SOURCE: The St. Petersburg Times
DATE: Issue #1217 (83), Tuesday, October 31, 2006
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TITLE: U.S. Steps Up Pressure on Russia, Georgia
PUBLISHER: Combined Reports
TEXT: WASHINGTON — The United States is trying to intensify world diplomatic pressure on Russia and Georgia to ease tension before it spirals out of control, a senior U.S. official said.The U.S. State Department's key person on Europe, Dan Fried, said he made clear in recent visits to Russia and Georgia that tensions must be lowered. Secretary of State Condoleezza Rice delivered the same message while in Russia one week ago.
"Our immediate focus now is in avoiding some blowup," Fried said Friday.
Tensions are high after Georgia briefly detained four purported Russian spies last month. Moscow responded with a sweeping transport and postal blockade on Georgia and a crackdown on Georgian migrants living in Russia. Moscow says it is acting because the Georgian government is plotting to bring its South Ossetia and another breakaway province, Abkhazia, back into the fold by force — allegations Georgia denies.
Fried said diplomatic pressure was becoming more intensive and urgent. In recent days, he has spoken to the European Union, the French and others about the crisis and what could be done, particularly over Abkhazia and South Ossetia.
"We need to work together first to start confidence-building measures ... so that you are not always sitting on the verge of some catastrophe," he said of international efforts to end the crisis. "We are having serious discussions about what we can do."
Options might include putting more international observers into South Ossetia or patrols in Abkhazia as well as more checkpoints to monitor people's movements as a deterrent against "hotheads" causing more trouble, he said.
On Thursday, NATO's secretary general said he hoped Russia would lift its sanctions against Georgia and that the problem of the breakaway regions must be resolved peacefully.
Fried said Russia's economic pressure on Georgia, including a ban on Georgian wine, water, fruit and vegetables, was of great concern.
He said Russia's harassment of Georgians and deportations would only make the situation worse and cast doubt on Moscow's argument it was just addressing immigration concerns. "Did they just discover this immigration problem recently? It is very disingenuous," he said.
Georgian President Mikheil Saakashvili reiterated Friday that his government was ready for high-level dialogue with Russia to end tensions.
"It's necessary to conduct a dialogue with Russia on a high level and other levels," Saakashvili said during a visit to a wine factory in the Akhmeta region east of the capital, Tbilisi.
He said Russia's ban on imports of Georgian wine, mineral water and agricultural products introduced early in the year had benefited Georgia, encouraging it to search for other markets.
Georgia's parliament speaker, meanwhile, criticized a Russian plan to build a pipeline to deliver natural gas to Georgia's breakaway province of South Ossetia without consulting the Georgian government.
Construction began Friday in North Ossetia on the 163-kilometer pipeline that would cross the border into South Ossetia. It is expected to come into operation in the third quarter of next year.
Speaker Nino Burdzhanadze said at a parliament session that the international community should condemn the "illegal construction of a pipeline on our territory."
(Reuters, AP)

TITLE: Rich Shop For Islands, Temples
AUTHOR: By Kevin O'Flynn
PUBLISHER: Staff Writer
TEXT: What is on your shopping list if you have a million or two to spare? How about a 300 euro toaster or a house on a desert island or even the island itself? Or maybe a $1.4 million car?Millionaires, billionaires and those with just 1,000 rubles to their name were some of the tens of thousands of visitors to the second Millionaire Fair at Crocus City.
The four-day fair, which ended Monday, featured 250 stands touting high-end real estate, baldness cures and every other luxury that might appeal to Russia's growing millionaire market.
Twenty years ago, there were no official millionaires in the whole of Russia. Now Moscow has 25 billionaires and the country has 88,000 millionaires, according to Forbes magazine.
The fair, which reeled in more than half a billion euros (about $600 million) last year, is expected to sell more this year, said Derk Sauer, the head of Independent Media, one of the organizers of the fair and the publisher of The St. Petersburg Times.
"It's very busy today," Sauer said Sunday. As he was speaking, Chechen Prime Minister Ramzan Kadyrov, who recently received a half-million-dollar sports car for his 30th birthday, walked by. "It is definitely busier and more successful than last year."
Asked what distinguished Russian millionaires from those of other countries, Yves Gijrath, the fair's founder, told a crowd of fair-goers, "They spend more," eliciting laughter.
The singer Sarah Brightman, following in the footsteps of last year's Bryan Ferry, provided entertainment Friday for the opening night, which drew 9,500 attendees. Also present Friday was Polina Deripaska, the wife of metals oligarch Oleg Deripaska.
Vendors kept busy throughout the fair.
A Bugatti Veyron was sold for $1.4 million, the most expensive — and probably the most ecologically unfriendly — car on the planet.
And the world's priciest mobile phone, the Swiss-made Goldvish, which is made of yellow gold and features 1,700 diamonds, was being hawked for $1 million a pop. (While there appeared to be no takers, the company has made a limited investment. To date, only three have been manufactured.)
"They have beautiful hair, beautiful clothes — why should they have a shitty plastic phone in their bag?" said Ephraim Goldstoff, the company's diamond consultant.
"The Russian market is very important. They have lots of money, and they don't know what to do with it," Goldstoff explained.
Also on sale were 19th-century horse carts, Hummers and helicopters. High-end real-estate — including a retreat off the Thai coast that runs for 2.5 million euros ($3.16 million) — was also a big hit.
Other properties up for grabs at the fair were in Miami, Spain, Cyprus, Bulgaria and an island off the coast of Dubai. There there was the isle once owned by John Wayne.
"We bought it from a guy who sells islands, and we have it in black and white that he used to own it," Klaus Ilter said of Taborcillo, an island situated not far from mainland Panama. The real estate broker had sold three homes on the island, each running about half a million dollars, by Sunday afternoon.
For those who'd rather stay home, you could always just build your own Versailles. Luxury Homes managed to attract a stream of visitors curious to learn more about their mock Normandy mansions, fake Austrian baroque country houses, and brand new ancient Greek temples that double as dachas.
Sergei Ponomarenko, the president of Luxury Homes, denied that the vulgar New Russian style made famous in the 1990s was still around.
"There are no golden toilets," Ponomarenko said. "People in Russia want to have comfort. In France, you can buy old. Here you can't."
Not everyone agreed.
"I don't think there is any elegance," said fashion writer Alexandre Vassiliev, who was being paid to drink champagne at one of the stands. "All those women wearing diamonds and in beautiful clothes, they were queuing for toilet paper not long ago," Vassiliev said.

TITLE: Nuclear Power Plant Shuts Down
PUBLISHER: The Associated Press
TEXT: MOSCOW — An automatic safety system shut down a reactor at a nuclear power plant just outside St. Petersburg on Saturday after a short circuit, the state-run company overseeing Russia's nuclear power plants said.Rosenergoatom said there was no radiation leak from the unplanned shutdown at the Leningrad nuclear power plant's No. 2 unit — the second shutdown to hit the plant in a week.
The company did not say what caused the short circuit. Severe weather in the St. Petersburg area has caused some flooding in the city, and there have been reported power outages throughout the region.
The emergency system stopped two turbine generators due to sludge coming into the condenser's pipes, before shutting down the reactor altogether, the company said.
Radiation levels around the plant were normal, it said.
Last Friday, the automatic safety system shut down the same reactor for unknown reasons.
The Leningrad plant on the Gulf of Finland has four 1,000-megawatt graphite RBMK reactors — the same as the Chernobyl nuclear plant, whose explosion 20 years ago sent radioactive fallout across northern Europe in the world's worst civilian nuclear accident.
Russia has 10 nuclear power plants with a total of 31 nuclear reactors.

TITLE: Governor Ends Dispute Over Actors' Property
PUBLISHER: The St. Petersburg Times
TEXT: The House of Veterans of the Stage, occupied by retired actors, will not be put in the hands of developers, St. Petersburg Governor Valentina Matviyenko said Saturday, Interfax reported, resolving a long-standing dispute.According to its agreement with the Union of Theater Workers, the building's owner, Systema-Hals, the real estate division of the Moscow-based Sistema financial corporation, was to reconstruct the building in exchange for acquiring a section of the adjacent park on which it planned to build an elite residential complex, Interfax reported.
Matviyenko said that she had had a conversation with the head of Sistema Vladimir Yevtushenkov and "he agreed that the realization of the investment project is impossible," the news agency reported.
"The city [government] has been against this idea … We would never let this project go ahead, nor the development of this unique neighborhood in St. Petersburg," she said Saturday as quoted by RIA News.
Sistema's plan has also received strong criticism from President Vladimir Putin, who commented on the issue during his live interview last Wednesday.
"They are talking about changing the legal status of this territory and handing over a part of it for commercial construction," Putin said during the interview.
"I think that both the Union of Theater Workers and this large commercial enterprise — I'm talking about Sistema — instead of taking [the territory] away from the veterans could give them aid in helping with the reconstruction of the building in which the veterans live," Putin said.
Putin said that the $5-million cost of the reconstruction was not a large amount for a company such as Sistema and suggested that the firm could simply donate the full amount.
"They could just help," Putin said. "Voluntarily, without taking away from the veterans the property that rightly belongs to them and that has been in their possession for many decades," he said.
"But if they are such a poor company [that they can't afford this donation] then we will allocate the money from the budget," he said.

TITLE: Trutnev Declares Highest Income
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — Natural Resources Minister Yury Trutnev — the scourge of foreign energy investors — earned more than any other Cabinet member last year and 22 times more than British Prime Minister Tony Blair.Transportation Minister Igor Levitin and IT and Communications Minister Leonid Reiman placed second and third, while Economic Development and Trade Minister German Gref came in last.
Trutnev earned the ruble equivalent of $7.9 million, almost double his previous year's income, according to an annual list of ministerial income declarations published Friday in government-owned Rossiiskaya Gazeta.
Trutnev wore swank Prada shoes — with the signature red stripe on the back — even as he slogged through mud to inspect construction of the Sakhalin-2 oil project on Wednesday. Trutnev has threatened to put the brakes on Sakhalin-2, the country's largest foreign investment project, and other foreign-owned oil and gas projects during an ongoing state drive to secure more control over the energy sector.
Trutnev, a former Perm region governor, said he had received most of the money as dividends from a stake in a Perm company, EKS.
"Dividend payments on the shares peaked last year," he said Friday at a news conference, where he also reported the results of his inspection of Sakhalin-2 earlier in the week.
EKS controls a chain of supermarkets called Semya, or Family, in the city of Perm and the surrounding region. EKS is thought to be majority-owned by the current Perm governor, Oleg Chirkunov.
Trutnev did not disclose the size of his stake.
Civil servants are not required to surrender stakes in private businesses under the law on state service, which came into effect in 2004.
Trutnev generated most of his 2004 income of $3.9 million by selling a stake in EKS International Trading, an export and import business that he founded, Vedomosti reported in January.
Trutnev out-earned not only his fellow ministers but also Western ones last year. The average U.S. Cabinet member earned $172,000, while British Prime Minister Tony Blair collects $350,717 per year.
Levitin, the next-largest cash earner on the list, trailed far behind Trutnev with a declared income of $446,482. The transportation minister declared an income of $5 million the previous year.
Transportation Ministry spokesman Timur Khikmatov said only Levitin could comment on why his income had dropped so steeply. Levitin could not be reached Friday.
Health and Social Development Minister Mikhail Zurabov's income fell even more, from $1.5 million in 2004 to $44,385 last year. The reason for the decrease was unclear.
The third-largest 2005 income — Reiman's — was $410,800, an increase of about $80,000 compared to 2004. Reiman earlier this year denied findings by a Zurich tribunal that he was the sole beneficiary of a Bermuda-based investment fund called IPOC, which has stakes in Russian telecom assets including cellular operators MegaFon and SkyLink.
Gref declared the smallest income, $44,200.
Of all Cabinet members, Reiman declared the most property: More than 20,000 square meters of land, five apartments — up from four the previous year — and a spacious country house. He owns a stake in one more apartment and also has a government apartment.
Zurabov is the second-biggest landlord and the owner of a huge country mansion of 1,360 square meters. His land holdings doubled year on year.
Zurabov's declaration puzzled Yelena Panfilova, director of the Russia branch of international corruption watchdog Transparency International. "How can someone with an income like this maintain such a country house and pay the taxes?" she said.
The incomes of most other ministers were consistent with their salaries, which range from $3,000 to $10,000, Panfilova said.
However, Cabinet ministers may have received other revenues and hidden them by making their relatives, close associates or affiliate companies the official beneficiaries, Panfilova said.
Apart from Trutnev, just one other minister shed some light on a source of his income.
Agriculture Minister Alexei Gordeyev received payments for unspecified "scientific work," Rossiiskaya Gazeta reported.
Interior Minister Rashid Nurgaliyev was absent from the list. Calls to Cabinet spokesman Yevgeny Revenko went unanswered Friday.
President Vladimir Putin's income was not on the list. Under a 2004 decree setting state salaries for top civil servants, the president's annual salary is 1.76 million rubles ($65,680).Staff Writer Miriam Elder contributed to this report.

