The Orange Tree

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The Orange Tree is the latest offering from Maison Dellos next to their famous brands Turandot and the ever-popular Café Pushkin. So an offer from the management to invite the Moscow Good Food Club was eagerly accepted.

The Orange Tree has a comfortable, contemporary style, relaxed yet smart! On arrival the indomitable members were offered a very pleasant glass of Prosecco Rugeri and the first course of Forrest Tapas were served whilst we congregated and met old friend and new acquaintances. The Forest Tapas consisted of a trio of Duck, Deer and Lamb presenting an interesting challenge to pick out the flavours in turn. This was followed by an amazing celeriac mouse, which created a wonderful blend of autumnal flavours.

It should be noted that the Executive Chef Sauli Kemppainan from Finland is already making quite a name for himself for his provocative and yet highly original flavours, garnered from his native land.
Having been called to our tables we were presented with ‘Kikta’ It sounded delicious: Smoked Vendance fish, Romano salad, radish, pickled red onion and croutons with a dill dressing, but unfortunately the general opinion was that the balance of flavours did not work. It was fresh and the flavours were there, but the overall presentation and taste left most slightly disappointed. The Luigi di Bosco Chardonnay was possibly the reason as the pairing just did not complement each other.
The Farmers Duck roasted and served with mashed potatoes, red cabbage satay and red current sauce on the other hand was excellent. Succulent roasted duck, generally perfectly cooked, evoked our taste buds awoken by the excellent combination. The wine, a Luigi di Bosco Malbec was a little too light for the strong duck flavour, and lacked strength and tannins.

The Chocolate-Tabak dessert with fresh raspberries and raspberry sorbet was a masterpiece, excellently balanced and presented. This was accompanies by a Xeres Pedro Ximenez an excellent and unusual sherry that perfectly suited the tart flavours of the fruit and sorbet.

Over tea and coffee the table spokespeople presented their Critiques and ratings. Generally positive, however there was a feeling that some factors could be improved, especially the service standards.
As always, members were asked for some comments on the question of the evening which was: “The Winter is virtually upon us. What preparations do you make physically and mentally to prepare for the cold winter months ahead?”

Naturally the robust wines had an effect on the answers on our intrepid members but the general opinions were to plan to travel and enjoy the expectations of that vacation, to dig out the warm clothing and to make a preventative visit to the pharmacy in addition to eating, drinking and making merry!

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Restaurant Scandinavia

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With all the changes and new openings in Moscow becoming quite bewildering, the Moscow Good Food Club were delighted to be invited to one of our long term favourites for our September gathering. Scandinavia Restaurant has been at the leading edge of service and quality since it’s opening way back in 1995 and many long-term expats can regale stories of the wild days. However the past is the past and we are back in the present as and the gallant members of the MGFC made their way to Scandinavia eagerly awaiting the magical culinary skills of Jonas Grip who had promised us an extra special Scandinavian autumn menu. Little did we know what was in store for us!
A Kir Royale proved to be an excellent opener and the conversation immediately flowed fulfilling the traditions of the club, Good Food, Good Wine and Great Company.

Click to Zoom

Click to Zoom

Soon we were called to our tables and the feast commenced. We were presented with a bowl of a half dozen Crayfish that had been perfectly boiled with beer and dill and accompanied by other Scandinavian specialities of Boxholm spice cheese and home made crisp bread. We imbibed on the traditional drinks for this dish, Gold of Lapland Beer and Aalborg Jubileums Aquavit from Denmark.
Executive Chef, Jonas Grip said a few words of welcome and then proceeded to show the eager members how to properly eat the crayfish. So with this instruction in our minds we attacked the succulent Crayfish and enjoyed the spicy Boxholm cheese. Fortunately all traditions were recognised and with the assistance of another Swedish member, Jonas led us in the Swedish song that has to be sung at such a meal.

With the carnage of the first course removed we were served with a superb crayfish soup, served with an amazingly flavourful slice of cress and spinach pie. In observance of Scandinavian traditions this was accompanied by an Amontillado Jerez elegante medium sherry.

It should be noted at this time that the service in Scandinavia was flawless, the girls, many of whom have been with the restaurant for more than 10 years are quiet, unassuming yet amazingly efficient, friendly and professional.

The main course was a triumph for Jonas. Roast Pheasant with a Calvados creame sauce, apples, cep mushrooms and a delightful potato galette. The succulent pheasant was complemented by the light, creamy calvados sauce. The wine pairing was excellent and the Chateau Gaillard Grand Cru 2007 Saint Emillion had the exact attributes to bring out the full, autumnal flavours.

