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Across the divide: the Russian foreign minister, Sergei Lavrov, left, played host to a delegation led by US Secretary of State John Kerry


hen US Secretary of State John Kerry met Russian president Vladimir Putin in Sochi earlier this month, it was the first time in more than a year that a senior member of President Barack Obama’s administration had been in Russia. The stated purpose of Mr Kerry’s visit was to give the sluggish Ukrainian peace process a push forward, helping to keep the Minsk accords alive. More symbolically, it may have signalled a shift in the White House’s approach to relations with Russia after a year of stalemate where both sides have simply entrenched rigid positions over the conflict. Mr Putin’s meeting with German chancellor Angela Merkel in Moscow – shortly after the Victory Day celebrations she had pointedly refused to attend – also reflect a tentative rapprochement. Both Mr Kerry and Chancellor Merkel pledged that sanctions against Russia could be lifted as soon as the Minsk agreements are fulfilled. But what exactly does that mean? At his recent briefing in Rossiyskaya Gazeta, Russian foreign minister Sergei Lavrov explained why Moscow considers its position on the Minsk agreements justified: “This document can be shown as a reference point to those who are demanding certain actions from us,”he said.“Read the text of the Minsk agreements: control of the border [by the Ukrainian government] must be established at the very end of the process... Kiev is obliged [first] to introduce a law on special status [for the rebel-held territories]. After that it is impossible to justify the preservation of Ukraine’s economic blockade of Donbass.” Both sides of the conflict emphasise those parts of the Minsk agreements that suit their interests: Kiev, Washington and Brussels stress the point on the “reestablishment of full control over the state border by the government of Ukraine.”The rebels from the

US Secretary of State may have come to the Russian resort looking for a deal, says Radio Sputnik analyst Dmitry Babich south-east of Ukraine and Moscow point to the promise of autonomy (“special status”), constitutional reform in Ukraine and the lifting of the economic blockade on Kiev’s side. So far, observers say that the breakthroughs are mostly symbolic and personal: Russia and the West started talking in soft tones again, with local foods consumed and jokes cracked. Psychologically, this is important. The meeting between Mr Putin and Mr Kerry on May 12 took place just weeks after President Obama called Russia “isolated” and described Russia’s economy as being “in tatters”. In this situation, the headline “Kerry in Sochi” carried echoes of “Nixon in Beijing” 40 years ago. Last week’s Moscow visit by Mr Kerry’s deputy, Victoria Nuland – one of the main architects of the “regime change” in Ukraine in February 2014 – is also significant.

OBVIOUS PROGRESS MADE Many observers on Russia-US relations warn against “reading too much” into the official announcements about the meetings. However, the progress is palpable.“I would remind you that just weeks ago Russia and the US could not agree even on talks about talks,” says Gevorg Mirzoyan, an expert at Moscow’s Russian Academy of Sciences’ Institute of the US and Canada. “They could not agree on the time and location of future meetings – there simply was no trust between them at all.” Mr Lavrov added a human touch to his meeting with Mr Kerry, suggesting that they could lay flowers at a local memorial to the Soviet war dead.

The real agreements in Sochi were not made public, but both Russia and America appear ready to step back from confrontation

Mr Lavrov even suggested using an old Soviet Pobeda car (the first model to be produced in the USSR after the victory in 1945) to reach the monument. Mr Kerry agreed to the flowers, but not to travelling in the classic car (for security reasons). The question remains: what motivated Mr Kerry to visit Mr Putin in the first place? The consensus among experienced observers is that there must have been a greater prize at stake for visiting Sochi than a mere “change of tone”.The city is not just Mr Putin’s preferred health resort, but also the location of the recent Winter Olympics, which American media did their best to discredit and which was boycotted by Mr Obama and Mr Kerry just over a year ago. Mr Kerry must have known that by taking a step towards Russia and meeting Mr Putin in Sochi he would come in for a lot of flak from the media back home and from his allies in Ukraine. He was not mistaken. The NewYork Times called the meeting“a diplomatic victory and affirmation”for Mr Putin, suggesting that the Sochi trip would be interpreted as a “sign of surrender” in Russia. Ukraine’s prime minister ArsenyYatsenyuk did not hide his irritation, saying,“Sochi is not the best place to meet the Russian president” and that “Russia, no doubt, will use the results in an inappropriate way.” If meeting Mr Putin to discuss ways forward over Ukraine was not the true reason behind Mr Kerry’s visit, was there some ulterior motive? A hidden agenda? The most popular version is that some kind of a secret deal was reached. The deal would probably oblige Russia to defuse the tensions in Syria in exchange for a softening of the American (and conse-

quently Ukrainian) stance on the problem of proRussian rebels in south-eastern Ukraine. Mr Lavrov said that both sides supported the Minsk agreements“including direct dialogue between Kiev and [the capitals of the two rebel regions] Donetsk and Lugansk”. Mr Kerry said Syria would become a peaceful country only after a “political transformation” there, adding that he and Mr Lavrov had discussed just such an approach to peace in Syria. That may be easier said than done. The Kiev government steadfastly refuses to talk to rebel leaders in Donetsk, while Syrian president Bashar Assad recently won elections and shows no signs of planning political “transformations” in his country. If a “Syria for Ukraine”deal was struck, its implementation would be prickly for both Russia and the US.

STEP BACK FROM CONFRONTATION “The real agreements in Sochi were not made public,” comments Alexey Arbatov, the head of the Centre for International Security at the Institute of World Economy and International Relations in Moscow. “But both Russia and America appear ready to step back from confrontation.” For Moscow and Washington, it is time to stop propping up their allies in Ukraine. The Ukrainian president Petro Poroshenko recently said his country“was engaged in a real war” with Russia. The Ukrainian parliament, instead of giving special status to the rebel regions, declared the two territories “occupied by a foreign power”.Ukraine also stopped all transit from Russia to the separatist region of Trans-Dniester – a narrow strip of land between the Dniester river and the Ukrainian border in neighbouring Moldova, backed by Russia since 1990. “Both Russia and the US understand something needs to be done to stop a resumption of fighting in Ukraine and possibly an escalation in Moldova,” adds Mr Mirzoyan.





Politics & Society AP


The Arctic Convoys. Through ice and fear for Russia

Not forgotten: the march of the Immortal Regiment; inset, Valentine Soldatov flanked by British comrades Stanley Ballard and Ernie Davies at the Soviet War Memorial, London


A welcome fit for heroes Victory Day at 70 Soviet veterans swept along on a wave of affection and enthusiasm on a three-day anniversary visit to London TIM LEWIN SPECIAL TO RBTH

The chairman of the recently formed Veterans Legacy Committee reflects on the camaraderie, humanity and historic significance of a very special Russo-British victory celebration. Let me introduce Sgt Stephan Karnaukhov. Born in 1924, he was conscripted from school to the Red Army in 1942. He served on the Western Front in an anti-tank unit then trained as a radio operator. He was in the front line of Red Army troops when they entered Berlin. He was also one of 10 former Soviet veterans to visit London for Victory Day weekend, the 70th anniversary of the defeat of fascism. In a toast to victory in the Churchill War Rooms, the bunker under Whitehall from which Churchill conducted the war, Sgt Karnaukhov declared: “When the moment came, it was my task to signal all units that victory was ours. I did this on an American radio, in the back of a Studebaker truck delivered by the North Convoys. We are all allies for peace!” This noble sentiment prompted three hearty cheers for the veterans, including those from British and Commonwealth forces present, only chilled by the fact that this 70th anniversary weekend extravaganza might be the last hurrah for these men and women, as time takes them from us in a way the enemy could not.

RBTH remembers the dramatic and heroic story of the Arctic Convoys, a period of unique collaboration between Russia and the UK, when more than four million tons of vital military supplies were shipped across treacherous, often freezing seas.

Debt of gratitude Sgt Karnuakhov and his nine colleagues were invited and sponsored by a group of independent volunteers who feel that politics must not dim the gratitude we should feel for the Soviet people. With the group came a Latvian woman whose village had been razed by the Nazis. A child then, she was thrown into a concentration camp. Another had been the youngest soldier in the Red Army. Born in 1930, he had lost his parents before the war. After his orphanage was bombed, he was pulled from


Merchant and 18 Royal Navy vessels sunk during the Arctic convoys

78 Arctic convoys braved what was known as the ‘Murmansk run’

60 degrees below zero – the big chill faced by convoy sailors

The visiting veterans in London enjoyed two more concerts in their honour and a tour of HMS Belfast, herself a veteran of the Arctic convoys and beneficiary of two new masts, a memorial gift from Russia at the time of the 65th anniversary.The masts have become a symbol, as has the ship herself, of the comradeship and co-operation between the Allied forces and their Soviet counterparts. By good timing or good luck, while the visiting veterans were paying their respects to the bronze memorial plaque on the upper deck, a roar came from the skies as the Red Arrows, direct descendants of those young men who took the first squadron of British Hurricane fighter planes to Murmansk in 1941, flew up the Thames as part of the pageant. Right now, no one knows if there will be another celebration to match this one in London. Time has reduced the ranks of our surviving veterans so that it’s not possible to know if there will be enough to take that one pace forward next year. But whatever the fall of the dice, we will always continue to remember their service and give thanks for their legacy – in Russia and in Britain.

