Alan Fisher's World

Russian Diary
Part IV

Sunday 14 September
Woken abruptly by a call from the newsdesk. A passenger plane has crashed in the Urals, about 500 miles south-east of Moscow. Eighty-eight people are dead.
     Aeroflot flight 821 was on its final approach to the town of Perm in the early hours of the morning when it disappeared off the radar. Eyewitnesses say the plane was on fire before it hit the ground. Among the dead are seven children including one baby.
     Flying internally in this country is almost like playing Russian roulette. Last year there were 33 crashes which killed 318 people. A recent study found that jets on international routes from here were ageing but on regional airlines it was even worse with planes being on average 30 years old. We find out that three people turned up late for the flight but were refused boarding. There was obvious anger and upset, not realising the decision would save their lives.

Monday 15 September
Every day seems to bring a new outburst in the Russian-Georgia story. Today Nato is meeting in the Georgian capital, Tiblisi. This seems to reassure the government there that it's on track for membership.
     Meanwhile Russia's combative Foreign Minister, Sergei Lavrov, is making a tour of the two areas which sparked the war and are now, in the eyes of Moscow at least, independent states. Neither side is giving ground and the Russians feel strong enough not to be intimidated. President Dmitri Medvedev when speaking to business leaders almost laughed off the threat of sanctions over Georgia essentially saying that whoever tries it will get exactly the same back.
     Lavrov has admitted he used an expletive while talking to Britain's own Foreign Secretary, David Miliband, about the Georgia crisis. Some newspapers are reporting that it was an expletive-filled tirade. I wonder if Gordon Brown enjoyed the idea.

Tuesday 16 September
Over the last few years Russia's economy has been transformed. Foreign investment has flooded in, people have made fortunes and the government here now sits on top of the world's third biggest cash reserves. That's perhaps why developments in the two main stock markets here have shaken everyone.
     The rouble-dominated MICEX dropped so far and so fast that the authorities ordered trading to stop to try to let everyone catch their breath and restore a bit of confidence. It didn't work. The exchange was down 17% by the close of business – its worst one day drop. Its dollar-dominated sister exchange didn't fare much better. So why was it so bad? Well, firstly it became much more expensive to buy dollars because of America's difficulties. People here have secured many loans against shares. When the share prices drop, people get worried and demand their money back. And then there's oil. Russia's oil price is pegged to crude. Over half of stocks traded on the Russia exchanges are energy stock. The price for oil today dropped under $90 a barrel. That was enough to panic people as well.

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