Saturday, 13 December 2008

Hat-tip to Siberian Light - Wordle is a cute little app that turns your blog into a word picture. Here's a picture for this blog:

Wednesday, 20 August 2008

The case for Appeasement

from the London Daily Telegraph, 17th August 2008

I love reading the Spectator, although I instantly recoil at almost all its judgments. A friend and colleague directed me towards an article which is online now (and I guess will be in the dead-tree version tomorrow).

It is a good article, although as you might expect from a Russophile – which is what westerners accuse me of being, to the bewildered amusement of my Russian staff – I do not share all the author’s conclusions. I do, though, agree with him on expansion of the UN Security Council (with rapid adoption of QMV and an abolition of the veto – yes, I know, it’ll never happen) and the replacement of G8 with G12 (plus India, China, Brazil and Turkey).

But to the theme of his article: Georgia. All of us, however near or far from the Russia-NATO debate, have had our own little moment of intellectual ferreting-about, trying to find le mot juste for the causation of ‘Russia’s Most Excellent South Ossetian Vacation’.

Understanding the ebb and flow of Caucasus politics is somewhat like trying to understand the Schleswig-Holstein Question; of which Lord Palmerston memorably said: “Only three people understood the Schleswig-Holstein Question. The first was Albert, the Prince consort and he is dead; the second is a German professor, and he is in an asylum: and the third was myself - and I have forgotten it

Georgia. South Ossetia. Really it is all the fault of that Woodrow Wilson chap. Possibly the biggest brain ever to occupy the Oval Office; and yet his two terms in office were blighted. He was the one who, during and in the aftermath of the First World War, got everyone so excited by the idea of Idealism in foreign policy. It has been torturing us ever since.

Indeed, for a long time one might have argued that the Wilsonian / ‘American’ school of foreign policy nicely contrasted with the Palmerstonian or ‘British’ view. Put it another way: what Lord Palmerston would have said was “Nations have no permanent friends or allies, they only have permanent interests": Georgia is not our ally and we have no interests there. Leave it to the Russians.

On the other hand, Palmerston was the ‘ultimate pre-emptionist’, not adverse to gunboat diplomacy, which is a sabre-rattle too far just now (and worryingly apropos GW Bush).

Self Determination as a key-determinant of national sovereignty – and the existence of a state that ought to be recognized - was a Wilsonian idea. He espoused it because, inter alia, he hated empires. His was that whole end-the Empires vibe that the USA later rammed down British and French throats after World War II – and thus flowered, as we swapped colonial power for US dollars – democracy and stability in Africa and Indochina…well, OK, not quite.

Today in international law, we tend to assume four things for a sovereign state to exist a (1) land; with (2) settled borders; (3) settled people and a form of (4) government. Sean has been writing very convincingly about the West’s turning a deaf ear to the Ossetian voice, and that that we only hear the view from Tbilisi.

On a Wilsonian view of the world, South Ossetia has a right to be treated as being capable of independence. The same line we used, of course, for Kosovo (actually the issue was more ragged over Kosovo than over South Ossetia). The Russians aren’t especially mad at us Westerners for our hypocrisy. Quite the contrary, I am sure they love rubbing our noses in our own ‘International Rule of Law’ shit.

Self-determination, however, is proving a most crappy touchstone for international affairs. We loved it for Kosovo; hate it for South Ossetia and scarcely know what to think about Transnistria or Nagorny-Karabakh; and run for cover if you mention Flanders; Basque or Chechnya.

It is time to ditch self-determination as a theory in international realpolitik. At best all you get are smaller and smaller countries scarcely able to govern themselves, who have no international voice and who are over-dependent on big states (the USA, Russia or the pseudo-state of the EU). It was self-determination which brought back to us the Georgian state (which was snuffed out by the Russians in 1801, but made virtually unsustainable by Persians from the Middles Ages onwards).

I don’t much care whether Georgia is free of Russia or not (there, I've come out, I've said it). I care even less about South Ossetia. But I think ‘Sovereign Montenegro’ a ridiculous idea; Kosovo toxically the more so and have no wish to see a new-born state called South Ossetia. Let the Russians have it! One sure way to take the pressure off of the Western Alliance is to give Russia all the rope it wants.

That said it sucks to be Belorussia or Ukraine. And I see that Minsk is getting it in the neck for having been just a little too reticent recently.

Should we care if Russia moves to take the Crimea? Why? We know that Russia knows it can’t reverse the lost Warsaw Pact countries’ membership of NATO so, therefore, where really is the self-interest in our trying to control events east of NATO, that pose no threat to NATO territory? Just because Appeasement failed in 1938 doesn’t mean this time it isn’t in our best long-term interests.

Tuesday, 19 August 2008

Dumb and Dumber?

Otherwise known as Georgia and Serbia.

Ah... poor Serbia. Always seemingly grabbing defeat from the jaws of whatever...

This piece on the Business New Europe wire caught my eye today:

Moscow accuses Serbia of supplying Georgia with arms
August 19, 2008

The Russian Ministry of Defence has accused Serbia of being one of the countries that has supplied arms to the Georgian military prior to the recent conflict in Ossetia, Serbian media reports. The Russian's say some of the weapons were made in Serbia's Zastava factory in the central Serbian town of Kragujevac, according to reports from the BBC. "I stated that it was a bad idea selling weapons to a country that was in conflict with Russia, our biggest ally," former Foreign Minister Vuk Draskovic told the BBC, pointing out that the government (in which he had been foreign minister) had initially blocked the deal, and then approved it following a strike by workers at Zastava Weapons.

However, Zastava Weapons Director Rade Gromovic said Draskovic's claims are "groundless.""I don't know how our Kalashnikovs got to Georgia. Maybe Georgia got them from Croatia or Bosnia, whose territorial defenses, during the former Yugoslavia, possessed such weapons. Zastava Weapons and the Serbian state cannot however tell former Yugoslav republics, which have long been independent states, what to do with their military surpluses," said Gromovic.

There is almost a mathmatically circular brilliance to how screwy that is, don't you think?

South Ossetia is Kosovo; Georgia is Serbia. Serbia is friendless other than Russia so, natch, Serbia 'accidentally' arms its only friend's most troublesome enemy. LOL

Thursday, 14 August 2008

In search of truth and balance

Posted elsewhere by Exile:

Something about August (western newsrooms, which have anyway been cutting editorial budgets, being lightly staffed); the distraction of the Olympics and a misplaced admiration for being 'democratically elected' did throw western media off its game. No doubt about it; in the first days of reporting the South Ossetian conflict zone.

The early coverage in the west was awful and biased. And Saakashvili's acting skills did bludgeon fair reason from western editors' minds.

But Russians should please remember the west's press *is* free and, like a plane in turbulence tends back towards the centre of its gravity and even flight, eventually western journalists' fondness for fact and accuracy, reverts back to (on a good day) journalistic balance.

The London Times today has two pieces, by significant UK writers, Russians should approve of: and the sublime Simon Sebag-Montefiore: The Russian point of view is being heard. And is respected.

