SOURCE: The St. Petersburg Times
DATE: Issue #1201 (67), Tuesday, September 5, 2006
**************************************************************************


TITLE: Paper Tips MatviyenkoFor Top Job
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: St. Petersburg Governor Valentina Matviyenko may become Russia’s next president, according to a report in the Friday edition of daily newspaper Novye Izvestiya.
The project to nominate Matviyenko for the presidential elections of 2008, dubbed “Valentina the Great”, is already underway and is supported on “a very high level”, the daily reported.
“According to our sources, the Governor put the idea to the president, promising not to occupy the seat in the Kremlin for more than one presidential term, which is to say only until 2012,” the daily reported.
Despite a widespread reaction in the Russian media, Matviyenko’s press-office rejected the claims.
“We consider the information [regarding the presidential plans of the Governor] published Friday in some media to be rumors and therefore we are not able to give any further comment,” the head of the Governor’s press office, Natalia Kutobayeva, said in an interview with the St. Petersburg Times on Monday.
Meanwhile, the experts are divided over the issue.
Roman Mogilevsky, head of the Agency for Social Information – St. Petersburg believes that the claim is valid and that Matviyenko has a good chance of being nominated in the next presidential elections with the aim of reconciling political antagonists.
“If the conflict over the presidential post leads to competition between opposed candidates, then the name of Matviyenko will have a chance of being put forward as a compromise figure,” he said in a telephone interview on Monday.
“The political situation in Russia is shaping up in such a way that the figure of Matviyenko might suit Russia’s various political elites; so far, she has been accepted by different decision-makers and, as far as we know, she has not been mixed up in any conflicts,” he said. 
“If a compromise figure, rather than anyone specific, is to be nominated, Matviyenko is a possible candidate,” he added. Mogilevsky also said that Matviyenko’s gender could aid her chances of becoming the next president. Mogilevsky said that the nomination of women to first-rank political status is a current worldwide trend. 
The nature of the Russian electorate could also play in Matviyenko’s favor. 
“The most active members of Russia’s electorate are women, and therefore the ‘female factor’ might significantly improve Matviyenko’s chances [of becoming president],” Mogilevsky said.
However, Maria Lipman, a Moscow-based expert at the Carnegie Endowment for International Peace is less optimistic about Russia having a female president in the near feature.
“If we get away from an enforced approach, whereby things are done simply according to the president’s will, then such an idea [a female winning presidential elections] seems to be premature for Russia,” she said on Monday.
“This would be a very unexpected event in a country where the number of female politicians is extremely small compared to other countries,” she said.
“The situation is changing though, due to the development of feminism in Russia and the assertion of women’s rights and their place in society,” she added.

TITLE: Violent Mobs Attack Immigrants in Karelia
AUTHOR: By Simon Saradzhyan and Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: The northwestern industrial town of Kondopoga was consumed by ethnic violence over the weekend, with angry and often drunken bands of Slavs waging an uncoordinated series of attacks on natives of the Caucasus.
The violence included mobs with Molotov cocktails burning down Caucasian-owned businesses and natives of the Caucasus being forced out of town. An air of fear and uncertainty permeated the town Sunday
The angry mobs, which left the town of 37,000 pockmarked with storefront fires and shattered glass, stemmed from a fight Wednesday evening outside the Chaika restaurant in which two ethnic Russians were killed.
A group of young ethnic Russians, including some ex-convicts, had been drinking in the restaurant that evening, an official at Karelia’s Interior Ministry said.
The men began arguing with the restaurant’s bartender. The argument led to a fight. The bartender, an Azeri, managed to escape but later returned with some friends, all natives of the Caucasus, bearing knives, baseball bats and iron rods. In the ensuing brawl, two ethnic Russians were killed; nine others, including Russians and natives of the Caucasus, were injured.
Police detained several suspects at the site of the brawl, including those suspected of having committed the two murders. That did not stop the Chaika and other Caucasian-owned businesses from being attacked Friday and Saturday; owners subsequently fled Kondopoga.
The angry mobs behind the violence appeared to have been galvanized, in part, by a local web site, Kcity.ru, which posted an appeal to town residents Friday to meet at the town square Saturday afternoon to protest the knifing of the ethnic Russians.
On Saturday, about 2,000 people showed up at the square. Speakers included the leader of the nationalist Movement Against Illegal Migration, Alexander Belov, who demanded the expulsion of natives of the Caucasus lacking residence permits.
Police officers told Interfax that all Caucasus natives had left the town by Saturday. 
A Karelian Interior Ministry official confirmed Sunday that hundreds of natives of the Caucasus had been living in the town and that most of them had fled, while some had gone into hiding.
Saturday evening saw further attacks, mostly by young men and teenagers, on the Chaika restaurant and nearby kiosks and markets. 
It was only when police commandos arrived in Kondopoga from Karelia’s capital, Petrozavodsk, at 9 p.m. Saturday that the attacks subsided. The commandos dispersed the crowds, detaining more than 100 suspects.
Twenty-five of the suspects remained in custody as of Monday, Interfax reported, with a total of 109 having been detained. Local police and commandos patrolled the town’s streets.
Despite the scale of the riots, national television channels ignored Kondopoga in their news reports Saturday. On Sunday, the state-run Rossia channel showed footage of young men throwing rocks at Chaika in broad daylight and, later, images of the restaurant consumed by fire.
Also on Sunday, Karelia’s governor, Sergei Katanandov, weighed in on the ethnic violence, saying authorities were restoring order to Kondopoga and vowing to prosecute those who took part in the attacks. “We will not allow anyone to destabilize the situation in the republic,” Katanandov said.
The events in Kondopoga mark the first time an entire town has been deserted by natives of the Caucasus, who were forced to flee for their lives, and it could trigger similar disturbances elsewhere, said Alexander Verkhovsky, director of the Sova think tank.
On Monday, Chechen Prime Minister Ramzan Kadyrov voiced concern over the events in Kondopoga in an official statement, Interfax reported.
“Mass riots are underway in the Karelian town of Kondopoga, and a conflict between previously convicted drunk young men and a barman, a native of Chechnya, who made a remark to them, sparked them,” the statement reads, as reported by Interfax. 
“The mass riots that followed grew into an ethnic conflict, which shows clear anti-Chechen and anti-Caucasian attitudes.”
The statement also alleged that the local authorities had been inactive in dealing with the situation. “In this connection,” Kadyrov’s statement continues, “I state with all responsibility that should the Karelian authorities fail to find ways and methods of calming the situation, we will be able to find legal means that may bring the situation in compliance with the law … Those guilty should be punished, regardless of their origins.”

TITLE: Russia, Greece, Bulgaria Agree on Pipeline
AUTHOR: By Karolos Grohmann
PUBLISHER: Reuters
TEXT: ATHENS — Russia, Greece and Bulgaria agreed to end years of disputes on Monday and launch a long delayed trans-Balkan oil pipeline linking the Black Sea to the Aegean.
Russian President Vladimir Putin and Greek Prime Minister Costas Karamanlis told reporters the 700 million euro ($897.1 million) project would be signed by the three countries before the end of 2006. The deal ends 14 years of disagreements that have held back the project, widely seen as pumping cheaper Russian crude to the Mediterranean region and strengthening Moscow’s grip on the area’s energy market.
“Greece, Russia and Bulgaria agreed to sign a deal to back its construction within 2006,” Karamanlis said after a meeting with Putin and Bulgarian President Georgi Parvanov in Athens.
Putin said the pipeline, designed to bypass Turkey’s busy Bosphorus Straits, would provide a safe and efficient supply of energy resources. Tanker delays due to heavy traffic in the Straits are costing oil companies nearly $1 billion a year. “The result of this project will improve and enrich our ties,” Putin said through a translator. “This can be a driving force for our countries in the immediate and long term future.” For years, the three countries have disagreed on key issues, such as who would be responsible for building the pipeline, the ownership of the terminals and transit fees.
Around 155 km of the 285 km Bourgas-Alexandroupolis pipeline, which will eventually have a daily capacity of about 800,000 barrels, will pass through Bulgaria.
It will rival the new $4 billion Baku-Ceyhan pipeline from Azerbaijan to the Mediterranean that bypasses Russian soil and will pump 300,000-400,000 barrels per day of Azeri crude to world markets by the year-end, rising to a million bpd in 2008.
Russian officials say the Black Sea suffers environmentally from heavy tanker loads and that the Bosphorus cannot handle the growing volume. With rising oil prices, the financial appeal of the Bourgas-Alexandroupolis project has increased.
The pipeline will initially carry 10 million tonnes of crude a year from the Black Sea port of Bourgas to the north Aegean town of Alexandroupolis, reducing environmental risks from oil spills. Its capacity is designed to eventually reach 35 million tons about three years after its expected launch in 2009.

TITLE: Japanese Fisherman Charged
PUBLISHER: The Associated Press
TEXT: MOSCOW — Russian prosecutors indicted a Japanese fishing captain for allegedly poaching and illegally crossing a border, ITAR-Tass reported Monday.
The indictment came three weeks after the Russian coast guard seized Noboru Sakashita’s boat in a confrontation in which one Japanese crewmember was killed. 
Federal prosecutors could not be immediately reached to confirm the report that regional officials on the Pacific island of Sakhalin had completed their indictment against Sakashita and the case had been sent to court. 	
“The prosecutor’s office checked the investigators’ materials accusing [Sakashita] of illegal crossing of the Russian state border and poaching in Russia’s territorial waters,” regional prosecutor Vitaly Khatsylev was quoted as saying by ITAR-Tass. 
“The indictment has been endorsed; the court now will have to determine the degree of [his] guilt and pass its judgment.” 
The incidentook place in disputed waters near the southernmost of four islands claimed by both Japan and Russia.

TITLE: Defendant Denies Charges of Hazing
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Alexander Sivyakov, the army sergeant standing trial in the hazing case of Private Andrei Sychyov, denied the charges Monday and accused authorities of beating him until he confessed. 
Prosecutors say Sivyakov forced Sychyov, a first-year conscript at the Chelyabinsk Armor Academy, to squat for several hours and beat him last New Year’s Eve. The incident, prosecutors contend, left Sychyov with gangrene in his feet and legs; the conscript’s legs and genitals were subsequently amputated.
On Monday, Sivyakov offered a different version. Sychyov, like all the other conscripts, “went to bed at 3 a.m., and was unable to fall asleep for a half-hour because of conversations in the barracks,” Sivyakov told a military court hearing in Chelyabinsk, Interfax reported. “Then, at 7 a.m., on Jan. 1, he got up with the rest of the conscripts,” Sivyakov said.
Sivyakov said he had taken a lie-detector test but that he had not been shown the results. “They told me that either way I was going to prison,” he said, “but were I to admit to the charges, I would get only three years instead of eight. Under that pressure I incriminated myself, and on Jan. 30 I signed a confession.”

TITLE: Metals Oligarch Buys Up Daily Newspaper
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — Kommersant’s editor said Sunday that the sale of his newspaper to metals magnate Alisher Usmanov had been completed but the new owner had yet to send any representatives to the newspaper’s offices.
The sale nevertheless threatens to alter irrevocably the country’s media landscape by putting the country’s last independent-minded nationally-owned daily into the hands of a billionaire who is thought to be close to First Deputy Prime Minister Dmitry Medvedev and has a reputation of being a tough-talking negotiator.
It also highlights a broader Kremlin-backed strategy of national media buyouts by loyal businessmen and the state-owned Gazprom behemoth. After the takeovers, the coverage of the once independent-minded news organizations has become comparatively bland and toothless.
“We thought that after they took over all national television channels, the authorities would leave newspapers — which have a far more limited reach than television — in peace. We were mistaken,” said Oleg Panfilov, head of the Center for Journalism in Extreme Situations.
National newspapers that criticized the authorities — including Izvestia, Nezavisimaya Gazeta, Gazeta and Moskovskiye Novosti — have been snapped up by Gazprom or businessmen loyal to the Kremlin in recent years and adopted a more pro-Kremlin line in their editorial policy.
“I am afraid the same fate awaits Kommersant,” Panfilov said.
Some Kommersant journalists have expressed the same concern, but the newspaper’s editor, Vyacheslav Borodulin, suggested it was too early to tell.
Borodulin said Sunday that the acquisition of the Kommersant publishing house, which includes the daily business newspaper, had been completed, but several formalities might remain.
He also said that Usmanov’s representatives had not visited the editorial offices so far, contradicting a Kommersant reporter who said Thursday that Usmanov’s business team was visiting the offices.
Borodulin said no journalists had resigned or were expected to resign over the sale. As for the imminent departure of deputy editor Alexander Shadrin, Borodulin said that Shadrin first announced his intention to leave three months ago and that the decision was unrelated to Kommersant’s ownership.
While Borodulin’s remarks appeared to be an attempt to soothe fears about what might happen next at his newspaper, former Kommersant owner Boris Berezovsky seems to have changed his mind about the prudence of the sale to Usmanov.
“Regretfully, I am sure that the Kremlin has more influence on Alisher Usmanov than it could have on me, and this, naturally, could and no doubt will affect Kommersant’s independence,” he told Ekho Moskvy radio on Thursday from London, where he lives in asylum.
As news of the pending sale emerged last Wednesday night, Berezovsky praised Usmanov as a level-headed businessman who “doesn’t let political passions get the better of him.”
“Of all the people active in Russian business today, Usmanov is probably one of the best,” Berezovsky said by telephone.
Berezovsky bought Kommersant in 1999 and passed it over to his business partner Badri Patarkatsishvili earlier this year to shield it, he said, from Kremlin pressure.
Stanislav Belkovsky, a political analyst and one-time Kremlin insider, predicted that the only change to Kommersant’s editorial policy would be the promotion in its pages of Medvedev as the next president. He said Usmanov was close to Medvedev, and that the main aim of the purchase was probably to prepare Medvedev’s candidacy for the 2008 presidential election. Medvedev and Defense Minister Sergei Ivanov are seen as the leading candidates to win President Vladimir Putin’s blessing as his preferred successor.
Medvedev is the chairman of Gazprom.
Usmanov is the head of Gazprominvestholding, a Gazprom subsidiary that handles some of the parent company’s assets.
Usmanov, who has no known media experience, insisted last week that he was buying Kommersant for about $200 million as a private investor and for purely commercial reasons. He also said that the Kremlin had not pressured him to buy, and he would not interfere with editorial policy.
Gazprom has acquired and eventually tamed several independent-minded news organizations that criticized the Kremlin. The biggest takeover was of NTV television and other media outlets from Vladimir Gusinsky in 2001. Gazprom also owns Izvestia and Komsomolskaya Pravda.
Raf Shakirov, Kommersant’s editor from 1997 to 1999, said the newspaper’s sale and other recent press buyouts might look like purely commercial deals but were, in fact, steps in a Kremlin-backed strategy to suppress the independent press. “These deals are not random. They are part of a systematic process,” he said.
“Now, only foreign-owned publications like Vedomosti retain editorial independence, although I think that the authorities will try to look for ways to affect them,” he said.
Vedomosti is co-owned by Independent Media Sanoma Magazines — a Finnish group that is the parent company of The Moscow Times — The Wall Street Journal and the Financial Times.
Alexei Simonov, the head of the Glasnost Defense Foundation, a media freedom watchdog, said he did not expect any overnight changes at Kommersant. “Kommersant will lose its ironic and independent outlook and become a balanced publication in the eyes of its new owner,” Simonov said. “Its transformation, however, will take place gradually and not be noticeable to the daily reader.”
Shakirov said changes would only start emerging in about six months.
Panfilov dismissed Usmanov’s promise not to change Kommersant’s editorial policy. “We heard exactly the same assurances when new management was installed at NTV in 2001 and at Izvestia last year, only to see drastic changes in those media outlets within weeks,” he said.
Usmanov — an iron ore tycoon who is ranked No. 25 on Forbes’ list of richest Russians, with a fortune of $3.1 billion — has a reputation of being a tough businessman and negotiator. But it is unclear how his style will apply to his relations with the newspaper, metals analysts said.
“What is clear is he has not shown anything so far that distinguishes him as a person who will rally for civil freedoms such as the freedom of speech,” said Sergei Donskoi, a metals analyst with Troika Dialog.
Staff Writer Yuriy Humber contributed to this report.

