SOURCE: The St. Petersburg Times DATE: Issue #1177 (43), Tuesday, June 13, 2006 ************************************************************************** TITLE: WTO Bid Is Making Progress, Says Snow AUTHOR: The Associated Press TEXT: Treasury Secretary John Snow said Saturday the United States and Russia had made progress in talks on Moscow’s bid to join the World Trade Organization, and the two nations could reach a deal before next month’s G8 summit. “I’m not forecasting that it will be done, but I’m saying that a lot of groundwork has been put in place and I’m hopeful that it can be accomplished,” Snow told a news conference after a meeting in St. Petersburg of finance ministers from the Group of Eight leading industrialized nations. Russia is chairing the G8 summit in St. Petersburg in mid-July for the first time. Moscow’s push for accession into the WTO has been stymied by disputes with the United States over financial market liberalization and protecting intellectual property, among other issues. Russia’s export-oriented industries stand to profit handsomely from the freer access to Western markets with WTO membership. It has been negotiating since 1994 to join the 149-member global body. The United States is the last commercial power holding out on Moscow’s WTO accession bid. Russia has signed agreements with the European Union, China and Japan. Snow said he had discussed the WTO accession issue with his Russian counterpart, Alexei Kudrin. “We are getting closer, there are still some things to get done,” Snow said. “I hope we can get them done in the next few weeks. It would be wonderful to get that done before the G8 heads of states’ meeting in St. Petersburg.” Russia has had to embark on a major set of legislative reforms to fall in line with WTO rules, including producing a new customs code. Under WTO rules, each member has the right to seek its own trade deal with a candidate before approving that candidate’s membership. The bilateral deals negotiated by individual members are eventually consolidated so that all members trade with the new member under the same conditions. Russian officials have said Moscow should be ready to accede to the organization by year’s end. As the chairman of the G8 for the first time, Russia is keen to flex financial muscles that have been bulked up by billions of dollars in oil money flowing into its coffers at a time of record world prices. Russia is the world’s second largest oil exporter after Saudi Arabia. TITLE: Citizens Remain Unsure About ‘Russia Day’ AUTHOR: By Galina Stolyarova PUBLISHER: Staff Writer TEXT: As the country celebrated Russia Day on Monday with its citizens enjoying an extra day-off, only 23 percent of the people were able to correctly identify the holiday, according to a poll organized by the Moscow-based Yury Levada Analytical Center this week. Fifteen percent of respondents said they had no idea what the holiday is all about, while the vast majority of those polled by the Levada Center experts, called the June 12 holiday “Independence Day.” Only every fourth participant of the poll knew accurate information about the background of the holiday. The holiday, widely known as Russia Day, has been celebrated annually since June 12, 1990, when Russia adopted a sovereignty declaration seeking more independence from the collapsing U.S.S.R. Its official title is the Day of the Passage of the Declaration of State Sovereignty of Russia. On June 12, 1991, Boris Yeltsin was elected as president of the Russian Federation, and later that year the Soviet Union ceased to exist. “Because we have made that choice, we now live and work in a democratic state, in a liberated society, where an individual and their free spirit are of the highest value,” President Vladimir Putin was reported by Interfax news agency as saying on Thursday at a reception to mark Russia Day. The origin of the holiday lies in a 2 1/2-page declaration by the first Congress of People’s Deputies of the Russian Soviet Federal Socialist Republic that spells out the democratic goals of Russia within the framework of the Soviet Union. Called the Declaration of State Sovereignty, it was adopted on June 12, 1990, by a vote of 907 for, 13 against. The 1990 document formed an important ground for the country’s post-Soviet development, though many of the goals set out in the declaration have yet to be achieved. The declaration states that the country’s goal is to ensure “the inalienable right of every individual to a worthy life.” It also declares the intention of creating a democratic, law-based government based on the rule of law. In St. Petersburg on Monday a group of over 150 protesters from left-wing opposition movements gathered on St. Isaac’s Square to speak up against corruption, arbitrary rule imposed by civil servants and human rights violations during the army drafts. The protesters countered Putin’s positive speech with local stories of being mistreated and abused by state officials at various levels. According to the Levada Center, 62 percent of Russians regard the Russia Day as nothing more than an extra day-off, and ignore its ideological background. Only 12 percent of the poll’s participants feel that independence has helped positive developments in the country’s economy. Twenty percent of respondents said “independence” (from the Soviet Union) has won Russia recognition as an internationally influential state. The same poll shows that 22 percent of Russians are proud to hold a Russian passport and live in the country, the figure having doubled since 2003 when the agency asked the same question in a similar poll. Among the other points covered, the 1990 declaration recognizes the norms of international law concerning human rights and provides guarantees of political, economic, ethnic and cultural rights for all nationalities in the Russian Federation. It affirms the public’s ownership and right to exploit and dispose of the country’s natural wealth. The declaration affirms political pluralism and guarantees the equal rights of individuals, political parties, social organizations, mass movements and religious bodies to participate in political and social life. The declaration also affirms the separation of political power among the legislative, executive and judicial branches as the basic principle of the Russian government. TITLE: Russia to Forgive Debt Owed by Poor Nations AUTHOR: By Vladimir Isachenkov PUBLISHER: The Associated Press TEXT: Russia said Friday that it plans to write off about $700 million in debt owed by the poorest countries — a move reflecting its soaring oil-fueled wealth and a desire for equal footing with the world’s top industrialized nations. Finance Minister Alexei Kudrin made the statement on the eve of a meeting of Group of Eight finance ministers, saying that helping impoverished nations to fight diseases and get access to energy resources should be a key priority for the world’s wealthiest countries. “The released funds could be spent on the most important development programs,” Kudrin told reporters at a joint news conference with World Bank chief Paul Wolfowitz. Kudrin also said that the G8 finance ministers will issue a separate statement Saturday on measures to combat poverty and improve energy infrastructure in developing nations. “Ensuring energy security and securing stable energy supply to the world is the key theme of Russia’s chairmanship,” he said. Russia, which is chairing the G8 for the first time, wants to flex financial muscles that have been buffed by billions of dollars in oil money flowing into its coffers at a time of record world prices. It is the world’s second largest oil exporter after Saudi Arabia. Earlier this year, Russia said it planned to write off $688 million in debt owed by 16 African countries, and has offered to pay back $22 billion in Soviet-era debts to the Paris Club of rich nations. Kudrin said that Russia had already written off about $5 billion in Soviet-era debts to the poorest nations between 1997 and 2004. The Russian minister also said Russia had reached an agreement with the World Bank to require debtor countries to use $250 million of the $700 million in debt it is writing off to combat infectious diseases, primarily malaria, and help improve energy infrastructure in African nations. “These projects means our relationship is moving to a new level,” Kudrin said. Wolfowitz hailed Russia as a “new development partner” and underlined that the new package is important as the “money that will save lives.” Earlier, the international relief organization Oxfam called on the G8 to expand debt cancellation to more countries and called on the finance ministers and leaders to make good on their pledges to boost aid in the education and health sectors. Last year, G8 members agreed on a $37 billion debt write-off. Activists “will be looking to the G8 in 2006 to expand debt cancellation to all the countries that need it in order to combat poverty,” Oxfam said. Preparing the agenda for next month’s summit, the ministers are also expected to discuss how the United States is dealing with its huge trade deficit and what policies other countries are pursuing to bolster domestic growth as a way of supporting U.S. exports — and helping reduce that trade deficit. Oil prices and energy policy are expected to dominate the ministers’ discussions Saturday. Kudrin said earlier this week that they would review the effect of higher energy costs on poorer nations, as well as the role played by the World Bank and IMF. The G8 countries — the United States, Japan, Germany, France, Britain, Italy, Canada and Russia — have called for better data on oil production and reserves to help markets function more efficiently. They also have urged G8 oil producers to use their surging profits to boost global production. TITLE: Ingush Police Official, Family Killed in Attack AUTHOR: By Nabi Abdullaev PUBLISHER: Staff Writer TEXT: MOSCOW — Musa Nalgiyev, the commander of Ingushetia’s OMON riot police and his three children, brother and guard were gunned down Friday in the Ingush town of Karabulak. At about the same time, other gunmen fired on Galina Gubina, deputy head of the administration of Ingushetia’s Sunzhensky district, who died on her way to the hospital. The twin attacks were the latest in a string of high-profile assaults on the republic’s leadership. Saturday and Sunday were declared days of mourning in Ingushetia. Police have mounted a massive effort to ferret out the assailants. The Prosecutor General’s Office and the chief prosecutor in the republic have joined forces to investigate the attacks. According to eyewitnesses, Nalgiyev’s attackers blocked the police commander’s Niva SUV with their VAZ sedan as the commander was taking his children to kindergarten, Russian press reported. The gunmen fired on the SUV with automatic weapons, killing everyone inside instantly. The children’s ages ranged from two to six. Several minutes later, as Gubina was getting into her Volga sedan, she was shot several times. Gubina, who headed a commission tasked with resettling ethnic Russians in Ingushetia, was about to go to her office in the village of Ordzhonikidzevskaya. The gunmen fled in a VAZ hatchback. On Sunday, the gunmen’s abandoned hideout and one of the cars they had used in the Friday attacks were found near the village of Yandare, Interfax reported. The rebel web site Kavkazcenter reported Sunday that Ingush rebels killed at least four special forces officers who stormed their hideout before fleeing unharmed. Ingushetiya.ru, an independent Ingush web site, reported Sunday that intense gunfire was heard near Yandare. The republic’s chief prosecutor, Makhmud-Ali Kalimatov, and the republic’s interior minister, Beslan Khamkhoyev, told Interfax on Friday that Nalgiyev and Gubina had died because of the work they were doing. “Nalgiyev was an active guardian of law and order in the republic, and many were upset by his stance toward lawbreakers,” Khamkhoyev said. He noted that Gubina, with her involvement in returning Russians to Ingushetia, had already been subject to an attempt on her life. Two years ago, a bomb went off under Gubina’s car, severely wounding her, Kommersant reported Saturday. Makhmud Sakalov, the speaker of the Ingush parliament, told Interfax on Friday that all attacks on local officials aimed to destabilize the republic. Issa Kostoyev, one of Ingushetia’s Federation Council senators, called Friday for strengthening the republic’s law enforcement agencies. Kostoyev said that rebels in neighboring Chechnya were being effectively forced into Ingushetia by Russian armed forces and police. In the past several months, attacks on senior leaders in Ingushetia have escalated. Rebels in Ingushetia killed the deputy Interior Minister Dzhabrail Kostoyev; kidnapped Magomed Chakhiyev, a lawmaker and the father-in-law of President Murat Zyazikov; and attempted to kill Health Minister Magomed Aliskhanov. Ingushetia, one of the country’s poorest regions, came under attack by Chechen rebels two years ago. In the attack, more than 60 police and other law enforcement officials and more than 30 residents were killed in nighttime ambushes. TITLE: IN BRIEF TEXT: Plane Crash MOSCOW (SPT) — A plane on a training flight crashed outside of Moscow Sunday, killing the pilot-instructor and a passenger, an emergency official said. The Yak-52 plane hit the ground around 4 p.m. near the village of Klimyentevo, a duty officer with the Emergency Situations Ministry said. Palestinians Backed MOSCOW (AP) — Russia supports Palestinian President Mahmoud Abbas’ idea of holding a referendum on establishing a Palestinian state alongside Israel, the foreign minister said Friday. Abbas was expected Saturday to announce a date in late July for the plebiscite. TITLE: City Encyclopedia Gets Online English Version AUTHOR: By Evgenia Ivanova PUBLISHER: Staff Writer TEXT: An English version of the web-based “Encyclopedia of St. Petersburg” was launched last Thursday, giving the city an opportunity to substantially improve its visibility for the outside world. The ambitious project, featuring more than 3,500 articles, 1,600 illustrations, and 4,600 addresses, aims to “make the legacy of Petersburg accessible worldwide.” The Likhachev International Charity Foundation, which created the project, hopes that the electronic encyclopedia, based on a 2004 print edition of a book of the same name, will become a focal point for people interested in the history and culture of the city. A St. Petersburg-based scholar, Dmitry Likhachev, in whose honor the foundation is named, is quoted in the organization’s press release as saying that such a book “is what the city impatiently awaits.” “We need to make life in our city easier… I wish every success to the fulfillment of this important goal,” Likhachev said. “It was quite hard work. We have brought together a very serious team of authors and each of our articles, however short, was checked and verified to the last letter,” Alexander Kobak, the foundation’s executive director said Monday in a telephone interview. “There is plenty of information about St. Petersburg out there on the Internet, but much of it is inconsistent and is not written specifically for the site it appears on — we, on the other hand, guarantee a certain quality,” Kobak said. Denis Kuskov, head of the St. Petersburg-based research and information agency SOTAweek, said that until now there has been no comprehensive Internet resource for historical information on the city. “St. Petersburg’s government site aside, there’s no web resource reflecting not only news, but also other aspects of city life,” Kuskov said Monday. “All the websites of this kind usually present information in a very fragmented way, and they are far from being complete,” Kuskov added. According to Kobak, the foundation has no plans to substantially enlarge the English version, as “3,500 articles is already enough.” “We will only be correcting mistakes, improving the search tools and promoting the resource to the world,” Kobak said. “You could examine the city’s history across a much larger number of pages [than are currently on the site]. There would be at least 10,000 pages, if one were to write about the history and culture of the city thoroughly. But the Likhachev Foundation’s attempt to create a comprehensive resource is certainly worthy of attention,” Kuskov added. The site’s address is www.encspb.ru. TITLE: Police Mistake Rugby Match for Brawl PUBLISHER: The Associated Press TEXT: ROSTOV-ON-DON — Scrums, mauls and rucks and an oddly shaped soccer ball? To police in southern Russia, this rugby match sure looked like a mass brawl. Police responding to a report of a large group of men fighting Sunday evening found dozens of cars and people gathered in an empty field on the outskirts of Rostov-on-Don, and what appeared to be a fight between criminal gang members. More than 70 officers detained some 100 people before determining that they were playing rugby instead of brawling, releasing them several hours later after scolding them for not alerting authorities ahead of time. “Given the difficult, troubled situation in the region, at a time when counterterrorism actions are being actively conducted, citizens are obligated to inform [authorities] either verbally or in writing of their intentions,” said a precinct police officer, who was not authorized to speak to the media and so did not want his name to be used. “Then there wouldn’t be such an unpleasant situation.” The Rostov region is adjacent to the troubled North Caucasus, where violence from Chechnya regularly spills into nearby areas. Organizers denied doing anything wrong, and said police arrested them in spite of their repeated explanations that they were playing a game. Amateur rugby players in the region have no regular place to play, they said, so they gather around half-dozen times a year wherever they can. “The fact that police took us to be hooligans, this isn’t the first time,” said one of the organizers, Alexander, who declined to give his last name for fear of offending the police. “Honestly, it’s the first time that we’ve ever heard that we’re supposed to make public our plans to the local police.” TITLE: UN Launches Russian Racism Probe PUBLISHER: Reuters TEXT: GENEVA — A United Nations human rights investigator began a weeklong visit to Russia on Monday to probe a growing wave of racist killings and beatings. Doudou Diene, UN special rapporteur for contemporary forms of racism, racial discrimination, xenophobia and related intolerance, was to meet officials and activist groups in Moscow and St. Petersburg during the trip, which ends Saturday. “There has been a very serious rise in the