Tuesday, September 25, 2012

RUSSIA ANDGREATER CHINA

Monthly supplement from Rossiyskaya Gazeta (Moscow, Russia) which takes sole responsibility for the contents A product by

Against all odds Outstanding disabled athletes show determination despite adversity

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Tycoons in battle of BritainCourt cases in London expose a culture of patronage and bitter rivalry among billionaires

Nation’s defence chiefs aim to ramp-up military spending

The leap forward

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PAGES 8-9

SPECIAL REPORT

Olesya Vladykina shows off the gold, silver and bronze medals she won at the London Paralympics 2012.

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RUSSIA AND GREATER CHINA2 Tuesday, September 25, 2012

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Hypercube looks to a green future

The Hypercube is the brainchild of architect Boris Bernaskoni. Scientists are hoping to clone an ancient mammoth.

Alexander Vostrov

Boris Bernaskoni, the architect behind Hypercube, the first building of the Skolkovo innovation hub, may or may not have been inspired by Andrzej Sekuła’s thriller of the same name, but the two share some characteristics in the deliberately ascetic look and sheer concentration of innovation.

Hypercube is the flagship project of the Skolkovo Innocity. It follows the 4E concept — economical operation, ecol-

into gas. The front of the building is also functional. A stainless mesh front turns the building into a giant screen.

“Hypercube is the first Innocity build-ing. It stands all alone and it is the nat-ural environment that called for all the solutions to ensure its autonomous op-eration,” says Anton Yakovenko, gen-eral director of the Skolkovo adminis-tration. “We aimed to keep it ascetic, both inside and outside. It is split into clear sections; we decided against fancy finishing. The interiors of Hypercube will soon be made accessible, as we have developed a computer game, where the character walks through all the floors of the building.”

There are seven floors that include cafes, offices and a vast conference hall.

“Hypercube will be of major impor-tance to its tenants and their promo-tion, as it will essentially be one giant showroom,” says Maxim Kiselev, Tech-nopark’s development director. “Hyper-cube ... should become a model for building up the Skolkovo ecosystem. It is Hypercube that will welcome top-lev-el delegations and individual visitors ... an important factor for the residents, as they will be able to meet potential investors.”

The building will be officially unveiled late this month and some tenants shared their impressions of the new workplace. Andrei Potapov, head of OOO Sputniks, says the technology potential of Hyper-cube is very high and the area open to transformation offers lots of freedom for rearranging space.

“At the same time, the first Innocity building has lots of hidden reserves

and surprises,” Potapov says.

Putin reaches new heights

ADVENTURE OF THE MONTH BUILDING OF THE MONTH

Russian President Vladimir Putin took his love of wildlife to new heights this month by flying with cranes - to lead them on a migration route.

Putin made three brief flights over

Paleontologists say they have found “liv-ing” mammoth cells in remains discov-ered in the Far East that could be used to clone the ancient mammal.

A hundred metres under the perma-frost in the Ust-Yansky district of Rus-sia’s Sakha region, an international ex-pedition found soft tissue, fatty tissue, fur and bone marrow of mammoths. Head of the Korean Sooam Biotech fund Huang Vu-souk said the “living” cells could be used for cloning. An uniden-tified member of the expedition team said findings from the expedition would be published in authoritative scientific journals.

the arctic Yamal Peninsula as part of the “Flight of Hope” project to boost the Siberian crane population.

The flights were supposed to show the birds, which were raised in captiv-

ity, the route to special winter grounds in southern Uzbekistan. Poaching in Af-ghanistan and Pakistan has made the trip to their traditional winter grounds in India too hazardous.

DISCOVERY OF THE MONTH

Mammoth step forwardNUMBERS GAME

US$11 BILLIONWas the debt owed to Russia by North Korea before the end of this month. However, the two countries settled the issue. The settlement involves conver-sion of the debt into dollars and a dis-count of about 90 per cent. The remain-ing debt of over US$1 billion would be used in a “debt-for-aid exchange” plan to assist with joint education, health and energy projects in North Korea. The two countries had been negotiating for the last four years without result.

Hypercube follows the 4E concept – economical operation, ecology, ergonomics and energy efficiencyogy, ergonomics and energy efficiency.

The main feature of the building is its virtual autonomy. The only external con-nection is the power line. There are solar cell batteries on one wall that can light up a couple of floors. Ground energy provides heating. Water is pumped from an artesian well and waste water is treat-ed and then used to irrigate landscaped areas. Huge windows allow for the use of natural light, while heat convectors create an air curtain that keeps the tem-perature stable. Light conductors let sun into interior rooms and waste is recycled and turned

President Vladimir Putin, in a motorised deltaplane, prepares to guide young cranes on a winter migra-tion route.

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ONLY AT RBTH.ASIA

Central Asia and a new ‘great game’

BRICS – stuck between the past and future

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BRIEF FACTS

How Russia fared at the Paralympics

Triumph in adversity

Olesya Vladykina

Jessica Long Natalya Gudkova

As a c h i l d , O l e s ya V l a -dykina was afraid of water, so her par-ents sent her to

swimming school. She showed extraordinary ability. At 20, while travelling in Thailand, her bus crashed at 120km/h.

“I pulled myself free and saw that my left hand was missing,” Vladykina says. She thought that was the end of her swimming ca-reer.

Then she had a call from her

Jessica Long’s story could not have been told without the many people who went out of their way to help.

It all began in Irkutsk in Siberia. Her mother Natalya was 16 when she gave birth to a girl with fibular hemimelia, a condition that left her without most of her lower legs and feet.

Natalya put her in a good care home. A teacher at the home, Aunt Olya,

couldn’t do much, but was happy when Steven Long arrived from Baltimore in the United States and started cuddling the 18-month-old girl. She thought: “This American will help cure her.”

Steven had two children and wanted a third, but his wife could not get preg-nant. They decided to adopt. They brought the little girl home and named

Natalya Gudkova smashed a world record in the javelin for one-armed ath-letes at the London Paralympics, only for Poland’s Katarzyna Piekart to beat her effort by 7cm. Gudkova, who was born without her right arm, is still happy. She now has a new goal.

“You know, life is so wonderful,” she says. “When I won my first Olympic sil-ver, I used the prize money to buy a sheepskin coat ... and some winter boots. But I was happy all the same.” That was back in 1996, in Atlanta.

Prizes for Paralympic Games win-ners have been elevated to match those enjoyed by Olympic champions.

“As a child, I went to a normal school, even though I didn’t have one of my hands,” Gudkova says. “The other kids

her Jessica. She underwent surgery and learned to walk on artificial legs. Steven then took her swimming. He wanted her to feel free.

The coach at the swimming pool told Steven: “You have a talented girl. She has no legs, but she is faster than trained adult men with legs.”

Steven started reading about Para-lympic sports and found a coach.

Jessica first took part in the Paralym-pic Games in Athens in 2004 at 12. She won three golds. She claimed four golds in Beijing and then went one better in London.

Jessica wants to go to Russia and find her mother. She also wants to win some more titles and work as a model before marrying and having children.

made fun of me. Now people treat me differently. People have changed.”

She did not realise that she did not have a hand until she was five. “I ran around and played with my friends, and they did not notice. I had no intention of wearing prosthetics.

“My grandma used to lament: ‘How are you going to peel potatoes, how are you going to bring up your son’?” Her son is six years old.

Asked about competing again, she says: “I wasn’t planning on it. I had a dream of retiring after winning gold and setting a world record in London. I set the record all right. But that girl threw the javelin 7cm farther than I did. I was not angry. Actually, I was happy for her. I suppose I’ll have to go to Rio now.”

SPORT

people and it is public consciousness that is handicapped,” she says. On Sep-tember 1, Vladykina set a world record in the 100m breaststroke on her way to a gold medal in London.

When her mother took her child to the pool in Moscow, she only dreamed of the Olympics. Fourteen years later, her only hope was that she would sur-vive. Six months after that, she watched her climb on to the podium and, four years later, saw her win three medals.

first coach, Sergei Zhilkin. When Vladykina checked out of hospital, the 2008 Beijing Olympics were about five months away. In that time, she learned to swim all over again.

She says: “The hardest part was to get used to the new cen-tre of balance. My coach did not give up on me. If I did something wrong, he would jump into the pool himself and do what I did.”

Vladykina took the Paralym-pic Committee by storm and was included in the team at the eleventh hour. During the Beijing Olympics, she set a Paralympic record.

“We are absolutely healthy

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Determined people are often able to overcome their fears and whatever setbacks they face, writes Viktor Petrov

RUSSIA AND GREATER CHINA4 Tuesday, September 25, 2012

Moscow’s eastern visionPresident Hu Jintao (right) greets Russian President Vladimir Putin during the Apec summit. It was a significant event for Russia, which is keen on establishing trade links with Asia.

APEC

Vladivostok summit proves to be an unexpected triumph for country, writes Dmitry Butrin

No one knows for sure wheth-er Russian authorities were expecting the success they achieved at this month’s Apec summit.

Six months ago, the Asia-Pacific Eco-nomic Co-operation forum was viewed as a “soft alternative” to the World Trade Organisation (WTO) and European Union (EU). Stronger economic con-tacts with Japan and the possibility of China backing Russia’s financial and political initiatives were not even on the agenda. As it turns out, however, no one is going to prevent Russia from “turn-ing towards the East”.

Those responsible for drawing up the agenda for the 20th Apec Business Sum-mit, from September 7 to 9, had no idea that the meetings in Vladivostok would be truly significant.

Australia spurred the creation of Apec in 1989 as an informal club of Pacific Rim countries interested in establish-ing a regional free trade zone. Russia, which joined in 1998, had planned the Vladivostok summit as a foreign policy event. In many respects, the idea con-tradicts the essence of this bloc that re-

fers to itself in official documents as an alliance of “economies” rather than “countries” or “states”.

Several developments have changed the nature of the Apec summit.

The first is the global financial crisis that has shown no signs of ending this year.

The second is Russia joining the WTO this year, as Apec is seen as a “Pacific-Rim club” within the WTO.

A third reason is that the debt crisis in Europe has piqued the interest of China and other Southeast Asian econ-omies in multicurrency world trade as an alternative to the euro and the dollar.

Finally, the dramatic changes that oc-curred in the natural gas market from 2010 to 2012, and the growing uncer-tainty of Russia’s position in that mar-ket, also made the summit in Vladiv-ostok more exciting as the event drew closer, making it a meeting of Apec heads of state addressing economic is-sues.

The Apec summit communiqué pub-lished on September 9 makes it clear that Apec has worked primarily as an economic association.

The key achievement of the summit is the agreement of Apec economies to refrain from increasing protective im-port duties and cut tariffs on 54 envi-ronmental commodities from 25 to 30 per cent to 5 per cent within three years. These include power engineering equip-ment and green technologies.

