SOURCE: The St. Petersburg Times
DATE: Issue #1122 (88), Tuesday, November 15, 2005
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TITLE: Putin Shuffles Cabinet, Names New Deputy
AUTHOR: By Maria Danilova
PUBLISHER: The Associated Press
TEXT: MOSCOW — President Vladimir Putin named Defense Minister Sergei Ivanov as deputy prime minister on Monday and allowed him to retain his defense post, saying the move was aimed at bolstering efforts to improve Russia’s armed forces. 
Putin also named his chief of staff, Dmitry Medvedev, to become first deputy prime minister. Both Medvedev and Ivanov have been seen as potential candidates to run for president in 2008, when Putin is constitutionally prevented from seeking a third term, and speculation had been high recently that he would try to increase both men’s visibility. 
In remarks at a Cabinet meeting shown on Russian TV, Putin said Ivanov’s appointment followed a meeting last week in which “the participants expressed anxiety about the problems the Defense Ministry had been meeting in realizing its plans for future development ... these problems are connected with non-agreement of the activities of various ministries and departments.” 
The post-Soviet Russian military is hobbled by cash shortages and has suffered a series of embarrassing accidents, including the 2000 sinking of the nuclear submarine Kursk and last summer’s trapping of a mini-submarine off the Pacific Coast, in which Russia had to call on Britain and the United States to send underwater vehicles to help in the rescue. The status of Deputy Prime Minister Alexander Zhukov was not immediately clear. 
Zhukov last week was named head of an organizing committee to promote the Russian city of Sochi’s bid for the 2014 Olympics. 
In other changes, Putin named Sergei Sobyanin, governor of the oil-rich Tyumen region of Siberia, to become new chief of staff. 
Boris Makarenko of the Center for Political Technologies think-tank described Sobyanin as a “strong, tough figure” and a politician in tune with the Putin era. 
“The reshuffling was done in Putin’s trademark secrecy — nothing foreshadowed it,” said analyst Masha Lipman of the Carnegie Moscow Center. 
“One can suggest that this may be the pool of Putin’s possible successors — both Medvedev and Ivanov have been named as possible successors,” she said. “One can suggest that they may be tried out in these high posts, posts close to the prime minister’s, which in recent years has been the traditional way to presidency in Russia. One can suggest that they are being given a chance to prove themselves in these high jobs.” 
Putin also replaced two of his envoys to Russian regions. Sergei Kiriyenko, the envoy to the Volga region, will be replaced by former Bashkortostan prosecutor Alexander Konovalov, and Far East envoy Konstantin Pulikovsky is being replaced by Kamil Iskhakov, former head of the city administration in Kazan.

TITLE: Film Festival Controversy Remains At Fever Pitch
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The full concept of Golden Angel, a new international film festival aimed at becoming the world’s only event devoted entirely to European films, was presented on Monday, drawing fierce criticism from members of the city’s cultural elite.
The campaign against the new festival is being led by Hermitage director Mikhail Piotrovsky, who feels popular entertainment doesn’t belong on Palace Square — the planned location for the event — and that it would create security concerns.
The festival’s director Mark Rudinshtein began the presentation by noting that the project is being proposed to the city, and not forced on it. The festival is due to take place in July, 2006 and will rival international festivals in Berlin, Venice and Cannes in terms of the quality of films shown and celebrities attracted.
The festival will feature several temporary pavilions constructed on the Square, close to the General Staff Building, where films will be screened. 
Formally, the Hermitage has no authority over Palace Square, but events held there in the past are remembered well at the museum.
“During rock concerts held on the square, the museum’s alarm system was set off, and there were even paintings falling down,” said Vera Dementyeva, head of City Hall’s Committee for the Preservation of Cultural Monuments.
Rudinshtein said that Golden Angel will not be repeating this experience. “We have employed an experienced and highly professional international team,” he said. “We offer you a festival as a festivity. And everything from sound systems to fire-resistant materials will be expertly prepared.”
The festival’s president, prominent Russian filmmaker Andrei Konchalovsky, speaking by telephone at the press conference, said Golden Angel aims to occupy a unique niche which has miraculously remained vacant.
“European filmmakers don’t have much of an opportunity to see each other’s work without having to travel to various places,” Konchalovsky said. “We will give them a chance to travel to St. Petersburg to see the full variety of European talent.”
The festival is scheduled to be presented to the Council of Europe in Brussels on March 26, 2006.
Earlier this fall, Piotrovsky proposed that the festival be staged in the museum’s four internal courtyards, which are often used to host classical music concerts. 
The city’s fire department rejected this proposal, however, saying that it would involve locking thousands into the four courtyards with only one exit available from each of them, Rudinshtein said. 
Despite receiving the approval of Governor Valentina Matviyenko earlier this fall, the festival has its critics among the city’s cultural elite. An open letter protesting against the planned festival and signed by seven cultural figures, including writer Daniil Granin, filmmaker Alexander Sokurov and actor Kirill Lavrov was released on Monday. The authors ask the governor to reverse her decision.
“No commercial interests can justify the serious consequences,” reads the letter. “St. Petersburg’s reputation as an international cultural center will be damaged.”
The award-winning Russian filmmaker Alexei German, the festival’s artistic director, said the event is being launched with the goal of showcasing masterpieces of the European film industry and giving center stage to leading French and British films and up-and-coming talents from Eastern Europe.
“This city is inhabited by people who need to be shown high quality films to have something to compare with the trashy blockbusters they see on television,” German said.
Tourism industry professionals say the festival would help to draw more guests to the city.
Russia’s Tourism Industry Union (RST) has welcomed the plans for the new festival. “We badly need events of international resonance to attract more visitors,” said Sergei Korneyev, head of RST’s Northwestern branch. “Venice has a carnival, Athens hosted the last Olympics and Helsinki was home to the last World Cup in Athletics. We need to employ a similar strategy.”

TITLE: Student Killed in City Center Attack
AUTHOR: By Carl Schreck and Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Two brutal incidents during the last week have left one dead and two hospitalized in what some are seeing as continuations of the racial tensions that have plagued the city over the last two months.
Timur Kacharava, a student at the St. Petersburg State University and frequent participant in anti-fascist meetings, was murdered on Ligovsky Prospekt on Sunday night. A preliminary police investigation revealed that Kacharava and his friend Maxim Zagibai, who is currently in hospital with severe injuries to his head and chest, were attacked by a group of youngsters at about 18.30 outside a bookstore, Interfax reported.
“The prosecutor’s office is considering all possible versions, including a nationalist attack as both students were active pacifists and took part in virtually all the anti-fascist events in St. Petersburg,” read the statement of the city prosecutor’s office quoted by Interfax.
In another incident, a fight broke out between two Russian men and a group of African students early Friday morning, leaving one of the Russian men hospitalized, and investigators are trying to determine whether the incident was racially motivated or simply a drunken brawl.
The fight started at around 5 a.m. Friday in central St. Petersburg on the corner of Ulitsa Yegorova and 5-aya Krasnoarmeiskaya Ulitsa, after a group of students from Cameroon and Kenya left the Apollo nightclub, St. Petersburg City Prosecutor’s Office spokeswoman Yelena Ordynskaya said by telephone Friday. 
“They got into a confrontation with two St. Petersburg natives who came out of a different club, and after that, several more African students came out of the club to help,” Ordynskaya said.
Initial reports said the African students were carrying baseball bats but the prosecutor’s office later dismissed these allegations. “The students used some sticks they found nearby when the incident was sparked,” Ordynskaya said.
Police arrived on the scene and detained five of the students, while the two Russian men were hospitalized, Ordynskaya said. One of them was taken to hospital with a broken arm and has been in a stable condition since Friday, while the other was treated and released.
Prosecutors of the Admiralteisky district prosecutor’s office have classified the incident as hooliganism, though no one had been arrested or charged as of Friday, Ordynskaya said.
“We are examining all possible versions of these events,” she said.
Initial media reports Friday cited witnesses as saying the African students were wielding baseball bats, prompting comparisons to ongoing riots in the suburbs of Paris populated by immigrant communities. Ordynskaya, however, said that no baseball bats were discovered on the scene.
Reached by telephone Friday, Desire Deffo, a representative of the Cameroonian Consulate in St. Petersburg and deputy director of the “African Unity” organization, downplayed suggestions that the incident was racially motivated.
“I’ve talked to participants on both sides of the fight, and they said it was just a misunderstanding,” Deffo said.
The fight began as a verbal skirmish. As several African students were on their way home from the nightclub in the company of their Russian female friends, they passed the Russians drinking beer near a 24-hour shop, Deffo said. 
“One of the Russians asked one of the students where he was from and patted him on the shoulder, and the incident quickly grew into a fight,” Deffo said.
The prosecutor’s office will organize more questioning this week, and nobody has been taken into custody, Ordynskaya said.
Deffo said the police had been tactful and attentive in their treatment of everyone in the incident. 
The issue of immigrants and foreign students in Russia has been hotly debated in recent weeks.
Following the incident on Friday, the Moscow Helsinki Group issued a statement accusing the Russian authorities of failing to respond to displays of extremism and indulging nationalists.
“The country’s law enforcement agencies and courts are going to every length to protect nationalists,” Lyudmila Alexeyeva, the organization’s chairperson told reporters Friday. “The recent wave of ethnically-motivated attacks is a shame on this country.” 
On Nov. 4, the inaugural People’s Unity Day, 3,000 nationalists and neo-fascists marched through the center of Moscow carrying banners with anti-immigrant slogans. 
Moscow city prosecutors are currently investigating whether a television campaign advertisement for the City Duma elections by the nationalist Rodina party violates the law by inciting ethnic hatred. 
The advertisement shows Caucasus migrants throwing watermelon rinds on the ground and uses the slogan, “Let’s clear our city of garbage!”
St. Petersburg has been the scene of numerous racist attacks in recent years, and Igor Rimmer, a deputy in the St. Petersburg City Duma, on Friday blamed many of the attacks on “a lack of control” over the presence of foreign students in St. Petersburg and “inarticulate migration policies,” Regnum.ru reported.

TITLE: Civil Servants Described As New Social Class in Survey
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — The bureaucracy has emerged as a new political class with its own values and way of life, and bureaucrats themselves acknowledge that they put their own interests above the public good, according to a study presented by a group of sociologists on Thursday.
Moreover, bureaucrats have become less efficient and more corrupt during the rule of President Vladimir Putin, even though he vowed in this year’s state-of-the-nation address not to “hand the country over to ineffective, corrupt bureaucrats” who, in the words of the 1,500 average citizens and 300 low- and mid-ranking bureaucrats polled for the study, have degenerated into a “closed and arrogant caste.”
“In Russia, a bureaucrat is no longer just a civil servant. They make up a caste that lives for itself and not for the interests of the people and the state,” Mikhail Gorshkov, head of the Institute of Sociology of the Russian Academy of Sciences, said at a news conference. “This is the most tragic finding.”
The study revealed dramatic differences between how Russians view bureaucrats and how the bureaucrats view themselves.
Ordinary people considered bureaucrats indifferent, corrupt and incompetent, while bureaucrats saw themselves as professional, industrious and efficient.
“Such a negative assessment of bureaucrats by citizens does not come out of the blue. It is formed by personal experience,” said Gorshkov, who headed the study.
Respondents were divided over what they saw as the reasons behind inefficient bureaucracy: Ordinary people answered that civil servants had low ethical standards and do not expect to be punished for their actions, while bureaucrats blamed large workloads and low salaries.
The study poked holes into those perceptions, finding that bureaucrats’ salaries are three times higher than that of the average Russian and that none of the polled bureaucrats complained that their social status was low.
While perceptions differed in many areas, it was where they converged that worried the sociologists. Ordinary people and bureaucrats agreed that the primary goal of bureaucrats was to keep and increase personal wealth and power, even at the expense of the people.
Only 2 percent of ordinary people and 16 percent of bureaucrats said that bureaucrats were interested primarily in the prosperity of the country.
“The fact that bureaucrats said they knew they have their own interests that are separate from that of the state and the people tells us that they have emerged as a new political class — that is unfriendly to common citizens,” Gorshkov said.
A total of 76 percent of ordinary people and 40 percent of civil servants said they viewed bureaucrats as a closed caste united by common interests and a way of life. 
About 71 percent of ordinary people considered bureaucrats a hindrance to Russia’s development, rather than facilitators of it. Nearly 90 percent saw a negative connotation in the word “bureaucrat.”
Recipes for good bureaucracy diverged among the two groups: Ordinary people stressed public oversight over bureaucrats and said corrupt bureaucrats should be banished from civil service. 
Bureaucrats, however, gave priority to stricter hiring rules based upon education and work experience, and called for salary increases.
The study polled respondents in 58 cities and towns between July and September. The margin of error was less than 3 percentage points.

