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Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
S T R A T E G I E S   F O R   B U S I N E S S    I N   M O S C O W

        Trade doesn't recognize friendship,
     but in friendship there can be no trade.
                      Gotthold Ephraim Lessing
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
A PROPOS

Imagine there is a premiere in a theatre. Who sits in the       terrible shortages are the main reason that the USSR
first row? The most respected people: the store director,       ceased to exist after sixty-nine years.
his deputies, the meat salesman… Why them? Because they
                                                                In an attempt to alleviate the problem with food
have the power over your groceries. You can’t get anything
                                                                shortages, a new food program was introduced in the
without their help!
                                                                USSR in 1982. It didn’t help, and the shelves of Soviet
This is the plotline of a comedy that used to be especially     stores remained empty.
popular back in the Soviet era, when there were shortages
                                                                Young people born after 1985 have trouble imagining that
of just about everything – sausage, cheese, butter… Back
                                                                there was a time shelves in grocery stores had almost
then, people could not simply buy things. They had to
                                                                nothing aside from expired canned fish.
obtain them by waiting in long lines, often getting into
quarrels and even fist fights. Sometimes deficits resulted in   Today the capital has over 56,000 stationary trade
social upheavals, in mass anti-government demonstrations.       enterprises, over 11,000 cafes and restaurants, and
From the 1960s on, these demonstrations took place in           22 agricultural markets.
Novocherkassk, Karaganda, Murom, Temirtau ...
                                                                There are more and more foreign companies in the trade
Remember the scene from Paul Mazursky’s “Moscow                 and services sector as well. Almost everybody in Moscow
on the Hudson,” where the main character buys toilet            is familiar with brand names like Metro, Auchan, Selgros,
paper after waiting in line for hours just so he can            Globus, OBI, IKEA, Media Markt, and Leroy Merlin.
proudly give it to his girlfriend? “I like to fall asleep and
                                                                Philippe Roger, Deputy General Director at Leroy Merlin,
wake up among supplies. Food everywhere. Just a little
                                                                cited interesting figures during his presentation at the
peace for some time,” popular Soviet writer Mikhail
                                                                Confindustria Russia general assembly in November.
Zhvanetsky wrote in one of his stories back in the 1960s,
                                                                He reminded the audience that retail is a great reflection of
“Who knew that we would have vinegar, but mustard
would disappear?”.                                              the state of the economy, since it has to do with the general
                                                                population’s purchasing power. In 14 years, this major
Of course, when there were food and consumer goods              company opened 1,700 stores in Russia and continues to
shortages everywhere, there was no such thing as “service.”     open another 16-17 every year. According to him, this was
It did not exist in the USSR. There was no reason to            decided back in 2011, and the company is adhering to its
attract people to stores with empty shelves. It’s the same      original plan. In 2016, 17 Leroy Merlin stores were opened in
reason there was no advertising in the country. What
                                                                Russia. Another 16 were opened in 2017, with the opening
could you possible advertise when the stores were all but
                                                                of yet another 15-16 stores scheduled for next year. At the
completely empty?!
                                                                end of his presentation, Philippe Roger optimistically said:
Why was the same country that was sending fantastic             “The sanctions did not affect us. We invest 400-500 million
ships into space unable to keep stores stocked with things      euros here every year. We are confident in the Russian
like toilet paper, sausage, shoes, cars? After all, these       market, and in Russia’s stable development.”

                                                                           Sergo Kukhianidze
                                                                           Editor in Chief

                                                                           sergomrk@mail.ru
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
Moscow official

                                                                                          A new impetus for cooperation
                                                                                          based on an old friendship
                                                                                          Moscow Days in Beijing
   CAPITAL IDEAS
   Founder: Department for External Economic                                              6-9
   and International Relations of the Government of Moscow
   Address: 125009, Moscow, Voznesensky Pereylok, 22
   Ph: +7 (495) 633-68-66, Fax: +7 (495) 633-68-65
                                                                                          Partner relations get stronger
   E-mail: dvms@mos.ru                                                                    Moscow and Ulaanbaatar sign cooperation program.
   https://www.mos.ru/dvms                                                                Mayor of Moscow Sergey Sobyanin and Mayor of Ulaanbaatar
                                                                                          Sunduin Batbold signed a cooperation program for 2018-2020.
   Publisher: National Review Ltd                                                         The ceremony was also attended by Delgermaa Banzragch,
   CEO – Sergei Oposhnyanskiy                                                             the Ambassador of Mongolia to Russia.
   Phone.: +7 (495) 784-69-71
   E-mail: nr@eurasmet.ru                                                                 10

CAPITAL IDEAS
S T R A T E G I E S                               F O R                B U S I N E S S                  I N        M O S C O W

   Editorial staff:                                                                             11
   Editor-in-chief – Sergo Kukhianidze
   Production crew of the edition: Elena Egorova (deputy editor-in-chief),
                                                                                                Moscow official
   Tatyana Akimova, Vladimir Dolmatov, Marina Ogorodnikova, Anastassia Paloni,
   Vladimir Smelov, Marina Urshina                                                              “Denkmal,
   Consulting – Evgeny Khokhlov
   Design – Robert Saifulin
                                                                                                Russia — Moscow — 2017”
   Photo editor – Victoriya Oposhnyanskaya                                                      Gostiny Dvor in Moscow hosted the fourth
   Page layout – Alexander Saifulin                                                             International Trade Fair of Heritage Preservation,
   Assistant – Nadezhda Ratanova                                                                Restoration and Museum Technology “Denkmal,
                                                                                                Russia — Moscow ‑ 2017.”
   Editorial contacts
   web: capitalideas.moscow
   e-mail: capital.ideas.editor@gmail.com
                                                                                                12-13
   f: capital.ideas.moscow
   With assistance of Moscow Center for International Cooperation
                                                                                                Successful cooperation
   Address: 105005, 68/8, build.1, Baumanskaya str., Moscow, Russia                             between Moscow and Vienna
   Phone/fax +7 (499) 267-46-56, http://www.mcms.ru/
   Distribution – "Trans-Media" Ltd
                                                                                                is the key to friendship
   Acknowledgements to:                                                                         between Russia and Austria
   PHOTO – www.mos.ru, www.dvms.mos.ru, www.stroi.mos.ru, ITAR TASS Agency, RIA-
                                                                                                Days of Moscow in Vienna
   Novosti, Getty Images Russia, companies and organizations, represented in the issue.
   If you wish to get new issues of Capital Ideas, please, apply to: editor@mcms.ru.
   The magazine is registered with at the Federal Authority of Legislative Control              14
   in Mass Media and Cultural Heritage Protection. Media registration certificate
   ФС77-53716, issued April 26, 2013.                                                           Moscow and Budapest are
   All reproduction permitted only with the Editor’s permission and reference to
   ‘Capital Ideas’.                                                                             experiencing a renaissance
   Distributed free of charge
   Published with support from the Department for External Economic
                                                                                                of bilateral relations
   and International Relations of the Government of Moscow
   Circulation : 7000
   Signed into print 06. 12. 2017
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
Moscow Global                                          Business Breakfast
                                                                                                           Nothing Ventured
Innovation is the                                      How to develop success
foundation of the                                      Hotel Metropol recently hosted an unusual           Ernesto Ferlenghi:
capital’s future economy
                                                       business breakfast organized by ProChile,
                                                       the Trade Office of the Embassy of Chile in         There is no reason to
Moscow held the Sixth International Open
                                                       Moscow. The event was unusual because the
                                                       discussion went far beyond the scope of a
                                                                                                           fear Russia
Innovations Forum. The forums broke all                partnership between the two countries. Suffice      Confidustria Russia, an association of Italian
previous records, bringing together over 18,000        it to say that the main leitmotif of the business   companies in the RF, held its annual general
participants from close to 100 countries. 650          breakfast was the following principle: the          assembly, which peaked the interest of foreign
speakers gave presentations over the course of         people should be at the center of the economy.      business community representatives. Suffice it
two days, dedicated to business, the state, and        Otherwise, why bother improving trade and           to say that over 300 business people attended
society in general.                                    economic relations at all?                          the assembly.

