SOURCE: The St. Petersburg Times
DATE: Issue #1139 (5), Tuesday, January 24, 2006
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TITLE: Moscow Accuses British Diplomats of Spying
AUTHOR: By Henry Meyer
PUBLISHER: The Associated Press
TEXT: MOSCOW — Russia’s main intelligence agency said Monday that it had uncovered spying by four British diplomats and accused them of channeling funds to non-governmental organizations, including one of the country’s best-known human rights watchdogs. 
The announcement came a day after Russian state television broadcast footage showing four British embassy staff allegedly using electronic equipment concealed in a rock in a Moscow square to receive intelligence from Russian agents. 
The head of the Foreign Security Service or FSB, the main successor agency to the Soviet-era KGB, last year accused U.S. and other foreign intelligence services of using NGOs to spy on Russia and foment political upheaval in ex-Soviet republics. 
The agency’s spokesman, Sergei Ignatchenko, said the situation would be resolved “at a political level,” the RIA-Novosti news agency reported, in an apparent indication that the Russian government could expel them. 
Officials at the British Embassy in Moscow and Foreign Office in London declined to comment. Prime Minster Tony Blair told a news conference that he had only heard about Russian spy allegations in media reports and he declined further comment. 
In 1996, Russia and Britain engaged in a tit-for-tat spying row launched by Moscow, each expelling four diplomats. 
Among the diplomats named in the television broadcast were Marc Doe and Paul Crompton, both of the embassy’s political section. 
Rossiya also showed copies of documents allegedly showing that Britain had transferred money to non-governmental organizations working in Russia. It described Doe as the main contact point for NGOs. 
“This is the first time we literally caught them red-handed in the process of contacting their agents here and received evidence that they finance a number of non-governmental organizations,” the ITAR-Tass news agency quoted Ignatchenko as saying. 
In addition to a chill in Russian-British relations, the espionage announcement reflected a toughening Russian attitude toward NGOs. Earlier this year, President Vladimir Putin signed a law severely restricting NGOs’ financing and activities. 
Moscow has been highly suspicious of groups that promote human rights and democracy since opposition leaders came to power in uprisings in Georgia, Ukraine and Kyrgyzstan over the past several years. 
Russian officials have accused Western nations of encouraging regime change in the former Soviet Union by financing NGOs. 
In a statement released following the Sunday broadcast, Britain’s Foreign Office rejected allegations that its dealings with Russian NGOs were improper. 
“It is well-known that the British government has financially supported projects implemented by Russian NGOs in the field of human rights and civil society. All our assistance is given openly and aims to support the development of a healthy civil society in Russia,” the statement said. 
Rossiya showed a document authorizing a transfer of $41,000last October to the Moscow Helsinki Group, a leading Russian human rights group that has been a persistent critic of President Vladimir Putin. 
The group’s head, Lyudmila Alexeyeva, who was a Soviet-era dissident, said the document was a fabrication because her organization had not received any funding from British sources since 2004. She accused the authorities of seeking a pretext to launch a crackdown on NGOs. 
“This is an attempt to smear a well-known group with allegations of involvement in espionage activity. They are preparing public opinion for a government move to close us down, which they can now do under the new law,” Alexeyeva told The Associated Press. 
“This will not stop our activities, though. I managed to keep on working in Soviet times,” she said. 
Fyodor Lukyanov, editor of the magazine Russia in Global Affairs, predicted that the spy scandal would increase tensions between Moscow and the West as Russia chairs the Group of Eight this year. 
“This will provoke a very negative commentary in the West. It will only worsen the picture since Russia already started its G8 presidency on a very inauspicious note,” Lukyanov told the Associated Press, alluding to its cutoff of gas to Ukraine over the New Year holiday, which resulted in brief shortages for other European countries as well.

TITLE: Putin Gives Public Chamber a Warning
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — At the Public Chamber’s first full session on Sunday, President Vladimir Putin warned the 126 members that they would face an uphill struggle with state officials reluctant to accept supervision from the new body.
Putin also raised issues that the chamber will have to address, including the new NGO law and efforts to confront ethnic hatred. 
The chamber unanimously elected as its head Yevgeny Velikhov, president of the Kurchatov nuclear research institute, and as its deputy head Sergei Katyrin, the vice president of the Russian Chamber of Commerce and Industry.
The session brought an eclectic group of people — including pop diva Alla Pugachyova, billionaire Mikhail Fridman, academic luminaries, religious leaders and lesser-known members from the regions — together in the gold-and-white St. George Hall in the Kremlin.
Before the session began, Kremlin-connected spin doctor and chamber member Sergei Markov chatted with presidential administration deputy chief Vladislav Surkov, who often nodded in agreement.
Putin proposed the chamber as a bridge between the state and civil society as he abolished gubernatorial elections after the Beslan attack in 2004. The chamber can make nonbinding recommendations on bills, supervise officials’ compliance with the law and offer opinions on the nation’s current affairs. Human rights groups and liberal politicians have called the body little more than window-dressing.
Putin said in a speech that the chamber would encounter resistance from bureaucrats to any oversight and advice. “Officials in any country are more or less a close-knit corporation,” he said. “You will run into difficulties. You aren’t welcome everywhere.”
Putin set a number of priorities for the chamber, starting with the fight against ethnic hatred. He said a politician’s career must end if he promotes ethnic or religious intolerance.
“Any manifestations of ethnic or religious discord, any calls for hatred and intolerance, must become an end of their authors’ public and political career in Russia,” he said.
Putin urged the chamber to help create conditions that would leave no place for ethnic hatred. “I very much count on your understanding and support in this aspect of your task,” he said.
A young man stabbed several people in an apparent anti-Semitic attack in a Moscow synagogue earlier this month.
Putin said the chamber must also oversee how officials implement a contentious law on nongovernmental organizations that NGOs have complained is too restrictive. “The Public Chamber could assume the role of an expert in resolving any contentions in this area,” he said. The law comes into effect April 10.
The chamber may also recommend state funding for public initiatives, Putin said. The federal budget earmarks 500 million rubles ($18 million) to support NGO projects in 2006, he said.
In addition, Putin asked the chamber to supervise “huge” spending in his social plan to plow $4.6 billion into health care, education, agriculture and housing this year and next.
The chamber has the power to address freedom of speech, and Putin said the chamber should make sure that news media are unbiased and independent.
The chamber should engage in public discussions as much as possible so “citizens understand how the authorities in the country operate in practice and don’t feel detached from the decisions that authorities make.”
Putin said he hoped that the chamber would raise the influence of citizens and civic institutions. The chamber should also pay attention to developing charity activity in Russia, he said.
Lawyer Anatoly Kucherena gave a speech after Putin’s in which he also braced his colleagues for the challenge ahead. “We first of all must believe in ourselves,” he said. “We will be regarded as people representing the interests of society. It’s important not to betray its trust.”
Kucherena said the chamber could demand a revision of the NGO law if “we are convinced that the this law hinders the development of civil society.”
Renowned pediatrician Leonid Roshal, whom analysts named as one of the few independent voices in the chamber, said in a speech that the quick passage of the law, without taking in the opinion of the full chamber, was the State Duma’s “mistake.”
Roshal said politicians who stoked ethnic hatred should be prosecuted because it could lead to Russia’s disintegration, which is what “many in the West want and may be financing.”
At the session, the chamber formed 17 commissions. Billionaire Vladimir Potanin was elected head of the commission for charity development; Kucherena head of the commission for supervision of law enforcement agencies; Roshal head of the health care commission; and Moskovsky Komsomolets editor Pavel Gusev head of the commission for freedom of speech.
Potanin told reporters that he would begin by analyzing laws that regulate charities and would then formulate suggestions that “would allow benefactors to commit acts of charity with greater comfort and dignity.”
Pugachyova said she would focus on social such as women and family, rather than cultural issues. She said pensions should be at least 15,000 rubles and named prison reform as a priority. With a smile, she added that she was referring not only to Mikhail Khodorkovsky when she spoke about the conditions in which prisoners live.