Another result that will benefit Rus-sia is that the Trans-Pacific Partnership (TPP) project initiated by the United States in 2009 was all but forgotten. The initiative envisions a free trade agree-ment for nine developed Apec econo-mies, but neither Russia nor China were invited. At the previous Apec summit in Honolulu, President Hu Jintao voiced his support in principle for the TPP, but nothing more was said in Vladivostok.

The Apec 2012 summit did not re-veal any obvious contradictions between Russia and China, although the bilat-eral meeting between President Vladimir Putin and Hu had no tangible results.

Despite tense political relations be-tween Russia and Japan caused by the disputed Kuril Islands spat, Japan’s achievements at the summit proved im-

pressive. Japan showed its readiness to become involved in a project to export liquefied natural gas from the Vladiv-ostok LNG company. An agreement was reached between ICT Group and Mit-sui and several smaller contracts were signed. Russian-Japanese negotiations during the summit were not heavily pro-moted, but following the talks, Putin said he discussed some of the key prob-lems in the relationship between the two countries with Japanese Prime Min-ister Yoshihiko Noda, and announced that Noda would visit Russia; this alone could be considered a success from the talks in Vladivostok.

Gazprom CEO Alexey Miller com-mented on the positive atmosphere at the talks, declaring somewhat over-en-thusiastically that Gazprom’s supplies of natural gas to the Asia-Pacific region “will exceed those to Europe in the next few years”. At the concluding press con-ference, Putin accused the EU of de-manding that Russia continue “subsi-dising” Eastern Europe by supplying cheaper gas. This criticism illustrated Russia’s willingness to focus on relation-ships with Asia to drive future growth.

Putin accused the EU of demanding that Russia continue ‘subsidising’ Eastern Europe by supplying cheaper gas

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‘We needed an investment gateway in the Far East’ Alexander Gabuev Vlast magazine

Mark Zavadskiy

Alexander Gabuev Vlast magazine

Igor Shuvalov, First Deputy Prime Minister of Russia.

Russia is boosting its exports of oil and gas to Asia after years of fo-cusing almost entirely on Europe.

First Deputy Prime Minister Igor Shu-valov, who supervised preparations for the Apec Summit in Vladivostok, reveals what Russia hopes to gain through the US$21 billion event.

What role can Russia play in Asia? Can we be anything other than a provider of raw materials?

In actual fact, we are anything but a pro-vider of raw materials. We are already building nuclear plants in some coun-tries in the region and selling hi-tech weaponry. In addition to this, we are taking part in student exchanges and scientific development projects with many states. Our other strength is elec-trical equipment, which also involves advanced technology. I think we will be able to export cars from plants under construction in the Primorye Territory. Nevertheless, as long as humankind needs mineral resources, which are so plentiful in our land, we will supply them.

But Russia has not even been able to become a normal supplier of resourc-es to Asia. Russia’s share in regional trade is 1 per cent. And plans, such as Gazprom’s, to supply gas to the Chi-nese market so far exist only on paper.

We do not expect any problems with oil and gas. Even if some projects are not commissioned on schedule, they will be launched eventually. For exam-ple, a gas pipeline has been built from Sakhalin to Vladivostok. It is not yet fully operational so, when it is, the surplus will certainly be exported to Asia via pipelines or in the shape of liquefied natural gas. We are already supplying oil to China.

A “lack of vision” is costing Russia dear-ly in the energy and minerals sector. The country controls 70 per cent of its min-eral resources, especially east of the Urals, and Asian markets are nearby. Yet Russia’s share in trade turnover to Asia-Pacific Economic Co-operation (Apec) economies is about 1 per cent.

“There are several reasons why Rus-sia does not use its enormous potential in the region to the full extent,” says the managing partner of Hong Kong Eura-sia Capital Partners, Sergey Man.

“The key players lack an integrated vision of the whole region, especially state-owned companies. Secondly, it is the lack of transport infrastructure. The third factor is the lack of infrastructure to attract foreign direct investment from the east and Southeast Asia.”

In 2007 Russia signed up to host the Apec summit in Vladivostok. Did it do so in order to develop the infrastruc-ture of the Russian Far East?

Exactly. In order to strengthen Russia’s geopolitical role within Apec, we had to transform the region through feder-al investments. The event provided budget financing the region would oth-erwise have never received. On the one hand, we wanted to change people’s lives in the Primorye Territory by cre-ating a new infrastructure for business, education, and everything that we are doing today. On the other hand, we wanted to show the world that we are working seriously in the region. To us, the Apec summit project is not just about ‘spending money’. We needed an investment gateway in the Far East. Conducting business with Asia through Moscow alone has huge limitations, both in terms of time and energy. But Vladivostok is an hour or so from Tokyo

and Seoul by plane, and it is slightly fur-ther from Beijing, Hong Kong and Hanoi. This provides an entirely differ-ent potential for our economy.

What mechanism for supporting in-vestments in the Far East is prefera-ble? Some suggest a special state cor-poration and others a fund under the auspices of the Bank for Development and Foreign Economic Affairs (VEB). We also have a ministry for the devel-opment of the Far East.

I think that a subsidiary of VEB would be best for financing development pro-jects. The most important industrial fa-cilities should be put under the Bank for Development and Foreign Econom-ic Affairs. There are at most five pro-jects. These should be large enterpris-es that cannot get by simply on commercial loans and which require cheap, long-term resources. We also need energy facilities, for example, hy-droelectric stations. This is all long-term money. And one must know whether RusHydro will build it independently, or if it needs support through a devel-opment institution. Another area is con-structing railways to oil and gas fields.

Is the state ready to allow foreign capi-tal, foreign labour and technologies to come to our Far East?

It is a must. We need to attract Asian and American investors. From the eco-nomic point of view, co-operating with the United States is much more natu-ral in the East where we are neighbours. In that sense the Apec format opens up great opportunities. We can increase exports and attract foreign investment. But interpenetration should be mutu-al. Russian investors must have favour-able conditions in Asia, similar to those we are ready to provide here.

The key achievement of the summit is the agreement of Apec economies to refrain from increasing protective duties and cut tariffs

Country fails to exploit resources Russia and China may appear to be

ideal partners in the energy sector. Be-ijing is trying to reduce its dependence on oil from the Middle East and Africa (90 per cent of imports), and Russia is eager to diversify its hydrocarbon ex-ports from European markets, which account for over 80 per cent. Beijing also wants to get oil and gas through land pipelines that are out of reach of the United States navy.

After 15 years of negotiations on an oil pipeline, an agreement was reached only in 2009. Russia’s Rosneft and Transneft took out a loan of US$25 bil-lion from Beijing and began to build a pipeline.

However, in 2010, with construction under way, the Chinese began to un-derpay for Russian oil, blaming unrea-sonably high Russian transport tariffs. Moscow threatened Beijing with court action. However, according to Michael

Krutikhin from RusEnergy, Russia didn’t have a firm case against the Chinese. As part of the agreement, if there was a breach of contract, Rosneft and Transneft would have to return the US$25 billion loan. In the end, Russia was forced to agree to sell oil to China, with a discount of US$1.5 per barrel.

A lack of transport infrastructure in the Russian Far East is also a problem for coal, metals and grain exporters.

Attracting Asian capital to infrastruc-ture projects may solve the problem. But “attracting direct investments from Asia is in its early stages”, Man says. Not long ago, Moscow tried to solve this problem with the Russian Direct Invest-ment Fund (RFPI). Last year, RFPI and China Capital Investment Corporation agreed to create a fund of up to US$4 billion for investments in projects in Russia, but for the past few months there have not been any investments.

Food and water the talk of CEO Forum

Food and water were at the heart of dis-cussions by businessmen and officials on the first day of the CEO Forum at the Apec Summit in Vladivostok.

“A few years ago, people thought that water, earth, and air were unlimited commodities. That’s not the case. On earth, only 2.5 per cent of the total amount of water is drinkable,” said Chil-ean President Sebastian Pinera.

This is an area in which Russia, with its vast water resources, stands to ben-efit, and the idea of a “water stock ex-change” may become a reality.

The same can be said for food, and Russia again could hold the key. The question of how Russia is going to com-bat global food shortages was put to President Vladimir Putin. “In Soviet times, a much larger territory was farmed than now, but the country back then was a net importer of grain,” he said. “It was even the case that our ports could only receive grain, not ship it.” Russia now exports grain, has stopped almost all imports of poultry, and is ac-tively engaged in pig breeding.

Scott Price, president of Walmart Asia, pointed out that more than one-third of all food is lost between shipment by producers and delivery to the end con-sumer. Russian transport companies do not know the exact figures, but admit that perishable goods suffer enormous-ly due to drawn-out customs clearance procedures and cargo handling at the country’s ports.

Putin stressed the importance of the development of rail transport for Rus-sia’s transformation into a fully-fledged transit state. “More is transported by rail today in Russia than at any moment in the Soviet Union,” he said, acknowledg-ing that capacity was still woefully short.

Ziyavudin Magomedov, chairman of the Apec Business Advisory Council and head of the board of directors of the Summa Group, said: “Every percentage point of trade between Europe and Asia that passes through Russia” will earn the country about US$1 billion.

According to Russian business, Eu-rope holds the best prospects for trans-port infrastructure projects in the re-gion. It will require investments in land transport in western China and transit routes via the Trans-Siberian Railway and the North Sea. Co-ordinated action from Russia, China and other Apec member economies is essential.

Andrei Kostin, head of VTB Bank and chairman of the Apec Business Sum-mit, said turmoil in the global econo-my had undermined the world’s tradi-tional reserve currencies.

“As one of the most active participants in world trade, China has a right to pro-mote the yuan as a global reserve cur-rency,” he said. “In my opinion, the rou-ble will evolve into a regional reserve currency in the Commonwealth of In-dependent States and, in time, across the Asia-Pacific.”

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RUSSIA AND GREATER CHINA6 Tuesday, September 25, 2012

Boost for exportersJoining WTO will benefit metals and chemicals sectors, writes Julia Sinaeva

Russia’s Economic Development Minister Elvira Nabiullina and WTO Direc-tor General Pascal Lamy signed Russia’s accession to the WTO.

Accession-related cuts in import duties

TRADE

Russia has finally closed the book on its campaign to join the World Trade Organisation (WTO), becoming a full mem-ber after 18 years of talks.

The accession treaty was ratified de-spite late protests from some state Duma deputies and businessmen.

Now that it is a full member of the organisation, Russia is entitled to play its part in formulating the rules for glob-al commerce. Bidding farewell to its inconspicuous status as observer, the country will now enjoy lower customs duties, from which Russian exporters of metals and chemicals will be the first to benefit.