TITLE: New 'Just Russia' Party Says Putin Knows Best
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: Russia over the weekend became possibly the first country in history with a two-party system in which both parties share the same overriding principle — that the executive is always right.With the merger Saturday of the Party of Life, the Rodina party and the Party of Pensioners, the system appears in place.
The new party, Just Russia: Motherland, Pensioners, Life, is to play the role of the center-left opposition. Its rival is to be the established, center-right United Russia.
"If United Russia is the party of power, we will become the party of the people," said Federation Council Chairman Sergei Mironov, who was elected Just Russia's leader Saturday.
"We will follow the course of President Vladimir Putin and will not allow anyone to veer from it after Putin leaves his post in 2008," Mironov said.
Mironov's comments came at a convention creating Just Russia.
At separate simultaneous conventions in Moscow, delegates from the Party of Life and the Party of Pensioners voted to strip their groups of party status, enabling members to apply for membership in Rodina.
Delegates at the conventions then voted to change Rodina's name to Just Russia. Rodina was selected as the core group of the new coalition party because it is the only one of the trio with seats in the State Duma, Rodina leader Alexander Babakov said.
Also on Saturday, Babakov was elected secretary of Just Russia's presidium, and Igor Zotov, leader of the Party of Pensioners, became secretary of its political council.
Despite varying widely in size, the parties were allotted equal shares of seats on the new party's governing panels.
Putin sent congratulations, saying the creation of Just Russia was "proof of a growing creative potential in Russian society."
The new party will hold a convention early next year to adopt a charter, and it will be registered soon after, giving Just Russia enough time to compete in regional legislature elections in March, Mironov said.
Using rhetoric similar to that of the Communist Party, Mironov said Just Russia sought to siphon votes away from the Communists by defending "the interests of working people." Fair hourly wages, pension reform and a more equitable distribution of the wealth derived from natural resources top the party's agenda, he said.
Mironov also decried United Russia's monopoly, as he sees it, of the nation's political, economic and "administrative" resources.
Noting that Rodina and the Party of Life were Kremlin concoctions, Vladimir Pribylovsky, an analyst with the Panorama think tank, said the party would play a dual role. "It's the party of the president's left foot complementing the right foot of United Russia," he said. "It is also a party of the opposition of the master's maid to the master's butler."

TITLE: Billionaire Says Space Travel a Lifelong Dream
PUBLISHER: The Associated Press
TEXT: MOSCOW — The billionaire software engineer set to become the next space tourist said he has been interested in space since his boyhood in the Soviet Union.Charles Simonyi, 58, left Hungary at 17, roughly one decade after the launch of Sputnik, the first man-made satellite. He moved to the United States to study engineering and computer science, and went on to help develop two of the world's most popular software applications, Microsoft's Word and Excel.
Simonyi is paying U.S.-based Space Adventures $20 million to $25 million to take him to the international space station in March aboard a Soyuz spacecraft, the company said. He will be the fifth person the company has taken to space.
"Dr. Simonyi has been successful in a much larger way on Earth than we've been in space,'' said Eric Anderson, the company's president and chief executive.
Simonyi worked for Xerox in California for eight years before moving in 1981 to Microsoft. He founded Intentional Software Corp., in 2002.
He said last week that he felt like he was making a contribution to the future of civilian space flight. His own interest in space as a child helped him learn English — some of his first English words were "propellant" and "nozzle" — and his knowledge of space trivia led to victory at age 13 in a junior astronaut contest.
The prize was a trip to Moscow and a chance to meet one of the first cosmonauts, Pavel Popovich.

TITLE: In Almaty, the Hungry Will Eat a Horse
AUTHOR: By Michael Steen
PUBLISHER: Reuters
TEXT: ALMATY, Kazakhstan — It felt like I had been chewing for days, yet the plate of stewed horse, lamb and unidentified liver, served on a bed of greasy dough, appeared to be getting no smaller.Determined to prove to the local officials hosting a group of foreign reporters that I would not spurn the Kazakh national dish, beshbarmak, I chomped on.
If only, I thought, there was something to wash it down with other than vodka, still a staple even in the nominally Muslim parts of the former Soviet Union.
On cue, a waitress appeared with a steaming bowl about the right size to be a large tea cup. Tea, I thought, just the thing.
A swift gulp and everything got a lot worse. It was a bowl full of hot, astonishingly fatty broth.
Kazakhs were a nomadic people for much of their history and it shows in their traditional cooking. Vegetables do not really feature and, though I have never checked, I'm fairly sure "low cholesterol" does not translate.
The staple in Kazakhstan is meat.
Beshbarmak, which means "five fingers" as you are supposed to eat it with your hands, is served both in humble yurts, or tent dwellings, deep in the countryside and at upscale social events in the cities.
At a wedding it will often join koybas, a boiled sheep's head, as one of the delicacies on the menu. Serving koybas is itself a ritual. The host cuts the head into slices and serves different pieces according to the status of each guest.
Brain is said to be the best and would go to the most honored diner. Other parts are less sought-after. One Kazakh friend complains that he always seems to end up with one of the ears. Chewy and not very tasty. There are plenty of dishes not reserved for feast days. Kumys, fermented mare's milk, is full of horsey goodness, apparently, but tastes like fizzy yoghurt well past its sell-by date.
I first tasted some kumys during a day's horse riding outside Almaty, Kazakhstan's biggest city. The owner of the stables had given me a young stallion, the only male in the group, despite my protestations that I was a novice.
The horse soon had my measure and spent much of the time bucking and rearing. I clung on until a kindly watchman calmed it down so I could dismount.
He welcomed me to his caravan where I sat with his family in the outdoor kitchen. Flies buzzed around as the watchman's wife fed me kumys and kurt, a salty, hand-rolled ball of dried and filtered sour milk.
Kumys and kurt smell like a farmyard doused in manure, at least to my untutored nose.
Of course, it could be said that foreigners who dislike Kazakh food merely have not acquired a taste for it, a view supported by my British wife's love of kurt.
There are many varieties of horse meat sausage. Kharta is horse fat wrapped in horse intestine. It melts in your mouth.
Camels also feature; fried camel offal can be quite good, at least after a lot of kharta.
The Kazakhs themselves, however, are increasingly turning away from their traditional dishes. Italian, Thai, and improbably for a landlocked place, sushi vie for attention in restaurants designed to look (and charge) the same as eateries in New York, London or Tokyo.
The Kazakhs can even joke at their own cuisine: A Russian gives a Kazakh friend a pig and tells him to feed it whatever he eats himself. A few weeks later the two friends meet again and the Kazakh says the pig has died.
"I did exactly as you said," the Kazakh says. "It had tea for breakfast, tea for lunch, and beshbarmak in the evenings."

TITLE: Kazakhstan Asks Borat To Visit
PUBLISHER: The Associated Press
TEXT: ALMATY, Kazakhstan — A top Kazakh official has an invitation for the British comedian whose depiction of a homophobic, misogynistic, English-mangling Kazakh journalist has outraged the Central Asian nation: Come visit.Deputy Foreign Minister Rakhat Aliyev said he understood why Kazakhs were unhappy about Sacha Baron Cohen's character, Borat.
"But we must have a sense of humor and respect other people's freedom of creativity," Aliyev said, Kazakhstan Today reported.
"I'd like to invite Cohen here," he said. "He can discover a lot of things. Women drive cars, wine is made of grapes and Jews are free to go to synagogues."
Though to some Cohen's antics are potentially more insulting to Americans, Kazakhs have long seethed at his popularity and his maligning of their country. Cohen's Borat character has presented inhabitants of Kazakhstan as addicted to horse urine, fond of shooting dogs, and viewing rape and incest as respectable hobbies. Kazakh officials have tried to respond to the outrageous depictions.
The Foreign Ministry recently ran ads on CNN, in The New York Times, and the International Herald Tribune citing facts and figures on the nation's economic growth, civil liberties and cultural achievements.

TITLE: Kiev Rejects Proposal On Sevastopol Lease
PUBLISHER: The Associated Press
TEXT: MOSCOW — Ukraine on Thursday rejected President Vladimir Putin's proposal to extend the Russian military's lease on the Black Sea port of Sevastopol.Ukrainian Defense Minister Anatoliy Hrytsenko said his country would uphold the 1997 agreement that allows the Russian navy to remain in Sevastopol until 2017. But when that expires, Ukraine would expect Russia's Black Sea Fleet to leave, Hrytsenko said, according to his office.
"I am convinced that there shouldn't be and won't be any permanent foreign military base on Ukrainian territory, whether it be members of NATO, members of the Tashkent agreement or the Commonwealth of Independent States collective security agreement," Hrytsenko said.
During a televised call-in show Wednesday, Putin said Russia would be interested in discussing an extension of the Sevastopol lease.
Russia pays Ukraine $93 million per year to base its fleet in Sevastopol. The presence of Russian troops in Ukraine has sparked anger among Ukrainian nationalists and given rise to a number of disputes between Ukraine and Russia over who has ownership of lighthouses and other property in the region.
Analysts had suggested that in exchange for promising Ukraine a below-market rate for gas imports for several years, Ukraine might agree to extend the port's lease to the Russian navy. Hrytsenko, however, insisted that no such talks were underway.
"If someone is carrying out such talks, they are behind the scenes, secret, and ultimately, illegal," Hrytsenko said.
Hrytsenko is an appointee of Ukraine's pro-Western President Viktor Yushchenko, who was in Helsinki on Thursday in advance of an EU-Ukraine summit scheduled for Friday.
Yushchenko reiterated the importance of closer integration with Europe. "We hope that the discussions tomorrow will present us with a good initiative, with a clear mandate ... for our role in the future negotiations with the EU," Yushchenko said. "One of the strategic goals is to get a European perspective in our foreign policy."
On Friday, the Ukrainian leader will participate in a summit with EU officials, which is expected to launch negotiations on an economic and political cooperation agreement. Ukraine hopes for eventual membership in the EU but the bloc is noncommittal amid growing wariness over expansion as it prepares to take in Romania and Bulgaria and is engaged in negotiations with Croatia and Turkey.

TITLE: Grozny in Throes of Building Boom
AUTHOR: By Steve Gutterman
PUBLISHER: The Associated Press
TEXT: GROZNY — With a sweep of his walkie-talkie, the black-clad special police officer shows off some of the construction projects transforming Grozny: a newly restored boulevard, apartment buildings under repair and a massive mosque locals boast will be the biggest in Europe.The officer says in a couple years, the city will look "just like before" — meaning before federal forces launched the disastrous 1994-96 war that left separatist rebels in charge and the once-attractive city in ruins.
Grozny was pounded again after Russia launched a second campaign in 1999. But with the fiercest fighting in the past, the city is in the throes of a construction boom that is starting to erase the effects of war.
"It's getting better every day," said Tamerlan Abdulayev, 18, who travels to Grozny from a nearby village to attend trade school.
When he and a friend started three years ago, they would head home immediately after classes because the destroyed capital was depressing and there was nothing to do. "Now we stay and look around," he said.
A look around Grozny presents a strange mix.
Dilapidated apartment buildings stand by a road to the newly restored airport, expected to start regular operations soon. A towering new arch over a road leading into Grozny, decorated with portraits of Putin and the late Chechen President Akhmad Kadyrov, gives way to a wasteland on the city's outskirts.
The city still bears countless scars of battle: vines snake over the walls of bombed-out brick homes, and half-destroyed apartment buildings line streets, some with lights shining from windows of apartments occupied by returning refugees with nowhere else to go.
The arch and airport were officially opened this month, on the 30th birthday of Chechen Prime Minister Ramzan Kadyrov, the son of the president who was elected in 2003 and assassinated the following year. The younger Kadyrov is widely credited as the force behind the building boom, which has taken off since he assumed the post less than a year ago.
As head of the government, Kadyrov is responsible for economic issues, and he controls a fund in his father's name that helps pay for the restoration. Last month, he denied allegations the fund was financed by skimming off state salaries, saying the money comes from donations made by wealthy Chechens and other sources.
For many in Chechnya, the source is beside the point. They are finally seeing tangible improvements in a place long seen as a money pit — a fount of cash for corrupt officials involved in overseeing a reconstruction that went nowhere for years.
"Huge money was spent and that was it, there were ruins. But after years of living in ruins — people in Grozny don't remember anything else — suddenly they begin to restore the city, restore streets," said Alexander Cherkasov, a Chechnya expert at the human rights group Memorial. "A serious restoration of the city is under way."
It has reached Zargan Bugayeva, 36, whose second child was born five days after her husband and mother-in-law were killed when Russian planes bombed a house where they had sought refuge.
She later returned to her Grozny apartment, closed off two war-wrecked rooms and began to live in what was left more or less livable: the kitchen and another room.
Workers have begun restoring her building, she said, but she added that the reconstruction in Chechnya would not fix thousands of ruined lives.
"I feel no happiness about these changes," she said. "Even if they build a mansion of pure gold for every resident, they are powerless to bring back the dead or restore the health of people crippled in this war nobody needed."
Kadyrov spokesman Lyoma Gudayev said that under the region-wide reconstruction program — called "No Trace of War" — the capital will be "practically completely restored" within two to three years.
The change has its limits. Many residents live in squalid conditions, often without running water even in restored buildings. And critics of the Kremlin and Chechnya's Moscow-backed government say that in addition to papering over the wounds of war, the reconstruction is covering up a climate of fear sown by government forces they claim use abductions, threats and torture to maintain control.
Desperate for normalcy, many Chechens are willing to accept the trade-off, Cherkasov suggested.
Residents see the physical improvements "and they are inclined to embrace this, because it is easier to accept it and not to think about the frightening things that are happening," he said. "People are very tired, and they are inclined to take this for stability."
Not all Chechens are convinced. Actress Laila Baisultanova, 23, is glad streets and schools are being restored, but her brother disappeared more than two years ago, and she said abductions are a persistent problem that is not being resolved. Strolling near a statue of the elder Kadyrov, Baisultanova expressed concern about the quality of the construction — in words that sounded like a warning about Chechnya's fragile future.
"What's built fast collapses fast," she said.

