Inside Krasnodar | 2008

You can imagine my surprise today when, while I was scanning through my RSS subscriptions in my Google Reader, I saw that La Russophobe had written an “Editorial” lambasting me and my opinions on Russia. I’m proud to say that I am now on the list of La Russophobe’s most hated Russophiles. What an honor.

For those of you who don’t know about La Russophobe, it’s an anonymous anti-Putin, anti-Russian hate-filled blog. The blog itself is actually quite well produced and very voluminous in its daily posting about how “scary” Russia is becoming under Putin. The blog is quite obviously someone’s full-time job. The blog owners care very much about touting their viewership numbers which leads one to believe that there must be a direct correlation between the performance of the blog and the compensation received by the blogger(s).

I would guess that the blog is being produced by a think tank-like group in new York or Washington, DC. While we may not know the identity of the bloggers behind la Russophobe, I would venture to guess that the motivation for the blog is related to NATO’s expansion in Eastern Europe. How?

Without an enemy, NATO becomes an anachronism and kind of irrelevant. With the end of the Cold War many people suggested it was time to shut-down NATO. However, were NATO to be shut-down that would negatively impact weapon sales to current and new NATO members. Remember that each Eastern European country who joins NATO needs to completely scrap all their old Soviet weapon systems and buy new weapons from military companies in NATO countries. Therefore, the expansion of NATO is actually more about “market share” and business than about competing ideologies.

La Russophobe plays a very important role in creating this myth that Putin and Russia poses a serious threat to Europe. By continuously printing outrageous opinion pieces and spinning everything happening in Russia in a negative light, La Russophobe has made it somewhat acceptable to bash Putin and Russia. Kind of ironic that they are doing this bashing just as Russia is becoming one of the most power economies in the world.

We are now seeing mainstream media in the West and US Presidential candidates saying many of the same things that are printed on La Russophobe. This is frustrating for those of us who actually live here in Russia and see on a daily basis a very different Russia than the one most Westerners read and hear about.

In this socalled editorial, La Russophobe mentions my affiliation with another positive blog focused on Russia called “Russia Blog.” Actually, I don’t even know the guys who created the Russia Blog other than a couple emails where they asked if I would be willing to let them re-publish a couple of my own blog posts on their Russia Blog. I told them sure, why not? They seem like good guys and I have benefitted from the increased exposure.

La Russophobe kind of amusingly suggests that I’d “sell my Grandmother if it would make me a buck.” Besides the fact that both my grandmothers are deceased, I find it strange that such an over-the-top Conservative American blog would be upset by someone who seeks to conduct business in Russia. Didn’t everyone want to increase trade with Russia 20 years ago with the idea that Capitalsim would bring change to the Soviet Union. And now all of a sudden, doing business is bad? Whatever.

The reality is that I live and work here in Russia because I not only like living here a lot but I also strongly believe that the opportunities that exist here now in Russia are amongst the best in the world. Is my blog related to my doing business here? Sure. I write positively about Russia because that’s how I feel. My positive feelings about Russia are also what brought me back here again. I will never apologize for being a very vocal supporter of Russia, in general, and Putin, in particular.

Sure, Putin may not always win on style points but he has gotten the job done in a time and a place where that’s quite an accomplishment. Every month that passes proves my support of Putin is well-founded and correct. The thing to remember about Putin is that he truly has the best interests of Russia in mind when he makes decisions. Part of the problem with Putin is that he has lacked a President in the United States with whom he could have a serious dialogue about the serious issues confronting both countries.

Lastly, I think I might have embarrassed the guys behind La Russophobe when I was able to buy the domains www.larussophobe.com and www.russophobe.com Can you imagine that they went to such trouble to create this big blog and they forgot to register their own domains. They went with Blogger because of it’s anonymity but they should have had the foresight to buy the domains. If anyone would like those domains, let me know. I have no use for them myself.

So, I am now proudly on the most-hated list of La Russophobe!!

