SOURCE: The St. Petersburg Times
DATE: Issue #1029 (95), Tuesday, December 14, 2004
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TITLE: New Year Glum As Prices Soar
PUBLISHER: Staff Writer
TEXT: With New Year just a couple of weeks away, many Russian are looking to the future not with joyful anticipation of holidays or optimism, but with dread of financial instability and rising prices.
"I don't feel excited about the New Year holidays because, as usual, on Jan. 1 prices will shoot up," said Tatyana Rybkina, 42, a teacher.
St. Petersburg residents already have an impending taste of the doom approaching them; long lines have formed at metro stations ever since it was announced that the cost of one ride on public transportation services in St. Petersburg price will rise from 8 rubles (28 cents) to 10 rubles (36 cents) on Jan. 1.
As they did in Soviet times, people not only tried to buy as many tokens as they could to save money, but they also hoarded them because they feared that there might not be any left because others are also hoarding them.
The metro first limited sales to 10 tokens at a time, but this has now been reduced to two tokens, meaning people have to line up every second ride. On Tuesday, a new type a plastic card will be issued in place of tokens.
"It's very hard for me as a pensioner to have prices going up for transportation when from next year we pensioners will no longer be able to ride for free," said Tamara Sokolova, 60, who boosts her pension by working as a librarian. "My income is 3,000 rubles ($107), and now I'll have to pay about 500 rubles a month on public transportation all together."
She doesn't "experience any joy expecting New Year, because nowadays New Year automatically means prices go up," she added.
"It's a modern gift for this holiday from our government - they increase the prices of everything - food, fuel, services, etc," she said.
In Soviet times prices would go down before the New Year holidays, she added.
Food prices have been skyrocketing in recent months, she said.
In early fall, Sokolova could buy 10 eggs for 23 rubles, while the same number costs 32 rubles.
The price of meat in markets has doubled since spring; a kilo of beef or pork cost 100 rubles in May, today it's 200 rubles and more, Sokolova said.
Consumer price inflation is 11.9 percent this year, RIA Novosti reported.
According to the Federal Statistics Service, egg prices rose 12.9 percent in November and 24.3 percent for the year to date.
The service said milk prices rose 6.6 percent and meat prices 1.7 percent in November. Experts say the rising food and transportation prices are related to rising fuel prices.
Valery Nesterov, an oil and gas analyst at Moscow's office of brokerage Troika Dialog, said the prices for oil in Russia doubled between October 2003 and October 2004.
Thus, if at the end of 2003 a liter of A-92 gasoline in St. Petersburg cost 8 or 9 rubles, this month it costs almost 16 rubles. The rise has been so great that it stimulated President Vladimir Putin last week to ask Vagit Alekperov, head of leading oil company LUKoil, to lower prices for oil products on the domestic market.
Putin expressed his hope that if LUKoil did so, other big oil companies would follow suit, which would improve the situation that "one cannot describe as normal."
On Friday, State Duma deputies also expressed their deep concern about fuel prices, saying they were holding back economic development.
Alekperov said LUKoil will lower its domestic wholesale but that it is no less important that oil retailers do the same. Troika Dialog's Nesterov said that although Putin's approach to Alekperov was unusual, it was still a positive moment.
"Such action creates an image that the government is working and cares about the economic situation in the country," Nesterov said in a telephone interview. "However, it's better not to rule by giving such kind of directions, but to do so by a providing well-balanced economy and preventing the influence of monopolies."
Dmitry Belousov, an expert with the Center for Microeconomic Analysis and Short-Term Factors, named several other factors that he linked to rising prices.
Rising grain prices led to higher meat prices because of the fodder feed to livestock. The stabilization of ruble in relation to the dollar led imported goods getting more expensive, there had been fears about banks, and the dollar had depreciated. At the same time prices for communal services had gone up.
The effects of these had hit some sectors of the population harder than others, he said.
"Today prices for the poor grow quicker than for the wealthy," Belousov said. "The prices for household equipment, which are products that mainly interest the well-off are stable. Prices for products such as bread and communal services, which are of bigger demand among the poor, are rising."
Sokolova said that her librarian's wage, which is paid by the state, is supposed to be raised in line with rising costs, but the raises never catch up with runaway prices.
"I feel that I'm catastrophically short of money," she said. "Today I have to think hard about buying meat. Usually, we buy it only by for a festive dinner."
Ordinary Russians not only have to count their kopeks when it comes to buying food, they say they barely have enough money to buy clothes.
"I can't afford to buy good clothes," Sokolova said. "That's why I can't buy good quality winter shoes for 2,500 rubles and I buy lower quality ones for 1,000 rubles. Such shoes wear out very quickly, I mend them, and wear them again."
Nadezhda Chekhovich, 50, a historian who works at one of the city's scientific institutes, said her monthly salary is 1,700 rubles.
"I buy only secondhand clothes," Chekhovich said.
The prices for books and concerts, products that are important to her, have doubled in recent times, she said.
However, not all are down about life, even if it is becoming more expensive.
Pensioner Alexander Vasserman, 60, said he is not depressed about the economic situation despite his low income.
"I'm sure there are always at least two ways out of a difficult situation," he said. "Sometimes there are even more ways out. It means we'll find a way out that will enable us to live no worse."
"For instance, instead of complaining about the metro getting more expensive, I will ride a bicycle because it's healthy and free," he said.
TITLE: Forum Musters 'Constructive Opposition'
PUBLISHER: Staff Writer
TEXT: MOSCOW - More than 1,000 liberal activists, politicians and critics of President Vladimir Putin gathered at a congress in Moscow on Sunday to oppose what they called a rollback of democracy, while elsewhere in the city a nationalist congress called for "constructive opposition" to the Kremlin and about 15,000 supporters of the Moving Together group marched through the streets in support of Putin.
Also Sunday, the 10th anniversary of the Constitution, Putin signed into law a bill scrapping direct elections for governors and said he had "no plans" to change the Constitution.
"Democratic forces have to unite to stop this pseudo-democracy," Grigory Yavlinsky, leader of the liberal Yabloko party, said at the opening of the Civil Congress, called under the slogan, "Russia for Democracy and Against Dictatorship," at the Hotel Kosmos in northeast Moscow.
Yavlinsky was echoed by other critics of Putin, including former Union of Right Forces leader Boris Nemtsov, chess champion Garry Kasparov, independent Duma deputy Vladimir Ryzhkov, former presidential candidate Irina Khakamada, political analyst Georgy Satarov and human rights activists Lyudmila Alexeyeva and Sergei Kovalyov.
Several speakers expressed concern that the Kremlin, which has this year pushed through a series of controversial bills aimed at increasing the authorities' control over elections and the political process, may move to change the Constitution to enable Putin to stay on in power after his second term of office expires in 2008.
"The choice is simple: In a couple of years, we will be left with either this Constitution or these authorities," Kasparov said. "I choose the Constitution."
However, while united in their concerns, the liberals differed dramatically in their plans of action. Satarov and several other speakers called for a more active dialogue with the authorities, while Kasparov demanded that the dialogue with the Kremlin be ended.
This mismatch of positions led to the omission of a joint position on relations with the authorities and on civil disobedience from the declaration adopted by the congress.
"No 'Orange Revolution' is likely to break out here, in Russia," said Nemtsov, referring to the recent massive campaign of public protests in Ukraine over disputed presidential elections there.