TITLE: Europe Seeks Alternative To Russian Gas
AUTHOR: By Margaret Orgill
PUBLISHER: Reuters
TEXT: LONDON — European gas importers scrambled on Monday to find alternative ways of powering industry as sharp cuts in Russian supplies dragged on into a second week. 
Europe is at the mercy of Russia which supplies a quarter of its gas and needs to agree a common energy policy to counterbalance Russian gas giant Gazprom, European Trade Commissioner Peter Mandelson said. 
“I think this has very major strategic implications for Europe. Russia has created a state monopoly in gas which supplies Europe with a huge proportion of our gas, and therefore our energy supply in Europe,” he told France’s BFM radio. 
“What this means is Europe has to arrive at a common approach...in order to match the strength of this monopoly.” 
Russia trimmed gas supply to Europe last week due to extreme winter weather at home, with deliveries to some countries falling to as much as a quarter below volumes requested. 
On Monday, Gazprom said Ukraine was using more Russian gas than agreed which was hitting onward shipments to Europe. 
The Netherlands said it was exporting as much gas as possible to meet soaring consumption as the cold snap deepened across the continent. 
But some industrial gas users with the capability to do so were switching from gas to fuel oil. As a result, European fuel oil prices have risen on speculation of higher demand. 
The curb is the second in Russian gas exports to Europe in a month, highlighting the risks of relying on one major supplier. In early January, deliveries by Gazprom were briefly reduced due to a dispute with Ukraine. 
Germany, France, Belgium and Italy were importing a maximum amount of Dutch gas under existing contracts and had not requested additional supplies so far, said Dutch dominant gas company Gasunie Trade & Supply. 
“They are balancing between [their)]own reserves ... and taking as much as possible of Dutch gas under their contracts but there is nothing extra on top of that,” a spokesman said. 
The Netherlands, which lies on western Europe’s second biggest gas reserves after Norway, covers winter peak demand in Belgium, northeast France and part of western Germany. 
Italy said deliveries of Russian gas were expected to be 5.4 percent below demand on Monday, and the government has drafted a bill to allow utilities to use more fuel oil for electricity. 
But Eastern Europe remained the worst affected by the drop in Russian gas deliveries, with Poland reducing supplies at the weekend to industrial users while large consumers in Hungary switched to oil to save gas. 
“Natural gas imports continue to be 75-80 percent of the required quantity,” Foldgazszallito Rt, the wholly-owned gas transport subsidiary of Hungarian oil and gas group MOL said on Monday. 
The Hungarian economy ministry said it would be prepared to switch three power stations to oil from gas if consumption hits capacity limits. 
Czech distributor RWE Transgas said it had no problems with Russian supplies. 
But Russian gas exports to Croatia were down five percent on Monday, an official at state firm INA’s gas arm Naftaplin said. 
“Despite that, the supply system is stable, there is enough reserve gas in storage to get us through a few very cold days with no problems,” the official said. 
Supplies to Bosnia were still reduced by 25 percent and all major consumers have switched to alternative energy sources, such as heavy fuel oil mazut.

TITLE: Iran to Send Negotiator To Moscow
AUTHOR: By Mike Eckel
PUBLISHER: The Associated Press
TEXT: MOSCOW — Iran’s top nuclear negotiator will travel to Moscow on Tuesday for high-level talks regarding the country’s nuclear program, a Russian official said Monday as Foreign Minister Sergey Lavrov encouraged Tehran to adopt a position that would help ease tensions. 
“We count on discussing with you the so-called nuclear problem, around which the situation is currently being heightened,” Lavrov said at the start of a meeting with Deputy Iranian Foreign Minister Mehdi Safari. “We hope that our Iranian friends will choose a position that helps to ease tension and renew negotiations.” 
Iran’s top negotiator, Ali Larijani, will meet in Moscow with top Russian officials, including Russia’s Security Council head Igor Ivanov, the council’s press service said. Ivanov visited Iran last year. 
Negotiations have intensified recently surrounding a Russian proposal to have Iran’s uranium enriched in Russia and then returned to Iran for use in the country’s reactors. The proposal is aimed at overcoming concerns that Iran could enrich its own uranium to higher levels for use in nuclear weapons rather than for power production. 
Russia has close ties with Tehran and is building Iran’s first nuclear power reactor, but has been moving closer to the Western position on Iran and is reluctant to let the issue cause a major rift in its relations with the United States and Europe. In his meeting with Safari, Lavrov stressed the interests Russia and Iran shared. 
“We have coinciding interests in supporting and strengthening regional stability, whether it’s the Middle East situation, Iraq, Afghanistan, and including the problem of narcotics and terrorism,” Lavrov was quoted as saying by the RIA-Novosti news agency. 
Safari in turn said Tehran and Moscow “support dialogue on the nuclear problem,” the ITAR-Tass news agency reported. 
Noting Ivanov’s visit to Iran, Safari said, “We hope to see other visits at a high level.” 
European Union foreign policy chief Javier Solana said last week that Russia had proposed a delay in confronting Iran at the UN Security Council, suggesting that the council first hold less formal discussions instead of consideration based on referral by the International Atomic Energy Agency, the UN’s nuclear watchdog. 
The head of Russia’s atomic energy agency, Sergei Kiriyenko, has said Iran is ready for detailed discussions on a proposal to conduct Iran’s uranium enrichment in Russia. That idea is backed by the U.S. and Europeans as a way out of the deadlock. 
Larijani has described the offer as a good basis for negotiations, and Lavrov said last week that further talks on the proposal were expected in mid-February. 
But pressure on Iran is rising. The IAEA’s board of governors will meet Feb. 2 to discuss whether to refer Iran to the Security Council — a move that could result in the imposition of sanctions — after Iran broke UN seals at a uranium enrichment plant and said it was resuming nuclear research.

TITLE: Fifty Killed by Cold, Number of Fires Up
PUBLISHER: Combined Reports
TEXT: The bitter cold seizing Russia held its grip into a second week Monday, and severe frost spread into much of Europe. More than 50 people have been reported killed by the cold wave in Russia, and scores of victims were recorded elsewhere in Europe over the weekend. 
Amid growing demands on heating and electrical systems, many Russian communities suffered breakdowns. The national electricity grid ordered reduced industrial consumption in Moscow to ensure adequate power for homes and hospitals. 
As the cold snap continues, 44 cases of frostbite were recorded over the weekend, with another 34 people being admitted to hospital suffering from over-exposure, the St. Petersburg medical press-center reported on Monday. 
Since temperatures dropped below minus 20 deg. C last week, over 200 people in the city have been hospitalized as a result of the freezing weather.
The low temperatures have also led to a sharp increase in the number of fires in the city. Over the weekend alone, 15 people, including three children, were killed in fires. The average daily number of fires has doubled since last Tuesday, with a total of nearly 400 in the past week according to the St. Petersburg Fire-Fighting Inspectorate.  
“We have been working in this horrendous cold for a week now, and what’s happening is beyond human understanding,” Leonid Belyayev, chief state fire inspector, told reporters at a new conference at the Interfax news agency on Monday. “The bulk of these fires break out as a result of the misuse of electric heaters and the overloading of electrics systems.”
Moscow’s health directorate said 27 people had frozen to death in the Russian capital since the cold wave hit last week. The Russian Health Ministry could not be reached for a nationwide tally of cold deaths, but figures compiled from news reports show at least 53 people dying from the cold. 
In neighboring Ukraine, 24 people died of the cold on Sunday alone, that country’s Health Ministry said. Elsewhere in Europe, seven people were reported killed by the cold in the small country of Estonia where temperatures plunged to minus 30 deg. C; officials in Moldova and the Czech Republic each reported three deaths, and two were reported in Germany and in Romania. 
The cold has severely strained Russia’s crumbling infrastructure. Electricity use has surged to record levels as towns and cities struggle to keep indoor temperatures up, and Russians turn to supplemental heating sources including electric radiators. 
Governor Valentina Matviyenko on Saturday asked St. Petersburgers to limit their use of electric energy.
“With extremely low temperatures, the city’s [electricity] network is under enormous pressure, especially in the first half of the day, between 8 a.m. and 1 p.m., and in the evening from 5 p.m. to 10 p.m.,” Matviyenko said during a news conference at Smolny. “In these circumstances, it would be reasonable not to switch on every electric appliance in the house at once.”

(SPT, AP)

TITLE: Journalist Attacked
PUBLISHER: The Associated Press
TEXT: MOSCOW — A Moscow-based correspondent for the Arab satellite TV station al-Jazeera said Monday he was attacked and beaten. 
Abdel Munem, 39, who also goes by the name Salaam al-Obaidi, said he was going shopping for groceries after work at around 6 p.m. Sunday when a Russian man attacked him, punching him in the chest and yelling racial slurs. 
The man then got in his car, drove it toward Munem, then got out and hit him in the face, bruising him and breaking a tooth, he said. 
Munem, a native of Iraq, said nothing was stolen from him. 
Moscow Prosecutor’s Office spokes-woman Svetlana Petrenko told The Associated Press that Munem had been attacked because of a parking dispute. 
An investigation into inflicting bodily harm has been opened, she said. 
Amro Abd Il Khamid, the bureau chief of al-Jazeera’s Moscow office, said he was “perplexed” with the prosecutor’s statement, insisting that the attack was “provocative and deliberate.” 
Munem said it was the second time he has been attacked in Moscow — the first time occurring in 1995 when three men yelling racial slurs assaulted him. 
Attacks on foreigners and dark-skinned immigrants, particularly from ex-Soviet Central Asia and the Caucasus, have increased markedly in Russia in recent years. 
Rights groups contend racists in Russia are emboldened by the authorities’ mild prosecution of hate crimes.