If Moscow stops shouting, for a moment, about western media's bias, it might even hear its more reasonable, and increasingly Moscow-attuned, voice.

Russia has won the military battle. It can still even win the longer-run war for the respect from the west it reasonably deserves.

Tuesday, 12 August 2008

Why, on balance, I think Russia has acted broadly correctly

On Sunday, I wrote elsewhere (amid a spittle-storm of British Russophobia):

"The view here from Moscow is interesting inasmuch as there is little jingoism from the Russians I know who are jaded by the Caucasus [well, that was Sunday, by Monday morning, while I detected little jingoism, it was plain there was a massive wall of Russian outrage at the attack-on-civilians Georgia has - please let's remember this *fact* initiated last week, unprovoked. Prime Minister Putin - Blair to Medvedev's Queen of England - has tapped brilliantly into this. The guy *does do* domestic PR brilliantly well].

"The West can do nothing. It holds no cards whatsoever at this poker table. It needs Russian oil and gas; it needs Russian leverage over Iran and, indeed, the USA needs Russia's cash to buy US Treasury bonds: the recent Fredie Mac and Fannie Mae crisis revealed Russian sovereign funds were huge holders of their bonds and US Treasuries.

"The four 'frozen conflicts' (Abkhazia, Nagorny-Karabakh and of course South Ossetia; and Transnistria, on the Ukrainian border) may have been defrosted by Kosovo, that's true. There are now plenty of opportunities for Moscow to feed the EU, cold, its Kosovo solution back to them, frozen-conflict-by-frozen-conflict.

"VVP et al have hated Saakashvili for years and have long wanted to take him out; of all the colour-revolution leaders on Russia's borders, he was always too close to Washington. And Saakashvili has *had* to snuggle up close to Washington because he is not nearly as popular amongst Georgians as his suave English-speaking appearances on CNN might have you believe.

"Russia, I think, really *does* want a return to the status quo ante (South Ossetia within Georgia, completely autonomous and [but totally] under the Russian sphere of influence).

"It does *not* want to annex South Ossetia, with Russian North Ossetia. The Kremlin knows that unifying the Ossetian populations won't make them happy Russian citizens; just as much as the Southerners weren't happy to be Georgian. It would lead to an independence movement. [Seen Tuesday evening, I am not sure I think this is so clear-cut. Russia's stand for South Ossetians means, in the short term they would welcome Federation membership. But I still think my analysis holds true for the long term. In any case, a Georgia 'fractured', with territorial claims is, ipso facto permenantly disqualified from NATO membership]

"Russian took years to turn the tide in Chechnya and has no intention of creating a new headache with a 'Greater Ossetia' (not least because, next door, in Russian Ingushetia, there is chronic low-level successionist violence).

"The outcome will be like an Occupied West Bank of Jordan. South Ossetia will be out of Tbbilisi's control but with Russian never attempting to integrate it into Russia.

"The bigger prize, for Moscow (apart from sticking it to the West) will be the inevitable fall of Saakashvili; who made re-integration of South Ossetia into Georgia a key platform of his re-election campaign."

On Monday morning, to a UK political mate I replied (him asking what the pro-Russian 'line-to-take might be):
  1. Georgia fired the first shots by an ill-judged unilateral action to ‘grab back’ South Ossetia and, in the process, killed Russian peacekeepers there (big mistake)
  2. Russia responded to defend the ethnic Ossetian, civilian population and to rout Georgian aggression and seek a return to the status quo ante
  3. Russia’s continued actions today – now that Georgia has been defeated and lost what footholds it had in South Ossetia – are aimed primarily at degrading Georgia’s ability to re-group and once again attack ethnic Ossetian citizens (and are, therefore, not inconsistent with its peacekeeping mandate)
Which I think is how the Kremlin has more or less spun it.

Saakashvili has been a vainglorious fool of iconic proportions. He's done. The Russians don't need to despose him. The Georgians will do it for them.

What I have noticed in the last few days is the rampent one-sided, anti-Russian reporting of this conflict, most notably in the UK and US media (although today I see more balance coming in).

But was has been really depressing is the virulant anti-western sentiment now becomming firmly lodged in modern, bi-lingual, hip Russia. That, I think, is more worrying. If you have Facebook, check out this group which caught my eye because one of my staffers has joined it. If you don't, here are some choice quotes:

We hereby express our allegiance with the Georgian, Osetian and Ukrainian people - who have been forced into an unlikely alliance with the West via puppet governments aimed at destabilizing Russia's sphere of influence. Some of these governments, such as that of Georgia demonstrate blatant disregard for their national purpose and sense of belonging and choose to speak English to the World Body instead of native Georgian. Which beautifully demonstrates where their intentions and directions come from.

We hereby confirm our status as Citizens of the Russian Federation and acknowledge our power.We understand our worth to you as a market, and our worth to our country as its Citizens...We are Russians. We are the first generation to grow up without prejudices...

...Or we can be the first to show the world that Western pop culture is a front for indoctrination of the masses and that other cultures to exist, that the dollar is not the global currency - oil is, and that saying NO to the Anglo Saxon world is very possible.

...For if the worst comes to worse, in the battle for hearts and minds, we will win where you have always lost... Ourmasses mobilize themselves till the last drop of blood. Yours, have to be convinced, and will stop at the first.

...makes you want to weep doesn't it?

Saturday, 24 May 2008

Catching up with Red Exile

[the layout of this post goes oddly here and there: I have laboured unsuccessfuly to correct it; sorry]

The most irritating news is that - somewhat predictably I suppose - the property developer doing our new Moscow office has predicted delays; to 10th June (90%) or 14th (100% certain to be ready he says). But our existing lease expires 31st May. So we had a meeting Friday evening. Fortunately we have a contingency plan in place for a temporary home: all at the developer's expense I hasten to add.

Oh, and our Russian bank - a new one which is not impressing me (so watch it Raiffeisen or I will switch our accounts from you!) has been a real pain in the ass. It is an issue of the 'hard currency passport' (yes, everything foreign needs something like a visa here) concerning a large transfer. Now lawyers and finance people in three, no, actually four, countries are beavering to sort it out.

In Russia your corporate bank is not your Friend or business partner: they are the devil! Actually, Raiffeisen Bank in Russia for a while - when I first moved here - set the benchmark of excellence, but I think their service and approach has really declined since they gobbled up Impex Bank. In Russia, it might be branded Austrian, but the middle management and service culture seems to me to have become distinctly Soviet. We were looking to pool our accounts in all the 19 countries of our region with them - I am pushing to ditch them in mine. Right now, I loathe them.

These two events - property and cunty bank - all occured after 5pm on Friday. Exhausted - a hugely busy week and two overnight train journeys in three days (and, like, 11 hours sleep in 72 hours) mean't I got home about 8pm, sank a large Bombay Saphire & Schweppes and went straight to bed - a glorious 11 hours asleep...

