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No bees, no honey; no work, no money

M O S C O W

A PROPOS

The number of Muscovites registered as individual en-

private entrepreneurs who got rich quickly and started

trepreneurs has increased by 32 percent over the past

to live well.

five years. There are currently over 233,000 individual entrepreneurs working in the capital, which is 60,000 more than in 2010. This fact was recently reported by Natalya Sergunina, Deputy Mayor for Economic Policy and Property and Land Relations of Moscow.

The road toward small and medium-size entrepreneurship in Russia has never been easy: business people have been given a green light here and there, many red lights, weighed down by so many laws that growth was impossible...And although there are still a lot of

This is an excellent trend, especially considering the

problems in this sector of the economy today, it is

fact that just a short while ago those who wanted

difficult to find people who are fundamentally opposed

to start a private business could be put in jail for 3-5

to its existence. At least there aren’t any people like

years. The Criminal Code of the USSR was extremely

this in the Moscow Government. The Mayor himself

strict in this regard!

sets the tone. Just recently, Sergey Sobyanin made

The situation started to change with the beginning of perestroika. In 1987, a law legalizing self-employment was passed. It was back then – on May 13th, 1987 – that the first Co-op restaurant, Kropotkinskaya 36, opened in Moscow. Those who had a chance to visit it remember how delicious the food was – the burgers, borscht, baked veal with mushrooms and meat on a skewer with tomatoes. No other cafes in Russia ever

the following statement: “Small business is part of the foundation of any economy. During challenging times, small business becomes a source of economic growth. We know this, and are paying a lot of attention to this sector. The city is providing financial and material support to small business, along with tax benefits.” Suffice it to say that it is now possible to open a business in Moscow in just a few days.

had anything resembling this before. Unsurprisingly,

By the way, there are a lot of foreigners working as

small business started to blossom. There were not

individual entrepreneurs in Moscow. Some of them

only private restaurants, but also private stores, taxis,

are featured on the pages of Capital Ideas. One of

studios, repair shops and construction companies,

them, Maurizio Pizzuti – a restaurateur from Rome

farms – the list goes on. Just two months after the law

who has been in Moscow for 20 years. He has lived

was passed, there were about 600 different private

through the toughest times here and never wanted

enterprises in Moscow.

to go back to Rome. Why? “Unlike in Italy,” Maurizio

But not everything was going smoothly. The corporate

says, “there are plenty of opportunities in Moscow.”

world immediately encountered opposition from both party members and the general public. The former were guided by communist principles, while the latter

Sergo Kukhianidze

were motivated by irritation and jealousy toward the

Editor in Chief [email protected]

CAPITAL IDEAS Founder: Department for External Economic and International Relations of the Government of Moscow Address: Tverskaya, 13, Moscow, 125032. Ph: +7 (495) 633-68-66, Fax: +7 (495) 633-68-65 E-mail: [email protected] www.dvms.mos.ru Editorial staff: Editor-in-chief – Sergo Kukhianidze Production crew of the edition: Elena Egorova (deputy editor-in-chief), Tatyana Akimova, Gennady Charodeev, Vladimir Dolmatov, Marina Ershova, Evgeny Khokhlov, Sergei Levin, Pavel Lukyanov, Marina Ogorodnikova, Anastassia Paloni, Vladimir Smelov, Dmitry Sokolov, Anna Tomkins, Marina Urshina

Moscow Official

Cooperation between two regions expands Mayor of the Russian capital Sergey Sobyanin and the Minister President of Bavaria Horst Seehofer signed a joint announcement on cooperation.

Austrian business is ready to participate in large scale projects New opportunities are opening up for Moscow and Vienna

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CAPITAL IDEAS S T R A T E G I E S

F O R

B U S I N E S S

Publisher: Moscow Center for International Cooperation CEO: Igor Tkach Address: 105005, 68/8, build.1, Baumanskaya str., Moscow, Russia Phone: +7 (499) 267-46-56 E-mail: [email protected] General Partner: National Review Ltd CEO – Sergei Oposhnyanskiy Phone.: +7 (495) 784-69-71 E-mail: [email protected] Consulting – Sergei Anikanov, Evgeny Khokhlov Design – Robert Saifulin Photo editor – Victoriya Oposhnyanskaya Page layout – Alexander Saifulin Assistant – Nadezhda Ratanova Distribution – "Trans-Media" Ltd Acknowledgements to: PHOTO – www.mos.ru, www.dvms.mos.ru, ITAR TASS Agency, RIA-Novosti, Getty Images Russia, companies and organizations, represented in the issue. If you wish to get new issues of Capital Ideas, please, apply to: [email protected] The magazine is registered with at the Federal Authority of Legislative Control in Mass Media and Cultural Heritage Protection. Media registration certificate ФС77-53716, issued April 26, 2013. All reproduction permitted only with the Editor’s permission and reference to ‘Capital Ideas’. Distributed free of charge Published with support from the Department for External Economic and International Relations of the Government of Moscow Circulation : 7000 Signed into print 06. 04. 2016

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M O S C O W

8 – 13 Moscow Official

Showcase our work, appreciate the work of others Moscow became a focal point at the international exhibition of investment and real estate MIPIM-2016, which took place in the middle of March in Cannes

Cover Story

Sergey Sobyanin: Small business becomes a source of economic growth

Nothing Ventured

Nothing Ventured

Russian wine with a Swiss personality

Luca Tavasci: The most important thing is that the suit fits!

It’s a well-known fact that small size does not preclude great content. This is true in both art and business. The Moscow Government completely agrees with this point of view.

Winemakers are particularly responsible professionals who approach their work, along with everything else in life, with strict perfectionism. A meeting with Swiss winemaker Renaud Burnier and his wife Marina is the quickest way to confirm this fact. Relying on techniques developed by experienced Swiss winemakers, they have been making real Russian wine in Southern Russia for several years.

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32 – 36

We judge people by their clothes. This applies to men as much as it does to women. Luca Tavasci, a 27-year-old style consultant at De Luca Sartoria, has no doubts that this is the case. “Somebody like Adriano Celentano can certainly afford to wear whatever he wants, but this doesn’t apply to the rest of us. Regular men must watch what they’re wearing,” he said in an interview with Capital Ideas.

38 – 40

20 – 24 Face To face

Horst Seehofer: The best way to create trust is through dialogue Bavarian Governor answers questions of Capital Ideas in an exclusive interview

26 – 29 What’s New 30 – 31 Moscow in words

April-June 2016 CAPITAL IDEAS

3

Nothing Ventured Nothing Ventured

Time to convert feelings into action

The place where freshness is baked

The World Trade Center hosted a RussiaIndia business day. The main topic for the new format for communication between businessmen from the two countries was the issue of mutually beneficial cooperation in the small and medium-size business sectors.

In the beginning of Ostozhenka Street, there is Austrian bakery that was opened in October of last year by Martin Erichovich and Engelbert Edlinger. Walk through the glass doors of Engelpekar, and you immediately end up in a different dimension – a warm, cozy, almost homely atmosphere filled with the smell of coffee and Austrian bread.

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46 – 49

Anke Pötzsch: When one door closes, two new doors open The German holding company INTERPONT, which provides consulting and outsourcing services and has been operating in Russia for over two decades, is a unique enterprise. It wasn’t “imported” from abroad, but rather founded from scratch right here in Moscow.

54 – 57

42 – 44

50 – 52

58 – 61

Nothing Ventured

Nothing Ventured

Expert tips

Arnaud Jacquart: Russia is a fantastic school of life

Jussi Tuisku: We are planning to strengthen our presence here

It's worth investing in Moscow

French-born Arnaud Jacquart came to Moscow as a student right before the coup of 1991 and immediately fell in love with Russia. He considers himself to be more Russian than French, manufactures electric bicycles in partnership with Russian defense plants and dreams that Tverskaya Street will one day be a pedestrian area free of motorists.

45 Nothing Ventured

New agency for investors In late March, Analytical Credit Rating Agency (ACRA), which was established in Russia at the end of last year, held a business breakfast dedicated to issues of its development.

4

Nothing Ventured

CAPITAL IDEAS April-June 2016

No doubt, the most significant decision was to localize our manufacturing in the centre of Russia, so that we can offer the most competitive products for reasonable prices i.e. value for money to our clients, said Head of Ruukki Russia answered questions from Capital Ideas

Swedish national Fredrik Svensson has been living and working in Moscow since 2007. He is a partner in law firm Mannheimer Swartling which is the largest law firm in the Nordic countries. In this interview, Fredrik Svensson talks about the continuing investment attraction of Russia and its capital for small and medium businesses.

Our interview

Life&Leisure

Nikolay Kovalyov: The law should work like an electrical outlet....

Unusual museums: valenki, retro cars and Olympic bear

Bookshelf

Making Perfect

“Corruption is one of the biggest dangers for Russia,” NikolayKovalyov said in an exclusive interview with Capital Ideas. NikolayKovalyov is a member of the State Duma, General of the Army and former Director of the FSB.

Teri Lindeberg, founder and CEO of Staffwell, is a remarkable woman. She know all ins and outs of doing business in Russia. At least she wrote a great book titled Making Perfect, that is about what employees want from their employers. Here’s the extract from Teri’s book.

There are a lot of world-famous museums here in Moscow: the Tretyakov Gallery, the Pushkin Museum, the Kremlin Armoury and so on. A lot of Muscovites and visitors know about these museums and visit them on a regular basis. But our city also has other interesting, but less famous places to explore. Capital Ideas has compiled a list of unusual museums that feature the most unexpected exhibits in the city.

62 – 64

74 – 77

86 – 89

66 – 71

78 – 79

90

Face to Face

This and That

Life&Leisure

Vladislav Tretiak: The cold war period in hockey has been over for a long time

Savoir vivre a la Russe

White collar fest: it’s magic time!

80 – 85

They say that those who work hard play hard. Employees of The Boston Consulting Group don’t doubt this for a second!

On May 6th, Moscow and St. Petersburg will be hosting the 80th Ice Hockey World Championship. Before the event, Vladislav TRETIAK, the President of the Ice Hockey Federation of Russia, sat down for an exclusive interview with Capital Ideas.

Life&Culture

92 – 96

Entertainment for everybody: From  Queen Elizabeth to Julio Iglesias

Food&Drink

72 – 73 Moscow Vocabulary

People may think that the Russian soul is mysterious, but there is very little mystery to it!

The cultural events of the spring and summer will help the Moscow’s guests and residents liven up any day of the week. And everybody will be able to find something they like.

Roberto: food like art Federico Fellini famously said that life is a combination of magic and pasta. The Italian restaurant Roberto, which is located on Rozhdestvensky Boulevard, serves pasta and many other dishes so magical that the life of every visitor turns into a true dolce vita.

April-June 2016 CAPITAL IDEAS

5

MOSCOW OFFICIAL

Cooperation between two regions expands Mayor of the Russian capital Sergey Sobyanin and the Minister President of Bavaria Horst Seehofer signed a joint announcement on cooperation Sergey Sobyanin pointed out that the last visit the Bavarian delegation paid to the capital was extremely productive: a number of events followed, including Days of Moscow in Bavaria. The cities also started to actively cooperate in the spheres of health care, culture, transport and more. In spite of the political and economic challenges, the regions continue their cooperation. Over the 10 months of the past year, trade turnover between Moscow and Germany amounted to $20 billion. “I hope that the Agreement we are singing today, an announcement of our plans to enhance our cooperation, will give new impetus to the development of our economic and cultural ties,” the Mayor of Moscow said. According to him, Moscow has new opportunities and platforms for investment. Among other initiatives, a decision was made to provide investors with special benefits. A network of technological parks has been created. Sergey Sobyanin stated that there are already 850 Bavarian companies operating in the capital. This year, another three companies were established in Mos-

cow’s technoparks; five more new enterprises are expected to launch operations in the near future. In spite of the sanctions, the Moscow government remains optimistic about cooperating with Bavaria, maintaining that there is plenty of opportunity for collaboration. In turn, Horst Seehofer thanked the Mayor of Moscow and the delegation of the capital’s government for the productive meeting. “I think that if we are signing another Agreement today, it should serve as the start to a new chapter in the history of our cooperation. That is, it should give us new impetus, as you have already said. Usually, this is achieved most quickly and efficiently with the economy. Of course, we are targeting the economy with this Agreement. But I think that by the next time I visit Moscow, we can expand this cooperation to include spheres such as science and culture,” Horst Seehofer declared. ■ Mr. Seehofer answers questions of Capital Ideas in an exclusive interview on page 20

Austrian business is ready to participate in large scale projects New opportunities are opening up for Moscow and Vienna The current state and prospects for cooperation between the capitals of Russia and Austria were discussed on February 3 by Minister of the Moscow City Government, Head of the Department for External Economic and International Relations (DVMS) Sergey Cheryomin and Austrian Deputy Minister of Science, Research and Economy, Deputy Chairman of the Austrian-Russian Intergovernmental Commission on Trade and Economic Cooperation Bernadette Gierlinger. Sergey Cheryomin informed the Austrian side about existing opportunities to create new advanced technology plants in Moscow, went over the measures the city government has taken to improve the investment climate, and talked about the Russian capital’s development in light of the Western sanctions. “Companies from China, Japan and South Korea are actively operating on the Russian market. Over the past few years, they have changed their approach to foreign economic activity and are offering us package deals,” the Minister said, “They no longer simply want to sell their goods and services. Business from these Asian countries is accompanied by long-term financing. This is good for Moscow and for our partners.” As an example, Mr. Cheryomin brought up an agreement with a major Chinese company on the construction of a branch of the Moscow metro. The

project cost has been estimated to amount to about $4 billion. The Chinese company is taking care of the construction, the investments and the operations. There are lot of examples like this one in the capital these days,” the Head of the DVMS stated. “It is true that we have a lot of competition in Moscow, including competitors from Asian countries,” Ms. Gierlinger agreed, “but we have our advantages: our goods and services are all top-quality and we have our own unique know-how.” According to the Austrian Deputy Minister, there are still over 400 Austrian companies and enterprises operating in Moscow. Of course, these companies are going through a rough patch right now. Nonetheless, Austrian business is interested in the Russian market and Vienna would like to participate in major projects. “Moscow is getting ready to host major athletic events, including the 2018 FIFA World Cup. We are prepared to assist Moscow with the construction of economy-class hotels. Moscow and Vienna have great opportunities for cooperation,” Bernadette Gierlinger noted. After the talks were over, the plenary meeting for the Austrian-Russian Intergovernmental Commission on Trade and Economic Cooperation took place in Moscow. ■

April-June 2016 CAPITAL IDEAS

7

MOSCOW OFFICIAL

Showcase our work, appreciate the work of others MIPIM is one of the largest and most prestigious international annual forums in the sphere of investment and real estate, which has been held regularly since 1990. A Moscow delegation headed by Marat Khusnullin, the Moscow Deputy Mayor for Urban Development and Construction, took part in the

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CAPITAL IDEAS April-June 2016

international exhibition in Cannes. The delegation included Minister and Head of the Department for External Economic and International Relations of Moscow Sergey Cheryomin, Minister and Head of the Moscow Department of City Property Vladimir Efimov, Minister and Head of the Department

Moscow became a focal point at the international exhibition of investment and real estate MIPIM-2016, which took place in the middle of March in Cannes of Economic Policy and Development Maksim Reshetnikov, Head of the Department of Science, Industrial Policy and Entrepreneurship Oleg Bogachev, Chairman of the Moscow Committee for Support of Investment Projects in Construction and Participatory Construction Monitoring Konstantin Timofeev, Chief Architect of Moscow and First Deputy Chairman of Committee for Architecture and Urban Planning of Moscow Sergey Kuznetsov and other officials. The City of Moscow undoubtedly became one of the key focal points at MIPIM, and not just because the entire European business community is actively discussing the need to lift the sanctions against Russia. The exhibition featured daily events that were connected to Russian cities.

This year, 223 European cities participated in the contest. Experts took into account a total of 96 independent variables, including economic potential, human resources, costs associated with doing business, standard of living, quality of infrastructure, barriers to doing business, and strategies for attracting direct foreign investment. The best cities were selected by a special independent jury after all of the scores were tallied up. Each of the candidates competed against cities of the same size: large, medium-size, small and micro. Moscow won in a tough competition with Western European cities in the “Stable Development” nomination category. The capital of Russia also made the list of top 25 most “progressively developing cities in Europe,” as well as the list of top 10 “Most Attractive” megacities in the world and the

www.reedmidemphotos.com

Moscow won awards across 7 different prestigious nomination categories, which were established by the London-based Foreign Direct Investment Magazine, published by The Financial Times. Sergey Cheryomin, Head of the Department for External Economic and International Relations of Moscow (DVMS) received special diplomas.

The capital of Russia made the list of top 25 "Most Progressively Developing Cities in Europe,” as well as the list of top 10 “Most Attractive” megacities in the world. April-June 2016 CAPITAL IDEAS

9

www.reedmidemphotos.com

MOSCOW OFFICIAL

www.reedmidemphotos.com

list of top 10 megacities in terms of “Efficiency of Expenses for Municipal Services.” Moscow also made the list of laureates competing in the “Most Attractive City for Doing Business” and “Positive Approach to Entrepreneurship” nomination categories. It was included the list of top 10 cities in the “Economic Potential” nomination category, as well as the list of top 10 cities in terms of “Development of Human Potential and Attractive Lifestyle.”

A Moscow delegation headed by Marat Khusnullin, the Moscow Deputy Mayor for Urban Development and Construction, took part in the international exhibition in Cannes.

www.reedmidemphotos.com

Megacities such as London, Lisbon, Kiev, Vilnius, Cologne, Dusseldorf, Zagreb, Ljubljana, Minsk and others won awards at the exhibition as well.

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CAPITAL IDEAS April-June 2016

The exhibition’s foreign participants were especially interested in the investment conference called “Russia as an Innovative Vector in City Development,” which took place on March 15 at the Cannes Palais des Festivals and was organized by Reed Midem, the Moscow Government and Kommersant Publishing House. Russians also excelled in this sphere. After all, any event like this one gives experts the opportunity to talk with the investment community. The fact that the Ruby Room, which was where the discussion was held, was completely filled shows that Europe is extremely interested in investing into various projects in Moscow and in Russia as a whole.

The speech made by Marat Khusnullin, the Moscow Deputy Mayor for Urban Development and Construction and the Head of the Moscow Delegation at MIPIM-2016, was particularly popular with the audience. Mr. Khusnullin talked about specific example of major projects that foreign investors can participate in. “Over 80 km of railway lines and over 40 transportat stops are going to be commissioned in 2016. By the end of the year, Moscow will be a global leader in terms of rail transport. Moreover, we are planning to complete the reconstruction of the Moscow Ring Railway, which means another 54 km of railway lines and 31 transportati stops. In terms of our transportation network, Moscow is 2-3 times behind major global megacities. Our goal is to ensure that the Russian capital makes the list of the top five cities in terms of rail transport. We are inviting investors to participate in these promising projects,” Marat Khusnullin said. Minister of the Moscow Government, Head of the Department for External Economic and International Relations of Moscow Sergey Cheryomin pointed out that Moscow is relatively optimistic about the future in spite of a decrease in investment amounts coming into Russia and Moscow. According to

Moscow won awards across 7 different prestigious nomination categories. Sergey Cheryomin, Head of the Department for External Economic and International Relations of Moscow (DVMS) received special diplomas. April-June 2016 CAPITAL IDEAS

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MOSCOW OFFICIAL

him, Russia remains on the list of top 10 countries in terms of attracting direct investment (a total of $70 billion). However, the potential of the Russian market is still undervalued, including in terms of development. Of course, this has a negative impact. At the same

time, the devaluation of the ruble has played a positive role and, in spite of visible stagnation on the market, transactions on the Russian market are still taking place. “There is a lot of work to be done,” the head of the DVMS pointed out, “The efforts to create and infra-

Within the scope of the Moscow delegation’s business program from MIPIM-2016, the Head of DVMS Sergey Cheryomin met with the Mayor of Riga Nil Ushakov. 12

CAPITAL IDEAS April-June 2016

During a meeting with Mr. Cheryomin and Mr. Bocharov, the Mayor of Dusseldorf Thomas Geisel expressed his appreciation for the participation of the Moscow delegation in the exhibition. “In September 2016, Moscow is hosting Days of North Rhine-Westphalia. We would like to set up a similar economic conference and discuss the establishment of a digital environment in the Russian capital. Dusseldorf has a lot of experience in implementing innovative technology across many different sphere of city life.”

www.reedmidemphotos.com

structure inside the Russian capital is an excellent reason to invest capital. Moscow is successfully trying to create a favorable investment climate. The city can already afford this, given that we have a balanced budget and considerable reserves in the banks. We ae counting on private investors, including foreign investors, to invest 40-50 percent into various projects.”

