SOURCE: The St. Petersburg Times
DATE: Issue #1066 (32), Tuesday, May 3, 2005
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TITLE: May Day Marches Express Dissatisfaction
PUBLISHER: The Associated Press
TEXT: MOSCOW - Tens of thousands of Communists, labor union workers and opposition activists rallied in Moscow and St. Petersburg for the traditional May Day labor holiday Sunday, as protests over social reforms mixed with anti-government demonstrations.
Violence was reported during at least one rally in the Russian capital, which is already in a heightened state of security due to next week's Victory Day celebrations. Police had closed off many streets in the center, using dogs and metal detectors to check the demonstrators.
Thousands of Communists rallied under pictures of Lenin and Stalin along with traditional red-and-white, hammer-and-sickle banners, with slogans like "Rise, Save Russia!" and marched down Tverskaya Ulitsa, one of Moscow's main boulevards, to the square in front of the Bolshoi Theater.
"We are not just celebrating the May Day holiday, but are also putting forward our own demands in order to return to a place of rule and order, which has been done away with under the present government," said Communist Party leader Gennady Zyuganov.
Radical activists from the National Bolshevik Party and the Red Youth Avant-Garde political group clashed briefly with riot police, erecting improvised metal barricades after several activists were detained by police.
Sergei Udaltsov, a leader with the Red Youth Avant-Garde who appeared on NTV with bruises and blood on his forehead, said that problems arose after four Red Youth members were detained for defacing portraits of President Vladimir Putin.
More than 150 people then broke off from the communists' main rally, marching to the nearby prosecutor general's office to demand the activists be released. NTV showed people waving fists and scuffling with riot police.
"Four people were detained. After this a fight broke out and they started beating old people," Udaltsov told NTV. "We're demanding the release of our comrades."
Also rallying Sunday were thousands from the Kremlin-allied United Russia carrying banners that read "Together We Can Defeat Corruption," "We Believe in Ourselves and in Russia" and "The Working Man Should Not Be Poor."
State-run television prominently featured United Russia in what appeared to be a bid to boost Russians' attitude toward the Kremlin-backed party, which dominates Russia's lower house of parliament - the State Duma - and all but rubber-stamps most Kremlin legislation, including controversial social reforms.
The reforms, which went into effect earlier this year, replaced social benefits such as subsidized medicines, utilities and transport with cash payments. Millions of pensioners, veterans, the disabled and other disadvantaged Russians were affected and have complained the payments are too meager to cover even basic needs.
The reforms triggered the largest public protests in President Vladimir Putin's five years in power, forcing authorities to raise pensions and restore some of the benefits.
Moscow Mayor Yury Luzhkov, a United Russia member who has periodically criticized the social reforms, told a rally at Tverskaya Ploshchad that the government must invest more in science, technology and education.
"Results are there, but there is no happiness," Luzhkov was quoted as saying by the Interfax news agency. "The Cabinet's plans, coupled with the State Duma's obedience, are dangerous for society."
Hundreds of supporters of liberal Yabloko party and other opposition activists carried banners reading "For Russia Without Putin" to Lubyanka - the infamous home of the KGB - to criticize what they say is growing authoritarianism under Putin.
Many also carried pictures of imprisoned Yukos oil founder Mikhail Khodorkovsky. Observers say the criminal prosecution of Khodorkovsky was a Kremlin decision due to his funding of opposition political parties.
"We know how to defend our Motherland. We know how to defend our authority. We know how to defend our ideals," liberal politician Irina Khakamada told a rally. "But we still haven't learned one thing: we still don't know how to defend ourselves."
Rallies were held in cities around Russia.
TITLE: Riga Makes Big Issue Of Border
PUBLISHER: Staff Writer
TEXT: The spat between Russia and Latvia over a border treaty due to be signed in Moscow on May 10 continued last week with the Kremlin refusing to accept a declaration issued by Riga as a supplement to the border deal.
The declaration filed by the Latvian government in April describes its view of the Soviets' role in the history of the Baltic state.
At dispute is some land that was accepted as part of Latvia from 1920, when the border with the Soviet Union was defined in the Tartu Treaty, until 1940, when the Soviet Union occupied the Baltic state. The land, which the Latvians describe as Abrene, has been incorporated in the Pskov region.
The border issue also has wider implications because Lithuania, Latvia and Estonia joined the European Union last year.
"While approving this treaty the government of Latvia simultaneously has approved its own declaration, which has interpreted not only the treaty, but also presents different views on a wide circle of historical questions," Latvia's ambassador to Moscow, Andris Teikmanis, said Thursday in an interview on Ekho Moskvy.
"This is our own declaration or our own interpretation, which doesn't change anything in the treaty itself. The text [of the treaty] is left the same as when it was approved by the two sides in 1997 and the government of Latvia is fully committed to sign it and to conform to it and ratify it," the ambassador said.
"We and Russia have different views on important historical questions," he added. "They are very current, for instance that many politicians or the Russian Foreign Ministry have been stating that the Baltic States joined the Soviet Union of their own will. We have disagreements and if we have them, we have to talk about them."
The Latvian parliament will on Tuesday vote for one of several versions of the declaration condemning the occupation of the Baltic States.
Russia was already uneasy about Latvia's stance on several issues relating to 60th anniversary Victory Day celebrations in Moscow on May 9, even though Latvian President Vaira Vike-Freiberga is the only one of three Baltic presidents who agreed to attend.
The Russian Foreign Ministry reacted with a harsh statement over the Latvian declaration, stating that the Kremlin is not happy with the Latvians' use of the term "a border line," rather than simply the border. Moscow said this contradicts international legislation.
"The text of the declaration made public by the head of the Latvian Foreign Ministry on April 26 means that there are territorial claims introduced in relation to Russia and for this reason the border treaty between the two countries is losing all its meaning," the ministry said in a statement issued Friday.
The declaration came as a big surprise to Russia because it was preparing to sign the border treaty, the ministry said.
"All this calls a deep regret and, taking into account that Russia, while making moves to the advantage of Latvia, EU and NATO, desires and intending to finish the legal basis of relations and sign the treaty without waiting for a political agreement between Latvia and Russia to be completed," the statement said.
Vike-Freiberga has said Latvia should abandon its territorial claims in order to sign the border treaty with Russia, which would be a green light for the country to join the Schengen zone.
"No country without a clearly determined border can be accepted into the Schengen zone," Vike-Freiberga said in an interview on Latvian radio Friday.
The Schengen zone comprises 13 of the 25 EU member states and two European Economic Area member states. The zone has no internal borders and has a single external border where immigration checks for the Schengen zone are carried out in accordance with a single set of rules.
Vike-Freiberga said she has asked the Latvian Foreign Ministry to clarify the contents of the declaration to her.
But a St. Petersburg political analyst said Russian authorities are stuck in the past and do not accept the declaration.
"We do not want to learn our own history," Leonid Kesselman, a political analyst at the Sociological Department of the Russian Academy of Science, said Friday in a telephone interview .
"I have a feeling that our citizens have absolutely no will to know their own history," he said. "It does not make sense for Russia to talk about its borders in the circumstances of the country dying out and basically being on its way to fall apart sometime soon."
"There was once a mighty power called the Austro-Hungarian Empire," Kesselman added. "Today all that is left of it is small Austria. I think we are moving in the same direction."
But Sergei Yastrzhembsky, Russias' envoy to the European Union, said Russia still hopes to sign border treaties with Latvia, Lithuania and Estonia soon. This would make relations with the EU "more healthy," Interfax quoted him saying last week.
"The signing of these treaties in the nearest future would definitely be welcomed by the EU," he said. "In this way we will not only confirm our border with these ... republics, but also with the EU as a whole."
TITLE: U.S. Helps Russia Fight Nuclear Smugglers
PUBLISHER: New York Times Service
TEXT: MOSCOW - A man carrying the hidden radioactive material mingled among airline passengers at Moscow's Sheremetyevo Airport one afternoon this year. His briefcase, holding the contraband, was indistinguishable from anyone else's carry-on bag.
Then, as he approached the check-in counter, lights flashed and an alarm sounded. A mounted video camera captured the man's image. Uniformed guards seized the briefcase and took it to a lead-lined booth where it could be inspected without harming other passengers.
So passed a drill of a quietly expanding nuclear security initiative in the former Soviet Union. The man, a Russian customs employee, had tripped a silent sentinel - an electronic radiation detector that had been installed by the Russian government, underwritten in part by the United States.
Since the Sept. 11, 2001, attacks, the United States and Russia have been accelerating the installation of automated radiation detectors at Russian shipping ports, border crossings and airports, hoping to deter or detect the movement of radioactive material through Russia, a land where law and order is a deeply inconsistent affair.