So, to catch up with all my news, here's some more annotated updates from my facebook account:


Red Exile says it's nice to wake up in his own bed, which is rare enough these days, especially then to realise it's Saturday.
7:54am meaning only that this week I've woken up on trains and in the 'apartment suite' in our Kyiv facility and, in recent weeks, have travelled a lot. Nothing, alas, more mischievous...


Red Exile is back in the irresistible, terrible, magnificent, pulsing dark heart that is Moscow: where the weather is ghastly.

May 22

Exile had a great evening in Kyiv; which really has everything in a city one could wish for. The weather is also lovely.
12:00pm I took the overnight train back again. Luckily it was the flag-ship train, so the 1st class sleeper compartments were top-notch...

Red Exile is actually watching 'the' game & really enjoying it; in the way an ingenue 1st watches a Verdi opera; wide-eyed, without partiality and for the sort of poetry of it. But I thought Mr Ronaldo splendid.

May 21

Exile wonders why, if the football match in Moscow doesn't start until 22.45 local time, all the expats going to it are leaving their offices now. It's only Luzhniki!

Red Exile does not feel fresh as a daisy; couldn't sleep as his train rattled and lurched across Russia & into Ukraine.

May 20

Red Exile is on way to Kyiv tonight - overnight train (fast one with buffet). Means a dawn appointment with Russian border guards followed by Ukrainian ones.

Red Exile Red Exile enjoys hot humid nights; but they're better naked in the pool; as in my Guadeloupe days. A lifetime ago I lived that.
9:21pm It was my pool, my privilege to swim naked in it at midnight...

Red Exile says Russia's stonking victory over Canada in the hockey Worlds means, if Chelski win Wednesday, that's 3 great sporting triumphs for Russian sentiment in a row.
12:31am Opinions differ amongst my Moscow staffers as to whether they are pro- or anti- Abramovich and hence whether to be pro- or anti-Chelski in fact

May 18

Red Exile sees that 'tree-sperm' season is upon us again in Moscow and the streets full of the snow-storm of germinating stuff. What's is called? Puchre?

May 17

Red Exile said: " an instant...his weekend evaporated...".
7:10pm I had to work the weekend - a crisis management assignment came up.

Red Exile has just realised he has no opera or ballet tickets booked for anything. A sort of panic has overcome him...
2:58pm Situation now rectified! Tonight I am going (for only the second time) to see the Bolshoi dance ' The Golden Age -music by Shostakovitch and choreographed by Yuri Grigorovich

Red Exile is surprised to discover that his Asus has been buggered and so he has no mobile connectivity. Hopefully it is just the usual shoddy Russian SIM card problem.
12:25am It was a SIM card problem - Russian mobile operators seems prone to them

May 14

Red Exile is still in idyllic rural Hungary and this morning will opine on web 2.0: "content may have been king but now aggregation is God".

May 13

Red Exile is in a particularly rural part of Hungary, just an hour's drive out of Budapest. Horses are nesting, or whatever they do, outside my window.

May 12

Red Exile has always been fond of Budapest. In 2003 it was on his 'list' with Beirut, Rome & Istanbul. But now 4 years in Moscow; LOL.

Red Exile is landed in Budapest, where everyone is enjoying a public holiday and, by now, very *relaxed*.
6:49pm No Valium? Red wine will suffice. Nasty 'crabbing' or cross-wind landing though.

Red Exile is depressed and anxious. He is about to fly to Budapest and has forgotten his in-flight Valium. Either reader will recall my absurd, but nonetheless serious, fear of flying. On trips longer than two hours I pop two Valium. Actually, I can see why people get addicted to Valium - fabulous stuff - but don't mix it with alcohol (apparently that's not good - but on flights to Kazakhstan? yeah right...)

May 11
Red Exile has his apartment to himself tonight for the first time in weeks, but only has one night to enjoy it.

May 9 - the Victory Day holiday, commemorating WWII

Red Exile Well the parade was later than it should be, and in the opposite direction from that expected, but the tanks and missiles were great big boys' toys. A tank driving up Tverskaya; and part (I was too close to get the whole thing in view!) of a Topol M ICBM, or RT-2UTTH, nuclear missile launcher (NATO IDENT: SS-27). LOL - to think that in Soviet times my photographing it would have been a serious crime.

That night I also took my mother to see the Bolshoi's superb production of Nabucco (4th viewing). Here an excerpt someone has ripped and put on YouTube (Elena Zelenskaya was singing the part of Abigaile that night too - it is great fun for a soprano - a baddy part for them for once to sing! But I think her Tosca is better and Irina Rubtsova the better Abigaile):

(PS: I see that this recording is from the old Bolshoi production though, not the current one! - which is visually much more stunning)
May 8

Red Exile thinks it funny that all the male expats are really excited that Russia's new long-range nukes are being paraded through the streets tomorrow. Smaller WWII ceremonies were also taking place around the city. This one was close by our office:


May 7

Red Exile is pleased, thoroughly, to recommend Moscow fishmonger at La Marée (top of Petrovka) & thanks his mate Brian for the tip. Langoustine vivant (but not for long)!
Mother was making her annual visitation to Moscow. She cooked the live langoustine and wasn't the least bit screamish at dunking them in boiling water. We ate them with a mozzarella / pesto/tomato salad; quails' eggs and a Gavi-di-Gavi

Red Exile wonders how long it will take to remember to call Putin Prime Minister and not President; and congratulates Dmitri Medvedev, and Russia, on his special day. 10:05am It was inauguration day - no, I wasn't invited to the ceremony. Outrageous! LOL

Red Exile The RUS govt has just announced *visa-free* travel for Brit football fans for this bloody match: what!?!?! Madness. Are they importing fodder 4 Nashi to bully?12:24pm
We all expected there to be huge trouble with all the Brit football fans coming to Moscow - turns out it all went swimmingly. I was less concerned about Brit rioters, though, than they would be targeted by extreme Russian nationalists. But the Russian security forces had weeded them out most effectively and they were getting no-where near the supporters.

Red Exile wonders why my Lenovo x60 refuses to obey me today. Sighs: I want to go mac.. 11:33am

May 5

Red Exile say street closures for Friday's war parade rehearsal, and later metro closures, will make Moscow impossible this week. 10:11am

May 4

Red Exile exhales: "sublimi il diva; notte di passione e di gioia". Anna Netrebko concert; Moscow. Magnificent! 10:27pm

erm..yes, I can get a little over-excited in post-concert high. It was at the Moscow Grand Conservatoire, which is an amazing venue and only ten minutes walk from where I live. And that day I had dined before at Cantinetta Antinori, on their lovely garden terrace.

Red Exile has enjoyed the longest long lunch; and is going to diva Netrebko's concert. 4:43pm Anna Netrebko is my all-star-world favourite soprano right now. I have all her recordings (thanks to iTunes:

She was four month's pregnant for tonight's concert and was an absolute trooper and stunning to boot. She shared the stage with superb Romanian mezzo-sporano, Rixandra Donose and (s0-so) American tenor, Brad Cooper. Anna and Rixandra dueting in "Si, fuggire!...Ah crudel", from Bellini's Romeo & Juliet (oh yes, it is an opera too, not just a ballet) was excellent. Bellini is hugely tough to sing and sopranos use his music to showcase their voice.

