Page 1



DIPLOMACY: The seabed contains around 30% of unexplored natural gas reserves and 15% oil reserves, say experts


Arctic Calling: Russia eyes the energy-rich economic frontier

Ruble/Rupee Dollar Rates

After 14 years, Russia is renewing an effort to claim a vast territory on the outer margin of the Arctic’s continental shelf abutting the country’s land mass. Moscow’s bid is, however, likely to be opposed by the US and Canada RIBR



n early August, Russia submitted to the UN a revised application to claim the 1.2-million-square-meter (463,000-square-mile) underwater territory extending more than 350 sea miles from the coast, according to an announcement posted on the Ministry of Foreign Affair’s site. “For justifying its claim to this territory, Russia used a large collection of scientific data, accumulated in the course of many years of Arctic research,” reads the announcement. The potential economic benefits of claiming this underwater region are incalculable. “The Laptev Sea, as has already been proven, has a diamond canal on the surface of its shelf, which will allow Russia to become even more competitive with other countries in the production of diamonds,” said Vera Smorchkova, professor of labor and social policy at the Russian Presidential Academy of National Economy and Public Administration (RANEPA) Institute of State Service and Administration. Russia had applied to gain possession of a smaller part of territory, the Lomonosov Ridge, in 2001, but did not have required proof that the territory was an extension of the continent and belonged to Russia, said Smorchkova, also assistant to the chairman of the Senate Committee on the Affairs of

Russia has consistently stressed on the need for leaving the Arctic out of military rhetoric and games. the North and Indigenous Peoples. The 1982 UN Convention on the Law of the Sea allows countries to expand their economic zones, provided that the seabed beyond their bounds is a natural extension of the continental margin. Denmark, Canada, Norway and the US are also laying claims to sometimes-overlapping territories under the Arctic Ocean. This collective interest in the northern seas is based on geologists’ collective opinion that the seabed contains

almost 30 percent of unexplored natural gas reserves and 15 percent of oil reserves. In the application, Russia lays claims to the Lomonosov Ridge, Alpha Ridge and Chukchi Cap, and to the Podvodnik and Chukchi Ocean Basins separating them. Russia’s application will not be reviewed in the near future for procedural reasons, but will be included in the provisional agenda of the 40th session of the Commission in February/March 2016, according to United

Use of chemical weapons by ISIS militants in Syria brings Russia, US together SERGEY STROKAN, VLADIMIR MIKHEEV RIBR


he passing of a resolution by the UN Security Council, calling for an investigation into the use of chlorine and other chemicals in attacks in Syria, was a rare example of the US and Russia cooperating in full and in good spirit. Despite diverging views on the origins of the civil war in Syria and on strategies to resolve the conflict, the two nations are in full accord that the use and spread of weapons of mass destruction is unacceptable. The resolution was endorsed unanimously by the 15-member

Council, and the Hague-based Organization for the Prohibition of Chemical Weapons is now initiating the investigation process. The alarm was raised when a spokesman for Iraqi Kurd paramilitary forces reported victims of an ISIS attack, who were stricken with “blisters” that matched the symptoms of exposure to mustard gas. The Kurdish report said that ISIS had fired 45 mortars carrying chemical warheads. A proper investigation would reveal the truth, just as it did in 2013. According to the final report of the United Nations Mission to investigate allegations of the use of chemical weapons in Syria, dated December 13, 2013,


The US-Russia cooperation over chemical weapons underlines the need to unite against common enemy

Islamic extremists impose reign of terror on the occupied territories. the attacks carried out on March 19, August 24 and August 25 that year upon the Syrian government soldiers indicate that the rebels were in possession of sarin both before and immediately after the chemical weapon attack at Ghouta on August 21, 2013. Russian experts conducted analysis of their own and concluded that for the attack near Aleppo on March 19, “home-made” sarin gas had been

Nations deputy spokesman Farhan Haq. “The decision to expand the shelf margins is not only of a geographical and economic nature, but it also risks becoming a political issue,” noted Alexei Kozlov, a chief analyst at UFS Investment Company. With heightening tensions between Russia and the West, the final decision to expand the shelf may be postponed under various pretexts, said Kozlov. “Sooner or later, however, the issue will mostly likely be resolved positively, but the shelf will become Russia’s territory not without a fight,” he added. Russia’s claim to area in the Arctic will likely be opposed by countries such as Canada and the US, due to its rich deposits. Ed Royce, chairman of the US House Committee on Foreign Affairs said the US should be prepared to stand up to Russia in this matter. “The US and others bordering the Arctic must maintain a united front against Moscow’s aggressive ambitions toward this vital region,” said Royce. Ecologists believe ambitions from various countries threaten the Arctic. The melting of Arctic ice opens the broad expanses of the northern seas, making them vulnerable, said Vladimir Chuprov, director of the Greenpeace Russia energy programme. Foreign Minister Sergei Lavrov has emphasised many a time that it is necessary to leave the Arctic out of military rhetoric. “We recognise that all our actions in the region should be regulated within the framework of international law,” he said.

used. This time, Russia has voted for a comprehensive investigation under the auspices of the UN while cooperating on the wording of the resolution with the US. Could this be interpreted as a positive sign of diplomatic engagement on a dossier which is still divisive for Moscow and Washington? “Despite the Ukrainian crisis and despite the negative background of our relations, Russia has always said that it stands for broad cooperation on common threats and challenges,” says Sergei Oznobishev, director of the Institute of Strategic Assessment, a Moscow-based independent think-tank. “Cooperation with the US on the chemical weapons dossier could help make bilateral relations, which are in a dire state, constructive and, hopefully, in some areas even friendly.” If the apparent chemical attacks by the ISIS militants are authenticated, it might persuade the Obama administration to get more involved in fighting the anti-Western extremists, testing the water for a possible ground operation. It seems that for the duration of the anti-ISIS offensive the fate of the Syrian leader would be put on hold, pending the outcome of the war against a common enemy of the US and Russia.

