From East to West – Crossing the Siberian Heartland (Sunday Star Times)

Tim McCready

The day I arrived in Vladivostok, I was taken to an open day held by the Russian military. As they searched the bags of visitors at the entrance, my friend Igor warned me to not raise unnecessary suspicion by speaking to the soldiers.

I watched hundreds of Russians run the gauntlet through mud and a series of extreme obstacles – presumably designed to showcase the fun that can be had in the military (but resulting in multiple broken bones), and was then let loose with all kinds of guns, artillery, grenade launchers, tanks, and surface-to-air missiles. It was a rapid immersion into Russia, and I suddenly felt a world away from life in Auckland.

Kiwis are known to have a sense of adventure, but I’d been looking for something that would take me far from the typical tourist destinations, and truly challenge my comfort zone. So when Igor suggested a five week road trip over the summer across the largest country in the world – from Vladivostok to St Petersburg – I was game.

In the Russian Far East, near the borders of North Korea and China, Vladivostok is only one hour from Tokyo or two hours from Seoul, with a time zone just two hours behind New Zealand.

The city was closed to the outside world between World War II and 1992, and it remains the home of the Russian Navy’s Pacific Fleet. It is often compared to San Francisco because of the ornate buildings that line its steep streets, and the striking hills that offer sweeping views over the city, the harbour, and the Pacific Ocean. Putin recently invested US$20 billion to upgrade the city, which included construction of the world’s longest cable-stayed bridge, an opera house, and an aquarium.

I was invited by Igor’s parents to their rural dacha. They live in the small two-level brick house an hour out of Vladivostok over the summer, surrounded by shrubs laden with berries, fruit trees, and a vegetable garden stretching out in all directions.

The ongoing Russian sanctions have caused meat and fish prices to increase, and some foods are just not available.

The most noticeable was cheese – traditionally sourced European varieties have been replaced with Russian equivalents that could be generously described as bland. But despite that, summertime in Russia has no shortage of delicious food.
Highlights of the dacha banquet were okroshka (cold sour cream-based soup) and Russian barbecue – chunks of marinated pork cooked on metal skewers over hot coals. Both are extremely popular in summer.

We left the relative comfort of Vladivostok and set off for our destination some 14,000 kilometres away. Igor, Darren (another Kiwi), and I took turns behind the wheel.

While one of us slept in the back, one drove, and the other kept an eye out for hazards – we needed all the help we could get. On the road we saw it all. Pristine highways suddenly became consumed with potholes. Roads decayed into rubble – or disappeared into mud. More often than not we would be met with hundreds of kilometres of roadworks.

We attempted a shortcut only once. We’d gone too far along a perilous 70km path (unknown by our GPS) to turn back. Just as our fuel was running precariously low, we arrived at a river and a questionable floating bridge with an outrageously high toll to get across. We gladly paid it.

I underestimated the amount of driving we would do until the day we needed to cover 1600 kilometres in a single day. We had no choice – that was the distance between the neighbouring cities Blagoveshchensk and Chita.

Between them was nothing but (very infrequent) gas stations. No cafes, no shops, no villages. It took 18 hours, and with an outside temperature above 35 degrees, we found ourselves driving through Siberian forest fires for most of the journey.

Of the total 14,000km we covered, we passed through seven time zones, 27 cities and towns, and seemingly hundreds of villages. Equivalent to driving from Auckland to Wellington over 21 times. Or from Auckland to New York City.

Before the trip I assumed Russia was roughly homogeneous, but I soon discovered that once you look past the Soviet-era buildings, Russian cities and villages have their own unique history, sights, culture, and people.

We closely followed the trans-Siberian railway route that skirts the borders of China, Mongolia, and Kazakhstan. But along the way, we explored:

Close to Mongolia, the city feels distinctly Asian. It is home to an enormous bronze head of Vladimir Lenin, which at 42 tonnes is the largest in the world, and casts intimidating shadows across the city square.