Officials in the two nations hope the program, called Second Line of Defense, will complement security measures at former Soviet nuclear storage sites by providing a means to detect material that is already loose, or that in the future makes it to the wrong side of the fences.
Its principal tools are banks of sensors now visible at airports and borders in Russia, typically installed beside luggage inspection points. The program augments efforts at cooperative detection programs by the United States and former Soviet states. The United States has spent about $35 million on the program in Russia since 1998.
Some details of the program are not publicly known, including the locations of all the sensors and the schedule for installing more, because the program managers do not want to give smugglers a map. (Russian and American officials agreed to discuss the Sheremetyevo sensors because their existence is thought to be widely known.)
But information already made public provides insight into the ambitions and limits of efforts to safeguard the public from nuclear and radioactive stockpiles left from the cold war.
Nonproliferation specialists in and out of government say that although much of the former Soviet Union's nuclear and radioactive material has been consolidated into upgraded storage sites since the union dissolved in 1991, worrisome security gaps remain. Moreover, Russia has quarreled with the United States over access to its most secret facilities.
Specialists also say that no matter the level of security and cooperation at storage sites now, uncertainty remains about the historical accuracy of Soviet nuclear inventories. That means that how much material disappeared before security was improved is anyone's guess.
The dangers have been clear since at least 1994, when a smuggler with plutonium for sale passed through this airport and flew on a passenger jet with the nuclear material to Munich, where he was arrested.
Paul Longsworth, deputy director of the National Nuclear Safety Administration, a semiautonomous agency in the Department of Energy, said that given those security concerns, the sensors were part of "defense in depth," a strategy of trying to create layers of security between nuclear material on foreign soil and the United States.
"It's better to have your defense somewhere other than on the one-yard line," Longsworth said in a telephone interview from Washington.
To this end, the United States has helped underwrite the installation of the sensors at about 60 Russian ports, airports or border crossings; 15 more sites are planned by Sept. 30. The program has expanded beyond Russia. Sensors were installed in Greece before the Olympics last year, and a project has begun in Lithuania.
Tracy Mustin, the program's director in Washington, said negotiations have begun to place sensors in Kazakhstan. Ukraine recently agreed to join the program.
Nikolai Kravchenko, chief of Russia's Service for Customs Control of Nuclear Materials and Radioactive Sources, said the sensors installed frequently picked up radioactive material, and recorded 14,000 "hits" last year.
Of those, about 200 involved cases of possible smuggling, including people who apparently had material but did not realize it. In some cases people carried money that had become irradiated, military equipment collectors carried aviation dials and other lightly radioactive souvenirs, and women wore radioactive jewelry.
Kravchenko said culpability or ignorance had been harder to determine in many cases, as when truck drivers were caught at borders with radioactive material among scrap. Almost invariably, he said, drivers claim not to know dangerous material is in their loads.
Since 1995, no weapons-grade material has been discovered, Kravchenko said. He said, however, that nuclear fuel pellets and raw uranium had been intercepted. There have also been hints of organized smuggling.
Vladislav Bozhko, who supervises the program at Sheremetyevo, said that in 2002 all the sensors at one terminal were set off in sequence, as if someone had made a dry run. "We think they were just testing how well it worked, looking for a gap in the defensive line," he said. No one was caught.
The officials say the sensors are extremely sensitive, picking up faint traces of radioactivity. (The claim withstood an unintentional check. This correspondent's wife, recently returning to Russia after undergoing medical scans in the United States, set off two sensors when entering the country. Remnants of isotopes in her bloodstream set off the alarm.)
Still, nonproliferation specialists warn that for all of their abilities, the sensors and the Second Line of Defense program have limits.
"A layered defense is really smart and important," said Laura Holgate, a regional vice president of the Nuclear Threat Initiative, a Washington-based nongovernmental organization that works on nonproliferation. "But the best and most efficient use of resources is to make sure the material stays put, and that it is ultimately destroyed."
"No matter how effective any other layers are," Holgate said, "none of these has any pretense of being as hermetically sealed as a site barrier."
Kravchenko said Russia hoped in time to install the sensors at every Russian border point, although it did not yet have a financing plan. For now, busy border crossings, or those near stored nuclear material, have received the sensors rather than those in remote or lightly trafficked areas.
Similar plans are being developed in the United States, where the Customs and Border Protection has been installing more stationary sensors - known as radiation portal monitors - at shipping ports and land border crossings, and intends to expand their use to cover almost all entry points to the country, said Barry Morrissey, a spokesman for the agency.
The National Nuclear Security Administration said it would continue to help Russia, but would conduct cost-benefit analyses for proposed additions to decide whether the United States should help pay. "The goal of 100 percent is something we do support, if they can get there," Longsworth said. "But it does not mean that the U.S. taxpayers will pay for it."
TITLE: IN BRIEF
TEXT: Vilnius Tourist Visas
VILNIUS (SPT) - Lithuania's Foreign Ministry plans to toughen entry procedures for tourists from Russia and CIS countries, RIA Novosti reported Monday.
Quoting the president of the Lithuanian Tourism Association, Kestutis Ambrozaitis, the agency reported that Vilnius will end the practice of allowing the booking of package holidays to be sufficient for an applicant to receive a visa.
In 2004, tour operators from Russia, Belarus and Ukraine purchased about 200 000 package holidays from the association. Citing strict demands from the EU, Ambrozaitis expressed hope that the new order will not be in force for the forthcoming summer holiday season.
Siege Film Premiere
ROME (SPT) - Italian screenwriter Tonino Guerra's documentary about the Siege of Leningrad premiered in Rome on Saturday, RIA Novosti reported.
Entitled "Cinemaphonia of Dmitry Shostakovich's Seventh Symphony," the film juxtaposes a performance of the famous Leningrad symphony with showing of fragments of dramatic war-time archive documentaries. Guerra, who wrote the script of Cinemaphonia, wasn't able to attend the premiere, owing to poor health. The film was presented by St. Petersburg researcher and historian Yury Kolosov, who was responsible for the project's historical accuracy.
Cinemaphonia was first shown in St. Petersburg on Jan. 27.
Veterans' Home Ready
ST. PETERSBURG (SPT) - Reconstruction of the city's St. Yevgenia hospital was completed Saturday as part of a local program to help war veterans, Interfax reported.
Also, the House of Blockade Survivors at 104, Nevsky Prospekt has reopened after a massive renovation, Interfax reported Friday. The house is the office for the city's Association of Blockade Survivors and the International Association of Leningrad Siege Survivors.
Yabloko Leaders Held
ST.PETERSBURG (SPT) - Maxim Reznik, head of the local branch of Yabloko party and Anton Morozov, a member of the party's regional branch, were detained after a spontaneous unsanctioned meeting outside the Belarus Consulate-General, web site Zaks.ru reported Friday.
"Anton and I are accused of organizing an unendorsed meeting, which is an administrative offense," Zaks.ru quoted Reznik as saying. "But we deny the allegations and insist that we came to the consulate solely to hand over a gift for [Belarussian president] Alexander Lukashenko."
The gift was a prisoner's costume.
TITLE: Millions in Russia Observe Orthodox Easter
PUBLISHER: The Associated Press
TEXT: MOSCOW - Russian Orthodox Patriarch Alexy II wished health and happiness to millions of Orthodox Christians as believers on Sunday marked Easter, the holiest day in the Orthodox calendar.
"Let the joy of the Easter holiday touch every heart. Let this joy give you strength and courage to withstand all hardships and troubles," the patriarch said in his address, parts of which were broadcast on television.
At the Cathedral of Christ the Savior, a massive church near the Kremlin that was destroyed by Stalin and rebuilt with a golden dome, thousands of believers gathered for midnight mass, including President Vladimir Putin, Prime Minister Mikhail Fradkov and influential Kremlin aide Dmitry Medvedev.
Earlier in the evening, organizers put on a first-ever laser show that painted the church's white exterior with images of icons and famous church frescoes.
In his Easter greetings to believers, Putin said the country was undergoing a spiritual revival.
"On this festive spring day, I'd like to point to the growing positive influence of the Russian Orthodox Church and other traditional Christian confessions on molding the spiritual and moral climate in Russian society, bringing up of the coming generation and solving pressing issues in the spheres of culture and education," the president said.
The Orthodox Church, all but banned under the Soviet Union, has experienced a major resurgence since 1991, with an estimated two-thirds of Russia's 144 million people believed to be observant.
In Ukraine, where the country's sizable Roman Catholic population marked Easter nearly a month ago, President Viktor Yushchenko sent Easter Greetings to Orthodox believers, telling them that Ukraine received divine help during last year's pro-democratic "Orange Revolution" protests that brought him to the presidency.
