Notebook

Media Bargain

Oligarch snaps up ailing British paper

Billionaire, Duma deputy, and former KGB Colonel Alexander Lebedev, 49, has his sights set on building a media empire by snapping up struggling European papers, The Times of London wrote. In January, Lebedev reportedly ac-quir-ed a controlling share in London’s Evening Standard for £1. According to The Guardian, the Evening Standard has been losing up to €10 million per year. 

Lebedev worked as a KGB agent in the British embassy in the 1980s, and said he fell in love with the Evening Standard at that time. He first expressed an interest in purchasing the paper 18 months ago. Lebedev owns Novaya Gazeta (along with partner and former Soviet President Mikhail Gorbachev), the paper that employed journalist Anna Politkovskaya at the time of her murder, and one of the few truly free mass media outlets left in Russia. 

“Lebedev likes to support free and independent media, and he’s in talks with several papers in the UK and other European countries,” said Lebedev’s spokesperson, Artyom Artyomov. 

The Evening Standard was previously fully owned by Daily Mail and Global Report. After this deal, DMGR will own just 24.9% of the paper. Lebedev’s holding company, National Reserve Corporation, includes the National Reserve Bank, as well as stakes in Aeroflot, Gazprom and other companies. Prior to the current economic crisis, Forbes listed Lebedev as the 358th richest man in the world.

 

Idle Threats

Moscow weighs costs of gridlock

Moscow’s traffic jams are costing the city about R40 billion per year, a representative of the State Traffic Safety Inspectorate told Prime-Tass. The figure resulted from a study done by Moscow Road Institute experts, who have looked at the cost of traffic delays as well as the environmental consequences of millions of idling cars. 

Moskovsky Komsomolets, meanwhile, calculated that the average speed of traffic in Moscow is just 15 kilometers per hour, while drivers spend an average of 1.3 hours in traffic jams each day. At the end of 2008, there were about 3.5 million automobiles registered in Moscow.

 

Ruble Watch

The U.E. makes a comeback

After spending billions to prop up Russia’s national currency, the Russian government has let the ruble slide to record lows, inciting panic among both companies and citizens. 

After the Christmas and New Year’s holidays in January, the Central Bank devalued the ruble five times in just one week. In January the ruble fell to 35.4 rubles per dollar – the lowest since early 1998, just before Russia’s infamous default. 

Since August, the Kremlin’s efforts to prop up the ruble through infusions of cash led to a 34 percent decline in strategic currency reserves – to about $396 billion at the end of January. There has also been cash flight: since August, investors have withdrawn over $278 billion from Russia.

Since last fall, Economics Minister Alexei Kudrin has been recommending a sharp devaluation in the ruble, to avoid “salami” tactics, but Prime Minister Vladimir Putin has apparently decided that repeating the debacle of 1998, when citizens’ savings were wiped out by the default and devaluation, was politically untenable and could lead to social unrest. 

The ruble:dollar and ruble:euro exchange rates are closely tied to the price of oil, Russian Newsweek noted. The magazine predicted that, if oil drops to $30 per barrel,  the exchange rate will fall to R38/$1; if oil rises back up to $60, the rate will stabilize at R33/$1. Yet analysts have also said that, if a panic occurs, all bets are off. 

The atmosphere of uncertainty has led to a comeback for “conditional units” (uslovniye yedinitsy) or “U.E.”s, as reported by The Moscow Times. The U.E. – which largely disappeared three years ago – is an arbitrarily set pricing index that is pegged to the dollar and the euro. Pricing in U.E. instead of rubles allows retailers to avoid changing prices so frequently when exchange rates are volatile. 

 

Dutch Treasure

How do you raise
a ship called Maria?

Russia wants to raise the Frau Maria – a treasure-laden schooner that wrecked off the Scandinavian coast in 1771. The ship was carrying Dutch paintings, porcelain, and other precious art for Catherine II’s collection at the Winter Palace. The Frau Maria sank near what was then the coast of Sweden, but is now Finland.  