 

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Following to the main course we were offered a short reprieve whilst the dessert was prepared. When it appeared it was a work of art of cloudberries and parfait flavoured with Swedish Punch accompanied by a crisp Baron de Vitrac 2008 Sauternes finishing the excellent variations of the Scandinavian autumnal menu. Full and highly satisfied it was time for the member’s comments.
Each of the delegated spokes-people for the tables took it in turn to provide their ‘critiques’. All were unanimous in their delight of the meal and the accompanying wines with great praise for Jonas and his team. There were some minor comments, which every Chef actually likes to hear as a way to learn tastes and to improve.

In the meantime teas and coffee had been served and yet another alcoholic flavour to be enjoyed as we were all offered a Drambuie to round off a truly excellent meal.

 

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As is customary, our guests were asked for their comments on our topic of the evening. As sanctions had been recently introduced the questions was relevant: We are living amid a major political ‘situation’. Has this had any effect on your daily life in any way? If so please advise. Have you noticed any effect from the sanctions? Any products that you can’t find now?

Due to alcohol consumption some of the comments had to be deleted but generally the feeling was that life had not changed that much. Some specialised products, especially dairy, were not available at the time, however short supplies of other vegetables now seem to have been addressed on subsequent shopping excursions.

So Scandinavia and Jonas Grip proved that an old friend is a good friend! An excellent meal in cosy surroundings as good as any that we have enjoyed for many years.

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Hotel Rodniki

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I have been often asked to visit and write about luxury hotels around the world and have generally become highly critical of the abuse of the word ‘luxury’. To make a claim to be a luxury property is one thing, but to be able to provide luxury through and through is something else! So often one is sold ‘luxury’ and therefore the expectations start higher but so often the reality does not live up to the expectations.

However my recent visit to the Hotel Rodniki was quite the opposite. I had no idea what to expect and arrival at night in the middle of the first snowfall of the winter hardly prepared me for the wonderful surprises ahead.

The Hotel Rodniki is a luxury boutique hotel comprising of just 6 luxury cottages, the reception building and the restaurant/bar located in a massive parkland on 7 hectares. Moscow architects Atrium Bureau created the project design, ensuring an amazing adaptation to suit the unspoilt rural landscape. There is so much space between the cottages and they are so designed that you hardly see another person.

The interior design by highly talented Russian interior designers, Mikhail & Dmitry Ganevich, is modern, spacious and welcoming. Clever use of natural stone and wood has created a wonderful blend of traditional and new. The smallest ‘rooms’ are the one-bedroom deluxe suites with a whopping 155 sq. meters of space each. The main room is vast, featuring large windows facing the forest, an open fireplace with stone chimney, dining table and lounge area. There is a tea/coffee kitchen with coffee machine, sink and large well stocked mini bar. The beautiful wood shingle wall reveals a secret of a hidden high tech TV that emerges at the touch of a button. All window blinds are also fully automated.
The sumptuous bedroom is large and bright, yet cosy with panoramic windows, large walk in closet and a beautifully appointed bathroom.

So quite normal? No! Attention to even the smallest detail is what makes the Hotel Rodniki so special. All materials are of the highest standard, 600 weave Egyptian cotton sheets, soft voluminous towels, Chopard bathroom amenities have been carefully selected to provide full support to a truly luxury product.

The hotel is located approx. 80 kilometres from Moscow. If you don’t travel on a Friday evening the journey time is around two hours. The hotel cottages are located in a large forested plot ensuring privacy and extreme quiet. There is a very comfortable restaurant and bar that ideally suits this countryside setting. Service is friendly and efficient and there is an English menu. Rodniki provides a relaxed and informal dining experience with well prepared favourites made from very fresh ingredients. The dining experience is complemented by an extensive wine list with many excellent wines at most reasonable prices.

Breakfast can be taken in the restaurant but a short call to room service brings all that you require to the comfort of the table in your suite. A wonderful start to the day with fresh products, a roaring fire and views out on to the snow covered forest.

The Hotel Rodniki is perfect if you need to get out of the stress of Moscow for a weekend. There is nothing to do other than relax, eat and drink! This is not actually quite true, as there is a small spa, small fitness room and a charming sauna cottage that features a Japanese bath outside and Finnish sauna. You can also order your massage in this cottage.

