Come Together, Get Ahead

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STRATEGIES FOR BUSINESS IN MOSCOW

Come together, get ahead

A PROPOS

Prince Yuri Dolgorukiy would have been extremely easy to explain – New Moscow has a lot more space, a pleased with today’s developments: the city he founded lot more land, a lot more greenery and forests. Living in a in 1147 on the banks on the Moscow River continues to house that is next to a real forest and river is the dream develop and blossom. He would be particularly happy to of many city residents. learn that Moscow considerably expanded three years Before anything else, New Moscow means new op- ago – a change that has put the Russian capital in the portunities. Although the current economic climate is top six biggest cities on the planet. quite challenging, and although a general plan for New July 1, 2012 is going to go down as an important day in Moscow has yet to be confirmed (the plan is to be final- the history of Moscow. On this day, the city’s total area ized before July 2016), one thing is clear: adding new more than doubled. Two districts (Troitsk and Sherbinka), territories to the city has opened up a world of new op- along with 19 urban and rural settlements from the Len- portunities for the entire metropolitan area. insky, Naro-Fominsky and Podolsky districts of Moscow Don’t take our word for it – take a look at some figures Oblast, were added to Old Moscow. The city’s total that help illustrate how grandiose the city’s developments population grew by 240,000 people. are. According to the plans drafted by city authorities, up The news of Moscow’s expansion was met with mixed to 100 million square meters of new real estate will be reactions in the city. According to a poll conducted erected in New Moscow before 2035, along with 53 km shortly afterward, 41 percent of Muscovites supported of metro (the first metro station, Salarievo, will be open the decision, 41 percent opposed the expansion, and 18 in December-January) and 700 km of roads, about 1,200 percent remained undecided. These results are fairly km of high-speed tram rail and 9 transport interchange easy to understand. The very idea of New Moscow was hubs. Moreover, there will be several major business and confusing to many people: Why do we need it? What will innovation centers that will employ a total of over be the outcome of these changes? What will happen to 1 million people. In other words, the new territories are the city? becoming hotspots for both Russian and foreign investors. Many foreign investors have already joined the project. But a lot of time has passed since, and here are the results of a more recent poll, which was conducted by In short, expanding Moscow’s borders prompted the the Russian public opinion research center: 50 percent of development of the city and will eventually help turn it Muscovites approve of the expansion, and just 30 per- into a polycentric modern mega-city. cent are still against it. It is obvious that public opinion has shifted: the idea of New Moscow seems like a good idea to a lot more people now. There is another shocking Sergo Kukhianidze figure: 40 percent of Muscovites residing in Old Moscow are ready to relocate to the new territories! This is also Editor in Chief CAPITAL IDEAS Founder: Department for External Economic and International Relations of the Government of Moscow Address: Tverskaya, 13, Moscow, 125032. Moscow Official Ph: +7 (495) 633-68-66 Fax: +7 (495) 633-68-65 Unity of ideas – E-mail: [email protected] business success www.dvms.mos.ru “Italy is one of Moscow’s key trade and economic Editorial staff: partners,” said Mayor of Moscow Sergey Sobyanin during Editor-in-chief – Sergo Kukhianidze his opening address at the business forum “Unity of Production crew of the edition: Elena Egorova (deputy editor-in-chief), Ideas – Business Success: Russia and Italy,” which Tatyana Akimova, Gennady Charodeev, Vladimir Dolmatov, took place in the middle of October at the EXPO-2015 Evgeny Khokhlov, Sergei Levin, Marina Ogorodnikova, Anastassia Paloni, exhibition in Milan. Dmitry Sokolov, Anna Tomkins 6–11 CAPITAL IDEAS STRATEGIES FOR BUSINESS IN MOSCOW

Publisher: Moscow Center for International Cooperation 12–19 CEO: Igor Tkach Address: 105005, 68/8, build.1, Baumanskaya str., Moscow, Russia Moscow Official Phone: +7 (499) 267-46-56 E-mail: [email protected] NEWS General Partner: National Review Ltd EXPO REAL 2015: Moscow, the land CEO – Sergei Oposhnyanskiy of opportunity Phone.: +7 (495) 784-69-71 In the beginning of October, Munich hosted the 18th E-mail: [email protected] International Trade Fair for Property and Investment. Consulting – Sergei Anikanov, Evgeny Khokhlov The Russian capital was represented at the fair by an Design – Robert Saifulin exposition organized by the Moscow Department of Photo editor – Victoriya Oposhnyanskaya Foreign Economic Activity and International Relations Page layout – Alexander Saifulin (DVMS). Assistant – Nadezhda Ratanova Who is catching up with Europe? Distribution – "Trans-Media" Ltd Сapital's business life was very fruitful in November: Acknowledgements to: the conference for chairmen of foreign Chambers of PHOTO – www.mos.ru, www.dvms.mos.ru, ITAR TASS Agency, RIA-Novosti, Commerce and Trade was held, along with the business Getty Images Russia, companies and organizations, represented in the issue. forum “Moscow-Israel 2015: Challenges, Decisions, If you wish to get new issues of Capital Ideas, please, apply to: [email protected] Prospects.”

The magazine is registered with at the Federal Authority of Legislative Control in Mass Media and Tokyo is ready to invest in the Cultural Heritage Protection. Media registration certificate ФС77-53716, issued April 26, 2013. Russian capital All reproduction permitted only with the Editor’s permission and reference to ‘Capital Ideas’. Mayor of Moscow Sergey Sobyanin and Governor Distributed free of charge of Tokyo Yoichi Masuzoe signed a memorandum of Published with support from the Department for External Economic understanding and cooperation during a Moscow and International Relations of the Government of Moscow delegation business trip to Tokyo

Circulation : 7000 Signed into print 30. 11. 2016 Face to Face

New Moscow will be Moscow Global attractive to investors Consultations Going into business? for a very long time Concessions for Do it in Moscow! Vladimir Zhidkin, the Head of the Department for the Development of professionals 37 New Territories of the City of Moscow Receiving a Russian work permit for highly answered our questions in an exclusive qualified foreign specialists has now become interview with Capital Ideas. considerably simpler Moscow in words 20–27 36 38–39

28-29 City’s graph Key areas of integrated urban planning development of new territories

30–32 Moscow Global From total chaos to smart order The capital recently hosted the 5th Annual Urban Forum: “Moscow as a Dynamic Megacity: flexible management practices.”

33–35 City’s graph Creating places of employment Moscow’s ranking

January-March 2016 CAPITAL IDEAS 3 Nothing Ventured Nothing Ventured

Moscow Global Smart lighting for The crisis in Russia is I would not be smart cities a temporary phenomenon Light can be used for much more than Philippe Pegorier, the Chairman of the AEB Board, a diplomat if I weren’t decoration. “Architectural lighting is an has been living in Russia for several decades. He important component of a city’s brand speaks fluent Russian and truly understands the an optimist that can help attract investments and ins and outs of doing business in the country. In his Hannu Himanen, Ambassador tourism,” says Natalia Neverskaya, interview with Capital Ideas, Mr. Pegorier talked Extraordinary and Plenipotentiary Head of Government and Public Affairs, about his life in Moscow and about how the AEB of Finland in Russia answers questions Corporate Communication, Philips has dealt with the more challenging periods that of Capital Ideas in an exclusive interview Lighting, Russia and CIS. have faced the Russian market. 40–43 48–51 56–58

44–47 52–54 60–62 Nothing Ventured Nothing Ventured Our Interview We’re here to stay WIKA: business with Obama envies Crisis, sanctions…seems like it’s German precision Putin’s power a challenge to find anybody in business who is not, in one way or another, scared Oleg Goncharov is the General Director “The sanctions against Moscow don’t of these two words. Kai Reichert, the CEO at WIKA MERA. He has been working have a time limit at all, in my opinion. of Fraikin Russia, is not easily spooked. in international business for over They remind me of the Jackson-Vanik “Starting a company during a crisis is an 25 years and has a clear understanding amendment,” said the legendary advantage,” Mr. Reichert said during an of how to set up and develop journalist Melor Sturua in an exclusive exclusive interview with Capital Ideas. the business of an international interview with Capital Ideas. corporation in Russia. 64–65 Moscow Vocabulary

4 CAPITAL IDEAS January-March 2016 Neighbors

Bookshelf In spite of everything, mutual interest has not subsided Life&leisure Making perfect Riga successfully hosted Days of Moscow Teri Lindeberg, founder and CEO of 72–75 Let's go! Staffwell, is a remarkable woman. She You don’t have to book a trip abroad to knows all ins and outs of doing business Our interview go skiing or snowboarding in the winter. in Russia. At least she wrote a great There are a lot of places close to Moscow book titled Making Perfect, that is I’m learning Latvian where you can not only hit the slopes, about what employees want from their Alexander Veshnyakov, Ambassador Extraordinary but also relax with your whole family. employers. Here’s the extract from the and Plenipotentiary of the Russian Federation to Capital Ideas has selected the best ski Teri’s book. Latvia sat down for the interview with Capital Ideas resorts near Moscow. 66–68 76–77 88–90

69 78–81 92–96 Nothing Ventured Travel Food&Drink The way to investment The secrets behind Cooking with soul is through the stomach the Kremlin stars Who said that the story of the famous Normandy-Neman Aviation Regiment The Russian Capital Hosts Moroccan This year marks 80 years since the five-point is over? Today, it continues in the Festival stars replaced the two-headed eagles atop very center of Moscow. There’s just of the towers of the Moscow Kremlin. Today, another turn in the plotline! these stars are among the most well-known 70–71 symbols of the Russian capital. Few people know, however, the long story of how these This and That stars ended up on the towers. How did Anna Karenina meet count Vronsky? 82–87 The average American will always respond Life&Culture to the question “How are you?” with “Great!” A Russian, on the other hand, will Fatal attraction or tango never give a one-word answer – a Russian will tell you, in detail, exactly how they are nights doing that day. Why? The time before the New Year can be hectic, and we seldom have time to enjoy the beautiful things in life. This is a shame, because there are a lot of interesting events happening in Moscow at the end of December. Even after the holidays, the city’s cultural life continues to brim with life.

January-March 2016 CAPITAL IDEAS 5 MOSCOW OFFICIAL MILANO 2015

Unity of ideas – business success “Italy is one of Moscow’s key trade and economic partners,” said Mayor of Moscow Sergey Sobyanin during his opening address at the business forum “Unity of Ideas – Business Success: Russia and Italy,” which took place in the middle of October at the EXPO-2015 exhibition in Milan.

6 CAPITAL IDEAS January-March 2016 Unity of ideas – business success

The event was attended by Minister of the Moscow Govern- and Russia. The purpose of the forum is to help create modern ment and Head of Department for Foreign Economic Activity manufacturing enterprises, form expert groups in order to or- and International Relations (DVMS) Sergey Cheryomin, Am- ganize cooperation in the spheres of logistics and technology, bassador Extraordinary and Plenipotentiary of the Russian Fed- organize scientific and educational events, as well as attract eration in the Republic of Italy and the Republic of San Marino private investments to priority projects. Sergei Razov, Head of the Department of Trade, Industry and Tourism of Milan Franco D’Alfonso, Chairman of the Board of Sergey Sobyanin visited the Russian pavilion at the internation- Directors at General Invest Vincenzo Trani and other officials. al exhibition, which was located front and center and was one of the most popular pavilions at the event. The forum was also attended by dozens of leading Italian construction, architecture, transportation and logistics companies, “I am happy to see you at our forum. The Russian pavilion here along with Russian and Italian universities. Professionals in the at EXPO has been visited by millions of people. This speaks to food industry, construction and urban planning, transport in- the fact that there is a lot of mutual interest between our two frastructure and information technology will discuss issues rel- countries,” the Mayor of Moscow pointed out. Over the past evant to bilateral cooperation related to the development of few years, Italy has consistently been one of Moscow’s top four business ties and direct contact between businessmen in Italy partners in terms of trade volumes. Last year, trade turnover

January-March 2016 CAPITAL IDEAS 7 MOSCOW OFFICIAL

amounted to almost $7.5 billion. In spite of the recent changes tourists after the devaluation of the ruble,” Sergey Sobyanin on the international political arena, Moscow continues to ef- said. There are also upsides in this for the production of goods, ficiently cooperate with our Italian partners. the cost of which has decreased compared to imported products. “Of course, this kind of active bilateral cooperation has produced concrete results. Today, Moscow is open to investments Forum participants also pointed out that business ties between across different sectors of the economy. As you know, our city the two countries continue to develop rapidly in spite of the has serious competitive advantages to offer. I will name just sanction against Russia. “Crises come and go. This crisis, which a few: high-quality, affordable manufacturing, office and retail has resulted in tensions between Russia and the West, will also spaces,” the Mayor of Moscow said. He specified that Moscow pass. Meanwhile, national interests remain the same, as do the has been in the leading position in Europe in terms of new real great traditions that were established through decades of mu- estate volumes, especially when it comes to new office and tually beneficial cooperation between Russia and Italy,” said manufacturing spaces. The Russian capital also doesn’t suffer Ambassador Sergey Razov. from a lack of quality manufacturing, office and retail spaces that are actively used by Italian companies. “After the Days of Moscow were held in Rome and Milan, the whole year was defined by the slogan ‘Made with Italy,’ which “There are a lot of qualified professionals in Moscow and labor reflects Moscow’s new approach to Italian investments and does not cost as much. About a million students study at uni- Italian business: emphasis is placed on the establishment of versities and colleges in the city – the best educational institu- joint enterprises and technology transfer,” said head of the tions in the country. Access to a big retail market is also impor- DVMS Sergey Cheryomin during his speech at the forum. “A tant. The population of Moscow is 12 million people. Plus, there great example of this is the launch of the Delimobil car sharing are 25 million people in the metropolitan area and 40 million system in Moscow. The idea was first presented by the Italian people in the Central Federal District,” Sergey Sobyanin said. side in May of last year at the Days of Moscow forum in Milan There is an opportunity to implement major development proj- and implemented just one year later with support from Italian ects in Moscow. The capital introduces about 9 million square investors. Investment volumes will total 1 billion rubles before meters of new real estate annually. the end of 2015, which is about 20 million euros,” the minister said. “Of course, tourism has always been a major sphere of cooperation for us. The majority of Russians who have been abroad In the sphere of construction, one of the main projects that at- have visited Italy, have gone to Rome and Milan. A lot of Italians tracts Italian investments is the reconstruction of the Dinamo come to Moscow every year. The number of tourists in Moscow stadium, which is carried out in cooperation with VTB Bank exceeded 16 million people last year, and I think this number and Codest – the project’s general contractor that implements will continue to increase because of domestic tourism, and also complicated technical solutions in the erection of the multipur- because hotels and services have become more affordable for pose recreational center in the city of Moscow.

8 CAPITAL IDEAS January-March 2016 The forum also hosted the conference entitled “Potential of nomic Policy and Development Maksim Reshetnikov, Minister the ‘Made with ITALY’ Italian-Russian cooperation,” which was and Director of the Department of Trade and Services Alexei dedicated to cooperation between Moscow and Milan in the Nemeryuk, Head of the Moscow Department of Science, Indus- economic sphere. The participants discussed how attractive trial Policy and Entrepreneurship Oleg Bocharov and Chief Ar- Moscow is for Italian investors and talked about prospects for chitect of the City of Moscow Sergey Kuznetsov. further bilateral cooperation. A discussion of the key aspects of cooperation in the sphere of Discussion participants included the VP of the Moscow Cham- innovation took place as well. Topics included developments in ber of Commerce Suren Vardanyan, Minister of the Moscow the biomedical sphere, medical equipment, energy efficient and Government and Director of the Moscow Department for Eco- IT technologies, as well as residential and road construction.

January-March 2016 CAPITAL IDEAS 9 MOSCOW OFFICIAL

Mayor of Moscow Sergey Sobyanin and Mayor of Mayor of Moscow Sergey Sobyanin and Mayor of Astana Milan Giuliano Pisapia. Adilbek Zhaksybekov.

The event was attended by representatives from the Moscow mous Province of Trento Trentino Sviluppo, Democenter-Sipe Higher School of Economics, the Moscow Institute of Physics Foundation, and Doxy. and technology, the Moscow State University of Design and technology, as well as Moscow’s leading technoparks. Moreover, Bauman Moscow State technical University signed a tripartite agreement on the development of technological in- A number of agreements between Moscow technoparks and novation with the Italian University of Genoa. Italian manufacturing companies, as well as contracts between leading research centers, were signed at the forum. One such One of the most important events during EXPO 2015 was the agreement was a protocol on cooperation between ICE (Ital- mayor summit that was organized by the Municipality of Milan. ian Trade Promotion Agency) and the Moscow Department of The summit took place on October 15-16 at the Royal Palace of Science, Industrial Policy and Entrepreneurship. The document Milan (Palazzo Reale). The summit was attended by heads of was signed by head of the Department Oleg Bocharov and foreign cities, international organizations, experts, analysts and president of ICE Riccardo M. Monti. representatives from leading international media outlets.

The agreement to place manufacturing equipment of an Italian A food policy pact between international capitals and major cit- company at the All-Russian Design and Research Institute of ies was also signed during the forum. Metallurgical Machine-Building named after A.I.Tselikov (VNI- IMETMASH) was signed by General Director of VNIIMETMASH Mayor of Moscow Sergey Sobyanin took part in the mayor Alexander Pirozhenko and his colleague from BonettiCostruzi- summit. “The issues we are considering today are extremely oniMeccaniche S. r. l. Mario A. Bonetti. important, and they are important to our city as well. Moscow is a major consumer of food. We sell 12 million tons of food in Moreover, an agreement between a resident company of Stro- our city annually. Several major and thousands of small enter- gino technopark and the Italian company Frastema S. R. L. was prises that supply the city with the products we need operate signed. According to the document, a medical equipment man- in Moscow,” the mayor pointed out. ufacturing enterprise is to be opened in Moscow. The agreement was signed by the CEO of R-Optics Andrei Yakovlev and He brought up the fact that Moscow is not an agricultural re- President of Frastema S. r. l. Stefano Sonnino. An agreement gion, so products have to be purchased in other Russian regions on cooperation between Strogino technopark and ComoNext or abroad. Proper food supply is an important component of life research and technology park was signed as well. in the capital, much like it is for any other mega-city.

Within the framework of cooperation between Moscow tech- “Not a single big city can afford to depend on one or few supply noparks and foreign partners, Stroyexprom signed agreements channels. This is especially true when it comes to imports. City with a number of Italian companies: Agency of the Autono- authorities need to be in charge of information and geographi-

10 CAPITAL IDEAS January-March 2016 cal distribution of food supply. If need be, we need to help busi- Several more centers like this are to be established in the capital nesses find new suppliers,” Sergey Sobyanin said. in the near future. As Sergey Sobyanin pointed out, city authorities support the development of all retail formats – from big Over the past three years, the share of imports on the Moscow chains to small outlets. This is why over 100 weekend fairs in market has dropped by almost a third. City authorities pay spe- residential areas in Moscow are held on a regular basis. No less cial attention to the establishment of a special infrastructure than 50% of stands at these fairs are occupied by farmers and for the food products market. gardeners.

