Text: Vladislav Kovalenko

They looked for corruption, but did not find it. They caught the pirates, but they weren't caught. We fought with offshore companies, but did not win. We were waiting for a crisis, but it didn’t come. Olympic stadiums were built, but they were not completed. We will remember 2013 for our intentions – good and not so good.

Probably the only relatively effective project in the past year was the redistribution of spheres of influence between business from the 1990s and business from the state.

The year began with the closing of the deal to acquire the oil company TNK-BP by Rosneft. The change of owners took place without incident. British BP and Russian partners - Mikhail Fridman, German Khan and others - received a very fair $28 billion for the asset. Moreover, Friedman and his partners do not even intend to leave the industry: he founded the L1 Energy fund with a volume of $20 billion, intended for investment in oil companies around the world.

Fridman is an exemplary oligarch. He is not interested in politics and does not enter into confrontation with the country’s leadership. After all, he still has to sell Alfa Bank. Suleiman Kerimov, co-owner of Uralkali, however, also managed to exit his Uralkali without losses. In the summer, a war with quite strong political overtones began between the Russian company and its trading partner Belaruskali. The general director of the Russian company, Vladislav Baumgertner, was arrested by Belarusian law enforcement agencies for causing damage to the state. President of Belarus Alexander Lukashenko promises to return Baumgertner in exchange for $100 million (this amount is the estimated damage). Shareholders of Uralkali (the company is traded on the stock exchange) also suffered - its capitalization has decreased by 35% since the beginning of the conflict. It was a good time to buy, and the disgraced oligarch’s share eventually passed to Mikhail Prokhorov and Dmitry Mazepin for $4.35 billion.

Not a hat for Senka

“My job is to figure out how long the music will play,” says the investment banker in the movie Margin of Risk, starring Kevin Spacey. How long will the music of consumer lending continue to play is an increasingly serious question for the Russian economy. According to Alexey Nazarov, director of the strategic and operational consulting group at KPMG in Russia and the CIS, consumer spending will be the main driving force of the economy in 2014.

While the music is playing with all its might. According to the Central Bank, on October 1, 2013, banks issued loans to Russians worth 9.4 trillion rubles. Since the beginning of the year, this figure has increased by 20%. There is also potential in terms of delays. The share of loans overdue for more than 90 days as of October 1, 2013 was 5.7%. It increased by 0.2 percentage points compared to September, but is still far from reaching the maximum level of 9.1% in the last five years.

But the credit health index, which is calculated by the National Bureau of Credit History (NBKI), looks more alarming. On July 1, 2013, it amounted to 104 points - this is the lowest figure since January 2010.

“The consumer behavior model, formed due to the active growth of lending and a decrease in the savings rate, contains risks of increasing the level of non-repayment of loans and the general debt load of the population,” says Alexey Nazarov. “When saturation is reached, “consumption from the future” at the expense of credit resources will slow down, which will entail stagnation of economic growth.”

However, NBKI itself believes that it is too early to sound the alarm. NBKI Marketing Director Alexey Volkov suggests focusing on the share of “immoderate” borrowers who simultaneously service several loans. This share grew in 2011-2012, but has stabilized since January 2013. As of October 1, 2013, the share of borrowers with more than four existing loans, according to NBKI data, amounted to 2.63%. “At the same time, we must understand that the stabilization of this group was facilitated by the banks’ preventive measures to strengthen risk management,” notes Volkov.

$4.9 billion from the sale of BP's 5.66% stake in Rosneft will be transferred to the budget by the main owner of the company, Rosneftegaz. Initially, Igor Sechin planned to spend this money on new acquisitions

Black mark

“If The Turkish Gambit is removed from public access, please notify Violettke so that it can be quickly restored,” says a forum post on one of the torrents.

Violettke’s concern was added by Federal Law 187, also known as the anti-piracy law, which came into force on August 1 - another significant trend of 2013. Now the copyright holder, having proven in the Moscow City Court the presence of pirated films on the site, has the opportunity to block the entire resource - until the link to the content is removed.

In addition, the copyright holder can hold the information intermediary accountable (to which the law includes social networks, hosting providers and owners of various sites) if he is guilty of posting content, and this time not only films, but also audio recordings and other materials.