TITLE: Mortgages Too High For Buyers
AUTHOR: By Dmitry Nazarkin and Yelena Gorelova
PUBLISHER: Vedomosti
TEXT: Demand for mortgages fell last month for the first time in years, banks said. For some, excessively high mortgage prices squashed any hope of purchasing an apartment, while other potential homeowners chose to wait out the price boom in hope of a downturn."For the first time, we have run up against falling demand," said Sergei Tropin, head of marketing and retail services for International Moscow Bank, or MMB.
Demand for mortgages usually increases in the fall, but the situation this year is atypical, said Maria Serova, chief of credit development for Vneshtorgbank 24. Almost all the major market players have seen a drop in demand, she said.
Nine of 10 leading mortgage credit banks surveyed by Vedomosti said they had seen a decline in mortgage applications from August to September.
Mortgage applications to the Bank of Moscow and MMB almost halved, while CIT Finance saw a drop of about 30 percent and Vozrozhdeniye Bank of 25 percent.
The remaining banks averaged 10 percent declines. Only Absolut Bank reported an increase in demand.
Realtors also recorded declining demand. Irina Radchenko, president of Laureal Realty, said her firm had received 530 calls in September, down from 700 in August. Sergei Maxotkin, mortgage credit manager of MIAN, said the number of calls from people interested in apartment mortgages remained at August levels, rather than the 200 percent to 300 percent increase the agency usually sees in September. The number of calls also fell at Best Realty, said company management chairman Grigory Poltorak.
Bankers blamed rising real estate prices for the problem. In September, prices grew so high that even with the maximum credit allowable from banks, many buyers were left with too little to purchase an apartment, said Alexei Guryanov, chairman of the board for Russian Mortgage Bank.
Similar complaints were expressed by Anna Kaminskaya, chief of retail business for Sobinbank, and by Oleg Skvortsov, vice chairman of management for Absolut Bank.
Apartments prices have risen by an average of 65 percent since the beginning of the year, reaching $4,000 per square meter. As a result, Guryanov said, the minimum mortgage has risen from $50,000 last year, to about $120,000 currently.
Monthly installments on such a mortgage can exceed $1,300 — meaning that households that apply must earn at least $2,700 per month. Most banks limit monthly payments to 45 percent to 50 percent of a family's combined income, although sometimes it reaches 55 percent to 60 percent.
Last year, mortgages were affordable for people earning at least $2,000 per month, but now the minimum required salary is $3,000, Guryanov said.

TITLE: Alcohol Poisonings Sweep Country
PUBLISHER: Combined Reports
TEXT: Dozens of people have died and more than a thousand have been hospitalized from an alcohol poisoning epidemic across the country that was spawned by the government's crackdown on counterfeit wines and spirits.The latest reports of mass poisoning with toxic alcohol have come from the town of Balashov in the Saratov region. In recent weeks, three people there have died from drinking liquids used for servicing cars. A total of 107 people in the town were hospitalized.
All of those hospitalized were diagnosed with hepatitis caused by severe intoxication, the region's chief epidemiologist, Aleksei Davilov, told RIA-Novosti. Balashov police have seized eight tons of uncertified alcohol in local retail shops.
The Saratov region has been spared the losses seen elsewhere in the country. Irkutsk, Perm, Amur, Belgorod, Volgograd and Pskov are the worst-hit regions. Since mid-September, 27 people have died and 648 have been confined to hospitals in the Irkutsk region. Fifteen have died in the Pskov region, where authorities have declared a state of emergency. Six have died in Perm.
The government crackdown earlier this year prompted many to turn to homemade spirits or even industrial alcohol, which is unfit for consumption.
Around 42,000 people die each year as a result of alcohol poisoning, according to the Federation Council. Federal officials have criticized the efforts of their regional representatives to head off the crisis.
"If regional authorities do not address these problems, the national health project will not achieve its aims," First Deputy Prime Minister Dmitry Medvedev said Friday, referring to the country's $2.2 billion upgrade of the health system, Interfax reported.
Homemade alcohol — known in Russian as samogon, which means self-distilled — is common, and perfume, aftershave products, cleaning liquids and various technical fluids are all widely consumed.
"Take, for example, a liquid intended to spark a campfire. People in low-income groups don't use it to spark campfires — they drink it," Gennady Onishchenko, the nation's top epidemiologist, was quoted as saying by the Gazeta.ru news web site Friday.
Proposals for combating the problem have ranged from reducing taxes on real vodka to bringing back state control of the vodka industry.
Dmitry Dobrov, press secretary for the Union of Alcohol Producers, said lowering taxes on vodka would make it easier for legal vodka to compete pricewise with illegal vodka. This, in turn, would encourage consumers to choose their vodka based on quality, not price.

TITLE: Volkswagen Starts Work On $510M Kaluga Plant
PUBLISHER: The Associated Press
TEXT: MOSCOW — German automobile giant Volkswagen broke ground on a new assembly plant in Kaluga on Saturday — the latest investment by foreign automakers looking to tap cheap labor costs and Russians' growing demand for cars.Volkswagen CEO Bernd Pischetsrieder joined Economic Development and Trade Minister German Gref in laying the symbolic foundation stone for the 400 million-euro ($510 million), 115,000-vehicle plant.
Volkswagen said the project should directly create 3,500 new jobs in the country.
"The automotive market in Russia is one of the world's most interesting," Pischetsrieder said in a company statement. "So far, the group brands have only been represented in Russia through sales companies. However, if we wish to enjoy sustained benefits from the growth forecast for this market, we have to produce in Russia as well.
"The fact that a world-famous company is coming to Russia, to Kaluga, speaks for itself," Gref said, Itar-Tass reported. "But the annual production of 115,000 economical cars — which Russian citizens will buy — makes us happy most of all because this increases their prosperity."
The ceremony was also attended by Kaluga Governor Anatoly Artamonov.
When regulators gave their approval earlier this year, the Economic Development and Trade Ministry said the facility would reach full production by September 2008, and would initially assemble the Skoda Octavia but would eventually roll out VW's Polo, Passat and Touareg brands, which are popular in Russia.
Major international automakers have steadily increased their investment and production in the country, seeking to tap the nation's growing middle class and a lack of quality Russian-designed and built vehicles.
Toyota broke ground on a $140 million facility outside of St. Petersburg last year, as did France's Renault, which opened a $250 million assembly plant for its Logan model in Moscow and South Korea's Kia Motors, which launched an assembly line for its Spectra model in Izhevsk.
According to the European Bank for Reconstruction and Development, the country has about 157 cars per 1,000 people — on par with Argentina but far below the Polish figure of 250.

TITLE: Commissioner Calls For Greater Pipeline Access
PUBLISHER: The Associated Press
TEXT: MOSCOW — The European Union's energy commissioner on Monday reaffirmed the call for Russia to open up access to its natural gas pipeline transport system, and called for greater transparency in energy relations between Russia and its European neighbors.Andris Piebalgs told a Russia-EU energy conference that the EU expected Moscow to respond to longtime European calls to allow independent companies access to Russia's export pipelines, which now only carry gas sold by Russia's state-controlled monopoly OAO Gazprom. That effectively gives the gas giant the power of veto over independent gas projects.
"There is a recognition that there is a need for secure and predictable investment conditions to both the European and Russian companies," Piebalgs said at a Russia-EU energy conference that opened in Moscow on Monday.
"There is also a need for a level playing field in terms of market access and access to infrastructure, including third-party access to pipelines in both Russia and the EU."
With Russia providing a quarter of EU's oil and gas, EU leaders want Putin to guarantee reliable access to his country's vast resources. The EU has been seeking to persuade Russia to ratify an international energy charter that it signed in 1994 regulating transit and investment in the energy sector, and which would allow for market competition between foreign and independent companies.
But Russian President Vladimir Putin said Moscow would not ratify the charter in its current form, saying that the EU nations pushing for access to Russia's energy deposits and long-distance gas pipelines must offer assets comparable in value.
Russian regulators' recent close scrutiny of deals with Western energy firms and Gazprom's decision earlier this month to develop the huge Shtokman gas field without foreign partners suggest the Kremlin is seeking to increase state control of the energy sector.
"The regular flow of information with respect to policy will increase our understanding," Piebalgs said Monday, adding that it would contribute to what he called a "more healthy spirit of confidence."
Apparently responding to Russian concerns that EU competition rules could jeopardize long-term gas supply contracts to Europe, Piebalgs said that, if such contracts enabled investments in infrastructure, they would be regarded favorably under EU rules.
"Russia also needs to ensure a secure investment climate, which will reduce as far as possible the level of commercial and noncommercial risk," Piebalgs said.

TITLE: IN BRIEF
TEXT: Air MergernST. PETERSBURG (SPT) — The Rossia state transport company has completed the reorganization of Pulkovo state unitary aviation company, Prime-TASS reported Friday.
Pulkovo has merged with Rossia. The joint company, GKT Rossia, is registered in St. Petersburg and retains all rights and responsibilities of Pulkovo.Railway RublesnST. PETERSBURG (SPT) — Oktyabrskaya Railway will invest 1.1 billion rubles ($40 million) into the reconstruction of five railway complexes in St. Petersburg, Interfax reported Friday.Sberbank AssetsnST. PETERSBURG (SPT) — Sberbank Northwest increased net assets by 31 percent up to 268.3 billion rubles ($9.93 billion), over the first nine months of this year, Interfax reported Monday.
The bank reported net profit of over five billion rubles.Sovkomflot DelaynST. PETERSBURG (SPT) — Sovkomflot has postponed registering in St. Petersburg until summer 2007, Interfax reported Monday.
According to RBC, during the first nine months of 2006 Sovkomflot increased net profit by 40 percent up to $124 million, while revenue increased by 25 percent up to $500 million compared to the same period last year.Shipyard RevenuesnST. PETERSBURG (SPT) — Admiralteiskiye Shipyards plans to increase revenue by 40 percent next year, Interfax reported Monday.
This year the company expects a revenue of 10 billion rubles and 14 billion rubles in 2007. By 2011 the company will invest 4.3 billion rubles into development.

TITLE: Show of Thanks For Rosneft IPO
PUBLISHER: The Moscow Times
TEXT: President Vladimir Putin invited foreign bankers and oil executives to his Novo-Ogaryovo residence Friday night to thank them for helping pull off Rosneft's IPO.Noting that July's initial public offering was the world's largest in the oil and gas sector, Putin suggested that the foreign partners had done the right thing by taking part.
"I think you can be happy with our joint work," he told the executives, who included Morgan Stanley chairman and executive director John Mack and JP Morgan CEO William Winters, Interfax reported.
Rosneft's capitalization has risen to $92 billion, up $12 billion since July when its stock began trading publicly, Putin said in comments posted on the Kremlin web site.
He said 115,000 individuals had purchased shares in Rosneft and stressed that the company must play by market rules.
Also attending the meeting were Herbert Walter, executive director of Dresdner Kleinwort investment bank; George Ratilal, vice president of Malaysian state oil company Petronas; Rair Simonian, chairman of Morgan Stanley; Chen Tonghai, chairman of Chinese oil company Sinopec; Hans-Jorg Rudloff, chairman of Barclays Capital and member of Rosneft's board; Sergei Bogdanchikov, president of Rosneft, Pyotr Aven, president of Alfa Bank, Andrei Kazmin, chairman of Sberbank; and Igor Sechin, deputy chief of the presidential administration and chairman of Rosneft, the Kremlin said in a statement.
In the IPO, Rosneft raised $10.4 billion for 14.9 percent of its shares on exchanges in Moscow and London. BP, Malaysia's Petronas, China's CNPC and a fourth mystery buyer — widely believed to be Gazprombank — snapped up half of the offering.
Gazprombank may have been representing billionaires Roman Abramovich, Vladimir Lisin and Oleg Deripaska as well as companies close to Kremlin-linked Surgutneftegaz, Vedomosti reported in July.

TITLE: Trutnev Offers Hope To Shell's Sakhalin-2
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: MOSCOW — Natural Resources Minister Yury Trutnev struck a conciliatory note with Shell's Sakhalin-2 project Friday, saying he was not seeking to shut it down and acknowledging that the operator had made some progress in cleaning up environmental damage."Our job isn't to punish the company, but to see that they continue working properly," Trutnev told foreign news media at a briefing in Moscow after a three-day tour that took him to Sakhalin.
"We will try not to stop the whole project. It all depends on how the company works," Trutnev said. "Let's note some of the good things — on parts of the pipeline, you can see that the company has been trying to restore order." Trutnev has threatened to withdraw an environmental license for Sakhalin Energy, which operates Sakhalin-2. That threat, coupled with similar warnings against TNK-BP and ExxonMobil, has prompted fears of a wider campaign against foreign oil majors.
Trutnev singled out TNK-BP, which has come under threat from the ministry over the pace of development of its Kovykta field in east Siberia. "On the question of well usage, they're the leader in the negative sense," Trutnev said, adding that a decision on the company's environmental license would be made by January.
Under a 1992 agreement, the company is required to supply 9 billion cubic meters of gas per year by 2006, but it has been selling just 2.5 billion cubic meters per year to local markets due to a lack of pipeline facilities.
Trutnev said the ministry had not yet begun an investigation into ExxonMobil-run Sakhalin-1 as it did not have the manpower to do so. "I don't think we can work on two such large projects at the same time," he said.
Gazprom has been in talks to acquire a 25.1 percent stake in Sakhalin-2, and has said it would be interested in buying out the Russian shareholders in TNK-BP if they chose to sell.
Trutnev refused to comment on Gazprom's interest in his investigations against Shell and TNK-BP, saying he followed that aspect of the affair "just from articles in the newspapers." Trutnev began his three-day trip with a short visit to Rosneft-owned Yuganskneftegaz — Yukos' former main production unit — and said he had failed to find any violations there.
"We went with the intention of finding some faults, but we didn't see anything to worry us greatly," Trutnev said. Trutnev's visit to a Yuganskneftegaz field lasted about five minutes, and his spokesman Nikolai Gudkov said the visit was not an inspection but an opportunity for the media to take photos.
Prosecutor General's Office spokesman Alexander Nikonov confirmed Friday that the office would wait to get the results of Trutnev's audit before deciding whether to open an investigation into Sakhalin Energy.