“A good example of this is that the Government of Moscow re- “The Moscow Government agrees with the approaches to en- cently initiated the establishment of a major logistics center FOOD suring food safety that are outlines in the city policy pact on CITY, with capacity of about 700,000 tons of food products per food product supplies. We all have to make an effort to make year. Just one year after opening, the food center is carrying out sure our city residents have access to healthy and high-quality the distribution of food products supplied to Moscow from 52 re- food products regardless of income level,” the Mayor of Mos- gions in Russia and 26 foreign countries,” the mayor added. cow stressed. ■

MILANO 2015 FEEDING THE PLANET ENERGY FOR LIFE

January-March 2016 CAPITAL IDEAS 11 MOSCOW OFFICIAL EXPO REAL 2015: Moscow, the land of opportunity

In the beginning of October, Munich oscow presented relevant investment hosted the 18th International Trade projects in the sphere of territorial expansion and infrastructure solutions, primar- Fair for Property and Investment. The ily related to transportation development, urban space development, architectural Russian capital was represented at Minnovations and the improvement of urban environ- the fair by an exposition organized by ment and standard of living for residents. the Moscow Department of Foreign The international exhibition Expo Real has been held in Munich every year since 1998. The exhibition brings Economic Activity and International together high-ranking government officials, repre- Relations (DVMS). sentatives from construction companies, architectural bureaus and banks, as well as developers, investors, experts and specialists from all over the world. The exhibition is one of the largest investment forums company Knauf is also actively operating on our in the world and contributes to the establishment of market, and the launch of a Wolf System prefabri- international cooperation in this field. cated housing line is to take place in Omsk Oblast in the near future.” The Moscow Delegation was headed by Deputy Mayor for Urban Development and Construction of Marat Khusnullin talked about the latest develop- Moscow Marat Khusnullin. The delegation included ments in the construction sector in Moscow: “Over Minister of the Moscow Government and Head of the past five years, over 40 million square meters of Department for Foreign Economic Activity and In- real estate have been build in Moscow, and over $20 ternational Relations (DVMS) Sergey Cheryomin, billion has been invested in transport infrastructure. Minister of the Moscow Government and Head of Our Bavarian colleagues account for a good chunk of the Department of City property Vladimir Efimov, these investments. We have developed a good rela- Head of the Moscow Department of Science, In- tionship over the past 18 years and we are ready to dustrial Policy and Entrepreneurship Oleg Bocharov, continue to support and develop this partnership.” Deputy Chairman of the Moscow City Duma Andrey Metelsky and other officials. As part of the EXPO REAL 2015 business program, the stand organized by the Moscow Department of For- The opening ceremony was attended by the Minister eign Economic Activity and International Relations of Construction Industry, Housing and Utilities Sector hosted a number of events. Mikhail Men, Deputy Mayor for Urban Development and Construction of Moscow Marat Khusnullin, Head Participants of the briefing meeting entitled “Cur- of DVMS Sergey Cheryomin, Russia's Consul General rent Investment Opportunities in Russia” discussed in Munich Sergey Ganzha, Head of Bavarian Chamber the topic of cooperation and shared their experiences of Commerce and Industry Eberhardt Sasse and Rus- of working with foreign investors. The event was at- sian business representatives. tended by the Commissioner for the Protection of the Rights of Entrepreneurs in the city of Moscow Mikhail Mikhail Men gave the opening address, in which he Vyshegorodtsev and regional managing director for talked about expanding the partnership between Europe, Russia and the CIS Maarten Vermeulen. Russia and Germany in the construction sector: “More and more German companies are doing During his speech at the briefing, Deputy Manager at business in Russia. A Horsch Maschinenbau man- the Department of Foreign Trade and International Re- ufacturing center was recently opened in Lipetsk lations Anatoly Valetov pointed out that the Moscow Oblast, for example. Horsch’s investment volumes government is interested in attracting new investors as in Russia have reached €15 million. The Bavarian well as support those who already work in the capital.

Note from Capital Ideas: Moscow’s exposition at EXPO REAL 2015 in Munich presented the accomplishments and plans of the Russian capital in the sphere of construction. Over 40 million square meters of real estate have been erected in Moscow over the past five years. The Moscow stand consisted of a 209 square meter exposition, which included a special zone for holding conferences, round tables and seminars. The Moscow exposition included relevant investment projects implemented in Moscow by government and commercial organizations. These are projects that contribute to improving the standard of living for the general population and preserving the city’s cultural heritage, including the project on the development of coastal areas around the Moscow River as well as the establishment of a campus for students of the Moscow State University of Mechanical Engineering.

Sergey Cheryomin visited the Dusseldorf stand, where he held talks with Lord Mayor Thomas Geisel. January-March 2016 CAPITAL IDEAS 13 MOSCOW OFFICIAL

“We don’t separate investors in Russians and foreigners; investors and is implemented in a timely fashion,” the they have equal rights. Just recently we adopted a new department head said. Investors have a total of over law at the federal level that allows us to quickly regulate 170 transport interchange hubs to choose from. relations between city, federal and municipal organizations and private investors,” Anatoly Valetov noted. Round table participants talked about the procedure for granting land under a concession agreement for During the round table discussion entitled “Clusters: the development of road transport infrastructure in new approach to developing territories,” Head of the Moscow, issues of state support, mechanisms for at- Moscow Department of Science, Industrial Policy and tracting extra-budgetary sources of financing, tech- Entrepreneurship Oleg Bocharov said that no Euro- nological innovation, as well as international experi- pean country currently generates the type of income ence in the development of transportation hubs. produced by Moscow real estate. This is why all of the main investors are concentrated in two capitals. Minister of the Moscow Government and Head of “Today, Moscow assumes virtually all of the risks that Department for Foreign Economic Activity and In- may arise because of political conflicts or economic ternational Relations Sergey Cheryomin and Liepzig’s conditions or, for example, because electricity prices Mayor for Economic and Labour Affairs Uwe Albrecht have gone up. In my opinion, this a great example of discussed the development of bilateral cooperation, real support for investors,” Oleg Bocharov said. expansion of direct business contacts and exchange of experience in the sphere of attracting foreign in- The Moscow stand also hosted the round table “Trans- novations and investments at the Moscow govern- port Infrastructure in Moscow: potential for development’s stand. ment.” Minister of the Moscow Government and Head of the Department of City property Vladimir Efimov Sergey Cheryomin also visited Dusseldorf’s stand, was the main speaker at this event. “Transport inter- where he held talks with the Mayor of Dusseldorf change hub projects in Moscow can be revised to suit Thomas Geisel. The two sides discussed ways to de- the interests of investors after they are officially ap- velop partnerships between Moscow and Dusseldorf proved,” he said, “If necessary, if the facility needs to be across the spheres of education, healthcare, social used for a different purpose, we are ready to consider policy, development of city infrastructure, culture and the proposal with the planning and land commission in sports, as well as the implementation of a bilateral co- order to make sure that every project is of interest to operation program. ■ Who is catching up with Europe? In terms of the capital's business life, The fact that Israeli business also seeks to expand its presence in the Moscow region was highlighted dur- November was probably the most fruitful ing the Moscow-Israeli forum. “We have every reason month for Moscow: the conference to believe that we will be able to significantly increase for chairmen of foreign Chambers of our trade turnover volumes with the Russian capital in 2016,” said Zvi Heifetz, the new Israeli ambassador Commerce and Trade was held, along to Russia told Capital Ideas. with the business forum “Moscow-Israel Sergey Cheryomin talked about current investment op- 2015: Challenges, Decisions, Prospects.” portunities in Russia at both forums. According to the Minister, the city will require a lot of work – from the he main objective of these events is to intro- construction of roads and transport interchange hubs to duce representatives of Western and Eastern the development of new public spaces. Cheryomin also business communities with current invest- talked about other projects that may be interesting to ment projects in Moscow, as well as with investors: the development of Moscow River embank- new preferential terms available to those ments, the reconstruction of parks, and the establish- Twho do business in the Russian capital. ment of sports and recreation infrastructure. “In spite of certain economic challenges that are re- The Minister also said the decision to establish a med- lated to the crisis, the capital of Russia continues to ical cluster in the city with the assistance of foreign develop rapidly. We remain one of the most attrac- experts has already been made. Cheryomin invited tive mega-cities in the world for investors,” said Min- Israeli companies to participate in this project and es- ister of the Moscow Government Sergey Cheryomin. tablish local manufacturing in Moscow.

According to Association of European Business CEO Round tables continued the work of the economic Frank Schauff, who participated in the Moscow con- forum. They were attended by politicians, environ- Minister of ference for chairmen of Foreign Chambers of Com- mental scientists and representatives of the Israeli the Moscow Government merce and Trade, there are thousands of European business community. Solomon Mikhailov presented Sergey Cheryomin, companies operating in the Russian capital. Suffice Hotelo and GoTechVision projects on power conser- Head of the it to say that the city’s top trading partners include vation in the tourism sector. Israeli Trade and Germany, Italy, France, Great Britain and Switzerland. Economic Mission Mark Kaner India and Israel are not far behind. The Moscow Department of Foreign Economic Activ- and the Israeli ity and International Relations (DVMS) was the or- Ambassador to Alexis Rodzianko, President of the American Chamber of ganizer for both forums. ■ Russia Zvi Heifetz. Commerce in Russia, confirmed the statements made by his European colleague. In an interview with Capital Ide- as, the businessman said that not a single major US company has exited Moscow – all continue to participate actively in the Russian market. Businessmen who have been working in Russia for 20-30 years have a particularly thorough understanding of the situation at hand.

“We have companies in Moscow that have been working here since before the collapse of the USSR, and even prior to that,” Rodzianko said, “Recently, for example, I attended Caterpillar’s celebration of their 100th anniversary on the Russian market. The Ameri- can company has been here since the times of Tsar Nicholas II, and continues to do well in Putin’s time. They aren’t complaining – they’re flourishing.”

January-March 2016 CAPITAL IDEAS 15 MOSCOW OFFICIAL Tokyo is ready to invest in the Russian capital

Mayor of Moscow Sergey Sobyanin “You have to live here for a minimum of ten years in order to see the most interesting places in Tokyo and and Governor of Tokyo Yoichi try all of the world-famous Japanese dishes” – these Masuzoe signed a memorandum are the words that kick off just about every Japanese tourist guidebook. This October, Mayor of Moscow of understanding and cooperation Sergey Sobyanin and the Moscow Government delegation condensed this tour into just two short days. during a Moscow delegation business trip to Tokyo During their time in the Land of the Rising Sun, Sergey Sobyanin and members of the Moscow delegation did a lot more than hold a series of official talks and meet with heads of big business in informal settings. They also actively participated in a business forum, visited

Governor Masuzoe assured mayor Sobyanin that the Japanese are ready to uphold friendly relations and cooperation. There aren't many cars on the roads in Tokyo early in the The crest of Tokyo represents the sun radiating energy in six morning - residents prefer to take the metro to work. directions.

the Tokyo Traffic Control Center and toured the fa- capitals of our countries have been marked by solid mous Hamarikyu Gardens. The mayor himself even business relations over the past ten years. Suffice it got a chance to participate in a traditional tea drink- to say that there are over 360 Japanese corporations ing ceremony. operating in Moscow. As a result of their cooperation with Russian companies, turnover for these enterprises Tokyo has the world’s largest metro economy. If this amounts to no less than $7 billion annually. In reference mega-city were a separate state, it would place 15th to this figure, Governor Masuzoe said that he is “ready in terms of GDP – ahead of Australia, Turkey, Pakistan for the development of friendly relations and mutually and Indonesia. The city is located on an area of 2,188.67 beneficial cooperation with the Russian capital.” square kilometers and houses between 14 and 22 million people (depending on which source you use). The guests from Moscow enjoyed the warm reception that was organized for them by employees of the Traf- Tokyo is a paradoxical combination of congestion and fic Control Center, which is administered by the Metro- diversity, of chaos and overcrowding. There is a sea of politan Police Department. The Japanese managed to building huddled closely together like furniture that has convince the guests that the city authorities achieved been shoved into the corner of the room and left there significant results in reducing traffic jams. This was- ac for a long period of time. When the streetlight turns complished with the help of a unique computer sys- green, there are so many people trying to cross the tem that allows the authorities to monitor road traffic street that they run into each other, especially during in real time, displaying it on a huge 4.5mX24m screen. lunchtime. The locals sometimes joke that even dogs “This is like the set up we have in the air traffic control are forced to wag their tails up and down, instead of center,” one member of the delegation noted. side-to-side, because of how crowded the city is. “We were presented with interesting figures: in 95% All big cities have issues with traffic jams, and Moscow of cases, Tokyo residents opt for public transportation is no exception. Governor Yoichi Masuzoe’s advisors for their commute to work. The city was able to ac- must have informed him of Moscow’s traffic manage- complish this over a period of 20-30 years. But we have ment problems before Sergey Sobyanin’s visit – how to act much faster in Moscow,” said Maksim Liksutov, else does one explain the fact that the governor men- Deputy Mayor of Moscow and Head of the Depart- tioned the two cities face similar challenges during ment of Transport and Road Infrastructure Develop- the visit? “It is my understanding that Moscow is in- ment of the City of Moscow, explained to Capital Ideas. terested in resolving the issue of traffic jams. We are well familiar with this problem. We are ready to share He also noted that Moscow utilizes more advanced our secrets in order to help you tame this dragon,” To- technologies for collecting and analyzing traffic con- kyo’s governor said to Sergey Sobyanin during their gestion data. Mr. Liksutov pointed out that the traffic meeting. He also invited members of the Moscow del- load on the roads in Tokyo amounts to just 70%-80% egation to visit the Tokyo Traffic Control Center. of that in Moscow.

In general, in spite of the absence of a peace treaty “Whatever the case may be, there are less traffic between Russia and Japan, relations between the two jams in Tokyo. The Japanese accomplished this by

January-March 2016 CAPITAL IDEAS 17 MOSCOW OFFICIAL

"There is a lot of potential in cooperation between Moscow and Tokyo, and not all opportunities have been tapped yet," says Russia's Am- bassador to Japan Yevgeny Afanasyev (center).

developing the commuter railway system, the metro projects in the Russian capital. The construction of and fairly strict regulations for car ownership,” the new metro stations has become one of the most at- Deputy Mayor of Moscow said. tractive projects in this regard. The Moscow Govern- ment plans to set up at least 169 new transportation According to Mr. Liksutov, the cost of parking in To- hubs and plans to use the experience accumulated by kyo is higher than it is in Moscow. The Japanese also our Japanese partners. have another strict regulation: you can’t register a car in your name if you don’t also own or rent a parking “Ensuring that foreign investments are protected by space near your house. the authorities has rekindled the interest of foreign partners in investing in Russia and Moscow,” Sergey “These are very strict regulations. But I want to point Sobyanin said during his presentation. out that this doesn’t mean we should immediately implement Japanese regulations back home in Mos- Specific examples of successful collaborations be- cow. We think that the development of parking zones tween businessmen from Moscow and Japan were is a good enough measure in terms of regulating the brought up during the meeting. Such examples in- number of vehicles on the roads,” the Head of the clude IHI Corporation, which is the main supplier for Transport Department noted. the Renault-Nissan plant in Moscow. Company representatives declared that they will continue to take The international seminar that addressed the issues and interest in the Russian market and are ready to of innovative development of city infrastructure in localize production based on the automotive cluster. the sphere of social welfare and the creation of a In spite of the ruble collapse, company management barrier-free environment did not go unnoticed. Sem- inar participants discussed how to make the modern mega-city more comfortable and safe so that people with disabilities could visit the movie theatre, go to stores or take the metro as a full-fledged member of society.

Sergey Sobyanin’s visit to Tokyo ended with a business breakfast with Japanese big business representatives at the New Otani Hotel. The meeting was attended by Sergey Cheryomin, Minister of the Moscow City Government and Head of the Depart- ment for External Economic and International Rela- tions (DVMS).

As it turned out, in spite of the tensions between the government of Russia and Japan, Japanese corporations are still interested in financing construction People say that Governor Masuzoe has conquered the biggest dragon - transportation jams in Tokyo. considers business in Russia to be profitable and their residents. Every week, new issues about the city investments to be justified. are discussed at various levels of city management (departments, prefectures, municipal councils). By So what does Moscow have to offer to the Japanese? answering these questions, Muscovites can directly influence the decisions made by the Moscow gov- Sergey Cheryomin answered this question before his ernment. Millions of users, over 580 polls and 250 departure for Tokyo, noting that the Moscow govern- decisions implemented by the authorities – these ment has a lot to offer the Japanese. For example, there are the results of the first year of operation for “Ac- are a lot of interesting developments in the sphere of tive Citizen.” transportation management. After all, our city uses an intelligent transport management system as well. “All of this can successfully be adopted by the Japa- nese,” the Minister of the Moscow Government says. “Moscow has made a lot of advancements when it comes to creating a smart city system. This is especially “I didn’t notice that anybody have a pessimistic opin- true in the sphere of interacting with citizens through ion about Russia during our meeting with the top our city portals via the Internet,” the Minister explained. managers of Japanese corporations. On the contrary, they were interested in learning about new opportu- Sergey Cheryomin was, of course, talking about nities available to them in the Russian capital. Many the “Active Citizen” project, which was launched in people promised Sergey Sobyanin they would visit May 2014. With the help of this portal, the Moscow Moscow soon to see everything for themselves,” the government regularly conducts polls among city head of the DVMS said. ■

January-March 2016 CAPITAL IDEAS 19 FACE TO FACE

20 CAPITAL IDEAS January-March 2016 Vladimir Zhidkin: New Moscow will be attractive to investors for a very long time

The head of the Department for the Development of New Territories of the City of Moscow answered our questions in an exclusive interview with Capital Ideas.

Vladimir Zhidkin genuinely describes his job as “extremely interesting work.” This isn’t surprising: after all, he is the person in charge of developing New Moscow – a 150,000 hectare area that was added to the Russian capital three years ago.

January-March 2016 CAPITAL IDEAS 21 FACE TO FACE

Mr. Zhidkin, what was the main idea behind this mas- ming with life as well: industrial zones and tech- sive expansion of Moscow, and why was it necessary? noparks are being erected, new roads and metro stations are under construction… But, for a num- In short, it was done in order to open up new develop- ber of reasons, possibilities are limited in the center. ment opportunities for the city. Among other things, By adding new territories to Old Moscow, we have the new territories can be used to house major tech- opened up new opportunities for growth in the city. noparks, technopolises, various centers of business The fact that Moscow was expanding in the south- activity, modern transportation, utilities and social western direction is no accident. There is less infra- infrastructure and create new places of employment. structure in this area – a lot more space and a lot The last point is especially important, as it will serve more green areas. There are real forests there! In to reverse the current migration pattern in the city terms of total area, New Moscow is 1.5 times bigger – when millions of people travel to the center in the than of Moscow, but only 240,000 people were liv- mornings and back from the center in the evenings. ing there at the time the area was first integrated – The creation of new jobs in the territories – over a this is 50 times less than the population of Moscow. million new jobs in the long-term – will help reduce This gives you an idea of how much there is to do: transportation loads in Moscow. for the majority of projects, we are starting from scratch. In other words, Moscow – Old Moscow, to be exact – is suffocating from having to support a popula- Is it fair to say that the development of New Mos- tion of 12 million people, from major transportation cow is a priority for city authorities today? problems… No, both Old Moscow and New Moscow are being Why? Old Moscow is a vibrant, developing organism developed – there is a balance. There is no conflict that is resolving its own problems. The city is brim- between these two areas.

22 CAPITAL IDEAS January-March 2016 Maybe we should be putting this question off until are 324,000 people living there now. I also can’t the end, but I’ll ask now: is there a possibility that help but mention another figure: about 80,000 Moscow will expand even further? new jobs have been created in New Moscow over this time period. You know, when people I talk to Maybe, though this is unlikely to be the case at this find out what we’re doing in New Moscow, they of- point. At least I don’t see any reasons to expand fur- ten exclaim: “Wow! We want to go there!”. Living ther in any direction in the near future. so close to your place of employment is something that Old Moscow can’t afford right now. We are al- Will New Moscow be better and more comfortable ready thinking about how to do this and are build- than the old part of the city? ing office spaces. As we create a modern European urban environment for residents, it is important That’s not a good way to look at it, because overall this that we also preserve the unique green environ- isn’t true. In terms of relaxation, yes, New Moscow will ment of New Moscow. be better – there is more space, more available land, and there are a lot of forests in the area. Imagine liv- In spite of all these ambitious projects, I want to ing in a house next to a forest elk, with a river nearby, point out that we are not competing with Old Mos- instead of a park. At the same time, your home is also cow. In the three years that I’ve been head of the less expensive than it would be in Old Moscow. Department for the Development of New Territo- ries, I’ve never thought, “our city needs to be bet- Are cheaper real estate prices in New Moscow al- ter than Old Moscow.” After all, Old Moscow has a ready attracting people? lot of things that these new areas will never have – world-class theatres and museums, as well as the Of course. Over the past three years, the population Moscow River embankment that will soon change of New Moscow has increased by a third – there completely.

January-March 2016 CAPITAL IDEAS 23 FACE TO FACE

By the way, why has the plan not been confirmed yet?

Because there is no single general plan for New Mos- cow yet. So far, only some settlements located on these new territories have a plan. A comprehensive general plan should be confirmed by the Moscow Government by July 1, 2016, after public hearings take place in February of next year. The General Plan will be drafted for the period up to 2035.