16-18                                                  36-37                                               38-39

        19
        City’s graph

        Moscow’s Targeted Investment
        Program for 2018-2020
        20-25
        Face to Face

        Alexey Nemeryuk: Deficits are an
        archaism that Muscovites have
        long forgotten
        The trade and service sector is one of the most prominent branches
        of the Russian capital’s economy. Just over the past few years,
        over 5 million square meters of retail space have been erected in
        the capital and half a million jobs have been created in the trade
        and service sector. Alexey NEMERYUK, Head of the Moscow
        Department of Trade and Services, talked about the development
        of this sector in an exclusive interview with Capital Ideas.

        26-27
        Moscow In Words

        28-35
        What’s New
                                                                                                               January-March 2018 CAPITAL IDEAS       3
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
Nothing Ventured                                           Our Interview
    Nothing Ventured
                                                           Jiří Podhola: We’re                                        The three pillars of
    Moscow WIKA plant:                                     entering a good time                                       anti-corruption
    German quality,                                        for doing business                                         Corruption interferes with the country’s

    made in Russia                                         Moscow has a lot of amazing buildings. But there
                                                                                                                      development as a whole and is bad for business.
                                                                                                                      Serious investors won’t come to a country that
    The German company WIKA Group                          is one that is never shown to tourists who come to         ranks low on international anti-corruption
    (Russian subsidiary - WIKA MERA,                       the Russian capital. It’s located in the very center       indices. Anatoly VYBORNY, Deputy Chairman
    JSC), a global leader in the manufacture               of the city, at 3rd Tverskaya-Yamskaya Street. This        of the State Duma’s security and anti-corruption
    of process measurement and control                     building is not unusual in terms of architecture, but      committee, talked to Capital Ideas about why not
    devices, has localized their production                rather because of the purpose it serves. The home’s        all indices are reliable, what’s actually happening
    within the scope of the import                         owner, 44-year-old Jiří Podhola, calls the home a          in Russia, the value of a businessman’s word, and
    substitution program in New Moscow.                    “unique site” for a reason.                                the ambiguity of lobbying as concept.

    40-44                                                  48-50                                                      54-57

        46-47                                                       51                                                        58-60
        Nothing Ventured                                            City’s Graph                                              Bookself

        PUMA: The era of easy                                       Social and economic                                       Teri Lindberg
        money in Russia is                                          development in Moscow:                                    founder and CEO of Staffwell, gives her
                                                                                                                              advice to foreigners thinking of starting a
        over – you have to work                                     facts and forecasts                                       business in Moscow.

        harder than before                                          52-53                                                     62-63
        The German company PUMA, which rakes in
        an annual turnover of four billion euros and                Nothing Ventured                                          People and their work
        sells their products in over 120 countries, came
        to the Russian market in the early 2000s.                   Petr Yakubovich:                                          Amiran Revishvili:
        Vladimir Gorobets, Area Head of Retail at
        Puma Russia, Turkey, Ukraine and CIS, talked                We were drawn to the                                      The heart is much
        to Capital Ideas about how the company is
        doing in Russia.                                            russian market because                                    more than a muscle
                                                                    we have similar mindsets                                  Since Amiran Revishvili headed up
                                                                                                                              the A.V. Vishnevsky Institute of
                                                                    Infobip is a mobile service with over 200,000             Surgery in 2016, he has taken on a lot
                                                                    clients and 300 mobile operators. The company’s           more responsibilities. Today, he is a
                                                                    mission is to connect users with business.                superintendent, an administrator, and
                                                                    Infobip’s Managing Director talked to Capital             a manager all at the same time. But no
                                                                    Ideas about how the company entered the                   matter what else Amiran Revishvili does,
                                                                    Russian market and what it does here.                     he is first and foremost a cardiac surgeon.

4     CAPITAL IDEAS January-March 2018
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
Smart money                                                                                                           Food&Drink
                                                         Between past and future
How to teach children                                                                                                 Uwe Lindner: A beer
financial literacy                                       The hunt for hard                                            intermediary between
“The important thing is to have money. We                currency or doing                                            Munich and Moscow
can always figure out how to spend it.” The
vast majority of people adhere to this simple
                                                         business with foreigners                                     Many people are of the opinion that, while Russia
principle. But finances shouldn’t be taken               These days you can change rubles to foreign                  has a lot of good Chinese, Japanese, Italian,
lightly, judging by the increasing volumes               currency just about anywhere in Russia. It’s                 and French restaurants, an authentic German
of overdue loans, unpaid debts, deceived                 hard to believe that there was once a time                   restaurant is hard to come by. This isn’t true. To
depositors, and personal dramas related to               when transactions with foreign currency were                 find a real German restaurant in Moscow, just visit
money. The issue of financial literacy is being          punishable by a prison sentence of up to 15                  any Paulaner Bräuhaus establishment, which are
discussed at the state level. Moscow bankers             years, and even the death penalty. This harsh                run by brand-manager Uwe Lindner. The German
were among the first people to start coming              law, which was introduced in 1960, wasn’t                    brewer and restaurateur talked to Capital Ideas
up with practical solutions to the problem.              fully eliminated until 1994.                                 about his business in the Russian capital.