number of racist attacks in the Russian Federation, including murders, especially in Moscow and St. Petersburg, and this will be the main subject of concern,” UN human rights spokesman Jose-Luis Diaz told reporters in announcing the visit Friday. A UN statement said Diene would also visit “several communities that are reportedly victims of discrimination.” Diene, a legal and human rights expert from Senegal, will report his initial findings to the General Assembly in a few months, it said. His final report will go to the new UN Human Rights Council, due to hold several sessions during the year. TITLE: ‘Against All’ Could Go Off Ballots AUTHOR: By Francesca Mereu PUBLISHER: Staff Writer TEXT: MOSCOW — The State Duma has tentatively approved a bill that would remove the “against all” option from ballots in national elections, a change the opposition criticized as an attempt to silence discontent with the state. The bill sailed through the first of three required readings Friday by a vote of 352-85, with no abstentions. United Russia and the Liberal Democratic Party, or LDPR, supported the bill, the Communist Party opposed it, and Rodina was split. The “against all” option has grown increasingly popular as a protest vote in recent years. An election is ruled invalid if “against all” beats all the candidates on the ballot. Supporters of the legislation said people could still protest by not voting. LDPR Deputy Alexander Kurdyumov said people should “make up their minds before going to vote.” “Voting ‘against all’ is like not taking part in the elections,” he said by telephone. “By abolishing it, Russia is getting in line with the rest of the world, where they don’t have such an option,” he added. “Usually, people simply don’t vote when they don’t know whom to pick,” the Duma’s Constitution and State Affairs Committee said in a note calling on deputies to back the bill, Interfax reported. But opposition politicians insisted that voters needed the option. “If we had fair elections like in the West, we wouldn’t need such an option. But in a system without real elections, ‘against all’ is an important instrument for people to express their feelings,” said Sergei Mitrokhin, whose Yabloko party unsuccessfully challenged the 2003 Duma elections after failing to win any seats. Communist Deputy Viktor Ilyukhin said voters have grown skeptical of elections, and authorities are worried. “But instead of fighting to have transparent elections in the country, the Kremlin has chosen the simplest way: They get rid of the ‘against all’ option so nobody will notice that people are displeased,” Ilyukhin said. Boris Nadezhdin, a deputy leader of the Union of Right Forces, which also failed to win Duma seats, said the Kremlin was hoping to secure a smooth handover of power to President Vladimir Putin’s designated successor in 2008. “Imagine a ballot with the name of a certain Ivanov, a completely unknown successor. Most people would vote ‘against all,’” he said. “The Kremlin does not want this.” Ilyukhin called the bill as a step back from democracy and an attempt to help United Russia in the next Duma elections, set to take place in 2007. United Russia last year backed laws that forbade parties from forming coalitions, raised the threshold to get into the Duma from 5 to 7 percent and abolished individual races. Rodina Deputy Andrei Saveleyev said United Russia was trying to create a single party system. TITLE: Legendary Designer Laments Misuse of Assault Rifle AUTHOR: By Henry Meyer PUBLISHER: The Associated Press TEXT: MOSCOW — Mikhail Kalashnikov says he designed the assault rifle that bears his name to fend off the German invasion of the Soviet Union. But six decades later, he laments its transformation into the worldwide weapon of choice for terrorists and gangsters. “Whenever I look at TV and I see the weapon I invented to defend my motherland in the hands of these bin Ladens I ask myself the same question: How did it get into their hands?” the 86-year-old Russian gun maker said. “I didn’t put it in the hands of bandits and terrorists and it’s not my fault it has mushroomed uncontrollably across the globe. Can I be blamed that they consider it the most reliable weapon?” he said. The question is especially acute as an 11-day U.N. conference on curbing the small-arms trade convenes June 26 in New York. Kalashnikov is thinking of sending the delegates a statement. Sturdy, simple and cheap, firing 600 bullets a minute, the world’s estimated 100 million Kalashnikovs account for up to 80 percent of all assault rifles. In Africa’s civil conflicts or in violence-ridden Latin American nations, it sells for as little as $15. Its genesis dates to 1941, when Kalashnikov was in a hospital with severe wounds from a German shell that hit his tank in the battle of Bryansk in western Russia. Thinking about the Soviet forces’ inferiority due to their lack of an automatic weapon, he says he had a brainstorm one night and jotted down a rough design which he worked on for much of the next six months, assisted by Red Army colleagues. They worked “in a burst of enthusiasm, out of a huge desire to make a contribution to victory over the fascist invaders,” recalled Kalashnikov in a postal and e-mail exchange with The Associated Press. It would become the Kalashnikov, or the AK-47, for the year the design was completed. Two years later it became standard issue for the Soviet army. It came too late for service in World War II, but it earned its reputation in the Cold War that followed, exported by the Soviet Union to arm Third World allies and insurgents. It proved ideal for desert and jungle — easily assembled and able to keep firing in sandy or wet conditions that would jam a U.S.-made M-16. The Soviet Union is dead, but the Kalashnikov empire thrives. Updated models — AK-74, AK-101, AK-103 — are manufactured in Russia. The AK-74 is produced by more than a dozen other countries and is used by the armed forces of more than 50 countries as well as militant groups. It’s seen in Osama bin Laden’s videotapes and on the flags of Mozambique and the Hezbollah fighters of Lebanon. “We sold the weapons to some countries for a symbolic price or even for nothing, with the aim of assisting national liberation struggles. Of course, this meant the Kalashnikov became available around the world,” the designer said. Today, it’s the first piece of technology many children in conflict zones will encounter. Boy soldiers routinely carry Kalashnikovs. It has also haunted the modern Russian army. In the war in Chechnya, both sides wield Kalashnikovs. Viktor Myasnikov, a defense commentator from Russia’s Nezavisimaya Gazeta newspaper, says many imitations are produced in Africa or delivered from former Soviet bloc countries as well as China and Egypt. At the U.N. conference, human rights groups will push for an international treaty banning the export of small arms and other conventional weapons to countries where they are likely to be used to trample human rights. Kalashnikov said Amnesty International and Oxfam, the British charity, have asked him to write a statement for their campaign against small-arms proliferation, and he is also thinking of sending a separate statement addressed to the U.N. conference. Izhmash, the company in the central Russian city of Izhevsk that manufactures Russia’s updated Kalashnikovs, refuses to give production numbers or name customers, but Myasnikov, the military expert, says that it has been only in the thousands each year, exported to Latin American and Middle East police forces. But a Venezuelan order for 100,000 Kalashnikovs has hugely boosted production this year. Kalashnikov, despite his advanced age, is still chief designer of the state-controlled company. He says he never made a kopeck in royalties because his invention was never patented. “At that time, patenting inventions wasn’t an issue in our country. We worked for socialist society, for the good of the people, which I never regret,” he said. He’s also proud that last year, the Kremlin Armory added a collection of Kalashnikovs to its permanent exhibit of Russian weaponry, and that U.S. soldiers who fought in Vietnam and in Iraq have compared the rugged Kalashnikov favorably with the M-16. TITLE: Officials Skirt Hardest Hit In Struggle Against AIDS AUTHOR: By Anastasiya Lebedev PUBLISHER: Staff Writer TEXT: MOSCOW — The nation’s chief epidemiologist and State Duma deputies pledged support Thursday for the war on AIDS but avoided discussing hard-hit groups such as prostitutes, drug users and homosexuals, in contrast with officials from other countries, including China and India. Their comments came at a conference featuring lawmakers from Germany, Britain, China, India and Brazil in advance of the G8 summit, where AIDS is expected to be prominently discussed. Chief epidemiologist Gennady Onishchenko and Tatyana Yakovleva, head of the Duma’s Public Health Committee, warned the disease was spreading into the general public and stressed the need for vaccines and free treatment for those who were infected. Onishchenko added that HIV would be extensively discussed at the Group of Eight summit in St. Petersburg in July. Russia has 340,000 officially registered AIDS cases. International estimates put the figure at over 1 million. But unlike their counterparts from other countries who spoke of “injecting drug users” and “men having sex with men,” Onishchenko and Yakovleva employed a more traditional vocabulary: They used the term “addicts” to describe drug users, and Onishchenko referred to sex between men as “the unnatural way.” Yakovleva said that at least half of the approximately $100 million allocated in Russia for fighting AIDS this year would go toward prevention, including the raising of awareness and provision of testing. Asked about prevention among drug users, who account for the majority of new infections in Russia, she made it clear the government would not accommodate their habit. “We categorically oppose substitution therapy,” Yakovleva said, referring to a program that has been popular in the West for decades that involves giving heroine users methadone. Substitution therapy is supported by officials from the UNAID program and the World Health Organization as an important tool in battling drug addiction and the spread of HIV. Lawmakers from other countries, by contrast, said needle-exchange and substitution-therapy programs were part of their anti-HIV efforts. They also discussed the need to provide treatment to people who took part in illegal activities such as drug use and prostitution. Despite reluctance to adopt more current tactics to battle the disease, Yakovleva did note that Russian regions would be able to decide on their own whether to fund needle-exchange programs with federal money. Russian AIDS activists at the Eastern European and Central Asian AIDS Conference held in Moscow in May repeatedly complained about the scarcity of such prevention programs for drug users. AIDS activist Mikhail Rukavishnikov criticized the government’s opposition to substitution therapy, saying it was time to catch up with the rest of the world. One country that has embraced substitution therapy is China. Li Honggui, a Chinese lawmaker, said his government had made reaching out to high-risk groups a priority. Needle exchanges are also available in China, he said. Indian lawmakers said they were working on a bill that would prohibit discrimination against people with AIDS and make it easier for those involved in illegal activities to get health care. TITLE: Ousted Political Leaders Find a Safe Haven in Russia AUTHOR: By Anatoly Medetsky PUBLISHER: Staff Writer TEXT: MOSCOW — The Moscow office of Georgia’s Justice party looks hospitable. Its steel door isn’t locked, and there is no guard inside to glare at visitors. Security could be a lot tighter. The office’s head, Dzhemal Gogitidze, was the top cop in Georgia’s restive region of Adzharia until it returned to the federal government’s control in 2004. Although there is an international warrant out for his arrest, he is not hiding and considers himself surrounded by friends in Moscow. A portrait of President Vladimir Putin adorns a shelf above his chair. “I think all sound-minded Russians support us,” he said, when asked if Justice, which seeks to overthrow Georgian President Mikheil Saakashvili, had the backing of the Kremlin. Interpol put Gogitidze on a wanted list at Georgia’s request in May. He is accused of extortion, fraud and blowing up a bridge that advancing Georgian troops intended to use to cross into Adzharia in 2004. He denies wrongdoing. Georgia, with the help of Interpol, is also looking for Justice’s leader, Igor Giorgadze, on suspicion of trying to assassinate then-President Eduard Shevardnadze in 1995. Giorgadze, a former KGB colonel who headed Georgia’s security service at the time, fled to Moscow and lived in the city openly until Interpol put out a warrant for him in 1996. He resurfaced late last month to attack Saakashvili’s leadership as “schizophrenic tyranny” at a Moscow news conference. The two fugitives from Georgia are among the most prominent of a dozen or so senior officials who have fled to Russia from other former Soviet republics and the former Yugoslavia to avoid inquiries since 1992. The president is responsible for political asylum cases. The Kremlin declined immediate comment Thursday and asked that questions be sent by fax. Observers said the Kremlin was providing refuge to the former officials because they had been friendly with Russia when in power. The latest two groups arrived after uprisings linked to fraud-tinged elections unseated governments in Ukraine in 2004 and Kyrgyzstan in 2005. Former Kyrgyz President Askar Akayev and his family have settled near Moscow, and Akayev is teaching mathematics at Moscow State University. He was named a member of the Russian Academy of Sciences on May 24. Kyrgyz prosecutors have opened several criminal investigations into Akayev, but no charges have been filed. Akayev’s son Aidar, who is also in Moscow, is wanted on charges of smuggling and money laundering. Russia has welcomed at least four former senior Ukrainian officials since 2004, including former Interior Minister Mykola Bilokon, former security service chief Volodymir Satsyuk, former Odessa Mayor Ruslan Bodelan and Igor Bakai, who headed the Presidential Property Department, according to Ukrainian authorities and news reports. Bakai and Bodelan are wanted at home on charges of exceeding their authority. Ukraine’s Interior Ministry said in January that both had been granted Russian citizenship. Echoing a view shared by Russian officialdom, Kirill Frolov, an analyst at the CIS Institute, a think tank, said the cases appeared to be linked to the former officials’ support of Viktor Yanukovych, the pro-Russian candidate in Ukraine’s 2004 presidential election. Bakai and Bodelan are reportedly engaged in business in Moscow and St. Petersburg, while the whereabouts of Bilokon and Satsyuk are unclear. It was unclear whether Satsyuk faced any charges. He hosted a dinner after which then-presidential candidate Viktor Yushchenko fell ill from dioxin poisoning. In addition to the Justice officials, Adzharia’s former leader, Aslan Abashidze, moved to Russia, where he is still thought to still be living despite an Interpol warrant for his arrest on Georgian charges of terrorism, organized crime and fraud. The warrant was issued in May. Among the first to flee to Russia from their post-Soviet homelands were Azeri officials, including Azerbaijan’s first president, Ayaz Mutalibov. Azerbaijan is still seeking Mutalibov’s extradition on charges of negligence for an Armenian attack in February 1992 that killed hundreds of Azeris and for his purported involvement in a coup plot in 2001. Now a Moscow resident, Mutalibov has dismissed the charges and heads the little-known Social Democratic Party of Azerbaijan, which does not have any seats in the country’s parliament. Like Akayev, Mutalibov brought his family with him, but most of his children have returned home. Russia also has offered refuge to the former head of the Azeri KGB, retired General Vagif Guseinov, and Abdurakhman Vezirov, Azerbaijan’s last Soviet-era leader, accused of crushing a pro-independence uprising in 1990. Azerbaijan has asked Russia to extradite Guseinov, now a Russian citizen and head of the Institute of Strategic Studies and Analysis, a think tank. Mirjana Markovic, the wife of former Yugoslav President Slobodan Milosevic, has lived in Moscow since 2003, evading Serbian charges of abuse of power and corruption linked to her husband’s 13-year reign. She did not attend his funeral in March due to fear of arrest. Her son, Marko Milosevic, wound up in Moscow after fleeing Serbia in 2001. In 2004, a Serbian court convicted him in absentia for threatening to kill a prominent opposition activist with a chainsaw, but a higher court later ordered a retrial. The charges were dropped in 2005 after a key witness said he no longer remembered what happened. Most of the former officials no longer have any political clout and are unable to help promote Russian interests in their homelands, said Sergei Mikheyev, an analyst with the Center for Political Technologies, and Vyacheslav Nikonov, the Kremlin-connected head of the Politika Foundation, a think tank. TITLE: Ex-Azeri Leader Begged Kremlin for Apartment AUTHOR: By Anatoly Medetsky PUBLISHER: Staff Writer TEXT: MOSCOW — The first president of independent Azerbaijan, Ayaz Mutalibov, had to beg the Kremlin for an apartment after he fled a rebellion in 1992. Mutalibov left Baku aboard a Russian military plane just three months into his term. He is wanted in Azerbaijan on charges of negligence for an Armenian attack in February 1992 that killed hundreds of Azeris. Baku also accuses him of involvement in a coup plot in 2001. Mutalibov, who dismissed the accusations as “political intrigue,” said by telephone that one of the first things he did upon arriving in Moscow was to ask the Kremlin for a home. The Presidential Property Department provided him with a state apartment in 1994, but he was not allowed to register there and had to apply for a new guest visa every 45 days, Mutalibov recalled. The government finally donated a four-room apartment to him and his family in 1997, in the remote district of Zhulebino, where he still lives. In 1999, then-President Boris Yeltsin granted him the status of political refugee, and only at the end of last year did he receive a refugee card allowing him to travel abroad, Mutalibov said. Despite the apartment problems, Mutalibov said he remained a friend of Russia. “We think that relations with Russia are a priority for