SOURCE: The St. Petersburg Times
DATE: Issue #1240 (6), Friday, January 26, 2007
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TITLE: Putin Seals Deal On 4 Reactors For India
AUTHOR: By Olesya Dmitracova and Simon Denyer
PUBLISHER: Reuters
TEXT: NEW DELHI — Russian President Vladimir Putin sealed a deal on Thursday to construct more nuclear power plants in India, as Moscow moved closer to its long-term Asian partner through lucrative energy and arms agreements.
Putin met Prime Minister Manmohan Singh on Thursday in an annual summit, and will be guest of honor at India’s Republic Day celebrations on Friday, a reflection of the historically close ties between the two countries.
“Energy security is the most important of the emerging dimensions of our strategic partnership,” Singh told a joint news conference.
“We look forward to a long-term partnership with Russia in this vital field.”
The deal signalled Moscow would not be left behind in the race to win lucrative nuclear contracts with India, a month after U.S. President George W. Bush signed laws effectively ending a ban on civilian nuclear trade with India.
Two Russian reactors are already under construction in India, where rapid economic growth is driving a demand for additional supplies of energy.
Four more reactors will be built at the Kudankulam nuclear power station in Tamil Nadu, according to a joint statement — provided the 45-member Nuclear Suppliers’ Group lifts its restrictions on India this year.
Russia and India also pledged to work together to build more Russian-designed nuclear plants at other sites in India.
The two sides are also working closely to develop other sources of energy.
“We are ready to brave new horizons in fuel energy cooperation,” Putin said. “Russian companies are ready to intensify and broaden co-operation in this area.”
India’s Oil and Natural Gas Corp. Ltd and Russia’s state-run Rosneft signed a comprehensive deal on Thursday for a range of joint energy projects from drilling to retailing, an ONGC official said.
The two companies are already partners in the Sakhalin-1 oil field and are exploring a joint bid for the Sakhalin-3 field as and when it is auctioned.
Russia has also expressed an interest in helping build a pipeline to transport Iranian natural gas to India and Pakistan.
Defence ties are also close, and another area where Russia faces growing competition from the United States.
But for now India is the second-biggest buyer of Russian weapons after China. Up to 80 percent of weapons and hardware now in use by New Delhi have been supplied by Moscow, experts say.
Earlier in the week, Russian Defence Minister Sergei Ivanov said Russia would pitch its MiG-35 combat jet in an Indian tender for 126 fighter aircraft.
Russia is also interested in working with India to develop a fifth-generation fighter, while the two sides signed a deal on Wednesday to jointly design and build a transport aircraft.
Defence Minister A. K. Antony said plans to buy at least 300 Russian T-90 tanks, as well as fighters and military helicopters, were also discussed.
After the Cold War alliance between Moscow and New Delhi collapsed together with the Soviet Union, Russia has maintained a “strategic partnership” with India, supporting its Asian ally’s quest for a bigger international role.
India is reciprocating.
“New Delhi is bending over backwards to ensure good ties with Russia,” Brahma Chellany, an analyst with the New Delhi-based Center for Policy Research, told Reuters.
The Kremlin has promised to back India’s ambitions to become a permanent UN Security Council member, if a decision is made to expand the current five-member group that includes the United States, Russia, France, Britain and China.
However, close political ties have so far failed to ignite a trade boom. Annual turnover stands at around $2 billion, which the two sides aim to boost to $10 billion by 2010.
“The high level of political trust between the two countries should be converted into a greater level of economic interaction,” Putin said.

TITLE: Georgia Claims To Have Foiled Uranium Sale
AUTHOR: By Margarita Antidze
PUBLISHER: Reuters
TEXT: TBILISI — Georgian special services have foiled an attempt by a Russian citizen to sell weapons-grade uranium for $1 million to agents he thought were radical Islamists, a senior Interior Ministry official said on Thursday.
The official said Oleg Khintsagov, a resident of Russia’s North Ossetia region, was arrested on February 1 2006 and a closed court soon after convicted him to 8 1/2 years in prison.
Khintsagov was detained as he tried to sell uranium-235 to an undercover Georgian agent posing as a member of a radical Islamist group, said Shota Utiashvili, who heads the ministry’s information and analytical department.
“He was demanding $1 million for 100 grams of enriched weapons-grade uranium,” Utiashvili said. “This sort of uranium could be used to make a nuclear bomb but 100 grams is not enough.”
Before being arrested, Khintsagov told agents he had another 2-3 kilograms of highly enriched uranium (HEU) in the North Ossetian capital Vladikavkaz, Utiashvili said.
Khintsagov transported the uranium, which was enriched to 90 percent, in plastic bags in his pockets. He refused to cooperate with the investigation.
The uranium’s provenance was unclear. The safety of Russia’s vast stocks of nuclear weapons from smugglers has concerned world leaders since the 1991 break-up of the Soviet Union.
Russia says its nuclear facilities are well guarded. A spokesman for Russia’s atomic energy agency had no immediate comment on the Georgian case.
There have been 16 previous confirmed instances of stolen or missing HEU or plutonium recovered by authorities since 1993, according to a database of the UN nuclear watchdog.
The International Atomic Energy Agency (IAEA) said it expected Georgia to notify it of the new case shortly.
“Given the serious consequences of the detonation of an improvised nuclear explosive device, even small numbers of incidents involving HEU or plutonium are of very high concern,” said IAEA spokeswoman Melissa Fleming.
“Trafficking incidents involving nuclear material point to possible weaknesses and may be indicative of the illicit availability of larger undetected quantities.”
The incident is likely to help Georgia’s case as it argues in the World Trade Organisation that Russia is not adequately controlling its borders with Georgia.
Officials said Khintsagov had discussed selling weapons-grade uranium with three acquaintances, after which security service agents infiltrated the group.
He brought one gram of the uranium to Georgia as a sample and the agents agreed to buy more. He then brought another 100 grams to Tbilisi, at which point he was arrested.
Georgian officials sent samples of the uranium to the United States and Russia for examination. The U.S. Federal Bureau of Investigation (FBI) and Russian officials confirmed the uranium was weapons-grade but said they could not identify its origin.
“[The Russians] said that they could not say where it came from, which surprised us somewhat,” Utiashvili said.
A source in Russia’s atomic energy agency told Interfax news agency Russia was given only a tiny amount to analyse.
In sufficient amounts, uranium-235, which has a half-life of more than 700 million years, can be used to make a nuclear bomb.
Utiashvili said a similar case had occurred in Georgia in 2003, also with bomb-grade uranium, but the investigation was still continuing and he declined to comment further.
Georgia has long complained that smugglers spirit weapons, alcohol and drugs through its breakaway regions of Abkhazia and South Ossetia, which are supported by Russia.
“There is a danger of proliferation of weapons of mass destruction,” Georgia’s Foreign Ministry said in a statement.
This “indicates that ensuring the security of these sections of the border with the participation of the international community has a big importance”, the ministry said.

TITLE: Ski Spat May Dash Sochi’s 2014 Bid
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Kremlin officials were scrambling Wednesday to get Sochi’s bid for the 2014 Olympics back on track after an embarrassing shutdown of the city’s Krasnaya Polyana ski resort drew disparaging remarks from President Vladimir Putin.
Inspectors this week closed the resort’s slopes to skiers at the height of the season, claiming that the ski lift operator’s facilities were unsafe.
The ski lift operator fought back, accusing the regional governor of being behind the shutdown as a way of muscling in on its operations.
An International Olympic Committee delegation is coming to Sochi to inspect its bid next month and will make its choice in July between the Black Sea resort and the two other finalists, Austria’s Salzburg and South Korea’s Pyeongchang.
Putin weighed in on the dispute Tuesday, telling Economic Development and Trade Minister German Gref that he did not share his optimism about Sochi’s “smooth” preparations for its bid, a version of his comments posted on the Kremlin web site said.
When Gref, the government’s point man on the Olympic bid, told Putin that “everything has been working smoothly,” Putin shot back: “I don’t share your optimism, but we will talk about it in greater detail when the press leaves.”
Gref said later that there were “problems with the speed” at which the lift operator, Alpika-Service, was fulfilling its commitments ahead of the IOC inspection.
“We’ll talk to the company,” Gref told reporters later Tuesday in remarks posted on www.sochi.biz, a local news portal. He added that if the company could not prepare for the visit, “we’ll do that for it.”
Putin, whose residence, Bocharov Ruchei, is located near Sochi, has given strong support to the city’s bid.
Kremlin spokesman Dmitry Peskov said Wednesday that the Kremlin knew about the dispute but that Putin’s remarks had nothing to do with it.
Pyotr Fedin, the owner of Alpika, on Wednesday accused Krasnodar Governor Alexander Tkachyov and officials in his administration of trying to close the company down and said Putin was aware of the problems he was facing.
“Putin has real information about what’s going on here,” Fedin said by telephone from Krasnaya Polyana. Speaking about Tkachyov and his officials, Fedin said, “They would like to bankrupt us and shut us down by fair means or foul.”
Fedin owns the land and the ski lifts, while his business associate, Yury Shpalov, owns several restaurants and cafes at the ski resort.
Fedin said the regional authorities had long been eyeing his business, including the land worth millions of dollars and the opportunities that come with it. Under the Sochi Olympic bid, the area would be a designated venue for the freestyle skiing competition.
Because of the dispute with regional authorities, the ski lifts and several restaurants and cafes were shut down for two days, only resuming work Wednesday, Fedin said.
On Wednesday, spokesmen for the Kremlin and Tkachyov’s administration were hard at work dealing with the media fallout from the dispute.
Putin’s comments were “most likely” referring to a $12 billion federal program to turn Sochi into a world-class resort, Peskov said. That program is “complex and difficult” and “there are problems that require closer attention,” he said, adding that the chances of winning the bid were very high.
Peskov praised the Krasnodar regional authorities for helping Russia make the Olympic shortlist, and said the dispute did not mean they were “throwing a wrench into the works” of local businesses.
Officials in Tkachyov’s administration Wednesday dismissed Fedin’s allegations.
Vladimir Prigoda, a spokesman for the regional administration, said the safety inspections at Krasnaya Polyana were part of the federal program to upgrade facilities at Sochi. Out of several venues inspected, only Alpika had problems, Prigoda said.
Maxim Shakirov, an expert at real estate consultancy Colliers International, said land in Sochi had always been popular and the Olympic bid had made it even more attractive, with interest in the area growing over the last couple of months.
Recounting his version of events, Fedin said regional authorities on Friday closed down several cafes and other facilities following a court order.
Fedin said he then stopped the ski lifts Monday for two days to ensure tourists’ safety. Some tourists left, and those who stayed, especially foreigners, were “roaming around confused,” he said.
Fedin claimed that Tkachyov personally asked him to hand over a 50 stake percent in the business three years ago, and that when he refused the authorities started applying pressure on the firm.
Between Jan. 3 and last week, Fedin said, the company underwent at least 25 inspections. “After that we lost count,” he said.
Officials accused Fedin’s firm on Jan. 4 of leaving 800 tourists stranded midair on ski lifts, Fedin said. He said that was “nonsense” because the ski lifts had backup generators.
Fedin complained that plans to open two new ski slopes were now on hold, and noted that Alpika, the largest firm at Krasnaya Polyana, had paid 25 million rubles ($1 million) in taxes last year.

TITLE: New Road-Safety Measures
PUBLISHER: Reuters
TEXT: MOSCOW — First Deputy Prime Minister Dmitry Medvedev on Wednesday unveiled a host of measures to tackle Russia’s shrinking population, including moves to cut road traffic deaths that account for almost 5 percent of the decline.
The population is falling by around 750,000 people per year and President Vladimir Putin has ordered a national program to reverse the trend.
Health experts say key factors are poor diet leading to heart disease, heavy drinking among Russian males and the high incidence of violent deaths.
But Medvedev said a key part of the program would also be to cut accidental deaths on Russia’s roads that number around 36,000 annually.
“This is a very important part of the demographic project,” Medvedev told the parliament when challenged to explain why 100 people die on the country’s roads every day — a toll that makes them some of the deadliest in the world.
“In order to reduce deaths from preventable causes, including traffic accidents, we are proposing a series of measures, first and foremost providing fast, high-tech and qualified medical aid to victims,” he said.
Medvedev, tipped by some analysts to succeed Putin when he steps down in 2008, said a first step would be to provide an additional 600 ambulances equipped with resuscitation equipment to travel to the scene of accidents.
Russia’s demographic crisis is alarming the Kremlin. It fears that if the trend continues there will not be enough people to guard its borders and keep its economy moving.
Birth rates in Russia are creeping up but mortality levels remain high. The average Russian man lives for 58 years, 17 years less than the average German man.

