SOURCE: The St. Petersburg Times
DATE: Issue #1229 (95), Tuesday, December 12, 2006
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TITLE: Putin Hints At Deal On Shtokman
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: MOSCOW — President Vladimir Putin and two senior state officials reopened the possibility of foreign energy majors taking part in the Shtokman gas project, signaling that Gazprom might soon reverse its decision to bar them from developing the giant Arctic field.
“The issue [of Shtokman] is not closed,” Putin said in an interview posted on the Kremlin web site Friday. “It can be looked at again if foreign partners present interesting proposals.”
His comments prompted speculation that the selection of foreign partners for Shtokman could, after all, have been linked to negotiations with the United States on Russia’s entry to the World Trade Organization. Spokespeople for the Kremlin have previously denied the existence of a direct link between the two issues.
The United States signed its bilateral WTO deal with Russia on Nov. 19 in Hanoi, Vietnam, where Putin was meeting with U.S. President George W. Bush.
Gazprom’s announcement in early October that it had rejected all five foreign bidders for Shtokman prompted widespread shock and skepticism in the global oil and gas industry. Many doubted Gazprom was capable of developing the huge gas field, its first offshore, on its own.
In separate statements, Putin and Industry and Energy Minister Viktor Khristenko reiterated Gazprom’s argument that the equity swaps offered by the five short-listed companies — U.S. oil majors ConocoPhillips and Chevron, France’s Total, and Norway’s Statoil and Norsk Hydro — were inadequate.
“The possibility still exists to attract partners to work on different parts of the project as contractors and possible participants,” Khristenko was quoted by Russian news agencies as saying.
“But the format [of the talks] will be different,” he said, providing no further details.
Putin’s economic adviser, Igor Shuvalov, whose reported comments on a trip to Washington in April first sparked the controversy over a possible link between Shtokman and the WTO deal, also appeared to indicate a shift in the Kremlin’s position. 
On Thursday, Shuvalov, speaking again in Washington, said: “Shtokman will be developed together with foreign companies.”
He added: “Gazprom will be the sole holder of the license, but it won’t be able to develop the deposit on its own.”
Insiders said the WTO deal could be prompting a change of heart by Russian officials.
“Although the political relationship is still somewhat testy, we have overcome the hump of the WTO bilateral,” said Andrew Somers, president of the American Chamber of Commerce in Russia.
“The door is opening up to foreign companies, and to U.S. companies specifically,” he said, referring to the Shtokman project.
Shuvalov said in April, ahead of the Group of Eight summit in St. Petersburg, that the chances for foreign companies to participate in Shtokman were linked to the WTO agreement. 
The latest comments by Putin and his officials contrast with Gazprom’s stance in October, when CEO Alexei Miller told Russia Today state television that foreign companies would only be welcome as contractors, not equity partners.
A Gazprom spokesman said Friday, however, that the company’s position had not changed since October. “We’ve already said what Khristenko said today,” the spokesman said.
A spokeswoman for Statoil said the Norwegian company would only enter the project if it had a stake in it. Officials at Chevron have previously said the same thing.
“If there is a new opportunity for participation as an equity investor in the Shtokman license, that is obviously of interest to Statoil,” spokeswoman Rannveig Stangeland said by telephone from Oslo. “We are waiting for further information from Gazprom.”
Total’s spokeswoman in Paris, Patricia Marie, sounded a more cautious note, indicating the increasing fragility of the investment climate in Russia.
“We are always interested to enter many projects worldwide, but it depends on conditions too,” Marie said by telephone. “We didn’t receive any notification when we learned we were no longer being considered for the project and we haven’t received anything now.”
Many observers expected Gazprom to take on a European partner to develop Shtokman after announcing in September that it would divert most of the field’s output as natural gas to Europe. The original plan would have seen the bulk of output shipped as liquefied natural gas to the United States.
The original decision to exclude foreigners from Shtokman — coming on the eve of a trip by Putin to Germany — was a political decision meant to scare Europe into accepting Russian investment, said Chris Weafer, chief strategist at Alfa Bank. “These [officials’] statements show there is an ongoing debate with Europe over energy security. The Europeans are looking for energy security, whereas Russia is looking for economic partnership,” he said.
Moscow hopes Europe will lift objections to Russian investment in various sectors, from aviation to technology, and in return Russia will allow Europeans to take equity stakes in strategic natural resource projects, he said. Weafer added that Russia needed foreign companies to develop the field, which lies in extremely difficult conditions under the Barents Sea about 550 kilometers off the Russian coast. It is estimated to hold about 3.7 trillion cubic meters of gas.

TITLE: Blaze at Moscow Rehab Center Kills 45
AUTHOR: By Vladimir Isachenkov
PUBLISHER: The Associated Press
TEXT: MOSCOW — Nine patients of a clinic for the mentally ill in Siberia died in a fire Sunday, a day after a blaze at a Moscow drug treatment center killed 45, officials said. 
The accidents underlined widespread neglect for fire safety rules in Russia, which records about 18,000 fire deaths a year — several times the rate in the United States.
The fire in the psychiatric hospital in the town of Taiga in central Siberia, about 2,200 miles east of Moscow, began shortly after midnight. About 200 other patients escaped unhurt and 15 were hospitalized, said Valery Korchagin, a spokesman for the regional branch of Russia’s Emergency Situations Ministry.
Korchagin said that hospital officials tried to extinguish the blaze on their own and were slow to report it to officials. “They only reported it 1 1/2 hours after the fire started,” he said.
Russian television stations showed the hospital’s two-story building engulfed by fire and a line of half-dressed patients walking through a blizzard. A rescue worker carried one patient, clad in pajamas, who was unable to walk.
Korchagin said that some patients suffered fractures as they jumped out of windows, and some received burns. The cause of the fire was not immediately clear, he said. Local prosecutors were looking at arson as a possible cause, the ITAR-Tass news agency reported.
The fire in the Moscow clinic erupted early Saturday in a wooden cabinet in a kitchen at one end of a second-floor corridor. The main exit was blocked by a locked gate that staff members could not open in time, and the only other way out was cut off by smoke, Russia’s chief fire inspector Yury Nenashev said.
Inspectors who visited the hospital in February and March had recommended its temporary closure because of safety violations.
Other officials said the hospital’s personnel had not spotted the fire in time, and launched a criminal inquiry into possible charges of neglect of duty.
Nenashev said he was “90 percent certain” the blaze resulted from arson, and some reports said the fire could have been started by a patient.
A fire also erupted Saturday at another mental clinic in the village of Troyanovo in the Tver region, about 120 miles northwest of Moscow, but rescuers quickly evacuated around 300 patients and no one was hurt, said Arsen Grigorian, head of the local Emergency Situations Ministry’s branch.
Experts say fire deaths have skyrocketed in Russia since the collapse of the Soviet Union, in part because of a disregard for safety standards.
Kamilzhan Kalandarov, a member of the Public Chamber, a Kremlin-appointed rights body, called for stronger public oversight over drug and psychiatric clinics to make them more transparent and end abuses of patient’s rights.
“Thick iron bars on the windows, iron doors and cruel treatment are intended to subdue hospital patients,” Kalandarov was quoted as saying by the RIA Novosti news agency. “The death toll in a Moscow fire wouldn’t have been that high without barred windows.”

TITLE: Thief Caught in the Act at Hermitage
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: A female museum custodian fought bravely over a priceless silver ladle with a former security guard who made a reckless attempt to steal it from the State Hermitage Museum, it emerged Monday.
The Russian Department of the museum — still reeling from the notorious theft of nearly $5 million-worth of artifacts announced in late July — was once again a target of theft it said in a statement on Friday, but this time the would-be thief was caught red-handed.
The man was visiting “Russian Culture of First Half of Eighteenth Century” on Friday when he broke the glass of one of the display cases and attempted to steal the silver ladle. 
The man was later detained by the museum’s security service after the attempted smash-and-grab triggered a museum alarm. He was later handed to the police, the museum’s statement said. 
The Hermitage press-office declined to give further comment regarding the case on Monday. 
But Major Igor Alexandrov, chief press officer of the state-run Vnevedomstvennaya Okhrana, the organization that provides security service to the museum, said that the robbery was prevented due to the bravery of a female custodian.
“After the suspect broke the window using his knee and elbow and grabbed the exhibit, she reacted immediately. Shouting ‘Where are you putting it’ and ‘Give it back at once,’ she ran after him and caught hold of the ladle’s end,” he told the St. Petersburg Times on Monday. 
Alexandrov said that what lay behind the incident was unclear. He said that according to the suspect, whose mental health is under investigation, he was recently fired from a job as a guard and on Friday he was rejected for a similar position. This might have triggered the incident, Alexandrov said.
“During the fight with the custodian, the suspect, who was, by the way, quite large, kept on asking where the tsar’s stamp was,” he said.
Referring his comments to the Hermitage, Alexandrov added that the ladle might have once been in the possession of the father of St. Petersburg’s founder Peter the Great. 
“The object is made of silver and gold, has a some kind of a bas-relief on its handle and its bottom is decorated with Russia’s emblem — a nice-looking thing,” he said, adding that the suspect declined to elaborate on which “tsar’s stamp” he was looking for. 
“Apparently he was searching for some kind of hallmark,” Alexandrov said.
But there were other reasons the suspect, who has not been named, may have wanted the ladle.
“One reason he told us was that he simply wanted to see whether the ladle was as heavy as it looked — and also to test how good the Hermitage’s security was,”  Alexandrov said.
Museum director Mikhail Piotrovsky reportedly blamed the press for the incident, according to the Canadian Broadcasting Corporation.
“He suggested with so many articles written about how easily items were stolen from the Hermitage, certain people are prompted to really try to steal something,” CBC reported Friday.

TITLE: Russia, U.S. Get More Time to Destroy Arms
PUBLISHER: The Associated Press
TEXT: THE HAGUE, Netherlands — The United States and Russia have been granted a five-year extension to the 2007 deadline for destroying their chemical weapon stockpiles, the international organization overseeing the process said Monday.
U.S. authorities requested the extension earlier this year, saying they would not be able to meet the original deadline set by the Organization for the Prohibition of Chemical Weapons.
Russia, which is in the process of destroying its chemical arsenal, also has until the end of April 2012 to complete the job.
The United States is one of 178 countries that belong to the Chemical Weapons Convention, which went into effect in April 1997, obliging member countries to stop the development of any chemical weapons and to complete the destruction of their stockpiles within 10 years.

TITLE: Local Parties Unite for ’07 Elections
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Local political parties are joining forces in an attempt to “combat ‘black PR’ and resist [the misuse of] administrative resources [against them]” ahead of elections to the city parliament to be held in March. But despite the enthusiastic debate, the hopes for a fair campaign are scarce.
Although the election campaign is not due to start until mid-January, politicians have expressed concern that it may become one dirtiest in recent years. This month the federal Duma abolished the minimum voter turnout limit, which was seen by many analysts as the last way of controlling misuse of electoral registers and other “black” techniques to manipulate elections, such as negative campaigning.
“Until now, the amount of dirty reports and planted stories compromising rival candidates has been kept under some control — mainly because of worries that in especially large quantities it may lead in the voters boycotting elections,” Sergei Andreyev, a lawmaker for the Just Russia faction at the St. Petersburg Legislative Assembly, said. “But nobody cares about the turnout anymore.”
St. Petersburg branch of Just Russia, a newly formed movement, led by Sergei Mironov, speaker of the Council of Federation, has come up with a draft of a Charter of Just Elections, that was presented at a Rosbalt News Agency news conference Monday. The charter calls for the fair use of administrative resources — the government using its role as the entity that runs elections to affect their outcome in favor of its preferred candidates — and an end to “kompromat wars,” in which compromising material is used against candidates. The charter, its sponsors said, should be supported by every party taking part in the march elections.
However it was clear that those taking part in the discussion, which drew representatives of Just Russia, the Union of Right Forces, Liberal Democratic Party (LDPR) and the Communist Party of Russia (KPRF), were aiming fire at their strongest rival, the pro-Kremlin United Russia party, which holds lion’s share of seats at the St. Petersburg Legislative Assembly, and in the Duma.
Andreyev was particularly vocal.
“If we do not team up against them, they will be squeezing us out of elections one by one using whatever tricks available to them,” Andreyev said. “I have seen it used against me, from planted stories describing me as a child torturer to dead voters raising from their graves to vote for my rival from United Russia. This party’s ideologists read Gogol’s “Dead Souls” well, indeed.”
His colleague Oleg Nilov concurred. 
“Of course, all parties are looking for patrons and protectors, and this is perhaps incorrigible but what happens with United Russia in our country — and already in St. Petersburg — is that their election campaigns seem to be orchestrated directly by the authorities.”
Vladimir Fedorov, one of the leaders of the local branch of the Communist Party of Russia, complained that even when there is no election campaign, it has become more and more difficult to reach out to potential voters.
“Over the past year it has gotten extremely difficult to organize an ordinary street meeting,” Fedorov said. “City Hall either calls it ‘not recommended’ or provides a suicidally inconvenient location for it, sending us in the middle of nowhere instead of a downtown square we would request.”
Anton Bogatushin of the Union of Right Forces suggested Russia should employ the practice used in Sweden, where the state provides equal financing to all registered candidates. 
“Then at least one aspect of the competition would ensure equality,” he said.
Yabloko stayed away from the charter discussion accusing its ideologists of hypocrisy. 
“A new party is seeking media attention and a greater public exposure,” said Yabloko spokesman Alexander Shurshev. “Elections in Russia have long stopped even resembling honest competition. They are a triumph of inequality.”
“Indeed, with Just Russia’s Sergei Mironov being the speaker of the Council of Federation, this talk about combating [the misuse of] administrative resources’ is laughable: there is a clear conflict of interests,” agrees Gennady Ozerov of the Liberal Democratic Party.
United Russia representatives ignored the meeting.
Yelizaveta Agamalyan, spokesperson for the city parliament speaker Vadim Tyulpanov and the local branch of the United Russia, said lack of faith in declarations was behind the party members’ reluctance to join in the discussion.
“Declarations like this — whatever noble goals their pronounce — are not an efficient tool against [the misuse of] administrative resources,” Agamalyan said. “As for the United Russia candidates, we feel they are fair players.”
Even those politicians who have agreed to take part in shaping up the charter, have little hope in fair play in the forthcoming election campaign.

TITLE: Churches Must Report on Offerings, Services
AUTHOR: By Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — Churchgoers who drop money in the collection plate might want to consider the consequences of their generosity, lest their places of worship be shut down in April amid a blizzard of bureaucracy.
Under new rules that Protestants fear will threaten religious freedom, churches must start counting how much of their tithe and offerings come from Russians and foreigners.
The new rules also require churches to account for every service and any other event, including the time and date it took place, how many people attended and the “makeup” of the participants, such as whether they were mostly students, small-business people or some other group, according to documents that churches and other nongovernmental organizations have to submit to the Federal Registration Service.
The rules are part of the contentious new law on NGOs that forced all foreign groups to reregister with the service by October. For religious organizations, the law means they must submit the new accounting forms to the service by April 15 or face closure.
“If there is a collection box in the corner, how are we supposed to know who donated what?” Konstantin Bendas, a spokesman for the Russian Church of Christians of Evangelical Faith, said Friday.
Furthermore, he said, keeping a tally of every service promises to be a bureaucratic nightmare. 
“This may be fine for an NGO that has three or five events per year, but a religious organization has events every day with services in the morning, afternoon and evening,” he said. 
“So for every Russian Orthodox service, you would have to indicate who came to worship, who sang and who read the liturgy. It all leads to pointless bureaucracy.”
Bendas’ union of evangelical faith is among five Protestant groups that signed a Dec. 1 appeal to First Deputy Prime Minister Dmitry Medvedev to exclude churches from the accounting rules in the NGO law. The other signatories include the Baptists and the Seventh-day Adventists. Medvedev chairs the government commission on religious organizations.
The appeal says the accounting rules violate the law on freedom of conscience and religion, and that the required paperwork makes it nearly impossible for religious organizations to remain in compliance.
Vladimir Ryakhovsky, one of the country’s top lawyers for religion issues, concurred that it would be “physically impossible” for religious organizations to comply with the new rules and predicted “big problems” for many organizations come April.
“The biggest problem will be that organizations the powers-that-be want to strangle out of existence will be targeted for their lack of compliance,” Ryakhovsky said.