“In recent years, Russian exports have not only failed to diversify, but actually deteriorated. We haven’t ap-proved a single strategy for promoting exports,” says Natalia Volchkova, a pro-fessor at the Russian School of Eco-nomics. “The WTO accession is the first significant measure to promote Russian exports.”

The country’s accession to the WTO will also force Russian market players to adapt their conduct to the global marketplace.

“The expected stabilisation of trade policy will make Russia more appeal-ing to foreign investors,” Volchkova says.

Troika Dialog analysts believe the consumer services sector will also ben-efit from Russia’s accession. Import du-ties for the sector are projected to drop to an average of 10.3 per cent from the current 13.3 per cent. Furthermore, im-port restraints will be reduced, includ-ing those on foodstuffs, but it will be a while before other sectors such as finance and telecoms see benefits.

According to a World Bank study, accession to the WTO could result in higher wages for low-paid and profes-sional workers, as new foreign com-panies begin to open offices in Russia and recruit staff.

On the downside, the national budg-et will have to bear the brunt of losses in import duties. Andrei Belousov, the Minister for Economic Development,

The long-term attractiveness of Russia as an investment destination remains positive, according to Ernst & Young’s (E&Y) second Russia Attractiveness Sur-vey, published this month.

Natural resources, a growing domes-tic consumer market, a strong labour force and joining the World Trade Or-ganisation all combine to make Rus-sian an investment destination of choice over the next decade.

Although concerns remain around bureaucracy and infrastructure, most investors believe Russia has made con-siderable progress towards closing the gap on other rapid-growth markets. The country’s attractiveness has grown 8 per cent from last year, the largest increase of any region.

E&Y’s European Investment Moni-tor suggests the number of projects has increased more than 50 per cent in the past decade – 83 foreign direct invest-ment (FDI) projects were recorded in 2002 and 128 this year. Russia also re-mains among the top 10 investment destinations in Europe, coming in sev-enth place, and is the premier destina-tion in central and eastern Europe.

Investors present in Russia demon-strate their confidence in the market. Nearly 80 per cent plan to increase or maintain operations. However, there is a wide gap in plans between the com-panies that already have operations in Russia and those not yet established.

About 70 per cent of companies not established have no plans to invest in the next year. This is, however, 16 per-centage points lower than last year, sig-nalling improved perceptions.

“Russia has proved to be resilient, ex-periencing growth in 2011 and 2012,” says Alexander Ivlev, E&Y’s managing partner in Russia. “A boost in consump-tion, a strong labour market and an in-crease in investments have been prime drivers of this growth. Russia is facing the challenges of increasing global com-petition.”

Full report at www.rbth.asia

Country’s long-term appeal for investment grows

SURVEY

BUSINESS CALENDAR

FIND MORE IN THE GLOBAL CALENDAR

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has said that the federal budget would lose an estimated 188 billion roubles (US$5.9 billion) next year from acces-sion-related cuts to import duties. In 2014, the losses might increase to 257 billion roubles.

Nevertheless, Belousov said actual losses would be lower as trade volumes and the tax base grow.

The reduced tariff protection is seen as the “entrance fee” and, in any case, import duties will be reduced gradu-ally, enabling manufacturing compa-nies and farmers to adapt. The aver-age tariff is 9.5 per cent at present, but it will be cut to 7.4 per cent next year, 6.9 per cent in 2014, and around 6 per cent in 2015 – by which time it will have been cut by 3.5 per cent.

The financial pessimism is partially offset by World Bank forecasts, which suggest accession could help Russia increase its gross domestic product by an additional 3.3 per cent (US$65.2 bil-lion) within three years and 11 per cent (US$216.3 billion) within 11 years.

Russian specialists are less optimis-tic. Russian School of Economics ex-perts project that membership in the WTO will only provide additional GDP growth of 0.5 per cent annually.

Still, Russia has managed to ensure some positive terms for access by for-eign banks, and the issue of gas has also been resolved favourably, with the

retention of a 30 per cent duty. Rus-sia has also successfully negotiated transition periods, with long acclima-tisation times for the automotive in-dustry, agriculture, and the insurance sector. Transition periods are from two to three years, but they may be stretched to five or seven in especial-ly sensitive sectors.

The expected stabilisation of policy will make [the nation] more appealing to foreign investors

THE SECOND ASIAN-PACIFICFORUMOCTOBER 12-13, 2012,MOSCOW, RUSSIARussian International Affairs Council and Russian Apec Study Center, in co-operation with the Ministry of Foreign Affairs and Ministry for Economic Development of Russia, will hold the 2nd Asian-Pacific forum. The forum is to set clear priorities for Russia after its Apec presidency in 2012 and formulate key issues for developing Russia’s relations with the Asia-Pacific region. WWW.RUSSIANCOUNCIL.RU/EN/U

INTERNATIONAL ECONOMIC FORUMNOVEMBER 3-9, 2012,SEOUL, SOUTH KOREAThe International Economic Forum convenes representatives from busi-ness, the public, and political and scientific communities to analyse Russia and South Korea’s experience in innovative development. Partici-pants will also provide recommen-dations after discussions focused on economic and technical upgrades, energy and resource efficiency, in-tellectual property, and Russia and South Korea’s investment appeal. WWW.CONF.RBC.RU/EN

AIRSHOW CHINA 2012

NOVEMBER 13-18, 2012,ZHUHAI, GUANGDONG, CHINAChina International Aviation & Aer-ospace Exhibition (namely Airshow China) is the only international aer-ospace trade show in China that is endorsed by the central govern-ment. It features the display of real-size products, trade talks, technological exchange and flying displays. Since 1996, the show has been suc-cessfully held in Zhuhai every oth-er year. WWW.AIRSHOW.COM.CN/EN

ASIAN FINANCIAL FORUM

JANUARY 14-15, 2013,HONG KONGThe Asian Financial Forum (AFF) brings together the most influen-tial members of the global financial and business communities to discuss developments and trends in Asian markets. It has become an event the world looks to for exploring business opportunities in China and the rest of Asia. During the AFF Deal Flow event, one-on-one meetings are ar-ranged between sources of funds and sources of deals. WWW.ASIANFINANCIALFORUM.COM

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RUSSIA AND GREATER CHINATuesday, September 25, 2012

Oil giants tap Asian demand

Rosneft’s plant in Nakhodka is the firm’s second project aimed at China.

Russia and Indonesia have agreed to produce copper.

Rosneft to build Far East petrochemical plant for polymer exports to regional neighbours, writes Aleksandr Kilyakov

Rosneft, Russia’s largest oil com-pany, is planning to build a petrochemical complex in the Far East that will primarily ex-port to China.

The project was originally drawn up before the global financial crisis, but was suspended in 2009. Rosneft has now announced plans to resume it and pro-duction is scheduled to start in early 2017, with investment estimated at US$5.4 billion and a production capac-ity of 3.4 million tonnes per year.

Once the plant is in operation, Ros-neft expects to occupy 15 per cent of the Chinese polymer market with poly-propylenes, high- and low-density pol-yethylenes, and monoethylene glycol manufactured at the new facility. Yet only 80 per cent of the plant’s output will be exported, with the remainder expected to cover the demand of the Russian Far East.

Rosneft president Igor Sechin and Primorye Territory Governor Vladimir Miklushevsky have signed an agreement under which the oil company is required to ensure uninterrupted supply of pet-rochemical products to the region, in-cluding polymers. The construction of a petrochemical complex forms part of

PROJECTS

Norilsk closes in on Indonesian copper dealAleksandr Kilyakov

Norilsk Nickel, the world’s largest pro-ducer of nickel and palladium, could soon be producing copper in Indone-sia for export to China.

Norilsk Nickel’s general director, Vlad-imir Strzhalkovsky, and Indonesian President Susilo Bambang Yudhoyono reached a preliminary agreement dur-ing the Asia-Pacific Economic Co-op-eration forum summit in Vladivostok. The resulting letter of intent confirmed Norilsk Nickel’s business interests in In-donesia, while Indonesia’s Ministry of Industry underlined its willingness to favour the investment.

Norilsk had been considering the idea of entering Indonesia for some time, but preferred to keep its plans close to its chest. The idea began to take shape last year when the company decided to start producing copper in Indonesia, which is one of the leading copper pro-ducers in the world.

The project will see the creation of a partnership with Indonesia’s Nusanta-ra Smelting Corporation, which ob-tained a government licence last year for the construction in East Kaliman-tan province of a smelting plant capa-ble of handling 400,000 tonnes of re-fined copper annually.

Norilsk approached Nusantara soon afterwards to gauge the likelihood of forming a strategic partnership. Nus-antara showed a similar level of inter-est.

The copper from the plant will be ex-ported to China, South Korea and other Asia-Pacific countries.

The project’s viability depended on whether Norilsk would have access to raw materials, however. The issue was

each with an output of 200,000 tonnes,” says Roman Panov, Norilsk’s director of the foreign business assets depart-ment.

“But we need to be certain about the raw material stock.”

At the meeting, Yudhoyono said his country was ready to guarantee unin-

terrupted supplies if the Russian com-pany decided to invest in Indonesia’s mining industry. Agreement is yet to be reached on tax benefits. The com-pany asked for VAT cuts on imported equipment, accelerated depreciation and tax “holidays” throughout the pay-back period. Yudhoyono said such mea-sures were not unlikely for major in-vestment activities, but did not make any firm commitments. Indonesia’s in-

terest stems from one of its strategic goals to diversify the economic use of its natural resources.

“It will be yet another step in imple-menting the Mining Law, which stipu-lates more comprehensive efforts with regard to raw materials,” says industry minister Mohamad Suleman Hidayat. The signed letter of intent paves the way for Norilsk and Nusantra to further their discussions.

Investcafe analyst Andrei Shenk be-lieves the Russian company has a stra-tegic business interest in Indonesia.

“Global market development is quite beneficial for Norilsk Nickel in the long run, given that the company has faced a number of problems with purchasing new deposits recently,” Shenk says.

“Most likely, its investors will wel-come the news.” Norislk has other in-terests in Indonesia. It is looking into the possibility of exploring the coun-try’s coal deposits, and participating in the East Kalimantan project with Rus-sian Railways. These projects are inter-related.

As Norilsk had previously stated, a railway would allow it to link the de-posit with key industrial centres in In-donesia. The East Kalimantan project is expected to start next year and cost US$2.5 billion.

the commitments in the agreement. The idea of a petrochemical plant in the Pri-morye Territory dates back to 2007, when the decision to build the facility was first made. But the project did not get rolling until last year.

It is still unclear whether any Chinese partners will be involved in the con-struction of the plant in Nakhodka.