Red Exile today is a 'working day' in Russia. I booked leave. Have now finished essential work and am going to have a la-la long lunch

In contrast to the UK, which pivots all public holidays to a Monday, in Russia the holidays fall where they are on the calendar, which means any day of the week. But, sensibly, the Government bunches them together. The French do this: they call it 'faire le pont" (to make the bridge) - but the French do it by adding in a day. At least they did on Guadeloupe when I lived there. In Russia, in a grasp at efficiency, they deduct a day from a nearby weekend. So: holiday is on a Thursday? Make Friday a holiday too, but work the following Sunday. It is not something I can ever get used to so I book a day's leave; but usually end up spend half of it handling essential emails and calls anyway, so wonder why I don't just give up and work it like everyone else...

Saturday, 3 May 2008

Red Exile isn't dead - he's just been distracted...

So 'real life' has intervened in the last few weeks in the shape of punishing work schedule; quite a lot of travel; a friend (and her 46kg dog) temporarily moving in and - which has been very stressy - the search for new offices in Moscow.

of course there comes a point, blog-wise, where after a longish absence it almost becomes intimidating to do the 'here's what I've been doing' catch-up post. I have got over this, however, by just dumping highlights from my facebook account. So here we go (with more shockingly bad photography from my handheld PDA), the recent past:


Red Exile is spending another public holiday in the office; surprised how humid it is outside, which is early in the season.
May 1
I was in Prague on business
Red Exile says: "If I should die think only this of me"... I like Shiraz with my chocolate course.
April 30

Red Exile is watching the night twinkle on the Danube; a glass of bubbles to hand; a violin being played in the background.

Red Exile says "OK, so there is some football match coming up in Moscow? No, I don't have tickets and I gather the street price is edging towards Euros 1,000" - crazy! Since 'Chelski' has now won a place in this match, I am told the price is now Euros 4,500 for non-VIP tickets.

Red Exile does not have a PhD in applied sciences and therefore is struggling to work the shower in his hotel bedroom. Which was the Four Seasons - which is superb - and it's restaurant, Allegro, quite unbelievably good (and the holder of Prague's first and only Michelin star)
Red Exile I have a table with a view; a pigeon breast; a 1/2 bottle of Côte Rotie: I love life, Prague & everything…

Red Exile is now over a bumpy flight - and normal, smiley service is resumed. We thank you for your patience in this temporary service difficulty.

Red Exile I have *never* thought of the Czechs as other than opportunists and wasters and, 30 minutes in, 4 yrs l8r, I see I was right! I am inclined to be in a very bad mood after landing - partly angry at myself for having been so scared 'up there', which is silly, and partly (justifiably) because Czech immigration, clearing flights in from China and Russia, didn't open the EU Citizens line; until people like me pointed out how crazy it was that we'd have to queue with all the non-EU citizens being admitted with visas. Also, the taxi system sucks.

Red Exile says the plane is what? Late?!? Arrgh!

Red Exile Has now had Aeroflot baked goods and a drink so calmer, checked in and now only to ponder age of plane about to fly...

Red Exile says my life is *so stressful* it is no wonder I have high blood pressure and the heart of an 80 yr old. *Made plane just on time*.

Red Exile hopes everyone enjoys Thursday's neo-cold war parade - cos rehearsals for it have screwed Moscow traffic even more than usual & I am l8 4 plane. The parade is 9th May actually. That didn't make the traffic less sucky.

Red Exile notes that one of his two female house guests is on heat. The 46kg, 4-legged one. Words cannot express... They're moving on Monday. When my mother arrives... I don't get my apartment to myself for another two weeks...
April 28

Red Exile is off to a business lunch in brilliant sunshine.

Red Exile added a new photo to New offices - bought 'off-plan': what can go wrong? OK, so the building is still a 'work in progress' in a completely gutted, exterior cladding yet to be junked and re-done and completely needs rewiring and plumbing kind-of-way. But the developer *promises* me it will be ready for entry June 1st. This is good: our current lease expires 31st May.

Red Exile Madama Butterfly / Stanislavski etc: tonight Irina Arkad'eva was *a goddess*. Act 2 finale a weepy *triumph*!

Red Exile is @ v. gd performance of Madama Butterfly, fuelling up before original 2hr version of Act2.

Red Exile is at the opera, Madama Butterfly, eyeing chandeliers warily... see April 18th for the last comment to make sense.

Red Exile has discovered of himself that the pathology of his fear of flying is fear of heights. He discovered this in the glass lift of Moscow's uber-elitny Lotte Plaza.

Red Exile Apropos his new office space, a mantra: elitny. Designerny. Loftny. *Not Pafosny*. Pafosny? Think Paris Hilton, Donatella Versace, Las Vegas and anything by Dolce & Gabbana. yes, that's right 'gay' (in the sense US highschoolers use the term) and achingly vulgar.

Red Exile has signed an office lease!! Designer space; central & official. Yay!


Red Exile is so-near-and-yet-so-far. Do we have a lease deal or not?!?!

Red Exile was feeling wildly exuberant; but is now back under control to face the day's trials.
April 24

Red Exile is an idiot! Left ballet ticket @home! So sulking shopped at Tsum & now @Cafe Bar-boy... which is what one of the girls I know Christened café des artistes - the name just stuck somehow

Red Exile is off to the ballet tonight. German State Rhine company. Stravinsky. Rites of Spring. A dose of sanity and love in my fraught life.

Red Exile "To the FSB senior officer whose convoy cut me up today but then whose car was pranged by his own follow vehicle not breaking fast enough: hah! Tosser LOL". This was really too funny to watch. Made my morning actually...
April 23

Red Exile actually dares hope there *might* be a glimmer of hope. On the property side of things...

Red Exile has had, in truth, a $*#@ing shite day; and sometimes feels all the burden is on him as (some) just swish about... no doubt his default inner cheeriness will be back o/night. I was stressed, just leaving the office, over-worked and miserable. It happens...

Red Exile just came up with a strategy "find a 30-something woman, make her pretty and let's get her to cry on television" and is concerned that he doesn't feel cheap. It was a good strategy. And I am not cheap... 400 Euros an hour baby!
April 22

I was in Warsaw -I am not hugely fond of Warsaw...
Red Exile has too much work to do and no time to do it.

Red Exile has turned down the chance to eat escalope of crocodile. No kidding - it's available at the Intercontinental Hotel Tower's Mexican restaurant (don't ask!). The public space is crappy in this hotel, but the rooms are great and the view always good (well as good as a view over Warsaw can ever be).

Red Exile says: "well *hello!* Aeroflot you sexy thang!". They're flying brand-new A320-200s into CEE. Eat me, BA!

Red Exile knows he has lived in Russia too long: he finds the baked goods in the Aeroflot business lounge quite irresistibly alluring.

Red Exile setting of for the traditional traffic jam to Sheremetyevo airport, to fly Aeroflot to Warsaw. Ah the glamour of it all...