TITLE: Death Toll From Beslan Siege Reaches 334
PUBLISHER: The Associated Press
TEXT: NALCHIK — A woman injured during the 2004 school hostage taking in the southern town of Beslan died of her injuries Friday, bringing the total death toll to 334, a Beslan activist said.
Yelena Avdonina, 33, died of hematoma in a Beslan hospital, said Mairbek Tuayev, head of a group distributing humanitarian assistance to the victims of the attack.
He said Avdonina had undergone several operations.
Avdonina, who had worked as a librarian in Beslan School No. 1, was held hostage for three days, together with her son and more than 1,100 children, parents and staff, in the school’s gymnasium by at least 31 heavily armed militants.
Avdonina’s son survived the siege, which ended on Sept. 3, 2004, when one of the militants’ explosive devices went off and security forces stormed the building. The ensuing maelstrom of explosions and gunfire killed the majority of the victims, more than half of whom were children; 12 special forces and emergency workers also died.
Two other former hostages died of their wounds last year, and another former hostage died last August, which had brought the overall death toll to 333 — a figure that does not include the hostage takers.
Survivors and victims’ relatives claim many deaths occurred because troops fired at the school using tanks and flame-throwers, setting off a fire that caused the roof to collapse over many wounded. They blamed authorities for failing to investigate the circumstances of the attack properly and the bungled rescue operation.
Chechen warlord Shamil Basayev, who claimed responsibility for the Beslan siege was killed in an explosion in July, authorities say.

TITLE: Polonium Found in Germany, Widow Speaks
AUTHOR: Combined Reports
PUBLISHER: Combined Reports
TEXT: HAMBURG, Germany — German investigators have confirmed that a car used by a contact of fatally poisoned ex-spy Alexander Litvinenko before the two men met was contaminated with the rare radioactive substance polonium-210, police said Monday. 
Still unknown is whether Russian businessman Dmitry Kovtun was involved in the poisoning, or a victim of it. He is reportedly being treated in Moscow for radiation poisoning.
Investigators said Kovtun flew to Hamburg from Moscow with Aeroflot on Oct. 28 and departed for London on Nov. 1. That is the day when Kovtun and at least one other Russian met with Litvinenko at London’s Millennium Hotel — and when Litvinenko is believed to have fallen ill.
Litvinenko — an ex-Russian agent who was a fierce Kremlin critic — died Nov. 23 of poisoning from polonium-210 after blaming Russian President Vladimir Putin, also a former intelligence officer, for the poisoning.
The Kremlin has vehemently denied involvement.
German authorities said Sunday they found traces of polonium-210 at a Hamburg apartment where Kovtun is believed to have spent the night before he left for London to meet Litvinenko. The substance was found on a couch where Kovtun is believed to have slept.
Tests on radioactive traces found in the passenger seat of the BMW car that picked up Kovtun from the Hamburg airport showed that “it is definitely polonium,” police spokesman Andreas Schoepflin said Monday.
Radioactive traces also have been found on a document Kovtun brought to Hamburg immigration authorities; and at the home of Kovtun’s ex-mother-in-law outside Hamburg — again from before the Nov. 1 meeting.
German prosecutors did not say whether they suspect Kovtun might have been involved in Litvinenko’s death. But they said they were investigating him on suspicion he may have improperly handled radioactive material.
Officials said that any connection between Kovtun and Litvinenko’s death would have to be investigated by British police — rather than by the Hamburg police task force, codenamed “The Third Man” in an apparent reference to the 1949 film about a mysterious death in postwar Vienna.
“We still believe that both variants are possible: that he may be a victim, but also that he may have been involved, at least in procuring the polonium,” prosecutor Martin Koehnke said Sunday.
On Monday, a British police official arrived in Hamburg and was to be briefed on the German investigation, Hamburg police said.
Kirchner, the radiation agency official, said it was possible Kovtun could already have been poisoned and that he left behind traces through body fluids such as sweat.
Whatever his role, at this point, “we have to assume that Mr. Kovtun already had this polonium-210 contamination on him when he came to Hamburg Oct. 28 on a flight from Moscow,” police investigator Thomas Menzel said on ARD television.
Litvinenko met at the Millennium Hotel in London’s Mayfair neighborhood with Kovtun and former Soviet agent Andrei Lugovoi. Another man, security firm head Vyacheslav Sokolenko, has said he was at the hotel but did not participate in the meeting.
Lugovoi has denied that the men were involved in the ex-spy’s death.
Lugovoi, Kovtun and Sokolenko all graduated from an elite military academy in Moscow. Their fathers were Soviet officers who served together at the Defense Ministry, and they went to the same military academy. Kovtun has said he graduated in 1986, a year ahead of Lugovoi. 
Speaking on Ekho Moskvy radio Nov. 24, Kovtun said he served in Czechoslovakia and Germany, remained in Germany after the Soviet collapse in 1991 and lived there for 12 years. He said he was married until recently to a German citizen and still had residency status in Germany. 
He said his business dealings are now in Russia — as a consultant for Western companies looking to do business there. 
Meanwhile, Litvinenko’s widow, Marina, in interviews with two Sunday newspapers and one television station, recalled the final hours of her husband, whom she called Sasha. 
“Obviously it was not Putin himself, of course not,” she said in an interview published in The Mail on Sunday. 
“But what Putin does around him in Russia makes it possible to kill a British person on British soil. I believe that it could have been the Russian authorities.” 
Litvinenko said her husband, who had also worked for the Federal Security Service, or FSB, was not a spy but an investigator who focused on organized crime. 
She stressed that it was his public criticism of the Russian authorities that likely had irritated his former colleagues at the security services. 
“Sasha was a person who openly went out from the system and accused the system of killing people, of kidnapping,” she told Sky News television. The system never forgives you for this; it doesn’t matter whether what he said was true, just that he openly said it, she said. 
Her husband — who recently had become a British citizen — felt safe in London, Marina Litvinenko said, and did not worry about reprisals from the Russian authorities. 
“Sasha never felt he was a target for that,” she told The Sunday Times. “Of course, he wondered about other people, but not about himself. ... But he was absolutely — no, I can’t say absolutely — but he wasn’t sure he was a target for them.” 
In the interviews, Marina Litvinenko also relived her husband’s final hours and said the day he fell ill had been a special one for the couple. It was Nov. 1, the anniversary of the day they came to Britain.
“He began complaining that he felt sick. Then he vomited. I thought that would be it, but he did it again and again, about every 25 minutes,” Marina Litvinenko told The Mail.
Also on Sunday, relatives and contacts of Alexander Litvinenko agreed to meet with Russian detectives probing his death in Britain — if their safety were guaranteed, a family friend said.
“If it is important for the British as a way to get access to the witnesses in Moscow they would agree to speak to the Russians on two conditions,” Litvinenko’s friend Alexander Goldfarb said. Goldfarb added that he had spoken by telephone with two of Litvinenko’s associates and Marina Litvinenko. 
“First, that it is not on the grounds of the Russian embassy ... and second, that the British assure them they [the Russian police] have been checked for the presence of radioactivity or other tricky substances or devices,” he said.
Members of the Litvinenko family as well as billionaires, Kremlin critics and Chechen rebels had gathered on Thursday for Litvinenko’s funeral at London’s Highgate Cemetery, where the father of communism, Karl Marx, is buried.
(AP, Reuters)

TITLE: U.S. Says Kyrgyz Man To Blame in Shooting
PUBLISHER: The Associated Press
TEXT: BISHKEK, Kyrgyzstan — A U.S. Air Force serviceman who fatally shot a Kyrgyz civilian had been threatened with a knife and responded as his training required, the U.S. air base in Kyrgyzstan said Friday.
Kyrgyz President Kurmanbek Bakiyev called for the immunity of U.S. troops deployed in Kyrgyzstan to be lifted after Alexander Ivanov, 42, a truck driver, was shot and killed.
The Manas Air Base said in a statement that the U.S. airman fired at Ivanov after the driver threatened him with a knife during a security check Wednesday at the base’s entrance.
“If a security force member’s life is threatened, they are trained to expend two shots to the upper torso, center mass to ensure the highest opportunity to neutralize the threat,” the statement said.
“Security forces are taught to act immediately and instinctively based on extensive training,” it said. Kyrgyz police said a knife was found at the scene of the incident.
The air-base statement said the U.S. airman, whom Kyrgyz authorities identified as Zachary Hatfield, remained in Kyrgyzstan while an investigation was under way.
The Kyrgyz Foreign Ministry on Thursday delivered a note to the U.S. Embassy demanding that the airman’s immunity be lifted. Status of Forces Agreements in many countries where U.S. military personnel are stationed grant them varying levels of legal immunity.
About 200 family members and well-wishers attended Ivanov’s funeral Friday, including U.S. Ambassador Marie Yovanovitch and the Manas Air Base commander, U.S. Air Force Colonel Joel Reese.
Ivanov’s son, Denis, 15, fainted twice during the ceremony.
His other son, Vadim, 20, said he did not believe his father could have threatened anyone. “He told me often that American soldiers behaved insolently and unceremoniously,” he said.
“I want only one thing: that the guilty man be punished,” he said.

TITLE: Smirnov Likely to Win in Transdnestr
PUBLISHER: Combined Reports
TEXT: TIRASPOL, Moldova — Residents in the self-proclaimed separatist republic of Transdnestr in eastern Moldova voted Sunday in a presidential election expected to be easily won by incumbent Igor Smirnov.
Smirnov, who has Russian citizenship and hails Russia as the natural home for his people, said Sunday after casting his ballot that the election confirmed “Transdnestr’s path to independence and closer ties with Russia.”
Beside Smirnov, three other candidates were on the ballot, including Andrei Safonov, a journalist who is critical of Smirnov and whose bid was initially denied by the electoral commission. Businessman Piotr Tomaily, an independent, and Communist Party leader Natalya Bondarenko, a former police officer, are also on the ballot.
Some 400,000 of the province’s 550,000 people are eligible to vote.
“I will certainly go to a polling station to back Igor Nikolayevich [Smirnov],” said Valentina, 53, a teacher. “The election is a festive day for us.
“For all these years he preserved stability and is backed by Moscow. What else do we need?” she said, shivering in a chilly corridor of a school in Tiraspol, the region’s main city.
The winner needs more than half the votes cast to secure a victory; otherwise, there is a second round.
Smirnov, 65, was first elected in 1991 and was re-elected in 1996 and 2001. His smiling portrait with the slogan “Tested by Time” hangs all over Tiraspol. Local minibuses shuttled along the streets with the region’s red-and-green flags waving above their roofs Sunday.
(AP, Reuters)

TITLE: Protestor in Critical Condition
PUBLISHER: The Associated Press
TEXT: MINSK — Belarussian opposition leader Alexander Kozulin, imprisoned since this spring’s protests, is in critical condition after being on a hunger strike for more than 50 days, his wife said Friday.
In October, Kozulin began refusing solid food to try to draw attention to the authoritarian country’s treatment of its opponents; since then, he has consumed only liquids.
Kozulin was arrested in March after leading a protest march following presidential elections in which he was one of four candidates. The elections, in which Alexander Lukashenko was declared the winner of a third term, were widely criticized in the West as undemocratic.
This summer, Kozulin was sentenced to 5 1/2 years in prison.
His wife, Irina, said she was allowed to speak with him by telephone Friday, the 50th day of his hunger strike.
“The condition of his health is critical; he can barely talk, and I am preparing for the worst,” she said.
The Belarussian opposition’s main figure, Alexander Milinkevich, has called on Kozulin to end the fast.
“Kozulin’s death would be a useless catastrophe. He is [of] significantly more use to Belarus alive,” Milinkevich said.

TITLE: Convictions in Kazakhstani Murder Case Are Upheld
PUBLISHER: The Associated Press
TEXT: ALMATY, Kazakhstan — Kazakhstan’s highest court on Friday upheld the conviction of 10 men of involvement in the killing of an opposition politician, turning down appeals from the victim’s and the defendant’s representatives, who demanded further investigation. 
Relatives have said the February killing of Altynbek Sarsenbayev of the opposition Nagyz Ak Zhol party was politically motivated and accused authorities of shielding the real perpetrators.
Sarsenbayev, his driver and bodyguard were abuducted in the commercial capital, Almaty, and their bodies were later found in the mountains.
A regional court ruled in August that the murder was ordered by Senate administration chief Erzhan Utembayev after Sarsenbayev made a critical remark about him in an interview. The court sentenced Rustam Ibragimov to death, finding him guilty of carrying out the murders. Utembayev, who insists he is innocent, was sentenced to 20 years in prison.
Petr Svoik, a member of the opposition alliance For a Fair Kazakhstan, said Friday that the appeals hearings were rushed and that lawyers were not given a chance to present their arguments.

TITLE: A City Celebration
TEXT: On Dec. 6, 2006, the concert hall of the Palkin Restaurant in St. Petersburg played host to the annual “A Celebratory Present” charity evening. The organizers of the event were The St. Petersburg Times, the Musubi Oriental Martial Arts and Healthcare Center and the Palkin Restaurant. 
This charity event has become a traditional feature of the calendar in the run-up to Christmas and the New Year. In 2003 and 2004, the proceeds went towards the organization of New Year celebrations for the children taking part in the Roditelsky Most charity fund, while the In Search of Harmony Fund received 150,000 rubles in proceeds in 2005. 
The organization receiving the proceeds from the event, as was the case in 2005, was selected in a tender for non-commercial organizations working with children in St. Petersburg. This year, the winner of the tender was the GAOORDI association of social organizations working with handicapped children. 
A lottery held at the event raised 150,000 rubles, with all the tickets being bought within just 40 minutes. This bears witness to the fact that people are prepared to make their own, personal contribution to a common cause — helping those in need. The proceeds from the lottery will be spent on organizing a New Year celebration for children with serious handicaps who are housebound and to buy presents for HIV-infected children that have been abandoned by their parents. 
Over 40 companies, creative associations, designers and artists took part in the preparations for the evening. This year, numerous companies and designers from Moscow also took part. The concert program was presented by the artists of the Traveling Puppets of Monsieur Pezho Theater, Larisa Sazonova — winner of Russian and international jazz competitions — and the NONCADENZA musical group. 
The evening was organized for free, with all the performances, prizes and objects on sale at an auction provided entirely free of charge. 

The prizes in the charity lottery were provided by:
The MITS tour firm, the Mariinsky Theater, the Harvard Business Review, the Wild Orchid chain of stores, the Musubi Oriental Martial Arts and Healthcare Center, the Astoria Hotel, the Vagr-Vina-Vita company, the Ulita Fashion House, the Dyuvernois Legal law firm, the May Beauty Salon, Cosmopolitan, the Simona chain of children’s clothing stores, BEST Clinique, Deloitte, Landrin, Orange Language School, the Traveling Puppets of Monsier Pezho, the University Chemists chain of Finnish chemists, the Palkin Restaurant, the Mukla workshop, the Early Music Festival, the Paktor chain of stores, Nidan, the Karen Project group and singer Larisa Sazonova, the OSB-Music production company, the Novaya Apteka chain of chemists, Esquire, the Fason chain of women’s clothing stores, Filippov Hotel, the Krasny Matros Mitki Publishing House, Ladoga, the Novoe Literaturnoe Obozrenie publishing house, Polyustrovo, Idea Print, the Flowers on the Fontanka salon, Hermitage Magazine, the Bukvoyed chain of book stores, the Chkalov Helicopter Company (Moscow), the Galereika handcrafts store (Moscow), Kstanto and Co. (Moscow), the Angleterre Hotel, Florin, Renaissance Hotel, St. Moritz CafÎ and Trivium Boutique. The designers Anna Tereshenkova, Dina Khaichenko, Yelizaveta Titanyan, Anna Luchinina (Moscow) and Polina Voloshina (Moscow), and the artists Galina Fesenko, Maria Garkavenko and Alina Rappoport and the photographers Anna Rappoport and Yuri Molodkovets all presented their works. 

 We would like to give our sincere thanks to our company-partners for their enormous support in the carrying out of the project. We would also like to express our heartfelt thanks to the performers and artists that made the evening so memorable. We are genuinely happy that this opportunity to create a celebration for those in need inspired such a response from our guests.