The congress also called on the Kremlin to begin negotiations with Chechen rebels and for Amnesty International to declare jailed Yukos executives political prisoners.
The congress set up an Action Committee to coordinate liberal opposition and elected Kasparov to head it.
At a rival congress at the State Baumann University, nationalist Rodina party leader Dmitry Rogozin told about 1,000 party supporters in a speech that opposition to the Kremlin should be constructive, and mixed anti-Western rhetoric with support for increased state control of politics and business.
"We have our own form of democracy that is historically and geopolitically acceptable to the Russian people and different from Western democracy. It implies state control over most important strategic areas of life," Rogozin told the congress, called "In Defense of the Nation and Citizens."
Meanwhile, Putin met with Constitutional Court judges and assured them that he had no intention of changing the Constitution.
Under the bill Putin signed into law Sunday on gubernatorial elections, instead of direct popular elections the president will nominate his candidates to regional legislatures, and will be able to dismiss governors.
In western Moscow, about 15,000 people, mostly members of the Moving Together group affiliated with the pro-Kremlin United Russia party, took to the streets Sunday in support of Putin and the Constitution, under banners that read "United Power, United Country" and "Liberals + Communists = Berezovsky," in a reference to businessman Boris Berezovsky's financial support for opposition groups.
"Red and white, we are all together - for Russia, for the president and for his reforms," a member of the procession told RIA-Novosti.
Staff writer Nabi Abdullaev contributed to this report.
TITLE: Rights Activists March For Peace, Democracy, Justice
PUBLISHER: Staff Writer
TEXT: MOSCOW - About 700 human rights activists marched through central Moscow on Friday evening to commemorate International Human Rights Day, as the Kremlin's human rights ombudsman Vladimir Lukin said the number of rights violations remains high.
Called the March of Free People, protesters from a dozen organizations, including the For Human Rights movement and Memorial, marched from Nikitsky Bulvar to Pushkin Square, where a rally was held.
"The goal of the march is to support a peaceful settlement of the military conflict in Chechnya and to protest against violations of human rights and democracy," the statement, issued by For Human Rights, said.
Meanwhile, the country's human rights situation remains tense and has shown no sign of improvement this year, Lukin, the ombudsman, said Friday.
Lukin's office has received 28,000 complaints from citizens so far this year, many protesting police brutality and other abuses by prosecutors and courts.
One in four allegations relates to "abuses by law enforcement officers, especially police, where unlawful methods of dealing with detainees are widely practiced," Lukin told a news conference.
Other rights activists have decried the authorities' lack of attention to the allegations, citing continuing rights abuses in Chechnya, hazing in the military and police brutality, said Alexander Petrov, deputy director of Human Rights Watch's Moscow office.
"It creates a sad feeling that Russia is slowly but steadily moving backward on ... democracy," he said. "This trend cannot but cause anxiety about the future."
For Human Rights chairman Lev Ponomaryov said that projects such as President Vladimir Putin's bill to create a public chamber show that the authorities are only going through the motions of protecting human rights. Under the bill, the chamber will not carry out oversight over government bodies, but only issue recommendations to officials.
Lukin said that this year the rights of 915 complainants were reinstated following his intervention, while 70 government officials, whose actions led to human rights abuses, were punished.
Lukin sharply criticized changes to the government's migration policy, including a change that lets Ukrainians to stay in Russia for up to three months without registering. Traveling Russians must register within three days.
TITLE: FSB Probes Threat To
Kill City's Governor
PUBLISHER: Staff Writer
TEXT: The Federal Security Service is investigating a death threat made to St. Petersburg Governor Valentina Matviyenko that was posted on the Internet by a nationalist party at the end of July, Fontanka.ru reported Saturday.
The report cited Vladimir Gusev, first deputy head of the St. Petersburg branch of the FSB as its source.
The threat was posted July 30 on a Fontanka.ru forum and attributed to the obscure Party of Liberty. It accused Matviyenko of conducting an "anti-Russian policy and colonizing our city with people of Caucasian and Asian origin," the report said.
The FSB took into account that nationalist group Russian Republic had claimed responsibility for the assassination in June of Nikolai Girenko, an expert on nationalist and extremist issues, by posting its "death sentence" of Girenko on the Internet.
Party of Liberty head Yury Belyayev wrote in a letter posted on the Internet and quoted by Fontanka.ru that "Unlike the so-called Russian Republic, which publicized their 'sentence' after it was carried out, we, to end all doubt about who is behind our actions, will publish the names of enemies of the Russian nationalist movement who have been convicted and sentenced to capital punishment before the sentence is carried out."
The letter seems to acknowledge that by publicizing that an assassination attempt will be made, it will make it less likely to be successful, but that it if is successful it will demonstrate that the group is a force to be reckoned with.
Investigators believe Belyayev has nothing to do with the threat and say have found the alleged author. They say he wrote it from an Internet club next to Moskovsky station, the report said.
A videotape supplied by the FSB and viewable through Fontanka.ru shows a man in the Internet club. The suspect has been identified as Alexander Vtulkin, a self-proclaimed minister of national security for Russian Republic.
The prosecutor's office has initiated a criminal investigation of the death threat and handed over its evidence to the FSB, which was able to identify the suspect after determining when and where the threat was written and checking video records, the report said.
In summer, Russian Republic has placed its threat to kill Girenko on the Internet.
"Girenko N.M., a dedicated and incorrigible enemy of the Russian people, has been convicted and will suffer the maximum penalty, execution," says Conviction No. 1 issued by the nationalists and dated June 12. It was posted in the week after the expert's assassination.
The conviction was signed by Vladimir Popov, who calls himself the supreme leader of the Russian Republic. In an interview given to local media, Popov said the statement was merely a sentence and the organization had no connection to the killing. He was, nevertheless, glad that someone had carried out the sentence, he added.
Girenko, 64, was killed June 19 when he was shot through the door of his apartment as he went to answer the doorbell.
Girenko assisted the city prosecutor's office in several high-profile trials, including that over the 2002 murder of Azeri watermelon vendor Mamed Mamedov. Over the past two years he performed about two dozen studies of neo-Nazi and skinhead organizations for Moscow and St. Petersburg authorities. His work led to several convictions.
"The assassination of Nikolai Girenko is a big loss, not only for scientists, but also for law enforcement," Interfax quoted city prosecutor Sergei Zaitsev as saying Friday.
The prosecutor said he is sure that the case will be solved, but admitted that "the investigation is struggling."
Also on Friday, the lawyers of a group of young nationalists Shults-88, who are being tried for extremism, asked the court to provide additional linguistic and stylistic evidence of the group's public announcements and actions.
The request was linked to challenging expert evidence provided by Girenko in the preliminary stages of the trial that the group's leader Dmitry Bobrov wants to challenge.
TITLE: IN BRIEF
TEXT: Reprieve for Institute
ST. PETERSBURG (SPT) - The Regional Press institute that had been notified by the St. Petersburg Union of Journalist that it should leave premises at 70 Nevsky Prospekt that it rents out from the organization, will stay in the building until the second half of next year, institute management said last week.
The institute was notified last month that it should leave the building by Dec. 5, 2004, but recently got another letter from the union that says it can stay longer.
"We have received a letter that says we can stay for another six months," a representative of the institute said Friday in a telephone interview.
Center on Danger List?