TITLE: Defense Minister Slams U.S. Missile Plan
PUBLISHER: The Associated Press
TEXT: NEW DELHI — Defense Minister Sergei Ivanov on Wednesday harshly criticized U.S. plans to deploy missile defense sites in central Europe, saying Moscow does not trust U.S. claims that they are intended to counter missile threats posed by Iran and North Korea.
Speaking during a trip to India where he co-chaired a bilateral commission on military ties, Ivanov said that neither Iran nor North Korea had or would have the capability to build missiles capable of reaching Europe. “They don’t and won’t have intercontinental ballistic missiles,” Ivanov said at a news conference. “And the question arises: against whom is it directed?”
U.S. authorities said Monday that they had told Polish leaders that the United States wanted to open formal negotiations on the possibility of locating ground-based interceptor missiles in their country.
Prime Minister Mirek Topolanek of the Czech Republic — like Poland, a former Soviet satellite that is now a NATO member — said Washington had asked to base a radar station in the country, which would serve as another part of the system.
Ivanov said Wednesday that the deployment of U.S. missile defense facilities in Poland and the Czech Republic was a decided issue despite official claims that talks were still ahead.
“It’s done mostly to assuage domestic public opinion,” Ivanov said. “The decision already has been made and the talks serve simply as a cover. Like other new NATO members, the Czech Republic and Poland want to show their loyalty.”
Russian officials have said they see the U.S. system as a threat that would upset the security balance and have warned of unspecified measures in response.

TITLE: Tensions Flare Up Over Soviet Memorial
AUTHOR: By David Nowak
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russian lawmakers launched a scathing attack on Wednesday against the Estonian government’s plans to relocate Soviet soldiers’ graves and a monument to the Red Army in downtown Tallinn.
“Estonia is meddling with victims and memorials. This is a historic mistake,” Federation Council Speaker Sergei Mironov said after the upper house voted unanimously in favor of a resolution condemning the relocation, Interfax reported.
In its resolution, addressed to the governments of all former Soviet republics and European countries the Federation Council called a law permitting the relocation of military graves “an attempt to legalize fascism.”
“This will obviously lead to … the further alienation of the peoples of Russia and Estonia,” the resolution stated.
Lawmakers were not alone Wednesday in blasting Estonia’s intention to move the graves and a Soviet-era bronze statue of a Red Army soldier that hails the Red Army as liberators of Estonia from German occupation.
On Manezh Square, hundreds of members of the United Russia party and the pro-Kremlin youth organizations Young Russia and Nashi protested the proposed move.
“The removal of the memorial amounts to the destruction of the memory of the liberators,” Nashi spokeswoman Anastasia Suslova said.
Suslova said that if the statue were removed, a member of Nashi would stand in place of the statue as “a living monument to the liberator.”
In Tallinn on Wednesday, the Estonian parliament considered a bill on the “removal of forbidden structures,” which would have given authorities the right to move the Red Army statue, where many people gather to celebrate Victory Day each year.
Raivo Jarvi, a member and acting spokesman of the Estonian Reform Party, said by telephone Wednesday that the bill would also ban “structures that glorify the occupation of the Republic of Estonia,” such as the Red Army statue.
Jarvi insisted the statue would not be destroyed, however, but moved to a Soviet-era seaside military cemetery. “People are offended by the presence of the monument in the center of the city,” he said.
The bill failed on a second reading, however.
“The bill was rejected in its present form,” Estonian parliament spokesman Gunnar Baal said.
Baal denied that Russian protests had influenced the outcome of Wednesday’s vote. “A few more details need to be added before it comes up for another vote,” he said.
Estonia’s parliament did give preliminary approval Wednesday to a bill that would forbid the public display of Soviet and Nazi symbols, Interfax reported.
Also in Tallinn, members of various Russian organizations submitted a petition to Estonian President Toomas Hendrich signed by some 17,000 residents who oppose the removal of the Red Army statue, Interfax reported.
The remains of several Soviet soldiers are believed to lie in unmarked graves under a bus stop located a few meters away from the statue at a busy intersection in central Tallinn.
On Jan. 10, Estonia passed into law a bill on the protection of military cemeteries, which allows for the transfer of the remains of buried Soviet soldiers to clearly marked cemeteries.
The Geneva Convention, which came into force in 1950, forbids the burial of war victims in unmarked graves. The convention was ratified by Russia in 1954 and Estonia in 1993.
The conflict over the proposed removal has been escalating for several weeks. During a meeting with German Chancellor Angela Merkel last Sunday, President Vladimir Putin said: “Estonia wants a seat in the front row and to gain some kind of advantage.”
Defense Minister Sergei Ivanov and Konstantin Kosachyov, head of the State Duma’s Foreign Affairs Committee, have also voiced their outrage in recent days.
Estonian Prime Minister Andrus Ansip weighed in Wednesday, criticizing Russia for using the threat of economic sanctions to solve political spats.
“The Estonian people will decide for themselves how to arrange their affairs in their republic,” Ansip said, Interfax reported. “Russia’s threats cannot influence the decisions of a democratic sovereign state.”
Also Wednesday, the Council of Europe — one of the addressee’s of the Federation Council’s resolution — entered the fray.
Terry Davis, Secretary-General for the Council of Europe, said in e-mailed comments that Red Army soldiers deserved “respect and gratitude” for fighting against the forces of Nazi Germany.
“On the other hand,” Davis continued, “the Soviet Army was an occupying force in Estonia, which is the reason why some Estonians object to the monument.”
Davis called for the fallen soldiers to be treated with “dignity and respect.”
At the heart of the dispute is the role that Soviet forces played in Estonia after German occupation ended in 1944. Russians take pride in the victory over the Nazis by the Soviet Army, which was hailed as a liberating force.
Many Estonians, however, view 1944 as simply a transition between two occupying armies that marked the start of decades of oppressive communist rule.
As Russian-Estonian relations have cooled in recent years, the statue in central Tallinn has been the site of sometimes-violent clashes between ethnic Russians and Estonians. Demonstrations there have been banned.
“Russian young people gather and wave the flag not of Russia, but of the Soviet Union,” Jarvi said. “For Estonians, the Soviet flag is the same as the Nazi flag. Both occupations were by the same kind of totalitarian regime.”

TITLE: Shared Cells For Foreigners
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Foreigners who are detained on suspicion of criminal activity could soon be waiting out investigations and trials in the same detention facilities as the locals.
The Federation Council on Wednesday approved a bill that would eliminate separate holding cells for foreigners being held in custody for the duration of a criminal investigation or trial.
Under the current version of the law setting out police custody guidelines, foreign citizens cannot be held in detention facilities or prison camps together with Russian citizens.
The bill will now be sent to President Vladimir Putin to be signed into law. Alexander Sidorov, a spokesman for the Federal Prison Service, said living conditions for foreign detainees would not change substantially under the new law.
“There is no difference between the conditions in detention cells for foreigners and those for Russians,” Sidorov said.
According to official statistics, approximately 8,500 foreigners are currently being held in detention facilities in Russia, 99 percent of whom are citizens of former Soviet republics.

TITLE: CEOs Confident Of More Growth Ahead
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: CEOs from all over the world remain optimistic that Russia and other members of BRIC (Brazil, India and China) will see strong economic growth over the year ahead,  PricewaterhouseCoopers said in a survey released Wednesday at the World Economic Forum meeting in Davos.
CEOs’ confidence in business has reached a record level — over 90 percent of the 1,100 CEOs surveyed across 50 countries are upbeat about growth in revenues over the next 12 months. This is twice as many as PwC reported five years ago.
“CEOs around the world are increasingly positive about their ability to expand their companies and take advantage of the opportunities globalisation offers for new markets, new products and new customers,” said Samuel DiPiazza, PwC’s Global CEO.
According to the survey, 93 percent of CEOs expect revenue growth over the next three years. Most of the CEOs expect growth to continue in Brazil, Russia, India and China. Beyond BRIC, the top five countries cited for significant growth opportunities are Mexico, Indonesia, Vietnam, Korea and Turkey.
“Russia remains the focus of great attention on the part of investors in countries all over the world,” said Mike Kubena, General Director of PricewaterhouseCoopers Russia.
“The basic characteristics of the Russian economy have become even more attractive compared to other emerging markets. It is related to the positive structural changes in the economy that we have tried to introduce. I want to stress that this goal will remain important in the future,” the official web site of the Russian president cited Vladimir Putin as saying in December.
Putin estimated GDP growth at 6.8 percent in 2006. “Of course, energy export contributed a lot to this result,” Putin said.
He admitted that along with the opportunities, the rising price of energy is stimulating an inflow of dollars to Russia. “Excessive dollar inflow affects the ruble. A rise in the strength of the ruble leads to an increase in imports and makes Russian non-fuel goods less competitive,” Putin said.
In the first nine months of 2006 the volume of foreign investment increased by 31.7 percent and direct foreign investment by 55.5 percent compared to the same period in 2005. Putin expects foreign investment to grow faster than GDP.
Anton Struchenevsky, economist at Troika Dialog brokerage, forecast GDP growth in Russia to decrease to about 6 percent in 2007.
“Interest rates could become positive, especially in currency markets. As a result, growth in foreign investment will slow down, but we will see more quality investment,” Struchenevsky said.
“Russia will remain a rather attractive proposition for investors. Foreign investment could increase up to $35 billion by the end of 2007, though inflow of speculative capital is likely to decrease,” he said.
However, growing competition for foreign investment means that no country can rest on its laurels, PwC experts warned.
“Besides the BRIC countries, a number of other countries with rapidly developing economies are arousing the interest of investors. It is not enough to rely exclusively on the stable economic growth and increased purchasing power of local consumers, but we must also increase efforts to improve the investment climate and the image of Russian business overseas,” Kubena said.
Nearly three quarters of CEOs saw globalisation as beneficial for both developed and emerging markets. The biggest growth opportunities cited by CEOs are better penetration of existing markets for existing products (23 percent) and access to new markets (21 percent).
Nearly 80 percent of CEOs prefer to fund growth from internal cash flow and less than 20 percent consider using equity markets. Only 10 percent are considering private equity or venture capital financing.
About half of the CEOs surveyed say they have completed or are planning a cross-border merger or acquisition in the next 12 months.
Mutual interests of the Russian and overseas business communities increased in the past few years, Kubena said. Russian companies established their presence in foreign stock and commodities markets while foreign companies expanded their activities in Russia.
“Russian companies are fully in step with the global trend of cross-border consolidation of business and are acquiring assets overseas,” Kubena said. 
However, 73 percent of CEOs indicated over-regulation as a barrier to growth (last year only 64 percent) while Russia is notorious for its bureaucracy.