TITLE: Gazprom Delays Shtokman Offshore Gas Field to 2013
PUBLISHER: Bloomberg
TEXT: Gazprom delayed the start of production at its giant Shtokman offshore natural gas field in the Arctic by two years, to 2013, Interfax said Sunday.The company had planned to produce its first liquefied natural gas, or LNG, at the field in July 2011, deputy CEO Alexander Ananenkov said in Ufa on Sunday, Interfax reported.
Gazprom this month said it would develop the $20 billion field itself, spurning offers from Western producers including Chevron and Total to exploit the country's biggest untapped gas deposit.
Gazprom initially planned to ship Shtokman's output as LNG to theUnited States to break into the world's largest energy market. The field has 3.7 trillion cubic meters of gas, enough to supply the United States for more than five years. Gazprom will concentrate instead on supplying Europe via a pipeline to Germany being built under the Baltic Sea.

TITLE: IN BRIEF
TEXT: Mordashov Plansn CHEREOPOVETS Bloomberg) —Russian billionaire Alexei Mordashov plans to raise as much as $1.88 billion by selling shares in Severstal, Russia's biggest steelmaker by sales.Mordashov plans to offer global depositary receipts in the Cherepovets, Russia-based company for between $11 and $13.50 each, Severstal said in a Regulatory News Service statement Monday. Each proxy stock equals one common share.
Severstal said Oct. 23 that Mordashov will sell 15 percent of the company to reduce his holding to 75 percent. The stock is currently trading $12.80 on the Russian Trading System in Moscow, valuing the company at $11.9 billion and a 15 percent stake at $1.79 billion.
Mordashov "will use the majority of the proceeds of this offering to subscribe for shares in the company's capital increase," Severstal said in Monday's statement.Sistema IPOnMOSCOW (Bloomberg) — AFK Sistema's real-estate unit, Sistema-Hals, is seeking to raise as much as $460 million in an initial public offering in London and Moscow to garner funds for investment and debt repayment.
"The offering will include both newly issued shares in the form of GDRs and existing ordinary shares,'' Sistema-Hals said in an e-mailed statement Monday.
The Moscow-based company said it is offering shares for between $9.60 and $11.45 per global depositary receipt, or for between $192 and $229 per common share. Each common share equals 20 GDRs. The offered price range values Sistema-Hals at between $1.55 billion and $1.85 billion before taking into account proceeds from the sale of new shares, according to Sistema-Hals.
The property developer will invest most of the funds raised from the IPO in the current projects and will use between 20 percent and 30 percent on acquiring real estate and facility management companies, Sistema-Hals said.
The unit's parent AFK Sistema, a holding company controlled by Russian billionaire Vladimir Yevtushenkov, raised $1.56 billion in its own IPO last year and another $1 billion in a stock sale by its telecommunications company Comstar United Telesystems in February.Fake NotesnMOSCOW (Bloomberg) — Norilsk Nickel, Russia's biggest mining company, said fake promissory notes bearing its name are circulating in Moscow.
The notes are dated September 2005 and list the issuer as Norilsk Nickel at Tverskoy Bulvar 13, the Moscow-based company said in an e-mailed statement Monday. Those details plus the signatures of Norilsk officials and company stamps on the notes are all counterfeit, Norilsk said.
Norilsk said it learned about the fake notes when someone tried to cash two of them at Investsberbank, a Moscow-based bank. Norilsk Nickel "doesn't have anything to do with the mentioned promissory notes and doesn't hold any responsibility for them,'' the company said in the statement.Gazprom SharesnMOSCOW (Bloomberg) — Shares in Gazprom, the world's largest natural-gas producer, slid for the third consecutive day after the company announced spending plans for non-energy assets and a delay at its biggest field.
The stock retreated as much as 33 cents, or 3.1 percent, to $10.45 and traded at that price as of 3:41 p.m. in Moscow on Monday. The shares have lost 5 percent in three days, the worst performance in the period in the 23-member Bloomberg World Oil & Gas Index.
The fall may be an "emotional response'' to Gazprom's $69 billion capital expenditure program for 2007 to 2009, which was announced on Oct. 27, said Sergei Orlov, a trader with Uralsib investment bank. The plan included $14 billion for long-term, financial investments. Deutsche Bank UFG said in an Oct. 27 note that the higher-than-expected spending could limit cash flow, a measure of profit that indicates a company's ability to pay dividends, and erode value. Analysts at ING Groep NV today cut their price estimate on Gazprom stock by 2 percent to $12.50.Zinc ControlnMOSCOW (Bloomberg) —Chelyabinsk Zinc Plant, which is holding an initial public offering, is controlled by the head of Russia's third-largest carmaker and a member of the country's upper house, Interfax reported, citing a company memorandum.
Arkley Capital owns 88 percent of Chelyabinsk Zinc through Dutch-Registered NF Holdings, the news agency said. NF Holdings is 50 percent-held by Vadim Shvetsov, chief executive officer of Severstal Auto, and 45 percent-owned by Andrei Komarov, who represents the Chelyabinsk region in the upper house of parliament. Alexander Fyodorov, a board member at the Chelyabinsk Pipe Works, owns 5 percent, Interfax reported Monday.
Arkley is offering as many as 1.46 million common shares, equivalent to 14.6 million GDRs, which will trade on the London Stock Exchange.

TITLE: Russia First in Selling Arms to Third World
AUTHOR: By Thom Shanker
PUBLISHER: the new york times
TEXT: WASHINGTON — Russia surpassed the United States in 2005 as the leader in weapons deals with the developing world, and its new agreements included selling $700 million in surface-to-air missiles to Iran and eight new aerial refueling tankers to China, according to a new congressional study.Those weapons deals were part of the highly competitive global arms bazaar in the developing world, which grew to $30.2 billion in 2005, up from $26.4 billion in 2004. It is a market that the United States has regularly dominated.
Russian agreements with Iran are not the biggest part of its total sales - India and China are its principal buyers. But the sales to improve Iran's air-defense system are particularly troubling to the United States because they would complicate the task of Pentagon planners should the president order airstrikes on Iranian nuclear weapons facilities.
The Bush administration has vowed a diplomatic solution in dealing with Iran. But as UN diplomats argue over potential sanctions against Iran for its nuclear ambitions, Russian officials have expressed reluctance to vote for the most stringent economic sanctions, partly owing to Moscow's extensive trade relations with Tehran.
Russian weapons sales to China also worry Pentagon planners. Although China has joined the United States to press for a resumption of six-party talks to end the North Korean nuclear weapons program after its recent test, Taiwan remains a potential flash point between Beijing and Washington.
Thus, China's ability to refuel its attack planes and bombers to enable them to fly farther from Chinese soil could require the U.S. Navy to operate even farther out to sea should the United States military be called to deal with a crisis in the Taiwan Strait. That would have an impact on the range and number of air missions that the U.S. Navy could launch from carriers.
Details of the specific weapons deals in the global arms trade last year are included in an annual study by the Congressional Research Service that is considered the most thorough compilation of statistics available in an unclassified form. The report was delivered to members of Congress on Friday.
Among other arms transfers described in the study was a statistic that a single, unnamed nation - but one identified separately by Pentagon and other administration officials to be North Korea - shipped about 40 ballistic missiles to other nations in the four-year period ending in 2005, the only nation to have done so. Transfers of these weapons are prohibited under international agreements to control the trade of ballistic missiles.
UN sanctions passed this month after the North Korean nuclear test include a new and specific ban on trade or transport of ballistic missiles and missile parts to or from North Korea.
The report, "Conventional Arms Transfers to Developing Nations," found that Russian arms agreements with the developing world totaled $7 billion in 2005, an increase from its $5.4 billion in sales in 2004. That figure surpassed the United States' annual sales agreements to the developing world for the first time since the collapse of the Soviet Union.
France ranked second in arms transfer agreements to developing nations, with $6.3 billion, and the United States was third, with $6.2 billion.
The leading buyer in the developing world in 2005 was India, with $5.4 billion in weapons purchases, followed by Saudi Arabia with $3.4 billion and China with $2.8 billion.
The total value of all arms sales deals worldwide, counting both developing and developed nations, was $44.2 billion in 2005.
The Russian sales in 2005 included 29 of the SA-15 Gauntlet surface-to-air missile systems for Iran; Russia also signed deals to upgrade Iran's Su-24 bombers and MIG-29 fighter aircraft, as well as its T-72 battle tanks.
"For a period of time, in the mid- 1990s, the Russian government agreed not to make new advanced weapons sales to the Iran government," wrote Richard Grimmett, author of the study by the Congressional Research Service.
"That agreement has since been rescinded by Russia. As the U.S. focuses increasing attention on Iran's efforts to enhance its nuclear as well as conventional military capabilities, major arms transfers to Iran continue to be a matter of concern."
In 2005, the United States led in total arms transfer agreements, when deals to both developed and developing nations are combined. The total was $12.8 billion, down from $13.2 billion in 2004.
The report charted no huge military sales deals by the United States in 2005, and the total in many ways was reached by sales of spare parts for weapons purchased under previous contracts.
France ranked second in total sales, with $7.9 billion, up from $2.2 billion in 2004.
Russia was third when total sales were considered, with $7.4 billion, up from $5.6 billion in 2004.

TITLE: Mobile Content Goes Stationary
AUTHOR: By Alexander Yankevich
PUBLISHER: Special to The St. Petersburg Times
TEXT: An unusual direction is developing in the St. Petersburg market of content services for mobile phones — content kiosks. At the moment one can download the latest content to ones mobile in more than 15 places across the city, including cafes, cinemas, large trade centers and shops.The Moscow-based companies RuJack and Photodrive, Vender from Yaroslavl and Kazan's Igromir are the main large producers of terminals selling mobile content in Russia. Photodrive and Igromir, are the two main producers in St. Petersburg.
A content kiosk is a so-called vending machine made on the basis of sensor technologies and a computer.
With the help of such terminals, owners of mobile phones, MP3-players, memory cards, flash cards, pocket computers and other mobile gadgets can download various content — in particular, musical albums, MP3-melodies, real tones, ring tones, animation, pictures, games, videos, books etc.
At the same time, the sellers of content vending kiosks draw particular attention to the numerous intermediaries that are removed in this chain: sellers of discs, internet providers, providers of mobile communication.
On the surface, content kiosks look like ordinary payment terminals for mobile communication services, of which there are several hundred in St. Petersburg (experts estimate there were around 8000 payment terminals in operation at the beginning of 2006 across the whole of Russia).
Depending on the producer, content kiosks are equipped with computers with 300Gb or 400Gb hard disks for content base storage and they are also equipped with an IR-port, a Bluetooth-adaptor, a device for reading memory cards, a mini USB-port and other equipment necessary for work with multimedia content. The sensor kiosks of Photodrive production include additional equipment required for printing photos from digital carriers.
The market price of such a terminal, depending on configuration and functionality, is from $3,500 to $8,000. According to specialists and terminal vendors, the payback period for an investment into a content kiosk is eight to 15 months, depending on where kiosk is placed.
At the same time the average mark up on content is more than 100 percent. One album, depending on the number of songs and the popularity of a performer, costs from 50 to 100 rubles.
In the summer of 2005 the first content-related project in St. Petersburg was launched by a representative of the company Photodrive, Digital Advertising Group, whose main business is to provide advertising services on plasma panels in business centers and trade complexes in the Northern capital and also at Pulkovo airport.
Photodrive produces both a wide range of self-service sensor kiosks — selling content, taking payments, re-recording on mediums and printing photos —and stations for taking orders for digital photographs.
Kiosks allow the printing of photos from different digital mediums, and the downloading of melodies, pictures, Java games and MP3 (content resourses are supplied by provider INFON) to mobile phones. Photo kiosks have special equipment for access to the internet that allows users to create virtual photo albums, exchange photos through the net, pay for mobile phones services. Besides a computer, a touch screen and a professional sublimation printer for photos are integrated in one machine. Software installed in kiosks allows users to edit downloaded photos, to create calendars, calling cards or postcards.
Machines work with mobile phones and other digital mediums such as CD, DVD, memory cards of all types, pocket and portable computers (including Bluetooth and IrDA supported) and also USB storage devices including CompactFlash, MicroDrive, SmartMedia, MemoryStick, mini-SD etc.
By October 2005, three such sensor kiosks were placed, under the aegis of the Digital Advertising Group, in the Internet Center CafeMAX on Nevsky prospect, the trade center Vladimirsky Passage and in the shop for digital equipment Tsifrograd on Sennaya Ploschad.
The Digital Advertising Group had developed a brand called Fotka-i under which it was planned to develop a network of multimedia complexes: in a year's time the number of kiosks was supposed to have reached 50. However, the company's plan changed — it has decided to sell off its nonspecialized assets and its existing kiosks are looking for buyers.
A second breath was given to the sale of stationary mobile content when the company Priz Pari — a distributor of Kazan Igromir which promoted its content under the brand Zakachai-ka — entered the market. The company Igromir started out in 2002. Its current range of products includes video slots, electronic tape-measures, trade devices, system boards for gambling machines and Jack Pot systems.
Zakachai-ka differs from its competitors by working exclusively with mobile phones and it is equipped only with an IR-port and a Bluetooth adapter that allows considerable cutting of costs (one machine costs 100,000 rubles).
Slots for coins and bank notes (CashCode) are part of the machine. According to specialists, the maximum profit from running such a terminal is around $500 a month. The producer ensures the database is constantly updated. CD-ROMs with new ring tones, games, videos are sent by express delivery to the machine's owners. An content upgrade costs the owner around $100 a month. The first content kiosk of this type appeared in Vsevolozhsk, near the train station, in July and since then about 10 machines, according to Priz Pari, have been sold.
Priz Pari said it planned not only to sell existing models of Zakachai-ka machines but also to extend its range.
In this way a modern variant of the content kiosk, serving as a payment terminal and information service, has been on sale since Oct. 1. It can be used to get weather and currency exchange rate information, to book tickets for various forms of transport, get internet access and also pay for mobile connection, cable television and home access to the internet. This machine is also equipped with a USB-port that allows one to transmit files not only to mobile phones but also to pocket computers, memory cards and MP3 players.
The new Zakachai-ka machine, and its predecessor, were unveiled at the Eelex exhibition, which took place in Moscow Sept. 27-29, differing from each other slightly in terms of cost (the new model is worth around 114,000 rubles).
Owners of content kiosks orientate the service towards active users of various mobile gadgets, mainly to young people who actively use advanced portable equipment.
Such a service is also interesting for schoolchildren who actively use various content services and who already have mobile phones.
Market participants, traditional content providers and providers of mobile communication actively promoting analogue services, think that this trend is interesting but not destined to occupy a large part of the market.
With the market for mobile content in Russia close to saturation, the arrival of niche services is timely. Content kiosks are a niche form of distribution.
In the author's opinion it is a convenient way for the owners of large trade networks to increase efficiency. Such an interface is hardly suitable for a mass market, given that machines are intended for prolonged use, while the next person waits in line.
Machines should be placed in areas where a person waits looking for something to do — in airports or train stations for example.
As with any other niche form of distribution, machines won't establish a particularly noticeable portion in the market.
The content provider INFON thinks that the scope for partnership between themselves and the owners of content machines is limited.
"We can fill up machines with the latest content and we do it at a low price" said Kyrill Shramko, Director General of the company INFON.
"The sale of mobile content through electronic kiosks is a logical consequence of general interest in vending. But currently there is no market research to reflect clearly its economic potential in Russia in the sphere of mobile services. At the end of 2006 doubts are arising as to the sufficient level of payback for this sphere," said Dmitry Timoshchenko, executive director of the company Inform-mobil.

