Russia
History
Kremlin treasures
India
The Tsars' possessions
are worth a watch
REPORT
P.08
...Marching towards a common future
Opportunities Consumerism hit Trans-Siberian
A Business Report from The Economic Times
still exist by slowdown Railway
In association with Rossiyskaya Gazeta
MUMBAI
●
NEW DELHI
Investment in Shoppers are An Indian's travel
Wednesday, July 08, 2009
Russia advisable cutting costs tales
P.03 P.05 P.07
THE ECONOMIC TIMES
The still sparkling business
Expats are paid
well in Russia
The diadem, created in 1890 in St.Petersburg The best-paid expats in the Switzerland and India – 25-
and decorated with 822 diamonds and world are found in Russia, and 27pc (an average of 16 pc).
70 rubies, belongs to the heirs of Russian a third of those rake in over a Foreigners in Australia and
Romanov Tzar dinasty, living inUK $250.000 a year. By contrast, Belgium get paid the least –
expats working in the USA and 63 pc and 61pc respectively.
UK have been badly hit by the But among Western employ-
crisis, and 25 pc of them are ees, Russia is considered one
about to pack up, says of the most uncomfortable
statistics collected by the UK- countries to live in, and Mos-
based HSBC Bank Intl. cow is one of the most expen-
sive cities in the world for for-
MIKHAIL OVERCHENKO
eigners. That is why foreign
VEDOMOSTI expats have always been paid
more in Russia. 97pc of the
Over 3100 businessmen who respondents said that their
represent companies from 29 dispensable income, savings
sectors were surveyed from and investments are higher
February to April of 2009. than they are in their home-
The quality of life of the busi- countries. For this reason, 83
nessmen was determined by pc are not planning on re-
four criteria: yearly income turning home, although 73 pc
($200,000 per annum), dis- were forced to cut spending
posable income ($3,000 a due to the crisis.
month), opportunities for High salaries in Russian
savings, and number of lux- banks made Moscow one of
ury items (a minimum of the most attractive places in
two). The average value of the the world for analysts, maga-
four indices determined the zine Institutional Investor
average rating for the coun- noted last year. Renaissance
try. Capital, for example, spent
Russia took fi rst place out of nearly $35 mn on their team
26 candidates, second place of analysts in 2007. “There is
for the amount of income and a great demand for analysts
savings. When it comes to dealing with complex analy-
spending money, foreigners sis, and people are willing to
working in Russia do not like pay for them,” the magazine
to “throw their money cited Renaissance’s Chief
around”: they come in the Strategist, Roland Nash, “If
15th place for the amount of you want to make a fortune –
luxury items they own. head East.” However, because
Almost half of the foreigners of the crisis, Renaissance cut
working in Russia (43 pc) re- a great number of employees,
ceive more than $200,000 a from 1230 to 720. The dollar
year. Russia has the highest earnings of those who stayed
proportion of those who with the company had been
make over $250,000 – 30 pc; decreased, said a source from
while Hong Kong, Japan, the company.
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REUTERS
Frontlines of
ALEXANDER DEMIANCHUK_
All that
Russia has a long history of number of jewellery compa- tics from the Russian Jewelry elry sales. The Russian jew- plenty of natural sources for innovation
jewellery making since the nies has shot up 1,300 pc, and Trading Council. There are ellery market is estimated to raw materials.
glitters: an
former royal houses were jewellery production has approximately 22,000 jewel- be $3-3.6 bn a year. For the The Russian jewellery mar-
known as great collectors of grown 25-30 pc. Before the lery companies operating in sake of comparison, the jew- ket has been affected by the A crisis is no reason to Strategy Until 2020, ap-
industry
jewellery. The best jewellers break-up of the former Sovi- the country today. The Rus- ellery market in 2004 was world economic crisis and abandon the idea of an proved by Putin in November
worked for the Tzar, the most et Union, there were only 150 sian Jewelry trading Council evaluated to be $1.5 bn, and estimates project a 30 pc fall innovative economy, believes last year.
overview
well-known of whom was jewellery stores in the whole estimates that there has been in 2005 it reached $2.1 bn. in Russian domestic sales for Vladimir Putin, Russian prime President Dmitry Medvedev
Karl Fabrege', who worked country while today there are a 10 pc increase in income per The market is well estab- 2009.
