Page 1

50th Anniversary of Manned Space Flight

BUSINESS REPORT IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

...Marching towards a common future

WEDNESDAY, NOVEMBER 9, 2011

Diplomacy Georgia deal clears the last hurdle; Ministerial conference on Dec 15-17 will take the decision on Russia's entry

The long & winding road to WTO dream of the world economy. How will the entry into the WTO affect key sectors of the Russian economy? In agriculture, Russia reserved the right to mete out subsidies to farmers after entry, but the amount of money will gradually decrease by 2017, President Dmitry Medvedev said in July.The government will retain the right to increase import duties on some agricultural products to help the domestic sector, he said. The WTO accession is likely to have only a limited impact on the oil and gas industry, which provides 40% of government revenue. Oil and gas are exempt from import tariffs by other countries. With Russia's entry, imported consumer goods will become more accessible for shoppers, says Natalia Orlova, Alfa Bank’s chief economist. Most foreign goods in Russia are currently sold at 30% to 40% mark-up from their original prices because of high import tariffs. Russia's accession could result in domestic steelmakers increasing exports to the European Union as the current restrictions for exporting Russian rolled steel to Eu-

Irina Filatova

the moscow times

In a key step, Russia on Nov 2 struck a bilateral deal with Georgia that paves the way for its much-anticipated entry into the WTO. The Working Party on Russia's Accession, chaired by Stefan Johannesson, intends to forward recommendations to a ministerial conference due on Dec 15-17 for making a final decision about approval of Russia's entry. Russia then will have to sign a protocol of accession stating that it accepts the approved "accessions package". The parliament will have to ratify the protocol, usually within three months from signing.Thirty days later, the applicant government notifies theWTO Secretariat that it has completed its ratification procedures, thereby becoming a full member of the WTO. Russia, the largest economy outside the WTO, has an economic output of $1.9 trillion and accounts for about 2.8%

rope are likely to be cancelled, says Dmitry Smolin, an analyst at UralSib Capital. Domestic steelmakers have been limited to exporting a certain amount of rolled steel to Europe annually since the EU introduced quotas regulating Russian supplies in 2002.The companies are allowed to export 3.3 million tonnes of rolled steel this year, compared with 3.4 million tonnes in 2010, he said. However, it might take over three years after Russia joins the organisation for the restrictions to be cancelled, Smolin said. Aviation and railways represent a mixed bag. In aviation, Aeroflot will lose at least a large portion of the fee it currently charges European airlines overflying Siberia. The company does not reveal how much it makes from the practice, but the European Commission has said the fee cost airlines flying to Asian destinations is $420 million in 2008. At least part of the losses will be made up for by cheaper access to new planes and pilot hire, which will also benefit other airlines. But the impact will not be immediate: Medvedkov, Russia's chief negotiator on

WTO accession, said last month that reforming the fees would be unlikely before 2013. For Boeing, which has been lobbying hard for accession in Moscow and Washington for more than 15 years, the news will come as something of a victory. Import tariffs on wide-body aircraft will be reduced from 20% to 7.5% in the four years following accession, according to data compiled by David Tarr, consultant and former lead economist at the World Bank. Russia has agreed to hefty tariff reductions in construction, agricultural and scientific equipment, as well as medical devices, he said in "Russian WTO Accession: Achievements, Impacts, Challenges." Tariffs in these sectors will average 5 per cent. Accession will have little if any impact on Russian Railways, which is "physically and institutionally" isolated from Europe, but international documentation may ease transit of goods between Asia and Europe, says Dorogov. Foreign and local drug makers are excited about Russia’s WTO entry, which is expected to facilitate sales of

Russia, India dream big: Lighthouse on moon Russia is planning to put a“lighthouse”on the moon as a part of its joint Russia-India Moon Resource space mission. Russian engineers plan to attach a LED lamp to the moon probe, which will allow it to be visually tracked on its flight to the moon and on its descent to its surface.“Subsequently, you will be able to use the LED beacon as a point of reference for a coordination network, for optical observations and measurements,” Interfax quoted a source in the aerospace industry as saying. The beacon would be able to work for a very long period given its low energy requirements. RIBR

Gazprom finds India 'incredible' LNG market

reuters/vostock-photo

After 18 years of tortuous negotiations, Russia looks set to join the WTO by yearend, marking a triumph for global trade liberalisation.

News in Brief

WTO Director-General Pascal Lamy, who pulled off the deal with Georgia, shares a joke with Russian President Dmitry Medvedev.

innovative drugs in the domestic market and increase its investment attractiveness. After Russia joins the WTO, the data exclusivity regime aimed at protecting the data of pre-clinical and clinical trials of innovative drugs will start working locally. This will result in foreign and domestic drug makers getting six years of patent protection for innovative

medications to be sold locally, saysVladimir Shipkov, executive director of the Association of International Pharmaceutical Manufacturers. Russia will significantly increase its commitments to multinational insurance providers. It will allow 100% foreign ownership of nonlife insurance companies upon accession to the WTO.

