Russia to develop international financial centre/stock exchanges

(Oleg Yasinsky) In case you haven’t noticed, Russia is steadily working on the future reality of Moscow as being a regional trade and financial centre for Europe and Asia. On Wednesday President Medvedev held a telephone conference with the leaders of Kazakhstan and Belarus as they plan for a trilateral summit in the second half of November in Moscow to further the integration process of the much anticipated Customs Union. The November meeting will focus on establishing governing bodies for the Customs Union and the Trade/Economic Zone.

On Thursday Mr. Medvedev hosted a meeting of the International Advisory Board for the creation of an International Financial Centre in Russia. The meeting took place at Sberbank’s central head office. Sberbank is one of Russia’s largest banks and their online banking division recently hit the two million mark in registered users, quite a feat in a country that at first was shy about using online financial services.

Russian International Financial Centre Advisory Board, Sberbank-Moscow

The Kremlin desires to make Russia into a international financial centre, beginning with the Moscow International Financial Centre (IFC). As part of the plan Medvedev announced plans to merge Russia’s two biggest trading floors – the Moscow Interbank Currency Exchange [MICEX], and the Russian Trading System [RTS], and have finalized an essential draft law on a central depositary.

Speaking to participants President Medvedev described the project as a way to take the country’s economy to a new level, create new jobs, and open up new markets with the aim to attract investment from abroad.


(This week Mendeleyev is covering the Herman Cain campaign in a 4 day swing of the southern USA. Guest writing for the Journal is Oleg Yasinsky.)



Lay’s gets crabby with Russian potato chips

Some ideas are just plain strange. Odd, isn’t it, that many of the strange ideas come from the West?

Heinz drooled over this potential new market some years ago. Russians love ketchup, in fact it could be a food group all by itself. So could mayonnaise and sour cream now that I think about it.

What Heinz didn’t realize is that Russians often want 2 things out of their ketchup:
1- They like it to be more “fluid” that the constipated ketchup slowly oozing from the Heinz bottles.
2- Any Russkaya (Russian female) can tell you that a proper ketchup must be able to function as a tomato paste or as spaghetti sauce at a moments notice.

Even while claiming to have researched the market, when Heinz came to Russia they brought a sugary and slow moving tomato paste to town. It flopped. Heinz lost money, reputation and market share before eventually learning how to make a good Russian ketchup.

Now we’re wondering whether Lay’s the potato chip maker is on to something big, or have they lost their marbles? It’s too early to tell but we’ll let you know at some point in the future.

Time for a mini language lesson:

There is no c sound in the Cyrillic alphabet. Of course there is a letter resembling a C, but it is an S when sounded.

Therefore most words we’d associate with C usually begin with the letter K. Just like this one: краб.

If you guessed that краб = crab, then you’ve already figured out that Lay’s has decided to introduce crab flavoured potato chips on Russian/Ukrainian/Belarussian market shelves.

After sampling, I’ll politely pass (remind me to sell that Lay’s stock after writing this). You might enjoy the taste however and perhaps the Lay’s folks are on to something really big. Russian tastebuds and pocketbooks will eventually tell Lay’s whether it’s a really big success or a monumental blunder.

Lay’s shareholders will be very crabby if this idea sinks.

In Russia it’s all about the chocolate!

Sitting on a plane making ready for takeoff from Atlanta a few days ago I listened to a guy in the row behind me wax eloquent on the glories of Russia to his seatmate. I kept quiet — nothing ruins a good conversation like input from someone who knows what they’re talking about — and listened with a smile.

To hear it from this fellow, all the ladies in Russia have blonde hair and blue eyes and the food is just like American cuisine; in fact, he seems to believe that most Russians eat at McDonalds every day. Perhaps he is right and I’m just blind to it all.

That is okay because he did get it right in one area…the chocolate.

Oh boy, especially that European dark confection that causes a diet managed diabetic like myself to risk it all for just a taste. While no one is watching, of course.

So much chocolate, so little time!

There is even a fast growing chain of chocolate oriented stores that serve great chocolates along with tea and fruit drinks.

What a country!

Medvedev and Putin are down on the farm

(Stavropol, Russia) Down on the farm is where the Russian president and prime minister spent their day. For our European and Asian readers, down on the farm is an American idiom. Ask about a farmer and whether he’s working, you’ll often get that expression as the answer. It is also the title of a country music folksong by singer Tim McGraw but we sort of doubt that either Dmitry Medvedev or Vladimir Putin are all that much into American country music.

L-R: Russian President Dmitry Medvedev and Prime Minister Vladimir Putin.

In August they went fishing and came home with a big announcement. Today the two men went down on the farm and so far while there have been no big announcements, it did seem that while in the Stavropol region the two managed to combine working meetings at a Rodina farm (Russian collective farm), met with local United Russia party officials, and took part in a fairly comprehensive tour of the very modern Stavropol Regional Vascular Medicine Centre.

L-R: Rodina farm director Viktor Orlov, Russian Prime Minister Putin and President Medvedev.

Although smiling, Rodina farm director Viktor Orlov most certainly got in his workout today and will sleep very soundly tonight. The most important aspect of this trip was to see Medvedev and Putin working together. The two had experienced a fair amount of tension, particularly in the past 18 months leading up to the announcement of who would run for president in 2012.

President Medvedev inside the Stavropol Regional Vascular Centre.

Stavropol’s Vascular Centre treats patients from around the country. While there President Medvedev saw a model of the future Clinical Perinatal Centre to be built next door and looked over operations for the Republican Children’s Hospital. The Perinatal Centre will be completed by the beginning of 2014.