Within the scope of the Moscow delegation’s business program from MIPIM-2016, the Head of DVMS Sergey Cheryomin also met with the Mayor of Riga Nil Ushakov, as well as with the Mayor of Toulouse Jean-Luc Moudenc. The friendly discussions focused on the development of partner relations and business ties between cities. The Minister of the Construction Industry, Housing and Utilities Sector of the Russian Federation Mikhail Men, who visited MIPIM-2016, was very specific in his interview with our magazine: “Participants of the Russian delegation and our businessmen have finally understood how the MIPIM works. Now, the regional authorities and business people come to Cannes less to showcase their accomplishments and more to try to attract investors. This is a completely normal process. One can only hope that this approach will become more common at other international exhibitions.” During a meeting with Mr. Cheryomin, Mayor of Dusseldorf Thomas Geisel expressed his appreciation for the participation of the Moscow delegation in the exhibition.

Dues to the economic crisis, there were fewer companies from Russia at the French exhibition this year – there were 250 in 2015 and just over 200 in 2016. In 2014, 500 Russian companies and organizations visited the MIPIM. During a conversation with Capital Ideas, one of the organizers of MIPIM and directors of the “Real Estate” Filippo Rian said that every exhibition has the same outcome: “You showcase your work, appreciate the work of others and make valuable deals.” ■

www.reedmidemphotos.com

MIPIM is one of the most influential and prestigious events in the sphere of real estate. Last year, the exhibition was attended by 21,000 people from 93 countries. This year, the numbers increased to over 25,000 people from 100 countries. This is a record for MIPIM! Aside from the few thousand European companies, the US, Canada, China, Turkey and Thailand opened their stands at the exhibition for the first time this year.

April-June 2016 CAPITAL IDEAS

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COVER STORY

Sergey Sobyanin:

Small business becomes a source of economic growth It’s a well-known fact that small size does not preclude great content. This is true in both art and business. The Moscow Government completely agrees with this point of view.

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CAPITAL IDEAS April-June 2016

Paying attention Sergey Sobyanin is famous for his positive approach to small business. The capital’s mayor has recently made the following statement: “Small business is part of the foundation of any economy. During chal-

lenging times, small business becomes a source of economic growth. We know this, and are paying a lot of attention to this sector. The city is providing financial and material support to small business, along with tax benefits.” At this point, small and medium-size business in Moscow accounts for 59 percent of the city’s rental stock. The total turnover for these enterprises amounts to 16 percent of total turnover for all enterprises in Moscow. According to the Russian Federal State Statistics Service, there are over 360,000 small and medium-size enterprises registered in Moscow. Moreover, the capital holds the leading position in Russia in terms of growth of registered entrepreneurs. For example, SME growth for 20102014 amounted to almost 40 percent. According to the Federal Tax Service, there were 39,500 individual entrepreneurs registered in Moscow in 2015, which is 9.6% higher than in 2014. Moscow is home to about 8 percent of all SMEs registered in Russia. A combined 1.9 million people (over 25 percent of all employed people in Moscow) work for small and medium-size enterprises. Of course, the city is primarily interested in high tech, innovative business that pays high April-June 2016 CAPITAL IDEAS

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COVER STORY

salaries, since this translates into high tax revenues. 422 innovative enterprises have been established in Moscow over the past 5 years. The city is currently home to 20 technoparks – a number that is projected to double by the end of this year.

From trade to advanced manufacturing For small and medium-size businesses in Moscow, trade remains the best source of income – it has been in the lead for the past few years. It so happens that the capital is home to a lot of trade routes, major logistics centers and so on. Operations with real estate and provision of services are in second place, while construction comes in third. Then there is manufacturing, transport and communications, provision of communal, social and other personal services. In Moscow, the main players of the industrial sector are still large-scale enterprises – the auto industry, aerospace industry, electronics manufacturing, new materials, pharmaceuticals and so on. Nevertheless, there has been a shift to increasing volumes of innovative resources based on intellectual property in the capital. Our technoparks and technopolises provide about a million square meters of space for high-tech manufacturing. 16

CAPITAL IDEAS April-June 2016

SOS – call for help! If some part of the process is taking too long – the permits are taking a while to issue, for example – the applicant has the option to contact the Business Protection Headquarters ([email protected]). There are plenty of cases in which the center can help the entrepreneur overcome administrative barriers, including cases where an official is not doing their job. A lot of SMEs have already received assistance. The main objective of the Business Protection Headquarters was to create favorable conditions for entrepreneurial activity and increase the capital’s investment appeal. There is a hotline that operates every day of the week. Those who contact the Headquarters can receive consultations from experts and lawyers. The Headquarters work with the executive authorities in order to more effectively protect the rights of entrepreneurs and investors. Road maps for improving the investment climate in the region have been developed. The center is actively growing and developing. In 2012, for example, the Business Protection Headquarters established cooperation with the Agency for Strategic Initiatives (ASI). Collaborative projects include the development of business service center chains located in technoparks. These are

powerful service centers that are located within walking distance and can provide the entrepreneur with the full spectrum of government services, as well as help find partners, investors and qualified employees.

Great city for doing business In general, there are a lot of different types of support the city has made available – tax services, property services, as well as information and consultation services. In Moscow, entrepreneurs have simplified access to financial resources, the share of public procurement from SMEs is increasing, and individual entrepreneurs get tax breaks if they renew their registration. Those who have switched to the simplified tax system (STS) or a patent tax system (PTS) also get tax breaks: a 0 percent rate for a period of 2 years. Property support for entrepreneurs in 2015 amounted to 7.2 billion rubles. This includes preferential purchase of the leased premises (installment payments for up to 5 years), and preferential rental rates for non-residential premises owned by the city – 3,500 rubles / sq. m.per year (the period of validity of the rental rate has been extended until July 1, 2016). Right now, over 6,000 entrepreneurs are taking advantage of these preferential terms. 3,367 contracts totaling 68 billion rubles have been concluded by SMEs in 2012-2015 as part of the program. It is projected that over 4,000 more contracts will be concluded over the next three years.

April-June 2016 CAPITAL IDEAS

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COVER STORY

www.meclean.ru

Another important measure developed to support SMEs is increasing the public procurement share. In 2015, the capital’s small and medium-size business representatives received 108.3 billion rubles worth of public procurement orders (19.7% of total public procurement volumes). For the sake of convenience, electronic platforms called “Supplier Platform” and “Trade Exchange,” where companies and individual entrepreneurs interact with government customers, were laucnhed. As of today, there are 40,500 entrepreneurs registered on the “Supplier Platform,” 66.2% of which are small and mediumsize business representatives. Just recently, the Moscow Department of Science, Industrial Policy and Entrepreneurship has been approved as a government body fully authorized to evaluate and oversee the compliance of public procurement plans with the legal requirements that ensure the participation of small and medium-size enterprises. So far as access to financial resources, The Fund of Small Business Credit Assistance (FSBCA) and the Foundation for the Promotion of Microfinance Activities have been established in Moscow for this purpose. In 2015, the FSBCA provided 550 guarantees that totaled 3 billion rubles, which allowed enterprises to attract credit resources in the amount of over 6 billion rubles. The Foundation for the Promotion of Microfinance Activities has provided 418 microloans in the amount of 185 million rubles. Overall, with support from the FSBCA, small and mediumsize enterprises has attracted over 55.3 billion rubles in bank financing over the past 5 years, almost doubling the indicator posted for 2005-2010. An entire network of business support centers based on the SBI Small Business of Moscow has been created to assist entrepreneurs. The centers provide legal and consulting support for entrepreneurs across all business-related issues, from registration of the enterprise to employee training. Over 25,000 entrepreneurs have taken advantage of the services these centers provide. For example, last year alone the centers provided over 60,000 consultations. Objectively speaking, it is obvious that Moscow is a great place to do business. It is no surprise that so many foreigners and people from other cities in Russia come to Moscow, just like it is not surprising that the number of new enterprises in the city keeps growing every year. These are the laws of the market – entrepreneurs flock to places where doing business is profitable, and helping business develop is the job of the government. ■ 18

CAPITAL IDEAS April-June 2016

As of January 1, 2015, according to the Russian Federal State Statistics Service: There are a total of

The SME sector in the beginning of 2015

4,5mln 18mln 25% 2,4mln 53,3% 1,9mln 41% 5,2% 0,3% small and medium size enterprises operating in Russia

These enterprises employ over

people, which accounts for

In terms of the number of market participants, individual entrepreneurs make up the base of the small and medium-size enterprise sector –

Microenterprises account for –

Small enterprises make up

of all employed people

or

or

of all SMEs

of all SMEs

and medium size enterprises account of

of all SMEs

Enterprises classified as small and medium-sized businesses

SME category

Number of employees

Turnover

Microenterprise

< 15 people

< 60 mln rub

Small enterprise

16 – 100 people

< 400 mln rub

Medium-size enterprise

101 – 250 people

< 1 bln rub

April-June 2016 CAPITAL IDEAS

19

FACE TO FACE

Andrei Sharonov

Moscow never sleeps Andrei Sharonov, Deputy Moscow Mayor for Economic Policy, shared with CAPITAL IDEAS his

Isn’t it a challenge?

vision of Moscow as an international

Yes, it is a challenge as well. But it is a real opportunity and what is important – it is a reality.

financial center

20

Yes, it is a challenge as well. But it is a real opportunity and what is important – it is a reality.

CAPITAL IDEAS January-March 2016

Horst Seehofer:

The best way to create trust is through dialogue The Bavarian Governor answers questions form Capital Ideas in an exclusive interview Mr Minister-President, you were the first influential German politician to visit Moscow in the year 2016, at a time when relations between Russia and Germany leave a great deal to be desired. Can one presume that your trip to the Russian capital will contribute to normalisation of bilateral contacts and a return to the mainstream of constructive cooperation between the two countries? Relations and contacts between Bavaria and Russia enjoy a long tradition and have been highly diverse – in business as well as among communities, universities, museums and libraries. The path I take is always that of dialogue. I am of the conviction that dialogue is the means for diffusing conflicts. Exchange is important for mutual understanding and, ultimately, coming closer together.

What were the main topics you discussed with the President of Russia, Vladimir Putin, the Mayor of Moscow, Sergei Sobyanin, and the other Russian representatives? Were these a kind of exploratory meetings or did you discuss specific projects? President Putin and I agreed on collaboration between the Russian Federation and the State of Bavaria in the fields of business, science, education and culture. Bavaria and Moscow have had a close partnership since the end of the 1980s, with mutual delegation visits and exchange on all levels  – from administration to business and culture. Not least, Bavaria was the first German state to open a representation in Moscow in January 1995. We established a new foundation for cooperation between the City of Moscow and the State of Bavaria via a mutual Memorandum of Understanding regarding bilateral collaboration. April-June 2016 CAPITAL IDEAS

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FACE TO FACE

Among the German states, Bavaria is a particularly important and active business partner for Moscow. How can one characterise the current status of this partnership? Are you happy with that status? Approximately one in four German companies active in Russia comes from Bavaria. This demonstrates how Russia is still viewed as an important future market, especially in Bavaria. The billions in investments made by Bavarian companies underscore that fact. At the same time, economic relations have not remainedunscathed by the current difficulties, of course. That is why I would like to create an even more stable foundation for the close partnership between Bavaria and Russia through an increase in cooperation.

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deal of social ties and traditions serving as common ground, which were not fully extinguished by the historical catastrophes marking the 20th Century. For example, German continued to be the most important foreign language in Russian institutions of education still today, while Russian has always been offered in Bavarian secondary schools. Literature, theatre, music and visual arts have also always represented social ties among the people of our two regions, even under the most adverse historical and political conditions.

One important factor in these relations is contact in the cultural, humanitarian and public sector as well as civil society relations. How is interaction developing in these fields?

By pursuing cooperation projects with the City of Moscow and the Russian Federation, we are being consistent in following our path in business, science, education and culture. An institutionalised partnership has connected Bavaria with the City of Moscow since 1999, which we have now renewed. This cooperation encompasses in particular the fields of business, culture, police, construction, environment and healthcare.

There is one thing these highly varied activities have in common: they developed extremely swiftly and intensively, especially from 1990 on. There were a great

Mr Minister-President, let's come back to business. According to the German-Russian Chamber of Commerce, around 400 of the nearly 6000 German

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Das Zukunftsmodell "BMW Vision Next 100". © BMW Group www.bayern.de

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FACE TO FACE

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companies active in Russia left the Russian marketin 2015. How can this be explained? Is German enterprise losing confidence in Russia? Is this a trend, or a temporary phenomenon? For some of the companies, the withdrawal can be explained by the current situation. After all, the low Russian rouble makes imports from Germany very expensive for the companies engaged in Russia. Sanctions and counter-sanctions are also straining business relations. The best way to create trust is through dialogue. There are positive cases, too. For example, trade fair organisers like Messe München and NürnbergMesse are expanding to the Russian trade show market. Several Bavarian companies are now in the process of deciding to set up new production sites in Russia or to expand them. That is why we should work together to re-intensify the bilateral economic relations over the medium-term. More than once, you haven spoken out against Western sanctions on Russia, which not only cause economic damage, but also a certain degree of nervousness in business community circles. How do these sanctions and Moscow's counter-sanctions affect German-Russian relations? When, in your opinion, will the Western sanctions be lifted? The sanctions against Russia do, of course, also have impact on trade partners in the European Union, Germany and Bavaria. The Russian counter-sanc24

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tions particularly affect the sectors of agriculture and food. The European Union's sanctions are the reaction to Russia's actions in Ukraine. Europe is looking to leverage them to achieve implementation of the Minsk accords. And despite a great deal of progress, there is still much to do. In the interest of everyone involved, I hope that a solution to this conflict can be found soon. How do you view the perspective of advancing the relations between Bavaria and Russia, between Bavaria and Moscow? What should the two sides primarily do to achieve success in those relations? I firmly believe that personal contact and exchange in personal dialogue are what is important. That is why I will be travelling to Russia again in autumn this year – accompanied by a large delegation from business and science. My wish is for Bavaria and Russia, Bavaria and Moscow to maintain and intensify their relations in personal contact. Mr Seehofer, you visited Moscow for the first time in April 2011. Have you noticed any kinds of changes in the Russian capital? What particularly drew your attention? Unfortunately, the tight scheduling during international visits does not leave room forbecoming acquainted with and exploring a city. My impression has been that of a thriving metropolis. Moscow is a global city of tremendous dynamics! ■

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) 777 77 77 Fax: +7 (495) 957 05 92 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) 777 77 77, +7 (495) 957 72 17 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) 777 77 77 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, Bldg. 1 Phone: +7 (495) 363 32 32, +7 (495) 232 33 63 Fax: +7 (495) 705 96 22 www.moex.com

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Garden Ring sidewalks to be widened

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idewalks on the Garden Ring in Moscow will be widened within the scope of the “My Street” program. The project entails the reconstruction of one of the capital’s central ring highways. Project architects have proposed a return to the Ring’s historical appearance: they plan to plant about 1,500 new trees along the highway. The project will result in the emergence of 100 new squares and green areas in the city center, which will resurrect the Garden Ring’s historical appearance and make the street more comfortable. The project also entails the establishment of a uniform width for the roadway in order to avoid traffic bottlenecks and widen the pedestrian areas in specific sections.   These areas will be equipped with energy-efficient lights and street furniture. There will also be benefits for motorists, as the optimization of the space will result in the creation of new parking areas. This year, improvement works on the Garden Ring will encompass the section of the highway that stretches from Old Arbat to Dolgorukovskaya Street (Smolenskaya Square, Novinsky Boulevard, Kudrinskaya Square, Sadovaya-Kudrinskaya Street, Bolshaya Sadovaya Street, Sadovaya-Triumphalnaya Street and Oruzheiny Pereulok). “The improvement works will be completed in accordance with uniform standards, which will enable us to combine all of these streets into a single space,” the design documentation reads. Public transportation stops will be equipped with electronic displays for transport schedules, ticket booths and free Wi-Fi. Special curbs about 50cm in height will be used to protect the trees. Creating a uniform pedestrian area means that

the crosswalks near the entrances to residential areas will be lifted to match the height of the sidewalks. Trees will be planted along the pedestrian zone. The color of the sidewalk will serve as a navigation tool. The light granite part will be used for pedestrians, while the darker section will demarcate parking areas. Different shades will be used on the Garden Ring to highlight promenades and transit areas. Thanks to special paving in front of building facades, the sidewalks will stay dry. This paving method will minimize the likelihood of deformations and distortions at the junction with the main sidewalk paving. Moreover, around 800 new energy-efficient lights will be installed along the sidewalk and roadway. Work on the project is to begin in May, and will be completed in the fall of this year. ■

First budget cruise

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ext season, Mosturflot will launch a budget cruise project on the 4-deck ship Knyazhna Anastasia. Tourists will be able to select between a full or partial ticket, as well as opt to purchase a ticket without a meal plan, order individual tours or plan their own route for exploring tourist attractions after receiving a free consultation and map of the city on board of the ship.

The ship will have a self-service restaurant that operates according to a free flow system. The restaurant will be able to service up to 160 tourists at a time, including tourists who purchase meal plans and those paying out of pocket. The ship deck will be equipped with a cafe-bar that will offer a wide range of drinks, as well as cold and hot snacks. This summer, taking a cruise along the rivers of Russia’s central region will be available to cruise lovers with different budgets. Cost reduction is possible with the help of a flexible system that allows guests to hand-pick which services will be included, including meal plans. Prices start at 2,300 rub/day per person. The ticket includes: accommodation in a cabin, travel information, lectures, music, entertainment and children's programs on board. There are a total of 16 cruises, ranging in length from 3 to 13 days, planned for 2016 (all will depart from and arrive in Moscow). In 2016, Knyazhna Anastasia will be able to accommodate a total of 4,800 tourists. ■

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CSKA will have its own metro station and park

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eonid Pechatnikov, the Deputy Mayor of Social Development, has announced that the Moscow Interdepartmental Committee decided to name the metro station in Khodynskoe Pole after the athletic club CSKA. The change will be carried out at the initiative of the Ministry of Defense employees, as well as Central Army Sports Club fans who have pointed out that Moscow already has stations named after the athletic teams Dynamo and Spartak. The station, which is currently under construction, will be a part of the new metro ring line. The new line is to be commissioned in 2020. In just three years, 60 kilometers of metro rails and 34 new stations will be constructed. The Third Interchange Contour will have five new stations: Petrovsky Park, Khoroshevskaya, Khodynskoe Pole, Shelepikha and Delovoy Tsentr.