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minister. To foster this, the is also concerned about mod-
for the House of Romonov. 4,000 jewellery stores in Rus- person which is in accord- lished and has a broad infra- government is ready to take ernisation. In May, he set up
Over the past decade, the sia alone, according to statis- ance with a 30 pc rise in jew- structure for marketing and
TURN TO PAGE 2
tough measures: enterprises a special commission on tech-
that refuse to innovate must nological advancement. The
be driven from the market. President personally took
President Medvedev is also charge of the process of mod-
working on the issue. ernisation as “a political sign
is needed, one that would
Trends The co-operation between the BRIC countries holds a lot of promise Interview ALENA CHECHEL
come from presidential level,”
VEDOMOSTI explained his aide Arkady
The birth of a multipolar world
Madhavan
Dvorkovich.
Nair, ISRO
Innovation in the Russian In the wake of a crisis, busi-
economy remains low: only nesses must do anything pos-
Chairman
9.4 pc of enterprises engage sible to survive – and do not
in it, Putin said. In Germany, have time to develop innova-
it is 73 pc, in Belgium 58 pc, tion, argues Igor Nikolayev, a
Very recently, Yekaterinburg Of course, we must not forget The report notes that in the in Estonia 47 pc, and in the partner at auditing fi rm FBK.
set the stage for a historic the socio-economic, techno- 2040s, the BRIC countries’ Czech Republic 41 pc. He believes the government
event. The BRIC organisation, logical and military capacity GDP will be bigger than that Putin’s concern is that to- should direct all its efforts to
with potential to exert great of the BRIC countries is still of the G7. day’s economic turmoil cre- stabilising the economy, in-
influence on the future of considerably behind the USA Can these four countries be ates additional risks: compa- stead of demanding modern-
humankind, set a benchmark. and EU. They face serious considered natural allies? On nies make short-sighted de- isation. But modernisation
On 16 June 2009, it became a modernisation challenges, the face of it, such an alliance cisions to cut investment and was nearly non-existent be-
physical reality at the first which must be overcome for is impossible. The countries postpone plans to revamp fa- fore the crisis: the problem
official summit of leaders of the BRIC countries to fulfi ll don’t share a common civili- cilities. This is a “dead-end”, lies with minimal competi-
Brazil, Russia, India and China. their predicted major role in sation or religion, unlike, say, he says, and the government tion within the majority of
the future world. Neverthe- the EU. They have different may be forced to play rough, industries – companies have
VYACHESLAV NIKONOV
less, all serious forecasts back political, economic and fi- Madhavan Nair: "India coop- creating conditions where grown complacent and have
PRESIDENT, POLITIKA FUND them. Thus, the American nancial systems, and this erates with Russia in many enterprises refusing to inno- no impetus to implement
VLADIMIR RODIONOV_RIA NOVOSTI National Security Council’s makes drawing up joint ap- fields of exploration and vate would be “effectively new technologies. According
So how big a deal is BRIC? Amcommy nonsed et volessectet lor sent ut lorem dolobor in hent report Global Trends 2025: a proaches a difficult and peaceful uses of outer space." driven from the market”. to government plans, by 2020,
Today, maybe not so big, but Transformed World recently lengthy process. The BRIC He also shares in inputs on Potential measures include Russia will be the world’s
in the long-term, it could be recognised that the future countries have suffered from the successful Indo-Russian tougher technical standards, fi fth largest economy with a
huge. The role of the BRIC people). They possess enor- 7-10pc per year and were in will be a multipolar world, in the crisis in various ways and co-operation. Among the environmental requirements, GDP of $30,000 per capita,
states is defi ned not least by mous natural resources, in- the top ten world economies. which China and India will each one will come out differ- several domains affected by industrial safety, and bans on 40-50 pc of companies imple-
their sheer size – they ac- dustrial potential and cul- The BRIC countries’ GDP has join the USA to form a trio of ently – so differentiation be- the ongoing slowdown, where wasteful technologies. menting innovations (up
count for more than one tural strength, and they are now reached 15pc of world economic giants, while Rus- tween them may become does this relationship stand? The concept of transition from 8.5 pc in 2007), and
quarter (25.9pc) of the world’s regional leaders. Before the totals in exchange rate terms, sia and Brazil will grow much even greater as a result.
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from a raw materials-based technologies and intelligent
land surface and over 40pc of world crisis set in, they were or almost 25pc in terms of stronger if they manage to economy to an innovative one network services represent-
the global population (2.7 bn growing at an average rate of Purchasing Power Parity. stick to modernisation plans. CONTINUED ON PAGE 4 READ HIS INTERVIEW ON PAGE 5 was officially sealed in the ing the bulk of exports.
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