“As it stands, Rosneft can do without any partners in this project,” says Alek-sandr Nazarov, an analyst at Gazprom-bank. “The required investment in the petrochemical complex is below the company’s current capital expenditure.”

This is the second major Rosneft pro-ject aimed at the Chinese market.

In 2010, the company launched the construction of an oil refinery in China with China National Petroleum Corpo-ration (CNPC) as a partner.

At the Asia-Pacific Economic Co-op-eration summit in Vladivostok, China

neft and Transneft secured a US$25 bil-lion credit facility from China in return for guaranteed oil deliveries of 15 mil-lion tonnes per year for 20 years.

In 2010, the two corporations signed the agreement to build an oil refinery in Tianjin through their Vostok Petro-chemicals joint venture – 49 per cent of which is owned by Rosneft, and 51 per cent by CNPC.

settled in Vladivostok, where taxation was also discussed.

Norilsk had pointed out that uncer-tainty over provisions of raw materials was the only stumbling block, prevent-ing the company from making a com-mitment on going ahead with the In-donesian project.

“We are considering the possibility of building a copper plant and study-ing the option of launching two lines,

promised unprecedented privileges for its Russian partner in the project. It even pledged to give Rosneft the green light to export the output – something no for-eign company has ever been allowed to do. Rosneft and CNPC agreed to cre-ate a joint venture to build a refinery in China in 2006. Although the project has been delayed, dialogue resumed after Russian state-owned companies Ros-

The copper from the plant will be exported to China, South Korea and other Asia-Pacific countries

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RUSSIA AND GREATER CHINA8 Tuesday, September 25, 2012

Legal battle in London takes lid off oligarch riftHigh Court case reveals a culture

of patronage and bitter rivalry between the nation’s tycoons, writes Anastasia Gorshkova

TRIAL

RomanAbramovich Boris

Berezovsky Roman Abramovich, 46, is the bil-lionaire owner of investment com-pany Millhouse LLC. Orphaned as a child, he dropped out of college and became a toy importer. He succeed-ed in this line of work, enabling him to establish an oil business in Omsk.

He made a name for himself and joined the board of Sibneft, eventu-ally taking charge and completing a merger that made it the fourth-biggest oil company in the world. Gazprom bought Sibneft in 2005.

From 2000 to 2008, Abramovich was the governor of the distant far eastern region of Chukotka.

He owns a country estate in Sus-sex and Premiership side Chelsea Football Club.

Boris Berezovsky, 65, is a former Kremlin power broker and self-exiled tycoon.

He is the former owner of ORT Television Holdings and one of the men credited with helping President Vladimir Putin rise to power in the late 1990s, before falling out with him a few years later.

He is now a staunch Putin critic. He lives in Britain, which has granted him political asylum. He has been ac-cused of money laundering and em-bezzlement.

There are at least 11 criminal cases against him in Russia and six arrest warrants in Russia and Brazil. Ber-ezovsky is married to his third wife and has five children.

A commercial dispute between two famous tycoons in a Brit-ish court has opened a rare window into the dealings of Russia’s mega-wealthy busi-

nessmen.Former Russian oligarch Boris Ber-

ezovsky said that he was “amazed” and “shocked” by London’s High Court de-cision on August 31 to dismiss a suit he filed against tycoon Roman Abram-ovich for US$5.6 billion.

In a case that the British press called the commercial “trial of the century”, Berezovsky sought compensation from his erstwhile business partner, saying he had been forced to sell his stakes in oil producer and refiner Sibneft and Rusal, the world’s largest aluminium producer, owned by Oleg Deripaska.

Lawyers believe that the outcome of the case was influenced by Berezovs-ky’s enigmatic reputation.

“Berezovsky has in the past specu-lated on the geopolitical situation, in-sisting that [Russia’s President Vladimir] Putin’s regime hounded him out of Rus-sia, and forced him to sell up,” said Grig-ory Chernyshev, a partner at the law firm White & Case.

Putin’s spokesman, Dmitry Peskov, was reportedly delighted at the ruling.

“It is always a pleasure when slander is called by its true name,” Reuters quot-ed him as saying.

Abramovich, 45, is well-known in Hong Kong, not only through his own-ership of Premier League soccer club Chelsea, but for wealth estimated at US$12 billion, according to Forbes. Rusal was also the first Russian company to issue shares in Hong Kong, in 2010.

Abramovich was ultimately seen as the more credible witness by the court, which in turn found Berezovsky’s tes-

timony to be “contradictory and not credible”. Berezovsky argued that he had been Abramovich’s business part-ner and that he and the late Badri Pa-tarkatsishvili had owned approximate-ly 43 per cent of Sibneft and 25 per cent of Rusal.

Berezovsky claimed Abramovich pressured and “intimidated” him into selling, and took advantage of Berezovs-ky’s worsening relationship with new-ly-elected Putin.

Justice Elizabeth Gloster took 40 min-utes to summarise the court’s ruling. She noted that the four agreements on which Berezovsky’s case hinged had been made many years earlier, which undermined the quality of the evidence.

of complex cross-examination. She said Abramovich was a “truthful and, on the whole, reliable witness”. The court con-cluded that there had been no oral agreement between the plaintiff and the defendant on the division of shares and income from their joint business ven-tures.

The trial introduced the public to the idea of krysha, which literally translates into “roof”, but is used to describe a type of protection or patronage.

The court agreed with Abramovich that all payments to Berezovsky had been made in exchange for his support and krysha, and that the US$1.3 billion that Abramovich ultimately paid was not the sale price of Berezovsky’s shares. The judge also believed that the alleged intimidation suffered by the plaintiff at the hands of Abramovich was ultimate-ly unproven. “Amazed” and “shocked” by the court’s ruling, Berezovsky is now discussing his next move with his law-yers, who could appeal.

Abramovich’s company, Millhouse Capital, issued a statement on his be-half, saying the case should have been heard in Russia, but adding that “Abra-movich has always had great faith in the fairness of the British judicial sys-tem”.

Another case involving two Russian oligarchs is due to start in the London High Court at the end of this month. Mikhail Chernoy is seeking recognition of his right to a 13.2 per cent stake in Rusal.

A spokesman for Deripaska said that the company welcomed the High Court’s decision to recognise the con-cept of krysha, and its intrusion into business affairs. “It is an important de-cision, because it highlights the unten-able foundation of Mr Chernoy’s claims,”

said Deripaska’s spokesman. A Cher-noy representative reported that his cli-ent was preparing for the start of pro-ceedings with the firm belief that the Berezovsky-Abramovich ruling would not affect the outcome of his case, Kom-mersant Daily reported.

[Berezovsky] regarded truth as a transitory, flexible concept, which could be moulded to suit his current purposes JUSTICE ELIZABETH GLOSTER, LONDON HIGH COURT Abramovich has

always had great faith in the fairness of the British judicial system MILLHOUSE CAPITAL’S POST-TRIAL STATEMENT

Gloster said “the case was one where, in the ultimate analysis, the court had to decide whether to believe Berezovs-ky or Abramovich”.

Gloster described Berezovsky as “an unimpressive and inherently unrelia-ble witness, who regarded truth as a transitory, flexible concept, which could be moulded to suit his current purpos-es”. By comparison, she described Abra-movich’s testimony as cautious, precise, and thoughtful, despite the obvious dif-ficulties of having to follow the thread

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RUSSIA AND GREATER CHINATuesday, September 25, 2012

‘Libel tourists’ take advantage of English laws

Russians appear to be keen on filing defamation cases in English courts.

Alexey Kovalev Snob magazine

These days, London’s courts are con-stantly hearing cases brought by Rus-sians – and frequently on the flimsiest of pretexts.

It’s not that English courts are some-how scrupulously fairer – although they appear to be freer from government meddling than courts in Russia. The ra-tionale of filing civil cases instead stems from the English legal system, especial-ly when it comes to libel, where the bur-den of proof rests with the defence.

Under English Common Law, there are a number of defences in a libel case, such as public interest; absolute privi-lege, such as testimony heard during a court case; the truth; and statements made in good faith, among others.

I n t h e U n i t e d States, by contrast, freedom of speech is protected by the First Amendment of the Constitution. Defamation law in the US is not heav-ily in favour of the plaintiff as it is in Britain. In addi-tion, the defini-tion of libel differs in different s t a t e s , a n d under federal law.

The result is that London has become the world’s capital of “libel tourism”. The number of libel cases heard in English courts has risen over the years. In fact, one of the most active of these legal “tourists” is Russian businessman and former government official Boris Ber-ezovsky.

Since 2003, the list of those he’s sued on allegations of links to illegal activi-ties includes Forbes magazine, The Guardian newspaper, the RTR-Planeta television channel and the chairman of Alfa-Bank, Mikhail Fridman.

In another case in 2007, the Ice-landic bank Kaupthing contested a scathing article that had ap-peared in a Danish newspaper, so the bank’s lawyers filed a libel case in a London court.

Several years ago, a Ukrain-ian started proceedings in Britain against another Ukrainian on the basis of mate-rial written purely in Ukrainian, which had been published on a Ukrainian website.

In another case, the High Court in London heard a dispute that had arisen between The New York Times and a Greek busi-nessman resident in Athens.

“Libel tourism” is regarded as a major threat to freedom of speech in Britain. Publi-cations with material on con-tentious issues are obliged to steer clear of the

British marketplace, as the damages in a libel case could outstrip the profits of a publication.

Participation in legal compensation cases is not limited to authors and jour-nalists, but also includes bloggers, mak-ing the situation appear to be absurd. Bloggers can be taken to court, not only

for their own writings, but for the com-ments that readers leave on their site. Civil rights campaigners, such as Free-dom House, have long lobbied for the reform of Britain’s defamation laws. In August 2010, United States President Barack Obama approved legislation under which American courts may re-fuse to enforce British court rulings that countermand the First Amend-ment.

Lawyers who are experienced in def-amation cases are among the most handsomely rewarded in the business community. Their fees for such work can amount to US$1,620 per hour.

Sergei Polonsky is represented by the law firm Carter-Ruck, which the Press Complaints Commission (PCC) has termed “the sworn enemy” of British journalism. Carter-Ruck has gained a reputation for pioneering the use of the draconian measure called the “super-injunction”. This legal instrument is not just a gag law to prevent journalists re-

porting court cases – it further prevents them

from even mention-

i n g t h e y w e r e gagged.

A study by the University of Oxford has

calculated that the costs in-curred in legal cases defending

wounded pride and honour in Britain are about 140 times higher than in other European countries. The high costs allow lawyers to pursue “noble ends”, permitting even those on a modest in-come to protect their rights in court through “no win – no fee” policies.

