SOURCE: The St. Petersburg Times
DATE: Issue #1104 (70), Tuesday, September 13, 2005
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TITLE: Police Vow To Protect Foreigners
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: As local tourism industry players report a decline in visitors and predict further losses, the city police has announced additional security measures aimed at improving the city’s image for potential tourists.
Sergei Korneyev, head of the Northwestern branch of the Russian Tourism Industry Union, or RST, cited exorbitant prices and security concerns among the top factors hampering tourism development in St. Petersburg.
Alexander Ivershen, deputy head of the St. Petersburg police special task force investigating crimes involving foreigners, admits the figures have been growing: 779 crimes against foreigners have been registered in town between January and September, a hike from the typical 500-600 crimes for the same periods of time in 2000-2004. Speaking at a round table on incoming tourism in Agency For Business News on Friday, Ivershen was quick to add that crimes against foreigners account for only one percent of all criminal activity.
“Theft and robbery are the most frequent crimes committed against foreigners, and Germans and French are the most common victims,” Ivershen said. “Although Finns make the lion’s share of foreign tourists in town, they very rarely report that they have been victims of theft.”
In August alone, the police arrested six organized groups of pickpockets operating around Nevsky Prospekt, Ivershen said. St. Petersburg’s central thoroughfare is now patrolled jointly by the regular police, its special task forces and the army, he added.
But news agencies are continuing to report new crimes against foreigners every week.
According to a recent survey commissioned by the RST, the number of visitors to St. Petersburg this summer is 30 percent down from last year, and experts are expecting a further decline next year.
The RST polled 115 city tour operators, which reported an average 30-percent decline in foreign and Russian visitors. According to City Hall’s tourism committee, some 3 million people, both Russian and foreign, visited the city last year.
Security concerns were mentioned by more than two-thirds of respondents in the RST poll. Not only do foreign visitors routinely get robbed, but they then have to go through nightmarish hassles trying to register the theft to make claims on their insurance policies.
RST’s Korneyev said that many thefts and robberies go unreported because of red tape and procrastination. This means that optimistic police reports underestimate the true crime levels.
Most of the city’s tourism industry professionals agree that lack of a consistent and efficient promotion campaign for the city is damaging St. Petersburg’s already fading image as an attractive travel destination.
Speaking at the Fifth Baltic PR-Weekend, which finished in town on Sunday, Loula Zaklama, the newly elected president of the International Public Relations Association (IPRA) for the year 2006, and a native of Egypt, gave several examples of smart, appropriate and winning PR-strategies used in her country to stop tourism declines after terrorist attacks.
On Nov. 17, 1997, six terrorists dressed in police uniforms, opened fire against tourists at Luxor’s Temple of Hatshepsu, killing 70 people. Luxor is the Egypt’s prime tourist resort.
“The investigation showed that the security system was imperfect, and after it was improved the resort needed to inform the world about it,” Zaklama said. “The positive news had to be reported through sources not affiliated with the Egyptian state in any way to avoid speculation of bias, and so a local hotel chain sponsored a visit of a number of foreign security experts.”
The experts came from the countries which traditionally send the largest shares of tourists to Egypt — Germany, Japan and the USA — and examined the situation. Upon returning to their home countries, they published their conclusions.
“The goal was to communicate better security, and it was done at a moderate cost, through the right means, to the desired result,” Zaklama said. 
The expert stressed that not every such accident or cataclysm requires a PR-campaign to combat the consequences. 
For instance, after the explosions in Sharm el-Sheikh last summer, the spin-doctors weren’t brought in. The authorities felt that the terrorist attacks were likely to be overshadowed by the London blasts.
Developing a thorough strategy is a time-consuming process. Wolfgang Schneider, assistant product manager with Ikarus Tours, a travel agency from Konigstein, Germany, suggested that, for the time-being, travel industry professionals in St. Petersburg could at least sponsor a series of promotional TV advertisements to be shown abroad to draw more visitors to the city.
“Instead of wanting people to come and see your city, why not show them something in a short film to attract them,” Schneider said. “One of my clients, who originally planned to visit St. Petersburg during the White Nights, changed his mind when he saw a TV program showing the city in winter. It was a good example of efficient promotion of the winter season in your city.”

TITLE: Russia Outranks China for Business
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia is a far easier place to do business than other developing economies like China or Brazil, according to the World Bank’s third annual ranking, to be published Tuesday.
As a place to start up and run a business, Russia ranks No. 79 of 155 countries, just below Romania but right above European Union member Greece. 
Usual suspects New Zealand, Singapore and the United States occupy the top three spots, and ex-Soviet tiger economies Lithuania and Estonia hold down spots No. 15 and No. 16, respectively.
There is no one-to-one comparison with last year’s study, as rankings were not assigned to all countries last year.
The World Bank offers measured praise to the Russian government, saying it needed to simplify the issuing of licenses and property registration, as well as raise the retirement age for women.
“The pace of reforms in Russia has slowed down recently, but it still moves faster than its main emerging markets competitors,” said Simeon Djankov, a senior economist at the World Bank and one of the report’s authors. 
Djankov said Russia compared favorably to other major developing economies such as China, No. 91; India, No. 116; and Brazil, No. 119. Uzbekistan is the study’s lowest ranking former Soviet republic, at No. 138, with the Democratic Republic of Congo bringing up the rear at No. 155.
Although Russia still falls far short of leading liberal economies like Australia or Hong Kong, the government has taken steps to make doing business easier for the second consecutive year, the World Bank says in its report.
For example, it has become somewhat easier and cheaper to start a business in Russia, the study finds — 33 days and 8 procedures are needed this year as opposed to 36 days and 9 procedures last year. In the United States, by contrast, it takes 5 days and 5 procedures.
Registering property in Russia is tedious — but at least it’s cheap. Russia ranks among the top ten countries with the lowest cost to register real estate, at 0.4 percent of the property’s value. But now it takes 52 days to complete the process, a sharp increase from the 37 days it took last year. In New Zealand a new property-owner cuts through the red tape in two days.
In terms of getting licenses, Russia ranks only three spots from rock bottom.
The World Bank has found that a Russian entrepreneur wanting to build a two-story warehouse covering 1,300 square meters would have to complete 22 procedures, taking 528 days. Only businessmen in Iran and the Ivory Coast would need more time, the study says.
The central government — and not regional authorities — should be charged with issuing licenses to speed up the procedure, said Djankov.
The World Bank study partially dovetails with a study published last week by Canada’s Fraser Institute, which placed Russia 115th out of 127 countries in terms of economic freedom, on a par with Togo and Rwanda. In the Fraser study’s index of red tape facing businesses, Russia ranked 
No. 95.
Nevertheless, the World Bank places Russia among the top ten countries  in terms of ease of hiring new employees, along with Switzerland and Namibia. At the same time, it became more difficult to fire workers, the report finds.
The World Bank advises the government to make the retirement age equal for men and women. In Russia, where women retire at 55 and men at 60, “business suffers as it pays high pension contributions and loses many productive workers early,” the study says. As a result, women also see their career opportunities suffer, the World Bank says.
In other areas, the World Bank commends Russia for eliminating obstacles to sharing credit information; speeding up customs declarations for imports; and simplifying taxation for a third year in a row.
Last year Russia was the “second fastest reformer” among CIS countries after Georgia, the World Bank says.
Nikolai Ostarkov, the head of executive committee at Delovaya Rossiya, a lobby group for mid-sized businesses, took issue with some of the report’s findings.
Even if the tax burden has become lighter, tax administration is becoming worse, he said. The tax authorities are “moving into” businesses, he said, taking over their own rooms while they conduct tax checks.
“If in other countries one accountant can work with 50 companies, here several accountants are needed for one company,” he said.

TITLE: Street Kids Capture Life of Grime in Photos
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: A hypodermic syringe tucked behind an ear, a neglected teenage girl drinking beer on one of the city’s beaches, a paper plate with a hot dog held in a dirty child’s hand — just a few of the images captured by local amateur photographers attempting to depict the life of St. Petersburg’s homeless children. 
The pictures are part of a photographic exhibition opened at the Art Gallery at 10 Ulitsa Pushkinskaya on Friday.
“At this exhibition, we wanted to show how these children live: what they eat, where they sleep, what they do,” said Yekaterina Vodopyan, development director of Doctors To Children, a St. Petersburg-based NGO founded by specialists and volunteers from Doctors of the World-USA.
It’s hoped that the exhibition, entitled “Looking at Them Looking at Us,” will draw attention to the problem of street children and bring about a coordinated effort to help homeless children, Vodopyan said.
“I went to the street when I was eight,” said Masha, now 18, one of the street children taking part in the exhibition and contributing photographs.
“My mother drank a lot of alcohol and didn’t care much about where I was.  Soon I got used to this life, and began to sniff toxic stuff.  It’s dangerous for children to live like that, but I always want to go back to the street,” Masha said.
Masha said that one of the reasons that she keeps returning to the streets is her street friends, who she’s known for years, and who are featured heavily in her photographs.
As well as the children themselves, the organizers of the exhibition managed to involve amateur photographers, who joined up with a group of street children in order to take pictures of their life.
Bogdan Vodopyan, a physicist and amateur photographer, said that the life that he saw was sad, and often desperate.
“It’s as if these children are living in a parallel world.  Nobody loves them, they are physically weak, people beat them up, they don’t know how to read or write.  At the same time, they can be dangerous, because even someone’s small change can be a target for them,” he said.
With his pictures, Vodopyan also wanted to show the two extremes that these children live in: when they are cheerful and normal, like any other child, and when they are irresponsible, sniffing toxic substances and almost not realizing what’s going on around them, Vodopyan said.
“I was really shocked that these children do not understand what kind of situation they’ve found themselves in, and that they have no motivation to do anything in this life,” he said.
In his pictures, Vodopyan has focused on details of the street children’s life. For a photo titled “The Road To The Cellar,” he took a close-up of a child’s sneaker stepping in a dirty puddle in the darkness that leads to the cellar where the child lives.  In another picture entitled “A Habit — Tucking It Behind Your Ear,” Vodopyan features a syringe for drugs casually placed behind a teenager’s ear.
The close-ups of self-made beds in dingy attics show the reality of street children’s everyday lives.  Dirty mattresses are covered with dirty covers and placed next to central heating tubes, which warm the children during the cold winters.
Another volunteer photographer, Yuliya Vorokhova, featured three boys sniffing glue while sitting on a sidewalk, their eyes clearly affected by the noxious fumes.  
Volunteer photographer Elvira Araslanova created a large portrait entitled “Portrait of A Little Boy Who Lives On The Roof” - a moving picture of a shaggy-haired, dirty, but smiling street boy.
Bogdan Vodopyan said that after spending time with street children he reached the conclusion that they need a special form of help.
“Just giving them food isn’t real help. It won’t save them.  These children need psychologists, who would explain to them that only through their own labor can they change their lives,” he said.
The problem requires a well-developed policy from the state, Vodopyan said, adding that at present he doesn’t see any clear policy on the issue coming from the Russian government.
Throughout the 20-day run of the exhibition, the gallery will also host a variety of thematically related events: fiction and documentary films, a roundtable discussion, and a presentation on foster families given by social workers.
On Sept. 30, during the closing ceremony, the results of voting by visitors to the exhibition will be announced, and the young authors of the works chosen will be presented with cameras.

The exhibition is open to the public through Sept. 30, 3 p.m. to 7 p.m.  Entrance is free.

TITLE: Runners Complete Jog Across Russia
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The Great Russian Race, an unprecedented international running relay, in which British and Russian runners covered the 11,000 kilometers between Vladivostok and St. Petersburg, finished in the center of town last weekend. The British team reported being exhausted by the heat, fascinated by the local historical monuments, and disappointed by the pollution that they saw along the way. 
Over $250,000 has been raised by participants in the race and its organizers for several charitable projects targeting Russian homeless and orphaned children in different parts of the country.
The project was organized by the UK-based World Race Trust, which specializes in organizing races and marathons in extremely harsh conditions across the globe. Two hundred and fifty-five runners took part in the Great Russian Race as officially registered participants, with more than 3,500 amateurs joining them for various stages.
The runners began their odyssey on May 28 in Vladivostok. The route was divided into fifteen equal sections, and everyone was allowed to choose one or several sections to run. The schedule was tight, and runners covered at least 20 kilometers every day, with an entire section taking about six or seven days to complete. 
Margo Harvey, 46, works in accountancy in London and describes herself as a “fun runner.” A keen participant in a number of international marathons and relays, during the Great Russian Race she ran in the final section between Moscow and St. Petersburg as well as in section 7 in Siberia. Harsh road conditions and high humidity at 35 degrees Celsius made the route a memorable experience. “The most challenging thing was the heat,” she said. “I once ran in the Sahara in 45 degrees, and that was much easier.”
For most members of the British team, the race was their first opportunity to travel to Russia.
Advertisements were sent to running clubs and published in the “Runners World” magazine in the U.K., while Russians were informed through local sports clubs and branches of the nationwide runners’ federation. 
Most members of the Russian team were experienced professional sportsmen, while the UK team was more eclectic in content, including students, civil servants, sportsmen and even members of the Royal Gurkha Rifles Regiment taking part.
Jonathan Gilling, 32, a resident of Somerset, ran in section 3, around Blagoveshchensk, and the two final stages. “It wasn’t very populated near Blagoveshchensk — we passed some small villages along the Trans-Siberian railway, and it was quite amazing to see the small communities linked to the railway welcome us with open arms,” he recalls. “The road was very hard work, too. It wasn’t a tarmac or concrete surface but more of a wild, run-down dirt track.”
Gilling, who works for the government in England in the environmental field, admits to having been distressed by the state of ecology in Russia that he witnessed along the way. 
“There doesn’t seem to be any facility for the collection of garbage, and rubbish is just piled up wherever it’s convenient,” he said. “Seeing that was the biggest disappointment.”

