Russia and India Business Report by Russia Beyond

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WEDNESDAY NOVEMBER 4, 2015

Business Report RUSSIA&INDIA THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

ECONOMY: Capital inﬂow, driven mainly by the non-ﬁnancial sector, reached $5.3 billion in July-September quarter

STATISTICS

Recovery mode: Russia sees ﬁrst net capital inﬂow in years

Ruble/Rupee dollar rates

Amid ongoing recession and sanctions, the Russian economy is showing green shoots of growth as the Central Bank reported a net inflow of funds into the country for the first time in half a decade. Will this trend continue? ALEXEY LOSSAN RIBR

Stock Market Index

Economy: Projections GETTY IMAGES

n a clear sign that Russia’s financial condition is stabilising amidst an ongoing recession, the country saw a net inflow of capital for the first time in five years during the third quarter. Capital inflow into Russia reached $5.3 billion from July through September, the Russian Central Bank said. The last time it happened was five years ago, during the second quarter of April-June 2010. During the first two quarters of 2015, the Central Bank registered a net capital outflow from Russia of $45 billion. “The inflow was driven mainly by the non-financial sector: the Russian population actively sold foreign currency during the quarter,” economist Irina Lebedeva at Moscow’s UralSib brokerage wrote in a note to investors following the publication of latest statistics. “It appears that the Russian private sector managed to both refinance its maturing debt and obtain new loans during the quarter,” she added. Russia has experienced massive capital flight over the past few years as the price of oil, its key export, has fluctuated, and as political events like the outbreak of fighting in neighbouring Ukraine spooked investors and sent the country’s national currency, the ruble, on a wild roller coast ride. Russian President Vladimir Putin has said that despite the outflows, Russia does not intend to institute capital controls or fix the country’s exchange rate. “We are not planning steps of this kind,” he said in a speech at the Russia Calling! economic forum in Moscow this October. Such measures were tried in the late 1990s, he noted, but did not

Russian President Vladimir Putin hailed the inflow as a sign that the Russian economy will continue to stabilise and start showing positive trends.

lead to a significant change in the pace of currency devaluation at the time. The president hailed the inflow as a sign that the Russian economy will continue to stabilise, overcoming the current recession, and begin to show positive trends. Real investment inflow into Russia will start in Russia once oil prices exceed $70 per barrel, said Freedom Finance Investment Company’s head of operations in the Russian

stock market Georgy Vashchenko. According to UFS IC’s managing partner Yelena Zheleznova, many foreign investors, especially from Asia, have developed a keen interest in the Russian market. However, the Central Bank is not yet counting on the continuity of the trend. According to the ministry’s forecasts, the outflow of capital from the country is likely to reach $85 billion in 2015. The Ministry of Finance is confident

that $70-80 billion will flee the country at the year-end, while the Economic Development Ministry estimates it at $93 billion. In October 2015, the gas monopoly Gazprom and the world’s largest producer of nickel and zinc, Norilsk Nickel entered Western capital markets. Both companies issued Eurobonds at the beginning of October 2015. Demand for the Russian bonds was several times oversubscribed.

Views: Syria operation

Syria breakthrough: Vienna kindles hope The Vienna talks brought together Tehran and Riyadh as Russia and US inched closer to resolve the Syria crisis SERGEY STROKAN, VLADIMIR MIKHEEV RIBR

Assad and helping him regain control over a large part of Syria,” said Alexei Arbatov, a Russian academician. The most divisive issue remains the figure of Bashar al-Assad with US Secretary of State John Kerry stating that in no way can this person “unite and govern Syria”, while adding that “Syrians deserve a different choice.” Remarkably, it echoes the words of Russian Foreign Minister Sergei Lavrov who reiterated Moscow’s stance: “The Syrian people should decide Assad’s fate” adding that he “did not say that Assad has to go or that Assad has to stay.” For many observers it was a clear sign that Moscow and Washington have inched towards a more compatible position on Syria. The relative consensus of Vienna-2 negotiators awakens a modest hope of pacifying the ravaged region.

Putin’s approval rating

ALYONA REPKINA

he cautious assessment of the outcome of Vienna-2 meeting might be justified, and yet the sheer scope of participants and the value of the decisions, including compromises reached between irreconcilable rivals like Iran and Saudi Arabia, elevate the event to the status of a diplomatic breakthrough. The assembly of peacemakers – with the sensational addition of Iran – agreed to concentrate on setting up a sustainable nationwide ceasefire in Syria, persuade conflicting parties to work out a new constitution and hold elections to be

supervised by the UN with all Syrian nationals, including diasporas and refugees in other countries, to have secure guarantees to cast a vote and thus decide the fate and future of their embattled and war-torn motherland. Staffan de Mistura, the UN’s envoy to Syria, reflected the mood on the ground by saying it was “unimaginable” even a few weeks ago that all parties with diverging interests would have agreed to talks. Was it a sudden change of mood? Or was it the end result of Russia’s painstaking and consistent diplomatic efforts to convince and persuade other counterparts that without Iran, a major protagonist of the big game going in and around Syria, nothing would be

achieved if not spoiled for the worse. “Bashar al-Assad and the opposition are unable to come to any substantial agreement. It is the external actors, which must provide the foundation for any agreement. Iran and Saudi Arabia play a powerful role in the internal situation in Syria. Saudi Arabia not only sponsors different opposition groups in Syria but also employs special units in direct combat there,” Lana RavandiFadei, senior scientific collaborator at the Russian Academy of Sciences’ Institute of Middle East Studies, told RIBR. “Iran supports the Assad regime economically and militarily. So it is virtually impossible to resolve the Syrian wart without Iran.” “Moscow and Tehran will almost certainly act in tandem. Our interests are focused on pertaining the government of Bashar al-