TITLE: Small Business Raring To Expose its Enemies
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The fourth Small Business Forum, organized by the governor’s public committee for small business, will be held at the Lenexpo exhibition complex on Thursday and Friday, with obstructions to the sector already singled-out for attack.
Previously the forum, which will combine seminars with an exhibition, was held at the Tavrichesky Palace.
“Unlike previous forums it will not look like Soviet-style meetings of party members with executive personnel,” Roman Pastukhov, president of St. Petersburg Entrepreneurial Union, said in an interview with the St. Petersburg Times on Monday.
“For the first time small companies will be able to show off their achievements and not only talk about their problems,” Pastukhov said.
At the moment small business contributes 25 percent of all tax payments to the city budget, “which is really a significant contribution,” Pastukhov noted.
According to data from the Committee for Economic Development, Industrial Policy and Trade data, St. Petersburg accounts for 12 percent of small companies registered in Russia.
Small companies employ over 700,000 people, which is about one third of the whole of the city’s workforce. The number of small companies in the city is four times higher than the national average. 
The exhibition in Lenexpo will feature small companies from 18 St. Petersburg districts as well as the activities of the public committee for small business.
Each city district was offered 16 square meters for organizing an exhibition free of charge. Organizers suggested that each district present no fewer than four small companies operating in the high-tech industry, housing and other public services, the Lenexpo web site says.
Six round tables will be held during the exhibition. Participants will discuss state support of small business and ways to overcome administrative barriers, how the reform of the housing maintenance system will affect small business, the role of small business in the high-tech industry and industrial production, development of small business in retail, credit schemes and sources of financing, as well as women entrepreneurs.
“To summarize the results of the forum the public committee for small business plans to organize the city government meeting,” RBC cited Sergei Fyodorov, chairman of the public committee, as saying at a press conference Friday.
Special emphasis will be put on small business in industrial production and housing services.
“We will complain about energy companies. The policy carried out by monopolists hampers the development of small business in industrial production and the high-tech industry. Lots of problems emerge in the consumer industry and services as well. Retail chains are stepping on small business,” Fyodorov said to RBC.
Among the most important problems to be discussed at the round tables, Pastukhov listed the interaction of small business with the authorities, the role of small business in housing services and problems in funding.
Pastukhov said he hopes that the final resolution, which will appear after the forum, will be realized in practice.
“All previous resolutions were, for various reasons, ultimately not realized. We need the state to pay more attention to small business,” Pastukhov said.
“We expect a positive outcome from the forum, we expect to see a productive dialogue between business and the authorities,” he said.
Over 1,000 companies and organizations were invited to take part, according to Pastukhov, and not only small companies but also transport and construction companies, banks, educational centers and insurers.
The exhibition will end with a final meeting with the city governor, members of the city government, the public committee for small business, forum participants and guests.

TITLE: Shell Concedes Gazprom Stake
AUTHOR: By Torrey Clark and Fred Pals
PUBLISHER: Bloomberg
TEXT: MOSCOW — Gazprom said Royal Dutch Shell made new proposals for the Russian company to join its $22 billion Sakhalin-2 oil and gas venture, as President Vladimir Putin expands his control of the world’s biggest energy industry. 
Reuters earlier reported that Shell agreed to cede state-run Gazprom a majority stake in Sakhalin-2. Moscow-based Gazprom spokesman Sergei Kupriyanov and Shell Russia Vice President Maxim Shoob declined to confirm or deny the Reuters report, which cited unidentified industry people. 
Putin has used tax and environmental probes to restore the state’s dominance over Russia’s oil and gas industry, the world’s largest. The government’s campaign against Sakhalin-2, the biggest foreign investment in the country, has sparked concern in the U.S., Europe and Asia about Russia’s use of energy as a political lever in world affairs. 
“The days when foreign companies could envisage control over Russian oil and gas projects are over,’’ said Stephen O’Sullivan, head of emerging markets research at Deutsche Bank AG in Moscow. “Having 50 percent minus one share in a project that can expand and develop is better than having control of a project that is going nowhere.’’ 
Gazprom wants to join the project to gain access to Asian markets and to redress its lack of experience in offshore developments and LNG production, O’Sullivan said. 
Shares in Gazprom have risen 63 percent in the past year, making it the world’s second-largest oil and gas company by market value at $275 billion, surpassing BP Plc and Shell. Exxon Mobil Corp. is the world’s biggest investor-owned oil company at $440 billion. 
Government-run Rosneft and Gazprom are increasing output using assets acquired from Yukos Oil Co., which is being liquidated after receiving $30 billion in back tax claims. 
Gazprom, whose CEO Miller served under Putin in the early 1990s when he was a deputy mayor in St. Petersburg, last year bought OAO Sibneft, Russia’s fifth-biggest oil producer, after Yukos’s takeover of Sibneft was unwound because of the tax case. Rosneft became the country’s second-largest oil producer after gaining Yukos’s largest production unit at the end of 2004. 
Shell Chief Executive Officer Jeroen van der Veer had “productive’’ talks in Moscow last week with Gazprom CEO Alexei Miller and Russian Energy Minister Viktor Khristenko, Shoob, vice president of Shell’s Russia unit, said in a phone interview Monday from Moscow. He declined to elaborate. 
“We are analyzing the proposals,’’ Gazprom spokesman Sergei Kupriyanov said Monday in an e-mailed response to questions. “A decision will be made taking into consideration the Sakhalin-2 project’s existing problems, including environmental.’’

TITLE: Polymetal’s  Mongolian Venture
PUBLISHER: Bloomberg
TEXT: ST. PETERSBURG — Polymetal, Russia’s biggest silver producer, agreed to form a venture in Mongolia to mine a deposit with 3,000 metric tons of the metal, as President Vladimir Putin seeks to boost trade with the neighboring state.
Polymetal, based in St. Petersburg, and Mongolia’s state-run Mongolrostsvetmet will form a joint venture this month to develop the Asgat deposit, which was discovered by Soviet geologists 30 years ago, Polymetal Chief Executive Officer Vitaly Nesis said Monday in an e-mailed statement.
The agreement was reached during Mongolian President Nambaryn Enkhbayar’s meeting with Putin in the Kremlin three days ago, Nesis said. Putin, in broadcast remarks, said after the meeting that Russian investment in Mongolia could reach $5 billion over the next few years, 100-fold more than the cumulative figure since the collapse of the Soviet Union.
“We are highly pleased by the fact that we have been selected as a strategic partner for this large intergovernmental project,’’ Nesis said in the statement. Polymetal will finance the venture, he said, without saying how much the company plans to spend.
Polymetal produces three-quarters of Russia’s silver from four mines in the country’s Far East and Northern Urals provinces. It produced 8.5 million ounces of the metal in the first half of the year.

TITLE: Sistema Denies Acquiring Stake 
In Russian Operator Svyazinvest
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian billionaire Vladimir Yevtushenkov’s AFK Sistema holding denied it completed a transaction leading to the purchase of a stake in national fixed-line phone operator Svyazinvest.
“There is no purchase,’’ Sistema spokeswoman Irina Potekhina said in a phone interview from Moscow on Monday, when asked about a Reuters newswire report. “I was very surprised by the report, I do not confirm’’ this, she said adding that the company remains interested in the asset.
The board of Sistema’s telecommunications company Comstar United Telesystems approved the acquisition of 25 percent plus one share stake in Svyazinvest from billionaires Leonard Blavatnik and Viktor Vekselberg over the weekend, Reuters reported Monday citing unidentified banking sources. The stake is worth $1.3 billion, the news agency said.
Comstar’s head of investor relations, Maria Yeliseyeva, could neither confirm nor deny the deal.

TITLE: In Brief
TEXT: Western Competition
n ST. PETERSBURG (SPT) — Four international consortiums will compete for the contract for a western high-speed link-road, Interfax reported Friday.  Potential investors can file applications until Jan. 29, 2007.
The Ministry for Economic Development and Trade presented the project in London on Monday.

Suntez-Sui Soccer
n ST. PETERSBURG (SPT) — Suntez-Sui will construct the new 62,000-seater football stadium on Krestovsky island. On Friday the company won the 6.6 billion ruble ($240 million) contract for projection and construction works, Interfax reported Friday. 
Construction is due to be completed by December 2008. 

Insured Expansion  
n ST. PETERSBURG (SPT) — The insurance company Pervaya Strakhovaya Kompania, a part of BIN group, will open 24 new representative offices by the end of 2006, Interfax reported Friday. At the moment the company operates only two offices.

Phone Back
n ST. PETERSBURG (SPT) — Northwest Telecom received back tax claims for 2003-2004 amounting to 583.6 million rubles, Interfax reported Monday.
The Federal Tax Service made the claims after completing its investigation of company activities, from Aug. 2 till Nov. 9 this year. Northwest Telecom denied any wrongdoing, Interfax reported.

Petrol Dollars
n ST. PETERSBURG (SPT) — Lukoil will pay three billion rubles in taxes to the city budget next year, Interfax reported Monday.
According to an agreement signed by Lukoil and City Hall on Apr. 22, 2004, Lukoil is obliged to invest $100 billion into its retail chain in St. Petersburg while City Hall will provide 60 land plots for Lukoil filling stations.

TITLE: Russia, Mongolia Sign $1Bln Trade Accord
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — President Vladimir Putin and his Mongolian counterpart Nambaryn Enkhbayar agreed on Friday to boost bilateral trade to $1 billion and look at scrapping visas between the two countries.
Speaking to reporters after two hours of talks in the Kremlin, Putin said, “Russian companies are ready to make a significant investment in the Mongolian economy,” adding that investment could reach $5 billion over the next few years. 
Russia invested just $45 million in Mongolia from 1991 to 2005.
Putin also said Russia wanted to revive the use of the Russian language in Mongolia. “We believe that would substantially expand opportunities for Mongolian society,” Putin said. 
Enkhbayar called for bilateral ties to be restored to the level of those enjoyed during Soviet times. Speaking in Russian, Enkhbayar — a former student in Moscow — said he was eager to see Mongolian students coming to study in Russia’s “prestigious” universities. 
Sitting in the front rows of the audience were a group of Mongolian and Russian state officials, including Transportation Minister Igor Levitin, Agriculture Minister Alexei Gordeyev and General Yury Baluyevsky, head of the General Staff. 
Rustam Sabirov, a Mongolia expert at Moscow State University’s Institute of Asian and African Studies, said it was time to revive ties with Ulan-Bator as China, Japan and the United States were actively establishing their positions in minerals-rich Mongolia.
“Foreign businesses and politics are actively pushing Russia out” of Mongolia, Sabirov said. A U.S. ally, Mongolia has sent troops to Iraq, while China is investing heavily in the country.
Russian businesspeople recently accompanied Prime Minister Mikhail Fradkov on a trip to Mongolia and found that re-establishing ties would not be easy, Sabirov said.
At the Kremlin briefing, Putin and Enkhbayar signed a declaration calling for bilateral trade to increase to $1 billion by 2010. 
That trade was worth $466 million last year, 21 percent more than in 2004, according to a Kremlin statement.
Last year, exports to Mongolia totaled $443.5 million, while imports from Mongolia were a mere $22.4 million.
Mongolia believes high Russian rail tariffs, “unjustified delays” and other bureaucratic hurdles are hurting its exports, the Kremlin statement said. 
The leaders agreed to boost cooperation in a range of sectors, including energy, transportation, IT, machine-building and processing industries, agriculture, banking and tourism. Under the agreement, Russian companies will have a chance to participate in the so-called Millennium Road project, which aims to link all areas of Mongolia.
The Kremlin said a range of companies, including Basic Element, Norilsk Nickel, Unified Energy Systems, Renova and Severstal Group, were ready to invest in the country. 
Enkhbayar welcomed Russia’s willingness to invest more but said the money should also go into infrastructure and social projects.
During his six-day trip to Russia, Enkhbayar also visited the Buddhist republics of Buryatia and Kalmykia and the city of Novosibirsk.

TITLE: Ministry Resorts To Infighting
PUBLISHER: Reuters
TEXT: MOSCOW — The Natural Resources Ministry, which has led criticism of foreign oil firms such as Shell, dissolved into infighting between officials Friday, with the oil giant’s top critic shut out of a meeting and calling for his own boss to be sacked. 
Oleg Mitvol, the outspoken deputy head of the ministry’s environmental inspectorate, was barred from a meeting about withdrawing firms’ licenses at the Federal Subsoil Resource Use Agency. Mitvol’s office said in a statement that he was not allowed to attend the meeting despite having been recently appointed to the commission on licensing compliance.
In a separate development, Mitvol’s boss, the head of the ministry’s environmental inspectorate Sergei Sai, came under fire from his own boss, Natural Resources Minister Yury Trutnev. “I will ask the government for a disciplinary punishment of the head of Federal Service for the Inspection of Natural Resources Use, Sergei Sai,” he told a joint meeting of his ministry with top prosecutors. He said Sai should more regularly check oil firms for noncompliance. 
Mitvol himself told Ekho Moskvy radio that Sai should be sacked, along with other “delinquent officials.”

TITLE: Trutnev, Tyomkin Hit Out At Oil Producers’ Excess and Delay
PUBLISHER: Combined Reports
TEXT: More than 10 percent of Russia’s oil output, nearly 1 million barrels per day, is being produced illegally, Natural Resources Minister Yury Trutnev said Friday.
Trutnev made the statement during an official meeting intended to work out measures to tighten official controls over the extraction of mineral riches.
“More than 10 percent of the oil produced in Russia is extracted in excess of the numbers agreed in project documents,” Trutnev said in a meeting between his ministry and the Prosecutor General’s Office, which has also promised a tough line on licenses.
“As a result of the lowered vigilance on rational field exploitation, the oil recovery factor in Russia has fallen from 0.45 to 0.30 in the last 20 years,” Trutnev said in a transcript of his speech released by the ministry.
Trutnev said the government had issued over 12,000 mining licenses and added that official controls over their use had been too lax.
“The system of control over license agreements has practically been nonexistent,” Trutnev said in remarks posted on his ministry’s web site.
Trutnev’s ministry took another swipe at the oil sector later in the day, when his deputy Anatoly Tyomkin warned that delays in developing new oil fields in eastern Siberia were jeopardizing the government’s plans for an $11.5 billion oil pipeline leading to the Pacific coast.
Tyomkin said oil producers, such as state-controlled Rosneft and Gazprom, and TNK-BP, were seriously behind the schedules outlined in their licenses to develop new fields in eastern Siberia.
“This, in turn, poses a threat to guaranteeing the necessary volumes of oil for the capacity of the East Siberian-Pacific Ocean Pipeline,” Tyomkin said.
	(AP, Reuters)

TITLE: Pernod’s Spirit of Acquisition
PUBLISHER: Bloomberg
TEXT: PARIS — Pernod Ricard may acquire the Stolichnaya vodka brand as soon as “a few weeks” from now, the head of its U.S. division said.
Paris-based Pernod, the world’s No. 2 liquor producer, acquired distribution rights through 2010 for Stolichnaya, owned by Russia’s SPI Group, when it purchased rival Allied Domecq for $13 billion last year.
Managing director Pierre Pringuet has called the acquisition of Stolichnaya a company priority, and started talks with SPI about the brand’s future in May.
“We are relatively confident we will be able to acquire the ownership of Stolichnaya,” Alain Barbet, president of Pernod Ricard USA, said Friday. “It will probably take a few weeks or months.”
Pernod wants to gain a foothold in the U.S. vodka market, which is expected to grow by one-third over the next four years, to about $16.7 billion in 2010, according to Euromonitor, a market-research company.
Stolichnaya is the third-most-popular vodka in the United States after Diageo’s Smirnoff and Sweden’s Absolut, controlled by state-owned V&S Vin & Sprit. Pernod’s Pringuet has said his company will also bid for Absolut, which might come up for sale next year as Sweden’s new government plans asset sales.
Pernod is facing a lawsuit brought by Russian billionaire Rustam Tariko, owner of Russky Standart, who claims Stolichnaya is not a Russian vodka because it is filtered, bottled and labeled in a Latvian plant after being distilled in Russia. 
Pernod called Tariko’s assertions an “advertising strategy” aimed at boosting U.S. sales of Imperia, his own brand.