Does this mean that New Moscow will be a super modernized city by 2035?

Not necessarily. Unfortunately, we don’t know what the political, economic and investment climate in Russia will be like in the future…perhaps the plan will have to be adjusted over time. This isn’t a big deal – it’s something that happens in ev- Tourists, including those who come from abroad, ery country. It is perfectly logical to adjust a plan come to Moscow specifically because of these that outlines the next two decades in accordance theatres and museums. Does this mean that New with specific situations, new global urban develop- Moscow will not be of any interest at all to tourists? ment trends and so on. The important thing is that the general plan will lay the important groundwork Why not? Firstly, there are several historic estates in for roads, utilities infrastructure, housing, social fa- New Moscow – Ostafyevo Estate and Valuev Estate, cilities… for example. Second, we definitely plan on building exhibition centers and theme parks such as the Park Ok. Of course, it is impossible to predict the fu- for Reenactments of Historical Events or the Park of ture. Events unfold quickly, and nobody can say Russian Fairytales. There is a great example of this – for sure what will happen tomorrow. But would Disneyland, which is located outside of Paris and hosts you characterize the current economic climate as tons of guests from all over the world every day. Why unfavorable? not make something similar? It was a favorable situation until the fall of 2014. I All of this will be outlined in New Moscow’s gen- mean, it was more favorable than it is today. There eral plan? were a lot of investment opportunities last year and the year before last, money was cheaper, it Of course. was easier for an investor to get credit. Demand for commercial, office real estate, as well as housing, was higher. Today, the purchasing power for both business and the general population has dropped significantly. This isn’t a secret. I also want to point out that we are going to complete the 2015 plan for commissioning real estate – housing, social facilities.

Are you planning to attract foreign investors to various New Moscow projects?

Foreign investors are already working in new territories. We have French people, Czechs…unfortunately, there isn’t as much representation as we would like, so we definitely plan on attracting more foreign investors. We are completely open to hear- ing interesting proposals from foreign investors. We also understand that, given the current situation, foreign business will not be that active. But New Moscow is not a one-year project. We are sure that

24 CAPITAL IDEAS January-March 2016 January-March 2016 CAPITAL IDEAS 25 FACE TO FACE

it will be attractive for both Russian and foreign in- kyo that look like they’ve come out of a science fic- vestors for a very long time. tion movie. Of course, we are trying to use all of the interesting foreign developments that we can Regardless of the current economic situation, New implement at home. I like European approaches to Moscow remains one of the most ambitious urban urban planning, for example. This means, firstly, in- development projects in the world. There are also fill housing – when courtyards are free of vehicles some other projects in the works – Greater London, and are comfortable for residents. Take any city in New Delhi, Greater Paris… Europe – Cologne, for example. There are plenty of streets with crowds of people, where there are both The last one was never implemented, by the way. housing and public spaces. These aren’t necessarily exclusively pedestrian streets, but they are lively Why not? streets. There are a lot of people going to cafes, restaurants, cultural attractions or social spaces. We Although it was planned six or seven years or go, the have to create centers like this in order to ensure project hasn’t made it past diagrams and sketches. I’m that New Moscow doesn’t turn into a commuter not sure exactly why this is, but I suppose there are town flooded with parked cars, where children are problems with financing… confined to tiny playgrounds. I will say that all of the projects we are currently developing are based I’m curious about how you’re incorporating foreign on this approach – creating a comfortable public experience into the New Moscow project. Deputy space. This is how we see New Moscow. Mayor Marat Khusnullin talked about Tokyo… As the head of the Department for the Develop- He was talking about modern transport inter- ment of New Territories, what is your primary fo- change hubs and various road intersections in To- cus today?

26 CAPITAL IDEAS January-March 2016 Everything. See, you can’t focus all of your attention on just one thing. New Moscow is a multifaceted project, so we have to think about multiple aspects at the same time when implementing it: transport infrastructure, construction, energy, gas and wa- ter supply. If we don’t approach it this way, we risk missing something crucial. But, so far as priorities go, we have just one – to do everything possible to make sure the people in New Moscow have a comfortable space for living and working. This is our guiding principle that dictates everything we do. This is why we are following the infill housing model, creating a suitable public space, places of employment nearby… constructing roads in a way that ensures they don’t run past areas that contain summer homes. We are building houses that will be a joy to look at, both inside and out, making sure buildings aren’t so tall that they end up hiding the scenery. We have a special committee that exam- ines every house, every kindergarten, every building in order to determine whether or not it’s comfortable for people. I’ll repeat – this is the most important thing and is also the main reason we decided to expand Moscow’s borders three years ago. ■

January-March 2016 CAPITAL IDEAS 27 CITY’S GRAPH Key areas of integrated urban planning development

Plans include the construction of no more than 100 million m2 of real estate with preferential placement of various places of employment that will attract residents of nearby areas and those who live in the Moscow of new territories in Moscow center as well in order to lower labor migration into the city. 3 Minskoye Highway 2 4 MKAD 1 5 Kievskoe Highway 8

CRR 7 6

Kiyevsky suburban direction of Moscow Railway

11 Kaluzhskoe Highway 10

Kurskoe suburban direction of Moscow Railway

M2 Highway 12

28 CAPITAL IDEAS January-March 2016 Key areas of integrated urban planning development of new territories in Moscow Three zones are planned for the new territories:

First zone – partially urbanized area with a high concentration of administrative and business real estate (no more than 10,000 m2/ha in density)

Second zone – low degree of urbanization, institutions for healthcare and education (no more than 7,000 m2/ha in density)

Third zone – recreational area with low-rise residential buildings (no more than 5,000 m2/ha in density)

Planned clusters (growth points) 1 1 Multi-purpose administrative and business cluster 2 Aeropolis Vnukovo 3 Rumyantsevo Technopark 4 Mosrentgen multifunctional cluster (shopping, hotels, offices, manufacturing) 5 Education cluster 6 Historical and recreational center 7 Troitsk Innovative Research Center 8 Medical cluster 9 Kievsky logistics cluster 10 Klenovo agro-industrial cluster 11 Voronovo cluster 12 Rogovo agricultural district

System of park areas and mega-parks in Moscow

Planned roads

Existing roads

January-March 2016 CAPITAL IDEAS 29 MOSCOW GLOBAL From total chaos to smart order The capital recently hosted the 5th Annual Urban Forum: “Moscow as a Dynamic Megacity: flexible management practices.”

2015 marked the 5-year jubilee for both the forum and n a special report, Sergey Sobyanin summed up his team’s accomplishments over the past five years and talked about Sergey Sobyanin taking office as the Mayor of Moscow. how city programs that are important to the capital are Because of this, the forum’s agenda was dedicated to the implemented – programs such as the development of new experience Moscow acquired in urban development over territories, the expansion of the transportation system and theI reduction in traffic loads, the development of public spaces the course of these five years, the specifics of application and the implementation of new housing quality standards. and implementation of best international practices in the capital, as well as to new projects According to the mayor, the city government has accomplished a lot over the past five years. The city is developing at a rapid pace planned for implementation. and is among the world’s leaders in this respect – it took Moscow just a few years to implement what many European cities took decades to achieve. Moscow used solutions that worked well for other cities. “We have accomplished a lot over the five years,” the mayor said, “We’ve practically done the impossible. As everybody knows, it is important to know history so that we don’t repeat past mistakes. Unfortunately, Moscow made the same mistakes many cities made when it first started developing in 1991.”

Millions of square miles of new real estate and cars appeared in a short period of time, which led to the collapse of the transportation, deterioration of public spaces and an increase in discomfort in everyday life.

30 CAPITAL IDEAS January-March 2016 From total chaos to smart order

“The main conclusions we can draw at the end of these five “But if you’re not ready to follow through with these measures, years may come off as trivial. Nonetheless, they are very im- don’t attempt to resolve the transportation problem.” portant – these are not just words. They refer to real changes that transformed the lives of millions of people,” Sergey Sobya- Today, the city is implementing one of the largest transport in- nin added. frastructure development programs in the world. The pace of metro construction doubled, while the pace of road construc- Solutions that had already been tested were used to address tion increased by 150%. The construction of new railway routes one of the most important problems in the capital – the trans- has also been resumed. “This was our first experience in the past portation problem. The battle with chaos on the roads and 30 – 40 years. The first express trains recently started running to creating top-notch conditions for public transportation was a and from locations with the heaviest traffic loads – Khimkhi and revolutionary solution for Moscow. Zelenograd. This is very important for Moscow, since a significant number of cars – millions of cars, really – travel from towns out- “This is how human psychology works: everybody supports side of Moscow into the city every day,” the mayor said. cleaning up the city in theory, but in practice many cannot re- sist the urge to park where they are not supposed to or to drive This comprehensive solution to transportation problems had a around traffic in order to save a minute or two. This is why the positive effect. However, the next three years will be extremely first rule of having a successful transportation program is be- important for the transportation program. For example, Mos- ing strict with administrative rules. Towing cars that are parked cow Ring Railway will start operations in 2016. This means that where they are not supposed to be or traffic light cameras don’t Moscow will have a second interchange circuit for the metro make the city authorities particularly popular,” Sobyanin said, and the first interchange circuit for commuter trains.

“Over 30 metro stations are currently under construction, contracts have been signed to renew the rolling stock for the metro and above-ground transport is supposed to transfer to a new passenger transportation model. Of course, we will also continue the construction of the main commuter routes,” the capital’s mayor said. The reconstruction of roads and interchanges on MKAD is also nearing completion. All of these changes will help create a quality transportation system.

The next important task the city authorities have to accomplish is the revival of public spaces in Moscow. “The deterioration we observed for the past 10-15 years goes way beyond physical symptoms such as bad patches of asphalt, dead trees and bro- ken benches. Allocating the funds to restore these things is not necessarily the most difficult task. The most dangerous trend of the past few decades has been the privatization of public spaces in Moscow,” Sergey Sobyanin declared.

The work to create a comfortable city began with the obvious. The sidewalks and playgrounds were cleared of illegal parking spaces, illegal advertising was taken down from building fa- cades and street vendors were cleaned up. At the same time, the authorities worked on the comprehensive development of yards and parks.

January-March 2016 CAPITAL IDEAS 31 MOSCOW GLOBAL

tion. Judging by the trend we’re seeing today, at least, this is an attainable goal,” the mayor of Moscow said. He also talked about the Milan model of car sharing – a short-term car rental system.

A panel discussion entitled “Drivers of Development for a Poly- centric City Model,” which included Deputy Mayor for Urban Development and Construction of Moscow Marat Khusnullin, took place as part of the Urban Forum. In his address, Mr. Khus- nullin named the comprehensive development of transport infrastructure and the construction of transport interchange hubs as the key drivers for the development of a polycentric city model. “By developing New Moscow, executing renovations of industrial zones and developing the areas around Moscow River, the city is creating new points of growth and facilities that attract residents. This allows us to redistribute traffic flow and overcome the problems of overcrowding in the center and uneven development, as well as to establish a new polycentric structure – to make Moscow a city that is great to work and live in,” Marat Khusnullin said.

Discussion participants agreed that the Moscow River should be an important component of the polycentric model. The key task for the next few years is to make the Moscow River an “Over the past five years, 400 green territories were cleaned active part of city development and ensure that it becomes ac- up or created in Moscow – dozens of them pop up every cessible to city residents. Developing projects that are in close year. The number of park visitors more than tripled, growing proximity to the river are subject to many risks, require signifi- from 10 million people to 36 million people. This also includes cant investment amounts and have to take into consideration VDNKh, which boasts over 20 million visitors,” the mayor of the interests of developers, the city and local residents. Moscow noted. During the panel session, participants discussed three main Work on expanding sidewalks is currently underway, which goals that should be centered in the plans of a large modern city will double pedestrian capacity. This project also opened up the that is marked by the intensification of financial, cultural and possibility of holding festivals and holidays that millions of peo- information channels – accessibility, diversity and flexibility. ple participate in on the streets. At the same time, the through- put capacity for cars has increased because parking spaces have Moscow isn’t just a big capital. According to Vicente Guallart, been set up and traffic flow is more organized. Chief Architect of Barcelona from 2011 to 2015, each district in Moscow has its own special character. The polycentric city So far as the city-planning policy of the Moscow government is model, which Moscow strives toward, active development of concerned, it entails the reduction of urban infill and the estab- the Moscow River as a main avenue of transportation enables lishment of new business activity centers. the Russian capital to improve the standard of living for residents. According to Lord Mayor of Leipzig Burkard Jung, using “Over the past few years, business developer activity has shifted waterways for transportation purposes and as public spaces to new territories and former industrial zones that jointly ac- improves the quality of city infrastructure. count for half of all real estate development,” Sergey Sobyanin said. According to him, the new city planning policy strikes a A permanent member of the Moscow Urban Forum and depu- reasonable balance between the interests of developers and ty of the French National Assembly Maurice Leroy pointed out protecting the interests of Moscow residents. how much progress Moscow has made in the past five years. Moscow has surpassed Paris in some aspects of development, Sergey Sobyanin also touched on a series of projects that are including in metro construction. The efficiency of management being implemented in Moscow jointly with foreign partners. decisions in the Russian capital is apparent in the sphere of resi- Firstly, he noted the Russian-German project “Denkmal, Mos- dential construction and in the improvements that have been cow” – an international exhibition on the preservation, restora- made to public spaces such as VDNKh, Gorky Park and Muzeon. tion use and promotion of cultural heritage. All of these changes took place in the city over a very short period of time. Maurice Leroy pointed out that Moscow is gradually “Today, 80 percent of monuments in Moscow have been re- transforming into a smart city, developing information technol- stored. I hope that we will catch up with Leipzig soon and ogy to interact with residents and becoming a European leader will also have 90 percent of our monuments in good condi- in this sphere. ■

32 CAPITAL IDEAS January-March 2016 CITY’S GRAPH

Creating places of employment

Jobs created 26 100 Administrative and office facilities 80 500 (28 facilities, 451,760 sq.m) 17 500 Manufacturing and warehouse facilities (37 facilities, 405,990 sq.m) 9 400 Retail and service facilities (55 facilities, 570,950 sq.m) 7 500 Social facilities (25 facilities) 20 000 Construction sector

Source: Department for the Development of New Territories of Moscow

January-March 2016 CAPITAL IDEAS 33 CITY’S GRAPH

Moscow CITYLAB: 25 Most Economically Powerful Cities in the World 25 cities/regions Moscow’s ranking: 23 on the list previously not included in the rankings

rankings: 1 – New York 4 – Gonkong 22 – Geneva 2 – London 5 – Parizh 23 – Washington, Moscow, San Francisco 3 – Tokyo

2thinknow Innovation Cities Global Index reflects the innovative potential concentrated in the city

445 cities/regions included Moscow’s ranking: 63 in the rating +129 spots compared to 2012 (192nd)

rankings: 1st place 61st place 66th place San Francisco / San Jose Kobe, Edinburgh, (Silicon Valley) Japan United Kingdom

34 CAPITAL IDEAS January-March 2016 A.T. Kearney Global Cities Index Ranks cities in terms of how “global” they are – that is, to what extent a city can be considered an international center

125 cities/regions included Moscow’s ranking: in the rating

14 th +11 places compared to 2010 (25 ) rankings: 1 – New York 13 – Toronto 2 – London 14 – Moscow 3 – Paris 15 – Sidney

Business climate In Russian cities A ++ – the highest score assigned by RA Expert

100 cities/regions included Moscow’s score: A++ in the rating Has not changed between 2010 and 2014

Investment attractiveness of Russian regions RA Expert

85 cities/regions included Moscow's ranking 1A in the rating In a group of regions with maximum potential and minimal risk Has not changed

January-March 2016 CAPITAL IDEAS 35 CONSULTATIONS Concessions for professionals Receiving a Russian work permit for highly qualified foreign specialists has now become considerably simpler

of errors, it will be sent on to the FMS. The Federal Migration Service will check the documents once more and, if everything has been filled in correctly, they will send confirmation that the documents have been accepted. Over the course of 14 working days, the documents will be subjected to a full inspection. On In the summer of 2015, the Federal Migration Service the 15th working day, the work permit will be ready for issue and it will be possible to receive it in person on presentation of the of the RF and the Association of European Businesses original documents previously downloaded electronically. presented a new service for granting work permits to Unveiling the service, Director of the FMS of Russia, Konstan- highly skilled foreign specialists. Frank Schauff, CEO of tin Romodanovsky declared that the status of Highly Qualified Specialist confers upon foreigners unprecedented benefits. Di- the Association of European Businesses, reveals what rectors of many foreign companies often ask us what benefits they now need in order to receive such authorization, these are. Experts with high levels of skills coming to work in Russia are indeed provided with a range of benefits. Amongst and what the procedure itself involves. them being the issuing of a work permit and visa which is valid for 3 years both for the employee himself and for accompanying members of his family. By comparison, ordinary specialists are he service developed by the Federal Migration Service issued with a visa and permit valid for no longer than a year. The of the RF and the Association of European Businesses HQS has 90 days to register at his place of residence, whereas for Highly Qualified Specialists (HQSs) is a completely the ordinary citizen has to do so within seven working days. new solution without parallel. Before, in order to receive a work permit for a specialist in Russia, company Aside from which, the process whereby one is granted a permit representativesT had to visit the offices of the FMS on several is becoming much simpler and quicker. All documents can be occasions, and present all documentation in paper format. Of- submitted electronically, and the permit can be received in as ten this required much time and effort, so the idea of creating soon as 14 working days. Usually this process takes at least two a special service arose, one which allows employers/represen- months. Also, there are no quotas or permits applicable to a tatives from a foreign company to submit applications and all company relating to the courting of a foreign expert. Amongst accompanying documents in an electronic format. In addition, other benefits are, for example, not requiring a medical certifi- all document originals are presented at a visit in person to the cate, and there are a host of other concessions. FMS of Russia to pick up the papers which, by then, will have been processed. In such a way, the number of trips to various We are also often asked, in which sectors of the Russian econ- departments of the FMS of Russia is reduced to just the one. omy foreign professionals are utilized the most. In light of the sanctions against Russia, how is the Russian labour market It should be pointed out straight away that only companies changing? According to our figures, the number of foreigners which are part of the Association of European Businesses are coming to Russia has dropped by 30%, which is linked to new able to make use of this new service. To do so, the company must projects being suspended. That said, the all-out “exodus” of for- be registered on the system, and for the AEB to confirm that it eigners, as mentioned in the press, has not come to pass. In is indeed an Association member. Once registered, the company terms of individual industries and sectors, it is only with the oil will have access to all of the services provided by the FMS. Com- companies that a substantial reduction of the number of ex- pany representatives should put together the whole package of perts coming here to work has occurred: the remaining sectors documents needed to apply for the Highly Qualified Specialist of Russia’s economy have stayed at much the same level. ■ work permit, and send it to the AEB by email. The package of documents will be examined by the Association and, if it is free For Capital Ideas courtesy of BIGMOSCOW

36 CAPITAL IDEAS January-March 2016 Going into business? Do it in Moscow!

The capital's business climate bumps up Russia in World Bank index

Russia has improved its positions in the international World Bank Doing Note from Capital Ideas Business Index, hopping from 62nd to 51st. Investment policy reforms and changes in support for industrial plants were the main reasons behind the The Doing Business Index is an jump in ratings. annual ranking put together by the The World Bank index, which reflects each country’s business climate, is World Bank. The index ranks 189 based on 10 key indicators for one or two main mega-cities. Russia’s score countries based on how easy it is to is based on data from Moscow and St. Petersburg (the capital has a much bigger impact on the final outcome). It is safe to say, therefore, that Russia’s do business in each country. The final bump in the rating was in many ways the result of the work performed report provides objective measures by the Moscow Government in order to improve the city’s business of business regulations for small and environment. medium-size companies. The city was most successful in the following areas: “Connection to Power Grids” (moved up by 114 positions), “Construction Permits” (37 positions) and “Protecting the Interests of Minority Investors” (34 positions). There was also significant progress in “Access to Credit” (19 positions).

“This is not the first year Moscow has taken concrete, systematic action to improve the investment climate: we have adopted and implemented the investment strategy up until 2025, as well as adopted laws on systemic investor and manufacturing support,” says Maksim Reshetnikov, Minister of the Moscow Government and Director of the Moscow Department for Economic Policy and Development, “Special attention was paid to simplifying procedures for starting and running a business, as well as stimulating real economic growth.”