Wartime perils shared The visiting former Soviet veterans were swept along on a three-day wave of enthusiasm and affection that they did not expect. They were entertained by the Royal Navy at Greenwich and by the Yeomen Warders of the Tower of London. In the evening of VE Day they were cheered to the echo in the Churchill War Rooms where they were presented with framed replicas of the Arctic Star, symbolic of the only campaign where the western Allies and Soviet forces worked side by side, shoulder to shoulder, sharing the same perils. The traditional Soviet War Memorial service and wreath-laying in Harmsworth Park onVictory Day, May 9, attracted three times as many

Brightman’s spaceflight successor announced

Putin and Cameron discuss Middle East and Ukraine

Satoshi Takamatsu, the Japanese reserve for Sarah Brightman on a trip to the International Space Station (ISS), could take her now vacant seat on board the Soyuz TMA-18M spaceflight since the British singer has decided not to fly, a source familiar with the situation told Interfax-AVN on Monday. "The contract between Roscosmos, the Russian federal space agency, and Space Adventures for the training of space tourist candidates remains in force. Satoshi Takamatsu continues training for the flight,” the source said. The final decision regarding Brightman’s successor will be taken soon, he said. The source also said that the British singer had to withdraw from the flight for financial reasons. “One of the sponsors failed her,” he said. The singer, who was reported to have been prepared to pay $52m (£34m) for the trip, cited "family reasons" for pulling out in an announcement made last week on her Facebook page.

Vladimir Putin, the Russian president, had a telephone conversation with British Prime Minister David Cameron on May 25, it has emerged. It was the first phone exchange between the leaders since November of last year, according to the Interfax news agency. The president again congratulated Mr Cameron on being re-elected as Prime Minister following the general election on May 7, the Kremlin press service reported. “Readiness for interaction with the British government for the purpose of restoring constructive co-operation both on issues on the bilateral agenda and on international issues, was restored,” the press service said. Specifically, Mr Putin and Mr Cameron discussed the situation in the Middle East with an emphasis on the Syria issue and the fight against the terrorist group Islamic State. Meanwhile, the Kremlin has not named any specific dates for a meeting on Syria between Russian and UK experts which had been agreed by the Russian president and the British Prime Minister. “So far, I cannot name any concrete dates,” the Kremlin spokesman Dmitry Peskov told reporters yesterday. “Satisfaction with the effective joint actions taken by the sextet in the negotiations on the Iranian nuclear issue was expressed,” the Kremlin said. A spokesman said that the conversation also addressed the situation in Ukraine.

Greenaway to film Russian adventures of Dumas


In 2012, the Russian government approved air transit of Nato’s Afghanistan cargoes, identifying an airport in the Volga city of Ulyanovsk, 530 miles east of Moscow, as the transit hub. The deployment of what critics described as a “Nato base” in Ulyanovsk caused considerable controversy inside Russia and provoked opposition protests. The significance of the Russian transit route grew due to the difficulties that arose with the main transit route, from Karachi across Pakistan to Afghanistan in the north. Pakistan’s military had little control over that route and Nato convoys were often targeted by Taliban attacks. According to Alexander Khramchikhin, deputy head of the Institute of Political and Military Analysis, “Moscow’s decision has more to do with politics” than with the fact that the UN Security Council resolution has expired. There may be several factors at work, he said. With the withdrawal of most international military forces from Afghanistan, the number of shipments had dropped, meaning Moscow had little to lose in terms of transit fees from ending the arrangement. Russia was also unhappy with the new western mission in Afghanistan, Resolute Support, since it lacked the backing of a UN resolution. The Russian prime minister’s decision may also be “a reply of sorts” to the sanctions, Mr Khramchikhin added. Viktor Murakhovsky, chief editor of Arsenal of the Fatherland magazine, said the move was an answer to Nato’s unilateral decision last year to end all co-operation on Afghanistan. Mr Medvedev’s action was “a demonstrative step”, he added.


Medvedev puts brakes on Nato military cargo route to Afghanistan via Russia



Symbolic masts

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Nato will be forced to find new ways of shipping military cargo to Afghanistan after the Russian government decided to end the transit via Russian territory. An order, signed by Prime Minister Dmitry Medvedev on May 18, says that the decision has been taken since UNSC Resolution 1368, which was adopted in 2001 setting up the International Security Assistance Force in Afghanistan, is no longer in effect. The mandate of the mission expired in December 2014. According to Nato, the alliance approached Russia with a request to permit transit overland of non-lethal cargo to Afghanistan in the spring of 2008. Two years later, Russia also relaxed the rules on military cargo.


people as usual to honour the veterans of all nationalities who gathered in memory of the fallen. Here, they and their British comradesin-arms were presented with medals marking the 70th anniversary of victory by Alexander Yakovenko, the ambassador of the Russian Federation, who later described the series of events as “the best ever in London”. Meanwhile, in Moscow, asproof of a silver lining to the political clouds, three British veterans of the Arctic convoys, instantly recognisable in their “Snowdrop” white berets, were seated in Red Square next to Vladimir Putin for the traditional Victory Day parade, places that would normally have been filled by foreign politicians. These old seadogs – who brought real help to Russia when it was most needed – could have been forgiven for seeing the agreeable irony of the situation: you wait 70 years to be recognised, then, when you think it’s all over, you get three medals and a handshake from the Russian president.

the wreckage by a Red Army unit; it adopted him, educated him and trained him to be a soldier. With the turning of the tide of war he helped liberate Bucharest and then Vienna. According to the latest Russian research, the peoples of the USSR paid the terrible price of 26.6 million souls in a wartime butcher’s bill of approximately 50 million. There is not a family in Russia or the former Soviet Republics who did not lose one or more loved ones. The fervour for remembering this sacrifice was taken up in Russia this year by the advance of the “Immortal Regiment”.Inspired by an idea from Siberia, several million people took to the streets with placards and photographs of fallen veterans from their families. On each placard was the date of birth of the veteran, but no date of death: this regiment marches forever. Maybe this idea will catch on elsewhere, but it has its parallel in Britain. When people grow old they worry, not so much about what they have done, but more about how they will be remembered, what will they leave behind, what is their legacy. United by this common thought, a group of unlikely associates in London have banded together to create the Veterans Legacy Committee. This group was behind much of the planning to celebrate VE day, Victory Day, the 70th anniversary and to unite survivors of the war from Britain and the former USSR in a celebration that will be remembered long after the official dust has settled; a celebration dedicated to their legacy of 70 years of peace.

British director Peter Greenaway and his wife Saskia Boddeke are preparing to shoot a film about 19th century French author Alexandre Dumas’s trip across Russia, according to the Timchenko Foundation, which is backing the project. The movie – working title Volga – is based on a diary Dumas kept on his trips across Russia, published in Adventures in Czarist Russia, or From Paris to Astrakhan. Dumas, best known as the author of The Three Musketeers, first went to Russia in 1858, where he lived for two years. He went on to record his observations of contemporary life and the history of the 15 cities he visited. “It's an ambitious project to create a 150-minute film showing the multinational, multi-confessional and multi-ethnic character of the Volga region,” Greenaway says. “It’s a project where the past and the future, authentic culture and art, fiction and propaganda – everything is intertwined; where different religions – Christianity, Buddhism and Islam – peacefully coexist.”


‘Undesirable’ NGOs to be banned from Russia New law Staff of foreign groups that ‘pose a threat to the state’ face fines or jail

status of the British Council several years ago that led to the closure of the UK’s international cultural organisation’s office in Russia for a period. Critics of the Russian government’s actions at the time suspected that elements within official structures resented the commercial success of the council’s English language teaching business. The council is now once again working in Russia. The new law was swiftly adopted after being approved by the Russian Prosecutor General’s office and the Ministry of Foreign Affairs. The Ministry of Justice is now drawing up a list of undesirable organisations. “We are not responsible for who will be included in the register,” says Mr Ischenko. He admitted that he could not name any organisation that would be considered undesirable.


Russian President Vladimir Putin has signed a law forbidding “undesirable” foreign or international non-government organisations from opening delegate offices, carrying out programmes and projects and promoting their activities through the media or internet. The lawmakers responsible for the legislation, which was signed into law by the Russian president on May 23, decided that in order to be decreed “undesirable” for Russia it was enough that an overseas group be deemed a threat to the country’s constitutional order, defence or security. It is not only the groups themselves that risk breaking Russian law – anyone who collaborates with them, including legal entities, banks and financial institutions, and ordinary people, may all be deemed“accomplices”and face fines of up to 100,000 roubles (£1,300) or a jail term of up to six years.