TITLE: Prodigy Unveils Piano Concerto
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: The Fifth International Piano Festival beginning in St. Petersburg on Tuesday will present the first performance of the first piano concerto written by Alex Prior, a 13-year old singer and composer from the U.K. of Russian descent and a great-great-grandson of Konstantin Stanislavsky.
Prior’s musicianship and operatic voice have earned the musical prodigy nicknames such as “the little Mozart” and “the little Pavarotti.” 
“Music is my life. Good music is energy and I am, as a composer, giving it to the audience,” Prior said at a news conference in St. Petersburg on Monday ahead of the piano festival.
The first piano concertos by composers of different centuries will be performed on Thursday, the last day of the festival. Prior’s work, the “Petersburg” concerto, will represent the 21st century alongside Tchaikovsky’s Piano Concerto No.1 from the 19th century and Sergei Prokofiev’s Piano Concerto No.1 from the 20th Century.
The works will be performed by the philharmonic orchestra of the St. Petersburg State Academic Cappella, and soloists Nikolai Mazhara, Andrei Ivanovich, and Yekaterina Murina. The concert is conducted by Alexander Chernushenko.
Prior began composing music when he was eight and entered the London’s Royal College of Music a year later. 
Following the Beslan terror attack two years ago, Prior — then just 11 — composed a requiem to the children who died. 
“Prior’s compositions are the serious and powerful music of a mature musician,” Vladimir Logutenko, director of the festival, said on Monday.
“They are full of non-childish passions and emotions. Although he is very young, he is a very good student and a real Renaissance man. He has already absorbed all the best of Russian culture.”
Prior enjoys listening to Russian church and folk music, elements of which he used in his first piano concert.
The prodigy has also recently composed his first ballet, “Sir Gawain and the Green Knight,” and is working on a ballet based on “The Jungle Book” commissioned by The Moscow State Ballet.
“While creating music the composers use their hearts and brains — music is the heart of life, and every note is its pulse,” Prior said. “A true musician completely enjoys his or her profession, and they are not musicians if it is just a job for them.” 
Prior has won several junior singing competitions and performed at the world’s largest concert halls, such as the Royal Albert Hall, the London Arena, the Millennium Dome, the Kremlin, Carnegie Hall, Hitomi Memorial Hall in Tokyo and the Royal Opera House. 
The three-day piano festival, dedicated to the 250th anniversary of the birth of Mozart and to Dmitry Shostakovich, whose centenary is celebrated this year, is held in St. Petersburg with the support of UNESCO.
Each day of the festival has a different program that combines the performance of classical concerts with modern classical compositions. 
The festival’s opening concert on Tuesday will present the concerts by Mozart and Shostakovich along with a composition by his student Galina Ustvolskaya. A new arrangement of Shostakovich’s Symphony No. 15 will also be performed.

TITLE: IN BRIEF
TEXT: Man Dies in Explosion
MOSCOW (AP) — A gunman fleeing a police traffic stop in Ingushetia died after an explosive device he was carrying — possibly a suicide bomber’s belt — detonated, a regional police official said Saturday.
Another man was shot and wounded during the Friday evening incident — the latest in a series of violent events and attacks on police in Ingushetia.
Ingush Interior Ministry spokesman Nazir Yevloyev said police had stopped a small sedan carrying the two men near the region’s main city and were trying to search it when one of the men bolted from the car toward a nearby field. Police returned fire before an explosion killed the man. 

Court Detonated
MOSCOW (AP) — A court building in Novosibirsk was badly damaged by an explosion that authorities said occurred after assailants poured gasoline through holes drilled in window frames and set it on fire, according to media reports Sunday.
Nobody was hurt in the explosion, which occurred at night, news agencies and television networks reported, citing local law enforcement agencies. 

Helicopter Down 
TBILISI, Georgia (AP) — South Ossetian officials said their forces shot down a Georgian government helicopter that invaded the breakaway province’s airspace Sunday — but Georgian military officials denied the claim.
South Ossetian government spokes-woman Irina Gagloyeva said the Georgian Interior Ministry helicopter was downed after its crew failed to respond to requests that they land or change their route. She said the fate of the crew was not known.

TITLE: Teachers Still Waiting for Promised Higher Wages
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW — When President Vladimir Putin vowed to inject billions of rubles into education this school year, teachers across the country held their breath.
The education system has languished in the post-Soviet era. Seeking to address declining standards, the government last year identified education, along with public health, housing and agriculture, as one of its top-priority national projects.
Under the plan, teachers are entitled to a 26 percent raise. Those who take on homeroom duties — assuming primary responsibility for a group of students and acting as a liaison between parents and the school administration — receive an extra 1,000 rubles ($37) per month.
As the new school year got under way Friday, however, many teachers and school administrators — especially outside of Moscow — said Putin had yet to make good on his promise.
“The project looks great on paper, but in reality we haven’t seen much benefit,” said Yelena Vyazovskaya, principal of School No. 6 in Anna, an impoverished town of 20,000 in the Voronezh region.
In Vyazovskaya’s school of 300 students, only homeroom teachers have received extra money.
“Even that small amount is a significant raise for our teachers,” Vyazovskaya said. “But the people in charge of the national education project should be trying to increase the social status of teachers and to revive the prestige of our profession,” Vyazovskaya said.
Education and Science Minister Andrei Fursenko told reporters in the Far East last Wednesday that he was pleased with the implementation of the national education project.
“We have seen how little is needed to get the education system moving forward again,” Fursenko said, Interfax reported. “Now we have to make good on the promises we have made.
“The most tangible result of the national project is financial support,” Fursenko said in a statement released Thursday. “But the other aspect of the project — raising the status of teachers, [encouraging them] to take greater responsibility for their work and [to promote] kindness and attention to the children — is far more important than what you can put in your pocket.”
Vyazovskaya had a different opinion. “It’s always nice when someone says ‘Thank you,’ but considering our financial situation, I’d prefer for an envelope with cash in it to accompany the kind words,” she said.
Moscow schools are better off than their counterparts in the regions, but their relative health owes more to the policies of the city government than the national education project, educators in the capital said.
“I don’t know if it’s a result of the national project or not, but we get raises on a regular basis,” said Irina Khakhamovich, vice principal of elementary education at School No. 1278 in central Moscow, as she greeted first-graders on the first day of school last Friday.
City Duma Deputy Yevgeny Bunimovich, who also teaches mathematics at the Moscow Experimental Gymnasium, said educators in the city had benefited less from the national education project than their counterparts in the regions.
“The most productive component of the national project is the additional money for homeroom teachers,” Bunimovich said. “And most of these teachers have received the money.”
At least 10 percent of Moscow’s homeroom teachers, however, have not received the salary increase because of bureaucratic snafus, Bunimovich said.
Some 900,000 homeroom teachers nationwide are entitled to the extra money. The Finance Ministry has allocated 7.7 billion rubles specifically for this purpose, yet at least 80,000 homeroom teachers, 7 percent of the total, have not received the money. 
Putin publicly chastised Fursenko in April for failing to deliver the much-anticipated raises for homeroom teachers.
Yury Karasyov, a history teacher at Lyceum No. 2 in Kazan, is one of the homeroom teachers who did not receive the raise.
“We were shocked to find out that we do not qualify for the raise — as if we work less than other teachers,” Karasyov said.
“As a homeroom teacher, I was counting on the extra money,” he said. “The current payment of 100 rubles isn’t enough to compensate for all the effort we put in.” Karasyov earns 4,000 rubles ($150) per month, and gives private lessons to make ends meet.
Under the national project, the government plans to spend 48.6 billion rubles on education in 2007, an increase of 66 percent from this year.
Six billion rubles were allocated this year to install computers in 28,500 schools across the country and to hook them up to the Internet.
Next month, the government will award 10,000 teachers 100,000 rubles each in recognition of their outstanding job performance. Three thousand schools will receive 1 million rubles each as a reward for their innovative approaches to teaching.
Karasyov entered his lyceum in the innovative teaching competition, but did not qualify. Last week, however, he learned that he had been chosen to receive the 100,000 ruble award for outstanding teachers.
“Competitions like these bolster me professionally,” Karasyov said. “They have given me a better understanding of how my career should develop.”
Two of Karasyov’s pupils also won prizes for their knowledge of history.
Bunimovich noted, however, that the procedure for entering the competitions was so complicated that many schools had opted not to take part.
Schools in Moscow have received no money under the national education project for new computers or Internet access because the city had already addressed this need, Bunimovich said.
“This money could be spent on new software and teacher training, but the Finance Ministry doesn’t seem terribly interested in these things,” he said.

TITLE: Putin to Make Historic Visit To Cape Town, South Africa
AUTHOR: By John Chiahemen
PUBLISHER: Reuters
TEXT: JOHANNESBURG, South Africa — President Vladimir Putin arrives in South Africa this week on a visit many veterans of the anti-apartheid struggle believe is long overdue.
Putin will be the first Kremlin leader to visit South Africa when he arrives in Cape Town on Tuesday, despite Moscow’s active support of the country’s long battle to end white rule.
South African Intelligence Minister Ronnie Kasrils, one of the country’s best-known white radicals and communists, recalls with nostalgia his own guerrilla training in Odessa in 1964, when he was 26.
“One must hand it to the former Soviet Union,” Kasrils said in an interview. “They were really the main staple support for the ANC and South African liberation.
“They were really fantastic in terms of military training and in terms of weapons, in terms of food and the like.”
Kasrils was among the first group of 200 guerrillas the then-banned ANC, or African National Congress, sent to Russia for military training. Many senior members of South Africa’s current government, including President Thabo Mbeki, were to follow.
Due mainly to the Soviet collapse, however, relations between Pretoria, South Africa’s administrative capital, and Moscow took a long time to warm after Nelson Mandela led the ANC to electoral victory in 1994, marking the end of apartheid.
Mandela in particular was rather cool toward Russia, and did not visit Moscow until just before he retired in 1999.
“The ANC government initially saw the new Russian government as a reactionary one,” said Nel Marais, analyst at Executive Research Associates, a Pretoria-based think tank.
Russia, for its part, appeared more preoccupied with building relations with Europe and China.
But since the end of apartheid and the fall of communism, the two states have evolved along parallel lines as democracies struggling with social problems but blessed with mineral wealth that helped them get back on their feet.
Putin comes to South Africa for talks about trade between two of the world’s biggest emerging market economies.

TITLE: Two Years After Siege, Beslan Tries to Cope
AUTHOR: By Yana Voitova
PUBLISHER: Special to The St. Petersburg Times
TEXT: BESLAN, North Ossetia — School No. 1 stands in ruins. People still come from around the world to place fresh flowers and bottles and jars full of water on the school grounds.
Two years ago Friday, terrorists seized School No. 1 and held more than 1,100 children, parents and grandparents hostage for three days in sweltering heat. Deprived of food and water, the hostages were reduced to chewing on leaves and sucking wet rags for moisture.
On the third day of the crisis, federal troops stormed the school in a hail of gunfire — the school was destroyed by explosions and fire. To date, 332 people have died as a result of the siege.
As Beslan prepared to remember its dead, survivors of the terrorist attack and relatives of the victims traveled to Moscow to castigate authorities for what they consider a sham investigation into the events of Sept. 1-3, 2004, The Associated Press reported.
“We have absolutely no faith in the authorities,” activist Lyudmila Pliyeva said Wednesday. “They are not letting us find out the truth. Why did our children burn to death? Why did they get shot? Why were no negotiations held?”
Not all residents of Beslan are eager to uncover the truth, however. Many have returned to their normal routines. Their children attend new schools. And they are trying to forget what happened two years ago. Many children, in particular, are trying to erase the terrifying memories.
Georgy Farniyev sat directly under a bomb for two days in the school’s gymnasium. Later, his photo was broadcast around the world — the boy with raised hands crossed behind his head, and the bomb looming over him.
This year, Georgy will enter sixth grade. He likes his new school. Focused and very serious, he loves helping his mom around the house, doing the vacuuming and feeding his favorite dog, Rex. Georgy once wanted to become a soldier, but now, having seen what war is like, he has changed his mind.
“I’m not a hero,” Farniyev said. “I simply ended up under the bomb. I didn’t cry, because I didn’t think about what was going on.”
He recalls he just wanted to get home as soon as possible to be with his mother and grandmother.
“But now I try not to remember what happened two years ago. I never talk about those days with my friends who were also at the school with me,” Georgy said.
During the two years since the siege, two groups — Mothers of Beslan and Voice of Beslan — have held independent inquiries into the events. Neither group is satisfied by the results of the government’s investigation.
“All of the changes made to the committee investigating the Beslan attack are a continuation of the game,” said Ella Kesayeva, who heads Voice of Beslan. “We were eventually told that we had been right on many of the issues. But we knew that anyway.”
In mid-August, Prosecutor General Yury Chaika fired the prosecutor in charge of the Beslan investigation and replaced him with Ivan Sydoruk, who pledged to extend the investigation until the end of the year.
Mothers of Beslan and Voice of Beslan accuse federal prosecutors of shielding security officials from blame and of failing to investigate the attack thoroughly.
“We want to know who was responsible for what happened,” Kesayeva said. “The lies must stop. As we remember the dead we will not hold demonstrations, but this does not mean we will be silent. We must know the truth.”
Nurpashi Kulayev, the only terrorist captured by the authorities, was sentenced to life in prison in May after a lengthy and scandal-plagued trial. Three local police officials still face charges of negligence for allowing the terrorists to travel from their camp in neighboring Ingushetia to Beslan in broad daylight.
Less than two months ago, the Federal Security Service claimed it killed Shamil Basayev, who masterminded the Beslan attack.
“Couldn’t they have killed him earlier, two years ago, when he was just planning to murder our children?” Kesayeva said. She lost two nephews in the siege, and her daughter was wounded.
Members of Mothers of Beslan are also determined to discover the truth.
“Just because they sentenced Kulayev, this doesn’t mean that the guilty parties have been punished,” said Viktor Yeseyev, who lost his son, who would have been 40 this year, in the attack.
“The Beslan police officers are still on trial, but this isn’t enough,” he said. “Why hasn’t anyone addressed the main question: How did armed terrorists get into Beslan? Why did no one stop them?”
Yury Savelyev, a member of the parliamentary commission investigating the attack, recently released a report titled “Beslan: The Truth About the Hostages.” The report is based on the testimony of former hostages as well as photo and video evidence. Savelyev’s conclusions differ from those found in the report released by a commission headed by Federation Council Deputy Speaker Alexander Torshin.
Savelyev’s report claims the first and second explosions in the school gymnasium, where the hostages were held, as well as the fire, were caused by flame-throwers and grenade launchers fired by commandos positioned in buildings across from the school.
The report also maintains that reliable information about a terrorist attack in Beslan was available at least three hours before the school was seized.
Despite such claims, 53 percent of Russians believe the authorities did everything possible to rescue the hostages in School No. 1, according to a recent poll conducted by the Levada Center. Just 34 percent held the opposite opinion. Yet, only 5 percent of those polled said the authorities had told the full truth about the attack.