TITLE: Troika Is Considering Strategic Alliances, IPO
AUTHOR: By Douglas Busvine
PUBLISHER: Reuters
TEXT: MOSCOW — Shareholders of Troika Dialog have no immediate plans to sell the brokerage but are considering strategic alliances and a possible stock market listing, company president Ruben Vardanyan said.
Vardanyan was responding to a report Thursday, sourced to investment bankers, that Swiss bank Credit Suisse, in addition to J.P. Morgan Chase, was in talks to acquire an equity interest in Troika, a leading player in equity sales and trading and asset management in the country.
“Shareholders in Troika Dialog do not face the task of selling the company,” Vardanyan said in a statement. “The past year was the most successful in the history of the company.”
The banking sources said Credit Suisse appeared to have a better chance of closing a deal to buy a 50 percent stake in Troika, with a possible option for more. 
Another source said Friday that the deal had already been approved internally at Troika.
They also said a buyer might get an interest only in Troika’s brokerage and investment banking operations but not in its fund management side, which has $3 billion under management, or the private equity business.
The sources said J.P. Morgan wanted control over Troika and that a $600 million bid from state-owned Vneshtorgbank, or VTB, was rejected as too low.
A source at VTB denied that any formal offer had been made but did not rule out the acquisition of an investment banking franchise in the country.
VTB, the country’s second-largest bank, is preparing for an initial public offering next year that officials say could raise $4 billion and boost its standing as an international player. But the bank lacks a serious investment banking arm to round out its profile.
Another banker linked VTB to Renaissance Capital, a leading independent player, although a source at RenCap said the bank had the strength to stand on its own. “Renaissance will stay independent for a long time,” the source said. 
One source told Renaissance that owners were asking for $3 billion. 
The rush by foreign banks to get into the country comes amid a runaway boom in deals on both equity and debt capital markets.
Dresdner Kleinwort forecasts that initial public offerings by Russian companies will raise around $22 billion this year, up from $6.5 billion in 2005, with more to come next year. 
Bankers say local players including Troika, Aton and Renaissance risk getting squeezed out by foreign entrants and may have to follow the lead set by United Financial Group, which was taken over one year ago by Deutsche Bank. 
Vardanyan said Troika was analyzing its strategic options, including widening its partnership with Singapore’s state investment company Temasek Holdings.

TITLE: Investors Spot Unsatisfied Demand for Quality Sites
AUTHOR: By Anastasia Simakina and Alexander Yankevich
PUBLISHER: Special to The St. Petersburg Times
TEXT: This year has seen strong growth in demand for internet advertising on St. Petersburg’s media market. This was mainly the result of new laws limiting TV advertising and making it more expensive, the appearance of new clients, including those previously not interested in this type of promotion, with the largest brands already considering the internet as a worthwhile way of promoting goods and services. 
According to the experts, the volume spent and generated by city companies on internet advertising doubled compared to last year and will amount to a record $3 million.
A specific problem is the sharp deficit of advertising space to be found on what are a limited number of local resources. Internet agencies are resolving this problem through the creation of thematic internet domains and portals.
By the end of the year, total internet merchandising in the city (including media/banner, contextual advertising, associated services promotion and PR) will have orders totaling $5 million, of which $3 million will be spent on banner advertising (last year St. Petersburg companies spent around $1.6 -$1.8 million on this segment.) 
Not all this money stays in the city — local web sites get around 25 to 35 percent of this sum, the rest advertisers spend on federal resources. 
Overall this amounts to a decrease in the city’s share of the Russian market – the Northern capital has only three percent of the federal advertising market, although in terms of the overall number of Russian internet users, the consumers of advertising, the city audience makes up only five percent.
All the same, extensive market growth is clearly visible. The main players in the market of internet advertising and services are generally those coming from up and coming businesses.
Historically, advertisements on the internet are used by car dealers and real estate companies, who were both the engines for growth in this segment.
Having said that, several forecasts show that high activity in the real estate market over the last few months means that related companies have reduced their share of internet advertising, depriving the market of $400,000 — which could have made the market as a whole worth more than $3 million.
As the general director of Traffic, Alexei Kupriyanov, points out for the first time this year retail chainstores were highly active in the internet advertising market — from computer and home stores to sport shops), telecom companies, internet providers and companies in the production of goods for public consumption. 
Nevertheless, the St. Petersburg media market generally falls significantly behind that of Moscow. For example, one of the most active segments in the Moscow market, banking (15 percent of all advertising) is currently of little importance in the Northen Capital — this is particularly related to the fact that most large retail banks are based in Moscow.
Significant growth is also to be found in the contextual advertising segment. The leaders here are Yandex and Begun, though advertising services are also sold directly through small companies, such as Voleks, Rambler and Mail.ru.
Last year for popular requests the number of adverts totaled 50 to 60 for every search.
Yandex recently reduced the price of one ‘click’ from $0.05 to $0.0, which could attract the attention of growing companies with advertising budgets of $50 to $100 to this type of advert,
In St. Petersburg, leaders in the media segment are companies like Traffic (founded in 2002), Molinos (founded in 1999) and RealWeb (founded in 1998). Market share is distributed in the following way – up to 60 percent is controlled by Traffic (which works with more than 30 advertising and web agencies in both capitals), 20 percent of adverts are sold directly and the rest is divided between Molinos and Real Web. Other players – Peterlink.Web, Yumi Studio and others, occupy themselves with one-off campaigns or prefer to concentrate on a few large clients.
Most players link market growth with an increase in the overall numbers of internet users. 
According to Andrei Ryabik, the general director of WebMaster.SPb: 
“It is a fact that over the last year the market for internet advertising grew significantly. The main reason for such growth is the increase in the number of internet users — in St. Petersburg by up to 15 to 20 percent of the city’s population. Research has shown that when the number of users rises above 15 percent, that is when dynamic growth in internet trade and advertising begins.”
One of the factors, which will delay the extensive development of internet advertising in the future is a deficit of advertising space, which is firstly related to the lack of quality internet portals — business, informational, sport — receiving a large numbers of hits.
The St. Petersburg audience is particular in that it shows no preference for any specific type of resource, because there aren’t sites that can completely satisfy their informational needs.
“The deficit of advertising space is firstly linked to the lack of quality advertising space — there are about ten of them, with the number of potential advertisers numbering 6,000 to 7,000,” said Ryabik. For example, last year the sharp deficit of advertising space hit car dealers.
Many internet studios deal with this deficit of quality web sites by creating and developing their own themed portals and online mass media, which form another market tendency.
In this way, at the beginning of the year Media Cartel was formed, which positioned itself as the first investor in the sphere of information internet projects. Their founders were city internet agency Traffic and Web Master, as well as the group of companies known as Russian Metal, which provides financial services for the organization.
At the end of September Traffic announced the beginning of its project T-publishing, the essence of which is the buying up and long-term development and also support of information internet resources. It was created on the basis of a separate internet agency that before was responsible for the publishing side of the company. Also T-publishing from now on will occupy the place of Traffic in Media Cartel. 
A separate structure became necessary for a more dynamic development of its goals — as part of the agency its work related to information projects became less of a priority than commercial orders. 
It is worth noting that T-publishing also provides consulting services for traditional mass media for the development of their internet business. They also provide consulting services for investors about how much money to put into the internet business and for the realization of interesting ideas linked with the internet. 
As a part of the segment Runet, the company Traffic has already been present as publisher for four years. Its first project in this field was the site Kinoafisha.spb.ru, which was launched in August 2002. Other projects include Gorodovoy.spb.ru, AdLife.spb.ru, kinoafisha.msk.ru, MskPogoda.ru and SpbPogoda.ru. 
Other internet studios are also working in this field. RealWeb recently released a portal ‘About insurance.’ Another new project, Centerestate.ru, belongs to the agency QVAD, created on the basis of two well-known structures – the information agency Rosbalt and internet cafÎ Quo vadis? 
The city internet agency Spbnews is actively developing the portal ‘Saint-Petersburg.ru,  and in the summer the agency released the petrol-themed site Au98.ru.
Peterlink Web recently finished its work on the project 47.news for the popular portal ‘fontanka.ru.’ 
A share of popular city resources are owned by Media Cartel — novostroika.ru, city.spb.ru, AllCredits.ru. T-Publishing  is currently working on two projects on the basis of information models with original content and internet-service models.
According to the main market players, it could take anything between six months and several years for the deficit of advertising space to be alleviated.
“The development of new projects does not resolve the deficit of advertising space. A good start-up, which might guarantee daily growth in visitors of up to 2,000 users, in the course of the first year might make $25,000 to $30,000 on advertising. But this is just one percent of the city’s advertising markets. The volume of investment in the development of business projects amounts to $150,000 — this money is returned in around two years. Apart from this, small losses from unsuccessful projects do not stop low quality sites being created. The market could remain in this undefined state for several years,” said Alexei Kupriyanov.
“The tendency for the development of one’s own portals is linked to the fact that the last few years have seen the launch of several successful local and federal information projects. Their success attracted other players. However, according to our statistics, in the near future the service model will be more effective than the advertising one. 
Our company is working on this. The tendency towards a deficit will continue for the next six to twelve months. Also, in the near future it is likely that local sites will become federal, or at least will work in both capitals – Moscow and St. Petersburg,” said Andrei Ryabik.
According to Yury Stepanov, general director of Peterlink.web, “the deficit of advertising space is for the most part noticeable on popular internet sites, and in general there is still a choice —  everything depends on the sales strategy used by the advertising agency. So I consider it reasonable that internet studios have taken to creating their own sites and portals. Our companies, however,  still have no such plans.”

TITLE: Crisis in China Could Devastate the U.S.
AUTHOR: By Alexei Bayer
TEXT: China’s rapid economic development is the most amazing story of the past decade — just as the collapse of the Soviet Union and Russia’s slide into irrelevance was the main historical event of the previous 10 years.
Until the mid-1980s, Russia and China vied for the supremacy of their respective brands of communism. Then, in the early 1990s, the focus of the rivalry shifted to the best model for transition to the free market. 
After the Russian default in 1998, it became accepted wisdom that the Soviet Union should have delayed democratization, reforming its economy along Chinese lines first. The rollback of democracy and reassertion of the role of the state under President Vladimir Putin can be seen in this light as a shift toward the Chinese model.
As recently as at the turn of the century, Russia still seemed to be in the running. Even now, Chinese gross domestic product remains low on a per capita basis, and many Russians retain a sense of superiority toward everything Chinese, from goods to people. But the race for economic supremacy is over. After 25 years of annual growth averaging nearly 10 percent, China’s economy on a purchasing-power-parity basis is approaching $10 trillion, gaining inexorably on that of the United States. Its annual exports have increased sixfold in the past decade alone and measure close to $1 trillion. 
China is not just an enormous producer of manufactured goods. In accordance with the Marxist law of transformation of quantity into quality, its global weight has increased substantially. It is now a linchpin of the East Asian manufacturing network. With its trade surplus breaking records, and its stock of direct foreign investment approaching half a trillion dollars and central bank reserves hitting $1 trillion, China is also a pivotal player in the global financial system.
Writing recently in The Economist from a Chita region penal colony, former Yukos CEO Mikhail Khodorkovsky envisioned the creation of a new bipolar world in which some nations would gravitate toward the West and be anchored by Washington, and others would form a loose new nonaligned movement centered on Beijing.
But bipolarity implies some form of division. Today, China has become fully integrated into the global economy, becoming indispensable for the functioning of the U.S. economy as well. In two decades, imports from China grew to 25 percent of the U.S. total, from 2 percent. Chinese exports to the United States make up almost 5 percent of the global exports of goods, services and commodities measured by value. Given the significant bilateral trade imbalance, China’s willingness to hold U.S. Treasury bonds to a large extent finances the ongoing economic expansion in the United States, props up the dollar and helps keep Treasury bond yields — and U.S. mortgage rates — at low levels.
Although it has gone largely unnoticed, the global political and economic order has undergone a seismic change over the past five years. Two recent articles illustrate this. The first is a commentary on www.antiwar.com, a U.S. web site that, although conservative, is deeply critical of Washington’s involvement in Iraq. The author mockingly suggests that creating chaos in Iraq has been the U.S. strategy all along. Now Washington can plausibly threaten to bring the murderous Iraqi mess to Iran, Syria, North Korea and other rogue states.
James Traub wrote the second for The New York Times Magazine. It describes China’s growing investment and economic presence in Africa.
A decade ago, even a tongue-in-cheek reference to the United States trying to destabilize a region — especially one as crucial to the global economy as the Middle East — would have been unthinkable. After World War II, Washington was a staunch guardian of the international status quo. Its Cold War policy of containment consisted of trying to keep the Soviet Union from expanding its sphere of influence. Attempts to roll back communist conquests were limited to its own backyard, in places such as Cuba, Chile, Grenada and Nicaragua, whereas pleas for assistance from Berlin, Budapest, Prague and Gdansk invariably fell on deaf ears.
There is considerable irony that no sooner had the policy of containment gained the upper hand in the Cold War than the United States adopted the failed Soviet strategy of trying to export its system at gunpoint. Beyond chaos, the result in Iraq has been remarkably similar to what the Soviets wrought in the Baltic states and Central Europe — namely, death, destruction, emigration and poverty. 
The sad truth is that aside from the freedom spearheaded by its Marines, Bradley fighting vehicles and Abu Ghraib torturers, the United States finds it has little to export. Instead, it is China that is building a global commercial empire. What it is doing in Africa — as well as in Asia and Latin America — is ensuring a steady supply of oil, industrial commodities and foodstuffs, while solidifying future markets for its manufactured products.
Communist China, which propped up Pyongyang in the Korean War, supported guerrillas in Indochina and armed various insurgency groups elsewhere, is now keenly interested in international political and economic stability. Chinese leaders have been careful not to rock the boat. Despite vociferous criticism of the “unipolar,” U.S.-dominated world, Beijing has been careful not to rock the international economic and financial system. It has been content to accept U.S. dollars for its exports and to lend them back to Americans, financing U.S. demand for its goods.
Chinese leaders have been even more obsessive about stability at home. So far, China has avoided the kind of financial crises and political upheavals that have repeatedly blindsided smaller exporting nations around the Pacific Rim over the past two decades. The Beijing government has used carrots and sticks to keep its vast and rapidly changing society quiescent. 
Past success, however, does not mean that China will be able to keep the lid on this cauldron forever. Economic growth has unleashed tremendous energy and creativity in the Chinese population. But it has also created severe pressures — social, political, economic and demographic. Hundreds of millions of peasants have abandoned their centuries-old way of life and migrated to urban centers. The gap between the rich and the poor has widened. The Communist Party retains a monopoly on political power, while its apparatchiks and their families are notoriously corrupt. Sizeable industrial investment, which continues despite government efforts to slow it down, is creating excess capacity. These pressures — or other problems that cannot be currently predicted — could plunge China into a crisis that could be quite severe.
During the Cold War, the Soviet Union could annihilate the United States with its nuclear weapons — and face instant annihilation in return — but it could not make a serious impact on its economy. China has emerged as probably the only nation in the world that can single-handedly undermine the U.S. economy. If China suffers an economic or political crisis, the United States will likely be plunged into a severe recession — if not an outright depression.
This scenario is ominously similar to that of the Great Depression of the 1930s, which was largely a U.S. crisis taking place after a decade of breakneck economic growth. The stock market crash occurred on Wall Street, but its shockwaves promptly spread around the world. Ultimately, the Depression marked the demise of British economic dominance and the end of the pound as a global currency. While the next global economic crisis is likely to originate in China, it will almost certainly mark the end of the dollar as the linchpin of the global financial system and a substantial diminution of the central role of the United States.