TITLE: Convict Sets Out Vision for 2020
AUTHOR: By Catherine Belton
PUBLISHER: Staff Writer
TEXT: MOSCOW — Mikhail Khodorkovsky attacked President Vladimir Putin’s regime in a withering missive from his east Siberian prison camp that said time was up for the “parasitic” policies of the current elite and, for the first time, presented what appeared to be his own manifesto for the presidency.
In his first article since he was sent to the remote Chita region near the Chinese border, Khodorkovsky called for Putin to step down “not a day before nor an hour later” than the legal end of his term in 2008. He called for a “new responsible elite” to run the country in place of the bureaucrats who he said currently sought office only for the opportunity to win assets. Without a major shift toward more paternalistic, left-wing economic policies, the country is heading toward collapse, he said.
“This parasitic approach no longer works,” he wrote in the article, which took up a full page in Kommersant on Friday. “The country is not capable of being competitive, and the strategic reserve of endurance and infrastructure built up from the Soviet era has run out.”
Attempts by the Kremlin to justify its authoritarian rule by encouraging extremists would lead to “sorry” consequences and instability, he said.
The photo that accompanied the article, showing Khodorkovsky dressed in a black prison uniform with his head shaved, bent over a wooden desk as he wrote in an exercise book, was a stark reminder of the former oil tycoon’s rapid fall from power. But the article, titled “Left Turn-2,” appeared to be a clear bid for a place in the political sun and his strongest personal challenge yet to Putin’s regime.
Picking up from his last newspaper article, in which he called a “left turn” the only way to avoid a major sociopolitical backlash, Khodorkovsky set out a 12-year economic plan that called for nearly $1 trillion in investments from the state and private sector to be plowed into improvements in infrastructure, education and science.
Under the subheading “Program 2020,” he called for the return of elections for regional governors and for the first time openly called for the creation of a parliamentary republic — a goal he was believed to be pursuing before his arrest in October 2003.
Some have seen the legal attack against Khodorkovsky as a campaign to crush his political ambitions, but the Kremlin has portrayed the fraud and tax evasion case as a just battle against a robber baron.
In contrast to the rebellious Decembrist officers whom Tsar Nicholas I sent into exile and political isolation in Chita in 1825, Khodorkovsky’s supporters hope he may yet be able to influence the country’s political discourse. 
“He might be far away near the uranium mines, but in this modern age it will be much harder to cut him off,” said Irina Khakamada, a liberal politician and former presidential candidate who backed Khodorkovsky’s abortive bid for a State Duma seat in September.
While Khodorkovsky’s calls for a large increase in state spending appeared populist, his political analysis was spot on, Khakamada said, adding that she agreed with those who thought his harsh prison sentence could enhance his political standing.
Underlining that he believed his managerial skills were superior to Putin’s, Khodorkovsky said talk of a “personnel crisis” in government needed debunking. He said the current system, which is based on unquestioning loyalty to the president, was the source of the crisis. “I have experience in building the strongest Russian corporation: Yukos,” he said. “And if this company grew from a condition of post-Soviet collapse to reach the level of a world giant with a capitalization of $40 billion, then this was mainly due to personnel policy.
“If we, like the Kremlin does today, relied on job seekers’ ability to look loyally into their boss’ eyes and carry his briefcase, then Yukos would not have existed for long,” he said.
“Drawing up the correct criteria for selecting top personnel is vital. ... The Kremlin chooses people according to a federal criterion of 100 percent loyalty and pliancy. A capable person cannot be 100 percent pliable — that is a fate reserved for those who are without talent and are motivated only by money.”
Painting a dire picture of the country’s infrastructure, he said the Kremlin’s policies had caused it to lose control over the North Caucasus, and said the military was in a state of collapse. He compared the situation in the Kremlin to a famous Brezhnev-era joke that told of apparatchiks shaking their leader’s windowless, rusty train car on the spot in an effort to convince him that it was moving.
While Putin has sought to avoid the inflationary effects of ramping up state spending, Khodorkovsky proposed using the state’s windfall from high oil prices to boost economic growth and living standards. He called for investments of $50 billion to rebuild the armed forces, and said $10 billion in financial incentives for families to have more children could raise the population to between 220 million and 230 million. 
He also proposed levying a windfall tax on businessmen who, like himself, won their enterprises in the controversial privatizations of the 1990s. Likening the tax to one imposed by British Prime Minister Tony Blair’s government, he said it would legitimize businesses’ holdings and calculated that it could raise $30 billion to $35 billion in three to four years.

TITLE: Atheist Goes to Court Over Words to National Anthem
AUTHOR: By Kevin O’Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW — An atheist activist is mounting a challenge in the Constitutional Court over the use of the word “God” in the national anthem, and he said Tuesday that he was hoping to draw attention to a blurring of the line between church and state.
Alexander Nikonov, the head of the Moscow Atheistic Society, has lodged a complaint in the court about the fourth line of the second verse of the national anthem — “The land of my birth protected by God” — for the reason that it contravenes his constitutional rights. 
Nikonov and his supporters said at a news conference Tuesday that the lawsuit aimed to highlight how the Russian Orthodox Church was becoming a state religion in contravention of the Constitution, which says that the state and religion should be separate.
Nikonov noted that an Orthodox church was being built in Interior Ministry facilities at the government’s expense and that the new Nov. 4 holiday, People’s Unity Day, falls on the same day as an Orthodox holiday.
“There’s a slavish feeling” among politicians and bureaucrats, said Mikhail Arutyunov, the president of the International Human Rights Assembly. “When they see [President Vladimir] Putin bowing before an icon, they believe there is no other way.”
To send the complaint to the Constitutional Court, Nikonov first had to be turned down by a local court. He did that by attempting to take Channel One television to a Moscow court for playing the national anthem — with “the bad word beginning with G,” as he called it — every morning at 6.
If the activists win, it will not be the first time that words have been removed from the anthem. The original anthem lyrics, written by Sergei Mikhalkov, the father of film director Nikita Mikhalkov, contained words of praise for Stalin that were excised from it in the 1950s.
Putin brought back the Soviet national anthem five years ago, ditching a wordless piece of music by the 19th-century composer Mikhail Glinka that had been chosen after the Soviet collapse. 
Putin’s version drastically revised the text of the Soviet-era version and added the word God.

TITLE: Prosecutors Probe Rodina Political Ad
AUTHOR: By Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — Moscow city prosecutors on Wednesday opened an investigation into a television campaign commercial by the nationalist Rodina party that is being criticized as inciting ethnic hatred.
The ad, which has run all week on TV Center television, begins with a shot of four dark-skinned men seated on a courtyard bench, munching on watermelon slices and tossing the rinds on the ground. Bright Caucasus music plays in the background. A young blond woman dressed in red walks by pushing a baby stroller, and a ground-level shot shows the stroller’s wheels rolling over three watermelon rinds. “There goes the neighborhood,” one man mutters as he watches the mother and her child pass.
The music abruptly turns menacing as the camera pans up from the feet of Rodina leader Dmitry Rogozin and Moscow City Duma Deputy Yury Popov, who look down at a rind and then at the men. “Get up and pick up after yourselves,” Rogozin says. Popov then leans over and asks one of the men slowly, “Do you understand Russian?”
The ad then cuts to a shot of the Rodina logo and the phrase “Let’s clear the city of garbage.” A voiceover says, “Let’s clean our city.”
The City Prosecutor’s Office opened its investigation at the request of the city elections committee. TV Center earlier this week asked the elections committee to examine the commercial to determine the legality of its content, TV Center spokeswoman Yekaterina Tarasova said.
The 30-second ad is rife with stereotypes of people from the Caucasus, most glaringly the watermelons. City fruit and vegetable stands are often run by migrants from the Caucasus and Central Asian countries, and giant cages of watermelons on street corners are some of the migrants’ most visible outposts during the summer months.
Vladimir Ryzhkov, an independent State Duma deputy, said Wednesday that he considered the ad illegal. “It incites racism and encourages hatred of Caucasus natives and migrants,” Ryzhkov said. “I’m confident that there are enough grounds to ban the ad and to prosecute the people behind it.”
State Duma First Deputy Speaker Lyubov Sliska, of United Russia, warned that Rogozin should “think about the country he lives in and the legal consequences” of the ad, Interfax reported.
The ad, part of Rodina’s campaign for the Dec. 4 City Duma elections, has been running twice daily since Saturday and will continue to run until the channel receives orders to do otherwise, Tarasova said. “It is part of a political campaign, and formally we have no right to refuse to show it,” she said.
Rogozin and Popov denied that the spot contained racist overtones, and Popov claimed that littering was the main issue. “We support a clean city,” Popov said in a statement on Rodina’s web site. “There is not one word about nationalities in the ad, not one call for ethnic hatred.”
Vladimir Pribylovsky, head of the Panorama think tank, called the ad a deft move by Rodina, especially with riots by immigrants continuing in France. “It’s already out there, so it doesn’t matter now whether they take it off the air,” he said. “It should give them a real boost in the City Duma elections and the subsequent State Duma elections.”

TITLE: Rich Turn to Experts Over Mental Health
AUTHOR: By Maria Danilova
PUBLISHER: The Associated Press
TEXT: MOSCOW — After 15 years of marriage Valentina’s world collapsed when her husband left her for a longtime mistress.
“Doctor, what am I to do?” the 41-year-old blonde asked her therapist, tears filling her eyes. “I don’t want any other man, I want my own!” 
The scene was not hidden behind closed doors. It was broadcast on a popular new television talk show that features a prominent psychologist giving real-life consultations to ordinary Russians — a reflection of the nation’s rising interest in psychotherapy. 
While Soviet academics studied psychology as a pure science, experts say therapy was virtually nonexistent in the Soviet Union, a country where citizens were not encouraged to think and act as individuals. Meanwhile, the state routinely used psychiatry as a means of persecuting dissidents, proclaiming them mad and locking them in grim institutions. 
Even the term “psychoanalysis” was officially forbidden until the early 1990s, being considered a “bourgeois” and dissident branch of psychology, said Olga Kvasova, a lecturer at the Moscow State University’s Psychology Faculty. 
The Soviet collapse and the ensuing economic and political reforms ushered in freedom of speech and self-expression and acquainted Russians with many aspects of Western culture — from the ubiquitous McDonald’s restaurants to the idea of seeing a therapist. 
“We are seeing an increase in demand [for psychological help] — it is not yet a boom, but the trend is that its popularity is definitely on the rise,” said Mikhail Labkovsky, a psychotherapist who hosts a talk show on Ekho Moskvy radio. 
Like other new trends here, therapy is almost exclusively the province of the rich. In Russia, where the average monthly salary equals some $300, most patients are well-off residents of big cities who can afford paying $20 to $100 per hour. 
For the less well-heeled there’s “We’ll Solve Everything” — a new talk show on the Domashny channel hosted by Dr. Andrei Kurpatov, a 31-year-old psychotherapist who has authored more than 20 books on psychological problems and now counsels patients in a three-bedroom apartment in central Moscow — under the bright gleam of television lights. 
His patient Valentina, whose last name was not revealed, kept hoping to win her husband back. After he heard her out, Kurpatov gave Valentina a plate with two cucumbers, two tomatoes and a knife and instructed her, “Please make me a salad yesterday.”
Valentina paused and then answered with a sigh: “No, doctor, yesterday’s salad should have been made yesterday.” She said she realized she needed to get over her failed marriage and begin a new life. Kurpatov says that one point of his show is simply to “show that psychotherapy exists, that one can come and get help.”
Even experts who criticize Kurpatov for sometimes lecturing his TV patients on what to think and how to act — something most psychologists frown upon — acknowledge that his show helps educate Russians about the benefits of psychotherapy. 
Tatyana Dmitriyeva, head of the country’s chief psychiatric hospital, the Serbsky Institute — which in Soviet times was infamous for diagnosing dissidents with schizophrenia — said the new interest in psychological help was good news for a country that experienced tremendous economic and social hardship in the 1990s, leaving many suffering from depression. 
While most people’s grievances are largely universal, experts say Russians are more vulnerable to some problems, such as alcoholism and the related depression. Russia has one of the highest suicide rates in the world. 
Kurpatov also said that many older Russians raised in Soviet society are reluctant to accept responsibility for their own destiny. 
“When Russians come to me they say, ‘Doc, I have problems, please find me a husband! How come you are not finding a husband for me?!’” Kurpatov said. 
“Here we are trying to convey the idea of personal space, of personal responsibility for one’s life and the decisions that you make.”

TITLE: Iran Rules Out Uranium Work in Russia
AUTHOR: By Ali Akbar Dareini
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — The head of Iran’s nuclear agency ruled out a compromise proposal that uranium enrichment for his country’s controversial nuclear program be carried out in Russia, saying Saturday that enrichment must be done in Iran.
European negotiators and the United States were reportedly willing to accept the arrangement as a compromise to allow Iran to move ahead with its nuclear program while ensuring it does not produce nuclear weapons. Enrichment can produce material either for a bomb or for nuclear reactor fuel. 
Vice President Gholamreza Aghazadeh, who heads the country’s nuclear agency, said after talks with Russia’s Security Council chief Igor Ivanov that Iran was open to other proposals, pointing to an earlier Iranian idea that other countries participate in the enrichment process on Iranian soil as a guarantee that the program is used only for peaceful purposes. 
“What is important for us is that we be entrusted to carry out enrichment in Iran. As for participation by other countries in Iran’s uranium enrichment program, we will consider it if there are any proposals,” he said. 
But, when asked if Tehran would agree to enrichment being carried out abroad, Aghazadeh said, “Iran’s nuclear fuel will be produced inside Iran.” 
Iranian and Russian officials refused to confirm whether Ivanov presented any compromise proposal to Tehran. 
Iranian state television quoted Ivanov as saying that his visit reflects Russia’s desire to help ease tensions between Iran and the Europeans over its nuclear program. 
Iran has already taken initial steps to pave the way for uranium enrichment inside Iran. 
On Wednesday, Aghazadeh said Iran will give the outside world a 35 percent share in its uranium enrichment program, allowing other countries to have a role in and monitor uranium enrichment at Iran’s facility in the central town of Natanz. Aghazadeh said at the time that giving other nations and foreign companies such a role was the “maximum concession” Tehran could offer. 
In Vienna on Friday, a diplomat accredited to the International Atomic Energy Agency confirmed that a position paper entitled “Elements of a Long-Term Solution” had been passed on to the Russians about a week ago. 
Under the reported compromise, Iran would be allowed to do the conversion work, but the enrichment would be done in Russia — an arrangement that theoretically would deny Iran the capacity to make fuel for nuclear weapons.
The IAEA on Nov. 24 plans to discuss whether to refer Iran to the UN Security Council for possible sanctions connected to its nuclear program. 
Last month, Iran allowed IAEA inspectors to revisit Parchin military site, a sprawling complex about 20 miles southeast of Tehran. U.S. officials say that site may be part of Iran’s nuclear arms research program. 
Iran’s cooperation led to IAEA chief Mohamed ElBaradei saying last week that his inspectors were making “good progress” in their effort to probe Iran’s nuclear intentions, remarks that ease the threat of UN sanctions.

TITLE: Nazarbayev Opponent Shot Dead In Almaty
AUTHOR: By Dmitry Solovyov
PUBLISHER: Reuters
TEXT: ALMATY, Kazakhstan — An outspoken critic of Kazakh President Nursultan Nazarbayev was found shot dead late on Saturday, a killing the opposition said clearly had political overtones in the run-up to next month’s presidential election. 
Zamanbek Nurkadilov, a 61-year-old former close friend of Nazarbayev, was found dead in his house on Saturday evening, with two gunshot wounds to his chest and one to his head, Nurkadilov family lawyer Serikkali Musin told reporters. 
Nurkadilov’s body was discovered by his wife in one of the two adjacent houses owned by his family in a quiet residential area in the Kazakh financial capital, Almaty. A revolver belonging to Nurkadilov was found near his body, Musin said. 
Nurkadilov, once a devoted loyalist who turned into a fiery critic of Nazarbayev last year, was a member of the opposition movement For A Just Kazakhstan, which pits its candidate Zharmakhan Tuyakbai against the incumbent in the Dec. 4 polls. 
“Knowing Nurkadilov’s political position and his forthright manner to express his views, we cannot exclude that his murder was politically motivated,” Gulzhan Yergaliyeva, an opposition leader, told reporters. 
Nazarbayev, calling Nurkadilov “a prominent public figure,” expressed his condolences to Nurkadilov’s family and ordered security bodies to conduct a thorough inquiry into the murder. 
Police declined to name possible motives behind the killing. 
“We are considering various motives,” Almaty police chief Moldiyar Orazaliyev told a news briefing. “Our conclusion will depend on the results of the autopsy to be carried out.” 
The vast compound belonging to the Nurkadilov family is monitored by 16 video cameras, police said, adding that no strangers had penetrated the area on Saturday. 
Lawyer Musin said the Nurkadilov family would insist on the inclusion of independent experts in the team of investigators. 
“Should someone present this as a suicide, it will be unprecedented in the world’s forensic expertise,” he said. 
Nurkadilov, an eccentric former Almaty mayor, raised many eyebrows last spring when he suddenly hit out at his old friend Nazarbayev, accusing him of corruption and attempts to establish a hereditary monarchy to rule the oil-rich nation for decades. 
The flamboyant ex-loyalist told Nazarbayev at the time that if he did not resign he could face the fate of Romanian dictator Nicolae Ceausescu who was executed after a popular uprising in 1989. 
Nurkadilov’s death comes at an awkward time for Nazarbayev. 
The 65-year-old veteran leader, who has run the Central Asian nation since 1989 and is widely expected to win a new seven-year term, has given assurances that the upcoming election will set an example of fair play and democratic standards. 
Kazakhstan aspires to chair the Organization for Security and Cooperation in Europe in 2009, but the country has never held an election judged free or fair by Western monitors. 
The OSCE said in an interim report that the run-up to the election had been marred by strong pressure on opposition media.

