SOURCE: The St. Petersburg Times
DATE: Issue #1287 (53), Tuesday, July 10, 2007
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TITLE: City Hall Proposes Merger
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Governor Valentina Matviyenko has revived a controversial plan to merge the administration of the city of St.Petersburg and the surrounding Leningrad Oblast into a single unit.
The initiative comes in the wake of a series of unification plans that entail combining several regions of Russia with larger regional entities, apparently in an effort to complement the construction of Vladimir Putin’s “vertical of power” and further centralize the government.
The proposal to merge the city and the oblast is not new, having first been proposed by former mayor Anatoly Sobchak nearly fifteen years ago. Carrying out such a merger would require the consent of the federal government and amending the constitution. This blessing has not been given by the Kremlin thus far.
“The Kremlin has made neither encouraging nor discouraging statements on this issue, which may show that Moscow approves of the idea but does not yet know who it thinks should run the combined area,” said Tatyana Protasenko, a researcher with the Institute of Sociology of the Russian Academy of Sciences. Similar unification attempts — some of them successful — have mushroomed across the country in the last three years.
In June, the legislative assembly of Krasnoyarsk territory approved Alexander Khloponin, the former governor of the city of Krasnoyarsk as the governor of the territory.
The appointment followed the unification of Krasnoyarsk with the Taimyr and Evenk autonomous districts, all previously independent areas within the Russian Federation.
The Perm Region merged with the Komi-Permyak Autonomous Area to create the Perm territory. The Irkutsk region has absorbed the Buryat Republic, while the unification of the Kamchatka Oblast and Koryak Autonomous District resulted in formation of the Kamchatka territory.
Unification possibly lies in store for other regions, including the city of Yekaterinburg and the Sverdlovsk region.
“With a consistent policy of centralization of power many more unifications are inevitable, regardless of the political or economic expediency of such mergers,” said Maria Matskevich, a political analyst and lead researcher with the Institute of Sociology of the Russian Academy of Sciences. “The major goal is to further facilitate Kremlin control over the regions.”
Back in St. Petersburg, the most recent public poll about the merger between the city and the oblast was held in 2005.
“Such a plan looks vague and unclear to many locals: approximately every third person who responded could not come up with any opinion at all on the matter,” Matskevich said. “On the other hand, there has not yet been a strong campaign for the merger.”
In 2001, former St. Petersburg governor Vladimir Yakovlev, another enthusiast of unification, proposed holding a referendum on the question but the vote never took place.
“Unifying the city and the oblast is exactly what needs to be done as historically, the two have always formed an integral whole,” Matviyenko said in an interview with Echo Moskvy radio on Friday. “Even now, despite the fact that they are distinct federal entities, the two have much in common.”
“Sooner or later, unification will happen, although, naturally, it cannot happen in a single day,” Matviyenko said adding that shortage of space is hampering city development. “St. Petersburg needs to move some of its large industrial enterprises beyond city limits.”
Matviyenko has not mentioned the possibility of and the need for a popular vote. Leningrad Oblast Governor Valery Serdyukov — whose duties have been extended for another term this month — shows little appetite for the merger.
“The city and the oblast have always had independent budgets, so the talk about the two being a single entity is somewhat far-fetched,” Serdyukov told reporters.
He also speculated that St. Petersburg politicians and businesspeople might be behind the merger talk in an effort to get access to the oblast’s natural resources.
“The real issue to be discussed is not a merger, but a more efficient partnership,” Serdyukov said.
Boris Vishnevsky, a member of the political council of the St. Petersburg branch of democratic party Yabloko, emphasized the difficulties behind the proposal.
“If we are serious about a merger, then we will have to create a unified legislature and executive,” Vishnevsky said on Monday. “These bodies won’t be efficient because oblast lawmakers and officials aren’t familiar enough with the problems of the city and vice versa for St. Petersburg lawmakers and officials.”
Natalia Kudryavtseva, executive director of the St. Petersburg International Business Association, said that the merger — if properly executed — could benefit both regions, making them even more attractive for investors. She said the merger, if it happens, would involve the delicate ask of shaping an attractive investment climate for the new territory.
“St. Petersburg is experiencing an investment boom and has an efficient investment policy but stretching this policy into the oblast would be wrong as those significant foreign investors that already operate in the oblast are comfortable with the existing regime which drew them there,” Kudryavtseva said. “Because the synergetic element is already high — city residents work in the oblast and vice versa — it all comes to the question of how careful and efficient the merger process would be. The city needs the oblast’s land, while the oblast needs the people.”
As Protasenko pointed out, the Leningrad Oblast has very limited capital resources, and therefore its citizens instinctively look to St. Petersburg.
“Also, the higher living standards in St. Petersburg make ordinary citizens of the oblast look to the merger in hope that it would help solve some of their everyday problems, including, for instance, unemployment,” she said.
Vishnevsky sees the merger as nothing more than the Kremlin’s attempt to tighten its grip.
“There is no economic benefit in it, simply because all issues — be it medical insurance or garbage collection on both territories — can be easily sorted out by bilateral agreements,” he said. “If officials cannot make these tools work and develop working schemes now, the merger won’t help.”
TITLE: Other Russia Coalition Offers Rollback Plan
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — The Other Russia opposition coalition adopted a political platform Sunday as it continued preparations for primaries to select a unity opposition candidate in October.
With the identity of the coalition’s candidate for March’s presidential election still undecided and former Prime Minister Mikhail Kasyanov having jumped ship, leaders of The Other Russia said the creation of the platform, which proposes to undo some of the political changes of the past seven years, was an important step.
“From the very beginning, we tried to avoid introducing points of conflict in our program,” former world chess champion Garry Kasparov, one of the coalition leaders, said Saturday, the first day of the conference. “We have tried to propose a program that will be compelling for all of our supporters.”
One topic of discussion was whether The Other Russia, which is not registered as an official party, should try to run candidates for State Duma elections in December, or instead, boycott the vote.
Kasparov said he favored taking part.
“It wouldn’t be right to boycott the Duma elections completely,” Kasparov said. “It is a powerful structure, elected by the people.”
But he also insisted that the presidential election was the only real opportunity “to remove the current political regime,” referring to the current Duma as a “puppet structure.”
Eduard Limonov, a founder of the banned National Bolshevik Party, said The Other Russia might propose a list of 450 of the country’s “most famous and respected” people, and try to register the list despite the lack of party status. He labeled the ban against candidates not nominated by registered parties as unconstitutional, Interfax reported Sunday.
Limonov also took the opportunity to dismiss as “a journalistic ruse” reports that he was forming a new party.
“We already have a party,” Limonov said. “We just need to give it another name and try to register it again.”
The 10-part platform passed at the conference combined clauses aimed at reversing measures introduced during the presidency of Vladimir Putin with those of a populist hue.
The “anti-Putin” clauses included limiting the president’s constitutional powers, removing all limits placed on political activity, bringing back direct gubernatorial and Federation Council elections and prohibiting control of the mass media by the state or big business.
More populist points included the revision of the major privatizations of the 1990s and compensating people for the loss of savings and investments during the reforms of the same period, the investment of excess energy export revenues in pensions, boosting the birth rate and reducing dependence on resource exports by investing in research and high technology.
The last plank in the platform called for Russia to take a leading role in a new union of post-Soviet states based on common strategic interests.
Leaders of The Other Russia said the platform would be worked out further over the following three months and that the unity candidate selected by October would be able to introduce some changes in line with his or her own views.
But agreeing on such a candidate remains the main difficulty ahead for the coalition.
Kasyanov, who announced his decision to leave the coalition last Tuesday, after refusing to take part in the primary process to choose a candidate, is now forming a party of his own, to be called The People for Freedom and Justice.
One of the most serious questions that remain is whether such a unity opposition candidate would stand any real chance in a presidential vote.
“The opposition shouldn’t be promising electoral success. You have to be honest that it won’t happen,” said Sergei Kovalyov, chairman of the human rights group Memorial. “And if there is no hope of winning the election, then nominating a unity candidate is just a propagandistic device.”
He said the unity candidate should use the election campaign “to explain the truth about the Kremlin to as many people as possible.”
While just a few dozen people attended the conference on Saturday, the arrival of regional delegates for the Sunday sessions swelled the crowd at the Holiday Inn hotel near Belorusskaya metro station.
The building was guarded by dozens of police, who were joined Saturday by about 50 activists from two pro-Kremlin youth groups, Young Guard and Young Russia.
The young people shouted “You are selling Russia to Berezovsky!” and threw fake $30 bills at those entering the building.
Self-exiled billionaire Boris Berezovsky, living under political asylum in Britain, recently told The Guardian newspaper that he was financing The Other Russia, a claim the coalition’s leaders have repeatedly denied.
TITLE: Drugs Squad Claims Major Advances
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: Amid growing evidence of a rise in the use of intravenous drugs in the city, the St. Petersburg Anti-Narcotic Squad claimed major breakthroughs in the past six months, saying it had crushed drug cartels and broken the market for new, locally manufactured drugs.
The squad said at a news conference earlier this month that it had managed to penetrate St. Petersburg’s nightclub underworld to seize consignments and spoil the production and supply of a comparatively new synthetic drug, Natrium Gamma–HydroButirat, an intravenous drug, known by its local name as “buratino,” according to a report by the St Petersburg and Lenoblast Federal Anti-Narcotic Department (FSKN).
According to deputy chief of the St. Petersburg and Lenoblast Federal Anti-Narcotic Department (FSKN), Colonel Andrei Smirnov, raw material seized in April alone could have been used to make 40 liters of buratino, a highly dangerous drug that can cause serious mental problems and the danger of death by overdose.
“Buratino consumption is a drug culture confined within the St. Petersburg nightclub scene and hardly known in other social circles let alone other regions in Russia,” said Smirnov.
But “we are proud to announce that we have managed to destroy the seeds of this evil before it dug deep into the nightclub narco-mafia from where we tracked an international traffic chain of other narcotics, leading to arrests of drug barons abroad.”
The squad also said it destoyed a “white chinese” laboratory, the market name of 3-Methylphentanyl, a synthetic drug with a destructive capacity a thousand times that of heroin. During the past four years, according to Igor Rezonov, head of the St Petersburg Prosecutors’ Office Narcotic and Psychotropic Substances Legal Inspectorate, this drug has been responsible for the lion’s share of local drug deaths.
The laboratory in St Petersburg was the site of massive production of the “white chinese” that was supplied across Russia. But when asked if such laboratories did not exist elsewhere in the country, Rezonov was evasive, saying “we do not have such information.”
The police also claim to have arrested an unspecified number of key marijuana and hashish international traffickers, crushed a hashish laboratory and seized about 250 kilograms of marijuana, Smirnov said.
Winding up his report on last year’s activity, Smirnov said his institution pressed for 2,427 criminal charges, a 31 percent increase compared to 2005, and this included more than double the previous year’s number of criminal charges related to organized drug rings. The rate of drug convictions also rose by 15 percent in a general trend that also saw a 12 percent decrease in suspended sentences compared with the previous year, according to Smirnov.
Since its foundation four years ago, FSKN has pressed for more than 7,312 criminal charges related to the seizure of more than 1.8 tons of narcotics and psychotropic substances including 200 kilograms of heroin and more than four tons of strong illicit drugs, says the report.
But while the police say the six-month crackdown has led to a considerable decrease in drug abuse in the city, experts says the police massage the figures to make a good impression while St. Petersburg’s drug problem is in fact growing.
“I don’t say the police don’t work properly, but the reality on the ground shows that the police crackdown is far from being effective,” said Yulia Makarova, a manager at the city’s Medical Rehabilitation Center, Respect, where drug addicts are treated. “Despite the high price of 900 rubles per hour we charge for a consultation here, we are mobbed by parents and wives seeking help for their kids and husbands respectively.”
According to official findings by City Hall’s Youth Committee 12 percent of local schoolchildren have tried narcotics. Makarova said her son, who is in high school, said he believed the true figure to be more like 25 percent.
A report by the Central Asia-Caucuses Institute & Silk Road Studies Program said: “Drug abuse trends in Russia have changed, marking the increase in the intravenous and drug abuse at increasingly low ages. Six percent of 15 and 16 years olds in Moscow and St. Petersburg are reported to have used heroin at least once — nowhere in Western Europe was the figure over 2 percent.”
Professor Aza Rakhmanova, head of the St. Petersburg Infectious Disease Inspectorate, Galina Volkova, deputy chief physician at the St. Petersburg Center for the Prevention of AIDS and Other Infections, and Galina Stepanova from the same institution, have attributed last year’s record spike in AIDS deaths to more than 500 in St. Petersburg to the increase in intravenous drug use among young people.
TITLE: BBC: Corpses Found in Prison
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — An underground prison dating back to the Soviet occupation of Afghanistan has been found on the northern outskirts of Kabul, the BBC reported Friday.
Hundreds of bodies were found at the site, many of them with rope or cloth around their eyes and hands, suggesting the victims had been blindfolded and bound, according to the report.
“This is a big mass grave from the Russian days,” said General Ali Shah Paktiwal, a senior police official, the BBC reported.
The Defense Ministry could not be reached for comment Friday afternoon. But retired general Makhmud Gareyev, who served as senior military adviser to the Afghan government from 1989 to 1992, told Interfax on Friday that the BBC report was “disinformation.”
“This is crudely manufactured disinformation, because there were no prison cells in the garrisons of the 40th Army on Afghan territory, nor could there have been by definition,” Gareyev said.
TITLE: In Brief
TEXT: Bridge to Reopen
ST. PETERSBURG (SPT) — Lieutenant Schmidta bridge is due to be reopened by Aug. 10, Fontanka.ru reported.
A representative of the City Hall committee dealing with road repairs was quoted as saying that all that remains to be done is the laying of a top layer of asphalt on the bridge, which has been closed for a year, and to replace street lamps.
Towering Decision
ST. PETERSBURG (SPT) — The formal decision to go ahead with Gazprom City, a business and residential development also known as Okhta Park and set to comprise the controversial Gazprom skyscraper, has not yet been taken, Governor Valentina Metviyenko, said on Echo Moskvy radio on Friday, RIA Novosti reported.
Matviyenko added that the final decision could be reached only after public consultation.
“We’ll continue to inform townspeople about impartial characteristics of project. The city ought to make a deliberated decision,” said Matviyenko.
City Olympic Bid
ST. PETERSBURG (SPT) — St. Petersburg will bid for the 2020 Summer Olympic Games, Governor Valentina Metviyenko, said on Echo Moskvi radio, Fontanka.ru reported.
Deputy Svetlana Zhirkova, who is also a former Olympic champion, said on Monday that St. Petersburg had a good chance of winning the bid.
“We will win if 80 percent of the Olympic facilities needed are built in the next six years, otherwise the IOC will not view our application. But in any case, St. Petersburg should present itself: it will guarantee great PR for the city,” she said.
Social Health Degrees
ST. PETERSBURG (SPT) — The St. Petersburg State University awarded its first master’s degrees in social health on Friday.
“The first Russian university program of training masters of social health absolutely meets international requirements, and our first graduates in this sphere will be able to apply in a worthy manner the unique knowledge in practice,” Rector Ludmila Verbitskaya said.
TITLE: Kalashnikov Says Conscience is Clear
AUTHOR: By Mansur Mirovalev
PUBLISHER: The Associated Press
TEXT: MOSCOW — Sixty years after the AK-47 went into production, designer Mikhail Kalashnikov says he doesn’t stay awake at night worrying about the bloodshed wrought by the world’s most popular assault rifle.
“I sleep well. It’s the politicians who are to blame for failing to come to an agreement and resorting to violence,” Kalashnikov said Friday at a ceremony celebrating the birth of the rifle, whose initials stand for avtomat Kalashnikova.
It was before he started designing the gun that he slept badly, worried about the superior weapons that Nazi soldiers were using with grisly effectiveness against the Red Army in World War II. He saw them at close range himself, while fighting on the front lines.
While hospitalized with wounds after a Nazi shell hit his tank in the 1941 battle of Bryansk, Kalashnikov decided to design an automatic rifle combining the best features of the American M-1 and the German StG44.
“Blame the Nazi Germans for making me become a gun designer,” said Kalashnikov, frail but sharp at age 87. “I always wanted to construct agricultural machinery.”
Since production began, more than 100 million AK-47s have been made — either at the home factory in Izhevsk, under license in dozens of other countries, or illegally. Sergei Chemezov, director of arms export monopoly Rosoboronexport, said nearly a million a year are produced without license.
The AK-47 has been a mainstay in wars, coups, terrorist attacks, robberies and other mayhem. Its popularity comes from being rugged and easy to maintain, though its accuracy is not high.
It proved ideal and extremely reliable for warfare in jungle or desert — easily assembled and able to keep firing in sandy or wet conditions that would jam a U.S.-made M-16.
“During the Vietnam war, American soldiers would throw away their M-16s to grab AK-47s and bullets for it from dead Vietnamese soldiers,” Kalashnikov said. “I hear American soldiers in Iraq use it quite often.”
The simplicity and reliability of the AK-47 made it a favorite of rebel movements worldwide — it even features on the Mozambique flag. Keen to support anti-colonial movements in Asia and Africa, the Soviets proliferated the rifle, sometimes for free, to pro-Soviet regimes or insurgents.
In 2005, Venezuelan President Hugo Chavez, who styles himself as a leader of the fight against imperialism, ordered 100,000 for his army.
“The Kalashnikov rifle is a symbol of the creative genius of our people,” President Vladimir Putin said in a statement read to Kalashnikov at the ceremony in the Central Armed Forces Museum.