Red Exile has narrowly missed *death* at the ballet. An 8-cm diameter crystal fell from the great central chandelier and missed my head by inches before smashing on ground in 100s pieces. Felt cold draft of death did we. This really happened and the lump of crystal missed my head by less than 30 cms

Red Exile is off to the Stanislaski-Nemirovich-Danchenko tonight 2 them dance Romeo & Juliet.
April 18

Red Exile wonders if the 'rock song' whose chorus is "are you off your meds?: is Placebo. He laughs & luvs it. It is and I downloaded it from iTunes.

Red Exile is off to dinner with a mate from 'the small island' I now refer to the Britain

Red Exile has just used his best BBC voice to voice-over a TNK-BP corporate video. This is the second time I have done this (just to help them out for a favour - because it is crazy expensive for them to have it done in London and any old Brit RP voice will do - and because, in more weighty and feesome matters, they are also a client)
April 15

I was travelling in Ukraine
Red Exile sees this new overnight train comes with anti-terrorism advice. In the event security forces are going to storm your Chechen terrorists "run-like-f*ck in other direction" seems to be the ambivalent advice. On the new trains there is a poster by the loos with safety advice. This include in cute little pictures what to do if security forces are storming your high-jacked train. And, yes, run in the opposite direction is the helpful guidance they proffer...

Red Exile is witnessing drama @ border; 2 men arrested & dragged off train by Ukrainian troops. Unpaid parking tickets? Very exciting and the full-on paramilitary performance...
April 14

Red Exile and his friend, Johnny Walker, are at the Russian border - for processing. LOL

Red Exile has had his day ruined - 'new' landlord informs him he has been gazumped on new space. So back to Square one and now 5 weeks to Moscow office is homeless... This was a low moment

Red Exile is having a very good day commercially and meteorologically: it is a gorgeous sunny day in Kyiv; the sky is almost ridiculously blue.

Red Exile now has a very deep and abiding love of Ukraine; its tragic and compelling history - the more you get to know it the less like Russia it is.
You learn a lot about Ukraine in the long drive between Kyiv and Lviv and back - abandoned villages and the wrecks of old collective farms testifying to the waste of Collectivised farming, it's failure and - actually - the enormous post-Soviet decline in Ukrainian agricultural output. Land reform is desperately needed to modernise and rejuvenate Ukrainian agriculture.

At the same time, as you drive past vast, pompous - but now sadly forlorn - Soviet-era memorials to WWII (more to bludgeon home a message of loyalty to the Ukrainians than a message of celebration) you realise how awful it must have been to be Ukrainian and part of the USSR. Wondering around Lviv today it is almost impossible to imagine that this bright, smiley, European city was once Soviet. It is totally unlike anything in Russia.
April 13

Red Exile is about to have a hearty lunch of Turkey liver; veal, sour cream & dumplings & all trimmings. It is not cuisine minceur, but do eat at café Amadeus.
April 12

Red Exile is enjoying his birthday in Lviv, in which the whole history of Middle Europe can be seen. The ebb and flow of empires; the heterogeneous sweep of its European architecture; but still defiantly European (Renaissance, Baroque, Neo-classical, Art Nouveau...)
April 11

Red Exile is enjoying cafe society in Lviv; which is charming. Drinking champagne, sitting outside at the Vienna Café where people-watching is great fun

Red Exile is leaving lunchtime for the 5hr roadtrip to Lviv. The guy driving asks "do you want 'fast' or 'safe'?" - what the heck: fast! LOL.
April 10

Red Exile is having a fascinating day in Kyiv.

Red Exile s at the UKR border post, on the train, watching a beautiful sunrise. He is now though hungry & *very* thirsty!
April 9

Red Exile Has just realized that as he is on tne slow-overnight 'express' - 13hrs - inexplicably it has neither restaurant nor bar. Nightmare!! This is the second time I have done this! memo-to-self: only Train #1 (Moscow-Kyiv) and Train #2 (Kyiv Moscow) have buffet cars. The others *don't*

Red Exile en route to Kyiv & then Lviv.

Red Exile is somewhere between despair (back to office property square 1) and elation (deal done). Only in Moscow do we live by these 2 emotional gears and no others. That last sentence, BTW, is probably the truest thing I have ever written about life in Moscow.
April 8

Red Exile did have to smile as he was cut up this morning by a rickety old Lada with *diplomatic plates*.
April 7

Red Exile has had just the most sublime & wonderful night at the ballet; even if his body won't fly dream a soul can. Sometimes good performances make my purple-prose-restraint short-circuit.

Red Exile wonders what you say to a week that is pretty-much ruined before it has begun... hello? Property-related - a great development I was hoping to take was snaffled up - even though I had agreed terms with the developer - by a Russian bank.
April 6

Red Exile woke up this morning dreaming about the future of capitalism. Last night he tried to dream about Tuscany. Oh well...
April 4

Red Exile is back to the drawing board: 8 weeks and counting to find new offices - or else it is hot desking in my front room! Another potential site fell-through (because this one was pretty far from a metro station and, in any case, I just learned that this particular station is about to close for a year's remont; which ruled the property out completely.
April 3

So there you have it. Normal service will now hopefully be resumed...

Friday, 4 April 2008

Why, for Russia, Turkey is an issue

Discussion over dinner, in Moscow, "we were looking to like Turkey" but... based on this news...

Of course, I am no Turkey expert, but would consider that – in an environment of global credit restriction, ‘religious risk’ is just a punt too far (apropos the recent State Prosecutor’s play) and while these games might seem logical - politically, locally - they have played massively badly, globally. As bad as Russia’s politics can do, of course, but the world is robust to Russia risk these days: and Turkey isn’t 15% of the world’s proven hydrocarbon reserves.

On any meaningful econometric and trade analysis of Turkey we should be saying ‘wow, what opportunistic treasure here lies’. But, in a world where once-mighty Bear Sterns got sold for a song, Wall Street, with its deeply-embedded fear of Islamic-exposed markets, may find global chief investment and credit risk officers will be giving Turkey an investment pass…that hits Turkish inter-bank markets fast and hard.

…logically, IMHO, Turkey should be a neo-BRIC market. Actually, however, I think investment in Turkey in the next 12 months will be tough to obtain, except out of the middle east and, hmm, Russia…. But in the next 8 weeks (for technical reasons) you will read about ‘credit crunch hits Russia’… So don’t bank on that Russian ‘deep pocket’ of last resort, which global banking markets would like to get hooked on, for Turkish banks….

…when global capitalism tries to figure out ‘economic misery’ it tries to refer back, like a prophet to the Old Testament – which is why macro-economists try to make comparisons again to the 1973 oil crisis (high fuel prices + bubble (property-related) indebtedness +‘culture clash + war in the middle east)’. Except this is unknown territory. The primary markers of geo-political-economics are unique, today. For the first time, actually, in my adult life.