TITLE: Hillary Clinton of Azerbaijan Gets Elected
AUTHOR: By Tim Wall
PUBLISHER: Staff Writer
TEXT: BAKU, Azerbaijan — Mehriban Aliyeva has a new hat to wear this week, and it’s not from Paris.
Aliyeva — variously described as Azerbaijan’s fashion icon, tireless charity organizer and savvy behind-the-scenes adviser to her husband, President Ilham Aliyev — is about to take her place in the new parliament after officially winning 92 percent of the vote in her hometown district, near Baku.
It is not yet clear what role she will play in the parliament, which was elected in a controversial vote that Western observers said was tainted with widespread irregularities and that the opposition has vowed to overturn.
But it will give her a prominence that few first ladies can boast, and it has invited comparisons to Hillary Clinton, Raisa Gorbacheva and Eva Peron. 
Aliyeva, who dresses in the latest fashions from Europe, is also fast becoming an important player in the Byzantine world of Azeri politics, where powerful pro-government clans compete for a slice of the country’s burgeoning oil wealth. Some already see Aliyeva, 41 — an eye doctor by profession — as carving out a role for herself independent of her husband, who has strived to shake off a playboy image since coming to power in 2003.
Some talk of Aliyeva being a future parliament speaker or heading the country’s delegation to the Council of Europe. A few even say she could eventually take over as president to continue the Aliyev family dynasty.
With the highest official vote in all 125 parliamentary seats, her popularity now is sky-high among government supporters, who see in her someone unsullied by the image of corruption that taints many politicians and officials.
One of Aliyeva’s unabashed fans is Sergei Markov, the Kremlin-connected spin doctor who was in Baku for Sunday’s vote. “People love her very much,” Markov said Thursday. “She is extremely beautiful, very smart, and she’s in the strange position of having only a positive image. No one has anything bad to say about her — even the opposition avoids criticizing her.
“She could be like Argentina’s Eva Peron or Hillary Clinton. But in contrast to Hillary Clinton, she is happy in her private life.” 
Clinton was elected senator for New York after her husband, Bill Clinton, left the White House.
Markov said he agreed with recent media speculation that Aliyeva had been instrumental in advising her husband to fire his health minister, Ali Insanov, and economic development minister, Farhad Aliyev, who is no relation to the president. Both were fired shortly before the elections and accused of plotting a coup.
Markov said both ministers were “very corrupt.” 
Aliyeva “played a very positive role in advising her husband and in helping him to make some important recent decisions, including this one,” he said.
Speculation in the Azeri press that Aliyeva would soon be appointed parliament speaker was dismissed by both government and opposition supporters on Thursday. But both sides agreed that she could take a different high-profile role, perhaps as head of the country’s parliamentary delegation to the Council of Europe.
Anar Mammadkhanov, a senior New Azerbaijan Party deputy and a close ally of the president, said the talk about her taking the speaker’s job was “not serious.” 
Representing Azerbaijan in Strasbourg, however, was possible, he said. “She is beautiful, she is clever. If it’s possible for Hillary Clinton, why not for her?”
Asim Mollazade, a moderate opposition deputy, said the election of public figures like Aliyeva was welcome. “She doesn’t have a corrupt image like some bureaucrats. We need new people in parliament, because now it has the reputation of being like Jurassic Park,” Mollazade said.
A large part of Aliyeva’s image is her charity work as president of the Heidar Aliyev Foundation, which was set up last year in honor of the current president’s father, the country’s longtime leader who died in 2003. She is also Azerbaijan’s goodwill ambassador to UNESCO, the educational, scientific and cultural arm of the United Nations.
Pro-government television channels frequently show Aliyeva dishing out the Heidar Aliyev Foundation’s largesse, opening schools for refugee children and distributing badly needed equipment to orphanages.
The work has given Aliyeva “more of a role than simply that of the president’s wife,” Markov said. 
It has given her influence, which she used to her advantage in the election campaign. Aliyeva stepped up her charitable activities, particularly in her hometown of Shuvalan and the surrounding towns and villages, where stylish campaign posters showed her silhouette with a single word, “Mehriban.”
The opposition, naturally, does not see her influence as all positive. Murad Gasanli, an adviser to opposition leader Ali Kerimli, said Aliyeva was mixing her charitable work with pork-barrel politicking, and accused her of using the foundation as a “tool of the Aliyev regime.”
“Her election campaign didn’t start in September, it began a year ago with the foundation investing money in that district,” Gasanli said. “Compared with other districts, the amount of activity there is striking.”
Gasanli also raised questions about where the foundation got its money and why it was doing “a job government should be doing.”
“She may display an interest in helping orphaned children, but this is not as important for her as her expensive shopping trips to Paris and London,” Gasanli said. “Her interest in orphanages only appeared a couple of years ago.”
Questions to the foundation’s office in Baku about its work and budget were referred to its press secretary on Thursday. An employee who answered the telephone at the office said the press secretary was unavailable for comment.
The foundation’s web site contains press releases about Aliyeva’s activities, as well as interviews and speeches she has given. No information is posted about the foundation’s sources of funding. The employee said she did not know of any publicly available financial report. 
In Aliyeva’s hometown of Shuvalan, an increasingly middle-class suburb 30 kilometers northeast of Baku that has benefited from the country’s recent oil boom, family connections may also have helped in the vote.
Aliyeva’s uncle is Azerbaijan’s ambassador to the United States, and her father is the head of the national aviation academy 10 kilometers down the road. 
Local voters on Sunday credited her with improving gas and water supplies, but they were unsure whether the funding had come from the government or from Aliyeva’s foundation.
In Zira, a less-prosperous village in the same election district, Aliyeva’s charity activities appeared to have swung a lot of votes her way. In the week before election day, she paid for a meal at the village mosque to celebrate the end of Ramadan, and promised to get the village’s gas supplies restored.
Mammadkhanov, the New Azerbaijan Party deputy, said the 92 percent win recorded by the Central Elections Commission was “absolutely realistic.”
“She is well-known in the district for her charitable activities. Actually, she doesn’t want to have this high figure, a simple majority would have been enough,” he said.
He shrugged off suggestions that bringing another member of the Aliyev family into the country’s political elite would fuel speculation of nepotism and corruption.
“The parliament does not decide government policy, so there’s no question of corruption,” he said.
Other senior officials also had close relatives who ran in the elections.
Ilham Aliyev’s uncle Jalal ran for re-election, while other candidates included the father of the state customs chief, the son of a deputy prime minister, the brother of the country’s top Muslim cleric and the brother of Baku’s police chief. 
Aliyeva’s influence on the future of the Aliyev dynasty may not just be related to her parliamentary career. One of her daughters is engaged to be married to a son of Heidar Babayev, the new economic development minister whose predecessor was jailed in last month’s purge.
Aliyeva’s 8-year-old son, Heidar, named for his grandfather, would be too young to run for the presidency at the end of a second Aliyev term in 2013.
In a country that believes in family and tradition above political labels and parties, some in the opposition said in private that Aliyeva could be well placed to step in and become the country’s first woman president.

TITLE: ‘Dom 2’ Contestant Given 4 Years for Fraud
AUTHOR: By Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — Police gave up chasing a fraudster after receiving information that he had fled to Belarus. But then he surfaced on national television as a contestant on the scandalous reality show “Dom-2: Build Your Love.”
Alexei Adeyev was arrested on the set of “Dom-2” in Moscow after a Smolensk woman he scammed out of almost $2,000 saw him on television.
A Smolensk court convicted Adeyev, 26, of fraud on Thursday and sentenced him to four years in a maximum-security prison.
Adeyev, who worked for a Smolensk real estate company, disappeared on Oct. 25, 2004, after accepting $1,900 from the Smolensk woman as a 10-percent down payment on an apartment, a spokeswoman for the Smolensk regional prosecutor’s office said Tuesday.
“We put a federal warrant out for his arrest after the woman reported him, but we assumed that he had fled to Belarus,” Dmitry Grashenko, deputy prosecutor of the Zadneprovsky district prosecutor’s office in Smolensk, said by telephone.
Adeyev, however, never made it that far, and he reappeared some six months later on television screens as a contestant on “Dom-2,” a reality show broadcast on TNT that follows a group of young single women and men as they build a house. Participants vote one person off the show every week. 
The participants’ goal is to fall in love, and the finished house will go to a couple picked by viewers at the end of the season.
But it took only one viewer to seal Adeyev’s fate: the Smolensk woman, Russian media reported. She saw him on the show and alerted the police.
Grashenko could not confirm who had called the police, but he said that police showed up on the set on July 20, two weeks into the season, and arrested Adeyev.
“It was a harebrained idea by him,” Grashenko said of Adeyev’s decision to join the show.
Adeyev could have received a lighter sentence on the fraud charge, but Judge Anatoly Khlebnikov of the Zadneprovsky District Court took into account two previous convictions for reckless driving and theft, Grashenko said.
“Dom-2” producer Alexei Mikhailovsky said all of the reality show’s participants underwent background checks, but that it was almost impossible to check for criminal records.
Dom-2 has “real people with real fates,” Mikhailovsky said in a statement sent by e-mail on Tuesday.
Adeyev’s lawyer, Alexander Kukharev, said he could not immediately comment on his client’s conviction. A follow-up telephone call went unanswered.

TITLE: U.S. Criticizes Russian Policy
PUBLISHER: The Associated Press
TEXT: WASHINGTON — The U.S. State Department criticized Russia and Belarus for having laws or policies that discriminate against minority religions but praised Georgia for what it described as significant improvement in the promotion of religious freedom.
The comments were made in the State Department’s annual report to Congress on religious freedom, which was released last week.
The report said some federal and local authorities restricted the rights of religious minorities in Russia and there were indications that security forces treated the leaders of some minority groups as security threats.
In Belarus, it said, U.S. Embassy officials raised with government officials and ministers issues such as a 2002 law that restricts religions, the continued sale of intolerant literature at locations affiliated with the government and Russian Orthodox Church, and the refusal to register certain religious communities. 
It said stores sold anti-Semitic and xenophobic literature.

TITLE: St. Petersburg Missing Out On Car Transit Trade
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Fierce competition is arising between two Finnish ports over the lucrative business of transporting cars into Russia. The port of Kotka is set to take on the dominant transit point at Hanko by opening a 20 hectare site for cars in transit, Helsingin Sanomat reported last week.
With investment of about 5 million euros, the area will double in size by the end of 2006 allowing it to handle 150,000 cars annually - about one third of car imports into Russia.
“Prospects for the development of the car transit business are mind-boggling. Just a few years ago we were thinking of possibly having to shut down the whole harbor. Then representatives of international car dealerships from around the world wanted to come and meet us,” Helsingin Sanomat cited Kimmo Naski, managing director of the Port of Kotka, as saying.
According to the news agency, each vehicle passing through Finland into Russia earns Finland about 100 euros ($120). Transit into Russia is expected to increase by 70% this year with over 300,000 cars being delivered, while car imports in general into Russia are set to double in the coming five years.
Car transit more than doubled in the second quarter compared to same period of 2004, up to 1.2 billion euros, while total transit export increased by only 16 percent up to 4.2 billion euros, the Finnish customs service  said in a statement.
The transit business has already attracted companies from other countries. On April 11 this year Japanese operator K-Line launched a ferry service between St. Petersburg, Finland and Germany to transport cars.
Russia could also benefit from the growing transit business and already plans to upgrade harbor facilities in Ust-Luga and Lomonosov ports south of St. Petersburg for the use of incoming car transporters.
According to a St. Petersburg-based driver involved in transporting cars from Finland to Russia since the strength of the euro increased against the dollar the United States has started to play a more significant role in car transit to Russia, and Finland has the facilities to take advantage of it.
Alexei Tiskin, commercial director of Petrolesport transport company, said that “at the moment car transit goes mainly through Finland because we lack special facilities to handle cars in Russian ports. The prime cost of transporting cars by land is huge and it is included in the final price of a car. As soon as special facilities appear, local companies will make significant gains,” he said.
Part of the reason that car transit into Russia is so attractive is because drivers can often intentionally undervalue cars to minimize customs fees.
A customs declaration might show the price as two to five times lower than the real cost of the car, German Gref, minister for Economic Development and Trade, said Sunday on the NTV TV channel. 
Gref said that 20 percent of the imported cars have such irregular documents but that by 2009 new customs regulations would be introduced, which should insure the correct declaration of product price and tax fees.
To protect the country from illegal imports, a committee of the state customs service plans to compile a list of imported goods and fixed price niches for each product category.
However, experts think that it “will only cause a new surge of legal claims against the tax authorities. People would claim that they bought imported goods with discounts and argue for lower prices,” said Konstantin Chizhikov, lawyer at OSV consulting group.
If importers fully adhere to customs legislation, prices of imported products increases three to four times, he said.
As for imported cars, customs fees are levied proportionally to the engine power. Schemes involving the import of stolen or damaged and repaired cars are often exercised by importers from Belarus, Latvia, Lithuania and Estonia, Chizhikov said.
While trying to prevent such manoeuverving, the Russian government raises barriers to legal import.
“In recent years customs fees for imported cars and other vehicles have been steadily and regularly increasing as the Russian government tries to protect national producers,” Chizhikov said.