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

TITLE: Suffering From Oil’s Curse a Matter of Choice
AUTHOR: By Anders Aslund
TEXT: In 1999, the McKinsey Global Institute published a report titled “Unlocking Economic Growth in Russia.” Startlingly, the report suggested that the economy could grow by 8 percent per year for the foreseeable future without any changes to current economic policy. The report identified three factors underlying the growth projections. First of all, Russia had achieved a critical mass of market-based activity, private enterprise and financial stabilization. Second, physical and human capital were both abundant. Finally, moderated investment rates would be sufficient for high growth. 
The institute was concerned, however, that too much production took place at obsolete plants, which it said had to be closed so that activity could be concentrated in the most modern factories. This report appeared long before anybody even imagined the current oil boom.
From this perspective, Russia’s real average economic growth of 6.8 percent per year since 1999 does not look as impressive. Russia has also underperformed in relation to the other former Soviet republics, which have grown by an (unweighted) average of nearly 9 percent per year over the last three years. The stars have been the Baltic states, Armenia, Azerbaijan and Kazakhstan. All of these, with the exception of Azerbaijan, have undertaken more extensive structural reforms than Russia.
Many things have worked out well in the Russian economy since the financial crash of August 1998. In hindsight, the crash looks like the catharsis Russia needed to become a full-fledged market economy. It broke the protracted resistance from old-style managers and the Communists against reforms. It showed that only a full-fledged market economy made sense.
Ever since, Russia’s macroeconomic performance has been stellar. Budget and current account surpluses have skyrocketed with world oil prices. The oligarchs have rationalized and revived old Soviet industries. For instance, they have concentrated steel production in the most efficient plants, just as the McKinsey report advised. Capital investment has grown at a reasonable clip of about 10 percent per year. Significant structural reforms were undertaken from 2000 to 2002, notably tax reforms and the adoption of the Civil Code.
The current economic growth erupted in 1999, before President Vladimir Putin came to power, and originated in the reforms carried out under President Boris Yeltsin in the 1990s. By 1999, they had reached a critical mass. Putin is not the creator but the beneficiary of the economic growth. The driver of the economic growth has been the private sector, but Putin is endangering that growth through his renationalization campaign. According to the European Bank for Reconstruction and Development, the private sector generated 70 percent of gross domestic product in 2004 but only 65 percent in 2005. And renationalization continues.
Russia’s oil surplus is so huge that it can hide many flaws in economic policy. Most striking, GDP in current dollars has increased almost five-fold over the past seven years, to some $960 billion this year from barely $200 billion in 1999. Russia is now the 10th-largest economy in the world, measured by GDP in current dollars, ranking just behind Spain. Barring a major disaster, Russia will become the world’s fifth-biggest economy within the next two decades.
At present, the oil surplus is driving economic growth, which is being generated mainly by the consumer sector, retail trade and housing construction, while industrial output has increased by just 4 percent per year over the last two years. That these are the conditions underlying growth does not bode well.
Ironically, Russia’s least dynamic sector is energy production. In 2003, oil production skyrocketed by 11 percent, thanks largely to private ownership and investment. But the confiscation of assets from Yukos led to the renationalization and disorganization of almost half the oil industry. The new state owners are less effective as managers and direct more of their efforts to purchasing further assets than developing those they already control. The remaining private oil companies are rightly afraid of investing or boosting production too much. As a consequence, oil production may rise by only 2 percent this year and stagnate in the future.
Some people do not handle luck well and end up succumbing to hubris, as is the case with Russia’s current leaders. By and large structural reforms ended in 2003, even if continued restructuring of some enterprises is driving some isolated reform, as is the case in the electricity sector. Despite declining official enthusiasm, Russia is approaching WTO accession. Yet, beside what has been responsible macroeconomic policy, the overarching actual economic policy today is that of renationalization.
The evident cause of this economic policy is the oil bonanza. Former Prime Minister Yegor Gaidar and the economists Clifford Gaddy and Barry Ickes have all discussed Russian economic policy as a product of the oil curse. They compare current policy to that of Soviet times. The oil riches of the 1970s led to the Brezhnev petrification, and even contributed to the foolhardy war in Afghanistan, while economic growth was closely correlated with international oil prices. Economics was ignored to the point that investment in the vital oil and gas sector was badly neglected in just the same way that it is today. When the oil prices finally fell in the 1980s, the Soviet economy collapsed.
The situation is much better today. The leadership has learned the importance of macroeconomic stability and is focused on growth. Fortunately, private enterprise dominates, but wherever the public sector prevails problems amass — in gas and oil production, banking, the aircraft and automotive industries and a large part of public transportation, health care, education and law enforcement. The longer oil prices remain high, the worse economic policy will become. The medium-term economic cost might not be high, but the long-term cost will be. Booms breed complacency and corruption.
Oil does not have to be such a curse. Kazakhstan’s economy is even more dominated by oil but, unlike Russia, Kazakhstan steadily increases its oil production by developing new fields. It does so successfully because a multitude of foreign and private oil companies operate there. Kazakhstan is ahead of Russia in banking, labor market, pension and government reform, as well as scholarships abroad. And its growth rate has been at almost 10 percent per year for the last seven years.

Anders Aslund is a senior fellow at the Peterson Institute for International Economics.

TITLE: Fed and OPEC Could Relieve Market Jitters
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: Russian markets breathed a sigh of relief at the end of last week after key economic data indicated that the U.S. economy would avoid a downturn, for now.
On Friday, the U.S. payroll report announced the creation of 130,000 new jobs in the first three quarters of 2006, realizing analysts’ best-case scenario. Payroll numbers lower than 100,000 would have confirmed suspicions of a U.S. slowdown, whereas more than 130,000 new jobs would have encouraged the U.S. Federal Reserve to hike interest rates at a policy board meeting scheduled for Tuesday. 
Either scenario could have led to a slump in the Russian market, and this week investors face two more hurdles.
A gloomy analysis from the Fed or a weak commitment from the Organization of the Petroleum Exporting Countries on Thursday to cutting oil supplies could herald the market correction analysts have been expecting. 
“Our clients were getting worried that the market was overbought and were waiting for some near-term correction. They are waiting for some signal to take a pause,” said Alfa Bank strategist Erik DePoy. 
The U.S. indicators gave no such sign, but investors remained jittery after a 14-day growth streak, as both the Fed board and the OPEC meeting have the potential to spark a sell-off. 
By Friday’s close, crude oil prices in New York had risen to $63.46 per barrel in response to colder weather and the implementation of supply cuts that the OPEC announced in October. As long as crude prices remain above $60 per barrel, the OPEC is unlikely to curb production any further until spring, when the price of oil traditionally drops. 
Russian analysts said they hoped that OPEC producers would make a strong commitment to cutting output if prices sank below $60 per barrel. Russia counts on high oil prices to buttress its economy.
Analysts said they expected no change in interest rates from the Fed meeting, but were looking for signs in the accompanying policy statement.
To prevent a downturn, investors are looking for U.S. interest rates to fall by 0.75 percentage points in the next six months. Last Tuesday, Fed chairman Ben Bernanke said he intended no such cuts, but U.S. markets ticked upward regardless. 
However, if Tuesday’s policy statement promises to keep rates static or even increase them, as Bernanke suggested last Tuesday, it is unclear whether the market will be bullish enough to ignore him again, analysts said.
The Central Bank raised interest rates 0.25 percentage points Friday, the fourth hike this year. The Bank gave no reason, but analysts view the policy as a means to control inflation. 
Wimm-Bill-Dann (WBDF) on Friday released an impressive third-quarter report, with net income doubling year on year on the back of higher food prices and the ruble’s strength against the dollar-euro basket. Retailers buy dollar-priced goods abroad and sell them at home for stronger rubles.

TITLE: In Brief
TEXT: Arming Venezuela
n CARACAS (Bloomberg) — Venezuela, the world’s fifth-largest oil exporter, received the first two of an expected 24 Russian Sukhoi Su-30 fighter aircraft as the South American country builds up it military arsenal.
Venezuela also has received 100,000 Kalashnikov AK-103 rifles from Russia after the U.S. suspended all military sales earlier this year, President Hugo Chavez said Monday.
“These fighter jets represent our sovereignty and dignity,’’ Chavez said during a televised speech at a military parade in Aragua state.
Chavez, who won re-election to a six-year term on Dec. 3, said the purchase of the Russian fighters was “a victory against the embargo of the U.S. empire.’’

Turkish Glass
n ISTANBUL (Bloomberg) — Anadolu Cam Sanayii AS, a unit of Turkey’s biggest glassmaker, plans to open two packaging plants in Russia as it seeks to expand its business overseas. The plants will be located in Russia’s Krasnodar region,
Istanbul-based Anadolu Cam said in a filing with the Istanbul Stock Exchange Monday. A preliminary agreement with local authorities has been signed, the company said.

Supplying Japan
n TOKYO (Bloomberg) — Tokyo Gas, Japan’s largest distributor of the fuel, said it signed an agreement with Australia’s North West Shelf venture to buy 530,000 metric tons a year of liquefied natural gas for eight years.
The new, eight-year contract will start in April 2009, the Tokyo-based gas utility said Monday in a statement. The volume of LNG signed under the new agreement is 33 percent less than the 790,000 tons supplied annually under an existing accord.
Tokyo Gas’ existing contract with North West Shelf expires in March 2009.

Evraz Closure
n MOSCOW (Bloomberg) — Evraz Group SA is closing Stal NK, a subsidiary of its Novokuznetsk Iron and Steel Plant, resulting in a loss of 2,500 jobs, Vedomosti reported Monday.
The plant used outdated open-hearth furnace technology and the closure could half the complex’s harmful emissions, the Moscow-based newspaper said, citing an unidentified Evraz representative.
Evraz may end up paying $16.6 million in severance payments, Vedomosti reported, adding it may also pay for former staff to be retrained. About 1,000 workers are already employed at other company facilities, the newspaper reported.

Roman Investigation
n LONDON (Bloomberg) — Roman Abramovich is to have his links with the Kremlin investigated by U.S. authorities as part of a national security review of a $2.3 billion bid for Oregon Steel Mills Inc., the Financial Times said Monday, citing U.S. officials.
The U.S. government will scrutinize the proposed takeover by a company controlled by the Russian billionaire if Abramovich is found to be acting with the backing of the Russian government, the FT reported.
Evraz Group SA last month agreed to buy Oregon in what would be the biggest-ever purchase in the U.S. by a Russian company.

Station to Station
n MOSCOW (Bloomberg) — Lukoil, Russia’s largest oil producer, may buy filling stations in Eastern Europe from shareholder ConocoPhillips, Interfax said Monday, citing Deputy Chief Executive Officer Leonid Fedun.
With ConocoPhillip’s fuel stations, Lukoil would gain access to the Belgian, Czech and Slovak markets and expand in Poland, Hungary and Finland, Interfax cited Fedun as saying. 
The company will be able to increase sales of oil products by 19 percent next year, the newswire said.

Gazprom in Iran 
n MOSCOW (Bloomberg) — Gazprom, the world’s largest natural gas company, said it isn’t in talks with Iran about forming a joint venture, denying a statement by Russia’s deputy energy minister.
“Gazprom isn’t working on the creation of a joint venture with the Iranians,’’ Gazprom said in an e-mailed response to questions Monday. Deputy Energy Minister Ivan Materov said in Tehran on Monday that Iran and Gazprom may form a venture to develop Iran’s giant South Pars field in the Persian Gulf and other fields in countries including Venezuela.

Domodedovo Loan
n MOSCOW — (Bloomberg) — Domodedovo International Airport, Russia’s busiest, may borrow between $50 million and $100 million next year to finance expansion to meet increases in foreign and domestic traffic.
Closely held East Line Group, which operates Domodedovo airport in Moscow and has already invested $500 million in its reconstruction and development, will spend $200 million this year using its own resources, airport Chief Executive Officer Sergei Rudakov told reporters in Moscow Monday. East Line has yet to identify what form of borrowing it will choose, he said.

TITLE: A Distorted Self Image
AUTHOR: By Robert Kagan
TEXT: It is astonishing how little Americans understand their own nation. Recently, Richard Haas, president of the Council on Foreign Relations and a man long on intellect and government experience, opined that the Iraq war had generated so much controversy because it was such an aberration: “The emphasis on promotion of democracy, the emphasis on regime change, the war of choice in Iraq — all of these are departures from the traditional approach.”
Many Europeans would certainly like to believe that Iraq was the product of aberrant “neo-conservative” ideas about foreign policy and that a traditional United States lies just around the corner.
Many Americans would like to believe this, too. Americans prefer to see themselves as a peace-loving, introspective lot; a nation born in innocence and historically never choosing war but compelled to war by others. This self-image is at odds with reality, however. The United States has gone to war frequently in its history, rarely out of genuine necessity. Since the end of the Cold War, the United States has launched more military interventions than all other great powers combined. The interventions in Somalia, Haiti, Bosnia and Kosovo were wars of choice, waged for moral and humanitarian ends, not strategic or economic necessity, just as realist critics protested at the time. Even the first Gulf War in 1991 was a war of choice, fought not for oil but to defend the principles of a “new world order” in which aggression could not go unpunished.
The United States might have drawn the line at Saudi Arabia, as Colin Powell, then chairman of the Joint Chiefs of Staff, proposed.
The first U.S. military intervention of the post-Cold War era, the 1989 invasion of Panama, was a war for regime change and democracy. President George H. W. Bush sent 22,500 troops to oust Manuel Noriega and, as he declared, “to defend democracy” in a conflict “between Noriega and the people of Panama.” The conservative columnist George Will favored this “act of hemispheric hygiene,” even though U.S. national interests, narrowly construed, did not justify war. That was an argument “against the narrow construing of national interests.”
The United States, in fact, has always defined its interests broadly to include the defense and promotion of the “universal” principles of liberalism and democracy enunciated in the Declaration of Independence. “The cause of America is the cause of all mankind,” Benjamin Franklin declared at the time of the American Revolution and, as William Appleman Williams once commented, Americans believe their nation “has meaning … only as it realizes natural right and reason throughout the universe.”
This is the real traditional approach: the conviction that U.S. power and influence can and should serve the interests of humanity. It is what makes the United States, in former President Bill Clinton’s words, the “indispensable nation,” or as then-U.S. Secretary of State Dean Acheson colorfully put it six decades ago, “the locomotive at the head of mankind.” The United States does pursue its selfish interests and ambitions, sometimes brutally, as other nations have throughout history. Nor is it innocent of hypocrisy, masking selfishness behind claims of virtue. But the United States has always had this unique spur to global involvement, an ideological righteousness that inclines it to meddle in the affairs of others, to seek change, to insist on imposing its avowed universal principles usually through peaceful pressures but sometimes through war.
This enduring tradition has led the United States into some disasters where it has done more harm than good, and into triumphs where it has done more good than harm. These days, this conviction is strangely called “neo-conservatism,” but there is nothing neo and certainly nothing conservative about it. U.S. foreign policy has almost always been a liberal foreign policy. As Will put it, the “messianic impulse” has been “a constant of America’s national character, and a component of American patriotism” from the beginning.
The other constant, however, has been a self-image at odds with this reality. This distorted self-image has its own noble origins, reflecting a perhaps laudable liberal discomfort with power and a sense of guilt at being perceived as a bully, even in a good cause. When things go badly, as in Iraq, the cry goes up in the land for a change. There is a yearning, even among the self-proclaimed realists, for a return to an imagined past innocence; to the mythical “traditional approach”; to a virtuous time that never existed, not even at the glorious birth of the republic.
This is escapism, not realism. True realism would recognize the United States for what it is, an ambitious, ideological, revolutionary nation with a belief in its own world-transforming powers and a historical record of enough success to sustain that belief.
Whether the United States conducts itself successfully or stumbles in the coming years will depend on the wisdom and capacity of the statesmen and women the U.S. people choose to shape and carry out their foreign policy. But the broad direction of that foreign policy will remain much as it has been for over two centuries. Anything else would be an aberration.

Robert Kagan is a senior associate at the Carnegie Endowment for International Peace and the author of “Dangerous Nation,” a history of American foreign policy. This comment was published in the Financial Times.

TITLE: Irregularities In the State Of Regulations
PUBLISHER: EDITORIAL
TEXT: The court-ordered closure of the IKEA Mega mall in Nizhny Novgorod for fire-code violations is bad news for shoppers and investors. The 30-day closure also is as a double whammy for IKEA, coming at the start of the holiday shopping season.
Anyone familiar with how regulatory agencies and procedures work in Russia has to wonder whether the 150-store mall is the target of a bureaucratic shakedown. Entrepreneurs are all too familiar with the system in which safety officials only begin looking for infractions when they want to supplement their incomes.
IKEA has hinted of this kind of problem in the past. In 2004, the company’s chief executive for Russia at the time, Lennart Dahlgren, complained of “sabotage” as he struggled to open a Mega mall in Khimki, just north of Moscow.
Of course, there is the very real possibility that the court and inspectors are just concerned about safety. Nizhny Novgorod Governor Valery Shantsev and the Nizhny Novgorod mayor both called for action last month when a Mega mall shopper lost control of a cart carrying a 200-kilogram load on a moving walkway, killing a 5-year-old boy.
An inspection of the mall turned up 887 fire-code violations, and a follow-up inspection later determined that 82 percent of them had not been corrected. In light of last weekend’s drug-treatment facility fire in Moscow, which killed 45, and the degree to which fire and public safety regulations are generally abused, the court’s decision could be a very positive sign.
However, it is hard to give the authorities the benefit of the doubt when they seem to enjoy arbitrarily enforcing vaguely worded regulations that are open to interpretation. Widespread public attitudes toward the regulations as annoying hindrances to be circumvented are also a problem. 
Complicating matters, a Nizhny Novgorod city lawmaker has claimed that a business group looking to protect its turf and profits might be behind the mall’s closure this week.
Taken together, these factors create a conundrum over why the mall was ordered closed. The costs of such uncertainty are high. 
If IKEA is the target of a shakedown, the monetary cost alone is more than $1 million in lost sales for every day the shopping center remains closed, according to one industry analyst.
If the mall is indeed a fire hazard, the public should feel reassured that it has been closed. But if the 887 violations were only discovered due to special circumstances surrounding the case, the closure won’t make Nizhny Novgorod a safer place to spend money — for shoppers or investors.