66-67                                                    74-77                                                        88-91

    68-71                                                    78-79                                                       92-96
    Life&Leisure                                             Our interview                                               Food&Drink

    Shopping: Moscow style                                   Descendant of the last Tsar:                                Mircko Zago: Modern
    The Russian consumer market is the largest in
    Europe, which makes it particularly appealing
                                                             I feel the russian soul...                                  Russian cuisine is
    for investors. Growing purchasing power and
    the Russian appreciation of internationally
                                                             Artist, designer and entrepreneur Rotislav
                                                             Romanov is one of the youngest heirs of the House
                                                                                                                         similar to European
    popular brands means that more customers                 of Romanov. He was born in May 1985 in Lake
                                                             Forest (Illinois, USA), and currently lives in London.
                                                                                                                         cuisine in many ways
    gravitate toward the best shopping centers in
                                                                                                                         Mircko Zago is an excellent example of a
    the country.
                                                                                                                         person who brings his talent, energy, and
                                                             80-85                                                       enthusiasm to absolutely everything he does,
    72-73
                                                                                                                         not just his job. He started his career early,
                                                             Life& Culture
    This&That                                                                                                            working as a chef in different restaurants in

    The supermarket                                          Moscow playbill: Hot ice                                    Italy, Spain, Switzerland, and other countries.
                                                                                                                         He is originally from Italy, but has been living

    challenge                                                and rainbow flames                                          in Moscow for the past 16 years. We talked
                                                                                                                         to Mircko and found out how he likes living in
                                                             From ice shows to the mystical “Queen of Spades”            Moscow and where he draws inspiration for
    Political analysts, sociologists, and economists         opera and the fiery Ritchie Blackmore – that’s the          his culinary experiments.
    have spent countless hours arguing about what            rich cultural kaleidoscope that awaits Moscow
    caused the collapse of the Soviet Union. But if          guests and residents in the winter and spring of
    we had to sum things up in one word, it would            2018.
    definitely be “deficit.” This isn’t a reference to
    an abstract concept like freedom, but about
    empty shelves in the country’s stores and
                                                             86-87
    warehouses.                                              Moscow Vocabulary

                                                                                                                           January-March 2018 CAPITAL IDEAS         5
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
MOSCOW OFFICIAL

       A new impetus for cooperation
         based on an old friendship
                                     Moscow Days in Beijing
                  Days of Moscow in Beijing took place on October 31 - November 3 with
                  support from governments of the two capitals. Beijing residents and guests
                  got the opportunity to get acquainted with Russian culture, cuisine, and
                  customs. Businessmen and government representatives held negotiations and
                  discussions regarding further development of the two biggest megacities of
                  Europe and Asia, talked about potential projects, and gave presentations.
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
T
       he 2018 cooperation program for Moscow and
       Beijing was signed at the Mayor’s Office of the
       Chinese capital by the Minister of the Moscow
       Government and Head of the Department of
External Economic Affairs and International Rela-
tions Sergey Cheremin and Director of the Foreign
Affairs Office of the People's Government of Beijing
Xiong Jiuling.

There was also a meeting between members of
the Moscow delegation and the Vice Mayor of Bei-
jing Zhang Gong. The two sides agreed on long-
term development of relations based on friendship,
equitable partnership and strategic cooperation.
Moscow and Beijing announced that both sides
are ready to strengthen mutually beneficial co-
operation in spheres like trade and the economy,
research and technology, the energy sector, trans-
portation, education, and healthcare. The capitals
of the two countries also confirmed their intent to
actively combat organized crime, drug trafficking,
and illegal migration, expand contacts between
legislative, executive and judicial bodies, and de-        Within the scope of Days of Moscow in Beijing, the
velop tourism.                                             famous Beijing Zoo opened a photo exhibition dedi-
                                                           cated to the Moscow Zoo. Representatives from the
At the end of the signing ceremony, during his con-        two zoos signed a Memorandum of Cooperation
versation with journalists, Head of the Moscow gov-        in the presence of Leonid Pechatnikov and Sergey
ernment delegation and Deputy Mayor of Moscow for          Cheremin. Members of the Moscow delegation were
Social Development Leonid Pechatnikov noted that           shown giant pandas, which Beijing Zoo experts have
the two sides approved a framework agreement on            been working to protect and breed for many years.
continuing business and cultural cooperation for the       These animals have been a symbol of China and the
next three years. “Everything depends on relations be-     World Wildlife Fund for many years.
tween our two states. And right now, these relations
are improving,” he said.                                   A business lunch with the participation of members
                                                           of the Moscow government delegation and China’s
“It’s very important for us that such a landmark event     big business representatives took place within the
is taking place with support from the People’s Gov-        scope of Days of Moscow in Beijing. Moscow Minis-
ernment of the Chinese capital,” Sergey Cheremin           ter and Head of the Moscow Department of External
said, “Because just like China is a strategic partner      Economic Affairs and International Relations Sergey
for Russia, Beijing is a strategic partner for Moscow.     Cheremin gave a presentation on the investment po-
It is no accident that mutual trade turnover between       tential of the Russian capital.
our cities is growing. In just the first six months of
2017, it increased by 20%. We’ve had lasting busi-         China has been one of Moscow’s key trade and
ness contacts with Beijing for over 20 years. Chinese      economic partners for a long time. there are about
companies regularly take part in the development           200 enterprises with Chinese capital registered in
of the Moscow metro. Chinese specialists are work-         Moscow as of today, which puts the PRC in 9th
ing on the construction of the Moscow international        place among foreign states in terms of this param-
business center Moscow City, and are helping de-           eter. Over the course of the first 9 months in 2017,
velop our communication and telecommunication              the volume of Chinese investments in the Mos-
systems,” the Minister said.                               cow economy amounted to 557 million USD. China
                                                           ranks 18th among foreign countries in this respect.
He especially noted that Days of Moscow is the first       However, according to the Minister, these numbers
time that special attention is paid not only to official   do not correspond to the true potential of Moscow
meetings and negotiations, but also to special busi-       and Beijing.
ness conferences, the hotel industry, cooperation be-
tween the zoos of the two capitals, and cooperation        “Moscow is a very interesting market and is one of the
in the sphere culture and tourism.                         largest and most powerful agglomerations in Europe.

                                                                                                 January-March 2018 CAPITAL IDEAS   7
Trade doesn't recognize friendship, but in friendship there can be no trade - STRATEGIES FOR BUSINESS - Mos.ru
MOSCOW OFFICIAL

Leonid Pechatnikov,
Deputy Mayor
of Moscow for
Social Development
and the Vice Mayor
of Beijing
Zhang Gong

                      In terms of consumer capacity, Moscow is in the top       protects investors from non-commercial risks, as
                      three biggest markets for Western Europe and Asia.        well as provides for guaranteed partial sales of new
                      Even though China is currently a leader in terms of       products through Moscow’s government procure-
                      external economic ties with Moscow, it still ranks 9th    ment system. “Right now, doing business in Moscow
                      in terms of investment volumes into the economy of
                      the Russian capital. Germany is in first place,” Sergey
                      Cheremin pointed out.

                      According to him, Moscow is currently building
                      metro lines and just recently made the decision
                      to attract foreign investors on concession terms:
                      the total investment volume of the contracts will
                      amount to 3 billion USD. Moreover, Moscow has a
                      lot of rapidly-developing sectors of the economy
                      that are of tremendous interest to investors. Ac-
                      cording to the Minister, these sectors include ad-
                      vanced technology, transportation, engineering
                      and tourism. Moscow offers tax breaks, supports
                      industry investors, industrial developers, as well
                      as investment funds and companies that finance
                      transportation and social infrastructure develop-
                      ment projects, including within the scope of public-
                      private partnerships.

