SOURCE: The St. Petersburg Times
DATE: Issue #1257 (23), Tuesday, March 27, 2007
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TITLE: Opposition Feels Heat As It Plans City Rally
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: As opposition coalition Other Russia plans a series of further regional anti-government rallies, with a Dissenter’s March in St. Petersburg scheduled for April 15, opposition groups and parties are facing increasing pressure from the Kremlin.
Last Thursday, a Moscow prosecutor banned the Nationalist Bolshevik Party on extremism charges, suspending the radical opposition group for the second time since it was outlawed in June 2006.
The next day, the Supreme Court ordered the suspension of the Republican Party, citing its small size and lack of regional presence.The court decided that the liberal opposition party, which has in the past challenged Kremlin policy and criticized President Vladimir Putin, has too few members to be considered a party under legislation that came into force in 2006 (see story, page 3).
Of 35 opposition parties in Russia, at least 17 — including the Republican Party — have been shut down under the law which supporters say rationalizes the political landscape and prevents legislatures from splitting into unworkable factions. Parties that do not meet membership levels may not stand in elections and must re-register as “organizations.”
The Republican Party has supported the events organized by Other Russia, an umbrella group that incorporates, among others, the National Bolshevik Party, Garry Kasparov’s United Civil Front, and Mikhail Kasyanov’s People’s Democratic Union.
Opposition activists say the legal moves against them will not stop them from fighting for their cause.
“We are not extremists, and we are not going to give up,” said Andrei Dmitriyev, National Bolshevik leader in St. Petersburg.
Olga Kurnosova, head of the local branch of the United Civil Front, said the challenges are even inspiring because the tough response from the authorities indicates the growing concern — and fear — the authorities have about strengthening opposition groups.
“After the March 3 Dissenter’s March, our hotline was about to explode,” Kurnosova said. “We have since received hundreds of phonecalls with people asking us not to give up and repeat the march. Many people were saying they regretted they had not known about the march, and urged us to do it again. One of the callers said, their entire firm of 200 people are willing to join in.”
Dmitriyev said he senses a window of opportunity for people unhappy with Kremlin policies to make their voices heard when Other Russia holds the next Dissenter’s March on April 15. The march is planned to begin at the Oktyabrsky Concert Hall and proceed to City Hall headquarters at Smolny. On March 3 this route was blocked by police and the 5,000-strong crowd was diverted onto Nevsky Prospekt.
“During the next march, we need to go further,” Dmitriyev said. “This time we need to make it to Smolny and press Governor Valentina Matviyenko to talk to us —?or to respond to us in an official form. We ought to at least hand over a petition. The head of the city’s government cannot afford to ignore crowds of people gathering outside her office and demanding satisfaction.”
Opposition events are often heavily policed and government officials frequently refer to marchers as “extremists,” prompting. Other Russia leaders to urge caution among demonstrators on April 15.
“We are not inciting extremism or plotting a revolution, and we are certainly not trying to provoke bloodshed,” said Sergei Gulyayev, the Other Russia coordinator in St. Petersburg. “Rather, we rely on the Russian Constitution and the law, and our goal is to make the authorities respect the constitution of our country.”
“This rally is meant as a peaceful and calm protest event, and it would have been peaceful on March 3, if the police had not been blocking our way and exercising force all the time,” he added.
In the meantime, smaller opposition parties feel excluded from the political process and believe street politics to be the only remaining option to get heard and noticed.
“The elections have become a joke, a nominal thing,” liberal politician Irina Khakamada told a Moscow news conference after March 11 regional elections dominated by pro-Kremlin parties. 
“Street politics is the last resort left to us.”

TITLE: Chinese President Hu, Putin Talk Energy
AUTHOR: By Gennady Novik
PUBLISHER: Reuters
TEXT: MOSCOW — Chinese President Hu Jintao arrived in Russia on Monday on his third visit as national leader, seeking energy deals but also offering Moscow business opportunities and international cooperation as they expand ties.
“I am certain this visit will give new momentum to the deepening of Russian-Chinese relations and to our practical cooperation in all spheres,” Hu said in a statement handed to reporters after his jet touched down in Moscow.
China and Russia are permanent members of the United Nations Security Council who have used their veto power to blunt Western efforts to sanction Iran and other challengers to U.S. policy.
Over the weekend, they both backed a UN resolution imposing new sanctions on Iran for continued uranium enrichment, which critics say is aimed at eventually giving Tehran the ability to assemble nuclear weapons.
Iran is sure to be on the agenda when Hu sits down for talks with Russian President Vladimir Putin, officials said. But Hu will also be looking to expand trade between the two growing economies, especially oil and gas for energy-thirsty China.
China is the world’s number two oil consumer, and Russia the second-largest exporter. But their potential partnership has been stymied by both nations’ desire to keep a state grip on energy deals. Previous plans for key oil and gas pipelines have languished after both sides trumpeted initial agreements.?
China wants to pay less for the gas and it is unclear whether Russia has enough crude to satisfy China and Japan, which have been vying for supplies.
Moscow has flip-flopped over which of these Asian rivals should get the first pipeline connection, leaving Chinese buyers hanging on promises of increased railway supplies of oil.
Russia’s state-controlled oil firm Rosneft has repeatedly failed to meet its targets for increased crude oil volumes by rail to China. But Rosneft will sign a deal on Tuesday with Unipec, the trading arm of Sinopec Corp., to reopen a border crossing at Naushki, adding 3 million tons of crude a year (60,000 barrels per day), Kommersant newspaper reported.
Russia may be willing to make some energy concessions to China as Moscow seeks to diversify markets and investment, said Nicklas Norling, a researcher at Uppsala University in Sweden who has studied their relations.
“Energy is a source of tension but also potential cooperation,” he said.
Hu will visit the oil-rich region of Tatarstan after Moscow, which may yield an oil deal with the regional oil firm Tatneft, a local government spokeswoman said. She declined to give details and said the deal was not yet definite.
Putin also hopes that Hu will buy more Russian-made military hardware as China drives ahead with defense modernization, Norling said.
“Russia needs to keep its military industry floating, and China is really important to doing that,” he said.

TITLE: Nizhny Novgorod Police Block March
AUTHOR: By David Nowak
PUBLISHER: Staff Writer
TEXT: NIZHNY NOVGOROD — It was a mistake. But it forced two people into the camp of the opposition, which police roughly prevented from holding an anti-Kremlin march Saturday.
Two old women were standing still on the central square in Nizhny Novgorod, their arms linked. They were not among the activists or journalists who had been detained minutes before. 
No more than five meters away stood a cordon of about 100 OMON riot police with batons and metal shields. Without warning, the officers thrust their shields forward and advanced. The women stood fast. One later said she was too scared to move.
With every step forward, the police banged their shields with their batons and shouted, “Back!” 
The officers knocked the women to the ground, prompting screams and cries for help.
“This is my town,” one woman said afterward. “I am allowed to go wherever I want.” 
“We weren’t even there to protest,” said the other. “But now we have something to protest about.” Both refused to give their names. 
Police beat and detained activists who gathered Saturday near the central Gorky Square to protest the political status quo with the Dissenters’ March, as opposition organizers dubbed the rally. 
In all, 102 people were detained at the square or on their way to the square, including 11 Moscow residents, six St. Petersburg residents and one Latvian, city police said. Twelve journalists were among the group, four of whom represented foreign media, including The New York Times and The Associated Press.
Of the detainees, 29 who made it into the square were charged with public disorder, police said. They face a fine. 
Authorities refused to authorize the rally on the square, instead allowing a gathering far from the center at a site that protesters ignored.
On Saturday, hundreds of police and OMON officers closed off streets and cordoned off the square ahead of the march. In the center of the square, music blared from speakers as local schoolchildren competed in a sports day organized by the city. A police helicopter periodically drowned out the music as it passed overhead. 
Police in riot gear formed a barrier around the square “to protect the children,” one policeman explained. 
There were police checkpoints at every access road to the square. Residents were turned away and told that the square was being used for sports. 
At about 12:30 p.m., a group of young activists led by Stanislav Dmitryevsky broke into the square to protest, shouting anti-fascist slogans and holding flags aloft. Dmitryevsky, who heads the Russian-Chechen Friendship Society, co-organized the march. 
Riot police tore into the group and detained them. As they were being carried off, they shouted, “This is fascism!”
The square remained sealed off for the day. 
On Friday, Ilya Shamazov and Yury Staroverov, two other organizers, were “invited for a chat with police” and subsequently detained on suspicion of terrorist activity, said Oksana Chelysheva, deputy head of the Russian-Chechen Friendship Society.
Prosecutors accuse them of distributing pamphlets with instructions on how to become a terrorist, Chelysheva said. 
Marina Litvinovich, an assistant to former chess champion Garry Kasparov, who heads the United Civil Front, was detained in her car Friday, Chelysheva said. 
Litvinovich was told that her car’s license plate matched that of a stolen vehicle, she said. She was released several hours later only to be detained again for the same reason.
Kasparov was on a business trip in Germany on Saturday that he had been unable to reschedule, a United Civil Front spokesowman said. Other prominent figures who attended a protest of several thousand in St. Petersburg earlier this month did not make it to Nizhny Novgorod on Saturday. 
Eduard Limonov, head of the unregistered National Bolshevik Party, said by telephone Friday, “I have other plans,” before adding that he was in a Moscow police station. Prosecutors on Thursday moved to shut down his group. 
Spokespeople for liberal politician Irina Khakamada and former Prime Minister Mikhail Kasyanov said the two were also otherwise engaged. 
Nizhny Novgorod residents were not impressed with what they saw as heavy-handed policing. 
“It is simply illegal,” said Vladislav Falik, 46, an employee of the city’s giant automobile plant, GAZ. Falik shouted his comments from behind a police cordon on one of the square’s access roads. 
“It is shameful to act in such a way in front of the children,” he said. “But the political system is such that the only way to get an opinion across is to take to the streets. And we will continue to do that.” 
The children in the center of the square could not be approached; their supervisors warned journalists away.
A local Yabloko representative said Russia’s international reputation would suffer. “The world will see how Russia behaves,” he said. 
The opposition is planning more marches this year, including one in St. Petersburg on April 15.

TITLE: Barman’s Act Sparks Fire, Killing Ten
AUTHOR: By Kevin O’Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW — Ten people died at a Moscow strip club early Sunday when a fire show involving a barman went horribly wrong.
The blaze swept through 911 VIP, located in a wing of Lenkom Theater near Pushkin Square, when a barman trying to set himself alight accidentally set the club on fire, Moscow Deputy Prosecutor Vladimir Ponevezhsky told reporters.
The barman lost control and poured too much alcohol on himself, around 200 to 300 milliliters, said Yevgeny Bobylev, spokesman for the city’s emergency response department.
“The clothes of the barman were on fire, and then the flame jumped to a five-liter canister of alcohol, and then all of the club’s stage caught fire,” Bobylev said, Interfax reported.
The barman may have been drunk, Rossia television said Sunday evening.
Neither the fire alarm nor fire extinguishers worked in the club, the channel reported.
Four women and six men died in the blaze, and eight others were hospitalized with burns and smoke inhalation. Only five of the dead — four men and one woman — had been identified as of late Sunday. They included two Bulgarian citizens.
Many of the dead choked on toxic fumes on the club’s second floor, where private booths are located, Ponevezhsky said.
People poured out of the club early Sunday, crying, “Bring stretchers, call an ambulance,” said Sergei, 50, who lives in the Lenkom theater and declined to give his last name.
“I ran out to see if I could help,” he said. “They were all lightly dressed.” Sergei said he lived in the theater while he works on renovation there.
About 100 people were in the club at the time of the fire.
The smell of smoke still lingered outside the Lenkom building on Malaya Dmitrovka late Sunday morning as bodies in black bags were carried to waiting ambulances. Police blocked off the entrance to the club, which is in the same wing of the building as the Planeta Fitness sports club.
An employee at the Dymov restaurant, which is also located in the building, was offering television journalists some video footage of the night’s chaos filmed with a mobile phone. He refused to disclose his asking price to a newspaper reporter.
The fire began at 3:09 a.m. on the first floor and spread to cover 100 cubic meters of the club, Ponevezhsky said. Toxic smoke was the cause of many of the deaths, he also noted. It took firefighters two hours to extinguish the fire.
It was unclear what would happen next to 911 VIP, known as one of the more popular and expensive strip clubs in Moscow. Nobody at the other clubs answered the telephone Sunday.
The fire comes only five days after a blaze killed 63 people in a retirement home in the Krasnodar region.
More than 17,000 people die in fires each year in Russia, a per capita death rate that is more than five times higher than that in the United States. Lax fire safety rules and negligence are to blame for many of the deaths.
911 is one of Moscow’s better-known chain of strip clubs. The first 911 opened in the hotel Orlyonek in 2000, and 911 VIP, as the club on Malaya Dmitrovka is called, opened in 2005. A 911 also operates in Yekaterinburg.