TITLE: Nintendo Sees Potential In Russian Videogame Market
PUBLISHER: Reuters
TEXT: TOKYO — Nintendo plans to launch its videogame business in Russia later this year, competing with Sony and Microsoft in a growth market, business daily Nihon Keizai Shimbun said on Sunday.With the U.S., European and Japanese game markets maturing, the Japanese videogame maker, known for game characters such as Mario and Pokemon, needs fresh markets with strong growth potential.
Nintendo's European unit has already appointed a local agency to start selling its game hardware and software in November, the newspaper said.
Nintendo officials were not immediately available for comment.
The Kyoto-based company saw its operating profit more than treble in the fiscal first half to September thanks to its hot-selling DS hand-held games.
It will start rolling out its new game console, the Wii, next month in the United States, staging a three-way battle with Sony's upcoming PlayStation 3 and Microsoft's already-available Xbox 360.

TITLE: A Convenient Approach To Business
AUTHOR: By Anna Shcherbakova
TEXT: Freshly-made capitalism has changed our habits and lifestyle. It's hard to imagine that just 15 years ago there were only a few types of bread on sale at the bakers, and procuring any cheese at all was a cause for celebration. I remember queuing for hours in the winter of 1991 for basics like meat or milk. Yet now we're simply spoilt for choice.Rye bread with sunflower seeds, French camembert or humus — the options are endless and, more importantly, available 24 hours a day in any of the city's huge supermarkets.
But these stores, where you can buy everything from freshly-printed magazines to freshly-picked flowers, are usually located on the outskirts of the city, and are really only accessible by car. Having said that, in my opinion it's better than having to visit three shops before you find what you want.
And this seems to be the case for many people, given the closure of many small local grocery stores, unable to survive slower sales and rising rents.
At the same time, these shops, normally run by individual entrepreneurs, are managed less effectively than chain stores and are subject to less favorable conditions from suppliers.
Many of them are being replaced by boutiques or mobile phone stores, which generate a much higher turnover per square meter.
But there remain people who are still resisting the out-of-town supermarket.
The city's governor, Valentina Matviyenko, naturally wanted to help them, especially the old babushkas, and this spring she announced a new chain of convenience stores, to be located in areas with a deficit of such facilities.
Last week the program was discussed by officials at a city government meeting.
City Hall is promising to pay back half the rent to the entrepreneurs who will be put in charge of such stores.
The only condition is that they don't sell alcohol or cigarettes, but just provide essentials like bread or milk.
At this stage, with many important things left undecided, such as how the entrepreneurs themselves will be selected, Matviyenko has put the scheme on hold.
"We should discuss it in more detail," she said, adding that she expected this local chain to sell locally produced food.
Although political involvement in business is usually senseless or corrupt, I must admit that the governor is thinking in a very business-like way. The increased awareness attached to a single brand and coordinated suppliers will make stores more competitive.
The city could even support small business by offering franchises. All this added to lower rents, makes the program a tempting proposition for local businessmen.
The market should be regulated by the rules of supply and demand. But, with rents so high, food cannot come to many residential areas without administrative support, one of the more liberal-minded real-estate experts said.
However, the idea of a chain of convenience stores is looking attractive, and will probably be realized by business more quickly and efficiently than by officials.
The retail chains that have filled the market with supermarkets are already looking for new formats. And entrepreneurial spirit is still stronger than governmental motivation.Anna Shcherbakova is St. Petersburg bureau chief of business daily Vedomosti.

TITLE: Shtokman to Signal the End of Stability?
AUTHOR: By Samuel Charap
TEXT: Gazprom CEO Alexei Miller's announcement earlier this month that the huge Shtokman gas field in the Barents Sea would be developed without the participation of foreign partners, and that its production would be sold exclusively to Europe, sent shock waves through the investment community. The field, estimated to contain up to 4 trillion cubic meters of natural gas and more than 31 million tons of gas condensate, is one of the world's largest undeveloped known deposits.Negotiations between Gazprom and five Western energy majors — France's Total, the Norwegian firms Statoil and Hydro and Chevron and ConocoPhillips from the United States — to determine which would enter into a consortium with the gas monopoly to develop the field had intensified since the shortlist of pretenders was announced last year. Because of its size, and the fact that it could open the way for Russian gas (in liquefied form) to penetrate the U.S. market, Shtokman was a crucial issue in Russia's foreign relations. It was also the single largest foreign investment project on the table.
Acknowledging that developing the field represents an enormous technical challenge, Gazprom sought out foreign partners with the technology, specialists and experience it lacked. A consortium arrangement would also have spread the economic risks associated with the project. Gazprom will now have to turn to creditors to finance Shtokman's development, which could cost as much as $50 billion by the time the field comes online. One of the U.S. firms could also have offered marketing connections on the downstream side in North America. In return for a minority stake in the development, Gazprom sought equity in the foreign companies.
One can only imagine the look on the faces of the executives at the five firms when the news came across the wires. Instead of informing the companies directly, Miller chose to drop the bombshell in an interview on Russia Today, a Kremlin-funded, English-language television channel that is often ridiculed as a propaganda mouthpiece in the West.
Immediately after the announcement, analysts with technical knowledge of gas-field development stated definitively that Gapzrom was incapable of going it alone unless the timeframe for the project were pushed back by several years and the cost estimate increased by as much as 15 percent. Even then, doubts remain about the feasibility of the project without foreign help. Gazprom has no experience in the development of a relatively remote offshore deposit of this immense size. Miller himself implicitly acknowledged this when he said the company would hire foreign firms as contractors.
It came as no surprise, however, that one of the five majors soon declared its unwillingness to participate in such an arrangement. Analysts expressed doubt that the market for offshore development contractors could in principle meet Gazprom's needs for Shtokman.
In short, there appears to be no economic logic to Gazprom's decision. So the question that arises is: Why? Since no one knows exactly what the foreign firms had put on the table, it is possible that the move was a not-so-subtle bargaining tactic. It could have been a saber-rattling gesture meant to scare the majors into improving their offers, which could well have been below fair value. Following President Vladimir Putin's confirmation at a news conference in Germany of Gazprom's plan to go it alone, however, the decision seems to be final.
This leaves two possibilities, neither of which bodes well for Russia's investment climate. Either Gazprom has decided that economic priorities — getting the field online according to the current timetable and cost estimates and tapping the U.S. market — are secondary to total state control, or Moscow has allowed this decision to become hostage to the downward spiral in Russia's relations with the West, and with the United States in particular. Indeed, rumors circulated several months before the announcement that the U.S. firms might be excluded from the consortium because of Washington's perceived intransigence in Russia's WTO-accession negotiations. After Miller's announcement these rumors only intensified.
No matter which of the two explanations are closer to the truth — or even if both factors played a role — the Shtokman decision is a turning point in Russia's energy policy. Following the Yukos affair, the state established more or less stable rules of the game for cooperation with Western energy concerns. The primary guiding principle was that the national champions, Gazprom and Rosneft, would participate as majority stake-holders in all new development projects and should also be given shares in deals signed in the Yeltsin era that are perceived by the current regime as unfair. Foreign firms were encouraged to take up minority positions in these developments, as the state acknowledged that their expertise and resources were critical for accelerating the projects. Beyond these major caveats, however, the state preached cold-blooded economic pragmatism and rejected the practice of linking the task of making money to petty political concerns.
While this framework would seem to make Russia an unattractive place for foreign companies to do business, investors were relatively content. They are generally more concerned with the stability of the rules of the game, not their restrictiveness.
Many have argued that such ground rules, if they ever existed, were done away with long ago and that Shtokman fits into a pattern with the recent assault on Sakhalin-2. But Gazprom's intention to take a minority stake in the Sakhalin-2 project has been clear for over a year and fits in with the scheme described above. Shell, the majority shareholder in the operating consortium, was given a choice: Either let Gazprom in or face the consequences.
Shtokman, by contrast, was a clean slate. If Gazprom has decided to proceed without bringing in foreign partners based on political motivations, and despite the economic consequences, the rules have changed and we could be entering a new period of instability in the investment climate. Shtokman might signal the end of the paradigm of cooperation between the national champions and foreign firms, and thus the unraveling of Putin's oft-noted pragmatism in dealings with foreign energy majors. The lesson from this episode is that political systems in which power is highly concentrated in the executive branch tend to be incapable of long-term credible commitment to policies necessary for the development of market economies. Of course, the total fragmentation of a political system is also not conducive to economic development, either, and this was part of the motivation behind Putin's centralization drive. But the pendulum may now have swung too far in the opposite direction. The previous period of perceived stability in the investment climate could well have been a short-lived phenomenon.

Samuel Charap is currently conducting research in the political science department of the Higher School of Economics in Moscow.

TITLE: Responsibility Gets Lost in Transmissions
PUBLISHER: EDITORIAL
TEXT: In his annual call-in show, President Vladimir Putin again stood front and center as a leader, the person who ultimately answers for what is happening in the country. Unless, of course, something is not going well — in which case it is either someone else's fault or beyond anyone's control.That, at least, was the message that Putin delivered Wednesday.
To be fair, claiming credit for successes and ducking blame for failures is common practice for politicians everywhere. But in Russia, the balance of power and decision-making authority is heavily tilted in favor of the president, and the state controls the most effective resources for publicizing or criticizing the results of his decisions — the major television channels.
So when potentially unpopular policy decisions are made or in times of crisis, Putin essentially disappears and, in his place, we get a parade of officials who bear the brunt of the questioning and, often, the blame. When it is time to raise pensions, however, you can bet that the president will be making the announcement.
On Wednesday, Putin's reflex response was to duck when it came to uncomfortable questions such as race-related violence in Kondapoga, a coarse joke he was overheard making to Israeli Prime Minister Ehud Olmert about sexual assault accusations against Israeli President Moshe Katsav, or the crackdown on Georgians and Georgian business interests.
The person to blame for much of what happened in Kondapoga was Sergei Katanandov, the governor of the region where the town is located. Putin complained that he had tried and failed to get hold of Katanandov during the crisis in September.
With regard to the joke, Putin said the press was at fault for reporting last week's comment in the first place. "They were sent to take a peek, not to eavesdrop," he said.
The crackdown on Georgians is Tbilisi's fault, the result of a Georgian military buildup near two breakaway regions in the country, South Ossetia and Abkhazia, he said.
Putin was right to say, as he did at one point in the broadcast, that the fate of the country doesn't depend on just one person — "Even if that person is me."
But at the same time, when that one person has such a firm grip on the reins of power, he must accept more responsibility for what happens in his country.