PS: Yes, I did make a prediction about how the transition between Putin and Medvedev might happen and I was wrong. Oh well, can’t win them all ))))

I just received another email from a friend of mine who works at a big Western NGO. My friend is quite bitter and jaded regarding Putin, in particular, and Russia, in general. Maybe it was the years he was stationed in the Balkans? I’m not sure. While I have given-up trying to change such Rossophobic voices, I still am interested in seeing the reporting on Russia done better.

So much of what is written about Russia is the Western mainstream press is one-dimensional and a twisted perception of what’s happening here. Don’t get me wrong. There are many things about Russia today which drive me nuts!! There are many many things which need to be improved.

Ultimately, it comes down to whether you view the “Russia glass” as half-full or half-empty. I believe strongly that the “glass” is half-full and that the future here is bright and hopeful. Perhaps I’m naive and wrong. Possible. But I trust my gut and my analytical instincts.

At some point Russia will have improved to such a degree that those few remaining Russophobic voices will seem as crazy and nuts as does McCarthyism today. Ironically, Russia is waiting for nobody. Instead it’s rebuilding itself as many in the West debate illusions of perception.

I have written a quick email to Clifford Levy the New York Times reporter in Moscow. Drop Mr. Levy an email (cllevy@nytimes.com) yourself and encourage him to dig a bit more deeply in his coverage of Russia. The days of Michael Wines-type coverage of Russia are over.

Here’s the email I got from my friend at an NGO in relation to Clifford Levy’s article about Putin and the Orthodox Church.

Here’s the email from my NGO high school friend:

Tim: So screw the NGOs. but your church? gosh, that seems a bit unneccessary. or maybe you’re orthodox now…

Below it is my email to Clifford:

Cliff:

I’ve forwarded to you an email I received from a friend of mine from Exeter. He now works for (”large NGO”). He is super anti-Putin. Most of your article feed his hatred. It’s not surprising that with “friends like these” that Putin told them to take a hike.

I wanted you to see first-hand how your articles truly influence the thinking of a whole nation of Americans without access to Russia today.

I know anti-Putinism “sells” but, as we have discussed before, the reality here on the ground is very different than those Russophobic folks would want others to think.

There is one fundamental question all Russia-watchers need to ask themself. It is, “Is Putin making decisions based on what he believes is best for the majority of Russians or are his decisions a result of self-interest and hunger for power?”

To me, Putin will be remembered as the best thing to happen to Russia post Soviet break-up. I believe that while it is understandable that many folks in the West may not “like” all of Putin’s decisions, that those decisions are, nonetheless, done logically, ethically, and with the best interest of Russia at heart.

I believe that the desire, on the part of Putin, to make Russia stronger should not, automatically, be equated with a desire to return to the old days of the Soviet Union.

I ask you to look at the articles you write, such as this one on the church, which are more editorial in nature, to see if you are breaking new ground and pushing the dialogue forward. Or are you feeding the false and outdated stereotypes people have of Putin and Russia?

Russia, post 1998, must be seen in stages. We are now at the end of stage 1. The results are remarkable. Talk of “freedoms” and “Democracy” are premature. That is what will blossom in stage 3. However, before then, Medvedev will lead us through stage 2 where corruption and red tape will be addressed and improved.

There are soooo many interesting and original human interest stories. I invite you once again to come visit us down here in Krasnodar. Life here is good, not to mention warmer.

I hope you will break the tired mold of NYT journalists. I know you can write well. I know you actually care about “getting it right” as evidenced by your translations of comments from Russian to english. I just think you need to take a risk and write something positive about this wonderful country.

Regards, Tim Post

BTW- Check-out the Comments section of Clifford’s article. He translated the article into Russian then hundreds of Russians left messages which he then had translated back into English. The result is fantastic.

Thanks to the Sochi Travel blog for some photos of the new Gazprom ski resort near the Krasnaya Polyana valley. Click here to see all the photos.

I’m starting to get more and more requests for information from people traveling to Krasnodar. I am happy to help and please send me an email (email at timothypost.com) with any questions.