A big park will also be erected next to the CSKA stadium. According to Deputy Mayor for Urban Development and Construction Marat Khusnullin, the stadium and the surrounding area will be open to the public. Mr. Khusnullin also noted that the main parts of the CSKA stadium construction project have been completed, and the arena is scheduled to open

this summer. Specialists have already completed the construction of all stands and the canopies over them, mounted the facades of commercial lodges and installed elevators. On the football field, the base unit, drainage, aeration and heating systems, as well as turf and field firmware have all been completed. ■

A pedestrian area will appear next to the Polytechnic Museum

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street gallery will appear in place of the lower tier of the Polytechnic Museum. The gallery will bring together existing pedestrian routes in the center of Moscow. The gallery will be established next to house 3/4, on Novaya Ploshchad. The street gallery will be four meters below the sidewalk, and pedestrians will be able to descend into the gallery via the stairs next to Solovetsky Stone. Pedestrians will be able to get to Ilyinsky Square via an underground passage. The Museum Park will be separated from the sidewalk and roadway with a green, multi-tiered retainer wall

about 4 meters in width. Tour buses and other transport will be able to drive up to the museum from Lubyansky Proezd. The new pedestrian area will join together existing routes in the center of Moscow: Nikolskaya Street, Myasnitskaya, Maroseika – Pokrovka, as well as Zaryadye Park. The establishment of this area is part of the Polytechnic Museum reconstruction project, which is being carried out by the Government of the Russian Federation. ■ April-June 2016 CAPITAL IDEAS

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Avenue South West Shopping Center is now open

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he area around Yugo-Zapadnaya metro station did not have any modern shopping centers for a long time. Consequently, the big empty space became home to a large number of small kiosks. Now that a modern shopping center has been erected, local residents, as well as students and professors who spend a lot of time in the area, have the opportunity to relax and shop comfortably. “Over the past few years, construction of shopping centers and big stores has been developing in Moscow. Over the course of five years, the total area of shopping centers has increased by almost twenty-five percent, which means that Moscow is one of the global leaders in terms of this indicator. What does this mean for Moscow and Moscow’s residents? First, shopping is inching closer to our places of residence, since stores, both medium-sized and large-scale shopping centers, are being erected within walking distance,” said Mayor of Moscow Sergey Sobyanin while doing a walk-through of a multi-purpose shopping center. Avenue South West was constructed at the intersection of Pokryshkina Street and Prospekt Vernadskogo. The total area of the shopping center is 85,000 square meters. The building has nine floors, four of which are located under ground. The glass exterior has a futuristic design, dominated by clear and symmetrical shapes. There are multimedia screens installed on the building facades. All of the above-ground floors, as well as one below-ground floor, will be used to house stores. The rest of the space will be used as a parking space with total capacity of 1,000 cars. There will also be another parking lot for 770 cars. The construction of Avenue South West included measures to change public transport traffic flows around the metro sta-

tion. The parking and turn-around area for Mosgortrans buses, which used to be located on the site of the shopping center, has been moved. It is now located at the intersection of Leninsky Prospekt and Ulitsya Akademika Anokhina, near Toparevo metro station, which has been re-routed as the end point for a lot of public transport that used to run to Yugo-Zapadnaya metro station. Moreover, the investor has built a trolleybus contact network for transferring the trolleybus waiting platform to Ozernaya Street, which entails the reconstruction of the traction substation and an increase of its capacity. Thus, it was possible to significantly reduce the intensity of bus and trolleybus traffic, improving the road conditions near the Yugo-Zapadnaya metro station. ■

Renovation of Aragvi has been completed

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he historical restaurant Aragvi, located at Tverskaya 6, has been renovated. While renovation work was in progress, elements of 17th century structures that date back to the times of Tsar Alexei Mikhailovich were discovered at the site. The building is constructed in the place of four historic houses and has a long history that reflects different time period of Moscow architecture. The first stone buildings were constructed here no later than 1670. In 1730, house No.28 belonged to Prince Gagarin VI. A new stone building, which has been preserved as part of building 2, was erected during this period. New buildings were erected here again in 1777, when the land belonged to pharmacist Jacob Kalkan. In 1770-1790, the area contained two buildings, separated by a fenced-in courtyard. In the beginning of the 19th century, the property was passed on to General-Mayor D.V. Chertkov. A hotel called “Sever” was opened here, which was later renamed “Dresden.” The hotel was popular among musicians and writers: famous pa28

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trons included Alexander Pushkin, Ivan Turgenev and Leo Tolstoy. The hotel building gradually expanded, eventually growing to incorporate 3 floors. In 1904-1909, the building grew to 4, and then 5 floors. The cellar was used to store Prince Golitsyn’s wine collection. The first floor housed hotel spaces, along with stores and kiosks. For several years in the beginning of the 20th century, artists Surikov lived in the hotel (he died in 1916). In 1918, the building was home to the newspaper Pravda. Then, in the 1920s, it was the Palace of the Soviets. In the beginning of the Soviet era, the State Publishing House bookstore was located here. During the reconstruction of Tverskaya Street in the 1930s, Dresden Hotel and the house of V.I. Gagarin were partially included within the scope of house No.6. “False facades” were completed for buildings along the square, and new residential buildings were erected along Tverskaya Street. The main facade of the hotel

was completed in style of Socialist Classicism. After reconstruction, Dresden hotel was renamed Moscow City Council Hotel. In 1938-1939, a Georgian restaurant named Aragvi opened in the basement and on the first floor of the building. While work to draft a new plan for the closed restaurant was underway in 2004, a new discovery was made: buildings that were erected before Peter the great. After conservation efforts and a change in ownership, scientific restoration supervised by the Department of Cultural Heritage of Moscow started in 2013. Two years later, restoration work was completed. According to the Mayor of Moscow Sergey Sobyanin, Aragvi restaurant will reopen this spring. ■

New gastronomic places

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new place called Mark i Lev on Rublevo-Uspenskoe Highway in the suburban Gorky-2 proves, once again, that the concepts “Russian cuisine” and “healthy lifestyle” can be synonymous. The restaurant’s suppliers are farmers who care about the environment and abstain from using harmful technology and pesticides. The menu includes wellbalanced seasonal and healthy products. The wine list stresses

Russian wine brands such as Vedernikov, Gai-Kodzor, Uppa Winery, Alma Valley, Raevsky, Lefkadia, as well as the Crimean brand Yayla, which will be offered on the Moscow market for the first time. The European section of the wine list includes organic and biodynamic wines. The sixth cafe of the home cooking chain Varenichnaya No.1 has opened close to Tretyakovskaya metro station at Klimentovsky Pereulok 10, building 2. This is currently the largest cafe in Moscow: it contains three halls and has a total capacity of 158 people. The interior of the cafe is dedicated to athletic accomplishments from the Soviet era: the walls are decorated with posters featuring Olympic skiers and quotes such as “If you want it, you must train,” “Sun, air and water are our best friends,” “Soviet football” and

so on. One of the walls features two gym bars for pull-ups and push-ups, the tables are painted like chess boards, and the entrance features the old-school gymnastics apparatus “Kozel.” LavkaLavka Farmer’s Market has opened at Mega Khimki. The market will have about 70 points of sale, where farmers from different regions in Russia are going to sell honey, pine nuts, chocolate, cocoa beans, cottage cheese, yogurt, sour cream, vegetables and meat products. The farmer’s market will operate in accordance with Mega Khimki’s schedule: from 10:00 am to 11:00 pm on weekdays, and from 10:00 am to midnight on weekends. There will be a special zone with workshops and games for children. The market will also have an incubator, where visitors will be able to watch the birth of baby chicks. Katusha Gastronomic House has officially opened its doors. Katusha is a combination of a restaurant, gourmet boutique and confectionary. It is located at Bolshaya Dmitrovka 23. Dmitry Zhelyazkov, the best student of the well-known Italian chef Carlo Grecu, is in charge of the kitchen. Dmitry has worked with Carlo Grecu on projects such as Beef Bar, Dom Carlo and Sixty. Katusha is a great place to go for your morning cup of coffee or a quick business lunch. The confectionary has a wide selection of treats on offer, from macaroons to unforgettable cakes. Katusha only uses high-quality, natural ingredients. The recipes have been used for many years, to the delight of Katusha’s guests. Famous restaurateur Alexander Rapoport has opened a restaurant called Erwin. RekaMoreOkean with a seafood menu that is unique for Moscow. 90% of seafood products used by the restaurant come from Russian seas and rivers, and prices for different dishes vary. With a selection of over 30 dishes, the “CrabsCrawfishShrimp” section is the menu’s trump card. Crabs: Kamchatka crabs, snow crabs, frog crabs. Crawfish: Louisiana-style, Rostov-style, or Sevan-style. Shrimp: Argentinian from the warm waters of the Atlantic, from the cold waters of northern seas, the sweetest shrimp that the Japanese refer to as Botan-Ebi, and tiger shrimp, which resemble creatures from the Cretaceous Period. ■ April-June 2016 CAPITAL IDEAS

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MOSCOW IN WORDS

“All religions will pass but this will remain: simply sitting in a chair and looking into the distance.”

Vasily Rozanov, Russian writer and philosopher

“Bread for myself is a material question. Bread for my neighbor is a spiritual one.” Nikolai Berdyaev, Russian religious and political philosopher

“Life has taught me to think, but thinking has not taught me to live.” Alexander Herzen, Russian writer and thinker

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“To listen is an effort, and just to hear is no merit. A duck hears also.” Igor Stravinsky, Russian composer, pianist and conductor

“In every physical action, unless it is purely mechanical, there is concealed some inner action, some feelings. This is how the two levels of life in a part are created, the inner and the outer. They are intertwined. A common purpose brings them together and reinforces the unbreakable bond.” Constantin Stanislavski, Russian actor and theatre director

“You could wonder for hours what flowers mean, but for me, they're life itself, in all its happy brilliance. We couldn't do without flowers. Flowers help you forget life's tragedies.”

Marc Chagall, Russian artist

NOTHING VENTURED

Russian wine with a Swiss personality Winemakers are exceptionally responsible professionals who approach their work, along with everything else in life, with strict perfectionism. A meeting with Swiss winemaker Renaud Burnier and his wife Marina confirms this fact. Relying on techniques developed by experienced Swiss winemakers, they have been making real Russian wine in Southern Russia for several years. The story of their winery, which is located in Natukhaevskaya Stanitsa near Novorossiysk, starts in 1999.

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e started working in Russia many years ago, when the Swiss franc was worth 19 rubles,” Renaud jokes as he recalls how long he has been working in Russia. “I had known for a while that the country has unique places, in terms of climate and location, for planting vineyards,” he says. “Winemakers know, for example, that people in the Caucasus have been growing grapes for a long time. When I reflect on my childhood, it is clear to me that Russia has been on my mind since then. When I met Marina, we decided to move here and research Russian winemaking.” “When Renaud came to Moscow for the first time,” Marina recalls, “he, like many of my other foreign friends, wanted to try Russian wine. This makes sense; 32

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since we all want to try new things and get to know the countries we visit through their traditions, cuisine and culture. This is especially so in Europe where there’s an established culture of locally made food & wine. But Renaud couldn’t find any Russian wine. People kept telling us it simply does not exist.” This came as a surprise to Renaud and he suggested we go to Southern Russia, where he knew people have vineyards. Renaud and Marina came to Southern Russia to do their own research and understand what happened to Russian wine. “Our friends gave us contact information for experts from the Krasnodar Institute of Viticulture and Winemaking,” Marina continues, “and they invited us to their experimental facility, which was located in Buzhor, near Anapa, to look at the grape

harvest and wine production process.” When Renaud tried the local grapes, he no longer had any doubts: he had to find land here, plant vineyards and make wine. He understood immediately that high-quality wine that falls in line with international standards could be made here. Renaud was particularly encouraged by the fact that here in Russia there is a mass of empty land that can be used for vineyards, while back in Switzerland there’s a lot of competition for it. The grapes that were grown here impressed Renaud but he was considerably less impressed with the wine that was made from them. Experts explained that winegrowers and winemakers have different goals. For winegrowers, the main goal is to have as big a harvest as possible. Winemakers understand that this goal does not cultivate the kind of grape they need to make wine. According to Mr. Burnier, considering the April-June 2016 CAPITAL IDEAS

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working conditions for wine growers and wine makers, both deserve much credit for the effort they put in to make a high-quality product. For three years after they took a decision to make wine in Southern Russia, Renaud and Marina searched for a suitable plot of land. “Why so long? Because we can’t afford to make any mistakes,” Renaud explains, “When you plant a vineyard, it’s going to be for a long term. We came to Russia seven times and researched the whole of the Black Sea coast. We did a lot of work, studying and analyzing factors that directly or indirectly influence the quality of grapes and wine – the soil, climate, the slopes and their relationship to the sun, annual rainfall volumes, proximity to the sea and so on.” Renaud decided that he would make top-quality wine in Russia. This is why he was so specific about selecting the right plot of land. He finally chose a beautiful spot on a hill and surrounded by a forest. It fit all of Mr Burnier’s criteria but he couldn’t set up his vineyard there due to construction of a major industrial facility nearby. “Of course, this put a damper on everything,” Marina says. Her husband was adamant about setting up a 34

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business that would be environmentally friendly and would not disrupt the surrounding ecosystem. However, finally he found an ideal spot. As is often the case, Renaud discovered it just as he was losing hope for his project in Russia. “It was as I came home. I had a special feeling for this place”. Renaud says, “It’s a lot like our vineyard in Switzerland and is located at the optimal spot for cultivation in terms of latitude – at Natukhaevskaya Stanitsa between Novorossiysk and Anapa, in the Caucasus Mountains.” The plot was once a vineyard years ago but had been abandoned. Owned by a local farmer, now none of the barriers, bureaucratic ones included would prevent Renaud from realizing his dream. By 2001, the couple had bought the land from the farmer. “In 2003, we planted the first seedlings, which we brought from Italy and France from small family farms that grew grapes for European winemakers,” Renaud says, “It was very symbolic for me to have our daughter plant the first seedling. That year, we planted seedlings over 17 hectares of land.” Renaud and Marina had to overcome a lot of challenges in order to produce the first batch of Burnier wine in Russia by 2005. “It was difficult to explain to people

what exactly we wanted the end result to be,” says Renaud, “Many of the people we hired had worked in vineyards before but none had worked in accordance with the standards I had established. In 2001, there were no modern vineyard technologies in Russia. There weren’t even any of the materials we needed – wires, binding equipment and so on. We had to bring all these things from Switzerland, the process was quite a feat, especially in terms customs clearance.” For environmental reasons, it was decided that the winemaking facility would be built out of wood but the idea was dumped due to Russian fire hazard standards. Renaud brought all of the equipment from Switzerland in the hope of quickly installing and starting the winemaking process. However, when the first harvest was collected in 2005, he still didn’t have a facility to produce. “We had to make do,” Marina adds, “We installed our equipment at a neigbouring facility where our people worked on it with the grapes we had harvested. The first wines we produced were Krasnotop, Cabernet Sauvignon, Merlot and the white Assemblage.” Burnier’s line of wines includes one made from the local grape  – Krasnostop Zolotovsky, which Renaud tried when he first visited Russian vineyards. It was

Krasnostop that inspired him to set up his winemaking business near Anapa. Ironically, for the next 10 years after their first harvest, Renaud and Marina struggled with Russian entrepreneurs, officials and other people they came into contact with. Back when Russian businessmen sought to get rich as quickly as possible while keeping investment to a minimum, the Swiss man’s meticulous approach to developing his business was confusing. Many simply did not believe that good quality wine could be made in Russia. Renaud and Marina tried hard to break this stereotype through their actions and persistence. Now, Mr Burnier grows his own grapes on a territory of 49 hectares. The manufacturing facility is located at the vineyard and is a full-cycle plant, from sorting the grapes harvested to supplying wine directly to consumers. Renaud developed the concept of the winery himself and Swiss architects helped to elaborate building plans. The project turned out to be extremely complicated to execute on Russian soil! Russian construction stanApril-June 2016 CAPITAL IDEAS

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dards, which have been the same since the 70s, aren’t compatible with the technologies Mr. Burnier wanted to use. He would argue with construction workers and local officials. This led to a delay in construction of five years after the first seedlings were planted in 2008. Building to took four years to complete, including time to obtain necessary permits. The result: a winery in an ideal location with a unique design, (for example, the production facility is below ground level) which adheres to environmental and resource conservation standards. Burnier’s cellars contain about 500 barrels with a capacity of up to 225 liters each. The barrels are made out of French oak and were brought from Europe. A total of 30 people work at the enterprise. Depending on the year, Burnier produces anywhere between 180,000 and 200,000 bottles of wine.

Note from Capital Ideas: Renaud Burnier comes from a family of winemakers with historical ties to Russia. Prior to the revolution, governesses from Switzerland frequently worked in wealthy households. Renaud’s great grandfather’s sister taught the children of Nicholas II’s sister. After the October Revolution, she returned home. Renaud learned a lot about Russia from her memories when he was a child, imagining it to be a magical and wonderful country. He started learning the art of winemaking aged 20. From his teacher, professor Maurice Mishler, the winemaker learned that there are unique places for growing wine in Russia.

“There is wine that is made on an industrial scale and then there is terroir wine. We make the latter,” Marina explains, “It’s impossible to make this kind of wine in large quantities. It’s a labor-intensive process, that requires a lot of time, energy and resources. The quality of the grapes plays an important role. Which is why so much work needs to be done on the vineyard. Terroir wine is high-quality wine that is made naturally without the use of industrial technology. Taste is created through a natural process. A master of the trade knows how to create a particular style, which remains mostly unchanged from one year to the next, from one harvest to the next. It is this style, associated with the specifics of a particular geographical location that is so highly valued by customers.” Renaud comments proudly that theirs is the only family winery in the area. The success of the endeavor depends on many factors, each one equally important. Of course it includes quality control at every production stage, raw materials, love for the work you do, as well as the ability to never give up and come up with solutions in when facing difficulty. The labels on the wine feature Burnier’s family name. This isn’t just a marketing strategy but a sign that the winemakers personally take responsibility for the product quality – their family name and their honor is on the line. Today, Burnier wine can be found in stores and restaurants all over the world. In Russia, for example, you can find it at Metropol, Buddha Bar, Ginza Project, MOS and Valenok in Moscow, at Rodina, San Remo and Baikal in Sochi, as well as in Lublu in St. Petersburg. ■ Photos from Renaud and Marina Burnier's personal archives

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Number of enterprises by type of economic activity in 2014 /year-end, %/

38,7 %

– wholesale and retail trade, repair of motor vehicles, household goods and personal items

20,3 %

– operations with real estate, renting and provision of services

11,9 % 9,6 % 8,7 % 6,8 %

– construction

– manufacturing

– other types of activity

– transport and communications

Agriculture, hunting and forestry, fishing and mining account for a minor share of small and medium size business activity.

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Luca Tavasci:

The most important thing is that the suit fits! We judge people by their clothes. This applies to men as much as it does to women. Luca Tavasci, a 27-year-old style consultant at De Luca Sartoria, has no doubts that this is the case. “Somebody like Adriano Celentano can certainly afford to wear whatever he wants, but this doesn’t apply to the rest of us. Regular men must watch what they’re wearing,” he said in an exclusive interview with Capital Ideas.

