SOURCE: The St. Petersburg Times
DATE: Issue #1187 (53), Tuesday, July 18, 2006
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TITLE: G8 Pushes Global Trade Resolution
AUTHOR: By Caren Bohan and David Clarke
PUBLISHER: Reuters
TEXT: Group of Eight leaders on Monday inched toward a breakthrough over global trade on Monday, Britain said, at the end of a big-power summit strained by divisions over the Middle East crisis.
After G8 leaders met key developing countries at the summit, British Prime Minister Tony Blair said there were signs of willingness to make the compromises needed to rescue a troubled world trade pact.
“Before we had our lunch discussion I was somewhat pessimistic,” said Blair. “I am less pessimistic now.” 
The leaders of the United States, Germany, Brazil, India and the European Commission “spoke very strongly about the necessary flexibility being given to our negotiators” to rescue the Doha round, whose goal is to lift millions from poverty.
All sides involved will have to abandon entrenched positions on farm subsidies, agricultural tariffs and market access for goods and services and the basis for Blair’s optimism was not immediately clear.
On Sunday, G8 leaders set a one-month deadline to map out a framework to close the five-year-old Doha trade round.
The key developing world countries, Brazil, India and China, were representing the interests of the world’s poorest countries, who are supposed to be the principal beneficiaries of the Doha round. Talks hit an impasse last month.
If true, progress on global trade would be one of the few clearcut achievements from the St. Petersburg summit, which was overshadowed by violence in the Middle East.
Key sticking points are U.S. farm subsidies and the extent to which the European Union cuts tariffs on farm goods and developing countries open their markets to industrial goods and services.
The United States said it was sending its trade negotiator straight to Geneva, home of the WTO, to get talks moving fast. The six key trade ministers would meet later in the day.
President Bush and Brazilian President Luiz Inacio Lula da Silva urged a redoubling of efforts.
“I am convinced that now is the time for us to make a political decision,” the Brazilian leader said, adding that negotiators “don’t have any hidden cards in their pockets” so it was critical for leaders to get involved. 
Assistance to Africa, put at the top of last year’s summit by Britain’s Blair but initially ignored by Russia for this year’s meeting, was also on the agenda for the session to be attended by UN Secretary General Kofi Annan and the African Union. Annan said there had been progress since the 2005 G8 summit, “but there is much more to be done.”
Summit host Vladimir Putin, under fire for his record on democracy, pledged to his partners that he would not change the constitution to give himself a third term beyond 2008.
Putin himself brought up the issue of democracy over dinner on Sunday, initiating “a frank but friendly discussion”, a G8 diplomat said.

TITLE: Mid East Crisis Overshadows G8 Summit
PUBLISHER: The Associated Press
TEXT: World leaders sought to halt escalating violence in the Middle East, considering the possibility of sending international peacekeepers to stop Hezbollah from bombing Israel. Israel quickly rejected the idea. 
The Middle East situation overshadowed the G8 summit of world leaders where U.S. President George W. Bush, unaware his remarks were being picked up by microphone, bluntly expressed his frustration with Hezbollah, a militant Islamic group believed to be backed by Iran and Syria.
“See the irony is that what they need to do is get Syria to get Hezbollah to stop doing this shit and it’s over,” Bush told British Prime Minister Tony Blair on Monday as they chatted before the Group of Eight leaders began their final lunch.
Bush also suggested that UN Secretary General Kofi Annan call Syrian President Bashar Assad to “make something happen.”
In Damacus, Iran’s foreign minister said a cease-fire and an exchange of hostages would be an acceptable and fair deal in resolving the conflict. “In fact, there can be a cease-fire followed by a prisoner swap,” said Foreign Minister Manouchehr Mottaki, who spoke after talks with Syria’s vice president.
Israeli Prime Minister Ehud Olmert opposes sending international forces to Lebanon to help end bloodshed, Israeli senior officials said. Olmert instead wants Lebanese forces to take control of the border area with Israel and wants the Hezbollah militia disarmed.
The warfare between Hezbollah and Israel generated reaction around the globe, and several nations made plans to evacuate their citizens.
President Vladimir Putin, who had hoped to use the first G8 summit on Russian soil to burnish his country’s standing on the global stage, saw his summit priorities overshadowed by the Mideast crisis.
But he put the best face on the three days of discussions, telling a closing news conference that “all the aims which we had set ourselves have been achieved.”
Putin said his nation would consider contributing troops to a UN peacekeeping force. The European Union said it also was considering deploying peacekeepers in Lebanon.
The United Nations already has a 2,000-man force in the region monitoring the line separating Israel and Lebanon. The proposed peacekeeping mission under consideration would presumably have a far broader mandate than the current force.
France said it is sending Prime Minister Dominique de Villepin to Beirut to express support for Lebanon’s government. And French President Jacques Chirac, who attended the summit, said he believed “some means of coercion” may be needed to enforce a UN resolution that calls for the disarmament of Hezbollah and other militias in Lebanon.
After his talks with Annan on the sidelines of the G8 summit, Blair said, “The blunt reality is that this violence is not going to stop unless we create the conditions for the cessation of violence.” He said the only way to do that is by sending an international force into the area that can “stop the bombardment over into Israel and therefore gives Israel a reason to stop its attacks on Hezbollah.”
Asked about the comments on an international force, White House national security spokesman Frederick Jones said, “We’re open to the possibility of that force being necessary.”
The White House said it had nothing to announce about a trip to the Middle East by Secretary of State Condoleezza Rice, even though Bush was overheard telling Blair, “She’s going. I think Condi’s going to go pretty soon.”
Annan, in a joint press appearance with Blair, appealed to Israel to abide by international law and spare civilian lives and infrastructure. “We should not inflict any more suffering on them,” Annan said. “Both parties should bear that in mind and respect international humanitarian law.”
At his closing G-8 news conference, Blair said assembling an international peacekeeping force could take time. He said Britain would work with other countries. He described British forces, which are part of the U.S.-led effort in Iraq, as “somewhat stretched.”
The comments by Blair and Annan came a day after world leaders forged a unified response at their G8 summit to the crisis in the Middle East, blaming Hezbollah and Hamas for the escalating violence and recognizing Israel’s right to defend itself — although they called on the Jewish state to show restraint. 
“I am most pleased that the leaders came together to say, look, we condemn violence. We honor innocent life,” Bush said before heading into a meeting with Indian Prime Minister Manmohan Singh. “For the first time, we’ve really begun to address with clarity the root causes of the conflict ... and that is terrorist activity — namely Hezbollah, that’s housed and encouraged by Syria.” 
Bush also asserted that the militant Islamic group is financed by Iran. However, the G8 statement does not mention Syria or Iran. Putin told reporters that Russia blocked the effort to name Syria. 
“If we don’t have enough grounds to blame somebody, we cannot ... put them in documents on such a serious state level just based on assertions,” Putin said. 
Bush’s overheard remarks were picked up by the summit’s closed-circuit television, which filmed the leaders as they dined. Normally, the images are transmitted with sound that does not allow reporters to pick out individual comments. But in this case, a microphone picked up Bush’s comments to Blair. 
On their final day of meetings, the leaders — the United States, Russia, Japan, Germany, Britain, France, Italy and Canada — focused on more traditional summit fare, such as restarting stalled global trade talks and implementing a major debt relief program for the world’s poorest nations that was announced at last year’s summit. 
But the Middle East, North Korea and Iran claimed more of the spotlight. 
The leaders called on North Korea to put a stop to its missile tests and to abandon its nuclear weapons program. 
On Iran’s nuclear ambitions, the leaders sought to keep up pressure for a UN resolution seeking sanctions. 
The G8 leaders also met on Monday with seven leaders of the developing world, including a trio of emerging economic powerhouses — China, India and Brazil.

TITLE: Social Activists Disperse in Frustration
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: As heads-of-government from the Group of Eight nations and those from invited countries India, China, South Africa, Brazil, Mexico and Kazakhstan continued summit talks in St. Petersburg on Monday, the soccer stadium where a counter-summit had been planned was empty. 
The Second Russian Social Forum, a protest event organized by antiglobalists jointly with political opposition forces to coincide with the G8 summit, wound up Sunday with many of its aims left frustrated by an intense security clampdown in the city and across Russia.
Hundreds of activists detained by police, illegal arrests and persecution of participants on political grounds were just some of the accusations made by the event’s participants against the Russian authorities, activists said.
About 350 activists had gathered Friday at the Kirov Stadium for what they called a counter-summit. 
This was about three times less than the organizers had expected, and a far cry from the grand scale of antiglobalist campaigns in the previous years, when thousands of activists took to the streets to raise their voices against the perceived purposes of the G8’s agenda.
“Huddling together in small groups at the giant, nearly empty Kirov Stadium, the activists presented a view reminiscent of a miniature version of civil society in Russia: scarce, desperate, lacking coordination and power, surrounded by a fence and besieged by the police,” one of the activists said.
Lev Ponomaryov, the leader of the Movement For Human Rights and head of human rights section at the Second Russian Social Forum, expressed frustration about the low attendance of the gathering. The activist accused the police of orchestrating a campaign against the protesters on nationwide level.
“Russia has already become a police state,” he said. “What is happening here cannot be described as an attack on human rights anymore. It is actually much worse. Authoritarian rule has been firmly set in Russia.”
Yevgeny Kozlov, one of the leaders of the Committee for the Protection of People’s Social and Labor Rights and one of the forum’s organizers, said antiglobalists were being detained and arrested  across the country on various grounds, from the trivial (“urinating in a public place” and “swearing at the police”) to the serious (“illegal possession of explosives.”)
“The police in St. Petersburg have tried to give a group of human rights activists ten days in custody for allegedly crossing a street in the wrong place,” he said. “But they were lucky enough to have been able to call a good lawyer and escape. They weren’t crossing any street, for that matter.”
Ilya Ponomaryov, the leader of the Left Front non-governmental organization said only four delegates out of 60 members of a delegation from Tatarstan were able to make it to St. Petersburg. 
“The police stopped them and they are now facing charges of illegal possession of drugs,” he said. “In Chita and Krasnoyarsk our people are accused of having carried explosives on them. Horror stories are coming from all directions.”
Vladimir Kozhin, deputy head of the G8’s organizing committee, said the complaints of alleged police violence and a coordinated plot against the protesters will be thoroughly investigated.
City Hall had refused to give permission to a march from the Kirov Stadium to a meeting outside the Avrora cruiser as well as a Communist march along Nevsky Prospekt on Saturday.

TITLE: Sychyov Case In Trouble
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — Prosecutors in the Andrei Sychyov case ran into trouble Friday when one key witness recanted earlier testimony and a second skipped town despite having received a summons to appear in court.
Sychyov, a first-year conscript serving at the Chelyabinsk Armor Academy, was the victim of a brutal hazing incident in January that left him with gangrene in his feet and legs. Sychyov’s legs and genitals were subsequently amputated. 
A second-year soldier at the academy, Alexander Sivyakov, has been accused of carrying out the attack. Sivyakov is charged with “exceeding his authority with grave consequences.”
Andrei Shevchenko, a witness to the hazing, told the Chelyabinsk military court Friday that investigators had forced him to sign a prepared statement, Interfax reported. Shevchenko said that investigators had beaten him and threatened him with jail time. He could not, however, recall the names of the investigators.
Shevchenko was the fifth witness in the Sychyov case to withdraw his previous testimony.
The star witness for the prosecution, Artyom Nikitin, left Chelyabinsk on Friday and returned home to the Moscow region, although he had been summoned to appear in court that day. Nikitin sent a telegram to the court explaining that he had made the trip for family reasons. 
According to court filings, Nikitin was on duty as an orderly on New Year’s Eve and witnessed the hazing incident first hand. Nikitin had earlier recanted his previous testimony, which he claimed was given under duress.
The prosecution’s case was bolstered Thursday by the testimony of Renat Talipov, an emergency care physician at a Chelyabinsk hospital who examined Sychyov after the hazing incident. Talipov said that he had discovered anal fissures and tears measuring from three to four millimeters in length, Kommersant reported. Talipov declined to speculate on the cause of the tears, a possible indication of rape, but noted that they had gone unnoticed by physicians at the military hospital.

TITLE: Veshnyakov, Sensing Irrelevancy, Speaks Up For Himself
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: MOSCOW — Central Elections Commission chief Alexander Veshnyakov made headlines last week when he openly criticized a number of Kremlin-sponsored changes in the country’s election laws. But Veshnyakov, generally regarded as a Kremlin loyalist, was primarily motivated by a desire to hold on to his job, a commission source said Friday.
“Veshnyakov understands that the powers that be have no need of him anymore,” the source said on condition of anonymity.
Veshnyakov has turned the elections commission into a finely tuned mechanism, but the commission’s influence over the electoral process has drastically declined of late, the source said.
“United Russia has installed its members in all of the key government posts, and the Kremlin controls the governors and the airwaves. They simply don’t need Veshnyakov any longer,” the source said. “He knows that he won’t be the one in charge of the upcoming parliamentary and presidential elections, so he is doing his best to hold on to his job.” 
In interviews with Ekho Moskvy radio and other media outlets, Veshnyakov criticized the State Duma for giving preliminary approval to a bill that would bar parties and candidates from contesting elections if mistakes were discovered in the documents they had submitted to election authorities.
Veshnyakov remarked that mistakes could always be found. “Election commissions can apply extremely subjective methods,” Veshnyakov said. “Undesirable candidates could always be removed from the ballot using this law, and the courts are not likely to be of much help,” he told Ekho Moskvy.
The elections chief was also unsparing in his criticism of a bill on extremists, which the Duma passed in a third and final reading on July 8. The Kremlin maintains that the bill will prevent ultranationalists from coming to power, but Veshnyakov said the bill, which contains no definition of extremism, could be used to prevent almost any candidate from contesting an election.
“We have the right to speak out if we see that certain amendments debase democracy in our country,” Veshnyakov said. “I will not surrender. I will stand up for my position.”