If you’re looking for a place to stay there’s no question that the best hotel in Krasnodar is the Red Royal Hotel. The Red Royal Hotel is located on Krasnix Partizan Boulevard. While there are many hotels in Krasnodar, there are very few where you’d actually be happy staying for a night.

Red Royal describes itself as a 4 star business class hotel with 40 rooms. I agree. There’s a very pleasant cafe on the first floor which is an excellent place for small business meetings. The staff speaks english well enough to help you with most needs (not common). They even have some of their website in English. The price is reasonable for Russia at 5,000 Rubles per night (approx $200). The rooms are clean with wifi. The location is close enough to the center.

I have no connection to the hotel or its owners. Actually, I’ve never met the owner(s) but I do put every business guest we have coming to Krasnodar up at the Red Royal. So far, everyone has given it an unqualified thumbs-up.

The URL is (http://www.redroyalhotel.ru/). Here’s their info:

Russia, 350020, Krasnodar, St. Krasnix Partizan, 238
Tel: +7(861) 215-01-01, 215-50-50
www.redroyalhotel.com | redroyalhotel@mail.ru

Please note that within the next 2 years a Marriott hotel and an Ibis hotel will open on Krasnaya Street. Until then, the Red Royal Hotel is my pick.

I received this email from a reader last night and thought I would post it here in the hopes that perhaps one of you may have more information. If you do know anything about Oshad, please leave a Comment.

Dear Timothy:

Having been to Saint Petersburg last Fall, I am finally getting around to telling friends about some of the things I saw at The Hermitage. One was a set of four bulls marked Maykop kurga (Oshad). I understand Maykop = a well-known culture and kurga = burial site but the only other reference I have been able to find on Internet or in my own small library about Oshad is at your good write-up about Krasnodar.

If you have time, I would appreciate knowing what or where Oshad is (a place, a culture, a metalworking technique or what?). (The Osha River is at Omsk, so that does not seem to fit.)

Larry in Berkeley, California

As Bush and Putin meet one last time in Sochi, I wanted to share with you an excellent article from the Times Online that very nicely offers the Russian’s viewpoint to NATO over these past 8 years under Bush.

NATO continues to push eastward but says to Russia not to worry. It’s my own personal opinion that NATO expansion should be seen through the prism of “marketshare.” NATO is a club which requires its members to buy weapon systems from military-industrial companies which are in NATO countries.

Therefore, if Ukraine becomes a member of NATO, say goodbye to all the MiGs and hello to a bunch of F14’s or whatever NATO is “selling” these days. The inclusion of the Czech Republic and Poland has been a bonanza for military companies here in American and in Europe.

The key thing to keep in mind is that NATO almost lost its justification for existing with the break-up of the Soviet Union. No more enemy would have negated the need for a military alliance. In fact, many people did suggest that NATO close its doors. It didn’t for a very simple reason- it’s way too lucrative.

So as Russia has reestablished a sense of stability under Putin certain persons in the West, with a vested interest in seeing NATO thrive, have tried very hard, and unfortunately successfully, to paint Putin as a dangerous figure and Russia, therefore, as a threat. Simply read the candidates statements on Russia over the past month and you can see the results of the black PR campaign against Russia and Putin.

But… but you say, Putin really is a bad guy. He took away freedoms, he killed journalists, etc, etc, etc. Oh really, did Putin in fact do more harm or good during his 8 years in office. If you think the former then you obviously haven’t been to Russia recently. Putin is the best thing to have happened to Russia in the past 50 years. I am very serious.

I invite you to visit me in Krasnodar for a couple days and you will see the openness with which people go about their daily lives. You will see the hope and pride with which people discuss their jobs. You will see the explosion of young mothers with children walking in the parks. You will see the rebuilding of cities, roads, parks, and infrastructure. You will see newsstands inside gleaming supermarkets which carry 100+ magazines and newspapers. You will see employees sneaking another look at www.odnoklassniki.ru (Russia’s Facebook equivalent) in an effort to reconnect with friends from old school days. You will see stores filled with exactly the same selction as you might find at the Natick Mall. You will find crazy traffic jams due to the increased percentage of car ownership. You will feel a sense of hope and pride.