TITLE: Derivatives Risks Loom Large for Leaders at Davos
AUTHOR: By Stella Dawson
PUBLISHER: Reuters
TEXT: DAVOS, Switzerland — The possibility of a major market crisis caused by financial derivatives is replacing the danger of low interest rates driving asset markets to unstable levels as the top issue on policymakers’ worry list.
In a keynote speech at the World Economic Forum on Wednesday, German Chancellor Angel Merkel said proposals to shed more light on hedge funds operations would be a priority for her leadership of the Group of Eight industrial nations this year. 
“We want to minimize the systemic risks in international capital markets and to raise their transparency — above all, I see the need to catch up with hedge funds,” she told leading business and political leaders.
Hedge funds, which control about $1.3 trillion in assets and often take high-risk leveraged positions in financial derivatives, have doubled in size over the past five years. As private investment vehicles for wealthy individuals, they currently are regulated lightly.
Concerns that hedge funds have taken advantage of low worldwide interest rates to borrow cheaply and invest in high-risk financial instruments escalated after huge losses last September by U.S.-based fund Amaranth Advisors.
It lost $6 billion, or one-third of its assets in energy trades, stoking fears that heavy losses in high-risk investments by such funds could cause widespread harm to the financial system.
More broadly, financial derivatives have exploded in this decade, allowing investors to take highly leveraged positions in markets while spreading risk widely among dealers. The problem is that regulators are unclear whether banks keep close enough track and know the exposures should a trade collapse.
“Risk aspect of the explosion of financial instruments and derivatives, on that issue policymakers are not entirely happy,” Stanley Fischer, governor of the Bank of Israel, told Reuters. 
Fischer regularly attends meetings in Switzerland of central bankers from the world’s largest developed and emerging countries to discuss these risks. 
According to Fischer, dealers in derivatives are sophisticated financial experts and should know the dangers.
But he also said that even dealers and banks are unable to accurately assess the overall risk on their books and that a bad trade could cause a freezing up of the payment and finance system.
“That is an open question and we should be awake to it,” Fischer said.
He cautioned against taking comfort that Amaranth did not cause a market crisis or that no market contagion resulted last May when investors dumped Iceland’s high-yielding assets.
These were “relatively small events” and the financial system has not yet been tested on derivatives, he said.
However, Guillermo Ortiz, central bank governor of Mexico, told Reuters that weathering the Amaranth and Iceland scares suggests that global financial markets may be better positioned to absorb crises than thought.

TITLE: Telecom Purchase
PUBLISHER: The St. Petersburg Times
TEXT: ST. PETERSBURG — Northwest Telecom, the Northwest region’s major landline operator has acquired network operator Petersburg Transit Telecom from the Telecominvest company for $97 million, Interfax reported Tuesday.
The acquisition was approved in December by Northwest Telecom shareholders. Deloitte & Touche estimated Petersburg Transit Telecom to be worth between $96 million to $122 million.

TITLE: Pigging Out
PUBLISHER: The St. Petersburg Times
TEXT: ST. PETERSBURG — Parnas holding company will invest about 1 billion rubles ($37.7 million) into a new pig-breeding farm in the Leningrad Oblast, Interfax reported Tuesday. 
The investment is to be made over the period from 2007 to 2009. The farm will breed 100,000 pigs a year. Parnas is also considering the construction of a fodder plant to provide a stable supply of fodder to the farm.

TITLE: Sweet Investment
PUBLISHER: The St. Petersburg Times
TEXT: ST. PETERSBURG — Razgulyay group revenue increased by 12 percent last year up to 22 billion rubles ($831.6 million), RBC reported Wednesday.
Sugar companies increased revenue by 20 percent up to 10.3 billion rubles and corn companies by 5 percent up to 11.8 billion rubles. EBITDA was reported at 2.9 billion rubles. In corn companies EBITDA increased by 3 percent up to 1.64 billion rubles, in sugar companies by 93 percent up to 1.3 billion rubles.

TITLE: Surgut Share Report Has Banks Slashing Targets
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: MOSCOW — A report that Surgutneftegaz managers covertly hold 72 percent of the secretive oil firm sparked a flurry of speculation among banks Wednesday and led Deutsche UFG to conclude that the firm’s shares had been widely diluted. 
Managers control the firm through a tangle of puppet organizations set up over the last five years, Vedomosti reported Wednesday.
Deutsche UFG, which had held off longer than some banks on marking down Surgut stock, slashed its target price for the company’s shares by 40 percent Wednesday to $1.03, and downgraded the stock from “buy” to “sell.” 
“For three or even four years, this stock was traded on a false assumption of the number of shares,” Deutsche UFG analyst Pavel Kushnir said. UFG had raised its estimated number of outstanding shares from just less than 26 billion to the “market consensus” of 43 billion, he said. This implies a 40 percent dilution in the value of the stock.
Surgut fell 2.24 percent Wednesday.
Citing the national company registry, Vedomosti followed the paper trails of 23 noncommercial entities and their assets to the management board of Surgut.
Surgut general director Vladimir Bogdanov reportedly headed nine of these organizations, which had been established by two direct Surgut subsidiaries: Invest Zashita and Riel. 
Though these nine companies were each founded with 11,000 rubles ($420) in early 2002, by 2003 their joint assets had grown to more than $10 billion, and by the end of 2005 to about $19 billion, the paper reported. This growth closely mirrored that of Surgut, the paper said.
Vedomosti also reported a more intricate chain of ownership, in which a bizarre Surgut-connected “ring” of seven companies owned 14 other organizations, which in turn owned four more organizations, whose combined assets had grown at nearly the same rate as Surgut to reach more than $7 billion in 2005. The four firms at the end of this chain had the same telephone number listed in the national registry, which was answered by a receptionist at Surgutneftegaz, the daily reported.
Last week, Vedomosti reported that 37 percent of Surgut’s stock looked to have been transferred from a subsidiary to the company’s pension fund. Alfa Bank downgraded the stock to “sell,” and marked Surgut down to $1.13. 
Renaissance Capital, which reserved judgment last week and advised investors to “buy,” said its new outlook on Surgut would come out Thursday.
MDM Bank remained optimistic with a target of $1.25 for common shares and a “buy” status for preferred shares. MDM analyst Nadya Kazakova said the bank was counting on a state buyout, either directly or through Rosneft. 
Aton’s Steven Dashevsky said that although he doubted a buyout, the management could be replaced next month when a planned labor strike is set to take place. “But nothing is obvious. [Surgut] still remains as murky as it was,” he added. Aton told investors to “hold” and set a target price of $1.24.
Alfa Bank chief strategist Chris Weafer dismissed the takeover theories, however. “Bogdanov is considered to be very close to the Kremlin,” he said. “We know for sure … that he fiercely guards his independence.”

TITLE: Central Bank Mulls Diversity
AUTHOR: By Gleb Bryanski
PUBLISHER: Reuters
TEXT: TULA — Russia may diversify further the currency structure of its $300 billion in gold and foreign exchange reserves, the world’s third largest, a senior central banker said Wednesday.
“Diversification will happen. It makes sense. We are discussing it,” Alexei Ulyukayev, first deputy chairman of the Central Bank, told a seminar for journalists.
The Central Bank keeps its reserves in four currencies — dollars, euros, pounds and yen. Their exact structure is a secret, but Chairman Sergei Ignatyev said last July that they were composed of roughly 50 percent dollars and 40 percent euros.
Ulyukayev said the bank might fully disclose the currency structure of its reserves this year. Officials have named the Canadian and Australian dollars and Swiss franc as possible candidates for diversification.
Falling oil prices are likely to reduce Russia’s current account surplus, which hit a record $95.6 billion last year, reducing pressure on the Central Bank to intervene on foreign exchange markets to curb excessive ruble appreciation, Ulyukayev said.
“All other things being equal, we may continue to use this instrument. It is very effective,” said Ulyukayev, a liberal economist widely regarded as the Central Bank’s top policy spokesman.
“There are fewer reasons [than there were previously] for us to use the exchange rate mechanism to fight inflation, but we are free to use it.” 
He said the Central Bank wants to move to pure inflation targeting but that this could not happen as long as it runs a managed float of the ruble using a currency basket, composed of $0.60 and 40 euro cents, as its policy guide.
“Inflation targeting combined with a regulated exchange rate is impossible. Targeting requires a free float,” Ulyukayev said.

TITLE: Only Georgia Left Between Russia and WTO Accession
PUBLISHER: Combined Reports
TEXT: GENEVA — Russia has only Georgia in its way to accession to the World Trade Organization after it signed a trade agreement with Costa Rica on Wednesday.
An Economic Development and Trade Ministry spokeswoman said Russia signed the agreement with Costa Rica in Geneva on Wednesday, two months after it struck a milestone deal with the United States on the sidelines of the Asia-Pacific Economic Cooperation summit. 
The bilateral deal is one of a series that Russia must conclude on its path to membership in the 149-member WTO, which sets global trade rules. Any member can demand a bilateral deal with an applicant.
Georgia withdrew its signature from an earlier deal after Russia imposed a ban on its wine and mineral water last spring.
Relations between Moscow and Georgia worsened in the fall as Moscow slapped a sweeping transport and postal blockade on the country in retaliation for the brief arrest of four Russian officers in Tbilisi accused of spying. 
A tentative way out of the impasse was hinted at Tuesday, when the country’s chief epidemiologist said a ban on Borjomi mineral water could soon be lifted.
(SPT, AP)

TITLE: Kazakhstan Freeze
PUBLISHER: Bloomberg
TEXT: ASTANA — Kazakhstan’s government imposed a two-year ban on selling oil field licenses amid concerns about the growing share of Chinese companies in the nation’s oil industry, Energy Intelligence reported Thursday, citing Kazakh Energy Minister Baktykozha Izmukhambetov.
Under recently appointed Prime Minister Karim Masimov, the government is cracking down on foreign oil investments such as the Eni SpA-led Kashagan project, the news service said.

TITLE: Transneft Plans
PUBLISHER: Bloomberg
TEXT: MOSCOW — Transneft, Russia’s oil pipeline monopoly, is considering increasing domestic capacity by 1 million barrels a day after a spat with Belarus cut transit shipments to Europe, Neftecompass reported.
State-run Transneft plans to build a 950-kilometer (600-mile) pipeline from near the Belarus border to Russia’s Primorsk oil terminal on the Baltic Sea, the trade publication reported Thursday, without saying where it got the information.

TITLE: Uralsvyazinform Profit
PUBLISHER: Bloomberg
TEXT: MOSCOW — Uralsvyazinform, Russia’s fixed-line telephone monopoly in the Urals region, expects its 2007 profit to rise 55 percent, news agency Interfax reported Thursday, citing company deputy chief executive officer Valery Chernyshev.

TITLE: Building a Successor-Safe System
AUTHOR: By Alexey Bessudnov
TEXT: With the presidential election scheduled for March 2008 drawing ever closer, the amount of time political commentators and analysts are devoting to the “succession problem” continues to increase. Most of attention is focused on whom President Vladimir Putin will choose to replace him.
Will it be Dmitry Medvedev or Sergei Ivanov who lands the top spot? Will the balance tip in the direction of the Kremlin’s more economically liberal wing or the siloviki? Or perhaps everyone would be better off if Putin remained in office for a few more years? Another possible, more democratic scenario is one in which Putin opts not to make a final decision at all, instead providing his own list of candidates and calling on the electorate to choose from among them.
Leaving all of this guesswork aside, Putin faces a more serious problem ahead than the choice between individuals and clans. The 2008 problem is not so much about who will lead the country after Putin, but about how that person will govern and what political course he (or she, not to forget St. Petersburg Governor Valentina Matviyenko) will follow.
In other words, regardless of who is chosen and how the choice is made, how can Putin ensure that the changes he has put in place since taking office in 2000 will not be undone following 2008? Throw in reasonable concerns on the part of Putin and his close allies over their own security — both economic and legal — and you have to wonder how risky it is to put a lot of trust in a successor. What if the new president opts for a new course and makes some corrections in realms of policy and wealth distribution? We only have to take a look at where some of the people who were so close to President Boris Yeltsin in 1999 have ended up to understand the concern.
The decision-making process in Russia is hypercentralized and it is no secret that the presidential administration is able to influence, if not outright control, most decisions made within the political system. The State Duma, the government, the judiciary and political parties are independent actors right up to the point where the Kremlin wants something done.
Ironically, the more centralized a system like this is, the more unstable and difficult to control it often becomes. When there is only one center of decision-making authority, anyone gaining control of it has won the whole game.
So what happens if the successor can’t work with the elite group he or she is supposed to lead? In this case, the new president either consolidates his or her position and wins over competitors, or a kind of turf war will erupt, complete with the return of all the old infighting and noncompliance from regional leaders and oligarchs. Either eventuality would be negative for Putin.
In the field of political economy, this problem is referred to as the “commitment problem,” and two political scientists, Terry Moe and Murray Horn, have spent significant time studying the phenomenon in the relationship between legislators and governmental bodies in U.S. politics. Legislators set up these bodies and, therefore, are in a position to control them. But the party in power is always aware of the fact that it could lose that power in the following elections, at which point its opponents would be in a position to simply eliminate these bodies and reverse the policy. To prevent this from happening, legislators create civil service rules and regulations that render these governmental bodies more independent from legislative control.
We can apply the same kind of logic to an analysis of the succession problem. Following the old saw about not putting all your eggs in one basket, it would make sense to try to prevent the successor from having too much power and being able to operate without support from other political actors and institutions. This means that some sort of system of checks and balances must be created to provide the political system with both flexibility and stability. This function could be performed by the Constitutional Court, the Prosecutor General’s Office, a political party or a combination of actors. The problem is that the Kremlin can’t wait for a crisis to move, but would have to implement such measures now if they are to be visible and survive in the long term. To make the transition smoother, the system must be decentralized beforehand. New “veto players” — a term coined by another political scientist, George Tsebelis — have to be created who can act as a brake on any president trying to impose decisions on the current political elite.
It would be unrealistic, of course, to expect a significant, rapid decentralization of decision making under current political conditions. This would run directly counter to the entire political dynamic of the last seven years, and the introduction of this kind of decentralization just one year before the presidential election would likely lead to chaos. All the same, the creation of the party “A Just Russia,” often referred to as the second party of power, is an indication of some recognition on the part of the powers that be that some decentralization is needed within the political system.
The paradox is that politicians do not need to have good intentions in the process of creating democratic institutions. In most cases these institutions have come into being as the unintended consequences of political actions. Russia’s rulers are neither the KGB monsters nor the heroes trying to save the country that they are labeled as by different sources. At the most basic level, they are rational political actors pursuing their own interests within a particular institutional environment. They have nothing against democracy as long as it falls in line with their interests.
Sometimes this is the way it works.