TITLE: Republican Party Ordered to Disband
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Supreme Court on Friday ordered that Vladimir Ryzhkov’s Republican Party be disbanded for failing to adhere to a law that requires parties to have at least 50,000 members and 45 regional offices.
Ryzhkov, an independent deputy in the State Duma, accused the court of blindly listening to the Federal Registration Service’s arguments and promised to appeal to the presidium of the Supreme Court and the European Court of Human Rights.
“The court decided to believe the Federal Registration Service rather than properly explore the presented evidence,” Ryzhkov told reporters after the verdict.
Ryzhkov and his lawyers presented five cartloads of documents Thursday, the first day of the two-day hearing, in an effort to convince Judge Yury Tolcheyev that the party complied with the 2004 law on parties.
Lawyers for the Federal Registration Service, however, said Thursday that a check of the party had found that it had only 39,500 members and 33 branches with the required 500 or more members, Kommersant reported.
The Registration Service’s representative in the court, Galina Fokina, expressed satisfaction with Friday’s ruling.
But the leaders of fellow opposition parties spoke out in support of the Republican Party, which was founded in 1990 and recently absorbed the political wing of the Union of Soldiers’ Mothers Committees.
“I regret this decision,” senior Yabloko official Sergei Ivanenko said, Interfax reported. “One of Russia’s oldest democratic parties has fallen victim to the draconian law.”
Ivanenko said Yabloko would encourage the party’s members to join its ranks if the presidium of the Supreme Court rejects Ryzhkov’s appeal.
Nikita Belykh, head of the Union of the Right Forces, or SPS, called the ruling “an example of the selective application of law.”
Belykh said federal checks on several other parties had improperly found them in compliance with the law. 
He did not identify the parties. SPS has cooperated with the party in the past, allowing its members to run on the SPS party list in recent legislative elections in Perm.
The registration service has found 16 parties in noncompliance with the 2004 law, according to its website. 
Prior to the Friday verdict, the Federal Registration Service had won lawsuits to liquidate five of the parties, including the Eurasian Union and the People’s Republican Party.

TITLE: New Privacy Laws May Aid Criminals
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The Internet Corporation for Assigned Names and Numbers (ICANN) has announced proposals to change registration procedures for COM, NET, ORG and other Internet domains. If adopted, the changes will eventually allow domain owners to become anonymous. Experts believe the changes will open the law to new forms of abuse.
“Those who register sites suffer from weaknesses in the accreditation agreements and I want to make sure that ICANN’s accreditation process and our agreement gives us the ability to respond with more strength and flexibility in the future,” Paul Twomey, ICANN president and CEO, said in a statement last week.
He recalled the problems caused by RegisterFly when people had difficulties getting access to their registration data and having their domain name transferred.
“ICANN introduced competition to the domain name market in 1998. Back then there was one registrar. There are now over 865. That’s a good thing because it has made domain names cheaper and created more choice. But the registrar accreditation agreement was designed and signed when the domain name market was much smaller,” Twomey said.
He called for the speeding up of data escrow and a review of registration rules. So far to register a domain the person needs to provide his name, phone number, e-mail and postal address. ICANN suggested registering domains in the name of an owner’s representatives. The changes are to be discussed in detail at the end of March at an ICANN meeting in Lisbon.
Victor Naumov, head of legal practice for intellectual property and information technology protection at Beiten Burkhardt St. Petersburg, said that formally the ICANN initiative could not change registration procedures in the .ru zone. However he did not exclude the “indirect, ideological influence” of this proposal on Russian registrars.
Being a self-regulated industry, the Internet is not subject to particular federal laws, Naumov said, and registrars can follow the example of their western colleagues.
“Individuals call for protection of their private life and personal data including name, address, e-mail and so on. Registering a domain a person discloses this information, which becomes accessible to third parties,” Naumov said.
“On the other hand, domains and sites are often used for commercial purposes. Withdrawing an owner’s personal data will create difficulties for criminal investigations,” he noted.
Among possible violations of the law, he listed counterfeiting, libel and public insults. In case of court proceedings, investigators will have to deal with mediators rather than with the real owner of the web site.
“Cybersquatting is increasing on a dramatic scale in Russia. A person can easily register a domain for $10 to $30 then keep it until he gets an appropriate offer from a buyer. Earning several tens of thousands of dollars from one successful sale compensates all expenses,” Naumov said.
The Russian segment of the Internet is one of the most rapidly growing in the world. According to RU-Center report, by March 15, 2007 .ru and .su domains accounted for 793,000 – a 61 percent increase on last year’s figures. By this summer experts expect domains to surpass the one million mark.
Most new domains were registered by individuals. At the same time the number of non-operating web sites decreased to two percent as opposed to three percent last year.
“It could be related to the increasing quality of hosts. Also domain owners have started to understand that any domain can generate profits, even if it is not used for its main purpose,” the report said.
RU-Center experts acknowledged the problems related to violations of rights on the Internet.
“At the moment cybersquatters make money not so much on the resale of domains but rather on attracting advertising to such sites,” said Andrei Vorobiev, director of the PR department at RU-Center.

TITLE: Zurabov Grilled Over Drug Subsidy
AUTHOR: By Max Delany
PUBLISHER: Staff Writer
TEXT: MOSCOW — Health and Social Development Minister Mikhail Zurabov on Friday presented urgent proposals to the State Duma to remedy the current crisis affecting a government-sponsored prescription drug program.
Amid calls for his resignation, Zurabov put forward a raft of proposals, including the establishment of a dedicated 20 billion ruble ($770 million) fund designed to cover the cost of the most expensive medicines. He also suggested boosting the authority of the government agency in charge of administering the program, adding that the situation would improve within three weeks.
“There is not a problem with medicines in the country,” Zurabov told Duma deputies, Interfax reported. “This crisis is not an organizational crisis or a technical crisis, but principally a financial one.”
The prescription drug program, which was launched in 2005 with an initial budget of 34.1 billion rubles ($1.3 billion) for 2006, was designed to supply much-needed medicines for ailments including diabetes, cancer, hemophilia and multiple sclerosis. 
Under the program pharmaceutical firms provide medicine to pharmacies through distributors previously selected by regional administrations. The Health and Social Development Ministry later reimburses the companies, calculating the sum owed using pharmacy receipts.
 By the middle of last year, spending on the program had exceeded the earmarked sum by 38.8 billion rubles ($1.5 billion), leaving pharmaceutical companies essentially to bankroll the plan to the tune of $1 billion and leading to widespread shortages of medicines across the country during the first months of 2007.
With two Duma committees set to report back on Zurabov’s proposals April 4, the United Russia party agreed to drop calls for Zurabov’s dismissal, although initial reactions to his performance remained frosty. 
“As yet, it seems to me that we haven’t heard clearly formulated plans,” Duma Speaker and United Russia leader Boris Gryzlov said.
“United Russia’s position is that you cannot call the work of the ministry satisfactory,” said Andrei Isayev, chairman of the Duma Committee for Labor and Social Policy.
Deputies from other Duma factions, including the Communists and Rodina, persisted in their calls for Zurabov to step down.
“Mikhail Yuryevich [Zurabov], we seem to be present at some sort of theater of the absurd,” said Alexander Chuyev, a deputy from the nationalist Rodina bloc. “We are listening to a long speech in which there is not one word about what you personally are answering for.”
Other deputies called for even more wide-ranging measures to tackle what is seen as a systemic failure within Zurabov’s ministry. “The Health and Social Development Ministry should be done away with and two ministries created in its place,” Communist faction chief Boris Kibirev said.
Earlier this month, First Deputy Prime Minister Dmitry Medvedev weighed in on the crisis, telling an online news conference that an urgent solution was required.

TITLE: In Brief
TEXT: <b>Electric Opening</b>
ST. PETERSBURG (SPT) — Electronics retail chain Moidodyr will open five new stores in St. Petersburg this year, investing about $1.5 million into the project, RBC reported Friday.
At the same time the company plans to close two or three unprofitable stores in the city. The new stores will be twice as large, occupying 400 to 500 square meters. The first store will open in April on Leninsky Prospekt.
The company currently operates over 20 stores. Last year the company recorded a net loss.

<b>Sberbank Loans</b>
ST. PETERSBURG (SPT) —Sberbank Northwest granted 48 loans of over 450 million rubles ($17.25 million) total value to small companies in January-March within its program for financing small business, Prime-Tass reported Monday.
According to the program, City Hall compensates a part of borrowers’ expenses and provides guarantees to banks.
Last year Sberbank Northwest issued 141 such loans of over 410 million rubles ($15.72 million) to small companies. The total volume of loans to small companies accounted for 62.6 billion rubles ($2.4 billion).

<b>LSR Bonds</b>
ST. PETERSBURG (SPT) — LSR-Invest, a part of LSR Group industrial construction holding, plans to issue bonds totaling three billion rubles ($115 million), Interfax reported Monday.
The bonds will be in circulation for four years. Interest rates were defined at 10.7 percent a year for the first coupon, which is due to be paid off June 5.
In December last year LSR Group issued bonds totaling two billion rubles ($76.67 million).

TITLE: Belarus To Charge For Pipe Land
PUBLISHER: Combined Reports
TEXT: MOSCOW — Belarus will charge Russia for the land underneath oil and gas pipelines that carry Russian fuel to Europe, seeking to compensate for Moscow’s decision to double the price of the gas it sells to its former Soviet partner.
“Nobody pays for land leasing now,” Belarusian President Alexander Lukashenko said in a decree released on his website Thursday. “This money will be additional revenue for the state budget.”
The leasing agreement must be signed by August, Lukashenko’s decree said. Russia will have to pay $5 million per year for the land, the Unian news agency reported. Belarus wants to raise at least $3.5 billion this year by increasing oil transportation and other tariffs, Lukashenko said Jan. 23. 
On Friday, Belarussian Prime Minister Sergei Sidorsky complained that Russian oil companies had failed to comply with agreements on crude oil deliveries to Belarus reached early this year, Itar-Tass reported. “We coordinated the formula and charges on crude oil deliveries to Belarus. Yet the question of profitability has recently popped up again,” he said, the agency reported.
Belarus and Russia signed an accord aimed at resolving trade issues between the two countries.
“The main idea of the agreement is to facilitate access of commodities to the markets of our countries in order to avoid restrictions,” Prime Minister Mikhail Fradkov said at a news conference in Minsk, Itar-Tass reported.
Bloomberg, SPT

TITLE: Duma to Review Innovation and Tax
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The State Duma on Friday agreed to consider several bills next month, including proposals to boost spending on innovation and to introduce market value to real estate for taxation purposes.
April’s agenda was approved by deputies prior to their week’s break from regular sessions, which they will use to work in their constituencies. The Duma is set to reconvene on April 4.
In a session April 27, a second reading of amendments to the Tax Code designed to encourage holding companies to register in Russia rather than in offshore tax heavens will be put forward for consideration. The changes envision lifting taxes on dividends received by holding companies from shares in their own subsidiaries if the holding’s stake consists of at least 50 percent.
Russian holding companies currently have to pay a nine percent tax on dividends if they originate from a Russian company and 15 percent if they come from a foreign company. The Finance Ministry calculated that the federal budget could stand to lose 30 billion rubles ($1.2 billion) annually if the bill becomes law, but the expectation is that holding companies will invest more heavily in their subsidiaries.
Also on April 27, Duma deputies will discuss the crucial second reading of a bill to assign market value to all real estate. The implication of the legislation would be that tax authorities could use the value to calculate property taxes on companies and individuals. Property is currently valued at significantly lower levels, but experts say the re-evaluation will take until 2014.
On April 4, the Duma will review a first reading of amendments to the Tax Code aimed at promoting the development of new technology by voiding the value-added tax on research and design work.