Azerbaijan because we are neighbors that have long lived as a single country,” he said. “We are linked by a lot of things — for example, the fact that about 2 million of my countrymen live here.” During Mutalibov’s short term as president, Azerbaijan joined the Commonwealth of Independent States, a loose group that replaced the Soviet Union. Mutalibov said Russia had never tried to use him to influence Azeri politics and that he had not sought the Kremlin’s support for his political ambitions. He heads the Social Democratic Party of Azerbaijan, which does not have any seats in the Azeri parliament. Still a citizen of Azerbaijan, Mutalibov said he hoped to return to his home country. “It is a disgrace that the first president of Azerbaijan has to live abroad,” he said. TITLE: Finance Ministers Fail To Unite on Energy Security AUTHOR: By Arkady Ostrovsky and Scheherazade Daneshkhu PUBLISHER: Financial Times TEXT: There were plenty of smiles and warm words about friendship and collaboration exchanged between finance ministers of the club of eight industrialised nations on a sunny weekend in St. Petersburg. John Snow, the outgoing US treasury secretary, “commended” his Russian friend and counterpart Alexei Kudrin on his performance as a host of the club. Peer Steinbrßck, Germany’s finance minister, brushed off concerns arising from Russia’s suspension of gas supplies to Ukraine in January, saying Russian actions were “misunderstood.” The imperial splendour of the pink Mikhailovsky palace, where the ministers met — not to mention a performance of Swan Lake at the legendary Mariinsky Theater — was one reason for the good cheer. But the amicable atmosphere disguised the lack of progress on some of the more sensitive and divisive aspects of energy security. Energy security is the central theme of Russia’s first presidency of the G8 but the meeting failed to put on the table some members’ concerns about Russia’s attempts to use its energy as a political tool. As Roland Nash, chief strategist at Renaissance Capital, the Moscow based investment bank, put it: “When relationships are down, the only thing left is diplomacy. And when you have nothing concrete to say, the best thing is saying nothing.” Apparently keen to avoid stoking tension at next month’s St. Petersburg summit of G8 leaders, to be hosted for the first time by President Vladimir Putin, ministers settled for a face-saving agreement on general principles of energy security. These included the need to combat rising oil and gas prices through energy efficiency, more investment in the sector and greater transparency in market data. The finance ministers said global economic growth remained strong and was more broadly based. But with oil still trading at about $70 a barrel, they warned that growth was threatened by high energy prices and trade imbalances. The ministers also sought to keep up political pressure for more effort to break a deadlock in the Doha global trade talks. The promotion of initiatives to improve access to electricity and energy in poor countries was agreed. There was also commitment to a pilot project to encourage pharmaceutical companies to develop vaccines against infectious diseases and an accord to draw up plans against a possible bird flu pandemic. For its part, Russia dropped the defensive stance adopted at the last G8 meeting it chaired only weeks after the suspension of gas deliveries to Ukraine. It agreed, for the first time, to the inclusion in the final communiquÎ of a reference to the Energy Charter — a development hailed as “major progress” by Thierry Breton, French finance minister. The charter, a legal document signed but not ratified by Russia, requires it to open up access to its pipelines for other countries. “What is important is that we all recognise the principles behind this charter,” he said. But a few minutes later Kudrin said that, while Russia recognised the principles, it disagreed with the charter’s present form. He said the document was out of date and needed to be changed to include nuclear energy and redefine rules of transit and investment. Kudrin, however, backed Gazprom’s strategy of expanding into other countries’ downstream sectors, saying this offered stability. The International Energy Agency last week questioned Gazprom’s strategy, saying it would struggle to meet existing sales contracts unless it invested more in production and exploration. Kudrin reiterated that Russia was a reliable supplier of energy, but turned the tables on consumers of Russian energy, saying they bore as much responsibility for energy security as did the producer. He said energy producers needed “the security of demand” to justify investment in production. “We have quite stable growth of energy supply, but we are encountering a demand shock.” TITLE: City Entrepreneur Digs Deep AUTHOR: By Yelena Andreyeva PUBLISHER: Special to The St. Petersburg Times TEXT: St. Petersburg soil will soon be on sale to the public. A new line of small and colorful souvenirs — red and blue velvet bags — are full of soil from both St. Petersburg and the USSR and decorated respectively with the emblem of the city’s open bridges and the Soviet crest. They are aimed not only at foreign tourists, however, but also at Russians wishing to identify themselves with the city and country, said Denis Markov, project manager and head of St. Petersburg Business Club of Young Entrepreneurs at a press conference on June 6. According to him, the new souvenirs have their roots in tradition — international soldiers used to keep a handful of their motherland’s soil like an amulet to protect them from malignant demons and foes. “We wanted to start an unusual project but also decided to make use of an age-old experience,” he said. “St. Petersburg’s soil is an invaluable thing for many people who no longer live here. For them it is not just soil but the memories and emotions they felt, and even city energy packed into one little bag.” Markov said that the soil is taken only from places “sacred” to St. Petersburg’s citizens — places touched by Russian emperors and historic figures. During the process of production the soil is disinfected, exposed to drying and burning. The project “Soil of St. Petersburg” follows on from another line of souvenirs called “Air of St. Petersburg” that was launched by the entrepreneur Sergei Luchnikov during the 300th anniversary of St. Petersburg in 2003. The idea to sell air occurred to Luchnikov several years ago when he was given a souvenir, “Air of Paris.” He thought that St. Petersburg’s air could also cut it as a good souvenir. The unique bouquet of city air is safely bottled up and taken from well-known city sites. In Luchnikov’s opinion, the value of such gifts depends on peoples’ imagination — those who understand its symbolic nature are not just buying an empty bottle. “They know that they can use it to share the good emotions and feelings they experienced while in the city with their relatives and friends,” he said. Luchnikov has been granted a patent to sell souvenir air and soil all over Russia and plans to expand his business to other cities. “The products seem to be extremely popular and we want to launch ourselves in Moscow, to sell the capital’s soil,” said Markov. At a cost of 300 to 350 rubles for a bag of soil and 200 to 380 rubles for a bottle of air, the souvenirs are aiming to occupy the niche of exclusive “representative” gifts. They will probably be among the presents given to the VIP guests at the G8 summit held in St. Petersburg in July. “More than 270 bottles of St. Petersburg air have recently been bought by the president Vladimir Putin’s administration,” said Luchnikov. TITLE: Serious Gains are Found Among the Trees AUTHOR: By Yekaterina Dranitsyna PUBLISHER: Staff Writer TEXT: An international exhibition of forestry equipment, Interles, starts on Tuesday and will run through Friday in Leningrad Oblast, Interfax reported, citing the regional government press service. The exhibition is being organized for the 10th time and, as last year, coincides with the St. Petersburg International Economic Forum, which runs from Tuesday to Thursday. “The open-air exhibition will be organized over 60 kilometers from St. Petersburg, at the 64th kilometer of Skandinavia road (E-18), in the forest. That’s why we decided to change the dates of the exhibition from fall to summer,” Interfax cited Mikhail Dedov, chairman of the committee for natural resources and environment protection at the regional government, as saying. Interles is a counterpart to the Elmia Wood exhibition in Sweden, Dedov said. It presents the leading Russian and foreign equipment producers and allows for the discussion of forestry problems, investment opportunities, forest usage and recovery. An industry expert described Interles as practically the only opportunity to see forestry equipment in Russia. “Any country with large expanses of forest should have a decent exhibition so that such equipment is not just confined to catalogues,” said Denis Sokolov, executive director of Northwest Timber Processing Companies Confederation. “In previous years Interles was not always a success. Sometimes it was staged at the wrong time, for example in fall, when there is already a layer of snow. I hope that this time managers will be able to fit the exhibition into their busy schedule,” Sokolov said. “This year we expect more visitors, more exhibits and more information,” he added. Interles visitors will have the opportunity to plant a tree and follow its growth. Visitors can also watch forestry competitions and demonstrations of new technologies for the construction of wooden houses. Sokolov said that, although there is rarely any signing of contracts, the exhibitions do stimulate cooperation between Russian and foreign companies. Foreign participants are mainly equipment producers, Sokolov said. Usually they represent Finland, Sweden, Canada and Germany. “Some of them produce equipment that could be used in other spheres, including road building and agriculture,” he said. The exhibition also attracts investment and leasing companies, exploitation and servicing firms, he said. Timo Salomaa, communications manager at John Deer in Europe and Russia, said that Russia has the biggest potential out of all the markets where it sells forestry equipment. Salomaa estimated potential forest cuttings in Russia at 400 million cubic meters a year, while actual cutting at the moment accounts for only 170 million cubic meters. Around 85 percent of cuttings in Russia involve a ‘full-tree’ method and for the most part require Russian equipment. Foreign equipment is meant for the ‘cut-to-length’ method, which accounts for only 30 million cubic meters of cuttings in Russia, Salomaa said. “Another challenge in Russia is distribution over long distances,” he said. Salomaa estimated the potential demand for new equipment at 9,000 units a year, while currently only 1,000 new forestry machines are sold in Russia annually. “Forestry is topical because the government has not yet found the economic tools that will double GDP,” Interfax quoted Alexander Belyakov, chairman of the committee for forestry development at the Russian Chamber for Trade and Industry, as saying on Wednesday. “Today, with profit only derived from extraction and not hydrocarbon processing, the fuel and energy complex has exhausted its potential as the engine of the national economy. And forestry could really help us in this respect,” Belyakov said. By stimulating wood processing, Russia could double forestry’s contribution to GDP within five years, Belyakov said. At the moment Russia produces $10 billion worth of wood annually. Within 20 to 25 years the country could earn between $100 billion and $130 billion from forestry, which is “comparable with its revenue from oil and gas,” Belyakov said. TITLE: Russia Fattens Up a State-Owned Oil Company AUTHOR: By Andrew E. Kramer PUBLISHER: The New York Times TEXT: MURMANSK, Russia — In this small bayside town on the Barents Sea, far to the north of Moscow, Russia is finally realizing an ambition to build a world-class oil port in the Arctic. But first, authorities had to nudge aside an earlier tenant: a strategic nuclear submarine base. To accommodate the needs of Rosneft, the Russian state oil company, the boundaries of Severomorsk base were shifted about five nautical miles. Now, where submarines once maneuvered, Rosneft has parked a red and green supertanker — three football fields long — to serve as a floating oil terminal. “It’s a great asset,” Peter O’Brian, Rosneft’s American chief financial officer and a former Morgan Stanley banker, said of the ship, which bobs in the waves a few hundred yards from an aircraft carrier. Rosneft is a company quickly growing bigger and richer, even by the standards of an oil industry at the crest of energy prices, and it has been acquiring new fields, export terminals and exploration licenses at a dizzying pace. All this expansion is not just about size. Indeed, it has been, in large part, preparation for an initial public offering. On Wednesday, the government-run RIA news agency reported that Rosneft plans its long-anticipated offering in mid-July, though it did not specify a date. Rosneft will list on both Russia’s Micex stock exchange and the London Stock Exchange, the agency reported. While many large private companies in Russia lately have been hemmed in, or nearly shut down, the state-owned Rosneft is on an explosive growth spurt. Here in Murmansk, 900 miles north of Moscow, the company is benefiting from the tanker terminal in the only major northern port that doesn’t freeze in the wintertime. Elsewhere, Rosneft picked up promising fields when it bought the Northern Oil company in 2002, bringing a mini-gusher on the tundra onto its balance sheets, though critics said the auction was fixed. Two years later, Rosneft obtained its largest subsidiary, accounting for two-thirds of its production, when authorities seized property from the oil company Yukos in a protracted and politically tinged tax dispute. Mikhail B. Khodorkovsky, the Yukos chairman, had financed opposition political parties. He is now serving an eight-year sentence in a Siberian penal colony. Rosneft, meanwhile, bought the former Yukos asset, the Yugansk production unit, from a shell company that a few days earlier had won the multibillion-dollar oil fields at an auction with only one bidder. The Yukos production unit now forms the core of the Rosneft assets being presented to investors. It helps that Rosneft has a patron, a faction in the Kremlin known as the siloviki, or members of the military and secret police, led by Igor I. Sechin, a deputy director of the presidential administration, is also chairman of Rosneft’s board. Now Rosneft is hoping for the support of investors, too. The offering will be a chance for investors to buy into the Kremlin’s profitable oil machine. Though promising, the enterprise is closely entwined with Russian state goals, which includes balancing energy exports between China and the West. At times, this could run against American interests. The offering is also coming to the market six months after Gazprom, the Russian company that is the biggest extractor of natural gas in the world, briefly halted gas supplies to Ukraine in a dispute ostensibly over pricing. But the effect was to punish a pro-Western democracy, Ukraine, on its border; Western investors continued to buy Gazprom shares regardless. Still, signs that Moscow is using energy exports as a tool in an emboldened foreign policy, to regain lost influence in the former Soviet Union and beyond, have given some investors pause. The financier George Soros argued in a letter to The Financial Times last month that subscribing to the Rosneft initial public offering would serve to underwrite the Kremlin’s foreign policy. “If the Rosneft I.P.O. went forward, it would consolidate and legitimize a state of affairs that is detrimental to Europe’s energy security,” Mr. Soros wrote. The British fund manager of Foreign & Colonial questioned in a note to investors whether Rosneft, before clarifying the process of obtaining Yugansk, should be allowed to list on the London Stock Exchange. Still, after the nationalizations of oil fields in Middle Eastern countries like Kuwait and Saudi Arabia in the 1970’s, the oil companies that lost property continued to do business in those countries. Investors these days may have even shorter memories. Rosneft holds nearly the same amount of reserves as Exxon Mobil, America’s largest energy company. But it is more aptly compared with state giants like Aramco of Saudi Arabia, the China National Petroleum Corporation or PetrÑleos de Venezuela. Rosneft is marketing itself on the basis of growth potential. The company is pushing for higher valuations during the share offering that would make sense only if it continues to grow quickly. After a few years of increases in production at existing oil fields, future gains in oil output in Russia depend on acquiring new reserves. That will mean winning licenses from the government. Rosneft, the argument goes, is well positioned to do just that. As with the Bolivian state energy company, YPFB, which could benefit from a nationalization of that country’s natural gas fields, Rosneft rose from obscurity two years ago with the nationalization of Yukos. Government-run oil companies are murky and often fuel authoritarian and populist governments, but they have a grip on most of the world’s remaining oil in the ground, an advantage over private energy operators. Some are also open to investors. The China National Petroleum Corporation and the Oil and Natural Gas Corporation of India both have minority private investors. Though Russian state companies have a lingering reputation of cronyism and theft from Soviet times, they can be better bets than private companies run by oligarchs who may be out of favor with the Kremlin. As the public offering day approaches, the debate is framed in Moscow as weighing “oligarch risk” against “government risk.” The state has awarded Rosneft exploration licenses in eastern Siberia, while others have come away empty-handed. Rosneft will make its debut on the stock market with 18.9 billion barrels in audited reserves, in contrast to Exxon’s 21.5 billion. Rosneft is hoping to follow a similar formula for opening itself to foreign investment as Gazprom, at least in terms of obtaining a high stock price. Moreover, Rosneft clearly hopes its approach of using the corridors of political power to make profitable business deals — like placing the supertanker close to a naval base — will appeal to investors eager to buy in at the ground floor. The initial public