Russia is booming both economically and culturally. Russia is not China. To compare the two is to highlight your ignorance of the reality in both countries.

Here’s the article from Times Online titled, “No Wonder Russia is paranoid.” It’s an excellent article which highlights once again that the foreign policy of the United States under Bush has done our country more harm than good. Other than increased arms sales by NATO countries, the expansion of NATO has done nothing other than confirm foreigner’s perception that America has simply become a bully rather than its historic place as a role model for the very best qualities - politically, militarily, and culturally. America has lost its mojo under Bush. It’s time to get it back!

So what’s the answer? Simple, invite Russia to be a full fledged member of NATO. Why not? If NATO really doesn’t see Russia as the enemy it should welcome Russia’s entry. Russia is looking for a full partnership with the West. An invitation for Russia to join NATO would signal to Russia that it is, in fact, respected and no longer a “junior partner.” Russia would be a full partner which would both manufacture and PURCHASE weapon systems (it would be very good for many military companies in North America and Europe).

In fact, Putin should say as much publicly when Bush and he meet in Sochi. Putin should make an announcement during their joint press conference that if, in fact, the West and NATO don’t view Russia as the enemy then they should welcome Russia into NATO as a full partner. Putin should say that Russia would welcome such a move and that it would finally put the last nail in the Cold War’s coffin. Putin and Bush could agree of the goal of Russian membership and leave it to Medvedev and the next US president to work out the details. Wouldn’t that be a jaw-dropping announcement.

Putin could reference Mr. Reagan’s famous statement to Gorbachev “Tear down this wall.” Putin could have a similar line with respect to NATO such as “In 1989, they torn down the physical wall in Berlin, now its time to tear down the last psychological wall of the Cold War. Mr. Bush, open up NATO!”

Bush wants to have a positive legacy. Well, here’s the perfect opportunity. What a positive legacy it would be. The time is now. Let’s hope he has the vision to seize the opportunity!!!

After yesterday’s rant, I thought it might be helpful to give you some perspective on the infrastructure situation in Russia today. Here’s a great article from Asian Investor.net website titled, “Russian infrastructure needs a trillion dollars.”

Here’s the article:

Asian Investor.net
Russian infrastructure needs a trillion dollars
By Simon Osborne | 19 March 2008

Alternative investment firms are exploring direct and indirect ways of tapping into the Russian infrastructure theme.

A trillion dollars sounds like a lot of money, but by American economist Joseph Stiglitz’s estimates, it only buys you one-third of a war in Iraq and Afghanistan.

A trillion dollars also buys you 3,000 Bear Stearns (that’s entire firms, not shares), but where would you store them all?

President Vladimir Putin announced late in 2007 that Russia needs to spend $1 trillion on upgrading its dilapidated, Soviet-era infrastructure. That bill will be paid for by private and public money. The state contribution will come from the $500 billion of foreign reserves that Russia has built up from sales of its hydrocarbon reserves.
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As a result of the 1998 Russian market tumble, the country found itself behind the likes of China and India in the renovation of its national infrastructure. Now, hedge funds and investment banks are taking an interest. For example, the fund Renaissance Investment Management set up a Russian Infrastructure Fund at the same time as Putin made his announcement.

Russian railways need $250 million for rebuilding tracks and new rolling stock. However, the railways are state-owned, and are going to remain in national hands. Electricity demand, meanwhile, is higher than supply and generation, transmission and distribution could use another $100 billion in upgrades. That industry has already been subject to a considerable degree of privatisation.

Roads and tunnels are also needed. For example there is still no good highway between Moscow and St Petersburg. On the water supply side, you don’t drink the tap water in Russia. In fact, the only thing that seems finished is the telecoms network, which accommodates 110% penetration in the country.