TITLE: Vanity Boutique To Cater For Rich
AUTHOR: By Yevgenya Ivanova
PUBLISHER: Staff Writer
TEXT: Vanity, a St. Petersburg operator of boutiques, is due to open the city’s first luxury department store Thursday in an attempt to serve the growing number of locals who desire and can afford designer clothing.
In an effort to strengthen its market position Vanity has launched what Nikolai Chernov, project coordinator, called “Russia’s first luxury multi-brand boutique”, in an interview Monday. The 4,500 square meters of floor space will be packed with more than 100 designer labels. 
“A sufficient number of our competitors made their appearance on the St. Petersburg market lately and are now at the stage of full-scale development. We don’t want to share our niche with them,” said Chernov.
“There are people who prefer to do their shopping [for clothes] in Europe or Moscow, but they don’t shop in St. Petersburg on principal because of a lack of choice. Some of them we would like to see in our store,” he continued.
Market analysts were in agreement that in St. Petersburg the luxury goods market lags behind that of Moscow, but said a customer base is already sufficiently important here for this market to be developed.
“The market capacity of elite shopping should not be understated. Earnings of St. Petersburg residents are high enough to drive demand for luxury goods,” Oleg Voytsekhovsky, the managing director of the Russian Council of Shopping Centers said in an emailed statement Monday.
According to Maria Smorchkova, general director of the Moscow-based Association of Enterprises of Fashion Industry, although the rich are not always in view, they remain very much present.
“It may seem that there’s no rich people in St. Petersburg, but actually there are a great number of people in the city who can afford premium class goods,” she said in a telephone interview. In support of this, Mikhail Podushko, the strategic development director at Comcon market research center, whose company performed research for the new Vanity project, mentioned that as many as 3 percent of St. Petersburg’s population (around 150,000 people) can afford to buy luxury goods.
The new store is aimed at redressing this lack of premium class boutiques on a large scale. Marina Skulskaya, a fashion historian and the editor-in chief of St. Petersburg fashion magazine First said that the city only has “discreet pockets” of such stores .
“By all means, this segment exists in St. Petersburg but at present the niche is absolutely unfilled, ” said Skulskaya. 
For such people the choice and variety of merchandise will be crucial.
 “I know many people who are forced to go abroad to shop and for the majority the reason is a lack of variety in the local market, even within the brands and collections represented here,” said Skulskaya.

TITLE: Harsh Realities Of Migrant Work Force
AUTHOR: By Guy Faulconbridge
PUBLISHER: Reuters
TEXT: Fuad, an illegal migrant from Azerbaijan, is thinking of going home after five years’ work as a loader and brick-carrier in Moscow’s booming shadow economy. 
He tells of forced labor, bribes paid to policemen and beatings while in custody. His last employer, a Moscow warehouse, simply refused to pay him the 4,000 rubles ($140) he was owed for a month’s work as a loader. 
“What can you do? The warehouse guards had guns, and I didn’t even have the right documents. If I had called the police, they would have arrested me,” the 26-year-old said. 
“Here you are nothing, you don’t have any rights, you are like a slave,” he said in Russian with a strong Azeri accent. 
Millions of people have flocked to Moscow and other affluent Russian cities since the fall of the Soviet Union, in search of work and cash to help support their families back home. They come from all over Russia and former Soviet territories, where incomes are far below those of Moscow. 
Many face a harsh reception as second-class citizens and grim working conditions in the shadow of Moscow’s glitz — but it is estimated that they manage to funnel $10 billion per year back home to their dependents. 
Just 10 percent of Russia’s 5 million to 7 million migrant workers are in the country legally, experts say. Off the record, officials put the total at nearer 10 million. 
President Vladimir Putin has welcomed the extra muscle that migrant workers bring to the economy, easing the effects of Russia’s demographic decline that economists fear could stunt growth. 
The total population fell by 694,000 last year and by 2050 it may drop by one-third according to official forecasts — a reality that will enhance the value of the migrant work force. 
However, none of this has coalesced into coherent policy. 
“There are two ways to cut population decline: cutting the death rate and encouraging migration,” said a government official who did not wish to be identified. “But everything is mixed up with migration at the moment. It all seems to be done backward, with no organization.” 
Officials concede policy is confused. Highly skilled workers are being discouraged. Many simply sidestep the expensive and time-consuming bureaucracy to secure legal status, thereby joining the millions of illegal migrants, who do not pay taxes and are prey to a whole underworld of threats. 
Migrant workers routinely have to work without wages and are faced with violence from employers, according to a survey by Yelena Tyuryukanova, a researcher at the Institute for Socio-Economic Population Studies in Moscow. 
“We found that about 20 to 30 percent of migrants are exploited with forms that equate to slavery,” she said. “In Moscow, it is often controlled by organized criminal bands, as there is big money to be had here.” 
Illegal workers said they often lived right on the building sites where they worked, without heat or running water. Some lived out of their cars. 
The owner of a Moscow building company said he had to allow his workers to work for officials for free to prevent raids by the authorities. 
Criminal groups thrive on illegal migration, offering a range of services from false registration to jobs, often with the help of corrupt officials, Tyuryukanova said. 
“They take their passports and make them work for free, just giving them food — if that is what you can call it,” said Zafar, a Kyrgyz foreman working illegally to build plush country homes outside Moscow that sell for about $500,000. 
“You can’t complain to anyone. There is nowhere to go,” he said, adding that workers earned 50 rubles ($1.75) an hour. 
Police harassment is common, said Anatoly, a Belarussian working illegally on a building project outside Moscow. 
“If the cops stop you, they put you in the cage for a bit and you have to give them money to get out,” he said. Police in Belarus, he added, often waited at the Minsk railway station for workers returning from Moscow to extort some of their earnings from them. 
In Soviet times, immigration was on a much smaller scale than today and usually going the other way, as Russians were encouraged to settle in other Soviet republics. 
With the opening of Russia’s borders, migrant workers have been drawn from all over the former Soviet Union, and people with roots far from the Slavic heartland have given whole areas of Moscow and its economy a distinctive ethnic twist. 
Migrants from Azerbaijan, for example, have taken over many of the fruit and vegetable markets. Certain ethnic groups often do certain jobs: Workers from Belarus and Ukraine tend to work on building sites, while Uzbeks and Tajiks do the toughest, lowest-paid jobs. 
Migrants use an informal payment-routing system — big enough to show up in Russia’s balance of payments — to send about $10 billion per year in remittances back to wives and parents. 
The World Bank said in a report that migrant labor was essential for Russia’s economic development, and it estimated the country would need to attract 1 million immigrants a year to compensate for the decline of the working population.

TITLE: Ministry Signals Pipeline Route Shift To Transneft
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: The Natural Resources Ministry on  Friday signaled it is considering Transneft’s proposed route for its Far East pipeline, possibly marking a change to its stance on the controversial route, which could threaten Lake Baikal.
“Transneft has held a number of meetings with us, during which it displayed the technology for preventing oil spills into Lake Baikal. Overall [the technology] satisfied us,” a ministry source was quoted by Interfax as saying.
State-owned pipeline monopoly Transneft says its proposed route for the pipeline, which runs from Eastern Siberia to the Pacific coast of the Russian Far East, is the cheapest option. The project is expected to cost between $11 billion and $17 billion.
The route, however, poses a significant environmental threat, running much too close to Lake Baikal, the world’s largest freshwater reservoir, environmentalists say.
The pipeline is to carry oil from largely untapped East-Siberian oil fields to a yet-to-be-selected port in the Far East for onward shipping to foreign buyers.
The apparent shift at the ministry comes just weeks after President Vladimir Putin asked Prime Minister Mikhail Fradkov to speed up work on the pipeline construction, according to media reports. 
In July, Putin had also slammed ecologists for allegedly putting a brake on the country’s economic development by raising too many objections to important infrastructure projects, including the construction of pipelines. 
But until now, environmentalists appeared to be making some headway at the ministry. 
As recently as in June, ministry officials seemed to be siding with environmentalists condemning Transneft’s idea of cutting the route short by coming close to Baikal. 
But the latest remarks indicate that the balance could be shifting in favor of Transneft.
The route in question, which has not received any formal approvals, comes as close as less than a kilometer from the shore of Lake Baikal.
According to environmental groups including WWF Russia,   Greenpeace and International Fund for Animal Welfare, an accident on this particular stretch could mean that up to 4,000 tons of crude oil could be spilled into Baikal within 20 minutes of a pipe’s rupturing. 
Under a previous government plan back in 2004, the pipeline was to make a detour around Baikal leaving most of its basin out of danger. This route was tentatively recommended by the government, but Transneft started a feasibility study on the more direct route which has as yet no formal backing from the government.
Transneft, which is the main contractor for the project, maintains however that it can spare Baikal from any ecological disasters even if it comes near the lake and insists that the shorter route is better and more efficient.
The final decision on the route is only to be made when a state ecological assessment is completed. This stage of the project is to begin some time in December and could continue for a few months. 
The government is yet to make a decision on which particular bay in the Far East will be the pipeline’s final destination. Environmentalists fear that the government and Transneft could choose Perevoznaya Bay, an untouched shallow bay located close to a number of unique and protected natural land and sea habitats. 
 
(Bloomberg) — Russia’s Natural Resources Ministry will allow Transneft’s planned oil link to haul oil destined for Asia near Lake Baikal, a Unesco world heritage site, after the company agreed to implement additional safety measures.
“We succeeded in resolving the necessary tasks and removing the concerns of the majority of specialists that arose after the announcement of the first plan to lay the pipe through Baikal’s watershed,” the ministry said today in an e-mailed statement.

TITLE: Developers “Inevitably Penalised” By New Law
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Russian developers are willing to think of anything to circumvent new laws concerning the regulation of partake investment, a widespread form of financing residential construction where private individuals buy flats in buildings  yet to be constructed. A number of fraud cases have forced parliament to introduce the law regulating deals between developers and investors.
Despite having been in force since Jan. 1, the law has not yet been adhered to by any developer, because it causes effects quite opposite to those intended, experts say.
“The law was adopted in an unjustifiably short space of time. Key articles were not worked out and raised lots of questions,” said Vasily Selivanov, CEO of Peterburgskaya Nedvizhimost construction company.
He listed some of the negative effects of the law. New criteria for developer status prevents non-profit organizations from registering land plots for construction. New contract registration requirements are complicated and slow down the circulation of documents within companies.
Developers are unable to run large projects requiring co-investment because of the limited ways in which this may be done. New rules for payment and contract cancellation hamper financing and prolong construction time, Selivanov said.
“Faced with attaining a large number of authorizations, developers are forced to invest their own money into projects or take loans, which in itself would not be a problem if it wasn’t for the unequal position developers and investors are put into,” said Vitaly Votolevsky, CEO of Peterburgstroi Skanska.
“If in a 100-flat building 70 buyers have signed agreements and paid an initial fee, and then 35 of them refuse to pay the next installment, which is very likely, developers are unable to break agreements in a short period of time. Court disputes are also time consuming.”
Under-financing puts project and developer liabilities at risk while high penalties for the developer trigger cases of fraud. 
“Why would a person invest in a mutual fund to earn 15 percent profit, if he can invest in construction, break the agreement and wring out of a construction company 30 to 60 percent profit?” Votolevsky said.
Among the regulations which cause “unavoidable penalties,” is the obligation to hand over flats to the buyers within two months after a state commission while the building might only get electricity after six months or even up to two years, Votolevsky said.
Combined with VAT such penalties are unsupportable, and firms will turn to the 10 to 12 percent margins of profit in mass-market construction, he said.
Natalia Diatlova, head of real estate practice at DLA Piper in St. Petersburg agreed. “Developers have become more vulnerable and try to avoid partake investment agreements,” she said.
Besides the need for numerous authorizations, the law required the declaration of the total of a developer’s own assets and defined a mechanism of estimating his solvency.
“The purpose of these new requirements is to protect the rights of individual investors — so that in the case of a developer going bankrupt there is a legal basis for the construction company to complete the project using those assets,” Diatlova said.
Other financial sanctions stipulate that “if a developer does not meet the completion date for a project or changes project documents, an investor can break the contract unilaterally and the developer will have to compensate investors’ losses for each day of the delay,” Diatlova said.
Construction projects that have already begun remain under the former regulations. As partake investment into construction will cease to exist in its present form, “developers will use other — mostly fee-taking  — sources of financing, covering higher expenses by higher real estate prices,” Selivanov said.
In general this would involve bank loans, although “banks still consider development a risky business and demand a corresponding collateral,” he said.
However, according to the new law, banks could levy charges only upon secondary collateral while they become responsible to investors for the project. “Banks do not have a great desire to lend money to such business ventures – profitability is too low, the risks too high,” Votolevsky said.
Issuing corporate bonds could become the most reasonable solution for developers, Selivanov said. 
Eduard Tiktinsky, CEO of RBI construction holding, said that he is investigating the practice of Scandinavian developers. Some of them do not start construction before receiving 30 percent of prior applications from buyers.
In Europe schemes similar to partake investment are called different things but the practice exists, Votolevsky said. “Developers often sell flats when completing the project or before starting it. If more than 5 to 10 percent of flats in the building stay unsold after construction it means that the project is unsuccessful or the market is slowing down,” he said.
Votolevsly said in some countries like France, down payment is limited to two percent but the general principle is the same. “Further advance payments follow the construction schedule. After completing the project a developer receives the remaining five to 10 percent of the total cost,” he said.
In Russia the new regulations mean that “companies are convulsively searching for loopholes, inventing surrogate schemes to bypass the law,” Selivanov said.
He named pre-purchase agreements, bills of exchange, construction cooperatives and “residential certificates” as ways of disguising partake investment.
“Each company will find ways specifically suited to its purposes. As a result we will have a chaotic array of schemes that just about work instead of a transparent construction business,” Selivanov said.
“The problem is not the law, but the monopolization of the construction business because of state ownership of the land,” Diatlova said.

TITLE: Cyber CafÎs Look To Tourists
AUTHOR: Andrei Musatov, Gleb Krampyets
PUBLISHER: Vedomosti
TEXT: St. Petersburg’s cyber cafÎs have not derived tangible profits from the increasing popularity of the internet. On the contrary, their clientele is shrinking – their main customers now being students and tourists. Experts affirm that a rise in home computing is to blame. 
Vladimir Pleshakov, general director of the chain of internet centers Cafemax, admits that the growth of home internet use has had a serious influence on the public internet business. 
“Some internet centers, especially small ones, have had to close down,” he said.
An analyst from IKS consulting, Tatyana Tolmacheva, said that internet cafÎs is a niche business. According to her the range of customers that such establishments cater for is limited — it is either young people who come to play multi-player online games, or else people who don’t have computers or access to the internet.
“Even this customer base is decreasing,” Tolmacheva said. “The number of home computers continues to grow and with the development of broadband access, one will be able to play online games without leaving home.”
500,000 personal computers are sold in St. Petersburg annually, said Anatoliy Grigoriyev, president of Alfa which runs the computer retail chain “320-80-80.”  In the last two to three years sales of desktop computers have increased by 10 to 15 percent per annum, and laptops by 60 percent a year.
“Large, centrally located internet cafes only survive because of foreign customers, tourists or other visitors who, with a cup of coffee, can check their mail, and send several messages themselves,” said the administrator of one such establishment on Nevski Prospect. 
According to him a location on one of the city’s central streets is an indispensable condition for the profitability of such places. 
“The owners of internet cafes have to look for premises near to the city’s busiest streets, but they can’t afford prime location,” said Maria Tinika, general director of Stanley Estate. The most that those involved in the business can afford in terms of rental is $40 per square meter per month. But at these prices places available for commercial retail are likely to be badly located, Tinika said.
Outlets situated outside of the historic center tend to work as computer clubs where the bulk of customers are game-playing teenagers and where the internet is likely to become an additional service, the administrator of the internet cafÎ added. 
Market participants note that the profitability of internet-cafÎs is supported to a large extent thanks to additional services. 
“IT services bring 70 percent of returns, that is, apart from the internet, computer games, copying and printing and so forth, with the remaining 30 per cent coming from public catering,” Pleshakov says.
Andrei Kusmin, director of Zebra Telecom SPB, which specialises in IP-telephony, opened an internet cafÎ at Nevski 85 in March 2004. He said that according to preliminary data, the center’s turnover will be over $200,000 — of this sum half is made up of proceeds from its constituent cafÎ.