Each of the 6 cottages comprises of a one-bedroom suite and a 2-bed duplex. The two units can be combined by renting the entire villa making a total of 3 bedrooms, 3 bathrooms and sofa beds for an additional 4 people. Ideal for large families, birthday celebrations and even corporate retreats.
It is not cheap but you really receive the comfort and quality that should be associated with a true luxury hotel.

Hotel Rodniki
Tel +7 495 212 1232
email: info@rodniki-hotel.ru
Www.Rodniki-hotel.ru

Myths and Realities in the Russian Market

Selection_517It is an obvious understatement to say that 2014 has been a very tough year for the economy and business in Russia. As winter approaches the pace of growth has slowed to a trickle with only the modest boost to domestic manufacturing from the weak rouble and the continuing high spending on defence equipment preventing a slide into recession. A technical recession in the fourth quarter or the first quarter of 2015 is, however, still very likely.

2014 has also been a very tough year for expats working in Russia, especially those paid in roubles. The value of the rouble has fallen by one-third against the US dollar and by one-fifth against the euro since the start of this year and that follows a 10 per cent decline against both in 2013. With a movement like that the relatively low domestic income tax rate is largely irrelevant. As at the start of November it is a tough call to say that the rouble is near a support level. That primarily depends on where oil trades, on what happens to sanctions and also on how the Central Bank (CBR) responds to the decline.

2015, in economic terms, is starting to look similar to an expat’s second winter in Russia; the first was a novelty and had something of an exciting unpredictability about it. By the time the second winter comes around you know exactly what to expect and it will be miserably long. Unfortunately the economic outlook for 2015 looks no better than has been the case in 2014.

Selection_516Inflation will rise further this winter and interest rates will remain high until the CBR is convinced that the peak in inflation has passed. This may happen sometime next spring. State budget spending will depend on oil revenue and, if that remains as low as is the case today, on a willingness to delay non-essential spending such as in the defence sector. And then there is the sanctions question. There is a wide spread of growth projections for next year from minus 1.0 per cent to plus 1.5 per cent with the key difference being the assumption on whether sanctions, especially those blocking access to western debt markets, get worse or start to get better from the spring. At this stage most optimism is reserved for a recovery in 2016 and a return to meaningful growth in 2017. To be clear, while I expect a tough winter and spring in the economy, I am firmly in the optimist’s camp for 2016.

But apart from one’s rouble earnings buying less during the trip back home or on vacation, not to mention the very high double-digit inflation rate on imported goods, expats also have the perception issue to deal with. It is a cliché to say that truth, or facts, are the first victims in any war. By any measure, 2014 has been an extraordinary year for propaganda both for and against Russia. If one only looks at Russia TV the message is that sanctions have back-fired spectacularly against the EU and are actually providing a much needed boost to the local economy. If one only reads some western publications, including much of the mainstream, the message is that the Russian economy has already slipped over the edge of the abyss and Soviet-era queues are inevitable this winter.
As always, the truth is somewhat obscured in the middle. So what are the myths which have been propagated and what are the, probable, realities?

Sanctions make Russia stronger. In theory that has some basis of truth for some sectors of the economy but only if sufficient investment is applied in an efficient manner and only after several years. Agriculture and food production is one obvious area where Russia could be more self-sufficient and undoubtedly this is one reason why the retaliatory actions have come in this sector. But after two decades of low investment and a loss of the skilled workforce, improvements to domestic production will take years. The same applies, only much more so, to the technology sectors and across much of the country’s manufacturing base.

Russia faces a 1998 style default. No it does not. Sovereign external debt to GDP is only 3 per cent and total Russian external debt is only about 33 per cent of GDP. For sure there are many companies queuing for access to the country’s sovereign wealth funds and other state resources and using the money this way will hurt other recovery options. But to suggest that a default is possible one would have to assume a series of events, which would crash other economies long before Russia defaulted.
The rouble will collapse. It has already collapsed by one quarter against a basket of dollars and Euros so far in 2014 and that followed a 10 per cent loss in 2013. At the current level the rouble is pricing in $80 per barrel oil, financial market sanctions remaining for twelve months, and then some. In financial terms the currency is weaker than it should be given the combination of factors, which usually influence the exchange rate. The one unpredictable factor is sentiment and that has been made worse by the fact that the CBR is firmly sticking with the plan for a free float in early 2015 but meantime is still setting currency trading bands. That latter tactic simply tempts traders to play poker against the CBR. When the free float happens, and assuming the oil price stays at least at $80 per barrel and sanctions get no worse, then the rouble should strengthen rather than collapse further.