Stock Market Index

Russians Pride Index: What do they admire?

What do Russians fear the most? Top 6 list




World in a churn: Who will lose less?

August Monthly Report FYODOR LUKYANOV Foreign policy analyst

FROZEN CONFLICTS IN THE POST-SOVIET SPACE The latest Russia Direct report explores the ongoing conflict in Ukraine, Russia’s tense relations with Georgia, and Russia’s ability to ensure stability on its borders. Can the Kremlin efficiently address potential security risks while avoiding the outbreak of new crises?



npredictable shivers in the stock markets. Teetering oil prices, dropping ever lower and lower towards the ground, plunging into depression are not only the “gas station states”, but also even the respectable Norway. The situation in the Middle East is becoming more and more complicated – it is no longer clear who is fighting whom, or what they are fighting for. The Minsk Process (on resolving the Ukrainian crisis) has stalled… This is the beginning of the new political season, which will run until the summer of 2016. In early September, a military parade will be held in Beijing, in honour of the 70th anniversary of the ending of the WW2, which China has now decided to use as an important political weapon. Then there will be

the celebrations in the UN General Assembly, dedicated to the 70th anniversary of the creation of this organisation. In the background of greater and greater tensions in the global atmosphere, we will undoubtedly hear many colorful statements. The Commission investigating the crash of the Malaysian Boeing has promised to deliver its final report in October – no matter what it contains, it will fan passions around the entire gamut of Ukrainian problems, as well as Russia-West relations. In January, the official election campaigning will begin in the US, and this has an impact on all global political issues. The European crisis will continue. It is no coincidence that at the end this summer, at the highest level of the EU, officials were saying that the migrant issues could blow apart the

entire EU project, even faster than the current economic imbalances within the Eurozone. The Middle East holds no promises, except for further decay. The splash of military and diplomatic activity we saw in the spring and summer of this year, got people saying that the great powers were seriously tackling the ISIS issue, and trying to stabilise this part of the world. The catch here, however, is that it is impossible to stabilise a situation which, in reality, is quickly disintegrating. The Middle East remains stuck the 20th century. No matter what happens here in the near future, external forces will concentrate on only one thing – to reduce the threat to themselves, and nothing more. The main unknown factor in the upcoming period is the behaviour of China. Events this summer in the Chinese markets, and the devaluation of the yuan, have led to speculation that the “economic miracle” was coming to an end. Since the end of the 2000s, after the global financial crisis, discussion centred on the idea that in the future world order, China would become a superpower. The spectre of the growing “dragon” largely determines the global atmosphere, stimulating interest in the non-West. If this spectre begins melting, it could also change global mood. Against the backdrop of this world going to pieces, where the main ques-

tion is – not who will be able to take advantage of new opportunities, but who will lose less, Russia seems locked in a paradoxical position. We can boast of an unprecedented level of national consolidation. The popularity of the national leader is not affected by any events at the global or local levels. Russian society is ready to endure hardships, it sees no alternatives to the current establishment, and thus there is cohesion. Support takes the form of approving everything that the bosses do. Public opinion does not seem to be expecting from the country’s leadership an action strategy, a plan, or sharing the approach of the national leader. And the latter has a fatalistic mindset – come what may, we can deal with it. This makes great sense: the modern world has shown how quickly predictions can be proved wrong, and development strategies fall apart. In the meanwhile, there will appear a new configuration in the global system, and not by the will of the players, but on its own, as a consequence of objective processes – stemming from the laws of human nature and climate change, to technological changes. And this is sure to happen, given the fact that the pace of life is getting a lot faster than we think.

Read the opinion section



WORLD ORDER: Russia supports status quo as West could push for those new members that support agendas of US and EU


UNSC reform: Who will win and lose?

Russia, Reliance Aerospace to make 200 copters in India The Russian government has selected Reliance Defence and Aerospace (RDA), a company owned by Indian industrialist Anil Ambani, for a joint venture to manufacture almost 200 Kamov 226T helicopters in India. The contract is estimated to be worth around around US$ 1 billion, and is the second deal won by the Ambani venture from Russia. RIBR

would immediately arise – why then not accept Brazil, Japan or Germany.

Modi-Putin summit: Swaraj, Parrikar to visit Russia in Oct.




elebrating its 70th anniversary in September this year, the United Nations will once again be faced with the question of making reforms to this organisation created in the Cold War era. The primary issue remains the possible expansion of the UN Security Council, by the addition of new regional powers, such as India, Japan, Brazil, and Germany. Moscow is sceptical about such proposals. “Of course, by broadening membership, the Security Council would become more representative, but it would definitely not make it more effective,” Vitaly Churkin, Russia’s Permanent Representative to the UN, told TASS on August 1. Sometimes it is difficult to get 15 members to agree on issues, and if this number increases to 25 or 27, it would

Ahead of the visit of Prime Minister Narendra Modi to Moscow in November/December, External Affairs Minister Sushma Swaraj and Defence Minister Manohar Parikkar are expected to visit Russia for preparatory talks in October. “The ministers will be taking part in the meetings of the intergovernmental commissions that are working on preparations for the Indo-Russian Summit,” a diplomatic source told RIA Novosti. RIBR

become difficult to even hold a discussion.” “Reform would serve the interests of those states that adhere to ‘bloc discipline’ – the US and its allies. The Americans started promoting this idea since the mid-1990s,” Timofei Bordachev, Director of the Center for Comprehensive European and International Studies at the NRU-HSE, told RIBR. “In this way, they are trying to solve the basic problem of Russian and Chinese veto powers.”