Those working in international NGOs, however, say they believe the law is targeted at them and already feel under pressure. “The law is directed against us and organisations like ours,” says Olga Pispanen, president of Open Russia, a group founded by former Yukos chief Mikhail Khodorkovsky. Ms Pispanen, who is also Mr Khodorkovsky’s press secretary, described the new law as “pure idiocy”. She added: “We work, do our own thing, therefore they can create whatever they want.” “The law is directed against civil society in Russia,” said Sergei Nikitin, head of the Russian branch of Amnesty International.“This is a logical follow-up to the law against foreign agents,” he said, referring to non-profit organisations that are engaged in political activity and are financed from abroad. Although public sector groups may not like it, the new law demonstrates a certain consistency, Mr Nikitin added.“First they dealt with the Russian organisations and now they are

Need to react quickly The Russian State Duma Deputy Anton Ischenko told RBTH that the aim was “to create an instrument for reacting quickly to increased danger”. Mr Ischenko, a member of Vladimir Zhirinovsky’s nationalist LDPR, who helped draft the new law, said it was designed to“undermine all attempts to shake up the situation in the country from abroad”. Commercial companies may also fall under the scope of the law if they too are considered undesirable. The law has its roots in a dispute over the


NGOs under pressure

Face of protest: a demonstration against the foreign links of the election monitoring body Golos

against whom it is directed and, therefore, it potentially has a very wide scope. The legislation’s injunction to prevention rather than cure vests much power in the state, he adds, enabling the Kremlin to target those groups that “it deems dangerous”. Pavel Salin, director of the Centre of Political Studies at the Russian Financial University of Government, says that introducing fines and criminal liability for “accomplices’’of undesirable organisations introduces a troubling new precedent. “This could have a big impact on the environment in which organisations operate, cutting off many sources, not only financial but informational too,” says Mr Salin.

tackling the foreign ones.” Rights activists are also outraged by what they describe as the “sloppiness” of the law. Mr Nikitin says that it repeats measures found in existing laws for protecting the government from threats, particular the law on extremism. There is no mechanism in the new law for removing an organisation from the list or for covering how a group can appeal legally against a decision to deem it undesirable.

Wide scope The political analyst Igor Bunin explains that the law’s vagueness may be attributed to the fact that it was adopted for the purpose of “self-defence”. The law does not make clear

Moscow fights a new battle in the information war through establishing a Russian legal entity or operating by franchise,” he told the RIA Novosti news agency in October 2014. But in an interview with RBTH, Vasily Gatov, a member of the boards of the Russian Guild of Press Publishers and of the World Association of Newspapers and News Publishers (Wan-Ifra), dismissed the idea of “international practice,” saying that “all the restrictions on media ownership that exist internationally are quite specific and nowhere (with the exception of China) do they apply to all media outlets.”

Media Law curbing foreign ownership of Russian media is needed to defend national sovereignty, say backers YEKATERINA SINELSCHIKOVA RBTH


Share prices


In October 2014, President Vladimir Putin signed a controversial law restricting foreign holdings in any Russian media to 20pc. Media owners have until February 1, 2017, to either “adapt” their ownership structure to the new requirements or leave the market.“Its purpose is clear: to defend national sovereignty. He who owns information owns the world,’’ said State Duma speaker Sergei Naryshkin. The bill passed through the lower house of parliament in just a week. The bill’s backers included Vadim Dengin, first deputy chairman of the State Duma’s information policy, information technologies and telecommunications committee. He has often been quoted as saying that since “a huge information war is under way”,the bill was a matter of information security. It also aims to tackle the offshore registration of many media market players. When media outlets are run from outside Russia it is difficult to determine who is behind them, Mr Dengin says. A limit of 50pc for foreign capital was adopted in 2012 but did not apply to printed media, only to TV channels and radio stations. The new amendments introduce a cap of 20pc for all types of media that have a licence. Justifying their decision, deputies cite international practice and say they do not expect that the new amendments will result in closures. According to Mr Dengin, media outlets have numerous ways of “legalising” themselves. “For example,

capital reorganisation and a sale of assets, from partial to complete. But no choice has been made. “If the board of directors decides to sell the business, there is no guarantee the transaction will be carried out on acceptable terms,” CTC Media’s press service added. “The value of the shares may fall further still.”

Writing on the wall: the new law applies to print as well as TV and radio


Between the amendments being submitted to the Duma and being signed off by the president, the value of shares in Sweden’s Modern Times Group (which owns TV 1000 and Viasat History channels, as well as several other TV channels that broadcast in Russia) fell by 20pc on the Nasdaq OMX media shares stock market. By the end of 2014, the shares of its majority shareholder, CTC Media holding company (registered in Delaware), hit a fiveyear low of just $4.78 on Nasdaq, dropping 64pc compared with early 2014. But other Russian companies in the IT and telecoms and media sectors have suffered a similar decline caused by the economic crisis, a source at a media holding company with foreign ownership (who asked to remain anonymous) told RBTH.“Many players are looking for a solution that would be best for their shareholders. We are under close scrutiny from everybody: from US and Russian regulators from investors. So any premature disclosure of information is fraught with consequences,” he said. CTC Media told RBTH the amendments to the law “create considerable uncertainty” for the holding company and its shareholders. Options include corporate restructuring, franchising and licensing of structural units,



Scan this code to read more about Russia’s new media landscape: What has changed?


Shareholders have numerous ways out, since the law “is extremely muddled in its wording,” Fyodor Kravchenko, a partner with the Board of Media Lawyers, told RBTH. The 20pc cap is imposed on foreign ownership only in companies considered to have an editorial office or be the founders of a media outlet. The restriction does not apply to another legal entity such as a publisher. This means the foreign owner of a newspaper or magazine, for example, can distribute a print run through retail sales or subscription, and can sell all advertising in the media outlet in question – in effect maintaining full control over all cash flows and revenues, Mr Kravchenko said. But he says the pressure on foreign owners to look for loopholes is influenced by the vague wording in the law that bans “indirect control” of Russian media by foreign individuals, which gives unchecked powers to the law enforcer. “For example, if Forbes hands over its trademark for use by a Russian publisher, will it give it an opportunity to ‘indirectly’ control the editorial team? Of course it will. The trademark owner would want to keep the right to control how the Russian team adhere to established standards,” said Mr Kravchenko. Even this indirect control could be seen by the authorities as a violation of the law. “We are already seeing a redistribution of ownership in the print media,” said Mr Kravchenko. At least a third of major foreign owners would pull out, the rest would adapt to the new conditions.


April Quarterly Report

May Monthly Briefs



This April, Russia Direct released its comprehensive ranking of Russian and post-Soviet Studies programmes in US universities, together with an analysis of the current state of Russian Studies

In May, Russia Direct will release a new brief examining the topic of Russian lobbying in the U.S. and the EU. Authored by Sergei Kostiaev, associate professor at the Financial

programmes in the US. While bringing together top experts (including Harvard’s Alexandra Vacroux, Georgetown’s Angela Stent and Rhode Island University’s Nicolai Petro), the report will address the major challenges facing Russian Studies

University under the Government of the Russian Federation, the brief will touch upon a wide array of issues, from the differences in promoting Russian interests in Brussels and Washington to the effects of the crisis in Ukraine on the

programmes in the US and ways of tackling them.

Kremlin’s foreign lobbying opportunities.




Russia’s building Brics for a new economic order

Number crunching – comparing the Brics economically

World summit In July, Ufa hosts the Brics annual summit. RBTH investigates how the developing world’s top club of nations is shaping up ANTON BALAKIREV SPECIAL TO RBTH

On April 1, 2015, Russia became the chairman of the Brics grouping – an informal association of the largest emerging markets: Brazil, Russia, India, China and South Africa. Moscow set as this year’s main goal the association’s establishment of its own financial institutions: the New Development Bank and a pool of foreign exchange reserves, to compete with the International Monetary Fund (IMF) and the World Bank respectively. The final decision on the establishment of the new organisations will be made during a summit chaired by Russia, to be held from July 8-10 in Ufa, 800 miles east of Moscow. However, according to Russian experts, the informal association is experiencing difficult times: the Russian and Brazilian economies have stalled, GDP growth rates are down in China, and members are forging agreements among themselves outside the group’s structures.

Uneven growth The acronym Bric was coined by Goldman Sachs analyst Jim O’Neill in a research note in November 2001, although the idea of an RIC (union of Russia, India and China) was promoted as early as the Nineties by the then Russian prime minister Yevgeny Primakov. “The basis for the association was high GDP growth rates of national economies, which averaged 6.7pc per year,” says Valery Abramov, economist at the Russian Presidential Academy of National Economy and Public Administration. According to Mr Abramov, countries with vast resources and buyers’ markets largely determine the pace of the global economy. As Mr O’Neill noted in his book, The Growth

Map, the grouping will overtake the G7 countries as an economic bloc by 2035. But the Brics members are at different stages in terms of economic and social development. According to the IMF, GDP per capita in Russia in 2014 was $24,800 (about £16,000), in South Africa $13,050, in China $12,880 and in India $5,850. “Russia is at a higher stage of economic competitiveness and has the highest scientific and technological potential,” Mr Abramov says. The countries are brought together by a set of mutual economic interests, key among which is a common wish to reduce reliance on current world leaders and to develop as a bloc.

