Russians Under Attack by Careless Drivers... And The Government That Enables Them
Firemen working to recover the remains of a car hit by a Lexus on Moscow's Kutuzovsky Prospekt, September 14, 2007
One week ago Russia Blog reported about one government official's motorcade, which purposely collided head-on with an old Lada sedan. That car and its passengers were unlucky enough to be caught on a highway that was supposed to be closed to civilian traffic. The government motorcade that collided with the car was carrying Vyacheslav Lebedev, head of Russia's Supreme Court. The accident left one Russian citizen dead and two more severely injured. In spite of the reduced terrorist threat in the Russian Federation, the dangerous practice of escort vehicles knocking civilian cars out of the way of an official motorcade is still fairly common in Russia. This particular accident has captured the public's attention because of the overwhelming number of witnesses. Apparently, the police "clean-up" crew could not do its job fast enough to prevent ordinary citizens from snapping pictures with their cell phone cameras.
The driving situation in the streets of Russian cities, particularly in Moscow, has always been chaotic (see this, this and this, or just scroll down the crime section of Russia Blog). But a new development is even more shocking. In separate incidents over the last two days alone, drivers have been involved in hit and run accidents with three children.
The biggest story in Russian business this week is the UK-based Belgravia Investment Group's announcement of a $2 billion dollar joint venture to develop Russian business parks. The deal involves the Immo Industrial Group, a Belgium-based manager of industrial properties in Europe, and the Russian restaurant holding company Rosinter, which is best known for bringing Kentucky Fried Chicken to Russia.
The total size of the development will be two million square meters (21,527,820 sq. ft.) At least 44 industrial tenants have already leased space, and the Hilton Hotel chain has agreed to build hotels near all fifteen sites, including in Moscow, St. Petersburg, Novosibirsk, Rostov-on-Don, and several other cities. Rosinter will build Sushi Planeta, TGI Friday's and 1-2-3 Cafe restaurants to serve employees at the sites.
Scott Shorey, an American expat from Atlanta, Georgia who has lived in Moscow for three years, has kindly agreed to republish his photos from the MAKS Air Show here at Russia Blog. This is the second post in a series of photo posts about the summer of 2007 in Moscow.
Sugar free Red Bull in Russia? Yep, they've got it
As those of you who live in a foreign country know, it is the "small victories" which make all the frustrations of a different culture seem irrelevant. Several weeks ago I had three such small victories.
1. I "discovered" that it IS POSSIBLE to buy Sugar-Free Red Bull. Red Bull mixed with vodka and a twist of lemon is a great drink. The problem for me had been "uglivodee" (aka carbs) or way too many calories in a standard can of Red Bull. Problem solved.
Iraqi Foreign Minister Zebari meeting Russian Foreign Minister Lavrov in 2004 Photo by: China Daily
On Thursday Iraqi Foreign Minister Hoshyar Zebari met with Russian Foreign Minister Sergei Lavrov in Moscow. The topic of discussion was reopening Iraq to Russian companies eager to reconstruct the war-torn country's delapidated infrastructure. Mr. Zebari declared that "our main goal is to sign a memorandum with Russia regarding economic trade cooperation". Mr. Lavrov pointed out that much of Iraq's infrastructure was designed by Soviet engineers in the 1970s and that Russia has a lot to offer in terms of restoring and modernizing equipment and buildings.
The main sticking point in the negotiations, according to Kommersant, remains Moscow's offer to forgive $10 billion in Iraqi debt leftover from the Saddam era in exchange for restoring Saddam-era contracts signed to redevelop Iraqi oil fields. The current Iraqi government is sensitive about mineral rights, but wants Moscow to write off 80% of Iraq's debts to Russia in return for oil field concessions.
"Knight at the Crossroads" (1878) by Viktor Vasnetsov It seems like the problem of the crossroads existed in Russia long before Putin...
Professor Nicolai Petro, one of Russia Blog's contributors, recently returned to the U.S. from Russia, where he participated in the Valdai Discussion Club and got a chance to observe President Putin up close. The Valdai discussion group is an invitation-only forum for select academics and journalists sponsored by Russia's Council for Foreign and Defense Policy and RIA Novosti news agency and that has been held every September since 2004.
In this post, you will find Prof. Petro's comments to the media, including interviews with Al Gurnov on Russia Today TV, Bob Seay on WRNI public radio and "The Chet Curtis Report" on New England Cable News.
Anna Politkovskaya was murdered on October 7, 2006
Today Russian prosecutors charged the former head of Chechnya's Achkhoi-Martan District with complicity in the murder of Anna Politkovskaya. Shamil Burayev was detained on September 12. Mr. Burayev's lawyer, Pyotr Kozakov, spoke with the Associated Press and Russia's Interfax News Agency on Friday. Mr. Kozakov said that his client is innocent and intends to defend his good name.
According to the AP: "Burayev was the head of Chechnya's Achkoi-Martan district administration for eight years until 2003, when he was fired by then-Chechen President Akhmad Kadyrov [father of the current Chechen President Ramzan Kadyrov]. He also ran for president of the region."