Russia is sceptical about UNSC expansion as experts say it will diminish its effectiveness

The UN reforms fit into the Russian concept of a multipolar world. Brussels. Therefore, Russia will wish to have the status quo preserved, or seek reforms to the structure only with the consent of all interested parties (which in fact will mean maintaining the status quo, as all countries will never agree),” the expert explained to RBTH.

Change is needed, but not now Andrey Sushentsov, managing partner of the analytical agency Foreign Policy, believes that the UN reform fits into the Russian concept of a multipolar world. “However, for now, it is very unlikely that the Security Council can be reformed – as the West will try to promote those countries that share the same agendas as Washington and

UNSC: Who makes the cut? The criteria for the inclusion of new members have stirred up a debate. “The question arises – membership

based on what right? The current permanent members of the Security Council derive their rights from their victory in the bloodiest war in human history. The potential new candidates were not the winners of this war, or were even members of the losing side in this conflict,” says Bordachev. According to him, if just one candidate country (for example, India) is admitted on the basis of political and economic indicators, then the question

UN vs BRICS There is a risk that some of the great powers, if they are not allowed membership in the elite club of permanent members of the Security Council, will start looking for other ways to strengthen their power, which could then possibly undermine the UN. However, experts believe that such a scenario is unlikely. “Parallel formats are already being developed – such as the BRICS. Perhaps in the future, these will come up with their own proposals for making reforms to the Security Council. However, they will not work on undermining the UN’s work or creating a parallel organisational structure,” says Sushentsov. The idea of increasing the number of permanent members in the Security Council is irrelevant, in part because that does not solve the main task – to increase the UN’s efficiency. “The potential new members do not have much experience in international politics or diplomacy. These countries are not able to bring to the Security Council any new initiatives to help solve current international problems,” says Sushentsov. If we are to talk about increasing the effectiveness of the UN, then some experts have proposed alternative recipes. “To re-store to the UN its status, authority and competency, there is no need to reform the UN, but rather to respect its constitution and decision-making processes on all key international security issues. We need to use that which is already in place,” says Bordachev.

FINANCE: The founding shareholders of the new agency will be around 25-40 firms, will have initial capital of $45.6 million

Moscow to launch its own credit agency

Group visa-free travel scheme to Russia



ussia will launch a new credit ratings agency by the end of the year in a move that follows accusations by officials in Moscow that downgrades issued by US-based ratings agencies were politically motivated. “The Russian market needs a strong credit ratings agency with a high level of corporate governance and professional competence, capable of satisfying the interests of the economy,” the Russian Central Bank said in a statement. Russia needs a ratings agency that is “authoritative enough for Russian and foreign investors,” the Bank said. The push for a home-grown debt ratings agency comes after stinging downgrades earlier this year by US firms Standard & Poors and Moody’s. The ratings agencies cut Russia’s sovereign debt to junk status, citing risks

The visa-free travel for tourist groups, implemented between China and Russia, should be extended to the other BRICS countries as well, said Oleg Safonov, Head of the Federal Tourism Agency. “The regime of visa-free travel for tourist groups between China and Russia has been proven to work. . The most promising among theseis India,” he told RIA Novosti. He cited data which shows that in the first quarter of 2015, the number of foreign tourists coming to Russia increased by 16%, compared with eriod last year. RIBR

stemming from Russia’s absorption of the region of Crimea and the subsequent sanctions imposed by the US and Europe on Russian firms. The downgrades were seen by many in Russia as having political underpinnings. The new agency is set to be headed by Yekaterina Trofimova, first vice-president of Gazprombank, one of the country’s largest lenders. Trofimova worked for more than a decade at Standard & Poor’s, where she served as director of the group for financial institutions in developing countries. The national rating agency’s capital is expected to be three billion rubles ($45.6 million) with an equal distribution of shares among investors. The advance subscription for the shares will be held before the end of August 2015. In an interview with the newspaper RBK-Daily, Trofimova said that the founding shareholders of the new agency will be around 25-40 firms participating in Russian financial markets


Russia plans a new debt ratings agency that will counter the agenda of US-based Big Three

Minister of Economic Development Alexey Ulyukaev is pushing for a Russian ratings agency after the country was hit with downgrades from US firms. including banks, financial corporations, insurance providers. Companies that have shown an interest in joining the project include Russia’s second-largest state-owned bank, VTB; one of the country’s largest private banks, Promsvyazbank; invest-

ENERGY: Iran set to play a key role, TAPI project losing its attractiveness due to rise of Islamic State

Changing Asian gas market: Rostec to build gas pipeline to Pakistan VIKTOR KUZMIN RIBR



n early August, media reports claimed that PT Global Resources, a subsidiary of Russian defence technology giant Rostec, would take part in the construction of a gas pipeline to Pakistan. The draft agreement on the construction of the North-South gas pipeline (from the coastal city of Karachi to Lahore on the border with India) has obtained support from the Russian government. Rostec’s partner in Pakistan will be the state-owned Inter State Gas Systems Company. The Russian side will work on the financing for this project. This project will make maximum use of Russian technologies, materials, equipment, and products. Pakistan is seeking to overcome its national energy crisis. Islamabad has already signed a preliminary agreement with Qatar for the supply of LNG, but first a terminal needs to be built to receive and handle this gas. Back in December last year, within the