TITLE: NATO Expansion May Prove a Fateful Error
AUTHOR: By Richard Lourie
TEXT: The NATO meeting held in Riga, Latvia, in late November attracted very little attention. Nothing of substance emerged from the conference and there was plenty of competition for headlines. Not that long ago, the very idea of a NATO meeting in a Latvia that was itself in NATO would have been a nightmare for Russia, like a Warsaw-Pact Canada for the United States.
In the initial post-Soviet years, Russian officials begged the United States not to let any former Soviet republics join NATO. Former Prime Minister Yevgeny Primakov threatened: “If any countries of the former Soviet Union are admitted to NATO, we will have no relations with NATO whatsoever.” For all their bluster, the Russians caved — resentfully, perhaps nourishing dreams of vengeance, but they caved nonetheless.
In fact, three former Soviet republics — Latvia, Lithuania and Estonia — are now part of NATO. Seven other new members — Bulgaria, Romania, Poland, Hungary, the Czech Republic, Slovakia, and Slovenia — were formerly part of the communist bloc. The United States and the rest of the West are now in the rather odd position of risking armageddon to defend Slovenia.
Many in the West opposed NATO expansion, chief among them U.S. statesman George Kennan, creator of the “containment” doctrine. He called expansion “the most fateful error of American policy in the entire post-Cold-War era.” Kennan foresaw it leading to the inflammation of the “nationalistic, anti-Western and militaristic tendencies in Russian opinion.” 
Others, however, had little faith that Russia would succeed in the transition to a free market and democracy. Estonia’s former president, Lennart Meri, spoke of Russia in terms of a malignancy in remission. U.S. Senator Richard Lugar worried about “Russia redux,” and Secretary of State Condoleezza Rice was among the first to use the word “quarantine.” 
Opinion was, of course, less divided in the actual countries at issue. For them NATO was a godsend, a stronghold of safety and security after centuries of domination by Moscow. From a simple human point of view, all those countries deserved to breathe free. President Boris Yeltsin, whatever his faults, did have the basic live-and-let-live instincts of a democrat and accepted the principle of national self-determination.
U.S. President Bill Clinton was constantly reassuring Yeltsin: “As I see it, NATO expansion is not anti-Russian.” Others saw and see it differently. Ukrainian Prime Minister Viktor Yanukovych, when meeting with Rice and U.S. Vice President Richard Cheney last week, said that many Ukrainians saw NATO membership as “against Russia.”
Chaotic and weak, Yeltsin’s government had to accede to Western wishes. Rich and aggressive, the new Russia is no pushover on any subject, especially that of Ukraine and NATO. The new Russia may be willing to tolerate the existence of an independent Ukraine, as long as it is responsive to Russian influence, but would be dead set against Ukraine in NATO. Russia would essentially be encircled from the Baltic to the Black Sea if Ukraine joined NATO. The small remaining strip of Russian land providing access to the Caspian includes the rebellious Muslim areas of Chechnya, Ingushetia and Dagestan, not to mention being bordered by Georgia, which is itself seeking NATO membership. As Clinton’s Russia specialist Strobe Talbot put it in his memoir “The Russia Hand,” NATO expansion is inevitably seen by Russians as spearheading a U.S. strategy “to replace their influence and exploit the vast oil and gas resources of the Caspian Sea basin.”
Part of Ukraine leans toward the EU and NATO, and part toward Russia. The two parts may have trouble coexisting for long. Russia would not risk confrontation over Slovenia, but it might over Ukraine, which could soon become a hot spot. There’s still plenty of time for Kennan to be right.

Richard Lourie is the author of “The Autobiography of Joseph Stalin.”

TITLE: Lives Still Affected by Azeri-Armenian War
AUTHOR: By Matthew Collin
TEXT: I met Ashot in a village just outside the Armenian capital, Yerevan, at the house of his father, Vladimir, a writer who fled the Azeri capital, Baku, with his family in the early 1990s, amid the upsurge of violence between Azeris and Armenians.
Vladimir was leafing through an album of old photographs decorated with mementos of a lost life in cosmopolitan Baku, where his mother sang show tunes during the lazy, lovingly remembered Brezhnev era. 
All that is gone now. These days, Vladimir’s family members are “internally displaced persons,” although probably never to be replaced. And Baku is no longer the city Vladimir remembers. Ethnic Armenians haven’t been welcome for years. His family now lives in a one-room cottage near a rusty automobile dump. They’re lucky. Some of the war escapees in this village live in a disused prison.
Then Ashot walked in — 16 years old, hair meticulously gelled, bright but bashful. He’s a singer too, he said, although it took a bit of bullying by his father to coax a tune out of him. When it came, it was unexpectedly in Azeri, a language he doesn’t even speak. It turned out he had learned it by heart from his grandmother without knowing what the words meant. So an Armenian boy whose family was driven out by the Azeris was singing an old Azeri song in a refugee hovel in Armenia.
A few weeks later, I was in the oil boomtown of Baku, listening to a very different tune: the call to prayer from a city-center mosque. Standing next to me was Vahid, 20, who comes here every week for Friday prayers. He said he was studying business and wanted to work for BP, the key player in the Azeri black gold rush. But he feared he wouldn’t have enough money to bribe his way through what he said was a corrupt education system and to afford the private English lessons he would need to get a job with an international company.
While I waited to speak to the imam, Vahid kept talking. His father runs a plastics factory, which he managed to build up from nothing in the few years since the family arrived in Baku. “Arrived from where?” I asked. From Armenia in the 1990s, he said.
Although they traveled in opposite directions, both Vahid and Ashot — along with nearly a million others — were displaced by the same war between Armenia and Azerbaijan. In the continued absence of a final peace agreement between the two countries, it’s a conflict that continues to affect the lives and futures of both young men more than a decade later — and the lives of many others too young to remember it.

Matthew Collin is a journalist based in Tbilisi.

TITLE: U.S. Needs Some Good PR
AUTHOR: By Mark H. Teeter
TEXT: However outsiders view the United States — as the home of jazz, basketball, modern democracy and the American Dream, or less flatteringly as the “Great Satan,” for example — everyone seems convinced that learning more about the U.S. colossus and its peculiar people is either good, advantageous or both. 
The U.S. government for a long time agreed, maintaining a sizeable PR apparatus called the U.S. Information Agency, or USIA, from 1953 to 1999.
Maybe it’s time to bring USIA back. I’ve noticed recently that the United States is in rather bad global odor, but that something like sanity may soon be returning to Washington. Carpe diem! This agency did yeoman service in its heyday and might again. For starters, USIA helped end the Cold War. I can confirm this, as much of that particular success was my handiwork. 
In 1978, the agency hired me for the key position of “guide-interpreter” for a cultural exhibition set to tour three Soviet cities over seven months. The recruiting poster in the Slavic department where I was then treading postgraduate water read: “Travel around the U.S.S.R. and make money doing it.”
This exhibition was part of a series of U.S.-Soviet exchanges dating from 1959, when USIA had staged its “American National Exhibition” in Sokolniki Park. Amid the initial throngs of curious and information-starved Soviet visitors then was Communist Party chieftain Nikita Khrushchev. There to explain the United States (or at least its home appliances) was an equally controversial figure, then-Vice President Richard Nixon. Yes, it was at this first USIA Sokolniki exhibit that the famous “kitchen debate” between these two stalwarts took place. 
Nixon led Khrushchev around a demonstration U.S. kitchen, pointing at a dishwashing machine and helpfully noting that “this is our newest model,” (in case Khrushchev was in a buying mood?). Khrushchev refused to take anything Nixon said at face value — bonus points for perspicacity there — and indulged in a classic Soviet debating tactic: When stumped by your opponent, lie like a rug. Shown everyday, U.S. appliances a Soviet family couldn’t dream of owning, Khrushchev counterpunched: “[Newly built] Russian houses have all this equipment right now.” 
The spontaneous exchange featured both humor (Khrushchev: “I hope I haven’t insulted you.” Nixon: “I have been insulted by experts.”) and a unilateral peace proposal that was blessedly declined (Khrushchev: “Let’s kiss.”). But the meeting’s basic tenor was confrontational. This was the Cold War, after all, playing out on a field of dishwashers and frost-free refrigerators. Happily, both sides ultimately deemed ideas the appropriate weaponry.
Nixon: “You must not be afraid of ideas.” 
Khrushchev: “We say it’s you who must not be afraid of ideas ...”
Nixon: “Well, then, let’s have more exchange of them ...”
Khrushchev: “Good. [Turning to interpreter] Now what did I just agree to?”
In effect, what Khrushchev agreed to was more cultural exchanges. Over the next two decades the United States and the Soviet Union sent each other more than a dozen exhibits apiece, with “Plastics U.S.A.,” “Architecture U.S.A.,” and “Photography U.S.A.” going up against the likes of “Soviet Sport” and “The Soviet Woman.” 
At Sokolniki in early 1979, as a guide for “Agriculture U.S.A.,” I was set to resume the great debate left somewhere in the rinse cycle by Nixon and Khrushchev. Joining me on this idea offensive was a congenial bunch of U.S. twentysomethings happy to get paid for practicing their Russian against live opposition: the legions of ever-inquisitive, naturally skeptical and occasionally hostile “Soves” who relentlessly filed through the exhibition six days per week. 
Our exhibit wasn’t another clash of the titans; it was a chat of the mortals, generally benign on both sides. And in only seven months we settled the Cold War’s hash: The conflict barely lasted another decade! More seriously, most guides enjoyed life on the Russian front, deflecting regular barrages of ill-informed “Sove-blather” and pursuing animated discussions with visitors whose misconceptions about the United States urgently needed correcting — in a positive, upbeat, peace-and-friendship kind of way. And trust me: We learned a lot from our Soviet guests, too. The short version: Everybody won. 
Bringing back USIA exhibits, and perhaps jump-starting a new exchange of ideas, might help thaw today’s developing Russian-American “Cold War II.” Would President Vladimir Putin like to see a new Maytag washer? If Pavilion 12 at Sokolniki is free, sign me up. 

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

TITLE: In Search of Four Walls, A Roof and a Low Mortgage
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: SHCHYOLKOVO, Moscow Region — Once upon a time, Vladimir Krasnykh was a Soviet infantryman defending his nation against fascist invaders. Today, Krasnykh, 82, lies in bed all day long enveloped by cobwebs and the reek of human waste. Fuzzy transmissions from the radio propped on his belly circle through his room. 
His mind is turning dark and bitter. He has fragmented recollections of the war, his marriage, the dissolution of his family. He sounds like a man who has been wandering for many years. He is confused and sad. He has but the vaguest notion of what country he lives in or why he is here. 
“What did he fight for?” asked Galina Novikova, glancing at her father. “He served his country, and they let him live like a dog.”
Krasnykh has been waiting six years for an apartment that will almost certainly never come. When he signed up for a government home in September 2000, he was No. 585 on a priority-housing list for veterans. Today, he stands at 417. 
At this rate, it will be almost 15 years before Krasnykh gets an apartment. But at the rate he is declining, the likelihood that he makes it to 97, or has much time to enjoy a new apartment, is very slim. “I think they are just waiting for him to die,” Novikova said. 
By now, there were supposed to be fewer and fewer people like Krasnykh in Russia, flush with oil cash and guided by the strong hand of President Vladimir Putin, who made housing one of his national projects in his 2005 state-of-the-nation address.
But the reality is about 61 percent of Russian families lack adequate housing, according to government estimates, and only 12 percent can afford to buy an apartment. 
Everyone, from veterans and pensioners to young families, has been caught in a housing market that looks increasingly bifurcated — showcasing new skyscrapers and high-end dachas for the nation’s nascent haute bourgeoisie while offering few options to the bulk of society. The situation is most striking in Moscow, where prices have skyrocketed to levels comparable to those in New York and London.

Not the Perfect Father
Krasnykh was not the perfect father. His daughter is the first to admit that.
For no obvious reason, he abandoned his family in 1972. He moved to a house in a forest outside the town of Shchyolkovo, a little northeast of Moscow. There, he tended to the forest and a handful of cows. As far as his daughter knows, he lived alone, detached from the world around him, through the rest of the Brezhnev era and glasnost, perestroika and the Soviet collapse.
The winter of 1997, Novikova said, was particularly harsh, and the small house couldn’t provide adequate shelter. Krasnykh decided to leave for a month or so to see friends. When he returned, she said, his house had been bulldozed and the land seized by city officials. To this day, Novikova said, it’s not clear who or what was behind the seizure.
Without a home, without money to buy or rent a new place to live in, without much of a family to seek refuge with, Krasnykh was forced onto the streets, his daughter said.
He lived on sidewalks and inside train stations. Eventually, Novikova said, Krasnykh wound up in a hospital, and sometime later, somehow Novikova, who sells trinkets at the Izmailovo market, found her father. Novikova’s mother and sister aren’t speaking to him. Indeed, they refuse to do little more than acknowledge he exists.
Novikova said she had her father transferred to the government-run shelter, a pink, two-story building that dates to 1928. The hallways are infested with screaming children and slow-moving drunks who are supposedly drying up. Everywhere is filthy, peeling, dripping, leaking or otherwise falling apart. Hopelessness and cockroaches permeate the high-ceilinged rooms.
“Every week, I come get him and bring him to my home to wash him up,” said Novikova, who lives in a five-story Khrushchev-era building with her husband and two daughters, aged 15 and 26. Walking down the tiny hallway requires turning sideways. All four sleep in the apartment’s single bedroom. 
Referring to the weekly washing sessions, Novikova said, “Even that is a tight fit. There’s just no room.”
An administrator at the shelter, who refused to give her name, was less sympathetic to Krasnykh and Novikova.
“I’m not saying the administration here is perfect — there are problems — but this man has a daughter,” said the administrator, bundled up in a winter coat even as she insisted the shelter had heating. “Why doesn’t she take care of him?”