Last month Russian Prosecutors detained eleven suspects in the murder of Politkovskaya. Two of the detainees have since been released, and one of the other suspects, former FSB Lt. Col. Pavel Riaguzov, is now being prosecuted on unrelated corruption charges.
Elena Khisamova, Deutsche Bank Russia's acting Head of Equity Capital Markets, provided the headline of the day with her estimate that 200 Russian companies, representing an estimated $500 million in combined market capitalization, have the potential to launch IPOs in the near future. In addition to her remarks about Russia's rising smallcaps, Mrs. Khisamova added that in the first nine months of 2007, Russian companies have recorded over $22 billion in initial and secondary placements.
In her article, Illinois law student Eugenia Izmaylova frequently cites Bill Robinson, a Bellevue, Washington based attorney who has been practicing law in Russia and the former USSR since 1990. In particular, Ms. Izmaylova quotes Bill Robinson's thoughts on the development of intellectual property law in Russia since the collapse of the Soviet Union (a transcript of Mr. Robinson's remarks - along with commentary from his co-panelists at the Real Russia Project forum - is available for downloading in PDF format here)
Click on the extended post to read excerpts from the Illinois Business Law Journal article.
Vodka and Credit Cards: IHT Profiles Russki Standart Group
MOSCOW -- Business consultants at McKinsey were aghast when a Russian entrepreneur, Roustam Tariko, told them he wanted to call his new bank - for which they had drawn up the plans - the same as his vodka brand, Russian Standard.
He overruled them and Russian Standard Bank, created in 2000, is now among the top three most profitable banks in Russia and the largest specialized consumer finance bank, according to the credit rating agency Standard & Poor's.
"The vodka business is an excellent business and the credit business is brilliant," said Al Breach, a Moscow-based economist and strategist for Russia at UBS.
Market research commissioned by Tariko at the time showed that Russians trusted the vodka brand enough to borrow from a bank with the same name - highlighting the differences between consumers in Russia and in developed markets, where alcohol and banking are never mentioned in the same breath.
Click here to read the rest of the article from the International Herald Tribune.
A banner ad for Russian cellular provider MTS near the Kremlin
For months, the transition to a new President next year has been a hot topic for speculation in both the Russian and Western media. While President Putin's surprise appointment of Viktor Zubkov as Prime Minister has dominated the news from Russia this week, business marches on. Today Mr. Zubkov's statement that he would consider a run for the presidency has drawn a lot of attention to the previously obscure technocrat. But what do Russia's top executives expect in the upcoming election year?
On September 10 and 11, 2007, Reuters hosted the Russian Investment Forum in Moscow. The list of speakers was a who's who of corporate Russia (click on the extended post to read more)
Small News, Big Surprise: Russian Government Resigns - But Who Will Be the Next President?
The practice of the Russian government resigning a few months prior to the parliamentary and presidential elections has become a new Russian tradition. Such moves help reorganize the top bureaucrats faster and more smoothly. A stable presidential cabinet saves time and energy for the future president and parliament, who will hopefully not get dragged into months of shifting ministers around - one of the major pitfalls of a parliamentary government.
Sergey Ivanov or Dmitry Medvedev, both former Deputy Prime Ministers, were widely viewed as the top candidates for the job of Prime Minister. However, President Vladimir Putin pulled a major surprise from his sleeve and granted no favors to either potential successor. The new interim Prime Minister, Viktor Zubkov, whose appointment still needs to be approved by the Duma, has no real chance of becoming the next President of the Russian Federation. Therefore, the race for the presidency has become more challenging and less predictable.
Yesterday, September 10th, a Russian police Mercedes--speeding over 100 miles per hour in a lane used by oncoming traffic--collided with a Russian Lada, injuring (or possibly killing) its driver and a passenger. The accident was documented by witnesses with cellphone cameras and covered by the Russian news site Gazeta.Ru.
According to witnesses, the accident occurred after traffic police failed to provide adequate warning about a lane closure on the Kaluzhskoe highway for the motorcade of, presumably, the Head of the Russia's Supreme Court. Early news reports said that the collision involved a common police vehicle. However, eyewitness photographs show a vehicle (a brand new Mercedes E-Klasse) far beyond the means of a "common policeman."
Russia/Ukraine to Restart Antonov 124 Production Russian An-124s Flying into Iraq, Afghanistan
A Ukrainian Antonov Airlines An-124 landing in Southern California in 2006
One of the little noted news stories to come out of the MAKS 2007 air show was the announcement by Motor Sich OJSC and Ukraine's Antonov Design Bureau that they would jointly resume production of the Antonov 124 "Ruslan" cargo plane. It has 25% more cargo capacity than the largest plane in the U.S. Air Force inventory, the C-5 Galaxy.
