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Reference ID Created Released Classification Origin
07MOSCOW1676 2007-04-12 16:43 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

DE RUEHMO #1676/01 1021643
P 121643Z APR 07

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 001676 
E.O. 12958: DECL: 04/11/2017 
REF: A. MOSCOW 1241 
     B. MOSCOW 933 
     C. MOSCOW 551 
     D. 06 MOSCOW 11278 
     E. 06 MOSCOW 9563 
     F. 06 MOSCOW 6692 
     G. 06 MOSCOW 6355 
     H. 06 MOSCOW 4823 
     I. 06 MOSCOW 4075 
Classified By: EST Counselor Daniel O'Grady.  Reasons: 1.4 (b,d,e) 
1. (C) SUMMARY: To assess the changing science climate in 
Russia and funding implications (especially for institutes 
employing former weapons experts), ISN/CTR's Jefferson 
Science Fellow recently visited several scientific institutes 
in the Moscow area and met with government officials and 
representatives of the Russian Academy of Sciences (RAS) and 
the Academy of Medical Sciences (RAMS).  Many institutes 
already are beginning to feel the effects of greater state 
control, through forced reorganizations and mergers with 
other institutes; restrictions on outside sources of funding 
and extended work abroad; and government orders to focus on 
certain research areas.  Scientists still complain about 
meager salaries compared to the cost of living, and are 
frustrated at the limited tax-free avenues for obtaining 
foreign grants.  We suspect some of the grousing is a natural 
reaction to the pruning of "dead wood" that the Academies' 
institutes must undergo to become more competitive.  END 
Location, Location, Location 
2. (C) GOR efforts are already underway at some institutes to 
assert control over RAS land holdings and convert them to 
commercial uses (Refs D, E).  The Engelhardt Institute of 
Molecular Biology in Moscow was recently informed by the GOR 
that they are to be merged with the Institute for Gene 
Biology, one block away.  As a result, they were told they 
must give up laboratory space to accommodate the incoming 
scientists and their equipment.  (NOTE: The institute is 
being torn down by the GOR to erect a new high-rise office 
building. END NOTE)  Rather than welcoming their unfortunate 
colleagues with open arms, the Engelhardt scientists openly 
displayed anger and resentment, since laboratory space and 
resources were in many cases already strained. 
3. (C) Several key institutes under the direction of the 
Ministry of Health and Social Development (MOHSD) recently 
received hefty funding for renovations and the acquisition of 
large pieces of equipment.  The funds cannot, however, be 
spent on such items as accessories or auxiliary equipment 
necessary to operate the new equipment.  For example, 
computers were acceptable purchases, but not monitors or 
software.  More significantly, biosafety and biosecurity 
equipment was also deemed by MOHSD to be "unnecessary". 
Several scientists reported that a new massive Anti-Plague 
Institute has just been commissioned in Moscow, although 
details as to its actual location are unknown. 
Reversing the Brain Drain 
4. (C) A new order by the GOR has decreed that any scientist 
who remains abroad for more than three or four months for any 
reason will immediately lose his or her permanent institute 
position.  Several newly-minted Ph.D.s interviewed at 
Engelhardt Institute, along with their research advisors, 
were unexpectedly approached by the GOR last month for a 
chance to receive an additional 7,000 rubles per month each. 
They did not apply for this bonus, nor did their institute, 
and it was unclear to them why they were selected or what the 
criteria were, since other recent candidates in the same 
institute were not approached.  In order to receive this 
additional money, however, they were told they must sign a 
statement saying that neither they nor their institute would 
accept ANY money from any other source, foreign or Russian, 
and that they would not go abroad for postdoctoral work. 
MOSCOW 00001676  002 OF 004 
Rightsizing and Rationalizing Science Institutes 
--------------------------------------------- --- 
5. (SBU) All of the RAS institutes have just completed a 
massive analysis of their scientific efforts over the past 
five years.  The assessment, which was ordered by the GOR and 
was due on March 1, will be used to rank the institutes. 
Those institutes deemed to be the "most productive" will 
remain open, while those that are deemed "unproductive" will 
be considered for closure or merger with ano
ther institute. 
The assessment will also determine the amount of operating 
funds allocated to an institute.  The assessments are to be 
reviewed and ranked by a committee appointed by the Ministry 
of Education and Science, although the RAS has demanded that 
specific criteria be established to assure a fair outcome, 
since there will only be three scientists on the panel of 
Can Old Dogs Really Learn New Tricks? 
6. (C) One of the chemistry groups at Engelhardt was recently 
informed by their institute director that they were to put 
aside all other research to concentrate on producing large 
quantities of a compound that had exhibited strong activity 
against avian influenza for an institute associated with 
Urals State University, an institute with which Engelhardt 
collaborated in the past.  The drug is to be aggressively 
marketed, despite having no defined mechanism of action, no 
data about toxicity, and very limited clinical trials. 
Concerns about drug safety were brushed aside, and the 
group's director finally questioned their own role in this 
joint project, since there were no plans for determining the 
drug,s mechanism of action or improving activity -- their 
usual focus.  The response: "There is no more money for this 
type of research.  Just make the compound and be quiet." 
7. (C) Several institutes whose research focuses on 
biological testing, clinical trials, medicinal chemistry, or 
drug design and development, have seen significant funding 
cuts.  The Engelhardt Institute of Molecular Biology, 
Ivanovsky Institute of Virology, Shemyakin-Ovchinnikov 
Institute of Bioorganic Chemistry, Martsinovsky Institute of 