offering comes as the latest step in a complicated series of deals to absorb Yukos assets and bring Gazprom under majority state control, while opening both Gazprom and Rosneft to minority investors. The public offering proceeds will repay a $7 billion loan to a consortium of Western banks. Rosneft used the money in 2005 to buy Gazprom shares to bolster the state share in that competing company beyond 51 percent. Critics say inefficiency inherent in state control dim Gazprom’s — and Rosneft’s — long-term prospects. Derek Butter, who heads the corporate analysis group at Wood Mackenzie, an oil consultancy based in Edinburgh, said Rosneft’s close ties to the Kremlin are an asset within Russia but a detriment abroad because of lawsuits by former Yukos owners. That does not mean Rosneft’s influence will stop at the border. Murmansk harbor has been a launching pad for projecting Russian power for half a century. TITLE: Nuclear Reforms Nearing Completion AUTHOR: By Yuriy Humber PUBLISHER: Staff Writer TEXT: MOSCOW — President Vladimir Putin said Friday that the country’s nuclear energy reforms were “close to completion,” signaling that the Kremlin would soon put forward long-awaited legislation to modernize the industry into a market-driven corporation. The move could open the atomic sector to private investments as a way to fund the ambitious program to build 40 nuclear reactors inside the country and 60 abroad by 2030. “The government has been given the task of preparing the program to support both the nuclear arms complex and the nuclear energy industry,” said Putin, who was chairing a meeting of top atomic industry officials for the first time. “This work is close to completion, and at present it is important to make sure it is carried out efficiently,” Putin said, according to a record of the meeting on the Federal Atomic Energy Agency’s web site. Agency chief Sergei Kiriyenko has said about $60 billion would be needed to build the 40 domestic reactors. Since his appointment last December, Kiriyenko has sought to transform the nuclear energy sector into a vertically integrated corporation, with all of its enterprises and institutes incorporated. “Today in the world there is a consolidation of efforts” in the nuclear sector, Kiriyenko told Friday’s meeting. “Therefore we need new management systems that allow us not only to compete but to win.” The nuclear program is aimed at boosting Russia’s reliance on nuclear power from 16 percent of the country’s electricity supply to 25 percent by 2030. “Unless new nuclear reactors are built, nuclear energy’s share will fall to 1 percent or 2 percent of the overall energy balance,” Putin said Friday, reiterating past statements. From this year, Russia will look to build two reactors annually, speeding up to three reactors per year from 2009 and four per year by 2015. Part of the program’s success relies on the nuclear sector having secure contracts and possibly control over atomic machine-building plants and reviving industrial construction enterprises. Kiriyenko said Friday that there was progress in both areas, as well as on safety and anti-terrorism measures. In the last two months, the state has brought several machine-building assets, including Yekaterinburg-based United Heavy Machinery, or OMZ, under state control. Analysts said they saw Putin’s words as a confirmation that the sector’s restructuring would not be dragged out for years, as has happened with state electricity monopoly Unified Energy Systems. “The message is clear that Putin wants to see the sector restructuring plan completed and approved by the State Duma, perhaps before the Group of Eight summit next month,” said Erik DePoy, a strategist with Alfa Bank. “From an investment standpoint, we will be looking for details on the new business model for [fuel monopoly] TVEL,” which has been tipped as the possible basis for a holding company to manage nuclear power sector assets, DePoy said. The meeting was also attended by the country’s nuclear military officials, including Defense Minister Sergei Ivanov and military top brass. Putin said that atomic industry reforms would be vital to maintain Russia’s military nuclear strength. “The solidity of the nuclear shield, the condition of the nuclear weapons complex is an important part of Russia’s status as a world power,” Putin said. The country’s civilian and military nuclear energy industries come under the control of different state officials, although many of Russia’s nuclear facilities fulfill orders for both. TITLE: IN BRIEF TEXT: Indesit Factories ROME (Bloomberg) — Indesit, Europe’s third-largest home-appliance maker, may build plants in Poland or Russia, Il Sole/24 Ore reported, citing an interview with the company’s chief executive officer Marco Milani. The appliance maker is seeking to expand its production close to its fastest-growing consumer markets, Milani said in an interview published by the newspaper. “Between Russia and Poland, there isn’t a big difference in production costs,” Milani told the paper. “What counts is the destination of the products; we are evaluating what to do.” Milani said Indesit wants to keep its factories in the European Community to reap the benefits of the common European market. Gazprom Stake MOSCOW (SPT) — In April Gazprom signed contracts for acquiring a 23.52 percent stake in the NTV-Plus satellite channel and 30.56 percent in NTV television company from Evrofinans group for 2.171 billion rubles, Interfax reported Thursday. According to the annual report, by December last year Gazprom owned 76 percent of NTV-Plus voting shares and 69 percent of NTV voting shares. Lukoil Investment ISTANBUL (Bloomberg) — Lukoil, Russia’s biggest oil company, may spend $1 billion to set up a chain of gas stations in Turkey, Sabah reported Monday, without saying where it got the information. Lukoil’s application to the Turkish energy markets regulator has been approved, and the company has been given three months to register brand names and inject capital, Sabah said. A Turkish retail operation would serve as a outlet for Lukoil’s refiners on the Black Sea coast, the newspaper reported. The Turkish regulator has granted about 39 applications for fuel retail licenses, Sabah said. Novolipetsk Purchase MOSCOW (Bloomberg) — Novolipetsk Steel, Russia’s fourth-biggest steelmaker, agreed to pay $550 million for Russian rival VIZ Stal. VIZ, which is based in Ekaterinburg, Russia, is the nation’s second-largest electrical-steel maker, Novolipetsk said in a Regulatory News Service statement Friday. TITLE: Steely Arcelor Rejects Mittal Bid PUBLISHER: The Associated Press TEXT: BRUSSELS, Belgium –- Steelmaker Arcelor SA said Monday that its board has rejected Mittal Steel Co.’s revised offer and recommended that shareholders approve a deal with Russia’s Severstal. But Arcelor said the Severstal transaction does not preclude Mittal’s 25.8 billion euro ($33 billion) offer, and the board said officials will meet with Mittal in order to explore possible improvements to the bid. Arcelor, which has long resisted Mittal, said the current offer “is inadequate as it continues to undervalue” the company and called the Severstal transaction “a more attractive alternative from a strategic, financial and social point of view.” The company had announced the deal last month with Severstal — a white knight favored by Arcelor’s board — under which that company’s main shareholder Alexei Mordashov would get about 32 percent of the combined company. The fate of Luxembourg-based Arcelor lies in the hands of its shareholders, who will vote this month whether to approve a hostile takeover bid from Mittal or a plan to merge the company with Severstal. They will also decide if Arcelor can go ahead with plans to buy back up to a quarter of its shares. Arcelor said Mittal’s revised offer does not take into account the company’s financial results for 2005 and the first quarter of this year, or Arcelor’s strategic plan. The company has maintained all along that its plans, such as the share buyback, will bring shareholders more benefits than a takeover by Mittal. Mittal and Arcelor representatives met last week after Mittal delivered a standalone business plan. Arcelor said Monday that the meeting confirmed the companies’ differing strategies — Mittal’s focusing on volume and Arcelor’s on margins — and synergies from a tie-up would be low compared to those that would be generated by an Arcelor-Severstal deal. Arcelor also defended the structure of the vote it has set up for the Severstal deal. Mittal has complained that Arcelor has sewn up the deal by saying that 50 percent of all shareholders need to vote against it to block it. Only 35 percent went to Arcelor’s annual meeting in April. “The board is certain that it acted not only lawfully, but also in the best interest of Arcelor, its stakeholders and its shareholders,” it said. “In fact, the board is convinced that in the absence of the Severstal proposal, Mittal Steel would not have improved its offer.” TITLE: Russia to Write Off Debt Owed by World’s Poorest AUTHOR: By Vladimir Isachenkov PUBLISHER: The Associated Press TEXT: ST. PETERSBURG — Russia said Friday it plans to write off about $700 million in debt owed by the poorest countries — a move reflecting its soaring oil-fueled wealth and a desire for equal footing with the world’s top industrialized nations. Finance Minister Alexei Kudrin made the statement on the eve of a meeting of Group of Eight finance ministers, saying that helping impoverished nations to fight diseases and get access to energy resources should be a key priority for the world’s wealthiest countries. “The released funds could be spent on the most important development programs,” Kudrin told reporters at a joint news conference with World Bank chief Paul Wolfowitz. Kudrin also said that the G8 finance ministers will issue a separate statement Saturday on measures to combat poverty and improve energy infrastructure in developing nations. “Ensuring energy security and securing stable energy supply to the world is the key theme of Russia’s chairmanship,” he said. Russia, which is chairing the G8 for the first time, wants to flex financial muscles that have been buffed by billions of dollars in oil money flowing into its coffers at a time of record world prices. It is the world’s second largest oil exporter after Saudi Arabia. Earlier this year, Russia said it planned to write off $688 million in debt owed by 16 African countries, and has offered to pay back $22 billion in Soviet-era debts to the Paris Club of rich nations. Kudrin said that Russia had already written off about $5 billion in Soviet-era debts to the poorest nations between 1997 and 2004. The Russian minister also said Russia had reached an agreement with the World Bank to require debtor countries to use $250 million of the $700 million in debt it is writing off to combat infectious diseases, primarily malaria, and help improve energy infrastructure in African nations. “These projects mean our relationship is moving to a new level,” Kudrin said. Wolfowitz hailed Russia as a “new development partner” and underlined that the new package is important as the “money that will save lives.” Earlier, the international relief organization Oxfam called on the G8 to expand debt cancellation to more countries and called on the finance ministers and leaders to make good on their pledges to boost aid in the education and health sectors. Last year, G-8 members agreed on a $37 billion debt write-off. Activists “will be looking to the G8 in 2006 to expand debt cancellation to all the countries that need it in order to combat poverty,” Oxfam said. Preparing the agenda for next month’s summit, the ministers are also expected to discuss how the United States is dealing with its huge trade deficit and what policies other countries are pursuing to bolster domestic growth as a way of supporting U.S. exports — and helping reduce that trade deficit. The G8 countries — the United States, Japan, Germany, France, Britain, Italy, Canada and Russia — have called for better data on oil production and reserves to help markets function more efficiently. They also have urged G8 oil producers to use their surging profits to boost global production. TITLE: Russia Becoming Less Attractive for Investors AUTHOR: By Maria Levitov PUBLISHER: Staff Writer TEXT: MOSCOW — Russia is no longer seen as one of the world’s most attractive investment destinations, according to Ernst & Young’s global survey of business executives, released on Thursday. Russia, which had held on to the No. 8 spot for the past two years, disappeared from the list of the top 10 most-attractive countries for foreign direct investment this year. The ranking is based on the perceptions of 1,019 executives polled around the world. “Success for Russia is not a given yet,” Marc Lhermitte, an author of the annual report, said Thursday. “Competition is tough, and progress needs to be made.” Analysts attributed the slip in the rankings to a lack of significant improvements in the country’s business climate, recent public relations flops and increasing competition from other locations. Investors are “impatient” to see Russia’s business climate become more rules-based and more transparent, Lhermitte said by telephone from E&Y’s Paris office. “I wouldn’t say that investors lost interest in Russia, but there have been more dynamic countries.” China and the United States shared first place, followed by Germany and India in joint second, and then Poland, according to the European Attractiveness Survey’s top-10 list for 2006. “Nothing has really changed fundamentally” in the past two years, said MDM Bank’s chief economist, Peter Westin. But Russia had some bad publicity this year, he said, stemming from the spat over gas with Ukraine and negotiations with the United States on joining the World Trade Organization. Gazprom drew fire for cutting gas supplies to Ukraine during a price dispute in January, leading to supply shortfalls in Europe and doubts about Russia’s reliability as an energy supplier. Media reports also focused on the country’s lax protection of intellectual property rights, which remains a sticking point in Russia-U.S. talks on Russia’s accession to the WTO. “Some of the criticism has been justified,” Westin said. Perhaps surprisingly, Russia has the seventh-best image in Europe as an investment destination, two places ahead of its No. 9 ranking in terms of the number of foreign direct investment projects carried out last year. Germany is perceived as Europe’s best investment destination, but comes in third by the number of investment projects. Poland, which is viewed as the most attractive after Germany, is in fourth place by number of projects. Image outpacing reality “expresses future intent,” Lhermitte said. Companies still plan to invest in Russia, which dropped one spot from last year’s ranking of Europe’s most attractive locations for future investment. Russia came in third after Poland and Germany for countries where companies plan to carry out direct investment projects. TITLE: Germany To Allow Early Repayment PUBLISHER: Bloomberg TEXT: ST. PETERSBURG — Germany agreed to allow Russia to make early repayment of 1.3 billion euros ($1.64 billion) of Soviet-era debt as part of a broader agreement within the Paris Club, German Finance Minister Peer Steinbrueck said Monday. Russia will repay the debt at face value. The two countries failed to agree on early repayment of 6.4 billion euros’ worth of Soviet-era debt that former German finance minister Hans Eichel packaged as bonds and sold to investors in 2004, Steinbrueck said today in St. Petersburg, where he met with his counterparts from the Group of Eight. “I have offered the pre-payment of 1.3 billion euros within the Paris Club because it doesn’t harm us and wouldn’t put us at a disadvantage,’’ Steinbrueck told reporters. “Negotiations about the remaining 6.4 billion euros continue.’’ Russian President Vladimir Putin said during a two-day meeting with German Chancellor Angela Merkel in April that Russia wants to fully repay its debt this year to the Paris Club, an informal group of creditor nations, as foreign currency reserves surge on higher prices for oil and gas. Russian debt to the Paris Club stands at about $22 billion, including the securitized bonds sold by Germany, Russian Finance Minister Alexei Kudrin said this week. Kudrin said today he hoped to reach a final decision on the remaining debt “in the next week or two.’’ Paris Club members will meet later this month to start negotiations. Russia last year paid $15 billion early to the Paris Club, helping it reduce its foreign debt to $75.2 billion as of March 31. Another early payment this year would put its foreign debt below 10 percent of gross domestic product. Deputy ministers and “capital market experts’’ will examine in “coming days’’ whether a compromise can be reached that puts Germany and Russia in a “win-win position,’’ Steinbrueck said. TITLE: Rosneft IPO Set For London PUBLISHER: Bloomberg TEXT: MOSCOW — Rosneft, Russia’s state-owned oil company, said it will sell shares in an initial public offering in Moscow and London to cut debt and attract private investors, in what may be the world’s biggest IPO this year. The company plans to raise as much as $14 billion in the IPO, three people familiar with the situation said June 9. The sale would value Rosneft as high as $80 billion, two of the people said then. That would make the transaction the world’s largest IPO so far this year and the third-largest ever, after NTT DoCoMo’s $18.4 billion offering in 1998 and Enel SpA’s $17 billion IPO in 1999. The stock will go on sale later this month and probably start trading on July 14, the people familiar with the transaction said. Rosneft will sell global depositary receipts on the London Stock Exchange and ordinary shares in Russia, the company said Monday. TITLE: Scandinavian Firm Building Local Ties AUTHOR: By Yekaterina Dranitsyna PUBLISHER: Staff Writer TEXT: One of Scandinavia’s largest construction companies, NCC, is cooperating with local investment and construction firm Petropol to build a large-scale multifunctional complex in St. Petersburg’s Primorsky district, the companies said May 31 in a statement. Petropol and NCC have acquired 7.8 hectares of land in the former agricultural area of Fermskoye Shosse to create 145,000 square meters of housing and 15,000 square meters of commercial space. As well as 2,380 apartments, the complex will include a nursery, a primary school, shops and a drug store. At present the companies are carrying out territorial plans and pre-projection works. “In its plans, NCC is being attentive to the living convenience of the complex. The infrastructure is being developed keeping all the possible needs of a modern family in mind,” Jukka-Pekka Uuskoski, regional director of NCC in Russia, was quoted in the statement as saying. A distinctive feature of the project is the combining of two types of residential areas unified by a single concept. Petropol will construct five 24-story high ‘comfort class’ buildings and four 10-story high buildings in the central part of the complex, the total area of construction being around 108,000 square meters. NCC will build eight ‘business class’ homes of up to nine stories high, with a total area of about 52,000 square meters. “Such an approach — creating neighboring objects of different characteristics — is designed to prevent a glut of monotony over a large territory,” said Sergei Sedykh, development director of Petropol. Petropol CEO Mark Lerner said the complex is to be located in an “up-and-coming district of St. Petersburg.” Construction is to start next year and is due for completion by 2010, with an estimated total cost of between $150 million and $200 million. Petropol will invest around $100 million of its own resources, including loans. The Bank of St. Petersburg has provided a credit of $30 million to Petropol. NCC will invest its own resources into the project. Last year, NCC turnover was 5.3 billion euros ($6.6 billion). In Russia NCC has already realized several industrial projects and reconstructed public buildings — in St. Petersburg the company built the Philip Morris plant in 1999 and participated in the construction of the dam and reconstruction of the Hermitage Theater. “An eight-hectare plot is practically a whole neighborhood of dense city buildings. The territory and volume of construction will allow homes of different classes. ‘Comfort’ and ‘business’ are to a large extent similar segments appropriate for the Kolomyagi-Udelnaya area,” said Igor Luchkov, director of assessment, consulting and analysis department at Becar real estate agency. Most projects in this district are of ‘comfort’ class, he said. “The volume of the ‘business’ segment depends on the development’s exact location, especially on its panoramic views and proximity to Udelny park,” Luchkov said. He estimated the pay-back period at four to five years, taking into account the volume of financial and construction resources, as well as marketing activities, Luchkov said. “In terms of its total volume, the building of social infrastructure would insignificantly affect the economics of the project,” Luchkov said. Petropol is a part of the Gazstroiinvest group registered in February last year. Its largest project is a multifunctional residential complex currently being developed in the Nevsky district. The company plans to initiate a number of construction projects in the near future, amounting to over $150 million worth of investment. Sedykh said that Petropol is aiming to cooperate with industrial plants to ‘optimize the use of peripheral property.’ “Petropol is ready to become a real partner, creating the idea of territorial development, providing a package of approvals and documents, attracting investment and then receiving 20 percent of property capitalization,” he said. TITLE: IN BRIEF TEXT: Pyaterochka Style ST. PETERSBURG (SPT) — Pyaterochka Holding has opened a new store at Pulkovskoye Shosse according to a new design, Prime-Tass reported Friday. This is the 45th Pyatyorochka discount store in the city. This year, 10 stores of the new design will open in St. Petersburg. Filling Plots ST. PETERSBURG (SPT) — The St. Petersburg Property Fund will offer 30 land plots for the construction of filling stations through auction on July 7, Interfax reported Friday. The sites are located along Moskovskoye, Kronshtadtskoye, Krasnoselskoye, Kolpinskoye, Beloostrovskoye and Petrozavodskoye Shosse. The starting price is $11.926 million. Last year Lukoil bought 30 sites in the city center for $10.27 million, TNK-BP bought 15 sites for $25.275 million. This year between 60 and 70 plots will be sold. Mortgage Security ST. PETERSBURG (SPT) — Vneshtorgbank will issue mortgage-backed securities totaling around $90 million. The securities will be offered on the European market for 29 years, the company said Friday in a statement. The Barclays and HSBC banks as well as the International Financial Corporation, organized the deal. It is the first time mortgage-backed securities are being issued in Russia. TITLE: Mobile Phone Providers Look to Customer Loyalty AUTHOR: By Alexander Yankevich PUBLISHER: Special to The St. Petersburg Times TEXT: Under conditions of high penetration, one of the essential tasks for mobile providers is the attaining of loyal subscribers. If, at the moment, companies are using price and bonus mechanisms to retain their subscribers, they will soon employ more subtle methods. It is worth remembering that for the last year St. Petersburg’s mobile market has seen 100 percent penetration (according to the quantity of active SIM-cards). According to the data of analytic agency ACM-Consulting this level was even exceeded by 0.4 percent in May 2005 — by the end of last year it had reached 118 percent, and is currently at 122 percent. Although the market continues to grow, that growth is slow. Around 40, 000 subscribers, or 0.6 percent of the city’s population, were connected in April, decreasing from 82,000 in March and around 70,00 in February. Nevertheless, these figures correspond to the number of “net” subscribers, which takes into account the outflow of the previous period, meaning the amount of connections really sold is higher, around 150,000 to 170,000 a month. Clearly most of these customers can be placed in a low-quality bracket. According to the market experts, up to half of all newly connected subscribers in Moscow and St. Petersburg belong to a group of “wanderers” — having finished a cheaply-obtained SIM-card one throws it away and looks for another similar variant. As such, the key for mobile providers becomes the retention of clients. The first use of economic means to encourage customer loyalty was launched as far back as 2004, with “Mobile TeleSystems” (MTS) and “Beeline” as the pioneers. The first offered a 15 percent discount on all calls for all subscribers who signed a year-long contract to use the company’s services. “Beeline” put forward a scheme called “Beebonus 15,” where a subscriber who spends no less than $15 over a certain period gets an additional 15 percent off a previous payment. Having acquired this bonus, the subscriber can then accumulate payments until they spend another $15 and so forth. This campaign developed into the federal program “Beebonus,” in which subscribers saved bonuses that could be spent in various shops, and on mobile phones. The program expired more than a year ago. Both of these providers quickly developed new schemes. MTS offered different supplements to their basic “fixed-term contract.” In August customers received a 50 percent discount on incoming or outgoing calls on the signing of a one-year contract. Beeline promoted variants of “Beebonus 15,” first under the name of “Priceless minutes,” and now called “+15.” The offer ended in the middle of May. In April the company promoted both local (“120 minutes gift”) and federal (“Free minutes”, “A year with SMS. Every first message a day free”) campaigns. But one of their major promotions became “Don’t run away from a gift,” which started at the beginning of this year and finished in March. The scheme involved receiving bonus points for making calls and sending SMS. On accumulating one of five amounts one could choose a corresponding present. According to the Beeline press service, more than 3 million subscribers (the company has about 45 million in Russia overall) took part in the promotion, of which more than 100,000 ordered presents. “At present this is the maximum number of responses we have ever generated with such a campaign. We are in the process of delivering the presents by post,” said Eugenia Aleshko, press secretary of the St. Petersburg branch of “VimpelCom,” the owner of Beeline. In the Northwest, around 1.5 million subscribers took part in the Beebonus program. As concerns the company “MegaFon,” its national bonus scheme “MegaFon Bonus,” was launched in August of 2005. As part of the campaign, those contracted subscribers who accumulate a certain amount of points — one point for every dollar spent — are legible to receive a reward — ranging from a package of free SMS to free local calls for a month. At the end of last year in St. Petersburg, one of MegaFon’s local branches launched the program “MegaFon Subscribers have the advantage.” Company subscribers in St. Petersburg and the Leningrad Oblast receive discounts for buying tickets to cultural or sporting events organized or supported by the company. The provider then issued special plastic cards given out when connecting to the net or paying over 500 rubles for phone services. According to MegaFon Northwest’s press-service, around 4 million subscribers are currently involved in the program “MegaPhone Bonus,” and on the whole participants spend around 15 million points a month on rewards. Another Northwestern precedent for loyalty programs, for the time being only launched by “Beeline” in Kaliningrad — Beeline acquired a developed player, which in its time was the first to bring GSM technology to the local market. The program “10 20 30” that Beeline is promoting in Kaliningrad, includes several means of retaining clients. Subscribers are given free minutes depending on what they spend, with increments for long-standing customers. The director general of Beeline’s Kaliningrad branch, Igor Klimko, said that over 2005 their branch increased the number of participants in the program by more than 80 percent. On the whole, providers are happy with the way their schemes are developing, though not everyone releases exact figures. Ruslan Gurdzhiyan, marketing director of MTS in the Northwest, said that, “economic measures to retain subscribers are justified in themselves. Reducing prices leads customers to use their phones more, that’s why such discounts can be considered as a compromise in order to retain subscribers,” According to data from Beeline in St.Petersburg loyal subscribers make up 70 percent of their total customer base — last year this index was 60 percent, in 2004 – 50 percent. At the same time, it is worth remembering that this company for the most part has prepaid subscribers, to which most mobile customers subscribe. Although the benefits of loyalty programs were dependent on the signing of a contract or spending a certain amount of money, providers are now preparing more subtle mechanisms to stimulating customer “faithfulness.” “It is very likely that discounts will soon be given to reward the length of a clients’ loyalty to a particular provider. Moreover, after a certain period of time loyalty programs will become segmented — marketing methods will correspond to each category of subscribers (those who talk a little, more than a little, a lot),” said Oksana Pankratova, an analyst at iKS-Consulting. “Benefits will differ both in quality (money, time you can spend on talking etc.) and quantity. Programs will be more actively used in combination,” she said. Not only analysts but providers openly talk about these possibilities. According to the sales director of the MagaFon Northwest, Leonid Khomutinnikov, “pricing methods of competition are losing their effectiveness. At the same time the quality of the product and level of service remain the most important, most effective market factors.” “Our plans include the creation of new federal and local loyalty programs, in particular projects with other brands. We, in particular, have plans to work with banks but are still not ready to announce such projects – they are at the stage of developing,” he said. Gurdzhiyan adds that one of the effective methods is the purposeful segmenting of the market. Any groups which can be ranked by a provider in respect to income, social characteristics, interests and age, as well as having the tendency to change subscribers or use additional services, can act as focus groups. Mobile providers have not forgotten about the other methods that retain subscribers. These include the developing of contact-centers, the front-line of work with subscribers and working on the emotional affection toward a certain brand, etc. Over the last year all of St. Petersburg’s leading GSM-players considerably modernized their contact-centers, and two out of the “big three” providers — Beeline and MTS — have made cardinal changes to their image. TITLE: Court Bans IPOC Suits PUBLISHER: Bloomberg TEXT: BERMUDA — The Bermuda Supreme Court banned all legal actions initiated by IPOC International Growth Fund regarding ownership of a 25.1 percent stake in MegaFon, Interfax reported Monday citing IPOC’s press service. The Bermuda court ruled that further action regarding IPOC’s suit in the St. Petersburg Arbitration Court about Alfa Group’s ownership of the MegaFon stake must stop, Interfax reported. The Bermuda court also banned other legal actions in Russian courts or elsewhere, Interfax said. IPOC said the Bermuda Supreme Court decision isn’t legally binding on Russian territory, Interfax reported. IPOC says it has the right to a stake in the mobile-phone company MegaFon after signing two options agreements with LV Finance, the previous owner, in 2001. Alfa Group acquired LV Finance’s entire business in 2003, Interfax said. TITLE: Alfa to Fight Telenor On Use of Swap Deal Stake PUBLISHER: Reuters TEXT: MOSCOW — Russia’s Alfa Group said on Thursday it would prevent Norway’s Telenor from trying to use a Vimpelcom stake, being acquired by a bank under a swap agreement, from influencing the company’s policy. Telenor said on Monday in disclosure documents it had made an equity swap deal with ING Bank for 3.5 percent of Vimpelcom, Russia’s No. 2 mobile phone company, in which both Alfa and Telenor have stakes. Under the swap deal, Telenor said it will neither own the 3.5 stake nor have the right to vote with the shares. Telenor said the agreement could help it hedge pricing risks and that it is in accordance with all laws. But Alfa said Telenor’s move could be an attempt to boost its influence over Vimpelcom without having to get permission from Russia’s Anti-Monopoly Service, which has said it has to approve any further share purchases by Alfa or Telenor. “I think we will succeed in preventing these shares from participating in operational management of the company,” Oleg Malis, senior vice president at Altimo, Alfa’s telecoms’ arm, told a news conference. Alfa and Telenor have clashed in court and in the media over the expansion of Vimpelcom in Ukraine, where Telenor controls market leader, Kyivstar. Telenor already has 26.6 percent of voting shares in Vimpelcom, or 29.9 percent of total stock, while Alfa has 32.9 percent of voting shares, or 24.5 percent of total stock in Vimpelcom. The conflict between Alfa and Telenor even prompted Vimpelcom CEO Alexander Izosimov to say he may leave his post when his contract expires in October. “We will do everything we can to keep Izosimov in the company,” Malis said. “We think that Izosimov should stay in the company for a longer period.” TITLE: Banks Still Leave Room For Excitement AUTHOR: By Anna Shcherbakova TEXT: I wanted to write a column on the consolidation of the banking sector. It’s a topical issue. Last week Societe Generale announced the purchase of 10 percent of Rosbank for $317 million with an option to buy another 10 percent. Such a price defies belief — according to industry experts, no Russian bank has ever received such a high valuation. The Initial Public Offering, or IPO, planned by Rosbank for 2006 and postponed because of the deal, could not provide Rosbank’s shareholders with an equivilant sum. Other banks have also announced their plans to go public. About three years ago I wrote an article for my newspaper called “Time to buy banks.” In it were no words like “IPO” or “foreign players.” One Russian banker went up to another with a share to sell. The negotiations were made in confidence, because other players could interrupt with higher bids. It was an exciting game to confirm the rumors, find out which banks were “for sale” and what evidence there was of actual negotiations. However most of those deals remained unfinalized. For example, Baltiysky bank, a target of many negotiations, still belongs to its old owners. Apart from several national deals — such as the acquisition of UralSib by Nikoil or PSB by state-owned VTB — the landscape of financial institutions has not changed that much. Concentration of the sector has not been as high as expected. On the other hand, the MDM-bank, known as an aggressive buyer of regional banks, sold almost all of its local assets to the St.Petersburg-based Eastern Europe Financial Corporation, known by its Russian acronym VEFK. Recently VEFK acquired the MDM-bank St.Petersburg, the largest of MDM’s local assets. That came as a complete surprise for the market — VEFK did not seem to be a significant player. Another group of players has come to the market — foreign banks. Some of them, like Raiffaisenbank, are eyeing up large acquisitions — it bought Impexbank, which is almost as big. Scandinavian banks, not long present on the Russian market, have been satisfied with acquiring small institutions whose main asset is a banking license. At the same time, some Russian banks have announced plans to sell their shares, presumably on European or American exchanges. An IPO should give them the opportunity to receive money from investors without losing control over their institutions. But these plans have yet to be fulfilled. And, despite the fashion for IPOs, there are still no banks among the 25 Russian issuers. It’s a question of time, said the owner of the mid-sized St.Petersburg bank. Recently, he announced that his bank was going public, but has already twice postponed the terms of the IPO. It’s also question of price, I might suggest. A small, unknown bank has less chance of making a decent sum, regardless of the vogue for Russian equity. Sooner or later a lot of Russian banks will be trading on the stock exchange, another banker said. According to him, an IPO is the best way to find a strategic investor for the future. In a couple of years then I’ll have the chance to write another story about mergers and acqusitions in the banking sector. Maybe it will be less exciting than before. Bankers predict that soon the process of buying and selling banks will become a matter of routine and then will it really matter whether a