Notebook

End to Propiska?

Residential registration may be axed

In January, the Federal Migration Service announced it is working on a bill that would next year eliminate the nearly century-old Soviet/ Russian practice of propiska — residence permits, in order to make employment migration easier.

The propiska system was implemented in the 1920s, as a way to control movement and fight metropolitan overcrowding. One’s propiska determined all, from the ability to get housing and health care, to access to rations and schools.

Propiska was partially abolished by a 1993 law (insofar as it contradicted constitutional rights to freedom of movement), but never entirely removed. Instead it was replaced by a two-tiered system that retains the worst of the old system while introducing new loopholes. The new bill would seek to eradicate the system entirely, although there are countless threads strung to the system that would need to be cut throughout the economy.

 

Next Stop Caucasus

New job a blessing or a curse?

In an attempt to solve the problems of Russia’s unruly Caucasus republics, the Kremlin unexpectedly formed a new federal district that includes Stavropol region and the republics of Dagestan, Ingushetiya, Chechnya, Karachayevo-Cherkessiya, Kabardino-Balkariya, and North Ossetiya.

The man singled out to pull the mountainous region out of poverty, corruption, and violence was Alexander Khloponin, a businessman turned governor of Siberia’s sprawling Krasnoyarsk region. Khloponin’s sudden career twist could be the first step to even higher positions, or it could be a form of political exile. Either way, President Dmitry Medvedev appears to be delivering on a promise he made during his State of the Nation address to find a man “personally responsible for the state of affairs in the North Caucasus.” Khloponin’s first test is overseeing presidential elections in Dagestan this year.

 

Blog Tales

Yeltsin’s daughter recounts 1990s

Tatiana Yumasheva, the daughter of Boris Yeltsin, Russia’s first president, unexpectedly became a wordy memoirist of the roaring 1990s after starting a blog on LiveJournal
[t-yumasheva.livejournal.com] and using it to tell colorful stories from Yeltsin’s presidential terms. In her blog posts, Yumasheva, who is married to former head of the Presidential Administration Valentin Yumashev, has tried to dispel the myth that Yeltsin broke up the Soviet Union, analyzed why Vladimir Putin was chosen to succeed Yeltsin, described Boris Berezovsky and his involvement in politics, and added details to the biography of Roman Abramovich, from before he became an extravagant multimillionaire and owner of the British soccer club Chelsea.

The blogosphere was divided whether Yumasheva’s frankness was just a whim, or if she might have political ambitions; it is not clear who gains by her giving the 1990s a rosy tint. Some speculated Yumasheva was casting an early ballot in support of President Dmitry Medvedev in the 2012 presidential elections; others saw it as connected to a conflict between businessman Oleg Deripaska (husband of Valentin Yumashev’s daughter Polina), and several state banks over Deripaska’s colossal debt (see below, “Money for Metal”). By showing her knowledge of the period, she could be warning the government of other secrets up her sleeve, including those implicating Russia’s current leaders. Either way, her blog is entertaining to be sure.

Gaidar dead at 53

Russia’s shock therapist passes away

Yegor Gaidar, the young economist appointed prime minister by President Boris Yeltsin in 1992, passed away at the age of 53 in December.

The son of Arkady Gaidar, a popular writer of children’s stories in the Soviet era, Yegor Gaidar took most of the blame for the negative impact of economic reforms in the early 1990s. His so-called “shock therapy” caused hyperinflation, wiped out Soviets’ savings overnight, and caused systemic cash shortages that led many factories to pay their workers late, in worthless goods, or not at all.

Gaidar nonetheless was respected throughout the post-Soviet period despite widespread resentment of his government’s policies. He argued that the reforms were the only way the remnants of the Soviet economy could be nursed back into shape.

After his brief term as prime minister (June-December 1992), Gaidar served most of the ensuing decade in the State Duma, heading the Democratic Choice of Russia party from 1994-2001. He also headed the Institute of Economies in Transition and frequently lectured abroad. At time of his unexpected death from pulmonary edema, he was reportedly working on a children’s book.

Even after his death, Gaidar was the subject of controversy. Moscow Mayor Yury Luzhkov and his predecessor Gavriil Popov published a scathing editorial in Moskovsky Komsomolets newspaper even before the customary 40 days of mourning had passed, blaming the “bony hand of monetarism” for “turning Russia into a mine field for all its later leaders.” Anatoly Chubais, who, because of his own role in 1990s economic mismanagement is still widely despised in Russia, wrote a letter to the editor, which called the editorial “dirty, envious, and an angry pack of lies.”