“There are a lot of changes in the regions and we are seeing real results,” says Konstantin Polunin, partner and managing director at The Boston Consulting Group in Moscow, about the positive shift in the rankings, “The climate is changing and trust between business and the government is growing slowly but surely. There is a connection between a country’s position in the rankings and GDP growth, and we are sure that next year we will see more concrete results – real investments and projects.” MOSCOW IN WORDS

“Listen! If stars are lit, It means there is someone who needs it, It means someone wants them to be, That someone deems those specks of spit Magnificent!” Vladimir Mayakovsky, Russian Soviet poet, playwright

“You could cover the whole earth with asphalt, but sooner or later green grass would break through”. Ilya Ehrenburg, Soviet writer, journalist, translator, and cultural figure.

“What can be considered human emotions? Surely not only lyricism, sadness, tragedy? Doesn’t laughter also have a claim to that lofty title? I want to fight for the legitimate right of laughter in “serious” music.” Dmitri Shostakovich, Soviet composer and pianist

38 CAPITAL IDEAS January-March 2016 “Some sort of pressure must exist; the artist exists because the world is not perfect. Art would be useless if the world were perfect, as man wouldn’t look for harmony but would simply live in it. Art is born out of an ill-designed world.” Andrei Tarkovsky, Soviet filmmaker, writer, film editor and opera director.

“Mind you, sometimes the angels smoke, hiding it with their sleeves, and when the archangel comes, they throw the cigarettes away: that’s when you get shooting stars.” Vladimir Nabokov, Russian novelist

“I think that for the highest achievements nowadays... need to have the stable as a rock scientific base. And also need to own modesty”. Alexander Alekhine, Russian chess grandmaster and the fourth World Chess Champion

January-March 2016 CAPITAL IDEAS 39 MOSCOW GLOBAL Hannu Himanen: I would not be a diplomat if I weren’t an optimist

Ambassador Extraordinary and Plenipotentiary of Finland in Russia answers questions of Capital Ideas in an exclusive interview

It is hardly a secret that sauna in Finland is more the years have supported and encouraged me in my than simply a place you get a proper washing and efforts to learn the language. I have a feeling that the cleaning of yourself. It is a rallying and assem- more I know Russian, the better I understand how lit- bly point where people tend to discuss business, tle I know. But that in itself is a liberating feeling. One politics, and also gossip. What is the “talk of the just has to forget about the limits of one’s knowledge town” today in Finland? and use the language.

Gossip, of course, is endless, but it is more difficult to This is a rather personal question. A few words follow it from abroad. People talk and gossip every- about yourself: Why did you choose to become a where, not only in the sauna: restaurants, cafes, par- diplomat? What do you credit yourself with dur- ties, at the workplace. Judging from what I read, see ing your posting in Moscow? and hear in the media, the hot topics of debate today are the economy and the European refugee crisis. I was very interested in what was going on in the world already before I went to school. The interest You speak beautiful Russian. When did you start grew gradually more systematic, and in university to master it? I studied journalism and international relations. I don't remember a clear moment of decision on becoming a I don't think I master Russian, which I think is some- diplomat. There was, as it often happens, an element thing only unusually talented non-Russians can ever of coincidence in 1976 for me not only to apply for the dream to achieve. It is my third time in Russia and the Foreign Service but also to be accepted from among former Soviet Union, and I will have lived in this coun- almost 1000 applicants. Maybe it was my destiny to try altogether for more than seven years by the time become a diplomat. I will leave Moscow probably next year. It is a long time by any measure, and something will have to have In Moscow I have tried to do what is the task of a happened in the language segment of my brain. diplomat: to promote bilateral relations between my country and my host country, and to convey a truthful Russian is a beautiful if difficult language. I owe a and realistic picture of what happens in the country. deep gratitude to my Russian friends who through As you would know, the past two years have been un-

40 CAPITAL IDEAS January-March 2016

MOSCOW GLOBAL

usually difficult, but it is all the more important that are hanging on and know better times are coming, we diplomats try to keep channels of communication sooner or later. open. We have had a lot of commercial and business events and cultural manifestations during my stay in Would you care to name some major joint Russo- Moscow. I hope some of this activity has made an im- Finnish economic projects that have been put on pact and promoted relations between our countries stream? Are there any other projects in the pipe- in a positive way. line? Or has everything come to a standstill and we shall have to start anew? According to metropolitan media reports no Eu- ropean company has closed down its offices in Even though investment is very slow at the moment, the Russian capital. Official statistics shows that some activity takes place. New production plants American big business has a strong footprint on have opened, and some existing ones have been the Moscow market terrain too. What about the expanded. The most significant investment is being entrepreneurs and business people from Finland? prepared in Finland, as the Finnish energy company What’s the state of play, in particular, for such Fennovoima and the Russian Rosatom have agreed companies like Stockmann, Valio and others? to build a nuclear power plant in Finland as a joint project. The preparations will still continue for a Finnish business continues to operate in Russia, and couple of years. Once started, the Hanhikivi power no major company has left the Russian market be- plant project will have a major impact on the Finnish cause of the current crisis. It is obvious, though, that economy and the economic relations between Fin- companies working in the retail sector have suffered land and Russia. a lot as Russian consumers have much less money to spend than before the crisis. This has meant that com- In September 2010, Moscow hosted Days of Fin- panies like Stockmann, Prisma and others are strug- land. Any plans to duplicate the past success? gling. Valio and other Finnish companies in the food sector have been particularly hard hit by the Russian For the time being, we are not planning any major food import ban. promotion events in Moscow. We rather believe in agility and a constant effort to target selected au- Also, both housing and commercial construction have diences in Russia, not only in the capital but also in slowed down. Finnish construction companies and other cities. For obviousreasons, St. Petersburg is a suppliers working in the construction sector are cur- particularly important and an interesting destination rently faced with considerable challenges. But they for Finnish cultural exports. I am just on my way to

42 CAPITAL IDEAS January-March 2016 opening a major exhibition on Finnish architecture Ambassador, do you have any favorite spots in and design in the State Hermitage in St. Petersburg. Moscow? What museum, park or natural reserve in and around Moscow would you recommend to Regrettably, the economic crisis has hit the tour- your visiting friends? ist industry hard. The stream of Russian travelers to Finland has severely dried out, did it not? Is it There are too many great places in Moscow to make true that your fellow-countrymen have cut the a simple list. The city is an endless trove of discovery. number of their trips to Russia? I enjoy walking in the city and see places that I have not known previously. I have seen fabulous exhibitions Indeed, flows of travelers in both directions have been at the Tretyakov Gallery, the Pushkin Museum, at the coming down. The main reason for Russians not to Vinzavod. The Jewish Museum (and the Tolerance Cen- travel as they used to is the rouble exchange rate. tre) is not only a beautiful space but also an interesting People travel less, and they spend less money while museum with an important message. It uses modern travelling. The economic implications are serious. For technology in fresh and imaginative ways. some reason, the exchange rate has not been enough to attract more Finns to Russia. The situation will im- Gorky Park is my favourite destination for walks to prove when the economic situation improves. enjoy the greenery, to get exercise and fresh air, and to watch Muscovites relax in their free time. I walk How would you appraise the quality of work of the to the Novodevitch Cemetery regularly, as it provides consular services of Finland in the Russian Federation? spaces for quiet comtemplation and never fails to re- veal new discoveries. We are doing our best, and judging by the feedback we get from our customers, our level of service in Diplomats are known to be very busy. Do you se- consular activities is very good. For our Russian visa cure some spare time to go to a theater or the customers, we promise efficient and polite service. Moscow Conservatoire, which is known to be one of your preferred places? Your Excellency, what is you view on the state of play of the cultural ties between Moscow and Yes, the life of a diplomat in Moscow is busy, but it Helsinki? Do you happen to know which particu- has not prevented me from enjoying music regularly. lar Russian theatres and artists the Finnish public The Great Hall of the Moscow Conservatory has a would be eager to host and welcome in the near constant supply of top-quality concerts. The Tchai- future? kovsky Hall also hosts many great performances. To me, music offers a necessary counterbalance in a busy A number of things have happened by way of cultural life. I always walk out of a concert spiritually renewed exchanges between Finland and Russia in the re- and energized. cent past, and there is more to come. Russia was the theme country at the Helsinki Book Fair at the end of The Finnish tradition to award small figures of October. Some 30 Russian authors participated, and “Smiling Boy” and “Smiling Girl” to the most hap- the Finnish public showed a lot of serious interest. py and radiant schoolchildren at the end of the Some Finnish authors will be present at the forth- school year has crossed the 60 years milestone. coming Non/fiction Book Fair in Moscow. A long time ago, this award went to the 11-year old HannuHimanen. Have you managed to pre- Russian theatre is performed in Finland and vice ver- serve this optimistic outlook for life? Is it appli- sa. Finnish art was present at the Moscow Biennale. cable as well to the development of relations be- Musicians perform in both countries. The Embassy or- tween Finland and Russia? ganizes regular concerts, with the 150th anniversary of Jean Sibelius having been the key theme in 2015. Little did the young boy know what life would bring along... The annual Finnish-Russian Cultural Forum has established itself as a major event, with up to 400 par- Yes, indeed, I was awarded the Smiling Boy statue ticipants each year. This year’s Forum was hosted by long time ago. It is for other to judge whether I have Petrozavodsk, next year it will take place in Tampere, been able to maintain the standard of optimism and Finland, and in 2017, St. Petersburg will be the venue. energy. But I would not be a diplomat if I weren’t fun- This year’s forum witnessed more than 70 agree- damentally an optimist. I fail to accept that problems ments on new cultural projects. Most of them are cannot be solved and things moved forward. Despite fairly small-scale, but they have considerable impact the current problems, I am sure relations between for the communities in which they are carried out, Finland and Russia will continue to develop favour- both in Finland and in Russia. ably in the coming years. ■

January-March 2016 CAPITAL IDEAS 43 NOTHING VENTURED Kai Reichert: We’re here to stay

Crisis, sanctions…seems like it’s a Mr. Reichert, Fraikin entered the Russian market in August of this year, right? challenge to find anybody in business who is not, in one way or another, Yes, although Fraikin representatives began re- searching the market here two and a half years ago. scared of these two words. Kai They talked to various suppliers, different leasing, transportation and logistics companies. They re- Reichert, the CEO of Fraikin Russia, searched everything thoroughly, assessed all the is not easily spooked. “Starting risks with the help of experts from various organizations. I was first contacted by Fraikin in October a company during a crisis is an of last year. They found me while they were looking for a specific person to head up the representative advantage,” Mr. Reichert said during office in Russia. an exclusive interview with But so much happened in these two and a half Capital Ideas. years – the West has imposed sanctions on Rus- sia, there is a crisis…weren’t there people at Frai- kin who wanted to wait for a better time to enter the market here?

You know when I was about to sign the contract with the company in December 2014, the ruble experienced a very sharp drop – one euro was equal to one hundred rubles! I remember asking whether or not this changed anything. The company responded “Of course not!” What Fraikin does doesn’t really depend on the political climate that much. The company came to Russia to stay. There is a lot potential here for our business – leasing commercial and industrial vehicles. The market for this here is truly bottomless. After all, it would be impossible to cover the entirety of Russia with railway tracks. Moreover, a lot of Rus- sian companies are optimizing their transport costs right now. If you have your own vehicle fleet, you constantly have to pay for maintenance. We, on the other hand, can lease you a truck at a fixed price, and you don’t have to worry about any surprises.

By the way, this year Fraikin entered the market in Saudi Arabia as well. We also expanded our presence

44 CAPITAL IDEAS January-March 2016

NOTHING VENTURED In five years, we plan on having up to five thousand units of automotive machinery for a wide range of purposes.

Who are you working with now?

So far, the only contract we have is with a logistics company that transports a variety of products for Danon. Our first trucks will be on the road in December.

Do you have competition in Russia?

No, there are no companies exactly like Fraikin in Russia right now. There are companies that lease cars, transportation companies and logistics companies with huge fleets. But that’s something different. Our goal is to become established in this niche and not let others in – to run things on our terms. In other words, we picked a good time to enter the Russian market. We are open to in Europe, including Germany, where the company is everybody – we are ready to work with leasing compa- headed by my former colleagues from MAN. nies, private companies and state companies.

So far as the crisis is concerned, I’ll tell you honestly: Can somebody rent just one truck from you? starting a company during a crisis is an advantage. Because the ruble has crashed, everything in Russia is Yes. We only have one requirement when it comes to cheaper right now: the workforce, electricity, renting our clients: they have to be reliable. This is our most office space, etc. Before the crisis, for example, it was important criterion. sometimes more expensive to rent here than it was to rent space in Germany or even Paris. When do you think the crisis in Russia will be over? Do you think about this in general? It seems like every foreign company needs to follow your advice and come to Russia! Of course I think about this. You know, I agree with the experts at Citibank, who have asserted that the sanctions Yes, but there is a big problem – the reliability of the account for just ten percent of the economic downturn in judicial system. For foreign investors, this is extremely Russia. The rest happened because of oil prices and other important. Unfortunately, many people are wary of en- related factors. I hope that the people who make deci- tering the Russian market because of this right now. For sions in Russia understand that each country has to find example, you sign a contract but somebody – be it the its own competitive advantages. This is what Germany government or another company – breaks it. You take did at one point when it started, among other things, the case to court. But you aren’t completely confident to actively develop small and medium-size business. Of that the court will make a just decision. I’ll say it again – course it’s important to develop the Russian economy. this is the biggest barrier, the reason why a lot of foreign There is no better time to do that than right now. A crisis companies are not entering the Russian market. is a great time for a market like this.

What kind of vehicles do you lease? Let’s talk about something else. How long were you with the MAN office in Moscow? Mercedes, Iveco, MAN… before the end of the year, our fleet will contain over 50 vehicles. All of them are located Eight years. I was the Deputy CEO and was in charge at dealerships right now, because we don’t have our own of truck sales in Russia. parking lot: we simply have no need for it! Our vehicles need to constantly be on the road! By the way, aside So you have been in Russia for nine years? from trucks – refrigerator trucks and tractor-trailers – we also plan to offer snow removal vehicles and ambu- More than that! I was with a number of law firms here lances in Moscow and St. Petersburg in the near future. in the early 2000s. I’m actually a lawyer – I got my

46 CAPITAL IDEAS January-March 2016 law degree in Hamburg. I then continued my educa- and to opportunities this city has to offer. Moscow is tion in Kazan and got my MBA in England. unique in this sense. There are a lot of interesting things here, for both adults and children – theatres, museums, So you really understand the Russian auto trans- exhibitions…there is something new to do every day! portation market and the country’s legislation – You can send your children to a Russian school, or an seems Fraikin knew exactly who to hire! Do you English or German school – this isn’t an option in Ham- like living in Moscow? burg, my hometown. There are only German schools there. All of these things are the advantages a big city If I didn’t, I wouldn’t be living here. has to offer. And the countryside is so beautiful here in the winter and summer! Of course, my family and I live Who knows, maybe your salary is so high here out in the country, not in the city. that you’re just willing to put up with it! Did you even learn how to pick mushrooms? Can A good standard of living is about a lot more than sala- you tell a birch bolete from an aspen bolete? ry – everything has to come together. This includes the people I’m surrounded by at work, the company itself Of course! (Laughs) ■

January-March 2016 CAPITAL IDEAS 47 NOTHING VENTURED Smart lighting for smart cities

Light can be used for much more than decoration. Thanks to new, advanced technology, light can be “smart,” “emotional” and even provide a solution to business challenges by creating a unique look for the city at night. “Architectural lighting is an important component of a city’s brand that can help attract investments and tourism,” says Natalia Neverskaya, Head of Government and Public Affairs, Corporate Communication, Philips Lighting, Russia and CIS.

ight is changing. Modern lighting systems be- countries. The innovative platform Philips CityTouch come an integral part of urban infrastructure. provides a remote control system for all city lights that Innovative lighting solutions beautify spaces are hooked up to the system. With the help of the solu- and transform environments. New lighting so- tion, road and highway lighting can be controlled and lutions such as LED technology deliver energy regulated so that there is enough bright lighting during efficiency,L sustainability, and operational cost reduction. peak hours and less lighting in the middle of the night. They enable lighting systems that consist of luminaires, The system’s motion sensors will turn on the lights in a controls and services. LED solutions can be connected dark park in the middle of the night as soon as a person and easily integrated into any infrastructure. That is walks in. If you program different lighting scenarios, the what makes modern lighting systems intelligent. lighting will change for the holidays or important events.

Philips lighting solutions deliver value beyond illumi- “Philips CityTouch lighting management system can nation. Market leaders combine world-class tradi- help city authorities reduce power consumption by up tional and LED luminaires with analog and digital con- to 70%,” Natalia Neverskaya says, “at the same time, trols that let you deliver exactly the right illumination managing lighting becomes easier and technical sup- experiences, whenever and wherever you need them. port costs are reduced by up to 20%.” The company has pioneered many of the key break- throughs in lighting over the past 124 years, laying the Philips innovative lighting solutions are used to light basis for our current strength and leadership position some of the most famous architectural masterpieces as we drive the LED and digital lighting revolution. in the world: the Eiffel Tower and the Notre Dame Cathedral in Paris, the Empire State Building in New “The transition to LED lighting,” Natalia Neverskaya York, the Ferris wheel in London, the Great Pyramids says, “is one of our priorities at Philips, both globally in Egypt and the Maracana stadium in Rio de Janeiro. and in Russia. We offer a full range of lighting solutions for all market segments. Our portfolio includes Philips systems are also used to light many buildings innovative lighting solutions for architectural and in- and locations in Moscow, including the Book Buildings dustrial objects, streets and public spaces, retail and on New Arbat, Tverskaya Street, Gorky Park and the hospitality, sport complexes and office buildings”. Garden Ring. Modern solutions for architectural lighting allow for the programming of various lighting sce- There is an interesting solution that is already being used narios, which helps the authorities decorate the city in London, Prague, Los Angeles, Buenos Aires and other in accordance with city holidays or days of the week,

48 CAPITAL IDEAS January-March 2016

NOTHING VENTURED

New Arbat. or even to conduct social initiatives. For example, the ect. Philips put together a unique lighting solution for buildings on New Arbat were lit up with pink light- this magnificent building with a massive dome and ing for the fourth year in a row during Breast Can- six minarets. The lighting system, which was created cer Awareness month this year, reminding women to based on Philips Color Kinetics LED lighting systems, get regular check-ups. The original lighting format at highlights the geometry of traditional Muslim archi- Savelovsky City business center has been implement- tecture with the help of green accents and enables ed as part of a program to turn the former industrial the creation of various lighting scenarios during Mus- zone into a promising residential and business area lim holidays. 750 different units of lighting equipment in Moscow. The lighting system at the Bauman Gar- were used to put the system together. den in Moscow can be controlled remotely – admin- istrators can do this with the help of mobile devices “Philips Lighting,” Natalia Neverskaya says, “is the (smartphones, for example). largest manufacturer of lighting technology in the world and is the market leader in LED lighting. In The Moscow Cathedral Mosque has recently opened 2014, company profits amounted to 293 million eu- its doors again after a large-scale renovation proj- ros. 255 million euros were used to fund the Green Innovations program, the main objective of which is the development of energy efficient technology that will set the tone for the future of lighting in the world.”

According to international research results, a complete transition to innovative LED lighting will reduce carbon dioxide emissions by 16.9 million tons and will save $3 billion annually. Depending on what field they are used in, LED technology reliably operate for 15-20 years and reduce power consumption by up to 90%.

The authorities of modern mega-cities are actively implementing advanced lighting solutions and using innovative features that make the everyday lives of citizens more comfortable. Russia is not lagging behind in terms of this global trend. The Moscow authorities frequently opt to use lighting as a way to decorate the city and communicate with guests and residents, creating a unique lighting environment. ■

50 CAPITAL IDEAS January-March 2016 Gorky Park.

Cathedral Mosque.

Bauman Garden. January-March 2016 CAPITAL IDEAS 51 NOTHING VENTURED WIKA: business with German precision Oleg Goncharov is the General Director at WIKA MERA (WIKA`Russia). He has been working in international business for over 25 years and has a clear understanding of how to set up and develop the business of an international corporation in Russia. In this special interview with Capital Ideas, Oleg talked about WIKA’s operation on the Russian market, as well as about how the company is implementing local production plans here.