TITLE: Chavez Grants Belarus Oil
AUTHOR: By Maria Levitov
PUBLISHER: Bloomberg
TEXT: MOSCOW — Venezuelan President Hugo Chavez granted Belarus the rights to develop oil fields in the South American country, the government of the former Soviet republic said. 
The fields will be able to pump up to 2 million tons of oil a year (40,000 barrels a day), the government said in a statement carried by its Belta news service Monday. 
Chavez made the announcement during a meeting with Belarus officials in Caracas two days ago, Belta said. 
The Venezuelan leader has said that establishing closer relations with countries such as Belarus, China and India will help Venezuela diversify oil sales. Venezuela, the third largest OPEC oil producer in February, according to Bloomberg data, plans to reduce the percentage of oil exports it ships to the United States, Chavez has said.

TITLE: Liquidity Flows Squeezed As Tax Payments Surge
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: MOSCOW — Liquidity flows will tighten this week alongside a surge in tax payments, expected to peak Tuesday and Wednesday, meaning that a lot of the cash that would usually be flowing through the markets will instead be set aside.
The flow of capital has already been strained for the past few weeks by investors paying for their bids on Sberbank shares emitted last month. The same kind of pressure is expected from the auctioning off of at least $24 billion in Yukos assets over the next two weeks. 
Taken together, these factors are likely to result in surging rates on the money market, where short-term loans for investments are made. In a report last Tuesday, Renaissance Capital predicted that, at the height of next week’s tax payments, money market rates will climb to as much as 10 percent, nearly twice the levels seen last week. Getting a loan for an investment will therefore get much riskier.
“Current borrowing costs may be low on a historic level, but they are too much for many borrowers to meet,” said James Beadle, portfolio manager at Pilgrim Asset Management.
All of this comes at a time when fund managers are already quite wary of risk. Despite the fact that the RTS has recovered almost 70 percent of the value lost during the recent global correction, risk appetite dropped by about 12 percent this month, according to a Merrill Lynch survey of 119 global money managers. “This was one of the lowest readings seen in the last five years,” said the report, which was released Wednesday.
Merrill Lynch also found that investors were cutting back their exposure to volatile sectors such as oil and gas, favoring the much safer consumer goods markets, or turning their investments to cash. This month, the cash balance of an average portfolio went from 3.8 percent to 4.4 percent, the report said. 
“During the correction we clearly saw a drop in risk tolerance, as a lot of things were sold off. Now a lot of things are rallying again. But at some point we could see a much larger correction, especially in the fixed income market,” said Rory MacFarquhar, an economist at Goldman Sachs.
MacFarquhar said renewed confidence in the U.S. economy would be the best cure for the liquidity crisis and for investors’ aversion to risk. According to figures released Tuesday by the U.S. Commerce Department, construction started on 1.53 million new U.S. housing units in February, up nine percent for the month after a 14.3 percent drop in January. These figures, combined with the decision Wednesday not to raise key interest rates in the United States, helped dispel fears of a recession in the world’s biggest economy. 
“Once this risk aversion passes, people will sit down and take stock of fundamentals. And the Russia story is hard to ignore if that’s what you’re looking at,” MacFarquhar said.
But the runaway growth seen throughout this decade is almost surely a thing of the past. In the Merrill Lynch survey, only 11 percent of respondents still believe emerging market stocks are undervalued, down from 40 percent in January. Seventy-eight percent of respondents believe the values are now fair, leaving little room for upside. 
“The risk is still very much on the downside over the next few months,” said Chris Weafer, chief strategist at Alfa Bank.

TITLE: Foreign Enough to Follow The Rules
AUTHOR: By Vladislav Zabrodin, Pavel Karpunin and Alexei Nikitin
TEXT: On January 15, 2007 new regulations on the employment of foreigners in the Russian Federation entered into force. We provide a brief analysis of some of the key aspects of the new rules and how they affect both those wanting to work in Russia and the companies wanting to hire foreign employees.

The new laws
The new order of employment of foreign citizens in Russia is stipulated in the amended Federal Law No.115-FZ On the Legal Status of Foreigners dated July 25, 2002 and Government Decree No. 681 On Issuing Foreign Labor Permits dated November 15, 2006.
The law divides foreign citizens into three categories — Visitors, Temporary Residents, and Permanent Residents:
1. Visitors* are foreign citizens who come to Russia on a visa or who do not need a visa, and have neither a temporary nor permanent residence permit. The length of stay is defined by the visa. If a visa is not needed, the stay cannot exceed 90 days with the exception of cases provided for by the law (e.g. the stay may be extended for a period of up to one year if the foreigner has a contract to work in Russia for such a time period).
2. Temporary Residents are foreign citizens who have obtained a temporary residence permit. Such a permit is valid for three years. The only restriction for this category of individuals is the prohibition to work outside that region of the Russian Federation in which the temporary residence permit was issued.
3. Permanent Residents are foreign citizens who have obtained a permanent residence permit. It is issued for a period of five years. Foreign citizens belonging to this category do not need a work permit and may work anywhere in the Russian Federation.
Therefore, the only foreigners who need to obtain a work permit are those belonging to the first category. The new order for issuing permits to foreign citizens and the documents that need to be obtained are defined in the Procedure for Issuing Foreign Labor Permits. However, all permits for employment of foreign employees as well as individual work permits issued prior to the new regulations will remain valid for the full term stated in such permits.

A call for change
The authorities hope that the new rules will reduce the administrative barriers that put off foreign specialists from coming to Russia as well as reduce illegal immigration and expand the existing guarantees in place for foreigners.
Employing foreigners may carry undisputable advantages, such as higher qualifications and/or lower labor costs. Nevertheless, there are disadvantages connected with their employment — a complicated documentation procedure and the risk of losing money in case of violation thereof. Attempts to engage foreign employees may also be complicated by the fact that state employment agencies adhere to the principle that new jobs should be allocated to Russian citizens and that foreigners should be employed only in exceptional cases. 
The employer applying to register a foreign employee may also get refused, even at the stage of state approval, on the grounds that there are Russian citizens of the same profession or qualifications already living in the region. Moreover, even if the employer obtains a favorable decision, the employee may still have difficulties obtaining a visa.
Since in some cases engaging foreign employees is rather complicated, many companies prefer to bear the risk of administrative liability than go through a whole host of cumbersome procedures. 
Presumably, the new rules that increase administrative fines and at the same time simplify administrative procedures (in respect to the foreigners who don’t need any kind of visa), will reduce the number of violations in this sphere.

Restrictions and procedures 
The new regulations establish various restrictions and procedures to be adhered to. Some of them are briefly examined below.
From January 15, foreign citizens are not entitled to work, for example, in the retail of alcohol (including beer) and pharmaceutical products. For retail trade outside of stores (e.g. markets), the quota for foreign citizens is 40 percent; and from April 1 they are to be excluded entirely from this area of trade.
For foreigners who need a visa the procedure of obtaining work permits is still very long and needs to be simplified before it becomes a viable alternative to using foreign workers in a manner that circumvents legal procedure.
The abovementioned restriction to limit work to the region for which a permit is issued may be modified for an employee sent on a business trip, for example. The maximum length of such trips depends on the business at hand and whether the employee is a Visitor or Temporary Resident. For Visitors the limit varies from 10 to 60 days within the term of the work permit; for Temporary Residents – from 40 to 90 days within 12 calendar months.
The permit for “attraction and use” of foreign employees, issued to employers by the regional department of the Federal Migration Service (FMS), requires several documents to be submitted, among which is a draft of the employment agreement or other documents confirming a preliminary agreement with foreign citizens. When applying, the requirement to pay a state duty (3,000 rubles for each foreign employee) should be checked and monitored very attentively, as there have been many cases when such payments were made based on erroneous data, causing refusal in the processing of documents, with the result that companies lose money, time and are in some cases unable to carry out the projects for which they had invited the foreign employee(s).
Foreigners exempt from visas
The new regulations establish a revised and simpler procedure for the employment of foreign citizens who do not need a visa to enter Russia (citizens of CIS states except Georgia and Turkmenistan) — a welcome innovation to the law. If an employee from an exempted country already possesses a work permit, then the employer is not required to obtain any additional permits.
Such a work permit is obtained by submitting to the FMS an identity document, migration card and proof that the state duty (1,000 rubles) has been paid. 
In addition, if the period of the permit exceeds 90 days, medical certificates confirming the absence of drug addiction, infectious diseases and AIDS need be submitted to the regional department of the FMS within 30 days of obtaining the permit.

Liability
Though the procedure of employing foreigners is complicated, the sanctions for not adhering to them strictly may be substantial. For example, fines exist of up to 1,000,000 rubles ($38,500) for a company violating foreign citizen employment rules and of up to 50,000 rubles for violation of the rules by company executives.
As reform of the foreign citizen employment system continues, further regulations will be stipulated in future government acts that are mentioned in the law.

Presence of the applicant 
An additional administrative barrier for carrying out business in Russia, including foreign companies, has been the necessity that the applicant be personally present at the registering of any amendments in statutory documents. This practice was introduced by the tax authorities at the beginning of 2006, after which even the notarized powers of an attorney were not accepted by the registering authorities (i.e. tax inspectorates) and the CEOs of companies were forced to spend their time waiting in long lines. Another option was to send documents by mail, which entailed long delays (up to two to three months).
Later this provision stipulating the personal presence of the applicant was rendered invalid by the Supreme Court. The registering authorities, however, reacted differently than anticipated. For example, Tax Inspectorate No. 46 in Moscow opened two service windows for the acceptance of documents on the grounds of the powers of attorneys, but the documents confirming registration were only delivered through the post to the legal addresses of the companies, causing delays. Paying no heed to the Supreme Court decision, Tax Inspectorate No.15 in St.?Petersburg still only accepts documents from the CEOs of companies in person or by mail.
Formally such a policy aims to create barriers preventing the registration of fictitious organizations, but in practice it complicates the position of valid organizations, especially if the parent companies are registered abroad.

Conclusion
The new changes simplify some aspects of employing foreign citizens in Russia. However, many aspects await further regulation with a clearer set of rules and, as many employers hope, a more “user-friendly” system, which would allow spending less time in lines for permits and more time in actual production. There are also difficulties tied to inconsistent enforcement of the regulations throughout Russia’s regions, which sometimes introduce local regulations in addition to the federal ones.
As legislation and enforcement practices in Russia evolve, we hope to see rules that are more uniform and that will take into account the interests of legitimate employers. We will keep a watchful eye on new changes in the future.

Vladislav Zabrodin is managing partner, Pavel Karpunin lawyer and Alexei Nikitin junior lawyer at Capital Legal Services International, L.L.C.

TITLE: Democratic Local Firm Honored
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Thirty-four companies were victorious in the ‘Worldwide Award for the Most Democratic Workplaces’ sponsored by WorldBlu, Inc., a Washington-based organization specializing in organizational democracy. The premier list was published earlier this month and, in something of a surprise, included a St. Petersburg-based company.