Staff Writer Nabi Abdullaev contributed to this report.

TITLE: Remembering the Dead in Beslan
AUTHOR: By Fatima Tlisova
PUBLISHER: The Associated Press
TEXT: BESLAN, North Ossetia — Children, weeping parents and somber-faced officials commemorated the second anniversary of the Beslan school attack over the weekend, attending tearful ceremonies at the burnt-out shell of the school Friday and observing a moment of silence Sunday.
In Moscow, meanwhile, riot police scuffled with a small group of demonstrators who were commemorating the day with a gathering near the headquarters of the Federal Security Service, detaining about a dozen and dragging them into buses.
In Beslan, students in white shirts released balloons at about 1 p.m. — the time a series of still unexplained explosions launched the chaotic and deadly end of the ordeal that began more than two days earlier when Islamic militants seized the town’s School No. 1, taking more than 1,100 students, staff and parents hostage. A bell tolled, followed by 10 minutes of silence, and relatives and friends of victims made their way to Beslan’s widely expanded cemetery to visit the graves of their loved ones.
For the third straight day, mourners filed through the blast-scarred, roofless school gymnasium that stands as a monument to the victims who were held there by the attackers, lighting candles and placing flowers or bottles of water — a gesture meant to symbolically quench the thirst of victims who were denied water during the ordeal in the sweltering room.
The third day of remembrance ceremonies in Beslan coincided with the official Day of Solidarity in the Struggle against Terrorism, which was designated by President Vladimir Putin and lawmakers last year.
Events were organized to mark the day in cities nationwide, and Putin recalled the Beslan raid — which came days after bombings on two airplanes and a Moscow street killed 100 people — during a meeting with Russian Orthodox Patriarch Alexy II.
“Our meeting is taking place on the second anniversary of the monstrous crime of terrorists in Beslan,” Putin said in televised comments. “The murder of innocent women and children shook not only our country but the whole world, and this tragedy, the inconsolable grief of the parents who have lost the dearest thing — their children — will forever remain our common pain.”
The official inquiry into the attack concluded that all but one of 32 attackers were killed, and the sole survivor — Nurpashi Kulayev — was sentenced to life in prison in May. But a study conducted by a dissident member of an official parliamentary commission, Yury Savelyev, has implicated the authorities in many of the deaths.
Security agents on Saturday briefly seized about 200 copies of Savelyev’s report and detained a courier bringing them as he arrived at the airport outside of Beslan. He was later released and given a document by the Federal Security Service that said the report was seized “for clarification,” said Maria Letvinovich, a local activist and reporter. The copies were returned after about three hours.
Ella Kesayeva, who heads the activist group Voice of Beslan, said Savelyev’s findings coincided with their own. The group appealed Kulayev’s conviction and sentence to the Constitutional Court on Friday, saying the court that heard the case ignored crucial details about the seizure.
In Moscow, police scuffled with a group of human rights activists, opposition politicians and other demonstrators who gathered near the headquarters of the Federal Security Service in hopes of placing flowers in memory of Beslan victims at a monument, some with posters blaming the authorities for deaths there.

TITLE: EU Expects Energy, Trade Talks Soon
AUTHOR: By David Brunnstrom
PUBLISHER: Reuters
TEXT: LAPPEENRANTA, Finland — The European Union expects to be able to launch negotiations with Russia on a new cooperation agreement covering energy, trade and human rights after a summit with Russia in November, the Finnish EU presidency said on Saturday. 
EU foreign ministers, meeting in a Finnish town close to the Russian border, welcomed a draft negotiating mandate for the enhanced pact, intended to replace a Partnership and Cooperation Agreement due to expire at the end of next year. 
“It seems quite clear we can finalize the mandate — there were no substantial differences,” Finnish Foreign Minister Erkki Tuomioja told a news conference. “The negotiations then will be a prolonged process, naturally starting after the summit, but from the EU point of view, we have a clear understanding of how we want to proceed.” 
The executive European Commission has proposed a comprehensive pact covering trade, human rights and democracy, the rule of law and, crucially, energy — a central concern. 
Russia supplies one-quarter of the EU’s gas, and worries were sharpened when Moscow briefly cut off supplies to Ukraine, affecting other European clients, in January in a price dispute. 
Russia has rebuffed EU pressure to sign up to an energy charter treaty and open its pipelines to third parties. 
EU member Poland was also angered by a Russian-German deal last year to build a gas pipeline under the Baltic Sea, bypassing Poland and the Baltic states. 
The European Commission hopes negotiations with Russia will start at the end of this year or early next. The present pact will continue in effect until the new one is ratified. 
Tuomioja said he did not expect antagonistic talks. 
“There will be many issues where we will enter into very detailed and complicated negotiations, but I have a sense, a feeling, that the common interest is there,” he said. 
He said the negotiations should not take long, but ratification by all 25 EU members would “inevitably take time.” 
While officials say there is no obvious EU disagreement on the new framework, former communist East European countries, led by Poland, continue to regard Moscow with deep suspicion. 
Polish Foreign Minister Anna Fotga said Warsaw was concerned about energy security. “We are too much dependent on one source of energy, on one direction of energy,” she said. 
The Czech Republic’s Cyril Svoboda called the mandate “more or less” acceptable, but urged a “very strong and tough” negotiating stance. 
EU External Relations Commissioner Benita Ferrero-Waldner said an enhanced trade pact would be part of the new agreement once Russia entered the World Trade Organization. 
“What we want is a relationship based on reciprocity and on the same principles and rules,” she said. 
Tuomioja said the EU wanted to see enhanced interaction with Russia, including cross-border cooperation, and that there should be more student exchanges, which lagged those with China. 
“We should not regard Russia merely as a challenge or a problem, but ... as a positive partner,” he said.

TITLE: City Hall Small-Firm Priorities Questioned
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: A new scheme from City Hall, aimed at helping the city’s small enterprises, has been slammed by a local expert.   
The Committee for Economic Investment, Industrial Policy and Trade (CEDIPT) signed ten programs to support small business, last Thursday.
“The programs aim at supporting the small firms operating in priority industries — industrial production, housing services, high-tech and innovation, retail and servicing — through a differentiated approach to small enterprises,” Sergei Izotov, press secretary of CEDIPT, said Friday in a statement.
Small enterprises will be divided into groups — start-ups, developing, stable and crisis firms — each of them receiving special programs of support.
The Start Program designed for start-ups includes management courses and assistance in preparing a business plan and documents.
Any city resident may apply for the program and get all business registration fees returned to them.
The Business Incubator Program provides young and developing companies with cheap office space for up to five years.
Those companies with collateral can apply for a commercial loan. The city budget will subsidize lower interest rates and cover some other expenses, if a small enterprise takes a loan to buy-out a piece of property.
Similarly, the city budget will contribute towards some of the expenses incurred acquiring equipment through leasing schemes.
Depending on the type of business, small companies will get cheap access to city exhibition facilities. Export companies will receive contributions towards the cost of certification.
The Financial Outsourcing Program will provide accounting services to small companies based in business incubators and to crisis firms, which can also apply for audit services.
Next year a venture fund will start providing support to innovative companies that will get access to the Russian Venture Fair and educational seminars.
Crisis companies can apply for the Readjustment Program, postponing tax payments and rent fees.
Nevertheless, a local expert expressed doubts about how the programs were focused. 
“The government says that it will cooperate with ‘white business’ only, but most small firms have to use gray schemes, because economic conditions and the tax system prevent them from acting in any other way,” said Igor Yegorov, director of the St. Petersburg office of the U.S. Russia Center for Entrepreneurship.
Another concern is related to the criteria used to select priority industries.
“The market itself should indicate priority industries, not the city government. They suggest developing industrial production and high-tech, but are there the necessary conditions for development? According to the statistics, small companies do not operate in these industries,” Yegorov said.
While large, high-tech companies can afford training centers, small business does not have the resources for such things, Yegorov said.
Another problem is that large, monopolistic buyers are not interested in ordering products from small companies. “You can hardly create a company, if there is no market for you to sell the products,” he said.
On the other hand, monopolistic service providers put pressure on small companies to increase their tariffs.
“Initiating such programs without first solving more general problems related to infrastructure is premature. Though such programs will only help a few small companies solve a few particular problems,” Yegorov said.
As for credit mechanisms, he noted that small companies are rarely able to provide collateral and usually use their own resources for their development.
In the United States, he said, the Small Business Administration insures up to 80 percent of commercial loans taken out by small business, which means they require much less collateral to begin with.
According to the CEDIPT, 12 percent of small businesses in Russia are based in St. Petersburg. Over 700,000 people are employed in small businesses in the city.
Small business accounts for 20 percent of regional production output and 25 percent of tax payments. Last year small business turnover was reported at 314.229 billion rubles ($11.7 billion; 29 percent of total business turnover).
According to the CEDIPT, 52.9 percent of small companies operate in retail and catering, 11.3 percent operate in industrial production and 10.8 percent operate in construction.
“Small business is economically more significant in other countries. However, the city administration, especially in recent years, suffered from long-sightedness — seeing nothing but large investors,” said Alexei Shaskolsky, head of assessment department at Institute for Entrepreneurial Issues.
“Small business is mainly represented in retail and catering. Its share of high-tech industry leaves much to be desired,” Shaskolsky said.
He indicated that, despite winning the tender to set up Special Economic Zones, the city “has very few viable small companies that can use such the advantages they provide.”
“Economically, the city has to develop from scratch, from small business. Otherwise to localize car production, to order components from Western producers, local companies will find impossible,” Shaskolsky said.

TITLE: Debt Rating Raised by Standard & Poor’s
AUTHOR: By Svenja O’Donnell
PUBLISHER: Bloomberg
TEXT: Russia’s foreign and local currency debt ratings were raised one step by Standard & Poor’s after the government repaid the entirety of its debt to the Paris Club of creditor nations.
The foreign currency rating was lifted to BBB+, the third-lowest investment grade and the same level as Hungary and Poland, S&P said in a statement today. The outlook is stable.
“Russia’s economy is still benefiting from the global oil price boom,” Standard & Poor’s credit analyst Moritz Kraemer said in the statement. “The upgrade is based on ongoing improvements in Russia’s foreign exchange reserves coverage and the strengthening general government balance sheet.”
Russia on Aug. 21 completed the repayment of its entire debt to the Paris Club of creditor nations. Russia’s foreign and local currency debt ratings were raised one step by Fitch Ratings on July 25. The ratings were lifted one notch to BBB+, the third-lowest investment grade at the same level as Hungary and Poland.
The world’s second-biggest oil exporter is heading for an eighth year of economic growth, after defaulting on more than $40 billion of domestic debt in 1998. Gross domestic product grew 6.3 percent in the first half of the year, compared with 5.4 percent in the same period a year earlier, Prime Minister Mikhail Fradkov said at a government meeting Aug. 17.

TITLE: IN BRIEF
TEXT: Drop in Deals
ST. PETERSBURG (SPT) — The volume of short-term deals closed on the St. Petersburg Stock Exchange in August is estimated at 490 million rubles ($18.3 million) compared to the 1.13 billion rubles ($42.2 million) in July, news agency Prime-TASS reported Friday.
Nearly 270 futures contracts on Brent oil and euro-dollar-ruble cross rates were closed last month compared to the 12,303 contracts the month before.

TITLE: Chubais Hails Powerful Trading
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — Electricity chief Anatoly Chubais on Friday hailed the lifting of restrictions on some wholesale prices as a “new era” for the power industry, but warned that severe shortages were likely to cause restrictions on electricity usage this winter and for some years to come. 
Chubais, CEO of Unified Energy Systems, said a severe emergency like the May 2005 blackout in Moscow could scupper the government’s reform program for the industry altogether. 
Small volumes of electricity began trading Friday on the free market under new regulations approved by Prime Minister Mikhail Fradkov on Thursday. 
“This is the kind of decision that moves the country forward,” Chubais told a packed news conference.
The new rules allow wholesale contracts for commercial users to be set at prices other than those set by the government, but currently only affect the small proportion of electricity output not covered by existing long-term contracts. 
Up to now, the state has set all electricity tariffs. The government will continue to set electricity prices for domestic users. Market-based electricity means energy can be traded through long-term contracts, bought short-term on the spot, or on the one-day-ahead or real-time markets.
Electricity could also be sold through futures contracts, Chubais said.
Under the government’s electricity reform plan unveiled in June, $90 billion will be invested over the next decade to modernize the country’s aging electricity generation plants and power grid.
Chubais admitted that the reforms had been seriously delayed, however.
“To be frank, we dragged on with reforms and lost two years. We should have had all these trillions two years ago,” he said, referring to the government investment announced in June. 
He also sternly warned that the power industry was in such a dire state that it might not survive the reform. This winter “we will enter conditions of heavy energy deficit,” he said.
Dozens of regions will also face brief shortages in the summer, Chubais said.
Over the next two to three years, the chances of power failures will be high, and an “unprecedented” emergency cannot be ruled out, Chubais said. Most commercial users seeking new connections will likely be refused, he said.
In June, Industry and Energy Minister Viktor Khristenko said that 90 percent of businesses seeking a new power connection in 2007 would not get one, since 46 percent of the country’s generators have exceeded their life span and the grid is overloaded.
But some industry analysts said the reform plan was still very cautious. The state’s withdrawal from electricity price regulation is already installed as a slow retreat, rather than a clean break, said Lauri Sillantaka, an analyst with Troika Dialog. “At first, it will be very, maybe too, cautious,” he said. Under the new market system, power plants commissioned after Jan. 1, 2007, will be allowed to regulate their own tariffs. The plants currently in operation will have their prices liberalized only gradually.
From next year, the market rather than the government will set some electricity prices. In 2007, 5 percent of power consumption will be liberalized, and, from 2008, 5 percent to 15 percent will be put on the market each year. 
State-regulated prices are to rise by 10 percent next year, climbing a further 9 percent in 2008 and 8 percent in 2009.