The plaintiff is only liable to pay law-yers’ fees if the process results in a court victory. This principle results in some law firms adding a mark-up to their fees that run as high as 100 per cent. If the defendant, such as a newspaper or mag-azine, or other media, loses the case, the publisher must pay all of the costs incurred in its hearings.

However, there can be cases in which the court sides with the defendants.

For example, a Ukrainian business-man named Dmytro Firtash took out a case in Britain against the Kyiv Post – an English-language newspaper based in the Ukrainian capital, Kiev.

According to the newspaper, Firtash’s case against it consisted of allegations that its journalists made it appear as if Firtash was “engaging in a massive crim-inal corruption”.

By way of response to the lawsuit, the Kyiv Post blocked all access to its web-site to internet traffic originating from Britain.

After its deliberations, the court re-fused to give Firtash the satisfaction that he had sought from the Kyiv Post.

The court also ruled that the case had “the most tenuous of connections” with Britain, according to the newspaper’s own report. Observers in the London courtroom reported that the judge had termed Firtash’s case against the Kyiv Post “almost an abuse of process”.

London has become the world capital of ‘libel tourism’, and the number of cases heard in English courts has increased over the years

Billionaire to pay the price

Financial experts believe that Bo-ris Berezovsky could soon go bank-rupt.

The dismissal of his case against Roman Abramovich in a London court means the businessman may have to pay several lawyers as much as HK$1 billion in legal fees for both sides, the Vzglyad newspaper re-ports.

The exact amount in legal fees re-mains unclear.

Berezovsky has already started selling off his assets.

In 2009, he sold his Darius yacht for US$345 million and in May he sold his estate in Surrey, which he had ac-quired in 2001 for US$31 million.

But the biggest blow to his wealth may have more to do with his failed love-life than failed court cases. His divorce from his wife Galina last year may have cost the one-time oli-garch between US$150 million and US$350 million.

His fortune has rapidly dwindled. In 2008, he was 29th on the Forbes list of the 100 richest Russians, with wealth estimated at US$1 billion.

In 2009, he failed to make the rich list for the first time since 2004.

Sky News has estimated that Ber-ezovsky’s fortune is several hundred million dollars.

More talk of organised crime and protection money

A new legal battle is under way at the London High Court over the fate of the Rusal aluminium company, with the result expected next year.

Businessman Michael Cherney, who claims to be a former “business part-ner” and friend of Oleg Deripaska, wants 13.2 per cent of UC Rusal, the world’s largest aluminium producer, which is worth more then US$8 billion based on its current share price in Hong Kong. Cherney filed a lawsuit in 2006, but it took several years for the court to ac-cept this case and move towards for-mal hearings.

He resides in Israel, but is wanted in Spain for questioning in relation to a money-laundering investigation, so he can’t leave Israel and will be taking part

in the trial through video conference. Deripaska denies any business co-op-eration with Cherney, though he ad-mits to paying Cherney money for the “protection” of his business. He says that Cherney, along with associates Anton Malevsky and Sergei Popov, forced him to pay protection money - or krysha - after threats were made in the mid-1990s and all the signed pa-pers were a sham. Deripaska’s lawyers have described Cherney as a “criminal who regularly met with organised crime bosses and extorted millions of pounds in protection money”. Rusal’s CEO De-ripaska is the 14th wealthiest man in Russia, according to the Forbes maga-zine 2012 ranking, with US$8.2 billion in assets.

Michael Cherney, 60, is an Uzbek-born, Israeli-based billionaire.

Oleg Deripaska, 44, is CEO of the Basic Element Company.

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RUSSIA AND GREATER CHINA10 Tuesday, September 25, 2012

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Hatred runs much deeper The mass protests by Muslims outside Unit-

ed States missions against the film Inno-cence of Muslims are not over, but the wave

is subsiding. The dry residue is a clearer picture of relations between the Western civilisation, and indeed other civilisations, and the Islamic world.

For the West it is worse than before the Arab unrest. Whether other civilisations have gained anything is a big question.

But what do these protests, which have spread from Libya to Jakarta and European cap-itals, actually mean? This is what the media have been asking.

The film that triggered the protests has noth-ing to do with it. It could have been any other pretext.

It is not the ultra-right Western extremists who make films and burn the Koran that enrage the Islamic world, but what is called imperial-ism. The protests are thought to be inspired by the Wahhabite movement, including al-Qaeda, which was sidelined in the early weeks of the Arab riots, but is regaining the initiative.

It looks as if the hate film has little to do with all this. Hatred is much deeper, putting Islamic extremists in the foreground in many countries.

The situation was best summed up by retired US diplomat David Miller when he said that America could do nothing in the Middle East, but it could not leave either. He recalled that, at the beginning of his term, President Barack

The buzz these days is about president Vladimir Putin’s falling approval ratings.

Yes, his approval ratings last month were down four percentage points, but only down by one point compared with June. A 63 per cent approval rating has registered more than once over the past 12 years. The index has been dubbed “the Putin rating”. It tells us nothing about Putin, of course, but rather about the state of society.

Society, which began to show signs of diversi-ty back in the 1990s, needed a unifying symbol, and Putin has been performing this important function since 2000. This is why his ratings have been essentially different from those of most of the world’s political leaders. And accounts for

Obama tried to establish a new relationship with the Muslim world. He needn’t have both-ered.

Miller, who has spent nearly 20 years as an adviser to US presidents, secretaries of state and national security advisers, lists the reasons why no US president will change the approach to the region: the survival of Israel; the intertwining commercial and other interests between the US and Saudi Arabia and other Gulf oil monar-chies. There is a sense of doom.

The situation raises questions about the Obama administration’s foreign policy, which can be seen as a “turn” from the Middle East to the Far East, that is, to containing China.

China is again at loggerheads with Japan over the Diaoyu Islands, a group of eight uninhabit-ed islands on the southern tip of the Japanese archipelago, that are claimed by mainland

China, Taiwan and Japan, which calls them the Senkaku Islands.

Can Obama do anything on the Arab and Japanese flanks of his foreign policy? Some-thing, but not much.

The US has also received bad news from Af-ghanistan, where four servicemen were killed, not by the Taliban, but by soldiers of the Kabul regime. The reason, apparently, is that a Nato air raid on Afghan territory killed nine women who were gathering firewood in the mountains. That brings the number of Americans killed by President Hamid Karzai’s soldiers to 51.

Afghanistan is where the “old”, mainly Middle Eastern, and “new”, Far Eastern, policies inter-sect. While most US troops will leave in 2014, some will stay. The idea is to make life less com-fortable for China on its western borders. How-ever, the Islamic world has reminded the US that it does not favour such strategies.

The manifestations across the Muslim world

have shown that the US and the West are the losers. Who has gained? China? That remains to be seen, but it has not lost much. Russia? Those who still think that US losses are Russia’s gains can rejoice. However, Russia can, at best, claim a moral victory. It had warned that the Arab riots would bring extremists to the forefront and the warning has come true. The Americans pre-tend they are happy to see “democracy” come to the region, and now they are being mocked by those storming their embassies. In this case, Russia certainly hasn’t lost.

But it is enough to recall the 1980s, when Afghanistan was the only haven for Islamic extremism (Soviet soldiers tried to oppose it), and look at what has become of the Middle East today, to lose any desire to rejoice in America’s woes.

OPINION

Dmitry Kosyerv RIA Novosti

‘Teflon President’ Putin starts to lose touchAlexei Levinson Vedomosti

their extraordinary stability. The ratings of na-tional leaders usually reflect the successes and failures of their respective policies. In Putin’s case, there has been no such connection, which is why the word “Teflon” has been used to de-scribe him.

If we cut through the mystical statements made by the various individuals that this leader has been sent to us from above, then the es-sence of what is being said is that, in the eyes of Russians, the president does not have an earthly function. It is not about politics and economics, as is the case with all other statesmen: Russia needs such a leader for its glory. The country’s problems have nothing to do with it, as this is not his sphere of responsibility.

This has been proven by the answers to two questions that we have been asking since 2001.

One is: “Who takes the main credit for Rus-

sia’s successes?” Out of the five possible re-sponses, respondents picked the answer “Putin” far more often than any other option.

The second question is: “Who bears the main responsibility for the country’s problems?” And gave the same options. Answers varied: some said the government, others Medvedev (when he was president).

But nobody ever chose Putin.If the approval ratings are anything to go by,

then the attitude to Putin has not changed. This is the conclusion that follows from the answer to the first of the two questions.

“Russia’s successes in the international arena, in economics and improving living standards”, are credited to Putin by almost 60 per cent of the country’s citizens. This result has been reg-istered more than once.

But, last month, for the first time ever, a ma-

jority of 51 per cent dared to say that Putin was “responsible for the problems in the country and the rising cost of living”, experts note. The number had never risen higher than 31 per cent. It was 29 per cent a year ago, with 40 per cent of respondents holding the government re-sponsible, but not its head, and 41 per cent of respondents saying that the president at the time was accountable. Last month, three times fewer respondents placed the blame on the prime minister than on the head of state.

This probably shows that times have changed and now at least half of Russia’s citizens per-ceive Putin as an ordinary president who takes the credit for successes, but is also responsible for the country’s continuing problems.

Alexei Levinson is the head of socio-cultural studies at polster Levada Centre

Dmitry Kosyrev is a RIA Novosti political observer

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RUSSIA AND GREATER CHINATuesday, September 25, 2012

October 30How is life in the happiest and saddest cities in Russia.

Military to leap forwardDefence chiefs ramp-up spending to modernise weapons by 2020, writes Vasily Kashin

Russia’s armed forces are replacing their old equipment, and are pressuring local makers to meet their needs.

ARMS

ProcurementHardware Quantity

Borei nuclear submarines 8

Intercontinental ballistic missiles 400

S-400 anti-aircraft missile system 56

Pantsir-S anti-aircraft artillery system 100

S-500 anti-aircraft missile system 10

Tanks, all types 2300

Artillery systems of all types 2000

Mi-28 attack helicopters 200-300

Ka-52 attack helicopters 150

Helicopters, all types 1000

Sukhoi 35S fighter jets 48

Sukhoi T-50 fighter jets 70

Aircraft, all types 600

Warships 51

Exports to China begin to growExperts note a rise in Russian mili-tary exports to China, which was once considered a lost market.

According to Vyacheslav Dzirkaln, deputy director of the Russian Fed-eral Service for Military-Technical Co-operation, last year China made up roughly 15 per cent of all Russian arms exports, slightly less than US$2 billion.

In particular, Russia is known to be increasing exports to China of various types of aircraft engines and Mi-17 medium transport helicopters.

The past two years saw the sign-ing of a series of major contracts for the delivery of AL-31F, AL-31FN and D-30KP aircraft engines, which are used in China’s J-11B, J-10 and H-6K jets, and the future Y-20 long-range transporter.

