It is not the strong one that wins, the one that wins is strong. Franz Beckenbauer

Transcription

1 S T R A T E G I E S F O R B U S I N E S S I N M O S C O W It is not the strong one that wins, the one that wins is strong. Franz Beckenbauer

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3 A PROPOS Oh football, you are everything! In July 1979, a year before the Olympic Games in Moscow, the Kremlin adopted a secret document. It had a very long name, but the essence of it was simple: to make Moscow look as appealing and presentable as possible for the Olympic Games. According to the document, some Muscovites were asked to take time off and leave the city for the duration of the Games, while other undesirables were simply rounded up and driven outside the city borders. Only people with special permits were allowed to come to Moscow from other cities during this time period. All of this was done not only for the sake of security, but also to make sure foreign visitors didn t see the endless lines in front of stores, which ruined the image of the Soviet capital. In the USSR, a lot of people used to come to Moscow from other regions in order to buy products - like sausage, for example - they couldn t purchase elsewhere. There was even a joke about it: What is long, green and smells like sausage? It s a long, green train that guests take out of Moscow to go back to their cities. During the 1980 Olympic Games, Moscow had an abundance of different kinds of food. You could purchase anything at the store, even things that were usually impossible to get - Finnish salami, different types of cheese, juice, jam and canned beer! Muscovites used to joke that 1980 was the year communism was built in Moscow. The joke was especially funny because Nikita Khrushchev famously promised to build communism by 1980 during a communist party meeting in Unfortunately, this brand of communism only lasted a little over two weeks, from July 19 to August 3, while Moscow was hosting the 1980 Summer Olympics. Now, on the eve of the Confederations Cup and the FIFA World Cup, there is no need to make such elaborate adjustments in preparation for the event. And this isn t just about sausages and other products, which supermarkets all over Russia are packed with these days. The thing is that Moscow has been improving for a very long time, becoming a more comfortable, clean and safe city for both local residents and tourists. The capital has plenty of new roads, new metro stations, parks and squares... Moscow is changing for the better almost every day. No wonder that according to Lonely Planet s Best in Travel 2017 list, the Russian capital is in the top 10 cities to visit. In light of this, it seems strange that some Western politicians and journalists tell stories about aggressive Russians and try to implore others to boycott the World Cup. On the other hand, Russia isn t new to these accusations. It might seem strange, but some people abroad know so little about Russia that they still think bears roam the streets of Moscow! What can I say? Come and see for yourself! Responding to my question about how confident he was that everything will go smoothly during the World Cup, Olympic Champion and Head of the Moscow Department of Sports and Tourism Nikolay Gulyayev said: I am sure that Moscow will host a real football festival, and it will be organized in a superb way. We have everything to make this happen: the city and sports infrastructure that work impeccably, that come together as a single unit. When I say sports infrastructure, I mean the two new stadiums - the Luzhniki Olympic Complex and Spartak. In the interview, which is featured in this issue, Mr. Gulyaev also said that Moscow is expecting around one million guests for the World Cup, which will take place on June 14 - July 15, Sergo Kukhianidze Editor in Chief sergomrk@mail.ru

4 CAPITAL IDEAS Founder: Department for External Economic and International Relations of the Government of Moscow Address: Tverskaya, 13, Moscow, Ph: +7 (495) , Fax: +7 (495) Publisher: National Review Ltd CEO Sergei Oposhnyanskiy Phone.: +7 (495) Moscow Official Mutual business interests stay strong The Russian capital will strengthen ties with Bavaria The exchange of experience continues Moscow and Berlin signed a memorandum on friendship and cooperation 6 9 CAPITAL IDEAS S T R A T E G I E S F O R B U S I N E S S I N M O S C O W Editorial staff: Editor-in-chief Sergo Kukhianidze Production crew of the edition: Elena Egorova (deputy editor-in-chief), Tatyana Akimova, Vladimir Dolmatov, Marina Ershova, Marina Ogorodnikova, Anastassia Paloni, Vladimir Smelov, Marina Urshina Consulting Gennagy Charodeev, Evgeny Khokhlov Design Robert Saifulin Photo editor Victoriya Oposhnyanskaya Page layout Alexander Saifulin Assistant Nadezhda Ratanova With assistance of Moscow Center for International Cooperation CEO: Sergei Anikanov Address: , 68/8, build.1, Baumanskaya str., Moscow, Russia Phone: +7 (499) , editor@mcms.ru Distribution "Trans-Media" Ltd Acknowledgements to: PHOTO 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: editor@mcms.ru. The magazine is registered with at the Federal Authority of Legislative Control in Mass Media and Cultural Heritage Protection. Media registration certificate ФС , issued April 26, 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 A fruitful meeting The Mayor of Moscow met with the Mayor of Paris Vectors of cooperation confirmed For the first time in the history of relations between the capitals of Russia and Iran, Tehran hosted Days of Moscow s Economy, organized by the Department for External Economic and International Relations of the Government of Moscow Moscow-Doha: New horizons A Moscow Government delegation visited Qatar

5 Face to Face Nikolay Gulyayev: We are ready for a football festival Head of the Moscow Department of Sports and Tourism answered our questions in an exclusive interview with Capital Ideas City s graph 19 What s New Government and business Playing to win Moscow is first among Russian regions in terms of public-private partnerships development Moscow in words Nothing Ventured José Campusano Alarcón: We're not afraid of competition On wine, salmon and Luis Corvalan Face to Face Valery Gazzaev: Russia is overdue for a football reform Russia is getting ready to hold two major international athletic competitions - the FIFA Confederations Cup in the summer of 2017 and the FIFA World Cup in the summer of Valery Gazzaev, Deputy Сhairman of the Duma committee on sports, tourism and youth policy ( A Just Russia ), talked to Capital Ideas about legislative changes in this sphere, how the country plans to respond to the anti-doping scandal, and young people s athletic prospects in general. 25 City s graph April-June 2017 CAPITAL IDEAS 3

6 Nothing Ventured Japanese quality with a Russian soul If you re still having doubts about whether or not it s possible to do business in Russia, just look at ISUZU. This company is the perfect testament to the fact that doing business in Russia is great. Suffice it to say that ISUZU is currently the number one foreign company in terms of truck sales Nothing Ventured You can do business in Russia without getting your hands dirty Berlin native Philipp Rowe became a Muscovite right after getting his degree in Germany. In 2007, he decided to start his own business. Today, his company Rufil Consulting, which is located in the center of the city, employs about 20 Russian and foreign workers Nothing Ventured KNAUF Group: Russia remains a strategically important market KNAUF has been a long-term partner of Russia, having established business contacts here all the way back in 1970 s. In 1993, the company started to heavily invest in its business activities in Russia. Janis Kraulis, the head of Knauf Group CIS, talked about the company in an interview with Capital Ideas Nothing Ventured Xu Jiangsheng: We still have a lot of potential in Russia On the Russian auto market, Chery is one of the top three most successful Chinese brands in terms of sales volumes. In an interview with Capital Ideas, Deputy CEO of Chery International Xu Jiangsheng talked about the company s achievements and plans, as well as about his life in the Russian capital Nothing Ventured Ramnik Kohli: It s important to know and love Russia In 2014, phones from the Indian brand Micromax first appeared on the Russian market. In a few years, the company became one of the top three major mobile phone importers in Russia. Ramnik Kohli, head of Micromax in Russia in the CIS, talked about the development of Micromax on the Russian market and his life in Moscow in an interview with Capital Ideas Expert tips Territory of Justified Risks The Frenchman Jean-François Marquaire is convinced that Russian markets are a good prospect for foreign investors. 4 CAPITAL IDEAS April-June 2017

7 Our interview Jun Kondo: I know what Muscovites like Jun Kondo, Head Chef at FumisawaSushi, came to Moscow a year ago at the invitation of the Russian restaurateur Arkady Novikov. He has worked in Canada and China, which means he understands both European and Asian palates. In an interview with Capital Ideas, Jun revealed what s special about Russia and talked about overcoming obstacles Life&Culture Zelfira Tregulova: Art heals the soul A trip to the museum and everything that you get out of that trip helps people cope with problems they encounter in everyday life, said the director of Moscow s Tretyakov Gallery Zelfira Tregulova in an exclusive interview with Capital Ideas This and That Football, Russian style: when will our love for the game yield results? There is no denying that football is an exciting game. But why do Russians enjoy it so much? After all, football is a summer sport and Russia is a northern country! Between past and future Onward... into the Middle Ages! There is no other city in the world that is changing for the best as quickly as Moscow is today, says Jan Gehl, a professor of design and architecture from Denmark Moscow Vocabulary Life&Culture Moscow thaw: from Strauss to KISS We re finally seeing the first warm days that everybody in Moscow waits for in anticipation. Over the long winter months, the city s residents get tired of snow, freezing temperatures, icy roads and slush on warmer days. Now, we are ready for gentle sunrays, flowers and green grass. Everybody feels like singing and finding joy in everything: unique exhibitions, interesting lectures, an opera, a beautiful Viennese waltz or a tour of your favorite band from your university days Life&leisure Time for a pint! An overview of the best sports bars in the city Food&Drink Konstantin Ivlev: Russian cuisine is about much more than just borscht! Konstantin Ivlev, host of the popular culinary show and one of the most famous chefs in Russia, is a connoisseur of Russian cuisine. We asked him whether or not foreigners in Moscow are interested in Russian cuisine. April-June 2017 CAPITAL IDEAS 5

8 MOSCOW OFFICIAL Mutual business interests stay strong The Russian capital will strengthen ties with Bavaria The Moscow government is hoping for closer economic cooperation with Bavaria, Mayor of Moscow Sergey Sobyanin said during a meeting with Horst Seehofer, Minister-President of Bavaria. The meeting was also attended by Deputy Moscow Mayor Natalya Sergunina, Minister of the Moscow Government and Head of the Department of Foreign Economic Activity and International Relations Sergey Cheremin, Head of the Moscow Department of Education Isaac Kalina, Chairman of the Moscow City Duma Alexei Shaposhnikov and other officials.

9 great that in a period of turbulence, we are maintaining ties between two actively developing regions in Europe at the regional level. It s Bavaria has always been one of the most important economic and cultural partners for us. 850 Bavarian entrepreneurs are working and developing their business in Moscow, Sergey Sobyanin said. According to him, interest in business cooperation has not waned, in spite of economic challenges. We can be more proactive in terms of developing relations in the sphere of the economy, relations with business, to restore our former, stronger formats of this type of cooperation. We are ready to develop our relations, the Mayor of Moscow noted. Horst Seehofer thanked Mr. Sobyanin for inviting him to the Russian capital, proposed to continue meeting every year, and invited a Moscow delegation to visit Bavaria. He pointed out that relations between the two regions remain strong in spite of geopolitical tensions. The Minister-President of Bavaria recalled his visit to Moscow last year: Everything that you told us about your city and your city s development was very valuable for us. Horst Seehofer also added that he was very impressed by the healthcare sector. You shared with us that, generally, you are aware of what person can or needs to make appointments with a certain doctor. This was very impressive, he pointed out. The Minister-President of Bavaria also noted that the ministers who were part of the delegation are ready to learn about Moscow s experience and look into the possibility of applying technology used in the Russian capital back home. Sergey Sobyanin also took part in the meeting between Vladimir Putin and Horst Seehofer, which took place at the Kremlin on March 16. I know that, like the last time, you came at the invitation of the Mayor of Moscow and have a lot to do: meetings with business representatives and our colleagues in the Government of the Russian Federation. Bavaria undoubtedly is first in terms of trade and economic ties with Russia among other Federal States of Germany, the Russian president said. Last year, exports from Bavarian enterprises to Russia increased by 4 percent, while exports from other parts of Germany fell by 4.8 percent overall. This is thanks to your efforts, Mr. Minister-President, President Putin said, I hope that this visit will also be helpful in terms of developing our relations. In turn, Horst Seehofer thanked Vladimir Putin for the opportunity to meet, hold talks and cooperate at the federal level. And of course, we continue working with our partner city, the City of Moscow, the Minister-President of Bavaria said. He added that Russia and Bavaria have a great opportunity to continue to expand on the established good relations. Horst Seehofer pointed out that Bavaria finds it very important to expand cooperation in the spheres of science, culture, the economy, and agriculture. April-June 2017 CAPITAL IDEAS 7

10 MOSCOW OFFICIAL The exchange of experience continues Moscow and Berlin signed a memorandum on friendship and cooperation Mayor of Moscow Sergey Sobyanin and Mayor of Berlin Michael Müller signed a Memorandum on Friendship and Cooperation between the Government of Moscow and the Senate of Berlin. The ceremony took place in the Blue Hall of the Moscow City Hall. The talks were attended by Deputy Mayors Maksim Liksutov and Leonid Pechatnikov, as well as Minister and Head of the Department for External Economic and International Relations Sergey Cheremin. An important event took place last year - 25 years of contractual relations between Berlin and Moscow. I hope that today we will sign a Memorandum on continuing this long-term cooperation. Relations between Moscow and Berlin not only date back several decades, but are also mutually beneficial. Trade turnover between Moscow and Germany amounts to about $10 billion. Accumulated investments account for $6 billion. This active cooperation between companies in Moscow, Germany and Berlin continues in spite of certain challenges. After signing the Memorandum, we will continue to exchange experience across various spheres: education, healthcare, culture, management. The es-

11 tablishment of friendly ties between our cities, your visit to Moscow, today s opening of the Days of Berlin Cinema is a major cultural event for Moscow and a further development of our relations. The more we get to know each other, the more open our relations become, Sergey Sobyanin said. The Mayor of Moscow also congratulated Michael Müller on being elected Mayor. Allow me to congratulate you on being elected to the post of Mayor. I understand that this event took place recently, Sergey Sobyanin added. Michael Müller pointed out that relations between Moscow and Berlin have existed for a long time, but signing the Memorandum will give them new impetus and will activate cooperation in the spheres of sci- ence, youth exchange programs and more. I think it s very important that such large European megacities support relations with each other, learn from each other, exchange experience. Berlin is a growing city. I know that Moscow is growing even more rapidly. According to the information I have, the city grows by about 150,000 new residents every year. This brings new challenges in urban planning, residential construction, educational infrastructure and transportation. This gives us the opportunity to cooperate and learn from each other, the Mayor of Berlin said. Russian and German capitals are successfully developing partner relations in terms of the economy and the sphere of education, as well as healthcare and culture. The Days of Moscow s Economy in Berlin and Days of Moscow in Dusseldorf will take place this year. A fruitful meeting The Mayor of Moscow Met with the Mayor of Paris Mayor of Moscow Sergey Sobyanin met with the Mayor of Paris Anne Hidalgo, who was in the Russian capital for a work visit in February. Sergey Sobyanin thanked her for the warm reception of the Moscow Government Delegation in June 2016 during Moscow Days in Paris. During the visit, Sergey Sobyanin and Anne Hidalgo signed a cooperation program between the two capitals for It was an interesting and fruitful trip that gave serious impetus to bilateral relations, the Mayor of Moscow pointed out. In turn, Anne Hidalgo spoke about the hospitality the Paris Delegation has been shown. Moscow is magnificent and picturesque in the winter. Your city is especially beautiful in the evening, when the festive lights are on. It s a good thing that there are more French tourists in the Russian capital, Anne Hidalgo said. The mayors of the two cities also discussed issues related to further cooperation between the capitals of Russia and France. These issues included the exchange of experience and information on preparing for and holding major international athletic competitions, and the expansion of direct contacts between cultural and educational organizations, including student exchanges. She also expressed gratitude to the Government of Moscow for constructive cooperation between the two cities within the scope of the C40 Group. At the suggestion of Anne Hidalgo, who is chairman of the C40 group, one of the next meetings between the mayors of participant cities may be organized in Moscow. The C40 Cities Climate Leadership Group was established in It currently includes 90 of the largest cities in the world with a total population of 600 million people, including Moscow. the main goal of the group is to draw attention to climate change issues and city initiatives aimed at reducing carbon dioxide emissions. April-June 2017 CAPITAL IDEAS 9

12 MOSCOW OFFICIAL Vectors of cooperation confirmed For the first time in the history of relations between the capitals of Russia and Iran, Tehran hosted Days of Moscow s Economy, organized by the Moscow Department for External Economic and International Relations. A Delegation of the Moscow Government, led by head of the Department - Sergey Cheremin, visited the Iranian capital The delegation also included directors of the city s leading companies, which participate in Moscow s key infrastructure, transportation, environmental, healthcare and IT projects. On the first day, a business forum was held during which topics concerning the development of megacities, creating a comfortable environment and effective management were discussed. Almost 1,500 participants had the opportunity to learn about Moscow s accomplishments and listen to speeches by internationally acclaimed speakers in the sphere of entrepreneurship and management. Members of the Moscow Government Delegation took part in the exhibition dedicated to Iran s accomplishments in the production of various manufacturing equipment. An official meeting took place between Sergey Cheremin and Tehran s Deputy Mayor of Transport and

13 Traffic Maziar Hosseini, who actively supported the Russian capital s initiative to develop cooperation in the sphere of developing and implementing Tehran s transportation strategy, proposed by employees of the Center for Traffic Management of the Moscow Department of Transportation. During the conversation, the Iranian side showed an interest in innovative solutions and technologies introduced by the Moscow Mayor's office in the reconstruction of streets, provision of public services in electronic form, and improvement of the city s residential services. The next day, Tehran s Chamber of Commerce hosted presentations dedicated to Moscow s development strategy. Sergey Cheremin thanked the Mayor of Tehran Mohammad Bagher Ghalibaf for help in preparing the Days of Moscow s Economy, pointing out the roles both embassies played in the event. The Minister invited the leaders of the Iranian capital to take part in the Moscow Urban Forum and to hold Days of Tehran s Economy in Moscow. Over 100 Iranian entrepreneurs and heads of major companies learned about the implementation of state target programs in Moscow. Infrastructure projects that are appealing to investors were presented as well. In turn, the Iranian partners talked about their achievements in the sphere of city solutions. Questions of increasing trade turnover and supporting export-import operations were discussed by the Moscow Government Delegation with the Deputy Mayor of Economic Relations and Finance of the Islamic Republic of Iran, who supported the idea of supplying technological solutions to Tehran s municipal sector under Iran's sovereign guarantees. Questions of cooperation between cities as financial centers were discussed with the leadership of the Iranian stock exchange. Sergey Cheremin offered Tehran to support Moscow s initiative in establishing and International Financial Center Alliance. The President of the Iranian stock exchange expressed a lot of interest in this type of cooperation, which, in his opinion, would help to reach a new level of cooperation with global IFCs. Within the scope of Days of Moscow s Economy, a productive meeting took place between the Moscow delegation and representatives of major pharmaceutical companies under the leadership of Iran s Ministry of Healthcare. During the meeting, the two sides agreed to explore prospects of localizing the production of medicinal products for Russian manufacturers, as well as the possibility of establishing a plant for producing advanced medicinal products in Russia. The two sides agreed to send an Iranian pharmaceutical business mission to Moscow in the near future. Numerous business events illustrated the growing investment appeal of both capitals and tangible interest in developing business cooperation between major Russian and Iranian companies, as well as between representatives of small and medium-size businesses. For the first time, the capitals had the opportunity to take part in such major events that including official meetings, business discussions, round tables and cultural programs. April-June 2017 CAPITAL IDEAS 11

14 MOSCOW OFFICIAL Moscow - Doha: new horizons A Moscow Government Delegation Visited Qatar The East is a delicate matter. This formula is perfectly applicable to relations between Moscow and Doha, which went through a difficult period recently. But it looks like these challenging times are behind us. In any case, this is the conclusion one can draw when looking at rekindled contacts between representatives from Russia and Qatar. At the end of November of last year, Doha hosted a conference entitled Moscow - a city that s convenient for business. It took place at the Qatar Chamber of Commerce. A Moscow government delegation, headed by Minister and Head of the Department for External Economic and International Relations, visited Doha in order to participate in the event. The fact that the hall in which the presentation took place was completely packed speaks to how interested Qatar is in meeting with the Muscovites. Aside from interest, there was also a sense of excitement. After all, it s not that often that business people from these two countries meet. But this excitement passed as soon as the conference started. Everything went smoothly. Vice President of the Qatar Chamber of Commerce Mohamed bin Twar Al Kuwari gave the opening speech at the conference. He announced that he is happy about improved relations between the two