Post-modern capitalism has never known High oil price + banks scared to lend to each other, let alone *you* + consumers *drowned* in debt + massive geopolitical (war-related) risk + ‘now is when the cost-base differential of globalization hits us domestically in the west’ + a crisis in western democratic consensus (I mean, if there was consensus, the DEMS, in the US primaries would have a candidate by now)…nor is there the ‘left-right’ western political debacle which, strangely, we see now, as if for the first time, benignly, underpinned 1970s economic risk analysis.

No, there is no handbook for this one.

Sadly, since 1918, it has been Turkey’s fate to be on the shit-end of this, and every, geo-political and economic stick.

On a purely numbers basis? TUR real economic growth is likely this year to be half that of Ukraine’s – inflation however will also likely be half Ukraine’s. Not so bad huh? Way bad! Ukraine isn’t what a Global Risk Officer, in New York or Frankfurt or Zurich, would call ‘at Islamicist risk’, nor are they scared of its long-term macro-social story. That changes the investment dynamics 180 degrees. These (men) are scared of Turkey. Like they were of Russia.1998-2002? 2004?

To be a Global Chief Investment Officer, right now, looking at Turkish stock, would be really interesting. 'Cos I am fascinated, precisely because I don't know if - should I have that job - I would decide buy Turkish or 'avoid exposure to Turkey like the plague'...

I guess, for the good ones, that is how intelligent CIOs earn their money...

Wednesday, 2 April 2008

Red Exile really wants to buy this house (off topic)

...but it is, really, on the market 'too soon' (for which reasons Exile won't dwell and be vulgar)...

...but blast 'global credit crunch' I could really do an elderly relative to drop off their perch (and, yes, I do hate myself for even thinking that)

The current arrangement sucks (rip out current kitchen and bathrooms = EUR 50k minimum) & burn the furniture in the pictures - but, hello? - 100 sqm drawing room in *the* medieval city I have decided to buy in?
I may have to wait years for another elderly Lucchese to die to free up real estate like this...
I am, bluntly, just not one of life's lucky people...

Monday, 31 March 2008

Official confirmation of the end of an era: Aeroflot and the Tupolev 134

This brokers note extract across the screens today:

Aeroflot sells Tupolev 134s
March 31, 2008

Event: On Friday (28 Mar) Aeroflot announced the sale of its Tupolev 134 regional jets. Tu-134 has been furrowing the skies for more than 40 years but on 31 Dec 2007 the company stopped operating this type of aircraft. Nine of these planes were sold to Aeroflot subsidiaries: Aeroflot-Don, Aeroflot-Nord and Aeroflot-Plus; the company plans to sell the remaining five to external buyers. The average age of these aircrafts is 28 years old and they are priced at approximately $3mn.

Ah well. No more bone-shattering ‘lift-offs’ from the Soviet workhorse of the skies for Aeroflot. Um…not quite…it’s two main regional subsidiaries will still be using the Tupi for some time to come.

They have to. While, ahead of State Duma elections in December, there was lots of celebration of the Sukhoi Superjet 100 RJ – the planned replacement for the Tupi and set to be the Russian competitor to the Embraer and even the Boeing 737; the reality is that it is not even ready for test-flight yet.

But the Tupi had its charm: as I recorded in the back end of this post. The real writing on the wall came, though, when the EU closed its airspace to Tupolev 134s last year.

I wonder why? (PS: everyone survived this ‘incident’):

Week in review: St Petersburg; Russia Today and Roman Abramovich

On Monday night I took, for the first time, the newish Grand Express train to St Petersburg. A first-class-only service, it underlines that, for the best in business class train travel, Russia is streets ahead of the rest of the world. It offers suites (with their own shower and bathroom) and even the more modest premium cabins (which I took) have their own washbasins, 50% larger than normal and very comfortable beds and satellite TV: and superb waiter-to-cabin service.

For St Pete’s I had packed the full furs, guessing the weather could be inclement. And, boy, was it? Perhaps the worse weather I have experienced in four years of living in Russia swiftly descended on Tuesday afternoon. Visiting a client located in Arsenalnaya I thought it might be a pleasant hour or so’s walk back to Winter Palace Square (close to where my hotel was located). So I am strolling along the Neva when suddenly this extraordinary wind sweeps down from the Gulf of Finland and – despite the knee-length black leather, fur-lined coat (with the luxuriant mink collar and matching mink hat) it feels like the talons of an Arabian falcon are slicing through my bones.

So I turn right and, fortuitously, am right by Finlyansky Station (the setting for so many Cold War tales, both fictional and very real). I negotiate a sensible taxi fare to Winter Palace Square and, as I arrive, so do the depths of mid-winter. The snow starts to fall horizontally

Having missed lunch – and knowing I had an evening at the opera – I took High Tea and watched the snow fall and fall: about 12cms in just 4 hours. And, indeed, as I left the opera later that night, the weather was staggeringly bad.

My guest for business lunch the next day – in response to “please suggest somewhere where they can cook” – took me to the newish Terrassa restaurant. It was quite superb and almost as good as the best elitny restaurants in Moscow. Lunch was, of course, ‘dry’, but had it not been, I think it would have been almost as expensive as Moscow too. I had taken half day’s leave and spent it in annual pilgrimage to the Hermitage. Having Russian residency meant I was allowed to buy a ticket for just 100 RUR, which was very pleasing.

Lots of the rooms are closed for restorations until spring (Mid-April), but I really go for the Renaissance and Baroque Italian collection; including some excellent Titians and a favourite Bronzino. The Palace does have, BTW, a superb collection of Van Dycks; including several bought after the English Royal Collection was broken up after our civil war, which ended up in the Romanov collections.

Blogging was mostly absent this week, as it was rather busier even than usual. Saturday morning a car from the station comes to take me to Russia Today, where they wanted me to do a studio interview on British investment in Russia. The entrance to Russia Today is located in the vast RIA Novosti complex (just by the dustbins actually, which I think is surely a political sideswipe at the state media TV outlet employing so many foreigners).

Actually, I was crap. No, really, I was. I have done, in various countries, over a hundred bits of telly and radio and this was my worst ever. I have since seen the tape and, while not a train wreck, as such, it is just too ragged a performance; my ‘punch points’ were off and in one sentence I seem to lose the ability to conjugate in my first language. It is not what Exile promises broadcasters: to give great headline. On the other hand, I keep my answers within a nicely sound-bitey 15 seconds each or so. But, most unforgiveably of all, I am dull.

Being driven home, I pondered having Driver drop me off for lunch in Kamergersky. Thank God I didn’t!! Before my interview I went into make-up and, as they do things with my hair (a gallon of lacquer) and stick on some slap, I am distracted by the producer’s briefing. And although you can’t see this on the tape – no I am not giving you the link! – when I later walk in my apartment, having been driven back, I catch myself in the mirror. I am ORANGE. Orange I tell you, with the hair swept en bouffant like a Soviet '80s crooner. I look like a paedophile from Paphos. If I had walked into Café Des Artistes like that I would never have heard the end of it!