Weak oil will destroy Russia. Here again some observers are too quick to equate the current situation with what happened in 2008. A collapse in the oil price from mid-2008 directly led to the destruction of $200 billion of financial reserves and a near 8 per cent collapse in the economy in 2009. The big difference this time is that the CBR has allowed the rouble to take the hit and that has both protected the budget and created an indirect stimulus for manufacturers. Of course that has not been enough to prevent the sharp slowdown in the economy and it doesn’t, in singularity, create a recovery catalyst. But it does mean that the state has spending options coming into 2015 and the economy can sustain either very modest growth or confine any decline to less than 1 per cent. $80 average oil, based on current spending plans, plus today’s rouble exchange rate would mean a 2.5 per cent budget deficit in 2015. This is hardly a default scenario.

When sanctions end the economy will return to normal. Yes and no. Yes the economy will return to the problems which were starkly evident in late 2013 and which will be more difficult to redress because of the events of 2014. No it does not mean that Russia can return to the 4 per cent annual growth it needs to sustain long term if the economy is to expand and diversify. Recall that growth in 2013 ended at only 1.3 per cent instead of the 3.5 per cent expected at the start of the year. Russia needs a new long-term growth driver and that can only come from an increase in foreign investment and the continued participation of experienced western companies. The so-called Asia-pivot can only add to diversification but cannot be a substitute for western partnerships. Despite the current rhetoric, that is a fact, which appears to be well understood in government.

There are many other myths and realities which are beyond the scope of this note. Some are beyond the current political and sanctions noise. For example, the dire predictions of a huge decline in the country’s population have already been proven false but Russia still has a serious workforce demographic and pensions deficit problem to be addressed.

All expats know that while winters are regularly tough in Russia they do eventually give way to spring and summer. By the time you get to the start of a third winter you learn to buy a thicker coat.

Interview with Dr Frank Schauff

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The Association of European Business (AEB) is probably the best-organised business association we have, and organises interesting high-level meetings on a regular basis that many of us rely on as a source of essential information. In this interview, Dr Frank Schauff, the AEB’s CEO briefly describes the Association’s history, function and the importance of Europe and Europeans in Russia.

What is the history of the AEB?

The Association of European businesses was founded in 1995, nearly 20 years ago now, which is already quite a long time for an association within the rather fluid Russian framework. When it was formed it was called the European Business Club, and I gather it was a more informal structure in those days. About 10 years ago, after a little bit of a crisis in the organisation, it was rebranded into the Association of European Businesses.

When were you appointed CEO?

In 2007.

What is the function of the AEB now in Russia?

At the end of 2013, about 50% of Russia’s foreign trade was with European countries, and over 50% of foreign investment came from European sources, so the AEB represents the strongest consolidated group of foreign investors in Russia. We represent a wide portfolio of sectors, including – naturally – the energy sector. All of Europe’s main energy businesses are members. We have strong banking and taxation committees, but perhaps the most visible committee is the car manufacturing committee, which is basically all the main foreign car manufacturers besides the Chinese; including American, Japanese and Korean manufacturers. New committees are being formed in line with the market. For example, we recently started a working group dedicated to heating systems, as we have a number of international companies that are active in this industry, and they have decided to come together under the aegis of the AEB to organise their lobbying activities with regards to legislative regulations and other issues.

Our main activities are lobbying the interests of our members to the various departments of the Russian government, which we work in close cooperation with. We are constantly writing letters to the government about various issues on behalf of our members, and high-ranking government officials attend our meetings, which is something we appreciate, as we are thus able to convey the position of western manufacturers to the Russian government. Good recent examples are the talks given by Foreign Minister Sergey Lavrov, the Head of the RF Federal Antimonopoly Service Igor Artemiev, and the Presidential Commissioner for Entrepreneurs’ Rights Protection Boris Titov.

How do the committees work?

We have about 40 committees working inside the Association, half of them are organised in a horizontal way that go across sectors. The committees are formed on the basis of common interests between players with other given industries.

The core function of the committees is lobbying. We invite governmental representatives, when it is appropriate, to discuss issues of concern with the relevant company or group of companies. Networking is also on going, not usually organised by the committees, but by the organisation as a whole. We hold various networking events in five star hotels, which are attended by hundreds of people, depending on the event. Three or four times a year, we organise receptions at various embassies called ‘EuroReceptions’. Recent receptions were held in the Polish or the German embassies.

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How many companies now are involved with AEB?

At the end of 2013, we had 615 members. These are mostly large, European corporations, and we will remain at this level this year.

Do you have a tiered membership programme?