TITLE: Industry Told to Consume Less as Cold Affects Energy
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: St. Petersburg’s failing infrastructure combined with intensely cold weather to force local production companies to decrease power consumption on Saturday. After power consumption exceeded record levels last week, Unified Energy Systems decreased the electricity supply to the city by five percent.
Local authorities were quick to pass on the costs of under-supply to local producers.
“Because of extremely low temperatures we had to limit the consumption of electricity and gas, primarily for industry,” Interfax quoted city governor Valentina Matviyenko as saying.
The action has been taken in order to “avoid power failures in residential and social sectors,” Matviyenko said Saturday.
Technical director of UES Boris Vainzikher indicated the northern district from Severnaya TETs and the southern Kupchino district as the first to be put under restrictions, Interfax reported.
“Notification of the limits have already been sent to consumers,” Vainzikher said.
Baltika brewery and Leningradsky Metal Plant (part of Power Machines holding) among others, received notice, but their managers regarded the situation with optimism.
Alexei Kedrin, head of PR department at Baltika brewery, said that lower consumption of energy would not affect the company’s performance.
“65 percent of the brewery’s demand is satisfied by our own gas turbine power plant. Consumption of electricity supplied by the city decreased by between 15 percent and 20 percent,” Kedrin said.
“Decreasing energy levels would not critically affect the production process since in winter consumption of beer decreases in line with temperature and our warehouses are well stocked,” Kedrin said.
The official reply from the Power Machines press service stated that “because of extreme temperatures and on the order of city authorities all subsidiaries of Power Machines in St. Petersburg limited their consumption of electricity at peak hours — from 9 a.m. till 12 and from 6 p.m. till 21 p.m.”
“The work schedule changed accordingly. All production units worked from 12 till 6 p.m. without a meal break. Since these changes are short-term they would not affect the company’s production plans and its obligations to clients,” the press service said.
Experts agreed that in the short term producers will find ways to compensate for working in conditions of limited energy supply but they stressed the importance of improving the infrastructure and developing energy saving technologies.
“The practice of disconnecting industrial plants for a lack of energy is normal operating procedure, even in Western countries. For this, those plants that participate get a discount on their regular consumption of electricity or heat,” said Gianguido Piani, a St. Petersburg-based energy specialist.
In Russia “a large part of the current problem is due to the extremely high level of energy consumption. This is not only due to the exceptional cold spell, but is in large part the consequence of the use of old and inefficient technologies,” Piani said.
As a remedy against difficulties with power supply Piani proposed a major upgrade in infrastructure with special attention to energy-efficient technologies.
“In Western countries a few utilities have even started to pay some of their customers to reduce energy demand. It follows strict commercial logic, when the financial returns on the savings are higher than the returns on increases in capacity,” Piani said.
Other steps should include changes in the way prices and tariffs are set as well as the provision of energy saving technologies by AO-energo utilities, Piani said.
Another analyst agreed. 
“So far local companies have not been in the habit of economizing on electricity and other sources of energy. Only a few have looked to save energy and increase efficiency in its use. The thing is not to consume less energy, the thing is to consume more efficiently,” said Maxim Titov, head of IFC Russia Sustainable Energy Finance Program.
According to Titov, very few local companies have their own sources of electricity, though many have boiler-houses with reserves of liquid fuel.
“In the short term, if strong frosts continue, the reliability of energy supply will depend mainly on the reliability of the supply of gas,” Titov said.
He also proposed energy efficient technologies “easily available and relatively cheap for both individual companies, for the city and for the whole country.”
Energy efficiency results in two positive effects, Titov said, decentralizing energy supply to particular consumers and decreasing demand for power in general.
“Most energy efficient projects have shorter pay-back periods than the construction of large power plants,” Titov said, suggesting the reinvestment of savings from short-term projects into longer-term energy saving technologies.

TITLE: Salaries Continue to Rise But No Longer in Dollars
AUTHOR: By Yevgenia Ivanova
PUBLISHER: Staff Writer
TEXT: Across the country salaries continue to rise but fewer are being denominated in U.S. dollars, according to Ernst & Young’s annual “Russia, Compensation & Benefits Survey,” in which 109 companies (both Russian and foreign) took part.
“Comparing the results against data from previous years we noticed a substantial increase in compensation levels virtually for all grades of employees, on average by not less than 10 to 12 percent,” Piotr Zimowski, one of the survey’s authors was quoted by a Jan. 13 press release as saying.
While salary increases were seen across many industries, positions in customer service, risk management, accounting, logistics and production have benefited more than others, the research found.
Although both Russian and multinational business expanded their operations across the country, significant regional differences in compensation levels remain.
Thus in Moscow, according to the survey, senior management (not including the top management) might receive more than $7000 a month, professionals earn $1834, and clerks are paid around $1060.  St. Petersburg’s salaries are generally 26 percent lower than Moscow’s, the survey revealed. 
The HR industry said they agreed with the survey’s results and that they had also seen a steady increase in Russian salaries.
St. Petersburg-based Alfa Personnel said that in their experience major increases in pay were taking place not only in production and other fields mentioned in the survey, but also in finance and managerial positions across various industries.
“To a large extent, this was caused by the growth in production and levels of investment, as well as high oil prices,” Andrei Davydov, managing partner at Alfa Personnel said in an emailed statement.
Marianna Slivnitskaya, the executive director of Begin group education and personnel research agency said, “salaries [in Russia] have grown indeed, even taking into consideration the level of inflation. With active development in many fields of business, labor market demand outstrips supply, and this is the major reason for salary growth.”
Apart from a rise in salaries, the survey indicates other trends in compensation. Performance related pay has become more and more popular. Annual bonuses continue to be the most popular form of variable compensation, but this time the performance of individuals, rather than by department or company, was mentioned by survey participants as the most favored basis for the calculation and provision of annual bonus payments.
The survey also showed a steady fall in the number of companies denominating their salaries in US dollars. Only 35 percent of companies said they denominated salaries across the board in foreign currency. This represents a decline of 17 percent compared to the results of last year’s survey.

TITLE: Small Firms Get Loan Boost
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Vneshtorgbank subsidiary VTB-24 will increase the volume of loans granted to small companies to up to $530 million by the end of the year, Sergei Suchkov, director of VTB-24’s retail department, said at a news conference Friday.
This will “exceed the current volume of loans the bank issued for small companies by nearly 2.5 times,” Interfax quoted him as saying.
VTB-24 has operated since Aug. 1 2004, when Vneshtorgbank acquired Guta-Bank in order to create a retail service bank. During that period about 3,000 borrowers took loans worth a total of $194.4 million, Suchkov said.
“From my experience the average loan given to small firms is between $100,000 and $150,000,” said Dmitry Skorkin, deputy director of the corporate department at Uniastrum Bank.
“Taking into account the planned growth in credit portfolio and credit repayment schedule VTB-24 would grant about 5,000 loans to small enterprises during 2006. That means issuing between four and five loans every month in each office,” Skorkin said. At the moment VTB-24 has about 100 offices across the country.
“This task is feasible, but considering the growing competition among banks it will demand considerable effort,” Skorkin said.
Skorkin saw the granting of loans for small companies as attractive business. “Banks are ‘growing’ clients for themselves. Lending to a small firm is the first step in attracting clients,” he said.
“Crediting small business entails higher risks than crediting medium and large-sized enterprises, which usually have an organized management structure and business operations as well as highly-qualified managers. However those risks diminish as banks issue relatively small loans to a large number of borrowers,” he said.
Over 50 percent of small companies’ owners who consider their business to be stable said they suffered from a lack of resources for development, according to a poll conducted by OPORA Rossii business association and VTsIOM last year.
Only 16.2 percent of respondents said they use bank loans to finance their business. Among the main obstacles to get a loan respondents indicated high interest rates, absence of sufficient collateral, bureaucracy and too short a period of credit.
“Bank credits are extremely important for small businesses,” said Roman Pastukhov, president of the St. Petersburg Entrepreneurial Union.
“However, so far many banks have only declared their intention to offer affordable loans. In reality the situation was quite the opposite. Over 100 companies from our union applied for a loan to Sberbank last year but only several of them succeeded,” he said.
Last week VTB-24 signed an agreement with the Agency for Credit Securities owned by Leningrad Oblast authorities to use the agency’s bails as collateral when granting loans to small companies. Agency bails would cover up to 50 percent of the loan. A loan of up to $106,000 would be granted for up to a period of five years.
With risks shared between bank and state bodies the scheme allows small enterprises based in Leningrad Oblast which do not have sufficient collateral to apply, Suchkov said.