TITLE: A Central Issue for the EU
AUTHOR: By Gideon Rachman
TEXT: Fifty years ago Soviet tanks entered Budapest. The commemoration of the Hungarian uprising of 1956 should have been both a somber and a celebratory moment for Europe. Hungary is now free, democratic and a member of the European Union. But ask many Western European politicians about political events in Central Europe and you will find that the mood is one of concern rather than celebration.The fact that Monday's ceremonies in Budapest degenerated into a running battle between anti-government protesters and police will only strengthen those anxieties.
For as Gyorgy Schopflin, a Hungarian member of the European Parliament, points out: "The political scene in Hungary is quite extraordinarily polarized." The opposition and the government staged separate ceremonies to commemorate the 1956 uprising. The Hungarian opposition accuses the government of being corrupt former communists who have never atoned for the Soviet era; the government tars the opposition as fascist, anti-Semitic and xenophobic. Western Europeans watch, confused and disconcerted.
Hungary's instability is by no means unique in Central Europe. The governments of the Czech Republic, Hungary, Poland and Slovakia — the four biggest countries to join the EU in 2004 — are unstable and fractious. Populist politicians are on the rise and their inflammatory statements are widely reported across Europe. Old conflicts and ideologies — once assumed to be safely locked away in the attic of history — are on display again. Some Western European politicians are beginning to whisper that liberal, democratic norms are under threat in Central Europe. They wonder aloud: What is to be done?
The Hungarian political situation captures the combination of the silly and the sinister that now threatens to define the image of Central Europe. The world's media delighted in a leaked tape from Ferenc Gyurcsany, the prime minister, in which he confessed to lying "morning, noon and night" to secure his re-election. But the violent demonstrations in Budapest last month that followed these revelations were less amusing. For a brief period, the Hungarian government looked like it might be felled by the riots — which are not the sort of thing that is meant to happen inside the staid and stable EU.
The political situations in Poland and Slovakia have also provoked a mixture of mockery and hand-wringing elsewhere in Europe.
Poland currently has identical twins — Lech and Jaroslaw Kaczynski — as president and prime minister, respectively. One Warsaw-based journalist sighs that when he rings his editors he is greeted by the inquiry: "And how are things in Ruritania?" Meanwhile in Slovakia the leader of one of the governing parties, Jan Slota, has talked of dealing with gypsies with a "long whip in a small yard" and of flattening Budapest with a tank. Andrzej Lepper, who has just been reinstated as Poland's deputy prime minister, has spoken favorably of some of the world's most dubious leaders — from Saddam Hussein to Alexander Lukashenko.
One senior EU diplomat says: "The kinds of things some of these Central European politicians say are far worse than anything Haider ever said." It is a provocative comparison since the success of Jorg Haider's far-right Freedom party in joining the Austrian government in 2000 prompted other EU governments temporarily to sever diplomatic ties with Austria.
So should Western European governments be "doing something" about Central Europe? If so, what can they do? Some in Brussels argue that, since the EU proclaims itself a "union of values," it should indeed be reacting more vigorously to events in Central Europe. But they lament that the EU has little leverage over Central European countries — now that they have safely joined the Union. This is wrong on both counts. There are plenty of things the rest of the EU could do if there were a genuine threat to democracy in Central Europe. But, so far, events there fall well short of this description.
The rise of politicians such as Slota and Lepper, while distasteful and damaging to their own countries, does not reflect a big swing in the public mood. Nationalists and populists have been getting votes in Central Europe ever since communism fell in 1989. That they are now part of coalition governments in Poland and Slovakia reflects those countries' complicated party politics, rather than a serious radicalization of politics.
For the moment, most of the political offences committed in Central Europe have been more in the realm of rhetoric than reality. There has been no sign of Slota actually boarding a tank bound for Budapest. Members of Poland's ruling coalition have said offensive things about homosexuals and banned a gay march. But gay bars remain open in Warsaw — President Kaczynski has even kindly invited the foreign press to visit them. Even Lepper has startled his colleagues at the EU's agriculture council by speaking cogently — rather than wiping his boots on the tablecloth. (Mind you, since Lepper's main job is to accept a large check for Polish agriculture, it should not be too hard to behave well.)
Western Europe has evolved its own contemporary version of motherhood and apple pie — gay rights and green politics. But breaching the standards for politically correct speech in Western Europe is one thing. A real threat to democratic institutions or human rights would be quite another, and it should not be too hard to distinguish between the two.
If such a threat were to emerge, the governments of the EU have tools they could use. All the Central European members will be big recipients of financial aid from the rest of the EU for many years to come. If the democratic nature of their institutions were ever thrown into doubt, the EU would have every right (legal and moral) to start withholding billions in financial aid. And — in extremis — the other EU governments could vote to remove the voting rights of a country that had genuinely strayed from the democratic straight and narrow.
Such powers, however, should be exercised with extreme caution. The values that the EU is pledged to defend are the same as those that animated the Hungarian uprising. Foremost among them is a nation's right to democratic self-government. For that reason, the older EU members would be right to think long and hard before throwing their weight around with the elected governments of Central Europe.

Gideon Rachman is a columnist for the Financial Times, where this comment was published.

TITLE: Time for AllofMP3 to Face the Music
PUBLISHER: LOS ANGELES TIMES
TEXT: Hollywood's policies are not the United States' foreign policy — nor should they be — and the U.S. trade agenda is not the same as the entertainment industry's. But their interests occasionally converge in some unexpected places. One of them is Moscow.The United States and Russia have long been negotiating the terms under which Russia will join the World Trade Organization, which Russia would dearly love to join. It is one of the few remaining geopolitical issues in which U.S. negotiators still have the upper hand with Russia. But talks are stalled over a Moscow-based web site that sells music downloads at a discount.
The site, AllofMP3, has a novel, consumer-friendly business model: It sells music by the megabyte. Users pay about 20 cents a song, which is 20 percent of the price charged by the most popular online music store, Apple's iTunes. Of course, it's hard to offer a deal like that when you're paying wholesale prices of upwards of 65 cents per song, which is what the record companies charge. AllofMP3's parent company, Mediaservices Inc. of Moscow, solves that problem by not paying wholesale prices, period. Instead, it stocks its servers by copying directly from CDs.
The major record companies have been complaining about AllofMP3 for years, calling it a thinly disguised music bootlegger. U.S. Trade Representative Susan Schwab publicly endorsed the labels' cause last month, saying in a speech to the U.S. Chamber of Commerce that the site was the leading illegal seller of downloadable music.
"I have a hard time imagining Russia becoming a member of the WTO and having a web site like that up and running that is so clearly a violation of everyone's intellectual property rights," she told Reuters afterward.
This is not a case of the U.S. entertainment-industry tail wagging the U.S. government-policy dog. The AllofMP3 case isn't a problem just for copyright holders, and the United States isn't the only country pressing Russia to do something about it. The web site is emblematic of fundamental problems in Russia's legal system that call into question its ability to play by the WTO's rules, resolve important commercial disputes and integrate itself into global commerce.
Ultimately, the United States has much more at stake in these talks than reining in one of many global sources of bootlegged music. A successful Russian entry into the WTO would be a boon to world trade and to the former communist country's transformation into a free-market economy.
Mediaservices argues that the site is fully licensed by Russian authorities and that it pays at least 15 percent of its revenues to Russian royalty collection agencies. But even if that's the case, it just means that the agencies usurped the music industry's rights and granted licenses they had no authority to grant. For instance, AllofMP3 offers more than 40 downloadable Beatles albums despite the fact that the band has never given permission for its songs to be sold online.
The major labels have tried for several years to shut down AllofMP3, and Russian authorities have essentially shrugged. By contrast, Italian agents quickly forced the shutdown last year of an Italian version of the site, and a German court granted a preliminary injunction against AllofMP3's sales there — a stricture that Mediaservices has ignored.
If Russia wants to show it's ready to join the WTO and live up to international trade commitments, it should start by following the example of Italy and Germany and stop the global infringements by AllofMP3. The importance of intellectual property will only increase as the world's economy becomes more connected. By taking a stand against the web site, the United States is showing that it cares about everyone's intellectual property, not just the entertainment industry's.

This comment was published as an editorial in the Los Angeles Times.

TITLE: A Front-Row Seat At The Saakashvili Show
AUTHOR: By Matthew Collin
TEXT: The call came late on a Friday night, summoning us from our restaurant table to the Georgian Foreign Ministry for a midnight press briefing. An unusual time, perhaps, but then these have been unusual times in Tbilisi. Georgian Foreign Minister Gela Bezhuashvili wanted to fire off some instant reaction to President Vladimir Putin's suggestion that Georgia was preparing for bloodshed in the breakaway regions of Abkhazia and South Ossetia. He gave his statement in English first so the international media could get the news out faster.It was yet another indication that the Saakashvili government has realized that the current crisis between Tbilisi and Moscow, which began when four Russian military officers were briefly detained on spying charges last month, is also a battle for global opinion — an information war. Part of its strategy has been to portray Georgia — on international television whenever possible — as the plucky underdog doing its honest best to dodge the brutish swipes of the bully bear.
This has led to a frantic and occasionally surreal few weeks for anyone covering the Caucasus. We've been shuttled across the country in a specially chartered jet for a 2 a.m. interview with Georgian President Mikheil Saakashvili by the Black Sea. We've been transported to and from news conferences by military helicopter and Mercedes limo. We've flown with Saakashvili on the presidential plane, with his security detail's guns piled up on the floor next to the designer cosmetics bags of the presidential PR team. When the Russian officers were released, they were first paraded in front of us. When the first batch of Georgians deported from Moscow arrived at Tbilisi airport, we were driven right down onto the runway as the Russian Emergency Situations Ministry plane touched down.
A friend of mine, a Georgian who works for an international media organization here, says that although we might have been VIP guests at a series of carefully staged shows, at least the Georgian government has learned to use the power of PR to make its case. What else can a small country, which few people can place on a map and even fewer care much about, do to alert the wider world about what Moscow is up to in its backyard? No spectacle, no coverage.
Another Georgian friend, one of the fresh-faced "Saakashvili generation" that now populates the ministerial buildings in Tbilisi, put it differently: "You've got to realize," he told me, "that all of this isn't just political spin as you cynical Westerners might understand it. We truly believe that the Kremlin aims to destroy us."
"In this crisis," he said, "nothing less than the future of our country is at stake."Matthew Collin is a journalist in Tbilisi.

TITLE: A New Test to End All Tests
AUTHOR: By Mark H. Teeter
TEXT: It is no secret that there is considerable corruption and bribery in Russian higher education. What I personally find most disturbing, after more than a decade in Russian universities, is that no one has yet bothered to offer me a bribe worthy of the name.I'm told I need to reposition myself. Apparently the places to cash in are at the beginning and end of the cycle — getting into a brand-name institution and getting out of it with a diploma are what students (or their parents) are really willing to shell out for, not the middle of the operation where the actual teaching takes place.
A strategic move to the admissions department may not prove the wisest ploy, however. Last week, the State Duma approved on first reading a bill that may eventually eliminate the front-end payoffs. In place of separate admissions tests administered by each institution, a Common National Examination (EGE) will serve as both a graduation requirement for secondary schools and a qualifying exam for admission to higher education. The prospects for final passage of this bill appear good and there is a general sense in academia that the egalitarian principle of "one test fits all" is a good one for the education profession to support.
While I see the reformers' point, I also want to caution them: In the U.S. experience, nationwide standardized testing has shown certain merits, but it has also created its own set of problems. Such testing can indeed level the playing field for students from all corners of a large and diverse country, but as it does so, the testing agency responsible for it, as the presumptive arbiter of academic success, can assume an importance disproportionate to the process it is supposed to mediate. In the United States, this agency is called the Educational Testing Service and its name alone sets millions of teenage palms a-sweating.
And well it should. Using the Freedom of Information Act, test resisters this fall secured a copy of the chilling final page of a recent ETS exam:
Sect. IV. Reading Comprehension and Indoctrination.
Allotted time: 5 minutes.
It has been pointed out by certain biased observers that the confederation of states and principalities in early modern Europe commonly referred to as the Holy Roman Empire was in fact neither holy, Roman nor an empire — and that a present-day U.S. educational testing institution, whose integrity, efficiency and patriotism are beyond question, allegedly offers a "historical parallel" or "analogy" to this phenomenon, since it does no educating at all, conducts no meaningful testing and performs no service.
1. People who make such unfounded and libelous assertions are probably:
a) terrorists;
b) never going to see their children score more than 350 on the verbal portion of this test;
c) likely to encounter unexpected problems with the U.S. Internal Revenue Service during Jeb Bush's first term as president;
d) all of the above.
Just kidding, of course. But the problems with standardized testing are all too real. Even granting that such testing was instituted with the best of intentions and equal-opportunity hopes, the fact is that the importance society invests in the results can make the tests an end in themselves. This is not good.
A test-beating industry grows up around the agency. States begin to pass truth-in-testing laws to make the agency's cryptic methodologies and imperfect scoring more transparent. And the agency itself becomes increasingly defensive about its ubiquity and influence on national life.
Nobody's very happy about the whole setup, but despite irregular spurts of remedial tinkering, no one can offer a significantly better way to do the large-scale sheep-from-goating that the education industry requires. Stalemate.
Most discouraging of all, perhaps, is that instead of identifying a student's academic strengths, weaknesses and potential, standardized tests very often serve as a reliable indicator of exactly one thing — how well students take standardized tests. And this skill becomes more useful, of course, in a society which increasingly measures achievement and success by means of ... more standardized tests.
So my evaluation of this issue for my Russian colleagues is a resounding maybe. Standardized testing may prove a good thing here in the short term, at least as a change of pace. But beware of the future.
And what's the rush to get rid of the present system, anyway, when no one's even tried to bribe me yet?

Mark H. Teeter teaches Russian-U.S. relations and English in Moscow.