15 countries, which open great opportunities for cooperation between businessmen. He noted that Qatar is currently going through a real economic boom, so there are plenty of areas for business cooperation. Qatar is one of the wealthiest countries in the world. According to the International Monetary Fund, the country has been in the lead for several years in terms of GDP per capita. Qatar ranks third in the world in terms of natural gas reserves, is the sixth largest exporter of natural gas and is a major exporter of oil and oil products (ranked 21st in the world). Qatar is part of the Organization of the Petroleum Exporting Countries (OPEC). In response, Sergey Cheremin noted that political and economic relations between Moscow and Qatar have recently improved. We would like to maintain this trend, the Minister said. He recalled that in January 2016, Emir of Qatar Tamim Bin Hamad Al Thani met with the Mayor of Moscow Sergey Sobyanin during an official visit to Russia. During their meeting, the subject of Qatar investors participating in the development of transport infrastructure and the construction of transfer hubs came up. Aside from transport, there are plenty of other spheres in Moscow that can attract businessmen from Qatar. In spite of the crisis, the city is rapidly developing and not giving up on its ambitious projects, the head of the DVMS pointed out. This includes the construction of the Moscow Central Circle, new metro stations, Zaryadye park, and a complete transformation of the banks of the Moscow River, which stretches 80 kilometers outside of Moscow. If the only thing next to the river right now is highways, in the near future 76% of this space will be dedicated to various cultural and leisure facilities. The conference was also attended by the Russian Ambassador to Qatar Nurmakhmad Kholov, representatives from Sberbank, and directors of Russian companies, financial and investment groups. After the conference at the Chamber of Commerce, dialogue between Muscovites and Qatar business representatives continued at an investment fund and then at the mayor s office, where the sides talked about changes in relations between the two countries and new horizons. In the evening, an official dinner took place at a fish restaurant located on the picturesque shore of the Persian Gulf. Everybody at the table enjoyed the meal, talked, joked and laughed. April-June 2017 CAPITAL IDEAS 13

16 FACE TO FACE Nikolay Gulyayev: We are ready for a football festival Head of the Moscow Department of Sports and Tourism answered our questions in an exclusive interview with Capital Ideas. These days, it seems Olympic champion Nikolay Gulyayev needs just as much stamina as he did back when he was winning gold medals for speed skating. And no wonder. The Moscow Department of Sports and Tourism, which he became in charge of at the end of the last year, is coordinating all programs related to the Confederations Cup and the FIFA World Cup next year. Mr. Gulyayev is difficult to catch in his office: he is always busy with meetings and other errands. We met him at the Chertanovo football school, which was hosting an event in honor of 100 days before the opening of the Confederations Cup. After getting out of the car, the head of the department immediately headed toward the football field, where young football players were practicing. He joined them with ease, and even managed to score! 14 CAPITAL IDEAS April-June 2017

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18 FACE TO FACE Mr. Gulyayev, it seems like you re no stranger to football. Much like a lot of other kinds of sport. I think that the head of this type of department needs to set a personal example in order to motivate people to exercise and play sports. You re going to tell me that you do your morning exercises too... to the Confederations Cup and the World Cup, and there are a lot of them: transportation, safety and so on. The Sport Moskvy program has not been cancelled, and we continue to work on it every day. In other words, we continue to work on everything we used to work on before. This in- Yes, I do, but an abridged version, since my work doesn t allow me to spend much time on it. Without exercise it would be tough to stay in shape, which I need to stay in good health and handle all of the issues the department needs to resolve before the upcoming events. Moscow isn t new to hosting important international competitions, but the FIFA World Cup is special. Otherwise, the city government would not have created the special department that you re in charge of, right? I ll clarify right away: the department wasn t created specifically for the World Cup. The government simply added Tourism to the existing Department of Physical Education and Sports. As stated in the order issued by Mayor of Moscow Sergey Sobyanin, this was done in order to effectively prepare for and conduct different international competitions, including the Confederations Cup and the FIFA World Cup. Right now, this is one of our priorities. We are in charge of coordinating all programs related 16 CAPITAL IDEAS April-June 2017

19 cludes the development and promotion of physical education and sports in Moscow, as well as making the Russian capital more appealing for tourists with the goal of increasing the number of travellers coming to Moscow. Combining sports and tourism is a sound decision. They really do go hand in hand. Of course. Fans are tourists. When fans travel to a foreign country for a game, they visit the local attractions, go to museums, and visit cafes and restaurants. By the way, some people go to games for the sole purpose of getting to know a new country and being part of the festive atmosphere. It s a truly unforgettable experience. Anybody who plans on coming to Moscow will get to experience this amazing atmosphere to the fullest. How many fans are you expecting to come to Moscow for the World Cup? I think that about a million guests will visit Moscow over the course of that month. What worries you the most right now? To be honest, there is nothing specific that I am constantly worried about. There isn t anything that s troubling me. We re doing everything according to our schedule, and everything is going as planned. Of course, like with any other project, not everything goes smoothly. But trust me, these are minor technical challenges. Every day, as we overcome them, we are confidently moving toward our final goal - successfully hosting an international football festival. Aside from Moscow, the matches will be taking place in several other Russian cities. Is there any competition between cities, are they trying to one-up each other in terms of being the best hosts? I ll put it this way: we will be hosting the most important matches. The Russian capital will be hosting the opening match and the final. In your opinion, have the negative attitudes of Western countries toward Russia impacted the World Cup at all? I don t think so. I ll give you an example. A record number of tourists visited Moscow over the Christmas holidays (from the middle of December to the middle of January), including tourists from abroad. So even if there is somebody in the West trying to say negative things about us, we re saying: Guys, our doors are open! Come and see everything for yourself!. According to international assessments, by the way, Moscow is one of the safest capitals in the world, not to mention it s a clean and beautiful city. April-June 2017 CAPITAL IDEAS 17

20 FACE TO FACE You probably know that England recently aired a documentary where fans are warned to be careful with Russians... That s not right. But anyway, they say all kinds of stuff about us in the West! Up until recently, they thought there were bears roaming our streets here! So we re telling everybody: Don t believe what they say in newspapers and show on television about Russia! Come visit us and figure things out for yourself!. Moreover, I know for certain that those who have visited Moscow will tell their friends how great it is here. After all, Moscow is more than just the Red Square and the Kremlin. Recall how we hosted the Champions League final in Moscow a few years ago, which had two English teams with fairly aggressive fans. Back then people also doubted whether or not Russia could host a match like this. But we did it, and everything went well. Are you drawing on international experience during your preparations for the Confederations Cup and the World Cup? Of course. Although compared to other cities Moscow has a lot of experience in hosting large-scale international athletic and cultural events. Still, it would be foolish to turn a blind eye on things that have worked well for others. We went to the FIFA World Cup in Brazil for this purpose, to see what works and apply it here. So fifteen months before the start of the World Cup, you are one hundred percent confident? I am sure that Moscow will host a real football festival, and it will be organized in a superb way. We have everything to make this happen: the city and sports infrastructure that work impeccably, that come together as a single unit. When I say athletic infrastructure, I mean the two new stadiums - the Luzhniki Olympic Complex and Spartak. And last question: who will be playing at the World Cup final? Those who deserve it most! (Smiles) 18 CAPITAL IDEAS April-June 2017

21 Preparation program for holding the 2018 FIFA World Cup in the Russian Federation CITY S GRAPH Ministry of Sport of the Russian Federation Construction and renovation of 12 stadiums ,8 Mln. rub Ministry of Transportation of the Russian Federation Transport infrastructure modernization Road network Passenger transport infrastructure ,5 Mln. rub Federal Air Transport Agency Renovation and modernization of 11 airports ,3 Mln. rub Federal Tourism Agency Construction of 60 hotels and hotel complexes 65471,0 Mln. rub April-June 2017 CAPITAL IDEAS 19

22 FACE TO FACE Valery Gazzaev: Russia is overdue for a football reform Russia is getting ready to hold two major international athletic competitions - the FIFA Confederations Cup in the summer of 2017 and the FIFA World Cup in the summer of Valery Gazzaev, Deputy Сhairman of the Duma committee on sports, tourism and youth policy ( A Just Russia ), talked to Capital Ideas about legislative changes in this sphere, how the country plans to respond to the antidoping scandal, and young people s athletic prospects in general. Mr. Gazzaev is also a former football player and coach, as well as the former President of FC Alania. As a coach, Mr.Gazzaev has won the most titles in terms of the number of medals and cups in the entire history of Russian football. He was the only Russian coach to lead his team to victory at the UEFA Cup in Mr. Gazzaev, how is the State Duma preparing for the FIFA Confederations Cup and the World Cup? I think you may be misunderstanding yes, the Russian parliament does have its own football team, but in my opinion we have a long way to go before taking part in the Confederations Cup or the World Cup. We did hold the Parliament Games recently. There was a team from Latvia, Belarus, Serbia, Kazakhstan, and Russia. Russia won, so judging by these results anything can happen. I m joking, of course. But on a more serious note, Russian football is in need of reforms, including legislative reforms. We are already working on this. In November 2016, for the first time in the history of modern Russia, we adopted a law that de- fines the criteria for professional and popular sports, and, most importantly, outlines how they are financed. In terms of football, we should have started seriously preparing for the World Cup at least seven years ago. And had we adopted the reforms I suggested in 2014, everything would be different. There would have been a revival in Russian football. And there wouldn t be such a problem with recruiting! When there are no results in junior leagues, there are no additions to the national team either. In your opinion, what needs to be done? Reforms are long overdue for Russian football. We need to cut down the number of professional teams. We cur- 20 CAPITAL IDEAS April-June 2017

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24 FACE TO FACE rently have 105 professional clubs, which is more than anywhere else in the world. We have to stop chasing after quantity and focus on the quality of the game. The Premier League and the First League should be professional, and the rest should be regional teams and semiprofessional teams. Our goal is to focus on quality. The First League needs to operate according to a territorial principle. This will allow us to cut down on transportation costs. We need to establish three First Division zones - Center, West, East. We also need to expand the Premiere League to 18 teams. In essence, we need to develop a professional football mechanism and incorporate all regions into a system of professional, junior, popular and amateur football. Undoubtedly, a lot of problems come back to funding. I believe that professional clubs should only be funded through private investments or through public-private companies and corporations. In order for this to happen, there need to be tax benefits at the legislative level for people who invest in football in Russia. We also need to improve the quality of football programs for children and young people. This is a nation-wide task for all regions. As the World Cup approaches, it would be great to launch a series of programs across three or four national TV channels dedicated to this event. There will be fabulous stadiums, the best teams in the world are coming - this is a great reason to promote football to children. What do you think about the campaign to integrate the GTO complex in Russia? In our country, sports has traditionally served a social and educational function. The Russian sports development strategy aims to involve 40 percent of Russian citizens in sports by The positive trends we are seeing today give us every reason to expect that this goal will be achieved. Today, 43.5 million people regularly go to the gym, which is almost a third of the country! During his speech at the Russia - country of sports forum, Vladimir Putin said: Undoubtedly, we are going to welcome those who take on the responsibility of establishing neighborhood teams, developing sports at schools and universities, and holding competitions. We will support athletic organizations and the revival of the GTO movement. Last year alone, 584,000 students took the GTO challenge. 11 percent of them completed the challenge with a gold badge. Funds from the state budget and other sources have been used to establish about 2,500 testing centers. In the near future, another 400 centers will open at the municipal level. I bring these numbers up for a reason. In my opinion, they serve as proof that the GTO complex, which was established at the President s initiative, is becoming a popular trend for young people. Due to the anti-doping scandal, is it possible that Russia will lose the right to host the World Cup? There has never been as much prejudice toward our country from international athletic organizations as in Unfortunately, we have to conclude that sports has become a tool of political pressure. And there is an explanation for this: Russia is becoming one of the leading political players. Our President has a lot of authority and influence both domestically and internationally. Of course this provokes our opposition. Similar processes take place in professional sports. For many people, the accomplishments of our athletes at the international 22 CAPITAL IDEAS April-June 2017

25 level are like a sharp knife Plus there is competition, political bias and just regular jealousy. So far as the World Cup is concerned, I don t think it will come to such a critical situation. I am sure that common sense will prevail in the end. After all, reasonable people understand that without the participation of a country like Russia major international competitions don t make much sense. It was recently announced that the State Duma has established an expert committee to analyze the McLaren report. What are some of the preliminary conclusions? There are a lot of questions when it comes to the notorious report. For example, why does such thorough screening only apply to Russia? Incidentally, this obvious bias causes a lot of indignation among famous foreign athletes and sports figures as well. Doping is an international problem. It is necessary to develop the rules that would apply to everybody who participates in international athletic competitions. This is what our President talked about in his Address to the federal Assembly. From our side, we have already accepted all the relevant documents at the legislative level. Our foreign colleagues, on the other hand, don t seem to be in a hurry to do so. McLaren s second report basically repeats the previous statements. Again, there are no specifics, no proof, just abstract words. Yes, there is a problem and it needs to be addressed. I think that athletes who test positive need to be excluded from competitions and sanctioned. But what do national teams have to do with this? Like a lot of his colleagues, McLaren is using old demagogic tricks, substituting one concept for another. Within the scope of implementing the President s Address, are you preparing an initiative to amend the Criminal Code of the Russian Federation in terms of establishing responsibility for falsifying doping tests? Last year we passed a law that establishes criminal liability for doping. The next step in this regard will be introducing criminal liability for falsifying doping tests for athletes. I want to point out that stricter laws are not the end goal for us. Establishing criminal liability is more of a preventative measure. After all, this means the end of any athlete s career. New amendments to the Criminal Code will be introduced and considered by the Russian parliament in It s been announced that WADA wants to help Russia develop a system to combat doping. What do you think about this? I ve already said what I think of this organization. Right now, it is politically biased and I have doubts about how sincere its intentions are. But we re open to working with them... The President s Address to the Federal Assembly talks about establishing a national program to combat doping, which would allow to tackle this problem at the international level. Moreover, the committee headed by Vitaly Smirnov has established a dialogue with the President of the International Olympic Committee, the director of WADA and other international organizations. Russia is a great athletic power. I think we need to change our communication style with WADA. We shouldn t be on the defensive. We need to offer our own solutions to the problem. What do you think about Russian athletes being banned from qualifiers to the 2018 Paralympic Games? What plans and proposals do you and your colleagues have? The International Paralympic Committee has declined the application for admission of Russian Paralympians to the 2018 Winter Paralympic Games in Pyeongchang against our concrete guarantees. The formal reason is the anti-doping sanctions. On February 8th, we discussed this situation with the Deputy Minister of Sports of the Russian Federation Pavel Rozhkov during a committee meeting. I have suggested that we prepare an appeal to the the International Paralympic Committee and invite IPC representatives to Russia so they can see for themselves the work being done with respect to anti-doping legislation and the strict regulations Russian athletes are subjected to. Some of my colleagues aren t sure they will come. In this case, declining our invitation would show the whole world that there is a political agenda behind this suspicious process. But we have to invite them. After all, Western mass media is very skillfully adding fuel to the fire around this conflict with the Paralympics and Russian sports in general. In my opinion, any normal person would have no doubt that paralympians are extremely brave people who push themselves to the limit both spiritually and physically. I consider any attempt to prevent them from achieving their dreams to be the height of cynicism and dishonesty. In your opinion, is there hope that the new US President Donald Trump will put an end to the sanctions imposed on Russian athletes? In my opinion, we ve been paying too much attention to the new US president lately. Of course I greatly respect the choice of the people in the US, but I think that Russia and our leader have enough international authority and opportunities to look after our own na- April-June 2017 CAPITAL IDEAS 23

26 FACE TO FACE tional interests. If Donald Trump puts an end to this campaign of demagogic lies and political blackmail, that will be great. But I wouldn t advise anybody to count on it. Russia has proven several times that our domestic and foreign policy is independent. Yes, we are ready for a constructive dialogue regarding the most pressing issues of today. Are you preparing initiatives to guarantee safety during athletic events? Recently the State Duma adopted in the first reading a draft federal law No "On Amendments to the Code of the Russian Federation on Administrative Offenses." In order to avoid misunderstandings in the future, I ll tell you what it says verbatim: to establish increased administrative responsibility if the violation of the rules of conduct in official sports competitions is ill-mannered. These violations include offenses that pose a threat to the violator s own safety, life, health or the safety, life, health of others who are at the venue of the official sports competition or on the adjacent territory. Also, violations that result in the delay or termination of a sports event will be included here. Penalties: fine of up to 20,000 rubles or administrative arrest up to 15 days with the imposition of a ban on visiting venues of official sports competitions of up to 7 years. If the ban is violated, the fine will be raised to 50,000 rubles or an administrative arrest of up to 15 days will be applied. In cases where a gross or repeated violation of the rules of conduct at an official sports event is committed by foreign citizens or stateless persons, it is proposed to establish a fine of up to 20,000 rubles with the possibility of administrative expulsion from the Russian Federation. In this case, the expulsion measure can be replaced by the court with an administrative ban on attending sports competitions for up to 7 years. In my opinion, the adoption of this legislative act is especially important on the eve of the 2018 World Cup and the 2017 Confederations Cup. Major events like these will attract fans from all over the world, and it is our obligation to ensure an appropriate level of safety during the competition. You recently submitted a bill to establish criminal responsibility for desecrating the coat of arms and flag of the subjects of the Russian Federation on par with the state coat of arms and flag to the State Duma. What is happening with this bill? I wouldn t focus on so-called football fans alone. The measures I ve proposed are much wider in scope. Our country is a multinational state and the people who live here belong to 130 different nationalities. Russia s history, pride and glory is a history of different lands coming together and the peaceful coexistence of different nations, cultures and languages. The national symbols of all peoples should be protected by Russian law equally. The law that is in effect now protects the flag and coat of arms of the Russian Federation. It protects the honor and historical dignity of our homeland, which is embodied in our country s symbols. At the same time, symbols of the subjects of the Russian Federation aren t afforded the same level of protection. When modern-day vandals cynically desecrate the flag of some region in front of a camera, tearing it in half, stomping on it, setting it on fire and using it for their propaganda purposes, the most they have to fear is being accused of petty hooliganism, violation of public order and fire safety regulations. Wouldn t you agree that this a shortcoming of the current legislation? Many subjects of the Russian Federation have established in their legislation on administrative offenses responsibility for desecrating official symbols of the region - insulting, cynical inscriptions, destruction or use of the emblem or flag in a way that implies mockery. At the same time, it is clear that these measures are not enough. In my opinion, only the Criminal Code is a reliable guarantee of adequate protection against encroachments on sacred symbols that represent home for some citizens. In addition, it is only possible to stop such actions if they are committed in the territory of another RF subject through federal law. I m proposing to establish legal protection of regional symbols along with administrative responsibility for desecrating the national symbols of Russia. And, in my opinion, this is logical and fair. In general, my proposals were approved by most colleagues. Although I will admit there were objections. I will take into account all sensible remarks What is your forecast for the 2017 Confederations Cup and the 2018 World Cup? I can say that experience with holding large-scale athletic competitions such as the Winter Olympic Games in Sochi gives us confidence that all of the necessary infrastructure will be prepared at the proper level. The organizational part also doesn t cause any concerns. And I really hope that our national team will resolve its internal issues and play a great game. A World Cup at home gives us the opportunity to demonstrate to the whole world that Russia is a great athletic power! We simply don t have the right to miss this chance! 24 CAPITAL IDEAS April-June 2017

27 CITY S GRAPH 10th FIFA CONFEDERATIONS CUP June 17 - July 2, Russia For the first time, three teams representing one Confederation (UEFA) will take part in the FIFA Confederations Cup Brazil The tournament brought together four teams that had won the World Cup at different times - Uruguay, Italy, Brazil and Spain South Africa The first truly high-profile tournament to take place in Africa. Brazil won for the second time in a row South Korea/Japan For the first time, the Confederations Cup was used as a rehearsal for the FIFA World Cup France The French became the first team to retain the title they had won in Germany The last tournament in which Australia represented Oceania. In 2006, the Australians joined the AFC Mexico The first tournament to take place outside of Saudi Arabia. A total of 8 teams played in the tournament Saudi Arabia The tournament gets a new name - FIFA Confederations Cup - and a new format: champions from each FIFA confederation are invited to play, along with the host country team and the winner of the last tournament Saudi Arabia The number of participants grew to 6 teams, including teams from Asia and Europe Saudi Arabia Four teams took part in the first intercontinental tournament, which was called King Fahd Cup.