TITLE: Charities Slam G8 On Summit Results
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: International charities expressed disappointment at the outcome of the G8 summit on Monday, accusing the prestigious club of failing to maintain a coherent policy and respect its own past commitments regarding humanitarian issues, including poverty and infections diseases.
At the summit, Russia pledged $270 million to the Global Fund To Fight AIDS, Tuberculosis and Malaria but not all countries in the club have been equally generous. Last year, support for the fund, launched at the G8 summit in Genova in 2001, dropped in Germany and France by 8 and 2 percent respectively.
“The St. Petersburg summit ended with little progress in the fight against poverty,” reads official statement of the Global Call to Action Against Poverty issued on Monday. The organization urged the leaders to keep their promises to the world’s poor.
According to polls, citizens in the G8 member countries were waiting for different news. One year ago, the G8 summit in Gleneagles, Scotland, was focused on ending poverty and this year G8 leaders faced high expectations from the citizens of their countries.
Before the summit, U.S.-based agency Global Market Insight and St. Petersburg’s Agency for Social Information conducted joint research among 8001 people in G8 member states and asked the respondents which issues they would include in the agenda for G8 summit if they were asked for advice. 
Global poverty ranked first in France and the United Kingdom. Most Italians and Germans mentioned violation of human rights, and citizens of Canada and the U.S. selected the spread of dangerous infectious diseases as the most pressing issue. Russians picked terrorism as the greatest global threat. Energy and oil were not featured prominently in respondents’ answers.
Peoples’ expectations clashed with the forum’s results. At the final news conference on Monday president Vladimir Putin called the summit successful, naming the development of a united approach to the energy security issue as its main achievement. 
Nikolai Petrov, a senior political analyst with the Carnegie Endowment for International Peace, said this gap is a direct illustration of a major crisis of international organizations that were specifically set up to deal with the social and humanitarian issues. 
“First of all, there is little faith left in the United Nations and its related organizations that have not been able to produce a coherent and efficient response to the challenges the world is facing,” he said. “In the absence of a reliable international organization that could solve humanitarian issues, many people turned their heads towards the G8.”
Poverty and AIDS are pressing issues but the organization was formed with a different purpose and goals, Petrov said. 
“The club was established to develop united strategies and approaches to political and financial issues, and from this perspective the organization has been able to live up to the expectations. People can just as well expect any particular G8 leader to be personally responsible and lay the blame on them — it won’t change anything.”
With the G8 leaders discussing energy and security, activists from the international aid organization Oxfam took revenge by compiling a dinner menu for the negotiators. 
The huge menu complete with bold caricatures of the politicians demonstrated little diversity, offering oil for starter, main course and dessert.
“They put aside poverty, the most ailing issue on the planet, and focused almost exclusively on the oil,” an activist said. “They seem to never get enough of oil talks, so this is the menu they deserve.”
Max Lawson, Oxfam’s spokesperson, said that by downplaying the fight against poverty, the G8 “ignored the world’s most critical crisis, one that will kill 11 million children by the time they next meet.”
His words were echoed by Moussa Faye, director of ActionAid Senegal. 
“The G8 can take a year off but poverty doesn’t,” Faye said on Monday. “Every three seconds, a child dies in Africa from a preventable illness.”
During the hour that the politicians spent on Sunday discussing the poverty, 2000 died of starvation, said Oxfam’s Irungu Houghton.
Petrov said the G8 nations are likely to find the summit’s outcome frustrating.
The credit of trust cannot last forever, and Petrov suggests that “vague speeches and general declarations” of this year’s event will be sure to give the people a hint that their hopes are fruitless. 
“Efficiency is the best measure,” he said. “And if the organization doesn’t make a difference, then people will have to eventually start looking elsewhere and pin their hopes to another international body.”

TITLE: Schisms Emerge at Petersburg Summit
AUTHOR: By Stephen Boykewich and Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: Statements signed Sunday by Group of Eight leaders broke with decades of tradition by acknowledging deep-rooted divisions — over President Vladimir Putin’s key issue of energy security, among others — in the consensus-driven group.
The statements, written by the G8 sherpas throughout 2006, followed a day of contentious bilateral talks between Putin and U.S. President George W. Bush. The talks failed to resolve U.S. questions about Russia’s bid to join the World Trade Organization.
In a statement on global trade, there was a veiled swipe at the United States for holding up Russia’s WTO candidacy, with the communique suggesting the United States had made it harder for Russia to gain accession than other countries.
And on infectious diseases, the G8 leaders issued a statement outlining different agendas for different countries. 
But it was on energy security that the leaders seemed to be farthest apart.
One major point of contention in the area of energy security has been Russia’s refusal to ratify the Energy Charter Treaty, which governs energy investment and transit issues in Europe, Russia and other countries. 
Europeans have pressed hard at previous G8 meetings this year for Russia to ratify the treaty, but the energy security statement Sunday was limited to a vague affirmation of the document’s free-market principles.
“Clear, stable and predictable national regulatory frameworks significantly contribute to global energy security, and multilateral arrangements can further enhance these frameworks,” the statement said. 
“We support the principles of the Energy Charter and the efforts of participating countries to improve international energy cooperation,” the statement said.
Speaking at a news conference Sunday after the statement was released, Industry and Energy Minister Viktor Khristenko reiterated Russia’s position that the Energy Charter could only be ratified after another protocol on energy transit.
The minister’s remarks notwithstanding, Russia sent a strong anti-charter signal this month, when the State Duma approved a law — aimed at protecting Russia from the Energy Charter — that makes state monopoly Gazprom the sole legal exporter of Russian natural gas.
The new law has raised concerns among European officials, Khristenko conceded. But he portrayed the measure as simply formalizing the status quo. “I don’t think there’s any departure from market principles” in the law, he said.
Divisions over the use of nuclear energy, an increasingly important issue as the West seeks alternatives to oil and gas, and the Kyoto Protocol, which the United States has refused to sign, were also clearly reflected in the G8 energy security statement Sunday.
“We recognize that G8 members pursue different ways to achieve energy security and the goals of climate protection,” the statement’s section on nuclear power begins. 
Lower down, the statement adds: “Those of us who have or are considering plans relating to the use and/or development of safe and secure nuclear energy believe that its development will contribute to global energy security, while simultaneously reducing harmful air pollution and addressing the climate change challenge.”
Turning to climate change, the statement read: “Those of us who have ratified the Kyoto Protocol recognize the role of its flexibility mechanisms in promoting energy efficiency.” 
Last year’s G8 statement on climate change also identified differences related to Kyoto, but that was overshadowed by the United States’ willingness to acknowledge that human activity was fueling global warming. 
Greenpeace issued a statement rebuking the G8 for failing to develop an energy security strategy. “The best thing about the St. Petersburg summit is that it is over,” the statement read.
But bilateral meetings continued among the eight world leaders — though an informal tea planned for Sunday evening fell prey to bad weather. 
The different positions reflected in the G8 statements were a reminder of the contentious relationship between Europe and Russia when it comes to energy and the United States and Russia on a slew of topics.
“It is highly unusual, because the G8 by nature is consensus-driven,” said Elena Kokotsis, director of analytical studies for the G8 Research Group, which analyzes the language of G8 communiques.

TITLE: New EU President Promotes Russian Links
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: Russia has an opportunity to significantly boost its relations with Europe after Finland assumed the six-months EU presidency July 1, according to the Finnish prime minister Matti Vanhanen, who was speaking at a press briefing in St. Petersburg last week.
One of the strategic goals for Finland during its EU presidency is to bring the EU and Russia to a more productive interaction.
 “Russia is our most important neighboring country. Russian economy needs European Union’s markets and our investors need the Russian market. We could get the best results by cooperating,” Vanhanen said. 
Establishing Free trade between Russia and EU is essential if Russia is to successfully compete in the international arena, Vanhanen said.
“Finland does not have its own energy sources – only bioenergy. Even so, we have managed quite well in world competition because we have concentrated on technology and some other important areas and because we have opened our markets. It is maybe the main issue,” Vanhanen added.
“Our own markets are too small…But even if you have a large population you could achieve much more by opening markets,” Vanhanen added.
Finland’s position on Russia has already started to attract interest from the EU members, foreign experts say. 
“There are already signs that relations with Russia are a key topic under the Finnish EU-presidency. Many countries, as well as members of the European Parliament, have already asked if Finland could be more active with Russia,” Antti Kokkonen, political editor for the biggest Finnish daily Helsingin Sanomat, said in an email statement on Friday.
Despite some opinions within Russia that the EU will now try and use the Russia’s neighbor for settling hostile to Russia deals, foreign community believes this fear is unfounded.
“I consider Russians fears how EU will rob Russian energy resources are exaggerated. Europe needs energy and Russia has it. Arab countries and Norway became rich selling oil, Russia can become rich selling gas,” Kokkonen of Helsingin Sanomat said.
“To promote both parties’ interests, deeper co-operation is needed,” Kokkonen added.
Rose Gottemoeller, director of the Moscow-based political think-tank Carnegie Endowment for International Peace said Monday that she wouldn’t expect Finland to favor the other EU countries over Russia, promoting the EU countries’ agenda to Russia’s detriment.  
“The EU President, no matter what country is serving in that role, has to act as a something of an honest broker in dealing with all the countries involved,” she said. 
She also added that  “any multilateral activity is an exercise in lobbying one’s own interests; it’s up to the other countries to defend their own.”

TITLE: Impromptu Protests Break Out in Petersburg
AUTHOR: By Anastasiya Lebedev
PUBLISHER: Staff Writer
TEXT: Communists, nationalists, anarchists, AIDS activists and anti-globalists held marches, rallies and a rock concert over the weekend in a motley mesh of angry, sometimes violent protests as G8 leaders convened in a nearby palace.
Estimates of the number of protesters detained Sunday ranged from the mid-30s to high-40s. 
Some protesters were held for blocking a road. Others were detained after taking part in impromptu, unsanctioned protests that attracted no more than 50 demonstrators in their 20s and 30s. 
People who appeared to be police informers filtered through crowds of young demonstrators asking seemingly innocuous questions about protest times and locations and then relaying that information to the police. There was widespread speculation among protesters that their mobile phones had been tapped. Several protests were preempted by the police.
On Saturday, one- to two-dozen protesters were beaten and arrested by police. Others were briefly detained.
Demonstrators came from Moscow, St. Petersburg, Kiev, Minsk, Omsk, Perm, Krasnodar and elsewhere in the former Soviet Union and from Western Europe.
Their targets encompassed nearly everyone and everything: capitalists, fascists, President Vladimir Putin, Belarussian President Alexander Lukashenko, the politics of global energy markets and the Group of Eight, which Russia presides over this year, to name a few. 
The Communists’ sanctioned protest appeared to draw the most pyrotechnics. After meeting in front of the Oktyabrsky concert hall Saturday, left-wing radicals and pensioners set out on a 20-minute walk to the site of a planned rally. They were joined by members of the Red Youth Avant-Garde, the Communist Youth Union, the National Bolshevik Party, the Rodina party’s Left Front, the United Civil Front and Oborona, a youth movement inspired by revolutionary groups in Ukraine and Belarus. Student activists from former Prime Minister Mikhail Kasyanov’s People’s Democratic Union also took part.
“We’re not happy that the seven richest countries rule the fate of billions of other people in the world, and that they rule in their own favor,” Communist organizer Vladimir Fyodorov said.
Sounding two-parts Marxist and one-part nationalist, Sergei Stroyev, a middle-aged Communist Party member, added: “Capital presides over national sovereignty. Financial structures are attempting to establish control over our natural resources. Right now, roles are being assigned to players in the global market, and Russia is being given a purely raw-exports role. We oppose that.” 
Other demonstrators, sounding a refrain that has resonated with millions of Russians since the 1991 Soviet collapse, took issue with the tiny pensions the elderly must live on, rising housing costs and the injustice of a government, they say, that has forgotten the country’s most helpless. 
“It’s hard living on your pension,” said Alexander Vinogradov, 58, of the Russian Communist Workers Party. “Most pensioners keep working after they retire. At 7 a.m. in the metro, most people going to work are middle-aged and elderly, but in the evenings, the cafes and restaurants are chock-full of young people.”
Yury Glushakov from Belarus said his protest group, Razom, had come to protest Russia’s support for Lukashenko. He added that he took part in protests against Lukashenko in central Minsk after Belarus’ parliamentary elections in March, which Western governments said had been rigged.
Others voiced support for Lukashenko. One woman, Valentina Syskina, 60, said she respected the Belarussian leader. Oddly, she also wailed against the hypocrisy, as she saw it, of Russia belonging to the G8. “I don’t know who’s lying to whom,” Syskina said. “Doesn’t Europe know what the situation is like in Russia?”
Communist organizers had warned marchers to stay on the sidewalks and not to fly their flags. But the crowd of 300 to 400 marchers paid no heed to the admonitions, spilling onto Ligovsky Prospekt and waving dozens of mostly red flags. Their march was repeatedly interrupted by OMON riot police.
At least eight police buses were brought in to escort the march down the street. Each time police stopped the crowd, protesters chanted “Revolution!” “Freedom!” “Russia without Putin!” or “Away with the fascists!” At one block, protesters tried to break through a police chain, sparking a brief skirmish. 
At the intersection with Nevsky Prospekt, the city’s main artery, a larger scuffle broke out. Several women let out shrieks as the riot police descended on the crowd, several Red Youth Avant-Garde and National Bolshevik Party flags were toppled and several marchers were hauled off to the police buses.
Anastasia Udaltsova, wife of Red Youth Avant-Garde leader Sergei Udaltsov, recalled that 10 members of the left-wing group were detained. As her husband was crossing Nevsky Prospekt, she said, a man ran up and began choking him, prompting other Red Youth members to help Udaltsov. A fight broke out, and the protesters were taken away by police. 
Udaltsova said she believed the scuffle involving her husband had been provoked by an undercover police officer. She added that she had seen police officers circulating pictures of her husband with instructions to detain him.
When the marchers finally reached their rally at a park, they were met by State Duma Deputies Oleg Smolin and Viktor Tyulkin. Soviet war songs blared through loudspeakers. Later, a few rock bands performed.
Activists from Left Front and Oborona were detained as they exited the rally. Witnesses said they were attacked by men in civilian dress who beat them and then drove them away in cars with official police license plates.
Police spokesman Pavel Klimovsky said Sunday that 29 people had been held at the march and charged with obstructing traffic and resisting police. Klimovsky said five had been released and five had been officially arrested. The others’ fate, he said, had yet to be decided in court.
A sanctioned protest organized by the Russian Social Forum, an anti-globalization group, was relatively calm. The protest took place in a stadium far from the city center — and inside a large cage, where authorities could presumably keep a close eye on the situation.
Organizer Corinne Clement, the director of the Moscow-based Institute for Collective Action, said there had been fears of violence breaking out between protesters and police but that such problems had been avoided.
Vladimir Soloveichik, another organizer, suggested the United States should put more pressure on Russia, The Associated Press reported. 
“I don’t want to give advice to the American government, but in my view people can’t be free if they support a dictatorial regime in another county,” he said.
Families and young people nearby seemed oblivious to the stadium demonstration as they strolled along boulevards, rollerbladed and listened to a brass band playing “La Cucaracha.”
Clement said that despite being forced to meet outside the center, organizers still managed to garner some press attention. “We can still show that we’re trapped, that Russia is a prison,” Clement said, referring to the metal pen demonstrators had been squeezed into. “And we can demand the release of the prisoners.”