                      According to the Head of the Department of Ex-
                      ternal Economic Affairs and International relations,
                      one recent major accomplishment of the Moscow
                      government was the introduction of a new law that
is more profitable than in New York, Paris, London,      cow government is also doing everything in its power
and a number of other big cities around the globe.       to create comfortable conditions for tourists, includ-
Moscow is becoming more appealing for investors,”        ing tourists from China, in our city,” Sergey Cheremin
the Minister said.                                       said, “We agreed with our Chinese partners that tour-
                                                         ism will become one of the key areas of our coop-
Beijing also hosted two roundtables: “Moscow-Bei-        eration. This is primarily motivated by the fact that
jing: city agglomerations” and “Environmental Protec-    Beijing and Moscow are becoming increasingly more
tion.” The two events were particularly interesting to   appealing megacities. And even though we run into
Chinese experts and journalists.                         serious problems every day, we try to share our expe-
                                                         rience and solutions.”
Another special event was the “Travel to Moscow”
conference, which was attended by dozens of lead-        Statistics show that Moscow government efforts are
ing tourism experts from Russia and China. In 2016,      not in vain. Last year, a record number of foreigners
a record number of Chinese tourists visited the Rus-     visited Moscow: 17.5 million people. “Of course this
sian capital – over 500,000 people. And over the         isn’t our limit,” Sergey Cheremin said, “but we’re al-
course of the first 9 months in 2017, the number of      most on par with cities like New York, Paris, and even
tourists from the PRC grew by 30%. Starting in 2012,     Rome in terms of popularity. So this trend is very en-
more guests have been coming to the Russian capi-        couraging to Moscow and Muscovites.”
tal from China than from Germany, even though
Germans were in first place in terms of tourist vol-     Days of Moscow in Beijing were very successful and
umes for a long time.                                    mutually beneficial. In a discussion with journalists,
                                                         Sergey Cheremin announced that Days of Beijing will
Sun You, Head of Beijing's Tourism Committee noted       be held in Moscow in the summer of 2018. “I am sure
that China is one of the countries where tourism is      that our Chinese friends will hold equally impressive
growing more rapidly. According to him, the frame-       economic, cultural, and athletic events. The discussion
work agreement on business and cultural coopera-         was interesting and incredibly fruitful. Our cities have
tion signed between the two capital, strengthens         a lot of potential for cooperation. We can learn a lot
confidence that tourism between Moscow and Bei-          from each other,” he said.
jing will continue to develop successfully in the fu-
ture.                                                    The final Days of Moscow event was a solemn cer-
                                                         emony dedicated to the opening of a Moscow corner
“For us, it’s very important that such a significant     in Chaoyang Park in Beijing, where a three-meter tall
meeting is taking place under the patronage of the       Russian Matryoshka doll was placed. This was a gift to
People’s Government of the Chinese capital. The Mos-     Chinese children from the city of Moscow. ■

                                                                                                January-March 2018 CAPITAL IDEAS   9
MOSCOW OFFICIAL

                                    Partner relations
                                      get stronger
                  Moscow and Ulaanbaatar sign cooperation program
                  Mayor of Moscow Sergey Sobyanin and Mayor of Ulaanbaatar Sunduin Batbold
                  signed a cooperation program for 2018-2020. The ceremony was also attended by
                  Delgermaa Banzragch, the Ambassador of Mongolia to Russia.

                  T
                         he new program defines priority spheres of         year marks 60 years of friendly ties between the
                         cooperation for the two capitals over the next     capitals of Russia and Mongolia. We will definitely
                         three years. These spheres include the housing     celebrate this date, and signing a cooperation pro-
                         and utilities sector, education, and the devel-    gram will mark the beginning of a new stage of our
                  opment of small and medium-sized business. The two        fruitful cooperation,” he said.
                  sides will also cooperate in the sphere of urban de-
                  velopment policy, sharing experience and introducing      In turn, Sunduin Batbold thanked Sergey Sobyanin for
                  each other to regulatory documents and guidelines         the warm welcome. He expressed confidence that
                  in the sphere of spatial planning and creating a social   the new bilateral agreement will be significant for
                  infrastructure.                                           further development of relations between Moscow
                                                                            and Ulaanbaatar. Friendly ties between Moscow and
                  Another important field is healthcare, for example        Ulaanbaatar were established in 1957. The current pro-
                  sharing experience in organizing ambulance services       tocol on friendly relations and cooperation between
                  and training and professional development for medi-       the two capitals was signed on February 26, 1996.
                  cal staff. Moreover, Moscow and Ulaanbaatar will
                  help each other in the development of public trans-       Last year, trade turnover between Moscow organiza-
                  port and road and transport infrastructure. They will     tions and their Mongolian partners increased by 70%
                  share experience in organizing traffic and parking        compared to 2015, amounting to 58.7 million USD. In
                  spaces, creating transport interchanges, and using        Q1 2017, it increased by 2.2 times compared to Q1 2016,
                  intelligent transport systems and computer model-         reaching 30.3 million USD.
                  ing of traffic flows.
                                                                            Moscow exports electric equipment, detergents and
                  According to Sergey Sobyanin, partner relations be-       hygiene items, candy, grain and flour, as well as other
                  tween Moscow and Ulaanbaatar are getting stron-           food products to Mongolia. The Russian capital imports
                  ger, and mutual trade turnover is increasing. “This       knitwear, carpets and raw materials from Mongolia. ■
“Denkmal,
   Russia — Moscow — 2017”
                                                   On November 8-10, Gostiny Dvor in Moscow
                                                   hosted the fourth International Trade Fair
                                                   of Heritage Preservation, Restoration and
                                                   Museum Technology “Denkmal, Russia —
                                                   Moscow — 2017.”

