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    Russian Press - Behind the Headlines, November 6

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    Putin Discusses National Security with Solzhenitsyn’s Widow/ Sarkozy May Guide Mikhail Fridman to Global Expansion/ Public Sector Accounts for Half Russia’s Economy


    Putin Discusses National Security with Solzhenitsyn’s Widow

    Yesterday Natalya Solzhenitsyn told the Russian president about a two-volume book being published to celebrate 50 years of One Day in the Life of Ivan Denisovich. She also said that Russia’s national security and integrity are at risk. Kommersant’s special correspondent Andrei Kolesnikov believes the Tykwer/Wachowski film Cloud Atlas could help improve this.

    The president and Alexander Solzhenitsyn’s widow met 50 years after One Day in the Life of Ivan Denisovich saw the light of day. Natalya Solzhenitsyn said the special commemorative edition includes One Day and readers’ letters to the magazine Novy Mir, which published it. The magazine kept these letters, many of which were addressed simply to “Ivan Denisovich,” for 50 years.

    Natalya Solzhenitsyn spoke simply and to the point: “The reason to publish these books is to preserve our collective memory. It’s a remedy for memory loss, which is a weak person’s, a weak society’s and a weak state’s disease.”

    Putin asked if Solzhenitsyn’s works are on the list of required reading in schools.

    Natalya Solzhenitsyn said One Day was added to the curricula during Boris Yeltsin’s presidency. “As for The Gulag Archipelago, it’s only recommended reading and no questions about it have been added to the Unified State Examination list,” she said.

    But if The Gulag Archipelago were to be made obligatory reading, students would have little time left to read the other books on the list, like Dostoyevsky.

    “As for national security,” Natalya said unexpectedly, inciting the interest of Putin, who knows that Novy Mir is not alone in keeping archives.

    “The number of literature courses has been cut from five to two,” she said. “In my time, people quoted from [Griboyedov’s] Woe from Wit, which formed a bond between them.”

    Now they are only brought together by the Unified State Examination and even that is not everyone and not for long.

    “What are they teaching people in place of literature? To smile at each other?” Natalya wondered.

    “The number of school subjects is increasing,” Putin argued.

    “That is completely wrong,” Natalya Solzhenitsyn replied. It was as if Solzhenitsyn himself was talking with the president.

    “There is a great threat to the country’s unity,” she said.

    “We will discuss this issue with the Education Ministry,” Putin said, although security falls under the purview of the defense department.

    In Cloud Atlas, the latest film by Lana and Andy Wachowski and Tom Tykwer, the main character watches a trailer from a prohibited documentary quoting Alexander Solzhenitsyn, and that phrase resonates throughout the film, a film that tells viewers about freedom and eternity.

    It does not matter whether or not The Gulag Archipelago is made obligatory reading in school, because Alexander Solzhenitsyn, a perfectly free man, has already become part of eternity.

    And those who have not read The Gulag will at least see Cloud Atlas.



    Sarkozy May Guide Mikhail Fridman to Global Expansion

    Ex-president of France Nicolas Sarkozy and his wife Carla Bruni are planning a private visit to Moscow. The former resident of the Elysee Palace is expected to attend a closed reception held by Russian businessman Mikhail Fridman, board member of Alfa Bank.

    Sarkozy will attend an awards ceremony for the best investments in Russia, to take place on November 13 at the Reception House of the Foreign Ministry. The award was founded over ten years ago by Alfa Bank and the University of Oxford.

    “Nicolas Sarkozy will be our special guest,” confirmed Leonid Ignat, Director of Information Policy and Public Relations at Alfa Bank.

    Ignat said the ex-president will give a speech and announce the winner. The ceremony is a private event so no media presence is expected.

    “Last year we invited former British Prime Minister Gordon Brown. Czech President, Václav Klaus, attended the year before, and the former Mayor of New York City Rudolph Giuliani was here three years ago.”