Priorities
In fact, the government has made taking care of people just like Krasnykh a priority. 
For the fiscal year 2006, it allocated $8.1 billion for the project, with $4.7 billion for housing construction, and $3.4 billion for guaranteeing loans, according to figures provided by the office of First Deputy Prime Minister Dmitry Medvedev, who oversees the national projects.
The four priorities of the housing project are developing a mortgage market that enables banks to finance long-term loans and encourages lower lending rates; expanding the stock of available housing; targeting young families, which includes families with children and no one over 30; and achieving its earlier objectives of housing veterans, invalids, those who cleaned up Chernobyl and others. Krasnykh falls into this last category.
In early 2005, there were more than 700,000 families, including Krasnykh, who had been earlier targeted by authorities for improved housing. Given that he constitutes a one-person family, Krasnykh has long been slated to receive a free, 33-square-meter apartment. With the new national project mandate, the government set aside $122 million for housing for this group in 2006, and $190.1 million in 2007.
But public awareness of the project remains low. Novikova, for one, has never heard of it. “I’m sure it’s just empty talk,” she said. A recent Public Opinion Foundation poll found that 29 percent of respondents were aware of the housing project. 
And public officials readily admit that housing, of all the four national projects, remains the most elusive.
Georgy Poltavchenko, presidential envoy to the Central Federal District, recently told Interfax that in the Ivanovo region, just 50 percent of the housing space that the state had hoped would be built in 2006 had actually been built; in the Bryansk region, the figure was 70 percent.
“In some regions, we are seeing a failure to meet planned levels of implementation of the plan along with an obvious decline in the pace of housing construction compared to last year,” Poltavchenko said. Some of the worst regions were Voronezh, Kostroma and Tula, he said.
Still, most government officials insist everything is on track. They note that the mortgage rate offered by banks has dipped to 11.5 percent from 14 percent last year.
“It is like the final privatization,” Oleg Alexeyev said. Alexeyev is the chairman of a panel of private individuals advising the government on housing and the head of government relations at Renova, an asset-management firm that has investments in TNK-BP and CJSC Integrated Energy Systems, according to the firm’s web site.
Alexeyev sees the housing project not only as a construction program, but as a nationwide lesson in economics. It is time, he said, that people realize the days of Soviet-era, state-allocated housing are over.
But Russia is still a long way from even laying the groundwork for a modern, post-Soviet housing market. 
Indeed, the mortgage market remains largely undeveloped, encompassing just 1 percent of the gross domestic product compared with 60 percent in the United States and 40 percent, on average, in Europe, said Andrei Milyutin, head of the mortgage market-development project at the International Finance Corporation.
Milyutin added that encouraging loans in a country with no culture of borrowing is particularly tough. Over-borrowing and bankruptcy remain widespread risks, he said.
On top of this, Milyutin said, are Russia’s notorious black markets and semi-legal gray markets, in which perfectly legal goods such as ballpoint pens and cigarettes are sold illegally.
Securing a loan for someone who makes $20,000 annually but reports just $1,000 of that will be next to impossible, he said. 
All of which makes the pool of possible housing lenders very small. “A couple hundred banks claim to offer mortgages, but of those, there are only two or three dozen that are actively offering them,” Milyutin said.
Still, there appears to be some increase in the number of mortgages. Denis Maslov, an analyst with the Eurasia Group, said mortgages were more available than they had been just two years ago. But, he added, the new money available for housing, coupled with a lack of available apartments and houses, has created a new set of problems. “Prices are going through the roof,” Maslov said.
State Duma Deputy Alexander Lebedev, who has been pushing his own housing plan for years, agreed. The government, he said, “hasn’t done anything except provide the conditions for a very serious price hike.”
Natalia Mokrovsova, who heads the construction oversight committee in the Shchyolkovo city administration, said bureaucracy remained a critical hurdle, adding that nothing had changed since Putin announced the housing plan in September 2005.
While the housing project envisions eliminating numerous permits and other administrative barriers — with an eye toward building 21.3 million square meters of housing, a 40 percent increase, by 2010 — red tape still appears to be a problem.
“It’s always been difficult to get the right to develop property,” Mokrovsova said. “You need a whole host of documents, from technical and environmental reviews to the reasons you are using the property. They’re all very important.”
Lebedev estimated that building on a property requires 260 or so permits and that corruption is rife. “It would not take less than three years to get that,” he said. “And, of course, some extra money would also be needed.”
The current system, he said, is kept in place by a corrupt marriage of state officials and connected real-estate developers. In Moscow, he said, Mayor Yury Luzhkov and his wife, developer Yelena Baturina, run the show. The same system exists in every major market in the country, Lebedev said. “There’s a monopoly when it comes to everything from cement to bricks to land permits,” he said. “And there’s a total monopoly on construction.” 
That Vladimir Yakovlev has been put in charge of the Regional Development Ministry, which administers the project, is a “strategic joke,” Eurasia’s Maslov said. Yakovlev, formerly St. Petersburg governor, was yanked from his post in 2003, in part for failing to address a housing crunch and misusing state funds.
Even under better leadership, Maslov said, the project would be problematic. Trying to expand the housing supply at a government ministry — instead of simply creating the conditions for market-oriented reform — will likely spell more corruption and more inefficiency, he said. 
Yelena Markova, another Shchyolkovo official whose job it is to oversee the list of those waiting for homes in the city, including Krasnykh, largely agreed with Mokrovsova and other critics. “The national project is just a continuation of the measures we already had,” Markova said. “Only the name has changed.”

Everything Changes?
Renova’s Alexeyev countered that, in fact, everything is changing. 
While he couldn’t list any concrete achievements, Alexeyev insisted that the government’s recognition that there is a problem marked a major step forward.
“Housing is one of the most serious problems today,” Alexeyev said. “The government’s decision to solve it is a very serious step.”
That’s hardly any help to Novikova or her father, whose right elbow remains bandaged in makeshift dressing to prevent an infected growth from spreading. 
“I forget,” said Novikova, pointing to his arm. “Have you been in pain for two years, or three?”
Krasnykh, surrounded by unwashed clothing, old pots, soiled sheets and a toilet-chair his daughter installed to make it easier for him to go to the bathroom, could barely answer. He said simply: “What has happened to me?”

TITLE: Red Square Celebrates Hockey Heritage
PUBLISHER: The Associated Press
TEXT: A charity match pitting former Soviet greats against former NHL players took center stage at Red Square on Sunday to mark the birth of Russian hockey. 
The Great Five of Soviet hockey — Igor Larionov, Sergei Makarov and Vladimir Krutov and defensemen Vyacheslav Fetisov and Alexei Kasatonov — as well as other famous Soviet players faced Team World, led by legendary NHL coach Scotty Bowman. 
The first ice hockey game ever played at Red Square honored the 60th anniversary of the birth of Russian hockey, the 50th anniversary of the former Soviet Union’s first hockey victory at the Olympics and the 25th anniversary of the creation of the famous KLM line in the 1980s. 
“This is a historic event — to come to Moscow and play at Red Square,” Bowman said. “And it’s an honor to have all these great players to play here at a time to honor the heritage of the Soviet and Russian ice hockey.” 
Team World included players such as Paul Coffey, Thomas Sandstrom, Jari Kurri, Ron Dugueq, Doug Brown, and brothers Peter and Anton Stastny. 
Viktor Tikhonov, who brought the Great Five together, coached the U.S.S.R.-Russia team. 
The game was played at the outdoor skating rink built at the square where military parades and political rallies dominated during the Soviet era. About 2,000 spectators cheered for the home side at two stands erected a bit ahead of Lenin’s Tomb. 
“It was the first time the game was played at Red Square and we will remember it forever,” Kasatonov said. 
The Russian team played in the U.S.S.R. jerseys in the first two 15-minute periods, but wore Russia’s in the third. 
Larionov scored four goals, Fetisov, Kasatonov and Krutov had a goal apiece for Russia. Skriko Petri scored two goals for the Team World. Sandstrom, Kurri, Dugueq, Brown and the Stastny brothers also scored. 
“It was just like in the old times,” Larionov said. “Our mutual understanding was excellent and how precise our passes were. It was great.” 
Coffey, a four-time Stanley Cup winner, converted a penalty shot with 2 seconds left to secure a 10-10 draw. 
“Look around — Kremlin, Red Square, Spassky tower — what a nice scene,” Coffey said. “And we were a part of this great event.”

TITLE: Death of Pinochet Provokes Mixed Feelings
AUTHOR: By Eduardo Gallardo
PUBLISHER: The Associated Press
TEXT: SANTIAGO, Chile — Some in Chile celebrated with champagne but for others, there was no joy in death of General Augusto Pinochet, only the sense of a final injustice committed by the dictator who brutally ruled the country for 17 years.
For victims, Pinochet’s demise dashed hopes that he would ever face justice for the torture and killings that were the hallmarks of his 1973-1990 regime.
When he died Sunday at the military hospital where he was being treated for a Dec. 3 heart attack, celebrations broke out around the Chilean capital. At a major plaza, hundreds of cheering, flag-waving people gathered to pop champagne corks and toss confetti.
Outside the hospital where Pinochet died, Chileans who believed he saved them from communism wept and hoisted posters with the general’s image. Some chanted that Pinochet and his feared secret police were Chile’s saviors.
“He will live forever in my memory — I love him as much as my own children,” said Margarita Sanchez.
Police clashed with demonstrators who threw rocks and erected fire barricades that sent up thick plumes of smoke and blocked traffic on the city’s main avenue. Tear gas and water cannons were used to disperse the protesters, many of them masked, who quickly regrouped.
Officials blamed the violence on a small contingent among the thousands of demonstrators who poured into the streets to denounce Pinochet’s legacy. At least two bank offices were damaged.
The clashes spread past midnight to several working-class districts and police said 23 officers, including a major and a captain, were injured.
Deputy Interior Minister Felipe Harboe said there had been a number of arrests but gave no figure.
“The government makes an appeal to peace,” Harboe said. “We do not want people to be affected today by facts of the past.”
Pinochet overthrew socialist President Salvador Allende at a time when the U.S. was working to destabilize his Marxist government and keep Chile from exporting communism in Latin America. But the world reacted in horror as Santiago’s main soccer stadium filled with political prisoners to be tortured, killed or forced into exile.
Although his dictatorship laid the groundwork for South America’s most stable economy, Pinochet will be remembered as the archetype of the era’s repressive rulers who proliferated throughout Latin America and, in many cases, were secretly supported by the United States.
Chile’s government says at least 3,197 people were killed for political reasons during Pinochet’s rule, but courts allowed the aging general to escape hundreds of criminal complaints as his health declined.
“This criminal has departed without ever being sentenced for all the acts he was responsible for during his dictatorship,” lamented Hugo Gutierrez, a human rights lawyer involved in several lawsuits against Pinochet.
Lorena Pizarro, president of an association of relatives of the dictatorship’s victims, called Pinochet genocidal and said it was ironic he had died “on Dec. 10, the international day of human rights.”
But the office of former British Prime Minister Margaret Thatcher, Pinochet’s staunchest ally in Britain, said she was “greatly saddened” by his death.
While some former U.S. presidents quietly supported Pinochet, the current administration of George W. Bush has good ties with Chile’s free-market Socialist President Michelle Bachelet, whose father, a Pinochet opponent, died after being tortured in prison.
“Our thoughts today are with the victims of his reign and their families,” said White House spokesman Tony Fratto. 
Chile’s government said Sunday that Pinochet will not receive the state funeral normally granted to former presidents, but only military honors at the Santiago military academy. 
Recently, Bachelet said it would be “a violation of my conscience” to attend a state funeral for him. 
Early Monday, Pinochet’s coffin was transferred to the Military Academy. 
The coffin, covered with a Chilean flag and Pinochet’s military hat and sword, was placed in a large hall, but the media was kept at a distance and could hardly see it through large windows. 
As he requested, Pinochet will be cremated, according to son Marco Antonio, to avoid desecration of his tomb by “people who always hated him.” 
The government said it had authorized the Chilean flag to be flown at half-staff at military barracks nationwide. 
Pinochet took power on Sept. 11, 1973, demanding an unconditional surrender from Allende as warplanes bombed the presidential palace. Instead, Allende committed suicide with a submachine gun he had received as a gift from Fidel Castro. 
Pinochet disbanded Congress, banned political activity and crushed dissent. Chile’s economy was already in ruins when he launched a radical free-market program that at first triggered financial collapse and dire unemployment. But it opened the way for South America’s healthiest economy, which has grown by 5 percent to 7 percent a year since 1984. 
Pinochet lost an October 1988 referendum to extend his rule, then lost an election to Patricio Alywin, whose center-left coalition has ruled Chile since 1990. 
Pinochet avoided prosecution for years after his presidency. But in 1998, after traveling to London for back surgery, he was placed under house arrest when a Spanish judge issued a warrant seeking to try him for human rights violations. British authorities decided he was too ill to stand trial and sent him home in March 2000. 
Back in Chile, more than 200 criminal complaints were filed against him. Although he was under house arrest at the time of his death, no case ever reached trial because of his poor health. 
On his 91st birthday — less than a month before his death — his wife read a statement by him saying he took “political responsibility for everything that was done, which had no other goal than making Chile greater and avoiding its disintegration.”

TITLE: N. Korea Athletes On Show
AUTHOR: By Eric Talmadge
PUBLISHER: The Associated Press
TEXT: DOHA, Qatar — South Korea’s cheering section, like most at the Asian Games, was a ragtag collection of off-duty athletes and officials, relatives and die-hard fans willing to make the 12-hour trip to this tiny country on the Persian Gulf to see their team play. 
North Korea brought out the pros. 
Seemingly materializing out of nowhere, hundreds of men in dark gray suits filled their section of the stadium for a soccer game against South Korea, clapping and singing in unison and roaring whenever their players got the ball. As soon as the game was over, they vanished just as quickly as they had arrived. 
For North Korea, impoverished and increasingly isolated after conducting its first nuclear test just two months ago, the Asian Games isn’t just about sports. 
It’s a chance to win a gold for the “Dear Leader” — Kim Jong Il. 
“We dedicate everything, our participation and any medals we win, to our nation and our leader,” said Ri Kyong Hui, captain of the North Korean softball team. “Without him, there is nothing.” 
The Asian Games mark something of a return to the international stage for North Korea after its Oct. 9 nuclear test, which prompted tough sanctions from the U.N. Security Council that have further cut off Kim’s almost hermetically sealed regime. 
The North is going all out to make a mark, with teams in everything from archery to wushu, a Chinese martial art. All told, the North has 162 athletes here. 
So far, they haven’t had much to cheer about. Ten days into the 15-day competition, the North had won just five gold medals — in gymnastics, shooting and judo. South Korea, meanwhile, had won 28. 
But that’s just part of the story. 
In an effort to show that its nuclear test hasn’t alienated its neighbors to the South, the North lobbied intensely for both teams to march into the opening ceremonies at Doha together under a “unification flag.” 
South Korean officials said the plan was nearly scuttled several times, but they acquiesced at the last minute. A South Korean basketball player and a North Korean soccer player carried the flag. 
Winning over the South for the North’s concept of forming a joint team for the 2008 Olympics in Beijing has proven more difficult. 
South Korean Olympic officials say a flurry of talks with their North Korean counterparts here last week stalled over the North’s demand that it get equal representation on any unified Olympic team.

TITLE: Holocaust Conference Is Widely Condemned
AUTHOR: By Nasser Karimi
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran — Iran on Monday opened a Holocaust conference that it said would examine whether the genocide took place, claiming the meeting was an opportunity for discussion in an atmosphere free of Western taboos. 
The conference, “Review of the Holocaust: Global Vision,” was initiated by President Mahmoud Ahmadinejad, who has described the Holocaust as a “myth” and called for Israel to be wiped off the map. Even before it opened, the gathering was condemned by Germany, the United States and Israel.
The organizers, the Foreign Ministry’s Institute for Political and International Studies, say the two-day conference has drawn 67 foreign researchers from 30 countries.
In his opening speech, the institute’s chief, Rasoul Mousavi, said the conference provided an opportunity to discuss “questions” about the Holocaust away from Western taboos and the restrictions imposed on scholars in Europe.
In Germany, Austria and France, it is illegal to deny the Holocaust. “This conference seeks neither to deny nor prove the Holocaust,” Mousavi said. “It is just to provide an appropriate scientific atmosphere for scholars to offer their opinions in freedom about a historical issue.”
Iranian Foreign Minister Manouchehr Mottaki dismissed the foreign criticism as “predictable,” telling conference delegates in a speech that there was “no logical reason for opposing this conference.”
“The objective for organizing this conference is to create an atmosphere to raise various opinions about a historical issue. We are not seeking to deny or prove the Holocaust,” Mottaki said. “If the official version of the Holocaust is thrown into doubt, then the identity and nature of Israel will be thrown into doubt. And if, during this review, it is proved that the Holocaust was a historical reality, then what is the reason for the Muslim people of the region and the Palestinians having to pay the cost of the Nazis’ crimes?” Mottaki said.
In Israel, the official Holocaust memorial, Yad Vashem, issued a statement condemning the Tehran conference as an attempt to “paint (an) extremist agenda with a scholarly brush ... an effort to mainstream Holocaust denial.”