D
          enkmal is one of the largest European fo-        in the center of the city, where restoration work for
          rums on the preservation of architectural        the Patriarchal Metochion was carried out at the
          heritage. About 5,000 people visit the event     same time as the construction of the modern Zarya-
          every year. This year, exhibition participants   dye Park. “We see historical streets that open up, rid-
included representatives from state heritage preser-       ding themselves of cobwebs made out of wires, lurid
vation organizations and leading restoration organi-       signs, and closed shop windows to reveal their beauty
zations from Germany, Italy, the Netherlands, Rus-         and history to Muscovites,” he said.
sia, France and other countries; science and research
organizations; customers and investors of repair and       Over the past few years, almost one thousand architec-
restoration work, as well as students from the capi-       tural monuments have been restored in the capital and
tal’s colleges who study restoration.                      8,000 buildings have been renovated, complete with
                                                           architectural lighting. “These are revolutionary trans-
Mayor of Moscow Sergey Sobyanin gave the opening           formation that have made Moscow more comfortable
speech at the event. “I’m happy to welcome you at          and beautiful. I want to thank the restoration com-
the exhibition from our colleagues in Germany, Italy,      munity, whose activities have essentially been reborn,
France, Austria, and other countries. ‘Denkmal, Russia     who put their soul, skills, and heart into the restoration
— Moscow’ has truly become a tradition. We use this        of unique Moscow monuments, and to thank the pri-
platform to discuss problems and the historical de-        vate companies who invest their funds into restoration
velopment of our cities. I thank everybody who takes       projects,” the mayor of the Russian capital said.
part in this movement, who is participating in today’s
exhibition. Welcome to Moscow!”.                           The fair also hosted a meeting between the Mayor of
                                                           Moscow and the Lord Mayor of Leipzig Burkhard Jung,
According to Sergey Sobyanin, the main goal of the         who gave Moscow a mosaic panel depicting a frag-
fair is to find harmony between city development and       ment of the map of the USSR and the Red Square. The
the preservation of cultural heritage. The combina-        Lord Mayor noted that the protection and preserva-
tion of history and modernity in the capital can be ob-    tion of monuments should not boil down to fencing
served in the metro, which features architecture from      them off and hiding them. “No,” he said, “It means us-
the past century and new technology, on the streets,       ing the old, ancient things we have in order to create
where old buildings stand alongside skyscrapers, and       something modern in the present.” ■

                                                                                                    January-March 2018 CAPITAL IDEAS   11
MOSCOW OFFICIAL

                        Successful cooperation
                           between Moscow
                   and Vienna is the key to friendship
                      between Russia and Austria
                  Days of Moscow in Vienna took place on November 14-16. Business meetings
                  and a wreath and flower laying ceremony by the Monument to the Soviet
                  Soldier at Schwarzenbergplatz marked the beginning of Days of Moscow.
                  A Moscow delegation headed up by the Moscow Minister and Head of the
                  Moscow Department of External Economic and International Relations
                  Sergey Cheremin came to the capital of Austria to participate in the events.

                  “W
                                 e won’t forget the names of the 17,000   lives for one of the most beautiful cities in Europe,” the
                                 Soviet soldiers who fell in the battle   minister said at the end of the ceremony.
                                 for Vienna. They saved many histori-
                                 cal and architectural monuments of       The main business program event for Days of Moscow
                  the Austrian capital from destruction, and gave their   in Vienna was a conference on bilateral cooperation
in the sphere of economic development, which took           sian Infrastructure,” which captured the attention of
place in the Federal Economic Chamber of Austria.           a number of European experts, took place within the
The event, which was organized with support from            scope of the conference. Members of the Moscow
the Moscow Department of External Economic and              delegation visited the Seestadt Aspern district, which
International Affairs, was attended by business and         was built using the latest energy conservation meth-
government representatives from both capitals. They         ods and smart home technology.
discussed relevant infrastructure development issues,
as well as cooperation in the sphere of restoration of      A meeting between Moscow Minister and Head of the
city spaces and the environment.                            Department of External Economic and International
                                                            relations Sergey Cheremin and Mayor of Vienna Mi-
During the plenary meeting, Moscow Minister and             chael Häupl took place within the scope of the Days
Head of the Department of External Economic and             of Moscow. On behalf of the Mayor of Moscow Sergey
International Relations Sergey Cheremin pointed             Sobyanin, the minister invited Michael Häupl to visit
out that Austria is one of the leading countries in         the Russian capital.
terms of investments volumes in the Russian capi-
tal. Among European countries, Austria is in 4th            Sergey Cheremin and Michael Häupl recalled the Vi-
place: the total volume of Austrian investments into        enna Ball recently held in Moscow, during which Mr.
the Moscow economy amounts to over 260 billion              Cheremin proposed to hold Days of Vienna in Moscow.
USD, while net investment volumes amount to over            Michael Häupl supported this idea. He talked about
3,5 billion USD.                                            the accomplishments of the Russian capital. Talking
                                                            about the expansion of Moscow and the development
“This year we’ve seen a positive trend in trade rela-       of new territories, he pointed out that there are no
tions with Austria. In the first 6 months of 2017, Aus-     comparable projects or solutions in Europe. “The fact
trian exports to Russia grew by more than 40%, while        that Moscow has expanded its area like this is amaz-
Russian exports to Austria increased by 25%,” the min-      ing,” he said, “Population density in Vienna is growing:
ister said. He pointed out that these are optimistic fig-   annual population growth amounts to 25,000 people.
ures that inspire hope for maintaining this trend and       But Moscow’s scale of growth is inconceivable for
coming back to the high trade turnover volumes be-          Austrians. There is a lot to think about here and a lot
tween the two countries in 2012-2013 within the next        to learn from Russians.”
few years. “This is a significant moment for us today,”
Sergey Cheremin said, “Since there are about 1,200          “Today, Moscow can be proud of its stable econo-
Austrian companies working in the Russian capital           my,” Sergey Sobyanin said in response, “The city has
right now, including well-known brands like STRA-           almost no unemployment, major Western compa-
BAG, Mondi, Magna Steyr, Doppelmayr, and many               nies continue to open offices in Moscow, and we’re
others.” According to Mr. Cheremin, leading Austrian        developing high-tech industries. Come visit us, and
companies represent some of the most technologi-            you won’t recognize Moscow. Those who haven’t
cally advanced industries: instrumentation, process-        visited for a while will appreciate the transport in-
ing, electronics, and medical equipment, all of which       frastructure developments, new metro stations,
are extremely important for Moscow as a rapidly de-         convenient road interchanges, pedestrian spaces,
veloping metropolis.                                        festivals, and fairs.”

Sergey Cheremin gave a number of examples of suc-           The Mayor of Vienna noted with satisfaction the
cessful cooperation between Moscow and Europe-              growth in trade turnover between Russia and Austria.
an countries – carsharing services, the construction        “This is a very important issue for Vienna’s economy. We
of athletic facilities, the development of a transport      are glad to host Muscovites who spend time here and
interchange hub system, and the development of              bring great impressions back to Moscow with them,”
commercial spaces that amount to about 14 million           the mayor said, “Isn’t this where the re-establishment
square meters of real estate. The minister proposed         of economic relations to their full capacity starts?”.
that Austrian companies take part in the develop-
ment and implementation of Moscow projects that             To conclude the negotiations, Sergey Cheremin and
have a lot of potential. “Overall, European countries       Michael Häupl exchanged gifts. Michael Häupl gave
account for over 70% of direct investments into the         the minister a sign with the image of the knight that
Moscow and Russian economies. This fact contra-             decorates the Vienna City Hall. The Minister of the
dicts the assertions that Russia has shifted toward         Moscow Government gave Michael Häupl a wood-
the East,” he said.                                         en barrel with honey. The President of the Moscow
                                                            Chamber of Commerce and Industry Vladimir Pla-
The roundtables “The Environment and Innovations            tonov presented the Mayor of Austria with old images
in City Management” and “The Development of Rus-            of Petrovka Street. ■

                                                                                                   January-March 2018 CAPITAL IDEAS   13
MOSCOW OFFICIAL

                   Moscow and Budapest are
                   experiencing a renaissance
                      of bilateral relations
                  Budapest is one of the oldest and most reliable partners for Moscow. According to
                  Minister of the Moscow Government and Head of the Moscow Department for Exter-
                  nal Economic and International Relations Sergey Cheremin, the capitals of Hungary
                  and Russia are currently going through a true renaissance of bilateral relations.
                  Mr. Cheremin made the statement during a business cooperation forum that took
                  place within the scope of Days of Moscow in Budapest on November 21-23.