TITLE: New Law Looks To Introduce “Caller Pays” Principle
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: From next spring all mobile phone users in Russia could get incoming calls free of charge. That is the implication of amendments to the law regulating communication services approved by the State Duma on Nov. 2. Companies remain tight-lipped about the change, however, which has only passed through its first reading. 
So far mobile operators have introduced fees at will. As a rule, subscribers pay for both incoming and outgoing calls while clients of major land-line telephone operators who subscribe for a minimal monthly fee receive incoming and make outgoing local calls free of charge.
Some mobile operators introduced free incoming calls from local mobile phones but this did not imply transactions between mobile operators and was considered a sort of discount.
Most developed countries exercise the Calling Party Pays principle. 
“However, amendments to the law as they are formulated now should not be adopted, said Konstantin Chizhikov, lawyer at OSV consulting group.
From the legal point of view the proposed amendments contain a number of inaccuracies that could be interpreted in several ways, Chizhikov said.
The article, which will be amended, deals with “local calls” while the new paragraph stipulates that a “telephone connection caused by another subscriber’s call is not to be paid, with the exception of connections operated by the callers at the expense of the called subscriber.”
According to Chizhikov, “in this context it is not clear which calls would be free for the subscriber and which calls would need paying for.” 
The amendments deal with individual subscribers while the order of transactions between telephone companies and corporate subscribers remains unresolved, he added.
“Deputies did not work on the law in detail, did not identify the negative effects which could result from new rules for communication services,” he said.
“Two problems would come from exercising the new law. Mobile operators would earn less money for their services, and calling subscribers, including subscribers of landline telephone companies, will pay for connections,” he said.
Telephone operators remain reserved about the issue.
“We consider the CPP principle fair but any comments about the law before its final version is published are untimely,” said Andrei Klimov, director for public relations at Megafon mobile operator.
According to Grigory Shapovalov, press secretary of Northwest Telecom, a St. Petersburg landline operator, “the question is how re-calculations between companies would be conducted bearing in mind that mobile operators and landline telephone companies are objectively hardly compatible market segments.” 
Yulia Ostroukhova, press-secretary of Vimpelcom, also stressed the importance of a transaction system between operators. 
“We should remember that besides well known companies like MTS and Svyazinvest subsidiaries lots of alternative landline telephone operators work in the regions,” Ostroukhova said.
“No call is free. In Europe incoming calls are paid by the caller. We hope that the new law will be accompanied by the introduction of fees for outgoing calls from landlines. Otherwise the principle would not work, the market would be distorted, the network overloaded. Nobody would earn any profit,” she said.
Ostroukhova said a possible option for mobile operators in this situation could be the introduction of fees equal to the prime cost of a minute’s connection, which is about $0,06 at the moment.
An increasing of tariffs is unlikely since free incoming calls will increase traffic and compensate for the loss of revenue to mobile operators, she said.

TITLE: VimpelCom Enters Ukraine
PUBLISHER: Combined Reports
TEXT: The country’s No.2 mobile phone firm, VimpelCom, entered Ukraine’s fast-growing market Friday by buying a mobile operator company for $231.3 million despite opposition from Norway’s Telenor, one of VimpelCom’s key shareholders.
The acquisition of Ukrainian RadioSystems, or URS, marks a victory for Alfa Telecom, VimpelCom’s largest shareholder over Telenor, VimpelCom’s second-biggest investor. 
Alfa Telecom, which owns 32.9 percent of the company, has pushed for VimpelCom to expand into Ukraine, where subscriber growth rates are faster than in the company’s home market. 
Although a shareholder meeting approved the purchase of URS, Telenor had opposed the deal, which has been under discussion since August 2004, at board meetings, saying the price was too high. 
Telenor owns 26.6 percent in VimpelCom, which operates under the Beeline brand in Russia and Kazakhstan.
Under the terms of the deal, VimpelCom also assumed debt of $23.5 million, it said.
“As CEO, I could not have failed to fulfil a shareholders meeting’s decision,” Alexander Izosimov told a news conference. “There are no other such markets in Europe like Ukraine.”
With a population of 47 million, Ukraine’s mobile services penetration is 50 percent compared with 80 percent in Russia.
There are two major mobile services firms in Ukraine. Mobile TeleSystems - VimpelCom’s key rival in Russia -  has been operating there for several years and has the biggest market share of any company. The second largest company is Telenor-controlled Kyivstar, where Alfa is a minority shareholder.
VimpelCom’s board has never approved the deal with the required majority because Telenor’s representatives voted against it.
(Reuters, Bloomberg)

TITLE: Oil Executives Left U.S. Senate Unscathed
AUTHOR: By Dana Milbank
TEXT: U. S. Senators struck a note of populist outrage when they ordered oil executives to appear before the Energy and Commerce committees to explain high fuel prices and record company profits. When Senator Bill Frist, a Republican and the Majority Leader, announced the hearing, he said it would expose “those who abuse the free-enterprise system to advantage themselves and their businesses at the expense of all Americans.”
But instead of calling oil executives on the carpet yesterday, senators gave them the red-carpet treatment.
The companies summoned to testify have given about $400,000 to various senators’  political action committees this year alone — and much of that has found its way to those who served as the executives’ interrogators. So while protesters came to the hearing wearing “Exxpose Exxon” T-shirts, most lawmakers opted to extol Exxon Mobil — and Chevron, ConocoPhillips, BP and Shell.
“First, let me begin by thanking each of you and the companies for what you all did to save lives, to save property, to restore the communities along the Gulf Coast,” said Senator Mary Landrieu, a Democrat who has taken $249,155 in oil and gas money over five years, according to the Center for Responsive Politics.
“There’s a great deal we know about your industry; there’s a great deal the average citizen does not know,” said Senator Larry Craig (Republican, $96,950), explaining popular hostility to the industry. “I must tell you, it’s not terribly fun defending you. But I do.”
Senator John Sununu (Republican, $64,480) praised the executives for being “very reasonable.” He said the industry’s profits are big “because they are very big companies,” and he argued against higher taxes on their profits.
From the start, the ferocity of the questioning seemed to come in inverse proportion to the amount of industry funds a questioner had received.
When Energy Committee Chairman Ted Stevens (Republican, $102,190) announced that he would not require the executives to give their testimony under oath, Senator Maria Cantwell (Democrat, $9,400) asked for a vote on the issue. Stevens shot back: “There will be no vote . . . It’s the decision of the chairman, and I have made that decision.”
“I move that we swear in witnesses,” Cantwell persisted.
“I second the motion,” said Senator Barbara Boxer (Democrat, $9,450).
“That’s the last we’re going to hear about that, because it’s out of order,” a piqued Stevens replied. When the two women continued their protest, the chairman informed them that “I intend to be respectful of the position that these gentlemen hold.”
Stevens did not fail in this goal. When Boxer later displayed a large chart showing the executives’ pay, Stevens cut her off.
“We’ll stop the clock right here for you, Senator,” Stevens said, ordering the chart taken down because it was not “information that pertains to our issue.”
From the audience, a woman called out: “How about the consumers?” When the same woman later let out a cheer, Stevens threatened to “clear the room.”
At times, the senators seemed to be bigger boosters of the industry than the executives themselves. Under questioning from Senator Ron Wyden (Democrat, $12,500), all five executives testified that they did not need the tax breaks in the recent energy bill.
“That energy legislation is zero in terms of how it affects Exxon Mobil,” said the company’s chairman, Lee Raymond.
This did not sit well with Senator Kay Bailey Hutchison (Republican, $306,820). “But, she asked, don’t the tax breaks “make a difference” in investment decisions?
Raymond would not play along. “They will not significantly alter the programs that we have,” he said. Stevens scratched his head.
More than one senator begged the executives to help them explain high energy prices to consumers. “Please,” said Senator Pete Domenici (Republican, $164,158), “describe in detail how the price of oil is set.” Nobody volunteered. So Domenici called on Raymond to “put yourself in my shoes.”
The executives rebuffed requests from other friends. They wouldn’t comment on a request by Senator Jeff Bingaman (Democrat, $43,864) for their thoughts on fuel economy standards. When Senator Lamar Alexander (Republican, $117,450) asked whether they favor more efficient natural gas plants, Shell’s John Hofmeister advised him: “That’s a question for the utilities.”
The executives were even less forthcoming when questions turned hostile. Senator Frank Lautenberg (Democrat, $10,000) asked whether any of the companies had participated in Vice President Dick Cheney’s energy task force, and all five answered in the negative. Fortunately, they were not under oath: A report by the U. S. Government Accountability Office found that Chevron was one of several companies that “gave detailed energy policy recommendations” to the task force.
Lautenberg did not press the issue. Those wearing the “Exxpose Exxon” T-shirts put on their jackets. The unscathed executives walked briskly with their security guards from the building, past a pair of demonstrators with “Return the Gas and Oil Money” signs, and get into their waiting Cadillacs.

This comment first appeared in The Washington Post.

TITLE: Amendment To Customs Law Creates Risk of Double VAT
AUTHOR: By Dmitry Mayorov
TEXT: On November 9, 2005 President Vladimir Putin signed the bill “On Amendments to the Russian Federation Law “On Customs Tariffs” into federal law. The fundamental idea behind the amendments is to raise the status of certain standards and rules that have been around for quite a while. Most of the “novelties” introduced by the Law are already well known to importers. It is just that these standards used to be established by the Customs Services’ regulatory documents and now, after the amended Law comes into force, the customs service will apply the same standards as the basis of the Law. 
The most interesting part of the law refers to the customs value calculation method most commonly used in practice – the import transaction value method. 
1. The lawmaker has redefined the term “Customs Value”. Previously, the customs value of goods was considered the transaction price paid or payable at crossing the border, and now it is defined as the cost of goods paid or payable. The change may imply that part of the costs incurred by the importer, for example, those related to the transportation of goods inside Russia, might become part of the customs value and subject to import duty and VAT. 
The truth is that the new Law does allow for the deduction of certain costs from the customs value (assembly, installation, transportation inside Russia etc.), however such a deduction is conditional upon certain criteria. Namely, the costs are to be shown separately as part of the price paid or payable and duly documented. 
Accordingly, where amounts eligible for deduction are not separated from the cost of goods, or the customs authorities believe them not to be duly supported, the cost of assembly, installation, transportation inside Russia and other costs may be included in the customs value.
On the other hand, assembly, installation etc., work or services provided in Russia, are subject to the Russian VAT to be withheld by the tax agent. Accordingly, the risk of double VAT taxation arises.
2. A positive development is that now it will be possible to exclude from the customs value duties, taxes and levies paid in Russia. Presently, the customs authorities require that transportation costs to the Russian border, inclusive of VAT paid to the carrier, be included in the customs value. 
As a result, VAT already paid to the carrier is in fact subject to import duty and VAT again during customs clearance. The objections of importers claiming this to be double taxation found no support either among customs authorities or in arbitrage courts. Once the amended Law “On Customs Tariffs” comes into force, the situation may change to the benefit of importers. 
3. The amended Law “On Customs Tariffs” ultimately legalizes constant customs value under continuing customs regimes. 
Where goods imported into Russia pending release into free circulation are placed under any other customs regime (temporary import, customs warehouse, processing regimes etc.) the customs value of the goods, when released into free circulation, is established as at the initial date of import rather than at the date of filing a customs declaration under the internal use, free circulation regime. This limitation does not apply to instances expressly stipulated by customs law. 
4. What is concerning are certain wordings of the Law that describe the procedure for additional charges to the price actually paid or payable. Such additional charges are necessary if the customs value is determined using the first method, i.e. at the price of the import transaction. 
The size of such additional charges is to be supported based on the purchaser’s accounting records. Where no documentary evidence is available, the first method of customs value calculation (at the price of the import transaction) is disallowed. 
The Law provides a list of additional expenses. Some of these expenses may not be recognized in the buyer’s books as at the date of declaration, or not shown as separate amounts. This may happen, for instance, under DDU delivery terms, when transportation expenses, including insurance, are borne by the seller rather than the buyer. 
In the above example, the buyer has no documentary evidence of such expenses that the Law requires to be shown in the accounting records. The absence of documentary evidence of the expenses may provide formal grounds to disallow the first method of customs value calculation (at the price of the import transaction).
We would like to hope that before the amendments come into force on July 1, 2006, the Russian Federation’s Government will realize its right to establish rules on the application of customs value calculation methods and issue a document providing a detailed guidance on how the customs service should act.

Dmitry Mayorov is Manager, Head of Customs Group. at Ernst & Young’s St.Petersburg Office.

TITLE: IN BRIEF
TEXT: Panasonic Into St. Pete
ST. PETERSBURG (SPT) — Japanese consumer electronics maker Matsushita is considering a Panasonic factory in St. Petersburg, Masao Motoki, head of Panasonic Rus, Interfax reported.
St. Petersburg is the most promising of several sites being considered by Matsushita, Motoki said at a technology fair in St. Petersburg Thursday.
Matsushita, which makes the Panasonic line, met with St. Petersburg governor Valentina Matviyenko in Tokyo this June to express its interest in expanding its Russian operations.
Earlier this year, Matsushita opened a research center in Siberia to develop communications software for its Panasonic line of products.

Shipyard Investment
LONDON (Bloomberg) — Russia’s Admiralty Shipyard plans to spend as much as $600 million developing its facility in St. Petersburg, TradeWinds newspaper reported Friday, citing the company’s general director.
The yard will use the money to update production capacity to 2013, Vladmir Alexandrov was quoted by the newspaper as saying.
Admiralty is keen to secure more contracts to build ships after winning contracts to build oil tankers from companies including Sovcomflot, Russia’s state-owned shipping company, Trade Winds said.

Baltika 9-Month Profits 
ST. PETERSBURG (Bloomberg) — Baltika, Russia’s biggest brewer, said nine-month profits soared 55 percent after the company sold more beer and the drink’s average price rose.
Net income rose to 154 million euros ($181 million) from 99.6 million euros a year earlier, the St. Petersburg-based company said Monday on its Web site. Sales rose 22 percent to 758 million euros from 621 million euros. The results were based on International Financial Reporting Standards.
Baltika is controlled by Scottish & Newcastle Plc and Carlsberg A/S.