ST. PETERSBURG (SPT) - The historic center of St. Petersburg, already listed as a UNESCO World Heritage site, could soon be put on the List of World Heritage in Danger, NTV quoted Alexei Kovalyov, a member of the Union of Right Forces faction in the Legislative Assembly as saying Friday.
The statement came as a result of a report filed by experts at the Institute for St. Petersburg Studies, which said there is no system to protect architectural monuments in the city, Kovalyov said.
The experts also said that construction in the city center is taking place with no control and violations of the law.
If the conclusions presented by the experts are substantiated, the Legislative Assembly will ask the world community for assistance, the lawmaker said.
Chukotka Mansion
ST. PETERSBURG (SPT) - The Chukotka regional government intends to spend $12.5 million to renovate the former Tenisheva mansion at 6 Angliskaya Naberezhnaya for its representative office, Nevastroika newspaper reported last week.
The house originally built in 1738 was handed over to the Chukotka government in 1999 after Roman Abramovich, the regional governor, allegedly paid City Hall $500,000 for it, the report said.
In 2003, the first phase of the renovation was completed. Internal pipes were replaced, the roof was renovated, all the internal structures were renewed and the interior of the front wall of the building was restored.
The final phase of the renovation is scheduled to be completed by February with offices, sports facilities and a four star-hotel with up to 60 rooms opened in the building.
17 Attacks in 2 Years
ST. PETERSBURG (SPT) - Seventeen race attacks against foreign citizens have been committed in St. Petersburg in the last two years, Interfax reported Friday quoting Sergei Zaitsev, the city prosecutor.
A total of 380 crimes were committed against foreigners, the prosecutor said.
"The majority of crimes against foreigners are robberies, stealing and theft," Interfax cited the prosecutor as saying.
Zaitsev added that foreigners who commit crimes tend to be from the former Soviet republics while foreign victims of crime are usually people who come to St. Petersburg from beyond the borders of the former Soviet Union.
New Theater Stage
ST. PETERSBURG (SPT) - Two investors are considering participating in a project to build a second stage for the city's Alexandrinsky Theater, Interfax reported Friday quoting Northwest Construction management office.
"I have seen two draft projects," Andrei Kruzhilin, head of the Northwest Construction office was quoted as saying. "Each of them proposes building a second stage for the theater in a complex with a three-star hotel."
Kruzhilin did not name the investors, but said there are several other investment projects involving historic sites in the region. They include reconstruction of a museum on Kizhi island, the Museum of the World's Oceans, the Cathedral in Kaliningrad, historical sites on Solovetsky islands and the Museum of Ethnography in St. Petersburg.
If Oranienbaum and Peterhof museums are legally merged, this would be another option for investors, Kruzhilin said.
Entrepreneurs Protest
ST. PETERSBURG (SPT) - Small businesses on Friday took part in a protest organized a liberal political party against a City Hall initiative not to prolong the rental agreements for kiosks at public transport stops, Interfax reported Friday.
"If it is finally decided to shut down the trade pavilions, the Democratic faction of the St. Petersburg Legislative Assembly will appeal to the charter court," Interfax quoted Yabloko spokesman Alexander Shurshev as saying at the protest Friday.
The kiosk owners are ready to go to Moscow to defend their rights, he said.
There are about 1,500 kiosks located at public transport stops, a third of total number of kiosks in the city. They employ more than 9,000 people. All pavilions are scheduled to be shut down in 2005, according to a City Hall plan to prevent terrorism.
54 Journalists Die
MOSCOW (SPT) - About 20 journalists are killed in Russia each year and another 160 are attacked, Interfax quoted Oleg Panfilov, director of Center for Journalism in Extreme Situation, as saying Saturday on Ekho Moskvy.
Panfilov said 2004 appeared to be the most fatal for the media in the last 10 years with 54 journalists killed.
"In average there are 20-22 killings of journalists taking place in Russia every year, most which are criminal assassinations that are not linked to the journalistic activity," he said. "There are 150 to160 attacks in relation to journalists, half of which are linked to journalistic activity."
Paniflov was speaking on the memorial day for journalists killed in the line of duty.
Ferry to Germany
ST. PETERSBURG (SPT) - A new ferry route from Ust-Luga to Kaliningrad and ports in Germany is scheduled to open on Jan. 3, 2006, Interfax reported Friday, quoting the federal agency for sea and river transport.
One of the operators that shown its interest in the project is the Far Eastern Shipping Company. Germany is also ready to join the project that would include usage of railway and auto transport, head of the agency Vyacheslav Ruksha said.
The federal budget will transfer 900 million rubles ($32.1 million) in 2005 to set up the line, Ruksha said, adding that besides this money the budget could also provide additional financing next year.
The line would be a part of the Baltic Ferry project to provide a railway and auto link between Russia and Germany at a total cost of $150 million.
Cross Returned
NOVGOROD (SPT) - A golden cross taken from Novgorod's St. Sophia Cathedral during the World War II was returned by the Spanish government Friday, RIA Novosti reported Friday.
The cross was made in the end of 19th century of copper and covered with gold. In 1942, when Novgorod was captured by the Spanish Blue Division, the cross was taken to Spain, where it was stored in a military academy.
TITLE: Chechnya Tore Apart
Rights Movements
PUBLISHER: Staff Writer
TEXT: MOSCOW - The military conflict in Chechnya has taken a heavy toll on human rights groups and liberal political parties, which were held in high public esteem when the first war started 10 years ago Saturday but have now been relegated to the far sidelines.
Liberal activists have largely lost their voice due to public disappointment in liberal ideas and an effective smear campaign by military and government hawks. But missteps by some leading activists, including their emphasis on the rights of Chechens but silence about the plight of Russian civilians in Chechnya, also contributed by making the human rights movement easy prey for critics.
"Chechnya has contributed greatly to the shrinking of the political playing field in Russia and to the pushing of liberal political parties and the free press to the margins," said Alexander Cherkasov, co-director of Memorial, the country's largest human rights group.
"The moral authority of human rights champions has been undermined because the slogans of liberalism and democracy that the Russian leadership borrowed from them in the early 1990s were discredited by the leadership by the end of the decade," he said.
The accusation that hurt human rights activists the most was that they defended the rights of Chechens but neglected the plight of Russians in de facto independent Chechnya in 1991-94 and 1996-99. Many ethnic Russians were harassed and forcefully evicted from their homes by local gangs.
"Former Soviet dissidents and the first democrats of the early 1990s - the leaders of the human rights movement in Russia - had their white garments smeared by pro-war and anti-Chechen propaganda to such an extent that they were accused of taking money from Dudayev. This was not fair," said Valentin Gefter, head of the Moscow-based Institute of Human Rights.
Gefter conceded that human rights activists did not pay a lot of attention to the rights of ethnic Russians under separatist President Dzhokhar Dudayev, who ran Chechnya from 1991-96.
However, he said, "we defended all peaceful citizens, the vast majority of whom, naturally, were Chechens, and our critique was proportional to the amount of violations by both sides."
Still, the difference in how Russians and Chechens were treated - a difference that was repeatedly highlighted by nationalists - served as a turning point in the public's perception of the objectivity of human rights activists.
Since the former dissident leaders of the human rights movement suffered Soviet repression, they tend to divide the world between "us" and "them," with the "them" being the state, said Alexei Makarkin, a political analyst from the Center for Political Technologies.