TITLE: Jewish Community Given New Home
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: The St. Petersburg Jewish Community Home, intended to house the major Jewish organizations and programs of the city’s 100,000 Jewish diaspora, was opened in St. Petersburg on Friday.
“This center is to become an important center of Jewish life in Russia, and one of the most important events in the life of St. Petersburg Jews for the last 100 years,” said Arkady Milman, Israeli Ambassador to Russia, at the opening ceremony.
The construction of the St. Petersburg Jewish Community Home, located on the Petrograd Side on Ulitsa Bolshaya Raznochinnaya, was sponsored by the American Jewish Joint Distribution Committee, or AJJDC, and other Jewish foundations and organizations of North America. 
The 7,000 square meter center will house Jewish charitable, family, student and educational programs being run in St. Petersburg. It will also house an art studio, kindergarten, sport center, computer center, library and archive. 
Ellen Heller, president of the AJJDC, said that the opening of such a major center, aimed at developing Jewish culture and traditions, was another symbol of the renewal of Jewish life in Russia.
“Jewish communities once suffered from the repressive Soviet governments but here, today, we are seeing Jewish renaissance and rebirth in the country,” Heller said.
Mary Kruger, American Consul General to St. Petersburg, who also attended the ceremony, said that the Home represented “a precious gift from the American Jewish community.”
Menachem Mendel Pevzner, St. Petersburg’s chief rabbi, said that in modern Russia the general attitude to people of Jewish nationality is good, as is the attitude of the federal and local governments.
“In the Soviet period, the country’s Jews suffered religious repression, or they could have problems getting the job or education they wanted.  There’s nothing like that anymore,” Pevzner said.
However, he warned that increasing numbers of nationalistic groups, such as skinheads, which pose a threat to Jews and other ethnic groups, are appearing.

TITLE: Japanese Embassy Employee, Wife Attacked in Moscow
AUTHOR: By Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — A Japanese Embassy employee and his wife were attacked by three young men in northern Moscow in what prosecutors called a racially motivated crime.
The couple were waiting for a trolleybus near the CSKA sports complex on Leningradsky Prospekt at around 1 p.m. Saturday when three young men approached them, a Japanese Embassy official said Monday.
“One of the young men hit the employee in the face three times,” said the official, who declined to give his name. “When the trolleybus arrived, they jumped in trying to escape, and when they were getting in the bus, his spouse was also punched in the head.”
The official said the two were treated for bruises at the hospital and released.
He declined to give the employee’s name or position, although Interfax said he was the embassy’s first secretary.
City Prosecutor’s Office spokesman Sergei Marchenko said the employee filed a complaint Saturday evening and that the attack had been classified as a hate crime. No suspects had been detained as of Monday.
The embassy official declined to comment on whether the attack might have been politically motivated. Last month, two Polish Embassy employees and one Polish journalist were assaulted in Moscow in what Polish officials have suggested were coordinated attacks following the mugging of several teenage children of Russian diplomats in Warsaw.
In June, a Japanese national was beaten by three young men outside of a nightclub in Nizhny Novgorod, local police spokesman Alexander Gorbatov said by telephone Monday.
Police are still investigating the June 9 assault, which resulted in minor injuries, and no suspects have been detained.
The most notorious example of anti-Japanese sentiment in recent years came after the Japanese defeated  the Russian national soccer team in the World Cup in June 2002.
The center of Moscow turned into a battleground when about 8,000 soccer fans, who had gathered to watch the game on a giant screen set up across the street from the State Duma, exploded in anger after it became clear that Russia would lose. Some fans began torching cars, smashing windows and fighting police and each other. Two people, including a policeman, died.
Japanese restaurant Ginno Taki, which was offering free viewing of World Cup games on Tverskaya Ulitsa, sustained some of the heaviest damage.

TITLE: Official: Economic Freedom to Decrease
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Russia’s economic freedom has not only improved, it is likely to worsen in the coming years, advisor to the president said last week, as he presented the findings of a report on global financial trends.
Speaking in St. Petersburg on Thursday night, presidential advisor Andrei Illarionov demonstrated this year’s Global Economic Freedom report, which showed Russia’s status unchanged from a year ago.
What’s more, “the growth of the state will further reduce economic freedom,” Illarionov said at a media conference. “Due to an inefficient budget policy, economic growth will [in any case] be lower next year than what it could otherwise be,” he said.
The Global Economic Freedom report was compiled from research by 69 institutes of 63 countries and headed by the Fraser Institute. It ranked 127 countries in order of the volume of economic freedom they provide to citizens and business.
Thirty-eight indicators were used to measure economic freedom in five areas: size of government, legal structure and protection of property rights, access to legal loans, international exchange and regulation.
Personal choice, voluntary exchange, freedom to compete and security of private property were taken as the main freedom components.
According to the report, Hong Kong, Singapore, New Zealand, Switzerland and the United States are regarded as the most economically free countries, while Guinea Bissau, Congo, Venezuela, Zimbabwe and Myanmar finish at the bottom of the list.
Russia floats in at a lowly 115, sharing the same economic freedom rating of 5.1 point (out of a maximum 10) with Togo and Rwanda. In contrast, the Baltic states shine in the index: Estonia takes 9th place, while Latvia and Lithuania share 44th place.
Illarionov said that Russia’s poor ranking was caused in many ways by over-eager spending, allotting a 23 percent hike in spending for the 2006 federal budget against a predicted five to six percent growth in the Gross Domestic Product.
However, some economists did not share in the pessimistic interpretation of the report’s results.
“Russia is artificially underrated at the moment. And the latest steps taken by Russian government were directed at attracting investment and improving economic environment,” said Vladimir Pantyushin, expert for macroeconomics at Renaissance Capital.
“With all respect to the presidential advisor, he is prone to subjective data interpretation,” Pantyushin said, adding that state spending growth includes positive aspects like social network improvement and “not only acquisition of Yuganskneftegaz, which Illarionov had probably meant.”
Chief analyst at Alfa Bank, Chris Weafer, doubted the value of the report’s presentation, seeing it as part of a number of recent reports that gave Russia “unfairly” low rankings.
“If you try to compare highly diversified economies with resource-dependant economy you’ll get inaccurate results,” he said.
Meanwhile, Alfa Bank’s senior analysts Natalia Orlova, saw the report as accurate in reflecting Russia’s lack of governmental strategy. “Tactical steps don’t improve economic structure and the report reflects it.”
The report gave Russia high marks for a flat profit tax rate of 13 percent, for the small gap between currency rates on legal and black markets. Compulsory military service, as well as attitudes on legislature and property rights, were marked as lows, as were the courts and the independence of the legal system.
Much more than business matters, Illarionov said economic freedom was vital to secure a strong social base. “All crucial economical, social and political problems are most efficiently solved in economically free environment,” he said.

TITLE: Russian Copycat Wants To Don H&M’s Mantle
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia’s first H&M store may open without the blessing of Sweden’s Hennes & Mauritz, the operator of more than 1,000 clothing stores around the world.
OOO H&M International, a Russian company that owns the rights to the H&M brand in Russia, is looking for franchisees to open shops in Moscow and St. Petersburg, Boris Kostyrin, general director of OOO H&M, said Friday.
Sweden’s H&M downplayed the announcement, saying it had registered its trademark in Russia and was seeking clarification from the authorities.
“The largest international fashion clothing chains — Benetton, Zara, 4You, Mexx — whose format is similar to ours, have already established themselves on the Russian market. ... The market is large, but it’s not limitless. [Moving in] later will be too late,” OOO H&M said on its web site.
Annacarin Bjorne, a spokeswoman for Sweden’s H&M, said the retail giant had no plans to come to Russia, though it had registered its brand here “a couple of years ago.” Trademark authority Rospatent could not be reached for comment Friday.
Two months ago, OOO H&M bought the rights to the H&M brand, which had originally been registered in Russia by another local company in 1996, Kostyrin said by telephone.
The brand’s previous owner sold clothing online through the www.hm.ru website, he said. OOO H&M, the site’s new owner, is now seeking franchisees  to operate H&M stores.
OOO H&M, however, is unlikely to profit from the H&M name, said Sergei Zuykov, a lawyer specializing in intellectual property rights.
“The H&M brand registered by the Russian company is identical to the Swedish H&M brand,” Zuykov said. It will not be difficult for the Swedish H&M to prove that they have held the international rights to this brand since before 1996, he added.
However, a technicality may allow both Sweden’s H&M and OOO H&M to coexist in Russia, he said, as the Russian firm holds the right to the brand for selling goods and services, while the Swedish original has registered the name in Russia only as a clothing brand.
Should OOO H&M decide to sell the brand to Sweden’s H&M, it would make no more than $10,000, said Zuykov. Yet OOO H&M stood firm on its intention to build on the H&M name. 
“We see no need to sell the brand,” Kostyrin said. Instead, the company plans to open 10 to 12 clothing stores in Moscow and St. Petersburg as early as next year, Kostyrin said.

TITLE: Gas Pipeline To Supply Oblast With Taxpayers
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Subcontractors working on the North-European gas pipeline will have to establish a local subsidiary and pay taxes to the regional budget, the Leningrad Oblast said Friday.
The region’s press-center distributed a report saying the local authorities had already come to an agreement on the subject with gas monopoly Gazprom, which is responsible for the pipeline project.
“Two of the companies among the declared project contractors are not [currently] registered in the Leningrad Oblast, hence they do not contribute to the oblast’s budget. But, I can say that they don’t mind opening local subsidiaries. We’ve already come to an agreement with them,” Interfax cited an oblast government representative as saying Friday.
Law experts saw the scheme as feasible, but said its application fully depends on each company’s management.
“Such requirement could exist if “separate subdivisions” of contractors working on the pipeline were set up on oblast territory. Such subdivisions must be registered with the local tax office if workers are present there for more than 30 days,” said Yevgeny Smirnov, a tax specialist with Salans law firm.
Alexei Melnikov, leading legal advisor of BDO Unicon North-West consultancy, said the oblast’s move was a standard measure.
“Any Russian company must pay taxes in the region where its headquarters are located and in the regions where its “separate subdivisions” are registered. Such tax sharing is stipulated for profit tax, property tax, single social tax and income tax,” he said.
However, “the redistribution of taxes to the regional budget in the case [of having a locally registered subsidiary] would be caused by the Tax Code requirement, not through a demand by the local authorities,” Melnikov said.
Although the Leningrad Oblast cannot force companies to open an office in the region, the expert from Salans suggested that “in practice the oblast may negotiate with the local tax authorities to keep an eye on the relevant taxpayers, to assure they are tax-registered in the Oblast.”
“Registration of a “separate subdivision” for tax purposes would not lead to an increase in the taxpayer’s tax liability, but to the reallocation of tax payments,” Smirnov said.
BDO’s Melnikov agreed that the restructuring would be unlikely to lift the amount of tax the companies would pay, but “it could create additional difficulties for the accounting and financial departments of those companies due to dealing with one more controlling body.”

TITLE: IN BRIEF
TEXT: Soda to Build Glass
MOSCOW (Bloomberg) — Russian Soda Co., or RCK, plans to build a 220 million euro ($271 million) glass factory in St. Petersburg, Vedomosti said, citing Valeri Zakoptelov, RCK’s chief executive.
RCK plans to start building the factory next year, and it will be able to produce 220,000 tons a year, Vedomosti said.
The company plans to sell glass to car producers in the region, which include Ford. Toyota will  open a plant in 2007.
RCK plans to build similar plants in Moscow and Perm., Vedomosti said.

Sky Link in 3G?
MOSCOW (Bloomberg) — Sky Link may become the first mobile-phone company to receive a license to operate a third-generation network in Russia, Vedomosti reported.
Authorities drafted a decision to give Sky Link a 3G license for the Moscow and St. Petersburg regions, Vedomosti said, citing officials.

TITLE: Heirs of Peter Welcome Dutch Business Ties
AUTHOR: By Robin Munro
PUBLISHER: Staff Writer
TEXT: Dutch interest in the St. Petersburg economy is growing — and the increasing number of deals, plus inquiries from Dutch companies after a slice of the surging Russian economy, proves that, says Paul van Oostveen, head of the economic department at the Netherlands Consulate in St. Petersburg.
“It’s really picking up and recently we have had more and more requests from companies that are seriously thinking about cooperation, selling products or buying here,” he said last week, before Tuesday’s Going Dutch economic seminar for Russian business people interested in doing business with the Netherlands.
The all-day seminar is part of the Window on the Netherlands festival, which runs in the city until Sept. 20.
“The image Dutch businesspeople have of Russia is changing,” the diplomat said. “A few years ago quite a few people had the view that it was poor and like the Wild West, but they can see that it’s developing and there is a growing consumer market that is interesting to Dutch companies.”

REAL INVESTMENT
The Netherlands has grown to be the fourth-largest foreign investor in the city. In the first half of this year it accounted for 7 percent of all foreign capital coming into St. Petersburg, according to City Hall’s external relations and tourism committee.
Van Oostveen said that part of the reason why such a small country as the Netherlands is ranked so highly is that Dutch banks are comparatively large and a notable proportion of its clients come from Russia among other European countries.
Financial transactions aside, van Oostveen pointed to significant “real” Dutch investment, namely by brewing giant Heineken, which has made Russia its largest market by volume and taken a key role in the country’s beer market. After four acquisitions in Russia this year, Heineken, which brews Heineken beer only in the northern capital, expects to increase its share of the world’s fifth-biggest market to 14 percent, the company said last week.
Dutch-British consumer good group Unilever, producer of Lipton tea and Dove soap, has factories in St. Petersburg and has been raising its investments, van Oostveen said.
Trade between the city and the Netherlands has varied greatly, but has recently shown a steady rise. Last year the city exported goods valued at $210 million to the Netherlands and imported some $184 million. Trade turnover was 1.5 times higher than in 2003 and the Netherlands was the city’s fifth largest trading partner, according to City Hall’s external relations and tourism committee.

