Mary Dejevsky: Russia Notebook, Part 1

The new face of travel, consumerism, an investment experiment and the German touch

Vladimir Putin tours the Volkswagen assembly plant in Kaluga in 2009 (REUTERS/Alexander Zemlianichenko)

Last week, as you may have seen from the Notebook in Wednesday’s Independent comment pages, I was in Russia with an international group of specialists, at the annual Valdai Club gathering. Since they started eight years ago, these meetings – convened by invitation of the Russian news agency, Ria-Novosti, and coordinated with the Kremlin - have culminated in a question and answer session with Vladimir Putin, first as President, then as Prime Minister, and this year as prime minister and – it is assumed – third-term President in waiting.

The programmes offer privileged access to senior Russian officials and usually a glimpse of life outside the capital as well. This year we spent two days in Kaluga, two hours south-west of Moscow by road, which has become a centre for foreign investment centred on car assembly and electronics. The week is highly concentrated, with almost no spare time. I kept notes, but did not blog. It seems a pity, though, not to share some impressions about the state of Russia in the run up to parliamentary elections on 4 December. So here is a retrospective diary of impressions.

Sunday 6 November

NEW FACE OF RUSSIAN AIR TRAVEL

Flew to Moscow by Aeroflot, which now flies Airbuses and young crews with smart new navy uniforms, name badges and a cheery manner, welcoming you on board in Russian – perhaps they don’t expect many foreigners to fly Aeroflot.

As we approached Sheremetyevo airport with the flickers of a Goetterdaemmerung sunset lingering on the western horizon, the ground is peppered with lights; you can see roads, buildings and traffic. I hadn’t flown in to Sheremetyevo – which used to be the only international airport, but now has competition – for a good few years. A decade ago, you would see only forest below.

We arrive at a recently opened new terminal. State of the art, with no stairs – please note, Heathrow terminal 5 – and not too far to walk to passport control. There, alas, are all too familiar traces of old Soviet-land. They keep closing and opening booths, and people swap queues accordingly. I’m absolutely useless at this and end up even further back than at the start. The whole operation, viewed from the ceiling, might make a useful contribution to mathematical Game Theory.

RUSSIANS AS CONSUMERS

The advertising along main roads connecting to the airports always offer an introduction to the state of the consumer market. As recently as 12 years ago, it was beer and cigarettes. Then it was quite basic furniture; then it was flats and houses, then it was mortgages and consumer credit. Now it is travel and what might be called discretionary spending: new kitchens, consumer durables, cosmetics, private medical services.

OLIGARCH-CLASS HOTEL

We are staying at the recently re-opened Ukraina hotel, the flagship Radisson in Moscow, which has been radically refurbished in lavish, one might say oligarch style. It is one of Stalin’s “ wedding cake” high rises and a Moscow landmark. From the 15th floor, I have a view across the river to the new business district. The White House – seat of the Russian government is just over the bridge – and the skyline is punctuated by high-rise buildings that I’m pretty sure weren’t there even a year ago. Outsiders and Russians often complain that Russia has stagnated. But it depends how you define stagnation. They have certainly been very busy building.

WHERE ARE THE KIOSKS?

It’s around 10pm and I venture out into the cold and dark, first to try to judge how safe the streets might be, and second to see whether there might be a 24-hour kiosk to buy a snack. Safety-wise, it feels fine. Kiosks are another matter. A year or so ago there were two not far from the hotel. Now, the wide pavements are bare. The former mayor of Moscow, Yuri Luzhkov, ousted in some rather nasty politics a year ago, had decreed that it was time for the perestroika-era kiosks to go. Supposedly they were a disfiguring anachronism – and it was time for serious shopkeepers to get themselves proper shops - but they fulfilled a very useful function. Alas, they are now gone from most of central Moscow.

Monday 7 November

NEW FACE OF ROAD TRAVEL

Up for bus departure at 0830, which – as the alarm clock on my mobile phone tells me - is 0430 London time, and feels like it. It’s still pretty dark. Two coaches carry the Russian and foreign members of the Valdai group at a stately pace out to the south west of Moscow. I know the first couple of miles well, as it is the part of Moscow we lived in when I was based there as a correspondent, 1989-92. Even that has changed hugely; Kutuzovsky prospect is becoming a luxury shopping street. The further suburbs have changed even more, with new housing and new shopping centres – where ad hoc electronic goods markets once were. It’s still rush hour and there’s an enormous amount of traffic coming in to Moscow. Moscow has good public transport, but metro stations are very far apart once you get out of the immediate centre, and first-time car owners have not yet figured that public transport can be a  quicker way of getting from A to B in a big city with inadequate roads.

Still the same stately pace of change in the countryside. Showy new mansions, new wooden  dachas, new roofs, new roadside motels and cafes – “We’re open!” Say big gaudy signs on the roofs – and little outcrops of villages with rows of utilitarian shops. There’s dual carriageway most of the way to Kaluga, with noise suppressing fences in many places – a new development this.

KALUGA – AN INVESTMENT EXPERIMENT

The moment we cross the regional line, from Moscow region to Kaluga region – a border marked by a gigantic welcome sign in antique style – vast brand-new warehouses line the road. It’s a difference that reflects the tax and investment policy of the Governor of Kaluga, Anatoly Artamonov, who has been doing his utmost to attract foreign industry, with a reasonable degree of success.

Artamonov began his career, like many regional governors, in the Communist Party structures and switched smartly to the local government structure as the Soviet Union fell. His much-quoted pledge is that: No one who invests in Kaluga will lose a rouble from their investment.