TITLE: End in Sight for Tax On Foreign Aircraft Imports
AUTHOR: By Alex Nicholson
PUBLISHER: The Associated Press
TEXT: MOSCOW — The Transportation Ministry will propose cutting or scrapping import duties on foreign aircraft, a spokeswoman said Friday, a day after the prime minister called for overhauling flight safety standards for the country’s aging civilian air fleet and airports. 
A proposal to change the unpopular 20 percent duty on imported foreign aircraft was to have been submitted to the government later Friday, a ministry spokeswoman said, speaking on condition of anonymity because the proposals had not yet been submitted.
The ministry is hoping to have the tax eliminated altogether, she said. 
Aviation experts have said the import duty has put Boeing and Airbus planes out of reach for cash-strapped airlines, forcing them to buy aging foreign planes or domestic aircraft. In the past, only national flag carrier Aeroflot and private carrier Transaero have been given state breaks to purchase new foreign jets. 
The proposal also calls for building additional runways at 12 airports, including Moscow’s Sheremetyevo and Domodedovo airports and St. Petersburg’s Pulkovo Airport, the ministry spokes-woman said. More than 400 people have died in the past year in a series of airline crashes involving the airline industries in Russia and other former Soviet republics, prompting government officials to call for better safety standards. 
Prime Minister Mikhail Fradkov on Thursday told a Cabinet meeting on flight security that Russia should not rely solely on new foreign planes, but needed to quickly reform its struggling aviation sector and accelerate homegrown production. 
Despite a substantial production capacity, Russian factories produced just a handful of civilian aircraft last year, while domestic airlines imported 20 used foreign jets. In total, 200 foreign aircraft are used by Russian airlines, Vedomosti reported Friday. 
The country also lacks an affordable leasing system that would allow companies to acquire new Russian planes, meaning companies typically chose instead to buy older foreign or domestic jets. 
In a bid to boost domestic production, the government is pushing ahead with the creation of a national aircraft holding company to unite the country’s civilian and military producers under one corporate roof. The United Aviation Corp. has been promised hefty state funding and will be 75 percent controlled by the state. 
Last month, a Tu-154 jet belonging to Pulkovo Airlines crashed in Ukraine after encountering a storm, killing all 170 people aboard. 
In July, an Airbus A310 belonging to S7 skidded off a runway and burst into flames in the Siberian city of Irkutsk, killing 124 people. 
In May, an Airbus A320 belonging to the Armenian airline Armavia crashed into the Black Sea in rough weather while trying to land in the resort city of Sochi, killing all 113 people aboard.

TITLE: Khristenko’s Son the Overseer
PUBLISHER: The St. Petersburg Times
TEXT: Vladimir Khristenko, son of Industry and Energy Minister Viktor Khristenko, has been named chairman of the supervisory board of Czech industrial valve manufacturer MSA, Kommersant reported Saturday.
The metals group Chelyabinsk Tube-Rolling Plant, or ChTPZ, announced Friday that Khristenko had been appointed head of the supervisory board of MSA, its first foreign asset. 
The Chelyabinsk-based company also revealed that the 25-year-old Khristenko headed up the analytical department of MeTriS, its metals trading arm, following his graduation from the Higher School of Economics in 2003.
In this capacity, Khristenko spearheaded the metals group’s hunt for foreign assets. Arkley Capital, which manages ChTPZ’s assets, acquired 100 percent of the stock in MSA.
But market analysts said both the appointment and the timing of the announcement may have been driven by factors beyond the younger Khristenko’s participation in the search for foreign assets. 
News of Vladimir Khristenko’s affiliation with ChTPZ is likely to boost investor interest in the upcoming, hotly anticipated IPO of the group’s Chelyabinsk Zinc Plant, which is the country’s No. 1 zinc producer, DMB Capital’s Timothy McCutcheon told Kommersant.

TITLE: Shuvalov Shipped In to Sovcomflot
PUBLISHER: Bloomberg
TEXT: MOSCOW — Sovcomflot, the country’s largest shipping company by tanker capacity, named Igor Shuvalov, an adviser to President Vladimir Putin, as its board chairman and reported a 43 percent increase in first-half profit.
Net income rose to $86.1 million from $60.2 million in the year-earlier period, Sovcomflot said in a statement on its web site. Sales rose 25 percent to $246.3 million, under international accounting standards.
Shuvalov, a deputy head of the presidential administration and adviser to Putin on Group of Eight meetings, was elected chairman at Thursday’s board meeting, the shipping company said.
Putin has been bringing key industries under tighter state control as he seeks to create globally competitive national companies in areas such as energy, metals and transport.
Sovcomflot boosted the use of its tankers by 10 percent in the first half, the company said in the statement.  It also said it paid down debt in the period, without giving any figures.

TITLE: Local Lawyer Prefers ‘Moscow Style’ in Business
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: At 21, having only just graduated from university, Maksim Aronov fulfilled his dream — he started his own business. Five years on and he is the director of the Delovaya Konsultatsia group, a thriving legal consultancy. 
Aronov has not always been obsessed by business-related matters, however. In his childhood in 1980s Leningrad he enjoyed playing football, studied at music school and was keen on history and chemistry. 
It was only at high school that he became aware of his legal destiny. “I’ve always enjoyed studying history and my favorite historical period was the origin of civil law at the time of the Roman Empire,” he said. 
In 1996, Aronov entered the law faculty at the North-Western Academy of Civil Service and, during his fourth year, started working as a lawyer’s assistant at the law company Maxima. 
“In fact, I did the work of a courier. I had to deliver different papers to different institutions. There were always long queues of people but I soon understood how to work with it. I could do everything very fast and it soon became very boring,” Aronov said. 
Within six months he was hired as a lawyer by a company specializing in engineering systems. 
“I was the company’s lawyer, gained great experience in business matters, and soon felt that I was ready to start my own business,” he said. 
In 2001, Aronov started a legal firm and for the first time began work on his own. 
“I had no partners nor employees nor enough work experience — I worked alone. At the time I took all the orders I got, even the cheapest ones. It subsequently helped me to choose what I liked doing and focus on specific topics,” he said. 
Within a year, Aronov found a business partner and the company staff grew from one to seven people. The two partners worked together until the end of 2004 when there was a difference of opinion concerning the direction the company should take. 
“I prefer an aggressive style in business. Sometimes it is called the Moscow style and, of course, it is not liked by everyone,” Aronov said. 
Aronov began to restructure the company he owned. In his opinion, a good legal firm cannot take on all kinds of different cases — it needs to be specialized. Aronov decided to build a holding of four companies – the Center of Insurance Compensations, the First Regional Consulting Office, the Legal Center for Housing Cooperatives and the Center of Approvals. 
Having collaborated with a number of Russian and foreign companies, Aronov believes there is great potential for the development of business in Russia.
 “The policy conducted by President Putin is more stable than Yeltsin’s. Thanks to economic growth and better protection of civil rights and freedom, businessmen are not afraid of putting money into Russia and the amount of foreign investment has risen significantly,” he said.
As a member of the political party United Russia, Aronov runs the Legal Center for Housing Cooperatives as a social project. The center has three offfices offering free legal advice, as well as assisting the Moskovsky regional administration in the implementation of reform to communal services. 
Aronov is also vice-chairman of United Russia’s Commission of Accomplishment, House-Building and Land Tenure in St. Petersburg. 
“The communal services reform, which is currently being implemented, demonstrates how far our city and country have come,” Aronov said. 
“The sphere of communal services is one of the most outdated and inefficient industries in the Russian economy. And by improving it the country is on the right track and we help it to develop further.”
A top manager, who runs a holding of twenty people, Aronov said that he always looks for creative employees. 
“You need to be creative to be a good lawyer. And although it is always good to hire a professional with work experience, sometimes young creative people can be more efficient than their more experienced counterparts,” he said. 
Aronov has been running Delovaya Konsultatsia for the last five years and is now focusing on investment projects and starting an investment trust. 
“We are only going to render services in St. Petersburg. Although Moscow is an interesting city, I think there are more business opportunities in St. Petersburg right now,” he said. 
Aronov has always enjoyed taking risks and thinks of life and business as an interesting game. 
“As a child, I liked to play strategic computer games where you have to defeat your competitors. So, now I keep doing the same in business,” he said. 
After a busy day’s work Aronov likes to listen to music. He got hooked on hip-hop when he was a teenager and even worked as a DJ at the disco. Now Aronov also listens to classical music and jazz, likes to read Boris Akunin and is keen on Antonio Gaudi’s architecture.
“If you want to succeed you need to believe in what you are doing but also have common sense and a good business plan,” he said.

TITLE: St. Pete Touts Itself as a Detroit in the Making
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: As the world’s car giants lined up to show their wares to the country’s driving public at the Moscow Auto Show last week, it is St. Petersburg that has been making the running — attracting General Motors, Nissan and Toyota to set up shop in the city. 
Governor Valentina Matviyenko’s administration has been eagerly touting the city as a Russian Detroit in the making, and foreign car executives have returned the compliment, singing the praises of the city and its leadership.
“You need to walk like you talk at every step, and Governor Valentina Matviyenko’s team walks like it talks,” General Motors executive Warren Browne said at the city’s recent international economic forum. “A positive, pro-business, get-the-job-done kind of attitude” was the main reason GM chose St. Petersburg, President Vladimir Putin’s hometown, for its new assembly plant, Browne said.
Other executives joined the love-in, with Nissan executive vice president Carlos Tavares saying Matviyenko’s administration had “a very supportive mindset,” while Ichiro Chiba, head of Toyota in Russia, hailed its professionalism.
As well as showing off their new models at the Moscow Auto Show, which runs until Sept. 10 at the Krokus Expo center, foreign carmakers will also be touting their plans for new assembly plants in St. Petersburg. 
Yet amid the fanfare — and despite the city’s attractive location, near West European and Scandinavian markets — automotive experts say the companies are taking a huge leap of faith, given the lack of good-quality infrastructure and suppliers here, not to mention a shortage of skilled car workers.
“There is a serious infrastructure deficit at the moment in the Moscow and St. Petersburg areas,” said Maxine Elkin, editor of Automotive Logistics, a London-based industry magazine.
“As Toyota and GM start planning their production start-up phase, they will face a hurdle in supplying their plants and moving their vehicles,” Elkin said by e-mail. “There is also criticism that the government’s plans to address this issue are not progressing fast enough.” 
Elkin recently visited St. Petersburg, where her magazine organized an industry conference attended by some 120 representatives of carmakers, suppliers and logistics companies. 
Among the sticking points highlighted by conference participants were the limited capacity of the city’s port and delays for car-carrying vessels and in customs clearance, she said. As a result, much of the cargo that might otherwise come directly into the port comes overland via Finland instead, Elkin said.
“With the inevitable increase in [auto industry-related] demand, the local infrastructure needs to improve drastically and quickly,” Elkin said.
Carl-Peter Forster, president of GM’s operations in Europe, said the infrastructure crunch was “sort of a challenge” at a groundbreaking ceremony for GM’s St. Petersburg assembly plant in June. The carmaker, which picked the city over 11 other possible locations around Russia, will continue talks with authorities about improving rail connections, among other things, Forster said.
GM and Toyota are planning to build assembly plants in Shushary, a suburb near the city, while Nissan’s plant is to be built in another suburb, Kamenka.
GM’s Shushary plant is expected to begin producing automobiles in late 2008. The $115 million plant will initially produce 25,000 Chevrolet Captiva sport utility vehicles per year and will later begin producing a next-generation compact car. 
Nissan plans to start building a $200 million plant next spring and produce its first cars in 2009. 
Toyota’s plant will produce its first 20,000 Camry models next year and hopes eventually to increase output to 200,000 units per year, Chiba said in a recent interview.
Chiba, who in the past decade has worked in India, Poland and the Czech Republic, said Russian roads in many aspects compared favorably with those he had seen elsewhere, and that he was hopeful that local infrastructure would improve before long. 
“It is naive to think that the present port facilities are enough ... but I personally think that an influx of various companies will synchronize with the city’s industrial base,” Chiba said.
But the paucity of good Russian car parts suppliers is a serious hurdle.
“You can count them on the fingers of one hand,” said Carl Watt, who oversees a program by the World Bank’s International Finance Corporation to help Russian firms produce better car parts. 
The program began in 2002, the year Ford started production at its plant in Vsevolozhsk, also in the Leningrad region. Ford set up shop under the condition that by 2007, 50 percent of its parts would be produced in the country. In return, the cars Ford assembled in Vsevolozhsk were exempted from customs duties.
This year, Ford was mired for months in a dispute over local content with the Economic Development and Trade Ministry, which withdrew the duty-free status from Ford’s Focus models. The ministry said Ford was in breach of its contract, according to which the carmaker was required to have 40 percent of its parts made in Russia this year. 
Although the law allows Ford to count costs such as employees’ salaries toward local content, the carmaker says it has struggled to meet its percentage targets due to shortages of quality Russian-made parts. 
“It’s been very difficult for them,” Watt said of Ford.
Other firms, including GM and Toyota, have secured better deals that allow them to gradually increase the share of domestically produced parts to 30 percent within 4 1/2 years of starting production.
Late last month, Ford managed to strike a new deal giving it similar conditions to other foreign carmakers. The ministry said July 31 that it had upgraded Ford’s legal status and that 40 percent of Ford’s car parts by value were now locally made. This means Ford will not have to pay the import duty. 
The ministry said Ford would invest another $250 million into Russia, allowing the company to boost output of its Focus sedan to 100,000 units per year, from 60,000 currently, and increase its payroll to 3,500 employees. Ford will also start assembling Mondeo sedans and Maverick SUVs, with respective production targets of 30,000 and 20,000 per year, the ministry said.
Yekaterina Kulinenko, a spokes-woman for Ford in Russia, confirmed the change of legal status, but said Ford had no current plans to increase investment or add new models to its current lineup.
While some foreign parts suppliers are already in Russia or have recently indicated they will come here, many still need to be persuaded to set up shop here, analysts and carmakers say. 
“We’ll go step by step,” Nissan’s Tavares said in an interview, adding that the growing number of carmakers moving in would help. “Now there are four of us. The critical mass is there.”
But some experts were skeptical about the city’s prospects. 
“It would be nice to think that it’s a new Detroit, but the production volumes are not large enough and the arrival of suppliers remains in doubt,” said Yevgeny Pogrebnyak, head of research at the Moscow-based Institute for Complex Strategic Studies.
Most domestic parts producers have their factories in clusters in central Russia.
To encourage more parts suppliers to come here, the government plans to introduce new incentives by year’s end, a spokesman for the Industry and Energy Ministry said.
The fate of foreign carmakers’ operations in St. Petersburg — as elsewhere in the country — largely hinges on the skills of the workforce, and hiring and training is already in full swing. But as city officials are wooing more companies to the area with tax breaks and other incentives, carmakers may soon find themselves wrestling with a shortage of qualified personnel, analysts said.
Over the past few years, major companies including Russky Standart, Pepsi and Bosch have either built or are building their plants in the city.
“We are experiencing a deficit of qualified workers,” Alexei Zelentsov, Kelly Services director for the Northwest Federal District, said during a recent presentation designed to tout St. Petersburg as an investment destination. 
Officials say they are aware of the city’s weak points. 
Mikhail Oseyevsky, a St. Petersburg vice governor, said at the same presentation that red tape and corruption were a problem, but that the city would do its best to root them out.
“The main problem is productivity,” Vladimir Blank, a senior St. Petersburg economic official, said at the presentation. But, he added, the city is doing its best to meet investors’ expectations.
The city has been bidding for money from the state investment fund to finance infrastructure projects and is seeing a range of large companies moving their tax addresses to the city. Last year, St. Petersburg pocketed $1.4 billion in foreign investments, a 44 percent jump from the year before. The city is spending $1.3 billion this year and $1.5 billion next year on infrastructure, Blank said.
The city is hoping that the investment will pay off in the long run, sucking in more taxes, jobs and expertise, Blank said.
A colleague of Blank’s, Maxim Sokolov, used a more poetic phrase to express the hopes of city officials and carmakers.
“There is a time to throw stones and a time to gather stones together,” he said.