Alexey Bessudnov is a doctoral student in sociology at St. Antony’s College, Oxford University.

TITLE: Civilian Control, Army Style
AUTHOR: By Alexander Golts
TEXT: It is unfair to say that Russia’s leaders still live according to concepts inculcated during their KGB training and are incapable of learning anything new. A good case in point is the recent open-mindedness demonstrated by Defense Minister Sergei Ivanov.
Seven years ago, when he was secretary of the Security Council, Ivanov spoke at a seminar devoted to armed forces development. After listening to presentations by a number of prominent analysts, Ivanov, whose subordinates had already formulated the council’s new military doctrine, said the advice was pretty much superfluous.
A year later, Ivanov was named Minister of Defense. Despite the fact that he is a retired security services general, this was branded a civilian appointment. It became clear last week, however, that Ivanov cannot guarantee civilian control of the army on his own. From now on, a new proposal suggests, civilian oversight will be performed by the Public Council created last November under military auspices. Ivanov told the council at its first meeting last week that a major part of the group’s job would be to create an atmosphere of openness between the army and the public.
A leadership that wasn’t willing to listen to anybody on the subject seven years ago is now prepared to hear recommendations from a group of actors, singers, businesspeople and journalists. Even Valentina Melnikova, head of the Soldiers Mothers’ Committee, is part of the group, even though Ivanov recently accused the organization of taking money from foreign sources to promote the collapse of Russia’s military.
The council’s recommendations may not amount to much anyway. Even with Melnikova, there are few members who understand the problems within the army. The leading voices at the last meeting repeated the same hackneyed excuses for conditions in the military we are accustomed to hearing: Hazing is a result of the moral shortcomings of society in general; criminality in the armed forces can be eliminated with patriotic education; and suicides among servicemen are mostly due to unrequited love.
Another public association chimed in last week with suggestions concerning military policy. The Academy of Military Sciences held a conference devoted to developing a new military doctrine. The report from the academy’s president, General Makhmut Gareyev, stated that “it is impossible to separate nonmilitary from military threats, and both should be considered as an organic unity.” This means that anything can be interpreted as a threat, from the colored revolutions that so frightened the Kremlin to general criticism of the authorities.
Even more interestingly, Gareyev said the United States was no longer able to “bear the burden of world leadership,” and that it is time for Russia to step forward to fill the role of a geopolitical arbiter. Given the academy’s tradition of focusing on “large-scale” military operations, this new doctrine is a little alarming, if not provocative.
It’s not hard to understand the new focus the Defense Ministry is paying to getting the public involved. The armed forces are in such deplorable shape that presidential hopeful Ivanov has to find someone with whom to share the blame. This also is part of the reason why the ministry is interested in hearing from the Academy of Military Science with regard to military doctrine.
But neither of these agencies is particularly suitable as a civil society body. Only one with real authority can effectively exercise civilian control and formulate military policy. In a democratic state, that role is exercised by the parliament. The vertical integration of power under President Vladimir Putin, however, has reduced the State Duma to nothing more than a subsidiary of his presidential administration. It is unable to perform this oversight function. The body that has been created to assume this role is referred to as the Public Council in an effort to mask its impotence. If it works, be prepared for this chamber model to be followed in a number of other government departments.

Alexander Golts is deputy editor of the online newspaper Yezhednevny Zhurnal.

TITLE: Boom town
AUTHOR: By Victoria Donovan
PUBLISHER: Special to The St. Petersburg Times
TEXT: Rich in oil and hugging the shore of the Caspian Sea, Baku is a city whose history has been punctuated by invasions from competing foreign powers, each of which have left their individual mark on the town. 
Baku, the capital and the largest city of the former Soviet republic of Azerbaijan, is located on the southern shore of the Apsheron Peninsula that curls like a claw into the Caspian, mid-way between the borders of Russia and Iran.
The history of the struggle between the Persian and Russian Empires for control over the region’s abundant resources is written in the city’s architecture and the sun-baked fortress at the center of the city stands in stark contrast to the concrete Soviet blocks which nudge its walls.
The maze of lanes and staircases making up the old town is the most charming area of the city. Here you can wind your way through narrow streets lined with white-washed stone houses and peer through the vine-bordered doorways to catch a glimpse of domestic life. Meandering through cobbled lanes will lead you past the impressive Palace of Shirvanshas. 
Built in white stone and housing the burial chambers of the Shirvansha dynasty, the shah’s mosque and minaret as well as the ruins of an old bath house, the palace dates from the 15th century when the state’s capital was moved from Shemakha to Baku. 
Venturing further will bring you to the Maiden’s Tower, which houses an incongruous museum of miniature scale models but is worth passing through to get the stunning panorama of the city from the roof. From here the kaleidoscope of foreign influences is most obvious, while the numerous cranes and sprouting new constructions at each street corner pay dramatic testament to the massive investment currently pouring into the city. 
On the road back to the main town, passing through a bazaar of insistent carpet vendors, it’s worth dropping into the picturesque karavanserai (ancient inn) now home to a trendy bar where belly dancing and tea-drinking are served up to foreigners eager to sample Baku’s local charms. 
For another stunning view of the city, you can ascend the mountainside in an old-fashioned funicular railway which claims to depart every 15 minutes, but in reality depends on custom and the whims of the operating staff. 
A short journey deposits you at the entrance of Martyrs’ Lane (formerly Kirov Park), a commemorative burial site dedicated to the war heroes of Azerbaijan. 
The cemetery contains a controversial memorial dedicated to the British soldiers who died fighting the Turkish-Islamic army led by Enver Pasha in 1918. However since the Turks have become the Azeris’ political allies against the Armenians, in the Nagorni Karabakh war, the memorial has become contentious: some Azeris have reinterpreted the British as the enemy rather than the defenders of independence. 
The occasional daubings of anti-British graffiti throughout the site attest to the change of attitude that has taken place. However, a general atmosphere of silence and peace dominates the park. 
The site also contains an understated memorial to the Turks who died fighting against the Soviet invasion in 1920 but the majority of space is dedicated to those who died in clashes with Armenia over the separatist republic of Nagorny Karabakh from 1988 until the present day.
The atmosphere in this part of the cemetery has been carefully choreographed to inspire reverence and reflection. The stepped rows of tombstones, each engraved with images of the deceased in military uniform, are thrown into intermittent shadow and light with impressive effect by the regularly planted pine trees. The host of people milling about and elaborate wreaths and banners that decorate the graves illustrate the continuing emotional resonance of the conflict in Azeri society.
Back in the center, the chaotic clamor of the local bazaars couldn’t be further from the melancholic atmosphere of the war memorial. A wonderful feast for the senses, the bazaars are sources of exotic and unfamiliar local produce which can be purchased at foreigner prices or market value after a protracted haggling session. Stalls bow with the weight of vibrantly colored herbs and spices hanging from the walls in plastic bags, Coca-Cola bottles stuffed with vine leaves and mounds of dried fruits and pulses. Great pyramids of pomegranates and stalls stacked with various fresh, green herbs (consumed in vast quantities by Azeris) are recommended purchases for their delicious freshness while a vitamin-boost of fresh pomegranate juice extracted using a prehistoric vice-like contraption is a good way to boost waning shopping spirits. Live poultry can also be found among circles of bidding locals while a closer inspection of the back stalls reveals the Azeris’ idiosyncratic preoccupation with tropical fish which abound in magnificent variations and colors in the stacked tanks.
On the way back, it is worth passing along the wide Continental Boulevard (known as “the boulevard of oil workers”) which traces the coast of the Caspian and, complete with a slowly rotating Big Wheel and test-your-strength games, smacks of Victorian England more than the Caucasus. Seemingly the location of choice for young Azeri lovers, you’ll find it difficult to find a free bench to enjoy the beautiful skies at sunset, but strolling here at dusk is nevertheless a pleasure not to be missed. 
Walking past the yacht club, which houses several feats of engineering that would not look out of place in the harbors of St. Tropez, the affluence of the city is strikingly apparent. But only by following the boulevard further to the oil fields, where the life-blood of the city is extracted and pumped across its territory, is it really possible to understand the wealth Baku currently sits on. 
From the Boulevard, you can either walk or flag down a taxi to take you the ten-minute ride into the heart of the oil fields. 
Here the relentless creaks and rheumatic movement of decrepit pumps, placed every 20 meters as far as the eye can see, create an eerie atmosphere of abandoned industrialization and inspire a sense of awe for the black rivers flowing beneath your feet. 
The pitiful state of the cracked pumps is surprising and the black gunk oozing from the taped-up joins in the pipes collects in iridescent puddles, which are hard to avoid as you explore. 
A shanty-town of workers’ houses and refugee residences nestle in the mountainside overlooking the sprawling oil fields — cramped and lacking elegance, these box-like constructions are in sharp contrast to the elaborate art nouveau of the “oil boom” buildings built by foreign investors at the end of the 19th century, giving the city its distinctly west European character.
In Baku, the cultural legacies of imperial rule have woven together to create an architecturally curious city, which is greater than the sum of its parts. 
However, this unique character is under threat from the fast-flowing capital and unsound development policies currently challenging the aesthetic integrity of the town. 
Thankfully the old city center was removed from danger when it was placed on UNESCO’s World Heritage Site list in December 2000. But the rest of the city remains up for grabs and mirror-fronted sky-scrapers seem unfortunately to be the order of the day. 
As a result, the patchwork of foreign influences, which currently gives the city a particular charm and historic interest, may soon be lost to the zealous plans of the new generation of property developers bent on constructing a modern Caucasian metropolis.

HOW TO GET THERE: 
Cheap flights are available from AirBaltic (www.airbaltic.com) flying from Riga to Baku every day, or a slightly pricier option is to fly direct from St. Petersburg with Aeroflot. Baku airport is a 40 minute drive from the city center so expect to pay 20 to 30 dollars for a taxi into town on arrival. 