Medical Parasitology and Tropical Medicine, Institute of 
Developmental Biology, and the State Research Institute of 
Organic Chemistry, all reported that institutes that normally 
screen compounds for biological activity have been told there 
is no more money for such work.  The chemistry groups that 
synthesize potential drugs have also been told there is no 
money for biological testing and clinical trials.  Instead, 
MOHSD recently formed a new office to conduct all biological 
testing, but scientists are loath to send samples there, as 
it is to be staffed with non-scientific personnel.  Despite 
this heartburn, they will likely have no alternative, since 
there are only a few expensive private companies that conduct 
this type of work. 
You Do the Math: Salaries and Foreign Grants 
8. (C) Despite steady increases in many salaries, scientists 
stated that paychecks were still too low to match the high 
cost of living, particularly in Moscow.  Many scientists 
reported that they are still owed significant back pay, and 
many institutes received insufficient funding to cover their 
operating costs during the past few years.  Several 
scientists reported that if an institute is closed, the GOR 
would no longer be responsible for arrears owed to either the 
scientists or the institute. 
9. (C) The GOR issued new salary guidelines for scientists 
and institute administrators in November 2006.  Each salary 
must now be calculated using a complicated point system.  The 
factors used to calculate the points are based on twelve 
different categories, including, among other things, the 
number of publications, the ranking of the journals in which 
they are published, whether the journal is Russian or 
international, the citation index of the journal, the number 
MOSCOW 00001676  003 OF 004 
of authors on the paper, the number of domestic and 
internatiaonl conferences attended, the number of invited 
talks, oral or poster presentations, the number of authors on 
those presentations, the number of Ph.D. students trained, or 
if the employee is a graduate student, how old the students 
is and how long the student has been studying towards the 
Ph.D.  The points must reflect only the prior 24 months of 
information, so each salary must be recalculated each month. 
10. (C) Scientists from the State Research Institute of 
Organic Chemistry and Technology stated that they have 
developed a promising anticancer compound, and that a British 
company has expressed interest in marketing the potential 
drug.  MOHSD, however, has told them they cannot sign an 
agreement with the company until they obtain a patent, given 
the current concern over IPR issues.  Before they can apply 
for the patent, however, further clinical trials are 
required.  MOH has cut their funding significantly and as a 
result, they have no money to pursue the clinical testing. 
MOHSD also recently closed the government office that 
reviewed and submitted grant proposals to foreign sources, 
leaving the scientists to guess to whom within the GOR they 
should submit proposals and what agency might provide funds 
for clinical trials or commercialization efforts. 
11. (C) Some institutes, including the Institute for 
Immunological Engineering, TEMPO, and Shemyakin and 
Ovchinnikov Institute, noted that they are leery of applying 
for grants from some foreign sources like the U.S. National 
Institutes of Health (NIH), because of uncertainty about 
whether Russian authorities will tax such grants.  There are 
few well-established tax-free foreign funding mechanisms, 
other than the International Science and Technology Center 
(ISTC) and Civilian Research and Development Foundation 
12. (C) Many Moscow academicians were scornful of GOR 
proposals to establish by the end of 2007 two new large 
regional universities in Rostov-on-Don and Krasnoyarsk, which 
would serve as prototypes for other regional universities. 
Typical was this comment:  "Who will go to such a place?  You 
may convince some students to apply because it is closer to 
their homes, but what will such places attract in terms of 
first class professors?  No one would leave a prestigious 
position in Moscow or St. Petersburg to take up a job in the 
middle of nowhere!" 
Comment: Sour Grapes? 
13. (C) Many institutes and their scientists are clearly 
feeling the effects of the pruning of "dead wood" in the RAS 
and RAMS.  Despite assertions that the GOR has long coveted 
RAS and RAMS real estate holdings and disliked their relative 
independence, the Academies' white-haired septuagenarians 
share some of the blame in failing to focus greater attention 
on priority research and commercialization (Ref D).  While 
the financial situation for Moscow-based researchers may 
prove challenging, scientists in Nizhniy Novgorod and Troitsk 
have told us that current salary levels generally allow 
institute staff to live comfortably, if not lavishly.  We 
suspect at least some of the grousing from scientists 
reflects sour grapes over the unfortunately necessary steps 
these institutes must take to keep from falling further &#x000A
;behind leaner and more business-savvy Russian competitors 
(Refs A, B).  While the GOR continues to demand greater 
commercialization, it has yet to remove some of the most 
significant obstacles obstructing technology transfer, chief 
among them the question of IPR.  Four draft laws that would 
clarify and improve the IPR situation are now in the Duma; 
their enactment would help scientists help themselves.  END 
14. (C) (NOTE: Four fundamental GOR documents on the on-going 
RAS and RAMS changes are available on request from ISN/CTR 
Jefferson Science Fellow Katherine Radtke:  phone: 
202-736-7693, e-mail: RadtkeKL@state.sgov.gov).  They are: 1) 
a list of 32 priority research areas originally proposed for 
funding priorities by RAS; 2) an official list of 12 funding 
MOSCOW 00001676  004 OF 004 
priorities recently announced by MOHSD; 3) a translated 
November 2006 order by the Ministry of Education and Science 
and the MOHSD, dictating a new procedure to "stimulate 
bonuses"; and 4) the translated procedure and point system 
for calculating the bonuses. END NOTE) 


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