PERSPECTIVE

National Day: What unites Russians? Daily edition featuring news and in formation about Russia

News on Russia-India relations, as well as analytics and comments

Exclusive interviews and feature stories

Broad variety of multimedia formats

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MIKHAIL SHVYDKOI Specially for RIBR

n November 4, the Russian citizens celebrate National Unity Day. This is a relatively new Russian holiday, which came into our lives in 2005. It was created for many very obvious reasons. The creation of a new Russian, not Soviet, nation required new symbols. We had to find an event that was in the vicinity of November 7 (the anniversary of the October Revolution in 1917 was the official national day of the Soviet Union from 1918 to 1991) to create a holiday that could compete with the Soviet tradition. However, National Unity Day is not simply a young holiday. The historical roots of this particular date reach back to the beginning of the 17th century and the end of Time of Troubles (a period of national and dynastic chaos from 1598 to 1613),

when Polish troops were expelled from Russia and the new Tsar Mikhail Romanov was elected. Bulkily named the Day of Moscow’s Liberation from Polish Invaders, it was an important and stately holiday but, in my opinion, deprived of any necessary emotional connection to modern Russia. I am sure that there is no holiday in Russia today which can be compared in its unifying power, with May 9, the USSR’s Victory Day in the Great Patriotic War and World War II. This war is still embedded in the hearts of all citizens of Russia, their fates and human ties. The memory of the war, the pride of victory, for their parents and grandparents, undeniably unites the new Russian and Soviet history. The attitudes to the Soviet past with modern Russians are different.

At the same time, the Russians are significantly freer in their judgement than the Soviet people. We got all the constitutional rights of which they could not dream of in the Soviet Union – the right to freedom of movement, freedom of speech and the right to property. Today, Russia is a capitalist country, where, for all that, the government is trying to maintain a social responsibility to the citizens, which is very difficult in the current economic situation. The role of religion in society has changed. Freedom of conscience, stated in the Russian Constitution, has led to the development of our country’s traditional religions – Orthodox Christianity, Islam, Judaism and Buddhism. Russia is now a secular state. Today, patriotism is quite often – and wrongly – regarded as a kind of national ideology. Such an understanding, ironically, is a threat to our national unity. Patriotism is a normal human feeling, like love for parents, which is usually not related to the political beliefs of a person. Its manifestations are certainly dependent on upbringing. However, it is important for society and individuals to distinguish between patriotism and nationalism. One should not forget that patriotism is inherent in all people. In Russians as well as in Tatars, Bashkirs or Chechens (Russia’s second, fourth and sixth largest ethnicities, respec-

tively - RIBR). Certainly, every people has its own language, its intangible heritage – customs, traditions, rules of conduct, art and culture. Not everything matches, even if the people belong to the same linguistic group or share a common religion. That is why we must be extremely cautious in such a sensitive area as ethnic relations. Russia is a country where multiculturalism is accompanied with some civil rules of conduct. I will make no secret of the fact that it is extremely difficult at times to maintain the balance of interests of different peoples living side by side. Russia is a country of changes, which, however, has a high inertia. This is due to its vast spaces and tragic history, which has influenced the formation of the people living in it. This conservatism of Russian life is the subject of Andrei Konchalovsky’s recent film, “The Postman’s White Nights,” and the films of Aleksei Balabanov, which explored the fickle nature of Russian man who was tested to the limit by sharp turns of Russian history. And constantly, Russian filmmakers – from the masters of the older generation to the creative youth – have turned to the theme “People and War,” which has become an integral part of Russian life and Russian culture for good. The author was the Minister of Culture of Russia (2000-2004).

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DIPLOMACY: Promoting Russia’s enhanced participation in Make in India, shiﬁtng to rupee-ruble trade ﬁgured high on agenda

NEWS

Moscow talks set stage for Modi’s annual summit meet with Putin

Russia moves up in World Bank’s Doing Business rankings In spite of sanctions and the decline in GDP, Russia climbed 11 positions to 51 place in the World Bank’s Doing Business rankings. The bank’s experts said that the country carried out a revolution in obtaining an electricity connection simpler – on this indicator, Russia raised its place by 114 positions. Over the past year, Russia implemented ﬁve economic reforms. RIBR

DADAN UPADHYAY Specially for RIBR

head of India’s Prime Minister Narendra Modi’s visit to Russia in December, External Affairs Minister Sushma Swaraj held wideranging talks with Russia’s Deputy Prime Minister Dmitry Rogozin to firm up steps to enhance economic and strategic relations between the two trusted partners. The two co-chaired the 21st meeting of India-Russia InterGovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) to prepare a strategy to implement the joint “Druzhba-Dosti” vision of Russian President Vladimir Putin and Prime Minister Modi. The IRIGC-TEC is a key institutional mechanism to promote and strengthen India’s “special and privileged strategic partnership” with Russia. Swaraj also held bilateral talks with her Russian counterpart Sergei Lavrov to fine-tune the agenda of Putin-Modi summit in December in Moscow. The two leaders will review and supervise the progress in realizing the “DruzhbaDosti” vision, at their bilateral annual summit, a source told RIR. Upscaling the economic relationship figured prominently on the agenda of the IRIGC-TEC. Addressing the commission, Rogozin said, “The issue is about achieving the bilateral annual trade turnover of $30 billion and $15