India is an "incredible" gas market where the domestic supply shortfall offers a huge opportunity for a portfolio LNG player such as Gazprom, said Nigel Kuzemko, the global director of LNG development at the Russian state-owned company's trading arm. "Current demand for natural gas in India is around 120 Bcm/year, equivalent to around 88 million mt/year of LNG. We see India as one of our key markets for LNG supplies," said Kuzemko. RIBR

Titanium JV with India may see a new partner

Eurozone crisis Russian foreign minister wants deep IMF reforms in return for bailout aid

Will BRICS rescue eurozone from disaster? The G20 summit in Cannes underlined the emergence of BRICS as a global player as these major emerging economies took a joint position towards the eurozone crisis. Andrei Veisman

reuters/vostock-photo

RIBR

The much-hyped G20 summit in Cannes did not produce any spectacular results. But it will stand out for highlighting the larger shift of economic clout to BRICS nations whose leaders decided to work out a joint position on managing the eurozone sovereign debt crisis. Clearly, major emerging markets have a stake in preventing a financial disaster in Europe because it would inevitably spread to other regions. The EU is the key trading partner for BRICS. China’s trade with the EU stands at 35.6 billion euro, 800 million

euros more than the EU’s trade with the USA. For Russia, the eurozone accounts for 50% of its foreign trade and 45% of its currency reserves. If the Greek contagion spreads to other debt-ridden

EU countries, a new world financial crisis is guaranteed. Experts reckon that 1 trillion euros will be needed before the end of this year and another 1.5 trillion next year to contain the crisis.The European Financial Stabil-

The leaders of the BRICS countries agreed to help the eurozone at the G20 Cannes summit.

ity Fund (EFSF) can’t resolve this problem alone.The hard truth is the eurozone badly needs the BRICS’combined financial muscle. “The appearance of a common BRICS position means that it’s becoming a real global player. It is worth the effort. These countries can meet the challenge”,says Nikita Maslennikov, adviser to the Russian Institute of Contemporary Development. It’s “the start of the process of BRICS positioning itself as a subject of geopolitics. It is already a player in the world economy but it has yet to emerge as a player in global politics,”he stressed. BRICS countries have been discussing options for helping the eurozone since September. They have the backing of the IMF, as its head Christine Lagarde has often repeated.This is all the more important because the IMF

could provide the most convenient channels for delivering such aid. “The overall picture shows that BRICS countries tend to solve issues collectively.That means that BRICS will channel its aid to the Europeans through the International Monetary Fund”,says Maslennikov. On November 7, Russian Foreign Minister Sergei Lavrov confirmed that the world’s biggest emerging economies were ready to give financial assistance through the IMF, but only in return for“deep” IMF reforms.“Such a possibility does exists”,the minister said.“Our countries are ready to take part in these combined efforts, including by issuing loans through the IMF channels.” Lavrov’s statement is further proof that Moscow is reluctant to lend money directly to the European anti-crisis fund (EFSF), experts point

out. In mid-October, Russia had indicated that it was going to lend the eurozone $10 billion. At the Cannes summit, Russian President Dmitry Medvedev reaffirmed that this was a possibility. Beijing has already bought 100 billion euros worth of Italian debts and EFSF head Klaus Regling has held talks in the Chinese capital on a further $100 billion loan to the Fund. “BRICS aid to the EU is a distinct possibility”,says Andrei Mordavchenkov, financial markets operations director with the Partner company. It can be channelled either through the IMF in the shape of credits, or through purchase of the much-touted EU bonds.”“Financial support for the eurozone by major emerging markets is highly probable,” says Bogdan Zvarich, chief analyst with NetTrader company.

ria novosti

Over five years ago, Russia and India agreed to establish a JV that would produce titanium dioxide in Orissa. Soon after, the Russian and Indian shareholders found themsleves locked into a conflict. The land became a key stumbling block.There is now a strong chance for an out-of-the-court settlement.The conflict is close to its end, says a source close to one of the JV shareholders. The Indian side has indicated its intention to withdraw from the project, which could leave the Russian shareholder free to find another Indian partner. RIBR

Three Indians get Russian state awards Russia has honoured three Indians with state awards for their contribution to strengthening Russian-Indian cultural ties. By an executive order of Russian President Dmitry Medvedev, Dandapani Jayakanthan, Director of the Indo-Russian Friendship Society, was awarded with the Order of Friendship. Padmaju Mandayam Gomatam, classical Indian dance teacher of the Nrityam Cultural and Dancing Society and writer-philologist Achala Moulik were awarded with the Pushkin Medal for the outstanding merits. RIBR


BUSINESS REPORT

Companies

in association with rossiyskaya gazeta, russia Wednesday, NOVEMBER 9, 2011

Energy Driven by the dream of a single energy market, pipelines will cater to markets in East and West

Let gas flow where profits are Russia is fast building a network of pipelines that will allow it to switch gas flows to wherever money and markets are. pavel arakov

The basic documents governing the operation of the single Asian energy market are slated for signing in July 2012, says State Duma Deputy Speaker Valery Yazev. Gazprom is supplying liquefied natural gas (LNG) to Japan and South Korea and is in talks to lay pipelines to those countries. Simultaneously, new pipes are being built toward Western countries. In the future, this infrastructure will allow for switching gas flows to wherever it is more profitable. A pine forest runs down the coast, near the leaden waters of the northern Baltic Sea. Emerging right from beneath the shore’s wet sand are pipes that will carry gas from distantWestern Siberia to Lubmin, Germany starting in November. The Nord Stream pipeline is laid deep undersea. The underwater part alone, stretching from Russia’s Vyborg to Lubmin, measures 1,224 kilometres. After that, gas produced in wells of the Ob River Basin is pumped through other pipelines for a few thousand more kilometres. “Along with my colleagues from the Asian Parliamentary Assembly, we have come up with the concept of a single Asian energy market that will reflect the key principles of international energy cooperation. In preparing the declaration, special emphasis will be placed on the principle of respecting state sovereignty with regard to natural resources and ensuring the safety of international energy transport,” says

reuters/vostock-photo

riBr

The network of main gas pipelines in Russia’s East SIberia and Far East is still under construction.

of gas per year, with gas reserves estimated to last for more than a century. This will permit us to not only provide supplies to Europe, China, South Korea and Japan, but also encourage socio-economic development in our country,” says Yazev. “By 2030, Europe will be consuming around 600 billion cubic metres of gas per year. It is our main market. We have contracts running through the 2040s.” To honour all its contracts, Russia needs to supply gas in all directions and plans to boost gas output to 1 trillion cubic metres per year by 2030.