TITLE: Russia Change Of Mind On G8 Invitees
PUBLISHER: Reuters
TEXT: MOSCOW — Russia said on Monday it had invited India, China, Brazil and South Africa to attend a meeting of G8 finance ministers in Moscow next month after having previously said they would probably be left out.
Russia this year holds the rotating presidency of the elite forum, which has eight members, though some developing nations have been present as observers at recent G8 summits.
Finance Minister Alexei Kudrin said there would be talks with officials from the four emerging powers on the fringes of the G8 finance ministers’ meeting on Feb. 11.
“We will discuss the role of (these countries) in the world economy and the results of the recent discussions on trade (at the World Trade Organisation summit) in Hong Kong,” Itar-Tass news agency quoted Kudrin as saying.
“We reached the conclusion that such a meeting would be useful,” he said.
In November, Igor Shuvalov, Russia’s key official for organising G8 events this year, had said Russia favoured not including the four nations in G8 events, though he said at the time a final decision had not been taken.
Russia believed a more useful purpose would be served by inviting the heads of multilateral organisations such as United Nations agencies, Shuvalov had said. Besides Russia, the G8 comprises the United States, Japan, Germany, France, Britain, Italy and Canada.

TITLE: Kiev Delays Signing Gas Deal
AUTHOR: By Ron Popeski
PUBLISHER: Reuters
TEXT: KIEV — Ukraine has delayed signing a new contract to buy Russian gas, pending final agreement of terms including pricing, because of the Ukrainian parliament’s attempts to scuttle the deal, the country’s prime minister said on Saturday.
Prime Minister Yuriy Yekhanurov said Ukraine would aim to sign the deal with Russian gas giant Gazprom next Wednesday. Agreed to on Jan. 4 following a standoff with Moscow that saw supplies suspended, the accord will almost double the price of gas.
“Unfortunately, we were unable to get the documents ready. ... The first question is the price of gas: how prices are established and how long they are to remain in place,” Yekhanurov said in comments broadcast on Ukrainian television. He said the government also needed to determine whether ministers were in a position to sign the deal after being dismissed by parliament.
Clinched in the heat of a parliamentary election campaign, the gas contract was denounced as a betrayal of national interests by Ukrainian President Viktor Yushchenko’s rivals.
The parliament sacked the Cabinet within days, plunging Ukraine into constitutional deadlock, with Yushchenko insisting his government would remain in place until March’s election.
A further resolution this week demanded a new agreement and dismissed ministers and officials linked to the original deal.
“A legal opinion is needed on a lot of issues. When will this resolution be published, and what will it look like?” Yekhanurov said on Channel 5.
“At issue here is the competence of both sides. Who can sign the deal? Who isn’t empowered? Will there be consequences?”
Yushchenko has said nothing about the parliament’s latest move. An official in his administration said on Friday that the president would soon act within the constitution to resolve the situation.
The gas accord ended a disagreement between Moscow and Kiev that culminated in Gazprom briefly switching off supplies to Ukraine. The dispute also saw 80 percent of deliveries to Europe halted. Europe gets around one-quarter of its gas from Russia.
Investors have criticized Gazprom and its Ukrainian counterpart, Naftogaz Ukrainy, for using intermediary Rosukrenergo to supply gas, saying the group has a dubious structure. Yekhanurov acknowledged on Saturday that more explanation was needed on the structure and role of Rosukrenergo.
He also said Ukrainian Fuel and Energy Minister Ivan Plachkov, one of the officials dismissed by the parliament, would hold talks in Moscow on Sunday with Saparmurat Niyazov, the president of Turkmenistan.
Ukraine signed a separate deal just before New Year with Turkmenistan, its second gas supplier, to buy gas at $50 per 1,000 cubic meters.
 Naftogaz Ukrainy and Rosukrenergo failed to set up a joint venture to market natural gas from Russia, three weeks after a gas dispute curtailed supplies to western Europe, Bloomberg reported.
A final agreement on the venture, originally scheduled to be announced Saturday, was delayed until Jan. 25, Ukrainian Prime Minister Yuriy Yekhanurov said at a press conference today in Kiev, Ukraine’s capital.

TITLE: Report: Arms Dealer Sets Sights On Mining Giant
AUTHOR: By Lyuba Pronina and Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — State-owned arms dealer Rosoboronexport is interested in buying a majority stake in the world’s largest titanium producer, VSMPO-Avisma, part of a drive to create a large state-owned metals holding, Russian newspapers reported Friday.
Rosoboronexport, which last year took charge of the country’s largest carmaker, AvtoVAZ, has offered to buy 60 percent in the company, Vedomosti reported, citing unidentified sources.
The report comes amid mounting speculation about government interest in the metals sector, with partly state-owned diamond monopoly Alrosa thought to be looking at Norilsk Nickel, which is currently privately owned.
Sergei Chemezov, the head of Rosoboronexport and a close ally of President Vladimir Putin, offered to buy the VSMPO-Avisma stake at a recent meeting with its board chairman, Vyacheslav Bresht.
Bresht owns 30 percent in VSMPO-Avisma, and general director Vladislav Tetyukhin owns 30 percent as well.
Rosoboronexport is also interested in taking control of truck maker KamAZ, Vedomosti said.
Rosoboronexport refused to comment on the report. Bresht on Friday told Interfax that he had not been made such an offer, but said he would sell his stake if the state considered it necessary.
“All that exists for now are talks at the level that it would be great to build a bridge. I understand that 2006 is the year of a quiet nationalization of Russian assets. ... So far, I assure you, nothing is happening,” Bresht told Interfax.
While Rosoboronexport has no metals businesses currently, it recently helped set up a new company, AT-Spetstekhnologia, to help coordinate the operations of metals companies that supply the defense and aerospace industries, it said in a statement last Tuesday.
The new venture, partly owned by Rosoboronexport, will also prevent the gradual takeover of metallurgy firms by “various structures acting in the interest of foreign capital and often resorting to illegal means,” it said, without elaborating. As a next step, Rosoboronexport plans to form a state metals holding to include a number of key firms in the special metals business, with AT-Spetstekhnologia at its helm.
“That does not read like a press release. It sounds like an internal signal,” said a Moscow-based analyst, who requested anonymity. 
Before taking the wheel of AvtoVAZ, Rosoboronexport said that placing its representatives at the helm of leading Russian industrial companies was becoming common practice and marked a new step in developing the country’s machine-building industry.
Its representatives sit on the boards of KamAZ, Kazan Helicopter Plant and Kurganmashzavod, a maker of infantry fighting vehicles. 
Rosoboronexport’s policy is in line with the government’s overall policy to snap up control of strategic sectors of the economy, which began with oil and gas, said Konstantin Makiyenko, deputy head of the Center for Analysis of Strategies and Technologies defense think tank.
“It remains to be seen what will come out of it,” he said.

TITLE: Russneft Looks To Join Russia’s Major League
PUBLISHER: Reuters
TEXT: MOSCOW — Fast-growing oil firm Russneft wants to buy TNK-BP’s Udmurtneft production unit and other assets in Russia and abroad in a move to join the Russian major league, the company’s head said on Friday.
The privately owned, 280,000-barrel-per-day oil producer was created by company president Mikhail Gutseriyev with the help of Swiss-based oil trader Glencore in 2003 and has been actively buying oil producing and refining assets since then.
Gutseriyev said Russneft was examining seven assets and was interested in Udmurtneft, but declined to elaborate.
TNK-BP, Russia’s second-largest oil firm, plans to sell Udmurtneft, which has reserves of around 1 billion barrels of oil equivalent and produces around 120,000 bpd, or 6 million tons per year, Vedomosti reported on Friday.
Industry sources believe Russneft is the most likely winner of the Udmurtneft auction, but would have to compete with China National Petroleum Corp. and India’s Oil & Natural Gas Corp. 
Gutseriyev also confirmed Russneft’s intention to buy a 49 percent stake in Slovak oil pipeline operator Transpetrol from stricken firm Yukos and said the deal could total $100 million.
He denied that Glencore, which has stakes in Russneft assets, had taken a share in three more. He said Russneft had reduced its share in Beliye Nochi, Gogoil and Kominedra to 51 percent in order to transfer the stakes to entities affiliated with Russneft, which would help it to consolidate its regional units.