TITLE: Civil Society Groups Say Bush Was Listening
PUBLISHER: Combined Reports
TEXT: U.S. President George W. Bush met with some of President Vladimir Putin’s most persistent critics Friday, in a signal of concern to his uneasy ally about the tenuous state of Russian democracy.
The pro-democracy and civil society advocates at the Friday meeting, held at the U.S. Consul General’s landmark 19th-century residence, said Bush told them he had serious questions about a rollback in Russia’s democracy as Putin centralized presidential control, and that he would discuss his concerns with Putin in private but would not lecture him publicly.
Yet the meeting served as something of its own public rebuke, with international news coverage of vocal Putin critics sharing their worries about his authoritarian turn and drawing attention to civilian deaths in Chechnya.
Tanya Lokshina, a rights worker active there, said she handed Bush a picture of five Chechen children who were killed by a federal bomb.
“He promised he would share whatever problems were brought to his attention, and that he would discuss them with Putin,” said Lokshina, chairwoman of Center Demos.
The presence of another attendee, Irina Yasina, was a statement in itself. She is the project director of the Open Russia Foundation, a private nonprofit organization founded by jailed Yukos founder Mikhail Khodorkovsky. Its bank accounts have been frozen by the government, and it is in danger of being closed in what Yasina has called retaliation for Khodorkovsky’s political activities.
Yasina said she had expected a protocol event but was “absolutely amazed that it was a heart-to-heart conversation... While sitting next to [Bush], I got a feeling that this meeting did matter for him.” The meeting ran about 30 minutes longer than the scheduled hour.
“All the participants talked about their activities,” she said. “Some talked about invalids, some spoke on ecological issues. Together with my friends and colleagues we spoke about problems in developing Russian democracy, problems of civil society and problems with the young generation’s mentality, which is being infected with the virus of nationalism.”
(NYT, LAT)

TITLE: Cars, Boats and Vodka
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: President Vladimir Putin, who likes to show off his vintage cars when President George W. Bush visits, clearly liked the golf carts that Bush rolled out for the G8 leaders to drive at the 2004 summit on Sea Island, Georgia, for the white electric carts have made a repeat appearance here on the Gulf of Finland.
Unlike some of the other G8 leaders, Bush and Putin preferred to take the wheel themselves when traveling around the grounds of the Konstantinovsky Palace. 
But for the trip on Saturday to the briefing tent for their joint news conference, Bush rode with Putin, gripping the roof as the cart wheeled around a corner. Sitting unceremoniously in the back seat was U.S. Secretary of State Condoleezza Rice.
The day before, Putin showed Bush his first car, a Zaporozhets made in the 1970s. 
n 
Having accredited about 4,000 journalists from around the globe, the organizers addressed security concerns by offering them just one way of getting to the summit site, which was across the Gulf of Finland from St. Petersburg.
They rented from the city the entire fleet of hydrofoils that usually ferry tourists up and down the Neva and used them to ferry journalists across the gulf. Most of the time it is a pleasant trip on the water before and after a long working day, at least to those not susceptible to seasickness.
But Saturday morning, one hydrofoil with a G8 logo painted on its side and carrying almost 120 journalists, including television crews with their heavy equipment, suddenly coughed and stopped in the middle of the gulf. The journalists waited for 30 minutes while mechanics tried to fix the engine, but in the end another hydrofoil had to come to pick them up. At least two other hydrofoils suffered some minor technical glitches.
But any stress encountered on the way to the press center could be relieved upon arrival with the help of beer, wine or vodka, which were plentiful in the cafeteria starting in the early morning. 
Some not very busy members of Russian television crews were heard loudly asking uniformed waitresses for bottle openers as early as 10 a.m.
n 
No expense was spared in providing for the journalists, who were set up in a huge air-conditioned tent with hundreds of computer terminals and free long-distance telephone lines. The food and drink were all free.
On Saturday night, the organizers threw a party for the journalists, with barbecues, musical entertainment and more free booze. 
The timing turned out to be odd when Putin scheduled a news conference for later that night. 
As a result, during the presser, which started at midnight, Putin had to struggle to understand some of the questions, including one from a tipsy journalist who called him “future president.”

n 
After being greeted by the Putins at the dinner Saturday night, French President Jacques Chirac — operating under the chivalrous rule of “ladies first” — tried to guide Lyudmila Putina into the palace before him, The Associated Press reported.
After several attempts, the Putins finally told him: “No, we have to stay here to greet more guests.”
German Chancellor Angela Merkel, following behind Finnish President Tarja Halonen and her husband, strode up the walk so quickly that she arrived during the Chiracs’ photo shoot with the Putins and had to back out of the frame.
n 
Bush found the perfect icebreaker for his meeting with Italian Prime Minister Romano Prodi on the sidelines of the summit: Congratulating him for Italy’s win in the World Cup, the AP reported.
“Congratulazioni, Romano,” is how the Italians described Bush’s opening remarks to the Italian leader. “Grazie, George,” Prodi smiled back. 
Italy received another homage from the summit organizers: At the offices of the Italian delegation at the media center in St. Petersburg, the sign reads: “Italy. Champions’ office.”

TITLE: G8 Leaders Meet ‘J8’ Delegates
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: A meeting of the representatives of the Junior 8 youth forum and the G8 leaders took place Sunday at the Konstantinovsky Palace, with delegates presenting the J8’s “Address to the Leaders.” 
The document was the result of a week-long conference of young representatives of G8 nations
Russian delegate Tatiana Ushakova, a 17-year old student from Yekaterinburg, and seven of her peers from the other G8 countries, Kristina Abretti (Canada), Xavier Attwell (France), Sophie Harrison (U.K.), Janusch Krasberg (Germany), Diana Marie Perez (U.S.), Muneo Saito (Japan) and Ellena Delle Site (Italy) took seats at a round table with President Vladimir Putin, President Bush and other G8 heads of government.
“It is the first time in the 30 years of the top level meeting that children were formally on the agenda. It is a very important achievement and a historic moment, a real milestone,” said Carel de Rooy, the UNICEF representative to the Russian Federation and Belarus. “The meeting took place very close to the anniversary of UNICEF, founded in December 1946. It took us 60 years to make children’s voices heard.”
During the 40-minute closed-door meeting each delegate presented a document worked out with 56 other members of their national delegation. 
Besides French delegate Attwell who made his presentation in English, all the other delegates expressed their views in their native languages with the help of translators. 
“We discussed it with [French] President Jaques Chirac beforehand and decided that I should make a presentation in English, the official language of the address,” Attwell, who along with his native French speaks English fluently, said at a press conference after the meeting.
The J8 conference began July 8 when an initial 64 conference attendees, aged between 13-17, arrived in the town of Pushkin near St. Petersburg to discuss the major global issues of the G8 agenda such as infectious diseases, energy security, extremism and education in order to present recommendations in a united voice to the G8 leaders.
In the final address to the leaders the young delegates stressed that although their ages prevent them from voting, this does not mean that they are not interested in the critical issues in their countries and the world. 
“Our goal is to express the ideas of the younger generation and to try to solve some of the world’s problems,” the document said. 
In order to provide all the children in the world with high quality and well-rounded education, the delegates suggested implementing a “Learning without Borders” program in which children will learn about ethics, peace and life-skills along with a “Teaching Teachers” project for educators from the developed countries to improve their teaching skills. 
The availability of free food, medical vouchers, immunizations and water wells near schools were named among the incentives that can help to facilitate the access to education.
A suggested solution to the problem of infectious diseases was “education, prevention, treatment and respect.” 
The address recommends the use of HIV prevention programs at schools, establishing well-developed links between hospitals and schools and solving problems of stigmatization through educational information about infectious diseases and with role models who are living with HIV. 
Besides AIDS, the young delegates proposed that the leaders implement a series of measures in the fight against malaria and tuberculosis. 
As for energy, the J8 participants want “energy to be accessible, reliable, safe and clean,” the Kyoto protocol to be expanded and updated, and a change of focus to the diversification of energy supplies and development of energy partnerships. They appeal to all G8 countries to support the new protocol. 
The use of alternative energy resources such as wind power, solar power, nuclear energy, hydroelectric power and biomass fuels was also supported by the J8.
In regard to the issues of violence and tolerance, the J8 suggested G8 countries sign the Convention on the Rights of the Child (CRC) and encourage other countries to sign it. At the same time, they ask G8 governments to organize schools for parents in order to develop children’s interest towards other groups and encourage the mass media to speak against violence and for tolerance.
The J8 ended Monday.

TITLE: Ho, Ho, Ho at Putin’s Feel-Good Summit
AUTHOR: By Maria Danilova
PUBLISHER: The Associated Press
TEXT: Faced with growing criticism of its secretive and authoritarian ways, the Kremlin presented itself as an open and friendly summit host.
Elusive government ministers suddenly became available to speak and an affable President Vladimir Putin held late-night briefings.
“It is natural that in the course of our chairmanship, we started making additional efforts. We are becoming more open,” Dmitry Peskov, a senior Kremlin spokesman, said.
With a U.S.-based public relations firm helping get its message across to Western media, the Kremlin has fed journalists a steady diet of its top officials in the run-up to the three-day event, including some of the most elusive ones, such as Vladislav Surkov, the Kremlin’s deputy chief of staff.
Putin himself gave a record number of media interviews, including a two-hour internet news conference. 
At the summit, which ended Monday, Russian ministers and other sought-after personalities held back-to-back briefings that left journalists with little time to make it from one site to the other in time.
Peskov denied the effort at openness was in response to increasingly vocal criticism from the West of Russia’s democratic backpedalling and the stifling of speech freedoms.
He acknowledged that Russia, like other countries, has its share of problems. But “for the most part that criticism is subjective and is rather based on a prejudiced approach and a past inertia, I would say,” Peskov said.
Putin appeared at ease in the role of host, greeting guests warmly and casually, and addressing some counterparts, including German Chancellor Angela Merkel and U.S. President Bush, with the Russian informal “ty,” or “you.”
He also displayed his frankness  when he joked at a news conference with Bush that Russia wouldn’t like to have the kind of violence-plagued democracy the United States has fostered in Iraq. Bush’s face turned red.
Putin, when asked at another news conference about criticism of the Kremlin, hinted that some leaders should look in the mirror before they cast stones.
He signaled to a British journalist that he was well aware of the investigation into allegations that Prime Minister Tony Blair sold seats in the House of Lords in exchange for secret loans to his governing Labour Party.
A Blair spokesman laughed off the comment.
“I think actually if you look through what President Putin says ... he has a little joke for each and every leader, and we haven’t lost our sense of humor.”

TITLE: Officials Sum Up Spending On G8
PUBLISHER: The St. Petersburg Times
TEXT: Running the G8 summit cost Russia 10.7 billion rubles ($397 million), according to official data, Interfax reported. The federal government spent 3.2 billion rubles ($119 million) directly on preparing and running the event in St. Petersburg.
Apart from preparing the Konstantinovsky Palace and hosting foreign delegations, considerable funds were spent on various sites constructed in St. Petersburg, said the manager of the presidential administration, Vladimir Kozhin.
Preparing for the summit, Pulkovo airport completed a new landing strip. 
Some funds were spent on road construction and road intersections in the city and in areas of the Kiyevskoye, Volkhonskoye and Tallinskoye highways and on construction of the ring-road.
“Over ninety percent of the funds were provided by the federal budget,” Interfax cited Kozhin as saying Friday.
“A number of companies, naturally, provided financial support to the organizational committee. No state company participated in G8 financing,” he added.
The head of the summit secretariat Sergei Vyazalov has promised to publish a detailed report on costs on the official G8 web site by December of this year.
“We faced the task of preparing the city infrastructure for the summit, first of all — the airport for guests’ arrival,” Interfax quoted Vyazalov as saying Thursday. 
“On our recommendation, the transport ministry conducted reconstruction of a landing strip, replaced meteorological stations, navigation and signaling equipment,” Vyazalov added.
He estimated that the approximate spending on these works totaled 3.7 billion rubles ($137.4 million).
The organizational committee bought 60 electric buggies for guests’ transportation. A total of 600 cars were used during the event and 60 million rubles ($2.2 million) was spent on buying new helicopters.
According to Vyazalov, 160 million rubles ($5.9 million) came from private companies.
“Through a special fund, sponsors’ money was spent on transportation, NGO events and infrastructure solutions, like decreasing the level of the water around the Konstantinovsky Palace. Some money was spent on scientific research,” Vyazalov said.
Apart from the $10 million press center complex in Strelna suburb, no building was purpose-built for the summit.