28 Fan zone at 2018 FIFA World cup the World Cup, other than the stadiums, Nikolay Gulyev said. The FIFA fan festival will be located across from the Lomonosov MSU building. The platform at Vorobyevy Gory will open two hours before the beginning of the first match and close after the last game of the day. The fan zone will have commentators for the matches for the entire 25 days of the championship. The area will also have special places in the front rows for people with disabilities. In 2018, Moscow will become the center for the World Cup. The Big Sports Arena at Luzhniki and the Spartak Stadium will serve as the official stadiums for the matches. The World Cup will take place on June 14 - July 15, The Confederations Cup, which serves as a kind of practice round for national teams, will take place at the Spartak Stadium on June 17 - July 2, At the end of 2017, the final draw for the 2018 FIFA World Cup will take place in Moscow. A 140 square meter media screen will be installed at Vorobyevy Gory for the 2018 World Cup. The screen will show live broadcasts of all FIFA matches. The screen will serve as a central point for the festival s fans. Below will be a stage that will host performances by Russian and foreign entertainers. Free Wi-Fi will be available throughout the entire fan fest territory. According to the head of the Moscow Department of Sports and Tourism Nikolay Gulyaev, the stage will be decorated with elements that symbolize football and the City of Moscow. The fan fest will undoubtedly be the best place to spend time during 870 hotels receive ratings The area will have an information center for tourists with bilingual staff who will be able to talk to guests in Russian and English, and will have information about the most popular famous attractions in Moscow and Russia in general. Fans will also have an opportunity to visit the biggest souvenir store with 2018 World Cup memorabilia. It will be located either inside of the fun zone or at the entrance and will feature brand name clothes, t-shirts, footballs and other souvenirs. Moreover, the FIFA fan festival will have a food court and stands where tourists will be able to buy matryoshkas, Khokhloma crafts and much more. FIFA will finalize the final list of products that will be on sale. Free buses from Kievskaya metro station and Luzhniki Stadium will transport guests to the fan zone. They buses will be able to transport 2,500 people per hour. The shuttles will most likely be decorated with FIFA logos. Cyclists will be able to park their bikes at the bike parking lot in front of the fan zone. The fan zone at Vorobyevy Gory will be able to accommodate 40,000 fans and its total area will encompass 36,000 square meters. There will be festival platforms across 11 cities, where 267,000 fans will be able to cheer their teams on at the same time. All Moscow hotels have been rated in preparation for the 2018 FIFA World Cup. 870 hotels with a total of 58,100 rooms received ratings, ranging from five stars to no stars. 27 hotels in the capital received 5-star ratings, 74 hotels were rated 4 stars, and 184 hotels were rated 3 stars. 98 hotels were rated two stars and another 40 got one-star ratings. Another 447 hotels, including 230 hostels, received no stars. Hotels are obligated to renew the ratings once every three years. We need the classification system in order to provide guests with an accurate picture of the kind of service they are getting. If a hotel doesn t meet the requirements of the rating it proclaims to have, the rating will be lowered, explained Nikolay Gulyaev, head of the Department of Sports and Tourism. He mentioned that hotels located outside of Moscow will also be used during the championship, and will make up another 15,000 rooms. Temporary hotels can also be set up on ships along the Moscow River. In other words, there will definitely be enough room to accommodate fans. 26 CAPITAL IDEAS April-June 2017

29 Information stands on wheels information stands on wheels will be installed in Moscow for the 2017 Confederations Cup. the information 37 stands will be staffed with volunteers who speak English and will be able to give the capital s guests directions. The mobile information stands will be located outside the ring line metro stations, as well as outside of Biblioteka Imeni Lenina, Okhotny Ryad and Lubyanka metro stations. There will also be stands at the railways stations and airports in Moscow. A total of 1,850 city volunteers and about the same number of organizational committee members will be working during the Confederations Cup. Volunteers will greet guests of the capital, take part in holding festivals, talk to journalists and assist medical staff. The volunteers will be the first people fans see when they arrive in Moscow. According to the Mosvolonter resource center, the mobile information stands will be operating for the duration of the Confed- erations Cup (June 17 - July 2, 2017). The volunteers will assist the capital s guests from early morning into the late evening. About 140 volunteers will be recruited for this task. The volunteers are entrusted with the important task of making the guests feel welcome. The city volunteers will do more than just give directions to the stadium that will be hosting the matches; they will recommend museums, parks and other tourist attractions in the city, said Oleg Dyachenko, head of the city volunteer program at the Mosvolonter resource center. GADGET STUDIO has opened its doors on Tverskaya Street. The establishment features menus on tablets, free high speed Wi- Fi and wireless chargers for all gadgets. It is a restaurant-pub, a coworking space and a hi tech showroom where you can try out and purchase the latest gadgets. Moreover, the restaurant will host live broadcasts of presentations for new Apple products and other hi-tech events. The restaurant is located across two floors. The first floor has areas for lectures and coworking spaces, while the second floor houses a restaurant with a bar and a stage. The information stands will be decorated in the same style as the tournament. Tourists will recognize them by the official logo of the competition - a cup decorated with firebird feathers. The stands will have signs in English that say Information. The volunteers will be dressed in bright clothes with the word Volunteer written on the back. The first gadget restaurant in the world opens on Tverskaya There are restaurants for hipsters, designers and other groups, but nothing for tech fans yet. I want to watch a presentation for a new iphone, like other people watch football: at the bar and with a good translation, founder of the project nikolai Turubar explained. According to him, the restaurant s menu will include cocktails like Blue Screen of Death, Zuckerberg and Dial-up. According to the project s website, anybody can take part in the project s development by investing a specific sum of money. The minimal investment amounts to 30,000 rubles. The restaurant s founders claim that over a million dollars have already been invested into the project. April-June 2017 CAPITAL IDEAS 27

30 Synchronized swimming olympic center at ZIL other facility - a water entertainment center called Arena of Legends. The total area of the center will amount to 28,500 square meters. The center is a single building with several gyms, swimming pools, utility rooms and an outdoor pool. The five-story building will have two main functional blocks with separate entrances: The Olympic Synchronized Swimming Center named after Anastasia Davydova, which will be a part of the Olympic reserve athletic school Yunost Moskvy A water entertainment center with fitness and spa centers The construction of the Synchronized Swimming Olympic Center named after Anastasia Davydova at ZIL has been completed. At the Order of the President, a synchronized swimming center has been erected in Moscow. It is a modern facility, one of the best in Russia and the world. This makes sense, since athletes from Moscow make up 90% of our national synchronized swimming team. Our national team has been the best in the world for the past 20 years and there are about 1,500 synchronized swimmers in Moscow. This wonderful athletic center, of course, will give impetus to these efforts. And I think that Moscow athletes will bring joy to their audience for many years to come, Sergey Sobyanin said during his visit to the center. The Mayor of Moscow thanked Olympic champion Anastasia Davydova for her initiative in the establishment of a new center, and expressed his gratitude to the investors as well. Anastasia Davydova, Director of the Olympic Center for Synchronized Swimming, noted that the center has all the equipment necessary to train synchronized swimming teams and athletes. The Olympic Center for Synchronized Swimming is an investment project and an example of a private-public partnership. The investor is currently in the process of constructing an- New hotel and business complex A new hotel and business complex will complete the business cluster on the first kilometer of the Rublevo- Uspensky highway. The total area of the building will amount to 135,000 square meters. The building will house a business center and a four-star hotel. The Olympic Synchronized Swimming Center named after Anastasia Davydova is equipped with: two pools (for competitions and training, 30 x 25 meters and 3 meters in depth) bleachers that can accommodate 450 people acrobatic room general fitness room two choreography rooms (150 and 100 square meters in area) medical and recovery center 22 rooms for temporary housing athletes conference hall two cafeterias and a cafe The water entertainment center will be located on a 13.5 square meter area and will house: an indoor 50 x 22 meter, 2 meter deep pool an outdoor pool with a water entertainment area for children and adults a 35 x 25 meter gym a spa center with rooms for massage, physical therapy and light therapy a cafeteria and two fitbars. All construction and installation work at the facility has been completed and work on the facade is currently in progress. The center should be completed in Q Construction will begin in 2017 and is scheduled to be completed in The business park currently includes the administrative and business center Pallau RB (with a total area of 56,000 square meters) and the Porsche center, which is the biggest sportscar center in Europe. 28 CAPITAL IDEAS April-June 2017

31 New two-story trains in Domodedovo This year, Aeroexpress will start running new two-story trains to Domodedovo. On March 7, an additional platform and a temporary terminal began operating at the airport. Five two-story trains have already been delivered to Russia and another 6 are expected in the middle of the year. The train cars were put together specifically for Russia, and the engineers took into account extreme weather conditions. The cars meet all safety regulations and requirements. The construction of another platform and new passenger terminal are underway. It will be the second terminal in Domodedovo and will be linked to the existing complex. After reconstruction, the airhub will double in size and the area of the terminal will increase to 500 square meters. The airport capacity will be 45 million passengers per year. Construction work takes place around the clock and the facility will be completed on time. The terminal will welcome its first passengers in Gastronomic NEWS Bolshoy Patriarshny Pereulok 8. The chef s resume includes working at Michelin star restaurants and taking part in Alain Ducasse s projects in France and Monaco. For the past few years, the Sardinia native has been successfully working in Moscow, specializing in meat dishes. Karlo Greku decides what he s going to sell at his store every day. He picks the suppliers himself. Every day from 11.00am to 11.00pm, you can come here to find top quality meat: ribs, wings, tongues, minced meat, sweetmeats, meatballs and much more. There is also house marinade and an exclusive collection of sauces - barbeque and salsa for beef and spicy sauce for mutton. There are also condiments (a mixture of peppers, sea salt with spices, Himalayan salt) and olive oil (spicy, with rosemary, with Provencal herbs). Chef Karlo Greku has fulfilled his dream. He has opened a meat stand called BUTCHER, modeled after Italian and Spanish stores and located at The store also sells pastrami, raw duck, sausages, pelmeni of various kinds, pates, cheeses, olives, Uzbek tomatoes and red onions. There is a 20% discount in the evenings. TARTARIA is a Scandinavian and masculine project. The main ingredient of the restaurant is meat: beef, lamb, venison and more. The chefs cook on a stage and guests get to watch the cooking process while enjoying their meals. The menu includes ten tartars, the best steaks, a couple of fish dishes and a few options for vegetarians. There is a selection of thirty wines, both red and white, which are perfect to enjoy with meat. Just a few glasses and you ll feel like you re in a raw wine bar somewhere in Copenhagen. April-June 2017 CAPITAL IDEAS 29

32 torical Museum. Beluga, a Russian cuisine restaurant and a caviar brasserie opened by Alexander Rappoport, is located right above the famous Dr. Zhivago, on the second floor of Hotel National. The menu was put together by Evegeniy Mesheryakov, who perfectly combined the traditions of Russian cuisine, his own cooking techniques and original presentations! A unique gastronomic attraction called BELUGA with a phenomenal view of the Red Square and the State His- Here, you will find a wide selection of traditional Russian dishes and new interesting combinations, as well as sandwiches with black caviar that evokes pleasant nostalgia. By the way, it would not be an exaggeration to say that this restaurant has the most elaborate caviar bar in the world! It features a plethora of items that can be the main dish and an addition to a main dish as well. Beluga also offers guests salo made out of toothfish and stellate sturgeon. By the way, the chef salts the sturgeon himself. The national northern dish, suguday of whitefish, is served with onion caviar and potato rocks, and the beloved kievskaya burger is transformed into an eskimo. TOCHKA DZI is a new street food project on Tsvetnoy Bulvar. The idea behind the project is to offer several versions of the most popular lunch dish in Asia - noodle soup. The menu includes Tom Yum, Ramen, classic Udon soup, Pho, plus all kinds of Asian noodles and spring rolls. Every soup is available in two sizes - big (700ml) and small (350ml). The menu also features Asian burgers - steamed buns with different fillings. Maksim Fazylov, who graduated from the prestigious culinary school Le Cordon Bleu, is in charge of the kitchen. Vietnamese cooks from Danilovsky market are in charge of preparing pho and cooks from Lyublinsky market make Ramen. The restaurateurs plan to make the project into a chain, which means there will be several Tochka Dzhi food stands in Moscow soon. Carrot sponge cake, cheesecake with mascarpone and dor blu, chocolate cake with dark rum, yogurt with fresh raspberries, honey cake with homemade sour cream - you can find all of this at the confectionery of festive cakes at YULINA KUHNYA Cafe. Confectioner Victor Averkov (formerly at Oblomov, Pavilion, Life of Pi, Zolotoy and Bistrot) is serving up a mix of international hits, Yulia Visotskaya s recipes and his own creations. He also actively incorporates the latest trends: fresh flowers and berries, chocolate drawings, edible gold, patterned caramel, etc. Delivery is free, there are holiday discounts and a free bottle of wine with birthday orders. The price is 2,500 rubles per kilo. 30 CAPITAL IDEAS April-June 2017

33 MAGNUM wine bar is a new project in Belaya Ploshad business center. The creators say that the establishment is not the usual Moscow enoteca with a complicated wine card, but a compromise in terms of atmosphere, the wine selection and the format of interacting with guests. The wine card, which took almost a year to put together, contains around 100 items, 55 of which are wines by the glass. The wine card is split up into 4 main sections: Wine for every day (350 rubles/glass), Wine for an occasion or no occasion at all (550 rubles/glass), Gourmet wine (950 rubles/glass), and Wine for connoisseurs ( 8,900-59,900 rubles per bottle). The great seconds sections are very interesting - these are versions of the best cuvees in the world at affordable prices. The great neighbors are items that can t compete with masterpieces for a number of reasons - historical, climate related, etc. - and remain largely in the shadows of their illustrious cousins. Another curious section on the wine card is called for gentlemen who know a lot about perversion : this selection is for everyone who is tired of traditional and familiar flavors and includes the most unusual wines in the world (rare autochthonous varieties, unexpected turns of vinification, tannins white and rosé wines, aromas of wet wool and leather seats). The card has sparkling and dessert wines, and of course magnums. The Russian fish restaurant VOLNA is the newest brainchild of the famous Russian restaurateur Andrey Dellos (Maison Dellos) specializes in Russian fish and seafood, which are shipped to the restaurant s kitchen from all over the country. Chowach, omul and muxun come from rivers in Siberia, the eel and lamprey come from the Baltic region, and the mussels and rapans come from the Black Sea. Of course, there are crabs and shrimp from the Far East, as well as salmon and halibut from the north. The interior is typical of traditional seafood restaurants, which focus on the food as opposed to fancy new decorating trends. The stand with ice for the freshest seafood serves a very practical function here as opposed to a decorative one. The menu is based on simple recipes from real fishermen, which means that the fresh, natural taste of fish is the highlight of the meal. For example, fried mussels with white wine is a classic dish for residents of the Black Sea coast. River trout fried over fire or halibut baked in alder paper are both traditional recipes from the North. A new Russian snack bar BERIOZKA opened next to Apothecary Garden in Moscow. Founders of the establishment Dmitry Biryukov and Anna Sokolova (restaurants Syrnaya Dirka, Restoran Morskih Gadov, Oranzhereya and Delovaya Kolbasa) have opened a city cafe that serves food that is known and loved by everyone, along with drinks. And there is no messing with original recipes here. The chefs simply take Russian products and make traditional, delicious dishes with no frills. April-June 2017 CAPITAL IDEAS 31

34 GOVERNMENT AND BUSINESS Playing to win Moscow is first among Russian regions in terms of public-private partnerships development Moscow placed first in the ratings of Russian regions according to the level public-private partnerships (PPP) development, exhibiting a growth of 30% from 2016 to February Maksim Tkachenko, Executive Director of the PPP Development Center, made the announcement during the 6th Infrastructure Congress Russian PPP Week, which took place in Moscow at the end of March. The capital actively engages business in resolving city-wide issues with the help of PPP mechanisms. The city has set out to thoroughly re-work the legal and economic conditions for long-term projects. Special attention is being paid to the further development of the PPP mechanism via adopting the necessary regulatory acts. The volume of contracts related to PPP projects that Moscow entered into in amounted to 575 billion rubles. Moscow has become a leader among Russian regions in terms of the level of PPPs in the period from 2016 to the beginning of 2017 with a final result of 90.1%. The Moscow region is in second place with a final result of 82.7% and Samara Region is in third place with 82.7%, Tkachenko said during his speech. According to him, Moscow is an absolute leader in terms of establishing a regulatory and legal framework for the development of investment projects in the sphere of PPP and in terms of making their projects appealing to private investors. The following two parameters are taken into account for the PPP ratings: investment appeal and the regulatory and legal framework. Moscow also placed first in last year s PPP ratings, with a score of 60.2%. St. Petersburg came in second with 59.9% (the city placed fifth in 2017 with 72.2%) and Samara Region placed third with 59.6%. Dmitry Presnov, First Deputy Head of the Moscow Department for Economic Policy and Development, pointed out that 32 CAPITAL IDEAS April-June 2017

35 Moscow is leading the ratings because the city s administration stays proactive. We continue to be leaders in the PPP ratings because we are proactive and try to use as many tools as possible in order to make sure our projects are appealing to private investors, Presnov said. The Russian capital s achievements in the sphere of publicprivate partnerships are no accident. Moscow is a world-renowned pioneer in this sphere. The city started experimenting with PPPs way back in the early 1990s, when most regions has no idea that this kind of cooperation between business and government is even possible. It is no wonder that Moscow leads the ratings today and that representatives from other regions come here to learn about the capital s experience. One of the features of public-private partnerships in Moscow is that the authorities do not get in the investor s way. Recognizing that the investor is better at doing business, they do not interfere with operational activities. The investor implements everything on their own. The one thing both sides aren t quite happy with is the amount of time that lapses between generating an idea and signing the concession agreement. But for the sake of fairness, this is the main problem for business and government representatives in just about any country. In Moscow, this time period amounts to about two and a half years. The goal is to shorten this time period to nine months. Projects implemented within the scope of public-private partnerships are often projects that have social significance - housing, healthcare, education, transportation a prominent example of a recent project is the construction of the Kutuzovsky Prospect northern relief road. Western companies often represent the business side on these projects. The Congress featured presentations about construction with German business representatives of a polytechnic college. Graduates from the school will receive diplomas that will be valid in both Russia and Europe. Other examples of PPP projects in Moscow include the following: the acquisition of metro cars for the Moscow metro, the acquisition of low-floor buses and trams, the establishment of several transfer hubs, the establishment of general medical practice offices ( Doctor Ryadom ), and private schools and kindergartens. Projects like these are extremely important for integrating business into the development of city infrastructure. Our objective is to replicate the experience we ve gained over the past few years, using it to implement new projects and work with investors to create new PPP mechanisms. Moscow welcomes investment initiatives of any scale and invites qualified investors who know how to attract financing, build and operate infrastructure facilities to cooperate with the city, said Leonid Kostroma, Director of the Moscow City Investment Agency, during his presentation at a panel discussion at the Congress. The PPP Development Center organized the Russian PPP Week Congress with participation from relevant federal ministries and the support of the Chamber of Commerce and Industry of the Russian Federation, the Agency for Strategic Initiatives and "Delovaya Rossiya." The program included best PPP practices in transport, housing and the social sphere. Experts discussed the possibility of implementing projects in the spheres of agriculture, manufacturing and IT. The PPP Development Center was founded in 2009, initiated by major commercial structures, government representatives and socio-political organizations. The center s priority tasks include the development of federal and regional legislation on public-private partnerships, the development and integration of an implementation methodology for PPP projects, and training of qualified personnel in the field of PPP in cooperation with leading universities. While the Congress was in progress, the PPP Development Center and the Moscow City Investment Agency signed a cooperation agreement with the goal of developing the institutional environment in the sphere of public-private partnerships. The Moscow City Investment Agency was founded in The agency s objective is to promote investment opportunities in Moscow and Russia abroad, develop legal and economic conditions for the implementation of investment projects, including those implemented on the basis of public-private partnership, and introduce mechanisms to improve the investment environment. April-June 2017 CAPITAL IDEAS 33