Ulan-Ude’s population is made up of a relatively large number of Buryats – an indigenous group descended from Siberian and Mongolian people. In stark contrast to the imposing Lenin head, we were given a warm welcome and assistance everywhere we went from the locals.

Driving out of the city, we were pulled over for speeding.

I was nervous as the policeman approached the car, but the officer was more interested in chatting to Igor about our journey and asking about our Toyota Prius – he had been looking to buy one. Russia was full of surprises.

Lake Baikal
The largest, oldest, deepest freshwater lake in the world, containing 20 per cent of the world’s fresh water. It’s also an extremely popular summer destination – Russia’s Coromandel. The plan had been to take a short car ferry trip to an island in the lake, but we were confronted with a 25-hour long queue. It wasn’t going to happen.

Instead, we found accommodation in a lakefront yurt. With three very comfortable beds and a central fireplace, I fell asleep to the sound of waves lapping the shore, and had one of my best sleeps in Russia. Our change in plans gave us time to spare, and after days on the road, the water was irresistible.

Deep within the Siberian forest, I felt honoured to be invited to stay with Igor’s aunt and uncle in a remote village – they hadn’t had any foreign visitors before.

Although they knew only one word in English (pencil, bizarrely), they welcomed us with open arms, piling far more food and homemade vodka onto their small kitchen table than it was ever made to hold, and offered us their beds. I immediately felt like family.

Before leaving their home, we were herded together to sit down for a minute in silence – a Russian custom before a long journey that helps to collect your thoughts and ensure you remember anything you may have forgotten before you set off.
It is a habit that has stuck with me, and worked in my favour several times.

Aside from St Petersburg, (arguably the most beautiful city in the world), Tobolsk really stood out. The historic capital of Siberia has an impeccably maintained stone Kremlin, perfectly manicured grassed squares, and streets and footpaths completely free of potholes and rubble. This was noteworthy because it was such a rare sight. It felt as though we had stumbled upon Disneyland.

Next to a riverbank on the Ural plains stands a giant computer keyboard monument. Rumour has it if you jump out a wish on the oversized keys, it will come true.

The city had a bizarre collection of monuments and statues, including immortalisations of Michael Jackson, The Beatles and, for no obvious reason, one of a giant credit card.

By the end of our journey I came to realise that monuments are especially important in Russia. My favourite was a huge lab rat in Novosibirsk. The giant rodent stands knitting a DNA double helix, and is dedicated to all animals that have had their lives sacrificed to advance science.

Perhaps most fascinating of all was the Fallen Monument Park in Moscow, which houses those statues that were hauled there after the collapse of the Soviet Union. The park was full of decrepit marble heads, and Lenins in various states of disrepair.

As Asia gives way to Europe, the “third capital of Russia” has a noticeable blend of Muslim and Christian architecture.
The Kazan Kremlin, once a Tatar fortress and now a UNESCO heritage site, contains a cathedral and vibrantly colourful mosque side-by-side.

Kazan is well set up for tourists with a variety of restaurants. Russian staples like blini (pancakes), borscht (beetroot soup), and pelmeni (dumplings), are a common feature on menus across the country. Even so, locals would often order pizza, or Russian-style sushi (which usually contained cream cheese or mayonnaise, served warm with a topping of melted mozzarella).

Some places were memorable for all the wrong reasons.

Not everything in Russia was impressive, and even when I ignored the graffiti and piles of rubbish, it was difficult to see past the decrepit Soviet architecture of this industrial city. The less said the better.

This was the furthest south we travelled in Western Russia, and without a doubt it provided the most spectacular sight of the trip.

The Motherland Calls statue stands atop a hill with 200 steps to the base – each step representing a day of World War II’s Battle of Stalingrad.