Road map for India, Pakistan joining SCO sent to members A road map for the accession of India and Pakistan to the Shanghai Cooperation Organization (SCO) has been worked out and submitted for the current member-states’ consideration, the organization’s Regional Anti-Terrorist Structure (RATS) said . It is expected that the mechanism for the road map’s implementation will be discussed at the meeting of the SCO Council of Heads of Government in December in China RIBR

Russian infantry preparing for Indra-2015 drills Russian mechanized infantry in the south of the country is finishing preparations for its Indra-2015 drills with military units from India. The drills will take place in November in northern India’s Mahajan firing range. The event will span 13 days. The troops are practicing the norms of marching, tactical, engineering, firing and medical training under the guidance of commanders of units. RIBR

billion of mutual investment by 2025.” The trade turnover in 2014 was around $10 billion. He said that Russia was taking “steps to create favourable conditions for developing trade, economic and investment cooperation, particularly free trade agreement, agreement on mutual stimulation and protection of investment, on payments in national currencies, on admitting certifications of conformity and education and diploma standards.” In particular, he mentioned oil and gas, nuclear energy and renewable energy as the priority areas of bilateral cooperation. “The cooperation programme in oil and gas sector has already been launched,” Rogozin noted. He underlined that Russia was also ready to assist India in nuclear energy development, upgrade of thermal power plants, metallurgical and machine-building companies, exploration, mining, and construction of gas pipelines, power lines, railways infrastructure, rolling stock, aircraft and helicopter, the peaceful use of space, the development of modern means of communication and the creation of “Smart Cities.” Rogozin stressed that Russia was ready to support India and actively participate in the implementation of large-scale projects to develop the Indian economy. The two sides discussed measures to facilitate the proposed shift to rupee-ruble trade

GETTY IMAGES

India and Russia firm up a strategy to implement Druzbha-Dosti vision and expand economic ties

India’s External Affairs Minister Sushma Swaraj and Russia’s Deputy Prime Minister Dmitry Rogozov held wide-ranging talks in Moscow. at the Moscow meeting. In this context, Russia’s First Deputy Minister of Economic Development Alexei Likhachev stressed that although the two counties want to shift to trade in their national currencies, their banking systems are not yet ready for being actively involved in the process. “This is a burning issue. Our banking systems are not ready to actively respond to the request. We would like to expand trade in national currencies,” he said. An anonymous source said that the two sides decided to speed up the transition process to the rupee-ruble

trade. “It may take some time before the sides work out a concrete mechanism to transition to mutual trade in national currencies of India and Russia,” he added. On her part, Swaraj underlined special bonds that bind India and Russia. “Russia occupies a special part in the heart of every Indian. The strength of our unique strategic partnership with Russia withstood the test of time.” “India and Russia are natural partners in the legacy of excellent cooperation in key sectors such as nuclear energy, defence and space. However,

Russia can be an even bigger partner in India’s development process as a source of technology, machinery, equipment and knowhow,” Swaraj noted. The minister pitched for greater participation of Russian companies in the “Make in India” programme and stressed that Modi and Putin have identified strong economic relations as a key priority area in the Indo-Russian strategic partnership. Rogozin invited Swaraj to visit Russia in July to participate in the international industrial exhibition “Innoprom 2016” in Yekaterinburg.

DEFENCE: Parrikar pitches for bigger role for Russian defence ﬁrms in ‘Make in India’, calls Moscow ‘privileged strategic partner’

India, Russia ﬁrm up defence deals, focus on FGFA, MTA © ALEXEY KUDENKO / RIA NOVOSTI

Joint masters and postgraduate studies programs will be made possible through the creation of a BRICS Network University, said Russia’s Deputy Minister of Education and Science of the Russian Federation Alexander Klimov. “The Network University has been designed as a broad initiative that will allow the interaction of universities in bilateral and multilateral formats, primarily for the implementation of joint masters and postgraduate studies programs,” Mr. Klimov said.

Defence ministers of India and Russia met in Moscow to discuss key joint production projects DENIS KUNGUROV RIBR

head of Prime Minister Narendra Modi’s visit to Moscow next month, India’s Defence Minister Manohar Parrikar held wide-ranging talks with his Russian counterpart Sergei Shoigu in Moscow on November 1 in the framework of IndiaRussia Intergovernmental Commission for Military- Technical Cooperation (IRIGC-MTC). They held discussions on a host of defence deals, which could be signed during Modi’s visit to Moscow in December. The ministers signed a protocol for enhancing military-technical

cooperation between India and Russia. Underlining the pivotal role of Moscow in India’s defence calculus, Parrikar called Moscow a “privileged” strategic partner. “We have very close and strong connections in the area of defence. Russia has been and remains to date India’s leading partner,” he stressed. India, said the minister, has proposed to the Russian producers to participate proactively in the “Make in India” programme, which is designed to indigenise and modernise the country’s military-industrial complex. In his speech, Shoigu stressed that India and Russia have reached a level of closer industrial cooperation in the sphere of military-technical co-

