SOURCE: The St. Petersburg Times
DATE: Issue #1158 (24), Tuesday, April 4, 2006
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TITLE: Investors Lured Back By Boom
AUTHOR: By Gleb Bryanski
PUBLISHER: Reuters
TEXT: MOSCOW — Russians, whose savings were eroded by hyper-inflation, swallowed by pyramid schemes or lost in the banking crises of the 1990s, are being lured back to the investment game by a booming stock market. 
“If housewives in the West own mutual funds, bonds, shares, why should we be different?” asks Vladimir Savin, a 30-year-old doctor attending a Moscow exhibition where money managers showcased their products to would-be investors. 
Russians are estimated to have between $35 billion and $80 billion in foreign currency stashed under mattresses, mostly from cash-in-hand wages and black-market activities such as driving illegal taxis or letting out apartments. 
Until recently, they only dared to spend their cash on consumer goods and real estate. Now, many are turning to banks, brokers and mutual funds to beat double-digit inflation. 
About 1,000 people queued daily for up to four hours at the offices of Moscow brokerage Troika Dialog to invest 3 billion rubles (more than $100 million) in January and February. 
During that period, Russia’s benchmark RTS share index rose 36 percent to a record 1,531 points. The rally extended last year’s 83 percent gain, although the market has since fallen from its peak. 
“The crises of the past get forgotten, people feel more comfortable investing longer term, and are willing to save,” said Pavel Teplukhin, head of Troika Dialog’s funds business, which has more than $2 billion under management. 
Private money coming out of the shadows may cheer the government, which wants to promote investment and saving to rein in inflation partly caused by excess cash in people’s hands. 
“Getting more money into the banking system would not only help to fight inflation but also help to boost investment because the banks would have more assets available for credits,” said Peter Westin, chief economist at Moscow’s MDM Bank. 
In a package of anti-inflation measures drafted last year the government said it wanted to sell shares and bonds to retail investors through so-called financial supermarkets. 
On the other hand, shares have been rising so fast that Economy Minister German Gref has worried aloud that a bubble is forming in Russia’s $600 billion stock market. 
His warning is likely to fall on deaf ears, however, as the mood has transformed since Russia’s financial crash of 1998, when banks collapsed, bank teller machines ran out of cash and stocks slumped. The RTS index has risen from its 1998 trough by a remarkable 33 times, driven by the oil-fired economic boom and healthy state finances of President Vladimir Putin’s six years in power. Trading at 10-12 times more than earnings forecasted for 2006, Russian shares are still not expensive, say investment professionals. 
“People are taking money from under pillows and out of their stockings and bringing it to us,” said Alexander Sokologorski, deputy head of financial markets sales at VTB24, the retail arm of state-owned Vneshtorgbank, Russia’s No.2 bank. 
The amount of money Russians keep in bank deposits rose by 40 percent in 2005 to 2.8 trillion rubles ($100 billion), while since the beginning of this year they have invested 6.8 billion rubles ($243 million) in mutual funds. 
“We see now there is at least some state control over financial markets; it all starts from the president who leads our country to prosperity,” said Savin. 
The burgeoning community of small-time speculators now tracks business newspapers, web sites, magazines and television shows that have sprung up to meet popular demand. 
Media company RosBusinessConsulting is one player to fill the niche, running a CNBC-style news channel and financial news wire, while mainstream channel NTV has launched its own programme called “Smart Money”. 
“Reading books on economics is useless, I try to read newspapers and watch television,” said Viktor Polyakov, a 39-year-old technician, who visited the exhibition. 
While small-time speculators may be enjoying the stock market ride, few Russians are saving for their old age. 
Popular distrust of financial institutions has stalled pension reforms introduced in 2002, because most younger Russians have not picked a private pension fund to manage part of their retirement savings. 
Those who failed to do so are having their savings invested by the state pension fund in government bonds — whose below-inflation returns mean their pot of retirement cash is shrinking in real terms. 
“In the West they save money for a pension all their lives, and then get it. Here, you don’t really know what might happen in 5 or 10 years, never mind in 40 when I get my pension,” said Gleb Bobov, a 22-year-old gas engineer, who nevertheless belongs to a 5 percent minority of Russians who have opted for a private pension provider. 
In a country where the average pension is about $80 a month and male life expectancy is less than 59, below the retirement age, the lack of interest is understandable — especially when younger people see the life their parents live. 
“I look around and see people of my generation taking to the bottle. They are not interested in investing,” said Vladimir Gor, 64, a pensioner surviving on a monthly state pension of $90 while making extra money as a street trader.

TITLE: Iran Flexes Military Muscles
AUTHOR: By Edmund Blair
PUBLISHER: Reuters
TEXT: TEHRAN — Iran’s boasts about its new missile technology may not stand up to close study but analysts say the message is simple: Iranian forces, if pushed, can cause havoc in one of the world’s key oil shipping routes. 
Iran says it has test fired a radar-evading missile and a high-speed underwater projectile during a week of naval wargames in the Gulf, the route for about two-fifths of the world’s globally traded oil. On Monday, it tested a torpedo. 
Tehran says the manoeuvres are a show of defensive strength. Claims of technological prowess are a regular feature of wargames in Iran, which considers itself a regional power. 
But the timing of the announcements, amid a standoff over Iran’s nuclear program, has raised eyebrows in the West, which accuses Tehran of seeking an atomic bomb, a charge Iran denies. 
Although the United States has said it wants a diplomatic solution to the standoff, it has left the military option open. 
“This is a message for Washington DC that the most harmful military steps that we can have in a potential confrontation is making trouble in the Strait of Hormuz, making trouble for oil ships in the Persian Gulf,” said political analyst Saeed Laylaz. 
He said Iran may also have an eye on talks planned between Tehran and Washington over Iraq. By showing off its military power, the Iranian government may believe it is strengthening its hand in the talks. “This is another card,” Laylaz said. 
But such bragging may also be a further sign Iran is digging itself in for the long haul in the nuclear dispute. 
The United Nations, pressed on by Western states, has demanded Iran stop enriching uranium, a process Tehran says it needs to make fuel for power stations, although the process also has military applications. 
Iran has rejected the demand as a violation of its national rights, while the West has also shown no signs of compromise. 
With neither side budging, Iran may feel a military confrontation is more likely even if it still remains far off, some analysts say. 
“Probably, they anticipate that down the line there will be a point that confrontation will be inevitable. Therefore, they are just indicating that in case they come under any military pressure or any threat then they can properly defend themselves,” said Iranian political analyst Mahmoud Alinejad. 
But he said it was a risky strategy because it may serve to bolster those calling for a tougher line by the West against Iran and its President Mahmoud Ahmadinejad, who caused alarm in the West by openly calling for Israel’s destruction. 
“This sort of military propaganda will definitely give [those seeking tougher action] more ammunition to level more accusations against Iran that Iran is under a military minded government and leadership,” Alinejad said. 
Iran’s ambassador to the International Atomic Energy Agency, Aliasghar Soltaniyeh, told CNN the missile testing should not worry the world because it was a display of “self defence”. But some Western governments have already voiced suspicions. 
After Friday’s announcement that Iran had test fired a missile that could evade radar and strike multiple targets, British Foreign Minister Jack Straw said: “These missiles are not part of their defence system, that’s for sure.” 
Questions still remain about the performance claimed by Iran for its missiles, including another missile tested on Sunday which a naval commander said travelled underwater at four times faster than other such weapons. 
“If true, it would be a significant upgrade on what is in Western inventories at the moment. But I wouldn’t put too much weight on it. It may well be military bravado and posturing by the Iranians,” said Jason Alderwick, maritime analyst at the London-based International Institute for Strategic Studies. 
Iran rarely provides enough detail for military analysts to fully assess its new weapons. And while Iran boasts of home-grown systems, analysts say most are modifications of weapons from other countries, including China and Russia, or missiles from North Korea. 
While Iran can draw on a large well of manpower, with a population of about 69 million, analysts say its naval and air force technology is largely outmoded. 
Nevertheless, Iran’s commanding position over the narrow Strait of Hormuz at the entrance to the Gulf means it can still disrupt the world’s oil supplies, if threatened, and even if much of its technology is no match for U.S. weaponry. 
“You don’t actually need lots of weapons to close [the Strait of Hormuz], you just need lots of threats,” said Tim Ripley, an analyst with Jane’s Defence Weekly Magazine.

TITLE: Qualifying With the Aid of a Cash Injection
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW — Want to get a doctorate but do not feel like spending months in a library and days and nights in front of a computer composing a dissertation? No problem. For $1,000 to $7,000, a consultant or an entire firm will write the dissertation for you and prep you on defending it before an academic board. 
In a worrisome trend for the academic community, dubious academic credential-building has become a common practice among businessmen, politicians and young men hoping to avoid military service, who use ghostwritten work, or at least someone else’s help in writing it, to obtain a degree.
The issue of scholastic integrity took the spotlight last week after U.S. researchers declared that large parts of an economics dissertation written by President Vladimir Putin in the mid-1990s had been lifted from a U.S. textbook published 20 years earlier. The Kremlin has not commented on the issue.
There is a simple motivation behind the demand for paid dissertations: The popularity of academic degrees has been growing steadily in recent years. The Russian State Library, which has obtained every dissertation defended in the country since 1944, received a record 31,000 works last year, said Nina Avdeyeva, who works in the library’s dissertation department. The Russian system of academic degrees is different from most Western systems and includes a “candidate of science” degree, which is roughly the equivalent of a Ph.D., and a higher degree of “doctor of science.” 
Seekers of both degrees are required to write a dissertation and defend it before an academic board.
Firms that offer to write dissertations estimate that up to 30 percent of all postgraduate students resort to their services these days, and they said the number continues to grow. 
Most students seek a candidate of science degree but are too busy to put their careers on hold for the six or more months that it takes to write a dissertation, industry experts said. 
They also have various needs. Some ask for assistance at a certain stage of their studies, while others want the dissertation written from beginning to end. But cases of people who only read their work for the first time as they prepare to defend it are rare, and few consultants or firms are willing to risk working on such assignments.
“We only deal with clients whom we see as capable of writing the dissertation themselves,” said Ksenia Bakhvalova, general director of LSS Group, a Moscow firm specializing in helping students write dissertations.
“If a client knows nothing about the subject, we won’t be able to help because he or she will never be able to defend the dissertation before the academic board,” Bakhvalova said.
She said that her firm has contacts with several dozen researchers in various sciences who specialize in writing dissertations from start to finish.
Bakhvalova said that some 70 percent of her firm’s clients are male college and university graduates in their 20s who want to enter a postgraduate program to avoid compulsory military service.
By law, postgraduate students cannot be drafted while they are affiliated with a university or research institute and preparing their dissertations. Once they receive the degree, they automatically become ineligible for the draft.
“By using our services, clients are killing two birds with one stone: getting a degree that will look good on their resumes and liberating themselves from the annual fear of being drafted and having to pay a new bribe to avoid it,” Bakhvalova said in a recent interview in her central Moscow office, a simple room with a desk and chairs. She wore a United Russia pin on her jacket.
“We often end up dealing with the mothers and fathers of degree seekers who are ready to pay to ensure that their sons do not end up in the army,” Bakhvalova said.
The rest of Bakhvalova’s clients include entrepreneurs, government officials and lawyers, usually in their 40s and 50s, with successful careers and the desire to boost their prestige in the eyes of other people.
She refused to identify any of her clients.
Pavel Kochkin, development manager of a firm called the Library Fund for Postgraduates and Degree Seekers, said that most postgraduate students had solid reasons for not writing the dissertations by themselves.
“Obtaining an academic degree is a very complicated, bureaucratic procedure, and few degree seekers can meet all the requirements, especially if they have full-time jobs or live in the regions,” Kochkin said.
For example, the students need to publish at least three articles in scientific journals and spend weeks in a special dissertation library outside Moscow, collecting statistics and other materials necessary to write the dissertation, Kochkin said.
He said that his firm’s services include recommendations to postgraduate programs in Moscow colleges and universities that compose and publish articles, as well as general consultations on how to write and present dissertations.
“Of course the dissertation should be innovative and have practical value,” Kochkin said.
Students also have to make sure that no other dissertations have been written on the same topic over the past five years or the academic board might reject the work.
“There are dozens of little details that most people simply do not know about, and we can advise them about it. As such, we have to inform applicants that it is an unavoidable tradition to throw a dinner or reception for the members of the academic board after the presentation of the thesis,” Kochkin said.
He and Bakhvalova refused to disclose their earnings but said they charged $1,000 to $7,000 per dissertation, depending on the client’s needs.
“On the whole, this is a fun business that brings in good revenues,” Bakhvalova said.
A senior academician who chairs the history branch of the Highest Academic Qualification Commission, a postgraduate oversight agency in the Education and Science Ministry, acknowledged that ghostwriting was a big problem.
“What is true is that it has become extremely popular with government officials to obtain academic degrees by presenting dissertations of very poor quality,” said Alexander Chubaryan, who also heads the Academy of Sciences’ World History Research Institute.
“This practice does worry us because it leads to the devaluation of the academic community’s reputation,” Chubaryan said.
The majority of dissertations are written in economics, pedagogical studies and law, he said.
Bakhvalova confirmed that these are the most popular fields, adding that firms like hers do not deal with writing dissertations in the technical or natural sciences. “Problems with those works are eminent, so we prefer not to take the risk,” she said.

TITLE: Stones Gear Up for Petersburg Gig
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Tickets for The Rolling Stones’ one-off Russian concert, scheduled to take place in St. Petersburg on June 13, will hit the stands this week, according to local promoter Planeta Plus. 
60,000 fans are expected to attend the show, which is part of the band’s current A Bigger Bang World Tour, at the Kirov Stadium, Planeta Plus revealed at a news conference last week.
According to the promoter’s news release, 5,000 tickets have already been booked by fans from Finland through the national Internet ticket seller Kassir.ru.
All in all, 30,000 tickets will be on sale in St. Petersburg and 5,000 tickets in Moscow, with the rest going to the other Russian cities and neighboring countries.
Unlike the other countries, in St. Petersburg, tickets will have “egalitarian” prices, ranging from 1,000-5,000 rubles ($36-$180), the promoter said. Two stages will be erected, the largest 62 meters wide, 23 meters long and 40 meters in height. 
To accommodate offices, dressing rooms and a canteen, a tent town will be built at the open stadium. The band’s equipment will arrive with a 150-strong technical crew in 76 trucks. The works will start on June 8.
Planeta Plus added that the band was planning to spend several days in St. Petersburg to enjoy the fabulous “white nights” period.
The band is expected to arrive on a private plane with their families, the promoter added.
The St. Petersburg concert is between dates in Gothenburg, Sweden (June 10) and Brno, Czech Republic (June 16).
The Rolling Stones’ only Russian concert to date took place at the Luzhniki stadium in Moscow in August 1998.