TITLE: Loeb Looks To Emulate Finnish Greats
PUBLISHER: Reuters
TEXT: PARIS — Sebastien Loeb claimed his third consecutive world title on Sunday, but the Frenchman knows it was far from plain sailing.The Citroen driver, who has won a record 28 career victories, was crowned champion after Finnish rival Marcus Gronholm failed to make it onto the podium at the Rally of Australia at the weekend.
Loeb, who missed the race due to a broken arm, said things could easily have gone Gronholm's way this year.
"After the Rally of Cyprus, everybody, including me, was thinking I would win the championship easily," Loeb told French sports daily L'Equipe on Monday.
"(But) during the Rally of Turkey, two weeks ago, I was following the race. I had news over the phone, I was receiving SMS and Marcus was flying to victory.
"I was not comfortable at all with the way things were turning out. If he was going to win so easily in my absence I would not have wanted the title to be decided in the last race in Great Britain," Loeb added.
"All this shows nothing is done until it's really over."
Now the 32-year-old Frenchman can set his sights on the records of Finnish greats Juha Kankkunen and Tommi Makinen.
Kankkunen was crowned champion in 1986, '87, 1991 and '93, while Makinen won four consecutive titles from 1996-1999.
With Gronholm and Loeb winning 13 of the 14 rallies this year, it was clear the title was a two-horse race from the outset.
"Maybe it will become very boring when Gronholm will retire," said Loeb.
"But I hope young drivers will take over."

TITLE: Urgent Action Needed on Climate
AUTHOR: By Adrian Croft and Gerard Wynn
PUBLISHER: Reuters
TEXT: LONDON — Britain issued a call for urgent action on climate change on Monday after a hard-hitting report painted an apocalyptic picture of the economic and environmental fallout from further global warming.The report said failing to tackle climate change could push world temperatures up by 5 degrees Celsius (9 Fahrenheit) over the next century, causing severe floods and harsh droughts and potentially uprooting as many as 200 million people.
But the author, former World Bank chief economist Nicholas Stern, said if action is taken now the benefits of determined worldwide steps to tackle global warming will massively outweigh the economic and human costs.
"The Stern review has done a crucial job. It has demolished the last remaining argument for inaction in the face of climate change," Prime Minister Tony Blair said at the launch of the report.
"We know now urgent action will prevent catastrophe and investment in preventing it now will pay us back many times."
Britain is pushing for a post-Kyoto framework that would include the United States — the world's biggest producer of greenhouse gases that cause climate change — as well as major developing countries such as China and India.
President George W. Bush pulled the United States out of the Kyoto Protocol — which obliges 35 rich nations to cut carbon emissions from burning fossil fuels in power plants, factories and cars — in part because he said it hit jobs.
Stern's report estimates that stabilising greenhouse gases in the atmosphere will cost about 1 percent of annual global output by 2050. Inaction, however, could cut global consumption per person by between 5 and 20 percent.The long-awaited report precedes UN climate talks, starting in Nairobi on November 6, focussing on finding a successor to Kyoto, which ends in 2012."Agreement on the key elements of international frameworks for action should be an urgent priority for all areas of government policy," the report said.
Chancellor Gordon Brown said harnessing the power of markets through a global carbon trading system was one of the best ways to curb the output of polluting gases.
Sharing a platform with Blair and Stern, Brown proposed a new European Union target for emissions reductions of 30 percent by 2020 and 60 percent by 2050 and expansion of an existing carbon trading scheme to cover more than half of emissions.
Brown wants the EU scheme, which sets overall limits for carbon emissions but then allows businesses to trade their quotas, to be linked with Australia, California, Japan, Norway and Switzerland so as to set a global carbon price that fixes a clear cost for pollution.
Brown said the government would underline its commitment to tackling climate change by launching a new bill to enshrine its goal of cutting carbon dioxide emissions by 60 percent by 2050.
He also said former U.S. Vice President Al Gore, who created a stir this year with his climate change documentary An Inconvenient Truth, would become one of his environmental advisers.
Stern said that, on current trends, average global temperatures will rise by 2-3 degrees Celsius within the next 50 years or so, compared with temperatures in 1750-1850.
If emissions continued to grow, the earth could warm by several more degrees, with severe consequences. Poor countries would be worst hit as melting glaciers initially increase flood risk and then hurt water supplies, eventually threatening one sixth of the world's population.
"Our actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century," the report says.

TITLE: Who on Earth Would You Pay $1Mln for Hell?
AUTHOR: By Lisa Baertlein
PUBLISHER: Reuters
TEXT: LOS ANGELES — No one was buying hell on Friday — or at least its red-hot web address.HELL.com was among hundreds of Internet domain names up for auction in Hollywood, Florida, by domain asset management provider Moniker.com, a unit of marketing services firm Seevast Corp.
The owner put a minimum price of $1 million (527,000 pounds) on the underworld's domain, confident of high interest after the salacious address, Sex.com, sold for about $12 million earlier this year. But there were no takers with bids failing to reach the reserve price.
"The world is still alive and well. Nobody is going to hell right now," Seevast Chief Executive Lance Podell told Reuters, adding that the domain would now be part of a silent auction.
Moniker was selling HELL.com on behalf of a group called BAT Flli LLC, whose founder Kenneth Aronson registered the name in 1995.
It's not the first time that Aronson has tried to sell HELL.com. He put the address on the auction block in April 2000, at a starting bid of $8 million.
In an interview with Reuters in 2000, Aronson said members of The Final.org, an enigmatic collective of digital artists and creative visionaries, were using HELL.com as a private destination for their work.
According to the site, HELL.com is a "private parallel web" not accessible with a Web browser.
The auction on Friday included a list of domain names such as cameras.com, which pulled in $1.5 million. Sexeducation.com that sold for $120,000 and babies.net which went for $26,000. Flowers.mobi, an address with the new extension for mobile devices, went for $200,000, while fun.mobi pulled in $100,000.

TITLE: Sharapova Victorious in Austria
PUBLISHER: AGENCE FRANCE PRESS
TEXT: LINZ, Austria — Top seed Maria Sharapova won her second WTA tournament in a week, defeating Russian compatriot Nadia Petrova 7-5, 6-2 in the final.Sharapova defeated Daniela Hantuchova in three sets to win the Zurich title last Sunday and her win in Austria will give her favourite status for the WTA Tour Championships in Madrid in the second week of November.
It was her sixth title of the year including the US Open, and the 15th of her career.
After complaining of mental fatigue in her semi-final win over Patty Schnyder, Sharapova shot out of the blocks to break title-holder Petrova's serve in the opening game of the match.
But world No. 5 Petrova, who lost in the final of the Kremlin Cup in Moscow last week to Anna Chakvetadze, hit back to level at 4-4.
Sharapova had to stave off two set points two games later before turning on full power.
She took the set 7-5 and grabbed another quick service break to open the second as she moved on to take the title.
"It was my last match before Madrid and I absolutely wanted to win it," said Sharapova who should move to number two in the world on Monday.
"I'm playing with more confidence because I'm playing more. I'm more fit. I feel as I play more matches, I'm getting better and better. I'm excited that at this point in my career I'm fit enough to win three tournaments in a row."
Sharapova added that she will remember 2006 with fondness.
"It's been an incredible year. Winning another major has been great. It's been a really cool year. I've been consistent and have had some great results."
n
Mario Ancic of Croatia won the St Petersburg ATP tournament, defeating defending champion Thomas Johansson of Sweden 7-5, 7-6 (7/2) in the final.
The victory gave Ancic a chance of reaching next month's lucrative season-ending Masters Finals in Shanghai.
He now has 387 points, just 23 points shy of Spain's Tommy Robredo who currently holds down the eighth and final qualifying spot with only next week's Paris Masters Series tournament to come. Already qualified for Shanghai are Roger Federer, Rafael Nadal, Ivan Ljubicic and Andy Roddick with Nikolay Davydenko, David Nalbandian, James Blake and Robredo next in line.

TITLE: Champions Chart Quick Progress
AUTHOR: By Mike Collett
PUBLISHER: Reuters
TEXT: LONDON — As many as 11 clubs could secure a place in the knockout round of the Champions League this week if all the results went the way of the favourites when Matchday Four is played on Tuesday and Wednesday.Teams like Chelsea (Group A), Bayern Munich (Group B), Valencia (Group D), Olympique Lyon (Group E) and Manchester United (Group F) all have one foot in the door after winning their opening three matches and it would take an unlikely loss of form as well as a series of unlikely results to stop them advancing now.
If they were all to win again this week they would be through, and could be joined by the likes of Liverpool, PSV Eindhoven, Real Madrid, AS Roma, Celtic, AC Milan and Lille.
Others like Arsenal and CSKA Moscow are likely to go through before the completion of the group phase matches. The obvious missing name from the above list is that of reigning European champions Barcelona whose place in the last 16 could be in some jeopardy if they were to slip up at home against Chelsea at the Nou Camp on Tuesday.
With three matches completed in Group A, Chelsea top the standings with nine points following their 1-0 home win over Barcelona two weeks ago. They meet again at the Nou Camp this week and Barcelona, who beat Levski Sofia 5-0 in their opening match then drew 1-1 at Werder Bremen, must win. Anything less would leave them facing elimination, especially if Werder, who are also on four points, beat Levski in Sofia.
Barcelona have slipped in recent weeks, but their Brazilian playmaker Ronaldinho showed signs of returning to his best on Saturday with two goals in Barcelona's 3-0 win over at Recreativo Huelva — one a penalty and the other a rare header.
Chelsea, in contrast, have been grinding out wins with their usual efficiency although they have never won at the Nou Camp in five matches dating back to 1966. Among the other sides whose future in the competition is finely balanced are Inter Milan and Porto.
Inter have dreamt now for more than 40 years of adding to the two European Cups they won in 1964 and 1965 and started this season with high hopes after being elevated to the position of Italian champions in the wake of the Serie A match-fixing scandal of last season.
But they started their Group B campaign badly, losing 1-0 to Sporting Lisbon in their first match and 2-0 at home to Bayern in their second.
Their 2-1 win over Spartak Moscow two weeks ago revived their campaign and another win over Spartak, albeit this time in Moscow, will give them a chance of advancing, especially if Bayern follow up their 1-0 win over Sporting in Lisbon with another win over the Portuguese side in Munich.
Porto, the reigning Portuguese champions and European Champions in 2004, also face a crucial game in Germany against Hamburg SV in Group G.
With CSKA (7 points) and Arsenal (6 points), meeting in London and both looking likely to qualify, Porto (4 points) must inflict a fouth successive defeat on Hamburg to keep their own chances realistically alive.

TITLE: A 100 Million-Year-Old Bee
PUBLISHER: The Associated Press
TEXT: PORTLAND, Oregon — A scientist has found a 100 million-year-old bee trapped in amber, making it possibly the oldest bee ever found."I knew right away what it was, because I had seen bees in younger amber before," said George Poinar, a zoology professor at Oregon State University.
The bee is about 40 million years older than previously found bees. The discovery of the ancient bee may help explain the rapid expansion and diversity of flowering plants during that time.
Poinar found the bee in amber from a mine in the Hukawng Valley of northern Myanmar, formerly known as Burma. Many researchers buy bags of amber from miners to search for fossils. Amber, a translucent semiprecious stone, is a substance that begins as tree resin. The sticky resin entombs and preserves insects, pollen and other small organisms.
Also embedded in the amber are four kinds of flowers. "So we can imagine this little bee flitting around these tiny flowers millions of years ago," Poinar said.
An article on his discovery will appear Friday in the journal Science, co-authored by bee researcher Bryan Danforth of Cornell University.
In the competing journal Nature this week, there is an article about the unraveling of the genetic map of the honeybee.
The recently completed sequencing of the honeybee genome already is giving scientists fresh insights into the social insects.

TITLE: Regulars Bare All in Erotic Film Competition
AUTHOR: By Adam Tanner
PUBLISHER: Reuters
TEXT: SAN FRANCISCO — As Aaron Strickler sees things, the world would be better off if others could see him having sex on film."Filming sex is fun and bringing joy and levity to other people is the biggest thing we can do in this life," he said before he premiered a short film of explicit footage in a split-screen, black-and-white format.
Strickler, 36, and the other six finalists at San Francisco's Amateur Erotic Film Competition were following a long tradition of homemade porn that has often helped inspire the mainstream industry.
People have filmed sex since soon after the invention of movies, and such "stag" movies were in underground circulation by World War One.
The introduction of video recorders in the 1970s and 1980s gave people cheap tools to film their own exploits. Then the Internet sparked a new wave of home production.
The competition's runner-up, with a film about three swinging couples, said he wanted to make movies that were more real and compelling than commercial pornography.
"I'm so fed up that there is nothing to watch," Mark Fowler said.
One pioneering effort started in 1949, when famed researcher Alfred Kinsey filmed his own home sex movies, pressing members of his staff, their wives and others to have sex before a camera in his attic.
"I performed because I thought it was necessary. How could I refuse to refuse to perform if I was asking other people to do so?" Paul Gebhard, 89, a close Kinsey associate, said this week in an interview from his Indiana home.
"We were quite interested in finding out how people behaved during sexual response," said Gebhard, who succeeded Kinsey as director of the Institute for Sex Research from 1956-82.
Explicit home movies have helped change commercial pornographic films. Out went the contrived plots and dialogue leading to sex popular in 1970s films, as filmmakers focused instead on hard-core action in a style known as "gonzo."
"It could also be argued ... that this amateur stuff with the camcorder really inspired a huge segment of the market which is called 'gonzo', which is the dominant form of pornography now," said Mike Ramone, editor in chief of Adult Video News, a trade publication.
He said amateur porn made cheaply with camcorders helped inspire professional directors, including the one seen as perhaps the greatest porn movie maker, John Stagliano.
In a telephone interview, Stagliano, 55, a director and actor also known as "Buttman," said at its best amateur erotica brings a reality missing in much professional porn.
"The really, truly great thing about amateur is that you find somebody incredible, some really sexy girl who wants to show off and it's all real," he said.
"Whereas in the conventional business it's mostly real in the very first few scenes and then it kind of becomes more professional as you go on."
A few amateur filmmakers at the San Francisco competition tried to take an artistic approach by using experimental editing techniques or a different approach to erotica.
"We hope to make revolutionary headway in the world of pornography," said Tallulah Sulis, whose film featured eight women including herself.
In the end, the judges awarded the $500 first prize to Cory Wees for a film portraying his bondage and discipline by a woman.