MIL.RU

BRICS Network University to spur eucational ties

India’s Defence Minister Manohar Parrikar shakes hands with Russia’s Sergei Shoigu . operation. The partnership has really progressed from that of a buyer-seller relationship to a mutually beneficial partnership, he added. Looking to the future, the minister highlighted key projects, including the creation of the multi-purpose transport aircraft, the fifth generation fighter aircraft, and a number of projects in the naval arena. The consolidated position of the two countries has a stabilising effect on the international situation, the minister stressed. He recalled that during the

last year the two countries successfully conducted joint exercises in all the three branches of the armed forces. In November and December, Russia and India are planning to hold anti-terrorism and naval exercises, which will be held in India. Russian analysts projected a robust picture of India-Russia defence ties. “According to the results of the meeting held, it is clear that Russia and India have made significant progress in their cooperation in production and

service of both aircrafts and armoured vehicles and tanks,” Yury Gromov, an independent military expert, told RIBR. The two key projects, FGFA and MTA, which are being undertaken by the two countries, demonstrate Russia’s ability to build fruitful cooperation in the framework of the “Make in India” programme, he said. “It should be noted that India’s Western partners have not yet concluded any firm contracts for joint production of aircrafts. In this sense, Russia is still the only country that willingly shares its high-tech in the field of weapons production with India,” said Gromov. This year is the 55th anniversary of military cooperation between the two countries, which began in 1960. Over this period, Russia has supplied weapons and hardware to India to the tune of $40 billion. As part of the “Make in India” programme, a service center for helicopters and a repair line for the VK-2500 engines in the repair plant will be created in Chandigarh. It is planned to launch 16 repair lines for instrumental equipment and helicopter support system. The meeting also discussed the pre-contract documentation for the creation of a joint programme for MTA, based on the Il-214.

INVESTMENT: New mechanism required for legal protection and dispute resolution: Russia’s Deputy Minister of Economic Development Alexei Likhachev

Titanium case: Need for investment protection treaty Russia is hoping that the Titanium JV case will prod India to fast-track a new investment pact ARTEM SANZHIEV Specially for RIBR

he Indo-Russian venture to produce titanium dioxide, launched in 2007 has become embroiled in intricate legal disputes. The “titanium case” has become Russia’s first experience in the complex litigation required to protect its own investments in India and has underlined the need to negotiate a new bilateral investment treaty between India and Russia. The agreement to launch “the titanium project” was reached in April and November, 2007, through an exchange of letters between the governments of India and Russia. Russia and India established a joint venture com-

pany in January 2008, the Titanium Products Private Ltd (TPPL). 51 per cent of the company’s shares were to be owned by Russia, represented by the Federal Property Management Agency (FPMA), 45 per cent by the Indian company Saraf Agencies Private Ltd and Titanium Mineral Products Ltd, and four per cent by the Russian Technochim Holding. The JV was aimed at building a chemical and metallurgical plant with the production capacity of 40 million tonnes of titanium dioxide, which is widely used to produce paints, plastics, paper, cosmetics, and even food products. Investment in the plant was estimated to be around $260 million. Russia’s share, $126 million, was to

be financed from part of India’s debt to Russia. However, before the operations began, the partners quarrelled, and the Sarafs initiated arbitration proceedings against the Russians. Legal proceedings began in 2010 and are still continuing. “The Russian side violated provisions in the charter of the joint venture. Therefore, the company’s management had no choice but to go to court,” RIBR learned in a telephone conversation with Nirmal Lunavat, who heads the legal team in the case launched by Saraf Agencies Private Ltd. The Russians insist they are in the right. At the centre of the dispute is 2.5 billion rupees (at the exchange rate in 2009 – about $60 million), which the FPMA transferred into the joint venture’s bank account in June 2008, as part of the company’s authorised capital. Most of this money was soon withdrawn from that account by the head

of Saraf Agencies, S.M. Shroff and his son Rahul Saraf (the two who had access to the JV bank accounts) as compensation for alleged costs that were incurred. Lunavat refused to specify to RIR what these expenses were. Yevgeny Raschevsky, the lawyer pro-

The new Indo-Russian investment pact will help attract more Russian capital for the ‘Make in India’ programme tecting Russian interests in arbitration courts, explained the situation. “The Indian side was unable to provide convincing evidence to continue using the funds withdrawn from the joint venture. The bulk of the money, about 1.35

billion rupees (approx. $22.5 million), was removed by the Sarafs from the accounts of the joint venture in 20092010. This became possible when the claims they filed in a Calcutta court were upheld by the court, blocking the work of Gennady Lunyov, general director of the joint venture, and Russian representatives on the board of directors,” said the lawyer. “In autumn 2009, having got full control, Shroff and Saraf signed the required documents and reimbursed “themselves” with Russian money,” he added. By investing virtually nothing in TPPL, the Sarafs, over a period of two years, acquired cash assets, land and preferential treatment within the SEZ to independently develop the titanium project, while Russia was left with nothing. After setting up the enterprise, the top management was supposed to issue shares, 51 percent of

which should have gone to the FPMA. Even here, there is no clarity. This problematic issue has been raised repeatedly at meetings of the Russian-Indian Intergovernmental Commission on Trade and Economic Cooperation, but no progress has been made yet. Resolving such disputes needs a new agreement to replace the 1994 document on mutual protection of investments. “This will be a different document that should allow investors to not only realise their interests in the host country, but also lays down the mechanism for legal protection, dispute resolution and guarantees the repatriation of revenues and profits,” said Alexei Likhachev, Russia’s Deputy Minister of Economic Development . Such a mechanism, say Indian experts, should help attract capital to implement the Indian government’s “Make in India” programme.