 

Money for Metal

World’s biggest aluminum

company goes public

RusAl, the world’s largest aluminum company, owned by Russian billionaire Oleg Deripaska, completed an IPO in Hong Kong in an effort to raise money to pay off its creditors. Though shares sunk by nine percent at their debut, Deripaska seemed unfazed, attributing it to market volatility. Toasting guests with champagne, Deripaska presented the exchange with a 12-kilogram aluminum Russian doll on the day of RusAl’s debut, Reuters reported.

RusAl, which has outstanding debts of $14.9 billion, sold 10.6% of its shares for $2.24 billion, which puts the company’s value at $21.05 billion. RusAl, one of Russia’s most secretive companies, exposed some of its structure during the pre-IPO roadshow organized to lure investors. Its registration on Jersey Island allows it to pay only 10-13 percent in profit taxes, one fourth that of its American competitor Alcoa, which paid a profit tax of over 40 percent in 2008.

 

Avatar Conquers

Film exceeds expectations

Russia was no exception to the film Avatar’s results in box offices around the world, raking in the fifth-biggest foreign returns from fans of James Cameron. Russians have fond memories of Cameron’s Titanic, and flooded Moscow’s modern 3D and two Imax theaters. One Imax theater had to introduce showings at 3 a.m. and 6 a.m. to accommodate the unprecedented demand.

Avatar’s Russian box office of just over $100 million at press time made it far and away the biggest grossing film in Russian history (the previous record was Ironiya Sudby 2, at $50 million).

Avatar received extra press attention when the notoriously anachronistic Communists of Leningrad Region published a scathing web essay alleging that Cameron plagiarized the plot of Avatar from a story published by the Strugatsky brothers in the 1960s. Their rambling statement also claimed that Avatar was a political justification of President Obama’s receipt of the Nobel Peace Prize. The organization, which is not officially affiliated with the Communist Party, last year attacked the most recent James Bond film for its negative portrayal of Russians.

 

Nobel Effort

Activist nominated for Peace Prize

Svetlana Gannushkina, a member of the governing board of the International Memorial Society and director of the Civic Assistance Committee, has been nominated as a candidate for the Nobel Peace Prize by Erna Solberg, leader of the Norwegian Conservative Party and a former Minister of Local Government and Regional Development in Norway.

Gannushkina is also a member of Russia’s Presidential Council on Human Rights and Civil Society. Since the late 1980s she has devoted herself to the problems facing refugees and internally displaced persons in Russia.

“Partly I feel embarrassed, partly I feel hope that the world community will at last recognize the problems that exist in Russia with regard to the rule of law,” Gannushkina said in an interview with BaltInfo. “I see this nomination as a response to the situation that exists in our country when the ordinary person is at the mercy of the arbitrary actions of those in authority and of criminal gangs.”

Just two Russians have won the Nobel Peace Prize: Andrei Sakharov in 1975 and Mikhail Gorbachev in 1990.

 

Baikal Threat

Polluting plant to restart on lakeshore

After sitting idle for 15 months, the paper mill that has polluted Lake Baikal since the 1960s is set to reopen after Prime Minister Vladimir Putin signed a decree allowing it to release waste into the lake — the world’s largest body of fresh water and a World Heritage Site.

The plant, which belongs to Oleg Deripaska’s vast business empire (see “Money for Metal,” above), was closed in 2008 after a decades-long battle by environmentalists. Putin’s decision is apparently motivated by a desire to put the plant’s 1500 employees back to work. The local government has been unable to find enough new jobs for them.

Although Baikalsk municipal authorities insist that the plant’s reopening is temporary, nothing bars the factory’s owner, Continental Management, from running it for years. Last August, Putin visited the lake and took a submarine ride on a research vessel, emerging to report that he thought the lake looked clean.

 

 

Slowing Abortions

Zhirinovsky proposes payouts

The ever-inventive politician Vladimir Zhirinovsky has proposed reducing the number of abortions in Russia by offering women considering an abortion R100,000 to change their mind. President Dmitry Medvedev is leading the charge to reverse Russia’s demographic decline and promised Zhirinovsky he would consider his proposals, which also include legalizing polygamy and building a sperm bank in every region of the country.