In the shipping industry, the Russian Black Sea fleet has to move from Sebastopol in the Crimea given Ukraine’s imminent green light to join Nato. It will be moving to Novo Rossiysk and their new port will cost billions.

“There are lots of ways to play the Russian infrastructure theme,” says Martin Diggle of the Artradis Russian Opportunities Fund. “You can go direct, such as by investing in Transneft, the owner of oil pipelines, or port companies. Indirectly we look at firms that make components for hydro-electric plants. Iron ore plants, and coal and coke are other ways of getting involved.”

The Artradis Russian fund was up 81% in 2007, compared to a market rise of 16%. In 2008, the fund is up 18%, compared to a market fall of 10%. Bucking the downward trend this year have been mobile phone and steel stocks.

“To get involved in the infrastructure theme, you can also accomplish it via repair and maintenance companies, a sector which has been fragmented and in which there has been few consolidations,” says Aivaras Abromavicius, a fund manager at East Capital. “Another way is via construction companies and steel mills like Evraz.”

The $2.2 billion East Capital Russia Fund was up 31% in 2007. It looks to invest about 25% of its assets in Russian private equity situations. It’s the largest Russian Fund and is up in value 19 times in its near-10-year life.

Russia’s richest man is Oleg Deripaska, who is worth $40 billion. His venture into infrastructure is coming soon in the Sochi area of the Black Sea, where one of his ventures is building a Dubai ‘Palm’ style property development. Sochi is also the venue of an upcoming winter Olympics, and the cost of building that infrastructure is soaring above eight figures.

Russia is estimated to have 87 oligarchs with over a billion dollars and far more minigarchs with assets of $200 million to $1 billion. Merrill Lynch has estimated that Moscow alone contains 100,000 dollar millionaires.

I can’t take it anymore. The traffic here in Krasnodar is bad but in Yubilaney, the traffic is mind-boggling. It takes me at least 45 minutes to travel 5 miles back and forth to work from my apartment each morning and evening.

It really doesn’t matter what time I leave. This morning, I was on the road by 7:35am and the traffic was bumper to bumper snaking through the bad road near the agricultural university. Last night I left work at 7:55pm and all was fine until I hit the side road leading into Yubilany. Took me an hour and ten minutes last night.

So, what’s the deal? We all know that there’s a huge consumer boom in Russia and that almost anyone who can afford it is buying a new car. With the recent economic progress, the number of people who can afford cars has risen remarkably quickly.

I look around the parking lot of my apartment building and at least 80% of the cars are new and 60% are foreign models. There are many many more women driving these days. It used to be a bit unusual to see young woman (early 20’s) driving. Nowadays, women are everywhere driving.

Both of these trends are good obviously. But the bad news is the road system here in Russia is the equivalent of the Saw Mill Parkway in Westchester County New York. The physical design of the roads does not match the current technology of the automobiles being driven.

The local administration is actually doing a lot of great work to rebuild the roads. Actually part of the problem in Yubilaney is that one of the only 2 roads into and out of the district is closed for major renovation. I give the administration a ton of credit for the job they did with Krasnaya Ulitsa. The renovation of the boulevard is amazing. Same for the major road (forget name) which connects the 2 bridges with Stavropolskaya Street.

There are four suggestions I have which, I believe, would dramatically improve the situation.

1. Pave all the side streets in the central part of the city. Believe it or not, right smack dab in the middle of the city are kilometers and kilometers of dirt roads. The residents of these side neighborhoods don’t want traffic so they never got around to paving the streets. These side streets are impassable. 2 foot deep pot-holes filled with water and mud.

So all the traffic is funneled onto the main roads and boulevards and it gets stuck. Simply by paving the side roads in the center of the city the traffic problem would be reduced by half. I feel for the residents but too bad. If you live in the city you can’t expect the traffic volume of a small village.

