to bring “house cats suitable for catching”to the Winter Palace — the building that today houses the Hermitage Museum. A carriage full of Russian Blue cats was quickly dispatched from the central Russian city of Kazan, about 600 miles east of Moscow, to the imperial residence in St. Petersburg. It was Elizaveta’s successor, Catherine, who transformed the palace into one of the world’s greatest art institutions. “Very early on, she realized that [art] was a status symbol among the rulers of Europe,” said Geraldine Norman, author of “The Hermitage: Biography of a Great Museum” and advisor to the Hermitage’s director. In all, Catherine acquired some 4,000 old master paintings and 10,000 engraved gems, which author Norman called her “great love.” “It was a love affair, but also state policy, and a very clever state policy,” Norman said. “She was competing with the French, the Germans, the English, and she was steadily outclassing them in her purchases of art.” The rising prestige of Catherine’s collection, which was opened to the public in 1852, was mirrored by the status accorded to its guardians. Under Catherine, the palace began making a distinction between house and court cats, which had free rein of the halls. Their work was more important than ever: in a letter, Catherine wrote: “There are few visitors to the galleries — only me and the mice.”

In 1917, the October Revolution drove Emperor Nicholas II from the Winter Palace. According to Haltunen, the last Romanov rulers had a soft spot for animals, owning several dogs and cats. While the dogs were shot alongside their owners, the cats were left behind at the palace. The Bolsheviks nationalized the Hermitage, beginning a traumatic period for the museum that lasted more than three decades as some of its paintings were sold off. Yet the worst was yet to come. During World War II, the 872-day siege of Leningrad resulted in the deaths of up to 1.5 million people. The Hermitage collection was evacuated to the Ural Mountains, leaving only empty frames. Mean-

while, the city starved.“All the animals in the city vanished, even the birds,” Haltunen said. “There was simply nothing to eat.” This was also the unfortunate fate of the Hermitage cats. The war years mark the only time in the Hermitage’s history when the cats have been absent from the museum. After the war, the Hermitage recruited new cats. In the early 1990s, the collapse of the Soviet Union left the Hermitage destitute. In the documentary “Hermitage Revealed,” museum director Mikhail Piotrovsky recalls that there wasn’t even enough money to repair the roof. In 1995, shortly after she began working at the museum, Haltunen walked down to the basement and

was shocked to see dozens of cats staring back at her. The cats, like their home, were in dire straights, hungry and neglected. Haltunen and a friend began bringing porridge down from the cafeteria to feed them. They started a “Ruble for a Cat”campaign to raise money for food and medical treatment, and won Piotrovsky’s support to devote an area of the basement to the cats’ care. Today, it is full of scratching posts, food bowls and blankets placed on heating pipes where the cats keep warm. For his video installation“Basement,” the Dutch artist Erik van Lieshout spent nine months living with the cats in the basement while it was being renovated.“The cats are the soul of the building,”

Lieshout said.“They are a subculture for me.” Though the cats no longer roam the halls as they did in Catherine’s day, the more sociable among them venture into the courtyards. They have their own “passports” and boast a dedicated legion of volunteers and veterinarians, as well as an annual holiday in their honor, when visitors line up for the chance to meet (and adopt) them. Now, they are less hunters than cultural ambassadors — or “spoiled house cats,”as Haltunen jokes — but their presence still deters mice. They remain a part of the Hermitage’s history, no less essential than its paintings or the halls of the Winter Palace.

When did you first visit the Hermitage? What were your first impressions of it? What about it captured your imagination? I first visited the State Hermitage Museum in 1984. My late husband was an American diplomat, and we lived in Leningrad for three years. I lived near the museum and was a frequent visitor. In all seven buildings of the Hermitage Museum complex one finds art in all genres, from all periods of time and all parts of the world. When did you first learn about the Hermitage cats? I discovered the Hermitage Cats in 2005 while visiting the museum with my granddaughter Anna. On the day Anna and I visited the museum, we were received by the director in his office. We asked about the cats because often one would encounter cats in the corridor near the director’s office. Then he said, “If Anna would like to meet the cats, I will call the Press Secretary to the Cats.” When [the director’s secretary] Maria Haltunen came in, I realized that she has another identity as Press Secretary to the Cats. On a private tour, Masha [Haltunen’s nickname] showed us the places where the cats live in the Winter Palace cellars and storage rooms. While you cannot see the cats every day, their life in the museum is not a secret. If anyone visits the museum on the annual Day of Cats in spring, the basement rooms are open. Children’s drawings are exhibited for the cats. Games are organized and prizes are awarded. Maria Haltunen organizes veterinary care and food for 70 cats that live in the basement and courtyards of the Winter Palace. Masha and her colleagues on the museum staff give their time and in many cases part of their salaries to the cats. They are protectors of animals as well as art. How long did it take you from developing the concept to publishing the book? The first edition appeared in 2007; it took two years to publish both Russian and English versions. Can you tell me in five words what the Hermitage is for you? A great museum in a great city. Read the full story at rbth.com/42251

INTERVIEW YURY MOLODKOVETS

WHAT DOES A RUSSIAN WINTER REALLY LOOK LIKE?