TITLE: Arab League Wins Support to End Standoff
AUTHOR: By Nadim Ladki
PUBLISHER: Reuters
TEXT: BEIRUT — The Arab League won vital Syrian support on Monday for its efforts to end a standoff between Lebanon’s government and a Hezbollah-led opposition rallying hundreds of thousands in central Beirut, an envoy said. 
Arab League envoy Mustafa Osman Ismail said he also had backing in principle from rival factions in Lebanon.
There should, he said, be “no victor and no vanquished.”
“I have received confirmation from the brothers in Syria that they (support)... Lebanese consensus and support our efforts,” Ismail, a Sudanese presidential adviser, said after talks with President Bashar al-Assad in Damascus.
Ismail later traveled to Beirut and held separate talks with Prime Minister Fouad Siniora and Parliament Speaker Nabih Berri, a close ally of the pro-Syrian Hezbollah.
Arab League Secretary-General Amr Moussa was due to join him in the Lebanese capital on Tuesday.
Syria’s backing is seen as essential in forging any compromise in Lebanon. Though its troops left the country more than 18 months ago, Damascus still wields influence on many groups, the most powerful of which is Hezbollah.
An anti-government protest campaign entered its 11th day on Monday with thousands of opposition supporters maintaining a round-the-clock vigil at a tent city in central Beirut.
Hundreds of thousands of protesters attended a rally in Beirut on Sunday to press demands for a national unity government that grants more power to Shiite Muslim Hezbollah and its Christian and Muslim allies. One security force source estimated the rally was the biggest in Lebanese history.
Lebanese Economy and Trade Minister Sami Haddad warned a prolonged political crisis could threaten a crucial aid conference scheduled for Jan. 25 in Paris.
The worst case scenario could be very bleak if the political tension continues and we are not able to go to the Paris conference to get the desperately needed financial assistance; things could spin out of control,” he told Reuters in an interview.

TITLE: Man U Leave Chelsea Behind in Title Race
AUTHOR: By Trevor Huggins
PUBLISHER: Reuters
TEXT: LONDON — Any faint hopes Chelsea may have had of another comfortable run to the Premier League title look well and truly scuppered by their 1-1 draw with Arsenal. 
By Dec. 12 in 2005, a buoyant Chelsea were 12 points clear at the top after a playing a game more and bookmakers had paid out three months earlier on bets they would retain the club’s first title for 50 years. 
Today, Jose Mourinho’s men are eight points behind leaders Manchester United, albeit with a game in hand, and locked in what promises to be a protracted dogfight with Alex Ferguson’s side. 
The role reversal, which also raises the stakes for Wednesday’s home game with Newcastle United, is all the more of a surprise as Chelsea were typically lavish in their close-season spending. 
Whether in fees, such as the 30 million pounds ($58 million at the current exchange rate) paid to AC Milan for Ukraine striker Andriy Shevchenko, or in wages, with the reported 125,000 pounds a week earned by Germany midfielder Michael Ballack, Chelsea proved once again they are without equal. 
Add the arrival of promising young Nigeria midfielder John Obi Mikel, prised away from a planned move to United, and Chelsea had made English football’s best squad even stronger. 
Yet things have not quite gone to plan for the club owned by Russian billionaire Roman Abramovich. 
Mikel has been consigned to the remote fringes of the first team, while the other two are still adapting to the rough and tumble of the English game. The apprenticeship is proving a particularly painful one for Shevchenko. 
In terms of results, Chelsea are not quite matching the irrepressible rhythm of a year ago. 
Last season, they won 14 of their first 16 games. Sunday’s draw with Arsenal left them with 11 wins from the same number of games and they have also scored nine fewer league goals than last time. 
More importantly, Chelsea have been powerless to prevent the improvement at United. For Arsenal, Sunday’s draw left only mathematicians and their most blinkered fans believing they can bridge the 18-point gap on United, despite their game in hand.

TITLE: Queen’s Granddaughter Tops BBC Sports Poll
PUBLISHER: EDITORIAL
TEXT: World equestrian champion Zara Phillips, the granddaughter of Britain’s Queen Elizabeth II, was named the BBC’s sports personality of the year on Sunday, beating widely-tipped golfer Darren Clarke.
Phillips, 25, whose mother Princess Anne won the award in 1971, won the individual gold on her horse Toytown at the World Equestrian Games in Germany and helped Britain win a team silver.
Clarke, whose emotional performance following his wife’s death helped Europe beat the United States to win golf’s Ryder Cup in September, came second, while gymnast Beth Tweddle came third.
“To win this is absolutely amazing,” Phillips said.
The paucity of British success in major sports was highlighted by the absence of football, rugby and athletics from the 10-person short list for the personality contest, which is organized by the BBC and voted for by the British public. 
Among those put to the public vote were Jenson Button, who won a Formula One race for the first time at his 113th attempt, Monty Panesar, a spin bowler who has yet to play for England’s current Ashes team, and darts world champion Phil Taylor.
Teenage Arsenal winger Theo Walcott, an unused member of England’s World Cup squad and who has started just two league games this season, was named young sports personality of the year.
Europe’s victorious golfers, who thumped the U.S. 18-1/2 to 9-1/2, missed out on team of the year which went instead to treble-winning rugby league side St. Helens.
The northern English side’s Australian coach Daniel Anderson also picked up coach of the year.
World number one tennis player Roger Federer won the overseas personality award, while 11-times grand slam champion Bjorn Borg was given a lifetime achievement award.
Before winning the award, Phillips was unveiled on Saturday as the glamorous face of automaker Land Rover — becoming the first member of the royal family in direct line to the throne to appear in an advertisement — the London Evening Standard reported.

(Reuters, SPT)

TITLE: 3 Palestinian Boys Killed in Gaza Drive-By
AUTHOR: By Mohammed Salem
PUBLISHER: Reuters
TEXT: GAZA — Unidentified gunmen killed three sons of a Palestinian intelligence official loyal to President Mahmoud Abbas in Gaza on Monday, firing at the car as it dropped them at school, police and hospital officials said. 
An adult bystander was also killed in the attack in Gaza City, amid growing tension between Hamas, the governing militant movement and Abbas’s Fatah faction. Angry mourners firing automatic weapons later stormed into the compound of parliament during a funeral procession for the boys, who were aged between 6 and 9. Witnesses said the mourners fired at the building. It was unclear if anyone was hurt.
Some 2,000 people took part in the funeral march, including the boys’ father, Colonel Baha Balousha, who was heavily guarded by gunmen. Relatives carried his three sons, whose bodies were wrapped in white sheets, in their arms.
The car taking the children to school was peppered with bullet holes, and blood stains covered the seats. Two school bags, one green and the other blue, still lay inside.
“Masked gunmen took off in a yellow car after they fired many bullets at the car. Children were screaming and weeping in fear,” said a primary school boy who witnessed the attack.
Several other schools line the street, which was crowded with children at the time of the shooting. Residents said the gunmen fled with Hamas policemen in pursuit. Hospital officials said the dead bystander was a 25-year-old man. Police said two other children were wounded.

TITLE: China Says Nuclear Talks Will Resume
AUTHOR: By Joe Mcdonald
PUBLISHER: The Associated Press
TEXT: BEIJING — Disarmament talks on        North Korea’s nuclear weapons program will resume next week, China said Monday, announcing an apparent end to Pyongyang’s 13-month-old boycott of the negotiations over U.S. financial sanctions. 
Diplomats have been trying to set a date since North Korean leader Kim Jong Il’s government agreed to return to the six-nation talks, a breakthrough that followed the communist regime’s Oct. 9 test of a nuclear bomb.
Chinese Foreign Ministry spokesman Qin Gang said in a one-sentence statement on his ministry’s web site that the talks, which include the United States, would resume in Beijing on Dec. 18.
Japan’s prime minister said in Tokyo that North Korea must be urged “to take concrete steps” to disarm.
“At the six-party talks, we must push for North Korea to abandon its nuclear weapons a step at a time,” Prime Minister Shinzo Abe said.
Russia and South Korea also are participating in the talks.
Tokyo plans to bring up the lingering issue of North Korea’s abduction of Japanese nationals in the 1970s and ‘80s, said Japan’s chief Cabinet secretary, Yasuhisa Shiozaki.
North Korea’s main official newspaper said Tokyo shouldn’t return to the talks, criticizing a crackdown on a pro-Pyongyang group of ethnic Koreans in Japan over its suspected role in the North’s weapons programs.
“Japan is nothing but an impostor, not qualified to take part in the six-party talks,” the newspaper Rodong Sinmun said. “Even if they do come to the six-party talks, there will be nothing useful, with them making it difficult to solve the issue and wasting time by bringing to the table irrelevant issues.” The crackdown on the Korean group, Chongryon, “is a tactic to cast a shadow on resuming the six-party talks by intentionally provoking us,” the newspaper said.
North Korea frequently issues bellicose statements about Japan and other countries and Monday’s criticism of Tokyo was not expected to have any bearing on the negotiations. Tokyo already has angered Pyongyang by barring North Korean citizens, goods and ships from Japanese ports following the nuclear test. South Korea’s government welcomed Monday’s announcement of renewed talks and said it expects progress. “The government expects substantial progress will be made at this round of talks for a resolution of the North Korea nuclear issue and will continue to closely cooperate with related countries for this,” South Korea’s Foreign Ministry said in a statement.
The head of the ministry’s task force on the North Korean nuclear issue, Lee Yong-joon, declined to give specifics when asked what “substantial progress” would mean. Lee said participants would aim for progress “in at least parts” of a Sept. 19, 2005, joint declaration in which the North agreed to abandon its nuclear development in exchange for aid and security guarantees.
Last month, the United States offered North Korea details about the kind of economic and energy assistance the North would receive in exchange for shutting down its nuclear arms facilities, but it was not clear whether the communist country has made specific promises about the outcome of the new talks. 
Russia’s Foreign Ministry also issued a statement welcoming the decision to restart the talks. It said the Russian delegation would “make all efforts” toward progress in the negotiations with a goal to “guaranteeing the nuclear-free status of the Korean peninsula and the normalization of the situation in the region.”

TITLE: Nobel Laureate: Poverty Fight Essential
AUTHOR: By Kark Ritter and Doug Mellgren
PUBLISHER: The Associated Press
TEXT: STOCKHOLM, Sweden — Economist Muhammad Yunus accepted the Nobel Peace Prize on Sunday for his breakthrough program to lift the poor through tiny loans, saying he hoped the award would inspire “bold initiatives” to eradicate a problem at the root of terrorism. 
Yunus, a 66-year-old Bangladeshi, shared the award with his Grameen Bank, which for more than two decades has helped impoverished people start businesses by providing small, usually unsecured loans known as microcredit.
“We must address the root causes of terrorism to end it for all time,” Yunus told hundreds of guests at City Hall in Oslo, Norway. “I believe putting resources into improving the lives of poor people is a better strategy than spending it on guns.”
In his speech, Yunus also warned about the potential costs of globalization without help for the world’s poor.
“To me, globalization is like a hundred-lane highway crisscrossing the world,” Yunus said. “If it is a free-for-all highway, its lanes will be taken over by the giant trucks from powerful economies. Bangladeshi rickshaws will be thrown off the highway.”
“Rule of ‘strongest takes it all’ must be replaced by rules that ensure that the poorest have a place and piece of the action, without being elbowed out by the strong,” he said.
The Nobel laureates for literature, physics, economics and chemistry accepted their awards Sunday at a ceremony in Stockholm.
The Nobel Prizes, announced in October, are always presented in the two Scandinavian capitals on Dec. 10 to mark the anniversary of the 1896 death of their creator, Alfred Nobel. The Swedish industrialist, who invented dynamite, stipulated the dual ceremonies in his will. The awards, first handed out in 1901, carry $1.4 million in prize money.
The literature prize went to Orhan Pamuk, a Turkish writer accused of insulting his country, while six Americans swept the science and economics prizes. Their findings cemented the “big bang” theory, broke new ground in genetic research and explored the relationship between inflation and unemployment.
Yunus is the first Nobel winner from Bangladesh, an impoverished South Asian country on the Bay of Bengal. Nobel Committee chairman Ole Danbolt Mjoes said the award was partially intended as an outstretched hand to the Islamic world in an era when Muslims are often demonized because of terrorism.
“The peace prize to Yunus and Grameen Bank is also support for the Muslim country of Bangladesh, and for the Muslim environments in the world that are working for dialogue and collaboration,” he said.
Pamuk, 54, accepted the literature prize for a body of work that illustrates the struggle of Turkey to find a balance between East and West.
“I still have that childish feeling of joy and happiness whenever I write,” Pamuk said in his acceptance speech. “(For) me, literature and writing are inextricably linked with happiness, or the lack of it ... unhappiness.”
The writer, whose novels include “Snow” and “My Name Is Red,” was tried earlier this year on charges of insulting his country for acknowledging the mass killing of Armenians in World War I. The charges were eventually dropped over a technicality.
Swedish Academy permanent secretary Horace Engdahl said Pamuk had made his native Istanbul “indispensable literary territory” equal to Feodor Dostoyevsky’s St. Petersburg and James Joyce’s Dublin.
U.S. researchers have long dominated the science awards, and this year swept them for the first time since 1983.
The Nobel Prize in medicine went to Andrew Z. Fire and Craig C. Mello for discovering a powerful way to turn off the effect of specific genes.
John C. Mather and George F. Smoot won the physics prize for work that helped cement the “big bang” theory of how the universe was created. 
Nobel physics committee chairman Per Carlson said that with their findings, “the first step toward understanding the development of structures in the universe had been taken.” 
Roger D. Kornberg won the prize in chemistry for his studies of how cells take information from genes to produce proteins, a process that could provide insight into defeating cancer and advancing stem cell research. His 88-year-old father, Arthur, who won the 1959 Nobel Prize in medicine, attended the ceremony. 
Economics winner Edmund S. Phelps was cited for research into the relationship between inflation and unemployment, giving governments better tools to formulate economic policy. The economics award is not an original Nobel Prize, but was created by the Bank of Sweden in 1968. 
In Bangladesh, thousands of people set aside the nation’s latest political crisis to watch live television coverage of the ceremony in Oslo. 
In Yunus’ home district of Chittagong, several thousand people squatted or stood around a large screen put up at a stadium. People clapped and shouted “Long live Bangladesh” when he spoke a few words in Bengali, the national language, during his acceptance speech. 
The award ceremony in Oslo was followed by a lavish banquet, and some 1,300 people, including Sweden’s royal family, attended a white-tie gala dinner in Stockholm.

TITLE: Egypt Internet Tape Sparks Torture Debate
AUTHOR: By Cynthia Johnston
PUBLISHER: Reuters
TEXT: CAIRO — The grainy video purports to show an Egyptian man, naked from the waist down, writhing in agony as he is sodomized with a stick by a police officer. A handful of other officers stand by watching. 
The video, which circulated on Egyptian blogs last month, has sparked uproar on the Internet in a country where rights groups say torture is commonplace in police stations. Authorities say such cases are isolated and not police policy.
Rights activists say the tape — the authenticity of which has not been confirmed — highlights mistreatment that many detainees face in Egyptian jails, and the apparent impunity with which it can be carried out.
Elijah Zarwan, a Cairo-based consultant for Human Rights Watch, said: “Nobody would be surprised if it were authentic ... While there is nothing to positively identify the tape as authentic, torture is certainly pervasive.”
In the video, the unidentified Egyptian man, his hands bound behind his back and his legs held in the air, screams as he lies on a white tile floor and is abused with what appears to be a wooden broomstick or baton.
Several other people, whose faces are never shown, stand by watching as the man screams: “Never mind Pasha, I’m sorry Pasha,” addressing his abuser with a term commonly used in Egypt to refer to police officers or people of higher social status.
Based on some of the words in the recording, human rights activists think the victim might be a minibus driver.
An interior ministry spokesman declined to comment on the tape. Rights groups said it was consistent with documented reports of torture in Egypt, but several said they did not yet have enough information to confirm it was authentic.
The sodomy video is not the first tape of purported police violence to surface on the Internet in Egypt, but it may be the most jarring because of its explicit sexual nature, activists say. Egypt is a conservative Muslim society.
Lawyer Naser Amin of the Center for the Independence of the Judiciary said he filed a complaint last month with Egyptian prosecutors over the sodomy video and two other tapes that purport to show Egyptian civilians being beaten by police.
He said he felt prosecutors took the complaint seriously, and at least two officers were being questioned.
Local and international rights groups say they have no reason to believe the sodomy tape is not real, although some are hesitant to vouch for its authenticity because the source of the tape is unknown and the victim has not come forward.
“It looks very authentic,” said Ragia Shawky, a medical doctor at Egypt’s Nadim Center, which assists torture victims. “It matches very much with what we have seen and what we know and what was reported and documented by many local and international human rights organizations.”
“What is still to be revealed is who took these pictures. Was it from the police themselves, playing as in Abu Ghraib (prison in Iraq), or was it somebody standing by who wanted to help?”
The low-quality video appears to have been taken by an onlooker in the room, possibly using a mobile phone, activists said.
Shawky said police violence in Egypt often includes beatings and sexual abuse, and the subjects of such abuse are often undressed and threatened with rape or public humiliation.