“It’s a huge and splendid celebration,” said Nikolai Shvets of Rosoboronexport. “For another 20 years, the AK-47 will remain unsurpassed by any other automatic rifle in the world.”
Kalashnikov is still active and prolific — he tours the world as a Rosoboronexport consultant helping strike new arms deals, and has penned several books on his life, about arms and about youth education.
“After the collapse of the great and mighty Soviet Union so much crap has been imposed on us, especially on the younger generation,” he said. “I wrote six books to help them find their way in life.”
He said he was proud of his bronze bust installed in his native village of Kurya in the Altai region. He said newlyweds bring flowers to the bust after the their wedding ceremonies.
“They whisper ‘Uncle Misha, wish us happiness and healthy kids,’” he said. “What other gun designer can boast of that?”
TITLE: Judge Seeks to Slow Appeals to Strasbourg
PUBLISHER: The Associated Press
TEXT: MOSCOW — The Constitutional Court’s chairman is calling for legislation barring Russian citizens from appealing to the European Court of Human Rights before exhausting all domestic legal possibilities.
The comments by Valery Zorkin on Saturday came just days after the European court handed down the latest verdict against Russia stemming from human rights abuses in Chechnya. His call is also the latest criticism of the court to be voiced by senior officials, who are incensed with growing number of appeals by Russians and the growing number of cases that Russia is losing.
Zorkin said the European court was essentially subverting Russia’s judicial system by allowing appeals before Russia’s top courts — the Supreme and Constitutional courts — had heard the cases.
“This also cuts off the summit of the judiciary pyramid in our country,” Zorkin said, Interfax reported.
“By replacing the Supreme and Arbitration courts, and partially the Constitutional Court, the European court, which is a supranational body, plays the role of a national tier of judiciary, which is at odds with its nature and tasks,” he said. He also suggested that procedures at Russia’s top courts be simplified.
Dozens of rights cases are pending before the Strasbourg-based court, and Moscow has been ordered to pay hundreds of thousands of euros to victims of the Chechen conflict. Human rights activists say the fact that Russia accounts for the largest number cases filed to the European court is an indicator of Russians’ frustration with domestic courts.
On Thursday, meanwhile, the court ruled that Russian authorities were responsible for the presumed killing of a former speaker of the Chechen parliament in 2000, and ordered Moscow to pay his mother $54,000 in damages.
The European court’s chairman in May urged Russia to approve reforms of the court that the parliament has blocked. Russia is the only member of the 46-nation Council of Europe, the European rights watchdog that runs the court, that has not yet ratified the reforms so that they can come into force.
TITLE: Drivers Face Increased Fines For Phone Use, Speeding
AUTHOR: By Julia Vail
PUBLISHER: Special to The St. Petersburg Times
TEXT: MOSCOW — Inveterate leadfoots and motorists who like to dial and drive might have to change their habits soon or risk heftier fines for reckless driving.
The State Duma on Friday passed in a third and final reading a bill that would increase sixfold fines for excessive speeding and talking on a cell phone behind the wheel without a hands-free device.
Under the new regulations, anyone driving 60 kilometers or more above the speed limit can be fined 2,000 to 2,500 rubles ($80 to $100) and risk losing his license for up to six months. Currently the law stipulates fines of 300 to 500 rubles for the same violation and a maximum of four months without a license. The bill would also raise fines for lesser speeding offenses.
Talking on a cell phone while driving without using a hands-free device could lead to a 300 ruble fine, up from the current 50 ruble fine. Fines for not wearing a seat belt — the rule rather than the exception in Russia — would be increased from 100 to 500 rubles.
Driving without a license would cost drivers up to 5,000 rubles, and if the driver is drunk, he could face up to 15 days in jail.
The bill comes after comments by President Vladimir Putin over the past two years demanding that the government take steps to lower the number of driving deaths from the current 35,000 per year.
“We hope the proposed changes will allow us to make serious guarantees about traffic safety,” said Vladimir Pligin, who chairs the State Duma's Constitution and State Affairs Committee, Interfax reported.
More than 10,000 people died in traffic accidents from January through May, up 14 percent from the same period last year, according to Interior Ministry statistics. Viktor Kiryanov, head of the ministry's road safety department, said last month that speeding was the leading cause of accidents.
The bill will now be sent for consideration in the Federation Council. If approved there, it will be sent to Putin to be signed into law.
Motorists’ rights groups say curbing traffic deaths requires a multipronged approach that includes reforming the traffic police, better roads and faster ambulances, adding that higher fines would simply mean bigger bribes for police.
Traffic cops are feared and hated across the country by even law-abiding drivers for their notorious practice of extorting bribes.
Vyacheslav Lysakov, head of the group Freedom of Choice, said the version of the bill passed Friday is more lenient than the original draft, which included a steep increase in fines for motorists who do not stop for traffic police.
TITLE: FSB Investigates M16 Claim
AUTHOR: By Mike Eckel
PUBLISHER: The Associated Press
TEXT: MOSCOW — The Federal Security Service said Saturday that it had opened a criminal investigation into an allegation by a former tax inspector that he was recruited by Britain’s foreign intelligence agency, MI6.
The FSB said the information it received from Vyacheslav Zharko indicated that British agents tried to recruit him from 2003 to 2007.
The British “later used him as an agent for conducting espionage activities,” the FSB said in a statement. The FSB has identified Zharko as a former member of a special forces unit. But Zharko denied that in an interview published Saturday in Komsomolskaya Pravda, saying he worked as an officer with the federal tax police for seven years in the 1990s.
He also said he was involved in the investigation that eventually pushed NTV — at the time Russia’s only independent national television channel — into state-control. Britain’s Foreign Office refused to comment.
TITLE: Nissan to Make Sedan, X-Trail
PUBLISHER: Bloomberg
TEXT: TOKYO — Nissan Motor Co., Japan’s third-largest automaker, will make the Teana sedan and the X-Trail sport-utility vehicle in Russia when it starts production in early 2009.
The automaker began construction of its new $200 million plant in St. Petersburg, Nissan said in a release Sunday. The plant will have annual production capacity of 50,000 vehicles. Nissan will be the second Japanese automaker to set up a production site in Russia, following Toyota Motor Corp. Tokyo-based Nissan and other automakers are opening factories to speed up production in the country where a nine-year economic boom has increased car demand.
Russia is expected to overtake the U.K. as Nissan’s biggest European market by volume this year for the first time, the company said. Nissan’s Russian sales have risen by more than sevenfold to exceed 75,000 units last year from 10,000 in 2003, the automaker said.
Toyota will start to make the Camry sedan at its plant in St. Petersburg in December 2007. Suzuki Motor Corp., Japan’s fourth-biggest automaker, also plans to open a plant in the same city in 2009 to make Grand Vitara SUVs and SX4 compact cars.
Shares of Nissan were unchanged at 1,328 yen at the 11 a.m. trading break on the Tokyo Stock Exchange.
TITLE: Technological Windows Overseeing the Masses
AUTHOR: By Nikita Savoyarov
PUBLISHER: Special to The St. Petersburg Times
TEXT: To what extent is Russia governable over the Internet? Some attempts at answering this question were made at a June 25 conference entitled “Development of e-Government in St. Petersburg” and organized by the St. Petersburg Information-analytical Center (IAC) the Partnership for Development of the Information Society in Northwest Russia (PRIOR NW) and City Hall.
The development of IT in Russia has faced its fair share of difficulties over recent years. The federal program “E-Russia” that was intended to develop Internet access across the entire country has ceased to exist in its original form and instead merged with administrative reform focused on the development of e-Governance.
Alexander Demidov, deputy head of City Hall’s Committee for IT and Communications, said the reform was aimed at improving the quality and accessibility of state services, limiting state intervention in the activity of entrepreneurs, reducing state regulation and increasing the efficiency of executive bodies.
According to Demidov, the reform would give government activities more transparency and decrease the costs to business of administrative barriers.
Among the measures elaborated within the framework of e-Governance in St. Petersburg was the integrated system “One window,” developed so that a customer in need of a particular service interacts only with the one division of the executive body providing it.
Demidov pointed out several problems related to this administrative reform and the implementation of the “One window” principle, including the lack of ICT knowledge at the top of executive power bodies; the lack of a mechanism to stimulate reform of executive bodies; the state of current regulations for the provision of state services; the lack of regulations related to electronic workflow and the need to prioritize electronic documents over paper ones.
According to Margarita Maslova, Head of integration at IAC, the implementation of “One window” will mean an applicant only has to go through two procedures — application and reception of the final documents. The use of e-services minimizes distance between executive power bodies and applicants, and the supply of services will be maximized accordingly.
Another project presented at the conference was the “Development of Internet-based interactive Government to Business Services in Northwest Russia,” known as G2B-NWR. The project, supported by the EU, has two main goals, said Igor Kuprienko a key expert involved: the improvement of the State’s electronic services (G2B) to Small and Medium-sized enterprises (SMEs) and the enforcement of cross-border relations and technological approaches with the European Union.
These goals may be attained by, among other things, training personnel, addressing regional legislation, and disseminating best practice.
TITLE: State to Spend Billions on Nanotech
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The State Duma approved last week the third reading of a law on the nanotech industry. The law stipulates that state funding of the Russian Corporation for Nanotechnologies will amount to $5 billion and total spending to $7 billion. Experts doubted if the corporation could stimulate national industrial enterprises to finance and apply nanotechnologies on a regular basis.
“They [deputies] are writing laws faster than we can read them,” Sergei Kozyrev, director of the Center for Perspective Research at the St. Petersburg State Polytechnic University, said at Rosbalt news agency Friday, criticizing the hastily adopted legislature.
“Even a preliminary acquaintance with the law shows a number of serious contradictions,” added Igor Gorlinsky, head of the Nanotechnologies Center at St. Petersburg State University.
The Russian Corporation for Nanotechnologies will evaluate nanotech projects and organize and finance research and development.
The corporation will unify state and private research centers. The law lists six to seven core institutions, all of them in Moscow.
The funding will come from state and private sources and business operations.
The law regulates distribution of profits and allows the corporation to own property.
However the Russian Corporation for Nanotechnologies is not subject to the law on bankruptcy. The Russian Federation does not carry any liabilities for the corporation.
The corporation will report annually to the government, but neither federal nor regional authorities can interfere in its activities.
“It is not clear who will be responsible for the corporation’s financial performance,” Gorlinsky said.
Pyotr Kopiev, director of the Center for Nanogeterostructures at Ioffe Physical and Technical Institute, indicated two major barriers to the development of nanotechnologies that the law does not solve.
The Russian Corporation for Nanotechnologies will try to exercise a start up model, when innovations are developed by new companies and financed by the state and private investors, he said.
“Then production samples should be sold to large corporations. But in Russia there are no large technological corporations with enough resources to fund the research and the need for such technologies,” he said.
The second problem he indicated was the “comprador way” of developing the economy.
“There is a strong resistance to the development of high-tech in Russia. Sales of natural resources generate profits, while technological products are imported from abroad. And those who are interested in such transactions insist that we have to develop extractive and processing industries and simply buy all the other products,” Kopiev said.
“The mode of operation of Russian industrial enterprises does not require a high level of scientific development. We see a simplification of the production process and deterioration in the qualifications of the personnel,” Kozyrev added.
Alexei Philaretov, deputy director for marketing at Svetlana-Rost technological company, indicated that nanotechnologies are an interdisciplinary science that needs the cooperation of many institutions and networking, but not a monopoly.
Kopiev indicated optoelectronics and silicon electronics as more promising areas for development. “With $1 billion we could bring ten good ideas into production,” he said.
In St. Petersburg a number of research centers are developing nanotech projects. St. Petersburg State University’s Nanotechnologies Center is running about 30 projects. Last year the Prometei research center started a 400 million-ruble project on metals for Severstal.
“This year we won a tender for Magistral project — production of metal alloys for pipelines,” said Pavel Kuznetsov, deputy director of Prometei. The one billion rubles project is being realized in cooperation with 16 institutes.
Ioffe Physical and Technical Institute received an order for portable fuel elements from Nornikel. The institute is also developing solar elements, a monitoring system for the environment and nano-diamonds on state order.
From 2004 to 2008, in the United States $3.7 billion will be invested in nanotechnologies. In the EU, state funding of R&D in the nanotech industry accounts for $800 million a year, in Japan for $500 million, in China for over $100 million.
According to the U.S. National Fund for Science, by 2015 the nanotech market will exceed $1 trillion.
TITLE: Steel and Power Lead The Sochi Gold Rush
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: MOSCOW — As crowds in Sochi reveled in the city’s Olympic win, traders in Moscow huddled to figure out how to cash in on it, providing a welcome shot in the arm for dozing local markets.
The MICEX and RTS exchanges both gained 4 percent on the week. Now at 1975 index points, its highest close since it failed to hold the 2000-point benchmark on April 17, the RTS is again within a whisker of an all-time high.
Hopes were strong that it would reach it by week’s end, as analysts rushed to price in the news for the many companies poised to gain from Sochi. But the 2000 mark again proved more of a barrier then a milestone, and the euphoria that followed the Sochi news faded, with the RTS ending Friday flat.
The first to gain from the revaluations were the companies surest of profiting from Sochi. Steelmaker Evraz (EVR.LN) gained nearly 10 percent in London on its specialization in the beams and girders used in large-scale building projects. Providers of power to the region — Kubanenergo (KUBE) and TGK-8 (TGKH) — both saw a double-digit jump Thursday.
But it will take more than steel and electricity to gear up for the Olympics, which Alfa Bank said Friday would require the installation of 700 kilometers of fiber-optic cable, 200 kilometers of motorways and railways, 25,000 new hotel rooms, 11 large sporting venues and a new airport terminal, among other things. So creative analysts looking for points of entry are giving rosy outlooks on firms dealing with everything from zinc to glass and plastic.
Anton Tabakh, chief strategist at UralSib, said Sochi has sparked a long-overdue change in the way people value these kind of sectors.
“For those who were paying attention, it was already clear that cement for example was going to do well. But now it will do fantastically well, and now a lot more people are paying attention,” Tabakh said.
Most investors, however, will be likely to wait until contracts are doled out, or the Games are closer at hand, before jumping on a particular stock. For instance, Open Investment (OIVS) and Sistema Hals (HALS) will be among the first in line when the state hands out construction deals, and Southern Telecom will profit when people begin converging on the city and using their phones.
“This won’t go away, you will have news flow on this for the next seven years, and it’s always going to remind the market of this story,” said Alfa Bank strategist Erik de Poy.
But the promised injections of $7.5 billion into Sochi, spread out over the seven years leading up to the Games, seems small compared to the promise of growing valuations and private investment.
In China, the state budget for the 2008 Summer Games is $18 billion, but the construction will cost close to $40 billion. So spending will most likely be adjusted upward, making more business for local firms.
TITLE: In Brief
TEXT: Rosbank Office
ST. PETERSBURG (SPT) — Rosbank management company has opened a new sales office in St. Petersburg on Griboedova Canal, the company said Friday in a statement.
In Russia the Rosbank network includes 186 sales offices in 100 cities including five sales offices in St. Petersburg. The new office was opened specially for processing of applications for unit investment trusts “Granat,” “Sapfir,” “Izumrud-Index MMVB” and “Almaz.”
UralSib Loan
MOSCOW (Bloomberg) — UralSib Bank, Russia’s second-biggest privately owned bank by assets, is borrowing $404 million for two years to finance foreign trade, Interfax reported Monday, citing a person close to the bank.
Moscow-based Uralsib’s loan is being arranged by Bank of Tokyo-Mitsubishi UFJ, Commerzbank AG, Raiffeisen Zentralbank Oesterreich AG, Sumitomo Mitsui Banking Corp. Europe Ltd. And Societe Generale SA, the newswire reported.
Standard Probe
VOLGOGRAD (Bloomberg) — Russian Standard Bank faces a federal investigation into its loan practices, Kommersant reported Monday.
Russian prosecutors filed a suit in Volgograd city court against the bank’s local unit, alleging that it charges commissions when clients open accounts and doesn’t sign loan agreements, the newspaper said, citing Alexander Rasstrygin, the local prosecutor.
The bank does sign agreements and doesn’t charge commissions to open accounts, spokesman Artyom Lebedev told Kommersant. He couldn’t immediately be reached for comment by Bloomberg News.
New Shares
ST. PETERSBURG (SPT) — Federal Service for Financial Markets has registered the emission of East European Financial Corporation shares to a total of three billion rubles, Interfax reported Friday.
The corporation unifies VEFK bank, Inkasbank, Petro-euro-bank, Ruskobank, Vyborg-bank, Uralsky trast bank, Rost bank, MDM-bank-Ural and a number of industrial enterprises. In June 2007 the corporation registered a subsidiary bank in Bosnia and Herzegovina.
Rossia Dividends
ST. PETERSBURG (SPT) — Rossia Bank increased dividends by 50 percent last year compared to 2005, Interfax reported Friday.
A total of 300 million rubles ($11.63 million) will be spent on dividends for 2006 while the bank’s net profit amounted to 716.77 million rubles. Rossia Bank will pay 143.48 rubles per ordinary share of 200 rubles nominal cost and 20 rubles per privileged share of 100 rubles nominal cost.
Raven Logistics
MOSCOW (Bloomberg) — Raven Russia Ltd., a U.K. real-estate company investing in warehouses, agreed to fund and develop a logistics and distribution complex outside Moscow that may have a final value of $112 million.
The project is a joint venture with Stroitelnaya Kompaniya Felix, the company’s Russian partner, Guernsey-based Raven said in a statement distributed by the Regulatory News Service Monday.