TITLE: Half of Rosneft IPO Goes to Four Buyers
AUTHOR: By Catherine Belton
PUBLISHER: Staff Writer
TEXT: Three foreign oil companies and a mystery buyer snapped up 49 percent of Rosneft’s $10.4 billion initial public offering Friday, giving the state oil firm an implied value of nearly $80 billion.
Rosneft president Sergei Bogdanchikov on Sunday hailed the IPO as the biggest-ever by an energy major, and insisted the price reflected the company’s real market value.
He confirmed that BP, Malaysia’s Petronas and China’s CNPC had bought $2.6 billion in shares, but refused to be drawn on the identity of the fourth big buyer. 
Speaking on the sidelines of the Group of Eight summit in St. Petersburg, Bogdanchikov told a packed news conference that Rosneft would be run in the interests of all shareholders and not just the state’s, now that it had sold about 13 percent of its shares in London and Moscow.
Rosneft “is a state company to some extent, but it is also a public company,” Bogdanchikov said. “We have to maximize profit to pay dividends ... and maximize the capitalization of our company. This is in the interest of all shareholders and not just the state’s.”
It seemed like a fitting occasion to celebrate Rosneft’s remarkable transformation into a public company with an implied market capitalization of nearly $80 billion, the biggest in Russia after Gazprom. 
Until it took over Yukos’ main production unit, Yuganskneftegaz, for a knockdown price of $9.4 billion less than 18 months ago, Rosneft was a mid-ranking oil firm cobbled together out of leftover state oil assets worth — according to many valuations — just $6 billion. Since that purchase, the Kremlin has thrown its weight behind Rosneft as the country’s oil champion.
But as Bogdanchikov touted his success, the elements appeared to conspire against him as torrential rain hammered the press tent and reporters strained to hear his words above thunder and lightning and the flapping canvas. 
Rosneft still faces an 11th-hour legal challenge from Yukos that could derail the company’s plans for a market debut on the London Stock Exchange on Wednesday.
London’s High Court is due to decide Monday whether to hear Yukos’ claim for a temporary injunction against the LSE listing on the grounds that it would facilitate the sale of stolen property. When a judge said during preliminary hearings Friday that he wanted time to consider what he called “important issues,” Rosneft’s lawyer claimed a delay would be “devastating” for Rosneft. 
Rosneft has planned a lavish party at the LSE for Wednesday.
Yukos claims Rosneft’s takeover of Yugansk was expropriation. It has filed a slew of lawsuits around the world.
Several fund managers and investors have accused Rosneft of coercing investors into buying shares at an inflated price during the IPO as a way to curry favor with the Kremlin and gain access to future investment projects.
With the stock priced at $7.55 per share, near the $7.85 top price Rosneft had asked for, at least three of the biggest foreign portfolio investors in Russia spurned the sale because they saw it as overpriced and too risky legally.
Rosneft said Friday that just four investors had bought 49 percent of the entire offering. On Sunday, Bogdanchikov revealed that BP had paid $1 billion, Malaysia’s Petronas $1.1 billion and China’s CNPC $500 million. He said he could not name the fourth buyer, but said state-owned Gazprombank and others had made substantial bids.
One fund manager, speaking on condition of anonymity, said the sale of half the offering to four investors was a sign that the Kremlin had enlisted them due to a lack of investor demand.
“This was a major extortion exercise,” the fund manager said. “They leant on investors in true KGB fashion ... to make sure the offering was successful. You have to be a real idiot to buy something trading on a premium to LUKoil on a price-per-earnings basis when you don’t even know if it will start trading on Wednesday,” he added, referring to the possibility of a court injunction in London.
“This has been sold to people who’ve been made an offer they can’t refuse,” agreed Ian Hague, co-manager at New York-based Firebird Capital Management, which has $2.1 billion in Russian stocks under management. “They are trying to create the impression by using captive demand that this is a very highly valued set of assets.
“This is not a real price because it hasn’t been set by the market.”
Foreign institutional investors bought only 36 percent of the offering, while Russian investors bought 39 percent, Rosneft said Friday. Russian retail investors bought 4 percent of the shares. 
“The demand is significantly less than it would have been had Yugansk not been acquired the way it had,” Hague said. The number of foreign institutional investors is “very low for a public offering,” he said. “Clearly, this is more of a private placement.”
Bogdanchikov rejected those claims Sunday. He said foreign portfolio investors had placed bids for more than $6 billion of shares — far more than they had eventually been granted because the issue was oversubscribed. 
Even without the strategic investors “we would still have collected enough money,” Bogdanchikov said. He also rejected suggestions that Rosneft was now overvalued, at more than LUKoil. 
“We have very good results,” Bogdanchikov said. “What the market valued us at is how much we’re worth.”
Some investors said foreign oil majors like BP were unlikely to see upside on the price of their shares because they were so highly priced from the get-go.
“BP would not have done this if there wasn’t some upside associated with it,” Hague said. “But this upside is probably not going to be in the share price.”
BP spokesman Robert Wine confirmed that the British oil major saw its participation in the offering as an exercise in “relationship building” with the Russian authorities as well as a commercial investment. “We think it’s a good strategic investment for our position in Russia and our relationship with the Russian oil industry and with the Russian authorities,” he said.
BP’s Russian venture, TNK-BP, has been under fire. Its faces a back tax bill of $2 billion and its flagship venture, the Kovykta gas field, has been stalled for years due to opposition from Gazprom.
CNPC, meanwhile, is believed to be eager to win greater access to Russian oil fields, but ended up with just half of BP’s allocation. 
The Financial Times on Saturday cited a person close to the deal as saying CNPC had offered up to $3 billion in the Rosneft offering, but had angered the Kremlin by asking for too much in return. Malaysia’s Petronas was allocated $1.1 billion worth of shares.
James Fenkner, managing director of Red Star Asset Management, said portfolio investors buying the stock were essentially betting on the Kremlin’s continuing dominance of the oil sector — and its ability to chew up more.
“This is an option on asset redistribution in its crudest form,” Fenkner said. “The assets will be redistributed by the state, and the state is Rosneft. It is a bit expensive versus traditional valuation matrices. The lesson of the last few years is: Don’t bet against the Kremlin.” 
Bogdanchikov said Sunday his company could swallow more of Yukos’ assets. Rosneft could buy Yukos’ refining assets should they be put up for sale, he said. Rosneft instigated bankruptcy proceedings against the stricken oil major earlier this year.
He gave short shrift to Yukos’ filing to thwart Rosneft’s listing on the LSE. “We have owned Yuganskneftegaz for 1 1/2 years. During that time, the former owners ... have filed lawsuits against us in the U.S., Britain ... and the Netherlands, and every time they have lost the lawsuit,” he said. 
Yukos shareholders’ suit against Rosneft in the United States has yet to be heard. Rosneft lost its suit against Yukos in the Netherlands.
A senior Rosneft ally predicted Yukos had little chance of winning in London. “All this maneuvering merely brings a smile to your face,” said Hans JÚrg Rudloff, chairman of Barclays Capital, an independent director on Rosneft’s board and a long-time ally of Bogdanchikov.

TITLE: Evraz Pays $680M For S.A. Miner
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — Evraz, the country’s top steelmaker, clinched a deal to buy 79 percent of a South Africa-based vanadium producer, the world’s largest maker of the metal, the company said Friday.
Evraz, partly owned by billionaire Roman Abramovich, will pay $678 million to acquire Highveld Steel & Vanadium from Anglo American, bringing its global share of vanadium production to about 30 percent. 
The deal comes three months after Evraz snapped up the second-largest producer of the element, U.S.-based Strategic Minerals Corporation, for $110 million, seeking to reduce reliance on suppliers. Vanadium is used to strengthen steel and titanium and is a key ingredient in certain petrochemical products. 
“We have high expectations of Highveld’s internal growth plans for both its vanadium and steel businesses, including the expansion plan in excess of 1 billion rand [$13.8 million], which will increase [Highveld’s] steel output by more than 20 percent,” Evraz chairman Alexander Frolov said in a statement.
Evraz will complete the purchase of Highveld in several steps. Initially, the steelmaker and its long-term financial advisor Credit Suisse Group will each acquire 24.9 percent stakes in Highveld.
Once the deal has clearance from the South African and European antitrust authorities — Highveld owns an Austrian reprocessing plant — Evraz will be able to exercise its option to buy Anglo American’s remaining 29.2 percent in Highveld plus Credit Suisse’s stake.
Once Evraz has more than 33 percent in Highveld it will also have to make an obligatory buyout offer to all shareholders.
Abramovich and his partners own 41.3 percent in Evraz, while another 41.3 percent is mostly held by Evraz chairman Frolov and company founder Alexander Abramov.
Chukotka governor and Chelsea Football Club owner Abramovich bought his stake in Evraz for an estimated $3.1 billion in June, a move analysts said could lead to consolidation of the domestic steel industry, following Evraz’s lead.

TITLE: IPO Listing Puts a Premium on Rosneft
AUTHOR: By William Mauldin
PUBLISHER: Staff Writer
TEXT: Rosneft’s IPO exceeded expectations when the state oil firm announced a share price of $7.55, giving the entire company a sky-high sticker price of nearly $80 billion. But some investors think the company could be worth even more because of the possibility it will rapidly expand its oil production and gain control of additional Yukos assets at discount prices.
Current measures of Rosneft’s earnings and production levels would give the oil company a value less than that of LUKoil, the country’s top oil producer, which the market currently values at $70.9 billion. Rosneft shares are changing hands at a pricey 17 times the company’s estimated 2006 earnings, versus seven times 2006 earnings for ConocoPhillips and eight times earnings for Chevron.
“Rosneft has got by far the highest multiples in the oil world,” said Agne Zitkute, a fund manager at Pictet Asset Management, Reuters reported. Credit rating agencies have also flagged Rosneft’s $12 billion in debt and its concentration of reserves in Russia, a risk not shared by its more diversified global peers.
But an internal report at Credit Suisse values Rosneft as high as $83.4 billion to $91.4 billion based on discounted cash flow analysis, which takes into account cash the company is expected to generate down the road, with an allowance made for the risk that those cash flows won’t materialize. The Credit Suisse analysts also deem LUKoil to be significantly undervalued. Their valuations assume Brent oil prices of $53 per barrel for the next few years.
Other experts have cooked up similarly high valuations for Rosneft based on the 18.9 billion barrels of proven reserves the company has in the ground. Those estimates assume Rosneft will be able to extract the oil cheaply and sell it at relatively high prices.
Rosneft became the country’s No. 2 oil producer after it took over Yuganskneftegaz, the main production unit of Yukos, for a bargain price. Yukos shareholders are suing to block trade in Rosneft this week, arguing that the IPO represents the sale of stolen property. But, in an ironic twist, some experts say Rosneft will derive even more benefit from Yukos during the stricken oil major’s upcoming bankruptcy proceedings.
“You can hypothetically imagine a situation when the Yukos bankruptcy manager in the future would proceed with asset sales in order to cover Yukos liabilities,” said an analyst who requested anonymity. Those assets would presumably be sold at a deep discount in the next 12 months.
“The government probably wouldn’t bless the deal and decide to price it at a premium to LUKoil unless they were confident that something would happen after the IPO that would limit the downside.”
Many investors view Rosneft’s ties to the government as a perk, since the company could get preferential treatment in the development of new offshore oil fields. But some investors worry about the inefficiency that often accompanies government control, not to mention the political risks.
During preliminary trading Friday in London, Rosneft’s share price rose sharply to $7.95, then settled down to close at $7.60, a gain of 0.7 percent.

TITLE: Russia, Kazakhstan Cut Deal
PUBLISHER: The Associated Press
TEXT: The presidents of Russia and Kazakhstan agreed Monday at the Group of Eight summit to create a joint venture to process natural gas from Kazakhstan’s Karachaganak gas field. 
Under the terms of the deal, both countries would have an equal share in the venture, which will expand the capacity of the Soviet-built Orenburg refinery.
Russian President Vladimir Putin called the project — which envisages an annual output of at least 15 billion cubic meters — a “humble but important” contribution to energy security, the central theme of Russia’s G-8 presidency.
“We are entering a very important alliance,” Kazakh President Nursultan Nazarbayev said. “It is a major step forward.”
The deal comes as competition for Kazakhstan’s energy resources intensifies. Vice President Dick Cheney paid a high-profile visit to the country in May to lobby for American energy interests. 
The Karachaganak field is one of the crown jewels of Kazakhstan’s hydrocarbon riches.

TITLE: Matsushita to Produce in Russia
PUBLISHER: Agence France Presse
TEXT: TOKYO — Japanese electronics giant Matsushita will produce flat-panel TV sets in Russia and Brazil this year to meet growing demand there, a report said. 
The major business daily Nihon Keizai Shimbun also said that Matsushita Electric Industrial Co., famous for its Panasonic brand, will substantially strengthen its sales network for such TVs in India.
In September Matsushita will start producing liquid crystal display TVs in Russia, making it the first Japanese firm to make flat-panel TVs there, the daily said.
The production will be entrusted to an electrical equipment maker in the city of Kaliningrad, to which Matsushita will supply key components from Japan for local assembly, the report said.
It added that output was targeted at 50,000 LCD TVs with sales estimated at 120,000 units in Russia for the year to March 2007, including imports from Japan.
The target for the following year will be raised to 250,000 units to secure a local market share of 10 percent.

TITLE: U.S. Meat Exports Create Roadblock in WTO Talks
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: Russia and the United States failed to reach agreement on Russia’s accession to the World Trade Organization over the weekend, despite a major push by both sides to get an accord signed in time for the G8 summit.
The failure of the talks, which floundered on the seemingly minor issue of meat imports into Russia, strengthened the appearance of a growing rift between the United States and Russia as the two country’s leaders struggled to find common ground following bilateral talks Saturday.
At a joint news conference in St. Petersburg with President Vladimir Putin, U.S. President George W. Bush bluntly said no deal had been reached, and indicated more Russian concessions would be required to get the U.S. Congress to back the deal.
“We are tough negotiators and the reason why is because we want the agreement that we reach to be accepted by our United States Congress,” Bush said.
Putin said Russia would continue to pursue its national interests in forging the deal. “I can’t say the difficulties [in WTO talks] are unexpected,” Putin said. 
“We will continue to talk, insisting on our national interests and the interests of our developing economy.”
Talks on a deal broke up early Saturday after nearly three days of around-the-clock meetings, U.S. officials said. 
Susan Schwab, Washington’s chief negotiator in the talks, said the talks had gotten stuck on the issue of access for U.S. meat producers to the Russian market, an issue that has vexed the powerful agricultural lobby in Congress.
Officials on both sides said the deal — which many predicted could have been signed over the weekend at the Group of Eight summit — could still be reached by the end of October.
The failure to strike a deal in St. Petersburg could mean that Russia’s WTO bid will be held up for several months, and could conceivably delay other big-money U.S.-Russian deals, such as U.S. firms’ participation in Gazprom’s Shtokman field and Boeing’s bid to sell its planes to Aeroflot.
“These are tough negotiations, as they are when you’ve gotten through the first 90 percent of the deal and you’ve got the last 10 percent or so to address,” Schwab said at briefing Saturday.
Schwab said significant progress had been made on industrial tariffs, financial and other services and intellectual property rights, issues that have long blocked an agreement from being reached.
U.S. and Russian officials have denied any link between the WTO talks and other bilateral deals, but a further delay by Gazprom in announcing its foreign partners for Shtokman came straight after the breakdown of talks Saturday. 
Industry and Energy Minister Viktor Khristenko told reporters in St. Petersburg after the Bush-Putin news conference that the Shtokman partners could be announced in October — incidentally the new deadline set by U.S. and Russian officials for signing the WTO deal.
Two U.S. companies, Chevron and ConocoPhillips, are on the shortlist to become Gazprom’s partners in the Barents Sea gas project.
Last month, Russian officials said the Shtokman announcement would be made by the end of the summer. Gazprom first said it would choose its partners on the project by the end of 2005 but has repeatedly pushed back the deadline since then.
Khristenko denied the delay had anything to do with WTO negotiations. “If it were true that [Shtokman] negotiations were connected to the WTO and the WTO were connected to the summit, the world would stop,” Khristenko said. 
Schwab also dismissed any link. “There has been no tie between the negotiation of the WTO accession agreement and any other issue,” Schwab said.
She said both sides came close to solving agricultural issues, “with the exception of some agricultural market-access issues, including what is known as sanitary and phyto-sanitary issues, just having to do with regulatory processes.”
Andrew Somers, president of the American Chamber of Commerce in Russia, who has long lobbied for Russian WTO accession, said Bush had faced a major lobby in Congress arguing for the rights of U.S. meat producers. “I always thought this might be the sticking point,” he said.
At the last minute during the talks, he said, Russia, which currently imposes strict quotas on imports of U.S. chicken while little U.S. beef or pork is imported, forwarded new demands to conduct inspections on U.S. farms.
Schwab’s counterpart in the talks, Economic Development and Trade Minister German Gref, confirmed that U.S. meat imports were the sticking point.
Gref said U.S. officials offered to sign the deal if Russia granted sanitary certificates to American pork and beef producers. Gref said, however, that certificates would only be granted after Russia completed an audit of U.S. sanitary control facilities.
Russian officials wanted the deal signed first, Gref said. “But they gave us a strict condition: first the permit to ship meat and then the bilateral agreement.”
Gref said he was acting to protect Russian consumers from hazards such as mad cow disease. The United States has recorded two cases of the illness among cows, while Russia has recorded none. Gref said he was disappointed that the deal was not signed during the summit, and said it could delay cooperation in more important areas.
“This issue is worth tens of millions of dollars, but the agreements in all areas can bring billions of rubles and dollars for both sides,” Gref said.
U.S. approval is the last major roadblock before Russia can begin the formal process of joining the WTO.