Mr. Goncharov, could you tell us about WIKA’s op- well as to cut down on delivery time. All of this gives erations in Russia? us additional competitive advantages and allows us to be more flexible and timely in terms of reacting to WIKA has been operating in Russia for 20 years. Over changes in the market. It so happened that our plans to this period of time, the company has considerably open the new plant fell in line with the new trends that expanded the scope of its activities. There are a total favor import substitution. I am sure that the import of 10 regional WIKA MERA branches in the country. substitution objectives set by the Russian government Aside from this, the company has a big warehouse are entirely realistic. I am aware what a lot of foreign in Moscow. There is also a WIKA production facility in the Russian capital – it has been here for over 10 years. Long before Russia started showing signs of a crisis and import-substitution program, WIKA planned to launch a new plant with a lot more capacity. Four years ago, the company acquired land outside of Moscow in order to build this new plant. We are currently waiting on a final permission document from the Moscow government so that we can begin construction. According to our estimates, construction should begin no later than March 2016 and the new plant is to be commissioned in January 2017.

Why does the company want to develop its production in Russia?

The equipment that we manufacture needs to be as close to our customer as possible. Importing products from Germany is not the most efficient solution, given the current market conditions – opening a local manufacturing plant is much better. This will allow us to take into account all of the specifics of the local market, as

January-March 2016 CAPITAL IDEAS 53 NOTHING VENTURED

experts and expats working in Russia, as well as suc- What is WIKA’s key to success in terms of work- cessful foreign businessmen who consider Russia to be ing on the Russian market? a great manufacturing powerhouse think about this. Of course, import substitution should not be regarded WIKA was born in Germany and operated in accor- as a goal that can be accomplished overnight. On the dance with the German approach for many years, contrary, this process will take more than just one year which means that we prioritized quality above every- and will require a lot of effort from all market partici- thing else. In my experience, German companies are pants, including the Russian authorities. I’ll also note successful on the global market because the prod- that a lot of foreign business representatives agree that uct itself – the quality and functionality – is always the steps the Russian government is taking are quire at the center of the attention. In this sense, WIKA is reasonable and will benefit the state. The process has no exception: everything the company manufactures been efficient so far – the fact that we have not seen falls in the top tier both in terms of technology and any major scandals or exits from major foreign compa- innovation. Everything that WIKA has accomplished nies serves as proof of this. in the past 20 years here has been possible thanks to product quality, as well as our focus on customer sat- What are your plans in terms of localization? isfaction. In order to be successful in today’s business world, it is necessary to apply a systematic approach We have worked out plans to localize production. to your development. There are no aspects to a com- Of course, it will take a while for us to reach the desired pany’s operations that are not important – everything level of localization – we will have to create a compo- is extremely significant, from staff training to adjust- nent base, find and certify suppliers, and so on. It’s a chal- ing the manufacturing process and developing prod- lenging and complex task that will take several steps to ucts according to market demand. complete. The first step will be setting up the assembly of products from the components that WIKA supplies How competitive is the market segment in which to its enterprises all over the world – the US, Europe, WIKA operates? What factors of competition are Asia and Latin America. In the long-term, we plan on at play here? increasing the degree of localization (for individual in- struments) to 70-80%. I’ll also note that the production I think that the opportunity to perform on a com- site, currently operating in Moscow, which makes two petitive market serves as a major incentive for the kinds of products, has enabled us to localize 20-25% of development of any company. Our competitors con- the manufacturing process for one product and 50% of stantly keep us in check, forcing us to pay attention the manufacturing process for the other product. and be creative. The products WIKA makes are not that unique, which is why we have a lot of competitors both on the international market and in Rus- Note from Capital Ideas: sia. I’ll also note that the market for technology in the utilities sector is particularly competitive here – WIKA is a private German company founded in 1946. The company there is a wide range or products of every quality specializes in the production and development of pressure, temperature level. Conversely, more accurate and high-quality in- and level measurement products and technology. WIKA began struments are in demand across spheres such as mechanical engineering, the oil and gas sector, energy manufacturing manometers seventy years ago. Since then, the company and the nuclear industry – industries where custom- has grown and expanded its sphere of activity, including by incorporating ers are extremely demanding in terms of quality and other companies into its structure. It currently owns about 40 brands functional capabilities. Not all manufacturers can meet these requirements, which is why WIKA has a worldwide. WIKA continues to develop today and plans to expand its high market share in these segments. positions both in Russia and globally. What are WIKA’s long-term plans on the Russian The WIKA product range currently includes a variety of instrumentational market? products and solutions, that can be used across a wide range of Our strategic goal is to become the absolute market industries, from oil and gas to the utilities sector. The company’s product leader, and I think this is a realistic goal. In Germany, range can be classified into four categories: measurement products and for example, WIKA accounts for up to 70% in its seg- technology for pressure, temperature, flow and level. Like the majority of ment. Our confidence in our success on the Russian market is based on several factors. First, we can offer German manufacturers, WIKA is a leader in its market segment and has high product quality. Second, we have manufacturing subsidiaries in over 50 countries. Moreover, WIKA actively develops and plants in the country. Third – proactive sales & mar- expands its production capacities. The company has opened plants in keting. We are confident that, by relying on the factors listed above, we can become the leading position many countries throughout the world. in our industries on the Russian market. ■

54 CAPITAL IDEAS January-March 2016 useful info

Department for external economic and international relations of the Government of Moscow Address: 13 Tverskaya Street, Moscow, 125032 Ph: +7 (495) 633 68 66 Fax: +7 (495) 633 68 65 E-mail: [email protected] www.dvms.mos.ru Department of Science, Industrial Policy and Entrepreneurship of the Goverment of Moscow Address: 22 Voznesensky Pereylok, Moscow, 125009 Ph: +7 (495) 957 05 10 Fax: +7 (495) 957 05 20 E-mail: [email protected] www.dnpp.mos.ru Department of Economic Policy and Development of the Government of Moscow Address: 21 Voznesensky Pereylok, Moscow, 125032 Ph: +7 (495) 957 72 21 Fax: +7 (495) 629 33 42 E-mail: [email protected] www.depir.ru Department of City Property of the Government of Moscow Address: 20 Bakhrushina Street, Moscow, 115054 Ph:+7(495) 587 70 87 Fax: +7 (495) 959 19 82 E-mail: [email protected] www.dgi.mos.ru Moscow Exchange Address: Office 1: 125009 Moscow, Bolshoy Kislovsky per, 13 Office 2: 125009 Moscow, Vozdvizhenka Str, 4/7, Bld 1 Phone: +7 (495) 363 32 32, +7 (495) 232 05 55 Fax: +7 (495) 705 9622 www.moex.com

January-March 2016 CAPITAL IDEAS 55 NOTHING VENTURED Philippe Pegorier: The crisis in Russia is a temporary phenomenon

Philippe Pegorier, the Chairman of the AEB Board, has been living in Russia for several decades. He speaks fluent Russian and truly understands the ins and outs of doing business in the country. In his interview with Capital Ideas, Mr. Pegorier talked about his life in Moscow and about how the AEB has dealt with the more challenging periods that have faced the Russian market.

Mr. Pegorier, how long have you lived in Russia? a great deal – there are new parks, more extensive public transport, better developed roads and so on. I moved here to work 32 years ago. However, prior to And I have noticed that the city authorities are fo- that, when I was still at school, I visited the USSR dur- cused on the average person – the city resident. This ing my summer holidays to practice Russian. I have is why they are trying to make the city more comfort- spent a total of 18 years living and working in Moscow, able for life, work, leisure and sport. and eight years in Kiev. Every capital in the world has its own distinctive What were your first impressions of Moscow? features. What do you think makes Moscow dif- What was the city like when you first arrived, and ferent? What needs to be done to improve the how different was it from the capital we see today? lives of Muscovites?

It was a completely different city! It was a very differ- In my opinion, the vibrant cultural life is the number ent era – one that probably should not be compared one thing that sets Moscow apart from other cit- with that of the present. In my opinion, Moscow ies. Every year, the city hosts a wide range of shows, was and still is one of the most beautiful cities in the concerts, exhibitions and other events. This is a city world – a city with unique buildings and architectural that never sleeps. I live close to Red October and I can monuments. Much like today, the city was brimming assure you that this district has more traffic jams at with life during Soviet times: there were a lot of cul- night than during the day! tural and social events. Of course, these events were different in meaning and content, just as the cars on By the way, in spite of the fact that traffic manage- the roads and the products in the grocery stores were ment in the city has improved, there are still traffic different also. Today, Moscow is a city of the new mil- jams. Of course, the Moscow government still has lennium, which changed before my very eyes. In the more to do in terms of improving the living standards past 10 years, the standard of living here has improved in the city. I am talking, among other things, of further

56 CAPITAL IDEAS January-March 2016

NOTHING VENTURED

development of the public transportation, a broader condment). I want to point out that the AEB carries shift to environmentally-friendly auto transport, and out this work daily in order to ensure favourable con- development of the road infrastructure. ditions for European investors in Russia.

In your opinion, how do people who live in Rus- I would also like to point out that the volume of Eu- sia differ from those who live in other countries? ropean investment amounts to 170 billion euro, which Is there anything that sets Russian businessmen accounts for 75% of all direct foreign investments in apart from the rest? the Russian economy. Almost all major European companies already have a presence in Russia, which is There are obviously differences. There are a lot of un- why finding new investors is a problem. The compa- forseeable people here, which of course is a factor that nies that are already present here are mostly increas- needs to be taken into account, especially when it comes ing their investment volumes in order to strengthen to work. There is another difference: a lot here depends their positions and expand their market share. on personal relationships between people. Russians prefer to do business with people they trust. Many Rus- Russia has gone through many crises, and the one we sian businessmen prefer to take their time in making a are dealing with right now is not anything out of the decision, but then expect quick and tangible results. ordinary. Regardless of whether or not there is a crisis, the most important thing is to keep working hard Mr. Pegorier, can you tell us how the Association – and to be persistent. It is worth noting that not a of European Businesses is doing in Russia right single major European company has exited the Rus- now under the current market conditions? sian market during this current crisis. Everybody has continued to maintain their operations here, know- Yes, these truly are challenging times. We are right ing that these challenging times will come to an end in the middle of a political conflict between the EU sooner or later. and Russia. At the moment, the AEB is working hard to maintain productive relationships with both Rus- In terms of the structure of the AEB, what are the sian and European government representatives and key committees? What role do they play? business partners. It is difficult to say which committees are the most We are maintaining constant dialogue with the Rus- significant. All of them are important and perform key sian authorities and are discussing various legislative functions. We have industrial committees and “hori- initiatives. The AEB has already expressed its disap- zontal” cross-sectoral committees. In terms of indus- proval of the sanctions imposed against Russia and trial committees, I would point out the Automobile counter sanctions by Russia. We are currently in talks Manufacturers Committee, committees working in regarding the legalisation on parallel imports, as well the agricultural sector, the Banking Committee and, of as on the laws on personal data and outstaffing (se- course, the Energy Committee, which bring together a lot of investors. Important horizontal committees include the Customs Committee, the Migration Com- Note from Capital Ideas: mittee, which works actively with the Russian Federal Migration Service, and many others. These are just Philippe Pegorier (54) has been the Chairman of the Board at an example. All 45 of the committees and working the AEB in Russia since May 2014 (re-elected in May 2015). groups that are part of the AEB accomplish a great deal. They hold about 300 internal meetings and 100 He has been the President of Alstom in Russia, Ukraine and different types of open events annually. In my opinion, Belarus since January 2011. Prior to his current functions, he the AEB is currently one of the most influential repre- sentations of foreign investors in Russia. held senior positions at the French Ministry of Foreign Trade, was the Head of the Economic Mission in Teheran, and was Mr. Pegorier, why does European business believe in the potential of the Russian market? What are the Economic and Commercial Counsellor at the French Em- the reasons behind this optimism? bassy in Ukraine. Mr. Pegorier is a graduate of the Bordeaux Business School and holds the Legion of Honour. In 2015, he I have been working in Russia for many years and know from experience that a crisis in this country is a received the Russian Foreign Ministry award “For Contribu- temporary phenomenon. Moreover, Russia is the big- tion to International Cooperation.” His hobbies include sport, gest country in the world – a real powerhouse. The course that the current government has set for im- reading and playing bridge. port substitution and localisation is a robust solution that will definitely yield great results in the future. ■

58 CAPITAL IDEAS January-March 2016 around the world Since the beginning of 2013 Capital Ideas has been successfully presented at Destination Moscow roadshows held in London, Frankfurt, Tokyo, Boston, New York and many other cities around the world

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January-March 2016 CAPITAL IDEAS 59 OUR INTERVIEW Melor Sturua: Obama envies Putin’s power

“The sanctions against Moscow don’t have a time limit at all, in my opinion. They remind me of the Jackson-Vanik amendment,” said the legendary journalist Melor STURUA in an exclusive interview with Sergo Kukhianidze, Editor-in-Chief at Capital Ideas.

Mr. Sturua, as an expert in US politics, are you heartbroken We aren’t. This is because, according to Putin, ground opera- over the fact that the US and Russia are fighting? tions in Syria or Iraq are out of the question. That’s the first thing. The other thing is that even if a Russian plane is taken I don’t think we are in a fight with America, though our re- down by ISIS, the story will not reflect poorly on our presi- lations do leave much to be desired. Strange as it may seem, dent. After all, there is a war going on. But if ISIS takes down a the relationship between the presidents play an important role US plane, this will reflect poorly on Obama and will also have here. It’s hard to figure out what we’re seeing here – a com- an effect on the upcoming elections – Hillary Clinton or some plete misunderstanding or an underestimation? In any case, my other Democratic candidate will be less likely to win. Obama is opinion is that Obama envies Putin. so afraid of this that he would rather sacrifice his image than a single US plane, a single US soldier. He has to be one hundred That’s an interesting turn! percent certain that this would not happen.

Yes, he envies Putin because he cannot do what Putin does. So this means that Vladimir Putin’s foreign policy advisors, who were well aware of all of this, decided to take advan- Do you mean at home or abroad? tage of the situation…

In the international arena, of course, specifically in the Middle Right, that’s what I’m getting at. I think we are very lucky East. What’s the problem? The problem is that Obama has a that Obama is the US president right now – he is a “lame year and a half left in the White House. For him, the most im- duck.” Our media is so caught up in the information war and portant thing right now is to not have coffins with American in criticizing Obama right now that we are unfortunately soldiers coming back to the US. This is a priority for him. Obama failing to realize this. Nobody is looking at things from a dif- does not want to leave Hillary Clinton – and I think she is most ferent perspective: had there been some right-wing Republi- likely to win the next election – with this burden. So his hands can like McCain in Obama’s place, we would have an entirely are tied – he cannot act as decisively as our president does. In a different situation on our hands. We would have a real proxy way, Obama is jealous of Putin’s power. war. But right now Obama is simply forced to go along with what we’re doing. He is paralyzed. If you think that you have Aren’t we also afraid of coffins with our own soldiers in better military equipment than Russia, if you have more re- them? sources than Russia but you can’t use any of this, of course

60 CAPITAL IDEAS January-March 2016 you’re going to be frustrated – even more so than you would So what will happen with Syria next? under regular circumstances. Perhaps this is why Obama’s reaction to Moscow’s decisions was so harsh. Obama would I don’t think anybody knows the answer to that question – not be acting this way if he were able to use the resources he it’s way too difficult of a situation to be able to predict the has at his disposal. future. A lot of sides have an interest in the conflict. Aside from Russia, the US and Europe, there are Iran, Iraq, Saudi Of course, Washington wasn’t expecting Russia to behave Arabia, Israel, Turkey, Qatar…we don’t know, for example, this way… how strong Assad’s army is. If his regime is already weak, nobody will be able to support it from the air. Moreover, Pu- Of course not! The thought that Putin would take such a bold tin says that we have time limits – we can’t bomb all of the step – military air raids to combat terrorists – did not even oc- time. There are constraints. Nobody knows whether or not cur to them. this will be enough to put Assad’s Syria back on its feet. In other words, the situation is so unpredictable right now that Whatever the case may be, is Russia feared now? only God or Allah, if they exist, know what’s going to happen in the Middle East in the near future. Undoubtedly. The sanctions against Russia weren’t prompted by the situ- But isn’t this a bad thing? ation in Syria, but they’ve obviously been toughened in the recent months. It looks like this will be going on for a while. It is bad, but the question is: why are they afraid of Russia? Be- What do you think? cause Moscow’s steps have not been predictable. They say: we can do something, but then Putin will raise the stakes again. I would take it a step further, actually. The sanctions against And if he does this, things may escalate to a nuclear limit. Which Moscow don’t have a time limit at all, in my opinion. They re- is why, as I said, nobody is really putting up any resistance. Not mind me of the Jackson-Vanik amendment, which linked trade the Americans, not the Brits, the Germans or the French. relations between the US and the USSR with the freedom of

January-March 2016 CAPITAL IDEAS 61 OUR INTERVIEW

emigration of Jews from the Soviet Union. It was passed in 1975 does not trust us completely. It’s important to remember that and existed many years after all channels had been opened. The we were at war with China once. If I were to pick a country to US always perceived this amendment as a tool it could use to help develop the Far East, I would opt for the Americans over apply pressure – if we did something they didn’t like, they could the Chinese. Trust me, dealing with American businessmen is a use it against us again. much safer bet.

Will we ever be able to transform our economy, or will we If only some day we could join forces with the US – there forever remain a “pipeline economy” – a country that relies wouldn’t be a more powerful force in the world! primarily on oil and gas sales? Easy to say… (Smiles) There is nothing bad about being a “pipeline economy.” How- ever, a country that wants to be truly great needs an economy Who do you think won the Cold War? that matches these ambitions – one that is grounded in advanced technology and innovation. And this is possible only if Officially, the US – the USSR fell apart! In spite of the fact that changes happen in both the economy and the socio-political this was a Cold War, Americans think they are entitled to repa- sphere. When there is a shift in public mentality – when people rations. And what kind of reparations could the winner in a Cold become independent and open – the objectives and ethics of War possibly demand? Perfect obedience. But Russia, as a great the society also change. nuclear power, will obviously never agree to this.