The center will be built 21 kilometers (13 miles) to the south of the highway that encircles Moscow, the company said in the statement.
Soup Rethink
NEW YORK (Bloomberg) — Campbell Soup Co. is introducing “starter soups’’ and broths to appeal to people in Russia and China, where families prefer to make their own soup, the Wall Street Journal reported.
The company failed in its efforts to sell canned soups in China in the 1990s; now it’s trying to sell the soup starters to time-pressed urban Chinese and Russians who might be looking to get a head start on cooking, the newspaper said.
Trade Shrinks
MOSCOW (Bloomberg) — Russia’s trade surplus narrowed 17 percent to $60.7 billion in the first five months of this year compared with the same period in 2006, the Federal Customs Service said.
The surplus narrowed from $73.1 billion at the same point in 2006, the Moscow-based Customs Service said in an e-mailed statement Monday.
The European Union is Russia’s biggest trade partner. Oil and gas are Russia’s biggest exports, while machinery and other manufactured goods are the biggest imports.
Evroset Sales
MOSCOW (Bloomberg) — Evroset, Russia’s largest mobile-phone retailer, said second-quarter sales advanced 35 percent as the company sold more handsets.
Revenue climbed to $1.34 billion, the Moscow-based company said Monday in preliminary first-half results, without giving a year-earlier figure. The number of handsets sold increased 8.8 percent to 2.99 million.
Shtokman Deal
LONDON (Bloomberg) — Gazprom is “very close’’ to an agreement for the $20-30 billion development of its Shtokman gas field after saying it would allow foreign companies to be partners in the project, the Financial Times reported Monday, citing Deputy Chief Executive Officer Alexander Medvedev.
Medvedev is in talks with foreign companies about a “new model’’ of cooperation for the field that would “allow foreignpartners to share in the economic benefits of the project, share the management, and take on a share of the industrial, commercial and financial risks,’’ he told the FT.
Gazprom-Media
MOSCOW (Bloomberg) — Gazprom-Media, controlled by Russian gas monopoly Gazprom, is in talks to buy video-sharing site RuTube as it wants to enter the booming Internet market, Kommersant reported Monday.
RuTube owners plan to sell 90 percent of the company for between $5 million and $10 million, the newspaper reported.
TITLE: Gazprom Completes Purchase of Gas Shipper
PUBLISHER: Bloomberg
TEXT: MOSCOW — Gazprom said it completed the acquisition of British-based Natural Gas Shipping Services, enabling the state-controlled giant to expand further in the liberalized British market.
The purchase gives Gazprom “a platform to continue the growth of a strong retail customer base in the deregulated U.K. market,” Gazprom deputy CEO Alexander Medvedev, the company’s head of exports, said Friday in a statement, without disclosing the terms of the transaction.
Medvedev is also the chairman of Gazprom Marketing and Trading, which carried out the acquisition.
Natural Gas Shipping Services, based in Wilmslow, England, handles shipments for gas supplier Pennine Natural Gas, which was acquired by Gazprom last year.
Philip Dewhurst, a spokesman for Gazprom Marketing and Trading, described Natural Gas Shipping Services as a “sister company” to Pennine and a “very small business with less than 1 percent of the U.K. gas market” in an e-mail on June 27.
Gazprom Marketing and Trading already owned part of Natural Gas Shipping Services and had an option to buy the remainder.
“This is a very significant development for us because we can now invest further in our retail business,” Vitaly Vasiliyev, CEO of Gazprom Marketing and Trading, said in the statement.
In June, Medvedev said Gazprom would make an acquisition in Britain “in the nearest future,” and that spectators at the Wimbledon tennis tournament “will hear about” the deal. Dewhurst later said Medvedev was talking about Natural Gas Shipping Services. “The deal he referred to is the completion of our acquisition of NGSS, following our acquisition a year ago of Pennine,” Dewhurst wrote in an e-mail on June 27.
TITLE: Rosneft Pays $3.4 Bln for HQ
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: MOSCOW — Rosneft paid $3.4 billion to acquire Yukos headquarters and a trading company thought to be sitting on billions of dollars in cash from mystery firm Prana last week, according to a Rosneft document released Friday.
The sum was equal to the amount it received from Vneshekonombank for selling the state lender a 50 percent stake in Tomskneft, a Yukos production unit it bought in a bankruptcy auction in May.
Rosneft refused to disclose the price of the transactions when it announced the surprise moves last week, but the sums were revealed in a prospectus for an upcoming bond issue.
The state-controlled company plans to issue a $5 billion eurobond this month as it begins to pay off its $25 billion debt.
Rosneft snapped up the lion’s share of Yukos’ assets, which were sold off in a series of bankruptcy auctions this year at prices analysts said were well below market value. Its acquisition of Tomskneft and production unit Samaraneftegaz made it the country’s largest oil producer.
Rosneft paid $6.8 billion for Tomskneft, two refineries and other assets at a May 3 auction, beating out another mystery firm, Unitex, to win the oil production unit, which currently pumps around 230,000 barrels per day.
“Rosneft has struck a pretty good deal,” said Steven Dashevsky, head of research at Aton brokerage.
Bidding for the lot ultimately won by Prana, which included Yukos headquarters and a trading firm that former Yukos managers say holds up to $3 billion in cash, was the most competitive of this year’s bankruptcy auctions.
Rosneft battled Prana, a firm never before heard of by market players, for over three hours in its bid to win the lot, folding after the starting price had quadrupled to $3.9 billion.
Media speculation had linked Prana to Gazprom and its affiliates. Rosneft CEO Sergei Bogdanchikov said last month that he was in talks to buy assets from the unknown firm.
Dashevsky said he believed Gazprom was likely behind the two transactions.
“Gazprom has always expressed interest in east Siberian oil fields, and it was probably one of only a handful of companies with the financial resources that could have bid $4 billion” at the Yukos auction, he said.
“It looks like these transactions are related,” he said, noting they happened on the same day.
Rosneft took a loan of $22 billion from a consortium of Western banks to fund its purchases of Yukos assets, which totalled $20.8 billion.
At Rosneft’s first shareholder meeting since its initial public offering last July, Bogdanchikov said last week that the company would sell bonds and noncore assets to trim $10 billion from its $25 billion in debts by 2010.
Rosneft began its climb through the acquisition of Baikal Finance Group in December 2004. Baikal Finance Group was the unknown firm that scooped up Yukos’ main production unit, Yuganskneftegaz, without any significant competition, for $9.35 billion.
“This is what Yukos did itself in 2000,” said Chris Weafer, chief strategist at Alfa Bank. “The lesson of Yukos is investors may not like what you’re doing, but once it’s over and you adopt best practice they quickly forget.”
Yukos rose to become the country’s No. 1 oil producer amid accusations of shady dealings by founder Mikhail Khodorkovsky.
By the time he was jailed, on charges of fraud and tax evasion, the company was touting itself as the most transparent of Russian companies and was close to selling a minority stake to a U.S. oil major.
Khodorkovsky has accused Igor Sechin, the deputy head of the presidential administration and the chairman of Rosneft’s board, of orchestrating the legal onslaught against him and his company.
n Yukos wells and equipment at the Priobskoye field, where state-run Rosneft now pumps crude, will be offered at a bankruptcy auction Aug. 8, along with transport units that failed to sell a month ago, Bloomberg reported.
Yukos’ bankruptcy manager is offering the assets at a starting price of 18.5 billion rubles ($720 million), the Federal Property Fund said Saturday in a notice published in the official Rossiiskaya Gazeta newspaper. That is nearly 10 billion rubles more than the original starting price for the transportation units.
“The wells have value,” Nikolai Lashkevich, spokesman for Yukos’ bankruptcy manager, said by telephone Saturday.
Other items, such as trademarks, computers and furniture, will be offered as part of the Aug. 8 lot.
The state will get approximately 500 billion rubles ($19.45 billion) from asset sales of bankrupt oil firm Yukos, Interfax said Friday, citing Deputy Finance Minister Tatyana Golikova.
TITLE: Ecologists Criticize Gazprom
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: MOSCOW — For several months last year, Shell fought off daily accusations that its construction of the giant Sakhalin-2 oil and gas project was causing unspeakable damage to the land and animals of the far eastern island.
Then, at a Dec. 21 Kremlin ceremony, welcoming Gazprom as a majority shareholder into the foreign-owned project, President Vladimir Putin declared that all of the island’s environmental problems had been resolved.
Yet with the summer thaw allowing for increased inspection of the project’s work sites, environmentalists are now warning that Gazprom has done nothing to ease the damage and have renewed calls for project operator Sakhalin Energy to halt its construction work.
“I cannot say that anything is OK. Everything is probably worse than it was before,” said Dmitry Lisitsyn, the head of Sakhalin Environment Watch, an environmental group based on the island.
The construction of an 800-kilometer pipeline that runs the length of the island is nearly completed, and Sakhalin Energy announced Thursday that it had inaugurated a third offshore drilling platform.
It is the project’s later stages that will see subcontractors confronted with the island’s most difficult and sensitive terrain, including steep mountain slopes prone to landslides and mudflows in the face of intense construction work, environmentalists say.
“It’s like pupils who are doing their homework and leave the most difficult lesson for the end,” Lisitsyn said by telephone from Yuzhno-Sakhalinsk, the island’s capital.
The Natural Resources Ministry’s prolonged campaign against Shell and its Japanese partners, Mitsui and Mitsubishi, was widely seen as a means of putting pressure on the firms to sell a majority stake in the project to Gazprom.
After the sale of a stake of 50 percent plus one share in Sakhalin Energy was finalized April 18, the state’s charges of environmental damage — led by Oleg Mitvol, the deputy head of the ministry’s environmental watchdog, appeared to simply melt away.
The environmental campaign against Sakhalin Energy prompted sharp criticism from Western diplomats and analysts, who said the state had failed to act transparently as it began its moves to bring all major oil and gas projects under majority state control.
“Unfortunately, immediately after Gazprom entered the project, the activity of [the environmental watchdog] was significantly diminished,” said one environmentalist involved in the campaign, who asked not to be identified.
“It was just a show, to scare the companies and put pressure on them,” the activist said. “It was very clear to me that it was a short-term but very noisy campaign against Shell.”
“But we had no choice but to cooperate with them, and they knew it,” the activist said. “It would have been wrong if we had stayed out of it.”
Environmentalists have long been trying to draw attention to the problems on and around Sakhalin, a mountainous island whose rivers are home to spawning salmon and whose surrounding waters provide the only feeding ground for the region’s endangered gray whale.
This summer, the whales began arriving June 20, the day after the winter’s last ice melted from the nearby Sea of Okhotsk. Environmentalists still cannot say for certain where the creatures, who reach an average of 22 meters in length, spend the winter months, but they flock to the sea each summer to feed on its crustaceans.
Activists with the World Wildlife Fund and the International Fund for Animal Welfare, both of which maintain observers on the island, say the noise of recent construction work has begun to scare the whales away.
“The company made a commitment they would keep the noise under a certain level to prevent the impact on whales,” but it hasn’t, said Grigory Tsidulko, a marine mammal campaigner with IFAW.
“This summer we started to hear lots of noise in the area — this means there is even more noise underwater,” he said.
So far this summer, nine whales at most have been observed in the area, Tsidulko said.
“Usually at this time of year we can count 12 to 16, but this summer was unusual in that the ice disappeared later than usual. We hope there will be more,” he said.
Sakhalin Energy spokesman Ivan Chernyakhovsky said the company was committed to protecting the island’s environment.
“Environmental responsibility is one of our top priorities,” Chernyakhovsky said.
“Nothing in our approach has changed” since Gazprom’s entry into the consortium, he added. “We are still committed to minimizing any negative impact that might possibly be there.”
On Thursday, Sakhalin Energy said it had completed the installation of its third production platform at the site. “With this milestone, construction operations are nearing completion,” the company said in a statement.
“The entire operation was executed to the highest safety standards and within the established noise levels, without any impact on the Western Gray Whale population,” it said.
A Gazprom spokesman declined to comment, referring all questions to Sakhalin Energy.
The $20 billion project is due to begin exporting liquefied natural gas in 2008, sending key energy resources to markets in Asia and North America.
Gazprom’s entry into the world’s largest integrated oil and gas project was seen as a strong symbol of the state’s desire to reassert its control over energy resources, and signaled the company’s desire to enter the lucrative LNG market.
Yevgeny Shvarts, the head of WWF Russia, said Gazprom was ill equipped to deal with the environmental problems on the island.
“It looks like Gazprom has some internal managerial problems — getting actual and serious answers to anything is difficult, sometimes impossible,” he said.
Another environmental activist involved in the campaign to save the gray whale agreed.
“Gazprom has told us, ‘We haven’t yet communicated because we still don’t know how to deal with Sakhalin Energy,’” said the activist, who also asked not to be identified.
Several environmentalists interviewed for this article requested that they not be identified, citing the political sensitivity of the matter.
Shvarts said Mitvol’s agency was continuing to take an interest in the environmental situation on Sakhalin.
“Oleg Mitvol has expressed the same worries as we have. At the same time we don’t like to look like the hands of [the environmental watchdog],” he said.
“Our goal is to protect the whales, and we don’t like that it can be used for other purposes, like dishonest competition,” he said.
Mitvol, who has championed his role as the country’s leading environmental crusader, insisted that he would continue to be involved.
“Our inspectors on Sakhalin are working with WWF and IFAW, particularly regarding the problems with whales,” he said.
“Of course we deal with Gazprom,” he said, when asked how the new shareholder was responding to the problems there.
“They’ve explained that the noise has been at the level that was agreed with the project.”
On Friday, members of IFAW and WWF met with Sakhalin Energy and Gazprom representatives to discuss the issue of the endangered gray whale.
One participant said Gazprom had invited members of the environmental group Vernadsky Fund to the meeting and had encouraged them to take a leading role on the environmentalists’ side. The fund, established in 1995, counts Gazprom among its founding members.
No one at the fund could be reached for comment Friday.
TITLE: Billionaire Mordashov
Eyes Power Machines
PUBLISHER: Reuters
TEXT: MOSCOW — Russian steel billionaire Alexei Mordashov has requested permission from the anti-monopoly agency to buy control of turbine maker Power Machines as he bets on booming demand for equipment amid power sector reforms.
A representative of Russia’s Federal Anti-Monopoly Serive said on Monday the agency had received a request from Mordashov, the majority owner of steel maker Severstal, to buy a stake in the country’s largest turbine manufacturer.
“The FAS has received a request from Mordashov to purchase a stake,” the official said, without revealing the size of the stake or the vehicle through which Mordashov intended to buy it.
Russian business newspapers Vedomosti and Kommersant, quoting unnamed industry sources, said Mordashov wanted to buy 100 percent of Power Machines, pitching him into competition with other Russian billionaires, including Oleg Deripaska and Viktor Vekselberg, who have large stakes in the power sector.
Germany’s Siemens holds 25 percent plus one share in Power Machines and has sought to buy control of the firm, but Russian authorities blocked the deal, citing national security reasons.
Russia’s former power monopoly, UES also holds 25 percent in Power Machines, which has a market value of $1.2 billion.
Interros, the investment vehicle of billionaire Vladimir Potanin, has entrusted its 30 percent stake in Power Machines to UES.
Vedomosti said UES and Interros could divest their stakes — which they consider as non-core assets — simultaneously to earn a premium on the sale of a controlling stake.
TITLE: New State-owned Company To Control Nuclear Industry
PUBLISHER: The Associated Press
TEXT: MOSCOW — Russia has created a state-owned company to control the nuclear energy industry, from research and uranium extraction to power stations, waste storage and exports, the Federal Atomic Energy Agency said Monday.
Prime Minister Mikhail Fradkov signed an order Saturday establishing the charter of the 100-percent state-owned Atomic Energy Industry Complex, or Atomenergoprom, the agency said. President Vladimir Putin had signed a decree in April ordering the company’s creation.
Russia has 31 reactors at 10 nuclear power plants, accounting for 16-17 percent of its electricity generation. Putin has called for increasing the proportion of nuclear-generated power to at least 25 percent by 2030. Russia is also seeking increased involvement in nuclear industries abroad and is establishing a facility for the enrichment of uranium for countries that want nuclear power.
According to Putin’s decree, Atomenergoprom and its affiliates will be responsible for a wide array of nuclear industry activities, including research and development, fuel extraction, power plant construction and management and waste disposal.
The head of the Federal Atomic Energy Agency, Sergei Kiriyenko, has been named chairman of the new company and his deputy Vladimir Travin as its director, the agency statement said.
TITLE: Rich Russians Fall for an Alluring Aphrodite
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Cypriot developers expect demand for real estate to soar in the near future as increasing numbers of Russians feel the pull of “Aphrodite’s island.”
To meet buyers’ expectations, both local authorities and private companies are investing heavily into infrastructure and regional development while remaining weary of conserving the island’s natural beauty.
One of the island’s largest centers and a particular focus of development is Pathos. A town of 55,000 people, plans are afoot for a new airport, a highway linking it to the sea and Coral Bay, where construction is starting on a new marina capable of holding 1,000 yachts.
“Paphos is a fast developing center of tourism. We’ve already faced some difficulties in terms of communal services, but we are doing our best to cope with them,” said Makis Roussis, deputy major of Paphos.
Over the last five years the population of Paphos has grown 20 percent a year, though that has recently slowed to about 10 percent a year. The population includes some 30,000 tourists, 10,000 emigrants and 20,000 property owners. Most foreign property owners are English, Scandinavian or Russian.