                  “T
                             he history of our relations has not al-       Within the scope of Days of Moscow in Budapest, the
                             ways been trouble-free, but today we          opening of Moscow Alley took place on the bank of the
                             have reason to hope that we have a            Danube, across the popular Margarita island located
                             lot of prospects for further cooperation      between Buda and Pest. Head of the Moscow govern-
                  across various spheres,” Sergey Cheremin said. He        ment delegation and Deputy Mayor of Moscow for So-
                  pointed out that there has been a positive trend         cial Development Leonid Pechatnikov pointed out that
                  this year: the growth of trade turnover between          the relationship between Russian and Hungarian cul-
                  Moscow companies and their Hungarian partners            tures has been going strong for several hundred years
                  amounted to 25%. Export volumes from Russia to           and regardless of what happened, humanism and san-
                  Hungary are also on the rise.                            ity have always taken precedent for the two capitals.

                  The forum’s plenary session, which brought together      Budapest also hosted a meeting between Leonid Pe-
                  representatives of business communities, directors of    chatnikov and Sergey Cheremin and the Vice Mayor
                  city administrations from both capitals, parliamentar-   of the Hungarian capital Gábor Bagdy.
                  ians, and politicians, was followed by roundtables on
                  the development of road and transport infrastructure     A visit by the delegation of the Prefecture of the North-
                  and tourist potential for Moscow and Budapest. Rep-      Eastern Administrative District of Moscow to the city
                  resentatives from the Chambers of Commerce and           of Debrecen, where the two sides signed an agreement
                  Industry signed an agreement on expanding bilateral      on establishing a sister-city relationship, completed the
                  cooperation.                                             business program of the Days of Moscow. ■
useful                                              info
   Department for external economic and international relations of
   the Government of Moscow
                Address: 13 Tverskaya Street, Moscow, 125032
                Ph: +7 (495) 633 68 66
                Fax: +7 (495) 633 68 65
                E-mail: dvms@mos.ru
                www.dvms.mos.ru

   Department of Science, Industrial Policy
   and Entrepreneurship of the Goverment of Moscow
                Address: 22 Voznesensky Pereylok, Moscow, 125009
                Ph: +7 (495) 777 77 77
                Fax: +7 (495) 957 05 92
                E-mail: dnpp@mos.ru
                www.dnpp.mos.ru

   Department of Economic Policy and Development
   of the Government of Moscow
                Address: 21 Voznesensky Pereylok, Moscow, 125032
                Ph: +7 (495) 777 77 77, +7 (495) 957 72 17
                Fax: +7 (495) 629 33 42
                E-mail: dprm@mos.ru
                www.depir.ru

   Department of City Property of the Government of Moscow
                Address: 20 Bakhrushina Street, Moscow, 115054
                Ph:+7(495) 777 77 77
                E-mail: dgi@mos.ru
                www.dgi.mos.ru

   Moscow Exchange
                Address: Office 1: 125009 Moscow, Bolshoy Kislovsky per, 13
                Office 2: 125009 Moscow, Vozdvizhenka Str, 4/7, Bldg. 1
                Phone: +7 (495) 363 32 32, +7 (495) 232 33 63
                Fax: +7 (495) 234-48-40
                www.moex.com

                                                                 January-March 2018 CAPITAL IDEAS   15
Innovation is
MOSCOW GLOBAL

Moscow held the Sixth
International Open
                                         of the capital’s
                                             42
Innovations Forum.
The forum broke all previous
                                                               agreements, 24 of which entailed the par-
records, bringing together over 18,000                         ticipation of the Skolkovo Foundation, were
                                                               signed within the scope of the business pro-
participants from close to 100 countries.                      gram. Some of these agreements concerned
650 speakers gave presentations over the                       billion-dollar infrastructure projects such as
                                             the construction of a Skolkovo 5G network, while others pro-
course of two days, dedicated to business,   vided for direct monetary investments amounting to hundreds
                                             of millions of rubles. A total of 911 business meetings took place
the state, and society in general.           at the forum, a 16% increase from last year.

                                             Forum participants included residents of Moscow technoparks.
                                             The city rewards these kinds of scientists with awards and
                                             grants, subsidizing equipment purchases and the development
                                             of innovation infrastructure. It’s no wonder that forum par-
                                             ticipants demonstrated their projects to the Mayor of Moscow
                                             Sergey Sobyanin during one of the forum days.

                                             Comprehensive infrastructure
                                             A comprehensive innovation infrastructure that has become a
                                             driver of the city’s economic growth has developed in the capi-

 16   CAPITAL IDEAS January-March 2018
the foundation
future economy
tal over the past few years. As of today, Moscow’s innovation    There are over 400 production technology development cen-
infrastructure includes about 1,500 sites. A Moscow Govern-      ters currently operating in the city. “Entrepreneurs can use
ment Presidium meeting was dedicated to discussing issues        high-tech products to implement business development plans,”
related to infrastructure support.                               said Aleksey Fursin, Head of the Department of Science, Indus-
                                                                 trial Policy, and Entrepreneurship.
“There are a lot of enterprises and organizations in Moscow,
tens, if not hundreds of thousands of people, from academic      Moscow’s innovation infrastructure currently includes about
institutions to startups.                                        1,500 sites, which house over 3,500 units of modern, high-tech
                                                                 equipment. This includes:
Industry-specific institutions, private and state tech-
noparks, scientific and industrial clusters that work in         •   The Moskva Technopolis special economic zone
space, aviation, the nuclear and medical sectors are all en-     •   31 Technoparks
gaged in innovative projects,” Sergey Sobyanin said. He em-      •   “Digital Business Space” - upgraded Central House of the
phasized that innovation is the foundation of the capital’s          Entrepreneur
future economy.                                                  •   76 coworking space
                                                                 •   five production technologies development centers
Moscow’s improved positions in national and international        •   two innovation clusters in Zelenograd and Troitsk
competitiveness ratings serve as confirmation of this fact. In   •   children’s technoparks (quantoriums)
late 2016, Moscow was ranked 43rd in a global rating of inno-    •   service centers for business and other organizations
vation cities by international rating agency 2Thinknow, rising
from 192nd in 2011. Moscow also placed third on the national     Right now, the most important infrastructure sites for inno-
investment climate rating.                                       vation companies are Technopolis Moscow and technoparks,

                                                                                             January-March 2018 CAPITAL IDEAS   17
MOSCOW GLOBAL

                                                                       microelectronics and instrument engineering (190 partici-
                                                                       pants and over 8,000 employees). The second cluster is in
                                                                       Troitsk. It specializes in new materials, as well as in laser
                                                                       and radiation technologies (58 participants and about 6,000
                                                                       employees). “Regional innovation clusters are cooperations
                                                                       between science, education, manufacturing, and business,”
                                                                       Aleksey Fursin said.