Yazev.“Reconciling the interests of the world’s largest energy consumers like China, India, Japan and South Korea with those of energy producers is not an easy task, since the latter wants to sell at a high price, while the former to buy cheap.” Russia is, therefore, rapidly creating new routes to deliver its gas. The Nord Stream was the first major gas pipeline built to Europe after the collapse of the Soviet Union. Next in line is the the South Stream, a pipeline leading to Europe that would take the south bypass. “Russia is currently extracting 650 billion cubic metres

However, the Eastern market is still evolving.“Diversifying export energy markets and commodity structure is the major focus of Russia’s foreign economic activities. This will permit us to increase our share of hydrocarbon exports to Eastern countries to 10–13% by 2015,” Deputy Energy Minister Anatoly Yanovsky told a South Korean newspaper. Negotiations have been difficult. Gazprom and CNPC inked their first agreement on gas supply to China in March 2006, for 68 billion cubic metres of gas after 2011 – a preliminary agreement stipulating delivery

"We believe we should follow the trend of the market and be more focused on Asia." along two routes. Gas for the Western pipeline, with a capacity of 30 billion cubic metres, is to be provided by the Chayanda and Yamal fields inWestern Siberia.The Eastern gas pipeline, with a capacity of 38 billion cubic metres, will link China with fields in Eastern Siberia and Sakhalin. China is willing to pay a maximum of $250 per 1,000 cubic metres, while

Gazprom wants at least $350. The final decision has been postponed until the end of the year. On August 5, Gazprom and South Korea’s Kogas approved the roadmap that could mean a pipeline laid across North Korea to South Korea. The first phase of the pipeline will have a capacity of 6 billion cubic metres. Later on, it's capacity will be expanded to 30 billion cubic metres – enough to sell gas to both Koreas. For now, however, while pipeline contracts with large consumers in the Far East have not yet been signed, Moscow has room to manoeuvre, say experts. “In terms of transport costs, it is very convenient to supply gas to Europe from Western Siberia, and to Southeast Asia from Eastern Siberia,” says Dmitry Aleksandrov, head of the research department at the investment company Univer Capital. While the network of main pipelines in Russia’s Far East is still under construction, there is no direct route for supplying gas from Eastern Siberia to the European part of Russia and Europe. The two gas transit systems will , however, be linked soon. The net result: Russian gas producers will be free to choose between export directions: the gas can either be sent to any European country or, with a liquefaction plant in the Far East, to any country in the world. Or it could even possibly be pumped through pipelines to either of the Koreas or China. In this case, whether or not any particular country wants to buy Russian gas will cease to be of crucial importance. As Dmitry Aleksandrov says, everything will be determined by free market prices.

Business A pact to speedily register domestically made drugs in the Russian market on the way

Indian pharma companies are set to grow bigger in the Russian market, says B.P. Singh, an Indian businessman. elena krovvidi ribr

Over the years, pharmaceuticals have emerged as an important pillar of the burgeoning Indo-Russian partnership. India is the third largest drugs exporter to Russia.“Gone are the times, when Indian medicines were mistrusted and considered inferior in quality compared to American or European ones,”says B P Singh, general director of the CORALMED pharmaceutical company.“Now, Indian drugs are firmly established in the Russian market. They are also quite popular in many other markets, thanks to their good quality and low prices – five or six times lower than the prices of the

Western countries produced medications,” he says. The prices for Indian medicines are expected to plummet even more due to the growing number of factories and intensifying competition. In Russia, according to Dr. Singh, a Peoples' Friendship University of Russia (PFUR) graduate majoring in linguistics, who has lived in the country since his student days, there are at least 10 to 15 good Indian pharma factories. He recalls his happy student years at the PFUR and the first steps in the pharmaceutical business with warmth. Helping boost Russia’s pharma industry would be a good way of paying back for free quality education he got there, he says. Russia produces only 20% to 25% drugs while the export of medicines amounts to 70%, which explains high prices for a good many drugs in the Russian market. Build-

dpa picture-alliance/Vostock-photo

Indian boost for Russian pharma market

CORAL-MED's general director B.P. Singh (inset) plans to build a factory in Russia with two large Indian companies.