framework of the Russian-Pakistani Intergovernmental Commission, agreements were reached on the implementation of infrastructure projects in the country’s oil and gas sectors. In the first phase, Rostec will build in Pakistan a floating regasification terminal and a pipeline system for its transportation. Subsequently, the Russian company will receive these under a concession agreement for 25 years. Rostec, however, has no experience

in developing gas projects. “Russia is supporting the construction of the pipeline, fighting for its share in the engineering and pipeline products market. This is the obvious goal in the struggle for the Pakistani market,” Olog Dushyn, an analyst at VTB24, told RBTH. However, according to him, this project also has a geopolitical component. “From a financial point of view, this project is not very attractive, because the tariffs here are much lower than in typical pipeline projects undertaken by Gazprom (which earlier also tried to enter the Pakistan market),” said Moisey Furschik, managing partner of the FOC Company. Furschik believes that this new pipeline is designed for gas supplies from the Arab countries, and not from Iran, which shares a land border with Pakistan. Nevertheless, he feels certain that the Iranian natural gas will be transported to the markets of Southeast Asia, although via other routes. Yuri Solozobov, head of the International Energy Policy Center, believes that the lifting of sanctions

against Iran, in the near future, will lead to the reformatting of many existing energy projects in Central Asia. “This will significantly strengthen China, enrich Tehran, and have an impact on the energy interests of Russia. The trigger in this situation will depend on which of the competing two routes is given priority, when it comes to the construction of gas pipelines – the IP (IranPakistan) or the TAPI (TurkmenistanAfghanistan-Pakistan-India),” he told RBTH. Solozobov says that, after the removal of sanctions on Iran, TAPI will lose its former investment attractiveness, while preserving all the war risks of passing through Afghanistan. TAPI would have a total length of 1640 km, of which 735 km would pass through the territory of Afghanistan, and 800 km through Pakistan. “On any given day, anywhere on the 735-km stretch of TAPI that passes through Afghanistan, there could occur, theoretically, an explosion. Today, there are more promising projects for investments in this region – with one such project being a gas pipeline from Iran to Pakistan and then further on to India,” he stressed. Such a project already exists – this is the Mir Gas Pipeline. Its total capacity is calculated at 55 billion cubic meters annually (33 billion for India and 22 billion for Pakistan).

ment giant, the BIN group; and the largest insurer Rosgosstrakh. Financial analysts expressed views ranging from welcoming to doubtful when asked about the new agency. “I am sceptical about the idea of creating such an institution, because I don’t

really understand the meaning of its creation and what goals are set for this agency,” said Ilya Balakirev, chief analyst at Moscow’s UFS IC, pointing out that the main asset of rating agencies is their reputation earned over decades. “The leading role of the Big Three US rating agencies in the global rating market is due to the historically high level of quality of their forecasts,” said Anton Soroko, an analyst at the Finam investment holding. However, the development of alternative appraisers will, in the long term, be a benefit not only to Russia but also to the world at large, Soroko said. He added that the rise of the Chinese ratings agency Dagong has assisted the expansion of China’s domestic bond market, the so-called “panda bonds.” The Chinese agency has already assigned the highest rating to the Russian gas monopoly Gazprom and its subsidiaries – the oil company Gazprom Neft and Gazprombank. According to Balakirev, the idea of the creation of the agency in Russia can be viable if it is positioned as an institution to facilitate access to credit markets for small, local issuers.

Digital TV to broadcast films, cartoons in Hindi Russia’s Digital TV and Prasar Bharati will jointly produce content and distribute paid channels OLGA SENINA RIBR


ndia’s public broadcaster Prasar Bharati and the Russian company Digital TV OJSC (DTV) have signed an agreement to co-distribute paid TV channels and to produce content. By 2016, Indian viewers will be able to watch Russian movies, cartoons, documentaries, and educational programmes. The initial investments of the Russian company are expected to reach several million dollars. In 2016, Indian audiences will be able to obtain access to two Paid-TV channels of the Russian company Digital TV OJSC, a joint venture of the state television and radio holding VGTRK (74.67%), and telecommunications company Rostelecom (25.33%). Indian children will have access to the Mult Channel, which broadcasts Russian cartoons, and the science and educational IQ HD Channel, which shows documentaries suitable for family viewing, said Dmitry Mednikov, deputy director of

VGTRK and chairman of the board of directors at DTV. Opportunities for Russian television products to enter the Indian market, and vice versa, are charted out in the Memorandum of Cooperation in broadcasting signed on August 20 between Prasar Bharati and DTV. For the first time in the history of VGTRK, its channels will be translated into a foreign language. In India, all children will be able to watch Russian cartoons in a language they understand by August-end. The first film, to be translated into English and Hindi, was the documentary film The Far Eastern Leopard. DTV’s plans also include translating into Hindi the “Bestseller” TV Channel’s serials. VGTRK, for its part, will broadcast and distribute Bollywood films to Russian television audiences. “Indian films find their audiences in Russia,” said Mednikov. Russian audiences might be interested not only in the “soap operas”, but also in the documentaries, such as the history of the Taj Mahal, he said.



BUSINESS: Corona Dairy produces 20 kinds of cheese and its current output is around 9-10 tonnes

FAMILY: Attitude towards parenting is changing

Indo-Russian cheese bond




ay cheese! And the story of Charudatta Babar and his wife Olga makes you sit up and take notice. While Russian and Indian authorities are working hard to get Indian dairy products, including cheese, to consumers in Russia, the couple, originally from Dnepropetrovsk, are busy manufacturing European-quality cheese under the Corona Dairy brand at their factory in Satara, 250 kms from Mumbai. Babar’s passion for cheese goes back to his childhood spent in Gujarat, where his father worked for Gujarat Cooperative Milk Marketing Federation (GCMMF) popularly known as Amul, the largest dairy products manufacturer in India. “I was first introduced to cheese by Dr. A. K. Choudhary,

a cheese pioneer in India. He also worked for Amul. He put that thought in my head, that’s how I started,” Babar recalled. Today, he is competing with the Choudhary Cheese Bazar, a Noidabased company established by Dr. A. K. Choudhary.