New institutions The creation of joint financial institutions should give a new impetus to the association. The agreement on the establishment of the Brics joint currency reserve pool was signed at the last summit in Brazil. Founding capital is planned to be $100bn. Brics countries will contribute different shares: China $41bn, Russia $18bn, Brazil $18bn, India $18bn, and South Africa $5bn.“The framework agreement on the establishment of the pool does not include direct obligations; resource commitments will be required when central banks sign a compensation agreement,” Mr Abramov says. “The pool of nominal foreign exchange reserves is supposed to be an alternative to international institutions such as the IMF and the World Bank.” The second Brics project is the New Development Bank, which will provide loans to invest in a variety of institutional or infrastructure projects in other countries. In the first phase of development, the Brics bank’s capital will amount to $10bn. The headquarters will be in

China, while the first head of the bank will be a representative of India. In early May, Sergei Storchak, the Russian deputy finance minister, suggested Greece as one of the first recipients of aid from the Brics bank, since its total debt amounts to £230bn – 177pc of its GDP. Germany’s share of that debt is around £40bn. “Establishment of an analogue of the IMF on the basis of contributions from the Brics countries is one of the many steps toward the gradual de-dollarisation of the world economy,” says Anton Soroko, analyst with Finam Investment Holding. The main direction of its proposed activities is the financing of longterm infrastructure projects. Although final decisions on establishing the new organisations will be taken in Ufa,

Economies of scale: how the Brics nations measure up against each other

experts say that Brics faces challenges to its role as an alternative world club; in particular, competition from the Asian Infrastructure Investment Bank (AIIB), initiated by China. “The AIIB is indeed performing similar functions,” Mr Soroko says. Russia and China already have a record of striking bilateral deals outside the framework of Brics. During the official visit of Xi Jinping to Moscow on May 8, the two countries agreed to co-operate on China’s Silk Road Economic Belt project and Russian banks received substantial loans from China in yuan. But UFS IC chief analyst Alexei Kozlov says that the main competitors to both the Brics Development Bank and the AIIB are still western investment institutions, and their goals are the same in this respect.

Brics timeline – meetings and resolutions since the body was founded


Autumn may bring better crop of GDP figures for bruised economy

by the stagnation as a result of falling oil prices. Second, the decrease in investment activity is related to the growth of credit costs. Third, the growth of geopolitical risks and instability in the financial markets also influences companies' investment activity. Furthermore, it is still too early to say whether Russia has lifted off from the bottom of the current economic dip. It will come, but not before the second half of 2015, maintains Mr Soroko.

Autumn upturn

Recession Though Russian growth remains stubbornly negative, last winter’s predicted catastrophe has largely been averted VIKTOR ASTAFIEV SPECIAL TO RBTH

Russia teetered on the brink of economic collapse last winter. Ministry of Economic Development figures published in early May show that in the year to March 2015, GDP fell by 3.4pc. Figures for February showed a rate of economic contraction threefold lower: 1.2pc year-on-year. It seems the country has stepped back from the brink, with experts suggesting brighter days ahead − but not before the autumn. “The acceleration in the decline in Russia’s GDP in March is related to high levels of inflationary pressure and expensive credit, which has a negative effect on the dynamics of the country's economy,” says Alexei Kozlov, chief analyst at UFS IC. The forecast for inflation in 2015 is 11.9pc, while the Central Bank’s key rate, which private banks use as a reference point, was 12.5pc at the beginning of May.

Falling salaries The rate at which real salaries are falling continues to accelerate, ministry figures


show. After a 7.4pc reduction in February they dropped by another 9.3pc in March. In construction, the volume of work in March 2015 fell by 6.7pc, which is the worst result since July 2014, according to a ministry monitoring report. Earlier, the ministry had improved its economic outlook for 2015. Instead of a three-point fall in GDP, now the economy is expected to shrink by 2.8pc. In response to the reduction of real salaries, the population has actively begun saving money. According to the Russian Statistics Service, in the first quarter of 2015 Russians spent 78.1pc of their earnings on

goods and services, while during the same period in 2014 the percentage was 82.3pc. Meanwhile, the purchasing of securities doubled in the first quarter of 2014, suggesting that Russians are thinking more about savings and future financial security.

Cyclical pattern Economists believe that the drop in GDP is also due to cyclical problems. “The recession in Russia as a whole resembles more the acceleration of the fall in the final phase of an economic cycle,” says Anton Soroko, an analyst at Finam Investment Holding. In his view, the economy is, firstly, affected

Take note: after the rouble’s winter fever, the Russian economy may soon be restored to health

Many observers believe that Russia’s economy will continue to contract over the coming months. “The decline in GDP will continue, but not substantially,”says Boris Pivovar, a senior professor in the Department of Economy and Finance at the Russian Presidential Academy of National Economy and Economics. “During the spring and summer, retail usually falls, especially sales of home appliances and automobiles.” Oil and gas exports are also usually lower in the summer than in the winter months, while current political conditions make it unlikely there will be a surge in sales and contracts, he adds. “The negative trend will change in the autumn and winter, when gas exports will pick up, especially to Ukraine, and construction projects will have finished after the summer season,” Mr Pivovar says. He is also upbeat about retail sales, which traditionally see an upswing in the autumn and winter months, a traditional period for commercial revival. He predicts that Russia will see short-term falls in the first, second and third quarters of 2015, followed by substantial growth in GDP of between 0.51.5pc in the fourth quarter. Mr Kozlov says that as the rouble continues to stabilise, the pace of the growth of consumer prices will slow down and the cost of credit will drop, which in turn will reduce pressure on the economy and bring the dynamics of GDP back into balance.


China to finance major Russian projects Bilateral trade Deals highlight co-operation on energy, rail and aircraft manufacturing ALEXEI LOSSAN RBTH

Russian companies have signed several major deals with their Chinese partners, designated in both countries’ currencies, during Xi Jinping’s official visit to Moscow earlier this month. “[Russia and China] intend to strengthen co-operation in the financial sphere, including through a wider use of the rouble and the yuan in mutual settlements,” President Vladimir Putin said after meeting his Chinese counterpart. He added: “In the first two months of this year alone, the share of the national currencies in bilateral contracts exceeded 7pc.”The agreements mainly concern Chinese finance for Russian projects – an important point, given that Russian companies are denied access to western capital markets due to sanctions over Kremlin policy on Ukraine. Russia’s largest bank, state-owned Sberbank, opened a 6bn yuan (£623m) credit line with the China Development Bank. It will be spent modernising Russia’s biggest construction materials maker, Eurocement. The second biggest state bank, VTB, signed a deal with the Export-Import Bank of China for a 3bn yuan (£311m) credit line, and Vnesheconombank agreed a 15-year loan from the same bank for 3.9bn yuan (£405m) for specialised steel-making in Russia. Ilya Balakirev, UFS IC chief analyst, said the deals highlighted co-operation in energy, railways and aircraft manufacturing. Alexei Miller, head of Russia’s Gazprom and Wang Dongjin, vice-president of China National Petroleum Corporation (CNPC) agreed key terms for Russian gas supplies to China along “the western route”, the 1,680-mile Altai gas pipeline. The contract envisages the supply of 30 billion cubic metres of gas over 30 years. The cost of the project was estimated at its inception in 2006 at £4.5bn. Russia’s majority government-owned, United Aircraft Corporation (UAC) plans to supply 100 Sukhoi Superjet 100 aircraft to China over three years, at a cost of £2.3bn. Chinese authorities have promised to invest £3.8bn in the construction of a high-speed rail link between Moscow and Kazan. The 480 miles of track – to be built by Chinese companies – will reduce journey time by eight hours to just three and a half. Experts say the new contracts increase Russian dependence on Chinese capital. “China is already the world’s biggest economy in terms of GDP and is our immediate neighbour. Given the different sizes of our economies, differences in requirements and in financial resources, China’s ‘more senior’ position looks quite logical,” says Mr Balakirev. “To a certain extent, the expansion of co-operation between Russia and China was a forced step, although overall it is also a logical and mutually beneficial step,” says Anton Soroko, an analyst with Finam Investment Holding company.