"We see our future tied with the future of other European nations ... I wish that this Easter marks the beginning of a new and better life for everyone," Yushchenko said.
Almost 90 percent of Ukrainians are members of the Orthodox church.
In his address, the Russian church leader also noted the upcoming May 9 Victory Day holiday to mark the 60th anniversary of the end of World War II in Europe - "which we achieved at the cost of countless suffering."
Alexy II called on Russians to remember the feat "which our fathers and grandfathers committed for the sake of freedom and liberation of our Motherland.
"The feat and the courage of our people should bring up the younger generation, which doesn't know the horrors of the war and the sufferings of the older generation," the patriarch said.
TITLE: Berlin May
Repay Work
On Rubens
PUBLISHER: The St. Petersburg Times
TEXT: Germany is ready to compensate the expenses of restoring the painting Tarquin and Lucretia by Peter Paul Rubens, provided the canvas is returned to Sanssouci palace in Potsdam, Germany, the general director of the Foundation of Prussian Palaces and Gardens in Berlin-Brandenburg , Hartmut Dorgerloh said Thursday.
"We have seen the restored painting in the Hermitage, it has been extremely well restored to a very professional standard, and we are ready to pay for the work, but we are waiting for the legal questions concerning its return to be resolved," Interfax quoted Dorgerloh as saying.
"For our collection it is one of the central artworks," he added. "At the last meeting between the Russian president and the German chancellor it was decided to create a special expert commission to resolve the more difficult questions concerning the displaced valuables such as the Anhalt silver and the Rubens painting."
The painting should not be considered trophy art, because it was not removed from Germany as part of a Soviet government order, but was taken by a private person and therefore should be returned, Dorgerloh said.
The Moscow entrepreneur Vladimir Logvinenko was the third buyer of the work in Russia and he has had it restored and displayed in the Hermitage. Germany had considered questioning Logvinenko's claim to ownership in a Russian court, but agreed not to take legal action and negotiate on the painting in a Russian-German working group.
Late last year the Foundation of Prussian Palaces and Gardens in Berlin-Brandenburg printed a book documenting the more than 3,000 paintings that have been missing since the end of the war.
About a third of these are believed to be in Russia.
"It's a great shame that the 'trophy art' dispute continues to cloud relations with our colleagues," Interfax quoted Dorgerloh as saying. "For instance, Peterhof and Sanssouci have had a partnership agreement since 1965 and we have conducted many joint event and I wished that our good professional relations were not hampered by this dispute."
TITLE: Syria Hails Putin Plan
PUBLISHER: The Associated Press
TEXT: DAMASCUS, Syria (AP) - Syria on Sunday welcomed President Vladimir Putin's proposal for a Mid dle East peace meeting in the fall and said the cool American and Israeli reception of the offer exposed their rejection of peace.
The government-run Al-Thawra newspaper said the Russian proposal was an opportunity to distinguish between "those who are in the peace trench and those facing the opposite direction.
"The idea was a practical test of the U.S. and Israeli polices and of their credibility," it said, adding that it unmasked their desire to alone decide whether to accept or reject peace.
During a visit to Egypt, Putin proposed Wednesday that Russia host an autumn Mideast peace conference, timing it for after Israel withdraws from the Gaza strip. Palestinians embraced the idea, but Israel and the United States brushed it aside.
Later, Putin said he was still committed to an international gathering, but said it would likely be a meeting of high-level experts, not be a summit.
Russia and before it the Soviet Union long had been important allies of Syria. Al-Thawra hailed Russian efforts to revive its regional role, expressing hope it would be "more powerful and more effective."
TITLE: Vyborg Cyclist Hurt in U.S.
PUBLISHER: Combined Reports
TEXT: Two-time Olympic cycling champion Vyacheslav Yekimov, of Vyborg, was released from a Texas hospital Sunday and is believed to be on his way back to his hometown, Russian media reported Monday.
Yekimov suffered multiple injuries after hitting a hole on the road and losing control of his bike while riding with Lance Armstrong in the American's hometown of Austin on Friday.
The reports say the 39-year-old Russian, who rides for the U.S.-based Discovery Channel team, broke his arm and seriously injured his spine. Yekimov first captured gold in team pursuit for the Soviet Union at the 1988 Seoul Olympics before winning the individual time trial at the Sydney Games in 2000.
He finished second behind American Tyler Hamilton in the same event last year in Athens.
Yekimov also helped Armstrong win many of his six Tour de France titles while riding for the U.S. Postal Service team.
The Vyborg cyclist was expected to compete in the tour this year, again helping the American in what will be his last race, but now his participation in cycling's most prestigious event is in doubt.
(SPT, Reuters)
TITLE: City Cultural Institutions Highlight Victory Celebration
PUBLISHER: Staff Writer
TEXT: As the 60th anniversary Victory Day commemorating the defeat of Nazi Germany on May 9 approaches, St. Petersburg's cultural institutions and public organizations are gearing up for the celebrations.
The city's artistic and theatrical organizations and NGOs are putting forward an array of memorial events to mark the victory over fascism.
Local museums have mounted a string of special exhibitions focusing on many sides of war, from bread to field hospitals to dolls, while war songs can be heard at virtually all the city's musical venues from the Mariinsky Theater to the Shostakovich Philharmonic to the Oktyabrsky Concert Hall.
The following are the main highlights:
MAY 3, TUESDAY
4 p.m. Literatorskiye Mostki Cemetery.
Opening of the long-awaited monument to the poet and blockade-era radio voice, Olga Berggolts, who is buried at the cemetery alongside some of Russia's greatest literary talents, including novelists Ivan Turgenev and Nikolai Leskov, and poet Alexander Blok.
MAY 5, THURSDAY
5 p.m. Shostakovich Philharmonic
Music of Victory. War-time poetry, songs and music performed by the public theater From Blockade By Birth.
MAY 7, SATURDAY
Noon. Solyanoi Pereulok.
1945 Dance Hall. Students from the St. Petersburg Theater Art Academy reconstruct the setting, music and atmosphere of the Victory Day dance parties.
7 p.m. Shostakovich Philharmonic.
Maxim Shostakovich conducts the St. Petersburg Academic Symphony Orchestra performing Symphony No.7 (The Leningrad Symphony) by his father, Dmitry Shostakovich.
MAY 8, SUNDAY
Noon. The Victory Monument on Ploshchad Pobedy.
Wreath-laying ceremony.
1 p.m. Pavlovsk Palace Museum.
Winners' Ball. A festive reception for the war veterans.
5 p.m. Ice Palace.
The Roads Of Victory. Concert of war songs.
6 p.m. Theater For Young Spectators.
Sashka. Premiere of a new theater rendition of one of the masterpieces of Russian war prose, Vyacheslav Kondratyev's novel "Sashka", a dramatic story of a young Soviet soldier, who refuses to shoot a disarmed German prisoner of war.
7 p.m. Mussorgsky Opera and Ballet Theater.
Convoy PQ-17. Canadian ballet master Bill Coleman's choreographic composition inspired by the dramatic story of the sinking of a merchant convoy delivering supplies to the north of Russia during World War II.
MAY 9, MONDAY
2 p.m. Oktyabrsky Concert Hall.
Renowned local bard Alexander Rozenbaum gives a charitable concert of war songs.
6 p.m., Palace Square.
At Six O'Clock After The War. The city's singers and musicians give a public concert of war songs.
7 p.m. Shostakovich Philharmonic.
The St. Petersburg Cappella Symphony Orchestra and Choir present a concert of war songs. Vladislav Tchernoushenko conducts.
7 p.m. Mariinsky Theater.
Soloists of the Mariinsky Academy For Young Singers and the Andreyev State Academic Russian Orchestra of Folk Instruments present a concert of war songs.
8 p.m. The Strelka of Vasilyevsky Island.
The Songs That Won The War. Public concert of war songs.
11 p.m. the Strelka of Vasilyevsky Island.
Festive fireworks.
MAY 10, TUESDAY
2 p.m. Akimov Comedy Theater.
The Victory's Two Katyushas. Concert of war songs.
4 p.m. Rumyantsev Mansion.
Opening of the Blockade Diary exhibition showcasing paintings, drawings and posters made by the city's artists during the Siege of Leningrad.
TITLE: Presumption
Of Guilt Costs
Society Plenty
PUBLISHER: Vedomosti
TEXT: The fact that the Constitutional Court recently cleared up the problem of the legal term, "unconscientious taxpayer," is reason enough to celebrate. It was this very court that introduced the term in 2001 and thus allowed arbitration courts and tax officials to make so much trouble that they ruined the investment climate and decimated Yukos.
