WEDNESDAY, SEPTEMBER 26, 2012

Diamonds Revelation of super-hard gem deposit causes industry to reconsider the use of natural stones

Opposition Ready for Fall Political Season

Politics Protestors take to the streets again

A deposit of super-hard diamonds located in an asteroid crater be-tween the Krasnoyarsk Territo-ry in Eastern Siberia and the Re-public of Sakha (Yakutia) in the Russian Far East has fi nally been declassifi ed. The deposit, known as the Popigai Astroblem, was dis-covered in the 1970s, but Soviet scientists decided to keep the fi nd secret since, according to geolo-gist Alexander Portnov, they did not know the best way to make use of the diamonds. Typically, naturally occurring diamonds are not suitable for industrial use be-cause of their unpredictable and non-standard characteristics. However, experts agree that the unique properties of these dia-monds make them suitable for use in high-tech optics and elec-tronics.

“Research into impact dia-monds had been classifi ed for a very long time, because the re-serves are immense, but [Soviet] scientists did not believe they could be used in industry,” said Portnov. “The very possibility of their application in the manufac-turing sector is a sensation.”

Impact diamonds are created when an object such as a meteor hits an existing diamond depos-it. They are known for their large grain size.

Industrial use of diamonds amounts to approximately 5 bil-lion carats, but most of these di-amonds are produced artifi cial-ly, said Sergei Goryainov, an observer at the Rough & Pol-ished information and analysis agency.

ANASTASIA VEDENEYEVA, EKATERINA GABELEVAKOMMERSANT

PAVEL NIKULINRUSSIA BEYOND THE HEADLINES

Discovered in the 1970s but kept

secret by the Soviets, a deposit in

Siberia has enough diamonds to

satisfy the world’s industrial

demand for 3,000 years.

The Russian opposition has

adjusted its objectives for the

new political season, taking into

account the Pussy Riot case and

arrests during earlier protests.

CONTINUED ON PAGE 2CONTINUED ON PAGE 3

Eastern Siberia’s Glittering Game-Changer

DOME, a bar-

cafe with its

own cinema, is

a mash-up of

the dreams of

its owners: One

wanted to

open a restau-

rant while the

other wanted a

small theater in

which he could

visit with

friends.

While dia-

monds intend-

ed for jewelry

are prized for

their beauty,

diamonds used

in industry are

valued for their

super-hardness

and particular

molecular

structure.

NEWS IN BRIEF

Russia has declined to accept commitments under the second phase of the Kyoto Protocol. “Russia’s decision is based on comprehensive analysis of the modern environmental, economic and politi-cal realities,” said Foreign Ministry spokesman Alexander Lukashevich, announcing the decision, noting that Russia is not categorically against the Kyoto Protocol, but does not see much point in an agreement that does not involve the United States and China. The commitments stipulated by the current format of the Kyoto Protocol apply only to developed countries and cover about 30 percent of global greenhouse gas emissions.

The 2012 APEC summit wrapped up in the Pa-cifi c port city of Vladivostok on Sept. 9, but the legacy of the meeting remains — and not only in the form of some dramatic infrastructure upgrades. Vladivostok’s reconstruction, which involved new roads and a stunning bridge, went off on time and without a hitch. Equally important, the sum-mit was a platform for discussion about the risks and opportunities of free trade, resulting in a num-ber of important investment deals for Russia’s Far East — including the fi rst-ever launch of a Mazda assembly line outside of Japan.

Russia Backs Out of Kyoto 2.0

Vladivostok Benefi ts from

Successful APEC Summit

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Designer Turns Pier 57 Into a Futuristic Odyssey

Russian Traditional Healer Reveals His Secrets

After two decades of working in Russia, the Rus-sian office of the United States Agency for Inter-national Development (U.S.A.I.D.) will shut its door as of Oct. 1 at the request of the Russian government.U.S.A.I.D., which has a mandate to support U.S. foreign policy, has spent more than $2.6 billion in Russia funding health care, edu-cational and environmental programs as well as promoting democratic reforms.

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Long-standing deputy expelled from DumaP.02

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New fast food options target the health-conscious office workerP.03

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Russian star returns to the Metropolitan Opera stageP.07

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known. They can be applied in high-tech industries: electronics, optics, production of high-preci-sion lenses,” Pokhilenko said. “We see excellent prospects — and some big corporations, such as De Beers and some Chinese com-panies, have already shown an interest.”

Scientists believe that the Pop-igai Astroblem has enough dia-mond reserves to meet the entire world’s industrial demand for the next 3,000 years.

Opponents of the Russian polit-ical establishment gathered for another March of Millions on Sept. 15, marking the opening of the fall protest season. Moreprotests, monitoring of October’s regional elections and the strug-gle for the release of arrested pro-testers will be at the top of the agenda for the Russian opposi-tion this fall, according to oppo-sition activists. Observers, how-ever, expect to see a change in the tactics and strategy of the op-position, including more specifi csocial demands from protestors and anticlerical slogans.

Ilya Yashin, one of the leaders of the Solidarnost political move-ment, told reporters that mem-

bers of the opposition might start using social slogans, but politi-cal expert Alexei Mukhin be-lieves that they will take a back seat to ones about freedom of speech and assembly. Slogansdemanding changes in social ser-vices are traditionally popular in Russia, and they could be es-pecially relevant this fall, when the Russians back from summer holidays see the impact of the recent increase in utility fees, which came into effect on July 1. But given the ongoing media coverage of controversial laws on Internet freedom and nongov-ernmental organizations, Mukh-in says that the opposition will focus on issues that can be in-terpreted as repression. “These include the Pussy Riot trial and the arrests of protesters during the rally on May 6, whom the opposition regards as political prisoners,” said Mukhin.

“Industrial diamonds have multiple applications, but the thing is that successful crystal synthesis experiments resulted in the appearance of numerous syn-thetic diamonds with tailor-made properties,” Goryainov said. “When you extract natural dia-monds, you can never be sure about the exact properties. The share of natural diamonds on the market for industrial crystals is currently quite insignifi cant.”

Despite the overall industry

preference for synthetic dia-monds, a few big corporations have expressed an interest in the rediscovered deposit, said Niko-lai Pokhilenko, director of the No-vosibirsk Institute of Geology and Mineralogy.

“They have peculiar properties. They are harder, much harder than the ordinary diamonds we all know. They can revolutionize the tool-making industry, drill-ing, processing, because they are the hardest natural material

The average Russian visits a café or a restaurant about seven times a year, according to a recent study by BusinessStat. A typical ques-tion on frequent diner card ap-plications ask customers if they

Restaurants Creativity wins in Moscow market

Restaurants are popping up in

Moscow — but with few people

eating out, the competition for

customers has produced some

interesting developments.

Not Just Eating Out

ANNA VASILYEVA, ARTEM GALUSTIANKOMMERSANT-DENGI

visit a restaurant once a month, once every six months, or once a year. The BusinessStat survey also found that while the restau-rant business in Russia has grown by 17.8 percent over the past year, the number of customers in-creased by just 3 percent.

In order to cope with this in-creased competition, Moscow res-taurants fi nd they have to expand their offerings.

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MOST READ02

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The demand to release political prisoners is another topic that is quite popular with opposition ac-tivists, even though the term “po-litical prisoner” is not defi ned in Russian legislation. The opposi-tion cannot agree whether the members of Pussy Riot are pris-oners of conscience or not, but they have no doubts that the pro-testors arrested in May fit this category. The opposition prom-ises that those who took part in earlier protests will not be for-gotten during the upcoming marches. “They won’t match the fuss caused by the Pussy Riot case, but the prisoners of May 6 will dominate the agenda,” said Ser-gei Vlasov, spokesman for the Ro-suznik human rights project.

One important mission for the opposition this political season is to create legitimate organiza-tions. To this end, the opposition will hold elections at the end of October for a coordinating coun-cil, which is intended to bringtogether protest-minded politi-cians. There have been manyattempts to create such an asso-ciation, but so far none has been successful. The new coordinating council has a far better chance of becoming legitimate, however, because opposition activists will have a real election, both online and at polling stations in many Russian regions.

Both professional opposition politicians and little-knownactivists will run for seats in the council, including Novosibirsk artist and activist Artyom Los-kutov. “My objective is to raise, among other things, the issue of

Opposition Readies for Fall Season

Russia’s antigovernment opposition continues to draw crowds, as evidenced at a Sept. 15 march in Moscow.

Former Duma Deputy Gennady Gudkov (right) never misses a protest.

with the church,” Pribylovsky said. “They are dissatisfi ed with the degree of its involvement in the life of the country, but anti-clericalism will hardly make it into the top 10 slogans.”

The demand for fair elections is a longstanding opposition slo-gan that remains relevant. Dur-ing the previous political season, which involved both State Duma and presidential elections, civil activists moved from chanting in squares to real action — they signed up as election observers and formed fl ying squads to pre-vent ballot fraud.

Opposition groups promise to be equally thorough when mon-

itoring the regional elections scheduled for Oct. 14. “I observed the Duma elections in the small town of Kasimov this summer,” said Rustam, who observes elec-tions for the Russian Union of Observers. “I guess it was because the elections were fair that the candidate of the party in power received just 55 percent of the votes, not 95 percent. Khimki, near Moscow, will be our next battlefield, and we’ll be strong enough to cover all the polling stations and prevent fraud.”

The Central Election Commis-sion expects record numbers of observers at polling stations dur-ing the regional vote.

anticlericalism in the opposition,” Loskutov said. “Politicians are afraid to do that, trying to dis-tance themselves from the Pussy Riot protest. If they don’t have the guts to speak against the fu-sion of the church and the state, then I will. Not everyone will ap-prove of my mission to stop them from clericalizing society.”

In the wake of the Pussy Riot trial, the relationship between church and society has become one of the hottest topics in the press and the blogosphere. Polit-ical expert Vladimir Pribylovsky has doubts that the antichurch slogans will be successful. “Op-position leaders have a problem

Taking to the Streets, but to What End?

Following the State Duma elections on Dec. 4, 2011, Russians spontane-ously took to the streets in the big-gest protests the country had seen since the early 1990s. Driven by frustration with the lack of transpar-ency and engagement in the politi-cal system, the protest movement continued to grow throughout the winter, spearheaded by such lead-ers as anticorruption blogger Alexei Navalny, long-time liberal politician

Boris Nemtsov and Left Front lead-er Sergei Udaltsov.However, while protests continue to draw large crowds, the future of the movement remains uncertain as long as taking to the streets re-mains its only activity. Some activ-ists have taken more concrete ac-tions such as monitoring of polling places or running for local office, but the movement as a whole re-mains mostly directionless.