TITLE: Belarussian Protestors Tell of Abuse
AUTHOR: By Yuras Karmanau
PUBLISHER: The Associated Press
TEXT: MINSK — Scores of people detained during opposition protests were released from prison over the weekend, with some reporting they were beaten, gassed and taunted by Belarussian police, and the opposition claimed one protester had apparently died in a hospital after being beating.
Sergei Kalyakin, the coordinator of the united opposition headquarters, said at a news conference Friday that Sergei Atroshchenko had been brutally beaten by police and died of head injuries Wednesday.
Police refused to comment on the report, and officials at a hospital where Atroshchenko was believed to be held said they never had such a patient.
The released were among the hundreds of opposition supporters seized a week ago when police raided an encampment on Minsk’s main square. The camp had been the epicenter of an unprecedented wave of daily protests after the March 19 presidential elections, which many claimed were fraudulent. The election results gave President Alexander Lukashenko a third term in office. 
Hundreds of protesters were rounded up in trucks and detained.
“They threw me into the truck, and I fell into a cloud of gas, and my head immediately started to hurt,” said Vladimir Romantsov, 53, one of those released early Friday.
Kristina Shatikova, 30, left the Okrestino detention facility with a cap pulled low on her head to try to hide bruises on her face. “They beat us very hard in the trucks,” she said. 
She said police threw scalding water from a pot that camp members had been using to prepare food onto the face of one of the other detainees.
She also said some female detainees were sexually abused by police.
Artyom Lukyanchik, 21, said he was arrested about 1 kilometer away from the tent camp as he tried to bring warm clothing to people spending the night there. He was placed in a police bus with about 30 others. “In the bus, they made us lie on the floor, then they walked on our heads and beat us,” he said. The police also forced people on the bus to say “I voted for Lukashenko,” he said.
The opposition, led by presidential candidate Alexander Milinkevich, contends that the vote count — which gave Lukashenko 83 percent of the vote — was severely manipulated and is calling for a rerun of the election, without the participation of Lukashenko.
The United States and the European Union have sharply and repeatedly condemned the violence that has followed the election. Hundreds of opposition supporters remain in jail, human rights groups say, and the EU on Friday demanded their immediate release.
Such calls appear to have little effect on Lukashenko, other than to reinforce his disdain for the West and his contention that Washington and Brussels are funding malcontents to try to overthrow him.
The Belarussian Foreign Ministry on Friday assailed Poland for making “unprecedented” moves that worsened bilateral relations and recalled Belarus’ ambassador in Poland for consultations. The move follows Milinkevich’s trip to Poland earlier in the week.

TITLE: New Group Created To Fight Intolerance
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW — A group of politicians and other public figures set up an association Friday aimed at countering an outbreak of violent xenophobia, while a State Duma deputy fueled the flames of nationalism by announcing a list of the 100 enemies of the Russian people.
The co-founders of the Association of Resistance Against Fascism — who include ethnic Russians, Jews, Ossetians and Azeris — urged the Kremlin and parliament to boost their efforts to curb manifestations of xenophobia and violent nationalism.
“We, citizens of Russia of various ages, occupations and political beliefs, are deeply concerned by the spread of xenophobia and fascist nationalism in our society, which has been taking on an extremist and violent form,” they said in a statement reported by Interfax.
Signatories included Federation Council Senator Lyudmila Narusova; Alexander Rozenbaum, the popular bard turned lawmaker; Valery Gazzayev, coach of the CSKA football club, which is notorious for its aggressive and violent fans; Valery Tishkov, director of the Institute of Ethnology and Anthropology in Moscow; Abdusalam Guseinov, deputy director of the Institute of Philosophy; and writer Dmitry Lipskerov. 
Their appeal said many lawmakers, law enforcement officials and media organizations allowed themselves to make nationalist remarks and take nationalist actions that “play on the darkest instincts and prejudices of ordinary people.”
The signatories urged lawmakers to review existing anti-nationalist and anti-fascist legislation and ensure its full enforcement. They also called on the Prosecutor General’s Office and law enforcement officials not to turn a blind eye to hate crimes. Police and prosecutors tend to qualify hate crimes as hooliganism and other crimes.
Nationalists have been growing more radical, and violence against dark-skinned foreigners and natives of Russia’s North Caucasus is on the rise. Human rights activists have warned that the most worrisome trend is a growth in the ideological activity of nationalist groups.
Also Friday, Duma Deputy Nikolai Kuryanovich of the ultranationalist Liberal Democratic Party said he would release a list of the top 100 enemies of the Russian people in response to an earlier list of 100 purported neo-fascists released by Marat Guelman, a public relations guru and art gallery owner.
Kuryanovich said the list would be topped by Lyudmila Alexeyeva, the respected human rights activist and head of the Moscow Helsinki Group, and that Guelman would be in third place, according to news reports.
Guelman’s list included Kuryanovich, Liberal Democratic Party leader Vladimir Zhirinovsky, nationalist Duma Deputy Speaker Sergei Baburin and former Rodina leader Dmitry Rogozin.
Kuryanovich could not be reached by telephone to elaborate on his list.
In a letter published on his web site Friday, Kuryanovich demanded that prosecutors investigate Guelman over his accusations of neo-fascism.
Guelman said Friday that he was pleased with what he called “the hysterical reaction” to his list.
“The ongoing campaign led in part by the authorities has not been efficient so far,” Guelman said on Ekho Moskvy radio.

TITLE: Youths Attack State Official
PUBLISHER: Combined Reports
TEXT: MOSCOW — The culture minister from the North Caucasus republic of Kabardino-Balkaria said Sunday that he was beaten by Moscow skinheads who shouted a racist slogan. 
Prosecutors said they had no evidence the attack was motivated by racial bias. 
Zaur Tutov, who is also a well-known singer, said he was picking up his daughter after a dance class on Saturday night when 15 to 20 young men with close-cropped hair attacked him and members of a Caucasus folk dance ensemble leaving the Sokolnaya Gora house of culture in eastern Moscow. 
Speaking to NTV television after the incident, Tutov said the skinheads, who appeared to be drunk, shouted: “Russia is for Russians! Get out!”
He said the attack occurred after he and others criticized the skinheads for their behavior, and that some of the dance ensemble members also were beaten. 
“I tried to call on them to be reasonable; I said, ‘Guys, we are Russians just like you, we love Russia no less than you do’ — at which point they threw themselves at us with their fists,” Tutov said Sunday, speaking on state-run Rossia television from a hospital bed. 
Tutov’s wife, Madina, also told Ekho Moskvy radio that the attackers had shouted racist slogans. 
But a spokesman for the Moscow City Prosecutor’s Office, Sergei Marchenko, said investigators had no evidence of racial motivation in the incident. 
“The young men are drinking beer and using crude, obscene language, he [Tutov] takes them to task, and a conflict occurs on this basis,” Marchenko said Sunday on NTV, relating investigators’ view of the incident in present tense. 
Tutov was hospitalized with a fractured cheekbone, a concussion and bruises, RIA-Novosti reported. 
Moscow prosecutors were treating the incident as an act of hooliganism — a decision that prompted an outcry from Tutov’s lawyer, Ruslan Koblev.
“This is another attempt to qualify an ethnically motivated crime as an act of hooliganism,” Koblev said, RIA-Novosti reported.
Prosecutors and police have classified as hooliganism a series of attacks by young men on dark-skinned people in recent years. Human rights activists have accused the authorities of, at best, passively supporting xenophobia by not labeling the attacks as ethnically motivated — a charge that on conviction carries a tougher prison sentence.
Marchenko said police were looking into the response to determine whether their response was adequate.
(AP, SPT)

TITLE: U.S. Journalist Freed in Dagestan
PUBLISHER: The Associated Press
TEXT: MOSCOW — A U.S. freelance journalist said Dagestani authorities had confiscated her notebooks, tapes and computer hard drives, threatened her, and subjected her to rounds of questioning for three days.
Kelly McEvers, 35, who is on a fellowship from the International Reporting Project at Johns Hopkins University and has written from Ingushetia and Vladikavkaz for Slate.com, arrived in Dagestan two weeks ago to research the impact of Islamic extremism.
“It’s obvious that this is another way for them to keep the world from knowing what’s really going on down here,” McEvers said Saturday by telephone from an apartment in Makhachkala, where she was expecting police interrogators to pick her up for another round of questioning. “Their end goal is just to scare the hell out of me and make it so I never come back again.”

TITLE: IN BRIEF
TEXT: Rink Roof Collapses
ST. PETERSBURG (AP) — Two children were injured Friday when the roof of a skating rink collapsed, emergency officials said.
The roof of the rink at Okhta Park, on the outskirts of St. Petersburg, partially caved in.
The collapse was possibly due to heavy snow accumulation, said Tatyana Striganyuk, deputy head of the St. Petersburg regional emergency services department.

New Job for Oligarch
MOSCOW (SPT) — Jailed Yukos founder Mikhail Khodorkovsky has stopped sewing and is now working as a packer at the sewing shop in the Chita prison where he is serving an eight-year sentence on politically tinged charges, his lawyer said Saturday.
The lawyer, Natalya Terekhova, said Khodorkovsky had been working as a seamstress’ apprentice and had to continue working in the sewing shop to avoid punishment, RIA-Novosti reported.

TITLE: Barriers Remain On The Road to National Projects
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — The government’s so-called “national projects” will do little to improve life in many villages and towns if children are unable to get to school, the sick are unable to get to hospitals and farmers are unable to get their produce to market because of bad or nonexistent roads.
This was the message from transportation officials, State Duma members and regional leaders who attended a conference organized by the Russian Chamber of Commerce and Industry on Friday.
The government is planning to spend more than $4 billion this year on President Vladimir Putin’s four national projects — agriculture, education, health care and residential housing.
But unless an effort is made to improve roads, this will mean little for the more than 30 percent of villages and small towns — some 50,000 population centers across the country — that are cut off from road networks at least part of the year, the Russian Chamber of Commerce and Industry said in a statement. Some 17,000 villages and small towns that had no roads have already ceased to exist, it said. 
Many villages can be reached only by dirt tracks, which tend to be buried under snow during the long winter, flood in the spring and turn into a slippery, muddy mess when it rains. Reaching a school or medical clinic even in a neighboring village or town under such conditions can be all but impossible. 
“We are witnessing the destruction of the road industry,” State Duma Deputy Viktor Lazutkin, deputy head of the Duma’s Industry, Construction and Technology Committee, said at Friday’s conference.
The economic costs are high. Each year, Russia loses up to 500 billion rubles ($18 billion) due to bad and non-existent roads, the Transportation Ministry estimates.
Agriculture, one of the sectors the government is trying to boost, is particularly hurt by the poor roads infrastructure. 
Transportation accounts for 40 percent of the net cost of domestic agriculture products, while the same figure in Europe stands at 10 percent to 12 percent, the Russian Chamber of Commerce and Industry said. Bad roads are a major reason why Russia’s meat and milk industries are suffering, it added. 
Even near major cities, many roads are poorly surfaced and congested, further delaying deliveries and driving up prices. 
Russia needs to spend between 600 billion rubles and 800 billion per year to maintain and build roads, Oleg Belozerov, head of the Federal Road Agency, which is part of the Transportation Ministry, said at the conference.
Last year, 250 billion rubles (close to $9 billion) in budget funds was spent on roads, a spokesman for the ministry said Friday. It was not clear whether this included regional and municipal funding as well as federal funding.
The Finance Ministry, however, was not encouraging, restating its position that extra spending risked driving up inflation. “The budget cannot be stretched endlessly,” ministry spokesman Vitaly Krasnyuk said. He suggested that one possible solution to the problems would be for road workers to do a better job. 
Belozerov’s figures were much higher than those he gave at a briefing last September, when he said Russia needed at least 400 billion rubles per year to develop its roads infrastructure. He said then that the government was on track to spend 131 billion rubles in 2005. The discrepancy could not immediately be explained.
In addition, there seemed to be some confusion about who is responsible for maintaining the country’s roads.
At Friday’s conference, participants called for the return of a separate federal fund to be used on roads infrastructure. Regional officials complain that they have to bear the brunt of all maintenance and construction work. 
Alexander Misharin, deputy transportation minister, said federal, regional and municipal governments were still unclear about which roads they were responsible for, and thus it was important to move ahead with plans to change road classifications. “We should assign an owner to every road,” he said at the conference.
Misharin said he had pinned his hopes for improving Russia’s road network on plans to construct new toll roads with the help of private investment, including one between Moscow and St. Petersburg. He also said he was seeking money from the state investment fund, which has $2.5 billion to distribute this year.
The problem of roads will be addressed at a government meeting later this month and at a State Council meeting with regional leaders in September, Misharin said. 
The council tasked with implementing the national projects, led by First Deputy Prime Minister Dmitry Medvedev, will hold its next meeting on Friday, Interfax reported. 
 Ulan-Bator has asked Moscow to build 1,500 kilometers of roads in Mongolia and in return is ready to give Russia a mineral deposit, Interfax said, citing the Transportation Ministry. On Friday, Transportation Minister Igor Levitin met with his Mongolian counterpart, Tsegmed Tsengel, the news agency reported.

TITLE: Brazilian Astronaut Offers a Lesson in Flight
AUTHOR: By Peter Muello
PUBLISHER: The Associated Press
TEXT: RIO DE JANEIRO, Brazil — Brazil’s first astronaut, Marcos Pontes, has won the global attention that he feels his country deserved a century ago.
Pontes, who docked with cosmonaut Pavel Vinogradov and U.S. astronaut Jeffrey Williams at the international space station on Saturday, dedicated his flight to the memory of Brazilian inventor and aviator Alberto Santos Dumont.
Pontes planned to take with him a Panama hat used by Santos Dumont, the Brazilian who — as all schoolchildren there learn — is said to have invented the airplane but did not get credit for it.
“At the moment of takeoff, I want to recall that 100 years ago another Brazilian took off, also outside Brazil, in France, for another important mission,” Pontes said before his Soyuz TMA-8 took off Thursday from Baikonur Cosmodrome in Kazakhstan.
Santos Dumont flew a bamboo-and-silk biplane in Paris on Nov. 12, 1906, and was hailed across Europe as the inventor of the airplane. Brazilians say the Wright brothers cheated by using a takeoff ramp and were helped by a tail wind in their 1903 flight.
But today, Pontes has become the face of Brazilian aeronautics.
The 43-year-old is featured daily on Brazilian television news broadcasts and on newspaper pages. 
“This is the beginning of a new era for the people of Brazil. We have opened new frontiers with this mission,” Pontes told Globo television from the space station. “This is not only a personal dream, it’s a realization that can positively impact the Brazilian youth.”
He compared the Earth’s view from space to his mother’s eyes, which are blue. “She always said I could achieve anything that I dreamed of,” Pontes said. “That’s the message I want to leave to everybody.”
Born into a poor family in the southeastern city of Bauru, 700 kilometers west of Rio de Janeiro, Pontes helped pay for his studies by working as an electrician’s assistant at age 14.

TITLE: Moscow Mayor Shot 15 Times
AUTHOR: By Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — The bullet-riddled body of a Moscow region mayor was found in a children’s playground close to his home early Friday in what prosecutors believe was a contract murder.
Dzerzhinsky Mayor Viktor Dorkin was walking home at around midnight after speaking on live television when he was apparently attacked by two men with handguns, Channel One television reported, citing investigators.
Dorkin was shot 10 times in the head and four times in the chest, Channel One said. Dorkin rarely traveled with bodyguards, according to media reports.
Dorkin’s body was discovered at around 3 a.m. in a playground, said a spokeswoman for the Moscow region prosecutor’s office.
Dorkin, 52, had since 1991 presided over the administration of Dzerzhinsky, a major military-industrial city in the region, and investigators believe his murder was connected to his official duties, said the spokeswoman, who declined to give her name.
She said she could not say who discovered Dorkin’s body.
Deputy Prosecutor General Nikolai Savchenko is personally overseeing the investigation, and he visited the crime scene Monday morning.
“There are a lot of questions,” Savchenko said on NTV television. “Dorkin worked in this post for more than 15 years. Right now, we are studying all aspects of his work and all of the people he may have had conflicts with.”
Dorkin was assaulted two years ago, but the assailants were never found, NTV reported.
Itar-Tass reported that until a new election could be held, Dorkin would be replaced by one of his deputies.

TITLE: Bush Will Prod Putin Within G8
PUBLISHER: Combined Reports
TEXT: WASHINGTON — U.S. President George W. Bush said he would raise concerns about Russia’s record on democracy at the G8 summit in July, but that he believed Moscow understood its interests lay in working with the West. 
Some U.S. lawmakers have suggested that the United States consider boycotting the summit of the Group of Eight industrial nations in St. Petersburg. 
But Bush said Wednesday that that would deprive him of an opportunity to talk candidly with President Vladimir Putin about U.S. concerns. 
“I think that would be a mistake for the United States not to go to the G8,” Bush said. “Because I need to be in a position where I can sit down with him and be very frank about our concerns.” 
Critics say Russia is backsliding on democracy by neutralizing political opposition, weakening the media and curtailing freedom of expression. 
“I’ve worked very hard to convince Vladimir Putin that it is in his interest to adopt Western-style values and universal values — rule of law, freedom of religion, the right to people to assemble, political parties, free press,” Bush said during a question-and-answer session after a speech to Freedom House, an independent organization that supports the expansion of freedom in the world.
 