TITLE: Experts: Local Labor Market Faces Crisis
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Local businesspeople eager to sort out good personnel from the bad proposed regular state certification of specialists, while the authorities suggested increasing the number of committees as a remedy for the current crisis in the labor market.
Last week, the Rosbalt press center held a round table on labor deficit. According to official statistics, at the moment only 18,500 city residents are registered as unemployed, while the employment service offers about 62,000 vacancies.
Pavel Pankratov, head of the St. Petersburg department of the Federal Service for Employment, indicated that 70 percent of vacancies advertised are for manual laborers, although women account for 70 percent of the unemployed.
“We see a discrepancy between demand for labor and available labor. Solving this problem with the resources that we have is obviously impossible. We are already reaching the point at which a collapse could begin. Machines don’t work by themselves,” Pankratov said.
“The Russian population decreases by 0.5 percent every year. We are at the threshold of a demographic slow down caused by World War II. In the coming 10 to 15 years, problems with employment are set to double,” said Alexei Churkin, chairman of the Northwest branch of the Recruiting Consultants Association.
He proposed promoting St. Petersburg as an employment center in other regions and organizing exhibitions of job opportunities offered by the largest companies in the city.
However, work migration in Russia is hampered by a number of obstacles. Work migrants suffer from social insecurity because they cannot afford to buy apartments in the city. Getting access to state medical treatment, nursery schools and other social services is also difficult for them, Churkin said.
“No salary could compensate for the real estate prices in this country. In the United States, the most expensive apartments are in Silicon Valley, but people come there and earn such huge amounts of money that they can afford to buy this expensive property,” said Nikolai Zakharov, head of the personnel management department at Herzen University.
Pankratov noted that qualified migrants should be retained in the city by housing subsidies and other means, while unqualified personnel should return to their native regions after their short-term labor contracts expire.
Industrial production, the food industry, FMCG, construction, retail and high-tech face the biggest deficit in specialists, said Maria Margulis, director of ANCOR Petersburg leasing company.
“It is surprising for me, but many people simply do not want to work,” she said, suggesting that promotional and motivational programs be used to improve the situation.
Yaroslav Meshavkin, general director of the Northwest Union of Employers, Industrialists and Entrepreneurs, highlighted several employment problems which were identified by businesspeople in a series of round tables held in the regions.
“Employers could not assess the qualification of a specialist simply by his diploma. Cooperation with universities solves this problem in a way, but the best graduates that are chosen by the companies could reject a job offer,” Meshavkin said.
While employers want to get experienced workers, the same employers refuse to take students for work experience, fearing that expensive equipment would be damaged. In addition, they do not want to take responsibility for the students’ lives and health, he said.
“All employers identify the low level of skills and extremely overestimated expectations for salaries shown by graduates,” Meshavkin said.
He suggested creating a national agency for professional qualifications to develop professional standards and carry on regular labor market monitoring, while special certification agencies should assess employees’ qualifications every five years.
Yevgeny Maslevsky, director of the Petrovsky trading lyceum of St. Petersburg, called for improving the image of working professions, changes in educational programs and modernization of equipment used in education.
“Today we need a worker with synthetic knowledge covering several areas, however the state educational standard does not reflect it,” he said.
Alexei Tyurin, HR director at Nevsky plant, suggested private companies solve the problem themselves by creating educational centers.
“To prepare the needed specialists in the state system is impossible because of quick changes in technology and demands for labor,” he said. 
“We employ students of higher courses and ask them to coordinate the topics of their studies and research with us. During the practical work we see the real output provided by each person,” Tyurin said.
To regulate the labor market, Churkin proposed creating supervising counsels to monitor changes in demand for labor and make forecasts and recommendations.
Pankratov said a database of vacancies should be created. As positive changes, he indicated that the economy committee in the St. Petersburg government is preparing a program for labor market development. From Jan 1, 2007, labor market regulation will be handed over from the federal government to the regions.
Natalia Yevdokimova, chairwoman of the committee for social issues at the St. Petersburg legislative assembly, saw the solution in creating a special committee, which will deal with all problems related to labor, employment and migration policy.
At the moment, those responsibilities are spread between several committees of the local government.
“Transfer of those functions to the regions creates a unique opportunity to establish a single coordination center. It will enforce responsibility and allow for a unified strategy,” Pankratov added.

TITLE: Banks Surf Net in Search of New Clients
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: In their search for new clients, local banks are expanding the promotion of their financial services on the web. Last week, FinNews.ru introduced a new service offering online applications for mortgage loans. The first bank to cooperate with the web portal on the project was City Mortgage Bank.
The service is available in St. Petersburg and Moscow. Besides online applications, FinNews.ru provides detailed information on procedures for getting a loan, lists of required documents and examples of agreements and application forms.
“From this moment, FinNews.ru provides users with the whole range of services – from searches for appropriate credit programs to filing applications for loans at the bank that’s eventually selected,” said Vladimir Shevchenko, FinNews.ru manager.
FinNews.ru has been operating since 2002, providing information about banks and rates for financial services, as well as news and analytical reviews of the banking industry.
The site attendance at the moment is 1,200 visitors a day. According to the Rambler rating, FinNews.ru holds the 47th place among the top-100 most popular bank web sites in Russia.
Previously, visitors to FinNews.ru could find out where their nearest ATM is located or find out about the terms offered by various banks. All the options and tools on the site are provided free of charge. The main advantage of the service is that information on numerous banks is collected together so that the terms and rates can be compared.
“The new service significantly simplifies the procedure for getting a loan, getting rid of the need to make prior visits to the bank,” Shevchenko said.
In the near future FinNews.ru will introduce online applications for car loans and consumer loans. Shevchenko said he has successfully completed negotiations with Absolut Bank, and the service could be coming online this week. Negotiations with another bank are about to be completed.
“I’m aiming to attract another ten banks by the end of the year. I have already met with retail department managers in a number of city based banks and branches and seen an interest from the banks in expanding promotion channels for their credit services,” Shevchenko said.
The ultimate goal is to make FinNews.ru “a multi-brand store of bank services,” he said, adding that he started from loans only because “here it was easier to find a solution beneficial to everybody.”
Bank specialists confirmed the importance of the internet in promoting bank services.
“Cooperation with FinNews.ru is interesting for us and seems rather advantageous. It’s not only a new opportunity to attract borrowers, but also a very convenient way for clients to get information about the lending terms at City Mortgage Bank and filing application,” said Igor Zhigunov, member of the board at City Mortgage Bank.
Konstantin Dyatlov, marketing department specialist at DeltaCredit bank, confirmed that clients actively use online resources to search for information about bank services.
“At the moment, the Internet is the most relevant and precise source of information on bank services. Our experience shows that one out of three clients uses the internet to compare the credit terms at various banks,” he said.
“On our web site, visitors can get complete information about bank services, aproximate costs, key steps for getting a mortgage loan and estimating the loan size, ” Dyatlov said.
The DeltaCredit site also provides a number of documents including blank applications for a mortgage loan that can be filled in and sent to the bank for processing. Besides online resources, banks use other methods to save borrowers’ time, Dyatlov noted.
“Since it is impossible to progress without providing a set of documents to the bank, in addition to Internet resources, you need to introduce simple and transparent procedures and provide assistance in preparing and filing documents. A qualified personal manager or online consultant could help with that, ” he added.
According to Natalia Myshko, PR specialist at Citibank, 7,000 users visit the company web site per day. The site provides complete information on products and services and enables users to file applications.
“Unfortunately, according to existing laws, use of electronic documents exclusively is impossible for bank products. Nevertheless, a person could file an online application and a bank representative would visit him to take all the [hard copy] documents. A bank card would then be sent to him by post,” she said.
“We publish all information related to services terms, bank programs, products and tariffs on the web,” Myshko said.
Existing clients use the Citibank web site to send applications for cards, short-term deposits and correction of personal information, all of which are processed automatically.

TITLE: Lobby: Booze Is Good for Russia
AUTHOR: By Conor Humphries
PUBLISHER: Staff Writer
TEXT: MOSCOW — Alcohol ads are good for democracy and alcoholism doesn’t hurt the economy — or at least that’s what Russia’s alcohol lobby would have you believe.
Forced into a corner by a string of damaging legal changes, apologists for some of the country’s top spirit producers went on the offensive Thursday with some interesting arguments about why lawmakers should give alcohol producers a break.
An alcohol industry round table saw executives vent their wrath against a law limiting alcohol advertising, the government’s battle against bootlegged alcohol and a disastrous changeover to a new alcohol labeling system that has left shelves across the country empty of many wines and spirits.
Sixty-five rubles ($2.40) for a bottle of vodka is too much for one-third of Russians, leaving them with no choice but to drink poor quality bootlegged alcohol, said Sergei Sorokin, general director of Russian Alcohol, which produces the Goluboi Topaz brand of vodka.
All the poorest Russians can afford is 50 rubles ($1.80) per bottle, he said. The solution is to reduce taxes so that bonafide alcohol producers can compete with the pirates.

TITLE: Northwest Telecom Doubles Profits In, Totals 1.41 Billion
PUBLISHER: The St. Petersburg Times
TEXT: The region’s major landline telephone operator Northwest Telecom doubled net profit last year in comparison with 2004, earning 1.41 billion rubles ($52.36 million), according to IFRS, Interfax reported last week.
EBITDA increased by 41 percent to 5.6 billion rubles ($208 million). 
About 40 percent of the revenue came from local telephone services, which increased by 45.6 percent last year.

TITLE: Japan’s Interest Rate Raise Impresses Analysts
AUTHOR: By Martin Fackler
PUBLISHER: The New York Times
TEXT: TOKYO — Economists applauded the Bank of Japan’s interest rate increase, the first in six years, as a long-awaited signal that Japan’s $4.6 trillion economy is finally getting back on track.
They said that by moving pre-emptively Friday, long before a return of inflation was likely to became a threat, the central bank was also hoping to demonstrate that it was watching prices carefully, and was therefore up to the task of stewarding Japan’s economy, the world’s second-largest after the United States.
The Bank of Japan edged up its target overnight rate to 0.25 percent from effectively zero, where it had sat for most of the last seven years.
Economists said the bank’s main concern in raising rates was restoring its own reputation after a series of policy mistakes that deepened Japan’s economic troubles during more than a decade of stagnation.
The biggest error came during twin real estate and stock market bubbles in the late 1980’s, when the bank was slow to react and then overcompensated by raising rates drastically. In 2000, the bank raised rates just as the Internet bubble was starting to collapse, and had to reverse itself a few months later as the economy wilted.
These errors have haunted the bank as it tries to win respect on a par with the Federal Reserve and the European Central Bank.
Economists, however, did say the bank deserved praise for continuing to function normally despite an investment scandal involving its governor, Toshihiko Fukui, who has faced calls to resign since admitting last month that he owned shares in a stock fund run by an investor later indicted for insider trading.
Many feared the scandal could paralyze policy making, or make the bank less able to resist rising political pressure against a rate increase by those who feared an increase could destroy jobs.
“The actual impact on markets from the Bank of Japan’s rate hike is extremely small,” said Takahide Kiuchi, senior economist at Nomura Securities in Tokyo. “But the psychological impact of this step is tremendous.”
But while the rate increase was well received in Japan, there was concern the bank had turned a blind eye to its consequences for global financial markets. Traders and investors said the increase, coming as the United States and Europe are also raising rates, added to the perception that the world was entering a phase of monetary tightening.
Some said this could be the wrong message at the wrong time, coming as rising tensions over Iran’s nuclear program and missile tests by North Korea threaten global growth.
“With the geo-political issues, this could be a bad time to be tightening,” said Stefan Worrall, an equity broker in the Tokyo office of Credit Suisse First Boston.
Other fallout from the move could also include a slowing of the so-called carry trade, an often lucrative maneuver by hedge funds and other large investors who borrow money in Japan at low rates to invest in emerging markets for higher returns.
At home in Japan, the move may also indirectly hurt profits at exporters like Sony and Toyota, as higher interest rates make Japan a more attractive place to invest, driving up the yen — and thus the price of Japanese products overseas.
At the same time, Fukui was careful to address concerns that the bank might start raising rates too quickly, which could choke off the recovery. At a news conference Friday, he said the bank “does not intend to carry out consecutive rate hikes.”
“Today, we took a first but important step in the process of normalizing interest-rate levels,” he said. “We made this decision not to address a clear and present inflation risk, but to contribute to a sustained economic recovery by taking a more forward-looking stance.”
“This is a signal that Japan is back,” said Jason Rogers, an analyst specializing in Asian banking and central bank policy at the Singapore office of Barclays. 
“Once rates start going up, Japan stops looking so abnormal.”

TITLE: Concerns About Dot-Com Crash, Version 2.0
AUTHOR: By Chris Gaither and Dawn C. Chmielewski
PUBLISHER: The Los Angeles Times
TEXT: LOS ANGELES — Is the bubble about to burst — again?
Investment in Internet companies has climbed so steeply since the dot-com crash of 2000 that some Silicon Valley veterans worry too much money is again pouring into too many unproven, unprofitable ideas — setting the stage for another high-tech shakeout.
Watching venture capital firms invest hundreds of millions of dollars in new web companies last year, longtime Internet executive Richard Wolpert branded the upswing “a mini-bubble.” But “about a month ago,” he said, “I started dropping the word ‘mini.’”
In the first three months of this year, venture investors funded 761 deals worth about $5.6 billion. That is up 12 percent from the same period last year, and the highest first quarter since 2002. One sector in particular is heating up fast: online media and entertainment.
The $254.9 million invested in blogging and online social networks in the first half of the year already exceeds such spending for all of 2005, according to research firm Dow Jones VentureOne. The $156.3 million pumped into online video is on pace to surpass last year’s investment.
The popular success of MySpace, a social networking site bought last year by Rupert Murdoch’s News Corp. for $580 million, and YouTube, a video sharing site, has inspired scores of imitators. In online video alone, there are nearly 180 new companies — not to mention big players such as Yahoo, Google and CBS — vying to be the next YouTube.
But MySpace and YouTube, the industry leaders, have yet to make big bucks, and some skeptical investors wonder what hope there is for all the copycats.
Venture capitalists say they are being more responsible this time. Alan Patricof, who provided early funding for America Online, Office Depot and Apple Computer, said the investment community probably would not reach the late 1990s level of irrational exuberance.
But, he added, “it certainly is the beginning of a heightened frenzy developing.”
The current run-up does differ from the late-1990s bubble that began to implode in 2000, wiping out within two years $5 trillion in paper wealth on Nasdaq, the stock market on which the shares of many tech companies are traded. The market value of Nasdaq companies peaked at $6.7 trillion in March 2000 and bottomed out at $1.6 trillion in October 2002. It has since rebounded to $3.6 trillion.
One key difference is that the volume of venture investment is much lower than it was during the first Internet boom’s height. The amount invested in the first quarter of this year was just one-fifth the $28.1 billion spent in the first quarter of 2000, according to PricewaterhouseCoopers’ MoneyTree report, which tracks venture investment.
Also significant is the lack of investor appetite for initial public offerings. Unlike the last round of online exuberance, small investors are not likely to buy shares in an online pet store with a sock-puppet spokesman.
And the range of companies sprouting this time is narrower. In the 1990s, entrepreneurs tried adapting any number of business ideas to the web. Now, the focus is more on free services supported by online advertising, which has been growing sharply.
Some investors argue that there will not be another dot-com implosion, that the investment boom in online media companies is part of the natural ebb and flow of venture capital: Money flows into unproven start-ups, winners emerge and investors move on to the next popular collection of start-ups.
“There are going to be a lot of flameouts and some spectacular winners, because even in bubbles some enormous companies that have lasting value were created,” said Gary Little, general partner in Morgenthaler Ventures.
Nevertheless, overinvestment carries potential consequences. If Silicon Valley again disappoints the pension funds and college endowments that bankroll venture capital, it could find itself spurned next time, stifling the next round of innovation.
“When there is a crash or implosion, it makes investors — both private investors and public investors — just reluctant to go into these categories, even if there are good investments there,” said Josh Lerner, a Harvard Business School professor and co-author of “The Venture Capital Cycle.”
Nasdaq’s malaise is contributing to the interest in the start-up gold rush. Shares of Dell, Intel, Microsoft, Ebay and others are either stagnant or near multi-year lows. Fast-growing Google is a big exception, but when its profit growth slows — as its chief executive has warned that it inevitably will — investors could flee. With the public markets soft, money managers are desperately seeking other ways to get the returns needed to fund their pension plans, including hedge funds, buyouts and venture capital. The prospect of finding the next Google when it is still young holds great appeal, and money managers are willing to fund 10 venture-backed fledglings in hopes that one hits it big.
Putting bundles of cash into the hands of venture capitalists causes what the investment community refers to as “overhang” — too much cash chasing after too few brilliant ideas. That can disrupt the delicate courtship ritual between entrepreneurs and investors, producing too many bad pairings.
To veterans like Wolpert, it all seems familiar. “If you screw up once, it’s an accident,” said Wolpert, former president of Disney Online. “If you screw up twice, it’s a trend.”
“The VC community has gotten very much more savvy,” said Skip Paul, former chairman of iFilm. If there is another bubble, he said, “I think it will be a much smaller bubble, and it will be populated by people who didn’t go through it the last time.”