CONTINUED FROM PAGE 1

14,000protestors participated in the Sept. 15 March of Millions, according to police reports. Organiz-ers reported 100,000.

39political parties are currently registered in Russia. Nearly 200 oth-ers are in the process of being registered.

17people are still being held on suspicion ofinciting violence during the May 6 opposition protest.

THE NUMBERS

A number of Russian human-rights activists, including Memo-rial and the Moscow Helsinki Group, have declared that they will refuse to cooperate with a new law targeted at nongovern-mental organizations (N.G.O.s). The activists intend to protest the law, which requires all organiza-tions that receive funding from abroad to declare themselves as “foreign agents.”

Alexander Cherkasov, head of Memorial, Russia’s largest hu-man-rights organization, said that he has no intention of accepting the status of foreign agent and that he will refuse to cooperate with the laws passed this sum-mer by the Russian State Duma.

“First, we don’t consider our-selves to be ‘foreign agents,’ as

N.G.O.s Russia’s oldest nongovernmental organizations take a stand against a new law that they say undermines their work and legitmacy

Two of Russia’s oldest human-

rights organizations have

announced their intention to

boycott a law declaring N.G.O.s

“foreign agents.”

they have chosen to describe us. Agents carry out some sort of task in exchange for money, but we don’t do this,” said Cherkasov. “In their wisdom, our legislators have decided to spend their time coming up with ridiculous schemes, as if they don’t have enough real problems to bedealing with, but we are not going to cooperate with their absurd decisions.”

The protesting N.G.O.s also in-tend to refuse to pay any fines they might face for not observ-ing the new regulations.

Cherkasov claims that the law has not been thought through properly; he believes the mean-ing of the word “agent” has been skewed and the idea of “political activity” has been understood very loosely.

Lyudmila Alexeeva, head of the Moscow Helsinki Group, supports Cherkasov’s decision and confi rms that, despite the threat of fi nes, her long-established human rights group will also refuse to register as a foreign agent.

“We do not think of ourselves as foreign agents, and we are not foreign agents. We have always been open and honest with our state and with our nation, so we find it very offensive that they are trying to label us as some sort of agent and threatening us with fi nes,” said Alexeeva. “We receive grants from abroad and spend the

money on defending human rights — our job is to help people in need, and that is all there is to it. So their labels mean nothing at all. We would only turn downforeign grants if we were threat-ened with closure, and then we’d have to survive on Russian aid; but at the moment funding from Russia is very scarce.”

State Duma deputy Alexander

Sidyakin, the author of the con-troversial provisions, has main-tained that human-rights orga-nizations who refuse to comply could face closure if they insist on sabotaging the law.

“With the introduction of fi nes, the new regulations are now very clear. Representatives of human rights organizations shouldunderstand that this is a federal law that must be respected,”Sidyakin said. “If they decide their budget can stretch to pay the 1.5 million ruble ($47,700) fi ne, then that’s great—they can go ahead and pay; but they shouldn’tforget that, once they have paid a few fi nes, they may be accused of fl agrant non-compliance with a federal law. And, according to the current rules, this couldconstitute grounds for the forced closure of the organization.”

Memorial and the Moscow Hel-sinki Group are the biggest and oldest human-rights organiza-tions in Russia; both were found-ed before the fall of the Soviet Union.

Organizations to Boycott New Law on N.G.O.s

Lyudmila Alexeeva (left) heads the Moscow Helsinki Group.

DMITRY RUNKEVICHIZVESTIA

About the N.G.O. law

In July 2012, amendments to Rus-sia’s law on nongovernmental orga-nizations (N.G.O.s) went into effect. According to the new regulations, politically active organizations that are financed by bodies outside of the Russian Federation have to of-ficially register themselves at the Ministry of Justice on a separate list and accept the status of “for-eign agent.” These “agents” will al-so be obliged to indicate their sta-

tus on all of their printed materials. If organizations do not comply with these rules, group leaders risk sub-stantial fines and criminal charges that could entail a prison sentence of up to four years.Opponents of the law say it un-dermines the development of the country’s independent civil society and is a death sentence for many organizations, as opportunities for raising funds in Russia are limited.

Gudkov: Innocent Victim or Criminal?

“We’ve been honest with our state and with our nation, so we find it very offensive,” said Alexeeva.

Politicians Legislator expelled from the Russian State Duma claims discrimination based on his support of the opposition movement

Opposition activists see bias in

the expulsion of Gennady Gudkov

from the State Duma;

government supporters say he

simply broke the law.

On Sept. 14, the State Duma voted to strip Gennady Gudkov, a long-serving member of Just Russia, of his seat in the body for violat-ing a federal law prohibiting pol-iticians from engaging in com-mercial activity. Gudkov has not denied being involved inbusiness and is the owner of many private security fi rms through a holding company called theOskord Association. However, Gudkov supporters link hisouster to his support of antigover-ment protests.

Gudkov is well known in the world of politics. The retired F.S.B. colonel and former K.G.B. offi-cer-turned-businessman was fi rst elected to the State Duma in 2001 and served four consecutive terms, but he became an active opposi-tion fi gure following the Decem-ber parliamentary elections; he has not missed a single major op-position rally in Moscow since. Gudkov has fought for opposi-tion rights not only in the capi-tal but also in the regions, trav-eling to Astrakhan to support Oleg Shein, a fellow Just Russia member who went on a hunger strike after losing the race for the Astrakhan mayor’s office.

Gudkov’s oppositional activi-ties have not gone unnoticed by the Kremlin. At least that’s what the politician has been claiming,

ascribing his tribulations to the powers that be. This summer, a complaint against Gudkov was fi led by Ivailo Zartov, a Bulgar-ian citizen and Gudkov’s former business associate, who claimed that Gudkov owned a business in Bulgaria. Investigators were quick to confi rm this report and considered it appropriate to ini-tiate criminal proceedings against the Duma deputy.

Gudkov’s son, Dmitry Gudkov, also a Duma deputy, believes that his father is not the only busi-nessman in government. He has launched an online project aimed at identifying entrepreneurs among deputies in the ruling United Russia party. The young-er Gudkov says that the lower chamber is home to 93 United Russia deputies who are share-

holders in companies, most of whom could be also suspected of being businesspeople. The politi-cian has been posting his fi nd-ings online. For its part, theKremlin has stated that investi-gations into other deputies are ongoing and that others willfollow Gudkov out of parliament.

Just Russia leader Sergei Mironov said Gudkov will become an aide to a Just Russia deputy and will continue to play a role in the party’s faction in the Duma. “He is an active member of our party and will continue his po-litical activities,” Mironov said. He noted that Gudkov will not be able to take part in plenary sessions, “however, no one can prohibit him from having his viewpoint and making critical statements.”

For Ousted Deputy, Political Becomes Personal

OLGA DORONINARUSSIA BEYOND THE HEADLINES

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03MOST READ

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Russian Health Official Threatens Hamburger and Sushi Banrbth.ru/16835 Special Report

Maria Kolosova and Dmitry Pro-nin became friends when they worked on the same development project. Kolosova was outsourced as an advisor to Uralsib, where Pronin held a top position. They saw at once that they had a lot in common. Both tried to live a healthy lifestyle — Kolosova is a marathon runner and Pronin

Food Russians explore new ways of eating out and eating better, whether grabbing a quick bite at the office or going for a special meal

A company aptly named Healthy

Food hopes to encourage office

workers to eat better — with the

help of in-office vending

machines.

plays amateur sports — and both were interested in starting abusiness.

When the development project at Uralsib was halted, Kolosova and Pronin decided to try and start a business together based on their common interest in healthy eating.

“Dmitry brought a suitcase of products marked as healthy foods from Europe, but many contained mayonnaise, preservatives and vinegar,” Kolosova said. “So I started making up recipes in my own kitchen.”

Kolosova and Pronin named their company Healthy Food and

for the Healthy Food marketing campaign.

The company opened several new cafés, but later had to shut down 20 percent of them due to lack of demand. But even this was part of the learning curve. “We have gained experience and don’t open cafes in the wrong places anymore,” Kolosova said. Today, Healthy Food has 14 successful cafés.

The company started selling food from vending machines dur-ing its fi rst year. Pronin says that vending specialists did not be-lieve they could be successful sell-ing products with a short shelf life from machines. But the part-ners believed that vending ma-chines were an important part of their business plan. They say it is fairly easy to convince an of-fi ce to accept a vending machine,

as they take up a small amount of space. Then, after the office workers are used to the menu, it is easier to convince management to open a café. Now the compa-ny has more than 30 machines, which account for 10–15 percent of Healthy Food’s total income.

Kolosova admits that it is hard to monitor the quality of perish-able items in vending machines. She says the company works with distributors and consumers to ad-dress quality-control complaints. “First, we check the temperature in the machine, on each shelf, then we look at how the quality of foods was checked when it was accepted from the suppliers, and then we offer the dissatisfi ed cus-tomer compensation in the form of our products,” Kolosova said.

One of the key problems is that cottage cheese suppliers fail to meet the contracted 10-day shelf life requirement, and cottage cheese is a major ingredient in the company’s cheesecakes. Healthy Foods has changed cot-tage cheese suppliers 20 times since the business began.

Healthy Food is now hoping to branch out to a broader audience. It has created a café format called, “Cook, Little Pot!” for food courts in malls. The fi rst storefront will open this month. Regular dishes including cabbage soup, ragouts and hot cereals will be cooked and served in clay pots.

ELENA GORELOVAVEDOMOSTI.RU

Moscow’s Newest Health Craze Comes in Glass and Steel

worked on creating lunch options that fi t the label. They wanted to offer a broad range of choices, so they worked on developing low-fat cheesecake along with wraps featuring fresh fi llings of meat, fi sh and vegetables. They replaced mayonnaise with a signature cheese sauce made from Finnish brie and cream, as well as cran-berry and celery sauces.

In January 2009, the first Healthy Food café opened in the Krylatskie Kholmy business cen-ter, home to 10,000 office work-ers. Kolosova and Pronin hired cooks, but Kolosova found that starting a small business takes

more hours than you can pay em-ployees to work. “The cooks went home at night and I had to cook myself and ask my children for help,” Kolosova said. After six months, the partners paid their fi rst wages out of profi ts.

The project required about 10 million rubles ($300,000) in in-vestments during the fi rst year. Kolosova sold her two-bedroom apartment in Moscow; Pronin sold his car, stocks and his Patek Philippe watch.