The An-124 and its successor, the An-225, were originally designed in the late 1970s to support Soviet oil and gas development in Siberia. In 1992, after the collapse of the Soviet Union, all new production of Antonovs came to halt. During the Nineties, when transport aircraft were still in high demand but civil and military aviation in the former USSR was in terrible shape, several Antonov jets crashed. However, since the year 2000, Antonov 124s and the -225 have safely logged thousands of flight hours without incident in some of the harshest climates on Earth.
Five Million Families in Russia Earn Over $30,000
Kommersant, September 6, 2007
Five million families in Russia annually earn more than $30,000, according to the report of
Rosgosstrakh insurer. The number grew by over 60 percent over a year.
Given that the family size averages 2.7 persons here, roughly 13.5 million have the income above the medium one. Besides just wealthy, Russia has 160 families that are the millionaires in terms of the U.S. dollars and 12,000 families have revenues above $5 million. It isn't surprising that 80 percent of millionaires live in Moscow and in the Moscow region.
The wealthiest category of the Russians (revenues above $5 million) widened by a half past year. The families with revenues of $30,000 to $100,000 manifested the highest growth of 71 percent.
Click on this link to read the full story. Click on the extended post to read excerpts from coverage of the Russian economy by Reuters and the Wall Street Journal.
From left: President Bush, Japanese Prime Minister Koizumi, Singapore Prime Minister Lee, President Putin and Chinese President Hu Jintao at the APEC Summit in Santiago, Chile in 2004 (Photo by: Australia Department of Foreign Affairs and Trade)
Yesterday Presidents Bush and Putin met at the Asia Pacific Economic Council (APEC) summit in Sydney, Australia. Before the 2007 APEC summit, Putin and Australian President John Howard announced a deal for Russia to purchase Australian uranium to supply Russia's nuclear power industry.
"During the Soviet era, we built about 30 major reactors in nuclear power stations in Russia," Putin said. "In the coming 15-20 years we are planning to build about the same amount, and of course for these purposes we need this Australian uranium. As regards supplies to other countries, if such a need arises, our own resources will suffice." The deal with Australia institutes safeguards to insure that Australian yellowcake will not be exported to a third country without Sydney's consent, and that the uranium will be used solely for civilian purposes.
Meanwhile, Russian Economic Minister German Gref told the Russian press that Russia has the full backing of the U.S. to join the World Trade Organization. Gref added that negotiations would continue throughout September to resolve any lingering issues.
Click on the extended post to read the transcript of Bush and Putin's remarks.
Starbucks has finally come to Moscow, but what's next?
The phenominal growth we are now witnessing in Russia can and should be compared to the much more hyped boom in China. Although Russia's stock markets did react to the subprime volatility emanating from American credit markets, the Russian economy is not nearly as vulnerable to shocks originating from abroad as it was just ten years ago, when the devaluation of Asian currencies and the near-bankruptcy of the Yeltsin government devastated the ruble. Clearly that was then, this is now. The New Russia has shrugged off the recent corrections in both the U.S. and Chinese stock markets to continue what has been a record-shattering year for IPOs and foreign investment.
A few weeks ago the Russian Federal State Statistics Service produced a report indicating that Great Britain was the largest investor in Russia, investing $15.0 billion in the first half of 2007. Ironically enough, the vast majority of this new investment -- approximately 80% - came in the second quarter of the year, when a diplomatic row erupted between London and Moscow over the Alexander Litvinenko case. In spite of Moscow's refusal to turn over its citizen Andrei Lugovoy, or London's refusal to extradite the exiled oligarch Boris Berezovsky, politics did not seem to affect business at all. Most of the major UK investments for H1-2007 went into the wholesale and retail sectors.
On Monday RosBusinessConsulting reported that Russia is experiencing the highest recorded birth rate since the collapse of the Soviet Union. According to the Russian government statistics presented by First Deputy Prime Minister Dimitry Medvedev, two million women with children under the age of 18 months are now receiving child support allowances in Russia. In the first six months of 2007, the nation recorded 142,000 live births, with the birth rate increasing by 6.5% over the same period last year. Russia's mortality rate, one of the highest in the industrialized world, also declined by the same amount.
Video of David Zaikin, CEO of New York City-based Siberian Energy Group, commenting about the Russian energy industry on CNBC's Squawk Box last year. You can listen to a more recent interview Mr. Zaikin recorded with the BBC during the G-8 summit in June 2007 here
Tatarstan is an autonomous republic within the Russian Federation, located 497 miles east of Moscow. Tatars are an ethnically Turkic people, and the majority are Muslims, though many are also Russian Orthodox. Tatneft, one of Russia's top oil producers, is based in the region, and this mineral wealth combined with the region's strong manufacturing base have made it one of the most prosperous oblasts in Russia. In addition to petrochemical and wood product processing, Tatarstan is home to the major Russian truck manufacturer JSC KamAz. Many ethnic Tatars are also prominent in Moscow where they run successful businesses.
If Tatarstan is doing well thanks in part to the worldwide oil boom, what about Russia's other regions, especially near the Caucuses, where Islam is growing rapidly? With Russia's Orthodox Christian population shrinking while the Muslim population increases, what are the implications of these current demographic trends for the future of the country?