India purchased 80 per cent of its US$12.7 billion in arms from Russia during 2007-2011, according to the Stockholm International Peace Re-search Institute.

Defence spending in 2011 and since 1988

Russia’s defence industry is no longer fighting to survive through global export chan-nels. Instead, its primary task is to meet the growing de-

mand for new and more efficient weap-ons and equipment at home.

The armed forces are forever in need of better equipment, which causes fre-quent conflict between the military and industry over costs.

Last year, the Defence Ministry alone placed orders worth more than US$17 billion. The department accounts for 83 per cent of all military procurement. The Interior Ministry, the Federal Se-curity Service, and other law enforce-ment and intelligence agencies make up the remainder. Exports, although ris-ing, amounted to US$13 billion.

Last year, the Russian military pur-chased 21 aircraft, 82 helicopters, 30 in-tercontinental ballistic missiles and 8,600 vehicles. Orders continue to be placed for air-defence systems, tanks and tank-modernisation programmes.

This year, government procurement could increase further. The Defence Ministry alone plans to spend US$23.1 billion on weapons and equipment.

Between 2011 and 2020, the minis-try plans to upgrade 70 per cent of its weapons, focusing on modern preci-sion systems. Russia plans to spend about US$718 billion in this endeavour.

By 2020, Russia’s troops are to receive approximately 2,000 new artillery sys-tems, 2,300 tanks, and 17,000 vehicles. About 400 intercontinental ballistic mis-siles will be purchased over the com-ing decade. The sharp increase in pro-curement and military spending in the next few years is the price to be paid for the lack of spending between 1993 and 2007, when defence orders dropped off and the military squeezed everything it could from its Soviet stockpiles. Rus-sia’s army was mostly kitted out in the 1980s and early 1990s, and the hard-ware is fast approaching its expiry date.

“We should carry out the same pow-erful, all-embracing leap forward in the modernisation of the defence industry as the one carried out in the 1930s,” Rus-sia’s President Vladimir Putin said at an August session of the Security Coun-cil. In the 1930s, Soviet leaders trans-formed a country devastated by civil war into an industrial superpower. Putin

sees the sector as a new growth driver for the economy.

At the same time, Russian enterpris-es are having trouble meeting the grow-ing demand for certain types of equip-ment, such as torpedoes and light armoured vehicles, resulting in frequent wrangling between industry and the military. The latter is also unhappy with the quality of some types of weapons made in Russia, in particular certain models of small arms, unmanned air-craft and wheeled armoured personnel carriers.

In some cases, Russian forces have resorted to buying weapons from abroad in limited quantities to put pressure on local manufacturers and fill gaps in in-ventories until the domestic industry can meet their requirements.

There have been significant purchas-es of Austrian-made Steyr Mannlicher SSG 08 sniper rifles and Italian-made Iveco LMV M65 (Lynx) armoured cars, as well as Israeli drones. Foreign-made armoured personnel carriers and heavy-armament combat vehicles are also under consideration.

Russia’s military and political lead-ers have no plans to expand imports of military equipment. Their main focus is to modernise a national industry.

Russian hardware is generally regard-ed as advanced. Proof of this can be found in the growth of exports of mili-tary equipment from aircraft to tanks and anti-ballistic shields.

Most of the equipment now produced by Russia’s defence industry consists of radical upgrades of models first devel-oped in the 1980s and early 1990s. For instance, the only aircraft designed from scratch in the post-Soviet era is the Yak-130 lead-in fighter trainer.

In this respect, however, Russia is no different than other nations. Western countries continue to use basic modi-fications of military aircraft, tanks and artillery systems that appeared mostly in the 1970s and 1980s.

The national industry is focused on very large programmes to upgrade the country’s military capability. Several new armoured vehicles are on the draw-ing board, along with a new tank, a self-propelled gun, a heavy infantry combat vehicle, a fifth-generation T-50 fighter, and the PAK DA strategic bomber.

The Defence Ministry alone plans to spend US$23.1 billion in weapons and equipment

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HISTORY

Triumphant turning pointNation lauds significance of patriotic war of 1812 against Napoleon, writes Alexander Vershinin

Explosives are used in the re-enactment of the decisive Battle of Borodino, watched by 300,000 spectators.

Emperor suggested invasion of IndiaNapoleon was always drawn to the east, and researchers have consid-ered that his expedition to Egypt was no accident. But India had a special place in his plans.

Napoleon’s actions were always based on reality. France’s main en-emy was Britain. A military incur-sion into Asia with the ultimate aim of conquering Hindustan would lead to the total collapse of Britain and change the global geopolitical bal-ance of power.

There would also be a special role for Russia. On assuming power, Na-poleon made persistent suggestions to the Russian Emperor Paul I that they should embark on a joint cam-paign against India. The campaign came to nothing. After an advance of about 750km in three weeks, the newly crowned Alexander I brought the Cossacks back.

The growing differences between France and Russia after 1810 led to tensions. Napoleon decided to secure Russia’s agreement for his campaign by force. Baron Bignon, the head of French intelligence in the Duchy of Warsaw, wrote that the aim of the 1812 campaign was to prepare for an expedition into Asia. Russia would either join Napoleon’s army volun-tarily, “or, as a result of the laws of victory, will be drawn into a great movement which will change the face of the world”.

In March 1812, sources at the French court informed Alexander I that Napoleon expected to defeat Russian forces within two months.

This year Russia marks the 200th anniversary of the patriotic war of 1812, an event that played an important role in the country’s development as

a world power. The war against Napoleon is consid-

ered a key moment in world history. Before the first world war, Napoleon’s Russian campaign and the ensuing war of 1812 to 1814 was the largest military confrontation in history.

The battlefields of the patriotic war decided the fate of many nations and peoples. Russia was the last obstacle in Napoleon’s way to control Europe and the world. By turning Russia into a sat-ellite, the emperor would no longer be afraid of threats from Britain and could boldly plan further expansion into Asia.

The echoes of 1812 and its aftermath have spread around the world. After the defeat of the French, thousands of for-mer Napoleonic soldiers and officers went to Latin America, where they joined the supporters of Simon Bolivar and Francisco de Miranda in the strug-gle for liberation.

The historical significance of the 1812 patriotic war gives a political dimension to the bicentennial. The government is particularly sensitive to historical epi-sodes in which the country played a key role in world affairs and to ideas that formed the ideological foundation of Russian statehood: political conserva-tism, traditionalism and protectionism.

The war was a triumph of the Rus-sian state, when the country took a stand against revolutionary ideas that flowed from the “baggage train” of Napoleon’s army across Europe. It was Russia that helped to preserve the world order.

Of more than 600,000 soldiers of the Grande Armée that crossed the Russian border in July 1812, just 60,000 survived. One of the biggest battles of the war took place on September 7. Each side lost between 35,000 and 45,000 men.

The losses at Borodino, 110km west of Moscow, were more damaging for the French, who were unable to replace men and materials. By withdrawing, the Russian army under General Mikhail Kutuzov preserved its strength and was able to expel Napoleon.

Marshal Michel Ney was a hero to the French. He recovered from a neck wound to fight at Borodino and was “the last Frenchman on Russian soil”.

After the Russian retreat from Boro-

250,000men fought in the battle of Borodino, with about 84,000 casualties from both sides

Actors playing Napoleon and Mikhail Kutuzov head a cast of thousands.

dino, which Napoleon called the “bat-tle of giants”, the French leader captured Moscow on September 14. Entering the city, he expected the tsar to surrender. He did not and Kutuzov’s army re-mained in the field. Holding an empty city and lacking supplies, Napoleon was forced to begin a long and costly retreat. His army had, in effect, been destroyed.

The highlight of the anniversary cel-ebrations took place at Borodino field early this month, when thousands donned Russian and French military uniforms of the era and took part in a

re-enactment of the battle, in front of 300,000 spectators.

On December 25, exactly 200 years after the tsar’s manifesto was issued an-nouncing the expulsion of Napoleon’s troops, the main cathedral of Russia, the Cathedral of Christ the Saviour, will hold a service marking the victory in the patriotic war of 1812.

On the same day, during a gala even-ing at the Bolshoi Theatre, the results of the anniversary events will be summed up in honour of the 200th an-niversary of the victory.

Of the more than 600,000 soldiersof the Grande Armée that crossed the Russian border in July 1812, 60,000 survived

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RUSSIA AND GREATER CHINATuesday, September 25, 2012

Ten days that shook the world

Leo Tolstoy consults Dushan Makovitsky at Yasnaya Polyana in 1909.

A little more than a century ago, 82-year-old Leo Tolstoy fled his estate Yasnaya Polyana. In the middle of the night he left his house, accompanied by his per-sonal doctor, Dushan Makovitsky. This essentially personal drama, however, shook the world. It also presaged a cat-astrophic 20th century, as did the sink-ing of the Titanic, the start of the first world war and Russia’s October Revo-lution. Tolstoy’s journey from Yasnaya Polyana to the now-famous station of Astapovo, and to his death and return in a plain oak coffin to Yasnaya Polya-na took all of 10 days.

Makovitsky’s journal reads: “This morn-ing, at 3am (October 28, 1910), LN [Lev Nikolayevich Tolstoy] in his dressing gown, in slippers and bare feet, woke me; his face was full of suffering and determination. ‘I have decided to leave. You shall come with me. We won’t take much, only the essentials’.”

Poor Makovitsky didn’t realise that Tolstoy had decided to leave his house for good. The doctor did not take money with him. He also didn’t know that that night Tolstoy had only 50 roubles in the bank and some coins in a purse.

“We travelled to Gorbachevo in a sec-ond-class carriage. But from Gor-bachevo to Kozyolsk, Tolstoy chose to go third class, with the simple folk. When he had taken his place on a wooden bench, he said: ‘How nice and free’!” The train had one horribly smoky third-class carriage filled to overflowing. Tol-stoy soon began gasping for breath. He put on his fur coat and stepped out onto the rear platform. But smokers were standing there. He then went to the front platform; it was very windy, but desert-ed, except for a woman and her child, and a peasant. Makovitsky would later call the time that Tolstoy spent on that frigid platform as “fateful”.

The train moved slowly, over 160km in almost six-and-a-half hours. “This slow travel over Russian railroads helped kill LN,” writes Makovitsky. Late in the evening of October 29, they arrived at the Shamardino Convent where Tol-stoy’s sister, Marya Nikolaevna, had taken the veil two decades earlier.