From the U.S., Canada, Netherlands and Russia, the selected businesses and non-profit organizations represent industries such as technology, telecoms, media, manufacturing and retail with combined annual sales of about $3 billion.
“Democratic organizations operate on freedom, not fear. Greedy, me-first, command and control business models are officially old school. These organizations represent the new school of business design,” said Traci Fenton, WorldBlu founder and CEO.
Private companies, non-profit associations and governmental bodies that employed over five people and had been operating for over three years could apply for the award. Employees completed a survey evaluating their organization’s application of ten democratic principles such as decentralization, accountability, choice and integrity on a leadership level, individual level and systems and processes level.
The “WorldBlu List of Most Democratic Workplaces” is a list, not a ranking. In the future organizations will be honored for the length of time they stay on the list.
“Democratic companies understand that the future of business is less about pomp and more about participation, less about titles and more about meaning, and less about fiefdoms and more about being equal in order to be competitive in this new, democratic age. This is the beginning of a movement,” Fenton said.
At Linden Lab, maker of Second Life, a popular online virtual world, key financial data is openly shared in real-time on giant flat-screen TVs. Employees are encouraged to choose their work rather than be told by someone else what to do.
Great Harvest Bread Company calls their model a “freedom franchise” because it “nurtures creativity, excellence and a true sense of ownership.” The Grammy Award-winning Orpheus Chamber Orchestra based in New York is completely ‘conductorless,’ rotating leadership amongst orchestra members.
At Continuum, a design consultancy in Boston with offices in Milan and Seoul, they have “open town forums” once a month. At Equal Exchange, the employee-owners elect their Board of Directors and hold six of the nine seats. GE Aviation’s Durham Engine Facility is structured horizontally, with just one plant manager for 260 employees.
“We try to stay away from hierarchy and instead share information, and promote communication and common goals across all levels and departments in the company. Hierarchy just gets in the way when you’re running a fast-paced, growing company,” said Seth Goldman, founder and CEO of Bethesda, Maryland based Honest Tea.
“To ensure our organization is a world-class working environment, we focus on employee engagement through our open-office concept to create alignment and trust with our employees. We know that our steady growth and customer satisfaction relies on our ability to carry out these democratic processes,” said Brian Scudamore, founder and CEO of the $158 million junk removal company 1-800-GOT-JUNK?
At Zingerman’s Community of Businesses in Ann Arbor, Michigan, a democratic workplace impacts the bottom-line. “Most people want to be a part of something greater than themselves, to contribute positively to the world around them, and we’ve always worked to give them that opportunity,” said Ari Weinzweig, CEO.
“By involving as many people as possible in what we do at every level of work, we’re convinced that we get better results on all three of our bottom-lines — the quality of our food is better, our service is better, and our financial results are better as well,” Weinzweig said.
Managers believe that democratic organizations are more likely to succeed in attracting and retaining top talent, boosting innovation and harnessing the full potential of the next generation workforce.
“At Guayaki we are pioneering a new business model that demands creative solutions and we find that through democratic practices we bring our whole selves to the process and that elevates the quality of our decisions,” said Chris Mann, CEO of Guayaki Sustainable Rainforest Products in Sebastopol, California.
Ann Price, founder and CEO of the software firm Motek in Beverly Hills, California agrees. “It’s an incredibly fierce advantage,” she said.
A notable stand-out on the list is i-Free, a company based in St. Petersburg. Managers of the mobile content and services provider with millions of subscribers in Russia, India, Ukraine, Kazakhstan and Brazil saw the award as a logical result of i-Free’s corporate culture and policies, aimed at building the strongest professional team in the industry.
“We owe our success and solid market stature to our human, intellectual capital. We have built a strong team of professionals, each a peerless expert in their field. We all share the same values, most notably, mutual respect and equal opportunity for all,” said i-Free general director Kirill Gorynia.
i-Free employs over 250 people in its offices in six countries. The company’s organizational development and HR department is committed to fostering a favorable work environment conducive to the individual initiative and professional growth of each employee.
i-Free core values are personal initiative and growth, individual freedom, trust, responsibility, mutual respect and encouragement. These values govern relations between employees, nurturing a positive internal climate and benefiting many business processes.
“Because we all share these values, we can freely exchange information inside the company, promptly react to any technological change, develop and implement cutting edge ideas,” said Alexander Kubaneishvili, head of the department for organizational development and HR at i-Free.
WorldBlu identified the following organizations as the most democratic workplaces in the world for 2007:

1. 1-800-Got-Junk? – Vancouver, Canada 
2. AIESEC International – Rotterdam, Netherlands 
3. Axiom News – Peterborough, Canada 
4. Berrett-Koehler Publishers, Inc. – San Francisco, California 
5. BetterWorld Telecom – Reston, Virginia 
6. Beyond Borders – Norristown, Pennsylvania 
7. Collective Copies – Florence, Massachusetts 
8. Continuum – West Newton, Massachusetts 
9. Dancing Deer Baking Company – Boston, Massachusetts 
10. Equal Exchange – West Bridgewater, Massachusetts 
11. FBS Data Systems – Fargo, North Dakota 
12. GE Aviation – Durham Engine Facility – Durham, North Carolina 
13. Great Harvest Bread Company – Dillon, Montana 
14. Guayaki Sustainable Rainforest Products, Inc. – Sebastolpol, California 
15. Honest Tea – Bethesda, Maryland 
16. i-Free – St. Petersburg, Russia 
17. KI – Green Bay, Wisconsin 
18. Linden Lab – San Francisco, California 
19. Motek – Beverly Hills, California 
20. New Belgium Brewing Company – Fort Collins, Colorado 
21. Orpheus Chamber Orchestra – New York City, New York 
22. Rite-Solutions – Middletown, Rhode Island 
23. Roche Salon – Washington, DC 
24. Sedgebrook – Lincolnshire, Illinois 
25. South Mountain Company, Inc. – West Tisbury, Massachusetts 
26. SRC Holdings Corporation – Springfield, Missouri 
27. TakingITGlobal – Toronto, Canada 
28. Ternary Software – Exton, Pennsylvania 
29. The Do LaB Event Creations – Los Angeles, California 
30. The Russell Family Foundation – Gig Harbor, Washington 
31. Threadless – Chicago, Illinois 
32. Union Cab of Madison Cooperative – Madison, Wisconsin 
33. Zaadz – Topanga, California 
34. Zingerman’s Community of Businesses – Ann Arbor, Michigan

TITLE: The Gap Between Law And Reality
AUTHOR: By Maria Chernobrovkina
TEXT: “We have recently seen a number of attempts to simplify employment procedures for foreigners in Russia. Federal legislation has changed. However, these changes have mainly been targeted at attracting labor migrants. And thus responsibilities and liabilities for employers have become more stringent.
Of course, that the authorities introduced a “one window” principle for getting work permit and notification orders for registration in Russia was a step in the right direction. But demand for foreign workers was high, and for a long time there was a labor deficit. All this resulted in “logistical problems” and at the beginning of the year the migration authorities were faced with notoriously long lines of people.
But this is not the only problem. Companies could not physically get all the required documents processed in time yet within the law failure to do so already implies serious penalties. This situation leads to risks and imbalance. We either need to introduce the technical possibility that all the documents required by the new laws can be processed in time or we need to postpone the related sanctions and penalties until things calm down.”

Maria Chernobrovkina is executive director of the American Chamber of Commerce in Russia, St. Petersburg chapter.

TITLE: Careering to Crash & Burn
AUTHOR: By Olga Kalashnikova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Waking up in a state of utter exhaustion, the last thing in the world one feels like doing is going to work. The rhythm of today’s professional is dynamic and tense —a career needs building, and if that means working overtime or even at weekends, then so be it. Professionals will go several years without holidays. Initially they are very successful, but then something breaks. We look at the concept of ‘burnout,’ who is subject to it and how it can be prevented.
The term “burnout” was coined by the American psychiatrist H.G. Freidenberg in 1974 to characterize the emotional state of people working within a person-to-person system in a stressful atmosphere. Christina Maslach, a social psychologist, defines it as being physically and emotionally worn out. 
Nobody is entirely immune to this syndrome. But some specialists are more susceptible than others.  
“First of all, these are employees who are emotionally involved in their profession,” said Anna Oblomova, a consultant at Top Hunt International Selection. “Their job is usually connected to communication with people. It follows that potential victims are managers, executives, sales managers and specialists, journalists, doctors etc,” she said. 
“Moreover, this ‘risk group’ often includes employees who are subject to stress: crisis managers, conflict-managers, telephone consultants,” she said. 
It is the hardworking and purposeful who usually gets more worn-out. 
“The main reason for the disease is an overestimation and squandering of one’s resources. Healthy ambition is good, but when it becomes a goal without limits the problems start.
“In the desire to do more today than yesterday and tomorrow more than today people forget to push the pause button, to rest and restore their powers.”
Another cause of burnout can be connected to employers who keep giving more tasks to those who have done what they’ve been given. Sometimes they promote employees who initially are unable to meet these demands. 
“Personal conflict can also cause the disease. Suddenly a man realizes that he is an alien in the company. The job is not what he wants to do or he is not well-suited to corporate culture,” Oblomova said.
Environmental factors like the seasons — the autumn and long winter — also affect one’s psychological state.
Other factors include the exertion of too much control over employees and the cultivating of a work ethic that does not correspond to the values of the worker. 
Although salary can influence one’s emotional state, it is not the most important factor. 
“An increase in salary is not a panacea,” said Oblomova.
Burnout is a problem both for the employee and the whole company. The emotionally exhausted person is irritated by everything: clients are annoying, the authorities are disgusting. It is like a virus and a danger for everyone else in the vicinity. 
“The employee has to determine his life goals. One should always listen to one’s inner condition, to be aware of what causes discomfort what brings satisfaction in his work. And then they should build their careers based on this,” said Oblomova.
If you are already worn out, the first step is to try to appreciate your condition, to find reasons behind your dissatisfaction and determine what you want from life. 
“One should learn to relax, to get rid of emotional stress.  It can be through dancing, yoga, football, basketball, a massage or swimming. Different hobbies and studies are also useful,” said Oblomova. “These activities should be unrelated to your job. It is much better to try something different like driving, cooking or computer programming.”
Weekends spent out in the country can also revitalize an exhausted person. 
The main point of consideration in the fight against burnout is time-management. One should find time for oneself and one’s close ones.  We get used to planning our working day, but our private life also needs planning. Every free moment should be used carefully. 
“There is the principle of ‘here and now.’ Full immersion in work when at work and then the leaving behind of all these problems at the end of the working day when one’s private life begins.” 
The employer, in turn should take measures to prevent burnout. It is important to determine every worker’s limits and use his talents and capacities efficiently. "They should give encouragement to their staff and not forget to encourage their private life. The company should fight with “workaholicism,” realizing that it does more harm than good.”

TITLE: Managers Settling On Northen Capital
AUTHOR: By Olga Kalashnikova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Only several years ago it was every manager’s goal to move from St. Petersburg to Moscow. Russia’s capital has always exerted a powerful influence in the business world, regarded as the place to make money, contacts and take one’s career to the next level.
But while the two cities remain very different, in recent years there has been a marked trend for professionals to return from Moscow to St. Petersburg. People are coming home. We investigate the differences in lifestyle between the two capitals and ask why so many people are coming back home.
“The active period of ‘capital migration’ fell between 2003 and 2004 when almost 20 percent of managers left the city in search of better money and more opportunities,” said Anna Sagaida, chief consultant and head of Top Hunt International Selection Office in St.Petersburg. 
Indeed reasons for leaving appear obvious: there are more job vacancies in the capital, and the salaries tend to be higher. 
Some of those who leave easily adapt to a new rhythm, start a career and stay in Moscow for good.  Nevertheless, many others fail to fully accept the new mentality and life style.
“It’s no secret that people in St. Petersburg generally seem to Muscovites too relaxed and impassive, if not slow and lazy, while the former often see the latter as workaholics obsessed with making money,” said Marina Goryaeva, consultant at Triza Exclusive St.Petersburg. 
Of course some people manage to have it both ways — working in Moscow, while actually living in St. Petersburg.
“This group of professionals tends to live here and there, coming home every weekend and grudgingly returning to their offices in Moscow every Monday morning,” said Goryaeva. 
“As a rule, they are ready to come back if there is a choice of vacancies offering a decent salary.”
 Goryaeva herself moved to Moscow in 2005, partly because her friends had already done the same.
“But mainly it was that I decided to change something in my life,” she said. 
Working in St. Petersburg as a translator and administrative assistant at a point when she was planning to change jobs she started searching for vacancies in both cities. 
“But two months later I realized it was not my job or city that I wanted to change but my profession.” 
She joined the company Triza Exclusive and started her new career.
Following the example of friends is a common reason to move to Moscow. This happened to Natalia Malinova, manager of Elite Holding’s St. Petersburg office. Some friends opened a catering company and offered her the position of general manager.
Nonetheless, the situation is changing. Approximately half of those managers who left for Moscow are now returning to St. Petersburg. 
“There are two kinds of reasons — emotional and rational ones,” explained Sagaida. 