In 2009, Russia’s population increased by 15-25,000 persons, to more than 141.9 million. It was the first annual increase since 1995, Health Minister Tatyana Golikova declared in January. The rise was helped by a four percent decline in mortality rates and an influx of immigrants from the FSU. Yet Golikova said that stemming the number of abortions (Russia has one of the highest rates of abortion in the world, as it has long been a socially-accepted form of birth control here) is key to truly turning around Russia’s demographic decline. “Our abortion rates are comparable to birth rates,” Golikova said. In 2009, Russia had 1.7 million live births and 1.2 million abortions.

 

Dymovsky Silenced

YouTube sensation arrested

Alexei Dymovsky, the ex-policeman who aired the militia’s dirty laundry via YouTube (see Russian Life Notebook, Jan/Feb 2010), has been arrested and jailed in Novorossiysk. Dymovsky, who became an overnight internet sensation with his video address to Vladimir Putin about police corruption and poor working conditions, was accused of slander, misusing R27,000 given to him for operational work, and exerting pressure on an investigation, which supposedly necessitated putting him behind bars.

Dymovsky’s lawyer countered the charges against his client by saying that all Russian policemen could thus be accused of stealing money, given the way the police accounting system files employee expenses.

 

No more “Bush legs”

Despite pronouncements that relations are being reset, Russia and the U.S. are embroiled in another chicken war. Since the 1990s and the first Bush administration (thus the designation “Bush legs”), chicken has been a trade war weapon. Russia has pronounced U.S. chicken unsafe, due to the widely-used American industry practice of washing birds in chlorinated water. Russian sanitary officials argue that U.S. chicken producers were warned a year in advance that Russian laws were changing, but while Russian poultry producers upgraded their technology, U.S. exporters did not. Russia is one of the largest foreign markets for U.S. poultry, importing some $800 million in chicken each year.

 

Unlikely fiancé

A Dagestani man detained near the Kremlin’s Spassky Tower said he was late to a meeting with President Medvedev, whom he planned to ask for his daughter’s hand. The man, a crane operator laid off from his job at a Moscow construction site, was taken to a psychiatric hospital, Moskovsky Komsomolets reported.

 

Russia gets a cathedral

The municipal court in Nice, France ruled in favor of returning that city’s Orthodox cathedral to Russia. Construction of the Cathedral of
St. Nicholas was financed by Tsar Nicholas II, who contributed his personal funds after construction ran over budget. The site had previously been occupied by a chapel constructed following the death of Alexander II’s son in 1865, but in 1896 it was decided to build a church. St. Nicholas Cathedral is the largest Russian Orthodox church outside of Russia.

 

Best film

Vasily Sigarev’s first film, Volchok, has received the White Elephant prize, meaning it was singled out by the Russian Movie Critics Guild as the best film of the year. The dark drama tells the story of a six-year-old girl who lives with her mother, who has just been released from prison. Volchok also collected prizes at the Zurich Film Festival and Russia’s
Kinotavr Festival.

 

 

 

 

Forbes squatting

In the first successful major case against cybersquatters, a Russian court recognized Forbes magazine as the rightful owner of forbes.ru, a website previously occupied by a company selling tours to the Arctic. While the site’s owner said he named the website after James David Forbes, a scientist who studied glaciers, the magazine, which was one of the few Russian publications without its own website, sued the company last summer. The magazine later opened its website at forbesrussia.ru, but is expected to move to forbes.ru eventually. Last year, a website sochi.ru was also appropriated by the Sochi Olympic Organizing Committee, while the former owner, who maintained a portal of local city news, services, and a forum, was forced to move to sochi.com.

 

Less global than Ecuador

Russia is one of the world’s least globalized industrial economies, according to a report from the Economist Intelligence Unit. The report ranked Russia 55 out of 60 among the world’s largest economies, just above Indonesia and just below Ecuador, in a ranking that scored everything from trade policy to internet subscribers. At the top of the list were Singapore, Hong Kong and Ireland. Russia’s score was 2.77 out of 5.0, which is up a bit from its 2.51 score in 1995.