“I spend a lot of time with the president making it clear that he should not fear democracy on his border nor should he fear democracy within his borders,” Bush said. 
Russia accuses the United States of promoting global democracy in an attempt to establish itself as the dominant power on former Soviet soil. 
Bush defended his approach toward Putin by recalling a meeting with rights activists in Moscow last May. “I remember meeting with human rights groups in Russia,” Bush said. “And I asked them what strategy should I take as the president of the United States. Should I be in a position where I can engage the president in frank discussion? Or should I, you know, publicly scold him? In which case he may turn a deaf ear.
“And the universal consensus for them kind of played to my own instincts, which is that it is important for the United States to be in a position to be able to express our concerns,” Bush said.
Bush also said other nations relied on the United States to argue on their behalf with Putin, and that he would not want to lose that ability by offending Putin by not attending the G8. He said it was in their interest for him to be in the position “where I’m able to walk into the room with the president of Russia and him not throw me out.”
 U.S. Secretary of State Condoleezza Rice said the best safeguard against an authoritarian government in Russia would be a balance of power among the executive, legislative and judicial branches of government. 
“When there is too much concentration of power in the executive with authority and power in either the legislative or the judiciary, then you are setting up conditions for authoritarianism,” Rice told a conference of the American Society of International Law on Wednesday. 
Jose Alvarez, president-elect of the group, responded: “I was very encouraged to hear the secretary praise separation of powers. There is concern about this much closer to home.”
The crowd of legal scholars and lawyers broke into applause. 

(Reuters, AP)

TITLE: Cabinet Backs the Drive for More Troops
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — Defense Minister Sergei Ivanov last week won the Cabinet’s approval for legislation that would allow the military to enlist more conscripts, and he asked for more money to hire volunteer soldiers.
The Cabinet debated behind closed doors the two bills that would cancel or change nine of the 25 draft deferments and require university students to serve upon graduation.
Colonel General Vasily Smirnov, head of the mobilization department of the armed forces General Staff, said afterward that the Cabinet had given its blessing, paving the way for the bills to be submitted to the State Duma.
Ivanov has said the proposed measures will allow the military to make up for a forecast shortage of conscripts after the length of mandatory service drops from two years to one in 2008. During the transition phase, conscripts drafted next year will serve 1 1/2 years.
One of the bills would remove deferments for rural teachers and doctors as well as employees of many state-owned research institutions, Smirnov said. Also, young men would be eligible for enlistment even if they were caring for retired or disabled relatives, had pregnant wives or were raising children under age 3.
The other bill would transform most of the Defense Ministry’s 229 education departments at higher learning institutions into military education centers, Channel One television reported. If students were to take courses at the centers, they would have to serve as officers for three years after graduation, it said.
Under the current law, the Defense Ministry transfers the students who take the military courses into reserve units, and they do not have to serve active duty. If students do not take the courses, they are eligible for enlistment as regular conscripts when they graduate.
At the Cabinet meeting, Ivanov said a federal program to hire more volunteer soldiers needed an extra 5.3 billion rubles ($190 million) because of inflation, Interfax reported. Adopted in 2003, the program mostly funds the construction of housing for volunteers, he said. 
Ivanov said he had ordered military units to stop recruiting contract servicemen if the units could not house them. More than 60,000 soldiers and sergeants now serve on contracts, he said.
The ministry plans to draft 124,000 conscripts during the spring draft that kicks off on Saturday. The armed forces comprise 1.1 million people. About 500,000 are rank-and-file servicemen, said Anatoly Tsyganok, head of the Center for Military Forecasting, a think tank.
State Duma Deputy Vladimir Ryzhkov and the head of the Union of Soldiers’ Mothers Comittees rights group, Valentina Melnikova, who together lead the liberal Republican Party, on Thursday reiterated a call for Ivanov’s resignation and civil resistance to the spring draft. A key reason for Ivanov to step down, they said, was the hazing of Private Andrei Sychyov in Chelyabinsk on New Year’s Eve. Doctors later had to amputate his legs and genitals.
As a way to avoid conscription, Melnikova urged conscripts to write letters to President Vladimir Putin, Prosecutor General Vladimir Ustinov and their governors and ask that their physical safety be guaranteed as a condition for service.

TITLE: Zhirinovsky Funniest Pol
PUBLISHER: The St. Petersburg Times
TEXT: Vladimir Zhirinovsky, the leader of the ultranationalist Liberal Democratic Party, is the country’s wittiest politician, while President Vladimir Putin is a distant second, according to a new poll.
A total of 57 percent of people surveyed by the the state-controlled VTsIOM polling agency said that Zhirinovsky had the best sense of humor of any politician, and 17 percent said the same about Putin.
But 30 percent of respondents said they could not think of any politician who had a sense of humor.
Mayor Yury Luzhkov took third place in the survey, with 3 percent, while Unified Energy Systems chief Anatoly Chubais took fourth, with 2 percent.
Asked whom they would like to joke with, most — 58 percent — said they could not name a politician who would put them in a joking mood. Twenty-three percent picked Zhirinovsky, and 5 percent picked Putin. Chubais, however, placed second in this category, with 7 percent. 
Two percent each said they would like to joke with Communist leader Gennady Zyuganov, Luzhkov and liberal politician Irina Khakamada.
The poll of 1,592 people was conducted on March 25 and 26 in 153 cities across the country. 
It has a margin of error of 3.4 percentage points.

TITLE: MasterCard Scraps Agents
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The Russian office of one of the largest international payment systems, MasterCard, last week announced that it would stop the agent agreements that let banks economize on membership fees.
“For banks to participate in the issuing of cards and acquisition of operations they must enter the MasterCard International payment system as a principal or an affiliate member,” MasterCard International said in an official statement.
The new rule should be in practice by Jan. 1 2007.
So far MasterCard has allowed banks that are not members of its network to distribute cards issued by member banks using agent agreements. Its major competitor, Visa, gave up this practice two years ago but MasterCard continued in the hope of increasing membership numbers.
At the moment, almost 25,000 financial institutions around the world are MasterCard customers. According to MasterCard’s annual report, in 2005 749.3 million MasterCard-branded cards (excluding Maestro and Cirrus) were used, generating $1.7 trillion gross.
The decision should help banks “to more fully realize the potential of card programs,” Kommersant daily quoted the head of MasterCard’s representative office in Russia, Andrei Korolyov, as saying.
170 Russian banks are currently members of MasterCard International, 56 of them are principal members and also belong to the non-profit organization the Russian Association of Europay Members, said Galina Vaganova, head of the retail department for cooperation with payment systems and banks in St. Petersburg.
The Russian Association of Europay Members is comprised of 62 Russian banks, which account for over 80 percent of turnover from card issue and use.
The precise number of agent banks is hard to define because they are not registered, Vaganova said. She doubted that “all agent banks would rush to register as MasterCard members since it comes at a cost.” Non-member banks could enter the system as affiliate members with sponsorship from one of the 56 Russian banks that are principal members or Russian Association of Europay members. But if the requirements of the payment system aren’t changed, most of them will gradually register, Vaganova said.
Dmitry Khodarkevich, head of the retail department at Vneshtorgbank in St. Petersburg, said MasterCard’s decision would not significantly affect the Russian banking sector. 
“Major market players are already MasterCard members. Agent banks are small banks, and membership would not be a particular burden for them,” he said.
“MasterCard membership is not expensive for banks, especially with sponsorship from the Russian Association of Europay Members. In this case the initial fee for affiliate members is about 11,000 euros ($15,000). For comparison, affiliated membership of Visa costs about $60,000,” Khodarkevich said.
“Banks will not switch to other payment systems, because Visa and MasterCard occupy 95 percent of the market in the European part of the country,” he said.

TITLE: Tapping the Business of Travel
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Andrew’s Travel House, Russia’s third largest business travel firm, has declared its intention to open 15 new representative offices over the next year in an ambitious bid to quadruple its turnover, the company said Thursday at a press conference.
ATH appeared in January 2002 as a result of the merger of two business travel companies — Andrew’s Consulting and Travel House — which had operated since 1994. ATH currently has one representative office in London and four in Russia.
“Our offices in Moscow and St. Petersburg have been operating for a long time. This year we opened offices in Samara and Nizhny Novgorod. They are test ventures. We are looking at their performance to estimate the profitability and payback period. In August or September we will be ready to open new offices across Russia,” said Andrei Voronin, general director of ATH.
ATH receives about 80 orders a year, which include both visa support and transport tickets. Voronin refused to disclose company turnover for the last year.
Their major clients include Procter & Gamble, McDonald’s, L’Oreal, LUKoil, MTV, Nestle, Pfizer and Volvo.
Though business travelers account for only 20 percent to 25 percent of tourists, they provide 60 percent of the turnover. Business travel firms are less vulnerable to economic slowdowns and crises, according to ATH experts. ATH estimates the corporate travel market in Russia at about $500 million, which over the next year should increase by 2.5 times.
However some experts were not as optimistic. 
“Unfortunately, market growth is slowing. The reasons are obvious. The number of tourists visiting Russia is falling because of a spreading spirit of nationalism, increasing levels of crime and instability in the Caucasus,” said Yury Sarapkin, executive vice president of the Russian Business Travel Association.
Sarapkin confirmed that ATH is one of the largest business travel firms in Russia but warned against ranking particular market players, saying such rivalry between companies could only scare away clients and would not contribute to market development.
At a regional level, statistics show that companies do not spend much on tourism and entertainment — unlike individual tours, group business trips are still rare. According to recruitment company ANCOR’s latest review of salaries, only a few local employers practice corporate tourism as part of their social policy. 
Only 57 percent of the local companies questioned regularly organize summer corporate (entertainment) events for employees.
“They include picnics, parties, team-building programs, and day-trips. The average cost of such events is $67 per person, but it can vary between $17 and $250 per person,” said Natalya Martikainen, project manager at ANCOR.
However, Oleg Kubatko, head of the HRM project at Begin Group consultancy, said that corporate travel is gaining popularity in Russia.
“This growth has been stimulated by the increasing number of companies that interact with foreign partners. When such cooperation is regular, it is more convenient to organize visas, tickets, hotels, car rental and so on, through a specialized company,” he said.

TITLE: Sibneft to Change Name As Petersburg Becomes Home
AUTHOR: By Michael Teagarden
PUBLISHER: Bloomberg
TEXT: ST. PETERSBURG — Sibneft will change its name to Gazpromneft and move its tax registration to St. Petersburg, the head of Gazprom said Friday.
Gazprom CEO Alexei Miller made the announcement in St. Petersburg, Gazprom spokesman Sergei Kupriyanov said by telephone from the northern capital, which is the hometown of Miller, Gazprom chairman Dmitry Medvedev and President Vladimir Putin.
Governor Valentina Matviyenko is spearheading efforts to lure taxpayers and government bodies to her city. State-controlled Gazprom, the world’s largest natural gas producer, agreed in October to acquire Sibneft from billionaire Roman Abramovich for $13.1 billion. Sibneft is currently registered in Omsk, Siberia.
“The board is planning an extraordinary meeting for May 13, where shareholders will be asked to consider a name change and a relocation of the company’s legal address,’’ Sibneft spokesman John Mann said by telephone. “The exact name hasn’t been finalized. The Sibneft name will be preserved as a consumer brand — used, for example, on gasoline stations.’’
Sibneft will be one of the biggest taxpayers in the city, Kupriyanov said. Gazprom sponsors Zenit, the only premier division football club in the city. 
St. Petersburg’s Legislative Assembly voted last week to spend 60 billion rubles ($2.2 billion) over the next 10 years on the construction of an office center for Sibneft and other Gazprom units. 
“Taxes paid to the St. Petersburg budget from registering Sibneft in our city will considerably exceed the city’s expenses on the construction of the business center,” Deputy Governor Mikhail Oseyevsky told local lawmakers before the vote.
Vneshtorgbank, Russia’s second-biggest bank, and Transnefteprodukt, the oil-product pipeline monopoly, are among the companies that have left the capital for St. Petersburg in the last two years.

TITLE: Gazprom Defends Schroeder Appointment, Loan Promise
PUBLISHER: Bloomberg
TEXT: MOSCOW — Gazprom, which is building a natural-gas pipeline from Russia to Germany, defended itself against charges it had acted improperly by naming former German chancellor Gerhard Schroeder to head the shareholders’ committee for the project.
Schroeder has been criticized by German opposition politicians for agreeing to head the shareholders’ committee of the North European Gas Pipeline Co. less than a month after leaving government in November. Schroeder’s Economy Ministry approved a guarantee for a 1 billion-euro ($1.2 billion) loan to the Gazprom-led project a month before he stepped down.
Gazprom didn’t ask for the loan and doesn’t need the money to build the first link of the pipeline, which runs above ground to the Baltic Sea, Gazprom spokesman Sergei Kupriyanov said by telephone Monday. He declined to specify the cost of the above-ground segment and said the company planned to pay for it out of its own funds.
Talks with Schroeder on taking over the pipeline post took place “after he had finished his political career,” the company said in an e-mailed statement. “Gazprom is the world’s biggest exporter of gas, a first-class borrower and generally doesn’t use state credit guarantees.”
The company held talks with Schroeder about the post of shareholders’ committee chairman on Dec. 9, 2005, Gazprom said in the statement. Schroeder, 61, said last week at a press conference in Moscow that he had accepted Gazprom’s nomination to the post that same day.
“My acceptance dates exactly from Dec. 9, 2005, and I gave it directly to the Russian president,” Schroeder told Reporters.

TITLE: MMK Ahead in Race for Pakistan Steel
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — Magnitogorsk Iron & Steel Works, or MMK, is set to win an auction for Pakistan’s largest steel factory after placing the highest bid with two foreign partners Friday. The victory would mark the Russian steelmaker’s first foray into foreign markets.
MMK formed a consortium with Saudi Arabia’s Al-Tuwairqi Group and Pakistan’s Arif Habib Securities to bid on equal terms $361 million for 75 percent in Pakistan Steel Mills, the only integrated steelmaker in the South Asian country.
MMK’s consortium outbid by $8 million an alliance of Ukraine’s Industrial Union of Donbass and its three Middle Eastern partners and is widely expected to win the auction. The Pakistani government will officially announce the winner this month.
The move by MMK comes as cash-rich Russian steelmakers are increasingly looking to acquire production units abroad, hamstrung by low internal demand and desperate to expand into the lucrative but restrictive European and Asian markets.
“We think that in forming an alliance with companies that have experience operating in this region and are well acquainted with its specifics, we will be able to expand our company more effectively,” MMK board chairman and major shareholder Viktor Rashnikov said Friday in a statement.
MMK’s success could prove particularly profitable as Karachi-based Pakistan Steel Mills enjoys a strong position in the Asian country, where demand has traditionally exceeded supply. Its annual production is 1.1 million tons. 
MMK’s deal would mark its first acquisition of a foreign asset, as the company seeks greater international presence not only through increased sales and acquisitions but also through recent moves to nominate high-profile foreign executives to its board.
In 2005, Rashnikov indicated that MMK would seek a foreign listing in a couple of years, following the lead of domestic rivals Evraz and Novolipetsk Steel, both of which floated in London last year.
“Any foreign buy is important for a Russian steel company because there have not been many of them, and the companies know they cannot grow much further domestically,” said Alexander Pukhayev, an analyst with Deutsche UFG.
Arif Habib Securities is part of a Pakistani group that specializes in finances, with its only industrial assets being one fertilizer plant and several cement factories. Al-Tuwairqi has mid-size steel operations in Damman, Saudi Arabia, though the company pledged in 2004 to invest $100 million in a steel billet plant near Karachi.
Aton analyst Timothy McCutcheon saw the consortium as mainly a political tactic, while analysts at Standard & Poor’s suggested MMK would eventually buy out its partners in the steel mill.