TITLE: Record Number of Russians Spend Winter Abroad
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: Although most package tours over the New Year cost twice their average price, this year a record number of Russians decided to go abroad for their ten days of winter holiday. According to official statistics, the 10-15 percent yearly growth in package tour sales surged to its peak in November and December when the last Christmas deals sold out like hot cakes.
The period’s peak season was defined as Dec.23 to Jan.15, where demand and prices reached their maximum. The most popular New Year tours fell into the mid-price and expensive categories and cost from $700 to $2000. 
In Leningrad oblast the cost of resort accommodation also grew significantly. 
“Depending on the program for entertainment, food and special guests, the accommodation in some Leningrad Oblast hotels and sanatoriums on New Year’s Eve cost ten times more than the average cost,” said Sergei Korneyev, vice president of Russian Union of Travel Industry, or RST.
Compared to last year, when most tourists were caught out by the unexpectedly long winter break, this year people planned well in advance.
“Plane tickets to almost anywhere in that period were already all sold by the end of November,” said Anna Luzhnikova, advertising and marketing manager at KMP Group. However, some last minute deals were available even at the end of December, said Svetlana Malyakina, managing director at EXYTOUR.
According to Korneyev, trips to coastal resorts in warm countries were the most popular choice among travel agency clients. Besides the traditionally popular and economical trips to Egypt, many Russian tourists celebrated New Year’s Eve in the luxury resorts of the UAE, Thailand, and tourist venues in China, Bali, Goa in India, Ecronesia and other exotic islands. More and more such resorts are specializing in luring Russian tourists, providing them with a wide range of services in the Russian language.
 Although most travel agencies observed some downturn in sales of trips to Asian countries due to last year’s tsunami, some fearless holidaymakers traveled to the region. 
“The demand for Christmas trips to Thailand grew by 100 percent, whereas sales of trips to Egypt and other exotic countries increased by 20-30 percent compared to the same time last year,” said Yelena Korolkova, marketing and advertising director at the Council for Tourism. 
More traditional winter tours were also in demand this season. 
“Russian tourists are becoming more like Europeans. In winter they are starting to go to country cottages where, besides the fresh air, they can enjoy winter sports such as skiing, skating, sledging, as well as just walking,” said Korneyev. 
“Over the last few years over 150 new resorts have been opened in Leningrad Oblast, and they are successfully competing with those in Finland though they are no more economical,” he said.
The traditionally popular bus tours to Europe have now gained in popularity, and not only among budget travelers but also those simply attracted to the modern European way of life. 
“Compared to traveling by plane, bus tours give tourists a unique chance to feel the real European lifestyle,” said Korneyev. 
“Increased demand now means that more expensive packages, with comfortable buses and accommodation in five star hotels, have become available on the market.”
The other boom was in sales for tours of Baltic countries, which, with proximity to St. Petersburg, represent good values for money, and propose a wide-range of itineries. They are expected to become one of the favorite destinations for tourists from the Russian Northwest.
Now, according to the statistics, ski trips abroad are in demand not only among Russian oligarchs but among the average tourist as well. New destinations, such as Poland, Bulgaria, Hungary and Turkey, and the use of bus es to get there, have made this type of traveling more affordable. 
“In general, the average Russian tourist’s preferences have changed over the last years,” said Korneyev.
 “Now most of them are not satisfied with just going somewhere to aimlessly lie on the beach and get a tan. Many of them enjoy the educative value of traveling and prefer to combine sports, such as diving or yachting, with going on excursions.”
Korneyev said that according to a survey conducted recently, traveling is last in the list of needs of the majority of Russians. 
“Therefore, growth in the sales of package tours might indicate a rise in disposable income but also shows how  most people prefer to divide up their holidays into several blocks.”

TITLE: Business Eye
AUTHOR: By Anna Scherbakova
TEXT: Extremely cold days remind us how vulnerable people remain in spite of all our technological and intellectual progress. We are as dependent on the weather as we were a thousand yeas ago and neither car nor computer, or any other fruit of civilization can save us from the dark and cold. Last week, with temperatures dropping to minus 30 Celsius, the city looked half-empty. Many cars were hard to get into, let alone start. Many people caught cold, kids missed school and stayed home — but even at home the water or electricity or heating could be unexpectedly cut off. The situation was by no means catastrophic but extremely uncomfortable. Neither computer nor phone can work without electricity, and it is harder to watch TV by candlelight. 
Luckily St. Petersburg suffered less last week than Moscow, where energy supplier Unified Energy System (UES) limited the supply of electricity by switching off dozens of enterprises. St. Petersburg, on the other hand, was saved by close relations with its northern neighbor. UES reduced the energy supply to Finland in order to warm and light up our city. On such an important occasion UES even gave up some of its benefits as an exporter of energy. But this week limits will be imposed on the power use in our city and some enterprises will have to reduce their activities until warmer days. Among potential victims are Baltika brewery and LMZ factory. At present we can only guess how much these enterprises will lose from such restrictions. 
And which businesses have benefited from the situation? I think those companies who look after cars should be keeping themselves busy, together with sellers of things like car batteries – the first thing that gives up in the cold. Those who tow away ‘dead’ cars should also feel needed. Taxi services were heavily in demand and could easily double their prices. Private drivers, who warmed up their cars every 2 to 3 hours during the night, in the morning surprised passengers with their mark-ups. Those who refused to pay were told ‘to wait for the next free car.’ Entrepreneurial spirit did not freeze. 
Who else made use of the cold to increase its revenues? Drug stores — because of high demand for medicines; suppliers of domestic appliances; shops that sell gloves, sweaters and scarves. Coffee shops could have made gains if take-away was more popular, but it’s unusual for locals to sip hot coffee on the move. 
Among those in the red are street vendors of ice cream and soda. This winter is bad for skiing. First of all there was no snow then temperatures plummeted to minus 30. Those who invested in recreational complexes will have to hope February is warmer. But worst hit are presumably traffic police, because many offenders stay at home and therefore contribute neither fines nor bribes. A deficit of drivers has forced them to focus on pedestrians. One of them stopped me and explained that I would have been charged for crossing St. Isaac’s Square in illegal fashion if conditions had been more suitable for writing out fines. Sometimes the cold has its advantages. 

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

TITLE: Why Prolong Hostility Against Russia?
AUTHOR: By Andrew Pole
TEXT: Sir, Alan Wendt (Letters, January 13) betrays his past as a US state department official in the Reagan administration in the antagonistic view he takes of Russia. Scolding Europe for its dependence on Russian supplies of natural gas he insists this dependence “poses great risks”.
Where is the sense in continued hostility toward Russia? What about other possible prescriptions for ameliorating the risks of European energy dependence?
A policy of helping Russia transform itself to acquire “acceptable” standards in civil rights, the rule of law and property rights is a far more useful policy than the US approach of admonition.
Engaging Russia economically is a sensible course for Europe, as Russia’s neighbour, from a security perspective.
Imagine a Russia in which persistent economic development eliminated much of the support given to anti-state factions by the destitute in the country’s troubled republics in the Caucasus. Imagine a Russia with an economy as intertwined with that of Europe as is Germany. Even the cynical can see how economic development will quickly reduce pressure for the sale of arms and nuclear technology.
Even as a sullen onlooker the US would gain benefits from expanding European and Russian economies. Doubtless Mr Wendt would consider such a prescription pollyannaish. And probably heretical.

This letter was first published in the Financial Times.

TITLE: IN BRIEF
TEXT: Launcher Order
MOSCOW (Bloomberg) — Russia won an order from India for its Smerch multiple-launcher system for battlefield rockets, RIA Novosti said, citing Viktor Komardin, deputy head of Russian state arms export agency Rosoboronexport.
The Indian Defense Ministry and Moscow-based Rosoboronexport signed a contract on Dec. 31 to outfit two Indian army regiments with the system, the state-run Russian news service cited Komardin as saying, without giving details of the transaction.
The 12-tube Smerch is truck mounted and can fire rockets with a top range of 70 kilometers (44 miles), either individually or simultaneously, according to Globalsecurity.org, a Web site that monitors the defense industry. President Vladimir Putin last month said Russia, the world’s second-biggest weapons supplier after the U.S., should use its growing economic might to support the $5 billion arms-export industry amid “extreme” competition. 

Severstal Profit 
MILAN (Bloomberg) — Severstal, Russia’s third-biggest steelmaker, said 2005 profit declined from a year earlier as steel prices weakened.
The Cherepovets, Russia-based company reported net income of $1.4 billion in 2004. Export prices for benchmark hot-rolled coil from former Soviet states averaged $449 a metric ton last year, from $516 in 2004, according to data from Metal Bulletin Plc.
“Steel prices were very high in the first four months but profit was affected by declining prices in the second half,” Severstal Chief Executive Officer Alexei Mordashov said in an interview in Milan Monday. 2006 profit will be “slightly less” than in 2005, the CEO said, without giving details.