WHERE TO STAY: 
Hotels: 
Hyatt Regency Baku Hotel, 1 Bakuhanov Street. Tel: +99 412 981234
Intourist Hotel, 63 Neftchiler Avenue. 
Tel: +99 412 4184281
BakuPalace Mini-Hotel, 15 Islam Seferli Street. Tel: +99 412 4976271, 4991071
East Legend Panorama (Budget) Hotel,  38 Khanlava Street, Bailovsky District. Tel: +99 412 4997717

WHERE TO EAT
AZZA, 1 Islam Safarli Street. Serves fusion and nouvelle cuisine and a selection of delicious Asian specialities including teppanyaki dishes.
Mugam Club, 9 A. Rzayev Street. Traditional karavanserai that serves good quality food accompanied by belly dancing, and traditional Mugam music.  
Café Mozart, 2 Aziz Aliyev Street. An institution, not just for ex-pats, set up by an Austrian in 1992, especially nice in summer when you can sit on the terrace and people-watch, All-you-can-eat lunch buffet for about five dollars.

TITLE: Chernov’s choice
TEXT: The bad news this week is that Ilya Kormiltsev, the head of the radical publisher Ultra Kultura and former songwriter for the Soviet rock band Nautilus Pompilius, has been hospitalized in London, diagnosed with cancer of the spine in its worst stage.
His publishing house was under permanent attack from the authorities — accused, alternatively, promoting drug use, or spreading pornography.
“There is only one problem: the neuroticism of the authorities, who see a threat to themselves everywhere, often exaggerating its scale,” he said in an interview with The St. Petersburg Times last year.
“These guys never imagined they could make so much money for themselves, and that’s why they’re nervous. They act like somebody who finds a suitcase with a million dollars and gets scared of being hunted down the rest of his life. That’s why they’re so easily, disproportionately irritated. The Ultra Kultura publishing house isn’t even the most striking example — Limonov is the most striking example of the authorities’ disproportionate reaction to an irritant.”	
On the same day as news about Kormiltsev’s illness was reported, Ultra Kultura announced on its web site that it is to close its “office in Moscow.” The publisher’s web site was down as this newspaper went to press.
A fund to sponsor Kormiltsev’s treatment, estimated as costing $19,700, has been launched by his family. See doktor-snaut.livejournal.com for the account details and contact information.
New York’s acclaimed gypsy-folk band Gogol Bordello comes to Russia, but not to St. Petersburg. Fronted by Ukraine-born singer Eugene Hutz, the band, which has not performed in Russia before, will play at Moscow’s B1 Maximum on Sunday.
Formed in 1999, Gogol Bordello got a boost in 2005 when it released its hugely acclaimed fourth album, “Gypsy Punks: Underdog World Strike,” and Hutz co-starred opposite Elijah Wood in the film “Everything Is Illuminated.”
Speaking by telephone from New York, Hutz said that from the beginning, he had never really targeted the Russian audience.
“I lived in the Puerto Rican neighborhood, you know, and so my whole context was totally different,” said the 34-year-old singer. “I didn’t really have that much of a Russian connection. So my angle was completely different.”
Meanwhile, the first international artist of some stature to be confirmed as performing in St. Petersburg later this year turned out to be Sean Lennon. 
The 31-year-old Lennon released his most recent, second album “Friendly Fire” last year.
The concert will be the first event promoted by Monoplan, the new concert agency organized by musician Seva Gakkel, the former Akvarium cellist and founder of the seminal local alternative club TaMtAm. 
Lennon is scheduled to perform at Baltiisky Dom on March 7.
— By Sergey Chernov

TITLE: Shock and awe
PUBLISHER: The St. Petersburg Times
TEXT: The London press greeted the arrival this week of Valery Gergiev, the artistic director of St. Petersburg’s Mariinsky Theater. As the new principle conductor of the London Symphony Orchestra, his presence was met with a mix of shock and awe.

The Independent:
Broadly speaking, there are two kinds of conductor — the intellectual and the inspirational. Gergiev sits squarely in the latter category, meaning that when and if he’s thoroughly prepared (and it’s a big “if”), when and if the fires ignite, then there’s no touching him. His debut series — Stravinsky, Debussy, Prokofiev — finds him in a familiar place, though I imagine you could count on one hand, if at all, the number of times he will have opened a concert with Stravinsky’s weirdly extravagant mini-cantata The King of the Stars…
Gergiev himself seemed puzzled, his head in the score. Still, the LSO Chorus’s intrepid tenors nailed the opening cry of “Zvezdoliki” (“The star-faced one”) and a shimmer of violins gave notice of mesmerising pianissimi to come.
If The King of the Stars represents a kind of planetary meditation, then Prokofiev’s Scythian Suite is the universe exploding. Its paganistic fire and ice brought terrific virtuosity and untold decibel levels from the LSO. The trenchancy of the strings in the second movement’s “Dance of the Black Spirits” will have been felt as well as heard from the very back rows. The final sunrise was the aural equivalent of looking straight into the sun.
Creating atmosphere is one of Gergiev’s great gifts as a conductor. Note how he avoids making pauses between movements, remaining poised and primed for the next sounds we hear. The Scythian Suite, though, is primarily about revelling in the sheer noise it makes. And, my goodness, it did… So, a splashy first half. But no sooner had Gergiev prepared the way for our first steps into the enchanted garden of the ogre Kashchei at the start of Stravinsky’s The Firebird than the magic descended. His voluptuous reading of the complete ballet excited every fluttering nuance of this quixotic and beautiful score. Its folkloric earthiness was uncommonly vivid, with sensational work from the LSO wind choir and a depth of string tone that opened up at least one unimaginable soundscape in the “total eclipse” of the final scene. Here’s hoping that more where this came from will mark out Gergiev’s LSO adventures. 
— Edward Seckerson

The Guardian:
Anyone at Valery Gergiev’s first concert as principal conductor of the London Symphony Orchestra could not fail to be struck by the air of myth-making that hung over the proceedings. Works based on Russian legends dominated the program, underscoring the point that the maestro’s status is, in some quarters, already considered to be legendary.
How the partnership will develop — and whether the Gergiev myth will prove sustainable — remains to be seen. In this instance, both he and the LSO took a while to strike form. Gergiev opened with Stravinsky’s brief, hushed cantata The King of the Stars, its nebulous mysticism undermined by some effortful singing from the LSO Chorus. Thereafter, however, brutality reigned with Prokofiev’s noisy Scythian Suite, a performance of mechanistic exactitude, though a crepuscular poetry was discernible in those rare moments when Prokofiev turns down the volume. The violence continued with Stravinsky’s Concerto for Piano and Wind Instruments…
After the interval, however, came Stravinsky’s Firebird, and scepticism was promptly brushed aside. Gergiev never lost sight of the score’s epoch-making radicalism, ushering us into a soundscape in which beauty and savagery were frighteningly entwined. The playing was spine-tingling, and the orchestral colours whirred and fused with kaleidoscopic brilliance. A great performance: “magic” is, for once, an entirely appropriate word with which to describe it.
— Tim Ashley

The Times:
Flu had laid him low for his first official engagement as tsar of the London Symphony Orchestra, but everyone knew that this was Valery Gergiev’s real coronation. An ambitious new concert strand — Prokofiev, Stravinsky, Debussy — and a tangible buzz. Giant screens in the concert hall gave us tributes from the players; the principal tuba touchingly revealed that his new gaffer is a “poet, painter and alchemist.” 
To which list of creative talents you can also add magician. At half-time the alchemy was off and the temperature tepid. At full-time the crowd were on their feet and the orchestra sounded like world-beaters. And even this sceptical serf was cowed into submission… 
The tsar is on his throne, and whoever said a change was as good as a rest was very much mistaken.
— Neil Fisher

TITLE: Comrade cowboy
AUTHOR: By Aaron Hamburger
PUBLISHER: Special to The St. Petersburg Times
TEXT: Few countries are as rich in their literary heritage as Russia. Any nation would be glad to have among its literary progenitors even one author with the commanding epic scope of Leo Tolstoy, or a darkly prophetic visionary like Fyodor Dostoevsky, or a wise, observant humanitarian like Anton Chekhov. Now throw in Nikolai Gogol, Alexander Pushkin, Ivan Turgenev, Ivan Bunin, Isaac Babel and countless others, and you’ve got an embarrassment of cultural riches that can be matched only by the artistic output of Renaissance Italy.
Then why is it that of all these influences to choose from, so many contemporary Russian writers ranging from enfant terrible Victor Pelevin to Russian-American immigrant Gary Shteyngart seem to have apprenticed themselves to that sui generis oddball Mikhail Bulgakov? (For those who need a quick reminder, Bulgakov was the loopy surrealist who authored “The Master and Margarita,” a novel that features Pontius Pilate and a satanic cat among its protagonists.) Perhaps Bulgakov’s shadow looms large today because surrealism may just be the best fit to capture the rollicking upheavals of Russia’s recent history. Who but a surrealist writer could dream up such characters as red-faced Boris Yeltsin famously doing the twist during his last campaign for president? Or charismatic capitalists like Boris Berezovsky, who seemed to rise and fall as sharply as Internet stocks during the ‘90s dot-com boom in the United States?
Yuri Druzhnikov’s “Madonna From Russia,” a tale of ex-Soviet bigwigs who find themselves on the wrong side of history, fits squarely within the Bulgakov tradition. This novel’s comic elements include a 96-year-old vixen whose sexual charms still prove irresistible to men, an island that magically appears in the Rio Grande during a hurricane and an embittered Russian immigrant to the United States who wants to turn the above-mentioned island into an independent country and is prepared to declare war on the United States to defend its territorial integrity. 
Watching all this from the sidelines is the book’s narrator, a mildly cynical Russian emigre who’s now a professor of Russian literature in California. (For what it’s worth, Druzhnikov himself teaches at the University of California at Davis.) This unnamed narrator is drawn seemingly against his will into the mayhem when one of his students, and then one of his colleagues, falls in love with the nonagenarian Lily Bourbon — despite the fact that neither of them speaks Russian and Lily barely speaks any English. The narrator’s ironic running commentary provides a counterpoint of sanity against the insanity, but he’s basically a shadow compared to the book’s strongest character: Lily, the ultimate survivor. 
During the Soviet period, Lily slept her way to the top of the literary world. She began by typing manuscripts for the notable writer Andrei Bourbon, had an affair with him, and then, after marrying him, published his work with her name on it. Eventually her reputation eclipsed that of her husband. While Andrei became a literary outcast, Lily worked every angle she could to become a socialist icon, and eventually earned the title of poet laureate for doggerel verse such as: “I want to sing your praises, social-ISM! / Where can a rhyme for this festive word be found? / That rhyme would be — commun-ISM! / That’s where I’d surely like to fly right now.
Now in her late nineties, Lily has arrived in the United States where she expects to continue her career. “For some reason that was incomprehensible and exasperating to Lily Bourbon,” Druzhnikov writes, “people in America continued to speak English despite the fact that she had arrived.” Unhampered by her advanced age or by her inability to understand the language and mores of a new country, Lily storms through the book like a force of nature. She marries, takes on several lovers, works for a brothel, performs the tango with an enviably straight back, and announces her plan to dance with the U.S. president by the time she reaches the age of 100. While Lily’s on the scene, we turn the pages eagerly, wondering what she’ll do or say next.
Lily’s such a dynamo that when she disappears from the narrative, roughly halfway through, our attention lags. Druzhnikov puts Lily’s story on hold to tell us about Khariton “Kharya” Lapidar, a former professor of “scientific communism” in Odessa who’s having trouble adjusting to life as an immigrant in Texas. His nostalgia for the good old days and his inflated sense of self-worth don’t exactly go over well in the land of ten-gallon hats and cowboy boots. However, Kharya’s luck seems to change when, in the aftermath of a hurricane, he discovers an island in the Rio Grande, exactly halfway between the United States and Mexico. He dreams of claiming this territory for a new communist state for Russian immigrants, but needs money to pay for registering the land in his name.
Kharya’s a misguided dreamer in the Don Quixote mold, but he’s also something of a whiner and bore. Druzhnikov attempts to breathe some life into Kharya by giving him grotesque eating habits and a smart mouth. Still, somehow the character’s blustering and flustering can’t quite measure up to Lily’s outlandish scheming and black wit.
Toward the end of the book, Druzhnikov ties his two narrative strands together by bringing back the freshly widowed Lily to marry Kharya. This unlikely duo unites to use her inheritance from her dead American husband to buy the newly formed island in the Rio Grande (now called the Kingdom of Grande-Bravo), and to establish Lily’s reign over it as Queen Lily the First. It’s a relief to see her back in the story, but somehow Lily doesn’t seem quite so vibrant or interesting as before. Her unexplained absence from the narrative creates a longing for her that her return doesn’t fulfill, so the novel ends on a note of disappointment.
Druzhnikov, who was nominated for the Nobel Prize and can count such luminaries as Isaac Bashevis Singer, Alexander Solzhenitsyn and Heinrich Boll as fans, has a knack for inventive, anarchic narratives and larger-than-life characters. He also knows how to tell a good joke, particularly at the expense of lazy American students. Here he describes the narrator-professor, looking at a sea of sleepy faces in a lecture hall:
“I could tell by some of my students’ eyes that my words were burbling in their ears like bubbles in a boiling kettle or hissing like the surf on the Pacific Ocean not so far away. … One of them half reclined, draping her legs over the back of the chairs in front of her like someone on a gynaecologist’s couch. To my left a young single mother took out her breast and put her nipple into her infant’s mouth. The mother was white, the little baby was black. He made a face, spat it out and squinted his eyes at me: evidently the baby was more interested in the problems of Russian symbolism than he was in milk.”
Though Druzhnikov’s latest book doesn’t all hang together, its sporadic comic rewards in lines like the ones above provide ample entertainment to make it worth reading.