The cheese market in India is valued at $ 237 million and is expected to record annual growth of 20% to reach $590 million by 2018 Babar set up a cheese factory in 2006, and soon after he travelled to Australia where he completed a crash course in cheese making that helped him improve the quality of cheese manufactured at his factory. Three

years later, Corona Dairy was able to expand the factory, and set up high quality controls. Cheese lady “When I first came here, the factory occupied just two small rooms”, Olga said. “Today, we have a big factory with separate areas for each process.” Olga joined her husband in this business about three years ago when she realised that a housewife’s life would not satisfy her ambitions. Before moving to India, Olga worked in the quality control department of a large pipe plant in Dnepropetrovsk. A journey from pipes to cheese was not that difficult for Olga who is passionate about learning new things. “Every cheese requires different time for aging. Some cheeses are aged for a month or three months, some take up to several years,” Olga said. At the

factory, apart from controlling the staff and the processes, she is responsible for maintaining proper timings for each of more than 20 varieties of cheeses that Corona Dairy makes. “When you make 15 tonnes of cheese every month, it’s quite a task,” her husband notes. The factory’s current output is around 9 to 10 tonnes, while in winter, which is considered the best season, it goes up to around 16 tonnes. Corona Dairy’s product line includes mozarella, cheddar, parmesan, gouda, Emmental, Edam, ricotta and mascarpone cheeses, among others. The cheese is sold through distributors to restaurants and hotels in Ahmedabad, Surat, Mumbai, Pune and Kolhapur. Corona tied up with the Fortune Group of hotels and supplies premium cheeses to Mumbai’s top rated hotels, including The Taj, The Trident, Hyatt and JW Marriott. Until recently Goa, where Corona Dairy has its own marketing set up, was the largest market for the company, Babar said. However, the big drop in Russians tourists’ arrivals last season affected cheese sales there. Before processed cheese slices filled Indian supermarket shelves, it was only paneer that was referred to as cheese in India. A report by Gyan Research and Analytics in 2014 estimates the cheese market in India at $237 million and predicted a healthy 20 percent annual growth to reach $ 590 million by 2018. However, the Western-style cheese segment in India is still tiny since the major share is taken by processed cheese manufactured by Indian giants such as Amul, Parag Milk Foods (“Go” brand), Britannia Industries and Mother Dairy. Corona Dairy is among a handful of Western-style cheese manufacturers across India serving niche customers; five star hotels, continental restaurants and expats.


A factory in Maharashtra, set up by an Indo-Russian couple, is making Western-style cheese and counts top hotels and restaurants as its clients

Emerging trends: Raising daughters in modern Russia Russian girls are required to possess three traits: civility, attentiveness, and caring attitude MARINA OBRAZKOVA RIBR


ussian parents are slowly beginning to apply a scientific approach to raising children, particularly girls. During the Soviet era, the function of parents was often replaced by educators and teachers in the upbringing of children. Today, however, people try to spend time with their children, and even attend training courses and read books to learn how to be good parents and communicate with children. It is especially important that fathers show an interest in their children’s upbringing. Earlier, in many Russian families, fathers largely had only a formal presence. This created a whole generation of women who saw no point in founding and maintaining a traditional family structure. According to European norms, a girl is brought up freely. She values her independence and demands that men be equal partners. She learns from childhood to take responsibility for her own actions. In Eastern cultures, however, the father occupies a dominating position and makes decisions for the daughter, and also taking responsibility for these decisions. Russia lies somewhere in the middle; men are very strict with their daughters in some areas, while giving them a great deal of freedom in other areas, which some girls cannot handle or know how to use. Often, due to these dichotomies, it is not easy for Russian women to build a family life.

PEOPLE: China, India and Iran have become most promising markets for inbound travel to Russia

Easing visa for tourists from BRICS states SERGEY IVANOV RIBR


ussian President Vladimir Putin has offered to ease visa regime for some categories of tourists from BRICS countries. “In order to attract foreign tourists, it is probably worth considering to further ease visa regime - for instance, to expand practice of visa-free group exchange. And it can be done for all countries which

we call BRICS countries,” Putin told the Russian State Council’s presidium session on tourism. “In general, Russian and global experience shows that the liberalisation of visa regime almost always leads to growing tourist flows,” Putin said. After easing visa regime, the flow of Israeli tourists to Russia has increased by more than two times. A similar situation can be seen in case with Turkey (41% growth) and South Korea (40%

growth). “Of course, it is important to promote more actively vacation and travel opportunities in Russia, to do it both inside the country and abroad, use media and new informational technologies to consistent promotion of Russian tourism, open new tourist offices abroad and tourism information centers in Russia,” the president added. China, India and Iran have become the most promising markets, in terms of development of inbound tourism travel to Russia, the portal InterfaxTourism learned from Irina Tyurina, press secretary for the Russian Union