ing factories and investing in indigenous drug production hold the key, says Singh. Having built his own business from the scratch in the 1990s, when the former USSR transformed into a completely different country, Singh is not afraid of difficulties. As he puts it, when

the times were tough, God helped him, and he believes if a person is honest and hard-working, he can pave his road to success. Currently, opening a drug factory in Russia is mired in red tape.The quality control and certification system in India is very much different

from that in Russia. The hardest time for a factory owner in Russia is getting the permission to open a factory. The registration can take up to two years and cost large sums of money while the company loses its potential profit. Indian factories, on the contrary, are encouraged to start their business and are spared ponderous procedures. For example, the pharma companies in India don’t pay taxes for the first ten years of their functioning, and they don’t have to go through complex certification procedures at the initial stage, but are routinely checked. However, the Russian government has lately taken a slew of steps to cut down on red tape to encourage the Russian pharmaceutical industry. According to a senior Indian government official’s statement, the good news is that India and Russia will sign a pact in December to speed up the registration of domestically made drugs in the Russian market. Indian pharmaceutical companies export drugs worth $600 million to Russia every year. Russian companies are in talks with Indian companies to set up testing facilities and

infrastructure on the Russian soil to get a bigger market share in Russia, says media reports quoting Devendra Chaudhry, joint secretary in India’s ministry of chemicals and fertilizers. Singh, who has won many awards in golf and badminton competitions as a member of Russian amateur teams, is upbeat about his business plans. Singh’s company CORAL-MED plans to build a factory in Russia in collaboration with two large Indian companies in the framework of Putin’s Pharma 2020 programme. The companies in question are Panacea Biotech and Lupin Ltd. According to Dr. Singh, the companies are covering all the costs and offering their technologies of production. The only thing that is needed from the Russian side is to support their initiative and land for the factory, which is not far from Moscow and not very expensive. Big Indian companies find it easier to forge tie-ups with Indian companies in Russia as they know the ropes and are familiar with the Russian mindset, which proves very helpful while producing and distributing medicines in the Russian market.

defence

Night Hunter misses target, but hope floats Viktor Litovkin

I

Specially for RIBR

ndia has decided to purchase American AH64D Apache Longbow attack helicopters, which beat the Russian Mi28N Night Hunter attack helicopter in a tender. The Apache was apparently chosen after comparative tests of the two vehicles, performed in late 2010. A representative for the Western Air Command in New Delhi noted that“both machines worked perfectly, but the U.S. one was superior in key features such as increased capabilities and all-weather use.” Such definitions (“increased capabilities” and “superior all-weather use”) are particularly slippery. Experts familiar with the Mi-28N insist that it has the very same capabilities as the Apache. The 28 N like any other vehicle, has its drawbacks – its relatively ineffective radar system and weak night sight capabilities, for example. The organisers of the tender reportedly listed 20 points of criticism that kept the Russian chopper from winning the tender. All of these criticisms are more or less valid. But many experts believe that they are unlikely to have played a decisive role. The on-board radar system and night vision capabilities could have been improved before delivering the Mi28N to the Indian army. This could have included working with foreign companies and using equipment made outside Russia. That’s what happened with the Su-30MKI.Similar upgrades could be carried out on the Night Hunter. But New Delhi was not interested.Why? There are many reasons for this. The main reason for preferring the AH-64D is that the Hunter has only just been put into operation in its own country – the Russian Air Force currently owns just twenty Mi28Ns. Boeing’s Apache Longbow, on the other hand, will soon be twenty years old – and its first model is almost thirty years old. Major upgrades began in 2006, with a plan to develop the new 284AH-64D

helicopter. One is not sure that India will get the latest version of the Apache, but the previous model is also a good purchase. There is one more important reason. The approach of India’s Armed Forces to procuring combat equipment is one of diversification. This approach does have its drawbacks, but then India won’t be held hostage to the interests of one government. Currently, 70–80% of India’s military equipment is Soviet or Russian-made. The complicated processes taking place in Russia’s military-industrial complex, the delays and the quality of the products delivered also influence the selection process. But this doesn’t mean that New Delhi should abandon Moscow, a tried-and-tested partner in military-technical cooperation. Russia has many advantages. First of all, Russia has been doing this for over fifty years, with successes far outweighing the failures. Secondly, Russia has never used its arms supply, the sale of licences and manufacturing to local enterprises, or upgrades as leverage against India in political matters.This, however, is something that Washington does on a regular basis. Looking ahead, India has signed a contract with Rosboronexport for the supply of 80 Mi-17 military transport helicopters. Besides, India is holding two more tenders for the supply of 12 heavy transport helicopters and 197 general-purpose light helicopters. The total value of the tenders is $2.5 billion.The contract to deliver heavy transport helicopters will go to either the Russian Mi-26T2 or the American CH-47F Chinook, while the contract for the light helicopters will go to either the Ka-226T or the Eurocopter AS550. Russian vehicles stand a high chance of winning these tenders. The Mi-26T, for example, can carry upto 20 tonnes of cargo, while the Chinook can carry just 13.5 tonnes in the fuselage or 14.5 tonnes in external store.The Russian Ka226T light helicopter is also a superb vehicle, notable for its unique modular ability to change function at a moment’s notice. In Moscow, there’s no doubt that New Delhi will make the right choice.

event cooperation Trade and Investment Forum opens on Nov 10 The fifth Russian-Indian Forum on Trade and Investment will open in Moscow on November 10. Despite the global financial crisis, the Indo-Russian trade touched $8.5 billion in 2010, thrice as much the figure for 2005. The two strategic partners are targeting bilateral trade volume of $20 billion by 2015. This may seem quite challenging, but if both sides take positive steps to scale up their two-way trade and investment, they can even surpass the target. The forum, which takes place alternately in India or Russia every year, provides a networking platform for businessmen of both countries to strike deals and explore new areas of investment. This year, there will be special focus on cooperation in infrastructure, including production/power transmission, roads, ports and airports construction, public transport development and pharmacy. A separate roundtable will be devoted to forging partnerships in innovations and the commercialisation of scientific research and technology. Find out more about the 5th Trade Forum on indrus.in

CONTACT US recommends...