It is not clear whether Russia can claim the cargo. “No one is going to budge before everything is divided,” Rosokhrankultura Head Alexander Kibovsky told RIA Novosti. “When the bear is killed, it’s too late to divide his skin.” 

Even though the art has been submerged for nearly 240 years, some experts predict that the works can be restored. According to the archives, the paintings were packed in lead tubes and sealed with wax. 

Historians have presented archival documents proving that Russia paid Holland in full for the treasures. After an agreement is reached among the four countries involved, the rescue operation could take two years, Artyom Tarasov of the Rescue of National Cultural and Historic Valuables told Britain’s Telegraph.

 

Primorye Protests

Duma dons orange-tinted glasses 

A new decree aimed at helping Russian’s ailing auto industry raised used car import tariffs by as much as 200 percent. The measure led to protests across the Far East this winter, in which participants were rounded up by OMON troops brought in from Moscow. 

Import of used cars from Japan has been a huge business in the Russian Far East for several years, so it is not surprising that locals there protested the move. Yet, rather than treat the protests as real expressions of public outrage, Moscow has either ignored them or blamed Russia’s enemies for inciting civic unrest. 

Analysts in the Russian Duma blamed the protests on anti-Russian foreign organizations, who were allegedly misinforming Russians in order to spur them to demonstrate. A copy of the report obtained by Nezavisimaya Gazeta stated that, “The mass actions against tariff increases can be seen as a directed effort to destabilize the situation in several Russian regions. The protest actions are being carried out according to a general scenario of the so-called ‘orange revolutions,’ when an artificially initiated public discontent takes on a political dimension.” 

Since the decree has been in effect, the number of cars imported into the Far East declined from 950 to 50 cars per day, a customs official told newsru.com. “People are losing their jobs; the auto business is dying and quickly,” said one Vladivostok auto dealer.

 

Both Wrong

NGO denounces both sides
in Ossetia War

Human Rights Watch conducted over 460 interviews with inhabitants of South Ossetia and has issued a report faulting both Russia and Georgia for escalating the August conflict in the region. 

Both countries continue to insist they tried to minimize civilian casualties, yet HRW said that Georgia’s use of Grad rocket launchers, which cannot be precisely targeted, was indicative of a “blatant disregard for the safety of civilians,” the BBC reported. Russian forces, meanwhile, allowed South Ossetian militants to burn villages, kill, and rape with impunity, the report found. Over 20 thousand Georgians are displaced after fleeing the conflict, the HRW report said.

 

Altai-Gate

Tragedy sheds light
on high-profile poaching

Seven people died in a helicopter crash in the Altai Republic in January, including several regional politicians and Alexander Kosop-kin, presidential envoy to the Russian parliament. No official statement has been issued about the cause of the crash, yet the World Wildlife Fund alleged – based on crash site photos posted on a regional news website – that the officials were hunting endangered argali sheep in the mountainous region. 

There are only 200 argali sheep in Russia and they are often poached for their corkscrew-shaped horns. “Parts of the reserve where such hunts take place are closed to locals, who can’t even own a gun,” local environmentalist Alexei Gribkov told Novaya Gazeta. “Only high officials who don’t have to listen to anyone could hunt there.” What is more, argali sheep are sacred to locals, and hunting from helicopters is in violation of hunting regulations. 

 

Wild Field 

First movie awards announced

January’s Golden Eagle award ceremony has traditionally jump-started the year for Russian cinema. Unlike last year, however, when the winner was the highly publicized 12 by movie giant Nikita Mikhalkov, this year the award for best picture went to a relatively unknown director – Georgian-born Mikhail Kalatozishvili – for his film Dikoye Pole (Wild Field). Kalatozishvili is the grandson of Mikhail Kalatozov, the iconic Soviet director of The Cranes are Flying. Dikoye Pole is about a young doctor who works in the steppes of Kazakhstan. 

Other nominees in the best film category were Bumazhny Soldat (Paper Soldier) by Alexei German Jr., Ischeznuvshaya Imperiya (Vanished Empire), by Karen Shakhnazarov, and Vsye Umryut a Ya Ostanus (Everyone Dies, but I Remain), a debut by 23-year-old director Valeriya Guy-Germanika. 