Today, there are a lot of places to shop for stylish clothes in Moscow: almost every brand in the world can be found in the capital. However, a famous brand does not always equal great quality. “When we buy famous brands, we can’t always be sure about where the items we have purchased were made. Unfortunately, there are a lot of fakes on the market,” Luca Tavasci explains. Luca knows that he’s talking about. He graduated from the Milan Institute of Design. Mr. Tavasci came to Moscow six years ago. “I was around a lot of Russian friends in Italy and they pushed me to come to the Russian capital,” Luca Tavasci says about his decision to move. At the time, Luca Girimondo, the owner of De Luca Sartori, offered him a position as a style consultant at his Moscow office. Girimondo’s grandfather established the shop in Verona, back in 1923. De Luca Sartori specializes exclusively in sewing classical men’s clothing. This includes, 38

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suits, shirts, ties, jackets, trousers and shoes, as well as accessories like belts and wallets. We use exclusively top-tier English and Italian fabrics but the price of a suit made at our shop, for example, will be half of what you would pay for a brand-name suit at a boutique. The fact that Mr. Girimondo decided to open a shop in the Russian capital in 2008 was no accident. According to Luca Tavasci, Russian men started to take an interest in fashion in the beginning of the 2000s. They care more about what they wear. Of course, this primarily applies to businessmen and politicians. Why have the majority of men in Russia always been so indifferent to clothes? The De Luca Sartoria style consultant has his own opinion about this. “There is only one reason women in Russia took more of an interest in fashion than men for several decades,” he said, “there were more of them in the country than men. This means that, since there was so much competition, women wanted to draw attention to themselves. They always had to look good. For Russian men, the gender gap had the opposite effect: he would be fine no matter what he wore.” Regardless of how things used to be, those times are gone now. Although there are still more women than men in Russia, men have started to pay attention to fashion. The men who come to the shop where Luca Tavasci works are among them. So who are they? “I want to point out that our clients include expats who are working in Moscow as well as Russians,” Tavasci explains. “Right now we have about 300 clients. These are members of the elite class that includes both businessmen and politicians who are 28-70 years old. We have been affected by the crisis, but we are in Russia for the long haul. We are sure that things will fall back in their proper place. So far as our clients go, they fall into three main categories.

The first is men who have problems finding a size that works for them in stores. The second category is people who are so busy that they don’t have the time or the desire to go shopping and spend time picking out clothes. The third category is men who just like to dress in an elegant, classical style.” All of the clothes that our Moscow clients order are sewn in a shop that is located in Verona. There are about 50 highly qualified specialists working there. They also take care of orders that come from Mexico, Ukraine and Switzerland. “This is how it works,” Luca explains, “As soon as a client contacts us, we set up a meeting at a time that works best for him. I come to his office or home and take the order, taking all of the necessary measurements on the spot. This usually takes about an hour and a half. The order is then sent to Italy, where it takes about a month and a half to complete.” But why not make the suits in Moscow. “We won’t be able to,” Luca says, “You can’t simply transfer the process of making a high-quality suit from Verona to Moscow. A suit isn’t like cheese, which, in light of the sanctions, is being replaced through an import substitution program. Cheese that is somewhat similar to the cheese made in Italy or France can be made in Russia, although I’m not so sure about the quality. But still, there is still milk here, along with all of the equipment you need. Things are a lot more complicated with a suit. Having the right fabric and equipment is not enough. To tell you the truth, fabric is really a secondary concern. You need the eyes and hands of experienced professionals. This isn’t an unfounded statement: out shop in Verona is headed by a tailor who has been in the business for forty years!” Yes, “the most important thing is that the suit fits”  – that’s what we learn in the song from the film Magicians, which is so popular in Russia. “Absolutely,” Luca exclaims suddenly, “I know this expression from a movie that’s very popular in Russia and I completely agree.” ■

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Time to convert feelings into action The World Trade Center hosted a Russia-India business day. The main topic for the new format for communication between businessmen from the two countries was the issue of mutually beneficial cooperation in the small and medium-size business sectors.

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ll of the speakers agreed on one point: cooperation between Moscow and Delhi in the nuclear, military and diamond spheres will undoubtedly be developing further. After all, these spheres of cooperation receive government support. But what about small and medium-size business representatives? They have to figure things out for themselves. What needs to be done? “First of all, we have to eliminate the information gap between our countries,” says Amit Telang, a senior official at the Indian Embassy in Moscow, “Although Russians and Indians generally have positive feelings toward each other and this has been the case for many years, in practice we know very little about each other. Feelings need to be translated into concrete action.” According to the official, we have a lot of issues when it comes to financial and customs problems, not to mention stumbling blocks such as the visa regime, without the liberalization of which nothing will be possible. The visa situation really is a challenge. For example, sometimes Indian businessmen who come to Moscow have to wait several hours at the airport while they wait for permission to enter the country.

Vice President of the Moscow Chamber of Commerce Suren Vardanyan also wonders why, in spite of our shared history and strong friendship, trade volumes between Russia and India remain low. Our business relations with Turkey, for example, are much better, in spite of the fact that Russia has had a lot of issues with Turkey in the past. There is plenty of different kinds of textiles from Turkey in Moscow, but almost none from India, in spite of the fact that Indian textiles are famous all over the world. However, quality textiles are not India’s only source of pride. According to Sammy Kotwani, head of the Indian Business Alliance, “we don’t have oil or gas in our country, so we cannot rely on natural resources and must develop all sectors of the economy – agriculture, the pharmaceutical industry, the light industry…”. Every one of these sectors in India has small and medium-size business representatives who are ready to work with their Russian colleagues. Incidentally, Kotwani himself is an excellent example of how a person can put their fears aside and start a small business. He has a shop in Moscow that became popular a long time ago. It is no surprise that Sammy Kotawani, as one of the initiators of the Russia-India business day at the WTC, signed an agreement with Maksim Chereshnev, Chairman of the Russian Trade and Economic Development Council. The document was signed with the goal of strengthening informal contacts between Russian and Indian businessmen. ■ April-June 2016 CAPITAL IDEAS

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Arnaud Jacquart:

Russia is a fantastic school of life French-born Arnaud Jacquart came to Moscow as a student right before the coup of 1991 and immediately fell in love with Russia. He considers himself to be more Russian than French, manufactures electric bicycles in partnership with Russian plants and dreams that Tverskaya Street will one day be a pedestrian area free of cars. Arnaud, do you remember your first impressions of Russia? I came to Russia over 20 years ago, in 1991. I came in July, and there was a coup in August. I was walking down the street and taking in everything that was happening. This was a historic moment, and I was right in the middle of the action. I felt the power and true heart of Russia and understood that this is the country I want to live in. Then, at my first job, back when I was a salaried employee, I ended up in a small town called Kharyaga (an oil field town in the Nenets Autonomous District, located in the Arctic Circle, 165 kilometers from Usinsk). It was negative 35-40 outside. I was in shock. 15 days later, the person who was in charge of heating for the city turned off the heating for the whole town because of some personal problem. This happened at night, and all of the pipes burst overnight within just a few hours. We turned on all of the electric heaters we had, but still had to sleep in outdoor clothes. And then we had to work for another day and a half in this weather while they were fixing the heating. Welcome to Russia! These were my first impressions. What about your first experience of running your own business? It was funny and short-lived. Three years after I got 42

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here, I decided to start my own business selling French wine. I prepared and researched the market, I talked to people. Less than a month later there was a knock on my door. There was some huge guy standing in front of me  – so huge that he didn’t even fit in the doorway. He asked me, “are you the French guy who is trying to start a wine business?” I looked at him for a few seconds and said, “I had the idea, but it’s definitely gone now.” He told me I made the right decision, turned around and left. After this, I gave up on the idea of selling wine and decided to go into doing set meals. At the time, I was close to running out of savings and the business started with a small bluff. I agreed to supply meals for a relatively large organization. They took my word for it – at the time, people believed a Frenchman in a tie and didn’t ask for letters of recommendation. I said that I would be able to start delivering the meals in 15 days, but they insisted on the following Monday. I didn’t want to lose my first big client and said that I would do it. In three days, I set up an operation in my kitchen to cook meals for 80 people, without any special equipment. We worked like this for another two weeks, until we could afford to get a real kitchen space. In five years, we were making 30,000 lunches. Then I opened a cafe and bakery chain called Le Khleb. I sold the business, ACS Catering, before the next crisis in 1997 because I understood that I had stopped growing.

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to put it back on. I had to spend several hours in 40 degree weather behind a row of trucks, surrounded by black smoke and soot. It was then that I realized that something in this world must change. Since I was into sports, I decided that I am going to make environmentally friendly modes of transportation. Electric motorcycles don’t sell well, so I decided to create an electronic bicycle. This was six years ago. I opened the companies Emotions’and Re-volt in Moscow and now we make and sell electric scooters, skateboards and bicycles. We have our own manufacturing plants in China and in Germany, as well as over a dozen plants in Russia that manufacture parts for us. We sell our products in Europe as well as in Russia. It’s interesting work. I wake up in the morning thrilled to be alive and doing what I do. There is endless potential for innovation here. The moment when you’re showing people your new product during a test drive is always exciting and uplifting. This was a tough time in Russia – the 90s. Did these years affect you? You have to understand where you’re going and who you are, and be able to learn from what happens to you. I didn’t get in anybody’s way, I didn’t steal. Everything I made, I made honestly. So there weren’t any threats. And a crisis can quickly remind you who you are and where you belong. Russia is a fantastic school of life and I’m thankful for every day that I’ve spent in this country. The only thing I’m afraid of is that Russia might turn into a boring European country. But I believe that the constant stress and difficult climate will ensure that Russia retains its character. I hope that this country will continue to be my inspiration for the rest of my life. However, I have learned to avoid putting my all of my eggs in one basket, and don’t exclude the possibility of my children building their lives in Europe. I also plan on developing my business on the European market. The crisis has just speed up my plans. At the same time, I consider myself to be more Russian than French but I am a patriot of both countries. The economic climate might not be the best here right now, but there is a lot more potential than in Europe. How did you come up with the idea to make electric bicycles? In addition to being a businessman, I have always been into sports – motorcycle racing at a fairly professional level. In 2009, I decided to take a shot at the World Cup, and received the title of International Master of Sports, becoming a silver medalist in the rally. During one of the races, I lost the seat of my bike in the middle of a desert and lost too much time trying 44

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What do you dream about? I don’t dream about creating some kind of superpower: running a huge company is not something that I’m after. My dream is that, in the next ten years, every other person on the planet will have their own electric vehicle. Cars that run on gasoline are outdated and damage our environment. Using a quiet and clean electronic vehicle is great fun. My dream is that Tverskaya Street in Moscow will be closed off for cars so that we can walk there with our children. The Garden Ring is already shutting down once a year for a bicycle parade, so everything is possible! I hope that I have enough energy to be productive for a long time and do what others are not able to do. I dream that people remember me as a person who invented something truly genius, or at least as a person who made a change in favor of healthy lifestyles. Then I will consider my mission to have been accomplished. What advice would you give to foreigners who come to Russia to do business? The first important thing to understand is that nobody in Russia is waiting for you. Always have a backup plan and be ready to lose everything. The second thing: if you have already started something, finish it. Doing something half way in Russia is absolutely useless; it’s better not to start at all. Third, be careful with Russian women. I’m just kidding. But don’t lose your cool. Moreover, a person doing business in Russia must be willing to take risks. Here, doing marketing research and having a clear development plan is not a guarantee that you will succeed. You have to stay alert, be able to quickly adapt to changes and take risks. Especially now, when everything is changing so quickly. ■ Photos from Arnaud Jacquart's personal archives

New agency for investors In late March, Analytical Credit Rating Agency (ACRA), which was established in Russia at the end of last year, held a business breakfast dedicated to issues of its development.

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t one meeting with famous economists, where the issue being discussed was a financial crisis that started in 2008, Queen Elizabeth II asked the following question: “Why did nobody see it coming?”. This question is not as naive as it first appears. What were all of the leading rating agencies – Moody’s, Fitch Ratings, Standard & Poor’s – thinking? They were supposed to look out for these kinds of problems. Essentially, the Queen asked them the same thing that millions of people all over the planet who were affected by the crisis were thinking. Really, it seems that there are more questions than answers. It’s unclear what the people working for these rating agencies are doing, how qualified they are, and whether or not their work is affected by politics.

By the way, several countries, such as Canada (DBRS) and Japan (JCRA), have had their own rating agencies for a long time.

Reforms of the rating sphere started to go into effect some time ago. The objective of these reforms is stricter regulation of the activities of rating agencies that is aimed at improving the quality of analytical work, avoiding conflicts of interest and the advancement of business processes. Moreover, a lot of experts have been calling to finally put an end to the monopoly what has existed on the ratings market for a long time (it is currently dominated by Moody’s, Fitch and S&P).

To the question, “Suppose you publish your first report and the Ministry of Finance or government officials don’t like it. What will you do?”, Ekaterina Trofimova answered: “Credit ratings aren’t there to be liked by anybody. A credit rating is an instrument that helps make investment decisions. My job is to make sure that the process in the agency is set up in accordance with the best practices and that there are no conflicts of interest. The best indicator of attitudes toward credit ratings is how much they are used by the investment community.” To the question, “Do you feel like you are free from external pressure?”, the CEO of ACRA said: “I feel a strong sense of responsibility to the investment community. My task is to meet the expectations of investors who are interested in a topquality analytical product.” ■

In July of last year, Russia passed Law F3-222, which defines the legal framework of rating activities and the basic provisions of its regulation by the Bank of Russia. A few months after the law was passed, Analytical Credit Rating Agency (ACRA) was established.

40-year old Ekaterina Trofimova became the CEO of ACRA. She graduated from the St. Petersburg State University of Economics and Finance in 1998 with a degree in International Economics. In 2000, she graduated from Sorbonne University in Paris with a degree in Finance and Tax Management. She worked as a financial analyst, Director and Head of Standard & Poor’s Russia and CIS Financial Institutions Rating Group (Paris, France). From 2011 until November 2015, she was a VP at  Gazprombank (Russia), where she was the head of the Centre for Economic Forecasting.

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In Moscow, in the beginning of Ostozhenka Street, there is an Austrian bakery that was opened in October of last year by Martin Erichovich and Engelbert Edlinger. Walk through the glass doors of Engelpekar, and you immediately end up in a different dimension – a warm, cozy, almost homely atmosphere filled with the smell of coffee and Austrian bread.

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The place where

artin Erichovich and Engelbert Edlinger belong to that lucky category of people who make money doing something they truly love. After all, baking and selling bread is not only a profitable business, but has been considered a noble profession for centuries. This is why people from many countries, including Russia, treat bread as something sacred. Engelpekar is not a large bakery, but a lot of customers came in during our hour-long conversation with Martin and Engelbert. Some people simply bought bread and pastries and left, while others ordered coffee and drank it in the shop. Some custom46

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ers stayed to chat with the owners after paying. The bakery’s logo features a skier, old skis decorate the walls and a figurine of a skier on a downhill slope sits atop of the cabinet. “One of our regular customers gave us the figurine,” Martin says, “In my opinion, this is very symbolic. First of all, our logo features a skier. Second, downhill skiing is a traditional Austrian sport that is associated with movement, drive and mastery. In a sense, this also applies to the way we do business.” Martin has long-term ties with Russia. Before opening the bakery, he had already worked in the Russian food industry. He met Engelbert by accident during a flight eight years ago. Back then,

freshness is baked he was selling raw materials for bakery factories. A friendship was born, and two years ago Martin and Engelbert became business partners. Engelbert, who was managing eight bakery companies in Austria at the time, had the idea to open a bakery in Moscow. “My whole life revolves around bread,” he says, “I studied for a long time and then worked for a long time in order to understand the science of making bread. Then I started developing recipes and selling them. Then, I started working in big companies. I had to manage the entire production cycle, as well as be responsible for the staff. Last summer, I left to work in our Moscow bakery.”

Engelbert dreamed of opening his own business for a long time, and he came to Russia frequently. When it was time to finally make his dream come true, he had no doubts about where to open his bakery. “Moscow is a city with tremendous potential,” he said, “It cannot be compared, for example, with Vienna, the capital of Austria.” “Of course, running a business in Moscow is a challenge, but there are a lot of opportunities for growth,” Martin says, “Which is what we were counting on when we opened our first bakery. We plan to open a bakery chain.” Engelbert has discovered that Russian people love to experiment. Austria has a well-developed, rich history of breadApril-June 2016 CAPITAL IDEAS

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making. The country has a lot of interesting bakeries, but introducing something new is difficult due to rigid traditions. Muscovites, on the other hand, are interested in at least trying something new – Austrian bread, for example. Moreover, there is another factor at play. Russians have come to perceive Austria as a country that makes natural, environmentally-friendly products. “We are trying to meet these expectations that are associated with Austria’s image,” Martin says. Getting back to the experiments that Engelpekar has successfully implemented in Russia, the unique apple strudel, which was literally born inside a muffin, is an excellent example. “This combination would be very confusing to an Austrian person, Engelbert says, “but Russians are excited about this unusual hybrid between a muffin and a strudel.” Engelpekar’s trademark is Engelbrot bread, the recipe for which was created by Engelbert. “Russian rye bread is different from Austrian bread,” he explains, “Engelbrot is based on typical Austrian leaven. It’s an air-light bread with an intense taste that incorporates cumin, coriander and other spices." “Engelbert’s most radical suggestion, which he made back when we first started the business, was limiting the bakery’s range of breads to 5-6 kinds,” Martin says, “This way, the employees would be able to focus on thoroughly studying the techniques for just these types of bread. Moreover, this narrow range ensures that bread sells quickly, which means that there is always fresh bread in the bakery. It’s a very radical approach, but we ended up agreeing on a compromise, and now we bake 15-20 product items at site. We sell bread as well as pastries, along with Austrian chocolate and tea. The coffee is Italian.” The bakers at Engelpekar work the same way their colleagues worked 50 years ago. The only difference is that they use modern equipment now  – Engelpekar at Ostozhenka uses German equipment. The bakery does not have a very wide product 48

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range, but there is always fresh-baked bread here. More importantly, everything is done right here on the spot (according to Engelbert, bread doesn’t travel well). “We plan on opening our second Engelpekar bakery this summer, and the third one in the winter,” Martin clarifies, “Each bakery will operate in accordance with uniform standards.” It is not secret that employees are the key to the success of any enterprise, including a bakery. A small team that was carefully selected by Martin and Engelbert work at Engelpekar on Ostozhenka.. “We have very young professionals working here,” Martin points out, “We specifically selected this team because we do a lot of experimentation, and young people are more willing to try new things. We are surrounded by people who are interesting to work and grow with. These are people who are willing to pour their hearts and souls into our work.” It is worth noting that Martin and Engelbert started their business in Moscow while the Russian economy was at a low point. However, the bakery isn’t experiencing any difficulties. This makes total sense, since they are working in a sphere where will most likely never be a decline in consumer demand. Simply put, people will always buy bread. Engelpekar bakes about 400-450 loaves of bread every day and sells them almost immediately. Only rye bread (and some sweet bread) can be kept for sale the next day. “We don’t throw away the bread we don’t sell,” Martin says, “I want to clarify that we really don’t have much left at the end of the day, since the baker knows how much bread needs to be made on a given day. We recently decided to make extra bread and take it to the orphanage. We’ve only done it once so far, but hope to make it a regular undertaking in the future.” What is the main ingredient of the delicious bread Engelpekar makes? “Flour,” Engelbert says, “We get our flour in Austria, from our partner whose family has been in the flour business for 23

generations. For me, as a baker, it is extremely important to have high quality flour. After all, this is the foundation of bread. If the foundation isn’t good, the quality of the product goes down. Generally speaking, flour is a whole separate science. There are many factors that can help determine the quality of the flour. The flour’s ability to hold water, for example, affects the flexibility of the dough. A lot of other enzymes that are added to the flour also influence this quality. I especially want to point out that we don't add any enzymes to the flour. And, of course, the quality of the flour is also impacted by the climate in the location where the wheat or rye used to make it is grown. This is why flour at

the mills in Austria is often blended. Different types of grains are combined in order to create the best flour.” Engelpekar is a unique place with a homely, cozy atmosphere infused with the unforgettable aroma of freshly-baked bread. It combines Austrian traditions, experience and knowledge of the intricacies of baking. All of this is done for the customers – people who come here every day to bring home a tiny piece of the bakery’s warmth. ■ Photos provided by Engelpekar's press service