Tolstoy went straight to her cell. He found her with her daughter, Elizaveta Obolenskaya. The great Tolstoy now wept on the shoulder of one woman

and then the other as he recounted his recent life at Yasnaya Polyana. How his wife had watched his every move, how he had hidden his secret diary in one of his boots and next morning found it missing. He told his sister and niece about his secret will, about how Sofya Andreyevna (Tolstoy’s wife) would steal into his study at night and rummage through his papers, and if she noticed that he was still awake in the bedroom next door, she would come to him and pretend that she had only come to find out how he was feeling.

Tolstoy’s daughter, Sasha, also noted her father’s sorry state. “I think papa already regrets leaving,” she told her cousin Liza Obolenskaya.

Tolstoy was extremely mercurial in his moods. To change his view was vir-tually impossible; it would require years.

As soon as he descended from the train at Astapovo, Makovitsky went to the station master. He told him that “Lev Tolstoy was aboard the train and had fallen ill, he needed rest and must be put to bed”. The station master had great respect and agreed to take Tolstoy in.

Tolstoy was in his death throes, toss-ing and gasping for breath. He also ap-peared tortured by the fact that the peo-ple around him could not understand something very important he was trying to say. Most of his last intelligible words were to his son, Sergei: “The truth ... I love many things, I love all people.” It was only after his last shot of morphine that his wife, Sofya, was summoned to his bedside. She walked in, got down on her knees, and said, ”forgive me”.

Excerpts from “Leo Tolstoy: Escape from Paradise” by Pavel Basinsky

Writer Leo Tolstoy inherited the Yasnaya Polyana estate in 1847. The well-preserved country house (top) is 240km south of Moscow, open to the public, and displays his furniture (above, left) and unmarked grave.

Estate echoes to War and PeaceMore than a century after his death, it is easy to see how Yasnaya Polyana inspired Tolstoy, writes Oleg Nekhaev

LITERATURE

Yasnaya Polyana estate is so beautiful and peaceful. You can understand the appeal the late 18th and early 19th-century estate held for Leo

Tolstoy, the acclaimed writer of War and Peace and Anna Karenina, two of the most famous novels of all-time. He was born and spent nearly 60 years of his life there before his death in 1910, lik-ening the rural retreat 240km south of Moscow to a microcosm of Russia and stating that he couldn’t exist without it.

The well-preserved estate includes the Tolstoy house with original furniture and library, a guest wing and a house for the domestic staff. There are farm buildings, parks with cascading ponds, apple or-chards and forests planted mostly by Tol-stoy. It is fitting that he was buried in Stary Zakaz wood. Tolstoy inherited the estate in 1847. The manor house looks huge from the outside, though the rooms are more modest in size and the use of birch wood throughout gives it a warm glow.The spacious three-storey house with 32 rooms, where he was born in 1828, was later demolished. Upon his return from St Petersburg in 1856, Tol-stoy and his family had to occupy one of the two wings which his grandfather built. As Tolstoy’s family grew, the house was extended.

Brought up in a privileged family, Tol-

stoy later turned his back on material-ism, religion and urban society. He strove for simplicity on the estate, where he wrote most of his greatest works.

The largest room, “the parlour”, has been preserved in the old mansion. “Many heirlooms were passed on from generation to generation. Portraits, ma-hogany furniture and the comfy old chairs from the old mansion – all moved together with the family,” says the es-tate director Vladimir Tolstoy, a decend-ant of the writer.

Leo Tolstoy preferred to do much of the work around the house himself, and was on good terms with the peasants. When he was 21, the writer opened a school for peasant children and often gave classes himself.

One of the most remote alleys has Tolstoy’s favourite bench, which offers marvellous views. The Tree of Love is another attraction. Legend has it that if you go around the tree several times and make a wish, it will come true.

In 1892, according to his views, Tol-stoy renounced his property and divid-ed all he had owned among his heirs. Yasnaya Polyana was given to his wife Sofya and their youngest son, Ivan.

There was much discord in the fam-ily in later years. On October 28, 1910, Tolstoy left his home estate for good, and returned only for his burial.

Tolstoy strove for simplicity on his estate, where he quietly wrote most of his greatest works

Leo Tolstoy with his wife Sofya Andreyevna at Yasnaya Polyana.

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RUSSIA AND GREATER CHINA14 Tuesday, September 25, 2012

Switch to ‘banya’ to relieve aches and painsSergei Teplyakov

The pleasure Russians derive from hav-ing their bodies beaten with twigs while sweating in a banya (traditional sauna) has puzzled foreigners for centuries. “You tell foreigners that it is pleasant to use a switch and that it’s good for your health,” says Maria Ivanova, who sells switches in the village of Berezovka. “But they won’t believe you – they think it is a practical joke.”

Deciding which switch to use isn’t simple. “Liquorice switches are excel-lent for tackling cellulite if you add herbs – tutsan and marjoram,” says another switch vendor, Lada Zyablitskaya. “The best all-round switch is birch, which is especially good for muscle aches. Oak switches are thought to stop blood pres-sure rising in the steam room and help calm nerves. A lime tree switch is an excellent cure for headaches and has diuretic properties, which help exercise the kidneys. It also stimulates sweating, calms nerves, heals wounds, improves airflow to the lungs and reduces fever.

“A conifer switch stimulates perspi-ration and increases blood circulation deep in the muscles and the internal organs. It also acts as an excellent mas-sage tool, helping back and neuralgic pains. Eucalyptus helps cure colds and sore throats. Press it against your face and breathe it in for up to five minutes. Nettle switches are used after exercise, when your muscles and joints are sore to make the pain subside.”

Five-step route to achieve perfection1. Pour water on the stones to heat the steam to 60-70 degrees Celsius2. Soften your chosen switch in the boiling water 3. Whip yourself lightly with the switch or take a partner with you so that you can whip each other4. Take a shower, wrap up in a tow-el and drink a mug of beer or kvass (a fermented yeast drink) in the anteroom5. Repeat these steps until you’re exhausted

Birch is good for muscle aches.

MEDICINE

Sergey Nechayev reveals his secrets to Aleksandra Bazdenkova

Healer ‘serves God’

Sergey Nechayev’s grandfather, a Don Cossack descended from an ancient family of heal-ers, lived to be 116.

He once took a piece of coal from the fire and placed it in his grand-son’s hand. The boy endured the pain. His father was outraged. But the grand-father said: “Leave us alone. He’ll grow up to be my heir.”

Nechayev does not advertise. “I work with the people whom the doctors have been unable to help,” he says. “I have no other patients.”

One wall of the room where he works is covered with Oriental weapons and masks. Another features acupuncture charts and various certificates. One of them reads: “Master of traditional med-icine Sergey Nechayev.”

Massage, acupuncture, herbs and ointments are his main “tools”.

“I am a trapeze artist by trade,” Ne-chayev says from a lotus position. Before circus school, he was an amateur boxer. Then, in 1966, Nechayev met his first pa-tient, an athlete with a dislocated shoul-der. He understood then that his grand-father’s gift could be revived. He met his first teacher, a Chinese who showed him the basics of acupuncture, when he was a circus school student. He had to prac-tise on himself to feel the healing effect.

Colleagues started asking for help. “I was sticking needles in those poor gym-nasts and acrobats,” Nechayev says. “The only alternative for them was plaster and dressing and no healing at all.”

After his circus career, Nechayev ded-icated more time to healing. He treated dancers and athletes but continued working as a stuntman for 25 years.

An important part of his life is con-nected with the neurosurgery institute. “There were types of surgery that caused so much pain I was ready to chop off an arm or leg,” he says. “Medication

didn’t help. And then the institute worked out a method for burning nerves. But pain wouldn’t go. So I worked on alleviating those pains.

“Originally, Russia had nothing but folk medicine. Herbs were created by God. If you don’t believe in herbs, you don’t believe in God. Pills were created later by people, with their imperfect

‘Master of traditional medicine Sergey Nechayev’ is a trapeze artist by trade.

brains. But you cannot treat diseases with drugs. You can only turn the acute phase into a chronic one.”

“European medicine regards a human being materialistically. A man is a combination of bones, muscles, blood and lymph. You cut him to ob-serve them. What makes them work to-gether? How can a doctor treat without

knowing this? We need to study what we already have.”

He says he always finds a common language with doctors but it is not so easy to win the trust of someone in pain.

Nechayev shows me a video in which an American businessman talks about how Nechayev saved him from com-plicated spinal surgery. Another video is of a doctor with 25 years’ experience telling the story of a friend delivered to Nechayev in a poor condition but who now lives happily in Luxembourg.

“I videotape all my patients, if they let me,” he says. “Why? Who would be-lieve a healer without any proof?”

Russians often accuse healers of being charlatans. “This is why healers [can be] very secretive people,” Nechayev says.

Nechayev once saved an old man from an amputation by putting a spell on him. “They invited me to all wed-dings and birthday parties to put more spells on the family,” he laughs.

“Every man is a creature created by God,” Nechayev says. “I treat God’s cre-ations, thus serving him.”

It is all about legal and moral respon-sibility, he says. “Have there been any failures in my practice? I wouldn’t be here, or I would be in prison if I had failed,” Nechayev explains.

Folk remedies retain their allureAleksandra Bazdenkova

Before the second half of the 19th cen-tury, most medical treatments availa-ble in Russia was based on folk medi-cine. Herbal medicine, baths, cataplasm, hot steam saunas with switches, mas-sages and bone-setting, spells and heal-ing prayers were healers’ main tools.

A lot was borrowed from neighbours, in Europe and Central Asia. They learned to use taiga herbs such as gin-seng, and how to administer first aid for snake bites from the Chinese.

Opium reached Russia as late as the 16th century, but Russian healers had long been using hallucinogenic mush-

rooms as painkillers. Russian healers were masters of “vacuum” pot massage to restore stomach and bowel functions.

The first written prescription based on medicinal herbs in Russia dates back to 1037. Later, Evpraksia, a granddaugh-ter of Grand Prince Vladimir Mono-makh, wrote a book containing prescrip-tions for skin and oral diseases.

By the 16th century, the trade in me-dicinal herbs was prospering in Mos-cow and other cities. The first Tsar’s apothecary was established in 1581 to service the Tsar and members of the royal family. Chemicals were used sole-ly by the upper class.

In the late 16th century, Moscow es-tablished the Apothecary order, which

oversaw the entire medical and phar-macy industry of Russia. Under the rule of Peter the Great, pharmacies and apothecary gardens appeared in the largest towns.

Phytotherapy, or herbal medicine,

remains the most popular type of folk medicine. Most Russian citizens, if they catch a cold, will drink tea with lime tree flowers or raspberry tea. They treat coughs by breathing steam of freshly boiled potatoes or swallowing teaspoons of freshly squeezed onion juice.