“The city is developing so fast that it has started merging with suburban villages. Normally people prefer to live by the sea, but now many foreigners are receptive to buy property in more remote areas,” Roussis said.
One of the reasons development is not keeping up with the growth in population is the strict controls introduced by the local authorities, Roussis said. Though there is currently no lack of land, he admitted that in a few years’ resources could face exhaustion. The town administration protects particular areas against any new developments.
Large plots were assigned for entertainment facilities. “We have three golf courses and will create another four new courses. It’s one way to attract more tourists during the winter,” Roussis said.
In other towns the authorities are just as concerned about the environment. In Peyia the local government regulates the number of buildings in each street as well as their height — two stories by the sea and four stories in the town.
Developers have to observe the approved plan for town development and the various zones allotted to residential construction, agriculture and other kinds of land use.
Peyia is investing $2.3 million into a new municipal park. For that purpose the town took a loan from the government and plans to use local taxes and profits made by local hotels to pay it off. The authorities also expect Peyia to benefit from the construction of the new marina and the widening of the road from Peyia to Paphos airport, which is to be completed in the next five years.
Tourism and development are the main sources of income for the country. That’s why laws for buying property are transparent and do not discriminate against foreigners.
“Buying property in Cyprus is very easy. It is only limited by the available supply of premises. Receiving permission from the Council of Ministers is a formality,” said Christakis Karayiannides, deputy major of Peyia.
The only reason a foreigner might be barred from buying property is if they have a serious criminal record, Karayiannides said. According to Interpol, crime in Cyprus is only six percent that of the U.K., nine percent that of Germany and 15 percent that of Spain and Ireland.
After buying property in Cyprus, a foreigner automatically gets a 6-months renewable residency. Buyers are required to pay a deposit of 30 percent and mortgages must be repaid in no more than 15 years.
Tax in Cyprus in lower than in other EU countries. Property transfer fee is three to eight percent depending on the property’s value. Stamp Duty varies between 1.5 Cyprus Pounds and two Cyprus Pounds per 1,000 Cyprus Pounds of property value.
Property tax varies from between 2.5 Cyprus Pounds and four Cyprus Pounds per 1,000 Cyprus Pounds of property value. Local taxes usually account for about 200 Cyprus Pounds ($466.2) a year. Many countries, including Russia, have signed an agreement with Cyprus that prevents double taxation.
Although the demand for property on Cyprus has caused the appearance of dozens of developers on island, few of them are large.
“Land is the most important thing for any developer,” said Sakis Hadjialexandrou, marketing manager of Leptos Estates.
Most of the land by the sea is privately owned. Leptos Estates managed to buy lots of land before May 1, 2004 when Cyprus became a member of the EU and VAT was introduced. It gives the company an advantage compared to other developers.
Hadjialexandrou referred to the company’s two major projects currently underway — Kamares Village for 1,000 villas and Neapolis for 5,000 units.
Neapolis alone costs one billion euros, he said. Occupying 1.3 million square meters, it’s one of the largest developments in the Mediterranean.
Leptos Estates was established in 1960. The owners claim it is the largest developer in Cyprus with 12,000 clients. The group unifies more than 30 companies including developers, property management and construction companies, tourism companies. One of the subsidiaries — Pandora — is listed on the Cyprus Stock Exchange.
The group owns and operates 10 hotels with in total over 3,500 beds in Cyprus and Greece. The rooms are leased through tourism companies, conference companies, private agents, the Internet and a tourism subsidiary of Leptos group. Average occupancy is 65 percent.
Though the Internet accounts for about 20 percent of bookings, managers expect this share to increase up to 40 percent during the next two years as clients become more mobile and make spontaneous decisions.
The group is developing 60 projects and 200 projects are planned to start soon, said Pantelis Leptos, director of Leptos Group.
“Ten thousand houses will be built in Cyprus. We also build in Greece,” Leptos said. The company constructs 50,000 to 70,000 square meters a year. Besides residential buildings, Leptos Estates develops shopping centers for rent. In Neapolis the company plans to build a 50,000 square-meter shopping center – the largest in Cyprus, Leptos said.
Neapolis will include all the elements of social infrastructure — hospitals, cultural facilities, a museum of Cyprus, wines and food, a medical center, university, research center and business center.
“We want to increase the attractiveness of Neapolis,” Leptos said. One of the ways is a medical institution, because many people have started coming to Cyprus for medical treatment.
In Cyprus developers are expected to care for the environment around their developments. In its residential complexes, Leptos Estates plants trees and bushes in designated areas before starting construction.
Building facades are usually made of natural stone and can be decorated with marble and pottery. Design is aimed at economizing space, so as not to overload the building with walls and partitions. In small villas the kitchen can be located in the reception room on the ground floor. In large custom villas rooms can be set out in any number of ways.
In Olympus Village, a Russian buyer ordered a custom villa of 1,200 square meters total area. The two-story high villa has a swimming pool that in outline resembles a vodka bottle. The villa costs $4.2 million. It includes a sauna, garage, Otis elevator and several kitchens.
“Greek style” houses are white and tiled. Some houses are colored beige or light pink. The buildings are constructed with due consideration paid to sea views and the various angles of the sun. Cypriots like outdoor verandahs. The upper windows could be protected by jalousie, balcony roofs or removable coverings.
“Large villas are more profitable for us, but there are very few people who can afford them. So we also build mid-price villas,” Hadjialexandrou said.
In Apollo Beach, the sea-front location means a custom-designed 400 square-meter villa would cost about $2 million. Standard two bedroom villas cost about $1 million.
In Latchi Beach, close to the marina, each of the 13 front line villas come with a 800 square meters plot of land. The prime location means a 250 square meter villa costs $2.3 million.
However further from the sea in Regina Gardens the property is cheaper. A 120 square-meter house costs $450,000. Townhouses cost $305,000, while apartments vary between $140,000 and $550,000. The complex consists of 350 premises and about 95 percent of them have already been sold.
“Eighty percent of my business is in the plan. When the building is completed the price is by 20 percent higher,” Leptos said.
Real estate prices have doubled during the past three years. Prices for villas in Paphos start at $400,000. A two-bedroom apartment costs $150,000 to $200,000. The price of office centers is growing more slowly compared to residential property, while the price of land grows at a faster rate, Leptos said.
Although actively developing private homes, Leptos has no plans to expand its hotel chain, considering the existing number of rooms enough to cater for tourists coming to the area. “Maybe we will build one more hotel in Neapolis,” he said.
“More and more people are interested in buying property in Cyprus, both the middle class and very rich,” said Tatiana Pokidko, sales manager at Riviera real estate company.
“Leptos Estates is a good company with extensive experience in construction. They are running projects in Paphos, Peyia, Kamares and other locations,” she said.
The price of real estate in Cyprus has seen steady growth of about 15 to 20 percent a year making it a good investment, Pokidko said, though “the boom does not compare to somewhere like Croatia.”
Polina Yakovleva, head of the elite real estate department at Knight Frank St. Petersburg, listed favorable land legislation, the relatively low cost of living combined with high living standards, a good climate and low crime as the main factors attracting foreigners to Cyprus.
Temperatures rarely drop below 16 degrees with 320 days of sunshine a year. According to a survey by the Union Bank of Switzerland, Cyprus was ranked the 10th least expensive business center in the world and the least expensive in Europe. At the same time per capita GDP is $15,000, making it the 33rd richest country in the world. Life expectancy stands at 77 years. The literacy rate is 97.6 percent.
Foreign property owners are becoming younger. The average age of Leptos Estates clients decreased from 60 to 50 years, while the youngest are just 30 years old.
“Before Cyprus was just a place to retire, now forty percent of our clients buy property where they can retire, 40 percent as a holiday home, 10 percent as an investment and 10 percent buy for themselves and their families just because they like the quality of construction,” Hadjialexandrou said.
Land in Cyprus is generally only for residents to own. Foreigners are only allowed to buy land if they agree to construct a residential building within a period of three to five years after the purchase.
Membership of the EU and the Schengen group of countries, will continue to incite strong growth in the price of the island’s real estate, Yakovleva said. The number of private properties registered in Cyprus increased by 40 percent last year.
“Cyprus is the only island where about 50 percent of foreign property owners are Russian. The high demand for real estate is a result of the low tax on property and low risks,” Yakovleva said.
TITLE: Counting the Real Cost of the Olympics
AUTHOR: By Igor Nikolayev
TEXT: To be perfectly honest, I did not think that Russia would get the Olympics. Why did I believe that International Olympic Committee would choose another city? One, because I did not believe that we could outspend the other candidate cities (in the amount of $12 billion) on bringing Sochi up to Olympic standards. Two, because I was sickened by the pompous way in which we presented our case to the IOC. For example, Russia held nearly 80 ceremonial and sporting events for a single IOC visit in the spring. Do you remember the showiness of all of this, which was translated nonstop on television? The members of the IOC evaluation committee were looking at a scale model of future Olympic projects, and suddenly the curtains in the room open and everyone in the room saw the start of the ski race. I don’t think that other “curtain openings” of this type have been used successfully as marketing strategies. On the other hand, there were several successful strategies, especially in Guatemala.
What is most important, of course, is the result. If Russia had used other bidding methods, we probably would have lost the contest.
The contract giving Sochi the rights to hold the Winter Olympics has been signed. Now is the right time to think about how we will prepare for all of this. The Olympics can give a large boost to our athletics infrastructure as well as to the overall economy.
We really need to develop the Russian sports sector. Throwing money at the issue is not enough, regardless of the sum. Russian soccer is a good example: lots of money and few results. But hosting the Winter Olympics in your own country is another matter entirely.
In the course of the campaign to host the Olympics, our bureaucrats did not grow weary of repeating how we won more medals in the Winter Olympics than any other country. The real situation, however, is somewhat different.
Russia hasn’t finished first in the Olympic Games in a long time. The last time was in 1994 in Lillehammer, Norway, when our sportsmen won 23 medals, including 11 gold medals. It is clear that this was a legacy of the Soviet period.
In the 1998 Olympic Games in Nagano, Japan, Russia took third place: 18 medals, nine of which were gold. But the 2002 Olympics in Salt Lake City were less successful: 13 medals, of which five were gold, and we gained fifth place. Finally, the Turin Games in 2006 brought us fourth place (22 medals, of which eight were gold). Although Russia has held good positions in past Olympics (fourth or fifth place on average), we have a long way to go before we become an Olympic leader.
Now we have a chance to take the lead. If Russia lost the bid to host the Olympics, it is unlikely that we would have had the opportunity to develop our sports infrastructure in any significant way.
It would be incorrect to assume that the economic benefit of the Olympics is limited to the $12 billion in expenditures. There is a much deeper significance for the economy.
What has hindered our economic development during the last years is not setting ambitious enough goals for our economy. And even when we proclaimed goals, we did not believe they were attainable.
Take, for example, the doubling of the gross domestic product by 2010. We barely defined this goal in 2003 and, shortly thereafter, we started planning for declining growth rates. The ideological rationale for such an approach to economic planning was found — the theory of recovery growth, according to which the high growth rates tends to decrease.
The opportunity to host the Olympics is also beneficial because it will force us to rethink our strategic economic goals. If faster growth were achieved, we would no longer have to compare our growth rates to those of the Group of Eight countries — a yardstick that is absolutely incorrect. In reality, we should be competing with the economic results of similar, developing countries such as China, India and Kazakhstan. This comparison would be more accurate as a measure of Russia’s economic growth: it would show high growth rates and it would define the quality of our economic growth in a completely new fashion.
If the Olympics result in higher economic growth for Russia, then the significance for our country cannot be overstated.
The federal program for the development of Sochi’s resorts from 2006 to 2014 was a strong factor in the city getting the XXII Winter Olympic Games. The government earmarked $12.2 billion for the Sochi Games.
This is clearly a colossal amount of money and compares impressively to the spending of other countries. The total cost of the 2006 Games in Turin was 3.4 billion euros ($4.6 billion). Perhaps China’s example was contagious for Russia: Beijing wanted the 2008 Summer Games so badly that it was willing to invest $33 billion to win the contest.
While the development plan definitely leaves you with a positive impression, it is easy to get the feeling that some of the cost estimates were not well thought out. The cost to construct the start and finish areas, the stands for spectators and journalists, and the snowmaking equipment for the downhill skiing center has been listed at 468,264,000 rubles ($18.2 million).
It’s as if a calculator came up with the number on its own.
The construction of a large hockey arena to seat 12,000 is budgeted at $220 million — all of it federal money. The price tag for another arena for figure skating, which should hold 12,000 people, interestingly enough is just $55 million. Thus, the cost of building one arena is four times the cost of building another arena of the very same size.
Another example is an 8,000-seat, closed speed skating center that is projected to cost $42 million. Moscow’s Krylatskoye speed skating complex, which holds 10,000, cost exactly twice that amount — $84 million.
There is more than enough nonsense like this in the development plan to allow us to go on for a while, but the government has approved it all. This is a problem not only for the federal planners in Moscow but for Sochi itself. The government made the $12 billion price tag that it was willing to pay for the Games the main argument in its favor. But the least they could have done was take a serious approach to putting together the details of the development and funding program.
This responsibility now falls to those who are left to carry out the plans. Oversight agencies like the Audit Chamber and the Federal Service for Ecological, Technological and Atomic Inspection wasted no time in making it known they are keeping a close eye on the state of the Olympic project.
The victory in the contest to host the 2014 Winter Olympics allows Russia to claim the huge prize. But this golden opportunity is not only for the place where the games will be held — Sochi — but for the entire country that gets to play host to the Olympic Games. It is very tempting to take full advantage of this olympic victory.
Igor Nikolayev is director of the strategic analysis department for the auditing consultancy FBK. This comment appeared in Vedomosti.
TITLE: Intolerance and Stagnation
AUTHOR: By Alexei Bayer
TEXT: Earlier this year, I attended a breakfast hosted by the Lord Mayor of London John Stuttard, at which he kept quoting statistics on the number of foreigners working in London’s financial district and the variety of countries they represent. I doubt that the discovery last month of car bombs on London streets will diminish his delight at the multicultural character of the British capital.
Throughout history, the hallmark of any dominant society has been its international centers. Rome was probably the first global city during its heyday. Victorian London and 19th-century Paris were magnets for immigrants. New York was a famous melting pot in the first half of the 20th century, and today, when it is once again thriving, half of its population is foreign-born. Similarly, London’s current revival, after years of post-WWII blight, has gone hand in hand with its internationalization.
This is because immigrants represent the most energetic and ambitious part of society, and advanced civilizations prosper when they utilize their energies and ambitions. Conversely, insular societies that ban foreigners or hamper their advancement and integration tend to lag behind.
This holds true for entire historical epochs. In the Middle Ages, geographical movement was restricted while local affiliation became paramount. Not surprisingly, technological and commercial stagnation endured for centuries.
Since the early modern period and until the middle of last century, attitude toward Jews has served as a litmus test. It seems that whenever a nation began persecuting its Jewish population, it inevitably lost its global standing and was either defeated in war or simply collapsed. Examples include: imperial Spain, tsarist Russia, Hitler’s Germany and, most recently, the Soviet Union. Meanwhile, extending a welcome to the Jews coincided with the rise of the Netherlands, Britain and many German city-states.
In medieval Europe, Jews were early promoters of international commerce and nascent globalization. Being a widely scattered diaspora, they could establish business ties among their co-religionists everywhere. Tolerating Jews meant opening up to the outside world, while persecuting them signified the closing of the national mind, which led to eventual decline and defeat.
The litmus test endures, but in addition to Jews, it now covers attitudes toward immigrants from less-developed countries and the gay community.
In a global world, the willingness to welcome foreigners and the ability to assimilate them is particularly important. The success of the U.S. economy since 1980 closely parallels the renewed inflow of immigrants. My favorite statistic is the percentage of the foreign-born population in the U.S. After declining to an all-time low of 5 percent in 1970, it has now risen above 12 percent — the highest in 80 years. Americans born in India, China, Russia and elsewhere are the reason the U.S. economy benefits so much from globalization.
Attitude toward gays, meanwhile, is a measure of tolerance in society. Modern societies succeed when they allow different groups to coexist peacefully. Many decayed American cities now try to attract gay communities because their presence often sparks revitalization. Moral relativism — defined as refusal to set standards for truth, morality and behavior — is the engine of capitalist progress.
Current anti-immigrant legislation and attempts at gay-bashing in the U.S. may undermine its ability to lead in the modern world. This is also why homogeneous, xenophobic and homophobic China is unlikely to emerge as a global leader — and why Japan never did so in the 1980s.
The same goes for Russia. Since the 1998 financial crisis and the rise in oil prices, Russia not only has taken a step away from democracy, but it has abandoned all attempts to become an advanced society. The rise of “Russia for Russians” xenophobia and the widening backlash against its gay community clearly signal where Russia is going.
Alexei Bayer, a native Muscovite, is a New York-based economist.
TITLE: The United States Must Cut Its Losses in Iraq
TEXT: It is time for the United States to leave Iraq without any more delay than the Pentagon needs to organize an orderly exit.
Like many Americans, the editors of The New York Times have put off that conclusion, waiting for a sign that President George W. Bush was seriously trying to dig the United States out of the disaster he created by invading Iraq without sufficient cause, in the face of global opposition and without a plan to stabilize the country afterward.
Bush kept promising breakthroughs — after elections, after a constitution, after sending in thousands more troops. But those milestones came and went without any progress toward a stable, democratic Iraq or a path for withdrawal. It is frighteningly clear that Bush’s plan is to stay the course as long as he is president and dump the mess on his successor. Whatever his cause was, it is lost.