36 MOSCOW IN WORDS The joy of seeing Yuri Gagarin flying in space is only superseded by the joy of a good penalty save. Lev Yashin, Russian football goalkeeper, considered by many in the world to be the greatest goalkeeper in the history of the game A hockey player must have the wisdom of a chess player, the accuracy of a sniper and the rhythm of a musician. Anatoly Tarasov, Russian innovative coach of hockey. Mr. Tarasov was the first European coach to have his portrait in the Hockey Hall of Fame in Toronto. The example of foreign teams has finally convinced us that in order to catch up to professional teams we must be professionals. Professionalism is psychology about one s responsibility towards one s work. Nikolai Starostin, Russian footballer and ice hockey player, and founder of Spartak Moscow 34 CAPITAL IDEAS April-June 2017

37 You can become a big master in chess only if you see your mistakes and short-comings. Exactly the same as in life itself. Alexander Alekhine, the fourth World Chess Champion I am, in principle, against putting in less effort when we re winning big. The audience doesn't come to see just the first period, but a full 60 minutes of hockey. There is nothing on the ticket that says the team will stop giving it their all if they're winning 4-0. And not giving it your all is a bad habit that can harm you during a critical moment. Victor Tikhonov, prominent Russian hockey coach Do something...i need to come back. I need to score... Eduard Streltsov, the "Russian Pele" (just after injuring his leg during an important match) April-June 2017 CAPITAL IDEAS 35

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39 José Campusano Alarcón: We're not afraid of competition On wine, salmon and Luis Corvalan It would be tough to find a Russian person who hasn't tried some kind of Chilean product. It is no wonder that the Chilean stand at the recent international food fair in Moscow was one of the most elaborate stands there. A total of ten Chilean companies took part in the food fair. They brought fish, poultry, pork, tomato paste, juice and, of course, wine. Wine is our key ambassador, said head of the Trade Department at the Chilean embassy in Moscow ( ProChile ) José Campusano Alarcón in an interview with Capital Ideas. If this is really the case, the ambassador is doing a fantastic job. Suffice it to say that Chilean wine is served at official gatherings, including the economic forum in St. Petersburg last year. It is also widely available at Russian grocery stores. We can talk about Chilean wine forever, José says, but I d like to talk about a specific kind of wine today Carménère. This wine is made from a type of grape that is only available in Chile. It first appeared in Bordeaux, France, which is famous for its wine. However, it was completely wiped out in Europe by pests in the middle of the 19th century. So now Carménère is only made in Chile. Why? Because Chile has a microclimate that was created due to its unique location. The country is surrounded by the Pacific Ocean and tall mountains, there is the Atacama Desert, plus - the proximity of Antarctica! As a result, the soil, water, and air there are so pure that we end up with top-quality wine! Of course, good quality isn t limited to Chilean wine. It applies to just about any produce grown in this South Ameri- April-June 2017 CAPITAL IDEAS 37

40 NOTHING VENTURED can country. Incidentally, the wine Mr. Alarcón is talking about ranks fourth on the list of the most popular Chilean products on the Russian market. The winner here is salmon: in 2015, 97% of salmon sold in Russia was of Chilean origin. As we wait for the official 2016 numbers to be released, we hope that we will keep our lead in terms of salmon exports, José says. Out of all the food products Chile exports to Russia, 68.89% is fish and seafood (mainly salmon). Fresh fruit (apples, pears, and grapes) account for 11.87%. Frozen vegetables, fruit and berries come in third at 7.07%. Wine is fourth (4.56%) and pork is fifth (4.47%). In the 1970 s, Russians associated Chile with Salvador Allende, the singer Victor Jara and Luis Corvalan, José jokes, For this generation, it s salmon and wine before anything else!. Considering the growing trade volumes, there are few problems with logistics between Russia and Chile. All Chilean products are shipped by sea to Riga or St. Petersburg, then delivered to different parts of Russia. Aside from Russia, Chile exports fish and agricultural products to other parts of the world as well. So how did a country whose primary export had always been copper suddenly become one of the world s agrarian leaders? It happened because of economic diversification programs that began in the 90s, when democratic forces once again came to power in Chile after Pinochet. These changes could have happened even sooner, back in the 1970s, after Salvador Allende s victory, José says, He was already planning agricultural reforms back then. But the coup that happened in September of 1973 put a stop to these plans for a long time. Today, in light of the economic sanctions and unstable oil prices, we talk a lot about the need to diversify the Russian economy. Perhaps some things can be learned from Chileans in this respect. Agriculture is, after all, where we started our diversification process Why wouldn t business people from two countries try to create joint ventures for example, to build poultry farms together? A number of proposals have already been made by businessmen from Armenia and Kazakhstan the last time a Chilean delegation of officials and business representatives visited countries that belong to the Eurasian Economic Union, José Campusano Alarcón responds. Chile isn t afraid that the sanctions will be lifted. We are prepared to compete with anybody, José says with confidence. However, this doesn t mean that Chilean businessmen have it easy in Russia. They understand that a lot still needs to be done in order to establish their place on the Russian market. And this isn t just about business, but also about knowing how to present and sell your products. There is another sphere closely related to business, which has a direct impact on sales volumes of wine, juice, and just about anything else you can imagine. What is it? - Let s do a thought experiment, José Campusano Alarcón explains, Imagine that there are three identical red apples in front of you. One of them is from Chile, one from South Africa and one is from Serbia. Which apple will you choose? I say that I would pick the apple from Chile. And not because I want to flatter José, but because I know how good Chilean apples are. But generally speaking, if you don t have preferences ahead of time, a person will pick the apple from the country they like the most, José says, a country that produces literature or art they enjoy. This is why I think it is important to introduce Russians to our culture, our sports and so on. Russians will have an opportunity to get to know more about Chilean football this summer, when the Chilean team comes to Russia for the Confederations Cup. After all, they are the best team of the Americas. 38 CAPITAL IDEAS April-June 2017

41 useful info Department for external economic and international relations of the Government of Moscow Address: 13 Tverskaya Street, Moscow, Ph: +7 (495) Fax: +7 (495) Department of Science, Industrial Policy and Entrepreneurship of the Goverment of Moscow Address: 22 Voznesensky Pereylok, Moscow, Ph: +7 (495) Fax: +7 (495) Department of Economic Policy and Development of the Government of Moscow Address: 21 Voznesensky Pereylok, Moscow, Ph: +7 (495) , +7 (495) Fax: +7 (495) Department of City Property of the Government of Moscow Moscow Exchange Address: 20 Bakhrushina Street, Moscow, Ph:+7(495) Address: Office 1: Moscow, Bolshoy Kislovsky per, 13 Office 2: Moscow, Vozdvizhenka Str, 4/7, Bldg. 1 Phone: +7 (495) , +7 (495) Fax: +7 (495) April-June 2017 CAPITAL IDEAS 39

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43 Japanese quality with a Russian soul If you re still having doubts about whether or not it s possible to do business in Russia, just look at ISUZU. This company is the perfect testament to the fact that doing business in Russia is great. Suffice it to say that ISUZU is currently the number one foreign company in terms of truck sales. Information about ISUZU s leadership was recently presented by the leading information agency Autostat Info. According to the agency, the Japanese company sold the most trucks compared to all foreign truck manufacturers, posting a growth rate of 7 percent. Last year the company also opened warehouse in Vladivostok in addition to Moscow. This enabled the company to cut down on delivery time for spare parts, as well as to expand the range of products by 20 percent. So why is this famous Japanese company, which celebrated its 100 year anniversary last year, so successful in Russia? Jun Kimura, Finance & Administration Director of ISUZU RUS, answered this and other questions in an interview with Capital Ideas. Mr. Kimura, what is the secret behind your company s success in Russia? It has to do with two key principles that we adhere to - excellent service quality for our clients and a wide range of products. But you adhere to these principles on any market. Isn t the Russian market different from Europe or the Middle East? Of course the Russian market has its own features. To put it mildly, Russia is a fairly difficult country. As a representative of Sojitz Corporation, a minority shareholder of ISUZU RUS, can say that we always look at the local market from a long-term perspective. When you say that Russia is a challenging market, what do you mean? First, the sanctions, which have depressed the Russian market. And second, the legislative challenges, which, frankly speaking, is incomparable to those of other countries. I d like to ask you a question about mentality. Business is not just trucks, pickups, wheels and spare parts. Business is people. In my opinion, for example, it s difficult to find two nationalities more different than Russians and Japanese people. But if you re here, then we do have something in common, right? You know, my experience is limited: I have only been working in Russia for a year. But what I have experienced and heard from colleagues who have been working here for a long time leads me to believe that the Russian mentality is quite similar to ours. Both Russians and the Japanese value personal relation- April-June 2017 CAPITAL IDEAS 41

44 NOTHING VENTURED ships, and both are interested in developing longterm relationships. So at the foundation of both business cultures is developing personal contact between people, establishing trust on a personal level, right? Absolutely! Mutual trust between us and our clients is extremely important. Last question about this topic - is it difficult to establish contact with Russians? (Mr. Kimura pauses to think for several seconds) Please answer honestly! To be honest, such contacts really are difficult to establish at first. Especially when it comes to government officials. When it comes to private business representatives in Russia, it s easy for us to find common ground. We speak the same language as Russian businessmen, since both of us are looking toward the future. You call everything you make in Russia Japanese quality with a Russian soul. What does this mean? It means that quality control of the final product is carried out in accordance with the Japanese standards of ISUZU Motors. But the products are assembled by Russian people, on Russian equipment, with a Russian approach at our plant in Ulyanovsk. So that s why we have Japanese quality with a Russian soul! People all over the world like to talk about the mysterious Russian soul. Do you think the Russian soul is mysterious? I ve only been here for a year, so it s hard for me to judge. In any case, I have yet to encounter any of these mysterious aspects. (Laughs) A more general question about relations between Russia and Japan. Recently it seems like they are improving. In December of last year, Vladimir Putin was in Russia and a Japanese delegation came to Moscow in the beginning of this year. Is there a positive trend in terms of trade and economic relations between our countries? Yes, we can really see this. The meetings between Putin and Abe are opening new opportunities for us, private entrepreneurs. But is there something that still gets in the way? The biggest obstacle is the lack of transparency in Russian legislation. There are a lot of details that are unclear. But both of our governments are working on this problem. This question is probably not for you, but I will ask anyway. Do you think the fact that the Russian President is a big fan of judo helps him understand Japanese people better? Yes, judo is the true spirit of Bushido. The study of Bushido helps to better understand Japanese culture, history and Japanese people themselves, our mentality. So far as I know, Vladimir Putin likes to read books about judo. He even has a sculpture of Kanō Jigorō, the founder of judo, at his house. Have you heard about this? I haven t, but if he does, that s great! (Smiles) What kind of advice would you give to Japanese businessmen who are planning to come to Russia? Anybody who comes here has to be thinking about the long-term. You have to plan your business activity in Russia for several years in advance. So it s pointless to count on making a quick buck, right? Yes. I ll give you an example. Among other things that SOJITZ group (where I came from) is doing in Russia, we have a project - the development of an airport in terminal Khabarovsk. In spite of support from the Japanese government, we understand that this will take several years. Why so long? It can t be because Russia is so cold? Generally speaking in Russia, planning takes a long time, construction takes a long time and waiting for profits to come in takes a long time. 42 CAPITAL IDEAS April-June 2017

45 In order for me to understand the reasons better, could you explain - a similar project in Europe or Japan wouldn t take this much time? Yes, it would not take as long to implement it there. You ve been in Moscow for a year. What do you think about this city? My impressions of Moscow are much better than what I expected to see before I came here. I thought that it would be dark and cold here. But my wife and I are in Moscow and we re happy with everything. We like going to museums and ballet, for example. What happened between ISUZU and Sollers? Sollers decided to leave. Instead of looking for a local partner as a replacement, ISUZU decided to expand its participation. We have a good local team here and excellent management. And we re not afraid of continuing to work in this format. Do you have a lot of hope about the future, or are you more cautious? I have hope. I am very positive. Relations between our countries are improving. This year will be a year of transition, and next year will be great! Note from Capital Ideas: ISUZU RUS ISUZU RUS is the official manufacturer and distributor of the Japanese brand ISUZU in Russia. The company was founded through joint efforts of two Japanese corporations - ISUZU Motors Limited (74% of shares) and Sojitz Corporation (26% of shares). The company manufactures and sells the full range of ISUZU commercial vehicles weighing 3.5 to 33 tons and D-Max pickup trucks through a national dealership network, which currently amounts to 52 dealerships (including Kazakhstan and Belarus). The company s production facilities are located in Ulyanovsk. ISUZU RUS employs a total of 246 people. The company s branches are located in Moscow, Yekaterinburg, Novosibirsk and Vladivostok. April-June 2017 CAPITAL IDEAS 43

46 NOTHING VENTURED Xu Jiangsheng: We still have a lot of potential in Russia On the Russian auto market, Chery is one of the top three most successful Chinese brands in terms of sales volumes. The most popular Chery model in Russia is the compact crossover Tiggo, which has been on the market for several years and has acquired a reputation as a reliable, good quality vehicle. In an interview with Capital Ideas, Deputy CEO of Chery International Xu Jiangsheng talked about the company s achievements and plans, as well as about his life in the Russian capital. In spite of the crisis that the country s auto market is going through, Chery has not cut back on business activities in Russia. In fact, the company is planning to expand the range of vehicles available to Russian customers, as well as to increase the pool of dealerships in the country. Xu Jiangsheng spent 5 years working in a similar position in Spain with Haier, the largest Chinese home appliances manufacturer. He first came to Moscow 10 years ago, when the city looked very different from the way it is today. Even during his first visit, Jiangsheng was impressed with the Russian capital the people, the unique architecture and the city s own special flair. He liked everything except for the weather, especially the winter. It was tough getting used to such low temperatures. Even back then, Mr. Xu noted that Moscow is a city with a lot of energy and that you can turn into the most ambitious plans into reality here. Over the past 10 years, this energy allowed Chery to establish itself on the Russian auto market. Xu Jiangsheng has been permanently living in Moscow for 9 months and is starting to understand Russian culture and customs, as well as learning first-hand how to make a Chinese auto brand successful on the Russian auto market. In spite of the fact that the situation on the Russian auto market, and the economy in general, is not the most simple, we at Chery understand that the country has tremendous potential for growth, Mr. Xu says with confidence, I must point out that, judging by my interactions with people here, people who live in Russia have a lot of patience. They probably learned how to be patient from the long winters. The Russian car market has not stabilized yet. For example, sales in Russia amounted to 2.3 million cars 44 CAPITAL IDEAS April-June 2017

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48 NOTHING VENTURED Note from Capital Ideas: Chery Automobile Co., Ltd. is a Chinese auto company founded in CHERY currently manufactures 900,000 cars of 21 different models. Chery Automobile Co., Ltd includes 6 automobile plants and 11 assembly plants all over the globe. The company is a leader among Chinese car manufacturers in terms of export volumes. Chery cars are supplied to 80 countries, including 4 European countries. Chery was named the most recognizable Chinese brand in Russia at the 15th annual Automobile of the Year in Russia 2015) At the end of April of this year. in 2014, but forecasts for this year amount to just 1.3 million cars. But there are also some positive aspects of the Russian market it s large capacity, as well as fairly low levels of motorization. These other factors will stimulate growth in car sales after the market downturn is over. Before working in Russia, Mr. Xu worked in Spain for several years. He recalls that the work culture in Spain resembled the work culture of Europeans in general. It s different in China. Russia is located between Europe and the East but, according to Mr. Xu, still adheres to European business management standards. At the same time, I notice a lot of Russians have Asian management habits, he says, For example, many people work over the weekend, which is almost unheard of in Europe. When Mr. Xu first came to live and work in Russia, he struggled for a long time with finding a balance 46 CAPITAL IDEAS April-June 2017

49 between European and Eastern styles, which he encountered in business, the economy and even everyday life. His partners and colleagues from the Russian Chery office helped him find this balance. During his time in Russia, Mr. Xu has done a lot of traveling in the European part of the country. He also visited several cities located past the Urals. He was, of course, impressed by the scale of the country, by its beauty and nature, the different cities and their local flair, as well as the warm welcome he received everywhere. Xu Jiangsheng is in charge of developing the Chery brand in Russia. Locals are very familiar with the brand, which is first and foremost due to Chery s extensive history. The company has been on the Russian market for over 10 years. Over the years, Chery has been able to transfer its technical competencies to the Russian market. According to Mr. Xu, Chery will introduce three new crossovers in Russia in Tiggo 5, Tiggo 3 and Tiggo 2. It doesn t matter whether or not we re in a crisis right now, he says, The company needs to keep working with its client base in Russia and is simply obligated to offer the newest and most up to date cars available. order to make sure our values are communicated to the Russian auto market. Being efficient on a market that s going through a downturn is impossible without having a special longterm strategy. Chery has a strategy like this, and one of the most important points on the list is localization of production in Russia. The company is currently discussing plans to localize production with our Russian partners and is looking for a production facility. Another important area is the expansion of our consumer audience. Once the new Chery crossovers are introduced, the company will be able to offer Russian clients the most popular models, attract the attention of younger motorists and increase customer loyalty. A company needs an effective dealership network in order to have good sales numbers. Further development of the dealership network is also a part of Chery s strategy in Russia. Extensive development is planned even on very competitive markets like Moscow, St. Petersburg and other big cities. The attitude Russian buyers have toward Chinese cars has changed radically over the past few years. Of course, all Chinese companies that have been operating in Russia played a role in this change in perception, including Chery. This is more than just the work of marketing. It also entails constant technical improvements made to the cars Chery supplies to Russia. The integration of new facilities for the manufacture of new cars allows Chery to guarantee good quality and durability of their products. There is also the work done by the customer service department in the company, specifically the aftersales service division. Chery has over 100 dealerships in Russia. The company constantly works closely with the dealership network in order to ensure that customers have access to good quality, timely support. The Russian Chery team has achieved great results in the customer service sector. Just recently, the team received an award from the company s head office. They had placed second in the world in the international Chery customer service competition Super Skilled It s no secret that the quality of a car directly impacts consumer attitudes toward the brand, the Deputy CEO of Cherry International says, But the efforts of the whole team also play a part in creating a positive image. The Chery office in Russia has a lot of employees that have been there since the beginning. They are loyal to the company and its goals and do a lot in April-June 2017 CAPITAL IDEAS 47