“Many people don’t feel the need to eat healthy food, so we have to inculcate this idea into the public,” Kolosova said. She began holding regular corporate training sessions on healthy life-styles, giving lectures on food choices and how to incorporate exercise into the workday. This side business laid the foundations

A small piece of a small market

The capacity of the Russianmarket for corporate catering is about $8.25 billion, according to the Sodexo catering company. Of the total, outsourced servicesaccount for $1.85 billion, according to Sodexo analyst Denis Shershnev.The biggest market players inRussia, other than Sodexo, are Cor-pusGroup and Megafoods (which both specialize in industrial facili-ties), CantinaCity (which targets offices), O.M.C., and Compass-Group. Local restaurant owners are also trying to move into this mar-ket.Nearly all the corporate cater-ing market players currently offer healthy options, according to Er-nest Lepsky, general director of ca-

tering firm LanCh, and Shershnev says that the market is growing.Said Shershnev: “Cafés with a healthy-eating concept enjoy a growing demand, but I don’t be-lieve that sales of such foods in vending machines have a future,” adding that machines are not as-sociated with healthy fresh foods, and cheesecake should be eaten fresh.Other experts disagree, saying that there is potential in the con-cept. “Vending machines offering healthy foods are better than cou-rier delivery. You can have snacks more often, which is healthier, ac-cording to nutritionists,” said Yury Balushkin, development director of the Zdorovye (health) magazine.

The Healthy Food company started selling food from vending machines in its first year of business.

It’s fairly easy to convince an office to accept a vending machine, as they take up a small amount of space.

The Healthy Food company has

developed low-fat cheesecake

along with wraps featuring fresh

fillings of meat and vegetables.

The American fast-food chain Quiznos will invest about $4million in the expansion of its brand in Russia with the goal of opening its fi rst restaurants by the end of the year, according to Quiznos Chairman Darrin Stock. The first Russian Quiznos will open in St. Petersburg, andexperts say that if the format proves to be successful in that Northern city, the company should have no difficulties with market entry in Moscow.

Ivan Fedyakov, director gener-al of INFOline, said Quiznosdecided to start its development from the Northwest because the break-even point is difficult to reach in Moscow.

Stock estimated that each new restaurant in Russia will require an investment of $200,000 and that each restaurant will employ between three and 10 people. Daily consumer traffic is expect-ed to be about 350 people, and the average purchase size will be 300–350 rubles ($10–12). Stock emphasized that the company is

Imports Sub chains look for new customers

American restaurant chain

Quiznos plans to open up to 20

branches in Russia by 2014 to

meet the increasing demand for

food on the go.

planning to purchase most of its products from local manufactur-ers for its menu, which features about 30 types of hot sandwich-es along with soups and salads.

“Our goal is to open hundreds of Quiznos restaurants across Russia in 10 years,” Stock said.

The average fast-food purchase size in Russia is 170–350 rubles ($6–$12), but the total depends on the location, marketing policy and the specific offer, said arepresentative of competing sub chain Subway, where customers make purchases for an average of 200 rubles ($8) in St. Peters-burg.

Daniil Somov, managing part-ner of the Retailer publishing house, said that the market for Western fast-food brands is grow-ing and welcoming to new play-ers. However, Ivan Fedyakov said that Quiznos may face difficul-ties in fi nding appropriate space for its restaurants. In 2008–2009, many retail shops gave up their spaces to restaurants, but this trend is now over. Commenting on this challenge, Lyudmila Reva, director of ASTERA consulting, said, “It would be a logical choice for them to develop within large shopping malls. Fast-food oper-ators renting spaces in food courts are able to forecast their custom-er fl ow.”

Quiznos to Take on Subway in St. Petersburg

The Quiznos chain includes more than 4,500 restaurants worldwide.

The Tsyferblat café offers a series of activities to give it an edge in the competition for consumers.

IRINA LAPECHENKOVARBC DAILY

The concept is known in the Rus-sian market as “restaurant +” and its pioneers are Dmitry Itskov-ich and his former business part-ner Mitya Borisov. Their fi rst res-taurant had a bookstore attached. The model has expanded some-what since then. In 2010, Bor-isov and Dmitry Yampolsky opened the Mart Café. Located on the ground level of the Mos-cow Contemporary Art Museum, it brings together a café, book-store, exhibition area, music club and a greenhouse in a single space.

Another “restaurant +” is the Shardam Club at the Central House of Artists, which is devot-ed to children and is a popular place for families featuring good food and the possibility of draw-ing graffiti on the walls or taking part in a scientifi c experiment.

Wine rooms, which often com-bine a shop and a bar, provided the inspiration for such projects as “restaurant + grocery” (Lavka-Lavka) and “restaurant + market” (Farmer Bazaar). LavkaLavka al-lows patrons to taste homegrown produce before they buy. Popular options are goat’s milk in a can at 350 rubles ($11.50) per liter or

A New Twist on Eating OutNevertheless, the owners consid-er their no-frills cafeteria, which caters to people who work in the area, to be the more solid project commercially.

“On the whole, conceptual res-taurants remain a challenging type of business,” said Yulia Mat-veyeva, editor of the FoodService magazine. “If you compare the earnings of a conceptual cinema club and an average Moscow cof-feeshop, the latter wins hands down.”

Some Moscow restaurants look more like social projects than commercial ones. For example, the already well-known restaurant V temnote (“In the Dark”) offers its customers the opportunity to have lunch or dinner in total darkness. Its founder, Igor Medvedev, is an eye specialist and owner of the I-Med holding. I-Med consists of an eye clinic and a restaurant in one building. Medvedev says he does not consider the restaurant to be a real business; rather, it plays a role in integrating blind people into Russian society. All the waiters and bartenders are blind. It also offers free meals to the clinic’s staff. The restaurant serves meals only by reservation, but has three seatings on week-days and four on weekends.

A session at V temnote goes like this. First, in a lighted room, the visitor chooses a menu by color: white has food from all kinds of products, red is for beef, blue for fi sh and seafood, green for vegetarian and yellow for Jap-anese food. After choosing, the guest proceeds to a room in semi-darkness, where he leaves his things and is advised “to trust and not try to peek because you won’t see anything anyway.” After hav-ing the meal, the guests emerge into the light to be told what they had just eaten. The session lasts about an hour and a half and costs about 2,000 rubles ($65). The humanitarian mission — to allow visitors to“feel what blind people feel” — has a tongue-in-cheek element. The restaurant also offers a Dating Certifi cate program, which seats strangers together. “People come here most-ly in search of new sensations,” said General Director Vitaly Smirnov. “Here all the social bar-riers — status, age and appear-ance — come down and the sense of taste becomes more acute.”

CONTINUED FROM PAGE 1IN NUMBERS

7 times a year is the average number of times a Russian visits a café or a restaurant,

according to a recent study by Busi-nessStat.

17.8% is how much the restaurant

business in Russia has grown over the past year.

$65 is what it costs to eat a prix-fixe meal in the

dark at the experimental Moscow restaurant V temnote.

Some Moscow restaurants, such as “V temnote,” look more like social projects than commercial ones.

a kilo of bulb onions “straight from the ground” for 180 rubles ($6). You can also get scrambled ostrich eggs for 1,500 rubles ($50). The Farmer Bazaar project oper-ates as part of a farmers’ support program, but the prices here are higher than at regular farmers’ markets. However, at this bazaar, customers can haggle over the price of giant Sakhalin oysters or a marbled beef steak.

Sometimes a project is theresult of confl icting wishes of its authors. The DOME project (a “restaurant + cinema”) is a case in point. One of the founders wanted to have a pleasant atmo-spheric restaurant, while the other wanted a small cinema for friends, said Artem Kalashian, the proj-ect’s P.R. manager. As a result, the facility has a café seating 60–70 and a projection room with cush-ions for up to 100 people. There is no need to reserve a seat at the cinema; instead, you can order food brought from the restaurant. The minimum order is about $30, but the place is anything but cheap. “Visitors liked the idea of watching a fi lm,” said Kalashian. “Sneak previews and special screenings of fi lms that do not go on general release for some rea-son are particularly popular.”

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While more than half ofRussians (56 percent) areexpecting a second wave of the fi -nancial crisis to hit theircountry, they are not frightened by the prospect, according to a re-cent opinion poll by Romir Hold-ing. Most of those surveyed be-lieved economic turmoil would lead to price rises and lowerliving standards, but they don’t ex-pect mass layoffs or pay cuts.

More than 70 percent of respon-dents are not preparing theirfamily budgets for economictrouble, while a third don’tintend to make any changes to their budgets even if the crisis strikes.

Ready to Go With the Economic Flow

Russians believe a financial crisis is coming, but few are saving more.

ings in a foreign currency was the most common protection strategy (used by 9 percent) and, accord-ing to Romir experts, the preferred method of those with high incomes. Others are preparing for the cri-sis by stocking up on food (5 per-

“We have seen so many revolutions that we’ve become quite adept at handling misfortunes,” said Andrei Milekhin.

Freelancing is still a difficult con-cept for Russian employers to grasp, according to surveys. Arecent study by the Board Solu-tions Consulting Company showed that over the past two years, the number of employers in Russia contracting with out-side workers has increased only by 2 percent. Freelancing as an industry is very young, both in the literal and fi gurative sense of the word. Working on a freelance basis was impossible during the Soviet era, when people without a permanent workplace were con-sidered parasites. As a result, few Russians had the ability to even explore this possibility until 20 years ago, and members of the older generation still find it a strange concept. According to Free-lance.ru, the share of freelancers between the ages of 18–22 is 20 percent while only 7 percent of this age group reports full-time employment. Among people aged 23–26, the statistics are similar — 20 per-cent of them report working as freelancers, while 11 percent of them are employed full time.

Official statistics show that there are only 200,000 freelanc-ers in Russia — just 0.3 percent of the working population. Many experts, however, believe that the actual number of freelancers is several times higher, but that these freelancers choose not to

Labor market A system set up for Soviet-style full employment has a hard time adapting to a more fluid concept of what it means to work

Saving Overall trust in the government may affect the way Russians feel about a possible financial crisis

Studies show that Russian

employers use the services of

freelancers less frequently than

their foreign counterparts, but

this could be changing.

Economic experts predict that a

second wave of the financial crisis

is about to hit Russia, but most

people do not expect widespread

job losses or pay cuts.

Russian Employers Reluctant to Trust Freelancers

While freelancing is a popular work option in many places, it has failed to gain much traction in Russia.