6 Percent GDP Growth
MOSCOW (Bloomberg) — Russia’s economy probably will expand 6 percent this year, Interfax reported Monday, citing central bank Chairman Sergei Ignatyev.
Consumer prices rose 0.2 percent in the first week of November, Ignatyev said at a budget meeting in the nation’s lower house of parliament.

Samsung Heavy Order
SEOUL (Bloomberg) — Samsung Heavy Industries Co., the world’s third-largest shipbuilder, said it received an order to build three ice-breaking oil tankers valued at 442 billion won ($424 million).
The shipyard secured the order from Russia’s state-owned shipping company Sovcomflot, the Seoul-based company said in a filing to the Korea Stock Exchange Monday. The vessels will be delivered by March 1, 2009.
“This order is significant as it is the first time a Korean shipbuilder has won an order for this ice-breaking carrier business,” the company said in an e-mailed statement.

Novolipetsk Share Sale 
LONDON (Bloomberg) — Novolipetsk Iron & Steel, Russia’s fourth-largest steelmaker, may sell shares to the public at the start of next month in what could be London’s biggest offering this year for a steel producer, said investors including John Coast Sullenger at Lombard Odier Darier Hentsch.
Merrill Lynch & Co. and UBS AG want to arrange meetings this week with fund managers on the sale, said two bankers and four investors who declined to be identified because of rules on such sales. The sale may seek to raise $750 million, said a banker who declined to be identified. Sullenger said he had been contacted and declined to say which banks had spoken to him.

Surgutneftegaz Earnings
SURGUT (Bloomberg) — Surgutneftegaz, Russia’s fourth- largest oil producer, said retained earnings rose 48 percent to 87.1 billion rubles ($3 billion) in the first nine months compared with a year earlier as output and oil prices gained.
The company reported retained earnings of 59 billion in the year-earlier period under Russian accounting standards, according to a report Monday on the Surgut, Siberia-based company’s Web site.
Sales rose 52 percent to 319.6 billion rubles from 210.9 billion rubles in the year-earlier period. 

Amtel Raises $202 Mln
LONDON (Bloomberg) — Amtel-Vredestein NV, Russia’s third- biggest tiremaker, and its owners raised $202 million in a public offering, about a third less than they sought, after competitor Nokian Renkaat Oyj cut its profit outlook for November.
Amtel, based in Moscow, sold new shares amounting to about 21 percent of the company at $11 a piece. The owners sold an additional 6 percent. The company originally offered shares for between $13 and $16 a share. The shares began trading in London Monday. The IPO price values Amtel at about $743 million.
“The Nokian results show something about tire sales and Amtel could also be hit by industry trends,”said Anders Ronnebaek, a fund manager at Sydbank A/S in Aabenraa, Denmark, who didn’t buy the shares.  

Hambro Into Iron Ore
(Bloomberg) — Peter Hambro, the founder of Peter Hambro Mining Plc Mining, and director Pavel Maslovsky said they sold shares in the gold miner to fund the development of iron ore deposits in Russia.
The pair sold 2.60 million shares, or 3.3 percent, of Peter Hambro Mining, for 7.70 pounds ($13.39) a share, the London-based company said Monday in a Regulatory News Service statement.
Executive Chairman Peter Hambro retains a stake of 6.6 percent in the company while Vice-Chairman Maslovsky has 23.5 percent.
“Our personal investments in the Russian iron ore industry reflect our confidence in investing in Russia,’’ Peter Hambro said in the statement.
Hambro and Maslovsky are betting on further increases in demand for iron ore, the raw material needed to make steel. Iron ore prices will average $26 a metric tons from 2010, compared with $20 to $22 from 1980 to 2004, Merrill Lynch & Co. in a Sept. 21 report.
Shares of Peter Hambro Mining fell 15 pence, or 1.9 percent, to 787.50 pence as of 3:01 p.m. London time, giving the company a market capitalization of 619 million pounds. The shares have risen 56 percent this year.
Peter Hambro Mining digs for gold in far eastern Russia and expects to produce 271,000 ounces of the precious metal this year.

TITLE: The Fires of Disintegration
AUTHOR: By Niall Ferguson
TEXT: Which would you rather have in your capital city: a terrorist attack in the center or two weeks of rioting on the outskirts? After the experience of last July, most Londoners would probably be tempted to opt for the latter. The damage inflicted by the Tube and bus bombings far exceeds the cost of the recent mayhem in Paris' eastern suburbs.
On the other hand, the perpetrators of the July 7 bombings could be counted on the fingers of one hand. By contrast, no one knows just how many young men took to the streets of Paris over the last two weeks, but there were certainly hundreds. Britain and France face roughly the same problem at the moment. But there is good reason to think that France’s is bigger.
Just what is the problem? Nicolas Sarkozy, the brazenly ambitious French interior minister, denounced the rioters as “scum” and “thugs,” having earlier vowed to “clean up” the areas where the violence took place.
This was the cue for his foes on the left to blame the trouble on Sarkozy’s heavy-handed approach to policing. Meanwhile, his foes on the right pointed the finger of blame at immigration. After all, the cars are burning in suburbs where immigrant communities predominate.
Sarkozy is, in fact, engaged in a clever piece of political triangulation. Having already bid for immigrants’ support with offers of affirmative action programs and voting rights for noncitizens who are long-term residents, he now needs to send a signal to the French right that he also knows how to be tough. The real question is whether this mix of carrots and sticks is a credible cure for a divided city.
The problem is not immigration per se but a failure of integration. France has the highest foreign-born population of any European country - more than 10 percent. Yet this is a legacy of past immigration, not present.
The French have a low immigration rate now and are notably unsympathetic to those who seek political asylum. These days, most newcomers are joining family members who have been in France for years, if not decades. The trouble is, they are moving to ghettoes with miserable economic prospects. The unemployment rate among foreign-born residents is more than twice the national average, which is already high enough at more than 9 percent. Immigrants are also heavily overrepresented in French jails.
Revealingly, the rioters who have so far been arrested are nearly all the sons and grandsons of immigrants. Their life stories are sorry chronicles of educational underachievement, unemployment and petty crime in benighted enclaves such as Clichy-sous-Bois and Neuilly-sur-Marne.
Immigration need not mean social exclusion. Most of the people who move from poor countries to rich countries do so with the best of intentions - to work hard and make a better life for themselves and their children.
Compared with Europe, the United States has long excelled at integrating newcomers. Not so long ago I was at a school in southern Texas, not far from the Mexican border. The day began with the entire class singing a ditty that went like this: “I am proud to be an American, be an American, be an American / I am proud to be an American, living in the U.S.A. - OK!” Deeply corny, no doubt. But these little kids sang - albeit in distinct Latino accents - with real gusto.
Longtime Americans take for granted the language and civics tests that would-be Americans have to take. But they’re not easy. One question in the official “Guide to Naturalization” is: “Who said, ‘Give me liberty or give me death?’” I had no idea it was Patrick Henry. My favorite sample question is: “Who helped the Pilgrims in America?” The answer to that one is: “The American Indians/Native Americans” - a fine example of the American habit of accentuating the positive.
The problem in Europe is partly economic. In free-market America, immigrants get jobs; they are not much more likely to be unemployed than workers born in the U.S. But the second problem is that Europeans do not try hard enough to make immigrants integrate culturally. In Britain, an English-language test for would-be citizens was introduced only last year, and only last week did they begin testing for knowledge of “Life in the U.K.”
This would be progress if the test were any good. Alas, there are only two questions on British history, and they are: “Where have migrants come from in the past and why?” and “What sort of work have they done?”
The irony is that it is Americans, not Europeans, who are consumed with worry about the social consequences of immigration. In the last few weeks, I have heard repeated expressions of anxiety about the growth of California’s — and the country’s — Latino population. My colleague at Stanford University’s Hoover Institution, Victor Davis Hanson, fears he will soon be living in “Mexifornia,” echoing the worries expressed not so long ago by Harvard’s Samuel Huntington.
They are, of course, right to worry. The U.S. needs to safeguard its tradition of effective economic and cultural integration. But as my own immigration to the United States proceeds, I tend to worry much more about Europe. For Mexicans are not Moroccans: Muslim immigrants are clearly harder to integrate. And the United States is not yet suffering a British-style historical amnesia. Nor, thankfully, are the fires of disintegration already burning, as they are in Sarkozy’s France.

Niall Ferguson is a columnist at the Los Angeles Times, where this comment first appeared.

TITLE: Cracking the Environmental Code
AUTHOR: By Vladimir Gryaznevich
TEXT: In last week’s column, I gave an overview of the “St. Petersburg Strategy for the Preservation of Heritage” adopted by the local government. In the view of almost all the independent experts consulted, it misses the main risk to cultural heritage — the increasing activity of business in the historic center of the city, as a result of which new buildings appear with low architectural and aesthetic standards. Additionally, these buildings are often excessively tall, ruining St. Petersburg’s historic panoramic views. The Strategy fails to analyze this element and, as a result, it provides insufficient measures aimed at avoiding these negative tendencies. 
We shouldn’t, of course, accuse entrepreneurs of not caring about culture or, perhaps, of simply not having sufficient brains to deal with this problem. The business world attracts its fair share of intelligent and reasonable individuals. In general, they understand that the center of St. Petersburg requires beautiful buildings, and this will only improve their own images. Poor quality designs don’t arise because investors are too penny-pinching to come up with something of a higher standard. They arise for a number of different reasons. 
Firstly, investors have their own concepts of what is beautiful. Architects are often heard complaining that their clients, flying in the face of common sense and even economic factors, insist on their own, unprofessional, architectural flights of fancy. The second major factor is purely technical in nature. At present, architects are often selected not on the basis of their talent, but on their abilities in the business sphere. An ability to get their designs approved by the relevant authorities, for example, is highly valued, as is an ability to professionally put together the design plans in a very short time frame. What the building will actually look like is often a secondary concern for investors. The end result? Visually unappealing buildings. 
Thirdly, clients can also have a bad influence on the designs for commercial reasons. The details of the faÍade, for example, can be simplified, and in order to maximize profits, the top floor can be extended, or additional floors added on to provide a view across the city. 
The experts propose means to fight against each of these three factors. Designs for buildings in the historic center of St. Petersburg should be selected in competitive tenders held by the city’s construction council with the participation of investors. The architectural community has a more or less cohesive conception of what constitutes good architecture, so these tenders would be much better equipped to choose the finest designs. 
This competitive process would, of course, limit the investor’s right to select an architect and complicate the already arduous process for the agreement of designs. Nevertheless, I’m sure that the business community, understanding the situation, would accept this limitation, particularly in view of the fact that the additional architectural costs would not be a major factor, as those costs represent only a small proportion of total expenditure in the construction of a building. The investor could also independently hire specialists to draw up the basic plans. 
The procedure for having designs approved by the various government bodies — the second problem we identified above — must be simplified, although a good deal of common sense needs to be applied in this sphere. 
We should note that the better the quality of the design, the easier it is to get approval from all these government bodies. It would also make sense to simplify the procedure by getting rid of or cutting down secondary approvals. For example, for construction in the historic center, it’s unrealistic to demand that each apartment in the building receive 2.5 hours of direct sunlight every day. The demands for lighting standards should also be brought into line with European standards. 
To clear up the third problem — clients insisting on changes to the design for economic reasons or as a matter of personal taste — the experts suggest the establishment of a more clearly defined system of requirements for designs. First and foremost, this concerns the size of the building — it should fit in to the surrounding architectural environment, and shouldn’t intrude on the landscapes of the city’s main thoroughfares, or ruin any panoramic views. This can be achieved, believes Oleg Kharchenko, formerly the city’s chief architect, if we adopt the “environmental code” concept popular in Europe. This code comprises a selection of geometric parameters that are more or less characteristic for any particular street: the height of buildings, their width, the scale of the detailing on the facades, and so on. 
Control itself is a key factor here. It’s well known that many plans that clearly run counter to every architectural principle are approved thanks to backhanders paid to bureaucrats. That happens because there are no clearly defined criteria, which leaves those bureaucrats with a good deal of room for maneuver. Introducing a formal environmental code and competitive selection of plans would significantly restrict their opportunities to take advantage of investors and architects. And that would significantly reduce the risks to St. Petersburg’s cultural heritage. 
Let us hope the new rules on the use of land and construction currently being prepared by the city administration will take these recommendations from the experts into consideration. If it does, business will no longer be a threat to St. Petersburg’s cultural heritage, but will in fact become a stimulus to its development in accordance with architectural traditions, with buildings of genuine worth being constructed. Such buildings are already appearing in the city, and there should be more of them. 