Aaron Hamburger is the author of the short-story collection “The View From Stalin’s Head” and the novel “Faith for Beginners.”

TITLE: Side by side
AUTHOR: By Andrei Vorobei
PUBLISHER: Special to The St. Petersburg Times
TEXT: The National Center of Photography has simultaneously launched two shows — “At Both Sides” and “Positive Processes” — which, apparently, have nothing in common except the gallery space they share. 
While both are worth visiting, placing them side by side is a regrettable lapse of taste since it is awkward to have disturbing documentary photography from a recent war next to an idyllic demonstration of technical photographic virtuosity defined as “art for art’s sake.” But, as often in life, arcadia co-exists with anarchy. 
“Positive Processes” occupies the major part of the exhibition. It deals with old printing techniques used in fine art photography in the 19th century: gum-arabic pigment print, bromoil, kalotype, gum print and the like, to all of which one of the photographers, Andrei Medvedev, granted the epithet “noble.” Although made in the last couple of decades by contemporary artists, they are “precious” in same sense as antiques; hand-made, complex and often useless, in which all aspects — be it image, technology or material — are equally significant. 
“Linen or cotton paper — the difference is minor, but these slight nuances become very important,” Medvedev said. “The finest differences in structure and in light reflection, the characteristics of grain in many ways affect the tactics and temperament of photographer.” These photographs are works of art rather than documents. To make the whole picture clear, all photographers — Timur Novikov, Denis Yegelski, Medvedev, Yegor Ostrov, Stanislav Makarov, Sergei Sveshnikov, Denis Alexandrov, and Sergei Klimov — are linked with Novikov’s legendary New Academy of Fine Arts. One of the city’s most significant movements in the 1990s, the school advocated and implemented classical aesthetic principles within contemporary art, including the exploration and practice of traditional art techniques. Therefore the subjects of the images are as culturally-charged as their techniques are esoteric: ancient heroes, Ludwig II of Bavaria, nudes, architectural details, vanity still-lives — although there is a good number of marvelous industrial landscapes. 
The artistic manipulation results in an absorbing confusion of media: whether this or that image is a drawing or a photograph or even a newspaper cutting. 
“In the time of high technologies, everyone can follow in the line of medieval alchemists and, using a wide repertory of professional secrets, find their own definition of beauty,” Medvedev said. 
But once you step into the last exhibition hall at the center, you discover the total irrelevance of such discourse.
“Both Sides” refers to the two parties in last year’s war between Israel and Lebanon. The display features documentary shots by two Russian photographers, Denis Sinyakov (Agence France Presse) and Sergei Ponomaryov (The Associated Press) who observed the conflict. The show is very straight, cool and fragmentary. We don’t see the war as a grandiose narrative, but only as individual stories; we don’t see death but it is always hinted at. We have seen many such images in newspapers, on the Internet or on TV, but the images remain impressive. The most powerful pictures are those catching the gestures and faces of people who emotionally reflect on where they have found themselves, what they are doing or what they have lost — whether it is soldiers taking a smoke, children observing their destroyed playgrounds or women at funerals. Judging by the photographs, the two nations are alike in their mourning of the losses of war, but, to the same degree, differ in regard to its purpose.

“Both Sides” and “Positive Processes” run through Feb. 20 at the National Center of Photography. Www.ncprf.org

TITLE: Music revolution
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Revolution, the popular dance club located in the bleak, decrepit buildings of Apraksin Dvor, a crime-infected marketplace in the city’s center, launches a program of live music on Friday — a refreshing move because the city’s club scene has hitherto developed a trend away from live music in favor of DJs and discos. 
“The club’s administration sees it as a broadening of its format, as one more service the club offers,” said the club’s concert director Leonid Novikov. “It also fills the [early] evening hours which is good in a commercial sense as well.”
To be launched with a show called Venus in Furs, after the Velvet Underground’s classic song and featuring some of the new local acts such as garage band King Kongs and electro-punkers Yogo! Yogo!, the club will concentrate on rock acts such as art-rockers NOM (scheduled to perform on Feb. 9) and bluesy cabaret act Billy’s Band (Feb. 14) as well as electronic music.
According to Novikov, the frontman of goth-rockers Para Bellum and a former deputy editor of the local rock magazine Fuzz and the Russian edition of Rolling Stone, the club will host some international acts such as the Norwegian “aggrotech” band Combichrist.
In existence since 2001, Revolution has so far been irrelevant to rock fans since it hosts dance parties that reportedly gather up to 1,000 clubbers a night. According to Novikov, the nightclub audience has changed recently growing more adult (25-30), and the place moved from techno and R&B to house and retro pop a year ago.
The massive club, occupying 1,500 square meters, is located on four levels, and features two dance halls, a karaoke room, a restaurant and four bars. The place’s special attraction is a glass room on top, with an impressive view over the city’s roofs.
For live shows, the second-stage dance hall was transformed into the stand-up concert room, equipped with a larger stage and an updated PA system, providing sound that can compete with the best local clubs, according to Novikov. It can host 350 to 500 fans.
While Red Club is notorious for closing bars and kicking the public away as soon as its concerts end to make room for nightclubbers who come to all-night discos, Novikov said this will be not the case at Revolution.
“Nobody will force the public out after the concert. They could stay for a party or sit in the restaurant,” he said.
Money Honey and City Club, the other two Apraksin Dvor-located clubs that share ownership with Revolution, are also likely to undergo drastic changes before summer, Novikov revealed. The veteran rockabilly outfit Money Honey, on the scene since 1994, will expand to the second floor now occupied by City Club and change its repertoire to include punk and alternative rock bands.
“It will breath new life into the place,” said Novikov. “It’s now sort of a small restaurant where people dance [but] it will become a kind of St. Petersburg CBGBs.”
The prices at the club’s bar are moderate, with Russian beer costing 70 rubles for half a liter and Russian vodka at 40-50 rubles for 50 grams.
Although local authorities have been recently reported to be considering getting rid of the irritating marketplace to erect a business center instead, Novikov said these plans would not affect the club.
“They can’t destroy the historical buildings; they are planning to pull down the market inside, while the club is located on the perimeter,” he said.

Revolution is located at 28 Sadovaya Ulitsa (Apraksin Dvor), M. Gostiny Dvor. Tel.: 571-2391, 571-5915. www.revolutionclub.ru, 
www.myspace.com/revmusicclub

TITLE: The caviar’s the star
AUTHOR: By Tobin Auber
PUBLISHER: Staff Writer
TEXT: The Caviar Bar
Angleterre Hotel, 24 Malaya Morskaya Ulitsa. Tel: 494 5953
Open from 2 p.m. to 2 a.m.
All major credit cards accepted
Menu in English and Russian
Lunch for two without alcohol 3,325 rubles ($125)

You would be hard pushed to find a finer location for a restaurant than the Angleterre hotel’s new Caviar Bar. It stands at the intersection of Voznesensky Prospekt and Malaya Morskaya Ulitsa and its vast windows, elegantly arching around the corner, provide a spectacular view of St. Isaac’s Cathedral. 
You should be warned, however: Unless you are an oligarch, an oil tycoon and/or a local bureaucrat, this, perhaps, isn’t the ideal place to head to when you want a cheap snack at lunchtime. The view is guaranteed to take your breath away, but the prices for some of the dishes — admittedly, by no means all of them — may also leave you gasping for air.
The bar occupies the gallery that extends from the Borsalino restaurant and what was once a souvenir shop. The caviar theme is hinted at in the red and black color scheme, but the soothingly understated art deco styling certainly doesn’t allow that hint to venture too far into the realms of kitsch.
We were lucky enough to visit the eatery on a cloudless day and happily sank into the deep, red leather armchairs, admiring the view of St. Isaac’s golden domes glittering in the sunshine as we ran down the menu. It’s not exactly what you would describe as a page-turner, running to just 20 dishes or so and fitting on to one side of A4-sized card. There’s a small selection of starters, an equally small selection of sushi and then a variety of caviars from different fish that can be served with blini. 
We kicked off with smoked salmon, capers, lemon and cracked black pepper (490 rubles, $18.50) and a shrimp cocktail with lemon and Marie-Rose sauce (525 rubles, $19.80). The smoked salmon was, as the British film producer and London Times restaurant critic Michael Winner would put it, “historic,” — a generous portion of gloriously succulent, fresh salmon served with a cunningly sculpted lemon. The shrimp cocktail, however, was less of a hit, my dining companion complaining that the shrimps were watery and the sauce was the standard mix of ketchup and mayonnaise. 
The prices for the servings of caviar are listed according to weight, and it’s here that those with heart conditions should take caution. Five hundred grams of beluga caviar, for example, will set you back 28,700 rubles ($1,082). Those counting the kopecks can go for the sturgeon, a mere snip at 27,650 rubles ($1,043). 
We, needless to say, opted for the far humbler red caviar, with 525 rubles ($19.80) getting you 25 grams of keta salmon eggs, one portion served with blini and one with melba toast. 
The caviar was excellent, served in a beautiful white ice-packed art deco dish. The pancakes were wonderfully light and came with finely shredded egg white, crumbled egg yolk, onion and a dollop of smetana. They all went together to produce another palpable hit. The melba toast, on the other hand, was far more standard, the bread not nearly as fresh as the rolls that were served alongside the starters. 
Both desserts were excellent, the chocolate cheesecake (420 rubles, $15.80) easily ranking among the best in the city and the creme brulee (280 rubles, $10.50) coming with a nice selection of fresh fruit.
Some hits and some misses, then. In view of the very attentive service, however, and bearing in mind that The Caviar Bar only opened earlier this week, it seems more than likely that the Angleterre will quickly iron out any oversights, adding another excellent eatery to the city’s menu.