TITLE: Mitsubishi Motors Denies Russia Plant
PUBLISHER: Bloomberg
TEXT: TOKYO — Mitsubishi Motors Corp., Japan’s only unprofitable carmaker, denied a report it may build a factory in Russia.
A delegation from Mitsubishi Motors visited St. Petersburg about a week ago, the Moscow-based daily Kommersant reported.
The delegation visited sites to the city’s south, including one near the town of Shushary where Toyota Corp. and General Motors Corp. are planning new factories, the newspaper reported, citing Nikolai Asaul, deputy head of St. Petersburg’s investments committee.
“Mitsubishi Motors has no plan for local production in Russia at this moment,” spokesman Fumio Nishizaki.

TITLE: Getting the Aircraft Industry Back in the Air
AUTHOR: By Alexander Rubtsov
TEXT: Civil aviation in Russia has to start replenishing its aircraft fleets as soon as possible. If this isn’t done, within five years the industry will face a severe shortage of modern aircraft able to meet requirements for safety and dependability. The first signs of the approaching chaos in air travel are already beginning to appear, in the form of a chain of airline catastrophes involving Russian airlines flying jets of both domestic and foreign manufacture. This is all happening in a country with a strong history of safe air travel.
Russians should be able to fly on dependable, modern aircraft without worrying about their personal safety. The best way to ensure this is self-evident: Russia needs to produce a sufficient number of domestic airliners to replace aging existing craft. Even though those who favor the import of used foreign equipment of questionable quality try to argue otherwise, Russian aircraft companies are equipped for the serial production of modern airliners that would assure the internal air market of safe new aircraft that can be operated economically.
The sole obstacle on the road to meeting these needs is the absence of a basis for the effective financing of aircraft production. The industry will soon present the government with proposals that would lead to a significant increase in the production of existing models of Russian jets with the help of federally guaranteed loans. If these financing mechanisms are put in place over the short term, the financing for mass orders of aircraft can be found.
That the government has turned its attention to difficulties in the domestic aircraft industry is cause for optimism. This includes the strategic decision to create a holding company, the United Aircraft Building Company, to unite all of the country’s civil producers and construction bureaus. The legal basis for this unification will be completed as soon as September or October, but this will only be the first step in the development of the company. Russia can’t afford to lose valuable time, so strategic decisions have to be made now. If it misses the opportunity to promote the mass production of Russian aircraft and continues to build them in only small numbers, then foreign producers will step in and exploit their resources and production capacity.
Almost no Russian airline today can afford new foreign aircraft, which cost two to three times more than their Russian counterparts. The only airline in the Commonwealth of Independent States that is able to equip its fleet with new foreign aircraft is state-owned Aeroflot, which has purchased a few dozen foreign jets with significant state support.
So Russian airlines have been forced in recent years to turn to older foreign planes, which flooded the market after the fall in air traffic between 2001 and 2003. The cost of these jets was low enough to compensate for the 20 percent import tariffs and higher costs for maintenance and the retraining of personnel. Whereas Russian companies imported 20 of these planes in 2005, that number could rise to from 50 to 70 per year in 2006-2010. From an economic point of view, it is impossible for new aircraft to compete with used jets (foreign or domestic). But just buying older jets runs counter to the interests of passengers, whose lives and safety depend directly on the condition of an airline’s fleet. 
New domestically produced aircraft can meet the demand from Russian airlines for the delivery of powerful aviation technology, and there exists today a unique opportunity to move from the production of single aircraft to serial orders for large shipments of planes. Large orders not only ensure that the needs of the market will be met, but also that the prices of the aircraft involved will be 10 percent to 15 percent lower as a result of economies of scale. This volume of orders could be handled by five existing factories in Ulyanovsk, Voronezh, Samara, Komsomolsk-on-Amur and Kazan, and could include the total production of about 150 aircraft from 2007-2010, with a total cost of about $3.6 billion.
An order of this size — nothing out of the ordinary in Soviet times — would be unprecedented in the post-1991 history of Russian aircraft production, which raises two questions: Are the factories in shape to fill such an order, and where will the necessary financing come from?
In order to solve the first problem, investment in the renovation of production facilities in factories and construction bureaus and the redevelopment of a trained work force will be necessary. The level of investment required would be in the range of $1 billion. Potential sources of financing are the federal budget, long-term leasing agreements and bank credits. Increasing the level of federal financing for research and development to modernize existing models and development new aircraft is also necessary.
The second problem — that of paying for the orders — should be addressed through the traditional global practice of leasing (for domestic orders) and export financing (for foreign orders). The development of debt-financing mechanisms has already played a part in the sales of Russian planes.
Experience has demonstrated the industry’s need to wean itself gradually from direct federal investment in leasing companies and the need to modernize the unwieldy system of subsidizing leasing costs. About $2 billion (80 percent of the cost of the aircraft to be delivered to the domestic market) is needed to finance the proposed major order, which would lower the lease payments and, therefore, increase the interest of airlines in domestic aviation technology. Finally, the taxes introduced in 2006 on leased aircraft have to be removed. Why should the government commit funds to the organization of aircraft leasing and then take 20 percent of the leasing company’s receipts back in the form of taxes?
What would be the end result? First of all, beginning in 2007, the domestic air transport market would begin to be filled with safe, new, economically viable and modern aircraft. 
Second, no fewer than 200,000 working places for highly qualified workers would be created that would help with the socio-economic development of many Russian regions. Third, this will create the research and development basis for the introduction from 2009 to 2012 of new aviation technology.
Fourth, this will be a significant boost to the federal budget: The total tax revenues generated between 2007 and 2020 would be about $2.1 billion, with about $700 million of this going to regional and municipal budgets.
Of course, a simpler path might be to open the domestic market rapidly to foreign aircraft. Calls to provide easier access to foreign aviation technology have grown louder in recent years  — not only from airline representatives but also from senior government officials and politicians. They have proposed not only removing tariff barriers, but also subsidizing lease payments from the federal budget. But the liquidation of the domestic aircraft production industry will trigger a range of social, economic, budgetary and other costs.
The development of the domestic aircraft industry could restore the country’s research potential, revive the national system of technical education and, without question, provide the domestic market with new, safe and economically viable airplanes.

Alexander Rubtsov is general director of Ilyushin Finance Co. This comment was published in Vedomosti.

TITLE: ‘On the Protection of Competition’
AUTHOR: By Svetlana V. Arhypova
TEXT: On October 26 of this year, a new law “On the protection of competition” will come into force. This law replaces the long-outdated law “On competition and the limiting of monopolistic activities in goods markets” and overrides the Federal Law of 1999 “On the protection of competition in the financial services market.”
The law, which aims to regulate competition in the Russian Federation, contains a host of major changes in the field. 
Firstly, the definition of the goods market has been considerably broadened. Previously, the only limitation on the market was the territory of the Russian Federation. Now, that limitation has been removed, which will allow the anti-monopoly authorities, in assessing any player on the market, to examine it in the context of the global market and alongside analogous products produced abroad. 
Secondly, the bar has been lowered for the definition of firms occupying dominant positions and a new definition of what actually constitutes a dominant position has been provided. If your company accounts for more than 50 percent of the market for any particular good, you’re doing too well and in a dominant position. Previously, that figure was 65 percent. In addition, the new law stipulates that you can be considered to be in a dominant position if your company is deemed to be among a group of three players that accounts for over 50 percent of the market or a group of five players which accounts for over 70 percent of the market. 
Thirdly, one of the law’s innovations will result in a lowering of the level of control of the anti-monopoly authorities over the purchasing of shares in companies. 
Now approval will only be required where a blocking stake is being acquired, which is to say 25 percent plus one share for a controlling share, 50 percent plus one share for a blocking stake and 75 percent plus one for a share that prevents any blocking. 
Although the above-mentioned factors cut down on the number of deals that need to be approved by the anti-monopoly authorities, there have been changes in the other direction. The establishment of the value of assets doesn’t just concern the companies directly party to the deal — now the total value of the assets of associated groups also have to be taken into account. On top of that, if the total revenue from goods for the past calendar year exceeds 6 billion rubles, approval is also required. 
In addition, the law also envisages the opportunity to carry out deals that require preliminary agreement from the anti-monopoly authorities and deals taking place within one group without prior agreement, though the authorities must be informed that such deals have taken place. Nevertheless, the anti-monopoly authorities have to be sent a list of the group of individuals no later than a month in advance of the transaction and notification of the carrying out of the deal also has to be sent in. 
A fourth innovation is a relaxing of the control of the anti-monopoly authorities over financial organizations. The law “On the protection of competition on the market for financial services,”  in the bulk of cases, is no longer applied and prior agreement on the creation of a financial organization is no longer required. In addition, an increase in the amount of a financial organization’s charter capital no longer has to be approved by the anti-monopoly authorities. 
And, finally, the new law deals with various procedural issues which were overlooked by the previous legislation, being regulated by separate decrees. 
Thus, the law proscribes the procedure for providing notifications and petitions to the anti-monopoly authorities as well as the procedure for their review and the making of decisions by those authorities. In addition, the law also regulates the procedure for dealing with cases where the anti-monopoly legislation has been infringed.

Svetlana V. Arhypova is an Attorney at ALTO consulting.

TITLE: Kommersant: Being Objective
TEXT: Whenever you talk about news coverage and ethics, the word “objectivity” is bound to come up. While true objectivity is nearly impossible, trying to be as objective as possible is at least part of the job.
And trying to be as objective as possible makes writing about metals magnate Alisher Usmanov’s purchase of Kommersant a little bit tricky. It would be easy to brand the deal as simply the latest move by the state to bring the country’s media and its message under greater Kremlin control. There is surely sufficient evidence from the past to support such a reading.
In 2001, Boris Berezovsky and Vladimir Gusinsky were forced out as the owners of ORT (now Channel One) and NTV television, respectively, and their stations were taken over by the state. There were blanket assurances at the time that the ownership changes would not affect editorial policy at the stations — particularly at NTV. But anyone who watched news coverage on the two stations five years ago would hardly recognize it today.
In the print media sector, other Kremlin-friendly buyers (Usmanov is the president of Gazprominvestholding, a subsidiary of state-owned monopoly Gazprom) have picked up the dailies Izvestia and Nezavisimaya Gazeta in recent years, with a corresponding change in the tenor — and drop in the quantity — in coverage of the federal government. The operating assumption for the new ownership appears to have been that, when it comes to the government, “If you can’t think of anything good to say, don’t say anything at all.”
Much of the “sky is falling” rhetoric that has accompanied the Kommersant deal is eerily reminiscent of that heard when Berezovsky bought the paper in 1999. While he clearly used the publication as a forum for his own criticisms of the Kremlin, it still retained a reputation as an independent outlet, if only by the standards of the Russian media market.
The only assurances we have so far that Kommersant will not become a bland, toothless newspaper like other national dailies are from Usmanov himself. Usmanov, however, has no experience in the media, and it is probably naive to hope that he will not simply fall in line with the rest of the news outlets with ties to the Kremlin ahead of a crucial national election cycle.
An election season without the coverage we’ve come to expect from Kommersant would be bad news indeed.

TITLE: Don’t Feed the People
AUTHOR: By William Saletan
TEXT: Over the past four decades, global population has doubled, but food output, driven by increases in productivity, has outpaced it. Poverty, infant mortality and hunger are receding. For the first time in our planet’s history, a species no longer lives at the mercy of scarcity. We have learned to feed ourselves.
We’ve learned so well, in fact, that we’re getting fat. Not just the United States or Europe, but the whole world. Egyptian, Mexican and South African women are now as fat as Americans. Far more Filipino adults are now overweight than underweight. In China, one in five adults is too heavy, and the rate of overweight children is 28 times higher than it was two decades ago.
Hunger is far from conquered. But since 1990, the global rate of malnutrition has declined an average of 1.7 percent per year. Based on data from the World Health Organization and the UN Food and Agriculture Organization, for every two people who are malnourished, three are now overweight or obese.
Obesity is no longer a rich man’s disease. For middle- and high-income Americans, the obesity rate is 29 percent. For low-income Americans, it’s 35 percent. Fourteen percent of middle- and high-income kids aged 15 to 17 are overweight. For low-income kids in the same age bracket, it’s 23 percent.
Technologically, this is a triumph. In the early days of our species, even the rich starved. Barry Popkin, a nutritional epidemiologist at the University of North Carolina, divides history into several epochs. In the hunter-gatherer era, if we didn’t find food, we died. In the agricultural era, if our crops failed, we died. In the industrial era, famine receded, but infectious diseases killed us. Now we’ve achieved such control over nature that we’re dying not of starvation or infection, but of abundance. Nature isn’t killing us. We’re killing ourselves.
You don’t have to go hungry anymore; we can fill you with fats and carbs more cheaply than ever. You don’t have to chase your food; we can bring it to you. You don’t have to cook it; we can deliver it ready to eat. You don’t have to eat it before it spoils; we can pump it full of preservatives so it lasts forever. You don’t even have to stop when you’re full. We’ve got so much food to sell, we want you to keep eating.
Kentucky Fried Chicken and Pizza Hut are spreading across the planet. Coca-Cola can be found in more than 200 countries. Half of McDonald’s business is outside the United States. In China, animal fat intake has tripled in 20 years. By 2020, meat consumption in developing countries will grow by 106 million tons, outstripping growth in developed countries by a factor of more than five. Forty years ago, to afford a high-fat diet, your country needed a gross national product per capita of nearly $1,500. Now the price is half that. You no longer have to be rich to die a rich man’s death.
Technology has changed everything but us. We evolved to survive scarcity. We crave fat. We’re quick to gain weight and slow to lose it. Double what you serve us; we’ll double what we eat. Thanks to technology, the deprivation that made these traits useful is gone. So is the link between flavors and nutrients. The food industry can sell you sweetness without fruit, salt without protein, creaminess without milk. We can fatten and starve you at the same time.
And that’s just the diet side of the equation. Before modern technology, adult men expended about 3,000 calories per day. Now they expend about 2,000. The folks fielding customer service calls in Bangalore are sitting at desks. Nearly everyone in China has a television set. Remember when the Chinese rode bikes? In the past six years, the number of cars there has grown from 6 million to 20 million. More than one in seven Chinese has a motorized vehicle, and households with such vehicles have an obesity rate 80 percent higher than those without them.
The hard part is changing our mentality. We have a distorted body image. We’re so used to not having enough that we can’t believe as a species that the problem is having too much. From China to Africa to Latin America, people are trying to fatten their kids.
The other thing blinding us is liberal guilt. We in the West are so caught up in the idea of giving that we can’t see the importance of changing behavior rather than filling bellies. We know better than to feed buttered popcorn to zoo animals, yet we send it to a food bank and call ourselves humanitarians. Maybe we should ask what our fellow humans actually need.

William Saletan covers science and technology for Slate, the online magazine at www.slate.com. This comment was published in The Washington Post.