Long-time Hermitage photographer Yury Molodkovets, spoke with RBTH about the experience of wandering the halls of the museum at night and what he thinks of museum selfies. How long have you been working as the Hermitage photographer? How did you get this job? I’ve been working here for 20 years, which by museum standards is not that long. I got the job with the Hermitage almost by chance. In 1993-1994, in those turbulent times, I was close to underground culture. I was friends with and published a newspaper and books together with the St. Petersburg art group Mitki. And then suddenly I was invited to the Hermitage. At the time, of course, I had no understanding of what a museum is, I just said yes. Now I not so much know as I feel with every cell in my body that the Hermitage is not just a museum, but a whole universe. And I am very grateful for the chance that I took back then. What exhibitions devoted to the Hermitage have you done?

There was a project called “New Hermitage.”I took pictures of the Italian sculptures at the Main Staircase of the New Hermitage, which at the time were covered in plastic as the ceiling was being repainted. It was very unusual, and unexpectedly acquired a profound meaning: eternal marble covered in transient plastic, like a representation of our life and civilization. Another project was called“Seclusion: The Hermitage at Night.” I did it in 2005. Often, leaving work late at night, I used to walk through the empty halls of the museum, with the lights already out. I realized that it was a very unique state for the museum, for its masterpieces, when they are left in their own company, in the moonlight. Later, when I had been working at the museum for many years already, I decided to capture this story on film. The shooting took me nine months. I was using film with very long exposure. I think those photographs are the main ones in my life. A third project which I think important is called“Marble.”I did it in 2009. It depicts reflections

of antique sculptures in the polished marble walls of the New Hermitage. The latest project is called“The Hermitage. The Age of Photography.” It is a series of the museum’s “global landscapes:” state rooms, staircases, Palace Square, and a huge number of people everywhere. If you take a closer look, you will see that all of these people are taking pictures: all of them have cameras, mobile phones, tablets. This project is on display at the museum office and also exists in multimedia format: Mikhail Piotrovsky showed those reels at a presentation in New York and they will by all means be made available online. How do you feel about visitors to the museum who are making selfies or are fooling around with their gadgets, with the paintings and sculptures in the background? I am sympathetic towards practically any person who makes pictures at the museum. I think selfies and other pictures is a unique process of keeping a record of one’s life and the time we live in. It is difficult for us, contemporaries, to assess what is going on.

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20 Years in the Hermitage with a Camera This is the first time this is happening, when every person is a photographer. Photography is a universal lingua franca of today. You make a selfie featuring Rembrandt’s“The Return of the Prodigal Son” or Matisse’s“The Dance,”post it online, and with it you are telling a lot to your friends. Photographs remain in people’s personal archives and, with time, they will become even more valuable. In a minute of leisure, a person will look into those folders and will realize that they have lived an amazing and full life that had everything in it: joy, grief, love, and art that they encountered at the Hermitage. In five words, what is the Hermitage for you? The most important place on Earth! Prepared by Elena Bobrova Read the full story at rbth.com/42245

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PUTIN’S GRAND EXPERIMENT Ivan Tvsetkov SPECIAL TO RBTH

ussia’s foreign policy in 2014 was defined by a massive geopolitical experiment undertaken by President Vladimir Putin in response to the uprising in the Maidan in Ukraine.The experiment was a chance for Putin to test his view of international relations and Russia’s place in the world — a vision he had developed during his previous years in power. Previously, Putin’s foreign policy moves did not go beyond routine reaction to external challenges. In 2014, Putin finally decided to compare the view of the world he had formed in his head against objective reality. Perhaps this stage is what leaders of major world powers who have remained at the helm of a country for more than a decade inevitably come to. By this time, they think themselves more experienced and wiser than their foreign colleagues who are restricted by election cycles. They think that in the remaining time that providence has given them they must accomplish something truly great, something to be remembered for. Putin’s view of the world has several main points. Among them: • The West does not recognize Russia as an equal partner; furthermore, the West is using various means of neutralizing Russia’s strategic military potential; • Western civilization is in a deep crisis and has, in effect, lost its role as a global leader; • Through smart and competent diplomacy, Russia has managed to build relations of partnership with most“non-Western” countries; • If Russia openly challenges the West, it will be gladly supported all over the world because the West and primarily the Unit-

NATALIA MIKHAYLENKO

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The events of 2014 have shown that many of Putin’s theses do not look convincing when confronted with reality. Judging from his annual address to Russia’s parliament, Putin’s belief in his worldview has only become stronger.