                                                                       In October 2017, Sergey Sobyanin opened the renovated House
                                                                       of the Entrepreneur. The objective of this multifunctional plat-
                                                                       form is to become a portal for entering Moscow’s innovation
                                                                       infrastructure.

                                                                       The city is granting subsidies for purchasing equipment for in-
                                                                       novation companies worth up to 200 billion rubles, develop-
                                                                       ing infrastructure worth up to 300 million rubles, and provides
                                                                       technology parks and their residents with tax incentives that
the number of which has increased by five times over the past          have reduced taxes by up to 25 percent. The city also supports
four years (there were six in 2014, and there are 31 now). The         startups. The Moscow Foundation for Support of Industry and
number of resident companies in technoparks also increased             Entrepreneurship provides affordable loans for research and
by almost four times (from 450 to 1748) and the number of              development and engineering projects (up to 50 million rubles
jobs increased by 6.5 times (from 6,800 to 44,100). Tech-              with 5 percent interest rates for five years). The Venture Invest-
nopark residents can rent space at attractive prices, get access       ment Promotion Foundation issues venture loans to startups
to high-tech equipment and services such as clean rooms and            (up to 30 million rubles). Young scientists receive bonuses and
labs for experiments.                                                  grants for expanding their projects (33 bonuses worth one mil-
                                                                       lion rubles each).

Sharing experience
                                                                       Innovative purchases
Another aspect of innovation companies is sharing experience
with international partners. The International Association of          The city’s departments of construction, healthcare, informa-
Science Parks and Areas of Innovation (IASP) includes 374 tech-        tion technology, transport, housing and utilities lead the way in
noparks from all over the world and 142,000 resident companies.        terms of innovative purchases among executive agencies. Open
                                                                       Inquiries and Manufacturers’ Sessions are important tools for
After the 33rd IASP conference, which took place in Moscow in          boosting demand for innovative goods.
the fall of 2016, it was decided to create a Eurasian IASP division.
The division includes 31 technoparks from Russia, Azerbaijan,          Open Inquiries allow executive agencies to seek innovative so-
Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Mongo-              lutions for topical utility infrastructure requirements. The city
lia, Tajikistan, Turkmenistan, and Uzbekistan. 18 of these tech-       implements the best solutions. In turn, Manufacturers’ Sessions
noparks are located in Moscow. The Moscow Export Center is             allow manufacturers of goods and technologies to show them
the coordinator of the project.                                        to potential clients and to receive feedback.

There are a total of 76 coworking spaces operating in the city.        Forty open inquiries have been made to date, with 859 compa-
Each one is equipped with 100 work spaces. People rent spaces,         nies suggesting 1,051 solutions. The city has organized 80 events
business services, and much more. All of this speaks to the de-        for manufacturers of innovation goods, with 340 manufactur-
mand for coworking spaces among young companies.                       ers presenting 444 promising goods or technologies.

There are five production technology development centers op-           The city has also developed the iMoscow online navigator for
erating in Moscow. They support small and medium-sized tech            using the innovation infrastructure. This navigator helps en-
companies. Any entrepreneur can work out the technological             trepreneurs receive information and use various services. The
process in detail, learn about the different functions of manu-        website has an interactive map of infrastructure facilities. Its
factured product samples, and get new products certified. In           users can learn more about various services and opportunities
2017, 354 high-tech companies used services provided by these          in innovation business support, book facilities at technology
centers. Enterprises were provided with over 2,600 services re-        parks and co-working spaces using their account, and learn the
lated to technological development, trials, and product stan-          latest news from the innovation sector.
dardization.
                                                                       This approach towards developing the innovation ecosystem
There are two regional innovation clusters developing in the           allows Moscow to attract talent, projects and high-tech in-
city. The first one is located in Zelenograd. It specializes in        vestment. ■

 18   CAPITAL IDEAS January-March 2018
CITY’S GRAPH

   Moscow’s Targeted Investment Program
               for 2018-2020
            Transportation system development continues to be a priority
            for the city government

METRO

                                           81,7 km                 of metro lines

                                           6   electric engine houses

                                           35     metro stations

                                           55     transport interchange hubs

ROADS

300 km        of roads

80  engineering structures

40  pedestrian crossings

          In New Moscow:

          110 km             of roads

          13     pedestrian crossings

          21      engineering structures
                                                     Source: Moscow Complex of Urban Development Policy and Construction

                                                                        January-March 2018 CAPITAL IDEAS           19
FACE TO FACE
Alexey Nemeryuk

Deficits are
an archaism that
Muscovites have
  long forgotten
      The trade and service sector is one of the most prominent branches of the
      Russian capital’s economy. Just over the past few years, over 5 million square
      meters of retail space have been erected in the capital and half a million jobs
      have been created in the trade and service sector. Alexey NEMERYUK, Head of
      the Moscow Department of Trade and Services, talked about the development
      of this sector in an exclusive interview with Capital Ideas.

      Mr. Nemeryuk, how did import substitution initia-            tries, we started to work with the regions in the
      tives impact the capital? Have there been food def-          food sector. This cooperation takes places within
      icits? What does the current ratio of domestic ver-          the scope of intergovernmental agreements that
      sus imported products in Moscow stores look like?            Moscow currently has with just about all federal
                                                                   subjects of the Russian Federation. The point of
      I’ll say right off the bat that there are no food deficits   these agreements is as follows. First, to create the
      in the capital, and there won’t be any in the foresee-       conditions for the stable development of regional
      able future. This popular word borrowed from the So-         agricultural producers. Second, to sell these prod-
      viet era has been forgotten by Muscovites completely.        ucts in Moscow.
      (Smiles) As a major city, Moscow consumes over 12
      million tons of food products annually.                      Today, food products in the capital come from over
                                                                   50 regions in Russia. Thus, domestic producers cover
      Right after the introduction of bans on the import           almost all of the city’s grain, wheat, buckwheat, and
      of food products from a number of foreign coun-              egg needs. They also account for 90% of potato, 88%

                                                                                      January-March 2018 CAPITAL IDEAS   21
FACE TO FACE

                                                                             different Russian regions. There are 13 shopping
                                                                             centers from different regions featuring a wide
                                                                             range of products, including live fish, which has its
                                                                             own separate section. It has over 250 kinds of live,
                                                                             chilled, smoked, and frozen fish, as well as seafood
                                                                             from Murmansk, the Far East, Dagestan, Astrakhan,
                                                                             Belgorod, and the Crimea.