Russia cements lead role with Brics presidency Alexander Gabuev POLITICAL ANALYST

The Brics Summit, to be hosted by Russia in Ufa from July 8-10, will be the seventh meeting for the organisation since its establishment and the fifth since the four Bric countries were joined by the Republic of South Africa. Until recently, the Bric countries were united only in the imagination of former Goldman Sachs economist Jim O’Neill, who created the abbreviation in 2001 to define the fastest developing economies in the world and to offer his clients new investment opportunities (the bank immediately began offering portfolios containing the four countries’ securities). Russia has special relations with the Brics. It was Moscow that breathed political life into the Brics stock exchange chimera. Back in 2006, on the initiative of Russian president Vladimir Putin, the first ministerial meeting of the Bric countries was held in New York. Then in May 2009, in Ekaterinburg, Mr Putin’s successor Dmitry Medvedev hosted the bloc’s first summit. Even though there were no concrete results from that event, it had an important effect for Russia: relations with the West at the time were at a low and Moscow demonstrated to the US and the EU that it had other influential partners. In recent years, the organisation has expanded its field of activity. Besides the political image, it also began creating new

international regulations. For now, Brics is most famous for its attempt to create an alternative to the Bretton Woods international finance architecture, which is dominated by the West. Countries actively coordinate their positions on these issues in the G20. However, in 2014, when it finally became clear that the US Congress had blocked the IMF reform approved by the G20 concerning the redistribution of votes in favour of the developing countries, Brics participants agreed to create their own bank and a pool of national currencies. In the future, this should help reduce the dependence of international finance on the dollar-euro duopoly. So far these have been the Brics’s main achievements. A key challenge to Brics’s effectiveness is the international structure and the specifics of its bureaucratic system. Brics is perhaps the only association in which the leaders’ summits do not represent the crowning of the presidency, but rather its beginning. Thus, one country prepares the agenda throughout the year, while another country make the decisions. Due to a lack of synchronisation, many initiatives remained poorly developed. Russia decided to put an end to this. Russia’s presidency formally began in May, meaning it has less than three months to set up the summit; the 2016 summit in China will be the result of a fully fledged yearlong presidency. Already within the framework of its management, Russia is doing its best to expand the agenda: the Kremlin has asked all federal agencies to present their proposals concerning cooperation with Brics. As a result, the Ufa summit’s agenda has a total of 130 points.

Presidency of the Brics will allow Moscow to position itself at the head of an association that offers an alternative to the global world order

Just as in 2009, in the prevailing international situation it is symbolism and not pragmatism that is important for Russia. After the annexation of Crimea and the start of the war in eastern Ukraine, the West actively tried to isolate Russia. Sanctions were introduced, Moscow was formally excluded from the G8 and leaders from the US, EU and their allies tried to avoid personal contact with Vladimir Putin during all international events. (In 2014, the Russian president left the G20 Summit in Australia ahead of schedule.) The May 9 Victory Day Parade on Red Square became another important symbol of Russia’s international isolation. Now, in Ufa, the Russian administration will have an opportunity to present the country as a leader of the non-western world. Presidency of the Brics will allow Moscow to position itself as a participant of an association that offers an alternative to the global world order. In the company of the largest economy in the world (at least that is how the IMF estimates China’s GDP in relation to its purchasing power parity) and the dynamic leaders of South Asia, Latin America and Africa, Moscow can confidently say that it does not intend to return to the G8, even if it is suddenly invited back. Therefore, any practical result obtained during the Ufa summit will be less significant than the symbolic meaning of the event, since the creation of new ideas has for now been the only field where the Brics was able to prove itself. Alexander Gabuev is director of the Russia in the Pacific Rim Region programme at Moscow’s Carnegie Centre.

Atomic power Even though there is still no prospect of Russian-built nuclear power plants in the UK, the two sides are continuing to co-operate

Nuclear collaboration between Russia and the UK continues

Majority in UK backs nuclear According to a 2014 survey commissioned by New Nuclear Watch Europe and carried out by ComRes, 58pc of the UK adult population supports the development of nuclear generation, 21pc actively promotes the use of nuclear energy in the country, while 22pc of the population is opposed to nuclear energy.


The UK’s energy market is considered the most promising for the development of nuclear energy in western Europe and one of the most attractive worldwide. Britain’s nuclear reactors are coming to the end of their design lives and all are being decommissioned or soon will be. At the end of 2012 the British government identified nuclear as one of the key elements of its energy strategy, which aims to guarantee energy supplies and reduce greenhouse emissions. However, not having a national company to develop reactor technology, the UK is obliged to use foreign experience. “At the moment, almost all the main suppliers of nuclear power plants are in one way or another trying to enter the British market,” says independent expert on electric energy, Alexei Gavrilov. Britain’s atomic energy market is of interest to many suppliers of nuclear technology. However, there are still no plans to build a Russian-designed nuclear power plant in the UK. “But this does not mean that Russian and British companies don’t have any opportunities to work

together and build other nuclear power plants,” says Alexander Yvarov, director of the Russian information portal. “Third countries offer a wide range of possibilities for co-operation.” Since 2009 the Moscow-based VNIIAES Institute, which researches issues dealing with the use of nuclear power plants, has been working with Britain’s Rolls-Royce to create a think tank for designing an automated process control system (APC) reactor. The partners “have accumulated a lot of experience in the development and supply of APCs,” the institute says. “Each company has unique technologies, which offer clients solutions that correspond to world standards and market requirements.”

Rolls-Royce connection According to Lyudmila Akaeva, deputy head of the institute’s APC department, Rolls-Royce is the world leader in the creation of control security systems for nuclear power plants. “The British company is very interested in participating in Rosatom’s projects.

Safety first: checks under way at the Rostov nuclear power station VALERY MATYTSYN / TASS

Foreign bidders to build British reactors The French company EDF, which has been working in the UK for many years and is a key supplier in the domestic electricity market, is preparing to build a nuclear reactor at Hinkley Point C based

on EPR third-generation pressurised water technology. The USJapanese company Westinghouse Electric, Japan’s Hitachi and various Chinese companies also have plans for several plants.

In fact, China no longer wants to limit itself to being only an investor (as a participant in the Hinkley Point C project, for example). It intends to propose its own reactor technology – the HK1000 reactor.

Rolls-Royce mainly supplies equipment for security systems and acts as a consultant, since it works according to western standards.” Ms Akaeva believes that in the future we may see British and Russian specialists collaborate on the Finnish Hanhikivi nuclear power plant, since Rolls-Royce already has good experience of working in Finland.

Leading position During exhibitions in Russia and Europe VNIIAES and Rolls-Royce stands have already displayed models that have a combination of APC elements jointly developed by the two partners. “We are impressed by Rosatom’s leading position in the world market,” says Neil Parison, executive vice-president, Rolls-Royce Nuclear Business. “If we look at the new projects that Rosatom won and signed in recent years, we’ll see that their amount is substantially greater than those of all the other nuclear companies. Rosatom works with the lowest risks and project budgets are respected. This is their forte.” Since 2007, Russia has been supplying fuel pellets for nuclear power plants in the UK under a co-operation agreement with Areva NP. The Russian company makes fuel for Britain’s only pressurised water reactor at Sizewell B. These are only two examples of the successful co-operation between Russia and Britain in the nuclear energy sector. The co-operation between companies and technologists proves that working in the British market is not a necessity for the Russian and British companies. What is necessary are mutual goodwill, competence and the global demand for the top-level products and services they offer.

Analysis P6_Wednesday, May 27, 2015_www.rbth.ru_THIS SUPPLEMENT IS SPONSORED BY ROSSIYSKAYA GAZETA


WAR AND PEACE: A YEAR OF GLOBAL CHALLENGES World Threats 2015 Report – an RBTH guide to the key issues with insight and analysis from the study’s leading experts

Andrei Sushentsov

Andrei Bezrukov



Andrei Sushentsov is director of the Foreign Policy Analysis Group and co-author of the World Threats – 2015 Report. He is also an international relations scholar at Moscow State Institute of International Relations (MGIMO) and Valdai Club research fellow.

The Russian economy: overcoming difficulties fast

disagreement with Japan shows where Beijing’s policy can lead. If its neighbours start perceiving China as a country that imposes its interests, then India, Japan and the US will unite against it. Sushentsov It will depend on how the European countries act in order to prevent Russia from defending China’s interests. The rules are the same here as in all situations with potential conflicts. We should also consider the government’s experience in conducting wars and changing from a state of war to that of peace. Governments that do not have such experience are inclined to immediately choose a belligerent solution. Moreover, war in the 21st century is very costly. For example, many think the US obtained valuable assets thanks to its Iraqi campaign. This is an illusion. Iraqi oil is produced mostly by non-American companies and Iraq does not have the resources to compensate for the costs that America built up during its presence there. Not even the US can afford to use force to hold on to resistant assets.

Andrei Bezrukov is an expert in strategic planning, an associate professor at MGIMO and co-author of the World Threats – 2015 Report. He is also an adviser to the head of the oil company Rosneft and a former US-based undercover intelligence agent.

Alexander Yakovenko AMBASSADOR


ON REGULATING THE CRISIS IN UKRAINE Bezrukov I doubt there will be soon a breakthrough. Essentially, two different peoples live in Ukraine. This is clear from the election results, from the use of language. In order for a state with such an internal rift to exist, it needs political and economic stability that would help eliminate the conflict.



influence the existing balance of power. But Washington sees no advantage in dominating Iran nor its opponent, Saudi Arabia. Therefore no one benefits when the United States and Iran are de facto enemies.