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Jussi Tuisku:

We are planning to strengthen our presence here "The most significant decision was, without a doubt, to localize our manufacturing in the center of Russia, so that we can offer the most competitive products for reasonable prices," said the Head of Ruukki Russia in an interview with Capital Ideas. Speaking about annual economic results of Moscow in 2015 Moscow Mayor Sergei Sobyanin admitted that the volume of construction works in Moscow is not declining. It sounds very optimistic to the construction business. As you launched a new production line of sandwich panels in February 2016, you also see sales growth perspectives. You call your new product as innovative, could you describe its unique selling points and its target audience? Ruukki's new sandwich panel LIFE has an exceptionally high recycled material content and its air leakage rate is extremely low. The panel minimizes raw material and energy consumption and reduces CO2 emissions up to 45% both during construction and throughout the building's life. Without false modesty I can reassure you that so far there is no alternative to this product on the Russian construction market. Ruukki and its partner ISOVER are pioneers in energy efficient building in Russia. We offered the product with up to 50 years of guaranteed exploitation period what extremely long period and makes new sandwich panels almost eternal. Our decision to launch a production line in Balabanovo, not far from Moscow, was well-argued and balanced; we were the first to realize some perspective market trends and to come up with the right offer at the right time. Our customers are the companies, not relying on short-term profits, but the ones who see the future of construction business in environment-friendly technologies and state-of-the-art materials. Using Ruukki’s LIFE sandwich panels will also earn more LEED and BREEAM credits for your building. There is a well-known proverb “Rome wasn’t built in a day” (and we say the same about Moscow), which means you cannot expect to do important things in a short period of time. Let’s talk about how long it took to set up Ruukki business in Russia, particularly in Moscow region? What April-June 2016 CAPITAL IDEAS

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changes did you face with? Could you list the most important events, solutions and results? Ruukki has a really long history of relationship with Russia. It started in 1962, when our company signed our first agreement with USSR. The Soviet engineers participated in building our manufacturing plant in Raahe (Finland), while the Finnish specialists consulted USSR in building the Karelskiy Okatysh mine, a large iron mine located in the northwest of Russia in the Republic of Karelia. Then Ruukki came back in early 2000-s, when the company decided to localise its production in Russia. Since then we have executed thousands of projects, more than 600 objects every year. No doubt, the most significant decision was to localize our manufacturing in the centre of Russia, so that we can offer the most competitive products for reasonable prices i.e. value for money to our clients. Ruukki has a Finnish origin, but since 2014 it has been merged by a Sweden SSAB corporate group. Do you have any changes in your marketing policy? What is a role of the Russian Ruukki division in SSAB? What targets do you have from the Sweden headquarters? Are you sponsored by the headquarters or have to earn money for company development by yourself? SSAB is the Ruukki’s long-standing partner. For many years we have used their metal-rolled products due to the outstanding high quality, so we continue doing this to manufacture steelworks, sandwich panels, system hall constructions and metal tile roofing. After merging our tasks changed: SSAB continue producing steel products, while Ruukki has focused on creating, developing and providing ready solutions and materials for construction. Could you tell Capital Ideas about your Moscow projects? What objects were built with your products? The most remarkable is of course participation in reconstruction of the Bolshoy Theatre in 2011. Ruukki created special metal stage structures – secondary trusses and 8 primary trusses, the weight of these structures was 412.5 tones, which was quite light for such type of constructions. Among other examples I would mention Crocus Expo and Mega Teply Stan shopping-malls which we 52

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supplied with Ruukki’s facade cassettes. However it is really hard to mention just a few projects as during years we executed a great number of other buildings in Moscow and Moscow Region including warehouses, sport and recreation centers. Experts, who work in Russia for a long period, admit that the main barrier is commitment to traditional technologies. Centuries ago people used to build mostly from wood, not stone (fortunately Moscow was surrounded by forests), today people get used to building with cement, not contemporary construction technologies. Is it more difficult to promote your steel products in Russia than in the North Europe? I wouldn’t say difficult but there are definitely some local particularities and traditions that we always take into account. For example, Russian construction business same as in many other countries though is more conservative when it comes to changes, introducing new technologies and various upgrades. However, today we notice a boost of interest to new materials and technologies in construction industry, it’s a global trend and Russia is not an exception. Maybe the process is not as swift as in Europe, but there is for sure a positive dynamic with bright perspectives. Another proof of this trend is increasing demand for the Ruukki’s system hall solutions such as Spider, Condor, Trasskon or our sandwich panels. Possibly the Ruukki’s own production lines near Moscow give you certain competitive advantage, especially in the terms of significant decline of imported goods. Are you going to continue localizing your manufacturing processes or you have other solutions how to strength your positions in Russia? As I mentioned above our decision to start local manufacturing in Russia was an important step for Ruukki. Localization allows us to keep and introduce our European highest quality standards and at the same time provide our local clients with a flexible offer of a diverse portfolio at a reasonable price. Our global policy as well as the corporate long term strategy is still based on expanding local presence in key markets including Russia. We are planning to strengthen our presence here by further development of relations with Russian metal producers as well as launching new products manufactured locally. ■

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 Dear Ladies and Gentlemen! We hope that you like Capital Ideas. Please give us your feedback and send us your comments. This will all help to make Moscow a better place to work and live. Sergo Kukhianidze, Editor in Chief Write to Sergo Kukhianidze at [email protected]

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Anke Pötzsch:

When one door closes, two new doors open

The German holding company INTERPONT, which provides consulting and outsourcing services and has been operating in Russia for over two decades, is a unique enterprise. It wasn’t “imported” from abroad, but rather founded from scratch right here in Moscow.

Anke Pötzsch founded INTERPONT in 1994, while she was a student from GDR studying in Moscow. She was an exchange student at the Moscow State Linguistic University, learning how to be a translator, as well as an economist and lawyer. Life circumstances pushed the German student to go into business. After the reunification of Germany in 1990, all previous agreements between Moscow and Berlin were no longer in effect. Things were changing quickly, and one of the things that changed was that Anke now had to pay for university with money she did not have. After thinking things over, the entrepreneurial German student set up a German-Russian venture with her Russian friend: a tailoring shop for curvaceous women. Anke was quite inventive and her fashionable outfits started selling immediately. She even had to hire additional help. Anke liked living in Russia and decided to stay in Moscow, figuring that her knowledge and experience in starting a business in Russia with respect to tax, accounting and legal nuances may be useful to Germans who want to start doing business in Russia. This is how INTERPONT was born. Not much time passed before the goal-oriented German student turned into a successful businesswoman people turn to for advice and support.

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Ms. Pötzsch, you founded INTERPONT 22 years ago and now help others do business in Russia. Were things easier back then, or are they easier now? How much have things changed for people looking to set up a business in Russia, both in terms of organizational challenges and political nuances? You know, business is always difficult – that’s just the nature of business. Anybody who tells you otherwise is lying. On the other hand, it is very interesting. In my opinion, comparing the challenges of different time periods won’t give you a complete picture. You develop and grow with the market and with the country, you set new goals and objectives, overcome new challenges and enjoy your shared success. Of course, a lot has changed since 1994 and many aspects of doing business change quickly: tax nuances, licensing and registration procedures, our everyday reality (such as the introduction of sanctions) and many other things. This is one of our professional competencies – to always stay on top of changes in order to help our clients. One online review of your company states the following: “a stable German consulting company that is active on the Russian market.” How stable and active are you? And what specific services do you offer? The number of years we have been in business (22) is already a good indicator of our stability. Our large client base is another factor that has remained stable  – it continues to grow, together with our company (Smiles). The fact that we have been in the same office on Tverskaya 16 and have expanded our company to take up three floors also speaks to the stability of our company. But all jokes aside, our constant expansion and development, the opening of new regional and international offices, new clients: all of these are indicators that point to how active we are on the market. We do everything gradually, step by step and, as the popular saying goes, measure seven times before cutting once. Like all Germans, we are extremely careful and think every decision over several times. Right now we are working on the Asian market with the help of our offices in China and Kazakhstan. Our colleagues from Germany, Brussels and Warsaw are helping us attract European clients, especially clients from the Benelux and Poland. Even our appearance is going to change soon: we are actively working on updating our corporate style in order to ensure it falls in line with the development of our company and is a better reflection of our mod-

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ern, methodical approach to all issues. We offer a very wide range of services, including: outsourcing business processes, legal support, auditing, accounting and tax consultations, certification, administration, personnel management and office solutions. How many clients do you currently have? Is INTERPONT’s client base limited to German companies, or do entrepreneurs from other countries use your services as well? Do you only work with small and medium-size businesses, or do your clients include big companies? INTERPONT’s client base includes over 400 companies. 55% of these companies are German, 20% come from other European countries, and the rest are from the US, India, China, Japan and even Russia. It’s easy to imagine a scenario in which we, an open organization with a multi-cultural employee base, would gladly work with companies that are not part of the German segment. Our door is open to everybody who needs our services. As I have already pointed out, INTERPONT started operating at the international level a long time ago. In addition to our branches in Russia, Kazakhstan and Ukraine, we have opened offices in Warsaw and Hong Kong. We have many different types of clients, but we deal with a lot of medium-size businesses (companies with turnover of about 50 million euros per year), as well as large international corporations and multinational companies. We also work with small successful companies. For us, every client has always been and will always be important, which is why we are happy to help any company that seeks our services. Do you have a lot of employees in Russia? Obviously, most of your employees here are Russian. How would assess their level of professionalism? I always say that it is impossible to do business in Russia without Russian employees. This is why almost all of our employees are locals. We currently have over one hundred Russian employees that I expect to be responsible and take initiative. They always have a right to voice their opinions and I am interested in hearing them – especially when it comes to young professionals who have grown up in a different world and have an entirely different approach to business. I value the professionalism of my colleagues, otherwise I would not have offered them a job at INTERPONT. It is very important that the level of service we provide to clients meets their demands. I respect, value and like my colleagues. Western businessmen frequently express concerns about working in Russia. They bring up bureaucracy, corruption and crime. What has your

experience and the experience of your clients been like?

a positive indicator and I see evidence of it every day while working with our clients.

I think that these concerns are somewhat exaggerated. There is bureaucracy everywhere, it’s just easier to navigate in some places than in others. There is also corruption and crime everywhere. Russia is a wonderful country with great opportunities, as well as a big market for goods and services.

Another aspect of the problem is that Western sanctions have pushed Moscow to more actively seek cooperation with other countries – China, for example. Are German companies at risk of losing their share of the market in Russia, along with their long-term Russian clients?

Foreigners are sometimes scared to enter the Russian market because they fear dishonest partners or financial scams. This happens, first and foremost, because foreign media distorts information and misleads people. This is why, aside from providing the services outlined above, we try to alleviate some of these fears. We tell our clients how great Russia is and show them what life here is really like. Of course, we also offer to run background checks on future partners or outsource accounting and legal support in order to put our clients at ease once and for all.

No! I don’t think that there will be a complete shift toward Asia. Moreover, the credibility of German companies in Russia has always been and will continue to be high. Even if there is a decline in market share, we will see a return to previous dynamics as soon as there is a positive change.

According to the Committee on Eastern European Economic relations, trade turnover between Russia and Germany fell by about 25% in 2015, shrinking from the 80 billion euro high posted in 2012 to 50 billion euros. Many experts say that the reasons behind the decrease include the plummeting ruble and oil prices, as well as economic sanctions. Have you or your clients felt the effects of these negative factors? If so, in what way?

I am no superb business analyst, but, according to GTAI research, there will be higher demand for packaging equipment and greenhouses, for example. Since Russia is gradually developing domestic production and values technology from Germany and Western Europe, there should be a lot of opportunities in this sphere.

You know, the biggest challenge is the exchange rate and the decrease in consumer activity. This has a direct impact on contracts, accounts, payments – on the financial livelihood of companies. Yes, these are also challenging times for us…

In your opinion, what spheres will be most attractive for small and medium-size businesses from Germany and other foreign countries in the near future?

Russia also intends to utilize German technology in projects that have already supposedly been contracted out to Asian countries. The reason is simple: Russia and Germany have many things in common, not just history… When one door closes, two new doors open. This same rule applies to business. ■

Our clients are constantly in contact with their partners, fixing exchange rates, granting extensions, expanding their range of services, providing discounts. We are always ready to discuss terms with our clients in order to make sure that everybody is happy. I think German companies were hit the hardest by the sanctions… One relevant trend in the development of the Russian economy is import substitution. Do you think this will scare off Western entrepreneurs? Import substitution does not preclude the participation of international companies and, so far as I can tell, Russia does not plan to completely do away with imported goods. The summer economic forum in St. Petersburg, for example, confirms this. Among other things, we’ve seen the results of a recent Ernst&Young study: in spite of the fact that 90% of polled foreign investors did not see the current economic situation as favorable, 39% of them planned to expand their presence in Russia. In my opinion, this is April-June 2016 CAPITAL IDEAS

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It's worth in Moscow

EXPERT TIPS

Swedish national Fredrik Svensson has been living and working in Moscow since 2007. He is a partner at Mannheimer Swartling, which is the largest law firm of the Nordic countries. Mannheimer Swartling was the first European law firm to open

up an office in 1990 in what was then the Soviet Union. In this interview, Fredrik Svensson talks about the continuing investment attraction of Russia and its capital for small and medium businesses.

Take Swedish investors, for example. Who would you say are among the most successful?

collection of articles entitled “How to invest in Russia”, published more than a year ago by the Association of European Business included one by you, headed “Go into Russia in a joint venture: To be or not to be?” How would you answer Hamlet’s question on this theme today? To invest in Russia is always a good idea. It is a country with a 140,000,000 consumers, it has sound state finances compared to some European countries, and it has a stable political system. In my opinion, it is always worth investing in Russia and its capital, but you need to do it in a responsible manner. 58

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Your market is very attractive for producers of consumer goods. Off the top of my head, I can certainly name the Swedish furniture company IKEA, and also the popular brand of fashion clothing H&M. They are working very well in Russia. One might also mention the successful investments of enterprises connected with the mining industry. Up to today, things have gone very well for them but they are of course affected currently by the low commodity prices. Or take the IT field – the Internet trading portal AVITO. This is a Russian company, but it was founded by Swedes. The lads came to Russia and started virtually from scratch. They created and expanded their company, which is now worth around two billion dollars. So you think that even in conditions of financial instability, a reduction in the purchasing power of the population and in its investment rating, the risk of investing is justified today?

investing

You know, investments always involve a certain risk. But you have to be both patient and bold. To leave the Russian market today will cost you a lot of money the day you want to return. In a couple of years (if not sooner), Russian will again be a “hop topic” and where companies want to establish business. I think Warren Buffet said once: “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” In connection with sanctions and a certain tension in international relations, has the climate in Russia changed for Western business? On the whole, the climate has not changed. I think the Russian government and the Moscow authorities are trying to create a better playing field for business, but it takes time. But of course things could be a lot better. One of the things that worries investors is that the laws and the rules of the games sometimes change too quickly. Sometimes also laws contradict

each other. Investors dislike unpredicability. This problem varies from industry to industry. For example, in the consumer goods field, the laws are quite stable. But as for the oil industry or media business, the rules can change in a way that cannot always be understood. For example, in the media business, legal limits have been placed on the holding of media shares by foreign investors. As a result, to take one example, the major Finnish media holding Sanoma was forced to sell its Russian shares. Of course sanctions have had an effect on business, although on the whole, we are not seeing any panic in Russia. Many of our businessmen have been here a very long time, they have strong links... Yes, some have been forced to leave Russia, e.g. exporters of food products. However, this is a good thing for your country in a way, you can set up your own production facilities on the spot. As for relations with foreigners working in Moscow, they have not changed at all. The Russians take a very healthy attitude. April-June 2016 CAPITAL IDEAS

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EXPERT TIPS

For example, no-one (and I have many Russian acquaintances) has said to me that he doesn’t like me because I am a foreigner.

rate financing but also on e.g., infra-structure projects where you often lease the large machines and ancillary equipment.

Have sanctions had any effect on your firm?

As far as I know, in your legal practice you also specialized in questions of anti-corruption laws. How do you think matters stand with regard to corruption in Russia?

They have not touched on our work directly. We do not work with companies subject to sanctions. But as lawyers, we give a lot of advice to our clients as to what they can and cannot do in Russia under sanctions. A policy of import replacement, of developing our own production facilities, has been proclaimed in our country. In this connection, in your opinion, how interesting for the foreign investor could the idea of localization of production in Russia be? I personally have always been in favour of completely free trade. But at the same time, Russia is far from being the only country urging import replacement; Brazil, Argentine, China and to some extent the USA also support their own local producers. As for localization of foreign production in Russia, the situation has to be assessed for each specific case. I think that for certain industry sectors, it could be an option for a foreign company to consider local production, in particular for those companies who participate in state tenders. Can you give an example of a Scandinavian investor who has invested in Russia and in Moscow recently? I know that many companies which are already present here are working on new projects. As for the newcomers, particularly from small and medium business... We must admit that the environment is not very favourable for this today. The atmosphere in Europe around Russia, mainly in the media, leaves much to be desired, and in my opinion is too negative in many respects. I have no desire at all to give advice to your government, but I think Russia should pay more attention to its image in the eyes of the European investor. What is your opinion, as a lawyer working with business: how difficult is it for a Western entrepreneur to open a business in Moscow, particularly for small and medium businesses? To start a business in a developing market is always a challenge. But as I usually say, specifically to small and medium businessmen, it is no more difficult in Russia than, say, in China, Indonesia or Brazil. However, in Europe it is often considered, again under the influence of the media, that everything is far more difficult here. This is not the case. The important thing is to study the rules thoroughly and follow them. And not to listen to the advice of those who come up to you and say: with my help you could well “cut a few corners” and do everything more quickly. This is a very dangerous path. What are the difficulties facing a new investor in our market today? Probably local financing. Obtaining credit in Russia is expensive and quite difficult. This does not only have an effect on corpo60

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Corruption is a general problem. It is present also in Asia, Europe and America. But a serious fight against it is being waged in the Western countries today. Strict anti-corruption legislation has been adopted and is being applied. Even the biggest companies, if they become involved in bribes, whether at home or abroad, can be fined, and fined billions of dollars. While we’re talking about Russia... I don’t think the level of corruption in Russia is higher than in the other BRICS countries. In China it’s at the same level or even worse. I repeat: there are temptations to do everything more quickly, but not altogether legally. The alternative is to keep strictly to the rules, although this takes more time. We try to convince our clients that the second way will be a lot cheaper in the long run. But if someone in a client company has done something wrong, then we are there to assess the risks, what needs to be done and who may bear any legal responsibility. They like to frighten foreigners with Russian bureaucracy... Well , if anyone has to deal with bureaucracy, we lawyers do. Of course it sometimes creates unnecessary obstacles. Yes, in Sweden it takes one day to set up a new company, here it takes a month. But bureaucracy is something you just have to work with. In 1990, Mannheimer Swartling became the first European law firm to open a branch in Moscow, which of course gave it the advantage of being in at the start. But what are its competitive advantages today? Probably mainly the experience of working in Russia that it has accumulated over the past years. When the firm came to Moscow, it was still in the time of the USSR. When we wrote a business plan, no-one had the faintest idea that the Union would collapse... In Russia, you need time to learn, to understand the country and its cultures, to get to know what business is like here... When I came in 2007, I thought I would only spend a few years in Moscow. Yet I am still here. How did you turn up in Moscow? Before that, you had worked in your firm’s branches in Sweden... But I had always wanted to work abroad, In 2007, Mannheimer Swartling made considerable extra investments to expand its Moscow business. And they offered the post here to me. I jumped on the first train... You don’t regret it? No, I don’t. It’s even funny, sometimes, when people at home ask: “How can you survive in that place, Moscow? It’s dangerous there!”