Shakhnazarov won in the category for Best Director. Konstantin Khabensky and Kseniya Rappo-port took the top honors for lead acting roles in their movies Admiral and Yuryev Den (Yuri’s Day), respectively.

 

Mayoral Shuffle

Sochi, future host of the 2014 Olympic Games, has changed its mayor for the fourth time in the past year. The new mayor is 48-year-old Anatoly Pakhomov, who was previously the mayor of Anapa. Pakhomov is famous for washing the streets of Anapa with shampoo and fining people for chewing gum. He will be acting mayor until elections at the end of April.

 

Music Hits

Two world-class musicians – Denis Shulgin and Georgy Tsai – were attacked within days of each other this winter. Police are unsure if the cases are related. Both Shulgin and Tsai are violinists in the acclaimed Moscow Virtuosi Orchestra. One theory has it that the attacks are aimed at stopping the orchestra from performing, yet the orchestra’s Deputy Director Ivan Malyuta told RIA Novosti he thought the attacks were merely a coincidence.

 

Desk Jockeys Unite

The United Russia party has supported the creation of a new “white collar” trade union to lobby for the rights of office workers, RIA Novosti reported. The trade union will form organizations in the 13 largest Russian cities and will fight mass layoffs of office workers during the economic crisis, according to trade union head Andrei Isayev.

 

Camp Broke

Boris Novozhilov, director of Artek – the most famous Soviet-era Pioneer camp, located in the Crimea (artek.org) – went on a hunger strike in January, demanding that Ukrainian authorities pay attention to the pitiful state of the facility. Artek has been an international vacation center for children since the fall of the Soviet Union, and is financed by the Ukrainian budget, yet it has not received any allocations for 2009. Novozhilov said he is afraid that Artek is being purposely bankrupted so that its prime coastal location can be put up for sale. 

 

Sam’s Place

Wal-Mart is moving into the Russian market, registering a legal entity: WM Eastern Europe Holdings. The company has also joined a retailer lobby that includes foreign companies like Metro, Carrefour, Auchan, and Russia’s X5 Retail group, The Moscow Times reported. Wal-Mart is reportedly in talks to buy up Russian chains that are having financial trouble, an investment bank source told the paper.

 

End of Life

Ukraine’s parliament has decided that the Chernobyl nuclear plant will be dismantled over the next several decades. The infamous nuclear complex has been sitting idly since 2000. Some of its reactors worked through the 1990s, despite the nuclear catastrophe of 1986. As part of the shutdown, the plant’s nuclear fuel will be moved to long-term holding facilities. The nuclear plant’s superstructure will be preserved and dismantled in 2045, after radioactivity subsides, Interfax reported.

 

Yukos Release

Ex-Yukos lawyer Vasily Aleksanyan has been released from prison after a payment of R50 million in bail to the Moscow City Court, Radio Svoboda reported. Aleksanyan, who is terminally ill with cancer, tuberculosis, and AIDS, has been in prison since 2006, accused of embezzlement and tax evasion. Russian human rights organizations and the European Court of Human Rights had demanded for months that Aleksanyan be released to house arrest.

 

In Moderation

President Dmitry Medvedev’s blog (blog.kremlin.ru) has been opened up to comments from users. To post a comment, a person merely must register on the website, and all comments are moderated prior to posting. Several hours after comments were allowed on January 12, some 231 of 653 comments were published. Medvedev’s blog entry that day was dedicated to vacationing and winter sports. 

 

Mummy Returns

The Russian rock band Mummy Troll hopes to conquer the American market, first with a cross-country tour, then with an American album release. The album, Comrade Ambassador, features a tiger wearing a superman costume and a star-studded budyonnovka cap. Mummy Troll is a four-musician band founded in Vladivostok in 1983 by Ilya Lagutenko. It was hugely popular in late 1990s and has previously toured abroad, performing mostly to Russian audiences.