Sushentsov The fact that the United States is holding talks with Iran is a great step forward. In 2006 there were rumours of America possibly bombing Iran. Two years ago, when Israel was seriously thinking of attacking Iran’s nuclear facilities, the Americans prevented this from happening. Therefore, even if the current negotiation process fails, both sides will maintain their present positions, that is, those advocating political regulation. Iran is looking for a way out of the existing situation in order to realise its ambitions in the region. The US sees this and also wishes to free things up. That is why some kind of deal will certainly be made.

ON CHINA: WE NEED TO BE VIGILANT Bezrukov This is obviously a very important country, but Asia has other heavyweight nations: India, Japan and Indonesia, the latter of which’s economy is developing very quickly. In the course of the past 20 years, China, at the suggestion of Deng Xiaoping, tried not to enter the foreground of the world economy, but just accumulated its strength and concealed its real potential. But now the Chinese government is composed of a fifth generation of leaders. Will they adhere to the old principles or will China under their guidance become more active on the international scene? If the leadership chooses the second direction, we will all find ourselves in a new situation. Growing

Bezrukov Iran is a state with growing potential, a dynamic economy and a viable political system.The country is very big in regional terms, and that region is currently weak and engaged in a war. The US would like to be the arbiter which, without participating in the region’s wars (as was the case several years ago), can

Sushentsov The current Kiev government is doing everything so that the so-called achievements of the revolution remain short-term. If it was working towards the long-term future, it would try to consolidate the country and integrate opposing sides. It would try to create at least the appearance of a national unity government. But all the government’s actions are oriented only towards its main supporters. In the eastern, central and southern regions, many of the government’s actions are misunderstood – for example, the repression of representatives of the former government (including low-ranking officials). Basically, we are talking about purges of the former elite. What is happening is the same thing that happened in Iraq after the overthrow of Saddam Hussein – the removal of Baathists from all positions. And since they were predominantly Sunnis, the conflict became not only political but religious. And that led to a bloody civil war.

ON THREATS IN CENTRAL ASIA Sushentsov There is a risk that the transfer of power in a Central Asian republic will not happen peacefully, as in Turkmenistan, but violently, as in Kyrgyzstan. A coup could take place in North Korea. It is not clear what is happening there. A political cataclysm in Pyongyang could lead to rising regional tensions and war with South Korea. Bezrukov The situations in Ukraine and in the Middle East are beneficial to the US. America is getting ready for its presidential elections. This means that there will not be any radical changes in its foreign policy. There is also a consensus in America concerning Russia: it is considered a problematic country. The diplomatic machine has already begun to work. We just have to wait for the US allies bordering Russia to get involved. Consequently, there are few grounds for believing the conflict between Moscow and Washington will subside. First published in Russian on the website.

The legendary Swan Queen who defied the odds and the KGB


The ballerina Maya Plisetskaya, who has died at the age of 89, became an international star on the Bolshoi’s visit to the US in 1959. The indomitable Plisetskaya ignored the KGB agents who accompanied artists on foreign trips, attended“undesirable” concerts and exhibitions and made many friends in the West. Plisetskaya was determined to become a ballet dancer as a little girl. Her father was Soviet consul general on the Arctic island of Spitsbergen, which made training difficult. He was executed during Stalin’s purges and her mother was sent to the Gulag for three years, but Plisetskaya managed to complete her training during the Second World War. Plisetskaya concluded her studies in the class of Elizaveta Gerdt, one of the last dancers of the Marius Petipa era, a proponent of the sophisticated St Petersburg style. During the war years of hunger and deprivation, ballet lovers were prepared to pay their last remaining money for a ticket to Don Quixote in which the 17-year-old Plisetskaya had a 60-second variation at the

It was her spirit that ensured she did not give up when she was prevented from taking part in the first triumphs of Soviet ballet abroad

end of the four-hour-long ballet. In that solo number, Plisetskaya captivated the audience by her powerful leaps, in which she seemed to be flying above the stage. Unusually tall by the ballet standards of the time (5ft 4in) and with a perfectly proportioned body, Plisetskaya had a unique set of qualities: excellent co-ordination, extraordinary leaps, dynamic turns and gigantic steps. But the most important thing was that Plisetskaya, who was the niece of Bolshoi ballet stars Asaf and Sulamith Messerer, had the main principle of the Moscow ballet school in her blood: dancing came from one’s character and spirit. Maya’s main gift was her character. During her school years, it was the cause of a lot of trouble: to herself, to her aunt Sulamith (who looked after Maya while her mother was in the camp), and to her teachers. But it was her character that allowed Maya to establish herself and stand her ground in the Bolshoi Theatre. It was her spirit that ensured she did not give up when she was not allowed to be part of the first triumphs of Soviet ballet abroad: she was not taken on the theatre’s tour to London in 1956. Her very first trip to the West, the Bolshoi tour of the US in 1959, propelled her to stardom. Off stage, Plisetskaya was the opposite of a stereotypical Soviet citizen: contemporaries were astonished by her openness and recklessness; she completely disregarded the presence of KGB agents,


the so-called “art scholars in civilian clothes” who accompanied Soviet artists on foreign trips. Like Rudolf Nureyev, she easily made friends and fans in the West, went to “undesirable” concerts and exhibitions, and enjoyed a life that was usually out of reach of Soviet people, even when they travelled abroad. Plisetskaya’s talent knew no bounds: there was nothing old-fashioned or provincial in her dancing. The director of the Paris Opéra Ballet, Serge Lifar, a follower of both the Russian and French cultural traditions, wrote: “Maya is a wonderful daughter of Terpsichore. I am enchanted by her art, by her unforgettable performance of The Dying Swan.” Plisetskaya’s character ensured not only that she was able to get to know western ballet, but also that she managed to obtain permission to perform in ballets choreographed by Maurice Béjart, which were not in favour in the USSR. Plisetskaya, who died in Germany where she had lived since the Nineties, had a passionate interest in everything new and unusual in choreography. And she continued to perform on stage: for Maya Plisetskaya, dancing was not an occupation, it was a state of soul, which her body always enabled her to express. That is why both those who have seen Plisetskaya perform and those who have only heard of her will forever think of her as dancing on stage.



What RBTH readers think about the hot topics. From facebook. com/russiabeyond Julian Stevens on the new Russian law on NGOs This law is just one step to prevent what America has achieved in many other countries, by undermining governments and regimes for their own benefit. If the USA could be trusted not to interfere then there would be no need for such laws.


Ana Jaman on the Russian singer Polina Gagarina’s performance in the Eurovision Song Contest Congratulations to Polina on her second place. But I have to say, I am disappointed with Russia: 0 points from Russia for Serbia?


David Bullock on Russia and the West Does Russia need the West now? It is forging ahead with Brics, creating a new Eurasian Economic Union.


or many prominent international observers, it is obvious that despite tough challenges, including low energy prices, a weak rouble and western sanctions, Russia’s economy has overcome the worst, and started to stabilise, adapting to the new economic reality. As President Vladimir Putin highlighted in the recent Direct Line special TV broadcast: “It is clear there is no collapse, we have survived the peak of the problems, and the fundamentals of the Russian economy have strengthened”. Russia’s macro-economic state exceeded the expectations of some government experts and independent analysts. The foreign exchange market has calmed and the economy is gradually adapting to a floating rouble exchange rate. Public debt is low. The federal budget deficit remains at an economically safe level and the unemployment rate is within reasonable limits, meaning it is much lower than in other countries in comparable figures. The inflation rate is also expected to slow down in 2015-16. Despite difficulties, the government is fully meeting all its social commitments. According to the Russian Federal Statistic Service, the country’s GDP dropped in the first quarter of 2015 by no more than 1.9pc – well short of most predictions. Many international economists are revising their forecasts of the GDP annual contraction figures from 4-4.5pc to 3-3.5pc. In order to tackle the challenges, the Government has adopted and been implementing a $35bn (£22.6bn) anti-crisis plan that includes 60 measures aimed at reversing Russia’s worsening economic situation, which was exacerbated by the rouble’s sharp depreciation in the second half of 2014. The measures stipulated for 2015-16 are designed to accelerate the restructuring of the economy, stabilise strategic companies in the key sectors, balance the labour market, reduce inflation, moderate the consequences of consumer price increases for low-income families as well as secure sustainable growth and macroeconomic stability in the medium term. This plan is definitely working well. After losing almost half of its value in 2014, the Russian rouble has recovered by about 30pc already. Its rally was spurred by the Central Bank lowering interest rates, which brought investors back on to the Russian market. For instance, China is going to double its investments in Russia. There was a lot of speculation that Russia was running out of its reserves very quickly. To shatter this myth it would be right to mention that the Central Bank of Russia recently announced it will begin regular operations to buy foreign currencies on the domestic market in order to replenish its international reserves. The scope of such operations is going to remain at $100-200m per day. As President Putin said, the corporate sector paid its commitments of about $130bn last year. For this year the amount stands at $60bn, of which most has already been paid. It is widely acknowledged that the Russian financial authorities acted wisely and avoided measures such as the introduction of capital controls. As the Financial Times Moscow correspondent Kathrin Hille correctly put it, costs in local currency have fallen so consumers are more inclined to buy Russian – a process known as import substitution. Agricultural production is a government priority now, with a growth prediction of 1.4pc in 2015. It is not surprising that some economists now talk of “a renaissance” of Russian industry and agriculture, spurred by anti-crisis measures, brought forward by changes in the external environment. It is said that “Russians are slow to saddle but fast to ride”. But it should be noted that some of the relief came as a result of the reciprocal and indiscriminate effects of the external pressures that we have to deal with.