"They saw Chechens as a people who had been repressed by the same forces that repressed them, who fought against communism, and who spoke the same language as them," he said, referring to the initial democratic rhetoric of some Chechen separatist leaders like former President Zelimkhan Yandarbiyev, who later introduced strict Islamic law in the republic.
Yury Korgunyuk, an analyst at the Indem think tank, said Chechnya helped cast the spotlight on the seeming double standards of activists, who criticized Russian nationalism but at the same time defended the nationalism of smaller ethnic groups.
Activists thought Chechens had "a legitimate claim for independence and did not notice that this was a direct path to rampant crime," Korgunyuk said.
The human rights movement played a high-profile role in the first, 1994-96 Chechen war. In the early days of the conflict, then-Russian ombudsman Sergei Kovalyov led a group of prominent human rights activists to Grozny to demand from Dudayev's presidential palace that Moscow stop carpet-bombing the city.
Activists facilitated the return of hundreds of federal soldiers taken prisoner by Chechen fighters during the first war.
Kovalyov himself kick-started negotiations with Chechen warlord Shamil Basayev after Basayev seized a hospital with more than 1,500 hostages in the southern town of Budyonnovsk in 1995.
After the crisis ended, Kovalyov outraged many by calling Basayev "a Robin Hood armed with a grenade launcher." He later explained that he considered Robin Hood a bad person.
Activists led by Kovalyov collected the vast bulk of evidence of human rights violations by the military in Chechnya and presented them to the public, contributing greatly to a perception that the first war was dirty.
Seeing that they were losing the fight both on the ground and in public opinion, the military and security forces needed a scapegoat and decided to shift blame onto the outspoken but politically toothless activists, Cherkasov and Makarkin said.
In an emotional outburst in 1995, then-Defense Minister Pavel Grachyov described as "little vermin" all human rights activists and liberal State Duma Deputy Sergei Yushenkov, who had protested military brutality in Chechnya.
Top military brass still feel the same way about activists, retired General Gennady Troshev wrote in a 2002 book. Troshev led one of the second divisions that attacked Chechnya in the first war.
However, it was the start of the second war in 1999 that delivered the biggest blow to the authority of the human rights movement, Makarkin said.
"The first war in Chechnya was not popular, so only groups with vested interests, like the military, criticized the rights people," he said. "But the second war started at a time when most of the public was demanding a crackdown on Chechens, and the voice of the rights people was rejected by almost everyone."
The military campaign, which continues to this day, began about the time that hundreds of people died in apartment bombings in Moscow and other Russian cities. Authorities blamed the attacks on Chechen rebels.
Since then, Chechen extremists have adopted terrorism as a major style of warfare - alienating the Chechen cause for independence among the public and making it difficult for activists to find any sympathy for Chechens whose rights are violated by military and security personnel in Chechnya, Gefter said.
With little backing from the government and the public, the human rights movement seems to be increasingly turning to the West for support - leading to accusations that activists are siding with foreign governments that shame Russia with their criticism of Chechnya and obstruct Moscow's efforts to fight terrorism.
Korgunyuk said the movement is looking to the West to survive. "To continue their work, they need to earn money," he said. "With virtually nobody interested in them here, the only place they have to turn to is the West."
TITLE: Village Answers SOS to Give Kids a Chance
PUBLISHER: Special to The St. Petersburg Times
TEXT: TOMILINO, Moscow Region - Eleven-year-old Kristina has been playing violin for three years. Her eyes follow the notes on the score as she performs the Hunter's Chorus from Weber's opera "Der Freischutz." But her bowing hand is scarred with burns.
"That's from her previous life," said Yelena Dolgopolskaya, the woman whom Kristina calls mother. Kristina, who now has a new mom and six brothers and sisters, lives in Tomilino, an SOS Children's Village 10 kilometers northeast of Moscow.
The village is a small settlement of 14 carmine-colored cottages, flanked by birch and pine trees, and stands next to an almost-completed luxury housing development. The village was a pilot project in Russia for SOS-Kinderdorf International, an Austrian-based nonprofit organization that has been building homes for mistreated kids worldwide since 1949.
The organization started talking to Soviet officials about bringing the charity to Russia in 1988. In 1994, Russia's SOS Children's Villages Committee was formed and the first families moved in Tomilino in May 1996.
Dolgopolskaya, now in her 50s, has been with Tomilino from the very beginning. Fifteen years ago she, then a geologist, read a magazine article about the Austrian villages and tracked down its author, Yelena Bruskova, the founder of the villages in Russia.
She liked the idea so much that she started working as a volunteer, and later "persuaded Yelena Sergeyevna [Brus-kova] to let me become a mom," she said.
Today Dolgopolskaya is a full-time, senior live-in mother who takes care of seven children: four girls and three boys.
With different ages and temperaments, they look like a family, and can even form a small band. Besides Kristina, four other kids play instruments. Maxim, a sixth-grader, plays clarinet. His brother Lyosha, 10, studies flute, and their sisters Lena, 9, and Katya, 13, play piano. Yelena chose a private school for her kids where along with math and literature they study artisan crafts like pottery and basket weaving, as well as religion.
Faith takes a central place in the life of Yelena's family. "Kids pray for their parents who drank and abandoned them," she said. There are icons and calendars with Christian Orthodox holidays in every room of their two-story cottage.
All 70 children at Tomilino have a past they have to come to terms with. Some, like Maxim, never knew their biological parents and spent their first years in a state orphanage. Others, like Kristina, were physically abused. Kristina came to Tomilino "from a hospital where she had spent a year recovering" from burns and illnesses she contracted while in the care of her biological mother, an alcoholic, and her mother's drinking companions, Dolgopolskaya said.
Sucking on candies and roaming around in the yard, the children look happy today. The candies, along with other goodies, are a gift from a German television crew who came to make a movie about the village for the charity's Western donors. The bulk of the funding comes from SOS-Kinderdorf International, said the village's director, Leonid Mityayev.
"Our annual budget is $300,000. Seventy percent of that comes from the Austrian organization, 25 percent from the Moscow government, and we ourselves raise 5 percent," he said.
In Russia, the organization runs four children's villages: at Tomilino, at Lavrovo in the Oryol region, at Kandalaksha in the Far North, and near St. Petersburg.
The cornerstone of the charity's fifth village in Russia was laid in Moscow this fall. "The cost of the project is estimated at about $300 million," said Yury Chudovsky, the program's director, of the new village's construction.
The charity has been working hard to secure financial help. Two banks have already pledged their support to cover some of the construction costs.
But the concept of fundraising is taking time to percolate, Bruskova said.
"It was forbidden to raise money in the Soviet Union," she said. In dictionaries, "the word charity used to be marked as 'obsolete.'"
The villages also rely on individual donors, described as "friends," who give small but regular contributions to the cause. There are 1,500 Friends of Children's Villages around the country, who are mostly people of very modest means or pensioners. In October, the committee also launched its Christmas Cards drive, the proceeds from which will go to help SOS children and teenagers.
There are plans to build two more villages and launch programs aimed at preventing disadvantaged families from abandoning their kids in the first place. "We ... contribute with a care model, share our experience and try to motivate others to take action," said Tom Malvet, SOS-Kinderdorf International's regional director.
But "after all, no nation really wants foreign organizations to take care for their own children," he said.
For more information about SOS Children's Villages Christmas cards or about becoming a Friend of SOS Children's Villages in Russia, call 718-9918 or write: pr-sos@redline.ru.