TITLE: A right royal Oscars
AUTHOR: By Dean Goodman
PUBLISHER: Reuters
TEXT: BEVERLY HILLS, California — Musical drama “Dreamgirls” led the Oscar field with eight nominations on Tuesday, but its historic omission from the coveted best picture and directing categories instantly transformed the race for Hollywood’s top honors into a wild guessing game.
The event’s organizer, the Academy of Motion Picture Arts and Sciences, said it was the first time in the awards’ 79-year history that the leading nominee failed to earn a best picture nomination. 
“Babel,” a globe-spanning exploration of clashing cultures and tragic coincidences, secured seven nominations, followed by Spanish-language adult fairy tale “Pan’s Labyrinth” and the British royals drama “The Queen” with six each.
Martin Scorsese’s mob thriller “The Departed” and the Africa-set exploration of greed and war “Blood Diamond” picked up five Academy Awards nominations each.
“Babel,” “The Queen” and “The Departed” will compete for best picture alongside Clint Eastwood’s Japanese-language World War Two saga “Letters from Iwo Jima” and the low-budget comedy hit “Little Miss Sunshine.”
The Academy Awards will be held on Feb. 25 in Hollywood. 
Scorsese, Eastwood, and “Babel” director Alejandro Gonzalez Inarritu of Mexico, will face off for best director with British filmmakers Stephen Frears for “The Queen” and Paul Greengrass for the 9/11 docudrama “United 93.” Greengrass and Inarritu are first-time nominees.
Scorsese, 64, has been nominated six times for directing but has never won. He was considered the frontrunner two years ago with “The Aviator,” but lost out to Eastwood and his dark-horse contender “Million Dollar Baby.”
“Departed” producer Graham King told Reuters he would like Scorsese to end his losing streak but the director was “completely driven by film and the art of filmmaking” rather than by awards.
The film, Scorsese’s follow-up to “The Aviator,” was initially envisaged as a bloody thriller with no Oscar pretensions. But rave reviews and the best ticket sales of Scorsese’s career made it an awards frontrunner. Scorsese won the Golden Globe for the film last week. 
But movie pundit Tom O’Neil said Eastwood and his low-profile “Iwo Jima” — with U.S. ticket sales of just $2.4 million — have “once again ambushed the Oscar race when Martin Scorsese was out front,” and was now the one to beat.
Most Oscar pundits had expected “Dreamgirls” to be among the main contenders, but its omission from the top two races was “a shocking thumbs-down,” said O’Neil, a columnist for the Los Angeles Times Web site theenvelope.com.
The film’s highest-profile mentions were in the supporting acting races, where veteran comic Eddie Murphy and newcomer Jennifer Hudson, a former contestant on television’s “American Idol” talent show, received their first nominations.  
Rolling Stone magazine critic Peter Travers said the best picture race was now a toss-up. If Oscar voters find the Scorsese and Eastwood films too violent, “The Queen” too British and “Babel” too multilingual, “Little Miss Sunshine” could win. The low-budget comedy was recently named best picture by the Producers Guild of America, a group whose choices are often echoed by the Oscars.
Travers said the academy ignored stars such as Jack Nicholson (“The Departed”), Brad Pitt (“Babel”) and Ben Affleck (“Hollywoodland”), but its members missed a good opportunity to shake off their reputation as “old fogeys” by failing to give an acting nomination to “Borat” star Sacha Baron Cohen, who did receive a nod for adapted screenplay.
Nominated for lead actor were Leonardo DiCaprio for “Blood Diamond,” Ryan Gosling for “Half Nelson,” Peter O’Toole for “Venus,” Will Smith for “The Pursuit of Happyness,” and Forest Whitaker for “The Last King of Scotland.”

TITLE: A right royal Oscars
AUTHOR: By Paul Majendie
PUBLISHER: Reuters
TEXT: LONDON — The British are back in force at the Oscars and Buckingham Palace says it is rather pleased, while not giving the slightest hint whether Her Majesty, the Queen, has seen the nominated film based on her life. 
With a best film nomination for “The Queen,” one best actor nomination, two best director slots and three best actress nods, British stars may be poised for one of their best years ever at the Oscars and a chance to echo the jubilant boast made in 1982 by screenwriter Colin Welland after “Chariots of Fire” was a surprise Academy Awards victor.
“The British are coming,” Welland said, overjoyed for an industry that battles to emerge from Hollywood’s shadow. 
In 2007, even Buckingham Palace joined in the jubilation. “It is a very positive day for the British film industry. 
“We are delighted for all those who have been nominated,” said a palace spokeswoman as “The Queen” led the British Oscar charge with six nominations. 
Bookmakers made the film’s regal Helen Mirren the hot favorite for her role as the Queen, grappling with an outpouring of grief by millions of Britons after the 1997 death of Princess Diana. 
But the Buckingham Palace spokeswoman drew a veil of silence over whether the Queen had actually seen the sympathetic portrayal. “We never reveal Her Majesty’s personal preferences or what she is viewing or reading,” she said. 
Mirren, who dedicated her best actress victory at the Golden Globes to the Queen, said it was too early to talk about the Oscars. 
“Darling I haven’t got the Oscar yet. We won’t go that far. Let’s be a little circumspect,” she told Reuters.

TITLE: Iraq PM Outlines New Security
AUTHOR: By Qassim Abdul-Zahra
PUBLISHER: Associated Press Writer
TEXT: BAGHDAD, Iraq — Iraq’s prime minister told parliament Thursday that the coming U.S-Iraqi security sweep in the capital would not be the last battle against militants, who he said would not be safe anywhere in the country. Prime Minister Nouri al-Maliki did not reveal the details of the plan, which he has dubbed “Operation Imposing Law,” or say when it would begin. 
But he promised to go after those behind Baghdad’s rampant violence no matter where they tried to hide, although he promised to ensure the human rights of innocent Iraqis.
“We are full of hope. We have no other choice but to use force and any place where we receive fire will not be safe even if it is a school, a mosque, a political party office or home,” he said. “There will be no safe place in Iraq for terrorists.”
His comments came a day after U.S. and Iraqi troops battled Sunni insurgents holed up in high-rise buildings on Haifa Street in the heart of Baghdad, with snipers on roofs taking aim at gunmen in open windows as Apache attack helicopters hovered overhead.
The Defense Ministry said 30 militants were killed and 27 captured Wednesday.
The military reported separately that an American soldier was killed Wednesday in clashes near the city’s center, but officials declined to give more specifics or say whether the death was connected to the Haifa Street fighting. Two U.S. Marines also were reported killed Tuesday during combat in Anbar province, the military said.
Government spokesman Ali al-Dabbagh said the latest joint raid was aimed at clearing the area, which sits just north of the heavily fortified Green Zone, of “terrorists and outlaws” targeting residents. He promised such operations would continue as U.S. and Iraqi troops prepare for a broader security crackdown to stanch the sectarian bloodletting that has turned Baghdad into a battlefield.
But the operation drew condemnation from a Sunni group that said it was further proof that the Shiite-led government was targeting the minority sect.
The hard-line Association of Muslim Scholars called the Haifa Street crackdown “a campaign of genocide” against Sunnis and said several buildings had been damaged and people killed. It said it had not determined the exact number of casualties because the area was under siege.
       President Bush has committed 21,500 extra troops in a surge he hopes will succeed where other efforts have failed in quelling the sectarian violence.
Al-Maliki, a Shiite, also has placed high hopes on the operation and promised it will target Shiite militias and Sunni insurgents equally.
Past attempts by U.S. forces and Iraqis to secure the capital have failed and many critics said it was because al-Maliki had intervened to prevent the crackdowns from going after members of the Shiite Mahdi Army militia that is run by one of his prime political backers, anti-American cleric Muqtada al-Sadr.
The militia force is believed responsible for much of the sectarian killing in Baghdad and central Iraq in recent months. Its forces and death squads have deeply infiltrated Iraqi security forces.
The crackdown “aims to disarm all groups and only leave weapons in the hands of the government,” al-Maliki said, repeating a phrase he has used consistently. “This plan will not be the last. The battle between us and terrorists is open and continuous.”
Meanwhile, the mayor of Baghdad’s Sadr City said he reached agreement with political and religious groups to keep weapons off the streets of the heavily populated Shiite militia stronghold and has presented the deal to U.S. and Iraqi government officials in an apparent attempt to avoid a crackdown on the area.
Rahim al-Darraji said Iraqi troops will be in charge of security in the sprawling district in eastern Baghdad. His comments come amid fears that Sadr City, the main headquarters of the Mahdi Army militia, could be a major target in the planned crackdown.
Al-Maliki said five committees will be set up to work in conjunction with the military as it and U.S. troops conduct the security plan to deal with political, media, public services, economic and community outreach aspects.
He said Baghdad would be divided into nine sectors and Iraqi troops would be in the lead, backed by American forces. 
The last of five additional U.S. brigades to help with the security sweep are scheduled to arrive in the Iraqi capital in May. The first, a brigade of the 82nd Airborne Division, arrived last week. 
In violence Thursday, a bomb attached to a motorcycle exploded in one of Baghdad’s busiest market areas, killing at least five people and wounding 20, police said. 
The blast hit the Shorja market district about 11 a.m., police said, giving the casualty toll. The market is a major point for wholesalers to sell food, clothing and house products in the warehouses, stalls and shops lining the streets. 
A bomb also struck a market in the religiously mixed area of Baiyaa in western Baghdad at 10:45 a.m., killing at least one civilian and wounding seven, police said. Both areas have been the targets of bombings previously as insurgents seek busy commercial targets to maximize the casualties. 
In northern Iraq, gunmen killed Hussein Abdul Aziz Ahmed, a member of the local council in Gayyara, about 20 miles south of Mosul, as he was driving to work, police said.

TITLE: Federer Destroys Roddick to Reach Final
AUTHOR: By Paul Alexander
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia — Even top-ranked Roger Federer was stunned by his domination of Andy Roddick. 
After looking vulnerable in some of his earlier matches, Federer was virtually untouchable as he beat sixth-seeded Roddick 6-4, 6-0, 6-2 Thursday at the Australian Open to reach his seventh consecutive Grand Slam final, tying a record set by Jack Crawford in 1934. 
“This was definitely one of my best matches I ever played,” said Federer, who is seeking his 10th major title. “I had one of these days when everything just worked, I was unbeatable. It’s just unreal. I was playing out of my mind. I am shocked myself. 
“The tournament is not even over yet, so let’s not get carried away. Let me do it one more time.” 
Serena Williams earlier proved her doubters wrong. 
Unseeded after an injury-plagued 2006 that limited her to four tournaments, Williams reached her first Grand Slam final in two years by beating Nicole Vaidisova 7-6 (5), 6-4. 
Standing in the way of an eighth Grand Slam title — she already has two here — is top-seeded Maria Sharapova. Sharapova turned her semifinal against No. 4 Kim Clijsters into an Australian farewell match for the 23-year-old Belgian, who is retiring at the end of the year, with a 6-4, 6-2 victory. 
Federer will play the winner of Friday’s semifinal between 10th-seeded Fernando Gonzalez and No. 12 Tommy Haas. Both had to be at least a little down if they watched him rout Roddick. 
Roddick had hoped that his net-charging tactics, implemented by new coach Jimmy Connors after Wimbledon last year, would help him close the gap with Federer. He beat the Swiss star at an exhibition tournament less than two weeks ago. 
Federer made sure it didn’t happen again when it counted. 
“He was playing so well,” Federer said. “I thought I would see 50 aces going past me. That’s why I didn’t read the papers today, didn’t switch on the TV, and I just tried to focus on my game.” 
Federer ran off 11 games in a row from serving at 3-4 in the first set. He blunted Roddick’s powerful serve and whipped passing shots seemingly at will, leaving Roddick flat-footed and staring in disbelief. 
Roddick won only nine of his 31 net approaches and had only 11 winners. Federer had 10 aces, 45 winners and just 12 unforced errors. 
It got so bad that Roddick got a huge ovation after whacking one of his few winners, then another when he held serve to end Federer’s 11-game streak. 
“I caught an absolute beating tonight,” said Roddick, who lost a set 6-0 for the first time in 25 Grand Slam events. “It was miserable. I’m going to try to take this like a man as much as I can.” 
Federer yielded only six points in the second set to Roddick, who tried to bash a ball into the air after falling behind 5-0, only to lose his grip on the racket and toss it toward the side of the court. Roddick apologized when it hit an Associated Press photographer on the knee, and received a conduct warning from the chair umpire. 
Williams, ranked No. 81 coming into the tournament after dropping out of the top 100 last year while dealing with a bad knee, guaranteed herself a return to the top 20. 
“I can’t believe it,” the former world No. 1 said. “That’s awesome. If I play well, which I don’t think I’ve even reached yet at all in this tournament … it’s really hard for anyone on the women’s tour to beat me.” 
Williams and Sharapova have split four previous matchups. Williams won their last encounter after saving match points in the semifinals here two years ago before going on to win the title. 
“I think she has nothing to lose,” Sharapova said. “Those are always dangerous opponents.” 
Williams sprinted ahead 4-0 in the tiebreaker, then doubled-faulted on consecutive points as Vaidisova rallied to tie it at 5. Grunting louder with each shot, Williams whacked a backhand cross-court winner to get a set point, then growled loudly when Vaidisova then hit a forehand into the net. 
Williams jumped ahead 5-1 in the second set. Vaidisova broke her as she served for the match to pull within 3-5, then fended off four match points in the next game. 
“I almost did a gagarooney there,” said Williams, explaining: “Basically, you know, gagging.” 
Serving again to finish it off, Williams lost match point No. 5 when Vaidisova hit a backhand cross-court winner. Williams started to celebrate, thinking the ball was out, then clearly wanted to question the no-call but had used up her challenges already. 
She fired an ace on a second serve to set up match point No. 6. and cashed this one. 
“She’s definitely a great champ,” Vaidisova said. “She played the tight points very well. I had my opportunities. I didn’t use them.” 
Sharapova, last year’s U.S. Open champion, wasn’t at the top of her game either, committing eight double faults and missing a number of easy putaways. But she was at her best under pressure, fending off seven break points in the second set. 
“Couldn’t quite get the serve and return together in the beginning,” Sharapova said. “But overall I was really focused. I did the right things at the right time. I was patient when I had to be patient, played a smart game.” 
Clijsters got two standing ovations as she said goodbye to Rod Laver Arena after the loss. 
“I have so many great memories from here,” she said. “I’m going to come back tomorrow and take my time to say goodbye to everybody.”