WORK: CrocoTime can track activities of up to 10,000 users simultaneously

Keeping a watchful eye on employees Infomaximum’s employee-monitoring software CrocoTime is becoming popular in Russia DINARA MAMEDOVA RIBR


ith 20,000 employees already under its watchful eye, CrocoTime is quite popular with some of Russia’s biggest companies, including global energy giant Gazprom, leading financer Tinkoff Bank, as well as the local branch of Danish shoe retailer Ecco. But what is so special about the programme? CrocoTime is installed on the client company’s server and comes with socalled “monitoring agents” that access employees’ computers. The software tracks websites that are visited and programmes that are used, and sorts all activities into three categories: productive, unproductive and incidental. It is up to the client to decide what is good or bad for their employees. “Incidental activity is something that stands apart,” says Alexander Bochkin, CEO of Infomaximum. “Basically, this is when an employee uses tools that he is not supposed to use, going beyond

his direct responsibilities. Such activity shows the company has some management issues. For instance, one of the companies we worked with found out their client relations managers spent about 60 per cent of their time working in Microsoft Word, drafting contracts manually. After having detected that the department switched to using document templates.” CrocoTime also has the ability to track idleness: if someone’s keyboard and mouse do not get used for some time, the software considers the employee as absent. A perpetual licence for a “monitoring agent” is currently priced at 2,560 rubles ($47.80) per employee computer. According to Bochkin, due to his software most companies reduce the amount of wasted time from 25-30 per cent to 5-7 per cent. CrocoTime is not the only employee monitoring software available on the Russian market. Other products include Distsiplina, OfisMETRIKA, Stakhanovite and YawareOnline – all

equipped with similar capabilities, including tracking website activity and calculating hours worked. “CrocoTime falls somewhere higher than the middle of the price range and is designed for larger companies,” Bochkin says. However, developers claim that CrocoTime has a host of advantages over other companies. Firstly, the programme can track the activity of up to 10,000 users simultaneously. Secondly, it generates statistics not only for each employee, but also for each subdivision of the company for a specified period of time, whether it is a week, a month or a year. Lastly, it includes automatic settings for certain departments such as accounting or IT. According to Bochkin, Infomaximum seeks to promote Crocotime in Europe, North America and Asia. However, Sergei Akashkin, an investment analyst for Prostor Capital, believes demand for the programme both abroad and in Russia will be limited. Akashkin believes that the productivity of employees generally depends on the time of day and this factor can influence the accuracy of the data collected by the software and, in turn, have an impact on the demand and sales growth. Besides, he adds, employees have recently started to circumvent monitoring attempts by using tablets and smartphones to surf the internet while at work. Most managers understand that and do not see the use in installing monitoring software.

of Travel Industry (RUTI). “This season, the east has become a clear winner. The leading position is occupied by China, which is followed by Iran and India,” explained Ms Tyurina. Russian tour operators believe that India is another promising inbound tourism market. This market has been poorly developed, primarily because of the difficulties in arranging cooperation with local tour companies, as well as due to difficulties in obtaining Russian visas. Experts believe that if Russia will simplify visa rules for Indians, the number of tourists from this country will increase significantly.

Strictness and indifference The 33-year-old Maria has been in a long-term relationship. The young woman has chosen to be single, and

Fast, cheap and clean: Revolution on wheels sweeps across Russia More Russians are using bicycles and scooters to commute for work and entertainment ANASTASIA MALTSEVA RIBR


t may not appear so initially, but a cycling revolution is quietly underway in Moscow. Following in the footsteps of cities across Europe, more and more of the city’s residents are beginning to abandon public transport in favour of bicycles and scooters. Over the last five years, the Russian capital has seen a surge in demand for bicycles, with around 150 rental points now in operation. This figure is expected to double to 300 by the end of the year. Besides bicycle rental outlets, there are now 755 bicycle parks in the city, and even cycle lanes are beginning to appear. Literary editor Oxana Agapova rides a scooter to work and on business in Moscow from May to September. “Once the city is freed from the snow, my speed increases three times, because I can at last travel on a scooter,” she said. “It’s a 15-minute walk from my home to the metro, but a scooter reduces this time to five.” “For me, the scooter is the best mode of transport. The car


President Putin’s offer of visa-free group exchange can boost tourist flows to Russia

thinks it not worth building a family like the one she grew up in. “My father basically did not participate in raising me; Mama did everything, but she did not have much time for us because both parents had to work. As far as I can remember, I always had to make my own decisions, and I am not very good at seeking counsel,” Maria told RIBR. Her 34-year-old friend Alexandra says she always wanted a child, but it did not matter who the father would be. She got married to a dominating man, and divorced after living together for six months. The woman has a fiveyear-old child who she raises herself. Svetlana Rudneva, head of the charitable foundation ‘Family and Childhood’, explained to RIBR that when a girl is being raised in Russia, the foremost values they try to develop in her is courtesy, attentiveness, and a caring attitude. If a girl is not coarse in manner and is able to care for others, then she receives approval in the family, from the father and others around. If the father supports and commends the outward appearance, then the child will not have problems in the future. “In the traditional Russian family, the father always participated in the rearing of the children; he taught them crafts, how to work in the field and so on,” Rudneva said. “But in Soviet times, this changed because both parents were sent to work and it was proclaimed that teachers and educators must deal with the children. Rudneva says Russians have now started to show “increased interest on the part of parents in psychological literature and training programmes where they learn how to talk with their children about the opposite sex.” “And this applies to fathers as well as mothers.”