 

Short Victory

A ten-minute animated Russian short about a public toilet attendant has been nominated for an Oscar. The film Lavatory Lovestory, is a hand-drawn black and white cartoon that took artist Konstantin Bronzit a year to complete. The short will compete against four others in the animated short category.

 

“The crisis won’t be overcome if we fight it with troops of sluggish number-crunchers. We need new, creative solutions, not a scientific basis for doing nothing, lying on the stove and waiting for the restoration of the American economy.”

First Deputy Chief of Staff Vladislav Surkov (Interfax)

 

“We won’t allow our veto right to be weakened in any way.”

Vitaly Churkin, on proposed reforms in the UN Security Council (Vedomosti)

“Sign the protocol, put your observers there, good luck, on the border between Russia and Ukraine, and the border between Ukraine and Western Europe.
Sit there and observe around the clock, snack on salo and sip gorilka.* There’s tasty salo in Ukraine, I guarantee it. They send it to me.”

Prime Minister Vladimir Putin on the reliability of observers in the gas dispute,
at a press conference with foreign reporters.  

 

“Our instinctive response [to the global economic crisis] is not mobilization or confusion, but a complete readiness to quickly stop production, direct money offshore, sit down and start watching how it’s all going to end.”

Lev Freinkman of the Institute for Economies in Transition (Vedomosti)

 

 

“Things will never be bad in Russia, because we are a happy people.”

Zurab Tsereteli (Itogi)

 

“I am sure that what you showed was the truth… And this truth will find its way into the hearts of those who did not have that truth… There was no propaganda in what was happening, despite the fact that [propaganda] is natural in times of war.”

President Dmitry Medvedev, presenting awards to Russian media professionals
for their work in South Ossetia* 

“I am never hypocritical, while the Chinese are always hypocritical, and so was the Soviet Union. The picture of the Afghan war that they painted for the Soviet people, I think, was far from reality. Totalitarian regimes always do that. I have always stated very clearly: I’m a Marxist, but not a Leninist (laughs).”

Dalai Lama (Russian Newsweek)

 

“I’ve had enough of this nonsense (бред), nonsense – I can’t call it anything else –  it is even difficult for me to comment on this, and unpleasant. It is a farce. Plain and simple. This is what we have come to.”

Victor Chernomyrdin, Russian ambassador to Ukraine (right),
on the Russo-Ukrainian gas crisis (Itogi)

 

There were 27,476 newspapers and 20,433 magazines registered in Russia at the end of 2008. Only 3,500 publications impact the market, and only 1300-1500 publications make money.

 

31 people were hurt in Moscow by fireworks on New Year’s Eve, down from 65 people last year. Fires on New Year’s Eve also went down from 178 to 117.

Vacancy of upscale office space in Central Moscow hit 22.5% at the end of 2008, while the city-wide figure was about 16%, a record for Moscow’s commercial real estate market. Moscow City remains the most expensive: about $1300 per square

meter per year.

 

Capital flight from Russia was $130.5 billion in the fourth quarter of 2008. Exports declined 13.4%, while imports grew just 5.2%. Exports are expected to drop by 35.4% in 2009, to $303.1 billion. Russia’s international reserves declined 26.7% from their August high of $438.2 billion.

 

The Federal Duma will spend R5.54 billion in 2009, or R200 million more than in 2008, but R336 million less than was originally budgeted. Included are R1.8 billion rubles for salaries of Duma deputies and their assistants, up from R1.6 billion in 2008.

 

According to Rosstat, the price for a basic consumer goods basket in Moscow increased 16.5% in 2008. But journalists from Novye Izvestia visited three supermarkets, a city market, and a neighborhood grocery store to gather the 23 basic items out of the basket and found that prices had actually gone up 37%. This is versus a 25% increase in 2007.There were 65.7 million men and

76.3 million women in Russia in early 2008 – a 10.6 million person gap. Women begin to outnumber men from the age of 28, and that gap increases with age. The only two Russian regions where men outnumber women are the Chukotka autonomous district and the Kamchatka region. Some 14% of Russian residents were aged 65 and older in early 2008. In 2007, life expectancy among men rose to 61.4 years – a full one year increase from 2006, while among women life expectancy rose by 0.7 years to 73.9 years.