ed States provokes a negative reaction in most of the world; • In an open confrontation between Russia and the West, the long-standing schism between the U.S. and Europe will become deeper; Europe may even come to Russia’s side; • At the end of the crisis, Russia will become a global leader as the only power that dared to openly challenge U.S. hegemony; • Russia’s economic weakness will be offset by its increased political influence. The events of 2014 have shown

that many of Putin’s theses do not look very convincing when confronted with reality. The ties between Europe and the United States turned out to be far stronger than expected, while the level of support that Russia has gotten from“non-Western”countries at times has looked utterly depressing. However, unlike ordinary experiments, after which scientists can wash the test tubes and close the lab doors behind them, Russia’s foreign policy experiment cannot easily be stopped. Additionally, Putin does not seem in-

RUSSIAN CURRENCY DOWN, BUT DON’T COUNT IT OUT Natalia Orlova SPECIAL TO RBTH

eopolitics and falling oil prices have delivered a heavy blow to the Russian ruble this year. In just the past three months, it has lost 50 percent of its value against the dollar. Judging by the premise that the national currency is an indicator of the state of the national economy, many publications have concluded that Russia is in for a bleak future — one including a protracted recession and possibly even a default. However, these forecasts do not take into account the significance of one internal factor, which has had an effect on the weakening of the national currency. On Nov. 10, 2014, the Russian Central Bank let the ruble float. More than a month has now passed and while this move has not added any stability to the foreign exchange market, the future of the ruble is not completely hopeless. Clearly, the drop in oil prices to below $70 per barrel and falling was an unfortunate coincidence, and it was this situation that has helped plunged the ruble to new historical lows against the dollar. Nevertheless, the foreign exchange market has a considerable risk premium, estimated at 5–7 rubles to a dollar, which reflects the difference between the market rate and the fundamentally justified value of the national currency. Given the drop in oil prices to $60–$70 per barrel, the fun-

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damentally justified value of the Russian currency is 45 rubles to the dollar for the end of the year and some 48 rubles for 2015. Although the market may currently be set for a more negative scenario, if oil prices change, the mood on the market will change too. Every $10 shift in the price of a barrel changes the equilibrium exchange rate by 2 rubles to a dollar. Just recently, oil was traded at $90–100 per barrel, and it may well return those prices, as was the case in 2008 when a sharp drop in oil prices was followed by a rapid correction. Still, the exchange rate is a reflection of perceived risk, and it is important to establish what contributes to the risk premium that is affecting the ruble. Without a doubt, the current ruble exchange rate is partially a reflection of the outside environment. Fears of a new round of sanctions have prompted the market to form a negative view of the Russian currency and part of the risk premium can clearly be attributed to geopolitics. However, a considerable part of the risk premium has also to do with a lack of understanding of the policy of the Russian Central Bank. So far the market has perceived the Central Bank’s decision to the let the ruble rate float as a failure of its macroeconomic policy. It has to be admitted that the bank made the decision to switch to a floating rate in difficult conditions, as it had already spent $30 billion propping up the rate in October. It gave up that

Ivan Tsvetkov is an associate professor at the School of International Relations of St. Petersburg State University. He is an expert in U.S. history, foreign policy and society.

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support at a time when the ruble was being traded at the boundary of its foreign exchange corridor. However, that decision has allowed the bank to save its reserves and now it has funds to support the rate through unscheduled interventions, which is exactly what it has been doing. Between Dec. 8 and 12, the Bank of Russia spent just $4 billion and managed to stabilize the rate at 52–54 rubles to the dollar. Had there still been a fixed rate, those efforts would have cost it far more.

A considerable part of the risk premium surrounding the Rusisan ruble has to do with a lack of understanding. Yet, intervention is not the main weapon at the bank’s disposal. What is more important now is its resolve to raise interest rates, which will make it expensive to trade against the ruble and hopefully reverse some of the slide. Interest rates have a considerable potential for growth. The current level of interest rates deviates from the equilibrium rate by 4 percentage points, which means that the Central Bank’s key rate may be raised by at least 2 more percentage points. Such a decision could reduce the risk premium on the foreign exchange market.

Having said that, the interest rate is not the only tool that the Central Bank has to influence the economy. It is common knowledge that in recent years it has actively supported banks, providing them with significant amounts of ruble liquidity through refinancing instruments. Until recently, when the bank was carrying out interventions on the currency market, those actions were justified. However, now when there are no regular interventions, banks should get used to the idea that the times of unlimited access to financial resources are over. Tougher access to refinancing would also trigger a rise in interest rates on deposits and loans, as a result of which the market rate may become closer to the fundamentally justified level. It is impossible to argue with the view that the situation on the foreign exchange market is unpredictable, yet the deep pessimism that the market has about the ruble does not seem to be justified. The Central Bank has nearly $450 billion in reserves and Russia maintains a balance of trade surplus and a low level of domestic and foreign borrowing. All these factors taken together indicate that in the foreseeable future the exchange rate has more chances of strengthening than of weakening. Natalia Orlova is the chief economist at Alfa Bank in Moscow.