ALEXANDER KILYAKOVRUSSIA BEYOND THE HEADLINES

VALERIYA KHAMRAEVA, MARINA MAKSI-MOVA, ANNA REZNIKOVARBC DAILY

report their status, fearing claims by the tax authorities.

The number of freelancers in the United States and Europe is substantially higher, according to Daria Grevtsova, executive direc-tor at the Center for the Study of Trade Unions, Protest Decisions and Social Peace.

“In the late 1990s and early 2000s, about 30 million people had remote jobs in the U.S. and E.U.,” Grevtsova said. “At present,

according to the different esti-mates, the number of people hav-ing their working places at home is about 55–60 million.”

If the statistics are examined in another way, however, Russia does not seem so far behind the West. In Russia, the share of free-lancers in the I.T. sphere is 35 per-cent of the total labor market, while in the U.S. it is 44–45 per-cent. Figures in the sphere of writ-ing and business services are com-parable in the two countries, and Russia is even ahead of Western countries in some fi elds, such as design.

Natalia Golovanova, head of

the Superjob.ru Survey Portal, says that most Russian company heads are sure that people work better being in the office environ-ment than out of it.

“Thirty percent of employers who do not hire freelancers and 19 percent of those having free-lancers on staff believe that peo-ple who work at home lie down on their jobs. According to only 6 percent of employers, the home environment helps freelance spe-cialists work better than their of-fi ce colleagues because nothing distracts them from the work. The overwhelming majority of em-ployers, 72 percent, believe that even if freelancers work well, they have little chance of being pro-moted because they do not com-municate with the company’s staff and little is known about them.”

Freelance contracts in Russia usually pay people for a particu-lar project rather than by the hour, which protects employers from lazy freelancers, according to Anna Kartashova, head of the Psychological Center at Volk-honka.

“When not being watched, any normal human being tries to do less. In fact, it is a natural human characteristic and it should not be estimated as a bad quality. A worker tries to give less, while an employer tries to pay for the work done at the minimum rate; it is a law of business,” said Kartash-ova. “Thus, if you can control the result of the work and are ready to pay enough for the employee to do the work as required, and if he or she agrees to be paid only when there is a certain result, you can allow this person to work at any distance from the office.”

Few Russians had the ability to even explore the possibility of working as a freelancer until 20 years ago.

Statistics show that there are only 200,000 freelancers in Russia — just 0.3 percent of the working population.

Freelancing in Russia, by the Numbers

Monthly wages, in dollars

Work schedule

Number of freelancers

Higher education

Areas of employment

cent) or durable goods (5 percent).According to the Deposit Insur-ance Agency, Russians have been depositing 5.3 billion rubles every day since the beginning of the year, 30 percent more than in 2011. Total deposits have risen by 8.1 percent in the past six months (to 962 bil-lion rubles).

The remaining 77 percent ofrespondents are doing nothing to protect themselves from poten-tial economic problems. Igor Nikolaev, director of the F.B.K. Company’s strategic analysis de-partment, says this may be part-ly attributed to several factors in-cluding the fact that Russia was not hit too hard by the fi rst wave of the crisis in 2008.

“This raises the question of how much people really trust the state,” said political scientist Iosif Dis-kin, a member of the Civic Cham-ber. Disking believes that Russians are confi dent the government will, in his words, assure they “don’t feel the pain.”

Ecology Artic clean-up aims to restore natural environment

Activists and the Russian

government are working together

to restore a fragile northern

environment damaged by years

of industrial development.

Friendship University in Moscow, will continue restoration work next year as part of Russia’s broader national policy in the Arctic region.

More than 25 percent of the world’s total gas reserves are lo-cated in the area, including at off-shore sites in the Kara Sea, but far more is at stake than oil and

gas. Said Kobylkin, “We must enter the Arctic with science. That’s why we plan to establish an international ecology research center on Bely Island after res-toration work is complete.”

This article was prepared in co-operation with the Yamal Ad-ministration Press Service.

Reclaiming the North

TATIANA SMOLYAKOVARUSSIA BEYOND THE HEADLINES

Despite a low ranking — 120th place — in the 2011 Doing Busi-ness investment ratings and more than $80 billion of capital out-fl ow, Russia does not seem to be a bad option for investors. Ac-cording to an Ernst & Young re-port, last year Russia was the pre-mier destination for investment in Central and Eastern Europe. Whereas foreign direct investment (F.D.I.) worldwide rose 16 percent to more than $1 trillion, F.D.I. into Russia grew 22 percent, up to $53 billion.

According to the report, the country’s most attractive features

Investors Rewards worth the risk in Russia

Russia was the premier

destination for investment in

Central and Eastern Europe in

2011, but concerns remain about

the country’s bureaucracy.

included its natural resources, growing domestic consumer mar-ket and high level of education. However, weaknesses were noted in Russia’s enduring reputation as a country with a difficult en-vironment for doing business. The top three improvements investors would like to see in Russia are more effective legislation, less bu-reaucracy, and better transpar-ency for business regulation.

The survey further revealed that manufacturing remains at the heart of Russia’s appeal, ac-counting for 51 percent of invest-ment projects and 92 percent of jobs created between 2007 and 2011. Russia’s biggest cities, Mos-cow and St Petersburg, account-ed for 42 percent of all projects.

Russia Leads Eastern Europe in F.D.I.

VADIM VISLOGUZOVKOMMERSANT

“The number of those who ex-pect a crisis has risen by almost 20 percent since 2010; thepeople, of course, are no experts, but collective wisdom still exists, and if they feel something, there must be a reason for it,” said Romir President Andrei Milekhin. Refer-ring to the lack of concern about a crisis, he added: “We have seen so many revolutions, disasters, wars and famines in the past 100 years that we’ve become quite adept at handling fi nancial mis-fortunes.”

Oleg Zamulin, dean of thefaculty of economics at the High-er School of Economics, thinks ex-pectations of what economic tur-moil might look like are misguided. “If anything, prices won’t go up,” Zamulin said. “It’s incomes that will come down. Peo-ple will start losing their jobs, and their wages will be cut.”

Yet only 23 percent of those polled were preparing for a new wave of the crisis. Keeping sav-

Volunteers manually cleaned several miles of Bely Island.

This summer, a team of volun-teers spent a month cleaning trash from a 2.3-square-mile area on Bely Island in the Kara Sea, the northernmost boundary of Rus-sia’s Yamal-Nenets Autonomous District. They removed 75 tons of scrap metal and erected a church dedicated to sailors killed during World War II.

The expedition was the begin-ning of an attempt to restore the natural environment after years of industrial development. Ac-cording to district governor Dmi-try Kobylkin, a full cleanup of the island will continue until the area’s ecology is fully restored. Volunteers from various organi-zations, including the People’s

Read more atrbth.ru/18161

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SOURCE: HIGHER SCHOOL OF ECONOMICS AND THE WEBSITE FREE-LANCE.RU

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Succeeding in Russian E-Commerce Requires Deep Pockets http://rbth.ru/17901 Money & Markets

Any Russian law regulating Fatca complaince must take into consideration the existing tax treaty.

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C O N TA C T U S : F o r e d i t o r i a l i n q u i r i e s , p l e a s e , c o n t a c t u s @ r b t h . r u F o r p a r t n e r s h i p o r a d v e r t i s i n g c o n t a c t s a l e s @ r b t h . r u p h . + 7 ( 4 9 5 ) 7 7 5 3 1 1 4

Banks Russian financial institutions expected to cave to international pressure

Russian government authorites

are working on a plan that will

bring the country into compliance

with U.S. legislation against

money laundering.

Russia’s presidential executive of-fi ce has been reviewing the U.S. anti-money-laundering act known as Fatca (Foreign Account Tax Compliance Act) in preparation for accession to the law, which is expected to come into effect on Jan. 1, 2013.

Fatca requires foreign banks holding accounts of U.S. taxpay-ers to enter into special agreements with the U.S. Internal Revenue Service (I.R.S.) stipulating that the banks will monitor such accounts and report on any operations to the I.R.S. Banks in the U.S. have been disclosing information about their clients to the I.R.S. for a long time, and the practice of report-ing on American taxpayers is now to be extended globally. Should banks fail to comply, the I.R.S. promises to levy a 30-percent tax on operations with fi nancial as-sets of U.S. account holders.

To reduce the risks involved in direct agreements between non-U.S. fi nancial institutions and the I.R.S., some countries — includ-ing France, Germany, Italy, Spain, the Netherlands, Switzerland, Japan and the U.K. — have de-clared their intention to enter into intergovernmental agreements with the U.S. regarding their par-ticipation in Fatca. In return, fi -nancial institutions of these coun-tries will be exempt from the 30-percent tax and subject to a simplifi ed reporting mechanism.

Presidential economic adviser Elvira Nabiullina, in consultation with representatives from the Fi-nance Ministry, the Foreign Min-istry, the Central Bank and the Tax Authority, has developed sev-eral options for Russia’s partici-pation in Fatca.

The fi rst option envisions an intergovernmental agreementbetween Russia and the United States, under which Russian banks will enter into separate agreements with the I.R.S. and disclose information on U.S. tax-payers directly. According to Na-tional Payment Council President Andrei Yemelin, this is the best option in view of the tight time-frame, though it is fraught with the risk of violating bank priva-cy laws.

The second possible model also rests on an intergovernmental agreement that would, unlike the previous option, lay the ground-work for centralized disclosure. If the model is adopted, banks will be required to submit all rel-evant information about U.S. tax-payers to the national regulator, which will then pass it on to the I.R.S. In return, the United States pledges to disclose to its partner nations information about ac-

counts opened with U.S. fi nan-cial organizations by their rele-vant taxpaying residents.

The third option, strictly in line with U.S. law, also suggests di-rect agreements between Russian banks and the I.R.S., but is even harder on the banks. Aside from reporting to the U.S. tax author-ities, the banks would be under obligation to deduct a 30-per-cent tax from the accounts of those refusing to cooperate with the I.R.S.

Any Russian federal law reg-ulating Fatca compliance must be based on an intergovernmen-tal agreement with the United States that is in line with the ex-isting tax treaty, said Yemelin.

Said Konstantin Trapaidze,

chairman of the legal association Vash Yuridichesky Poverenny, “The most favorable and com-fortable scenario for Russia would be to combine options. First, we have to go with indi-vidual agreements and work by this scheme until an intergovern-mental agreement between Rus-sia and the United States is reached on centralized transfer of information.” Meanwhile, the banks will have to bear the brunt of the accession anyway, accord-ing to head of fi nancial monitor-ing at SMP Bank Inga Tumasye-va. “Either way, the banks will incur material costs involved in implementing the changes,” .Tu-masyeva said. “They have no choice, though.”