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The spiritual beauty of a neglected art PHOTOXPRESS

Triumph of colour: creating an icon is a complex process, little changed in hundreds of years


Many icons of contemporary culture pass through London, including those of pop, film and fashion, but holy icons of the more contemplative, painted variety are gaining a growing following in the capital. Cumberland Lodge is a 17th-century mansion in the heart of Windsor Great Park, on the Crown Estates. An educational charity, its patron is the Queen. I am here to meet Irina Bradley, a professional iconographer, visiting tutor at the Prince’s School of Traditional Arts, and the artist behind an exhibition adorning the panelled walls of its stately reception rooms called Return to Inner Sense.

Intense process


Iconic language Icons are painted figures of saints or the holy family and events associated with them. The key difference between icons and western religious painting is that in the Eastern Orthodox tradition, icons are venerated as part of the liturgy. Strict rules govern composition and how holy figures are depicted. “Iconography is a language”, according to Ms Bradley, “and if you want to change the grammar, there had better be a good reason for it.” Traditionally icons are not signed; the task of an iconographer is deemed to be to renounce ego and submit to the will of God. Icons are outside of time and space as the material world understands these categories. In this context architectural elements, such as

buildings, in icons can be considered symbolically as the representation of the inner spiritual realm. There are no shadows in icons: everything is penetrated by the divine light. Reverse perspective is used, with lines converging towards the viewer, inviting them into the spiritual world inside the frame. What is immediately striking is how modern some of the ancient pieces appear. The avant-garde masters Kandinsky and Malevich were famously obsessed with icons. And Matisse documented his fascination for the genre in a 1911 letter to Picasso from Moscow:“Until you’ve seen icons, you haven’t understood colour,’’ he wrote.

Scan this code to see a photo gallery of Russia’s most picturesque churches

Creating an icon is a complex process, a strict series of steps, little changed in hundreds of years. Three to four days are spent preparing the lime, cedar or poplar board. Rabbit-skin glue is then carefully boiled to prime the board. A muslin cloth is glued in place and 12 layers of gesso applied. Once dry, the board is sanded to perfection. Only then can a scene be created. It is an intricate work, involving complicated techniques for applying traditional pigments mixed in egg tempera. Ms Bradley says the process is about transformation, gradually revealing the beauty of natural materials. Humble ingredients, including clay, egg yolk, vinegar, chalk, ground and powdered minerals, linseed oil and a splash or two of boiled beer, are transformed into refined and delicate work. The final stage is oiling the work.“One slip at this stage”,says Ms Bradley, “and all the hard work will be jeopardised.”

Calm presence FIND MORE 96227

If the intricate process is designed to foster intense focus, it is with good reason. Icon painting has its roots in contemplative prayer, a meditative practice that was widespread in Byzantine monasteries. Sir Richard Temple, an

authority on Byzantine art at The Temple Gallery in Holland Park, west London, says: “The calm presence, the intense inner contemplation of the anonymous monks and craftsmen who created an icon hundreds of years ago is the artistic energy that radiates through the best examples”. Sir Richard founded the gallery in 1959, after he acquired his first icon while still at school for £11 in a bric-a-brac store off St Martin’s Lane. Later he took the icon for appraisal at the National Gallery, only to be told:“We don’t consider this art.” Undaunted, Sir Richard’s passion remains the backbone of a successful business. Thousands of valuable icons have passed through his hands, and he continues to campaign for a section of the British Museum to be dedicated to the genre. “I know where every icon is and every icon knows where I am”, he says mysteriously. Sir Richard first went to Russia in 1966, and remembers watching England’s World Cup win over Germany on a television in the bar of the Evropeyskaya Hotel in St Petersburg. “My love of icons is inextricably linked with my love of Russia”,he says. During subsequent trips to Russia, he would spend many days in museums, where he formed lasting friendships with Soviet curators and academics. He said he was impressed by “the extraordinary phenomenon of educated people living a nonmaterialistic life”; he was also able to track down some splendid icons. The hunt for icons can be as challenging as that for the Holy Grail. In ancient times, old boards would be repainted when their oil coating turned black. Stripping back layers sometimes reveals a true treasure. Most icons are of little interest, but occasionally a true gem is found. Icons in Sir Richard’s gallery sell for £1,500-£5,000, but when a gen-

Literature The modern Russian poet whose voice in exile spoke to the world DOROTHY BUTCHARD SPECIAL TO RBTH


As a young poet in Soviet Russia, Brodsky determinedly pursued his interest in English verse. Brodsky’s biographer Lev Loseff describes how he spent his time in exile in Norenskaya “slowly making his way through English texts. At night, in his hut on the


Nocturnal English

Mutual appreciation society: Brodsky, left, and WH Auden

edge of a village on the banks of a stream, there was nothing to distract him… His object was not to learn another language; it was to learn another poetry.” Brodsky’s fascination with poetry in English would last a lifetime. He translated the works of several poets into Russian, and in later years began to write his own poems in English. He also wrote several essays in Eng-

The tradition of Russian icon-painting goes back to the time when Christianity was adopted in Kievan Rus’ in the 10th century under Prince Vladimir the Great. It has its roots in Byzantine art, but later adopted unique Russian styles and saw a renaissance in the works of artists Theophanes the Greek and Andrey Rublev. The oldest Russian icons can be seen in Kiev, Novgorod, Pskov and Moscow region.

The Holy Grail

Joseph Brodsky: poetry in motion

Joseph Brodsky was one of the most prominent Russian poets of the 20th century. As a young man in the Soviet Union he refused to bow to the conformist attitudes of the day, writing poems that were characterised by a sparkling wit and independent thinking. Given the USSR’s repressive, censorshipdriven society it came as no surprise when he was arrested for “social parasitism” in 1964. He spent 18 months in a remote village as a punishment – and was expelled from the country in 1972. His poetic style combines technical brilliance with the intimate lyric poet’s concern with transcendent themes, such as love, death and nature. It is a measure of Brodsky’s skill that he was also able to master the poetic form in both his native Russian and English, a language that enchanted him from an early age.

A slice of iconic Russia

lish, many of which can be found in the award-winning collection Less Than One: Selected Essays.

A touch of Frost A profound early influence on Brodsky’s verse was the American poet Robert Frost. Many years after his first encounter with Frost’s poetry, Brodsky recollected his aston-

ishment when he first read translations in Russian at the age of 22. “With Frost,” Brodsky mused in a 1975 interview for the Paris Review, “it all started. “I was absolutely astonished at the sensibility, that kind of restraint, that hidden, controlled terror. I couldn’t believe what I’d read.” Brodsky saw the restraint of Frost’s writing as a way of expressing a uniquely American experience. Discussing Frost’s poetry with critic Solomon Volkov, he suggested that the “absence of emotion” was “representative of an art that simply doesn’t exist in Russian”. Brodsky’s admiration of Frost indirectly led to his discovery of works by the English poet WH Auden. In the Paris Review interview, Brodsky recalls sending his poems to Frost’s Russian translator, who replied with the suggestion that one of them “really resembles Auden in its sense of humour”. Brodsky sought out examples of poetry by Auden, who became his friend and mentor after Brodsky left the Soviet Union in 1972. It is difficult to underestimate Auden’s significance for Brodsky’s writing. The writer and critic John Bayley suggested: “Without Auden, Brodsky would possibly never have made himself into a poet writing in English.” After the elder poet’s death, Brodsky mused that “belief in the immortality of his soul becomes somehow unavoidable”. Discussing his efforts to write poetry in English, Brodsky explained: “My sole purpose… was to find myself in closer proximity to the man whom I considered the greatest mind of the 20th century: Wystan Hugh Auden.” Auden’s poem “In Memory of WB Yeats” was a particularly important reference point for Brodsky, who wrote of his fascination with its description of “time that is intolerant” yet “worships language and forgives”.


Painting Popular enthusiasm for holy icons is growing but galleries are reluctant to take this traditional Russian genre seriously

Icon campaigners: Irina Bradley and Sir Richard Temple share a passion for the traditional art

uine museum-quality piece turns up, bidding is intense. Restoring icons is a controversial issue; Sir Richard compares the process to plastic surgery for mature women. Interest in painting, viewing and acquiring icons goes far beyond Russian circles and major exhibitions have been hosted at the Metropolitan Museum in NewYork and London’s Royal Academy and V&A. Courses in icon painting are increasingly popular and the best icons demand ever greater prices. Icon-painting courses are fully booked, and campaigns for raising the profile of holy icons in the art world have attracted the support of, among others, the Prince of Wales and Rowan Williams, the former Archbishop of Canterbury. It is only the academic establishment, it seems, that is embarrassed to accept icons as worthy of serious critical attention. The British Museum turned down an offer from a wealthy benefactor to build a dedicated room for icons and declined an appeal from Prince Charles. Supporters have not given up, however, quietly confident that the unworldly beauty of icons transcends the tides of fashion and ideology.