At twice the height of the Statue of Liberty (excluding the pedestal) the Motherland Calls is the world’s tallest statue of a woman, and is considered a remarkable feat of engineering due to her characteristic posture – a sword raised high in her right hand, her left arm extended in a summoning gesture, and her mouth screaming triumphantly. It truly dominates the skyline, and yet it’s another Russian landmark most people have never heard of.

We visited the statue during the day, but were drawn back in the evening to watch as her profile was lit up under the setting sun.

It is probably the most magnificent sight I have ever seen. It was also one of Igor’s highlights.

Russians don’t tend to travel far from their own city – Igor told us that without having a couple of Kiwis to travel with, he wasn’t sure he would have ever found the opportunity to visit the historic city he was taught so much about in school.

Moscow and St Petersburg
Without a doubt, Russia’s largest cities are the jewels in its crown, with an unmistakable presence of grandeur laced with authority.

The familiar tourist sights are more beautiful and majestic than I imagined, but by the time we reached them I realised the privilege of spending weeks visiting sights and attractions devoid of tourists. Suddenly having to queue among hundreds to view Lenin’s body and the Hermitage didn’t feel right.

If you are short on time, the Golden Ring (a ring of historic cities including Yaroslavl and Vladimir) is just outside Moscow, and offers an easily accessible taste of the Russian heartland, and a welcome escape from tourists.

On reflection, travelling without a Russian would have made the journey infinitely more challenging. Even with Igor, it seemed as though everything – no matter how trivial – could rapidly become a headache. More often than not, when we needed fuel the gas station had either run out, wasn’t accepting credit cards, was out of order, or was closed.

We tried to stay in apartments rather than hotels. They were generally more spacious, cleaner, cheaper, and gave us access to laundry and a kitchen. Booking accommodation on the fly worked well, until we discovered the apartment had been double booked, destroyed by the previous occupants, or was missing beds. We frequently found ourselves scrambling to find alternate accommodation, and stung with late night check-in fees.

Driving an average of 10 hours a day meant we needed a lot of fuel – sometimes up to four top-ups along a single drive. But thanks to the weak rouble, after we sold our car the total cost per person for five weeks on the road was $2200– including accommodation, food, entertainment, $225 worth of fuel, and one police fine ($12).

We reached the end of our journey unscathed – miraculously the only damage our 2011 Prius suffered was a dislodged mudguard.

Igor threw down one final challenge before leaving Russia – to take the lead and show him around Moscow. Thankfully we’d picked up enough Russian and Cyrillic to easily navigate the city, and one of the world’s busiest and most extensive metro systems with virtually no English signage. We passed the test.

Veni, vidi, vici.

Asia New Zealand: Myanmar Matters

Leadership Network member Tim McCready discusses being part of an Asia New Zealand Foundation delegation that travelled to Myanmar in September to learn about the rapidly changing Southeast Asian country and explore business opportunities.

The ‘Myanmar Matters’ trip was part of the Foundation’s ASEAN Young Business Leaders Initiative (YBLI), which builds networks between entrepreneurs and business leaders in Southeast Asia and New Zealand.

“Things are moving quickly in Myanmar,” says His Excellence Steve Marshall, New Zealand’s ambassador to Myanmar. “For some, not quickly enough, and for others too quickly.”

Marshall didn’t follow the traditional MFAT route to an ambassador position, but instead spent eight years heading the International Labour Organisation’s Myanmar office. As a result, he was able to offer the delegation of business leaders and entrepreneurs from Myanmar and New Zealand profound insights into the country.

Myanmar is part of ASEAN and the country has huge potential within the global economy. But more importantly, says Marshall, Myanmar matters because it is a country made up of over fifty million people, each deserving the opportunity to live their life without constant fear, and with the income, affordable education, and healthcare required to improve their situation.

“Myanmar has experienced decades of repression, with citizens living in a nation that essentially ran on fear.

“There are ethnic groups in the country voicing what they need and what they want, which will be important to build a unified and peaceful Myanmar.”