is inconvenient because of traffic jams and paid parking lots in Moscow. It’s too far to travel to work by bike and they won’t let you with it in the metro,” said Agapova. “I’ve been cycling for more than three years. I have a city bike with multiple speeds and a wicker basket in front to put stuff in,” said ballistics engineer Anna Konstantinova. “Previously, the distance from home to work was 5.5 km and the ride took 25 minutes. By public transport, the same route took 40 minutes. So I went by bike every day, even in winter.” Recently, Konstantinova has changed her place of work, and it is now 21 km from her home to the of-

fice, which takes one hour and 40 minutes. “It’s now too far, but I try to ride my bike at least once a week,” she said. Konstantin Trofimenko, a senior researcher at the Institute of Transport Economics and Policy at the Higher School of Economics in Moscow, said alternative non-motorised forms of transportation like bicycles and scooters, besides Moscow, are also becoming fashionable in St. Petersburg, Chita, Khakassia and Buryatia. “They are mostly used by young people, the people for whom the environment and healthy lifestyles matter,” he said. In Asia, people ride bicycles because they cannot afford to buy a car. In European cities, buying a car is not a problem, but all that a city dweller needs -- work, entertainment venues, shopping and recreational facilities -- are within three to five km of their home. Cycling is, therefore, the most convenient option. Russian cities are built according to the “Soviet type”; work and entertainment is in the city centre, with residential or “sleeping” districts located on the outskirts. “To go from a ‘sleeping’ district to the centre is too far (10-20 km), so people rarely use the bicycle,” said Trofimenko. “In Russia bicycles and scooters will become more popular with citizens as the decentralisation of cities gradually progresses,” she said.




INNOVATION: Now, numerous versions of Tetris have flooded the market, spanning personal computers, home gaming platforms and handheld consoles


Putting Tetris on the Nintendo game console helped the Japanese firm beat the competition.

Alexey Pajitnov started developing the game Tetris with the help of Dmitry Pavlovsky and Vadim Gerasimov in 1984 .

How Tetris conquered the gaming world The Soviet-made video game from the 1980s morphed into a global cultural phenomenon Specially for RIBR


n the summer of 1985, a surreal hush fell over the computing department of the Soviet Union’s top state-run scientific research center. Wastepaper baskets overflowed. Ashtrays went unemptied. Researchers hunched over their computers, obsessed with the latest Soviet invention. Outside, the country’s socialist economy was grinding to a halt. A political crisis was brewing in the Kremlin that would, just a few years later, tear the country apart. But for the moment, economics and politics seemed far away from Moscow’s Soviet Academy of Sciences. The computer department was laser-focused on a technological breakthrough, one that would change the world. Researchers

spent hour after hour “testing” the new programme. Its inventor, Alexey Pajitnov, called it Tetris. The devilishly addictive video game would eventually go on to conquer the world, selling millions of copies and finding its way onto seemingly every computer operating system ever devised by humanity. By today’s standards, the design is almost childishly simple. A series of differently-shaped blocks falls from the top of the screen at ever-increasing speed, giving a player less and less room for manoeuver unless they can lock the puzzle-like pieces into place by rotating them. But at the time, it was something radically new. “The importance of Tetris for the gaming industry is hard to overestimate,” said Alexander Kuzmenko, head of Games.

MOVIES: Get ready for fest at Indian Cultural Centre on September 3-6

Rekindling Russia’s love for Indian films in 21st century


he Indian Film Festival in Russia (IFFR), set to take place at Formula Kino Gorizont and Indian Cultural Centre KRSK on September 3-6 in Moscow, is expected to usher in a new era of cooperation between the entertainment industries of the two countries. The four-day festival will not only showcase a “select number” of popular Hindi movies recently released by Bollywood, but will also feature live classical music and dance performances by Russian artistes and Indian Kathak and Bharatnatyam dance groups. It will be ceremonially inaugurated at the Indian Cultural Centre KRSK with the presentation of a concert entitled “Bazaar” and screening of the film “Piku” on September 3. Bollywood celebrities, including actor and singer Ayushman Khurrana, film director and producer Shoojit Sircar, script writer, director and producer Madhur Bhandarkar, producer Ronnie Lehri and actress Tabu are expected to attend the film festival in Moscow. According to the organisers of the festival, the IFFR will be a unique event after the Raj Kapoor-era in Russia. Keeping in view the legendary actor and film-maker’s historic achievement, the IFFR is devoted to a deeper under-

standing and appreciation of Indian cinema and culture in the 21st century. The new generation of Indian producers and directors is now seeking to ride Bollywood’s popularity to relaunch the Indian cinema on Russia’s big screen. The programmes of the film festival in Moscow aim to support emerging film producers, with an increasing focus on the leaders of entertainment industry performers, business executives, and to promote the diverse perspectives of Indian diaspora in different foreign countries. They also include a photo exhibition and fashion show, featuring designers of JD Institute of Fashion Technology with Russian models. These diverse programmes also provide an opportunity for the younger generation in Russia to acquaint themselves more closely with Indian culture. Recently, the Indian Film Festival Worldwide (IFFW) teamed up with the Director of IFFR, Dr Sarfraz Alam, to make the programmes and activities

Follow Get best stories from Russia straight to your inbox IN.RBTH.COM/SUBSCRIBE

“ As I was designing the game, I was wary of making it too complex. I thought that it would be great to add some kind of reward, some bonus points for certain actions, but with each new rule I invented, I was becoming more and more convinced that gamers would get confused. But if I were making the game now, I would not change anything”.

The Tetris Company and restored the rights to the game to himself, later signing an agreement waiving any further claims with the now-private Elorg. Ever since, the designer, who made very little money from the game’s popularity during the 1980s, has received royalties from all new releases of Tetris, including the latest version for new hardware platforms by Ubisoft. Pajitnov’s invention became the first game ported to mobile phones, appearing on the Hagenuk MT-2000 model in 1994. But perhaps the biggest contribution to the gaming industry made by Tetris was its release on the Nintendo Game Boy portable console. “Tetris is not just one of the most popular and recognisable games of all time, it is also one of those rare and precious things that make up what we call ‘the Russian cultural code,’” said Alexander Kuzmenko. “It is just like an ushanka or a matryoshka,” he said, referring to the famous Russian furry hats and painted nesting dolls.