TITLE: Easing of Bank Rules Ahead of IPOs
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia will make it easier for foreigners to buy stock in banks to help lenders raise money in initial public offerings, as many of four of which are planned for this year.
The central bank plans to allow foreigners to buy less than 1 percent of a bank’s shares without notifying regulators, versus mandatory notification for buying even a single share now, central bank Deputy Chairman Andrei Kozlov said.
“The time has come for these changes to be put into practice and not only talked about,’’ Kozlov told a conference in Moscow on Monday, without saying when the changes will take effect.
Foreigners will still need to apply to the central bank to buy more than 10 percent of a Russian lender, he said.
As many as four Russian banks may sell shares to the public for the first time this year as economic growth boosts demand for consumer and business services, Kozlov said last month. The economy is expanding for an eighth-straight year, driving demand for corporate and retail loans as companies modernize, requiring lenders to boost capital.

TITLE: Tsiffrograd Loses Ground After Franchising Failure
AUTHOR: By Ilya Shatilin
PUBLISHER: Special to The St. Petersburg Times
TEXT: The federal mobile retail chain Tsiffrograd has recognised the inefficiency of its use of franchising and started to buy up the stores of its partners. Tsiffrograd has already yielded 17 of its St. Petersburg stores, situated in the Adamant shopping complexes, to its main competitor — Yevroset. 
A company press-release cited high rental costs as the reason for suddenly ceding its Adamant stores. Yet recently Tsiffrograd bought out the stores of its franchisees — KS group, Technosvyazi and Telekom Point.  
A disenchantment with franchising remains the only possible explanation for this behavior, not least given that the rental price in Adamant has not, in fact, increased. A core of Tsiffrograd’s St. Petersburg managers will now consist of former top managers from Telekom Point.
It is worth recalling that in the summer of 2005, Tsiffrograd entered the St. Petersburg market with the idea of uniting under its brand the stores of three smaller dealers. However, although at present possessing the same number of stores as Yevroset, the company occupies only 11 percent of the market (according to IAA “Mobile Technology Week,” (MTW) — Tsiffrograd’s own rating is 14 percent), while Yevroset occupies 25 percent. The franchising scheme had not produced the goods: before being united as Tsiffrograd, the three players occupied 19 percent of the market. 
It appears that the company has understood this and tried to change its course away from franchising — in every region it is trying to buy out the stores of its franchisees. In St. Petersburg, however, Telekom Point preferred to sell its most valuable assets to Yevroset, which made a much better offer. Though the deal has yet to be finalized and so access to official information is limited, MTW estimates the deal to be worth $6 million.
Tsiffrograd had already announced its intention to increase its own share of the St. Petersburg market to 25 percent, but in reality its share could fall in relation to what it was previously:
“Obviously, that Tsiffrograd has lost such popular stores will not go unnoticed. It has taken only 11 percent of the 16 percent it had planned to acquire, and if the company gets bogged down in the process of renewal and in building a new management system its share could fall as low as 9 percent,” affirmed Denis Kuskov, director of MTW.
The market share of Yevroset, on the other hand, may grow to 30 percent because of its new purchases. Tsiffrograd losses may also favorably affect the market share of the company Telefon.ru — which is actively opening new stores.
According to the head of PR at Dixis, Tatyana Moskaleva, “Tsiffrograd’s actions confirm the inefficiency of pure franchising in the mobile retail sector. This year will see the peak of consolidation, and it’s not surprising that they have begun in St. Petersburg. Important local players have prompted federal chains to actively divide up their territory — this process will soon be observable in the regions.”
Ochir Mandzhikov, head press officer at DIVIZION group, said, “It’s clear that Telekom Point was not happy working under a foreign brand and was thus inclined to sell its stores. Tsiffrograd’s change of strategy was predictable. The company started franchising so that when stores were completely dependent on them they could buy out each business at a good price.

TITLE: Computing Beyond the Limits
AUTHOR: By Alexander Yankevich
PUBLISHER: Special to The St. Petersburg Times
TEXT: Having lost several millions of dollars over the course of the last couple of years, St. Petersburg’s computer retailers have begun actively looking beyond the city to more distant markets.
Compared to Moscow and many regional markets, in St. Petersburg demand is much more concentrated in  chainstores, which occupy 80 percent of the total market. 
In 2003, 50 percent of retail sales were already in the hands of the two most developed chains — the computer center ‘Key’ (the owner of 11 stores) and ‘Komputerny Mir’ (13). Today the situation is much the same. Of some 100 computer retailers in St. Petersburg, the only other stores of significance are Tsiffri (7 stores), Svega Plus, discount retailer Rik and Ultra Computers.
Nevertheless, with increased competition and falling profit margins, 2004 saw the first of these firms expand in the regions — if the ‘boom’ years of 2002-2003 saw market growth of up to 25 percent, recently that growth has slowed to between 10 percent and 15 percent. 
The director of business development at Tsiffri, Anatoly Grigoriev, has observed a changing structure of demand. Competition has increased in the form of electronics chainstores, which, not least with the arrival of firms from Moscow, have begun to challenge the market share of specialist stores.
In order to keep hold of clients and sustain sales, the largest retailers began changing their sales format. In 2004-2005 the surface area of computer retailers grew by 100 percent to 150 percent, which experts consider as much as five times more than the growth of demand over that period. Only three to four years ago an area of 80 square meters was considered normal for such a retail store, but from 2004 the standard rose to 150 square meters. Moreover, firms began opening supermarkets of several thousand square meters. 
Having exhausted the possibilities of scale, the only remaining solution was to find new markets.
The first St. Petersburg firm to move beyond the city limits was Komputerny Mir when it opened its store in Pskov. Last year Key did likewise, launching a store in Veliky Novgorod. These experiments have already proved their worth — both companies have managed to occupy up to 50 percent of the respective local markets. 
Experts see this success as a result of a number of factors — in particular, the companies’ use of the supermarket format, already tried and tested in St. Petersburg. It took only one year for each company to get returns on their investments (to open one shop costs around $500,000 to $800,000).
The growth of the regional market has played into the hands of these players. According to a representative of Intel in Northwest Russia, the computer business, in particular, is showing strong signs of growth. In St. Petersburg, Intel traditionally has a turnover of 70 percent to 80 percent, and only 20 percent to 30 percent in the northwest region. But this year turnover has been forecast as 60 percent in St. Petersburg and 40 percent, perhaps even 50 percent, in the northwest. 
Further afield the regional trend has continued. Komputerny Mir has opened stores in Cherepov and Arkhangelsk, and at the end of last year Key announced its intention to open a store in Petrozavodsk. 
But the ambitions of St. Petersburg’s companies are not limited to the northwest. Key is pushing through a relatively large-scale project in Voronezh, and from the beginning of this year Tsiffri began operating in Moscow, previously considered a non-starter for regional players. According to representatives from Tsiffri, the new store has fulfilled all their expectations, and already the company is planning to open another two stores in the capital. 
As for Key, its Voronezh project will consist of a 1,500 square meter store, due to open mid-April, into which the company is planning to invest around 250 million rubles ($9.1 million). 
In Petrozavodsk Key intends to build an even larger store of 3,000 square meters. This is logical — in Petrozavodsk the company is only competing with local firms, while in Voronezh its rivals include two Moscow chains — Sunrise and Polaris (the latter is also actively developing in St. Petersburg); though Sunrise is more orientated toward the corporate sector and won’t offer much competition to Key.
Denis Kusnetsov, commercial director at Sunrise, evaluated the company’s chances in Voronezh:
“Key has a decent chance of creating its own niche, since there is currently no specialized computer supermarket in the city, while electronics retail has already been actively developed. At the same time, when evaluating potential sales, one needs to take into account the local mentality — advertising is the basic factor that influences buyers — they rarely go round comparing prices and service. The new company will have to spend a considerable amount on advertising. They have a good chance of occupying around 10 percent of the Voronezh market.”

TITLE: The Law Moves in Mysterious Ways
AUTHOR: By Alex Meredith
PUBLISHER: Special to The St. Petersburg Times
TEXT: When it comes to merging and acquiring competitors, lawyers generally like to stick to the paperwork and let their clients go forth and conquer.  
However among international law firms in St. Petersburg there has been a rare period of predatory activity in the past 12 months. With EYLaw being snapped up by global invaders DLA Piper and the arrival of white knight Chadbourne & Parke to rescue retreating Coudert Brothers, a new set of battle lines have been drawn across the legal landscape. 
The first orders for new business cards were made last summer when DLA Piper Rudnick Gray Cary completed the acquisition of EYLaw CIS.  Leading the charge through the accountants’ doors was Olga Litvinova, now managing partner of DLA Piper.  
“I don’t think you can speak about takeovers in a professional services context,” Litvinova said, describing the move.  “A firm is built on relationships between lawyers and clients so integration of both into a new business is a very delicate procedure.”  
Since all of EYLaw’s clients moved to DLA Piper once the merger had been completed, the process appears to have been achieved without a hitch.  
Litvinova puts this success down to intrinsic similarities between the two firms.  
“As a multidisciplinary firm, EY was very client focussed, tendering to their every need.  DLA is a ‘full service global firm’ which is different terminology for the same primary objective,” she said.     
Another similarity in expertise has made the hook up between EYLaw and DLA Piper a promising fit.  With former U.S. Senator George Mitchell as Chairman, and a strong presence in Washington D.C., DLA Piper has a tradition of helping clients with regulatory and lobbying issues. EYLaw was also extremely successful advising clients on how best to approach an often-intimidating Russian bureaucracy.  
“We have never been afraid to go to the state and say there is a problem before setting out possible solutions,” Litvinova said.
Nevertheless, the firm has been through a period of massive expansion in a relatively short space of time.   
Since the merger of UK-based DLA with U.S. firm Piper Rudnick Gray Cary on Jan. 1 2005, the network has mushroomed to 58 offices and 3,100 lawyers, the second biggest by lawyer numbers in the world.   
Some commentators believe that the firm has expanded too quickly, though Litvinova disagrees.
 “Because we have a critical mass in key areas across the world we feel equally strong across the network, and it is now a very comfortable position for the firm,” she said.
With 104 years behind it, there are no such continuity concerns at Chadbourne & Parke, the latest arrival to St. Petersburg’s legal scene.  For this New York-based firm, which has had an office in Moscow since 1990, it was simply a case of the right opportunity to expand coming at the right time.  
“We had been looking on and off for years for an opening in St. Petersburg, but not until the withdrawal of Coudert Bros did we find the right number of lawyers of a high enough quality in the city.  It was perfect timing for us,” Chadbourne & Parke’s Managing Partner, Laura Brank, said.  Successfully recruiting the entire staff of Couderts has allowed the newcomers to hit the ground running in the city since the move in November.  
“It was a very smooth transition and we are now looking to expand,” said senior counsel Alexander Kalinov.  “A new senior attorney from the U.S. is just settling in and we are selecting the best young interns to boost our junior ranks.” 
Unlike the rapid expansion of DLA Piper, Brank sees Chadbourne’s current focus to be on the emerging markets.  
“With such a strong oil and gas practice Russia is a very important market for us.  We have already had a lot of success here and we are sure that will continue in St. Petersburg,” Brank said.    
Rated as St. Petersburg’s number one for Corporate Commercial and Mergers and Acquisitions by Legal500, Baker & McKenzie managing partner Maxim Kalinin knows all about success in this market.  He is reserving his judgment on these new challengers. 
“The spectacular growth of DLA Piper is exciting, but it will also be challenging, we have yet to see the full consequences,” he said.   As for Chadbourne & Parke, “they will have a similar effect as Coudert’s practice, but we anticipate them taking advantage of the firm’s stronger network in the CIS.” 
For Salans, the fourth international player in the city, the DLAPiper-EY merger is the most significant development. Glenn Kolleemy a partner at Salans’ St. Petersburg office said he  “did not see any impact arising from Chadbourne’s arrival.  Both they and Couderts are strong firms with distinguished traditions.  The EYLaw move, on the other hand, makes DLAPiper the largest law firm in St. Petersburg and our number one competitor.”
However Kolleemy considered the French firm’s expansion strategy capable of keeping them one step ahead of the new competition.  
“Salans has the intention to expand both in Russia and internationally.  We are very interested in the Russian regions and have focused in particular on the south [Krasnodar and Rostov] and the Volga region,” Kolleemy said.   
Across the board, there was agreement that economic growth in St. Petersburg has made demand for legal services extremely strong.  
“As well as the redevelopment of industrial sites, there is a boom in external investment, mergers and acquisitions and prime real estate work in St. Petersburg at the moment” Kalinin said.  This sentiment was echoed by Kolleemy. “St. Petersburg is likely to outperform the Russian economy on average and there is little doubt that the city will perform better than most regions in Russia,” Kolleemy said.

TITLE: The Importance of Keeping Cool
AUTHOR: By Yegor Gaidar
TEXT: In an article in the latest issue of Foreign Affairs, the U.S.-based journal, Keir Lieber of the University of Notre Dame and Daryl Press of the University of Pennsylvania laid out results of calculations according to a model they have developed. They show that the United States has developed nuclear capacity sufficient to launch a strike guaranteed to wipe out Russia and China, without the risk of suffering a return strike.
They also provide a detailed explanation for Russian and Chinese leaders of the purpose of America’s anti-missile defense system. The system is not about preventing the threat of attack from “rogue” nations, they argue, but rather, about enabling the United States to dramatically reduce the risk of a nuclear counter-strike by Russia and China after a nuclear attack by the United States.
America is a free country and what these two authors wrote in their article, entitled “The Rise of U.S. Nuclear Primacy,” is their business. The trouble is, when addressing such a delicate issue, it would be good to understand the responsibilities that go with it.
I am a professional economist who once headed the government of a nuclear state, and I have some expertise both in models and nuclear weaponry. When I read passages about how U.S. cruise missiles launched from B-52s would “probably” be invisible to Russian air-defense systems, I am struck by the word “probably.” My question is: If the authors’ guess about the invisibility of these weapons turns out to be wrong, to whom do they plan to explain the reasons for their mistake?
The world came closest to nuclear war in 1962, in the Cuban missile crisis. At the time, dramatic events were occurring within 100 kilometers of the U.S. coast. U.S. military planning was based on the assumption there were no Soviet tactical nuclear weapons on the island, as supported by data from the CIA and U.S. military intelligence. Just a reminder: These events took place in a country nearly 155 times smaller than modern-day Russia. Acting on its hypothesis, the United States drew up plans for bombing and invading Cuba. Only 27 years later was it discovered that, at the time, more than 100 Soviet tactical nuclear charges were already in Cuba. Anyone who knows their Cold War history might envy the authors’ confidence in their complete understanding of how the potential enemy organizes its nuclear forces and control systems. Once again, the authors enjoy an indisputable advantage if proved wrong, no one would be left to tell them.
All this could be labeled as mind games, if not for the critical international consequences. There are plenty of Russians who have a similar global vision and believe that the United States is preparing its capability for a nuclear strike against Russia. However, the publication of such ideas in a reputable U.S. journal has had an explosive effect. Even Russian journalists and analysts not inclined to hysteria or anti-Americanism have viewed the article as an expression of the U.S. official stance. As China is more closed, it is harder to gauge the authorities’ reaction, although I fear it may be similar.
Since Soviet times, I have disliked the word “provocation.” But if someone had wanted to provoke Russia and China into close co-operation over missile and nuclear technologies, it would have been difficult to find a more skillful and elegant way of doing so. Soviet military planning rested on the concept of the “return-counterstrike.” That meant if a threat from an enemy arose, a Soviet nuclear strike would follow. The chances of a comeback for this doctrine are stronger now which will hardly help strengthen global security.
Over the past few years, I and many colleagues have fought for Russia to maintain a sound economic policy amid high oil prices. The Stabilization Fund, into which windfall oil taxation revenues have been paid, constituted one element of that struggle. Now I fear the battle is lost. It is not hard to guess where the resources from this fund will now be directed.
The world is confronting a serious challenge associated with Iran’s nuclear program. 
The united stance of the United States, Europe, Russia and China is a key prerequisite if we are to deal with this challenge. In the circumstances, mutual suspicion of nuclear strike preparations forms the worst backdrop for such co-operation. Were I an Iranian leader, I would have paid a handsome fee for such an article.
When you are provoked, it is important to keep cool and look at who is trying to get you to lose your temper. Let us hope that Russian and Chinese leaders will have enough common sense to understand this.