Continuing to sacrifice the lives and limbs of U.S. soldiers is wrong. The war is sapping the strength of the nation’s alliances and its military forces. It is a dangerous diversion from the life-and-death struggle against terrorists. It is an increasing burden on U.S. taxpayers, and it is a betrayal of a world that needs the wise application of U.S. power and principles.
A majority of Americans reached these conclusions months ago. Even in politically polarized Washington, positions on the war no longer divide entirely on party lines. When Congress returns this week, extricating U.S. troops from the war should be at the top of its agenda.
That conversation must be candid and focused. Americans must be clear that Iraq, and the region around it, could be even bloodier and more chaotic after Americans leave. There could be reprisals against those who worked with U.S. forces, further ethnic cleansing and even genocide. Potentially destabilizing refugee flows could hit Jordan and Syria. Iran and Turkey could be tempted to make power grabs. Perhaps most important, the invasion has created a new stronghold from which terrorist activity could proliferate.
The administration, the Democratic-controlled Congress, the United Nations and the United States’ allies must try to mitigate those outcomes — and they may fail. But Americans must be equally honest about the fact that keeping troops in Iraq will only make things worse.
The United States has about 160,000 troops and millions of tons of military gear inside Iraq. Getting that force out safely will be a formidable challenge. The main road south to Kuwait is no- toriously vulnerable to roadside bomb attacks. Soldiers, weapons and vehicles will need to be deployed to secure bases while airlift and sealift operations are organized. Withdrawal routes will have to be guarded. The exit must be everything the invasion was not: based on reality and backed by adequate resources.
The United States should explore using Kurdish territory in the north of Iraq as a secure staging area. Being able to use bases and ports in Turkey would also make withdrawal faster and safer. Turkey has been an inconsistent ally in this war, but like other nations, it should realize that shouldering part of the burden of the aftermath is in its own interest.
Accomplishing all of this in less than six months is probably unrealistic. The political decision should be made, and the target date set, now.
Despite Bush’s repeated claims, al-Qaida had no significant foothold in Iraq before the invasion, which gave it new base camps, new recruits and new prestige.
This war diverted Pentagon resources from Afghanistan, where the military had a real chance to hunt down Al Qaida’s leaders. It alienated essential allies in the war against terrorism. It drained the strength and readiness of U.S. troops.
One of Bush’s arguments against withdrawal is that it would lead to civil war. That war is raging, right now, and it may take years to burn out. Iraq may fragment into separate Kurdish, Sunni and Shiite republics, and U.S. troops are not going to stop that from happening.
Iraq’s leaders — knowing that they can no longer rely on the United States to guarantee their survival — might be more open to compromise, perhaps to a Bosnian-style partition, with economic resources fairly shared but with millions of Iraqis forced to relocate. That would be better than the slow-motion ethnic and religious cleansing that has contributed to driving one in seven Iraqis from their homes.
The United States military cannot solve the problem. Congress and the White House must lead an international attempt at a negotiated outcome. To start, Washington must turn to the United Nations, which Bush spurned and ridiculed as a preface to war.
There are already nearly two million Iraqi refugees, mostly in Syria and Jordan, and nearly two million more Iraqis who have been displaced within their country. Without the active cooperation of all six countries bordering Iraq — Turkey, Iran, Kuwait, Saudi Arabia, Jordan and Syria — and the help of other nations, this disaster could get worse. Beyond the suffering, massive flows of refugees — some with ethnic and political resentments — could spread Iraq’s conflict far beyond Iraq’s borders.
Kuwait and Saudi Arabia must share the burden of hosting refugees. Jordan and Syria, now nearly overwhelmed with refugees, need more international help. That, of course, means money. The nations of Europe and Asia have a stake and should contribute. The United States will have to pay a large share of the costs, but should also lead international efforts, perhaps a donors’ conference, to raise money for the refugee crisis.
Washington also has to mend fences with allies. There are new governments in Britain, France and Germany that did not participate in the fight over starting this war and are eager to get beyond it. But that will still require a measure of humility and a commitment to multilateral action that this administration has never shown. And, however angry they were with Bush for creating this mess, those nations should see that they cannot walk away from the consequences.
One of the trickiest tasks will be avoiding excessive meddling in Iraq by its neighbors — United States’ friends as well as its adversaries.
Just as Iran should come under international pressure to allow Shiites in southern Iraq to develop their own independent future, Washington must help persuade Sunni powers like Syria not to intervene on behalf of Sunni Iraqis. Turkey must be kept from sending troops into Kurdish territories.
For this effort to have any remote chance, Bush must drop his resistance to talking with both Iran and Syria. Britain, France, Russia, China and other nations with influence have a responsibility to help. Civil war in Iraq is a threat to everyone, especially if it spills across Iraq’s borders.
Bush and Vice President Dick Cheney have used demagoguery and fear to quell Americans’ demands for an end to this war. They say withdrawing will create bloodshed and chaos and encourage terrorists. Actually, all of that has already happened — the result of this unnecessary invasion and the incompetent management of this war.
Americans face a choice. They can go on allowing Bush to drag out this war without end or purpose. Or they can insist U.S. troops are withdrawn as quickly and safely as they can manage — with as much effort as possible to stop the chaos from spreading.
This appeared as an editorial in The New York Times.
TITLE: As Temperatures Rise, So Does Awareness
AUTHOR: By Christopher Hamilton
PUBLISHER: Special to The St. Petersburg Times
TEXT: TROMSO, Norway — As climate change took center stage at last weekend’s massive series of Live Earth concerts, held on all seven continents and including a gig in Antarctica by an unknown five-piece composed of British Antarctic Survey scientists, a conference held last month north of the Arctic Circle in Tromso, Norway, also added to the debate.
The United Nations Environment Program (UNEP) World Environment Day conference, with the slogan “Melting Ice — A Hot Topic?” also included the launch of a number of UN reports called “The Global Outlook for Ice and Snow,” “Sustainable Tourism in the Polar Regions,” and “Glacier Inventory in the Himalayas.”
The event attracted a number of scientists, specialists, and politicians to spread awareness, share information, and collaborate on necessary action.
“This is a global problem that people have a difficulty understanding. Thus, these reports are focusing on the facts, and the information here should be cause for concern of in every ministry, every boardroom and every living room in the world,” said UNEP Executive Director Achim Steiner. According to the report, melting snow and receding glaciers in Asia, which currently provide drinking and irrigation water could affect 40 percent of the world’s population. Additionally, melting ice in the polar regions has the potential to flood vast coastal areas and entire countries.
“Things are more drastic and changing more rapidly that we previously thought,” Steiner said. “The findings in these reports are relevant for everyone in the world, from Beijing to Boston and Berlin to Brasilia.”
Despite the urgent and dire reports, Steiner remained upbeat and positive. He stressed that it was the UNEP’s goal to create a sense of common purpose. He outlined broad based initiatives that included quickly adapting and exchanging new efficient and cleaner technologies in industrialized nations and a technological jump for underdeveloped nations. “Many nations in Africa can implement carbon free solar systems, similar to how they skipped installing conventional telephone systems opting for cellular networks.”
“As awareness grows, so does the demand for appropriate action. Despite the Bush administration’s lack of leadership, there is a growing list of U.S. states and cities which have passed laws to follow the Kyoto Protocol. The missing link is universal political action. Today’s report should empower the public to take their leaders to task and ask how much hotter it has to get before we act,” he said praising Angela Merkel’s leadership at during Germany’s presidency of the G8 during the first six months of this year.
In terms of governmental leadership, however, Norway leads the world according to Norway’s Environment Minister, Helen Bjoernoey.
“Norway will reduce global emissions by 10 percent more than required by the Kyoto Protocol and is committed to cutting emissions by 30 percent by 2020,” she said. Norway is the first nation that aims to be carbon neutral, setting a 2050 target date.
She added that the comprehensive studies in Norway offer a rather bleak prognosis for the polar regions. “As documented in the report, melting of snow and ice will in itself have severe consequences on nature and society.”
The conference slogan was also a nod of support to the International Council for Science’s International Polar Year, a 24-month scientific program which started in March coordinating more than 200 Arctic and Antarctic projects involving thousands of scientists from over 60 nations, many of whom were in attendance and sharing reports and information.
As in the Live Earth concerts, the UNEP conference directed a diverse list of participants, including South African Bishop Desmond Tutu who lead an ecumenical service and spoke of ways to bridge the divide and misunderstandings between industrialized and developing nations.
“Too often developing nations look at the developed world with skepticism. They are like hungry poor men who want to eat and grow, who are told they shouldn’t. Industrialized nations need not to tell these countries what do to, but to show them through their own actions and leadership,” he said.
“Much of the growth that all nations are seeking can be archived by using energy efficient technologies that exist today,” said Igor Tsjestin, the Secretary General of the World Wildlife Federation of Russia. “The current barriers are economic and political. There is no silver bullet that will solve this problem, but clearly we need to diversify where we get our energy. Reports have stated that the world can meet 70 perecnt of our energy demand through renewable energy sources. And in the meantime more countries are switching over to cleaning burning natural gas.”
“Russia is in a good position,” he said in a special aside. “It has cut its emission levels by 30 percent since 1990... and can make large cheap gains by increasing efficiency at industrial sites and housing that should allow the country to cut another 45 perecnt. These are the good things, but if you look at [Russia’s] energy strategy, it predicts that energy demand will double by 2020. The government plans to meet these demands by doubling the amount of energy production with more than 20 new nuclear power plants, large-scale hydroelectric plants, and increased domestic coal fired plants. Unfortunately, natural gas prices are low in Russia, so there is an incentive to export it and use coal instead. So for us, in the civil society movement in Russia, it is important that we highlight this huge potential and partner with other organizations to lobby and pressure the government to move forward down a more beneficial path.”
No stranger to pressuring governments, Canadian Inuit activist Sheila Watt-Cloutier, a leading campaigner to improve the rights of the Arctic’s indigenous peoples, spoke of her work launching the world’s first international legal action on climate change. Due to the fact that Arctic Climate Impact Assessment projects indicate that the Inuit hunting culture may not survive the loss of sea ice and other changes projected over the coming decades, she petitioned the Inter-American Commission on Human Rights in December of 2005, stating that the United States’ failure to curb emissions of greenhouse gases was in fact a violation of Inuit cultural and environmental human rights, guaranteed by the 1948 American Declaration of the Rights and Duties of Man.
“My people and the indigenous peoples of the Arctic are the human face of global warming,” she said explaining that other environmental problems and catastrophes like oil spills and nuclear accidents get more attention because they are visible. “Global warming is invisible to most people, but we live close to the land and have a more direct relationship with our environment. And we can see that it threatens our way of life. We have gotten worldwide support and have worked closely with native peoples in Norway, Sweden, Finland and Russia. Now I’m asking you to become connected to the cycles of the environment and do what you can to make a difference in lives.”
“Interestingly, ever since I launched this petition I have more speaking engagements in the United States than anywhere else in the world. This is because the citizens of America want to do the right thing, and they are well ahead of their own government... There is a growing awareness to these problems, and a growing momentum and together we need to pressure governments to act,” she said.
Increased awareness has turned global warming into a mainstream cause, evident in last weekend’s Live Earth concert. A recent Washington Post/ABC News poll found that one-third of Americans believes that global warming is the biggest environmental problem facing the world. That’s more than double the percentage from just a year ago.
The tipping point was perhaps caused by Al Gore’s film “An Inconvenient Truth,” and an aggressive media armed with indisputable evidence provided by international organizations and reports like the ones launched at this conference. Psychologically, however, it is also likely that the scorching hot summers, powerful, destructive hurricanes, and devastating droughts of recent years are giving the mainstream public the visible cues it needs to make this problem seem real.
But the band that opened Live Earth in Anarctica, known as Nunatak, were certainly the best informed musicians in Live Earth’s extensive 150-act lineup. Among the players was a polar guide, a meteorologist, and a marine biologist. The band’s repertoire includes Nirvana and Blur covers.
The band’s 22-year-old singer, electronics engineer Matt Balmer, told ecological magazine Plenty that Nunatak is not a professional act, and isn’t trying to be.
“Our aim is to do our bit for Live Earth. There is scientific evidence that the Antarctic Peninsula has warmed by almost three degrees in the last 50 years,” he said.
For a full copy of the UNEP report see www.unep.org/geo/geo_ice/PDF/full_report_LowRes.pdf
TITLE: Federer’s High Five Matches Borg Record
AUTHOR: By Pritha Sarkar
PUBLISHER: Reuters
TEXT: LONDON — Roger Federer arrived at Wimbledon on Sunday in his stylish cream suit and walked away wearing the mantle of sporting greatness.
By burying second seed Rafael Nadal in a nerve-jangling 7-6 4-6 7-6 2-6 6-2 thriller, the world number one took his place alongside Bjorn Borg as the only men to have won five successive titles the All England Club in the professional era.
After a three hour 45 minute duel of high drama, Federer sank a smash on match point and collapsed on the turf weeping.
Overwhelmed with emotion, he covered his face. Once he managed to drag himself to his feet, he raised his arms to the skies to acknowledge the deafening cheers.
Among the 14,000 fans lucky enough to witness the mesmerising battle was a beaming Borg, who won from 1976 to 1980, in the front row of the royal box.
“Each one is special. To play a champion like Rafa in the final it means even more and equalling Bjorn as well,” the Swiss said.
“He [Nadal] is a fantastic player and is going to be around for so much longer so I am happy with every one I get now before he takes them all.”
“It was such a close match, I told Rafa at the net ‘you deserved it as well’ but I was the lucky one today,” added Federer, who had slipped back into his suit for the presentation ceremony.
Nadal had given his all in one of the most thrilling finals seen at Wimbledon.
“I have to congratulate Roger, five titles in a row is fantastic. I lost today but played a great two weeks,” he said.
The Swiss earned an 11th grand slam title — equal with Borg and his hero Rod Laver — and he now trails Pete Sampras’s record by just three. He also made amends for his disappointment at the French Open final four weeks ago, when his hopes of completing a career grand slam were wrecked by Nadal.
“Records are made to be broken and it couldn’t happen to a nicer player. Maybe he can win six, seven or eight times,” Borg said.
Federer’s triumph extended his string of wins on turf to 54 and with no grasscourt equal in sight, the 25-year-old has plenty of time to climb to the top of the Wimbledon winners’ list — a position currently occupied by seven-times champions Sampras and Briton William Renshaw.
Federer had downed Nadal over four sets in the showpiece match 12 months ago and the sequel proved to be an epic played out in sunshine, rescuing Wimbledon from the misery of a soggy fortnight.
A match full of power-driven forehands, audacious angles, outrageous winners, numerous Hawkeye challenges, frayed tempers and injury timeouts finally brought the tournament alive.
After Nadal had hauled himself back from losing the opening three games, Federer was flustered in the tiebreak when he served on his third set point at 6-5.
A Nadal backhand was called out but the Spaniard challenged the decision and the electronic ball tracker, Hawkeye, judged it had clipped the line.
The Swiss, who has called the system “nonsense” in the past, looked irritated with the call but kept his focus to clinch the set 9-7 with a sublime backhand volley.
Over the next two hours, the players drew gasps from the stands as they unleashed their full repertoire of shots to test each other to their limits.
At one point in the second set three-times French Open champion Nadal slipped on the baseline and, legs splayed, made a sensational backhand return.
The Spaniard dived, rolled and tried every trick at his disposal to sneak in front of Federer.
Once Federer had stormed through the third set tiebreak 7-3, he shook a clenched fist towards his camp as he strode back to his chair and title number five seemed to be looming fast.
But after opting for a toilet break before the start of the fourth set, the usually unflappable Swiss inexplicably lost his focus and suffered a meltdown.
At 2-0 down, a Nadal forehand at 30-40 was called out on the baseline but Hawkeye overturned the decision. Staring at the screen in disbelief, Federer lost the game and marched up to the umpire shouting “Can you switch it off, it was definitely out.”
“How in the world was that ball in? It’s killing me today.”
Nadal then requested a timeout for treatment on a knee injury but still managed to drag the Swiss into his first five-setter in 13 grand slam finals.
The Spaniard showed no obvious signs of discomfort and continued to stalk Federer to earn break points at 1-1 and 2-2 in the fifth set. But he could not convert them and allowed Federer to get his nose in front with a bewitching forehand winner for a 4-2 lead. From then on there was only one winner.
TITLE: Prada ‘Not Talking to Buyers’
AUTHOR: By Sara Gay Forden
PUBLISHER: Bloomberg
TEXT: MILAN — Prada SpA, the Italian maker of Car Shoe and Azzedine Alaia fashions, said it isn’t for sale and hasn’t met with UK millionaire investor Richard Caring or private-equity funds.
The Sunday Times said Prada was in talks with Caring to sell the company, citing unidentified people in London’s financial district. The London-based newspaper reported Prada had received interest from at least two private equity companies.
“The information in the piece is completely incorrect,’’ said Prada spokesman Tomaso Galli in a telephone interview Sunday. “The company is not for sale and there have been no meetings with anyone regarding a sale.’’
Milan-based Prada and Salvatore Ferragamo SpA, an 80-year- old Italian luxury-goods maker based in Florence, Italy, have said they want to sell shares to the public to finance international expansion. Fashion companies are seeking access to financial markets to support the increasing costs of opening stores and executing global advertising campaigns to expand in emerging markets in Russia, China and India.
Galli said Prada’s value is higher than the 2 billion euros ($2.73 billion) cited by the Times. “The company is worth between 3 and 3.5 billion euros,’’ Galli said.