But I’m not just “surviving”, I’m living a normal life. And I’m not alone. My future wife is living with me and she is from Vienna, Austria. She has already met friends and enjoys it here in Moscow. Virtually every one of the foreigners I know working and living in Moscow speaks very positively about the Russian capital. And you don’t feel any danger? Absolutely not. I can’t recall that any of my foreign colleagues have ever complained on this issue. What impression did Moscow produce on you in your first days here? I have to say, over the years of my stay here, Moscow has changed very considerably. It used to seem more grey somehow. Your mayor Sobyanin did good work.

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But surely you can’t like everything here? What is the main thing that displeases you? The very overloaded traffic. And of course the fact that drivers race round the city too fast. That’s wrong. I think the traffic police should be stricter on reckless drivers. You said that at first you planned to remain in Moscow for only a few years, but you’ve been working here for eight years now. Is the end of the Russian period of your life in sight yet? I keep on working. I have not set myself any limit. I may not carry on living here all the way to a pension, but actually I’m not sure I’ll stay in Sweden either... ■ For Capital Ideas courtesy of BIGMOSCOW

Five pieces

of advice from Fredrik Svensson to foreigners wishing to open their own business in Moscow

Study the situation in your selected field of business Do your homework. Think through carefully just how you are going to integrate your company into the business already existing in Russia.

Pick your team This is perhaps the most difficult. Don’t think you can hire personnel on the cheap in Russia. But you can find good and loyal workers here, to whom it is worth paying a decent salary.

Study Russian laws and try to conform to them But don’t try to get round them. Sometimes you may be offered a way to “cut corners” – but don’t give way to temptation.

If you come here, plan for the long term There is no sense in only coming to Russia for a year. The situation changes, there are rises and falls. Don’t fall at the first fence.

Make more contacts and links This will help in your business. I’m not talking about common corruption. I would prefer to call it the legal “corruption of friendship”. Friendly contacts may get you out of a difficult situation. April-June 2016 CAPITAL IDEAS

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OUR INTERVIEW

Nikolay Kovalyov:

The law should work like an electrical outlet... “Corruption is one of the biggest dangers for Russia,” Nikolay Kovalyov said in an interview with Alexander Mikhailov, a famous journalist who specializes in law and order. Nikolay Kovalyov is a member of the State Duma, General of the Army and former Director of the Federal Security Service (FSB).

Mr. Kovalyov, there is so much talk about corruption and bribes that one gets the impression that this is a widespread problem. But I have a question: have you encountered a lot of corrupt officials? Ofcourse. There was a time when I worked in the Moscow anticorruption department and I also supervised the organized crime investigation division during my time with the FSB. I remember one case very clearly. Back in the nineties, we arrested the prefect for the city of Moscow. We caught him red-handed with a bribe of 1 million rubles, which at the time was an extremely large sum of money. I remember the look on his face. He was sitting in a chair in his underwear and a wifebeater. This sorry-looking guy was sitting there in front of a box that was packed with stacks of cash. I didn’t feel any pity or sympathy for him, just loathing and disgust. I remember this image every time I come across corrupt officials today. These people are only imposing and arrogant before they get caught. Gucci, Hugo Boss, Rolex...but they’re all essentially like that guy. Aside from being disgusted, though, you start feeling something else: rage. Remember what Gleb Zhiglov said in the film The Meeting Place Cannot be Changed: “You weren’t thinking about your job and your comrades. You were thinking about a piglet and a house in the village.” People aren’t simply trying to curb this phenomenon – they are desperate, because they understand that an internal enemy is just as big of a threat to the government as an external one. These people undermine our economy, as well as our ethics. Corrupt officials corrode society from within. It is difficult to deal with an external enemy, but it’s possible. When the borders are clear, it is easy to tell your people apart from the enemy. When we need to, we can come together and stand up against 62

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aggression from the outside, to overcome things like sanctions. But what we have here is more like radiation – corruption without color or smell. It infiltrates our society, stimulating metastases throughout the country. It has penetrated not only the authorities but also law enforcement and the court system. All of this is evidence of the fact that among the threats and challenges of our century, corruption is one of biggest dangers facing Russia. I recently read a Facebook post that said “If you chop off an official’s head, they will still be stealing for the next 20 seconds”… Believe me when I say that I don’t want to justify crooks, but this common view of government officials is often cruel and unjustified. If they were all like that, I don’t know where Russia would be today. Corruption is not inherent to the system – it’s an anomaly. Yes, it’s a widespread anomaly, but nonetheless an anomaly that we must work to eradicate. I understand that an official operating in today’s tense climate is very vulnerable. But I don’t want government officials to come across as latent criminals. After all, there are many of them who don’t make a lot of money at all, but still refuse to take bribes. And there are millions of them. Still, it’s a difficult situation. And I’m not saying that it’s simple. But those who want to find a way look for solutions, while those who don’t look for excuses. In all fairness, I want to point out that our law enforcement knows how to handle these cases. Moreover, I want to note that there are a lot fewer people protecting those who

April-June 2016 CAPITAL IDEAS

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OUR INTERVIEW

are detained for corruption. Although telephone justice still has its place. How can we not have it, when arrested officials at the regional and municipal level used to be chairmen of anticorruption commissions. Bees turning against honey?

with a position – they didn’t step over anybody to get there! Today, we often have situations like the one in Ganndy Polki’s film Republic of ShKID: “Pick me chums, I will not hurt you!” And they don’t hurt you, but at the expense of the state.

As a member of the State Duma and chairman of the anti-corruprion comission I am always receiving all kinds of information on corrupt practices. And I want to point out that people are very receptive to my requests.

So, here is what I think needs to be done.

To be honest, I’m concerned about something else – the fact that the corrosion of greed has infiltrated the legal system. This is a serious matter. It is an extremely dangerous process. It is no coincidence that our President has directly addressed the practice of designed cases that destroy business, the foundation of our country. Today, it is important to create conditions to ensure that the law works like an electrical outlet: no matter who sticks their fingers in – the prosecutor, investigator, clerk or deputy – there will be an electric shock. But in order for this to happen, we have to create a climate of total social control. Real control. So what’s missing? Laws, maybe? There are actually enough laws, and the regulatory framework is also quite decent. We just need to be tougher and more decisive. I remember Arvid Yanovich Pelshe and his Party Control Committee. The PCC was a very powerful instrument. He could dismiss just about anybody, even for a minor indiscretion: for leading a luxurious lifestyle, arrogance, or using an official standing for personal gain. If an official were to use a government vehicle for personal transportation – taking his wife to the hairdresser, for example – that was it. And a lot of times it was more than just a verbal lashing: people would lose their jobs forever. Because deterioration starts with these minor transgressions. Now there is a new breed of corrupt officials. As soon as they secure a position of power, they immediately start stealing. We don’t have to think hard to find an example. We had just sentenced Yevgenia Vasileva, and her successor immediately repeated her mistakes and was sentenced as well. He probably thought he would have enough time while things were being sorted out with her. I’m not even going to get into officials at the municipal level. We are probably the global leader in terms of how many mayors ad deputy mayors we have put behind bars. There is a positive side to this, though: we know how to catch them! So why does this happen? There are several reasons. The chaos of the 90s is one. Back then, people could get away with doing whatever they wanted. As a result of this, our moral core was completely deformed. … and human error? …that too. You know, the KGB never used to appoint officials who threw their comrades under the bus. They would appoint people who could manage, but were stubborn. These people make good bosses. That’s because these people were entrusted 64

CAPITAL IDEAS April-June 2016

First, we have to constantly strengthen and improve our system of law enforcement. That’s one thing. The other thing we must do is establish strict control and prosecutorial oversight of these government bodies. Second, we have to do thorough background checks on anybody who is appointed to a government position and track their bank accounts. And this has to apply to their relatives as well. After all, a government position is not a private business. If you have a house, explain where it came from, as well as where you got your cars, your villa and how you can afford to send your kids to study abroad. Give us all of your income statements over the past 10 years and the value of your property. Same for your children. The Federal Financial Monitoring Service must establish total control over all family members of our civil servants. Third, and this may be an unpopular opinion, but I would classify taking bribes in the sphere of defense and public administration (from the governor level and up) as treason instead of “crime with gainful intent.” Same thing goes for crimes committed by investigators, prosecutors and judges. It would be controversial, but definitely effective. Fourth, we need some kind of control committee (similar to the PCC). The Presidential Administration technically has something like this, but we need a more powerful governmental body. Fifth, we need to restore the practice of confiscating funds and property. Sixth, I am certain we need to revisit the issue of legalization of so-called “provocations of bribery” when it comes to officials, as it is done in the West. Do you really think all of this is possible? Do you believe your own words? I wouldn’t be saying any of this if I didn’t believe it could happen. We just have to want for it to happen. Very often, it is this desire and professionalism that are missing. We often hear about the need for some kind of political will. But the will, including our political will, is in the law. What other kind of will do we need? Orders for mass arrests? Corruption in Russia is no phantom. Every manifestation of it has a name and surname and, unfortunately, a government job. And all of the Law’s wrath should be directed toward intercepting these cases. It is not acceptable when a thief and a bastard who has defiled the government sits in a comfortable office chair instead of in a prison cell simply because some loafer in a uniform can’t or doesn’t know how to deal with him. ■

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 Address: 109012 Moscow, St. Ilyinka, 6/1, bldg. 1 Ph: +7 (495) 620 02 14, 620 02 22 Fax: +7 (495) 620 01 70 E-mail: [email protected] http://www.tpprf.ru

Moscow Chamber of commerce and industry Address: 107031, Moscow, St. Petrovka, 15, bldg. 1. Ph: +7 (499) 940 33 16, +7 (499) 940 33 25 E-mail: [email protected] http://www.mostpp.ru

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

April-June 2016 CAPITAL IDEAS

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FACE TO FACE

Vladislav Tretiak:

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CAPITAL IDEAS January-March 2016

The cold war has been

period in hockey over for a long time On May 6th, Moscow and St. Petersburg will be hosting the 80th Ice Hockey World Championship. Before the event, Vladislav TRETIAK, the President of the Ice Hockey Federation of Russia, agreed to give an exclusive interview to Sergo Kukhianidze, Editor-in-Chief at Capital Ideas.

Mr. Tretiak, how are you feeling a few days before the start of the championship? I’m nervous, although everything is already one hundred percent ready. There are no organizational issues left to resolve. But the fact that I’m nervous is only natural. After all, when you are hosting the world championships, you have a responsibility to the fans, who become more active during these big tournaments. For example, I have no doubt that the majority of our country will be closely watching the Russian national team. People are going to be expecting one thing – victory. So losing is not an option for Russia? Well, of course we can’t say that. (Smiles). It’s not a bad phrase, but it’s left over from Soviet times. We have to understand that there is a lot of competition in hockey these days. There are five or six teams who could potentially end up with the gold medal. How many fans from abroad are we expecting? It’s difficult to answer this question right now. We are still processing documents. I think that there will be a lot of hockey fans from Finland and Sweden, especially in St. Petersburg. Americans and Canadians are not big fans of coming over to this side of the world, so we are not expecting big tourist volumes from there. Of course, we will have a lot of Czechs and Norwegians. January-March April-June 2016 CAPITAL IDEAS

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FACE TO FACE

Do you think that tensions between Russia and the West will have an effect on the championship? No, we have great relationships with all of the hockey federations – in the US, in Canada, Sweden, Finland… There are no politics here, no disagreements. We congratulate each other on victories and our families are friends. I’ll admit that during the Soviet era, after the tragic events in Prague in 1968, our relationship with representatives from Czechoslovakia suffered. It got so bad that we wouldn’t even stay at the same hotel. But generally, the only representatives we were actually on good terms with during the Cold War era were the Finns. We had issues with everybody else. But now we have great relationships with everybody. We hold a lot of tournaments together and always try to help each other. In short, all of us need each other. By the way, back during the Cold War era, US President Ronald Reagan once said: “Sport is the human activity closest to war that isn't lethal.” Do you agree with him? Yes, that’s how it was. You know, Bobby Clarke, who was on the Canadian team during the legendary series of matches in 1972, once confessed that his coach instructed him to injure Valery Kharlamov in order to eliminate him from the game. Things like that don’t happen now. Of course, hockey is a tough game, this isn’t chess, but we don’t hate each other. So I wouldn’t call what happens on the ice between us and Americans or Canadians a war. We have Pavel Datsyuk playing for Detroit, Sasha Ovechkin playing for Washington and Zhenya Malkin playing for Pittsburgh. That’s not what war looks like! You have been participating in world championships since 1970. The first Moscow Championship you took part was held in 1973. Do you remember it? Of course  – we won every match at this championship! It was a true celebration of hockey and we always had a full stadium. Even back then we knew how to host such large-scale competitions. How much has hockey changed since then? A lot, including the rules of the game. The game is played at a faster pace now and hockey players have just a few fractions of a second to make decisions. Everything on the ice changes very quickly. Even the hockey sticks have changed – they have become more flexible and lighter. Hockey has become so fast and so tough that kids start playing at age 5 now, instead of around age 11 like before. Can the current Kontinental Hockey League (KHL) be compared with the USSR... 68

CAPITAL IDEAS April-June 2016

Of course not. The USSR championship had a total of eight teams, while the KHL has twenty eight, including teams from Finland, Latvia, Slovakia, Croatia and Kazakhstan. I meant in terms of quality, not quantity. Can we compare the KHL to the USSR championship in terms of how heated things get during the games? In terms of this, the only thing that can compare to the USSR championships are the KHL playoffs. The playoffs usually have the strongest teams playing. It’s no surprise that the stadiums are completely full during these games. Back then, the stadiums were full at every game. You see, back then all of our best hockey players played for the home teams. Unfortunately, now our best players leave for the NHL. By the way, this year marks the anniversary of national hockey – we are turning 70. In your opinion, is Russia still a global hockey superpower? Absolutely. If this weren’t the case, we would not have been entrusted to host the 80th world championship. April-June 2016 CAPITAL IDEAS

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People respect us. We are always 1st or second in the ratings. Let’s also not forget that, in spite of all of the KHL’s shortcomings, it is the second most important league in the world. The most important one is the NHL, I take it? Of course. There is no need to hide the fact that it’s a stronger league. After all, the best hockey players in the world are all there  – the best Finns, Swedes, Czechs... Of course, there is a lot of money there. As Vladimir Vysotsky wrote in his poem about Canadian professionals, “They get paid mad money, thousands, even for losing and for ties!” By the way, KHL star players also make a lot of money. I’ll say more: in terms of money, many of our leading teams are no worse than foreign ones. Don’t forget that our players get taxed thirteen percent, while theirs pay fifty. Why do we not have exciting New Year games between the best KHL and NHL teams, similar to the ones we used to have during the Soviet era? 70

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We’re ready to have these matches. We are not afraid to have them, because we are sure that these kinds of games will propel the development of hockey forward. But the NHL isn’t receptive right now. It’s a well-known fact that our wealthy people buy foreign sports clubs. In your opinion, when will foreigners start investing in Russian hockey? When it becomes profitable. When the stadiums in Russia fill up with 20,000 fans, when Russians start making decent money. Do you know that the price of a single ticket to an NHL game can cost up to $500? You see, our clubs are not profitable, while over there hockey is a business. Over here, it is a socio-political project. But, of course, we owe those who are already investing in Russian hockey a big thank you. They are doing a great thing. They are not only making hockey as popular as it used to be, but are investing in our nation’s health by building new hockey rinks. I have another question about foreigners. Is it possible that a foreigner will be in charge of the

Russian national team? There are examples of this happening in football and basketball... I personally am against this kind of development. The thing is that I am deeply convinced that only a Russian person – a person with a Russian soul – will be able to effectively communicate with our players. You’re going to say that the current coach of the hockey team, Oleg Znarok, is a German citizen. But he is Russian through and through! No matter what people say, we are very different from Westerners. We are not like them and require a completely different approach. A coach has to understand this and be a real psychologist. Mr. Tretiak, you are a unique person who is loved by many all over the world. Both Russians and Americans like you. I am curious  – is there anything you regret? No. Although maybe there is a little bit of regret over never playing for the NHL. What do you need the NHL for? And trust me, nobody doubts that you played for the NHL!... I know (Laughs loudly). ■ April-June 2016 CAPITAL IDEAS

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FACE MOSCOW TO FACE 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. МЕДВЕДЬ НА УХО НАСТУПИЛ – medved’ na ukho nastupil. (A bear stepped on someone’s ear) Explanation: Someone has no ear for music ЗАБЛУДИТЬСЯ В ТРЕХ СОСНАХ – zabludittsa v trokh sosnakh (To lose one’s way among three pine trees) Explanation: To fail to find a solution to a simple problem

Pictures by Anastasia Saifulina

ВОДОЙ НЕ РАЗОЛЬЕШЬ – vodoy ne razol’yosh. (You couldn’t split them apart with water) Explanation: To be always together, to be very close to each other ВИДНО ПТИЦУ ПО ПОЛЕТУ – vidno ptitsu po pol’otu. (A bird is seen by its flight) Explanation: You can judge a person by his actions БЫТЬ НЕ ИЗ РОБКОГО ДЕСЯТКА – byt’ ne iz robkovo des’atka. (To be not of the timid dozen) Explanation: Not easily frightened ВЫРАСТАТЬ В чьих-либо ГЛАЗАХ – virastat’ v glazakh. (To grow in someone’s eyes) Explanation: To improve in someone’s opinion

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ВЫТЯГИВАТЬСЯ В СТРУНКУ – vyt'agivattsa v strunku. (To stretch oneself into a string) Explanation: To stand at attention ГЛАЗА РАЗГОРЕЛИСЬ – glaza razgorelis’. (One’s eyes have lit up) Explanation: One desires something earnestly ДАВАТЬ кому-либо СДАЧИ – davat’ zdachi. (To give someone the change) Explanation: To return insult for insult ВЕШАТЬ НОС – veshat’ nos. (To hang one’s nose) Explanation: To be discouraged КОТ НАПЛАКАЛ – kot naplakal. (Something the cat cried out) Explanation: Very little, nothing to speak of ЛОВИТЬ НА ЛЕТУ – lovit’ na letu. (To catch something in flight) Explanation: To grasp something easily, at once

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What could you do better or more for the company if given the opportunity? This was a question where I was expecting everyone to ask for a promotion.

OVERLOADED “Too many now”…”I have enough on my plate now”…”I have a lot to learn still”… Fair enough. I do believe that staying focused on present responsibilities, what you are currently doing, and being successful at it, can be a positive thing under certain circumstances. Employees want: • Nothing at all sometimes. NEW SERVICES “Help with out-staffing – new services creation”…”Out-placement is difficult to get going in this crisis, out-staffing is a new option too and I hope this works”… I appreciate people that want to develop the company and have creative ideas, as this is how my mind thinks as well. Out74

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placement (formal job assistance for departing staff that companies sometimes have) was something we did start and sold as a service to companies and individuals, and it was a “feelgood” service during hard times for a lot of people. Out-staffing (the hosting/transfer of a portion of a company’s payroll to another legal entity) was something we went on to create and by one of the managers quoted above. We are developing this as client demand dictates (semi-actively as it is not our core business) and have several clients already. Employees want: • To help create, launch and manage new services.