TITLE: Journalist Kolesnikov
Tells His Tales of Putin
PUBLISHER: Staff Writer
TEXT: MOSCOW - After President Vladimir Putin invited a Le Monde reporter to come to Moscow and be circumcised, a Kremlin press officer told the Russian press corps to ignore the remark, Andrei Kolesnikov, Kommersant's Kremlin pool reporter, said Wednesday.
Fearful that the Kremlin might follow this up by calling newspaper editors, Kolesnikov said he scrambled to contact his editor, Andrei Vasilyev, and asked him to hide in a bathroom to avoid taking the call.
Kolesnikov recalled the incident, from November 2002, when presenting his new two-volume collection of stories - "I Saw Putin" and "Putin Saw Me" - covering everything he wrote about Putin between his two inaugurations in 2000 and 2004.
Vasilyev, now the newspaper's general director, said Wednesday that no one from the Kremlin called him that night. But while Kommersant and NTV carried Putin's remark in full, it was edited out of footage shown on state television channels and left out of several newspaper reports.
Putin, agitated by a question at a Brussels news conference about the war in Chechnya, said anyone who wasn't a radical Muslim was in danger there. "If you want to go all the way and become a radical Muslim and are ready to get circumcised, I invite you to Moscow," he said. "We are a multi-confessional country, we have experts in this field, too. I will recommend that they carry out the operation in such a way that nothing grows back."
Another episode to find its way into the book was a conversation, also in November 2002, between Putin, movie director Eldar Ryazanov and actor Mikhail Ulyanov about a movie Ryazanov had just shot in St. Petersburg. Kolesnikov wrote, "Putin nodded appreciatively. But the conversation reached a deadlock. Perhaps the president was waiting when he would be asked for money. Everyone asks him for money."
Kolesnikov said he intended his book primarily for those who hadn't read his stories in the newspaper.
Kolesnikov's reports, written in the as-it-happened narrative style, pay a lot of attention to details such as facial expressions and gestures, and poke fun at Putin and other leading politicians. "I wanted to prove that this can be a human interest genre," he said. The Kremlin has never expressed any displeasure at his frivolous reports, Kolesnikov said. Asked why he wasn't expelled from the Kremlin pool, he said, "If you don't lie, it's difficult to find a reason."
Kolesnikov said he disapproved of the decision to arrest Mikhail Khodorkovsky last year and switched from the more personal "Vladimir Putin" to the more formal "Mr. President" in his reports, which grew increasingly critical. He said the pro-Putin Moving Together youth movement approached him and demanded he drop the critical tone. He ignored the advice, he said.
"Putin's main mistake is that he thinks he knows what this country, its television and its governors should be like, and he's leading it down that path," Kolesnikov said. "I wish he were less sure in this regard."
In 2000, Kolesnikov co-wrote a book titled, "From the First Person: Conversations with Vladimir Putin," but said he didn't develop a close rapport with the president. "We have working relations," he said.
A tell-all, behind-the-scenes book about Putin, "Tales of a Kremlin Digger" by Yelena Tregubova, Kolesnikov's predecessor as Kommersant's Kremlin pool reporter, was published last year.
TITLE: Kolchak May
Be Exonerated
PUBLISHER: The Associated Press
TEXT: MOSCOW - A court has opened the way for the possible exoneration of a commander who fought against the Red Army in Russia's civil war and was executed by the Bolsheviks, a human rights activist said Tuesday.
Admiral Alexander Kolchak commanded the White Army in Siberia during the civil war that followed the 1917 Bolshevik Revolution. He was executed by a firing squad in 1920 and condemned as a counterrevolutionary.
Sergei Zuyev, the 78-year-old head of a public foundation to honor victims of Soviet-era repression, said the Constitutional Court had agreed with his contention that Kolchak's case should be reconsidered after lower courts refused to exonerate the White Army commander.
TITLE: Bill to Name Governors Passed
PUBLISHER: The Associated Press
TEXT: MOSCOW - President Vladimir Putin's plan to end the election of governors by popular vote passed its final legislative hurdle last Wednesday when the parliament's upper chamber approved the bill.
The law, which has been criticized as a step back from democracy, would give the president the right to appoint governors, who would then be confirmed by regional legislatures.
If lawmakers reject the president's candidate twice, he could make a new nomination, appoint an acting governor, or dissolve the legislature. If a candidate is rejected for the third time, the president can dissolve the legislature without waiting for consultations to play out.
The Kremlin-loyal upper house, the Federation Council, approved the legislation by a vote of 145-1, with two abstentions. Putin signed the law at the weekend. "The most important thing now is that we can promise the population that the mere possibility of corruption is excluded, because the president himself takes responsibility for the person he entrusts with power as the head of the region,'' said Yury Chaplin, a member of the upper house.
The Federation Council also approved legislation that raises the bar for political parties to get registered, requiring 50,000 members instead of the current 10,000 members, and setting a minimum membership of 250 in regional branches, compared with 100 now. The bill is expected to make it much harder to register new political parties.
The vote was 131 in favor, with one abstention.
Once that bill is signed into law, parties will be required to reregister by 2006.
TITLE: Men Show Little Regard for Their Own Safety
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russian teenage boys show little regard for their own well-being and are dying in higher numbers than their peers in other former Soviet republics and in Eastern Europe - aggravating a worrisome national demographic crisis, according to a recent United Nations report.
Teen deaths can be linked specifically to a society that places little value on life, a contempt for safety rules, alcohol abuse and stress, which is exacerbated by a lack of close family or friends and media that flaunt unattainable lifestyles, sociologists said.
On average, one in 30 boys aged 15 to 19 dies every year from an accident, poisoning, suicide or violence, according to UNICEF's Social Monitor 2004 report released in late November. Young women in the same age group are dying at a rate of about one in 120.
That means Russia saw a mortality rate of 99 deaths per 100,000 young people due to unnatural causes in 2002, according to the study, which surveyed young people in 27 countries from 1989 to 2002.
Estonia and Lithuania ranked second, with about 70 deaths per 100,000 people, while Azeri youth were the least likely to die of unnatural causes, with a rate of 16 per 100,000.
In contrast, the mortality rate due to natural causes among Russian young people was about 31 per 100,000, a figure higher than in Eastern Europe but lower than in the countries of the Caucasus and Central Asia.
This suggests that most young deaths are context-driven and could have been prevented. For example, if young Russians had had the same death rate as their peers in Western Europe, 27,000 of the 36,000 who died of unnatural causes in 2001 would still be alive, the report says.
"The reasons are the very high stress levels suffered by many Russians combined with social inequality and inadequate action on the part of the government," said Anatoly Vishnevsky, head of the Center for Demographics and Human Ecology at the Institute of Economic Forecasting.
The suicide rate among Russian teenagers - about 45 cases per 100,000 people in recent years - is the highest in the surveyed countries and three times higher than in Western Europe. Russian suicides are narrowly followed by those in Lithuania, while Azeri and Armenian teenagers - with a suicide rate of about one per 100,000 people - show the strongest will to live.
Homicide statistics for Russian youth are even more dramatic, and they are not only higher than any other country surveyed but almost 20 times higher than the Western European average, the report says, without providing numbers.
While the death rate among youth is alarming, it provides just a glimpse into the bigger picture of a demographic and social crisis in Russia.
Of the 27 countries, Russia together with Ukraine had the most alarming population increase numbers (birth minus deaths per 100,000 population) - about minus seven.