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T |E |C |H |N |O |L |O |G |Y WEDNESDAY NOVEMBER 4, 2015

TRANSPORT: KAMAZ and Gaz group are developing oﬀ-road cars on the basis of computer vision

Russian companies are confident of unveiling driver-less trucks for the FIFA World Cup, which will be held in the country in the summer of 2018 VIKTORIA ZAVYALOVA RIBR

EPA/VOSTOCK-PHOTO

ussian car manufacturers are now apparently entering the self-driving cars race which is already in full swing. In October, Japan’s Toyota unveiled plans to bring self-driving cars into the market by 2020, the year of the Tokyo Olympics. Daimler has recently tested its selfdriving tractor-trailer on public roads in a suburb of Stuttgart, while Honda and BMW are currently testing their own driverless cars in California. As for Russia, there are currently two companies working on selfdriving vehicles here – Rostec-owned KAMAZ and Gaz Group, a part of Basic Elements industrial holding belonging to Russian aluminium tycoon Oleg Deripaska. Both manufacturers have declared that they would only be able to release the vehicle in three years if “the project is supported by the government.” “We have laid all the necessary groundwork with our remotecontrolled vehicle project based on the cars produced by the Urals Automotive Plant. Provided some government assistance is available, we will be able

Self-driving trucks developed in Russia can work well on the roads of developing countries. to develop this project further and get a vehicle with full-fledged remote control and self-driving capabilities by 2018”, Gaz Group vice-president Elena Matveeva said. Meanwhile, KAMAZ has already received 300 million rubles of government funding from Russia’s Ministry of Education and Science. The company

is developing its driverless truck jointly with Russian software developer Cognitive Technologies. Gognitive Technologies president Olga Usova told RIBR the company is planning to produce first prototype trucks at the factory in the city of Naberezhnye Chelny. “Our driverless KAMAZ truck is currently capable of

INNOVATION: Elita plans to distribute the phone through local partners in US, Scandinavia and Israel

New smartphone for the blind ARAM TER-GHAZARYAN RIBR

t’s a godsend for the visually impaired in an increasingly wired world. The EISmart smartphone does many things for them: it’s is a hybrid device that combines the functions of a cell phone, an audio-book reader, a GPS navigator and much more. It helps them to recognise banknotes, determine illumination levels, and identify objects. “When we started we didn’t have any experience in developing smartphones,’’ said Anatoly Popko, development director at Elita Group, the company which created the smartphone. “If we had known what we were getting into, perhaps we’d given it a second thought.” While EISmart is not a technological novelty, it contains the best technologies available for the visually-impaired. “Ordinary smartphones already do everything that EISmart does,” said Pavel Osipov, head of the programme

enabling technologies at the deaf-blind support foundation, “So-edineniye”. “But in order to use them, the blind had to make serious efforts. EISmart makes Android possible for the blind, and it makes their lives easier.” Many years ago sensor telephones replaced push-button telephones, and Elita Group developers started thinking how to make phones accessible for the blind. “Apple, for example, created an interface that helps the blind use its telephones, but many people are accustomed to buttons,” explained Popko. “And while young blind users have mastered the iPhone and the Android, the elderly are having difficulties.” The new smartphone was developed in collaboration with some of Russia’s best developers and engineers who face physical disabilities. The talented blind programmer Olga Yakovleva, creator of the RHVoice Russian language synthesizer, is a member of the team. The entrepreneurs discovered that the Blind-Droid

ALAMY/LEGION MEDIA

Blind entrepreneurs from Russia have devised a smartphone that makes life easier for the blind

Wallet programme, which helps determine the value of banknotes, was openly accessible on Google Play. Its creators, who are also blind, wanted it to be free for users. Elita Group decided to support the project and paid for using the application. Popko said EISmart was developed with an English-language interface

for launch in the international market. Tests are now underway in Russia, and the preliminary cost is about $450. The company intends to distribute the phone through local partners in the US, Scandinavia, and Israel. Elita Group was founded 10 years ago by Nusret Adigezalov, a blind entrepreneur and scientist.

Dragon buzz: Copying the Soviet design? Experts are analysing whether the US SpaceX ship design borrows from Soviet Zarya vessel

EPA/VOSTOCK-PHOTO

Russia joins race for self-driving vehicles

performing the more simple manoeuvers in auto mode — turns, U-turns, moving in a serpentine pattern, stopping in front of obstacles, and moving as part of a convoy,” Ms Usova said. Unlike foreign companies which are mostly developing cars suited only for ideal traffic conditions and high-quality road surface markings, developers at Gognitive Technologies are taking the harsh conditions of Russia’s road network into account. The KAMAZ-Cognitive joint project is based on the so-called passive, or signal-acquiring, computer vision, which acquires data from the outside. This data is then processed by the vehicle’s AI to make decisions. “Our eyes perceive the road and our brain analyses the environment and makes decisions. So, in a sense, we have developed a computer model of human vision. Our vehicles actually perceive the road and other vehicles,” explains Usova. She underlined that this is the project’s main feature, distinguishing it from most other self-driving cars - including the Google Car – which are based on what she calls “signal emitting design”. This concept involves using additional devices, like radars that use reflected light to measure distance, as well as various sensors. Cars of this kind navigate by emitting signals that reflect from the environment. Developed countries are constructing the so-called “smart roads”, which come with perfect road markings and built-in sensors. The developers at Cognitive Technologies say their selfdriving KAMAZ truck project will make Russia one of the leaders in the international automobile market, especially in the developing countries where the road markings quality remains poor.