The country is going through a major transition. From over sixty years of military rule, to some form of democratic governance; years of fighting to – hopefully – some peace; and severe poverty to a time of inclusive growth.

“The military still plays a major role in the country in terms of control of the economy, and they will continue to have a big impact on the environmental and social fabric of the country – but the country has shifted from an arrogant government, to one that listens and is responsive to new ideas,” Marshall says.

Marshall reiterated that business can – and should – assist the government in making changes. While business must achieve a return on investment, to be truly successful they should also contribute to the environment in which they operate. “We shouldn’t hide until the government puts standards in place – we should be proactive,” he says.

Debbie Aung Din Taylor was born in Myanmar but her family left when the military took over. She grew up in Thailand, Nepal, Italy and the West Indies, before studying and working in the United States.

Taylor returned to Myanmar in 1994 and co-founded Proximity Design – a non-profit social enterprise that produces and sells clever agritech devices, and offers financial and farm advisory services.

The Myanmar Matters delegates visited Proximity Design’s factory in Yangon’s industrial zone and saw how it is providing a path out of poverty for rural families. Taylor agrees with Marshall that it is important for business to lead the charge as the country changes.

“Farming needs to be lucrative to attract young people, and it needs to have less drudgery,” Taylor explains.

“If you give things away for free, then you have no appreciation of whether something is valued or even used. It’s also difficult to distribute things fairly. You have to be able to scale, and run like a business.”

Taylor vehemently disagrees with the statement frequently made that Myanmar is ‘the new Vietnam’.

“It is not a new Vietnam,” she says. “Vietnam has a socialist foundation of healthcare and education that Myanmar doesn’t have.

“Myanmar is starting from feudalism – it’s pretty severe. We’re in a deep hole and don’t even have the basics to get the economy going yet.”

Thuta Aung, managing director of business consulting firm Hamsahub – a YBLI delegate and one of Myanmar’s strongest advocates for social entrepreneurship – argues that despite the challenges, there are exciting opportunities emerging in Myanmar.

“Myanmar is a country in transition. But it needs to be fixed further,” says Aung. “Myanmar’s transition brings with it significant opportunities.”

Myanmar’s place in the world – sandwiched between India and China, Bangladesh and Thailand provides connections that can be taken advantage of.

“Myanmar can be a useful partner to access neighbouring markets”, says Aung – “Myanmar can be an ideal launch pad for entering China.”

As the country is rapidly pushed into the 21st century, the people of Myanmar talk about ‘leapfrogging’. The Burmese didn’t grow up with computers, and had never used the internet. Just a few years ago mobile phone sim cards cost around NZ$2,500 each.

Upon arrival at Yangon airport, I picked up a sim card with 1GB of data for NZ$6. Now the country has one of the fastest growing mobile markets – more than 45 percent of the population uses mobile phones, bringing with it significant opportunity.

Although ranked the 167th country in the world for ease of doing business by the World Bank this year – ten places higher than last year – Myanmar still has a way to go in terms of enforcing contracts, facilitating trade across borders, protecting investors, construction standards. The list goes on.

Infrastructure: ICBC on lookout for projects (NZ Herald)

Tim McCready

It has been almost three years since the Industrial and Commercial Bank of China, the world’s largest bank by total assets, officially opened its New Zealand subsidiary in Auckland.

Karen Hou, executive director and CEO of ICBC New Zealand, says: “In the past three years, ICBC has worked hard to integrate into New Zealand. The ICBC head office is pleased with how our local customer and asset base in New Zealand is growing.”

ICBC NZ invests across a broad range of industry sectors. For example, ICBC NZ and its parent bank have provided significant financing support to the banking syndication for the 27km Transmission Gully motorway from MacKays to Linden and joined a funding facility for a telecommunications company. ICBC NZ is also investing heavily in another significant infrastructure project.