Having scrubbed my face, I switched on a new opera CD I have (Anna Netrebko arias); pour a glass of Montrachet; kick off the Guccis and try, just try, to clear myself of a most unsettling feeling of ineptitude and ennui.

Back at the office on Monday, I shall, Stalin-like, issue a приказ to staff and have this TV appearance declared un-history; never to be referred to again…

Saturday evening, I took a dearly beloved friend to Nedal’nij Vostok; where the selection of crustacea on offer is prepared in some of the finest ways available in the world. While there, the vast room is suddenly overcome by a nearly static charge of excitement. A moment later and I see Roman Abramovich walk past my table. Two noteworthy things.

The first is he really does have the most startlingly clear blue eyes, lit like lamps; and I can see why women, caught in their ice-blue gaze, are entranced by him. Secondly, he was body-guard free. If you hang out in Moscow’s elitny restaurants, you will see plenty of household name billionaires, but I like the fact that Abramovich doesn’t ponce about with heavy personal security, inside. Outside, as I was later to discover, it is rather different. Abramovich doesn’t go for flash cars, but the huge Chrysler limo, flanked by four 4x4s was clearly his. The nest of antennae on them, each bulging with OMON, clearly gave it away. He is entitled to OMON protection, of course, as regional Governor of Chukotka.

Tonight, I expected to see Nabucco at the Bolshoi, but discovered at home I should have been there Saturday night. Not a great end to an otherwise diverting week.

Sunday, 30 March 2008

Red Exile’s week in Culture: operas at the Mariinsky and the Stanislavsky-Nemirovich-Danchenko

Tuesday 25th March: In St Petersburg this week, I went to see Turandot at the Mariinsky. Turandot is not the most revered of Puccini’s opera’s – perhaps in recent years because people are disappointed that Nessum Dorma – made so famous by Luciano Pavarotti – is indeed only three minutes long; and the ending of the opera is slightly odd.

Puccini died, of course, before the last two scenes were written and these were completed by Franco Alfano. At the opera’s première in 1926, in front of il Duce, the iconic conductor, Toscanini, stopped the orchestra at the point where Pucini’s autograph work ended, turned to the audience and said: “Here the opera finishes, because at this point the Maestro died.” And, it is true, the final plot resolution (where ice-princess Turandot’s heart melts and is united in love for Prince Calaf) is wildly improbable and unconvincing, even for opera.

The late, great Paverotti in his signature piece:

In truth, this was a so-so outing at the Mariinsky; although I must confess I have never yet seen a production of Turandot to rival Andrei Serban’s classic production, in repertoire at the Royal Opera House, Covent Garden, which I first saw 15 years ago and kind of defines Turandot for me (and how I caught the opera bug).

But, to the Mariinsky’s Turandot. Irina Gordei, as Princess Turandot, was sublime – and indeed convincingly forbidding in the first two acts. Yuri Marusin, as the lead tenor, Prince Calaf, was not having a good night. He fluffed his breathing in Nessun Dorma (it is, to be fair, a very, very difficult piece to sing) and faltered badly about a third of the way through and, for a while, his confidence fled him. Was he coming down with a cold I wondered? I don’t know him as a singer, but it seemed to me that he struggled through this performance and lacked power in his voice. His was a disappointing performance. He is also, to be blunt, just far too old for this part: more truck driver than dashing Tatar prince…

Some of the cameo roles, though, were performed very well: especially the comic parts of Ping, Pong and Pang (Andrei Spekhov, Alexander Timchemko – who was very good indeed – and Oleg Balashov). A notable shout-out too to Victor Vikhrov as Emperor Altoum: singing from a gantry up in the gods, his voice had timorous power and sweet reason.

I was delighted to catch up with the news, BTW, that the Mariinsky closure for restoration (which was scheduled for the end of this season), has been postponed until the end of 2009. Partly this is because the temporary home being built for the Mariinsky opera and ballet companies is behind schedule but mostly, I suspect, because the Russian authorities leaned on the Mariinsky not to close this grand old theatre before the Main Stage of the Bolshoi has re-opened (November 2009).

Thursday 27th March: Tosca at the Stanislavsky-Nemirovich-Danchenko. This is the first time I had seen this production and I was initially a little apprehensive; because Tosca calls out for a truly onctueuse presentation, whereas the S-N-D’s, love them though I do, tend to be more sparse and stripped down to visual minimums (although often strikingly so). Actually it was a success with a set design that was both minimalist but also evocative of Rome’s lavish opulence.

Tosca is another punishing role for a soprano and I thought Irina Arkadeva was only partly successful. For me her voice has too much coloratura for Puccini and now and then I thought her tendency to warble quite distracting (but this might have been to cover up some rather loose pronunciation of the Italian libretto). I have two wonderful recordings of this opera, with the Tosca role being performed, respectively by Callas and Angela Gheorghiu (the latter, Romanian diva I have yet to see perform live but her voice is extraordinary). So it is a really hard role for a younger soprano and, judging by the sour look on her face at the curtain call, I think Arkadeva realized that she hadn’t quite pulled it off that night.

But contrast, Mikhail Vekya, as the tenor lead, Cavaradossi, was just brilliant and his was a complete triumph of a performance – now if only he has sung Calaf in St Pete’s! – his performance was also so much more enjoyable because he was clearly having the time of his life. At the curtain call he was so Italian (and I mean that in a good way), I really had to check the program again to confirm he was Russian: he has a tremendous and infectious enthusiasm for his craft.

Also giving a superb performance was Aleksey Shishlaev as the con brio baddie, Baron Scarpia. His end of Act One - Tosca, nel tuo cuor s'annida Scarpia – while the chorus accompanies in a Te Deum was just riveting and bliss to experience. Overall I thought this a highly rewarding evening and a production I would recommend to anyone coming to Moscow and wanting, tentatively, to dip their virgin toe in the waters of opera.

While in St Pete's I went to a splendid classical music CD/DVD specialist I know; hard by the wonderful Astoria Hotel, where I stay. There I treated myself to some pieces that I have heard but don't own; including another piece by Estonian composer, Arvo Pärt, to whose work I am becomming addicted.

I also bought a DVD of Philip Glass's opera Satyagraha. Now almost 30 years old, this established Glass's reputation as enfant terrible of musique minimale. I have yet to carve out the right evening to listen to it. "Inspired by the life of Ghandi", it has no plot. And the libretto is in Sanskrit. It is not performed very often.

Monday, 17 March 2008

Red Exile at home: a photo-meme

From this last Sunday

(and, apologies in advance, I am a truly crappy photographer)

So I return from a week in London and before me are rows of sheeny-shiney shoes. Housekeeper had sent them to the boy at the Marriott Aurora for cleaning. I love clean shoes - scuffed shoes depress me: having them sent out for cleaning is an essential indulgence (especially as snow is forecast for Moscow later this week). The Arab photographs are part of a group I have had framed for the hallway:

While in London I splurged at Jo Malone's, inter alia, on scented candles. I brought back a bunch of 'wild fig and cassis'. The cushions, from a shop I like in Marrakesh, hide the hideous sofa (like all expats, this is a rented apartment)... into every life a little rain must fall...