Russia has a variety of prescriptions and types of herbs. Siberian dwarf pine is used to treat rheumatism. Licorice from the Urals is an excellent remedy for respiratory diseases. Tutsan from central Russia has anti-bacterial, anti-fungal, spasmolytic, anti-inflammatory and vessel-strengthening properties.

Folk medicine is not limited to herbs. Russian steam sauna, mineralogy and zootherapy are also popular.

Phytotherapy, or herbal medicine, remains the most popular type of folk medicine

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RUSSIA AND GREATER CHINATuesday, September 25, 2012

Superstitions abound in a culture of vivid friendships and secrecy, writes Ajay Kamalakaran

Mind your toes in Moscow

LIFESTYLE

When I accidentally trod on a Russian friend’s foot for the first time, he re-turned the favour within seconds. After being

questioned about the rapid response, he said it was to ensure that the two of us didn’t get into a fight in the future.

This was my entry into the world of Russian superstition. This “rationalist” insisted that he lost many a friend, sim-ply because he stepped on their feet at some point or the other.

Coming from a country where peo-ple’s superstitious beliefs can drive a “real rationalist” insane, I laughed at his belief that a friendship of five years could be broken because I had trodden on his foot. Such superstitious beliefs are common in Russia.

Many people in Russia believe that friendships can be broken if people shake hands while their gloves are on. Imagine removing your gloves on a bit-terly cold day when temperatures fall 30 degrees below freezing just so that you can shake a friend’s hand?

Since friendship is very vivid in Rus-sia, many people I know refuse to shake hands with their gloves on. A bit of frost-bite is better than losing a real friend.

Superstitious beliefs are an essential part of Russian life and are accepted by people from all walks of life. A close friend of mine once told me that his pocket was picked because he came back to his house after forgetting some-thing and did not look at the mirror.

“If I looked at the mirror after I came back home, I am sure that I would have had a better day,” he said. As irrational as I found this belief, I came to under-stand that most of my Russian friends shared such views on returning to the house after forgetting something and looking at the mirror.

Then there are those who believe that travelling on a Monday can either bring bad luck or prolong the voyage. An ac-quaintance going to Thailand on a Mon-day had to deal with a series of cancelled flights and came back home almost a week late. He insisted that flying out on Monday caused his delays. He wasn’t willing to see reason when I told him that many of those who suffered from a cancelled flight on their way home didn’t take a flight away on a Monday.

Russians also believe that shaking hands or passing an object over an open door can bring bad fortune. This doesn’t mean that Russians step outside their home to take the pizza from a delivery man, but usually, friends don’t shake hands or pass on something through doors.

The problem with such beliefs is that they affect the psyche of the most ra-tional people. Broken friendships are often attributed to stepping on feet or shaking hands through doors.

The communists incorporated some pagan beliefs into their way of thinking. For example, the Soviet and Russian ob-

session with secrecy comes from a be-lief that revealing plans or showing too much about a place, may invite bad for-tune. Russian people guard secrets as if their lives depend on it.

There is also a belief among many that revealing good plans or intentions might ruin them. The cure for this is to spit on wood three times or mimic the action three times. Russians believe this is the best way to ward off the evil eye.

Birthdays are a huge occasion in Rus-sia, and are celebrated in great style, but generations-old beliefs call for well-wishers to wait until the day of the birth-day to wish someone happy birthday. While wishing someone happy birth-day later is acceptable, congratulating them earlier may result in bad fortune

for the birthday person. Doing so even a few minutes before midnight could bring bad luck and bad health, as the legend goes.

Most Russian superstitious beliefs re-volve around friendships and the dan-gers of losing them. I remember giving a hunter a special knife for his birthday, which took him by surprise. Giving this friend a knife would have supposedly turned him into an enemy. The pros-pect of having a 1.9m, 110kg person as an enemy didn’t appeal to me, but there was a solution on hand. He just had to give me a symbolic amount of 10 rou-bles (HK$2.4) and that was enough to prevent us becoming enemies.

Many Russians laugh at me for ac-cepting some of these beliefs, and mock

me for being more “Catholic than the Pope”. These people who have been friends for several years have stepped on my feet countless times, gifted me knives and insisted on shaking my hands with gloves on, just to disprove what some of them call “stupid myths”.

At the end of the day, it boils down to individual beliefs.

A former colleague who saw a nasty neighbour as he walked out of his apart-ment on his wedding day took it to heart that this was a bad sign for his marriage. The couple were together for five years before they were married, but ended up divorced after six months of anything but marital bliss. To this day he insists that his wedding was jinxed by the mean man who lives on the fourth floor.

Then there are those who believe that travelling on a Monday can either bring back luck or prolong the voyage

Stepping on a friend’s foot could lead to a dispute, according to one of Russia’s many ancient superstitions. Another includes a black cat crossing the road in front of you which could lead to bad luck.

From cosmonauts to corner seats It is a well-known fact that Russian cosmonauts like to watch the clas-sic Soviet film “White Sun of the De-sert”, before flying into space. There are several stories doing rounds on the internet about Russian cosmo-nauts urinating on the tyre of a trail-er before each launch. This is alleged-ly something Yuri Gagarin did before he became the first human to journey into space when his Vostok spacecraft orbited the earth on April 12, 1961.

For those who are afraid of staying single, rule number one in Russia is to avoid sitting in a corner seat.

This allegedly ensures a life of un-married bliss. This belief was initial-ly applied just for women, but later caught on with men, some of whom no doubt pick a corner seat on pur-pose.

There is a belief among many that revealing good plans or intentions might ruin them

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RUSSIA AND GREATER CHINA16 Tuesday, September 25, 2012

Bolshoi lights up big screen

CITY

Challenging conventionsArt group AES+F brings critical vision in photographs and film to HK, writes Diana d’Arenberg

Standing boldly among the con-temporary Russian artists who have started to attract serious attention in the past couple of years are the four-artist col-

lective known as AES+F. Consisting of Tatiana Arzamasova,

Lev Evzovitch, Evgeny Svyatsky and Vladimir Fridkes, the group collaborat-ed as AES since 1987, and with photog-rapher Fridkes (the +F) since 1995.

Based in Moscow, the group has slow-ly wooed curators with their challeng-ing works. They caused a sensation at the 52nd Venice Biennale Russian Pa-vilion in 2007 with a video and series of photographs, The Last Riot 2. A recent screening of Allegoria Sacra in Adelaide attracted 82,000 people over three months. This month, Art Statements gal-lery in Aberdeen brings AES+F’s work to Hong Kong.

The group’s digital works engage with everything from geopolitics to art his-tory and popular culture, and navigate the constantly shifting borders of na-tional and cultural identity.

Their films and photographs depict a dystopian collision of worlds, races, cul-tures and art movements, and draw on contemporary social and political issues.

The AES+F group exhibits its digital works in Aberdeen until October 6.

Their work is overwhelming in the lay-ering of present and historical referenc-es. Art Statements director Dominique Perregaux encountered the group in 2006, which led to an exhibition of The Last Riot 2 in Hong Kong in 2007.

“I was stunned by the new aesthetic they were bringing,” Perregaux says. In Hong Kong, the group is exhibiting The Feast of Trimalchio, a digitally animat-ed collage of thousands of photographs backed by a dramatic score. Unfolding in a sequence of slow-motion scenes of synchronised balletic movements, at a glance the work resembles a high-fashion advertisement, but on closer

Win tickets to watch Swan Lake Swan Lake is one of the most beau-tiful dramas in the Bolshoi theatre’s repertoire.

It’s also regularly performed at the Metropolitan Opera House in New York and London’s Covent Garden.

RBTH.Asia is delighted to give you a chance to win a pair of tickets to the recorded performance of Swan Lake in Hong Kong.

The rules are simple. Just answer three questions on our facebook (www.facebook.com/rbth.asia) or on the web-site (rbth.asia/swan-lake) and you will be entered in the lucky draw, where you will have the chance to enjoy the show at Palace ifc on October 28, at 4.50 pm.

Shirley Lau

Forget opera glasses, elegant attire and expensive tickets. Watching the world’s best-known ballet troupe can be relax-ing and inexpensive.

Hong Kong audiences will be able to watch a series of recorded performanc-es by the legendary Bolshoi Ballet at local cinemas, getting all the thrills of a live show at a fraction of the cost. Eight shows will be aired at three local cinemas from October 28 until July next year. The shows feature some of the most famous names in modern classical dance, including cho-reographers Yuri Grigorovich and Mar-ius Petipa and prima ballerina Svetlana Zakharova. Five of the acts, La Sylphide, The Pharaoh’s Daughter, La Bayadère ,

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examination a different narrative emerg-es. Taken from Petronius’ work, Satyri-con, Trimalchio is associated with wealth and luxury.

“We searched for an analogue in the third millennium and Trimalchio, the

Tickets range from HK$150 to HK$180, whereas a front-row ticket at the Bolshoi Theatre can cost HK$3,600. Recorded and live art performances shown at cinemas have become increas-ingly popular. In Hong Kong, moviego-ers have been treated to a variety of such events, but this is the first time the Bol-shoi Ballet will make it to a big screen.

Founded 236 years ago, Bolshoi Bal-let was last in Hong Kong in 2008 when it performed Spartacus. The 187-year-old Bolshoi Theatre is one of the world’s brightest cultural jewels. Last October, the theatre reopened its doors after a six-year renovation marred by delays and allegations of corruption. At the opening gala, then-Russian president Dmitry Medvedev said: “The Bolshoi is one of our greatest national brands.”

former slave, the nouveau riche host of feasts lasting several days, appeared to us not so much as an individual as a collective image of a luxurious hotel, a temporary paradise which one has to pay to enter,” say the artists. The work

is a critique of consumerism, surface glamour and cultural stereotyping.

Feast of Trimalchio at Art Statements Gallery until October 6, by appointment only. Contact hongkong@atstatements.com, or telephone 2696 2300.

The film ‘Bolshoi Ballet in Cinema’ is an affordable introduction to dance.

Bolshoi Ballet in Cinema will run from October 28 to July 7, 2013. Tickets can be booked on www.cinema.com.hk or www.amccinemas.com.hk. For more information, go to www.hkbolshoibal-let.asia.

The Rite of Spring, and Romeo and Juliet, will be fresh from Bolshoi’s new season. The other three, Swan Lake, The Nut-cracker and Don Quixote, were recorded in 2010 or 2011.

All the performances were shot spe-cifically for the big screen.

Judith Kwong of Hong Kong’s Edko Film, which is helping with the show-ing, says the high-quality images will deliver all the thrills and excitement of a real live performance, along with the feeling that one is part of the theatre audience. “Every seat in the cinema will be better than a theatre seat as far as viewing is concerned,” Kwong says. “There will also be some behind-the-scenes features such as backstage foot-age and interviews, which theatre-go-ers don’t normally get to see.”

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