TRADING PLACES
The main exports to the Netherlands last year were ferrous metals (40 percent), non-precious metals (18 percent), fuel oils (17 percent), bronze and bronze products (16 percent) and boats and ships (3 percent). Exports quadrupled in 2004, according to the committee.
Imports from the Netherlands are diverse and range from meat, milk products, vegetables and processed foods to paper and cardboard, chemical products and machine tools, according to the committee.
The trade balance between the Netherlands and Russia is almost even, with raw materials dominating exports from Russia and industrial products outweighing imports from the Netherlands by a factor of at least three.
Imports grew from 2.79 billion euros in 2003 to 3.19 billion euros last year and in January to May of this year reached 1.52 billion euros, 27 percent more than the 1.20 billion euros imported in the same period last year, according to Dutch statistics agency CBS.
Exports coming into Russia from the Netherlands grew from 4.62 billion euros in 2003 to 6.02 billion last year. From January to May they totaled 3.23 billion euros, 43 percent more than the 2.26 billion euros exported in the same period last year, according to the agency.
A representative of City Hall’s external relations and tourism committee, who asked not to be named, said the Netherlands was for a long time in the 1990s the No. 1 foreign investor in St. Petersburg. As recently as 2003, after Heineken bought St. Petersburg’s Bravo brewery for $400 million, the Dutch were No. 1 again. This year the Netherlands is the third largest investor among European countries, she said.
“Many Dutch investors come to the city administration to learn about the advantages of investing in St. Petersburg,” she said. “In recent times the city has had a stable investment rating that is rising all the time.”
The ties between the city and the Netherlands go right back to Peter the Great and links between St. Petersburg and the Dutch mean there is mutual understanding, she added.
Dutch economic activity in St. Petersburg is diverse and includes not only representative offices, but also companies working with technological cooperation, the port and transport, the representative said. 
Van Oostveen said there are about 40 Dutch businesses in St. Petersburg and 10 times as many in Moscow.
“In Russia in general there are several Dutch flower companies and some are in St. Petersburg because it’s an entry point,” he said.
A focus of Dutch business activity is transport, mainly shipping but also road transport. Dutch airline KLM serves St. Petersburg three times a week and wants to raise the number of flights, van Oostveen said.

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Several Dutch companies are involved in tourism, including the guide producer In Your Pocket, he added.
“Before the 1998 financial crisis, the Dutch presence in St. Petersburg was rather big, but quite a few companies left and when they came back to Russia or expanded they often employed Russians, who today are less costly and often as capable on the Russian market as expats,” he said.
Before the Bolshevik Revolution, Dutch companies were strongly represented in St. Petersburg and specialized in the textile, tobacco and spice trades, but all these businesses either left or were nationalized by the Communists. Dutch economic activities in the city did not resume until the early 1990s.
The Netherlands operate several economic programs in St. Petersburg. These include a standing committee of the Dutch Ministry of Transport and Water Management and the city government on transport and water management.
Another is the PSOM program under which Dutch and Russian joint projects can apply for subsidies for technical cooperation. Van Oostveen said the goal of this program is to improve technological performance and share business know-how. It usually involves importing equipment valued at between 500,000 euros ($621,000) and 1 million euros.
“The idea of the program is that it supports the Dutch economy and should also support economic transformation in Russia,” van Oostveen said.
One PSOM project in St. Petersburg is in the development of three-dimensional software to design ships. The software has not only been translated into Russian, but also adapted to Russian standards, which differ from Dutch ones. The final result will be sold as a commercial product, he said.
The PUM program brings retired Dutch managers to Russia to offer domestic companies advise. About 100 such visits, ranging from several days to several weeks, were made to the Northwest region last year, he said.
“Quite a few people retire early in the Netherlands,” van Oostveen said, “but they feel that still they can do things. They come on the program and feel that they are useful and the Russian companies benefit.”

TITLE: The Building Blocks of Stronger Trade
AUTHOR: By Yaroslav Lissovolik
TEXT: Last month’s meeting of the heads of CIS states in Kazan rekindled the debate on the future of the CIS and the expediency of forging ahead with regional integration. Given Russia’s travails in revitalizing close economic ties among former Soviet republics, some argue that further attempts are futile, if not costly for Russia’s economy. Others contend that regionalism is the only path that Russia needs to pursue in its trade policy and that multilateral liberalization and bilateral trade ties with countries outside the CIS are largely tangential to Russia’s national interests. 
Liberal critics of Russia’s regional initiatives argue that these agreements may spawn excessive favoritism and discrimination among Russia’s trading partners to the detriment of the overarching need to forge ahead with trade liberalization in general.
While the merits of trade liberalization have largely been established, one of the noteworthy trends of recent years is the growing concern of countries not so much about the quantitative aspects of trade openness — how much import barriers are reduced — but with the quality of trade liberalization. This strategy optimizes trade liberalization regionally, bilaterally or through the World Trade Organization. This pursuit of a multi-track approach to trade liberalization was most recently formulated by former U.S. Trade Representative Robert Zoellick, who termed it “competitive liberalization.”
Some of the frontrunners in competitive liberalization include the United States, Australia and Chile. Chile represents one of the most striking cases of how optimizing trade liberalization can deliver economic dividends. The country started off the 1970s with some of the most inscrutable and elevated import tariffs in the world. After several rounds of trade reforms, the average import tariff was brought down from nearly 100 percent in the beginning of the 1970s to a unified rate of 6 percent by the end of 2003. Apart from the overall trend toward more open trade, Chile’s trade liberalization was also increasingly focused on reaching bilateral free trade deals.
The web of trade liberalization deals concluded by Chile encompassed Korea, the countries of South America’s Mercosur trade zone, the European Union and the United States. Chile’s leadership in establishing agreements served to increase its leverage within the WTO, where this Latin American tiger is actively engaging in alliances with both developed and developing countries. The result is greater geographical diversification of Chile’s foreign trade, which is increasing the diversification of its exports. In particular, with agricultural and manufacturing exports rising at a rapid clip, the share of copper in Chile’s exports declined from more than 75 percent in 1970 to around 30 percent at the end of the 1990s.
In its implementation of competitive liberalization, Russia is lagging far behind most developed countries. Most importantly, Russia is still not a member of the WTO, which renders it vulnerable to bouts of foreign protectionism. This restricts Russia from making full use of the other instruments of external trade policy such as regional and bilateral agreements. The WTO should serve as a rules-based framework for Russia’s trade policy, making it predictable for Russian businesses and Russia’s trade partners abroad. In this regard, the benefits accruing to Russia from WTO accession should be significant, hence the desire of the Russian authorities to complete accession talks before the end of this year.
With regard to regionalism, Russia has thus far been unsuccessful in creating a framework for integration in the CIS. There is a multitude of integration groupings, all of which, at best, are showing lackluster progress. The introduction of the monetary union with Belarus has been constantly put off, and it appears that next year will be no exception. The creation of the Common Economic Space is running into trouble due to strained relations with Ukraine. Finally, the Eurasian Economic Community remains sluggish in harmonizing the external tariffs of its members. 
With regard to bilateral trade agreements, Russia has yet to launch full-fledged free trade agreements with countries of the “far abroad.” Yet the potential benefits from engaging in reciprocal trade liberalization are significant. One way to gauge the long-term potential of bilateral trade liberalization is the so-called gravity model. Just as the laws of physics relate the gravitational pull to mass and distance, the economic version of Newton’s law links trade between countries to their respective gross domestic product levels — the equivalent of mass — and distance. The track record of the gravity model in explaining the dynamics of foreign trade flows has been impressive, and it performs quite well even in post-Soviet economic space. 
The gravity model for Russia shows that the most significant shortfall in trade compared with potential is with the United States, Japan, Australia and Canada. These countries are formidable trade powers and a largely untapped potential for Russia’s exporters that could be exploited through bilateral trade liberalization.
As the country makes little headway with three strands of competitive liberalization, the bulk of Russia’s trade liberalization in the past several years took place on a unilateral basis, with the average import tariff declining from more than 13 percent in 2000 to between 10 and 11 percent last year. In order to jump-start competitive trade liberalization and benefit from greater trade liberalization from its trading partners, Russia should first address the issue of membership in the WTO. Once the terms of WTO accession are finalized for Russia and some of its key CIS counterparts such as Ukraine, there will be more clarity on how regional integration among the CIS countries should proceed. Hence, when sequencing the various strands of trade liberalization, WTO accession should be prioritized, with regionalism and bilateralism subsequently serving to diversify the geography of Russia’s exports. This should aid Russia’s efforts to diversify the sectors that form its export base as well.
The reserves of diversification are considerable. Agriculture, Russia’s forte since time immemorial, could become one export growth engine, provided supporting industries give agriculture a boost. One factor that is hampering the development of the country’s agriculture export potential is the underdeveloped infrastructure, most notably transportation networks. In the past several years, exports could have been significantly higher were it not for the severe lack of port facilities. In the industrial sector, Russia’s competitive advantage is strong in ferrous metals as well as chemicals, which is reflected in the number of protectionist measures leveled against Russian producers in these sectors abroad. An even greater potential is harbored in the service sector, which has already become the locomotive of Russia’s economic expansion. Sectors such as IT, banking, and tourism and transportation have already exhibited high growth rates and should continue to perform strongly. 
In the end, the pursuit of a multitrack approach to trade liberalization is just one of the many factors that must underpin Russia’s economic modernization. However, it is critical to create the right conditions in Russia’s business climate. No export promotion on the part of the state will be successful without improved corporate governance and greater competitiveness at the micro-level in the face of increased competition from abroad. 

Yaroslav Lissovolik is chief economist at United Financial Group. He contributed this comment, which is based on his forthcoming book, “Competitive Russia in a World of Competitive Liberalization,” to The St. Petersburg Times.

TITLE: Ice Cream Days Are Over
TEXT: Unlike other summers, when journalists sit staring at the ceiling, wracking their brains over how to cover that fascinating growth in ice-cream demand or surging sales of air conditioners, this year’s holiday season has been rich in major deals.
International giant Heineken swallowed St. Petersburg’s last independent brewery, Stepan Razin. One of the city’s largest shipyards, Baltiisky Zavod, changed owners and will now be part of a holding that was founded by MezhPromBank. In banking, the big merger was between St. Petersburg-based PromStroiBank (PSB) and nationwide lender VneshTorgBank (VTB). The consolidation process has touched nearly all industries. As a result, many St. Petersburg enterprises have joined ranks with national or international businesses: become a part of a bigger picture. It is a good thing for them, and timely, I would add. The times when the city’s enterprises could develop without having huge financial, technical or even managerial resources, without that “magic” know-how, are over.
“I’ll never sell the brewery” was what the CEO and main shareholder of Stepan Razin said in an interview in 2003. Two years later, he smiled sourly, remembering the former promise. “How could we compare to a multinational corporation, which spends billions just on advertising,” he said.
Most probably the process of consolidation will continue, the remainder of competitive businesses will change shareholders, while company founders and former owners will gladly cash in on the deals. And indeed they should be happy, earning tidy sums that reflect years of effort and hard work. But, the question is, will they have a second chance to build another successful business? They are not yet of a retirement age.
As the head of a local office of a national business daily, I have to pick news that is noteworthy not only for the city, but which has implications for the country and its economy as a whole. For that, naturally we turn to the decision-makers. Yet if previously, they could be almost neighbors, or at least based  in the capital, now my colleagues and I are increasingly making long-distance calls to Holland, to Japan, just to find out what is going on here — in Russia and in St. Petersburg.
Last week Vedomosti celebrated its sixth birthday. I wondered, thinking back to the start of our newspaper, how the face of St. Petersburg business has changed since then. The city has always been short on oligarchs, which is understandable since there’s no local oil or gas. Nonetheless, at least two of the city’s businesspeople had participated at meetings which President Vladimir Putin held with the business community at the start of the decade. The two I know of were former president of Baltika brewery, Taimuraz Bolloyev, and head of the board at PromStroiBank, Vladimir Kogan. Were those meetings to be held again, and the attendees picked according to the scale of their business, would Bolloyev and Kogan still be on the invite list?
Since resigning from Baltika, Bolloyev has transformed into a majority shareholder of a sewing factory and head of a mutual fund with assets of $10 million. Kogan, currently completing the sale of PSB to VTB, will as a consequence be worth hundreds of millions of dollars — but without an influential business to his name.
Every business involves risk, and for every start-up that risk is doubled. Will the current victors be able to repeat their success with a start-up? The test, operating in a global arena where multinationals rule, should show if the former tycoons won due to luck and circumstances (Russia’s turbulent transformation into a market economy), or if the men had genuine business minds.

Anna Shcherbakova is the St. Petersburg bureau chief of business daily Vedomosti.

TITLE: D. Telekom Places $1.5 bln Stake in MTS For Quick Sale
AUTHOR: By Douglas Busvine and Boris Groendahl
PUBLISHER: Reuters
TEXT: FRANKFURT — Deutsche Telekom launched a market placement of its 10 percent stake in Russian mobile operator Mobile TeleSystems on Monday after failing to agree a sale to MTS’s majority owner AFK Sistema. 
UBS and Deutsche Bank were named joint bookrunners to sell the stake in Russia’s number-one mobile phone company, worth around $1.5 billion at market prices, via an accelerated bookbuilding. 
A source close to the deal said the placement could be priced at 205 to 210 rubles ($7.3 to $7.4) a share, at a relatively tight discount to MTS’s illiquid local shares, which traded flat at 217 rubles. 
“The placement has met with good interest,” the source said. The source added that the placement would probably be closed on Monday. 
Fund managers agreed that investor demand was strong: “It’s good that we are seeing this deal being closed quickly — it shows that people have the cash,” one said. 
Not all investors were enthusiastic, however, with another fund manager holding out for a cheaper price after Deutsche Telekom sold a chunk of MTS at a 12 percent discount last year. 
“If there’s any free money we will participate. If there isn’t, we won’t,” said the second fund manager. 
Sistema, a services group which raised $1.6 billion in a record-breaking London share offering this year, said earlier it had decided not to buy out Deutsche Telekom’s remaining MTS stake. Sistema already has outright control over MTS, with a 50.4 percent stake.

TITLE: IN BRIEF
TEXT: Q2 Growth at 6.1% 
MOSCOW (Reuters) — Russian economic growth slowed to 6.1 percent year-on-year in the second quarter after 7.7 percent in the same period of 2004, Federal Statistics Service data showed on Monday. 
It does however mark a sharp improvement on the first quarter when gross domestic product growth was 5.2 percent. The Economy Ministry has already reported that growth in the first six months of 2005 was 5.6 percent. 

Less Exports by Rail
LONDON (Bloomberg) — Russian oil exporters are switching to cheaper pipeline transportation from rail shipments as Transneft, the oil-pipeline monopoly, expands its network, the nation’s energy minister said.
Russia, the world’s second-largest oil supplier after Saudi Arabia, increased its pipeline capacity by 20 million tons this year (400,000 barrels per day), the minister, Viktor Khristenko, told Expert magazine in an interview published on Transneft’s web site.
Russia plans to secure 15 percent surplus export capacity, up from the 5 percent level now, he said.