Prada is still considering selling shares on the stock market starting from next year, he said. Prada has scrapped plans for an initial public offering three times in the current decade.
Aeffe SpA, the Italian owner of the Moschino fashion brand, received regulatory approval July 6 to sell shares on the Italian Stock Exchange. The company, which also makes Alberta Ferretti and Jean-Paul Gaultier clothing, is selling shares to finance its expansion plans, which include opening new stores in China. Ferretti is also targeting higher sales of accessories, Chairman Massimo Ferretti said in a June 25 interview.
“Retail expansion and communications are the key drivers of the luxury-goods business today,’’ said Armando Branchini, vice president of Intercorporate, a Milan-based consulting firm specializing in luxury goods, Sunday.
Prada, which also owns English shoemaker Church & Co., cut costs and sold unprofitable Jil Sander and Helmut Lang fashion houses to concentrate on developing its brands, including Miu Miu.
Net income climbed to 76 million euros in the 2006 fiscal year through January from 47 million euros in the prior period, the company said in April. Sales rose 7.5 percent to 1.43 billion euros.
Prada raised 100 million euros in December by selling a 5 percent stake to Banca Intesa SpA. The fashion company also bought back the 55 percent stake it didn’t own in shoemaker Church’s from Equinox the same month.
Luxury labels are also increasingly being sought after by investors because they are growing faster than the larger consumer market and because it is easier to develop an existing brand than to create one from scratch, Branchini said.
Permira Advisers LLP, manager of Europe’s largest buyout fund, offered to buy Valentino Fashion Group SpA last month in a transaction valuing the company at 2.6 billion euros ($3.5 billion), lured by its Hugo Boss AG clothing brand and the potential to develop business at Rome-based fashion house Valentino SpA. The transaction is the largest private-equity purchase of a European luxury brand and follows TowerBrook Capital Partners LP’s takeover of shoemaker Jimmy Choo Ltd. in February.
TITLE: France Heads Towards Euro Clash Over Deficit
AUTHOR: By Jan Strupczewski
PUBLISHER: Reuters
TEXT: BRUSSELS — France headed for a clash with other euro zone countries on Monday over its plans to backtrack on earlier commitments and delay budget deficit cuts despite an economic upswing.
French President Nicolas Sarkozy was due to present plans to kick-start the French economy to finance ministers from the 13 countries using the euro and the European Central Bank at an informal meeting on Monday evening.
All euro zone countries, including France, agreed in April to balance their books by 2010. But Paris changed its mind after Sarkozy became president in May, and now wants a two-year delay to boost growth rates through various tax cuts.
“We will respect, with a little more time, our commitments on deficits and debt, and we will reform this country,” French Agriculture Minister Michel Barnier told iTele television ahead of Sarkozy’s visit to Brussels.
“That is what the president will say. We will not ask for more time and do nothing at home,” said Barnier, a former European Commissioner.
But some euro zone members said they would tell Sarkozy they oppose slowing down deficit cuts.
“I don’t think that’s right,” Austrian Finance Minister Wilhelm Molterer told Reuters. “This does not have my support.
“We have agreed on this goal (to balance budgets by 2010) and France agreed too, and this perspective should unify us,” he said. “We’ll listen to what Sarkozy is going to present tonight ... but in principle, it holds that consolidation is needed now.”
EU budget rules, the Stability and Growth Pact, say that when the economy is doing well, countries should cut their budget deficits by 0.5 percentage point of gross domestic product a year until they reach balance or surplus.
FAIR HEARING
Portugal, which holds the rotating presidency of the European Union, also believes the agreement on balanced books in 2010 should be observed. But its finance minister, Fernando Teixeira dos Santos, said Sarkozy would get a fair hearing.
“It is totally legitimate that the French President wants to expose his points of view, considering budgetary policy is of the utmost importance to any country. The finance ministers will listen to what he has to say with interest and a spirit of openness,” he told reporters in Lisbon.
Other than peer pressure, the euro zone ministers have no means of enforcing such budget improvements.
France forecast last week its deficit would stay put at 2.5 percent of GDP in 2007 and 2008. It had previously expected a 2008 deficit of 1.8 percent.
Such plans were likely to face especially tough criticism from Germany, which has made painful budget deficit cuts much more quickly than France and expects to tighten policy further.
“There are a number of ministers who have a unanimous view that this (a delay in deficit cuts) is not acceptable,” a source involved in the preparation of the meeting said.
Sarkozy, who has repeatedly criticised the strength of the euro as a drag on French growth, is also likely to discuss his exchange rate concerns with the ministers and the ECB.
The euro hit new highs against the Japanese yen on Monday and was close to all-time highs against the U.S. dollar on expectations of more interest rate rises from the ECB against flat U.S. rates and very low Japanese borrowing costs.
The source said French calls for euro zone governments to be more involved in exchange rate policy were likely to find little support because ministers did not feel there was much they could do.
“As ECB President Jean-Claude Trichet would say: ‘We are in a floating exchange rate environment’,” the source said.
Sarkozy’s concern over the strong euro, which hurts the competitiveness of European exports, was echoed at the weekend by Europe’s biggest carmaker, Volkswagen, a major exporter, which said it would consider building a factory in the United States if the dollar remained weak against the euro.
TITLE: Raikkonen Upstages Hamilton
AUTHOR: By Alan Baldwin
PUBLISHER: Reuters
TEXT: SILVERSTONE , England — Ferrari’s Kimi Raikkonen won the British Grand Prix on Sunday to wreck championship leader Lewis Hamilton’s hopes of a home celebration.
The Finn, who led a Ferrari one-two in France last weekend, took the chequered flag 2.4 seconds ahead of McLaren’s double world champion Fernando Alonso thanks to an astute pit-stop strategy.
“This is the perfect result and if we can repeat this we are going to be ahead of everybody,” said Raikkonen, who is now third overall and 18 points adrift of Hamilton with plenty to play for.
Hamilton, the 22-year-old who attracted record crowds to Silverstone — including England midfielder David Beckham and his wife Victoria — for his British debut after an extraordinary run of success, had his lead over team mate Alonso trimmed to 12 points after finishing third.
He led for the first 15 laps only but crossed the line to a roar of sound from the packed grandstands, with banners hailing Formula One’s “New Kid on the Block” and future world champion, after starting on pole position.
Yet while the Briton celebrated his ninth podium finish in nine starts, an unprecedented feat for a rookie driver in Formula One, he recognized that he had paid the price for costly errors.
But for Ferrari’s Felipe Massa stalling on the grid, and starting from the pit lane, he would surely have finished fourth.
One mistake came in the first pit-stop, when Hamilton moved off too early and lost a couple of seconds, and the other was the fundamental set-up of the car.
“I think I made a wrong decision with the set-up. I chose a different rear end to Fernando and I think it really caused me problems during the race,” he said.
“Even in qualifying we didn’t really have the pace we should have had but it was too late by then to change the car. So it was a good lesson.
“But we’ve come away with a ninth podium position and I have to be happy with that and hope to do better in the next race,” added the Briton.
Alonso, who led for the middle stint of the race, knew he was beaten after Raikkonen emerged from his second pit-stop ahead of him.
“I think the Ferraris were a little bit too quick today,” said the Spaniard, who shook his fist at American Scott Speed when the Toro Rosso driver failed to move over swiftly enough when being lapped.
“This result will not change too much and second place was the maximum today.”
Raikkonen’s win was his third of the season, more than any other driver in a fierce title battle between Ferrari and McLaren, and 12th of his career.
Team mate Massa slipped to fourth place overall, one point behind Raikkonen, after finishing fifth. Poland’s Robert Kubica was fourth for BMW Sauber.
Massa also lit up the early stages of the race, while Raikkonen and Hamilton battled it out at the front, with a stirring charge back through the field to 10th place after just eight laps.
Germany’s Nick Heidfeld finished sixth for BMW Sauber with the Renaults of Finland’s Heikki Kovalainen and Italian Giancarlo Fisichella taking the last points on a bright and breezy afternoon at Silverstone.
TITLE: ‘Other Murray’ is First Brit Champ in 20 Years
AUTHOR: By Padraic Halpin
PUBLISHER: Reuters
TEXT: LONDON — Jamie Murray became the first British winner at Wimbledon in 20 years when he and Serbian partner, Jelena Jankovic defeated Jonas Bjorkman of Sweden and Australia’s Alicia Molik in Sunday’s mixed doubles final.
The 6-4 3-6 6-1 victory provided a buzzing late evening Centre Court crowd with their first home winner since Britons Jeremy Bates and Jo Durie won the same event in 1987.
The pair, watched by Murray’s tearful parents Judy and Willie, were given a five-minute standing ovation. Brother Andy, ranked number eight in the world, appeared only at the end, too nervous to watch his older sibling in action.
“It was like destiny, it was meant to happen,” said world singles number three Jankovic of her last minute decision to play in what was a first mixed grand slam for both.
Jankovic joked earlier in the week that her lack of doubles experience rendered her of little use to her partner but it was the 22-year-old Serb’s ferocious returns that eventually fired them to victory.
“She won the match in the end because she kept returning the guy’s serve and I couldn’t do it,” admitted Murray, who has invited his fellow champion to Scotland for Christmas.
The 21-year-old doubles specialist played some scintillating volleys early on to inspire the consistently smiling unseeded pair to a tight first-set victory and fire up the partisan support.
Bjorkman and Molik, who have won 11 doubles grand slam titles between them and were seeded fifth, broke twice to level but a double final-set break gave the Serb, the Scot and the home crowd the championship finish they wanted.
TITLE: Alzheimer Patch Gets Approval
PUBLISHER: Reuters
TEXT: ZURICH — Pharmaceutical group Novartis said on Monday it had received U.S. approval for Exelon Patch, which delivers a treatment for Alzheimer’s disease through a skin patch instead of an oral capsule.
The medication was submitted for review in the European Union in late 2006, Novartis said.
The Federal Food and Drug Administration (FDA) also approved the use of Exelon Patch in treating patients with mild to moderate Parkinson’s disease dementia, Novartis said. The Exelon Patch, which is applied to the back, chest or upper arm, maintains steady drug levels in the bloodstream, improving tolerability and allowing a higher proportion of patients to receive therapeutic doses of medication, with potential improvements in efficacy, Novartis said.
Alzheimer’s disease is a progressive, degenerative disease that alters the brain, causing impaired memory, thinking and behaviour.
Approximately 18 million people worldwide have Alzheimer’s disease, Novartis said. Parkinson’s disease is a chronic and progressive neurological condition that affects approximately 1.5 million people in the United States. Two out of five people with Parkinson’s disease are estimated to have Parkinson’s disease dementia.
TITLE: ‘Very French’ Solution Emerging For EADS
PUBLISHER: The Associated Press
TEXT: PARIS — Shareholders of Airbus’ troubled parent company EADS are close to a deal ending the cumbersome dual management system ahead of talks between French President Nicolas Sarkozy and German Chancellor Angela Merkel, an official said Monday.
German Thomas Enders looks likely to become the sole chief executive of European Aeronautic Defence & Space Co. NV, while a Frenchman, possibly Arnaud Lagardere, will become sole chairman, an offical close to one of the shareholders said.
Frenchman Louis Gallois is set to retain his role as chief of Airbus, while relinquishing the stewardship of EADS that he currently shares with Enders, said the official, who could not be named because such employees are not authorized to talk to the media.
“EADS becomes very French with such an agreement,” said CM-CIC Securities analyst Agnes Blazy. “It’s a good compromise if they get it.”
The unusual structure of EADS, which is run jointly by French and German management, was tapped as one reason cited for Airbus’ troubles in a report by the French Senate last month. The senators recommended a single chairman and a single chief executive officer, leaving shareholders to debate the trickier question of who gets what.
The French government owns 15 percent of EADS, and French conglomerate Lagardere Groupe SCA holds 7.5 percent. The German government holds no direct stake, but DaimlerChrysler — based in Stuttgart, Germany — holds 22.5 percent.
Officials from the French and German governments declined to comment Monday.
The result is still open, EADS spokesman Alexander Reinhardt said, as shareholders continue talks.
TITLE: Wimbledon Watch
TEXT: U.S. Boy Wonder
WIMBLEDON, England (AP) — Long touted as the next great American tennis player, Donald Young played the part Sunday by winning the Wimbledon juniors title.
The 17-year-old Young beat top-seeded Vladimir Ignatic of Belarus.
“If I’d have lost the first set, it would have been a real dogfight to come back and try to win the second because he would have just got even more confident,” said Young, who was seeded third.
“But me getting up a set, I relaxed a little, he started pressing.”
Young, who was born in Chicago and lives in Atlanta, is No. 292 on the ATP Tour rankings, which made him the highest-ranked player in the boys’ draw. He’s 0-10 on the men’s tour but now a two-time major champion in juniors.
Polish Girl Winner
WIMBLEDON, England (AP) — In the girls’ final, Urszula Radwanska of Poland beat Madison Brengle of the United States 2-6, 6-3, 6-0.
Brengle lost 12 straight games after winning the first set and leading 3-0 in the second. She said she was bothered by a stomach muscle injury.
“It happened in my first service game in the third,” said Brengle, who also reached the final at the Australian Open in January.
It was the first time in 26 years that Americans reached both junior finals at Wimbledon. In 1981, Matt Anger beat Pat Cash of Australia, and Zina Garrison defeated Rene Uys of South Africa.
Shirtless Celebration
WIMBLEDON, England (AP) — Arnaud Clement and Michael Llodra went a little too far while celebrating Sunday after beating American twins Bob and Mike Bryan in the Wimbledon men’s doubles final.
The French teammates threw their rackets and shirts into the crowd after upsetting the defending champion Americans 6-7 (5), 6-3, 6-4, 6-4.
Llodra neglected to keep a spare shirt and had to borrow one from Clement’s brother before picking up his trophy.
And that may not even be the worst of it.
“I have to play next week at a tournament in Newport [Rhode Island],” Llodra said. “I have no more rackets now. I don’t know what I am doing.”
Venus Wins All Round
WIMBLEDON, England (AP) — With Venus Williams back in the Wimbledon final, TV ratings went way up.
The coverage of the women’s final and men’s semifinals on Saturday drew a 2.8 overnight rating on NBC, a 27 percent increase from the 2.2 in 2006.
Williams beat Marion Bartoli of France to win her fourth title at the All England Club. Last year’s women’s final was between Amelie Mauresmo of France and Justine Henin of Belgium.
TITLE: Estonia Triumphs In Wife-Carrying Race
AUTHOR: By Sami Torma
PUBLISHER: Reuters
TEXT: SONKAJARVI, Finland — Estonians took gold and silver at the world wife-carrying championships in Finland on Saturday, defying rain and exhaustion to stumble along a path with women clinging upside-down to their backs.
They were among 44 couples from 12 countries competing in the annual event in Sonkajarvi, central Finland.
The race, held for the 12th time, is intended to evoke the spirit of a legendary Finnish brigand, Rosvo-Ronkainen, who made those who wanted to join his gang run through a forest carrying heavy sacks on their backs.
In the modern version, couples race along a 250-meter track, tackling a pool and several hurdles, with the men carrying the women on their backs.
Estonian Madis Uusorg finished first, in a time of 61.7 seconds, despite having Inga Klauson on his back upside-down with her legs around his neck.
Madis Uusorg is the brother of last year’s winner, Margo Uusorg, who holds the world record for the event of 56.9 seconds.
“I’m feeling really great because we won,” Madis said afterwards. “It was my fifth time here, second time to win this competition. And it was the first time to beat my brother!”
Margo won his fifth world championship in 2006 and said at the time it might be his last.
He could not resist turning up again this year, carrying a rather heavily built Julia Galvin from Ireland, but the pair could only manage 29th place.
“I kept my promise, having won last year, of carrying Julia this year,” he said.
John Keerie, a Briton living in Helsinki, ran the race dressed as convict. He carried his wife Aino Telaranta-Keerie into 19th place.
“I drowned in that pool, but at least my wig is still in place. Now for beer,” he said.
The winning couple received plasma televisions and Klauson’s weight, 49 kilograms, in beer.
“My goal was to have fun. But not only did we have fun, but so did our kids and the people here had fun,” said American James Lafferty from Ohio, who carried his wife Susan into 33rd place.
The purpose of it all? So the town of Sonkajarvi can spread a little happiness, said organiser Veikko Tervonen, with a smile.
TITLE: Carlyle Agrees to Buy Sequa
PUBLISHER: Bloomberg
TEXT: WASHINGTON — Carlyle Group, a private-equity firm with $58.5 billion under management, agreed to buy automotive and aerospace parts maker Sequa Corp. for $1.99 billion after the death in 2006 of the company’s founder.
Carlyle, based in Washington, will acquire all of the outstanding shares of Sequa for $175 per share in cash, both companies said today in a statement. That’s 54 percent more than the closing prices of New York-based Sequa’s Class A and Class B shares on July 6.
The estate of Sequa founder Norman E. Alexander, which controls about 54 percent of stockholder votes, agreed to support the sale, the statement said. The deal, which will be financed with equity and debt, is expected to close in the fourth quarter. The company has $894.5 million in debt, according to Bloomberg data.
Sequa’s Class A shares rose 94 cents to $113.52 on July 6 in New York Stock Exchange composite trading. They have gained 41 percent in the past year. The Class B shares fell $2.27, or 2 percent, to $113.75.