President Medvedev harvesting corn in Stavropol.

While at the farm, President Medvedev and Prime Minister Putin each got a turn at harvesting corn while learning about the farm’s operation.

Russia will overlook Tymoshenko conviction if Ukraine gives up EU integration

(Yahoo News) After a week of bruising criticism from the West over the jailing of his main political opponent, Ukrainian President Viktor Yanukovych on Tuesday heard the words that put all strongman leaders at ease.

“It’s Ukraine’s internal affair,” Russian President Dmitri Medvedev said of the seven-year jail term handed down last week to Ukraine’s former Prime Minister Yulia Tymoshenko. The Kremlin chief then suggested he could offer Ukraine a discount on gas prices and called for Kiev to turn its back on its long-held desire for European integration by instead joining a Moscow-led trade bloc. Medvedev’s message was clear: if you join us, we will give you cheap gas and won’t hassle you over trifles such as the rule of law like the West does.

That same day, the European Union cancelled Yanukovych’s visit to Brussels, which had been scheduled for Thursday, casting doubt on a planned deal on free trade and political cooperation. As Europe cools relations with Kiev amid Yanukovych’s refusal to release Tymoshenko and broader concerns about backsliding on democracy, Russia appears increasingly confident it can pull Ukraine into its sphere of influence.

Read the rest of the article here.

Belarus issues sweeping new violent powers to KGB

Dictatorship is not a pretty thing. In Belarus it is especially ugly and yesterday the government of Aleksandr Lukashenko granted sweeping powers for the KGB to more easily arrest citizens, enter homes and businesses, and use more violent means against protestors.

Regular street police, the "Militsiya" have powers to beat citizens as well. (photo: Toxaby LJ)

Part of the new law reads (translated), An officer of a state security body does not bear responsibility for injuries and damage caused by use of physical force, special and military equipment, use of weapons in the cases covered by this Law or by other legal acts, when he acted in the conditions of substantiated professional risk…

And when can state security officers use violence? During arrests and taking to state security agencies suspects against who show defiance or insubordination, as well as persons detained on an immediate suspicion for committing a crime, persons in custody when they show defiance or insubordination or there are reasons to believe that they could escape or do damage to people around them or themselves; termination of mass disorder and group violations of public order or actions aimed at damaging and (or) destruction of property.

And how about additional justifications not spelled out in this law? A representative of state security agencies has a right to use weapons, including firearms, and for the use of firearms also in cases determined by the President of Belarus.

For the past several months the citizens of Belarus have been conducting “silent protests” by walking the streets and simply clapping hands while saying nothing. Last month the dictator made it a crime to clap hands in public and to do so means a certain prison sentence.

As of this week the only region where citizens still clap hands as a sign of silent (and non-violent) protest each Wednesday is the city of Gomel. Away from the capital, Minsk, the people of Gomel have continued their Wednesday clapping but that too may be subject to heightened crackdowns by KGB and police.

The Belarussian human rights organization Chapter 97 says that Vital Pratasevich, an active participant of “Revolution by social network” group was been brutally beaten in Gomel. Pratasevich was returning from work when he was attacked by a group of unknown men after exiting a Gomel trolleybus.

The men wore facemasks but ran him down in a public park and then proceeded to beat him in the head and abdomen areas, splitting his eyebrows and leaving him with head wounds and bruised. Mr. Pratasevich had received threats from state security officers after the latest protests actions in Gomel.

Belarus KGB thugs hide from their victims.

Previous presidential candidates Andrei Sannikov and Mikalai Statkevich, oppositional leaders Zmitser Bandarenka and Zmitser Dashkevich, human rights activists Ales Byalyatski, and businessman Mikalai Autukhovich, all peaceful opposition activists, remain in prison. Other participants of the peaceful December 2010 rallies sentenced to a term in a penal colonies are serving their terms as well.

Opposition groups have called for a nationwide rally for solidarity with Belarussian political prisoners at 1900 hours (7pm) Minsk time on Friday, 21 October.

Is China shifting investment focus to Russia?

If you wondered where the Chinese will focus much of their investments next, here is the answer: Russia. The news from last week’s visit to China by Prime Minister Putin is highlighted by the announcement that China will ramp up investment in Russia, including building and operating it’s own strategic assets on Russian soil.

Prime Minister Vladimir Putin and his Chinese counterpart Wen Jiabao following bilateral talks in China.

During the Putin visit, China committed to the creation of a $1 billion joint state fund designed to inject capital into the Russian economy. Experts say that the fund would be equal to the entire sum of all Chinese investments in Russia since the breakup of the Soviet Union.

This is in addition to the Chinese financing for construction of a new gas-fired power plant in Yaroslavl last month. Chinese corporation Huadian will control 51 percent of the project and Russian energy company TGK-2 will operate the plant.As reported earlier this year in the Moscow Times, China will provide financing and share ownership of multiple power stations in Siberia, a joint project with Russia’s private EuroSibEnergo. When completed the stations will generate electricity for consumption both in Russia and China.

Prime Minister Vladimir Putin met on 11 October with his Chinese counterpart Wen Jiabao in China.

Experts point out that this is part of a master plan by President Medvedev and Prime Minister Putin to expand Russia’s industrial base in an effort to ease reliance on gas, oil and other natural resources as the primarily engine for economic stability and growth.

According to the Moscow Times the State Statistics Service says that current Chinese investment in Russia totals around $1.1 billion.