TITLE: Harrington Claims European Order of Merit
AUTHOR: By Norman Dabell
PUBLISHER: Reuters
TEXT: SOTOGRANDE, Spain — Irishman Padraig Harrington won the European order of merit title in dramatic style after finishing joint second at the Volvo Masters on Sunday just a stroke behind India's Jeev Milkha Singh.A bogey on the last by Sergio Garcia not only cost the Spaniard the chance of a playoff with Singh but contributed to Harrington's maiden Vardon Trophy success as he overtook Englishman Paul Casey to grab first place on the money list.
It was the first time the Irishman had topped the order of merit all season but he was delighted to snatch the crown.
"For 63 holes I played great golf but had too many three-putts and other mistakes but I stayed calm, never lost patience and for some reason the last nine holes were vintage Harrington," he said. "I just willed the ball into the hole."
"Obviously, I feel for Paul Casey, especially after his problems earlier on the week. To lose out like this must be very hard to bear," the Irishman told a news conference.
He finished 23,616 pounds ($44,640) ahead of Britain's Paul Casey in one of the most exciting finishes to the season for 11 years, matching the 1995 success of Colin Montgomerie who holed a three-foot par putt on the last to pip Sam Torrance.
The drama again came on the 18th hole after Harrington had posted a one-under total with a closing 69.
With the Irishman watching on a television screen in the players' lounge at Valderrama, Garcia, who would have ended Harrington's chances with a par on the last, bunkered himself on 18 and then missed a 30 foot putt to save par.
That dropped Garcia into a share of second with Harrington and Englishman Luke Donald and provided the first Irish name for the Vardon Trophy since Ronan Rafferty's 1989 success.
He began the Volvo Masters 147,041 pounds behind Casey but an enigmatic display by the 35-year-old Irishman, despite his English rival suffering from a gastric complaint in the first two rounds, did not bode well at the start of the final round.
After throwing in three late bogeys in the third round to settle well back in the pack, Harrington began on Sunday with two bogeys and showed little likelihood of winning.
When he allowed a birdie chance to slip on the 17th, although bravely making par, it looked as though he would fall just desperately short in his order of merit bid, with Casey, who closed with a 69, holding a place in the top 25.
Garcia's 12-footer for birdie on the 16th took Harrington back to third, which was not good enough for the order of merit.
But after the Spaniard missed his birdie chance on 17 and fluffed his second shot into the bunker, the Irishman, who had set up his overall title win with a flawless back nine containing three birdies, came out on top.
Remarkably, it was Harrington's 30th career second place, albeit a highly significant runner-up spot this time.
"When I made my 29th second at the BMW International this year I thought the 30th was going to be a bit of a milestone," Harrington told a news conference. "Sometimes it's very good to finish second. This one adds up to an order of merit."
Casey left immediately after the outcome was decided and was not available to comment but he said earlier: "I certainly want an order of merit on the C.V. before I hang up my clubs. It will be a disappointment if it doesn't happen, but not a crushing disappointment."
David Howell, who led the money list for much of the season until overtaken by World Matchplay Champion Casey last month, finished third on the order of merit after a closing 71 left him sharing fifth at the Volvo Masters with Swede Niclas Fasth. The Englishman had made a valiant effort this season despite injury problems that caused him to miss several events. Swede Robert Karlsson, the only other player who could have pipped Casey, faded to a 75 to finish on the same overall score as the unlucky Englishman at the Volvo Masters.

TITLE: Australia Unveils Test-Tube Koalas
PUBLISHER: Reuters
TEXT: SYDNEY — Australian scientists unveiled three test-tube koala joeys on Monday as part of an artificial insemination program to preserve the vulnerable mammal.The scientists said the program would lead to the creation of the world's first koala sperm bank, which will enable researchers to screen out koala diseases.
Scientists from the University of Queensland said a total of 12 koala joeys were produced using test-tube insemination. The koalas were conceived using a new breeding technology that uses sperm mixed with a special solution to prolong the sperm's shelf life, said Steve Johnston, the project leader and University of Queensland reproductive biologist.
"Eight of the 12 current test-tube joeys were born following the artificial insemination of freshly diluted sperm samples," Johnston said in a statement.
"The next vital step is the use of chilled sperm and then thawed frozen sperm from the sperm bank."
The koala is not classified as an endangered species but it is listed as vulnerable to extinction in parts of two Australian states, Queensland and New South Wales.

TITLE: Ballots Burnt After Historic Congo Vote
AUTHOR: By Barry Moody
PUBLISHER: Reuters
TEXT: KINSHASA — Counting from Congo's election proceeded swiftly on Monday but thousands of ballot papers were burnt in the east after a soldier killed two election officials.International monitors and diplomats expressed satisfaction about the presidential run-off and provincial elections across the huge central African country on Sunday and said trouble was confined to isolated incidents.
Counting of votes was going more swiftly than in the first round of the election, Democratic Republic of Congo's first democratic poll for four decades.
Incumbent President Joseph Kabila and former warlord Jean-Pierre Bemba are contesting control of a country which is a treasure trove of mineral riches but left destitute by decades of war and exploitation.
The vote is meant to draw a line under the 1998-2003 war that killed more than 4 million people, mostly from hunger and disease.
Despite the task of organising a vote in a country the size of western Europe with scarcely any roads, electoral commission spokesman Dieudonne Mirimo said the count was going well.
"Counting has finished nearly everywhere. We are now in the process of collecting them and bringing them to compilation centers," he said. Vote counts from 50,000 polling stations will be collated in 62 centers.
Analysts and diplomats said the result was likely to be announced ahead of the November 19 official deadline. In the first round Kabila polled 45 per cent against Bemba's 20 percent.The generally successful vote, which cost the international community over $500 million, was marred by a handful of incidents, the latest in the early hours of Monday when an apparently drunken army sergeant shot dead two election workers.Leocadio Salmeron, a UN spokesman in the war-ravaged Ituri district in the east, said people tried to lynch the soldier but when he was arrested he went on a rampage, destroying about half the polling stations in the town of Fakati, north of Bunia.
Some 25,000 people were registered to vote in the stations.
Mirimo said the election would be rerun on Tuesday in the town of Bumba, in northern Equateur province, where a polling station was destroyed by rioters on Sunday. Police shot two rioters dead.
Despite general optimism over the vote, there is concern about the danger of clashes between the two candidates' supporters or private armies as results trickle out.
More than 30 people died in three days of street battles in Kinshasa when first round results were announced in August.
Western diplomats anxiously watching the count are hoping for a substantial margin between the two men of at least 10 percent to avoid one side challenging the result with force.
But international monitors who asked not to be named said early indications were of a low turnout in Kabila's eastern strongholds which could undermine his strong first round lead.
Aides of the two men signed a declaration on Sunday promising not to contest the result by force and to guarantee the safety of the losing candidate.
But former Canadian Prime Minister Joe Clark, leader of observers from the U.S. Carter Center, told Reuters: "We have to remember this is a country that is not very far from a civil war ... There are questions both about what leaders might do but more particularly about what might be done in their name that they can't control."

TITLE: Chadian Rebels Say They Will Strike Again
AUTHOR: By Pascal Fletcher
PUBLISHER: Reuters
TEXT: DAKAR — Chadian rebels who fought government forces over the last week, briefly seizing two towns, said on Monday they were still inside Chad and would strike again against President Idriss Deby's army.A fighting column of the newly formed rebel United Forces for Democracy and Development (UFDD) pushed west last week towards N'Djamena before pulling back towards the eastern border with Sudan in the face of a government counter-attack.
Chad's Defense Minister Bichara Issa Djadallah said at the weekend that the government army in the landlocked central African oil producer had cornered the rebels, inflicting heavy casualties and taking many prisoners.
But the minister also said that the joint head of Chad's armed forces, Gen. Moussa Sougui, had died after being wounded in the fighting. This appeared to be a fresh setback to Deby's forces, which have been drained by desertions in the last year.
Speaking to Reuters by satellite phone, UFDD leader Gen. Mahamat Nouri, a former defence minister who defected from Deby's government in May, said his fighters were still inside Chad in the region of Goz Beida.
"There's no fighting today, we're OK here," Nouri said over a faint, crackling line. He added that, besides Sougui, other army officers were killed in heavy government losses.
Chad's government had said its forces had pushed the rebels over the border into Sudan.
Asked whether the UFDD planned further attacks against Deby's forces, Nouri replied: "Absolutely. We have our strategy to take on the government forces".
But Nouri, a former Chadian ambassador to Saudi Arabia who announced his defection days after May 3 polls that returned Deby for a third term, said his forces did not intend to advance on the capital N'Djamena for the moment.
Chad accuses neighbor Sudan of backing the rebels. Khartoum has repeatedly denied such charges. Chad's defense minister said 100 rebels had been killed in Sunday's fierce fighting. A UFDD statement published on a Chadian opposition website put the government losses at 215 dead and said 15 of its own fighters were killed.
There was no independent confirmation of the government and rebel versions of the combat in Chad's remote eastern scrubland, where both sides use fast-moving columns of pickup trucks, some mounted with machine guns and rocket-launchers.
Three weeks before the May 3 election, another rebel group racing in from the east struck directly at N'Djamena, but was beaten back by government forces.
Since then, Deby's army has launched several offensives against rebel bands in the east, where the long-running conflict in Sudan's western Darfur province has pushed both refugees and fighters over the border into Chad.

TITLE: Pakistani Army Kills 80 at al Qaeda-Linked School
AUTHOR: By Anwarullah Khan
PUBLISHER: Reuters
TEXT: KHAR, Pakistan — Pakistani army helicopters killed around 80 suspected militants on Monday in a dawn attack on a religious school run by a pro-Taliban commander wanted for harboring al Qaeda fighters, a military spokesman said.The army said the religious school or madrasa in Chenagai, 10 km (six miles) north of Khar, the main town in the Bajaur tribal region bordering Afghanistan, was being used as a militant training camp. The strike killed almost everyone present in the madrasa, although at least three wounded were taken to hospital in Khar.
"The compound has been destroyed," Major-General Shaukat Sultan told Reuters.
"According to our local sources, up to 80 deaths have been confirmed," he said. No ground troops were sent in to mop up.
Residents said they had seen three or four army helicopters flying over Chenagai at around 5 a.m.
No prominent militant was believed to be in the compound when it was attacked, Sultan said. Security officials said one of those killed was Maulana Liaqatullah, the pro-Taliban commander who ran the madrasa.
Sultan said there were no women or children present.
Some villagers said there were young children among those killed, but Maulana Faqir Mohammad, a militant commander at the target site, told Reuters Television that the dead were aged between 15 and 25.
Bodies covered with white sheets lay in rows as Mohammad addressed hundreds of gunmen gathered by the ruined madrasa, declaring his support for al Qaeda leader Osama bin Laden and Taliban chief Mullah Mohammad Omar.
"May Allah protect Sheikh Osama. May Allah protect Mullah Omar," the long-haired, bearded militant leader said.Thousands of tribesmen rallied in Khar chanting "Down with America," "Down with Bush" and "Down with Musharraf".The leader of Jamaat-e-Islami, Pakistan's most influential Islamist party, condemned the attack as "barbaric" and claimed it was carried out by U.S.-led forces from across the border.
"This alien attack... is tantamount to a declaration of war on Pakistan," Qazi Hussain Ahmed told a news conference, while a senior minister from his party resigned in protest from the provincial government in North West Frontier Province.
Last January, Liaqatullah was believed to have had contacts with al Qaeda number two Ayman al-Zawahri that led to a CIA drone aircraft missile attack on Damadola village in Bajaur.
Zawahri was not present at the time but some al Qaeda operatives were killed.
Pakistan's lawless tribal belt along the Afghan border has been a haven for Islamist militants for decades. Many al Qaeda and Taliban guerrillas took refuge there after fleeing the U.S.-led hunt for them in Afghanistan after September 11, 2001.
Monday's attack came two days after 3,000 militants held a rally near Khar, chanting support for bin Laden and Omar.
Talks between tribal elders and militants to reach a peace deal along the lines of the one struck in North Waziristan last month appeared to have failed, local clerics said.
A mountainous region that is difficult to access, Bajaur lies opposite Afghanistan's eastern province of Kunar, where U.S. troops are leading the hunt for al Qaeda and Taliban fighters.
Bajaur is the most north-easterly of seven semi-autonomous tribal regions that make up Pakistan's Federally Administered Tribal Areas (FATA) and are home to around 3.5 million people.
The Pakistan military has close to two divisions, some 30,000 men, in North and South Waziristan, the two other tribal agencies where support for the Taliban and al Qaeda has been rampant.
The army is deployed on the border in Bajaur, but internal security has been left to locally recruited police and militia.