Chubais Seeks Change
MOSCOW (Bloomberg) — Anatoly Chubais, the chief executive of Unified Energy Systems, will ask the government to tie electricity prices to real inflation rates, rather than forecast rates, starting in 2007, the newspaper Vedomosti reported on Monday.
The state-controlled power utility, which keeps its prices below the inflation rate, may lose about 10 billion rubles ($352 million) because inflation is likely to reach 11.5 percent, exceeding the government’s forecast, the newspaper said, citing Sergei Suverov, an analyst at Moscow-based Gazprombank.
UES may miss as much as 15 billion rubles of revenue next year for the same reason, the newspaper said.

OGK-5 Plans Listing
LONDON (Reuters) — OGK-5, the first of several large power generating companies to be spun off from Unified Energy System, will list on the Russian stock market this week, a senior UES official said on Monday. 
“Genco No.5 will be on the stock market this week. The rest [of the generating companies] will be in 2006,” Dmitry Akhanov, head of the strategy department of Unified Energy System, said at a Renaissance Capital conference in London.
He said the firm had paved the way for the listing on the RTS exchange by agreeing a swap deal last week with minority shareholders of Konakovskaya power station, the only one of OGK-5’s four subsidiaries to have minority shareholders. OGK-5 also includes the Nevinnimysk, Reftinsksaya and Mid-Urals power stations. 

Gazprom Sells Media
MOSCOW (Bloomberg) — Gazprom agreed to sell its media assets to banking unit Gazprombank for 37.22 billion rubles ($1.3 billion), Interfax reported last week, citing a draft investment memorandum from the bank.
By September 2008, the bank will pay 17.05 billion rubles for Gazprom-Media’s assets and 20.17 billion rubles to cover the businesses’ debts to Gazprom, the newswire reported.
Gazprom Chief Executive Alexei Miller said June 24 the gas company would swap its media holdings for Gazprombank’s electricity assets, including a stake of more than 25 percent in Mosenergo, Moscow’s dominant power utility, and shares in national utility Unified Energy.

Latvia Criticizes Pipeline
HELSINKI (Bloomberg) — Latvian President Vaira Vike-Freiberga criticized a Sept. 8 agreement between Gazprom and Germany’s E.ON and BASF to build an undersea natural-gas pipeline that bypasses the Baltic states and Poland, the Baltic News Service reported Monday.
The pipeline is estimated to cost about $5.7 billion and will deliver as much as 55 billion cubic meters of gas a year to Western Europe on completion in 2010. 
Freiberga told LNT television that the project “openly lacks economic gains” and was a “political decision,” BNS reported.

Poland Pipeline Plans
WARSAW (Reuters) — Poland should revive a plan to build a gas pipeline from Norway under the Baltic Sea, as part of its drive to diversify its predominantly Russian gas supplies, the man tipped to become foreign minister said on Monday. 
Euro-MP Jacek Saryusz-Wolski, a member of the Civic Platform party set for a coalition government after Sept. 25 elections, made the suggestion during a debate on foreign policy after several days of heated media discussion of gas supplies. 
Last week Russia and Germany agreed to build a pipeline under the Baltic Sea, despite opposition from Poland and Baltic countries which believe it will harm their energy security. 

UralSib’s Resignation
MOSCOW (Bloomberg) — Fuad Akhundov, first vice president of banking group UralSib Financial Corp. and Chief Executive of the group’s Ural-Siberian Bank, resigned after completing Ural-Siberian Bank’s merger with the group’s four other banks, Kommersant reported.
Akhundov, who ran the group’s mergers and acquisitions projects, resigned as most of these projects have been completed, the newspaper said, citing UralSib’s spokesman Alexander Vikhrov. 
Akhundov has decided to work on projects in the non-banking industry, Vikhrov told Kommersant.

Tupras Receives Bid
MOSCOW (Bloomberg) — Turkey received a top offer of $2.8 billion for a stake in oil refiner Tupras during the first round of bidding in an auction.
Turkey’s Privatization Administration didn’t say who made the highest bid in the first round in Ankara, Turkey’s capital. 
Royal Dutch Shell and Eni are among those vying to buy 51 percent of Tupras from the government. The stake is worth $2.3 billion by market value.

Ukraine to Quicken
KIEV (Reuters) — Ukraine’s government plans for quicker economic growth and reduced inflation next year, acting Finance Minister Viktor Pynzenyk said on Monday. 
He said the government planned gross domestic product growth of 7.0 percent and inflation to reach 8.7 percent in 2006. This year, the government aims for growth of 6.0 to 6.5 percent and wants to curb inflation to below 10 percent. 
“GDP growth in 2006 is planned at the seven percent level. Inflation is expected at 8.7 percent. Previously, we has planned inflation for next year at 9.3 percent,” Pynzenyk told reporters after the government discussed next year’s draft budget.

TITLE: Two Presidents, Two Peas in a Pod
AUTHOR: By Jim Hoagland
TEXT: Imagine that U.S. President George W. Bush could command American television networks to limit their broadcasts to heroic rescues in New Orleans while blacking out scenes of human misery there. Imagine, too, that Bush could compel Congress to endorse his handling of Hurricane Katrina. Imagine that, and you will have created an American version of President Vladimir Putin's Russia.
Unlike the state-controlled broadcast media, newspapers here are largely free to rip into the leader’s incompetence, since they stir little popular response. Opposition politicians shout their dissent from the rooftops, only to be ignored by the police and the public. Putin meanwhile stolidly counts and parcels out unimagined petrodollar surpluses that have given his Kremlin leadership a new lease on life.
I don’t know if fantasies of Putin-like control make their way into Bush’s daydreams in times such as these. But it is clear that when the president meets with Putin later this week in Washington, he will find comfort in the Russian’s company. Similarities of temperament, of outlook and now of experiences with national trauma unite these two men personally, whatever their policy differences over Iraq, Iran and other crises.
The energy, charm and disciplined focus that have impressed Bush in past meetings were on display during a vigorous seminar lasting 2 hours, 15 minutes that Putin conducted for a group of foreign visitors to the Kremlin last week. Visible too at other moments were streaks of personal vindictiveness, and an almost Bushian determination to be proved right, whatever the experts and intellectuals say.
“All politicians are criticized for something,” Putin responded dismissively when told that he was frequently described abroad as an authoritarian ruler who had brought “managed democracy” to Russia. “Democracy exists or it does not exist. … I do not agree that I am authoritarian.” And that was that.
He ranged nimbly over the importance of religion in post-communist Russia, his plans to make “energy security” a fulcrum for his foreign policy, the war in Chechnya and other weighty topics. But the real subject of the session was Putin himself, who has grown from being an isolated former KGB colonel into a formidable, world-class politician since being catapulted into power by Boris Yeltsin on Dec. 31, 1999.
The instant liking that Bush took to him has endured as Putin has – with public approval – consolidated political and economic power in the Kremlin, all in the name of bringing stability out of the chaos that prevailed in Yeltsin’s time. Putin shares with Bush an intense estrangement from the elites that helped form him and promote him to power. Harvard MBA holders and Russian oligarchs are ultimately incapable of grasping the leader’s understanding of and identity with the people.
Bush will find a sympathetic listener in Putin when they talk Friday about the polarized aftermath of Hurricane Katrina. A year ago this month, a bungled Russian rescue operation failed to prevent the massacre of hundreds of schoolchildren by Chechen terrorists in Beslan. An initial wave of national shock and horror subsided as criticism of the government was kept off the air and out of the Duma debate. Putin has essentially brazened out the trauma.
Katrina proved that not even the strongest country in the world had sufficient emergency services to cope immediately with unexpected disaster, Putin said in the Kremlin meeting with the participants of the Valdai conference. His reliance on and appeal to Russian fatalism were unmistakable.
So was his “I told you so” attitude about Ukraine, where he claims corruption and chaos are spreading as a result of the election of President Viktor Yushchenko over a Kremlin-backed candidate in December. But Putin significantly softened earlier criticisms of the United States, the European Union and Western nongovernmental organizations for meddling in Ukraine, saying: “What we want is to have our opinions listened to” on developments in the territories of the former Soviet Union.
“We are not going back to a Russian empire,” he said. “Only an idiot could imagine we are striving toward that. It is not possible, and Russia has no interest in having the whole world against it.”
Pressed on his political future, Putin delivered a Shermanesque declaration that he would not run for re-election in 2008 under any circumstances, since his candidacy is ruled out by the Constitution. Changing the Constitution would be “destabilizing.”
His polished pitch almost certainly masks a continuing sense of betrayal over Ukraine and a wariness of Bush’s global democracy campaign. But it is nonetheless encouraging that Putin is making the right noises about democracy and international cooperation. Now if he can only convince himself.

Jim Hoagland contributed this piece to The Washington Post, where it first appeared.

TITLE: So, Then, What About The Reforms?
AUTHOR: By Olga Romanova
TEXT: “The main problem is now a financial famine. But during the course of the month all delayed salaries will be paid — to the military, employees of law enforcement structures, to scientists and to pensioners. Current salaries will also be paid on time, and all the sources and deadlines for the payments have been precisely worked out.” Thus spoke then-President Boris Yeltsin in Feburary 1996, when he started his campaign trail with a 5 percent rating. In June, just before the first round of elections, it had reached 40 percent.
On that far-off winter day, the price of a barrel of oil had reached $16.70. The state owed 14 trillion rubles in unpaid wages (approximately $3 billion, back then). Over the next two months, $4.4 billion was spent on Yeltsin’s election campaign and other pre-election expenses, such as paying salaries, paying pensions and doling out aid to the regions. All of this was covered by allowing internal debt to grow by issuing approximately $20 billion in state treasury bonds.
There is now more money in the stabilization fund — approximately $21 billion as of July 1 — and it has been promised that by the end of the year that figure will rise to $52 billion. Oil is getting more and more expensive, and jokes such as “Did you hear that Putin has awarded orders and medals to the crew of the Katrina?” are proliferating. Can the extra money be handed out? Trying to find an answer to this question put a lot of people close to the president at odds with one another. Last Monday, he decided that the answer was yes. This was his main pre-election decision – more important than joy rides on various forms of transportation, more necessary than meeting tourists in Sochi, more pressing than support for the Nashi youth movement. To say nothing of his pet dog Connie, his new pony and his friend Berlusconi.
On Monday, his largesse touched virtually everyone – pediatricians and nurses, school teachers and military personnel, construction workers and students, scientists and peasants. He was worried by the country’s standard of living and the spread of infectious diseases through Russia; he was concerned about customs duties on imported equipment and about market conditions; he spoke about making credit available to agricultural establishments and about projects of national importance. He and he alone is raising the salaries of local doctors to 10,000 rubles ($354) by next year and to no less than 5,000 rubles ($177) for nurses. He is magnificent, and no one can criticize voters who, having received this windfall, worship the ground he walks on. So there is only one question to be asked — fella, where have the reforms gone?
I don’t mean the reforms that we have already seen, but ones that have been urgently needed for a long time: reforms of the legal system; of education and healthcare; reforms of the Army, and not the one that Putin’s Sancho Panza, Defense Minister Sergei Ivanov, is proposing, but ones that would free us from the toll that conscription takes on young boys. 
And it’s also worth asking how the cornucopia that Putin poured out on Monday will affect the economy. Nothing of the sort is mentioned anywhere in the government’s short- and medium-term programs until 2010. One might wonder if a halo descended from heaven and alighted on Putin’s head. The whole thing reminds one of an early start to an election campaign, what with Putin’s flight in a fighter jet, female tourists swooning in front of him and verbose speeches delivered in Tatar. But it’s possible that it’s not at all an early start but the right time for it. We simply don’t know anything about it at the moment. Provided, of course, you don’t think that Putin is planning to run in the December elections to the Moscow City Duma – for the Union of Right Forces party, for example.

Olga Romanova contributed this comment to Vedomosti, where it first appeared.

TITLE: The Cost of History?
AUTHOR: By Vladimir Gryaznevich
TEXT: St. Petersburg’s famous old Yeliseyevsky delicatessen recently announced that it will soon change its profile and will start selling expensive perfumes.
The change will occur because the Moscow perfume retail chain, Arbat Prestizh, has rented the Yeliseyevsky store from the Parnas-M holding for $10 million. It wouldn’t really matter except that the Yeliseyevsky store is, like the Sever and Saigon cafes, the Kavkaz restaurant, the antique book store Bukinist on Liteiny Prospekt, and Dom Knigi, one of the historical sights of St. Petersburg. 
Many such sights have disappeared from the cultural map of the city as the years have passed, but the buildings themselves have somehow remained, often not even having been sold. For instance, the Yeliseyevsky building is a federal monument and the right to rent it is only granted if the tenant agrees to follow taxing obligations and submits to inspections. Nevertheless, somehow or other the functions of all these buildings have now quite changed.
City Hall’s stance is well known. Regarding the Yeliseyevsky store, the first deputy head of the committee for the protection of architectural monuments (KGIOP), puts it like this: “Theoretically it doesn’t matter to us which company rents the space. What is important is that the building itself remains unchanged from its present form.” In the Yeliseyevsky store’s case this means even preserving the counters. But what sits on the counters is the tenant’s business. The new tenant wants to sell perfume and isn’t bothered that the famous store is associated with groceries. But is that good?
For citizens, it is probably bad — from the point of view of preserving the city’s cultural heritage to which not only the building belongs, but also the history and folklore of a great institution. As for business, Yeliseyevsky’s is a well-promoted brand. Creating another like it would be costly. The existing power of the brand is being thrown away. However, business is business. According to specialists, the cost of retail space on Nevsky Prospekt is up to $10,000 per square meter per year so trading in groceries is unprofitable.
Zealots for cultural heritage will say that changing Yeliseyevsky’s into a perfume store is the same as substituting turnips for grapes in Champagne. City Hall’s response is: “For the French province of Champagne to continue producing wine rather than turnips, the government of France and the European Union spend huge amounts of money subsidizing wine-making. The same goes for cheese-making. Because those businesses are as loss-making as the grocery trade on Nevsky. We do not have the money even to preserve historic buildings and you ask that we subsidize even their traditional use. You should be thanking us for insisting that the counters in Yeliseyevsky’s be retained. For this reason, by the way, we have not yet allowed Benetton to rent the second part of Yeliseyevsky’s. Benetton wants to eliminate the counters.”
The problem is unquestionably a difficult one. There are rational arguments on both sides. In such situations a civil society could give the final word. If St. Petersburgers really value such historical institutions, it is possible to organize a public organization to preserve them. For instance, a city referendum could be conducted or a special city law could be passed. The money could be found — simply trim a different part of the city budget. 