TITLE: IN BRIEF
TEXT: Oil Prices Reach $78
WASHINGTON (Associated Press) — The price of oil briefly surpassed $78 per barrel Friday and finished four percent higher for the week after Israeli attacks against militants in Lebanon stoked fears of a wider Middle East conflict and possible oil-supply disruption. 
The run-up in oil raised concerns about inflation and the economy at large, sending stock prices tumbling. OPEC tried to reassure the market by stressing its commitment to “order and stability,” but at the same time said it “has no influence” over the geopolitical turmoil underlying today’s volatility. 

G8 Puts Pressure on WTO 
ST. PETERSBURG (Bloomberg) — Group of Eight leaders Sunday called for a “concerted effort’’ to conclude five-year trade talks and gave World Trade Organization Director-General Pascal Lamy another month to suggest a way to reach an agreement.
A WTO meeting in Geneva ended on July 1 without agreeing formulas to cut duties on farm and industrial goods as negotiators refused to make new concessions. The World Bank says a trade deal would pump at least $96 billion into the global economy. 

GM’s Three-Way Alliance
NEW YORK — General Motors  chief executive officer Rick Wagoner and Carlos Ghosn, chief of Renault and Nissan, said their companies would take about 90 days to review potential benefits of a three-way alliance.
“We had a good discussion today, and are looking forward to having our teams work together to explore our ideas,’’ Wagoner and Ghosn said in a statement issued after a dinner meeting in Detroit late Saturday.
The meeting came two weeks after billionaire investor Kirk Kerkorian, whose Tracinda Corp. owns 9.9 percent of GM shares, sent letters urging them to explore a partnership. 	(Bloomberg)

TITLE: Committing to Their Commitments
AUTHOR: By Bertil Lindblad
TEXT: AIDS continues to kill 8,000 people around the world each day. More than 38 million people are now living with HIV, with an increasing number of new infections among women and girls. Only one in five people living with HIV have access to prevention and treatment services. Worldwide, fifteen million children have been orphaned as a result of AIDS. AIDS is a global emergency and poses one of the most formidable challenges to the social development, progress and stability of the world. AIDS takes its heaviest toll among the young and most productive — people aged 20 to 40 — and the epidemic continues to threaten social stability and national security.
For nearly a decade, G8 leaders have recognized that AIDS, tuberculosis, malaria and vaccine-preventable diseases slow economic development, perpetuate poverty and threaten security in large parts of the world. To this end the G8 has focused attention and resources on a strengthened response to the surging global AIDS pandemic. Critical achievements include the creation of the Global Fund to Fight AIDS, Tuberculosis and Malaria at the 2001 Genoa Summit and the establishment of the Global HIV Vaccine Enterprise at the 2004 Sea Island Summit. At last year’s G8 Summit in Gleneagles, leaders committed to getting “as close as possible to universal access to AIDS treatment by the year 2010.” They also pledged to work to reduce HIV infections significantly with the aim to have an AIDS-free generation in Africa and to scale up the global response to the pandemic. In each case, G8 commitments have given impetus to worldwide efforts to strengthen health systems, increase access to medicines, expand resources, and they have generated high levels of media and public attention.
The G8 focus on health in past years has led directly to the strengthening of UNAIDS (the Joint United Nations Program on HIV/AIDS) and to the establishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria, which to date has obtained pledges of $9 billion to prevent, diagnose and treat these diseases. The support for the global response to AIDS demonstrated by G8 leaders has been, and continues to be crucial to getting ahead of the pandemic. Great strides have been made globally in increasing access to HIV treatment and prevention services, but the pandemic continues to outpace the response. We must build on the commitments made last year to make universal access to HIV treatment, prevention and care a reality.
Consistent with previous G8 actions in recent years, Russia made infectious diseases, along with energy and education, one of three priority areas at the 2006 G8 Summit in St. Petersburg. Holding the G8 presidency provided President Vladimir Putin a unique opportunity to take the lead in consolidating existing G8 commitments on AIDS and other infectious diseases.
In advance of the St. Petersburg summit, the leaders of the four key health policy and financing organizations — the World Health Organization, UNAIDS, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and the Global Alliance for Vaccines and Immunization — jointly welcomed the focus on infectious diseases and urged the G8 leaders to continue their commitments to improving the health and lives of people around the world.
To turn the tide of the global AIDS pandemic, countries must set specific targets for HIV prevention, treatment, care and support. There must be evidence-based, itemized plans that are funded through increased national and international resource allocations. Human resource capacity must be strengthened to enable health, education and social systems to mount an effective response. Access to comprehensive, tested and effective prevention, treatment and care services must be scaled up. Remaining barriers related to pricing, tariffs and trade, regulatory policy and research and development must be removed to speed up access to affordable quality HIV prevention commodities such as male and female condoms, medicines and diagnostics. Together, these measures constitute a needed shift from crisis management to a strategic and sustainable response grounded in solid political commitment.
Gender inequality, discrimination (in particular stigma based on race or sexual orientation), social exclusion and denial of human rights and fundamental freedoms fuel the AIDS epidemic, and must be fully addressed by governments and all levels of society. Key measures include the review, amendment and enforcement of legislation to protect and promote the rights of people living with HIV and AIDS and those particularly vulnerable to HIV infection. Given the fact that HIV epidemics in many countries are mainly driven by widespread intravenous drug use, mostly involving young people, comprehensive drug use prevention and harm-reduction programs — including needle exchange and substitution therapy for injecting drug users living with HIV — are necessary.
We welcome Russia’s decision to include infectious diseases on the agenda for the 2006 summit, a decision that led G8 leaders on Sunday to affirm previous commitments to achieve the global targets set by the historic United Nations General Assembly Special Session on HIV/AIDS in 2001 and its Declaration of Commitment on HIV/AIDS. At a high level meeting in New York last month, the General Assembly adopted a political declaration on HIV/AIDS, following a review of progress and remaining gaps, which calls for stepped up action in the fight against AIDS.
Russia’s support for a solid G8 commitment on AIDS should be welcomed by the global community and should also provide critical impetus to Russia’s own response to the epidemic. Russia faces the largest HIV epidemic in Europe, with more than 350,000 officially registered cases. However, as Putin pointed out at a meeting of the presidium of the State Council that addressed AIDS in April, the real number is much higher. UNAIDS and the World Health Organization estimate that the number of Russians infected with HIV is 940,000, close to 1 percent of the population. Urgent action is required. Notable progress has been made: Within the framework of the National Health Project there have been substantial allocations for prevention, diagnostics and treatment of HIV and hepatitis — 3.1 billion rubles (more than $100 million) for this year alone. In 2007, this amount will be more than doubled. More is needed, and implementation of the action points adopted by the State Council, including improved coordination and expanded prevention, treatment and care services, will be critical to stem the epidemic.
In the lead-up to the St. Petersburg summit, G8 health ministers met in Moscow in late April to discuss current global health challenges, with specific focus on avian flu, AIDS and tuberculosis. In a commendable move, the executive director of UNAIDS and the director general of the WHO were invited to join parts of the discussions along with representatives of the Global Fund and the World Bank. 
In a communique, the health ministers recalled the Gleneagles commitments to universal access and called on UNAIDS and its cosponsoring agencies, including UNICEF, WHO and the World Bank, to provide reports and updates on global progress towards this goal, with the aim of coming as close as possible to universal access to HIV prevention, treatment, care and support by 2010.
The G8 leaders committed themselves in St. Petersburg on Sunday to deliver on promises made at previous summits. The time to reverse the spread of AIDS is now. This is the time to step up the fight against the epidemic; the personal engagement, commitment and support of each of the G8 leaders will be critical to overcoming the greatest global challenge of our generation. We know what it takes to turn the tide against AIDS.

Bertil Lindblad is UNAIDS representative in Russia.

TITLE: The Eviscerated Summit
AUTHOR: By Alexei Bayer
TEXT: Ahead of the G8 summit in St. Petersburg, the nagging question was whether Russia under President Vladimir Putin was free enough to deserve a place alongside the world’s leading industrial democracies.
The fact that this question was posed inside Russia — albeit not on national television — shows how far the country has come. But Potemkin village “democratic” and “opposition” events staged for the summit were painfully reminiscent of Brezhnev-era games, when a few dissidents would be released from labor camps and some Jews would be allowed to emigrate ahead of meetings with U.S. presidents.
Although Putin and his cohort have stomped out any meaningful pro-Western opposition, they didn’t really have to work too hard at it. At his internet Q&A session on July 6, Putin declared: “Political opposition is very necessary in any country. There is a great need for it, and we’ll continue to support that political opposition.” True enough, it seems the only way Russia can have a democratic opposition is if the government actively fosters one.
Whatever can be said about Russia’s sovereign democracy, it may not be much less genuine than, for instance, Japan’s, where the Liberal Democrats have run the show for six decades, or Italy’s, where the last prime minister controlled television broadcasting and successfully evaded prosecution on corruption charges.
Nevertheless, Russia has no business hobnobbing with leading industrial democracies. The reason is not its lack of freedom, but the other part — industry.
The Group of Seven had its origins in the 1973 Arab oil embargo, when major oil consumers set up an informal forum as a counterweight to OPEC. Its annual meetings, supplemented by the get-togethers of foreign and finance ministers, outlived the oil crisis and endured through the 1980s and 1990s because industrial nations shared common economic and political interests and needed to coordinate their response to world events.
Russia is not one of the world’s leading economies. On a very generous count, it currently occupies the No. 11 spot. Some of the G8 guests — certainly China and Brazil — deserve to be part of the G8 ahead of Russia.
More to the point, Russia is an oil producer, not an industrial nation. Its economic structure resembles Venezuela rather than Japan or even Britain and Norway, oil exporters who remain industrial powers.
Industrial nations want political stability, steady economic growth and a stable dollar. You would expect oil producers to strive for similar conditions, but this has not been the case. Historically, they have prospered during periods of instability, when the United States, the world’s economic linchpin, was weak and isolated and when the dollar was soft. This was the case from 1973 to 1980 and is the case again today. While the United States sees itself as the world’s only superpower, in reality it has become bogged down in a lost war and has antagonized most of its traditional allies. The dollar is at its weakest level in years. Oil prices, on the other hand, are setting records.
Not surprisingly, there are many pariah nations and failed states among pure oil exporters. For the original G7 members to sit around discussing energy security with Putin is nonsense. Accordingly, even as its president entertains world leaders, Russia keeps obstructing U.S. initiatives in the UN to rein in Iran and North Korea.
The St. Petersburg summit raises questions not so much about Russia’s democracy as about the continued usefulness of the G8 forum as currently constituted. As the radicalized Middle East flares up into yet another bloody war, no one expects anything but discordant noises and platitudes from the gathering of so-called world leaders in a PR-dominated atmosphere. Naturally, the weaker the United States, the more eviscerated international organizations such as G8 are likely to become.

Alexei Bayer, a native Muscovite, is a New York-based economist.