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clined to do so. Judging from his annual address to both houses of the Russian parliament, his belief in his worldview has only become stronger, and the current setbacks are interpreted only as interim outcomes. For example, in his address, Putin said that NATO’s buildup along the Russian borders in 2014 should be viewed not as a reaction to Russian aggression, but as an implementation of longheld plans. Thus, Russia’s actions have only helped to unmask these secret machinations. Therefore, in 2015, Russian di-

plomacy is expected to continue to pursue aims consistent with this worldview. First off, Russia will likely continue its attempts to build relations with individual European countries in order to break the unity of the Western bloc —particularly regarding the sanctions policy. Secondly, Russia will continue to put forward bold initiatives at meetings of the BRICS, S.C.O., G-20 and other “non-Western” groups. Finally, an increase in the kind of tried-and-true Cold War tricks should be expected. Despite the intransigence demonstrated in Putin’s speech, the difficulties that Russia has faced in 2014 as a result of a consolidated resistance from the West and unexpected indifference from the rest of the world have already introduced at least one adjustment to Russian president’s foreign policy experiment. He appears to have come up with one more hypothesis that he will most likely start testing next year. In his address to the Federal Assembly, Putin made it clear that the events of 2014 remind him of 1941–1942, when the Soviet Union was suffering heavy defeats from Nazi Germany and was within a hair’s breadth of its defeat. In this analogy, this current period of setbacks must be followed by something comparable to the great victory in Stalingrad, the Kursk tank battle or the start of the Soviet Army’s victorious march to the west in 1943. Putin will be looking for such an event to turn the tide in 2015.

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Take a look back at the challenges of last year DOWNLOAD TODAY! $5.99 Written by the most prominent international and Russian experts, this guidebook highlights some of the major trends considered by Russian policymakers over the past year and asks how these events will affect Russian foreign policy in the future. Don’t miss this view from Moscow.

Where do Russia and its partners go from here? DECEMBER 2014 QUARTERLY REPORT Today, bilateral contacts in most areas and at all levels are either frozen, suspended or stagnant at best. This memo reviews how that happened, and asks what choices lie ahead. As we enter a new year, what lessons should be learned and what steps can be taken to avoid further confrontation?

Rethinking Russia’s relationship with India DECEMBER 2014 MONTHLY BRIEF In December, Russian President Vladimir Putin paid an official visit to India for the 15th Annual India-Russia Summit. Can this event open the door to a new era in the long bilateral relationship between the two BRICS partners, which has been relatively low-key in recent years?

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The Arts

RUSSIA BEYOND THE HEADLINES

MOST READ Five Russian Books for Your Christmas Gift List rbth.com/41893

Section sponsored by Rossiyskaya Gazeta, Russia www.rbth.com

Skating A new audience for old champions

BEHIND THE RUSSIAN LANGUAGE

Ice Stars Turn to Shows to Keep Careers Alive

Bring in the New Year with These Russian Toasts

SPECIAL TO RBTH

In late September, Russian figure skater Evgeni Plushenko — who, despite struggling with back problems, hopes to participate in the Olympic Games for the fifth time in Pyeongchang, South Korea, in 2018 — announced that he would skate this winter in a new ice show called “The Snow King,” based on Hans Christian Andersen’s “The Snow Queen.” Plushenko says that the show is unlike anything anybody in Russia, or even in the whole world, has ever seen.“The Snow King” will be an elaborate production on which no expense has been spared. Plushenko has invited fellow professionals Irina Slutskaya, Johnny Weir, Brian Joubert and TomášVerner to participate. Plushenko will use the help of “magic”to perform — for the first time in history — a jump on ice with eight turns, a stunt that has captured the imagination of Plushenko’s fan base. So far, further details have not been disclosed, but Plushenko will most likely be using special safety equipment that figure skaters use to learn jumping techniques. Plushenko is just the latest in a series of famous Russian skaters turning to touring and television to prolong their careers when they are no longer sure of winning medals.

Ice impresario Ilya Averbukh, who won a silver medal in ice dancing at the 2002 Olympic Games is one of the leading figures in commercial ice skating performances in Russia. He is the director and producer of some of the country’s most spectacular televised ice shows:“Stars on Ice,”“Ice Age,”“Fire and Ice,”

t is customary in Russia to propose a toast before each new round of drinks. At official events, the toasts are serious and earnest. At a party with close friends in attendance, they are usually ironic and jocular. People in other countries usually think that the standard Russian toast is“Na zdorovye!”(literally,“To health!”). That is not exactly right. When pronouncing a toast, Russians are more likely to say “Vashe zrodovye” or “Tvoye zdorovye!”, both of which mean “to your health!” Strictly speaking, however, this is not a proper toast. A classic toast has a more complex structure. It usually takes the form of a short story or anecdote, followed by a jocular or paradoxical conclusion, with an invitation to drink in affirmation of that conclusion. A traditional Russian party includes a sequence of several standard toasts. At a birthday party, the first toast (with wishes of health, success and a long life) is usually to the birthday boy or girl. The second toast is to his or her parents. At a wedding, the first toast is “To the health of the newlyweds.”After that, the guests shout “Gorko!” often and loudly, all through the dinner.“Gorko”literally means “bitter” in Russian. By yelling that the food on the table is bitter, the guests are inviting the newlyweds to make it sweeter by giving each other a sweet long kiss. A Russian party that is thrown without any special occasion also involves several standard toasts. The first one is usually“Za vstrechu!”(“To our meeting!”). To make sure that the party gets going as soon as possible, the second round of drinks is downed very shortly

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© ILIA PITALEV / RIA NOVOSTI

ANNA KOZINA

SPECIAL TO RBTH

Watch ice skating videos at rbth.com/41947

Ice shows staged by Ilya Averbukh are extremely popular on television.