Yegor Gaidar, a former prime minister of the Russian Federation, is director of the Institute for the Economy in Transition. He contributed this piece to the Financial Times.

TITLE: Saving The Right to A Free Flat
AUTHOR: By Anastasiya Lebedev
PUBLISHER: Staff Writer
TEXT: With just over nine months remaining before Russians lose the right to privatize state-issued apartments, a legislative race has begun to extend the deadline or abolish it altogether.
More than 20 percent of eligible Russians have failed to exercise their right to privatize their apartments despite having had two years to do so since the deadline was first announced in 2004, said Pavel Krasheninnikov, a United Russia deputy and the chairman of the State Duma’s Legislation Committee.
Krasheninnikov, the author of a bill regulating the privatization of dacha plots that passed its first reading in the Duma on March 24, announced that he would tack on an amendment extending the deadline for the privatization of free apartments before the second reading. 
Another bill tackling the privatization deadline, set for Jan. 1, 2007, is scheduled for a first reading on April 21.
The deadline must be extended because local authorities had failed to prepare for the crowds of people trying to privatize their apartments before the cutoff date, Krasheninnikov said.
The previous Housing Code, from 1983, allowed anyone seeking improved housing conditions to join a waiting list for a free apartment and receive one after several years. Free privatization of state-issued apartments was made available to Russian citizens in 1991. 
The new Housing Code, effective since March 2005, states that only the needy are to be placed on the waiting list, and the apartments they receive are not to be privatized but only rented from the state at nonmarket rates.
Krasheninnikov intends to bundle his privatization deadline extension proposal together with his dacha bill in order to speed up the extension, the deputy said.
Independent deputy Galina Khovanskaya’s alternative bill would do away with privatization time limits altogether. The bill, which proposes amending the Housing Code and the Civil Code, was this month approved for a first reading by the Duma.
Khovanskaya, a vocal critic of the Housing Code at the time of its passing, said her bill aimed to patch up problems she had originally warned against.
Extending the privatization deadline would once again create a rush when the next deadline approached, as well as slight those who had been on waiting lists since the 1980s and counting on an apartment eligible for privatization since 1991, she said.
In addition, the deadline for deprivatization, or returning an apartment to the state and renting it back, also set for Jan. 1, 2007, will become an issue once people realize that building repairs and renovations are costly, Khovanskaya said.
Under the old code, the state was responsible for such repairs and renovations, but the new code shifted the burden to apartment owners. Khovanskaya said people who found themselves unable to meet the expenses of property taxes, insurance and renovations should be able to go back to renting from the state at discounted rates.
Also, she said the state should compensate those whose apartments lost value because scheduled repairs and renovations were not performed when the state was responsible for them.

TITLE: The Art of the Judiciary
AUTHOR: By Masha Gessen
TEXT: There has been more news about the courts in the last couple of weeks than, it seems, in the entire period since the Khodorkovsky trial ended. Courts are funny things. 
The courts exist to uphold justice. At the same time, the courts exist to enforce laws. Laws are written and passed by human beings, often operating on the basis of insufficient information or pursuing hidden agendas, and are therefore often unjust. The art of the judiciary is using imperfect, unjust laws to create justice. That’s what serves to make court trials a fascinating spectacle under some circumstances (witness popular TV shows). It’s also what makes courts so vulnerable to being used to corrupt or blatantly political ends (witness the Khodorkovsky trial). And it’s  what makes recent legal news so interesting.
Take the acquittal last week of Oleg Shcherbinsky, the driver sentenced to four years in a labor colony over the death of Altai Governor Mikhail Yevdokimov. Shcherbinsky was originally found guilty because he did not move his car out of the way fast enough when the governor’s car came speeding down the highway. Drivers all over the country protested the verdict until United Russia chimed in to support the jailed driver. An appeals court promptly reversed the conviction and set Shcherbinsky free.
Or take the case of Khursheda Sultonova, a 9-year-old girl from Tajikistan who was murdered in St. Petersburg two years ago. A jury considered the charges against a teenager accused of attacking the girl, her father and her cousin, and last week found him guilty only of hooliganism. Seven other defendants were charged only with hooliganism; six were found guilty and one was acquitted.
Now let’s take another hate crime case, this one in Moscow. On Jan. 11 of this year, 20-year-old Alexander Koptsev entered the Chabad Synagogue during a service and stabbed nine men. Less than three months later, he was sentenced Monday to 13 years in prison for attempted murder motivated by ethnic prejudice.
In Novosibirsk, eight young men were sentenced for a series of assaults on non-Russians. According to the prosecution, they spent the summer of 2002 stalking and attacking people from the post-Soviet south while shouting Russian and white-supremacy slogans. On Tuesday, the court found them guilty of racially motivated assault but not of inciting ethnic enmity, because, the judge explained, the attacks occurred at night, when no one was around to be incited.
Finally, also this week, a court in St. Petersburg failed to convene a jury in the case of 14 people charged in the murder of a Vietnamese student last summer, and four more who are charged as accomplices in inciting ethnic enmity. 
Potential jury members used every excuse possible to get out of serving in the case. Defense attorneys are convinced people simply do not want to take part in a controversial case like this — a plausible explanation considering that Russian courts only very rarely encounter this sort of problem.
Here we have five illustrations of the state of the Russian courts: confused, indifferent to both justice and the law, but desperate to carry out the will of an increasingly weak and incoherent state. 
The government wants someone punished in a governor’s death? They’ll send a man to prison. 
The ruling party thinks the penalty is too severe? They’ll let him out of prison. 
Xenophobic violence is tacitly encouraged (or not so tacitly, if you listen to President Vladimir Putin on the subject of Chechens and Muslims)? They’ll pretend no one murdered the 9-year-old girl and pretend that no one can hear Nazi slogans shouted in the dark. 
The government wants exemplary punishment for the man who attacked the synagogue? They’ll organize an investigation and a trial in barely enough time to write up the paperwork. 
Is it any wonder people will do anything to avoid taking part in the messy rituals of the Russian courts?

Masha Gessen is a Moscow journalist.

TITLE: IN BRIEF
TEXT: Unsatisfactory Total 
MOSCOW (Bloomberg) — Total SA, Europe’s third-biggest oil company, isn’t producing enough crude from its largest project in Russia, making the company’s work there “unsatisfactory,” Russia’s Natural Resources Ministry said.
Total isn’t investing enough in drilling and plans to produce 3.5 times less oil this year than required by the field’s development agreement, the ministry said in an e-mail Monday. It didn’t say how much production is planned or required.
Paris-based Total owns 50 percent of the project, along with Norway’s Norsk Hydro ASA with a 40 percent stake, and a local partner that holds 10 percent. 

Alrosa Rating 
MOSCOW (Bloomberg) — Alrosa, Russia’s diamond monopoly, had its long-term credit rating raised one level by Standard & Poor’s, which cited the Siberian company’s improving financial results.
The rating was raised to B+ from B, four steps below investment grade, with a positive outlook, S&P said in a statement. Alrosa’s short-term rating remains B.
Alrosa, based in Mirny, eastern Siberia, is the world’s second-biggest diamond producer after De Beers. Alrosa said Dec. 28 that it expects sales to rise 12 percent to $2.9 billion this year, from an expected $2.5 billion last year.
The upgrade “reflects Alrosa’s strengthening profitability and cash flows,” Standard & Poor’s credit analyst Elena Anankina said in the statement. “The ratings on Alrosa could be raised by up to two notches if the full audited 2005 financials confirm positive operating and financial trends, and if the Russian government achieves direct majority control over the company.’’ 

Rostelecom Profits 
MOSCOW (Bloomberg) — Rostelecom, Russia’s biggest long-distance telephone provider, said profit increased 25 percent amid higher demand for phone services.
Net income increased to 9.03 billion rubles ($325 million) from 7.22 billion rubles in the year-earlier period, based on Russian accounting standards, the company said Monday in an e-mailed statement. Sales rose 7.5 percent to 40.29 billion rubles.
The Moscow-based company said its domestic long-distance traffic increased 2.8 percent, outgoing international long-distance traffic grew 14.8 percent and incoming international traffic increased 16.8 percent.

Ingosstrakh Sale
LONDON (Bloomberg) — Ingosstrakh, Russia’s second-largest insurer, may raise about $500 million selling shares in London this year, making it the first publicly traded Russian insurance company, the Financial Times said Monday, citing unidentified people.
Ingosstrakh may offer between 15 percent and 20 percent of the company in an initial public offering on the London Stock Exchange, the newspaper said. Deutsche Bank AG, Morgan Stanley and Merrill Lynch & Co. are advisers, the Financial Times said.
Ingosstrakh was created in 1947, when it was given the mandate to insure overseas business interests of the former Soviet Union, the Financial Times said. The company was owned by the government until 1992.

State Spending  
MOSCOW (Bloomberg) — Russian state spending will grow by a maximum of 9 percent annually over the next three years, Interfax quoted Economics Minister German Gref as saying.
Spending “will grow by 7 percent to 9 percent over the next three years,” Gref told Russian President Vladimir Putin, Interfax reported. 
“Government spending grew at a faster rate over the past two years.”
Gref was speaking at the Kremlin weekly cabinet meeting, which only Russian news media are allowed to attend. 

Yukos Suit 
MOSCOW (Bloomberg) — Yukos, once Russia’s largest oil company, faces a bankruptcy suit filed by a former unit, Yuganskneftegaz, the newspaper Vedomosti reported Monday, citing court documents.
Yukos, burdened by more than $30 billion in tax claims, already faces bankruptcy in a suit brought by Rosneft, the state-owned oil company. Yukos was put under control of court-ordered managers last week by a Moscow bankruptcy judge.
The new suit by Yugansk is based on a July 2005 court decision that Yukos owes its former subsidiary 26 billion rubles ($940 million), Vedomosti said. The Moscow Arbitration Court will review the bankruptcy filing on April 13, the paper reported.
Yugansk could join Rosneft’s suit as a creditor, Vedomosti said. Rosneft acquired Yugansk in December 2004 after it was seized from Yukos and sold at auction to offset part of its tax bill. 

Bootleg Deaths 
MOSCOW (Bloomberg) — Bootleg alcohol and other counterfeit goods are killing a “huge amount” of Russians every year, Economy Minister German Gref said.
The number of annual deaths caused by illegally produced alcohol has held steady for several years at 35,000, he said.
“Unfortunately, we have a huge amount of deaths in connection with the use of counterfeit products,” Gref told Russian President Vladimir Putin during a cabinet meeting in Moscow Monday.
Russia’s bid to join the World Trade Organization is stalled in part because of its failure to effectively fight counterfeiters at home. Russia is the biggest economy not part of the WTO.

Sibneft Appointment 
MOSCOW (Bloomberg) — Sibneft, the Russian oil company that Gazprom bought from billionaire Roman Abramovich last year, named a new vice president for refining and marketing.
Anatoly Cherner, who held a similar position at Slavneft, will take the job, Sibneft said in an e-mailed statement Monday.
Sibneft and BP’s Russian venture each own about half of Slavneft. Last October Gazprom bought the 72 percent stake in Sibneft owned by Abramovich’s holding company for $13.1 billion. 

UES Production
MOSCOW (Bloomberg) — Unified Energy System, Russia’s national power utility, said first-quarter production rose to a record after a winter cold snap boosted demand for electricity. The shares rose the most in five weeks.
Output advanced 5.8 percent to 198.5 billion kilowatt hours in the period, from 187.7 billion a year earlier, Unified said in an e-mailed statement Monday. Russian electricity consumption in the quarter rose 4.3 percent to 250 billion kilowatt hours, meaning state-run Unified accounted for 73 percent of the total.
Moscow-based Unified’s shares rose 5.4 percent, or 3.7 cents, to 71.9 cents at 5:47 p.m. in Moscow. The company, which operates the world’s biggest electricity network, is now valued at $29 billion, a rise of 70 percent since the start of the year.

Improper Spending
ST PETERSBURG (SPT) — St. Petersburg’s Control and Accounting Chamber has reported numerous incidents of improper budget spending by local authorities and subsidiary organizations, Interfax reported last week.
The Chamber investigated budget spending from 2000 until September 2005 in several city hospitals, state unitary companies, City Hall committees and local authorities.
According to the report, in 2004 $12.27 million was spent illegally, and during the first nine months of 2005 — $1.44 million.
In 2004 city budget profit was understated by $80.8 million, and by $2.5 million last year. In particular, the Committee for Health understated its profits by $1.5 million last year, the Committee for Physical Training and Sport – by $530,000, using over $570,000 for improper purposes.

Phone Profits
ST. PETERSBURG (SPT) — The largest landline telephone operator in the region, Northwest Telecom, said net profit increased by 39.6 percent last year up to $66.75 million, according to Russian accounting standards, Interfax reported Monday.
Revenue increased by 32.7 percent up to $735 million last year, EBITDA (Earnings Before Interests, Taxes, Depreciation and Amortization) - by 49.6 percent up to $197 million, the company said in a statement.
Profitability of EBITDA was 26.8 percent, net profit profitability was 9.1 percent.

TITLE: Who Should Travel, Who Should Not
AUTHOR: By Malcolm Hawkes
TEXT: The aftermath of the rigged presidential election and brutal crackdown on pro-democracy protesters in Belarus has elicited a predictable response in the West. The European Union and the United States have reimposed a travel ban on top Belarussian officials, while economic sanctions are also likely to be imposed. We’ve been here before. In 2004, Brussels and Washington imposed a travel ban on high-ranking Belarussian officials in response to Belarus’ poor human rights record, flawed elections and referendums. These moves did not bring about the desired response — respect for democracy and human rights — and the new travel bans and mooted economic sanctions are unlikely to succeed either. It’s time for a new and radical tactic: to relax entry requirements to the EU and increase study and work opportunities for ordinary Belarussians.
Economic sanctions do not work at changing governments, but they are good at hitting ordinary people, vividly demonstrated by the humanitarian crisis in Iraq brought on by Saddam Hussein’s indifference to his people’s suffering. Sanctions have also failed to remove Fidel Castro in Cuba and helped to spawn a thriving black market in the Balkans that served only to foster instability and benefit dubious power groupings.
As Russia has made plain through its open support of President Alexander Lukashenko, Belarus is to remain within its sphere of influence. Any attempt to impose economic hardship on Belarus by the West is certain to be amply compensated for by Moscow, which already heavily subsidizes gas supplies to that country. Therefore, economic sanctions against Belarus would only preserve the political status quo, even strengthen it, ensuring that Belarus was as dependent economically on Russia as the Lukashenko regime is dependent on it for political support.
Moreover, the ensuing economic and political stagnation would sound the death knell for the long-embattled independent media. Already last week, Belorusskaya Delovaya Gazeta, a respected business newspaper, became the latest independent paper to announce it is ceasing publication due to state interference with printing and distribution. Any worsening of the economic environment in Belarus would ensure that the state’s information blockade, along with government propaganda, would continue unchallenged. 
Why did the pro-democracy “revolution” in Belarus fail? Is it that the movement for democracy is weaker in Belarus than in Ukraine or Georgia? Or is it simply because, after years of increasingly authoritarian rule, the “disappearance” of leading opposition figures, ready use of police violence at demonstrations, a loyal security service and absence of internal financial heavyweights among the opposition, any pro-democracy movement in Belarus is doomed to struggle? The answer is probably all of the above. Yet the past week has seen the opposition hold some of the boldest and largest demonstrations in years, which suggests that something is stirring. This should be nurtured.
A travel ban on top officials will have little impact when most ordinary Belarussians are unable to travel abroad themselves for want of visas or the means to pay for the trip. Before Poland acceded to the EU, shuttle traders from Belarus regularly, and one suspects profitably, plied their trade across the border. The EU’s tough border controls put a stop to that.
Relaxed entry requirements coupled with enhanced work and study opportunities would help to expose Belarussians to functioning market economies and democracies. Income from EU-based jobs would be sent back to Belarussian families. The information blockade would crumble. The desire and means of ordinary Belarussians to change Belarus for the better would grow. At a stroke, the West would demonstrate the ready benefits to the Belarussian people of open democratic governance and vibrant market economies. With a population of just 10 million, the impact of Belarus on the EU labor markets would scarcely be felt. EU monitoring of border movements, for example to prevent smuggling and human trafficking, could continue and should be unaffected by easier travel from Belarus. And what better demonstration of the worth of a travel ban when ordinary Belarussians are able freely to travel to the EU and the Lukashenko elite, for all their domestic power, are not?
Of course, Belarus may in response restrict the right of its people to travel abroad. It often has imposed such temporary restrictions to prevent key opposition figures from attending meetings or conferences. However, such restrictions would have to apply to all Belarussians and encompass not just the land borders shared with Poland, Latvia, Lithuania and Ukraine, but Russia as well, with whom Belarus currently maintains an open border policy.
Opening up travel and work opportunities to the European Union from Belarus while maintaining a ban on the president and the governing elite would send a very strong message. Although any “revolution” thus prompted would not happen overnight, opening Europe’s door could ultimately provide the opposition with the momentum sadly lacking in recent days, a momentum that could become unstoppable.