For editorial inquiries, please, contact us@rbth.ru

Find out the frequencies in your area

http://english.ruvr.ru

For partnership or advertising contact sales@rbth.ru ph. +7 (495) 7753114


BUSINESS REPORT

Technology

in association with rossiyskaya gazeta, russia Wednesday, NOVEMBER 9 2011

Innovation The city, a magnet for start-ups and global giants, will be completed by 2014; to host 15,000 scientists and businessmen

Skolkovo: Fast track to the future Russia is rapidly building an Innovation City near Moscow, a prized new home for investors, scientists and researchers.

A 600-hectare business park under construction has five clusters: biotechnology, energy, IT, space and nuclear technology.

Alexander Vostrov

press service

riBr

Skolkovo has invested 4.7 billion roubles in 40 startups. 250 companies to set up shop.

Pacts signed with Boeing, Intel, Cisco, Nokia, IBM, GE and Siemens for setting up research network.

oped in collaboration with global landscape design masters such as French architect Michel Desvigne to lure promising young scientific startups. Living conditions are, however, certainly not Skolkovo’s only way to attract investment projects. Companies participating in the project will get considerable customs and tax benefits.At this

point, it already has 200 members and the figure is likely to reach 250 companies by the end of the year. Similarly, by year-end, the Foundation will have spent over 1 billion roubles to fund 30 startups. All in all, Skolkovo has already invested 4.7 billion roubles in 40 startups. Yet one should not get one’s hopes too high and expect to receive everything immedi-

tirely by the government. Some experts are cynical. “How can they speculate on building a competitive environment in Skolkovo while living off the state?”wonders Mikhail Emelyanov, vice chairman of the Fair Russia faction in the State Duma. The powers-that-be driving the Foundation are, however, optimistic, as anyone attempting to create technocracy within the confines of a particular city should be.“It is customary to castigate all government initiatives in Russia and nothing could be more pleasant than to lash out against what appears to be a very controversial project,”

ately. First, a company has to pass through a selection process and prove that it deserves the funding. The future innovation city boasts five technology clusters: IT, nuclear, space, energy and biomedicine. Within this framework, the Foundation’s authors are planning to build a huge international research network that should be of equal interest to investors and scientists. Skolkovo has signed agreements with such giants as Boeing, Intel, Cisco, Nokia, IBM, GE, Siemens and many others. The centre’s weakest point so far is financing. Up till now, it has been funded almost en-

Aha!Geiger counter, mobile, doc... riBr

How did you come up with the idea of the DO-RA? I had the idea in March 2011, when I was asked to write an article about the Fukushima events. As I was taught at the Bauman Technical University, if you don’t understand something, figure it out; if you doubt something, verify it; and if you feel confident, do it yourself! That’s exactly what I did in this particular case. The DO-RA name is an acronym of the words dosimeter-radiometer. Did you face any difficulties? Assembling a team of developers was a problem - it took around two months. I stumbled upon a worthy team by pure luck. Another problem was financing.Very few Russian banks lend money for

What has been Skolkovo’s role in your project? I used the Skolkovo website to create a resume and a roadmap for the project, including a detailed description of its research and development components and a commercialisation plan. After passing a preliminary assessment by a panel of ten industry experts, five Russians and five foreigners, I obtained the board’s conclusion on my project’s compliance with Skolkovo requirements. As a Skolkovo resident, OAO Intersoft Eurasia, the operator of the DO-RA project, will only have to pay a 14% payroll tax.We will be exempt from all other taxes. One can only

A tri-leaflet heart valve. A revolutionary drug for cancer treatment. Skolkovo promises to transform our lives in myriad ways. Tatyana Toropova

press service

RIBR

A picture of radiation dosimeter, a unique invention.

qualify for such exemptions under the Russian tax system by conducting R&D work as a part of proprietary innovation projects with the subsequent commercialisation of the invention. How does the device respond when it detects excessive radioactivity? The DO-RA device currently operates in four different modes. 1. A radiometer: Displays a radiation map of a given territory on a cell phone screen. There are three levels of alert: Normal (green zone), high-risk (amber zone,) and no-go/urgent evacuation from the contaminated territory (red zone.) 2. A dosimeter: The device displays the radiation dose absorbed by the holder. In

the event of exposure to a critical dose, the DO-RA will also alert its holder with voice, sound, text, and light signals. 3. A map: A real-time radiation map of a given territory, site, or reservoir is superimposed on a downloadable world map on a smart phone screen. The device owners can supplement this map with their own GPS/GLONASS measurements using their smart phones. 4. A Personal Office. In this mode, a cell/smart phone can receive relevant and up-todate information on potential risks for the body and different organs associated with the absorbed radiation levels as recorded in the personal dosimeter. Users or their doctors can access the Personal Office data from anywhere in the world.

biography

itar-tass

Alexandra Bazdenkova

scientific and technical projects. Most Russian inventors are far from rich, while people with money don’t like to risk their capital. Hence the main problem of Russia’s inventors: a lack of funds to promote their inventions. My advice for Russian inventors is to fight for grants to develop their inventions from places like Skolkovo.

nowned institutions will be invited to deliver lectures. Will Skolkovo, a brainchild of President Dmitry Medvedev, survive the change in the regime? Political scientist Nikolai Zlobin dubs the innovation city as Medvedev’s personal ambition and doubts that the project will be of any consequence to Vladimir Putin, who will almost definitely be the next president. Naumov disagrees and feels the project is above personal idiosyncrasies of politicians. “The project’s future does not hinge on any possible reshuffles within the government,” he says.