The Jo Malone splurging included more bottles of Pomegrante Noir. There is no Jo Malone stockist in Russia - it is still a hard life out here LOL - so I buy whenever I am in London or fly British Airways... but the latter no longer stocks Pomegranate Noir, so I bought extra in her shop: sulk. Although I have... er... a fair stock, I always buy, because one never knows how long it will be between trips.

Housekeeper and I have a game. She constantly rearranges the bottles in different shapes, whereas I like to group them by scent (er... I 'collect' three). She goes for fancy shapes. It is our little game and, since I am never here when she is, is as close as we have gotten to human interaction since the day I hired her...

I also checked that the office courier had picked up my opera and ballet tickets for next few weeks. These are:
Tosca - 27th March
Nabucco - 29th March
Chaika (sixth time!) - 7th April
Romeo & Juliet (Dusseldorf ballet on tour) - 19th April - and I have just ordered tickets for their Stravinsky/Rites of Spring for 23rd April
Madam Butterfly - 27th April

I guess I am an opera and ballet nut (but this quarter has been a little disappointing in terms of offering, so I have gone less than usual):

On Saturday I also worshipped at the Nepresso store on Petrovka Pereulok - and finally succumbed to buying one of those cute capsule holders (who on earth buys those wildly over-priced trinkets I had, it seems). Currently on offer, Chez Exile, we have (left to right) the current 'limited edition' Goroka; the previous limited edition 'special club' (which I 'stock-piled' before it sold out); Arpeggio (for breakfast) and the one I buy for people who insist on adding cow-juice to real coffee...

On Saturday, I also bought a lamp stand: slightly Ottoman, slightly Victorian-English. That corner needed a lamp stand. It was ruinously expensive (at 31,000 RUR), but it appealed to me:

The lighting now works better and doesn't clash with the pair of landscapes I bought from Ukrainian painter, Anna Gidora, from her 'Black Sea' series. They are dedicated the the effect of the wind upon land and souls. She wrote a poem about them:
"Тень ветра почти незаметна,
Но очаровывает своим присутствием.
Ветер всегда наполнен смыслом.
Через тень он шлёт послания,Но как научиться их читать?"
"Shadow of the wind is almost imperceptible,But it charms by its presence.
Wind is always filled with sense.
Through a shadow it sends a message,
But how could we learn to read it?"
(getting into Russia, on the overnight train, required an export license from the Ukrainian Ministry of culture (Ukrainian customs); temporary import license into Russia and (signed and stamped, natch) documents for the eventual Russian export license)

Sunday evening I settled down with this really sweet US-Ukrainian film (starring Elijah Wood) and a bottle of the Marchesi Antinori's finest not-quite-plonk (of which I bought a case from Moscow's Globus Gourmet):

Quiet weekends in the world's busiest city are a treasure...

Thursday, 13 March 2008

Final Day (III) of the Ukrainian Investment Summit, London. Taking stock

Wednesday was the third and final day of the Ukrainian investment summit in London: and Adam Smith Conferences did an excellent job overall. This was the most interesting conference I had attended in years.

The session I will highlight today - and the topic, really, on everyone lips for the last three days: Spotlight on the growth in Ukrainian IPOs.

Some useful statistics from Ernst & Young’s Michael Lynch-Bell and Oleksandra Dubovyk:

- About 80 Ukrainian companies will seek IPOs between 2008 and 2012, says E&Y
- About 20% of these will be financials and about 38% will come from retail and the consumer-facing sector
- Of expected IPOs, about 23% prefer the Warsaw Sock Exchange – Exile says is the right choice for smaller-larger and larger-medium-sized firms, much cleverer than AIM which Exile loathes – and about 11%+ will go to Frankfurt. Overall, though, about 66% will chose London (and 45% overall, will go to AIM). Exile would gently opine that AIM is what *the advisers* want you to choose, because they - and their cost-base, are based in London and need London-based fees, but on a IPO+5 years basis, Exile thinks vendors and CEOs will look back and wish they had chosen Warsaw; IMHO.

Actually, if there is one theme yours truly detected this week, it is the slightest disconnect between the surge of advisors into Kyiv, and the true underlying fundamental health of the new issues market.

Now, says Exile, from a cost, secondary market liquidity and practical POV, London may not be right for loads of CEE and Eurasian firms, especially when you start to compare Warsaw or Frankfurt, inter alia, to AIM.

Elsewhere yesterday, Andrey Pivovarsky gave a very interesting presentation – and overall I think Dragon Capital really impressed at this conference: very bright, very eager, professional and – actually - nice guys. Pivovarsky showed stats that the January and February new equity bookbuilding had been – as I think we all suspected – pretty ghastly. But he remains confident across the whole of 2008.

Nonetheless, while underlining that firms undergoing IPO this quarter raised much less – or the same at much lower valuations / a bigger slice of equity – than they initially planned for; certain themes are emerging to make an IPO a success. Now, I have to say, these are not rocket science and, if anything, show that some rational thinking has come to the emerging markets equity scene; but they are worth repeating even so:

- Investors will shun new issues where the free-float is too small (e.g. even below 3o%)
- High growth plays preferred over merely ‘domestic market sector stalwarts’ (PS: some of the Ukrainian financial-industrials groups will find themselves being penalized over their commodity-price vulnerable staples, says I, and should perhaps talk more about the wizzier parts of their portfolios).
- *Transparency* is everything. Dodgy history; less than stellar corporate governance structure or arrogant vendor-oligarch as CEO-God – forget it. You might have got such an IPO away even 9 months ago. In today’s still somewhat shell-shocked market; you may not.

Then Pivovarsky said something for which – football-player-stylee – I wanted to run on the pitch and hug him – the glory days of the last two years were over, he said, “and those who can, might be better to wait” a year or two, for the best equity valuations.

As he pointed out: investors want a ‘guaranteed’ (sic) 30% annual rate of return on new Ukrainian issues; given that there are now, globally, bond products out there – with arguably much less risk – offering 20% annual return.

One speech particularly caught my interest. Although densely argued, Clive Cook, from the London corporate governance team at Baker & Mackenzie, trotted through the difference between the obligations of firms listing on AIM, versus the main market.

Although AIM toughened up the rules applicable to AIM market-listed companies, and their NOMADs, it still strikes me that, if I were an institutional investor, I would always want a risk discount on an AIM-quoted company compared, for instance, to one quoted on Frankfurt.

PS: at one point, he argued that the London market(s) had the advantage because of the inclusion it gave you in the FTSE indices. Um…not so much. GDRs are not included. FTSE International was, for eons, a client of mine. It is a teeny-tiny technical point, but for firms like Ferrexpo (which, you may recall I pointed out issued Ords in London, and not GDRs), they get a liquidity boost, which *does* benefit share price, from being main market companies. Being part of, as I think Ferrexpo now is, the FTSE350, means that index tracker funds, set to that index, *have* to own the stock. As I said, it is a teeny-tiny point but, over five+ years, it *does* positively enhance share price performance.