TITLE: Just No Way To Beat The Heavy Traffic
PUBLISHER: Vedomosti
TEXT: Fall has arrived, so sitting in traffic jams for hours will once again become the norm. Every car brought to a standstill represents a hit to the wallet of its driver and the finances of his or her employer, and Moscow traffic jams as a whole are a drag on the country’s economy. It is actually possible to calculate the size of the damage, although no one has done so yet. The actual sum could be shocking.
Included in the costs are time lost at work, increased gasoline costs, higher state spending for police to direct traffic and climbing accident rates.
Studies of these costs have been carried out in the United States. According to data from the Texas Institute of Transport, for example, the cost of traffic jams in 1998 across the country was $74 billion. In Washington, the average loss for a motorist in the same year from traffic tie-ups was $1,290.
Nonetheless, the problem of traffic jams is not disappearing in the United States. According to the same institute, from 1982 to 2000, the amount of time spent stuck in traffic annualy by the average U.S. per driver rose from 16 to 62 hours, the lenght of the daily rush-hour traffic grew from 4 1/2 to seven hours, and the percentage of roads prone to traffic slow downs climbed from 34 percent to 58 percent.
Not only are there no data available for similar costs from traffic jams in Russia, but there are not even data about the jams themselves — at least not in the hands of the traffic police or the Moscow government.
There is, on the other hand, growth in the number of cars, which in Moscow today is 3 million, 12 times what it was 15 years ago. We have these figures because they are needed by the bureaucrats, who need to know how many people owe transport taxes.
The Moscow city budget, for example, takes in $51 million each year from automobile owners. The money is supposed to go to the construction and maintenance of roads, whose poor condition is one of the major causes of traffic jams.
The City Duma discussed the traffic problem at a regular session in July, and proposed the installation of a computerized traffic-control system. 
The system would monitor the level of traffic on major roads and provide the information to a central administration, which would be able to regulate city stoplights in real time. According to the traffic police, this type of system could reduce the incidence of traffic jams by 20 percent to 30 percent.
The new system was approved by the City Duma. Mayor Yury Luzhkov has since weighed in, saying that the problem has to be addressed with a combination of measures, including the construction of highways and parking and charging cars for coming into the city center, among others.
City officials have promised to put the finishing touches to the new strategy, and it might actually even be put into place.
But experience in the United States shows that even programs based on statistics and analysis by specialized institutes often come too late. By the time they have been implemented, the number of cars on the road has already grown. An increase of 10 percent in the number of cars on the road translates into an increase on traffic jams of 5.3 percent. In order to eliminate traffic jams, what is needed is a system of economic incentives.
The problem is that in Moscow there are only disincentives. One reason that the losses have never been calculated here is that it could lead to a fall in the collection of transport taxes.
And, according to the automobile drivers’ movement Freedom of Choice, putting a system of automatic traffic management in place would eliminate many of the traffic police on the street. This would be unpopular with officials within the traffic service, as the money collected in fines and bribes doesn’t all remain in the pockets of the officers on the streets.

This comment was published as an editorial in Vedomosti.

TITLE: IN THE SPOTLIGHT
AUTHOR: By Anna Malpas
TEXT: Recently, I’ve been reading a series of very dull interviews in glossy magazines. The only interesting thing about them is that the subjects are all famous Russians, and somewhere in the second-to-last paragraph they all drop in a mention of the mobile phone operator Beeline.
The people taking part — tennis player Yelena Dementyeva and filmmaker Yegor Konchalovsky, among others — talk to an unnamed interviewer in a Q&A format. Then there are just a couple of sentences where they talk about a convenient way to pay their phone bills. After that, it’s back to their latest film, tennis match or whatever.
These ads, which have run in Hello! and Seven Days magazines, aren’t fooling anybody, since they stick out visually from the rest of the content. But at the same time, they probably leave the participants feeling like they haven’t completely sold their souls to the almighty ruble. Konchalovsky takes the opportunity to name-drop at least five productions he’s currently involved in.
Other celebrities aren’t as finicky about putting their faces to products. Film director Fyodor Bondarchuk may have made millions with the buddy drama “Company 9,” but that doesn’t mean he can’t make a little extra cash plugging beer and vodka (separately, not as chasers). 
Meanwhile, the folksy playwright and actor Yevgeny Grishkovets shows off his Everyman credentials by advertising American Express with the slogan “Either you have it now, or you will.”
Some of the faces seem to fit the products better than others. One of the less successful combinations was television host Oksana Pushkina’s performance for the inexpensive, Russian-made moisturizing cream Black Pearl. Not long afterward, she hit the headlines after suffering ill effects from a cosmetic surgery procedure.
On that note, cosmetic surgery might seem like the ultimate no-no when it comes to celebrity endorsement. But Lyubov Polishchuk, an actress who starred in films back in Soviet times, used to have her photograph on ads for a clinic that appeared regularly in Seven Days. True, it seems they’ve stopped appearing recently, perhaps due to a tabloid story about her temporary paralysis after some terrifying procedure.
Sometimes it’s not the celebrity’s face that’s most important when it comes to casting ads. The dancer and stripper Tarzan, who is married to pop singer Natasha Korolyova, can be seen on posters in the metro advertising underpants.
The more A-list Russian celebrities often choose to advertise watches, usually very expensive ones. The pop singer Alsu has been photographed wearing a slim Orient watch and the satisfied expression of someone whose daddy is a former vice president of LUKoil. Another singer, Zhanna Friske, is now advertising the same watchmaker in a photo shoot that reverses her usual principle of wearing more makeup than clothes.
That’s not to say humbler products can’t have starry faces representing them. Nikolai Baskov, the favorite pop and opera singer of Russian housewives, recently appeared in a widely printed “news” story about his feelings of nausea after spending a whole day shooting a tea commercial soon to grace our screens. Of course, this vitally important story didn’t forget to mention that he still liked the product in question.
And a recent commercial featured the one-time goalkeeper for the Soviet soccer team, Rinat Dasayev, reminiscing about his glory days, only to find that his treasured sweat-stained shirt had been washed shiny and new by his housekeeper, using Ariel detergent. 
A journalist from Komsomolskaya Pravda called up Dasayev to ask whether the shirt used in the commercial was actually one he had played in. Not surprisingly, the answer was short and sharp.

TITLE: In a Siberian Wasteland, Russian Oligarch Roman Abramovich Recreates a City of Flying Dogs
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: ANADYR, Chukotka Region — If any place qualifies as being at the end of the world, it is certainly Chukotka.
Almost everything is extreme in Russia’s northeasternmost region, including its location, harsh weather and even the unusually large and aggressive mosquitoes that make a shockingly loud crunching sound when squashed.
The 730,000-square-kilometer region — twice the size of Germany — has no trees except in a small area in the south. The population is so sparse that its land-to-people ratio is comparable to 68 people living within the Moscow city limits.
Locals call the capital, Anadyr, the City of Flying Dogs, because in winter the wind is so strong that it is often impossible to walk a step. In such weather, dogs tend simply to take off.
Yet Anadyr is the showcase of billionaire Governor Roman Abramovich’s efforts to raise living standards in the region. Small enough to be seen in its entirety in a single glance, the city of 10,600 on the estuary of the Anadyr River looks like a Legoland. Nearly all of its buildings — mainly boxy five-story Soviet apartment blocks built on posts above the permafrost — are painted in bright reds, yellows and blues and decorated with patterns and pictures specially ordered from a Moscow company, Yo-Programma.
Just seven years ago, Abramovich was downright shocked when he first visited the region during his run for a State Duma seat, said Mikhail Zelensky, the head of the administration of Chukotka’s Chukotka district. Each village’s only food store was often stocked with little more than salt, vinegar and couple of insecticides, Zelensky said.
“So Abramovich, after visiting a number of places around Chukotka, chartered four ships, loaded them with basic staples and sent them to Chukotka as humanitarian aid,” Zelensky said.
After that, Abramovich paid for a Mi-26 helicopter capable of carrying 20 tons of cargo to fly from village to village, delivering fruit and vegetables.
Although food can only be delivered by ship or plane to Anadyr, it now boasts modern amenities such as a couple new hotels, a few restaurants and the large Novomariinsky supermarket. All of them, needless to say, were built with Abramovich’s money and are owned by businesses connected to the regional administration and various investment vehicles that funnel Abramovich’s cash into Chukotka.
A guided tour of the city quickly revealed that almost everything — from an enormous hospital and clinic to treat sexually transmitted diseases to a food-processing plant and the Holy Trinity Cathedral — had been built after 2001, the year when Abramovich became governor. The latest building going up in the now-continuous construction boom is a pretrial detention center in central Anadyr.
“Abramovich is a real man. He came to the house, and he is fixing it,” said Irina Romanova, deputy director of the local museum, which also was built by Abramovich.
The changes to the city’s appearance are drastic. Locals and those who had visited previously remember unpaved streets and dilapidated buildings.
“Everything changed: There are goods in stores, the place looks so much better,” said Alexander, a 30-year-old driver who took a reporter around the city.
“Returning to Anadyr [after a vacation] was not something I wanted to do before, but now it’s a different story,” he said.
The city’s beautification, however, is one of the few efforts that has stirred up public discontent — a truly rare occurrence in Abramovich’s Chukotka.
“Don’t think all of it was that easy and simple,” said Sergei Segidin, 42, a retired fireman.
As locals tell it, pre-Abramovich Anadyr was not only known for bad roads and shabby houses. Every resident seemed to have a rickety garage, shed or old shipping container outside his or her apartment building to store anything from food to old furniture.
After trying to persuade the people to remove the structures, City Hall one day just sent out a fleet of trucks and evacuated them all to a plot of land outside the city limits.
“When the Anadyr Mayor’s Office decided to remove all the sheds and huts and garages, people were ready to take up arms,” Segidin said.
“And now, you cannot leave anything outside the house. If a shipping container stays out for more than three days, they just come and take it away.”
There is no shortage of guns in the region, where hunting is a way of life or a hobby for just about everyone, but somehow no fighting broke out and the city now looks prettier than ever before.

Abramovich’s Money
Despite the easy-to-spot improvements, Chukotka’s fundamental problem remains: The economy simply cannot function without Abramovich’s money.
“Six years ago, we found people here who were reduced to eating animal food and giving it to their children. There were children here suffering osteoporosis and rickets from malnutrition,” said Irina Ruchina, president of the Chukotka Red Cross and a cousin of Abramovich. People brought in by Abramovich from his companies or other regions fill most top posts in the region.
The Chukotka Red Cross is another Abramovich-funded project, which spends $800,000 to $1 million per year here, funding everything from flowerbeds to helping people combat alcoholism or start up businesses. The average budget of a regional branch of Red Cross in Central Russia is about 100,000 rubles ($3,700).
“It was a ghetto on the territory of Russia. There were times when planes would not come to settlements for three months in a row, and there were villages where, due to lack of supplies, animal fat was burned for heating and actual mica was used for window glazing,” Ruchina said. Mica is a silicate mineral that was used for windows before sheet glass became widely available.
So Abramovich came and started to build.
Apart from paving streets and building hospitals, the region has seen a variety of infrastructural projects implemented in a few short years.
The once press-shy Chukotka administration gladly displays many of them. The administration flew in reporters for a tour apparently aimed at drawing attention to the fact they would not be around forever.
Among the new Abramovich-funded enterprises is Agriculture Corporation, an Anadyr-based poultry farm and compact food-processing facility that bakes bread, produces dairy products and processes meat.
The plant is top of the line and packed with Western technology. Rosy-cheeked and plump female bakers mix dough in one big, sparkling white room. In another, broad-shouldered young men carefully chop meat to make sausages and a variety of cold cuts. But behind the cheery scenes is a secret that people do not like to talk about. The plant, which is a joint-stock company 95 percent owned by the Chukotka administration, is losing money.
“A loaf of bread costs us 100 rubles to produce, but in stores it is sold for 20 rubles,” said Irina Norova, the acting director of the plant. “The transportation portion of the cost is very expensive.”
Quizzing her and the management of other businesses yielded the same reply: all are subsidized by nonbudgetary funds — or, simply put, by Abramovich.
The recently built fish-processing plant, Chukotrybpromkhoz, which also boasts brand-new equipment, offers locals, particularly native peoples, seasonal jobs that pay 40,000 rubles to 80,000 rubles for the few short weeks in the summer when salmon swim upstream for breeding.
Here, too, are rosy-cheeked plump women in clean white aprons picking bad eggs from the red caviar, and young and focused men methodically cleaning the fish along a fast-moving conveyor belt ahead of freezing. A lot of the salmon goes to feed schoolchildren, students and hospital patients across Chukotka, but the business is in the red. In the winter months, the plant packages and freezes fish caught in the Bering Sea by local fishing companies.
The Chukotka administration wants to sell the plant to a strategic investor, but with strings attached: The buyer would have to keep the salmon business.
“There are mechanisms, though,” plant director Vladimir Gorbunov said reassuringly. “The administration has a good instrument to influence the business — fishing quotas,” he said.
Even Anadyr’s Novomariinsky supermarket, which looks much like a purely commercial enterprise, is in fact a powerful tool used to control prices in the city.
“The moment the price for any product goes up in shops owned by smaller traders, Novomariinsky just lowers its prices for the same item. It’s here to make sure that things are affordable,” said an official employed by Abramovich who spoke on condition of anonymity.

Building the Economy
The harsh climate, poverty and extreme remoteness of the region all take a toll on business activity, officials conceded. While there is some retail activity, services and other small businesses are so underdeveloped that the regional administration spends some 2 million rubles per year helping establish them in rural communities. The program trains people and then buys them the necessary equipment to open basic services such as instant photo booths or hairdressers. The cost of setting up a hairdresser in a small village is 100,000 rubles.
“So far, we are not getting any tax revenues from this program, but this is not the top priority,” said Yakov Kiselyov, a 34-year-old Muscovite who is in charge of Chukotka’s economy.
Agriculture is another sector that needs constant funding to survive. With a climate as harsh as Chukotka’s, agriculture is largely limited to reindeer herding.
The tough economic conditions of the 1990s meant that the number of reindeer fell from 450,000 in 1989 to less than 100,000 by the end of 1990s, prompting Abramovich to pay reindeer herders 1,040 rubles for each live animal at the end of every year. As a result, there are now more than 150,000 reindeer, and the administration is looking to commercially produce reindeer meat, including for export abroad.
There are about 17,000 native peoples living in Chukotka, mostly Chukchi but also Eskimo, Evenks and others. The native population is split into two groups — reindeer herders who live inland and sea hunters who catch fish, walrus, ringed seals and whales and live on the coast.
While deer herders are getting paid to rebuild the deer population, sea hunters also get money to maintain their lifestyle. Since a solution on how to support tribal traditions has yet to be found, any native who calls himself a sea hunter is paid 5,100 rubles per month.
Chukotka Deputy Governor Mikhail Sobolev said the regional administration was looking for ways to cooperate with Western pharmaceutical companies to make medication with marine mammal products. The region has a commercial quota to hunt 13,000 ringed seals but has yet to come up with a way to use it.
Chukotka’s economy quintupled since 2001, and its average salary also has jumped by five times, to 22,600 rubles last year. The average national salary is 8,550 rubles. Chukotka’s minimal subsistence level is 7,365 rubles per month.