bank the size of a moth changes ownership? Anna Shcherbakova is the St. Petersburg bureau chief of business daily Vedomosti TITLE: A New G8 Opportunity on Aids AUTHOR: By John H. Tedstrom TEXT: As the 25th anniversary of the start of the AIDS epidemic takes place this summer, we will look back on a world forever changed. AIDS has shaken the foundations of nations and shaped the history of our generation. Nearly 40 million people are living with HIV/AIDS; 25 million have lost their battles. The word coming out of the United Nation’s recent high-level meeting on AIDS is one of cautious optimism. Indeed, in a handful of African and Caribbean countries the HIV prevalence rate seems to be tapering off, at least for now. But focus on these early signs of hope should not lead to complacency. Africa and other regions are still under siege by HIV. New pockets of HIV are emerging in the United States and other wealthy countries. Perhaps most worrisome is the simmering HIV epidemic in Eurasia and the slowness of the international community to address it. Russia, China and India, critical regional players in energy, trade and security, with shared borders and promising economic futures, not to mention 40 percent of the world’s population, are facing generalized epidemics in a few short years unless their governments and the international community take a more strategic stance and allocate the necessary resources. In July, Russia will host G8 leaders in St. Petersburg for their annual Summit. The G8 should use this year’s summit to put the AIDS epidemic in Eurasia on its strategic agenda and commit the necessary resources to avert catastrophe. The G8 can add Eurasia without diverting attention or resources to the hardest-hit regions, which must remain priorities. The threat from AIDS in Eurasia is clear: In China, over 800,000 people are living with HIV/AIDS. In Russia, despite the fact that it reports 338,000 officially registered cases, the number is at least one million. In India, over 5 million people are HIV-positive. Adult prevalence rates for both Russia and India are already at or above 1 percent, and growing. UNAIDS reports prevalence rates of 1 percent or more among unmarried young Chinese. In all three countries, HIV is spreading beyond its initial concentration in high-risk groups including, especially, intravenous drug users and sex-trade workers. International experts put the number of sexual transmissions in China at over half. The same is true for many Russian regions. Heterosexual transmission accounts for over 80 percent of new infections in India. All three countries face complex challenges from pockets of poverty, trafficking in narcotics and people that fuel the spread of HIV. And in all three countries the connection between Tuberculosis and HIV is a serious and growing challenge. The potential for HIV to spin out of control in these circumstances is real. Left unchecked, generalized epidemics in Russia, China and India would quickly add several million HIV-positive people to today’s total, overwhelming national HIV programs and international support systems. Governments in all three countries have led important improvements in HIV policy in the past few years. All three countries have increased their budgets for HIV significantly, and all three countries implement programs financed by the Global Fund and other donors. Global Fund grants approved for all three countries total over $630 million. But that is far from enough funding even for today, not to mention tomorrow. On Thursday, the State Duma, together with the British House of Commons and Transatlantic Partners Against AIDS, is convening parliamentarians and officials from the Group of Eight countries, China and India to examine both the threat posed by Eurasia’s emerging HIV epidemics and opportunities to cut it off. This meeting presents a historic opportunity for the G8 and its Eurasian partners to tackle a number of issues of strategic importance: n Building a sustainable financial base: While the generous investments of wealthy countries to the Global Fund are of historic proportions, the Fund’s sixth round needs to be funded fully soon. The Fund and other donors should act more proactively with regard to Eurasia. Recent increases in AIDS funding from Russian, Chinese and Indian government budgets should grow at least as fast as international contributions going forward. If we are to achieve the goal of universal access, increased funding — at national and international levels — is non-negotiable. n Strengthen public-private partnerships: The business community has demonstrated its tremendous capacity to fight AIDS around the world through education and prevention programs, media campaigns, support for NGOs and donations of life-saving medicines. In Russia, China and India the new generations of business leaders are just getting started and should be encouraged to do more. n Enhance scientific collaboration: At the G8 Summit, Russia will announce important new research initiatives on HIV, including an international vaccine lab. Indian and Chinese scientists have a great deal to offer in this regard and should be brought more fully into the international research community. n Ensuring supplies and access to treatment: Russia, China and India will all be major consumers of ARV treatments in the coming years. China and India have recognized production capacities. The place of these three countries in the global market will only grow and become more complex. They should be engaged now in a broader international policy dialogue to ensure adequate and reliable flows of medications. Only the G8 has the political capacity and resource base to deal with challenges of this magnitude. With leadership from Russia in St. Petersburg and the partnership of China and India, the G8 can add to its positive legacy on HIV/AIDS. Let us hope the G8 seizes the opportunity. John E. Tedstrom is president and founder of Transatlantic Partners Against AIDS. He served as director for Russian, Ukrainian and Eurasian Affairs at the U.S. National Security Council for former-President Bill Clinton. TITLE: Facing the Enemy PUBLISHER: Vedomosti TEXT: The latest opinion polls indicate that the image of an external enemy is gradually crystallizing in the consciousness of Russian citizens. We seem to be using a tried and tested method of overcoming a national identity crisis. Polls done in the 1990s and 2001-02 by the Public Opinion Foundation (FOM) and the All-Russian Public Opinion Research Center (VTsIOM) show over half of respondents taking a favorable view of the United States, with 13-20 percent taking an unfavorable view. In a recent poll, however, only 5 percent of respondents described the United States as a friendly country (compared to 11 percent of respondents in a 2005 poll). On the other hand, the proportion of respondents who see Washington as an enemy rose from 23 percent to 27 percent. Only 22 percent of respondents said that the influence of the United States on Russia is positive, while 58 percent took the opposite view. All the same, Russian citizens are prepared to make use of American achievements. In a recent poll done by the Levada Center, 72 percent of respondents approved of the American economic system. In comparison, 67 percent approved of the Chinese economic system, and only 30 percent approved of Russia’s economic system. But this willingness to learn from the American economy’s experience doesn’t prevent people from condemning the international role of the United States. In a VTsIOM poll this May, NATO also resumed the enemy role: 40 percent of respondents said that NATO poses a threat to Russia, while 34 percent took the opposite view. The Levada Center reports that the past year has seen substantial rises in perceptions of hostility from the United States (by 14 percent) and Ukraine (also by 14 percent), as well as Georgia (6 percent), Moldova (5 percent), and Poland (3 percent). Against this backdrop, isolation urges are also growing stronger, as shown by VTsIOM study in four CIS countries (Russia, Ukraine, Belarus, and Kazakhstan). According to Levada Center analysts, this change in attitude stems from the isolationist rhetoric used by Russian leaders and Moscow’s actual foreign policy. Moreover, it’s provoked by the Russian media’s incitement of spy mania and tension in relations with Russia’s CIS neighbors. The image of an enemy makes it possible to intensify patriotic attitudes and unite society — and to make society more manageable. Translated by Yelena Leonova. TITLE: Not All Fans Welcome in Germany’s East AUTHOR: By Mariam Lau TEXT: BERLIN — The history of global sporting events hosted by Germany brings up some dark memories. There were the Munich Olympic Games of 1972, at which a Palestinian terror squad killed 11 Israeli athletes. And of course there were the notorious Berlin Games of 1936, when the Nazis hosted the world. As organizer of this summer’s football World Cup, Germany seems set on improving its record with the motto “a time to make friends.” Many Germans, however, are worried that the slogan may promise too much. A remark by former government spokesman Uwe-Karsten Heye has set off a debate about an ugly resurgence of racism in the former East Germany, in the form of prowling violent gangs. “There are areas in Brandenburg and other parts of the East,” Mr. Heye said, “where dark-skinned foreigners might not make it out alive.” Just a couple of weeks ago, an Ethiopian-born engineer in Potsdam had his skull smashed at a bus stop when he got into a shouting match with two youngsters. The refugee organization Afrikarat, meanwhile, has promised to provide football fans from abroad with a map of “no-go areas.” While Mr. Heye was at first shouted down by local politicians from all major parties for gross exaggeration, the annual criminal statistics published the very next day confirmed the basic trend: Violent hate crimes were up 24% in 2005 — to 1,034 from 832 — and continued to be most prevalent in the East. If you adjust for the lower number of immigrants in, say, rural Mecklenburg-Vorpommern, a foreign-looking person is about 25 times as likely to be assaulted in the East as in the West, says University of Hannover criminologist Christian Pfeifer. “To me, ‘no-go’ is everywhere,” laments Moctar Kamara, head of Afrikarat. “In the seven minutes it takes me to walk from the refugee home to the station, I hear at least three racial slurs of the worst kind. I always look over my shoulder, in case someone sneaks up from behind. People spit at me even on the bus.” Not everyone who disagrees with Mr. Heye’s big picture denies that extremism is present. Police spokesperson Berndt Fleischer from Cottbus in East Germany — also a place reportedly swarmed by hordes of neo-Nazis — acknowledges the problem, but thinks it is ridiculous to say that extremism is a mass phenomenon. “These are isolated incidents, blown out of all proportion by sensationalist media,” he said. “This is not the Bronx, or South Central Los Angeles.” This is the stand taken by Chancellor Angela Merkel as well. Especially in Berlin and the surrounding state of Brandenburg, the numbers are actually declining, not least because police no longer treat xenophobic hate crimes as a negligeable misdemeanor. In Strausberg, another small town deemed to be “no-go,” a tightly knit network of church groups, ex-communists, anarchists and other grassroots organizations make sure that the boys from “Markischer Heimatschutz,” a neo-Nazi-group, can’t even give the local kindergarten a paint job. “This is the neo-Nazis’ latest strategy,” explains social worker Gunter Laurenzius. “They move in every niche that is vacated by the state.” Similar to Hamas in the Palestinian territories, they provide social services, report grievances to the authorities and give a sense of value and shared identity, especially to the children of the former communist elite, who have seen their parents become “superfluous,” without jobs or influence of any kind. Cars passing through Cottbus in the morning have to make room for young men on bikes so drunk they can’t ride straight. Although these incidents are by no means restricted to former East Germany, the politics of the past nevertheless accounts for their high frequency. The communist German Democratic Republic was built on the premise that Nazism had lingered on in West Germany in the form of capitalism, and that anti-Semitism was merely a secondary aspect of a much larger system of exploiting workers. Meanwhile, racism has been very much present in East Germany. The Vietnamese workers living in the GDR were considered a “gift” by their governments, which in exchange received development aid. They had to sign contracts forbidding them to “mingle” with Germans. Today, postreunification issues play a role in the East’s xenophobia. New unemployment benefits make it unrewarding for many youngsters to look for work, or even move out of their parents’ homes. Those lucky enough to find work tend to move far away from depressed eastern regions as quickly as possible, particularly if they are young professional women. Strangely enough, the few big corporations with plants in the East do not seem to be affected by the problem. Jens Ullmann, of the Brandenburg Chamber of Commerce, feels that “it is certainly an image problem for Germany, with its past and all, but not necessarily a reason not to invest here. That is much more the case with the riots in France.” Silke Appel of the consultancy IIC, which advises foreign investors in Germany, feels that in the information technology sector, which employs many Asians, racism might be a problem for the individual worker. “If you feel unwelcome, or even threatened, you might just try a job elsewhere,” she said. “We certainly have to do something about this, even though not many of our clients have brought it up.” Under these circumstances, it was somewhat puzzling when Interior Minister Wolfgang Schauble of the Christian Democrats called Islamism the greatest challenge to his administration. While it is certainly true that Islamist organizations like Milli Gorus need to be closely watched, they have not yet committed a single violent crime on German soil. At the same time, much of the support for antixenophobic initiatives granted under former Chancellor Gerhard Schroeder has been withdrawn. In fact, Germany may have to fight both battles with equal dedication. Miriam Lau is chief correspondent of the German newspaper Die Welt. This comment appeared in The Wall St. Journal Europe. TITLE: Some Extreme Legislation AUTHOR: By Masha Gessen TEXT: The Public Chamber wants to save Russian voters from themselves. It wants legislation that would define extremism — a perennially elusive political term — and allow the authorities to weed out extremists so that they cannot register as candidates in any election. The implication is that stupid voters will vote a fascist into office if given the chance. Now, Russian voters don’t exactly have a chance to vote many people into office. In fact, the only person they can actually vote on anymore is the president. Governors are now appointed. Mayors, in all likelihood, will soon be appointed as well: There is much legal rumbling that they shouldn’t be treated differently than governors (note that for the purposes of this discussion the mayor of Moscow, like the mayor of St. Petersburg, is a governor. He heads up an entire federal region and is therefore an appointed official). Members of the upper house of parliament, the Federation Council, are appointed. Members of the lower house, the State Duma, will now be elected by party list, not through direct voting. An extremist, whatever that means, may weasel his way onto a party list and get elected unbeknownst even to the voter — if not for the watchful eye of the anti-extremist authorities. But that seems unlikely: You would think that no party would place on its list someone whose views differed radically from the party line. So it is extremist parties that pose the risk. But a party has to be registered by the Justice Ministry, for which purpose the party has to show not only a prohibitively large number of signatures but also its platform. None of which matters much, because the Justice Ministry will not register any political party that the Kremlin doesn’t want registered, and we can be sure the Kremlin doesn’t want any extremists in office, can’t we? That raises the question of who is and is not an extremist. Laws against extremist speech, hate speech and, as Russian law puts it, the incitement of ethnic enmity, are notoriously ineffective and subject to abuse. Legal scholars point out that the law against any crime contains both objective and subjective elements that define the crime. Take laws against murder. The objective element is the fact of violent death inflicted by the accused. The subjective is motive: Did he cause the death intentionally, while in possession of all his faculties? The problem with laws prohibiting one sort of speech or another is that they are entirely subjective. You think perhaps criteria like enticement to violence and aiming at one particular ethnic, religious or social group are sufficient? Then tell me why then-acting President Vladimir Putin’s famous call for “waste them [Chechen rebels] in the outhouse” was not extremist speech. And if it was, why wasn’t Putin charged with a crime? But let’s look at who has been charged under such laws. There is a student in Kemerovo who got a six-month suspended sentence a couple of months ago for posting an article on his web site. The author of the article was sentenced to six years in a settlement colony. The article — which is still, incidentally, easily found on the Internet, is titled “The Most Constructive of Parties,” and is devoted to the National Bolshevik Party. It contains passages like this one, describing the situation in the author’s hometown of Belovo after the National Bolsheviks come to power: “Illegal migrants are cleaning the latrines and digging ditches. The salespeople at markets are all Belovo natives. Gypsies who are not employed in the theater are exiled to the United States.” That’s offensive. But what’s the difference between that and the sorts of things that Mayor Luzhkov and his administration state regularly? Just that Luzhkov doesn’t just post it on a web site and go to prison for it: He actually makes policy. Masha Gessen is a Moscow journalist. TITLE: Everybody Knows AUTHOR: By Chris Floyd TEXT: The last few weeks have seen disastrous news breaking over President George W. Bush’s administration like another Hurricane Katrina. This time, though, it’s not winds and surging seas