Heart talk: Where leeaflets of life bloom

Interview vladimir yelin

Vladimir Yelin has invented a radiation dosimeter that can be integrated with mobile devices. He speaks about key features of this unrivalled invention.

ups will also help entice investors. In fact, Skolkovo and the Massachusetts Institute of Technology have signed an agreement to set up a joint Skolkovo Science and Technology Institute. The institute’s founders predict it will be the first educational institution in the world that can handle business and innovative activities alongside training programmes and scientific research. Students will receive guidance here from 200 lecturers and 300 research fellows, including foreigners. Scientists from MIT, Harvard and Stanford Universities and other globally re-

says Skolkovo Foundation Vice President Stanislav Naumov. He, is, however positive that the government will cut its share in the project down to 50% and subsequently withdraw from it altogether. There is hope. Portfolio investments in the project have already reached $234 million, with global giants like Siemens, Boeing, EADS, Intel, Nokia, General Electric and IBM already among its business partners. Furthermore, the Foundation is quite familiar with market laws: you have to get investors interested or you will not sell your product. The opportunity to create start-

Vladimir Elin: born in 1957, graduated from the Moscow High Technical College after N.E.Bauman (1984). PhD in Technical Science. In 1995-2007: Founder and President of the corporation «United International Network of Custom Warehouses» LLC. Since 2007, Chairman of the Board of Directors of "Smart Logistic Group" CJSC. Since 2011, DO-RA Project Manager and Investor.

There is a lot of talk floating about Skolkovo projects. But it’s just that, talk. To get an idea of how the foundation actually works, consider the following story. A group of scientists working at a Moscow company has developed a unique tri-leaflet artificial heart valve; to this day, heart surgeons use bi-leaflet valves designed by the Americans more than 20 years ago. The multi-million dollar heart valve production and marketing industry has been divided among three U.S. companies. The Russians have invented a more sophisticated valve where a small black cupola opens up in three leaflets. While the design seems extremely simple on the outside, it took the highest technology available to develop it, as the leaflets must open and close 40 million times a year. “Our valve model is based on three nano components,”explained Alexander Samkov, one of the developers of the device. “Everything was made using special equipment with upto 150-nanometer tolerance.We accelerate high-energy carbon ions in a particle accelerator and

photoxpress

Russian rock singer-songwriter Boris Grebenshchikov famously sang ‘Halfway between Kalinin and Tver’. Speaking allegorically, it tells the story of Russia's path since the collapse of the Soviet Union and beginning of perestroika. It compares the country to a train travelling from the city of Kalinin (the city’s Soviet name) to Tver (the name it used to have before the Revolution and regained in the 1990s). The 1997 song resonates perfectly with present day reality. Although it has been some time since Gorbachev’s reforms kicked in, some of Russia's industries are still where they were in the late 1980s. The Soviet Union had one of the greatest schools of scientific thought in the world during the days of the planned economy, but with the advent of capitalism, it became non-competitive. A consensus has emerged among Russia's ruling circles that the economy needs to move beyond its dependence on oil and gas exports and science must be put on a capitalist development track. So the Skolkovo Foundation is seen as a locomotive designed to finally drag it from Kalinin to Tver. Lenin wanted to build Communism in a particular country and we want to build the country’s high-tech future in a particular city, so goes the refrain at the Skolkovo Centre. The city – dubbed innotown or innovation city – is set to be completed by 2014. Located just outside the Moscow Ring Road (MKAD), the city will feature a stateof-the-art transport system and infrastructure. It will be home to 15,000 people: scientists, researchers, businessmen and their families. The project has been devel-

smash them into a titanium surface to get a material compatible with human flesh.” Technical tests and clinical trials have been completed and patents have been obtained in Russia, Europe, the US, China, and Brazil. The Russian Ministry of Health and Social Services has given a green signal to start manufacturing and m a r ke t i n g t h e d e v i c e . Fourty people are already carrying them around in their hearts, including a young boy who received an implant when he was six! But the small company of just 35 people found it impossible to compete with the American giants dominating the market. They needed investors to establish mass production. Offers were coming in from the Chinese, Japanese, and even

the Americans. But the Russian scientists wanted their invention to remain in Russia’s hands. The company applied to and became a member of the Skolkovo Foundation. This doesn’t mean that the devices will be produced in the City of Innovations since there will be no manufacturing base there at all. But the company may obtain a grant and legal assistance with the necessary documentation, while venture funds will find an investor in the production of“leaflets of life”. Another project being developed by a Skolkovo participant may revolutionise cancer treatment. A drug has been developed that carry anti-cancer drugs directly to the nuclei of target cells that need to be destroyed. In order to get the drug to the market, expensive clinical trials are needed in addition to regulatory approvals.The developers of the drug applied for a $500,000 Skolkovo Foundation grant and have raised as much from investors. Other areas in which researchers in Innovation City are working include the development of speech recognition software, an artificial 3D vision technology, and a nuclear reaction-based battery with a 10-year service life.Thanks to Skolkovo, perhaps the entire world will be using these technologies and devices in the future.