Banks to Keep Clients By Going Along With I.R.S.

Presidential economic adviser Elvira Nabiullina (left) is spearheading Russia’s Fatca compliance effort.

ANASTASIA ALEKSEYEVSKIKHIZVESTIA

Less than 20 percent of all Rus-sians do not use any kind of bank card at all, according to special-ists at MasterCard. Eighty-three percent of Russians receive their salaries through direct deposit, which must be withdrawn with an A.T.M. card. Additionally, 16 percent of all Russians hold cred-it cards, and 12 percent of those polled said they had store-spe-cifi c discount cards. According to the fi ndings of MasterCard spe-cialists, the number of Russians in possession of bank cards rose 11 percent from 2010.

Russians are also becoming more active in their use of debit and credit cards. This year’s poll found that 40 percent of respon-

American computer powerhouse Apple recently registered a com-pany called Apple Rus to handle sales of its products in Russia. The registration means that the U.S. corporation could start di-rectly supplying its products to retail stores in the country as soon as next year. A source close to the electronics retailer said that Apple board members looked for space to house an Apple Store during a visit in Spring 2011, but did not manage to reach a deci-sion. According to the manager of an Apple distributor, it now seems the corporation is likely to start direct sales in 2013, but there are no estimates for when the fi rst Apple Stores will be unveiled.

Between 1996 and 2007, E.C.S. Group was in charge of selling and promoting Apple products in Russia. In 2007, the baton passed to Lanit Group. Today, three-fourths of Apple items sold in Russia are distributed through Lanit subsidiary diHouse. iPhones are supplied to Russian consum-ers through Vimpelcom and M.T.C.

“By registering a legal entity on Russian soil, Apple is taking a serious step with a view to start supplying Russia with its prod-ucts directly,” said Yevgeny But-man, co-owner of the Ideas4re-tail holding. According to Butman,

Credit Recent MasterCard research shows that Russians are using bank cards more actively, which concerns some financial experts

Companies New Apple Rus to handle sales

Russians are known for avoiding

debt and paying it off quickly, but

experts fear this may change as

the option to use bank cards

becomes more widespread.

Industry experts speculate that

by limiting its work with

subsidiaries, Apple will contribute

to the normalization of the

market for electronics.

More Credit, More Spending, More Debt?

ALEXEI KISELYOVKOMMERSANT FM

VLADISLAV NOVYI KOMMERSANT

Growth in Use of Bank Cards in Russia, 2010–2012

dents paid for purchases with plastic cards, as compared to 27 percent the previous year. When asked why they prefer to pay by bank card, 60 percent of respon-dents mentioned convenience, 58 percent said they liked the secu-rity and speed of credit purchas-

es, and 34 percent cited the ad-vantage of being able to shop for goods and services online.

The popularity of bank cards in general bodes well for the fu-ture of credit cards in Russia, ac-cording to Sberbank Director of Client Relations Olga Bakhtina.

“A credit card allows a person to proceed without a moment’s hesitation, without a worry, to have access to a credit account and know only two things: that the credit card bill must be paid on time and that nothing but the card need trouble you,” Bakhtina

Apple Cuts Out the Middlemen in Russia

Apple is taking a path typical of retailers moving into the Russian consumer market: they fi rst work through a Russian partner, then register a local holding. It is pos-sible that Apple Rus will also con-trol iPhone distribution in Rus-sia, says the manager of one of Apple’s distributors, who added that he had heard rumors the cor-poration was not happy with the existing system for distributing iPhones through Vimpelcom and M.T.S. because the operators were more interested in selling iPhones in their stores than on the wider market.

M.T.S. representative Valeria Kuzmenko said her company has yet to discuss changes in the way iPhones are distributed in Rus-sia with Apple, while Anna Aibe-sheva, a spokesperson for Vim-pelcom, was only prepared to say that the operator maintains “a good working relationship” with Apple.

According to a manager of one of the corporation’s distributors, by starting direct sales, Apple will take a cut of the profi t that would otherwise go to the retailers, so it is possible that Apple would consider offering retailers a dis-count depending on their sales results.

Said Danila Vaskevich, man-aging director of electronics chain Belyi Veter, “Samsung and Sony have been selling directly for a long time. If Apple follows their example, the price of electronic goods will become more acces-sible and the market itself will be more civilized.”

3 1 An intergovernmental agreement between

Russia and the U.S. under which Russian banks will enter into separate agree-ments with the I.R.S. and will disclose information on U.S. taxpayers directly to the U.S. tax authority.

2 Russian banks will be required to submit all

relevant information about the accounts of U.S. tax-payers to a national regu-lator in Russia, which will then pass the informa-tion on to the I.R.S. in a bundle.

3 Aside from reporting to the United States

tax authorities, the banks would be under obligation to deduct a 30-percent tax from or even close the accounts of those U.S. ac-count-holders refusing to cooperate with the I.R.S.

OPTIONS FOR

PARTICIPATION

IN FATCA

said. “ The use of credit cards will soon overtake the use of debit cards because credit cards are more convenient. It’s my hope that, in two or three years, none of us will be carrying around more cash in our wallets than is nec-essary to buy lunch.”

However, the dramatic increase in the number of credit cards has a fl ip side, as well. Consumers do not always realistically assess their ability to pay their credit card bill, said Pavel Samiev, dep-uty director of Expert RA, a lead-ing Russian rating agency. Over the past two years, the average sum of a bill paid by credit card has decreased from 2,500 rubles ($78) to 2,200 rubles ($68).

“Of late we’ve been hearing a lot of fairly alarmist forecasts concerning the fast growth of credit card volumes and of retail crediting in general,” said Sami-ev. “As a rule, retail is a hit with banks. It is the most interesting segment from the point of view of growth potential. But accord-ing to some prognoses, this may lead to an abrupt increase in de-layed payments and to a substan-tial deterioration in payment dis-cipline, thereby adding problems to those that still exist in the wake of the fi nancial crisis.”

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TIME TO EMBRACE THE BUBBLEVladislav

Inozemtsev OGONIOK MAGAZINE

In recent years, Russia has been claiming to be spearheading a reform of the global fi nancial system. I believe the time has

come to ask ourselves in all sin-cerity if the critics of the current global fi nancial regime can actu-ally come up with something bet-ter that also addresses all the rec-ognized problems with the system. First, it is important to identify the main complaints against the global fi nancial system. Here is a short list: In recent years, the cap-ital and derivative markets have suffered from bubbles that, when they explode, can have a cata-strophic effect on the real sector; developed economies live mired in debt paid for by developing countries; economic imbalances keep growing, while consumption is skewed in favor of the “golden billion”; and fi nally, certain coun-tries rule the world economy thanks to their ability to issue re-serve currencies accepted by the rest of the world. Many economists in developing countries, Russia in-cluded, call this an abomination, but is it really true?

At the end of 2011, the com-bined global capital market cap-italization was valued at $47 tril-lion, or 67 percent of global G.D.P., compared to $2.9 trillion, or 34 percent, in 1960. Admittedly, as a result of the 2000–2002 and 2008–2009 crises, this indicator shrank in the developed countries alone by $6.3 trillion and $10.2 trillion, respectively, which is a lot. But the global economy did not col-lapse. It did not contract in 2000–2002 at all — in fact, it grew by 7 percent in the U.S. and by 5.3 percent in the EU. During the 2008–2009 crisis, the economy shrank by 3.8 percent in the U.S. and 3.7 percent in the E.U., but no fi nanciers started jumping from their office windows. It seems that today the infl ated fi nancial sec-tor serves more as a safety valve for the real economy, protecting it from overheating, which is

FIXING CORRUPTION AN EASY TASK

RUSSIA’S ECONOMY READY TO LEAP FORWARD

Valery

Fedotov VZGLYAD NEWSPAPER

Felix

GoryunovSPECIAL TO RBTH

Russian bloggers are again engaged in a fi erce discus-sion on how to beat cor-ruption. The main consen-

sus is that the situation is hopeless. Bribes have been taken since time immemorial, and if businessmen did not bribe officials, there would be no corruption, so they have only themselves to blame.

In my opinion, this is utter rub-bish. Overcoming corruption in Russia is realistic and even fair-ly easy — given the will. All it takes is to introduce a small change in the law: to remove cul-pability from the bribe-giver if

A report released in August by the International Mon-etary Fund bears the in-t i m i d a t i n g t i t l e :

“Russia Needs Deep Reforms toMaximize Its Growth Potential.” The fund projects that Russia’s G.D.P. will grow 4.5 percent in 2012 and 3 .9 percent in 2013,assuming that oil prices remain stable and the government takes steps to reduce its dependence on natural resource exports andattract foreign investment. Even so, compared with the near-depression state of the economies of developed countries and slow-downs in China, India and Brazil,

he cooperates with the investiga-tion and gives an honest account of all the details of the crime. Then the problem will start to take care of itself right before our very eyes.

At present, corrupt officials are protected by guaranteed mutual liability. They can demand any kind of sum from you, but if you go and tell the police, then you can be jailed for being an acces-sory. So you have to pay up and keep your mouth shut.

If, on the other hand, giving a bribe ceases to be a crime, many businessmen who have paid the required kickbacks would gladly report the incident to the author-ities. This is because few of them pay these bribes of their own ac-cord. Most are victims of extor-

Russia is a bright spot on the gloomy world economic scene.

However, it seems that Presi-dent Vladimir Putin does not fi nd much to celebrate in his country’s economic situation. The trauma of Russia’s rapid transition from boom to bust in 2008–2009 is still fresh, and the protests of the last six months have shown the fail-ure of post-Soviet Russia’s social and economic policies in a new light. Putin has demonstrated that he is serious about changing the country’s economic direction by naming Sergei Glazev as his eco-nomic adviser. Glazev, a renowned politician and economist, is a de-termined opponent of the neolib-eral ideology and practices that have been prevalent in Russia in the last 20 years. Glazev asserts

tion. Once they succumb, they are guilty of bribe-giving.

The person who takes the bribe and the person who gives the bribe are in very unequal posi-tions. The former has his official status, wields great power and has the entire state machine be-hind him. The latter just wants to get rid of the problems creat-ed by the former. While the for-mer benefi ts from the crime, the latter has to part with his hard-earned money. How can they be on the same footing? Yet the law treats them the same.