Do you agree that sanctions will give the domestic economy That’s what’s happening now. But not so long ago, at least the push it needs? after perestroika, Moscow was following Washington’s lead. It was almost comical: our leaders were almost in awe of Not really. Yes, there is the import substitution that every- their American colleagues… body keeps talking about, but this isn’t serious in my opinion. Because when we are removed from the world’s key financial Difficult as it may be to say this, I think that we had to go centers – Wall Street and London – we’re losing a great deal. through this period of humiliation. Sooner or later, we had Moreover, Russia is essentially at war right now. Every plane to have this happen to our country. I would have preferred launch, every round fired means millions of dollars are spent. for it to be shorter and more specific, but there are no coin- I admit that I always think of an uncomfortable parallel – cidences in life. Who knows: maybe Gorbachev-Shevernadze why did the USSR fall apart? If you remember, we were in and Yeltsin-Kozyrev helped the country overcome a difficult an arms race that we weren’t able to handle financially. This period… led to the collapse of our economy and, subsequently, the collapse of the Soviet Union. I think the Kremlin realizes this. An interesting thought: Russia survived by trading in the Because if we continue with the bombing, Americans may iron fist for the helping hand harshen the sanctions. It’s their only response to our actions. They can’t send 40 planes in response to us sending 20 – all Unfortunately, this seems to be a consistent pattern for us: the they can do is work with sanctions. And we don’t know how iron fist, then the helping hand… Seems like what we we’re re- this will affect domestic politics. ally lacking is our independence, which is what will at last give us freedom. So this means that Russia and America are enemies again? Sometimes it seems that things were better during the Cold No, in spite of the fact that there has been a downturn in Rus- War – everything was clear and easy to understand; there sian-American relations, I can’t say that this is the case. We are were rules that both Moscow and Washington followed. definitely not enemies; we are more like rivals. There was fear, but there was also mutual respect! Be honest: do you feel any nostalgia over the Cold War? But what kind of rivals? Previously, we were ideological rivals all over the world, but what about now? (Laughs) My nostalgia can be interpreted as a longing for the strong state that the Soviet Union used to be – one that was a Today we are what I would call regional rivals. Right now, this match for the US. Because of this, everything in the world was rivalry primarily manifests itself in the Middle East and in Eu- in order. Now, because the US refuses to accept Russia as an rope, because of Ukraine. It’s important to understand that we equal, there is chaos. can’t be America’s top rival right now, because China has firmly established itself in this position over the past few years. In other words, you are concerned about what’s happening in the world? Perhaps this is why we are such good friends these days? No, because I have no doubt that the conflict will not reach a I wouldn’t call it friendship in the exact sense of the term. It’s boiling point. I am sure that both Obama and Putin have an more like we’re using each other. At the end of the day, China interest in keeping peace. ■

62 CAPITAL IDEAS January-March 2016 useful info

Chamber of commerce and industry of the Russian Federation Address: 109012 Moscow, St. Ilyinka, 6/1, bldg. 1 PH: +7 (495) 620 00 09 Fax: +7 (495) 620 03 60 E-mail: [email protected] http://www.tpprf.ru/en/

Department for Work with Foreign Legal Entities and their Representative Offices Ph: +7 (495) 620 02 62, 620 02 22 Fax: +7 (495) 620 01 70 E-mail: [email protected]

Moscow Chamber of commerce and industry Address: 38 Sharikopodshipnikovskaya Street, bldg. 1, Moscow, 115088 Ph: +7 (499) 940 33 12 Fax: +7 (495) 675 03 16 E-mail: [email protected]

Main Administration for Service to the Diplomatic Corps (GlavUpDK) Address: 20 Prechistinka Street, Moscow, 119034 Ph: +7 (495) 637 23 26 Fax: +7 (495) 637 31 71 E-mail: [email protected] http://www.updk.ru

January-March 2016 CAPITAL IDEAS 63 MOSCOW VOCABULARY

This section of the magazine - “Moscow Vocabulary” – was born of remembering … Ronald Reagan, who appeared to be a fan – and collector - of Russian proverbs and sayings. Well, and we would like to guide you into a world of Russian idioms – just as bright and colorful.

ПАЛЬЦА В РОТ НЕ КЛАДИ – pal’tsa v rot ne kladi. (Don’t put your finger in his/her mouth) Explanation: One must be on one’s guard with this man because he’s likely to take advantage of another’s false step

ПОЛОЖИТЬ кого-либо НА ОБЕ ЛОПАТКИ – polozhit na obe lopanki. (To put someone on both his shoulder-blades) Explanation: To defeat an opponent in an argument, competition, contest

С ОТКРЫТЫМ СЕРДЦЕМ – s otkrytym s'ertsem. (With an open heart) Explanation: To treat someone or do something frankly, openly

С ЛЁГКИМ СЕРДЦЕМ – s l’okhim s’ertsem. Pictures by Anastasia Saifulina Pictures (With a light heart) Explanation: To do something free from discomfort, anxiety

РАЗБИВАТЬСЯ В ЛЕПЕШКУ – razbivattsa v l’ep’oshku. (To smash oneself into a flat cake) Explanation: To do next to impossible

ДУША НАРАСПАШКУ – dusha na raspashku. (One’s soul is open) Explanation: To be candid, sincere

64 CAPITAL IDEAS January-March 2016 ОДНА НОГА ЗДЕСЬ ДРУГАЯ ТАМ – odna noga zd’es drugaya tam. (One foot is here, the other is there) Explanation: To do something very quickly

КАК СНЕГ НА ГОЛОВУ – kak sneg na golovu. (Like snow onto the head) Explanation: To appear or arrive suddenly and unexpectedly

ВСТАВАТЬ С ПЕТУХАМИ – vstavat’ s petukhami. (To get up with the cocks) Explanation: To rise very early in the morning

НАСОЛИТЬ кому-либо – nasolit’. (To salt someone) Explanation: To do someone a bad turn

ЗАДАТЬ ПЕРЦУ кому-либо – zadat’ pertsu. (To give pepper) Explanation: To punish someone

ЗОЛОТЫЕ РУКИ – zolotyye ruki. (Golden hands) Explanation: A master of one’s craft

January-March 2016 CAPITAL IDEAS 65 BOOKSHELF

Chapter 23 What can you say about the way you are managed? On a daily basis? and on a month-to-month basis? This was an important question for me as it is always difficult to gauge how management are performing and how much they are liked or disliked by employees; and employees typically feel anxiety about discussing any issues they may have about their superiors.

on different projects, Directors have to deliver for clients, Diana ALL FINE too but she is in a general role (quarterly reviews).”…”Happy – likes James and Teri”…”Diana: great, and more management”…”Happy ”Happy, adequate”…”Likes the style and approach, good balance – to work with James on how to work with clients and write difficult has main direction but she is choosing how to get there”…”Good emails, also happy to work with Sofiya as valuable advice”…”SDS to have one-on-one meetings and feels Nadya’s authority and is a wonderful manager, James is a great manager”…”Directors up- professionalism with clients with issues and in the office – she is date work regularly, likes working for Nadya – she does not cause very clear with telling people where they need to improve and Di- anyone stress, but also is clear with targets and goals – likes her ana’s management occasionally”…”Fine, James is a good supervi- style of management”…”Directors do a great job day to day – all sor – they asked him to be flexible and not a micro-manager and know what she is doing”…”Results are managed in a democratic he isn’t”…”Perfect with Margarita – she is open and honest with way, not bureaucratic - but still controlled”…”Very wisely – en- good and bad work, she corrects Uliana and guides her. Quarter- courages best results and goes over mistakes”…”Likes it, Diana and ly meetings and “Teas with Teri” are good – makes everyone feel Boris are supportive and communicative. But thinks KPIs need to connected”…”Lucky to have good managers, Polina and Directors be looked at”…”Angela is a very strong manager and puts exact

66 CAPITAL IDEAS January-March 2016 goals, aims and priorities and she is very helpful – not just giving Frequency of meetings is an important aspect of manage- orders”…”Likes Angela – very happy and she learns a lot”...”Likes ment, and meetings that are either too frequent or not fre- Nadya as a manager, she is loyal to everyone and explains why to quent enough, can be de-motivating to staff. It is vital to find do it”…”Monday meetings and Friday reports are good and push the right balance. him – he is self-motivated”…”Likes it, likes that it is fast when needed”… If we are doing things correctly we should be running the following types of meetings: a weekly meeting regarding cli- I was very pleased to hear that the majority of our team is very ent updates on projects currently running; a monthly sale’s happy with our management and the style of management meeting; a monthly Consultant’s team meeting regarding within the company. This is a very important element in at- their results and their work-in-progress; and a quarterly tracting, and keeping, good people with us, and grooming oth- meeting to review, assess, and track their annual progress- ers to join our management ranks in the future. to-date.

Overall, I think it is fair to say that our management team is Daily management is not needed and I decided to speak to very open and hands-on and that they approach all issues and management to ensure this was not happening. The recruit- meetings with care, preparation and research, and profession- ment business is quite fast-paced and the team and manage- alism. It is also good to hear that some of our managers have ment need time to focus on their work in order for us to pro- been flexible in their approach to supervising the team in the vide the required results to our clients on their projects. way they need to be. We have always had, and tend to hire, a mature team, in terms of their attitude, style and approach to Employees want: their careers and their responsibilities at Staffwell, and I think that the responses here illustrate that. • Weekly, monthly and quarterly meetings; and • To not have daily meetings. Employees want:

• One-on-one meetings with their management; NOT MANAGED • Management to not over manage, when appropri- ate; “Day-to-day not managed, month-to-month is just review but not • Management that guide, and are open and honest managed; would like more dialogue and discussion, but is also self- with criticism and praise; motivated, but would love to share more with someone”…”Managed • One-on-one meetings with the company’s CEO, on fine, fills in reports, given freedom, does not need management – just occasion; room to deliver”…”Prefers day-to-day management. For team mem- • Help from management on how to work effectively bers and Polina needs weekly results meeting on her results”…”In all with clients, and how to write proper e-mails - inter- honesty I do not feel that I am managed, I know what needs to be nally and to clients; done and get on with it. I do believe I have a lot more to offer in a • A good digital CRM system that is capable of holding wider real sales management role”…”Polina for banking, nobody for them to task; pharma – feels lost, but system is clear overall”…”Very efficient but • Their management and colleagues to keep the team not clear who manages (Directors, Polina or Diana?); perhaps sev- on top of on-going projects; eral managers?”…”Updates system works well but Staffwell has au- • A style of management that combines control with tonomous team that can work independently and without a lot of democratic aspects; supervision which she thinks is very good”…”Does not see Albert as a • Supportive and communicative management; motivator or leader – she is self-motivated”…”Guidance, not manage- • KPIs to reflect the current market situation; ment – likes this soft approach”…”Not managed, but happy”… • Strong and helpful management that deliver clear goals and priorities with a lucid rationale; In a few topics addressed above, it was satisfying for me to • Management that are loyal to the Company and to hear that the team felt they were managed well. However, the team; here there are one too many comments that point to our lack • Management that are quick to respond to issues or of good management in certain areas, and this raised a real inquiries; and cause for me to be concerned. • Pro-active management that push an individual or the team to deliver, when needed. We have several people commenting here from our front office team, who do not feel they are managed at all by their supervisor, and two people who do not even seem to FREQUENCY know who their direct report is. A few people also feel their monthly meetings are just reviews of their results without “Weekly, Friday meetings – Director updates”…”Contact with Diana much discussion, motivation, guidance, or leadership. These several times a week –all is good”…”Month-to-month or weekly – do are training and development issues that I made a note to not need day-to-day”… look further into.

January-March 2016 CAPITAL IDEAS 67 BOOKSHELF

As CEO of Staffwell, these are issues in which I must share the company, which enabled him to carry out his responsibili- some of the blame. We spend a lot of our time, focus and ties - without confusion as to what needed to be done, or any money on training the professional staff, but overlook the bureaucracy in getting it done. corporate need to have properly trained and developed management. At times, we falsely assume that if people have had Diana is our current Commercial Director in charge of leading prior management experience that they will be proficient in our front office team, having been promoted from a Director that task - often without regularly assessing their perfor- role in our Sales Team. I like her and believe in her potential, mance. but fear she is over-loaded - as she has taken on some areas of responsibility outside of her direct remit. I also need more I made a note of all the comments here and decided to per- time to work with her and to get to know her better. However, sonally look into options for improving the performance of our I am glad she is well-liked and viewed as having a democratic management team. I also noted the desire of one of our top management style. Directors to move into Sales Management for us – something to take into serious consideration as he has done well and I Employees want: believe he is ready. • General management that are visible and truly work Employees want: hard for the company, not sit behind closed doors and attend to their personal matters; • Managers to be prepared for review meetings and to • Management that treat all members of their team offer sound professional advice, guidance and leadership fairly and with respect; and during monthly reviews; • Management that is firm but also democratic in • Management to pay equal attention to each individual style. on the team, not just a select few; and • To be promoted when they feel they are ready and have earned it. COULD BE BETTER

“Albert is the manager, but he is not right for the Consultants – they BETTER NOW need to be managed by a top Consultant or higher. Polina would be a great manager for Consultants, she understands all”… “Great! The only bad manager was Robert”…”Trust, mutual respect, at first thought Diana was too much on the side of the Consultant’s Our Directors work independently in selling our recruitment team (Nastya and cheating) – all is good now”…”Adam had a differ- services to clients. They then update our clients on any work- ent management style but he liked that too – he was very demanding in-progress, and many other areas of the sales cycle that we and watched every step and move – which kept Ivan at attention, but have. They are also responsible for: managing and leading any now the style of Diana is more democratic and more successful for junior Directors under them and in their industry areas of ex- our company”… pertise; managing and leading the Consultant’s team working in the same areas of expertise; and managing and leading any Robert was not the greatest General Manager for us, and we Consultants in the company who might be assigned to work let him go before his probation period ended. I gave Robert on various recruitment projects in other industry or occupa- very simple tasks to carry out while I went on my annual ex- tional areas of focus. tended Summer holiday: learn our business and about our clients by going out with our Directors team on a bi-weekly ba- On occasion, the Consultant’s team feels that the Directors sis; sit among the front office team to watch over them; and are not the best overall managers for them, and this is not the get to know the staff better. first time I have heard this. Perhaps it is time for a change. Po- lina is one of our top Directors and she wants to move up and I came back from my holiday and learned from several Direc- contribute more. Also, she was formerly a Consultant, so she tors that not only did he not go out into the field with our Di- knows that job and the issues the team encounter. Our Com- rector’s team as often as I requested, but he almost never sat mercial Director manages both our Director’s and Consultant’s with the team. Instead, he stayed in his office with the door teams, but I feel there is room for everyone, and there is room closed surfing the Internet for personal use most of the time. for change. He was a nice guy and I am a nice person and a fair CEO, but I also have a business to run. Employees want:

Adam was a firm General Manager and had a good four-year • Management that is suitable for them (and sometimes run with us. Adam’s stern handling of the team was a good the current management is not suitable); and counter-balance to my friendly, light-hearted and out-going • Management that have come up through the ranks personality with everyone. However, I was strict with Adam and that really understand and respect them, and un- on a consistent basis, on the goals and direction I wanted for derstand their role and issues. ■

68 CAPITAL IDEAS January-March 2016 NOTHING VENTURED The way to investment is through the stomach The Russian Capital Hosts Moroccan Festival

If the majority of Muscovites used to have trouble peaches, strawberries, potatoes, tomatoes. But Moroccan pro- ducers are ready to expand the range of products to include understanding what couscous is, the number of people sweets and fish (wild-caught, not farm-raised). Another priority who adore this delicious oriental dish is certainly for the country is the export of olives and olive oil – this is one of the bullet points on the long-term agricultural development starting to climb. The number of volunteers who program in Morocco. wanted to try couscous during the cooking show at As many people know, the Russian government imposed an em- Dorogomilovsky market, at least, was quite high. bargo on certain food products from the EU, US, Canada, Austra- lia and Norway in the beginning of August. The embargo affected he show was a part of the second Big Moroccan Festi- imports of fruit, vegetables, and milk and meat products. At the val, which took place in Moscow in November. The main same time, the Russian Federal Service for Veterinary and Phyto- objective of the festival was to introduce city residents sanitary Surveillance started negotiating with countries in Latin to Moroccan products. The first step in this direction, America and the Middle East regarding the launch or expansion which the city authorities took last year, turned out to of export programs for these food products. All participants of beT a great success. After the festival, the assortment of products the business breakfast were convinced that both Russia and Mo- from Morocco expanded considerably at local supermarkets. rocco would benefit from increasing direct trade volumes. “Out of 100 various agricultural products we brought in last year, 50% became staples in supermarkets in Moscow,” says Zahra Georgy Petrov, the Vice President of the Russian Federation Maafiri, head of the Moroccan Center for Export promotion. Chamber of Commerce and Industry, brought up an interesting Maafiri brought up these numbers during the business breakfast figure during the discussion on trade and economic relations be- “Russia-Morocco: century-long traditions and new opportuni- tween our countries. He said that, aside from oil and gas prod- ties for business cooperation,” which was organized by Kommer- ucts, Russia also supplied Morocco with grain – it accounts for sant and took place at the Four Seasons hotel. more than 10 percent of exports. He also pointed out that our relations with Morocco should not, of course, be limited to trade The speakers pointed out that the lion’s share of Russian imports and tourism – it is necessary to seek opportunities for invest- from Morocco are currently fruits and vegetables - mandarins, ment cooperation across different spheres. ■

January-March 2016 CAPITAL IDEAS 69 THIS AND THAT How did Anna Karenina

The average American will always respond to the question “How are you?” with “Great!” A Russian, on the other hand, will never give a one-word answer – a Russian will tell you, in detail, exactly how they are doing that day. Why?

lot of foreigners think that Rus- It’s also worth mentioning that Russians do sians aren’t very friendly. This isn’t not have any topics that are considered ta- true. As a matter of fact, it’s hard boo during a conversation. Russians can, to find a nation of people who like for example, inquire how much money you to socialize as much as Russians make – a subject that is usually off-limits in do.A To be fair, it can be difficult for a Rus- the West. “They will ask you anything they sian to simply say hi to a stranger – the ba- are curious about, ask for advice or tell you sic “Hello,” that is. But if contact has been what they think you should do regardless of made, there is nothing you can do to stop a whether or not you want their opinion. They Russian – they will never stop talking! don’t make much of a distinction between people they know and complete strangers, or For example, a Russian will answer the ques- at least they get over that barrier very quick- tion “How are you?” (which a Westerner will ly,” says philologist Alla Sergeeva. According usually give a one-word response to) with a to her, there is no class, social, professional detailed explanation of how things are ac- or age differences that are taken into consid- tually going – what happened and whether eration in a conversation between two Rus- or not it was a good thing. Sometimes the sians. Europeans who are unprepared can be urge to talk is so strong that people spend at a loss when they encounter such casual the first hour at work discussing their lives familiarity, unexpected questions, and over- before they actually get down to business. sharing. For the average European, this kind “I suddenly understood why everybody is so of communication takes time. But if a Euro- poor in Russia,” noted the writer Lev No- pean does find themselves in this situation, vozhenob, “It’s because silence is golden.” it’s best not to act put off by what’s happen- Pictures by Anastasia Saifulina Pictures

70 CAPITAL IDEAS January-March 2016 meet count Vronsky? ing. Otherwise, Russians may take you to be ing a thaw, at nine o'clock one morning, a arrogant and conceited. Russians do not like train on the Warsaw and Petersburg rail- these qualities and people, and may judge way was approaching the latter city at full you if you don’t want to socialize. speed.” Yes, Prince Lev Myshkin and mer- chant Parfyon Rogozhin met on the train, It seems that Russians are ready to talk which is where Rogozhin first talks about to each other just about anywhere – on the dazzling beauty Nastassya Filippovna. the street, in the café, at the office, on A lot of novels and stories follow a similar the bus…but there is one place where you storyline – even today! There is a meet- surely won’t be able to avoid a conver- ing during a trip, a heart-to-heart that can sation: during a long trip on the train or change a person’s entire life – the universal plane. “You may not want to talk and you story of Russian literature. may even make it obvious that you don’t want to talk, but ultimately you have to It is no wonder that Russians value words play by the rules,” Alla Sergeeva says, “The – both written and spoken – more than long trip with nothing to do, the monotony, perhaps any other nation. But this doesn’t the limited amount of space – all of these mean that people will believe every word things will serve to lift the psychological that comes out of your mouth. If there is no barrier between you and a stranger and action to back up what you’re saying, disap- will make him or her unusually talkative.” pointment follows. Remember how popu- In her opinion, this was picked up on by lar Mikhail Gorbachev was in the beginning Russian writers a long time ago, which is of glasnost and perestroika, how admired why so many plotlines in classical Russian for his ability to speak frankly? It was this novels follow this very scenario. Where, same frank speech that cost him his popu- for example, did Anna Karenina meet her larity later, because his words were never lover, Count Vronsky? On the train. And backed up by actions! As the popular Rus- how does Fyodor Dostoyevsky’s The Idiot sian saying goes, “Nothing exhausts more begin? “Towards the end of November, dur- than empty talk.” ■

January-March 2016 CAPITAL IDEAS 71 NEIGHBORS In spite of everything, mutual interest has not subsided Riga successfully hosted Days of Moscow

“We are paying one of the highest prices for the The fact that the authorities stopped the Alexan- drov Ensemble from entering the country was also sanctions that were imposed on Russia, and the discouraging to Mr. Ušakovs. “We are unsure that counter-sanctions,” said the Mayor of Latvia’s the people of this ensemble can offer us a completely neutral event without a political agenda,” capital Nils Ušakovs on the eve of the opening of said Latvia’s Minister of Culture Dace Melbārde.

Days of Moscow in Riga, “Moreover, Latvia has Even so, in spite of all of this, Days of Moscow lost over 1 million Russian tourists and Russians were held successfully in Riga. A third of the city’s residents attended the events – both Rus- have stopped buying real estate on the Baltic sians and Latvians. Take Zurab Tsereteli’s exhibition, for example, which was organized by the coast.” Moscow Museum of Modern Art and the Russian Academy of Arts. Thousands of Riga residents attended the event.