TITLE: Serpent’s Egg
AUTHOR: By Chris Floyd
TEXT: Over and over, the Bush regime and its media apologists have peddled the same mendacious line in defense of their war crime in Iraq: “We’re fighting the terrorists over there so we don’t have to fight them over here.” But in fact the occupation is breeding a cadre of vicious terrorists intent on bringing death and destruction back home to America’s streets, using the deadly skills they’ve learned — in the U.S. military.
Hundreds, possibly thousands of neo-Nazis and “white power” extremists have infiltrated U.S. forces in a deliberate strategy to get training in weapons, urban warfare and covert operations, the Pentagon’s own investigators report. These homegrown terrorists — avowed enemies of democracy, committed to sparking the same kind of horrific civil war in America that President George W. Bush has spawned in Iraq — have wormed their way into some of most elite military units, as well as filling up the ordinary ranks with cretinous “race warriors.” 
This infestation is being actively abetted by the Bush regime. Who says? Well, Defense Department investigator Scott Barfield, for one. “Recruiters are knowingly allowing neo-Nazis and white supremacists to join the armed forces, and commanders don’t remove them from the military even after we positively identify them as extremists or gang members,” Barfield told the Southern Poverty Law Center in a report issued last week. 
In the last year alone, Barfield identified 320 white power extremists at a single U.S. army base, Fort Lewis in Washington state; only two were discharged. Some were part of just one neo-Nazi cell that has burrowed into five bases spread across the entire country, Barfield said; many of its members have joined the hundreds of known neo-Nazis now schooling themselves in Bush’s master class in carnage.
The infiltration is part of a concerted strategy by the neo-Nazi movement to use Bush’s war for terrorist training — much as their extremist brothers in al Qaida are doing. In magazines and web sites, they pass along handy hints and exhortations to their cloaked comrades in the field and potential recruits at home. “Light infantry is your branch of choice because the coming race war and the ethnic cleansing to follow will be very much an infantryman’s war,” writes Steven Barry, a former Special Forces officer now serving as “military unit coordinator” for the neo-Nazi National Alliance, The New York Times reports. 
“[The race war] will be house-to-house, neighborhood-by-neighborhood, until your town or city is cleared and the alien races are driven into the countryside where they can be hunted down and ‘cleansed,’” writes Barry, as if he were channeling one of the deadly Iraqi militias sponsored by the Bushists in their self-confessed “Salvador Option” — an undercover program named for the right-wing Central American death squads armed and trained by the Reagan-Bush administration in the 1980s, as The New Yorker reports.
“Join only for the training, and to better defend yourself, our people and our culture,” says another all-American goosestepper, Army engineer and Iraq war veteran John Fain. “We must have people to open doors from the inside when the time comes.”
But it looks like some big-time insiders are already opening those doors. The percentage of “moral waivers” being granted to recruits for past misdeeds — and for previously disqualifying factors such as violent extremism or gang membership — has “more than doubled since 2001,” the Chicago Sun-Times reports. Some recruiters are even helping skinheads cover up their telltale Nazi tattoos to get them into the military, Barfield says. Meanwhile, officers in the field are routinely failing to report obvious neo-Nazi activity, and those now-uncovered tattoos, when they spot them.
It’s a far cry from the crackdown on extremism in the last decade, after the first great white-power infestation of the military during the Reagan-Bush years. When skinhead troops from the elite 82nd Airborne Division randomly murdered a black couple in 1995 to earn their neo-Nazi “spider web tattoos” for killing non-whites, the Pentagon brass began turfing out hatemongers and banning racist associations; one general even ordered his 19,000 men strip-searched for extremist tattoos, the SPLC reports.
Now, the brass help hide those same inky taints of evil, and knowingly send “race warriors” to occupy an Arab land, to storm Iraqi homes. How many “spider webs” have been earned with Bush’s blessing as these extremists lord it over the “non-whites” in their power?
The tacit acceptance of neo-Nazis in the military is part of a broader pattern at work in the Bush imperium: the “mainstreaming” of right-wing extremism in U.S. society, an alarming development well documented by journalist Dave Neiwert on his Orcinus blog. White-power advocates once stuck on the lunatic fringe now appear on network television as respected spokesmen on the “immigration question.” High-profile Bush-backers in the mainstream media — Ann Coulter, Michelle Malkin, Rush Limbaugh and other gasbags — routinely tout “fantasies” of ethnic cleansing, concentration camps and death for “traitors,” i.e., anyone who opposes the hard-right line. Bush himself has openly embraced religious extremists like the “Dominionists,” whose rabid doctrines of Christian nationalism are scarcely distinguishable from the religious perversions that undergird most neo-Nazi philosophies.
In its heedless lust for loot and dominion, the Bush faction will use anyone: neo-Nazis, neoconservatives, theocrats, dictators, death squads, nutballs. The blowback from this nest of vipers will poison American life for generations — but of course the Bushists don’t care. America is nothing to them but a cash cow and a billy club. Let the stupid rabble worry about war-trained Nazis in the streets; the Bush elite will be safe and cozy in their gated, guarded mansions.

TITLE: Hezbollah Defiant as Israel Sustains Attack
PUBLISHER: Agence France Presse
TEXT: BEIRUT — Lebanon shook under a new wave of air raids Monday after Israel vowed a fierce response to Hezbollah guerrilla attacks with no sign of a let-up in a conflict that has killed about 200 people in six days.
At least 21 people, including Lebanese soldiers, were killed as fighter jets slammed missiles into the port of Beirut, a military base in the northern city of Tripoli, and Baalbek, a Hezbollah stronghold in the east.
Governments worldwide were scrambling to evacuate their nationals from Lebanon on the sixth day of the devastating tit-for-tat blitz of Israel air strikes and rocket attacks by the Lebanese Shiite Muslim militia.
UN and EU envoys were also in the region holding urgent talks to try to contain the crisis amid fears it could spiral out of control and trigger another all-out war in the Middle East.
UN Secretary General Kofi Annan called for a “cessation of hostilities” to allow a “stabilization force” to be put together, in the first sign of action over a conflict that has exposed rifts in the international community.
“I appeal to the parties to focus their targets narrowly and to bear in mind that they have an obligation under international humanitarian law to spare civilian lives [and] to spare civilian infrastructure,” he said.
Monday’s raids brought to at least 170 the number killed in Israel’s fiercest offensive on its northern neighbour since it launched a full-scale invasion in 1982, almost all of them civilians.
Twenty-four Israelis have been killed, including 12 civilians in a barrage of Hezbollah rocket fire across the border.
The onslaught has left Lebanon virtually cut of from the outside world and much of its infrastructure in tatters, with jets hitting roads, bridges and power stations as well as strongholds of Hezbollah, the militia Israel has vowed to crush.
Beirut’s international airport, already shut to traffic since last Thursday, was hit again late Sunday by Israeli warplanes which fired 10 missiles on a runway and set the night sky ablaze.
Israeli Prime Minister Ehud Olmert had warned of retaliation after Hezbollah rockets hit Haifa, Israel’s third largest city, killing eight railway workers in the deadliest cross-border attack in decades.
“Nothing will deter us, whatever far-reaching ramifications regarding our relations on the northern border and in the region there may be.”
The Israeli military ordered residents to flee villages in southern Lebanon, warning of air and artillery operations, and put its commercial capital Tel Aviv and all towns further north on alert.
Israel unleashed its military might on Lebanon after the capture of two soldiers in a Hezbollah attack that also killed eight soldiers, opening up another battleground after a similar offensive launched three weeks against Gaza where militants are holding a third soldier hostage.
“We will use all means,” a defiant Hezbollah chief Hassan Nasrallah warned in an address on Lebanese television. “As long as the enemy has no limits, we will have no limits.”
“Surprises are coming. Our forces are still intact, and we are the ones who are choosing the time and the place,” said Nasrallah, who has survived repeated attacks on his headquarters in Beirut’s Shiite dominated southern suburbs.

TITLE: Israel Hits Ministry In Gaza Strike
PUBLISHER: Agence France Presse
TEXT: GAZA CITY — Israel has bombed the Palestinian foreign ministry in Gaza for the second time in a week, demolishing the building Monday and tightening the noose on the Hamas-led government three weeks after the capture of a soldier. 
With Israel showing no let-up in its deadly offensive, launched with the twin aims of retrieving 19-year-old Corporal Gilad Shalit and stopping Palestinian rocket fire, a civilian was killed by tank fire in Beit Hanun.
Israeli troops have been operating for the past two days in the northern town, where three gunmen were wounded in Israeli attacks on Monday and dozens of panicked local residents have fled for shelter further south.
Operation Summer Rain has now left at least 85 Palestinians and one Israeli soldier dead, with Israel opening a second front, waging six days of war in Lebanon after Hezbollah captured another two soldiers last week.
Israel confirmed Monday the overnight attack on the foreign ministry, accusing minister Mahmud al-Zahar, a leading member of Hamas, whose armed wing was jointly responsible for Shalit’s abduction, of planning “terrorist attacks.”
An F-16 jet dropped a missile on the building, which had already been badly damaged in a raid Thursday, pancaking the five-storey ministry and causing extensive damage to the neighbouring planning and finance ministries.
“It was headed by Mahmud al-Zahar, a senior member of Hamas involved in the planning of terror attacks and general activity of the Hamas terror organisation,” an Israeli spokesman said.
Three local residents living in nearby houses were also wounded in the massive aerial attack in downtown Gaza City, medical and security sources said.
Israel has already bombed the Gaza offices of Palestinian prime minister Ismail Haniya, the head of the Hamas-led government, and those of his interior minister Siad Siam this month.
Ground troops have also rounded up a third of the Hamas cabinet in the occupied West Bank, although one of the ministers has since been released.
Other overnight air strikes targeted a security post used by a special Hamas paramilitary force in the refugee camp of Jabaliya and wounded two gunmen in an attack on a group of militants in Beit Hanun, security sources said.
A 20-year-old local resident was killed and a Palestinian gunman from an armed group that fired on the Israelis, was left seriously wounded when an Israeli tank opened fire in Beit Hanun early Monday, a medical source said.
An Israeli army spokeswoman said that soldiers had killed two Palestinian gunmen near Beit Hanun during an exchange of fire.
Tanks and bulldozers rolled into Beit Hanun early Sunday, in the deepest incursion into the area since Israel began its punishing offensive on June 28, three days after Shalit was seized.

TITLE: Foreigners Flee Beirut After Canadian Family Perishes
PUBLISHER: Reuters
TEXT: BEIRUT, Lebanon — Seven Canadians from the same Montreal family, including four young children, were killed in Lebanon on Sunday when Israeli aircraft bombed a house in the south of the country, the Canadian Broadcasting Corporation said. 
A Canadian foreign ministry spokeswoman confirmed the deaths and said three people were hurt. But she said the incident happened when the house in the town of Aitaroun was shelled.
Canadian Foreign Minister Peter MacKay said Ottawa was sending ships to help evacuate up to 40,000 Canadians believed to be in Lebanon.
The CBC named the dead as Ali El-Akhras, his wife Amira and their four children aged one, four, six and eight. The seventh family member was Ali’s uncle, also named Ali, who had moved to Montreal from Lebanon 15 years ago.
France, the United States, Britain and a host of other nations scrambled to evacuate their citizens from Lebanon on Sunday as Israeli air strikes pounded the country for a fifth day. 
Foreigners have fled in thousands of cars to neighboring Syria since Thursday. Israeli planes, retaliating for Hizbollah rocket attacks and the capture of two soldiers on Wednesday, have killed more than 150 people.
A U.S. Marine helicopter with 21 passengers — non-essential U.S. embassy staff and Americans with compelling medical needs — left Lebanon for Cyprus on Sunday, U.S. officials said.
France hired a cruise ship, which should arrive on Monday and can carry 1,000 to 2,000 passengers, to help evacuate its citizens and other Europeans to Cyprus. It also hired another ferry with Norway which can take up to 650 people.
So far most foreigners have been forced to flee overland to take flights from Syria after Israeli forces bombed the Beirut airport and its ships began patrolling Lebanon’s Mediterranean coast.

TITLE: Bloody Monday in Baghdad Leaves 41 Dead at Market Place
PUBLISHER: Agence France Presse
TEXT: BAGHDAD, Iraq — Dozens of heavily armed attackers raided an open air market Monday in a tense town south of Baghdad, killing at least 41 people and wounding 42, police and hospital officials said.
Some reports put the death toll far higher. Most of the victims were believed to be Shiites.
The attack in Mahmoudiya began about 9 a.m. with a brief mortar barrage, followed by an armed assault by dozens of gunmen. They killed three Iraqi soldiers at a checkpoint, then stormed the market while firing automatic weapons and rocket propelled grenades, police Capt. Rashid al-Samaraie said.
Following the attack, police rushed to the market, arresting people at random in an attempt to find the assailants, witnesses said. In Baghdad, lawmakers allied with radical Shiite cleric Muqtada al-Sadr stormed out of a parliament session to protest the killings.
The attack also sent shock waves through Mahmoudiya, an agricultural center with Shiites living in the town center and Sunnis in the outlying neighborhoods. Frantic relatives milled about the hospital, scuffling with guards and Iraqi soldiers who tried to keep order.
“You are strong men only when you face us, but you let them do what they did to us,” one man shouted at a guard.
Some of the victims were transported to hospitals in Baghdad, where a Shiite television station, Al-Forat, put the death toll at 72.
Police said most of the victims were Shiites, and it appeared the raid was part of the escalating campaign of tit-for-tat sectarian killings that have plunged the country to the brink of civil war.
Mahmoudiya has long been a flashpoint of Sunni-Shiite tension and the scene of frequent bombings and shootings. It is located in the “triangle of death,” an area of frequent attacks on Iraqi and U.S. troops and Shiites traveling between Baghdad and religious centers to the south.

TITLE: Tsunami Kills 37 in Indonesia
PUBLISHER: Reuters
TEXT: JAKARTA, Indonesia — A tsunami triggered by a strong undersea earthquake off the southern coast of Java island swept away buildings at an Indonesian beach resort on Monday and killed nearly 40 people, an official and media reports said. 
The news spread panic across a region still recovering from a tsunami less than two years ago that left nearly 230,000 people killed or missing, mostly in Indonesia. But there were no reports of casualties or damage in any other country from Monday’s tsunami.
Waves up to 1.5 meters high crashed into Pangandaran Beach near Indonesia’s Ciamis town, around 270 kilometers southeast of Jakarta, and a local official said 37 people had been killed. The toll could rise, he said.
“We have evacuated 37 dead bodies. The number could grow because when we went to the shore, rescuers were trying to evacuate more bodies,” Rudi Supriatna Bahro told Metro TV.
The Ciamis councilman said areas up to half a kilometer from the beach were affected, with flimsily constructed buildings flattened.
“We need tents, food and medical aid for the displaced,” he said.
Robert Simatupang of the Indonesian Red Cross disaster crisis center in Jakarta said it had sent rescuers to the scene.
“Over 10 dead bodies have been identified and there are hundreds who are still missing,” he said, although he cautioned that some of the missing may simply be separated from family.
The country’s official Antara news agency reported several deaths had also occurred at two other beach resorts in Java.
A massive earthquake in December 2004 triggered a tsunami that left nearly 170,000 people killed or missing in Indonesia’s Aceh province. Tens of thousands died elsewhere, the majority in Sri Lanka, India and Thailand.

TITLE: Uganda Demands Peace In Return For Amnesty
PUBLISHER: Reuters
TEXT: JUBA, Sudan — Ugandan negotiators at talks to end one of Africa’s longest wars demanded on Sunday that Lord’s Resistance Army (LRA) rebels disarm and hand over all their weapons in order to receive amnesty. Tentative talks to end the guerrillas’ brutal two-decade insurgency began in earnest on Sunday, mediated by the government of neighboring southern Sudan.
Uganda’s government said it welcomed the rebels’ decision to attend, but called on them to abandon “all forms of terrorism” before being re-integrated into civilian life, according to a copy of the Ugandan demands seen by Reuters.
It called on the rebel group to “dissolve itself and hand over all arms and ammunitions in its possession together with their inventory (and) assemble in agreed locations where they will be demobilized, disarmed and documented.”
It said resettlement and retraining would be given to former fighters who wanted it, and that the government would work with northern Uganda’s cultural and religious leaders to reconcile the ex-combatants with their local community.
The demands reiterated that any deal would have to be reached before Sept. 12. Talks are due to resume on Monday.
The top five LRA leaders are wanted for war crimes by the International Criminal Court in The Hague. Despite that, Uganda’s government said it took a “painful” decision to offer amnesty, despite objections from the international community.
South Sudan’s regional government says it wants to broker an end to the LRA’s conflict, which has killed tens of thousands, uprooted nearly 2 million people in northern Uganda and destabilized south Sudan, itself emerging from war.
For years the cult-like rebels have raided both sides of the Uganda-Sudan border. And late last year they set up camps in the lawless jungles of northeastern Democratic Republic of Congo, fuelling rampant insecurity in the region.
Earlier on Sunday, the Ugandan negotiators had demanded the rebels withdraw corruption claims and threats to continue fighting. 
The Ugandan team said the claims and threats were “absolutely unacceptable” and “completely out of touch with reality.”