2. Build 3 more multi-lane bridge across the Kuban River. Right now there’s only 2 bridges and they are always clogged with traffic because of the GAI traffic police check-points there. Rarely, do people get pulled-over but instead traffic slows down to 5 miles per hour and one single lane. The result - more clogged points in the roads system. Get rid of the GAI stations on the bridges and put them on the other side of the river with multi-lane pass-thrus.

3. Build a full circle ring road highway around the city. Consider this fact about today. If you are a truck coming from the seaport of Novorossiysk and driving to Moscow you must drive through the center of the city on Turgeneva Street. Turgeneva Street is already an absolute disaster but wait until IKEA opens next month. Disaster won’t begin to describe it. A highway around the city will pull a lot of traffic out of the center.

4. Send the GAI traffic police out into the city to direct traffic during the rush hours of morning and evening. How about simply pulling over those asshole drivers (yup, that’s the correct word) who INSIST on driving on the wrong side of the road into oncoming traffic so that they don’t have to wait in turn like everyone else.

Anyone who drives in the wrong lane to cut the traffic line should lose their license for 3 months. Do you know how absolutely infuriating it is to be sitting in bumper to bumper traffic for 5 minutes inching up to a cross street when 1, 2, or 3 cars come speeding down the left-hand lane in order to cut the whole line. If that happened in America, somebody would get shot, and quick. It bullshit and the GAI does nothing to stop it.

I know, I know, the administration knows about everything I’m suggesting and they are actually doing things to make the situation better. Yes, the administration did authorize and pay for the installation of new stop-lights which have digital countdown clocks. Great addition. People are now less likely to run the yellow light or block the box.

Anyhow, now I’ve vented and so I feel better. That is until tonight when I have to drive home. Thank God for podcasts. I got to listen to the whole TWiT podcast last night.

I was just handed a book by one of my colleagues called “A Guide to Land Transactions in Russia” by Andrey Goltsblat. The book is in both Russian and English (Russian on the left and English on the right).

What an amazing resources is this book by itself but also the website for Pepeliaev, Goltsblat & Partners is chalk-full of great information. Granted this information gets into the really nitty gritty but isn’t that what we want? How many times have you been confronted with a seemingly logical situation only to watch it go in some random direction? Well, by thoroughly reading what these lawyers have to say about Russian regulations and business things will begin to make more sense.

I highly recommend going to their website and checking out their resources.

PS: I don’t know these guys nor do I have any connection to them. But I’ll tell you that next time we need some excellent Moscow lawyers, we’re calling these guys first!

Today in the International Herald Tribune there was an article, A new miracle on ice: Russia is luring back NHL stars, discussing the growing attractiveness of the Russian Superliga for current and future NHL players.

I first discussed this trend in a blog post titled, Bettman’s Bluff, on December 12th, 2007.

Here’s a quote from Alexei Yashin,

“Less and less players are going to the NHL and more and more are coming back here,” Yashin said in an interview in English after the game. “From my perspective, there is a competition between Russian clubs and the NHL for the best product on the ice.”

Ironically, the development of competition between the Russian Superliga and the NHL may actually turn-out to be the biggest opportunity for the NHL. How?

If the Russian Superliga actually approaches parity with the NHL that will then enable the NHL to merge their league with the Superliga to create a true Global Hockey League (GHL). Were the NHL to attempt to self finance such an expansion themselves, like the NFL sort of attempted in Europe, it would be much more costly and difficult.

Hockey is a game I used to love…. to both play and watch. I can’t tell you how many Boston Bruins games I used to watch on Channel 38 when I was a kid. The play-off games between the Montreal Canadiens and the Bruins were hockey at its best. However, as I’ve gotten older my interest has dropped. I might now tune-in for an Olympic game every 4 years. But the product that the NHL puts on the ice these days is only occasionally engaging.

But, were the NHL to merge with the Russian Superliga in say 5 years and add some other smaller European leagues, then you would have something special. I challenge the top executives at the NHL to put together a roadmap for the next 6 years with the goal of creating a Global Hockey League before the 2014 Sochi Winter Olympics.