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: No Direction Home
AUTHOR: By Chris Floyd
TEXT: Let’s be clear about one thing. Nothing that happened earlier this month — the mass destruction in the Mississippi Delta, the obliteration of the city of New Orleans, the murderous abandonment of thousands of people to death, chaos and disease — will change the Bush Administration or American politics at all. Not one whit. President George W. Bush will not reverse his brutal policies; his Congressional rubber-stamps will not revolt against the White House; the Democrats will not suddenly grow a spine. There will be no real change, and the bitter corrosion of injustice, indifference and inhumanity that is consuming American society will go on as before.
One indication of this can be found in the first polls coming out after the disaster, which show that some 45 percent of the American people approve of Bush’s handling of the relief effort. It seems inconceivable that any sentient being could witness the agonizing results of the Bush team’s dithering, dilatory response — an agony played out in the full glare of non-stop media coverage — and not come away with a sense of towering anger at this criminal incompetence. But it’s obvious that nearly half the American people have now left the “reality-based community” altogether; they see only what they want to see, a world bathed in the hazy, golden nimbus of the Leader. The fact — the undeniable truth — that behind this carefully-concocted mirage lies nothing more than a steaming pile of rancid, rotting offal means nothing to these true believers. The Lie is better, the Lie is more comforting, the Lie lets them keep feeding on the suffering of others without guilt or shame. 
 This painful split between obvious reality and popular perception is nothing new, of course. Today we look at old footage of Adolf Hitler and wonder how on earth such a pathetic and ludicrous creature could ever have commanded the adoration and obedience of tens of millions of people. Yet he did. As T.S. Eliot once wrote, “Humankind cannot bear very much reality.” 
The fact that a few conservative commentators and politicians are making mild criticisms of Bush means nothing. Their “attacks” amount to no more than this: Gosh, old George really dropped the ball on this one. He’d better turn the PR thing around, or he might lose some of the “political capital” he needs to “advance his second-term agenda.” That’s it. That’s as far as it goes. 
After all, they fully support the “agenda” — more war, more tax cuts for the rich, more impunity for corporations, more welfare for the energy barons, more coddling of elite investors, more state power for Christian extremists, more media consolidation, more kickbacks, more easy money for greasy palms. And now that Karl Rove has finally figured out his response — employing brazen lies to smear state and local officials — you will very quickly see the conservative critics fall into lockstep with the porcine counselor’s program. By the time Congress holds hearings into the disaster, they’ll be singing love songs to the Leader.
The hearings themselves will doubtless turn into a pageant of heroic tableaux — glittering stories of the federal effort to rescue the perishing, all of it driven by the steady hand of the Commander in chief. Oh, there might be a scapegoat or two for the Congressmen to pummel with puff-cheeked righteous rage for the cameras. But anyone hoping for a fearless, presidency-shaking probe will be disappointed.
Just as the media have always overhyped Bush’s popularity, they are now overhyping the “political crisis” he is supposedly facing. There is no political crisis whatsoever, if by that phrase you mean something that will cause Bush to alter his policies. The war in Iraq will go on. The war against the poor will go on. The slow destruction of middle-class security and stability will go on. The long and ferocious right-wing campaign against the very idea of a “common good” will go on, unabated — perhaps even strengthened — as it faces a backlash from the half of the American public that does accept the reality of what they saw in New Orleans and all along the Gulf Coast. 
This is what you must understand: Bush and his faction do not care if they have “the consent of the governed” or not. 
They are not interested in governing at all, in responding to the needs and desires and will of the people. They are only interested in ruling, in using the power of the state to force their radical agenda of elitist aggrandizement and ideological crankery on the nation, and on the world. 
They have a large, hard core of true believers who will countenance — even applaud — any crime, any corruption, any incompetence of the Leader and his minions. With this base, and with all three branches of government in their hands, the Faction need only procure the support of a small percentage of the rest of the population — through fearmongering, through smears and lies, and, as we saw in 2000 and 2004, through the manipulation of election results via politically connected voting-machine corporations and politically partisan election officials.
None of this will change because of what happened in New Orleans. If the Bush Factionists could be touched by suffering and injustice, by death and destruction, by corruption and incompetence, then they would not be where they are today. If there was a viable opposition in the American Establishment to Bush’s policies, it would have stood up long ago. Like the people left behind in New Orleans, we’re all on our own — “with no direction home.”

For annotational references, see Opinion at www.sptimesrussia.com

TITLE: Basketball Stars Gather for Hurricane Charity Game
AUTHOR: By Kristie Rieken
PUBLISHER: The Associated Press
TEXT: HOUSTON, Texas (AP) — Chris LaRoche doesn’t have any clothes, toys or a place to go home to, but on Sunday the 12-year-old’s dream came true when he played basketball against LeBron James, Kevin Garnett, Chauncey Billups, Ron Artest and a host of other NBA stars. 
LaRoche and about 1,100 other Hurricane Katrina evacuees living in Houston’s George R. Brown Convention Center got a morning visit from about a dozen NBA players in town for an evening charity game. 
“I can’t believe it,” LaRoche said, a huge grin on his face. “I was guarding LeBron. It was so crazy.”
James and the other players spent about 90 minutes playing with kids, signing autographs and greeting fans. 
“Hopefully we can put some smiles on their faces and maybe for just that little moment they cannot think about what happened,” James said. 
TNT basketball analyst Kenny Smith organized the game, played at the Toyota Center before a packed crowd that included at least 5,000 evacuees who were given free tickets to the game. Smith said each of the almost 30 players participating in the event donated a minimum of $10,000 in money or supplies to the relief effort. 
Louisiana Lieutenant Governor Mitch Landrieu thanked the players and the city of Houston for its support before Jerry Stackhouse treated the crowd to a spirited rendition of the Star Spangled Banner. 
“This is an American tragedy that brought us to our knees,” Landrieu said. “And the American people have reached down and lifted us up. We will rebuild.” 
Kobe Bryant, who spent the day visiting victims, said he was inspired by their positive attitudes. 
“I had in my mind that it was just going to be a really sad sight,” Bryant said. “But when you walk in you see that everybody was just real spirited. There was a lot of energy in there — a lot of resolve and determination to bounce back.”
Charles Barkley, who helped with the TNT broadcast, said he was proud of the outpouring of support the NBA showed Sunday. 
“Everybody has got to do a little part,” he said. “We’re all in this world together and I appreciate them doing something positive with their time.”
Allen Iverson arrived about 10 minutes before the game, causing quite a stir. He didn’t play but got perhaps the biggest ovation of the day when introduced. He posed for pictures, signed autographs and encouraged the East team from their bench. 
Fans were given another treat in the fourth quarter when rapper Kanye West, who publicly criticized President Bush during a telethon last week, arrived at the game. 
Stephon Marbury dashed across the court to hand West a microphone and he rapped over a verse of his hit “Gold Digger” while the game was delayed and players danced to the music. 
The West won the game 114-95. 
Other players participating in or attending the game included Tracy McGrady, Dwyane Wade, Damon Jones, Steve Francis, Carmelo Anthony, Jermaine O’Neal and Amare Stoudemire.  Earlier in the day at the convention center, the players milled through rows of air mattresses as children spotted them and excitedly ran to get autographs, clutching any scrap of paper they could find. 
“They’re huge,” Dayvon Bell, 11, said after getting an autograph and a very high five from the 6-foot-11 Garnett. “It’s so cool.” 
Bell and his mother, Tema Knox, were at the convention center with 19 other relatives who escaped New Orleans. She doesn’t know the status of her home and said this has been the most stressful time of her life. 
“Anything that will make my kids happy even for a minute I’m all for,” Knox said. “It means so much for these players to make time for the kids.” 
Garnett also showed love to one of the smallest victims, signing the shirt of a sleeping infant girl with a fat purple marker. 
“It’s about showing a sign of unity,” Carlos Boozer said. “Us as black folks are joining together with a strong bond to help these young people.” 
While evacuees enjoyed seeing the players downstairs, the real fun began when the group moved to a third-floor ballroom that had been converted into a makeshift gymnasium. 
The room was filled with three basketball goals, two pingpong tables and a soccer goal, and had hundreds of kids darting around. The players immediately joined in, with Garnett tossing a football to some teenagers and Billups shooting hoops with scores of other younger kids. 
“I just wanted to do something that could help the kids,” Artest said. “It’s good to see people happy.” 
Marbury was much more upbeat than earlier in the week, when he broke down into sobs while announcing a donation of $500,000 to $1 million to Katrina victims. He laughed while tickling toddlers and playing pingpong with preteens.

TITLE: Agassi Defeated by Unstoppable Federer
PUBLISHER: Reuters
TEXT: NEW YORK — Roger Federer fought off a brave challenge from 35-year-old Andre Agassi on Sunday to beat the American 6-3 2-6 7-6 6-1 and retain his U.S. Open title. 
Seventh seed Agassi rocked the Swiss world number one by recovering from a set down to level the match and lead 4-2 in the third set, but Federer rebounded to become the first man in the professional era to win both Wimbledon and the U.S. Open in consecutive years. 
“For me this is probably the most special grand slam final in my career,” Federer said. “To play against Andre here in New York, it’s a dream. 
“I had to play my best match of the tournament, like I did last year, and like I always seem to do. I don’t know how I do it, but it feels great.” 
Federer won the first set thanks to one break but Agassi, playing some of the best tennis of his career, roared back to level the match and then lead 4-2 in the third. 
Federer broke back in the next game, though, and after winning the tiebreak 7-1, he stormed through the fourth set to win his sixth grand slam title. 
Agassi, who came through three back-to-back five-set battles to reach the final, was pipped in the opening set but, with the crowd roaring him on, held in the first game of the second set and then played an almost flawless game to break Federer for the first time. 
An angry Federer forged ahead 40-15 on the American’s serve but Agassi dug deep to save both break points and then a third to lead 3-0. 
Federer held serve comfortably but Agassi held on to lead 5-2 and then broke Federer again to level the best-of-five-sets match at one set apiece. 
The incredible standard of play was maintained in the third set as neither man yielded a break point in the first five games as Agassi led 3-2. 
The American, champion in 1994 and 1999, then played a great game to break Federer and lead 4-2. 
The power of Agassi’s groundstrokes was forcing Federer into mistakes but the top seed showed his class by breaking back in the next game and then holding to love to level at 4-4. 
Agassi, playing outstanding tennis, saved four break points in the 11th game to lead 6-5 but Federer held comfortably to force a tiebreak, and then stepped up his game to win it 7-1. 
An early break in the fourth set knocked the stuffing out of Agassi and Federer marched to a 5-0 lead. 
The American saved two match points on serve to hold for 5-1, but Federer served out to clinch victory. 

CLIJSTERS VICTORY
A relieved Kim Clijsters finally shook off the tag of best player never to win a grand slam title when she stormed to a popular victory at the U.S. Open on Saturday. 
The Belgian broke her duck on the big stage with a demolition of Frenchwoman Mary Pierce, putting the seal on an astonishing comeback from a career-threatening injury and the mental scars of four grand slam final defeats. 
“I think that I just proved to myself that I can do it and that I’m up there with the best of them,” Clijsters said after her 6-3 6-1 victory. 
 “All the hard work and everything, that’s more satisfying to me, it’s paid off. 
“I got a little frustrated every time I got asked in press conferences about it. 
“I had the idea that the media was making it a bigger deal of it than I was. I was very motivated and I was working hard to try to do it. So now you don’t have to ask that anymore.” 
Beaten in the final of the French Open in 2001 by American Jennifer Capriati, Clijsters’ nerve was called into question when she was defeated three times by compatriot Justine Henin-Hardenne in three grand slam finals in 2003 and 2004. 
A serious injury to her left wrist required surgery in 2004 and she missed most of the year only to return fitter and stronger in 2005, winning six hard court titles in the run-up to the U.S. Open. 
“Maybe it wasn’t my time yet in those grand slams,” she said. 
“Losing those grand slams, not just the finals but also losing to Serena [Williams] in Australia [when she led 5-1 in the final set of their semi-final in 2003], those definitely motivate you to work harder and to work on a lot of things.” 
Clijsters said the break may have helped her in the long run. 
“I think everything that happened, happened for a reason,” she said. 
“Maybe that’s why I’m sitting here now, you know, with this trophy next to me. 
“A lot of times, winning Indian Wells, Miami, it’s just so, so hard to believe everything that I’ve done, this year,” she said.
“I think that’s the hard work, again. I think it pays off.”

TITLE: Back at No.1, Sharapova Takes Stock
PUBLISHER: Reuters
TEXT: NEW YORK — Russian teenager Maria Sharapova said she was exhausted by her fightback to force a third set in her loss to Kim Clijsters in Friday’s U.S. Open semifinals and must improve her physical conditioning to reach her tennis peak. 
“I kind of gave it all I had in the tiebreaker,” the top-seeded Russian said after her 6-2 6-7 6-3 defeat. “Then in the third, I kind of ran out of gas. 
“At that point, it’s pretty tough because physically I still have to get a lot better and I have to play these three-setters. The points are going to go on and on and on,” she said. 
“This is not something that’s going to happen overnight. I’m only 18, and this is going to take time. My body is still growing, and I’m still adjusting to my own body.” 
The 18-year-old Sharapova, who exploded on the tennis scene with her 2004 Wimbledon victory at age 17, has reassumed the No. 1 ranking after the U.S. Open. Still, she recognizes the need to get fitter. 
“When the points started getting longer and longer, I felt that she had the advantage,” Sharapova said of fourth-seeded Belgian Clijsters, 22. 
“She was able to execute them well. I did have opportunities, going into the net, and she came up with great shots,” added the Russian, who fought off five match points in the last game of the second set to force a tiebreaker. 
Asked to describe Clijsters, Sharapova said, “Great athleticism. She moves amazingly, amazingly. That’s a big plus in tennis.” 
Sharapova said her best was yet to come. 
“When the time comes, the time’s right, then it will happen. It takes a lot of work, and I’m willing to go back on the practice court and in the gym, whatever I need to do, and work hard to win the Grand Slams.”
Meanwhile, Sharapova’s compatriot Yelena Dementyeva accused Mary Pierce of using unfair tactics in their semifinal on Friday, which the Frenchwoman won in three sets. 
Pierce took back-to-back injury timeouts lasting 12 minutes after losing the first set, and as a rattled Dementyeva lost her way, Pierce lifted her game to win 3-6 6-2 6-2. 
“You can change the game by winning unbelievable points or by changing the rhythm, that’s the fair point,” Dementyeva said. 
“But by taking 12 minutes’ timeout, I don’t think it was a fair play. 
“Do I think she had something [of an injury]? I don’t think so. But she could do it by the rules and she did it. 
“If that’s the only way she can beat me, I mean that’s up to her.” 
Dementyeva had dominated the first set before Pierce called the trainer, and the Russian was forced to wait as the 12th seed had extended treatment, reportedly for injuries to her right thigh and to her back. 
When the match resumed, Pierce showed no signs of impaired movement, running down everything and lifting her game to become the first Frenchwoman to reach the U.S. Open final. 
Dementyeva said she knew that Pierce would use everything she could to win the match.