SPACE: Is similarity just a matter of coincidence?

ARAM TER-GHAZARYAN RIBR

curious theory recently emerged in the Russian media after the failed launch of a Falcon 9 vehicle carrying a Dragon cargo spacecraft as part of a mission to the International Space Station. Some Russian engineers claimed Dragon, developed by US company SpaceX, possessed several features similar to a craft called Zarya, a Soviet cargo vessel designed in the late 1980s. This is not the first time similarities between Russian and American spacecraft have been noticed. To name just one example, the Soviet shuttle, Buran, bears a striking resemblance to NASA’s Space Shuttle. But are these really borrowed technologies, or just a coincidence? Dragon and Zarya have a lot in common: both are designed to be equipped with landing rocket engines, and with carrying capacity that exceeds 3,000 kg. Moreover, the crew capacity of Zarya and Dragon is almost similar. Dragon can hold up to seven crewmembers; Zarya can hold eight. Both also have a conical reentry capsule, and are reusable. Led by Soviet engineer Konstantin Feoktistov of the NPO Energia design bureau, the development of the Zarya spacecraft began in the 1980s, but the project was eventually shelved. Feoktistov himself believed the spacecraft’s design was not refined enough to guarantee the required landing precision. Russian engineers have also pointed out that Dragon has a parachute braking system in addition to the engines — just like Soyuz, another spacecraft designed in the Soviet Union. Nevertheless, some Russian experts caution that since spacecraft are designed for essentially similar purposes, there are bound to be

parallels in design. “They were created with the same tasks in mind, and the only difference is the shape of the capsule,” said Ivan Moiseev, scientific supervisor of Russia’s Space Policy Institute. He added that the Soviet design “sticks to the traditional form, while the Americans prefer cones. In fact, given the incredible complexity of spacecraft, no country has ever managed to successfully execute a complete copy. A recent agreement involving the US buying a licence to manufacture Russian RD-181 rocket engines illustrates this point. The Russians were supposed to assist their American partners with everything from constructing the plants to installing the engines on launch vehicles. The whole endeavour, however, proved to be a waste of time and mon-

Both Dragon and Zarya are designed to be equipped with landing rocket engines, and with carrying capacity that exceeds 3,000 kg. ey because the entire technological chain of engine production was optimised for Russian industry and proved unsuitable for the US In the end, the Americans chose to buy RD-181 engines from Russia. “We received an offer to purchase the engines after [the Americans] unsuccessfully tried to produce them,” Vladimir Solntsev, president of rocket manufacturer RSC Energia, told RBTH in an interview. “The current contract includes restrictions on the use of RD181 engines for military purposes, and we will supply 60 engines worth a total of $ one billion.” The Americans rejected the idea of producing the engines themselves since they would have to completely rebuild their industry.

New frontiers: Russian-made face recognition technology goes global Tech start-up Kuznech gained from rivalry between Facebook and Russia’s Odnoklassniki. DINARA MAMEDOVA

occupy that niche.

RIBR

ounded just four years ago, Russian-American startup Kuznech’s star is shining bright as the company looks set to take a bold step into the world market with its own visual recognition technology Kuznech’s success story began in 2012 when Facebook bought the face detection technology provider, Face. com. The latter then recalled its licence from the Russian social network, Odnoklassniki, a popular competitor to Facebook on the local market. Kuznech, whose revenues surged to $700,000 in 2014, moved quickly to

‘Grasshopper’ Technology The name of the company, based in Boston and San Francisco, derives from the Russian word for grasshopper, and the technology it uses has much in common with the green insect. Grasshoppers have multiple eyes and they see the world as a picture consisting of numerous dots. “Our technology is powered by neural networks that represent simplified models of the nervous system of living organisms,” said company co-founder, Michael Pogrebnyak. “In other words, the principles that our technology is based on are very similar to the pro-

cesses that take place during visual recognition in the human brain: learning, generalisation, abstraction.” The idea behind the technology belongs to one of the company’s cofounders, Alexander Valencia Campo. He was developing computer games and constantly came up against the problem of searching for similar images of illustrations. Initial investment in the project was $500,000, with another tranche of $750,000 invested in 2011-2012 by the Moscow-based Skolkovo Foundation. Kuznech, which has already won 10 international IT awards, currently offers eight products, with the main ones being visual search and recognition for images and videos, as well as mobile recognition. The company holds four patents; one in Russia and three in the US.

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Future in medicine Kuznech’s main clients are news agencies, online stores, and social networks. The company’s development centre is based in St. Petersburg, and its big-ticket clients include Mail.

The advantage of Kuznech’s technology is that it is practically universal and can be built into different applications ru Group (Russia), and PartsTown (US). In North America, many competitors such as Idee offer similar technology. According to Pogrebnyak, however, the advantage of Kuznech’s technology is that it is practically universal and can

be built into different applications. Pogrebnyak is convinced that this technology has huge potential for analysing medical images. “We are trying to detect melanomas and other skin growths, and we plan to set up a melanoma cell detector for doctors,” he said. “However, things have been rather slow as investors like the idea but are in no hurry to put money into it.” Konstantin Vinogradov, an analyst with the Runa Capital venture fund, says that one of the most crucial challenges for startup companies in this field is lack of scalable, profitable and unoccupied market niches. “Kuznech can capture a part of the international market if it focuses on a few cases that its competitors haven’t, but it will be difficult because there are already a lot of players on the US market and local players from Southeast Asia,” he said.

thousand dollars of initial investment in the project was followed by investments by the state-sponsored Skolkovo Foundation.