The experience of other coun-tries shows that the introduction of such legal principles can be very effective. Organized crime was rampant in the United States

that these policies have made the country a natural resources col-ony of the West, resulted in a tril-lion-dollar loss of capital and blocked the creation of the kind

of sound banking and investment system needed for funding diver-sification and renovation. In Glazev’s opinion, Putin has set a course for restoring Russia’s eco-nomic sovereignty by creating eco-nomic development agencies and

in the middle of the 20th centu-ry. American law enforcers were well aware of the problem, but could do nothing about it because the mafia was hardly likely to lynch their own. However, after

the 1970 Organized Crime Con-trol Act decriminalized the ac-tions of mobsters who testifi ed against their fellow criminals, the situation quickly improved. At

state corporations and by restor-ing state control over oil and gas revenues, along with other mea-sures for stimulating investment and innovation.

The unfolding global econom-ic crisis, Glazev believes, presents a challenge and a chance for Rus-sia not only to escape dire conse-quences of the global crisis, but even jump on the wagon of a new tech-driven future. Its core clus-ters are the nano-, bio-, informa-tion and communication technol-ogies that in a matter of three to fi ve years are likely to become the major drivers of the global econ-omy. Russia’s economic success depends on how fast it can acti-vate its potential and develop these industries. In an article en-titled “How to Saddle the Wave,”

present, the mafi a in the U.S. has been almost completely destroyed, or at the very least has been driv-en deep underground. The prob-lem has practically been solved.

The experience of Hong Kong is even more relevant to Russia. In 1974, people who called a spe-cial hotline to report acts of cor-ruption were absolved of any re-sponsibility in the crime, even if the caller was himself implicat-ed. The Hong Kong government also stopped considering corrup-tion due to causes beyond the per-son’s control a crime. This cate-gory would include, for example, a businessman who has to bribe an official to get a permit to start his business. By that time, 94 per-cent of the government sector was

published in Russian daily Neza-visimaya Gazeta, Glazev pointed out the need to concentrate the efforts of the national fi nance and investment systems and apply state administrative and legisla-tive leverage to the creation of core clusters for the new techno-logical mode. Despite its current-ly underdeveloped economic po-tential and the threats of oncoming global crisis, Glazev writes that Russia is in a position to accept this challenge. A system of strategic planning of diversi-

fi cation and innovation and their coherent governance will not only ensure the country’s economic sur-vival; it will create prerequisites for a Russian economic miracle and not less than 8 percent an-nual growth.

riddled with corruption, accord-ing to independent research. Today, Hong Kong ranks 12th among the world’s least corrupt countries, ahead of Japan, Ger-many and the U.K.

I am convinced that these mea-sures would prove equally effec-tive in Russia. If a person who has given a bribe can safely re-port the fact to the police, then corrupt officials will tremble with fear, for the next knock on the door just might the authorities catching up with them. And be-fore we know it, talk of gratitude and interest on the part of offi-cials will fade out.

It is stupid to say that nothing depends on us and that some fun-damental problems cannot be solved. This is the path of losers. Any problem can be solved, given the political will.

Valery Fedotov is a member of the United Russia party.

Glazev’s ambitious proposals have little in common with the deep reforms suggested by the I.M.F. And his ideas are hardly shared by those in the Russian government and business elite who are happy with the existing order of things. So it rests most-ly with Putin and his men to ac-cept or reject Glazev’s road map. But here it is worth remember-ing that the countries that rode high on the last technological wave—Japan, South Korea and later China—benefi tted from both government sponsorship and heavy investment by private busi-nesses. Despite all its drawbacks, the Russian state-oligarchy cap-italism has similar opportunities for a miracle economic perfor-mance—it possesses the institu-tional and intellectual potential for a leap forward in technolog-ical development. The global eco-nomic situation that aggravates Russia’s dependence on world markets makes such development a matter of economic survival.

Felix Goryunov is a Moscow-based economic journalist.

Vladimir Putin has demonstrated that he is serious about changing the country’s economic direction.

A bribe-taker and a bribe-giver are in very unequal positions, but the law treats them the same.

Russia’s state-oligarchy capitalism possesses the potential for a leap forward in technological development.

However unfair the existing financial system might seem, any alternative to it would be less efficient.

clearly a benefi t rather than a dan-gerous fl aw.

It is true that developed econ-omies live on credit, but this is not necessarily a bad thing. Debt is a quintessential growth tool. From 1960 to 2010, the combined

indebtedness of America’s house-holds and corporations increased 37.2 times (unadjusted for infl a-tion), whereas its G.D.P. rose 28.3 times in nominal terms and 73.4 million jobs were created.

I argue that the modern fi nan-cial system is the best thing that can be invented globally today. This is evidenced by the fact that today’s economy lacks anything remotely similar to the crises of 1907–1908, 1929–1932 or 1973–1974. The existing fi nancial sys-tem allows infl ation of huge bub-bles of fictitious assets, whose

devaluation does not ruin the real economy simply because the money shown on account state-ments never actually existed in the fi rst place. Creation of this un-secured money supply supports consumption and encourages de-velopment of manufacturing, while the international imbalanc-es that arise open up new pros-pects for emerging economies.

Bear in mind that the countries that issue the reserve currencies virtually cannot default on their obligations because they have promised to pay investors back

with more of the same currency units they print. And should in-vestors wish to exchange their money for assets located in those countries, prices will rise and bal-ance will be restored.

If an attempt is made to regu-late the money supply on a glob-al scale, the world economy will return to living within its means. Consumption in the U.S. and Eu-rope will shrink by at least the amount of their trade defi cits — by $1 trillion annually. The econ-omy will contract by 4–5 percent a year for several years in a row.

Capital markets will lose more than half their valuation and com-modity prices will fall by between a half and three-quarters. Gov-ernments will no longer be able to support their companies with the ease they do now.

Throughout the 2000s, a peri-od of the greatest imbalances and hardest fi nancial shocks, emerg-ing economies were growing at an average annual rate of 6.2 per-cent compared to 2.1 percent in developed countries. During that period, the combined value of commodities bought annually by the first world from resource-based economies rose from $400 billion to $2.1 trillion. Developed countries themselves created fewer than 10 million jobs, while emerging economies created more than 230 million. The financial shocks caused no losses to bank depositors in developed countries, unlike what happened in the early 1930s. Additionally, their G.D.P.s and the level of consumption did not decline. The unfair and un-manageable fi nancial system that took shape after 1971 has, in ef-fect, helped developing countries rise industrially and allowed de-veloped countries to maintain their growth rates and become hubs for technological innovation. Also consider this: failures and problems haunted mainly those countries that tried to make their currencies quasi-convertible and to peg them to the U.S. dollar — be it Asia in 1997, Russia in 1998 or Argentina in 2001. Freedom to manuever is worth more in the modern world than any advan-tages of stability.

However unfair the existing fi -nancial system might seem, any alternative to it would be less ef-fi cient. Whichever way you look at it, the economy is a system based on efficiency and not on fairness. And whenever anybody tries to destroy it for the sake of contrived ideas, efficiency tends to evapo-rate but fairness never arises.

Vladislav Inozemtsev is director of the Center for Post-Industrial Studies.

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John

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sons to go along with their har-vest seasons.

Most intriguing of all is a small article at the end of the book, “How to Perform the Play.” This essay by Leonid Subbotin, who wrote the play with Vladimir Mass, is — if we hold our tongues in our cheeks for awhile — a treasure trove of methods for seeking “new forms.”

“The main thing while work-ing on this play,” Subbotin declares fl atly, “is not to be embarrassed. That’s the main thing. If what needs to be done is clear, then do it boldly. If it’s not clear, it’s ab-solutely pointless to shout and wave your hands.”

Is this the Stanislavsky method condensed into two phrases?

Subbotin continues: “You must

understand the meaning of every word and pronounce each word faithfully. This is called ‘fi nding the proper intonation.’”

Finally, the author concludes, “Besides the characters’ clear pro-nunciation and behavior, their ac-tions must also be clear, expres-sive and understood by the spectator. You must avoid frequent, small, incomplete actions. Let’s take the scene where the angry peasants attack Alexei. This should not be done in a way that chaos reigns on stage. The task on stage is not to attack Alexei, but to show how he was attacked. Spectators love seeing action on stage. When people’s thoughts and emotions on stage are transformed into action and movement — that is theater.”

Subbotin and Mass wrote at least six such playlets together, all addressed to peasants, as did numerous others, whose full names cannot always be ascer-tained — A.S. Abramov, Kutin, Nikiforov, which nobody now re-members. It makes you wonder: What will happen to the innova-tive theater we rush to see today?

provided plots for ballets like “The Nutcracker,” is reinforced by his interests in philosophy and music.

Professor Neil Cornwell, who translated and introduced these stories, is a specialist in Odo-evsky’s work; one of his more re-cent comparative studies argues that Odoevsky’s stories are path-ways into various genres of mod-ern fi ction. This appealing con-cept is strengthened by the fact that Odoevsky personally knew the giants of Russian literature including Leo Tolstoy, Fyodor Dostoevsky and Alexander Push-kin. Odoevsky was a prince, sen-ator, scientist, educationalist and critic. He curated a major muse-um and what is now the Russian State Library. Reading these di-verse stories provides a glimpse of his Faustian universe.

The problem with setting up such grand expectations is that the stories themselves are occa-sionally disappointing. Moments of psychological insight are di-luted by erratic narratives. The children’s story of a town inside a musical snuff box, representing Odoevsky’s most enduringly pop-ular genre, seems particularly bland. The “Alice in Wonderland” delight of magical childhood dis-coveries is tempered by intrusive-ly didactic elements about per-spective and mechanics.

A winding, satirical tale called “The Black Glove” starts very promisingly with a man whose trip to England leads to dogmat-ic, Benthamite ideas of practical-ity, “incomprehensible to a Rus-sian person,” but loses its way a little in the third generation of characters. These minor quibbles do not detract, however, from Odoevsky’s achievement.

The translator and publisher have done Western readers a ser-vice in rescuing this important writer from obscurity.

Anton Chekhov is the one who put it on paper in its simplest form and, thus, made it something

of a cliché: theater needs new forms.

In “The Seagull,” the young Treplev utters a phrase to that effect as he prepares to show his family and friends a play he wrote. It’s a weird little drama that makes his mother, the fa-mous provincial actress Arka-dina, mockingly mutter some-thing about decadence. But the notion that theater cannot sur-vive without change is eternal, and it has been possible to hear Treplev’s words about “new forms” uttered in every new age since Chekhov wrote “The Seagull” in 1896.