There is a differentiation between larger and smaller companies, regarding the membership fees. Numerous benefits of the AEB membership include: work and visa permits due to agreements between the Association of European Businesses and the Federal Migration Service of Russia, lobbying, interaction with Russian officials and ministries, participation in AEB events including high profile events as EuroReceptions, marketing opportunities, networking, provision of quality information, obtaining special rates for employees’ voluntary medical insurance in the framework of the VMI Program, participation in the AEB Training Programs as well as an opportunity to participate in tenders to conduct corporate trainings.

Can individuals join the AEB?

Yes, if they are entrepreneurs. We are a business association. I do not want to be offensive, but John Harrison as a person cannot join, neither could I, as an individual.

Looking into the future, how do you see the AEB working in Russia?

I think that the activities of an organisation like the AEB could be become more important in difficult times. There is a heightened need to exchange views and information, and there is also a real need in regard to protection against what is happening internationally; specifically between what is happening between Russia and the European Union. We have seen some European companies joining which were not previously members. This shows that the structure of the AEB, as we also saw during the crisis of 2008 and 2009 is even more valuable in difficult times.

In your opinion are Europeans still needed and valued in Russia?

First of all I would like to point out that the majority of Russians have no doubt that Russia is a European country. Russia has a European culture, and ethnically speaking, most Russians are Europeans, and therefore the orientation towards Europe is a strong one, and will remain so. Therefore I think that in general terms, Europeans are welcome here even though relations between Russia and Europe are perhaps not so easy at the moment. Eventually we all have to find a way to get along in a peaceful manner; therefore I think Europeans and European companies will stay important here in Russia.

How long have you been living in Moscow?

I have been living here since 2007. I visited the Soviet Union for the first time in 1987, when I went on a short tour of the country. I was a student in the State University of Volgograd in 1990/1991 on an exchange programme with the university of Cologne. Then in the mid 1990s, I lived in Moscow because I needed to have access to Russian archives to work on my Ph.D thesis. So I managed to get to know Moscow, and also St. Petersburg quite well. Then I worked in politics in Germany, before coming to work here.

How do you feel personally about Moscow?

Moscow is an interesting and dynamic city, but it is not an easy city in terms of its dimensions and traffic problems. Muscovites as in many major cities are sometimes a little bit rough, but I lived in Berlin before, so I am used to this.

Understanding Why You Should Consider Life Insurance

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Do you need life insurance? Not everyone does. But more often than not, people have never given this question proper consideration. Here are some reasons why you should give it some serious thought.
Life insurance is not necessarily a must for all expats. However, in order to be practical you need to evaluate if there is a real requirement for you as an individual or family. The trick here is to rationalise and think of the practical situation you would leave behind if you unexpectedly died.

Starting with a clean sheet of paper what would you leave behind in terms of personal liabilities or commitments? Perhaps you have mortgages or loans? These are the first obvious obligations which you would not wish to leave as a burden to your loved ones. Paying off any debts comes first as this will be a great help to your family. Your spouse will incur expenses related to your funeral and other arrangements immediately after the event. After this it’s all about replacing your income. He or she will want to maintain a standard of living and that costs money. Making provision for children’s education is also important and the younger they are the more of a burden this will be on your surviving spouse or the guardians of your children should you both die at the same time. Most expats I meet never found the time to organise a children’s education fee plan or even a pension
Before we go on to discuss other possible reasons just spend a few minutes thinking about what your family would really need if they were left without you. Some expats I meet just seem to pluck what appears to be a “grand” figure out of the air and go with it because they feel that sounds enough. If you are one of those think again.

The first question to ask yourself is ‘if you predeceased your spouse what standard of living would you want he/she and any children that you may have to enjoy following your death?’ In Moscow even a local wife and a family are going to have difficulties living on what many believe is adequate. It is impossible to quantify because every person and his or her family has different standards.
So, instead of thinking that a one off payment of $1,000,000 or maybe £500,000 or whatever else you think of is sufficient, try to imagine what it would mean to you as an individual. Perhaps at your standard of living you would need an average of say £60,000 per annum? If you felt that a family could survive on this then calculate a typical example. Let’s assume that growth and inflation are roughly the same. If the family needs to survive at £60,000 per year, for say 20 years that would make the minimum insurance level you need of £1,200,000. Wow, that is a big number and a lot more than you had perhaps imagined. Then if you have a mortgage as well that will add more to the requirement. For the grand figure of £500,000 the family would be left with £25,000 per year. For the majority of families this would be insufficient. This is why you need to assess your own personal situation to get a grip on not whether you need life insurance but at what level.