BUSINESS REPORT

Feature

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA WEDNESDAY, NOVEMBER 9, 2011

Heritage Officially, the restoration work costs $635 million; Soviet hammer-and-sickle has given way to tsarist symbols

A legend is reborn: 6 years on, curtains go up at Bolshoi! PAUL DUVERNET RIBR

In the summer of 2005, the legendary Bolshoi Theatre downed its shutters, plunging music-lovers and balletomanes into wistful sadness. And a bit of shock. Some foreign diplomats and expatriates were devastated when they realised they would complete their postings without ever seeing the celebrated Main Stage. The theatre’s dramatic renovation did not come a moment too soon.The building was literally on the verge of collapse. Overtime, the Bolshoi Theatre audience became painfully aware that the original completion date for repairs was an arbitrary date that would never be met. “New issues emerged after the closure. When we scraped off the plaster covering the walls, we discovered seven massive cracks running from the foundations to the roof. Actually, the walls were only standing, thanks to their own weight,”Anatoly Iksanov, the Bolshoi’s director and a longtime adminis-

Tradition will reign. The 236th season will open with Ruslan and Ludmila, a symbolic opera. work costs $635 million. Some reports suggested that in the end, the budget bloated to twice that. A federal investigation committee was formed two years ago to ensure that public money had not been siphoned off, but its report has yet to be published. The Bolshoi Theatre has maintained a policy of no comment on allegations of corruption. “Our experts agree that the final cost is actually two times more than the official one,” said Kirill Kabanov, president of

the National Anti-Corruption Committee.

A new shine

Yet meticulous care and loving attention defined the restoration. The most important result of the overhaul is a vast improvement in the acoustics, says Iksanov. There have also been aesthetic improvements. The old balcony wood has been replaced by pine from Karelia. Even the seat and curtain fabric were chosen to fit acoustic experts’ recommendations. Four tonnes of gold have been used in the theater, while Soviet symbols displayed until 2006 (such as the hammer and sickle) have given way to original imperial tsarist symbols from 1856. Nevertheless, Soviet dictator Josef Stalin’s imprint will stay. Stalin had a custom workroom designed for himself in a box near the stage. The room was scrupulously restored, “but it will remain inaccessible to the public,”says Iksanov. Thanks to a more modern design, there is even more space at the Bolshoi. This extra space will be used as rehearsal rooms, while the main stage will gain more depth. It should also be noted that the metro line passing ever so close to the

Bolshoi was closed for a few days to lay new tracks designed to reduce vibrations that could be felt even inside the concert hall.

Playing it safe

The theatre’s artistic policy is perfectly in sync with its time. Conservatism is a reigning trend and the Bolshoi will still rank itself among the most traditional in the world.“We are going to direct great operas and ballets from the past; it is our top priority,” says Iksanov. During the last decade, the Bolshoi Theatre rarely surprised or shocked its audience. One of the few exceptions was the creation of the “Children of Rosenthal” opera by Leonid Desyatnikov and Vladimir Sorokin — the first world premiere of an opera at the Bolshoi in a quarter century. Alexei Ratmansky, a former artistic director of the Bolshoi Ballet, also focused on forgotten avantgarde works of the 1920s. Of course, these works are only shown on the intimate New Stage, an adjacent theater of a more modest size opened in late 2002. The 236th season opened with“Ruslan and Ludmila”, a symbolic opera often regarded by musicologists as

AP

trator, said in a recent interview with RIBR. However, no one would have imagined that they would have to wait until October 28, 2011 to enter the legendary interior again. The impact was electrifying as the elaborately illuminated theatre reopened amid a constellation of global celebrities. As Russian President Dmitry Medvedev opened the gala, there was national jubilation. Officially, the restoration

The revival of a national brand The iconic Bolshoi Theatre re-opened its doors on October 28 with a gala concert.

the birth of the Russian lyrical genre. The production will be directed byVladimir Yurovsky and staged by Dmitry Chernyakov. The first ballet of the season,“Sleeping Beauty”,with original choreography by Marius Petipa, revisited by the Bolshoi’s art director, Yuri Grigorovich, will open in November. Later in the season,“The Knight of the Rose” by Richard Strauss and“Charodeika”by Tchaikovsky, will represent the only other new productions of a modest first season. Lovers of contemporary dance can also look forward to the fresh, breathtaking work of choreographer William Forsythe.

RIA NOVOSTI

Russia's historic Bolshoi Theatre reopened on October 28 after six years of elaborate, painstaking reconstruction.

Travel Food is cheap and so is the metro ride. Only hotels are expensive. And yes, it is safe unless you stray onto shady dark streets

Forget stereotypes, discover the real Moscow Image trap "Before coming, I thought Moscow winter would be terribly cold. But when I saw the first snowflake of my life and made my first snowball, I felt very happy. Actually, I like the weather here more than India." Paribhi Sharma, 28, India.

INNA LEONOVA RIBR

Is Moscow more expensive? Many foreigners feel that Moscow is an expensive city. But some have a more rounded, nuanced view. “Housing is expensive. Transport and culture are rather cheap in comparison to western Europe,”says Lucie Pokorna of the Czech Republic, who has frequently visited Russia as a tourist. “I think Moscow

"The stereotype is that Moscow is big, crowded, and that people are always in a hurry. These are all true! However, it is possible to find quiet places, and Moscow's parks are wonderful." Andrew Close, 40, UK "Before I visited Moscow, I thought it would be unpleasant and the people would be unfriendly. But I realised that generally, if you need help, people will help you. I can go out alone and don't feel unsafe." Sarah Kay, 22, England.

LORI/LEGION MEDIA

Imagine Moscow and stereotypes start flowing thick and fast. Horribly expensive, anarchic, lawless, it gets dark by noon, melancholic and depressive. And yes, every Russian woman is a potential Miss World. Well, stereotypes sometimes help to conjure up a foreign place, but they are invariably distorting. These stereotypes hark back to the Cold War and the Iron Curtain, when only a few people could afford to see for themselves what things were really like“over there.”Twenty years have passed since the collapse of the Soviet Union, and to quote singer Michael Stipe, it was“the end of the world as we know it.” After talking to many expats, RIBR found that Moscow has a visceral impact. Rarely did we meet someone who is blasé about the place. It punches them in the gut and teases the imagination with its ageless beauty, epiclike grandeur and a largerthan- life feel to its bustling life. To know what foreigners think about Moscow, RIBR interviewed dozens of expats and tourists aged between 22 and 50. Here is what they think.