The Yukos case was the biggest, but not the worst example. The arbitration court in the Far East district went so far as to reverse the presumption of innocence in spring 2003. The court ruled that if a taxpayer did nothing illegal, this did not necessarily mean that it was conscientiously paying its taxes.
The story behind the Constitutional Court's ruling is in itself interesting. It was dated Jan. 18, but only came into force last Tuesday.
However, the public found out about it right after the president's state of the nation address. Regardless of whether these two events are linked, one gets the impression that the courts are like a weather vane, turning with every shift in the political winds. And this somehow prevents us from getting excited about this important ruling.
Efficient institutions lead to minimal transaction costs when economic agents interact with each other or with the state. Contracts set the conditions for these interactions. Even the laws that these contracts have to conform to are a kind of contract, concluded between citizens and companies and the state. Without enforcement via objective courts, the contract loses all meaning. This leads to a rapid increase in costs, as every partner has to be checked out before and during every deal.
Today, courts provide practically no enforcement in businesses' relations with the state. This affects everyone, not just Yukos.
This spring, Opora, the lobby for small and medium-sized businesses, and the VTsIOM polling agency conducted a survey that showed that legal issues pose the biggest problem for businesses. More than 65 percent of those polled stated that it was impossible or nearly impossible to win a court case against the regional or local authorities, or against law enforcement agencies. Entrepreneurs did not rate the judicial system as satisfactory in any region in Russia.
Without a normal judicial system, business and state authorities are forced to trust each other and any balance of interests will be unstable. The risks and the costs of bad institutions for the long-term projects that could boost economic growth and help modernize Russia will simply be too high.
This comment originally appeared as an editorial in Vedomosti.
TITLE: City to Lure More U.K. Firms
PUBLISHER: Special to The St. Petersburg Times
TEXT: The U.K. could soon become the biggest foreign investor in St. Petersburg as rising market stability has made the city attractive to an increasing number of British companies, head of the Russo-British Chamber of Commerce said Thursday.
"We want to become number one foreign investor in St. Petersburg", said Sir Andrew Wood, chairman of the Russo-British Chamber of Commerce (RBCC).
With a total of $985 million Britain was the second-largest foreign investor in the city in 2004, marking a 41 percent rise in comparison to 2003, Wood said at a conference held by the RBCC in City Hall.
The U.K. accounted for 13 percent of all foreign money poured into St. Petersburg - topped only by the U.S. share of 24 percent. Two year ago, Britain counted as only the eight-biggest investor in the city with a 2.2 percent share.
The northern capital lured a large number of foreign companies last year due to its cheap labor force, market size, highly qualified personnel and reasonable macroeconomic stability, according to a study by Ernst&Young presented at the conference.
One recent major investment in St. Petersburg by a British company was the acquisition of the five-star Grand Hotel Europe by Orient Express hospitality chain.
"The city has a huge potential for tourism because of its historical treasures and the fact that St. Petersburg is a part of Europe," Adrian Constant, vice-president of Orient Express, said at the conference.
Constant pointed to the expansion by British Airways of its flights to St. Petersburg as another sign of booming trade arriving from the U.K.
As advice to foreign firms that were planning to bring their money to St. Petersburg, Constant named "good relations with the authorities" and a strategy of "employing local managers."
Support from city-based staff helped Orient Express understand the special risks involved in business-making in Russia, Constant said.
The U.K.'s ambassador to Russia, Anthony Brenton, said Britain's investment in St. Petersburg could grow because it did not yet merit the pace of development in the city has shown.
He was backed by the city's Governor Valentina Matviyenko.
"St. Petersburg is one of the most dynamic regions of the country, boasting an economic growth twice higher than that in the rest of Russia," Matviyenko said at the conference. Russia's economy rose by 6 percent in 2004.
President of the SPB Chamber of Industry and Commerce, Vladimir Katenyov, saw "profit chances" in the city as even higher than in Europe.
However, before the profit chance can be fully realized, the city has to surmount a number of major obstacles, Brenton said.
"An unclear legal situation and the absence of rules ... the actions of the country's tax authorities," as well as immigration problems, still hold back many potential investors," Brenton said.
The negative side should not be a barrier inhibiting further investment growth, Brenton said. He applauded Matviyenko's presence at the Russian Economic Forum in London last month as a first measure to painting a more realistic and positive picture about the city to foreign companies.
Recently the city has set a rigorous investment program into infrastructure, planning a toll roan under the Neva River, a city ring-road, upgrades of the St. Petersburg's sea- and airports, among others.
Such projects, as well as the development of the tourism sector with help from the Boston Consulting Group, will make the city a "window into Europe," Wood said.
"It is a city foreign investors can no longer ignore," he said.
TITLE: State to Revive Dam Building
PUBLISHER: Staff Writer
TEXT: The federal government will ask the European Investment Bank (EIB) for a 40 million euro ($51.4 million) loan to complete the construction of the St. Petersburg's dam by 2009, Interfax news agency reported Friday.
The cabinet of ministers agreed to undertake the loan after almost two years of deliberations, while the EIB board of directors had already approved the loan back in 2003.
All the documentation is prepared and the bank will transfer the funds upon the signing of a loan agreement, the government's press service said Friday, Interfax reported.
The dam, just one part of the city's $420 million anti-flood protection project, was designed to cut across a 26-kilometer corridor of the Neva bay. Construction of the dam originally started in 1980, but seven years later work halted due to ecological concerns and a lack of funding.
The project was re-animated in 1995, when several severe floods showed that as a half-finished construction the project exposed an even greater environmental danger to what there was previously.
After initial delays, the European Bank of Reconstruction and Development, or EBRD, agreed to be the largest financier of the project, offering a $245 million loan, followed by Severny investment fund with a $40 million loan.
The federal government will allocate $93 million in budget funds to the construction. Of those, $18 million will be spent this year.
TITLE: IN BRIEF
TEXT: Culture Needs Cash
ST. PETERSBURG (SPT) - St. Petersburg needs to invest 19 billion rubles ($684 million) of state funds in its historic and cultural monuments over the next four years to hold onto its cultural heritage, a state official said Friday.
The most immediate and costly renovation project in the city is the construction of the second stage of the Mariinsky Theater, which will require over 15 billion rubles ($540 million) of investments, said Kiril Karnovich of the ministry of mass communications and culture, Interfax reported.
Presenting the Culture of Russia program at a regional seminar in St. Petersburg, Karnovich said urgent city projects also included the reconstruction of the Aleksandriinsky Theater, construction of State Hermitage storage and archives facility, and the completion of restoration works in Gatchina and Pavlovsk park and palace ensembles.
"The program's goal is to stabilize the cultural situation of the city, to preserve the cultural heritage the way it is now until the government is able to install necessary legal and financial procedures to facilitate private investments and sponsorships for the historic objects," Karnovich said.
"Private investments are the key funds for financing renovation works. However, they require a sound financial and legal base that would provide tax breaks for charity and donations," he said.
Tender Results Voided
ST. PETERSBURG (SPT) - The city tender committee has voided the results of the bus routes tender, saying that it had not been carried out correctly, Interfax reported Friday.
The tender, that was supposed to determine a bus operator for several city routes, was canceled due to the contenders' inability to meet the tender conditions.
"The three companies that decided to participate in the tender, misunderstood the requirements for their bus fleets and purchased large buses unfit for commercial transportation," said Vladimir Barkanov, head of the city's budget and finance committee, as cited by Interfax.
The tender failure caused the City Hall to lose funds allocated by investors for the project, Barkanov said.
TITLE: Citigroup Analysts Start Work
PUBLISHER: The St. Petersburg Times
TEXT: Citigroup Smith Barney, the global financial services company, established an equity research unit in Russia, increasing its Russian presence, the company said Friday.
The research unit, formed by four newly appointed Russian analysts, will focus on metals and mining, utilities, oils, consumer and financials markets, Citigroup said in a statement.
"The Russian research operation strengthens our efforts to deliver a global research product in a local context," the statement said, adding that the new unit aims to serve both local institutional investors and Citigroup's global clientele.
The four equity research analysts appointed by Citigroup to the unit have moved across from Brunswick UBS, UFG and Aton financial services companies.
The new hires "represent a significant step in fulfilling the firm's plans to grow our research and equities business in Russia," said Paolo Zaniboni, the head of Citigroup's global equity research team.
Citigroup's Corporate and Investment Bank first opened in St. Petersburg in 1993, while its consumer banking division, Citibank, was launched in Moscow in 2002 and in St. Petersburg last year.
According to the company's information, Citigroup employs 1,200 people in Russia. Besides Citibank, the company's other major brand names include CitiFinancial, Primerica, Smith Barney, Banamex and Travelers Life and Annuity.
TITLE: IN BRIEF
TEXT: Russneft to Buy Stake
BUDAPEST (Bloomberg) - Russneft, a closely held Russian oil producer, will buy Yukos' 50 percent stake in a Siberian crude-oil production venture with Hungary's Mol Rt, the Hungarian company said in a stock-exchange statement.
Russneft, created in September 2002 by former Slavneft Chairman Mikhail Gutseryev with financial support from Swiss commodity trader Glencore International, will take over the stake from Aleria Management Inc., Clermon Systems Inc., Bremon Solutions Ltd. and SW Solution Inc., who now hold the former Yukos stake in the venture, Mol said.
Budapest-based Mol, which operates the oil field and handles distribution, started looking for a new partner after Yukos' main production unit was seized and sold by the government in December.
Russneft produces about 200,000 barrels of oil a day, focusing on crude production in western Siberia. It became Russia's fastest-growing oil company last year by acquiring other, smaller producers.
It plans to build a 5 million-ton oil terminal for $200 million on the Baltic Sea in Kaliningrad, Interfax reported on April 22. The Russian company also plans to buy the Grand chain of about 90 filling stations for at least $100 million, Vedomosti reported.
Siemens Wins Order
HANNOVER (Bloomberg) - Siemens, Germany's largest electronics company, won an order worth $265 million to expand mobile-phone networks in Russia, the Ukraine and Belarus.
Siemens won the order from OAO Mobile TeleSystems, Eastern Europe's largest mobile-phone company, the Munich-based company said in an e-mailed release Monday.
The order, which Siemens will complete this year, helps meet rising demand for mobile communication in the three countries, Siemens said.
Mazeikiu Net Surges
LONDON (Bloomberg) - Yukos' Lithuanian unit, Mazeikiu Nafta, said first-quarter profit rose 88 percent as high refining margins more than made up for declining exports of Russian crude through its Baltic Sea terminal.
Net income totaled 195.4 million litai, or $74.4 million according to the company's own currency conversion, compared with 104.2 million litai, or $37.9 million, a year earlier, Mazeikiu Nafta said Monday in an e-mailed statement from its headquarters in the Western Lithuanian town of Juodeikiai.
"Refining margins were higher than expected," General Director Nelson English said in the statement. "Furthermore, we refined more crude this year than we did over the same period last year and continued tight control over our expense budget."
Transneft in the Money
MOSCOW (Bloomberg) - Transneft, the country's state-owned oil pipeline operator, earned a profit of 3.3 billion rubles ($118 million) in the first quarter as it carried more oil, the company said Monday on its web site.
The monopoly didn't give comparative figures, say which accounting standard was used, or how much crude it shipped in the period.
The company ships about 97 percent of the oil pumped in Russia, the world's second-largest crude exporter behind Saudi Arabia. Russian oil companies have increased production by 50 percent since 1999, spurred by high oil prices.
Transneft shipped 450 million tons of oil last year, versus 416 million tons in 2003.
Menatep to Sue Rosneft
MOSCOW (Bloomberg) - Group Menatep, Yukos' majority shareholder, said it will sue a former Yukos unit in London next week to recover a $1.6 billion loan, Interfax reported, citing Menatep Managing Director Tim Osborne.
Menatep in February said it may call in the loan, which was guaranteed by Yuganskneftegaz last year, when the oil-producing unit was still controlled by Yukos.
Rosneft, Russia's state-run oil company, in December bought Yugansk for $9.3 billion, after the unit was seized and sold by the government to help collect on $28 billion in back taxes.
Between $800 million and $900 million is still owed on the loan, Osborne said Feb. 4.
30% Holding Disclosed
MOSCOW (Bloomberg) - Verkhnaya Salda Metallurgical Production Association's Chief Executive Vladislav Tetyukhin disclosed he owns 30 percent of the company, the world's biggest titanium producer, easing the metals maker's plans to sell shares abroad, Vedomosti reported, citing Tetyukhin.
Verkhnaya Salda, also known as VSMPO, sent a letter to Russia's Federal Antimonopoly Service with the disclosure, which may persuade the regulator to approve VSMPO's takeover of Avisma, the company's main raw-materials supplier, Vedomosti said.
VSMPO's other main owners are Chairman Vyacheslav Bresht and the Renova holding company, the newspaper said, citing Bresht.
The company last year said it planned to sell shares abroad in the fourth quarter of 2005.
TITLE: Rover Gets Russian Ray of Hope
PUBLISHER: Staff Writer
TEXT: The drowning saga of Britain's last national carmaker MG Rover may have a Russian happy-ending or an Iranian twist, depending on which set of newly emerged buyers win the rights to buy out the company.
Nikolai Smolensky, the "baby oligarch" whose money kept afloat U.K.-based sports car manufacturer TVR, and aluminum mogul Oleg Deripaska, have both made approaches to Rover's auditors Pricewaterhouse Coopers (PWC), British media reported.
Meanwhile, two of Iran's biggest automakers, Iran Khodro and SAIPA, are separately mulling the idea and either could come in with a financial rescue deal in the near future, the semi-official ISNA news agency cited Iraq's government official as saying Friday, Reuters reported.
Once Britain's most iconic brand, which conceived the Mini saloon and the Land Rover off-roader, Rover MG stopped production at its Longbridge plant in the U.K. on April 7 after the company ran into severe financial losses, and a government rescue loan deal worth $188 million fell through.
The loan was expected to engineer the company's tie-up with Shanghai Automotive Industry Com, yet the Chinese carmaker decided against a partnership with Rover upon learning the extent of the British firm's problems, British media reported.
The same worry has already put off a third Iranian bidder, Dastaan, which cancelled a trial shipment of Rover vehicles to Iran and further plans to assemble annually 150,000 Rover cars in Iran, ISNA said.
The Russian bidders for Rover already have auto production backgrounds, and their interest has not come as a complete surprise.
Smolensky, with a personal fortune estimated at $100 million, bought the flagging cult sport carmaker TVR last year for $50 million, although the company still ended 2004 with financial losses. His approach to PWC includes a full buy-out of Rover with a view to continue manufacturing a full range of Rover cars, The Observer newspaper reported.
As owner of Ruspromavto, the maker of Volga cars, metals tycoon Deripaska also has interests in vehicle production. Deputy chairman of Ruspromavto, Alexander Yushkevich, recently said that MG Rover was "potentially attractive for us," Gazeta daily reported.
Furthermore, sources at PWC told The Observer that Deripaska's accountants are checking through Rover's accounts to weigh up financial implications that a takeover of the U.K. carmaker would entail.
Separately, a spokesman for Iran Khodro said that the company was "considering [a buy-out of Rover]; it is just an option," Reuters reported.
The largest carmaker in the Middle East, Iran Khodro intends to manufacture annually 1 million cars by 2011 and has begun setting up factories in the Middle East, Africa and former Soviet states, Reuters said.
TITLE: Report: Kremlin Taking China's Lead
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Kremlin is moving toward a Chinese-style model of "directed capitalism," where the state controls key sectors while letting the market run loose in the rest of the economy, HSBC said in a report presented Thursday.
Yet the vastly different structures of the two economies, as well as Russia's failure to enforce its own laws, means that Moscow might be making a mistake by mimicking Beijing, the bank said.
Recent attempts by the Kremlin to consolidate control over strategic sectors and to direct investor decisions are reminiscent of Beijing's policy of occupying the commanding heights of the Chinese economy, said Philip Poole, head of emerging markets research at HSBC in London and the author of the report. "The market [in China] is tasked to allocate resources lower down the food chain," he said at a presentation.
Recent evidence for HSBC's thesis includes the merger of Gazprom and Rosneft; Rosneft's acquisition of Yukos' key production unit; and the government's veto of Siemens' bid for Siloviye Mashiny, or Power Machines.
Under the Chinese model, "certain key areas are controlled, and these are the areas the [Russian] government wants to control, too," said Poole.
In his state of the nation address Monday, President Vladimir Putin mentioned infrastructure, defense suppliers, and "strategic" natural resources as areas requiring government control.
But Poole warned that in China, growth relied on areas not controlled by the state - especially light industry, which is dependent to a large extent on exports and foreign direct investment.
In Russia, however, the Kremlin is seeking to control profitable sectors, such as oil, which have accounted for most of FDI and have been doing well without state interference, said Poole.
Moreover, Beijing has been able to convince foreign investors that its commitments are credible because it keeps its promises and enforces property rights better than Russia, Poole said.
In other words, the Chinese government's control over some sectors tends to be less unpredictable and more efficient than it has been in Russia, he said.
Poole's thesis met mixed reviews.
Yevgeny Nadorshin, an economist at Trust investment bank, said the scale of the control exercised by Beijing was incomparable to what Moscow was trying to finagle for itself. "The government in China occupies all the most important industries, keeps its eye on all the key corporations," Nadorshin said. The Kremlin, on the other hand, "would like to control only the best industries in terms of cash flows, and the only two sectors generating important cash flows are oil and gas."
Even in those sectors, Moscow has a long way to go to reach the level of control in China. "So far the economic policy of the [Russian] government has been far more liberal" than in China, said Vladimir Mau, head of the state Academy of the National Economy.
Mau noted that most of the oil and gas sector remains in private hands and that the government continues to sell off state assets. "Sure, there are political forces that are pushing towards a more planned economic model; but that happens in any society," he said.
TITLE: IN BRIEF
TEXT: Mayor's Wife Hotelier
MOSCOW (Bloomberg) - Yelena Baturina, the wife of Moscow Mayor Yuri Luzhkov and Russia's only female billionaire, plans to spend $2 billion building hotels and office complexes, Vedomosti said, citing the deputy head of her holding company, Inteko.
Inteko, which sold its cement unit last month for about $800 million, plans to build a national chain of 12 to 15 hotels and a million square meters of office space in Moscow, the newspaper cited Inteko Vice President Oleg Soloshchansky as saying. The company will finance the project with loans and some of the money from the sale of its cement unit, he said, Vedomosti reported.
Baturina owns 99 percent of Inteko, which had $1 billion in sales in 2004, Vedomosti said.
She is Russia's 29th richest person with a fortune of $1.4 billion, according to Forbes magazine.
President Delays Sale
MOSCOW (Bloomberg) - President Vladimir Putin delayed an order to sell Svyazinvest, the national telephone holding company, after the State Security Council opposed the sale, Vedomosti reported, citing unnamed government officials.
The council, which includes top law enforcement, intelligence, defense and interior affairs officials, decided at an April 26 meeting that the sale may hurt the country's defense, the newspaper reported.
The government has been planning to sell a stake of 75 percent minus one share in the company and give itself a right to veto any decisions of the company's new owner if that decision threatens national defense, the newspaper said.
The company controls the nation's seven regional fixed-line providers and the national long-distance provider. Russia has delayed the sale in past years partly on concern a single company would win the bid, boosting control over the country's network.
Stena to Build Tankers
MOSCOW (Bloomberg) - Stena Bulk, a Swedish shipping company, and Russia's state-owned OAO Sovcomflot may build ice-classed tankers worth $1 billion to handle oil exports from ports in the Baltic, TradeWinds reported.
Together they may order as many as 10 tankers with steel reinforcements allowing them to navigate through sea-ice broken up by icebreakers during the cold season, the newspaper said, citing Ulf Ryder, the head of Stena Bulk.
The vessels, which will be able to take on more than 200,000 tons of crude, will be the biggest ice-classed tankers ever, the newspaper said.
Demand for tankers able to navigate the Baltic Sea, which freezes over in winter, is set to rise as Russia boosts oil exports, Ryder told TradeWinds.
TITLE: Children of Elite Well-Placed for Winning Top Jobs
PUBLISHER: Staff Writer
TEXT: MOSCOW - In Soviet times, the children of Politburo members were often awarded plum jobs in foreign trade or as diplomats in Western countries. Today, the children of the country's new political elite are being hired at the commanding heights of Russian business.
For instance, 24-year-old Sergei Ivanov, the defense minister's son, was appointed vice president in January of Gazprombank, the banking arm of the state-controlled gas monopoly.
Pyotr Fradkov, 26, whose father is prime minister, was named deputy general director in July of the Vladivostok-based Far East Shipping Co., or FESCP, Russia's third-largest shipper.
Ilya Voloshin, 29, became vice president of Conversbank late last year. His father, the former Kremlin chief of staff, is chairman of the board of electricity monopoly Unified Energy Systems.
And Sergei Matviyenko, 31, the son of the St. Petersburg governor, was named senior vice president of state-owned banking giant Vneshtorgbank last November. They are just the most prominent examples of children of well-connected bureaucrats who have assumed high posts in some of the country's largest banks and companies.
Maxim Druzhinin, chairman of the board of Conversbank, defended the decision to hire Voloshin.
"Ilya's responsibilities have no relation to his father's activities," Druzhinin said. "Ilya Voloshin is characterized by professionalism, an elite education and extensive personal connections. Also, our friendship played a role in the decision to appoint him Conversbank's vice president."
A request to speak directly with Voloshin was denied.
Conversbank, with reported assets of $395 million, is part of Convers Group, which also owns 90 percent of Akademkhimbank and 50 percent of Lithuania's Snoras bank. The group has reported assets of $1.46 billion.
Alexei Mukhin, director of the Center for Political Information and author of numerous books on Kremlin political clans, said no one should be under any illusions as to why the children of state officials were attractive hires.
"I have no doubt that the gilded youth got excellent educations abroad, but it is their daddies' high government positions that are playing a definitive role in the decision to give them a job," Mukhin said.
"No matter where you look, you have children of state officials occupying well-paying jobs," he said. "It is a sign that the bureaucrats have become rather forward of late and are not afraid of something that might potentially compromise them."
Roland Nash, head of research at Renaissance Capital, said the practice had been going on for quite some time. Having close relations with the state can be "very useful" for a company in Russia, just as it can be beneficial for the state, he said.
Mukhin said that while there was nothing new or Russia-specific about this practice, it had been in the last year and a half that the country has seen a wave of such appointments, which he linked to a growing confidence of the new ruling class.
"After Putin came to power, it took the St. Petersburg clan several years to consolidate their power. They can now relatively easily find good jobs in key companies for their people. And who can you trust more than your relatives?" he said.
The younger Ivanov's father, Defense Minister Sergei Ivanov, a former KGB operative who is close to Putin, is among the siloviki supporters of state efforts to reinstate control over the energy sector. Gazprom, together with state oil company Rosneft, is key to these efforts.
The natural gas giant's banking arm, Gazprombank, has become involved in high-profile nuclear energy projects abroad. Last October, it acquired a 54 percent stake in Atomstroieksport, which is building nuclear plants in Iran, India and China.
Its key project is the $1 billion Bushehr nuclear plant in Iran. The United States has opposed the plant's construction, saying Russian know-how could help Tehran make nuclear weapons.
With $12.7 billion in assets as of late 2004, Gazprombank was the country's third-largest bank. It was fourth in terms of retail deposits with $1.1 billion.
The only comment a Gazprombank spokesman would make on the younger Sergei Ivanov's appointment was that "kinship was not among our hiring criteria." The spokesman said Ivanov did not want to speak with journalists.
Sergei Markov, a Kremlin-connected political analyst who heads the Institute of Political Studies, said there was no reason to believe that the appointments of the sons of prominent bureaucrats to high-ranking posts in business reflected a state attempt to strengthen its influence over the economy.
"For the most part these are sinecures, easy jobs that don't give them any real power or influence," Markov said. "This is one of the examples of specific bureaucrats capitalizing on their current positions, but I don't see any state strategy behind it."
The positions held by the younger generation tend to be that of vice president or deputy general director.
Mukhin said the appointment system was based on "mutual indebtedness" among members of various groups within the elite as they tried to secure good positions for their people.
"Before a relative's appointment takes place, there is a lengthy approval process that includes consultations between different groups to make sure nobody gets offended, including the man at the very top," he said.
"From a legal standpoint there is no violation of the law, but in reality it is used to control money flows," Mukhin said.
Andrei Piontkovsky, an independent political analyst, said something similar went on during the Soviet period, although many of the lucrative positions did not exist under socialism.
For example, General Secretary Leonid Brezhnev's son Yury was a deputy foreign trade minister, while his son-in-law Yury Churbanov made a breathtaking career that culminated in his appointment as a deputy interior minister.
While nepotism was an integral part of the Soviet system, it was after the collapse of the Soviet Union in 1991 that it began to flourish. This was particularly true in Central Asia, where members of presidents' extended families have come to occupy key positions in government and business.
Piontkovsky said that while in the West charges of nepotism could be detrimental to a bureaucrat's career, it is not so in Russia, since "we don't even have such a term as conflict of interests here."
"It is one of the symptoms of why it is difficult for foreign businessmen to do business here. Power and wealth are very concentrated in Russia, so it shouldn't be a surprise there are crossovers between the two," Renaissance Capital's Nash said.
TITLE: In Dictatorial Company
TEXT: Try, if you can, to picture the scene. A vast crowd in Red Square: Lenin's tomb and Stalin's memorial in the background. Soldiers march in goose step behind rolling tanks, and the air echoes with martial music, occasionally drowned out by the whine of fighter jets. On the reviewing stand, statesmen are gathered: Kim Jong Il, the dictator of North Korea, Alexander Lukashenko, the dictator of Belarus, Gen. Wojciech Jaruzelski, the former dictator of Poland - and U.S. President George W. Bush.
That description may sound fanciful or improbable. It is neither. On the contrary, that is more or less what will appear on your television screen May 9, when the 60th anniversary of the end of World War II is celebrated in Moscow. I have exaggerated only one detail: Although Kim Jong Il has been invited, his attendance has not yet been confirmed. But Jaruzelski is definitely coming, as are Lukashenko, Bush and several dozen other heads of state. President Vladimir Putin of Russia will preside.
Not every European country will be represented, however, because not everybody feels quite the same way about this particular date. In the Baltic states, for example, May 1945 marked the end of the war but also the beginning of nearly a half-century of Soviet occupation, during which one in 10 Balts were murdered or deported to concentration camps and exile villages. The thought of applauding the same Red Army veterans who helped "pacify" their countries after 1945 was too much for the Estonian and Lithuanian presidents, who have refused to attend. Although the Latvian president will attend the Moscow festivities, she's had to declare that she will use her trip to talk about the Soviet occupation. The president of Poland also has spent much of the past month justifying his decision to celebrate this particular anniversary in Moscow. By May 1945, after all, the leaders of what had been the Polish anti-Nazi resistance were already imprisoned in the Lubyanka, the KGB's most notorious Moscow prison.
The Russian president hasn't made anyone's trip easier. Recently he told a radio interviewer that the Soviet Union was justified in signing the Nazi-Soviet pact of 1939, in which the two totalitarian powers agreed to divide Poland and cede the Baltic states to the Soviet Union. The Soviet Union, Putin said, was within its rights to protect the "security of its western borders," as if annexing other countries were a legitimate form of border patrol. This week, Putin went on to describe the collapse of the Soviet Union - which resulted in the liberation of Eastern Europe - as the "greatest geopolitical catastrophe" of the 20th century, presumably ranking it higher than the war itself. His countrymen, in symbolic agreement, have commissioned a host of new Stalin statues around the country to commemorate the end of the war.
To its credit, the White House is trying to mitigate the impact of what is, at the very least, an extraordinarily bad photo opportunity and is nicely blossoming into a full-fledged controversy as well. Bush will go to Latvia before Moscow, to meet with the Baltic leaders - all now members of NATO and therefore U.S. allies - and afterward will visit the Georgian Republic, where a democratically elected president has recently taken power in the teeth of Russian opposition.
But if we are to avoid turning the anniversary of the end of World War II into a celebration of the triumph of Stalinism, more should be done. To begin with, the U.S. Congress should vote on a resolution proposed this month by Republic Representative John M. Shimkus of Illinois, which calls on Russia to condemn the Nazi-Soviet pact as well as the illegal annexation of the Baltic states. "The truth is a powerful weapon for healing, forgiving and reconciliation," the resolution states, in a burst of unusual congressional eloquence, "but its absence breeds distrust, fear and hostility."
Bush, too, should show that he understands what really happened in 1945. Every recent U.S. president has visited Auschwitz, and many have visited concentration camps in Germany, too. Perhaps it's time for American presidents to start a new tradition and pay their respects to the victims of Stalin. This is made difficult by the dearth of monuments in Moscow, but it isn't impossible. The president could, for example, lay a wreath at the stone that was brought from the Solovki Islands, the Soviet Union's first political prison camp, and placed just across from the Lubyanka itself. Or he could visit one of the mass-execution sites outside of town.
Of course these would be nothing more than purely symbolic gestures. But a war anniversary is a purely symbolic event. Each commemoration helps all of us remember what happened and why it happened, and each commemoration helps us draw relevant lessons for the future. To falsify the record - to commemorate the triumph of totalitarianism rather than its defeat - sends the wrong message to new and would-be democracies in Europe, the former Soviet Union and the rest of the world.
Anne Applebaum is a columnist for the Washington Post, where this comment first appeared.
TITLE: Two Messages: One Full of Obsfucation, the Other With Clear Goals
TEXT: Recently there have been two appeals by the authorities to the voters. One was President Vladimir Putin's annual address and the other is the program for the social and economic development of St. Petersburg for 2005 to 2008, which was recently adopted by City Hall.
My evaluation of Putin's address is very short. There is no point in going into the details. The words of the president have very little to do with the actions of the federal authorities, as we have known for the last five years. That's because the address has nothing concrete in it at all - there are general words about different subjects and they are not even linked in some unifying concept. Therefore I note only one significant feature - nearly all the analysts drew similar conclusions to the ones I made. What a low level Putin has sunk to when his main speech of the year is no longer taken seriously. It's like in the Brezhnev times.
St. Petersburg Governor Valentina Matviyenko has not sunk so low. Although, it must be said, that she is moving in the same direction. Not a single one of her reforms has yet yielded positive results that are visible to citizens. And scandals around her administration are growing. I refer to the removal of kiosks at public transport stops, the perverse reform of public transportation, attempts to interfere in the activities of retail chains, the alleged forced participation in household maintenance under German firm Dussmann at City Hall's initiative, and the allocation of construction sites without tenders.
Faith in Matviyenko has not yet run out. This is partly because she, unlike Putin, is clearly trying to improve St. Petersburgers' standard of living. You can appreciate this when you consider her public statements. When someone really wants something, they set concrete goals and take on concrete obligations expressed in figures and deadlines. It is in this way that the socio-economic program for the city's development differs from Putin's address.
The fundamental achievement of the program, prepared by the committee on economic development, industrial policy and trade, is that it is constructed on the principles of a business plan. The message of the program is that St. Petersburg should become a city with a European standard of living - this means a minimal European standard of living, that of the new EU members. The main goal is to achieve by the end of 2008 a number of indicative standards that cover the basic socio-economic aspects of life in the city: the quality of residents' lives; access to resources for the population, the state, business and their efficient use; effective, accessible and quality services for the population, the state and the city economy. The program presents a system of targeted socio-economic developments for the city and policies that the administration will take and the resources it will use to achieve them.
It follows that the city budget should be formed not by the recommendations of sector committees, as it has been to date, but by targeted indicators of the program. The standards set in the program can be used as indicators of the effectiveness of City Hall. Among them are the proportion of the population with average incomes living in families that are below the poverty line, the absolute numbers of those living on average incomes, gross regional product per capita, investment and base capital per capita and others. For all these indicators and standards, the program has set concrete figures, which are to be achieved by the end of 2008. These figures are the same as the minimal standards achieved in EU cities. Therefore in 2008 we will be able to see if City Hall has reached those targets and we will be able to judge how effective they have been.
If Matviyenko continues to make mistakes, the promised results will not be achieved and the fiasco will be evident to everyone. And City Hall will have deprived itself of being able to use demagoguery to fool us. What Matviyenko is doing is to her credit. She is behaving honestly.
Vladimir Gryaznevich is a political analyst with Expert Severo-Zapad magazine. His comment was first broadcast on Ekho Moskvy in St. Petersburg on Friday.
TITLE: Seoul Plays Down Missile Test
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea - South Korea on Monday played down the significance of a North Korean missile test the day before, saying it involved a short-range missile without nuclear capabilities and warning against linking the issue to a dispute over the North's atomic ambitions.
North Korea apparently test fired a missile into the Sea of Japan on Sunday, raising new fears about Pyongyang's nuclear intentions just days after a U.S. intelligence official said the secretive Stalinist state could arm a missile with a nuclear warhead.
"The missile that North Korea recently fired is a short-range missile and is far from the one that can carry a nuclear weapon," Deputy Foreign Minister Song Min-soon told South Korea's Yonhap news agency. "This isn't a case to be linked to the nuclear dispute."
Concerning reports that Washington warned allies that Pyongyang might be ready to carry out an underground nuclear test as early as June, Song said South Korea had not received such a warning. Song is South Korea's top envoy to the nuclear dispute.
Six-nation talks - involving the United States, two Koreas, Russia, China and Japan - aimed at persuading North Korea to give up its nuclear ambitions have been stalled since June.
South Korean officials have said they have not detected any signs that Pyongyang is preparing for a nuclear test.
News of the test launch first appeared in Japanese media, which cited U.S. military officials as having informed the Japanese and South Korean governments of Sunday's test launch, which took the missile about 65 miles off the North Korean coast.
Later, White House chief of staff Andrew Card said there was an apparent test.
"It appears that there was a test of a short-range missile by the North Koreans and it landed in the Sea of Japan. We're not surprised by this," Card said on CNN's Late Edition. "The North Koreans have tested their missiles before. They've had some failures."
In Japan, a Defense Agency official said on condition of anonymity Monday that Tokyo believes the missile only flew an extremely short distance and would not pose an immediate threat to Japan's national security.
The missile is believed to be a Russian-made SS21 with a range of 75 miles, or an upgraded version of the Silkworm, which has a 63-mile range, Japan's national Asahi newspaper said.
On Thursday, Vice Admiral Lowell Jacoby, director of the Defense Intelligence Agency, told the U.S. Senate that the North Koreans knew how to arm a missile with a nuclear weapon - a potentially significant advance for the communist state. He did not specify whether he was talking about a short-range or long-range missile.
North Korea has test fired short-range missiles many times. In 2003, it test fired short-range, land-to-ship missiles at least three times during a period of heightened tension over its nuclear weapons program.
Sunday's test, however, occurred at an especially worrisome time as the North appeared to have resumed efforts to move forward with its atomic weapons program.
TITLE: IN BRIEF
TEXT: New Pope Appears
VATICAN CITY (AP) - Pope Benedict XVI, embracing a cherished habit of his predecessor, appeared at his apartment's window on St. Peter's Square on Sunday for the first time in his papacy to bless tens of thousands of faithful and curious.
Looking vigorous and confident, Benedict cut a figure sharply contrasting with John Paul's last time at the studio window on March 30, when the ailing pontiff appeared in silent suffering three days before his death.
Some 50,000 pilgrims, tourists and Romans flocked to the square.
Car Bomb at Funeral
BAGHDAD, Iraq - A car bomb obliterated a tent packed with mourners at the funeral of a Kurdish official in northern Iraq on Sunday, killing 25 people and wounding more than 50 in the single deadliest attack since insurgents started bearing down on Iraq's newly named government late last week.
The blast capped four exceedingly violent days in which at least 116 people, including 11 Americans, were killed in a storm of bombings and ambushes blamed on Iraqi insurgents, believed largely populated by members of the disaffected Sunni Arab minority.
The Sunnis were dominant for decades under Saddam Hussein but were mainly shut out of the new government announced Thursday.
Iran Insists on Nukes
TEHRAN, Iran - Iran's supreme leader said Sunday his country's next elected president will not relinquish the right to pursue its nuclear program, which Washington claims is part of an effort to build atomic weapons.
Ayatollah Ali Khamenei's remarks in a speech in the southeastern city of Kerman follow Iran's announcement Saturday that it will resume some nuclear enrichment-related activities.
Khamenei's comments indicate an apparent firming of Iranian policy toward its nuclear program as the country prepares for June 17 elections.
Hassan's Killers Caught
BAGHDAD (Reuters) - U.S. and Iraqi forces raided homes on the outskirts of Baghdad on Sunday and detained several men believed to be linked to the death of British aid worker Margaret Hassan, who was kidnapped and killed late last year.
Hassan, a British national who headed CARE International in Iraq, was kidnapped last October. She was killed about a month later after appealing on video tapes made by her abductors for British forces to withdraw from Iraq. Her body was never found.
Runaway Bride Probed
DULUTH, Georgia - On what was to be her wedding day, Jennifer Wilbanks wore not a white veil but an orange towel over her head to prevent the media from taking her picture. Instead of being led down the aisle by her father, she was led by police to an airplane that flew the runaway bride home.
Now officials say the 32-year-old's cold feet may have gotten her in hot water. On Sunday, Gwinnett County District Attorney Danny Porter vowed to look into whether she violated the law by reporting a crime that didn't exist.
Wilbanks initially told authorities she was abducted while jogging but later disclosed she took a cross-country bus trip to Albuquerque, New Mexico, to avoid her lavish, 600-guest wedding.
TITLE: Chelsea Wins '05 Premier League
PUBLISHER: The Associated Press
TEXT: LONDON - Chelsea won its first English league title in 50 years Saturday, beating Bolton 2-0 behind two second-half goals by Frank Lampard.
Lampard's goals in the 60th and 76th minutes backed the goalkeeping of Petr Cech and gave Chelsea an unbeatable 14-point lead in the Premier League.
Second-place Arsenal, the defending champion, were due to play at West Bromwich Albion on Monday. But with only four games left it cannot catch Chelsea, whose only other league title was in 1955.
Manager Jose Mourinho's team has lost just one league game all season and has 88 points from 35 games, including 27 victories. After the final whistle, Mourinho began hugging his players while billionaire club owner Roman Abramovich applauded from the VIP box.
"Nobody speaking with fairness and sense can say we don't deserve this title," Mourinho said. "But the players deserve this more than anybody, and I'm very happy for the fans."
Chelsea also won the League Cup by beating Liverpool 3-2 in the final and is on course for a triple triumph in Mourinho's first season with the team. The Blues meet Liverpool at Anfield in the second-leg semifinal of the Champions League on Tuesday. The teams played to a scoreless tie in the first leg.
Lampard, whose goals made him Chelsea's top scorer this season, said he wanted to make up for a bad miss in Wednesday's Champions League semifinal against Liverpool.
TITLE: Russia Saved By Late Goals
In Austria
PUBLISHER: The Associated Press
TEXT: INNSBRUCK, Austria - Russia and defending champion Canada struggled Saturday in winning their opening games at the ice hockey world championships.
Canada, trying to win a third straight world title for the first time since 1950-52, held off Latvia 6-4 behind three goals by Rick Nash at Innsbruck's Olympiahalle, site of two Olympic tournaments.
"Anyone can see that we can play a lot better," said Canadian defenseman Sheldon Souray, who played in Sweden this season during the NHL lockout.
Russia, which defeated Sweden in last week's European Hockey Tour final, beat Austria 4-2 after the host nation tied the score midway through the last period in Vienna.
The United States, bronze-medal winners at last year's worlds, faces Slovenia on Sunday. The 16-team tournament ends May 15 in Vienna.
Canada led 5-2 after two periods and appeared headed to an easy victory. But Janis Sprukts and Karlis Skrastins beat Canadian goalie Martin Brodeur in a 2:44 span midway through the second period to get Latvia within a goal and excite its drum-beating fans.
"We have a good team in this locker room so I wasn't worried," said Joe Thornton, who scored one of three power-play goals for Canada in the second period. "Even when the score was 5-4, you can't get nervous with the team we've got. We knew we were going to get the next goal."
Nash, who played in Switzerland this season, completed his hat trick with less than six minutes left, tapping in a low, soft shot past NHL goalie Arturs Irbe, who replaced starter Edgars Masalskis after Canada took a 5-2 lead.
"We're not where we want to be yet," Canada coach Marc Habscheid said. "We forced a lot of pucks, we created some turnovers for the Latvians and they jumped on the opportunities."
"We're happy we got the win. We learned a few things tonight," he added. "We have to clean up certain areas of our game."
Alexander Ovechkin, Alexander Kharitonov, Alexei Kovalev and Ilya Kovalchuk scored for Russia.
"We had a good start into the match, but failed to close the game early," Russian coach Vladimir Krikunov said. "Nonetheless, we got the win and that's all that matters. After all, our aim is to win gold and that is only possible by defeating everyone in our way."
Ovechkin's opener was matched by a power-play goal from Oliver Setzinger in the first period before Kharitonov put his team ahead again. Early in the third, Raimund Divis surprised Russian goalie Maxim Sokolov with a shot from a sharp angle to make it 2-2.
Two late goals saved Russia. With less than four minutes left, Kovalev converted a break to give Russia the lead again and Kovalchuk added an empty-netter in the final seconds.
Despite losing, Austria received a standing ovation from a capacity crowd of nearly 10,000.
"It always looks unlucky to miss a tie if you come so close," Austrian coach Herbert Poeck said. "But the Russians dominated the first half of the game and so I was very happy with the way my team came back."
TITLE: Zenit Coach Rues Ref's Penalty Calls
PUBLISHER: Combined Reports
TEXT: FC Zenit St Petersburg slipped in the Russian Premier League to fourth place after a controversial 1-1 home draw on Saturday at Petrovsky Stadium against 2004 champion Lokomotiv Moscow.
Zenit was denied two penalty claims and fell behind to a hotly-disputed spot kick. Zenit coach Vlastimil Petrzela was despondent about the referee's decisions at a post-match news conference.
"All that I can say is that Zenit will never be champion," the Czech coach said in comments posted at www.fc-zenit.ru.
Zenit supporters have claimed that referees routinely favor Moscow teams which have often gone on to win the championship.
In other games at the weekend, UEFA Cup semifinalist CSKA Moscow went top after Argentine striker Hector Bracamonte's 11th-minute goal gave them a 1-0 home win over Alania Vladikavkaz. Spartak won a decisive 3-0 victory over Terek Grozny to lift them up to second place, a point behind the leaders.
(SPT, Reuters)