Ukraine Accused 
MOSCOW (Bloomberg) — Gazprom, the world’s biggest natural-gas supplier, accused Ukraine of using more gas than it had agreed to, affecting supplies to Europe.
“More gas is remaining in Ukraine than we’d agreed,” said Gazprom Deputy Chief Executive Officer Alexander Medvedev Monday in an e-mailed statement. “This doesn’t allow us to fully meet requests made by foreign customers.”
 Gazprom lowered supplies to Europe, which relies on Russia to meet a quarter of its demand for the fuel, twice this month. At the start of the year, state-controlled Gazprom cut deliveries to Ukraine, through which as much as 80 percent of Russia’s European exports flow, in a dispute over price increases. On Jan. 18, it interrupted supplies because of cold weather in Russia.

Standard Bank Bonds
MOSCOW (Bloomberg) — Russian Standard Bank, which controls three-quarters of Russia’s credit-card market, plans to sell one-year bonds in dollars, according to a banker helping to manage the sale.
The Moscow-based lender hired Goldman Sachs Group Inc. to manage the sale, the banker said. The bond may be $200 million in size and Russian Standard will probably sell the bonds next week, the banker said.
Moody’s Investors Service rates the bank Ba2, two levels below investment-grade, according to data compiled by Bloomberg. Standard & Poor’s rates it B+, two levels lower still. 

Yukos Seizure
MOSCOW (Bloomberg) — A Russian court ordered the seizure of $600 million in Russian bank accounts belonging to former Yukos Oil Co. owners Mikhail Khodorkovsky and Platon Lebedev, RIA Novosti said, citing the Federal Court Marshals Service.
A Moscow court Monday upheld a request by the Federal Tax Service to seize the cash to pay some of the $28 billion in taxes and fines owed by Yukos, the state-run news service said.
The Meshchansky District Court ordered the money transferred to the federal budget, RIA said, without reporting which banks held the accounts. Yukos, which has paid more than $20 billion of its bill and owes about $6.3 billion, is facing claims for another $3.5 billion, RIA said.

Amdocs Contract
MOSCOW (Bloomberg) — Amdocs. said it won a follow-on contract from Svyazinvest, Russia’s dominant fixed-line telephone company, to install its billing-software systems in eight of Svyazinvest’s units.
The contract calls for Amdocs, a U.S.-Israeli company based in St. Louis, to install unified billing systems in seven regional telecommunications operators and in Rostelecom, its long distance unit, Amdocs and Moscow-based Svyazinvest said in a PRNewswire statement Monday.
The system will be installed this year, they said, calling the contract “significant” but without providing a dollar value. Amdocs said the order followed completion of another billing program for Svyazinvest.

Meat Import Ban
MOSCOW (Bloomberg) — Russian and Ukrainian officials meet Monday to discuss Russia’s ban on imports of its neighbor’s meat, Interfax reported, citing an unidentified source in Russia’s Federal Veterinary and Sanitary Control Service.
Russia banned imports of uncooked Ukrainian meat because of uncertainty about its origins, Interfax reported Dec. 31. There are regular violations of veterinary regulations on the two countries’ border, the news agency cited Sergei Dankvert, the head of Russia’s federal veterinary service, as saying.

Exxon Claim
BAKU (Bloomberg) — Exxon Mobil Corp. will pay a $50 million claim after refusing to continue drilling at two offshore fields in the Azeri sector of the Caspian Sea.
Exxon Mobil will pay $32 million to exit exploration of the Zafar-Mashal deposit and $18 million to stop work at the Nakhichevan deposit, an official at the press office of the State Oil Co. of Azerbaijan said Monday. The official declined to be identified in line with company policy. Exxon spokeswoman Vafa Asadova confirmed Monday that the Irving, Texas-based company had reached settlements with Azerbaijan over the fields.
Exxon was due to drill second wells at both blocks after the first wells didn’t discover commercially viable reserves. 

Polymetal Rise
ST. PETERSBURG (Bloomberg) — MNPO Polymetal, which produces more than three-quarters of Russia’s silver, said its precious metals production rose last year as output increased at existing mines.
Gold output rose 15 percent to 243,000 ounces, from 212,000 ounces a year earlier, while silver output increased 10 percent to 18.9 million ounces, from 17.3 million ounces, Polymetal said in an e-mailed statement Monday.
GNK Nafta Moskva on Nov. 10 agreed to buy Polymetal from ICT Group and plans to sell shares in the company by the end of 2006.

Russian Debt 
MOSCOW (Bloomberg) — Russia may repay ahead of schedule some debt to the Paris Club of creditor nations by July, Interfax reported, citing a representative of the Finance Ministry, who wasn’t identified.
The ministry will send a proposal about making the payment to the government for approval “as soon as possible,’’ the news agency reported. The country plans to pay $12 billion to the Paris Club ahead of schedule this year, Interfax said.
The government is using some of its windfall oil revenue to repay foreign debt. Russia repaid $15 billion to the Paris Club of creditor nations ahead of schedule in July and August.

Turkmen Projects
MOSCOW (Bloomberg) — Russian President Vladimir Putin and Turkmen President Saparmurat Niyazov agreed to broaden cooperation between their countries on natural gas extraction and transportation projects, during talks in the Kremlin Monday.
“Energy is the most important area of Russian-Turkmen cooperation,” Putin said in remarks posted on his Web site.
Niyazov invited Russia to participate in “major” gas supply and production projects with his country, the second-largest natural gas producer among the former Soviet states.
Putin is working to raise the political clout of Russia, the world’s largest gas producer, by developing state-controlled oil and gas companies into global leaders with more Russian and international assets.

TITLE: What Andrei Sakharov Might Have Done
AUTHOR: By Richard Lourie
TEXT: On Dec. 14, 2005, my day’s email included a Jacquie Lawson animated greeting card. To view it, all I needed to do was click on the link. Expecting a season’s greeting somewhere between cutesy and kitschy, I was startled by the message commemorating the 16th anniversary of Andrei Sakharov’s death. I immediately recalled the day — the drained, stricken faces of the family, the inability to discuss anything but the most basic logistics, the vastness of his absence.
The anniversary made me wonder what Sakharov would make of his country now. I did have some clues to his mentality, having translated his memoirs into English. He wrote them while in exile in Gorky, and they were smuggled out in small batches and delivered to me in Boston, always with the same joke — Top Secret, burn before reading. And I had written the first biography of Sakharov and had spent time with him too — at a desk fine-tuning the translation, at the dinner table in wide-ranging conversation.
Sakharov always considered the freedom to leave one’s country to be the No. 1 human right. A country you couldn’t leave was a prison. So, the freedoms that Russians more or less routinely enjoy today — travel, religion, press — he would count as real progress. He would not think the same about the collapse of funding for science and the arts and would have been repulsed by the flood of vulgarity onto television and the Internet. He would, however, have loved the principle and potential of the Internet, whose existence he predicted and which he called the Universal Information System.
Always a staunch advocate of nuclear power, he would have pressed that unpopular stance even harder now that energy and politics are more entwined than ever. And, as the builder of the Soviet Union’s hydrogen bomb, he would have been well suited to judge Iraq’s atomic capabilities for what they were. 
He had done some of the preliminary work on a new Constitution, with his version stipulating one five-year term for the president. A lover of precision, he would have been appalled by the sentence in the current Constitution that states with maddening ambiguity: “No one person shall hold the office of President of the Russian Federation for more than two terms in succession.”
He would probably have taken Mikhail Khodorkovsky’s side during the oligarch’s trial — not out of any sympathy for the looters of Russia, but because he knew from long experience when someone was being railroaded. 
He could defend and denounce the same people at different times, as he did with the Palestinians, and would have no doubt done the same with the Chechens, championing them when they were the victims of Russian military atrocities and condemning them for terrorist acts like the school massacre in Beslan.
He would have rebuked the authorities for their constriction of the mass media, especially television. He could have forced those authorities into some very uncomfortable positions — if they refused him air time, they would be indicting themselves; but if they granted him air time, he’d be doing the indicting. 
He would have attended the trials of scientists charged with treason for selling publicly available information. He would have shamed the justice system for not finding the murderers of journalists like Vladislav Listyev and Paul Klebinkov or of political figures like Galina Starovoitova. And he would have kept an especially close eye on the new law regulating NGOs that comes into effect on April 10, recognizing it as a threat to the fragile system of civic organizations that keeps the country from slipping back into reflexive authoritarianism. And the FSB would no doubt have kept a close eye on Sakharov in the best tradition of its predecessors.
The paradox is that had he lived, Russia’s problems would not have been so acute. But he didn’t and they are.