STANISLAV KRASILNIKOV / TASS

and“Bolero.”He also directed the musical that promoted the Sochi Winter Olympics at the Summer Olympic Games in London. Averbukh lived for seven years in the United States, and his exexposure to American popular culture influenced his thinking regarding the commercialization of ice skating. “We are definitely the best skaters, but it’s important to know how to present a show and create a bright cover: lighting, pyrotechnics, special effects, decorations and costumes,”Averbukh said. Soon after his retirement from professional skating in 2003, he created his own company to produce ice shows. It celebrated its 10th anniversary this year. One of his early projects was an ice show called “City Lights,” based on the work of Charlie Chaplin. At the time, Averbukh said that “City Lights”represented a new genre — a combination of theater, music, ice skating and spectacle. Averbukh said he hoped the show “Would remind the audience that there is good and it might be worth it again to believe in miracles.” Averbukh does not take his shows abroad, but he believes Russian and foreign projects have a lot to learn from each other. “I place a lot of emphasis on quality and try to match our colleagues in Europe,” said Averbukh, pointing out that his shows include world champions, Olympic medalists and champions in ice skating acrobatics.

Touring ice shows and televised performances give former skating stars the chance to stay on the ice even after they can no longer win competitions.

Alexey Mikheev

Bolshoi on Ice

This winter, Evgeni Plushenko starred in a new show, “The Snow King.”

Averbukh’s dream is to have his own ice theater. For almost 30 years, former European champion Igor Bobrin’s Ice Theater of Miniatures has been touring successfully. Bobrin is famous in the figure skating world as the king of free skating and for his routines “Cowboy”,“Paganini”and “Invisible Partner.” The Ice Theater of Miniatures

has toured in Japan, Italy, France, Venezuela and the United States. The project was a big hit in South Korea, where the show has been dubbed the“Bolshoi on Ice.”This summer, the theater performed “Cinderella,”“Swan Lake” and “Mary Poppins”in Busan, Daegu and Seoul. “I think that for us, theater is

a way of life, something we cannot live without,” said Natalia Bestemianova, who performs as a solo dancer for the theater. “Of course, it is also a way to make a living, but the effort we put into our work — psychological and physical — is worth a lot more. We dedicate our whole lives to the theater.”

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afterwards, with the toast“Mezhdu pervoy i vtoroy pereryvchik ne bolshoy!”,meaning something like“No long breaks allowed between the first and the second rounds!” The subsequent toasts are usually short, such as“Nu, vzdrognuli!”,“Nu, poehali!”, or “Nu, poneslis” (all variations of “Here we go again”). Toward the middle of the party someone usually proposes a toast “To beautiful ladies!” or “To the ladies present here!”At this point someone else usually says that real men stand up when they drink a toast to beautiful ladies, and they drink to the bottom. All the gentlemen present promptly comply. Many years ago it was considered good manners (and a sign of manliness) to drink to the bottom after every toast. These days, such inordinate gulping of spirits is considered to be in bad taste. Nevertheless, the glasses are usually topped up after every toast. Another customary Russian toast is“Za sbychu mecht,”an intentionally twisted and mispronounced version of “Za to, chtoby sbyvalis mechty” (“Let our dreams come true”). In the 1980s, a book by Mikhail Bulgakov, “Heart of a Dog,” was turned into a film. One of the characters, Sharikov, pronounces an absurd toast, “Zhelayu, chtoby vse!”(“I wish that everyone”), which immediately became very popular. Incomplete and meaningless, it somehow emphasizes the ritualistic nature of all toasts. The last toast, “Na pososhok,” is usually pronounced when the guests are about to leave. In olden days, travelers used a walking stick, called posokh, during long journeys. A toast to the walking stick, therefore, is meant to make sure that the return journey is safe. Learn more about Russian toasts and their origins at rbth.com/double_agents

LITERATURE Read our updated literature section! rbth.com/literature

BIBLIOPHILE

History Footage collected by the Russian State Archives to be released under deal

Film Archive Opens Up A British entreprenuer has struck a deal to release footage of pre-Revolutionary and Soviet-era Russia to an international audience.

The home movies of Russia’s royal family, scenes from Gulag prison camps, Bolshoi Ballet performances and thousands of other priceless examples cared for by the Russian State Archive will soon be made available to foreign audiences, thanks to Anthony Gould.