The death rate is growing steadily and reached the highest level of the surveyed countries in 2002: 16 in every 1,000 Russians died that year, compared with 10 per 1,000 in Kazakhstan and five in Tajikistan.
Even offset by a record of more than 4.2 million immigrants from 1989 to 2002, the population shrunk by 2.1 percent over the period.
"Apart from high mortality, the overall figures were strongly affected by the fact than many families postponed having their first children in the 1990s because of their uncertainty over the future," said Svetlana Nikitina, a researcher from the State Statistics Service and a contributor to the UNICEF report.
Life expectancy for men was 58 years, the lowest of the surveyed countries, and 72 years for women, higher than Moldova, Kazakhstan and Turkmenistan. Slovenians did the best in this area, with 72 years for men and almost 80 for women.
The current demographic decline is the continuation of a trend that began in the mid-1960s when rapid and massive urbanization began in Russia, said Vishnevsky, who works on projects with the State Statistics Service. Poor social adaptation to life among hundreds of thousands of neighbors in urban centers is the main contributor to the grim statistics and results in high alcohol, tobacco and drug use - the major catalysts for early death, he said.
According to his center's findings, the vast majority of unnatural deaths in Russia are related to alcohol abuse. The UNICEF report shows that the number of Russian teenagers who drink is steadily increasing to approach the levels of the so-called "wet countries" of the Baltics.
Teens' disregard for their well-being is being fueled by the media, which since the early 1990s have been feeding them with images of luxurious lifestyles that make them feel a sense of personal failure and the desire to be successful at any cost, said Anatoly Yamskov, a researcher from the Institute of Ethnology and Anthropology.
"Some young people begin to seek refuge in alcohol and drugs or turn to a life of crime, while others start to work hard at several jobs and wear themselves out," he said. "This eventually takes a toll on their life expectancies."
Another major contributor, he said, is the collapse of social networks, which are still strong in the Caucasus and Central Asia and to a considerable extent prevent teens from sliding over the edge. The loneliness felt by a lack of family and friends is most strong among immigrants, Yamskov said, pointing out that there was not only a record number of immigrants over the past decade but probably an even higher number of people moving within the country.
Russians share some cultural traits that add to the higher death rate, such as a long-held contempt for safety rules, Yamskov said. "This includes not only working on high-voltage wires with bare hands but also buying a bottle of vodka produced by God-knows-whom in a dingy kiosk on the corner," he said.
Vishnevsky noted that the government and ordinary people historically have put a low value on life, and this attitude was only aggravated by grandiose social experiments in communist times and World War II, when millions of people died.
"Thirty-five thousand people died in traffic accidents in Russia last year, many times more than in terrorist attacks. Many thousands of these people could have been saved if they had been treated quickly and properly," Vishnevsky said. "But look at how bureaucrats divide the nation's budget: A lot more goes to maintain state security than to provide safety for people through healthcare and education."
Next year, $33.4 billion is earmarked for defense, security and law enforcement, while $8.5 billion will be set aside for healthcare and education.
TITLE: New Cruise Missile Touted
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russian cruise missiles fitted with conventional warheads and high-precision bombs are now capable of striking terrorist bases and other targets around the world, Air Force chief of staff Boris Cheltsov told reporters last Wednesday.
"Today, the long-range air forces have high-precision long-range weapons that permit us to reach terrorists in any part of the world and inflict on them the damage they deserve," he said, RIA-Novosti reported.
The announcement - the most specific claim yet by the military about new strategic armament systems - comes after months of general comments by top government and military officials that work on new conventional and nuclear defense systems was nearing completion.
After the Beslan attack in September, Defense Minister Sergei Ivanov and Yury Baluyevsky, the chief of the General Staff, said that Russia reserved the right to strike terrorist bases abroad.
Earlier this week, Itar-Tass quoted an unnamed military official as saying that Russia "has broken the American monopoly on the use of conventional long-range cruise missiles" and that the "armed forces have the capacity to carry out precision strikes on terrorist bases in any part of the world."
The official said that the cruise missiles, which are being fitted to Tu-160 and Tu-95MS strategic bombers, could hit targets at a range of more than 3,000 kilometers to within several meters.
Though the official did not identify the missiles, Nezavisimaya Gazeta reported earlier that they are the Kh-555, modified from the nuclear Kh-55, the only long-range missile in service with the Air Force. Kh-555 is equipped with a guidance system said to be capable of penetrating anti-ballistic missile and air defense systems.
Russian media speculated that the new technology resembles the U.S. Tomahawks used on B-2 stealth bombers.
The first two Tu-160 bombers carrying conventional cruise missiles will be stationed at the Air Force base near Engels in the Saratov region next year, Itar-Tass reported earlier.
TITLE: Russians the Quickest to Marry and Divorce
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russians are the quickest to marry, but also to divorce, out of all the citizens of countries in Central and Eastern Europe and the former Soviet Union, a UNICEF report has found. Also, Russia retains its long-time leadership in abortions and the share of children in residential care, the survey of 27 countries said.
Demographics experts explain the high marriage rate of young Russians by the persisting negative attitude of their parents to sexual relations outside marriage, while the high abortion rate is due to poor knowledge of family planning and the high price of birth-control pills.
The report, issued last month, summarizes demographic and socioeconomic trends based on official statistics since 1989.
It says that an average of seven couples get married in Russia each year per 1,000 people - more than double the rate in Georgia, which has just three weddings per 1,000 people.
But Russians are also the most likely to get divorced, with a record six couples per 1,000 people getting divorced in 2002, or 83 percent of the marriage rate.
Next in the divorce stakes are Estonians (almost 70 percent), while the lowest divorce rate among the countries surveyed is in Tajikistan (7 percent).
"In Russia, free love among the young is not welcomed by their parents, who in most cases continue to provide for their children for quite a long time," said Olga Kurbatova, a researcher at the Institute of General Genetics. "Not every mother will agree with her daughter's boyfriend moving in, especially if their home is the modest apartment in which most Russians live."
The early marriages, which are just attempts to legitimize sexual relations between emotionally immature and socially and economically dependent young people, are prone to quick breakups, Kurbatova said, adding that children born in these unstable unions often become an undesirable burden for parents.
The study also finds that the share of children deprived of parental care in Russia is the largest among the surveyed countries: More than 420,000, or one in 70, children under 17 live in infant homes, orphanages and boarding schools.
In neighboring Ukraine, the rate is three times lower than in Russia, while in Turkmenistan - where the country's authoritarian president, Saparmurat Niyazov, himself grew up in an orphanage - government statistics say only one child in 2,400 lives in residential care.
The abortion rate in Russia - though declining rapidly over the past decade - was still the highest among the surveyed countries at 139 abortions per 100 live births in 2002, the last year considered in the UNICEF report. In 1993, the abortion rate peaked at 235 per 100 live births.
After Russia, the next highest rates are in Romania and Estonia, while Uzbekistan had the lowest abortion rate of 11 per 100 live births.
Kurbatova said that two major reasons contribute to the high abortion rate: Russians' traditional risk-taking attitude to their own health and the unavailability of effective birth-control pills to most Russian women, due to their relatively high price. Birth control remains traditionally a task for women in Russia, she added.
The best way to reduce the number of abortions and children living without parental care in the country is to develop a culture of family planning, and particularly to instill the habit of using contraceptives, said Anatoly Vishnevsky, head of the Center for Demographics and Human Ecology at the Institute of Economic Forecasting.