Richard Lourie is the author of “Sakharov: a Biography” and “The Autobiography of Joseph Stalin.”

TITLE: Guard Accuses Boxing Champ of Assault
AUTHOR: By Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — Giant boxer and recently crowned World Boxing Association champion Nikolai Valuyev recently said he had no idols in boxing, only the greatest respect for some of his favorites, including controversial former heavyweight champ Mike Tyson.
Valuyev presumably admires Tyson’s exploits in the ring, but after an incident Thursday reminiscent of Tyson’s notorious outside-the-ring altercations, the Russian boxer — who at 2.13 meters tall and 147 kilograms has been dubbed the “Beast from the East” — could be facing criminal charges. 
St. Petersburg police said Friday that they were investigating claims from a 61-year-old security guard, Yury Sergeyev, that Valuyev beat him up outside the Spartak Ice Palace in St. Petersburg after the boxer’s wife parked illegally and Sergeyev, who was working as a parking attendant, told her to move her car.
“According to the victim, Valuyev began beating him over the head and continued to beat him even after the attendant fell to the ground,” the police said in a statement, Interfax reported.
Sergeyev was hospitalized in stable condition, the statement said. Officials at City Hospital No. 3 in St. Petersburg could not be reached for comment Friday, but one of the hospital’s doctors, Alexander Komarov, told NTV television on Thursday that Sergeyev had suffered a concussion as well as scratches and bruises on his face.
Police have questioned Sergeyev but have yet to question Valuyev, who flew to Germany after the incident, the police statement said. In reported interviews, Valuyev has denied hitting the guard.
Calls to St. Petersburg police spokes-man Vyacheslav Stepchenko went unanswered, but Interfax reported that no criminal case had been opened as of Friday.
In an interview broadcast on NTV, Sergeyev said he had done nothing to provoke an attack and simply told Valuyev’s wife, Galina, that the spot where she had parked was reserved for buses. 
“She told me that it was her business and not to interfere,” he said in the interview. She called her husband, who arrived 10 minutes later, Sergeyev said.
“She pointed her finger and said ‘That’s him!’ and stepped off to the side,” Sergeyev said, Sovietsky Sport reported Saturday. “And Valuyev took me by the back of my neck and dragged me into a ventilation shed. He beat me for a long time, and I even managed to lose and regain consciousness.”
In an interview posted Friday on Gazeta.ru, Valuyev said that shortly before he was to fly to Berlin, his wife called him in tears and said that as she parked her car at the Spartak Ice Palace to take their son to the ice rink, the parking attendant had mocked her and yelled at her and demanded to see her driver’s license. He then hurried over to Spartak.
“I sincerely regret the conflict, but you have to understand: I acted like any normal man in my position would have, whether he was the world champion or a simple engineer,” he said. “I stood up for my wife, Galina, and my 3-year-old son, Grisha.”
Valuyev added that the parking attendants had hassled his wife on previous occasions. “And some time ago the attendants even shoved my young son,” he said.
In the Gazeta.ru interview, Valuyev did not elaborate on how he resolved the situation. Interviewed by Berliner Zeitung, he denied hitting Sergeyev. 
“He insulted my wife, and then I grabbed him by the collar to bring him to his senses,” Valuyev was quoted as saying in the German newspaper. “I did not hit this man.”
Galina Valuyeva told Gazeta.ru on Friday that it could have been a planned provocation. “Immediately after Nikolai talked with the attendant, an ambulance arrived at the ice palace,” she said. “Sometimes you have to wait three hours for an ambulance, and this time they hurried over immediately. Some people were running around yelling, ‘Valuyev won’t get away with this! We have lots of friends in television and in the newspapers. Everyone will find out what kind of world champion he is!’”
Valuyev, who could not be reached by telephone on Friday, told Russian media over the weekend that he would comment further only after he returned to Russia on Tuesday.
Prominent boxing analyst Alexander Belenky, who has known Valuyev for 10 years and considers him a friend, said he was puzzled by the incident. “He is one of the calmest and most intelligent boxers I know,” Belenky said Friday. “Even when he was in school, none of the kids were afraid of him despite his size because he was so kind. This is a very strange and unexpected situation.”
Belenky said out-of-the-ring altercations involving high-profile boxers were much less common in Russia than in the West. “Even if they happened in Soviet times, they were naturally never publicized,” he said. “In the 1960s, gangs of hooligans would try to seek out a famous boxer and beat him up with 20 people against one. Then they would brag about it for the rest of their lives.”
Many talented boxers moved into the ranks of organized crime groups in the 1990s, Belenky said. “But as far as boxers starting a fight with a regular person — it’s a rare occurrence here,” he said.
Valuyev, 32, became the first Russian ever to lay claim to the heavyweight title when he dethroned John Ruiz in a majority 12-round decision at Berlin’s Max Schmeling Hall in December.

TITLE: Steelers, Seahawks in Super Bowl
AUTHOR: By Dave Goldberg
PUBLISHER: The Associated Press
TEXT: SEATTLE — The Seattle Seahawks and the Pittsburgh Steelers won their conference championship games in convincing style on Sunday and will meet on Feb. 5 in the Super Bowl. 
The Seahawks beat the Carolina Panthers 34-14 after the Pittsburgh Steelers topped the Denver Broncos 34-17.
Before his Seahawks took apart Carolina, Seattle coach Mike Holmgren sat down to watch the other team that’s Super Bowl bound. “They’re awfully good,” Holmgren said of the Pittsburgh Steelers, who soundly beat Denver on Sunday.
By the looks of things, Holmgren wasn’t kidding.
For now, though, he had said enough. After he finished celebrating, Holmgren and his family went out to dinner, probably the only chance he’ll have to relax for a couple of weeks.
But fans can take that time to savor this matchup between the tradition-rich Steelers and an upstart from the Pacific Northwest.
It should be one of the better ones.
History is on Pittsburgh’s side: The Steelers have four titles, all won during the six seasons from 1974-79 behind Terry Bradshaw, Franco Harris, Mean Joe Greene and a bunch of other Hall of Famers.
Seattle, on the other hand, hadn’t won a playoff game in 21 years before last week and is going to the Super Bowl for the first time in its 30-year history.
Everything the Seahawks have going for them — and it’s a lot — happened this season: Seattle entered the playoffs as the NFC’s top-seeded team, scored more points than any other team in the regular season, and did it with Shaun Alexander, who won the league MVP honors going away.
The Steelers, meanwhile, were the last seed in the AFC, the first sixth-seed to make it to the big game and only the second team ever to get there by winning three games on the road.
And despite all of Pittsburgh’s Super Bowl experience as a franchise, only one Steeler has been there — little-used cornerback Willie Williams, a starter on that ‘96 team. Seattle has five who have been there with other teams: wide receiver Joe Jurevicius; center Robbie Tobeck; defensive end Grant Wistrom; defensive tackle Chuck Darby; and punter Tom Rouen.
Even so, the oddsmakers favor the Steelers by 3 1/2 points for the game in Detroit in two weeks, presumably because they are the STEELERS, with four titles in six years in the 1970s.

TITLE: Kobe Scores 81 Points For Record Win Over Raptors
AUTHOR: By John Nadel
PUBLISHER: The Associated Press
TEXT: LOS ANGELES  — Kobe Bryant, often unstoppable, played at a higher level than even he imagined possible. The Los Angeles Lakers’ star scored a phenomenal 81 points Sunday night — the second-highest total in NBA history — in a 122-104 victory over the Toronto Raptors. 
Only Wilt Chamberlain’s storied 100-point game nearly 44 years ago ranks higher.
“Not even in my dreams,” Bryant said. “That was something that just happened. It’s tough to explain. It’s just one of those things.
“It really hasn’t, like, set in for me. It’s about the `W,’ that’s why I turned it on. It turned into something special. To sit here and say I grasp what happened, that would be lying.”
The Lakers trailed by as many as 18 points early in the third quarter, angering Bryant.
“He was ticked off,” teammate Lamar Odom said.
When asked what Bryant said at that stage, Odom replied: “Nothing. That’s when it’s bad.”
Bryant scored 51 points after the Raptors extended a 63-49 halftime lead to 71-53. The Lakers outscored the Raptors 38-14 to finish the third quarter to go ahead for good.
“That was incredible, remarkable,” Odom said.
Bryant, the NBA’s leading scorer, left to a standing ovation with 4.2 seconds remaining, having shot 28-of-46 from the floor, including 7-of-13 from 3-point range, and 18-of-20 from the foul line.
With the 18,997 fans at Staples Center chanting “MVP! MVP!” Bryant made two free throws with 43.4 seconds remaining for his final points. He scored 27 points in the third quarter, 28 in the fourth.
“We are on a journey, and to put on a show like this for the fans here in L.A. is truly something special,” Bryant said. “I grew up in front of these people, and now they are seeing me as an older, young man.”
The 27-year-old Bryant joined the Lakers out of high school, and is in his 10th NBA season.
Chamberlain scored 100 points for Philadelphia against the New York Knicks at Hershey, Pa., on March 2, 1962, shooting 36-of-63 from the field and 28-of-32 from the foul line while playing all 48 minutes.
Chamberlain had 59 points in the second half — the only player with more points in a half than Bryant’s 55 after halftime in this game.
Chamberlain’s second-highest total was 78 against the Lakers in three overtimes on Dec. 8, 1961.