JOHN NAUGHTON

Housed in a guarded nondescript industrial building on the outskirts of Moscow is an immense treasure trove of film and video documenting the history and culture of Russia — from the time of the tsars to the break-up of the Soviet Union. Scarcely any of the two million items has ever been seen in the West, but that’s about to change thanks to the dynamism and determination of one man: Anthony Gould.

PRESS PHOTO

SPECIAL TO RBTH

Skilled negotiator Gould, the effervescent boss of RussiaTeleRadio Worldwide (RTRW), is a throwback to a time when business relied more on personal relations than email communication. After starting at the bottom as a 16-year-old trainee with Kodak, he rose to become the company’s head of operations in Central and Eastern Europe (CEE), including Russia. Gould’s connection to the Russian State Archives is because of Kodak. The firm supplied the Kremlin’s medical clinic with X-ray film and blood analysis equipment, which allowed Gould to meet every Soviet leader from Leonid Brezhnev to Mikhail Gorbachev. It’s these close connections, along with a multitude of others forged over almost 40 years of commercial activity in the region, that helped RTRW secure the international distribution rights to the archive. After leaving Kodak in 1994, Gould began helping western

IN FIGURES

130,850

7,340

2,500

documentaries are in the Russian State archive, including films of the Romanov family.

musical performances from such theaters as the Bolshoi and Mariinsky will be available.

cartoons are in the archive, including animations from the Moscow 1980 Olympic Games.

companies such as Tesco and Zara set up shop in former Soviet bloc countries, but his mind kept returning to the possibilities of this enormous film archive, which he’d first come across when invited to install a film laboratory within the complex. “I thought, ‘I’ve got to find a way to get this material out there,’” he recalls. “Knowing all the right people as I did, I thought this shouldn’t be too difficult. I signed the contract in June 2010.” Dealing with the complex bureaucracy in Russia surrounding the archive was a challenge, but so too was raising the necessary

financing from groups in Britain, his home country. The deal Gould eventually struck with the archive’s management involved paying a small annual fee plus an agreement to use archive material at a rate per minute. He’s already embarked on his first commercial venture, buying the rights to 11 ballets performed by the Bolshoi and Kirov (now Mariinsky) companies, which have been remastered for international distribution.

An Unfamiliar View of a Memorable Time

Revolutionary footage of Emperor Nicholas II and family playing tennis on a wooden court, and a swimming expedition which shows the young tsarevich, Alexei, unable to participate because of his hemophilia and looking upset on the sidelines. “It looks like home movie footage,” said Gould. “There are hardly any scratches on the film. It’s been shown perhaps once or twice and then stored away.” There’s also footage of Gulag prison camps from the 1930s, the wartime siege of Leningrad and Hitler’s Berlin bunker. Film of unknown extinct creatures such as a bison-like animal, rarely seen footage of the Chernobyl disaster and Russia’s space program, can be found alongside numerous operas, plays, children’s animation and drama, all of it carefully indexed with handwritten annotations. There has already been intense interest from leading historians and filmmakers around the world. Gould believes many of the 47 full-time Russian archivists working in the facility, most of whom have worked there all their lives, know where all the treasures lie and will help him find it. Gould says that when this material surfaces, the effect will not be unlike the discovery of an ancient sarcophagus. Fresh light is about to be shed on aspects of a rich, intriguing culture hidden away for decades from most of the world. Fo r m o re i n f o r m a t i o n o n RussiaTeleRadio Worldwide and the Russian State Archive, go to rtrworldwide.com.

A glimpse into a lost world The untapped potential of the archive is vast. It includes pre-

Read the full story at rbth.com/41915

Phoebe Taplin SPECIAL TO RBTH

TITLE: U.S.S.R.: DIARY OF A PERESTROIKA KID AUTHOR: VLADIMIR KOZLOV PUBLISHER: AMHEST BOOKS

or anyone who grew up in the late Soviet Union, as Vladimir Kozlov did, “U.S.S.R.: Diary of a Perestroika Kid”must be an almostedible slice of nostalgia. From kefir rubbed into sunburn,Victory Day rehearsals, Moldovan cognac, trolley buses or cabbage soup with sour cream, the book is packed with fresh and evocative details while the political undercurrents of a society on the brink of change run beneath the domestic dialogues. It is the details that define this subtly understated book rather than narrative tension. The protagonist, Igor Razov, is growing up in Mogilev, an industrial city in eastern Belarus, not far from the Russian border. His life is full of school and trolley bus rides and seaside holidays in Odessa, in what is now Ukraine. For those of us who grew up on the other side of the iron curtain,“Diary”is a glimpse through the keyhole at a parallel world of beet-weeding work camps, picnicking on family graves at Easter, pioneer pins, general secretaries “dropping like flies” and exhortatory signs saying things like“Let’s implement the food ration program.” Fortunately the English language edition has footnotes, explaining every unfamiliar thing — from brands of jeans and beer to the mythology of Soviet heroism.