There are a number of other reasons which add to the requirement and these are generally overlooked or even dismissed as being unimportant. However, they may make the situation much worse if ignored. So here are some major factors to consider:

These are a number of other essential reasons why you need to carefully consider whether you have sufficient life insurance. If you are wise you will have a look at this straight away to ensure you have sufficient provision in place. A review is always a good thing to conduct.

1. Debts

You would need to ensure that any debts you have will be repaid on your death or else you will leave heavy burdens on those you leave behind. Is this really what you want?

2. Family

As discussed above you need to calculate what you would leave behind in terms of commitments. These should be similar to commitments whilst you are alive with your family. Why would they have to reduce their standard of living? Sufficient funds for your children to finish whatever education arrangements you have put in place will be required. Then you need to consider family support for the remainder of the family for as long as may be necessary.

3. Business key person

If you have your own business or are a partner in a business you should consider the cost to the business of an unscheduled departure. The grim reaper does not give notice of visits and will usually strike at the most inappropriate time. The business would thus need financial assistance in continuing and making suitable arrangements after your departure.

4. Shareholder protection

If you are a key member of a company as a shareholder it is no use assuming that upon your untimely demise the other shareholders of the business would buy your shares from your beneficiaries. They may not wish to or may not have the means. Your family will not be able to live on share certificates. It may also be that the other shareholders would not actually wish your beneficiaries to be involved in the running of the business if you died. It is therefore essential that you address this matter with the other shareholders as soon as possible in order that you have a meaningful business succession plan.

5. Business loan protection

Again if you are an integral part of a business and you die when the company has an outstanding loan, the bank or financial institution may call the loan because they see difficulties for the continuation of the business. This would be disastrous for the organisation but if you had sufficient life insurance to cover the loan this could be avoided.

6. Inheritance tax (IHT) planning

Many expats have not planned for IHT. They suddenly realise the burden they will leave and find that the only way to cover the cost is through a life insurance plan which will pay the tax man if they die in an untimely manner. This is sometimes just a temporary requirement whilst more permanent IHT management measures are put in place.

7. Pension death benefit

Whilst employed many expats have a death benefit through their employer. However, once they retire this ceases and can often leave a gap which has not been filled. It is thus important that you review your situation when you are approaching retirement to ensure that you have left adequate provision for any fringe benefits which may cease.

8. Spouse insurance

Sometimes scoffed at this is something to seriously consider. If you are the breadwinner and your spouse suddenly dies you may be faced with increased costs in caring for your children if you are to continue your career. Whilst this would not be the same insurance quantum required for yourself it may nevertheless be an essential if you think about it carefully.

Questions to the author can be directed to PFS International on +7 495 660 8887 or email to brianjohnson@fsplatinum.com

The HR Business in Russia

Selection_510The HR business in Russia has been growing steadily since the early 1990’s. There are a large number of companies on the market, some of the foreign owned. A few such companies have survived and flourished. In this article three HR experts; Walter van Dijk, managing partner at G-NIUS, Nick Rees country director of SThree Plc and Luc Jones a partner at Antal Russia discuss the past, present and future of the HR market in Russia.

How has the market changed over the past 10 years?
Walter van Dijk: “All the big foreign companies are already here, and inside these companies, a lot of higher and middle management positions are now being taken by Russians, which was not how things were in the 1990’s. You see a lot of change going on, particularly amongst people who are looking to be recruited. There is now a huge difference between groups of people who grew up and were working in Soviet times, and those who grew up after the Soviet Union ended. You have the Soviet mind-set and the post-Soviet mind-set. Talking about that, it actually surprised me when I came here, as previously my views about Soviet times were very negative, because that is what I had seen on the news and in films, the queues, empty stores, old buildings and terrible cars. But a lot of young people here, maybe they romanticise things, aren’t negative at all about those days. I do see, however, that people who grew up in those times have a very different approach when it comes to work and attitudes. There was always a boss giving orders, there was always a person saying what needs to be done, whether work or social. People who were active then, lack the ability to be self-responsible now. There are exceptions though.”

Nick Rees: “From a candidate perspective, I don’t think it has changed much. There’s lots of noise about more loyalty being shown as careers are deemed more important, but this isn’t true. A recent survey that we did showed 53% of candidates would move for a 20% or more increase and 42% for a 10% rise. This compares with less than 15% in UK.