THE GERMAN TOUCH

Half an hour later, on the outskirts of Kaluga, the coach swings sharply right, opposite a seemingly unending single-storey grey complex, identified by its sign as Volkswagen’s flagship assembly plant. Our hotel, the Ambassador, turns out also be German, an entirely functional structure, which has attracted local attention as Kaluga’s first four-star hotel. Is it really four-star, I was asked by one local person. Well, it’s probably more like three-star, to be honest, but wonderful for all that.

Trucked in, I imagine, in sections from Germany, it is to my mind almost the perfect hotel. Rooms have enough space, not too much, logically arranged. The lighting is excellent, bathroom fittings work spectacularly well and are all solid, modern and German. Sockets are plentiful and in the right places, all – British workmen, please note – set completely square. The complex includes flats on the same model for German managers and visitors. I would be happy to stay there for a lot longer than the two nights we have. Why can’t the same guys come and build such pre-fab flats in the UK?  I would happily have them refurbish our flat. 

Mentioned in passing by the Kaluga representative as we arrive, is that a part of the region was occupied by the Germans during the Second World War. They left behind some solid buildings and reputations, good and bad. So there is a strange sort of German tradition in Kaluga. 

POLITICAL INTERLUDE: PRE-ELECTION RUSSIA

The afternoon is devoted to political discussions of scenarios for Russia’s development over the next five to eight years. This is under the Chatham House rule: but here are a few observations.

The discussion is more polarised and more specific than it was at the meeting in September 2010, in which many of the same people took part. There was much talk of the disenchantment of Russia’s new and growing middle class in the run-up to parliamentary (Duma) elections on 4 December.

The background is that Vladimir Putin, who gave up the presidency to become prime minister almost four years ago, accepted the governing United Russia party’s nomination for president in what is widely known as the 24 September coup. He seems certain to be elected in March (with the current president, Dmitry Medvedev, becoming prime minister in his place). This has been termed “ castling”, as in chess - in Russian, “rokirovka”. The idea seems to have been to boost United Russia’s fortunes in the parliamentary elections. 

 Unfortunately for the Putinites, though, the move seems to have rebounded. Rather than hailing it as evidence of continuity and stability, Russia’s new and growing middle class, polling suggests, regard it as a retrograde step. Some of these people were supporters of Medvedev, who appeared to take a more modern, more liberal and rule-or-law approach to many questions, compared with Putin. But for most it is just the principle and the message it sends that Russia is going backwards not forwards.

Coupled with widespread cynicism about the political establishment – as reported and corroborated by members of Russia’s parliamentary liberal opposition, these findings bode ill for United Russia in the parliamentary elections. At present, it holds a two-thirds majority in the Duma, which means it can amend the Constitution without courting the minority parties. Its ratings are declining all the time, however, and it looks certain to see its majority sharply reduced.

Elections to nominate regional governors held a couple of months before our discussion, left only one third surviving into a second round. The extent of anti-establishment sentiment is hard to gauge. The internet is a new force – both in spreading dissent and mobilising people – and much could depend on how far the authorities are prepared to use their “administrative resources” – their control of the state media and influence in work places.

The difficulties are two-fold: the authorities appear to have set out with the intention of making the coming elections – both parliamentary next month and presidential next March – freer and fairer than ever before. State of the art voting machines are being installed in places; there is talk of cctv in polling stations and opposition parties are planning to station their own monitors in polling stations to compile their own exit polls and compare them with the official ones. If the elections really are free and fair, the results could be unpredictable.

The second difficulty for the authorities, however, is that even if they are freer and fairer than ever before, a significant proportion of the population may not believe this, and still regard the result – whatever it is – as a travesty. Thus a genuine mandate could be distrusted, leaving everyone as cynical as before.

My impression, from these discussions, from the media, and from being out and about on the streets, is that.Russian politics is in much greater flux than is commonly realised and the results of coming elections may be more interesting than many believe. 

A WORD WITH THE INVESTORS

Dinner is at what looks like a shed, labelled the Time-Out (in Cyrillic) on the other side of the courtyard from the hotel. It has started to snow, the ground is slippery, and the evening looks unpromising. The “shed” turns out to have Tardis-like qualities, though. The interior looks much bigger and is fitted out as a Russian rustic restaurant. Food – Russian down-home fare is superb. Relief all round. So much in fact, that the conversation drowns out a couple of local entrepreneurs and joint-venture managers who have been corralled into talking to us over dinner.

Speaking to them afterwards, the two Russians are fairly standard new-Russian businesspeople, trained by foreign companies abroad and then installed as managers in Russia. One is a graduate of GE’s training programme, and now sells and services medical equipment. GE installed itself in Eastern Europe and Russia as one of the first Western companies.

I also talk to a German and a French manager – both of car plants around Kaluga – who were happy with the quality of staff, but stressed that their operations were actually quite lightly staffed – which was visible on the shop floor at Volkswagen the next day. Both were older – in their 50s, and there with their wives – but were experienced ex-pats who seemed entirely content to be where they were. Physically, they might be quite isolated – neither spoke much Russian – but decent housing, the proximity of quite decent shops and markets, foreign TV (most German stations could be watched in and around Kaluga, and some French ones, too), and the internet, all made for a much easier ex-pat life than 20, and even 10, years ago.

* Mary Dejevsky: Russia Notebook, Part 2
* Mary Dejevsky: Russia Notebook, Part 3
* Putin attacks Britain and US for 'violating Libya resolution'