Rational Return
Rational reasons are connected to the gradual shift of interests from Moscow to St. Petersburg. The latter has become more attractive for investors, with an influx of large international companies creating many more job opportunities. 
“At the same time there is a shortage of qualified employees. There is the phenomenon of a  candidate’s market,”said Sagaida.
“It is not candidates who are competing for a particular job, but employers who fight with each other for the best managers.”
With rapid growth in the IT, retail and construction sectors, the geographical boundaries between regions are becoming blurred. 
“We can see the process of a so-called merging of borders, first of all between the two capitals, but other regions are also involved,” said Goryaeva.

TITLE: Foreigners Must Get Tested For Drugs
AUTHOR: By David Nowak
PUBLISHER: Staff Writer
TEXT: Expatriates beware: You now have to prove that you aren’t a drug addict to work in Russia. A little-noticed regulation came into effect at the start of this year that requires foreigners who work or intend to work here to have their blood tested for traces of drugs. Evidence of the drugs is reason for authorities to refuse to issue a work permit.
The regulation indicates that authorities want to know whether a foreigner is addicted to hard drugs such as cocaine or heroin, not marijuana or hashish.
“On receiving a work permit, the employer must present medical certificates confirming the absence in the employee of illnesses associated with drug addicts,” the regulation says.
Foreigners should not be concerned about the fact that the certificate is only valid for three months, the Federal Migration Service said.
“The regulation says that documents are to be submitted once in a year,” a service spokesman said Thursday. “So a certificate of a drug test will also be needed only once.” 
But if a foreigner wants to undergo an operation at a hospital or apply for a loan at a bank, he will need to present a certificate that is still in effect.
If that comes more than three months after the test when the work permit was issued, the foreigner will have to go for a second test.
Essentially, the arrangement is the same as with HIV testing, which is mandatory for both work permits and one-year visas.
A 1995 law aimed at preventing the spread of AIDS requires the HIV test. That certificate also lasts for three months, and a foreigner may need to take the test again to receive certain goods or services during the year. 
Foreigners contacted Thursday were in the dark about the drug test regulation.
“I’ve never heard about such tests,” said Richard van Wageningen, a Dutch citizen and CEO of British Telecom for Russia and the CIS. “I barely needed my HIV test.”
Roland Nash, a Briton and head of research at Renaissance Capital, expressed surprise. “They are just increasing the number of hoops that one has to jump through for the honor of working in this country,” Nash said.
He said Russian bureaucracy seemed to be getting worse. 
“It is just another inconvenience that makes things more complicated,” said Marisa Fushille, director of the Moscow American Center, a public library. “But if it is a law, there is no way to avoid it.”

Staff Writer Nabi Abdullaev contributed to this report.

TITLE: Salaries Soar as Big Companies Splash Out
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: St. Petersburg’s largest employers demonstrated generosity on a spectacular scale last year, increasing salaries by an average of 14 percent. Some companies offered increases of as much as 50 percent, according to ANCOR recruiting company’s latest survey of salaries.
The survey published last month of trends in the local labor market analyzes 78 foreign and Russian companies employing over 33,000 people.
“Companies have become more concerned about personnel and their motivation. Employers try not merely to increase salaries or offer privileges at random but to introduce, develop and support a systematic system of compensation. For that purpose employers hire qualified compensation specialists,” said Anna Yegorova, head of the salaries survey department at ANCOR.
Yegorova noted that the rate of salary growth across different industries is comparable. As for specialist groups, she indicated that production personnel and engineering specialists are enjoying the most rapid growth in pay (23-24 percent a year), sales people are getting a 25-30 percent increase and IT specialists 22-23 percent increase.
“The salaries of IT and sales specialists traditionally grow fastest of all. The significant increase in the salaries of production specialists is a result of demand for workers from new production enterprises and expanding local companies,” she said.
After a one-day strike and a series of negotiations, the Ford Motor Company signed a collective labor agreement with its workers on March 1. According to the document, the company will increase salaries by 14 percent to 20 percent this year and provide other social and financial improvements.
“The signing of this collective labor agreement is satisfactory for both parties. By increasing salaries and expanding its social benefits Ford will remain one of the most competitive employers in the country,” said Theo Streit, general director of Ford.
The social package at Ford plant in Vsevolozhsk, Leningrad Oblast, includes health insurance, catering, transportation of employees to the plant, additional payments to employees with children, interest-free subsidies and discounts on buying a car.
According to the ANCOR survey, accountants and financial specialists also saw significant increases in their salaries (18-19 percent a year), administrative personnel and HR specialists – at 17-18 percent, buying and logistics specialists – at about 17 percent.
St. Petersburg employers traditionally offer a base salary and compensation for night shifts and overtime. Almost all of the survey’s participants said they increase wages periodically. About 70 percent of companies included in the survey increased salaries last year. The average increase was reported at 14 percent. Some companies increased salaries by 30 percent or even 50 percent.
Most respondents (about 90 percent) are planning to increase salaries this year. The average planned increase is 12 percent, while the highest planned increase is 20 percent.
“Salaries mostly depend on the work of individual employees. Bonuses could also depend on a department’s or company’s performance,” Yegorova said. As a rule, bonuses for specialists vary between 18 percent and 20 percent of the base salary, for managers — between 22 percent and 30 percent.
“The importance of financial motivation mainly depends on the personality of an employee. Some people value the opportunity to develop themselves and advance their career, others value a comfortable working environment and good emotional climate,” said Ksenia Titova, head of motivation and salaries at Power Machines open joint-stock company.
“However, financial compensation is the core factor when people choose a company and sign a labor agreement,” she said.
“Increasing competition between employers makes bonuses more important. A correct bonus scheme delivers a visible effect on both an employee and the company. It takes into account individual efficiency in reaching company goals,” Titova said.
“But bonuses should not harm the competitiveness of the base salary and compensation package, no matter how attractive they are,” she said.
According to ANCOR, a compensation package usually comprises catering (73 percent of respondents) and additional health insurance (78 percent). Average spending on catering is $2.81 a day per employee, while the average cost of health insurance is $471 a year.
Many companies offer financial support to employees in extreme situations (74 percent), presents for employees’ children (62 percent), bonuses to employees celebrating anniversaries (42 percent), opportunities for sporting activities (45 percent) and pay a full salary during a period of ill health (35 percent).

TITLE: A Floral Arrangement
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Four in ten businesses around the world have no women in senior management and this proportion has remained relatively stable over the last three years, according to the latest findings from the Grant Thornton International Business Report, published earlier this month. In Russia, women are gradually giving up their positions, especially in Moscow and St. Petersburg.
The survey discovered that since 2004 the global figure for businesses with ‘no women’ in senior management has remained unchanged at 38 percent. The percentage of women in senior managerial positions globally has grown slightly from 19 percent to 22 percent.
“It is disappointing that the participation of women in senior business management has not increased more dramatically over the last three years,” said April Mackenzie, executive director of global standards for Grant Thornton International.
“It is however encouraging to see some of the Asian economies leading the way. North American and European businesses in particular continue to disappoint,” Mackenzie said.
The Philippines is the only country where women have parity to men in senior management roles. 97 percent of businesses in the Philippines have women in senior management positions, the highest figure in the survey; the lowest is found in Japan (only 25 percent).
In China, Malaysia, Brazil, Hong Kong, Thailand and Taiwan over 80 percent of companies have women in top management. In Brazil 42 percent of managerial positions are held by females, in Thailand – 39 percent, in Hong Kong – 35 percent. Lowest in the list is Japan with just seven percent, while three European countries — Luxembourg, Germany and the Netherlands — have females occupying 10 percent, 12 percent and 13 percent of management respectively, The figure in the U.S. is 23 percent.
In the Netherlands only 27 percent of companies have women in top management positions, in Luxembourg 37 percent, in Germany 41 percent, in Italy – 42 percent, in France – 58 percent, in the U.S. – 69 percent.
Countries showing a fall in the number of businesses with female senior managers include Mexico (a drop of 24 percent), Russia (15 percent), Poland (nine percent), Italy (six percent), New Zealand (six percent) and the U.S. (six percent).
Countries where female participation at a senior level has increased are Spain (16 percent), India (14 percent), Taiwan and the Philippines (13 percent), as well as Hong Kong and Sweden (both nine percent).
“Hopefully in the years ahead we will see a change as more women play increasingly prominent roles in public life. Such influential figures include Indra Nooyi, the new chief executive officer of PepsiCo, Angela Merkel in Germany, Segolene Royal in France and Hilary Clinton in the U.S.,” Mackenzie said.
Over half of all European businesses surveyed (52 percent) have women occupying senior management positions, while in NAFTA countries 68 percent of businesses have females in senior roles.
Compared with three years ago, European businesses have four percent more women in senior management, whereas NAFTA countries have six percent more. The EU’s proportion of women in senior management has remained stable at 17 percent, while NAFTA’s figure has increased from 20 percent to 23 percent.
In Russia the share of companies with no women in top management increased from nine percent to 18 percent over the last three years.
In 2004 Russia was ranked above the Philippines with 89 percent of companies having women in top management. Three years ago, women held 42 percent of senior positions in Russia, at the moment they account for only 34 percent. The number of companies employing over three women in top management decreased from 39 percent to 31 percent.
Surprisingly, in Moscow and St. Petersburg the share of women among top managers is lower than in other regions (31 percent as opposed to 36 percent), according to the report.
“The results of this survey are similar to what we see, if we consider only companies’ top representatives to be top managers,” said Alexei Zelentsov, regional director for the Northwest at Kelly Services recruiting agency.
“But if we consider the whole board of directors to comprise top managers, I can’t agree with the figures. According to our practice, more and more women in Russia are occupying higher management positions,” Zelentsov said.
He indicated that women are most likely to get employed as top managers in finance (financial director, senior accountant), HR management and marketing.
Zelentsov did not relate the decrease in the share of female top managers with any kind of gender stereotype.
“Russia does not have a compulsory share of women, national or sexual minority groups in private companies. A company’s owners and top managers choose the most experienced and professional candidates for its managerial positions. The sex of the candidate is irrelevant,” he said.
“It probably reflects an objective reality. More professional top managers can be found among men than women,” Zelentsov said.
“From what I’ve been observing, discrimination in terms of gender, nationality and age has only been increasing in Russia over the last few years. Such a tendency is depressing. World history proves that discrimination leads nowhere,” said Olga Gozman, general director of Begin Group.
She related the decreasing numbers of women in management to the traditional Russian way of life.
“People are used to thinking that the social role of a man is to provide the family with money while the woman should look after the house and children. This stereotype unconsciously affects both men and women,” Gozman said.
In Moscow and St. Petersburg earnings are higher and more men can provide for their families single-handedly, she suggested. On the other hand, talented men from the regions are moving to Moscow and St. Petersburg to launch their careers. 
“The number of qualified male managers in the regions is decreasing and more and more women are starting their own businesses there,” Gozman said.

TITLE: Working Towards The ‘Right’ Kind of Worker
AUTHOR: By Anna Shcherbakova
TEXT: Last week I attended a conference where I heard marketing-people discuss ways of dealing with consumers. One speaker spoke of the need to find more sophisticated strategies of communication.
 