"Attempts to introduce a course in family planning in schools is meeting with active resistance from conservatives in the Health and Social Development and the Education and Science ministries, and from clerics," he said.
"Those who are against abortions try to moralize and call on young people to practice abstinence. But this is utopian."
UNICEF's Russian figures were based on figures compiled by the State Statistics Service.
TITLE: City Plans a Chinese Quarter
PUBLISHER: Staff Writer
TEXT: More detailed steps need to be taken by the Chinese and Russian sides for the Chinese Quarter project to gain momentum, experts said after the project's discussion at the St. Petersburg Legislative Assembly last week.
Chinese state-owned Shanghai Investment and Industrial, acting under an agreement of intentions signed during St. Petersburg administration's official visit to Shanghai in April, vowed to invest $1.25 billion into construction of the city-within-a-city development over two years.
It still remains unclear, however, when the actual contract will be signed.
"Our businessmen are ready to work, but not everything depends on them. Right now we are in the process of preliminary project discussions," said Chen Junling, the Chinese counselor for commercial and economic affairs in St. Petersburg.
ST. PETE'S CHINA TOWN
The Chinese Quarter project aims to develop the Krasnoselsky district - 150 hectares of vacant land in the Southwest of the city between the Peterhoff highway and the shores of the Gulf of Finland.
A mini city on the territory will encompass an 80-hectare residential area, complete with schools, cafes, hypermarkets, cinemas and even a Buddhist temple, as well as a 15-hectare business area filled with office buildings, hotels and a theater - a branch of the Peking opera, news website Nevastroika reports.
At the center of the development would be a 300-meter pedestrian walking zone, with restaurants, shops and other attractions on either side. The Quarter is intended to house about 30,000 people and connect to St. Petersburg by an express-train line.
This is the first time that a project of such scope is to be realized by a Chinese company abroad, yet a series of issues needs resolving at next week's Monday meeting for the project to take shape, city officials said.
Division of construction and development responsibilities between the two sides have not yet been agreed on, said Yury Gladkov, deputy head of the Assembly last week. The resultant division will determine who holds the rights to lease and sell property in the area, and consequently, this will affect the city's budget revenue from the project, which for now remains unclear, he said.
A sound economic plan needs to be ascertained before the project gets the green light, said Sergei Andreyev, head of city Education, Culture and Science committee. Estimates conclude that one square meter of construction on in the area will cost $1,000, although the sale price will not exceed $600, Andreyev said.
CHINA'S INFLUENCE
However, regardless of the short-term challenges, St. Petersburg will continue to grow as one of the most interesting destinations for Chinese investment, experts say.
"China will become increasingly influential for the Russian economy, and for St. Petersburg in particular," said Pavel Kiryukhantsev, partner at Zest Leadership consulting.
As a member of the St. Petersburg's April delegation to Shanghai, Kiryukhantsev said: "The Chinese are ready to make considerable investments here and they will pursue their goals, even if no contract is signed right now." Actual construction is more likely to start in 2008, he said.
"It is certainly a very ambitious project, but with a more systematic approach it can take off," said Carl Fey, professor of international business at the Stockholm School of Economics.
PROJECT LOGISTICS
Meanwhile, Vyachyaslav Zarenkov, head of a major city construction company, Etalon-LenSpetsSMU, suggested a possible scheme for project financing. "There won't be a singe ruble or dollar from the Chinese side. Their investments will come in the way of loans, material supplies, workforce, but the money itself will come from the end buyer, that is to say, mainly from Russian consumers.
"The Chinese will probably operate much like city real-estate companies: build something, then sell it. Only they will build it cheaper due to savings on material and salary expenses, and also perhaps due to tax breaks from the Chinese government.
"However, the final expenses won't differ by more than 5-10 percent," Gorod magazine quoted Zarenkov as saying.
The difference could prove considerable, with a possible 10 percent to 15 percent drop in real-estate prices within the next few years, said Kirukhantsev.
Unlike the Noidorf-Strelna and the other city districts eyed by foreigners as potentials for direct investments, the Krasnoselsky development has no engineering and water network infrastructure. That, however, should change in 2005, when Vodokanal, the city's water supply agency will launch of the Southwestern line, said Vitaly Rakitin, one the Krasnoselsky district heads to Nevastroika.
TITLE: De Beers to Boost Activities In Russia Despite Misgivings
PUBLISHER: The St. Petersburg Times
TEXT: De Beers intends to increase its Russian operations, the Financial Times reported in its Asia edition Monday.
The South African diamond firm, though somewhat concerned about recent state interference in business and the infamous tax claims, has decided to up its presence in Russia.
"We want to get into upstream [production] in Russia," Gary Ralfe, De Beers managing director told the FT.
De Beers already operated in a joint venture with Archangel Diamond Corporation. Now it could turn to state-owned diamond producer Alrosa that at the moment sells a large percentage of its production to De Beers.
Alrosa controls nearly all Russia's diamond production. It is owned by Moscow and the Republic of Sakha, and produces 20% of the world's rough diamonds.
De Beers has been buying $800m of diamonds a year for the past three years from Alrosa on a "willing buyer, willing seller" basis, an arrangement that, according to Ralfe, has worked "extremely well", reported Finance 24.com.
So far, the company has not had any run ins with the state authorities in Russia and are pleased by recent government calls for the industry to become more transparent.
However, the recent tax claims searing through the country have been alarming, said De Beers executives, naming the country's opaque taxation regime as one major risk factor in doing business in Russia.
TITLE: Stocks Fall $10Bln in One Day
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW - Nearly $10 billion was wiped off Russian stocks at the end of last week as investors continued to bail out over fears that a surprise $158 million tax claim against No. 2 mobile phone operator VimpelCom signaled a new arbitrary onslaught against private business.
The RTS plummeted 5 percent for the second day in a row last Thursday, sending the benchmark index down 10 percentage points in just two days to close at 546.1. The steep decline sent it below its Jan. 1, 2004, level, reversing the rapid growth trends of recent years that have seen Russia outperform most other emerging markets.
"International investors are radically changing their view of Russia," said Alexander Kim, equity strategist at Renaissance Capital. "They are reassessing the risk premium for the country and we are seeing a massive reduction of position."
Wednesday's tax claim against VimpelCom appeared to dash previous hopes that the attack on Yukos was an isolated case.
"It's starting to look like a banana republic," said Mattias Westman, CEO of Prosperity Capital Management. "Nobody looks safe. It appears that a government minister is trying to sabotage a firm that he is in conflict with."
TITLE: Entrepreneurs Step Up for Reward
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW - Ruben Vardanyan, president of Troika Dialog Group, recently returned from Singapore where he learned that the Chinese word for "business" consists of two characters: life and meaning. That, he says, is his own recipe for entrepreneurial success.
Vardanyan, who was crowned Ernst & Young's Entrepreneur of the Year at an awards ceremony late last month, was one of Troika Dialog's first employees when it was set up in 1991. Under his stewardship, by 2003 the company boasted a turnover of more than $25 billion.
Launched in Russia last year, the Ernst & Young award has been quick to establish itself as one of the most credible and objective business awards in Russia.
"This is in stark contrast with similar competitions, where the winners turn out to be the sponsors [of the event]," said Igor Bukhshtab, director of St. Petersburg-based IT company Lynx BCC and last year's winner of the Young Entrepreneur award.