 

Pelevin outdoes Patriarch

Writer Viktor Pelevin is considered Russia’s most influential intellectual, according to
a non-scientific internet poll taken by openspace.ru. Some 40,000 people voted for five candidates from a list of 350 Russians. Other intellectuals from the top ten include Mikhail Khodorkovsky, Patriarch Kirill, TV host Alexander Gordon, writer Boris Strugatsky, scientist Sergei Kapitsa, and politician and writer Eduard Limonov.

 

Big Macovich

McDonalds, which has been operating in Russia for 20 years, plans to open another 45 restaurants in Russia this year, each costing about $3 million. Company CEO and Vice Chairman Jim Skinner said Russia is “undoubtedly” one of the places that offers the company its fastest return on investment, and called the corporation’s achievements in Russia over the past two decades “extraordinary.” There are 245 McDonalds in Russia today, serving some 950,000 customers daily.

 

Russian electric car

In an effort to innovate the outdated auto industry and get on the government’s good side, Russian billionaire Mikhail Prokhorov plans to develop Russia’s first mass-produced electric car, hoping to create an affordable vehicle for city driving. The boxy car would be developed at the St. Petersburg Yarovit Motors Auto Plant and cost nearly € 9,000, but Prokhorov’s Onexim Group has not revealed further details. {slon.ru/articles/249398}

 

Fire prompts crackdown

Russian authorities closed over 2,700 nightclubs after a deadly fire killed 150 people in a Perm club this winter. Some 17,000 clubs were checked after a fire safety crackdown was announced by authorities in the wake of the tragedy. Pyrotechnics are no longer permitted during concerts, and are restricted during any mass events.

 

“Prior to decentralizing, it must first be centralized.“

President Dmitry Medvedev, on reform of the militia (Kremlin.ru)

 

“If we demand proper environmental standards now, we might as well admit there is no industry in Russia. It would all have to be stopped. There is no sense taking such action. All the old enterprises (the metallurgical and chemical complex, cellulose-paper production) are operating based on medieval, inadequate norms for environmental protection.”

Yury Trutnev, Natural Resources and Environment Minister (Vedomosti)

 

“There are skeletons everywhere, even in our current political system. In the closet, under the bed. I wouldn‘t even be surprised if they were lying on the bed as well.“  

Nikita Belykh, governor of Kirov region (Itogi.ru)

 

“My mother got me and my brother out of Leningrad in the spring of 1942, across the fragmenting ice of Lake Ladoga. The ice was thin, the lake was being bombed, and several trucks went under. But I liked that fact that our car was going along like a motorboat, its sides battered by huge, angular waves.” 

Writer Andrei Bitov (Esquire Russia)

 

“I’ve been a victim of my honesty for the past 15 years.”

Belarusan President Alexander Lukashenko, left (Itogi.ru)

 

“One could film a wonderful drama about the present day, but it would flop in theaters. Russia simply doesn’t want to look at itself in the mirror. The Russian viewer categorically refuses to see himself in a detached way, and I have been trying to wrap my head around this for three years and still can’t figure it out.”

Movie producer Alexander Rodnyansky (Sobesednik)

 

“What is annoying about today’s humor? The lack of self-irony, which is the sign of a very clever, very worldly, intelligent person. Like me. If we had a high society, I would have long ago become its star. But we don’t have a high society, so I have to make jokes and be ironic for my dinner, for my lunch. Just for food.” 

Comedian Mikhail Zhvanetsky, right (Komsomolskaya Pravda)

 

“Russian scientist, Russian poet, Russian writer… but Russian businessman — that does not sound so good. If ‘Russian scientist’ has a positive ring to it all over the world, let’s combine the two. That’s what an innovative economy is all about. Especially since the Russian entrepreneur has only been
around for 19 years.”

Anatoly Chubais, in a speech at the Russia Forum (Slon.ru)

 

“There is a lot of money, so we need an economic manager rather than a tough guy. The era of the general-governor [in the Caucasus] is a thing of the past.” 

President Dmitry Medvedev, on appointing Alexander Khloponin
envoy to the new North Caucasus Federal District (Kommersant)

Hobby with Benefits

President Dmitry Medvedev’s photo of the Tobolsk kremlin, taken from a helicopter, fetched R51 million at a recent charity auction in
St. Petersburg. (Prime Minister Putin’s painting of curtained, frosted window was sold last year for R37 million.) The photo was purchased by Mikhail Zingarevich, who is on the board of directors of Ilim Group, a paper holding company where Medvedev worked before accepting a post in the government. Medvedev is long known as a photography enthusiast, and his camera shows the extent of his passion: the digital medium format Leica S2 is a new model, just released last year, and sells for about $30,000.