700 thousand dollars in revenues generated by Kuznech in 2014.

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RELIGION: Only 1% of Russians are Buddhists, and most live in Siberia, with unique customs, hybrid architecture, shamanistic traditions and eternal relics

Buddhism beyond the Urals has evolved its own rituals and rites. RIR’s guide shows the way.... ANNA GRUZDEVA RIBR

n Russia, Buddhism spread to Siberia in the 17th century. It permeated across to these chilly lands from Mongolia and Tibet, after originating in the northern reaches of India. The Tibetan, ‘Mahayana’ school of Buddhism is what spread into Russia. Buddhism is not the most practiced religion in Russia. According to the Levada Centre, only 1% of the country’s people call themselves Buddhists. Most live in Siberia, in the Republics of Tuva and Buryatia, in the Zabaykalsky Territory, and in the Irkutsk Region (these regions are between 3700 and 6300 kilometres away from Moscow). There are Buddhist communities and temples in Moscow and St. Petersburg. However, to learn in detail about the traditions, history and spirit of Buddhism in Russia and how it differs from Tibetan Buddhism, a visit to Siberia is a must. Here are some distinctive features of Buddhism in Siberia:

initially a contentious process: lamas (Buddhist monks) would hunt down ‘shamans’ and burn their ritual objects, especially talismans made of wolf teeth, reindeer horns or bird feathers. 4. Lamas (monks) in Siberia did not always have an easy life, either. In the 20th century, many Buddhist monasteries were destroyed and lamas, like Orthodox priests, were persecuted. In the 1930s many lamas were shot for “counter-revolutionary activity” in the Aginsky “Datsan”, one of the oldest and most beautiful monasteries in the Zabaykalsky Territory. The “datsan” itself was closed, its buildings torn down and its valuables, art and ritualistic objects, ended up in museums in Moscow, St. Petersburg and Ulan-Ude, the capital of the Republic of Buryatia. 5. Siberia’s largest Buddhist monastery and learning centre is the Ivolginsky Datsan near Ulan-Ude in Buryatia. The construction began soon after World War II, during the tenure of Stalin, when the authorities offered a small plot of land near the village of Verkhnyaya Ivolga, and a prosperous Buryat family gave their own house to serve as a temple. Today, this is the most revered monument of architecture and culture in Buryatia, compris-

1. In the Tibetan tradition, a “datsan” is a department or a part in a university. Once Buddhism in Siberia became isolated from traditions of other practicing countries, the word “datsan” has come to refer not only to a university, but to an entire monastic complex. 2. The first “datsans” in Buryatia and Tuva, in the 1740s, were mobile and made not of stone, but of felt, so they looked like portable yurts early in their history. This is not surprising, as yurts were the Buryat peoples’ traditional dwellings. ‘Felt’ “datsans” were later replaced by wooden ones, and eventually by those made of stone. A hybrid mix of architectural elements from Buryat culture, the Buddhist canon and Russian and Chinese architectural traditions emerged over the centuries. The eclecticism of Siberia’s Buddhist temples’ differentiates them from Central Asian monasteries. 3. Since ancient times, shamanistic traditions have been quite strong in the regions of Transbaikal (near Lake Baikal), Tuva and Buryatia. As a result, the growth of Buddhism in Siberia was

SPORTS: Tennis legend rakes in $27 million from product endorsements

Sharapova in Forbes list: $250 million and counting... RIBR

ussian tennis star Maria Sharapova is one of the 20 highest-paid athletes of the last decade, according to Forbes magazine. She is the only woman in the list, where she is ranked in 18th place. The list is led by American golfer Tiger Woods. Sharapova’s income for the last 10 years is estimated at $250 million – which far outstrip the likes of British Formula One racing driver Lewis Hamilton and Denver Broncos quarterback Peyton Manning. Most of her income comes from endorsements. According to Forbes’ estimates, the Russian tennis legend earns $6.7 million actually on court, while endorsement revenues bring her $23 million Record-breaking contract with Nike Sharapova signed her first promotional contact at the age of just 11. In 1998, Nike became the technical

Wimbledon effect In 2004, the 17-year-old Sharapova brought home a sensational victory from Wimbledon. This breakthrough opened the doors into the world of big money. Just a month after the victory the young tennis star signed a contact with Motorola, estimated at $ one million per year, according to unofficial sources. The company is not doing so well as a decade ago, but Sharapova is still on a roll: In 2008 she swapped Motorola for Sony Ericsson, and in 2012 she became the face of Samsung, the market leader in smartphones. In no time Sharapova became a star not only on court, but also in social

T R AV E L 2 M O S C O W. C O M

ing 10 temples, a university building, a museum, a guesthouse, an open-air cage with roe bucks and a greenhouse with a ‘Bodhi’ tree, which is sacred for Buddhists, because Buddha attained salvation or ‘nirvana’ under such a tree. 6. The Ivolginsky Datsan holds one of the most important holy relics not only of Siberia, but of all of Russia: the eternal body of Lama Dashi-Dorzho Itigilov, who was the leader of Siberian Buddhists at the beginning of the 20th century. He died in the lotus position

in 1927. Now Itigilov’s body is kept in a special blessed palace on the territory of the Ivolginsky Datsan. 7. If you are going to visit a Buddhist monastery, there are a few rules that you need to keep in mind. You should tour the temple walking clockwise – such a circular path is called “goroo” and symbolises a rite of purification. On the way you’ll see the “khurde” drums, which contain the texts of prayers. You can make them rotate – this gesture is more or less equivalent

RIBR

eoples’ Friendship University of Russia (RUDN) in Moscow is known for Top-5 programmes, which could attract Indian students.