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One of the most striking aspects of the book, however, is how familiar it feels: snowball fights, fridge-raiding teenage hunger, chemistry homework, model cars, masturbation jokes, volatile older sisters and the fear of nuclear war. As an evocation of youth, with its momentous but mundane trials and frustrations, Kozlov’s novel has a universal appeal. This aspect was part of the attraction for Anchorage-based translator Andrea Gregovich: “There are so many parallels between his Soviet childhood and my American one,” she said. Her translation does justice to the colloquial vigor of Kozlov’s prose. The subtitle “Diary of a Perestroika Kid” also serves to makes the book more accessible by putting readers in an era they immediately recognize. In a joint introduction with Gregovich, author and translator look back to 2009, the year Kozlov wrote the novel, and reflect on how quickly the “resetbutton” optimism of that year has turned sour. They conclude: “What was originally a nostalgic look back at Soviet childhood now offers a valuable cultural perspective in the current climate of geopolitics.” To understand the formative influences on the children of the last Cold War, they argue, is to gain a better understanding of the adults they are today. Kozlov was born in Mogilev in 1972 and his books have been long listed for several Russian literary awards. He recently made an independent film adaptation of his 2012 novella“Desyatka,” which also appeared in English earlier this year as “Number Ten.”


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Feature

RUSSIA BEYOND THE HEADLINES

MOST READ Museum Dedicated to Prominent Soviet Avant-

Garde Architect Melnikov Opens in Moscow rbth.com/41999

Section sponsored by Rossiyskaya Gazeta, Russia www.rbth.com

History From its beginning as a collection of specimens in jars, St. Petersburg’s Kunstkamera is today a respected ethnographic museum.

MARINA KOROBKOVA

The U.S. connection to the Kunstkamera

Peter the Great’s fascination with all things European resulted in the creation of Russia’s first museum, a collection of natural anomalies. YEKATERINA CHUPRUNOVA SPECIAL TO RBTH

St. Petersburg’s Kunstkamera museum, famous for its colorful display of unusual human and animal specimens collected by Peter I (the Great), is marking its 300th anniversary this year. Although the museum opened in 1714, the Kunstkamera’s history is considered to have originated with Peter’s long trip abroad known as the Grand Embassy (1697–1698), when the tsar went to Europe to study shipbuilding. During his travels, he experienced many facets of European life and culture. He was fascinated by the collections of oddities, called Kunstkamera, that were then appearing in the homes of European nobility and, inspired by what he had seen, he decid-

ed to create his own cabinet of curiosities. In 1714, Peter issued a decree that anything he found amazing was to be brought to the Russian Kunstkamera in his new capital, St. Petersburg. The collection was supposed to show the diversity of the world and the mystery of nature. The main difference between the St. Petersburg Kunstkamera and its European counterparts was the reason for its creation. The museum had been created not as a private collection, but as an educational institute. “I want people to look and learn!” said Peter about the Kunstkamera, according to tradition. It is considered Russia’s first museum. In the beginning, in order to attract visitors, the Kunstkamera offered treats and gifts. But the museum quickly became famous and soon visitors had to buy tickets. In the 18th century, the museum moved to a building on the eastern tip of Vasilievsky Island.

What is a Kunstkamera? Kunstkameras began to appear in the 16th and 17th centuries as collections of rarities in the palaces of the European nobility. The word is German for a chamber with unusual creations.

The Petrine Baroque building that was constructed on the spot later is still considered one of the symbols of the city.The majestic structure on the banks of the Neva is crowned by a tower with an armillary sphere, symbolizing the solar system.

The museum collection In the first years of its existence, the Kunstkamera collection, along with rare books, devices, instruments, weapons and natural rarities, also contained“live”exhibits. These were people born with

LORI/LEGION MEDIA

Peter’s Collection Turns 300 physical defects who lived in the Kunstkamera and were paid for working there. As years passed, the Kunstkamera transformed from a collection of curiosities and oddities into a real scientific collection. When, in 1724, Peter founded the Russian Academy of Sciences, the Kunstkamera became its first institution. Having become academic, the museum subsequently concentrated on collecting ethnographic rarities such as clothes and household items from various peoples. Ever since then, the museum’s permanent exhibition has been dedicated to the native cultures of North America, Asia and Africa. But it is the Kunstkamera’s collection of anatomical rarities and anomalies embalmed in alcohol that has always been the museum’s most popular exhibit. Peter bought most of the articles from a Dutch anatomy professor, Frederik Ruysch. Ruysch had collected the items over several decades and agreed to sell the col-

From 1812 to 1841, Russians, Alaskan Aleuts and the Kashaya Pomo tribe of native Americans shared the land around Fort Ross, Calif. Hundreds of artifacts from these groups are on display at the Kuntskamera. Members of the Kashaya tribe visited the museum in 2012 and again this past

summer. Yury Berezkin, the curator of Kashaya artifacts at the Kunstkamera, hosted the delegation and said such visits are critical to the museum’s work. It was “essential for the Kunstkamera to hear the Kashaya’s comments about the origins of the artifacts,” Berezkin said.