Russians who

think the most important event of 2008 was

the death of Patriarch Alexei II 41%

the war in South Ossetia 39%

Dmitry Medvedev’s presidency 39%

the financial crisis 38%

 

say 2008 was harder than 2007 46%

…the same as 2007 38%

…easier than 2007 17%

 

feel there are still

difficult times ahead 52%

 

feel the difficult times

are already here 24%

 

are not confident about the future 59%

 

think the Russian media is covering the economic situation

objectively 37%

non-objectively 33%

 

European Ice

Jana Khokhlova and Sergei Novitski claimed their first ice dancing title at the European Figure Skating championships in Helsinki. Meanwhile, defending European champions Oksana Domnina and Maxim Shabalin withdrew from the competition after the compulsory dance program because Shabalin fell and injured his knee, a development some observers saw as indicative of a changing of the guard in Russian ice dancing. 

In pairs competition, Russia took the silver (Yuko Kawaguchi and Alexander Smirnov) and the bronze (Maria Mukhortova and Maxim Trankov), while the top medal went to defending champions Aliona Savchenko (a Ukrainian with a German passport) and Robin Szolkowy. In singles: Alena Leonova took fourth place in women’s, while Andrey Lyutay was the highest ranked Russian male (7th). 

 

Russia in 2018?

Bolstered by its performance at the last European Soccer Cham-pionships (where Russia won the bronze) Russia has decided to bid for the right to host the 2018 World Cup. “We intend to take the first step shortly and ask FIFA for all the necessary documents to apply to host the 2018 World Cup,” said Vitaly Mutko, Russian Minister of Sport, Tourism and Youth Policies, as well as president of the Russian Football Union. FIFA began accepting applications for the 2018 and 2022 World Cups on January 15. Other possible bidders include Australia, England, Qatar, China, Mexico and the United States. Russia (European Champion in 1960 and Olympic Champion in 1956 and 1988) has never hosted a major world soccer event, aside from the 1980s Olympics.

Working Phones

The organizing committee for the Sochi 2014 Olympics in January announced that it had signed its first Tier-One domestic sponsorship deals with Rostelcom and MegaFon. The companies paid some $260 million to be the exclusive domestic telecom and mobile sponsors and providers for the 2014 games – reportedly the largest ever domestic sponsorship deal in Olympic history. In addition, the two companies pledged to invest an additional $200 million in infrastructural improvements in Krasnodar region.

Worldwide Olympic Partners already signed up for Sochi 2014 are Coca-Cola, Panasonic and Samsung.

Bandied About

Sweden defeated Russia 6-1 in the finals of the Bandy World Cham-pionships in Vasteras, Swe-den. It was a turnabout from last year’s result, when Russia defeated Sweden in the finals 6-1, for its 14th world title. The loss broke Russia’s three year winning streak in the championships.

Bandy is very popular in Scandinavia and many countries of the former Soviet Union (Kazak-hstan was a semifinalist this year). Often called русский хоккей (Russian hockey), bandy is played on a sheet of ice roughly the size of a football pitch. Players chase a small orange ball rather than a puck and use sticks similar to those of American field hockey. 

 

Safin to Retire

Russia’s charismatic tennis star Marat Safin (see Russian Life, Nov/Dec 2000) said this will be his last season on the pro circuit. “I don’t want to put too much pressure on myself this year and just want to enjoy my last season,” he said. Safin teamed up with his sister Dinara this year for the Hopman Cup  (the Safins were runner-ups). Safin won the U.S. Open in 2000, defeating beating Pete Sampras in the finals, and claimed the Australian Open title in 2005, defeating Roger Federer in a spectacular five-setter, before disposing of Lleyton Hewitt in the finals. He also was on two winning Russian squads for the Davis Cup (2002 and 2006).