In the second decade of the 21st century, we are living through an era when the search for new languages, new ap-proaches and a new aesthetic is particularly intense. There is nothing new about being new, however.

I recently picked up a little booklet published in 1924 called “On How the Sexton Got in Trouble, or, On How Peasants Can Get Water for Their Plowed Field.” It is a short play written to be performed by peasants in post-revolutionary Russia in the fields or, perhaps, in barns. Chances are there had never been theater in the fi elds and barns of Russia’s farms before this time. If there had been, it certainly was not done like this.

Red Virgin Soil publishers put out a whole series of booklets that were intended to help the government bring theater and new ideas to the people. The fi nal page lists other plays available and concludes with the infor-mation that these publications may be purchased in “all book-stores and in railway stations.” I guess someone assumed, or, perhaps, hoped, that peasants heading out to the fi elds by train would pick these little books up and start planning theater sea-

Publishing a book of early 19th-century short sto-ries by an aristocratic Russian polymath may

seem a strange decision at fi rst glance, but this collection show-cases Vladimir Odoevsky’s ver-satile skill as a storyteller. It in-cludes ghost stories and thrillers, biographical studies and satires. “The Little Town in the Snuff Box” represents Odoevsky’s tales for children, while the title story about an approaching comet en-gagingly combines a mini com-edy-of-manners with proto–sci-ence fi ction.

This bewildering range ofembryonic genres is clearly meant to demonstrate the au-thor’s wide-ranging importance in literary history. A century be-fore Yevgeny Zamyatin’s “We” laid the foundations of the dys-topian tradition, here is a fable that (briefl y) envisages an apoc-alyptic scenario with global im-plications. The people of earth lament, “their pale faces … il-luminated by a crimson fl ame.” Odoevsky can also do pre-Dos-toevskian psychodramas of guilt and confession, or semi-Tolstoy-an social tales.

Comparisons are not confi ned to Russian authors. He shares motifs with a range of past and future writers, especially the Ro-mantics; his status as “the Rus-sian Hoffman,” after the Ger-man author whose novellas

THEATER PLUS

BIBLIOPHILE

Today’s Theater News Is Tomorrow’s Oblivion

Russian Prince Who Planted Seeds of Modern Fiction

We are living in an era when the search for new languages, approaches and a new aesthetic is particularly intense.

TITLE: TWO DAYS IN THE LIFE OF THE TERRESTRIAL GLOBE AND OTHER STORIESAUTHOR: VLADIMIR ODOEVSKYPUBLISHER: ONEWORLD CLASSICS

The imposing façade of the Metropol Hotel, a stone’s throw away from the Bolshoi Theater, is encircled by a quotation from Friedrich Nietzsche: “And then again, the same old story! When we have finished building our house, we suddenly notice that we have learned something in the p ro c e s s .” T h e f iv e - s t a r, 424,000-square-foot complex fea-tures 362 rooms and is one of the most significant architectural landmarks of the modern era. Re-cent guests of the hotel have in-cluded King of Spain Juan Car-los I, late Korean leader Kim Jong-il, Chinese Prime Minister Hu Jintao and Sharon Stone. During its heyday in the mid-20th century, the hotel accommodated equally distinguished guests such as Bertolt Brecht, George Bernard

Real Estate Moscow’s oldest hotel, the Metropol, has been sold to the Azimut chain

Shaw, Mao Zedong and John Steinbeck. Nevertheless, there was barely any haggling to be seen when the Moscow authori-ties sold the hotel for $275.6 mil-lion to Alexander Klyachin, owner of the Azimut Hotel chain.

Construction on the Metropol began in 1889, and it took six-and-a-half years to build. It stood

out not only for the originality of its design, but also for its state-of-the-art facilities, including hot water, refrigerators and special ventilation systems. In the early 20th century, the Metropol’s many restaurants were frequented by celebrity actors, as well as com-poser Sergei Rachmaninoff. The Boyarski restaurant was Raspu-

tin’s favorite place to dine and go on his famous binges. In 1918, after the Soviet government moved to Moscow, the hotel turned into a residence of the new regime, and Nietzsche’s quote was extended to include Vladimir Len-in’s words: “Only the dictatorship of the proletariat is capable of liberating mankind from the pres-sure of capital.” Unlike the orig-inal inscription, this phrase is still clearly visible.

In the late 1920s, the Metropol again became a world-class hotel. Legend has it that Sergei Yesenin fell to his knees and fi rst professed his love for Isadora Duncan in the lobby of the Metropol. In 1993, Michael Jackson stayed in the hotel and offered to buy a lamp with a bear-shaped handle. The hotel boasts more than 800 an-tique items, and some of them have alarm systems attached, just like museum exhibits. The new owner will be responsible for pre-serving the cultural legacy of the hotel. Klyachin may own the the building itself, but the furniture and paintings will remain in own-ership of the state.

History to the Highest Bidder

The Metropol has housed some of the 20th century’s biggest names.

DARIA GONZALESRUSSIA BEYOND THE HEADLINES

Moscow’s oldest hotel, the storied

Metropol, went to the highest

bidder in a recent auction. The

change of ownership, however,

does nothing to change the

hotel’s history.

More Than Glamour to Russia’s Diva in JeansOne of opera’s most recognized

faces — and voices — Anna

Netrebko knows that there is

nothing glamorous about the

hard work required for success in

the theater and at home.

Almost a decade ago, Anna Ne-trebko sang at Maly Zal as part of the fi rst Moscow Easter Festi-val. She was already a much-talk-ed-about starlet then: lithe and charming on stage. But today, she is a familiar face on billboards all over the world and a name that guarantees a sold-out show. Like many hardworking stars confi dent and balanced in their popularity and success, her man-ner is unaffected, gracious and straightforward. She doesn’t have to prove anything to anyone, or pretend to be what she’s not — she is Anna Netrebko.

She seems to have it all —popularity and support back in her homeland Russia, despiteinfrequent performances there. She obtained Austrian citizen-ship several years ago (to make traveling easier), and enjoys a solid base at the venerableWiener Staatsoper.

Most important, she is now the face of the Metropolitan Opera. This month, she opens the sea-son in the role of Giannetta in Donizetti’s comic opera “L’Elisir d’Amore,” her 13th production at the theater since her debut in 2002. Last season also opened with Netrebko, in the title role of Anna Bolena.

“I know there is a certain image about me,” she said, and indeed she’s not the typical opera sing-er, photographed beautifully in fl oor-length gowns. Gracing the pages of glossy magazines such as Vogue, her photos don’t differ much from those of a fashion model or actress, wearing every-thing from jeans to haute cou-ture. “But we didn’t create this ‘diva in jeans’ just because it sells. It happened naturally. I was very young when all this started, and I love glamorous photo shoots… I didn’t see anything bad in that; I had some endorsement deals, also cool. Why not? Somehow, it all happened: this glamour stuff, Chopard and everything.”

She evidently relishes all that comes with being a celebrity, but she has always resisted going into pop music, although she knows it’s “cool” and would make her even more glamorous. “Just not my thing,” she said, although she did do a song with Russian pop star Philipp Kirkorov last year. “Dima Hvorostovky gave him my number and so he called me and I said, ‘O.K., send me the song.’ And I listened to it and actually liked it. And I mean, it doesn’t cost me anything — one hour in a studio, that’s it.” Making the music videos and getting award-ed was fun, she said, but, drop-ping into Russian, added, “These pop singers, they all lip synch!”

She speaks volubly and fl uent-

ly in English, and her son, Tiago, is picking up three languages — Spanish from his Uruguayan fa-ther, the baritone Erwin Schrott; Russian from his mother; and English from New York, where the family lives. “We’ll stay here for several years. I want Tiago to study here,” Netrebko said. “Here

there’s so much to do — swim-ming pool right in the building, special fi tness clubs and so on. I travel all the time and sometimes have to leave him because of school. It’s a torture for me. But if I know he’s busy all day doing interesting things, I’m calmer. In Vienna he would just see his nanny all day, maybe another nanny sometimes. It’s not good.”

Being a mother has made life

very difficult, she continued in a lower voice. Always torn between family and career, she said she understands the decision of some singers never to have children “be-cause to have a kid means so many problems, so much money to spend — so much, it’s unbe-lievable.” You have to work hard to keep a balance, “because life gave me so much, I cannot just say, I’m fi nished with my career, now I’m doing my family. I think I will be punished if I do that.”

Now 41, her versatile and light voice has shifted in recent years, and she is making a foray into more spinto repertoire, which de-mands a slightly heavier, more dramatic voice. Next season, she will star in the Met’s new pro-duction of “Evgeny Onegin” as Tatiana, a suggestion made by Peter Gelb, the theater’s general manager. After that, she has plans for Leonora (“Il Trovatore”), Manon (“Manon Lescaut”) and even Wagner–Elsa in “Lohengrin,” which she said is one of her dreams. She’s also recording a CD

of Verdi arias with Gianandrea Noseda in Torino, and sang Lady Macbeth — a very dramatic, heavy soprano role sometimes even sung by mezzo sopranos.

After “L’Elisir d’Amore” at the Met, she will take to the road doing concert performances of Tchaikovsky’s “Iolanta,” an opera little known outside Russia, which she hopes people will like, al-though it may not be the kind of fl ashy gala concerts her fans are used to.

Audiences outside New York can see Netrebko perform in “L’Elisir d’Amore” via the Met’s “Live in HD” broadcasts, which screen in movie theaters around the world. The live broadcast will be on Oct. 13, but the performance will appear in reruns for several weeks after that.

HER STORY

Born in Krasnodar, Anna Netrebko moved to St. Petersburg as a teen-ager to study at the conservatory there. She made her operatic debut at the Mariinsky at the age of 22, singing the role of Susanna in “Le Nozze di Figaro” with the Kirov Op-

era. Known for her interpretation of Russian dramatic roles, such as Na-tasha in “War and Peace” and Lyud-mila in “Ruslan and Lyudmila,” Ne-trebko is in demand as a performer and has appeared on the stages of the world’s leading opera houses — including Covent Garden and La Scala. She has a son with her fiancé, Uru-guyan baritone Erwin Schrott. The family splits its time between Vien-na and New York.

NATIONALITY: RUSSIAN

CITIZENSHIP: AUSTRIAN

AGE: 41

1

2

3

4

1. Opening the 2012 Met season

as Adina in “L’Elisir d’Amore.”

2. Performing as Violetta in Gi-

useppe Verdi’s “La Traviata.”