TITLE: Alonso Waits as Kimi Wins Belgian Grand Prix
AUTHOR: By Alan Baldwin
PUBLISHER: Reuters
TEXT: SPA-FRANCORCHAMPS, Belgium — Fernando Alonso must wait two more weeks to become Formula One’s youngest champion. 
Even if McLaren’s Kimi Raikkonen wins the next round in Brazil, the end is drawing near after the final European grand prix of the season in Belgium on Sunday. 
Six points are all Renault’s 24-year-old Spaniard needs now to clinch the title, regardless of what Raikkonen does. 
Despite his 25-point advantage with three races remaining, Alonso was still taking nothing for granted after finishing second to Raikkonen at Spa. 
However, McLaren boss Ron Dennis recognized that his man’s hopes were in the hands of fate — or a simple bathroom blunder. 
“I wouldn’t wish anything on anybody, but Alonso could slip over in the bath, couldn’t he?” said Dennis when asked whether the drivers’ title was out of reach. 
“It’s not over. It’s just more difficult. 
“I would have loved to leave here leading the constructors’ [standings], and a little bit closer on the gap [to Alonso] would have been not just great for us but for Formula One too.” 
McLaren should have had a one-two for the first time in five years on Sunday but, as in Turkey last month, was thwarted again. 
Colombian Juan Pablo Montoya crashed out four laps from the end after a collision with Williams’ Brazilian stand-in Antonio Pizzonia, handing Alonso second place. 
Instead of taking the lead in the constructors’ championship, as had looked inevitable, McLaren were left six points adrift of Renault. 
That is despite McLaren having won eight of the last 12 races and boasting clearly the quickest car. Consistency, or lack of it, has been their downfall. 
Alonso has finished second in the last three races and on the podium 12 times in 16 grands prix. 
Every time Raikkonen tries to reign him in, he finds the Spaniard either right behind him or able to claw the lost points back in the next race. 
“I think it will be difficult for Raikkonen to catch him,” said Renault boss Flavio Briatore. “But the constructors’ championship is much closer and we will stay focused on that until the end.” 
Alonso started Sunday’s race knowing he would be champion if he finished four points ahead of Raikkonen but that nothing would be decided if neither scored. Now the pressure is all on the McLaren driver. 
Alonso can retire and still be champion in Brazil if Raikkonen fails to finish in the top four. 
“I only need six points and it doesn’t matter if Kimi wins,” he said. 
Renault will have a new aerodynamics package for the Interlagos race and Alonso will also have a new engine, which will also be an evolution of the one used at Spa. 
“I think it can be a good race for us,” he said. “I think Interlagos has been a good circuit for the Renault characteristics and this year even more so. 
“In Brazil I think we can be really competitive ... I need six points so to be on the podium will be the target again. I am very confident that it will be possible.”

TITLE: MBAs Get Fit For Business
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Corporate MBAs are not a exactly new product for Russia, but their nature is changing. As business education starts to look more and more towards people management, rather than the technical aspects of business, experts say tailor-made MBAs are gaining appeal.
What’s more, such courses are being seen as good for strengthening staff loyalty, something standard MBA programs have always failed to deliver.

In the last five years, St. Petersburg companies have increased their educational expenses threefold, although only nine percent of the firms helped their employees with MBA studies, according to statistics by the city’s Higher School of Economics.
The main emphasis of the education the companies still put on training courses (78 percent), seminars (52 percent), and profile courses (35 percent), said Yelena Polshchina, personal department head at the Higher School of Economics.
Companies were almost three times as likely to sponsor on-the-job education (26 percent) than to back their employees interested in MBA studies. An option to bridge the gap between the two — combining job-specific training with MBA studies — could appear in the form of a corporate MBA program tailor-made for the ordering company.
Such programs both teach the technical knowledge companies want their employees to have and develop management skills that experts say are absolutely key in a mature business environment.
“ISO standards started with the technical requirements and advanced to [dealing with] management standards. That’s the general trend. When the job market is mature, the interest in corporate MBA programs rises,” said Margarita Adayeva-Datskaya, communication vice-president of the Stockholm School of Economics.

MBA IN ANY WAY
Corporate MBAs are no rare extravagancy for large companies operating in Russia any more. Most Russian majors have either tried them or intend to, business education experts said.
It being a company-specific production, however, what constitutes a corporate MBA is not so easy to pin down.
“[For its corporate MBA program] LUKoil uses distance learning. UES and Severstal, on the other hand, prefer interactive study forms saying that distance learning is for middle management; senior bosses need to be more deeply involved,” said Tatyana Soltitskaya, corporate program director at the St. Petersburg State University’s faculty of management.
Their relatively high prices preserve MBA programs’ elitist image. And open, two-years MBA course costs $15,000 per student. Here, corporate programs can make for a cheaper alternative, averaging about $5,000 per student, Soltitskaya said.
Corporate programs also tend to be shorter. Companies create MBA hybrids on the basis of a standard MBA program that is approved by the federal Ministry of Education. The larger part of the standard course, between 50 and 70 percent, is left untouched, with the rest filled with special disciplines, like industrial marketing, Soltitskaya said.
The main thing, experts warn, is for the company to work closely with the MBA school. Negotiations with the school should definitely involve senior executives, because human resources managers alone do not have access to the full and correct company information.

PRO AND CONTRO
Corporate programs do have positive effects, but “to benefit from a corporate MBA, company managers should know what they want and have a solid staff resource,” Adayeva-Datskaya said.
“To promote a person to a higher level within the same company you should teach him very specific skills and knowledge. That is what the corporate MBA offers,” she said.
Sometimes companies turn to MBA in the hope of inventing a new corporate strategy or business approach.
“When an old industrial plant is acquired by a larger group, the new team is interested in changing the corporate psychology and culture, and they hope an MBA will help,” Soltitskaya said.
Russian computer chain Marvel regularly holds specialized MBA courses for its staff and distributors. Regional sessions are held for general and financial directors and specialists of partner companies.
Despite irregular, and to some extent fragmentary knowledge, the audience rates the studies very highly, which makes corporate MBA an effective image tool for Marvel as a positive employer, Soltitskaya said.
At the same time, managers should be aware of MBA traps. Many people believe in their company’s uniqueness, but too narrow a curriculum can be limiting. Soltitskaya added: “The best business solutions are inspired by examples from different companies and industries.”
Other common fallacies derive from the belief that business courses need to be largely focused on practical cases. Theory should take no less than 40 to 30 percent of the session time, experts warned.

FINISH MBA, THEN RUN AWAY
One of MBA education’s most infamous effects is the urge for fresh business graduates to quit their job for a better position. In contrast, Adayeva-Datskaya said that a corporate MBA course will increase staff loyalty.
Tailor-made MBAs are designed to be company-specific and bear in mind advancement possibilities within the firm, she said. While working on its new budget system, Ilim Pulp, the country’s largest wood-processing corporation, ordered a financially heavy MBA course that could be instantly applicable.
However, other experts point out examples to the contrary. Soon after putting its top staff through an in-depth corporate MBA program in 2002-2003, Severstal lost more than one third of its managers. Most resigned immediately to take up other jobs, while the rest were later headhunted by competitors.
“It was a classical example of a company that lacked a motivation system. Now, many clients ask us for help in retaining the talent within the company,” Soltitskaya said.
Either way, companies have become more wary of investing in their staff. Most now ask employees to pay back the money spent on their corporate training should they leave within a certain period after the studies.
Of course, the smart move if you’re changing jobs soon after completing a corporate MBA may be to ask your new employee to take care of ‘old debts.’

TITLE: Back to Russia With an MBA, and Loving it!
AUTHOR: By Sveta Skibinsky
PUBLISHER: Staff Writer
TEXT: The spice of doing business in Russia is attracting more and more Russians with an MBA degree from a top Western university to return home and take advantage of burgeoning emerging-market opportunities. The returnees seek an exciting career, but the local job market is not always willing to accommodate.

“Most of my Russian-speaking [MBA] group at Harvard are already working in Moscow,” said Irina Gaida, who graduated from Harvard Business School in 2003. She now works as a consultant at Boston Consulting Group’s Moscow office.
The MBA group’s ‘Russian fraternity’ counted about 20 people, about 70 percent of whom have consequently returned to work in Russia, Gaida said. “Maybe it is the complexity of problems that have long ceased to exist in Western Europe that make Russia attractive to people looking for a challenge,” she said. Tough problems require exceptional solutions, and the task of finding them is exciting, she said.
And as for the money: her current salary at BCG is comparative to what she would be making in Europe, Gaida said.
The trend of returning graduates looking for a challenge has been backed by research recently completed by analytical agency Begin Group, which specializes in recruitment and business education
“For an MBA graduate from a top business school the personal and professional goal is self-expression not money, although he or she will expect money to compliment success,” the research said.
The demand for graduates with top Western diplomas also seems to be rising as more and more Russian companies plan to enter global markets, either by posting an initial public offering on a foreign stock market or through mergers and acquisitions that often involve Western partners.
“International standard finance and analytical skills taught at Western MBA schools are essential for international companies looking to produce in Russia, as well as for large Russian companies,” experts at Ward Howell, a global recruitment agency that mostly deals with executive positions, say on the company’s web site.
“Graduates of top Western business schools are very in demand in Russia: in investment banks and other financial institutions as well as in Russian companies looking to expand,” Yekaterina Matzkevich, a consultant with Ward Howell’s St. Petersburg office, confirmed in a telephone interview.
The story changes, however, once we examine the recruitment needs of mid-level management positions, or consider smaller Russian companies.
“We get no requests for Western MBA recipients. They are not very demanded here,” said Yury Mikhailov, director of Consort recruitment agency’s St. Petersburg office. “Good in theory, but in practice they are rather at a disadvantage. Our reality is different,” he said.
Mikhailov’s colleague Lena Kvartalnaya, a consultant with Consort Executive in Moscow, added that the spice Western MBA graduates seek may only exist for them because they are out of touch with the local picture.
“They come back with a changed mind-set, often lacking the Russian business-language necessary to establish trust with the employer and co-workers,” Kvartalnaya said in a telephone interview from Moscow.
Russian MBA schools base their studies around Russian cases, while Western programs focus on cases with much wider horizons, which can be a nuisance when coming back into the Russian market-place, she said. “They are too far removed and it is hard for them to fit in,” she said.
The graduates maintain that the lack of some local etiquette is not the main issue, since an MBA education provides a person with the right skills and attitude to succeed in any environment.
Misha Sobolev, a Harvard MBA graduate and head of the New York chapter of CluMBA, an association of Russian speaking MBA graduates from top American business schools, said it is the qualities people develop during study, rather than the study itself which make them suitable for the Russian market.
“ [MBA] programs are hard, and the people who are able to get in and make it, come to possess the “survival of the fittest” character trait. They come to Russia for the opportunities that exists in the country and they successfully use their superior personal and professional qualities,” Sobolev said in a telephone interview from New York.
As for the ‘specifics’ of the Russian business environment, those companies that want to expand and, more so, to survive increasing global competition have to adapt to the international standards, Western MBA graduates said.
“Yes, there are those companies that insist on keeping Russian not Western standards, that say that Russian standards are different, “ Gaida said. “However, as a rule those companies are not successful.”
Yekaterina Girshina, a programs coordinator at the British Council, which assists interested students in choosing a program abroad, said Western programs are simply more developed in teaching international-standard professionals.
Westerns programs have a deeper history to draw on, Girshina said. “The professors are often practicing business professionals themselves. More interesting project work and internships are available,” she said.
About 20 people leave to study at British business schools each year. Only about a quarter of them, however, pay for a full-time degree by themselves, Girshina said. Most of the students have their education either paid for by their company, or through a scholarship, as the benefits of a Western MBA come at quite a cost.
A regular full-time, two-year degree at Harvard will cost up to $30,000, while a part-time or a distance-learning course at other schools can also demand as much as $15,000.
However, with various financing schemes, such as student loans, becoming more available, many students choose to take the risk of paying for a degree in the hopes that it will repay with interest through better employment in the future.

TITLE: Rating Business Schools Is...
AUTHOR: By Sveta Skibinsky
PUBLISHER: Staff Writer
TEXT: Clearly understanding the reasons for getting an MBA diploma and having a plan as to how the degree will be applied after graduation is key to a meaningful and worthwhile MBA experience. And, above all, it helps in choosing the right MBA program.
“Registered in Russia are over a hundred programs with different specializations, formats, registrations, staff, education methods, costs and even languages,” says an MBA business education guide that is to be published by Begin Group this month.
“The choice of schools is an important step, which, all else being held equal, can make or break one’s MBA success, … and it depends on what the prospective students wants to get from the program,” the guide notes.
The guide, a copy of which was obtained by The St. Petersburg Times, says that students highlighted the following criteria when choosing an MBA program:
• program content,
• the school’s name and reputation,
• the length of the program,
• the cost,
• the amount of courses available to choose from.
Who might be the other students was also considered to be an important factor when choosing an MBA school, the guide adds.
Alexander Yegorov, a consultant at Ancor recruiting, who often works with MBA graduates, adds to the list “program history, reputation, international exchange opportunities, and a professional staff.”
Nonetheless, Russian “employers never put [an MBA degree] above experience,” Yegorov warns.
“Of course, it makes a difference where the degree is from. But, it is hard to define a leader among St. Petersburg business schools. There are pros and cons with each option. And, in general, there is little distinction employers make between a graduate of one Russian MBA school and another,” Yegorov said.
As for attempts to rate Russian MBA programs, Yegorov said there is still too little program history to compile reliable and trustworthy ratings. “Western ratings are more objective, since most institutions have traceable program history and there are reliable salary and graduating class figures,” he said. “As for St. Petersburg, an independent rating needs serious research.”
Yury Mikhailov, director of St. Petersburg’s office of Consort recruitment agency, and also an MBA graduate of International Management Institute of St. Petersburg, said the figures appearing in existing ratings need to be more reliable.
“The salaries given in all the tables that compare the before and after earnings of business school students are grossly overestimated. You cannot expect to be suddenly earning twice as much once you’ve graduated from an MBA program,” he said.
However, some milestones along the way should make it easier for students to plan their professional future, Mikhailov said. “Set some big goals to see where you want the degree to take you in two, four, seven years,” he said.
Natalia Nevolina, director of the Center for Professional Education at Work and Professional Relations academy stressed the importance of basing MBA ambitions on well-founded goals.
“Aiming to activate one’s analytical potential, tie together different sides of a business into a bigger picture, should be the goal for those choosing to enroll in an MBA program — not simply gaining knowledge in a particular business sphere,” Nevolina said, as cited by the Begin Group’s MBA guide.
And if the goal is set correctly, it will be rewarded, recent graduates said. “Those of my classmates who knew what they wanted, had no problems getting a job of their choice,” said Irina Izyumina, marketing director at Kroshka-Kartoshka fast-food chain, who graduated from the International School of Management in 2003.
“It is those people who had the hardest time deciding what they wanted out of the program, that had the most problems afterwards, although they were undoubtedly smart and personable people,” she said in a phone interview.