MOTIVATING STAFF “I worked in consulting before and I have the skills to motivate people to work long hard hours (while having fun), now Consultants skip updates frequently and do not put priority on my vacancies sometimes, also I love the way Maks works, lots of communication – he is a really smart guy”…

I am all for working long, hard hours as this is something I often do myself. Furthermore, I just really enjoy working. However, many people just do not share this drive to the same degree, and I understand that, so I let the first part of the comment ride. Consultants skipping updates on a frequent basis is not acceptable as this is part of the job that places us a few levels above our competition. The Consultant that is not putting occasional priority on vacancies is something that also needs to be looking into, and a note was made to watch Maks, as it is possible he could develop into a top performer for us. Employees want: • To utilize what they feel are their own natural talents and skills; and • To be given the authority to help others perform better.

SELL – IF SOMEONE WERE DOING THE ACTUAL SELLING FOR ME “Doing what I can do but could do more cold calling and could do more and better if someone was doing the cold calling for me and the BD [Business Development] team”… The job is the job. If we had to hire a new sales team to get clients for the current sales team – then we would have to either reduce salaries or put profitability at risk, or both. The top BD performers make good money and there are no caps on earnings. We eventually parted ways with this person as he simply was not “sales material”. Employees want: • As much assistance as they can get, in order to do their job as best they can; and • An easier ride, on occasion, at the same salary level.

COLD CALLING “More cold calling” This was music to my ears. I think my heart may have even skipped a beat. Employees want: • To try harder, and to work harder.

Employees want: • To try and help the company in different way, at times.

TRAINING “I am very strong in conducting sales, I am ready to train all in sales and to share my skills”…”Trainings, anything to help develop the company”…”I can help with training new staff as I was a professional trainer”…”I teach at University in management and HR, and I can teach Staffwell on this”… This was also great to hear. This is a very easy suggestion to accommodate and it would be highly useful in the development of the team. I made notes on everyone interested in conducting training sessions for the team. Employees want: • To train others at what they are good at, and have expertise in; and • To share their knowledge for the benefit of the company.

HELP MANAGEMENT TO MANAGE “Help the management to identify what the Directors and Consultants need, want to be the leader in my sectors but do not want to manage, I do not dream about the Commercial Director role, I want to be client-facing, I do like managing my sector team though and want to keep this in place”… It is very satisfying to hear that some people love the exact role they are in. I also made a note that this person would like to assist management in their role and, as this would motivate him and he is a solid senior performer, we can create opportunities for him to do this. Employees want: • To be close to management; • To help management; and • Not always to have career aspirations in management.

MANAGEMENT

“I can create industry research; I like it, it is interesting and I come from a higher education background”…”Research, statistics, analysis, critical thinking, IT, can prepare full blown studies”…”Harder to sell right now but would be willing to make market analysis for PR”…

“I love to manage and build teams, but not to sell, but I can develop sales, I would like to develop the Consultants team to do more and go after top level clients and candidates, to make the team more assertive, to cold call to top level people”…”I believe I have a lot to offer in a sales-oriented leadership role and I believe my career to date supports this, we have discussed this in the past”…”I am an experienced Consultant and would love team leader responsibilities, to train new people and to mentor them”…

I was pleased to hear this and think it could be very useful for the company. I made notes on everyone interested in doing this.

Two of the people quoted above were our two top performing business development Directors. They were asking for more

CREATE RESEARCH REPORTS

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and I felt they deserved it. Promoting these two people is something that I took into very serious consideration. In the case of our Commercial Director, she had already stated she was overloaded and it was clear to me that she was.

MENTOR

Employees want: • To occasionally move into managerial roles (TL: when they are ready, desire it, and deserve it).

This was great to hear and I noted this person’s interest.

KEY ACCOUNT MANAGEMENT (KAM) “I have already taken on an additional sector, but would also like KAM, more client work, but not the sales part of it”…”KAM for some companies –to provide more services to the clients and to be a Director to some clients”…”KAM, BD should focus on sales only and I should focus on dealing with clients and solving clients issues and negotiating with clients and I will even create a proposal and present it to you on it – this will help bring more revenue from the clients we have”… This issue had been brought up before. Some Consultants want to be assigned a Director role as well, without having to do sales and cold calling. This does not exactly work for me. There is a reason we deliberately separated the two roles: in order to create a system of checks and balances for the client that, in the process, provides, I believe, a superior client service. Once a week, the Directors monitor progress made by the Consultants, and then provide an update to the client. At the same time, the Directors check if there are any issues that the client may have about internal matters or with our work.

“Mentor”…”I can also be a coach or mentor for new staff”…

Employees want: • To mentor staff in areas in which they have expertise.

HELPING THE TEAM “Helping other departments when people are on holiday”… I thought this was a good response as well, and I noted this person’s interest in doing this. This was a topic that I decided I needed to look into further, in terms of policies and other areas covered in our Operations Manual. This is because it is crucial to our business that clients receive a seamless approach when we render services to them, and that full coverage is always in place when our team members are absent, for example, on holiday or are ill. Of course we do this now and have in the past, but it brought to my mind whether any of this had actually been formalized. Employees want: • To help the company, and other team members, by covering for them when they are on holiday or are ill.

Having just explained my views on a combined role, I did listen to the comments and took into consideration what was desired: primarily, that the Consultant’s team would like to introduce an official Key Account Manager role and title. This would create the most senior role within the team of Recruitment Consultants. While having some reservations, I decided that I needed to take this issue seriously, and to work with our management team to come up with a potential solution whereby we could continue to provide our customers with same, if not better, quality of service.

LANGUAGE SKILLS

Employees want: • To work more with clients; • To help clients more; and • To give clients better service.

Employees want: • To help the company by using their foreign language skills.

BETTER CLIENT SERVICE “I always try to do the best, and try to provide the best service to clients and candidates”… My reaction: wonderful. Employees want: • To give clients better service. 76

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“Speaking French to clients and candidates, but not comfortable as a full-time focus as it is a little rusty”… The Consultant replying here is willing to help, which is good. However, in this particular case, I thought we had to take a pass, as I felt her confidence level and abilities were insufficient.

COMBINATION ROLE “Business development – doing more of it; Stas was a good example of a good recruiter and negotiator and attracted some of his own clients, he got to know all the candidates in his sector and I want to do this too; to become an expert Consultant and BD in my sector or other sectors, plus KAM and I want to be seen as a star and perfect mentor to be looked up to, to be a universal person and a future goal is to get an MBA at a Western business school”…”I want more responsibility to take on BD too, a combined role”…”I was given the opportunity to

work in an additional sector and I acted as the client’s Consultant and Director”…”I work well with clients and would also be interested in BD for my sector”…”I now try to do research to help the Consultants, I just started and I like it”…”I now have a lot of work and a lot of planned work, but think I can develop clients by going to PR/marketing/advertising conferences as I am a good negotiator, and to be involved with the website and new things”…

our energy on locating and placing openings for lawyers at corporations within industry sectors.

I was very happy to hear that many within our recruitment team also wanted to try their hand at sales – in order to help the company and to develop themselves. I have always provided this opportunity to everyone and was pleased that some felt they were ready.

Our incumbent legal sector business, along with a focus on the two new angles within our legal recruitment sector, enabled us to more than double our results in this sector.

Nonetheless, the reality is that some of the people above who mentioned this to me never summoned the nerve to actually dive in and do it, as they were encouraged to do. Instead, they just kept to their standard work that they had always been doing and chose to remain in their comfort zone. Having said that, I do believe that there is nothing wrong with employees staying within the confines of their assigned work (i.e., to the status quo). This is because the way in which our Directors and Consultants presently work is equally important to the success of our business. I am pleased to note that one of our Consultants, who did indeed follow-through on her ambitions to take on a combined role, has really done a fantastic job in helping to develop and maintain a very strong industry practice group for us. We encouraged and supported her efforts along the way and we have all benefited from the success that has come from it.

Within law firms, we focused on placing Partners capable of creating a valid business plan and bringing a book of business and team members with them. This also proved successful for us.

Employees want: • More clients on a retained and exclusive basis; and • To try a variety of strategies to enhance their success, as well as that of the company.

NOTHING “I am quite satisfied with my role right now”… This person left us within a month. Employees want: • Nothing sometimes, which could also be a red flag.

SPECIALIZE

Employees want: • To take on more.

“I really like executive search projects, preparing reports, etc. and I had two major ones that I closed successfully”… “I am an accountant in my soul so I would like to stay in that and keep improving and moving higher”

BETTER RESULTS

There was nothing to act upon here. It was just nice to know that some people really liked what they were doing.

“I could do more if the Directors brought more retained, exclusive searches”…”My sector is very slow right now so I will go after in-house positions and focus on another sector and get the Directors to call into their clients for in-house positions I can close, and get our PR person to search for new vacancies and get the Consultant I work with to help me input candidates I have interviewed”…”Maybe close different vacancies in more lucrative areas”…”Contact ex-candidates and find out where they are right now and try to get them as clients as it might be easier for me to do this than BD”…”I can find leads from candidates I interview”…

Employees want: • To focus in areas they enjoy and are good at.

This was great to hear: employees with concrete ideas and plans on how to get more business in difficult market times. Many of these strategies were successfully employed. One of our success stories within this topic has been our legal sector team. Most of our recruitment work prior to the 2008 crisis was on behalf of law firms operating in the market. As many of our legal firm clients decreased, or even curtailed, hiring in 2009-2010, we instead re-directed, with great success,

NEW ROLE “I like my job but would also like to try being a Consultant or Director, but know my English is not great”…”Our former HR [Human Resources person] offered me, as an idea, a Consultant’s role as a career growth area, so maybe I could do research for a sector team and eventually become a Consultant”… Indeed, both of the people commented above are good in the roles they have and would, potentially, be good as Consultants as well. I noted their desires and committed to speak to our management team about them for future consideration. Employees want: • To change roles on occasion (TL: and if they are a good employee it can potentially be beneficial for everyone). ■ April-June 2016 CAPITAL IDEAS

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Savoir vivre

People may think that the Russian soul is mysterious, but there is very little mystery to it!

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Pictures by Anastasia Saifulina

t happened several years ago. An exhibition that focused on the famous “savoir vivre” – the French ability to live elegantly across all aspects of life – came to Russia from France. To celebrate the occasion, the French ambassador to Russia set up an elaborate reception at his residence – a luxurious old mansion on Bolshata Yakimanka. During his address, the ambassador said that he is genuinely happy to introduce the Russian people to the French way of living, which is defined by great taste and elegance. After a short speech, the ambassador invited his guests to share their honest impressions of what they saw at the exhibition. The first person who spoke up had the crowd roaring with laughter. He said that he liked everything exhibition: how stylish the French were, their refined taste in delicious food and drinks. “But all of this is not for Russians,” he said, “Simply put, foie gras and oysters are great, but our people are used to herring and potatoes!” In spite of the laughter, everybody agreed that all peoples have their own tastes and habits that shape the lifestyles of different nations. For example, how can one even begin to compare Bavarian beer and sausages with Japanese sushi and sake? These differences come down to mentality rather than culinary skills. After all, food is part of our culture. Nikolai Berdyaev, a famous Russian philosopher, highlighted the difference between French and Russian people back in the 19th century. “Compared to us Russians, the French know how to enjoy life, to extract the most pleasure out of it, to enjoy both intellectual and material dishes,” he wrote in his book Self-Knowledge.

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Nikolai Berdyaev pointed out one of the key aspects of the Russian mentality. Yes, unlike Westerners, our people smile less and are less optimistic. We often appear to be melancholy or even sad. Perhaps this is why so many people make references to the mysterious nature of the Russian soul? The truth is that there is nothing mysterious about it. It is simply different, because Russia has a different history, different geography, different climate and, as a result, a different life, different traditions and different habits that have been formed over the course of several centuries. But this is true of any country. Is the Japanese soul not mysterious? How about the American or Canadian soul? Is the soul of an Argentinian, Chinese or Australian person so transparent and easy to understand? The alien soul is dark, a famous Russian proverb correctly points out. It is hard to understand. But, if we want to relate to each other, there is no other way. Russia will never become the US, India will never be Japan, Portugal will not be Spain and Afghanistan will not be Iran. Thank god that this is so! Every country has its own philosophy, its own customs and traditions, its own history and form of government. This is why one country’s way of life will never work in another country. Take, for example, Italy and France – they are neighbors. It may seem like they have a lot in common, but, for example, the French will never be able to convince Italians that foie gras is enjoyable. Italians will also never pick French wine and cheese over their own – they will never trade in their lifestyle for a different one. In other words, they will always opt for dolche vita over savoir vivre!

a la Russe This is why we shouldn’t be surprised by the fact that Russians are different. Even our understanding of what happiness is seems to be different – it most certainly has nothing to do with wealth or material things. The Russian understanding of happiness has undoubtedly been influenced by Orthodox Christianity, especially when it comes to the belief that happiness can only be achieved through suffering. Fyodor Dostoyevsky thought that suffering shapes a person’s character. Russians think that suffering is necessary to make a person more compassionate and attentive to the plights of others. Even the Russian word for happiness, “schastie,” means “good fortune” when translated from Old Russian. Great food, warmth and comfort, sunny days and luck will never be enough to make a Russian person happy. “This is why you shouldn’t criticize Russians for appearing sad or never smiling, for complaining about life or creating music that is depressing,” says Alla Sergeeva, a philologist, “they are not being whimsical. This is part of the Russian approach to life, which should be approached tactfully.” By the way, sadness is not the reason Russians opt for vodka over wine! Russians know how to have fun better than just about anybody else. It’s just that temperature stays below zero in Russia for at least six months out of the year, and vodka warms you up when it’s cold. We drink it differently than people in the West, too – we don’t add ice or juice. Russian vodka goes best with a traditional Russian snack: herring with potatoes, pickles, pickled mushrooms and salo with black bread. Try it at least once, and nobody will be able to drag you away from the table! ■

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everybody: from to Julio Iglesias The cultural events of the spring and summer will help the Moscow’s guests and residents liven up any day of the week. And everybody will be able to find something they like.

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2016 was declared the Year of Language and Literature of Russia and the United Kingdom. Within the scope of the celebrations dedicated to this event, Tretyakov Gallery will be setting up a grandiose exhibition called “From Elizabeth to Victoria” for the Russian public. From April 22 until July 24, portraits of key figures in English history and culture from the 17th to the 19th centuries will be featured in the gallery – works from the collection of the National Portrait Gallery in London. Some of the highlights include portraits of Elizabeth I, Queen Victoria, Oliver Cromwell, Sir Isaac Newton, James Cook, William Shakespeare, Robert Burns, George Gordon Byron, Walter Scott and many others.

oscow’s theatre-lovers are in for a big premiere. In April, Lenkom Theatre is planning the first show of the new play “The Idiot,” which is based on Fyodor Dostoyevsky’s famous novel. The story of Count Myshkin, who was considered strange and absurdly eccentric by everybody around him, has always been a favorite of directors and producers (and not just in theatre). The first film adaptation of the The Idiot was released in 1910. Ivan Pyryev, a wellknown figure in cinematography, also took a swing at an adaptation of Myshkin’s story in 1958. Yuri Yakovlev, a famous Soviet actor, played Count Myshkin in the film.

The play won several awards at theatre festivals, and several of the play’s actors, including Aleksandr Zbruev and Maria Mironova, won awards as well. Konstontin Bogomolov actively works with various theatres in Moscow. He became extremely popular for the plays he directed at the Chekhov Moscow Art Theatre, including the adaptations of Oscar Wilde’s An Ideal Husband and Dostoyevsky’s Brothers Karamazov, as well as “Jewelers's Jubilee,” which was created specifically for the 80th birthday of the theater’s artistic director Oleg Tabakov.

www.rustoria.ru

In 2003, a series by director Vladimir Bortko in which the talented actor Evgeniy Mironoc played Count Myshkin, graced our television screens. Now, the time for another theatrical production has arrived. So far, we have no idea who has been cast in the leading role, but we do know that the play director is Konstantin Bogomolov. His first production with Lenkom, an adaptation of Pushkin’s Boris Godunov (2014), is still extremely popular with the general public.

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On Orthodox Easter Day, which is on May 1st this year, religious people will be treated to a musical gift. The stage at Crocus City Hall will be hosting a concert dedicated to Easter by the chorus of Sretensky Monastery. The concert will feature church music, along with folk songs. On May 2nd, the Vaalamsky Monastery choir will be performing on at the Kremlin Palace. The chorus repertoire includes modern music along with traditional songs. Both concerts will be a delight to those who value church music, and the unique concerts will bring joy to those who don’t consider themselves to be religious as well. In the middle of May, the Bolshoi Theatre will be hosting an entire series of “Sleeping Beauty” ballets. Reviewers call the ballet “an example of true classical, timeless beauty.” Pyotr Tchaikovsky’s magnificent music and the excellence of Russia’s masters of ballet will be appreciated by ballet connoisseurs and amateurs alike. “Sleeping Beauty” is a true hit that has been a part of the theatre’s repertoire since the end of the 19th century and has always drawn huge audiences. On May 23rd, the fabulous dancer Ulyana Lopatkina will be performing at Crocus City Hall. The Mariinsky Theatre’s prima ballerina doesn’t come to the capital often, and her performance in Moscow is a rare occasion. Interestingly, another famous dancer, Svetlana Zakharova, will be performing immediately after her on May 24th and 25th. Zakharova will be gracing the stage of her “home turf” – the Bolshoi Theatre. On May 25th, the performance of 36-year-old Svetlana Zakharova, the prima ballerina of the Bolshoi Theatre and La Scala, will be rivaled by 72-year-old Julio Iglesias. The legendary performer will be coming to the Kremlin palace for just one concert. 300 million records sold all over the world have propelled Iglesias to mega-stardom. By the way, Iglesias has not toured for a long time because of a contract he had signed with one of the most famous casinos in Las Vegas. According to the agreement, the singer could only perform at the casino for a period of three years. Luckily for the fans, the contract is no longer in effect. Fans of the famous performer Phil Collins, who has won 7 GRAMMY awards, will finally be able to attend the star’s concert at Crocus City hall on May 26th. Phil left the group “Genesis” in 1997 and has started working on his own again. The artist’s solo career has brought him a great deal of fame, along with profits from the sale of 150 million CDs. Phil became one of the wealthiest singers in Great Britain, but he is far from ending his career. The 65-year-old singer performs regularly and is still touring. On June 2nd, the singer Yolka will be performing at the Hermitage Garden Theater. Yolka is one of the young82

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est performers among Russian pop singers. “Yolka” is a stage name adopted by the young actress Elizaveta Ivatsiv, who is originally from Uzhgorod. The name, along with her strong voice, interesting presentation and original costumes, have brought her fame. She is sometimes even referred to as “Lady Extravaganza” and compared to Lady Gaga (though of course her outfits are not nearly as extreme – there are no meat slabs or teddy bears). Yolka loves unusual dresses, tall and grotesque hairstyles and gigantic topknots. She wears flashy jewelry and makeup, which also draws the public’s attention to her. On June 7 , Tchaikovsky Concert Hall is hosting a performance by the Russian State Symphony Cinema Orchestra, led by the famous conductor Sergei Skripka. He has been the conductor for this orchesth

tra for 23 years. The orchestra dates back to 1924, is extremely popular, and plays music from the most popular Russian films. Fans of classical music will also be treated to a Vivaldi Orchestra performance at the Tchaikovsky Concert Hall on June 8th. The orchestra’s conductor is Svetlana Bezrodnaya, who is the daughter of the personal doctor for Joseph Stalin, Boris Levin and the singer Irina Shepshelevich-Lobovskaya. It’s an all-female orchestra, and is appreciated by connoisseurs of classical music. On June 10th, fans of the duo “Modern Talking” have a date with the remarkable Thomas Anders. The sweettalking singer is a frequent guest in the Russian capital and has a ton of fans here. Of course, the audience is primarily made up of women. Crocus City Hall will

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and the chance to hear him play in the Russian capital is rare. The musician tours the world frequently and doesn’t play in Moscow often. Another important event is scheduled for the beginning of the summer in Moscow. On June 23rd, an international film festival that will gather the leading figures of modern cinematography will be held. The celebration will take place in Moscow for the 38th time and the history of the forum dates back to 1935, when Udarnik movie theatre hosted the first Soviet Film Festival. Sergey Eisenstein was the chairman of the jury, and the program started with the famous film Chapaev. Interestingly, Walt Disney cartoons were included in the Soviet festival – they even won awards! After WWII, the festival went on hiatus until 1959.

most likely be hosting a lot of people who were 16-20 in 1984 and used to dance to "You're My Heart, You're My Soul" at discotheques. On June 14th, the Kremlin Palace will be hosting a concert by the unique pianist Denis Matsuev. Performances by this talented artist are always remembered for his colossal temperament and expression. Denis even broke the piano he was playing on during one of his concerts. Matsuev is truly a mega-star,

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In 1999, director Nikita Mikhailkov became chairman of the festival. What kinds of movies received awards? Different kinds, from Stanislav Rostotsky’s We’ll Live Till Monday, Georgy Daneli’s Mimino and Alexander Avalov’s/Vladimir Naumov’s Teheran-43 to Federico Fellini’s Interview and Krzysztof Zanussi’s Life as a Fatal Sexually Transmitted Disease. The festival’s guests have included Hollywood stars such as Brad Pitt and Robert De Niro. Last year, Jacqueline Bisset won the award for best actress. The actress was visibly moved. The biggest award went to Bulgarian director Ivaylo Hristov, for his film Losers. On June 25th, one of the greatest rock groups, Iron Maiden, is going to come to Moscow. The legend-

ary collective has given the world at least 100 million CDs and influenced the development of heavy metal tremendously. The awaited performance by the heavy weights of metal will be held at Olympic Stadium in Moscow. On July 10th, American show business star Lana Del Rey will be performing in Moscow for the first time.