Malcolm Hawkes is a former researcher on Belarus for New York-based Human Rights Watch and currently works as an independent legal consultant. The views expressed are his own.

TITLE: Old Man Lukashenko
AUTHOR: By Michele A. Berdy
TEXT: Áàòüêà: father, friend, husband, leader, priest
For people who love the thrill of elections, the last few weeks have been busy indeed. Of course, some of the elections didn’t provide much suspense. In Belarus, for example, there was no question that Alexander Lukashenko would be elected president for a third term. The only question that readers of the Russian press might have had was the honorific that is often used with the Belarussian president’s name. One headline about his re-election called him íåïîòîïëÿåìûé Áàòüêà (the unsinkable “batka”). So what is this áàòüêà?
Áàòüêà (or áàòüêî) is an all-purpose word of affectionate respect for men. In translation of Russian literature, it’s often rendered as “little father,” which makes it seem as if Russia were the Land of the Munchkins, inhabited by a race of very small — but very admirable — men. It can be used to refer to one’s father: Ëåòîì ÿ âñåãäà åçæó ê áàòüêå â äåðåâíþ. (Every summer I go visit my old man in his village.) In the 19th century, it was one way that wives addressed their husbands, usually in the patriarchal merchant or peasant class, where a husband was the ruler of his family kingdom: Áàòüêà, âñòàíü! Êàðàóë íà óëèöå êðè÷àò! (Wake up, old man! They’re raising the alarm outside!) In the south of Russia and Ukraine, it was used to refer to the commander of a partisan or Cossack division. It can also mean a priest, as in the expression êòî íè ïîï — òîò áàòüêà, which means “it’s all the same” (literally “if he’s not a priest, he’s a preacher”). You don’t hear this expression often these days, but it’s good to know as you read 19th-century Russian literature: Åé — ÷òî íè ïîï, òî áàòüêà. Åé ëèøü áû çàìóæ, ðàçáèðàòü íå ñòàíåò. (She doesn’t care who her husband is. She just wants to get married, and she’s not picky about the man.)
When used with Lukashenko, it conveys the notion of beloved leader and father of the nation. Or it’s used to poke fun at his rather patriarchal manner. Take, for example, a recent parody in which Putin contemplates his neighbor to the west. Êàê îíè, áåëîðóñû, Ëóêàøåíêî ñâîåãî ïî÷èòàþò. Áàòüêîé çîâóò! Ïîðîé äàæå çàâèäóþ. (Those Belarussians really honor their Lukashenko. They call him batka! Makes me envious from time to time.) The parody continues with Putin’s admiration for his neighbor’s way with words. Áàòüêà — îí çà äâà äíÿ íàãîâîðèò òàêîãî, ÷òî íàì çà ãîä íå ïðèñíèòñÿ. (In two days batka comes out with more stuff than we could dream up in a year.)
Lukashenko’s plain and folksy speech does make him sound more like the head of a family than a head of state. Sometimes the sense gets a bit garbled, but he still comes through as a man of the people, determined to lead his nation. ß ïðåçèäåíò ãîñóäàðñòâà, è ýòî ãîñóäàðñòâî áóäåò, ïîêà ÿ ïðåçèäåíò. (I’m the president of this state, and this state will exist as long as I’m president.)
Much of his efforts in Belarus have been aimed at raising living standards, even if there are hard times ahead: Æèòü áóäåòå ïëîõî, íî íåäîëãî! (You’re going to live badly, but not for long!)
Besides, it’s hard to solve all the problems at once: Òîëüêî ÿ âçÿëñÿ çà ÿéöà, êàê ñðàçó ìàñëî ïðîïàëî. (As soon as I got my hands on the egg problem, butter disappeared from the shelves.)
If the economy is a slippery business, the business of power is something else. ß áóäó ëåãèòèìíûì åù¸ äîëãî. ß åù¸ íå âñ¸ ñäåëàë, èç-çà ýòîãî âëàñòü ïîòåðÿþ íåñêîðî. (I’m going to be legitimate for a long time. I haven’t done everything, and for that reason I’m not going to lose my hold on power anytime soon.) 
And that’s what the elections showed. Another headline put it simply: Áàòüêà íå ïðîèãðàë. (Batka didn’t lose.)

Michele A. Berdy is a Moscow-based translator and interpreter.

TITLE: Vision Quest
AUTHOR: By Chris Floyd
TEXT: Once again we must take up the cudgels for President George W. Bush, who is being increasingly maligned for his alleged lack of strategic vision in Iraq. This chorus of petty carping from partisan dead-enders has been exacerbated of late by all the hand-wringing media reports about “civil war” breaking out among the ungrateful beneficiaries of the president’s selfless crusade for peace and enlightenment in the Middle East.
These charges are, as always, pure bunkum. As we have often noted here before, Bush is pursuing a remarkably effective “win-win” strategy in Iraq, a highly flexible vision that is even now ripening to fruition. The savage militias, ethnic cleansing, mass murder, sectarian hatred and gruesome tortures that are turning Iraq into a howling moonscape of fear and chaos are but precision tools in the artful hands of the Leader, as he patiently crafts the ultimate victory.
The war aims of the Babylonian Conquest have always been obvious to anyone who concentrates on the operational reality of the action, ignoring the ludicrous cornball about democracy and security that Bush dishes out to gull the rubes back home. The reality clearly shows that Bush had three primary objectives in launching the invasion. First and foremost was the transfer of large portions of the national wealth of Iraq — and the United States — into the coffers of his political cronies, corporate backers and family members. Second was the frantic acceleration of the long-running, bipartisan militarization of America, which is now almost wholly dependent on war and rumors of war to keep its heavily mortgaged economy afloat. Third was planting a permanent military presence in Iraq to “project dominance” over the strategic oil lands and serve as staging areas for further operations in regime change and political extortion as needed. (“Nice little country you got there, Abdul; too bad if something, like, happened to it — you savvy? Now howzabout signing that free trade agreement already?”)
None of these aims have been harmed in the slightest by Iraq’s death spiral into civil war. The Bush faction’s war profiteering and fraud — on a scale surpassing anything ever seen in world history — has fueled a ruthless political machine that, despite its growing unpopularity with the U.S. people, now controls all three branches of government and has overthrown the Constitution, openly declaring that its leader is beyond the reach of “judicial review, congressional oversight or international law,” as The Washington Post reported, rather belatedly, this week. Swollen by the swag of aggressive war, the elite interests represented by the Bush regime — oil, military-related industries and predatory venture capitalists like the Carlyle Group — have had their already inordinate sway over American society and policy increased by several magnitudes. They will remain ascendant for decades to come, no matter what happens in Iraq, or in any U.S. election.
Indeed, the murderous chaos that will inevitably spill across the region, and the world, from the collapse of Iraq will only mean more boffo box office for the fearmongers and warmongers of the Bush faction — and even greater feasting for their oil barons, already gorged on record-breaking profits after just three years of bloodshed. The whack-a-mole “Long War” gleefully envisioned by the Pentagon will thus be extended indefinitely, bringing more militarization, more draconian “war powers,” and further destruction of those pesky civil rights and constitutional liberties that hinder the elites in their exercise of raw power.
Civil war also enhances the prospect of permanent U.S. bases. The Sunni minority, once the most vociferous opponents of American occupation, now look — vainly — to U.S. forces as their last-ditch protection against the deadly militias of the Shiite majority. The Shiite-led government relies on U.S. military might to prop up its rickety state system. The Kurds (who are busy ethnically cleansing their own enclave, as The Washington Post reports, and imprisoning people for criticizing the corruption of Kurdish leaders, as The New York Times reports) are happy for the Americans to plant vast, minatory fortresses down south to keep the troublesome Arabs in line. And so the permanent bases are being sunk deep into Iraqi soil; the Pentagon has already “authorized or proposed almost $1 billion” for bases in 2005-06, The Associated Press reports.
And if Iraq cracks apart completely — the “three-state solution” proposed by Leslie Gelb, doyen of that bastion of bipartisan Establishment wisdom, the Council on Foreign Relations — why, so much the better. It will be much easier to wangle basing agreements, oil deals, insider investments and those all-important arms contracts out of weakened mini-states struggling for survival than from a strong, unified nation looking out for its own interests. 
As the gates of hell blow open in Iraq, the marvelous adaptability of Bush’s strategy becomes apparent. When the promised “cakewalk” did not materialize, Bush shifted to the near-genocidal fury of the Fallujah assault and the systematic tortures of Abu Ghraib. When these tactics failed to quell the resistance, Bush gave the Pentagon the greenlight to arm, infiltrate and manipulate militias and terrorist groups, even to the point of goading them into action, The New Yorker reports. If you can’t have cake, then chaos might serve your turn just as well.
Civil war looks like a profitable gambit for now — except for all the pointless suffering, of course. But Bush has never cared about that. A true visionary, he keeps his eyes on the prize, on the only kind of “victory” he has ever sought in Iraq: loot and domination for his ruthless clique. Whatever happens next, they’ve already won.

TITLE: Foreign Imports Fuel Dinamo’s High Stakes Game
AUTHOR: By Martin Burlund
PUBLISHER: Special to The St. Petersburg Times
TEXT: After Sunday morning practice, players for the city’s top-ranked basketball team, Dinamo St. Petersburg, line up for lunch. 
Kelly McCarty and two teammates wait for pasta dishes at a fancy Italian restaurant near Nevsky Prospekt. 
McCarty goes through the scores of the past week’s NBA games and analyzes who might make the playoffs, when suddenly a tipsy young man wandering by the restaurant stops to stare at the two-meter tall African American on the other side of the window.
“How can you be drunk at 12 o’clock in the daytime, man?” McCarty asked, changing the subject to the alcohol problems that plague many citizens in St. Petersburg. 
Nearly two years ago, the American signed a contract with Dinamo and since then, his outstanding performances have been synonymous with the team’s success.
To explain some of his memories from when he first came to St. Petersburg, McCarty grabbed a bottle of olive oil and to demonstrate how people walk in the streets with bottles of booze — to the great amusement of his teammates. Meanwhile, the drunkard outside stumbled away.
McCarty says there is none of that for him.“I don’t go to nightclubs and I don’t go to strip clubs — I just try to stay focused on playing basketball,” he said.
Focus is what is needed to fulfill the goals of Dinamo’s managers.
“We work to make everybody understand what their role in the team is,” Fotis Katsikaris, Dinamo head coach, said. “I try to talk to the players and convince them to perform their role and, to do so, they need to focus and concentrate.”
“Everything in basketball goes through your head. This is a mind game,” he added.
McCarty seems to have understood this perfectly. He was named Most Valued Player in the FIBA All-Star game last season and ends most games as the highest-scoring player.
The Dinamo club was founded only two years ago, but it has set its sights high, aiming to stay in the top four of the Russian Super League, play in the final four of the FIBA league and to join the popular European leagues, such as the ULEB-cup or the Euroleague.
At present, CSKA Moscow is the only Russian team in the Euroleague, the European equivalent of America’s NBA. Dinamo’s key task, according to the team’s sports director Igor Rubin, is to play at this level.
To achieve these goals, top foreign players such as McCarty have been signed, along with two other American players who joined the team at the beginning of the season.
Until last season, Katsikaris coached at Greece’s AEK Athens, one of the top teams in the Euroleague, but he does not feel that moving to a FIBA league team has been a step back.
“I like to work in a team where the ambitions are high, like they are here in Dinamo,” Katsikaris said.
Surprisingly, he does not think it is necessary that every game be won. Recently, Dinamo lost a local derby to last-placed Spartak St. Petersburg, but Katsikaris wasn’t too disturbed by the loss.
“We were not mentally ready for the game, but I’m glad we lost this one, because then we played the next, important game like we wanted to win, and we won easily,” he said. “It is impossible, even for a top team, to stay concentrated for 10 months straight.”
The American players, alongside other European signings, are not at the club merely to produce victories. They are also helping to develop younger players, some of which Rubin believes will follow other Russian players to the NBA.
Rubin is positive that an entry in Europe will take place next season. Dinamo has qualified for “the final four,” the culmination of the FIBA league, which begins on April 7 in Kiev. If Dinamo wins or takes second or third place, they are guaranteed a place in the ULEB league, a tournament only outranked by the Euroleague.
According to Rubin, ULEB is keen to include a St. Petersburg team.
“They said they would like to have us because St. Petersburg is a big European city with a lot of cultural history and unique infrastructure,” Rubin said.
Dinamo’s coach agrees, although he puts his own twist on the club’s ambitions. 
“We want to represent St. Petersburg in Europe — show them that we are not all about art and beautiful buildings,” Katsikaris said.
Back at the Italian restaurant, the players are starting to lose patience.
“What’s going on with that lasagna?” one asks. Finally, the pasta dishes are served. After the meal, it is time for a nap before an evening training session. 
Dinamo’s managers are keen to give their foreign signings star treatment to allow them to focus on their games. They have chauffeurs to drive them around town in limos, from home to morning practice and home, to evening practice and home again.
These are McCarty’s usual destinations.
McCarty said that he has settled in well in St. Petersburg, but that he will not stay here forever. The tall forward will have a year left on his contract when the season ends in May, though he has not decided whether he is going to stay longer or return to America when the contract runs out.
In the U.S., McCarty has a wife, a 3-year-old daughter and a 7-month-old son. His wife calls every day when he comes home from training in the evening, and after the playoffs in May he takes off to the States to be with his family until September when the season starts again.
Asked how it feels to work so far away from his family McCarty replied: “It’s tough. Of course it’s tough, but it’s definitely do-able.”  
He explained his family is one of the factors that allows him to stay focused on his job. “My wife supports me. My family supports me and that’s important.”
When lunch break was over, McCarty and his colleagues picked up the not-inconsiderable bill without batting an eye. They seemed more concerned about when their drivers will be back. Finally the cars pulled up and McCarty said a final remark from the passenger seat before he headed off.
“I get money for playing basketball and that’s the best job I can ever imagine. There’s a lot of guys who can only dream about it.”