According to him, in the autumn of 2006 the Russian market reached an important stage in its development — the average salary reached $400 a month. This kind of income revolutionizes consumer behavior and marketing strategy needs to respond.
First of all it was a complete surprise for me to see so many dozens of local people involved in marketing. The St. Petersburg market has always suffered from a shortage of such professionals, which was related to a shortage in demand. The few companies to foresee the importance of marketing had to import managers from Moscow or abroad. 
Secondly, seven years ago the average salary was only $100 a month. 
To be honest, many of my friends and I receive more than $400 a month, which is good. But our wages have not increased four times in seven years, which is sad.  
Wages increased from 14 percent to 20 percent last year according to research done by recruitment companies. But the salaries of some professionals, like the directors of IT companies, project managers or engineers, grew by a good 50 percent, recruiters said. These specialists often ‘blackmail’ their bosses by threatening to leave for another company, forcing them to make a counter offer with a significant rise. And the situation will only get worse for employers because of the lack of qualified personnel. About 60 percent of employers are faced with a shortage in qualified workers, according to another piece of research. A combination of economic growth and a stagnation in professional education is the reason behind the trouble. 
As well as engineers and managers,  manual workers make up a large part of ‘job seekers.’ Their salaries have increased to astronomically high levels, and I assume that these workers, as well as sales managers and retail staff, have been the real winners in terms of salary increases over the last few years. 
Sales people were once thought of as ‘avantgarde,’ when they started to form a new type of labor supply four to five years ago. 
Now this trend has spread to other spheres and already professionals such as marketing managers are in great demand. But can this profession just appear from nowhere in a couple of years? 
The salaries of sales people in real estate and construction can reach $4,000 a month, while their bosses can earn twice as much, according to a recruiting firm consultant. 
Project managers and chief-engineers in the same industry, who are in high demand, have an average wage of 70,000 rubles ($2,700), but with bonuses their monthly income could reach 100,000 rubles ($3,850), the consultant added. 
What can the companies in need of extra workforce do in this situation? Factories claim they lack qualified, levelheaded workers. But Toyota found up to 10,000 candidates to fill only 600 vacancies at its new St. Petersburg factory. 
It is no secret that Japanese companies traditionally prefer hiring people ‘for life.’ They prefer to hire the ‘right’ kind of people and train them themselves rather than steal qualified professionals from their competitors. Such workers will probably stay loyal to the company until the end of their careers.

TITLE: Which Recruiting Company Fits Your Needs?
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: In some things in life, size is everything. But not when it comes to choosing your recruitment agency, it seems. While some industry players claim that in recruitment Big means Big Possibilities, others point to the “hand-picking” approach of smaller agencies as more careful and precise.
The question is: What size recruitment agency are you looking for — Small, Large, or Efficient?
The choice of which recruitment company to use is often governed by the client’s needs. The major difference between recruiters working on the Russian market is not even their size, but their strategic approach, said Yury Mikhailov, managing partner of Consort recruitment agency.
“The bigger ones aim at continuous expansion of their business, targeting a variety of businesses, invariably selling their services left, right and across the board. Meanwhile, smaller agencies most often cater to a niche, looking after the more discerning clients,” Mikhailov said.
The two approaches logically result in two different types of service.
“It’s like hand assembly versus conveyer belt technology. Small firms practice a more thorough and a personal approach towards applicants and clients. However, they need more time to complete the task,” said Yelena Lavina, head of public affairs at THI Group recruitment.
With larger agencies spending more on advertising, the small-size recruiters can also offer lower prices, said Yury Ivanov, general director of Arkadia++ recruitment firm, which specializes in finding IT specialists.
Oksana Pochtivaya, operations manager at Ancor, one of the top two biggest recruitment companies in Russia and in St. Petersburg, agrees in part.
Small agencies can sometimes be more flexible in terms of price, recruitment procedure and client choice, while “a large recruiter, concerned about its reputation, could decline to work with small, unfamiliar clients,” Pochtivaya said. When it comes to mass employment, especially for industrial enterprises, or staff hunting in several sectors at once, however, smaller firms rarely win over the recruitment industry’s major players, since they simply lack resources.
“Every single recruiter has a limit to their abilities, they cannot conduct more than, say, 10 interviews a day. But if you are opening a hypermarket and need 300 employees, a small agency would not deal with it in time,” Lavina said.
The flexibility that comes when dealing with a larger agency extends further. Clients seeking multiple services value larger agencies since “they cover all levels of staff recruiting from seasonal workers to top managers operating practically in all business areas,” Pochtivaya said.
Ivanov added that larger search companies expand their operations to include additional services like financial assessment and leasing, which can offer a more all-in-one package.
The universal approach falls down, however, when it comes to fast decision-making. The corporate hierarchy of large firms makes “the question of accepting the order and terms of contract [that] could be settled within a day less likely to find quick solutions,” Ivanov said.
However there are also intrinsic differences between large and small companies. Mikhailov believes that “instead of the three to five best professionals found by a small recruiter, the larger agency presents 10 mediocre candidates.”
Larger agencies “send more resumes, rather than carefully select the candidates,” while smaller search firms combine elements of direct search with database selection, which Mikhailov said leaves “time to think the search through and agree with the client on the best approach, timeframe, and expected results.”
Though large factory enterprises have little option but to pick a recruiter that can manage the size of the order, small and medium-sized businesses tend to look for a staffing agency with clear specializations, disregarding the agency’s size.
“The most effective are recruiting companies that specialize in tourism,” said Natalia Yesakova, personnel director of Continent Express, a corporate tourism firm.
“They might not be very large, but they’re “active,” with experience in recruiting staff for the tourism sector,” she said.
As well as the industrial sector, Yesakova said larger recruiters are often employed for finance and IT staff searches.
All the different factors fall out of the window, however, when the client is faced with an actual person, the recruitment officer.
Anastasia Kaslina, an expert with Begin Group, an education and recruitment market research and analytical agency, said one recruiter can decisively influence a job search more than agency size and reputation.
“The quality of recruiting depends on the professionalism of a particular specialist, who can move between companies. Only a few agencies have developed their own methods guaranteeing consistently high results regardless of a recruiter’s personality,” Kaslina said.
Ancor’s Pochtivaya added that larger agencies also practice personnel training to guarantee the professional level of their staff.
And yet, at the end of the day, the choice of recruitment agency sometimes goes on chance, or even the client wishing to “stick with the devil he knows,” Kaslina said.

TITLE: The Developed Linguist: Passions of the Tongue
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: As St. Petersburg continues to attract foreign companies, foreign language speakers are increasingly in demand. Recruiters point out that now “fluent English” is often a must not only for administrative positions, such as interpreters, translators, secretaries, personal assistants or office managers, but also for different technical specialists, engineers and accountants.
The majority of job descriptions now include foreign language requirements that split Russian society into two parts: people who have a command of foreign languages and those who don’t. 
“Now a candidate’s linguistic competence indicates the level of their development in general, their education and professional competence,” said Irina Yakovleva, head of careers at  the Stockholm School of Economics. 
According to the recruiters the language clearly most in demand is English, followed by German, then Finnish, French, Italian, Spanish, Swedish, Turkish, Serbian, Chinese, and Japanese. 
As well as administrative positions, there is a need for specialists who speak business-standard English in manufacturing, auditing and consulting, banking, sales, logistics, HR and finance. Personal Assistants, help desk staff, translators, guides, and personnel working in the tourism sector are often required to speak additional foreign languages, while usually the only requirement for top managers is fluent English. 
“It’s interesting that many Asian companies do not require candidates to speak the company’s native Asian language, and consider it enough for their personnel just to have a decent level of English,” said Alexei Zelentsov, regional manager of the St. Petersburg branch at Kelly Services.
One of the most difficult jobs for recruiters is to find specialists in “non-linguistic” positions, who speak a rare language. “We have recruited accountants for the financial department of a large Western company, who needed knowledge of at least two foreign languages — English and something rare, for example, Serbian, Turkish or Ukrainian,” said Yelena Sapogova, consultant at THI Selection. 
“We managed to find people who fitted the requirements and had, at least, some work experience in finance. The company recruited them because of their language competence and then started training them in accountancy.”
Where English is the working language, foreign companies only select applicants who speak it, but other employers have a wider choice of criteria. 
“A good educational background presupposes the knowledge of at least one foreign language,” said Marianna Slivnitskaya, general director at Begin Group. “Therefore, the question becomes how employers’ expectations correspond with a candidate’s linguistic ability.”
According to recruiters, a successful candidate should not only speak foreign languages and have a good education but also have relevant work experience. “With demand exceeding supply, it’s much easier for such specialists to find a job than for employers to recruit them,” said Slivnitskaya.
The main problem is lack of specialists who consider English the main international language, said Anastasia Sedikh, commercial director at EMG Professionals. “It’s a pity when deficiency in English hinders a highly qualified technical specialist from applying for a good position.” 
In their CVs, many applicants “exaggerate their language skills hoping that it will be taken for granted without checking,” said Olga Andreyeva, business development manager at Coleman Services.  “Therefore, we need to explain to foreign employers that at present in Russia only professional linguists have the level of the linguistic competence they are used to when hiring workers abroad.”
However, employers tend to ask for more ability than is actually required. 
“It is not that often that technical professionals are required to communicate with Western managers, they usually have just to read online specifications or materials, write reports and exchange emails with their counterparts abroad,” said Yury Mikhailov, director of Consort Petersburg recruiting agency. 
“In my opinion, it’s quite enough for them to speak at a pre-intermediate level, though the employers who demand fluency will limit their range of choice.”
On the other hand, foreign-language graduates, who often speak two or more foreign languages, usually apply for administrative positions. 
“However, in St. Petersburg such employment is very rare,” said Olga Kapralova, PR manager at InterComp. 
Although international language certificates give the holders some benefits, employers usually prefer to test their oral and written language skills during an interview either at the recruitment agency or at their company’s own HR department. 
“In Russia, the diplomas of European colleges and universities are of some value,” said Sapogova. “However, I had several cases when an applicant couldn’t, when tested, corroborate that ability suggested by their diploma. That is why I recommend evaluating the candidates’ linguistic competence by providing a well thought-out structural interview, not just by asking a few general questions about their future plans in a foreign language.”
As recruiters say, most applicants who speak foreign languages value themselves more and therefore require remuneration for their language skills, though the level of the salary depends on each particular company. 
The difference in salaries between those candidates who speak foreign languages and those who don’t can be between 10 percent to 50 percent but, on average, the gap is about $100 to $300 a month. “For example, an English-speaking secretary can get about $700 to $800 — $300 to $400 more than one without fluent English, said Sapogova.

TITLE: Ask the Boss
AUTHOR: By Alastair Gee
PUBLISHER: Staff Writer
TEXT: “What should you do about staff who take a lot of time off work, whether it’s an inordinate amount of sick leave or to care for their children?”
Henrik Winther, Rostik’s/KFC 

CEO:
We of course follow the Labor Code in addressing these types of problems. I prefer to help a valued employee by accommodating his or her needs for time off while addressing the problems at home or temporary health problems. However, several factors influence the way I deal with such situations. 
If the absences are frequent or unjustified, I address it in an open and frank manner with the employee and either arrange for him to take a leave of absence or in some cases encourage him to look for a different job where he can work a flexible schedule.”
Yelena Cheremushkina, Salans’ administration 

manager:
Usually I have a conversation explaining that it’s not appropriate and really influences his or her productivity. 
Then, I explain that it will have an impact on his or her performance results, and as a consequence bonus or salary adjustment at the end of the year. ‘Too much’ is if it’s happening every day, or several times a week. One hour, two hours of working time during the day. 
Our employees understand that a long vacation may negatively influence the working process and therefore usually do not ask for more holiday time than two weeks at once. But of course, there may be exceptions and we treat each case individually.”

Alex Shifrin, director, The Creative Factory:
Short of dismissing the employee, the best way to fix the problem is to empower him or her with responsibility. Preferably, a responsibility where other staff are to some extent counting on their being present. 
If others are relying on them, then they are more likely to make personal sacrifices in order to be present and get the job done.”

“Should employees be permitted to work from home ?”

Dmitry Surnin, editor, Moi Rayon:
The way the newspaper is structured, part of the content comes from different districts of Moscow. The reporters are far away, and with traffic problems it makes perfect sense for them to be at home, as they can spend three hours per day in traffic. 
“The deadline is the most important thing. Whatever happens before that is a question of efficiency and up to the line manager. The main downside is that the reporters need feedback. Working from home, the feedback is one-way — I can only get feedback from the reporters by talking to the line managers. 
“Also, I can’t be sure if they fully understand the work, and a problem may be with the manager, and not with them. I’m not concerned about time management. When we hire them, we hire them with the requirement that they should be able to organize their own time.”

Ilya Shershnev, business development director for the CIS, Swiss Realty Group:
We employ more than 150 people in Russia and the CIS, and nearly 30 percent of them are home-based. Designers, some architects, translators, editors and other positions are fully home-based. 
We use an Internet-based planning solution to manage all the processes within the company, so it makes no difference where staff are located: Moscow, London or an apartment in Samara.
“Each home-based employee has a contract with one of our companies and signs the same policy agreements, and one created specially for home-based work.
“Architects who are involved in teamwork are frequent guests in our office. But we’ve never seen some of the people with whom we’ve worked for a couple years. For people in Belarus, Ukraine and even parts of Russia, our salaries are two to three times greater than what they’d receive locally.”