TITLE: Morgan Stanley to Purchase Daewoo Engineering HQ
AUTHOR: By Sangim Han
PUBLISHER: Bloomberg
TEXT: SEOUL — Morgan Stanley, investing a record $8 billion in real estate outside the U.S., plans to buy Daewoo Engineering & Construction Co.’s Seoul headquarters for 960 billion won ($1.04 billion).
A real estate fund of the New York-based securities firm will sign a contract for the building purchase Monday, Daewoo said in a regulatory filing.
The 23-story tower adds to a global acquisition spree in which Morgan Stanley has bought offices, hotels and residences. The building was the heart of the Daewoo group before the company collapsed in 1999.
Morgan Stanley, the biggest property investor among Wall Street banks, joins other institutions seeking to invest record capital inflows from pension fund investors looking for higher returns than stocks and bonds offer.
In May, the company agreed to buy Investa Property Group, Australia’s biggest office owner, for A$4.7 billion ($4 billion), and Crescent Real Estate Equities Co. in the U.S. for about $2.9 billion, excluding assumed debt.
In April, Morgan Stanley agreed to buy 13 hotels in Japan from All Nippon Airways Co. for 281.3 billion yen ($2.3 billion) in Japan’s largest real estate purchase by an overseas investor. Morgan Stanley also acquired 10 hotels in Europe from Hilton Hotels Corp. for 566 million euros ($770 million), adding to its more than 80 hotels worldwide.
Red Badge
Kumho-Asiana Group, South Korea’s seventh-largest family run industrial group, last year bought 72 percent of Daewoo, South Korea’s biggest construction company. Morgan Stanley won exclusive rights to negotiate the building purchase from Kumho- Asiana. The sale of the 30-year-old building will be Korea’s largest real estate transaction by value.
The tower, capped by a distinctive red badge, used to have Seoul’s widest floor space per story and was a landmark because of its location in front of the Korean capital’s main rail station.
Daewoo will use the sale proceeds “to repay debt and invest in assets with a high-return outlook,’’ it said in the statement.
The builder disclosed the office sale price today for the first time. The Chosun Ilbo newspaper first reported on the sale on June 22.
Shares of Daewoo rose 1.4 percent to 29,400 won in Seoul. The stock has risen 54 percent this year compared with a 31 percent rise in Korea’s benchmark Kospi.
TITLE: After Falling Off, Aussie Wins Stage 1
AUTHOR: By Julien Pretot
PUBLISHER: Reuters
TEXT: CANTERBURY, England — Australian Robbie McEwen recovered from a crash to clinch the first stage of the Tour de France, a 203-km ride from London to Canterbury on Sunday.
The Predictor-Lotto rider, who already has three green jerseys to his name, outsprinted Norway’s Thor Hushovd and Belgian Tom Boonen for his 12th Tour stage victory.
McEwen crashed 21 km from the finish line but was soon back on his bike with a bruised knee and a sore wrist.
The 35-year-old Australian entered the last straight safe in the bunch and claimed an impressive win with a late burst of speed.
“I can’t believe I’ve won, the moment I crashed I thought that’s that, and even my Tour could have been over,” McEwen told reporters.
“But I pushed through and I’ve really got to thank my team mates for the work they did to bring me through.”
YELLOW JERSEY
Swiss Fabian Cancellara of the CSC team retained the overall leader’s yellow jersey after finishing comfortably in the peloton.
Briton David Millar, who finished 13th in Saturday’s prologue round the streets of London, took the polka dot jersey for the best climber after a 165-km breakaway and is third overall.
“I just want to say thank you to the British public for the support they’ve given us,” said Millar.
“I just rode out of my skin today and that was a thank you to everybody for coming out, that was amazing.”
The stage started from Greenwich and went through the county of Kent in south east England, watched by an estimated two million people.
Millar broke away some seven km after the start and was soon joined by Frenchmen Stephane Auge and Freddy Bichot, Ukraine’s Andriy Grivko and Belarus’s Aleksandr Kuschynski.
The escapees built a six-minute gap with Millar and Grivko being dropped 35 km from the finish line. Cofidis rider Auge then went solo only to be swallowed by the peloton with 18 km remaining.
British hope Mark Cavendish lost any hope of clinching victory after mechanical problems forced him to change bike twice in the last 20 km.
Spaniard Eduardo Gonzalo Ramirez of the Agritubel team was the first casualty of the Tour. He was forced to retire with a shoulder injury after smashing the windscreen of a Caisse d’Epargne car.
TITLE: A Call to Arms as Iraq Slides Into Catastrophe
AUTHOR: By Robert H. Reid
PUBLISHER: The Associated Press
TEXT: BAGHDAD, Iraq — Prominent Shiite and Sunni politicians called on Iraqi civilians to take up arms to defend themselves after a weekend of violence that claimed more than 220 lives, including 60 who died Sunday in a surge of bombings and shootings around Baghdad.
The calls reflect growing frustration with the inability of Iraqi security forces to prevent extremist attacks.
The weekend deaths included two American soldiers — one killed Sunday in a suicide bombing on the western outskirts of Baghdad and another who died in combat Saturday in Salahuddin province north of the capital, the U.S. command said. Three soldiers were wounded in the Sunday blast.
Sunday’s deadliest attack occurred when a bomb struck a truckload of newly recruited Iraqi soldiers on the outskirts of Baghdad, killing 15 and wounding 20, a police official at the nearest police station said on condition of anonymity because he was not authorized to release the information.
Also Sunday, two car bombs exploded near simultaneously in Baghdad’s mostly Shiite Karradah district, killing eight people. The first detonated at 10:30 a.m. near a closed restaurant, destroying stalls and soft drink stands. Two passers-by were killed and eight wounded, a police official said.
About five minutes later, the second car exploded about a mile away near shops selling leather jackets and shoes. Six people were killed and seven wounded, said the official, who also spoke on condition of anonymity because he was not authorized to talk to the media.
The Karradah area includes the offices of the Supreme Islamic Council in Iraq, the biggest Shiite party in parliament, and is considered among the safest parts of the capital.
Elsewhere, a bomb hidden under a car detonated Sunday at the entrance of Shorja market — a mostly Shiite area of central Baghdad that has been hit repeatedly by insurgents — killing three civilians and wounding five, police said.
Police also reported they found the bodies of 29 men Sunday scattered across Baghdad — presumed victims of sectarian death squads. Four other people were killed Sunday in separate shootings in Baghdad, police said on condition of anonymity because they were not supposed to release the information.
The string of attacks in the Iraqi capital showed that extremists can still unleash strikes in the city despite a relative lull in violence here in recent weeks amid the U.S. offensives in and around Baghdad.
But the bloodshed in the Baghdad area paled in comparison to the carnage Saturday when a truck bomb devastated the public market in Armili, a town north of the capital whose inhabitants are mostly Shiites from the Turkoman ethnic minority.
There was still confusion over the death toll.
Two police officers — Col. Sherzad Abdullah and Col. Abbas Mohammed Amin — said 150 people were killed. Other officials put the death toll at 115. Abbas al-Bayati, a Shiite Turkoman lawmaker, told reporters in Baghdad that 130 had died.
Regardless of the precise figure, the attack was clearly among the deadliest in Iraq in months. It reinforced suspicions that al-Qaida extremists were moving north to less protected regions beyond the U.S. security crackdown in Baghdad and on the capital’s northern doorstep.
In a joint statement, U.S. Ambassador Ryan Crocker and U.S. military commander Gen. David Petraeus said the attack against the Turkoman Shiites was “another sad example of the nature of the enemy and their use of indiscriminate violence to kill innocent citizens.”
Turkish military air ambulances evacuated 21 people wounded in the attack for treatment in Turkish hospitals, the country’s Foreign Ministry said. Turkey feels special responsibility for its ethnic brethren, the Turkoman, who speak a Turkic language.
During a news conference Sunday in Baghdad, al-Bayati criticized the security situation in Armili, saying its police force had only 30 members and that the Interior Ministry had finally responded to requests for reinforcements only two days before the attack.
In the absence of enough security forces, al-Bayati said authorities should help residents “arm themselves” for their own protection.
The call for civilians to take up arms in their own defense was echoed Sunday by the country’s Sunni Arab vice president, Tariq al-Hashemi, who said all Iraqis must “pay the price” for terrorism.
“People have a right to expect from the government and security agencies protection for their lives, land, honor and property,” al-Hashemi said in a statement. “But in the case of (their) inability, the people have no choice but to take up their own defense.”
He said the government should provide communities with money, weapons and training and “regulate their use by rules of behavior.”
Another prominent Sunni lawmaker, Adnan al-Dulaimi, said Prime Minister Nouri al-Maliki had failed to provide services and security but he stopped short of saying his followers would seek to topple the Shiite-led government in a no-confidence vote.
The CBS Evening News reported Saturday that a large block of Sunni Iraqi politicians will ask for a parliamentary vote of no-confidence against al-Maliki’s government on July 15.
“The situation has become terribly bad,” al-Dulaimi told The Associated Press. “All options are open for us. We are going to study the situation thoroughly.”
TITLE: Kidnapped U.K.Girl Freed in Nigeria
PUBLISHER: The Associated Press
TEXT: PORT HARCOURT, Nigeria —A British toddler was released by gunmen in southern Nigeria on Sunday and reunited with her parents, who said she was fine but hungry and covered in mosquito bites.
Mike Hill, the father of 3-year-old Margaret Hill, told Sky News by telephone that no ransom was paid. His daughter could be heard in the background as he spoke.
“She’s coming alive all the time. ... She was in a bit of a trance when we first got her back,” he said. “I don’t think she’s had very much to eat, because she’s hungry now,” he added. “She’s covered in mosquito bites. The bites are really bad.”
The toddler told The Associated Press by phone that she was “fine” and happy to see her mother.
“She looks well and she is in very good spirits,” state government spokesman Emmanuel Okah said as the child laughed in the background.
In Britain, Foreign Secretary David Miliband thanked those who worked to secure her release.
“I was delighted and relieved to hear of Margaret’s release,” he said. “I am grateful to the Nigerian authorities for all their help and I hope the perpetrators will be swiftly brought to justice.”
Gunmen seized Margaret while the car taking her to school idled in traffic Thursday in Port Harcourt, an oil industry center.
Her Nigerian mother, Oluchi Hill, had previously said the abductors had contacted her and demanded an unspecified ransom for Margaret’s release. She had also said her daughter was being fed only bread and water, and that the gunmen threatened to kill the girl if the parents did not meet their demands — including one that the father take his daughter’s place.
Her father has lived in Nigeria for years and works in the energy industry. He also runs a popular nightspot in Port Harcourt.
Asked to describe the ordeal he and his wife went through, Mike Hill said: “The pressure, it’s unbelievable ... You just stop eating, you think of nothing else, you’re just worrying all the time.”
It was the first abduction of a foreign child in the increasingly lawless oil region of Africa’s biggest oil producer.
Margaret, whose driver was stabbed as he tried to shield her during the attack, is the third child to be seized in six weeks. The other two victims, both released unharmed after a few days in captivity, were the children of prominent Nigerian families.
Kidnappings in the region have focused mostly on foreign, male workers working for international companies.
TITLE: Bush Battles Increasingly Tough Congressional Line
AUTHOR: By Laurie Kellman
PUBLISHER: The Associated Press
TEXT: WASHINGTON — U.S.Congressmen returning from their Independence Day break are ready for battle with the White House, with Democrats decrying President George Bush’s commutation of former aide Lewis “Scooter” Libby’s prison sentence and fighting Bush’s latest claim of executive privilege.
Both events occurred during Congress’ vacation, inflaming an intense battle between Democrats and Bush over his use of executive power. There was relatively high tension on both ends of Pennsylvania Avenue as majority Democrats — and increasing numbers of Republicans — challenged Bush’s Iraq war policy.
Meanwhile, several Democratic-run investigations are playing out this week as they head toward contempt of Congress citations and, if neither side yields, federal court:
n Monday is the deadline for the White House to explain why Bush is refusing to comply with a congressional subpoena for e-mails and other documents on his aides’ involvement in the firings of eight federal prosecutors last winter. The White House is not expected to comply with the deadline.
n In a pair of hearings Wednesday, the House Judiciary Committee will look at Bush’s commutation last week of Libby’s prison sentence for obstruction of justice in the CIA leak case. The Senate Judiciary Committee is expected to hear from former White House political director Sara Taylor about the prosecutor firings, according to Chairman Patrick Leahy.
n The next day, the House panel is expected to turn to the prosecutor firings and has scheduled testimony from former White House Counsel Harriet Miers. It’s unclear whether she will appear.
On Iraq, Democrats expect to resume legislative challenges to Bush’s policy on the war as the Senate this week takes up a major defense spending bill. The administration has been concerned about an escalation of Iraqi war fervor. So much so that Defense Secretary Robert Gates canceled a four-nation South American tour this week to work with the White House on Iraq policy.
The weeklong Fourth of July break did not cool disputes between Congress and the White House. In fact, Bush’s commutation of Libby’s prison sentence teed up a new project for Democratic investigators.
Leahy and others said they suspect that Bush commuted Libby’s sentence to keep Vice President Dick Cheney’s former chief of staff from revealing internal White House discussions.
TITLE: UN Agency Approves Mission to N. Korea
AUTHOR: By Mark Heinrich and Karin Strohecker
PUBLISHER: Reuters
TEXT: VIENNA — The UN nuclear watchdog’s governing body agreed on Monday to send monitors to North Korea to verify a shutdown of its atomic bomb program, launching what is likely to be a long and arduous disarmament process.
It would be the first International Atomic Energy Agency mission in the reclusive Stalinist state since it expelled IAEA inspectors in 2002 after Washington accused it of a clandestine effort to refine nuclear fuel.
Clearance for IAEA monitors to fly into North Korea was expected once Pyongyang receives a first batch of fuel later this week, pledged as part of its February disarmament accord with the United States and four other powers.
South Korea said a ship carrying the fuel would leave on Thursday on a voyage likely to take two days.
In a special session, the IAEA’s 35-nation Board of Governors approved by consensus the return of nuclear monitors to North Korea 10 days after senior IAEA and North Korean officials agreed ground rules for verifying the atomic halt.
Diplomats said nine monitors would install security cameras and place seals on infrastructure in Yongbyon, including its 5 megawatt reactor where North Korea has produced plutonium, leading to its first test nuclear explosion last October.
IAEA Director Mohamed ElBaradei said the IAEA expected to get monitors into North Korea “within the next week or two.”
“Shutting down the facilities according to our experts will not take much time — probably a few days,” he told reporters.
“But then we have to have other equipment in place to ensure we are able to monitor the (shutdown), so these activities are going to happen in the next couple of weeks.”
IAEA diplomats said at least two monitors would remain on site indefinitely while North Korea and five powers — the United States, Russia, China, Japan and South Korea — negotiate further steps towards denuclearization.
But getting Pyongyang to go beyond a freeze to an elimination of its nuclear capability and its plutonium stockpile is seen as a much tougher challenge as it is the North’s sole clout in a world it sees as widely hostile.
“This is the beginning of (what is) going to be a long and complex process,” ElBaradei cautioned.
After throwing out UN inspectors in 2002, North Korea quit the Non-Proliferation Treaty (NPT), which the IAEA enforces. In 2005, Pyongyang declared it had nuclear arms, and unnerved the world with a test-detonation a year later.
The IAEA verification task is only an “ad hoc arrangement,” not a normal, full-fledged inspections regime. That would have to be negotiated later as part of a new Safeguards Agreement to bring North Korea back into the NPT.
North Korea agreed on February 13 to close Yongbyon and take steps to disable all its nuclear facilities in exchange for 950,000 more tonnes of fuel oil or aid of equivalent value.
Elbaradei put the cost of the IAEA monitoring mission at 1.7 million euros ($2.3 million) for 2007 and 2.2 million euros in 2008 and said the IAEA was assured of getting extra-budgetary funds for the task from various donors.
Diplomats said U.S. and European Union envoys pledged at least some of the money at the board meeting with Japan, Russia, China and South Korea likely to chip in the rest if needed.
Earlier on Monday, the board approved an IAEA budget of 295 million euros ($402 million) for 2008 after agency planners cut a requested rise from 2 percent to 1.4 percent above inflation.
ElBaradei said the deal was “far from adequate” at a time of rising nuclear proliferation challenges like Iran.
TITLE: 3 Jailed For London Bomb Plot
AUTHOR: By Tariq Panja
PUBLISHER: The Associated Press
TEXT: LONDON — Three men were found guilty Monday of plotting to bomb London’s public transport system on July 21, 2005, two weeks after a coordinated suicide bombing attack on the network killed 52 commuters.
The jury was still deliberating on three co-defendants.
The men were accused of attempting to detonate explosives-laden backpacks filled with explosives on three subway trains and a bus in a mirror image of the July 7, 2005 attacks. The devices — made from hydrogen peroxide and flour — failed to explode, and no one was injured.
All six suspects denied the charges, saying the devices were duds and their actions a protest against the Iraq war.
The verdicts, which follow a six-month trial, come days after police uncovered a plot to detonate car bombs in London’s entertainment district and two men rammed a flaming Jeep Cherokee into Glasgow International Airport.
Convicted of conspiracy to murder were Muktar Said Ibrahim, 29; Yassin Omar, 26; and Ramzi Mohammed, 25.
Judge Adrian Fulford told the jury of nine women and three men he would accept 10-2 majority verdicts on the other three defendants, Hussain Osman, 28; Manfo Kwaku Asiedu, 34; and Adel Yahya, 24.
The explosives were packed in plastic tubs, with screws, bolts and other pieces of metal taped to the outside as shrapnel. The detonators contained triacetone triperoxide (TATP), an explosive used by the July 7 bombers.