“The biggest change has been the amount of professionals hired as Contractors, or outstaffing as it’s also known. The uncertainty in the market makes it hard to forecast future headcount so this really gives our clients a lot of flexibility, as well as offering the incentive of a Permanent position as a reward for great work.”

Luc Jones: “Although the number of experienced Russian candidates has increased tremendously over the past decade, for Russians, the market has continued to grow more quickly than people themselves have been developing and with Russia’s demographic time bomb, there is nevertheless a severe skills shortage in certain areas, such as in quality, pro-active sales professionals.”

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What should foreign companies understand about Russia before they hire people?
Walter van Dijk: “One of the main problems I had working as a manager in Moscow when I arrived was attracting good, or at least suitable personnel, people who can work without being told what to do all the time. There were people who sat there and two months later I realised that they were not suitable, or there were people who would ask me every 5 minutes how to do this and how to find that. When I went out socialising with other foreigners, I found out that they were having the same kind of problems.

“Russia is a huge country. The scale of activities is usually way beyond what European companies at least, are capable of thinking of. I have seen successful Dutch companies coming to Russia. But they are used to working with farmers who own tiny plots of land for farming, who are both very competent technically and fully in control. When they try to do sell to farmers here they did not realise that agricultural managers in Russia run massive holdings which own a lot of assets and employ a lot of people. The Russians are able to delegate responsibilities, because they can’t do everything themselves, so they are looking for motivated people who know how to delegate, and can work with top level people.”

Nick Rees: “Most local employees don’t interview like Western candidates. They won’t sing and dance and try to impress with emotion or desire, even for top sales jobs. Russian employees are far more structured and considerate of ‘false promises’ that are almost expected in the west. Another suggestion is to check references carefully, but not the ones listed on the CVs – we would always use our network to make a few calls and check that what has been promised is truly matches reality.
“From a client perspective, there is still the issue of finding the right people, especially in technical positions. This is where agencies like ours earn our money as we’re technical specialists, not just an average generalist agency like others.”

Luc Jones: “Russians love to tell you how different Russia is, and yes it is, but it’s not that different (particularly companied to markets such as China, or Japan). The important thing to remember is that just because Russians look like us, it doesn’t mean that they behave in the same way. Westerners generally make decisions based on logic, whereas Russians tend to be much more emotional, which strikes foreigners are being rather irrational.

“This is important in the workplace as employees can quit on a whim, or accept a counter-offer even when they have a dream job offer in their hand. In the West, if we informed our boss that we are leaving the company, it’s highly unlikely that he/she would tempt you to stay by offering you more money (assuming that if he/she does, he/she will have a dozen people coming to him/her the following week with the same request), but it is even less likely that someone would accept such an offer.”

Is the market still growing?
Walter van Dijk: “I see that it is still growing, we get more work than I used to. But I get signals that soon the market will be receding because there is something big going on. I get the idea that retail is not doing very well at the moment. We in the HR business will really know that something bad is going on when it becomes easier to get good candidates, but it is still quite difficult. People are still being offered twice the salary they were offered by one company to work in another. I don’t think the economy is exactly bubbling, but it is not slumping either.”

Nick Rees: “Certain markets are and certain markets aren’t. We specialise in Oil & Gas technical recruitment and this market is simply booming, despite some of the issues that are well documented in the media.”

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Real Estate News

JLL voted Best Consultant

JLL, a professional services and investment management firm offering specialized real estate services across the globe, has been named best overall real estate consultant in Russia in the 10th annual global Real State Survey by the international finance magazine Euromoney.

The Euromoney magazine’s 10th annual Real Estate Survey canvassed the opinions of real estate advisors, developers, investment managers, corporate end-users and banks worldwide. According to the survey’ results, JLL has been voted the best consultant in Great Britain, Turkey, Russia and other European countries. JLL also has been named the best consultancy in CEE.

Charles Boudet, Managing Director, JLL, Russia & CIS, commented: “It is a great honor for JLL to be recognized as the leading real estate agency in Russia. This award is a true recognition of our teamwork, and I would like to thank the professional community for their votes. The Russian market today is uncertain. Nevertheless we, in JLL see this period as time to mobilize and search for new out-of-the-box solutions enabling our clients to keep showing outstanding results in the real estate arena.”