Sammy Kotwani, owner, The Imperial Tailoring Co.:
In my business, it’s not possible. There’s no job that an employee can do at home. A public relations person has to be with the clients. The designer has to be with the clients and personally show them clothes.

TITLE: From Pipe Dream to Pipe Reality
AUTHOR: By Ilya Bourtman and Julia Nanay
TEXT: Chinese President Hu Jintao’s visit to Moscow which began on Monday shou8ld provide ample opportunity for Russian and Chinese leaders to sit down and assess the past, present and future of energy cooperation between the two countries. While Moscow and Beijing already work together in a variety of areas including trade, arms and diplomacy, energy has the momentum at present. With Russia rivaling Saudi Arabia to be the world’s largest oil producer and China the second-largest oil consumer, the logic for cooperation is clear. Yet distrust, suspicion and envy have stymied the development of this relationship.
China’s thirst for oil is clear from the numbers. Although the country was self-sufficient in oil as late as 1993, unprecedented economic growth in recent years has drastically changed the situation. Since 1995, for example, China’s gross domestic product has grown by 8 percent to 10 percent per year, while oil imports have increased by an average of 22 percent.
And the appetite continues to grow. According to a September 2005 report from China’s Energy Research Institute, China’s oil demand will top 11 million barrels per day by 2020. By the same year, China will have to be a net importer of almost 8 million barrels per day, versus about 4 million now. How will it make up the difference?
Russia, which is sitting on top of some 75 billion barrels of oil (more than 6 percent of the world’s total) and is the world’s second largest exporter, could play a part in the solution. Russia’s current output of 9.8 million barrels per day is above that of Saudi Arabia, which has to adhere to OPEC quotas. Russian exports run close to 5 million barrels per day, of which only a small fraction, 320,000 barrels per day, was sent to China by rail in 2006. Saudi Arabia, Angola and Iran each export more oil to China than Russia, which is right next door. Sharing a 4,200-kilometer border, Russia and China would seem to be a natural fit for oil and gas pipelines.
But Russian-Chinese oil collaboration has been very slow to develop. In 1995, China was not yet importing any crude oil from Russia, and over the next five years Russia never exported more than 7,500 barrels per day to China. Due to the development of railroad infrastructure in eastern Russia and northern China, Russia exported almost 26,000 barrels per day to China in 2000.
By 2005, the Russian-Chinese energy relationship had reached a new level. Following a number of major intergovernmental agreements, including the Agreement on Goodwill, Friendship and Cooperation, Russia exported 256,000 barrels per day to China, becoming its fourth-largest source of imported oil. Russia is still in fourth place today but could rise in importance.
Cooperation on the corporate level has registered significant progress in recent years as well. Last July, China National Petroleum Corporation,  or CNPC, bought a $500 million stake during Rosneft’s IPO, currying favor with both the Kremlin and the Russian oil giant. Within four months, the two established a joint venture, Vostok Energy, which will focus on exploration and production in eastern Siberia. There even has been discussion of CNPC participating with Rosneft in the acquisition of Yukos assets and of joint cooperation in building a refinery in China. Going forward, it would be logical for this type of cooperation to expand — with Russian companies gaining a market share in the Chinese downstream sector and Chinese companies receiving limited access to Russian upstream assets. The role that the Russian government will give to independent companies like TNK-BP and LUKoil in building these corporate relations with Chinese companies is still being decided in the Kremlin.
Ambitions in Moscow and Beijing run even higher. Under the Kremlin’s energy strategy to 2020, Russia plans to export one-third of its total oil exports to Asia by 2020. If all goes according to plan Russia will be China’s largest crude supplier next decade with more than 600,000 barrels exported daily.
But for the energy trade to become truly robust — and for Moscow to meet its export target for Beijing — the two sides still need to resolve issues of infrastructure, sourcing and political will. The most important is the East Siberia-Pacific Ocean pipeline, an ambitious project that has received strong Kremlin backing and is intended to bring eastern Siberian oil to the Asian market. The project, which will only be completed by 2015 at the earliest, is likely to cost more than $16 billion and will be capable of transporting 1.6 million barrels per day. China may be the first to benefit from a direct pipeline link from eastern Siberia to northern China, but unresolved disputes over whether to export by rail or pipelines may stall progress. For now, however, competing interests fighting for access to east Siberian oil (which will be used to fill capacity of the pipeline) and the ability to export the oil has created a bottleneck in the bureaucratic process.
Another issue is sourcing. Russia has already committed itself to exporting the vast majority of its west Siberian oil through its far more developed — and for now far more profitable — pipelines to Europe. Reserves in eastern Siberia, estimated to total 3 billion barrels, are not only much less developed but also far more difficult to extract given the permafrost in the area, the lack of infrastructure and the high levels of associated gas and helium. The lack of a concerted strategy by Russian companies to invest sufficient resources into east Siberian oil extraction, compounded with questions over the rising costs of the East Siberia-Pacific Ocean pipeline, has led some skeptics to wonder whether Russia will be able to meet its targets vis-a-vis China and other Asian buyers.
Politically, Kremlin officials have a complicated relationship with China. On the one hand, they view it as a land of huge economic opportunity. On the other, however, they question whether it is in their interest to fuel the growth of potentially the world’s next superpower sitting right next door.
Chinese officials, meanwhile, have their own concerns. They are anxious to diversify their ever-increasing energy needs away from the Middle East, from which they currently receive about 40 percent of their crude imports. But they are becoming increasingly irritated with corporate and administrative infighting in Moscow. For all the logic behind cooperation, the relationship is still fraught with apprehension. There are also, of course, fears in Europe over the future of Russia as their leading gas supplier and uneasiness in Washington over the emergence of a new balance of power in this part of the world.
Despite the fact that Chinese-Russian energy cooperation has come a long way over the past decade, it has a long way to go to reach its full potential. To be sure, cooperation is logical and workable, but for now it remains something of a pipe dream.

Ilya Bourtman is a research associate and Julia Nanay is senior director of the Russia and Caspian Service at global energy consultancy PFC Energy.

TITLE: Tropical Storm Warning
AUTHOR: By Richard Lourie
TEXT: Cuba, which once threatened to be the greatest global flashpoint of them all, could soon be a source of trouble again.
Fidel Castro’s health may be improving, but the “biological solution” so long awaited by Cuban exiles and some U.S. government officials is now clearly close at hand. Castro knows that too and, intensely conscious of his place in history, may decide to go out with a bang. He has said that he considers war with the U.S. imperialists as his “true destiny.” The danger here is not only what he might do, but also what the United States itself might do preemptively.
Fidel’s brother Raul has been running the country since last summer. One of Raul’s first official acts was to sign a deal with Prime Minister Mikhail Fradkov for $350 million in credits, in part to upgrade Cuba’s military. Russia believes it is owed $20 billion from the Soviet era but is not pressing for the money at the moment. This does, however, mean that Russia has a vested interest in Cuba remaining pro-Moscow.
Russia also has a Cuban bone to pick with the United States. In the early 1960s, the Soviets set up an enormous — 70 square kilometers — listening post in Lourdes, about 80 kilometers from Havana. Vast amounts of data, useful for everything from blackmail to disrupting essential systems, was collected and processed there. The base continued to function even after the Soviet collapse. Visiting Cuba in August 2001, President Vladimir Putin declared Lourdes was needed “not only by the military, but by the political leadership of the country.” Then, on Oct. 17, 2001 Putin announced he was closing the base. What happened between August and October? Sept. 11, of course.
After the attack, the United States was not at all happy about having an intelligence gathering installation so close to home and on enemy territory. Leakage of information from the Russians to the Cubans, and then to terrorists was too real a danger to be ignored. In May 2001, Castro declared in Tehran that the United States was “extremely weak … the imperialist king will finally fall … Iran and Cuba have reached the conclusion that together they can tear down the United States.”
The $20-per-barrel Putin of 2001, who agreed to pull out of Cuba, and the $60-dollar-per-barrel Putin of 2006 are two different people. Not only has Russia grown stronger in the meantime, but Russian-U.S. ties have weakened. Russia, which is outraged by U.S. plans to place anti-Iranian missiles in Poland and radar stations in the Czech Republic (and possibly Georgia) would feel justified in reopening the listening post in Lourdes.
The Cuban situation is volatile for many reasons. The waning of Fidel Castro may cause the Cuban-American community to press for action or at least the maintenance of strict sanctions. The transfer of power to Raul Castro may cause him to crack down extra hard, exacerbating the internal situation and causing a new refugee crisis. The involvement of Russia, Venezuela, and Iran — all to varying degrees resentful of U.S. hegemony — makes the situation even more jumpy. Moreover, the Chinese reportedly now have a listening post of their own in Bejucal, Cuba. China’s interest in U.S. satellite communications dovetails nicely with their recent proven ability to shoot satellites out of the sky.
Trouble in Cuba could arise just when new presidential administrations in Russia and the United States are settling in. The spark could be the U.S. base on Guantanomo. It is unheard of for a country to have a military base on enemy territory. The United States acquired it for a song back in the 1930s, when Cuba could be bought off cheap. But now that Guantanomo has become almost synonymous with Abu Ghraib, the Cubans may decide it’s time they got it back.

Richard Lourie is the author of “The Autobiography of Joseph Stalin” and “Sakharov: 
A Biography.”

TITLE: Merkel Calls for Key EU Reforms
AUTHOR: By Paul Taylor and Noah Barkin
PUBLISHER: Reuters
TEXT: BERLIN — German Chancellor Angela Merkel pressed European Union leaders at a 50th anniversary summit on Sunday to reform the bloc’s creaking institutions by 2009, but met resistance from skeptical Polish and Czech presidents. 
At a solemn ceremony in Berlin, long a symbol of Europe’s Cold War division, Merkel told fellow leaders the EU needed to be put on a firmer basis to cope with enlargement.
“Failure would be a historic error,” she said.
Behind closed doors, she urged them to begin negotiating a new treaty in June salvaging the substance of a stalled EU constitution, rejected by French and Dutch voters in 2005, with the aim of concluding in December.
“We know that we must always renew the political shape of Europe in keeping with the times,” Merkel declared to applause.
“The internal structures must be adapted to an enlarged Union with 27 member states.” She called for a road map with political guidelines for a new treaty to be agreed in June.
But Polish President Lech Kaczynski and Czech President Vaclav Klaus, central Europe’s most Eurosceptical leaders, made clear they were in no such hurry.
Kaczynski wants to reopen the reformed voting system at the heart of the constitution and he said ratifying a new treaty in 2009 was “unachievable.” Klaus called it “just a dream.”
Merkel said she saw little prospect of reopening discussions on the voting system, which represented a hard-fought compromise between big and small states.
She told a news conference she was convinced Sunday’s sun-bathed celebration of the EU’s achievements, which drew big crowds to central Berlin, had created the right mood to find a solution in June to Europe’s constitutional uncertainty.
The constitution would give the EU a long-term president and foreign minister, a simpler, more democratic decision-making system and more say for the European and national parliaments.
But in a reflection of deep national divisions about how to move forward, the broad, aspirational “Berlin Declaration” issued on Sunday did not mention the constitution, religion or future enlargement, which was one factor behind the “No” votes.
And only Merkel, European Commission President Jose Manuel Barroso and the speaker of the European Parliament, Hans-Gert Poettering, signed the document — not all 27 EU leaders.