3. As Mimi in Giacomo Puccini’s

“La Boheme.”

4. Solo concert at the Mariinsky.

AYANO HODOUCHIRUSSIA BEYOND THE HEADLINES

Opera For the second year in a row, the Met will open its season with Anna Netrebko

After “L’Elisir d’Amore,” Netrebko will take to the road doing concert performances.

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Skolkovo to Benefit from APEC Agreementsrbth.ru/18231Feature

Exploring the Orthodox Work EthicOctober 17

“I want to have my own start-up... create something new,” said SkTech student Vyacheslav Sabirov.

SkTech, created in partnership with M.I.T., hopes to become one of the world’s great research universities.

Education Russian university hopes to take on the world’s leading institutions of higher education with help from M.I.T.

Skolkovo Institute of Science and

Technology opens with an

inaugural class of 21 carefully

selected graduate students

hailing from 14 Russian regions.

As the new school year getsunderway, one of Russia’s new-est universities, the SkolkovoInstitute of Science and Technol-ogy (SkTech) is welcoming its fi rst class. The school, affiliated with the Skolkovo Innovation Center outside Moscow and created in partnership with the Massachu-setts Institute of Technology (M.I.T.) hopes to become one of the world’s great researchuniversities. Around 200 young people applied to become mem-bers of the fi rst class in SkTech’s three-year Master’s program.Forty-one finalists from 15Russian regions were invited to Skolkovo to participate in aselection weekend in May. For three days, students were divid-ed into small groups and evalu-ated by Skolkovo Tech senior staff, founding faculty fellows and M.I.T. alumni. The students were scored on interpersonal, techni-cal and leadership skills, as well as their creativity.

“There were a lot of interest-ing assignments,” said Bogdan Uzbekov, who received his Bach-elor’s degree in applied mathe-matics and physics from Moscow Institute of Physics and Technol-ogy. “For example, we engineered wind turbines that produced elec-tricity. Then, we took measure-ments of which wind turbine had produced higher voltage. We also discussed some philosophical problems like the infl uence of so-cial networks on society and ex-periments on animals.”

The Students’ English language skills were also evaluated through Toefl exams and during group ex-ercises. At the end, 21 students from 14 different regions were admitted into the inaugural class.

“The students were a fabulous group of fi rst-year applicants who exceeded our expectations in

their technical knowledge, cre-ativity, and sincere passion to make an impact in the world,” said SkTech director of students Bram Caplan.

The university’s president, Ed-ward Crawley, added that this fi rst class of students, “will have a unique opportunity to install lasting impact at Skolkovo Tech. Most importantly, they will be the class that shapes the culture and curriculum for years to come.”

The program began in August at M.I.T. with a four-week inno-vation workshop focused on tech-nological innovation and team-based project work. Afterwards, in September, the students began a year of study at one of several world’s leading universities:Imperial College of London, Hong Kong University of Science and Technology, M.I.T., or the Swiss

Federal Institute of Technology in Zurich. They will spend their last two years in Skolkovo.

“When we return to Skolkovo, we will be working in close col-laboration with leading compa-nies who, as expected, will give us sponsorship and involve in their projects,” said Marina Mo-rozova, a St. Petersburg State University graduate who will be

focusing on I.T. at SkTech.While some students have only

vague ideas of what they would want to do with this education, others already have specifi c proj-ects in mind. For example, Vy-acheslav Sabirov, who received his degree in multichannel tele-communication systems from Moscow Institute of Electronic Technology, said that he wants

to engineer a radically new type of telephone.“I would want to have my own start-up,” he said. “I want to create something re-ally new. I expect we will be en-couraged to do this in Skolkovo.”

The U.S. Ambassador to Rus-sia, Michael McFaul, who met with the students before their de-parture for M.I.T., predicted an exciting future for the first Skolkovo Tech class: “If you put yourself into a new environment, it suddenly can change your ho-rizons. You are going to meet new people. You are going to be ex-posed into new ideas. That’s going to create new networks.”

Said SkTech student Dmitry Vasilyev, who will study energy science, “I have very high expec-tations for this program. The start has already been extremelyinteresting.”

Looking for the Best and Brightest

Before leaving for a month-long stay at M.I.T., SkTech students met with U.S. Ambassador Michael McFaul.

Russia’s pavilion, entitled “i-city,” was designed by a team from the Skolkovo Innovation Center.

EKATERINA ZABROVSKAYARBTH

" As I look at this first group of students, I feel that Skolkovo Tech is really start-

ing to feel like a university. With the development of our research centers and the continued progress in establishing the Center for Entre-preneurship and Innovation, these students have the opportunities to excel.

" If you put yourself into a new environment, it suddenly can change your horizons. You

are going to meet new people. You are going to be exposed into new ideas. That’s going to create new networks.

THE QUOTE

BramCaplan

MichaelMcFaul

DIRECTOR OF STUDENTS, SKOLKOVO INSTITUTE OF

SCIENCE AND TECHNOLOGY

AMBASSADOR OF THE UNITED STATES OF

AMERICA TO THE RUSSIAN FEDERATION

is the average age of the members of Sk-Tech’s first class of graduate students.

of those selected for the M.I.T.-Skolkovo program are male, while 24% are female.

of those admitted into the first class at Sk-Tech already hold a Master’s degree.

22 76% 9%THE NUMBERS

Skolkovo Represents Russia at Venice Biennale

QUESTIONS & ANSWERS

At this year’s prestigious Venice Architecture Biennale, which opened Aug. 29, Russia is repre-sented exclusively by a team from Skolkovo, the country’s futuris-tic city-in-progress. Elena Ship-ilova of Russia Beyond the Head-lines spoke to Grigory Revzin, member of Skolkovo’s architec-ture-planning council, about what Skolkovo hopes to achieve at the exhibition.

This year’s Venice Architecture

Biennale kicked off Aug. 29. What

is Russia showcasing?

This year we will present the Skolkovo Innovation Center proj-ect. The display is truly amazing — our architects were trying to create a space that would bal-ance between the physical and the virtual. We have never had such a sophisticated projectbefore.The pavilion has two stories. The ground fl oor showcases a Soviet phenomenon — closed science towns that were inaccessible to ordinary citizens. The visitors not only get a glimpse of the past, but also see a life that very few people lived in the Soviet Union. On the second fl oor, they see the modern, accessible Skolkovo In-novation City, as if contrasted to the Communist secrecy of closed towns.

Which projects and architects

competed for the right to represent

Russia this year?

The Ministry of Culture believes there should always be some large, national-scale project to represent Russia at the Venice Bi-ennale. For instance, in 2004, when the reconstruction of the Bolshoi Theater and the Mariin-sky Theater was launched, we presented the display “Two The-aters.” Although the Biennale is a modern arts exhibition and ar-chitectural monuments are, as a rule, not allowed there, the re-construction project gave us that rare opportunity.The problem is that there are few nationwide projects that can compete at the exhibition — Sochi-2014, Russky Island, Greater Moscow, reconstruction of central St. Petersburg and Skolkovo. The Innovation City has brought together Russian and foreign professionals, and we thought it would be exciting to make use of this blend.

Why are most national projects car-

ried out by foreign architects? Take

Skolkovo, where the infrastructure

is being developed by Japanese,

Swiss and French firms. Are there

no good Russian specialists?

Russian architects were “fed” ex-clusively by the former mayor of Moscow, Yury Luzhkov. Our fed-eral authorities have always opted for Western specialists. I am always telling them that we have talented architects, but they say: No thanks, we have not heard of any of them. For instance,

when [former president] Dmitry Medvedev chaired the guardian-ship board of the Pushkin Mu-seum in 2009, he wanted to as-sign the reconstruction of the museum to the British architect Norman Foster, simply because he knew the name. I tried to ex-plain to him that Foster is just a brand under which other people work, that the maestro spends just about seven minutes a year on each of his projects! Why en-courage this approach? But I did not manage to change his mind.I became a member of the Skolkovo Foundation city plan-ning council because I wrote an article about engagement of for-eigners in the project, even though such projects should be used to promote the national ar-chitecture school. The situation enraged me — as if Russian cit-izens were not allowed to vote for their own president! As a re-sult, they proposed that I hold a tender among Russian architects. Boris Bernaskoni has almost completed the first Skolkovo building, the Hypercube; the SPEECH Bureau of Choban and Kuznetsov is designing the D1 district; Grigorian’s Meganom Bureau is working on the D4 dis-trict; and numerous young Rus-sian architects have been award-ed contracts to deve lop residential quarters. Incidental-ly, this is another reason why I wanted to showcase Skolkovo at the Biennale.

You are sometimes very critical of

how the state approaches architec-

tural projects. Why?

We tend to do many things half-heartedly. There is not enough consistency and accuracy, so many excellent initiatives get corrupt-ed. They decided at the econom-ic forum in St. Petersburg that $1 billion of budget funds would be allocated annually during the coming decade in order to recon-

struct the city center. This is good money, but I am afraid it will not do the city any good.There is another difficult situa-tion in St Petersburg, surround-ing the Gazprom tower. Econom-ically, it is a crucial thing for the city: you would have to be a fool to use such an attractive project to cause trouble between the mu-nicipal authorities and residents. Alexei Miller, the Gazprom

C.E.O. and a very intelligent man, had the idea that the 300-meter skyscraper would represent his company most adequately in the low-rise northern capital. They had him change his mind and shift the construction site, but at what cost?

St. Petersburg was in danger of

losing its status as a Unesco world

heritage site because of the Gazprom

tower, wasn’t it?

That was not the worst problem. The Moscow Kremlin almost lost this status many times, for exam-ple, after the Palace of Congress-es was built there, yet it did not suffer much. What is worse is that we often consciously destroy our historic legacy, allowing our build-ings and city layouts to be ruined.We should not use Unesco as a bogeyman all the time. We need to deal with our problems inde-pendently.

Russia Takes Jury Prize at Biennale

For the first time in the history of the Venice International Architec-ture Biennale, which has been held every other year since 1980, the Russian pavilion has won a prize from the competition jury. The pa-vilion, entitled “i-city,” was awarded a special mention. The Russian en-try was designed by a team from Skolkovo, the science and innova-tion center outside Moscow.

“We feel proud and we are happy with the work done, looking for-ward for further successful partici-pation in architectural competitions of such a high level,” said Skolkovo Foundation President Viktor Veksel-berg, as quoted by the press ser-vice. The theme of this year’s exhi-bition, which will run until Nov. 25, is “Common Ground.”

RIA Novosti

Prepared byElena Shipilova

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