The first World Cup 2018 stadium is assessed in Russia

The international company JLL completed the BREEAM assessment process of the stadium for 45,000 seats in Samara which will host World Cup games in 2018. The building received a high rating of Good (47%) that is a very prominent result for a large scale project with total area of 153,200 sq m. The scheme’s general planner is GUP SO TerrNIIGrazhdanproekt; designer – PI Arena.
Ksenia Agapova, Head of Sustainability services at JLL, Russia & CIS, commented: “In terms of voluntary assessment schemes stadia are unique projects. They are very different from commercial buildings with routine operation regimes. Therefore stadia engineering systems have specific requirements concerning peak and minimum loads which influence projects’ ecological efficiency. Due to its difficulty and complexity the first Russian stadium assessment represents a significant breakthrough in local green development. We hope that the result which our project team managed to achieve will be successfully implemented by the contractor and other project’s participants.”

Wella International Studio will open in Wall Street BC in Moscow

Wella International Studio will open its doors in Wall Street Class A business centre in Moscow in spring 2015. The scheme’s developer is AVGUR ESTATE within the Masshtab Group of Companies. The leasing deal is closed by the global consultant JLL.

The studio will hold special educating programs in terms of corporate professional service for stylists, receptionists and studios’ directors dealing with Wella branded portfolio.

The new Wella International Studio in Wall Street will be created in accordance with two other studios operating in London and New York. It will occupy a leasing area on the 2nd floor where they will arrange equipped educating classes, a special podium made for model demonstrations as well as support premises.
Real Estate

 

Moscow Construction and Fit Out Awards 2014

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The following winners were announced at the MCFO awards on the 20th of November at GUM:

Projects up to 1000 sq. meters:

Moscow Google Office Architects: OFFCON
Engineers: IDA
Constructor: ISG
Consultant: Mott MacDonald

Projects from 1000-5000 sq. meters: Baker&McKenzie offices
Architects: AM Sergey Estrin
Engineers: Engex
Constructor: Intercom Group

Projects over 5,000 sq. meters: Head offices of the Kaspersky Laboratory
Architects: ABD architects
Engineers: RBTT Consultants
Conbstructor: Gint-M
Consultant: Cushman & Wakefield

MCFO Professional of the Year Dennis Lobanov (OFFICE PROJECT)

We thank the Jury, sponsors and members on the short list!
http://www.mcfo-awards.com/news

Tim Millard – Russia At The Crossroads?

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There is not a great deal of good news to be found at the moment and even my (forced) optimism is starting to evaporate under the harsh midday sun of economic and geopolitical reality. Even if the fundamentals for the commercial property market remain sound, at a certain point they become irrelevant and it is all about sentiment – that is very negative at the moment and may not be easy to turn around.

I sense that we are at something of a crossroads. The current course should (I hope) look very different to the Russian authorities in light of Brent at $82 / barrel, rising inflation, declining consumption and stagnating investment. No doubt the first of these is the biggest concern. Although Russia seems endowed with plentiful rainy day resources, a sustained period of oil prices below $90 per barrel will quickly have an effect (and that is seeming the more likely scenario). The changes felt in the medium term will be the most pernicious. A lower oil price and the indirect and direct effects of sanctions (negative sentiment, availability of debt, investment in future oil capacity) will negatively impact future production of oil and gas at a time when existing fields are maturing. This could combine with a diversification of supply in Western Europe due to the perceived unreliability of Russia as an energy partner. In such a scenario Russia’s economy would be severely weakened, as it has not followed through on the reform agenda, which was advanced as part of the response to the global financial crisis. The country remains, therefore, overly reliant, some would say dangerously so, on oil and gas revenues.

Vision and strategic thinking is required in order to avoid this most negative of scenarios but decisions made in the next few weeks and months could determine the course of the Russian economy for the next decade or more. My assumption is twofold. Firstly that this fact is appreciated; and secondly that the long-term health of the Russian economy is considered important and not a distant second to the country’s perceived might (and this is mostly an internal perception). Hence my belief that there will be a softening of the brinkmanship and a return of Russia to its more natural economic path*. If, as and when that occurs then we will be looking back at the next 6 to 12 months as having been the golden time to have invested in Russia!

Russia’s strength is her unity of purpose, her political will and the lack of a need to build consensus. That gives her a considerable edge particularly vis-à-vis the EU. However her dependence on the oil price, lack of an diversified economy and apparent lack of a longer term plan can quickly trump that strength. Russia seemingly loves zero sum games and should therefore consider this – when oil is above $100 per barrel (under current budgetary circumstances) she can win just about any game she chooses to play. When the price is below $90 per barrel that calculation very quickly reverses.
That is an uncomfortable position to be in and really ought to be sufficient reason to reform the economy – if for no other fact than this: the uncomfortable truth is that as things stand Russia’s strength is dependent on a factor almost completely outside of her control.