Omar and Mohammed set off their devices aboard two subway trains; a couple of hours later Ibrahim’s device failed aboard a double-decker bus.
Police said scientific tests on the devices proved they were all viable. They do not know why they failed.
During the trial, Asiedu turned on the others and claimed Ibrahim, the gang’s self-proclaimed leader, had wanted the attacks “to be bigger and better” than the July 7 bombs.
The botched plot rattled a city already shaken by the July 7 attacks, as Scotland Yard detectives launched the biggest manhunt in British history.
Much of the prosecution’s case was based on eyewitness testimony and closed circuit television footage from the targeted subway cars and bus.
In one of the most chilling pieces of footage, Mohammed attempts to detonate his charge with his backpack facing a mother and young child. Moments, later passengers are seen running to the other side of a carriage, while an off duty firefighter, Angus Campbell, remonstrates with Mohammed.
A day after the failed attacks, police shot dead a Brazilian electrician aboard a Tube train after mistaking him for one of the bombers.
Police said they were under enormous pressure to capture the men.
TITLE: Boeing Launches New 787 ‘Dreamliner’ Airplane
AUTHOR: By Elizabeth M. Gillespie
PUBLISHER: The Associated Press
TEXT: EVERETT, Washington — Boeing raised the curtain on its first fully assembled 787 on Sunday to an audience of thousands who packed into its widebody assembly plant for the plane’s extravagantly orchestrated premiere.
With flight attendants onstage from each airline that has ordered the jet, the giant factory doors opened wide as the plane slowly moved into view to the strains of a theme song composed specially for the 787, which Boeing calls the Dreamliner.
“Our journey began some six years ago when we knew we were on the cusp of delivering valuable new technologies that would make an economic difference to our airline customers,” Mike Bair, vice president and general manager of the 787 program, told the crowd.
“In our business, that happens every 15 years or so, so you’ve got to get it right.”
Boeing Chief Executive Jim McNerney said the 787 will bring about a “dramatic improvement in air travel: to make it more affordable, comfortable and convenient for passengers, more efficient and profitable for airlines, and more environmentally progressive for our Earth.”
Boeing has won more than 600 orders from customers eager to hold the jet maker to its promise that the midsize, long-haul jet will burn less fuel, be cheaper to maintain and offer more passenger comforts than comparable planes flying today.
The 787, Boeing’s first all-new jet since airlines started flying the 777 in 1995, will be the world’s first large commercial airplane made mostly of carbon-fiber composites, which are lighter, more durable and less prone to corrosion than aluminum.
To date, Boeing has won 677 orders for the 787, selling out delivery positions through 2015, two years after Airbus SAS expects to roll out its competing A350 XWB. Thirty-five of those orders came Saturday, with Air Berlin ordering 25 and a Kuwaiti company taking 10 for Kuwait Airways.
In a rare tip of the hat to the competition, Airbus congratulated Boeing on the 787, whose commercial success has chipped away at the edge the European plane maker once held over its Chicago-based rival.
“Even if tomorrow Airbus will get back to the business of competing vigorously, today is Boeing’s day — a day to celebrate the 787,” Airbus co-CEO Louis Gallois said in a letter to McNerney.
“Today is a great day in aviation history. Whenever such a milestone is reached in our industry it is always a reflection of hard work by dedicated people inspired by the wonder of flight,” the letter said.
Airbus customers forced it to redesign the A350, which pushed back production. Airbus also has faced problems with its A380 superjumbo, which has been hit with delays that slashed profit projections for Airbus’ parent company, European Aeronautic Defence & Space Co. Boeing hired former NBC “Nightly News” anchor Tom Brokaw to serve as master of ceremonies for the 787 premiere — held, probably not coincidentally, on 07/08/07 — which was broadcast live on the Internet and on satellite television in nine languages to more than 45 countries. The company rolled out red carpet and set out roughly 15,000 seats for spectators at one end of the 787 factory north of Seattle.
The company invited thousands of its employees and retirees to watch via satellite at the NFL stadium where the Seattle Seahawks play.
TITLE: SPIBA Committees Up-date
TEXT: The SPIBA Legislation & Lobbying Committee continues its efforts to improve the investment climate in the region and to provide SPIBA members with opportunities to exchange experience and ideas related to the legal frame of business operations.
Currently, the agenda of the Committee includes such issues as customs payment security in importing goods as in-kind contribution to charter capital; special economic zone in St. Petersburg: opportunities and regulatory problems; tax incentives for investors in St. Petersburg and the Leningrad Oblast; the implementation of the regime of destruction for fully depreciated equipment; determination of the “put into operation date” of the production equipment for tax and accounting purposes; procedures for destruction of the equipment that was imported as contribution to the charter capital; issues related to the application of the customs concession with respect to the technological equipment imported as in-kind contribution; and independent power sources, including cogeneration facilities (combined heat-and-power generating units): getting approvals of various authorities.
The SPIBA HR Committee meets regularly to discuss and deal with problems related to personnel recruitment, retention and development.
The agenda of the Committee has included such issues as changes in labor legislation and military-service registration; interaction between employers and trade unions; personnel recruitment: cooperation between companies and high schools; blue collar recruitment: cooperation between companies and vocational schools; problem of labor force import from regions.
The SPIBA Marketing Committee has started a new life as a forum for marketing and PR specialists to exchange ideas and experience and obtain useful information on marketing-related issues and market trends.
As a start, on June 20, 2007, the Committee held its meeting where Mr. Anders Liljenberg, Dean, Stockholm School of Economics in Russia, made a presentation on Global Trends in Marketing.
On July 17, 2007, the Committee will hold its open meeting at the Baltika Brewery to learn about the Baltika’s strategy in its highly competitive market.
At the moment we are making a survey among marketing and PR specialists working at SPIBA member-companies to compile and range the list of issues to be discussed at meetings of the SPIBA Marketing Committee and at other SPIBA events.
SPIBA members are welcome to take part in all the SPIBA’s Committees and send us their issues of concern to be included in their agendas.
For more details, please contact Natalia Kudryavtseva, SPIBA Executive Director, at nak@spiba.ru, or Svetlana Solovieva, SPIBA PR Manager, at pr@spiba.ru, or by telephone at +7-812-325-9091, 579-1815.
SPIBA EXECUTIVE COMMITTEE MEMBERS:
Ludmila Murgulets, Stockholm School of Economics,
Executive Committee Chairperson
Christian Courbois, Westpost
Sebastian FitzLyon, S.Zinovieff & Co.,
Honorary Consul of Australia in St. Petersburg
Irina Galieva, JT International
Glenn Kolleeny, Salans
Sergey Spasennov, Pepeliaev, Goltsblat & Partners
Ruslan Vasutin, DLA Piper
Elena Marchenko, BSH Bosch und Siemens HausgerEte GmbH (affiliated member)
Natalia Kudryavtseva, Executive Director
TITLE: SPIBA welcomes its new members!
TEXT: • Digital Advertising Group
• Enfo
• Mr. Henric Nilsson
Digital Group is a Russian company providing a full range of services for the design and installation of audiovisual systems and low-power cable circuitry.
It was founded in 2004. The company’s portfolio includes projects ranging from video, sound and light installations in cinemas, concert halls, business centers, shopping malls, car dealers, production monitoring centers, to implementation of the integrated solutions in fire protection systems, intrusion prevention systems, fixed line networks, Wi-Fi, and Internet for town houses and blocks.
Digital Group’s customers are both Russian and International companies.
Digital Group’s expertise and integrated approach to project implementation allows our customers to save resources and guarantees high quality, reliability, and flexibility of implemented solutions.
Enfo is a Finnish Information Technology service provider. Its services include Information Technology and InformationLogistics Services. Enfo’ s IT service mission is to develop and produce IT services which support, and enhance the efficiency of businesses and organizations operating in Finland. Enfo’ s net sales amounted to 134.9 million euros and operating profit 12.2 million euros in 2006. Enfo’s 500 IT-specialists guarantee that customers get the best out of their IT. www.enfo.fi
TITLE: SPIBA Events Snapshots
TEXT: What happened since April 2007
24.04.07
SPIBA Seminar: Trademark: Live
Issues and Answers
Leading sponsor: ARS-Patent
Intellectual Property Law Firm
Supporter: Corinthia Nevskij Palace Hotel
26.04.07
St. Petersburg Entrepreneurship Group in partnership with the US – Russia Center for Entrepreneurship
Managing Strategic Change and
Innovation: Micromanagement Versus Creating a Culture of Change
17.05.07
SPIBA Round Table: Personnel
Recruitment: Cooperation Between Companies and High Schools
Supporter: Graduate School of Management,
St. Petersburg State University
31.05.07
SPIBA Welcome-Summer Networking Reception
Leading sponsor: Park Inn Pribaltiyskaya Hotel
20.06.07
Topical Meeting of SPIBA Marketing Committee: Global Trends in Marketing
Speaker: Mr. Anders Liljenberg, Dean, Stockholm School of Economics in Russia
27.06.07
SPIBA General Meeting: Statistics and Business
Guest Speaker: Oleg N. Nikiforov, Head of the Territorial Department of the Federal State Statistics Service for St. Petersburg and the Leningrad Oblast
29.06.07 – SPIBA White Nights Boat Cruise.
Forthcoming Events
11.07.07
Seminar: Style Rules for Classic Men’s Wear
17.07.07
Open Meeting of the SPIBA Marketing Committee – Site Visit to the Baltika brewery
We are planning a lot of events in the future. Keep an eye on SPIBA information to be distributed by e-mail and announced.
TITLE: SPIBA Companies News
TEXT: ANCOR holding, one of the Russian recruitment and HR consulting services market leaders, marks its 17th anniversary with 30 branches in Russia, Ukraine and Belarus. In St. Petersburg the holding appointed a new Branch Director – Anna Silina. Anna has been working in the field of recruitment (including previous experience in ANCOR) and HR management since 1999. Following the general strategy aimed at service quality improvement, the best holding specialists as well as HR professionals with ANCOR background are additionally invited to join the St. Petersburg team.
As from in autumn 2007, DOUBLE AA CLUB is successfully developing in the Astoria and Angleterre Hotels. Children aged under 12 are welcome to enroll. Each kid receives a club card which allows the family to use special conditions when planning a birthday celebration in hotels or visiting children’s events. Club members receive gifts and treats from the club. The project is aimed to straighten relations with top-management community and to provide children with socializing possibilities.
AVANTA Personnel began its operations in St. Petersburg in April and already employs 100 people in two offices. On June 7 together with KS Knowledge & Skills we held a round table for HR managers in hospitality. All participants agreed that efficient motivation systems and competitive salaries are main tools to solve crucial problems with staff recruitment and retention. The creation and development of a corporate university could be a very efficient part of HR policy especially for hotels.
On July 2, 2007, the Financial Times published its list of the 500 largest companies in the world and long-time member of the list Baltika Breweries was cited in the leading position among food sector manufacturers of Eastern Europe. Compared to last year, the market capitalisation of Baltika Breweries grew by 46.4% and amounts to $7.67 billion. The Company’s new marketing strategy played a significant role in its improved financial indicators. This strategy was launched at the beginning of 2007 and is based on thorough research of the market and consumer preferences. Baltika Breweries is solidly anchored in the Financial Times list in 26th place, where it is in the company of oil majors and metal industry enterprises.
BusinessLink Personnel is delighted to announce that in May Natalya Martikainen joined the firm as Business Development Manager. Natalya graduated from the School of International Relations at St.Petersburg State University. Her professional background is mostly connected with Ancor company, where she held the position of Salary Survey Project Manager. Natalya’s core responsibilities now are to explore new business opportunities and develop relations with current clients of BusinessLink Personnel.
Every June St. Petersburg welcomes the St. Petersburg Urban Race, a city adventure event. Deloitte has been supporting it for several years and our employees actively participate in the competition including people from Moscow. This year, Deloitte worked together with Team Fabric, the organizer of the race, to set up a new category – Business. The idea was to raise money for charity in a new and fun way. Together with the Trading Chain Lenta, Deloitte covered all organizational expenses and companies entering teams transferred their participation fee directly to two charities, Parent Bridge and Every Child.
Ernst & Young played a leading role in the St. Petersburg International Economic Forum that took place on 8-10 June 2007. We were represented by James Turley, Chairman and CEO of Ernst & Young Global, Karl Johansson, CIS Managing Partner, Ralf Wagener, Managing Partner of Ernst & Young’s office in St. Petersburg, and other practice leaders. James Turley spoke at the main plenary session on emerging markets. Together with Vice Premier Sergei Naryshkin, James Turley hosted a panel on foreign direct investment. James Turley attended meetings with President Putin and Vice Premier Ivanov with a group of CEOs to discuss the investment climate in Russia and economic reforms.
Fintra is extending to Moscow. Elena Fedyashina began representing Fintra in Moscow from March 1, 2007. While Finnish companies usually begin their operations in Russia from North-West region, some of them already run effective businesses in Moscow. With this step Fintra accomplishes its main goal in Russia – to support Finns and Russians in working effectively together. Elena Fedyashina has a wide experience as a trainer and also in business.
On June 21, 2007, Globus-Leasing Ltd. issued the sixth bonded loan for 500 million RUR. Hence, the total flow of the funds received on the stock market reached 2.52 billion RUR. Also Globus Leasing Ltd. paid the next yield of bonds to the amount of 32 million RUR. At the same day it was announced that “Moskovskii Mezhdunarodnui bank” had extended the available credit for Globus Leasing Ltd. for 200 million RUR. The total available credit in this bank is 500 million RUR now.
In June the Graduate School of Management (GSM), SPbSU hosted two unique guest lectures. “Knowledge management: Japanese approach” was given on June, 7 by Prof. Hirotaka Takeuchi, dean of the Graduate School of International Corporate Strategy at Hitotsubashi University in Tokyo and invited professor at Harvard Business School, in the framework of the “Management gurus at GSM” series of lectures. On June, 28 Prof. Robert Aumann, Nobel Prize winner in Economics (2005), invited professir at Princeton, Yale, Stanford and other leading universities delivered a lecture on game engineering in the series “Noble Prize winners at GSM”. More information about the lectures can be found at www.gsm.pu.ru.
ITM Group (Joint-Stock Company INTECH) company has confirmed its professionalism and competence once again – the first founding took place at the newly commissioned production facility at the Tikhvin ferro-chromium alloy producing plant in Tikhvin. Work for the period during 2006-2007 resulted in this event. ITM Group has signed a contract with the general contractor – Finnish company YIT – for carrying out the works for the project of building a new water treatment plant with 1500 t/hour capacity at the Kirishi state district power station.
The beginning of summer 2007 was rich in terms of events for Kelly Services. Kelly Engineering and IT Resources moved to the new spacious office on Vasilievsky Ostrov. The opening ceremony was visited by City Government representatives, top-managers of the Client companies, as well as European and Russian Kelly top-managers. Kelly Services continued to prove its expertise in the HR sphere: in June Kelly representatives participated in The Week of St.Petersburg in Hamburg and the XI St. Petersburg International Economic Forum.
Within the framework of the XI St. Petersburg International Economic Forum (9-11 June 2007) KPMG held a round-table on Private-Public Partnership to Implement Socially Important Projects: Affordable Housing, Healthcare and Culture. The speakers included Dmitry Amunts, Russian Deputy Minister of Culture, Pavel Voitov, Home Mortgage Lending Agency, as well as Paul Townsend, UK Department of Health, and Duncan McCallum, English Heritage, who shared European experience in PPP in the social sphere. The round-table was moderated by Alexander Yerofeyev, partner, KPMG.
STEP Construction continues to take part in conferences in construction. The 5th Annual Conference “Warehouse Real Estate of Russia” took place in 30-31 May. The Vice-President of STEP Construction Yury B. Ioffe covered aspects of investment risks minimization at construction of logistic complexes. The first practical conference “Where to obtain qualitative General Contract?” in the cycle “Building Process Management” took place on 24 April. Alexander Stujt, Project Manager, spoke from STEP Construction. He covered some aspects related to increase of investment project appeal through General Contractor’s role.
Technopolis will expand its operations in St.Petersburg and offer companies high-class operating environments in the city’s downtown area. Technopolis has signed an agreement with Stockmann Plc to lease approximately 4, 700 sq.m. office premises in the Nevsky Shopping Centre due to be completed in the spring of 2009. The Stockmann-developed Nevsky Centre, which will have about 50, 000 sq.m. of commercial premises, is under construction on Nevsky Prospekt, right in the downtown area. The location is excellent for those Technopolis customers who need to be in the city center.
TITLE: SPIBA WHITE NIGHTS BOAT
Sailing in any Weather
TEXT: On June 29, 2007, SPIBA held its regular summer White Nights Boat Cruise. This year SPIBA’s crew numbered around 130 people. Despite the rainy weather, members and guests were cruising the Neva River and enjoyed fantastic live music by the Verona trio, entertainment, and dancing. Some happy guests were lucky to win exciting lottery prizes, while all the guests won from the warm atmosphere of friendly networking.
SPIBA is grateful to those who helped to organize the White Nights Boat Cruise:
Leading sponsor: Johnson Controls International
Sponsor: ITM Group
Supporters: Baltika, Corinthia Nevskij Palace Hotel, Kappa St. Petersburg, Norman DL Consulting, Ventra Employment
Lottery sponsors: AAA-Movers, Ambassador Hotel, Grand Hotel Europe, Machiavelli Luxury Group, Renaissance St. Petersburg Baltic Hotel, Subway, St. Petersburg Yellow Pages.