lection to the Russian tsar, hoping that Peter would leave it for posterity. The creatures shocked the 18th century public, and continue to do the same to visitors today.

matic guided tours on various subjects: from the history of costumes to anthropology. Currently, only general orientation tours a r e av a i l a b l e i n f o r e i g n languages, but the Kunstkamera management has promised to add more programs for foreign tourists. “Our collections are interesting for the foreign visitor because they were collected long before those that today are exhibited in Europe,” said Chistov. “All our ethnographic exhibits are unique because they were not influenced by European culture.” During the press conference dedicated to the Kunstkamera’s 300th anniversary, President of the Russian Museum Union Mikhail Piotrovsky paid tribute to the museum: “Along with the Kunstkamera’s anniversary we are celebrating 300 years of Russian museology. This is the first and the oldest museum in our country and it is also a very important landmark in the development of museums in Europe.”

The Kunstkamera today The modern Kunstkamera is one of the biggest ethnographic museums in the world, and actively carries out scientific research. The museum contains more than one million exhibits and is constantly enlarged thanks to expeditions and new acquisitions. Every year the Kunstkamera organizes about 50 scientific expeditions to various regions of Russia, as well as to Asia and Africa. Each expedition enriches the museum with new exhibits. Museum DirectorYury Chistov said that the Kunstkamera no longer fits in its historical building and the museum administration is currently in talks with city authorities about the possibility of creating a separate storehouse for the collection. The museum is known for its educational programs and the-

DISCOVER RUSSIA TOGETHER The Hermitage has an amazing collection of more than 3 million works of art from around the world. Paintings and sculptures by very famous artists can be seen there, including works by Rembrandt, Raphael, Michaelangelo, Monet and van Gogh. One of the the most interesting items for kids is the Peacock Clock, a special clock made up of three mechanical birds, built in the 1780s. Look at the art all you want, but don’t touch, or the gallery guard will be sure to yell at you!

A visit to the Hermitage Museum is an absolute must for anyone going to St. Petersburg. It is the home of one of Russia’s most famous collections of art. Here are some words that might be helpful if you get the chance to go. On an you in eye r visi pre the m out f t to t of ss E use or ca he H u ca her s lizave m s ts! C ermi ts e t r a P ince ats h tage ca t fro va , ha ch m m th nts b etrov 1747, ave kee l v p bo e be ice. e cit ring na h whe ived y see oks a com The H of Russ ad o n Em K pla the bou e fam erm aza ian B ne ita n to lue ce m o t th o u g e in s the n Ca m, a . Th e ca help sp ts’ D nd v ere ts rin a g. ay, w isito re hic rs c h t an ak es

Learn Russian! Hermitage - Эрмитаж (ehr-mee-tazh) Art- искусство(eez-koost-vah) Painting – картина (kahr-tee-nah) Sculpture – скульптура (skulp-too-rah) Gallery Guard – cмотрительница (smo-tree-tehl-nee-tsa) Cat – кот (koht) Visitor – посетитель (poh-seh-tee-tehl)

Word Search

n of seve ade up Winter m is e e ag th hes Hermit one is mous t stretc gh the Althou , the most fa building tha s the resia gs en buildin his pale-gre Neva River w anovs. m T e o . h R e t c e f Pala palace ily, th nks o al fam y the fourth the ba y g o r n ’s lo a sia all arted of Rus ding is actu on it was st il dence n u s. In b io r rrent 0 yea struct The cu he site. Con han 10 s severely t e r o t n rm wa built o nd lasted fo ugh it ly. The a ediate ! Altho in 1730 aught on fire almost imm s one-andc ilt ga , 1837, it , it was rebu ont is as lon rooms ed fr e g e a ,5 h 1 00 dam a th s ge — t It contains a u h h o is s. It als palace ll field rdens. dows. footba 45 win d several ga ,9 1 d a-half n n oors a oom a 1,786 d apel, a ballr h c a r, ate

NATALIA MIKHAYLENKO

Hermitage, Ermitazh, Petersburg, art, iskusstvo, painting, kartina, sculpture, skulptura, cat, kot, visitor, Winter Palace, Zimny Dvorets

Mikhail Piotrovsky is the director of the Hermitage Museum. His father was also the museum’s director, and Mikhail grew up wandering the halls of the building. This December he celebrated his 70th birthday. He studied the Middle East in college and learned Arabic. After becoming the museum’s director in 1992, Piotrovsky worked to open the Hermitage collection to the world. Under his watch, the Hermitage opened branches in the Netherlands, in the U.K., and even in Las Vegas, although that branch of the museum has now closed.

A special video installation was shown on the front of the Hermitage for its birthday Watch a video of the celebrations, including a laser show at rbth.com/42047

© IGOR RUSSAK / RIA NOVOSTI

Can you find the following words in the puzzle? Words are hidden backwards, forwards and diagonally.

PYOTR KOVALYOV / TASS

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