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: The White Death
AUTHOR: By Chris Floyd
TEXT: This week, the broadcast of a shattering new documentary provided fresh confirmation of a gruesome war crime covered by this column nine months ago: the use of chemical weapons by U.S. forces during the frenzied destruction of Fallujah in November 2004.
Using filmed and photographic evidence, eyewitness accounts and the direct testimony of U.S. soldiers who took part in the attacks, the documentary — “Fallujah: The Hidden Massacre” — catalogs the American use of white phosphorus shells and a new, “improved” form of napalm that turned human beings into “caramelized” fossils, with their skin dissolved and turned to leather on their bones. The film was produced by RAI, the Italian state network run by a government that backed the war.
Vivid images show civilians, including women and children, who had been burned alive in their homes, even in their beds. This illegal use of chemical weapons — at the order of the Bushist brass — and the killing of civilians are confirmed by former U.S. soldiers interviewed on camera. “I heard the order to pay attention because they were going to use white phosphorus on Fallujah,” said one soldier, quoted in The Independent. “In military jargon, it’s known as Willy Pete. Phosphorus burns bodies; in fact it melts the flesh all the way down to the bone. ... I saw the burned bodies of women and children. Phosphorus explodes and forms a cloud. Anyone within a radius of 150 meters is done for.”
The broadcast is an important event: shameful, damning, convincing. But it shouldn’t be news. Earlier this year, as reported here on March 18, a medical team sent to Fallujah by the Bush-backed Iraqi interim government issued its findings at a news conference in Baghdad. The briefing, by Health Ministry investigator Dr. Khalid ash-Shaykhli, was attended by more than 20 major U.S. and international news outlets. Not a single one of these bastions of a free and vigorous press reported on the event. Only a few small venues — such as the International Labor Communications Association — brought word of the extraordinary revelations to English-speaking audiences.
Yet this highly credible, pro-American official of a pro-occupation government confirmed, through medical examinations and the eyewitness testimony of survivors — including many civilians who had opposed the heavy-handed insurgent presence in the town — that “burning chemicals” had been used in the attack, in direct violation of international and U.S. law. “All forms of nature were wiped out” by the substances unleashed in the assault, including animals that had been killed by gas or chemical fire, said ash-Shaykhli. But apparently this kind of thing is not considered news anymore by the corporate gatekeepers of media “truth.”
As we noted here in March, ash-Shaykhli’s findings were buttressed by direct testimony from U.S. Marines filing “after-action reports” on web sites for military enthusiasts back home. There, fresh from the battle, soldiers talked openly of the routine use of Willy Pete, propane bombs and “jellied gasoline” (napalm) in tactical assaults in Fallujah. As it says in the scriptures: By their war porn ye shall know them.
This week, as in March, the Pentagon said it only used white phosphorus shells in Fallujah for “illumination purposes.” But the documentary’s evidence belies them. Although there are indeed many white bombs bursting in the air to bathe the city in unnatural light, the film clearly shows other phosphorus shells raining all the way to the ground, where they explode in fury throughout residential areas and spread their caramelizing clouds. As Fallujah biologist Mohamed Tareq says in the film: “A rain of fire fell on the city, the people struck by this multicolored substance started to burn, we found people dead with strange wounds, the bodies burned but the clothes intact.”
The slaughter in Fallujah was a microcosm of the entire misbegotten enterprise launched by those two eminent Christian statesmen, U.S. President George W. Bush and British Prime Minister Tony Blair: a brutal act of collective punishment for defying the imperial will, a high-tech turkey shoot that mowed down the just and unjust alike, an idiotic strategic blunder that has exacerbated the violence and hatred it was meant to quell. The vicious overkill of the Fallujah attack — where an estimated 1,200 civilians died while almost all of the targeted insurgents slipped away beforehand — alienated large swaths of previously neutral Iraqis and spurred many to join the resistance. It further entangled the United States and Britain in a putrid swamp of war crime, state terrorism and atrocity, dragging them deeper into a moral equivalency with the murderous extremists whom the Christian leaders so loudly condemn.
Let’s give the last word to Jeff Engelhardt, one of the ex-servicemen featured in the documentary, who recently issued this plea to his fellow U.S. soldiers on Fight to Survive, a new dissident web site run by Iraqi War vets:
“I hope someday you find solace for the orders you have had to execute, for the carnage you helped take part in, and for the pride you wear supporting this bloodbath. Until then, you can only hope for an epiphany, something that stands out as completely immoral, that convinces you of the inhumanity of this war. I don’t know how much more proof you need. The criminal outrage of Abu Ghraib, the absolute massacre of Fallujah, the stray .50 caliber bullets or 40mm grenades or tank rounds fired in highly packed urban areas, 500-pound bombs dropped on innocent homes, the use of 25mm depleted uranium rounds, the inhumane use of white phosphorus, the hate and the blood and the misunderstandings ... this is the war and the system that you support.”

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

TITLE: Would-Be Bomber Makes TV Confession
AUTHOR: By Zeina Karam
PUBLISHER: The Associated Press
TEXT: AMMAN, Jordan — The televised confession of an Iraqi woman — accused of being the fourth would-be suicide attacker — set Jordanians buzzing Monday, with some expressing joy over her capture and others venting anger over her deadly plans. 
Still others questioned if she was really involved in the bomb plot that killed 57 people in Wednesday’s attacks on the Radisson SAS, Grand Hyatt and Days Inn hotels.
Sajida Mubarak Atrous al-Rishawi went from rural Iraqi obscurity to global notoriety overnight after her confession was aired Sunday in a broadcast beamed not just across Jordan, but throughout the Middle East and beyond.
“I sat there watching and couldn’t understand how she could be speaking so coldly,” said Adel Fathi, 29. Three of his relatives were killed in the Radisson wedding party reception that was bombed by al-Rishawi’s husband.
“What are these people made of?” asked Fathi, who closed his women’s accessories shop early and joined millions of others who watched the confession.
Al-Rishawi, from the militant hotbed of Ramadi and the sister of a slain lieutenant of Jordanian-born militant Abu Musab al-Zarqawi, was arrested Sunday. Police swooped on an Amman safe house after they were tipped by Al Qaeda in Iraq’s Internet claim that she had died in the attacks.
“My husband detonated [his bomb] and I tried to explode [mine] but it wouldn’t,” al-Rishawi said during the three-minute televised segment. She appeared anxious and wore a white headscarf. “People fled running and I left running with them.”
Al-Rishawi was made to display the clothing she wore into the party in which at least 25 people were killed by her husband, Ali Hussein Ali al-Shamari, also 35.
Hers wasn’t the first televised confession by terror suspects detained by Jordanian police. In April 2004, at least four Jordanian and Syrian militants linked to al-Zarqawi detailed their plot to launch chemical bomb attacks in Amman, particularly against the General Intelligence Department.
In her television appearance, al-Rishawi opened her dark fur-collared full-length overcoat to reveal two crude explosives belts — one packed with RDX and the other with ball-bearings. They were strapped to her waist front and back with a thick binding of silver tape.
“It was scary to see her with her bomb but at least we know who she is and she can be punished,” said Anwar Nazih, a 15-year-old schoolgirl.
Many Jordanians, however, expressed doubt al-Rishawi’s confession was real or that she was even involved in the plot.
“I don’t buy it. There are many contradictions, and it just doesn’t make sense,” said Mohammed al-Fakhiri, a 33-year-old mobile telephone shop owner in the Jordanian capital, Amman.
“The first thing she would have done is get rid of her explosive belt,” al-Fakhiri said. “So how come she was caught with it.”
He also said al-Rishawi claimed that her husband had detonated his explosives apparently before she fled.
“So how come she wasn’t wounded?”
Jordanian Deputy Premier Marwan Muasher told reporters Sunday that al-Rishawi’s husband noticed she was having problems detonating her bomb and pushed her out of the wedding ballroom before blowing himself up.
Al-Rishawi said her husband exploded his belt and she couldn’t detonate hers. But it wasn’t clear from her comments whether her husband blew himself up before her bomb malfunctioned or after. 
Responding to a TV interviewer’s questions, the meek-looking al-Rishawi said her husband made all the arrangements for the plot. He drove both of them and two other men — apparently bombers Rawad Jassem Mohammed Abed and Safaa Mohammed Ali, both 23 — to Amman. He also fitted her with the belt and ordered a taxi to take them to the Radisson. 
“Her weak soul, her entourage and her husband made her carry out this horrible act because usually women are more sensitive toward such acts,” said 33-year-old pharmacist Salma al-Qusous. 
“But believe me, I felt disgusted [watching the confession] and this heartless woman deserves the harshest punishment,” al-Qusous said. 
Investigators are still interrogating al-Rishawi, who officials believe may provide a key link to Al Qaeda in Iraq.

TITLE: Police Say Nuclear Reactor Was Target
AUTHOR: By Michael Perry
PUBLISHER: Reuters
TEXT: SYDNEY, Australia — Eight Sydney men arrested on terrorism charges may have been planning a bomb attack against the city’s nuclear reactor, police said on Monday. 
Their Islamic spiritual leader, also charged with terrorism offences, told the men if they wanted to die for jihad they should inflict “maximum damage,” according to a 21-page police court document.
The document outlines how the men, arrested last week in the nation’s biggest security swoop, bought chemicals used in the London July 7 bombs, had bomb-making instructions in Arabic and videos entitled “Sheikh Osama’s Training Course” and “Are you ready to die?”
Under the heading “Targets,” police said three of the men were stopped near Sydney’s Lucas Heights nuclear reactor in December 2004. A security gate lock had recently been cut.
Australia, a staunch U.S. ally with troops in Iraq and Afghanistan, has never suffered a major peacetime attack on home soil. The country has been on medium security alert since shortly after the Sept. 11, 2001 attacks on the United States by Osama bin Laden’s al Qaeda network.
The document said six of the men went on “hunting and camping trips,” which police described as jihad training camps, in the Australian outback in March and April 2005.
“This training is consistent with the modus operandi of terrorists prior to attacks,” the police document said, adding that one man attended a training camp in Pakistan in 2001.
Police said a Melbourne-based Muslim cleric, arrested in the security swoop and charged with terror offences along with eight other men in Melbourne, was the spiritual leader of the Sydney and Melbourne groups.
Muslim teacher Abdul Nacer Benbrika, also known as Abu Bakr, gave “extremist advice and guidance” and “has publicly declared his support of a violent jihad,” the document said.
At a February meeting Benbrika talked to the Sydney men about fighting those who opposed Sharia law.
“If we want to die for jihad, we have to have maximum damage. Maximum damage. Damage their buildings, everything. Damage their lives,” said Benbrika, according to the document.
But Benbrika said the men needed their mothers’ permission to go on jihad.
Police said the men were an extremist sub-group of the religious Ahel al Sunna wal Jamaah Association, a Sunni Islamic group that follows a fundamentalist jihad ideology. They said the group had little or no respect for Australian law or society.
In Australia’s biggest counter-terrorism swoop last week, 18 men were arrested and charged with offences including acts in preparation of a terrorist attack, being a member of a terrorist group and conspiracy to commit a terrorist act.
Nine men were arrested in Melbourne and nine in Sydney, one of whom was transferred to Melbourne on Monday. All have been remanded in custody and no pleas have been entered.
Police said the Sydney men had bought chemicals to produce “peroxide-based explosives” and had a computer memory stick containing instructions in Arabic on how to make explosives.

TITLE: French Emergency Powers Extended to Curb Ongoing Riots
AUTHOR: By Matthew Bigg
PUBLISHER: Reuters
TEXT: PARIS — The French government said on Monday it would ask parliament to grant a three month extension to emergency powers it invoked to help curb the worst urban violence in almost 40 years. 
Although the violence dropped again overnight, police said youths destroyed 374 vehicles in petrol bomb attacks in the 18th straight night of unrest in poor suburbs in the Paris region and major provincial cities.
Disturbances erupted on Oct. 27 after the deaths of two youths apparently fleeing police, but transformed into a wider protest by youths of African and North African origin against racism, poor job prospects and their sense of exclusion from French society.
Government spokesman Jean-Francois Cope told Europe 1 radio station that Monday’s special cabinet session would submit to the National Assembly a bill extending the 12-day emergency powers act by three months from November 21, when the current measures expire.
“The bill allows the government to end them by decree before the expiry date if that is compatible with the goal of restoring public order,” Cope said.
On Nov. 8 the government of Dominique de Villepin revived a 50-year-old colonial-era law to grant prefects, the government’s top local officials, broad powers to impose curfews and other restrictions on designated areas.
The conservative government decree named 38 towns, cities and urban areas around France, including the capital Paris. However, few prefects have availed themselves of the new powers.
It was unclear how the substantial extension of the enforcement period of emergency powers would be greeted by the opposition Socialists, who invoked the same 1955 law when in government in the 1980s.
Some local mayors have already criticized the measure as an overreaction at best and, at worst, inflammatory. The government has a comfortable majority in parliament and the measure should pass with ease.
Rioters, who also include white youths, torched 1,400 cars across France last Sunday but violence has dropped sharply since that peak.
Police said 10 youths were arrested in the southwestern city of Toulouse after youths burned 10 vehicles on Sunday and damaged a school, driving a burning car against its gates.
The disturbances are the worst in France since student riots in 1968 and have shaken the government of President Jacques Chirac, sparked a debate on the integration of immigrants and caused ripples throughout Europe.
In a bid to help tackle problems in French suburbs, the European Union has offered France $59 million, EU Commission President Jose Manuel Barroso said on Sunday in a radio interview.
The main problem behind the unrest was youth unemployment but the challenge of integrating immigrants was shared by many European cities, he told France’s Europe 1.
“The best social politics is to create employment. That is the main thing. When you have 60 percent of youths unemployed in suburbs it is a problem,” Barroso said.
An editorial in Monday’s Midi-Libre newspaper said the riots had hurt France’s image abroad.
“Even if the violence isn’t racial in origin, the crisis in the suburbs brings the failure of France’s social model...to the fore and has highlighted the country’s social sickness,” it said in a signed editorial. 
The opposition Socialists accused Interior Minister Nicolas Sarkozy on Sunday of acting tough to increase his chances of becoming president in the 2007 election. Sarkozy has said he would throw out foreigners caught rioting. 
Jean-Marie Le Pen, leader of the right-wing National Front party, called the unrest on Sunday “a social atomic bomb” caused by immigration and said the rioters were “Chirac’s children.”

TITLE: Bush Faces Hard Sell On Busy Trip to Asian States
PUBLISHER: The Associated Press
TEXT: WASHINGTON — President Bush embarks Monday on an eight-day Asian trip with a full plate: preparing for a possible bird flu pandemic; boosting global free-trade talks and tackling sticky trade issues with China; promoting democracy; and keeping U.S. partners on track in ridding North Korea of its nuclear weapons programs. 
White House officials predicted that Bush’s visits to Japan, South Korea, China and Mongolia would produce few tangible breakthroughs. Analysts said that was appropriate, since the trip’s value lies in countering a drift in the region away from the United States.
China is growing in economic and military might and in its global involvement, which is causing some to worry whether Beijing seeks to rival, or supplant, U.S. influence. Meanwhile, a new collection of Asian states known as the East Asia Summit added participation by Australia, New Zealand and India, but still excludes Washington.
“It is good for the president to show up in Asia and say, `We care about Asia,’ because that is in doubt in the region,” said Ed Lincoln, senior fellow in Asia and Economic Studies at the Council on Foreign Relations.
White House aides had looked to a November packed with foreign travel as a way to help divert attention from Bush’s domestic troubles and slumping poll numbers.
It hasn’t worked out that way.
Democrats have seized on the indictment of Vice President Dick Cheney’s top aide in the CIA leak case to raise anew the fact that Bush’s main justification for the 2003 Iraq invasion, that Saddam Hussein had weapons of mass destruction, was wrong.
Continuing a counterattack that began Friday with a sharp rebuke to his critics, the president was pausing at Elmendorf Air Force Base in Alaska en route to Asia on Monday to promote his war-on-terror and Iraq policies.
Even while abroad lately, Bush hasn’t always fared well. Just over a week ago, he saw his desires for a Western Hemisphere-wide free-trade pact dashed at a Latin American summit marked by violent anti-American protests.
The main reason for Bush’s Asia trip is the annual summit of Pacific Rim leaders at the Asia-Pacific Economic Cooperation forum, held this year in Busan, South Korea.
The president will press the 20 other APEC leaders to pay more attention to weapons proliferation, put early warning and information-sharing systems in place in case of bird flu outbreaks and add momentum to December talks on a new global trade pact.
On the sidelines, Bush will showcase his support for democratic reforms by meeting with the leaders of Malaysia and Indonesia — two moderate Muslim-majority nations that have turned to representative governments in recent years.
His first Asia stop is Kyoto, Japan, where on Tuesday he will give what aides bill as the speech of the week on the power of democracy, not only to better individual lives but contribute to the long-term prosperity of nations.
The remarks will hold up such nations as Japan, Australia and South Korea as models because of their strong democratic traditions and willingness to help establish democracy in places like Afghanistan and Iraq.
But the speech is clearly aimed, at least in part, at communist China. “There’s going to be a lot of change in Chinese society and these are things that will help the Chinese move forward,” Mike Green, the National Security Council’s senior director for Asia, said in describing the message.
But Lincoln, the Council on Foreign Relations analyst, said it could be a big mistake for Bush to open an Asian journey with a speech that could unnecessarily provoke Beijing, especially when the centerpiece of the week is a state visit to China.