In response to the question of what the most important thing about art is to an artist, Tsereteli

Sergey Cheryomin pointed out that Moscow and Riga are old partners with a long history of mutually beneficial cooperation.

72 CAPITAL IDEAS January-March 2016 replied: “Love, love and relaying all the multiple “Even back in Russia very few people have seen The business facets of love.” When the artist appeared in public, this film,” head of the Moscow House Yuri Si- forum "Moscow- Riga 2015: New the exhibition visitors rewarded him with rounds lov told Capital Ideas, “The screening room was Opportunities for of applause. packed. Both Russians and Latvians applauded Growth" became Govorukhin.” the main event of The exhibition in Riga featured 40 works by Zurab the Days of Mos- cow in the Latvian Tsereteli, which included both color and black- Still, the main event of the Days of Moscow in the capital. and-white silkscreens, as well as unique pieces Latvian capital was the business forum Moscow- completed using the cloisonné technique. Latvian Riga 2015: New Opportunities for Growth. Forum visitors had the opportunity to see both well- participants, which included many famous politi- known exhibits and pieces that are rarely exhib- cians, businessmen, economists and journalists ited. On opening day, the artist held a workshop from the Baltic States, discussed issues relevant for school children in the Riga Congress Center. to cooperation between the two capitals, ways to improve the business climate, and attract invest- The Moscow House in Riga put together a grand ments into the economies of the two mega-cities. celebration for fans of Russian cinema, featuring a screening of the new film by Stanislav Govorukhin “The interest entrepreneurs and politicians took The End of a Beautiful Era. in the forum speaks to the fact that the crisis

What is the best way to attract investments to Moscow and Riga? This is question round table participants tried to answer.

January-March 2016 CAPITAL IDEAS 73 NEIGHBORS

The exhibition in Riga included between the EU and Russia, between Latvia and to 2013, amounting to $303.3 million. According 40 works Zurab Russia, will subside and eventually come to an to data from the first half of 2015, trade turnover Tsereteli brought end,” Nils Ušakovs said, cheerfully, “This is what compared to the same period in 2014 decreased to the Latvian capital, includ- we are all waiting for.” by 1.7 times and amounted to $90.8 million. ing unique pieces completed using Riga’s mayor thinks that when there is finally The head of the DVMS expressed hope that the the cloisonné peace and agreement, all of Latvia’s closest EU forum will help participants understand and ap- technique. partners – Lithuanians, Estonians and Finns – will preciate the effort that the Moscow government be competing for a place on the Russian market. and the Russian government are putting into cre- “We want to help Latvian business today so that ating favorable conditions for developing mutu- we have a good place to start from in Russia. We ally beneficial collaborations. hope that Moscow entrepreneurs will not lose interest in Riga either,” Nils Ušakovs said. At the forum, Sergey Cheryomin presented the investment opportunities the Russian capital has The head of the Russian Delegation – Minister of to offer to the participants and guests. The minis- the Moscow Government and Head of Department ter stated that, according to plans put together by for Foreign Economic Activity and International the Moscow authorities, 2,500 square kilometers Relations (DVMS) Sergey Cheryomin – stressed of new territory will be developed in the next 10-15 that both capitals are long-term partners with years. The area will house over 100 million square well-established traditions of mutual cooperation. meters of residential, office and manufacturing real estate. The development of the Moscow Riv- “As representatives of a large mega-city, we think er has also become an important project, projects that if we do not continue to strengthen economic, on the development of transport infrastructure humanitarian and cultural ties, relations between have already been implemented and an intelligent our countries and our cities will deteriorate,” Mr. city transport system has been created. Moscow Cheryomin noted, “The business community is the is always ready to share its intelligent and inter- foundation on which political ties are built. We are active technologies with our colleagues in Riga. trying to attract investments to Moscow and use The minister also said that the construction of a all the knowledge, experience and innovative so- third interchange circuit with 17 major transport lutions in urban development you can offer. We interchange hubs is another ambitious project. do all of this solely in the interests of the residents The renovation of industrial zones, which take up of the biggest mega-city in Russia.” a total area of 20,000 hectares in Moscow, will also be significant. There is also the task of restor- According to official data, Latvia placed 53rd on the ing and renovating parks, creating pedestrian ar- list of Moscow partners in terms of trade volumes eas and reconstructing Moscow streets. “Our goal in 2013, and 54th in 2014. Trade turnover between is to preserve the city’s cultural image, to make it organizations registered in Moscow and Latvian more recognizable and accessible to pedestrians,” partners decreased by 15.9% in 2014 compared Sergey Cheryomin said.

74 CAPITAL IDEAS January-March 2016 Sergey Cheryomin noted that the decision to create a medical cluster in Moscow with participation from foreign specialists has already been made. He invited Latvian companies to participate in this project and to localize production in Moscow.

A cooperation agreement between the Latvian and Moscow Chambers of Commerce was signed in the City Hall. The document was signed by the Senior Vice President of the Moscow Chamber of Commerce and Industry Vladimir Platonov and Chairman of the Board of the Latvian Chamber of Commerce Janis Endzinsh.

A meeting between the leaders of Russian organizations in Latvia with the heads of the Moscow Center for Humanitarian and Business Coop- eration with Compatriots Abroad – the Moscow House of Compatriots – took place on the side- lines of Days of Moscow in Riga.

“The Russian capital maintains contact with our compatriots constantly. This is in spite of the economic challenges that impacted a lot of programs in Moscow this year. This year alone, the city government allocated 252 million rubles for working with Russians who keep in contact with their motherland even after moving abroad,” said Vladimir Lebedev, Director of the Moscow House of Compatriots.

Mr. Lebedev asked those who came to make proposals during the meeting. He asked those present to not forget that the priorities for the allocation of funds remains the same – organizing days of Russian culture, camps for children and students, anti-fascist activities, support for WWII veterans and support for labor veterans.

The largest and most interesting proposals included the following: the establishment of a museum house dedicated to the famous Soviet sculptor Vera Mukh- ina (who was born and lived in the Latvian capital) in Riga; a monument to Mother Maria (Skobtsova), who was born in Riga and was killed by Nazis in the Ravensbrück concentration camp; preserving the memory of the prominent architect Francesco Bar- tolomeo Rastrelli from the Late Baroque era, who was born in Italy, studied in France and worked in Russia and Latvia for a long time (jointly with the mayor’s offices in Riga, Paris and Rome).

There are about 120 non-profit organizations for Russian compatriots currently active in Latvia. For comparison’s sake, there are ten times more similar Latvian organizations. Russian-speaking citizens make up 37 percent of Latvia’s population (about 700,000 people). ■

January-March 2016 CAPITAL IDEAS 75 Our interview

Alexander Veshnyakov: I’m learning latvian Ambassador Extraordinary and It so happens that my history with Latvia dates all the way back to the 20th century. In the 1970s, I had my first training Plenipotentiary of the Russian here on the vessels of the Latvian Shipping Company. Latvia is a beautiful country that is home to hard-working, talented Federation to Latvia people. In order to understand them better, I have been learning Latvian since 2008, when I was first appointed Ambas- sador to this country. As a diplomat, I think that relations between Russia and Latvia and between Riga and Moscow have a bright future ahead.

76 CAPITAL IDEAS January-March 2016 tremely important to us,” he says, “to maintain friendly ties between the two capitals, because the crisis between the EU and Russia will be over sooner or later.”

The Mayor of Riga will be turning 40 soon. He is one of the youngest and most influential politicians in Latvia. He is also the first Russian mayor of the Latvian capital. Ušakovs is extremely popular in the country right now and, according to the Constitution, can run for President in a year.

As a side note, I’d like to point out that the Moscow Govern- ment is also sticking to its word: cooperation continues, and is even expanding, with just about every European capital. A lot of international projects are still being implemented in Mos- cow with participation of foreign capital from the best, most well known companies from all over the world.

Journalists often ask me to name specific organizations and people who do the most to maintain peace and harmony in society, to maintain friendly ties between Russia and Latvia. I always name the Moscow House in Riga, which has been headed by Yuri Silov for the past 10 years. This House has become a true home for thousands of Russian compatriots living in the Latvian capital. There is a wonderful movie theatre equipped with the latest technology, a big Russian restaurant, comfortable rooms for hosting seminars and conference, as well as a big bookstore that is supplied with new Russian literature directly from Moscow. The House exists with support from the Moscow government.

Who is all of this being done for? For all of those bound together by the Russian language. Russian is still very popular in Riga. There are even studies on this, which show that over 60 percent of the capital’s residents speak Russian at home.

We are also friends with the Moscow House. In February, Rus- sian embassy employees usually celebrate their professional holiday (Diplomat’s Day) here. We want people in Latvia to know and understand what exactly we do here. Recently, we celebrated a national holiday here – Russian Unity Day. We are also going to have Christmas and a New Year celebration here: Grandfather Frost will be travelling here from Veliky Ust- yug on a special invitation.

The Days of Moscow in Riga is one of the ways in which the The Russian holidays, concerts and artistic events at the Mos- close ties that, in spite of everything, bind our two capitals to- cow House are attended by Latvians as well as our compatri- gether are demonstrated. It is worth remembering that there ots and Russian-speaking residents. is a lot of instability in the world right now, and our opponents are doing everything in their power to further complicate rela- During the Days of Moscow, Russian students who live in tions between Russia and the European Union. Latvia were granted merit-based “Mayor of Moscow Scholar- ships.” This was a big deal for the students and their parents. “At the peak of the crisis, making the economic sanctions against 60 young people from various regions of the country received Russia even stricter demonstrates that mutually beneficial coop- scholarships. The Moscow scholarships are a significant help, eration with Latvia should be continued,” the head of the Rus- especially for those who truly need it. Although they don’t sian delegation and Minister of the Moscow Government Sergey amount to much in euros, these scholarships give young peo- Cheryomin said at the opening of the business forum in Riga. ple the opportunity to focus on their studies without thinking about how to pay their bills. I know people who would not be We hosted the Days of Moscow at this time because of the able to get a higher education without monetary help from personal stance Riga’s Mayor Nils Ušakovs took. “It is ex- the Moscow Government. ■

January-March 2016 CAPITAL IDEAS 77 TRAVEL The secrets

This year marks 80 years since the five-point stars replaced the two-headed eagles atop behind the Kremlin stars of the towers of the Moscow Kremlin. Today, these stars are among the most well-known symbols of the Russian capital. Few people know, however, the long story of how these stars ended up on the towers. The secrets behind the Kremlin stars value of the double-headed eagles. In his response, the artist indicated that the eagles are not to be considered monuments and therefore should not be protected by the state.

The protocol from the CEC meeting of the USSR, dated 12.13.1931, states the following: there is a proposal to include 95,000 RUB, the cost of taking down the eagles from the Kremlin towers, into the budget for 1932. It was proposed to replace the eagles with the state emblem, but there was not enough money in the budget in 1932. Those who want to see what the two-headed eagles looked like atop the Kremlin towers can do so by searching for Grigory Aleksandorv’s legendary film “Circus.” 21 minutes in, there is a shot of the double-headed eagle on top of the Spassky tower. NKVD’s Special Project

he final decision to take down the double-headed ea- gled was made by Politburo in the summer of 1935. The TASS report states: “The Council of the People’s Com- missars of the USSR, the Central Committee of the All- Union Communist Party (b) decided to take down 4 Teagles (Spasskaya tower, Nikolskaya tower, Borovitskaya tower and Troitskaya tower), along with 2 eagles from the Historical Museum, by November 7, 1935. It has also been decided to install five-point stars on the 4 Kremlin towers by this date.”

The commandant of the Kremlin and NKVD were responsible The Eagle is a proud bird for accomplishing this task. It was said that Joseph Stalin him-

efore the five-point stars appeared at the Kremlin, the Kremlin towers were adorned with two-headed eagles – they key symbol of the Russian empire. The first eagles appeared around 1600, and the last one showed up atop the Spassky tower in 1912. All of the birds were as- sembledB from separate parts held together bolts, and then gilded. It may seem that the Bolsheviks, who hated any and all symbol of the “old regime,” would have taken down the eagles as soon as they got the chance.

Not so.

The eagles continued to adorn the Kremlin towers until 1935, although the authorities started to contemplate taking them down in 1930. Back then, the authorities sent a an official let- ter to the artist Igor Grabar, asking him to assess the historical

January-March 2016 CAPITAL IDEAS 79 TRAVEL

self took part in developing the sketches. Officially, the task to solved the issue by designing and building a unique crane for design and manufacture the first Kremlin stars was assigned to each tower. A console was installed through the window of a two Moscow factories and studios of the Central Aerohydrody- tower, and then used to install the crane. namic Institute (TsAGI). It may seem unbelievable, but Gorky Park hosted a presenta- The famous designer and academician Fedor Fedorovsky de- tion to introduce Muscovites to the stars before they were veloped the sketches for the stars. It turned out, however, that mounted on the towers. The stars were placed on special drawing the stars was a lot easier than making them. The stars pedestals with red bunting and projectors. According to were made out of stainless steel, and then covered in gilded cop- those who witnessed the presentation, the precious stones per sheets. shone in a myriad of different colors. On October 24, 1935, the first star was mounted on the Spasskaya tower. The next The memo in which Lazar Kaganovich agrees to allocate 67.9 day, a five-point star appeared on top of the Troitskaya tow- kg of gold for the gilded sheets has also been preserved. Both er On October 26 and 27, two more stars were mounted on sides of each star were decorated with the state emblem – the the Nikolskaya and Borovitskaya towers. Hammer and Sickle that weighed 240 kilograms and adorned with precious stones: crystal, amethyst, alexandrite, topaz and aquamarine. The total number of precious stones amounted to The First Attempt over 7,000 pieces, and fifty of the best jewelers in the country were summoned to work with them. onetheless, regardless of the efforts of specialists who created the towers, the first attempt This would have all been well and good, but the stars turned out was unsuccessful. By 1937, the precious stones to be too heavy – the Kremlin towers had to be reinforced just so that decorated the stars suddenly stopped shin- they could be installed. Moreovoer, the stars turned out to be dif- ing. It turned out that the soot and smog from ferent both in the way they were decorated and in terms of size. Nthe big city, as well as unfavorable weather conditions The star atop of the Spasskaya tower was highlighted by the rays caused the gems to darken. The stars themselves were also coming from the star’s center. (Today, this star sits atop of the too big and did not fit in well with the architecture of the Rechnoi Vokzal building in Moscow). Kremlin.

The Troitskaya tower star had the same rays, but shaped like Something had to be done! spears. The Borovitskaya tower had two contours, one inside the other, while the Nikolskaya tower had no pattern at all. The dis- After lamenting the money and time spent in vain and cal- tance between the rays of the Spasskaya and Nikolskaya towers culating new, optimal sizes for the stars, the government or- was 4.5 meters, while the distance with Troitskaya and Borovits- dered new ruby stars. This time, they added another star for kaya towers totaled 4m and 3.5m, respectively. the Vodovzvodnaya tower. Semi-precious stones placed inside of stars made them glow. It was crucial to produce stars Installing these stars on the Kremlin towers turned out to be a that would be able to withstand corrosion and would also be big challenge – the type of machinery needed to mount the stars easy to clean from the outside. Unfortunately, the second at- simply didn’t exist. Specialists from Stalprommekhanizatsiya re- tempt was also a challenge.

80 CAPITAL IDEAS January-March 2016 The thing is that the legendary ruby glass was made with se- The star on top of the Spasskaya tower was hidden from the lenium and gold additives. But when the first batch of material eyes of Muscovites for a short period of time when it was was taken outside, it turned out that the glass looked almost covered up due to restoration work on the Kremlin’s main black in bright daylight. In order the remedy the situation, spe- tower in 2014. That year, there were many rumors that the cialists proposed to add an inside layer of milky-colored glass. star would be replaced with the double-headed eagle after This time, the stars lit up like real rubies. restoration work is complete. Needless to say, these rumors turned out to be false. The lamps in the star were replaced The powerful 5,000-watt lamps also caused a lot of problems with metal-halide ones, which only consume a fifth of the – they could easily get too hot and cause the ruby glass to crack energy the star used to require. ■ or burst. Huge ventilators with capacity of 600 cubic meters of air per hour were used to cool them down. Those who like to save on electricity would be interested to learn that the Kremlin lamps can never burn out because there are two filaments. If one burns out, the other continues working. The lamps, along with the ventilators, are checked tow times a day. There are also two ventilators per star. Brighter than Before

n spite of the fact that the creators of the ruby stars tried to take every nuance into account, there have been several instances when the stars went out.

The first time this happened was during WWII. Because Ithe lights were a great navigation tool for enemy aircraft, the authorities put the lights out, covered them in tarp, and painted windows on the walls of the Kremlin. Unfortunately, when the tarp was finally removed, the stars were covered in holes. The stars had to be restored and only appeared back on the towers in March 1946. The renovation work actually made the stars shine brighter, since experts decided to add a third layer of glass, made out of crystal.

The second time the stars went out was in 1996, when the famous director Nikita Mikhalkov turned them off when filming scenes for The Barber of Siberia at night.

January-March 2016 CAPITAL IDEAS 81 LIFE&CULTURE Fatal attraction or tango nights

The time before the New Year can be hectic, and we seldom have time to enjoy the beautiful things in life. This is a shame, because there are a lot of interesting events happening in Moscow at the end of December. Even after the holidays, the city’s cultural life continues to brim with life.

82 CAPITAL IDEAS January-March 2016 ans of classical music have a lot of pleasant surprises coming their way before the New Year. On December 29th, the Tchaikovsky Concert Hall will be hosting a performance by the Mariinsky Theatre Orchestra, directed by F the legendary conductor Valery Gergiev. This unique music collective from St. Petersburg is included in the list of top 20 best orchestras in the world (according to a poll of the leading music critics from Europe, America and Asia). On December 31st, the same venue will be holding a New Year’s celebration featuring Yuri Bashmet – a brilliant conductor and musician who is considered to be one of the most prominent classical music performers in Russia.

hose who enjoy ice-skating – one of the most popular sports in Russia – also have a present waiting for them. Many former ice dancers in Russia go on to have brilliant careers, and Ilia Averbukh is one such suc- cessT story: today, he is considered to be a trendset- ter in the genre of ice shows and tours. This winter, Ilia will be presenting his new show – “New Bremen Town Musicians.” The project is set to be a true hit, as some of the most famous ice-skating icons in Russia are involved in the production. Olympic champions Tatiana Navka and Roman Kostomarov are going to be starring as the Princess and the Troubadour. The fact that Tatiana Navka married Vladimir Putin’s press-secretary Dmitry Peskov in an elaborate ceremony in Sochi makes this show even more interesting for the audience.

The show organizers promise original decorations that incorporate new 3D technology, pyrotechnics and circus tricks. Of course, there will also be songs that Russians have known and loved since child- hood: “Beam of the Golden Sun,” “Nothing Better in the World,” and “They Call us Byaki-Buki.” The show will take place at the new VTB Ice Palace in December and January.

he exhibition dedicated to the 150th anniversary since the birth of Valentin Se- rov, which opened in the fall, can also be considered to be an important winter event. The artist has been called one of the foundersT of modern art in Russia. He has painted dozens of portraits, the most famous of which are “Portrait of the Artist Isaac Levitan,” “Portrait of the Artists Konstantin Korovin,” and “Girl with Peaches.” The exhibition takes up three floors of the Tretya- kov Gallery and has been extremely popular with visitors. During the first week following the opening, it attracted over 25,000 of the capital’s guests and residents. The are about 259 works included in the exhibition, many of which have been shipped to Moscow from abroad, including from the Musée d'Orsay in Paris. Aside from paintings, the exposi- www.wikipedia.org

January-March 2016 CAPITAL IDEAS 83 LIFE&CULTURE

tion also includes documents, letters and pictures Moscow’s master of scandals and one of the most that illustrate the artist’s life story. The exhibition is widely-discussed directors in the city. “The play scheduled to stay open until January 17th, but there is based on the famous novel by Alexander Du- is a good chance this date will be extended. mas and the myths surrounding his work,” he says about the play, “However, we aren’t using any of oscow’s vibrant theatre scene also has a the text itself. The play features a completely new lot to offer. There will be a big premiere romantic, detective and mystical plot that incorpo- of “Musketeers. Saga. Part One.” at the rates the novel’s original characters – D'Artagnan, Moscow Art Theatre. The play is the Athos, Aramis, Porthos, Milady, the King and the M brainchild of Konstantin Bogomolov – Cardinal.”