To Russia with love: Indian tourists amid the throng of visitors at the Kremlin in Moscow.

Twinning with New Delhi The Moscow City Government and the Legislative Assembly of the National Capital Territory of Delhi have approved a cooperation programme for 2012-2014, and are planning to sign it during the Days of Moscow in Delhi in April-May 2012. “Delhi is extremely important as a strategic partner to the government of Moscow. We believe that these kinds of regional connections between the world’s major cities help generate new ideas,” said Sergei Cheremin, head of the Moscow City Government's Foreign Economic and International Relations Department during his recent

India visit. “Top-priority cooperation projects and joint efforts in the programme will involve spheres like economic and trade policy, housing and utilities infrastructure, architecture and real estate development, traffic management, the Safe City program, healthcare, education, culture and tourism,” he said. Among other things, the two countries will continue the practice of holding the Days of Moscow in Delhi and Days of Delhi in Moscow in 2012-2014. “The events will include exhibitions, concerts, and feature documentary films from both countries,” he said.

can be expensive, but there are also a lot of ways to save money as well, especially on food. Eating street food and eating in places that serve cafeteria-style food, helps to save on food costs. Also, using the metro is a lot cheaper than taking taxis,” says 22-year-old Brandon, an American. Considering that an average business lunch in a Moscow restaurant costs 300 rubles ($10) and a metro ride costs 28 rubles (about 90 cents), hotels are by far the most expensive part of a trip to Moscow. A recent survey by the hotel.info portal revealed that the average cost of a hotel room in the Russian capital this autumn is 140 euros (more than $200) a day, which makes Moscow

the second most expensive capital in terms of hotel accommodations, after Oslo. However, if one looks at the difference in average prices between Moscow and for example, London, which is the fourth most expensive city, it is less than 4 euros (137 euros). Part of the reason for the high prices is the shortage of hotels in Moscow. There are 215, according to official statistics. Things are looking up though: in 2011, three new hotels were opened in Moscow, four more will open before the year is out and 14 hotels in the center are due to open in 2012. According to City Hall, by 2020, the capital will have 535 hotels capable of accommodating 150,000 tourists.

An affordable visit Try to save by choosing the right season for your visit: January is considered to be the off season, which includes the three Christmas weeks. Few conferences are held during that period and only 10 to 15% of hotel capacity is used, according to Moscow’s Tourism Committee. Another way to save is to find an affordable hostel. There are officially 55 hostels in Moscow, almost all of them in the center. Twenty were opened in 2011.The average price per night is $1428. Picking a good bargain “Souvenir shops are to be avoided at all costs, especially in central Moscow, as their prices could bankrupt small

Ask directions from a beauty “As for finding your way around, the metro is really pretty clear and simple. The crowds can be a bit intimidating if you get lost, but if you're underground, you can find your way.Above ground, the streets can be confusing, and they're not always clearly marked,” says Elliott Estebo. Street signage is increasing, and you can always ask directions from a passer-by: the younger the person, the more chance he or she speaks English. And one stereotype is true: there are beautiful women walking around in stylish clothes, just as you might imagine.You can even ask them directions. But an elder Babushka (grandmother) is more likely to take you by the hand and show you your train. And if you try just a few words in Russian, you will be heartily applauded.

countries. Markets are the best place to look for that cheap, authentic piece of Russian culture that you just can't live without,” advises Laura Gardner from Manchester, UK. One of the most famous souvenir markets is located at the picturesque Izmailovsky Kremlin. The average prices there are lower than in the shops and, most important, you can bargain. Expats and tourists agree it is a great place to practice your fledgling Russian. Learn to ask “How much?”Then learn to walk away when you hear the answer. The price goes down when they see your back. It works every time. Dangers at every step? According to The Village portal, 15% of expats interviewed are afraid of nationalists — and not without reason.“If you are a minority going to Moscow, don't let the comment I wrote above discourage you. Most Russians I met were very loyal, friendly, and generous. However, there are a few bad apples mixed in as well, and you probably will come across them at some point during your stay,”says Cole Margen of California. Here are some don’ts: do not stray onto unknown streets after dark and keep away from groups of strangers. Official statistics state there were 24 crimes against foreign tourists in Moscow last year. "Someone told me Moscow is a dangerous city. But when I came to live here I realised that it's not as dangerous if you are careful and observe common safety rules.Such as: try to avoid metro in the night, don’t go the darkest area at night and don’t put all your money in the bag," says Neeraj Khemani from India, who has 2,5 years' experience of living in Moscow.

DIAL FOR FREE

24x7 helpline in English

PHOTOXPRESS

Moscow is changing by the minute. It's time to let go of stereotypes, and discover a vibrant, pulsating city that never ceases to amaze with its myriad charms.

There is now a round-theclock call center for Englishspeaking tourists in Moscow. Operators are ready to answer all your questions about the capital’s places of interest, transport, or help in an emergency. Telephones: 8-800-220-00-01 and 8-800220-00-02. The call is free.

Oct 2011, Russia&India Business Report  
Oct 2011, Russia&India Business Report  

Russia&India Business Report is a monthly publication brought out by Rossiyskaya Gazeta, that is published in association with The Economic...

Advertisement