The Internet community reacted with hostility to the law: they say the authorities have created another tool to restrict freedom. However, during the three and a half months of the law’s implementation, freedom fighters rarely had reasons to panic. According to Alexandra Khizunova, a lawyer at the Muranov, Chernyakov and Partners bar association, by mid-November 2013, arbitration courts had considered only one case against information intermediaries—Studio Soyuz versus VKontakte. The social network won the case: according to Khizunova, the defendant managed to prove that it was not responsible for the content posted by the user, and also blocked the controversial content, taking, from the court’s point of view, “necessary and sufficient measures.”

Another thing is the fight directly against distributors of illegal content - torrents. They, according to Dmitry Shuvaev, co-founder of the Pirate Pay service for blocking pirated content, account for up to 60% of the traffic of Internet providers. “FZ 187 works like a steamroller,” says Shuvaev. “If illegal content is found on a site, the site is closed entirely and reopens only after the link is removed. But site administrations remove these links quite quickly, and the sites come back to life.”

As of November 18, 2013, the Moscow City Court granted 63 applications for blocking resources and deleting illegally posted content. Not a single resource (almost all - the largest trackers on the Runet like Rutorg.ru) is blocked. Although on sites for which the definitions were made more than a week ago, the content specified in the documents can no longer be found. “When calculating the time periods specified in 187-FZ, it turns out that blocking an Internet site or its corresponding page may take up to 11 days (provided that communication between the court, Roskomnadzor, hosting provider, and telecom operator is carried out without delays),” points out Alexandra Khizunova.

The speed is not very impressive. “Distributors rightly want to get the maximum fees in the first week of distribution,” says Shuvaev. “But if a pirate appears during this period, this money is lost, since the copyright holder cannot work proactively (you cannot ban a link that does not yet exist), and bureaucratic procedures take a long period and do not allow blocking the distribution on the day when the court decision is made.”

How much does the copyright holder lose? Depends on the movie. For example, “Stalingrad” by Fyodor Bondarchuk is unlikely to have suffered much from pirates, Shuvaev believes: the film loses too much if you watch it outside of the cinema (for an interview with the director of “Stalingrad”, see page 49). Another thing is “The Geographer Drank His Globe Away” by Alexander Veledinsky. It was released on November 7, simultaneously in the Ivi and Play online cinemas. A day later, Shuvaev says, a free WebRip copy (recorded when viewed online) of excellent quality appeared on the Internet. As a result, 201 thousand people watched the film in theaters over the first weekend (collections as of November 15 amounted to $2 million). And another 250 thousand people downloaded a pirated copy.

Chin of plane tree

The picture of 2013 would not be complete without the loudest corruption scandal and, at the same time, perhaps the main disappointment of the year - the case of Anatoly Serdyukov. The ex-Minister of Defense lost his position and some assets (including paintings and rare cars), but never received the status of an accused.

His friend, ex-head of the property relations department Evgenia Vasilyeva, was less fortunate. The investigation accuses her and her accomplices (in particular, Ekaterina Smetanova and Dinara Bilyalova) of causing 3 billion rubles in damage to the state.

Serdyukov is back in action. From November 1, he headed the Federal Research Testing Center for Mechanical Engineering, part of the Rostec state corporation.

The year 2013 was marked by several more corruption scandals. One of them even enriched the Russian language with a new word - “pekhting”. It comes from the surname of former United Russia deputy Vladimir Pekhtin, whom oppositionist Alexei Navalny convicted of owning an apartment and a plot of land in the United States worth $1 million. As a result of the scandal, Pekhtin was forced to leave the State Duma, however, like Anatoly Serdyukov, he did not remain idle: he received the position of deputy chairman of the board of RusHydro.

Vitaly Malkin, another victim of Navalny’s revelations, also lost his seat in the Federation Council. Malkin, according to documents published by the oppositionist, owned 111 undeclared real estate properties abroad from 1994 to 2011.

The mayors also got it. In early June, special forces stormed the residence of Makhachkala Mayor Said Amirov, accused of organizing the murder of an investigator. In July, Yaroslavl Mayor Evgeny Urlashov was caught taking a large bribe. Finally, in mid-November, the mayor of Astrakhan, Mikhail Stolyarov, was also arrested on charges of accepting a bribe. However, what are three arrested mayors in more than 1 thousand Russian cities?