Academic Adam Weiner suggests that this relation of language, time and space became a “cornerstone” of Brodsky’s own poetic practice. Auden’s poem also provided a template for Brodsky’s tribute to the poet TS Eliot, where he declares that “in the rhyme/of years the voice of poetry stands plain”.

American epoch After his departure from the Soviet Union and subsequent move to America, Brodsky became close with the American poet Robert Lowell. They met when Lowell volunteered to read translations of Brodsky’s poems on stage at the 1972 International Festival of Poetry, which Brodsky attended with Auden. Critic David Bethea judges that both poets had a profound influence as they helped Brodsky to settle into his new life in America: “It was these two – Auden and Lowell – who left an indelible personal residue on Brodsky and his language at a very vulnerable and impressionable time.” It was also at Lowell’s funeral that Brodsky first met fellow Nobel Prize winner Derek Walcott. “I found working with Walcott that his intuition is stunning,” Brodsky confided in a 1993 interview with Blair Ewing. The pair became close friends and mutual influences, translating each other’s work and sharing poetic techniques. Brodsky and Walcott also joined with Irish Nobel Laureate Seamus Heaney in the book Homage to Robert Frost, revisiting the influence of one of Brodsky’s early favourites. In 1985, Walcott praised Brodsky’s “industry, his valour, and his intelligence”. These qualities are most evident in Brodsky’s passionate pursuit of poetry in English throughout his career, as he endeavoured to draw together two great literary traditions in his own verse.


The bear necessities of life in the wild Nature When journalists joined a research project in Russia’s Far East, they got more than they bargained for

Nature in the raw: a female Kamchatka brown bear with her cub. Bears can be very dangerous, especially when startled or while protecting their young



How to get there


The best way for a UK-based traveller to get to Paramushir island is to fly from London to Petropavlovsk-Kamchatsky via Moscow. The journey takes around four hours to Moscow and another eight to nine hours to reach the Kamchatka capital. The cheapest way to get the island is by ferry, which goes from Petropavlovsk-Kamchatsky once a

week. The fastest is by helicopter. The schedule for both means of transport can be found, in Russian only, on the website of Severo-Kurilsk city administration: (Non-Russian speakers should use online translation.) The area is not well developed in terms of tourism services and detailed research ahead of a trip is recommended.


The facts about killer whales Killer whales are found throughout the world, but the Sea of Okhotsk is home to one of the largest populations. Large concentrations of the aquatic mammals can also be found in the north-east Atlantic, in the north Pacific near the Aleutian Islands, the Gulf of Alaska and in the Southern

Ocean off Antarctica. Killer whales are known as apex predators as they lack natural competitors. They are highly social and sometimes called the “wolves of the sea” because of their sophisticated group-hunting tactics. Their diet includes fish, molluscs, aquatic mammals, seabirds and turtles.

It was not wise to follow bear’s tracks to the opposite side of the river into the high grass. So, we decided to carefully peek around the corner, but there was no bear there. I breathed deeply and relaxed. We watched the river and talked about our plans. “I suddenly felt a disagreeable burning sensation. I turned my head and was astonished… a huge bear standing up on its hind legs was staring at us from behind the bushes. “We looked at each other for a few seconds. I think we survived thanks to Polina. The bear took its time evaluating the size of its enemy, and Polina must have added points in our favour: apparently the bear was near-sighted (as many bears are) and it must have perceived us as one large animal. “The huge animal got down on its four paws and started walking away slowly, while we quickly backed away. We stopped when we felt safe enough. The adrenaline rush slowed down. We were sure that we would not meet

any more bears today, so we forded the river and sat down on the sandy bay. “Suddenly we heard something splashing into the water near the sandy cape. It sounded like a huge animal was running in our direction and the roar of splashing was fast drawing near. We were separated only by the cape, and something huge was about to face us. “I rushed to the camera simultaneously trying to separate Polina from danger. I do not even remember grabbing the flare. At the same time the bear, which had gotten carried away with fishing and was moving at an incredible speed, jumped out from behind the cape. “I did not know what to do: should I shoot or should I take pictures? However, when the bear saw us it jumped into the water and swam to the far bank. I did take a couple of pictures. “Polina and I were shaking the whole way when we walked back to camp. When I was finally safe, I decided that I had seen enough bears for one expedition.”


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Journalist Diana Serebrennikova had a brush with a less threatening wild animal. July 7: “We settled in a fisherman’s house and spent our day cleaning the territory – sorting junk and burning trash. The guys caught their first trout. There was so much fish. This is great, because if a typhoon comes we will still have a chance to survive by catching fish, even after our buckwheat supply runs out.” July 13: “A fox came to visit us the day before yesterday. It was probably not happy about us cleaning the place and occupying the empty fisherman’s house on the shore. Therefore the fox ate our fish. “This morning near the washing area I ran into this sly creature when it was trying to steal our food once again. I managed to outrun the fox and hide our fresh fish from it. The fox can provide fish for himself – the river is filled with trout.” July 14: “We finally met the killer whales yesterday. First we heard one voice through a hydrophone receiver and then we saw multiple black fins a couple of kilometres away from our boat.There were about 12 individual whales there. They were breathing out in unison and moving south to the Pacific Ocean. “Soon the group split up to start hunting salmon. We could see a male killer whale hunt-

‘I was shaking the whole way back to camp. When I was safe, I decided that I had seen enough bears for one expedition’


Photographer Vyacheslav Zametnya encountered both killer whales and humpbacks – and two rather large bears – during his time on and around the island. “I dreamed about killer whales before going out to sea. And after couple of fruitless days we met several families at once in the Luzhin Strait. We filmed the material we needed for identification, took a biopsy and made recordings of vocal dialects. Everything went well. “We stopped working in the late afternoon due to a sand storm. Heavy fog started to fall over the waters.Visibility became much worse. There was a wall of milky fog around our boat and the loud languishing sighs of killer whales. Unusual sounds were coming from all around. It was as if the ocean created by Tarkovsky in [the feature film] Solaris had appeared. “There was no chance to locate our lost boat in this fog, and we decided to go back to the camp, staying close to each other. It turned out that in pursuit of the killer whales we had moved almost 40 kilometres (25 miles) away from base. “We started bouncing up and down on the waves in the heavy fog. Suddenly, someone shouted: ‘Humpbacks!’ I peered into the fog and saw gigantic shadows quickly shooting past… I was scared. “We reached the possible location of the whales and silenced the engines. Anticipation was high. We were literally boring holes in the space around us. Silence hung around; all we could hear was the sound of the boat swinging on the waves. I was standing on the prow turning my head in all directions. Tension mounted. “Suddenly, a whale of royal dimensions flew out from the depth creating an enormous wave. The seagulls flying above the water were demolished as if by a blast. “The humpback whale was flapping its white fins in the air. Time stood still; the whale was completing a breaching manoeuvre. It turned around and crashed on its back and the wave spread from the swirl it made. “Later, the biologists told us that it was a female with its baby. And the ‘infant’ was playing with us. It could easily have turned over our boat as if it was made out of paper.”


In the summer of 2014, Paramushir Island hosted a team of scientists in a small house on the shore of the Sea of Okhotsk in Shelikhov Bay, along with specialists from Russia’s Far East Orca Project (Ferop). One day when the sea was calm the team went in search of orcas – killer whales. The expedition was treated to a feast of wildlife: bird colonies, bay seals, wild bears and even a “tiny” humpback whale. But, most importantly, the scientists also discovered families of killer whales that had never before been spotted in the Russian Far East. The information gathered will allow scientists to learn more about the habitats of killer whales and other cetaceans. Extracts from journals kept by team member detail the thrilling – and sometimes dangerous – adventures during the pioneering research trip.

Voyage of discovery: a visiting fox, above, ate the team’s fish but one of the highlights of the trip was finding families of killer whales, right

ing: it was circling fish and catching them at lightning speed, jumping out of the water.” Being a photographer can be a mixed blessing as Vyacheslav Zametnya discovered when he took a stroll in the wilds of the island. “The morning fog started to fade away and the sun came out. It was too late to go out to sea, so I decided to explore an area where a bear had been spotted a couple of days ago. I did not wait long. After a few minutes I saw a huge bear shoot out around the bend of the river. It was running through the shallow water catching salmon. “I quickly put on my wader pants, grabbed a camera and a flare in case the bear tried to get too close to me. One of our team members, Polina, decided to join me. A petite, slender woman, her presence was to prove of critical importance. “We soon reached the mouth of the river, where the bear has been playing 10 minutes earlier. “We slowed down to plan our actions.

RBTH for The Telegraph in May  
RBTH for The Telegraph in May  

Sochi: symbolism or substance?