    “It’s common for former leaders to attend high-profile events for compensation. While someone like Mikhail Gorbachev does commercials for pizza, others promote innovation,” says Alexey Mukhin, General Director of the Center for Political Information.

    Viktor Averkov of the Governance and Problem Analysis Center notes that Nicolas Sarkozy may also be in town to lobby for Rosneft’s acquisition of TNK-BP, which is partially owned by Fridman (via AAR Consortium that comprises Fridman’s Alfa Group, Leonard Blavatnik’s Access Industries and Viktor Vekselberg’s Renova). Russian shareholders stand to profit heavily from the deal. Moreover, they intend to invest the funds in foreign enterprises.

    “This is an ambitious undertaking that requires both substantial expense and political protection,” says Averkov. “In other words, they need approval from both the Russian government and foreign leaders. Sarkozy could help.”

    In fact, many top Russian businessmen have high-ranking political partners abroad.

    “Oleg Deripaska, for example, established a relationship with Lord Peter Mandelson, former UK government minister,” says Averkov. “At any rate, Sarkozy is just a link in the chain Fridman is building to become an international businessman.”

    The political scientist said: “VimpelCom has basically reached the global market. Alfa Bank and X5 are still mainly Russia-based, but there is a good chance they will be expanding abroad.”



    Public Sector Accounts for Half Russia’s Economy

    State-owned company funds can be spent on mega-projects with little control, while state influence may continue to grow. The share of state-controlled companies in the Russian economy has substantially increased, say experts.

    Yulia Tseplyaeva and Yury Yeltsov of BNP Paribas write, for example, that the state controlled 10% of oil production in 1998-1999 and 40% to 45% now.

    The percent in the banking sector has increased to 49% and in transport, to 73%. In 2006, according to Gaidar Institute estimates, the public sector accounted for 38% of the economy, but exceeded 40% in 2008.

    The economic crisis accelerated the process: the public sector has risen to 50% of GDP, according to the Ministry of Economic Development, compared with a global average of 30%.

    The line between the state’s financial resources and those of state-owned companies is becoming fuzzier, experts add. State-controlled companies are, in effect, creating a “parallel budget” for ambitious projects, which seldom if ever match the companies’ real businesses.

    Gazprom is a major investor in the 2014 Olympic Games, with over 100 billion rubles, and is second to the federal budget. (The federal government is spending 466 billion rubles.) Of that amount only 31.5 billion can be regarded as related to the company’s direct business – the Dzhubga-Sochi gas pipeline. Gazprom spent 300 billion rubles on the APEC summit, compared with a government expense of 202 billion rubles.

    Rosneft, according to BNP Paribas, invests $0.7-1 billion a year in social projects in places where it produces oil.

    Sberbank’s non-core investments are estimated by BNP Paribas at $1 billion per year.

    This kind of “cooperation” between state-owned companies and government acts as a disincentive to privatization, Tseplyaeva believes. The earnings will not surpass the investment by state giants in large government projects. Despite the talk of privatization, she says, the government’s share is likely to increase rather than decrease.

    In 2013-2014, privatization is expected to bring in 1.24 trillion rubles (about $40 billion), but that is less than Rosneft’s deal with TNK-BP (around $60 billion), says Sergei Guriyev, rector of the Russian School of Economics.

    This “parallel budget” makes government spending less transparent and increases the potential for manipulation; it’s beyond the treasury’s eye, Tseplyaeva complains.

    Increasing the huge funds and resources of state-controlled companies does not increase happiness, says Russia’s former finance minister Alexei Kudrin. “Look at Gazprom,” he says. “In the past it was one of the world’s top companies for capitalization. Now its capitalization is down by many times. Multinational investment companies are already anticipating a 100 billion ruble loss, and this is a calculated value that reflects the low quality of Gazprom management.”

    According to Troika Dialog estimates, the state has lost some $80 billion in the value of the shares it owns over the past four years due to the increased risk of investing here. One reason for this is investor awareness of the fact that the state missed chances for reforms at favorable periods of high oil prices.

    RIA Novosti is not responsible for the content of outside sources.



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