TITLE: U.K. May Pull Out From Iraq
PUBLISHER: Reuters
TEXT: LONDON — Britain could start pulling its soldiers out of Iraq next year if local forces are strong enough to keep the peace, British Prime Minister Tony Blair said on Monday. 
“I think it’s entirely reasonable to talk about the possibility of withdrawal of troops next year but it’s got to be always conditioned by the fact that we withdraw when the job is done,” Blair told reporters after talks with Iraqi Vice President Adel Abdul Mahdi.
Blair said there was no question of British troops quitting Iraq before local security services could act on their own but said the buildup of Iraqi forces was gathering pace.
“This is a completely different situation from a year ago,” he said at his Downing Street residence. “As that progresses, obviously the need for the multinational force reduces...but it’s a question of that happening when the job is done.
“It’s always been part of our plan to withdraw when the Iraqis are capable of looking after their own security.”
Signs of a developing timetable are growing. Iraqi President Jalal Talabani said on Sunday that British troops could leave the country within a year because Iraqi security forces would be ready to replace them.
Mahdi, talking to reporters with Blair, echoed that assessment. “I think we will see a process next year for a certain, partial withdrawal,” he said.
Britain has about 8,000 soldiers in Iraq, stationed mainly in the south. The area had been more stable than some other regions but violence has risen there in the last few months.
British Defense Secretary John Reid said any plans to hand over to Iraqi security forces would be dictated by events on the ground and continued attacks by insurgents would only delay the process.
But he, too, expected some British troops to return home next year.
“We are not saying that everyone will be out by the end of 2006 but we are saying that this process...is going relatively well and in the course of the next year we could well see the handover to Iraqi forces at certain places in Iraq, including in our own area,” Reid told BBC Radio.
Iraqis are working on training their own soldiers and police to take full control of security of their country and fight a Sunni Arab insurgency that has killed thousands of people since 2003’s U.S.-led invasion.

TITLE: IN BRIEF
TEXT: Norway Landslide 
OSLO, Norway (AP) — Heavy rainfall in western Norway triggered landslides on Monday, including one that swept away seven people working on a house, police said. Rescuers were searching for one missing worker, while the other six were found with minor injuries in Bergen, the main city on Norway’s west coast. 
“It is a bit chaotic at the scene, because the house is completely covered and has been moved. The rescue crews are now using digging machines to get down to the place where the seventh person is believed to be,” said Bergen police spokesman Trygve Hillestad.
The rains caused problems all over western Norway, stopping trains on the Bergen Line, closing roads and forcing the evacuation of at least 13 other houses threatened by landslides.

‘Steel Curtain’ Strikes
BAGHDAD, Iraq (AP) — U.S. and Iraqi troops launched a dawn assault Monday on another town near the Syrian border and killed 37 insurgents, a U.S. statement said, while the interior ministry reported that a car bomb detonated outside a gate leading into the fortified Green Zone in central Baghdad, killing three foreigners. 
Operation Steel Curtain entered a new phase when U.S. and Iraqi forces moved into the Euphrates River valley town of Obeidi, about 185 miles west of Baghdad.
“Five targets were struck by coalition air strikes resulting in an estimated 37 insurgents killed. 
The insurgents were engaging coalition forces with small arms fire at the time of the strikes,” the statement said. 
“Preliminary reports indicate an estimated 25 insurgents have already been captured and are currently detained.”

Madonna Tops Charts
LONDON (Reuters) — Queen of pop Madonna recorded her 11th British number one in the music charts on Sunday with her new single “Hung Up” which samples heavily from the 1979 Abba hit “Gimme Gimme Gimme.”
Madonna, 47, who had her first number one in the U.K. in 1985, released the single from her new album “Confessions on a Dancefloor.”
Her success knocked Irish boyband Westlife into second place with their ballad “You Raise Me Up” which had previously spent two weeks in the top spot, according to the Official UK Charts Company.

Canada Political Crisis
OTTAWA, Canada (AP) — Canada’s opposition leaders called on Prime Minister Paul Martin on Sunday to agree to a January election or face a non-confidence motion that could topple his government next week and bring January elections against his will.
Conservative Party leader Stephen Harper said his party would join with the New Democrats and Bloc Quebecois parties to bring down the government if Martin does not agree to call the election.
Under their demands, it appears that a January election is all but certain, though Martin has yet to say whether he will try and survive the no-confidence vote and keep his government in power through February.

Man ‘Beat HIV Unaided’
LONDON (Reuters) — A British man claimed on Sunday to be the first person to become clear of the HIV virus, which can lead to AIDS, after earlier testing positive for it.
If true, the case of 25-year-old Andrew Stimpson — reported in two British newspapers — could reveal more about the virus and possibly even provide a breakthrough in the search for a cure for HIV/AIDS.
A spokeswoman for Chelsea and Westminster Heathcare Trust in London confirmed that one of its patients had tested negative for HIV about 14 months after testing positive in May 2002.
“He did test positive and then later negative, but in terms of curing himself, we don’t know because he hasn’t been back for further tests,” said the spokeswoman.
“We very much want him to return so we can try to find out what exactly has happened,” she added.
There is no known cure for HIV/AIDS, responsible for the deaths of millions of people and especially virulent in parts of Africa. Some experts say there are nearly 35 million sufferers around the world.
Scientists have cited anecdotal accounts from Africa of people shaking off HIV but say they have never seen firm evidence.

TITLE: German Parties Thrash Out Deal to Form Government
PUBLISHER: Reuters
TEXT: KARLSRUHE/BERLIN — Germany’s Conservatives and Social Democrats said they were confident a coalition deal would be endorsed at party congresses on Monday despite rising criticism the agreement is bad for the economy. 
After a month of negotiations, the longtime political rivals announced on Friday they had sealed a pact which foresees a sudden and dramatic consolidation of the German budget in 2007, driven by a rise in sales tax.
The deal has drawn condemnation from industry, which fears the higher taxes will hit German consumers, and from the new opposition parties, who are painting it as a betrayal of the promises the ruling partners made during the election campaign.
Gripes have also come from within the ranks of the coalition parties themselves, particularly conservatives who feel their leader Angela Merkel gave the SPD too much in her quest to become chancellor.
Although Merkel did exact some modest concessions to loosen job protection measures and cut payroll costs — moves she says are key to encourage German firms to hire — her party has had to swallow a rise in taxes for top earners and had to abandon its hopes for a shake-up of rules governing wage negotiations.
“We reject this coalition deal,” said Josef Schlarmann, who heads an association within Merkel’s conservatives that represents small and medium-sized businesses.
Still, the dissenting voices are not expected to stand in the way of the deal being approved at meetings on Monday of the Christian Democrats (CDU) in Berlin, the Bavaria-based Christian Social Union (CSU) in Munich and the SPD in Karlsruhe.
“I hope, I am quite confident that we will get approval for the coalition agreement from all three parties,” Ronald Pofalla, deputy head of the conservatives in parliament and a close ally of Merkel, told German public television on Monday morning.
Sigmar Gabriel, an SPD politician who is due to become environment minister in the new government, said he was not nervous about the votes.
“I think there will be broad support because it’s clear to everyone that Germany has a few problems that we can only solve together,” he said, also speaking on a public television broadcast.

TITLE: Gritty Mauresmo Wins First Major Title
PUBLISHER: The Associated Press
TEXT: LOS ANGELES, California — Amelie Mauresmo always heard the whispers that she caved at key moments in a match and couldn’t string together enough victories to win a major title. 
Mauresmo hushed such talk with a gutty 5-7 7-6 6-4 victory over Mary Pierce in the WTA Championships final Sunday. She earned $1 million. 
Once ranked No. 1 in the world, Mauresmo has always been close and consistent at the Grand Slam events. She was runner-up at the 1999 Australian Open, is a three-time Wimbledon semifinalist and reached the U.S. Open semis once. 
“You have moments that you really believe this is going to happen, and you have some other moments when your mind is a little bit down, where you just think to yourself, ‘I’m never going to do it,”’ she said. 
Some of those moments came Sunday. 
Mauresmo double-faulted to trail 0-40 in the final game, but rallied on five consecutive errors by Pierce in the first all-French final of the season-ending tournament. 
“I really think that’s a huge step for me,” said Mauresmo, who won her fourth title of the year. “I don’t know where it’s going to take me, but it is a step. You know that it’s an important moment.” 
When Pierce’s cross-court backhand went wide, Mauresmo fell to her knees and clapped her hands to her head as the announced crowd of 9,412 erupted in applause. She got up and met Pierce on the sideline, where they embraced, Pierce whispered in her ear and kissed Mauresmo’s cheek. 
“It’s just a great reward for me to be able to hold the trophy,” she said. “It’s the biggest win, so it has to be ranked as the best emotional moment for me. I’m just proud of what I did. I kept fighting.” 
For more than three hours, the women jerked each other from side to side, punctuated by Mauresmo’s changing speeds and Pierce’s artful drop shots. 
Just when Pierce thought she’d hit a ball out of reach, Mauresmo would track it down and smack a winner. 
“Hopefully, I won’t be having nightmares,” Pierce said. 
She got broken to open the third set, then she won three straight games to take a 3-2 lead. Mauresmo won two of the next three games for 4-all. 
“She was very motivated out there. I could see it, she wanted it,” Pierce said.

TITLE: Japan Makes Pitch to Host ‘Global’ Rugby World Cup
PUBLISHER: Reuters
TEXT: TOKYO — The people who have run rugby since it turned professional in 1995 have given constant lip service to expanding the game’s borders and awarding the 2011 World Cup to Japan would prove they mean business. 
That is the message of the Japanese bid organisers and they have mustered an impressive list of international backers including former World Cup winners John Kirwan, Nick Farr-Jones and Martin Johnson. 
They accept the safe option would be to go for either South Africa or New Zealand, both established rugby countries who have hosted or co-hosted the event before and have lifted the trophy on home soil. 
Players, officials, fans and media would certainly gain a satisfactory tournament in either South Africa or New Zealand, where numerous news conferences would talk about the need to help the game’s second-tier nations and spread the rugby gospel. 
If those making the 2011 Cup decision in Dublin on Thursday were to go for the bold option, they could pave the way to globalisation. 
“Instead of a sport played seriously in only a handful of countries, it could gain a foothold in Asia, home to 60 percent of the world’s population,” said Koji Tokumasu, chief executive of the Japanese RFU. 
That principle is the bedrock of Japan’s bid but, just in case the romantic argument does not sway the hard-nosed voters in Dublin, there is also a solid practical base. 
“We have nine superb grounds and bullet trains to take supporters from one major city to another,” said Tokumasu. 
“Accommodation will be plentiful and affordable, the Japanese government has a law to prevent price-hiking, while the backing of world-famous corporations such as Toshiba and Toyota will enable us to generate huge commercial revenue.” 
Having successfully co-hosted the 2002 soccer World Cup with South Korea as well as several other major international events such as the athletics world championships, there is no question that Japan could organise a smoothly-run tournament. 
Also in its favour is that it would present a level playing field for the tournament, with no home advantage for any of the countries likely to be contesting the semi-finals and finals. 
In contrast, Japan’s failure to make any significant impact on the game — they have won just one match in their five World Cup appearances — is seen by the bid’s critics as a weakness. 
Organisers, however, say awarding them the 2011 tournament would be the catalyst for the Japanese RFU to push on and develop the national team. 
While it cannot compete with its two rivals in terms of rugby history, Japan can certainly punch its weight when it comes to grassroots participation. 
Its total of 126,000 registered players is the fifth highest in the world while its tally of 4,050 clubs dwarfs most rivals. 
Japan’s bid has massive in-principle support from government and, though local laws forbid the government guaranteeing a funding return, the involvement of several high-profile companies means there is little risk of a financial shortfall.

TITLE: Sports Watch
TEXT: Federer Returns to Win
SHANGHAI (Reuters) — Roger Federer made hard work of the start of his Masters Cup defence on Sunday before recovering to squeeze past Argentine David Nalbandian 6-3 2-6 6-4. 
The runaway world number one is chasing a third consecutive finale title — a feat last achieved by Ivan Lendl in 1985-87. 
In Sunday’s second Red Group match, Croatia’s Ivan Ljubicic beat another Argentine, Guillermo Coria, 6-2 6-3. 
Monday’s Gold Group matches will pit Andre Agassi against Nikolay Davydenko and Rafael Nadal against Gaston Gaudio. 

Russian Sets Record
DOHA, Qatar (AP) — Zarema Kasayeva of Russia set a world record in the clean and jerk Sunday in the women’s 152-pound category at the World Weightlifting Championships. 
The 18-year-old Russian hoisted 346 pounds in her final attempt after Liu Haixia of China lifted 340 in her third attempt to eclipse the previous record of 337 set by Liu Chunhong at the 2004 Athens Olympics. 
Liu Haixia’s record lasted only a minute until Kasaeva stepped up to lift. 
After a 260 snatch. Kasayeva won the gold with a total of 606, equaling the world record set by Liu Chunhong at the Athens Olympics. 
On Saturday, Pawina Thongsuk of Thailand broke world records in the snatch, clean and jerk and overall categories of the women’s 139-pound division.

Hackett Needs Surgery
SYDNEY (Reuters) — Australia’s Olympic and world swimming champion Grant Hackett has pulled out of next year’s Commonwealth Games to undergo immediate surgery. 
Hackett told a news conference in Melbourne on Monday he had agreed to an operation this week to repair torn cartilage in his right shoulder. 
Hackett, unrivalled as the world’s best long-distance swimmer, said he was disappointed he would miss the Commonwealth Games in March for what is a relatively minor operation but said it was essential to his long-term plans. 
“I want to ensure my longevity in the sport and I’ve still got a lot of things that I want to achieve in my career,” he said.

U.S. Picks Liukin
INDIANAPOLIS, Indiana (AP) — After dominating gymnastics’ junior ranks, U.S. champion Nastia Liukin finally gets to see how she matches up against the best in the world. 
The 16-year-old was chosen for her first world championships team, along with two-time world gold medalist Chellsie Memmel, Alicia Sacramone and Jana Bieger. The world championships, which will have all-around and individual event finals, are held between Nov. 22-27 in Melbourne, Australia. 
Liukin was touted as gymnastics’ next big thing even before she began routing the junior ranks. 
Her father won two gold medals for the Soviet Union at the 1988 Olympics, her mother was the world rhythmic champion the year before. At her first U.S. Gymnastics Championships as a senior, Liukin won the all-around title, as well as golds on uneven bars and balance beam.