50 NOTHING VENTURED You can do business in Russia without getting your hands dirty Philipp Rowe helps foreigners do business in Russia Berlin native Philipp Rowe became a Muscovite right after getting his degree in Germany. He came to Russia several times as a student as well. This was a time when I believed in all the stereotypes about Russia: that it s always cold, there are nuclear plants and KGB agents everywhere, and bears roam the streets, Rowe tells Capital Ideas in perfect Russian, There cliches dissipated quickly. It became apparent that Russians and Russia are much better than their image abroad. After graduating, he started an internship at the German embassy in Russia. However, a future career as a diplomat didn t appeal to him. He spent a year working for a Kuehne + Nagel, a logistics company. In 2007, he decided to start his own business. Today, his company Rufil Consulting, which is located in the center of Moscow, employs about 20 Russian and foreign workers. 48 CAPITAL IDEAS April-June 2017

51 Mr. Rowe, why did you decide to go into consulting? Because I have always wanted to help German companies do business in Russia. When I first arrived here, I immediately noticed that German products and technology is popular here and in high demand. I also understood that not everything in Russia is easy for Germans and Western Europeans in general to understand. German companies in Russia need help, especially when it comes to bureaucratic details like accounting and taxes. This is primarily the type of consulting I m talking about. Rufil Consulting is not the only company in Russia that offers these services. Is it tough on the Russian market in terms of competition? Of course there are a lot of consulting companies, but you have to keep in mind that I m German. This is a big advantage for my clients, who mostly come from German speaking countries: Germany, Austria, Switzer- land and Luxembourg. Incidentally, I didn t think about competition when I started my business; I just started it. Moreover, you shouldn t be afraid of competition. The fact that it exists means that you re working in a field where you can make money. There is no competition in fields where you can t make money. As Germans like to say, it s always hard to get started. What kinds of challenges did you run into when you started your business in Russia? Looking back, I can say that I really didn t run into any overwhelming difficulties. Though of course there were challenges when I was starting out. For example, some things were tough just because I m a foreigner. I had to register my own company in Moscow, get a work permit It was especially difficult in the very beginning, before I had assistants and didn t have the money to hire professional agencies who could help. I had to do a lot of running around. I wore out several pairs of shoes before everything was settled. But it was a good kind of challenge. April-June 2017 CAPITAL IDEAS 49

52 NOTHING VENTURED There weren t any other difficulties? There were other kinds of difficulties. It s hard to do work when you don t have any clients. I started with no clients. I opened my company and looked for clients, talked to hundreds of people. It took a couple of years before people started to take me seriously. Did you need a lot of startup capital? I didn t have much trouble with money. I lived simply. But you needed some kind of capital to start with, right? My startup capital was a laptop and a suit. So I didn t need much money to start with. What was the most important thing for you at this stage? The most important thing in the beginning is to stay motivated. After you get a no for the 100th time, you have to keep going and asking more people. But these are challenges that aren t unique to Russia. I actually think that it was easier for me in Moscow in this respect than it would have been in Berlin. Did you run into any bureaucratic obstacles in Russia? Of course, since bureaucracy is my business. It s what I do every day. On the other hand, I have yet to run into a bureaucratic hurdle in Russia that I wasn t able to overcome. There is a lot of talk about corruption in Russia... Some typical questions that my clients ask me when talking about doing business in Russia: Do you need connections? Do you have to pay everybody off? I established Rufil Consulting, as well as a lot of companies for my clients, we do accounting and taxes for a lot of businessmen and I ve never run into a situation where I had to pay a bribe for something. And I don t recommend that anybody does this, by the way. I tell my clients that you can do business in Russia without getting your hands dirty. Much like any other market, the consulting market is developing. Are consulting services especially in demand in Russia today? You re asking how much the market has changed in this segment. Nothing is ever stagnant, including the market in Russia, which is always changing. For me, this is a positive moment that opens up new opportunities. Since 2007, when I first started working on the Russian market, we have gone through several crises, ups and downs. During the Russian boom, when everybody wanted to come to Russia, the most important thing for German companies was to open a business in Russia and set up accounting. A lot of German companies established their own companies in Russia just so they could be on the market, and only started thinking about how to sell their products here after the fact. After the Ukraine crisis happened and sanctions were introduced, German and other western companies decided to wait things out and put their plans on hold. But now everybody has gotten used to the current state of affairs and have an understanding of how to move forward. So western investments are starting to pick up in Russia again. German companies that want to work with Russia are determined to take advantage of the situation here and make investments. They haven t lost faith in Russia and understand that Russian-German economic ties date back centuries. These companies are taking advantage of the fact that things are cheaper in Russia right now. For example, you can buy land to build a plant or get special terms and government benefits for business development and attracting investments. Some foreign businessmen insist that the market in Russia is no different from other markets these days. But there are nuances, right? The Russian market is developing, and is now at the stage of saturation. Russia is a huge country with a population of 140 million people. Moreover, Russia has always been a special market for Germans it worked out that way historically. This market is practically at our doorstep, not across the ocean somewhere. Of course Russia is a difficult market that is very different from Germany. However, it s easier to work with than many other markets. It s easier for us to navigate than the markets in China, Japan or the Middle East. So you think that Russia will continue to be an attractive market? I am convinced that Russian-German relations are important not just for our countries, but for the world in general. Germany has traditionally been able to influence other governments through trade. There was a time when leading German companies like Siemens did a lot in Russia, and this was important for both Russia and Germany. I think of my work in Russia as my patriotic duty. For Germany, there is nothing more important than keeping peace with Russia and strengthening our ties here. I also owe a lot to Russia. I started my career here, my business is here, my family is here and I live here. I really like being in Russia. Of course there are 50 CAPITAL IDEAS April-June 2017

53 issues, but I am very happy to be here. Initially I didn t think that I would go into consulting, accounting and taxes. I just wanted to support Russian-German relations. And now I work in this sphere. A lot of people complain about the crisis and how difficult things are in Russia right now. Has your company experienced this? Yes, of course. Business has slowed down and the growth we experienced prior to 2013 has come to a halt. My clients have been affected by it, which means I feel it too. So would it make sense to start doing business in Russia right now? Of course. I am sure that every German enterprise that does business abroad can enter the Russian market, provided, of course, that the company profile and products are a good fit for Russia. It s even possible that entering the Russian market is easier now. For example, buying some kind of enterprise or real estate would be a good investment right now because the prices are fairly low. Nobody should expect to quickly turn a profit in Russia right now. But it will definitely come if you re aiming for the long-term. For new investors, right now is a good time to make acquisitions in Russia. What kind of advice would you give to businessmen who want to try entering the Russian market? Definitely come to Russia first and feel things out. You won t get far trying to set things up remotely. And forget everything that the German media says about Russia. Forget everything you read about Russia in Spiegel and Bild and saw on ARD and ZDF. Clear your head and come see Russia for yourself. Once you re here, plan your time a bit differently than you would in Germany. In Russia, you will need more time to do everything: to get to your hotel from the airport, to open a bank account and so on. Prepare to be patient. If these is one thing Germans can learn from Russians, it s definitely patience. By the way, if you re going to Russia in the winter, make sure to bring weather-appropriate clothes. Fashionable shoes are not a good choice for Russian winters (laughs). April-June 2017 CAPITAL IDEAS 51

54 NOTHING VENTURED Ramnik Kohli: It s important to know and love Russia In 2014, phones from the Indian brand Micromax first appeared on the Russian market. In a few years, the company became one of the top three major mobile phone importers in Russia. Ramnik Kohli, head of Micromax in Russia in the CIS, talked about the development of Micromax on the Russian market and his life in Moscow in an interview with Capital Ideas. Mr. Kohli is also a member of the Expert Council on Transfer of Payments in National Currencies. The council is part of the Department of Foreign Economic Activity and International Relations of the City of Moscow, which provides legal support to foreign companies on the Russian market. The department also assists Russian companies operating in India. The council resolves issues related to transferring payments in national currencies between countries. Mr. Kohli, when did you first come to Russia? What was your first impression? I can call Russia my second homeland, since I spent the majority of my youth here. I came to Russia after winning a competition - the main prize was the opportunity to study abroad. I first studied Russian in Voronezh, then moved to Moscow in September of 1997 and continued to study marketing at the State University of Management. I graduated in 2002 and enrolled in a post graduate program immediately after. In 2006, I successfully defended my Ph.D. thesis in bank marketing in India. When I was planning to move to Russia, some of my close friends and relatives were worried because things were really unstable here back then. I was prepared for everything, but when I got here I felt totally comfortable in Russia. None of my fears or the fears of my friends and family came true, thankfully. As a foreigner, I had the unique opportunity to watch how Moscow changed. For example, my first impression of the capital in the late 90s was that there were no signs in English. But this changed very quickly! I have lived through three crises in Russia and have seen how this country has changed. I can say that a lot of these changes have been for the best. Did you leave Russia afterward? Yes, after getting my degree I came back home and worked for Indian branches of the Russian companies VTB and MTS-India. I came back to Moscow in 2013 to implement Micromax projects in Russia. I was happy 52 CAPITAL IDEAS April-June 2017

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56 NOTHING VENTURED to see that the city has become comfortable and safe for foreigners. Moreover, doing business in Moscow, making new products, and launching new projects has become easier as well. Ramnik, as a foreigner you are familiar with the qualities of Russian businessmen. In my experience, Russian businessmen are some of the strongest businessmen I ve had to work with. I respect them for their perseverance and ability to work and grow their business during economic downturns. In my opinion, nobody is better at managing risks. Of course the Russian market is going through a tough period right now, but I am sure that the country has a lot of resources to help overcome this difficult time. I also have to say that my Russian team does superb work. The Micromax office in Russia mostly employs Russians. They are like a second family to me, I spend a lot of time with them. We work closely together and achieve great results. What are the market conditions in Russia like for your business right now? The general state of affairs on the Russian market has not had a serious negative impact on Micromax. I consider the current crisis to be a window of opportunity for us. Micromax specializes in mobile phones in the budget segment, which is currently expanding because demand for products in the budget segment is growing. Micromax offers affordable mobile phones that aren t limited in terms of functionality. In your opinion, what are some distinguishing features of the Russian mobile phone market? There are 5-6 major retailers in Russia, which make up the majority of the market. They have a thorough approach when it comes to selecting suppliers and go for brands that help them grow, especially the highmargin brands. Micromax has established a great reputation for itself, since for the past three years we have worked closely with Russian retailers and did everything possible to establish mutually beneficial partnerships. You can find our products at Beeline, Megafon, Svyaznoy, and independent retail stores throughout the country. I d also like to point out that Micromax is the top-selling brand in terms of phone quantity and in the top three brands in terms of sales in the independent retail segment. Where in Russia have you seen the most growth? We have the most sales in the central part of Russia, as well as in the south. These regions have the highest population density, as well as major wholesale companies operating in mobile phone sales. Customer loyalty to our products points to high demand for our phones, along with the low percentage of returns, which speaks to the quality of our products. What are your company s goals in Russia? Our goal is to switch button phone users to Micromax smartphones. I want to point out that we have a big share of the button phone market as well. Our budget smartphones have features that used to only be available for premium products, like fingerprint security scanners. Our goal is to democratize technology. We are able to make solutions like this available in the budget segment thanks to our optimization of production expenses. The phones are developed and manufactured in India and China, and we also have low marketing and promotion costs. What do you like most about Russia? What kind of advice would you give to someone else who wants to come here from India to work and live? If I have to leave Russia some day, I will definitely miss it, especially my friends and acquaintances, whom I love, as well as Russian weather and cuisine. I really like Russian cuisine and am pretty good at making Russian food. An Indian person who wants to live and work in Russia needs to at least speak some Russian. It s important to spend some time studying Russian culture, and it s also very interesting. Understanding the Russian mentality and learning about Russian history is very important for successfully doing business in Russia, since these things affect the behavior of both consumers and potential partners. It s also important to study the structure of the market and find out who the top players are. 54 CAPITAL IDEAS April-June 2017

57 useful info Chamber of commerce and industry of the Russian Federation Address: Moscow, St. Ilyinka, 6/1, bldg. 1 Ph: +7 (495) Fax: +7 (495) tpprf@tpprf.ru Department for Work with Foreign Legal Entities and their Representative Offices Address: Moscow, St. Ilyinka, 6/1, bldg. 1 Ph: +7 (495) , Fax: +7 (495) daif@tpprf.ru Moscow Chamber of commerce and industry Address: , Moscow, St. Petrovka, 15, bldg. 1. Ph: +7 (499) , +7 (499) , +7 (495) mostpp@mostpp.ru Main Administration for Service to the Diplomatic Corps (GlavUpDK) Address: 20 Prechistinka Street, Moscow, Ph: +7 (495) Fax: +7 (495) info@updk.ru April-June 2017 CAPITAL IDEAS 55

58 NOTHING VENTURED KNAUF Group: Russia remains a strategically important market KNAUF has been a long-term partner of Russia, having established business contacts here all the way back in 1970 s. In 1993, the company started to heavily invest in its business activities in Russia. Janis Kraulis, the head of Knauf Group CIS, talked about the company in an interview with Capital Ideas. Mr. Kraulis, KNAUF started to invest in Russia right after the collapse of the USSR. What informed the decision to enter the Russian market? The first contacts between KNAUF experts and the USSR s scientific community were established way back in the 1970s, when there were very few threats to the economy and the USSR as a state. The Soviet gypsum industry was in need of research and technology and KNAUF had always been very strong in terms of research and development. We had the experience and the know-how. We quickly opened KNAUF Engineering in the USSR, which was an engineering company that was part of Knauf Group. So when the Russian market opened up, KNAUF was familiar with the gypsum industry. Incidentally, this knowledge didn t necessarily give us the confidence we needed to invest in the Russian market. In the 1990s, most gypsum enterprises were in bad shape, both financially and in terms of technology. Moreover, the political and economic climate was unstable, the rules were constantly changing and there wasn t much potential for foreign investors. A key argument for investing in the Russian market was the significant potential of the Russian construction materials market. Russia is a huge country where millions of people need better residential conditions and a good quality, comfortable environment for work and life in general. Was it hard to start doing business here? How was your company able to establish itself on the Russian market? It was very difficult. At the time, the Russian market had encountered somewhat of a paradox there was a lot of demand for modern, high-performance construction finishing materials and no knowledge or skill when it came down to working with them. So the company had to put in a lot of education efforts, to train and retrain professional staff. By 1995, KNAUF opened its first training center in Russia outside of Moscow. KNAUF has its own production facilities in Russia. Where are your company s enterprises located and what do they manufacture? These are mining enterprises that provide natural gypsum stone for our own enterprises, as well as companies in the cement industry and other gypsum-based construction materials manufacturers. We also have metal enterprises, factories that manufacture gypsum boards and plasters, primers, thermal and acoustic insulation materials, building chemicals, as well as Russia's largest plant producing cardboard from waste paper. In 23 years, KNAUF has erected or acquired and renovated 15 production facilities, which are located all over the country. We want to provide our clients with 56 CAPITAL IDEAS April-June 2017

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60 NOTHING VENTURED We employ about 4,000 people in Russia. Our staff members include different kinds of specialists: miners, drivers, assembly line workers and office workers. Only a few of our employees here are foreign professionals. We use local labor markets to do the vast majority of our hiring, recruiting employees from communities located nearby. Moreover, I want to point out that our situation now is fundamentally different from what we were dealing with when KNAUF first entered the Russian market. Now, specialists at Russian KNAUF enterprises go on business trips to other parts of the world to work on establishing new plants with international teams. The people sent on these business trips must have unique competencies and experience, and Russian specialists definitely meet these requirements. the optimal conditions for acquiring KNAUF products and solutions. Did you acquire your production facilities in Russia or did you build them from scratch? In the beginning, KNAUF was interested in participating in the capital of construction material manufacturers that already existed at the time. We purchased shares at investment tenders. KNAUF s investment activities in Russia commenced in 1993 with the purchase of a share in TIGI, a thermal insulation and gypsum products factory at the Krasnogorsk plant. We then purchased shares in Kubansky Gips in Krasnodar region, Pobeda and the cardboard plant in St. Petersburg and Leningrad Oblast, Gips in Tula region and Avangard in Nizhny Novgorod region. The existing lines were renovated or partially replaced with new ones. The second phase was the construction of new plants, first in the industrial buildings already available to us, then in the surrounding areas. Finally, in 2003 the first KNAUF manufacturing enterprise in Russia built from scratch opened its doors. The KNAUF GIPS Kungur location had never housed a production plant before just unfinished buildings of a future plant for the production of parts for large-panel buildings. Nonetheless, there was already some infrastructure in place there. We did build our new plant in Irkutsk Oblast completely from scratch. However, we still haven t been able to secure access to natural gas there and have to use the more expensive CNG option. Today, the situation for investors who want to erect their own production facilities in Russia is completely different from what it used to be in the mid-2000s. This year we are finishing up construction on a new plasters production plant at in industrial park in Chapayevsk, Samara Oblast. The support we are getting from the local government there is tangible. How many people does KNAUF employ in Russia and where do you find the right people? Your company opened a KNAUF Academy in Russia, and there are KNAUF training centers all over the country. Could you talk a little bit about what these centers are? Where are they located and what do they do? The KNAUF Academy includes 78 KNAUF training centers, a big community of experts, gurus of industrial training and demonstrators. There are 10 KNAUF training centers in the CIS that are based out of our enterprises. There are 54 resource centers operating in primary and secondary vocational education institutions. Finally, there are also 14 KNAUF consulting centers based out of universities. How effective are the training centers in terms of promoting KNAUF in Russia? KNAUF is proud of our systemic approach to our work with clients, which means that we go beyond simply supplying finishing materials we offer comprehensive solutions for construction projects. Education is one of the components of our system, along with consulting support, delivery and documentation, for example. We want clients to use our construction materials correctly. This guarantees that the consumer will get top quality results that meet expectations and we won t have to process any complaints. Of course, these centers also serve as an excellent platform for promoting drywall construction technologies in Russia, since there are still people who are biased against it. Expanding the sales market is especially important for the industry right now, since existing manufacturing facilities in Russia exceeded market capacity several years ago. The main consumers of drywall systems are commercial real estate construction projects. They are ahead of the curve in terms of assessing and implementing new technology. In anticipation of the FIFA World Cup 2018, a lot of attention is focused on erecting athletic facilities for 58 CAPITAL IDEAS April-June 2017

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62 NOTHING VENTURED I think that KNAUF construction materials are used in the construction of all these facilities to some extent, along with hotels, media centers and other infrastructure elements. KNAUF offers a whole series of unique solutions that are a lot more efficient than their alternatives. For example, we supplied a large number of our innovative Aquapanel cement boards for the reconstruction of Luzhniki. Last year wasn t exactly the best in terms of relations between Russia and the West, and this was reflected in the economic indicators. Was 2016 a successful year for KNAUF in Russia? Could you give us your thoughts? the event. Is KNAUF taking part in preparing for this athletic celebration? Hosting the World Cup in 2018 is a big responsibility and a unique opportunity for Russia and the construction industry. On our part, we are providing multi-faceted support, from developing the initial design to finishing the facilities. Especially since KNAUF has accumulated a lot of experience in providing support for the construction of new athletic facilities, from football stadiums for the European championship in Germany and the last World Cup in Rio to multiple facilities in Sochi, which hosted the Winter Olympic Games in Every time, KNAUF was ready to offer a comprehensive approach for the project, supplying systems and solutions as well as providing technical support at the facilities. Could you give specific examples? Which 2018 WC facilities are built with KNAUF construction materials and technologies? Note from Capital Ideas: Today Knauf is one of the world s leading manufacturers of modern insulation materials, drylining systems, plasters and accessories, thermal insulation composite systems, paints, floor screed, floor systems, and construction equipment and tools. With over 200 production facilities and sales organisations in over 80 countries, 26,000 employees worldwide, the Knauf Group is without doubt one of the big players on the market in Europe, the USA, South America, Russia, Asia, Africa, and Australia. KNAUF is engaged in business and, according to the company co-founder Nikolaus Knauf, does not have any economic reasons for altering its business strategy in Russia was a difficult year, but KNAUF CIS was still able to reach our objectives. Our ruble turnover didn t fall compared to the previous period and we were able to retain our market share. We were able to achieve these results thanks to our programs targeting the reduction of production costs, resource base optimization, increased efficiency of the production processes, introducing new product on the market and continuing our localization processes. We are trying to use more components made in Russia for our products. Judging by the number of KNAUF plants in Russia and by their product line, your company is playing a lot of attention to localizing production. Will this trend continue into the future? Is KNAUF planning any new investments in Russia? According to KNAUF s Managing Partner Manfred Grundke, Russia is a strategically important market for the company. Over the past 24 years, KNAUF has invested over $1.6 billion into the Russian construction industry. We continued to invest in 2015 and 2016, and plan on modernizing our enterprises in the future as well. About 80% of our business in Russia has been localized. Of course, considering the current state of the economy, significantly investing into development is not a simple decision. At the same time, it s a testament to the fact that we are serious about working in Russia and plan to be here in the future. The main objectives for KNAUF CIS are increasing localization, optimizing production processes, promoting new products and searching for new product niches. We plan the launch of several new production lines and enterprises in These include the plasters plant in Samara Oblast, the modernization and construction of a similar plant in the Mari El Republic, as well as the plant for Aquapanel moisture-resistant cement boards in Tula Oblast. We also plan on launching a large-scale investment project to improve the production of cardboard at the KNAUF PETROBOARD plant in Leningrad Oblast. 60 CAPITAL IDEAS April-June 2017