The international Entrepreneur of the Year award has been run by Ernst & Young for 18 years in 40 countries. Aside from crowning an overall winner, other awards honor outstanding entrepre-neurial achievements in specific developing sectors of the national economy, including manufacturing, financial services, consumer goods, trade, services and transport, corporate social responsibility, information technology, regional leadership, and female business leadership.
In Russia, the jury had to sift through 70 original contenders to name the finalists. Igor Yurgens, vice president of the Russian Union of Industrialists and Entrepreneurs and a judge for the award, said the decision-making had not been easy. "All of them [the nominees] are worthy," he said.
The organizers said that the fact that businesspeople were keen to take part in the contest attested to the steady evolution of entrepreneurs, who are increasingly prepared to come under scrutiny and be appraised according to international criteria.
"Participation in the contest means readiness to open up financial information: transparency," said Alexander Ivlev, a partner with Ernst & Young who is in charge of the international Entrepreneur of the Year award program in Russia.
Exchanging business cards and some drawing on Dunhill cigars during a welcome drink, the entrepreneurs attending the ceremony are all success stories of today's Russia. Of the 23 finalists, 13 represented Moscow, three hailed from St. Petersburg and the rest came from regions as far as the Komi Republic in northern Russia and Siberia. Of different backgrounds and professions, all of them learned the nuts and bolts of a free-market economy in the wild 1990s.
This year's winner in the Young Entrepreneur category, Albert Gusev, 35, is from Nizhny Novgorod. He has come a long way from selling candy at a market in the early '90s to becoming general director of Sladkaya Zhizn, a leading regional food distributor that is pursuing development through a strategic partnership with Spar International.
Gusev's story is featured in "Taming the Wild East," a collection of successful business people's profiles put together by Delta Private Equity Partners. Viktor Sedov, a judge and executive director at the U.S.-Russia Center for Entrepreneurship that helped on the book, said: "A Russian entrepreneur may very well be the most resilient and optimistic entrepreneur in the world."
Business in Russia is still seen as a man's domain. "That's very bad, but it's a reality," said Pyotr Yudin, a guest at the ceremony and also a self-made businessman who set up his $4 million-turnover company Business-to-Business Production Group with $300 pooled together with four friends. "A woman must possess certain qualities and a character to do business here," he added.
Of the 23 finalists, only two were women: Galina Melnikova, director of HR Partners, and Anna Matveyeva, director of Idealnaya Chashka. Matve-yeva, who manages 13 coffee shops in St. Petersburg and two in Moscow, was named the Female Business Leader of the Year.
"I thought I would be winning among the entrepreneurs but I won a victory over a woman," Matveyeva joked while collecting the prize.
The hurdles faced by ambitious businesswomen in Russia are compounded by heavy taxation, excessive administrative barriers and red tape, which impede the growth of small and medium-sized businesses in the country generally, experts say.
"As of July 1, 2004, there were 951,000 small enterprises," said Svetlana Nugumanova, a spokesperson for Opora, which supports small-business development. This figure is not much different from that of the 850,000 small businesses that existed 10 years ago, Nugumanova added. And yet, guests at the Ernst & Young awards ceremony were unanimous in their verdict that the country's entrepreneurial spirit is strong.
"We work with hundreds of medium-sized businesses [in Russia]," said Eric Hansen, deputy director for the U.S.-Russia Center for Entrepreneurship. "Entrepreneurs are like water: You can put up as many barriers as possible, but they will still reach their goal."
Adam Wachter, Spain-based senior manager for the Young Entrepreneurs' Organization, was another guest at the ceremony and had come to Russia to help launch the Young Entrepreneurs' Organization's St. Petersburg chapter. After a week of meetings with Russian businessmen, he said he was optimistic about their prospects and described them as "high-spirited."
Few would contest that top award winner Vardanyan, who also won the financial services prize, is high-spirited or that he deserved his awards. He has "charisma, a free command of English, a clear understanding of both business and the government's policy," Bukhshtab said.
TITLE: City Deals an Easier Hand on Industrial Zones
TEXT: An urgent need to develop St. Petersburg industrial zones can be explained by the current growth in competition and a deepening of specialization in local industry. An advanced manufacturer is forced to constantly develop, hold and redouble his competitive advantages under pressure from competition.
THE MODEL ZONE
Creation of industrial zones comes about when major suppliers of semi-processed goods are settled close to their clients, and also near developed transport centers. In this manner, manufacturers save on transport and utilities costs, since suppliers of both of those services can decrease their fees keeping in mind the scale factor of the orders.
An industrial zone is created with a right of private ownership to land. That acts to attract clients (potential users of the land) for the long-term. In essence: a private entrepreneur evaluates sectors of potential demand in the future, acquires a land plot, then invests money in utilities and transport infrastructure, and starts to attract the clients, establishing rent rates in the process.
RUSSIAN SPECIFICS
However, it should be noted that current Russian Federation laws on land and construction bring forth a lot of legal and administration obstacles hindering development of industrial zones according to a western model.
Most approvals for design documentation have not been changed since the Soviet period when the state acted as the sole owner of land and, at the same time, as the client, the designer, the contractor, the controller and the user for all the real-estate in the country.
Hence, up to the present time, it seems to be very complicated to develop industrial zones without acquiring legal, administrative and sometimes financial support from the state authorities themselves. Luckily, there have been some positive developments on the theme recently.
CHANGES IN ST. PETERSBURG
St Petersburg Government worked out a new approach to calculating rent rates. Starting from January 1, 2005, the city administration will abolish a coefficient decreasing rent rate for enterprises occupying spacious land plots.
Before 2005, this coefficient varied from 0.1 to 0.75 (meaning, rent rate correspondingly decreased up to 30-50 percent). Starting from January 2005, the coefficient equals 1.
As an additional instrument to enforce development of industrial zones, the administration's master plan will detail the rules of land use and feasible ways to for its development. The regulation will also include wording on industrial zones.
Additionally, the new St. Petersburg law on land plot provision may allow the authorities to exempt certain investors from payments for infrastructure set-up should those investors finance the transferal of their industrial enterprises to outside the city perimeters. That now shows the city taking an individual approach to development of industrial zones.
LAND PURCHASES
At the same time, the city government has already approved a bill that will decrease the land purchase price threefold. If the coefficient that calculated the price of buying a land plot stood at 30, from next year it will be drop to nine. That is nine times the annual land tax of the plot.
We believe that the local city government moves to attract new investments and develop St. Petersburg properly will lead to positive effects in the near future.
Natalia Diatlova is the manager of Ernst & Youngs (CIS) Limited in St. Petersburg.
TITLE: IN BRIEF
TEXT: Fast Food Expansion
ST. PETERSBURG (SPT) - Pizza-Nord plans to open seven new KFC restaurants and several more Pizza Huts in St. Petersburg next year, the company statement said Thursday.
An average cost of a fast-food restaurant in a shopping center is about $500,000-700,000 while a detached property location costs about $1 million.
Pizza Hut development will depend on the market situation in the segment and the policy of other players, said the company's general director Vladislav Ivanov, Interfax reported.
The company strategy provides for anywhere between two to six new Pizza Hut's next year.
Pizza-Nord has been the managing company for Pizza Hut and KFC franchises in Russia since 1994, when it signed an agreement with the brand-owner Yum Brands Inc.
The KFC chain numbers nine spots in the city, while Pizza Hut has a total of seven outlets.
For the Record: