SOURCE: The St. Petersburg Times
DATE: Issue #1082 (48), Tuesday, June 28, 2005
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TITLE: Agency To Check Forests
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: The Federal Forestry Agency has begun inspecting whether Leningrad Oblast land that forms a green belt around St. Petersburg is being used legally, the Natural Resources Ministry said last week.
The land, which is protected, is highly attractive as a location for Russian country houses or dachas. Checks in the analogous area around Moscow revealed extensive construction in that area and officials talked of the necessity of bulldozing some of the buildings. 
The forestry agency is to check landowners in several oblast districts, including the Sosnovsky, Kirovasky and Lomonosovsky forests, to ensure that land use complies with the law. No state or regional body has monitored the land use in those areas for some years, the ministry said in a statement.
Inspectors have already found that several companies have built storage facilities and transport bases without having any permission from the responsible authorities, such as Rostekhnokompleks or Service Plus.
The companies also dumped waste in the forests without permission, the ministry said.
“We want restore the state’s management of the forest, to bolster the service guarding it, to protect and regenerate forest in the interests of the residents of the region, but not to rent land to commercial organizations,” the ministry statement quoted Valery Roshchupkin, as saying.
Inspections around Moscow revealed that at least 1,500 hectares of land in protected forestry areas had been illegally occupied and built on. Some landowners, among them famous Russian celebrities, were forced to remove their facilities and cottages from within zones, where building is forbidden — partly to protect the water catchment for Moscow city’s drinking water supply.
One of the celebrities was singer Alla Pugachyova, who in February was forced to remove a sauna building.
“We met her and told some details of the Water Code, about articles No. 111 and 112. Alla Pugachyova undertook obligations to fulfill an order of the Natural Resources Ministry and before June 1 to move the sauna building,” the media quoted Oleg Mitvol, deputy head of the Federal Agency for Supervision of the Environment, as saying in February.
“The removal would be quite complicated in winter. Taking into account the merits of the singer, she was allowed to remove the sauna house before summer, at her own expense,” he said.
Ministry officials had no information Friday if Pugachyova had fulfilled her side of this “gentlemen’s agreement,” but said this the singer’s was just one of thousands of cases of illegal construction in forests located in nature protection zones. Only four such sites  were demolished by their owners in 2004 following demands issued by the ministry,  officials said.
“It is understandable that it will be impossible to remove all the sites that were built illegally,” said Roman Shipin, a representative at the ministry, said Friday in a telephone interview from Moscow. “The state could introduce an amnesty for these owners after they pay all the fines and register their real estate in accordance with the law.” 
“We have already made one important achievement,” he added. “People have started to comply with the law.”
Inspectors often receive a hostile reception from the occupiers of land as has happened this month when officials from the Moscow region prosecutor’s office officials last Monday tried to prevent illegal felling of trees in the region’s Istrinsky district. 
Dogs were unleashed against the inspectors. Local company Business Line tried to chop out six hectares of forest in the M-2 area, a Moscow-based real estate paper reported last week.
“The incident really looks like outrageous barbarity, of such a kind that I can’t recall,” Mitvol said.
“The representatives of the prosecutor’s office were wearing their uniforms and were on their duty, but were practically blocked and faced, with no exaggeration, a real threat to their lives,” he said.

TITLE: Putin Woos German, U.S. Execs
AUTHOR: By Denis Maternovsky
PUBLISHER: Staff Writer
TEXT: In an unprecedented charm offensive, President Vladimir Putin met over the weekend with groups of top business leaders from the United States and Germany in an effort to reassure them of Russia’s commitment to free market economics.
At both meetings — the first time in his presidency Putin has given an audience to such high-profile groups of foreign business leaders — Putin called for increased foreign investment into Russia, promised to safeguard investors’ rights and held out the possibility of more energy exports to Europe and the United States.
On Saturday, Putin met with a group of leading American executives, including Citigroup’s Sanford Weill, News Corp.’s Rupert Murdoch, ConocoPhilips’s James Mulva and IBM’s Samuel Palmisano. On Sunday, Putin met with senior German executives from leading companies, including Siemens, E.ON, ThyssenKrupp, Metro Group, EADS and BASF.
Both meetings were held at the lavishly reconstructed 18th-century Konstanin Palace near St. Petersburg, which underwent a facelift for the city’s 300th anniversary celebrations in 2003. 
“We will continue to work to improve Russia’s investment climate,” Putin told the American executives during the part of Saturday’s meeting that was open to reporters. “I hope that in a few years’ time, Russia will turn from a net exporter of capital into a net importer.”
On Sunday, Putin told the Germans that the government was encouraging foreign investment by “the further de-bureaucratization of the economy, improvement of anti-monopoly policies, strengthening of ownership rights and more well-defined regulation of taxation bodies’ activities.” 
Putin also said the state would set clear rules for foreign investors in strategic sectors. His comments appeared to signal that Siemens’ bid to buy into engineering company Siloviye Mashiny, or Power Machines, could yet go ahead, as long as the German giant took a minority stake. 
In April, the Federal Anti-Monopoly Service rejected Siemens’ bid to buy 70 percent of Power Machines on national security grounds, despite the deal’s reportedly having secured Putin’s blessing last year. 
Economic Development and Trade Minister German Gref, who was at the St. Petersburg meetings and has lobbied for the Siemens-Power Machines deal, said Sunday that there was “no obstacle to this deal being completed, as long as it is without the acquisition of a controlling stake.”
While the recent acquisition by Rosneft of Yukos’s former main production unit, Yuganskneftegaz, and the jailing of Yukos boss Mikhail Khodorkovsky have raised fears that the Kremlin is aiming to re-establish strict state control over the oil sector, the Yukos affair was not discussed Saturday, Citigroup chairman Sanford Weill told reporters. 
“If we understood more about the rules of the road, if we understood more about how the court system might work, and how the taxation might work, we could encourage a lot more investment,” said Weill, who proposed the meeting, The Associated Press reported. 
Putin told the American executives that U.S.-Russian trade was “quite insignificant,” and said he hoped it would “double in the next few years.” 
In 2004, Russia’s trade with the United States stood at about $15 billion, leaving it outside the top 20 U.S. trade partners. 
“With no additional investment, the United States could import 50 million tons of Russian oil per year,” Putin said. “We are absolutely certain this would be a very serious factor that would improve the stability of the world, as well as the American, economy.” 
Last year, 7 million tons of Russian oil were exported to the United States. 
Analysts, however, described Putin’s comments as more symbolic of a wish to rebuild bridges than of a worked-out policy.
“It represents an attempt to rebuild energy cooperation that was much talked about a couple of years ago but has been in the background lately,” said Stephen Dashevsky, head of research at Aton Capital. “There is no physical capacity to increase exports by this much yet.”
Chris Weafer, chief strategist at Alfa Bank, said Putin’s announcement was likely an invitation for U.S. oil majors to join large pipeline projects in the country.
“Russia is very keen to be admitted to the World Trade Organization this year, and it is becoming increasingly clear that it is trading off energy cooperation for WTO accession,” he said.
On Sunday, Putin also pursued the energy theme, saying that the capacity of the North European gas pipeline, a joint project between Russia’s Gazprom and Germany’s BASF, could be as much as 55 billion cubic meters of gas per year.
“There are plans to boost its capacity to 55 bcm, to build two branches,” Putin said. “By 2010 one of these branches should be ready to export 27 bcm to Europe.”
Germany is already Russia’s largest trading partner, with bilateral trade standing at 31.2 billion euros ($38 billion) in 2004, a leap of 18.3 percent on the year before. 
“Relations between Germany and Russia have never been at a higher level,” Klaus Mangold, chairman of the East Committee of the German Economy, told Putin. “No matter what happens in Europe or the world, German economic circles are interested in supporting stable relations with Russia.”
Besides Putin, the Russian government was represented at both meetings by Gref, Kremlin chief of staff Dmitry Medvedev, presidential aide Sergei Prikhodko and Energy Minister Viktor Khristenko.
While Putin has met with foreign business leaders on several occasions during his five years in office, the weekend’s meetings were unprecedented in their format and for the inclusion of some of the world’s most influential business leaders.

TITLE: Report: Prosecutors End Murder Investigation
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The city prosecutor’s office has completed the investigation of the apparently racially motivated murder of Tajik girl Khursheda Sultanova, nine, early last year, online newspaper Fontanka.ru reported Monday.
The report cited Alexei Mayakov, head of the serious investigations department at the prosecutor’s office, but the office had no comment Monday. 
Yelena Ordynskaya, senior aide to the city’s prosecutor, said no information about the case can be officially released to the press yet.  
Fontanka.ru said the case has been sent to the St. Petersburg city court and that eight defendants, aged between 15 and 21 years old, have been charged with assaulting Khursheda and her family. Only one of these teenagers is facing murder charges, the report said. 
Four of the defendants are juveniles and were released from custody until the trial, it added. 
The charges other than the murder charge are of assault, a sign prosecutors are taking the attackers’ crime more seriously by not bringing the lesser of “hooliganism.” 
To the outrage of human rights advocates the police often bring charges of hooliganism when attacks occur against non-Slavs, even though the victims clearly see racial motivation.
Khursheda’s brutal murder by a group of drunken teenagers in February 2004, drew nationwide attention. The group attacked the girl, her father Yusuf Sultanov and her cousin Alabir Sultanov, 11, 
about 9 p.m. on Feb. 9 2004 in the center of St. Petersburg. The family was on the way home after a walk in the Yusupov Garden.
When the family entered the courtyard near their home they were attacked by a gang of youths armed with knives, knuckledusters, chains and sticks. 
During the assault, the attackers reportedly shouted nationalist slogans at the victims, such as “Russia for Russians.” Khursheda, who was stabbed 11 times in the chest, stomach and arms, died at the scene from severe blood loss. 
Yusuf Sultanov received head injuries, while Alabir Sultanov, who managed to hide under a car to avoid further injury, also suffered head injuries. 
International human rights advocates and experts say discrimination on grounds of race and nationality is a reality for many members of ethnic or national minority groups in Russia. 
“Victims whose cases have come to our attention are predominantly students, asylum-seekers and refugees from Africa, but also include citizens of the Russian Federation — including ethnic Chechens and Jews — as well as people from the south Caucasus, from South, Southeast and Central Asia, from the Middle East and from Latin America,” reads the 2005 human rights report of Amnesty International published on the organization’s web site.
“Any investigations into racist attacks were often ineffective and led to lesser charges of hooliganism rather than more serious race-hate charges.” 
Sultanova’s murder is mentioned on the Amnesty International web site next to the murder of Nikolai Girenko, a prominent human rights defender and an expert on racism and discrimination in Russia, who was shot dead on June 19, 2004, through the door of his apartment in St. Petersburg, in a list of the worst racially motivated crimes in the country.
Akif Gasymov, executive director of Azerbaijan’s national cultural group in St. Petersburg, said human rights advocates tend to exaggerate the problem.
“Yes, of course, crime and violence do exist in the city but I think qualifying domestic violence as ethnic intolerance is wrong,” Gasymov said. “Over the past year, the group received three complaints from Azeri citizens about being abused or assaulted by the locals, which we forwarded to the police. The police were very attentive and carried out a fully satisfying investigation of every case.”
Yuly Rybakov, a prominent city’s human rights advocate, believes some Russians see aggression toward foreigners as a kind of a defense. 
“With the population plummeting so fast, it is soon going to be difficult for Russians to control their country’s huge territory,” he said.

TITLE: Vershbow Exits on High Note
PUBLISHER: The St. Petersburg Times
TEXT: Relations between Russian and the United States continue to develop positively, Alexander Vershbow, the retiring U.S. Ambassador to Moscow, said Friday at a farewell news conference in St. Petersburg.
“I’m looking toward the future of our countries with optimism,” he said. “I think that over time anti-American attitudes will die down.”
Vershbow, who took up his post in July 2001, is to be replaced by career diplomat William Burns, next month, Interfax reported last week, adding that Burns’ appointment was conditional on Senate approval.  
Vershbow promised that the next ambassador will continue to support the development of civil society in Russia, “a U.S. policy that is not dependent on the ambassador’s personality.”
While Vershbow expressed regret that in the last two years the pace of reform in Russia had slowed, that the State has interfered too much in the market, and that corruption has raged, “a lot of American companies still believe in prospects of Russian market,” he said. 
Expressing his general satisfaction with the results of his term in office, Vershbow said one thing he regretted was that a new site for the U.S. consulate general in St. Petersburg has not been found. 
The existing building doesn’t meet international security standards, he said. The search for a new site had been somewhat hampered by the Russian Foreign Ministry, but he was “sure that they will find positive decision in the near future.”

TITLE: Report: Police Blamed For Missing Journalist
AUTHOR: By Vladimir Kovalev
PUBLISHER: The St. Petersburg Times
TEXT: A year after the mysterious disappearance of Maxim Maximov, an investigative journalist with St. Petersburg weekly magazine Gorod, a news report on Monday implicated three police officers in his murder.
The city police press office confirmed that the report was true, but declined to make any further comment.
The journalist was killed in an assassination allegedly organized by three employees of the city criminal police department, Interfax reported Monday, quoting an anonymous source in the Northwest Prosecutor’s Office.
The city prosecutor’s office had no comment on the report. 
The Interfax report said that in June, Mikhail Smirnov, deputy head of the 6th department of the police responsible for the investigation of corruption within the state power structures and two investigators, Lev Pyatov and Andrei Bochurov, were detained on charges of falsifying evidence materials in several criminal cases.
“The detainees are also suspected of organizing the assassination of the journalist Maxim Maximov, which they have assigned to two contract killers. According to preliminary information, the motive for the assassination was the professional activity of the journalist, who obtained information about the illegal activity of the police employees and wanted to publish it,” Interfax cited the source as saying.
The journalist disappeared without trace on June 29, 2004 after making a phone call from his cell phone about 8 p.m. in the central city. His car was found a month later parked by Nakhodka store near St. Petersburg Hotel, but no further trace of Maximov was found.
The city’s Agency for Journalistic Investigation, which cooperated closely with Maximov in the years before he disappeared, conducted its own investigation and on Monday said all of the facts relating to his demise have been revealed.
“We offered a reward to anyone who had any information about Maxim. This way we have found his car (but unfortunately this did not help the investigation). We walked through all the offices in the area where the car was found. We examined the route that Maxim took on that last day, minute-by-minute. We found who Maxim was talking to that day, what he wrote in his computer, and to whom,” the agency said on its web site Fontanka.ru on Monday.
“Now we know everything … Today we know for certain that Maxim did not just disappear. He was killed. He was killed in a cynical way, in a premeditated assassination. He was killed because of his professional activity in the very city center because of an investigation he was conducting one year ago,” the agency said in an editorial. 
“Today we know what has happened in detail — who, when and for what reason. We have known the names of the beasts for quite a while. But we won’t publish them in order to get 100-percent evidence so that the killers do not escape without punishment. We believe there are another two weeks until the criminals face official charges. Then we will tell everything.”

TITLE: City Tap Water ‘Clean Enough to Drink’
AUTHOR: By Inna Adamova
PUBLISHER: The St. Petersburg Times
TEXT: St. Petersburg tap water is clean enough to drink, but residents are still advised to filter it, experts said Thursday at a roundtable meeting.
“The water meets all sanitary and epidemic standards,” Kirill Fridman, chief doctor of the city’s Hygiene and Epidemic Center, said  at the round table on water purity at the Agency for Business News.
Tap water is good for using in different equipment because it is soft, but “it has low amounts of dissolved calcium, magnesium and fluoride and has a range of health consequences,” Fridman said.
The water makes hair weaker and leads to toothache. It lowers the risk of kidney disease, but raises the risk of heart disease. Also the low amounts of calcium and potassium are bad for heart too, he added.
Eighty percent of residents drink tap water, which they were advised to boil for at least 7 minutes. Still better is to use a water filter, as 51 percent of residents do, the roundtable was told.
Anatoly Kinebas, first deputy general director of city water utility Vodokanal, said that all drinking water in the city is treated with chlorine, but that this does not kill all bacteria. Additional ultraviolet radiation treatment is performed on water in the central, Vasileostrovsky and Admiralteisky districts and on the Petrogradskaya Side.
Eventually all drinking water will be treated this way, he said.
However, tap water may still be dirty because of the poor condition of water pipes. Vodokanal is also replacing pipes, with 52 kilometers of new pipes installed last year and an even greater amount due for replacement this year, Kinebas said.
“The city’s water supply comes from the Neva River, which is heavily polluted by industry along its banks,” Fridman said.
Kinebas said that in the long term the source of the city’s drinking water will be taken from Lake Ladoga, which is polluted, but much cleaner because the pollution sinks to the bottom of the lake.

o Vodokanal and its general director, Felix Karmazinov, have won the 2005 Swedish Baltic Sea Water Award, which is given for its direct and practical efforts that contribute to improved water quality in the Baltic Sea. 
A statement from the Swedish General Consulate last week noted that Vodokanal’s construction of the city’s Southwest Wastewater Treatment Plant, which will be finished in September 2005. 
“When it is finished, 1.5 million citizens will no longer on a daily basis send 700,000 cubic meters of untreated wastewater straight into the Neva River and from there, the Gulf of Finland and thus the Baltic Sea,” the statement said.
Karmazinov and Vodokanal “have fostered an understanding that the city’s wastewater must be cleaned” and they are “role models in the international efforts to achieve a cleaner Baltic Sea through sound wastewater treatment solutions,” the nominating committee said. 
“The completion of the treatment plant will not solve the whole problem of eutrophication in the Baltic Sea, but it will be important toward improving its water quality,” the statement quoted the award committee as saying.
The prize valued at about $13,000 will be awarded next month in Stockholm during World Water Week.

TITLE: Russia Quits Estonian Border Pact
PUBLISHER: Reuters
TEXT: MOSCOW — Russia told Estonia on Monday it was pulling out of a border treaty because it did not like the way the Baltic country’s parliament had ratified the deal, news agencies quoted the Foreign Ministry as saying. 
The latest move in a wrangle that has been going on for years reflected Russia’s poor relations with the Baltics and could complicate a wider rapprochement between Moscow and the enlarged European Union to which Estonia, Latvia and Lithuania now belong. 
Itar-Tass news agency quoted a Foreign Ministry spokesman as saying Moscow had told the Estonians it was taking steps to “revoke international commitments” undertaken in the treaty signed on May 18. 
The reason for the Russian decision was that the Estonian parliament during ratification on June 20 had inserted “unacceptable clauses,” the spokesman said. 
“This will mean that the issue of the international-legal formalization of the territorial delineation will remain open and will require new negotiations,” Tass quoted him as saying. Russia took offense to clauses contained in a preamble to the Estonian ratification bill, which contained indirect references to Soviet occupation.  The Baltic country was occupied by Soviet forces in 1940. 

TITLE: IN BRIEF
TEXT: Memorial to Prisoners
PETROZAVODSK (SPT) — A memorial plaque dedicated to prisoners of Finnish concentration camps during World War II has been unveiled on the territory of the former camp No. 6 in the Perevalka district of Petrozavodsk, Interfax reported Friday.
There were more than 25,000 prisoners in Finnish concentration camps between 1941 and 1944, including up to 7,000 people who died of hunger, illnesses or were killed by Finnish soldiers, Interfax cited Klavdiya Nyuppiyeva, head of the Union of Former Child Prisoners in Karelia, as saying.
About 6,000 former prisoners live in Karelia, including about 3,000 in the capital of Petrozavodsk, Nyuppiyeva said.

Site Mooted for Statue
ST. PETERSBURG (SPT) — A statue of Peter the Great that was presented to St. Petersburg by the controversial artist Zurab Tsereteli maybe installed in the Oreshek fortress outside of the city, Interfax reported Friday, quoting the St. Petersburg Public Council for the Installation of New Monuments.
“The 6-meter-tall statue would look excellent on the shore in a spot where Lake Ladoga flows into Neva River,” Interfax cited Vladimir Khodyrev, head of the council, as saying.
The decision to move the statue outside of the city was taken after the public council declined a propose to install it in Moskovsky district.
“It would be impossible to install the statute in an old city district and it would look rather silly in a new district,” Khodyrev said.

Pushkin Anniversary
ST. PETERSBURG (SPT) — The satellite town of Pushkin, formerly the summer residence of the Tsars and known as Tsarskoye Selo, celebrated its 295th anniversary on Saturday with a range of carnivals and bright events, Interfax reported.
The celebration started at noon on a square by the railway station with different carnival groups that represented different courts.

Russian Film Wins
MOSCOW (SPT) — “Dreaming of Space” made by Russian movie director Alexei Uchitel has become a winner at the 27th Moscow International Movie festival, Interfax reported on Monday.
A special prize was given for the Finnish movie “Frozen Land,” by director Aku Loihimies. Danish movie “Dear Wendy,” by Thomas Vinterberg was second. The prize for best male actor went to Iranian Hamid Faranedjad for his role in the movie “Left Foot Forward on the Beat.” Vesela Kazakova got the prize for best female actor for her role in Bulgarian movie “Stolen Eyes.”  a French actress Jeanne Moreau won a lifetime achievement award for her dedication to the Stanislavsky method of acting.

Professor Stabbed
ST. PETERSBURG (SPT) — Criminals on Friday attacked Vladimir Kozlovsky, 75, a professor at the St. Petersburg Technical University, the Agency for Journalistic Investigation reported.
The professor was stabbed with a knife after he went to walk his dog on Grazhdansky Prospekt early Friday morning. 
The attack occurred after Kozlovsky had apparently chastised one young person for his bad behavior.

TITLE: Bill May Let Putin Serve for a Third Term
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: MOSCOW — The State Duma will vote this week on a United Russia-sponsored amendment to the electoral law that might allow President Vladimir Putin to serve a third term. The bill, however, appears to be more of a show of loyalty to the Kremlin than a serious attempt to extend Putin’s rule.
Under the amendment, popularly elected leaders in the executive branch of power — the president and mayors — could run for a third term if early elections were held before their second term expired and a court found the early election invalid and ordered a new vote.
The bill could allow Putin to run for a third term if he stepped down before the end of his second term in spring 2008 and a subsequent early election was declared invalid. A presidential election can be declared invalid if voter turnout is less than 50 percent or if more voters pick “against all” than any candidate.
Vladimir Pligin, the chairman of the Constitution and State Affairs Committee, stressed Friday that the amendment was introduced “to regulate the elections of mayors who resign before their terms end” and is not intended to help Putin retain power, Interfax reported. He said the wording of the amendment needed to be edited to avoid misunderstanding by the media.
The bill, introduced by United Russia Deputy Alexander Moskalets on Thursday, will be included in a raft of electoral legislation that the Duma will vote on in a second reading Wednesday. The legislation, which was passed in a first reading in May, would prohibit parties from creating electoral blocs, make it easier to ban a party or a candidate from running, and restrict media coverage of elections and referendums.
Putin has repeatedly ruled out the possibility that he might seek a third term. However, he half-jokingly hinted during a trip to Germany in April that he might run in 2012.
The Kremlin press service declined to comment on the matter Friday.
Opposition Duma deputies and political analysts said the amendment would probably not open the door to a third term for Putin.
“This amendment is not enough. To stay in power, Putin needs to change the Constitution, which says presidents cannot run for a third term,” said Yury Korgunyuk, a political analyst with the Indem think tank. “But the president is well aware that he would lose face with the international community by changing the Constitution, and he does not want that.” 
Communist Deputy Sergei Reshulsky said United Russia deputies came up with the initiative to show their loyalty to the Kremlin. “People like Moskalets are so afraid of losing their posts without Putin that they are now looking for ways to get this power behind them,” Reshulsky said.
He added: “Putin has said many times that he won’t stay for a third term. We hope that he keeps his word.”
A spokesman for the Rodina party, Sergei Butin, dismissed the bill as “a sign of United Russia’s political weakness.”
“They know they are unlikely to garner as many votes as they got in the last Duma elections,” he said. “They are looking for a way to stay in power, and they are using the president.”
In a separate move that also appeared to be a show of loyalty for Putin, Pavel Borodin, the secretary of the nascent Russia-Belarus Union, said Thursday that Putin should become the president of a formal union between the two countries, Nezavisimaya Gazeta reported.
Borodin said an election for the post would likely be held at the end of next year.

TITLE: Berlin Alters Migrant Law
PUBLISHER: Reuters
TEXT: BERLIN — Germany decided Friday to tighten immigration laws for Jews from the former Soviet Union as part of attempts to reduce the burden on existing Jewish communities that often give financial support to the newcomers.
Germany’s 16 state interior ministers have agreed the new legislation, which would allow Jews to immigrate if they were in a position to support themselves, had a basic knowledge of German and the support of a Jewish community.
The law makes exceptions for those intending to reunite with their families and for Jews from former Soviet Baltic states.
Germany began offering Soviet Jews the right to settle in the country 15 years ago to rebuild its own Jewish population, devastated by the Nazi regime, and to atone for the Holocaust. 
Some 190,000 Jews had taken up the offer by the end of 2003.

TITLE: Grozny Official Declares 300,000 Killed in Wars
PUBLISHER: The Associated Press
TEXT: GROZNY, Russia — About 300,000 people have been killed during two wars in Chechnya over the past decade, a senior official in the province’s Moscow-backed government said Sunday. 
Dukvakha Abdurakhmanov, a deputy prime minister in the Kremlin-controlled Chechen civilian administration, also said that more than 200,000 people have gone missing. Abdurakhmanov’s claim could not be independently verified. 
The Russian government has not revealed any casualties among civilians in Chechnya during the two wars in the region since 1994. 
Casualty estimates vary widely, but many say about 80,000 civilians — 40 percent of them children — died in the first Chechen war. Countless more have been killed since the conflict exploded again in 1999. 
Abdurakhmanov made the statement during a visit to the neighboring province of Dagestan, where more than 1,100 ethnic Avar residents of a Chechen village fled after one villager was killed and 11 others went missing in a raid they blamed on Chechen security forces. 
Abdurakhmanov and other Chechen officials were trying to persuade the refugees to return home, arguing that Chechens had suffered much greater losses throughout the conflict. The high casualty figures Abdurakhmanov cited could be part of a pitch to push the reluctant residents of the village to come back rather than a product of a thorough calculation. 
“You lost 11 people, while every resident of Chechnya has scores of relatives who have been killed or gone missing,” Abdurakhmanov told the village’s residents. 
Russian forces pulled out in 1996 after a disastrous 20-month battle with separatist rebels, leaving Chechnya de facto independent. The Russian army swept in again in 1999 after Chechnya-based fighters made incursions into Dagestan and after some 300 people died in apartment bombings blamed on the separatists.

TITLE: Russian News Channel Inches Way Forward
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW — State media holding VGTRK reiterated Thursday that the launch of a 24-hour Russian-language news channel was a priority and said it hoped to win a tender to operate a new youth-oriented channel.
VGTRK head Oleg Dobrodeyev told a Federation Council committee meeting that the news channel would be launched under the auspices of the “Vesti” news program on Rossia television, Interfax reported. He did not provide any details.
VGTRK, or the All-Russia State Television and Radio Co., controls Rossia as well as the RTR-Planeta, Sport and Kultura television channels. It also owns the Radio Rossii and Mayak radio stations. Rossia spokeswoman Anastasia Kasyannikova declined to comment. “Mr. Dobrodeyev said all that he wanted to,” she said.
Dobrodeyev has been talking about creating the news channel since the mid-1990s, when he worked for then-privately owned NTV television. He announced plans to set up the channel at VGTRK in 2003.
His comments on Thursday indicated that he had the Kremlin’s blessing to push ahead with the project, said Sergei Markov, a Kremlin-connected political analyst. Markov said the Kremlin was responding to public demand for more comprehensive news coverage amid criticism of the coverage offered by the national television channels.
In 2003, VGTRK said the news channel would be modeled on CNN and BBC World, and content would be provided by Rossia and the French-based Euronews, of which VGTRK owns a 16 percent stake. It said the channel would air on channel 25, which is currently unused.
Dobrodeyev also said Thursday that VGTRK would take part in a federal tender for a channel aimed at children and youth. The Federal Agency for Press and Mass Communications is expected to set a date for the tender soon. 
In a separate project, the state is looking to set up a 24-hour English-language news channel called Russia Today. The satellite channel would present domestic and international news.

TITLE: Beslan Makes BBC Revisit Rules
PUBLISHER: The Associated Press
TEXT: LONDON — The British Broadcasting Corporation will introduce a time delay on its live coverage of sensitive news events such as the school massacre in Beslan and the Sept. 11, 2001 attacks in the United States, the company said Thursday. The time delay will last several seconds and will allow editors to cut any scenes they believe are too shocking for viewers.
The decision was made following the unease felt in some quarters over the BBC’s coverage of the Beslan disaster in September, the corporation said. 
All major news broadcasters reported live from the scene of the hostage crisis, in which more than 300 people died. Cameras were rolling as bloodied hostages, many of them children, fled the school.
The BBC’s new editorial guidelines stipulate: “A delay must be installed when broadcasting live coverage of sensitive and challenging events, such as the school siege at Beslan.”

TITLE: A Terrorized Village in Chechnya Crosses the Border
AUTHOR: By Islam Abakarov and Ruslan Salakhbekov
PUBLISHER: The St. Petersburg Times
TEXT: KIZLYAR, Dagestan — On a clearing the size of a soccer field, more than 1,000 former residents of Borozdinovskaya, a largely ethnic Dagestani village just across the border in Chechnya, are camped out in tents amid a jumble of furniture and other belongings.
They began moving here on June 16, when they found charred human remains they suspected were those of four men taken away from their village in a June 4 raid by masked gunmen.
In this makeshift camp, a few dozen meters from the checkpoint that separates Dagestan from Chechnya, the villagers are caught in the middle of a potentially explosive situation that threatens to sour already-uneasy relations between the neighboring republics as officials on both sides appear to be ready to stoke ethnic tensions.
The Dagestani exodus was triggered by a raid on Borozdinovskaya late in the evening of June 4, when more than 200 masked gunmen raided the village, which is inhabited predominantly by Avars, Dagestan’s biggest ethnic group, and took away 11 men. 
The men, 10 Dagestanis and one ethnic Russian, have not been seen since.
Residents claim that the gunmen were from the Vostok, or East, special forces battalion, which is commanded by Sulim Yamadayev, a former Chechen rebel leader turned pro-Moscow strongman. The battalion is not part of the Chechen government’s security forces, but answers to the General Staff’s Main Intelligence Directorate, or GRU.
But Sergei Surovikin, the commander of the 42nd motorized infantry division to which Yamadayev’s militia belongs, denied that any of his men had participated in the raid on Borozdinovskaya.
The allegations were “groundless and aimed at destabilizing the political situation and staining the honor and name of the honest career officer and Hero of Russia, Sulim Yamadayev,” Surovikin said in comments on Dagestani television.
The masked raiders herded about 200 Dagestani men into the village school, forced them to lie down in the mud and fired rounds over their heads, beating and insulting them, residents said. The gunmen raided homes, taking away cars and other valuables from the villagers, forcing even teenagers to empty their pockets of cell phones and cash, the villagers said.
Then, they said, the attackers gunned down a 77-year-old resident of the village, set fire to three houses and fled, taking 11 villagers with them.
To protest the raid, on June 8 and June 11 villagers set up roadblocks on the nearby highway separating Chechnya and Dagestan and called for the return of the missing men. 
Chechen and Dagestani officials met with the protesters and promised to help find the men. But on June 14, when a stray dog found charred human remains in one of the houses that the raiders burned down, the frightened villagers decided to pack up and leave.
The raid, and the outcry against it from the villagers, has prompted Dagestanis to rally in support of the residents now camped out in Kizlyar, and has also led President Vladimir Putin’s envoy to the Southern Federal District, Dmitry Kozak, to express his concern about the incident. 
“If what the residents of Borozdinovskaya are saying matches reality, then what was done to this village is a direct sabotage against Russia, Dagestan and Chechnya,” Kozak said last Wednesday on a visit to Grozny.
After meeting with Kozak and relatives of the kidnapped men in Grozny the same day, Chechen President Alu Alkhanov fired Khusein Nutayev, head of the Shelkovskoi district, which includes Borozdinovskaya. 
Nutayev had conceded that “violations of the law” had taken place.
“Regretfully, special services and federal structures have not worked that well. Those who headed the operation allowed violations of the law,” he told NTV television.
Mukhtar Yunusov, a disabled man who suffers from severe asthma, was among those who were kept in the school by the gunmen.
“Six men raided my house on that day, beat me with rifle butts and brought me into the school yard where other villagers were already laid in the mud,” he said in stumbling Russian. “They pulled my shirt over my head, forced me onto the ground and began stomping on me with their feet.” Twice during the beating he lost consciousness, Yunusov said.
“I served in the Soviet Army in Germany and saw Buchenwald, the Nazi concentration camp,” Yunusov said. “But I believe these men treated us worse than in the concentration camp. The attackers said they would turn us into ashes.”
Ten of the 11 villagers taken away by the gunmen were ethnic Avars, mostly young men, and the 11th was a 19-year-old Kizlyar resident, an ethnic Russian who was visiting with friends in Borozdinovskaya.
“According to our information, not a single law enforcement agency operating in Chechnya has any of these 11 men in detention,” Magomedrasul Isayev, deputy head of the Kizlyar region, said Monday. “I believe that they are either being kept in a private basement or have been killed.” 
“Most probably, the kidnapped people were not taken anywhere but killed right there,” said Borozdinovskaya resident Magomed Magomedov, adding that the remains of what appeared to be four people were collected by villagers and passed to Chechen officials for forensic examination.
The villagers say that the raiders arrived in Borozdinovskaya in armored personnel carriers, a form of military hardware used by Yamadayev’s men in their operations in eastern Chechnya.
Some villagers said that they recognized Yamadayev’s head of intelligence, Khamzat Gairbekov, a Chechen resident of Borozdinovskaya, among the attackers.
“Every stray dog here knows this cockroach,” said Nazarbek Magomedov, whose two sons were taken away by the raiders, referring to Gairbekov. “Many of us recognized him and reported this to investigators from the Military Prosecutor’s Office. But the investigators left the village and tossed away the complaints we filed in a field.”
Yamadayev and his four brothers actively fought against Russian troops during the 1994-96 Chechen war. After the war ended, the Yamadayevs, along with Akhmad Kadyrov, the future Chechen president, based themselves in Gudermes, Chechnya’s second-largest city, and refused to submit to the authority of Chechnya’s separatist president, Aslan Maskhadov, or his rival, Shamil Basayev. 
In 1999, the Yamadayevs switched sides and joined federal troops as they advanced into Chechnya from Dagestan. Since then, they have been active in fighting the rebels.
Yamadayev’s brother, Ruslan, a State Duma deputy from Chechnya, has vowed in an interview with the Dagestani newspaper Chernovik that his brother had nothing to do with the raid.
The chairman of Dagestan’s Security Council, Akhmednabi Magdigadzhiyev, said last Tuesday in televised remarks that the raiders were part of a federal militia that was not answerable to the Chechen government. He refrained, however, from naming the unit or commander responsible for the raid.
In the exodus from Borozdinovskaya on June 16, relatives came from Dagestan on trucks, and more vehicles were rented in nearby Kizlyar to relocate the angry Dagestanis.
The trucks shuttled between the village and a clearing just across the highway that divides the Kizlyar plains into Dagestan and Chechnya. A total of 210 families, including 387 men, 413 women and 272 children, had moved there as of June 20, said Isayev, the Kizlyar official.
With only a few battered tents provided by the local authorities in Kizlyar, the camp makes for an eerie sight: Among the tents are refrigerators and wardrobes, beds and television sets, most of them covered by plastic sheeting. After the villagers arrived, they built two outhouses out of planks on the outskirts of the camp.
Villagers have brought piles of construction materials to the camp from Borozdinovskaya, an indication that they do not plan to return.
“We will destroy our houses in Borozdinovskaya; we will burn them so that nothing will be left for the Chechens,” said one villager, who declined to give his name for fear of reprisal.
Last Tuesday, Borozdinovskaya residents and ethnic Avar politicians from Dagestan held a rally near the tent camp. A State Duma member from Dagestan, Gadzhi Makhachev, called at the rally for the eviction of ethnic Chechens from Dagestan in retribution, but other Dagestani officials and Borozdinovskaya residents did not support him in his call.
The meeting adopted a declaration demanding that the Chechen government compensate Borozdinovskaya residents for their abandoned houses, and calling on the Dagestani government to give the villagers land to settle on. If their demands were not met, the villagers said they would go to the Dagestani capital, Makhachkala, and rally in front of government buildings.
Tensions have run high between the Chechens and Dagestanis living in Chechnya since the early 1990s. Many Dagestanis and ethnic Russians, who had been made to settle on Chechen lands after Josef Stalin exiled the Chechens to Kazakhstan in 1944, found themselves forcibly evicted, this time by the Chechens. But in Borozdinovskaya, where the Avars were in the majority, local Avar strongman Shapi Mikatov created an armed militia that effectively protected the village from the Chechen gangs, the residents said.
The strongest clashes Mikatov had were with Sulim Yamadayev, who was the most powerful rebel warlord in eastern Chechnya during its de facto independence in 1991-94 and 1996-99.
After Mikatov was killed in a shootout in 1998, the Dagestani residents of Borozdinovskaya began to be targeted by pro-Moscow Chechen police and militias. Residents recall kidnappings for ransom, beating and insults at hands of Chechen officials.
They increasingly turned to Dagestani authorities to help them to relocate to Dagestan, but were flatly denied any support, they said.
Since the setting up of the tent camp in Kizlyar, Magdigadzhiyev, the Dagestani security official, has said the villagers’ place is in their home village, not in Dagestan. “They are citizens of Chechnya and must live where their homes are,” he said, insisting that there was no conflict between the Chechens and Dagestanis living in Chechnya.
But many of the villagers believe their Chechen neighbors played a part in the June 4 raid, possibly by telling Yamadayev’s men that Dagestanis were hiding weapons or rebel fighters in their homes. The Dagestanis accuse Chechens of wanting to clear them out of the village, in the same way that many Russian families were pressured to leave villages in northern Chechnya.
“These men told us that next time our children will suffer if we don’t leave. This is our land, they kept saying,” Borozdinovskaya resident Aminat Magomedova said, recalling the day of the raid. “The worst thing is that the children saw this. They saw how our houses were set on fire, how people were beaten and insulted. They are still very scared.”
Another villager, Shamil Magomedov, said that Chechens from other places had been coming to Borozdinovskaya for three weeks before the raid, and said they had already occupied many houses abandoned by Dagestanis.
“They knew this would happen, it was a planned action,” he said, adding that Chechen policemen were not allowing the Dagestanis leaving the village to take construction materials with them.
“The usually busy road to Dagestan was clear when we began moving our belongings out, there was nothing to block our departure,” said another villager, who refused to give his name.

TITLE: Reporter Jailed for Unprinted Text
AUTHOR: By Carl Schreck and Antonio Lupher
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A journalist has been sentenced to seven months in prison on charges of slandering a Saratov official in an article that was never published.
Eduard Abrosimov, a onetime adviser to former Saratov Governor Dmitry Ayatskov, was also found guilty of slandering State Duma Deputy Speaker Vyacheslav Volodin, a deputy chairman of the United Russia party, in a separate article, a spokeswoman for the Saratov region prosecutor’s office said Thursday.
The charge over the unpublished article was filed during an investigation into the Volodin slander case, and astounded media rights activists denounced the conviction as a leap back to the Middle Ages.
The case stemmed from an article that speculated about which politicians might be homosexual and, citing Internet rumors, mentioned Volodin’s name. The article, which was written under the pseudonym Andrei Zabelin, was published in the Sobesednik newspaper in November.
Abrosimov was charged with slandering Volodin and was arrested on Jan. 21.
A search of Abrosimov’s computer turned up an article that he had sent twice to the editor of the Saratov-SP newspaper, which contained “false statements” accusing Dmitry Petryaikin, head of the special investigations department of the regional prosecutor’s office, of accepting a $2,000 bribe to drop a criminal case against two suspects, the regional prosecutor’s office said in a statement.
Abrosimov was charged on April 15 with defamation involving accusations of serious crimes, according to the prosecutor’s office statement.
However, it was an early version of the article that investigators found, and the final version published in November made no mention of the accusation against Petryaikin, said Sergei Plotnikov, an expert with the Center for Journalism in Extreme Situations, who went to Saratov last week to follow the case.
The regional prosecutor’s office spokeswoman, who refused to give her name, would not provide details about the case and referred all questions to the office’s official statement, which was posted on its web site.
Plotnikov said prosecutors argued in court that even though the accusation was not published, the fact that at least one person — in this case, Abrosimov’s editor — had seen it qualified as slander.
“This is an amazing precedent. It means that any journalist can be convicted for words deleted by his editor,” Plotnikov said. “You can’t even compare this to the 1930s. It’s more like the Middle Ages.”
Abrosimov’s lawyer, Igor Makarevich, could not be reached for comment, and repeated calls to Volodin’s press office went unanswered.
Abrosimov was sentenced Wednesday to seven months in a minimum-security prison by a Saratov district court.
Abrosimov is perhaps better known for his political connections than his journalistic pluck. At the time the articles in question were written, he was advising then-Saratov Governor Ayatskov. The article mentioning Volodin was sent from a computer at Abrosimov’s office in a building of the regional administration, a senior Saratov prosecutor told Kommersant in January.
Ayatskov was the first governor to lose his job under a law introduced this year that replaced gubernatorial elections with a system where the president effectively hires and fires governors. After being removed in March, Ayatskov was appointed ambassador to Belarus.
Abrosimov had a reputation for writing articles — using his own name or pseudonyms — that were critical of Ayatskov’s political opponents, including Volodin and Saratov Prosecutor Anatoly Bondar, media reported. 
“Local journalists consider him more of a PR guy than a journalist,” Plotnikov said.
Kommersant, citing local prosecutors, reported in January that a search of Abrosimov’s office turned up evidence indicating that Abrosimov had made a $600,000 deal to organize a smear campaign against Volodin. 
Ayatskov has defended Abrosimov, telling Kommersant in January: “Abrosimov is absolutely clean. Not even the prosecutors can argue about that with their hints and speculations. ... They’re trying to portray this as a case against my adviser, but as an adviser, I have nothing against him. In his free time, by all means, he can be a journalist.”
Human rights lawyer Lev Levinson said the defamation law in the Criminal Code allowed for a person to be convicted of spreading false information about someone else, even if to only a small group of people.
“If it’s not just a private conversation with my family or my close friends but rather with, for example, my work colleagues, then technically the law defines this as defamation,” Levinson said.
He said, however, that he was stunned that Abrosimov had received a prison sentence.
“The law stipulates several punishments, including financial compensation,” Levinson said. “At the most, he should have gotten a suspended sentence. It’s almost unthinkable that he will be serving actual prison time for this.”
The OSCE expressed concern on Thursday over a five-year prison sentence handed down by a Smolensk court to journalist Nikolai Goshko.
“It would be alarming to see both the severity of the sentence, and the possibility of combining speech offenses with crimes totally unrelated to journalism, become a precedent for the future and thus amplify the chilling effect on journalism,” Miklos Haraszti, the OSCE’s media freedom representative, wrote in a letter to the Justice Ministry, according to the OSCE’s web site.
Goshko, deputy editor of Odintsovskaya Nedelya, a newspaper in the Moscow region city of Odintsovo, was sentenced this month to five years and one month in prison on charges of slandering three Smolensk officials in 2000. The unusually harsh sentence was due to the fact that Goshko was on probation at the time of his offense for unrelated fraud charges from 1996, Smolensk prosecutors said last week.
Goshko’s wife, Yekaterina Shalova, said Thursday that her husband would file an appeal Monday.

TITLE: Surkov Says No Orange Revolution in Russia
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — The opposition should not entertain illusions that an Orange Revolution is possible in Russia, senior Kremlin official Vladislav Surkov said in a wide-ranging interview published in Germany’s Der Spiegel magazine.
“There will undoubtedly be attempts to overthrow the government. But they will fail,” said Surkov, deputy head of the Kremlin administration, in an interview published last Monday. Surkov also said that he respected jailed oil tycoon Mikhail Khodorkovsky and that Russia should work harder to be “accepted” by the West.
Surkov ruled out an uprising in the wake of either parliamentary or presidential elections in 2007 and 2008 respectively, but he said that pro-democracy protests in Georgia and Ukraine had “made an impression” on Russian politicians.
“There will be no uprisings here,” said Surkov, who oversees the Kremlin’s relations with political parties, parliament and youth organizations. “We realize, of course, that these events have made an impression on many local politicians in Russia — and on various foreign nongovernmental organizations that would like to see the scenario repeated in Russia.”
Surkov warned about a possible future victory for leftist and nationalist parties, such as the Communists and Rodina. 
“With all due respect, I cannot imagine what would happen to the country if they came to power,” he said.
Dmitry Orlov, head of the Agency for Political and Economic Communications, a think tank, said that Surkov’s comments indicated that the Kremlin was in favor of a successor to President Vladimir Putin taking power in 2008, when Putin’s second term ends. 
The Der Speigel interview appeared after Prime Minister Mikhail Fradkov appointed Vladimir Yakunin, a close associate of Putin’s, to head the state-run Russian Railways, or RZD, last week. The appointment to lead the railroad monopoly could be interpreted as grooming Yakunin as a possible successor to Putin, Orlov said.
Surkov also said that radical youth organizations, including the National Bolshevik party, “represent a danger that cannot be underestimated.”
By comparison, the pro-Kremlin Nashi, or Us, youth movement involves young people in the kind of politics that would not jeopardize the government, Surkov said. 
Surkov has been widely credited with playing a leading role in organizing this pro-Kremlin youth group, as well as in the formation of the United Russia and Rodina parties.
The National Bolsheviks are known for holding high-profile demonstrations and stunts, such as seizing a Kremlin reception office, but in recent years have tended to steer clear of the racist rhetoric of radical nationalist and Neo-Nazi groups.
Yet, when asked about the National Bolsheviks, Surkov replied that “chauvinist, pro-fascist forces” could provoke “a wave of Islamic extremism,” which would threaten Russia’s territorial integrity.
Surkov, whose father is an ethnic Chechen, accused radical Islamic groups of trying to destabilize the North Caucasus in hopes of wresting the area from Russian control. He said these groups had been able to operate due to the failure of the authorities to enforce the law.
On Russia’s relations with the West, Surkov said Russia should work to be accepted by the West, which he said “doesn’t have to love us.” 
“In fact, we should ask ourselves more often why people are so suspicious of us. ... If we want to be accepted, we have to do something in return. And it’s an art that we have yet to master,” Surkov said.
Surkov said he did not push for the arrest and conviction of Khodorkovsky and said that he respected him for his work as a senior executive in Group Menatep, where Surkov also worked before becoming a Kremlin official. 
“For personal reasons, I find it difficult to take a position on this case. I was on Khodorkovsky’s payroll myself for 10 years. I’m biased because I respect him, which is one reason I prefer not to comment. Besides, the verdict is still under appeal.”

TITLE: Supervising Editor To Take Charge at Kommersant
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — Vladislav Borodulin, editor of the online news portal Gazeta.ru, was named on Wednesday as the new supervising editor of the Kommersant business daily.
Analysts disagreed on whether Borodulin’s appointment would make the newspaper more critical of the Kremlin or was intended to improve its business coverage, as its owner, Boris Berezovsky, has claimed.
In another appointment, Kommersant’s board of directors in London announced that Vladimir Lensky, who was executive director at NTV-Plus when businessman Vladimir Gusinsky owned the network, would become Kommersant’s general director.
The appointments, part of a shakeup in Berezovsky’s media empire, were announced by the Kommersant board chairman, Yuly Dubov, in London.
As editor of the Kommersant publishing house, Borodulin, 37, will supervise the editorial policy of Kommersant, as well as of the magazines Kommersant Vlast and Kommersant Dengi, said Georgy Ivanov, the chief of Kommersant’s legal department.
“Kommersant has a uniquely creative staff that is unequaled in Russia,” Borodulin told NTV television Wednesday.
The board made no decision about Kommersant editor Alexander Stukalin, leaving it to Borodulin to decide whether he wants him to stay, Ivanov said. When announcing the changes to Kommersant staff mid-June, Berezovsky said that Stukalin would have to leave too.
Andrei Vasilyev, who was general director and supervising editor at Kommersant, will head Kommersant’s Ukraine edition, Dubov said.
Alexei Mukhin, director of the Center for Political Information, called Borodulin “an adventurer” who could make Kommersant an anti-Kremlin publication. Berezovsky wants media coverage that will cast President Vladimir Putin in a bad light before the parliamentary and presidential elections respectively in 2007 and 2008 and that is why he chose Borodulin, Mukhin said.

TITLE: IN BRIEF
TEXT: Kaliningrad Summit
MOSCOW (AP) — The leaders of Russia, France and Germany will hold a trilateral meeting on July 3 in Kaliningrad, the Kremlin announced Thursday. 
President Vladimir Putin, French President Jacques Chirac and German Chancellor Gerhard Schroeder have held similar three-way summits in recent years. 

PACE Advises Russia
STRASBOURG, France (AP) — The Council of Europe’s parliamentary assembly urged Russia to formally abolish the death penalty, withdraw its troops from Moldova and prosecute those responsible for human rights breaches, notably in Chechnya. 
In a resolution Wednesday, the assembly also called on Russia to strengthen its judiciary and improve its cooperation with the European Court of Human Rights. 

Kommersant Warning
MOSCOW (MT) — A Moscow arbitration court on Wednesday rejected an appeal by Kommersant newspaper against a warning it received for a Feb. 7 interview with Chechen rebel leader Aslan Maskhadov, Interfax reported.
The Federal Service for Media Law Compliance and Cultural Heritage’s warning, issued in April in accordance with a 2002 anti-extremism law, said the article, in which Maskhadov called for a cease-fire, contained “signs of extremism” and gave terrorists the chance to deliver an ultimatum to the authorities. 

Putin’s Japan Visit
TOKYO (AP) — President Vladimir Putin will visit Japan in November for talks with Prime Minister Junichiro Koizumi, an official said Thursday, with the leaders expected to negotiate a peace treaty to formally end World War II hostilities between the two countries. 
The agreement came during talks between Japanese Foreign Minister Nobutaka Machimura and Foreign Minister Sergei Lavrov, who met in Brussels late Wednesday. 

Yushchenko on Poison 
KIEV (AP) — Ukrainian President Viktor Yushchenko said Thursday that new information suggested the dioxin that poisoned him last September was quick-acting. 
“Investigators have received good information related to the dose … how it works and how it can begin to act in a period of 1 1/2 to two hours,” he said. 

Putin’s Rating Still High
MOSCOW (Reuters) — More than two-thirds of Russians are unhappy with the way their government is performing, but most still think President Vladimir Putin is doing a good job, according to an opinion poll published Thursday. 
A June poll of 1,600 people nationwide by the Levada Center showed that 71 percent were dissatisfied with the government compared with 54 percent a year ago. Putin received a 66 percent approval rating, compared with 72 percent in June last year. 

Population Falls 0.2%
MOSCOW (AP) — The population dropped by 286,600 in the first four months of the year, the State Statistics Service said Thursday. 
The service said that the population dropped by 0.2 percent from Jan. 1 and stood at 143.2 million as of May 1.

TITLE: Shipping Merger Will Reorganize Market
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: P&O Nedlloyd’s merger with rival and world’s largest container shipper Maersk will mean a total amalgamation of the two companies’ offices, but no significant job losses, Philip Green, the CEO of P&O Nedlloyd, said last week.
After the finalization of the $3 billion deal, expected by Green to be in August, British-Dutch shipper P&O Nedlloyd will lose its name and operate fully under the Maersk Sealand banner, a brand of Danish shipping giant A.P. Moeller-Maersk.
“I expect that the merged company [name] will be Maersk. The merged entity will have one brand, one management team, and one set of values,” Green said Thursday during a visit to the shipper’s St. Petersburg office.
In locations where both container shipping companies run an office, Maersk will amalgamate the two at one of the facilities or choose a third location to accommodate staff arriving from both Maersk and P&O Nedlloyd, Green said.
The two companies combined will command globally about 70,000 employees, 550 vessels and account for more than 17 percent of the worldwide shipping market — more than double its closest rival. The Danish shipper said in May that it sought a merger to meet a booming demand in the business that exceeded the company’s operational capabilities.
When a takeover of P&O Nedlloyd by Maersk was first announced in mid May this year, the two shippers originally said they expected to cut 1,500 jobs within three years. Green said Thursday that job losses would be minimal.
“[Maersk] are interested not only in our ships, but also our people,” Green said. “I believe that the transition is in the interest of the vast majority of our staff. Most will find a job in the new, merged company.”
Green said he considered the Russian market as the most promising of the four major developing countries. “[Russia is] strategically significant … we’re committed here,” he said.
The number of 20-foot container units (teu) passing through the country’s main container port in St. Petersburg almost doubled between 2000 and 2004, rising from 240,000 teu to 550,000 teu.
P&O Nedlloyd accounted for just 7 percent of the St. Petersburg container market in 2004, trailing Maersk Sealand with 23 percent, and CMA/CGM, OOCL and MSC each with 15 percent.
Along with securing a stronger market position for Maersk, independent experts in Russia say the merger is likely to mean serious reorganization of staff, with the biggest repercussions on the offices of P&O Nedlloyd.
“Maersk has a very specific staff policy. For one it’s very selective: usually they employ staff from a young age and have them work their way up,” said Sergei Ashcheulov, an independent shipping analyst. “They also run the Maersk International Shipping Academy without graduating from which there’s little chance of career progression.”
Ashcheulov pointed to Maersk’s acquisition of rival shipper Sealand in 1999, and the reorganization it caused on the St. Petersburg port scene.
“Maersk took very few people from Sealand in spite of Sealand having a much bigger operation in Russia at the time … Maersk will be able to swallow P&O Nedlloyd’s work volumes without much change [in staff levels],” he said.
The Russian office of Maersk declined to comment Monday.

TITLE: Car Parts Supplier Sets Up
AUTHOR: By Yekaterina Dranitsyna
TEXT: Johnson Controls, a leading supplier of automobile interiors, electronics and batteries, started assembly operations in Russia last week.
The American company has opened a 2,000 square meter plant with 60 staff in St. Petersburg, which will assemble a complete range of seating systems for the four Ford Focus models that the automaker produces locally.
“We are able to supply our customer faster and better than before, as well as enhancing our working relationship with both [Ford] and our own suppliers in Russia,” Rene Behiels, general manager of Johnson Controls in Europe, said last week in a statement.
Johnson Controls already designs and produces seating, AutoVision entertainment systems and batteries for the new Ford Focus model on the European market.
“Johnson Controls is our traditional European supplier. It provided the previous Ford model with materials and covers for car seats. Now they will provide our new Ford Focus with the complete seats,” said Yekaterina Kulinenko, press secretary for Ford Motor Company in Russia.
Kulinenko refused to reveal details of the deal, but said that Johnson Controls will provide all the seating for Ford in Russia as it increases local production from 32,000 to 60,000 as of next year.
Johnson Controls denied a possibility that it would also supply car components for Toyota, which will open its St. Petersburg plant in 2007, or other foreign manufacturers that assemble automobiles in Russia.
“Johnson Controls has set up a plant in St. Petersburg expressly for Ford. The plant in St. Petersburg has nothing to do with Toyota,” Ina Longwitz, spokesman for Johnson Controls in Europe, said Monday via e-mail.
Industry experts doubt that Johnson Controls will stick only with Ford, saying that the Russian plant will have excess capacity.
“Beside Toyota, Johnson Controls’ new plant can supply to Moscow. Globalization and the unification of production will force [different auto] manufacturers to choose a single supplier for every car part,” said Sergei Petrosyan, director of Rolf-Carline, a Ford dealer in St. Petersburg. “It’s a case of benefiting from a large-scale economy.”
Globally, Johnson Controls provides components for 32 different car brands, which include Toyota, BMW, and DaimlerChrysler.
The setting up of Johnson Controls in close proximity to Ford is, however, unlikely to affect car prices.
“Car prices won’t be affected, they have been already established. It will affect only production costs, adding resources to help Ford’s expansion,” Petrosyan said.
In 2004, Johnson Controls’ global sales totaled $26.6 billion. The company works on 285 locations, 100 of them in Europe.

TITLE: KFC Brand to Give Rostik’s Chicken a New Look
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: MOSCOW — U.S. fast-food giant Yum! Brands is throwing the weight of its KFC brand behind local fried chicken chain Rostik’s in a deal aimed at opening 300 joint outlets in Russia and the CIS over the next five years, the companies said Friday.
Rostik Restaurants, which owns all of the 80 Rostik’s restaurants currently in operation, will invest up to $100 million in the expansion over the next five years, Rostik CEO Rostislav Ordovsky-Tanayevsky Blanco said. 
Other businesses owned by Rostik Restaurants, including Planet Sushi and II Patio, were not involved in the agreement. Rostik Group, which has operated in Russia since 1990, generated turnover of nearly $200 million last year.
Under the deal, the Rostik’s logo — a chicken holding a knife and fork — and the chain’s menu will be modified to include elements of the KFC brand. In addition to the use of its brand, Yum! is putting up a loan of $30 million in financial support. It will also assume responsibility for strategic planning, while Rostik Restaurants will retain operational management of the restaurants.
In 2010, Yum! has an option to buy Rostik out of the joint business or extend the current arrangement.
“Yum! will lower risks by expanding in an emerging market with a local partner, while Rostik will tap into Yum!’s expertise in the fast food industry,” said Victoria Grankina, retail analyst at brokerage Troika Dialog.
The deal will mean the opening of new Rostik’s-KFC outlets, both company-owned and franchised, in as many as 30 cities in Russia and the CIS. 
Yum!’s 12 KFC outlets in Moscow and St. Petersburg, currently managed by Yum! franchisees, will be rebranded as Rostik’s-KFC eateries. 
Yum! — whose turnover topped $9 billion in 2004 — will continue managing its other restaurants, including Pizza Hut, independently of Rostik.
“It’s becoming impossible for international companies to ignore the growth of retail and restaurant businesses in Russia,” Troika’s Grankina said.
The deal comes at a time of strong consumer demand in Russia. 
It follows similar agreement earlier this year between British electronics retailer Dixons and local retailer Eldorado. 
In contrast to the 1990s, the casual dining segment is currently growing much faster than expensive restaurants, Grankina said. 
Rostik’s main competitor, McDonald’s, is currently expanding its existing network of 129 restaurants in the region. It plans to open 25 new outlets within a year and 105 new outlets over the next three years. 
The number of Russians who eat at fast-food restaurants is poised to roughly triple from 30 percent of the population to the 80 percent to 90 percent level typical of more developed economies, said Graham Allan, president of Yum! Restaurants International. 

asd

Wal-Mart Keeps Coy Over Entry Into Russia
By Maria Levitov
Staff Writer
MOSCOW — Wal-Mart, the world’s largest company, wants to expand into Russia, but the retail behemoth is being coy about revealing the timeframe for its arrival.
The retailer is looking at Russia, Poland and Hungary as it continues its expansion in Europe, Wal-Mart CEO Lee Scott told The Financial Times in an interview published Saturday.
“It doesn’t matter to us which of these will be first, we want all of them at some point,” Scott said. “Something could happen next month [or] in six months.”
Wal-Mart’s spokeswoman Amy Wyatt, however, downplayed Scott’s comments. Neither the site of the first Wal-Mart in Russia nor its opening date have been set, Wyatt said by telephone from company headquarters in Bentonville, Arkansas. She declined to confirm earlier reports that a Wal-Mart store would open in St. Petersburg in 2005.
“Everyone would win [from Wal-Mart’s arrival], except the competing retail chains,” said Alfa Bank consumer goods analyst Yelena Borodenko.
The entry of the U.S. giant would mark an important vote of confidence for the Russian retail sector. Its expansion would benefit consumers because other retailers would be forced to slash prices to stay in business, Borodenko said.
Wal-Mart operates on very tight margins of 3.6 percent, which is nearly 3 percentage points lower than the comparable figure at Pyatyorochka, Russia’s largest supermarket chain by sales, Borodenko said.
In Central and Eastern Europe, expansion through acquisition is more likely than building operations from the ground up, Scott told The Financial Times.
Local market leaders, such as Perekryostok and Sedmoi Kontinent — the country’s third- and fourth-largest retail chains by sales respectively — would be prime candidates for Wal-Mart’s acquisition, said Marat Ibragimov, an analyst at financial corporation UralSib.
Discounters, such as Pyatyorochka and Kopeyka, would be less likely choices because they operate in smaller retail spaces than upmarket chains like Sedmoi Kontinent, he said. Wal-Mart stores range between 16,000 and 18,000 square meters in size.
Borodenko, however, said those local discounters might be attractive buys for Wal-Mart because, like the U.S. giant, they target thrifty shoppers.
After the first Wal-Mart outside the United States opened in Mexico in 1991, the retailer’s international network grew to some 1,500 stores across Latin America, China, Canada, Germany, Britain, Korea and Puerto Rico in less than 15 years.
International sales accounted for 21 percent of Wal-Mart’s $285 billion in total sales last year.

TITLE: Estonia Calls on Russia to Back Fair Business Ties
AUTHOR: By Vladimir Kovalev
PUBLISHER: Staff Writer
TEXT: Eastern parts of Estonia are highly interested in investment from Russian business, as well as in mutual understanding with Moscow in order to develop pre-border transport infrastructure, Estonian of¸cials and businessmen said earlier this month.
The Baltic side said that the two countries urgently need to address the issue of transit transportation, since Estonia’s through routes are overloaded and dilapidating.
Daily freight traffic passing through Narva, the capital of Ida Viruma district in Estonia, has come to choke the city. All day and night, trucks bludgeon over the city’s old, narrow bridge to reach the Russian border.
“A new bridge is needed there and in order to build it we require ¸nancial assistance from the Russian Federation,” Ago Silde, the of¸cial elder of Ida Viruma, told Russian businesses this month.
Speaking at a meeting organized jointly by the St. Petersburg International Business Association, the Estonian Trade Chamber and the of¸cial bodies of Narva and Tallinn, Silde stressed the need for cross-border cooperation.
Cargo volumes at the Ivangorod-Narva border checkpoint have jumped 33 percent just in the first five months of this year. The tempo is expected to heighten after Estonia opens the ¸rst part of its Silamae port that has the capacity to serve 500 trucks a day.
“Our ministers have already approached [the Kremlin],” Silde said. He urged the Russian government to consider setting up conditions for an infrastructure that would benefit traffic in both directions.
The Estonian government has invested about 7 million kroons ($583,000) into new bridge planning. The total costs of bridge construction will hit 1 billion kroons ($35.7 million), about the same as was invested in the ¸rst part of the Silamae port, the elder said.
Estonia is expecting some cash injection for the project to come from the European Union, but wants a similar backing from the Russians too. The construction of a bridge over Narva river is planned to start in 2007, to be completed by 2009.

PORT WARS
The port of Sillamae is eyed by Estonian businesses as more than a potential competitor to the Ust-Luga port being constructed in the Leningrad Oblast.
While the Oblast port project has been hampered for several years by alleged misuse of building funds and bureaucracy, resulting in just one of the planned eight terminals being built, the port in Sillamae has neared a full launch already this fall.
What’s more, the Estonian harbor belongs to two St. Petersburg-based businessmen Andrei Katkov and Yevgeny Malov, owners of KINEX and Link Oil, Silde said.
“For the moment, an oil terminal and a liquid resources terminal have been completed at the Sillamae port,” Silde said. A container terminal will be ready soon, he said.
“In May this year we had a pilot launch of a new passenger shipping line between Sillamae and Kotka, which in the future will be developed to encompass a triangular route connecting the ports of Kotka, Silamae and St. Petersburg. This line is expected to start working in May 2006,” he said.
Last month, the port signed its first contracts with operators, including Sillamae Oil Terminal Ltd., Tankchem Ltd., and Sillgas Ltd.
In addition, Sillamae has a natural advantage over its Ust Luga rival, said management of the Estonian port. The Russian harbor stands by a shallow riverbed that is insufficiently deep to serve most cargo ships, the management said.
“The port in Ust Luga is being build in conditions that are against nature,” said Tynis Seesmaa, member of the board for Silmet Kinnisvara, the managing company of the Silamae port.
“They have dug a 7 meters to 9 meters shipping channel at the sandy bottom of the Finnish Gulf, which means it will need constant attention, because sand has a tendency to slip all the time,” Seesmaa said. The Sillamae port has a 16-meter deep shipping channel, he said.
Seesmaa said the Ust Luga project, being funded by the state without outside, private investments seemed to lack an idea of its future application. “It looks as though it’s being built just in favor of the construction process itself,” he said.
The ¸rst part of the Silamae includes two 16-meter deep oil products quays, 1 12-meter liquid chemicals quay, and three 12-meter general cargo quays. The port will have two connection routes to the St. Petersburg–Tallinn highway.

TAX FREE ZONES
Besides shipping facilities, 600 hectares of Sillamae port’s territory has been nominated as a special economic zone. Its area is available for construction of distribution and manufacturing facilities that will be excluded from Value Added Tax payments, customs duties and excise taxes on transit cargo, as well as corporate income tax on retained earnings.
Cargo market analysts say the offer of attractive investment facilities and reliable infrastructure just 30 kilometers from the Estonian-Russian border could result in a significant number of businesses relocating operations to the Baltic ports.
“In the light of problems aired in the press regarding the construction of ports in the Baltic region of Russia, two transit hotspots have appeared in Estonia [the ports of Sillamae and Muuga] that can capture the main part of the domestic cargo business despite any protective measures undertaken by the Russian government,” said Dmitry Kondrashev, a St. Petersburg-based analyst.
“Joint efforts, with Russian, European, American and Estonian capital has led to the creation of a full, modern and ef¸cient railway and port transit infrastructure in Estonia,” he said in a recent freight market research for Regnum news agency.

FLOWING OUT OF RUSSIA
Medium-size Russian business interested in exports to the EU has already started to edge to the Baltic, seeking the favorable investment conditions promised by the Estonian state.
Alexander Brokk manages Nakro business park on the site of an old leather factory in Narva. Since the factory’s bankruptcy more than 12 years ago, Brokk has turned the space into a profitable territory for business, which now accommodates 30 companies with 600 employees.

TITLE: Payphones Evolve a Level in Order to Keep Clients
AUTHOR: By Denis Kuskov
PUBLISHER: The St. Petersburg Times
TEXT: With the number of mobile subscribers already exceeding the size of the population in the world’s largest cities, including Moscow and St. Petersburg, a question arises: What will happen to the humble payphone?
To survive the mobile boom, the friendly local payphone has undergone a few changes. Sleeker, more sophisticated and multifunctional, a street payphone will soon offer Russian passers-by a whole new range of services.

HOW DO THEY DO IT?
Visitors to Britain have been among the first globally to test the Internet and e-mail facilities of new multimedia payphones. Since their gentle introduction in central subway stations and airport terminals a couple of years ago, the multimedia project has gathered momentum.
This summer a network of 28,000 multimedia payphones created by British Telecom and Marconi will form the largest such network in the world to offer public Internet access, the London press service says.
British Telecom hopes that the payphone of the 21st century will soon become as common as the red telephone box. The terminals will be located on central streets, in shopping centers, at underground stations, at bus stops, in hotels, hospitals, pubs, restaurants, car repair workshops, airports and so on.
The payphone terminals come with an emergency button for quick access to resources such as the yellow pages, car insurance and the BBC. Payment for the payphones is possible either in cash or by credit card. Internet access costs 50 pence (91 cents) for 5 minutes and 10 pence for every extra minute.
HOW DO WE DO IT? 
Since June 1 it has been possible to make not only intercity calls from payphones belonging to Sankt-Petersburgskiye Taksofony, or SPT, but also international ones.
The city has 1,900 card payphones and 100 coin payphones. All the card payphones belonging to SPT have allowed long-distance calls since 1994, but the coin variant has been limited to local calls.
The reason for the change was to meet the demand for intercity and international calls. In addition, considering the social importance of coin payphones and also in expectation of additional income from introducing long distance calls, the company has halved its rates for calls from all coin payphones. The lower call rates make the services more competitive and at the same time raise the number and length of calls. 
A local call from a coin payphone costs just 2 rubles a minute, while calls within Russia from 5 to 15 rubles depending on which zone is being called. Calls to CIS countries cost 20 rubles a minute while further abroad costs 25 rubles a minute.
This offers a much cheaper deal than from a mobile phone, which is rarely used by St. Petersburgers for intercity calls. Nevertheless, it might be necessary to make such a call when people are some distance away from a fixed telephone — and this is the market niche that SPT wants to capture.
Let’s agree it is unlikely that you would buy a payphone card to make just one call. However, in your pockets, there always jingles some change. Coin payphones are located in socially significant places and near public transportation stops — in the metro, in hospitals, at the Moskovsky, Finlyandsky, Baltiisky railway stations, at bus stations, and on the city streets, though streets tend to be dominated by card payphones.

A CALL FOR MORE
Aside from cheaper rates, since June 1 payphones started to offer entertainment information services. Now one can find out through the phone when the drawbridges open, the latest sport news, the main news of the day, and even listen to jokes.
The SPT information center, which runs the service, has tried to offer a wide variety of entertainment channels and at reasonable prices.
The center’s most popular service is to send SMS messages to mobile phones — you dictate the text to the operator (as you do with a paging company), and they send the message. The cost is the same as through a mobile. However, to use this service one must have a unified payphone card, which enables the holder to use all of the center’s services.
To compensate for a drop in profits from the main service of local telephone calls, payphone operators have invested in additional services. In the very near future, SPT plans to start installing Internet terminals around the city. The terminals will give out information on the weather, the exchange rates, as well as allow people to pay for communal housing service charges, utility bills and mobile services with cash or non-cash means. The terminals will register the payments using the strip-code document identification system.
The company promises that the terminals will have comfortable keyboards and provide printouts for all the financial operations. 
Analysts say that with skilful marketing, both policies adopted by the payphone company may put fresh blood into the landline business, capturing a niche market that has been much underdeveloped in the city.

TITLE: Developers: Market Needs Conservative Investors
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: The St. Petersburg Times
TEXT: SPECIAL TO THE ST. PETERSBURG TIMES
Developers swear that Russia is soon to be engulfed by a boom in commercial real estate, but say they are growing impatient for financial input from Russian or foreign pension funds and insurers.
Investors, meanwhile, say it pays to wait for better legislation and more interesting projects.
One possible source of financing for developers has been mutual funds, or more specifically Real Estate Investment Trusts — funds set up directly to invest in property.
Despite widely discussed rumors about real estate market overheating, the number of mutual funds to deal with construction and development projects steadily increases. By the end of May, 51 real estate mutual funds were registered in Russia with total assets of 10.35 billion rubles, said Sergey Sebelev, leading development and client relations expert at AVK Dvortsovaya Ploschad managing company. However, with the funds providing as many appealing factors as drawbacks, the real possibility of benefits to investors lies uncertain.

SEARCHING FOR MONEY
Developers and constructors started to use mutual funds as a source of financing about two years ago. Fund managing companies that diversified their investments to include residential and commercial property assets joined later.
In the early ’90s, developers invested their own money into projects, since a bank loan posed too risky a burden.
“For project investments, bankers demand independent assessments, analysis of the prospects a property development has,” said Dmitry Kiselyov, deputy chairman of Okhta Group holding, which owns Svinin & Partners, a subsidiary that manages real estate funds.
The option of mutual funds offered developers and investors steady revenues despite some legal restrictions. Fund assets cannot be used as securities to take a loan, which reduces risks but prohibits leverage, Kiselyov said.
Nevertheless, some mutual funds tied to the property market provide revenues as high as 50 percent and benefit from profit tax exemption.
“Entering in a commercial real estate project when there is only a building site and general concept, investor wins 25 percent to 35 percent on top of a return on investment. Buying a building for rent revenue gives an investor 12 percent to 15 percent,” said Kiselyov.
Some mutual funds manage land resources. Land value may increase by several times because of cottage construction and engineer development. In case of construction projects profitability differs greatly, said Beishen Isaev, deputy director of Veles Capital investment company. 
Low-class property management may give up to 20 percent profitability in St. Petersburg, 12 percent in Moscow. 
The figures seem rather attractive to western investors when compared to profits abroad. In Finland and the Baltic states real estate profitability is 6 percent to 8 percent, in Germany only 4 percent to 5 percent. However, western conservative investors largely buy into A-class property.
“High A-class property prices in Moscow don’t allow 15 percent profitability that would be acceptable considering the country risks. Other property types don’t attract foreign investment and pension funds,” said Isaev.
If Western venture investors have been happy to risk their capital in Russia, so far “conservative investors are only looking,” Kiselyov said.

INDUSTRY RISKS
The lack of conservative investors has furthermore jeopardized the profits of venture capitalists. Ending the project they might find no one who will buy the property.
In the West, the bulk of property investment comes from pension funds, REITs with a conservative outlook and insurance companies. In Russia those institutions have not yet accumulated the necessary resources.
By March 2005, the federal financial markets service (FSFR) estimated nongovernmental pension funds resources to stand at 176 billion rubles ($6.1 billion), with the largest fund owning less than 1 billion rubles ($35 million), according to Interfax.
Western funds with substantial resources present an option for commercial real estate developers, but “conservative western pension funds won’t invest in construction unless they get long-term rent or ownership,” Sebelev said.
In this respect, however, a potential investor bumps into unstable legislation. Land resources and engineering infrastructure regulations are far from perfect, said Sebelev.
“St. Petersburg real estate market is stagnating because of the previous fast growth and external factors: state regulations of land and subsequent price increases among others,” he said.
Other problems materialize inside the industry. Often “available commercial property is overpriced and has considerable defects,” said experts at Colliers International.
Kiselyov agrees. “Money is not a problem. Investors are ready to finance. But, there is a deficit of interesting high-class projects. St. Petersburg hotel business is one striking example,” he said.
Furthermore, “long-term money” tends to stay within the holding as companies stick to financing their own subsidiaries, Kiselyov said.
“Nothing will change unless a strong nongovernmental pension fund system, long-term insurance programs and other sources of ‘cheap’ money become available in Russia,” he said.

TO TRUST IN TRUSTS
Unlike western REITs, Russian mutual funds do not enjoy great popularity with investors, due to several drawbacks.
“Developers often don’t see mutual funds as a collective investment tool. With poor risk versus profitability ratio funds won’t have an effect on the construction industry,” Isaev said.
Experts at Colliers International agree. “Investors don’t believe in mutual funds. Securities are not sold on the secondary market, so investors face difficulties quitting the fund.”
A boom in funds is slowed also by legal restrictions.
“Classic funds earning from rent meet with gaps in tax legislation. Funds that invest in construction could not be treated as developers. Therefore, they can’t participate in building site tenders or initiate construction,” said Vladimir Kirillov, head of KIT managing company in St. Petersburg.
Isaev adds that the funds market still lacks transparency. The majority of “pocket-like” funds have no more than 10 investors and very expensive shares: a single project started for a specific developer.
“Actual financial figures are inaccessible. Efficiency estimation is impossible unless the project is finished,” Isaev said.
Mutual funds’ activity would be even more effective, Kirillov says, if there were legal distinctions between rent and development mutual funds and if investors could get property rights on top of money they earn upon quitting the fund.

INVESTOR UNINHABITED
Despite all the difficulties expert prognosis is optimistic, especially if western capital starts to come in.
“The only possible risk coming from western capital is market overheating. But it won’t happen soon. Meanwhile, let’s hope we’ll see at least some market heating,” said Kiselyov.
It seems more and more investors are keen on select areas of commercial property.
“With retailers expansion the demand for logistic capacities grows. We already face a lack of warehouses. Logistic centers will be the next hot market, with hotels, out-of-town middle-class real estate to follow,” Sebelev said.

TITLE: Cybersquatting Hits Businesses for Top Dollar
AUTHOR: By Tom Stansmore
TEXT: There are few sure ways to make a million dollars. But registering a domain name like Wallstreet.com, before the financial elite had even an inkling of an idea to create its own web site, was certainly one of them. When it came to the buy-out of rights to the domain name, the price tag on Wallstreet.com read $1 million.
Such cunning “forward-planning,” or cybersquatting in the legal sense, can be traced back to the beginning of the Internet. In Russia, it really caught on in the late ’90s when Rosbank was rumored to have purchased “Rosbank.ru” for $20,000.
Since then, many high-profile cases have brought the problem to the attention of the Russian government. The issue, one of several related to intellectual property rights protection, has consistently troubled government officials as Russia seeks admittance to the World Trade Organization.
Obtaining a domain name in Russia is a simple registration process involving no checks to determine whether the applicant’s intended use will be misleading to the public. Either a Russian or foreign individual or legal entity need only enter into a service contract with one of Russia’s domain name registrars. The process is on a straight “first to file” basis and registration fees and annual renewal fees are minimal.
Additionally, domain names are freely assignable based on a simple letter from the “owner” to the assignee. And that is about as tempting a proposition to dishonest acquisition as one can imagine.
There is nothing in Russian legislation that either defines domain names or provides any criteria for denying a domain name to an applicant. To claim one’s intellectual property rights on the “.ru” domain, one must turn to Russia’s law on trademarks.
Amendments incorporated into Russia’s trademark law at the end 2002 expanded the list of unlawful uses to include the unauthorized use of the trademark on the internet, and specifically mentioned domain names. In brief, these few lines represent the entirety of Russian legislation against cybersquatting. Successful prosecutions in domain name actions are therefore closely linked to proper trademark registration.
Prior to this amendment, protecting one’s intellectual property on the .ru domain was sporadic at best. Although there was little base in law for them doing so, Russian courts were typically inclined to rule in favor of the trademark owners.
This was the case for both Russian and foreign instances of cybersquatting, and some of the more highly publicized decisions concerned Kodak, Coca-Cola, Mosfilm (Russia’s premiere film studio) among others. In all these cases, because there was no direct legal connection between trademark and domain registrations, the courts relied on “anticompetitive” and “bad faith” provisions of the law when siding with trademark owners.
In Kodak’s case, however, the case went all the way to Russia’s Supreme Court, where it was remanded back to the lower courts. In all, the case lasted over three years before the domain name was recovered.
With Russian legislation slow to adapt to e-commerce, cybersquatting caught on as an easy money-making scheme that has had years of global experience (some of the top sale of domains include Altavista.com for $3.3million and Business.com for $8 million). Indeed, it remains perfectly legal to buy and sell domain names for profit as long as the law on trademarks is not violated.
However, one of the often-cited deficiencies of the trademark law amendments is that it specifically discusses the “use” of the trademark as a domain name and is silent on the issue of registration without use. The wording of the law means that judges are forced to rely on the previous principals of “bad faith” when deciding cases concerning the recovery of a domain name taken hostage (but not being used).
The distinction between entrepreneurship and outright stealing is now beginning to take hold. The amendments to Russia’s trademark laws were the first (and to date the last) instance of domain name protection being incorporated into law. Since the introduction of these amendments, however, the trademark law has been used by a number of litigants to recover their domain names from less than scrupulous registrants and the case of audi.ru is one of the latest.
Granted, the case took over 2 years to fully resolve, but nevertheless, it should be taken as a sign that the amendments do work for their intended purpose.
The amendments to the trademark law show the government making a good start to tackle the issue, but as yet it’s still up to the owner of the intellectual property to take the initiative to enforce their rights. As domain names are recovered with greater frequency, it is expected that other victims of improper registration will be more forthcoming to take action.

Tom Stansmore is the head of the Pepeliaev, Goltsblat & Partners office in St. Petersburg.

TITLE: Struggles Should Not Sink Gazprom
AUTHOR: By Christopher Weafer
TEXT: Last week, the government agreed to acquire an additional 10.7 percent equity stake in Gazprom for $7.1 billion. This transaction, once completed, will see the state’s direct holding in the world’s biggest energy company increase to just over the 50 percent level required to formalize control. This event has been eagerly anticipated by stock market investors for several years, as it was considered a likely trigger for a major rally not just in Gazprom’s stock market value, but also in the overall equity market. 
Instead, the announcement was met with a mixture of apathy and suspicion. This was because of the perception of increased state meddling in the company and because of the conflicting signals sent by Gazprom’s role in the Yukos auction and the now aborted merger with the state-owned oil company, Rosneft. Instead of acting as a major boost to stock market sentiment, the whole process has revealed just how indecisive the Kremlin is. It showed the extent of internal squabbling at the highest level of government.
Consolidating control over key industries is clearly an important part of the government’s strategy to exert greater influence over the economy. Taking majority ownership of companies, like Gazprom, that represent the commanding heights of the economy facilitates this goal. For investors, the state’s acquisition of majority control also seemed like good news: President Vladimir Putin had promised that once the state gained majority control it would then proceed with removing the current restrictions on foreign ownership in Gazprom local shares. In turn, this was expected to provide a major boost not to only the price of Gazprom shares but also to the overall stock market. 
Currently, the Gazprom shares that trade on Russia’s local exchanges are “ring-fenced” to prevent foreign investors from buying them. That means that international investors are effectively limited to buying only those shares that are traded on the London stock exchange, which equal just over 3 percent of the total number of shares in issue. This limits the representation of both the company’s shares and of Russian companies in general in the important global investment benchmark indices that major international investors use as a guide when buying shares. 
In short, when the ring-fence is removed, the pool of Gazprom shares available to international investors will rise from 3 percent to about 25 percent. In monetary terms, this means an increase in the value of shares available from just over $2 billion to $18 billion.
Almost a year has passed since Putin announced that the government would work to remove the foreign ownership restrictions. To facilitate the process, one of Putin’s close associates in the “new politburo” that now controls the Kremlin, deputy chief of staff Igor Sechin, was appointed chairman of Rosneft. The very straightforward plan was to swap the state’s 100-percent holding in Rosneft for extra shares in Gazprom. The creation of a combined oil and gas holding under the Gazprom umbrella also fit well into the government’s plan to establish a national champion energy company to rival those in OPEC. This kind of national oil company would also allow the Kremlin to consolidate its geopolitical relationships with countries like India and China, and also to work out bilateral trade deals, including favorable entry terms when Russia joins WTO, in exchange for increased energy cooperation with Western consumer countries. This week’s agreement to supply Mexico with liquefied natural gas provides a clear example of how the government is using energy to this end.
But instead of speedily proceeding with that transaction, a split at the top of the government emerged between those who wanted to create this new combined holding and those who, while favoring state control, wanted to keep Rosneft, as well as former Yukos production unit, Yuganskneftegaz, separate and nontransparent so as to be able to control financial flows from their oil operations. 
As we now know, the latter group has prevailed. In the process, the message was sent to investors that there was a new elite group in power in the country and they did not wish to share the spoils of victory. Certainly, in some way the investment climate is being damaged due to the risk posed by political instability as the two or more groups in the Kremlin squabble over control of financial flows from state assets. 
Gazprom’s attractiveness to investors may be further damaged by the increased politicization of its business that has emerged over the past year. The government is tightly controlling gas tariff increases at the expense of Gazprom’s domestic profitability, as a major part of its effort to keep inflation as low as possible. This approach will likely remain a key political priority for the next three years until the March 2008 presidential election. 
Yet while Gazprom’s role in the upcoming election is now merely confined to inflation policy, other recent deals hint that this role may expand. Gazprom recently agreed to acquire the stake in the major daily Izvestia that is currently held by Vladimir Potanin’s Prof-Media holding. There is no clear business rationale for this acquisition, but it appears to be an important part of the Kremlin’s strategy to contain political criticism over the next three years.
One thing is very clear about sizing up Gazprom as a major global energy company, however: If left alone, the value of the company would certainly be substantially higher than its current $70 billion stock market valuation. The problem is that while waiting for the government to honor its promise to remove the foreign ownership restrictions, investors have come to realize that the company’s business model has become much more complicated due to the Kremlin’s domestic and international political priorities. Hopefully, however, the risks of politicization will soon be balanced by a firm timetable for tearing down the ring-fence and by progress on new export-oriented projects that would benefit state and investors alike.

Christopher Weafer is chief strategist at Alfa Bank.

TITLE: From Values to True Dialogue
AUTHOR: By Andrew Kuchins
TEXT: In the past year or so, we have increasingly heard the argument that a growing clash between “values” and “interests” is leading to policy dilemmas for Europeans and Americans when dealing with Russia. According to this argument, the erosion of democratic institutions and re-assertion of state control over strategic economic sectors raises questions about Russia’s commitment to becoming a market democracy closely aligned with Western interests. Many critics of Russian behavior assert that Russia’s aggressive meddling in the internal affairs of its neighbors reflects neo-imperial tendencies that do not equate with acceptable modern Western “values” or norms of international behavior.
Yet the formulation of the problem as a conflict of values is not helpful and is even counterproductive. The term “values” has become a code word for describing what we perceive to be Russia’s domestic deficiencies in democracy, rule of law and transparent market competition. These deficiencies are real, but to cast them as reflecting departures from Western values diminishes the effectiveness of our trying to convince Russian officials and policymakers that they exist.
Why does the West promote democracy and democratic institutions in the first place? Out of moral convictions about universal suffrage? Call me a cynic, but I do not think so. We practice and promote democracy because it works better and it serves our interests. How does it work better? 
First, in a system with working democratic institutions, you are likely to have a more effective policymaking process, though it may look rather messy. Policy is likely to be more carefully vetted and alternative views taken into consideration through an independent parliament and press. What appears to be increasing dysfunction in Russian policymaking can be partially attributed to the weakening of other institutions like the State Duma, Federation Council, regional governors and independent national television.
Second, there seems be quite a strong correlation between democratic states and the unlikelihood that they will go to war with other democracies. It is not an iron-clad law — such things don’t exist in social science — but there is preponderant evidence supporting this hypothesis.
Third, as the experience of political and economic transition has suggested over the last 15 years, there is a rather high correlation between countries with stronger democratic institutions and economic growth that does not disproportionately favor the few elites. 
U.S. policy toward Russia since the collapse of the Soviet Union has always been premised on the view that a successful transformation to a market democracy makes the likelihood of a major threat to U.S. security interests unlikely. In my view, this is about interests, not values.
When Western politicians and diplomats talk to Russians, they face a PR problem when they couch a policy dilemma as a clash between values and interests. Nobody likes to be informed that their values are inferior — even, and especially if, it is true. Westerners come off sounding extremely condescending, especially when everything at home is not in order. When U.S. President George W. Bush took this tack with President Vladimir Putin, he got lectures about Florida voting machines and how Yukos is Enron. Such discussion does not go anywhere. 
In sum, Europeans and Americans promote democracy and open markets not only because we strongly believe that these forms of political-economic organization will lead to greater prosperity and better governance and more benign foreign policy, but also because we are likely to have more influence through political, economic and security ties. We do this because it is in our interests in a variety of ways. 
And sometimes, in some of those ways, our interests will bump up against those of Russia. The most obvious example of this came in Ukraine late last year. The Russian government, rightly or wrongly, decided that a Yushchenko victory was not in their interests. They decided, rightly or wrongly, that a Yanukovych victory would result in greater Russian influence in Ukraine. Talking about this and other phenomena principally in terms of a “values gap” creates a lot of heat but sheds little light.
When we look at Russia, we too often think that pushing for human rights and democracy must come at the expense of economic and security interests. This is probably not the case. Is Russian government cooperation on nonproliferation and counterterrorism dependent on or closely correlated to the U.S. policy of democracy promotion? Probably not, since Russians work with the West on these issues because they view it as in their interest. There are limits, of course. If the West were to openly declare that its principle policy interest in Russia was to promote revolution, this would obviously be counterproductive. 
Let me make two broader historical points in conclusion. The first relates to accusations of Russia’s newly aggressive neo-imperialism. It is true that Russian behavior in Georgia, Ukraine, Belarus and Central Asia often runs counter to the interests of the United States, Europe and the governments of some of the states in question. But to jump to the conclusion that this is evidence of Russian neo-imperialism distorts history. Russia today continues to deal with a long historical trend of geo-political decline. The expansion of Western influence into territories previously under the direct or indirect dominion of Moscow continues — with NATO and EU expansion being only the most obvious developments. This does not excuse Moscow for pursuing policies that should not be excused. Rather, it provides a better framework for understanding and talking with our Russian counterparts. 
The last point also relates to historical perspective. This whole debate about values and interests has intensified during Putin’s leadership, especially over the last two years in the wake of the erosion of already weak democratic institutions and the Yukos affair. If we compare Russia today with the Russia of 2000, there has been some backsliding — but I would caution against overstatement. For instance, in the 1996 presidential election, “administrative resources” were probably more important for Boris Yeltsin’s victory — given that in January 1996 his popularity rating was less than 5 percent — than for Putin’s victories in either 2000 or 2004.
But more importantly, if we take a longer historical view then our conclusion is very different. There has been extraordinary progress toward a more pluralistic and democratic Russia. There have indeed been some setbacks in recent years, but it would be rather simplistic to believe that long-term historical trends develop in a linear fashion. Remember Lenin’s saying about two steps forward and one step back. We are in the midst of the one step back. 
When and how Russia will again make two steps forward is difficult to predict, but I am confident that, sooner or later, it will.

Andrew Kuchins, director of the Carnegie Moscow Center, contributed this comment to The St. Petersburg Times.

TITLE: Social Indifference Is Moral Depravity
AUTHOR: By Vladimir Gryaznevich
TEXT: Not long ago the All-Russian Center for the Study of Public Opinion, or VTsIOM, conducted a survey with the aim of finding out what the opinion of Russians was of the moral climate of the community, what actions citizens consider immoral and to what degree. VTsIOM created a rating of immoral actions based on respondents answer to the question “In your view, which actions are more immoral?” The results were surprising.
What hits you in the eye first of all is the poor quality of the answers. The top two places in the rating were taken up by smoking, alcoholism, drug addiction, actions that have nothing to do with morality. Such an obviously immoral action as murder, however,  did not appear on the rating at all. Nonetheless, it’s hard for me to believe that the majority of Russians consider murder to be moral. It’s more likely that the respondents simply did not understand what they were being asked and answered a different question, for instance they expressed what parts of contemporary life they considered to be most harmful, dangerous, reprehensible and so on. In any case, the results of the survey show the low level of expertise of the current VTsIOM — any polling agency is obliged to make sure it gets appropriate answers to its questions.
Although the rating created by VTsIOM hardly describes the moral priorities of Russians, it is nevertheless interesting — as a hierarchy of issues that concern the population. At the top of this scale, 36 percent of respondents placed smoking, alcoholism and drug addiction. One can understand that these negative matters have become so wide-scale, that they really worry large sections of the population. But let’s agree it is strange to hear that such sins worry Russians 3 1/2 times more than corruption (8 percent), and seven times more than aggression, cruelty, and humiliation of people (5 percent).  
The reason for such results, it seems to me, lies in the following: an analysis of the rating shows that Russians more than anything else are worried by the most widespread of defective human relations, the negative behavior of other people that affects them personally — the respondents that is. Those behaviors, which are harmful to society as a whole, concern our countrypeople rather less. The best evidence for my hypothesis is the “sin” that came second in the rating — “the indifference of people to each other,” which was mentioned by 26 percent of respondents. It is notable that “the indifference of the authorities toward the people” dissatisfied 3 1/2 times less of those surveyed; the authorities are by now  traditionally accepted in Russia as something quite separate from the “public.” The third and fourth highest items in the rating also fit my interpretation — “lying, hypocrisy and treachery” came third with 25 percent and “boorishness at home and swearing” came fourth with 25 percent. 
This hierarchy of sins, from which it is possible to build your own hierarchy of values for contemporary Russians, explains why we are so slow at creating a civil society. 
A modern society cannot be so damaged by corruption as Russia is, though undergoing reforms. But how can one fight corruption and bureaucracy if Russians consider smoking to be 4 1/2 times more dangerous? Even swearing worries them more (and this is in Russia!) While such things as lawlessness and irresponsibility that are so harmful to the creation of a civil society, but are widespread in Russia, do not even make it into the rating!
It is notable, that, according to VTsIOM, Russians rate their immediate circle significantly more positively than society as a whole: Only 46 percent note changes in the negative direction, 10 percent see them as better and 42 percent see no changes at all. And this is when 79 percent of respondents are convinced that the public climate in the country has gotten worse recently. This clearly split consciousness once again confirms the thesis of social psychologists of the deep frustration of Russian citizens. It’s true, the optimistic psychologists say that the frustrations are almost overcome, but the data of the current survey gives evidence to the contrary.
In connection with this, it is appropriate to draw attention to the curious situation of our people, 70 percent of whom describe themselves as Orthodox Christians, but don’t know the rudiments of Christian teachers — the moral principles. 
The canonical list of the seven deadly sins is important not only as a concrete fragment of religious teaching, but also as a list of the more serious sins against the principles that have been worked out for peaceful co-existence between human beings. But for our countrypeople there is an eighth sin that should be added — frustration. There are sufficient grounds to add it to the list. The canonical list was created not because it contains the worst or greatest sins of all, but because, to put it in contemporary language, they have a strong synergetic effect — it’s bad to commit multiple sins. And the chief sin is of social indifference, which is the main thing holding back Russia from becoming a civil society. 

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: Israeli Soldiers, Settlers Clash as Pullout Starts
AUTHOR: By Ariel Schalit
PUBLISHER: The Associated Press
TEXT: SHIRAT HAYAM, Gaza Strip — Israeli bulldozers flattened a row of abandoned buildings next to the seaside settlement of Shirat Hayam on Sunday, clashing with Jewish settlers in the first military operation aimed at hampering opponents to Israel’s planned withdrawal from the Gaza Strip.
In a taste of what could lie ahead, troops scuffled with the young settlers who taunted them, climbed on bulldozers and lay in front of one to try to prevent the demolitions.
One Israeli soldier was punished for siding with the settlers.
Israel plans to uproot all 8,500 Jewish settlers in Gaza, as well as about 500 residents of four small settlements in the West Bank, beginning in mid-August. Settlers strongly oppose the plan, and Israeli officials fear extremists among the opponents could turn violent.
Opponents of the pullout had planned on moving in to the buildings, former Egyptian resort cottages abandoned after Israel captured Gaza 38 years ago, to reinforce resistance during the withdrawal. The demolished cottages are near a derelict beachfront hotel in Gaza where hundreds of opponents already have barricaded themselves.
Even as the withdrawal date nears, Israeli Prime Minister Ariel Sharon has continued expanding West Bank settlements, drawing sharp criticism from Secretary of State Condoleezza Rice, Israeli officials said Sunday.
Rice told Israel during her visit last week that Washington would not accept new West Bank construction, although Israeli officials present at the meeting with Rice said she did not threaten any particular penalty.
In the Gaza Strip, troops arriving to carry out the demolitions were confronted by several dozen young activists, most Orthodox Jews. “Jews don’t expel Jews,” the activists shouted at soldiers. Several settlers climbed onto a bulldozer, and a small group holed up under one vehicle to block its path.
The crowd scuffled with soldiers, who dragged several protesters away. The army said 10 Israeli civilians and 10 soldiers and police officers were injured, none seriously.
The army said 11 structures were demolished, and the beach was littered with concrete rubble after the operation. The army said the area would remain a closed military zone until the rubble is removed.
“The Israeli military strongly rejects violent behavior against its soldiers by extremist elements,” the army said in a statement.
During the operation, a soldier began shouting at his comrades and expressing opposition to the mission. The army said the soldier’s weapon was taken away, and he was escorted away.
“This is not justice,” the soldier, Avi Bieber, told reporters as he left. The army said later that the soldier refused a disciplinary hearing, demanding a court martial, and an officer would decide between the two, Hannah Apickar, a Shirat Hayam resident, said Sunday’s scuffle was a sign of things to come.
“We don’t want a civil war; we’re against a civil war,” she said on TV. “We haven’t been violent, but you have to understand that when we see something like this here, we shall oppose it.”
The government has offered compensation and new homes to uprooted settlers and the Israeli Cabinet on Sunday approved additional concessions, including deeply discounted land in a prime coastal area not far from Gaza.
The army is preparing for the possibility of soldiers’ disobeying orders, civil disobedience and even armed resistance by settlers during the withdrawal. Israel also has said it will be ready for possible attacks by Palestinian militants.
Palestinian leader Mahmoud Abbas has said his security forces will ensure quiet from the Palestinian side during the pullout.
Sharon proposed the withdrawal more than a year ago as a step to improve Israeli security and beef up control over large blocs of settlements in the West Bank, where the vast majority of Israeli settlers live. The Palestinians claim all of Gaza and the West Bank for a future independent state.
Friction between the U.S. and Israel over settlement development has surfaced because of different readings of U.S. President George W. Bush’s April 2004 letter that said a final peace settlement would have to take Israel’s main settlement blocs into account.

TITLE: Chinese Business Acumen Resented in the Far East
AUTHOR: By David Holley
TEXT: KHABAROVSK, Far East — The young Chinese man in a dirty black jacket had a lonely, mournful air about him, but he spoke softly of big dreams.
Zheng Chao was drawn to Siberia’s vast expanse of black earth four years ago, part of a growing wave of Chinese peasants using their greenhouse skills to grow vegetables for Russians in a land where winter lasts half the year.
The 26-year-old gets paid only once a year. But he saves it all. His goal is to start his own farming business here, run it for a few years, then return home modestly rich.
Chinese laborers and entrepreneurs are shaping a powerful presence in eastern Russia. The two countries in October settled the last of their disputes over territory on their long-contested border. The influx of Chinese offers this Russian region a promise of fresh vitality, but also carries risks and frustrations for both sides.
The Chinese who come here are almost universally driven by the desire to earn money and go home. In pursuit of that goal, they often endure tough physical labor, dirt-poor living conditions, separation from family and a constant fear of corrupt police who may demand bribes whether or not documents are in order.
The Russians glance nervously over the border and wonder whether China is destined to control this region in 50 or 100 years despite the border agreement. The population of far eastern Siberia, which includes the cities of Khabarovsk and Vladivostok, has declined from 8 million in 1989 to about 6.7 million today. The three nearby provinces of northeastern China are home to about 105 million people.
“Russians want Chinese products. They don’t want Chinese,” Cui Hongwei, 32, who sells sportswear in Khabarovsk’s main open-air market, said in summing up the relationship. Yet he is on friendly terms with his elderly Russian landlady. He helps clean the house, and they often share Chinese meals that he cooks, he said.
Vitaly Prokhorov, 34, who sells fur hats in the market, said it has become extremely difficult for Russian merchants to compete with the low prices of Chinese goods.
“They’re pushing you out,” he said. “In general, people here don’t like them. They make fun of them. But the big problem is, they can no longer exist without the Chinese … . They’re spreading like a forest fire. There’s no way of stopping them now.”
The Chinese have a reputation among Russians as hardworking and willing to take on tough and dirty jobs. And in the eyes of many Chinese, Russians are a bit lazy.
“They have land and don’t plant it!” exclaimed Zhou Yi, 60, a peasant who recently arrived on his first trip to work in greenhouses and fields here.
He earns $100 a month, payable on his return to China, much more than he can make at home, he said.
Guo Lifan, 30, who runs his own vegetable business, said it was not as easy to make money as it was a few years ago because there were too many Chinese to compete with now.
“Russians are no competition for me,” Guo said. “They’re lazy. They drink their vodka and they don’t want to work. Look at all the fields standing idle. Russians see that we work so hard and that we have good harvests, and they say we must go away because we prevent them from enjoying being lazy.”
Very few Chinese lived in Siberia before the 1989 normalization of Sino-Soviet relations, which came after 30 years of bitter political and ideological quarrels punctuated by military conflicts on the border. Estimates of the number of Chinese here now vary widely.
Stanislav Bystritsky, vice director of the Far Eastern Research Institute of Market Economy in Khabarovsk, said he believed there were about 200,000 Chinese in Siberia. “I tried to analyze various aspects of the problem, and I think that’s the correct figure,” he said. “Not 2 million, as some reports say.”
China once considered much of eastern Siberia part of its territory. But Beijing did not press broad territorial claims in the negotiations that led to the agreement in October, which resolved a dispute over three river islands, controlled by Moscow but claimed by Beijing, by allocating each side half the disputed land.
In announcing the deal, President Vladimir Putin and Chinese President Hu Jintao said the agreement would “create more favorable conditions for the long-term, healthy and stable development of the China-Russia strategic partnership of cooperation.”
Many Russians and Chinese in Khabarovsk, however, think their leaders gave away too much to the other side with the islands deal.
“It’s a horrible decision,” said Georgy Senotrusov, 70, who works on a ferry that serves Bolshoi Ussurisky, a 30-kilometer-long Amur River island near Khabarovsk that was divided by the border settlement. “The Chinese want it only for their own goals. Their goal is to take this land, to take this water, and to go further. You see, we have a lot of land here and there are very few of us.”
Cui, the sportswear merchant, said the border agreement meant China had abandoned its historical claim to a large part of eastern Siberia. “I’m just not comfortable about giving up such a big piece of land to Russia.”
Cui said he believed that for China’s government, it was more important to ensure the ability to buy Russian oil and timber than it was to hold on to a territorial claim that would be difficult to realize. “Russia’s economy is poor,” he said, “but its military is very strong.”
Fan Xianrong, China’s consul-general in Khabarovsk, said in an interview that “the question of territorial claims between Russia and China was resolved once and for all.”
It seems clear, however, that the Chinese presence in Siberia is destined to grow. The only question is how dramatically.
“Today, it’s quite obvious that we’re incapable of developing the Far East with our own labor resources, and nearby there’s this country with lots of working hands,” said Viktor Smolyak, spokesman for Ali Co., which runs the Khabarovsk market.
“I see the future of the Russian Far East as a Russian territory, but with a very big Chinese population on this territory,” Smolyak said. “The Russian government will have jurisdiction, we’ll have our garrisons, but the economy will be controlled by the Chinese.”
The Russian-owned outdoor market will soon face competition from a Chinese-financed indoor complex now under construction, which will rent space to 3,000 shops and trading firms. That project is supervised by Liu Dexin, 52, one of five private Chinese investors who are putting up $15 million. Liu started on the road to wealth 13 years ago, bartering Chinese sugar for Russian Lada cars.
Most Chinese come to Russia legally with tourist or business visas, but many overstay and relatively few hold work permits or pay taxes. They say police show little desire to deport them but great interest in collecting bribes disguised as fines.
“Sometimes they even fine people who have work permits,” said Li Bin, 21, a woman who has worked in an open-air market for three years. “I think they’re just looking for excuses.” The standard rate for fines or bribes for immigration offenses, she said, has gone from about $1.70 in 2002 to $54.
Zheng, the young man who dreams of launching his own agribusiness, works alongside Russians in a greenhouse built of birch poles and plastic. He cultivates tomatoes, cucumbers, peppers, eggplants, cabbage and other vegetables.
Zheng works for a Chinese boss and earns $120 per month, plus room and board. He believes that in three more years he’ll have enough saved to rent land for himself, and that a few years of running his own farm should enable him to return with $60,000, a small fortune in a Chinese village. For now, he sleeps in a room with three or four other men in a wooden shack with no electricity.
But people like Zheng may be too late to make it big here, said Wu Ziguo, 34, a university graduate who majored in Russian, came to Khabarovsk in 1999 and now runs a farm business through a Russian front company.
He lives in a comfortable apartment with his wife, Shang Lijian, 32, who helps run the enterprise while her mother raises their 6-year-old son back in Shandong province. They’re happy here, aside from missing their child, whom they see twice a year on visits home, he said.
“I rented a piece of land, put up a greenhouse and started selling vegetables, and we settled down here,” Wu said. “When I first came, there weren’t many Chinese. Now there are more Chinese, and everybody’s competing to get their vegetables to market early. A few years ago, people could make money more easily. Now you can still make money, but not so much.”
Chinese won’t overwhelm the Russians in Siberia partly because legal restrictions make it difficult or impossible to get permanent residence, and partly because the great majority of Chinese simply want to earn some money and go home, Wu said.
Wu was enjoying an outing with Chinese friends just outside Khabarovsk, with shish kebab cooking on a campfire as several of the group fished in a stream. The friends included Guo, the other vegetable business owner, who projected brash self-confidence when asked about the territorial issue.
“We know from our history class that it’s our land,” Guo said. “OK. We’re having a picnic now, and fishing our fish in our river.
“Frankly, I don’t care if we ever get this land for real. I don’t care what islands Putin gave to China. All I care about is how much money I’m making here.”

TITLE: UN Special Envoy to Assess Zimbabwe
AUTHOR: By MacDonald Dzirutwe
PUBLISHER: Reuters
TEXT: HARARE  — A special envoy of UN Secretary-General Kofi Annan arrived on an assessment trip in Zimbabwe on Sunday amid a mounting global outcry over President Robert Mugabe’s crackdown on illegal shantytowns.
Anna Tibaijuka, the executive director of UN-HABITAT, the global body’s housing agency, will spend several days observing the results of “Operation Restore Order,” a clean-up campaign that has demolished tens of thousands of homes and shops and left as many as 300,000 people homeless.
“I’m here at the request of the secretary-general to assess the situation here and to see how we can work together to put everything in the way that everybody would like to have them,” said Tibaijuka, of Tanzania.
“We are basically looking at the operation ... and to see the impact and how we can work together to assist all those affected. 
The secretary-general is of course following the situation with keen interest.”
Tibaijuka’s trip comes as Western countries ramp up their criticism of the operation, which has seen at least two children crushed to death in demolished houses and deprived countless families of housing or income.
British Foreign Secretary Jack Straw last week accused Mugabe of perpetrating a “horror” on his own people, while European Union Commission President Jose Manuel Barroso chided the African Union on Saturday for failing to take a strong enough stance on Zimbabwe’s human rights record.
Commonwealth Secretary-General Don McKinnon said Sunday that Africa’s failure to act on Zimbabwe could hamper a deal by the G8 group of rich countries to secure a deal on tackling African poverty at the G8 summit in Scotland next week. 
Mugabe, whom critics accuse of using the campaign to target political opponents in Zimbabwe’s urban shantytowns, said he welcomed the chance to explain the operation to the UN.
“Our people ... deserve much better than the shacks that are now being romanticized as fitting habitats for them,” Mugabe said in remarks published in the state media Saturday.
Mugabe repeated that the operation was aimed at rooting out black market trading and other lawlessness in poor urban neighborhoods, as well as to address health problems created by overcrowding and poor sanitation.
The state-run Sunday Mail newspaper quoted highly placed sources as saying the demolition operation was almost complete and would be followed by a new program to build houses and business premises for those caught in the crackdown on illegal buildings.

TITLE: Evangelist Gives ‘Last’ Sermon
PUBLISHER: The Associated Press
TEXT: NEW YORK — Marking a milestone moment for U.S. religion and world evangelism, the Rev. Billy Graham on Sunday preached what could be his last revival sermon. 
Toying with the situation, Graham told thousands of people gathered in Queens that he hopes “to come back again someday,” and told journalists who asked if this is the end of his revival career, “I never say never.”
Graham’s voice was strong despite various infirmities, but he spoke for only 23 minutes before issuing his telltale invitation to listeners to come forward and publicly demonstrate commitments to Jesus as savior.
About 90,000 people flocked to Flushing Meadows-Corona Park despite blistering afternoon heat to hear his sermon. 
Graham, 86, is suffering from fluid on the brain, prostate cancer and Parkinson’s disease. 
He uses a walker due to a pelvic fracture.

TITLE: IN BRIEF
TEXT: Shuttle Risk ‘Small’
CAPE CANAVERAL, Florida (AP) — Officials believe the risk of potentially lethal pieces of ice flying off the external fuel tank and striking the space shuttle is low enough to proceed with plans for a mid-July launch of Discovery. 
The conclusion came after a Friday meeting of NASA managers and engineers. The launch window opens July 13.
Discovery was transported to the pad in April but removed May 26 after NASA determined that potentially deadly pieces of ice could form over an expansion joint on the external fuel tank after the super-chilled fuel was loaded. 
Two more meetings this week will determine whether Discovery lifts off on schedule. 

Voice of Tigger Dies 
LOS ANGELES (Reuters) — Paul Winchell, a famed ventriloquist best remembered as the voice of the irrepressible Tigger in the Winnie the Pooh series, has died, an associate said on Sunday. He was 82. Winchell died Friday in the Los Angeles area, according to an associate Johnny Blue Star and a web site operated by Winchell’s daughter, the actress April Winchell.
Winchell was a fixture in U.S. children’s television in the 1950s and 1960s in a string of shows featuring him giving voice to the sidekicks he created and made famous, the dummies Jerry Mahoney and Knucklehead Smiff.
But it was his voice work on a wide range of cartoons and animated features that captivated a later generation of viewers, including turns as Gargamel of “The Smurfs,” Dick Dastardly of “Wacky Races” and Fleegle on “The Banana Splits Adventure Hour.”
Winchell was most famous for his voicing to the hyperkinetic Tigger in a series of appearances in Walt Disney Co. Winnie the Pooh productions for over three decades beginning in 1968.

Fetus Cut From Boy
DHAKA (AFP) — Doctors in Bangladesh removed a dead fetus weighing several kilograms from a teenage boy in a rare case of a so-called inclusion twin lodged in his abdomen, a surgeon said. 
The 16-year-old patient was admitted to hospital Saturday after complaints of severe stomach pains. 
During an operation, the medical team removed the dead fetus of his twin brother that the teen had carried in his abdomen since birth, M.A. Mazid, the head of the surgery department at Bangabandhu Medical University hospital, said.
“After the operation we found a dead child weighing 2 kilograms in his abdomen. Except the head, all other limbs of the baby were developed,” Mazid said.
The condition appeared to be a “fetus in foeto” or inclusion twin, said Nurun Nahar, assistant professor of the gynecology department at the university.
The condition is extremely rare, Nahar said, and happens when two fetuses are conceived as conjoined twins in the uterus of the mother. One enters into the other during pregnancy.

TITLE: U.S. Plans Plutonium
PUBLISHER: Reuters
TEXT: NEW YORK — The United States plans to produce highly radioactive plutonium 238 for the first time since the Cold War, The New York Times reported on Monday. 
The newspaper quoted project managers as saying most, if not all, of the new plutonium was intended for secret missions. The officials would not disclose details, but the newspaper said the plutonium in the past powered espionage devices.
The Times said Timothy Frazier, head of radioisotope power systems at the U.S. Energy Department, vigorously denied in a recent interview any of the classified missions would involve nuclear arms, satellites or weapons in space.
“The real reason we’re starting production is for national security,” Frazier was quoted as saying.
Officials at the Energy Department could not be reached for comment.
The program, which the newspaper said had raised concerns among environmentalists, would produce 150 kilograms over 30 years at the Idaho National Laboratory. The program could cost $1.5 billion and generate over 50,000 drums of hazardous and radioactive waste, federal officials told the Times.
Plutonium 238 is hundreds of times more radioactive than plutonium 239, which is used in nuclear arms, according to the newspaper. Plutonium 238 has no central role in nuclear arms, it added.

TITLE: Ahmadinejad Vows to Restart Nuke Program
AUTHOR: By Kathy Gannon
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — Iran’s ultraconservative president-elect, at once defiant and at ease, vowed Sunday to restart the nation’s controversial nuclear program and warned European negotiators that building trust required a mutual effort. 
Asked about relations with the United States during his first news conference since Friday’s election, Mahmoud Ahmadinejad said Iran “is taking the path of progress based on self-reliance. It doesn’t need the United States significantly on this path.”
In a sign of tensions likely ahead, Secretary of Defense Donald Rumsfeld said Ahmadinejad was “no friend of democracy” and dismissed the vote as a “mock election.”
Ahmadinejad entered the crowded chambers in Iran’s municipal building with little fanfare, maintaining the unassuming style embraced by the roughly 17 million Iranians who voted him to power in a landslide victory.
He fielded questions confidently and smiled broadly when asked by an Iranian female journalist wearing a colorful head scarf whether he would introduce a strict dress code.
It wasn’t his job to decide, he said.
“I am the president. There are people who make those decisions,” Ahmadinejad said.
In his opening statement, he promised to shun extremism and cobble together a moderate regime. Yet critics say his election only consolidated the hard-liners’ hold on power, and no reform-minded people remain in the government.
“He is no friend of democracy,” Rumsfeld said on “Fox News Sunday.” “He is a person who is very much supportive of the current ayatollahs, who are telling the people of that country how to live their lives, and my guess is over time the young people and women will find him, as well as his masters, unacceptable.”
A key concern for the United States is Iran’s 20-year-old nuclear program, revealed in 2002.
The United States alleges the program is aimed at building atomic weapons. Iran insists it is only interested in generating electricity. 
Iran suspended all uranium enrichment-related activities in November to avoid possible sanctions from the UN Security Council, but it said all along the suspension was temporary. 
France, Britain and Germany have offered economic incentives in hopes of persuading Iran to permanently halt enrichment.

TITLE: Rumsfeld: Iraqi Revolt Could Last Years
PUBLISHER: The Associated Press
TEXT: WASHINGTON — Insurgencies can go on for years, but the violence ravaging Iraq will eventually be quelled by homegrown forces rather than U.S. and other foreign troops, U.S. Defense Secretary Donald Rumsfeld says. 
The violence could even worsen as Iraqi officials draft a constitution and Iraqi citizens prepare to install a new government by the end of the year, Rumsfeld said in television interviews Sunday.
He and other senior military officials asked Americans to be patient and support their troops as the war progresses.
“It ebbs and flows,” Rumsfeld told “Fox News Sunday.” “The progress on the political side is so threatening to the insurgents that my guess is it could become more violent between now and the constitution referendum and the election in December.”
Deadly attacks are a daily reality in Iraq, where an Associated Press count through Sunday showed 1,736 U.S. troops killed.
“That insurgency could go on for any number of years. Insurgencies tend to go on five, six, eight, 10, 12 years,” Rumsfeld said. “Coalition forces, foreign forces are not going to repress that insurgency. We’re going to create an environment that the Iraqi people and the Iraqi security forces can win against that insurgency.”
The latest Associated Press-Ipsos poll shows public doubts about the war reaching a high point — with more than half saying that invading Iraq was a mistake.
General John Abizaid, the top U.S. commander in the Middle East, appealed for public support of the soldiers and their mission. 
“We don’t need to fight this war looking over our shoulder worrying about the support back home,” he said on CNN’s “Late Edition.”
The Sunday Times of London reported that U.S. officials recently met secretly with Iraqi insurgent commanders north of Baghdad to try to negotiate an end to the bloodshed.

TITLE: Warships Mark Battle of Trafalgar
AUTHOR: By Jeremy Lovell
PUBLISHER: Reuters
TEXT: LONDON — Warships began gathering off the coast of England on Saturday for the world’s biggest review of navies to be held Tuesday in front of Queen Elizabeth II.
By Sunday night a total of 156 ships and warships from 40 navies were massed in front of the naval base at Portsmouth to commemorate naval hero Horatio Nelson’s victory over a combined French and Spanish fleet on Oct. 21, 1805.
“It is the biggest ever international naval assembly in terms of the number of fleets involved. There are ships from more than 40 countries and navy heads from more than 50 navies,” a spokeswoman for Trafalgar 200 said.
France, the United States, Spain and Italy have sent aircraft carrier battle groups to join a Royal Navy carrier group at Spithead, with navies from Australia to Russia also sending warships and merchant ships.
The Battle of Trafalgar off the Spanish coast spelled the start of the end for Napoleon Bonaparte’s conquest of Europe and gave Britain command of the seas for a century. But Nelson, aged just 47, was killed by a French sniper in the epic seabattle.
“The French had to think quite hard about if they wanted to be involved. But in the final analysis this is a celebration of maritime nations,” Fleet Admiral Alan West said.
“Even in today’s global village, the world’s navies are the oil that ensures the safety of international commerce — most of which still moves by sea.”
The fleet review is one among a host of festivities to mark the 200th anniversary of the battle, including an exhibition at the National Maritime Museum comparing Nelson and Bonaparte and noting how similar they were in character.
On Tuesday the Queen will be aboard the Endurance, the Royal Navy’s Antarctic survey vessel, sailing up and down the lines of assembled ships.
It is the first fleet review since the Queen’s Silver Jubilee in 1977.

TITLE: Dutch Crown Prince a Father
PUBLISHER: Reuters
TEXT: AMSTERDAM — Princess Maxima, the wife of Dutch Crown Prince Willem-Alexander, gave birth to a baby girl Sunday, the third in line to the Dutch throne.
“We have another beautiful and healthy daughter,” Willem-Alexander, the Prince of Orange, said in a statement.
In the Netherlands, boys and girls have the same rights to the throne. The current and past two monarchs have been queens. The girl will be third in line to the Dutch throne after her father and her sister Catharina-Amalia, born on Dec. 7, 2003.
The couple have not yet decided on a name for the baby who was born in the early afternoon at the Bronovo hospital in The Hague weighing almost 3.5 kilograms. Television programs were interrupted with the news of the birth.
Willem-Alexander, Queen Beatrix’s eldest son and heir to the throne, married Argentinian-born Maxima Zorreguieta in Amsterdam in February 2002.
The marriage attracted controversy because Maxima’s father served as agriculture minister during Argentina’s 1976-83 military dictatorship.

TITLE: Japanese Emperor Pays Tribute
PUBLISHER: Reuters
TEXT: SAIPAN — Japanese Emperor Akihito went to  the site of one of World War II’s most decisive battles Monday to pay tribute to those who died in a conflict that still haunts Tokyo’s ties with Asian neighbors, 60 years after its end. 
The journey to the U.S. territory of Saipan — the first by Akihito outside Japan to mourn war dead — coincides with a chill in Tokyo’s ties with China and South Korea, where many feel Japan has not owned up to its wartime atrocities. 
“Sixty-one years ago today, a fierce battle was still being fought on this island, Akihito said before he and Empress Michiko left Tokyo.  
“Our hearts ache when we think of those people who fought at a place where there was no food, no water, and no medical treatment for the wounded,” he added. 
Akihito attends annual ceremonies to mark the Aug. 15 anniversary of the war’s end, and in 1995 he paid respects at war memorials in Tokyo, Hiroshima, Nagasaki and Japan’s southern island of Okinawa to mourn war dead. 
“This time, on soil beyond our shores, we will once again mourn and pay tribute to all those who lost their lives in the war and we will remember the difficult path the bereaved families had to follow, and we wish to pray for world peace,” he said.

TITLE: Sharapova, Myskina Into the Quarterfinals
PUBLISHER: Reuters
TEXT: WIMBLEDON, England — Champion Maria Sharapova, unbeaten on grass for two years, powered into the quarterfinals at Wimbledon on Monday, demolishing 16th seed Nathalie Dechy of France 6-4 6-2 in Court One sunshine. 
Guadeloupe-born Dechy put a up a brave first-set fight against the Russian No. 2 seed, who has conceded only 17 games and no sets in four rounds so far. 
She had no answer to Sharapova’s booming serve, however, conceding the first set to an ace and losing her own serve twice in the second. 
The Russian next meets compatriot Nadia Petrova in the quarterfinals, who beat Czech Kveta Peschke 6-7 7-6 6-3. 
In a repeat of 2004’s French Open final, the Russian No. 9 seed Anastasia Myskina beat compatriot Yelena Dementyeva for a place in the quarterfinals. The No. 6 seed took the first set handily but Myskina rallied to take the match 1-6 7-6 7-5.
Twice former champion Venus Williams made Jill Craybas pay for having had the temerity to show her sister Serena the Wimbledon exit at the weekend by thrashing her 6-0 6-2 in the fourth round earlier on Monday. 
Only once before had a player knocked both Williams sisters out of a grand slam and Craybas never looked like matching Martina Hingis’s feat at the 2001 Australian Open. 
Playing on the same Court Two, where Craybas beat the younger Williams sister on Saturday, Venus restored family pride in 63 minutes to claim her place in the quarter-finals at the All England Club. 
Venus, who won the women’s singles in 2000 and 2001, was still not looking at her imperious best of four years ago but was not unduly troubled as she set up a last-eight meeting with France’s Mary Pierce. 
Craybas, ranked 85 and aged 30, held serve and broke her compatriot to open the second set but was again made to rue her presumption with her 25-year-old opponent rattling off the next six games to seal victory. 
Reduced now to 14th seed at a tournament where she played in the first four finals of the new century, Venus is looking to win a grand slam tournament for the first time since the 2001 U.S. Open. 
Third seed Amelie Mauresmo overcame a torrid start to beat experienced Russian Yelena Likhovtseva 6-4 6-0.
With double faults and stray backhands littering her game, the 25-year-old Mauresmo found herself 2-0 and 4-2 down against an opponent who reached the semis at Roland Garros this month.  
Likhovtseva then crumbled badly, allowing Mauresmo to take charge. Mauresmo broke back with the aid of a couple of Likhovtseva double faults, then produced a commanding service game laced with exquisite volleys to level at 4-4. 
The fifth service break of the first set put Mauresmo ahead for the first time and after serving out the set she romped to victory in 62 minutes. 
French Open finalist Mary Pierce made unruffled progress into Wimbledon’s quarter-finals on Monday, beating Italy’s Flavia Pennetta 6-3 6-1.

TITLE: Russian Ace Wants To Be An American
AUTHOR: By Matthew Brown
PUBLISHER: Staff Writer
TEXT: A U.S. newspaper called him “the pride of Northern California tennis” but unseeded sensation Dmitry Tursunov, who was due to play No. 9 seed Sebastian Grosjean at Wimbledon on Monday for a place in the quarterfinals, has “no idea” if he’ll ever become an American citizen.
Moscow-born Tursunov was also hailed by Russian newspapers last weekend after beating No. 6 seed Tim Henman in the second round on Thursday and former quarterfinalist Alexander Popp in the third round on Saturday.
Tursunov, 22, has lived in California since he was 12 and has been trying to get a U.S. passport ever since. 
“It’s been 10 years,” Tursunov told the Wimbledon championship’s official web site. “There’s been some mishaps with applications.”
The journeyman player — now ranked 152 in the world — said traveling on a Russian visa has hurt him profesionally.
“I’ve missed two or three tournaments this year because I couldn’t get a visa for the country. I do get fined for that, suprisingly. It’s not really my fault, but there is a firm rule that says if you are entered into a tournament, you miss it without pulling out at a certain time, you do get fined.”
Tursunov’s giant-killing winning streak earned him accolades from The San Francisco Chronicle and Russian daily Smena, which called him the tournament’s “most sensational” player. 
British press reaction to Tursunov’s rise at the expense of British No. 1 Henman was muted by the surprise success of 312th ranked Scots teenager Andy Murray, who went on to lose to 18th seed David Nalbandian in the third round on Saturday.
Tursunov has battled wih injury in his five years as a professional player. Last July 4, America’s independence day holiday, he broke a bone in his spine in a boating accident and has a bad knee.
The Russian’s five-set marathon against Henman and three-hour victory over Popp have tested the player as never before in his career.
“But thank God, you know, they have good antiinflammatories here.”
Unlike the top-flight in tennis — notably U.S. based compatriot and defending Wimbledon women’s champion, 18-year-old Maria Sharapova — Tursunov has no sponsorship deals.
But even Tursunov’s Wimbledon showing may not change that, he said. 
“I think it’s changed. Now, I’m 22. By prodigy standards, I’m pretty old. Neither fish nor fowl. I’m not an up-and-comer and I’m not a veteran either. It’s very difficult for me to understand why I wouldn’t have a sponsor. 
“Technically, there are a lot of people who get free clothes, like [French Open champion] Justine Henin’s husband. He get’s sponsored by Adidas even though he doesn’t play tennis.”
Tursunov admits to getting free rackets, but because he uses a model that has to be ordered in advance, he only has two left as he enters Wimbledon’s second week. 
Tursunov said Saturday he would borrow a racket from his coach if he beats Grosjean to reach the quarterfinals.

TITLE: Birdie Kim Wins U.S. Women’s Open With Amazing Birdie
AUTHOR: By Eddie Pells
PUBLISHER: The Associated Press
TEXT: CHERRY HILLS VILLAGE, Colorado — The grueling golf course turned Annika Sorenstam into a sideshow and made Michelle Wie look like the teenager she is. It left some players in tears and sent dozens more home jolted by such a demanding test. 
Finally, stunningly, a girl named Birdie proved that Cherry Hills really could be tamed — or at least subdued long enough to produce one of the most thrilling U.S. Women’s Open finishes in history. 
Birdie Kim, the 23-year-old Korean who changed her name so she would stand out, made a 30-yard sand shot to — what else? — birdie on the final hole Sunday to defeat heartbroken 17-year-old Morgan Pressel. 
“It was like, ‘I can’t believe that actually just happened,’” Pressel said, recalling her reaction when she saw Kim’s shot go in while she stood on the 18th fairway. 
Tied with Pressel and playing one group ahead of her on 18, Kim readily acknowledged that when she stepped down into the deep bunker to the front-right side of the green, she was only hoping to get the ball close enough to save par, then hoped for a playoff. 
“But I never thought about the ball going into the hole,” she said. 
It did. Pressel put her hands on her head in dismay. Kim raised her arms above her head in jubilation. And after Pressel’s desperate try to match Kim’s birdie failed, Kim, who closed with a 1-over 72, had the victory with a score of 3-over-par 287 in the toughest test in golf. 
Kim’s birdie was just the fourth of the tournament on the 459-yard, par-4 18th, the last stop on a course that played 4.797 strokes over par over in days and put an unceremonious end to Sorenstam’s quest for the Grand Slam. 
Trailing by five coming in and knowing she would need to play aggressively to have a chance, she promised to hit more drivers in the final round, and she did — off a tree and into a creek on No. 1 and into the rough on No. 2. 
The result was two quick bogeys en route to a round of 77. She finished 12-over-par 296, tied for 23rd place and said she wasn’t second-guessing her game plan, which went from conservative to aggressive and back again. 
“Right now it feels like it’s super-difficult,” Sorenstam said of Cherry Hills. “I mean, just look at the scores. I think they say it all.”
Wie came into the day with a share of the lead. She ended it with an 82, a humbling round that left her joking that she’d wished she’d had a satellite attached to her ball so she would’ve had an easier time finding it all day in the ankle-high rough. Despite Wie’s struggles, this tournament was a good one for the amateurs. 
“I know I can win,” Pressel said, her face streaked with tears, still shocked from the unexpected finish. “I know I can play well. I was there the whole day. But I finished second and I’m not holding a trophy.”
She was one of the very few to get ahead against Cherry Hills, making five birdies over her first eight holes of the tournament to get to 5 under. She gave those shots back, but hung in there and had chances. 
After watching Kim sink her amazing shot, Pressel knew she had to do something special on her second shot from the middle of the 18th fairway. Instead, she blocked one into the short, right rough. She pitched that to 20 feet, ending her chances at the win and starting the flow of tears. 
As a rookie last year, she went by her given name, Ju-Yun Kim. But she came out this year with a new nickname, hoping to stand out from the other five players with Kim as a surname on the LPGA Tour.