TITLE: Practical Marketing About to Start with “You!”
AUTHOR: By Sveta Skibinsky
PUBLISHER: Staff Writer
TEXT: A city-based marketing association has created a course, to start this month, which aims to bridge the gap between theory and practice by offering aspiring marketing professionals projects that are company-specific. The students will get feedback on their work, while the companies participating in the project will stock up on fresh marketing ideas.

No amount of academic study can fully prepare a person for professional work, and what’s more nearly 60 percent of university students do not end up in a job that has any connection to their degree, according to statistics from Levada agency for social research.
The gap between theory and working reality has serious repercussions, not least in marketing — a field in which up to date knowledge of social trends and concepts is vital to achieving success.
“After graduation, marketing majors have very little understanding of what the actual profession entails, even if they have had internships in the field and done various case studies in college,” said Natalia Lantzevich, an education programs specialist at Competenz consultancy.
Traditionally, students learn in a passive absorption of ideas, but then find it hard to respond to work that demands active positioning and result-oriented, independent problem-solving skills, Lantzevich said.
Polina Petrushina, marketing and development director at Trust Management, a strategy consulting company, says fresh college graduates may offer “fresh blood” and a cheaper employment possibility. However, most companies are afraid of taking on someone completely green.
“Companies may want to develop a specialist to fit exactly to their needs. However, they also consider the losses they will be making until that employee makes the transition from being a student to working as a professional, and that often turns companies off,” Petrushina said.
“The poor student has to have some sort of ‘playing field’ to go from test-books to practice. Problem based learning systems are the answer to that,” she said.

HALFWAY TO HEAVEN
Problem based learning (PBL) programs are those that allow students to participate in active educational methods, such as projects, case-solving and business games, said Competenz’s Lantzevich.
PBL is built around real-time problems that exist at various companies. The firms offer students the chance to find possible solutions, and have professionals monitor the results.
“Work or, rather, education, is organized in small groups, where students also gain the necessary skills of teamwork, communication, and simple tolerance,” Lantzevish said.
Although PBL, as an educational method is a practice far more in Europe and the United States, St. Petersburg schools too have implemented some elements of the system into their academic programs.
The methods most commonly employed by local universities are case studies and projects. St. Petersburg State University’s marketing and management undergraduate faculty said its students even participated in the L’Oreal global challenge, a well-known marketing competition among undergraduate students around the world.
However, experts say using case studies and project methods during the course of education is not enough to prepare students for the real world.
“The shortcomings of such practices within a university course are that there is little communication between the actual company and the students, the results of the project give no feasible benefits to the companies and there is no feedback from practicing professionals,” said Philip Guzenyuk, who is one of the founders of a marketing professionals association Brand People.

THE REAL MANNA
To work out a way to organizing a program that would include that student-company interaction, in June this year Brand People conducted a business game among marketing professionals, which focused on developing a PBL program fit for the city.
“About 25 marketing and human resources experts from leading St. Petersburg and Moscow companies participated in the game, and the result was a proposal to create a project-based business-school called You! purely for marketing students,” Guzenyuk said.
In the program, students from the city’s top universities will conduct market research, develop advertising campaigns, and brainstorm new business development ideas for program’s partner-companies. The process is to be supervised by representatives of those companies, business-coaches and university professors, who would grade the input of each student and help the students find suitable employment in the future, Guzenyuk said.
He added that contact with the universities have already been made and the first in the series of You! business events will start this month.
Students responded positively to the idea. “I would be interested in participating,” said Viktor Rybtzev, a third-year student at Finance and Economic Institute (FinEc), who found out about the program at a round-table.
“The project would allow me to experience what marketing was really about, and see whether it suits my personal and professional goals. At the same time feedback from professionals is kind of essential for my education, and also provides a valuable tool for interviews and further employment,” he said.
The program also had backing from business leaders. “It is well-known that theory, as good as it may be, is nothing without practice,” Andrei Dobry, marketing director of Molinos.ru internet agency and project leader for web-sites CitySpb.ru, Restate.ru and PetersburgOnline.ru, said at the business game in July.
“This program would allow students to face real-life problems, try to solve them in teams, analyze and model actual business situations, and of course, see themselves as real marketing professionals,” he said.

TITLE: A Guide to Business Books
TEXT: Does accounting baffle you? Do the mere mention of detailed financial transactions give you a headache? But you still want to graduate with a solid MBA? American professor of business education and Fulbright Scholar Anthony Gerritsen offers a practical guide to studies, warts and all.

Taking an MBA program requires studying many basic business disciplines. However, students that do not have an undergraduate business degree often lack experience of certain key business processes.
Many students in such a situation need to supplement their studies with basic courses in accounting, finance, economics, and management. The task is daunting, and not exactly riveting, but it need not seem so oppressive.

LEARNING THE PRINCIPLES
The beginning accounting course — principals 1 — covers basic debit and credit entries, and how to construct basic financial statements. Principals 2 involves looking at stocks, bonds, and the time value of money. The latter part in particular is usually extremely difficult to understand, and the class and books rarely help, being rather dull.
A way to learn effectively, however, would be to pick an instructor that brings in real-life examples to the class. A great deal of humor will also help students have a greater appreciation and need to want to learn accounting and finance. Simply listening to lectures is generally ineffective. Students learn more by working in small groups and trying to figure out solutions on their own.
Over 10 years of teaching I have experienced all beginning accounting books to be the same. Accounting is accounting. Over time the authors have tried to make the material more alive and easier for the reader to understand, but a beginning accounting book from several years ago will be as practical as the most recent one on the subject.
Also, try to pick up the principles of debit and credit before your course begins. It is very important for the businessperson of today to be able to analyze and interpret financial statements, and spending two months of your MBA program on this will be a waste of your time and fees.
Although many business books are translated into Russian, the quickest route to the latest in business education is through reading in English. The game is certainly worth the candles. MBA and CPA degrees are very marketable, and in the West almost necessary to compete in a very competitive job market. Through personal experience, I can say that business education gives a person ever-greater opportunities to succeed in life.
ACCOUNTING
For absolute beginners to accounting, I recommend “Corporate Financial Accounting,” 8th Edition, by Carl S. Warren, James M. Reeve, and Philip E. Fess. This text successfully integrates innovation with tradition by showing how the preparation of financial accounting information is useful. The book uses the preparation of financial statements as the framework for understanding what accounting is all about.
A more detailed version of Principals 1, at intermediate level, can be found in Intermediate Accounting (with Thomson Analytics), 15th Edition, by James Stice, Earl Kay Stice, and Fred Skousen. “Intermediate Accounting” presents accounting from the perspective of the essential activities of business: operating, investing, and financing. Learners will see accounting as it is in the real world — an essential component of the management function and decision-making process.
The more experienced businessperson would be interested in the subjects published at www.swlearning.com. The web site has a collection of Thomson South-Western texts regularly used at many American MBA colleges.

PRINCIPLES OF FINANCE
A book that focuses on the critical financial concepts, skills, and technological applications required by every MBA in the 21st century workplace is “Corporate Finance: A Focused Approach,” 2nd Edition, by Michael C. Ehrhardt and Eugene F. Brigham. It can also be used with Thomson ONE — Business School Edition.

MANAGERIAL ACCOUNTING
I have found that of all the accounting texts, “Managerial Accounting,” 8th Edition, by Carl S. Warren, James M. Reeve, and Philip E. Fess gets students attention the most.
Managerial accounting is the most important subject for a business person to understand. Many American textbooks do a great job of explaining and clarifying very important subjects. Primarily students should look to understand cost/volume/profit analysis, breakeven, performance evaluation, product costs, product pricing, budgeting, and cash flows. Without this information, the business will have difficulties in competing.

TAX RULES
For anyone interested in the tax rules and regulations, the following text book is very good: “West Federal Taxation 2006: Comprehensive (with RIA and Turbo Tax Basic/Business)”, 29th Edition.

Some of the books mentioned in this article are available at the American Corner on 46 Fontanka embarkment. They were donated to the center by the University of Nebraska Kearney.

TITLE: Business Schools
TEXT: International 	Management Institute of St. Petersburg (IMISP)

50, 9-ya Liniya. Tel.: 325-1919
E-mail: marketing@imisp.ru
http://www.imisp.ru 
This MBA project was designed by the IMISP faculty in collaboration with leading specialists from Italy’s Luigi Bocconi University and was approved by the EU, which has also provided financial assistance. Applications for an MBA are accepted until November 21, 2005 and the program begins on December 5, 2005. 
    Students must be permanent residents of the Russian Federation or hold valid visas throughout the period of study. The program takes two years to complete. 
    The school offers a part-time program that allows working managers to study. Cost: $12,300-16,800 (dependent on results of entry tests). Payments can be made in five instalments.

The Open Business School in St. Petersburg

6 Inzhenernaya Ul. Tel.: 325-9401, 
313-4040
E-mail: info@ou.ru
http://www.obs.ru
The Open Business School offers two MBA programs via distance learning: 
• The Open University Business School (U.K.) MBA progra, and 
• The MBA of the International Institute of Management LINK (Moscow) which is for the most part based on the OUBS MBA programme but in the same time meets the requirements of Russian Ministry of Education standards for MBA programmes. 
MBA OUBS costs $15,000 to $ 16,200, and MBA LINK costs $10,400. Both programs are designed to suit managers with different priorities who want to work and learn at the same time. MBA (OUBS) has been accredited by EQUIS, AMBA and AACSB. Classes are taught in English by Open University professors.
 
The Stockholm School of Economics in Russia

2 Shvedsky Per. Tel.: 320-4800
E-mail: office@sseru.org
http://www.sseru.org
EMBA — General Management 
EMBA — Strategic Marketing 
These are two-year programs consisting of 15 modules. Each module is taught over five days, running from Friday to Tuesday. 
Teachers are professors from the Stockholm School of Economics and other international business schools, for example Insead, LBS. All courses are taught in English. Examinations are taken at the end of each semester. A master’s thesis is due at the end of the second year.
Entrance requirements are a completed post-secondary education program in any major specialism and adequate experience in business (minimum 3 years). The admission procedure includes testing and an interview in English.
Cost: 16,000 euros

International School 
of Management — ISM, 
St. Petersburg Campus of the Vlerick Leuven Gent Management School

16 Birgevaya liniya. Tel.: 331-7544
E-mail: mail@ism-nw.ru 
http:// www.ism-nw.ru
The ISM — Vlerick Leuven Gent Management School MBA program is an international 50 full-time weeks postgraduate degree program in general business management. It has been offered since 1990 in St.Petersburg . The program has modular structure and thus can be completed in over maximum of 3 years selecting modules each year. 
Cost: 6,000 euros, if taken in one year and 7,200 euros, if taken during 2-3 years.

Northwestern Office of the International University in St. Petersburg

26/28 Mirgorodskaya Ul. Tel.: 277-5287
E-mail: mail@interun.spb.ru
http://www.interun.spb.ru
This two-year MBA program is accredited by the European Council for Business Education. It includes active forms of education, including case studies, group discussion, round tables, and internships. It has famous professors from Moscow and St. Petersburg. The course boasts great for the general development of personal-management skills.
Both full-time and part-time studies are offered.
Cost: $6,000 for a two-year program; $3,200 for six-month program (for students with a degree in economics).

Higher Economic School 

34, Nab. canal Griboedova
Tel: 310-38-62, 312-87-37, 110-56-51
E-mail: dir@mipk.spb.ru
http://www.hes.spb.ru
Two-year MBA program No. 8220; Management of the Enterprise No. 8221. These are focused on the training of top-managers and middle-level managers.
The program is provided in partnership with the Higher International School of Commerce of Metz, France, which is a member of the ESIDEC group.
The program begins on Oct. 1 and includes four or five lectures per week in the evenings as well as on Saturdays.
Cost: approximately 8,000 euros.
A two-year MBA program “Marketing” is focused on the training of top-managers and middle-level managers, who are working in the marketing field. The program is provided in partnership with University of Applied Science Anhalt (Bernburg, Germany).
The program begins on March 14 and includes four or five lectures a week in the evenings as well as on Saturdays.
Cost: 7,000 euros

School of Management, 
St. Petersburg State University

3 Volkhovsky Pr., office 210. Tel.: 323-8444, 323-8448
E-mail:mba@som.pu.ru
http://www.som.pu.ru
This is a two-year program consisting of four semesters and an internship. Offered in full-time and part-time forms. English-language study is part of the program. All graduates receive the diploma from the St. Petersburg State University.
Applications for MBA 2005 accepted until April 1. Cost: from $12,500 to $13,500, depending on level of English-language proficiency.

INTERNATIONAL BANKING INSTITUTE 

58, Nevsky prospect, Office 400
Tel: (812)571-53-09
E-mail: mba@ibi.metrocom.ru
www.ipc.ibi.edu.ru
MBA programs have been conducted jointly by the International Banking Institute and Stockholm University School of Business since 1994 with the help from the Swedish Government. The programs are accredited by one of the most famous accreditation bodies EQUIS (www.efmd.be).
Executive MBA Banking and Finance — 1.5 years. MBA Financial Management — 2.5 years MBA Bank Management — 2 years MBA Corporate Finance — 2 years Programs are run on a part-time basis.
There is a one month pre-diploma training session in Stockholm. Cost: EMBA — 7,800 euros; MBA — 9,750 euros. Graduates are awarded two diplomas: the MBA Diploma of Stockholm University School of Business and the MBA Diploma of IBI, and get Master’s degree of Stockholm University. 