The local subsidiary recently received a further NZ$84 million in capital from its parent company to support its lending growth with infrastructure lending one of the key objectives. Hou says ICBC NZ is now looking across the country to identify the next projects to invest in.

Signalling head office’s vision and support for this region, ICBC’s new global chairman and executive director, Yi Huiman, who took over the role in June this year, came to New Zealand as part of his first international trip. While here, he met with government officials to discuss New Zealand’s infrastructure investment needs.

Yi’s visit followed the announcement of the joint plan between the Government and Auckland Council for Auckland’s transport priorities over the next 30 years, including motorway upgrades, new busways and upgrades to the rail network.

Outside of Auckland, big projects include Wellington’s Transmission Gully Motorway, Tauranga’s Northern Link road and several key pieces of infrastructure in the Christchurch rebuild.

Hou says that the clear strategy outlined by the New Zealand Government and Auckland Council on future infrastructure programmes is one of the reasons ICBC sees New Zealand as a priority.

“Yi’s visit demonstrated how important New Zealand is for our global business,” she says.

ICBC NZ considers itself a bridge that can encourage bilateral trade and economic co-operation. The bank’s experience with infrastructure projects across many countries means that it has the ability to add value beyond funding.

“We also bring experience and expertise across a range of infrastructure classes, such as bridges, railways, motorways, schools, power and water.

“There are very big Chinese companies, operating at very high international standards, that are increasingly interested in investment opportunities in the New Zealand market. Many of them are already ICBC’s customers in China.

“Helping to build a good relationship between the two countries provides great opportunities for ICBC NZ. We can help investors understand the market and how to be successful here,” Hou says.

Hou’s personal vision for Auckland is one where the city is well connected to other regional hubs, pointing to China’s strength in high-speed rail as an opportunity that could be leveraged here.

China leads the world in high-speed rail technology, with over 20,000km of tracks in service – a length that is more than the rest of the world’s high-speed railway tracks combined.

Earlier this year, the Chinese Government’s National Development & Reform Commission released their medium and long-term plan for China’s railways. The plan calls for expansion of the high-speed railway network by 2025 to 38,000km of passenger-dedicated lines. The volume of work means China is driving innovation in infrastructure development globally.

“Auckland is becoming increasingly concentrated, bringing with it a rapid growth in house prices and significant traffic congestion,” says Hou.

“Suppose there was a high-speed train between Auckland and Hamilton. A 30-minute commute between the two cities would encourage people to spread to the regions, and reduce the pressures Auckland currently faces. Working with China gives access not only to capital but access to innovation and experience in such projects.”

This has already happened in China. The Beijing Tianjin Intercity Railway is a passenger-only high-speed rail that runs 117km between Beijing and Tianjin – a comparable distance to Auckland and Hamilton. The line carries high-speed trains operating at up to 330km/h, bringing the travel time between the cities down from over an hour to just 30 minutes.

This route has proven so popular that it is already operating at capacity, and construction of a second line is under way.

John Dalzell, independent director at ICBC NZ and managing director of Silk Road Management Ltd, says that there are other Chinese SOEs looking to invest in New Zealand projects.

But while this interest offers much needed investment to supplement local capital, Dalzell cautions that if New Zealand wants balance sheet support from these enterprises, then it is essential to allow time for that process to occur.

“There is typically a 3-6 month process for Chinese SOEs to get the necessary approvals to bring additional funding and investment across, which can be a challenge as it is often too long for timeframes allowed on procuring New Zealand projects,” he says.

“There is no point saying we’re open for investment and putting a procurement plan out that requires an expression of interest within one or two months if we are looking to attract firms with this type of financial capacity to our projects.”

Hou reiterates the importance of New Zealand as a partner to China. “The interconnectivity of “One Belt and One Road” and the Asia-Pacific means that ICBC is likely to further increase financial support for the New Zealand market.

“New Zealand is one end of an important economic corridor, stretching from the South Pacific through Southeast Asia and into Europe.”