TITLE: Ice Swimmers Brace Themselves for The Thaw
AUTHOR: By Nicholas Pawlak
PUBLISHER: Special to The St. Petersburg Times
TEXT: The thaw began this week in St. Petersburg and the city seems ready to melt and disappear. 
But for “walruses,” the name given to those people who like nothing better than to swim in holes cut into the frozen River Neva, rain and rising temperatures signal that the ice-swimming season is winding down. 
April traditionally marks the end of ice-swimming fun. The frozen river flows again and soon after, beaches become crowded with fair-weather bathers. 
Some “walruses” turn to cold showers, ice filled baths or punishing fitness regimes for consolation, but there is still time to catch them swimming or even to test the water oneself before the end of the season.
During the Epiphany celebrations in January, when temperatures plummeted to less than minus 30 degrees Celsius, nationalist politician Vladimir Zhirinovsky declared on television that “This is why Americans can’t understand what a Russian is!” before plunging into a pool cut into the ice at Lake Bezdonnoye near Moscow. 
Indeed, the idea of swimming outside in such extreme conditions is alien to foreigners of many nationalities. There is, however, method in the madness.
On a corner of the Peter and Paul Fortress, a sketch of a walrus marks the spot where enthusiasts meet to swim all year round in the River Neva. 
Andrei Korotkov is one such swimmer. He is quick to reject the term “walruses” — morzhi in Russian — which is often used to describe winter swimmers, as it encourages an image of exclusivity. 
“This is not a club. We are all individuals and everyone is welcome here,” Korotkov said as bystanders nodded in approval. 
“It is of no importance whether you are a Christian, a Jew or  a Muslim — it is just a question of the strength of your soul,” Korotkov said as he gestured to the Sobornaya-Kafedralnaya Mechet, St. Petersburg’s biggest mosque, nearby. “Anyone can swim in the Neva as long as they are strong spirited.”
The pastime is a great leveler and contrary to Zhirinovsky’s remark, Korotkov said it is certainly not exclusive to Russians. 
“Scots, Finns, Germans and Englishmen all swim here,” he said. 
When someone is half-naked at the edge of icy cold water their profession, religion and nationality seemingly become irrelevant. 
But there are rules. Relieving oneself in the water, using lard as insulation or drinking vodka before jumping in are frowned upon.
At a meeting of morzhi a steady stream of enthusiasts come throughout the day. Swimmers slip into the ice pool, splash around and then leave, and the activity is spontaneous. 
The majority of swimmers are pensioners, which gives the impression that the practice may be a secret way to remain youthful. 
Korotkov, 68, gave three reasons for ice swimming. 
The first is to maintain good health. Korotkov said that the practice is excellent for the immune system, back problems and circulation.
“Ordinary people get ill from having wet feet — swimming here makes you resilient!” he said. With a smile, Korotkov added that it also boosts the libido. 
However, the shock of jumping into icy water could induce a heart attack in someone who is unprepared so it is recommended that newcomers acclimatize themselves gradually. 
The second reason offered is that, as with the banya, the experience is partly spiritual. The cold water is seen to cleanse the body and mind of sin, which is why religious Russians jump into the ice holes during Epiphany. 
The mystic Porfiry Ivanov (1898-1983) argued that swimming in icy water gives spiritual energy by bringing one closer to nature.
Korotkov expresses a similar view, describing a feeling of “newness” and “heightened perception” on leaving the water. 
Some swimmers adopt a near-meditative state before methodically entering the water.
The third reason is that ice swimming is simply addictive. Although Korotkov claims that he could quit tomorrow, many around him describe how the activity is like a drug. The water is generally warmer than the surrounding air so getting in can be surprisingly easy. But after submerging oneself a feeling of numbness overcomes the body with alarming speed. 
After scrambling to get out of the pool a sense of lightheadedness and general disorientation takes over which is followed by an enormous feeling of well-being.
In a city with as many temptations as St. Petersburg, it is a euphoric experience that is both free and legal.

TITLE: Hollywood Studios Promise Digital Delivery
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — Hollywood studios will start selling digital versions of films such as “Brokeback Mountain” and “King Kong” on the internet this week, the first time major movies have been available online to own. 	
The films can’t be burned onto a disc for viewing on a DVD player. Still, the move is seen as a step toward full digital distribution of movies over the Internet.
Six studios said they were due to announce Monday that sales will begin through the download web site Movielink. The site is jointly owned by five of the seven major studios.
Warner Bros., Universal Pictures, Sony Pictures, Paramount Pictures, Twentieth Century Fox and MGM will offer some first-run and older titles on Movielink. New films will be priced similar to DVDs — between $20 and $30 — while older titles will sell for $10 to $20.
In a separate announcement, Sony and Lionsgate said they will sell films through the CinemaNow site.
Only films from The Walt Disney Co. will not be available, although both services say talks are ongoing.
“Digital delivery hasn’t arrived until the major studios allow home ownership, and now they have and now digital delivery is very real,” said Jim Ramo, Movielink’s chief executive.
Studios will sell some new films online the same day they become available on DVD. Most films will be made available within 45 days.
Studios began renting out films online several years ago as a way to combat illegal downloading. Movies have been available through the Internet 30 to 45 days after hitting video stores, with rentals lasting just 24 hours for viewing primarily on computer screens.
Digital delivery of video grew rapidly after Apple Computer Inc. began selling episodes of TV shows through its iTunes online store last October.
This year, devices powered by new Intel computer chips and TV service delivered over the Internet will allow more consumers to watch Web video on their TVs instead of their computer screens, a key factor in downloading to own, analysts said.
Studios are being cautious about selling films online in part because DVD sales produce more profit than box office receipts.
But studios are also preparing for the day when major retailers such as Wal-Mart and Amazon.com begin offering their own movie download services.

TITLE: Ice Age Sequel Fires Up Box Office as ‘Basic Instinct 2’ Melts
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — “Ice Age: The Meltdown” heated up the box office with a mammoth $70.5 million weekend, while audiences gave the cold shoulder to Sharon Stone, whose “Basic Instinct 2” debuted with a paltry $3.2 million.	
The “Ice Age” sequel, from 20th Century Fox, took over the top box office spot from Universal’s “Inside Man,” which slipped to No. 2 in its second weekend with $15.7 million, raising its 10-day total to $52.8 million, according to studio estimates Sunday.
Premiering in third place was the Warner Bros. roller-skating tale “ATL,” starring rapper Tip Harris, which took in $12.5 million.
Universal’s “Slither,” starring Nathan Fillion in a horror comedy about killer slugs from outer space, flopped with $3.7 million, debuting at No. 8. 
Sony’s MGM release “Basic Instinct 2,” the belated sequel to the 1992 sex thriller that made Stone a star, tied for the No. 10 spot with Lionsgate’s “Larry the Cable Guy: Health Inspector,” which took in $3.2 million in its second weekend.
The overall box office surged, with the top 12 movies grossing $136.5 million, up 40 percent from the same weekend last year. The upswing followed a stagnant first quarter after a prolonged drought last year, when attendance fell 8 percent compared to 2004.
“Ice Age: The Meltdown” reunites Ray Romano, Denis Leary and John Leguizamo, now joined by Queen Latifah, as voices of prehistoric animals migrating to safety when global warming threatens to flood their home. 
The sequel easily surpassed the $46.3 million opening weekend of the original “Ice Age” and broke the record held by the first “Ice Age” for best March opening ever. 
The film could tie “The Incredibles” for second-best animated debut ever behind the $108 million first weekend of “Shrek 2.”
“Basic Instinct 2” features the sexual predator Stone played in the first movie in a new murder thriller in London as she plays mind games with her psychiatrist.
Sony opened “Basic Instinct 2” in just 1,453 theaters, a fairly small release for such a high-profile title. “Ice Age: The Meltdown” debuted in 3,964 theaters.
Critics savaged “Basic Instinct 2,” many finding its tale of erotic intrigue both laughable and dull. Sony held out hopes the movie would find an audience on DVD.
“I think it’s a very sexy film, and Sharon Stone looks great and really worked the film,” said Rory Bruer, Sony’s head of distribution.
“It’s a movie that probably will have a very strong life in the home-video world.”

TITLE: London Exhibition Pays Tribute To Ancient Castrated Superstars
PUBLISHER: Agence France Presse
TEXT: LONDON — London is hosting a new exhibition which pays tribute to the castrati, superstars of a bygone era whose sublime voices were produced by castrating the singers before they reached puberty.
With women forbidden by the Catholic church from appearing on stage, some 70 percent of all opera singers in the Italian baroque period from 1600 to 1750 were castrati, the show’s curator Nicholas Clapton said.
They were male sopranos, mezzo-sopranos or contraltos.
“The castrati were the 18th century’s superstars,” said Sarah Bardwell, director of the Handel House Museum which is hosting the exhibition that opened last week and ends Oct 1.
“They were celebrities, surrounded by money and fame,” she added.
Entitled “Handel and the Castrati”, the show displays some of the surgical instruments used to obtain these tender, agile and magnificent voices that were the most applauded in their time.
“Castration was performed by cutting the blood supply to the testicles, or by amputating them altogether,” Clapton said. The show includes paintings and prints of castrati.
However, it is above all a tribute to the voices and stories behind the castrated singers for whom Georg Friederich Handel (1685-1759) composed works.
It presents the original scores of pieces performed by Senesino, Nicolini, Bernacchi, Carestini, Caffarelli, Conti and Guadagni.
A descendant of Francesco Bernardi Senesino, who lived from 1685 to 1759, travelled from Italy to London to see the tribute.
Clapton, a counter-tenor, said most of the singers were castrated at eight years old and they then devoted their lives to art, with “very intensive training” of six to eight hours a day.
“The finest of the boy sopranos were picked by music masters for castration,” he said.
“As many as 4,000 boys were castrated annually in the service of art ... and, as Pope Clement VIII said, ‘to the honor of God’,” according to Clapton.
“The castrati would have the high voice of a boy soprano, but the lung power of a full-grown man,” Clapton said.
“They had amazingly powerful and high voices. They were neither man nor woman, but something in between. They were stars, they were admired, had adoring fans... but were also taunted,” he said.
The last of the castrati was Alessandro Moreschi who lived from 1858 to 1922 — Clapton has written a book about him — and the exhibition includes a recording of his made in 1902, the only surviving recording of a castrato.

TITLE: Homer in Hollywood? Doh!
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — Homer Simpson has hit the big screen in a short teaser trailer announcing a theatrical feature version of the long-running TV series “The Simpsons.” 
The “Simpsons” teaser debuted Friday before screenings of 20th Century Fox’s “Ice Age: The Meltdown.” The clip announces Fox’s July 27, 2007, release date for “The Simpsons Movie.”
The animated 28-second clip opens on a giant superhero “S” shield. “Leaping his way onto the silver screen,” intones a narrator, “the greatest hero in American history!” Cut to Homer sitting on his couch in his tighty whities and T-shirt. “I forgot what I was supposed to say,” Homer says. The narrator continues, “ ‘The Simpsons Movie,’ coming to the screen July 27, 2007.” “Uh, oh ...,” says Homer, “we better get started.”

TITLE: IN BRIEF
TEXT: Anderson Blasts Cull
HALIFAX, Canada — Pamela Anderson is renewing calls for her homeland to end its East Coast seal hunt. 
Anderson, a native of British Columbia, said Saturday that she was disappointed Prime Minister Stephen Harper had refused her request for a meeting after Canada’s annual Juno music awards show on Sunday, which she was invited to host. 
The refusal prompted the former “Baywatch” star to write Harper a letter warning that People for the Ethical Treatment of Animals would escalate its efforts if Canada does not stop the annual seal harvest.
“When people think of Canadian Club, they should think of a good whiskey, not jerks beating pups on the ice,” Anderson said at a news conference Saturday.
This year’s seal hunt, which began last weekend in the Gulf of St. Lawrence, has attracted several celebrity opponents, including former Beatle Paul McCartney and French actress Brigitte Bardot.

Crowe Lights Up in NZ
WELLINGTON, New Zealand (AFP) — Oscar winner Russell Crowe has fallen foul of New Zealand’s anti-smoking laws by lighting up during a recent concert in Auckland with his band, the Ordinary Fear of God, according to a report. 
Crowe smoked cigarettes after each song and sometimes during songs in breach of New Zealand’s Smokefree Environment Act, which bans smoking in workplaces and bars, the Herald on Sunday newspaper said.
Action on Smoking and Health director Becky Freeman told the newspaper she was shocked the actor was smoking inside.
“So he’s above the law because he’s a celebrity or something? Just because you’re Russell Crowe doesn’t mean you can do whatever you like.”
Crowe’s smoking habit contrasts with the anti-tobacco movie, “The Insider,” for which he was nominated for an Academy Award for his role as Jeffrey Wigand, who blew the whistle on tobacco companies in the United States.

Shakespeare For Sale
 LONDON (Reuters) — A complete First Folio edition of William Shakespeare’s plays, in prime condition and still in its 17th century calf leather binding, is expected to fetch up to $6.10 million when it goes on sale in July. 
Hailed by auctioneer Sotheby’s as the most important book in English literature, the First Folio is credited with saving for posterity many of the bard’s plays including “Macbeth,” “Twelfth Night” and “Julius Caesar” which had never before been printed.

TITLE: Freed Journalist Disavows Captors’ Video
PUBLISHER: The Associated Press
TEXT: BOSTON, Massachusetts — Jill Carroll, the journalist kidnapped in Iraq for 82 days, returned to America and a tearful reunion with her family, enveloping herself in long hugs with her parents and twin sister, and flashing the smile that made her a symbol of sympathy. 	
Carroll arrived Sunday in Boston on a commercial jet from Germany, wearing a dark blouse and jeans. The Christian Science Monitor reporter was accompanied on the flight by Monitor colleagues, who described her seven-hour flight back to the U.S.
“I finally feel like I am alive again. I feel so good,” Carroll said. “To be able to step outside anytime, to feel the sun directly on your face — to see the whole sky. These are luxuries that we just don’t appreciate every day.”
Carroll was seized Jan. 7 in western Baghdad by gunmen who killed her Iraqi translator while the two were on the way to meet a Sunni Arab official. She has said her kidnappers confined her to a small, soundproof room with frosted, opaque windows. She was released Thursday.
On her flight, Carroll was touched to find a red rose on her dinner tray, the Monitor reported. Later, a flight attendant dropped off a copy of Friday’s USA Today in which she saw her own face framed by a black head scarf. It was a photo of a giant poster that had been erected in Rome.
The 28-year-old American journalist stayed out of public view but reports on the Monitor’s web site, along with photos, showed a joyful reunion with her parents and sister.
“When Jill is ready, the Monitor will begin to tell her story and we will also hold a press conference where she will speak,” editor Richard Bergenheim said in a statement.
Carroll left Ramstein Air Base in southwestern Germany on Saturday after arriving from Balad Air Base in Baghdad. She strongly disavowed statements she had made during her captivity and shortly after her release, saying she had been repeatedly threatened.
In a video recorded before she was freed and posted by her captors on an Islamist web site, Carroll spoke out against the U.S. military presence. On Saturday, she said the recording was made under duress.
“During my last night in captivity, my captors forced me to participate in a propaganda video. They told me I would be released if I cooperated. I was living in a threatening environment, under their control, and wanted to go home alive. So I agreed,” she said in a statement.
“Things that I was forced to say while captive are now being taken by some as an accurate reflection of my personal views. They are not. The people who kidnapped me and murdered Alan Enwiya are criminals, at best.”
She also condemned her captors, although she did not address the war in Iraq. “I will not engage in polemics. But let me be clear: I abhor all who kidnap and murder civilians, and my captors are clearly guilty of both crimes,” she said.
Carroll attracted a huge amount of sympathy during her ordeal, and a wide variety of groups in the Middle East, including the Islamic militant group Hamas, appealed for her release.
The kidnappers, calling themselves the Revenge Brigades, had demanded the release of all female detainees in Iraq by Feb. 26 or Carroll would be killed. U.S. officials released some female detainees at the time, but said it had nothing to do with the demands.
In the statement, Carroll also disavowed an interview she gave to the Iraqi Islamic Party, a Sunni Arab organization in whose offices she was dropped off upon her release. She said the party had promised her the interview would not be aired “and broke their word.”