TITLE: Ex-Argentine Captain Denies Taking Nuns
AUTHOR: By Marya Pertossi
PUBLISHER: The Associated Press
TEXT: BUENOS AIRES, Argentina — A former Argentine navy captain dubbed the “Angel of Death” by human rights groups denied in his first court appearance Wednesday that he helped abduct two French nuns during the country’s “dirty war” against leftists. 
Capt. Alfredo Astiz, 56, is accused in the 1977 disappearance of nuns Alice Domon and Leonie Duquet, along with a dozen other people, including the founder of the human rights group Mothers of the Plaza de Mayo, Azucena Villaflor.
All were reported held at the former Navy School of Mechanics, the chief clandestine torture center of the 1976-83 military dictatorship.
Judge Sergio Torres is investigating torture at the Navy Mechanics’ School in one of several junta-era human rights cases reactivated since the Supreme Court two years ago annulled a pair of 1980s amnesty laws.
In his testimony Wednesday, Astiz declared his “complete and total innocence” in the nuns’ disappearance and deaths.
Nearly 13,000 people are officially listed as missing from the dictatorship era’s state crackdown on leftist dissent. Human rights groups say the toll is closer to 30,000.
Duquet was abducted Dec. 8, 1977, in what lawyers say was a commando-style operation by state security agents working on behalf of the dictatorship. Domon was taken that same month.
Lawyers for the nuns said they were targeted after befriending mothers of illegally detained dissidents. After they were seized, the nuns were taken to the Navy School of Mechanics and later disappeared, prosecutors said.
They contend the nuns were seized on information provided by Astiz, saying he infiltrated a group of relatives of victims by claiming to be a brother of one of those who disappeared.
Duquet’s body was identified last year through DNA tests after forensic experts exhumed several bodies that washed up on the south Atlantic coast in December 1977 and were later found buried in an unmarked grave. Domon’s body was never recovered.

TITLE: Russian Pairs Crushed On Ice
PUBLISHER: Agence France Press
TEXT: WARSAW — Germany’s Aliona Savchenko and Robin Szolkowy won their first major title with a resounding victory in the pairs competition at the European figure skating championships.
Maria Petrova and Alexei Tikhonov, the 2000 world and two-time European champions from Russia won silver, with husband-and-wife team Dorota and Mariusz Siudek of Poland claiming bronze.
The Germans, last year’s European silver medallists, led all the way to finish a massive 19.78 points ahead of the Russians.
Ukrainian-born Savchenko, 23, punched the air in delight after executing a faultless free skating routine to The Mission soundtrack. “We just showed the audience what we do in practice every day,” said 27-year-old Szolkowy.
They become the first non-Russians to hold the title since their coach Ingo Steuer won with Mandy Wotzel in 1995.
Steuer and Wotzel had been the only non-Russian or Soviet skaters to hold the European pairs title since 1983.
Steuer, sacked by the German Ice Skating Union because of past ties with the Stasi, the East German secret police before reunification with the west, last year won his appeal to continue coaching the pair.
Both the Russian and Polish pairs were competing in their last Europeans.
Petrova, 29, and Tikhonov, 35, had been carrying Russian hopes after the retirement of five-time European champions Tatyana Totmyanina and Maxim Marinin following their Olympic gold.
The European champions in 1999 and 2000, they had been persuaded to continue on for another season.
But Tikhonov, the oldest competitor in the championship, struggled with his jumps during their Moonlight Sonata. They nevertheless managed to hold their second position from the short programme to achieve their eighth podium at the Europeans.
“We were almost dead, it was really hard tonight,” said Tikhonov.
“I hoped that the older guys would do well. Figure skating made me younger for so many years. It’s totally different when you’re 26 or 27 years old.”
The Siudeks, also in their 30s and set to hang up their skates, brought the house down for their performance to a music selection by Polish composer Frederic Chopin.
The Germans scored 199.39 points overall with Petrova and Tikhonov achieving 179.61 and the Siudeks 170.91.
Earlier in the men’s competition, Czech Tomas Verner led favorite Brian Joubert in the short program.
A poor performance by 2004 European champion Joubert allowed 20-year-old Verner to surge into pole position to hold a 1.38-point advantage on the Frenchman going into Thursday night’s free skate final.
Joubert, 22, missed his attempt at an opening quadruple toeloop combination in his James Bond Die Another Day routine.

TITLE: Baptista Inspires Arsenal Comeback at Tottenham
PUBLISHER: Reuters
TEXT: 20LONDON — Julio Baptista scored three times as Arsenal stormed back to draw 2-2 with north London rivals Tottenham Hotspur in a frenetic first leg of their League Cup semi-final at White Hart Lane on Wednesday. 
The Brazilian followed up his brilliant four-goal show in the quarter-final demolition of Liverpool to rescue Arsenal after his own goal and Dimitar Berbatov’s headed opener had gifted Tottenham a 2-0 halftime lead. 
The former Real Madrid striker redeemed himself in stunning fashion after the break, beating England keeper Paul Robinson twice in a 12-minute spell to make Arsenal favorites to advance after next week’s second leg. 
Chelsea await the winners after completing a 5-1 aggregate victory over fourth division Wycombe Wanderers on Tuesday. Manager Arsene Wenger, who did not include talisman Thierry Henry in his squad, paid tribute to Arsenal’s fringe players and said he would most likely play them again in the return. 
“They showed tremendous mental strength to come back,” he told reporters. 
“In some ways this result is more satisfying than the 6-3 victory at Liverpool because then everything went for us whereas here nothing went for us in the first half.” 
Tottenham, who have not beaten Arsenal in any competition since 1999, had appeared on course to end that dismal sequence. 
“It’s very disappointing and we only have ourselves to blame,” said manager Martin Jol. “We needed to stand up and keep the ball in the second half but we dropped off and they took control of the game. That’s the law of football,” he said.

TITLE: Father Kills Daughter After Doubting Virginity
AUTHOR: By Shafika Mattar
PUBLISHER: The Associated Press
TEXT: AMMAN, Jordan — A Jordanian man fatally shot his 17-year-old daughter whom he suspected of having sex despite a medical exam that proved her chastity, an official said Thursday. The man surrendered to police hours after the killing, saying he had done it for family honor. 
A state forensic pathologist, who works at the National Institute of Forensic Medicine in Amman where an autopsy was performed, said in a phone interview that the girl had run away from home several times for unknown reasons.
Weeks ago, the girl had returned home from a family protection clinic after doctors had vouched for her virginity and the father had signed a pledge not to harm her, the pathologist said on condition of anonymity due to the sensitive nature of the case.
“The tests proved that she was a virgin,” the pathologist said. The girl returned home only after her father signed a statement promising not to harm her, he added.
The father shot the girl four times in the head on Tuesday. On Wednesday, an autopsy was performed that again showed “she was still a virgin,” the pathologist said.
Authorities have not disclosed the names of the father or the daughter or even their hometown, saying only that they lived in a southern province.
The crime is the first “honor killing” this year in Jordan, where many men consider sex out of wedlock to be an almost indelible stain on a family’s reputation. On average, about 20 women in the country are killed by their relatives in such cases each year. Women have been killed for simply dating.
Global human rights organizations have condemned such killings and appealed to King Abdullah II to put an end to them.
In response, the government has abolished a section in the penal code that allowed for “honor” killers to get sentences as lenient as six months in prison. Instead, the government has told judges to consider honor killings on a par with other homicides, which in Jordan are punishable by up to 15 years in jail.
But attempts to introduce harsher sentences have been blocked by conservative lawmakers who argue that tougher penalties would lead to promiscuity.
Queen Rania also has called for harsher punishment for such killers.

TITLE: Former WBC Champion Klitschko Plans Comeback
PUBLISHER: Reuters
TEXT: BERLIN — Former world heavyweight champion Vitali Klitschko is planning a comeback in April. 
“I am returning to get my WBC championship back,” said the Ukrainian in a statement on Wednesday. 
“In November 2005, due to a serious knee injury, I retired without having lost the WBC belt in the ring. 
“At the WBC gala on December 20, 2005 in Cancun, Mexico, the WBC designated me as “WBC Champion Emeritus” and assured me that whenever I was ready to return, I would become the immediate mandatory challenger for the title.” 
Klitschko plans to return against holder Oleg Maskaev of Russia on April 21 in Moscow. 
“I’m back and I have requested the WBC sanction a bout between me and Oleg Maskaev,” he said. 
“I look forward to reclaiming my title and want to thank everyone who has been so supportive during my short retirement.” 
The bout will be Klitschko’s first since an eighth-round knockout win over Briton Danny Williams on December 11, 2004. 
Knee and back problems prevented the Ukrainian making a title defence against American Hasim Rahman and eventually forced the champion into retirement with a 35-2 win-loss record, including 34 knockouts. 
Following his retirement, Klitschko ran for mayor of Kiev. 
 The 35-year-old did not win the election but continues to play an active role in Ukrainian politics. 
Klitschko’s brother Vladimir is scheduled to defend his IBF and IBO heavyweight titles against up and coming American Ray Austin in Germany on March 10.

TITLE: Donors Pledge $7.6 Bln For Reforms in Lebanon
AUTHOR: By John Leicester
PUBLISHER: The Associated Press
TEXT: PARIS — International donors pledged $7.6 billion in aid and loans at a conference Thursday to raise money for Lebanon’s U.S.-backed prime minister and his economic reform program for the war-scarred country. 
The dollar figure was announced by the conference host, French President Jacques Chirac, after the more than 40 nations and financial institutions took turns in announcing their contributions.
Saudi Foreign Minister Prince Saud al-Faisal said his country would channel $1 billion in development funding and an additional $100 million grant for the Lebanese government.
The U.S. said it plans to more than triple its economic aid. Secretary of State        Condoleezza Rice said on the eve of the meeting that the Bush administration is seeking $770 million in new aid for Lebanon. The money, which must be approved by Congress, would finance long-term redevelopment and immediate rebuilding from last summer’s war.
Rice would not speculate on the fate of the donation should Hezbollah militants take power.
“This is a package that is for Lebanon,” Rice said when asked if the money is contingent on the survival of a U.S.-backed government in Beirut. “Lebanon is a democracy.”
Lebanese Prime Minister Fuad Saniora told the conference that his country is “on the verge of a deep recession.”
“Your support will be essential in seeing Lebanon through,” Saniora said. “The cost of failure is too great to contemplate.”
The conference comes as Saniora’s government is locked in confrontation with Iranian-backed Hezbollah and its allies, struggling under mountains of debt in addition to rebuilding parts of southern Lebanon in ruins after the summer war between Hezbollah militants and Israel.
Chirac said half of a new $650 million loan from France would be extended this year. The European Commission, the EU’s executive arm, pledged some $649 million in loans or aid.
Lebanon has $40 billion in state debt, equivalent to about 185 percent of its annual economic output, making it one of the world’s most indebted nations.