Furs a Grim Reminder
Acute poverty and disrepair are evident in rural communities. In the village of Lorino, 260 kilometers east of Anadyr, the streets are littered with rusty discarded car parts. Many Lorino residents have sled dogs and use canoes made of walrus skins.
The village’s fur farm is a grim reminder of the Soviet economy’s collapse and a striking contrast to the businesses created by Abramovich in Anadyr. Ramshackle cages hold some 1,600 arctic foxes — a fraction of the Soviet-era production scale of 12,000 per six-month season. The farm only survives because it pays each of its dozen employees a meager 4,000 rubles per month — money it gets from the district administration and from Anadyr. It makes no profit, and about 6,000 skins are in storage with little prospect of ever being sold. Some are getting so old that they will be simply thrown away. 
“Transporting skins from here is expensive,” said Klara Yermakova, an elderly woman with a hearing aid who works as the farm’s administrator. She acknowledged that the farm did not have anyone in charge of marketing. The future of the farm, and of Chukotka as a whole, largely depends on what will happen to Chukotka after Abramovich leaves for good.

TITLE: Stingray Kills Crocodile Hunter
AUTHOR: By Paul Tait
PUBLISHER: Reuters
TEXT: SYDNEY — Steve Irwin, the quirky Australian naturalist who won worldwide acclaim, was killed by a stingray barb through the chest on Monday while diving off Australia’s northeast coast, emergency officials and witnesses said.
“Steve was hit by a stingray in the chest,” said local diving operator Steve Edmondson, whose Poseidon boats were out on the Great Barrier Reef when the accident occurred.
“He probably died from a cardiac arrest from the injury,” he said. 
Police and ambulance officials later confirmed Irwin had died and said his family had been advised.
Irwin, 44, was killed while filming an underwater documentary off Port Douglas.
Irwin had been diving off his boat “Croc One” near Batt Reef northeast of Port Douglas. A helicopter had taken paramedics to nearby Low Isles where Irwin was taken for medical treatment but he was dead before they arrived, police said.
Irwin won a global following for his dare-devil antics but also triggered outrage in 2004 by holding his then one-month-old baby while feeding a snapping crocodile at his Australian zoo.
He made almost 50 of his “Crocodile Hunter” documentaries which appeared on cable TV channel Animal Planet and won a worldwide audience.
The series ended after he was criticized for the incident with his young son and for disturbing whales, seals and penguins while filming in Antarctica.
Khaki-clad Irwin became famous for his seemingly death-defying methods with wild animals, including crocodiles and snakes. He made a cameo appearance alongside Eddie Murphy in the 2001 Hollywood film Dr. Dolittle 2 and appeared on U.S. television shows such as “The Tonight Show With Jay Leno” and on children’s television alongside The Wiggles.
Irwin was married with two children, Bindi Sue and Bob Clarence. His American-born wife Terri was his business partner and frequent on-screen collaborator.

TITLE: Sarkozy Makes Bid For Presidential Nomination
AUTHOR: By Emmanuel Georges-Picot
PUBLISHER: The Associated Press
TEXT: MARSEILLE, France — French Interior Minister Nicolas Sarkozy urged a break with the past as he sped ahead with his presidential bid at a key party conference Sunday, seeking to woo young people to his conservative camp. 
Sarkozy rallied actors, rock stars and a rapper to his cause as he courted a generation that traditionally has not supported the ruling Union for a Popular Movement, or UMP, founded by 73-year-old President Jacques Chirac.
“A break is necessary,” Sarkozy told the crowd of 7,000 party faithful in Marseille.
His plan for a “new French model” drew barbs from rivals on the left and the farther right. Several parties are gearing up for next spring’s election and cranking up pressure on the UMP.
Sarkozy also faces an uphill battle in charming French youth.
Student protests this spring against a mild labor reform showed that many young people are ready to fight for the status quo of generous labor protections rather than start revolutions.
And the young rioters who ravaged French suburbs last fall targeted much of their ire at Sarkozy’s hard line on immigration and crime. The riots revealed a failure to integrate the nation’s young minorities that Sarkozy has barely addressed.
On Sunday, Sarkozy blamed France’s 1968 student uprisings for many of the nation’s woes, saying they instilled a sense of entitlement in young people that led to what he called complacency and stagnation and overgenerous labor laws.
Hitting a key campaign issue, he pledged to reduce joblessness and said he understood French young people who travel abroad to seek jobs and avoid 23 percent youth unemployment rates at home.
He encouraged young people to study English to compete in a globalizing world, addressing the French language’s declining influence: “We will not save French by forbidding our children from learning English.”
Sarkozy also proposed six-month obligatory community service for French 18- to 30-year-olds.
The proposal — similar to calls by Socialists and the centrist UDF party — comes amid nationwide debate on the 10th anniversary of the end of France’s obligatory military service. Sarkozy’s key rival on the left, Socialist Segolene Royal, surprised members of her own party by suggesting a return to the draft earlier this year.
“There is no nation without obligations of individuals” to the nation as a whole, Sarkozy said.
The UMP is to choose its candidate at a Jan. 14 congress, but for months party chief Sarkozy has had a commanding lead. Prime Minister Dominique de Villepin, a Chirac loyalist, and Defense Minister Michel Alliot-Marie suggested at the UMP conference that they have yet to abandon their own presidential aspirations.
Royal also is making change her rallying cry but she struck a softer note Sunday than Sarkozy. The two have topped the polls for months as the nation’s two most popular politicians.
“I do not want to break things,” she said at the Rose Festival in Florac in southern France.

TITLE: IN BRIEF
TEXT: Castro ‘Recovering’
CARACAS, Venezuela (AP) — Venezuelan President Hugo Chavez said Sunday Cuban leader Fidel Castro was recovering quickly after intestinal surgery that forced him to turn power over to his brother a month ago. 
“Fidel is recovering well. The rapidity of his recovery surprised me,” said Chavez, a close ally of Castro. Chavez made his third visit to the communist-led island in three weeks on Thursday.
“He’s sits up, writes, has a telephone and gives orders, instructions,” added Chavez, speaking during his weekly television and radio program.

Sudan Rejects AU
KHARTOUM, Sudan (AP) — Sudan said Monday that the African Union has no right to transfer its peacekeeping mission in Darfur to the United Nations and must withdraw its troops from the western region by month’s end. 
Foreign Ministry spokesman Jamal Ibrahim said that the AU had indicated that it could not continue its presence in Darfur beyond Sept. 30.

Squirrel Floors Singer
HELSINKI (Reuters) — A squirrel scampered into the bicycle wheel of an unlucky Finnish opera singer, causing him to fall, knock himself out and break his nose just ahead of the world premiere of a new opera.
Esa Ruuttunen was pedalling his way to the Helsinki Opera House last month when the squirrel ran into his spokes.
The singer ended up concussed and in a local hospital, rather than at his rehearsals for the Finnish opera “Kaarmeen hetki” (“Hour of the Serpent”), which opens on September 15.
“He is not yet singing in rehearsals, but thinks he will be able to perform at the world premiere,” Finnish National Opera spokeswoman Heidi Almi told Reuters.
The squirrel died in the accident.

Storm to Flood U.S.
LA PAZ, Mexico — Rains from the remnants of Hurricane John soaked the northern half of Mexico’s arid Baja California peninsula on Monday and threatened to cause flooding in the southwestern United States.
The storm, which was downgraded to a tropical depression Sunday, had dumped up to 20 inches of rain in isolated areas of the peninsula and was expected to drop as many as 3 inches in desert areas from southern California to west Texas in the next few days, the National Hurricane Center in Miami said.

Turkish Bomb Kills 2
ANKARA, Turkey (AP) — A remote-controlled bomb exploded Sunday in a tea garden in southeastern Turkey, killing two people and wounding seven, a local government official said. 
The blast in the town of Catak, near the border with Iran, occurred as police arrived at the scene to investigate a suspicious package at the outdoor cafe, where people drink tea, eat snacks and play backgammon.
Autonomy-seeking Kurdish rebels were suspected as being behind the bombing, a police official said.

TITLE: The Lady Was a Spy, Papers Reveal
AUTHOR: By Peter Griffiths
PUBLISHER: Reuters
TEXT: LONDON — The wife of a British aristocrat was detained as a suspected spy during World War II amid claims she flirted with diplomats to find out secrets to pass to her gun-running lover, official papers said on Monday.
Lady Howard of Effingham, who married a descendant of the admiral who led the British navy against the Spanish Armada in 1588, was at the center of a secret service investigation which reached the top of government.
Intelligence chiefs, who described her as the “type of woman who would do anything for money,” said she used her looks and connections to help her lover to spy for Germany and Russia. 
“A not unattractive gypsy gamine type — highly sexed, I should say... an accent more foreign than it need be,” British agent Lord Cottenham said in a report.
MI5 said the Polish-born Malwina Gertler only married Lord Howard, a bankrupt whose inheritance had been cut off, to gain British nationality.
She used her lover’s money to pay him 500 pounds plus a weekly allowance of 7 pounds, according to a report made public for the first time with a batch of previously secret files at the National Archives.
She continued seeing her lover, Edward Weisblat, during her honeymoon in Paris. British agents said the pair traveled to the United States, France and Egypt, where they met a German agent.
Weisblat made his fortune as an arms dealer during the Spanish Civil War, the files said. He kept a chauffeur and a Rolls Royce and Cadillac in London. 
British agents compiled several reports on the pair and sought permission from the Home Office to detain Lady Howard as a threat to the “defence of the realm.”
But amid conflicting evidence and without hard proof, ministers resisted attempts to send her to jail.
“I have no doubt that Lady Howard is an adventuress of the worst possible character,” Home Secretary John Anderson was quoted as saying in a letter prepared by an aide. “But she is a British subject... she is not of hostile origin.”
Despite his initial concerns, Lady Howard was eventually detained in a north London prison for five months. 
“It’s just like a rather cheap finishing school,” she said in a newspaper interview on her release. “I had my own cell. I made little chintz curtains for the window and had my own bed cover.”

TITLE: ‘The Queen’ Rules Supreme at Film Festival
PUBLISHER: Reuters
TEXT: VENICE — “The Queen”, a superbly acted reconstruction of the crisis within the British monarchy caused by Princess Diana’s death in 1997, is the early favourite to land the big prizes at the Venice Film Festival this year.
By Monday, the sixth of an 11-day movie marathon, critics and the public are bowing and curtseying both before Stephen Frears’s movie and leading lady Helen Mirren in the title role.
Mirren’s portrayal of Queen Elizabeth as she is forced to abandon her English stiff upper lip to meet the demands of a nation mourning the loss of Diana is both funny and touching. 
“I thought it was a great film,” said Lee Marshall, film critic for Screen International. “It’s commercially smart because clearly it is a subject anyone, anywhere in the world knows about and they do it in an irreverent and charming way.”
The two other early front-runners among 21 films in the main competition are French film maker Alain Resnais’s “Private Fears in Public Places” and Mexican director Alfonso Cuaron’s “Children of Men.”
Resnais, who at 84 has directed more than 45 films and won the Golden Lion prize for best picture in 1961, examines our desperate quest for happiness in an intimate film set in a snow-covered Paris.
Cuaron’s apocalyptic vision of London in 2027 has Islamic radicals, illegal immigrants and vigilante rebels wreaking havoc in a bleak portrayal not only of a world gone mad, but one where humankind faces extinction.
“It’s a compendium of the big crises of our time — from demography to immigration to war,” said Paola Jacobbi of Vanity Fair.

TITLE: No Breakthrough Made, Annan Snubbed in Iran
AUTHOR: By Nasser Karimi
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — The UN chief got little satisfaction Sunday at the close of his trip to Tehran, snubbed by Iran’s leader over international demands to stop enriching uranium and ignored in warnings not to incite hatred by questioning the Holocaust. 
In a provocative move on the final day of Kofi Annan’s two-day visit, Iran announced it would host a conference to examine what it called exaggerations about the Holocaust, during which more than 6 million Jews were killed by the Nazis.
The move was sure to draw new international condemnation of Iran’s stance on Jews. Hours after the announcement, Annan repeated his displeasure over an exhibition in Tehran of cartoons mocking the Holocaust that was opened as a response to Western caricatures of Prophet Muhammad.
“I think the tragedy of the Holocaust is an undeniable historical fact and we should really accept that fact and teach people what happened in World War II and ensure it is never repeated,” Annan told reporters.
He commented after a meeting with President Mahmoud Ahmadinejad, but the hard-line Iranian leader didn’t accompany the UN chief to the news conference.
Ahmadinejad has drawn strong condemnations around the globe for calling the Nazis’ slaughter of Jews a myth and saying Israel should be wiped off the map or moved to Germany or the United States.
The Holocaust exhibit is being held to underline outrage over Prophet Muhammad caricatures in Western media. Islam forbids picturing Muhammad at all, but Muslims also were angered by the cartoons’ negative tone, such as one showing the prophet wearing a turban shaped as a bomb with a burning fuse.
Annan first raised his concerns about the exhibit during a meeting Saturday with Iranian Foreign Minister Manoucher Mottaki, according to the UN chief’s spokesman, Ahmad Fawzi. He quoted Annan as saying that “we should avoid anything that incites hatred.”
Annan’s visit came after Iran ignored the UN Security Council’s Thursday deadline for Tehran to halt uranium enrichment, opening the door to possible sanctions over concerns that the Iranians are trying to develop atomic weapons.
“On the nuclear issue, the president reaffirmed to me Iran’s preparedness and determination to negotiate” a solution to the nuclear confrontation, Annan said at the news conference.
However, Ahmadinejad “reiterated that he did not accept suspension before negotiations,” the UN chief said, conveying Iran’s rejection of a condition set by the five permanent members of the Security Council plus Germany.
In June, the six nations offered Iran a package of economic and diplomatic incentives to limit its nuclear program. Iran didn’t respond until Aug. 22, rejecting the condition that it stop enriching uranium before talks. The content of its response has not been made public.
Tehran hid its nuclear program for 18 years and its continued lack of full cooperation with UN inspectors has increased suspicions about Iranian aims. 
The oil-rich nation insists the program is peaceful, intended only to produce fuel for nuclear reactors that generate electricity.

TITLE: British Tourist Killed in Jordan
AUTHOR: By Suleiman al-Khalidi
PUBLISHER: Reuters
TEXT: AMMAN — A lone gunman opened fire on a group of foreign tourists in the Jordanian capital Amman on Monday, killing a British man and wounding six, an official and a witness said. 
Jordanian government spokesman Nasser Joudeh denied earlier reports that the attack was carried out by two men, one of them an Iraqi. He said the gunman, a Jordanian, had been arrested and was being questioned.
Joudeh said the wounded were three Britons, a Dutch national, a New Zealander and their Jordanian tour guide.
“One British citizen has died as a result of his injuries and the others are receiving treatment,” he said.
Police cordoned off the site of the attack near the Roman amphitheater in the downtown area of the capital.
“I was walking when I saw someone pull out a pistol from his pocket and start shouting Allahu Akbar [God is Greatest] and fire repeatedly,” Mohammad Jawad Ali, an Iraqi who witnessed the shooting, said.
“Then I saw one tourist who appeared to be dead and three who were injured. They were in a group of seven. A woman told me they were tourists from New Zealand and England.”
Witnesses said the gunmen shot at least 12 bullets before he finished his ammunition and was chased in the crowded downtown area before he was arrested.
No group immediately claimed responsibility for the attack.
Interior Minister Eid al-Fayez told reporters in a briefing near the site that police were investigating if the incident was an isolated act of violence by a sole gunman.
“The Jordanian culprit is being interrogated and we don’t know if he had any accomplices in this operation,” Fayez said. “There is no doubt that this is a terrorist act.”
A spokesman for the Foreign Office in London could not immediately say whether any Britons were caught up in the shooting.
“We are actively seeking information from the Jordanian authorities about the attacks,” he said.
The downtown area of Amman is a very popular tourist attraction.
Al-Qaida in Iraq launched suicide bombings against hotels in Amman last year, killing scores of people.
But Israel’s offensive in the Gaza Strip and war against Hezbollah in Lebanon, which has killed some 1,400 fellow Arabs and drawn international criticism, has also raised passions in Jordan where anti-Israeli feelings are running high.
Many Jordanians are angry about what they see as Western indifference toward the plight of Palestinians. 
Security sources say they have been worried since Israel’s war with Hezbollah, which was halted on Aug. 14, led to a surge in anti-Western sentiment among inhabitants of the Muslim country. 
Jordan enjoys the warmest ties with Israel among its Arab neighbors and has close security cooperation since a peace treaty in 1994.