 

Skating Surge

After several lackluster seasons, Russian figure skaters returned to the top of the podium as the national team won three golds at the European Championships in Tallinn (Estonia) in January. The most spectacular win was delivered by Yevgeny Plyuschenko in men’s singles, showing he had no intention of giving up his Olympic crown in February. It was Plyuschenko’s sixth European gold – and his first medal of this caliber after his surprise comeback following a three-year long absence (see Russian Life, Nov/Dec 2009). 

“I am just really proud, everything went well. Of course, the most important competition this year will be the Olympic Games,” said Plyuschenko, whose last major competition had been the 2006 Turin Games. He said it felt great “to beat those athletes who have been training every day all these three years. When I came back, they were all just smiling, thinking this is not possible.”

Ice dancers Oksana Domnina and Maxim Shabalin won gold despite being outscored in two of their three dances by the Italian pair of Federica Faiella and Massimo Scali. The pair was sidelined by injury last year, but won the Europeans in 2008. 

The third gold was won in pairs by Yuko Kawaguti and Alexander Smirnov. The Russo-Japanese pair thus won their first gold at such a major event, and Kawaguti was granted Russian citizenship so that she could compete in the Vancouver Olympics for Russia. 

 

Bandy Upset

The Russian national squad failed to win gold at the Bandy 2010 World Championships held this year at Moscow’s Krylatskoye Ice Sports Complex, losing to Sweden 6-5 in overtime. Russia took silver and the bronze went to Finland, which beat Kazakhstan in their final match.

This was the 30th Bandy World Championship held since the first competition in Finland, in 1957. Bandy is played on ice and is essentially hockey with a ball instead of a puck.

Over the 30 years of the championship, the Soviet/Russian and Swedish teams have each taken 29 medals. Russia has won 19 golds, while Sweden now has 10. The only other team to win gold was Finland, in 2004. Next year the championship will be held in Kazan (capital of Tatarstan).

 

Russian Truck Tsar 

Russia’s Vladimir Chagin won the 2010 Paris-Dakar Rally for the sixth time in the truck category, driving a Kamaz. A Kamaz truck won every stage in the 2010 event, finished both first and second, and picked up its ninth Dakar win. Chagin, who has been dubbed “Tsar” in the world of motor sport, won the race in 2000, 2002-2004 and 2006. 

 

 

GOLDEN DREAMS: In the past four winter Olympics, the men’s skating gold medal winner has been Russian (the Unified Team won it the preceding winter games). Yevgeny Plyuschenko won in 2006 at Turin. If he wins gold at Vancouver, he would be the first men’s repeat gold medalist since Dick Button (1948 & 1952).

 

Since 1995, the number of children in Russia has decreased from

38 million to 26.1 million (a 23% decline), while the total population decreased from 148.5 million to 142 million (down 4%).

There are 10 pediatric medical centers in Russia, down from 18 in 2000, and 1.7 million children are on a waiting list to get into a preschool, up from 238,000 in 2000.

 

An estimated 70 criminals on Russia’s Wanted List are hiding in the U.S.

 

15% of all payments that Russians made through phone

text messages in 2009 were contributions to various scams — totalling $1.5 million dollars.

 

Even though production in Russia in 2009 fell by an average of

16%, production of caviar increased by 22%, and production of mink pelts grew by 34%. Consumer items whose production fell by the most were women’s coats (40%) and valenki (35%).

 

The number of Russian research papers published in 10,500 international scientific journals represents just 2.6% of the global total, putting Russia 14th in the world, behind China (8.4%), Canada (4.7%) and India (2.9%). The number of Russian published papers has been flat since the 1990s, while Chinese scientists have published eight times as many papers, and Brazilian scientists 14 times as many. In 2009, Russia spent R168 billion on scientific research.

Sochi has the 6th most expensive deluxe apartments in high rises, with a price of € 10,700 per m2. The most expensive high rise real

estate is in Monaco, at € 84,500 per m2. Real estate prices in Sochi increased by 5% in 2009. Meanwhile, last year Russians spent

$11.3 billion on real estate outside of Russia.