84 CAPITAL IDEAS January-March 2016 n February 2nd, the Bolshoi Theatre will host the premiere of the legendary ballet "Don Quixote." This famous character has been regularly featured on ballet stages all over the world for almost 150 years – the ballet wasO first shown at the Bolshoi Theatre in 1896 and has been a popular hit since. "Don Quixote" is perhaps the only classical ballet that originated in the Bolshoi Thea- tre. Over the years, the ballet has featured famous starts such as Maya Plisetskaya, Natalia Bessmertnova, Mikhail Lavrovsky, Lyudmila Semenyaka, Alexander Godunov, Olga Lepeshinskaya, Asaf Messerer and many others. So who will be dancing this winter? It’s a secret so far, but the lead will be revealed soon. www.mht-chehova.su he Stanislavski and Nemirovich-Danchenko Moscow Academic Music Theatre is going to be hosting the premiere of “Aladdin’s Magic Lamp,” the music for which was written by the famous Italian composer Nino Rota. His name is well- Tknown to film buffs, as the composer has worked closely with Federico Fellini, Luchino Visconti, Franco Zeffirelli and Francis Ford Coppola. Many people know that Nino Rota wrote the music for the cult classic The Godfather, but few know that he also wrote several operas.

he Vakhtangov Theatre will be showing a new play called “Take the Umbrella, Madame Gau- tier.” Seeing Yulia Borisova – a legendary actress who turned 90 in March – is worth going to see this sad Christmas story. Yulia Borisova’s Tfantastic energy always thrills the audience. She is in great shape, and can put many younger stars to shame.

The benefit play for the Vakhtangov prima is a detective story about the search for inheritance. During a big snowstorm, a small group of people gets together in the French Alps: the hotel manager Madame Gautier (who has escaped from her step children as they were taking her to a mental institution), as well as the stepchildren themselves, who are looking for their stepmother.

any dedicated theatre fans in Moscow want to see another unique actress, Vera Vasileva (who also turned 90 this fall) at the Moscow Satire Theatre. In honor of her anniversary, the program now fea- M tures a new play called “Fatal Attraction,” directed by Andrey Zhitikin. The play is a variation on the famous Hollywood picture Sunset Boulevard. Billy Wilder’s film about the tragedy of forgotten stars won three Oscars and three Golden Globes. The 90-year old star is very excited about this role, especially considering that Vera Vasileva is still quite creative. “I’m not one of those actresses who can star in any role,” the actress said in an interview, “I can’t play a funny old woman, for example. I can’t make the audience laugh in this role and I wouldn’t even know what to do in order for this to happen. It’s not my forte. The character in ‘Fatal Attraction’ was perfect for me: a Hollywood

star who has lived a fairly complicated life, who was www.vakhtangov.ru

January-March 2016 CAPITAL IDEAS 85 LIFE&CULTURE

somewhat whimsical, could seduce people she didn’t even like that much – has lived the true life or a movie star.”

n February 12th, there is a major event for everybody who truly appreciates tango. The State Kremlin Palace will be hosting a new show called “Astor Piazzolla’s Tango Passion,” which will be accompanied by a symphonic Oorchestra. This show is dedicated to the Valentine’s Day. Argentine tango Dancers, who will be travelling from Ar- gentina for the show, will be performing for the Moscow audience. The show organizers have come up with a dress code for the visitors: everybody who comes in a red outfit will receive a special present. The outfit does not necessarily have to be entirely red – just an accessory like www.satire.ru a red scarf or purse will be enough. The organizers hope that this dress code will help to create a special atmosphere: thousands of people wearing red!

n March 8th (International Women’s Day), the State Kremlin Palace will be hosting the annual Valentin Yudashkin fashion show. Showing the spring collection of Russia’s most famous designer at the Kremlin Pal- Oace has already become a tradition. March 8th is always a holiday in Russia – women receive flowers, gifts and greeting cards from friends, family and colleagues. This is why many women consider March 8th to be the most wonderful day of the year – they are treated like goddesses, majestic and overpowering. Women are frequently treated to a night at the restaurant, the theatre or a concert. Yudashkin’s show is an excellent

86 CAPITAL IDEAS January-March 2016 choice for men who want to surprise the women they love with something truly unique. Since 2008, all of the city’s fashion connoisseurs have been coming to the show to catch up on the latest trends and see Russia’s biggest pop stars perform together.

arch will bring another surprise for all fans of legendary groups from the 90s – the Olympic Stadium will be hosting a show by the Norwegian group A-ha, which used to be popular all over the world. In 1991, the collectiveM performed at the legendary Marakana stadium in front of 198,000 fans – a world record.

When A-ha performed at their last show in Oslo in December 2010, the group’s fans were extremely dis- appointed – the band members claimed they would not perform again in the future. The concert in 2016 will be their first concert in Moscow after the 5-year break. The group announces the release of their new album, Cast in Steel, in March at a press conference in Berlin. The album was released in September 2015.

“Everything just happened naturally,” Pål Waaktaar- Savoy told the press, “Morten Harket just came to my studio and I showed him some tracks I was working on. He would sing over them, and then select the ones he liked until we had a total of 10-12 songs. The great part was that we could work whenever we liked, since we didn’t have any contracts or tours to worry about. It’s like we went back into the 80s, to my parents’ house where we wrote our first songs – just a few instru- ments, the song and the voice.” ■ www.philpskov.ru

January-March 2016 CAPITAL IDEAS 87 FACELife& leisureTO FACE Andrei Sharonov YAKHROMA Sports and Entertainment Park

This modern multi-purpose complex is located in Dmitrov district, Moscow Oblast – just 46km outside of MKAD. It is ideal for both family weekends and loud get-togethers of people who want to celebrate on the Moscowslopes. never Yakhroma Park will surprise guests with a wide selection of seasonal entertainment and attractions. In the winter, this means snowmobiles and ski slopes of various difficulty levels for both newbies and experienced skiers. Recreational activities can be combined with relaxation: there is an Aqua center and bathhouse (hammam, caldarium (Roman bath), Finnish sauna, ice fountain, massage, spa). Slope No. 1 – There are 2 trails for downhill tubing, as well as a baby lift. There is a tube rental spot. Address:sleeps 46km from MKAD on Dmitrovsky Slope No. 2 – A gentle slope for beginners. Length – 250m, height difference – 40m. Baby lift. Highway, exit Stepanovo, Yakhroma, Slope No. 3 – 2 tracks that share an overpass. Length – 350m, height difference – 40-50 m. There are 2 Dmitrovsky district, Moscow Oblast parallel ski lifts between the tracks. Andrei Sharonov, Track 3А – “Stadion”: wide and flat Yes,with ita isdrop a challenge in the upper as well.part of But the itslope is a realand opportunitya smooth finish. and what Tel: +7 (495) 981-89-39, fax: +7 (495), 981-89-39 Track 3B – has a steep upper part, whichis important – becomes less it is steep a reality. in the middle. Both tracks are meant for ex- Deputyext. 221 – Moscowinformation center Mayor(general for Economicperienced athletes, Policy, as they are used for training sessions and competitions (including Russia Cup). inquiries) Slope No. 4 – There are two different tracks running from the launch pad: “Dlinnaya” and “Lesnaya.” The Isn’t it a challenge? Tel:shared +7 (495) 981-89-38, with fax: CAPITAL +7 (495) 981-89-38 IDEAS histotal vision length ofof the slope is 600-650m, and the height difference is 65m. There is a t-bar lift that ext. 232 – hotel complex (booking) transports two people at a time. Moscow as an internationalTrack financial4A – wide with centersmooth transitions,Yes, it recommended is a challenge for as athletes well. But of itvarious is a real levels. opportunity and what Website: http://ya-park.ru Track 4B – ideal for extreme skiing. is important – it is a reality. Additionally: There is an ice skating rink with an ice skates rental spot, a center for extreme driving, a platform for paintball and strikeball (about 2,000 square meters that can hold up to 200 people at a time).

88 CAPITAL IDEAS January-March 2016 You don’t have to book a trip abroad to go skiing or snowboarding in the winter. There are a lot of places close to Moscow where you can not only hit the slopes, but also relax with your whole family. Capital Ideas has selected the best ski resorts near Moscow. LISYA GORA Year-round ski complex

The ski complex is equipped with a modern system that allows management to artificially add snow to the slopes, extending ski season from the end of November to the beginning of April. The tracks are constantly reinforced with special technology. The five slopes are meant for both professionals and beginners. Slope No.1 – for those who are just starting to explore skiing or snowboarding. Slope 1а – this training slope is intended for beginner skiers and snowboarders. Visitors are only allowed to enter if accompanied by an instructor. The slope is about 80m in length and the height difference is no more than 20m. The slope is equipped with a baby lift for the convenience of guests. Slope 2 – the sharp slope in the beginning and a long ramp provide ideal conditions for polishing technique. Moreover, the slope is equipped with a baby lift 300 meters in length. Slope No.3 – ideal for experienced skiers. The slope is 70m in width and 350m in length. The height differ- Address: Leonovskoye Highway (700 meters from ence is 63. Visitors can get to the top of the slope with the help of a one-person saucer-type ski lift. the Moscow-Nizhny Novgorod highway), Slope No.4 – the maximum length is 400m, with a height difference of mover than 65m. The slope is ideal Balashikha, Moscow Oblast for experienced skiers, snowboarders and true fans of extreme sports. There is enough space to pick up some real speed – the slope is about 80 meters wide! Tel: 8-985-210-09-06 Tubing slope – this is a special track intended for tubing, about 80m in length. Website: http://www.foxrock.su Additionally: there is a chalet-style hotel and a restaurant that serves original, fusion-style meals.

SOROCHANY Sports resort

49km from MKAD on Dmitrovsky Highway, there is a true Swiss suburbia in the Klim-Dmitrov ecologically clean territory of the Dmitrov district. The Sorochany ski resort is one of the most modern sports resorts in the Moscow region. Skiing fans can enjoy mountains up to 225 meters in height, over 10 tracks with height differences of up to 90m, width of up to 70m and length of up to 1,050m. There are lifts from Austria and Italy are installed on the slopes: two-person and four-person chairlifts, as well as three drag lifts, two baby lifts for snow tubing and a training course for children with a playground. Slope No.1 – for beginners. Slope No.2 – a relatively steep start and a wide shallow end. The slope is equipped with a drag lift. Slope No.3 – a great slope to practice technique. Even, not steep. There us a slight bend toward the end, and the slope is equipped with a drag lift. Address: Kurovo 68, Dmitrovsky district, Slope No.3а – an offshoot of slope No.3 to a four-person lift and a new drag lift. A fairly steep but short slope. Moscow Oblast Slope No.4 – a wide slope with a varying terrain, equipped with a 4-person drag lift. Relatively steep. The Tel: +7 (495) 788-85-44, fax: +7 (495) 788-85-42 varying terrain (bends and hollows) makes this slope particularly interesting. Slope No.5 – a black slope (by the resort’s standards). First there is a gentle blue section, then a sharp bend Tel: +7 (495) 788-81-72, fax: +7 (495) 788-81-78 – and a black steep section. This slope may be too difficult for beginners. Equipped with a 4-person accommodation service and drag lifts. Website: http://www.sorochany.ru Slope No.6 – split into two parts. If you look down from the top, the right side is red, more even, flat and best for intermediate skiers. The track has a varying terrain – there are slight bends and hollows. The left side (also central) is black and has a significant bend in the beginning, as well as one at the end. Slope No.7 – a smooth start that transitions to a short, relatively steep section that is great for polishing technique. Equipped with a drag lift. Slope No.8 – the longest slope that starts at the top of the hill. There is a smooth section first – this is where visitors decide which slope to take (4,5,6,7). If you go straight the whole time, the slope branches off into multiple tracks that run through a scenic forest. The track is not difficult, but is very interesting. Equipped with a 2-person lift. Slopes No. 9-10 – new slopes that start at the Ski House. One track is straight and the other one spirals down, then branches off. Slope No.9 has a very steep section that can be bypassed. Slope No. 10 branches off into two tracks – f you go straight, the slope won’t change. If you go left, though, you will hit an interesting steep section. These are black slopes by the resort’s standards and are equipped with a two-person lift. Additionally: there is a playroom for kids who are 3-12 years of age. There is also an ice skating rink for those who enjoy ice skating.

January-March 2016 CAPITAL IDEAS 89 FACELife& leisureTO FACE VOLEN Sports Park

Over the course of its existence, the park has acquired a great reputation as a popular and trendy place to spend winter and summer holidays. Volen is a real ski town with a developed infrastructure – professional tracks, equipment rentals, a ski school, a hotel and cottages, restaurants, shops and much more. If you like downhill skiing and snowboarding, but don’t feel like going all the way to the Alps, there is a place just 50km outside of Moscow that you can visit to get your fill of winter sports – the sports park Volen. There are even two places like this, since the park is made up of two complexes – one is located in Yakhroma, and another one is in Stepanovo (4km away from the first complex). Both complexes have tracks where visitors can show off their skiing and snowboarding skills. Yakhroma has more tracks – there are a total of 14, including 2 training tracks). There aren’t as many in Stepanovo (4 so far), but they are longer and there is a bigger height difference. In Yakhroma, the length is 450 and the Address: Troitskaya 1, Yakhroma, Dmitrovsky height difference is 70m, while in Stepanovo the length is 960m and the height difference is 90m. district, Moscow Oblast All tracks are equipped with lighting and snowmaking systems. Moreover, all tracks also have lifts – there Tel: +7 (495) 993-95-02, (495) 993-95-40, are 11 in Yakhroma (7 drag lifts, 3 baby lifts and 1 conveyor life) and 2 in Stepanovo (two-person chair lifts). +7(495)981-88-94(multi-channel) Additionally: the park offers an opportunity to diversify your leisure with the following activities: swimming, Website: http://www.volen.ru fishing, cycling, tennis, table tennis, archery, crossbow and board games (chess, checkers, backgammon).

SHUKOLOVO Recreational Center “Leonid Tyagachev Skiing Club”

The oldest ski resort in the Moscow region, which also serves as the training base for Russian national ski and snowboarding teams. The club is located at the highest point of the Klin – Dmitrov mountain range, 40 km outside of Moscow. There are 9 ski tracks 46-600m in length located on the 95 ha territory. Slopes No.1, No.4 and No.6 are for beginners, while slopes No.3 and No.5 are for expert skiers. Slope No.5 is 415m long, which makes it the longest slope on the resort. Slope No.2 is the most challenging, and only the most experienced athletes use it. Beginners will appreciate a slope designated for those who are still learning how to ski – it’s equipped with an escalator-type lift. There is a special slope with a baby lift for children. There are five ropeways for the main slopes, along with drag lifts. Address: Shukolovo, Dmitrov district, There is a snowboard park for snowboarders with jumps and rails. All slopes are equipped with sighting Moscow Oblast. systems. The quality snow-making system makes the winter season at Shukolovo last from November until May. The tracks are well maintained with snow reinforcing technology. The rental equipment inventory is Tel: +7 (495) 980-79-79 periodically updated with athletic equipment from world-famous brands. Experiences instructors are also Hotel Tel: +7 (495) 980-79-79, +7 (916) 224-31-93 available for those who want to sharpen their skills. http://www.shukolovo.ru Additionally: for those who are into wellness, there is a spa center with a juice bar and other relaxation amenities.

90 CAPITAL IDEAS January-March 2016 useful info

City Government Address: 13 Tverskaya Street, Moscow 125032 Ph: +7 (495) 633-51-90 http://www.mos.ru/en/index/php

Moscow Investment Portal http://www.mosinvest.mos.ru

Moscow Innovation Development Center Address: Voznesensky Per., 22, Moscow, Business Center Usadba, Ph: +7 (495) 225-92-52 http://en.inno.msk.ru/

Business Protection Headquarters Address: Voznesensky Per., 22 (5th floor), Moscow, Business Center Usadba Ph: +7 (495) 957-05-10 http://dnpp.mos.ru/service/the-headquarters-for-the- protection-of-entrepreneurship/general-information/

Department for Competition Policy Address: 12 Pechatnikov Pereylok, Moscow, 107045 Ph: +7 (495)-957-99-31, +7 (495) 957-99-77 Fax: +7 (495) 957 99 95 E-mail: [email protected] http:// www.tender.mos.ru

January-March 2016 CAPITAL IDEAS 91 FOOD&DRINK

Fabrice Lecoin: Cooking

withWho said that the story of the famoussoul Normandy-Neman Aviation Regiment is over? Today, it continues in the very center of Moscow, at Blagoveshensky Pereulok 5. There’s just another turn in the plotline!

erhaps the thing that stands out most when guests first walk into the Nor- mandy-Neman restaurant and bistro is the comfortable atmosphere. Nothing irritates the eye; the warm terracotta color of the walls both soothes and awakens the appetite. Appetite is the main thing Fabrice Lecoin, theP Head Chef of this Moscow restaurant, wants from his visitors. When talking to him, one can’t help think of the famous quote from Pascal Ichak (another French chef), who was brilliantly played by Pierre Richard in the Oscar-winning film Les Mille et une Recettes du Cuisinier Amourex: “Treasure your appetite like you treasure your first love!”

Monsieur Lecoin also thinks that all of our preferences, including our culinary preferences, develop when we are still children. “For our entire lives, the things we love eating most are the things our parents and grandparents cooked for us,” he says. It comes as no surprise that everything he prepares at Normandy-Neman can best be described as “homemade.” Dishes include salads, cold snacks, pates, soups, meat and fish dishes and desserts.

92 CAPITAL IDEAS January-March 2016

FOOD&DRINK

By the way, Fabrice has been in the culinary world for thirty years. He started as an apprentice at a restaurant not far from Lyon when he was just 16 years old. He liked cooking so much that he decided to learn everything he could about this art form. He ended up getting his degree in culinary arts in Lyon – the well-known gastronomic capital of France. After he completed his education, the young man was immediately recognized for his talent. His first place of employment was at the Michelin restaurant in Toulouse. Although the restaurant only had one Michelin star, the chef got a good start here.

As Fabrice grew professionally, so did the number of stars in the restaurants where he worked. Monsieur Lecoin also traveled the world and worked abroad, including in French restaurants in the US and Eu- rope. Fabrice first came to Russia’s capital in the summer of 2001. He worked as a chef at various famous restaurants in Moscow until he got a job with the French embassy in Russia.

94 CAPITAL IDEAS January-March 2016 In spite of the fact that he had a high-profile job, Fabrice always dreamed about having his own business. He got the opportunity at the end of 2014, when two Frenchmen with extensive experience on the Moscow market – chef David Desseaux and designer Jean-Michel Cosnuau opened Normandy- Neman in the center of Moscow. “Our restaurant has a French name, but it’s not exclusively French,” Fabrice explains, “After all, we are in Russia. I want both Russian and French guests to visit the restaurant.”

This philosophy is reflected in the restaurant’s menu. Along with French onion soup, wild Burgundy snails and apple pie with ice cream, it also features Rus- sian favorites such as solyanka, kharcho, pozharski cutlets and blinis. Overall, just about anybody can find something they like at Normandy-Neman. The chef is particularly proud of his specialties: beef on the bone in Bordelaise sauce or steamed lamb with vegetables and spices, for example. The lamb is so

January-March 2016 CAPITAL IDEAS 95 FOOD&DRINK

tender and juicy that you can almost eat it with a to one of the local markets himself to find the bird he spoon! The restaurant has also established a tradi- needed. He and his colleagues also carefully inspect all tion of dedicating certain nights to dishes that are of the products provided by the suppliers. local to specific regions in France. No matter what kind of dish he is making, Fabrice All of the products used in the restaurant are fresh. always makes sure to highlight: “We are not a gas- Normandy-Neman has a contract with several sup- tronomic restaurant. We make real, homemade pliers that deliver meat, fish, vegetables and fruit to food.” So what is the most important thing to Fab- the restaurant. “Everything is produced domestically, I rice when it comes to cooking? “I want the person want local products,” Fabrice says. The restaurant also to get up from the table with a smile,” he says, “and takes special orders. One time, for example, a client to leave the restaurant in a good mood. I pour my asked for a rooster cooked in wine sauce. Fabrice went soul into my cooking!” ■

96 CAPITAL IDEAS January-March 2016