TITLE: Friendly Fire Kills NATO Soldier
PUBLISHER: The Associated Press
TEXT: KANDAHAR, Afghanistan — NATO warplanes strafed their own forces in southern Afghanistan on Monday, killing one Canadian soldier and seriously wounding five others during an anti-Taliban operation that the alliance says has killed 200 militants. 
A British soldier attached to NATO was also killed in a Kabul suicide bombing, which left another four Afghans dead on Monday, NATO and Afghan officials said. Sixteen suspected Taliban militants and five Afghan police died in separate Afghan violence.
The intense fighting comes amid Afghanistan’s deadliest spate of violence since U.S.-led forces toppled the hard-line Taliban regime for hosting al-Qaida leader Osama bin Laden after the Sept. 11, 2001 attacks.
NATO said the friendly fire incident occurred during a major NATO-led operation in Kandahar province’s Panjwayi district. After ground troops requested air support, two NATO aircraft “regrettably engaged friendly forces during a strafing run, using cannons,” the statement said.
One Canadian soldier was killed, said NATO spokesman Major Scott Lundy, while five were seriously wounded and evacuated out of Afghanistan for medical treatment. He did not say where they were taken. An investigation into the incident has been launched.
“It is particularly distressing to us all when, despite the care and precautions that are always applied, a tragedy like this happens,” said NATO commander Lieutenant General David Richards.
On Sunday, four Canadian soldiers were killed and seven wounded during Operation Medusa, which aims to drive a large group of Taliban militants from Panjwayi, about 15 miles west of the main southern city of Kandahar.
In Kabul, a car driven by a suicide bomber exploded alongside a British convoy, killing one soldier and seriously wounding another, the British Ministry of Defense said.
Another four Afghan civilians were killed, while at least two other NATO soldiers and seven Afghans were wounded in the blast on the Kabul-Jalalabad road, NATO and Afghan officials said.
The driver also died, Afghan police said.

TITLE: Connally, Last Survivor Of JFK Shooting, Dead at 87
AUTHOR: By Kelley Shannon
PUBLISHER: The Associated Press
TEXT: AUSTIN, Texas — Nellie Connally, the former Texas first lady who was riding in President Kennedy’s limousine when he was assassinated, has died, a family friend said Saturday. The 87-year-old was the last living person who had been part of that fateful Dallas drive. 
Connally, the widow of former Governor John Connally, died late Friday of natural causes at an Austin assisted living center, said Julian Read, who served as the governor’s press secretary in the 1960s.
As the limousine carrying the Connallys and the Kennedys wound its way through the friendly crowd in downtown Dallas, Nellie Connally turned to President Kennedy, who was in a seat behind her, and said, “Mr. President, you can’t say Dallas doesn’t love you.”
Almost immediately, she heard the first of what she later concluded were three gunshots in quick succession. A wounded John Connally slumped after the second shot, and, “I never looked back again. I was just trying to take care of him,” she said.
She later said the most enduring image of that day was the bloodstained roses.
“It’s the image of yellow roses and red roses and blood all over the car ... all over us,” she said in a 2003 interview with The Associated Press. “I’ll never forget it. ... It was so quick and so short, so potent.”
Read said Connally had been sitting at her desk writing thank-you notes when she died.
“She has been extremely active and vital the past few days and weeks,” he said. “It’s a shock to all of us.”
In 2003, she published a photo-filled book — “From Love Field: Our Final Hours with President John F. Kennedy” — based on 22 pages of handwritten notes she compiled about a week after the assassination.
Texas Governor Rick Perry called Connally “the epitome of graciousness.”
“Long before she was propelled into the national spotlight from the assassination of President John F. Kennedy, she was a Texas icon,” Perry said in a statement.
Connally, formerly Nellie Brill, met her husband at the University of Texas in Austin, and they married on Dec. 21, 1940.
John Connally managed several political campaigns for fellow Texan Lyndon B. Johnson, including his 1964 presidential campaign. Connally was elected Texas governor as a Democrat in 1962 and won re-election twice, serving three two-year terms.
He was treasury secretary in the Nixon administration and ran for president as a Republican in 1980, when Ronald Reagan was elected. John Connally died in 1993.
Nellie Connally helped raise money for many charities. In 1989, Richard Nixon, Barbara Walters and Donald Trump turned out for a gala to honor her and raise money for diabetes research.
“I’ve never known a woman with Nellie’s courage, compassion and character,” Walters said. “For all her ups and downs, I’ve never heard a self-pitying word from her.”

TITLE: Andre Agassi Bids Tearful Farewell at U.S. Open
AUTHOR: By Steve Ginsburg
PUBLISHER: Reuters
TEXT: NEW YORK — Andre Agassi’s glittering career came to a tearful conclusion when he lost in four sets to German qualifier Benjamin Becker in the U.S. Open third round on Sunday. 
Becker, the world No.112 who is playing just his second grand slam event, sent the 36-year-old Agassi into retirement with a 7-5 6-7 6-4 7-5 victory at Arthur Ashe Stadium. 
Agassi, struggling with a chronic back injury that severely limited his mobility, did not have the physical strength to battle the hard-hitting German and at times yelped from the pain. 
“You have given me your shoulders to stand on to reach for my dreams, dreams I could never have reached without you,” the American told the crowd after sobbing for several minutes. 
“Over the last 21 years, I have found you, and I will take you and the memory of you with me for the rest of my life.” 
Several seeded players were knocked out on the final day of the first week, including Argentine No. 4 David Nalbandian on the men’s side and Russian No. 5 Nadia Petrova on the women’s. 
Former champion Lindsay Davenport saved two match points before beating Slovenian Katarina Srebotnik to join women’s top seed Amelie Mauresmo in the next round. On the men’s side, No. 2 seed Rafael Nadal, No. 9 seed  Andy Roddick, 15th seed Lleyton Hewitt and No. 17 seed Andy Murray all advanced. 
But all eyes were on Agassi, who had announced at Wimbledon that the Open would be the final tournament of his remarkable career. 
Agassi fought gamely but ultimately lost to the 25-year-old Becker, who fired 27 aces and 82 winners. After the match, Agassi sat on his courtside chair and cried with his head in his hands. 
Agassi needed several cortisone injections over the last week to deal with his back pain. After a stirring five-set triumph over Marcos Baghdatis on Friday, he was in no shape for a repeat performance. 
The sold-out crowd cheered wildly for Agassi but the eight-times grand slam winner could not move effectively enough to handle Becker’s big shots. 
“After my second-round match against Baghdatis, that was the worst I’ve ever been,” Agassi said. “I just credit the doctors that I was able to get out there today. It’s been such a day-by-day battle.” 
Becker, who faces Roddick in the fourth round, said he was determined to stay focused despite the crowd noise. 
“In the fourth set, it was really loud,” said Becker. “You can’t be that loud. I got goosebumps right before I started serving. 
“It was an unbelievable feeling walking out, feeling that kind of support, even though it was for him, how the crowd was into it. Yeah, that was a lot of fun.” 
Nalbandian lost his second-round match to former U.S. Open champion Marat Safin 6-3 7-5 2-6 3-6 7-6 in a three-hour, 52-minute marathon, while Petrova was sent packing 7-5 6-7 6-3 by France’s Tatiana Golovin. 
With new coach Jimmy Connors cheering him on, Roddick went the distance to subdue big-hitting Fernando Verdasco of Spain, 6-7 6-3 6-4 6-7 6-2. 
“I feel like I got the best of Verdasco today,” said the 2003 Open champion. “I thought he showed his best stuff. And so that makes it especially satisfying. I just tried to fight the whole way, and was fortunate today.” 
Davenport played well below her best but still finds herself in the fourth round after her 3-6 6-3 7-6 victory over Srebotnik. 
The American 10th seed won the decisive tiebreaker 7-5 after saving a pair of match points in the 12th game of the third set. 
“At the end, I was trying so hard to play better and better, probably trying too hard,” she said. 
Unseeded former champion Serena Williams also advanced to the fourth round with a 6-2 6-4 victory over 16th seed Ana Ivanovic of Serbia and Montenegro.

TITLE: Tennis Player Tursunov Mulls Russia-U.S. Clash
PUBLISHER: Reuters
TEXT: NEW YORK — Russian Davis Cup player Dmitry Tursunov says he is dismayed that politics still seem to have a role when his country faces the United States. 
“I don’t treat that match as a Cold War,” Tursunov, who now lives in California, told a news conference at the U.S. Open. 
“That’s how it seems like people interpret it. It’s just a tennis match. It’s Davis Cup.” 
The United States play Russia in the semi-finals of the Davis Cup September 22-24 at Moscow’s Olympic Stadium. 
“Yes it’s Russia versus the United States. There are two flags out on the court. Players don’t treat each other as enemies.” 
World No. 6 Davydenko and former world No. 1 Marat Safin have been chosen to play in the tie alongwith Tursunov, Mikhail Youzhny and Yevgeny Korolev. 
“I think a lot of people put too much emphasis on the fact that it’s a country versus another country. In reality, it’s a team versus a team. 
“It’s like Lakers versus Sacramento Kings. You don’t see people come out with guns ready to fight.” 
Tursunov, ranked 25th in the world, said: “At this point I think I live more out of a hotel room than out of anywhere else.” 
“I think for that purpose you can say that I live in Russia and it would be a true statement. Again, people kind of look at the passport. What passport does he have? He has a Russian passport, that means he’s more Russian.” 
Tursunov has lived in the United States for the last decade but admitted he has been in Russia for as many days as he has been at his home in California, this year. 
“Russian or American. They can’t understand you can have part of both cultures in you. I’ve been trying to explain that for a few years, but it’s not really clicking with a lot of people.”
n World Boxing Association heavyweight champion Nikolai Valuyev of St. Petersburg — the so-called “Beast from the East” — paid a visit to the U.S. Open last week, stopping by the players’ lounge to look for comaptriots Tursunov and Maria Sharapova. 
Zeenews.com reported that the 7-foot tall boxer is probably “one of the biggest tennis fans on the planet.”

TITLE: Berezovsky Pal to Buy Team?
PUBLISHER: Reuters
TEXT: MOSCOW — A business associate of exiled Russian businessman Boris Berezovsky wants to buy the English Premiership club West Ham United, business daily Vedomosti reported on Monday.
Berezovsky’s long-time business partner, Georgian businessman Badri Patarkatsishvili, is planning to start negotiations to purchase the club, Vedomosti quoted two sources close to the businessman as saying.
Vedomosti said the deal could be worth $190.4 million.
Officials at the East London club were not available for immediate comment. Patarkatsishvili could also not be reached for comment.
If the deal materializes, Patarkatsishvili would be the second club owner on the London soccer scene from the former Soviet Union after Russian tycoon Roman Abramovich bought Chelsea in 2003.
Patarkatsishvili has recently sold a leading business daily Kommersant to Russian steel tycoon Alisher Usmanov in a deal estimated by the Russian media at between $200 million and $300 million.
Kommersant was long controlled by Berezovsky, a prominent critic of President Vladimir Putin, from his exile in London. He sold it earlier this year to Patarkatsishvili.
Berezovsky was Russia’s most prominent and controversial businessman in the mid and late 1990s and a Kremlin insider under Russia’s first post-Soviet president, Boris Yeltsin.
He fell out with Putin soon after the president took office and fled in 2000 to London where he lives under the protection of political asylum. Russia seeks his extradition on criminal charges.

TITLE: Croatia Coach Bans 3 Players
PUBLISHER: Reuters
TEXT: ZAGREB — Croatia manager Slaven Bilic has dropped three key players after finding out they partied in a nightclub ahead of the Euro 2008 qualifier against Russia. 
Bilic expelled right winger Darijo Srna of Shakhtar Donetsk, CSKA Moscow striker Ivica Olic and Club Bruges attacker Bosko Balaban. State television reported the incident as the leading story on its main news bulletin on Sunday, dubbing it “the most severe violation of dicipline” by players since Croatia’s 1991 independence. 
The squad have spent this week at their regular training camp in nearby Slovenia, but the three sneaked out on Saturday to visit a nightclub in Zagreb. 
They were spotted by journalists after a brawl among other guests brought the police to the scene.

TITLE: Brazil Beats Argentina In London
AUTHOR: By Rex Gowar
PUBLISHER: Reuters
TEXT: LONDON — Brazil’s match against their rivals Argentina in London on Sunday gave new coach Dunga the true feeling of being back in big-time soccer. “Against Norway I felt very apprehensive but today I felt the adrenaline, I really felt I was the Brazil national team coach,” he said after his side beat Argentina 3-0 in a first friendly international between the sides in London. 
“In my life I was lacking that adrenaline, that thing of battling,” said Dunga, Brazil’s 1994 World Cup-winning captain known for his combative style, told a news conference at Arsenal’s Emirates stadium. 
Dunga made his debut in the Brazil hot seat with a 1-1 draw against Norway in a friendly in Oslo on Aug. 16. 
“I would have felt very bad in defeat. Argentina against Brazil is a war, there’s a great rivalry,” he said. “To lose 3-0 does no-one any good,” added Dunga, looking to restore his team’s pride after its poor World Cup in Germany when it lost the crown they won in Japan in 2002 at the quarter-final stage. 
“When Argentina played football they had us in trouble but from the moment they tried to batter us, Brazil won.” 
Dunga’s counterpart Alfio Basile, still part-time because he leaves his post with Boca Juniors only in the middle of September, was not too distraught by the defeat, arguing that his team had just got together and many players were unavailable. 
“I don’t question the result, perhaps the score, it was not a result we expected but the team needs a lot of work,” said Basile after starting his second Argentina spell following World Cup coach Jose Pekerman’s resignation. 
“They had tremendous finishing and we didn’t. I think we had six goal chances and didn’t put any away, they had the same number and scored three times.” 
Basile said it was a coincidence that all three Brazilian goals came from the right but explained his second half substitutions as looking “to try to shut up their right flank, the attacking runs of Cicinho and Elano.” 
Midfielder Elano, one of the more match fit players on show as he plays his club football for Shakhtar Dontesk in Ukraine where they are in mid-season, scored twice and substitute midfielder Kaka a fine, late third. 
Basile added that his Boca team’s meeting with Sao Paulo in the South American Super Cup before he quits the club game would not be a revenge match after Sunday’s result. 
The Brazil outnumbered their rivals with their yellow colours swamping the small pockets of white and light blue in the 60,000 crowd at the new stadium.