TITLE: Clijsters Fights Injuries To Enter Quarters
AUTHOR: By Paul Alexander
PUBLISHER: The Associated Press
TEXT: MELBOURNE — It seems the only time Kim Clijsters isn’t getting worked on by the trainers, she’s working over an opponent. 
Showing no signs of the hip and lower back pain that has been hindering her movement, Clijsters withstood the stinging baseline power of 15th-seeded Francesca Schiavone of Italy for a 7-6, 6-4 victory Monday that advanced her to the quarterfinals of the Australian Open. 
“I was a bit scared,” Clijsters said of the nagging injuries. 
She had four double-faults and 43 unforced errors, but said she was happy just to keep advancing as she recovers. 
“I’ve probably been in the physio room more in the last week than in my life,” she said. “Hopefully it’ll pay off.” 
Clijsters next faces the winner of the night match between Martina Hingis, on a comeback from a three-year layoff, and Australia’s Samantha Stosur. 
Top-ranked Roger Federer, the overwhelming favorite in the men’s draw, was playing Tommy Haas. 
Clijsters had trouble with her serve, with four double-faults, and had 43 unforced errors that could be attributed to staying off the court on her off-days. 
“It’s more important to rest than just be out there practicing,” she said. 
Russia’s Nikolai Davydenko rallied from two sets and a break down to reach the men’s quarterfinals and snap Dominik Hrbaty’s run of five-set wins. 
The fifth-seeded Davydenko also saved three break points in the last game, winning five straight points and closing the 4-6 4-6 6-4 6-2 6-3 victory with an ace. 
Hrbaty was the only player to move into the fourth round after three five-set matches. After his 3 1/2 -hour loss Monday, he had spent a total of 13 hours and 57 minutes on court at Melbourne Park. 
The No. 12 seed from Slovakia was only the fourth man in history to play four consecutive five-set matches at one Grand Slam tournament. 
American Robby Ginepri was the most recent, winning three times in five-setters at last year’s U.S. Open before losing the semifinal in five to Andre Agassi. 
No. 21 Nicolas Kiefer had a 7-6 6-3 6-3 win over Juan Ignacio Chela, who had ousted third-seeded Lleyton Hewitt in the second round. 
Kiefer next plays No. 25 Sebastien Grosjean, who had a 7-5 6-2 6-2 win over fellow Frenchman Paul-Henri Mathieu and has reached the quarterfinals at Melbourne Park for the fourth time.  WTA Championship winner Amelie Mauresmo cruised into the quarterfinals, committing only two unforced errors in a 6-1 6-1 victory over 16-year-old Nicole Vaidisova. 
Mauresmo next plays Switzerland’s Patty Schnyder, who beat Russian 2004 French Open champion Anastasia Myskina 6-2 6-1 in 55 minutes. 
Myskina saved one match point with a backhand winner in the second-to-last game, but struggled with her groundstrokes and had 32 unforced errors.
Mauresmo reached the quarterfinals here for the fourth time on her second match point when Vaidisova hit a forehand into the net. 
“I expected a tough one... so I am very happy to go through in straight sets and also not spend too much time on the court.” 
While Vaidisova was seeded 16th and dictated the pace of the match, the young Czech showed her inexperience on center court with 34 unforced errors to 14 winners and had her serve broken five times. 
Mauresmo won nearly twice as many points, 51-27.

TITLE: Chelsea Tie At Stamford To Charlton
AUTHOR: By Mitch Phillips
PUBLISHER: Reuters
TEXT: LONDON — Chelsea dropped its first home points of the season on Sunday when new signing Marcus Bent earned Charlton Athletic a 1-1 draw at Stamford Bridge. 
That result allowed Manchester United to close the gap at the top to 14 points after Rio Ferdinand’s last-minute header earned a dramatic 1-0 home win over third-placed Liverpool. 
Chelsea, which had won its 11 previous home games, has 62 points from 23 games. Man U has 48 from 23, with Liverpool on 44 from 21. 
Tottenham Hotspur is fourth in the Premiership on 41 points after its goalless home draw with Aston Villa on Saturday. Arsenal is fifth on 37 points after its 1-0 defeat at Everton. 
Champion Chelsea seemed on course for another regulation victory after taking the lead in the 18th minute when Hernan Crespo’s goal-bound header was parried by goalkeeper Thomas Myhre and Eidur Gudjohnsen reacted quickly to score. 
However, Chelsea was unable to turn its possession into clear chances against a team who had lost their last four away league games, and the home side paid the price on the hour. 
Darren Ambrose picked out Bent and the unmarked striker, on as a 40th-minute substitute following his $3.52 million arrival from Everton on Tuesday, looped a header over the stranded Petr Cech. 
After Chelsea had defender Ricardo Carvalho sent off 10 minutes from time for a second booking Charlton should have won the game when headers by Marcus and Darren Bent sent Ambrose through, only for Cech to block his low shot. 
Charlton also won at Stamford Bridge, on penalties after a 1-1 draw, in the League Cup last October. 
Sunday was the first time the leading team had failed to win a home league game since a 0-0 draw with Arsenal in April but manager Jose Mourinho dwelled on the positives of his side’s record when he spoke to reporters. 
“When you arrive at the end of January and you lose your first points at home I think it’s fantastic,” he said. 
“I know the [league] record we have, with two draws and one defeat, is amazing, and no defeats at home is unbelievable. So this day had to arrive and I’m happy with the team and the situation. 
“Ask Manchester United and Liverpool if they would like to swap places.” 
His two nearest rivals looked anything but champion material, canceling each other out in a midfield-dominated clash high on commitment and effort but desperately short of goal chances. 
The best appeared to have come in the 62nd minute when Ferdinand cleared a Djibril Cisse effort off the line, Edwin van der Sar saved Harry Kewell’s subsequent shot and Cisse blazed the rebound over the bar. 
United snatched the points when winger Ryan Giggs curled in a free kick from the left and England centre back Ferdinand rose unchallenged to head past Pepe Reina. 
Ferdinand did not score in his first 3-1/2 years at United and has now notched three in five weeks.

TITLE: Gronholm Beats Off World Champion in Monte Carlo
PUBLISHER: Reuters
TEXT: PARIS — Finland’s Marcus Gronholm held on after an outstanding recovery by world champion Sebastien Loeb to clinch his first victory in the Monte Carlo rally on Sunday.
The Ford driver took the lead on Friday when France’s Loeb was handed a five-minute penalty after he failed to complete the last stage of the day following a crash in his Citroen.
Loeb won five stages on Saturday and chased hard on Sunday, but Gronholm managed to hang on to finish one minute one second ahead in the season-opening event. Finn Toni Gardemeister came in third, 21 seconds further adrift.
Gronholm, who joined Ford after six years with French marque Peugeot, sealed his 19th win in the world championship with an overall time of four hours 11 minutes 39 seconds.
The Finn, who won two stages, said he had driven cautiously over the last two days.
“I was not pushing at all. We had a big vibration and there was smoke in the car. We were really afraid and took the boost off.
“When Loeb went off I just controlled my pace, but with him in contention it would have been very difficult.”
Second place was a great disappointment for double world champion Loeb who was bidding for a record-equalling fourth successive Monte Carlo win.
The Frenchman, driving for the Kronos team since Citroen withdrew from the world championship, was in a class of his own throughout the race.
At ease on the mountain roads, he snatched 10 stage victories including the prestigious col du Turini stage on Sunday morning.
Loeb threw away his chance in the event he likes most when his Citroen Xsara skidded off a mountain road in the ultimate leg on the opening day.
Under rally regulations, Loeb was allowed to rejoin the race on Saturday, after his car was recovered and repaired overnight.
But a five-minute penalty for not completing the stage had effectively ended his chances of winning.
Ford team manager Malcolm Wilson was delighted with the victory and promised there was more to come.
“It was an incredible performance,” Wilson said.