American Councils for International Education: ACTR/ACCELS U.S. Educational Advising Center

46 Fontanka Embankment, 
Fourth Floor
Tel: +7 (812) 571-4593
E-Mail: eic@americancouncils.spb.ru
Website: www.americancouncils.spb.ru
American Councils for International Education has been a leader in educational exchanges linking the United States and Russia for three decades. 
The U.S. Educational Advising Center, funded by the Department of State, offers a full array of resources, free consultations, regular seminars, and GMAT preparation for anyone applying to MBA programs in the United States. 

British Council 
St. Petersburg

Fontanka 46. Tel: 118 5060
E-mail: bc.stpetersburg@britishcouncil.ru 
http://www.britishcouncil.ru
All information on Education in the U.K., library and U.K. web resources, teaching centre and examination service, arts and science projects.
We provide access to education and creative ideas from Great Britain and build long term relationships between Great Britain and Russia.

TITLE: M. B. A. What Is it Good for?
TEXT: What are the general features of different MBA courses?
American business schools use more case studies. In Europe it’s hard to find a universal distinction criteria. Some business schools were founded by Americans and to a large extent retained the American approach. In principle, all business schools use case studies. The difference is in the proportion that they make up out of the whole course. As a rule, European business schools devote an equal amount of time to theoretical issues.
I’m not prepared to make comments on Russian business schools. They are still developing.

What is important to know about an MBA before pursuing it?
When choosing a business school you have to ask yourself why do you need an MBA. Not everyone needs it — not everyone has time to get it. The second question is where to get an MBA. The third is how to pay for your studies — that’s very important. And the fourth is what to do after graduating. I mentioned it last, but maybe it should have started the list.

What opportunities does an MBA give?
An MBA is a turning point in your life, it helps change the industry one works in, the job position, the country even. But it’s better to change one thing at a time. An MBA provides you with time to think over all the details.

Isn’t it difficult in Russia to explain this new way of thinking to narrow-minded general directors?
It depends on one’s ability to come to an agreement.

But this skill is not taught by MBA programs.
An MBA gives you the knowledge, the tool you can use in an argument, it changes one’s approach to management. However, every company can change only to an extent and at its own pace. You can’t make a new company overnight.

Is it possible to combine study with work?
If you don’t want to change your career, region, profession or industry, but simply feel that you lack some knowledge, you can study and work at the same time. You will just obtain the new knowledge and rise to a higher company position.

If one’s school is abroad, however …
There are module programs, where students attend classes for several days once every two months.
How do Russian managers pay for their studies?
Sometimes employers pay for them. Some students pay for themselves, some take out loans. There are student grants, for example Chevening scholarship at the British Council. It may be a considerable help to cover the learning and sometimes even living expenses. There is another program that finances MBA study in the United States.

How much does an MBA cost?
In England, it ranges between £15,000 and £25,000 ($27,041 to $45.069) for a one-year program. Living expenses run to between £600 and £1,000 ($1,081 to $1,803) a month.

If we consider an MBA as an investment, how soon can one expect a return?
An MBA is a thing you do for yourself. To estimate the return on investment in this case is very difficult. When making a decision you should choose the one option that widens your perspective, and an MBA increases opportunities.

Can an MBA really help to change the industry a person works in?
It depends on the person. Meeting an MBA graduate the employer will primarily ask what the person did before business school. If he has merely finished an undergraduate course, chances of success are small. The image of a crowd of excited employers just standing there waiting for you and your MBA diploma is a myth, which lost any kind of truth after the crisis of 2000. Before that date, some graduates could choose between several companies. At the moment, employers are only slowly recovering their interest in MBA qualifications and it’s difficult to find a job.
An MBA is highly rated by consulting and investment companies. Industrial companies pay more attention to work experience.

There is a stereotype that MBA graduates often demand higher salaries, meanwhile their management approach is incompatible with the way many Russian companies operate.
Entering a new company you have to understand its corporate culture, management methods. You have to understand why you came there. Maybe it was for the salary, or a chance to learn something new, or for the contacts. Those purposes are not mutually exclusive, but you need to be aware of them.

Does a Western business approach prove effective in Russia?
In Warwick many lecturers realized that American models were not fully suitable for Europe and still less suitable for Russia. They explained general principles that could be tailored to specific situations. All methods are effective only in a specific context.

What work experience is required from MBA applicants?
Between two and three years in business, but it varies. We had students 40 years old with an extensive work history on our course. There was an Australian college dean. My best friend from that course was a pilot for a passenger Boeing plane.

Does an MBA really follow the diversity principle?
There were about 100 students in Warwick. People of more than 30 nationalities studied on the same course. I don’t know if it was done on purpose but all the study groups were very mixed.

What was the most interesting part of the studies?
An MBA offers interesting games and simulations. For example, our class was divided into several groups and we worked on a car distribution system with plants, importers, distributors and dealers. We had lots of small car models in warehouses, made orders, drew schemes and studied business processes. It was a vivid and practical way to comprehend all the details. Operational management we studied on the example of a Japanese restaurant where all the processes are almost perfect.
People don’t normally feel that they work in a system, and yet every step is totally mechanized.

TITLE: Advice for MBA Freshmen
AUTHOR: By Sveta Skibinsky
PUBLISHER: Staff Writer
TEXT: You’ve picked the right school — and they picked you. Surely, the hardest part is over? Not so, say professors at the city’s top MBA schools. To get something useful from business education, you need to adopt the right attitude. We investigated just what this may involve.
The MBA course seems saturated with opportunities: to make new contacts and to further professional knowledge. 
However, those opportunities are not seized by all. Much depends on how a freshman student perceives their MBA education.
“It is the candidate’s attitude that affects the actual learning process and the skills they take away from the classrooms, as well as the professional and personal networks they will be able to create,” said Margarita Adayeva—Datskaya, vice-president of the Stochholm School of Economics (SSE) in St. Petersburg.
“When a person starts the program he or she does not have a clear view as to what the program will turn out to be exactly. The most important thing is the expectations one carries.
“One has to be prepared for meeting people who share one’s values and can serve as an example to follow and admire. By being open to learn from everybody — from teachers as well as classmates — an MBA student extracts the maximum rewards,” Adayeva-Datskaya said.
The rigorous selection that MBA applicants go through is meant to play an important role in forming an interesting group, which doubles the success of a business degree will bring, she said.
In St. Petersburg, most business education programs require a formal interview as well as academic placement tests to guarantee the homogeneity of the group.
BUSINESS BOOGIE
Besides one’s personal expectations, there are the academic and social sides to every program, for which there are a few milestones to observe, former MBA students and business teachers said.
Firstly, one should not obsess over the academic results, but focus on the process of attaining the results. Secondly, one should be active from the start. And thirdly, the studies should be understood as examples of practical situations.
“The students should be active even in learning business theory in the classroom – they should constantly model its use in solving practical problems, apply it to their past professional experiences,” said Alexander Yanchevsky, director of International School of Management (ISM) in St. Petersburg.
“However, they should not simply accumulate knowledge but learn to solve problems using the newly gained skills.”
Most of the future employers are not interested in the grades one received at business schools, but rather in the graduate’s ability to regularly make well-founded effective decisions in a short period of time, Yanchevsky said.
“Develop the skill to make a decision without having all the information for it, as that is something you will often need to do in real life,” he said.
Learning to work effectively in teams is another important aspect to both the academic and the interactive side of the MBA program. “That will help students develop leadership and social skills, in learning how to communicate with each other, by not only hearing but listening to their classmates,” said Natalya Lebedeva, director of international programs center at the International Banking Institute.

WHERE’S THE START-LINE?
“Individual positioning of every member of the group begins, virtually within the first few hours of the introduction process. Further down the road, the students regularly have opportunities to show their ‘bright side’— during case discussions and presentations, by preparing non-ordinary homework assignments,” said Viktor Dorogostaisky, marketing director of the city’s International Management Institute (IMISP).
And in that the students should be careful to demonstrate a ‘good citizen’ personality — to avoid being high-headed toward others, ISM’s Yanchevsky added.
“Remember, that MBA in common conversations often stands for ‘Mediocre But Arrogant’ and avoid conforming to the stereotype,” he said.

TITLE: Learning The Languages Of Business
AUTHOR: By Darya Shmitko
PUBLISHER: Special to The St. Petersburg Times
TEXT: As the academic year kicks off, the city’s private language schools say demand has stimulated another record number of students enrolled. And with Russia forming close business partners nearer to home, English is facing some stiff competition as the world’s lingua franca.

It is no longer sufficient for a modern business person to speak only one foreign language, says Galia Saifutdinova, public relations manager of educational agency IQ Consultancy. “Normal business negotiations involve about three or four languages,” and people are beginning to respond to the widening linguistic need, Saifutdinova said.
According IQ Consultancy, 90 percent of business people learning foreign languages in St. Petersburg pick English, while 10 percent focus on other languages. Among those, the most popular foreign languages in the city are Chinese and Scandinavian languages, as business people look to capitalize on the growing economic ties with Russia’s eastern and northern neighbors.
The most notable foreign investment in St. Petersburg in recent years has emerged to be the Baltic Pearl district development. The $1.5 billion investment comes mainly from the China’s Shanghai Overseas Investment Corporation, and is the leading of a number of projects Chinese firms have initiated in the northern capital. What’s more, in 10 years time, experts forecast Chinese to become the world’s second most widespread language.
In response to several Scandinavian ventures in Russia, headed by retailer IKEA and auto-manufacturer Scania, the Swedish consulate ran the “Nordpraktik-New Managers for Russia” program, which ended last year. Since 1997, when the program began, backed by then president Boris Yeltsin, over 700 Russian managers traveled to Sweden to pick up on Scandinavian business know-how. 
There are more than 20 sizeable schools, which offer foreign language study in St Petersburg. Foremost centers include the British Council, Alliance Francaise and the Goethe Institute. There are one-year open courses at the Institute of Foreign Languages.
Experts name open courses, corporate studies, and trainings conducted in a foreign language, as well as study abroad, as the most effective learning methods. However, where costs are concerned, industry experts say corporate courses give better results than open courses, because their class structure and materials are more aligned to specific student needs.
Contrary to London’s popularity with Russian tourists, travel to study in the U.K. has been dropping in popularity, said Stanislav Smirnov, communications manager at the British Council. For cheaper options, students are increasingly picking Canada, New Zealand and Australia, although the new leader in affordable destinations for language learning is Spain, Saifutdinova said.

TITLE: Applying to Business School – A Question of Timing
AUTHOR: By Matt Symonds
PUBLISHER: Special to The St. Petersburg Times
TEXT: Applying to a Masters of Business Administration, you are likely to be up against some very high standard candidates. To boost your chances you need to know what to submit, prepare thoroughly, and apply at the right time. Here’s some tricks to help you along the way.

THE TIME TO APPLY
If you have done your research, attended the MBA Fairs, spoken to recruiters, and visited the campuses, you may now have a shortlist of schools. So when should you apply to business school?
Some schools use what they call a rolling admission process. This means, quite simply, that they are constantly receiving and reviewing dossiers throughout the academic year. They accept or reject the dossiers as they are reviewed (including a waiting list option for borderline applications), and provide a response within four to six weeks of reception.
The majority of schools use rounds of application, whereby they determine three rounds of deadlines, typically in November, January and March for a September class start. At this stage they collect together all the dossiers that are of interest to them and start to decide whether students are in, out, or placed on a waiting list.
These decisions are typically decided by an admissions committee, which can be made up of admissions officers, professors, and students.
But before the admissions committee gets to decide between the Swedish furniture designer, the Brazilian financier and the Russian engineer, applications are checked over to make sure that they are complete (GPA, test scores, essays, letters of recommendation etc.). If any elements of your file are missing, you can expect the file to sit on a desk and start to collect dust. Being organised at this stage is crucial, to make sure that both you and your recommenders have provided the school with all that they need to make a decision. 
So which deadline should you aim for? The one you are most likely to meet at your best potential — no rushed jobs! However, consider this. A top U.S. school may receive over 5,000 applications in a year for the 500 places in the program. For the first round deadline in mid-November all 500 places are typically available. The Admissions Committee then starts to offer places to the best candidates, and by the time you reach the second round deadline in January there may be 300 or so places left.
Continue to the third round deadline in March and you may be left with only 80 to 150 places still to be filled. Also bear in mind that many schools receive huge numbers of applications in the last 24 hours before the final deadline — at a time when there are only a handful of places left. Crunch the numbers and you realize the benefits of forward planning.

THE APPLICATION PROCESS
For students used to a selection process based on competitive entrance exams where the top percentage is guaranteed a place, the admissions process for MBAs presents a very different model.
Sure you have tests like the GMAT to evaluate basic quantitative and verbal skills, but the GMAT is not an exam that guarantees acceptance for those with the highest scores. Throughout the process, there may be common threads of leadership, or high-potential, but there is no magic formula for getting into a school. To get a better sense of the abilities and characteristics of a candidate, schools look at three areas.

ACADEMIC
Remember that the M in MBA is for Masters. Do you have the academic aptitude to get you through school? You need to provide:
• Undergraduate transcript with your GPA (Grade Point Average from your bachelors degree)
• GMAT score
• TOEFL score.

PROFESSIONAL
The top programs all require a minimum of two years professional experience. You need to provide:
• CV of your career to date
• Essays that provide examples of professional achievements
• Letters of recommendation
• Interviews to share goals and objectives.

PERSONAL
All those mountains you have climbed, pianos you have played, winning goals you have scored. You need to provide:
• Essays that provide examples of personal achievements
• Interviews to convey your values and sense of self.
 
However long the initial process of selecting schools, certain candidates spend months, sometimes even years, nurturing and refining their profile and subsequent application, whilst others complete the entire process in a frenzy of essay writing and test taking.
Whether you are applying to one school or several, you will need to devote time and energy to produce a polished marketing document that features you as the product. As you prepare your application to business school, pay particular attention to the elements of the dossier on which you can still have an impact.

Matt Symonds is the author of “Getting the MBA Admissions Edge.”