TITLE: ‘Love Parade’ Back in Berlin
PUBLISHER: Reuters
TEXT: BERLIN — Berlin’s “Love Parade” returned on Saturday with around half a million revelers attending the gigantic techno-music party on the streets of the German capital a mere one week after the end of the soccer World Cup.
Dancers wore elaborate costumes or gyrated in their under-garments to deafening bass rhythms produced by disc jockeys on giant flat-bed trucks riding along a 3-km (2 mile) stretch near the Tiergarten Park and Brandenburg Gate.
Police said as many as two hundred thousand more could yet attend the party later on Saturday.
The parade was resuscitated this year after financial turmoil forced its cancellation in 2004 and 2005. “The Love is Back” is the motto of the 2006 version, which runs all day and into the evening before ravers move on to nightclubs.
“This is great! I’ve been waiting three years for this,” said Berliner Nicole Koehler, 25. “Hopefully it will be here every year from now on.”
With the help of a new sponsor, a German fitness studio, the party that traces its roots to 1989 is spreading beyond the techno music scene to include all forms of electronic music.
Revelers from around the world arrived on Saturday morning with painted faces and wearing exotic garb.

TITLE: Presidential Candidate Calls for Africa To Abandon War Leaders
PUBLISHER: The Associated Press
TEXT: KINSHASA, Congo — Congo’s least likely presidential candidate says it’s time for Africa to let go of its gun-toting dictators and elect people who can think.
Dr. Oscar Kashala, a Harvard-educated cancer researcher and political novice, has left his laboratory in Cambridge, Massachusetts, to hit a rocky campaign trail as his homeland emerges from what has been called “Africa’s world war.”
At a rally Saturday, Kashala belatedly kicked off his campaign for Congo’s July 30 presidential and legislative elections.
“He is a son of Congo,” thousands of supporters sang with gusto at the rally. “He never killed; he never looted; his hands are clean.”
Kashala says Africa’s renaissance must be led by people like him and fellow Harvard alum Ellen Sirleaf Johnson, the new president of Liberia, rather than the gun-toting guerrillas and socialist ideologues who have repeatedly fought for the continent’s liberation from invading colonizers and dictators.

TITLE: Mexican Candidate Denies Losing, Demands Recount
PUBLISHER: The Associated Press
TEXT: MEXICO CITY — Leftist presidential candidate Andres Manuel Lopez Obrador told a vast crowd of supporters Sunday to wage a campaign of “civil resistance” to push for a manual recount of the election that he claims his conservative opponent won by fraud.
Lopez Obrador did not say what the campaign should entail, but the term “civil resistance” in Mexico often has meant protest camps and street blockades. A crowd of more than 300,000 jammed the capital’s central plaza, spilling down the city’s main avenue for at least 1.5 miles and chanting “Vote by vote!” — the slogan of the recount campaign.
A recount is needed “for the economic, political and financial stability of the country,” a stern-faced Lopez Obrador said.

TITLE: Schumacher Wins French Grand Prix
PUBLISHER: The Associated Press
TEXT: MAGNY COURS, France — Michael Schumacher believes he can still make a race of it and catch F1 champion Fernando Alonso. Schumacher won the French Grand Prix for a record eighth time Sunday in a boost for resurgent Ferrari, finishing 10 seconds ahead of the world champion Alonso.
Felipe Massa, Schumacher’s Ferrari teammate, was third.
The victory helps Schumacher close the gap on Alonso in the standings with seven races left. Alonso has 96 points and Schumacher has 79.
“The championship is far from over, and these two points we have made up on our main rivals are very important,” Schumacher said. “I hope we can make up more ground.”
Alonso, who took the F1 crown from Schumacher, said his second-place finish was enough.
“Given where I started on the grid, I think second is everything I could have hoped for because we knew that Michael was a bit quicker this weekend,” Alonso said. “We won four consecutive races and hopefully this will happen again from the next race on.”
Toyota’s Ralf Schumacher was fourth — 27.2 seconds behind his brother — and McLaren-Mercedes’ Kimi Raikkonen came fifth in the 70-lap race.
Renault’s Giancarlo Fisichella was sixth, followed by Pedro de la Rosa of Spain, McLaren-Mercedes’s replacement for Juan Pablo Montoya, who has left for NASCAR.
Schumacher got away cleanly at the start and Massa did his best to stay ahead of Alonso.
Although Alonso made three attempts to pass, Massa held second.
“We had a great start, being first and second,” Schumacher said. “It was an excellent situation to start the race.”
The first indication of race strategy in the 70-lap race came at the end of the 16th when Massa pitted first, followed a lap later by Alonso, then by Schumacher on the 18th.
By 23 laps Schumacher was still ahead but with a bit of breathing room. He was 6.1 seconds ahead of Massa and 11 ahead of Alonso.
The second stint stretched things out even more.
After 50 laps, Schumacher was up by 20 over Massa and 30 ahead of Alonso. However, Alonso went in after 42, meaning he would be able to get to the end of the race without another stop.
“We figured the Ferraris were on a three stop,” Alonso said. “We took a gamble and we believed in our consistency.” The Ferraris needed one more stop for fuel and tires. Alonso’s Renault didn’t and he was able to get by Massa, but trailed Schumacher by 15 seconds.
The next race is the German Grand Prix on July 30.

TITLE: Sugar Shane Back After Rematch
PUBLISHER: The Associated Press
TEXT: LAS VEGAS, Nevada — Shane Mosley landed the crushing left hook, then turned and climbed the ropes in one elegant motion. Behind him, Fernando Vargas crumpled gracelessly to the canvas.
This rematch wasn’t much of a match at all, and Sugar Shane was back on top.
Mosley stopped Vargas in the sixth round of their 154-pound rematch Saturday night, flattening Vargas with a walloping left hand for his second victory in the rivalry in five months.
A grotesque swelling that closed Vargas’ left eye caused the fighters’ first match to be stopped in the 10th round in February. But even with two good eyes, Vargas never saw that hook — and the smaller Mosley hit him with a near-perfect punch.
“It does boost my confidence knowing that I can knock out bigger guys,” Mosley said. “My power is increasing from fight to fight. I’ve noticed more of a snap to my punches. I’ve noticed that I can knock people out. I’ve hurt people very well.”
The charismatic four-time world champion is back in form after four losses from 2002-04, and he might get a matchup with Floyd Mayweather Jr. or Antonio Margarito if he drops to 147 pounds. But nothing will happen until 2007: After beating Vargas twice in five months, Mosley will take the rest of the year off.
Mosley was more aggressive and sharp from the opening bell, patiently landing the right hand that hurt Vargas repeatedly in their first fight. Vargas seemed frustrated and disorganized, never winning a clear-cut round.
Mosley opened a cut above Vargas’ right eye in the fifth round, but neither fighter had done much in the sixth until Vargas failed to block that crushing left from Mosley, buckling Vargas’ knees.
“I thought I was doing well up until the left hook,” said Vargas, who never even saw the punch until he watched the replay. “I thought it was slowly going my way... He caught me with a great shot, and I’m not going to take anything away.”
Vargas eventually got up, but couldn’t defend himself from Mosley’s final blows. Referee Kenny Bayless stopped the fight with 22 seconds left in the round.
“When I was in the ring, I remembered watching Oscar [De La Hoya] fight Vargas, and he threw that perfect left hook,” Mosley said, referring to the Golden Boy’s 11th-round TKO of Vargas four years ago. “I was bouncing around, and I saw the opportunity, and I threw the perfect left hook again.”
Vargas appeared weaker from the start, perhaps suffering from his weight fluctuations before the fight. He made weight on Friday, then apparently gained close to 14 pounds of hydration before the fight — which might have slowed him down.
But Mosley had a masterful plan in his first fight since reuniting with his father, Jack, who had trained him since his youth. They split after Sugar Shane’s second straight loss to Winky Wright in November 2004, but reunited for this fight with no hard feelings — and an excellent result.

TITLE: Revamped Hoylake to Host British Open After 40 Years
PUBLISHER: The Los Angeles Times
TEXT: LOS ANGELES, California — The last time the British Open was played at Royal Liverpool Golf Club, Doug Sanders was 29 when he showed up at Hoylake, England, for the 1967 championship. What Sanders remembers most are the steaks.
“Black-eyed peas, corn bread, turnip greens and big ol’ steaks,” he said. “We cooked every night in a house we rented at Hoylake. Think it was the first time I ever rented a house for the Open. I had those steaks flown in on Pan American. My wife, Scotty, worked for them in the lost-and-found department. I had the steaks sent over, then my friend picked them up at the London airport and we got them through customs.” 
Nearly four decades have passed since those grilling moments for Sanders, who turns 69 in a week, and says he can almost hear the sizzle, even now.
But his memories of the golf course aren’t so hot.
“I do remember Hoylake was just a little different, I just don’t recall much.”
He shouldn’t feel alone. If there is a recurring theme to the 135th Open Championship that starts Thursday, it’s the Unknown Factor and it’s snugly wrapped around the Royal Liverpool Golf Club course, which hasn’t been part of the British Open rotation of courses since 1967, when Roberto De Vicenzo beat Jack Nicklaus by two shots.
After that, the course found itself at the start of what would become a 39-year separation from the British Open, losing its place simply because it wasn’t large enough to accommodate all the trappings of a major golf event, such as areas for corporate entertainment, parking and merchandise tents. But after the club members picked up some adjacent land and architect Donald Steel reworked the course, it’s back, even if no one is quite sure how Hoylake is going to play after so long an absence.
The names Hoylake and Royal Liverpool are interchangeable, as you may have guessed, yet one thing is certain: No matter what you call it, you must call it longer. But not by much. Measuring 7,258 yards, the course is 263 yards longer than during De Vicenzo’s day, and plays to a par of 72.
The Royal and Ancient Golf Club of St. Andrews, which runs the Open, made a significant alteration to the routing, renumbering the holes so that the old 17th hole is now the 454-yard No. 1 and the par-five 16th is now the 560-yard closing hole, a left-to-right dogleg and out of bounds on the right.
“It will be a hole for potential disaster,” said Peter Dawson, chief executive of the R&A.
Comforting as that may be, there are also new tees, new greens and steeper bunkers. Otherwise, it’s the same old place, as if anybody who’s playing this year knows much about what it used to be anyway.
Although Phil Mickelson arrived last week for his second look at the place, Tiger Woods stuck to his regular schedule of arriving on-site on the weekend, saying that the lack-of-familiarity issue is exaggerated and nothing that a couple of practice rounds can’t fix.
Sanders couldn’t agree more, probably because he can’t remember much about the place anyway.

TITLE: Belgium Faces Italy in Fed Cup Final
PUBLISHER: Reuters
TEXT: LONDON — Belgium will be the favorite to win the Fed Cup for the second time after reaching its second final on Sunday with a 4-1 victory over a weakened U.S. team. 
The Belgians, winners in 2001, will be at home against Italy who beat Spain to reach their first final on September 16/17. 
The Belgians were too strong even with only one of their two players in the world’s top three, Kim Clijsters, who won both her singles to secure the victory after only three of the five rubbers. 
Belgian captain Carl Maes said he hoped neither side would be hit by injuries in the final, due exactly a week after the U.S. Open. 
“You want the best players in the final, so let’s hope our players are fit and that theirs are too,” Maes said. 
He hopes to count on French Open champion Justine Henin-Hardenne, ranked third one place below Clijsters, who pulled out of the semi-final through exhaustion. The pair both took part in Belgium’s win over Russia in the 2001 final in Madrid. 
The Americans were without both Williams sisters and Lindsay Davenport, all nursing injuries. 
Italy won 3-1 in Zaragoza against the Spanish, who lifted the cup five times between 1991 and 1998.

TITLE: Fedrigo Takes Stage 14 of Tour de France
PUBLISHER: Reuters
TEXT: GAP, France — Frenchman Pierrick Fedrigo emerged strongest at the end of a 145-kilometer breakaway to win the 14th stage of the Tour de France on Sunday. 
The 2005 French champion had avoided a three-man crash three-quarters of the way through and then outsprinted Italian Salvatore Commesso in a nail-biting finish.
American Christian Vandevelde came home third three seconds behind with the peloton seven seconds adrift of Bouygues Telecom rider Fedrigo.
That meant Spaniard Oscar Pereiro retained his overall leader’s yellow jersey, 1 minute 29 seconds clear of American Floyd Landis.
Pereiro, from the Caisse d’Epargne team, said: “My team enjoyed it today and they showed that they were a good team overall.
“I want to keep the yellow as long as possible. Nobody expected us to have it, but now we have, we’ll have to see day by day.”
Fedrigo said: “We had a good first week but all our breakaway attempts failed so we wanted to make amends for this.”
Thirty-nine kilometers from home three men — Belgium’s Rik Verbrugghe, German Matthias Kessler and Spaniard David Canada — came to grief. Verbrugghe skidded, hit a barrier and went over. Canada also slammed the barrier and brought down Kessler who then flew over the top.
Kessler managed to get back on his bike but Verbrugghe (broken thigh) and Canada (broken collar-bone) are out of the rest of the Tour.
Monday was a welcome rest day.

TITLE: IN BRIEF
TEXT: London Police Go Free
LONDON (AFP) — Prosecutors have decided not to charge individual police officers with criminal offenses for killing a Brazilian man they mistook for a suicide bomber last year, television stations have said. 
However, London’s Metropolitan Police will be prosecuted as a whole under health and safety laws over the death of Jean Charles de Menezes, the electrician who was shot dead on July 22 last year, BBC and Sky News television reported on Monday.
The Crown Prosecution Service was to inform Metropolitan Police Chief Sir Ian Blair and others of its decision by email at 11:00 am (10:00 GMT) before it is announced publicly an hour later.

Avril Marries Sum Guy
MONTECITO, California (AP) —Avril Lavigne has married a fellow Canadian singer-songwriter, according to published reports. Lavigne married Deryck Whibley, the guitarist and front man for the band Sum 41, on Saturday, at a private estate near Santa Barbara, People magazine reported on its web site. The young rockers had a mostly traditional ceremony, the magazine said.
The usually shabby Lavigne wore a Vera Wang gown, carried white roses and was walked down the aisle by her father as Mendelssohn’s “Wedding March” played.
Lavigne, 21, and Whibley, 26, exchanged vows under an awning covered in white flowers.
Messages left by The Associated Press for Lavigne’s label, Nettwerk Management, were not immediately returned Sunday.
The pair have been dating since early 2004 and bought a house in Los Angeles later that year. They became engaged in Venice, Italy, in 2005 while Lavigne was on a European tour.
Lavigne is working on her third album and recently gave voice to the possum Heather in the film “Over the Hedge.”

No Pedophile Party Ban
THE HAGUE, Netherlands (AP) — A Dutch court refused Monday to ban a political party whose main goal is to lower the age of sexual consent from 16 to 12. The judge said it was the voters’ right to judge the appeal of political parties. 
The party has only three known members, one of whom was convicted of molesting an 11-year-old boy in 1987. Widely dubbed the “pedophile” party, it is unlikely ever to win a seat in parliament. The group would need around 60,000 votes, and pollsters estimate it would get fewer than 1,000.
Opponents had asked The Hague District Court to bar the party from registering for national elections in November, arguing that children have the right not to be confronted with the party’s platform.