but waves of innocent blood overtopping the banks of the Tigris and the Euphrates to turn the White House crimson. Report after report of horrific atrocities — long held back by a levee of lies, fear, obfuscation and the natural confusion of war — has broken through, flooding the imperial capital with the reeking, corpse-filled backwash of the vast criminal folly committed by its grubby little Caesar. So great is the stench of moral corruption that even America’s corporate media, for so long a simpering handmaiden to the ruling thugs, have been forced to take notice, just as they did, all too briefly, during the Bushist abandonment of New Orleans. New sites of shame have entered the American lexicon: Haditha, Ishaqi, Hamandiya, Samarra — places where horrors large and small, confirmed and alleged, comprehensible and unfathomable, have marked this beginning of the fourth year of occupation. Indeed, as the tormented land flails in agony — racked by civil war, unbounded corruption, religious repression, infrastructure collapse, the violent subjugation of women and all the other evils introduced by Bush’s war of aggression — U.S. forces seem to be gripped by an increasing frenzy of their own. As long as the occupation goes on, the discipline of U.S. forces will continue to fray under the literally dehumanizing conditions that Bush’s war has established in Iraq. For example, the Marines in the Haditha massacre, many on their second or third combat tour, had already descended into a “feral state,” the Sunday Herald reports: abandoning regulation billets and living, unwashed and isolated, in “primitive huts bearing skull-and-crossbones signs.” A wife of one of the Haditha soldiers told Newsweek that the degraded unit was rife with “drugs, alcohol, hazing, you name it.” As the BBC reported — back in March, to resounding silence on American shores — Haditha “was not an isolated incident,” according to several U.S. veterans of the war. Specialist Michael Blake said it was common practice to “shoot up the landscape or anything that moved” after an explosion. Sniper Jody Casey said he was told to carry a shovel with him at all times, so he could drop it next to any civilian his unit mowed down and then claim the victim was planting a bomb. “[Bombs] go off and you just zap any farmer that is close to you,” he said. None of this surprising. As we noted last week, polls show that U.S. forces in Iraq have been inculcated with the false and hate-fomenting idea that their real mission is payback for Sept. 11. With revenge as their prism for viewing the Iraqi people and facing an ever-more violent and multi-sided resistance, atrocities — whether deliberate, spontaneous or accidental — are guaranteed. Even in the most justified conflicts, war spawns monstrosities, drawing out the beast that lurks in the muddy sediment of our brains; how much greater, then, is the guilt of those who knowingly instigate unjustified wars? How much greater is the guilt of elitist cowards who send troops — deceived, undersupplied, undertrained, overworked — into the death-dealing chaos of urban warfare, in a land whose people can see they are not being liberated but plundered, murdered, tortured, terrorized and driven back into a primitive, indeed, a feral state of existence? Of course, individual soldiers retain their moral agency and the responsibility for their actions even in wartime. (Although it’s true that refusing immoral orders poses risks; several coalition veterans have already been jailed by the Bush regime and the British government for resisting any further complicity with their leaders’ war crime in Iraq.) The triggermen of atrocity should face justice — and no doubt some of the low-hanging fruit will be plucked for heavily hyped trials to demonstrate American “accountability.” But “everybody knows the dice are loaded,” as Leonard Cohen sings. “Everybody knows that the captain lied.” Everybody knows there will be no accountability for those who authored this desecration: Bush and his dithering outrider, Tony Blair, two murderous mountebanks dripping with self-anointed piety. Bush will retire with his millions to putter about on his fake ranch, while Blair, robed in ermine, will ascend to the House of Lords — and no doubt to a plum post with the Carlyle Group or some other fine purveyor of backroom grease. So it will be with the other perpetrators, like Don Rumsfeld, Dick Cheney, Condoleezza Rice, Paul Wolfowitz: nothing but riches, honors, security and respect, until death drags them howling to the pit where they’ve sent so many countless thousands. So yes, the Bush administration has been swamped with bad news, further exposing the dark heart of its malevolent enterprise. But everybody knows that nothing will change, just as nothing changed after Katrina. The Iraqi dead mean nothing to them. Their own soldiers mean nothing. No outrage, no scandal, no devastation will divert them from their drive for loot and dominion. TITLE: Kazakhstan Turns the Tide in The Aral Sea Eco-Catastrophe AUTHOR: By David Holley PUBLISHER: The Los Angeles Times TEXT: BIRLESTIK, Kazakhstan — In the dried-up harbor of this dusty village, camels roam next to forlorn ships seemingly washed up by tides of sand. Near the rusting hulks, a camel herder dreams of what once was — and what might be. “They say that maybe there will be water here again,” Dosym Kutmambetov, the 27-year-old grandson of a fisherman, said as he paused from rounding up his family’s herd. “We’re dreaming that the water will be here very soon. It makes my heart glad. If the sea is full, more people will come back to the village and life will be richer. If the sea comes back, I’ll catch fish, too.” The hope is not just wishful thinking. Over the last half-century, the Aral Sea shrank to less than half its original size and turned salty as irrigation diversion slowly drained what was once one of the world’s largest lakes. Like a gigantic amoeba, the landlocked sea divided in two in the late 1980s. The shrinkage not only wiped out a large fishing industry but blanketed the region with toxic saline dust blown up from the dry seabed. Now, thanks to a new 8-mile-wide dam and other projects by the Kazakh government and the World Bank, the northern part of the Aral is again filling with fresh water. That in turn is restoring hope and a modest degree of prosperity to a region devastated by the double whammy of a disappearing sea and the Soviet collapse. Righting Eco-Wrongs Fat carp flop wildly as fishermen pull nets tight around them, and salted fish hang to dry in the semi-desert region’s processing plants. “I’m happy. The sea is coming near my village. I had a son born yesterday. And along with the sea, the fish come to the nets,” Zhanarbek Kelmaganbetov, 30, said as he paused from hauling in 0.6-meter carp near the new dam. The southern sea, which lies mostly in Uzbekistan, continues to shrink and is too salty to sustain even ocean fish. Instead of trying to reverse the environmental damage there, the Uzbek government is seeking to find and develop gas and oil deposits in the dry seabed. The dam that is restoring life to the northern sea, which lies entirely within Kazakhstan, has raised the water level there to 41 meters above sea level. That compares with an elevation of 37 meters last summer, before the dam was finished. Residents take great pride in the reversal of what has long been considered one of the world’s greatest man-made environmental disasters. “There are seven wonders of the world, and the eighth is the dam on the Aral Sea,” said Kolbai Danabayev, vice mayor of Aral, a former fishing harbor known in Soviet times by its Russian name, Aralsk, and located about 48 kilometers northeast of the dried-up Birlestik harbor. “No one has done something like this before.” Many fishermen and local officials want to see the dam raised enough to restore the northern Aral to an elevation of 51 meters, the sea’s level before the shrinkage began. Experts say that would be too expensive, but that raising the water to 44 meters would be enough to bring key harbors back to life. The initial push to revive the northern sea came from the local populace and regional government, with special contributions and taxes used to construct temporary experimental dikes out of sand. The first, built in 1992, was washed out the next year, but it proved that a dike could raise the sea level and the water’s quality. A bigger dike was built a decade ago, and it helped launch a modest revival of the fishing industry. But that dike, located where the new dam is today, failed during a 1999 storm. Murat Abenov, 59, who witnessed the decline and fall of the region’s fisheries, today spends his time fishing near the dam, 112 kilometers southwest of Aral. Life for fishermen is already richer now than it was in the Soviet era, he says. “At that time we had a big sea, and we caught fish with big boats,” he said. “But in those days you caught the fish and turned them over to the fish-processing plant. Now you catch fish and sell them yourself as your business. That’s why life is much better now.” Speedy but Sneaky For the fishermen who pulled in 50,000 tons a year half a century ago, the Aral Sea’s death came stealthily. The shrinkage and growing salinity — which killed all native freshwater fish by the late 1970s — was little understood at first. The sea’s tragedy began around 1960, when Soviet planners sharply increased the use of irrigation water from the Aral’s two tributaries, the Syr Darya and Amu Darya, to boost cotton production in Uzbekistan and Kazakhstan. By 1966, the fishermen realized their sea was shrinking. Soon, the fish began to die. Many fishermen thought the sea was shrinking from natural causes, and at first they suspected the fish were dying because of some accident on Vozrozhdeniye Island, used for decades during the Soviet era as a biological weapons testing ground. “Information was very tightly controlled at that time,” Abenov said. “We knew that big boats couldn’t come near this island. People could see from boats in the sea that the fish were dying. Then when it was windy from the far side, fish were thrown up on the shore. We were afraid to eat these fish because we didn’t know what was wrong.” By the late 1970s, Abenov said, the fishermen started to understand that the sea was shrinking and turning salty because too much water was being taken for the cotton fields. Afraid to Speak Up Tolybai Uikasov, 69, the former mayor of the one-time fishing village of Karateren, blamed the death of the Aral on Soviet-era censorship and repression. Over a period of one or two decades, residents gradually linked newspaper reports of irrigation works and increased agricultural production to the shrinkage, but no one dared resist the policy, he said. Today, the village is a dusty, landlocked settlement. “Our government was run by the Communist Party, and we were afraid to ask any questions,” Uikasov said. “Of course we couldn’t say anything openly. At that time there was no possibility to hold rallies, strike or petition the government. Nowadays, Kazakhstan has had independence for 15 years and we’re free to say what we think about what’s going on. We wouldn’t allow something like this to be done. But then, things were controlled very tightly.” The last of the native freshwater fish were dead by 1979, and at that time a national fishery institute in Aral decided to introduce flounder, an ocean fish that could survive in salty water. By the early 1990s, the flounder had multiplied enough for small-scale fishing to start up again. But flounder, a flat bottom-feeder that has both eyes on the same side of its head, did not win immediate acceptance. “The fishermen were frightened,” said Zaulkhan Ermakhanov, of the fishery institute. “They were afraid to touch it. It doesn’t look like an ordinary fish.” Some people thought the flounder were deformed because of pollution, he said. But the fish soon became popular. Because flounder can tolerate low as well as high levels of salinity, they will survive alongside carp and other native species as the northern sea returns to being fresh water, Ermakhanov said. As the situation steadily improves, observers note that such a dramatic ecological success is particularly rare in the former states of the Soviet Union, which have not had the resources to fix mistakes made under communist rule. Nostalgia Becomes Hope Saparbai Zhurimbetov, 40, a fisherman from the city of Aral, was just a child when the harbor dried up at Aral. Now he routinely travels 160 kilometers by mostly unpaved road to fish near the new dam. “My father is always dreaming about old times, when there were a lot of fish and a big sea,” he said. “I’m more concerned about the current situation. I’m very concerned that the dam be raised. We want the sea to come back to Aral harbor. It’s not easy for us to come from Aral city to catch fish here. We want to catch fish near Aral.” The dam was built of sand and earth with a very gradual slope on the water side, designed to imitate a natural beach and thereby lessen erosion from waves. Kazakh government experts are now considering whether to raise the entire northern Aral by enlarging the dam or build a second dam and a canal that would raise the water just in one large bay, in effect creating a two-tier northern sea. Either option would bring water back to the harbors of Aral city and Birlestik. On a recent evening, Tolagai Myrzabayev, 56, sat on a bench overlooking the Aral harbor, keeping an eye on the family goats grazing in the seabed. “The water was right here,” he said, motioning to the slope at his feet. “Starting from 1961, it started to go away. It was a very beautiful place. There was a beer bar. My brothers and uncles would drink beer, and we were fishing here.” Then he pointed into the distance, where the remnants of a few landlocked ships could be seen at the far end of the harbor. “That white thing there is a piece of the ship Kirov,” he said. “In 1979, I was an engine worker on that ship. Then the sea shrank and it was stuck there.” Beksultan Zharilkasimov, 13, who lives near the harbor, said he had never seen the sea, but he knew from his father that it once was just a few hundred yards from his home. “I heard that it might come back,” he said, flashing a huge grin. “That would be great. I’ll go fishing!” TITLE: 5 Dead, Many Hurt, in Israel Train Wreck AUTHOR: By Tova Cohen PUBLISHER: Reuters TEXT: BEIT YEHOSHUA, Israel — An Israeli train carrying 200 passengers hit a stationary truck in its path and derailed on Monday, killing at least five people and injuring dozens, rescue services said. The impact threw the locomotive on top of one carriage. Three others lay on their sides in a mass of twisted metal. Medics carried the injured on stretchers along the tracks at Beit Yehoshua, a farming village in central Israel. Several passengers were trapped for two hours before rescuers stabilized their carriage and pulled them out. Police said the train, traveling from Tel Aviv’s Ben-Gurion airport to the northern port of Haifa, ran into a van that had stopped at a rail crossing but was pushed on to the tracks by another vehicle that hit it from behind. “The truck simply stopped on the track and the driver managed to get out before the train slammed into it,” a witness, who identified herself only as Miri, told Israel Radio. Ambulances and evacuation helicopters rushed to the scene. Rescuers clambered over carriages and dazed passengers walked along the tracks, while others used mobile telephones to call loved ones. Rescue services, updating casualty figures, said at least five people were killed and about 60 injured. Earlier accounts said several people were dead and up to 150 hurt. There was no suggestion from Israeli authorities that the van had been pushed on to the tracks deliberately. Dudi Cohen, the local police chief, described the collision between the two vehicles at the crossing as a traffic accident. Another witness, Avi Adsawi, said the train was not full at the time of the crash, several hours after the morning rush hour. “People on the cars in front were getting off bleeding and crying,” he said. In June 2005, seven people were killed and more than 150 injured when a passenger train hit a truck south of Tel Aviv. TITLE: Saddam’s Defense Complain About Trial AUTHOR: By Sinan Salaheddin PUBLISHER: The Associated Press TEXT: BAGHDAD — An American lawyer on Saddam Hussein’s defense team lashed out at the court Monday, saying it was not giving defenders enough time and was intimidating witnesses. Curtis Doebbler chided the chief judge for not responding to a series of defense motions, including ones challenging the court’s legitimacy and seeking documents. He asked for a break in the proceedings until those issues were resolved. “We are at a serious disadvantage to the prosecution because of the way we have been treated by the court,” Doebbler told chief judge Raouf Abdel-Rahman. “We want to work for justice. But that must start by having a fair trial. “But under the current circumstances, that doesn’t seem possible. We ask that the trial be stopped to allow us adequate time to prepare our defense.” He pointed out that the prosecution took more than five months to present its case, while the court is rushing the defense, which began its arguments in April. Abdel-Rahman has repeatedly demanded the defense present full lists of witnesses. “Our witnesses have been intimidated by the court and have been assaulted,” Doebbler said. “Several lawyers were assaulted as well.” Four defense witnesses were arrested two weeks ago after presenting their testimony, and the defense said some of them were beaten by Iraqi police as U.S. soldiers watched. Abdel-Rahman accused the four of committing perjury. Saddam and seven former members of his regime are on trial for charges of crimes against humanity in a crackdown against Shiites in the town of Dujail after a 1982 assassination attempt on the former leader. They are accused of torturing women and children and wrongfully killing 148 Shiites sentenced to death for the attack. Saddam and his co-defendants could be hanged if convicted on the charges. Doebbler is one of two American lawyers, along with former U.S. Attorney General Ramsey Clark, who have joined the defense team, though they have not attended every session. Doebbler currently is a visiting professor at Najah University in the West Bank town of Nablus. He accused the court of ignoring the defense’s requests. “We have not received one reasoned opinion in response to our enormous written submissions,” he said. The submissions include motions questioning the tribunal’s legitimacy, but others are more substantive, seeking