63 useful info City Government Address: Voznesensky Per., 21, Moscow, Ph: +7 (495) Moscow Investment Portal Address: , Moscow, Novy Arbat St., 11, bldg. 1 investmoscow@mos.ru Moscow Innovation Development Center Address: Voznesensky Per., 22, Moscow, Business Center Usadba Ph: +7 (495) Business Protection Headquarters Address: Voznesensky Per., 22 (5th floor), Moscow, Business Center Usadba Ph: +7 (495) Department for Competition Policy Address: 12 Pechatnikov Pereylok, Moscow, Ph: +7 (495) , +7 (495) Fax: +7 (495) mostender@mos.ru April-June 2017 CAPITAL IDEAS 61

64 EXPERT TIPS Territory of Frenchman Jean-François Marquaire has been living and working in Moscow for the past 10 years. Since 2008 he has headed the Russian branch of the international law alliance CMS, which provides services to foreign and Russian business in the CIS countries. During this time, Jean-François has seen and participated in widely differing situations in his clients work. The economic situation in Russia has changed before his eyes, and the rules of the game in the economy have changed too. r. Marquaire, information was recently published on the internet, on the website of the Franco-Russian Chamber of Commerce, about the activities of CMS, along with your commentary, in which you say I quote We predict a high level of business activity in the M&A (Mergers & Acquisitions) sector in 2016, because the situation in Russia is beginning to stabilize So you think the situation in the Russian economy is stabilizing? Yes, certainly. The investment climate in Russia today is more stable and calm than it was, say, two or three years ago. And on the whole, I think the Russian economy is now in a better position. In other words, in these conditions, the risks of investing in Russia are justified? I would say they are more justified than they were before. Prices have settled at a sensible level, which has created a unique opportunity for European investors to invest in the Russian market. And I must say that Europe is showing that it has the appetite for such investments. Of course, the ap- proaches vary from one country to another. In some, they prefer to be cautious and wait. But France, for example, has been investing in Russia and is continuing to do so. The same can be said of Italy and some other European countries. Can you give any specific examples? I won t name any actual firms, but I can point out the sectors in greater demand. Quite a lot of investments are being made in retail trade, which may sound rather unexpected. But if you look at real estate prices, now is the right time to buy new shops and warehouses. Furthermore, the output of agricultural produce is growing rapidly in Russia. Food processing and the output of food products are in very high demand and developing further. And investments are going there. I know of several joint ventures in the process of being organized. Also, the Russian high-tech sector is developing with its traditional confidence. There are plenty of good companies in Russia. Therefore joint ventures are set up, and the process of mergers and takeovers takes place. As a whole, the market is redeveloping. But there is still tension in relations with the West. It is known that some companies have even decided to wind up their activities in Moscow and Russia. Do you have any of these among your clients? 62 CAPITAL IDEAS April-June 2017

65 Justified Risks The Frenchman Jean-François Marquaire is convinced that Russian markets are a good prospect for foreign investors Only a few. Maybe three or four clients. And even they have not left altogether they have only partially reduced their activities. Most of them intend to stay in the Russian market. I cannot say that I have recently encountered clients who have given up investing in Russia because of political problems and international tension. Yes, some are behaving cautiously and thinking twice before taking any kind of steps, but on the whole, Russia shall not be considered a country in which it is dangerous to invest. This is not an easy place to conduct business, partly because of sanctions, but it is not a place where the political risks are so great as to be a barrier to investment. You mentioned sanctions. Do you feel any influence from them in your work? Of course, as do many Russian businesses. In connection with sanctions, we have all lived through two phases, you might say. At first there was a reduction in activity. People did not know how to carry on working. They felt a certain shock from the introduction of sanctions. Plus the fact that the rouble was highly volatile at that time. Now, the situation has stabilized. People have become used to it, and are finding ways out of the situation. When I hear Western politicians say that Russia is suffering badly from sanctions, I want to tell them that this is not so. Russians have one outstanding ability. They are very inventive and good at adapting. And that is their strong point. In Russia today, the emphasis is on import replacement. For foreign firms, this means localizing production too. How interesting and economically attractive do they find this? We are experiencing a strong tendency towards building manufacturing facilities in Russia. The rules of the game have changed. Russia wants to create strong production capacity of its own, and this means localization. And foreign investors are realizing that if they want to continue selling their products here and this is a big market, one in which you want to keep your share you will have to manufacture here. The trend towards localization did not start yesterday. It already existed in agriculture and the motor vehicle industry. Now it has become general. Brasil, China April-June 2017 CAPITAL IDEAS 63

66 EXPERT TIPS and India (to cite a few) have already taken steps to localize production. Naturally, Russia is going the same way too. Many of our clients are more and more inclined to take this decision. How many clients do you have in Russia? Around six hundred active clients. If you only consider those using our services now, there is more than a hundred. More than 50 qualified lawyers work in CMS s Moscow office. Are they mostly foreigners or Russians? We only have six foreigners. The CMS alliance represents the interests of many leading international corporations in the traditional list of the 500 biggest European companies according to the Financial Times (FT European 500) and that of the 500 biggest American ones according to Fortune magazine (Fortune 500). In Russia you have also been consultants to the most important players the VTB, Russian Railways, the Renaissance Capital Fund, GidroOGK... But do you also work with small and medium businesses? We do. These firms have very interesting projects. They are relatively small companies, but very dynamic from the investing point of view. Producers of dairy products and foodstuffs, and also retail chains. I won t give names, but we currently have, for example, a fruit grower from Morocco who wants to start a business in Russia. Of course, we have more in the medium business category. After all, entering the Russian market involves certain costs. But you said that prices are more favourable in terms of currency. If you want to do everything right, you have to deal with experienced people, and their services cost money. We are talking about people who know the market well, have been working here for a long time and can tell you about the practical aspects of business. I can say from my own experience that many if not most foreign investors consider at first that developing markets are virtually all the same. I know, they think, how things are done in Brazil and in India, so why should Russia be any different? Not at all. Here we all do it our way. And you could say the same of any other country. And those who know everything in advance usually don t get very far. Two big retail chains in the USA and in Europe I won t name them decided that with their international experience, and the size of the Russian market, they had won from the beginning. The result was that it didn t go well and eventually they left the market... You have to understand the rules of the game in a specific country, both the written and unwritten ones. Only when you have a good understanding of the situation is it time to invest funds. In that case, you can reckon on a high income from your investments. So there are certain purely Russian rules for conducting business? Our law is different from European law? On paper, your legal system differs little from the French or German. It is a feature of it that it is always changing. But for the better. Today s business climate in Russia, from the point of view of the laws, is more or less comparable with other developed countries. The system works. Of course, the legal practice is not yet far enough developed to be completely stable. Time is needed. But from one point of view at least, I think your legal system is excellent: it works quickly. In what sense? In a court dispute, we can reach the supreme cassation level in only 18 months. That s considered quick? In France, for example, such a process can drag on for five to seven years. From what you say, one might still get the impression that it is not that easy for a Western businessman to open his own business in Moscow... If you have bureaucratic procedures in mind, Russian bureaucracy is not much different from European. But the difference is that the situation in Russia is improving. In 10 years of working in Moscow, I have observed significant improvements in the administrative system. There are fewer problems for business, everything is not yet ideal, but a huge process is going on. In your career, you have worked in Europe, America, Asia and the Middle East. And now 10 years in Moscow? Was this a conscious choice? Oh, it s a long story. And it covers much more than 10 years. As a young man, I read Jules Verne s novel Michel Strogoff: the Courier of the Czar, and came to imagine Russia as an enormous country of adventures. I came here first in the latter days of the USSR. At that time I was working in a large French company which sold equipment for oil and gas industry enterprises. And I spent time not only in Moscow, but also in the provinces. I very much liked Saratov for example. I was enchanted with Russia. And when, returningfrom Houston and having thereafter turned around three mid-cap companies in France, in the 2000 s, the firm s management said they were looking for someone for the Russian office, I did not hesitate for a moment! I said yes at once. But when I flew back to Moscow in 2006, I had a shock. Everything had changed. It was a completely different city. Plenty of cars, restaurants, supermarkets, advertising everywhere, neons etc far from the dark, quiet Moscow I had known before.. Though there were still some elements of the Wild West here at that time. But gradually everything became organized. If you compared Moscow 10 years ago to the great world capitals, it had not yet reached their level. But today it is ahead of them in many ways. It is a beautiful city. There is more life here. It is becoming cleaner. The infrastructure and transport are improving. Take for example the latest innovation: the passenger service on the Maloye Ring Railway and how it connects to the Metro network. It s very convenient, and 64 CAPITAL IDEAS April-June 2017

67 solves some serious problems. I feel at home here. I could not have said that when I came here in 2006, but today I can. Does everything suit you? Or is there still something lacking? I don t really know what to say... I personally feel that Moscow does not have enough good restaurants with Russian cuisine, which I love. There are very few of them. And to be honest, I don t understand why. There are other national cuisines and many establishments with an international menu. But as for good Russian food... Still, you can always find what you want in Moscow these days. True, there is no French cheese now. But my fellow countrymen have already appeared here, along with Swiss and Italians, and they are beginning to produce their cheese here. Things are not that bad. Does your family live in Moscow too? Part of it. My sons are adults now, they work and live on their own. I am here with my wife and youngest daughter. What do you do in Moscow other than work? How do you spend your leisure time? My daughter is only four, so we don t go out into the world very often. But we make quite frequent trips out of the city. There are some very beautiful places in the area around Moscow. And I m keen on sport too. I ride a bicycle along the riverside, from Muzeon on to Luzhniki and to Presnaya. The CMS website says you know French, English and Russia. Did you learn Russian here? Yes, I started studying it when I arrived. But I must confess that I don t speak it very well. You are clearly being modest. But in general, can a foreign businessman get by in Moscow without knowing Russian? In principle, you can live in Moscow without knowing Russian. But I consider that Russian is essential for anyone coming here to work. Now, even in the management of international and foreign companies working in Moscow, more and more of the top managers are Russians. When you meet them you ought, as a minimum, to understand what they say Five pieces of advice from Jean-François Marquaire to those wanting to open a business in Moscow Form your own opinion of Russia Forget everything you have read about it in the western newspapers previously and on the way here. Listen more Socialize, converse a lot, meet people. You will need an understanding of what is going on. You can t manage without it. Don t let yourself get nervous And don t expect everything to work out for you right away. Constantly monitor your business At least until you get to know all the special features and trends here. Always remain optimistic In Russia, even the very worst often turns out for the best April-June 2017 CAPITAL IDEAS 65

68 OUR INTERVIEW Jun Kondo: I know what Muscovites like Jun Kondo, Head Chef at Fumisawa Sushi, came to Moscow a year ago at the invitation of the Russian restaurateur Arkady Novikov. A graduate of Hattori Culinary University, the most famous culinary school in Japan, he has worked in Canada and China, which means he understands both European and Asian palates. In an interview with Capital Ideas, Jun revealed what s special about Russia and talked about overcoming obstacles. Jun, you haven t been in Russia that long. What are your first impressions? I came to Russia for the first time last winter at Arkady Novikov s invitation it was our first meeting and food tasting. I remember that I came very late at night, when it was dark and very cold. Back then I didn t understand that Petrovka is the center of Moscow, what kind of people live here or what products are available it wasn t the best first impression, now that I think about it. Why did you accept the offer? I m used to not making snap judgments, which is part of Japanese culture. Everything happens for a reason, and this reason is sometimes only revealed to us over time. Since I lived in Canada for a long time and worked in China and Europe, I knew I wouldn t end up in a place where I m used to everything. A lot of things are different here. Do you feel differently now? I like it here now, Moscow is my home. Even though I spend most of my time at work, I really like my team and our regular guests. We always have lively conversations. In your opinion, what are the big differences between Russians and Japanese people? 66 CAPITAL IDEAS April-June 2017

69 The Japanese are very measured. They might be punctual, but they will fully submerge themselves in a single process until they learn it like the back of their hands. Take, for example, our approach to culinary education you have to go to school for almost 10 years in order to learn how to make sushi properly. Russians love to multitask and doing things quickly, sometimes only have superficial knowledge of a subject, are impetuous, impulsive and like doing everything last-minute. What sorts of challenges did you encounter in Moscow? Most likely every foreigner will give you the same answer it s hard to understand each other. There are only a couple people in the kitchen who speak or understand English. I often have to rely on hand gestures. Were there any pleasant surprises? I really like working with Arkady Novikov. He comes by the restaurant often, knows what he wants and what the clients will like. He helped me get through my first adjustment period. Now I can say for a fact that I understand what Muscovites like. For example, we have Fumisawa rolls on the menu. These are classic salmon rolls topped with baked cheese. They re April-June 2017 CAPITAL IDEAS 67

70 OUR INTERVIEW a major hit here, but wouldn t have done as well in other countries where I ve worked. Do you miss home? What do you miss the most? I have a real soft spot for my grandmother s house, family dinners and spending quality time with my family. What is missing in Russia in terms of business? If you try hard enough, you can find or order any ingredient here. For example, we recently ordered bluefin tuna and I secured us a supply of young bamboo. Russia is a fairly advanced country in terms of restaurants and is open to experiments. I like that. What kinds of personality traits are most important for foreigners who want to come to Russia and do business here? Mobility, flexibility and the ability to cope with stress. It s best if there is a person they can rely on, someone who can help them understand the Russian mentality. What kind of advice would you give to other Japanese people who are coming to Russia in order to live and work here? I think the most important thing to do before signing a contract is come over for a visit and learn about the project ahead of time discuss objectives, tasks, to get a feel for the atmosphere. To do some research. Sometimes everything seems to look good on paper, but your intuition tells you to decline the offer. Sometimes it s the exact opposite. What are your plans for the next 10 years? I want to grow as a chef, to improve my technique and discover new products. I am interested in growing as a manager because cooking is about more than just food. It s also about working on a team. It s important for me to have a team that shares my values. For example, what s the point of working if you don t love what you do? Why put in a mediocre effort when someone else could be pouring their heart into the job? This is the philosophy I want to get across to the people I work with. 68 CAPITAL IDEAS April-June 2017

71 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 sergomrk@mail.ru April-June 2017 CAPITAL IDEAS 69

72 BETWEEN PAST AND FUTURE

73 Onward... into the Middle Ages! There is no other city in the world that is changing for the best as quickly as Moscow is today, says Jan Gehl, a professor of design and architecture from Denmark. It would be tough to find a Moscow Government official who doesn t know Jan Gehl. After all, he has a lot to do with what s happening in the capital. But many people all over the world are familiar with the 80-year old architect and designer from Copenhagen, a remarkably kind man. This doesn t come as a surprise. Jan helped make a lot of cities more comfortable, including London, New York, Melbourne and Sydney. He was the one who urged Michael Bloomberg, Mayor of New York, to clear Times Square of traffic, turning it into a phenomenal pedestrian area that is pleasant to visit any time of the day. Getting rid of cars in public areas in cities is a key principle in Jan Gehl s urban philosophy. He is convinced that people need to move around cities on foot or ride bicycles. I think that we needed cars 120 years ago, maybe in Detroit, in the Wild West somewhere. Now it s a completely inefficient mode of transportation. At least in cities this is definitely the case. We spend more time in traffic than moving in cities. It seems like people all over the world are starting to realize this now and are using cars less, Gehl said in Moscow during a presentation of his book How to Study Public Life, published with support from the city government. they basically like and hate the same things everywhere. This is why the principles of urban planning that I apply are the same everywhere - be it Greenland or an Arab country, where I have also done work. I have twelve such principles. They include, first and foremost, safety, comfort, and an enjoyment of everything that surrounds you. Interestingly, Jan considers the Piazza del Campo, the central square in the Italian city of Siena built in the Middle Ages, to be a classic example of a totally comfortable urban space. According to him, back then city life and urban spaces were thought of as a whole. Cities in the Middle Ages expanded slowly and were in tune with the changing needs of people. This is a big contrast compared to the rapid speeds of large-scale design and construction, which took over in the beginning of the 1960s. In a rush to complete new buildings in record time, architects and urban planners Jan brought up his native city of Copenhagen as a classic example of a city that s good for people and bad for cars. According to official statistics, last year was the first year in the history of the Danish capital that the number of bicycles was higher than the number of cars (by 13,000)! For the average Dane, riding a bike is as natural as brushing your teeth. Of course, Moscow is no Copenhagen. It would most likely be impossible to implement the same solutions in this mega-city, right? No, I don t agree, Jan Gehl objects, People are people everywhere, which means April-June 2017 CAPITAL IDEAS 71

74 BETWEEN PAST AND FUTURE completely forgot to take into account the life that was supposed to take place between these high-rise buildings. This is why cities all over the world all of a sudden acquired so-called bed and breakfast communities, which served as proof of cultural degradation in urban planning. However, people all over the world failed to understand this, until Jan Gehl from Copenhagen, Jane Jacobs and William White from New York, Christopher Alexander from Berkeley and others started to speak up about it. No, of course they were not suggesting we go back to the Middle Ages. Of course, this is nonsense. A lot has changed since then, says Jan s colleague Birgitte Svarre, The solution is not to re-create pre-modern cities, but to develop contemporary tools that can be applied analytically to once again forge an alliance between life and space in cities. The same thought was expressed in an original way by Enrique Penalosa, former mayor of Bogota: We know almost everything about the habitats of tigers, gorillas and many other animals, but very little about the spaces people inhabit!. Penalosa was one of the mayors who was able to change his city completely. For example, he refused to invest in roads for cars and instead built pedestrian areas, bike lanes, parks and squares, kindergartens, schools and libraries. When he was mayor, one of the best public transportation systems in the world was established in Bogota - TransMilenio allowed the city to decrease traffic by 40%. One of his main guiding principles is that the best cities are the ones where people want to spend time on the streets. This is also a guiding principle in Jan Gehl s worldview. 72 CAPITAL IDEAS April-June 2017