                                                                             Food products in Moscow are sold not only in over
                                                                             56,000 stationary enterprises, but also in agricultur-
                                                                             al markets (there are a total of 21 in the city). Not to
                                                                             mention the fact that the capital has a great tradition
                                                                             of holding all sorts of food markets, including week-
                                                                             end markets. Last year, 109,000 Russian producers
                                                                             took part in weekend markets and over 25,000 tons
                                                                             of agricultural products were sold. 2,974 weekend
                                                                             markets have already been held in 2017.

                                                                             All of these events aimed at providing Moscow resi-
                                                                             dents with domestic food products have helped us
                                                                             keep the city’s food product market stable, avoiding
                                                                             price fluctuations and deficits.

                                                                             Moscow has a lot of major foreign chains: Metro,
                     of sugar, and 85% of vegetable oil volumes (and all     IKEA, Leroy Merlin… what is their share of the mar-
                     sunflower oil is produced domestically). We do import   ket in general?
                     some fruits and vegetables. But this trend is wan-
                     ing, along with the share of imported meat and meat     In terms of foreign supermarket chains like Billa, Metro,
                     products on the Moscow market.                          Auchan, Selgros, and Globus on the Moscow market,
                                                                             their share is not very high. It amounts to about 4.5%.
                     The agro-logistics infrastructure that is being de-
                     veloped in the city plays an important role when it     The share of foreign chains outside of the food sector
                     comes to increasing supplies from domestic pro-         is significantly higher, about 47%. It’s worth point-
                     ducers in the capital as well. In 2014, the first ag-   ing out that these are primarily major players that
                     ricultural cluster called “Food City” opened in the     focus on construction materials (OBI, Leroy Merlin,
                     Russian capital. The food sold here comes from 63       Castorama), household appliances and electronics

 22   CAPITAL IDEAS January-March 2018
(Media Markt), home and interior design products
(Ikea), as well as clothing and footwear from inter-
national brands.

Interestingly, the latest business trend has been shift-
ing toward smaller spaces. Even major retail chains
are gravitating toward this. Grocery stores have start-
ed to opt for areas about 150-200 square meters in
size. The French chain Auchan, for example, is starting
to create smaller stores under the brand name “My
Auchan.” In August of this year, one of these stores
opened its doors on Tverskaya after the street under-
went reconstruction within the scope of the “My City”
program. In terms of chains outside the food sector,
an H&M opened on Tverskaya in 2017 and a NIKE and
a Massimo Dutti popped up on Kuznetsky Most.

Russian grocery chains are also adjusting to custom-
er behavior, and customers have started to shop at
stores located closer to their homes more frequently.
It’s convenient to drop by after work, spending as little
time on shopping as possible. For example, Azbuka
Vkusa and Perekrestok have bigger supermarkets
along with smaller options (AB Daily and Perekre-
stok-Express). The expansion of pedestrian spaces in        You know, it’s probably a combination of all of these
the center of Moscow is also a factor. There are more       things. There are over 10,000 cafes and restaurants
pedestrians here, according to expert assessments,          currently operating in Moscow. And this figure is
which means the number of people shopping has also          more or less stable. I say “more or less” because, for
gone up. Of course, chain owners are expecting this         a number of reasons, these establishments open
kind of behavior, instead of shopping trips where fam-      and close frequently. For example, last year 1,279
ilies buy groceries for the whole week, which is what       new cafes and restaurants opened while 726 closed.
happens in stores located near MKAD.
                                                            But the number of summer cafes in the capital has
Street food is, to put it mildly, not one of Moscow’s       doubled over the past five years. There were about
strong points compared to foreign cities. Why? Is           1,200 of them, and now there are 2,400. According
this about climate, the economy, or maybe culture?          to polls, 70% of Moscow residents and guests would

                                                                                                  January-March 2018 CAPITAL IDEAS   23
FACE TO FACE

                     prefer to sit outside as opposed to indoors. Thus, the   dedicated to City Day, had street food stands op-
                     improvements that are currently taking place in Mos-     erating across 40 platforms. There was all kinds of
                     cow are giving a very clear signal to business: yes,     street food: delicious pies with different fillings, ke-
                     summer terraces will be in demand in the near future.    bab skewers, tender kulebyaka, the air-light “Bird's
                                                                              Milk” cake, and so much more. No wonder that over
                     City festival spaces within the scope of “Moscow         ten million people visited the festival events. Both
                     Seasons” events definitely have a lot of street food     the comfortable city atmosphere throughout most
                     options. The festival that took place in September,      of Moscow and great service, of course, had a lot to
                                                                              do with this.

                                                                              In 2018, Moscow will be hosting the FIFA World
                                                                              Cup. The impressions foreign fans will have will
                                                                              depend not only on how well their team does, but
                                                                              also on how comfortable they are in the capital.
                                                                              That is, on the trade and services sector. Is the
                                                                              city preparing something special in this regard?

                                                                              I am confident that not a single tourist who comes
                                                                              to visit us for the World Cup will be left hungry.
                                                                              There will be a wide range of food services, includ-
                                                                              ing dishes for all price ranges. There will be haute
                                                                              cuisine, affordable business lunches, family estab-
                                                                              lishments with game rooms for kids, and more. It
                                                                              all depends on personal preferences of the visitors
                                                                              (location, prices, taste). There will be ways to find
                                                                              restaurants, book tables, or order delivery on spe-
                                                                              cial websites like Afisha and Menu.ru, as well as on
                                                                              search engines like Yandex, 2GIS, and others. ■

 24   CAPITAL IDEAS January-March 2018
January-March 2018 CAPITAL IDEAS   25
MOSCOW IN WORDS

                  “Cold frost and sunshine: day of wonder!                  “The forest is entranced
                  But you, my friend, are still in slumber -                by Winter the Magician.
                  Wake up, my beauty, time belies:                          Under velvet snow
                  You dormant eyes, I beg you, broaden                      it's mute, immobile, glistening
                  Toward the northerly Aurora,                              wondrously with life,
                  As though a northern star arise!..”                       standing enchanted,
                       Alexander Pushkin,                                   neither dead nor alive,
                       the greatest Russian poet,                           entranced by a magic dream,
                       “Winter Morning”                                     entirely covered, fettered
                                                                            by light links of snow…”
                                                                               Fyodor Tyutchev, Russian
                                                                               poet, “The forest is entranced
                                                                               by Winter the Magician…”

                                                               “All going to the whiteness, earthly,
                                                               As an unmoving immense wall,
                                                               There pours a snow, becoming denser,
                                                               And shields us from daylight at all.
                                                               Not giving to its move attention,
                                                               How slow is its heavy stream –
                                                               It seems, the force of gravitation
                                                               Directs it to the earthly realm…”
                                                                  Konstanin Vanshenkin, Soviet poet
                                                                  and lyricist., “Snow”

26   CAPITAL IDEAS January-March 2018
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