Her songs combine pop music with elements of hiphop, which has made her extremely successful. The performer’s first concert took place at the New York club The Box, and her career has been gaining momentum since then. Her albums are always at the top of the charts and her shows are always successful. Lana is already being compared to Britney Spears and Lady Gaga. ■

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Unusual museums: valenki,never retro cars Moscow and Olympic bear Andrei Sharonov

sleeps

There are a lot of world-famous museums here in Moscow: the Tretyakov Gallery, the Pushkin Museum, the Kremlin Armoury and so on. A lot of Andrei Sharonov, Yes, it is a challenge as well. But it isvisit a real them opportunity Muscovites and visitors know about these museums and on aand what is important – it is a reality. Deputy Moscowregular Mayorbasis. for Economic Policy, But our city also has other interesting, but less famous places Isn’t it a challenge? shared with CAPITAL IDEASCapital his vision of has compiled to explore. Ideas a list of unusual museums that feature Moscow as an international financial center is a challenge as well. But it is a real opportunity and what the most unexpected exhibits in Yes, theitcity. is important – it is a reality.

Bunker-42 on Taganka Bunker-42 highlights the historical significance of a difficult time period in the USSR, when the country was in conflict with NATO states in the 1950s-1980s. It is the only museum in the world that is entirely dedicated to the Cold War! Originally constructed as an antinuclear shelter for the leaders of the USSR, the facility is located in the very center of Moscow. It was designed and erected after the Soviet Union conducted the first series of nuclear weapons tests. The tests enabled experts to establish how these types of facilities need to be designed (prior to this, no other country in the world had constructed a similar facility). It was determined that the optimal depth for the bunker is over 50 meters. The location was selected because the bunker needed to be located close enough to the Moscow Kremlin – the proximity would allow Stalin and other members of the government to take shelter quickly and continue to give orders in case of a nuclear attack. Today, Bunker-42 continues to serve a very important function. Every day, people descend 65 meters underground in order to experience an era during which the world was at the brink of a nuclear war. Guests who book a special tour will get a historical and technical introduction to the bunker, visit the fourth block with an emergency post, walk across halls that have been restored to their original Soviet appearance, explore the dark tunnels of the life supply unit, and climb up to the ventilation shaft.

Address: 5th Kotelnicheskiy Pereulok 11, m. Taganskaya, Marksistskaya Tel.: +7 (499) 703-44-55, +7 (495) 500-05-54, +7 (495) 500-05-53 Hours: every day, 24 hours a day, but you must book the tour in advance. Book tours and events by phone from 9:00am to 8:00pm. Ticket price: 400–2,000 RUB Website: www.bunker42.com 86

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The Vodka museum The Vodka Museum is considered to be one of the most interesting Museums in Moscow. Aside from everything else, the museum’s expositions contain various types of containers used to store vodka – the schaal, the stof and the quarter. Visit the museum to find out what real vodka is, when people first started making it, and learn about the role it played in Russian history. The staff will tell you about the process of making vodka, which used to be referred to as “vinokureniye” in ancient Rus. As many people already know, the first vodka was made in monasteries. The museum’s guests will see a unique exhibit that shows a Russian monk in front of one of the first machines, and learn in detail about how it works. A bottle used for the famous “Moscovskaya Osobaya” vodka holds a special place among the museum’s rarities – this vodka became Russia’s official national drink soon after it was patented by the government in 1894. The museum complex also houses a restaurant of Russian cuisine, the interiors of which resemble Russian restaurants at the end of the 19th century.

Address: Izmailovskoye Shosse 73 Z, “Kremlin in Izmailovo” Cultural and Entertainment Complex, m. Partizanskaya Order a tour by phone: +7 (499) 166-50-97 Hours: daily, 10:00am – 08:00pm Ticket price: 120-400 RUB Website: http://vodkamuseum.ru

Torture museum A unique collection of ancient torture instruments and devices. Reconstructions of torture machines that have not survived to the present day. A collection of engravings on the subject of torture and executions that are too terrifying to be published. There are similar museums abroad, but these museums usually focus on general horror – witches, demons and vampires. This museum is about legal forms of physical punishment: torture, execution, corporal punishment.

Address: Arbat 25/36, m. Arbatskaya, Smolenskaya Tel.: +7 (926) 497-18-24, +7 (919) 965-49-39 Hours: Mon – Sun, 12:00 pm – 10:00 pm Ticket price: 300–400 RUB Website: www.pereverzev.su

Museum of Soviet arcade games This museum is like a time machine – it brings people back to their happy childhood days: favorite cartoon characters and drawings from the “Murzilka” magazine, the bear from the Olympic games and “Lakomka” ice cream. When people think about their childhoods, they frequently recall their time spent in class as young pioneers and the ceiling of the planetarium, or playing football until late in the evening with friends. The pioneer camp on the Black Sea and songs by the fire, hikes through the forest and games of cops and robbers. If any of these things make you nostalgic, the Museum of Arcade Games will bring back a lot of pleasant memories. The museum contains 40 different kind of arcade games, including games that you can still play.

Address: Kuznetsky Most 12, m. Kuznetsky Most Tel. +7 (499) 261-11-47 Hours: Mon – Sun, 11:00 am – 09:00 pm Ticket price: 450 RUB, free entry for children under 6 Website: 15kop.ru January-March April-June 2016 CAPITAL IDEAS

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RussianSharonov Valenki museum Andrei

Moscow never sleeps

The only museum in Moscow where you can learn a lot of new things about a seemingly mundane object and its significance. The exposition features different models, from 19th century embroidered valenki to the felt boots work by the Russian Olympic team in 2002. The museum’s mission is to remind visitors how our ancestors once lived in harmony with nature, taking only what they needed and leaving the rest in place. Children and adults can take workshops on decorating valenki and working with felt.

Address: 2nd Kozhevnichesky pereulok 12, m. Paveletskaya Tel: +7 (910) 402-59-13, +7 (495) 775-25-77 (ext. 279) Hours: Tuesday, Wednesday, Friday, Saturday, 11:00am – 05:30pm Website: www.gorizont.org/muzey/ekspozytsiya/

Andrei Sharonov,

Museum of Money

Deputy Moscow Mayor for Economic Policy, shared with CAPITAL IDEAS his vision of

Yes, it is a challenge as well. But it is a real opportunity and what is important – it is a reality. Isn’t it a challenge?

The museum is relatively which means thatBut theit stands displays can’t feaMoscow as an international financial center Yes,small, it is a challenge as well. is a realand opportunity and what

ture the entire collection at the sameittime (about 4,000 exhibits). You can see differis important – is a reality. ent types of money that was used in the past, currencies from exotic countries and contemporary bills. Currently, 231 countries are represented across the museums 4,232 exhibits (3,142 are bills, while the other 1,093 are coins). You can also order interesting tours that will introduce you to mysterious places created by nature and artificial monuments of human history. Find out what the ancient Slavs used for money, visit Vladimir the Great’s coin factory and see what the first Russian coins looked like, listen to a story about Ivan the Terrible’s cheshuiki and Peter the Great’s rubles, see a bill that was dubbed “Katenka” and find out why the first paper bills in Russia were referred to as “red” and “blue.”

Address: Leningradskoye Shosse 59, in the Moscow River Shipping Company building, m. Rechnoy Vokzal Tel.: +7 (499) 652-94-56 Hours: Mon – Fri, 10:00 am – 06:00 pm, Sat – Sun, 11:00 am – 07:00 pm Ticket price: 50–200 RUB Website: www.muzeydeneg.ru

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Mosfilm museum A corner of the legendary film studio that has been used to make Russian films for many years. The museum is unusual because the exhibits featured here change all the time, as some of them are still used for filming. There is also a unique collection of retro cars featured in Mosfilm movies, costumes and fabulous decorations. Here, you can find out what a movie set looks like and walk the halls of the main building, which houses various stands with sketches, make-up, camera equipment and more. Unfortunately, the pavilions are not open for tours when filming is in progress because visitors interfere with the work of actors, directors and the whole crew.

Address: Mosfilmovskaya Ulitsya 1, m. Kievskaya Tel./Fax: +7 (499) 143-95-99, +7 (499) 143-91-18 Tours for individuals: groups (sign up in advance): Tue – 03:00 pm, Thu – 03.00 pm, 06:30, duration 1h30. Ticket price: children – 270 RUB, adults – 390 RUB Website: www.mosfilm.ru/fans/ekskursii.php

Experimentarium science museum The museum is an interactive exposition that covers all major scientific fields. Every room has exhibits that you need to interact with: explore, put together, solve, pull, jump and even scream. This museum actually encourages you to touch and play with the exhibits! The museum is rightfully considered to be the first interactive museum for children in Russia – a place where kids can try out and experiment with complex disciplines like electromagnetics and mechanics, chemistry, physics, anatomy, optics and more. The museum also has a spherical theatre that shows scientific films about space, the Universe and distant plants. The theatre is located on the second floor, between the Electromagnetism and Optics sections.

Address: Leningradsky Prospect 80 bldg. 11, m. Sokol Tel.: +7 (495) 120-05-20 Hours: weekdays – 9:30 am – 07:00pm, weekends and holidays – 10:00 am – 08:00 pm Ticket price: 450 – 2,150 RUB Website: www.experimentanium.ru/ru/

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LIFE&LEISURE

White Collar Fest: it’s magic time!

They say that those who work hard play hard. Employees of The Boston Consulting Group don’t doubt this for a second!

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o matter what anybody says, boredom saves the world – it is a powerful force that pushes people to create. After all, those who are bored want to stop being bored immediately and enrich their lives with excitement.

This is approximately what Anton Stepanenko and Sergey Ishkov, 32-year-old employees of The Boston Consulting Group (an international company that specializes in management consulting), were thinking when they decided to start playing guitar. They weren’t planning on leaving their well-paid, interesting jobs. They just wanted to add something different to their lives, which were mostly devoted to work. “I’m not exaggerating when I say that work takes up almost all of our time,” Sergey says, “We literally sit in our office from morning until late in the evening. Of course you eventually start wanting a change.” There was no question about what they were going to do to make it happen. Both of them wanted to be musicians when they were kids. “You know,” Anton confesses, “sometimes you close your eyes and see yourself on stage with a microphone, not in an office in front of a computer.” The idea to turn their dream into reality occurred to the two friends at the end of 2013. The New Year was approaching, and they decided to perform at their corporate party as a band. They had no problem finding others to join them. Sergey and Anton easily found colleagues who also wanted to be on stage and started to practice.   It was immediately decided to name the band Magic Time. “This is a term that means something specific in our company,” Sergey explains, “At BCG, ‘magic time’ refers to time that is not dedicated to a project and can be used however the employee likes. We aren’t officially entitled to this time, but everybody figures out a way to make this happen.”

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Magic Time’s performance at the New Year corporate party was a huge hit. The band was supposed to only play for a half hour, but the crowd forced them to keep going for almost the entire night. They were asked for encores of all the Russian and foreign hits that were included in their repertoire. “This was fantastic,” Anton recalls, “We weren’t expecting anything like it. The next day the entire office treated us like rock stars and wanted to know when we would lay again. We didn’t know what to say. We didn’t have any plans after the corporate party!”   After thinking about what to do, the group decided to put together a festival that would include bands from other companies working in Moscow. “We knew that there were bands like this at Sberbank, Rosnano, VTB, PwC from our colleagues,” Sergey said, “so all we had to do was find a place to perform and invite them.” They selected B-2 club, invited other bands and... What happened on May 29th, 2014 at the famous Moscow nightclub will probably make history, and not just the fact that the concert drew a crowd of almost eight hundred people. The most important thing is that the night gave birth to White Collar Fest – a night for managers and employees of international and Russian companies. As of today, a total of three White Collar Fests have been held in Moscow. Germany even hosted a similar festival, dedicated to the 25th anniversary of the fall of the Berlin wall. Magic Time performed at the festival with a band from the Berlin BCG office. At the end, our guys played “Winds of Change,” while the German band performed “Doroga Dlinnaya.” The next White Collar Fest is going to take place in Moscow on June 4th. “The festival is growing,” the guys say, “We have a lot of things in the works. We are inviting all corporate groups and want to have an annual contest. The band that wins will have an opportunity to take the next step in their semi-professional music careers – to film a clip that will get airtime with our support.” But they don’t want to take it too far. “We don’t want to have our own music awards or anything,” they say, “We don’t want to cross the line that separates us from professional show business. After all, the most important thing about White Collar Fest is having a good time!” ■

useful

info

City Government Address: Voznesensky Per., 21, Moscow, 125032 Ph: +7 (495) 633-51-90 http://www.mos.ru/en/index/php



Moscow Investment Portal Address: 119019, Moscow, Novy Arbat St., 11, bldg. 1 E-mail: [email protected] http://www.mosinvest.mos.ru

Moscow Innovation Development Center Address: Voznesensky Per., 22, Moscow, 125009 Business Center Usadba, Ph: +7 (495) 225-92-52 http://inno.msk.ru

Business Protection Headquarters Address: Voznesensky Per., 22 (5th floor), Moscow, 125009 Business Center Usadba Ph: +7 (495) 620-20-45 http://shtab.mos.ru

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

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FOOD&DRINK

Roberto: food like art Federico Fellini famously said that life is a combination of magic and pasta. The Italian restaurant Roberto, which is located on Rozhdestvensky Boulevard, serves pasta and other dishes so magical that the life of every visitor turns into a true dolce vita.

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t’s difficult to find somebody with more perseverance than Maurizio Pizzuti – a restaurateur from Rome who has been in the business for almost 40 years. In the 20 years that Maurizio has been working in Moscow, he has become an incorrigible optimist. Since 1990, he has taken part (as a partner or owner) in the opening of four Italian restaurants in Moscow! Some of them existed for several years, others for several months, but, in spite of having to start over so many times, Pizzuti never gave up. Even when Russia fell on hard times and his charming Russian wife Vera (they got married in 1996) proposed to leave Russia and move back to Italy, he convinced her they should stay. “I always told her no, repeating over and over that there are a lot more opportunities here in Moscow,” Maurizio recalls, smiling. It turns out he was right all along. His restaurant Roberto, which he opened in Moscow in 2001, is considered to be one of the best Italian restaurants in the Russian capital.

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This is explained, first and foremost, by the fact that Roberto is the only Italian restaurant in Moscow that is completely managed by Italians. As the owner, Maurizio Pizzuti is the general manager of the place. The kitchen is under the control of Francesco Voce  – a chef from Calabria, located at the very tip of the country’s boot-shaped peninsula. Both of them work every day, from early morning late into the evening. The experienced chef uses the kitchen for more than simple cooking – he is a true creator. The dishes on the menu at Roberto are a true work of art, and Francesco is a food designer. Regardless of what the dish might be – a simple pizza or Risotto con anatra zucchine e Vino Rosso caramellato – everything will be executed perfectly. “For me, food is culture,” Francesco confesses. Interestingly, the way Mr. Voce came to Moscow was an adventure that can rival the plotline of famous Blockbusters. It happened in 2002. “One day, I got a phonecall about putting together a menu for a banquet that Gazprom was planning to hold in Tyumen. ‘Why not,’ I thought to myself. I carefully thought through all of the dishes and sent them in. Everybody liked it, and a few days later I was in Tyumen,” the chef recalls. Tyumen welcomed Francesco with a wall of snow and freezing temperatures  – it was -45 outside! But the cold 94

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didn’t scare him off. After the banquet, he stayed in the mysterious Siberian town out of sheer curiosity. Then, he got offered a job in Moscow. He has been working in the Russian since then, and started his job at Roberto in 2004. Mr. Voce has been a chef for over 30 years. “I am a professional chef,” he says, smiling, “Unfortunately, in Russia just about anybody can call themselves a chef, even if they were a cab driver just a few months ago. In Italy, this is simply unthinkable!” It is no surprise that a lot of restaurants in the capital that refer to themselves as “Italian” serve things like pizza with chicken. “This is nonsense! What planet did these people come from?!” Francesco laughs. At Roberto, all of the Italian dishes are really Italian. “We don’t experiment,” Maurizio and Voce say. Francesco took a course at the Barilla Parma Italia Academy in September 2014. In other words, if you order veal with tuna sauce at Roberto, the sauce will most definitely be made out of tuna, not mayonnaise or ketchup. And, of course, your tiramisu will be made with mascarpone cheese, not with cream. The restaurant menu is updated every six months, and Francesco’s favorite dish is the Spaghetti Pomodoro (but really, every dish Francesco makes can be considered his favorite). The famous film director Andrei Konchalovsky, who is a big April-June 2016 CAPITAL IDEAS

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fan of Italian cuisine, loves Roberto’s Pasta Aglio e Olio. In general, the restaurant is a frequented by many celebrities, including famous designers, TV personalities and athletes. Have the sanctions affected the restaurant’s operations? “Yes, this has been a bit of a problem for some time,” Maurizio says, “since we want to use real Italian cheese, for example. Of course, we are looking for ways to deal. We get similar cheese that

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is made in Moscow, although this is not the best substitute. It’s more of an imitation.” By the way, the restaurant’s wine list, which features wines from every region in Italy, is a particular source of pride for the owner. Roberto always holds the bar high. It is not surprising that some time ago the Italian Ministry of Foreign Affairs awarded Maurizio Pizzuti with a certificate of excellence, which confirms that Roberto is the best Italian restaurant outside of Italy. ■

One hive is just a hive, but five hives is an apiary!