RUB 241 billion Vnesheconombank issued a total of loans to companies involved in the construction of Olympic facilities

Midlife crisis

“The losses of Russian venture funds due to the freezing of money in Cypriot bank accounts amounted to $150-200 million,” says the manager of one of the funds. “I personally know investors who lost $50 million in Cyprus. The topic, in general, is a sensitive one.”

It was especially sensitive in the spring, when the Cypriot authorities froze transactions on deposits and current accounts of all local banks. The Cypriot authorities were considering various ways to overcome the crisis. At the moment, restrictions apply only to the Bank of Cyprus (BOC) - depositors will have the opportunity to withdraw up to 100 thousand euros from their accounts, the remaining funds are converted into bank shares, deposits of different periods, and are also reserved in case the measures taken to save the bank are insufficient. The fire has almost been extinguished: the Eurogroup, the ECB and the IMF, the main creditors of Cyprus, have agreed to provide the republic with a 22-year loan worth 10 billion euros with deferred payments for the first ten years. Although the outflow of deposits continues: in September alone it amounted to 900 million euros.

How much has Russian business lost in Cyprus? It’s difficult to estimate, but it’s unlikely to be much. “Cyprus was more like one of the links in the payment chain, an interface for an offshore company, rather than a place for storing money,” notes Alexander Apokin, a leading expert at TsMAKP. “Therefore, not so much was stuck there.”

In the second half of 2013, the Russian government now began to prepare for an economic crisis - and for no apparent reason yet.

Preparation mainly consists of concentrating funds. The government's most scandalous initiative is the seizure of citizens' pension savings, which will be formed in 2014. The government intends to use this amount (RUB 244 billion) to pay off the current Pension Fund deficit. Thus, at the expense of future pensioners, the government plans to get rid of the need to spend budget funds on payments to current pensioners.

In September, Vnesheconombank (VEB) announced the presence in its portfolio of potentially bad (issued on non-market conditions) loans amounting to 400 billion rubles. The government must recapitalize the bank with this amount in 2014-2016. It has not yet been decided where to get the money. Several options are being considered, including, according to the Kommersant newspaper, the National Welfare Fund.

The National Bureau of Credit History (NBKI) index is obtained based on the share of loans overdue by more than 60 days over the past six months in the total number of loans. The lower the index, the worse the population's credit health. NBCH has published indicators twice a year since October 2008. The minimum index value was 100 in July and October 2009.

A considerable part of these “non-market” loans are apparently Olympic loans. The largest Olympic investors - Sberbank President German Gref, Gazprom Chairman Alexey Miller, Basic Element Supervisory Board Chairman Oleg Deripaska and Interros President Vladimir Potanin turned to Deputy Prime Minister Dmitry Kozak back in the spring with a request to restructure the debts, since investors could not service them. For example, Potanin’s Rosa Khutor, out of 68.6 billion rubles invested in the construction of a ski resort, received a VEB loan for 55.7 billion rubles. By the end of the Olympics, when it is time to pay off debts, the accumulated interest on it will amount to 17 billion rubles.

The government, of course, can prepare for a crisis, but, as in the case of the fight against corruption or piracy, not much depends on its actions.

“The main risks of the Russian economy in 2014 are external and reflect Russia’s increased dependence on changes in the global economy,” says Alexey Nazarov from KPMG. “The high dependence of budget revenues and the country’s economy on hydrocarbon prices (about 45% of the budget) keeps the Russian economy vulnerable to external shocks associated with changes in prices for oil and other mineral resources. Thus, as a result of a drop in oil prices to $80 per barrel, GDP could decline to -1% in 2014."

Sergey Anuriev, General Director of liters company:

— Until this year, I had the feeling that the state was more interested in the development of the Internet industry as a whole, often to the detriment of the interests of copyright holders. But over the past year, the state has made a big step in terms of legislative regulation: Federal Law-187, and work on creating courts for intellectual property, etc. In my opinion, this is not so much a fight against piracy, but a step towards creating a civilized market for electronic content.

The Year That Wasn't There