documents the defense says are key. The defense team has asked the court for the entire records of the 1984 trial in Saddam’s Revolutionary Court that sentenced the 148 Shiites to death. That trial is key to the case, since prosecutors have claimed it was a show trial in which the Shiites had no chance to defend themselves. Saddam’s lawyers have contended it was a fair legal proceeding and a justified response to the shooting attack on Saddam. TITLE: Hugo Chavez Promises to Visit Iran, North Korea PUBLISHER: Reuters TEXT: CARACAS, Venezuela — Venezuelan President Hugo Chavez announced on Sunday that he will visit Iran and North Korea, two nations at odds with Washington over nuclear development, at a time when Chavez is seeking to distance Venezuela from the United States. Chavez, who has promised a socialist revolution to end poverty in the world’s fifth-largest oil exporter, has drawn fire from the State Department for building alliances with U.S. foes like Cuba and Iran. “We will soon be in North Korea, we will soon be in Tehran, deepening our ... strategic alliances,” Chavez said during his weekly Sunday broadcast. He said the tour will also include stops in China and Russia, where Venezuela will sign military cooperation agreements with the Russian government, following U.S. moves to block Chavez’s arms purchases from other countries. The State Department last month added Venezuela to a list of nations not cooperating in the fight on terrorism and has repeatedly accused Chavez of supporting leftist guerrillas in neighboring Colombia, though there has been no clear evidence to support this claim. The leftist former paratrooper, who has hurled insults like “donkey” and “assassin” at President Bush, is up for re-election in December. TITLE: Thai King Welcomes Global Royalty For Diamond Jubilee AUTHOR: By Grant Peck PUBLISHER: The Associated Press TEXT: BANGKOK, Thailand — Kneeling maidens in silk gowns scattered flower petals across a red carpet Sunday and Monday to welcome members of the world’s royal families for celebrations honoring 60 years on the throne for Thailand’s king. Attendants in white tunics and traditional dark pantaloons held purple parasols to shield the arriving royals from the bright sun. The day’s first arrival, Prince Henrik of Denmark, the consort of Queen Margrethe II, was welcomed at Bangkok International Airport by a smiling Princess Sirindhorn, King Bhumibol Adulyadej’s daughter. She later greeted Grand Duke Henri, Luxembourg’s head of state. Her brother, Crown Prince Vajiralongkorn — Thailand’s heir apparent — welcomed King Mswati of Swaziland, Cambodia’s King Norodom Sihamoni, Japan’s Emperor Akihito and Empress Michiko, and Brunei’s Sultan Haji Hassanal Bolkiah. The visitors were presented with scented garlands of jasmine flowers and walked from their planes along a formal reception line as their royal hosts led them to limousines which took them into Bangkok on roads closed to normal traffic. Representatives of reigning royals from 22 countries in Africa, Asia, Europe and the Middle East arrived Sunday and Monday. Britain’s Prince Andrew, Bahrain’s Prime Minister Shaikh Khalifa bin Salman al Khalifa and Morocco’s Princess Lalla Salma — the wife of King Mohammed VI — arrived earlier. Although a constitutional monarch with limited powers, Bhumibol has used his prestige during political crises to pressure opposing parties to compromise, allowing his country a degree of stability relative to its more volatile neighbors. He has reigned through dozens of governments, democratic and dictatorial. On Friday, an estimated 700,000 Thais thronged the streets around Bangkok’s Royal Plaza to hear the king deliver a rare public address in which he made a call for national unity. Many Thais are counting on him to pull the country through its current political crisis, which has left it without a working legislature and only a caretaker government after a divisive and inconclusive election. Thai officials have made elaborate preparations to ensure that the royal celebrations proceed smoothly, including plucking unsightly stray dogs from the streets of the capital, and closing off highways and major streets for much of the next few days to facilitate the VIP visitors’ transport. Bangkok residents are expecting major traffic jams. TITLE: Guantanamo Suicides Provoke Closure Calls AUTHOR: By Andrew Roche PUBLISHER: Reuters TEXT: LONDON — Europeans seized on the suicides of Guantanamo prisoners as more proof the U.S. camp should be closed, and a top U.S. official on Monday disowned a colleague’s comment that the deaths were a “good PR move.” Two Saudis and a Yemeni hanged themselves with clothes and bedsheets in their cells on Saturday, the first prisoners to die at Guantanamo since the United States began sending suspected al Qaeda and Taliban captives there in 2002. “Guantanamo should be closed. This is an occasion to reiterate that statement,” EU External Relations Commissioner Benita Ferrero-Waldner told reporters on arrival at a meeting of the bloc’s foreign ministers in Luxembourg. Germany said the U.S. government had promised to provide it with a full explanation of the suicides. Last month, the foreign minister of the EU’s Austrian Presidency, Ursula Plassnik, said Guantanamo was “an anomaly” and should be shut down as quickly as possible. The European Parliament has called for the camp’s closure. Camp commander Rear Admiral Harry Harris described the suicides over the weekend as acts of asymmetrical warfare. Colleen Graffy, U.S. deputy assistant secretary of state for public diplomacy, said the deaths were “a good PR move.” “It does sound that this is part of a strategy in that they don’t value their own life and they certainly don’t value ours and they use suicide bombings as a tactic to further their Jihadi cause,” she said. Graffy coordinates efforts with special envoy Karen Hughes in a campaign to improve the U.S. image abroad, especially in Islamic countries. Her comments quickly appeared to be bad PR moves for the U.S. administration. Deputy Assistant Secretary of Defense for Detainee Affairs Cully Stimson, speaking to BBC radio on Monday, distanced himself from them. “I wouldn’t characterize it as a good PR move. What I would say is that we are always concerned when someone takes his own life. Because as Americans, we value life, even the lives of violent terrorists who are captured waging war against our country,” he said. In an editorial headlined “Bad Language,” London’s right-leaning Times, normally a defender of Britain’s alliance with the United States, said such rhetoric “plays once again into the hands of America’s enemies.” The left-leaning Guardian described Admiral Harris’s remarks as “cold and odious.” “The demented logic of Dr Strangelove hung like a ghost” over the U.S. response to the suicides, it said. Britain has been Washington’s closest ally in Afghanistan and Iraq, and British Prime Minister Tony Blair has been cautious in criticizing Guantanamo, which he describes as an “anomaly.” But other senior British officials have increasingly openly called for the camp to be closed down. “If it is perfectly legal and there is nothing going wrong there, why don’t they have it in America?” Constitutional Affairs Minister Harriet Harman said. Saudi Arabia’s Interior Ministry identified the two Saudis as Manei al-Otaibi and Yasser al-Zahrani but gave no further details. Pentagon documents show Zahrani was 21, meaning he was sent to Guantanamo as a teenager. The U.S. military identified the Yemeni as Ali Abdullah Ahmed and described all three as “dangerous enemy combatants.” TITLE: U.S. Forces Kill 9 in Iraq Raid AUTHOR: By Ryan Lenz PUBLISHER: The Associated Press TEXT: BAGHDAD — U.S.-led forces raided a house near a volatile city northeast of Baghdad on Monday, killing nine people, including two children, the military said. The raid was staged in the area where terror leader Abu Musab al-Zarqawi was killed, and the military said the targeted terrorists had ties to senior Al Qaeda leaders across Iraq and were involved in helping foreign fighters. Local residents accused the Americans of targeting civilians, and a man wearing a white dishdasha held up the charred body of a toddler whose head had been blown in half. The Iraqis screamed “Allahu akbar” or “God is Great” as they loaded two wooden coffins onto pickup trucks. AP Television News footage also showed the burned-out shells of vehicles and a devastated house with a large hole in the roof. The military said coalition forces received enemy machine-gun fire from a rooftop and two people with AK-47s had been seen fleeing the area just prior to the assault. “Coalition aircraft supporting the ground force immediately suppressed the enemy fire, killing seven,” the military said in a statement. “Following the assault, coalition troops discovered two children had been killed. One child was wounded and evacuated for treatment.” It also said three terror suspects were wounded and detained in the raid near Baqouba, 35 miles northeast of Baghdad. Coalition forces seized rocket-propelled grenade launcher, five rockets, nine AK-47 assault rifles and 20 loaded ammunition magazines. The raid came as insurgents stepped up attacks in a bid to show they weren’t defeated after Zarqawi’s death in a U.S. airstrike near Baqouba on Wednesday. U.S. and Iraqi officials have promised a crackdown on violence and sectarian attacks. A suicide car bomber plowed into a gas station in northern Iraq, killing four civilians and wounding more than 40, police Brigadier General Abdul-Hamid Khalaf said. The explosion occurred about 1:15 p.m., local time, in Tal Afar, northwest of Baghdad. A bomb also struck a minivan of workers in southern Baghdad, killing six people and wounding 10, police Captain Jamil Hussein said. Elsewhere, a roadside bomb detonated next to a police patrol east of Kirkuk, but missed and struck a civilian car. One person was killed in the explosion, two more were injured, police said. The deaths come as Iraqi and U.S. officials plan a security crackdown after Al Qaeda vowed in a web message last weekend to carry out “major attacks” to avenge Zarqawi’s death. Officials hope his death will slow sectarian violence. On the political front, radical anti-U.S. cleric Muqtada al-Sadr called for the resignations of three Shiite Cabinet ministers, saying they lacked the necessary qualifications and experience to run their ministries. Al-Sadr also accused at least one of them, the minister of state for provincial affairs Saad Tahir Abid, of having ties to Saddam Hussein’s Baathist regime, officials said. Hassan al-Rubaie, a member of Sadr’s bloc, said that Abid, the minister of state for tourism, Liwa Semeism, and Transport Minister Karim Mahdi already had offered their resignations and Maliki would decide whether to accept them over the next few days. In the United States, President Bush huddled with top advisers at Camp David to discuss a new strategy for Iraq, which would include reconstruction effort and curbing violence. Bush will talk with Maliki on Tuesday. Together they hope to set a solid agenda for addressing security and repairing infrastructure like Iraq’s electricity system that has led to dissatisfaction with U.S. forces. Estimates say Iraqis have between 30 minutes and two hours of electricity a day. Maliki’s new security team also has moved ahead with a plan to restore security in Baghdad, which has suffered most from suicide attackers, roadside bombs and sectarian death squads. The government will announce the plan in days. Iraqi and U.S. officials on Sunday released some 200 detainees from Abu Ghraib. Maliki has promised to release 2,500 prisoners by the end of this month — a total that would be the largest since the U.S. led invasion in March 2003. TITLE: IN BRIEF TEXT: Shiloh Leaves Namibia WINDHOEK, Namibia (AP) — Brad Pitt and Angelina Jolie left Namibia with their newborn daughter Shiloh and their two older children after a two-month stay at a luxury beach resort, an official said Saturday. Samuel Nuuyoma, the governor of the Namibian region of Erongo, confirmed the family’s departure but would not say when they left or where they went. The couple thanked the Namibian government and its people at a news conference Wednesday for the peace they enjoyed in the southwest African country. Ukraine Bird Flu KIEV (Reuters) — Teams of veterinarians have been sent to destroy domestic poultry in northern Ukraine after the first appearance of bird flu in the region, Interfax Ukraine news agency reported on Monday. Avian flu had previously been detected late last year in the Crimea peninsula, a major stopover point on migratory routes jutting into the Black Sea in southern Ukraine. Interfax, quoting Ukraine’s Emergencies Ministry, said 77 specialists had been sent along with police to a village in Sumy region, near the border with Russia, after cases were noted on Sunday. Plans called for 7,200 birds to be destroyed. ‘Uncivil’ Servants LONDON (AFP) — Leaping naked from filing cabinets, taking drugs and having sex in the toilets are just a few of the complaints being investigated against a group of civil servants in northern England. The Rural Payments Agency, which is linked to the Department of Environment, Food and Rural Affairs, said one employee at its office in Newcastle had been sacked and others were facing disciplinary action Monday. The comment came after a whistleblower at the Newcastle office outlined a series of allegations about his workplace to a local newspaper, which included staff leaping naked from filing cabinets, which was caught on closed circuit television; vomiting in cups and leaving them to fester in cupboards; people taking drugs and having sex in the toilets; and other unruly behavior. Hurricane Alberto TAMPA, Florida (AP) — The first named storm of the 2006 Atlantic hurricane season strengthened slightly in the Gulf of Mexico early Monday, prompting tropical storm warnings for the dry Florida coast. Alberto’s core wasn’t expected to reach Florida until Tuesday, but with tropical storm-force wind stretching 230 miles from the center, powerful gusts may be felt long before it makes landfall. The storm’s outer bands brought rain on the state Sunday, and forecasters warned that tornadoes were possible in west-central and northwestern Florida Monday night. Streaker Sells Bikini WELLINGTON (Reuters) — A woman who invaded the field in the final seconds of a rugby match between New Zealand and Ireland in Hamilton on Saturday wearing just a bikini has put the two-piece suit up for sale on an online auction website (www.trademe.co.nz) to help pay for her court costs. TITLE: Kuznetsova Rues Missed Chances PUBLISHER: Reuters TEXT: LONDON — Justine Henin-Hardenne has risen to third in the world rankings after winning the French Open title on Saturday. The Belgian, ranked No. 5 before the Roland Garros tournament, beat Russia’s Svetlana Kuznetsova 6-4 6-4 to win her third title on Paris clay. St. Petersburg star Kuznetsova climbs to No. 6 from 10th. Kuznetsova blamed a hatful of missed chances for her French Open final defeat. The 2004 U.S. Open winner often had the defending champion in trouble during a tight match but she admitted a string of errors on her usually lethal forehand cost her the match. “I was just overdoing it,” said the sturdy 20-year-old. “I just missed my chances. I had so many of them.” Kuznetsova has lost 11 or her 12 matches against Henin-Hardenne and she added: “It was the same picture as usual when I play against Justine, it seemed so similar to other matches. “I didn’t use the chances I had and she hit the lines with her serve at some important moments. If you keep losing, keep missing, you keep letting her back, then it’s not possible to win. That’s the key.” Kuznetsova said she did not regret attacking too hard with her forehand. “The forehand is the best shot I’ve got. It’s also the shot I have to build my game on. I think I kept the right tactics. I just missed too much.” TITLE: Nadal Denies Federer Four Straight Slams PUBLISHER: The Associated Press TEXT: PARIS — Maybe what Roger Federer needs to beat Rafael Nadal is a change of scenery. Bring on the grass. The lawn tennis season begins this week — just the thing to put a little spring back in Federer’s step. He’ll start preparing for Wimbledon by playing in Halle this week after losing to Nadal in the French Open final Sunday. It was a wrenching loss for the top-ranked Federer, who was bidding for his fourth consecutive Grand Slam championship. Instead, Nadal won his second successive French Open title by beating Federer for the fifth time in a row, 1-6 6-1 6-4 7-6. Nadal extended his record clay-court winning streak to 60 matches. “He’s tough to beat, but he’s not impossible to beat,” Federer said. “That’s a big difference. Otherwise, we wouldn’t have to play. He can just lift the trophy on the first day.” The Spaniard is most vulnerable on grass, the surface he has played the least. Last year, after winning his first Grand Slam title at Roland Garros, he lost in the second round at Wimbledon. “Sure, I want to play well on grass,” Nadal said. “But I need to improve a little bit to enjoy it more.” When Wimbledon starts June 26, Federer will be a heavy favorite to win the title for the fourth year in a row. Whether he can solve Nadal on clay is more problematic. Federer is 0-4 this year against Nadal, with three of those matches on clay and one on hard court, and 44-0 against everyone else. The French Open remains the lone major event Federer has yet to win, and he has lost to Nadal at Roland Garros the past two years. “It didn’t happen, so I’ve got to create this opportunity once again,” Federer said. By winning Sunday, he would have joined Don Budge and Rod Laver as the only men to hold all four major titles at once, strengthening the argument that he’ll be remembered as the greatest player ever. “I was ready to put him at the top if he were to win this,” seven-time Grand Slam winner John McEnroe said during the NBC telecast. “But he’s got some work to do.” Instead, Federer remains lumped with another group that includes McEnroe, Jimmy Connors, Boris Becker, Stefan Edberg and 14-time Grand Slam winner Pete Sampras. None won Roland Garros. An ominous bit of history for Federer: Sampras’ best showing at Roland Garros came in 1996, when he reached the semifinals at age 24. He never advanced beyond the third round again. Federer is 24. He drew consolation from making the final for the first time. “It’s obviously my goal to win this event,” Federer said. “I got a step closer once again from last year around. I think every year that goes by gives me again more maturity on this surface.”