Maria Sharapova has endorsement deals with a spate of luxury brands. life. Her new status sparked the attention of luxury brands, and she is now the face of the Swiss watchmaker TAG Heuer and American jewellery house Tiffany & Co. Not long ago the designers of Tiffany & Co even created a jewellery collection, specially for Sharapova. Under the terms of the contract, she must wear Tiffany jewellery during all major matches. The giants of the automobile industry haven’t left Sharapova unattended either. Since 2006 she has been collaborating with Land Rover, and in 2013 she signed a contact with Porsche. The invitation to collaborate came from the Germans after Sharapova won the Porsche Tennis Grand Prix in Stuttgart in 2012.

to a prayer among Buddhists. You can visit all open temples and non-Buddhists are allowed to attend services. Inside the temple it’s best not to turn one’s back to the statues of Buddha or cross your legs or arms when sitting on the low benches along the walls. Your clothes should be modest – women should avoid mini-skirts and short tops – and you should remove any kind of headgear. You cannot smoke or throw away garbage on the territory of a datsan.

Attracting Indian students: Top-5 programmes at RUDN GLEB FEDOROV

LEGION MEDIA

AJAY KAMALAKARAN

Ivolginsky Datsan, located a few kilometers from Ulan Ude, is a big center of Buddhist culture, housing temples, a library, a school for monks.

RUDN, the most multinational university of Russia, hosts students from 152 countries

Maria Sharapova, the highest-paid female athlete of the last decade, is still on a roll. sponsor of the Russian, who at that time had already moved to the United States. The American sports giant and the Russian star have been inseparable ever since: in 2010 they signed a new deal that smashed all records for women’s tennis – eight years in exchange for $70 million.

ALAMY/LEGION MEDIA

Flowering of Buddhism in Siberia: Faith shines forth

1. Medicine Medicine tops the list of educational fields Indian students choose. Established back in 1961, today the RUDN Institute of Medicine includes more than 4,500 students. The Institute graduates work in more than 110 countries. The institute has laboratories with modern diagnostic and research equipment and teaching departments in 10 Moscow hospitals. This means that students can get real work experience in therapeutics, surgery, traumatology, gynecology, ophthalmology, and other fields of Medicine. Due to telemedicine development students can remotely observe the operations that are held both in Russia and other countries. 2. Geology Future geologists who are Master’s students at the Faculty of Engineering have the choice of two specialisations

that Russia leads in worldwide. These are innovative technologies for solid minerals exploration and technologies for oil and gas exploration. These programmes include advanced courses in remote forecasting, mathematical processing of various geological information data. Students can do their internships in such companies as Rosneft, Gazprom, RUSAL, and Norilsk Nickel. 3. Building Unique Structures Master’s students in the Civil Engineering field are offered four programmes, one of them is the Englishtaught programme “Computing and construction engineering”. Apart from RUDN full-time teachers, the best Russian specialists are invited to teach specialised professional courses (reconstruction, mathematical modelling, information technologies, in civil engineering, technical equipment reliability, etc.). Among the invited teaching staff there are representatives of the Central Scientific Research Institute for Building Structures that participated in the construction of the 540-meterhigh Ostankino TV Tower in Moscow, and in the construction of the bridge to Russky Island in the Far East of Russia (built before the 2012 APEC Summit).

Russian ruble has lost around 40 per cent of its value against the U.S. dollar over the last two months. This has made many products and services cheaper for foreign visitors in Russia.

4. Mathematics for Outer Space Mathematicians are trained at two basic departments: the Department of Applied Mathematics and the Department of Probability Theory and Mathematical Statistics. Students are offered fundamental training in Mathematics and Computer Science, they also study Applied Mathematics, i.e. information technologies in financial sphere, insurance, investment business, aerospace, and other fields. Students are engaged in research work, have opportunities to do their internships at leading universities in Germany, Italy, France, and so on. 5. Solar Wind Physics Physicists are trained at two main departments: the Department of Applied Physics and the Department of Theoretical Physics and Mechanics. Students are taught by researchers from the leading Physics centers in Russia, including the Lebedev Physics Institute, which counts four Nobel laureates among its alumni; Space Research Institute, which focuses on studying the physics of planets, space weather, and solar winds; and the Joint Institute for Nuclear Research and the Kurchatov Institute.

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Restaurants/ The average bill In 2015, you can sample choicest delicacies by the capital’s chefs without much damage to the budget. The average bill

Price of accomo dat historic centre o ion in the f Moscow sharply ove the has fall e year. N the view ow, adm n s of rub ir ing ys Kremlin , the ma tars of the jestic M embark oscow r ment o iver r Bolsh your win o i theatre dow can from b but will e not on also be ly fun, easy on your wa llet.

40% OFF

Taxis Average cost of transfer to the airport

Rent a car/Price per minute In September, the car-sharing system – short-term car rental services – started to operate in Moscow.

City tours Average price of group tour

The Bolshoi Theater/ The average ticket Almost half as much than in all musical theaters of the world.

* Source: Federal State Statistics Service of Russia, Jones Lang LaSalle Incorporated, 2GIS. Prices are calculated at the exchange rate on 07.10.2015