75 This seemingly simple principle did not cross the minds of Moscow city officials for a long time. Everything changed when, at the end of 2010, Sergey Sobyanin became the Mayor of Moscow. Mr. Sobyanin decided to make it his mission to transform Moscow into a comfortable city to live in. The new team needed new ideas and original information about how to change public space, says Anton Kulbachevsky, head of the Moscow Department for Environmental Management and Protection. In 2011, a Moscow delegation headed to Montreal for an international urban planning forum. One of the speakers turned out to be of particular interest to the Muscovites - Jan Gehl. This is how we met and I invited Jan to Moscow so that he could see everything for himself. We looked at the city together in order to understand what needs to be changed and improved, Anton Kulbachevsky says. At first, Jan was of course horrified by the number of cars, parking lots, and the embankment of the Moscow River, which had also been taken over by cars. Gehl expressed his opinion and work on improving the city started. Tverskaya street, the courtyard next to the Tretyakov Gallery, Mayakovsky Square - this is just the beginning of the list of ideas that were thought of by the Danish architect and have already been implemented. Only a lazy person wouldn t notice everything that has been done in Moscow over the past five years, Anton Kulbachevsky says, In other cities, the same kinds of changes took thirty years to implement. I won t hide that not everybody was excited about the changes. Some people were apprehensive about them. They would ask, for example, why we need a swing set on Mayakovsky Square. But it turned out to be for the best. A record number of people is out enjoying the city streets today. People talk to each other and become kinder, more tolerant. I can say for sure - we won t stop here. We will continue to do everything necessary to make sure that Moscow is a comfortable city for people to live in. April-June 2017 CAPITAL IDEAS 73

76 Life&Culture

77 Zelfira Tregulova: Art heals the soul A trip to the museum and everything that you get out of that trip helps people cope with problems they encounter in everyday life, said the director of Moscow s Tretyakov Gallery Zelfira Tregulova in an interview with Capital Ideas. Fyodor Dostoyevsky was wrong. It isn t beauty that will save the world, but culture. But isn t culture a synonym for beauty? Isn t the whole point of culture to awaken the good in people so they can become better and respect others, even those who aren t like them? I thought a lot about this during my hour-long discussion with Zelfira Tregulova, the director of the State Tretyakov Gallery. She has no doubts about the fact that culture nourishes the human soul, even though she is reserved when it comes to discussing the subject. When I asked her whether or not culture makes people better, Zelfira Ismailovna instantly responded: At the very least it s supposed to help people not become worse, to preserve their humanity. phone screen, neglecting to meet in person due to our busy schedules. No wonder that people need some source of artistic energy to help keep us afloat. After spending 2 hours at an exhibition or museum, it s much easier to return to our everyday problems and routines. This is because you come back with an understanding that there is something else, something greater than this, and you can use it as a source of inspiration when you need. It s a kind of medicine - one that heals your soul. A trip to the museum and everything that you get out of it is something that stays with you for a long time and helps you overcome the problems you encounter. No wonder that these days, in times of financial crises, spikes in terrorism and general confusion, people gravitate toward beauty. Here s a good example: 200,000 people visited the Tretyakov Gallery on Krymsky Val in 2014, but over 800,000 visitors came last year. What s interesting is that these numbers aren t only going up in Moscow or in China, which opened over 5,000 new museums recently, Ms. Tregulova says, but also in Europe and the US. So what s the reason behind this trend? When we come to a museum, we fulfill a certain, special need for individual communication, she says, I get the impression that we re losing the connections we used to have with close friends and family. We move these relationships to a computer or smart- April-June 2017 CAPITAL IDEAS 75

78 Life&Culture Art not only helps us overcome our individual problems, but can also help address broader issues relevant to all of humanity: misunderstandings between nations, for instance. For example, an American or Japanese tourist who comes to the Tretyakov Gallery will immediately fall in love with Russia, right? Of course not. It s not that simple, Ms. Tregulova smiles, But for the most part, culture helps us understand other countries, to find common ground with the people who live there. After all, people in any country are to some extent shaped by their culture. This means that you can start figuring out what Russia is and what Russian people are like by exposing yourself to Russian culture. After this, you can move on to a deeper mutual understanding with Russians, one that is grounded in trust. The Tretyakov Gallery does a lot to facilitate this kind of understanding, including organizing unique exhibitions abroad. One of these exhibitions recently took place at the National Portrait Gallery in London, giving British people the opportunity to learn about nineteenth century Russian artists. This year, the Tretyakov Gallery will have an exhibition at the Vatican for the first time. All of this, according to Zelfira Ismailovna, is important not only for the museum, but for Russia as a whole. This work needs to be continued, she says, It shouldn t be terminated. If politicians are talking past each other, for some reason regular people have to suffer, Ms. Tregulova points out, What we keep at the Tretyakov Gallery is humanity s heritage. These are works of art that have universal significance. There is no denying that culture is strength. But what does it mean to be a cultured person? It s tough to say exactly, Zelfira Ismailovna says, but it definitely means a person who thinks about things deeply. It s a person who contemplates things instead of just absorbing everything they come across blindly. It s a person that has a moral backbone. Without these qualities, a person certainly can t be considered cultured. 76 CAPITAL IDEAS April-June 2017

79 April-June 2017 CAPITAL IDEAS 77

80 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. НАЖИМАТЬ НА ВСЕ КНОПКИ nazhimat na vse knopki. (To press on all the buttons) Explanation: To use every direct or indirect means in order to attain a goal. ГЛАДИТЬ кого-либо ПО ГОЛОВЕ gladit po golove. (To stroke someone s head) Explanation: To show approval. НАВОСТРИТЬ ЛЫЖИ navostrit lyzhy. (To sharpen the ski) Explanation: to run away. Pictures by Anastasia Saifulina ВОТ ГДЕ СОБАКА ЗАРЫТА! vot gde sobaka zaryta. (Here s where the dog s buried) Explanation: That s the main point! КАК ПО МАСЛУ kak po masly. (Like sliding on oil) Explanation: Things are going well, smoothly. ПОДНЯТЬ ВСЕХ НА НОГИ podn at vsekh na nogi. (To raise everybody to his feet) Explanation: To make everyone be more active. 78 CAPITAL IDEAS April-June 2017

81 ЛОМАТЬ ГОЛОВУ над чем-то lomat golovy. (To break one's head over something) Explanation: To think hard. НАШЛА КОСА НА КАМЕНЬ nashla kosa na kamen. (The scythe has struck a stone) Explanation: A clash of interests, opinions. РАЗБИВАТЬСЯ В ЛЕПЕШКУ razbivattsa v leposhku (To smash oneself into a flat cake) Explanation: To do next to impossible to attain one s end. НИ ЗА КАКИЕ КОВРИЖКИ ni za kakie kovrizhki. (Not for any gingerbreаd) Explanation: Not for anything. НЕ ЗА ГОРАМИ ne za gorami. (Not beyond the hills) Explanation: Something s going to happen very soon. КАК ДВАЖДЫ ДВА ЧЕТЫРЕ kak dvazhdy dva chetyre. (Like two times two is four) Explanation: Obvious to everyone. April-June 2017 CAPITAL IDEAS 79

82 LIFE&CULTURE Moscow thaw: We re finally seeing the first warm days that everybody in Moscow waits for in anticipation. Over the long winter months, the city s residents get tired of snow, freezing temperatures, icy roads and slush on warmer days. Now, we are ready for gentle sunrays, flowers and green grass. Everybody feels like singing and finding joy in everything: unique exhibitions, interesting lectures, an opera, a beautiful Viennese waltz or a tour of your favorite band from your university days.. The Exhibition Hall of the Patriarch's Palace of the Moscow Kremlin is hosting an exhibition for those who are interested in French history - Saint Louis and the Relics Sainte-Chapelle. Visitors will get to see true masterpieces of Gothic art from the era of this French king. The majority of the exhibits will be shown in Russia for a long time, including the stained glass from the most beautiful Gothic chapel of the world, built on the island of Cité in Paris, as well as unique everyday objects from large collections such as the Louvre, the Musée national du Moyen Âge, a number of provincial French museums, as well as manuscripts and documents from the National Library and the National Archives of France. History buffs may also be interested in a series of lectures by experts from museums of the Moscow Kremlin, which will take place on Manezhnaya Street. For example, there will be a series of lectures called Faberge - the famous dynasty of jewelers. The lectures will tell the story of a firm that became the largest and most successful jewelry enterprise in Russia at the end of the 19th century. Visitors will find out Faberge s famous clients, which included members of the 80 CAPITAL IDEAS April-June 2017

83 from Strauss to KISS Royal Family and Russian aristocracy, financial magnates and representatives of artistic bohemia. A separate lecture will be dedicated to Faberge s most famous pieces - Easter souvenirs, which were ordered by Russian emperors Alexander III and Nicholas II as Easter presents for their wives. Each Easter egg had a precious surprise inside - a tiny symbol of important historical landmarks of that time or events in the life of the royal family. In the meantime, the Tretyakov Gallery on Krymsky Val will be presenting a major exhibition project dedicated to the Khrushchev Thaw until June 11. This time period starts in 1953, when the first amnesties of political prisoners took place after the death of Joseph Stalin and ends in 1968, when Soviet tanks first entered Czechoslovakia. This relatively short period of time, which lasted just 15 years, received its own separate label for a reason. It was filled with important events, including cultural events. There was even a unique style, an original version of 1960s Soviet modernism, that emerged during the Khrushchev Thaw. A lot of this was prompted by scientific accomplishments in space and nuclear energy. Space and nuclear energy had an influence on the way people thought, pushing them to broaden their horizons and look toward the future. Everybody who participated in the creative process was looking for a new language that could adequately capture the times. Some artists looked to the heritage of Russian avant-garde. Film and theatre, prose and poetry, architecture and design all saw a new impetus for development. The exhibition tries to capture the spirit of all of these social and cultural April-June 2017 CAPITAL IDEAS 81

84 LIFE&CULTURE processes, including the explosion of creative activity. The exposition is a single installation that includes various artefacts: painting and graphics, sculptures, household items, design samples, fragments of feature films and documentaries. The exhibition space is divided into seven thematic sections. For example, the International Relations section focuses on the conflict between the USSR and the US. The cold war and the threat of a nuclear explosion influenced culture during this time period. The two superpowers completed not only in terms of arms, but also in terms of promoting their lifestyles in the media. The Nuclear - Space section demonstrates how the development of research institutions and access to higher education produced new heroes - students and scientists. After the launch of Sputnik in 1957, space took over the minds of people. It became one of the main themes in Soviet culture, impacting not only paintings and poetry, but also the design of everyday items. In the Spring, Johann Strauss Vienna Orchestra, directed by Rainer Ross, will once again perform in Moscow. Fans of the orchestra remember the New Year Vienna Gala - a triumphal New Year performance of this orchestra together with the Vienna National Opera in Moscow in , as well as the grandiose "Johann Strauss Ball" at the House of Music in the spring of This season, the Vienna Orchestra has prepared for the Russian public a new program of masterpieces by Johann Strauss and Franz Lehar, featuring the Vienna Opera Elisabeth soloist Flechl (soprano) and Vienna Opera ballet soloists. This highlight of the program will be the three most famous masterpieces of the king of waltz: "On the Beautiful Blue Danube", the overture to the operetta "The Bat" and the famous "Vienna encore" - "March of Radetzky." In addition to this triad of hits, the program will feature the most beloved fragments of the operettas "The Bat" and "Merry Widow." At the end of April, Tokio Hotel is coming to the Russian capital for a concert. After releasing their last album in 2014, the band performed across 20 countries all over the world. The record went platinum and was the number one hit in 30 countries. Over 7 million records were sold all over the world. The band is coming back to Moscow for a new show, but will of course perform their biggest hit over the past ten years of their existence. The band was formed in 2001 by two twin brothers from Germa- 82 CAPITAL IDEAS April-June 2017

85 ny, Bill and Tom Kaulitz. After watching the brothers perform, bass player Georg Listing and drummer Gustav Schafer joined them. When the band first got together, all of the members were between 12 and 14 years of age. Their songs include contemplations on serious social problems like drug addiction and suicide. The songs reflect topics that interest young people today. The majority of Tokio Hotel s songs are in German. This is why the band s fans have all started to learn German. The band even received a special thank you from the Goethe Institute for contributing to the popularization of German all over the world. However, many songs have English versions as well. May 1st will bring a grandiose gift to all KISS fans - their only concert in Russia will take place at Olimpiyskiy National Sports Complex. Moreover, Moscow will be the first stop on the band s European tour. The are performing at the Hartwell Arena in Helsinki on May 4, the Tele2 Arena in Stockholm on May 6, and Spektrum in Oslo on May 7. The legendary American band featuring Paul Stanley, Gene Simmons, Eric Singer and Tommy Thayer played a series of concerts across the US in the summer and fall of After an onslaught of requests from fans, they have now decided to head over to Europe. KISS is internationally recognized as one of the most influential rock bands in the world. The band s trademark is elaborate stage makeup and concerts featuring various pyrotechnic effects. KISS performances are considered to be some of the most spectacular shows to see! Moreover, KISS has over 40 gold and platinum records, and have sold over 100 million records. The last concert KISS gave in Moscow was almost 10 years ago and the capital s fans have had time to miss their idols, which is why the show in Moscow is one of the most anticipated concerts on the tour. Fans of Makvala Kasrashvili are in for a treat as well. At the end of April, the Bolshoi Theatre will host an evening with the famous opera singer. Kasrashvili was born in Kutaisi, Georgia. She graduated from the Tbilisi Conservatory in 1966 and immediately became a Bolshoi Theatre soloist. This talented woman takes part April-June 2017 CAPITAL IDEAS 83

86 LIFE&CULTURE in productions of leading opera theatres all over the world (Covent Garden, the Metropolitan Opera, the Bavarian State Opera, the Vienna State Opera, the Mariinsky Theater, etc.). Aside from opera arias, her concert programs include works by Tchaikovsky, Rakhmaninov and cantatas with oratorios (Rossini s Little solemn mass, Verdi s Requiem, Britten s War Requiem, and Shostakovich s 14th symphony ). On May 31, the Great Hall of the Moscow Conservatory will be hosting three piano concerts in one night. Visitors will be able to hear works by Schumann, Grieg and Beethoven, performed by the Moscow State Symphony Orchestra and conducted by Pavel Kogan The Chekhov Moscow Art Theater is hosting a new premiere: a play based on Evgeny Schwartz s The Dragon, featuring the famous actor Oleg Tabakov in the lead role. This is what an ad for the production says: Not about politics. Not about love. Not about money. About how pink is more frightening than black, night is brighter than day, and insanity is the most sane choice when there is no option left...about how one head is good and three is bad. And, most importantly: a woman s best accessory is modesty and a see-through dress. Visitors are promised the best songs, incendiary dancing, great actors, incredible sincerity, frightening candor, and the finest sarcasm. So who is in charge of all this madness? The scandalous, ambitious and young director Konstantin Bogomolov. The main theme of The Dragon - the battle between good and evil - has always been of great interest to Moscow s theatre directors. Konstantin Bogomolov always brings his personal touch to any play, but also tries to reflect the world of the person who wrote the play - Evgeny Schwartz. After all, his play is based on bitter irony, absurdity and a sense of horror before an imperfect world. And another interesting experiment in Moscow s theatre scene. It is dedicated to the last few years of Leo Tolstoy s life. The play Russian Romance 84 CAPITAL IDEAS April-June 2017

87 has been running since January at the Mayakovsky Theater. The production is the work of two Lithuanian artists. This dynamic, rhythmical play offers the audience to look at the last few years of Tolstoy s family life through the prism of key scenes from Anna Karenina, stories about temptations of the flesh from The Devil, and Tolstoy s journals. The great writer himself never actually appears on stage. Instead, the audience watches Levin, Kitty, Anna and Vronsky from Anna Karenina quarrel and worry, observes Aksinya from The Devil and Tolstoy s family members - his ambitious but talentless son Leo, his straightforward daughter Sasha, and even his dog Markiz. Sofia Andreevna, Tolstoy s wife, is in charge of the household and is struggling to win over the heart of her husband again. Actress Evgeniya Simonova understands the psychological subtleties of the role - immensely devoted to her husband and children, but by the end so completely exhausted, half-mad and hysterical. Sofia, who had 13 children with Tolstoy, is constantly lapsing into hysterical fits. And she has reason to: a meeting with Tolstoy s aging lover, whom she despises and is jealous of. Of course, the play covers Leo Tolstoy s escape from Yasnaya Polyana and his death. On June 21, the House of Music will host an event for fans of jazz. Daniel Kramer has been holding Jazz Games across various capitals of the world by inviting colleagues to play music together. Jazz Games is kind of like my business card, the musician explains, the name took me a long time to come up with and it s there for a reason. I don t really play jazz. I play classical music, jazz, rock, funk, some blues, this can t be considered pure jazz. But I do everything I can and I try to do it so that jazz isn t just a form of entertainment, but is deeper than that. On the other hand, jazz is relatively young compared to classical music. It needs to mature. So in a sense I am playing around, though I m playing around seriously. The concert is one hundred percent improvisation. At the end of June, there will be a real cinematic boom in Moscow. The capital will be hosting the Moscow International Film Festival. It is patronized by one of the most famous directors in Russia, Nikita Mikhalkov. He manages to gather under his wing various cinematographers from all over the world. For example, the main prize (Zolotoy Georgiy) last year went to Reza Mirkarimi, and Iranian filmmaker and director of Daughter. A special prize (Serebryanniy Georgy) went to the Bulgarian director Radoslav Spassov for his film Singing Shoes. During the festival, all city residents have a unique opportunity to learn about movies from some of the most interesting and original directors all over the world. Fans also get to watch their favorite stars walk on the red carpet during the opening of the festival. Some of the most beautiful actresses in Russia regularly make appearances: Julia Peresild, Svetlana Khodchenkova, Svetlana Ivanova, Paulina Andreeva, Victoria Isakova, Ekaterina Vilkova, Olesya Sudzilovskaya, Irina Bezrukova, Ekaterina Guseva and many others. April-June 2017 CAPITAL IDEAS 85

88 FACE TO FACE This and that Football, Russian style: There is no denying that football is an exciting game. But why do Russians enjoy it so much? After all, football is a summer sport and Russia is a northern country! Pictures by Anastasia Saifulina Football first came to Russia at the end of the 19th century. It was brought here by the British - by employees who worked at various Russian enterprises. They kicked a football around the field in their spare time, and the game gradually became popular among locals. The first Russian football team appeared in 1897, at an amateur sports club in Saint Petersburg. Moscow did not lag far behind. The first football leagues in the country appeared in these two cities. In 1912, a National Football Union was founded based on the leagues in Moscow and Saint Petersburg. The union was the predecessor of the current Russian Football Union. Incidentally, Russia also joined the International Federation of Association Football (FIFA) in Who could have thought that 106 years later Russia would be hosting the most important FIFA tournament - the World Cup?! Russia s affinity for football has only increased over the years, in spite of the fact that Russian football was often a source of disappointment rather than pride for football fans. Our football players have lost many international games, and even our domestic championships were often subpar. But, in spite of this, Russian football also has some accomplishments, even if these accomplishments date back to the era of the USSR. For example, in Soviet times we won the European championships, won Olympic gold medals and even placed fourth at the world championship in England, in But there haven t been enough pleasant victories like these over the past hundred years. No wonder one famous old man once exclaimed: Our people most definitely can t play football!. He then suggested that we disband all the football teams and use the fields to grow cucumbers. Even after last year s terrible showing at the European Championship in France, Russian fans haven t given up on our national team or on football in general. According to a survey conducted by the Russian Public Opinion Foundation, just a month after the championship was over Russians voted for football as their favorite sport. Hockey and figure skating are in second and third place in terms of popularity. Note that both of the latter types of sport are considered winter sports, which makes sense considering the type of climate we live in. But still, we remain inexplicably drawn to football. For whatever reason, it remains our top priority! Representatives of other sports are starting to openly express how surprised they are by our undying love for football. Famous basketball player Victor Khryapa, a CSKA player who spent some time playing for teams of the National Basketball League abroad, said the following: I have absolutely no idea why Russians love football as much as they do. It is definitely the most popular sport in the country. Frankly, I don t understand it. If you compare the accomplishments of our basketball players to those of our football players, the basketball players have certainly done better. But this isn t about who is better, Victor, this is about true love! And has anybody ever been able to articulate what true love actually is?! 86 CAPITAL IDEAS April-June 2017

89 when will our love for the game yield results? In Russia, many people are beginning to think that it s time we get to the bottom of our love affair with the sport. In the spring of last year, Russian Minister of Sport Vitaly Mutko announced the launch of a popular movement called Russia Loves Football! during a press conference held in honor of the first visit to Russia by the new FIFA President Gianni Infantino. We need to change the image of football in Russia, the Minister said, Today we are launching a project called Russia Loves Football!. We will talk about everything that is connected to football in some way. It is crucial that along with the new stadiums, there is new football in Russia, new fans of this sport. The World Cup in 2018 will have a lot to do with this. Gianni Infantino supported the Minister and the movement by proclaiming I love football in Russian. Even President Vladimir Putin has talked about our love of football. Right before the Confederations Cup, a tournament that traditionally takes place before the World Cup, Putin noted that people in Russia love football. He added: I m really hoping that this love of football will transform into a top quality game! Everybody in Russia hopes so! April-June 2017 CAPITAL IDEAS 87

90 Life&leisure Time for a pint! An overview of the best sports bars in the city Arena Olimp Large-scale sporting events the 2017 Confederations Cup and the 2018 FIFA World Cup are almost here. Unfortunately, not all fans will be able to watch their favorite teams play from the stands. A lot of people in Moscow will be enjoying the football games from sports bars, which are equipped with everything one can ask for: enough room for friends, drinks, snacks and, most importantly, live broadcasts of football matches. The biggest sports bar in Moscow, with the atmosphere of a real stadium. There are live broadcasts of all key athletic events (you can find a detailed schedule on the website). The bar is split up into several areas: a big hall for 350 people with a ten-meter screen and 8 small VIP areas with plasma TV screens that can seat 5-45 people. Highquality sound systems make guests feel like they re at a real stadium. The menu includes American and European cuisine. Address: Avtozavodskaya Ulitsya 23, bldg.15, m. Avtozavodskaya, Tulskaya Website: Liga Pap This restaurant is all about sports and food, and features 20 large format displays and a huge projection screen that shows the biggest athletic events in 3D. The main hall has tables mounted on stands and facing the screen so that guests can feel like they are a part of the action and immerse themselves in the game as if they were at the stadium. A lot of famous sports commentators broadcast directly from the restaurant. There is a special cold room for storing draft beer for every taste. The menu features snacks and main dishes from just about every corner of the world. Addresses: Bolshaya Lubyanka 24/15, m. Chistiye Prudy, Turgenevskaya Krasnoproletarskaya Ulitsya 16, bldg. 2, m. Novoslobodskaya, Mendeleevskaya Website: 88 CAPITAL IDEAS April-June 2017

91 Hooters Bobby Dazzler pub This is more than just another pub in Moscow it s a legendary American sports bar in the very heart of the capital. 35 full HD screens let visitors enjoy every sports match to the fullest. The bar is just as serious about preparing for live broadcasts as the stadiums are about preparing for games. There are more TV screens than tables here, so guests can request to play a game they are most interested in seeing on the TV in front of their table. There are also 2 huge video walls here, which let guests watch three TV screens at the same time. The face of the sports bar is the Hooters Girl beautiful, cheerful and friendly. They sport a spectacular uniform and are always ready to help the guests. Address: Bolshoy Zlatoustinskiy Pereulok 9, m. Kitai-Gorod Website: ShtirBeerLitz This spot is decorated like a traditional British pub and perfectly combines elements of the past and present. The wide beer selection, plenty of snacks to pick from, specialties and a friendly atmosphere have all made this pub a very popular place. Football here is like a religion, and love for any type of sport is highly encouraged. There is enough at the pub to keep you entertained without exhausting you. The TV screens feature live broadcasts of the most interesting matches. Moscow Reds, the Moscow Manchester United fan club, are regulars at the pub. When MU is playing, the bar is absolutely packed and the atmosphere resembles the stands at Old Trafford. Address: Kostyansky Pereulok 7/13, m. Chistiye Prudy Website: A chain of pubs that host live football broadcasts. This is the ideal place for groups of men who love football. The main advantage of these restaurants is the location of the screens, which allow guests to watch the matches from anywhere in the restaurant. If guests are interested in a more private evening (a date of a business meeting, for example), there are also quiet VIP areas. The bar has over 15 kinds of beer from Germany, the Czech Republic, Belgium and Russia, along with a wide cocktail selection. List of locations: Tornado A relatively new chain of sports bars that is sure to make the city s sports fans jump for joy. There are great burgers and steak, along with plenty of great cold beer. Those who prefer stronger drinks or don t drink at all can visit the café or club, which have a wide selection of drinks, from non-alcoholic cocktails to high-end wines. Everybody who can t make it to a game can watch broadcasts here. Moreover, Tornado, which is also the Liga Stavok bookmaker bureau, is the leading bookmaker chain in Russia. Bets can be made online for all athletic events: football, hockey and basketball. List of locations: April-June 2017 CAPITAL IDEAS 89

92 Life&leisure Chelsea gastropub A spot that combines the elements of a traditional pub with a great food selection, this pub is for true connoisseurs of English style and attitude. There are over 100 different kinds of whiskey, a big wine selection and fresh beer that all go great with the chef s specials. The pub is a comfortable atmosphere for watching sports broadcasts around the clock, which is what sets it apart from other pubs. There are a total of four halls to watch the broadcasts from. The main hall can seat 80 people and is equipped with a big projector and three huge plasma screens. Different types of furniture and a podium add an extra layer of comfort. This English pub is perfect for politicians, businessmen and young people alike. Address: Maly Gnezdnikovsky Pereulok 12/27, m. Pushkinskaya, Tverskaya, Chekhovskaya Website: Greene King pub & kitchen This is a real club for like-minded people with an unforgettable atmosphere that reminds one of England: the richness and restraint of dark wood, cozy soft green and walnut furniture and, of course, the taste of real British Ale. The restaurant is named after the famous English brewery Greene King, located in Bury St. Edmunds (close to the North Sea coast). The brewery has been making famous ales for over 200 years and has received multiple awards. In 2015, the first and only Russian pub that served beer from the famous brand opened in Moscow. The first floor of the bar can seat up to 100 people and the second floor can seat another 70. There are 2 big screen TVs and 8 plasma TVs, which means visitors can comfortable watch all types of athletic events. Address: Mytnaya Ulitsya 7, bldg.1, m. Tulskaya, Oktyabrskaya, Dobryninskaya Website: The Red Machine This sports café, which is open to everybody who appreciates sports and excellent food, is a great place for sports fans to get together. The Red Machine was also the nickname of the famous USSR hockey team. People come here to discuss the latest games, cheer on their favorite teams and athletes, celebrate recent victories and express the full spectrum of emotions by shouting and waving flags. Sports infuse everything here with a particular rhythm, which makes the space truly enjoyable for visitors. The plasma screens hanging on the walls put guests directly in the middle of the action, and watching the game becomes a truly spectacular and unforgettable event. Address: Leningradsky Prospect 39, bldg. 41, inside the CSKA Ice Palace, m. Dinamo, Aeroport Website: 90 CAPITAL IDEAS April-June 2017

93 Lawson's bar The story of William Lawson was immortalized in 1849, when a type of whiskey that has since taken the world by storm was named after him. In Moscow, Lawson s Bar played a big role in promoting both the whiskey and the place of its origin Scotland. A lot has changed since the bar first opened in 2012 the cocktails have acquired an original colonial twist and there is now plenty if whiskey and craft beer as well. The bar is frequented by a lot of Chelsea club fans, who use the spot as their unofficial headquarters. The playlist includes blues, jazz and rock music, giving the space an additional touch of authenticity. Address: Blagoveshemskiy Pereulok 1a, m. Mayakovskaya Website: Kosouhoff The Kosouhoff entertainment complex is located in the very center of Northern Butovo. All kinds of entertainment can be found here karaoke, a bar with live broadcasts and a men s club. Go to the bar for a pint of cold beer, to catch a football game, play foosball with friends, or celebrate an important event with friends. The menu features dishes from different corners of the world: Italian, Caucasian, Bavarian and Belarusian. There are plenty of projectors and big screen TVs for fans and people who like live broadcasts. Visitors can come to support their team over a beer and a snack. Everybody who can t attend games in person can catch live broadcasts at the bar instead of missing out! Address: Ulitsa Grina 3a, m. Bulvar Dmitria Donskovo, Novoyasenevskaya Website: Hmel & El Come to this bar in the city center with a group of friends, talk about the latest news over a pint of cold beer and enjoy the wide selection of snacks. The establishment combines the best aspects of a sports bar, a classic pub and a sophisticated restaurant. No matter what kind of gathering you re planning, everybody will feel comfortable here. There are live broadcasts of football games and plasma screens, delicious food, and quality drinks. The bar always plays the most popular and anticipated athletic events. There are also less popular games for true fans and those who follow sports closely. The sports bar can seat 70 people, which is enough for a big and loud group of people. After a night of watching the game, you have the option of taking a stroll along the Patriarchs Ponds, which are located nearby. Address: Trehprudny Pereulok 4, bldg.1, m. Pushkinskaya, Tverskaya, Mayakovskaya Website: April-June 2017 CAPITAL IDEAS 91

94 FOOD&DRINK Konstantin Ivlev: Russian cuisine is than just borscht! Konstantin, do you think foreigners are interested in Russian cuisine? Foreigners are definitely interested in Russian cuisine. Why? Because they see that Russia is developing and a lot has changed in our country in the past years. There are changes in the economy, sports, literature, theatre, film and everything else. Same goes for our cuisine. Food has always been a powerful PR tool for any country. Foreigners are curious to know what we eat, other than borscht. Unfortunately, a lot of restaurants have stopped at borscht, caviar, meatpies and pelmeni. They can t offer anything else. But it s not all bad. My colleagues and I are gradually working to remedy the situation in Moscow. We want to bring joy to both foreigners and Russians. Just 10 years ago we announced that we are going to start working on new Russian cuisine in order to show that we are capable of more than just borscht. I started to think about what can be done with those forgotten products that have been lost under a thick layer of sea bass and mozzarella. It all started when we were opening GQ bar in Moscow with the famous restaurateur Arkady Novikov in 2007 (it has since 92 CAPITAL IDEAS April-June 2017

95 Konstantin Ivlev, host of the popular culinary show and one of the most famous chefs in Russia, is a connoisseur of Russian cuisine. We asked him whether or not foreigners in Moscow are interested in Russian cuisine. We often hear the same thing in conversations with expats from all over the world, be it Italy, Japan, France of England: We really want to try real Russian food. But it s impossible to find a restaurant like that here. There are Japanese restaurants, Italian food, Georgian, even Serbian. about much more April-June 2017 CAPITAL IDEAS 93

96 FOOD&DRINK closed, unfortunately). Arkady asked me to make kotleti (burgers). I refused: I won t make kotleti. He asked me to think of a substitute. I found a store that sold cans of different types of juice, and came across a can of birch sap. I liked it so much that I cooked sterlet stewed in birch sap. Did you know what this dish would taste like when you thought of it? The inside of a chef s mind is like a library of different flavors. When I think of something and my mouth starts watering, there is a one hundred percent chance of this dish turning out great. If not, I keep working on it. And the first thing I do is put a dish together in my mind. What is birch sap? It s a combination of water, lemon and sugar. What is sterlet? It s a fatty fish that can be found in Russian lakes. Sometimes it smells like algae. In Russian cuisine, we like to combine citric acid and fish. For example, we marinade shish kebabs made out of salmon and sturgeon in lemon. This is because lemon partially neutralizes that prominent flavor fatty fish have. So I thought, why not? The fish can cook in birch sap and absorb its flavor. And it turned out to be delicious. This dish is an example of what new Russian cuisine is. It s based on three key principles. The first: we use domestic products. Of course, it s impossible to only use domestic products here. That s not necessary. But the main product in the dish must be a domestic one. The second principle of new Russian cuisine is to use modern culinary techniques. During the USSR, all of our chefs could only fry, boil and bake. Now, on the other hand, we have access to cooking utensils and methods borrowed from our foreign colleagues. There is blast freezing and vacuum seal bags. And the third principle: an original presentation of the dish. You can put the dish on a plate, or you can choose to use different symbols of Russia - birch bark, khokhloma, gzhel. Once I arranged a pretty original presentation of sashimi: I found a 2.5 kg blue brick in a store that sold construction materials. It symbolized the ocean to me. I put salmon on it, and it symbolized the fish. I really love birch sap. When you wrap a pig in it and leave it to stew, it smells like you re in a sauna. An original presentation is very important. Another important point: there is Russian cuisine, and then there is Soviet cuisine. Soviet public catering was a staple of life in the USSR until the 1980s and included dishes like the Stolichny salad. And another nuance: technically borscht is a Ukrainian dish, and pelmeni are Chinese. These are not Russian dishes, even though they are considered to be. But pirogis, kulebyaki and rasstegai were dishes served at feasts during Ivan the Terrible s reign. We ve gotten everything mixed up. I ve been joking that Ceasar salad and tiramisu are going to be considered Russian cuisine soon, since you can find them at any restaurant in our country. You have a lot of experience talking to foreigners. What kinds of Russian dishes do they prefer? What are the top five, in your opinion? Borscht would be in second place, or shchi. No way of getting around that. Russia is famous for our soups. In the summer, foreigners like to try okroshka. Pelmeni are definitely in third place. Everybody loves them, the Chinese and the Italians alike. The Italians compare them to ravioli. Fourth place... Blini? No, I wouldn t say so. It would either be game meat like deer or wild boar or Russian fish, like sturgeon. Is there traditional Russian dessert? It used to be kisel. Now...there are a lot of different things. I experiment, for example. I really love our caramel candy called Rakovaya Sheika. I made cream out of them, splitting these sweets into tiny pieces. So you eat cream that tastes like this 94 CAPITAL IDEAS April-June 2017

97 candy. I want to make a dessert for the spring menu at the Profil Professional Club restaurant: add kozinaki (nuts-and-honey bar) made out of pistachios and hazelnut to prostokvasha (a type of yogurt) and decorate it with mint and berries. What other interesting dishes do you make at your restaurant? I m the concept chef at this establishment. There was an interesting idea to combine a beauty salon and a place to eat. Clients who come in for sessions that last several hours (massages, haircuts and styling, pedicures, etc) can get hungry. They don t come in for just five minutes. Usually all of them want to eat. Before the sessions, during and after. The vast majority of clients are women, so the food has to be beautiful, interesting and healthy. We have combined three types of dishes in the menu: new Russian cuisine, European dishes and Pan Asian cuisine. What is your signature dish? I really like Caucasian and Central Asian cuisine: lobio, khachapuri, chebureki, manty, plov and much more. I make a crazy dish here: chicken breast (Yaroslavl broiler) at a low temperature (45 minutes at sixty degrees), then I spread it on caramel satsivi. I add sugar syrup to create an unusual flavor. Then I top it off with tomatoes, a bit of basil, olive oil, and some garlic. And I decorate all of this with fried basil. But this isn t a Russian dish? As a person who was born in and raised in the USSR, I still can t really separate Russian cuisine from Belarusian, Ukrainian, Georgian, and Uzbek cuisine. When you come to a new restaurant, how can you tell whether or not it will be a good place to eat? Is it the smell? I feel the energy of the place right away, as soon as I open the door. That s the first thing. Second, when I see the people working there I immediately know what their attitude toward their business is. Third, the menu. If I see a big selection, I immediately get up and leave. I won t eat at an establishment like this. As a professional, I can tell you that it s impossible to control for quality if there are over 60 items on the menu. And some restaurants have dishes! You start reading it and forget what appetizers you wanted by the time you get to the soup. This is madness! For me, the optimal amount of dishes is is even better. It s best to have 6-7 salads, 2-3 soups, 5-6 main dishes with fish, and just as many with meat and poultry. Some desserts and fruit. And you can change the menu depending on the seasons. This is an option in our country. You make a small menu and, to make sure guests don t get bored, add something new once every four months. You can host a festival featuring some specific product or wine. Then the chef won t get bored either, and the guests will see that the restaurant is alive. There is always something new. Just three years ago, eighty percent of products in Moscow restaurants came from other countries... April-June 2017 CAPITAL IDEAS 95

98 FOOD&DRINK Now it s a fifty-fifty split. Not all Russian products can compete with their Western counterparts. For example, there is this white fish of the whitefish muksun family. It comes from the rivers and lakes in Siberia, and it s fairly inexpensive. It s about 360 rubles per kilo. But it just didn t go over well. It wasn t so popular. It s not bad, but people prefer the sea bass and dorado definitely. Even if you cook muksun right, it s still a little bit dry. And then you go to a food fair, for example, and representatives from a fish factory say: Get a ton of muksun. What am I going to do with that much fish? They haven t found distributors yet. But it s not so bad. There is some progress, and this makes me happy. But honestly, I use the old grandpa method. For example, I have friends in Sochi and they ship products to me on the train from there. Through the conductors? Yes. For example, say it s wild garlic season. They send bags of it to me. We don t have some things, like French cheese, for example, But we have forests full of wild animals and birds, mushrooms and berries. We have lakes, rivers and seas with plenty of fish. We have things to show foreigners. There s just not a lot of it. There are about 9,000 restaurants and cafes in Moscow. And only about a hundred of them, in my opinion, have a good price to quality ratio. And I only go to five of those. Can you tell us what they are? I go to restaurants as a consumer - not to try new things, but just to eat. When I want fish, I go to Porto Maltese. If I want shish kebab, I go to Arkady Novikov s restaurant Kavkazkaya Plennitsya. I go to Mister Lee or Yoko when I want Japanese food. When a new restaurant opens in Moscow, I go to support my colleagues, shake their hand and cheer them on. Us chefs are all in the same business and I have a lot of colleagues and friends. We argue sometimes, but we still talk. My guiding principle is mutual respect. But I ll be honest, I get more fresh ideas when I m travelling: in New York, Paris, Singapore. In London, which is a trendsetter when it comes to fusion cuisine. The English had colonies in India and in other countries. They started combining different flavors a long time ago, adding Indian spices to European dishes, for example. That s interesting. New York is a megacity that brings together everything. There are chefs from all over the world in that city. The French are powerful in terms of classics. But in Europe and the US the chefs dictate what guests want to eat and set trends. Here, it s the opposite. Once, I was working with a restaurant that was about to open. The owner told me: No borscht, Konstantin! Do what you want, just make it modern and edgy!. We opened the restaurant. The first night, he called me and said: Hey, Semyon Petrovich came by, didn t see borscht on the menu and left. So let s put borscht on the menu tomorrow. I decided to stop working with him. First, he broke our contract. Second, I need the restaurant owner to trust me. I ve been trying to change attitudes toward chefs in our country for the past 15 years. We re not drunks or thieves who go home with bags of groceries we steal from the restaurant, which is how things used to be in the USSR when I was a kid. In France and Japan, chefs get less sleep than lawyers. What kind of training to Russian chefs get? 96 CAPITAL IDEAS April-June 2017 We still use programs from the 80s and 90s at culinary schools here. We teach the classics: Russian and Soviet cuisine. But we don t teach the basics of modern cuisine. So all young chefs suffer from borscht syndrome. Thank God, there is a new generation now. They are interested in experimenting and, most importantly, the restaurant owners trust them now: Do whatever you want!. Unfortunately, modern Russian cuisine is hard to find at restaurants in Moscow. These dishes aren t commercial food yet. Borscht, oliver salad, herring under fur coat - this is commercial food. These are real brands! Sometimes people will say they opened a restaurant featuring new Russian cuisine, but you go there and realize that it s the same old song. Just the chef put it on the plate in a different shape. Or a friend calls me and says: I came up with a new kind of borscht. I whipped it into a foam. I ask him if he has lost his mind. There are some dishes that don t need to be transformed.

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100 Football is the only sport where you put people together, it doesn't matter if you are rich, or poor, or black, or white. It is one nation. Pele