LIFESTYLE: Set to open in September, casino complex eyes +$1bn revenue


Golden Gate as early as the first half of 2016. Royal Time Group, the project’s third investor, is expecting to start the construction of its 250 thousand square kilometer Zhar-Ptitza (‘firebird’) casino and resort this summer. The designers behind the project say the name was picked for a reason, since the future resort will mostly target Asian tourists. The Zhar-Ptitza, or Phoenix as it is also known, is a mythical bird which arises from the ashes, and is considered highly symbolic in some Asian cultures. “The project’s entire infrastructure has a uniform Asiainfluenced style,” says Alexey Belinsky, head of the European division of Steelman Partners, an architectural company working on the project. Initially, the casino was planned


I Heroes of the “Piku,” which is free from the usual trappings of Bollywood movies. of the film festival in Moscow in such a way that no other film festival in Russia offers. The IFFR is being entirely organised by IFFW to serve the Indian as well as international movie-makers who want to reach a cross-section of audiences in Russia. “After Raj Kapoor, this is the second big thing that is happening in Russia,” said R.C. Dalal, IFFW’s Creative Director. He added that the IFFR “will become a landmark of Indian art cinema in Russia for years to come.” Festivals like these in Russia, said Dalal, will introduce the Indian film industry to business estimated to be more than one billion dollar in this part of the world.

What’s on at fest? Focus on Shoojit Sircar A clutch of Bollywood Hindi movies will be shown at the festival, which include “Piku,” “Haider,” “Tanu Weds Manu Returns,” “Madras Cafe,” “Vicky Donor,” and “Dil Dhadakane Do.” It appears from the list that Director Shoojit Sircar

Tetris creator

The Primorye complex is set to rival Macau and aims to attract up to 10 million visitors per year.




Russia bets big: Recreating the Macau magic on the Pacific coast

Indian Film Festival in Moscow will bring closer entertainment industries of Russia and India. DADAN UPADHYAY

historians generally consider the real birthday of the puzzle-game to be July 18, 1985. Indeed, it was in the summer of 1985 that the updated, colour version of the game for IBM-compatible computers started circulating among Pajitnov’s friends and colleagues at the Dorodnitsyn Computing Center of the Soviet Academy of Sciences in Moscow. Thus began the rise of Tetris. In those days, the export of Soviet computers and software was officially controlled by Electronorgtekhnika, a state corporation, also called Elorg. However, even before any agreement was signed with Soviet officials, several foreign companies released unlicensed versions of the game and started selling the rights to something they did not really own to each other. The complex tangle of issues finally ended years later, with Atari acquiring the rights to an arcade version of the game and Nintendo obtaining the home console version. In 1996, Pajitnov, having by then moved to the US, created

will be in the focus at the IFFR as he has directed “Piku,” “Madras Cafe,” and “Vicky Donor.” Russian film “Viy,” based on the Russian writer Gogol’s book, will have a special screening for the audiences.

Read daily at IN.RBTH.COM or on your mobile reader

t’s a high-stakes business, and Russia knows where to place its bets. Russia has signed agreements with investors, including gambling tycoon Lawrence Ho, on constructing a new casino center on the country’s Pacific coast. The resort area’s first casino is set to open its doors this September, and is expected to lure up to 10 million visitors per year to a Russian version of China’s Macau. Investors are planning to pump in $2.2 billion into the gambling complex, which has been dubbed “Primorye” after the Russian name for the region. “Considering the zone’s geographical location, we can assume that about 50% of all visitors will come from Asia, especially from China,” said Timur Nigmatullin, an analyst at Finam investment company. Analysts said that Primoriye may benefit from being significantly closer to northern China than Macau, which is the largest gambling center in the world and is situated on China’s southern coast near Hong Kong. One of Primorye’s key investors is Melco International Ltd, a firm belonging to Lawrence Ho, one of the heirs to Stanley Ho’s gambling empire in Macau. Other large investors in the project include Diamond Fortune, which is preparing to begin the construction of a casino dubbed

to house 500 slot machines and 30 gambling tables. But the numbers may reach 3000 machines and 150 tables. Once completed, the 619 hectare space will include 15 hotels, 12 rental villas, a yacht club, a multifunctional trade fair complex and other recreational infrastructure. Primorye, located near the city of Vladivostok, has several crucial advantages as it is closer to northern China than Macau, with Vladivostok located a two-and-a-half hour flight from Beijing and just a one-and-a-half hour flight away from Harbin, the capital and largest city of Heilongjiang province which borders Russia. According to Russia’s Ministry for the Development of the Far East, the approximate revenues of Primorye may amount to $1.2 billion, reaching up to $5.2 billion in ten years. The tax rates for the zone will be between 3% and 7% - significantly lower than Macau’s 39%.



Mail.Ru, Russia’s largest online games portal. “In fact, the release of this game for Game Boy handheld consoles kickstarted the advent of ‘pocket games,’ which in the age of Angry Birds and the like are known as mobile games.” Christopher Hamilton, a producer at Finnish video game developer Rovio Entertainment, the company that gave the world Angry Birds, described Tetris as “probably the first break-out, casual video game.” “Everyone was playing it while I was at university, including my Russian professor, who would comment on how Russians excelled in math and science,” said Hamilton. “Tetris was the first game developed in the Soviet Union that was exported to the US and other Western markets. It really opened the door for a number of Russian developers who continue to make great content for global markets,” Hamilton told RBTH. Pajitnov assembled the first Tetris prototype on June 6, 1984. He then continued to refine his invention for several months. Russian video game

Investors are planning to pump in $2.2 billion into the Primroye gambling complex.






Russia and India Report  
Russia and India Report  

September, 2015