TITLE: Australia, China Sign Nuclear Deal
PUBLISHER: Reuters
TEXT: CANBERRA — Australia and China signed a nuclear safeguards deal on Monday that set the stage for huge uranium exports to Beijing for its power industry, but Canberra said the trade was unlikely to start for some years. 
Australian Foreign Minister Alexander Downer and his Chinese counterpart, Li Zhaoxing, signed the nuclear safeguards deal in the presence of visiting Chinese Premier Wen Jiabao and Australian Prime Minister John Howard.
“Given China’s high projected growth in electricity demand over the coming years, there are clear environmental benefits in diversifying from fossil fuels to low greenhouse-emission technologies such as nuclear power,” Downer said in a statement.
China is expected to build 40 to 50 nuclear power plants over the next 20 years and needs steady supplies of uranium. Its own uranium stocks are dwindling, not very rich and difficult to extract.
Australia has about 40 percent of the world’s known uranium reserves, but it will only export to countries that have signed the UN Nuclear Non-Proliferation Treaty (NPT) and who also agree to a separate bilateral safeguards deal.
India also wants to buy uranium from Australia, but has not signed the NPT and Howard has said he was not planning to change his strict uranium trade policy just because New Delhi signed a nuclear technology deal with the United States.
The U.S.-India deal agreed last month requires New Delhi to separate its military and civil nuclear facilities and open civilian plants to inspections in return for U.S. nuclear fuel and technology, but still needs approval from the U.S. Congress.
Australia only has three operating uranium mines, owned by BHP Billiton, Rio Tinto and General Atomics of the United States, and Resources Minister Ian Macfarlane has said big uranium exports to China were unlikely to start until 2010.
Macfarlane said China’s predicted uranium consumption was estimated at 20,000 tons a year, while Australia currently produced only about 10,000 tons a year from its existing three mines. He said extra capacity would be needed to supply China.

TITLE: Turkey Hit by Kurd Unrest, 15 Dead
PUBLISHER: Agence France Presse
TEXT: ISTANBUL, Turkey — Kurdish riots that hit southeast Turkey spread to Istanbul over the weekend and the countrywide death toll from nearly a week of unrest climbed to 15. 
Officials in Diyarbakir, the biggest city in Turkey’s Kurdish-majority southeast, said two men  — one aged 78, the other 18  — wounded in the riots that began there last Tuesday died overnight at the Diyarbakir hospital.
Three of the deaths occurred Sunday night in Istanbul when someone from a group of about 100 masked demonstrators hurled a molotov cocktail at a crowded city bus in the working-class neighborhood of Bagcilar.
A panicked elderly woman who threw herself out of the burning vehicle was struck down and killed by a passing car and two more bodies were pulled out of the wreckage of the bus that later crashed into a truck, media reports said.
A crowd of Bagcilar residents then took to the streets, chanting slogans against the armed separatist Kurdistan Workers’ Party (PKK), in whose favor the rioters had been demonstrating. Earlier Sunday, a group of about 200 sympathizers of the PKK  — tagged a terrorist organization by Turkey, the European Union and the United States  — clashed with riot police at Taksim Square, the heart of the shopping and entertainment district of Turkey’s biggest city. 
The demonstrators sought refuge in the nearby popular neighborhood of Dolapdere, whose inhabitants  — mostly Roms  — attacked them with knives, axes and sticks, chanting nationalist slogans.
A 16th person died in an indirectly related incident in Istanbul’s middle-class Fatih district on Friday, when a bomb went off in a crowded square in an attack claimed by the Kurdistan Freedom Falcons (TAK).
Turkish officials say TAK is a front the PKK uses to hit soft civilian targets in a bid to avoid tarnishing its self-proclaimed image of a guerrilla army that combats only the army and police; the PKK says it is made up of renegade former PKK militants over whom it no longer has any control.

TITLE: Severe Storms Kill 19 in U.S.
PUBLISHER: The Associated Press
TEXT: RUTHERFORD, Tennessee — Severe thunderstorms packing tornadoes and softball-sized hail left a path of destruction across six Midwest states, killing 19 people. 
Fifteen deaths were reported in western Tennessee, including a family of four. In Missouri, strong winds were blamed for at least three deaths. 
A clothing store collapsed in southern Illinois, killing one man and injuring several others.
Robin Brownlee, 43, of Collinsville, was inside the K&G Clothing Store in Fairview Heights, Illinois, just east of St. Louis, when the roof collapsed Sunday.
“The whole building started to shake,” Brownlee told the St. Louis Post-Dispatch. “Everyone was running and screaming. I couldn’t believe it.”
In Tennessee, eight people died near Newbern in Dyer County and seven in neighboring Gibson County, local emergency officials said.
Gibson County emergency officials set up a temporary emergency command post, triage center and morgue in Rutherford, where three people were killed. 
A family of four died in nearby Bradford, Gibson County emergency official Bryan Cathey said.
“Our resources were just overwhelmed,” he said.
A twister carved a path through a cluster of homes near the Jimmy Dean Foods plant north of Newbern, where several victims died.
 The plant, which makes breakfast sausages and other food products, was also damaged, a security guard said.
In Fayette County, just east of Memphis, a home was thrown from its foundation, a grain silo was destroyed and a mobile home overturned, The Tennessean reported.
The National Weather Service in Memphis preliminarily reported tornadoes in five counties in western Tennessee — Dyer, Carroll, Haywood, Gibson and Fayette — and officials said the storms caused extensive damage. 
In Missouri, strong winds were blamed for at least three deaths. A 42-year-old man was killed when winds knocked over his mobile home near Circle City, Stoddard County Sheriff Carl Hefner said. 
A second death was reported in Braggadocio in Pemiscot County, the state emergency management office said, but no details were available.
Another man was killed when a tree fell on him as he walked along a trail in Castlewood State Park near Ballwin in St. Louis County, a spokeswoman for St. Louis County police told the Post-Dispatch.

TITLE: Billups Ups the Ante As Phoenix Crashes
PUBLISHER: Reuters
TEXT: NEW YORK — The Detroit Pistons clinched home court advantage through the Eastern Conference playoffs on Sunday with a 109-102 win over the Phoenix Suns in Auburn Hills.
Chauncey Billups hit a 3-pointer with 3:40 to play to put the Pistons ahead for good, giving the two-time defending East champions the extra home game in Conference series play. 
“This is the third of our five steps,” Detroit coach Flip Saunders told reporters after the game.
The first two goals Saunders had were to make the playoffs and win the division. After sealing home court advantage, the last two are to have the best record in the league and win a second NBA title in three seasons. “This one might be the most important of the first four, because of the 2-2-1-1-1 format in the conference finals,” he said.
The Pistons [59-14] have lost just three home games all season and have the NBA’s best overall record.
But Detroit had to rally from several big deficits to get their latest win, their eighth in the past nine games.
The Pistons trailed by 17 in the first half and by 16 points at one point in the third quarter. But two 7-0 runs in the third kept the game close until the fourth, when the Pistons finally found another gear and surged ahead.
“They come back all the time,” Phoenix coach Mike D’Antoni said. “That’s probably why they’ve been to the Finals the past two years.”
Detroit got balanced scoring from its starters, who extended their NBA record by playing their 73rd game starting together.
Billups scored 35 points, Tayshaun Prince had 23 and eight rebounds, while Rasheed Wallace had 15 points and 11 rebounds. 
The streak will end this week when Wallace serves a one-game suspension for picking up his 16th technical foul of the season. Shawn Marion led Phoenix with 32 points and 10 rebounds, while Steve Nash had 13 points and dished out nine assists.

TITLE: Renault’s Alonso Aces Australian Grand Prix
PUBLISHER: Combined Reports
TEXT: A dominant Renault team will head to Imola this month buoyed by wins in the opening three Grand Prix of the Formula One year and confident of carrying their championship form into the European season. 
Spanish world champion Fernando Alonso extended his championship lead to 14 points after his second victory of the season in the Australian Grand Prix on Sunday.
The 24-year-old Renault ace led for almost every laps of the race, beating McLaren championship rival Kimi Raikkonen by 1.8 seconds with Toyota’s Ralf Schumacher nearly 23 seconds behind him in third.
Alonso beat Michael Schumacher in the season-opening race in Bahrain and team-mate Giancarlo Fisichella led a Renault one-two in the second race in Malaysia to keep the French team in the hunt for back-to-back world titles.
Alonso has snared 28 out of a possible 30 points from the opening three races and heads to Imola in San Marino full of confidence for the April 23 Grand Prix.
“This was a very different race to the other two so far this season,” Alonso said.
“In Bahrain, I was fighting with Michael Schumacher all the way and in Malaysia it was Jenson Button and I battling for second place.
“But in Melbourne it was quite comfortable. There were no fights and I was very relaxed for a lot of the race.”
Renault are confident they can repel an assault from main rivals McLaren when the F1 circus returns to its European heartland and the battles resume in Imola.
“So far we have shown we are strong in all conditions on all tracks,” Alonso said. 
“But Imola is a very different challenge and we must have a calm approach because we know it will be more difficult than ever.”
American Scott Speed was stripped of his first Formula One point and fined US$5000 for swearing at another driver after Sunday’s Australian Grand Prix. 
Speed was all smiles after he crossed the line in eighth place for Red Bull-owned Scuderia Toro Rosso to become the first American since Michael Andretti 13 years ago to earn a championship point.
His team, who replaced Minardi at the end of last year, were also celebrating their first point when stewards ordered a hearing after Speed overtook Red Bull Racing driver David Coulthard while yellow flags were being waved.
The stewards found Speed guilty of breaching the regulations for ignoring the yellow flags prohibiting overtaking. He was given a reprimand and a time penalty of 25 seconds, dropping from eighth place to ninth.
Coulthard was promoted to eighth place, earning himself a single point and taking the Scot’s career total to 500.

(AFP/Reuters)

TITLE: Mickelson Wins 28 Under Par
PUBLISHER: Reuters
TEXT: DULUTH, Georgia — Phil Mickelson completed his U.S. Masters preparations in emphatic style on Sunday, coasting to a record third BellSouth Classic title by 13 shots at the TPC at Sugarloaf. 
The defending BellSouth champion, eight strokes clear overnight, eagled two of the last six holes for a seven-under-par 65 and a four-round total of 28-under 260.
His winning margin was the largest on the PGA Tour since Tiger Woods clinched the 2000 U.S. Open at Pebble Beach by 15 strokes, and has been bettered only six times in Tour history. 
“It was certainly a fun week and I was very pleased with the way I played,” a beaming Mickelson told reporters after completing the second wire-to-wire victory of his career. 
“I had some good practice days but it really means a lot to actually have the scores reflect the way I felt I was playing,” Mickelson said.

TITLE: Kuznetsova Makes Tour Comeback
PUBLISHER: Combined Reports
TEXT: Former U.S. Open champion Svetlana Kuznetsova earned her first tournament title in 18 months by beating Maria Sharapova 6-4, 6-3 Saturday to win the Nasdaq-100 Open in Miami.
St. Petersburg star Kuznetsova won the all-Russian final thanks to a superior serve and forehand, repeatedly driving Sharapova into a corner and then smacking a winner into the open court. Kuznetsova calmly closed out the victory with her fourth ace, then sank to her knees with a grin.
Instant-replay technology used at the tournament to settle disputed line-calls was a success, organizers and tennis players said. 
A total of 161 calls were challenged during the March 22-April 2 combined men’s and women’s event. Of those, 53 were successful.
“If [Miami] is any indication, fans are in for an even more entertaining experience as we continue to roll out electronic line calling at ... WTA Tour events,” said the tour’s Angie Cunningham.
“Our players have really been impressed with the system, and they are finding out just how hard it can be to call a ball traveling at the speeds that our players hit it these days,” she added in a statement. The men’s tour was equally impressed.
“We could not be more pleased with how the video review system worked in its first use, but I also feel this first tournament showed a lot about the professionalism and skill of our line judges,” said Gayle Bradshaw, the ATP Administrator of Rules & Competition.
“We look forward to evaluating the entire process, and we will work in the coming months to improve the challenge system in order to make the experience even better for players, spectators and the television viewers.”
When a player challenged a call in Miami, the result of the challenge was shown simultaneously to players, officials and fans on video boards in the stadium within seconds and to television viewers worldwide.
Under the new system, which is due to be used at a grand slam for the first time at this year’s U.S. Open, each player receives two challenges per set to review line calls.
Top seed Roger Federer maintained his stranglehold over Croatia’s Ivan Ljubicic with a 7-6 7-6 7-6 win to lift his second straight Nasdaq-100 Open title on Sunday. 
Victory in two hours, 56 minutes for the Swiss world number one earned him an American tournament double for the second year in a row after back-to-back wins in Indian Wells and Miami.
“It was a very lucky match point [net cord],” Federer told reporters. “I’m extremely happy. To win back-to-back like this is unbelievable. I never thought I’d do it again. It really feels great.”
The Swiss, who has now beaten Ljubicic in their last seven ATP meetings, took his 2006 win-loss record to 28-1 — a run that includes four titles.
Four of Federer’s meetings with Ljubicic have come in finals with the Swiss now 10-3 against Croatia’s Davis Cup captain.

(Reuters/AP)

TITLE: IN BRIEF
TEXT: Rice Pressures Iraq 
BAGHDAD — U.S. Secretary of State Rice and British Foreign Secretary Jack Straw said Monday that while it is up to the Iraqi people to chose their own leaders, the international backers who have spent blood and money to end a dictatorship here have a right to expect that it will happen quickly. 
Neither Rice nor Straw pointed to any specific accomplishment from a day and a half spent huddling with nearly all of Iraq’s squabbling factions. 
But they said their message that Iraq must quickly form a government of national unity got through. 
“We are entitled to say that whilst it is up to you, the Iraqis, to say who will fill these positions, someone must fill these positions and fill them quickly,” Straw told reporters at a news conference.
“There is no doubt the political vacuum that is here at the moment is not assisting the security situation,” Straw said.

Boy’s Death Stuns Italy
ROME — Prosecutors in the slaying of a toddler that has horrified Italians said Monday investigators had believed until the bitter end that the boy might be alive and said his death constituted a “moral defeat.”
The killing of 17-month-old Tommaso Onofri — apparently because he was crying too much — haunted the nation and prompted some politicians and citizens to call for the death penalty. 
For a month, Italians had hoped for the safe return of curly-haired Tommaso, snatched from his home on March 2. 
Hopes were crushed when his body was discovered late Saturday.
“Our objective was always winning the child’s freedom, and that was a hope that didn’t leave us until the end,” Bologna Prosecutor Enrico Di Nicola said at a news conference that was televised on Sky Tg24 cable news. 
“Today it is with regret that we must say that we feel a moral defeat because of what happened.”

Unknown Flu Strain
BEIJING (AFP) — Over 400 students at a university in central China’s Henan province were hospitalized with high fevers linked to an unknown flu virus, state press and a school official have said. 
The outbreak began on March 26 when 22 students were hospitalized with high fevers, Xinhua news agency said.
The next day the number of sick students at the Henan University of Science and Technology in Luoyang city rose to 88, and on March 28 there were 208 sick students in the university’s infirmary, it said.
“There were over 400 students that became feverish with the flu,” a university official who declined to be named told AFP when contacted by phone. He refused to detail what type of flu it was or how the outbreak had succeeded in infecting so many students.

More French Resistance
PARIS (AFP) — The government of President Jacques Chirac of France was braced for more protests over its contested youth jobs law, amid the first signs of a possible resolution of the month-long crisis. 
Unions and student groups planned a fifth day of nationwide strikes and demonstrations for Tuesday, hoping to repeat their success of a week ago when more than a million people took to the streets against the unpopular First Employment Contract.
The mobilisation comes after Chirac’s address to the nation on Friday, in which he offered an elaborate compromise to end one of most disastrous periods of his 11-year presidency: signing the controversial measure into law but immediately promising new legislation to amend its most contentious points.