TITLE: Sharapova Struggles to Advance in Florida
AUTHOR: By Steven Wine
PUBLISHER: The Associated Press
TEXT: KEY BISCAYNE, Florida — The match included 25 double faults, one on a second serve that landed wide of the doubles alley. There were 91 unforced errors and 13 service breaks, resulting in 2 1/2 hours of fitful tennis before a stadium crowd that groaned at the mishits and missed chances. 
Maybe one match every 20 months between Maria Sharapova and Venus Williams is enough.
The two Grand Slam champions played Sunday for the first time since the 2005 Wimbledon semifinals, and Sharapova was slightly less erratic, winning 2-6, 6-2, 7-5 in the third round of the Sony Ericsson Open.
“I’m a fighter and a big competitor,” Sharapova said. “That’s why I play the sport. I enjoy the battle of it, and a lot of my matches, it depends on who fights more in the end.”
Appropriately, the final shot — a forehand by Williams — sailed 10 feet long. Both players blamed the sloppy play on the gusty wind common on Key Biscayne.
“You know you’re not going to play your best tennis,” Sharapova said. “You’re always going to have to adjust. You definitely can’t get frustrated.”
Sharapova overcame 13 double faults to exact a measure of revenge from the Williams family. She was drubbed by Serena Williams in the Australian Open final in January.
The result prevented a potential fourth-round showdown between the Williams sisters. It would have been their first meeting since the 2005 U.S. Open.
Sharapova hit the wildest shot — landing a second serve closer to a changeover chair than the court — but Williams missed more than half her first serves and committed 55 unforced errors. Slowed in recent months by injuries, Williams was unseeded and playing in only her third tournament since July.
“I just struggled with my consistency a little bit,” said Williams, a three-time Key Biscayne champion. “The rhythm — there were a lot of points where I wasn’t quite there.”
Third-seeded Andy Roddick, who has yet to lose his serve in two matches, beat No. 32 Gilles Simon 6-4, 6-4. Roddick’s fourth-round opponent will be No. 13 David Ferrer, who won when they met in the quarterfinals a year ago.
No. 2 Rafael Nadal advanced when Olivier Rochus pulled out before their match with a foot injury.
In other women’s play, top-ranked Justine Henin rallied from a 5-1 deficit in the third set to reach Monday’s fourth round. Defending champion Svetlana Kuznetsova and No. 4-seeded Kim Clijsters also advanced, but No. 5 Martina Hingis lost.
Serena Williams’ match against No. 23 Lucie Safarova was postponed until Monday because of rain. The winner will play Sharapova on Tuesday.
Sharapova, runner-up at Key Biscayne each of the past two years, is seeking her first title in the event and her first championship this year. She was two points from defeat serving at 4-5 but held, then broke for a 6-5 lead when Williams failed to convert four game points on her serve, committing an error each time.
Sharapova hit one last double fault on the first point of the final game but steadied herself and served out the win, helped by four more errors by Williams.
“I was definitely happy with the way I was able to hold on,” Sharapova said.
She’s seeded No. 1, even though she lost the top ranking to Henin on Monday. Henin lived up to her new billing — barely — when she came from behind three times in the third set to beat Virginie Razzano 6-2, 2-6, 7-6 (5). 
Henin won four consecutive games in the final set to reach 5-all. Serving at 5-6, love-30, she rallied for 6-all. Then she fell behind 2-0 in the tiebreaker before staging one last charge and closing out the third-round victory with a forehand winner. 
“I came back from nowhere almost,” Henin said. “It’s this kind of situation that I play my best tennis. I proved it many times in the past. I probably love to be under pressure — but it’s good to win in two sets, too.” 
Hingis lost to 17-year-old Agnieszka Radwanska 4-6, 6-3, 6-2 and settled for a consolation prize: the $20 million milestone. Hingis became the fourth player to reach that mark in career earnings, joining Steffi Graf, Lindsay Davenport and Martina Navratilova. 
“It’s not great doing it this way,” Hingis said.

TITLE: Woolmer’s Killer May Be On Tape
PUBLISHER: Reuters
TEXT: KINGSTON, Jamaica — A week after the murder of Pakistan cricket coach Bob Woolmer and with no clear suspects in sight, Jamaican police said on Sunday they have video that could contain a clue to the killer.
Investigators were transferring images from an old videotape surveillance system at the Pegasus Hotel, where Woolmer was found last Sunday, to a digital format to preserve the pictures before examining them thoroughly, said deputy police commissioner Mark Shields.
Of particular interest is a video of the 12th floor where Woolmer’s room is located. The tape shows only the ends of a corridor and not the door to Woolmer’s room.
“It’s critically important because it may give us an image of the killer or killers of Bob Woolmer,” he said.
Shields did not say whether police had looked at the 12th floor video before Pakistan’s Cricket World Cup contingent was allowed to leave Jamaica late Saturday. The players were fingerprinted and gave DNA samples before their departure.
Woolmer, 58, was found unconscious in his room at the hotel last Sunday after the team’s stunning loss to World Cup debutants Ireland that knocked heavily favoured Pakistan out of the tournament. He was declared dead at a hospital.
Police say he was strangled and the killer could have been someone he knew well because the door to his room was not forced open. On Saturday, Shields said there were no clear suspects and investigators were keeping an open mind.
Speculation was rampant that gambling and match-fixing were the motives in the killing. The International Cricket Council sent its top anti-corruption investigator, Jeff Rees, to Kingston, where he had twice met Shields.
Pakistani diplomat Zahid Hafeez Chaudhri, who flew with a colleague to the Jamaican capital Saturday, pleaded for an end to the speculation surrounding Woolmer’s death and the Pakistani players.
“The team is traumatised,” he said. “There is no suspect or suspects.”
Police intended to take the diplomats on a tour of the crime scene.
The cricket team flew out of Kingston on Saturday night and landed at London’s Heathrow Airport on Sunday morning en route home.
Shields defended his decision to let the team leave Jamaica. He told The Times of London that to hold them “would have caused a significant diplomatic incident and have an extremely adverse effect on the World Cup”.

TITLE: Elton John Marks 60 With Lavish Concert
AUTHOR: By Christine Kearney
PUBLISHER: Reuters
TEXT: NEW YORK — British pop singer Elton John celebrated his 60th birthday at Madison Square Garden on Sunday by recalling late Beatle John Lennon and raising his own record for most appearances at the storied New York venue.
Wearing rose-tinted glasses and a black tail coat, John sat at his piano and played more than 30 hit songs from a career spanning four decades. He began with “Sixty Years On,” after an introduction by former U.S. President Bill Clinton.
John told the elated crowd filled with supporters and friends, including his lyricist partner Bernie Taupin, that the arena was the obvious choice to ring in his birthday, with a record-breaking 60th concert there.
“I knew I had 59 shows here and I said the only place I wanted to be was in New York City at Madison Square Garden ,” he said, before later thanking the crowd for their “loyalty, love and support” in a three-hour long performance.
He recalled two memorable performances at the arena - playing after the September 11 attacks, as well as in November, 1974, when John Lennon joined him on stage in what turned out to be Lennon’s last concert appearance.
“I have never heard a reception for anyone like that in my life,” he said, saying how he still mourned Lennon’s death.
“It’s too upsetting for me to sing it anywhere else,” he told the crowd before singing “Empty Garden,” with the lyrics “Oh hey, hey, Johnny can’t you come out to play?” — he and Taupin’s tribute song to Lennon following his death.
Taupin joined comedians Whoopi Goldberg and Robin Williams on stage to sing “Happy Birthday.”

TITLE: Old Foes Bury the Hatchet As Self-Rule Returns to N. Ireland
AUTHOR: By Shawn Pogatchnik
PUBLISHER: The Associated Press
TEXT: BELFAST, Northern Ireland — Sitting side by side for the first time in history, the leaders of Northern Ireland’s major Protestant and Catholic parties announced a stunning deal Monday to forge a power-sharing administration May 8. 
The breakthrough followed unprecedented face-to-face negotiations between the Protestants of Ian Paisley’s Democratic Unionist Party and the Catholics of Gerry Adams’ Sinn Fein.
The two foes, who previously negotiated only via third parties, sat beside each other at a table in the main dining room in Stormont Parliamentary Building in Belfast but reportedly did not shake hands.
“After a long and difficult time in our province, I believe that enormous opportunities lie ahead for our province,” said Paisley, 80, whose party previously boycotted contact with Sinn Fein because of its links to the outlawed Irish Republican Army.
“We must not allow our justified loathing of the horrors and tragedies of the past to become a barrier to creating a better and more stable future for our children,” Paisley added.
Adams, 58, a reputed veteran IRA commander, said Monday’s talks and accord “marks the beginning of a new era of politics on this island.”
He said Protestants and Catholics had been in conflict in northeast Ireland for centuries. “Now there’s a new start, with the help of God,” he said.
Both Adams and Paisley said they and their deputies would begin immediate negotiations on forging a joint platform for government.
Power-sharing was the central goal of the Good Friday pact. The last coalition collapsed in 2002.

TITLE: Metallurg Sweeps Sibir, Stays Undefeated in RHL Playoffs
AUTHOR: By Christopher Hamilton
PUBLISHER: Special to The St. Petersburg Times
TEXT: Red hot Metallurg Magnitogorsk edged Sibir 3-2 in Novosibirsk on Friday sweeping the Siberian team 3-0 in their series. Metallurg is undefeated in the play-offs and are looking like it could be the team to beat. 
In Voskresensk, Khimik spoiled Ak Bars Kazan’s bid to go undefeated in the Russian Hockey League playoffs with a 3-2 shoot-out win Friday in game three of the best of five series. Champions Ak Bars bounced back finishing off Khimik 2-1 in overtime on Saturday to advance to the final four winning their series 3-1. 
Avangard Omsk also advanced to the semi-finals with a 2-0 win over Lokomotiv in Yaroslavl on Friday and a 4-3 overtime win on Saturday. Avangard won the series 3-1. 
In Moscow, CSKA nearly stole game three scoring three late unanswered goals to put the game into overtime, but Ilya Zubov scored in overtime giving Salavat Yuleav a 4-3 win in game three on Friday. CSKA edged the Ufa team 1-0 in game four on Saturday tying the series at two. 
Closer to home, St. Petersburg’s SKA will be playing a series of friendly games with Dinamo Moscow, including two games in St. Petersburg, on March 30 and 31 at the Yubileiny Sports Palace. It has also been announced that two of the club’s forwards, Anton But and Igor Markov have been called to train with the Russian National Team which is preparing for the World Ice Hockey Championships held in Moscow and the Moscow Oblast in April and May. 
Numerous Russian newspapers have reported that Alexander Medvedev, Chairman of SKA’s board of directors and Deputy CEO of Gazprom, is courting Barry Smith to take the helm of the struggling St. Petersburg team. Smith, currently an associate coach with the Phoenix Coyotes has had success at nearly all levels of coaching and has won championships while coaching at the collegiate and international levels. He contributed to five Stanley Cup championships and has worked closely with legends Scotty Bowman and Wayne Gretzky. But SKA spokesnan Vladimir Kuzmin could not confirm that any negotiations have taken place and said that “no official information is available.”

TITLE: Beijing Begins 500-Day Countdown to Games
AUTHOR: By Stephen Wade
PUBLISHER: The Associated Press
TEXT: BEIJING — IOC president Jacques Rogge marked Monday’s milestone — 500 days before the Beijing Olympics — by calling for a strong focus on this summer’s 26 test events. 
Events in China’s capital marking the moment were low-key. The big day will be Aug. 8 — the one-year mark — which will also signal the start of several months of test events.
“I have learnt through my Olympic experience that test events are the key to the success of the Games,” said Rogge, president of the International Olympic Committee.
“Great progress in venue construction should not mean that the organizers lose focus on other areas of Games preparations. Because it is these moments when you lose your concentration that mistakes can creep in.”
Beijing officials held an 11-mile walk and 6.2-mile run across the city on Sunday to mark the milestone. The design of medals for the Games was to be unveiled Tuesday with about 40 cultural events set this week, geared toward reminding the public that the long-anticipated Games are just over 16 months away.
To mark the 500-days-to-go mark, Rogge gave written replies to a series of questions ranging from venue construction, to test events and air quality.
Construction on roads, stadiums and other venues is far ahead of schedule, and Rogge said the building of 31 Beijing-based venues “was progressing at a tremendous pace.”
Rogge will be in Beijing in late April for IOC executive board meetings, following a visit last October.
“When walking through the streets of Beijing, the pride and enthusiasm of its people is palpable,” Rogge said.
Dirty air and chaotic traffic have been a major concern of Games organizers. Rogge said both issues would top the agenda when the IOC’s coordination commission meets with local organizers in Beijing in mid-April.
Rogge lauded Beijing officials for moving some heavy industry out of Beijing, and for planting 1,320 acres of trees.